Download:
pdf |
pdfVol. 83
Thursday,
No. 134
July 12, 2018
Pages 32191–32562
amozie on DSK3GDR082PROD with FRONT MATTER WS
OFFICE OF THE FEDERAL REGISTER
VerDate Sep 11 2014
19:02 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00001
Fmt 4710
Sfmt 4710
E:\FR\FM\12JYWS.LOC
12JYWS
amozie on DSK3GDR082PROD with FRONT MATTER WS
II
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018
The FEDERAL REGISTER (ISSN 0097–6326) is published daily,
Monday through Friday, except official holidays, by the Office
of the Federal Register, National Archives and Records
Administration, Washington, DC 20408, under the Federal Register
Act (44 U.S.C. Ch. 15) and the regulations of the Administrative
Committee of the Federal Register (1 CFR Ch. I). The
Superintendent of Documents, U.S. Government Publishing Office,
Washington, DC 20402 is the exclusive distributor of the official
edition. Periodicals postage is paid at Washington, DC.
The FEDERAL REGISTER provides a uniform system for making
available to the public regulations and legal notices issued by
Federal agencies. These include Presidential proclamations and
Executive Orders, Federal agency documents having general
applicability and legal effect, documents required to be published
by act of Congress, and other Federal agency documents of public
interest.
Documents are on file for public inspection in the Office of the
Federal Register the day before they are published, unless the
issuing agency requests earlier filing. For a list of documents
currently on file for public inspection, see www.ofr.gov.
The seal of the National Archives and Records Administration
authenticates the Federal Register as the official serial publication
established under the Federal Register Act. Under 44 U.S.C. 1507,
the contents of the Federal Register shall be judicially noticed.
The Federal Register is published in paper and on 24x microfiche.
It is also available online at no charge at www.fdsys.gov, a service
of the U.S. Government Publishing Office.
The online edition of the Federal Register is issued under the
authority of the Administrative Committee of the Federal Register
as the official legal equivalent of the paper and microfiche editions
(44 U.S.C. 4101 and 1 CFR 5.10). It is updated by 6:00 a.m. each
day the Federal Register is published and includes both text and
graphics from Volume 59, 1 (January 2, 1994) forward. For more
information, contact the GPO Customer Contact Center, U.S.
Government Publishing Office. Phone 202-512-1800 or 866-5121800 (toll free). E-mail, gpocusthelp.com.
The annual subscription price for the Federal Register paper
edition is $749 plus postage, or $808, plus postage, for a combined
Federal Register, Federal Register Index and List of CFR Sections
Affected (LSA) subscription; the microfiche edition of the Federal
Register including the Federal Register Index and LSA is $165,
plus postage. Six month subscriptions are available for one-half
the annual rate. The prevailing postal rates will be applied to
orders according to the delivery method requested. The price of
a single copy of the daily Federal Register, including postage,
is based on the number of pages: $11 for an issue containing
less than 200 pages; $22 for an issue containing 200 to 400 pages;
and $33 for an issue containing more than 400 pages. Single issues
of the microfiche edition may be purchased for $3 per copy,
including postage. Remit check or money order, made payable
to the Superintendent of Documents, or charge to your GPO
Deposit Account, VISA, MasterCard, American Express, or
Discover. Mail to: U.S. Government Publishing Office—New
Orders, P.O. Box 979050, St. Louis, MO 63197-9000; or call toll
free 1-866-512-1800, DC area 202-512-1800; or go to the U.S.
Government Online Bookstore site, see bookstore.gpo.gov.
There are no restrictions on the republication of material appearing
in the Federal Register.
How To Cite This Publication: Use the volume number and the
page number. Example: 83 FR 12345.
Postmaster: Send address changes to the Superintendent of
Documents, Federal Register, U.S. Government Publishing Office,
Washington, DC 20402, along with the entire mailing label from
the last issue received.
SUBSCRIPTIONS AND COPIES
PUBLIC
Subscriptions:
Paper or fiche
202–512–1800
Assistance with public subscriptions
202–512–1806
General online information
202–512–1530; 1–888–293–6498
Single copies/back copies:
Paper or fiche
202–512–1800
Assistance with public single copies
1–866–512–1800
(Toll-Free)
FEDERAL AGENCIES
Subscriptions:
Assistance with Federal agency subscriptions:
Email
[email protected]
Phone
202–741–6000
.
VerDate Sep 11 2014
19:02 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00002
Fmt 4710
Sfmt 4710
E:\FR\FM\12JYWS.LOC
12JYWS
III
Contents
Federal Register
Vol. 83, No. 134
Thursday, July 12, 2018
Agricultural Marketing Service
Comptroller of the Currency
RULES
NOTICES
Establishment of Handler Diversions, Reporting
Requirements, and New Information Collections:
Cranberries Grown in States of Massachusetts, et al.,
32193–32198
Agency Information Collection Activities; Proposals,
Submissions, and Approvals:
Subordinated Debt Licensing Requirements, 32335–32337
Defense Department
See Engineers Corps
PROPOSED RULES
Promotion, Research, and Information Orders:
Reopening and Extension of Comment Period on
Amendment to Include Frozen Mangos, 32215
NOTICES
Agency Information Collection Activities; Proposals,
Submissions, and Approvals, 32286
Environmental Assessments; Availability, etc.:
Hazardous Materials Warehouses and Gas Cylinder Sheds
at Naval Station Norfolk and Naval Support Activity
Norfolk Naval Shipyard, Virginia, 32286–32287
Upgrade of the Main Gate Access Control Point at
Defense Distribution Depot, San Joaquin, CA, and
Surrounding Area, 32287
Agriculture Department
See Agricultural Marketing Service
See Animal and Plant Health Inspection Service
See Forest Service
Animal and Plant Health Inspection Service
NOTICES
Engineers Corps
Agency Information Collection Activities; Proposals,
Submissions, and Approvals:
Animal Welfare, 32260–32261
PROPOSED RULES
Definition of Waters of the United States—Recodification of
Preexisting Rule, 32227–32252
Environmental Protection Agency
Centers for Disease Control and Prevention
RULES
NOTICES
Air Quality State Implementation Plans; Approvals and
Promulgations:
California, Yolo-Solano Air Quality Management District,
32211–32213
Delaware; Interstate Transport Requirements for the 2012
Fine Particulate Matter Standard, 32209–32211
National Emission Standards for Hazardous Air Pollutants:
Chemical Recovery Combustion Sources at Kraft, Soda,
Sulfite, and Stand-Alone Semichemical Pulp Mills,
32213–32214
Meetings:
Advisory Board on Radiation and Worker Health,
National Institute for Occupational Safety and
Health, 32299
Healthcare Infection Control Practices Advisory
Committee, 32299–32300
Centers for Medicare & Medicaid Services
PROPOSED RULES
Medicaid Program:
Reassignment of Medicaid Provider Claims, 32252–32255
Medicare and Medicaid Programs:
CY 2019 Home Health Prospective Payment System Rate
Update and CY 2020 Case-Mix Adjustment
Methodology Refinements; etc., 32340–32522
NOTICES
Meetings:
Washington Medicaid State Plan Amendment;
Reconsideration of Disapproval: Hearing, 32300–
32301
PROPOSED RULES
Definition of Waters of the United States—Recodification of
Preexisting Rule, 32227–32252
Federal Aviation Administration
RULES
Airworthiness Directives:
Bell Helicopter Textron Canada Limited Helicopters,
32201–32203
Rolls-Royce Corporation Turboshaft Engines, 32203–
32206
The Boeing Company Airplanes, 32198–32201
PROPOSED RULES
Coast Guard
amozie on DSK3GDR082PROD with FRONT MATTER CN
RULES
Safety Zones:
Alaska Marine Highway System Port Valdez Ferry
Terminal, Port Valdez; Valdez, AK, 32208–32209
Special Local Regulations:
Marine City Water Ski Show, St. Clair River, Marine City,
MI, 32206–32207
Airworthiness Directives:
Bombardier, Inc., Airplanes, 32215–32218
Hoffmann Propeller GmbH and Co. KG Propellers,
32219–32221
NOTICES
Petitions for Exemptions; Summaries:
3GLP, Inc. dba Precision Flight Devices, 32334–32335
NextEra Energy, Inc., 32335
Federal Communications Commission
Commerce Department
See Foreign-Trade Zones Board
See International Trade Administration
See National Oceanic and Atmospheric Administration
VerDate Sep<11>2014
19:11 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00001
Fmt 4748
PROPOSED RULES
New FM Radio Broadcast Class C4 and to Modify the
Requirements for Designating Short-Spaced
Assignments, 32255–32259
Sfmt 4748
E:\FR\FM\12JYCN.SGM
12JYCN
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Contents
IV
NOTICES
General Services Administration
Agency Information Collection Activities; Proposals,
Submissions, and Approvals, 32287–32289
Meetings:
Open Commission, 32289–32290
NOTICES
Agency Information Collection Activities; Proposals,
Submissions, and Approvals:
Background Investigations for Child Care Workers,
32296–32297
CDP Supply Chain Climate Change, 32298–32299
Contract Financing Final Payment, 32295
Contractor’s Qualifications and Financial Information,
32297–32298
Environmental Conservation, Occupational Safety, and
Drug-Free Workplace, 32296
Federal Deposit Insurance Corporation
NOTICES
Agency Information Collection Activities; Proposals,
Submissions, and Approvals, 32290–32293
Federal Election Commission
NOTICES
Health and Human Services Department
See Centers for Disease Control and Prevention
See Centers for Medicare & Medicaid Services
See Food and Drug Administration
See Health Resources and Services Administration
See National Institutes of Health
Meetings; Sunshine Act, 32293
Federal Reserve System
NOTICES
Formations of, Acquisitions by, and Mergers of Bank
Holding Companies, 32293
Health Resources and Services Administration
NOTICES
Federal Trade Commission
Meetings:
Advisory Committee on Heritable Disorders in Newborns
and Children, 32312–32313
NOTICES
Proposed Consent Agreements:
ReadyTech Corporation, 32293–32295
Food and Drug Administration
PROPOSED RULES
Food Labeling:
Calorie Labeling of Articles of Food Sold from Certain
Vending Machines; Front of Package Type Size,
32221–32227
NOTICES
amozie on DSK3GDR082PROD with FRONT MATTER CN
Charter Renewals:
Advisory Committee; Allergenic Products Advisory
Committee, 32310–32311
Advisory Committee; Science Advisory Board to the
National Center for Toxicological Research, 32301
Psychopharmacologic Drugs Advisory Committee, 32301–
32302
Guidance:
Chemistry, Manufacturing, and Control Information for
Human Gene Therapy Investigational New Drug
Applications, 32307–32308
Human Gene Therapy for Hemophilia, 32306–32307
Human Gene Therapy for Rare Diseases, 32303–32305
Human Gene Therapy for Retinal Disorders, 32302–32303
Long Term Follow-Up After Administration of Human
Gene Therapy Products, 32311–32312
Testing of Retroviral Vector-Based Human Gene Therapy
Products for Replication Competent Retrovirus
During Product Manufacture and Patient Follow-up,
32309–32310
Withdrawal of Approval of 29 New Drug Applications:
Concordia Pharmaceuticals, Inc., et al., 32305–32306
Foreign-Trade Zones Board
NOTICES
Production Activities:
PBR, Inc. d/b/a SKAPS Industries, Foreign-Trade Zone
26, Atlanta, GA, 32262
Homeland Security Department
See Coast Guard
See U.S. Customs and Border Protection
Interior Department
See National Park Service
See Surface Mining Reclamation and Enforcement Office
Internal Revenue Service
RULES
Inversions and Related Transactions, 32524–32561
International Trade Administration
NOTICES
Antidumping or Countervailing Duty Investigations, Orders,
or Reviews:
Certain Activated Carbon from the People’s Republic of
China, 32269–32270
Certain Steel Nails from the Republic of Korea, 32265–
32268
Initiation of Administrative Reviews, 32270–32283
Supercalendered Paper from Canada, 32262–32263,
32268–32269
Tapered Roller Bearings and Parts Thereof, Finished and
Unfinished, from the People’s Republic of China,
32263–32265
International Trade Commission
NOTICES
Antidumping or Countervailing Duty Investigations, Orders,
or Reviews:
Ammonium Nitrate from Ukraine, 32329
Investigations; Determinations, Modifications, and Rulings,
etc.:
Steel Propane Cylinders from China and Thailand, 32329
Justice Department
Forest Service
NOTICES
NOTICES
Proposed Consent Decrees:
Oil Pollution Act, 32329–32330
New Fee Sites, 32261–32262
VerDate Sep<11>2014
19:11 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00002
Fmt 4748
Sfmt 4748
E:\FR\FM\12JYCN.SGM
12JYCN
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Contents
V
National Institutes of Health
Surface Mining Reclamation and Enforcement Office
NOTICES
NOTICES
Meetings:
National Center for Advancing Translational Sciences,
32313
National Center for Complementary and Integrative
Health, 32313
Agency Information Collection Activities; Proposals,
Submissions, and Approvals:
Abandoned Mine Land Problem Area Description Form,
32327–32328
General (Procedures and Requirements), 32326
Nomination and Request for Payment Form for OSMRE’s
National Technical Training Courses, 32328
Petition Process for Designation of Federal Lands as
Unsuitable for All or Certain Types of Surface Coal
Mining Operations and for Termination of Previous
Designations, 32324–32325
Reclamation on Private Lands, 32326–32327
State Regulatory Authority: Inspection and Enforcement,
32325
National Oceanic and Atmospheric Administration
NOTICES
Agency Information Collection Activities; Proposals,
Submissions, and Approvals, 32284–32286
Endangered and Threatened Species:
Take of Anadromous Fish, 32283–32284
National Park Service
NOTICES
Inventory Completions:
Heard Museum, Phoenix, AZ, 32319–32320
Museum of Ojibwa Culture and Marquette Mission Park,
City of St. Ignace, MI, 32322–32323
San Diego Museum of Man, San Diego, CA, 32323–32324
St. Joseph Museums, Inc., St. Joseph, MO, 32316–32317
State Historic Preservation Office, Lansing, MI, 32315–
32316
Tongass National Forest, Juneau Ranger District, Juneau,
AK, 32317–32318
University of Michigan, Ann Arbor, MI, 32321–32322
University of San Diego, San Diego, CA, 32318–32319
Repatriation of Cultural Items:
Berkshire Museum, Pittsfield, MA, 32314–32315
Grand Canyon National Park, Grand Canyon, AZ, 32320–
32321
Transportation Department
See Federal Aviation Administration
Treasury Department
See Comptroller of the Currency
See Internal Revenue Service
NOTICES
Meetings:
Financial Research Advisory Committee, 32337
U.S. Customs and Border Protection
NOTICES
Commercial Gaugers and Laboratories; Accreditations and
Approvals:
Saybolt LP (Nederland, TX), 32313–32314
Veterans Affairs Department
NOTICES
Meetings:
Creating Options for Veterans Expedited Recovery
Commission, 32337–32338
National Science Foundation
NOTICES
Meetings; Sunshine Act, 32330–32331
Occupational Safety and Health Review Commission
Separate Parts In This Issue
NOTICES
Privacy Act; Systems of Records, 32331–32333
Part II
Health and Human Services Department, Centers for
Medicare & Medicaid Services, 32340–32522
Personnel Management Office
RULES
Federal Employees Health Benefits Program and Federal
Employees Dental and Vision Insurance Program:
Expiration of Coverage of Children of Same-Sex Domestic
Partners; Federal Flexible Benefits Plan: Pre-Tax
Payment of Health Benefits Premiums, 32191–32193
Reader Aids
Consult the Reader Aids section at the end of this issue for
phone numbers, online resources, finding aids, and notice
of recently enacted public laws.
Postal Regulatory Commission
NOTICES
amozie on DSK3GDR082PROD with FRONT MATTER CN
New Postal Products, 32333–32334
To subscribe to the Federal Register Table of Contents
electronic mailing list, go to https://public.govdelivery.com/
accounts/USGPOOFR/subscriber/new, enter your e-mail
address, then follow the instructions to join, leave, or
manage your subscription.
Small Business Administration
NOTICES
Disaster Declarations:
Nebraska, 32334
VerDate Sep<11>2014
19:11 Jul 11, 2018
Jkt 244001
Part III
Treasury Department, Internal Revenue Service, 32524–
32561
PO 00000
Frm 00003
Fmt 4748
Sfmt 4748
E:\FR\FM\12JYCN.SGM
12JYCN
VI
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Contents
CFR PARTS AFFECTED IN THIS ISSUE
A cumulative list of the parts affected this month can be found in the
Reader Aids section at the end of this issue.
5 CFR
890...................................32191
892...................................32191
894...................................32191
7 CFR
929...................................32193
Proposed Rules:
1206.................................32215
14 CFR
39 (3 documents) ...........32198,
32201, 32203
Proposed Rules:
39 (2 documents) ...........32215,
32219
21 CFR
Proposed Rules:
101...................................32221
26 CFR
1.......................................32524
33 CFR
100...................................32206
165...................................32208
Proposed Rules:
328...................................32227
40 CFR
52 (2 documents) ...........32209,
32211
63.....................................32213
Proposed Rules:
110...................................32227
112...................................32227
116...................................32227
117...................................32227
122...................................32227
230...................................32227
232...................................32227
300...................................32227
302...................................32227
401...................................32227
42 CFR
Proposed Rules:
409...................................32340
424...................................32340
447...................................32252
484...................................32340
486...................................32340
488...................................32340
47 CFR
Proposed Rules:
amozie on DSK3GDR082PROD with FRONT MATTER LS
73.....................................32255
VerDate Sep 11 2014
19:17 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00001
Fmt 4711
Sfmt 4711
E:\FR\FM\12JYLS.LOC
12JYLS
32191
Rules and Regulations
Federal Register
Vol. 83, No. 134
Thursday, July 12, 2018
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents.
OFFICE OF PERSONNEL
MANAGEMENT
5 CFR Parts 890, 892, and 894
RIN 3206–AN34
Federal Employees Health Benefits
Program and Federal Employees
Dental and Vision Insurance Program:
Expiration of Coverage of Children of
Same-Sex Domestic Partners; Federal
Flexible Benefits Plan: Pre-Tax
Payment of Health Benefits Premiums:
Conforming Amendments
U.S. Office of Personnel
Management.
ACTION: Final rule.
AGENCY:
On October 30, 2013, OPM
published final regulations in the
Federal Register to expand coverage for
children of same-sex domestic partners
under the Federal Employees Health
Benefits (FEHB) Program and the
Federal Employees Dental and Vision
Insurance Program (FEDVIP). The
regulation allowed children of same-sex
domestic partners living in states that
did not allow same-sex couples to marry
to be covered family members under the
FEHB and the FEDVIP. Due to a
subsequent Supreme Court decision
legalizing same-sex marriage in all
states, OPM published an interim final
regulation on December 2, 2016, that
created a regulatory exception that only
allowed children of same-sex domestic
partners living overseas to maintain
their FEHB and FEDVIP coverage until
September 30, 2018. OPM recognized
that there were additional requirements
placed on overseas federal employees
that did not apply to other civilian
employees with duty stations in the
United States making it difficult to
travel to the United States to marry their
same-sex partners. Understanding that
we have provided agencies with
additional time for compliance given
that overseas federal employees may not
have been able to marry immediately
following the Supreme Court decision,
amozie on DSK3GDR082PROD with RULES
SUMMARY:
VerDate Sep<11>2014
16:03 Jul 11, 2018
Jkt 244001
OPM is issuing a final rule removing
references to domestic partners and
domestic partnerships from the
regulations. Based on the Supreme
Court decision and the two additional
year’s lead time for domestic partners
overseas to marry, the current language
in the CFR is not needed and may be
somewhat confusing. There is no change
in coverage for children whose same-sex
partners are married.
DATES: This rule is effective on
September 30, 2018.
FOR FURTHER INFORMATION CONTACT:
Michael W. Kaszynski, Senior Policy
Analyst, at [email protected]
or (202) 606–0004.
SUPPLEMENTARY INFORMATION:
Authority for This Rulemaking
The Federal Employees Health
Benefits (FEHB) Program is
administered by the Office of Personnel
Management (OPM) in accordance with
Title 5, Chapter 89 United States Code
and our implementing regulations (title
5, parts 890, 892, 894 and title 48,
chapter 16). The statute establishes the
basic rules for benefits, enrollment, and
participation in the Federal insurance
programs.
Background
The Federal Employees Health
Benefits (FEHB) Program provides
health insurance to about 8.2 million
Federal employees, retirees, and their
dependents each year. It is the largest
employer-sponsored health insurance
program in the country providing more
than $53 billion in health care benefits
annually. Coverage options available to
eligible individuals include self only,
self plus one or self and family coverage
in an approved health benefits plan.
Eligible family members include the
spouse of an employee or annuitant and
a child under 26 years of age, including
adopted children, stepchildren or foster
children or a child regardless of age who
is incapable of self-support because of
mental or physical disability which
existed before age 26.
Effective January 1, 2014, the Office of
Personnel Management (OPM)
published the ‘‘Federal Employees
Health Benefits Program and Federal
Employees Dental and Vision Insurance
Program: Expanding Coverage of
Children; Federal Flexible Benefits Plan:
Pre-Tax Payment of Health Benefits
Premiums: Conforming Amendments’’
PO 00000
Frm 00001
Fmt 4700
Sfmt 4700
final rule (78 FR 64873) to extend FEHB
and FEDVIP coverage to children of
same-sex domestic partners of Federal
employees and annuitants who would
marry their partners but live in states
that did not allow same-sex couples to
marry. As the result of the June 26,
2015, Supreme Court Obergefell v.
Hodges decision, all U.S. states now
allow same-sex couples to marry.
Accordingly, as of January 2016,
coverage of an enrollee’s stepchild(ren)
is only allowed if the couple is married.
OPM also published an interim final
regulation (81 FR 86905) on December
2, 2016. The rule amended §§ 890.302
and 894.101 of title 5, Code of Federal
Regulations. The amendments allow an
employing agency to request, and for
OPM to grant, a continued coverage
exception for children of an employee’s
same-sex domestic partner living
outside the United States. Any coverage
under such an exception will not extend
beyond September 30, 2018. The OPM
recognized there were additional
requirements placed on overseas
employees (as compared to civilian
employees with duty stations in the
United States) making it difficult to
travel to the United States to marry
same-sex partners. Therefore, OPM
created the authority to allow an
exception for children of Federal
employees in a domestic partnership
and living outside of the United States.
If requested by an enrollee’s agency,
coverage of children of same-sex
domestic partners can be continued
under self and family or self plus one
enrollment in the FEHB and FEDVIP
Programs. This regulation removes this
continued coverage exception which
expires for overseas employees on
September 30, 2018.
Comments Received on the Interim
Rule
We received five comments on the
Interim rule. All commenters were in
support of the rule. No commenters
recommended changes to the rule.
Therefore, no changes have been made
to this Final rule based on the
comments received.
Expected Impact of Changes
This rule eliminates all regulatory
language in FEHB, FEDVIP and FedFlex
that authorizes coverage for children of
same-sex domestic partners, effective
September 30, 2018. This rule amends
E:\FR\FM\12JYR1.SGM
12JYR1
32192
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
the regulations to remove the language
that authorizes coverage of children of
same-sex domestic partners since all
enrollees now have the right to marry in
the United States. The regulatory
language that authorized coverage for
children of same-sex domestic partners
overseas is also being removed from the
regulation effective September 30, 2018.
There is no change to the population of
children who have access to coverage
based on this rule.
Executive Order 13563 and 12866
Requirements
Executive Orders 13563 and 12866
direct agencies to assess all costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). Executive Order 13563
emphasizes the importance of
quantifying both costs and benefits, of
reducing costs, of harmonizing rules,
and of promoting flexibility. This rule
has been designated a not significant
regulatory action under Executive Order
12866.
Paperwork Reduction Act
Requirements
amozie on DSK3GDR082PROD with RULES
Notwithstanding any other provision
of law, no person is required to respond
to, nor shall any person be subject to a
penalty for failure to comply with a
collection of information subject to the
requirements of the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501
et seq.) (PRA), unless that collection of
information displays a currently valid
Office of Management and Budget
(OMB) Control Number. With this rule
there is no change to an existing OMB
approved collection of information
subject to the PRA—OMB No. 3206–
0160, Health Benefits Election Form.
The system of record notice for this
collection is OPM/Central 1 Civil
Service Retirement and Insurance
Records, available at https://
www.opm.gov/informationmanagement/privacy-policy/sorn/opmsorn-central-1-civil-service-retirementand-insurance-records.pdf.
Regulatory Flexibility Act
I certify that these regulations will not
have a significant economic impact on
a substantial number of small entities.
VerDate Sep<11>2014
16:03 Jul 11, 2018
Jkt 244001
Executive Order 13771: Reducing
Regulation and Controlling Regulatory
Costs
This rule is not an E.O. 13771
regulatory action because this rule is not
significant under E.O. 12866.
List of Subjects
5 CFR Part 890
Administration and general
provisions, Administrative practice and
procedure, Administrative sanctions
imposed against health care providers,
Benefits for former spouses, Benefits for
United States hostages in Iraq and
Kuwait and United States hostages
captured in Lebanon, Benefits in
medically underserved areas,
Contributions and withholdings,
Department of Defense Federal
Employees Health Benefits Program
demonstration project, Employee benefit
plans, Enrollment, Government
employees, Health benefits plans, Limit
on inpatient hospital charges, physician
charges, and FEHB benefit payments,
Reporting and recordkeeping
requirements, Retirement, Temporary
continuation of coverage, Temporary
extension of coverage and conversion,
Transfers from retired FEHB Program.
5 CFR Part 892
Administrative practice and
procedure, Government employees’
health insurance, Pre-tax payment of
health benefits premiums, Taxes,
Wages.
5 CFR Part 894
Administrative practice and
procedure, Government employees,
Health insurance, Taxes, Wages.
U.S. Office of Personnel Management.
Jeff T.H. Pon,
Director.
Accordingly, OPM is amending title 5,
Code of Federal Regulations as follows:
PART 890—FEDERAL EMPLOYEES
HEALTH BENEFITS PROGRAM
1. The authority citation for part 890
continues to read as follows:
■
Authority: 5 U.S.C. 8913; Sec. 890.301
also issued under sec. 311 of Pub. L. 111–03,
123 Stat. 64; Sec. 890.111 also issued under
section 1622(b) of Pub. L. 104–106, 110 Stat.
521; Sec. 890.112 also issued under section
1 of Pub. L. 110–279, 122 Stat. 2604; 5 U.S.C.
8913; Sec. 890.803 also issued under 50
U.S.C. 403p, 22 U.S.C. 4069c and 4069c–1;
subpart L also issued under sec. 599C of Pub.
L. 101–513, 104 Stat. 2064, as amended; Sec.
890.102 also issued under sections 11202(f),
11232(e), 11246 (b) and (c) of Pub. L. 105–
33, 111 Stat. 251; and section 721 of Pub. L.
105–261, 112 Stat. 2061; Pub. L. 111–148, as
amended by Pub. L. 111–152.
PO 00000
Frm 00002
Fmt 4700
Sfmt 4700
2. In § 890.302, revise paragraphs
(a)(2)(iii) and (b)(2) and remove
paragraphs (b)(3) through (7) to read as
follows:
■
§ 890.302
Coverage of family members.
(a) * * *
(2) * * *
(iii) Children are entitled to receive
benefits under only one enrollment
regardless of whether the children
qualify as family members under the
enrollment of both parents or of a parent
and a stepparent and regardless of
whether the parents are married,
unmarried, divorced, or legally
separated. To ensure that no person
receives benefits under more than one
enrollment, each enrollee must
promptly notify the insurance carrier as
to which family members will be
covered under his or her enrollment.
These individuals are not covered under
the other enrollment.
(b) * * *
(2) For purposes of this part, the term
‘‘stepchild’’ refers to the child of an
enrollee’s spouse and shall continue to
refer to such child after the enrollee’s
divorce from the spouse or death of the
spouse, so long as the child continues
to live with the enrollee in a regular
parent-child relationship.
*
*
*
*
*
PART 892—FEDERAL FLEXIBLE
BENEFITS PLAN: PRE-TAX PAYMENT
OF HEALTH BENEFITS PREMIUMS
3. The authority citation for part 892
continues to read as follows:
■
Authority: 5 U.S.C. 8913; 5 U.S.C.
1103(a)(7); 26 U.S.C. 125.
4. In § 892.101, the definition of a
‘‘Qualifying life event’’ is amended by
revising the introductory text to read as
follows:
■
§ 892.101
Definitions.
*
*
*
*
*
Qualifying life (QLE) event means an
event that may permit changes to your
FEHB enrollment as well as changes to
your premium conversion election as
described in Treasury regulations at 26
CFR 1.125–4. Such events include the
following:
*
*
*
*
*
■ 5. Section 892.102 is revised to read
as follows:
§ 892.102 What is premium conversion
and how does it work?
Premium conversion is a method of
reducing your taxable income by the
amount of your contribution to your
FEHB insurance premium. If you are a
participant in the premium conversion
plan, Section 125 of the Internal
E:\FR\FM\12JYR1.SGM
12JYR1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
Revenue Code allows you to reduce
your salary (through an employer
allotment) and provide that portion of
your salary back to your employer.
Instead of being paid to you as taxable
income, this allotted amount is used to
purchase your FEHB insurance for you.
The effect is that your taxable income is
reduced. Because taxable income is
reduced, the amount of tax you pay is
reduced. You save on Federal income
tax, Social Security and Medicare tax
and in most States and localities, State
and local income taxes.
PART 894—FEDERAL EMPLOYEES
DENTAL AND VISION INSURANCE
PROGRAM
6. The authority citation for part 894
continues to read as follows:
Authority: 5 U.S.C. 8962; 5 U.S.C. 8992;
Subpart C also issued under section 1 of Pub.
L. 110–279, 122 Stat. 2604.
7. In § 894.101, the definitions for
‘‘Domestic partner’’ and ‘‘Domestic
partnership’’ are removed and the
definition for ‘‘Stepchild’’ is revised to
read as follows:
■
Definitions.
*
*
*
*
*
Stepchild means your spouse’s child
born within or outside marriage or his
or her adopted child. The child of your
spouse shall continue to be considered
your stepchild after your divorce from
your spouse or the death of your spouse
so long as the child continues to live
with you in a regular parent-child
relationship.
*
*
*
*
*
8. In § 894.403, paragraph (a) is
revised to read as follows:
■
§ 894.403 Are FEDVIP premiums paid on a
pre-tax basis?
(a) Your FEDVIP premiums are paid
on a pre-tax basis (called premium
conversion) if you are an active
employee, your salary is sufficient to
make the premium allotments, and your
agency will be able to make pre-tax
allotments.
*
*
*
*
*
[FR Doc. 2018–14938 Filed 7–11–18; 8:45 am]
amozie on DSK3GDR082PROD with RULES
BILLING CODE 6325–63–P
VerDate Sep<11>2014
16:03 Jul 11, 2018
Jkt 244001
Agricultural Marketing Service
7 CFR Part 929
[Doc. No. AMS–SC–17–0066; SC17–929–3
FR]
Cranberries Grown in States of
Massachusetts, et al.; Establishment of
Handler Diversion and Reporting
Requirements and New Information
Collection
Agricultural Marketing Service,
USDA.
ACTION: Final rule.
AGENCY:
This rule implements a
recommendation to establish handler
diversion and reporting requirements
under the marketing order for
cranberries grown in the production
area (Order). This action establishes the
procedures handlers use to divert fruit
through disposal or into noncompetitive
outlets. The reporting requirements
support the diversion procedures by
providing the necessary documentation
to help ensure compliance when a
volume regulation is established.
DATES: Effective August 13, 2018.
FOR FURTHER INFORMATION CONTACT:
Doris Jamieson, Marketing Specialist, or
Christian D. Nissen, Regional Director,
Southeast Marketing Field Office,
Marketing Order and Agreement
Division, Specialty Crops Program,
AMS, USDA; Telephone: (863) 324–
3375, Fax: (863) 291–8614, or Email:
[email protected] or
[email protected].
Small businesses may request
information on complying with this
regulation by contacting Richard Lower,
Marketing Order and Agreement
Division, Specialty Crops Program,
AMS, USDA, 1400 Independence
Avenue SW, STOP 0237, Washington,
DC 20250–0237; Telephone: (202) 720–
2491, Fax: (202) 720–8938, or Email:
[email protected].
SUPPLEMENTARY INFORMATION: This final
rule, pursuant to 5 U.S.C. 553, amends
regulations used to carry out a
marketing order as defined in 7 CFR
900.2(j). This final rule is issued under
Marketing Agreement and Order No.
929, as amended (7 CFR part 929),
regulating the handling of cranberries
grown in the states of Massachusetts,
Rhode Island, Connecticut, New Jersey,
Wisconsin, Michigan, Minnesota,
Oregon, Washington, and Long Island in
the State of New York. Part 929 (referred
to as the ‘‘Order’’) is effective under the
Agricultural Marketing Agreement Act
of 1937, as amended (7 U.S.C. 601–674),
SUMMARY:
■
§ 894.101
DEPARTMENT OF AGRICULTURE
PO 00000
Frm 00003
Fmt 4700
Sfmt 4700
32193
hereinafter referred to as the ‘‘Act.’’ The
Committee locally administers the
Order and is comprised of growers of
cranberries operating within the
production area, and a public member.
The Department of Agriculture
(USDA) is issuing this rule in
conformance with Executive Orders
13563 and 13175. This action falls
within a category of regulatory actions
that the Office of Management and
Budget (OMB) exempted from Executive
Order 12866 review. Additionally,
because this rule does not meet the
definition of a significant regulatory
action, it does not trigger the
requirements contained in Executive
Order 13771. See OMB’s Memorandum
titled ‘‘Interim Guidance Implementing
Section 2 of the Executive Order of
January 30, 2017, titled ‘Reducing
Regulation and Controlling Regulatory
Costs’ ’’ (February 2, 2017).
This rule has been reviewed under
Executive Order 12988, Civil Justice
Reform. This final rule is not intended
to have retroactive effect.
The Act provides that administrative
proceedings must be exhausted before
parties may file suit in court. Under
section 608c(15)(A) of the Act, any
handler subject to an order may file
with USDA a petition stating that the
order, any provision of the order, or any
obligation imposed in connection with
the order is not in accordance with law
and request a modification of the order
or to be exempted therefrom. A handler
is afforded the opportunity for a hearing
on the petition. After the hearing, USDA
would rule on the petition. The Act
provides that the district court of the
United States in any district in which
the handler is an inhabitant, or has his
or her principal place of business, has
jurisdiction to review USDA’s ruling on
the petition, provided an action is filed
not later than 20 days after the date of
the entry of the ruling.
This final rule establishes handler
diversion and reporting requirements
under the Order. This rule establishes
procedures handlers use to divert fruit
through disposal or into noncompetitive
outlets. The reporting requirements
support the diversion procedures by
providing the necessary documentation
to help ensure compliance when a
volume regulation is established. This
action was recommended by the
Committee at its August 31, 2017,
September 15, 2017, and October 13,
2017, meetings.
The Order provides for the use of
volume regulation to stabilize prices
and improve grower returns during
periods of oversupply. Section
929.51(a)(2) specifies that a handler
withholding program must be
E:\FR\FM\12JYR1.SGM
12JYR1
amozie on DSK3GDR082PROD with RULES
32194
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
recommended by the Committee no
later than August 31 and that such
recommendation shall include the free
and restricted percentages for the crop
year. On August 31, 2017, the
Committee met and recommended free
and restricted percentages of 85 percent
free and 15 percent restricted. Handler
diversion is one method that handlers
can utilize to meet restricted percentage
requirements.
Section 929.54 provides, in part, that
whenever the Secretary of Agriculture
(Secretary) has fixed the free and
restricted percentages for any fiscal
period, each handler shall withhold
from handling a portion of the
cranberries acquired during such
period. This section also provides the
authority for the Committee to establish,
with the approval of the Secretary, rules
and regulations necessary to administer
this section. Section 929.56 provides
special provisions relating to withheld
(restricted) cranberries, and § 929.57
provides authority for the Committee to
establish, with the approval of the
Secretary, outlets for withheld
cranberries which are noncompetitive
with outlets for unrestricted (free
percentage) cranberries.
Section 929.62 provides, in part,
authority to require handlers to submit
reports of cranberries acquired, held in
inventory, quantity handled, total
cranberries withheld from handling, the
portion of such withheld cranberries on
hand, and the quantity and manner of
disposition of any such withheld
cranberries diverted. Section 929.62(f)
further provides authority for the
Committee, with the approval of the
Secretary, to collect other reports and
information from handlers needed to
perform its duties.
This final rule uses these authorities
to establish new §§ 929.157 and
929.162. Section 929.157 establishes the
procedures to be used for handler
diversion when free and restricted
percentages are instituted. Section
929.162 requires handlers of
cranberries, during years when free and
restricted percentages are applied, to
report to the Committee diversion plans
and year-end reports, information on
cranberries diverted and cranberries
shipped to noncompetitive outlets, and
other information to verify compliance
with the program, using six specific
Committee forms.
The Committee recommended
establishing free and restricted
percentages under a handler
withholding volume regulation for the
2017–18 season in response to
historically high inventory levels for
cranberries. As this is the first time the
Committee has used this volume
VerDate Sep<11>2014
16:03 Jul 11, 2018
Jkt 244001
regulation provision under the Order, it
recognized the need to establish
procedures outlining the diversion
requirements for restricted fruit.
Free percentage cranberries can be
used to supply any available market,
including juice, sweetened dried
cranberries, sauce, and frozen
cranberries. Restricted percentage
cranberries can be diverted through
disposal or utilized in markets that are
noncompetitive with free cranberries.
Possible outlets for restricted
cranberries include, in part, for fresh
export, except to Canada; charity;
research and development projects; and
any nonhuman food use. Handlers also
have the option to divert processed
products in lieu of fresh fruit to meet up
to 50 percent of their restricted
obligation.
At the 2017 meetings in August,
September, and October, the Committee
discussed the handler diversion
procedures and the associated reporting
requirements necessary to help ensure
compliance with a free and restricted
percentage volume regulation. As a
result, the Committee developed and
approved six specific forms and related
procedures to be used during seasons
when free and restricted percentages are
established for volume regulation.
Committee members discussed the
need for Committee staff to know how
handlers plan to meet their restricted
percentage obligation and if, at the end
of the season, they met their diversion
requirement. As a result, the Committee
developed two specific forms to be
added to the reporting requirements
under the Order.
With the first form, the Handler
Withholding Report (CMC–JUN),
handlers provide information on how
they plan to meet their restricted
percentage obligation. The form will be
submitted to the Committee by June 1
during years with established free and
restricted percentages and requires the
following information: The name and
address of the handler, the amount of
cranberries to be acquired, the amount
of cranberries to be diverted by disposal,
the amount of cranberries to be diverted
to noncompetitive outlets, and the types
of cranberry products to be withheld.
The Committee will use this
information to estimate the amount of
fruit that will be taken off the market,
the proposed disposition of the fruit,
and as a starting point for tracking
handler compliance.
The second form, the Final Handler
Withholding Report (CMC–AUG), will
be submitted by the end of the crop
year. The report requires the same
information as the Handler Withholding
Report but provides the Committee with
PO 00000
Frm 00004
Fmt 4700
Sfmt 4700
the actual year-end seasonal totals. This
form is due by August 31. The final
report will be used to verify that
handlers met their restricted percentage
obligation.
Handlers have several diversion
options available to meet their restricted
percentage obligation. One method of
diversion available to handlers is the
disposal of fresh cranberries or
cranberry products. In its discussions,
Committee members expressed concern
regarding verifying the accuracy of the
amount of fruit or processed product
diverted using this method. The
Committee recommended that all
disposals take place under the
supervision of a non-industry-related
third party who will review the
handler’s disposal documentation,
witness the disposal whenever possible,
and certify as to the completion of the
disposal process. The Committee
initially agreed to hire two inspectors to
supervise and verify handler
compliance. However, due to the size of
the production area, the Committee
hired four inspectors, one from each of
the primary growing regions, who will
perform these tasks. The inspection and
verification costs will be paid by the
handler.
To facilitate this process, the
Committee recommended establishing
another form. This form, the Handler
Disposal Certification (CMC–DISP), will
be the primary form used to initiate,
track, and certify this method of
diversion during years in which a free
and restricted percentage volume
regulation has been established. The
form will be used to notify the
Committee of the handler’s intent to
dispose of cranberries or cranberry
products. Information required on the
form include the handler’s name and
address; the amount of fruit to be
diverted; the type of cranberry product
to be diverted; the amount of processed
fruit diverted, if any; and the lot
identification information.
Upon receipt of the form, the
Committee office will notify the
inspector in the handler’s growing
region. The inspector will contact the
handler to schedule a date for the
disposal to take place, usually within a
week of receipt of the notification. The
inspector will meet with the handler on
that date to verify the documentation
provided and, when possible, witness
the disposal.
The Committee recognized that, due
to scheduling conflicts, the inspector
may not be available to visually witness
each disposal of restricted cranberries.
Therefore, the Committee agreed that,
should the inspector not be available to
witness the diversion within seven
E:\FR\FM\12JYR1.SGM
12JYR1
amozie on DSK3GDR082PROD with RULES
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
days, the handler may proceed with the
disposal. The inspector will then verify
and complete the certification upon the
inspector’s next visit to the handler’s
facility. If the cranberries or cranberry
product were disposed of at a landfill,
through composting, incineration, at a
wastewater treatment facility, or any
other site, the inspector may request
receipts, visual proof, or any other
additional information needed to
support the disposal as reported on the
form. Once the verification process is
completed, the inspector will sign the
certification section of the form, and
return it to the Committee.
Another method of diversion
available is to divert cranberries or
cranberry products to noncompetitive
outlets. Section 929.57 specifies that
cranberries withheld from handling may
be disposed of only through diversion to
such outlets as the Committee, with the
approval of the Secretary, finds are
noncompetitive to outlets for
unrestricted (free percentage)
cranberries. The Committee discussed
various outlets and recommended the
following: Foreign countries, except
Canada; charitable institutions; any
nonhuman food use; and research and
development projects approved by the
Committee dealing with the
development of foreign and domestic
markets, including but not limited to
dehydration, radiation, freeze drying, or
freezing of cranberries. The Committee
further recommended that cranberries
may not be converted into canned,
frozen, or dehydrated cranberries or
other cranberry products by any
commercial process when being
diverted to foreign countries. The
specific outlets are being considered
under a separate rulemaking action.
The Agricultural Marketing Service
(AMS) submitted and received OMB’s
approval on the five initial forms.
Handlers complete the forms and
submit them to the Committee for
purposes of tracking compliance with
the handler withholding requirement.
OMB approved the forms on October 16,
2017, and assigned them OMB No.
0581–0304. Upon full completion of the
forms-approval process, AMS will seek
to merge the five forms into the OMBapproved 0581–0189 Fruit Crops
containing other forms related to the
Federal marketing order for cranberries.
Two specific reporting requirements
relating to the diversion of fruit to
noncompetitive outlets are added to part
929: A Handler Application for Outlets
for Withheld Fruit (CMC–OUT) and a
Third-Party Confirmation of Receipt of
Withheld Fruit (CMC–CONF). Should a
handler elect to divert cranberries or
cranberry products to noncompetitive
VerDate Sep<11>2014
16:03 Jul 11, 2018
Jkt 244001
outlets, the handler must first request
Committee approval of the outlet or
research project using the Handler
Application for Outlets for Withheld
Fruit prior to each disposal activity of
this type. Information requested on the
form includes, among other things, the
handler’s name and address,
information identifying the
noncompetitive outlet, the amount and
type of cranberry products to be
diverted, and how the cranberries will
be utilized. The Committee will review
the information and approve or
disapprove the diversion request.
If the request is approved and the
product is delivered, the receiving
outlet needs to acknowledge receipt of
the product by completing the ThirdParty Confirmation of Receipt of
Withheld Fruit form, and the handler
then returns the completed form to the
Committee.
The two above-described reporting
requirements help track the disposition
of withheld cranberries in
noncompetitive outlets and facilitates
the compliance process under the
recommended handler withholding.
The last form approved by the
Committee provides handlers a method
for appealing any decision made by the
Committee relating to the diversion
process. Should a handler disagree with
a Committee decision, such as denying
the request for approval of a
noncompetitive outlet, or a
determination that diversion could not
be verified, the handler can appeal the
decision by submitting a Handler
Withholding Appeal form (CMC–APPL).
The handler making the appeal is
required to submit the form within 30
days of receiving the determination
from the Committee. This form includes
information about why the handler is
making the appeal and provides
additional information to support the
appeal. The appeal request is reviewed
by an Appeals Subcommittee
(Subcommittee) for re-consideration.
The Subcommittee consists of two
independent growers, two members
from the major cooperative, and one
public member. The handler will be
notified of the Subcommittee’s
determination within 30 days. If the
appeal is denied by the Subcommittee,
the handler has the option of appealing
the decision to the Secretary within 15
days after the notification of the
Subcommittee’s findings.
In order to enable the Committee to
inform the industry of the information
needed for handlers to manage their
inventories in a way that complies with
the industry-supported handler
withholding program, the five initial
forms were previously submitted to
PO 00000
Frm 00005
Fmt 4700
Sfmt 4700
32195
OMB for approval. These five forms
(CMC–JUN, CMC–DISP, CMC–OUT,
CMC–CONF and CMC–APPL) were
approved by OMB on October 16, 2017,
for use for a six-month period,
beginning the date of approval. This
final rule is necessary for the industry
to use the forms beyond the six-month
period.
Establishing these handler diversion
and reporting requirements facilitates
the implementation of, and ensures
compliance with, free and restricted
percentages when recommended by the
Committee.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in
the Regulatory Flexibility Act (RFA) (5
U.S.C. 601–612), AMS has considered
the economic impact of this action on
small entities. Accordingly, AMS has
prepared this final regulatory flexibility
analysis.
The purpose of the RFA is to fit
regulatory actions to the scale of
businesses subject to such actions in
order that small businesses will not be
unduly or disproportionately burdened.
Marketing orders issued pursuant to the
Act, and rules issued thereunder, are
unique in that they are brought about
through group action of essentially
small entities acting on their own
behalf.
There are approximately 1,100
cranberry growers in the regulated area
and approximately 65 cranberry
handlers subject to regulation under the
Order. Small agricultural producers are
defined by the Small Business
Administration (SBA) as those having
annual receipts of less than $750,000,
and small agricultural service firms are
defined as those whose annual receipts
are less than $7,500,000 (13 CFR
121.201).
According to industry and Committee
data, the average grower price for
cranberries during the 2016–17 crop
year was $23.50 per barrel, and total
sales were around 9.5 million barrels.
The value for cranberries that crop year
totaled $223,250,000 ($23.50 per barrel
multiplied by 9.5 million barrels).
Taking the total value of production for
cranberries and dividing it by the total
number of cranberry growers (1,100)
provides an average return per grower of
$202,955. Based on USDA’s Market
News reports, the average free on board
(f.o.b.) price for cranberries was around
$30.00 per barrel. Multiplying the f.o.b.
price by total utilization of 9.5 million
barrels results in an estimated handlerlevel cranberry value of $285 million.
Dividing this figure by the number of
handlers (65) yields an estimated
average annual handler receipt of $4.3
E:\FR\FM\12JYR1.SGM
12JYR1
amozie on DSK3GDR082PROD with RULES
32196
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
million, which is below the SBA
threshold for small agricultural service
firms. Therefore, the majority of growers
and handlers of cranberries may be
classified as small entities.
This final rule establishes handler
diversion and reporting requirements
under the Order. This final rule
establishes procedures handlers will use
to divert fruit through disposal or into
noncompetitive outlets. The reporting
requirements support the diversion
procedures by providing the necessary
documentation to help ensure
compliance when a volume regulation is
established. This rule establishes new
§§ 929.157 and 929.162. The authority
for this action is provided in §§ 929.54,
929.56, 929.57, and 929.62.
These actions could result in some
additional costs to the industry.
Specifically, handlers could incur some
additional costs as a result of inspector
verification and certification of the
diversion process. In addition, requiring
reports of cranberries acquired, handled,
and withheld imposes an increase in the
reporting burden on all cranberry
handlers. However, the benefits are
expected to outweigh the costs and
increase in reporting burden. The
provisions considered in this action will
help facilitate the implementation of
any recommended handler withholding
volume regulation and help ensure
compliance with the recommended
regulation. Consequently, these changes
will help provide important guidance
during times when market conditions
support the need for establishing
volume regulation.
The impact of this rule will be
beneficial to growers and handlers.
Establishing diversion procedures
benefits the entire industry by ensuring
handler diversion is conducted
consistently and accurately by all
handlers, which also helps ensure
compliance with the handler
withholding program. Authorizing
various diversion outlets means
handlers are not required to divert
cranberries only through destruction.
Instead, fruit can be utilized in
noncompetitive outlets, such as for
charitable purposes. The benefits of this
rule are expected to be equally available
to all cranberry growers and handlers,
regardless of their size, and are greater
than any associated costs.
The Committee discussed other
alternatives to this action, including
using different methods of ensuring
accurate diversion of restricted fruit.
One method considered was allowing
handlers to self-report their diversion of
restricted fruit without a formal
verification process. However, the
Committee deemed this insufficient
VerDate Sep<11>2014
16:03 Jul 11, 2018
Jkt 244001
verification to ensure compliance with
the program. Members were concerned
that fruit could be re-routed to a
different handling facility for
processing, and without established
verification procedures, the industry
would not have confidence that
restricted fruit was being properly
diverted. The Committee also
considered the value and importance of
each of the forms and whether all were
required. However, the Committee
agreed each of the recommended forms
provide important information for the
industry and for administering the
Order. Therefore, these alternatives
were rejected.
In accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C.
Chapter 35), this collection has been
submitted to OMB for approval. The five
currently approved forms in 0581–0304
and one additional form will be merged
with forms currently approved under
OMB No. 0581–0189, Fruit Crops. This
final rule establishes the use of six new
reporting requirements and six new
Committee forms, which impose a total
annual burden increase of 38.4 hours.
The forms, ‘‘Handler Withholding
Report,’’ ‘‘Handler Disposal
Certification,’’ ‘‘Handler Application for
Outlets for Withheld Fruit,’’ ‘‘ThirdParty Confirmation of Receipt of
Withheld Fruit,’’ ‘‘Handler Withholding
Appeal,’’ and ‘‘Final Handler
Withholding Report,’’ require the
minimum information necessary to
effectively carry out the requirements of
the Order. The information will enable
the Committee to ensure compliance
when a volume regulation is
established.
As with all Federal marketing order
programs, reports and forms are
periodically reviewed to reduce
information requirements and
duplication by industry and public
sector agencies.
As noted in the initial regulatory
flexibility analysis, USDA has not
identified any relevant Federal rules
that duplicate, overlap, or conflict with
this rule. Further, the public comment
received concerning the proposal did
not address the initial regulatory
flexibility analysis.
AMS is committed to complying with
the E-Government Act, to promote the
use of the internet and other
information technologies to provide
increased opportunities for citizen
access to Government information and
services, and for other purposes.
Further, the Committee’s meetings
were widely publicized throughout the
cranberry industry, and all interested
persons were invited to attend the
meetings and participate in Committee
PO 00000
Frm 00006
Fmt 4700
Sfmt 4700
deliberations on all issues. Additionally,
the Committee’s meetings held August
31, September 15, and October 13, 2017,
were public meetings, and all entities,
both large and small, were able to
express views on this issue.
A proposed rule concerning this
action was published in the Federal
Register on February 15, 2018 (83 FR
6800). Copies of the proposed rule were
sent via email to Committee members
and cranberry handlers. Finally, the
proposed rule was made available
through the internet by USDA and the
Office of the Federal Register. A 60-day
comment period ending April 16, 2018,
was provided to allow interested
persons to respond to the proposal.
Two comments were received which
did not address the merits of the
proposed rule. Accordingly, no changes
will be made to the rule as proposed
based on the comments received.
The proposed rule contained
administrative revisions to the Order’s
subpart headings to bring the language
into conformance with the Office of
Federal Register requirements. These
revisions are not included in this rule as
they were included in a final rule
published in the Federal Register on
April 4, 2018 (83 FR 14350).
A small business guide on complying
with fruit, vegetable, and specialty crop
marketing agreements and orders may
be viewed at: http://www.ams.usda.gov/
rules-regulations/moa/small-businesses.
Any questions about the compliance
guide should be sent to Richard Lower
at the previously mentioned address in
the FOR FURTHER INFORMATION CONTACT
section.
After consideration of all relevant
matter presented, including the
information and recommendation of the
Committee and other available
information, it is hereby found that this
rule, as hereinafter set forth, will tend
to effectuate the declared policy of the
Act.
List of Subjects in 7 CFR Part 929
Cranberries, Marketing agreements,
Reporting and recordkeeping
requirements.
For the reasons set forth in the
preamble, 7 CFR part 929 is amended as
follows:
PART 929—CRANBERRIES GROWN IN
STATES OF MASSACHUSETTS,
RHODE ISLAND, CONNECTICUT, NEW
JERSEY, WISCONSIN, MICHIGAN,
MINNESOTA, OREGON,
WASHINGTON, AND LONG ISLAND IN
THE STATE OF NEW YORK
1. The authority citation for part 929
continues to read as follows:
■
E:\FR\FM\12JYR1.SGM
12JYR1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
Authority: 7 U.S.C. 601–674.
■
2. Add § 929.157 to read as follows:
amozie on DSK3GDR082PROD with RULES
§ 929.157
Handler diversion.
(a) Methods of diversion. Handlers
may divert cranberries by disposing of
cranberries or cranberry products.
Diversion by disposal may take place
prior to placing the cranberries into the
processing line or after processing.
Handlers may also divert cranberries or
cranberry products to approved,
noncompetitive outlets for withheld
fruit. Whole berries or processed
products diverted must come from the
current crop year. Any information
collected of a confidential and/or
proprietary nature would be held in
confidence pursuant to § 929.65.
(1) Diversion through disposal. This
type of diversion is to be carried out
under the supervision of the Committee,
and the cost of such supervision is to be
paid by the handler. Handlers shall
notify the Committee of their intent to
dispose of cranberries or cranberry
products using Form CMC–DISP as
specified in § 929.162(c). Following
notification, a Committee inspector will
meet with the handler to verify the
documentation provided and, when
possible, witness the destruction. The
Committee inspector may request
receipts, visual proof, or any other
information needed to support the
disposal as reported. Once the
verification process has been completed,
the Committee inspector will sign the
certification section of Form CMC–DISP
and return it to the Committee.
(2) Diversion through noncompetitive
outlets. To divert cranberries or
cranberry products to a noncompetitive
outlet, handlers must apply to the
Committee using Form CMC–OUT as
specified in § 929.162(d) prior to each
disposal activity of this type. The
Committee will review the information
and approve or disapprove the diversion
request. Once the cranberries or
cranberry products are delivered to the
approved noncompetitive outlets, the
Committee must receive satisfactory
documentation of the transaction using
Form CMC–CONF as specified in
§ 929.162(e).
(b) Committee notification and
handler plan. Any handler intending to
divert cranberries or cranberry products
pursuant to § 929.54 must notify the
Committee of such intent and provide a
plan by June 1 that shows how the
handler intends to meet the restricted
percentage obligation. The handler shall
submit this plan using Form CMC–JUNE
as specified in the reporting
requirements under § 929.162(a). The
handler will have until August 31 to
fulfill the plan, by which time the
VerDate Sep<11>2014
16:03 Jul 11, 2018
Jkt 244001
handler shall submit a final report
detailing how the restricted percentage
obligation was met using Form CMC–
AUG as specified in § 929.162(b).
(c) Request for review. (1) If a handler
is dissatisfied with a determination
made by the Committee which affects
such handler, the handler may submit to
the Committee within 30 days after
receipt of the Committee’s
determination, a request for a review by
an appeals subcommittee composed of
two independent growers and two
cooperative representatives, as well as a
public member. The appeals
subcommittee shall be appointed by the
Committee chairperson. The handler
may forward with the request any
pertinent materials for consideration of
the appeal.
(2) The subcommittee shall review the
information submitted by the handler
and render a decision within 30 days of
receipt of such appeal. The
subcommittee shall notify the handler of
its decision, accompanied by the
reasons for its conclusions and findings.
(3) The handler may further appeal to
the Secretary, within 15 days after
notification of the subcommittee’s
findings, if such handler is not satisfied
with the appeals subcommittee’s
decision. The Committee shall forward
a file to the Secretary with all pertinent
information related to the handler’s
appeal. The Secretary shall inform the
handler and all interested parties of the
Secretary’s decision. All decisions by
the Secretary are final.
■
3. Add § 929.162 to read as follows:
§ 929.162
Handler diversion reports.
(a) Handler withholding report.
Handlers shall submit to the Committee,
by June 1, a handler withholding report.
The report shall be submitted using
Form CMC–JUN and contain the
following information:
(1) The name and address of the
handler;
(2) The amount of cranberries
acquired;
(3) The amount of cranberries
withheld by disposal;
(4) The amount of cranberries
diverted to noncompetitive outlets;
(5) The form of cranberry products
withheld; and
(6) The total withholding obligation.
(b) Handler Withholding Final Report.
Handlers shall submit to the Committee,
by August 31, a final handler
withholding report. The final report
shall be submitted using Form CMC–
AUG and contain the following
information:
(1) The name and address of the
handler;
PO 00000
Frm 00007
Fmt 4700
Sfmt 4700
32197
(2) The seasonal total of cranberries
acquired;
(3) The seasonal total of cranberries
withheld by disposal;
(4) The seasonal total of cranberries
diverted to noncompetitive outlets;
(5) The form of cranberry products
withheld during the season; and
(6) The total withholding obligation.
(c) Handler disposal certification.
Handlers shall submit to the Committee
Form CMC–DISP for each lot of
cranberries or cranberry products to be
diverted through disposal. The form
shall contain the following information:
(1) Name and address of the handler;
(2) Marketable cranberries in whole
fruit or processed cranberries converted
to whole fruit equivalent disposed of in
this lot;
(3) Form of cranberries;
(4) Volume if in processed form;
(5) Lot details;
(6) Disposal site and method; and
(7) Inspector certification of the
completion of the disposal.
(d) Handler application for outlets for
withheld fruit. Handlers shall submit to
the Committee Form CMC–OUT for
approval for each lot of cranberries or
cranberry products to be diverted to
noncompetitive outlets in accordance
with § 929.57. The form shall contain
the following information:
(1) Name and address of the handler;
(2) Project type;
(3) Product form;
(4) Quantity of cranberries in whole
fruit or processed cranberries converted
to whole fruit equivalent diverted;
(5) A description of the project and
how the cranberries will be used.
(e) Third-party confirmation of receipt
of withheld fruit. Handlers shall submit
to the Committee Form CMC–CONF for
each diversion to a noncompetitive
outlet to verify the receipt of the
cranberries or cranberry product by the
approved outlet. The form shall contain
the following information:
(1) Name and address of the handler;
(2) Project type;
(3) Product form;
(4) Quantity of cranberries in whole
fruit or processed cranberries converted
to whole fruit equivalent utilized; and
(5) Confirmation or documentation of
receipt from the receiving outlet.
(f) Handler withholding appeal.
Handlers may appeal a determination
made by the Committee relating to a
handler withholding regulation using
the appeals process outlined in
§ 929.157(c) and Form CMC–APPL,
which shall contain the following
information:
(1) Name and address of the handler;
(2) Reason for appeal; and
(3) Information in support of appeal.
E:\FR\FM\12JYR1.SGM
12JYR1
32198
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
Dated: July 9, 2018.
Bruce Summers,
Administrator, Agricultural Marketing
Service.
[FR Doc. 2018–14939 Filed 7–11–18; 8:45 am]
BILLING CODE 3410–02–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2018–0588; Product
Identifier 2017–NM–105–AD; Amendment
39–19328; AD 2018–14–08]
RIN 2120–AA64
Airworthiness Directives; The Boeing
Company Airplanes
Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule; request for
comments.
AGENCY:
We are adopting a new
airworthiness directive (AD) for certain
The Boeing Company Model 777–200LR
series airplanes. This AD requires
revising certain documents to provide
revised operating limitations. For
certain airplanes, modification of the
water and fuel scavenge systems in the
fuel tanks, electrical changes in the
main equipment center, and installation
of new electrical load management
system (ELMS2) software is an
acceptable alternative to the documents
revision. This AD was prompted by
reports of unreliable performance of the
water and fuel scavenge systems. We are
issuing this AD to address the unsafe
condition on these products.
DATES: This AD is effective July 27,
2018.
The Director of the Federal Register
approved the incorporation by reference
of a certain publication listed in this AD
as of July 27, 2018.
We must receive comments on this
AD by August 27, 2018.
ADDRESSES: You may send comments,
using the procedures found in 14 CFR
11.43 and 11.45, by any of the following
methods:
• Federal eRulemaking Portal: Go to
http://www.regulations.gov. Follow the
instructions for submitting comments.
• Fax: 202–493–2251.
• Mail: U.S. Department of
Transportation, Docket Operations,
M–30, West Building Ground Floor,
Room W12–140, 1200 New Jersey
Avenue SE, Washington, DC 20590.
• Hand Delivery: Deliver to Mail
address above between 9 a.m. and 5
p.m., Monday through Friday, except
Federal holidays.
amozie on DSK3GDR082PROD with RULES
SUMMARY:
VerDate Sep<11>2014
16:03 Jul 11, 2018
Jkt 244001
For service information identified in
this final rule, contact Boeing
Commercial Airplanes, Attention:
Contractual & Data Services (C&DS),
2600 Westminster Blvd., MC 110–SK57,
Seal Beach, CA 90740–5600; telephone
562–797–1717; internet https://
www.myboeingfleet.com. You may view
this service information at the FAA,
Transport Standards Branch, 2200
South 216th St., Des Moines, WA. For
information on the availability of this
material at the FAA, call 206–231–3195.
It is also available on the internet at
http://www.regulations.gov by searching
for and locating Docket No. FAA–2018–
0588.
Examining the AD Docket
You may examine the AD docket on
the internet at http://
www.regulations.gov by searching for
and locating Docket No. FAA–2018–
0588; or in person at the Docket
Management Facility between 9 a.m.
and 5 p.m., Monday through Friday,
except Federal holidays. The AD docket
contains this final rule, the regulatory
evaluation, any comments received, and
other information. The street address for
the Docket Office (phone: 800–647–
5527) is in the ADDRESSES section.
Comments will be available in the AD
docket shortly after receipt.
FOR FURTHER INFORMATION CONTACT:
Kevin Nguyen, Aerospace Engineer,
Propulsion Section, FAA, Seattle ACO
Branch, 2200 South 216th St., Des
Moines, WA 98198; phone and fax: 206–
231–3555; email: Kevin.Nguyen@
faa.gov.
SUPPLEMENTARY INFORMATION:
Discussion
Operators have reported unreliable
performance of the water and fuel
scavenge systems. During flight, any
water in the fuel can sink to the bottom
of the fuel tank. This water can enter the
fuel scavenge inlets and can then freeze
as it travels from the body center fuel
tank into the colder fuel scavenge tubes
in the left and right cheek center fuel
tanks (outboard of the side of body ribs).
The frozen water can restrict the flow of
scavenge fuel from the center fuel tank
to the main fuel tanks, causing the fuel
flow to decrease or stop. When this
occurs, as much as 700 pounds of fuel
can remain unavailable during flight. If
the flightcrew is not aware that this fuel
is unavailable and the fuel quantity
decreases to the quantity of the
unavailable fuel, then fuel exhaustion
will occur, which could lead to
subsequent power loss of all engines
due to loss of capability to scavenge fuel
in the center fuel tank.
PO 00000
Frm 00008
Fmt 4700
Sfmt 4700
Related Rulemaking
We issued AD 2016–11–03,
Amendment 39–18530 (81 FR 34867,
June 1, 2016) (‘‘AD 2016–11–03’’), that
applied to certain Boeing Model 777–
200LR series airplanes equipped with or
without auxiliary fuel tanks. For
airplanes with auxiliary fuel tanks,
variable numbers WD049–WD053
inclusive only, AD 2016–11–03 requires
modification of the water and fuel
scavenge systems after removal of the
auxiliary fuel tanks. This AD requires
incorporation of revised operating
limitations for those airplanes, which
terminates the associated requirements
of AD 2016–11–03. This AD also
provides the option of modifying the
water and fuel scavenge systems in the
fuel tanks, making electrical changes in
the main equipment center, and
installing new ELMS2 software after
removal of the auxiliary fuel tanks.
Either compliance method terminates
the requirements of paragraphs (g), (h),
and (i) of AD 2016–11–03 for those
airplanes.
Additionally, paragraph (g) of this AD
requires a revision to certain documents
to provide revised operating limitations
for airplane variable numbers WD011
through WD015 inclusive and WD016
through WD018 inclusive. These
airplanes are not affected by AD 2016–
11–03, which refers to Boeing Special
Attention Service Bulletin 777–28–
0078, Revision 1, dated April 27, 2015,
for the applicability.
Airplane variable numbers WD011
through WD015 inclusive are included
in the effectivity of Boeing Special
Attention Service Bulletin 777–28–
0078, Revision 3, dated December 19,
2017; therefore, this AD provides a
modification of the water and fuel
scavenge systems in the fuel tanks,
electrical changes in the main
equipment center, and installation of
new ELMS2 software as an acceptable
alternative to the documents revision.
However, there is no approved service
information for airplane variable
numbers WD016 through WD018
inclusive for the modification of the
water and fuel scavenge systems in the
fuel tanks, electrical changes in the
main equipment center, and installation
of new ELMS2 software; therefore, there
is no alternative to the documents
revision specified in this AD for these
airplanes.
Related Service Information Under
1 CFR Part 51
We reviewed Boeing Special
Attention Service Bulletin 777–28–
0078, Revision 3, dated December 19,
2017. The service information describes
E:\FR\FM\12JYR1.SGM
12JYR1
32199
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
accomplishment of the actions specified
in the service information described
previously, as an acceptable alternative
to the documents revision.
procedures for the removal of the
auxiliary fuel tanks and modification of
the water and fuel scavenge systems in
the fuel tanks, electrical changes in the
main equipment center, and installation
of new ELMS2 software. This service
information is reasonably available
because the interested parties have
access to it through their normal course
of business or by the means identified
in the ADDRESSES section.
FAA’s Justification and Determination
of the Effective Date
There are currently no domestic
operators of this product. Therefore, we
find that notice and opportunity for
prior public comment are unnecessary
and that good cause exists for making
this amendment effective in less than 30
days.
FAA’s Determination
We are issuing this AD because we
evaluated all the relevant information
and determined the unsafe condition
described previously is likely to exist or
develop in other products of the same
type design.
Comments Invited
This AD is a final rule that involves
requirements affecting flight safety and
was not preceded by notice and an
opportunity for public comment.
However, we invite you to send any
written data, views, or arguments about
this final rule. Send your comments to
an address listed under the ADDRESSES
section. Include the docket number
AD Requirements
This AD requires revising certain
documents to provide revised operating
limitations. For certain airplanes, this
AD provides for the optional
FAA–2018–0588 and Product Identifier
2017–NM–105–AD at the beginning of
your comments. We specifically invite
comments on the overall regulatory,
economic, environmental, and energy
aspects of this final rule. We will
consider all comments received by the
closing date and may amend this final
rule because of those comments.
We will post all comments we
receive, without change, to http://
www.regulations.gov, including any
personal information you provide. We
will also post a report summarizing each
substantive verbal contact we receive
about this final rule.
Costs of Compliance
Currently, there are no affected U.S.registered airplanes. If an affected
airplane is imported and placed on the
U.S. Register in the future, we provide
the following cost estimates to comply
with this AD:
ESTIMATED COSTS FOR REQUIRED ACTIONS
Action
Labor cost
Revise operating limitations .........................................
1 work-hour × $85 per hour = $85 ...............................
Cost per
product
Parts cost
$0
$85
ESTIMATED COSTS FOR OPTIONAL ACTIONS
Action
Labor cost
Modification .................................................................
Up to 253 work-hours × $85 per hour = up to
$21,505.
amozie on DSK3GDR082PROD with RULES
Authority for This Rulemaking
Title 49 of the United States Code
specifies the FAA’s authority to issue
rules on aviation safety. Subtitle I,
section 106, describes the authority of
the FAA Administrator. ‘‘Subtitle VII:
Aviation Programs’’ describes in more
detail the scope of the Agency’s
authority.
We are issuing this rulemaking under
the authority described in Subtitle VII,
Part A, Subpart III, Section 44701:
‘‘General requirements.’’ Under that
section, Congress charges the FAA with
promoting safe flight of civil aircraft in
air commerce by prescribing regulations
for practices, methods, and procedures
the Administrator finds necessary for
safety in air commerce. This regulation
is within the scope of that authority
because it addresses an unsafe condition
that is likely to exist or develop on
products identified in this rulemaking
action.
This AD is issued in accordance with
authority delegated by the Executive
Director, Aircraft Certification Service,
VerDate Sep<11>2014
16:03 Jul 11, 2018
Jkt 244001
as authorized by FAA Order 8000.51C.
In accordance with that order, issuance
of ADs is normally a function of the
Compliance and Airworthiness
Division, but during this transition
period, the Executive Director has
delegated the authority to issue ADs
applicable to transport category
airplanes to the Director of the System
Oversight Division.
Regulatory Findings
This AD will not have federalism
implications under Executive Order
13132. This AD will not have a
substantial direct effect on the States, on
the relationship between the national
government and the States, or on the
distribution of power and
responsibilities among the various
levels of government.
For the reasons discussed above, I
certify that this AD:
(1) Is not a ‘‘significant regulatory
action’’ under Executive Order 12866,
PO 00000
Frm 00009
Fmt 4700
Sfmt 4700
Parts cost
$66,960
Cost per
product
Up to $88,465.
(2) Is not a ‘‘significant rule’’ under
DOT Regulatory Policies and Procedures
(44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation
in Alaska, and
(4) Will not have a significant
economic impact, positive or negative,
on a substantial number of small entities
under the criteria of the Regulatory
Flexibility Act.
List of Subjects in 14 CFR Part 39
Air transportation, Aircraft, Aviation
safety, Incorporation by reference,
Safety.
Adoption of the Amendment
Accordingly, under the authority
delegated to me by the Administrator,
the FAA amends 14 CFR part 39 as
follows:
PART 39—AIRWORTHINESS
DIRECTIVES
1. The authority citation for part 39
continues to read as follows:
■
Authority: 49 U.S.C. 106(g), 40113, 44701.
E:\FR\FM\12JYR1.SGM
12JYR1
32200
[Amended]
2. The FAA amends § 39.13 by adding
the following new airworthiness
directive (AD):
■
2018–14–08 The Boeing Company:
Amendment 39–19328; Docket No.
FAA–2018–0588; Product Identifier
2017–NM–105–AD.
(a) Effective Date
This AD is effective July 27, 2018.
(b) Affected ADs
This new AD affects AD 2016–11–03,
Amendment 39–18530 (81 FR 34867, June 1,
2016) (‘‘AD 2016–11–03’’).
amozie on DSK3GDR082PROD with RULES
(1) Insert the information specified in
figure 1 to the introductory text of paragraph
(g) of this AD into the ‘‘Fuel-System—
Loading’’ section of the ‘‘Certificate
Limitations’’ section of the FAA-approved
Boeing Model 777 Airplane Flight Manual.
(2) Insert the information specified in
figure 1 to the introductory text of paragraph
(g) of this AD into the ‘‘Loading Limitations’’
section of the ‘‘Fuel Loading Procedures’’
section of the ‘‘Fuel Management’’ section of
the FAA-approved Boeing Model 777 Weight
and Balance Control and Loading Manual.
(h) Optional Terminating Action for V/Ns
WD049–WD053 Inclusive and WD011–
WD015 Inclusive
For airplane V/Ns WD049 through WD053
inclusive, and WD011 through WD015
inclusive: Accomplishment of the actions
specified in paragraphs (h)(1) and (h)(2) of
this AD terminates the requirements of
paragraph (g) of this AD.
(1) Remove the auxiliary fuel tanks in
accordance with step 1. of the
Accomplishment Instructions of Boeing
Special Attention Service Bulletin 777–28–
0078, Revision 3, dated December 19, 2017.
(2) Modify the water and fuel scavenge
systems in the fuel tanks, make electrical
changes in the main equipment center, and
install new electrical load management
system (ELMS2) software, by doing all
applicable actions identified as ‘‘RC’’
(required for compliance) in, and in
accordance with, the Accomplishment
Instructions of Boeing Special Attention
Service Bulletin 777–28–0078, Revision 3,
dated December 19, 2017.
(i) Credit for Previous Actions
(1) This paragraph provides credit for the
actions specified in paragraphs (h)(1) and
(h)(2) of this AD, if those actions were
performed before the effective date of this AD
VerDate Sep<11>2014
16:03 Jul 11, 2018
Jkt 244001
(c) Applicability
This AD applies to The Boeing Company
Model 777–200LR series airplanes,
certificated in any category, variable numbers
(V/Ns) WD011 through WD015 inclusive,
WD016 through WD018 inclusive, and
WD049 through WD053 inclusive.
power loss of all engines due to loss of access
to fuel in the center fuel tank.
(d) Subject
Air Transport Association (ATA) of
America Code 28, Fuel.
(g) Revision to Operating Limitations
(e) Unsafe Condition
This AD was prompted by reports of
unreliable performance of the water and fuel
scavenge systems. We are issuing this AD to
prevent fuel exhaustion and subsequent
using Boeing Special Attention Service
Bulletin 777–28–0078, Revision 2, dated
October 5, 2016.
(2) This paragraph provides credit for
airplane V/Ns WD049 through WD053
inclusive for the actions specified in
paragraphs (h)(1) and (h)(2) of this AD, if
those actions were performed before the
effective date of this AD using April 27, 2015;
or Boeing Special Attention Service Bulletin
777–28–0078, Revision 1, dated April 27,
2015.
(j) Parts Installation Prohibition
After completion of the actions specified in
paragraph (h) of this AD, no person may
install an auxiliary fuel tank on that airplane.
(k) Terminating Action for AD 2016–11–03
for V/Ns WD049–WD053 Inclusive
Accomplishment of the actions required by
paragraph (g) or (h) of this AD terminates the
requirements of paragraphs (g), (h), and (i) of
AD 2016–11–03 for that airplane, V/Ns
WD049 through WD053 inclusive only.
(l) Alternative Methods of Compliance
(AMOCs)
(1) The Manager, Seattle ACO Branch,
FAA, has the authority to approve AMOCs
for this AD, if requested using the procedures
found in 14 CFR 39.19. In accordance with
14 CFR 39.19, send your request to your
principal inspector or local Flight Standards
District Office, as appropriate. If sending
information directly to the manager of the
certification office, send it to the attention of
the person identified in paragraph (m) of this
AD. Information may be emailed to [email protected].
(2) Before using any approved AMOC,
notify your appropriate principal inspector,
or lacking a principal inspector, the manager
of the local flight standards district office/
certificate holding district office.
PO 00000
Frm 00010
Fmt 4700
Sfmt 4700
(f) Compliance
Comply with this AD within the
compliance times specified, unless already
done.
Except as provided by paragraph (h) of this
AD: Within 36 months after the effective date
of this AD, revise the applicable section of
the documents specified in paragraphs (g)(1)
and (g)(2) of this AD to include the
information specified in figure 1 to the
introductory text of paragraph (g) of this AD.
(3) An AMOC that provides an acceptable
level of safety may be used for any repair,
modification, or alteration required by this
AD if it is approved by the Boeing
Commercial Airplanes Organization
Designation Authorization (ODA) that has
been authorized by the Manager, Seattle ACO
Branch, FAA, to make those findings. To be
approved, the repair method, modification
deviation, or alteration deviation must meet
the certification basis of the airplane, and the
approval must specifically refer to this AD.
(4) For service information that contains
steps that are labeled as Required for
Compliance (RC), the provisions of
paragraphs (l)(4)(i) and (l)(4)(ii) of this AD
apply.
(i) The steps labeled as RC, including
substeps under an RC step and any figures
identified in an RC step, must be done to
comply with the AD. If a step or substep is
labeled ‘‘RC Exempt,’’ then the RC
requirement is removed from that step or
substep. An AMOC is required for any
deviations to RC steps, including substeps
and identified figures.
(ii) Steps not labeled as RC may be
deviated from using accepted methods in
accordance with the operator’s maintenance
or inspection program without obtaining
approval of an AMOC, provided the RC steps,
including substeps and identified figures, can
still be done as specified, and the airplane
can be put back in an airworthy condition.
(m) Related Information
For more information about this AD,
contact Kevin Nguyen, Aerospace Engineer,
Propulsion Section, FAA, Seattle ACO
Branch, 2200 South 216th St., Des Moines,
WA 98198; phone and fax: 206–231–3555;
email: [email protected].
E:\FR\FM\12JYR1.SGM
12JYR1
ER12JY18.019
§ 39.13
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
(n) Material Incorporated by Reference
(1) The Director of the Federal Register
approved the incorporation by reference
(IBR) of the service information listed in this
paragraph under 5 U.S.C. 552(a) and 1 CFR
part 51.
(2) You must use this service information
as applicable to do the actions required by
this AD, unless the AD specifies otherwise.
(i) Boeing Special Attention Service
Bulletin 777–28–0078, Revision 3, dated
December 19, 2017.
(ii) Reserved.
(3) For service information identified in
this AD, contact Boeing Commercial
Airplanes, Attention: Contractual & Data
Services (C&DS), 2600 Westminster Blvd.,
MC 110–SK57, Seal Beach, CA 90740–5600;
telephone 562–797–1717; internet https://
www.myboeingfleet.com.
(4) You may view this service information
at the FAA, Transport Standards Branch,
2200 South 216th St., Des Moines, WA. For
information on the availability of this
material at the FAA, call 206–231–3195.
(5) You may view this service information
that is incorporated by reference at the
National Archives and Records
Administration (NARA). For information on
the availability of this material at NARA, call
202–741–6030, or go to: http://
www.archives.gov/federal-register/cfr/ibrlocations.html.
Issued in Des Moines, Washington, on June
29, 2018.
Jeffrey E. Duven,
Director, System Oversight Division, Aircraft
Certification Service.
[FR Doc. 2018–14702 Filed 7–11–18; 8:45 am]
BILLING CODE 4910–13–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2017–0757; Product
Identifier 2017–SW–022–AD; Amendment
39–19327; AD 2018–14–07]
RIN 2120–AA64
Airworthiness Directives; Bell
Helicopter Textron Canada Limited
Helicopters
Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule.
We are adopting a new
airworthiness directive (AD) for certain
serial numbered Bell Helicopter Textron
Canada Limited (BHTC) Model 429
helicopters. This AD requires marking a
serial number on life-limited forward
spars and actuator fitting assemblies.
The actions of this AD are intended to
prevent an unsafe condition on these
products.
DATES: This AD is effective August 16,
2018.
amozie on DSK3GDR082PROD with RULES
VerDate Sep<11>2014
16:03 Jul 11, 2018
Jkt 244001
Examining the AD Docket
You may examine the AD docket on
the internet at http://
www.regulations.gov by searching for
and locating Docket No. FAA–2017–
0757; or in person at Docket Operations
between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
The AD docket contains this AD, the
Transport Canada Civil Aviation
(Transport Canada) AD, any
incorporated-by-reference service
information, the economic evaluation,
any comments received, and other
information. The street address for
Docket Operations (phone: 800–647–
5527) is U.S. Department of
Transportation, Docket Operations, M–
30, West Building Ground Floor, Room
W12–140, 1200 New Jersey Avenue SE,
Washington, DC 20590.
FOR FURTHER INFORMATION CONTACT:
Helene Gandy, Aviation Safety
Engineer, Regulations & Policy Section,
Rotorcraft Standards Branch, FAA,
10101 Hillwood Pkwy., Fort Worth, TX
76177; telephone (817) 222–5413; email
[email protected].
SUPPLEMENTARY INFORMATION:
Discussion
AGENCY:
SUMMARY:
The Director of the Federal Register
approved the incorporation by reference
of a certain document listed in this AD
as of August 16, 2018.
ADDRESSES: For service information
identified in this final rule, contact Bell
Helicopter Textron Canada Limited,
12,800 Rue de l’Avenir, Mirabel, Quebec
J7J1R4; telephone (450) 437–2862 or
(800) 363–8023; fax (450) 433–0272; or
at http://www.bellcustomer.com/files/.
You may review the referenced service
information at the FAA, Office of the
Regional Counsel, Southwest Region,
10101 Hillwood Pkwy, Room 6N–321,
Fort Worth, TX 76177. It is also
available on the internet at http://
www.regulations.gov by searching for
and locating Docket No. FAA–2017–
0757.
On January 26, 2018, at 83 FR 3628,
the Federal Register published our
notice of proposed rulemaking (NPRM),
which proposed to amend 14 CFR part
39 by adding an AD that would apply
to Bell Model 429 helicopters, serial
number (S/N) 57150, 57168, 57176,
57210 through 57216, 57265, 57266,
57267, and 57287, with a forward spar
part number (P/N) 429–031–213–103 or
429–031–213–104 or actuator fitting
assembly P/N 429–031–222–101 or 429–
031–222–102 installed.
The NPRM proposed to require
marking a serial number on life-limited
forward spars and actuator fitting
PO 00000
Frm 00011
Fmt 4700
Sfmt 4700
32201
assemblies. The proposed requirements
were intended to prevent the forward
spar or actuator fitting assembly from
remaining in service after reaching its
life limit. This condition could result in
failure of a forward spar or actuator
fitting assembly and subsequent
collapse of the landing gear.
The NPRM was prompted by AD No.
CF–2017–02, dated January 16, 2017,
issued by Transport Canada, which is
the aviation authority for Canada, to
correct an unsafe condition for Bell
Model 429 helicopters, S/N 57150,
57168, 57176, 57210, 57211 through
57216, 57265, 57266, 57267, and 57287.
Transport Canada advises that forward
spars P/N 429–031–213–103 and 429–
031–213–104 and actuator fitting
assembly P/N 429–031–222–101 and
429–031–222–102 have life limits of
30,000 and 19,000 Retirement Index
Numbers, respectively. However,
Transport Canada states these parts are
not serialized, and therefore their
accumulated usage is difficult to track,
which creates a risk that these parts
could remain in service beyond their
life limits. This condition could result
in failure of the part.
Comments
We gave the public the opportunity to
participate in developing this AD, but
we received no comments on the NPRM.
FAA’s Determination
These helicopters have been approved
by the aviation authority of Canada and
are approved for operation in the United
States. Pursuant to our bilateral
agreement with Canada, Transport
Canada, its technical representative, has
notified us of the unsafe condition
described in the Transport Canada AD.
We are issuing this AD because we
evaluated all information provided by
Transport Canada and determined the
unsafe condition exists and is likely to
exist or develop on other helicopters of
these same type designs and that air
safety and the public interest require
adopting the AD requirements as
proposed.
Differences Between This AD and the
Transport Canada AD
The Transport Canada AD requires
compliance within 12 months from its
effective date, unless already
accomplished. This AD requires
compliance within 800 hours time-inservice.
Related Service Information Under 1
CFR Part 51
We reviewed Bell Helicopter Alert
Service Bulletin 429–16–34, dated
November 10, 2016, which specifies
E:\FR\FM\12JYR1.SGM
12JYR1
32202
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
procedures for permanently marking
each forward spar and actuator fitting
assembly with the serial number of the
helicopter.
This service information is reasonably
available because the interested parties
have access to it through their normal
course of business or by the means
identified in the ADDRESSES section.
Other Related Service Information
We also reviewed Bell Helicopter
Model 429 Maintenance Manual BHT–
429–MM–1, Chapter 4, Airworthiness
Limitations Schedule, Revision 26,
dated September 9, 2016, which
specifies airworthiness life limits and
inspection intervals for parts installed
on Model 429 helicopters.
Costs of Compliance
List of Subjects in 14 CFR Part 39
Air transportation, Aircraft, Aviation
safety, Incorporation by reference,
Safety.
We estimate that this AD affects 6
helicopters of U.S. Registry and that
labor costs average $85 per work-hour.
We estimate that marking the forward
spars and actuator fitting assemblies
requires 1 work-hour, and no parts are
needed. Based on these estimates, we
expect a total cost of $85 per helicopter
and $510 for the U.S. fleet.
Adoption of the Amendment
Authority for This Rulemaking
■
Title 49 of the United States Code
specifies the FAA’s authority to issue
rules on aviation safety. Subtitle I,
section 106, describes the authority of
the FAA Administrator. Subtitle VII:
Aviation Programs, describes in more
detail the scope of the Agency’s
authority.
We are issuing this rulemaking under
the authority described in Subtitle VII,
Part A, Subpart III, Section 44701:
‘‘General requirements.’’ Under that
section, Congress charges the FAA with
promoting safe flight of civil aircraft in
air commerce by prescribing regulations
for practices, methods, and procedures
the Administrator finds necessary for
safety in air commerce. This regulation
is within the scope of that authority
because it addresses an unsafe condition
that is likely to exist or develop on
helicopters identified in this rulemaking
action.
Regulatory Findings
amozie on DSK3GDR082PROD with RULES
(1) Is not a ‘‘significant regulatory
action’’ under Executive Order 12866;
(2) Is not a ‘‘significant rule’’ under
DOT Regulatory Policies and Procedures
(44 FR 11034, February 26, 1979);
(3) Will not affect intrastate aviation
in Alaska to the extent that it justifies
making a regulatory distinction; and
(4) Will not have a significant
economic impact, positive or negative,
on a substantial number of small entities
under the criteria of the Regulatory
Flexibility Act.
We prepared an economic evaluation
of the estimated costs to comply with
this AD and placed it in the AD docket.
This AD will not have federalism
implications under Executive Order
13132. This AD will not have a
substantial direct effect on the States, on
the relationship between the national
government and the States, or on the
distribution of power and
responsibilities among the various
levels of government.
For the reasons discussed above, I
certify that this AD:
VerDate Sep<11>2014
16:03 Jul 11, 2018
Jkt 244001
Accordingly, under the authority
delegated to me by the Administrator,
the FAA amends 14 CFR part 39 as
follows:
PART 39—AIRWORTHINESS
DIRECTIVES
1. The authority citation for part 39
continues to read as follows:
Authority: 49 U.S.C. 106(g), 40113, 44701.
§ 39.13
[Amended]
2. The FAA amends § 39.13 by adding
the following new airworthiness
directive (AD):
■
2018–14–07 Bell Helicopter Textron
Canada Limited: Amendment 39–19327;
Docket No. FAA–2017–0757; Product
Identifier 2017–SW–022–AD.
(a) Applicability
This AD applies to Bell Helicopter Textron
Canada Limited Model 429 helicopters, serial
number (S/N) 57150, 57168, 57176, 57210
through 57216, 57265, 57266, 57267, and
57287, with a forward spar part number
(P/N) 429–031–213–103 or 429–031–213–104
or actuator fitting assembly P/N 429–031–
222–101 or 429–031–222–102 installed,
certificated in any category.
(b) Unsafe Condition
This AD defines the unsafe condition as a
forward spar or actuator fitting assembly
remaining in service after reaching its life
limit. This condition could result in failure
of a forward spar or actuator fitting assembly
and subsequent collapse of the landing gear.
(c) Effective Date
This AD becomes effective August 16,
2018.
(d) Compliance
You are responsible for performing each
action required by this AD within the
specified compliance time unless it has
already been accomplished prior to that time.
PO 00000
Frm 00012
Fmt 4700
Sfmt 4700
(e) Required Actions
(1) Within 800 hours time-in-service, clean
and identify each forward spar and actuator
fitting assembly with the helicopter serial
number in accordance with the
Accomplishment Instructions, paragraphs 3
through 5 and with reference to Figure 1 of
Bell Helicopter Alert Service Bulletin 429–
16–34, dated November 10, 2016.
(2) After the effective date of this AD, do
not install a forward spar P/N 429–031–213–
103 or 429–031–213–104 or actuator fitting
assembly P/N 429–031–222–101 or 429–031–
222–102 on any helicopter unless it has been
marked with a serial number in accordance
with paragraph (e)(1) of this AD.
(f) Alternative Methods of Compliance
(AMOCs)
(1) The Manager, Safety Management
Section, FAA, may approve AMOCs for this
AD. Send your proposal to: Helene Gandy,
Aviation Safety Engineer, Regulations &
Policy Section, Rotorcraft Standards Branch,
FAA, 10101 Hillwood Pkwy., Fort Worth, TX
76177; telephone (817) 222–5413; email [email protected].
(2) For operations conducted under a 14
CFR part 119 operating certificate or under
14 CFR part 91, subpart K, we suggest that
you notify your principal inspector, or
lacking a principal inspector, the manager of
the local flight standards district office or
certificate holding district office before
operating any aircraft complying with this
AD through an AMOC.
(g) Additional Information
(1) Bell Helicopter Model 429 Maintenance
Manual BHT–429–MM–1, Chapter 4,
Airworthiness Limitations Schedule,
Revision 26, dated September 9, 2016, which
is not incorporated by reference, contains
additional information about the subject of
this AD. For service information identified in
this AD, contact Bell Helicopter Textron
Canada Limited, 12,800 Rue de l’Avenir,
Mirabel, Quebec J7J1R4; telephone (450)
437–2862 or (800) 363–8023; fax (450) 433–
0272; or at http://www.bellcustomer.com/
files/. You may review the referenced service
information at the FAA, Office of the
Regional Counsel, Southwest Region, 10101
Hillwood Pkwy., Room 6N–321, Fort Worth,
TX 76177.
(2) The subject of this AD is addressed in
Transport Canada AD No. CF–2017–02, dated
January 16, 2017. You may view the
Transport Canada AD on the internet at
http://www.regulations.gov in Docket No.
FAA–2017–0757.
(h) Subject
Joint Aircraft Service Component (JASC)
Code: 1100, Placards and Markings.
(i) Material Incorporated by Reference
(1) The Director of the Federal Register
approved the incorporation by reference of
the service information listed in this
paragraph under 5 U.S.C. 552(a) and 1 CFR
part 51.
(2) You must use this service information
as applicable to do the actions required by
this AD, unless the AD specifies otherwise.
(i) Bell Helicopter Alert Service Bulletin
429–16–34, dated November 10, 2016.
E:\FR\FM\12JYR1.SGM
12JYR1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
(ii) Reserved.
(3) For Bell Helicopter Textron Canada
Limited service information identified in this
AD, contact Bell Helicopter Textron Canada
Limited, 12,800 Rue de l’Avenir, Mirabel,
Quebec J7J1R4; telephone (450) 437–2862 or
(800) 363–8023; fax (450) 433–0272; or at
http://www.bellcustomer.com/files/.
(4) You may view this service information
at FAA, Office of the Regional Counsel,
Southwest Region, 10101 Hillwood Pkwy.,
Room 6N–321, Fort Worth, TX 76177. For
information on the availability of this
material at the FAA, call (817) 222–5110.
(5) You may view this service information
that is incorporated by reference at the
National Archives and Records
Administration (NARA). For information on
the availability of this material at NARA, call
(202) 741–6030, or go to: http://
www.archives.gov/federal-register/cfr/ibrlocations.html.
Issued in Fort Worth, Texas, on June 1,
2018.
James A. Grigg,
Acting Director, Compliance & Airworthiness
Division, Aircraft Certification Service.
[FR Doc. 2018–14701 Filed 7–11–18; 8:45 am]
BILLING CODE 4910–13–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
Examining the AD Docket
You may examine the AD docket on
the internet at http://
www.regulations.gov by searching for
and locating Docket No. FAA–2017–
1118; or in person at Docket Operations
between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
The AD docket contains this final rule,
the regulatory evaluation, any
comments received, and other
information. The address for Docket
Operations (phone: 800–647–5527) is
Docket Operations, U.S. Department of
Transportation, Docket Operations,
M–30, West Building Ground Floor,
Room W12–140, 1200 New Jersey
Avenue SE, Washington, DC 20590.
[Docket No. FAA–2017–1118; Product
Identifier 2017–NE–40–AD; Amendment 39–
19313; AD 2018–13–01]
John
Tallarovic, Aerospace Engineer, Chicago
ACO Branch, FAA, 2300 E. Devon Ave.,
Des Plaines, IL 60018; phone: 847–294–
8180; fax: 847–294–7834; email:
[email protected].
RIN 2120–AA64
SUPPLEMENTARY INFORMATION:
Airworthiness Directives; Rolls-Royce
Corporation Turboshaft Engines
Discussion
FOR FURTHER INFORMATION CONTACT:
14 CFR Part 39
Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule.
AGENCY:
We are adopting a new
airworthiness directive (AD) for certain
Rolls-Royce Corporation (RRC) model
250–C turboshaft engines. This AD was
prompted by several reports of engine
power loss, one of which resulted in a
fatal helicopter accident. This AD
requires removal of the power turbine
governor (PTG) bearing assembly, part
number (P/N) 2544198, and its
replacement with a bearing assembly
eligible for installation. We are issuing
this AD to address the unsafe condition
on these products.
DATES: This AD is effective August 16,
2018.
ADDRESSES: For service information
identified in this final rule, contact
Rolls-Royce Corporation, 450 South
Meridian Street, Mail Code NB–02–05,
Indianapolis, IN 46225; phone: 317–
230–3774; email: indy.pubs.services@
SUMMARY:
amozie on DSK3GDR082PROD with RULES
rolls-royce.com; internet: www.rollsroyce.com. You may view this service
information at the FAA, Engine and
Propeller Standards Branch, 1200
District Avenue, Burlington, MA. For
information on the availability of this
material at the FAA, call 781–238–7759.
It is also available on the internet at
http://www.regulations.gov by searching
for and locating Docket No. FAA–2018–
1118.
VerDate Sep<11>2014
16:03 Jul 11, 2018
Jkt 244001
We issued a notice of proposed
rulemaking (NPRM) to amend 14 CFR
part 39 by adding an AD that would
apply to certain Rolls-Royce
Corporation (RRC) model 250–C
turboshaft engines. The NPRM
published in the Federal Register on
February 1, 2018 (83 FR 4609). The
NPRM was prompted by several reports
of loss of engine power on certain RRC
model 250–C turboshaft engines
installed on single-engine helicopters.
One of these instances of power loss
resulted in a fatal helicopter accident on
May 4, 2016. The NPRM proposed to
require removal of the affected PTG
bearing assembly and replace it with a
bearing assembly with a new design. We
are issuing this AD to address the unsafe
condition on these products.
Comments
We gave the public the opportunity to
participate in developing this final rule.
The following presents the comments
received on the NPRM and the FAA’s
response to each comment.
PO 00000
Frm 00013
Fmt 4700
Sfmt 4700
32203
Request To Specify the New Bearing
Assembly
The NTSB and Honeywell Aerospace
requested that the AD prohibit the
installation of bearing assembly, P/N
2544198, and specify the installation of
the new bearing assembly, P/N 2526146.
The NTSB expressed concern that
differences between the proposed AD
and the actions described in the
Honeywell SB and Rolls-Royce CEBs
could lead to the reinstallation of a
dual-spool bearing into an affected PTG.
We partially agree. We agree with the
request to prohibit the installation of
another bearing assembly, P/N 2544198,
because our intent is to remove them
from service. We disagree with the
request to specify the installation of the
new bearing assembly, P/N 2526146,
because of the possibility of a new
bearing P/N being introduced or the
specified P/N being discontinued in the
future. We added an installation
prohibition paragraph to this AD to
prohibit the installation of bearing
assembly, P/N 2544198.
Request To Re-Identify the PTG After
Changing the Bearing Assembly
The NTSB and Honeywell Aerospace
requested that the AD require reidentifying the PTG P/N after changing
the bearing assembly in accordance with
the related service information.
Honeywell Aerospace reasoned that
maintenance personnel and operators
could easily determine if the service
bulletin has been accomplished. This
increases the efficiency of operations
and reduces the potential for
misunderstandings about whether the
bearing assembly has been replaced.
We disagree. While re-identifying the
PTG after changing the bearing assembly
is helpful for maintenance personnel,
we are not requiring this action within
this AD. During the replacement of the
bearing assembly, P/N 2544198, the
related service information instructs
personnel to re-identify the PTG. We
did not change this AD.
Request To Reduce the Compliance
Time
Honeywell Aerospace requested that
we reduce the compliance time to 50
hours or within 90 days for PTGs that
have greater than 750 hours. The
commenter reasoned that the original
compliance schedule was established 10
years ago based on field experience at
that time. The fatal accident referenced
in the NPRM occurred on a PTG with
1,048.7 hours since new.
We disagree. The compliance time for
removing the bearing assembly, P/N
2544198, in this AD is based on Rolls-
E:\FR\FM\12JYR1.SGM
12JYR1
32204
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
Royce Corporation Commercial Engine
Bulletin (CEB) 1402, Revision 2, dated
February 4, 2009. The failure history
shows that the number of bearing
assembly failures fell sharply following
the initial publication of RRC CEB 1402
in 2008. The replacement strategy has
proven successful. As a result, we
believe that the majority of the fleet has
replaced the bearing assembly, P/N
2544198, and only a few remain in
service. Besides the fatal accident, there
have not been any other bearing failures
noted between 2012 and 2018. We,
therefore, find it unnecessary to reduce
the compliance time as noted by the
commenter. We did not change this AD.
Request To Increase the Number of
Affected Engines
Honeywell Aerospace noted that only
1,200 engines installed on airplanes of
U.S. registry may be affected, compared
with the 2,928 mentioned in the NPRM,
based on a review of modification
records provided to Honeywell by repair
stations.
We disagree. We are estimating the
total number of engines affected by this
AD based on the data available to us.
We did not change this AD.
Request To Clarify the Affected Engines
An individual commenter requested
that we clarify that only those engine
models that have bearing assembly, P/N
2544198, installed are affected.
We agree. We have updated paragraph
(c) of this AD to clarify that engines
with bearing assembly, P/N 2544198,
installed are affected.
Request To Identify the Model, Brand,
and P/N of the PTG
Aircraft Maintenance Netherlands
requested that this AD identify the
model, brand, and P/N of the affected
PTG that must be replaced. The
commenter reasoned that various PTG
models can be installed on the affected
engines.
We disagree. This AD provides the
overall engine model applicability. The
related service information provides
specific information regarding the PTGs,
including the manufacturer, model, and
P/Ns. We did not change this AD.
Question on Not Issuing the AD Earlier
An individual commenter asked why
an AD was not issued in 2009 when
RRC issued a statement regarding the
failure of the bearing assembly.
The FAA uses a risk-based approach
to make continued operational safety
decisions. When RRC issued CEB 1402,
Revision 2, in 2009, our evaluation of
the fleet risk did not support an AD. We
update our fleet risk evaluation
periodically as new information
becomes available and have now
determined that an AD is justified. We
did not change this AD.
Question if Replacement Part
Verification Testing Was Completed
An individual commenter asked if
tests or procedures were completed to
verify that the replacement bearing
assembly resolves the failure of bearing
assembly, P/N 2544198, due to the lack
of lubrication.
We note that replacement parts, such
as this replacement bearing assembly,
undergo design analysis and testing
before being approved for use by the
FAA. No change is requested. We did
not change this AD.
Request for Clarification on the Number
of Affected Engines
An individual commenter noted that
the NPRM estimates that 2,928 model
250–C turboshaft engines are affected,
however, the RRC website estimates that
there are an estimated 16,000 model
250–C engines currently in service.
This AD applies to all RRC model
250–C turboshaft engines that could
have the bearing assembly, P/N
2544198, installed. Many of those
engines have already had the bearing
assembly, P/N 2544198, replaced when
new parts became available. Based on
the available data, we estimate that
2,928 engines may still have the bearing
assembly, P/N 2544198, installed. We
did not change this AD.
Question on the Availability of a
Replacement Bearing Assembly
An individual commenter asked if
RRC still needs to design a new bearing
assembly or if a replacement bearing
assembly is already available.
A replacement bearing assembly, P/N
2526146, is available for installation.
We did not change this AD.
Support for the AD
An individual commenter expressed
support for the NPRM as written.
Conclusion
We reviewed the relevant data,
considered the comments received, and
determined that air safety and the
public interest require adopting this
final rule with the changes described
previously. We have determined that
these minor changes:
• Are consistent with the intent that
was proposed in the NPRM for
addressing the unsafe condition; and
• Do not add any additional burden
upon the public than was already
proposed in the NPRM.
We also determined that these
changes will not increase the economic
burden on any operator or increase the
scope of this final rule.
Related Service Information
We reviewed Rolls-Royce Corporation
Commercial Engine Bulletin (CEB) 1402,
Revision 2, dated February 4, 2009. The
CEB provides guidance on replacing the
PTG bearing assembly, P/N 2544198,
with a bearing assembly eligible for
installation.
Costs of Compliance
We estimate that this AD affects 2,928
engines installed on airplanes of U.S.
registry.
We estimate the following costs to
comply with this AD:
ESTIMATED COSTS
Action
Labor cost
Remove and replace PTG bearing assembly
8 work-hours × $85 per hour = $680 .............
amozie on DSK3GDR082PROD with RULES
Authority for This Rulemaking
Title 49 of the United States Code
specifies the FAA’s authority to issue
rules on aviation safety. Subtitle I,
section 106, describes the authority of
the FAA Administrator. Subtitle VII:
Aviation Programs, describes in more
VerDate Sep<11>2014
16:03 Jul 11, 2018
Jkt 244001
Parts cost
detail the scope of the Agency’s
authority.
We are issuing this rulemaking under
the authority described in Subtitle VII,
Part A, Subpart III, Section 44701:
‘‘General requirements.’’ Under that
section, Congress charges the FAA with
PO 00000
Frm 00014
Fmt 4700
Sfmt 4700
$1,700
Cost per
product
$2,380
Cost on U.S.
operators
$6,968,640
promoting safe flight of civil aircraft in
air commerce by prescribing regulations
for practices, methods, and procedures
the Administrator finds necessary for
safety in air commerce. This regulation
is within the scope of that authority
because it addresses an unsafe condition
E:\FR\FM\12JYR1.SGM
12JYR1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
amozie on DSK3GDR082PROD with RULES
Regulatory Findings
(4) Will not have a significant
economic impact, positive or negative,
on a substantial number of small entities
under the criteria of the Regulatory
Flexibility Act.
List of Subjects in 14 CFR Part 39
Air transportation, Aircraft, Aviation
safety, Incorporation by reference,
Safety.
Adoption of the Amendment
Accordingly, under the authority
delegated to me by the Administrator,
the FAA amends 14 CFR part 39 as
follows:
PART 39—AIRWORTHINESS
DIRECTIVES
■
(2) After such removal, replace the affected
PTG bearing assembly with a part eligible for
installation before further flight.
(i) Alternative Methods of Compliance
(AMOCs)
(h) Installation Prohibition
After the effective date of this AD, do not
install PTG bearing assembly, P/N 2544198,
on any engine.
VerDate Sep<11>2014
16:03 Jul 11, 2018
Jkt 244001
1. The authority citation for part 39
continues to read as follows:
Authority: 49 U.S.C. 106(g), 40113, 44701.
[Amended]
2. The FAA amends § 39.13 by adding
the following new airworthiness
directive (AD):
■
2018–13–01 Roll-Royce Corporation (Type
Certificate previously held by Allison
Engine Company): Amendment 39–
19313; Docket No. FAA–2017–1118;
Product Identifier 2017–NE–40–AD.
(a) Effective Date
This AD is effective August 16, 2018.
(b) Affected ADs
None.
(1) The Manager, Chicago ACO Branch,
FAA, has the authority to approve AMOCs
for this AD, if requested using the procedures
found in 14 CFR 39.19. In accordance with
14 CFR 39.19, send your request to your
principal inspector or local Flight Standards
District Office, as appropriate. If sending
information directly to the manager of the
Chicago ACO Branch, send it to the attention
PO 00000
Frm 00015
Fmt 4700
Sfmt 4700
This AD applies to Rolls-Royce
Corporation (RRC) model 250–C10D, 250–
C18, 250–C18A, 250–C18B, 250–C18C, 250–
C19, 250–C20, 250–C20B, 250–C20C, 250–
C20F, 250–C20J, 250–C20R, 250–C20R/1,
250–C20R/2, 250–C20R/4, 250–C20S, 250–
C20W, 250–C28, 250–C28B, 250–C28C, 250–
C30, 250–C30G, 250–C30G/2, 250–C30M,
250–C30P, 250–C30S, and 250–C30U
turboshaft engines with power turbine
governor (PTG) bearing assembly, part
number (P/N) 2544198, installed.
(d) Subject
Joint Aircraft System Component (JASC)
Code 7323, Turbine Governor.
(e) Unsafe Condition
This AD will not have federalism
implications under Executive Order
13132. This AD will not have a
substantial direct effect on the States, on
the relationship between the national
government and the States, or on the
distribution of power and
responsibilities among the various
levels of government.
For the reasons discussed above, I
certify that this AD:
(1) Is not a ‘‘significant regulatory
action’’ under Executive Order 12866,
(2) Is not a ‘‘significant rule’’ under
DOT Regulatory Policies and Procedures
(44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation
in Alaska, and
§ 39.13
(c) Applicability
This AD was prompted by several reports
of loss of power, one of which resulted in a
fatal helicopter accident. We are issuing this
AD to prevent failure of the PTG bearing
assembly. The unsafe condition, if not
addressed, could result in failure of the PTG,
failure of the engine, in-flight shutdown, and
forced autorotation landing or accident.
(f) Compliance
Comply with this AD within the
compliance times specified, unless already
done.
(g) Required Actions
(1) Remove the bearing assembly, P/N
2544198, from the PTG in accordance with
the compliance times in Figure 1 to
paragraph (g) of this AD, or within 90 days
after the effective date of this AD, whichever
occurs later.
of the person identified in paragraph (j) of
this AD.
(2) Before using any approved AMOC,
notify your appropriate principal inspector,
or lacking a principal inspector, the manager
of the local flight standards district office/
certificate holding district office.
(j) Related Information
For more information about this AD,
contact John Tallarovic, Aerospace Engineer,
E:\FR\FM\12JYR1.SGM
12JYR1
ER12JY18.017
that is likely to exist or develop on
products identified in this rulemaking
action.
This AD is issued in accordance with
authority delegated by the Executive
Director, Aircraft Certification Service,
as authorized by FAA Order 8000.51C.
In accordance with that order, issuance
of ADs is normally a function of the
Compliance and Airworthiness
Division, but during this transition
period, the Executive Director has
delegated the authority to issue ADs
applicable to engines, propellers, and
associated appliances to the Manager,
Engine and Propeller Standards Branch,
Policy and Innovation Division.
32205
32206
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
Chicago ACO Branch, FAA, 2300 E Devon
Ave., Des Plaines, IL 60018; phone: 847–294–
8180; fax: 847–294–7834; email:
[email protected].
(k) Material Incorporated by Reference
None.
Issued in Burlington, Massachusetts, on
July 6, 2018.
Karen M. Grant,
Acting Manager, Engine and Propeller
Standards Branch, Aircraft Certification
Service.
[FR Doc. 2018–14801 Filed 7–11–18; 8:45 am]
BILLING CODE 4910–13–P
DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
33 CFR Part 100
[Docket No. USCG–2018–0662]
RIN 1625–AA08
Special Local Regulation; Marine City
Water Ski Show, St. Clair River, Marine
City, MI
Coast Guard, DHS.
Temporary final rule.
AGENCY:
ACTION:
The Coast Guard is
establishing a special local regulation
for certain navigable waters of the St.
Clair River, Marine City, MI. This action
is necessary and is intended to ensure
safety of life on navigable waters
immediately prior to, during, and
immediately after the Marine City Water
Ski Show.
DATES: This temporary final rule is
effective from 1 p.m. though 5 p.m. on
August 4, 2018.
ADDRESSES: To view documents
mentioned in this preamble as being
available in the docket, go to http://
www.regulations.gov, type USCG–2018–
0662 in the ‘‘SEARCH’’ box and click
‘‘SEARCH.’’ Click on Open Docket
Folder on the line associated with this
rule.
FOR FURTHER INFORMATION CONTACT: If
you have questions on this temporary
rule, call or email Tracy Girard,
Prevention Department, Sector Detroit,
Coast Guard; telephone (313) 568–9564,
or email [email protected].
SUPPLEMENTARY INFORMATION:
amozie on DSK3GDR082PROD with RULES
SUMMARY:
I. Table of Abbreviations
CFR Code of Federal Regulations
DHS Department of Homeland Security
FR Federal Register
NPRM Notice of Proposed Rulemaking
§ Section
COTP Captain of the Port
VerDate Sep<11>2014
16:03 Jul 11, 2018
Jkt 244001
U.S.C.
United States Code
II. Background Information and
Regulatory History
The Coast Guard is issuing this
temporary rule without prior notice and
opportunity to comment pursuant to
authority under section 4(a) of the
Administrative Procedure Act (APA) (5
U.S.C. 553(b)). This provision
authorizes an agency to issue a rule
without prior notice and opportunity to
comment when the agency for good
cause finds that those procedures are
‘‘impracticable, unnecessary, or contrary
to the public interest.’’ Under 5 U.S.C.
553(b)(B), the Coast Guard finds that
good cause exists for not publishing a
notice of proposed rulemaking (NPRM)
with respect to this rule because doing
so would be impracticable. The Coast
Guard just recently received the final
details of this water ski show, which
does not provide sufficient time to
publish an NPRM prior to the event.
Thus, delaying the effective date of this
rule to wait for a comment period to run
would be contrary to public interest
because it would inhibit the Coast
Guard’s ability to protect participants,
mariners and vessels from the hazards
associated with this event. It is
impracticable to publish an NPRM
because we lack sufficient time to
provide a reasonable comment period
and then consider those comments
before issuing this rule.
Under 5 U.S.C. 553(d)(3), the Coast
Guard finds that good cause exists for
making this rule effective less than 30
days after publication in the Federal
Register. Delaying the effective date of
this rule would inhibit the Coast
Guard’s ability to protect participants,
mariners and vessels from the hazards
associated with this event.
III. Legal Authority and Need for Rule
The Coast Guard is issuing this rule
under authority in 33 U.S.C. 1233. The
Captain of the Port Detroit (COTP) has
determined that the likely combination
of recreation vessels, commercial
vessels, and an unknown number of
spectators in close proximity to a water
ski show along the water pose extra and
unusual hazards to public safety and
property. Therefore, the COTP is
establishing a special local regulation
around the event location to help
minimize risks to safety of life and
property during this event.
IV. Discussion of the Rule
This rule establishes a special local
regulation from 1 p.m. though 5 p.m. on
August 4, 2018. The special local
regulation will encompass all U.S.
navigable waters of the St. Clair River,
PO 00000
Frm 00016
Fmt 4700
Sfmt 4700
Marine City, MI, bound by: 200 feet
seaward of latitude position 42°43.382′
N and 200 feet seaward of latitude
position 42°42.983′ N (NAD 83). The
special local regulation will be enforced
from 1 p.m. to 1:45 p.m. and from 4 p.m.
to 4:45 p.m. on August 4, 2018. No
vessel or person will be permitted to
enter the special local regulation
without obtaining permission from the
COTP or his designated representative.
V. Regulatory Analyses
We developed this rule after
considering numerous statutes and
Executive orders related to rulemaking.
Below we summarize our analyses
based on a number of these statutes and
Executive orders, and we discuss First
Amendment rights of protestors.
A. Regulatory Planning and Review
Executive Orders 12866 and 13563
direct agencies to assess the costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits.
Executive Order 13771 directs agencies
to control regulatory costs through a
budgeting process. This rule has not
been designated a ‘‘significant
regulatory action,’’ under Executive
Order 12866. Accordingly, this rule has
not been reviewed by the Office of
Management and Budget (OMB), and
pursuant to OMB guidance it is exempt
from the requirements of Executive
Order 13771.
This regulatory action determination
is based on the size, location, duration,
and time-of-year of the special local
regulation. Vessel traffic will be able to
safely transit around this special local
regulation zone which will impact a
small designated area of the St. Clair
River from 1 p.m. until 5 p.m. on
August 4, 2018. Moreover, the Coast
Guard will issue Broadcast Notice to
Mariners via VHF–FM marine channel
16 about the special local regulation and
the rule allows vessels to seek
permission to enter the area.
B. Impact on Small Entities
The Regulatory Flexibility Act of
1980, 5 U.S.C. 601–612, as amended,
requires Federal agencies to consider
the potential impact of regulations on
small entities during rulemaking. The
term ‘‘small entities’’ comprises small
businesses, not-for-profit organizations
that are independently owned and
operated and are not dominant in their
fields, and governmental jurisdictions
with populations of less than 50,000.
The Coast Guard certifies under 5 U.S.C.
605(b) that this rule will not have a
E:\FR\FM\12JYR1.SGM
12JYR1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
significant economic impact on a
substantial number of small entities.
While some owners or operators of
vessels intending to transit the special
local regulation may be small entities,
for the reasons stated in section V.A
above, this rule will not have a
significant economic impact on any
vessel owner or operator.
Under section 213(a) of the Small
Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104–121),
we want to assist small entities in
understanding this rule. If the rule
would affect your small business,
organization, or governmental
jurisdiction and you have questions
concerning its provisions or options for
compliance, please contact the person
listed in the FOR FURTHER INFORMATION
CONTACT section.
Small businesses may send comments
on the actions of Federal employees
who enforce, or otherwise determine
compliance with, Federal regulations to
the Small Business and Agriculture
Regulatory Enforcement Ombudsman
and the Regional Small Business
Regulatory Fairness Boards. The
Ombudsman evaluates these actions
annually and rates each agency’s
responsiveness to small business. If you
wish to comment on actions by
employees of the Coast Guard, call 1–
888–REG–FAIR (1–888–734–3247). The
Coast Guard will not retaliate against
small entities that question or complain
about this rule or any policy or action
of the Coast Guard.
C. Collection of Information
This rule will not call for a new
collection of information under the
Paperwork Reduction Act of 1995 (44
U.S.C. 3501–3520).
amozie on DSK3GDR082PROD with RULES
D. Federalism and Indian Tribal
Governments
A rule has implications for federalism
under Executive Order 13132,
Federalism, if it has a substantial direct
effect on the States, on the relationship
between the national government and
the States, or on the distribution of
power and responsibilities among the
various levels of government. We have
analyzed this rule under that Order and
have determined that it is consistent
with the fundamental federalism
principles and preemption requirements
described in Executive Order 13132.
Also, this rule does not have tribal
implications under Executive Order
13175, Consultation and Coordination
with Indian Tribal Governments,
VerDate Sep<11>2014
16:03 Jul 11, 2018
Jkt 244001
because it does not have a substantial
direct effect on one or more Indian
tribes, on the relationship between the
Federal Government and Indian tribes,
or on the distribution of power and
responsibilities between the Federal
Government and Indian tribes. If you
believe this rule has implications for
federalism or Indian tribes, please
contact the person listed in the FOR
FURTHER INFORMATION CONTACT section
above.
E. Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act
of 1995 (2 U.S.C. 1531–1538) requires
Federal agencies to assess the effects of
their discretionary regulatory actions. In
particular, the Act addresses actions
that may result in the expenditure by a
State, local, or tribal government, in the
aggregate, or by the private sector of
$100,000,000 (adjusted for inflation) or
more in any one year. Though this rule
will not result in such an expenditure,
we do discuss the effects of this rule
elsewhere in this preamble.
F. Environment
We have analyzed this rule under
Department of Homeland Security
Directive 023–01 and Commandant
Instruction M16475.1D, which guide the
Coast Guard in complying with the
National Environmental Policy Act of
1969 (42 U.S.C. 4321–4370f), and have
determined that this action is one of a
category of actions that do not
individually or cumulatively have a
significant effect on the human
environment. This rule involves a
special local regulation lasting less than
four hours that will prohibit entry into
a designated area. It is categorically
excluded from further review under
paragraph L[61] of Appendix A, Table 1
of DHS Instruction Manual 023–01–
001–01, Rev. 01. A Record of
Environmental Consideration
supporting this determination is
available in the docket where indicated
under ADDRESSES.
G. Protest Activities
The Coast Guard respects the First
Amendment rights of protesters.
Protesters are asked to contact the
person listed in the FOR FURTHER
INFORMATION CONTACT section to
coordinate protest activities so that your
message can be received without
jeopardizing the safety or security of
people, places or vessels.
PO 00000
Frm 00017
Fmt 4700
Sfmt 4700
32207
List of Subjects in 33 CFR Part 100
Marine safety, Navigation (water),
Reporting and recordkeeping
requirements, Waterways.
For the reasons discussed in the
preamble, the Coast Guard amends 33
CFR part 100 as follows:
PART 100—SAFETY OF LIFE ON
NAVIGABLE WATERS
1. The authority citation for part 100
continues to read as follows:
■
Authority: 33 U.S.C. 1233; 33 CFR 1.05–1.
2. Add § 100.T09–0662 to read as
follows:
■
§ 100.T09–0662 Special Local Regulation;
Marine City Water Ski Show, St. Clair River,
Marine City, MI.
(a) Regulated areas. The following
regulated area is established to include
all U.S. navigable waters of the St. Clair
River, Marine City, MI, bound by: 200
feet seaward of latitude position
42°43.382′ N and 200 feet seaward of
latitude position 42°42.983′ N (NAD 83).
(b) Enforcement date. The regulated
area described in paragraph (a) of this
section will be in effect from 1 p.m.
though 5 p.m. on August 4, 2018. The
special local regulation will be enforced
from 1 p.m. to 1:45 p.m. and from 4 p.m.
to 4:45 p.m. on August 4, 2018.
(c) Special local regulations. (1)
Vessels transiting through the regulated
area are to maintain the minimum
speeds for safe navigation.
(2) Vessel operators desiring to
operate in the regulated area must
contact the Coast Guard Patrol
Commander to obtain permission to do
so. The Captain of the Port Detroit
(COTP) or his on-scene representative
may be contacted via VHF Channel 16
or at 313–568–9560. Vessel operators
given permission to operate within the
regulated area must comply with all
directions given to them by the COTP or
his on-scene representative.
(3) The ‘‘on-scene representative’’ of
the COTP Detroit is any Coast Guard
commissioned, warrant or petty officer
or a Federal, State, or local law
enforcement officer designated by or
assisting the Captain of the Port Detroit
to act on his behalf.
Dated: July 5, 2018.
Kevin D. Floyd,
Commander, U.S. Coast Guard, Acting
Captain of the Port Detroit.
[FR Doc. 2018–14919 Filed 7–11–18; 8:45 am]
BILLING CODE 9110–04–P
E:\FR\FM\12JYR1.SGM
12JYR1
32208
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
33 CFR Part 165
RIN 1625–AA00
[Docket Number USCG–2018–0578]
Safety Zone; Alaska Marine Highway
System Port Valdez Ferry Terminal,
Port Valdez; Valdez, AK
Coast Guard, DHS.
Final rule.
AGENCY:
ACTION:
The Coast Guard is
republishing its 2014 rule that
established a permanent safety zone on
the navigable waters of Port Valdez
within a 200-yard radius of the Alaska
Marine Highway System (AMHS) Port
Valdez Ferry Terminal. The safety zone
restricts all vessels except AMHS
vessels from entering within 200-yards
of the AMHS Port Valdez Ferry
Terminal whenever an AMHS ferry is
underway within 200 yards of the
terminal and there is a declared
Commercial Salmon Fishery Opener.
This safety zone is necessary to provide
for the safety of life, property and the
environment during periods of vessel
traffic congestion during a declared
Commercial Salmon Fishery Opener.
DATES: This rule is effective July 12,
2018.
SUMMARY:
To view documents
mentioned in this preamble as being
available in the docket, go to http://
www.regulations.gov, type USCG–2018–
0578 in the ‘‘SEARCH’’ box and click
‘‘SEARCH.’’ Click on Open Docket
Folder on the line associated with this
rule.
FOR FURTHER INFORMATION CONTACT: If
you have questions about this
rulemaking, call or email LTJG, Carlos
M. Quintero, MSU Valdez, U.S. Coast
Guard; telephone 907–835–7209, email
[email protected].
SUPPLEMENTARY INFORMATION:
ADDRESSES:
I. Table of Abbreviations
amozie on DSK3GDR082PROD with RULES
AMHS Alaska Marine Highway System
CFR Code of Federal Regulations
DHS Department of Homeland Security
FR Federal Register
§ Section
U.S.C. United States Code
II. Background Information and
Regulatory History
The Coast Guard is issuing this rule
without prior notice and opportunity to
comment pursuant to authority under
section 4(a) of the Administrative
Procedure Act (5 U.S.C. 553(b)). This
VerDate Sep<11>2014
16:03 Jul 11, 2018
Jkt 244001
provision authorizes an agency to issue
a rule without prior notice and
opportunity to comment when the
agency for good cause finds that those
procedures are impracticable,
unnecessary, or contrary to the public
interest. Under 5 U.S.C. 553(b)(B), the
Coast Guard finds that good cause exists
for not publishing a notice of proposed
rulemaking with respect to this rule
because it is unnecessary to do so. This
is a republication, without change, of a
previously issued rule.
Under 5 U.S.C. 553(d)(3), the Coast
Guard finds that good cause exists for
making this rule effective less than 30
days after publication in the Federal
Register. The Coast Guard finds that
good cause exists because it is
unnecessary to do so. This is a
republication, without change of a
previously issued rule.
On February 4, 2014, the Coast Guard
published a rule that established a
permanent safety zone on the navigable
waters of Port Valdez within a 200-yard
radius of the Alaska Marine Highway
System (AMHS) Port Valdez Ferry
Terminal (79 FR 6468). The safety zone
restricts all vessels except AMHS
vessels from entering within 200-yards
of the AMHS Port Valdez Ferry
Terminal whenever an AMHS ferry is
underway within 200 yards of the
terminal and there is a declared
Commercial Salmon Fishery Opener.
That original rule, however, contained a
clerical error that prevented the Office
of the Federal Register from codifying
the rule into the Code of Federal
Regulations. The 2014 final rule
inadvertently used a pre-existing
number assigned to a different
regulation. Because the rule could not
be codified at the stated location, the
Office of the Federal Register, instead,
added an editorial note to 33 CFR
165.1712 noting the publication of the
2014 AMHS Port Valdez Ferry Terminal
rule.
The purpose of this rule is to
republish that 2014 rule, without
change, to a different section number so
that it can be codified into the Code of
Federal Regulations.
The authority to re-issue this safety
zone is 33 U.S.C. 1231. This safety zone
continues to be necessary to provide for
the safety of life, property and the
environment during periods of vessel
traffic congestion during a declared
Commercial Salmon Fishery Opener.
V. Regulatory Analyses
We developed this rule after
considering numerous statutes and
Executive orders related to rulemaking.
Below we summarize our analyses
PO 00000
Frm 00018
Fmt 4700
Sfmt 4700
based on a number of these statutes and
Executive orders.
A. Regulatory Planning and Review
Executive Orders 12866 and 13563
direct agencies to assess the costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits.
Executive Order 13771 directs agencies
to control regulatory costs through a
budgeting process. This rule has not
been designated a ‘‘significant
regulatory action,’’ under Executive
Order 12866. Accordingly, this rule has
not been reviewed by the Office of
Management and Budget (OMB), and
pursuant to OMB guidance it is exempt
from the requirements of Executive
Order 13771. This regulatory action
determination is based on the fact that
this is a republication, without change,
of a previously published rule.
B. Impact on Small Entities
The Regulatory Flexibility Act of
1980, 5 U.S.C. 601–612, as amended,
requires federal agencies to consider the
potential impact of regulations on small
entities during rulemaking. The term
‘‘small entities’’ comprises small
businesses, not-for-profit organizations
that are independently owned and
operated and are not dominant in their
fields, and governmental jurisdictions
with populations of less than 50,000.
The Coast Guard certifies under 5 U.S.C.
605(b) that this rule will not have a
significant economic impact on a
substantial number of small entities.
Under section 213(a) of the Small
Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104–121),
we want to assist small entities in
understanding this rule. If the rule
would affect your small business,
organization, or governmental
jurisdiction and you have questions
concerning its provisions or options for
compliance, please contact the person
listed in the FOR FURTHER INFORMATION
CONTACT section. Small businesses may
send comments on the actions of federal
employees who enforce, or otherwise
determine compliance with, federal
regulations to the Small Business and
Agriculture Regulatory Enforcement
Ombudsman and the Regional Small
Business Regulatory Fairness Boards.
The Ombudsman evaluates these
actions annually and rates each agency’s
responsiveness to small business. If you
wish to comment on actions by
employees of the Coast Guard, call 1–
888–REG–FAIR (1–888–734–3247). The
Coast Guard will not retaliate against
small entities that question or complain
E:\FR\FM\12JYR1.SGM
12JYR1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
about this rule or any policy or action
of the Coast Guard.
C. Collection of Information
This rule will not call for a new
collection of information under the
Paperwork Reduction Act of 1995 (44
U.S.C. 3501–3520).
D. Federalism and Indian Tribal
Governments
A rule has implications for federalism
under Executive Order 13132,
Federalism, if it has a substantial direct
effect on the States, on the relationship
between the national government and
the states, or on the distribution of
power and responsibilities among the
various levels of government. We have
analyzed this rule under that Order and
have determined that it is consistent
with the fundamental federalism
principles and preemption requirements
described in Executive Order 13132.
Also, this rule does not have tribal
implications under Executive Order
13175, Consultation and Coordination
with Indian Tribal Governments,
because it does not have a substantial
direct effect on one or more Indian
tribes, on the relationship between the
Federal Government and Indian tribes,
or on the distribution of power and
responsibilities between the Federal
Government and Indian tribes. If you
believe this rule has implications for
federalism or Indian tribes, please
contact the person listed in the FOR
FURTHER INFORMATION CONTACT section
above.
amozie on DSK3GDR082PROD with RULES
E. Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act
of 1995 (2 U.S.C. 1531–1538) requires
federal agencies to assess the effects of
their discretionary regulatory actions. In
particular, the Act addresses actions
that may result in the expenditure by a
state, local, or tribal government, in the
aggregate, or by the private sector of
$100,000,000 (adjusted for inflation) or
more in any one year. Though this rule
will not result in such an expenditure,
we do discuss the effects of this rule
elsewhere in this preamble.
F. Environment
We have analyzed this rule under
Department of Homeland Security
Directive 023–01 and Commandant
Instruction M16475.1D, which guide the
Coast Guard in complying with the
National Environmental Policy Act of
1969 (42 U.S.C. 4321–4370f), and have
determined that this action is one of a
category of actions that do not
individually or cumulatively have a
significant effect on the human
environment. This rule involves the
VerDate Sep<11>2014
16:03 Jul 11, 2018
Jkt 244001
republication, without change, of a
previously published rule. It is
categorically excluded from further
review under paragraph L60a of
Appendix A, Table 1 of DHS Instruction
Manual 023–01–001–01, Rev. 01. A
Record of Environmental Consideration
supporting this determination is
available in the docket where indicated
under ADDRESSES.
List of Subjects in 33 CFR Part 165
Harbors, Marine safety, Navigation
(water), Reporting and recordkeeping
requirements, Security measures,
Waterways.
For the reasons discussed in the
preamble, the Coast Guard amends 33
CFR part 165 as follows:
PART 165—REGULATED NAVIGATION
AREAS AND LIMITED ACCESS AREAS
1. The authority citation for part 165
continues to read as follows:
■
Authority: 33 U.S.C. 1231; 50 U.S.C. 191;
33 CFR 1.05–1, 6.04–1, 6.04–6, and 160.5;
Department of Homeland Security Delegation
No. 0170.1.
■
2. Add § 165.1714 to read as follows:
§ 165.1712a Safety Zone; Alaska Marine
Highway System Port Valdez Ferry
Terminal, Port Valdez; Valdez, AK.
(a) Location. The following area is a
safety zone: All navigable waters of Port
Valdez extending 200 yards in all
directions from the edges of the Alaska
Marine Highway System Terminal dock
located in Port Valdez at 61°07′26″ N
and 146°21′50″ W.
(b) Enforcement period. The rule will
be enforced whenever there is an Alaska
Marine Highway System Ferry vessel
transiting within the area described in
paragraph (a) of this section and there
is a Commercial Salmon Fishery Opener
that includes the navigable waters
within the safety zone. Each
enforcement period will be announced
by a broadcast notice to mariners when
the Commercial Salmon Fishery Opener
is announced.
(c) Definitions. The following
definitions apply to this section:
(1) The term ‘‘designated
representative’’ means any Coast Guard
commissioned, warrant or petty officer
of the U.S. Coast Guard who has been
designated by the Captain of the Port,
Prince William Sound, to act on his or
her behalf.
(2) The term ‘‘official patrol vessel’’
may consist of any Coast Guard, Coast
Guard Auxiliary, state, or local law
enforcement vessels assigned or
approved by the COTP, Prince William
Sound.
(3) The term ‘‘AMHS vessel’’ means
any vessel owned or operated by the
PO 00000
Frm 00019
Fmt 4700
Sfmt 4700
32209
Alaska Marine Highway System,
including, but not limited to: M/V
AURORA, M/V CHENEGA, M/V
COLUMBIA, M/V FAIRWEATHER, M/V
KENNICOTT, M/V LECONTE, M/V
LITUYA, M/V MALASPINA, M/V
MATANUSKA, M/V TAKU and M/V
TUSTUMENA.
(d) Regulations. (1) The general
regulations contained in 33 CFR 165.23,
as well as the requirements in
paragraphs (d)(2) through (5) of this
section, apply.
(2) No vessels, except for AMHS
ferries and vessels owned or operated by
AMHS will be allowed to transit the
safety zone without the permission of
the COTP Prince William Sound or the
designated representative during
periods of enforcement.
(3) All persons and vessels shall
comply with the instructions of the
COTP or the designated representative.
Upon being hailed by a U.S. Coast
Guard vessel or other official patrol
vessel by siren, radio, flashing light or
other means, the operator of the hailed
vessel shall proceed as directed.
(4) Vessel operators desiring to enter
or operate within the regulated area may
contact the COTP or the designated
representative via VHF channel 16 or
907–835–7205 (Prince William Sound
Vessel Traffic Service) to request
permission to do so.
(5) The COTP, Prince William Sound
may be aided by other Federal, state,
borough, and local law enforcement
officials in the enforcement of this
regulation. In addition, members of the
Coast Guard Auxiliary may be present to
inform vessel operators of this
regulation.
Dated: July 6, 2018.
M.R. Franklin,
Commander, U.S. Coast Guard, Captain of
the Port, Prince William Sound.
[FR Doc. 2018–14863 Filed 7–11–18; 8:45 am]
BILLING CODE 9110–04–P
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 52
[EPA–R03–OAR–2017–0152; FRL–9980–
62—Region 3]
Approval and Promulgation of Air
Quality Implementation Plans;
Delaware; Interstate Transport
Requirements for the 2012 Fine
Particulate Matter Standard
Environmental Protection
Agency (EPA).
ACTION: Final rule.
AGENCY:
E:\FR\FM\12JYR1.SGM
12JYR1
32210
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
The Environmental Protection
Agency (EPA) is approving a state
implementation plan (SIP) revision
submitted by the State of Delaware. This
revision pertains to the infrastructure
requirement for interstate transport of
pollution with respect to the 2012 fine
particulate matter (PM2.5) national
ambient air quality standards (NAAQS).
EPA is approving this revision in
accordance with the requirements of the
Clean Air Act (CAA).
amozie on DSK3GDR082PROD with RULES
SUMMARY:
II. Summary of SIP Revision and EPA
Analysis
Delaware’s December 14, 2015 SIP
submittal asserted that the State’s SIP
presently contains adequate provisions
prohibiting sources from emitting air
pollutants in amounts which will
contribute significantly to
nonattainment or interfere with
maintenance of the 2012 PM2.5 NAAQS.
Delaware also asserted under Delaware
Code, Title 7, Chapter 60, Subsection
DATES: This final rule is effective on
6010(c), ‘‘Rules and regulations; plans,’’
August 13, 2018.
that the State has the legal authority to
regulate sources whose emission could
ADDRESSES: EPA has established a
transport to areas in nonattainment or to
docket for this action under Docket ID
Number EPA–R03–OAR–2017–0152. All areas currently attaining the NAAQS.
Delaware also describes ambient air
documents in the docket are listed on
the http://www.regulations.gov website. quality data for New Castle, Kent, and
Sussex Counties as all being below the
Although listed in the index, some
NAAQS.
information is not publicly available,
EPA used the information in the 2016
e.g., confidential business information
PM2.5 Memorandum 1 and additional
(CBI) or other information whose
information to evaluate the submittal
disclosure is restricted by statute.
and came to the same conclusion as
Certain other material, such as
Delaware. As discussed in greater detail
copyrighted material, is not placed on
in the technical support document
the internet and will be publicly
(TSD) for this action, EPA identified the
available only in hard copy form.
potential downwind nonattainment and
Publicly available docket materials are
maintenance receptors identified in the
available through http://
2016 PM2.5 Memorandum, and then
www.regulations.gov, or please contact
the person identified in the FOR FURTHER evaluated them to determine if
Delaware’s emissions could potentially
INFORMATION CONTACT section for
contribute to nonattainment and
additional availability information.
maintenance problems in 2021, the
FOR FURTHER INFORMATION CONTACT:
attainment year for moderate PM2.5
Joseph Schulingkamp, (215) 814–2021,
nonattainment areas. EPA concluded
or by email at schulingkamp.joseph@
Delaware was not significantly
epa.gov.
contributing to nonattainment nor
interfering with maintenance with 2012
SUPPLEMENTARY INFORMATION:
PM2.5 NAAQS by any other state. A
detailed summary of Delaware’s
I. Background
submittal and EPA’s review and
On December 14, 2015, the State of
rationale for approval of this SIP
Delaware, through the Department of
revision as meeting CAA section
Natural Resources and Environmental
110(a)(2)(D)(i)(I) for the 2012 PM2.5
Control (DNREC) submitted a SIP
NAAQS may be found in the NPR and
revision addressing the infrastructure
TSD for this rulemaking action, which
requirements under section 110(a)(2) of
are available online at
the CAA for the 2012 PM2.5 NAAQS. On www.regulations.gov, Docket number
September 22, 2017, EPA approved all
EPA–R03–OAR–2017–0152.
portions of Delaware’s submittal except
III. Public Comments
for the portion addressing section
110(a)(2)(D)(i)(I) regarding the interstate
One anonymous public comment was
transport of emissions. See 82 FR 44318. received during the public comment
As explained in the final rule, EPA
period, but the comment was
intended to take separate action on that
determined to not be relevant nor
portion of Delaware’s submittal and is
specific to this rulemaking action. Thus
doing so with today’s proposed action.
no response is provided.
On May 15, 2018 (83 FR 22436), EPA
published a notice of proposed
1 ‘‘Information on the Interstate Transport ‘‘Good
rulemaking (NPR) for the State of
Neighbor’’ Provision for the 2012 Fine Particulate
Delaware. In the NPR, EPA proposed
Matter National Ambient Air Quality Standards
under Clean Air Act Section 110(a)(2)(D)(i)(I),’’
approval of Delaware’s submittal to
Memorandum from Stephen D. Page, Director, EPA
address the infrastructure requirements
Office of Air Quality Planning and Standards
under section 110(a)(2)(D)(i) of the CAA (March 17, 2016). A copy is included in the docket
for this rulemaking action.
for the 2012 PM2.5 NAAQS.
VerDate Sep<11>2014
16:03 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00020
Fmt 4700
Sfmt 4700
IV. Final Action
EPA is approving the December 14,
2015 SIP revision addressing the
interstate transport requirements for the
2012 PM2.5 NAAQS to the Delaware SIP
because the submittal adequately
addresses section 110(a)(2)(D)(i)(I) of the
CAA.
V. Statutory and Executive Order
Reviews
A. General Requirements
Under the CAA, the Administrator is
required to approve a SIP submission
that complies with the provisions of the
CAA and applicable federal regulations.
42 U.S.C. 7410(k); 40 CFR 52.02(a).
Thus, in reviewing SIP submissions,
EPA’s role is to approve state choices,
provided that they meet the criteria of
the CAA. Accordingly, this action
merely approves state law as meeting
federal requirements and does not
impose additional requirements beyond
those imposed by state law. For that
reason, this action:
• Is not a ‘‘significant regulatory
action’’ subject to review by the Office
of Management and Budget under
Executive Orders 12866 (58 FR 51735,
October 4, 1993) and 13563 (76 FR 3821,
January 21, 2011);
• is not an Executive Order 13771 (82
FR 9339, February 2, 2017) regulatory
action because SIP approvals are
exempted under Executive Order 12866.
• does not impose an information
collection burden under the provisions
of the Paperwork Reduction Act (44
U.S.C. 3501 et seq.);
• is certified as not having a
significant economic impact on a
substantial number of small entities
under the Regulatory Flexibility Act (5
U.S.C. 601 et seq.);
• does not contain any unfunded
mandate or significantly or uniquely
affect small governments, as described
in the Unfunded Mandates Reform Act
of 1995 (Pub. L. 104–4);
• does not have federalism
implications as specified in Executive
Order 13132 (64 FR 43255, August 10,
1999);
• is not an economically significant
regulatory action based on health or
safety risks subject to Executive Order
13045 (62 FR 19885, April 23, 1997);
• is not a significant regulatory action
subject to Executive Order 13211 (66 FR
28355, May 22, 2001);
• is not subject to requirements of
Section 12(d) of the National
Technology Transfer and Advancement
Act of 1995 (15 U.S.C. 272 note) because
application of those requirements would
be inconsistent with the CAA; and
E:\FR\FM\12JYR1.SGM
12JYR1
32211
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
• does not provide EPA with the
discretionary authority to address, as
appropriate, disproportionate human
health or environmental effects, using
practicable and legally permissible
methods, under Executive Order 12898
(59 FR 7629, February 16, 1994).
In addition, this rule does not have
tribal implications as specified by
Executive Order 13175 (65 FR 67249,
November 9, 2000), because the SIP is
not approved to apply in Indian country
located in the state, and EPA notes that
it will not impose substantial direct
costs on tribal governments or preempt
tribal law.
B. Submission to Congress and the
Comptroller General
The Congressional Review Act, 5
U.S.C. 801 et seq., as added by the Small
Business Regulatory Enforcement
Fairness Act of 1996, generally provides
that before a rule may take effect, the
agency promulgating the rule must
submit a rule report, which includes a
copy of the rule, to each House of the
Congress and to the Comptroller General
of the United States. EPA will submit a
report containing this action and other
*
*
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 52
[EPA–R09–OAR–2018–0104; FRL–9980–
43—Region 9]
Approval of California Air Plan
Revisions, Yolo-Solano Air Quality
Management District
Environmental Protection
Agency (EPA).
ACTION: Final rule.
AGENCY:
The Environmental Protection
Agency (EPA) is taking final action to
approve a revision to the Yolo-Solano
Air Quality Management District
(YSAQMD or ‘‘District’’) portion of the
California State Implementation Plan
SUMMARY:
16:03 Jul 11, 2018
State
submittal
date
*
12/14/2015
*
BILLING CODE 6560–50–P
amozie on DSK3GDR082PROD with RULES
Under section 307(b)(1) of the CAA,
petitions for judicial review of this
action must be filed in the United States
Court of Appeals for the appropriate
circuit by September 10, 2018. Filing a
petition for reconsideration by the
Administrator of this final rule does not
affect the finality of this action for the
purposes of judicial review nor does it
extend the time within which a petition
for judicial review may be filed, and
shall not postpone the effectiveness of
such rule or action. This action,
addressing Delaware’s interstate
transport for the 2012 PM2.5 NAAQS,
may not be challenged later in
proceedings to enforce its requirements.
(See section 307(b)(2).)
*
Statewide ..........
[FR Doc. 2018–14838 Filed 7–11–18; 8:45 am]
VerDate Sep<11>2014
C. Petitions for Judicial Review
Applicable
geographic
area
Name of non-regulatory SIP revision
*
*
Section 110(a)(2) Infrastructure Requirements for the 2012 PM2.5 NAAQS.
required information to the U.S. Senate,
the U.S. House of Representatives, and
the Comptroller General of the United
States prior to publication of the rule in
the Federal Register. A major rule
cannot take effect until 60 days after it
is published in the Federal Register.
This action is not a ‘‘major rule’’ as
defined by 5 U.S.C. 804(2).
Jkt 244001
Fmt 4700
Dated: June 19, 2018.
Cosmo Servidio,
Regional Administrator, Region III.
40 CFR part 52 is amended as follows:
PART 52—APPROVAL AND
PROMULGATION OF
IMPLEMENTATION PLANS
1. The authority citation for part 52
continues to read as follows:
■
Authority: 42 U.S.C. 7401 et seq.
Subpart I—Delaware
2. In § 52.420, the table in paragraph
(e) is amended by adding a second entry
for Section 110(a)(2) Infrastructure
Requirements for the 2012 PM2.5
NAAQS after the first entry. The revised
text reads as follows:
■
§ 52.470
*
Identification of plan.
*
*
(e) * * *
*
*
Additional explanation
*
7/12/2018, [Insert
Federal Register
citation].
*
*
Docket 2017–0152. This action addresses the infrastructure element of CAA
section 110(a)(2)(D)(i)(I).
*
Frm 00021
Environmental protection, Air
pollution control, Incorporation by
reference, Particulate matter.
EPA
approval
date
*
(SIP). This revision concerns emissions
of volatile organic compounds (VOCs)
from architectural coatings. We are
approving a local rule that regulates
these emission sources under the Clean
Air Act (CAA or the Act).
DATES: This rule is effective on August
13, 2018.
ADDRESSES: The EPA has established a
docket for this action under Docket ID
No. EPA–R09–OAR–2018–0104. All
documents in the docket are listed on
the http://www.regulations.gov website.
Although listed in the index, some
information is not publicly available,
e.g., Confidential Business Information
(CBI) or other information whose
disclosure is restricted by statute.
Certain other material, such as
copyrighted material, is not placed on
the internet and will be publicly
available only in hard copy form.
Publicly available docket materials are
available through http://
PO 00000
List of Subjects in 40 CFR Part 52
Sfmt 4700
*
*
www.regulations.gov, or please contact
the person identified in the FOR FURTHER
INFORMATION CONTACT section for
additional availability information.
FOR FURTHER INFORMATION CONTACT:
Arnold Lazarus, EPA Region IX, (415)
972–3024, [email protected].
SUPPLEMENTARY INFORMATION:
Throughout this document, ‘‘we,’’ ‘‘us’’
and ‘‘our’’ refer to the EPA.
Table of Contents
I. Proposed Action
II. Public Comments and EPA Responses
III. EPA Action
IV. Incorporation by Reference
V. Statutory and Executive Order Reviews
I. Proposed Action
On May 3, 2018 (83 FR 19495), the
EPA proposed to approve the following
rule into the California SIP.
E:\FR\FM\12JYR1.SGM
12JYR1
32212
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
Local agency
Rule No.
YSAQMD ................................
2.14
We proposed to approve this rule
because we determined that it complies
with the relevant CAA requirements.
Our proposed action contains more
information on the rule and our
evaluation.
II. Public Comments and EPA
Responses
The EPA’s proposed action provided
a 30-day public comment period. During
this period, we received one comment
in support of regulating VOC emissions,
and another that was not germane to
this rule.
III. EPA Action
No comments were submitted that
change our assessment of the rule as
described in our proposed action.
Therefore, as authorized in section
110(k)(3) of the Act, the EPA is fully
approving this rule into the California
SIP.
IV. Incorporation by Reference
In this rule, the EPA is finalizing
regulatory text that includes
incorporation by reference. In
accordance with requirements of 1 CFR
51.5, the EPA is finalizing the
incorporation by reference of the
YSAQMD rule described in the
amendments to 40 CFR part 52 set forth
below. The EPA has made, and will
continue to make, these documents
available through www.regulations.gov
and at the EPA Region IX Office (please
contact the person identified in the FOR
FURTHER INFORMATION CONTACT section of
this preamble for more information).
amozie on DSK3GDR082PROD with RULES
V. Statutory and Executive Order
Reviews
Under the Clean Air Act, the
Administrator is required to approve a
SIP submission that complies with the
provisions of the Act and applicable
Federal regulations. 42 U.S.C. 7410(k);
40 CFR 52.02(a). Thus, in reviewing SIP
submissions, the EPA’s role is to
approve state choices, provided that
they meet the criteria of the Clean Air
Act. Accordingly, this action merely
approves state law as meeting Federal
requirements and does not impose
additional requirements beyond those
imposed by state law. For that reason,
this action:
• Is not a significant regulatory action
subject to review by the Office of
Management and Budget under
Executive Orders 12866 (58 FR 51735,
VerDate Sep<11>2014
16:03 Jul 11, 2018
Jkt 244001
Rule title
Revised
Architectural Coatings ............................................................
October 4, 1993) and 13563 (76 FR 3821,
January 21, 2011);
• Is not an Executive Order 13771 (82
FR 9339, February 2, 2017) regulatory
action because SIP approvals are
exempted under Executive Order 12866;
• Does not impose an information
collection burden under the provisions
of the Paperwork Reduction Act (44
U.S.C. 3501 et seq.);
• Is certified as not having a
significant economic impact on a
substantial number of small entities
under the Regulatory Flexibility Act (5
U.S.C. 601 et seq.);
• Does not contain any unfunded
mandate or significantly or uniquely
affect small governments, as described
in the Unfunded Mandates Reform Act
of 1995 (Pub. L. 104–4);
• Does not have Federalism
implications as specified in Executive
Order 13132 (64 FR 43255, August 10,
1999);
• Is not an economically significant
regulatory action based on health or
safety risks subject to Executive Order
13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action
subject to Executive Order 13211 (66 FR
28355, May 22, 2001);
• Is not subject to requirements of
Section 12(d) of the National
Technology Transfer and Advancement
Act of 1995 (15 U.S.C. 272 note) because
application of those requirements would
be inconsistent with the Clean Air Act;
and
• Does not provide the EPA with the
discretionary authority to address, as
appropriate, disproportionate human
health or environmental effects, using
practicable and legally permissible
methods, under Executive Order 12898
(59 FR 7629, February 16, 1994).
In addition, the SIP is not approved
to apply on any Indian reservation land
or in any other area where the EPA or
an Indian tribe has demonstrated that a
tribe has jurisdiction. In those areas of
Indian country, the rule does not have
tribal implications and will not impose
substantial direct costs on tribal
governments or preempt tribal law as
specified by Executive Order 13175 (65
FR 67249, November 9, 2000).
The Congressional Review Act, 5
U.S.C. 801 et seq., as added by the Small
Business Regulatory Enforcement
Fairness Act of 1996, generally provides
that before a rule may take effect, the
agency promulgating the rule must
submit a rule report, which includes a
PO 00000
Frm 00022
Fmt 4700
Sfmt 4700
10/12/2016
Submitted
01/24/2017
copy of the rule, to each House of the
Congress and to the Comptroller General
of the United States. The EPA will
submit a report containing this action
and other required information to the
U.S. Senate, the U.S. House of
Representatives, and the Comptroller
General of the United States prior to
publication of the rule in the Federal
Register. A major rule cannot take effect
until 60 days after it is published in the
Federal Register. This action is not a
‘‘major rule’’ as defined by 5 U.S.C.
804(2).
Under section 307(b)(1) of the Clean
Air Act, petitions for judicial review of
this action must be filed in the United
States Court of Appeals for the
appropriate circuit by September 10,
2018. Filing a petition for
reconsideration by the Administrator of
this final rule does not affect the finality
of this action for the purposes of judicial
review nor does it extend the time
within which a petition for judicial
review may be filed, and shall not
postpone the effectiveness of such rule
or action. This action may not be
challenged later in proceedings to
enforce its requirements. (See section
307(b)(2).)
List of Subjects in 40 CFR Part 52
Environmental protection, Air
pollution control, Incorporation by
reference, Ozone, Reporting and
recordkeeping requirements, Volatile
organic compounds.
Dated: June 22, 2018.
Deborah Jordan,
Acting Regional Administrator, Region IX.
Part 52, chapter I, title 40 of the Code
of Federal Regulations is amended as
follows:
PART 52—APPROVAL AND
PROMULGATION OF
IMPLEMENTATION PLANS
1. The authority citation for part 52
continues to read as follows:
■
Authority: 42 U.S.C. 7401 et seq.
Subpart F—California
2. Section 52.220 is amended by
adding paragraphs (c)(293)(i)(B)(2) and
(c)(497)(i)(D)(2) to read as follows:
■
§ 52.220
*
Identification of plan-in part.
*
*
(c) * * *
(293) * * *
E:\FR\FM\12JYR1.SGM
12JYR1
*
*
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
(i) * * *
(B) * * *
(2) Previously approved on January 2,
2004 in paragraph (c)(293)(i)(B)(1) of
this section and now deleted with
replacement in (c)(497)(i)(D)(2), Rule
2.14, adopted on November 14, 2001.
*
*
*
*
*
(497) * * *
(i) * * *
(D) * * *
(2) Rule 2.14, ‘‘Architectural
Coatings,’’ revised on October 12, 2016.
*
*
*
*
*
[FR Doc. 2018–14946 Filed 7–11–18; 8:45 am]
BILLING CODE 6560–50–P
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 63
[EPA–HQ–OAR–2014–0741; FRL–9980–84–
OAR]
National Emission Standards for
Hazardous Air Pollutants for Chemical
Recovery Combustion Sources at
Kraft, Soda, Sulfite, and Stand-Alone
Semichemical Pulp Mills
Environmental Protection
Agency (EPA).
ACTION: Notification of final action
denying petition for reconsideration.
AGENCY:
The U.S. Environmental
Protection Agency (EPA) is providing
notice that it has responded to a petition
for reconsideration of the final National
Emission Standards for Hazardous Air
Pollutants (NESHAP) for Chemical
Recovery Combustion Sources at Kraft,
Soda, Sulfite, and Stand-Alone
Semichemical Pulp Mills published in
the Federal Register on October 11,
2017. The Acting Administrator denied
the petition in a separate letter to the
petitioners. The letter, which provides a
full explanation of the agency’s
rationale for the denial, is in the
rulemaking docket.
DATES: July 12, 2018.
FOR FURTHER INFORMATION CONTACT: Dr.
Kelley Spence, Sector Policies and
Programs Division (E143–03), Office of
Air Quality Planning and Standards,
Environmental Protection Agency,
Research Triangle Park, North Carolina
27711; telephone number: (919) 541–
3158; fax number: (919) 541–0516;
email address: [email protected].
SUPPLEMENTARY INFORMATION:
amozie on DSK3GDR082PROD with RULES
SUMMARY:
I. How can I get copies of this document
and other related information?
This Federal Register document, the
petition for reconsideration, and the
VerDate Sep<11>2014
16:03 Jul 11, 2018
Jkt 244001
letter denying the petition for
reconsideration are available in the
docket the EPA established under
Docket ID No. EPA–HQ–OAR–2014–
0741. All documents in the docket are
listed on the www.regulations.gov
website. Although listed, some
information is not publicly available,
e.g., confidential business information
or other information whose disclosure is
restricted by statute. Certain other
material, such as copyrighted material,
is not placed on the internet and will be
publicly available only in hard copy
form. Publicly available docket
materials are available either
electronically through
www.regulations.gov or in hard copy at
the EPA Docket Center (EPA/DC), Room
3334, EPA WJC West Building, 1301
Constitution Ave. NW, Washington, DC.
The Public Reading Room is open from
8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. The
telephone number for the Public
Reading Room is (202) 566–1744 and
the telephone number for the Air Docket
is (202) 566–1742.
II. Judicial Review
Section 307(b)(1) of the Clean Air Act
(CAA) indicates which Federal Courts of
Appeals have venue for petitions for
review of final EPA actions. This section
provides, in part, that the petitions for
review must be filed in the United
States Court of Appeals for the District
of Columbia Circuit if: (1) The agency
action consists of ‘‘nationally applicable
regulations promulgated, or final action
taken, by the Administrator,’’ or (2) such
actions are locally or regionally
applicable, if ‘‘such action is based on
a determination of nationwide scope or
effect and if in taking such action the
Administrator finds and publishes that
such action is based on such a
determination.’’
The EPA has determined that its
action denying the petition for
reconsideration is nationally applicable
for purposes of CAA section 307(b)(1)
because the action directly affects the
NESHAP for Chemical Recovery
Combustion Sources at Kraft, Soda,
Sulfite, and Stand-Alone Semichemical
Pulp Mills, which are nationally
applicable CAA section 112 standards.
Any petitions for review of the letter
denying the petition for reconsideration
must be filed in the United States Court
of Appeals for the District of Columbia
Circuit by September 10, 2018.
III. Description of Action
On October 11, 2017, pursuant to
sections 112(d)(6) and (f)(2) of the CAA,
the EPA published the final residual
risk and technology review (RTR) of the
PO 00000
Frm 00023
Fmt 4700
Sfmt 4700
32213
‘‘National Emission Standards for
Hazardous Air Pollutants for Chemical
Recovery Combustion Sources at Kraft,
Soda, Sulfite, and Stand-Alone
Semichemical Pulp Mills.’’ 82 FR
47328. Following publication of the
final RTR amendments, the
Administrator received a petition for
reconsideration of two aspects of the
final RTR pursuant to CAA section
307(d)(7)(B). The petitioners,
Earthjustice on behalf of Crossett
Concerned Citizens for Environmental
Justice, Louisiana Environmental Action
Network, PT AirWatchers, and Sierra
Club, claimed: (1) It was impracticable
to object to the EPA’s rationale for not
setting additional standards for
uncontrolled emissions when the EPA
was conducting the review required by
CAA section 112(d)(6), and their
objections on this issue are of central
relevance to the outcome of the rule;
and (2) it was impracticable to object
during the comment period to the EPA’s
use of census block centroids to account
for the residual risk to the most exposed
individual, and their objections on this
issue are of central relevance to the
outcome of the rule.
CAA section 307(d)(7)(B) requires the
EPA to convene a proceeding for
reconsideration of a rule if a party
raising an objection to the rule ‘‘can
demonstrate to the Administrator that it
was impracticable to raise such
objection within [the public comment
period] or if the grounds for such
objection arose after the period for
public comment (but within the time
specified for judicial review) and if such
objection is of central relevance to the
outcome of the rule.’’ The requirement
to convene a proceeding to reconsider a
rule is, thus, based on the petitioner
demonstrating to the EPA both: (1) That
it was impracticable to raise the
objection during the comment period, or
that the grounds for such objection arose
after the comment period, but within
the time specified for judicial review
(i.e., within 60 days after publication of
the final rulemaking in the Federal
Register, see CAA section 307(b)(1));
and (2) that the objection is of central
relevance to the outcome of the rule.
The EPA carefully reviewed the
petition for reconsideration and
evaluated the issues raised to determine
if they meet the CAA section
307(d)(7)(B) criteria for reconsideration.
In a separate letter to the petitioners, the
EPA Acting Administrator, Andrew R.
Wheeler, denied the petition for
reconsideration. The letter is available
in the docket for this action.
E:\FR\FM\12JYR1.SGM
12JYR1
32214
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
Dated: July 9, 2018.
Andrew R. Wheeler,
Acting Administrator.
[FR Doc. 2018–15023 Filed 7–11–18; 8:45 am]
amozie on DSK3GDR082PROD with RULES
BILLING CODE 6560–50–P
VerDate Sep<11>2014
16:03 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00024
Fmt 4700
Sfmt 9990
E:\FR\FM\12JYR1.SGM
12JYR1
32215
Proposed Rules
Federal Register
Vol. 83, No. 134
Thursday, July 12, 2018
This section of the FEDERAL REGISTER
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1206
[Document. No. AMS–SC–17–0002]
Mango Promotion, Research, and
Information Order; Reopening and
Extension of Comment Period on
Amendment To Include Frozen Mangos
AGENCY:
Agricultural Marketing Service,
USDA.
Reopening and extension of
comment period.
ACTION:
Notice is hereby given that
the comment period on the proposed
rule to amend the Mango Promotion,
Research, and Information Order to
include frozen mangos is reopened and
extended. Also, the comment period is
extended for the frozen mangos
information and collection requirements
by the Office of Management and
Budget (OMB) which is necessary to
include frozen mangos under the
current program.
DATES: Comments must be received by
August 13, 2018. Pursuant to the
Paperwork Reduction Act (PRA),
comments on the information collection
burden that would result from this
proposal must be received by August 13,
2018.
ADDRESSES: Interested persons are
invited to submit written comments
concerning this proposal. Comments
may be submitted on the internet at:
http://www.regulations.gov or to the
Promotion and Economics Division,
Specialty Crops Program, AMS, USDA,
1400 Independence Avenue SW, Room
1406–S, Stop 0244, Washington, DC
20250–0244; facsimile: (202) 205–2800.
All comments should reference the
docket number and the date and page
number of this issue of the Federal
Register and will be made available for
public inspection, including name and
address, if provided, in the above office
during regular business hours or it can
amozie on DSK3GDR082PROD with PROPOSALS1
SUMMARY:
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
be viewed at http://
www.regulations.gov.
Pursuant to the PRA, comments
regarding the accuracy of the burden
estimate, ways to minimize the burden,
including the use of automated
collection techniques or other forms of
information technology, or any other
aspect of this collection of information,
should be sent to the above address. In
addition, comments concerning the
information collection should also be
sent to the Desk Office for Agriculture,
Office of Information and Regulatory
Affairs, OMB, New Executive Office
Building, 725 17th Street NW, Room
725, Washington, DC 20503.
FOR FURTHER INFORMATION CONTACT:
Jeanette Palmer, Marketing Specialist,
Promotion and Economics Division,
Specialty Crops Program, AMS, USDA,
1400 Independence Avenue SW, Room
1406–S, Stop 0244, Washington, DC
20250–0244; telephone: (202) 720–9915;
facsimile: (202) 205–2800; or electronic
mail: [email protected].
SUPPLEMENTARY INFORMATION: A
proposed rule was published in the
Federal Register on April 6, 2018 (83 FR
14771). That rule proposed to amend
the Mango Promotion, Research, and
Information Order to include frozen
mangos.
The rule also announced the
Agricultural Marketing Service’s intent
to request approval from OMB of new
information collection requirements and
recordkeeping requirements for the
frozen mango industry. Information
collection and recordkeeping
requirements for the fresh mango
program (part 1206) have previously
been approved under OMB control nos.
0581–0093 and 0505–0001. Upon
approval of this action and associated
burden, AMS would submit a
Justification for Change to merge this
new burden for frozen mangos into the
currently approved collection for fresh
mangos.
USDA received a letter from industry
requesting that the comment period be
extended to allow additional time for
interested persons to review the
proposal and submit comments.
USDA is reopening and extending the
comment period an additional 30 days
to allow interested persons more time to
review the proposed rule, perform an
analysis, and submit written comments.
Authority: 7 U.S.C. 7411–7425; 7 U.S.C.
7401.
PO 00000
Frm 00001
Fmt 4702
Sfmt 4702
Dated: July 9, 2018.
Bruce Summers,
Administrator.
[FR Doc. 2018–14940 Filed 7–11–18; 8:45 am]
BILLING CODE 3410–02–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2018–0634; Product
Identifier 2018–NM–050–AD]
RIN 2120–AA64
Airworthiness Directives; Bombardier,
Inc., Airplanes
Federal Aviation
Administration (FAA), DOT.
ACTION: Notice of proposed rulemaking
(NPRM).
AGENCY:
We propose to adopt a new
airworthiness directive (AD) for certain
Bombardier, Inc., Model CL–600–2C10
(Regional Jet Series 700, 701 & 702)
airplanes, Model CL–600–2D15
(Regional Jet Series 705) airplanes,
Model CL–600–2D24 (Regional Jet
Series 900) airplanes, and Model CL–
600–2E25 (Regional Jet Series 1000)
airplanes. This proposed AD was
prompted by reports of a fractured main
landing gear (MLG) orifice support tube
(OST). This proposed AD would require
replacing the MLG OST, and revising
the maintenance or inspection program,
as applicable, to incorporate new or
more restrictive maintenance
requirements and airworthiness
limitations. We are proposing this AD to
address the unsafe condition on these
products.
DATES: We must receive comments on
this proposed AD by August 27, 2018.
ADDRESSES: You may send comments,
using the procedures found in 14 CFR
11.43 and 11.45, by any of the following
methods:
• Federal eRulemaking Portal: Go to
http://www.regulations.gov. Follow the
instructions for submitting comments.
• Fax: 202–493–2251.
• Mail: U.S. Department of
Transportation, Docket Operations, M–
30, West Building Ground Floor, Room
W12–140, 1200 New Jersey Avenue SE,
Washington, DC 20590.
• Hand Delivery: Deliver to Mail
address above between 9 a.m. and 5
SUMMARY:
E:\FR\FM\12JYP1.SGM
12JYP1
32216
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
p.m., Monday through Friday, except
Federal holidays.
For service information identified in
this NPRM, contact Bombardier, Inc.,
400 Coˆte-Vertu Road West, Dorval,
Que´bec H4S 1Y9, Canada; Widebody
Customer Response Center North
America toll-free telephone 866–538–
1247 or direct-dial telephone 514–855–
2999; fax 514–855–7401; email ac.yul@
aero.bombardier.com; internet http://
www.bombardier.com. You may view
this service information at the FAA,
Transport Standards Branch, 2200
South 216th St., Des Moines, WA. For
information on the availability of this
material at the FAA, call 206–231–3195.
Examining the AD Docket
You may examine the AD docket on
the internet at http://
www.regulations.gov by searching for
and locating Docket No. FAA–2018–
0634; or in person at Docket Operations
between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
The AD docket contains this NPRM, the
regulatory evaluation, any comments
received, and other information. The
street address for Docket Operations
(phone: 800–647–5527) is in the
ADDRESSES section. Comments will be
available in the AD docket shortly after
receipt.
FOR FURTHER INFORMATION CONTACT: Aziz
Ahmed, Aerospace Engineer, Airframe
and Mechanical Systems Section, FAA,
New York ACO Branch, 1600 Stewart
Avenue, Suite 410, Westbury, NY
11590; telephone 516–228–7329; fax
516–794–5531; email 9-avs-nyaco-cos@
faa.gov.
SUPPLEMENTARY INFORMATION:
Comments Invited
We invite you to send any written
relevant data, views, or arguments about
this proposal. Send your comments to
an address listed under the ADDRESSES
section. Include ‘‘Docket No. FAA–
2018–0634; Product Identifier 2018–
NM–050–AD’’ at the beginning of your
comments. We specifically invite
comments on the overall regulatory,
economic, environmental, and energy
aspects of this NPRM. We will consider
all comments received by the closing
date and may amend this NPRM
because of those comments.
We will post all comments we
receive, without change, to http://
www.regulations.gov, including any
personal information you provide. We
will also post a report summarizing each
substantive verbal contact we receive
about this NPRM.
Discussion
Transport Canada Civil Aviation
(TCCA), which is the aviation authority
for Canada, has issued Canadian AD
CF–2018–02, dated January 16, 2018
(referred to after this as the Mandatory
Continuing Airworthiness Information,
or ‘‘the MCAI’’), to correct an unsafe
condition for certain Bombardier, Inc.,
Model CL–600–2C10 (Regional Jet
Series 700, 701 & 702) airplanes, Model
CL–600–2D15 (Regional Jet Series 705)
airplanes, Model CL–600–2D24
(Regional Jet Series 900) airplanes, and
Model CL–600–2E25 (Regional Jet Series
1000) airplanes. The MCAI states:
Five cases of fractured Main Landing Gear
(MLG) Orifice Support Tube (OST) have been
reported. Subsequent analysis determined
that the MLG OST is unable to withstand the
loads generated during a hard landing event.
A MLG OST fracture cannot be detected
during routine maintenance and if not
corrected, a fractured MLG OST can lead to
aeroplane structural damage and/or collapse
of the MLG.
This [Canadian] AD mandates the
replacement of the existing MLG OSTs with
a re-designed part, and the implementation of
a new airworthiness limitation task.
You may examine the MCAI in the
AD docket on the internet at http://
www.regulations.gov by searching for
and locating Docket No. FAA–2018–
0634.
Related Service Information Under 1
CFR Part 51
Bombardier has issued Service
Bulletin SB 670BA–32–058, dated
September 26, 2016. The service
information describes procedures for
replacing each MLG OST.
Bombardier has also issued
Temporary Revision ALI–0593, dated
December 18, 2017. The service
information describes new life limits for
the MLG OSTs.
These service information are
reasonably available because the
interested parties have access to it
through their normal course of business
or by the means identified in the
ADDRESSES section.
FAA’s Determination
This product has been approved by
the aviation authority of another
country, and is approved for operation
in the United States. Pursuant to our
bilateral agreement with the State of
Design Authority, we have been notified
of the unsafe condition described in the
MCAI and service information
referenced above. We are proposing this
AD because we evaluated all the
relevant information and determined
the unsafe condition described
previously is likely to exist or develop
on other products of the same type
design.
This AD requires revisions to certain
operator maintenance documents to
include new actions (e.g., inspections).
Compliance with these actions is
required by 14 CFR 91.403(c). For
airplanes that have been previously
modified, altered, or repaired in the
areas addressed by this proposed AD,
the operator may not be able to
accomplish the actions described in the
revisions. In this situation, to comply
with 14 CFR 91.403(c), the operator
must request approval for an alternative
method of compliance according to
paragraph (i) of this proposed AD. The
request should include a description of
changes to the required actions that will
ensure the continued damage tolerance
of the affected structure.
Proposed AD Requirements
This proposed AD would require
replacing the MLG OST and revising the
maintenance or inspection program, as
applicable, to incorporate new or more
restrictive maintenance requirements
and airworthiness limitations.
Costs of Compliance
We estimate that this proposed AD
affects 542 airplanes of U.S. registry. We
estimate the following costs to comply
with this proposed AD:
amozie on DSK3GDR082PROD with PROPOSALS1
ESTIMATED COSTS
Action
Labor cost
Parts cost
Replacement (left- and right-hand sides) .......
24 work-hours × $85 per hour = $2,040 ........
* $0
Cost per
product
$2,040
Cost on U.S.
operators
$1,105,680
* We have received no definitive data that would enable us to provide cost estimates for the parts cost in this AD.
We have determined that revising the
maintenance or inspection program
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
takes an average of 90 work-hours per
operator, although we recognize that
PO 00000
Frm 00002
Fmt 4702
Sfmt 4702
this number may vary from operator to
operator. In the past, we have estimated
E:\FR\FM\12JYP1.SGM
12JYP1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
that this action takes 1 work-hour per
airplane. Since operators incorporate
maintenance or inspection program
changes for their affected fleet(s), we
have determined that a per-operator
estimate is more accurate than a perairplane estimate. Therefore, we
estimate the total cost per operator to be
$7,650 (90 work-hours × $85 per workhour).
Authority for This Rulemaking
amozie on DSK3GDR082PROD with PROPOSALS1
Title 49 of the United States Code
specifies the FAA’s authority to issue
rules on aviation safety. Subtitle I,
section 106, describes the authority of
the FAA Administrator. Subtitle VII:
Aviation Programs, describes in more
detail the scope of the Agency’s
authority.
We are issuing this rulemaking under
the authority described in Subtitle VII,
Part A, Subpart III, Section 44701:
‘‘General requirements.’’ Under that
section, Congress charges the FAA with
promoting safe flight of civil aircraft in
air commerce by prescribing regulations
for practices, methods, and procedures
the Administrator finds necessary for
safety in air commerce. This regulation
is within the scope of that authority
because it addresses an unsafe condition
that is likely to exist or develop on
products identified in this rulemaking
action.
This proposed AD is issued in
accordance with authority delegated by
the Executive Director, Aircraft
Certification Service, as authorized by
FAA Order 8000.51C. In accordance
with that order, issuance of ADs is
normally a function of the Compliance
and Airworthiness Division, but during
this transition period, the Executive
Director has delegated the authority to
issue ADs applicable to transport
category airplanes to the Director of the
System Oversight Division.
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
Regulatory Findings
We determined that this proposed AD
would not have federalism implications
under Executive Order 13132. This
proposed AD would not have a
substantial direct effect on the States, on
the relationship between the national
Government and the States, or on the
distribution of power and
responsibilities among the various
levels of government.
For the reasons discussed above, I
certify this proposed regulation:
1. Is not a ‘‘significant regulatory
action’’ under Executive Order 12866;
2. Is not a ‘‘significant rule’’ under the
DOT Regulatory Policies and Procedures
(44 FR 11034, February 26, 1979);
3. Will not affect intrastate aviation in
Alaska; and
4. Will not have a significant
economic impact, positive or negative,
on a substantial number of small entities
under the criteria of the Regulatory
Flexibility Act.
List of Subjects in 14 CFR Part 39
Air transportation, Aircraft, Aviation
safety, Incorporation by reference,
Safety.
The Proposed Amendment
Accordingly, under the authority
delegated to me by the Administrator,
the FAA proposes to amend 14 CFR part
39 as follows:
1. The authority citation for part 39
continues to read as follows:
■
Authority: 49 U.S.C. 106(g), 40113, 44701.
[Amended]
2. The FAA amends § 39.13 by adding
the following new airworthiness
directive (AD):
■
PO 00000
Frm 00003
Fmt 4702
Sfmt 4702
Bombardier, Inc.: Docket No. FAA–2018–
0634; Product Identifier 2018–NM–050–
AD.
(a) Comments Due Date
We must receive comments by August 27,
2018.
(b) Affected ADs
None.
(c) Applicability
This AD applies to the Bombardier, Inc.,
airplanes specified in paragraphs (c)(1),
(c)(2), and (c)(3) of this AD, certificated in
any category.
(1) Model CL–600–2C10 (Regional Jet
Series 700, 701 & 702) airplanes, serial
numbers 10003 through 10345 inclusive.
(2) Model CL–600–2D15 (Regional Jet
Series 705) airplanes and Model CL–600–
2D24 (Regional Jet Series 900) airplanes,
serial numbers 15001 through 15429
inclusive.
(3) Model CL–600–2E25 (Regional Jet
Series 1000) airplanes, serial numbers 19001
through 19052 inclusive.
(d) Subject
Air Transport Association (ATA) of
America Code 32, Main landing gear.
(e) Reason
This AD was prompted by reports of a
fractured main landing gear (MLG) orifice
support tube (OST). We are issuing this AD
to address a fractured MLG OST, which can
lead to structural damage to the airplane and
collapse of the MLG.
(f) Compliance
PART 39—AIRWORTHINESS
DIRECTIVES
§ 39.13
32217
Comply with this AD within the
compliance times specified, unless already
done.
(g) Replacement
Within the compliance times specified in
figure 1 to paragraph (g) of this AD: Replace
each MLG OST, in accordance with the
Accomplishment Instructions of Bombardier
Service Bulletin SB 670BA–32–058, dated
September 26, 2016.
E:\FR\FM\12JYP1.SGM
12JYP1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS1
(h) Maintenance or Inspection Program
Revision
Within 90 days after the effective date of
this AD, revise the maintenance or inspection
program, as applicable, to incorporate
Bombardier Temporary Revision ALI–0593,
dated December 18, 2017. The initial
compliance time for accomplishing the
actions is at the applicable time specified in
Bombardier Temporary Revision ALI–0593,
dated December 18, 2017; or within 90 days
after the effective date of this AD; whichever
occurs later.
(i) No Alternative Actions or Intervals
After the maintenance or inspection
program has been revised as required by
paragraph (h) of this AD, no alternative
actions (e.g., inspections) or intervals may be
used unless the actions or intervals are
approved as an alternative method of
compliance (AMOC) in accordance with the
procedures specified in paragraph (j)(1) of
this AD.
(j) Other FAA AD Provisions
The following provisions also apply to this
AD:
(1) Alternative Methods of Compliance
(AMOCs): The Manager, New York ACO
Branch, FAA, has the authority to approve
AMOCs for this AD, if requested using the
procedures found in 14 CFR 39.19. In
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
accordance with 14 CFR 39.19, send your
request to your principal inspector or local
Flight Standards District Office, as
appropriate. If sending information directly
to the manager of the certification office,
send it to ATTN: Program Manager,
Continuing Operational Safety, FAA, New
York ACO Branch, 1600 Stewart Avenue,
Suite 410, Westbury, NY 11590; telephone
516–228–7300; fax 516–794–5531. Before
using any approved AMOC, notify your
appropriate principal inspector, or lacking a
principal inspector, the manager of the local
flight standards district office/certificate
holding district office.
(2) Contacting the Manufacturer: For any
requirement in this AD to obtain corrective
actions from a manufacturer, the action must
be accomplished using a method approved
by the Manager, New York ACO Branch,
FAA; or Transport Canada Civil Aviation
(TCCA); or Bombardier, Inc.’s TCCA Design
Approval Organization (DAO). If approved by
the DAO, the approval must include the
DAO-authorized signature.
(k) Related Information
(1) Refer to Mandatory Continuing
Airworthiness Information (MCAI) Canadian
AD CF–2018–02, dated January 16, 2018, for
related information. This MCAI may be
found in the AD docket on the internet at
PO 00000
Frm 00004
Fmt 4702
Sfmt 4702
http://www.regulations.gov by searching for
and locating Docket No. FAA–2018–0634.
(2) For more information about this AD,
contact Aziz Ahmed, Aerospace Engineer,
Airframe and Mechanical Systems Section,
FAA, New York ACO Branch, 1600 Stewart
Avenue, Suite 410, Westbury, NY 11590;
telephone 516–228–7329; fax 516–794–5531;
email [email protected].
(3) For service information identified in
this AD, contact Bombardier, Inc., 400 CoˆteVertu Road West, Dorval, Que´bec H4S 1Y9,
Canada; Widebody Customer Response
Center North America toll-free telephone
866–538–1247 or direct-dial telephone 514–
855–2999; fax 514–855–7401; email ac.yul@
aero.bombardier.com; internet http://
www.bombardier.com. You may view this
service information at the FAA, Transport
Standards Branch, 2200 South 216th St., Des
Moines, WA. For information on the
availability of this material at the FAA, call
206–231–3195.
Issued in Des Moines, Washington, on July
3, 2018.
Michael Kaszycki,
Acting Director, System Oversight Division,
Aircraft Certification Service.
[FR Doc. 2018–14804 Filed 7–11–18; 8:45 am]
BILLING CODE 4910–13–P
E:\FR\FM\12JYP1.SGM
12JYP1
EP12JY18.018
32218
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2018–0281; Product
Identifier 2018–NE–06–AD]
RIN 2120–AA64
Airworthiness Directives; Hoffmann
Propeller GmbH & Co. KG Propellers
Federal Aviation
Administration (FAA), DOT.
ACTION: Notice of proposed rulemaking
(NPRM).
AGENCY:
We propose to adopt a new
airworthiness directive (AD) for certain
Hoffmann Propeller GmbH & Co. KG
model HO–V 62 propellers. This
proposed AD was prompted by the
failure of the propeller blade lag screws.
This proposed AD would require
removal of the affected propeller blades
and installation of modified propeller
blades marked with change letter ‘‘A’’ or
‘‘B.’’ We are proposing this AD to
address the unsafe condition on these
products.
SUMMARY:
We must receive comments on
this proposed AD by August 27, 2018.
ADDRESSES: You may send comments,
using the procedures found in 14 CFR
11.43 and 11.45, by any of the following
methods:
• Federal eRulemaking Portal: Go to
http://www.regulations.gov. Follow the
instructions for submitting comments.
• Fax: 202–493–2251.
• Mail: U.S. Department of
Transportation, Docket Operations, M–
30, West Building Ground Floor, Room
W12–140, 1200 New Jersey Avenue SE,
Washington, DC 20590.
• Hand Delivery: Deliver to Mail
address above between 9 a.m. and 5
p.m., Monday through Friday, except
Federal holidays.
For service information identified in
this NPRM, contact Hoffmann Propeller
GmbH & Co. KG, Sales and Service,
Ku¨pferlingstrasse 9, 83022 Rosenheim,
Germany; phone: +49 (0) 8031 1878 0;
fax: +49 (0) 8031 1878 78; email: info@
hoffmann-prop.com. You may view this
service information at the FAA, Engine
& Propeller Standards Branch, 1200
District Avenue, Burlington, MA. For
information on the availability of this
material at the FAA, call 781–238–7759.
amozie on DSK3GDR082PROD with PROPOSALS1
DATES:
Examining the AD Docket
You may examine the AD docket on
the internet at http://
www.regulations.gov by searching for
and locating Docket No. FAA–2018–
0281; or in person at Docket Operations
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
The AD docket contains this NPRM, the
mandatory continuing airworthiness
information (MCAI), the regulatory
evaluation, any comments received, and
other information. The address for
Docket Operations (phone: 800–647–
5527) is listed above. Comments will be
available in the AD docket shortly after
receipt.
FOR FURTHER INFORMATION CONTACT:
Maureen Maisttison, Aerospace
Engineer, AIR–7B1, FAA, 1200 District
Ave, Burlington, MA 01803; phone:
781–238–7076; fax: 781–238–7151;
email: [email protected].
SUPPLEMENTARY INFORMATION:
Comments Invited
We invite you to send any written
relevant data, views, or arguments about
this proposal. Send your comments to
an address listed under the ADDRESSES
section. Include ‘‘Docket No. FAA–
2018–0281; Product Identifier 2018–
NE–06–AD’’ at the beginning of your
comments. We specifically invite
comments on the overall regulatory,
economic, environmental, and energy
aspects of this NPRM. We will consider
all comments received by the closing
date and may amend this NPRM
because of those comments.
We will post all comments we
receive, without change, to http://
www.regulations.gov, including any
personal information you provide. We
will also post a report summarizing each
substantive verbal contact we receive
about this NPRM.
Discussion
The European Aviation Safety Agency
(EASA), which is the Technical Agent
for the Member States of the European
Community, has issued EASA AD 2017–
0220, dated November 10, 2017
(referred to hereinafter as ‘‘the MCAI’’),
to address the unsafe condition on these
products. The MCAI states:
In 1983, occurrences were reported of
fatigue failure of propeller blade lag screws,
at rotation speeds between 2950 and 3250
revolutions per minute (RPM) in flight.
This condition, if not detected and
corrected, could lead to in-flight propeller
blade detachment, possibly resulting in
damage to the powered sailplane and/or
injury to persons on the ground.
To address this potential unsafe condition,
Hoffmann issued Service Bulletin (SB) 4,
providing the necessary instructions.
Consequently, LBA Germany issued AD 83–
150 (later revised), which applied only to
HO–V 62 propellers with R/L 160T blades,
when in combination with a Limbach L 2000
engine, to require a limitation of continuous
operation to 2 900 RPM, to prohibit aerobatic
flights, calibrate the tachometer, install a
PO 00000
Frm 00005
Fmt 4702
Sfmt 4702
32219
placard, and inspection of the propeller
blades. LBA AD 83–150/4 also required
overhaul and replacement of the affected
propeller blades with modified blades, either
having 5 lag screws with 12 mm diameter, or
6 screws, and required implementing a time
between overhaul (TBO) of 600 flight hours
(FH).
Since that AD was issued, based on a stress
analysis of lag screws on blades with
continuous operating speed above 2 900
RPM, it was determined that the 6-screws
configuration or the 5 screws configuration
with increased strength is necessary to
ensure safe propeller operation. In addition,
since the LBA AD applied only to a limited
population (Limbach engine only), many
propellers have not been modified as
described in Hoffmann SB 4C. Consequently,
Hoffmann issued SB E34 Revision B, to
provide blade replacement instructions.
You may obtain further information
by examining the MCAI in the AD
docket on the internet at http://
www.regulations.gov by searching for
and locating Docket No. FAA–2018–
0281.
Related Service Information
We reviewed Hoffmann Propeller
GmbH & Co. KG Service Bulletin (SB)
E34, Rev. B, dated September 18, 2017.
The SB describes the instructions for the
removal and installation of the propeller
blades.
FAA’s Determination
This product has been approved by
EASA, and is approved for operation in
the United States. Pursuant to our
bilateral agreement with the European
Community, EASA has notified us of
the unsafe condition described in the
MCAI and service information
referenced above. We are proposing this
AD because we evaluated all the
relevant information provided by EASA
and determined the unsafe condition
previously described is likely to exist or
develop in other products of the same
type design.
Proposed AD Requirements
This proposed AD would require
removal of the affected propeller blades
and installation of the modified
propeller blades marked with change
letter ‘‘A’’ or ‘‘B’’ on the blade.
Differences Between This Proposed AD
and the MCAI or Service Information
EASA AD 2017–0220 partially
restates the requirements of AD 83–150,
issued on December 21, 1984, by
German aviation authority LuftfahrtBundesamt (LBA), which is based on
Propellerwerk Hoffmann Rosenheim SB
4, Revision C, dated February 20, 1984.
EASA AD 2017–0220 also adds new
requirements based on the issuance of
E:\FR\FM\12JYP1.SGM
12JYP1
32220
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
Hoffmann Propeller GmbH & Co. KG SB
E34, Rev. B dated September 18, 2017.
In restating LBA AD 83–150, EASA
AD 2017–0220 maintains a requirement
to remove certain propellers from
service within 10 flight hours after
December 21, 1984, but not later than 31
March 31, 1985. Service Bulletin E34
requires a mandatory immediate
maximum propeller rotational speed
limitation until the permanent
corrective action is completed, within
50 flight hours. The EASA AD 2017–
0220 partially restated requirements of
SB 4. Additionally, Hoffmann Propeller
GmbH & Co. KG SB E34 Revision B and
SB 4 Revision C temporarily prohibit
acrobatic flight. EASA AD 2017–0220
also adds a new requirement for a
mandatory maximum propeller
rotational speed limitation within 30
days until the propeller is replaced
within 50 flight hours.
This proposed AD does not require a
propeller speed limitation but would
require removal of the affected propeller
blades and installation of modified
propeller blades within 30 days of the
effective date of this AD.
Costs of Compliance
We estimate that this proposed AD
affects 50 propellers installed on
airplanes of U.S. registry.
We estimate the following costs to
comply with this proposed AD:
amozie on DSK3GDR082PROD with PROPOSALS1
ESTIMATED COSTS
Action
Labor cost
Replace Blades between overhaul .................
Replace Blades at overhaul ............................
3.0 work-hours × $85 per hour = $255.00 .....
0 work-hours × $85 per hour = $0.00 ............
Authority for This Rulemaking
Title 49 of the United States Code
specifies the FAA’s authority to issue
rules on aviation safety. Subtitle I,
section 106, describes the authority of
the FAA Administrator. ‘‘Subtitle VII:
Aviation Programs,’’ describes in more
detail the scope of the Agency’s
authority.
We are issuing this rulemaking under
the authority described in ‘‘Subtitle VII,
Part A, Subpart III, Section 44701:
General requirements.’’ Under that
section, Congress charges the FAA with
promoting safe flight of civil aircraft in
air commerce by prescribing regulations
for practices, methods, and procedures
the Administrator finds necessary for
safety in air commerce. This regulation
is within the scope of that authority
because it addresses an unsafe condition
that is likely to exist or develop on
products identified in this rulemaking
action.
This AD is issued in accordance with
authority delegated by the Executive
Director, Aircraft Certification Service,
as authorized by FAA Order 8000.51C.
In accordance with that order, issuance
of ADs is normally a function of the
Compliance and Airworthiness
Division, but during this transition
period, the Executive Director has
delegated the authority to issue ADs
applicable to engines, propellers, and
associated appliances to the Manager,
Engine and Propeller Standards Branch,
Policy and Innovation Division.
Regulatory Findings
We determined that this proposed AD
would not have federalism implications
under Executive Order 13132. This
proposed AD would not have a
substantial direct effect on the States, on
the relationship between the national
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
Parts cost
Government and the States, or on the
distribution of power and
responsibilities among the various
levels of government.
For the reasons discussed above, I
certify this proposed regulation:
(1) Is not a ‘‘significant regulatory
action’’ under Executive Order 12866,
(2) Is not a ‘‘significant rule’’ under
the DOT Regulatory Policies and
Procedures (44 FR 11034, February 26,
1979),
(3) Will not affect intrastate aviation
in Alaska, and
(4) Will not have a significant
economic impact, positive or negative,
on a substantial number of small entities
under the criteria of the Regulatory
Flexibility Act.
List of Subjects in 14 CFR Part 39
Air transportation, Aircraft, Aviation
safety, Incorporation by reference,
Safety.
The Proposed Amendment
Accordingly, under the authority
delegated to me by the Administrator,
the FAA proposes to amend 14 CFR part
39 as follows:
PART 39—AIRWORTHINESS
DIRECTIVES
1. The authority citation for part 39
continues to read as follows:
■
Authority: 49 U.S.C. 106(g), 40113, 44701.
§ 39.13
[Amended]
2. The FAA amends § 39.13 by adding
the following new airworthiness
directive (AD):
■
Hoffmann Propeller GmbH & Co. KG: Docket
No. FAA–2018–0281; Product Identifier
2018–NE–06–AD.
PO 00000
Frm 00006
Fmt 4702
Sfmt 4702
$3,150.00
3,150.00
Cost per
product
$3,405.00
3,150.00
Cost on U.S.
operators
$85,125.00
78,750.00
(a) Comments Due Date
We must receive comments by August 27,
2018.
(b) Affected ADs
None.
(c) Applicability
This AD applies to Hoffmann Propeller
GmbH & Co. KG model HO–V 62 propellers
without modified blades marked with change
letter ‘‘A’’ or ‘‘B’’ suffix to the S/N.
(d) Subject
Joint Aircraft System Component (JASC)
Code 6110, Propeller Assembly.
(e) Unsafe Condition
This AD was prompted by the failure of the
propeller blade lag screws. We are issuing the
AD to prevent failure of the propeller. The
unsafe condition, if not addressed, could
result in the release of the propeller blade,
damage to the aircraft, injury and/or loss of
life.
(f) Compliance
Comply with this AD within the
compliance times specified, unless already
done.
(g) Required Actions
Within 30 days of the effective date of this
AD, remove the applicable propeller blades
and install modified propeller blades marked
with a change letter ‘‘A’’ or ‘‘B’’ suffix to the
S/N marked on the blade.
(h) Installation Prohibition
After the effective date of this AD, do not
install a propeller blade if it is not marked
with a change letter ‘‘A’’ or ‘‘B’’ suffix to the
S/N marked on the blade.
(i) Alternative Methods of Compliance
(AMOCs)
(1) The Manager, Boston ACO Branch,
FAA, has the authority to approve AMOCs
for this AD, if requested using the procedures
found in 14 CFR 39.19. In accordance with
14 CFR 39.19, send your request to your
principal inspector or local Flight Standards
E:\FR\FM\12JYP1.SGM
12JYP1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
District Office, as appropriate. If sending
information directly to the manager of the
Boston ACO Branch, send it to the attention
of the person identified in paragraph (j)(1) of
this AD.
(2) Before using any approved AMOC,
notify your appropriate principal inspector,
or lacking a principal inspector, the manager
of the local flight standards district office/
certificate holding district office.
(j) Related Information
(1) For more information about this AD,
contact Maureen Maisttison, Aerospace
Engineer, AIR–7B1, FAA, 1200 District Ave,
Massachusetts, 01803; phone: 781–238–7076;
fax: 781–238–7151; email:
[email protected].
(2) Refer to European Aviation Safety
Agency AD 2017–0220, dated November 10,
2017, for more information. You may
examine the EASA AD in the AD docket on
the internet at http://www.regulations.gov by
searching for and locating it in Docket No.
FAA–2018–0281.
(3) For service information identified in
this proposed AD, contact Hoffmann
Propeller GmbH & Co. KG, Sales and Service,
Ku¨pferlingstrasse 9, 83022 Rosenheim,
Germany; phone: +49 (0) 8031 1878 0; fax:
+49 (0) 8031 1878 78; email: [email protected]. You may view this referenced
service information at the FAA, Engine &
Propeller Standards Branch, 1200 District
Avenue, Burlington, MA. For information on
the availability of this material at the FAA,
call 781–238–7759.
Issued in Burlington, Massachusetts, on
July 6, 2018.
Karen M. Grant,
Acting Manager, Engine and Propeller
Standards Branch, Aircraft Certification
Service.
[FR Doc. 2018–14862 Filed 7–11–18; 8:45 am]
BILLING CODE 4910–13–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA–2011–F–0171]
RIN 0910–AH83
Food Labeling: Calorie Labeling of
Articles of Food Sold From Certain
Vending Machines; Front of Package
Type Size
Food and Drug Administration,
amozie on DSK3GDR082PROD with PROPOSALS1
HHS.
ACTION:
Proposed rule.
The Food and Drug
Administration (FDA, the Agency, or
we) proposes to revise the type size
labeling requirements for front of
package (FOP) calorie declarations for
packaged food sold from glass front
vending machines. We are taking this
SUMMARY:
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
Submit either electronic or
written comments on the proposed rule
by September 25, 2018. Please note that
late, untimely filed comments will not
be considered.
ADDRESSES: You may submit comments
as follows:
DATES:
Electronic Submissions
Submit electronic comments in the
following way:
• Federal eRulemaking Portal:
https://www.regulations.gov. Follow the
instructions for submitting comments.
Comments submitted electronically,
including attachments, to https://
www.regulations.gov will be posted to
the docket unchanged. Because your
comment will be made public, you are
solely responsible for ensuring that your
comment does not include any
confidential information that you or a
third party may not wish to be posted,
such as medical information, your or
anyone else’s Social Security number, or
confidential business information, such
as a manufacturing process. Please note
that if you include your name, contact
information, or other information that
identifies you in the body of your
comments, that information will be
posted on https://www.regulations.gov.
• If you want to submit a comment
with confidential information that you
do not wish to be made available to the
public, submit the comment as a
written/paper submission and in the
manner detailed (see ‘‘Written/Paper
Submissions’’ and ‘‘Instructions’’).
Written/Paper Submissions
21 CFR Part 101
AGENCY:
action in response to requests from the
vending and packaged foods industries
to reduce the regulatory burden and
increase flexibility, while continuing to
provide calorie declarations for certain
articles of food sold from vending
machines.
Submit written/paper submissions as
follows:
• Mail/Hand delivery/Courier (for
written/paper submissions): Dockets
Management Staff (HFA–305), Food and
Drug Administration, 5630 Fishers
Lane, Rm. 1061, Rockville, MD 20852.
• For written/paper comments
submitted to the Dockets Management
Staff, FDA will post your comment, as
well as any attachments, except for
information submitted, marked and
identified, as confidential, if submitted
as detailed in ‘‘Instructions.’’
Instructions: All submissions received
must include the Docket No. FDA–
2011–F–0171 for ‘‘Food Labeling:
Calorie Labeling of Articles of Food
Sold From Certain Vending Machines;
Front of Package Type Size.’’ Received
PO 00000
Frm 00007
Fmt 4702
Sfmt 4702
32221
comments, those filed in a timely
manner (see DATES), will be placed in
the docket and, except for those
submitted as ‘‘Confidential
Submissions,’’ publicly viewable at
https://www.regulations.gov or at the
Dockets Management Staff between 9
a.m. and 4 p.m., Monday through
Friday.
• Confidential Submissions—To
submit a comment with confidential
information that you do not wish to be
made publicly available, submit your
comments only as a written/paper
submission. You should submit two
copies total. One copy will include the
information you claim to be confidential
with a heading or cover note that states
‘‘THIS DOCUMENT CONTAINS
CONFIDENTIAL INFORMATION.’’ We
will review this copy, including the
claimed confidential information, in our
consideration of comments. The second
copy, which will have the claimed
confidential information redacted/
blacked out, will be available for public
viewing and posted on https://
www.regulations.gov. Submit both
copies to the Dockets Management Staff.
If you do not wish your name and
contact information to be made publicly
available, you can provide this
information on the cover sheet and not
in the body of your comments and you
must identify this information as
‘‘confidential.’’ Any information marked
as ‘‘confidential’’ will not be disclosed
except in accordance with 21 CFR 10.20
and other applicable disclosure law. For
more information about FDA’s posting
of comments to public dockets, see 80
FR 56469, September 18, 2015, or access
the information at: http://www.gpo.gov/
fdsys/pkg/FR-2015-09-18/pdf/201523389.pdf.
Docket: For access to the docket to
read background documents or the
electronic and written/paper comments
received, go to https://
www.regulations.gov and insert the
docket number, found in brackets in the
heading of this document, into the
‘‘Search’’ box and follow the prompts
and/or go to the Dockets Management
Staff, 5630 Fishers Lane, Rm. 1061,
Rockville, MD 20852.
FOR FURTHER INFORMATION CONTACT:
Marjan Morravej, Center for Food Safety
and Applied Nutrition (HFS–820), Food
and Drug Administration, 5001 Campus
Dr., College Park, MD 20740, 240–402–
2371, [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Executive Summary
A. Purpose of This Proposed Rule
B. Summary of the Major Provisions of the
Proposed Rule
E:\FR\FM\12JYP1.SGM
12JYP1
32222
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
C. Legal Authority
D. Costs and Benefits
II. Background
A. Requirements for Calorie Labeling of
Articles of Food in Vending Machines
and Our Consideration of Front of
Package Labeling Issues
B. Challenges of Existing Type Size
Requirement, and Proposed Change to
‘‘150 Percent of the Size of the Net
Quantity of Contents Declaration’’
C. Other Approaches
III. Legal Authority
IV. Description of the Proposed Rule
(Proposed § 101.8(b)(2))
V. Proposed Effective and Compliance Dates
VI. Economic Analysis of Impacts
A. Introduction
B. Summary of Benefits and Costs of the
Proposed Rule
VII. Analysis of Environmental Impact
VIII. Paperwork Reduction Act of 1995
IX. Federalism
X. References
I. Executive Summary
amozie on DSK3GDR082PROD with PROPOSALS1
A. Purpose of This Proposed Rule
We are proposing to amend our
vending machine labeling regulations in
21 CFR part 101 by revising § 101.8(b)(2)
(21 CFR 101.8(b)(2)), in order to revise
the type size requirement when FOP
labeling is used to meet the calorie
declaration requirements for articles of
food sold from certain vending
machines. When using FOP labeling,
our existing regulations at § 101.8(b)(2)
require that the type size of the calorie
declaration for articles of food sold from
certain vending machines be at least 50
percent of the size of the largest printed
matter on the label. We propose,
instead, to require that the type size of
the calorie declaration on the front of
the package be at least 150 percent (one
and one-half times) the size of the net
quantity of contents (i.e., net weight)
declaration on the package of the
vended food. We are proposing this
change to reduce regulatory burdens
that the vending and packaged foods
industries shared with us after the final
rule implementing the vending machine
labeling requirements (79 FR 71259,
December 1, 2014) was issued, while
continuing to provide calorie
declarations for certain articles of food
sold from vending machines. Electronic
comments must be submitted on or
before September 25, 2018. The https://
www.regulations.gov electronic filing
system will accept comments until
midnight Eastern Time at the end of
September 25, 2018. Comments received
by mail/hand delivery/courier (for
written/paper submissions) will be
considered timely if they are
postmarked or the delivery service
acceptance receipt is on or before that
date.
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
B. Summary of the Major Provisions of
the Proposed Rule
This proposed rule would revise the
type size requirement for calories
labeled on the front of the package of
vended foods in § 101.8(b)(2). We are
proposing that the type size be anchored
to the net quantity of contents
statement, such that the minimum type
size is 150 percent (one and one-half
times) the size of the net quantity of
contents, instead of being based on the
largest printed matter on the label. The
proposed rule would only apply when
calories are displayed on the front of the
package of foods sold in glass front
vending machines.
C. Legal Authority
This action is consistent with our
authority in section 403(q)(5)(H) of the
Federal Food, Drug, and Cosmetic Act
(the FD&C Act) (21 U.S.C. 343(q)(5)(H)).
The FD&C Act, at section 403(q)(5)(H),
requires certain vending machine
operators to provide calorie declarations
for certain articles of food sold from
vending machines. In addition, we are
issuing this proposed rule consistent
with our authority in sections 201(n),
403(a)(1), and 403(f), of the FD&C Act
(21 U.S.C. 321(n), 343(a)(1), and 343(f)).
Further, we are issuing this proposed
rule under section 701(a) of the FD&C
Act (21 U.S.C. 371(a)), which gives us
the authority to issue regulations for the
efficient enforcement of the FD&C Act.
We discuss our legal authority in greater
detail in Section III, ‘‘Legal Authority.’’
D. Costs and Benefits
In response to requests from the
vending and packaged foods industries
to reduce the regulatory burden and
increase flexibility, FDA is proposing to
revise the existing type size
requirements when calories are
displayed on the front of the package of
foods sold in glass front vending
machines. Because this rule only
proposes minor revisions to FOP calorie
labeling type size requirements, we
estimate there are no costs to vending
machine operators and potential costs
savings to vending machine operators
and packaged food manufacturers. We
welcome data that would help us to
better estimate these impacts.
II. Background
A. Requirements for Calorie Labeling of
Articles of Food in Vending Machines
and Our Consideration of Front of
Package Labeling Issues
Section 403(q)(5)(H) of the FD&C Act
requires certain vending machine
operators to provide calorie declarations
for certain articles of food sold from
PO 00000
Frm 00008
Fmt 4702
Sfmt 4702
vending machines. Under section
403(q)(5)(H)(viii) of the FD&C Act, if an
article of food is sold from a vending
machine that does not permit a
prospective purchaser to examine the
Nutrition Facts label before purchasing
the article, or does not otherwise
provide visible nutrition information at
the point of purchase; and is operated
by a person who is engaged in the
business of owning or operating 20 or
more vending machines, the vending
machine operator must ‘‘provide a sign
in close proximity to each article of food
or the selection button that includes a
clear and conspicuous statement
disclosing the number of calories
contained in the article.’’
In the Federal Register of December 1,
2014 (79 FR 71259), we issued a final
rule to implement the vending machine
labeling requirements in section
403(q)(5)(H) of the FD&C Act. The final
rule, which became effective on
December 1, 2016, requires vending
machine operators that own or operate
20 or more vending machines (or that
voluntarily register with us to be subject
to the final rule) to provide calorie
declarations for certain articles of food
sold from vending machines. The final
rule describes which foods are subject to
the calorie declaration requirement. The
final rule also establishes type size,
color, and contrast requirements for
calorie declarations in, or on, the
vending machines and for calorie
declarations on signs adjacent to the
vending machines. The final rule also
clarifies that vending machine operators
do not have to provide calorie
information for a food if a prospective
purchaser can view certain calorie
information on the front of the package,
in the Nutrition Facts label on the food,
or in a reproduction of the Nutrition
Facts label for the food, subject to
certain requirements. The calorie
declaration requirements covered in the
final rule are codified at § 101.8.
In the Federal Register of August 1,
2016 (81 FR 50303), we issued a final
rule that extended the compliance date
for final calorie declaration
requirements for certain food products
sold from glass-front vending machines
to July 26, 2018. The extended
compliance date applies only to those
products in glass front vending
machines that provide FOP calorie
disclosures and that comply with all
aspects of the final vending machine
labeling rule except that the disclosure
is not 50 percent of the size of the
largest print on the label.
In the preamble of the proposed rule
(published in the Federal Register of
April 6, 2011 (76 FR 19237 at 19244)),
we stated that FOP labeling could be a
E:\FR\FM\12JYP1.SGM
12JYP1
amozie on DSK3GDR082PROD with PROPOSALS1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
way to provide ‘‘visible nutrition
information,’’ as long as the criteria for
color, font, and type size are met, and
total calories contained in the vended
food are included. We also tentatively
concluded that the visible nutrition
information must be in a type size
reasonably related to the most
prominent printed matter on the
labeling, among other things, such that
a purchaser is able to notice and read
the information. The preamble to the
proposed rule (76 FR 19237 at 19244)
explained that we considered
‘‘reasonably related’’ to mean a type size
at least 50 percent of the size of the
largest print on the label. This type size
as specified in the preamble to the
proposed rule is consistent with
interpretations we have used in food
labeling guidance when determining the
type size of the statement of identity on
packaged foods (Ref. 1).
In the preamble to the final rule (79
FR 71259 at 71269), we noted that many
comments supported the idea that FOP
labeling could provide visible nutrition
information; these comments said that
FOP labeling is the most efficient way
to satisfy section 403(q)(5)(H)(viii) of the
FD&C Act. Other comments stated that
vending machine operators are likely to
prefer food products with FOP labeling
because operators selling such food
products in their vending machines
would not have to provide calorie
declarations in compliance with section
403(q)(5)(H)(viii)(I)(bb) of the FD&C Act.
We also discussed several comments
that said that interpreting ‘‘reasonably
related’’ to mean a type size that is at
least 50 percent of the size of the largest
print on the label would require a type
size that is too large. One comment
suggested revising the rule to specify a
ratio for the size of the FOP calorie
disclosure relative to other printed
material on the label. The comment
stated that ‘‘reasonably related’’ would
be hard to enforce, and we should
require the FOP calorie disclosure to be
at least two-thirds the size of the largest
type size of any other writing on the
package, with a minimum size of onehalf square inch. Other comments stated
we should omit type size or prominence
requirements for the FOP calorie
disclosure.
In response to comments to the
proposed rule, we revised the rule by
removing the words ‘‘reasonably
related’’ at § 101.8(b)(2) and instead
required the calorie labeling print to be
‘‘at least 50 percent of the size of the
largest printed matter on the label.’’ We
also noted that vending machine
operators had other options for
satisfying section 403(q)(5)(H)(viii) of
the FD&C Act, including using a
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
vending machine that provides
electronic reproductions of Nutrition
Facts labels, as provided in
§ 101.8(b)(1), or posting signs with
calorie declarations, as provided in
§ 101.8(c).
B. Challenges of Existing Type Size
Requirement, and Proposed Change to
‘‘150 Percent of the Size of the Net
Quantity of Contents Declaration’’
Since the publication of the final rule,
several industry representatives
indicated that the 50 percent type size
requirement for FOP calorie labeling
presents significant technical challenges
to the packaged foods industry (Refs. 2
and 3). They said it would make the
calorie declaration very large on some
products and would make label redesign
difficult or not practical. They
explained that, for glass front vending
machines without electronic displays,
FOP labeling assures that consumers
will get accurate calorie information for
vended foods. The industry
representatives also said that many
packaged food manufacturers who wish
to help vending machine operators
comply with the regulations by
providing packaged foods with FOP
labeling will have to redesign their
labels at great expense. They noted the
existence of several voluntary FOP
labeling programs where calorie
information is presented in a FOP type
size that ranges from 100 to 150 percent
of the size of the net quantity of
contents statement on the principal
display panel. They acknowledged these
labeling programs do not meet our type
size requirements, and said that
complying with the type size
requirement for calorie labeling would
significantly disrupt their FOP nutrition
labeling programs because there would
no longer be enough room on the label
to accommodate both the voluntary FOP
information and our calorie labeling
requirement. Thus, they said that the
nutrition information beyond calorie
labeling that is presently provided
under industry FOP programs may no
longer be included. Additionally, they
said that, while the existing FOP
labeling may not be at least 50 percent
of the size of the largest printed matter
on the label, as required by our rule, the
calorie information is nonetheless
visible to consumers. Finally, they
stated that, in most cases, industry
would be able to comply with a rule that
linked the FOP type size for calorie
labeling if it were no larger than 150
percent of the type size of the net
quantity of contents statement. Other
industry representatives also have
expressed support for using the 150
PO 00000
Frm 00009
Fmt 4702
Sfmt 4702
32223
percent standard for purposes of the
FOP type size requirement (Refs. 4–7).
Consequently, the proposed rule
would remove the requirement
specifying the FOP labeling be at least
50 percent of the size of the largest
printed matter on the label and instead
link the type size to the size of the net
quantity of contents statement.
Specifically, the proposed rule would
revise § 101.8(b)(2) pertaining to
‘‘articles of food not covered’’ to state
that the visible nutrition information
must be in a type size at least 150
percent of the size of the net quantity of
contents declaration on the front of the
package.
This revision, if finalized, would
allow for greater flexibility for the use
of FOP calorie labeling in glass front
vending machines, while still ensuring
that a FOP calorie declaration would be
visible for the consumer, regardless of
the size of the package. It also would
minimize the need for label changes for
foods that currently have voluntary FOP
calorie declarations that are 150 percent
of the size of the net quantity of content
statement provided the calorie
declarations meet the other criteria in
the final rule. It is our understanding
that many packaged food products sold
in glass front vending machines that
currently bear FOP calorie labeling
would meet the 150 percent
requirement that we are proposing.
However, to more fully understand the
current marketplace, we specifically
invite comment and data on the
percentage of food products commonly
sold in glass front vending machines
bearing voluntary FOP calorie labeling,
and for those products that currently
bear voluntary FOP calorie labeling, the
type size of the FOP calorie labeling
used on the products.
C. Other Approaches
Data and information currently
available to FDA indicate that the
proposed rule is consistent with some
existing voluntary FOP calorie
declarations currently used on food
product labels and it is feasible for other
foods that may be sold in vending
machines. We also evaluated two other
approaches for providing visible
nutrition information that would meet
the criteria in section 403(q)(5)(H)(viii)
of the FD&C Act, such that the food
would not be subject to the vending
machine calorie labeling requirements.
We invite comment on these two
alternative approaches, described more
fully below.
E:\FR\FM\12JYP1.SGM
12JYP1
32224
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
2. Alternative Approach B—Not
Specifying Any Size
amozie on DSK3GDR082PROD with PROPOSALS1
1. Alternative Approach A—At Least
100 Percent of the Size of the Net
Quantity of Contents Declaration
The first alternative approach would
be to require the visible nutrition
information to be in a type size that is
at least 100 percent of the size of the net
quantity of contents declaration. Our
existing food labeling regulations for
packaged foods, at 21 CFR 101.7(i),
require that the declaration of net
quantity be in letters and numerals in a
type size that is established in relation
to the area of the principal display panel
of the package and that the declaration
be uniform for all packages of
substantially the same size. The
regulation prescribes the following size
specifications for net quantity
declarations:
• Not less than one-sixteenth inch in
height on packages the principal display
panel of which has an area of 5 square
inches or less;
• Not less than one-eighth inch in
height on packages the principal display
panel of which has an area of more than
5 but not more than 25 square inches;
• Not less than three-sixteenths inch
in height on packages the principal
display panel of which has an area of
more than 25 but not more than 100
square inches; and
• Not less than one-fourth inch in
height on packages the principal display
panel of which has an area of more than
100 square inches, except not less than
1⁄2 inch in height if the area is more than
400 square inches.
If the declaration is blown, embossed,
or molded on a glass or plastic surface
rather than by printing, typing, or
coloring, then the lettering sizes are to
be increased by one-sixteenth of an
inch.
We considered requiring the visible
nutrition information to be in a type size
that is at least 100 percent of the size of
the net quantity of contents declaration
on the front of the package; in other
words, the visible nutrition information
would, at a minimum, be the same size
as the net quantity of contents
declaration. We invite comment on the
impact of meeting the visible nutrition
information criteria, required under
section 403(q)(5)(H)(viii) of the FD&C
Act, especially on food in smaller
packages, such as small candy bars or
single serve bags of nuts, that are sold
in glass front vending machines under
this alternative approach where the FOP
calorie declaration is at least the same
size as the net quantity of contents
declaration.
FDA invites comment on the
advantages and disadvantages of this
alternative.
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
The second alternative approach
would be to not specify any size for the
visible nutrition information. This
option would give the packaged food
industry considerable flexibility in
deciding how large—or how small—
voluntary FOP calorie labeling could be,
and may reduce the need for packaging
changes for some manufacturers. We
note that in developing the final
vending machine labeling rule, we
considered, but disagreed with
comments asking that we omit
requirements for prominence or type
size of FOP calorie disclosures. As we
discussed in the preamble to that final
rule, ‘‘When a vending machine food is
in a vending machine, a prospective
purchaser cannot handle the product to
make it easier for the purchaser to read
the nutrition information. Therefore,
‘visible nutrition information’ on the
front of package must be large enough,
and prominent enough, for prospective
purchasers to see and use the
information’’ (79 FR 71259 at 71269).
We invite comment on the advantages
and disadvantages of this alternative.
III. Legal Authority
We are proposing to revise the
labeling requirements for providing
calorie declarations for food sold from
certain vending machines, as set forth in
this proposed rule, consistent with our
authority in section 403(q)(5)(H) of the
FD&C Act. Under section 403(q)(5)(H),
certain vending machine operators must
provide calorie declarations for certain
articles of food sold from vending
machines. Under section 403(a)(1) of the
FD&C Act, such information must be
truthful and non-misleading. Under
section 403(f) of the FD&C Act, any
word, statement, or other information
required by or under the FD&C Act to
appear on the label or labeling of an
article of food must be prominently
placed thereon with such
conspicuousness (as compared with
other words, statements, designs, or
devices, in the labeling) and in such
terms as to render it likely to be read
and understood by the ordinary
individual under customary conditions
of purchase and use. Under section
403(a), (f), or (q) of the FD&C Act, food
to which these requirements apply is
deemed misbranded if these
requirements are not met. In addition,
under section 201(n) of the FD&C Act,
the labeling of food is misleading if it
fails to reveal facts that are material in
light of representations made in the
labeling or with respect to consequences
that may result from use. Thus, we are
PO 00000
Frm 00010
Fmt 4702
Sfmt 4702
issuing this proposed rule under
sections 201(n), 403(a)(1), 403(f), and
403(q)(5)(H) of the FD&C Act, as well as
under section 701(a) of the FD&C Act,
which gives us the authority to issue
regulations for the efficient enforcement
of the FD&C Act.
IV. Description of the Proposed Rule
(Proposed § 101.8(b)(2))
The proposed rule would make a
change to the existing rule for calorie
labeling of food sold from vending
machines, in order to reduce the
regulatory burden and increase
flexibility while continuing to provide
calorie declarations for certain articles
of food sold from vending machines. We
propose to revise § 101.8(b)(2) to remove
the requirement that the type size of the
visible calorie declaration for articles of
food be at least 50 percent of the size of
the largest printed matter on the label
and, instead, to require the type size to
be at least 150 percent (one and one-half
times) the size of the net quantity of
contents (i.e., net weight) declaration on
the package of the vended food. We also
would make a minor editorial correction
to the same sentence in § 101.8(b)(2),
substituting the word ‘‘prospective’’ in
place of ‘‘perspective.’’
We also would revise the first
sentence of § 101.8(b)(2) by inserting a
comma after the word ‘‘minimum.’’ This
change corrects a punctuation error.
V. Proposed Effective and Compliance
Dates
We are proposing that any final rule
resulting from this rulemaking have an
effective date of 30 days after the date
of its publication in the Federal
Register. We also are proposing that
covered vending machine operators
comply with any final rule resulting
from this rulemaking by January 1,
2020. We are proposing this compliance
date in order to provide sufficient time
for the packaged food industry to revise
their labels, as appropriate, consistent
with any new requirements.
As discussed in section II.A., by July
26, 2018, vending machine operators
with glass front vending machines will
have to comply with all vending
machine requirements of the final rule
issued in 2014. However, it is unlikely
that we will be able to complete the
current rulemaking to revise the type
size labeling requirements for FOP
calorie declarations before the July 26,
2018 compliance date. Therefore,
pending completion of this rulemaking,
FDA intends to exercise enforcement
discretion with respect to the July 26,
2018 compliance date for products sold
in glass front vending machines that
provide a FOP calorie disclosure and
E:\FR\FM\12JYP1.SGM
12JYP1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
the product complies with all aspects of
the final vending machine labeling rule
except that the disclosure is not 50
percent of the size of the largest print on
the label.
Further, as previously noted, vending
machine operators with glass front
vending machines will have to comply
by July 26, 2018, with all vending
machine requirements, including
complying with calorie disclosure
requirements in 21 CFR 101.8(c)(2).
Although these requirements cover
gums, mints, and roll candy products
sold in glass front machines, FDA
intends to exercise enforcement
discretion, at least until January 1, 2020,
with respect to gums, mints, and roll
candy products sold in glass front
machines in packages that are too small
to bear FOP labeling. FDA intends to
consider this issue further.
amozie on DSK3GDR082PROD with PROPOSALS1
VI. Economic Analysis of Impacts
A. Introduction
We have examined the impacts of the
proposed rule under Executive Order
12866, Executive Order 13563,
Executive Order 13771, the Regulatory
Flexibility Act (5 U.S.C. 601–612), and
the Unfunded Mandates Reform Act of
1995 (Pub. L. 104–4). Executive Orders
12866 and 13563 direct us to assess all
costs and benefits of available regulatory
alternatives and, when regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety,
and other advantages; distributive
impacts; and equity). Executive Order
13771 requires that the costs associated
with significant new regulations ‘‘shall,
to the extent permitted by law, be offset
by the elimination of existing costs
associated with at least two prior
regulations.’’ This proposed rule has
been designated as a significant
regulatory action as defined by
Executive Order 12866. This proposed
rule is expected to be an Executive
Order 13771 deregulatory action.
Additional details can be found in the
proposed rule’s preliminary economic
analysis.
The Regulatory Flexibility Act
requires Agencies to analyze regulatory
options that would minimize any
significant impact of a rule on small
entities. The vending machine final rule
does not impose burdens to the
suppliers of vending machine foods.
While suppliers are not obliged to
engage in FOP calorie labeling, this
proposed rule, if finalized, would allow
for greater flexibility for the use of FOP
calorie labeling in glass front vending
machines than the existing regulations,
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
potentially reducing the burden on
covered vending machine operators of
providing additional calorie labeling.
Thus, we propose to certify that the
proposed rule will not have a significant
economic impact on a substantial
number of small entities.
The Unfunded Mandates Reform Act
of 1995 (section 202(a) requires us to
prepare a written statement, which
includes an assessment of anticipated
costs and benefits, before proposing
‘‘any rule that includes any Federal
mandate that may result in the
expenditure by State, local, and tribal
governments, in the aggregate, or by the
private sector, of $100,000,000 or more
(adjusted annually for inflation) in any
one year.’’ The current threshold after
adjustment for inflation is $150 million,
using the most current (2017) Implicit
Price Deflator for the Gross Domestic
Product. This proposed rule would not
result in an expenditure in any year that
meets or exceeds this amount.
B. Summary of Benefits and Costs of the
Proposed Rule
FDA proposes to revise the type size
labeling requirements for providing FOP
calorie declarations for packaged food
sold from certain vending machines. We
are taking this action in response to
requests from the vending and packaged
foods industries to reduce the regulatory
burden and increase flexibility. The
proposed rule would revise the type size
requirements for FOP calorie labeling on
packaged foods displayed for sale in
glass front vending machines.
There are currently several voluntary
FOP labeling programs where calorie
information is presented. If finalized,
this proposal may provide an increased
incentive for packaged food
manufacturers to add new or amend
current FOP calorie labeling to foods in
order to comply with the updated
standard. If so, glass front vending
machine operators carrying exclusively
those products will not have to provide
signs with calorie information for the
food, providing an opportunity to
reduce operator costs. To the extent this
occurs, some costs may shift from the
vending machine operator to the
manufacturer. Packaged food
manufacturing firms may choose to
incur additional costs associated with
amending the FOP label in order to
retain revenue streams from current
customers, including vending machine
operators. If total revenue is greater than
total cost, this proposed rule will
provide cost savings for packaged food
manufacturing firms. We expect the
potential cost savings to both vending
machine operators and packaged food
manufacturers to outweigh the costs to
PO 00000
Frm 00011
Fmt 4702
Sfmt 4702
32225
packaged food manufacturers and thus
the net effect to be positive, but lack the
data to quantify this effect. We welcome
data that would help us to better
estimate these impacts.
We have developed a comprehensive
Economic Analysis of Impacts that
assesses the impacts of the proposed
rule. The full analysis of economic
impacts is available in the docket for
this proposed rule (Ref. 8) and at
https://www.fda.gov/AboutFDA/
ReportsManualsForms/Reports/
EconomicAnalyses/default.htm.
VII. Analysis of Environmental Impact
We have determined under 21 CFR
25.30(k) that this action is of a type that
does not individually or cumulatively
have a significant effect on the human
environment. Therefore, neither an
environmental assessment nor an
environmental impact statement is
required.
VIII. Paperwork Reduction Act of 1995
FDA tentatively concludes that this
proposed rule contains no new
collection of information beyond what
was described in the December 2014
final rule and approved under OMB
control number 0910–0782. Therefore,
clearance by the Office of Management
and Budget under the Paperwork
Reduction Act of 1995 is not required.
IX. Federalism
We have analyzed this proposed rule
in accordance with the principles set
forth in Executive Order 13132. Section
4(a) of the Executive Order requires
Agencies to construe a Federal statute to
preempt State law only where the
statute contains an express preemption
provision or there is some other clear
evidence that the Congress intended
preemption of State law, or where the
exercise of State authority conflicts with
the exercise of Federal authority under
the Federal statute. Federal law includes
an express preemption provision that
preempts any nutrition labeling
requirement of food that is not identical
to the requirement of section 403(q) of
the FD&C Act, except that this provision
does not apply to food that is offered for
sale in a restaurant or similar retail food
establishment that is not part of a chain
with 20 or more locations doing
business under the same name and
offering for sale substantially the same
menu items unless such restaurant or
similar retail food establishment elects
to comply voluntarily with the nutrition
information requirements under section
403(q)(5)(H)(ix) of the FD&C Act. The
proposed rule would create
requirements for nutrition labeling of
food under section 403(q) of the FD&C
E:\FR\FM\12JYP1.SGM
12JYP1
amozie on DSK3GDR082PROD with PROPOSALS1
32226
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
Act that would preempt certain nonidentical State and local nutrition
labeling requirements.
Section 4205 of the Patient Protection
and Affordable Care Act (ACA), which
amended the FD&C Act to require
certain vending machine operators to
provide calorie declarations for certain
articles of food sold from vending
machines, also included a Rule of
Construction providing that nothing in
the amendments made by section 4205
of the ACA shall be construed: (1) To
preempt any provision of State or local
law, unless such provision establishes
or continues into effect nutrient content
disclosures of the type required under
section 403(q)(5)(H) of the FD&C Act
and is expressly preempted under
subsection (a)(4) of such section; (2) to
apply to any State or local requirement
respecting a statement in the labeling of
food that provides for a warning
concerning the safety of the food or
component of the food; or (3) except as
provided in section 403(q)(5)(H)(ix) of
the FD&C Act, to apply to any restaurant
or similar retail food establishment
other than a restaurant or similar retail
food establishment described in section
403(q)(5)(H)(i) of the FD&C Act (see Pub.
L. 111–148, section 4205(d) of the ACA,
124 Stat. 119, 576 (2010)).
We interpret the provisions of section
4205 of the ACA related to preemption
to mean that States and local
governments may not impose nutrition
labeling requirements for food sold from
vending machines that must comply
with the Federal requirements of section
403(q)(5)(H) of the FD&C Act, unless the
State or local requirements are identical
to the Federal requirements. In other
words, States and localities cannot have
additional or different nutrition labeling
requirements for food sold either: (1)
From vending machines that are
operated by a person engaged in the
business of owning or operating 20 or
more vending machines subject to the
requirements of section
403(q)(5)(H)(viii) of the FD&C Act; or (2)
from vending machines operated by a
person not subject to the requirements
of section 403(q)(5)(H)(viii) of the FD&C
Act who voluntarily elects to be subject
to those requirements by registering
biannually under section
403(q)(5)(H)(ix) of the FD&C Act.
Otherwise, for food sold from vending
machines not subject to the nutrition
labeling requirements of section
403(q)(5)(H)(viii) of the FD&C Act,
States and localities may impose
nutrition labeling requirements. Under
our interpretation of section 4205(d)(1)
of the ACA, nutrition labeling for food
sold from these vending machines
would not be nutrient content
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
disclosures of the type required under
section 403(q)(5)(H)(viii) of the FD&C
Act and, therefore, would not be
preempted. Under this interpretation,
States and localities would be able to
continue to require nutrition labeling for
food sold from vending machines that
are exempt from nutrition labeling
under section 403(q)(5) of the FD&C Act.
This interpretation is consistent with
the fact that Congress included vending
machine operators in the voluntary
registration provision of section
403(q)(5)(H)(ix) of the FD&C Act. There
would have been no need to include
vending machine operators in the
provision that allows opting into the
Federal requirements if States and
localities could not otherwise require
non-identical nutrition labeling for food
sold from any vending machines.
In addition, the express preemption
provisions of 21 U.S.C. 343–1(a)(4) do
not preempt any State or local
requirement respecting a statement in
the labeling of food that provides for a
warning concerning the safety of the
food or component of the food. This is
clear from both the literal language of 21
U.S.C. 343–1(a)(4) with respect to the
scope of preemption and from the Rule
of Construction at section 4205(d)(2) of
the ACA.
Food Safety and Applied Nutrition,
dated June 28, 2016.
4. Letter from Karin F. R. Moore, Senior Vice
President and General Counsel, Grocery
Manufacturers Association, and cosigned
by the American Beverage Association,
National Automated Merchandising
Association, National Confectioners
Association, and SNAC International, to
Scott Gottlieb, M.D., Commissioner of
Food and Drugs, FDA, dated July 19,
2017.
5. Letter from Jason Eberstein, Director, State
& Federal Government Affairs, National
Automatic Merchandising Association,
to Scott Gottlieb, M.D., Commissioner of
Food and Drugs, FDA, dated November
21, 2017.
6. Letter from Brad G. Figel, Vice President,
North America Public Affairs, Mars, Inc.,
to Mick Mulvaney, Director, Office of
Management and Budget, dated January
30, 2018.
7. Letter from Elizabeth Avery, President and
CEO, SNAC International, to Dockets
Management Staff, FDA, dated February
12, 2018.
8. FDA, ‘‘Food Labeling: Calorie Labeling of
Articles of Food Sold From Certain
Vending Machines; Front of Package
Type Size, Preliminary Regulatory
Impact Analysis, Initial Regulatory
Flexibility Analysis, Preliminary Small
Entity Analysis,’’ dated June 2018. Also
available at: https://www.fda.gov/
AboutFDA/ReportsManualsForms/
Reports/EconomicAnalyses/default.htm.
X. References
List of Subjects in 21 CFR Part 101
The following references are on
display in the Dockets Management
Staff (see ADDRESSES) and are available
for viewing by interested persons
between 9 a.m. and 4 p.m., Monday
through Friday; they are also available
electronically at https://
www.regulations.gov. FDA has verified
the website addresses, as of the date this
document publishes in the Federal
Register, but websites are subject to
change over time.
Food labeling, Nutrition, Reporting
and recordkeeping requirements.
Therefore, under the Federal Food,
Drug, and Cosmetic Act and under
authority delegated to the Commissioner
of Food and Drugs, we propose that 21
CFR part 101 be amended as follows:
1. FDA, ‘‘Guidance for Industry: A Food
Labeling Guide (4. Name of Food)’’, last
updated January 2013. Retrieved from
https://www.fda.gov/downloads/Food/
GuidanceRegulation/UCM265446.pdf.
2. Letter from Karin F. R. Moore, Vice
President and General Counsel, Grocery
Manufacturers Association, and cosigned
by the American Beverage Association,
National Automated Merchandising
Association, National Confectioners
Association, and SNAC International, to
Susan Mayne, Ph.D., Director, Center for
Food Safety and Applied Nutrition,
dated March 31, 2016.
3. Letter from Karin F. R. Moore, Senior Vice
President and General Counsel, Grocery
Manufacturers Association, and cosigned
by the American Beverage Association,
National Automated Merchandising
Association, National Confectioners
Association, and SNAC International, to
Susan Mayne, Ph.D., Director, Center for
Authority: 15 U.S.C. 1453, 1454, 1455; 21
U.S.C. 321, 331, 342, 343, 348, 371; 42 U.S.C.
243, 264, 271.
PO 00000
Frm 00012
Fmt 4702
Sfmt 4702
PART 101—FOOD LABELING
1. The authority citation for part 101
continues to read as follows:
■
2. Section 101.8 is amended by
revising paragraph (b)(2) to read as
follows:
■
§ 101.8
Vending machines.
*
*
*
*
*
(b) * * *
(2) The prospective purchaser can
otherwise view visible nutrition
information, including, at a minimum,
the total number of calories for the
article of food as sold at the point of
purchase. This visible nutrition
information must appear on the food
label itself. The visible nutrition
information must be clear and
conspicuous and able to be easily read
on the article of food while in the
E:\FR\FM\12JYP1.SGM
12JYP1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
vending machine, in a type size at least
150 percent of the size of the net
quantity of contents declaration on the
front of the package, and with sufficient
color and contrasting background to
other print on the label to permit the
prospective purchaser to clearly
distinguish the information.
*
*
*
*
*
Dated: July 6, 2018.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2018–14906 Filed 7–11–18; 8:45 am]
BILLING CODE 4164–01–P
DEPARTMENT OF DEFENSE
Department of the Army, Corps of
Engineers
33 CFR Part 328
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Parts 110, 112, 116, 117, 122,
230, 232, 300, 302, and 401
[EPA–HQ–OW–2017–0203; FRL–9980–52–
OW]
RIN 2040–AF74
Definition of ‘‘Waters of the United
States’’—Recodification of Preexisting
Rule
Department of Defense,
Department of the Army, Corps of
Engineers; Environmental Protection
Agency (EPA).
ACTION: Supplemental notice of
proposed rulemaking.
AGENCY:
The purpose of this
supplemental notice is for the
Environmental Protection Agency (EPA)
and the Department of the Army
(agencies) to clarify, supplement and
seek additional comment on an earlier
proposal, published on July 27, 2017, to
repeal the 2015 Rule Defining Waters of
the United States (‘‘2015 Rule’’), which
amended portions of the Code of
Federal Regulations (CFR). As stated in
the agencies’ July 27, 2017 Notice of
Proposed Rulemaking (NPRM), the
agencies propose to repeal the 2015
Rule and restore the regulatory text that
existed prior to the 2015 Rule, as
informed by guidance in effect at that
time. If this proposal is finalized, the
regulations defining the scope of federal
Clean Water Act (CWA) jurisdiction
would be those portions of the CFR as
they existed before the amendments
promulgated in the 2015 Rule. Those
preexisting regulatory definitions are
amozie on DSK3GDR082PROD with PROPOSALS1
SUMMARY:
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
the ones that the agencies are currently
implementing in light of the agencies’
final rule published on February 6,
2018, adding a February 6, 2020
applicability date to the 2015 Rule, as
well as judicial decisions preliminarily
enjoining and staying the 2015 Rule.
DATES: Comments must be received on
or before August 13, 2018.
ADDRESSES: Submit your comments,
identified by Docket ID No. EPA–HQ–
OW–2017–0203, at http://
www.regulations.gov. Follow the online
instructions for submitting comments.
Once submitted, comments cannot be
edited or removed from Regulations.gov.
The agencies may publish any comment
received to the public docket. Do not
submit electronically any information
you consider to be Confidential
Business Information (CBI) or other
information whose disclosure is
restricted by statute. Multimedia
submissions (audio, video, etc.) must be
accompanied by a written comment.
The written comment is considered the
official comment and should include
discussion of all points you wish to
make. The agencies will generally not
consider comments or comment content
located outside of the primary
submission (i.e., on the web, cloud, or
other file sharing system). For
additional submission methods, the full
EPA public comment policy,
information about CBI or multimedia
submissions, and general guidance on
making effective comments, please visit
http://www2.epa.gov/
dockets.commenting-epa-dockets.
FOR FURTHER INFORMATION CONTACT:
Michael McDavit, Office of Water
(4504–T), Environmental Protection
Agency, 1200 Pennsylvania Avenue
NW, Washington, DC 20460; telephone
number: (202) 566–2428; email address:
[email protected]; or Stacey Jensen,
Regulatory Community of Practice
(CECW–CO–R), U.S. Army Corps of
Engineers, 441 G Street NW,
Washington, DC 201314; telephone
number: (202) 761–6903; email address:
[email protected].
SUPPLEMENTARY INFORMATION: The
agencies propose to repeal the Clean
Water Rule: Definition of ‘‘Waters of the
United States,’’ 80 FR 37054, and
recodify the regulatory definitions of
‘‘waters of the United States’’ that
existed prior to the August 28, 2015
effective date of the 2015 Rule. Those
preexisting regulatory definitions are
the ones that the agencies are currently
implementing in light of the agencies’
final rule (83 FR 5200, February 6,
2018), which added a February 6, 2020
applicability date to the 2015 Rule.
Judicial decisions currently enjoin the
PO 00000
Frm 00013
Fmt 4702
Sfmt 4702
32227
2015 Rule in 24 States as well. If this
proposal is finalized, the agencies
would administer the regulations
promulgated in 1986 and 1988 in
portions of 33 CFR part 328 and 40 CFR
parts 110, 112, 116, 117, 122, 230, 232,
300, 302, and 401, and would continue
to interpret the statutory term ‘‘waters of
the United States’’ to mean the waters
covered by those regulations, as the
agencies are currently implementing
those regulations consistent with
Supreme Court decisions and
longstanding practice, as informed by
applicable guidance documents,
training, and experience.
State, tribal, and local governments
have well-defined and established
relationships with the federal
government in implementing CWA
programs. Those relationships are not
affected by this proposed rule, which
would not alter the jurisdiction of the
CWA compared to the regulations and
practice that the agencies are currently
applying. The proposed rule would
permanently repeal the 2015 Rule,
which amended the longstanding
definition of ‘‘waters of the United
States’’ in portions of 33 CFR part 328
and 40 CFR parts 110, 112, 116, 117,
122, 230, 232, 300, 302, and 401, and
restore the regulations as they existed
prior to the amendments in the 2015
Rule.1
The agencies are issuing this
supplemental notice of proposed
rulemaking (SNPRM) to clarify,
supplement and give interested parties
an opportunity to comment on certain
important considerations and reasons
for the agencies’ proposal. The agencies
clarify herein the scope of the
solicitation of comment and the actions
proposed. In response to the July 27,
2017 NPRM, (82 FR 34899), the agencies
received numerous comments on the
impacts of repealing the 2015 Rule in its
entirety. Others commented in favor of
retaining the 2015 Rule, either as
written or with modifications. Some
commenters interpreted the proposal as
restricting their opportunity to provide
such comments either supporting or
opposing repeal of the 2015 Rule. In this
SNPRM, the agencies reiterate that this
regulatory action is intended to
permanently repeal the 2015 Rule in its
entirety, and we invite all interested
persons to comment on whether the
2015 Rule should be repealed.
1 While EPA administers most provisions in the
CWA, the Department of the Army, Corps of
Engineers (Corps) administers the permitting
program under section 404. During the 1980s, both
agencies adopted substantially similar definitions of
‘‘waters of the United States.’’ See 51 FR 41206,
Nov. 13, 1986, amending 33 CFR 328.3; 53 FR
20764, June 6, 1988, amending 40 CFR 232.2.
E:\FR\FM\12JYP1.SGM
12JYP1
amozie on DSK3GDR082PROD with PROPOSALS1
32228
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
The agencies are also issuing this
SNPRM to clarify that the rule adding
an applicability date to the 2015 Rule
does not change the agencies’ decision
to proceed with this proposed repeal.
For the reasons discussed in this notice,
the agencies propose to conclude that
regulatory certainty would be best
served by repealing the 2015 Rule and
recodifying the scope of CWA
jurisdiction currently in effect. The
agencies propose to conclude that rather
than achieving its stated objectives of
increasing predictability and
consistency under the CWA, see 80 FR
37055, the 2015 Rule is creating
significant confusion and uncertainty
for agency staff, regulated entities,
states, tribes, local governments, and the
public, particularly in view of court
decisions that have cast doubt on the
legal viability of the rule. To provide for
greater regulatory certainty, the agencies
propose to repeal the 2015 Rule and to
recodify the pre-2015 regulations,
thereby maintaining a longstanding
regulatory framework that is more
familiar to and better-understood by the
agencies, states, tribes, local
governments, regulated entities, and the
public.
Further, court rulings against the 2015
Rule suggest that the interpretation of
the ‘‘significant nexus’’ standard as
applied in the 2015 Rule may not
comport with and accurately implement
the legal limits on CWA jurisdiction
intended by Congress and reflected in
decisions of the Supreme Court. At a
minimum, the agencies find that the
interpretation of the statute adopted in
the 2015 Rule is not compelled and
raises significant legal questions. In
light of the substantial uncertainty
associated with the 2015 Rule,
including by virtue of a potential stay,
injunction, or vacatur of the 2015 Rule
in various legal challenges, as well as
the substantial experience the agencies
already possess implementing the
preexisting regulations that the agencies
are implementing today, the agencies
propose to conclude that administrative
goals of regulatory certainty would be
best served by repealing the 2015 Rule.
The agencies also propose to conclude
that the 2015 Rule exceeded the
agencies’ authority under the CWA by
adopting such an interpretation of
Justice Kennedy’s ‘‘significant nexus’’
standard articulated in Rapanos v.
United States and Carabell v. United
States, 547 U.S. 715 (2006) (‘‘Rapanos’’)
as to be inconsistent with important
aspects of that opinion and to cover
waters outside the scope of the Act,
even though that concurring opinion
was identified as the basis for the
significant nexus standard articulated in
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
the 2015 Rule. The agencies also
propose to conclude that, contrary to
conclusions articulated in support of the
rule, the 2015 Rule appears to have
expanded the meaning of tributaries and
adjacent wetlands to include waters
well beyond those regulated by the
agencies under the preexisting
regulations, as applied by the agencies
following decisions of the Supreme
Court in Rapanos and Solid Waste
Agency of Northern Cook County v. U.S.
Army Corps of Engineers, 531 U.S. 159
(2001) (‘‘SWANCC’’). The agencies
believe that the 2015 Rule may have
altered the balance of authorities
between the federal and State
governments, contrary to the agencies’
statements in promulgating the 2015
Rule and in contravention of CWA
section 101(b), 33 U.S.C. 1251(b).
I. Background
The agencies refer the public to the
Executive Summary for the NPRM, 82
FR 34899 (July 27, 2017), and
incorporate it by reference herein.
A. The 2015 Rule
On June 29, 2015, the agencies issued
a final rule (80 FR 37054) amending
various portions of the CFR that set
forth definitions of ‘‘waters of the
United States,’’ a term contained in the
CWA section 502(7) definition of
‘‘navigable waters,’’ 33 U.S.C. 1362(7).
A primary purpose of the 2015 Rule
was to ‘‘increase CWA program
predictability and consistency by
clarifying the scope of ‘waters of the
United States’ protected under the Act.’’
80 FR 37054. The 2015 Rule attempted
to clarify the geographic scope of the
CWA by placing waters into three
categories: (A) Waters that are
categorically ‘‘jurisdictional by rule’’ in
all instances (i.e., without the need for
any additional analysis); (B) waters that
are subject to case-specific analysis to
determine whether they are
jurisdictional, and (C) waters that are
categorically excluded from jurisdiction.
Waters that are ‘‘jurisdictional by rule’’
include (1) waters which are currently
used, were used in the past, or may be
susceptible to use in interstate or foreign
commerce, including all waters which
are subject to the ebb and flow of the
tide; (2) interstate waters, including
interstate wetlands; (3) the territorial
seas; (4) impoundments of waters
otherwise identified as jurisdictional;
(5) tributaries of the first three categories
of ‘‘jurisdictional by rule’’ waters; and
(6) waters adjacent to a water identified
in the first five categories of
‘‘jurisdictional by rule’’ waters,
including wetlands, ponds, lakes,
PO 00000
Frm 00014
Fmt 4702
Sfmt 4702
oxbows, impoundments, and similar
waters. See id. at 37104.
The 2015 Rule added new definitions
of key terms such as ‘‘tributaries’’ and
revised previous definitions of terms
such as ‘‘adjacent’’ (by adding a new
definition of ‘‘neighboring’’ that is used
in the definition of ‘‘adjacent’’) that
would determine whether waters are
‘‘jurisdictional by rule.’’ See id. at
37105. Specifically, a tributary under
the 2015 Rule is a water that contributes
flow, either directly or through another
water, to a water identified in the first
three categories of ‘‘jurisdictional by
rule’’ waters and that is characterized by
the presence of the ‘‘physical
indicators’’ of a bed and banks and an
ordinary high water mark. ‘‘These
physical indicators demonstrate there is
volume, frequency, and duration of flow
sufficient to create a bed and banks and
therefore an ordinary high water mark,
and thus to qualify as a tributary.’’ Id.
The 2015 Rule does not delineate
jurisdiction specifically based on
categories with established scientific
meanings such as ephemeral,
intermittent, and perennial waters that
are based on the source of the water and
nature of the flow. See id. at 37076
(‘‘Under the rule, flow in the tributary
may be perennial, intermittent, or
ephemeral.’’). Under the 2015 Rule,
tributaries need not be demonstrated to
possess any specific volume, frequency,
or duration of flow, or to contribute flow
to a traditional navigable water in any
given year or specific time period.
Tributaries under the 2015 Rule can be
natural, man-altered, or man-made, and
they do not lose their status as a
tributary if, for any length, there are one
or more constructed breaks (such as
bridges, culverts, pipes, or dams), or one
or more natural breaks (such as
wetlands along the run of a stream,
debris piles, boulder fields, or a stream
that flows underground) so long as a bed
and banks and an ordinary high water
mark can be identified upstream of the
break. Id. at 37105–06.
In the 2015 Rule, the agencies did not
expressly amend the longstanding
definition of ‘‘adjacent’’ (defined as
‘‘bordering, contiguous, or
neighboring’’), but the agencies added a
new definition of ‘‘neighboring’’ that
impacted the interpretation of
‘‘adjacent.’’ The 2015 Rule defined
‘‘neighboring’’ to encompass all waters
located within 100 feet of the ordinary
high water mark of a category (1)
through (5) ‘‘jurisdictional by rule’’
water; all waters located within the 100year floodplain of a category (1) through
(5) ‘‘jurisdictional by rule’’ water and
not more than 1,500 feet from the
ordinary high water mark of such water;
E:\FR\FM\12JYP1.SGM
12JYP1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS1
all waters located within 1,500 feet of
the high tide line of a category (1)
though (3) ‘‘jurisdictional by rule’’
water; and all waters within 1,500 feet
of the ordinary high water mark of the
Great Lakes. Id. at 37105. The entire
water is considered neighboring if any
portion of it lies within one of these
zones. See id. This regulatory text did
not appear in the proposed rule, and
thus the agencies did not receive public
comment on these numeric measures.
In addition to the six categories of
‘‘jurisdictional by rule’’ waters, the 2015
Rule identifies certain waters that are
subject to a case-specific analysis to
determine if they have a ‘‘significant
nexus’’ to a water that is jurisdictional.
Id. at 37104–05. The first category
consists of five specific types of waters
in specific regions of the country:
Prairie potholes, Carolina and Delmarva
bays, pocosins, western vernal pools in
California, and Texas coastal prairie
wetlands. Id. at 37105. The second
category consists of all waters located
within the 100-year floodplain of any
category (1) through (3) ‘‘jurisdictional
by rule’’ water and all waters located
within 4,000 feet of the high tide line or
ordinary high water mark of any
category (1) through (5) ‘‘jurisdictional
by rule’’ water. Id. These quantitative
measures did not appear in the
proposed rule, and thus the agencies did
not receive public comment on these
specific measures.
The 2015 Rule defines ‘‘significant
nexus’’ to mean a water, including
wetlands, that either alone or in
combination with other similarly
situated waters in the region,
significantly affects the chemical,
physical, or biological integrity of a
category (1) through (3) ‘‘jurisdictional
by rule’’ water. 80 FR 37106. ‘‘For an
effect to be significant, it must be more
than speculative or insubstantial.’’ Id.
The term ‘‘in the region’’ means ‘‘the
watershed that drains to the nearest’’
primary water.2 Id. This definition is
different than the test articulated by the
agencies in their 2008 Rapanos
Guidance.3 That guidance interpreted
‘‘similarly situated’’ to include all
wetlands (not waters) adjacent to the
2 In this notice, a ‘‘primary’’ water is a category
(1) through (3) ‘‘jurisdictional by rule’’ water.
3 See U.S. EPA and U.S. Army Corps of Engineers.
Clean Water Act Jurisdiction Following the U.S.
Supreme Court’s Decision in Rapanos v. United
States & Carabell v. United States at 1 (Dec. 2, 2008)
(‘‘Rapanos Guidance’’), available at https://
www.epa.gov/sites/production/files/2016-02/
documents/cwa_jurisdiction_following_
rapanos120208.pdf. The agencies acknowledge that
the Rapanos Guidance did not impose legally
binding requirements, see id. at 4 n.17, but believe
that this guidance is relevant to the discussion in
this notice.
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
same tributary, a much less expansive
treatment of similarly situated waters
than in the 2015 Rule.
Under the 2015 Rule, to determine
whether a water, alone or in
combination with similarly situated
waters across a watershed, has such an
effect, one must look at nine functions
such as sediment trapping, runoff
storage, provision of life cycle
dependent aquatic habitat, and other
functions. It is sufficient for determining
whether a water has a significant nexus
if any single function performed by the
water, alone or together with similarly
situated waters in the watershed,
contributes significantly to the
chemical, physical, or biological
integrity of the nearest category (1)
through (3) ‘‘jurisdictional by rule’’
water. Id. Taken together, the
enumeration of the nine functions and
the more expansive consideration of
‘‘similarly situated’’ in the 2015 Rule
could mean that the vast majority of
water features in the United States may
come within the jurisdictional purview
of the federal government.4 Indeed, the
agencies stated in the 2015 Rule that the
‘‘the chemical, physical, and biological
integrity of downstream waters is
directly related to the aggregate
contribution of upstream waters that
flow into them, including any
tributaries and connected wetlands.’’ Id.
at 37066.
The agencies also retained exclusions
from the definition of ‘‘waters of the
United States’’ for prior converted
cropland and waste treatment systems.
Id. at 37105. In addition, the agencies
codified several exclusions that
reflected longstanding agency practice,
and added others such as ‘‘puddles’’
and ‘‘swimming pools’’ in response to
concerns raised by stakeholders during
the public comment period on the
proposed 2015 Rule. Id. at 37096–98,
37105.
B. Legal Challenges to the 2015 Rule
Following the 2015 Rule’s
publication, 31 States 5 and 53 non-state
4 ‘‘[T]he vast majority of the nation’s water
features are located within 4,000 feet of a covered
tributary, traditional navigable water, interstate
water, or territorial sea.’’ U.S. EPA and Department
of the Army. Economic Analysis of the EPA-Army
Clean Water Rule at 11 (May 20, 2015) (‘‘2015 Rule
Economic Analysis’’) (Docket ID: EPAHQ–OW–
2011–0880–20866), available at https://
www.regulations.gov/document?D=EPA-HQ-OW2011-0880-20866.
5 Alabama, Alaska, Arizona, Arkansas, Colorado,
Florida, Georgia, Idaho, Indiana, Kansas, Kentucky,
Louisiana, Michigan, Mississippi, Missouri,
Montana, Nebraska, Nevada, New Mexico
(Environment Department and State Engineer),
North Carolina (Department of Environment and
Natural Resources), North Dakota, Ohio, Oklahoma,
South Carolina, South Dakota, Tennessee, Texas,
PO 00000
Frm 00015
Fmt 4702
Sfmt 4702
32229
parties, including environmental
groups, and groups representing
farming, recreational, forestry, and other
interests, filed complaints and petitions
for review in multiple federal district 6
and appellate 7 courts challenging the
2015 Rule. In those cases, the
challengers alleged procedural
deficiencies in the development and
promulgation of the 2015 Rule and
substantive deficiencies in the 2015
Rule itself. Some challengers argued
that the 2015 Rule was too expansive
while others argued that it excluded too
many waters from federal jurisdiction.
The day before the 2015 Rule’s
August 28, 2015 effective date, the U.S.
District Court for the District of North
Dakota preliminarily enjoined the 2015
Rule in the 13 States that challenged the
rule in that court.8 The district court
found those States were ‘‘likely to
succeed’’ on the merits of their
challenge to the 2015 Rule because,
among other reasons, ‘‘it appears likely
that the EPA has violated its
Congressional grant of authority in its
promulgation of the Rule.’’ In particular,
the court noted concern that the 2015
Rule’s definition of tributary ‘‘includes
vast numbers of waters that are unlikely
to have a nexus to navigable waters.’’
Further, the court found that ‘‘it appears
likely that the EPA failed to comply
with [Administrative Procedure Act
(APA)] requirements when
promulgating the Rule,’’ suggesting that
certain distance-based measures were
not a logical outgrowth of the proposal
to the 2015 Rule. North Dakota v. EPA,
127 F. Supp. 3d 1047, 1051, 1056, 1058
(D.N.D. 2015). No party sought an
interlocutory appeal.
The petitions for review filed in the
courts of appeals were consolidated in
the U.S. Court of Appeals for the Sixth
Circuit. In that litigation, state and
industry petitioners raised concerns
about whether the 2015 Rule violates
the Constitution and the CWA and
whether its promulgation violated
Utah, West Virginia, Wisconsin, and Wyoming.
Iowa joined the legal challenge later in the process,
bringing the total to 32 States.
6 U.S. District Courts for the Northern and
Southern District of Georgia, District of Minnesota,
District of North Dakota, Southern District of Ohio,
Northern District of Oklahoma, Southern District of
Texas, District of Arizona, Northern District of
Florida, District of the District of Columbia,
Western District of Washington, Northern District of
California, and Northern District of West Virginia.
7 U.S. Court of Appeals for the Second, Fifth,
Sixth, Eighth, Ninth, Tenth, Eleventh, and District
of Columbia Circuits.
8 Alaska, Arizona, Arkansas, Colorado, Idaho,
Missouri, Montana, Nebraska, Nevada, New
Mexico, North Dakota, South Dakota, and
Wyoming. Iowa’s motion to intervene in the case
was granted after issuance of the preliminary
injunction.
E:\FR\FM\12JYP1.SGM
12JYP1
amozie on DSK3GDR082PROD with PROPOSALS1
32230
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
procedural requirements under the APA
and other statutes. Environmental
petitioners also challenged the 2015
Rule, including exclusions therein. On
October 9, 2015, approximately six
weeks after the 2015 Rule took effect in
the 37 States that were not subject to the
preliminary injunction issued by the
District of North Dakota, the Sixth
Circuit stayed the 2015 Rule nationwide
after finding, among other things, that
State petitioners had demonstrated ‘‘a
substantial possibility of success on the
merits of their claims.’’ In re EPA &
Dep’t of Def. Final Rule, 803 F.3d 804
(6th Cir. 2015) (‘‘In re EPA’’).
On January 13, 2017, the U.S.
Supreme Court granted certiorari on the
question of whether the courts of
appeals have original jurisdiction to
review challenges to the 2015 Rule. See
Nat’l Ass’n of Mfrs. v. Dep’t of Defense,
137 S. Ct. 811 (2017). The Sixth Circuit
granted petitioners’ motion to hold in
abeyance the briefing schedule in the
litigation challenging the 2015 Rule
pending a Supreme Court decision on
the question of the court of appeals’
jurisdiction. On January 22, 2018, the
Supreme Court, in a unanimous
opinion, held that the 2015 Rule is
subject to direct review in the district
courts. Nat’l Ass’n of Mfrs. v. Dep’t of
Def., 138 S. Ct. 617, 624 (2018).
Throughout the pendency of the
Supreme Court litigation (and for a short
time thereafter), the Sixth Circuit’s
nationwide stay remained in effect. In
response to the Supreme Court’s
decision, on February 28, 2018, the
Sixth Circuit lifted the stay and
dismissed the corresponding petitions
for review. See In re Dep’t of Def. & EPA
Final Rule, 713 Fed. App’x 489 (6th Cir.
2018).
Since the Supreme Court’s
jurisdictional ruling, district court
litigation regarding the 2015 Rule has
resumed. At this time, the 2015 Rule
continues to be subject to a preliminary
injunction issued by the District of
North Dakota as to 13 States: Alaska,
Arizona, Arkansas, Colorado, Idaho,
Missouri, Montana, Nebraska, Nevada,
North Dakota, South Dakota, Wyoming,
and New Mexico. The 2015 Rule also is
subject to a preliminary injunction
issued by the U.S. District Court for the
Southern District of Georgia as to 11
more States: Georgia, Alabama, Florida,
Indiana, Kansas, Kentucky, North
Carolina, South Carolina, Utah, West
Virginia, and Wisconsin. See Georgia v.
Pruitt, No. 15–cv–79 (S.D. Ga.). In
another action, the U.S. District Court
for the Southern District of Texas is
considering preliminary injunction
motions filed by parties including the
States of Texas, Louisiana, and
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
Mississippi. See Texas v. EPA, No.
3:15–cv–162 (S.D. Tex.); Am. Farm
Bureau Fed’n et al. v. EPA, No. 3:15–cv–
165 (S.D. Tex.). At least three additional
States are seeking a preliminary
injunction in the U.S. District Court for
the Southern District of Ohio as well.
See, e.g., States’ Supplemental
Memorandum in Support of Preliminary
Injunction, Ohio v. EPA, No. 2:15–cv–
02467 (S.D. Ohio June 20, 2018) (brief
filed by the States of Ohio, Michigan,
and Tennessee in support of the States’
motion for a preliminary injunction
against the 2015 Rule).
C. Executive Order 13778, the Notice of
Proposed Rulemaking, and the
Applicability Date Rule
The agencies are engaged in a twostep process intended to review and
repeal or revise, as appropriate and
consistent with law, the definition of
‘‘waters of the United States’’ as set
forth in the 2015 Rule. This process
began in response to Executive Order
13778 issued on February 28, 2017, by
the President entitled ‘‘Restoring the
Rule of Law, Federalism, and Economic
Growth by Reviewing the ‘Waters of the
United States’ Rule.’’ Section 1 of the
Executive Order states, ‘‘[i]t is in the
national interest to ensure the Nation’s
navigable waters are kept free from
pollution, while at the same time
promoting economic growth,
minimizing regulatory uncertainty, and
showing due regard for the roles of the
Congress and the States under the
Constitution.’’ The Order directed the
EPA and the Army to review the 2015
Rule for consistency with the policy
outlined in Section 1 of the Order and
to issue a proposed rule rescinding or
revising the 2015 Rule as appropriate
and consistent with law (Section 2). The
Executive Order also directed the
agencies to ‘‘consider interpreting the
term ‘navigable waters’ . . . in a manner
consistent with’’ Justice Scalia’s
plurality opinion in Rapanos (Section
3).
On March 6, 2017, the agencies
published a notice of intent to review
the 2015 Rule and provide notice of a
forthcoming proposed rulemaking
consistent with the Executive Order. 82
FR 12532. Shortly thereafter, the
agencies announced that they would
implement the Executive Order in a
two-step approach. On July 27, 2017,
the agencies published a NPRM (82 FR
34899) that proposed to rescind the
2015 Rule and restore the regulatory text
that governed prior to the promulgation
of the 2015 Rule, which the agencies
have been implementing since the
judicial stay of the 2015 Rule consistent
with Supreme Court decisions and
PO 00000
Frm 00016
Fmt 4702
Sfmt 4702
informed by applicable guidance
documents and longstanding agency
practice. The agencies invited comment
on the NPRM over a 62-day period.
Shortly after the Supreme Court
decided that the courts of appeals do
not have original jurisdiction to review
challenges to the 2015 Rule and directed
the Sixth Circuit to dismiss the
consolidated challenges to the 2015
Rule for lack of jurisdiction, the
agencies issued a final rule (83 FR 5200,
Feb. 6, 2018), after providing notice and
an opportunity for public comment, that
added an applicability date to the 2015
Rule. The applicability date was
established as February 6, 2020. When
adding the applicability date to the 2015
Rule, the agencies clarified that they
will continue to implement nationwide
the previous regulatory definition of
‘‘waters of the United States,’’ consistent
with the practice and procedures the
agencies implemented before and
immediately following the issuance of
the 2015 Rule pursuant to the
preliminary injunction issued by the
District of North Dakota and the
nationwide stay issued by the Sixth
Circuit. The agencies further explained
that the final applicability date rule
would ensure regulatory certainty and
consistent implementation of the CWA
nationwide while the agencies
reconsider the 2015 Rule and
potentially pursue further rulemaking to
develop a new definition of ‘‘waters of
the United States.’’ The applicability
date rule was challenged in a number of
district courts. Generally, the challenges
raise concerns that the agencies’ action
was arbitrary and capricious because the
agencies did not address substantive
comments regarding the 2015 Rule, as
well as procedural concerns with
respect to the length of the public
comment period for the proposed
applicability date rule. At this time,
these challenges remain pending in the
district courts where they were filed.
D. Comments on the Original Notice of
Proposed Rulemaking
The agencies accepted comments on
the NPRM from July 27, 2017, through
September 27, 2017. The agencies
received more than 685,000 comments
on the NPRM from a broad spectrum of
interested parties. The agencies are
continuing to review those extensive
comments. Some commenters expressed
support for the agencies’ proposal to
repeal the 2015 Rule, stating, among
other things, that the 2015 Rule exceeds
the agencies’ statutory authority. Other
commenters opposed the proposal,
stating, among other things, that
repealing the 2015 Rule will increase
E:\FR\FM\12JYP1.SGM
12JYP1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS1
regulatory uncertainty and adversely
impact water quality.
Based on the agencies’ careful and
ongoing review of the comments
submitted in response to the NPRM, the
agencies believe that it is in the public
interest to provide further explanation
and allow interested parties additional
opportunity to comment on the
proposed repeal of the 2015 Rule.
Because some commenters interpreted
the NPRM as restricting their ability to
comment on the legal and policy
reasons for or against the repeal of the
2015 Rule while others submitted
comments addressing these topics, the
agencies wish to make clear that
comments on that subject are solicited.
Additionally, some commenters
appeared to be confused by whether the
agencies proposed a temporary or
interim, as opposed to a permanent,
repeal of the 2015 Rule. While the
agencies did refer to the July 2017
proposal as an ‘‘interim action’’ (82 FR
34902), that was in the context of
explaining that the proposal to repeal
the 2015 Rule is the first step of a twostep process, as described above, and
that the agencies are planning to take
the additional, second step of
conducting a separate notice and
comment rulemaking to propose a new
definition of ‘‘waters of the United
States.’’ In this notice, the agencies are
clarifying that, regardless of the timing
or ultimate outcome of that additional
rulemaking, the agencies are proposing
a permanent repeal of the 2015 Rule at
this stage. This was also our intent in
the NPRM. Finally, some commenters
did not fully understand the precise
action the NPRM proposed to take, e.g.,
repealing, staying, or taking some other
action with respect to the 2015 Rule.
The agencies are issuing this SNPRM
and are inviting all interested persons to
comment on whether the agencies
should repeal the 2015 Rule and
recodify the regulations currently being
implemented by the agencies.
E. Comments on This Supplemental
Notice of Proposed Rulemaking
As discussed in the next sections, the
agencies are proposing to permanently
repeal the 2015 Rule. The agencies
welcome comment on all issues that are
relevant to the consideration of whether
to repeal the 2015 Rule. In response to
the initial NPRM, many commenters
have already provided comment on
considerations and issues that weigh in
favor of or against repeal, including
many of the issues articulated below.
The agencies will consider all of those
previously submitted comments, in
addition to any new comments
submitted in response to this SNPRM,
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
in taking a final action on this
rulemaking. As such, commenters need
not resubmit comments already
provided in response to the agencies’
July 27, 2017 NPRM (82 FR 34899).
II. Proposal To Repeal the 2015 Rule
A. Legal Authority To Repeal
The agencies’ ability to repeal an
existing regulation through notice-andcomment rulemaking is well-grounded
in the law. The APA defines rulemaking
to mean ‘‘agency process for
formulating, amending, or repealing a
rule.’’ 5 U.S.C. 551(5). The CWA
complements this authority by
providing the Administrator with broad
authority to ‘‘prescribe such regulations
as are necessary to carry out the
functions under this Act.’’ 33 U.S.C.
1361(a). This broad authority includes
regulations that repeal or revise CWA
implementing regulations promulgated
by a prior administration.
The Supreme Court has made clear
that ‘‘[a]gencies are free to change their
existing policies as long as they provide
a reasoned explanation for the change,’’
and ‘‘[w]hen an agency changes its
existing position, it ‘need not always
provide a more detailed justification
than what would suffice for a new
policy created on a blank slate.’ ’’
Encino Motorcars, LLC v. Navarro, 136
S. Ct. 2117, 2125 (2016) (citations
omitted). The NPRM discussed how the
agencies may revise or repeal the
regulatory definition of ‘‘waters of the
United States’’ so long as the agencies’
action is based on a reasoned
explanation. See 82 FR 34901. The
agencies can do so based on changes in
circumstance, or changes in statutory
interpretation or policy judgments. See,
e.g., FCC v. Fox Television Stations,
Inc., 556 U.S. 502, 514–15 (2009); Ctr.
for Sci. in Pub. Interest v. Dep’t of
Treasury, 797 F.2d 995, 998–99 & n.1
(D.C. Cir. 1986). The agencies’
interpretation of the statutes they
administer, such as the CWA, are not
‘‘instantly carved in stone’’; quite the
contrary, the agencies ‘‘must consider
varying interpretations and the wisdom
of [their] policy on a continuing basis,
. . . for example, in response to . . . a
change in administrations.’’ Nat’l Cable
& Telecommc’ns Ass’n v. Brand X
Internet Servs., 545 U.S. 967, 981–82
(2005) (‘‘Brand X’’) (internal quotation
marks omitted) (quoting Chevron
U.S.A., Inc. v. NRDC, 467 U.S. 837, 863–
64 (1984)) (citing Motor Vehicle Mfrs.
Ass’n v. State Farm Mut. Auto. Ins. Co.,
463 U.S. 29, 59 (1983) (Rehnquist, J.,
concurring in part and dissenting in
part)). The Supreme Court and lower
courts have acknowledged an agency’s
PO 00000
Frm 00017
Fmt 4702
Sfmt 4702
32231
ability to repeal regulations
promulgated by a prior administration
based on changes in agency policy
where ‘‘the agency adequately explains
the reasons for a reversal of policy.’’ See
Brand X, 545 U.S. at 981. A revised
rulemaking based ‘‘on a reevaluation of
which policy would be better in light of
the facts’’ is ‘‘well within an agency’s
discretion,’’ and ‘‘[a] change in
administration brought about by the
people casting their votes is a perfectly
reasonable basis for an executive
agency’s reappraisal’’ of its regulations
and programs. Nat’l Ass’n of Home
Builders v. EPA, 682 F.3d 1032, 1038 &
1043 (D.C. Cir. 2012) (‘‘NAHB’’).
B. Legal Background
1. The Clean Water Act
Congress amended the Federal Water
Pollution Control Act (FWPCA), or
Clean Water Act (CWA) as it is
commonly called,9 in 1972 to address
longstanding concerns regarding the
quality of the nation’s waters and the
federal government’s ability to address
those concerns under existing law. Prior
to 1972, the ability to control and
redress water pollution in the nation’s
waters largely fell to the Corps under
the Rivers and Harbors Act of 1899.
Congress had also enacted the Water
Pollution Control Act of 1948, Public
Law 80–845, 62 Stat. 1155 (June 30,
1948), to address interstate water
pollution, and subsequently amended
that statute in 1956 (giving the statute is
current formal name), 1961, and 1965.
The early versions of the CWA
promoted the development of pollution
abatement programs, required states to
develop water quality standards, and
authorized the federal government to
bring enforcement actions to abate water
pollution.
These early statutory efforts, however,
proved inadequate to address the
decline in the quality of the nation’s
waters, see City of Milwaukee v. Illinois,
451 U.S. 304, 310 (1981), so Congress
performed a ‘‘total restructuring’’ and
‘‘complete rewriting’’ of the existing
statutory framework in 1972, id. at 317
(quoting legislative history of 1972
amendments). That restructuring
resulted in the enactment of a
comprehensive scheme designed to
prevent, reduce, and eliminate pollution
in the nation’s waters generally, and to
regulate the discharge of pollutants into
navigable waters specifically. See, e.g.,
9 The FWPCA is commonly referred to as the
CWA following the 1977 amendments to the
FWPCA. Public Law 95–217, 91 Stat. 1566 (1977).
For ease of reference, the agencies will generally
refer to the FWPCA in this notice as the CWA or
the Act.
E:\FR\FM\12JYP1.SGM
12JYP1
amozie on DSK3GDR082PROD with PROPOSALS1
32232
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
S.D. Warren Co. v. Maine Bd. of Envtl.
Prot., 547 U.S. 370, 385 (2006) (‘‘[T]he
Act does not stop at controlling the
‘addition of pollutants,’ but deals with
‘pollution’ generally[.]’’).
The objective of the new statutory
scheme was ‘‘to restore and maintain
the chemical, physical, and biological
integrity of the Nation’s waters.’’ 33
U.S.C. 1251(a). In order to meet that
objective, Congress declared two
national goals: (1) ‘‘that the discharge of
pollutants into the navigable waters be
eliminated by 1985;’’ and (2) ‘‘that
wherever attainable, an interim goal of
water quality which provides for the
protection and propagation of fish,
shellfish, and wildlife and provides for
recreation in and on the water be
achieved by July 1, 1983. . . .’’ Id. at
1251(a)(1)–(2).
Congress established several key
policies that direct the work of the
agencies to effectuate those goals. For
example, Congress declared as a
national policy ‘‘that the discharge of
toxic pollutants in toxic amounts be
prohibited; . . . that Federal financial
assistance be provided to construct
publicly owned waste treatment works;
. . . that areawide waste treatment
management planning processes be
developed and implemented to assure
adequate control of sources of pollutants
in each State; . . . [and] that programs
for the control of nonpoint sources of
pollution be developed and
implemented in an expeditious manner
so as to enable the goals of this Act to
be met through the control of both point
and nonpoint sources of pollution.’’ Id.
at 1251(a)(3)–(7).
Congress envisioned a major role for
the states in implementing the CWA,
and the CWA also recognizes the
importance of preserving the states’
independent authority and
responsibility in this area. The CWA
balances the traditional power of states
to regulate land and water resources
within their borders with the need for
a federal water quality regulation to
protect the waters of the United States.
For example, the statute reflects ‘‘the
policy of the Congress to recognize,
preserve, and protect the primary
responsibilities and rights of States to
prevent, reduce, and eliminate
pollution’’ and ‘‘to plan the
development and use . . . of land and
water resources. . . .’’ Id. at 1251(b).
Congress also declared as a national
policy that states manage the major
construction grant program and
implement the core permitting programs
authorized by the statute, among other
responsibilities. Id. Congress added that
‘‘nothing in this Act shall . . . be
construed as impairing or in any
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
manner affecting any right or
jurisdiction of the States with respect to
the waters (including boundary waters)
of such States.’’ Id. at 1370. Congress
also pledged to provide technical
support and financial aid to the states
‘‘in connection with the prevention,
reduction, and elimination of
pollution.’’ Id. at 1251(b).
To carry out these policies, Congress
broadly defined ‘‘pollution’’ to mean
‘‘the man-made or man-induced
alteration of the chemical, physical,
biological, and radiological integrity of
water,’’ id. at 1362(19), to parallel the
broad objective of the Act ‘‘to restore
and maintain the chemical, physical,
and biological integrity of the Nation’s
waters,’’ id. at 1251(a). Congress then
crafted a non-regulatory statutory
framework to provide technical and
financial assistance to the states to
prevent, reduce, and eliminate pollution
in the broader set of the nation’s waters.
For example, section 105 of the Act,
‘‘Grants for research and development,’’
authorized EPA ‘‘to make grants to any
State or States or interstate agency to
demonstrate, in river basins or portions
thereof, advanced treatment and
environmental enhancement techniques
to control pollution from all sources,
. . . including nonpoint sources, . . .
[and] for research and demonstration
projects for prevention of pollution of
any waters by industry including, but
not limited to, the prevention,
reduction, and elimination of the
discharge of pollutants.’’ 33 U.S.C.
1255(b)–(c) (emphases added); see also
id. at 1256(a) (authorizing EPA to issue
‘‘grants to States and to interstate
agencies to assist them in administering
programs for the prevention, reduction,
and elimination of pollution’’). Section
108, ‘‘Pollution control in the Great
Lakes,’’ authorized EPA to enter into
agreements with any state to develop
plans for the ‘‘elimination or control of
pollution, within all or any part of the
watersheds of the Great Lakes.’’ Id. at
1258(a) (emphasis added); see also id. at
1268(a)(3)(C) (defining the ‘‘Great Lakes
System’’ as ‘‘all the streams, rivers,
lakes, and other bodies of water within
the drainage basin of the Great Lakes’’).
Similar broad pollution control
programs were created for other major
watersheds, including, for example, the
Chesapeake Bay, see id. at 1267(a)(3),
Long Island Sound, see id. at
1269(c)(2)(D), and Lake Champlain, see
id. at 1270(g)(2).
For the narrower set of the nation’s
waters identified as ‘‘navigable waters’’
or ‘‘the waters of the United States,’’ id.
at 1362(7), Congress created a federal
regulatory permitting program designed
to address the discharge of pollutants
PO 00000
Frm 00018
Fmt 4702
Sfmt 4702
into those waters. Section 301 contains
the key regulatory mechanism: ‘‘Except
as in compliance with this section and
sections 302, 306, 307, 318, 402, and
404 of this Act, the discharge of any
pollutant by any person shall be
unlawful.’’ Id. at 1311(a). A ‘‘discharge
of a pollutant’’ is defined to include
‘‘any addition of any pollutant to
navigable waters from any point
source,’’ such as a pipe, ditch or other
‘‘discernible, confined and discrete
conveyance.’’ Id. at 1362(12), (14)
(emphasis added). The term
‘‘pollutant,’’ as compared to the broader
term ‘‘pollution,’’ id. at 1362(19), means
‘‘dredged spoil, solid waste, incinerator
residue, sewage, garbage, sewage sludge,
munitions, chemical wastes, biological
materials, radioactive materials, heat,
wrecked or discarded equipment, rock,
sand, cellar dirt and industrial,
municipal, and agricultural waste
discharged into water.’’ Id. at 1362(6).
Thus, it is unlawful to discharge
pollutants into navigable waters
(defined in the Act as ‘‘the waters of the
United States’’) from a point source
unless the discharge complies with
certain enumerated sections of the
CWA, including obtaining
authorizations to discharge pollutants
pursuant to the section 402 National
Pollutant Discharge Elimination System
(NPDES) permit program and the
section 404 dredged or fill material
permit program. See id. at 1342 and
1344.
Under this statutory scheme, the
states are responsible for developing
water quality standards for waters of the
United States within their borders and
reporting on the condition of those
waters to EPA every two years. Id. at
1313, 1315. States are also responsible
for developing total maximum daily
loads (TMDLs) for waters that are not
meeting established water quality
standards and must submit those
TMDLs to EPA for approval. Id. at
1313(d). States also have authority to
issue water quality certifications or
waive certification for every federal
permit or license issued within their
borders that may result in a discharge to
navigable waters. Id. at 1341. A change
to the interpretation of ‘‘waters of the
United States’’ may change the scope of
waters subject to CWA jurisdiction and
thus may change the scope of waters for
which states may assume these
responsibilities under the Act.
These same regulatory authorities can
be assumed by Indian tribes under
section 518 of the CWA, which
authorizes EPA to treat eligible Indian
tribes in a manner similar to states for
a variety of purposes, including
administering each of the principal
E:\FR\FM\12JYP1.SGM
12JYP1
amozie on DSK3GDR082PROD with PROPOSALS1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
CWA regulatory programs. Id. at
1377(e). In addition, states and tribes
retain sovereign authority to protect and
manage the use of those waters that are
not navigable waters under the CWA.
See, e.g., id. at 1251(b), 1251(g), 1370,
1377(a). Forty-seven states administer
the CWA section 402 permit program for
those waters of the United States within
their boundaries, and two administer
the section 404 permit program. At
present, no tribes administer the section
402 or 404 programs.
The agencies must develop regulatory
programs designed to ensure that the
full statute is implemented as Congress
intended. See, e.g., Hibbs v. Winn, 542
U.S. 88, 101 (2004) (‘‘A statute should
be construed so that effect is given to all
its provisions, so that no part will be
inoperative or superfluous, void or
insignificant.’’). This includes pursuing
the overall ‘‘objective’’ of the CWA to
‘‘restore and maintain the chemical,
physical, and biological integrity of the
Nation’s waters,’’ 33 U.S.C. 1251(a),
while implementing the specific
‘‘policy’’ directives from Congress to,
among other things, ‘‘recognize,
preserve, and protect the primary
responsibilities and rights of States to
prevent, reduce, and eliminate
pollution’’ and ‘‘to plan the
development and use . . . of land and
water resources,’’ id. at 1251(b). See
Webster’s II, New Riverside University
Dictionary (1994) (defining ‘‘policy’’ as
a ‘‘plan or course of action, as of a
government[,] designed to influence and
determine decisions and actions;’’ an
‘‘objective’’ is ‘‘something worked
toward or aspired to: Goal’’). To
maintain that balance, the agencies must
determine what Congress had in mind
when it defined ‘‘navigable waters’’ in
1972 as simply ‘‘the waters of the
United States’’—and must do so in light
of, inter alia, the policy directive to
preserve and protect the states’ rights
and responsibilities.
Congress’ authority to regulate
navigable waters derives from its power
to regulate the ‘‘channels of interstate
commerce’’ under the Commerce
Clause. Gibbons v. Ogden, 22 U.S. (9
Wheat.) 1 (1824); see also United States
v. Lopez, 514 U.S. 549, 558–59 (1995)
(describing the ‘‘channels of interstate
commerce’’ as one of three areas of
congressional authority under the
Commerce Clause). The Supreme Court
explained in SWANCC that the term
‘‘navigable’’ indicates ‘‘what Congress
had in mind as its authority for enacting
the Clean Water Act: its traditional
jurisdiction over waters that were or had
been navigable in fact or which could
reasonably be so made.’’ 531 U.S. 159,
172 (2001). The Court further explained
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
that nothing in the legislative history of
the Act provides any indication that
‘‘Congress intended to exert anything
more than its commerce power over
navigation.’’ Id. at 168 n.3.
The Supreme Court has cautioned
that one must look to the underlying
purpose of the statute to determine the
scope of federal authority being
exercised over navigable waters under
the Commerce Clause. See PPL
Montana, LLC v. Montana, 132 S. Ct.
1215, 1228 (2012). The Supreme Court
did that in United States v. Riverside
Bayview Homes, for example, and
determined that Congress had intended
‘‘to exercise its powers under the
Commerce Clause to regulate at least
some waters that would not be deemed
‘navigable’ under the classical
understanding of that term.’’ 474 U.S.
121, 133 (1985) (‘‘[T]he evident breadth
of congressional concern for protection
of water quality and aquatic ecosystems
suggests that it is reasonable for the
Corps to interpret the term ‘waters’ to
encompass wetlands adjacent to waters
as more conventionally defined.’’); see
also SWANCC, 531 U.S. at 167 (noting
that the Riverside Bayview ‘‘holding was
based in large measure upon Congress’
unequivocal acquiescence to, and
approval of, the Corps’ regulations
interpreting the CWA to cover wetlands
adjacent to navigable waters’’).
The classical understanding of the
term navigable was first articulated by
the Supreme Court in The Daniel Ball:
Those rivers must be regarded as public
navigable rivers in law which are navigable
in fact. And they are navigable in fact when
they are used, or are susceptible of being
used, in their ordinary condition, as
highways of commerce, over which trade and
travel are or may be conducted in the
customary modes of trade and travel on
water. And they constitute navigable waters
of the United States within the meaning of
the Acts of Congress, in contradistinction
from the navigable waters of the States, when
they form in their ordinary condition by
themselves, or by uniting with other waters,
a continued highway over which commerce
is or may be carried on with other States or
foreign countries in the customary modes in
which such commerce is conducted by water.
77 U.S. (10 Wall.) 557, 563 (1871). Over
the years, this traditional test has been
expanded to include waters that had
been used in the past for interstate
commerce, see Economy Light & Power
Co. v. United States, 256 U.S. 113, 123
(1921), and waters that are susceptible
for use with reasonable improvement,
see United States v. Appalachian Elec.
Power Co., 311 U.S. 377, 407–10 (1940).
By the time the 1972 CWA
amendments were enacted, the Supreme
Court had also made clear that Congress’
authority over the channels of interstate
PO 00000
Frm 00019
Fmt 4702
Sfmt 4702
32233
commerce was not limited to regulation
of the channels themselves, but could
extend to activities necessary to protect
the channels. See Oklahoma ex rel.
Phillips v. Guy F. Atkinson Co., 313 U.S.
508, 523 (1941) (‘‘Congress may exercise
its control over the non-navigable
stretches of a river in order to preserve
or promote commerce on the navigable
portions.’’). The Supreme Court had also
clarified that Congress could regulate
waterways that formed a part of a
channel of interstate commerce, even if
they are not themselves navigable or do
not cross state boundaries. See Utah v.
United States, 403 U.S. 9, 11 (1971).
These developments were discussed
during the legislative process leading up
to the passage of the 1972 CWA
amendments, and certain members
referred to the scope of the amendments
as encompassing waterways that serve
as ‘‘links in the chain’’ of interstate
commerce as it flows through various
channels of transportation, such as
railroads and highways. See, e.g., 118
Cong. Rec. 33756–57 (1972) (statement
of Rep. Dingell); 118 Cong. Rec. 33699
(Oct. 4, 1972) (statement of Sen.
Muskie).10 Other references suggest that
congressional committees at least
contemplated applying the ‘‘control
requirements’’ of the Act ‘‘to the
navigable waters, portions thereof, and
their tributaries.’’ S. Rep. No. 92–414,
92nd Cong., 1st Sess. at 77 (1971). And
in 1977, when Congress authorized
State assumption over the section 404
dredged or fill material permitting
program, Congress limited the scope of
assumable waters by requiring the Corps
to retain permitting authority over
Rivers and Harbors Act waters (as
identified by the Daniel Ball test) plus
wetlands adjacent to those waters,
minus historic use only waters. See 33
U.S.C. 1344(g)(1).11 This suggests that
Congress had in mind a broader scope
of waters subject to CWA jurisdiction
than waters traditionally understood as
navigable. See SWANCC, 531 U.S. at
171; Riverside Bayview, 474 U.S. at 138
n.11.
Thus, Congress intended to assert
federal authority over more than just
waters traditionally understood as
navigable, and Congress rooted that
10 The agencies recognize that individual member
statements are not a substitute for full congressional
intent, but they do help provide context for issues
that were discussed during the legislative debates.
For a detailed discussion of the legislative history
of the 1972 CWA amendments, see Albrecht &
Nickelsburg, Could SWANCC Be Right? A New Look
at the Legislative History of the Clean Water Act,
32 ELR 11042 (Sept. 2002).
11 For a detailed discussion of the legislative
history supporting the enactment of section 404(g),
see Final Report of the Assumable Waters
Subcommittee (May 2017), App. F.
E:\FR\FM\12JYP1.SGM
12JYP1
32234
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
authority in ‘‘its commerce power over
navigation.’’ SWANCC, 531 U.S. at 168
n.3. However, there must necessarily be
a limit to that authority and to what
water is subject to federal jurisdiction.
How the agencies should exercise that
authority has been the subject of dispute
for decades, but the Supreme Court on
three occasions has analyzed the issue
and provided some instructional
guidance.
2. U.S. Supreme Court Precedent
a. Adjacent Wetlands
In Riverside Bayview, the Supreme
Court considered the Corps’ assertion of
jurisdiction over ‘‘low-lying, marshy
land’’ immediately abutting a water
traditionally understood as navigable on
the grounds that it was an ‘‘adjacent
wetland’’ within the meaning of the
Corps’ then-existing regulations. 474
U.S. at 124. The Court addressed the
question whether non-navigable
wetlands may be regulated as ‘‘waters of
the United States’’ on the basis that they
are ‘‘adjacent to’’ navigable-in-fact
waters and ‘‘inseparably bound up
with’’ them because of their ‘‘significant
effects on water quality and the aquatic
ecosystem.’’ See id. at 131–35 & n.9.
In analyzing the meaning of
adjacency, the Court captured the
difficulty in determining where the
limits of federal jurisdiction end, noting
that the line is somewhere between
open water and dry land:
amozie on DSK3GDR082PROD with PROPOSALS1
In determining the limits of its power to
regulate discharges under the Act, the Corps
must necessarily choose some point at which
water ends and land begins. Our common
experience tells us that this is often no easy
task: The transition from water to solid
ground is not necessarily or even typically an
abrupt one. Rather, between open waters and
dry land may lie shallows, marshes,
mudflats, swamps, bogs—in short, a huge
array of areas that are not wholly aquatic but
nevertheless fall far short of being dry land.
Where on this continuum to find the limit of
‘‘waters’’ is far from obvious.
Id. at 132 (emphasis added). Within this
statement, the Supreme Court identifies
a basic principle for adjacent wetlands:
The limits of jurisdiction lie within the
‘‘continuum’’ or ‘‘transition’’ ‘‘between
open waters and dry land.’’ Observing
that Congress intended the CWA ‘‘to
regulate at least some waters that would
not be deemed ‘navigable,’ ’’ the Court
therefore held that it is ‘‘a permissible
interpretation of the Act’’ to conclude
that ‘‘a wetland that actually abuts on a
navigable waterway’’ falls within the
‘‘definition of ‘waters of the United
States.’ ’’ Id. at 133, 135. Thus, a
wetland that abuts a navigable water
traditionally understood as navigable is
subject to CWA permitting because it is
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
‘‘inseparably bound up with the ‘waters’
of the United States.’’ Id. at 134. ‘‘This
holds true even for wetlands that are not
the result of flooding or permeation by
water having its source in adjacent
bodies of open water.’’ Id. The Court
also noted that the agencies can
establish categories of jurisdiction for
adjacent wetlands. See id. at 135 n.9.
The Supreme Court in Riverside
Bayview declined to decide whether
wetlands that are not adjacent to
navigable waters could also be regulated
by the agencies. See id. at 124 n.2 & 131
n.8. In SWANCC, however, the Supreme
Court analyzed a similar question in the
context of an abandoned sand and
gravel pit located some distance from a
traditional navigable water, with
excavation trenches that ponded—some
only seasonally—and served as habitat
for migratory birds. 531 U.S. at 162–65.
The Supreme Court rejected the
government’s stated rationale for
asserting jurisdiction over these
‘‘nonnavigable, isolated, intrastate
waters.’’ Id. at 171–72. In doing so, the
Supreme Court noted that Riverside
Bayview upheld ‘‘jurisdiction over
wetlands that actually abutted on a
navigable waterway’’ because the
wetlands were ‘‘inseparably bound up
with the ‘waters’ of the United States.’’
Id. at 167.12 As summarized by the
SWANCC majority:
The Court dismissed the argument
that the use of the abandoned ponds by
migratory birds fell within the power of
Congress to regulate activities that in the
aggregate have a substantial effect on
interstate commerce, or that the targeted
use of the ponds as a municipal landfill
was commercial in nature. Id. at 173.
Such arguments, the Court noted, raised
‘‘significant constitutional questions.’’
Id. ‘‘Where an administrative
interpretation of a statute invokes the
outer limits of Congress’ power, we
expect a clear indication that Congress
intended that result.’’ Id. at 172–73
(‘‘Congress does not casually authorize
administrative agencies to interpret a
statute to push the limit of
congressional authority.’’). This is
particularly true ‘‘where the
administrative interpretation alters the
federal-state framework by permitting
federal encroachment upon a traditional
state power.’’ Id. at 173; see also
Atascadero State Hospital v. Scanlon,
473 U.S. 234, 242–43 (1985) (finding
that where Congress intends to alter the
‘‘usual constitutional balance between
the States and the Federal Government,’’
it must make its intention to do so
‘‘unmistakably clear in the language of
the statute’’); Gregory v. Ashcroft, 501
U.S. 452, 460–61 (1991) (‘‘[The] plain
statement rule . . . acknowledg[es] that
the States retain substantial sovereign
powers under our constitutional
It was the significant nexus between the
scheme, powers with which Congress
wetlands and ‘‘navigable waters’’ that
does not readily interfere.’’). ‘‘Rather
informed our reading of the CWA in
Riverside Bayview Homes. Indeed, we did not than expressing a desire to readjust the
federal-state balance in this manner,
‘‘express any opinion’’ on the ‘‘question of
Congress chose [in the CWA] to
authority of the Corps to regulate discharges
of fill material into wetlands that are not
‘recognize, preserve, and protect the
adjacent to bodies of open water. . . . In
primary responsibilities and rights of
order to rule for [the Corps] here, we would
States . . . to plan the development and
have to hold that the jurisdiction of the Corps use . . . of land and water resources.
extends to ponds that are not adjacent to
. . .’’ SWANCC, 531 U.S. at 174
open water. But we conclude that the text of
(quoting 33 U.S.C. 1251(b)). The Court
the statute will not allow this.
therefore found no clear statement from
Id. at 167–68 (internal citations
Congress that it had intended to permit
omitted). That is because the text of
federal encroachment on traditional
section 404(a)—the permitting provision state power, and construed the CWA to
at issue in the case—included the word
avoid the significant constitutional
‘‘navigable’’ as its operative phrase, and questions related to the scope of federal
signaled a clear direction to the Court
authority authorized therein. Id.
that ‘‘Congress had in mind . . . its
The Supreme Court considered the
traditional jurisdiction over waters that
concept of adjacency again several years
were or had been navigable in fact or
later in consolidated cases arising out of
which could reasonably be so made.’’
the Sixth Circuit. See Rapanos v. United
Id. at 172.
States, 547 U.S. 715 (2006). In one case,
the Corps had determined that wetlands
12 For additional context, at oral argument during
on three separate sites were subject to
Riverside Bayview, the government attorney
CWA jurisdiction because they were
characterized the wetland at issue as ‘‘in fact an
adjacent to ditches or man-made drains
adjacent wetland, adjacent—by adjacent, I mean it
is immediately next to, abuts, adjoins, borders,
that eventually connected to traditional
whatever other adjective you might want to use,
navigable waters several miles away
navigable waters of the United States.’’ Transcript
through other ditches, drains, creeks,
of Oral Argument at 16, United States v. Riverside
and/or rivers. Id. at 719–20, 729. In
Bayview Homes, Inc., 474 U.S. 121 (1985) (No. 84–
701).
another case, the Corps had asserted
PO 00000
Frm 00020
Fmt 4702
Sfmt 4702
E:\FR\FM\12JYP1.SGM
12JYP1
amozie on DSK3GDR082PROD with PROPOSALS1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
jurisdiction over a wetland separated
from a man-made drainage ditch by a
four-foot-wide man-made berm. Id. at
730. The ditch emptied into another
ditch, which then connected to a creek,
and eventually connected to Lake St.
Clair, a traditional navigable water,
approximately a mile from the parcel at
issue. The berm was largely or entirely
impermeable, but may have permitted
occasional overflow from the wetland to
the ditch. Id. The Court, in a fractured
opinion, vacated and remanded the
Sixth Circuit’s decision upholding the
Corps’ asserted jurisdiction over the
four wetlands at issue, with Justice
Scalia writing for the plurality and
Justice Kennedy concurring in the
judgment. Id. at 757 (plurality), 787
(Kennedy, J.).
The plurality determined that CWA
jurisdiction only extended to adjacent
‘‘wetlands with a continuous surface
connection to bodies that are ‘waters of
the United States’ in their own right, so
that there is no clear demarcation
between ‘waters’ and wetlands.’’ Id. at
742. The plurality then concluded that
‘‘establishing that wetlands . . . are
covered by the Act requires two
findings: first, that the adjacent channel
contains a ‘wate[r] of the United States,’
(i.e., a relatively permanent body of
water connected to traditional interstate
navigable waters); and second, that the
wetland has a continuous surface
connection with that water, making it
difficult to determine where the ‘water’
ends and the ‘wetland’ begins.’’ Id.
(alteration in original).
In order to reach the adjacency
conclusion of this two-part test, the
plurality interpreted the Riverside
Bayview decision, and subsequent
SWANCC decision characterizing
Riverside Bayview, as authorizing
jurisdiction over wetlands that
physically abutted traditional navigable
waters. Id. at 740–42. The plurality
focused on the ‘‘inherent ambiguity’’
described in Riverside Bayview in
determining where on the continuum
between open waters and dry land the
scope of federal jurisdiction should end.
Id. at 740. It was ‘‘the inherent
difficulties of defining precise bounds to
regulable waters,’’ id. at 741 n.10,
according to the plurality, that
prompted the Court in Riverside
Bayview to defer to the Corps’ inclusion
of adjacent wetlands as ‘‘waters’’ subject
to CWA jurisdiction based on ecological
considerations. Id. at 740–41 (‘‘When
we characterized the holding of
Riverside Bayview in SWANCC, we
referred to the close connection between
waters and the wetlands they gradually
blend into: ‘It was the significant nexus
between the wetlands and ‘navigable
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
waters’ that informed our reading of the
CWA in Riverside Bayview Homes.’ ’’).
The plurality also noted that ‘‘SWANCC
rejected the notion that the ecological
considerations upon which the Corps
relied in Riverside Bayview . . .
provided an independent basis for
including entities like ‘wetlands’ (or
‘ephemeral streams’) within the phrase
‘the waters of the United States.’
SWANCC found such ecological
considerations irrelevant to the question
whether physically isolated waters
come within the Corps’ jurisdiction.’’ Id.
at 741–42 (emphasis in original).
Justice Kennedy disagreed with the
plurality’s determination that adjacency
requires a ‘‘continuous surface
connection’’ to covered waters. Id. at
772. In reading the phrase ‘‘continuous
surface connection’’ to mean a
continuous ‘‘surface-water connection,’’
id. at 776, and interpreting the
plurality’s standard to include a
‘‘surface-water-connection
requirement,’’ id. at 774, Justice
Kennedy stated that ‘‘when a surfacewater connection is lacking, the
plurality forecloses jurisdiction over
wetlands that abut navigable-in-fact
waters—even though such navigable
waters were traditionally subject to
federal authority,’’ id. at 776, even after
the Riverside Bayview Court ‘‘deemed it
irrelevant whether ‘the moisture
creating the wetlands . . . find[s] its
source in the adjacent bodies of water,’’
id. at 772 (internal citations omitted).
This is one reason why Justice Kennedy
stated that ‘‘Riverside Bayview’s
observations about the difficulty of
defining the water’s edge cannot be
taken to establish that when a clear
boundary is evident, wetlands beyond
that boundary fall outside the Corps’
jurisdiction.’’ Id. at 773.
The plurality did not directly address
the precise distinction raised by Justice
Kennedy, but did note in response that
the ‘‘Riverside Bayview opinion
required’’ a ‘‘continuous physical
connection,’’ id. at 751 n.13 (emphasis
added), and focused on evaluating
adjacency between a ‘‘water’’ and a
wetland ‘‘in the sense of possessing a
continuous surface connection that
creates the boundary-drawing problem
we addressed in Riverside Bayview.’’ Id.
at 757. The plurality also noted that its
standard includes a ‘‘physicalconnection requirement’’ between
wetlands and covered waters. Id. at 751
n.13. In other words, the plurality
appeared to be more focused on the
abutting nature rather than the source of
water creating the wetlands at issue in
Riverside Bayview to describe the legal
constructs applicable to adjacent
wetlands, see id. at 747; see also
PO 00000
Frm 00021
Fmt 4702
Sfmt 4702
32235
Webster’s II, New Riverside University
Dictionary (1994) (defining ‘‘abut’’ to
mean ‘‘to border on’’ or ‘‘to touch at one
end or side of something’’), and indeed
agreed with Justice Kennedy and the
Riverside Bayview Court that ‘‘[a]s long
as the wetland is ‘adjacent’ to covered
waters . . . its creation vel non by
inundation is irrelevant.’’ Id. at 751
n.13.13
Because physically disconnected
wetlands do not raise the same
boundary-drawing concerns presented
by actually abutting wetlands, the
plurality determined that the rationale
in Riverside Bayview does not apply to
such features. The plurality stated that
‘‘[w]etlands with only an intermittent,
physically remote hydrologic
connection to ‘waters of the United
States’ do not implicate the boundarydrawing problem of Riverside Bayview,
and thus lack the necessary connection
to covered waters that we described as
a ‘significant nexus’ in SWANCC[.]’’ Id.
at 742. The plurality supported this
position by referring to the Court’s
treatment of isolated waters in SWANCC
as non-jurisdictional. Id. at 726, 741–42
(‘‘[W]e held that ‘nonnavigable, isolated,
intrastate waters’—which, unlike the
wetlands at issue in Riverside Bayview,
did not ‘actually abu[t] on a navigable
waterway,’—were not included as
‘waters of the United States.’ ’’). The
plurality found ‘‘no support for the
inclusion of physically unconnected
wetlands as covered ‘waters’ ’’ based on
Riverside Bayview’s treatment of the
Corps’ definition of adjacent. Id. at 746–
47; see also id. at 746 (‘‘[T]he Corps’
definition of ‘adjacent’ . . . has been
extended beyond reason.’’).
Concurring in the judgment, Justice
Kennedy focused on the ‘‘significant
nexus’’ between the adjacent wetlands
and traditional navigable waters as the
basis for determining whether a wetland
is a water subject to CWA jurisdiction:
‘‘It was the significant nexus between
wetlands and navigable waters . . . that
informed our reading of the [Act] in
Riverside Bayview Homes. Because such
a nexus was lacking with respect to
isolated ponds, [in SWANCC] the Court
held that the plain text of the statute did
not permit the Corps’ action.’’ Id. at 767
(internal quotations and citations
omitted). Justice Kennedy noted that the
wetlands at issue in Riverside Bayview
were ‘‘adjacent to [a] navigable-in-fact
waterway[ ],’’ while the ‘‘ponds and
13 The agencies’ Rapanos Guidance recognizes
the plurality’s ‘‘continuous surface connection’’
does not refer to a continuous surface water
connection. See, e.g., Rapanos Guidance at 7 n.28
(‘‘A continuous surface connection does not require
surface water to be continuously present between
the wetland and the tributary.’’).
E:\FR\FM\12JYP1.SGM
12JYP1
32236
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS1
mudflats’’ considered in SWANCC
‘‘were isolated in the sense of being
unconnected to other waters covered by
the Act.’’ Id. at 765–66. ‘‘Taken together,
these cases establish that in some
instances, as exemplified by Riverside
Bayview, the connection between a
nonnavigable water or wetland and a
navigable water may be so close, or
potentially so close, that the Corps may
deem the water or wetland a ‘navigable
water’ under the Act. In other instances,
as exemplified by SWANCC, there may
be little or no connection. Absent a
significant nexus, jurisdiction under the
Act is lacking.’’ Id. at 767.
According to Justice Kennedy,
whereas the isolated ponds and
mudflats in SWANCC lack the
‘‘significant nexus’’ to navigable waters,
it is the ‘‘conclusive standard for
jurisdiction’’ based on ‘‘a reasonable
inference of ecological interconnection’’
between adjacent wetlands and
navigable-in-fact waters that allows for
their categorical inclusion as waters of
the United States. Id. at 780 (‘‘[T]he
assertion of jurisdiction for those
wetlands [adjacent to navigable-in-fact
waters] is sustainable under the act by
showing adjacency alone.’’). Justice
Kennedy surmised that it may be that
the same rationale ‘‘without any inquiry
beyond adjacency . . . could apply
equally to wetlands adjacent to certain
major tributaries,’’ noting that the Corps
could establish by regulation categories
of tributaries based on volume of flow,
proximity to navigable waters, or other
factors that ‘‘are significant enough that
wetlands adjacent to them are likely, in
the majority of cases, to perform
important functions for an aquatic
system incorporating navigable waters.’’
Id. at 780–81. However, ‘‘[t]he Corps’
existing standard for tributaries’’
provided Justice Kennedy ‘‘no such
assurance’’ to infer the categorical
existence of a requisite nexus between
waters traditionally understood as
navigable and wetlands adjacent to
nonnavigable tributaries. Id. at 781. That
is because:
the breadth of [the tributary] standard—
which seems to leave wide room for
regulation of drains, ditches, and streams
remote from any navigable-in-fact water and
carrying only minor water volumes towards
it—precludes its adoption as the
determinative measure of whether adjacent
wetlands are likely to play an important role
in the integrity of an aquatic system
comprising navigable waters as traditionally
understood. Indeed, in many cases wetlands
adjacent to tributaries covered by this
standard might appear little more related to
navigable-in-fact waters than were the
isolated ponds held to fall beyond the Act’s
scope in SWANCC.
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
Id. at 781–82.
Justice Kennedy stated that, absent
development of a more specific
regulation, the Corps ‘‘must establish a
significant nexus on a case-by-case basis
when it seeks to regulate wetlands based
on adjacency to nonnavigable
tributaries. Given the potential
overbreadth of the Corps’ regulations,
this showing is necessary to avoid
unreasonable applications of the
statute.’’ Id. at 782. Justice Kennedy
explained that ‘‘wetlands possess the
requisite nexus, and thus come within
the statutory phrase ‘navigable waters,’
if the wetlands, either alone or in
combination with similarly situated
lands in the region, significantly affect
the chemical, physical, and biological
integrity of other covered waters more
readily understood as ‘navigable.’ ’’ Id.
at 780. ‘‘Where an adequate nexus is
established for a particular wetland, it
may be permissible, as a matter of
administrative convenience or
necessity, to presume covered status for
other comparable wetlands in the
region.’’ Id. at 782.
In describing this significant nexus
test, Justice Kennedy relied, in part, on
the overall objective of the CWA to
‘‘restore and maintain the chemical,
physical, and biological integrity of the
Nation’s waters.’’ Id. at 779 (quoting 33
U.S.C. 1251(a)). Justice Kennedy also
agreed with the plurality that
‘‘environmental concerns provide no
reason to disregard limits in the
statutory text.’’ Id. at 778. With respect
to wetlands adjacent to nonnavigable
tributaries, Justice Kennedy therefore
determined that ‘‘mere adjacency . . . is
insufficient. A more specific inquiry,
based on the significant-nexus standard,
is . . . necessary.’’ Id. at 786. Not
requiring adjacent wetlands to possess a
significant nexus with navigable waters,
Justice Kennedy noted, would allow a
finding of jurisdiction ‘‘whenever
wetlands lie alongside a ditch or drain,
however remote and insubstantial, that
eventually may flow into traditional
navigable waters. The deference owed
the Corps’ interpretation of the statute
does not extend so far.’’ Id. at 778–79.
Based on the agencies’ review of this
Supreme Court precedent, although the
plurality and Justice Kennedy
established different standards to
determine the jurisdictional status of
wetlands adjacent to nonnavigable
tributaries, they both appear to agree in
principle that the determination must be
made using a two-part test that
considers: (1) The proximity of the
wetland to the tributary; and (2) the
status of the tributary with respect to
downstream traditional navigable
waters. The plurality and Justice
PO 00000
Frm 00022
Fmt 4702
Sfmt 4702
Kennedy also agree that the proximity
between the wetland and the tributary
must be close. The plurality refers to
that proximity as a ‘‘continuous surface
connection’’ or ‘‘continuous physical
connection,’’ as demonstrated in
Riverside Bayview. Id. at 742, 751 n.13.
Justice Kennedy recognized that ‘‘the
connection between a nonnavigable
water or wetland and a navigable water
may be so close, or potentially so close,
that the Corps may deem the water or
wetland a ‘navigable water’ under the
Act.’’ Id. at 767. The second part of the
two-part tests established by the
plurality and Justice Kennedy is
addressed in the next section.
b. Tributaries
The definition of tributaries was not
addressed in either Riverside Bayview or
SWANCC. And while the focus of
Rapanos was on whether the Corps
could regulate wetlands adjacent to
nonnavigable waters, the plurality and
concurring opinions provide some
guidance on the regulatory status of
tributaries to navigable-in-fact waters.
The plurality and Justice Kennedy
both recognized that the jurisdictional
scope of the CWA is not restricted to
traditional navigable waters. See id. at
731 (plurality) (‘‘[T]he Act’s term
‘navigable waters’ includes something
more than traditional navigable
waters.’’); id. at 767 (Justice Kennedy)
(‘‘Congress intended to regulate at least
some waters that are not navigable in
the traditional sense.’’). Both also agree
that federal authority under the Act is
not without limit. See id. at 731–32
(plurality) (‘‘[T]he waters of the United
States . . . cannot bear the expansive
meaning that the Corps would give it.’’);
id. at 778–79 (Justice Kennedy) (‘‘The
deference owed to the Corps’
interpretation of the statute does not
extend’’ to ‘‘wetlands’’ which ‘‘lie
alongside a ditch or drain, however
remote or insubstantial, that eventually
may flow into traditional navigable
waters.’’).
With respect to tributaries
specifically, both the plurality and
Justice Kennedy focus in large part on
a tributary’s contribution of flow to, and
connection with, traditional navigable
waters. The plurality would include as
waters of the United States ‘‘only
relatively permanent, standing or
flowing bodies of water’’ and would
define such ‘‘waters’’ as including
streams, rivers, oceans, lakes and other
bodies of waters that form geographical
features, noting that all such ‘‘terms
connote continuously present, fixed
bodies of water . . . .’’ Id. at 732–33,
739. On the other hand, the plurality
would likely exclude ephemeral streams
E:\FR\FM\12JYP1.SGM
12JYP1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS1
and related features. Id. at 733–34, 739,
741. Justice Kennedy would likely
exclude some streams considered
jurisdictional under the plurality’s test.
Id. at 769 (noting that under the
plurality’s test, ‘‘[t]he merest trickle, if
continuous, would count as a ‘water’
subject to federal regulation, while
torrents thundering at irregular intervals
through otherwise dry channels would
not’’).
In addition, both the plurality and
Justice Kennedy would likely include
some intermittent streams as waters of
the United States. See id. at 732–33 &
n.5 (plurality); id. at 769–70 (Justice
Kennedy). The plurality noted that its
reference to ‘‘relatively permanent’’
waters did ‘‘not necessarily exclude
streams, rivers, or lakes that might dry
up in extraordinary circumstances, such
as drought,’’ or ‘‘seasonal rivers, which
contain continuous flow during some
months of the year but no flow during
dry months . . . .’’ Id. at 732 n.5
(emphasis in original). However, neither
the plurality nor Justice Kennedy
defined with precision where to draw
the line. Nevertheless, the plurality
provided that ‘‘navigable waters’’ must
have ‘‘at bare minimum, the ordinary
presence of water,’’ id. at 734, and
Justice Kennedy noted that the Corps
can identify by regulation categories of
tributaries based on volume of flow,
proximity to navigable waters, or other
factors that ‘‘are significant enough that
wetlands adjacent to them are likely, in
the majority of cases, to perform
important functions for an aquatic
system incorporating navigable waters.’’
Id. at 780–81. And both the plurality
and Justice Kennedy agreed that the
Corps’ assertion of jurisdiction over the
wetlands adjacent to the ‘‘drains,
ditches, and streams remote from any
navigable-in-fact water,’’ id. at 781
(Kennedy), at issue in Rapanos raised
significant jurisdictional questions. Id.
at 737–38 (plurality); id. at 781–82
(Kennedy).
3. Principles and Considerations
From this legal foundation, a few
important principles emerge from which
the agencies can evaluate their
authorities. First, the power conferred
on the agencies to regulate the waters of
the United States is grounded in
Congress’ commerce power over
navigation. The agencies can choose to
regulate beyond waters more
traditionally understood as navigable
given the broad purposes of the CWA,
including some tributaries to those
traditional navigable waters, but must
provide a reasonable basis grounded in
the language and structure of the Act for
determining the extent of jurisdiction.
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
The agencies also can choose to regulate
wetlands adjacent to the traditional
navigable waters and some tributaries, if
the wetlands are in close proximity to
the tributaries, such as in the
transitional zone between open waters
and dry land. In the agencies’ view, it
would not be consistent with Justice
Kennedy’s Rapanos opinion or the
Rapanos plurality opinion to regulate
wetlands adjacent to all tributaries, no
matter how small or remote from
navigable water. The Court’s opinion in
SWANCC also calls into serious
question the agencies’ authority to
regulate nonnavigable, isolated,
intrastate waters that lack a sufficient
connection to traditional navigable
waters, and suggests that the agencies
should avoid regulatory interpretations
of the CWA that raise constitutional
questions regarding the scope of their
statutory authority. The agencies can,
however, regulate certain waters by
category, which could improve
regulatory predictability and certainty
and ease administrative burden while
still effectuating the purposes of the Act.
In developing a clear and predictable
regulatory framework, the agencies also
must respect the primary
responsibilities and rights of States and
Tribes to regulate their land and water
resources. See 33 U.S.C. 1251(b), 1370.
The oft-quoted objective of the CWA to
‘‘restore and maintain the chemical,
physical, and biological integrity of the
Nation’s waters,’’ id. at 1251(a), must be
implemented in a manner consistent
with Congress’ policy directives to the
agencies. The Supreme Court long ago
recognized the distinction between
federal waters traditionally understood
as navigable and waters ‘‘subject to the
control of the States.’’ The Daniel Ball,
77 U.S. (10 Wall.) 557, 564–65 (1871).
Over a century later, the Supreme Court
in SWANCC reaffirmed the State’s
‘‘traditional and primary power over
land and water use.’’ 531 U.S. at 174;
accord Rapanos, 547 U.S. at 738 (Scalia,
J., plurality opinion). Ensuring that
States and Tribes retain authority over
their land and water resources pursuant
to CWA section 101(b) and section 510
helps carry out the overall objective of
the CWA, and ensures that the agencies
are giving full effect and consideration
to the entire structure and function of
the Act, including Congress’ intent as
reflected in dozens of non-regulatory
grant, research, nonpoint source,
groundwater, and watershed planning
programs to assist the states in
controlling pollution in the nation’s
waters, not just its navigable waters.
Further, the agencies are cognizant
that the ‘‘Clean Water Act imposes
substantial criminal and civil penalties
PO 00000
Frm 00023
Fmt 4702
Sfmt 4702
32237
for discharging any pollutant into
waters covered by the Act without a
permit. . . .’’ U.S. Army Corps of Eng’rs
v. Hawkes Co., 136 S. Ct. 1807, 1812
(2016); see also Sackett v. EPA, 566 U.S.
120, 132–33 (2012) (Alito, J.,
concurring) (‘‘[T]he combination of the
uncertain reach of the Clean Water Act
and the draconian penalties imposed for
the sort of violations alleged in this case
still leaves most property owners with
little practical alternative but to dance
to the EPA’s tune.’’). As the Chief Justice
observed in Hawkes, ‘‘[i]t is often
difficult to determine whether a
particular piece of property contains
waters of the United States, but there are
important consequences if it does.’’ 136
S. Ct. at 1812; see also id. at 1816–17
(Kennedy, J., concurring) (‘‘[T]he reach
and systemic consequences of the Clean
Water Act remain a cause for concern,’’
and the Act ‘‘continues to raise
troubling questions regarding the
Government’s power to cast doubt on
the full use and enjoyment of private
property throughout the Nation.’’).
Given the significant civil and criminal
penalties associated with the CWA, it is
important for the agencies to promote
regulatory certainty while striving to
provide fair and predictable notice of
the limits of federal jurisdiction. See,
e.g., Sessions v. Dimaya, 138 S. Ct.
1204, 1223–25 (2018) (Gorsuch, J.,
concurring in part and concurring in the
judgment) (characterizing fair notice as
possibly the most fundamental of the
protections provided by the
Constitution’s guarantee of due process,
and stating that vague laws are an
exercise of ‘‘arbitrary power . . . leaving
the people in the dark about what the
law demands and allowing prosecutors
and courts to make it up’’).
C. Proposed Reasons for Repeal
The agencies’ proposal is based on
our view that regulatory certainty may
be best served by repealing the 2015
Rule and recodifying the preexisting
scope of CWA jurisdiction. Specifically,
the agencies are concerned that rather
than achieving their stated objectives of
increasing regulatory predictability and
consistency under the CWA, retaining
the 2015 Rule creates significant
uncertainty for agency staff, regulated
entities, and the public, which is
compounded by court decisions that
have increased litigation risk and cast
doubt on the legal viability of the rule.
To provide for greater regulatory
certainty, the agencies propose to revert
to the pre-2015 regulations, a regulatory
regime that is more familiar to and
better-understood by the agencies,
States, Tribes, local governments,
regulated entities, and the public.
E:\FR\FM\12JYP1.SGM
12JYP1
32238
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS1
Further, as a result of the agencies’
review and reconsideration of their
statutory authority and in light of the
court rulings against the 2015 Rule that
have suggested that the agencies’
interpretation of the ‘‘significant nexus’’
standard as applied in the 2015 Rule
was expansive and does not comport
with and accurately implement the
limits on jurisdiction reflected in the
CWA and decisions of the Supreme
Court, the agencies are also concerned
that the 2015 Rule lacks sufficient
statutory basis. The agencies are
proposing to conclude in the alternative
that, at a minimum, the interpretation of
the statute adopted in the 2015 Rule is
not compelled, and a different policy
balance can be appropriate.
Considering the substantial
uncertainty associated with the 2015
Rule resulting from its legal challenges,
and the substantial experience the
agencies and others possess with the
longstanding regulatory framework
currently being administered by the
agencies, the agencies conclude that
clarity, predictability, and consistency
may be best served by repealing the
2015 Rule and thus are proposing to do
so. The agencies may still propose
changes to the definition of ‘‘waters of
the United States’’ in a future
rulemaking.
Further, the agencies are concerned
that certain findings and assumptions
supporting adoption of the 2015 Rule
were not correct, and that these
conclusions, if erroneous, may
separately justify repeal of the 2015
Rule. The agencies are concerned and
seek comment on whether the 2015 Rule
significantly expanded jurisdiction over
the preexisting regulatory program, as
implemented by the agencies, and
whether that expansion altered State,
tribal, and local government
relationships in implementing CWA
programs. The agencies therefore
propose to repeal the 2015 Rule in order
to restore those preexisting relationships
and better serve the balance of
authorities envisioned in CWA section
101(b).
1. The 2015 Rule Fails To Achieve
Regulatory Certainty
The agencies are proposing to repeal
the 2015 Rule because it does not
appear to achieve one of its primary
goals of providing regulatory certainty
and consistency. When promulgating
the 2015 Rule, the agencies concluded
the rule would ‘‘increase CWA program
predictability and consistency by
clarifying the scope of ‘waters of the
United States’ protected under the Act.’’
80 FR 37054. The agencies stated that
the 2015 ‘‘rule reflect[ed] the judgment
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
of the agencies in balancing the science,
the agencies’ expertise, and the
regulatory goals of providing clarity to
the public while protecting the
environment and public health,
consistent with the law.’’ Id. at 37065.
Since then, developments in the
litigation against the 2015 Rule and
concerns raised since the rule’s
promulgation indicate that maintaining
the 2015 Rule would produce
substantial uncertainty and confusion
among state and federal regulators and
enforcement officials, the regulated
public, and other interested
stakeholders. To provide for greater
regulatory certainty, the agencies
propose to repeal the 2015 Rule and
restore a longstanding regulatory
framework that is more familiar to and
better-understood by the agencies, our
co-regulators, and regulated entities,
until the agencies propose and finalize
a replacement definition.
a. Litigation to Date
As noted above, the 2015 Rule has
been challenged in legal actions across
multiple district courts, in which
plaintiffs have raised a number of
substantive and procedural claims
against the rule. Petitions for review
were also filed in multiple courts of
appeals and were consolidated in the
U.S. Court of Appeals for the Sixth
Circuit. To date, all three of the courts
that substantively have considered the
2015 Rule—the Sixth Circuit, the
District of North Dakota, and the
Southern District of Georgia—have
found that petitioners seeking to
overturn the rule are likely to succeed
on the merits of at least some of their
claims against the rule.
In the Sixth Circuit, the court granted
a nationwide stay of the 2015 Rule after
finding, among other factors, that the
petitioners showed a ‘‘substantial
possibility of success on the merits’’ of
their claims against the 2015 Rule,
including claims that the rule was
inconsistent with Justice Kennedy’s
opinion in Rapanos and that the rule’s
distance limitations were not
substantiated by specific scientific
support. In re EPA, 803 F.3d 804, 807
(6th Cir. 2015).
The District of North Dakota made
similar findings in issuing a preliminary
injunction against the 2015 Rule. There,
the court found that the plaintiff-States
are ‘‘likely to succeed on the merits of
their claim’’ that the rule violated the
congressional grant of authority to the
agencies under the CWA because the
rule ‘‘likely fails’’ to meet Justice
Kennedy’s significant nexus test. North
Dakota v. EPA, 127 F. Supp. 3d 1047,
1055–56 (D.N.D. 2015). The court also
PO 00000
Frm 00024
Fmt 4702
Sfmt 4702
found that the plaintiff-States have a fair
chance of success on the merits of their
procedural claims that the agencies
failed to comply with APA requirements
in promulgating the rule. Id. at 1056–57.
The Southern District of Georgia also
preliminarily enjoined the 2015 Rule,
holding that the State plaintiffs had
demonstrated ‘‘a likelihood of success
on their claims that the [2015] WOTUS
Rule was promulgated in violation of
the CWA and the APA.’’ Georgia v.
Pruitt, No. 15–cv–79, 2018 U.S. Dist.
LEXIS 97223, at *14 (S.D. Ga. June 8,
2018) (‘‘Georgia’’) (granting preliminary
injunction). The court determined that
the 2015 Rule likely failed to meet the
standard expounded in SWANCC and
Rapanos, and that the rule was likely
fatally defective because it ‘‘allows the
Agencies to regulate waters that do not
bear any effect on the ‘chemical,
physical, and biological integrity’ of any
navigable-in-fact water.’’ Id. at *17–18.
The court also held that the plaintiffs
‘‘have demonstrated a likelihood of
success on both of their claims under
the APA’’ that the 2015 Rule ‘‘is
arbitrary and capricious’’ and ‘‘that the
final rule is not a logical outgrowth of
the proposed rule.’’ Id. at *18.
These rulings indicate that
substantive or procedural challenges to
the 2015 Rule are likely to be successful,
particularly claims that the rule is not
authorized under the CWA and was
promulgated in violation of the APA. A
successful challenge to the 2015 Rule
could result in a court order vacating
the rule in all or part, in all or part of
the country, and potentially resulting in
different regulatory regimes being in
effect in different parts of the country,
which would likely lead to substantial
regulatory confusion, uncertainty, and
inconsistency.
Notably, the agencies face an
increasing risk of a court order vacating
the 2015 Rule. The District of North
Dakota is proceeding to hear the merits
of the plaintiff-States’ claims against the
2015 Rule in that case, and the plaintiffStates in the Southern District of
Georgia have requested a similar meritsbriefing schedule. See Scheduling
Order, North Dakota v. EPA, No. 15–cv–
59 (D.N.D. May 2, 2018); Response to
Defendants’ Updated Response to
Plaintiff States’ Motion for Preliminary
Injunction at 11–12, Georgia, No. 15–
cv–79 (S.D. Ga. May 29, 2018). Although
the applicability date rule ensures that
the 2015 Rule will not go into effect
until February 6, 2020, the prospect of
a court order vacating the 2015 Rule
creates additional regulatory
uncertainty.
E:\FR\FM\12JYP1.SGM
12JYP1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS1
b. Stakeholder Confusion Regarding the
Scope of the 2015 Rule and Extent of
Federal CWA Jurisdiction
Statements made in the litigation
against the 2015 Rule and in comments
regarding the 2015 Rule indicate that
there has been substantial disagreement
and confusion as to the scope of the
2015 Rule and the extent of federal
CWA jurisdiction more broadly. In the
Sixth Circuit, for example, State
petitioners asserted that the 2015 Rule
covers waters outside the scope of the
CWA pursuant to SWANCC and
Rapanos and ‘‘extends jurisdiction to
virtually every potentially wet area of
the country.’’ 14 Industry petitioners
contended that the rule’s ‘‘uncertain
standards are impossible for the public
to understand or the agencies to apply
consistently.’’ 15 In contrast,
environmental petitioners found that
SWANCC and Rapanos led to
widespread confusion over the scope of
the CWA and that the pre-2015
regulatory regime could theoretically
apply to ‘‘almost all waters and
wetlands across the country.’’ 16 These
petitioners asserted that the 2015 Rule
violated the CWA by failing to cover
certain waters, including waters that
may possess a ‘‘significant nexus’’ to
traditional navigable waters.17 Whether
such comments are accurate or not, they
indicate continued widespread
disagreement and confusion over the
meaning of the 2015 Rule and extent of
jurisdiction it entails.
Some comments received on the July
27, 2017 NPRM also demonstrate
continued confusion over the scope and
various provisions of the 2015 Rule. For
example, one commenter found that the
rule’s definitions of ‘‘adjacent,’’
‘‘significant nexus’’ and other key terms
lack clarity and thus lead to regulatory
uncertainty.18 This same commenter
contended that the rule could raise
constitutional concerns related to the
appropriate scope of federal authority
and encouraged the agencies to
undertake a new rulemaking to more
clearly articulate the extent of federal
CWA authority. Another commenter
echoed these concerns, alleging that the
2015 Rule resulted in a ‘‘vague and
14 Opening Brief of State Petitioners at 15, 61, In
re EPA, No. 15–3751 (6th Cir. Nov. 1, 2016).
15 Opening Brief for the Business & Municipal
Petitioners, In re EPA, No. 15–3751 (6th Cir. Nov.
1, 2016).
16 Brief of Conservation Groups at 11, In re EPA,
No. 15–3751 (6th Cir. Nov. 1, 2016).
17 See, e.g., id. at 22, 43.
18 See comments submitted by Oregon
Cattlemen’s Association (July 27, 2017) (Docket ID:
EPA–HQ–OW–2017–0203–0039), available at
https://www.regulations.gov/document?D=EPA-HQOW-2017-0203-0039.
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
indecipherable explanation’’ of the
definition of ‘‘waters of the United
States’’ that has caused confusion and
uncertainty as to the extent of
jurisdiction that can be asserted by
federal, state and local authorities.19
The agencies have received comments
from numerous other individuals and
entities expressing confusion and
concern about the extent of federal CWA
jurisdiction asserted under the 2015
Rule, and the agencies are continuing to
review and consider these comments.
c. Impact on State Programs
Like other commenters on the
proposal to the 2015 Rule, some States
expressed confusion regarding the scope
of the proposal and, uniquely, the
potential impacts of that uncertainty on
States’ ability to implement CWA
programs. Though some States have
stated that the 2015 Rule ‘‘more clearly
identifies what types of waters would be
considered jurisdictional,’’ 20 others
assert that the extent of CWA
jurisdiction under the rule remained
‘‘fuzzy’’ and unclear.21 Certain States
noted that this uncertainty could ‘‘create
time delays in obtaining permits which
previously were not required’’ 22 and
‘‘result in increased costs to the State
and other private and public interests,
along with decreased regulatory
efficiency.’’ 23 One State suggested that
even if the 2015 Rule established greater
regulatory clarity, the rule’s case-by-case
determinations could result in
permitting delays when a jurisdictional
determination is required.24
Similar concerns have been raised in
the litigation challenging the 2015 Rule.
19 See comments submitted by Skagit County
Dike, Drainage and Irrigation District No. 12 and
Skagit County Dike District No. 1 (Sept. 27, 2017)
(Docket ID: EPA–HQ–OW–2017–0203–11709),
available at https://www.regulations.gov/
document?D=EPA-HQ-OW-2017-0203-11709.
20 See, e.g., comments submitted by State of
Washington, Department of Ecology (Nov. 13, 2014)
(Docket ID: EPA–HQ–OW–2011–0880–13957),
available at https://www.regulations.gov/
document?D=EPA-HQ-OW-2011-0880-13957.
21 See, e.g., comments submitted by State of
Oklahoma (Nov. 14, 2014) (Docket ID: EPA–HQ–
OW–2011–0880–14625), available at https://
www.regulations.gov/document?D=EPA-HQ-OW2011-0880-14625; see also comments submitted by
National Association of Counties (Nov. 14, 2014)
(Docket ID: EPA–HQ–OW–2011–0880–15081),
available at https://www.regulations.gov/
document?D=EPA-HQ-OW-2011-0880-15081.
22 See comments submitted by State of Utah,
Governor’s Office (Nov. 14, 2014) (Docket ID: EPA–
HQ–OW–2011–0880–16534), available at https://
www.regulations.gov/document?D=EPA-HQ-OW2011-0880-16534.
23 See comments submitted by Wyoming
Department of Environmental Quality (Nov. 14,
2014) (Docket ID: EPA–HQ–OW–2011–0880–
16393), available at https://www.regulations.gov/
document?D=EPA-HQ-OW-2011-0880-16393.
24 See comments submitted by State of
Washington, Department of Ecology, supra note 20.
PO 00000
Frm 00025
Fmt 4702
Sfmt 4702
32239
For example, in the Southern District of
Georgia, the State of Indiana has
asserted that the 2015 Rule’s definition
of ‘‘waters of the United States’’ is
‘‘vague’’ and that the rule ‘‘imposes . . .
unclear regulatory requirements that
will result in an inefficient use of
limited regulatory resources.’’ 25 In
particular, the State asserts concerns
that implementing the 2015 Rule will
divert resources by ‘‘[d]emanding the
time and attention of regulators to make
the now-difficult determination of when
and whether a feature is a WOTUS’’ and
‘‘[g]enerating unnecessary
administrative appeals and lawsuits to
resolve jurisdictional disputes.’’ 26
d. Agency Experience With the 1986
Regulations
The agencies have been implementing
the pre-2015 regulations (hereinafter
referred to as the ‘‘1986 regulations’’)
almost uninterruptedly since 1986.
Corps staff are trained on making
jurisdictional determinations in the
field and through national webinars and
classroom or field-based trainings. From
June 2007 through June 2018, the Corps
issued 241,857 27 approved
jurisdictional determinations (AJDs)
under their 1986 regulations, as
informed by applicable Supreme Court
precedent and the agencies’ guidance.
Through over 30 years of experience,
the agencies have developed significant
technical expertise with the 1986
regulations and have had the
opportunity to refine the application of
the rules through guidance and the
agencies’ experience and federal court
decisions. Indeed, the 1986 regulations
have been the subject of a wide body of
case law, including three significant
U.S. Supreme Court decisions 28 and
dozens of cases in federal district courts
and courts of appeals that have
addressed the scope of analysis
required. Since 1986, the agencies have
issued numerous memoranda, guidance,
and question-and-answer documents
explaining and clarifying these
regulations.29
Given the longstanding nature and
history of the 1986 regulations, this
25 Statement of Bruno L. Pigott, Georgia, No. 15–
cv–79 (S.D. Ga. July 21, 2015).
26 Id.
27 U.S. Army Corps of Engineers, OMBIL
Regulatory Module (June 5, 2018).
28 Riverside Bayview, 474 U.S. 121 (1985);
SWANCC, 531 U.S. 159 (2001); Rapanos, 547 U.S.
715 (2006).
29 The Corps maintains many of these documents
on its public website, available at https://
www.usace.army.mil/Missions/Civil-Works/
Regulatory-Program-and-Permits/RelatedResources/CWA-Guidance/. The EPA maintains
many of these documents as well; see also https://
www.epa.gov/wotus-rule/about-waters-unitedstates.
E:\FR\FM\12JYP1.SGM
12JYP1
32240
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS1
regulatory regime is more familiar to the
agencies, co-regulators, and regulated
entities. For this reason, as between the
2015 Rule and the 1986 regulations, the
1986 regulations (as informed by
applicable Supreme Court precedent
and the agencies’ guidance) would
appear to provide for greater regulatory
predictability, consistency, and
certainty, and the agencies seek public
comment on this issue. Though the
agencies acknowledge that the 1986
regulations have posed certain
implementation difficulties and were
the subject of court decisions that had
the effect of narrowing their scope, the
longstanding nature of the regulatory
regime—coupled with the agencies’ and
others’ extensive experience with the
regulatory scheme—make it preferable
to the regulatory uncertainty posed by
the 2015 Rule.
2. The 2015 Rule May Exceed the
Agencies’ Authority Under the CWA
The agencies are concerned that the
2015 Rule exceeded EPA’s authority
under the CWA by adopting an
expansive interpretation of the
‘‘significant nexus’’ standard that covers
waters outside the scope of the Act and
stretches the significant nexus standard
so far as to be inconsistent with
important aspects of Justice Kennedy’s
opinion in Rapanos, even though this
opinion was identified as the basis for
the significant nexus standard
articulated in the 2015 Rule. In
particular, the agencies are concerned
that the 2015 Rule took an expansive
reading of Justice Kennedy’s significant
nexus test and exceeds the agencies’
authority under the Act.
As expounded in Rapanos, Justice
Kennedy’s significant nexus standard is
a test intended to limit federal
jurisdiction due to the breadth of the
Corps’ then-existing standard for
tributaries and in order to ‘‘prevent[ ]
problematic applications of the statute.’’
547 U.S. at 783. ‘‘Given the potential
overbreadth of the Corps’ [1986]
regulations,’’ Justice Kennedy found
that the showing of a significant nexus
‘‘is necessary to avoid unreasonable
applications of the statute.’’ Id. at 782.
The agencies are concerned, upon
further consideration of the 2015 Rule,
that the significant nexus standard
articulated in that rule could lead to
similar unreasonable applications of the
CWA.
Justice Kennedy wrote that adjacent
‘‘wetlands possess the requisite nexus,
and thus come within the statutory
phrase ‘navigable waters,’ if the
wetlands, either alone or in combination
with similarly situated lands in the
region, significantly affect the chemical,
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
physical, and biological integrity of
other covered waters more readily
understood as ‘navigable.’ ’’ 547 U.S. at
780. The opinion did not expressly
define the relevant ‘‘region’’ or what
was meant by ‘‘similarly situated,’’ but
it is reasonable to presume that that the
Justice did not mean ‘‘similarly
situated’’ to be synonymous with ‘‘all’’
waters in a region. The agencies’
Rapanos Guidance, for example, had
interpreted the term ‘‘similarly situated’’
more narrowly to ‘‘include all wetlands
adjacent to the same tributary.’’ 30 ‘‘A
tributary . . . is the entire reach of the
stream that is of the same order (i.e.,
from the point of confluence, where two
lower order streams meet to form the
tributary, downstream to the point such
tributary enters a higher order
stream).’’ 31 Thus, under the agencies’
2008 guidance, ‘‘where evaluating
significant nexus for an adjacent
wetland, the agencies will consider the
flow characteristics and functions
performed by the tributary to which the
wetland is adjacent along with the
functions performed by the wetland and
all other wetlands adjacent to that
tributary. This approach reflects the
agencies’ interpretation of Justice
Kennedy’s term ‘similarly situated’ to
include all wetlands adjacent to the
same tributary. . . . Interpreting the
phrase ‘similarly situated’ to include all
wetlands adjacent to the same tributary
is reasonable because such wetlands are
physically located in a like manner (i.e.,
lying adjacent to the same tributary).’’ 32
The 2015 Rule departed from this
interpretation of ‘‘similarly situated’’
wetlands in a ‘‘region,’’ including
applying it to other waters, not only
wetlands, that were not already
categorically jurisdictional as tributaries
or adjacent waters. The proposed rule,
for example, stated that ‘‘[o]ther waters,
including wetlands, are similarly
situated when they perform similar
functions and are located sufficiently
close together or sufficiently close to a
‘water of the United States’ so that they
can be evaluated as a single landscape
unit with regard to their effect on the
chemical, physical, or biological
integrity of a [primary] water.’’ 79 FR
22263 (April 21, 2014). The 2015 Rule
took it a step further and stated that ‘‘the
downstream health of larger
downstream waters is directly related to
the aggregate health of waters located
upstream, including waters such as
wetlands that may not be hydrologically
connected but function together to
ameliorate the potential impacts of
PO 00000
30 Rapanos
31 Id.
Guidance at 8.
at 10.
32 Id.
Frm 00026
Fmt 4702
Sfmt 4702
flooding and pollutant contamination
from affecting downstream waters.’’ 80
FR 37063. The 2015 Rule thus
concluded that ‘‘[a] water has a
significant nexus when any single
function or combination of functions
performed by the water, alone or
together with similarly situated waters
in the region, contributes significantly
to the chemical, physical, or biological
integrity of the nearest [primary] water.’’
Id. at 37106. The ‘‘term ‘in the region’
means the watershed that drains to the
nearest [primary] water.’’ Id.
An examination of all of the waters in
‘‘the watershed’’ of ‘‘the nearest
[primary] water’’ under the 2015 Rule
therefore may have materially
broadened the scope of aggregation that
determines jurisdiction in a ‘‘significant
nexus’’ inquiry for waters not
categorically jurisdictional from the
focus in the proposed rule on waters
‘‘located sufficiently close together or
sufficiently close to a ‘water of the
United States’ so that they can be
evaluated as a single landscape unit.’’
79 FR 22263. The agencies in finalizing
the rule viewed the scientific literature
through a broader lens as ‘‘the effect of
landscape position on the strength of
the connection to the nearest ‘water of
the United States,’ ’’ and that ‘‘relevant
factors influencing chemical
connectivity include hydrologic
connectivity . . . , surrounding land
use and land cover, the landscape
setting, and deposition of chemical
constituents (e.g., acidic deposition).’’
80 FR 37094. The agencies are
concerned that this important change in
the interpretation of ‘‘similarly situated
waters’’ from the proposed 2015 Rule
and the 2008 Rapanos Guidance may
not be explainable by the scientific
literature, including the Connectivity
Report 33 cited throughout the preamble
to the 2015 Rule, in light of the
agencies’ view at the time that ‘‘[t]he
scientific literature does not use the
term ‘significant’ as it is defined in a
legal context.’’ 80 FR 37062. The
agencies solicit comment on whether
the agencies’ justification for the 2015
Rule’s interpretation of ‘‘similarly
situated’’ with reference to an entire
watershed for purposes of waters not
categorically jurisdictional relied on the
scientific literature without due regard
for the restraints imposed by the statute
and case law, and whether this
interpretation of Justice Kennedy’s
significant nexus standard is a reason, at
a minimum because of the legal risk it
33 U.S. EPA. Connectivity of Streams and
Wetlands to Downstream Waters: A Review and
Synthesis of the Scientific Evidence (Jan. 2015)
(EPA/600/R–14/475F).
E:\FR\FM\12JYP1.SGM
12JYP1
amozie on DSK3GDR082PROD with PROPOSALS1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
creates, to repeal the 2015 Rule. As
discussed, the 2015 Rule included
distance-based limitations that were not
specified in the proposal. In light of
this, the agencies also solicit comment
on whether these distance-based
limitations mitigated or affected the
agencies’ change in interpretation of
similarly situated waters in the 2015
Rule.
The agencies are also concerned that
the 2015 Rule does not give sufficient
effect to the term ‘‘navigable’’ in the
CWA. See South Carolina v. Catawba
Indian Tribe, 476 U.S. 498, 510 n.22
(1986) (‘‘It is our duty to give effect, if
possible, to every clause and word of a
statute[.]’’ (quoting United States v.
Menasche, 348 U.S. 528, 538–39 (1955))
(internal quotation marks omitted)).
Justice Kennedy’s concurring opinion in
Rapanos, on which the 2015 Rule relied
heavily for its basis, recognized the term
‘‘navigable’’ must have ‘‘some
importance’’ and, if that word has any
meaning, the CWA cannot be
interpreted to ‘‘permit federal regulation
whenever wetlands lie along a ditch or
drain, however remote and
insubstantial, that eventually may flow
into traditional navigable waters.’’
Rapanos, 547 U.S. at 778–79 (Kennedy,
J., concurring in judgment). When
interpreting the Rapanos decision and
its application for determining the scope
of CWA jurisdiction in 2008, the
agencies wrote ‘‘[p]rincipal
considerations when evaluating
significant nexus include the volume,
duration, and frequency of the flow of
water in the tributary and the proximity
of the tributary to a traditional navigable
water.’’ 34 The agencies are considering
whether the 2015 Rule’s definitions of
‘‘tributary’’ and ‘‘adjacent’’ were so
broad as to eliminate consideration of
these factors in a manner consistent
with Justice Kennedy’s opinion and the
CWA.
The 2015 Rule stated that the agencies
assessed ‘‘the significance of the nexus’’
to navigable water ‘‘in terms of the
CWA’s objective to ‘restore and
maintain the chemical, physical, and
biological integrity of the Nation’s
waters.’ ’’ 80 FR 37056 (quoting 33
U.S.C. 1251(a)). Under the 2015 Rule, a
significant nexus may be established by
an individual water or by collectively
considering ‘‘similarly situated’’ waters
across a ‘‘region,’’ defined as ‘‘the
watershed that drains to the nearest
[primary] water identified.’’ Id. at
37106. The agencies are now concerned
that this broad reliance on biological
functions, such as the provision of life
cycle dependent aquatic habitat, may
34 Rapanos
Guidance at 10.
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
not comport with the CWA and Justice
Kennedy’s statement in Rapanos that
‘‘environmental concerns provide no
reason to disregard limits in the
statutory text.’’ See 547 U.S. at 778. In
particular, the agencies are mindful that
the Southern District of Georgia’s
preliminary injunction of the 2015 Rule
was based in part on the court’s holding
that the 2015 Rule likely is flawed for
the same reason as the Migratory Bird
Rule: ‘‘the WOTUS Rule asserts that,
standing alone, a significant ‘biological
effect’—including an effect on ‘life cycle
dependent aquatic habitat[s]’—would
place a water within the CWA’s
jurisdiction. Thus, this WOTUS Rule
will likely fail for the same reason that
the rule in SWANCC failed.’’ Georgia,
2018 U.S. Dist. LEXIS 97223, at *18
(quoting 33 CFR 328.3(c)(5)). The
agencies solicit comment on whether
the 2015 Rule is flawed in the same
manner as the Migratory Bird Rule,
including whether the 2015 Rule raises
significant constitutional questions
similar to the questions raised by the
Migratory Bird Rule as discussed by the
Supreme Court in SWANCC.
Moreover, the 2015 Rule relied on a
scientific literature review—the
Connectivity Report—to support
exerting federal jurisdiction over certain
waters based on nine enumerated
functions. See 80 FR 37065 (‘‘the
agencies interpret the scope of ‘waters of
the United States’ protected under the
CWA based on the information and
conclusions in the [Connectivity]
Report’’). The report notes that
connectivity ‘‘occur[s] on a continuum
or gradient from highly connected to
highly isolated,’’ and ‘‘[t]hese variations
in the degree of connectivity are a
critical consideration to the ecological
integrity and sustainability of
downstream waters.’’ Id. at 37057. In its
review of a draft version of the
Connectivity Report, EPA’s Science
Advisory Board (‘‘SAB’’) noted,
‘‘[s]patial proximity is one important
determinant of the magnitude,
frequency and duration of connections
between wetlands and streams that will
ultimately influence the fluxes of water,
materials and biota between wetlands
and downstream waters.’’ 35 ‘‘Wetlands
that are situated alongside rivers and
their tributaries are likely to be
connected to those waters through the
exchange of water, biota and chemicals.
As the distance between a wetland and
a flowing water system increases, these
connections become less obvious.’’ 36
35 Science Advisory Board, U.S. EPA. Review of
the EPA Water Body Connectivity Report at 60 (Oct.
17, 2014).
36 Id. at 55.
PO 00000
Frm 00027
Fmt 4702
Sfmt 4702
32241
The Connectivity Report also recognizes
that ‘‘areas that are closer to rivers and
streams have a higher probability of
being connected than areas farther
away.’’ Connectivity Report at ES–4.
Yet, the SAB observed that ‘‘[t]he
Report is a science, not policy,
document that was written to
summarize the current understanding of
connectivity or isolation of streams and
wetlands relative to large water bodies
such as rivers, lakes, estuaries, and
oceans.’’ 37 ‘‘The SAB also
recommended that the agencies clarify
in the preamble to the final rule that
‘significant nexus’ is a legal term, not a
scientific one.’’ 80 FR 37065. And in
issuing the 2015 Rule, the agencies
stated, ‘‘the science does not provide a
precise point along the continuum at
which waters provide only speculative
or insubstantial functions to
downstream waters.’’ Id. at 37090.
The agencies now believe that they
previously placed too much emphasis
on the information and conclusions of
the Connectivity Report when setting
jurisdictional lines in the 2015 Rule,
relying on its environmental
conclusions in place of interpreting the
statutory text and other indicia of
Congressional intent to ensure that the
agencies’ regulations comport with their
statutory authority to regulate. This is of
particular concern to the agencies today
with respect to the agencies’ broad
application of Justice Kennedy’s phrase
‘‘similarly situated lands. ’’ As
discussed previously, the agencies took
an expansive reading of this phrase, in
part based on ‘‘one of the main
conclusions of the [Connectivity Report]
. . . that the incremental contributions
of individual streams and wetlands are
cumulative across entire watersheds,
and their effects on downstream waters
should be evaluated within the context
of other streams and wetlands in that
watershed,’’ see 80 FR 37066. Yet,
Justice Kennedy observed in Rapanos
that what constitutes a ‘‘significant
nexus’’ to the waters of the United
States is not a solely scientific question
and that it cannot be determined by
environmental effects alone. See, e.g.,
547 U.S. at 777–78 (noting that although
‘‘[s]cientific evidence indicates that
wetlands play a critical role in
controlling and filtering runoff . . .
environmental concerns provide no
reason to disregard limits in the
statutory text’’ (citations omitted)). This
includes how Congress’ use of the term
‘‘navigable’’ in the CWA and how the
policies embodied in section 101(b)
should inform this analysis. Justice
Kennedy wrote that ‘‘the Corps deems a
37 Id.
E:\FR\FM\12JYP1.SGM
at 2.
12JYP1
amozie on DSK3GDR082PROD with PROPOSALS1
32242
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
water a tributary if it feeds into a
traditional navigable water (or a
tributary thereof) and possesses an
ordinary high-water mark,’’ defined as a
‘‘line on the shore established by the
fluctuations of water and indicated by
[certain] physical characteristics.’’ Id. at
781. This ‘‘may well provide a
reasonable measure of whether specific
minor tributaries bear a sufficient nexus
with other regulated waters to constitute
‘navigable waters’ under the Act. Yet the
breadth of this standard—which seems
to leave wide room for regulation of
drains, ditches, and streams remote
from any navigable-in-fact water and
carrying only minor volumes toward
it—precludes its adoption as the
determinative measure of whether
adjacent wetlands are likely to play an
important role in the integrity of an
aquatic system comprising navigable
waters as traditionally understood.’’ Id.
(emphasis added).
The 2015 Rule, by contrast, asserts
jurisdiction categorically over any
tributary, including all ephemeral and
intermittent streams that meet the rule’s
tributary definition, as well as all
wetlands and other waters that are
within certain specified distances from
a broadly defined category of tributaries
(e.g., all waters located within the 100year floodplain of a category (1) through
(5) ‘‘jurisdictional by rule’’ water and
not more than 1,500 feet from the
ordinary high water mark of such
water). According to the rule, tributaries
are characterized by the presence of the
physical indicators of a bed and banks
and an ordinary high water mark and
eventually contribute flow (directly or
indirectly) to a traditional navigable
water, interstate water, or territorial sea
that may be a considerable distance
away. See 80 FR 37105. The 2015 Rule
defined ‘‘ordinary high water mark’’ as
‘‘that line on the shore established by
the fluctuations of water and indicated
by physical characteristics such as a
clear, natural line impressed on the
bank, shelving, changes in the character
of soil, destruction of terrestrial
vegetation, the presence of litter and
debris, or other appropriate means that
consider the characteristics of the
surrounding areas.’’ Id. at 37106. The
2015 Rule did not require any
assessment of flow, including volume,
duration, or frequency, when defining
the ‘‘waters of the United States.’’
Instead, the 2015 Rule concluded that it
was reasonable to presume that ‘‘[t]hese
physical indicators demonstrate there is
volume, frequency, and duration of flow
sufficient to create a bed and banks and
an ordinary high water mark, and thus
to qualify as a tributary.’’ Id. at 37105.
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
The 2015 Rule thus covers ephemeral
washes that flow only in response to
infrequent precipitation events if they
meet the definition of tributary. These
results, particularly that adjacent
waters, broadly defined, are
categorically jurisdictional no matter
how small or frequently flowing the
tributary to which they are adjacent, is,
at a minimum, in significant tension
with Justice Kennedy’s understanding of
the term significant nexus as explained
in Rapanos. See id. at 781–82 (‘‘[I]n
many cases wetlands adjacent to
tributaries covered by [the Corps’ 1986
tributary] standard might appear little
more related to navigable-in-fact waters
than were the isolated ponds held to fall
beyond the Act’s scope in SWANCC.’’).
The agencies are mindful that courts
that have considered the merits of
challenges to the 2015 Rule have
similarly observed that the rule may
conflict with Justice Kennedy’s opinion
in Rapanos, particularly the rule’s
definition of ‘‘tributary.’’ The District of
North Dakota found that the definitions
in the 2015 Rule raise ‘‘precisely the
concern Justice Kennedy had in
Rapanos, and indeed the general
definition of tributary [in the 2015 Rule]
is strikingly similar’’ to the standard for
tributaries that concerned Justice
Kennedy in Rapanos. North Dakota, 127
F. Supp. 3d at 1056. The Southern
District of Georgia also found that the
2015 Rule’s definition of ‘‘tributary’’ ‘‘is
similar to the one’’ at issue in Rapanos,
and that ‘‘it carries with it the same
concern that Justice Kennedy had
there.’’ Georgia, 2018 U.S. Dist. LEXIS
97223, at *17. Likewise, the Sixth
Circuit stated in response to petitioners’
‘‘claim that the Rule’s treatment of
tributaries, ‘adjacent waters,’ and waters
having a ‘significant nexus’ to navigable
waters is at odds with the Supreme
Court’s ruling in Rapanos’’ that ‘‘[e]ven
assuming, for present purposes, as the
parties do, that Justice Kennedy’s
opinion in Rapanos represents the best
instruction on the permissible
parameters of ‘waters of the United
States’ as used in the Clean Water Act,
it is far from clear that the new Rule’s
distance limitations are harmonious
with the instruction.’’ In re EPA, 803
F.3d at 807 & n.3 (noting that ‘‘[t]here
are real questions regarding the
collective meaning of the [Supreme]
Court’s fragmented opinions in
Rapanos’’).
One example that illustrates this point
is the ‘‘seasonally ponded, abandoned
gravel mining depressions’’ specifically
at issue in SWANCC, 531 U.S. at 164,
which the Supreme Court determined
were ‘‘nonnavigable, isolated, intrastate
waters,’’ id. at 166–72, and not
PO 00000
Frm 00028
Fmt 4702
Sfmt 4702
jurisdictional. These depressions are
located within 4,000 feet of Poplar
Creek, a tributary to the Fox River, and
may have the ability to store runoff or
contribute other ecological functions in
the watershed. Thus, they would be
subject to, and might satisfy, a
significant nexus determination under
the 2015 Rule’s case-specific analysis.
However, Justice Kennedy himself
stated in Rapanos, which informed the
significant nexus standard articulated in
the rule, that, ‘‘[b]ecause such a
[significant] nexus was lacking with
respect to isolated ponds, the
[SWANCC] Court held the plain text of
the statute did not permit’’ the Corps to
assert jurisdiction over them. 547 U.S. at
767. Other potential examples of the
breadth of the significant nexus
standard articulated in the 2015 Rule
are provided below in the next section.
3. Concerns Regarding the 2015 Rule’s
Effect on the Scope of CWA Jurisdiction
The agencies asserted in the preamble
to the 2015 Rule that ‘‘State, tribal, and
local governments have well-defined
and longstanding relationships with the
Federal government in implementing
CWA programs and these relationships
are not altered by the final rule.’’ 80 FR
37054. The agencies further noted that
‘‘[c]ompared to the current regulations
and historic practice of making
jurisdictional determinations, the scope
of jurisdictional waters will decrease’’
under the 2015 Rule. Id. at 37101. When
compared to more recent practice,
however, the agencies determined that
the 2015 Rule would result ‘‘in an
estimated increase between 2.84 and
4.65 percent in positive jurisdictional
determinations annually.’’ Id. The
agencies thus concluded that the 2015
Rule would ‘‘result in a small overall
increase in positive jurisdiction
determinations compared to those made
under the Rapanos Guidance’’ and that
the ‘‘net effect’’ of the regulatory
changes would ‘‘be marginal at most.’’
Brief for Respondents at 32–33 & n.6, In
re EPA, No. 15–3571 (6th Cir. Jan. 13,
2017). Since publication of the final
rule, the agencies have received
information about the impact of these
changes, including through filings in
litigation against the 2015 Rule and
comments received in response to the
July 27, 2017 NPRM. After further
analysis and reconsideration of how the
2015 Rule is likely to impact
jurisdictional determinations, including
how the data on those impacts relate to
the specific regulatory changes made in
the 2015 Rule, the agencies are now
considering whether the definitional
changes in the 2015 Rule would have a
more substantial impact on the scope of
E:\FR\FM\12JYP1.SGM
12JYP1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS1
jurisdictional determinations made
pursuant to the CWA than
acknowledged in the analysis for the
rule and would thus impact the balance
between federal, state, tribal, and local
government in a way that gives
inadequate consideration to the
overarching Congressional policy to
‘‘recognize, preserve, and protect the
primary responsibilities and rights of
States to prevent, reduce, and eliminate
pollution’’ and ‘‘to plan the
development and use . . . of land and
water resources. . . .’’ 33 U.S.C.
1251(b).
Between the agencies’ ‘‘historic’’ (i.e.,
1986 regulations) and ‘‘recent’’ practices
of making jurisdictional determinations
under the Rapanos Guidance, the
Supreme Court held that the agencies’
application of the 1986 regulation was
overbroad in some important respects.
See SWANCC, 531 U.S. at 174 (reversing
and remanding the assertion of
jurisdiction); Rapanos, 547 U.S. at 715
(vacating and remanding, for further
analysis, the assertion of CWA
jurisdiction). Throughout the
rulemaking process for the 2015 Rule,
the agencies stressed in public
statements,38 fact sheets,39 blog posts,40
and before Congress 41 that the rule
would not significantly expand the
jurisdictional reach of the CWA. Some
commenters questioned the accuracy of
these statements during the rulemaking
process for the 2015 Rule and in
response to the July 27, 2017 NPRM.
The court in North Dakota questioned
the scope of waters subject to the 2015
Rule, and based its preliminary
injunction in principal part on those
doubts, stating, for example, that ‘‘the
definition of tributary’’ in the 2015 Rule
38 Addressing farmers in Missouri in July 2014,
then-EPA Administrator Gina McCarthy stated that
no additional CWA permits would be required
under the proposed 2015 Rule. See: http://
www.farmfutures.com/story-epas-mccarthy-ditchmyths-waters-rule-8-114845 (‘‘The bottom line with
this proposal is that if you weren’t supposed to get
a permit before, you don’t need to get one now.’’).
39 U.S. EPA. Facts About the Waters of the U.S.
Proposal at 4 (July 1, 2014), available at https://
www.regulations.gov/
contentStreamer?documentId=EPA-HQ-OW-20110880-16357&attachmentNumber=38&
contentType=pdf (‘‘The proposed rule does not
expand jurisdiction.’’).
40 U.S. EPA blog post entitled ‘‘Setting the Record
Straight on Waters of the US’’ (June 30, 2014),
available at https://blog.epa.gov/blog/2014/06/
setting-the-record-straight-on-wous/ (‘‘The proposed
rule does not expand jurisdiction.’’).
41 In a hearing before the House Committee on
Science, Space, and Technology entitled
‘‘Navigating the Clean Water Act: Is Water Wet?’’
(July 9, 2014), then-Deputy EPA Administrator Bob
Perciasepe told the Committee that the agencies are
not expanding the jurisdiction of the CWA. See
https://science.house.gov/legislation/hearings/fullcommittee-hearing-navigating-clean-water-actwater-wet.
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
‘‘includes vast numbers of waters that
are unlikely to have a nexus to
navigable waters within any reasonable
understanding of the term.’’ 127 F.
Supp. 3d at 1056; see also In re EPA,
803 F.3d at 807 (finding that ‘‘it is far
from clear that the new Rule’s distance
limitations are harmonious’’ with
Justice Kennedy’s significant nexus test
in Rapanos); Georgia, 2018 U.S. Dist.
LEXIS 97223, at *17 (holding that the
2015 Rule’s ‘‘tributary’’ definition ‘‘is
similar to the one invalidated in
Rapanos, and it carries with it the same
concern that Justice Kennedy had
there’’).
Given the concerns raised by some
commenters and the federal courts, the
agencies have reviewed data previously
relied upon to conclude that the 2015
Rule would have no or ‘‘marginal at
most’’ impacts on jurisdictional
determinations, Brief for Respondents at
32 n.6, In re EPA, No. 15–3571 (6th Cir.
Jan. 13, 2017), and are reconsidering the
validity of this conclusion. The agencies
solicit comment on whether the
agencies appropriately characterized or
estimated the potential scope of CWA
jurisdiction that could change under the
2015 Rule, including whether the
documents supporting the 2015 Rule
appropriately considered the data
relevant to and were clear in that
assessment.
For example, the agencies relied upon
an examination of the documents
supporting the estimated 2.84 to 4.65
percent annual increase in positive
approved jurisdictional determinations
(AJDs) to conclude that the 2015 Rule
would only ‘‘result in a small overall
increase in positive jurisdictional
determinations compared to those made
under the Rapanos Guidance.’’ See Brief
for Respondents at 32, In re EPA, No.
15–3571 (6th Cir. Jan. 13, 2017).
However, others have raised concerns
that this information and other data
show the 2015 Rule may have expanded
jurisdiction more significantly,
particularly with respect to so-called
‘‘other waters’’ that are not adjacent to
navigable waters and their tributaries.
In developing the 2015 Rule, the
agencies examined records in the Corps’
Operation and Maintenance Business
Information Link, Regulatory Module
(ORM2) database that documents
jurisdictional determinations associated
with various aquatic resource types,
including an isolated waters category.
‘‘The isolated waters category is used in
the Corps’ ORM2 database to represent
intrastate, non-navigable waters;
including wetlands, lakes, ponds,
streams, and ditches, that lack a direct
surface connection to other waterways.
These waters are hereafter referred to as
PO 00000
Frm 00029
Fmt 4702
Sfmt 4702
32243
‘ORM2 other waters.’ ’’ 42 To examine
how assertion of jurisdiction could
change under the 2015 Rule, the
agencies reviewed ORM2 aquatic
resource records from Fiscal Year
(FY)13 and FY14 and placed them into
three groups: Streams (ORM2 categories
of traditionally navigable waters,
relatively permanent waters, and nonrelatively permanent waters), wetlands
adjacent to the stream category group,
and other waters. Of the 160,087 records
for FY13 and FY14, streams represented
65 percent of the total records available,
wetlands represented 29 percent, and
other waters represented 6 percent.
From this baseline, the agencies
assumed that 100 percent of the records
classified as streams would meet the
jurisdictional tests established in the
final rule, and 100 percent of the
records classified as adjacent wetlands
would meet the definition of adjacent in
the final rule. These assumptions
resulted in a relatively minor projected
increase in positive jurisdictional
determinations under the final rule for
these categories: 99.3 to 100 percent for
the streams category, and 98.9 to 100
percent for the wetlands category.
The agencies also performed a
detailed analysis of the other waters
category to determine whether
jurisdiction might change for those
waters under the final rule. In total,
‘‘these files represented over 782
individual waters in 32 states.’’ 43
Of the existing negative
determinations for other waters, the
agencies made the following estimates:
• 17.1 percent of the negative
jurisdictional determinations for other
waters would become positive under the
2015 Rule because the aquatic resources
would meet the new definition of
adjacent waters. See 80 FR 37105. These
waters fall within the 100-year
floodplain and are within 1,500 feet of
a stream included in the United States
Geological Survey’s (USGS) National
Hydrography Dataset (NHD).
• 15.7 percent of the other waters
could become jurisdictional under
category (7) of the 2015 Rule following
a significant nexus analysis. See id. at
37104–05.
• 1.7 percent of the other waters
could become jurisdictional under
category (8) of the 2015 Rule following
a significant nexus analysis. See id. at
37105.
In total, the agencies estimated that
34.5 percent of the other waters
represented in the FY13 and FY14
ORM2 database could become
jurisdictional under the 2015 Rule after
42 2015
43 2015
E:\FR\FM\12JYP1.SGM
Rule Economic Analysis at 7.
Rule Economic Analysis at 9.
12JYP1
amozie on DSK3GDR082PROD with PROPOSALS1
32244
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
having been declared not jurisdictional
under the existing regulations and
agency guidance. Thus, while the
agencies acknowledged in the 2015 Rule
Economic Analysis that ‘‘[f]ollowing the
Supreme Court decisions in SWANCC
(2001) and Rapanos (2006), the agencies
no longer asserted CWA jurisdiction
over isolated waters,’’ the agencies
estimated in the 2015 Rule Economic
Analysis that 34.5 percent of the other
waters category could become
jurisdictional under the 2015 Rule.44 By
way of comparison, a similar analysis of
this category of other waters performed
in support of the proposed rule in 2014
(using FY09 and FY10 data from the
ORM2 database) estimated that 17
percent of the negative jurisdictional for
other waters would become positive.45
While the Economic Analysis for the
2015 Rule estimated that 34.5 percent of
negative jurisdictional determinations
for other waters would become
positive,46 the agencies nevertheless
premised the 2015 Rule on assertions
that the ‘‘scope of jurisdiction in this
rule is narrower than that under the
existing regulation,’’ the scope of
jurisdiction in the rule would result ‘‘in
an estimated increase between 2.84 and
4.65 percent in positive jurisdictional
determinations annually’’ based on
existing practice, and that such impacts
would be ‘‘small overall’’ and ‘‘marginal
at most.’’ See 80 FR 37054, 37101; Brief
for Respondents at 32–33 & n.6, In re
EPA, No. 15–3571 (6th Cir. Jan. 13,
2017). The agencies are examining these
statements and how this data relates
specifically to the regulatory changes
made in the 2015 Rule (as opposed to
those provisions which already
subjected many streams and wetlands to
CWA jurisdiction). The agencies request
comment on whether the projected
increase for this category is most
relevant to measuring the impacts of the
2015 Rule, whether the public had
ample notice of the doubling of
projected positive jurisdiction over the
other waters category from the proposed
to final rule, and whether the final rule
could expand overall CWA positive
jurisdictional determinations by a
material amount inconsistent with the
findings and conclusions that justified
the 2015 Rule.
In particular, the agencies seek
comment on the conclusions that were
based on the method that estimated a
44 2015
Rule Economic Analysis at 5, 12.
EPA and U.S. Army Corps of Engineers.
Economic Analysis of Proposed Revised Definition
of Waters of the United States at 12, Exhibit 3 (Mar.
2014) (Docket ID: EPA–HQ–OW–2011–0880–0003),
available at https://www.regulations.gov/
document?D=EPA-HQ-OW-2011-0880-0003.
46 2015 Rule Economic Analysis at 13, Figure 2.
45 U.S.
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
2.84 to 4.65 percent increase in overall
jurisdiction, including the use of a
method whereby the increase in
assertion of jurisdiction in a particular
category of waters (e.g., streams,
wetlands, and other waters) was
proportionally applied based on the raw
number of records in a category relative
to the total number of records across all
categories in the ORM2 database,
notwithstanding whether the regulatory
changes in the 2015 Rule did not
materially impact those other categories.
For example, of the 160,087 records in
the ORM2 database for FY13 and FY14,
103,591 were associated with the
streams category, 46,781 were
associated with the wetlands category,
and 9,715 were related to the other
waters category. Thus, although 34.5
percent of previously non-jurisdictional
‘‘other waters’’ would become
jurisdictional under the 2015 Rule, the
proportional method used in the 2015
Rule Economic Analysis resulted in
only an estimated 2.09 percent increase
in positive jurisdictional determinations
for ‘‘other waters’’ relative to the total
number of jurisdictional determinations
considered.47
In addition, the record for the 2015
Rule includes a 57-page document
entitled ‘‘Supporting Documentation:
Analysis of Jurisdictional
Determinations for Economic Analysis
47 The following summarizes the methodology
used to derive the low-end estimated increase in
jurisdiction of 2.84 percent: Streams account for
103,591 of the 160,087 total records (64.709 percent
of the total ORM2 records) and 100 percent of
streams are assumed to be jurisdictional under the
final rule compared to 99.3 percent under previous
practice (100 percent minus 99.3 percent = 0.7
percent). The relative contribution of streams to the
overall change in jurisdictional determinations is
thus 64.709 percent multiplied by 0.7 percent for
a total of 0.45 percent. Wetlands account for 46,781
of the 160,087 total records (29.222 percent of the
total ORM2 records) and 100 percent of wetlands
are assumed to be jurisdictional under the final rule
compared to 98.9 percent under previous practice
(100 percent minus 98.9 percent = 1.1 percent). The
relative contribution of wetlands to the overall
estimated change in jurisdictional determinations is
thus 29.222 percent multiplied by 1.1 percent for
a total of 0.32 percent. Other waters account for
9,715 of the 160,087 total records (6.069 percent of
the total ORM2 records) and 34.5 percent of other
waters are assumed to be jurisdictional under the
final rule compared to 0.0 percent under previous
practice (34.5 percent minus 0.0 percent = 34.5
percent). The relative contribution of other waters
to the overall estimated change in jurisdictional
determinations is thus 6.069 percent multiplied by
34.5 percent for a total of 2.09 percent. The agencies
then added the relative contribution to the overall
estimated change in jurisdictional determinations
for each category of waters (i.e., 0.45 percent for
streams, 0.32 percent for wetlands, and 2.09 percent
for other waters) to get a total projected change in
positive jurisdictional determinations of 2.86
percent. The differences between this calculation
and the reported 2.84 percent in the 2015 Rule
Economic Analysis may be the result of rounding
error.
PO 00000
Frm 00030
Fmt 4702
Sfmt 4702
and Rule,’’ 48 along with an
accompanying 3,695 page document of
approved jurisdictional determination
(AJD) forms.49 This contains the
agencies’ assessment conducted in April
2015 of almost two hundred previously
performed AJDs to help the agencies
better understand how waters might
change jurisdictional status based on the
distance limitations included in the
final 2015 Rule for adjacent and casespecific waters (see 80 FR 37105),
including where they might no longer
be jurisdictional under the final rule.
Certain examples included in the
assessment suggest that the 2015 Rule
could modify CWA jurisdiction over
waters that were deemed not
jurisdictional under the 1986 regulatory
framework and Supreme Court
precedent. The agencies request
comment on whether the examples
illustrate the concerns expressed by the
recent court decisions discussed above
that the 2015 Rule may have exceeded
the significant nexus standard
articulated by Justice Kennedy in the
Rapanos opinion and concerns
expressed by certain commenters that
the 2015 Rule may have created
additional regulatory uncertainty over
waters that were previously thought
beyond the scope of CWA jurisdiction.
The examples are intended to be
illustrative, and are not intended to
attempt to quantify or reassess previous
estimates of CWA jurisdiction, as the
agencies are not aware of any map or
dataset that accurately or with any
precision portrays CWA jurisdiction at
any point in the history of this complex
regulatory program.
In the first example, a property in
Chesapeake, Virginia, was reviewed by
the Corps’ Norfolk District in early
January 2014 and again in March 2015
and was determined not to contain
jurisdictional wetlands because the
wetlands on the property lacked a
hydrological surface connection of any
duration, frequency, or volume of flow
to other jurisdictional waters. The Corps
noted that the wetlands ‘‘appear to be
dependent upon groundwater for
hydrology, and have no surface
connections’’ to nearby tributaries, the
closest one of which was approximately
80 feet from the wetland. The agencies
48 U.S. EPA. Supporting Documentation: Analysis
of Jurisdictional Determinations for Economic
Analysis and Rule (Docket ID: EPA–HQ–OW–2011–
0880–20877), available at https://
www.regulations.gov/document?D=EPA-HQ-OW2011-0880-20877.
49 U.S. EPA and U.S. Army Corps of Engineers.
Supporting Documentation: Jurisdictional
Determinations (Docket ID: EPA–HQ–OW–2011–
0880–20876), available at https://
www.regulations.gov/document?D=EPA-HQ-OW2011-0880-20876.
E:\FR\FM\12JYP1.SGM
12JYP1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
later stated that the wetland features
‘‘would be jurisdictional under the new
rule’’ because they are ‘‘within 100-feet
of a tributary’’ and would thus meet the
rule’s definition of ‘‘neighboring’’ and,
in turn, ‘‘adjacent.’’ Further information
regarding this AJD and property has
been added to the docket for the NPRM
and is identified as ‘‘Case Study A—AJD
Number NAO–2014–2269’’ (see Support
Document).
In another example, the Corps’
Buffalo District reviewed a small
wetland approximately 583 feet away
from the Johlin Ditch near Toledo, Ohio,
which eventually leads north to Lake
Erie. After conducting a field
investigation in September 2014, the
Corps determined that the wetlands
were not jurisdictional because the
‘‘wetlands are isolated and there is no
surface water connections [sic] and the
only potential jurisdiction would be the
[Migratory Bird Rule],’’ noting that the
area previously would have been
regulated under the Migratory Bird Rule
prior to the Supreme Court’s SWANCC
decision. The agencies later stated that
the wetlands would be jurisdictional
under the 2015 Rule. Further
information regarding this AJD and
property has been added to the docket
for the NPRM and is identified as ‘‘Case
Study B—AJD Number 2004–001914’’
(see Support Document).
In another example, the Corps’
Memphis District reviewed a borrow pit
on a property in Mississippi County,
Missouri, and concluded that the
borrow pit did not contain jurisdictional
wetlands. The project area was
described in the AJD as follows:
amozie on DSK3GDR082PROD with PROPOSALS1
The borrow pit has been abandoned for
some time. Vegetation consists mainly of
black willow (Salix nigra) and poison ivy
(Toxicodendron radicans). A site visit was
conducted on 8 December 2014. The borrow
pit is bordered by agricultural land on three
sides and County Road K on the western
border. There are no surface water
connections to other waters of the U.S. A
sample was taken within the site and all
three parameters for a wetland are present.
The Soil Survey book for Cape Girardeau,
Mississippi and Scott Counties Missouri,
compiled in 1974 and 1975 from aerial
photography indicates no drainage into or
out of the project site. The area is an isolated
wetland approximately 7.6 acres in size.
The abandoned pit in this example
was 2,184 feet from the nearest
‘‘tributary,’’ a feature that itself appears
to be a ditch in an agricultural field. The
wetlands in the borrow pit were
determined by the Corps to be isolated
and non-jurisdictional ‘‘with no
substantial nexus to interstate (or
foreign) commerce’’ and on the basis
that ‘‘prior to . . .‘’SWANCC,’ the
review area would have been regulated
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
based solely on the ‘Migratory Bird
Rule.’ ’’ A later review by the agencies,
however, stated that these wetlands
would be jurisdictional under the 2015
Rule. Further information regarding this
property and associated AJD has been
added to the docket for the NPRM and
is identified as ‘‘Case Study C—AJD
Number MVM–2014–460’’ (see Support
Document).
In another example, the Corps’ New
England District reviewed a ‘‘mowed
wet meadow within a mowed hayfield’’
in Greensboro, Vermont, in August 2012
and concluded the site did not contain
jurisdictional wetlands. The AJD
described the wetlands as ‘‘surrounded
on all sides by similar upland,’’ ‘‘500′–
985′ away’’ from the nearest
jurisdictional waters, and ‘‘isolated
intrastate waters with no outlet, no
hydrological connection to the Lamoille
River, no nexus to interstate commerce,
and no significant nexus to the Lamoille
River (located about 1.7–1.8 miles
southeast of the site).’’ A later review by
the agencies, however, stated the
wetlands would be jurisdictional under
the 2015 Rule. Further information
regarding this property and associated
AJD has been added to the docket for
the NPRM and is identified as ‘‘Case
Study D—AJD Number NAE–2012–
1813’’ (see Support Document).
In another example, the Corps’
Chicago District completed AJD number
LRC–2015–31 for wetlands in
agricultural fields in Kane County,
Illinois, in January 2015. AJD Number
LRC–2015–31 was completed using two
separate AJD forms: One form for the
features at the project site that were
determined to be jurisdictional
according to the Rapanos Guidance
(‘‘positive AJD form’’) and a second
form for the features at the site that the
Corps determined were not
jurisdictional under the Rapanos
Guidance (‘‘negative AJD form’’). Only
the positive AJD form was included in
the docket in Supporting
Documentation entitled, ‘‘Jurisdictional
Determinations—Redacted.’’ 50 The
negative AJD form is available on the
Chicago District website.51
Using a field determination and desk
determinations, the Corps found on the
AJD form that there were ‘‘no ‘waters of
the U.S.’ within Clean Water Act (CWA)
jurisdiction (as defined by 33 CFR part
328) in the review area.’’ The Corps
described the project area in the AJD
form as follows: ‘‘Wetland A is a 1.37
acre high quality closed depressional
at 2082–83.
at: http://www.lrc.usace.army.mil/
Portals/36/docs/regulatory/jd/lrcnjd02-2015.pdf
(page 1 and 2).
PO 00000
50 Id.
51 Available
Frm 00031
Fmt 4702
Sfmt 4702
32245
isolated wetland. Wetlands B and C
(0.08 ac and 0.15 ac) are isolated
wetlands that formed over a failed drain
tile and are over 1,200 feet away from
the closest jurisdictional waterway.’’
The AJD also notes, ‘‘Weland [sic] A and
the area around Wetlands B and C were
previously determined to be isolated in
2008. Wetland C is mapped as Prior
Converted in a NRCS certified farmed
wetland determination—other areas are
mapped as not inventoried.’’ Upon later
reviewing the negative AJD, however,
the agencies determined the wetlands
would be ‘‘now Yes JD’’ under the 2015
Rule. Further information regarding this
property and associated positive and
negative AJDs has been added to the
docket for the NPRM and is identified
as ‘‘Case Study E—AJD Number LRC–
2015–31’’ (see Support Document).
In another example, the Corps’
Pittsburgh District visited a property in
Butler, Pennsylvania, in October 2014
and determined the site did not contain
waters of the United States because the
wetland was ‘‘completely isolated and
has no nexus to a TNW or interstate or
foreign commerce.’’ The Corps noted
that the wetland would have been
regulated based solely on the Migratory
Bird Rule prior to the decision in
SWANCC. Upon reviewing the AJD, the
agencies later stated the wetland is
‘‘[i]solated but would have flood storage
function.’’ The agencies’ review notes
that the wetland is 1,270 feet from the
nearest relatively permanent water
(RPW) or traditional navigable water
(TNW). Given the wetland is within
4,000 feet of a tributary and the agencies
have stated it possesses at least one of
the nine functions relevant to the
significant nexus evaluation, see 80 FR
37106 (i.e., retention and attenuation of
flood waters), the wetland would be
subject to a significant nexus evaluation
under the 2015 Rule. It is unclear,
however, whether the wetland and its
flood storage function would contribute
significantly to the chemical, physical,
or biological integrity of the nearest
category (1) through (3) water as
required by the 2015 Rule to satisfy the
significant nexus test. Further
information regarding this property and
associated AJD has been added to the
docket for the NPRM and is identified
as ‘‘Case Study F—AJD Number LRP
2014–855’’ (see Support Document).
In addition to the projected increase
in positive jurisdictional determinations
and the above examples of expected JD
changes, an examination of the
documents supporting the estimated
2.84 to 4.65 percent annual increase in
positive AJDs raises concerns that the
2015 Rule may have significantly
expanded jurisdiction over tributaries in
E:\FR\FM\12JYP1.SGM
12JYP1
amozie on DSK3GDR082PROD with PROPOSALS1
32246
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
certain States, particularly those in more
arid parts of the country.
As described previously, to assess
how assertion of jurisdiction may
change under the 2015 Rule, the
agencies reviewed ORM2 aquatic
resource records from FY13 and FY14
and placed the aquatic resources into
three groups: Streams, wetlands
adjacent to the stream category group,
and other waters. With respect to the
streams category, the agencies assumed
that ‘‘100 percent of the records
classified as streams will meet the
definition of tributary in the final
rule,’’ 52 resulting in a relatively minor
projected increase in positive
jurisdictional determinations under the
final rule for streams: 99.3 percent to
100 percent, or a 0.7 percent increase.
However, the agencies have
reexamined the 57-page ‘‘Supporting
Documentation: Analysis of
Jurisdictional Determinations for
Economic Analysis and Rule’’ and have
questions regarding the minor projected
increase in positive jurisdictional
determinations over streams in some
states. An untitled table on page 46 of
the supporting document lists an
analysis of a subset of streams and the
number of those streams estimated to be
non-jurisdictional by State in the FY13–
FY14 ORM2 records for the purpose of
estimating stream mitigation costs
associated with the 2015 Rule.53
Investigating the percent of streams
estimated to be non-jurisdictional on a
State-by-State basis coupled with the
2015 Rule Economic Analysis’s
assumption that 100 percent of the
stream jurisdictional determinations
will be positive under the 2015 Rule
could indicate that there may be a
significant expansion of jurisdiction
over tributaries in some States beyond
current practice. For example, in the
FY13–FY14 ORM2 records for Arizona,
the table identifies 709 of 1,070 total
streams (66.3 percent) were nonjurisdictional. For Arkansas, the table
identifies 116 of 213 total streams (54.5
percent) as non-jurisdictional. In South
Dakota, North Dakota, Nevada, New
Mexico, and Wyoming, 8.5 percent, 9.2
percent, 13.2 percent, 16.7 percent, and
57.1 percent of streams in the FY13–
FY14 ORM2 database, respectively,
were identified in the table as nonjurisdictional. The agencies are
concerned that because the 2015 Rule
may assert jurisdiction over 100 percent
of streams as the agencies assumed in
the 2015 Rule Economic Analysis,
certain States, particularly those in the
arid West, would see significant
52 2015
53 The
Rule Economic Analysis at 8.
table includes all states except Hawaii.
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
expansions of federal jurisdiction over
streams. The agencies solicit comment
on whether such expansions conflict
with the assumptions underlying and
statements justifying the 2015 Rule, and
if such expansions were consistent with
the policy goals of section 101(b) of the
CWA.
Several questions were raised by
commenters regarding whether the 2015
Rule expanded CWA jurisdiction over
intermittent and ephemeral streams, and
whether the agencies accurately
identified that potential expansion in
the development of the 2015 Rule.
Several commenters, for example,
suggested that the amount of
jurisdictional river and stream miles in
the United States may increase from
approximately 3.5 million miles to more
than 8 million miles in response to the
per se jurisdictional treatment of
millions of miles of ephemeral and
intermittent streams under the tributary
definition.54 To frame their analysis,
those commenters compared river and
stream miles reported in recent CWA
section 305(b) reports submitted by
States to EPA, and transmitted by EPA
to Congress, to the river and stream
miles depicted in maps developed by
the agencies and the USGS prior to the
2015 Rule’s proposal.
Section 305(b)(1)(A) of the CWA
directs each state to ‘‘prepare and
submit to the Administrator . . .
biennially . . . a report which shall
include . . . a description of the water
quality of all navigable waters in such
State during the preceding year. . . .’’
33 U.S.C. 1315(b)(1)(A). Section
305(b)(2) additionally directs the
Administrator to ‘‘transmit such State
reports, together with an analysis
thereof, to Congress . . . .’’ Id. at
1315(b)(2). Over the years, those reports
to Congress have identified between 3.5
and 3.7 million river and stream miles
nationwide (see Support Document).
The agencies previously observed that
this analysis may not be precise,
because of concerns regarding the
baseline for comparison and
54 See comments submitted by Arizona
Department of Environmental Quality et al. (Nov.
14, 2014) (Docket ID: EPA–HQ–OW–2011–0880–
15096), available at https://www.regulations.gov/
document?D=EPA-HQ-OW-2011-0880-15096;
comments submitted by CropLife America (Nov. 14,
2014) (Docket ID: EPA–HQ–OW–2011–0880–
14630), available at https://www.regulations.gov/
document?D=EPA-HQ-OW-2011-0880-14630;
comments submitted by American Foundry Society
(Nov. 14, 2014) (Docket ID: EPA–HQ–OW–2011–
0880–15148), available at https://
www.regulations.gov/document?D=EPA-HQ-OW2011-0880-15148; comments submitted by U.S.
Chamber of Commerce et al. (Nov. 12, 2014) (Docket
ID: EPA–HQ–OW–2011–0880–14115), available at
https://www.regulations.gov/document?D=EPA-HQOW-2011-0880-14115.
PO 00000
Frm 00032
Fmt 4702
Sfmt 4702
assumptions regarding which
intermittent and ephemeral streams may
be covered under the 2015 Rule.55
The agencies are not aware of any
national, regional, or state-level map
that identifies all ‘‘waters of the United
States’’ and acknowledge that there are
limitations associated with existing
datasets. The agencies, however,
developed a series of draft maps using
the NHD identifying ‘‘rivers and streams
and tributaries and other water bodies’’
in each State, which then-EPA
Administrator Gina McCarthy
mentioned at a March 27, 2014 hearing
before the U.S. House of Representatives
Appropriations Committee
Subcommittee on Interior, Environment,
and Related Agencies.56 The EPA
provided a copy of those draft maps to
Congress on July 28, 2014,57 and they
remain available to the public on the
U.S. House of Representatives
Committee on Science, Space and
Technology website.58 The draft maps
identify a total of 8,086,742 river and
stream miles across the 50 States (see
Support Document).
Given the significant differences
between the CWA section 305(b) reports
and the draft NHD maps submitted to
Congress, and the possibility that each
may represent potential estimates for
the relative jurisdictional scope of the
1986 regulations and practice compared
to the 2015 Rule, several States have
questioned whether the proposed
definition of ‘‘tributary’’ for the 2015
Rule would expand federal jurisdiction
over State water resources. Eight State
departments of environmental quality,
for example, stated in joint comments
that ‘‘comparing the ‘waters of the
United States’ reported by States to
recent USGS maps released by the EPA
shows a 131% increase in federal
waters.’’ 59 Comments filed by the State
55 See U.S. EPA and U.S. Army Corps of
Engineers. Clean Water Rule Response to
Comments—Topic 8: Tributaries at 88–89, available
at https://www.epa.gov/sites/production/files/201506/documents/cwr_response_to_comments_8_
tributaries.pdf.
56 EPA Administrator Gina McCarthy testimony
before the U.S. House of Representatives
Appropriations Committee Subcommittee on
Interior, Environment, and Related Agencies (March
27, 2014), available at https://www.c-span.org/
video/?318438-1/fy2015-epa-budget.
57 Letter from Nancy Stoner, Acting Asst.
Administrator, U.S. EPA Office of Water, to Rep.
Lamar Smith, Chairman, U.S. House of
Representatives Committee on Science, Space, and
Technology (July 28, 2014), available at https://
science.house.gov/sites/
republicans.science.house.gov/files/documents/
epa_releases_maps_letter.pdf.
58 EPA State and National Maps of Waters and
Wetlands, available at https://science.house.gov/
epa-state-and-national-maps-waters-and-wetlands.
59 See comments submitted by Alabama Dept. of
Environ. Mgmt., Arizona Dept. of Environ. Quality,
E:\FR\FM\12JYP1.SGM
12JYP1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS1
of Kansas on the proposed rule raised
similar concerns and focused on the
inclusion of ephemeral streams in the
proposed definition of tributary: ‘‘In
Kansas we have identified
approximately 31,000 miles of perennial
and intermittent waters that have been
treated as WOTUS for several
decades. . . . As per the preamble to
the Rule and EPA/ACOE statements, the
additional 133,000 miles [of ephemeral
streams] would result in a 460%
increase in the number of Kansas waters
presumed to be jurisdictional under the
Rule.’’ 60 Kansas added that the State
does ‘‘not believe ephemeral waters
have always been considered de facto
tributaries for CWA jurisdictional
purposes.’’ 61 Referencing a statement
made by then-EPA Administrator
McCarthy in which she stated,
‘‘[u]nfortunately, 60 percent of our
nation’s streams and millions of acres of
wetlands currently lack clear protection
from pollution under the Clean Water
Act,’’ 62 Kansas noted that ‘‘if those 60
percent that ‘lack clear protection’ are
brought under the umbrella of the CWA,
[there will be] a significantly larger
expansion than estimated in the
economic analysis for the Rule.’’ 63
The agencies in 2015 suggested that a
feature that flows very infrequently
would not form the physical indicators
required to meet the 2015 Rule’s
definitions of ‘‘ordinary high water
mark’’ and ‘‘tributary.’’ 64 In response to
comments questioning the agencies’
characterization of the change in scope
of jurisdiction under the 2015 Rule, the
agencies stated that the 2015 Rule was
narrower in scope than the existing
regulations and historical practice, and
reiterated that an increase of
approximately 3 percent represented the
agencies’ estimate of the increased
positive jurisdictional determinations
Indiana Dept. of Environ. Mgmt., Kansas Dept. of
Health and Environ., Louisiana Dept. of Environ.
Quality, Mississippi Dept. of Environ. Quality,
Oklahoma Dept. of Environ. Quality, and Wyoming
Dept. of Environ. Quality (Nov. 14, 2014) (Docket
ID: EPA–HQ–OW–2011–0880–15096), available at
https://www.regulations.gov/document?D=EPA-HQOW-2011-0880-15096.
60 See comments submitted by the State of Kansas
at Appendix A (Oct. 23, 2014) (Docket ID: EPA–
HQ–OW–2011–0880–16636), available at https://
www.regulations.gov/document?D=EPA-HQ-OW2011-0880-16636.
61 Id. (emphasis in original).
62 See ‘‘Clean Water Drives Economic Growth’’ by
Gina McCarthy (Sept. 29, 2014), available at http://
www.huffingtonpost.com/gina-mccarthy/cleanwater-act_b_5900734.html.
63 See supra note 60.
64 See, e.g., U.S. EPA and U.S. Army Corps of
Engineers. Clean Water Rule Response to
Comments—Topic 11: Cost/Benefits (Volume 2) at
223, available at https://www.epa.gov/sites/
production/files/2015-06/documents/cwr_response_
to_comments_11_econ_vol2.pdf.
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
compared to recent practice.65 In the
administrative record for the 2015 Rule
and in a brief filed with the Sixth
Circuit (based on that record), the
agencies asserted that the definition of
‘‘waters of the United States’’
historically has included ephemeral
streams and that some federal court
decisions after SWANCC upheld
assertions of CWA jurisdiction over
surface waters that have a hydrologic
connection to and that form part of the
tributary system of a traditional
navigable water, including intermittent
or ephemeral streams. 80 FR 37079;
Brief for Respondents at 11, 62–64, In re
EPA, No. 15–3571 (6th Cir. Jan. 13,
2017).66 The agencies are requesting
comment on whether these responses to
these issues are adequate. While some
ephemeral streams may have been
jurisdictional after a case-specific
analysis pursuant to the Rapanos
Guidance,67 and while challenges to
some of those determinations have been
rejected by courts, the agencies are
requesting public comment on whether
these prior conclusions and assertions
were correct.
Given the concerns expressed by three
federal courts regarding the potential
scope of the 2015 Rule and comments
raised during the 2015 rulemaking and
submitted in response to the July 27,
2017 NPRM, the agencies are reevaluating the 2015 Rule and the
potential change in jurisdiction. While
the agencies are not aware of any data
that estimates with any reasonable
certainty or predictability the exact
baseline miles and area of waters
covered by the 1986 regulations and
preexisting agency practice or data that
accurately forecasts of the additional
waters subject to jurisdiction under the
2015 Rule, the agencies are examining
whether the data and estimates used to
support the 2015 Rule’s conclusions
that the rule would be narrower than
preexisting regulations may not have
supported those conclusions, and
instead the 2015 Rule may have had
more than a marginal impact on CWA
jurisdictional determinations and may
impact well-defined and longstanding
e.g., id. at 10–13, 17.
also U.S. EPA and Department of the Army.
Technical Support Document for the Clean Water
Rule: Definition of Waters of the United States at
28 (May 27, 2015), available at https://
www.epa.gov/sites/production/files/2015-05/
documents/technical_support_document_for_the_
clean_water_rule_1.pdf.
67 See Rapanos Guidance at 7 (‘‘ ‘[R]elatively
permanent’ waters do not include ephemeral
tributaries which flow only in response to
precipitation and intermittent streams which do not
typically flow year-round or have continuous flow
at least seasonally. However, CWA jurisdiction over
these waters will be evaluated under the significant
nexus standard.’’).
PO 00000
65 See,
66 See
Frm 00033
Fmt 4702
Sfmt 4702
32247
relationships between the federal and
State governments in implementing
CWA programs. The agencies seek
comment on this and other data that
may be relevant to a proposed finding,
and whether such a change in finding
would, either independently or in
conjunction with other factors, support
the agencies’ proposal to repeal the 2015
Rule.
4. Potential Impact on Federal-State
Balance
When promulgating the 2015 Rule,
the agencies concluded and
prominently stated that ‘‘State, tribal,
and local governments have welldefined and longstanding relationships
with the Federal government in
implementing CWA programs and these
relationships are not altered by the final
rule,’’ 80 FR 37054. Indeed, it was ‘‘the
policy of the Congress to recognize,
preserve, and protect the primary
responsibilities and rights of States to
prevent, reduce, and eliminate
pollution, to plan the development and
use (including restoration, preservation,
and enhancement) of land and water
resources, and to consult with the
Administrator in the exercise of his
authority under this Act.’’ 33 U.S.C.
1251(b).
In response to the agencies’ July 27,
2017 NPRM, some commenters have
suggested that the 2015 Rule—
including, inter alia, elements of the
final rule that commenters were not able
to address during the comment period—
may not effectively reflect the specific
policy that Congress articulated in CWA
section 101(b). The agencies are
considering whether and are proposing
to conclude that the 2015 Rule did not
draw the appropriate line, for purposes
of CWA jurisdiction, between waters
subject to federal and State regulation,
on the one hand, and waters subject to
state regulation only, on the other. In
comments submitted to the agencies in
response to the July 27, 2017 NPRM,
many States, representatives of entities
within many sectors of the regulated
community, and numerous other
commenters expressed concerns that the
2015 Rule permits federal encroachment
upon the States’ traditional and primary
authority over land and water resources.
Such commenters cite the Supreme
Court’s recognition that ‘‘Congress chose
to ‘recognize, preserve, and protect the
primary responsibilities and rights of
states . . . to plan the development and
use’ ’’ of those resources in enacting the
CWA rather than ‘‘readjust the federalstate balance,’’ SWANCC, 531 U.S. at
174 (quoting CWA section 101(b), 33
U.S.C. 1251(b)).
E:\FR\FM\12JYP1.SGM
12JYP1
32248
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS1
Under the 2015 Rule, commenters
have observed that the agencies asserted
categorical jurisdiction over water
features that may be wholly intrastate
and physically remote from navigablein-fact waters. Such waters ‘‘adjacent’’
to jurisdictional waters are deemed to
meet the definition of ‘‘waters of the
United States’’ under the 2015 Rule, so
long as any portion of the water is
located within 100 feet of the ordinary
high water mark of a category (1)
through (5) ‘‘jurisdictional by rule’’
water; within the 100-year floodplain of
a category (1) through (5) ‘‘jurisdictional
by rule’’ water but not more than 1,500
feet from the ordinary high water mark
of such water; or within 1,500 feet of the
high tide line of a primary water or the
ordinary high water mark of the Great
Lakes. 80 FR 37085–86, 37105. The
agencies also established case-specific
jurisdiction over water features
generally at a greater distance, including
waters (including seasonal or ephemeral
waters) located within 4,000 feet of the
high tide line or ordinary high water
mark of a category (1) through (5) water.
See 80 FR 37105. For such waters, ‘‘the
entire water is a water of the United
States if a portion is located within the
100-year floodplain of a water identified
in paragraphs (a)(1) through (3) . . . or
within 4,000 feet of the high tide line or
ordinary high water mark’’ of a category
(1) through (5) water.’’ Id.
The agencies are considering whether
the 2015 Rule’s coverage of waters
based, in part, on their location within
the 100-year floodplain of a
jurisdictional water is consistent with
the policy articulated in CWA section
101(b) that States should maintain
primary responsibility over land and
water resources. The agencies received
many comments on the proposal to the
2015 Rule indicating that the potential
breadth of this standard could conflict
with other federal, State or local laws
that regulate development within
floodplains.68 In particular, certain local
governments expressed concern that the
floodplain element of the rule could
conflict with local floodplain
ordinances or otherwise complicate
local land use planning and
development.69 Though the agencies
added a distance-based threshold to
limit the use of the 100-year floodplain
68 See, e.g., comments submitted by City of
Chesapeake (Sept. 9, 2014) (Docket ID: EPA–HQ–
OW–2011–0880–9615), available at https://
www.regulations.gov/document?D=EPA-HQ-OW2011-0880-9615.
69 See, e.g., comments submitted by National
Association of Counties (Nov. 14, 2014) (Docket ID:
EPA–HQ–OW–2011–0880–15081), available at
https://www.regulations.gov/document?D=EPA-HQOW-2011-0880-15081.
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
as a basis for categorical CWA
jurisdiction with respect to adjacent
waters, the agencies are concerned that
the Rule’s use of this standard,
including its use as a basis for requiring
a case-specific significant nexus
determination, could nonetheless
interfere with traditional state and local
police power, as suggested by some of
the comments received in 2014.70
Comments received in response to the
July 27, 2017 NPRM also raise concerns
about the use of the 100-year floodplain.
Specifically, commenters expressed
concern about the absence of suitable
maps and about the accuracy of existing
maps. Given these concerns, the
agencies request comment on whether
the 2015 Rule’s use of the 100-year
floodplain as a factor to establish
jurisdiction over adjacent waters and
case-specific waters interferes with
States’ primary responsibilities over the
planning and development of land and
water resources in conflict with CWA
section 101(b). The agencies also seek
comment on to what extent the 100-year
floodplain component of the 2015 Rule
conflicts with other federal regulatory
programs, and whether such a conflict
impacts State and local governments.
The agencies noted in 2015 ‘‘that the
vast majority of the nation’s water
features are located within 4,000 feet of
a covered tributary, traditional
navigable water, interstate water, or
territorial sea.’’ 71 The agencies’
broadening of certain key concepts and
terms relative to the prior regulatory
regime means that the agencies can
potentially review the ‘‘vast majority’’ of
water features in the country under the
2015 Rule, unless those features have
been excluded from the definition.
Similar concern was raised in response
to the July 27, 2017 NPRM, for example,
by the Missouri Department of Natural
Resources and Department of
Agriculture.72 The agencies seek
comment on that analysis and whether
the 2015 Rule readjusts the federal-state
70 See, e.g., comments submitted by Georgia
Municipal Association (Nov. 13, 2014) (Docket ID:
EPA–HQ–OW–2011–0880–14527), available at
https://www.regulations.gov/document?D=EPA-HQOW-2011-0880-14527; comments submitted by City
of St. Petersburg (Nov. 13, 2014) (Docket ID: EPA–
HQ–OW–2011–0880–18897), available at https://
www.regulations.gov/document?D=EPA-HQ-OW2011-0880-18897.
71 2015 Rule Economic Analysis at 11.
72 See comments submitted by the Missouri
Department of Natural Resources and Department of
Agriculture (Sept. 26, 2017) (Docket ID: EPA–HQ–
OW–2017–0203–13869), available at https://
www.regulations.gov/document?D=EPA-HQ-OW2017-0203-13869 (‘‘The broad definition of tributary
and the inclusion of a three-quarter mile buffer
around every tributary and impoundment, would
have cast a very broad jurisdictional umbrella over
the state; requiring significant nexus determinations
on all but a very few number of waters.’’).
PO 00000
Frm 00034
Fmt 4702
Sfmt 4702
balance in a manner contrary to the
congressionally determined policy in
CWA section 101(b). Indeed, when
issuing a preliminary injunction of the
2015 Rule, the Southern District of
Georgia held that ‘‘The [2015] WOTUS
Rule asserts jurisdiction over remote
and intermittent waters without
evidence that they have a nexus with
any navigable-in-fact waters.’’ Georgia,
2018 U.S. Dist. LEXIS 97223, at *19.
The agencies thus solicit comment on
whether the definitions in the 2015 Rule
would subject wholly intrastate or
physically remote waters or wetlands to
CWA jurisdiction, either categorically or
on a case-by-case basis, and request
information about the number and
scope of such waters of which
commenters may be aware.73
Further, the agencies solicit comment
about whether these, or any other,
aspects of the 2015 Rule as finalized
would, as either a de facto or de jure
matter, alter federal-state relationships
in the implementation of CWA
programs and State regulation of State
waters, and whether the 2015 Rule
appropriately implements the
Congressional policy of recognizing,
preserving, and protecting the primary
rights of states to plan the development
and use of land and water resources.
Because such findings would, if adopted
by the agencies, negate a key finding
underpinning the 2015 Rule, the
agencies request comment on whether
to repeal the 2015 Rule on this basis.
5. Additional Bases for Repealing the
2015 Rule That the Agencies Are
Considering
In addition to our proposed
conclusions that the 2015 Rule failed to
provide regulatory certainty and that it
exceeded the agencies’ authority under
the CWA, the agencies are also
considering several other supplemental
bases for repealing the 2015 Rule. These
are discussed below along with requests
for public comment.
Some commenters have suggested that
the 2015 Rule may exceed Congress’
power under the Commerce Clause. The
Supreme Court in SWANCC found that,
in enacting the CWA, Congress had in
mind as its authority ‘‘its traditional
jurisdiction over waters that were or had
been navigable in fact or which could
reasonably be so made.’’ 531 U.S. at 172.
The Court went on to construe the CWA
to avoid the significant constitutional
73 This includes whether the 2015 Rule is
supported by a ‘‘clear and manifest’’ statement
under the CWA to change the scope of traditional
state regulatory authority. See BFP v. Resolution
Trust Corp., 511 U.S. 531, 544 (1994); see also Bond
v. United States, 134 S. Ct. 2077, 2089–90 (2014);
SWANCC, 531 U.S. at 172–74.
E:\FR\FM\12JYP1.SGM
12JYP1
amozie on DSK3GDR082PROD with PROPOSALS1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
questions raised by the agencies’
assertion that the ‘‘ ‘Migratory Bird Rule’
falls within Congress’ power to regulate
intrastate activities that ‘substantially
affect’ interstate commerce.’’ Id. at 173.
The agencies are evaluating the
concerns, reflected in certain comments
received by the agencies, that many
features that are categorically
jurisdictional under the 2015 Rule, such
as wetlands that fall within the distance
thresholds of the definition of
‘‘neighboring,’’ test the limits of the
scope of the Commerce Clause because
they may not have the requisite effect on
the channels of interstate commerce.74
For example, according to certain
litigants challenging the 2015 Rule, the
‘‘seasonally ponded, abandoned gravel
mining depressions’’ specifically at
issue in SWANCC, 531 U.S. at 164,
which the Supreme Court determined
were ‘‘nonnavigable, isolated, intrastate
waters,’’ id. at 166–72, might be subject
to case-specific jurisdiction under the
2015 Rule. The depressions appear to be
located within 4,000 feet of Poplar
Creek, a tributary to the Fox River, and
may have the ability to store runoff or
contribute other ecological functions in
the watershed.
The agencies request comment,
including additional information, on
whether the water features at issue in
SWANCC or other similar water features
could be deemed jurisdictional under
the 2015 Rule, and whether such a
determination is consistent with or
otherwise well-within the agencies’
statutory authority, would be
unreasonable or go beyond the scope of
the CWA, and is consistent with Justice
Kennedy’s significant nexus test
expounded in Rapanos wherein he
stated, ‘‘[b]ecause such a [significant]
nexus was lacking with respect to
isolated ponds, the [SWANCC] Court
held that the plain text of the statute did
not permit’’ the Corps to assert
jurisdiction over them. See 547 U.S. at
767.
The examples identified in Section
II.C.3 above raise similar issues. The
abandoned borrow pit, for example,
discussed in Case Study C—AJD
Number MVM–2014–460, was
determined by the Corps in December
2014 to be an isolated water located
2,184 feet from a relatively permanent
body of water ‘‘with no substantial
nexus to interstate (or foreign)
commerce’’ (see Support Document), yet
74 Though the agencies have previously said that
the 2015 Rule is consistent with the Commerce
Clause and the CWA, the agencies are in the process
of considering whether it is more appropriate to
draw a jurisdictional line that ensures that the
agencies regulate well within our constitutional and
statutory bounds.
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
the agencies later stated the feature
would be jurisdictional under the 2015
Rule. In addition, the wetlands at issue
in Case Study B—AJD Number 2004–
001914 (see Support Document)
described above in Section II.C.3 were
located 583 feet from the Johlin Ditch
outside Toledo, Ohio, situated east of an
existing medical building and west of an
agricultural area. The wetlands were
determined by the Corps to be isolated,
lacking a surface connection to a water
of the United States and a substantial
nexus to interstate commerce. Those
wetlands, however, were later stated by
the agencies to be subject to CWA
jurisdiction under the 2015 Rule. The
agencies therefore solicit comment on
whether the 2015 Rule would cover
such wetlands and, if so, whether that
would exceed the CWA’s statutory
limits. See, e.g., SWANCC, 531 U.S. at
171–72, 174 (‘‘[W]e find nothing
approaching a clear statement from
Congress that it intended § 404(a) to
reach an abandoned sand and gravel
pit’’ that is ‘‘isolated.’’).
Interested parties are encouraged to
provide comment on whether the 2015
Rule is consistent with the statutory text
of the CWA and relevant Supreme Court
precedent, the limits of federal power
under the Commerce Clause as
specifically exercised by Congress in
enacting the CWA, and any applicable
legal requirements that pertain to the
scope of the agencies’ authority to
define the term ‘‘waters of the United
States.’’ The agencies also solicit
comment on any other issues that may
be relevant to the agencies’
consideration of whether to repeal the
2015 Rule, such as whether any
potential procedural deficiencies
limited effective public participation in
the development of the 2015 Rule.75
D. The Agencies’ Next Steps
In defining the term ‘‘waters of the
United States’’ under the CWA,
Congress gave the agencies broad
discretion to articulate reasonable limits
on the meaning of that term, consistent
with the Act’s text and its policies as set
forth in CWA section 101. In light of the
substantial litigation risk regarding
waters covered under the 2015 Rule,
and based on the agencies’ experience
and expertise in applying the CWA, the
agencies propose to repeal the 2015
Rule and put in place the prior
regulation. This is based on the
concerns articulated above and the
agencies’ concern that there may be
significant disruption to the
implementation of the Act and to the
75 See, e.g., Small Refiner Lead Phase-Down Task
Force v. EPA, 705 F.2d 506, 549 (DC Cir. 1983).
PO 00000
Frm 00035
Fmt 4702
Sfmt 4702
32249
public, including regulated entities, if
the 2015 Rule were vacated in part. The
agencies therefore propose to exercise
their discretion and policy judgment by
repealing the 2015 Rule permanently
and in its entirety because the agencies
believe that this approach is the most
appropriate means to remedy the
deficiencies of the 2015 Rule identified
above, address the litigation risk
surrounding the 2015 Rule, and restore
a regulatory process that has been in
place for years.
The agencies have considered other
alternatives that could have the effect of
addressing some of the potential
deficiencies identified, including
proposing revisions to specific elements
of the 2015 Rule, issuing revised
implementation guidance and
implementation manuals, and proposing
a further change to the February 6, 2020
applicability date of the 2015 Rule. The
agencies are soliciting comments on
whether any of these alternative
approaches would fully address and
ameliorate potential deficiencies in and
litigation risk associated with the 2015
Rule. Consistent with the President’s
Executive Order, the agencies are also
evaluating options for revising the
definition of ‘‘waters of the United
States.’’
The agencies are proposing to
permanently repeal the 2015 Rule at this
time, and are taking comment on
whether this proposal is the best and
most efficient approach to address the
potential deficiencies identified in this
notice and to provide the predictability
and regulatory certainty that alternative
approaches may not provide.
E. Effect of Repeal
The 2015 Rule amended longstanding
regulations contained in portions of 33
CFR part 328 and 40 CFR parts 110, 112,
116, 117, 122, 230, 232, 300, 302, and
401 by revising, removing, and redesignating certain paragraphs and
definitions in those regulations. In this
action, the agencies would repeal the
2015 Rule and restore the regulations in
existence immediately prior to the 2015
Rule. As such, if the agencies finalize
this proposal and repeal the 2015 Rule
and thus repeal those amendments, the
regulatory definitions of ‘‘waters of the
United States’’ in effect would be those
portions of 33 CFR part 328 and 40 CFR
parts 110, 112, 116, 117, 122, 230, 232,
300, 302, and 401 as they existed
immediately prior to the 2015 Rule’s
amendments. See, e.g., API v. EPA, 883
F.3d 918, 923 (DC Cir. 2018) (regulatory
criterion in effect immediately before
enactment of criterion that was vacated
by the court ‘‘replaces the now-vacated’’
criterion). Thus, if the agencies
E:\FR\FM\12JYP1.SGM
12JYP1
amozie on DSK3GDR082PROD with PROPOSALS1
32250
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
determine that repeal of the 2015 Rule
is appropriate, the agencies
concurrently would recodify the prior
regulation in the CFR, which would not
have the effect of creating a regulatory
vacuum, and the agencies need not
consider the potential consequences of
such a regulatory vacuum in light of
this. If this proposed rule is finalized,
the agencies propose to apply the prior
definition until a new definition of
CWA jurisdiction is finalized.
The current regulatory scheme for
determining CWA jurisdiction is
‘‘familiar, if imperfect,’’ In re EPA, 803
F.3d at 808, and the agencies and
regulated public have significant
experience operating under the
longstanding regulations that were
replaced by the 2015 Rule. The agencies
would continue to implement those
regulations, as they have for many years,
consistent with Supreme Court
decisions and practice, other case law
interpreting the rule, and informed by
agency guidance documents. Apart from
a roughly six-week period when the
2015 Rule was in effect in 37 States, the
agencies have continued to implement
the preexisting regulatory definitions as
a result of the court orders discussed in
Section I.B. above, as well as the final
rule adding an applicability date to the
2015 Rule (83 FR 5200, Feb. 6, 2018).
While the agencies acknowledge that
the 1986 and 1988 regulations have
been criticized and their application has
been narrowed by various legal
decisions, including SWANCC and
Rapanos, the longstanding nature of the
regulatory framework and its track
record of implementation makes it
preferable until the agencies propose
and finalize a replacement definition.
The agencies believe that, until a new
definition is completed, it is important
to retain the status quo that has been
implemented for many years rather than
the 2015 Rule, which has been and
continues to be mired in litigation.
In other words, restoration of the prior
regulatory text in the CFR, interpreted
in a manner consistent with Supreme
Court decisions, and informed by
applicable agency guidance documents
and longstanding practice, will ensure
that the scope of CWA jurisdiction will
be administered in the same manner as
it is now; as it was during the Sixth
Circuit’s lengthy, nationwide stay of the
2015 Rule; and as it was for many years
prior to the promulgation of the 2015
Rule. To be clear, the agencies are not
proposing a new definition of ‘‘waters of
the United States’’ in this specific
rulemaking separate from the definition
that existed immediately prior to the
2015 Rule. The agencies also are not
proposing to take this action in order to
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
fill a regulatory gap because no such gap
exists today. See 83 FR 5200, 5204.
Rather, the agencies are solely
proposing to repeal the 2015
amendments to the above-referenced
portions of the CFR and recodify the
prior regulatory text as it existed
immediately prior to the 2015 Rule’s
amendments.
III. Minimal Reliance Interests
Implicated by a Repeal of the 2015 Rule
More than 30,000 AJDs of individual
aquatic resources and other features
have been issued since August 28, 2015,
the effective date of the 2015 Rule.
However, less than two percent of the
AJDs of individual aquatic resources
were issued under the 2015 Rule
provisions in the six weeks the rule was
in effect in a portion of the country.76
The 2015 Rule was in effect in only 37
States for about six weeks between the
2015 Rule’s effective date and the Sixth
Circuit’s October 9, 2015 nationwide
stay order, see In re EPA, 803 F.3d 804
(6th Cir. 2015), and only 540 AJDs for
aquatic resources and other features
were issued during that short window of
time. The remainder of the AJDs issued
since August 28, 2015, were issued
under the regulations defining the term
‘‘waters of the United States’’ that were
in effect immediately before the
effective date of the 2015 Rule.
‘‘Sudden and unexplained change,
. . . or change that does not take
account of legitimate reliance on prior
[agency] interpretation, . . . may be
arbitrary, capricious [or] an abuse of
discretion[,] [b]ut if these pitfalls are
avoided, change is not invalidating[.]’’
Smiley v. Citibank (South Dakota), N.A.,
517 U.S. 735, 742 (1996) (internal
quotation marks and citations omitted).
Therefore, in proposing to repeal the
2015 Rule, the agencies are considering
any interests that may have developed
in reliance on the 2015 Rule, as well as
the potential harm to such reliance
interests from repealing the Rule against
the benefits. The agencies solicit
comment on whether the AJDs that were
issued under the 2015 Rule’s brief
tenure (and any ensuing reliance
interests that were developed) would be
adversely affected by the Rule’s repeal.
If the potential for such harm exists, the
agencies also solicit comment on
whether those harms outweigh the
potential benefits of repealing the 2015
Rule.
Clean Water Act Approved Jurisdictional
Determinations, available at https://
watersgeo.epa.gov/cwa/CWA-JDs, as of May 9, 2018.
The 2015 Rule was enjoined in 13 States by the U.S.
District Court for the District of North Dakota and
has never gone into effect in those States.
PO 00000
76 See
Frm 00036
Fmt 4702
Sfmt 4702
In staying the 2015 Rule nationwide,
the Sixth Circuit found no indication
‘‘that the integrity of the nation’s waters
will suffer imminent injury if the [2015
Rule] is not immediately implemented
and enforced.’’ In re EPA, 803 F.3d at
808. The Sixth Circuit wrote that the
‘‘burden—potentially visited
nationwide on governmental bodies,
state and federal, as well as private
parties—and the impact on the public in
general, implicated by the Rule’s
effective redrawing of jurisdictional
lines over certain of the nation’s waters’’
was of ‘‘greater concern.’’ Id. As a result,
the Sixth Circuit held that ‘‘the sheer
breadth of the ripple effects caused by
the Rule’s definitional changes counsels
strongly in favor of maintaining the
status quo for the time being.’’ Id. For
the reasons expounded in this notice
and the NPRM, the agencies believe that
any potential adverse reliance interests
are outweighed by the benefits of the
agencies’ proposed action. The agencies
therefore propose to repeal the 2015
Rule and request comment on that
proposal.
IV. Statutory and Executive Order
Reviews
A. Executive Order 12866: Regulatory
Planning and Review; Executive Order
13563: Improving Regulation and
Regulatory Review
This action is a significant regulatory
action that was submitted to the Office
of Management and Budget (OMB) for
review prior to the NPRM and again
prior to issuance of the SNPRM. Any
changes made in response to OMB
recommendations have been
documented in the docket.
While economic analyses are
informative in the rulemaking context,
the agencies are not relying on the
economic analysis performed pursuant
to Executive Orders 12866 and 13563
and related procedural requirements as
a basis for this proposed action. See,
e.g., NAHB, 682 F.3d at 1039–40 (noting
that the quality of an agency’s economic
analysis can be tested under the APA if
the ‘‘agency decides to rely on a costbenefit analysis as part of its
rulemaking’’).
B. Executive Order 13771: Reducing
Regulations and Controlling Regulatory
Cost
This rule is expected to be an
Executive Order 13771 deregulatory
action. Details on the estimated cost
savings of this proposed rule can be
found in the economic analysis that was
published together with the NPRM.
E:\FR\FM\12JYP1.SGM
12JYP1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
C. Paperwork Reduction Act
F. Executive Order 13132: Federalism
This proposed rule does not impose
any new information collection burdens
under the Paperwork Reduction Act.
Executive Order 13132 requires the
agencies to develop an accountable
process to ensure ‘‘meaningful and
timely input by state and local officials
in the development of regulatory
policies that have federalism
implications.’’ ‘‘Policies that have
federalism implication’’ is defined in
the Executive Order to include
regulations that have ‘‘substantial direct
effects on the States, on the relationship
between the national government and
the States, or on the distribution of
power and responsibilities among the
various levels of government.’’ Under
Executive Order 13132, the agencies
may not issue a regulation that has
federalism implications, that imposes
substantial direct compliance costs, and
that is not required by statute, unless
the federal government provides the
funds necessary to pay the direct
compliance costs incurred by state and
local government, or the agencies
consult with state and local officials
early in the process of developing the
proposed regulation. The agencies also
may not issue a regulation that has
federalism implications and that
preempts state law unless the agencies
consult with state and local officials
early in the process of developing the
proposed regulation.
This proposed rule will not have
substantial direct effects on the states,
on the relationship between the national
government and states, or on the
distribution of power and
responsibilities among the various
levels of government, as specified in
Executive Order 13132, because it
merely proposes to repeal a rule that
was in effect in only a portion of the
country for a short period of time, and
does not alter the relationship or the
distribution of power and
responsibilities established in the CWA.
The agencies are proposing to repeal the
2015 Rule in part because the 2015 Rule
may have impermissibly and materially
affected the states and the distribution
of power and responsibilities among the
various levels of government and
therefore likely should have been
characterized as having federalism
implications when promulgated in
2015. Thus, the requirements of section
6 of the Executive Order do not apply
to this proposed rule because it returns
the federal-state relationship to the
status quo.
D. Regulatory Flexibility Act
The Regulatory Flexibility Act
generally requires an agency to conduct
a regulatory flexibility analysis of any
rule subject to notice and comment
rulemaking requirements unless the
agency certifies that the rule will not
have a significant economic impact on
a substantial number of small entities.
Small entities include small businesses,
small not-for-profit enterprises, and
small governmental jurisdictions.
The proposed repeal of the 2015 Rule
is a deregulatory action that would
effectively maintain the status quo as
the agencies are currently implementing
it, and avoid the imposition of
potentially significant adverse economic
impacts on small entities in the future.
Details on the estimated cost savings of
this proposed rule can be found in the
economic analysis that was published
together with the NPRM. Accordingly,
after considering the potential economic
impacts of the proposed repeal action
on small entities, we certify that this
proposed action will not have a
significant economic impact on a
substantial number of small entities.
amozie on DSK3GDR082PROD with PROPOSALS1
E. Unfunded Mandates Reform Act
Under section 202 of the Unfunded
Mandates Reform Act of 1995 (UMRA),
signed into law on March 22, 1995, an
agency must prepare a budgetary impact
statement to accompany any proposed
or final rule that includes a federal
mandate that may result in estimated
cost to state, local, or tribal governments
in the aggregate, or to the private sector,
of $100 million or more. Under section
205 of the UMRA, the agency must
select the most cost-effective and least
burdensome alternative that achieves
the objectives of the rule and is
consistent with statutory requirements.
Section 203 requires the agency to
establish a plan for informing and
advising any small governments that
may be significantly or uniquely
impacted by the rule. This proposed
action does not contain any unfunded
mandate as described in the UMRA, and
does not significantly or uniquely affect
small governments. The definition of
‘‘waters of the United States’’ applies
broadly to CWA programs. The
proposed action imposes no enforceable
duty on any state, local, or tribal
governments, or the private sector, and
does not contain regulatory
requirements that significantly or
uniquely affect small governments.
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
G. Executive Order 13175: Consultation
and Coordination With Indian Tribal
Governments
Executive Order 13175, entitled
‘‘Consultation and Coordination with
PO 00000
Frm 00037
Fmt 4702
Sfmt 4702
32251
Indian Tribal Governments’’ (65 FR
67249, Nov. 9, 2000), requires the
agencies to develop an accountable
process to ensure ‘‘meaningful and
timely input by tribal officials in the
development of regulatory policies that
have tribal implications.’’ This proposed
rule does not have tribal implications,
as specified in Executive Order 13175.
This proposed rule will not have
substantial direct effects on tribal
governments, on the relationship
between the federal government and
Indian tribes, or on the distribution of
power and responsibilities between the
federal government and Indian tribes,
because it merely preserves the status
quo currently in effect today and in
effect immediately before promulgation
of the 2015 Rule. Thus, Executive Order
13175 does not apply to this proposed
rule. Consistent with E.O. 13175,
however, the agencies have and will
continue to consult with tribal officials,
as appropriate, as part of any future
rulemaking to define ‘‘waters of the
United States.’’
H. Executive Order 13045: Protection of
Children From Environmental Health
Risks and Safety Risks
Executive Order 13045, ‘‘Protection of
Children from Environmental Health
Risks and Safety Risks’’ (62 FR 19885,
Apr. 23, 1997), applies to any rule that:
(1) Is determined to be ‘‘economically
significant’’ as defined under Executive
Order 12866, and (2) concerns an
environmental health or safety risk that
an agency has reason to believe may
have a disproportionate effect on
children. If the regulatory action meets
both criteria, the agency must evaluate
the environmental health or safety
effects of the planned rule on children,
and explain why the planned regulation
is preferable to other potentially
effective and reasonably feasible
alternatives considered by the agency.
This proposed rule is not subject to
Executive Order 13045 because it does
not involve decisions intended to
mitigate environmental health or safety
risks.
I. Executive Order 13211: Actions
Concerning Regulations That
Significantly Affect Energy Supply,
Distribution, or Use
This rule is not subject to Executive
Order 13211, ‘‘Actions Concerning
Regulations That Significantly Affect
Energy Supply, Distribution, or Use’’ (66
FR 28355, May 22, 2001), because it is
not likely to have a significant adverse
effect on the supply, distribution, or use
of energy.
E:\FR\FM\12JYP1.SGM
12JYP1
32252
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
J. National Technology Transfer and
Advancement Act
Section 12 of the National Technology
Transfer and Advancement Act of 1995
requires federal agencies to evaluate
existing technical standards when
developing a new regulation. The
proposed rule does not involve
technical standards.
K. Executive Order 12898: Federal
Actions To Address Environmental
Justice in Minority Populations and
Low-Income Populations
This proposed rule maintains the
legal status quo. The agencies therefore
believe that this action does not have
disproportionately high and adverse
human health or environmental effects
on minority, low-income populations,
and/or indigenous peoples, as specified
in Executive Order 12898 (59 FR 7629,
Feb. 16, 1994).
List of Subjects
33 CFR Part 328
Environmental protection,
Administrative practice and procedure,
Navigation (water), Water pollution
control, Waterways.
40 CFR Part 110
Environmental protection, Oil
pollution, Reporting and recordkeeping
requirements.
40 CFR Part 112
Environmental protection, Oil
pollution, Penalties, Reporting and
recordkeeping requirements.
amozie on DSK3GDR082PROD with PROPOSALS1
40 CFR Part 116
Environmental protection, Hazardous
substances, Reporting and
recordkeeping requirements, Water
pollution control.
40 CFR Part 300
Environmental protection, Air
pollution control, Chemicals, Hazardous
substances, Hazardous waste,
Intergovernmental relations, Natural
resources, Occupational safety and
health, Oil pollution, Penalties,
Reporting and recordkeeping
requirements, Superfund, Water
pollution control, Water supply.
40 CFR Part 302
Environmental protection, Air
pollution control, Chemicals, Hazardous
substances, Hazardous waste,
Intergovernmental relations, Natural
resources, Reporting and recordkeeping
requirements, Superfund, Water
pollution control, Water supply.
40 CFR Part 401
Environmental protection, Waste
treatment and disposal, Water pollution
control.
■ For the reasons stated herein, the
agencies propose to amend 33 CFR part
328 and 40 CFR parts 110, 112, 116,
117, 122, 230, 232, 300, 302, and 401 of
the Code of Federal Regulations to
repeal the amendments that were
promulgated in the 2015 Rule and
reestablish the regulatory text that was
in place immediately prior to
promulgation of the 2015 Rule.
Dated: June 29, 2018.
E. Scott Pruitt,
Administrator, Environmental Protection
Agency.
Dated: June 29, 2018.
R.D. James,
Assistant Secretary of the Army (Civil Works).
[FR Doc. 2018–14679 Filed 7–11–18; 8:45 am]
BILLING CODE 6560–50–P
40 CFR Part 117
Environmental protection, Hazardous
substances, Penalties, Reporting and
recordkeeping requirements, Water
pollution control.
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
40 CFR Part 122
Environmental protection,
Administrative practice and procedure,
Confidential business information,
Hazardous substances, Reporting and
recordkeeping requirements, Water
pollution control.
42 CFR Part 447
40 CFR Part 230
Environmental protection, Water
pollution control.
40 CFR Part 232
Environmental protection,
Intergovernmental relations, Water
pollution control.
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
Centers for Medicare & Medicaid
Services
[CMS–2413–P]
RIN 0938–AT61
Medicaid Program; Reassignment of
Medicaid Provider Claims
Centers for Medicare &
Medicaid Services, Department of
Health and Human Services.
ACTION: Proposed rule.
AGENCIES:
This proposed rule would
remove the regulatory text that allows a
state to make payments to third parties
on behalf of an individual provider for
SUMMARY:
PO 00000
Frm 00038
Fmt 4702
Sfmt 4702
benefits such as health insurance, skills
training, and other benefits customary
for employees. We are concerned that
these provisions are overbroad, and
insufficiently linked to the exceptions
expressly permitted by the statute. As
we noted in our prior rulemaking,
section 1902(a)(32) of the Act provides
for a number of exceptions to the direct
payment requirement, but it does not
authorize the agency to create new
exceptions.
DATES: To be assured consideration,
comments must be received at one of
the addresses provided below, no later
than 5 p.m. on August 13, 2018.
ADDRESSES: In commenting, please refer
to file code CMS–2413–P. Because of
staff and resource limitations, we cannot
accept comments by facsimile (FAX)
transmission.
Comments, including mass comment
submissions, must be submitted in one
of the following three ways (please
choose only one of the ways listed):
1. Electronically. You may submit
electronic comments on this regulation
to http://www.regulations.gov. Follow
the ‘‘Submit a comment’’ instructions.
2. By regular mail. You may mail
written comments to the following
address ONLY: Centers for Medicare &
Medicaid Services, Department of
Health and Human Services, Attention:
CMS–2413–P, P.O. Box 8016, Baltimore,
MD 21244–8016.
Please allow sufficient time for mailed
comments to be received before the
close of the comment period.
3. By express or overnight mail. You
may send written comments to the
following address ONLY: Centers for
Medicare & Medicaid Services,
Department of Health and Human
Services, Attention: CMS–2413–P, Mail
Stop C4–26–05, 7500 Security
Boulevard, Baltimore, MD 21244–1850.
FOR FURTHER INFORMATION CONTACT:
Christopher Thompson, (410) 786–4044.
SUPPLEMENTARY INFORMATION: Inspection
of Public Comments: All comments
received before the close of the
comment period are available for
viewing by the public, including any
personally identifiable or confidential
business information that is included in
a comment. We post all comments
received before the close of the
comment period on the following
website as soon as possible after they
have been received: http://
www.regulations.gov. Follow the search
instructions on that website to view
public comments.
I. Background
The Medicaid program was
established by the Congress in 1965 to
E:\FR\FM\12JYP1.SGM
12JYP1
amozie on DSK3GDR082PROD with PROPOSALS1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
provide health care services for lowincome and disabled beneficiaries.
Section 1902(a)(32) of the Social
Security Act (the Act) requires direct
payment to providers who render
services to Medicaid beneficiaries. It
states that no payment under the plan
for care and services provided to an
individual shall be made to anyone
other than such individual or the person
or institution providing such care or
service, under an assignment or power
of attorney or otherwise.
We codified § 447.10 implementing
section 1902(a)(32) of the Act in the
‘‘Payment for Services’’ final rule
published on September 29, 1978 (43 FR
45253). The statute provides several
specific exceptions to the general
principle of requiring that direct
payment be made to the individual
provider. The regulations implementing
section 1902(a)(32) of the Act have
generally tracked the plain statutory
language and required direct payments
absent a statutory exception.
In 2012, we proposed a new
regulatory exception in the ‘‘Provider
Payment Reassignment, and Setting
Requirements for Community First
Choice’’ proposed rule published on
May 3, 2012 (77 FR 26361, 26406) for
‘‘a class of practitioners for which the
Medicaid program is the primary source
of service revenue’’ such as home health
care providers. We recognized in the
preamble to the proposed rule that
section 1902(a)(32) of the Act does not
authorize additional exceptions to the
direct payment requirement (See 77 FR
26382).
We received a total of 7 comments on
the proposed regulatory exception, all
generally supportive of the proposed
rule. This provision was finalized in the
‘‘Provider Payment Reassignment, and
Home and Community-Based Setting
Requirements for Community First
Choice and Home and CommunityBased Services (HCBS) Waivers’’ final
rule published on January 16, 2014 (79
FR 2947, 3001) and authorized a state to
make payments to third parties on
behalf of the individual provider ‘‘for
benefits such as health insurance, skills
training, and other benefits customary
for employees.’’
We are concerned that § 447.10(g)(4)
is overbroad, and insufficiently linked
to the exceptions expressly permitted by
the statute. As we noted in our prior
rulemaking, section 1902(a)(32) of the
Act provides for a number of exceptions
to the direct payment requirement, but
it does not authorize the agency to
create new exceptions. Therefore, the
regulatory provision grants permissions
that Congress has foreclosed, so we are
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
proposing to remove the regulatory
exception at § 447.10(g)(4).
II. Provisions of the Proposed
Regulations
This proposal would remove
§ 447.10(g)(4), but leave in place the
other provisions in § 447.10 including
the exceptions at § 447.10(e), (f) and
(g)(1) through (3). We seek comments
regarding how we might provide further
clarification on the types of payment
arrangements that would be permissible
assignments of Medicaid payments,
such as arrangements where a state
government withholds payments under
a valid assignment. Specifically, we
invite comments with examples of
payment withholding arrangements
between states and providers that we
should address.
With regard to section 1915(c),
1915(i), 1915(j), and 1915(k) authority,
this proposed rule will not impact a
state’s ability to perform Financial
Management Services (FMS) or secure
FMS through a vendor arrangement.
However, we also request comments on
whether and how the proposed removal
of § 447.10(g)(4) would impact selfdirected service models, where the
Medicaid beneficiary takes
responsibility for retaining and
managing his or her own services, and,
in some cases, may be performing
payroll and other employer-related
duties. We are especially interested in
comments that describe the additional
flexibilities needed to support
beneficiaries opting for self-directed
service models, which may ensure
stable, high-quality care for those
beneficiaries.
III. Collection of Information
Requirements
To the extent a state changes its
payment as a result of this rule, the state
would be required to notify entities of
the pending change in payment and
update its payment system. We believe
the associated burden is exempt from
the Paperwork Reduction Act (PRA) in
accordance with 5 CFR 1320.3(b)(2). We
believe that the time, effort, and
financial resources necessary to comply
with the aforementioned requirement
would be incurred by the state during
the normal course of their activities and,
therefore, should be considered usual
and customary business practices.
IV. Response to Comments
Because of the large number of public
comments we normally receive on
Federal Register documents, we are not
able to acknowledge or respond to them
individually. We will consider all
comments we receive by the date and
PO 00000
Frm 00039
Fmt 4702
Sfmt 4702
32253
time specified in the DATES section of
this preamble, and, when we proceed
with a subsequent document, we will
respond to the comments in the
preamble to that document.
V. Regulatory Impact Analysis
A. Statement of Need
We are concerned that § 447.10(g)(4)
is overbroad, and insufficiently linked
to the exceptions expressly permitted by
the statute. Therefore, the regulatory
provision grants permissions that
Congress has foreclosed. As we noted in
our prior rulemaking published on
January 16, 2014 (79 FR 2947, 3001),
section 1902(a)(32) of the Act provides
for a number of exceptions to the direct
payment requirement, but the language
does not explicitly authorize the agency
to create new exceptions. Therefore, we
are proposing to remove the regulatory
exception at § 447.10(g)(4). To the extent
a state increased reimbursement levels
to reassign portions of a provider’s
reimbursement to a third party,
implementation of this rule may affect
the rates that are set by the state in the
future.
B. Overall Impact
We have examined the impacts of this
proposed rule as required by Executive
Order 12866 on Regulatory Planning
and Review (September 30, 1993),
Executive Order 13563 on Improving
Regulation and Regulatory Review
(January 18, 2011), the Regulatory
Flexibility Act (RFA) (September 19,
1980, Pub. L. 96–354), section 1102(b) of
the Act, section 202 of the Unfunded
Mandates Reform Act of 1995 (March
22, 1995; Pub. L. 104–4), Executive
Order 13132 on Federalism (August 4,
1999), and the Congressional Review
Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563
directs agencies to assess all costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). Section 3(f) of Executive Order
12866 defines a ‘‘significant regulatory
action’’ as an action that is likely to
result in a rule that may: (1) Have an
annual effect on the economy of $100
million or more in any 1 year, or
adversely and materially affecting a
sector of the economy, productivity,
competition, jobs, the environment,
public health or safety, or state, local or
tribal governments or communities (also
referred to as ‘‘economically
significant’’); (2) create a serious
E:\FR\FM\12JYP1.SGM
12JYP1
32254
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS1
inconsistency or otherwise interfering
with an action taken or planned by
another agency; (3) materially alter the
budgetary impacts of entitlement grants,
user fees, or loan programs or the rights
and obligations of recipients thereof; or
(4) raise novel legal or policy issues
arising out of legal mandates, the
President’s priorities, or the principles
set forth in the Executive Order.
A regulatory impact analysis (RIA)
must be prepared for major rules with
economically significant effects ($100
million or more in any 1 year). We
estimate that this proposed rule could
be ‘‘economically significant’’ as it may
have an annual effect on the economy
in excess of the $100 million threshold
of Executive Order 12866, and hence
that this proposed rule is also a major
rule under the Congressional Review
Act. However there is considerable
uncertainty around this estimate and the
Department invites public comments to
help refine this analysis.
As discussed above, in the ‘‘Provider
Payment Reassignment, and Home and
Community-Based Setting Requirements
for Community First Choice and Home
and Community-Based Services (HCBS)
Waivers’’ final rule published on
January 16, 2014 (79 FR 2947, 3001), we
authorized a state to make payments to
third parties on behalf of the individual
provider ‘‘for benefits such as health
insurance, skills training, and other
benefits customary for employees.’’ We
lack information with which to quantify
the potential impacts of this policy on
these types of payments as the
Department does not formally track the
amount of reimbursement that is being
reassigned to third parties by states. To
offer one example, one such potential
impact of the proposed rulemaking
would be that states stop reassigning
homecare workers’ dues to unions. We
estimate that unions may currently
collect as much as $71 million from
such assignments.1 While we have not
1 Dues payments potentially associated with
policies of the type being proposed for revision
have been reported to be $8 million in Pennsylvania
and $10 million in Illinois (https://
www.fairnesscenter.org/cases/detail/protecting-thevulnerable and https://
www.washingtonexaminer.com/illinois-politiciansforced-home-care-workers-into-union-that-donatesheavily-to-them/article/2547368). The total
population is approximately 26 million in these two
states and 102 million across the states that have
been reported by the State Policy Network to have
relevant third-party payment policies (California,
Connecticut, Illinois, Maryland, Massachusetts,
Minnesota, Missouri, New Jersey, Oregon, Vermont
and Washington) (https://www2.census.gov/
programs-surveys/popest/tables/2010-2017/state/
totals/nst-est2017-01.xlsx and https://spn.org/duesskimming-faqs/). Factoring the $18 million (= $8
million + $10 million) proportionately by
population yields a nationwide total of
approximately $71 million in union dues payments
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
similarly quantified the amount of other
authorized reassignments, such as
health insurance, skills training, or
other benefits, we believe that the
amount of payments made to third
parties on behalf of individual providers
for the variety of benefits within the
scope of this rulemaking is likely in
excess of $100 million. We seek
comment on this estimate, and
particularly on the type and amount of
payments currently being reassigned
under the exceptions in § 447.10(g).
The potential direct financial impact
to providers of this policy change could
be affected by many factors, such as the
nature and amounts of the types of
payments currently being reassigned
and decisions made by homecare
providers after a final policy takes effect
about whether or not to resume
payments to third parties for these types
of benefits. The Department is unable to
quantify these direct financial impacts
in the absence of specific information
about the types and amount of payments
being reassigned. Even where it may be
possible to derive such estimates, such
as with the example of union dues, the
Department lacks information to reliably
estimate the proportion of homecare
providers likely to stop making
payments versus those likely to
continue making payments through
alternative means. We request
comments on the factors that might
influence the direct financial impacts to
providers and recipients of
reassignments of this policy change for
the varied types and amount of
payments currently being reassigned
under the exceptions in § 447.10(g).
Although states will no longer be able
to withhold portions of a provider’s
payment, states may elect to maintain
the same level of payment, thus
affording the provider the opportunity
to purchase the items that were
previously funded through the
reassignment of reimbursement.
Conversely, states may elect to decrease
payment levels because rescission of
§ 447.10(g)(4) will limit their ability to
reassign payment to third parties. In
other words, states may have previously
factored their ability to reassign
provider payments into their payment
rates and might choose to revise their
rates in response to this regulatory
change. We request comments,
particularly from states, on potential
potentially affected by this proposed rule. This
transfer estimate could be over- or understated if
other states pay home care workers different
average wages than Pennsylvania and Illinois, if
dues payments are collected at different rates, or if
participation in Medicaid home care programs is
not proportionate to total population.
PO 00000
Frm 00040
Fmt 4702
Sfmt 4702
state behavior under the proposed
policy.
If a state elected to maintain the same
level of payment, and if homecare
providers opt to continue all voluntary
payments presently being reassigned,
then the rule may have no impacts.
However, if a state elected to reduce
payment levels and/or if homecare
providers opt to discontinue all
voluntary payments, then the impacts of
the rule may be close to the full amount
of current reassignments, thus making
the rule economically significant.
While it is difficult for us to conduct
a detailed quantitative analysis given
this considerable uncertainty and lack
of data, we believe that without this
proposed rulemaking, states may apply
the exceptions at § 447.10(g) in ways
that do not comport with section
1902(a)(32) of the Act and we welcome
comment with regard to the quantitative
impact of the elimination of states’
ability to reassign Medicaid payment for
items such as health insurance, skills
training and other benefits customary
for employees. We also seek comments
identifying impacts to states and the
federal government as a result of this
proposed rule, including on the
assumption that the time, effort and
financial resources necessary to comply
with the proposed requirement would
be incurred by states during the normal
course of their activities and, therefore,
does not impose incremental costs.
C. Anticipated Effects
The RFA requires agencies to analyze
options for regulatory relief of small
entities. For purposes of the RFA, small
entities include small businesses,
nonprofit organizations, and small
governmental jurisdictions. Most
hospitals and most other providers and
suppliers are small entities, either by
nonprofit status or by having revenues
of less than $7.5 million to $38.5
million in any 1 year. Individuals and
states are not included in the definition
of a small entity. We are not preparing
an analysis for the RFA because we have
determined, and the Secretary proposes
to certify, that this proposed rule would
not have a significant economic impact
on a substantial number of small
entities.
In addition, section 1102(b) of the Act
requires us to prepare an RIA if a rule
may have a significant impact on the
operations of a substantial number of
small rural hospitals. This analysis must
conform to the provisions of section 603
of the RFA. For purposes of section
1102(b) of the Act, we define a small
rural hospital as a hospital that is
located outside of a Metropolitan
Statistical Area for Medicare payment
E:\FR\FM\12JYP1.SGM
12JYP1
32255
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
regulations and has fewer than 100
beds. We are not preparing an analysis
for section 1102(b) of the Act because
we have determined, and the Secretary
proposes to certify, that this proposed
rule would not have a significant impact
on the operations of a substantial
number of small rural hospitals.
Section 202 of the Unfunded
Mandates Reform Act of 1995 also
requires that agencies assess anticipated
costs and benefits before issuing any
rule whose mandates require spending
in any 1 year of $100 million in 1995
dollars, updated annually for inflation.
In 2018, that threshold is approximately
$150 million. This rule will have no
consequential effect on state, local, or
tribal governments or on the private
sector.
Executive Order 13132 establishes
certain requirements that an agency
must meet when it promulgates a
proposed rule (and subsequent final
rule) that imposes substantial direct
requirement costs on state and local
governments, preempts state law, or
otherwise has Federalism implications.
Since this regulation does not impose
any costs on state or local governments,
the requirements of Executive Order
13132 are not applicable.
D. Alternatives Considered
We considered issuing guidance to
require states to formally document
consent to reassign portions of a
provider’s payment. We also considered
limiting the items for which provider
reassignment could be made. However,
we are concerned that § 447.10(g)(4)) is
overbroad, and insufficiently linked to
the exceptions expressly permitted by
the statute. Therefore, we believe
removing the regulatory exception is the
best course of action.
E. Accounting Statement
As required by OMB Circular A–4
under Executive Order 12866 (available
at https://www.whitehouse.gov/sites/
whitehouse.gov/files/omb/circulars/A4/
a-4.pdf) in Table 1, we have prepared an
accounting statement showing the
classification of transfers associated
with the provisions in this proposed
rule. The accounting statement is based
on estimates provided in this regulatory
impact analysis and omits categories of
impacts for which partial quantification
has not been possible.
TABLE 1—ACCOUNTING STATEMENT
Units
Category
Low estimate
High estimate
Year dollars
Transfers:
Annualized Monetized $ millions/year ..........................
0
0
From whom to whom? ..................................................
F. Regulatory Reform Analysis Under
E.O. 13771
Executive Order 13771, entitled
‘‘Reducing Regulation and Controlling
Regulatory Costs,’’ was issued on
January 30, 2017 and requires that the
costs associated with significant new
regulations ‘‘shall, to the extent
permitted by law, be offset by the
elimination of existing costs associated
with at least two prior regulations.’’
This proposed rule is not expected to be
subject to the requirements of E.O.
13771 because this proposed rule is
expected to result in no more than de
minimis costs.
amozie on DSK3GDR082PROD with PROPOSALS1
G. Conclusion
In accordance with the provisions of
Executive Order 12866, this proposed
rule was reviewed by the Office of
Management and Budget.
List of Subjects in 42 CFR Part 447
Accounting, Administrative practice
and procedure, Drugs, Grant programs—
health, Health facilities, Health
professions, Medicaid, Reporting and
recordkeeping requirements, Rural
areas.
For the reasons set forth in the
preamble, the Centers for Medicare &
Medicaid Services proposes to amend
42 CFR chapter IV as set forth below:
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
$71
71
Discount rate
(%)
2017
2017
Period
covered
3
7
From third parties to home health providers.
PART 447—PAYMENTS FOR
SERVICES
FEDERAL COMMUNICATIONS
COMMISSION
1. The authority citation for part 447
continues to read as follows:
47 CFR Part 73
■
Authority: Sec. 1102 of the Social Security
Act (42 U.S.C. 1302).
§ 447.10
[Amended]
2. Section 447.10 is amended by
removing paragraph (g)(4).
■
Dated: May 3, 2018.
Seema Verma,
Administrator, Centers for Medicare &
Medicaid Services.
Dated: May 7, 2018.
Alex M. Azar II,
Secretary, Department of Health and Human
Services.
[FR Doc. 2018–14786 Filed 7–10–18; 11:15 am]
BILLING CODE 4120–01–P
PO 00000
2019
2019
Frm 00041
Fmt 4702
Sfmt 4702
[MB Docket No. 18–184; FCC 18–69]
New FM Radio Broadcast Class C4 and
To Modify the Requirements for
Designating Short-Spaced
Assignments
Federal Communications
Commission.
ACTION: Notice of inquiry.
AGENCY:
In this document, the
Commission adopted a Notice of Inquiry
(NOI), based on a petition for
rulemaking filed by SSR
Communications, Inc., in which the
Commission sought comment on a
proposal to create a new class of FM
radio stations, Class C4, and to establish
a procedure for designating certain FM
stations.
DATES: Comments may be filed on or
before August 13, 2018 and reply
comments may be filed on or before
September 10, 2018.
ADDRESSES: You may submit comments,
identified by MB Docket No. 18–184, by
any of the following methods:
• Federal Communications
Commission’s Website: http://
SUMMARY:
E:\FR\FM\12JYP1.SGM
12JYP1
amozie on DSK3GDR082PROD with PROPOSALS1
32256
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
www.fcc.gov/cgb/ecfs/. Follow the
instructions for submitting comments.
• Mail: Filings can be sent by hand or
messenger delivery, by commercial
overnight courier, or by first-class or
overnight U.S. Postal Service mail. All
filings must be addressed to the
Commission’s Secretary, Office of the
Secretary, Federal Communications
Commission.
• People With Disabilities: Contact
the FCC to request reasonable
accommodations (accessible format
documents, sign language interpreters,
CART, etc.) by email: [email protected]
or phone: (202) 418–0530 or TTY: (202)
418–0432. For detailed instructions for
submitting comments and additional
information on the rulemaking process,
see the SUPPLEMENTARY INFORMATION
section of this document.
FOR FURTHER INFORMATION CONTACT:
Albert Shuldiner, Chief, Media Bureau,
Audio Division, (202) 418–2721; James
Bradshaw, Deputy Division Chief,
Media Bureau, Audio Division, (202)
418–2739. Direct press inquiries to
Janice Wise at (202) 418–8165.
SUPPLEMENTARY INFORMATION: This is a
summary of the Commission’s Notice of
Inquiry, FCC 18–69, adopted June 4,
2018, and released June 5, 2018. The
full text of this document is available
electronically via the FCC’s Electronic
Document Management System
(EDOCS) website at http://https://
www.fcc.gov/edocs or via the FCC’s
Electronic Comment Filing System
(ECFS) website at http://https://
www.fcc.gov/ecfs/. (Documents will be
available electronically in ASCII,
Microsoft Word, and/or Adobe Acrobat.)
This document is also available for
public inspection and copying during
regular business hours in the FCC
Reference Information Center, which is
located in Room CY–A257 at FCC
Headquarters, 445 12th Street SW,
Washington, DC 20554. The Reference
Information Center is open to the public
Monday through Thursday from 8:00
a.m. to 4:30 p.m. and Friday from 8:00
a.m. to 11:30 a.m. Alternative formats
are available for people with disabilities
(braille, large print, electronic files,
audio format), by sending an email to
[email protected] or calling the
Commission’s Consumer and
Governmental Affairs Bureau at (202)
418–0530 (voice), (202) 418–0432
(TTY).
Synopsis of Notice of Inquiry
1. Introduction. In this Notice of
Inquiry (NOI), the Commission explores
the possibility of amending part 73 of
the Commission’s Rules to create an
intermediate class of FM broadcast
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
stations in Zone II between Class A and
Class C3, to be designated Class C4.
Commission staff estimates that 127
Class C3 stations, or 14 percent of the
total number of Class C3 stations, are
operating with facilities that are less
than the proposed Class C3 minimums
and thus could be subject to
reclassification to Class C4. It also
explores the possibility of establishing a
procedure whereby an FM station in the
non-reserved band (Channels 221–300),
regardless of Zone or station class, could
be designated as a Section 73.215
facility, resulting in such station
receiving interference protection based
on its actual authorized operating
parameters rather than the maximum
permitted parameters for its station
class.
2. Class C4 proposal. This proceeding
was initiated by a petition for
rulemaking filed by SSR
Communications, Inc. (SSR). SSR
advocates the creation of a new Class C4
with an effective radiated power (ERP)
that must exceed 6 kilowatts, a
maximum ERP of 12 kilowatts, and a
reference HAAT of 100 meters. The ERP
that Class C3 stations must exceed
would increase from 6 kilowatts to 12
kilowatts, but the maximum ERP would
remain at 25 kilowatts. In addition,
under the current rules, a station can
operate below the minimum ERP for its
class provided its HAAT allows it to
exceed the class contour distance for the
next lower class (for example, a Class C3
station must exceed the Class A contour
distance of 28 kilometers). Under the
SSR proposal, the next lower class for
a Class C3 station would be Class C4,
with a contour distance of 33
kilometers. SSR proposes amending
Sections 73.207(b)(1), 73.210(a),
73.210(b), 73.211(a)(1), 73.211(b), and
73.215(e) of the Rules to implement
these changes. SSR argues that a new
Class C4 would provide upgrade
opportunities for Class A facilities,
particularly minority-owned stations,
and create consistent ERP intervals
between FM classes.
3. Affected stations and their
listeners. Would the creation of a Class
C4 materially benefit existing Class A
stations by providing them with an
opportunity to upgrade that is not
possible today based on the current
Class C3 parameters? Would Class A
stations and their listeners, particularly
in rural or underserved areas, benefit
from the new Class C4? Is there a
significant demand for the rule changes
proposed by SSR? How many stations
are likely to be affected by such a rule
change? As suggested by SSR, would the
creation of a Class C4 be particularly
beneficial for minority-owned Class A
PO 00000
Frm 00042
Fmt 4702
Sfmt 4702
stations by providing them with an
opportunity to upgrade? Would this
action encourage diversity of ownership
in the FM broadcast industry? Would
there be a detrimental effect on existing
stations and/or their listeners generally,
either from increased interference or
reclassification (upgrade or downgrade)?
4. Secondary services. How would a
new Class C4 affect secondary services
(FM translators and LPFM stations), as
well as AM primary stations that
rebroadcast on FM translator stations?
Are there lawful ways to mitigate or
eliminate the impact of this proposal on
secondary services, and, if so, what
measures would be effective or
appropriate? To what extent, if any,
does the Local Community Radio Act of
2010 (LCRA) impact the Commission’s
ability to protect existing FM translator
and LPFM stations? In particular, would
such protections be consistent with the
LCRA directive that the ‘‘Federal
Communications Commission, when
licensing new FM translators, FM
booster stations, and low-power FM
stations . . . ensure . . . that . . . (3)
[these stations] remain equal in status
and secondary to existing and modified
full-service FM stations’’? In this
respect, the Commission notes that it
would be reluctant to adopt any
proposal in this area that would have a
significantly negative impact on FM
translators and LPFM stations.
5. Allocation goals. Given the
maturity of the FM service, would an
increased density of signals resulting
from Class A stations upgrading to Class
C4 provide improved FM service
coverage, or merely contribute to a
higher ‘‘noise floor’’ overall while only
modestly benefiting individual stations?
Would upgrades to Class C4 increase the
overall number of radio stations
available to listeners or create
interference that would degrade
reception for stations in areas where
there is currently a listenable signal,
resulting in fewer listening choices for
listeners? More generally, is there a
‘‘tipping point’’ at which increasingly
granular station classifications are no
longer conducive to efficient signal
coverage and, if so, has that point been
reached?
6. Implementation procedures. What
is the appropriate balance of interests
between the anticipated benefit of
creating a new class of FM stations and
the disruption entailed in the
reclassification of existing stations? If a
new class is created, should the
Commission implement a blanket
reclassification process, as it did in 1983
and 1989, by requiring existing Class C3
stations to file for modification to meet
the proposed revised minimum facility
E:\FR\FM\12JYP1.SGM
12JYP1
amozie on DSK3GDR082PROD with PROPOSALS1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
requirements for Class C3 stations
within a set time frame or be reclassified
based on their actual operating
facilities? Should the mere filing for a
modification be sufficient to avoid
reclassification or should the
Commission also require construction to
be completed by a date certain? If a date
certain is set for filing a modification or
completing construction, what would be
a reasonable amount of time for
licensees to comply? Would a blanket
reclassification provide more reliable
and timely opportunities for upgrade
than the show cause procedure outlined
in the next paragraph?
7. Alternatively, should the
Commission adopt a show cause
procedure similar to that currently in
use for Class C0, whereby a Class C3
station operating below the proposed
revised minimum facility requirements
for Class C3 stations would be
reclassified only after the filing of a
‘‘triggering’’ application that requires it
to be reclassified to Class C4? Should
the affected Class C3 station have the
opportunity to preserve its Class C3
status by filing a construction permit
application to upgrade its facility to
meet Class C3 minimums? The
Commission notes that the
Commission’s licensing staff has found
that the Class C0 show cause procedure
appears to incentivize delay and
contention between the parties. Have
licensees experienced delay or other
difficulties using the Class C0 show
cause procedure? Is the blanket
reclassification process described in the
preceding paragraph preferable for that
reason? Are there other implementation
approaches the Commission should
consider that might address or avoid
problems identified with this show
cause procedure?
8. Other issues. To what extent, if any,
does the LCRA impact the
Commission’s creation of a new class of
FM stations or reclassification of
existing FM stations; in particular, the
provision that the Commission ‘‘shall
not amend its rules to reduce the
minimum co-channel and first- and
second-adjacent channel distance
separation requirements in effect on
[January 4, 2011] between—(A) lowpower FM stations; and (B) full-service
FM stations’’? Are there specific rule
changes that would be necessary or
advisable to implement any of the
foregoing proposals? The Commission
also invites commenters to make
suggestions as to how the Commission’s
forms and databases should be modified
to implement the above proposals.
9. Section 73.215 proposal. SSR
argues that, by providing interference
protection to a station’s contours based
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
on maximum class facilities, as opposed
to the actual facilities, the Commission’s
rules overprotect stations operating with
facilities below their class maximum.
Accordingly, SSR proposes an
amendment to Section 73.3573 of the
Rules that would require such ‘‘submaximum’’ stations to be designated as
Section 73.215 facilities using a
procedure similar to the existing Class
C0 show cause and reclassification
procedure. Designation as a Section
73.215 facility would result in the submaximum station receiving interference
protection based on its actual
authorized operating parameters rather
than the maximum permitted
parameters for its station class. Under
SSR’s proposed procedure, stations not
already authorized under Section 73.215
that, for ten years prior to the filing of
a triggering application, have
continuously operated with a HAAT or
ERP below that of the class maximum
(or equivalent class maximum HAAT
and ERP combination in the case of
station operating with a HAAT
exceeding its reference HAAT) would be
given an opportunity to upgrade to
maximum class facilities or be subject to
designation as a Section 73.215 facility.
10. SSR recommends a show cause
procedure to implement its Section
73.215 proposal. Specifically, the
procedure would be initiated by the
filing of a ‘‘triggering’’ application that
specifies facilities that require the
designation of the affected submaximum station as a Section 73.215
facility. Triggering applications may
utilize Section 73.215 and must certify
that no alternative channel is available
for the proposed service. Copies of a
triggering application and related
pleadings would be required to be
served on the licensee of the affected
sub-maximum station. If the staff
concludes that a triggering application
is acceptable for filing, it would issue an
order to show cause why the affected
sub-maximum station should not be
designated as a Section 73.215 station.
The order to show cause would provide
the licensee of the sub-maximum station
30 days to express in writing an
intention to seek authority to modify its
technical facilities to its maximum class
HAAT and ERP (or equivalent
combination thereof) or to otherwise
challenge the triggering application. If
no such intention is expressed and the
triggering application is not challenged,
the affected sub-maximum station
would be designated as a Section 73.215
station and processing of the triggering
application would be completed. If such
intention is expressed within the 30-day
period, an additional 180-day period
PO 00000
Frm 00043
Fmt 4702
Sfmt 4702
32257
would be provided during which the
licensee of the sub-maximum station
would be required to file an acceptable
construction permit application to
increase HAAT and/or ERP to its class
maximum values (or equivalent
combination thereof). Upon grant of
such a construction permit application,
the triggering application would be
dismissed. As with Class C0
reclassifications, the licensee of the submaximum station would be required to
serve on triggering applicants copies of
any FAA submissions related to the
application grant process. If the
construction is not completed as
authorized, the affected sub-maximum
station would be automatically
designated as a Section 73.215 facility.
SSR’s proposal raises issues similar to
those posed by the Class C4 proposal,
and the Commission seeks comment
generally on the costs and benefits of
the proposal.
11. Affected stations and their
listeners. Would the proposed Section
73.215 mechanism materially benefit
stations seeking to upgrade and their
listeners? What is the demand for such
upgrades? Would there be a
corresponding detrimental effect on
listeners regarding loss of existing
interference-free service provided by
sub-maximum stations? The
Commission has explained that its
policy of protecting all stations as if
they are operating at maximum
permitted height or power for their
class, even if they are in fact operating
at or near the minimum permitted
height and power for their class,
‘‘permits stations to improve technical
facilities over time and provides a
certain degree of flexibility for
transmitter relocations.’’ To what extent
would adoption of the Section 73.215
proposal undermine this policy? Is this
policy still desirable in the mature FM
service? What are the relevant factors
that might affect the sub-maximum
station’s ability to upgrade to the class
maximums, and have those factors
changed due to technological or other
developments? If a station has operated
below maximum facilities for a
sufficient period of time, can the
Commission conclude that the station is
either unwilling or unable to operate at
maximum facilities, thereby justifying
protecting such station based on actual
operating parameters and allowing for
more efficient utilization of FM
spectrum? Is ten years of continuous
‘‘sub-maximum’’ operation the
appropriate period of time before a
station would be subject to involuntary
Section 73.215 designation, as suggested
by SSR, or is another period of time
E:\FR\FM\12JYP1.SGM
12JYP1
amozie on DSK3GDR082PROD with PROPOSALS1
32258
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
appropriate? To what extent should
transfers of control or assignments of
licensees impact the relevant time
period? That is, should the time period
apply per station or per licensee? For
example, if the relevant time period is
ten years and a station that has operated
below class maximums for nine years is
transferred or assigned to a third-party,
should the new licensee have ten
additional years to upgrade to class
maximums free from potential
designation as a Section 73.215 facility?
12. Secondary services. The
Commission seeks comment on the
likely impact of full service station
upgrades using the proposed Section
73.215 procedure on nearby secondary
services or AM primary stations that
rebroadcast on FM translator stations.
Are there lawful ways to mitigate or
eliminate the impact of this proposal on
secondary services, and, if so, what
measures would be effective or
appropriate?
13. Allocation goals. Would SSR’s
Section 73.215 proposal, if adopted,
result in increased interference levels in
the FM band? In particular, would the
increased density of signals resulting
from upgraded stations provide
improved FM service coverage, or
merely contribute to a higher ‘‘noise
floor’’ overall while only modestly
benefiting individual stations? Is this
proposal in tension with the original
purpose of Section 73.215 to afford
applicants greater flexibility in the
selection of transmitter sites? Should
the Commission significantly expand
the applicability of Section 73.215 as
proposed by SSR, and what would be
the policy and legal justifications for
doing so? Does the Commission’s long
history of licensing thousands of
stations in the reserved band—using a
contour methodology based on stations’
authorized facilities—show that
expanding eligibility for Section 73.215
processing would result in increased or
decreased services for listeners?
14. Implementation procedures. If the
Section 73.215 proposal is adopted,
should the Commission follow SSR’s
suggested procedures, which are based
on those currently in use for Class C0?
Should the triggering applicant be
required to certify that no alternative
channel is available for the proposed
service? Should the Commission use a
show cause procedure, and if so, what
deadlines would be appropriate?
15. Alternatively, should the
Commission adopt a more streamlined
procedure whereby all sub-maximum
stations would be provided a date
certain by which they must file an
upgrade application or automatically
become subject to immediate
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
designation as a Section 73.215 facility
upon the filing of an acceptable
application from another licensee
seeking to upgrade its facilities? What
would be a reasonable amount of time
to allow sub-maximum stations to file
upgrade applications before becoming
subject to automatic designation as a
Section 73.215 facility? Would such a
procedure avoid unnecessary delays in
providing new FM service and
incentivize more stations to upgrade to
their class maximums? Would there be
any disadvantages with this approach?
Are there other streamlined
implementation approaches the
Commission should consider?
16. Other issues. The Commission
invites comment on other details of
SSR’s Section 73.215 proposal. Which
applicants should be permitted to use
the proposed Section 73.215 procedure?
Does ‘‘sub-maximum’’ include all
stations operating at less than class
maximums, or should the Commission
establish a cutoff whereby a station
would not be subject to designation as
a Section 73.215 facility if it operates at
a minimal distance below its class
maximum contour distance, such as two
kilometers? How would the proposal
affect stations that are short-spaced
under Section 73.213 of the Rules? Are
there specific rule changes that would
be necessary to implement the proposal?
The Commission also invites
commenters to make suggestions as to
how its forms and databases should be
modified to implement the Section
73.215 proposal.
17. Federal Rules that May Duplicate,
Overlap, or Conflict with the Proposed
Rule. None.
Ex Parte Rules
18. Permit But Disclose. The
proceeding this NOI initiates shall be
treated as a ‘‘permit-but-disclose’’
proceeding in accordance with the
Commission’s ex parte rules. Ex parte
presentations are permissible if
disclosed in accordance with
Commission rules, except during the
Sunshine Agenda period when
presentations, ex parte or otherwise, are
generally prohibited. Persons making ex
parte presentations must file a copy of
any written presentation or a
memorandum summarizing any oral
presentation within two business days
after the presentation (unless a different
deadline applicable to the Sunshine
period applies). Persons making oral ex
parte presentations are reminded that
memoranda summarizing the
presentation must (1) list all persons
attending or otherwise participating in
the meeting at which the ex parte
presentation was made, and (2)
PO 00000
Frm 00044
Fmt 4702
Sfmt 4702
summarize all data presented and
arguments made during the
presentation. Memoranda must contain
a summary of the substance of the ex
parte presentation and not merely a
listing of the subjects discussed. More
than a one or two sentence description
of the views and arguments presented is
generally required. If the presentation
consisted in whole or in part of the
presentation of data or arguments
already reflected in the presenter’s
written comments, memoranda or other
filings in the proceeding, the presenter
may provide citations to such data or
arguments in his or her prior comments,
memoranda, or other filings (specifying
the relevant page and/or paragraph
numbers where such data or arguments
can be found) in lieu of summarizing
them in the memorandum. Documents
shown or given to Commission staff
during ex parte meetings are deemed to
be written ex parte presentations and
must be filed consistent with § 1.1206(b)
of the rules. In proceedings governed by
§ 1.49(f) of the rules or for which the
Commission has made available a
method of electronic filing, written ex
parte presentations and memoranda
summarizing oral ex parte
presentations, and all attachments
thereto, must be filed through the
electronic comment filing system
available for that proceeding, and must
be filed in their native format (e.g., .doc,
.xml, .ppt, searchable .pdf). Participants
in this proceeding should familiarize
themselves with the Commission’s ex
parte rules.
Filing Procedures
19. Pursuant to §§ 1.415 and 1.419 of
the Commission’s rules, 47 CFR 1.415,
1.419, interested parties may file
comments and reply comments on or
before the dates indicated on the first
page of this document. Comments may
be filed using the Commission’s
Electronic Comment Filing System
(ECFS). Electronic Filers: Comments
may be filed electronically using the
internet by accessing the ECFS: http://
apps.fcc.gov/ecfs/.
D Electronic Filers: Comments may be
filed electronically using the internet by
accessing the ECFS: http://apps.fcc.gov/
ecfs/.
D Paper Filers: Parties who choose to
file by paper must file an original and
one copy of each filing. If more than one
docket or rulemaking number appears in
the caption of this proceeding, filers
must submit two additional copies for
each additional docket or rulemaking
number.
D Filings can be sent by hand or
messenger delivery, by commercial
overnight courier, or by first-class or
E:\FR\FM\12JYP1.SGM
12JYP1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS1
overnight U.S. Postal Service mail. All
filings must be addressed to the
Commission’s Secretary, Office of the
Secretary, Federal Communications
Commission.
D All hand-delivered or messengerdelivered paper filings for the
Commission’s Secretary must be
delivered to FCC Headquarters at 445
12th St. SW, Room TW–A325,
Washington, DC 20554. The filing hours
are 8:00 a.m. to 7:00 p.m. All hand
deliveries must be held together with
rubber bands or fasteners. Any
envelopes and boxes must be disposed
of before entering the building.
VerDate Sep<11>2014
16:28 Jul 11, 2018
Jkt 244001
D Commercial overnight mail (other
than U.S. Postal Service Express Mail
and Priority Mail) must be sent to 9050
Junction Drive, Annapolis Junction, MD
20701.
D U.S. Postal Service first-class,
Express, and Priority mail must be
addressed to 445 12th Street SW,
Washington DC 20554.
D People with Disabilities: To request
materials in accessible formats for
people with disabilities (braille, large
print, electronic files, audio format),
send an email to [email protected] or call
the Consumer & Governmental Affairs
Bureau at 202–418–0530 (voice), 202–
418–0432 (tty).
PO 00000
Frm 00045
Fmt 4702
Sfmt 9990
32259
Ordering Clause
20. It is further ordered that, pursuant
to the authority contained in Sections 1,
4(i), 4(j), 301, 303, 307, 308, 309, 316,
and 319 of the Communications Act of
1934, as amended, 47 U.S.C. 151, 154(i),
154(j), 301, 303, 307, 308, 309, 316, and
319, this Notice of Inquiry is adopted.
Federal Communications Commission.
Marlene Dortch,
Secretary.
[FR Doc. 2018–14880 Filed 7–11–18; 8:45 am]
BILLING CODE 6712–01–P
E:\FR\FM\12JYP1.SGM
12JYP1
32260
Notices
Federal Register
Vol. 83, No. 134
Thursday, July 12, 2018
This section of the FEDERAL REGISTER
contains documents other than rules or
proposed rules that are applicable to the
public. Notices of hearings and investigations,
committee meetings, agency decisions and
rulings, delegations of authority, filing of
petitions and applications and agency
statements of organization and functions are
examples of documents appearing in this
section.
DEPARTMENT OF AGRICULTURE
Animal and Plant Health Inspection
Service
[Docket No. APHIS–2018–0032]
Notice of Request for Revision to and
Extension of Approval of an
Information Collection; Animal Welfare
Animal and Plant Health
Inspection Service, USDA.
ACTION: Revision to and extension of
approval of an information collection;
comment request.
AGENCY:
In accordance with the
Paperwork Reduction Act of 1995, this
notice announces the Animal and Plant
Health Inspection Service’s intention to
request a revision to and extension of
approval of an information collection
associated with the Animal Welfare Act
regulations for the humane handling,
care, treatment, and transportation of
certain animals by dealers, research
facilities, exhibitors, carriers, and
intermediate handlers.
DATES: We will consider all comments
that we receive on or before September
10, 2018.
ADDRESSES: You may submit comments
by either of the following methods:
• Federal eRulemaking Portal: Go to
http://www.regulations.gov/#!docket
Detail;D=APHIS-2018-0032.
• Postal Mail/Commercial Delivery:
Send your comment to Docket No.
APHIS–2018–0032, Regulatory Analysis
and Development, PPD, APHIS, Station
3A–03.8, 4700 River Road, Unit 118,
Riverdale, MD 20737–1238.
Supporting documents and any
comments we receive on this docket
may be viewed at http://
www.regulations.gov/#!docket
Detail;D=APHIS-2018-0032 or in our
reading room, which is located in Room
1141 of the USDA South Building, 14th
Street and Independence Avenue SW,
Washington, DC. Normal reading room
amozie on DSK3GDR082PROD with NOTICES1
SUMMARY:
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
hours are 8 a.m. to 4:30 p.m., Monday
through Friday, except holidays. To be
sure someone is there to help you,
please call (202) 799–7039 before
coming.
FOR FURTHER INFORMATION CONTACT: For
information on the Animal Welfare Act
regulations, contact Dr. Kay CarterCorker, Director, National Policy Staff,
Animal Care, APHIS, 4700 River Road,
Unit 84, Riverdale, MD 20737; (301)
851–3748. For copies of more detailed
information on the information
collection, contact Ms. Kimberly Hardy,
APHIS’ Information Collection
Coordinator, at (301) 851–2483.
SUPPLEMENTARY INFORMATION:
Title: Animal Welfare.
OMB Control Number: 0579–0036.
Type of Request: Revision to and
extension of approval of an information
collection.
Abstract: Under the Animal Welfare
Act (AWA, 7 U.S.C. 2131 et seq.), the
Secretary of Agriculture is authorized to
promulgate standards and other
requirements governing the humane
handling, care, treatment, and
transportation of certain animals by
dealers, exhibitors, operators of auction
sales, research facilities, carriers and
intermediate handlers. The Secretary
has delegated responsibility for
administering the AWA to the U.S.
Department of Agriculture’s Animal and
Plant Health Inspection Service
(APHIS), Animal Care.
Definitions, regulations, and
standards established under the AWA
are contained in 9 CFR parts 1, 2, and
3 (referred to below as the regulations).
Part 1 contains definitions for terms
used in parts 2 and 3. Part 2 provides
administrative requirements and sets
forth institutional responsibilities for
regulated parties, including licensing
requirements for dealers, exhibitors, and
operators of auction sales. Dealers,
exhibitors, and operators of auction
sales are required to comply in all
respects with the regulations and
standards (9 CFR 2.100(a)) and to allow
APHIS officials access to their place of
business, facilities, animals, and records
to inspect for compliance (9 CFR 2.126).
Part 3 provides standards for the
humane handling, care, treatment, and
transportation of covered animals. Part
3 consists of subparts A through E,
which contain specific standards for
dogs and cats, guinea pigs and hamsters,
rabbits, nonhuman primates, and
PO 00000
Frm 00001
Fmt 4703
Sfmt 4703
marine mammals, respectively, and
subpart F, which sets forth general
standards for warmblooded animals not
otherwise specified in part 3.
Administering the AWA requires the
use of several information collection
activities such as license applications
and renewals, which now include a
request to identify whether the business
mailing address is a personal residence
or not a personal residence; registration
applications and updates; annual
reports; acknowledgement of regulations
and standards; inspections; requests;
notifications; agreements; plans; written
program of veterinary care and health
records; itineraries; applications and
permits; records of acquisition,
disposition, or transport of animals;
official identification; variances;
protocols; health certificates;
complaints; marking requirements; and
recordkeeping.
These information collection activity
requirements provide APHIS with the
data necessary for the review and
evaluation of program compliance by
regulated facilities, and they provide a
workable enforcement system to carry
out the requirements of the AWA and
the intent of Congress without resorting
to more detailed and stringent
regulations and standards that could be
more burdensome to regulated facilities.
We are asking the Office of
Management and Budget (OMB) to
approve our use of these information
collection activities, as described, for an
additional 3 years.
The purpose of this notice is to solicit
comments from the public (as well as
affected agencies) concerning our
information collection. These comments
will help us:
(1) Evaluate whether the collection of
information is necessary for the proper
performance of the functions of the
Agency, including whether the
information will have practical utility;
(2) Evaluate the accuracy of our
estimate of the burden of the collection
of information, including the validity of
the methodology and assumptions used;
(3) Enhance the quality, utility, and
clarity of the information to be
collected; and
(4) Minimize the burden of the
collection of information on those who
are to respond, through use, as
appropriate, of automated, electronic,
mechanical, and other collection
technologies; e.g., permitting electronic
submission of responses.
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
Estimate of burden: The public
burden for this collection of information
is estimated to average 0.31 hours per
response.
Respondents: Individuals or
households; businesses or other forprofit entities; not-for-profit institutions;
farms; and State, local, and Tribal
governments.
Estimated annual number of
respondents: 9,112.
Estimated annual number of
responses per respondent: 128.
Estimated annual number of
responses: 1,164,553.
Estimated total annual burden on
respondents: 366,021 hours. (Due to
averaging, the total annual burden hours
may not equal the product of the annual
number of responses multiplied by the
reporting burden per response.)
All responses to this notice will be
summarized and included in the request
for OMB approval. All comments will
also become a matter of public record.
Done in Washington, DC, this 9th day of
July 2018.
Kevin Shea,
Administrator, Animal and Plant Health
Inspection Service.
[FR Doc. 2018–14945 Filed 7–11–18; 8:45 am]
BILLING CODE 3410–34–P
DEPARTMENT OF AGRICULTURE
Forest Service
Notice of New Fee Sites; Federal Lands
Recreation Enhancement Act
Bitterroot National Forest,
Forest Service, USDA.
ACTION: Notice of new fee sites.
AGENCY:
The Bitterroot National Forest
is proposing to implement new fees at
two campgrounds and one rental cabin.
These fees are only proposed and will
be determined upon further analysis
and public comment.
DATES: Send any comments about these
fee proposals by August 13, 2018 so
comments can be compiled, analyzed,
and shared with the Western Montana
Bureau of Land Management Resource
Advisory Committee. The effective date
of implementation of proposed new fees
will be no earlier than six months after
publication of this notice.
ADDRESSES: Julie King, Forest
Supervisor, Bitterroot National Forest,
1801 N First, Hamilton, MT 59840 or
Email to [email protected].
FOR FURTHER INFORMATION CONTACT:
Erica Strayer, Recreation Program
Manager, Darby Ranger District, at 406–
821–4252 or [email protected].
Information about proposed fee changes
amozie on DSK3GDR082PROD with NOTICES1
SUMMARY:
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
can also be found at www.fs.usda.gov/
goto/r1recfee.
The
Federal Recreation Lands Enhancement
Act (Title VII, Pub. L. 108–447) directed
the Secretary of Agriculture to publish
a six month advance notice in the
Federal Register whenever new
recreation fee areas are established.
These new fees will be reviewed by the
Western Montana Bureau of Land
Management Resource Advisory
Committee prior to a final decision and
implementation.
The Forest proposes a $50/night fee
for Lost Horse Guard Station, which
would open this site for public rental.
The Forest also proposes a $10/night fee
for both Slate Creek and Sam Billings
Memorial campgrounds. Lost Horse
Guard Station was built in 1935 and
listed on the National Register of
Historic Places in 1989. It lies at the
head of Lost Horse Creek, near the
Montana/Idaho divide. It is near a
variety of recreation opportunities such
as hiking, camping, horseback riding,
non-motorized water sports, hunting,
backcountry skiing, and snowmobiling
at Twin Lakes. The rustic guard station
can sleep up to eight people.
Slate Creek Campground also has a
new group gathering area and Sam
Billings Memorial Campground has new
horse camping sites. Reasonable fees,
paid by users of these sites and services,
will help ensure that the Forest can
continue maintaining and improving the
sites for future generations.
A business analysis of the proposed
new fee sites listed has shown that
people desire having a variety of
recreation opportunities and
experiences on the Bitterroot National
Forest, such as group camping, cabin
and lookout rentals and single family
camping. A market analysis of
surrounding recreation sites with
similar amenities indicates that the
proposed fees are comparable and
reasonable.
Advance reservations for the Lost
Horse Guard Station will be available
through www.recreation.gov or by
calling 1–877–444–6777. The National
Recreation Reservation Service charges
a $10 fee for reservations.
SUPPLEMENTARY INFORMATION:
Dated: May 17, 2018.
Glenn Casamassa,
Associate Deputy Chief, National Forest
System.
[FR Doc. 2018–14910 Filed 7–11–18; 8:45 am]
BILLING CODE 3411–15–P
PO 00000
Frm 00002
Fmt 4703
Sfmt 4703
32261
DEPARTMENT OF AGRICULTURE
Forest Service
Notice of Proposed New Fee Site;
Federal Lands Recreation
Enhancement Act
Flathead National Forest,
Forest Service, USDA.
ACTION: Notice of new fee site.
AGENCY:
The Flathead National Forest
is proposing to charge a new fee at the
Lindbergh Lake Campground. Funds
generated at the site will be used for the
operation and maintenance, upkeep of
facilities, and improvements as feasible.
This fee is only proposed and will be
determined upon further analysis and
public comment.
DATES: Send any comments about these
fee proposals by August 13, 2018 so
comments can be compiled, analyzed,
and shared with the Western Montana
Bureau Land Management (BLM)
Resource Advisory Council. The
effective date of implementation of this
fee would be no earlier than six months
after publication of this notice.
ADDRESSES: Chip Weber, Forest
Supervisor, Flathead National Forest,
650 Wolfpack Way, Kalispell, MT 59901
or Email to [email protected].
FOR FURTHER INFORMATION CONTACT:
Chris Prew, Recreation Program
Manager, Flathead National Forest, at
406–758–3538 or [email protected].
Information about proposed fee changes
can also be found at www.fs.usda.gov/
goto/r1recfee.
SUPPLEMENTARY INFORMATION: The
Federal Recreation Lands Enhancement
Act (Title VII, Pub. L. 108–447) directed
the Secretary of Agriculture to publish
a six month advance notice in the
Federal Register whenever new
recreation fee areas are established. This
new fee will be reviewed by the Western
Montana BLM Resource Advisory
Council prior to a final decision and
implementation.
The Flathead National Forest is
proposing to charge a $10 per night fee
at Lindbergh Lake Campground.
Lindbergh Lake Campground offers
breathtaking views of the Mission and
Swan Mountain Ranges and has a
concrete boat ramp for ease of lake
access and enjoyment. The lake offers
boating, swimming, and fishing
opportunities and is located in close
proximity to the Mission Mountains
Wilderness, which offers excellent
hiking opportunities. The campground
has 21 individual camp sites and
features a new toilet facility and other
site improvements.
SUMMARY:
E:\FR\FM\12JYN1.SGM
12JYN1
32262
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
A business analysis of the proposed
new fee site has shown that people
desire having a variety of recreation
opportunities and experiences on the
Flathead National Forest, such as lakeorientated developed campgrounds. A
market analysis of surrounding
recreation sites with similar amenities
indicates that the proposed fee is
comparable and reasonable.
Dated: July 5, 2018.
Glenn Casamassa,
Associate Deputy Chief, National Forest
System.
[FR Doc. 2018–14911 Filed 7–11–18; 8:45 am]
BILLING CODE P
DEPARTMENT OF COMMERCE
Foreign-Trade Zones Board
[B–18–2018]
Production Activity Not Authorized;
Foreign-Trade Zone (FTZ) 26—Atlanta,
Georgia; PBR, Inc. d/b/a SKAPS
Industries (Non-Woven Geotextiles);
Athens, Georgia
On March 9, 2018, PBR, Inc. d/b/a
SKAPS Industries (SKAPS) submitted a
notification of proposed production
activity to the FTZ Board for its facility
within FTZ 26—Site 29, in Athens,
Georgia.
The notification was processed in
accordance with the regulations of the
FTZ Board (15 CFR part 400), including
notice in the Federal Register inviting
public comment (83 FR 13473, March
29, 2018). On July 9, 2018 the applicant
was notified of the FTZ Board’s decision
that further review of the activity is
warranted. The production activity
described in the notification was not
authorized. If the applicant wishes to
seek authorization for this activity, it
will need to submit an application for
production authority, pursuant to
Section 400.23.
Dated: July 9, 2018.
Elizabeth Whiteman,
Acting Executive Secretary.
[FR Doc. 2018–14928 Filed 7–11–18; 8:45 am]
amozie on DSK3GDR082PROD with NOTICES1
BILLING CODE 3510–DS–P
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
DEPARTMENT OF COMMERCE
International Trade Administration
[C–122–854]
Supercalendered Paper From Canada:
Notice of Rescission of Countervailing
Duty Administrative Review; 2015 and
2016
Enforcement and Compliance,
International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce
(Commerce) is rescinding the
administrative reviews of the
countervailing duty (CVD) order on
supercalendared paper (SC paper) from
Canada for the period of review August
3, 2015, through December 31, 2015,
and the period of review January 1,
2016, through December 31, 2016.
DATES: Applicable July 12, 2018.
FOR FURTHER INFORMATION CONTACT:
Emily Halle or Nicholas Czajkowski,
AD/CVD Operations, Office I,
Enforcement and Compliance,
International Trade Administration,
U.S. Department of Commerce, 1401
Constitution Avenue NW, Washington,
DC 20230; telephone (202) 482–0176 or
(202) 482–1395, respectively.
SUPPLEMENTARY INFORMATION:
AGENCY:
Background
On December 1, 2016, Commerce
published in the Federal Register a
notice of opportunity to request an
administrative review of the CVD order
on SC paper from Canada for the period
of review (POR) of August 3, 2015,
through December 31, 2015.1 Commerce
received timely-filed requests from
Verso Corporation (Verso); Catalyst
Paper Corporation, Catalyst Pulp and
Paper Sales Inc., and Catalyst Paper
(USA) Inc. (collectively, Catalyst); Irving
Paper Limited (Irving); Port Hawkesbury
Paper LP (PHP); and Resolute FP
Canada Inc and Resolute FP US Inc.
(collectively, Resolute), in accordance
with section 751(a) of the Tariff Act of
1930, as amended (the Act), to conduct
an administrative review of the CVD
order.2 Based upon this request, on
1 See Antidumping or Countervailing Duty Order,
Finding, or Suspended Investigation; Opportunity
To Request Administrative Review, 81 FR 86694
(December 1, 2016).
2 See Letter from Verso, ‘‘Supercalendered Paper
from Canada: Request for Administrative Review,’’
January 3, 2017; see Letter from Catalyst,
‘‘Supercalendered Paper from Canada: Request for
Administrative Review,’’ December 9, 2016; see
Letter from Irving, ‘‘Supercalendered Paper from
Canada, Inv. No. C–122–854—Request for
Administrative Review and Request for Expansion
of Review Period,’’ December 23, 2016; see Letter
from PHP, ‘‘Supercalendered Paper from Canada:
Request for Administrative Review,’’ December 9,
PO 00000
Frm 00003
Fmt 4703
Sfmt 4703
February 13, 2017, in accordance with
section 751(a) of the Act, Commerce
published a notice of initiation.3
On December 4, 2017, Commerce
published in the Federal Register a
notice of opportunity to request an
administrative review of the CVD order
on SC paper from Canada for the period
of review (POR) of January 1, 2016,
through December 31, 2016.4 Commerce
received timely-filed requests from
Verso Corporation, Irving Paper
Limited, Port Hawkesbury Paper LP,
and Resolute FP Canada Inc and
Resolute FP US Inc., in accordance with
section 751(a) of the Act, to conduct an
administrative review of the CVD
order.5 Based upon this request, on
February 23, 2018, in accordance with
section 751(a) of the Act, Commerce
published a notice of initiation.6
On July 5, 2018, Commerce revoked
the CVD order on SC paper.7
Rescission of Administrative Reviews
Pursuant to 19 CFR 351.222(g),
Commerce revoked the CVD order on SC
paper from Canada. The effective date of
the revocation of the CVD order is
August 3, 2015. As a result of the
revocation, we instructed U.S. Customs
and Border Protection (CBP) to
discontinue the suspension of
liquidation and the collection of cash
deposits of estimated countervailing
duties, to liquidate all unliquidated
entries that were entered on or after
August 3, 2015, without regard to
countervailing duties, and to refund all
CVD cash deposits on all such
merchandise, with applicable interest.
These administrative reviews cover the
period August 3, 2015 through
December 31, 2015, and the period
January 1, 2016 through December 31,
2016; see Letter from Resolute, ‘‘Supercalendered
Paper from Canada: Request for Administrative
Review (8/3/15–12/31/15),’’ December 19, 2016.
3 See Initiation of Antidumping and
Countervailing Duty Administrative Reviews, 82 FR
10457 (February 13, 2017).
4 See Antidumping or Countervailing Duty Order,
Finding, or Suspended Investigation; Opportunity
To Request Administrative Review, 83 FR 57219
(December 4, 2017).
5 See Letter from Verso, ‘‘Supercalendered Paper
from Canada: Request for Administrative Review,’’
December 29, 2017; see Letter from Irving,
‘‘Supercalendered Paper from Canada, Inv. No.
C–122–854—Request for Administrative Review,’’
December 15, 2017; see Letter from PHP,
‘‘Supercalendered Paper from Canada: Request for
Administrative Review,’’ December 20, 2017; see
Letter from Resolute, ‘‘Supercalendered Paper from
Canada: Request for Administrative Review
(1/1/2016–12/31/2016),’’ December 21, 2017.
6 See Initiation of Antidumping and
Countervailing Duty Administrative Reviews, 83 FR
8058 (February 23, 2018).
7 See Supercalendered Paper from Canada: Final
Results of Changed Circumstances Review and
Revocation of Countervailing Duty Order, signed
July 5, 2018.
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
2016. Because the revocation is
retroactive to August 3, 2015, the
periods covered by these ongoing
administrative reviews are no longer
subject to the CVD order, and there is no
basis for conducting the administrative
review. Therefore, Commerce is
rescinding these administrative reviews.
Assessment
Because we ordered the liquidation of
the entries subject to these
administrative reviews, as a result of the
revocation of the CVD order, there is no
need to issue additional instructions to
CBP.
Notification Regarding Administrative
Protective Orders
This notice serves as a reminder to
parties subject to administrative
protective order (APO) of their
responsibility concerning the return or
destruction of proprietary information
disclosed under APO in accordance
with 19 CFR 351.305. Timely written
notification of the return/destruction of
APO materials or conversion to judicial
protective order is hereby requested.
Failure to comply with the regulations
and terms of an APO is a violation
which is subject to sanction.
This notice is issued and published in
accordance with section 751 of the Act
and 19 CFR 351.213(d)(4).
Dated: July 5, 2018.
Gary Taverman,
Deputy Assistant Secretary for Antidumping
and Countervailing Duty Operations,
performing the non-exclusive functions and
duties of the Assistant Secretary for
Enforcement and Compliance.
[FR Doc. 2018–14922 Filed 7–11–18; 8:45 am]
BILLING CODE 3510–DS–P
DEPARTMENT OF COMMERCE
International Trade Administration
[A–570–601]
Tapered Roller Bearings and Parts
Thereof, Finished and Unfinished,
From the People’s Republic of China:
Preliminary Results and Intent To
Rescind the Review in Part; 2016–2017
Enforcement and Compliance,
International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce
(Commerce) is conducting an
administrative review (AR) of the
antidumping duty order on tapered
roller bearings and parts thereof,
finished and unfinished (TRBs), from
the People’s Republic of China (China).
The AR covers 20 exporters, of which
Commerce selected two exporters for
amozie on DSK3GDR082PROD with NOTICES1
AGENCY:
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
individual examination (i.e., GGB
Bearing Technology (Suzhou) Co., Ltd.
(GGB); and Luoyang Bearing
Corporation (Group) (Luoyang)). The
period of review (POR) is June 1, 2016,
through May 31, 2017. We preliminarily
determine that sales of subject
merchandise have been made below
normal value (NV). Interested parties are
invited to comment on these
preliminary results.
DATES: Applicable July 12, 2018.
FOR FURTHER INFORMATION CONTACT:
Andrew Medley, Enforcement and
Compliance, International Trade
Administration, U.S. Department of
Commerce, 1401 Constitution Avenue
NW, Washington, DC 20230; telephone:
(202) 482–4987.
SUPPLEMENTARY INFORMATION:
Scope of the Order
The merchandise covered by the order
includes tapered roller bearings and
parts thereof. The subject merchandise
is currently classifiable under
Harmonized Tariff Schedule of the
United States (HTSUS) subheadings:
8482.20.00, 8482.91.00.50, 8482.99.15,
8482.99.45, 8483.20.40, 8483.20.80,
8483.30.80, 8483.90.20, 8483.90.30,
8483.90.80, 8708.70.6060, 8708.99.2300,
8708.99.4850, 8708.99.6890,
8708.99.8115, and 8708.99.8180. The
HTSUS subheadings are provided for
convenience and customs purposes
only; the written description of the
scope of the order is dispositive.1
Methodology
Commerce is conducting this review
in accordance with section 751(a)(1)(B)
of the Act. For GGB, we calculated
export prices in accordance with section
772 of the Act. Because China is a nonmarket economy (NME) within the
meaning of section 771(18) of the Act,
for GGB, NV was calculated in
accordance with section 773(c) of the
Act. We preliminary find that Luoyang
is ineligible for a separate rate and is
part of the China-wide entity.
For a full description of the
methodology underlying our
conclusions, see the Preliminary
Decision Memorandum. The
Preliminary Decision Memorandum is a
public document and is on file
electronically via Enforcement and
Compliance’s Antidumping and
1 For a complete description of the scope of the
order, see Memorandum, ‘‘Decision Memorandum
for the Preliminary Results of the 2016–2017
Antidumping Duty Administrative Review of
Tapered Roller Bearings and Parts Thereof,
Finished and Unfinished, from the People’s
Republic of China’’ (Preliminary Decision
Memorandum), issued concurrently with and
hereby adopted by this notice.
PO 00000
Frm 00004
Fmt 4703
Sfmt 4703
32263
Countervailing Duty Centralized
Electronic Service System (ACCESS).
ACCESS is available to registered users
at https://access.trade.gov, and to all
parties in the Central Records Unit,
room B8024 of the main Department of
Commerce building. In addition, a
complete version of the Preliminary
Decision Memorandum can be found at
http://enforcement.trade.gov/frn/. The
signed Preliminary Decision
Memorandum and the electronic
version of the Preliminary Decision
Memorandum are identical in content.
A list of the topics discussed in the
Preliminary Decision Memorandum is
attached as the Appendix to this notice.
Rate for Non-Examined Companies
Which Are Eligible for a Separate Rate
As indicated in the ‘‘Preliminary
Results of Review’’ section below, we
preliminarily determine that a
weighted-average dumping margin of
6.87 percent applies to the six firms not
selected for individual review which are
eligible for a separate rate. For further
information, see the Preliminary
Decision Memorandum at ‘‘Separate
Rate Assigned to Non-Selected
Companies.’’
Preliminary Results of Review
Twelve companies involved in the
administrative review did not
demonstrate that they are entitled to a
separate rate.2 Therefore, we
preliminarily finds these companies to
be part of the China-wide entity.3 The
rate previously established for the
China-wide entity is 92.84 percent. One
additional company, Hangzhou
Xiaoshan Dingli Machinery Co., Ltd.
(Dingli), could not demonstrate that it
had a suspended entry during the POR;
2 These companies are: (1) Apex Maritime
Shanghai Co., Ltd.; (2) Crossroads Global Trading
Co., Ltd.; (3) Honour Lane Shipping Ltd.; (4)
Kinetsu World Express China Co., Ltd.; (5) Luoyang;
(6) Pacific Link Intl Freight Forwarding Co., Ltd.; (7)
Shanghai Dizhao Industrial Trading Co., Ltd.; (8)
Thi Group Shanghai Ltd.; (9) Weifang HaoxinConmet Mechanical Products Co., Ltd.; (10) Yantai
Huilong Machinery Parts Co.; Ltd.; (11) Zhejiang
Machinery Import & Export Corp.; and (12) Zhejiang
Zhaofeng Mechanical & Electronic Co., Ltd.
3 See Preliminary Decision Memorandum, at 8.
Pursuant to Commerce’s change in practice,
Commerce no longer considers the NME entity as
an exporter conditionally subject to administrative
reviews. See Antidumping Proceedings:
Announcement of Change in Department Practice
for Respondent Selection in Antidumping Duty
Proceedings and Conditional Review of the
Nonmarket Economy Entity in NME Antidumping
Duty Proceedings, 78 FR 65963, 65970 (November
4, 2013). Under this practice, the NME entity will
not be under review unless a party specifically
requests, or Commerce self-initiates, a review of the
entity. Because no party requested a review of the
entity, the entity is not under review and the
entity’s rate is not subject to change.
E:\FR\FM\12JYN1.SGM
12JYN1
32264
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
thus, we intend to rescind the review
with respect to Dingli.
We preliminarily determine that the
following weighted-average dumping
margins exist for the period June 1,
2016, through May 31, 2017:
Weightedaverage
dumping
margin
(percent)
Exporter
GGB Bearing Technology (Suzhou) Co., Ltd ......................................................................................................................................
CNH Industrial Italia SpA * ...................................................................................................................................................................
GSP Automotive Group Wenzhou Co. Ltd * ........................................................................................................................................
Hangzhou Hanji Auto Parts Co., Ltd * .................................................................................................................................................
Hangzhou Radical Energy-Saving Technology Co., Ltd * ...................................................................................................................
Ningbo Xinglun Bearings Import & Export Co., Ltd * ..........................................................................................................................
Zhejiang Sihe Machine Co., Ltd * ........................................................................................................................................................
6.87
6.87
6.87
6.87
6.87
6.87
6.87
amozie on DSK3GDR082PROD with NOTICES1
* This company was not selected as a mandatory respondent but is subject to this administrative review and demonstrated that it qualified for a
separate rate during the POR.
Disclosure and Public Comment
Commerce will disclose calculations
performed for these preliminary results
to the parties within five days of the
date of publication of this notice in
accordance with 19 CFR 351.224(b).
Interested parties may submit case briefs
no later than 30 days after the date of
publication of these preliminary results
of review.4 Rebuttals to case briefs may
be filed no later than five days after case
briefs are filed and all rebuttal briefs
must be limited to comments raised in
the case briefs.5 Parties who submit
comments are requested to submit with
the argument: (1) A statement of the
issue; (2) a brief summary of the
argument; and (3) a table of authorities.6
Any interested party may request a
hearing within 30 days of publication of
this notice.7 Hearing requests should
contain the following information: (1)
The party’s name, address, and
telephone number; (2) the number of
participants; and (3) a list of the issues
to be discussed. Oral presentations will
be limited to issues raised in the briefs.8
If a request for a hearing is made, parties
will be notified of the time and date for
the hearing to be held at the U.S.
Department of Commerce, 1401
Constitution Avenue NW, Washington,
DC 20230.9
All submissions, with limited
exceptions, must be filed electronically
using ACCESS. An electronically filed
document must be received successfully
in its entirety by 5 p.m. Eastern Time
(ET) on the due date.10 Documents
excepted from the electronic submission
requirements must be filed manually
(i.e., in paper form) with the APO/
Dockets Unit in Room 18022 and
4 See
19 CFR 351.309(c)(1)(ii).
19 CFR 351.309(d).
6 See 19 CFR 351.309(c)(2).
7 See 19 CFR 351.310(c).
8 Id.
9 See 19 CFR 351.310(d).
10 See 19 CFR 351.103(c).
5 See
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
stamped with the date and time of
receipt by 5 p.m. ET on the due date.11
Unless otherwise extended,
Commerce intends to issue the final
results of this administrative review,
which will include the results of its
analysis of all issues raised in the case
briefs, within 120 days of publication of
these preliminary results, pursuant to
section 751(a)(3)(A) of the Act.
Assessment Rates
Upon issuance of the final results of
the administrative review, Commerce
will determine, and CBP shall assess,
antidumping duties on all appropriate
entries covered by this review.12 For
each examined respondent which is
eligible for a separate rate and which
has a weighted-average dumping margin
which is not zero or de minimis (i.e.,
less than 0.5 percent), we will calculate
importer-specific ad valorem duty
assessment rates based on the ratio of
the total amount of dumping calculated
for the importer’s examined sales to the
total entered value of those sales, in
accordance with 19 CFR 351.212(b)(1).
Pursuant to Commerce’s assessment
practice, for entries that were not
reported in the U.S. sales data submitted
by an examined respondent, we will
instruct CBP to liquidate such entries at
the China-wide rate. Additionally, if we
determine that an exporter had no
shipments of the subject merchandise,
any suspended entries that entered
under that exporter’s case number (i.e.,
at that exporter’s cash deposit rate) will
be liquidated at the China-wide rate.13
11 See 19 CFR 351.303(b) and ‘‘ACCESS
Handbook on Electronic Filing Procedures
Enforcement and Compliance International Trade
Administration U.S. Department of Commerce,’’
dated October 24, 2017, available at https://
access.trade.gov/help/Handbook_on_Electronic_
Filing_Procedures.pdf.
12 See 19 CFR 351.212(b)(1).
13 See Non-Market Economy Antidumping
Proceedings: Assessment of Antidumping Duties, 76
FR 65694 (October 24, 2011).
PO 00000
Frm 00005
Fmt 4703
Sfmt 4703
For the respondents which were not
selected for individual examination in
this administrative review and which
qualified for a separate rate, the
assessment rate will be equal to the
weighted-average dumping margin
determined for the non-examined
respondents in the final results of this
administrative review. For the final
results, if we continue to treat the 12
exporters preliminarily found not to
qualify for separate rates as part of the
China-wide entity, we will instruct CBP
to apply an ad valorem assessment rate
of 92.84 percent, the current rate
established for the China-wide entity, to
all entries of subject merchandise
during the POR which were exported by
those companies. In addition, if
Commerce continues to find that Dingli
had no suspended entries during the
POR, we will rescind the review for that
company.14
We intend to issue assessment
instructions to CBP 15 days after the
publication of the final results of these
reviews.
Cash Deposit Requirements
The following cash deposit
requirements will be effective upon
publication of the final results of this
administrative review for all shipments
of the subject merchandise entered, or
withdrawn from warehouse, for
consumption on or after the publication
date, as provided for by section
751(a)(2)(C) of the Act: (1) For the
exporters listed above which have a
separate rate, the cash deposit rate will
be equal to the weighted-average
dumping margin established in the final
results of this review (except, if the rate
is zero or de minimis, then a cash
deposit rate of zero will be established
for that company); (2) for previously
14 For a full discussion of this practice, see NonMarket Economy Antidumping Proceedings:
Assessment of Antidumping Duties, 76 FR 65694
(October 24, 2011).
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
investigated or reviewed Chinese and
non-Chinese exporters not listed above
that have separate rates, the cash
deposit rate will continue to be equal to
the exporter-specific weighted-average
dumping margin published for the most
recently completed segment of this
proceeding; (3) for all Chinese exporters
of subject merchandise that have not
been found to be entitled to a separate
rate, the cash deposit rate will be the
cash deposit rate established for the
China-wide entity, 92.84 percent; and
(4) for all exporters of subject
merchandise which are not located in
China and which are not eligible for a
separate rate, the cash deposit rate will
be the rate applicable to the Chinese
exporter(s) that supplied that nonChinese exporter. These deposit
requirements, when imposed, shall
remain in effect until further notice.
Notification to Importers
This notice also serves as a
preliminary reminder to importers of
their responsibility under 19 CFR
351.402(f) to file a certificate regarding
the reimbursement of antidumping
duties prior to liquidation of the
relevant entries during this review
period. Failure to comply with this
requirement could result in the
Secretary’s presumption that
reimbursement of antidumping duties
occurred and the subsequent assessment
of double antidumping duties.
Notification to Interested Parties
We are issuing and publishing these
preliminary results of review in
accordance with sections 751(a)(l),
751(a)(2)(B) and 777(i)(l) of the Act, and
19 CFR 351.221(b)(4).
Dated: July 3, 2018.
Gary Taverman,
Deputy Assistant Secretary for Antidumping
and Countervailing Duty Operations,
performing the non-exclusive functions and
duties of the Assistant Secretary for
Enforcement and Compliance.
amozie on DSK3GDR082PROD with NOTICES1
Appendix—List of Topics Discussed in
the Preliminary Decision Memorandum
1. Summary
2. Background
3. Scope of the Order
4. Discussion of the Methodology
a. Non-Market Economy Country Status
b. Separate Rates
i. Separate Rates Applicants with No
Evidence of Suspended Entries
ii. Separate Rate Recipients
1. Wholly Foreign-Owned Companies
2. Wholly China-Owned Companies and
Joint Ventures
a. Absence of De Jure Control
b. Absence of De Facto Control
3. Companies Not Receiving a Separate
Rate
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
c. Separate Rate Assigned to Non-Selected
Companies
d. The China-Wide Entity
e. Application of Facts Available and Use
of Adverse Interferences
f. Application of Partial AFA for GGB
g. Surrogate Country
h. Date of Sale
i. Normal Value Comparisons
j. Determination of Comparison Method
k. Constructed Export Price
i. Irrecoverable Value-Added Tax (VAT)
ii. GGB
l. Normal Value
i. Factor Valuations
ii. Currency Conversion
5. Recommendation
[FR Doc. 2018–14924 Filed 7–11–18; 8:45 am]
BILLING CODE 3510–DS–P
DEPARTMENT OF COMMERCE
International Trade Administration
[A–580–874]
Certain Steel Nails From the Republic
of Korea: Preliminary Results of
Antidumping Duty Administrative
Review and Partial Rescission of
Antidumping Duty Administrative
Review; 2016–2017
Enforcement and Compliance,
International Trade Administration,
Department of Commerce.
AGENCY:
The Department of Commerce
(Commerce) preliminarily determines
that Daejin Steel Co. (Daejin), Koram
Inc. (Koram), and Korea Wire Co., Ltd.
(Kowire), producers/exporters of
merchandise subject to this
administrative review, made sales of
subject merchandise at less than normal
value. The period of review (POR) is
July 1, 2016, through June 30, 2017.
SUMMARY:
DATES:
Applicable July 12, 2018.
32265
from Korea.1 On July 31, 2017, Daejin 2
and Kowire 3 each requested an
administrative review, and Mid
Continent Steel & Wire, Inc.4 (the
petitioner) requested an administrative
review of 206 producers and/or
exporters, including Daejin, Koram,
Koram Steel Co. Ltd., and Kowire. On
September 28, 2017, the petitioner
withdrew its administrative review
request with respect to 202 of the 206
companies identified as producers/
exporters in the petitioner’s July 31,
2017 letter. The petitioner maintained
its administrative review request with
respect to: Daejin, Koram, Koram Steel
Co. Ltd., and Kowire. As such,
Commerce issued its AD questionnaire
to these companies on October 10,
2017.5
Partial Rescission of Administrative
Review
Commerce received timely requests to
conduct an administrative review of
certain exporters covering the POR.
Because the petitioner timely withdrew
its request for review of all of the
companies listed in the Initiation
Notice, with the exception of Daejin,
Koram, Koram Steel Co. Ltd., and
Kowire, we are rescinding this
administrative review with respect to
the remaining companies on which we
initiated a review pursuant to 19 CFR
351.213(d)(1). For a list of the
companies for which we are rescinding
this review, see Appendix II to this
notice.
As discussed in the Preliminary
Decision Memorandum, we
preliminarily determine that Koram is
the successor-in-interest to Koram Steel
Co. Ltd.; therefore, we will not calculate
a separate dumping margin for Koram
Steel Co., Ltd.6 Accordingly, the three
companies subject to the instant review
are: Daejin, Koram, and Kowire.
FOR FURTHER INFORMATION CONTACT:
Robert Galantucci (Kowire), Maliha
Khan (Daejin), or Trisha Tran (Koram),
AD/CVD Operations, Office IV,
Enforcement and Compliance,
International Trade Administration,
U.S. Department of Commerce, 1401
Constitution Avenue NW, Washington,
DC 20230; telephone: (202) 482–2923,
(202) 482–0895, or (202) 482–4852,
respectively.
SUPPLEMENTARY INFORMATION:
Background
On July 3, 2017, Commerce published
in the Federal Register a notice of
opportunity to request an administrative
review of the antidumping duty (AD)
order on certain steel nails (steel nails)
PO 00000
Frm 00006
Fmt 4703
Sfmt 4703
1 See Antidumping or Countervailing Duty Order,
Finding, or Suspended Investigation; Opportunity
to Request Administrative Review, 82 FR 30833
(July 3, 2017).
2 See Letter from Daejin, ‘‘Administrative Review
of the Antidumping Duty Order on Certain Steel
Nails from Korea—Request for Review,’’ dated July
31, 2017.
3 See Letter from Kowire, ‘‘Steel Nails from the
Republic of Korea—Request for Administrative
Review,’’ dated July 31, 2017.
4 See Letter from the petitioner, ‘‘Certain Steel
Nails from Korea: Request for Administrative
Reviews,’’ dated July 31, 2017.
5 See Commerce’s Letter, ‘‘Administrative Review
of Certain Steel Nails from Korea: Antidumping
Duty Questionnaire,’’ dated October 10, 2017.
6 See Memorandum, ‘‘Decision Memorandum for
Preliminary Results of the 2016–2017 Antidumping
Duty Administrative Review of Certain Steel Nails
from the Republic of Korea,’’ dated concurrently
with, and hereby adopted by this notice
(Preliminary Decision Memorandum) at 2.
E:\FR\FM\12JYN1.SGM
12JYN1
32266
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
The Preliminary Decision
Memorandum is a public document and
is on file electronically via Enforcement
and Compliance’s Antidumping and
Countervailing Duty Centralized
Electronic Service System (ACCESS).
ACCESS is available to registered users
at http://access.trade.gov and available
to all parties in the Central Records
Unit, room B8024 of the main
Department of Commerce building. In
addition, a complete version of the
Preliminary Decision Memorandum can
be accessed directly on the internet at
http://enforcement.trade.gov/frn/. The
signed and electronic versions of the
Preliminary Decision Memorandum are
identical in content.
amozie on DSK3GDR082PROD with NOTICES1
Scope of the Order
The merchandise covered by this
order is certain steel nails having a
nominal shaft length not exceeding 12
inches.7 Merchandise covered by the
order is currently classified under the
Harmonized Tariff Schedule of the
United States (HTSUS) subheadings
7317.00.55.02, 7317.00.55.03,
7317.00.55.05, 7317.00.55.07,
7317.00.55.08, 7317.00.55.11,
7317.00.55.18, 7317.00.55.19,
7317.00.55.20, 7317.00.55.30,
7317.00.55.40, 7317.00.55.50,
7317.00.55.60, 7317.00.55.70,
7317.00.55.80, 7317.00.55.90,
7317.00.65.30, 7317.00.65.60 and
7317.00.75.00. Certain steel nails subject
to this order also may be classified
under HTSUS subheadings
7907.00.60.00, 8206.00.00.00 or other
HTSUS subheadings. While the HTSUS
subheadings are provided for
convenience and customs purposes, the
written description of the scope of this
order is dispositive. For a full
description of the scope of the order, see
the Preliminary Decision
Memorandum.8
Methodology
Commerce is conducting this review
in accordance with section 751(a) of the
Tariff Act of 1930, as amended (the Act).
Export price is calculated in accordance
with section 772 of the Act. Normal
value is calculated in accordance with
section 773 of the Act.
For a full description of the
methodology underlying our
conclusions, see the Preliminary
Decision Memorandum.9 A list of topics
included in the Preliminary Decision
7 The shaft length of certain steel nails with flat
heads or parallel shoulders under the head shall be
measured from under the head or shoulder to the
tip of the point. The shaft length of all other certain
steel nails shall be measured overall.
8 See Preliminary Decision Memorandum.
9 Id.
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
liquidate the appropriate entries
without regard to antidumping duties.
For the 202 companies for which this
Preliminary Results of Review
review is rescinded, antidumping duties
will be assessed at rates equal to the
As a result of this review, we
cash deposit of estimated antidumping
preliminarily determine the following
duties in effect at the time of entry, or
weighted-average dumping margins for
the period July 1, 2016, through June 30, withdrawal from warehouse, for
consumption, in accordance with 19
2017:
CFR 351.212(c)(1)(i). Commerce intends
Weighted- to issue appropriate assessment
average
instructions directly to CBP 15 days
Exporter and/or producer
dumping
after publication of this notice. The final
margin
results of this review shall be the basis
(percent)
for the assessment of antidumping
Daejin Steel Co ..........................
3.02 duties on entries of merchandise
Koram Inc ...................................
10.59 covered by the final results of this
Korea Wire Co., Ltd ....................
1.10 review and for future deposits of
estimated duties, where applicable.
Assessment Rates
Cash Deposit Requirement
Upon completion of the
The following deposit requirements
administrative review, Commerce shall
will be effective upon publication of the
determine, and U.S. Customs and
notice of the final results of
Border Protection (CBP) shall assess,
administrative review for all shipments
antidumping duties on all appropriate
of steel nails from Korea entered, or
entries. Commerce intends to issue
withdrawn from warehouse, for
assessment instructions to CBP 15 days
consumption on or after the date of
after the date of publication of the final
publication of the final results of this
results of this review.
administrative review, as provided by
For any individually examined
section 751(a)(2)(C) of the Act: (1) The
respondents whose weighted-average
cash deposit rate for the companies
dumping margin is above de minimis
under review will be the rate
(i.e., 0.50 percent), we will calculate
established in the final results of this
importer-specific ad valorem duty
review (except, if the rate is zero or de
assessment rates based on the ratio of
minimis, no cash deposit will be
the total amount of dumping calculated
required); (2) for merchandise exported
for the importer’s examined sales to the
by manufacturers or exporters not
total entered value of those same sales
covered in this review but covered in a
in accordance with 19 CFR
prior segment of the proceeding, the
351.212(b)(1).10 For entries of subject
cash deposit rate will continue to be the
merchandise during the POR produced
company-specific rate published for the
by each respondent for which it did not most recently completed segment of this
know its merchandise was destined for
proceeding in which the manufacturer
the United States, we will instruct CBP
or exporter participated; (3) if the
to liquidate un-reviewed entries at the
exporter is not a firm covered in this
all-others rate if there is no rate for the
review, a prior review, or the less-thanintermediate company involved in the
fair-value investigation, but the
transaction.11 We will instruct CBP to
manufacturer is, the cash deposit rate
assess antidumping duties on all
will be the rate established for the most
appropriate entries covered by this
recently completed segment of the
review when the importer-specific
proceeding for the manufacturer of the
assessment rate calculated in the final
merchandise; and (4) the cash deposit
results of this review is above de
rate for all other manufacturers or
minimis. Where either the respondent’s
exporters will continue to be 11.80
weighted-average dumping margin is
percent ad valorem, the all-others rate
zero or de minimis, or an importerestablished in the less-than-fair value
specific assessment rate is zero or de
investigation.12
minimis, we will instruct CBP to
Disclosure and Public Comment
Commerce intends to disclose the
10 In these preliminary results, Commerce applied
calculations used in our analysis to
the assessment rate calculation methodology
adopted in Antidumping Proceedings: Calculation
interested parties in this review within
of the Weighted-Average Dumping Margin and
five days of the date of publication of
Assessment Rate in Certain Antidumping
this notice in accordance with 19 CFR
Proceedings: Final Modification, 77 FR 8101
Memorandum is included as Appendix
I to this notice.
(February 14, 2012).
11 See Antidumping and Countervailing Duty
Proceedings: Assessment of Antidumping Duties, 68
FR 23954 (May 6, 2003).
PO 00000
Frm 00007
Fmt 4703
Sfmt 4703
12 See Certain Steel Nails from the Republic of
Korea: Final Determination of Sales at Less Than
Fair Value, 80 FR 28955 (May 20, 2015).
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
351.224(b). Interested parties are invited
to comment on the preliminary results
of this review. Pursuant to 19 CFR
351.309(c)(1)(ii), interested parties may
submit case briefs no later than 30 days
after the date of publication of this
notice. Rebuttal briefs, limited to issues
raised in the case briefs, may be filed no
later than five days after the time limit
for filing case briefs.13 Parties who
submit case briefs or rebuttal briefs in
this proceeding are requested to submit
with each brief: (1) A statement of the
issues, (2) a brief summary of the
argument, and (3) a table of
authorities.14 Executive summaries
should be limited to five pages total,
including footnotes.15 Case and rebuttal
briefs should be filed using ACCESS.16
Pursuant to 19 CFR 351.310(c), any
interested party may request a hearing
within 30 days of the publication of this
notice in the Federal Register. If a
hearing is requested, Commerce will
notify interested parties of the hearing
schedule. Interested parties who wish to
request a hearing, or to participate if one
is requested, must submit a written
request to the Assistant Secretary for
Enforcement and Compliance, filed
electronically via ACCESS within 30
days after the date of publication of this
notice. Requests should contain: (1) The
party’s name, address, and telephone
number; (2) the number of participants;
and (3) a list of the issues to be
discussed. Issues raised in the hearing
will be limited to those raised in the
respective case and rebuttal briefs.
We intend to issue the final results of
this administrative review, including
the results of our analysis of issues
raised by the parties in the written
comments, within 120 days of
publication of these preliminary results
in the Federal Register, unless
otherwise extended.17
amozie on DSK3GDR082PROD with NOTICES1
Notification to Importers
This notice also serves as a
preliminary reminder to importers of
their responsibility under 19 CFR
351.402(f) to file a certificate regarding
the reimbursement of antidumping
duties prior to liquidation of the
relevant entries during this review
period. Failure to comply with this
requirement could result in Commerce’s
presumption that reimbursement of
antidumping duties occurred and the
subsequent assessment of double
antidumping duties.
13 See
14 See
19 CFR 351.309(d)(1).
19 CFR 351.309(c)(2) and (d)(2).
15 Id.
16 See
17 See
19 CFR 351.303.
section 751(a)(3)(A) of the Act.
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
Notification to Interested Parties
We are issuing and publishing this
notice in accordance with sections
751(a)(1) and 777(i)(1) of the Act and 19
CFR 351.221(b)(4).
Dated: July 5, 2018.
Gary Taverman,
Deputy Assistant Secretary for Antidumping
and Countervailing Duty Operations,
performing the non-exclusive functions and
duties of the Assistant Secretary for
Enforcement and Compliance.
Appendix I—List of Topics Discussed in
the Preliminary Decision Memorandum
I. Summary
II. Background
III. Scope of the Order
IV. Rescission of Review, In Part
V. Affiliation
VI. Duty Absorption Inquiry
VII. Discussion of the Methodology
A. Comparisons to Normal Value
B. Product Comparisons
C. Date of Sale
D. Level of Trade
E. Export Price
F. Normal Value
G. Successor-In-Interest Determination—
Koram
VIII. Currency Conversions
IX. Recommendation
Appendix II
Airlift Trans Oceanic Pvt. Ltd.
Aironware Enterprise (China) Ltd.
AM Global Shipping Lines
Ansing Rich Tech & Trade Co. Ltd.
Apex Maritime Co., Ltd.
Apex Shipping Co. Ltd.
Astrotech Steels Private Limited
Baoding Jieboshun Trading Corp. Ltd.
Beijing Jin Heung Co. Ltd.
Beijing Kang Jie Kong Int’l Cargo Co. Ltd.
Beijing Qin Li Jeff Trading Co., Ltd.
Bestbond International Limited
Bipex Co., Ltd.
Bollore Logistics Co. Ltd.
Bolung International Trading Co., Ltd.
Bon Voyage Logistics Inc.
Bonuts Hardware Logistics Co. Ltd.
Brilliant Group Logistics Corp.
C&D International Freight Forwarding
C.H. Robinson Freight Services Ltd.
Caesar International Logistics Co. Ltd.
Cana (Rizhao) Hardware Co. Ltd.
Cangzhou Xinqiao Int’l Trade Co. Ltd.
Capital Freight Management Inc.
Cargo Services Co. Ltd.
Caribbean International Co. Ltd.
Casia Global Logistics Co Ltd
China Container Line Northern Ltd.
China Dinghao Co., Ltd.
China International Freight Co., Ltd.
China Staple Enterprise Co. Ltd
Chinatrans International Limited
Chongqing Welluck Trading Co. Ltd.
Chosun Shipping Co. Ltd.
CJ Korea Express Corp.
CKX Co. Ltd.
Cohesion Freight (HK) Ltd.
Consolidated Shipping Services L.L.C.
Crelux International Co. Ltd.
PO 00000
Frm 00008
Fmt 4703
Sfmt 4703
32267
Dahnay Logistics Private Ltd.
Dalian Sunny International Logistics
DCS Dah Star Logistics Co., Ltd.
De Well Container Shipping Inc.
Dezhou Hualude Hardware Products Co., Ltd.
Dong E Fuqiang Metal Products Co. Ltd.
DT Logistics Hong Kong Ltd
Duo-Fast Korea Co., Ltd.
Dynamic Network Container Line Limited
E&E Transport International Co., Ltd.
ECI Taiwan Co., Ltd.
Eco Steel Co., Ltd.
Ejem Brothers Limited
Eumex Line Shenzhen Limited
Eunsan Shipping & Aircargo Co., Ltd.
Euroline Global Co., Ltd.
Expeditors Korea Ltd.
Faithful Engineering Products Co. Ltd.
Fastgrow International Co.
Fastic Transportation Co., Ltd.
Flyjac Logistics Pvt. Ltd.
G Link Express Logistics (Korea) Ltd
GCL Logistics Co., Ltd.
Global Container Line, Inc.
Globelink Weststar Shipping
Glovis America
Grandee Logistics Ltd.
Hanbit Logistics Co., Ltd.
Hanjin Logistics India Private Ltd.
Hanmi Staple Co., Ltd.
Hanon Systems
Hebei Minmetals Co., Ltd.
Hebei Tuohua Metal Products Co., Ltd.
Hecny Shipping Ltd.
Hecny Transportation Ltd.
Hengtuo Metal Products Co Ltd
High Link Line Inc.
Hong Kong Hong Xing Da Trading Co. Ltd.
Hongyi Hardware Products Co., Ltd.
Honour Lane Logistics Company
Honour Lane Shipping Limited
Huanghua Yingjin Hardware Products Co.,
Ltd.
Hyundai Logistics Co. Ltd.
Inmax Industries Sdn. Bhd.
Integral Building Products Inc.
International Maritime and Aviation LLC
JAS Forwarding Co. Ltd.
Je-il Wire Production Co., Ltd.
Jeil Tacker Co. Ltd.
Jiangsu Soho Honry Import Export Co. Ltd.
Jiaxing Slk Import & Export Co., Ltd.
Jinhai Hardware Co., Ltd.
Jinheung Steel Corporation
Jinkaiyi International Industry Co.
Jinsco International Corp.
Joo Sung Sea Air Co., Ltd.
K Logistics Corp.
K Logistics Inc.
Kasy Logistics (Tianjin) Co., Ltd.
King Shipping Company
Korchina International Logistics Co. Ltd.
Korea Total Logistics Co. Ltd.
Kousa International Logistics Co. Ltd.
Kuehne Nagel Ltd.
LF Logistics Co. Ltd.
Linyi Flying Arrow Imp. & Exp. Ltd.
MR Forwarding China Ltd.
Maxspeed International Transport Co. Ltd.
Mingguang Ruifeng Hardware Products Co.,
Ltd.
Nailtech Co. Ltd.
Nanjing Caiqing Hardware Co., Ltd.
Nauri Logistics Co. Ltd.
NCL Container Lines Co. Ltd.
Neo Gls
E:\FR\FM\12JYN1.SGM
12JYN1
amozie on DSK3GDR082PROD with NOTICES1
32268
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
Neptune Shipping Limited
Nexen L&C Corp.
OEC Freight Worldwide Korea Co. Ltd.
OEC Logistics Co., Ltd.
OEC World Wide Korea Co. Ltd.
Oman Fasteners LLC
Orient Express Container Co., Ltd.
Oriental Power Logistics Co. Ltd.
Overseas Distribution Services Inc.
Overseas International Steel Industry
Panalpina World Transport (PRC) Ltd.
Paslode Fasteners (Shanghai) Co. Ltd.
Promising Way (Hong Kong) Limited
Pudong Prime International Logistics, Inc.
Qingdao Chesire Trading Co. Ltd.
Qingdao D&L Group Ltd.
Qingdao Hongyuan Nail Industry Co. Ltd.
Qingdao Master Metal Products Co. Ltd.
Qingdao Meijialucky Industry and Commerce
Co., Ltd.
Qingdao Mst Industry and Commerce Co.,
Ltd.
Qingdao Tiger Hardware Co., Ltd.
Ramses Logistics Company Limited
Regency Global Logistics Co., Ltd.
Ricoh Logistics System Co., Ltd.
Rise Time Industrial Co. Ltd.
Sam Un Co. Ltd.
Scanwell Container Line Ltd.
Schenker
Schenker & CO AG
SDC International Australia PTY Ltd
Seamaster Global Forwarding
Seamaster Logistics Sdn Bhd
Sejung (China) Sea & Air Co., Ltd.
Shandong Dinglong Imp. & Exp. Co. Ltd.
Shandong Liaocheng Minghua Metal PR
Shandong Oriental Cherry Hardware Group
Co. Ltd.
Shanghai Haoray International Trade Co. Ltd.
Shanghai Jade Shuttle Hardware Tools Co.,
Ltd.
Shanghai Line Feng Int’l Transportation Co.
Ltd.
Shanghai Pinnacle International Trading Co.,
Ltd.
Shanghai Pudong International
Transportation
Shanxi Pioneer Hardware Industry Co., Ltd.
Shanxi Tianli Industries Co., Ltd.
Shijiazhuang Shuangjian Tools Co. Ltd.
Shipping Imperial Co., Ltd.
Sino Connections Logistics Inc.
S-Mart (Tianjin) Technology Development
Co., Ltd.
Sparx Logistics China Limited
Speedmark International Ltd.
Suntec Industries Co., Ltd.
Swift Freight (India) Pvt Ltd.
T.H.I. Group Ltd.
The Stanley Works (Langfang) Fastening
System Co., Ltd.
Tianjin Bluekin Industries Limited
Tianjin Coways Metal Products Co.
Tianjin Free Trade Service Co. Ltd.
Tianjin Fulida Supply Co. Ltd.
Tianjin Huixinshangmao Co. Ltd.
Tianijn Hweschun Fasteners Manufacturing
Co. Ltd.
Tianjin Jinchi Metal Products Co., Ltd.
Tianjin Long Sheng Tai
Tianjin M&C Electronics Co., Ltd.
Tianjin Wonderful International Trading
Tianjin Zehui Hardware Co. Ltd.
Tianjin Zhonglian Metals Ware Co. Ltd.
Tianjin Zhonglian Times Technology
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
Toll Global Forwarding Ltd.
Top Logistics Korea Ltd.
Top Ocean Consolidated Service Ltd.
Toyo Boeki Co. Ltd.
Trans Knights, Inc.
Translink Shipping, Inc.
Transwell Logistics Co. Ltd.
Transworld Transportation Co. Ltd.
Trim International Inc.
TTI Freight Forwarder Co. Ltd.
Unicorn (Tianjin) Fasteners Co., Ltd.
UPS SCS (China) Limited
Vanguard Logistics Services
W&K Corporation Limited
Weida Freight System Co. Ltd.
Woowon Sea & Air Co. Ltd.
Xi’an Metals and Minerals Imp. Exp. Co.
Xinjiayuan International Trade Co.
Xinjiayuan Trading Co., Limited
Youngwoo Fasteners Co., Ltd.
You-One Fastening Systems
Yumark Enterprises Corp.
Zhaoqing Harvest Nails Co. Ltd.
[FR Doc. 2018–14920 Filed 7–11–18; 8:45 am]
BILLING CODE 3510–DS–P
DEPARTMENT OF COMMERCE
International Trade Administration
[C–122–854]
Supercalendered Paper From Canada:
Final Results of Changed
Circumstances Review and Revocation
of Countervailing Duty Order
Enforcement and Compliance,
International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce
(Commerce) is revoking the
countervailing duty (CVD) order on
supercalendered paper (SC paper) from
Canada.
DATES: Applicable August 3, 2015.
FOR FURTHER INFORMATION CONTACT:
Emily Halle or Nicholas Czajkowski,
AD/CVD Operations, Enforcement and
Compliance, International Trade
Administration, U.S. Department of
Commerce, 1401 Constitution Avenue
NW, Washington, DC 20230; telephone
(202) 482–0176 or (202) 482–1395,
respectively.
SUPPLEMENTARY INFORMATION:
AGENCY:
Background
On December 10, 2015, Commerce
published the CVD Order on SC paper
from Canada.1 On March 21, 2018,
Verso Corporation (Verso) (i.e., the
petitioner) requested that Commerce
conduct a changed circumstances
review (CCR), pursuant to section
782(h)(2) of the Tariff Act of 1930, as
amended (the Act) and 19 CFR
1 See Supercalendered Paper from Canada:
Countervailing Duty Order, 80 FR 76668 (December
10, 2015) (CVD Order).
PO 00000
Frm 00009
Fmt 4703
Sfmt 4703
351.222(g)(l)(i). Verso expressed a lack
of interest in the enforcement or
existence of the CVD Order, and
requested the retroactive revocation of
the CVD Order, effective August 3,
2015.2 Commerce published the
initiation of this CCR on May 14, 2018.3
The parties to this proceeding provided
comments on May 21, 2018.4 On June
21, 2018, pursuant to 19 CFR
351.302(b), Commerce extended the
time limit for completing this CCR.5
Final Results of Changed
Circumstances Review, and Revocation
of the Order
Pursuant to section 751(d)(1) of the
Act, and 19 CFR 351.222(g), Commerce
may revoke an antidumping duty or
CVD order, in whole or in part, based on
a review under section 751(b) of the Act
(i.e., a CCR). Section 751(b)(1) of the Act
requires a CCR to be conducted upon
receipt of a request which shows
changed circumstances sufficient to
warrant a review. Section 782(h)(2) of
the Act gives Commerce the authority to
revoke an order if producers accounting
for substantially all of the production of
the domestic like product have
expressed a lack of interest in the order.
Section 351.222(g) of Commerce’s
regulations provides that Commerce
will conduct a CCR under 19 CFR
351.216, and may revoke an order (in
whole or in part), if it concludes that: (i)
Producers accounting for substantially
all of the production of the domestic
like product to which the order pertains
have expressed a lack of interest in the
relief provided by the order, in whole or
in part; or (ii) if other changed
circumstances sufficient to warrant
revocation exist. Both the Act and
Commerce’s regulations require that
‘‘substantially all’’ domestic producers
express a lack of interest in the order for
Commerce to revoke the order, in whole
or in part.6 Commerce has interpreted
‘‘substantially all’’ to represent
producers accounting for at least 85
percent of U.S. production of the
domestic like product.7 In the Initiation
2 See Letter from Verso, ‘‘Supercalendered Paper
from Canada/Request for Changed Circumstances
Review,’’ March 21, 2018 (Verso Request).
3 See Supercalendered Paper from Canada:
Initiation of Changed Circumstances Review, 83 FR
22249 (May 14, 2018) (Initiation Notice).
4 See Letter from Verso, et. al., ‘‘Supercalendered
Paper from Canada (C–122–854): Joint Comments
on Initiation of Changed Circumstances Review,’’
May 21, 2018.
5 See Letter to Verso Corporation, ‘‘Countervailing
Duty Order on Supercalendered Paper from Canada:
Changed Circumstances Review; Extension of
Deadline for Final Results,’’ dated June 21, 2018.
6 See section 782(h) of the Act and 19 CFR
351.222(g).
7 See Honey from Argentina; Antidumping and
Countervailing Duty Changed Circumstances
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
amozie on DSK3GDR082PROD with NOTICES1
Notice, we stated that Verso’s request
indicated it accounts for at least 85
percent of domestic production.8 We
received no comments concerning
Verso’s claim regarding its production
or otherwise indicating a lack of
industry support with respect to this
CCR.
As noted in the Initiation Notice,
Verso requested the revocation of this
CVD Order because it is no longer
interested in maintaining the CVD Order
or in the imposition of duties on the
subject merchandise as of August 3,
2015.9 We conclude that producers
accounting for substantially all of the
production of the domestic like product,
to which this CVD Order pertains, lack
interest in the relief provided by the
CVD Order. We find that the petitioner’s
affirmative statement of no interest in
the CVD Order constitutes good cause
for the conduct of this review.
On May 21, 2018, Commerce received
comments from Verso, the Government
of Canada, the Government of New
Brunswick, the Government of Nova
Scotia, the Government of Ontario, the
Government of Quebec, Irving Paper
Limited, Port Hawkesbury Paper L.P.,
Resolute FP Canada Inc., and Resolute
FP US Inc. In a joint filing, these parties,
who represent all of the interested
parties to this proceeding, stated their
agreement with the outcome proposed
in the Initiation Notice. Moreover, the
parties cited to 19 CFR 351.216(e),
which provides that, when all parties
agree to the outcome, Commerce will
issue its final results of CCR within 45
days of the initiation.
Accordingly, we are notifying the
public that we are revoking the CVD
Order, in whole. Based on Verso’s
request that revocation be retroactive to
August 3, 2015, and because we have
not completed any administrative
reviews of the CVD Order, we will
instruct U.S. Customs and Border
Protection (CBP) to discontinue the
suspension of liquidation and the
collection of cash deposits of estimated
countervailing duties, to liquidate all
unliquidated entries that were entered
on or after August 3, 2015, without
regard to countervailing duties, and to
refund all CVD cash deposits on all such
merchandise, with applicable interest.
Reviews; Preliminary Intent to Revoke Antidumping
and Countervailing Duty Orders, 77 FR 67790,
67791 (November 14, 2012), unchanged in Honey
from Argentina; Final Results of Antidumping and
Countervailing Duty Changed Circumstances
Reviews; Revocation of Antidumping and
Countervailing Duty Orders, 77 FR 77029
(December 31, 2012).
8 See Initiation Notice, 83 FR at 22249.
9 Id.
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
Scope of the Order
The product covered by the order is
SC paper. SC paper is uncoated paper
that has undergone a calendering
process in which the base sheet, made
of pulp and filler (typically, but not
limited to, clay, talc, or other mineral
additive), is processed through a set of
supercalenders, a supercalender, or a
soft nip calender operation.10
The scope of this order covers all SC
paper regardless of basis weight,
brightness, opacity, smoothness, or
grade, and whether in rolls or in sheets.
Further, the scope covers all SC paper
that meets the scope definition
regardless of the type of pulp fiber or
filler material used to produce the
paper.
Specifically excluded from the scope
are imports of paper printed with final
content of printed text or graphics.
Subject merchandise primarily enters
under Harmonized Tariff Schedule of
the United States (HTSUS) subheading
4802.61.3035, but may also enter under
subheadings 4802.61.3010,
4802.62.3000, 4802.62.6020, and
4802.69.3000. Although the HTSUS
subheadings are provided for
convenience and customs purposes, the
written description of the scope of the
order is dispositive.
Instructions to U.S. Customs and
Border Protection
Because we determine that there are
changed circumstances that warrant the
revocation of the CVD Order, in whole,
we will instruct CBP to discontinue the
suspension of liquidation and the
collection of cash deposits of estimated
countervailing duties, to liquidate all
unliquidated entries that were entered
on or after August 3, 2015, without
regard to countervailing duties, and to
refund all CVD cash deposits on all such
merchandise, with applicable interest.
Notification to Interested Parties
This notice serves as a reminder to
parties subject to an administrative
protective order (APO) of their
responsibility concerning the
disposition of proprietary information
disclosed under APO in accordance
with 19 CFR 351.305(a)(3). Timely
written notification of the return/
destruction of APO materials or
conversion to judicial protective order is
hereby requested. Failure to comply
10 Supercalendering and soft nip calendering
processing, in conjunction with the mineral filler
contained in the base paper, are performed to
enhance the surface characteristics of the paper by
imparting a smooth and glossy printing surface.
Supercalendering and soft nip calendering also
increase the density of the base paper.
PO 00000
Frm 00010
Fmt 4703
Sfmt 4703
32269
with the regulations and terms of an
APO is a sanctionable violation.
We are issuing and publishing these
final results and revocation, in whole,
and notice in accordance with sections
751(b) and 777(i) of the Act and 19 CFR
351.216, 19 CFR 351.221(c)(3), and 19
CFR 351.222.
Dated: July 5, 2018.
Gary Taverman,
Deputy Assistant Secretary for Antidumping
and Countervailing Duty Operations,
performing the non-exclusive functions and
duties of the Assistant Secretary for
Enforcement and Compliance.
[FR Doc. 2018–14921 Filed 7–11–18; 8:45 am]
BILLING CODE 3510–DS–P
DEPARTMENT OF COMMERCE
International Trade Administration
[A–570–904]
Certain Activated Carbon From the
People’s Republic of China:
Continuation of Antidumping Duty
Order
Enforcement and Compliance,
International Trade Administration,
Department of Commerce.
SUMMARY: As a result of the
determinations by the Department of
Commerce (Commerce) and the
International Trade Commission (ITC)
that revocation of the antidumping duty
order on certain activated carbon from
the People’s Republic of China (China)
would likely lead to a continuation or
recurrence of dumping and material
injury to an industry in the United
States, Commerce is publishing a notice
of continuation of the antidumping duty
order.
DATES: Applicable July 12, 2018.
FOR FURTHER INFORMATION CONTACT:
Robert Palmer, AD/CVD Operations,
Office VIII, Enforcement and
Compliance, International Trade
Administration, U.S. Department of
Commerce, 1401 Constitution Avenue
NW, Washington, DC 20230; telephone:
(202) 482–9068.
SUPPLEMENTARY INFORMATION:
AGENCY:
Background
On April 27, 2007, Commerce
published in the Federal Register notice
of the antidumping duty order on
certain activated carbon from China.1
On February 1, 2018, Commerce
published the notice of initiation of the
second five-year (sunset) review of the
antidumping duty order on certain
1 See Notice of Antidumping Duty Order: Certain
Activated Carbon from the People’s Republic of
China, 72 FR 20988 (April 27, 2007).
E:\FR\FM\12JYN1.SGM
12JYN1
32270
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
activated carbon from China, pursuant
to section 751(c) of the Tariff Act of
1930, as amended (the Act).2
Commerce conducted this sunset
review on an expedited basis, pursuant
to section 751(c)(3)(B) of the Act and 19
CFR 351.218(e)(1)(ii)(C)(2), because it
received a complete, timely, and
adequate response from a domestic
interested party but no substantive
responses from respondent interested
parties. As a result of its review,
Commerce determined in accordance
with section 751(c) of the Act that
revocation of the antidumping duty
order would likely lead to a
continuation or recurrence of dumping.3
Commerce, therefore, notified the ITC of
the magnitude of the margins likely to
prevail should the antidumping duty
order be revoked. On July 6, 2018, the
ITC published notice of its
determination, pursuant to section
751(c) of the Act, that revocation of the
antidumping duty order on certain
activated carbon from China would
likely lead to a continuation or
recurrence of material injury to an
industry in the United States within a
reasonably foreseeable time.4
amozie on DSK3GDR082PROD with NOTICES1
Scope of the Order
The merchandise subject to the order
is certain activated carbon. Certain
activated carbon is a powdered,
granular, or pelletized carbon product
obtained by ‘‘activating’’ with heat and
steam various materials containing
carbon, including but not limited to coal
(including bituminous, lignite, and
anthracite), wood, coconut shells, olive
stones, and peat. The thermal and steam
treatments remove organic materials and
create an internal pore structure in the
carbon material. The producer can also
use carbon dioxide gas (CO2) in place of
steam in this process. The vast majority
of the internal porosity developed
during the high temperature steam (or
CO2 gas) activated process is a direct
result of oxidation of a portion of the
solid carbon atoms in the raw material,
converting them into a gaseous form of
carbon.
The scope of the order covers all
forms of activated carbon that are
activated by steam or CO2, regardless of
2 See Initiation of Five-Year (Sunset) Reviews, 83
FR 4681 (February 1, 2018).
3 See Certain Activated Carbon from the People’s
Republic of China: Final Results of the Expedited
Second Sunset Review of the Antidumping Duty
Order, 83 FR 26949 (June 11, 2018) (Final Results)
and accompanying Issues and Decision
Memorandum.
4 See Certain Activated Carbon from China:
Investigation No. 731–TA–1103 (Second Review),
USITC Publication 4776 (June 2018); see also
Certain Activated Carbon from China:
Determination, 83 FR 31568 (July 6, 2018).
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
the raw material, grade, mixture,
additives, further washing or postactivation chemical treatment (chemical
or water washing, chemical
impregnation or other treatment), or
product form. Unless specifically
excluded, the scope of the order covers
all physical forms of certain activated
carbon, including powdered activated
carbon (PAC), granular activated carbon
(GAC), and pelletized activated carbon.
Excluded from the scope of the order
are chemically activated carbons. The
carbon-based raw material used in the
chemical activation process is treated
with a strong chemical agent, including
but not limited to phosphoric acid, zinc
chloride, sulfuric acid, or potassium
hydroxide that dehydrates molecules in
the raw material, and results in the
formation of water that is removed from
the raw material by moderate heat
treatment. The activated carbon created
by chemical activation has internal
porosity developed primarily due to the
action of the chemical dehydration
agent. Chemically activated carbons are
typically used to activate raw materials
with a lignocellulosic component such
as cellulose, including wood, sawdust,
paper mill waste and peat.
To the extent that an imported
activated carbon product is a blend of
steam and chemically activated carbons,
products containing 50 percent or more
steam (or CO2 gas) activated carbons are
within the scope, and those containing
more than 50 percent chemically
activated carbons are outside the scope.
This exclusion language regarding
blended material applies only to
mixtures of steam and chemically
activated carbons.
Also excluded from the scope are
reactivated carbons. Reactivated carbons
are previously used activated carbons
that have had adsorbed materials
removed from their pore structure after
use through the application of heat,
steam and/or chemicals.
Also excluded from the scope is
activated carbon cloth. Activated carbon
cloth is a woven textile fabric made of
or containing activated carbon fibers. It
is used in masks and filters and clothing
of various types where a woven format
is required.
Any activated carbon meeting the
physical description of subject
merchandise provided above that is not
expressly excluded from the scope is
included within the scope. The
products subject to the order are
currently classifiable under the HTSUS
subheading 3802.10.00. Although the
HTSUS subheading is provided for
convenience and customs purposes, the
written description of the scope of the
order is dispositive.
PO 00000
Frm 00011
Fmt 4703
Sfmt 4703
Continuation of the Order
As a result of the determinations by
Commerce and the ITC that revocation
of the antidumping duty order would
likely lead to a continuation or
recurrence of dumping and material
injury to an industry in the United
States, pursuant to section 751(d)(2) of
the Act and 19 CFR 351.218(a),
Commerce hereby orders the
continuation of the antidumping duty
order on certain activated carbon from
China. U.S. Customs and Border
Protection will continue to collect
antidumping duty cash deposits at the
rates in effect at the time of entry for all
imports of subject merchandise.
The effective date of the continuation
of the order will be the date of
publication in the Federal Register of
this notice of continuation. Pursuant to
section 751(c)(2) of the Act, Commerce
intends to initiate the next sunset
review of the order not later than 30
days prior to the fifth anniversary of the
effective date of continuation.
This sunset review and this notice are
in accordance with section 751(c) and
751(d)(2) of the Act and published
pursuant to section 777(i)(1) of the Act
and 19 CFR 351.218(f)(4).
Dated: July 6, 2018.
Gary Taverman,
Deputy Assistant Secretary for Antidumping
and Countervailing Duty Operations,
performing the non-exclusive functions and
duties of the Assistant Secretary for
Enforcement and Compliance.
[FR Doc. 2018–15014 Filed 7–11–18; 8:45 am]
BILLING CODE 3510–DS–P
DEPARTMENT OF COMMERCE
International Trade Administration
Initiation of Antidumping and
Countervailing Duty Administrative
Reviews
Enforcement and Compliance,
International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce
(Commerce) has received requests to
conduct administrative reviews of
various antidumping and countervailing
duty orders and findings with May
anniversary dates. In accordance with
Commerce’s regulations, we are
initiating those administrative reviews.
DATES: Applicable July 12, 2018.
FOR FURTHER INFORMATION CONTACT:
Brenda E. Brown, Office of AD/CVD
Operations, Customs Liaison Unit,
Enforcement and Compliance,
International Trade Administration,
U.S. Department of Commerce, 1401
AGENCY:
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
Constitution Avenue NW, Washington,
DC 20230, telephone: (202) 482–4735.
SUPPLEMENTARY INFORMATION:
Background
Commerce has received timely
requests, in accordance with 19 CFR
351.213(b), for administrative reviews of
various antidumping and countervailing
duty orders and findings with May
anniversary dates.
All deadlines for the submission of
various types of information,
certifications, or comments or actions by
Commerce discussed below refer to the
number of calendar days from the
applicable starting time.
Notice of No Sales
If a producer or exporter named in
this notice of initiation had no exports,
sales, or entries during the period of
review (POR), it must notify Commerce
within 30 days of publication of this
notice in the Federal Register. All
submissions must be filed electronically
at http://access.trade.gov in accordance
with 19 CFR 351.303.1 Such
submissions are subject to verification
in accordance with section 782(i) of the
Tariff Act of 1930, as amended (the Act).
Further, in accordance with 19 CFR
351.303(f)(1)(i), a copy must be served
on every party on Commerce’s service
list.
amozie on DSK3GDR082PROD with NOTICES1
Respondent Selection
In the event Commerce limits the
number of respondents for individual
examination for administrative reviews
initiated pursuant to requests made for
the orders identified below, Commerce
intends to select respondents based on
U.S. Customs and Border Protection
(CBP) data for U.S. imports during the
period of review. We intend to place the
CBP data on the record within five days
of publication of the initiation notice
and to make our decision regarding
respondent selection within 30 days of
publication of the initiation Federal
Register notice. Comments regarding the
CBP data and respondent selection
should be submitted seven days after
the placement of the CBP data on the
record of this review. Parties wishing to
submit rebuttal comments should
submit those comments five days after
the deadline for the initial comments.
In the event Commerce decides it is
necessary to limit individual
examination of respondents and
conduct respondent selection under
section 777A(c)(2) of the Act:
1 See Antidumping and Countervailing Duty
Proceedings: Electronic Filing Procedures;
Administrative Protective Order Procedures, 76 FR
39263 (July 6, 2011).
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
In general, Commerce has found that
determinations concerning whether
particular companies should be
‘‘collapsed’’ (e.g., treated as a single
entity for purposes of calculating
antidumping duty rates) require a
substantial amount of detailed
information and analysis, which often
require follow-up questions and
analysis. Accordingly, Commerce will
not conduct collapsing analyses at the
respondent selection phase of this
review and will not collapse companies
at the respondent selection phase unless
there has been a determination to
collapse certain companies in a
previous segment of this antidumping
proceeding (e.g., investigation,
administrative review, new shipper
review or changed circumstances
review). For any company subject to this
review, if Commerce determined, or
continued to treat, that company as
collapsed with others, Commerce will
assume that such companies continue to
operate in the same manner and will
collapse them for respondent selection
purposes. Otherwise, Commerce will
not collapse companies for purposes of
respondent selection. Parties are
requested to (a) identify which
companies subject to review previously
were collapsed, and (b) provide a
citation to the proceeding in which they
were collapsed. Further, if companies
are requested to complete the Quantity
and Value (Q&V) Questionnaire for
purposes of respondent selection, in
general each company must report
volume and value data separately for
itself. Parties should not include data
for any other party, even if they believe
they should be treated as a single entity
with that other party. If a company was
collapsed with another company or
companies in the most recently
completed segment of this proceeding
where Commerce considered collapsing
that entity, complete Q&V data for that
collapsed entity must be submitted.
Respondent Selection—Aluminum
Extrusions From the People’s Republic
of China
In the event Commerce limits the
number of respondents for individual
examination in the administrative
review of the antidumping duty order
on aluminum extrusions from the
People’s Republic of China (‘‘China’’),
Commerce intends to select respondents
based on volume data contained in
responses to Q&V questionnaires.
Further, Commerce intends to limit the
number of Q&V questionnaires issued in
the review based on CBP data for U.S.
imports of aluminum extrusions from
the China. The extremely wide variety
of individual types of aluminum
PO 00000
Frm 00012
Fmt 4703
Sfmt 4703
32271
extrusion products included in the
scope of the order on aluminum
extrusions would preclude meaningful
results in attempting to determine the
largest China exporters of subject
merchandise by volume. Therefore,
Commerce will limit the number of Q&V
questionnaires issued based on the
import values in CBP data which will
serve as a proxy for imported quantities.
Parties subject to the review to which
Commerce does not send a Q&V
questionnaire may file a response to the
Q&V questionnaire by the applicable
deadline if they desire to be included in
the pool of companies from which
Commerce will select mandatory
respondents. The Q&V questionnaire
will be available on Commerce’s website
at http://trade.gov/enforcement/
news.asp on the date of publication of
this notice in the Federal Register. The
responses to the Q&V questionnaire
must be received by Commerce within
14 days of publication of this notice.
Please be advised that due to the time
constraints imposed by the statutory
and regulatory deadlines for
antidumping duty administrative
reviews, Commerce does not intend to
grant any extensions for the submission
of responses to the Q&V questionnaire.
Parties will be given the opportunity to
comment on the CBP data used by
Commerce to limit the number of Q&V
questionnaires issued. We intend to
release the CBP data under APO to all
parties having an APO within seven
days of publication of this notice in the
Federal Register. Commerce invites
comments regarding CBP data and
respondent selection within five days of
placement of the CBP data on the
record.
Deadline for Withdrawal of Request for
Administrative Review
Pursuant to 19 CFR 351.213(d)(1), a
party that has requested a review may
withdraw that request within 90 days of
the date of publication of the notice of
initiation of the requested review. The
regulation provides that Commerce may
extend this time if it is reasonable to do
so. Determinations by Commerce to
extend the 90-day deadline will be
made on a case-by-case basis.
Separate Rates
In proceedings involving non-market
economy (NME) countries, Commerce
begins with a rebuttable presumption
that all companies within the country
are subject to government control and,
thus, should be assigned a single
antidumping duty deposit rate. It is
Commerce’s policy to assign all
exporters of merchandise subject to an
administrative review in an NME
E:\FR\FM\12JYN1.SGM
12JYN1
32272
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
country this single rate unless an
exporter can demonstrate that it is
sufficiently independent so as to be
entitled to a separate rate.
To establish whether a firm is
sufficiently independent from
government control of its export
activities to be entitled to a separate
rate, Commerce analyzes each entity
exporting the subject merchandise. In
accordance with the separate rates
criteria, Commerce assigns separate
rates to companies in NME cases only
if respondents can demonstrate the
absence of both de jure and de facto
government control over export
activities.
All firms listed below that wish to
qualify for separate rate status in the
administrative reviews involving NME
countries must complete, as
appropriate, either a separate rate
application or certification, as described
below. For these administrative reviews,
in order to demonstrate separate rate
eligibility, Commerce requires entities
for whom a review was requested, that
were assigned a separate rate in the
most recent segment of this proceeding
in which they participated, to certify
that they continue to meet the criteria
for obtaining a separate rate. The
Separate Rate Certification form will be
available on Commerce’s website at
http://enforcement.trade.gov/nme/nme-
sep-rate.html on the date of publication
of this Federal Register notice. In
responding to the certification, please
follow the ‘‘Instructions for Filing the
Certification’’ in the Separate Rate
Certification. Separate Rate
Certifications are due to Commerce no
later than 30 calendar days after
publication of this Federal Register
notice. The deadline and requirement
for submitting a Certification applies
equally to NME-owned firms, wholly
foreign-owned firms, and foreign sellers
who purchase and export subject
merchandise to the United States.
Entities that currently do not have a
separate rate from a completed segment
of the proceeding 2 should timely file a
Separate Rate Application to
demonstrate eligibility for a separate
rate in this proceeding. In addition,
companies that received a separate rate
in a completed segment of the
proceeding that have subsequently
made changes, including, but not
limited to, changes to corporate
structure, acquisitions of new
companies or facilities, or changes to
their official company name,3 should
timely file a Separate Rate Application
to demonstrate eligibility for a separate
rate in this proceeding. The Separate
Rate Status Application will be
available on Commerce’s website at
http://enforcement.trade.gov/nme/nmesep-rate.html on the date of publication
of this Federal Register notice. In
responding to the Separate Rate Status
Application, refer to the instructions
contained in the application. Separate
Rate Status Applications are due to
Commerce no later than 30 calendar
days of publication of this Federal
Register notice. The deadline and
requirement for submitting a Separate
Rate Status Application applies equally
to NME-owned firms, wholly foreignowned firms, and foreign sellers that
purchase and export subject
merchandise to the United States.
For exporters and producers who
submit a separate-rate status application
or certification and subsequently are
selected as mandatory respondents,
these exporters and producers will no
longer be eligible for separate rate status
unless they respond to all parts of the
questionnaire as mandatory
respondents.
Initiation of Reviews
In accordance with 19 CFR
351.221(c)(1)(i), we are initiating
administrative reviews of the following
antidumping and countervailing duty
orders and findings. We intend to issue
the final results of these reviews not
later than May 31, 2019.
amozie on DSK3GDR082PROD with NOTICES1
Period to be reviewed
Antidumping Duty Proceedings
AUSTRIA: Carbon and Alloy Steel Cut-to-Length Plate, A–433–812 .................................................................................
Bohler Edelstahl GmbH & Co KG
Bohler Bleche GmbH & Co KG
BELGIUM: Carbon and Alloy Steel Cut-to-Length Plate, A–423–812 ................................................................................
Henegelhoef Concrete Joints NV
Industeel Belgium S.A.
NLMK Clabecq S.A./NLMK Plate Sales S.A./NLMK Sales Europe S.A./NLMK Manage Steel Center S.A./NLMK
La Louviere S.A.
Sarens NV
Thyssenkrupp Materials Belgium N.V.
Universal Eisen und Stahl GmbH
Valvan Baling Systems
Voestalpine Belgium NV.
CANADA: Citric Acid and Citrate Salt, A–122–853 ............................................................................................................
Jungbunzlauer Canada Inc.
CANADA: Polyethylene Terephthalate Resin, A–122–855 .................................................................................................
Compagnie Selenis Canada
FRANCE: Carbon and Alloy Steel Cut-To-Length Plate, A–427–828 ................................................................................
Industeel France S.A.S.
GERMANY: Carbon and Alloy Steel Cut-To-Length Plate, A–428–844 .............................................................................
AG der Dillinger Huttenwerke
Ilsendburger Grobblech GmbH
Perficon Steel GmbH
Reiner Brach GmbH & Co. KG
Rudolf Rafflenbeul Stahlwarenfabrik GmBH & Co.
Salzgitter Mannesmann Grobblech GmbH
Salaigitter Flachstahl GmbH
Salzgitter Mannesmann International GmbH
2 Such entities include entities that have not
participated in the proceeding, entities that were
preliminarily granted a separate rate in any
currently incomplete segment of the proceeding
(e.g., an ongoing administrative review, new
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
shipper review, etc.) and entities that lost their
separate rate in the most recently completed
segment of the proceeding in which they
participated.
PO 00000
Frm 00013
Fmt 4703
Sfmt 4703
11/14/16–4/30/18
11/14/16–4/30/18
5/1/17–4/30/18
5/1/17–4/30/18
11/14/16–4/30/18
11/14/16–4/30/18
3 Only changes to the official company name,
rather than trade names, need to be addressed via
a Separate Rate Application. Information regarding
new trade names may be submitted via a Separate
Rate Certification.
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
32273
amozie on DSK3GDR082PROD with NOTICES1
Period to be reviewed
Tenova (TAKRAF GmbH Lauchhammer)
ThyssenKrupp Steel Europe AG
ThyssenKrupp Schulte GmbH
UPC Universal Piping GmbH
VETTER Umformtechnik GmbH
INDIA: Certain Frozen Warmwater Shrimp,4 A–533–840 ...................................................................................................
INDIA: Certain Welded Carbon Steel Standard Pipes and Tubes, A–533–502 .................................................................
Apl Apollo Tubes Ltd.
Asian Contec Ltd.
Bhandari Foils & Tubes Ltd.
Bhushan Steel Ltd.
Blue Moon Logistics Pvt. Ltd.
CH Robinson Worldwide
Ess-Kay Engineers, Manushi Enterprise & Nishi Boring Corporation
Fiber Tech Composite Pvt. Ltd.
Garg Tube Export LLP
GCL Private Limited
Goodluck India Ltd.
GVN Fuels Ltd.
Hydromatik
Jindal Quality Tubular Ltd.
KLT Automatic & Tubular Products Ltd.
Lloyds Line Pipes Ltd.
MARINEtrans India Private Ltd.
Patton International Ltd.
SAR Transport Systems Pvt. Ltd.
Surya Global Steel Tubes Ltd.
Surya Roshni Ltd.
Welspun India Ltd.
Zenith Birla (India) Ltd.
Zenith Birla Steels Private Ltd.
Zenith Dyeintermediates Ltd.
ITALY: Carbon and Alloy Steel Cut-To-Length Plate, A–475–834 .....................................................................................
Euroflex SpA
Evarz Palini e Bertoil SpA
Ilva SpA
Metalcam SpA
Modelleria di Modini Renato
NLMK Verona SpA
Officine Tecnosider srl
Ondulit Italiana SpA
Padana Tubi e Profilati Acciaio SpA
Riva Fire SpA
JAPAN: Diffusion-Annealed Nickel-Plated Flat-Rolled Steel Products, A–588–869 ..........................................................
Nippon Steel & Sumitomo Metals Corporation
Toyo Kohan Co., Ltd.
OMAN: Polyethylene Terephthalate Resin, A–523–810 .....................................................................................................
Octal Saoc FZC
REPUBLIC OF KOREA: Carbon and Alloy Steel Cut-To-Length Plate, A–580–887 .........................................................
Buma Ce Co., Ltd.
Dong Yang Steel Pipe Co., Ltd.
Dongkuk Steel Mill Co., Ltd.
Expeditors Korea Ltd.
Haem Co., Ltd.
Hyundai Glovis Co., Ltd.
Hyundia Steel Company
J.I. Sea & Air Express Co., Ltd.
Maxpeed Co., Ltd.
POSCO
POSCO Daewoo Corporation
POSCO Processing & Service Co., Ltd.
Rames Logistics Co., Ltd.
Sumitomo Corp. Korea Ltd.
REPUBLIC OF KOREA: Polyester Staple Fiber, A–580–839 ............................................................................................
Huvis Corporation
Toray Chemical Korea, Inc.
TAIWAN: Carbon and Alloy Steel Cut-To-Length Plate, A–583–858 .................................................................................
Broad Hand Enterprise Co., Ltd.
C.H. Robinson Freight Services
China Steel Corporation
Chun Chi Grating Co., Ltd.
Eci Taiwan Co., Ltd.
Locksure Inc.
Nan Hoang Traffic Instrument Co.
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00014
Fmt 4703
Sfmt 4703
E:\FR\FM\12JYN1.SGM
12JYN1
2/1/17–1/31/18
5/1/17–4/30/18
11/14/16–4/30/18
5/1/17–4/30/18
5/1/17–4/30/18
11/14/16–4/30/18
5/1/17–4/30/18
11/14/16–4/30/18
32274
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
amozie on DSK3GDR082PROD with NOTICES1
Period to be reviewed
New Marine Consolidator Co., Ltd.
North America Mining Group Co., Ltd..
Oriental Power Logistics Co., Ltd.
Product Depot International Corp.
Scanwell Logistics (Taiwan)
Shang Chen Steel Co., Ltd.
Shin Yang Steel Co., Ltd.
Shye Yao Steel Co., Ltd.
Speedmark Consolidation
Sumeeko Industries Co., Ltd.
Triple Merits Ltd.
UKI Enterprise Co., Ltd.
TAIWAN: Certain Circular Welded Carbon Steel Pipes and Tubes, A–583–008 ...............................................................
Chung Hung Steel Corp.
Far East Machinery Co., Ltd.
Far East Machinery Group
Fine Blanking & Tool Co., Ltd.
Hou Lih Co., Ltd.
Kao Hsing Chang Iron & Steel Corp.
Lang Hwang Corp.
Locksure Inc.
New Chance Products Co., Ltd.
Pat & Jeff Enterprise Co., Ltd.
Pin Tai Metal Inc.
Shang Jouch Industrial Co., Ltd.
Shengyu Steel Co., Ltd.
Shin Yang Steel Co., Ltd.
Shuan Hwa Industrial Co., Ltd.
Tension Steel Industries Co., Ltd.
Titan Fastech Ltd.
Yeong Shien Industrial Co., Ltd.
Yieh Hsing Enterprise Co., Ltd.
Yousing Precision Industry Co., Ltd.
TAIWAN: Stilbenic Optical Brightening Agents, A–583–848 ..............................................................................................
Teh Fong Min International Co., Ltd.
THE PEOPLE’S REPUBLIC OF CHINA: 1-Hydroxyethylidene-1,1-Diphoshonic Acid (Hedp), A–570–045 ......................
Henan Qingshuiyuan Technology Co., Ltd.
THE PEOPLE’S REPUBLIC OF CHINA: Aluminum Extrusions, A–570–967 ....................................................................
Acro Import and Export Co.
Activa International Inc.
Activa Leisure Inc.
Allied Maker Limited
Alnan Aluminum Co., Ltd.
Alnan Aluminum Ltd.
Aluminicaste Fundicion de Mexico
AMC Ltd.
AMC Limited
Anji Chang Hong Chain Manufacturing
Anshan Zhongjda Industry Co., Ltd.
Aoda Aluminium (Hong Kong) Co., Limited
AsiaAlum GroupAtlas Integrated Manufacturing Ltd.
Belton (Asia) Development Limited
Belton (Asia) Development Ltd.
Birchwoods (Lin’an) Leisure Products Co., Ltd.
Bolnar Hong Kong Ltd.
Bracalente Metal Products (Suzhou) Co., Ltd.
Brilliance General Equipment Co., Ltd.
Changshu Changshen Aluminum Products Co., Ltd.
Changshu Changsheng Aluminum Products Co., Ltd.
Changzhou Changzhen Evaporator Co., Ltd.
Changzhou Changzheng Evaporator Co., Ltd.
Changzhou Tenglong Auto Accessories Manufacturing Co. Ltd
Changzhou Tenglong Auto Parts Co., Ltd.
Changzhou Tenglong Auto Parts Co. Ltd.
China Square
China Square Industrial Co.
China Square Industrial Ltd.
China Zhongwang Holdings, Ltd.
Chiping One Stop Industrial & Trade Co., Ltd.
Classic & Contemporary Inc.
Clear Sky Inc.
Cosco (J.M.) Aluminum Co., Ltd.
Cosco (JM) Aluminum Development Co. Ltd.
Dalian Huacheng Aquatic Products
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00015
Fmt 4703
Sfmt 4703
E:\FR\FM\12JYN1.SGM
12JYN1
5/1/17–4/30/18
5/1/17–4/30/18
11/14/16–4/30/18
5/1/17–4/30/18
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
32275
amozie on DSK3GDR082PROD with NOTICES1
Period to be reviewed
Dalian Liwang Trade Co., Ltd.
Danfoss Micro Channel Heat Exchanger (Jia Xing) Co., Ltd.
Daya Hardware Co. Ltd.
Dongguan Dazhan Metal Co., Ltd.
Dongguang Aoda Aluminum Co., Ltd.
Dongguan Golden Tiger Hardware Industrial Co., Ltd.
Dragonluxe Limited
Dynabright International Group (HK) Ltd.
Dynamic Technologies China
ETLA Technology (Wuxi) Co. Ltd.
Ever Extend Ent. Ltd.
Fenghua Metal Product Factory
First Union Property Limited
FookShing Metal & Plastic Co. Ltd.
Foreign Trade Co. of Suzhou New & High-Tech Industrial Development Zone
Foshan City Nanhai Hongjia Aluminum Alloy Co., Ltd.
Foshan Golden Source Aluminum Products Co., Ltd.
Foshan Guangcheng Aluminium Co., Ltd.
Foshan Jinlan Aluminum Co. Ltd.
Foshan JinLan Aluminum Co., Ltd.
Foshan JMA Aluminum Company Limited
Foshan Nanhai Niu Yuan Hardware Product Co., Ltd.
Foshan Shanshui Fenglu Aluminum Co., Ltd.
Foshan Shunde Aoneng Electrical Appliances Co., Ltd.
Foshan Yong Li Jian Aluminum Co., Ltd.
Fujian Sanchuan Aluminum Co., Ltd.
Fukang Aluminum & Plastic Import and Export Co., Ltd.
Fuzhou Sunmodo New Energy Equipment
Gaotang Xinhai Economy & Trade Co., Ltd.
Genimex Shanghai, Ltd.
Global Hi-Tek Precision Co. Ltd.
Global PMX Dongguan Co., Ltd.
Global Point Technology (Far East) Limited
Gold Mountain International Development, Ltd.
Golden Dragon Precise Copper Tube Group, Inc.
Gran Cabrio Capital Pte. Ltd.
Gree Electric Appliances
GT88 Capital Pte. Ltd.
Guang Ya Aluminium Industries Co. Ltd.
Guang Ya Aluminum Industries Company Ltd
Guang Ya Aluminium Industries (HK) Ltd.
Guangcheng Aluminum Co., Ltd.
Guangdong Hao Mei Aluminum Co., Ltd.
Guangdong Jianmei Aluminum Profile Company Limited
Guangdong JMA Aluminum Profile Factory (Group) Co., Ltd.
Guangdong Midea
Guangdong Midea Microwave and Electrical Appliances
Guangdong Nanhai Foodstuffs Imp. & Exp. Co., Ltd.
Guangdong Weiye Aluminum Factory Co., Ltd.
Guangdong Whirlpool Electrical Appliances Co., Ltd.
Guangdong Xingfa Aluminum Co., Ltd.
Guangdong Xin Wei Aluminum Products Co., Ltd.
Guangdong Yonglijian Aluminum Co., Ltd.
Guangdong Zhongya Aluminum Company Ltd.
Guangzhou Jangho Curtain Wall System Engineering Co., Ltd.
Guangzhou Mingcan Die-Casting Hardware Products Co., Ltd.
Hangzhou Xingyi Metal Products Co., Ltd.
Hanwood Enterprises Limited
Hanyung Alcoba Co., Ltd.
Hanyung Alcobis Co., Ltd.
Hanyung Metal (Suzhou) Co., Ltd.
Hao Mei Aluminum Co., Ltd.
Hao Mei Aluminum International Co., Ltd.
Hebei Xusen Wire Mesh Products Co., Ltd.
Henan New Kelong Electrical Appliances Co., Ltd.
Henan Zhongduo Aluminum Magnesium New Material Co, Ltd.
Hong Kong Gree Electric Appliances Sales Limited
Hong Kong Modern Non-Ferrous Metal
Honsense Development Company
Houztek Architectural Products Co., Ltd.
Hui Mei Gao Aluminum Foshan Co., Ltd.
Huixin Aluminum
IDEX Dinglee Technology (Tianjin) Co., Ltd.
IDEX Health
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00016
Fmt 4703
Sfmt 4703
E:\FR\FM\12JYN1.SGM
12JYN1
32276
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
amozie on DSK3GDR082PROD with NOTICES1
Period to be reviewed
IDEX Technology Suzhou Co., Ltd.
Innovative Aluminum (Hong Kong) Limited
iSource Asia
Jackson Travel Products Co., Ltd.
Jangho Curtain Wall Hong Kong Ltd.
Jiangmen Jianghai District Foreign Economic Enterprise Corp. Ltd.
Jiangmen Jianghai Foreign Ent. Gen.
Jiangmen Qunxing Hardware Diecasting Co., Ltd.
Jiangsu Changfa Refrigeration Co.
Jiangyin Suncitygaylin
Jiangyin Trust International Inc.
Jiangyin Xinhong Doors and Windows Co., Ltd.
Jiaxing Jackson Travel Products Co., Ltd.
Jiaxing Taixin Metal Products Co., Ltd.
Jiuyan Co., Ltd.
JMA (HK) Company Limited
Johnson Precision Engineering (Suzhou) Co., Ltd.
Justhere Co., Ltd.
Kam Kiu Aluminum Products Sdn Bhd
Kanal Precision Aluminum Product Co., Ltd.
Karlton Aluminum Company Ltd.
Kong Ah International Company Limited
Kromet International Inc.
Kromet Intl Inc.
Kromet International
Kunshan Giant Light Metal Technology Co., Ltd.
Liaoning Zhong Da Industrial Aluminum Co., Ltd.
Liaoning Zhongwang Group Co., Ltd.
Liaoyang Zhongwang Aluminum Profile Co. Ltd.
Longkou Donghai Trade Co., Ltd.
Metal Tech Co. Ltd.
Metaltek Group Co., Ltd.
Metaltek Metal Industry Co., Ltd.
Midea Air Conditioning Equipment Co., Ltd.
Midea Electric Trading Co., Pte Ltd.
Midea International Trading Co., Ltd.
Midea International Training Co., Ltd.
Miland Luck Limited
Nanhai Textiles Import & Export Co., Ltd.
New Asia Aluminum & Stainless Steel Product Co., Ltd.
New Zhongya Aluminum Factory
Nidec Sankyo (Zhejang) Corporation
Nidec Sankyo Zhejiang Corporation
Nidec Sankyo Singapore Pte. Ltd.
Ningbo Coaster International Co., Ltd.
Ningbo Hi Tech Reliable Manufacturing Company
Ningbo Innopower Tengda Machinery
Ningbo Ivy Daily Commodity Co., Ltd.
Ningbo Yili Import and Export Co., Ltd.
North China Aluminum Co., Ltd.
North Fenghua Aluminum Ltd.
Northern States Metals
PanAsia Aluminum (China) Limited
Pengcheng Aluminum Enterprise Inc.
Permasteelisa Hong Kong Limited
Permasteelisa South China Factory
Pingguo Aluminum Company Limited
Pingguo Asia Aluminum Co., Ltd.
Popular Plastics Company Limited
Precision Metal Works Ltd.
Press Metal International Ltd.
Samuel, Son & Co., Ltd.
Sanchuan Aluminum Co., Ltd.
Sanhua (Hangzhou) Micro Channel Heat Exchanger Co., Ltd.
Shandong Fukang Aluminum & Plastic Co. LTD.
Shandong Huajian Aluminum Group
Shangdong Huasheng Pesticide Machinery Co.
Shangdong Nanshan Aluminum Co., Ltd.
Shanghai Automobile Air-Conditioner Accessories Co. Ltd.
Shanghai Automobile Air Conditioner Accessories Ltd.
Shanghai Canghai Aluminum Tube Packaging Co., Ltd.
Shanghai Dofiberone Composites Co. Ltd.
Shanghai Dongsheng Metal
Shanghai Shen Hang Imp & Exp Co., Ltd.
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00017
Fmt 4703
Sfmt 4703
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
32277
amozie on DSK3GDR082PROD with NOTICES1
Period to be reviewed
Shanghai Tongtai Precise Aluminum Alloy Manufacturing Co. Ltd.
Shanghai Top-Ranking Aluminum Products Co., LTD.
Shanghai Top-Ranking New Materials Co., Ltd.
Shenyang Yuanda Aluminum Industry Engineering Co. Ltd.
Shenzhen Hudson Technology Development Co.
Shenzhen Jiuyuan Co., Ltd.
Sihui Shi Guo Yao Aluminum Co., Ltd.
Sincere Profit Limited
Skyline Exhibit Systems (Shanghai) Co. Ltd.
Southwest Aluminum (Group) Co., Ltd.
Summit Heat Sinks Metal Co., Ltd.
Summit Plastics Nanjing Co. Ltd.
Suzhou JRP Import & Export Co., Ltd.
Suzhou New Hongji Precision Part Co.
Tai-Ao Aluminum (Taishan) Co. Ltd.
Taishan City Kam Kiu Aluminium Extrusion Co., Ltd.
Taizhou Lifeng Manufacturing Co., Ltd.
Taitoh Machinery Shanghai Co. Ltd.
Taizhou United Imp. & Exp. Co., Ltd.
tenKsolar (Shanghai) Co., Ltd.
Tianjin Ganglv Nonferrous Metal Materials Co., Ltd.
Tianjin Jinmao Import & Export Corp., Ltd.
Tianjin Ruxin Electric Heat Transmission Technology Co., Ltd.
Tianjin Xiandai Plastic & Aluminum Products Co., Ltd.
Tiazhou Lifeng Manufacturing Corporation
Top-Wok Metal Co., Ltd.
Traffic Brick Network, LLC
Union Aluminum (SIP) Co.
Union Industry (Asia) Co., Ltd.
USA Worldwide Door Components (Pinghu) Co., Ltd.
Wenzhou Shengbo Decoration & Hardware
Wenzhou Yongtai Electric Co., Ltd.
Whirlpool (Guangdong)
Whirlpool Canada L.P.
Whirlpool Microwave Products Development Ltd.
Worldwide Door Components, Inc.
WTI Building Products, Ltd.
Wuxi Lutong Fiberglass Doors Co., Ltd,
Xin Wei Aluminum Co.
Xin Wei Aluminum Company Limited
Xinya Aluminum & Stainless Steel Product Co., Ltd.
Yuyao Haoshen Import & Export
Yuyao Fanshun Import & Export Co., Ltd.
Zahoqing China Square Industry Limited
Zhaoqing Asia Aluminum Factory Company Ltd.
Zhaoqing China Square Industry Limited
Zhaoqing China Square Industrial Ltd.
Zhaoqing New Zhongya Aluminum Co., Ltd.
Zhejiang Anji Xinxiang Aluminum Co., Ltd.
Zhejiang Lilies Industrial and Commercial Co.
Zhejiang Yili Automobile Air Condition Co., Ltd.
Zhejiang Yongkang Listar Aluminum Industry Co., Ltd.
Zhejiang Zhengte Group Co., Ltd.
Zhenjiang Xinlong Group Co., Ltd.
Zhongshan Daya Hardware Co., Ltd.
Zhongshan Gold Mountain Aluminum Factory Ltd.
Zhongya Shaped Aluminum (HK) Holding Limited
Zhuhai Runxingtai Electrical Equipment Co., Ltd.
THE PEOPLE’S REPUBLIC OF CHINA: Oil Country Tubular Goods, A–570–943 ...........................................................
Baoshan Iron & Steel
Hengyang Steel Tube Group International Trading Inc.
Hubei Xinyegang Steel Co., Ltd.
Hubei Xin Yegang Special Tube
THE PEOPLE’S REPUBLIC OF CHINA: Pure Magnesium, A–570–832 ...........................................................................
Tianjin Magnesium International Co., Ltd.
Tianjin Magnesium Metal Co., Ltd.
TURKEY: Circular Welded Carbon Steel Pipes and Tubes, A–489–501 ...........................................................................
Borusan Birlesik Boru Fabrikalari San ve Tic.
Borusan Gemlik Boru Tesisleri A.S.
Borusan Holding
Borusan Ihracat Ithalat ve Dagitim A.S.
Borusan Istikbal Ticaret T.A.S.
Borusan Ithicat ve Dagitim A.S.
Borusan Mannesmann Boru Sanayi ve Ticaret A.S.
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00018
Fmt 4703
Sfmt 4703
E:\FR\FM\12JYN1.SGM
12JYN1
5/1/17–4/30/18
5/1/17–4/30/18
5/1/17–4/30/18
32278
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
Period to be reviewed
amozie on DSK3GDR082PROD with NOTICES1
Borusan Mannesmann Yatirim Holding
Cayirova Boru Sanayi ve Ticaret A.S.
Cinar Boru Profil San. Ve Tic. As
Erbosan Erciyas Boru Sanayi ve Ticaret A.S.
Kale Baglanti Teknolojileri San. ve Tic.
Noksel Celik Boru Sanayi A.S.
Toscelik Metal Ticaret A.S.
Toscelik Profil ve Sac Endustrisi A.S.
Tosyali Dis Ticaret A.S.
Tubeco Pipe and Steel Corporation
Yucel Boru ve Profil Endustrisi A.S.
Yucelboru Ihracat Ithalat ve Pazarlama A.S.
TURKEY: Light-Walled Rectangular Pipe and Tube, A–489–815 ......................................................................................
Noksel Celik Boru Sanayi A.S.
Countervailing Duty Proceedings
REPUBLIC OF KOREA: Carbon and Alloy Steel Cut-To-Length Plate, C–580–888 .........................................................
BDP International
Blue Track Equipment
Boxco
Bukook Steel Co., Ltd.
Buma CE Co., Ltd.
Daelim Industrial Co., Ltd.
Daesam Industrial Co., Ltd.
Daesin Lighting Co., Ltd.
Daewoo International Corp.
Dong Yang Steel Pipe
Dongkuk Industries Co., Ltd.
Dongkuk Steel Mill Co., Ltd.
Dongbu Steel Co., Ltd.
EAE Automotive Equipment
EEW KHPC Co., Ltd.
Eplus Expo Inc.
GS Global Corp.
Haem Co., Ltd.
Han Young Industries
Hyosung Corp.
Hyundai Steel Co.
Jinmyung Frictech Co., Ltd.
Korean Iron and Steel Co., Ltd.
Kyoungil Precision Co., Ltd.
POSCO
Samsun C&T Corp.
SK Netwoks Co., Ltd.
Steel N People Ltd.
Summit Industry
Sungjin Co., Ltd.
Young Sun Steel
THE PEOPLE’S REPUBLIC OF CHINA: 1-Hydroxyethylidene-1,1-Diphoshonic Acid (Hedp), C–570–046 ......................
Changzhou Kewei Fine Chemicals Co., Ltd.
Changzhou Yao’s Tongde Chemical Co., Ltd.
Hebei Longke Water Treatment Co., Ltd.
Henan Qinshuiyuan Technology Co., Ltd.
Jinghai Environmental Protection Co., Ltd. (Jianghai)
Nanjing University of Chemical Technology Changzhou Wujin Water Quality
Stabilizer Factory
Nantong Uniphos Chemicals Co., Ltd.
Shandong Huayou Chemistry Co., Ltd.
Shandong Taihe Chemicals Co., Ltd.
Shandong Taihe Water Treatment Technologies Co., Ltd.
Shandong Xintai Water Treatment Technology
Wujin Fine Chemical Factory Co., Ltd.
Zaozhuang Fuxing Water Treatment Technology
Zaozhuang YouBang Chemicals Co., Ltd.
Zouping Dongfang Chemical Industry Co., Ltd.
THE PEOPLE’S REPUBLIC OF CHINA: Aluminum Extrusions, C–570–968 ....................................................................
Acro Import and Export Co.
Activa International Inc.
Activa Leisure Inc.
Allied Maker Limited
Alnan Aluminum Co., Ltd.
Alnan Aluminum Ltd.
Aluminicaste Fundicion de Mexico
AMC Ltd.
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00019
Fmt 4703
Sfmt 4703
E:\FR\FM\12JYN1.SGM
12JYN1
5/1/17–4/30/18
9/14/16- 12/31/17
9/8/16–12/31/17
1/1/17–12/31/17
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
32279
amozie on DSK3GDR082PROD with NOTICES1
Period to be reviewed
AMC Limited
Anji Chang Hong Chain Manufacturing
Anshan Zhongjda Industry Co., Ltd.
Aoda Aluminium (Hong Kong) Co., Limited
AsiaAlum Group
Atlas Integrated Manufacturing Ltd.
Belton (Asia) Development Limited
Belton (Asia) Development Ltd.
Birchwoods (Lin’an) Leisure Products Co., Ltd.
Bolnar Hong Kong Ltd.
Bracalente Metal Products (Suzhou) Co., Ltd.
Brilliance General Equipment Co., Ltd.
Changshu Changshen Aluminum Products Co., Ltd.
Changshu Changsheng Aluminum Products Co., Ltd.
Changzhou Changzhen Evaporator Co., Ltd.
Changzhou Changzheng Evaporator Co., Ltd.
Changzhou Tenglong Auto Accessories Manufacturing Co. Ltd
Changzhou Tenglong Auto Parts Co., Ltd.
Changzhou Tenglong Auto Parts Co Ltd
China Square
China Square Industrial Co.
China Square Industrial Ltd.
China Zhongwang Holdings, Ltd.
Chiping One Stop Industrial & Trade Co., Ltd.
Classic & Contemporary Inc.
Clear Sky Inc.
Cosco (J.M.) Aluminum Co., Ltd.
Cosco (JM) Aluminum Development Co. Ltd
Dalian Huacheng Aquatic Products
Dalian Liwang Trade Co., Ltd.
Danfoss Micro Channel Heat Exchanger (Jia Xing) Co., Ltd.
Daya Hardware Co. Ltd.
Dongguan Dazhan Metal Co., Ltd.
Dongguang Aoda Aluminum Co., Ltd.
Dongguan Golden Tiger Hardware Industrial Co., Ltd.
Dragonluxe Limited
Dynabright International Group (HK) Ltd.
Dynamic Technologies China
ETLA Technology (Wuxi) Co. Ltd.
Ever Extend Ent. Ltd.
Fenghua Metal Product Factory
First Union Property Limited
FookShing Metal & Plastic Co. Ltd.
Foreign Trade Co. of Suzhou New & High-Tech Industrial Development Zone
Foshan City Nanhai Hongjia Aluminum Alloy Co., Ltd.
Foshan Golden Source Aluminum Products Co., Ltd.
Foshan Guangcheng Aluminium Co., Ltd
Foshan Jinlan Aluminum Co. Ltd.
Foshan JinLan Aluminum Co., Ltd.
Foshan JMA Aluminum Company Limited
Foshan Nanhai Niu Yuan Hardware Product Co., Ltd.
Foshan Shanshui Fenglu Aluminum Co., Ltd.
Foshan Shunde Aoneng Electrical Appliances Co., Ltd
Foshan Yong Li Jian Aluminum Co., Ltd.
Fujian Sanchuan Aluminum Co., Ltd.
Fukang Aluminum & Plastic Import and Export Co., Ltd.
Fuzhou Sunmodo New Energy Equipment
Gaotang Xinhai Economy & Trade Co., Ltd.
Genimex Shanghai, Ltd.
Global Hi-Tek Precision Co. Ltd
Global PMX Dongguan Co., Ltd.
Global Point Technology (Far East) Limited
Gold Mountain International Development, Ltd.
Golden Dragon Precise Copper Tube Group, Inc.
Gran Cabrio Capital Pte. Ltd.
Gree Electric Appliances
GT88 Capital Pte. Ltd.
Guang Ya Aluminium Industries Co. Ltd.
Guang Ya Aluminum Industries Company Ltd
Guang Ya Aluminium Industries (HK) Ltd.
Guangcheng Aluminum Co., Ltd.
Guangdong Hao Mei Aluminum Co., Ltd.
Guangdong Jianmei Aluminum Profile Company Limited
Guangdong JMA Aluminum Profile Factory (Group) Co., Ltd.
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00020
Fmt 4703
Sfmt 4703
E:\FR\FM\12JYN1.SGM
12JYN1
32280
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
amozie on DSK3GDR082PROD with NOTICES1
Period to be reviewed
Guangdong Midea
Guangdong Midea Microwave and Electrical Appliances
Guangdong Nanhai Foodstuffs Imp. & Exp. Co., Ltd.
Guangdong Weiye Aluminum Factory Co., Ltd.
Guangdong Whirlpool Electrical Appliances Co., Ltd.
Guangdong Xingfa Aluminum Co., Ltd.
Guangdong Xin Wei Aluminum Products Co., Ltd.
Guangdong Yonglijian Aluminum Co., Ltd.
Guangdong Zhongya Aluminum Company Ltd.
Guangzhou Jangho Curtain Wall System Engineering Co., Ltd.
Guangzhou Mingcan Die-Casting Hardware Products Co., Ltd.
Hangzhou Xingyi Metal Products Co., Ltd.
Hanwood Enterprises Limited
Hanyung Alcoba Co., Ltd.
Hanyung Alcobis Co., Ltd.
Hanyung Metal (Suzhou) Co., Ltd.
Hao Mei Aluminum Co., Ltd.
Hao Mei Aluminum International Co., Ltd.
Hebei Xusen Wire Mesh Products Co., Ltd.
Henan New Kelong Electrical Appliances Co., Ltd.
Henan Zhongduo Aluminum Magnesium New Material Co., Ltd.
Hong Kong Gree Electric Appliances Sales Limited
Hong Kong Modern Non-Ferrous Metal
Honsense Development Company
Houztek Architectural Products Co., Ltd.
Hui Mei Gao Aluminum Foshan Co., Ltd.
Huixin Aluminum
IDEX Dinglee Technology (Tianjin) Co., Ltd.
IDEX Health
IDEX Technology Suzhou Co., Ltd.
Innovative Aluminum (Hong Kong) Limited
iSource Asia
Jackson Travel Products Co., Ltd.
Jangho Curtain Wall Hong Kong Ltd.
Jiangmen Jianghai District Foreign Economic Enterprise Corp. Ltd.
Jiangmen Jianghai Foreign Ent. Gen.
Jiangmen Qunxing Hardware Diecasting Co., Ltd.
Jiangsu Changfa Refrigeration Co.
Jiangyin Suncitygaylin
Jiangyin Trust International Inc.
Jiangyin Xinhong Doors and Windows Co., Ltd.
Jiaxing Jackson Travel Products Co., Ltd.
Jiaxing Taixin Metal Products Co., Ltd.
Jiuyan Co., Ltd.
JMA (HK) Company Limited
Johnson Precision Engineering (Suzhou) Co., Ltd.
Justhere Co., Ltd.
Kam Kiu Aluminum Products Sdn Bhd
Kanal Precision Aluminum Product Co., Ltd.
Karlton Aluminum Company Ltd.
Kong Ah International Company Limited
Kromet International Inc.
Kromet Intl Inc.
Kromet International
Kunshan Giant Light Metal Technology Co., Ltd.
Liaoning Zhong Da Industrial Aluminum Co., Ltd.
Liaoning Zhongwang Group Co., Ltd.
Liaoyang Zhongwang Aluminum Profile Co. Ltd.
Longkou Donghai Trade Co., Ltd.
Metal Tech Co Ltd.
Metaltek Group Co., Ltd.
Metaltek Metal Industry Co., Ltd.
Midea Air Conditioning Equipment Co., Ltd.
Midea Electric Trading Co., Pte Ltd.
Midea International Trading Co., Ltd.
Midea International Training Co., Ltd.
Miland Luck Limited
Nanhai Textiles Import & Export Co., Ltd.
New Asia Aluminum & Stainless Steel Product Co., Ltd.
New Zhongya Aluminum Factory
Nidec Sankyo (Zhejang) Corporation
Nidec Sankyo Zhejiang Corporation
Nidec Sankyo Singapore Pte. Ltd.
Ningbo Coaster International Co., Ltd.
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00021
Fmt 4703
Sfmt 4703
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
32281
amozie on DSK3GDR082PROD with NOTICES1
Period to be reviewed
Ningbo Hi Tech Reliable Manufacturing Company
Ningbo Innopower Tengda Machinery
Ningbo Ivy Daily Commodity Co., Ltd.
Ningbo Yili Import and Export Co., Ltd.
North China Aluminum Co., Ltd.
North Fenghua Aluminum Ltd.
Northern States Metals
PanAsia Aluminum (China) Limited
Pengcheng Aluminum Enterprise Inc.
Permasteelisa Hong Kong Limited
Permasteelisa South China Factory
Pingguo Aluminum Company Limited
Pingguo Asia Aluminum Co., Ltd.
Popular Plastics Company Limited
Precision Metal Works Ltd.
Press Metal International Ltd.
Samuel, Son & Co., Ltd.
Sanchuan Aluminum Co., Ltd.
Sanhua (Hangzhou) Micro Channel Heat Exchanger Co., Ltd.
Shandong Fukang Aluminum & Plastic Co. LTD.
Shandong Huajian Aluminum Group
Shangdong Huasheng Pesticide Machinery Co.
Shangdong Nanshan Aluminum Co., Ltd.
Shanghai Automobile Air-Conditioner Accessories Co Ltd.
Shanghai Automobile Air Conditioner Accessories Ltd.
Shanghai Canghai Aluminum Tube Packaging Co., Ltd.
Shanghai Dofiberone Composites Co. Ltd.
Shanghai Dongsheng Metal
Shanghai Shen Hang Imp & Exp Co., Ltd.
Shanghai Tongtai Precise Aluminum Alloy Manufacturing Co. Ltd.
Shanghai Top-Ranking Aluminum Products Co., LTD.
Shanghai Top-Ranking New Materials Co., Ltd.
Shenyang Yuanda Aluminum Industry Engineering Co. Ltd.
Shenzhen Hudson Technology Development Co.
Shenzhen Jiuyuan Co., Ltd.
Sihui Shi Guo Yao Aluminum Co., Ltd.
Sincere Profit Limited
Skyline Exhibit Systems (Shanghai) Co. Ltd.
Southwest Aluminum (Group) Co., Ltd.
Summit Heat Sinks Metal Co., Ltd.
Summit Plastics Nanjing Co. Ltd.
Suzhou JRP Import & Export Co., Ltd.
Suzhou New Hongji Precision Part Co.
Tai-Ao Aluminum (Taishan) Co. Ltd.
Taishan City Kam Kiu Aluminium Extrusion Co., Ltd.
Taitoh Machinery Shanghai Co. Ltd.
Taizhou Lifeng Manufacturing Co., Ltd.
Tiazhou Lifeng Manufacturing Corporation
Taizhou United Imp. & Exp. Co., Ltd.
tenKsolar (Shanghai) Co., Ltd.
Tianjin Ganglv Nonferrous Metal Materials Co., Ltd.
Tianjin Jinmao Import & Export Corp., Ltd.
Tianjin Ruxin Electric Heat Transmission Technology Co., Ltd.
Tianjin Xiandai Plastic & Aluminum Products Co., Ltd.
Top-Wok Metal Co., Ltd.
Traffic Brick Network, LLC
Union Aluminum (SIP) Co.
Union Industry (Asia) Co., Ltd.
USA Worldwide Door Components (Pinghu) Co., Ltd.
Wenzhou Shengbo Decoration & Hardware
Wenzhou Yongtai Electric Co., Ltd.
Whirlpool (Guangdong)
Whirlpool Canada L.P.
Whirlpool Microwave Products Development Ltd.
Worldwide Door Components, Inc.
WTI Building Products, Ltd.
Wuxi Lutong Fiberglass Doors Co., Ltd.
Xin Wei Aluminum Co.
Xin Wei Aluminum Company Limited
Xinya Aluminum & Stainless Steel Product Co., Ltd.
Yuyao Fanshun Import & Export Co., Ltd.
Yuyao Haoshen Import & Export
Zahoqing China Square Industry Limited
Zhaoqing Asia Aluminum Factory Company Ltd.
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00022
Fmt 4703
Sfmt 4703
E:\FR\FM\12JYN1.SGM
12JYN1
32282
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
Period to be reviewed
Zhaoqing China Square Industrial Ltd.
Zhaoqing China Square Industry Limited
Zhaoqing New Zhongya Aluminum Co., Ltd.
Zhejiang Anji Xinxiang Aluminum Co., Ltd.
Zhejiang Lilies Industrial and Commercial Co.
Zhejiang Yili Automobile Air Condition Co., Ltd.
Zhejiang Yongkang Listar Aluminum Industry Co., Ltd.
Zhejiang Zhengte Group Co., Ltd.
Zhenjiang Xinlong Group Co., Ltd.
Zhongshan Daya Hardware Co., Ltd.
Zhongshan Gold Mountain Aluminum Factory Ltd.
Zhongya Shaped Aluminum (HK) Holding Limited
Zhuhai Runxingtai Electrical Equipment Co., Ltd.
Gap Period Liquidation
Suspension Agreements
None.
Duty Absorption Reviews
amozie on DSK3GDR082PROD with NOTICES1
During any administrative review
covering all or part of a period falling
between the first and second or third
and fourth anniversary of the
publication of an antidumping duty
order under 19 CFR 351.211 or a
determination under 19 CFR
351.218(f)(4) to continue an order or
suspended investigation (after sunset
review), the Secretary, if requested by a
domestic interested party within 30
days of the date of publication of the
notice of initiation of the review, will
determine whether antidumping duties
have been absorbed by an exporter or
producer subject to the review if the
subject merchandise is sold in the
United States through an importer that
is affiliated with such exporter or
producer. The request must include the
name(s) of the exporter or producer for
which the inquiry is requested.
4 On April 16, 2018, Commerce initiated the
2017–2018 administrative review of Certain Frozen
Warmwater Shrimp from India. See Initiation of
Antidumping and Countervailing Duty
Administrative Reviews, 83 FR 16298, 16300–
16304. In the notice of initiation, Commerce
inadvertently made the following errors: (1) We
included Premier Marine Products Private Limited
twice; (2) we made typographical errors in the
names of two companies (i.e., Triveni Fisheries P
Ltd. and U & Company Marine Exports, listed as
Triveni Fisheries P Ltd.U & Company Marine
Exports); and (3) we failed to limit the review for
Devi Sea Foods to shrimp produced in India where
Devi Sea Foods acted as either the manufacturer or
exporter (but not both), because shrimp produced
and exported by this company is not covered by the
antidumping duty order. See Certain Frozen
Warmwater Shrimp from India: Final Results of
Antidumping Duty Administrative Review, Partial
Rescission of Review, and Notice of Revocation of
Order in Part, 75 FR 41813, 41814 (July 19, 2010).
Accordingly, we are initiating this administrative
review for: (1) Premier Marine Products Private
Limited only once; (2) Triveni Fisheries P Ltd. and
U & Company Marine Exports (instead of Triveni
Fisheries P Ltd.U & Company Marine Exports); and
(3) Devi Sea Foods, but only with respect to shrimp
for which Devi Sea Foods is either the manufacturer
or exporter, but not both.
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
For the first administrative review of
any order, there will be no assessment
of antidumping or countervailing duties
on entries of subject merchandise
entered, or withdrawn from warehouse,
for consumption during the relevant
provisional-measures ‘‘gap’’ period, of
the order, if such a gap period is
applicable to the POR.
Administrative Protective Orders and
Letters of Appearance
Interested parties must submit
applications for disclosure under
administrative protective orders in
accordance with the procedures
outlined in Commerce’s regulations at
19 CFR 351.305. Those procedures
apply to administrative reviews
included in this notice of initiation.
Parties wishing to participate in any of
these administrative reviews should
ensure that they meet the requirements
of these procedures (e.g., the filing of
separate letters of appearance as
discussed at 19 CFR 351.103(d)).
Factual Information Requirements
Commerce’s regulations identify five
categories of factual information in 19
CFR 351.102(b)(21), which are
summarized as follows: (i) Evidence
submitted in response to questionnaires;
(ii) evidence submitted in support of
allegations; (iii) publicly available
information to value factors under 19
CFR 351.408(c) or to measure the
adequacy of remuneration under 19 CFR
351.511(a)(2); (iv) evidence placed on
the record by Commerce; and (v)
evidence other than factual information
described in (i)–(iv). These regulations
require any party, when submitting
factual information, to specify under
which subsection of 19 CFR
351.102(b)(21) the information is being
submitted and, if the information is
submitted to rebut, clarify, or correct
factual information already on the
record, to provide an explanation
identifying the information already on
PO 00000
Frm 00023
Fmt 4703
Sfmt 4703
the record that the factual information
seeks to rebut, clarify, or correct. The
regulations, at 19 CFR 351.301, also
provide specific time limits for such
factual submissions based on the type of
factual information being submitted.
Please review the final rule, available at
http://enforcement.trade.gov/frn/2013/
1304frn/2013-08227.txt, prior to
submitting factual information in this
segment.
Any party submitting factual
information in an antidumping duty or
countervailing duty proceeding must
certify to the accuracy and completeness
of that information.5 Parties are hereby
reminded that revised certification
requirements are in effect for company/
government officials as well as their
representatives. All segments of any
antidumping duty or countervailing
duty proceedings initiated on or after
August 16, 2013, should use the formats
for the revised certifications provided at
the end of the Final Rule.6 Commerce
intends to reject factual submissions in
any proceeding segments if the
submitting party does not comply with
applicable revised certification
requirements.
Extension of Time Limits Regulation
Parties may request an extension of
time limits before a time limit
established under Part 351 expires, or as
otherwise specified by the Secretary.
See 19 CFR 351.302. In general, an
extension request will be considered
untimely if it is filed after the time limit
established under Part 351 expires. For
submissions which are due from
multiple parties simultaneously, an
extension request will be considered
untimely if it is filed after 10:00 a.m. on
the due date. Examples include, but are
5 See
section 782(b) of the Act.
Certification of Factual Information To
Import Administration During Antidumping and
Countervailing Duty Proceedings, 78 FR 42678 (July
17, 2013) (Final Rule); see also the frequently asked
questions regarding the Final Rule, available at
http://enforcement.trade.gov/tlei/notices/factual_
info_final_rule_FAQ_07172013.pdf.
6 See
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
not limited to: (1) Case and rebuttal
briefs, filed pursuant to 19 CFR 351.309;
(2) factual information to value factors
under 19 CFR 351.408(c), or to measure
the adequacy of remuneration under 19
CFR 351.511(a)(2), filed pursuant to 19
CFR 351.301(c)(3) and rebuttal,
clarification and correction filed
pursuant to 19 CFR 351.301(c)(3)(iv); (3)
comments concerning the selection of a
surrogate country and surrogate values
and rebuttal; (4) comments concerning
U.S. Customs and Border Protection
data; and (5) quantity and value
questionnaires. Under certain
circumstances, Commerce may elect to
specify a different time limit by which
extension requests will be considered
untimely for submissions which are due
from multiple parties simultaneously. In
such a case, Commerce will inform
parties in the letter or memorandum
setting forth the deadline (including a
specified time) by which extension
requests must be filed to be considered
timely. This modification also requires
that an extension request must be made
in a separate, stand-alone submission,
and clarifies the circumstances under
which Commerce will grant untimelyfiled requests for the extension of time
limits. These modifications are effective
for all segments initiated on or after
October 21, 2013. Please review the
final rule, available at http://
www.gpo.gov/fdsys/pkg/FR-2013-09-20/
html/2013-22853.htm, prior to
submitting factual information in these
segments.
These initiations and this notice are
in accordance with section 751(a) of the
Act (19 U.S.C. 1675(a)) and 19 CFR
351.221(c)(1)(i).
Dated: July 6, 2018.
Wendy J. Frankel,
Director, Customs and Border Protection
Liaison Unit, Antidumping and
Countervailing Duty Operations, Enforcement
and Compliance.
[FR Doc. 2018–14923 Filed 7–11–18; 8:45 am]
BILLING CODE 3510–DS–P
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
amozie on DSK3GDR082PROD with NOTICES1
RIN 0648–XG310
Endangered and Threatened Species;
Take of Anadromous Fish
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
ACTION: Notice of final determination
and discussion of underlying biological
AGENCY:
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
and environmental analyses; notice of
availability of Finding of No Significant
Impact.
NMFS has evaluated the joint
resource management plan (RMP)
submitted to NMFS by the Sauk-Suiattle
Indian Tribe, Swinomish Indian Tribal
Community, Upper Skagit Indian Tribe,
the Skagit River System Cooperative,
and the Washington Department of Fish
and Wildlife, pursuant to the limitation
on take prohibitions for actions
conducted under Limit 6 of the 4(d)
Rule for salmon and steelhead
promulgated under the Endangered
Species Act (ESA). The RMP specifies
harvest of ESA-listed, Skagit River
steelhead in Treaty Indian fisheries and
non-treaty recreational fisheries in the
Skagit River terminal area of
Washington State. This document serves
to notify the public that NMFS, by
delegated authority from the Secretary
of Commerce, had determined pursuant
to Limit 6 of the 4(d) rule for salmon
and steelhead that implementing and
enforcing the RMP will not appreciably
reduce the likelihood of survival and
recovery of Puget Sound steelhead. In
compliance with the National
Environmental Policy Act (NEPA),
NMFS also announces the availability of
its Finding of No Significant Impact for
the Skagit River steelhead fisheries
determination.
DATES: The final determination of take
prohibition limitation under the ESA
was made on April 12, 2018. The
Finding of No Significant Impact was
signed on April 12, 2018.
ADDRESSES: Requests for copies of the
decision documents or any of the other
associated documents should be
directed to NOAA’s National Marine
Fisheries Service, West Coast Region,
Sustainable Fisheries Division, 510
Desmond Drive, Suite 103, Lacey, WA
98503. The documents are also available
online at www.westcoast.fisheries.
noaa.gov.
FOR FURTHER INFORMATION CONTACT:
James Dixon at (360) 534–9329 or by
email at [email protected].
SUPPLEMENTARY INFORMATION:
SUMMARY:
ESA-Listed Species Covered in This
Notice
Steelhead (Oncorhynchus mykiss):
threatened, naturally produced and
artificially propagated Puget Sound.
Chinook salmon (O. tshawytscha):
threatened, naturally produced and
artificially propagated Puget Sound.
Background
The Sauk-Suiattle Indian Tribe,
Swinomish Indian Tribal Community,
PO 00000
Frm 00024
Fmt 4703
Sfmt 4703
32283
Upper Skagit Indian Tribe, and the
Skagit River System Cooperative and the
Washington Department of Fish and
Wildlife have jointly submitted a
steelhead fishery RMP to NMFS
pursuant to the limitation on take
prohibitions for actions conducted
under Limit 6 of the 4(d) Rule for
salmon and steelhead promulgated
under the Endangered Species Act
(ESA). The plan was submitted in
November of 2016, pursuant to limit 6
of the 4(d) Rule for ESA-listed salmon
and steelhead. The RMP would manage
the harvest of Skagit River natural-origin
steelhead in the Skagit River and in the
terminal marine area of the Skagit River.
As required, NMFS took public
comments on its recommended
determination for how the plans address
the criteria in § 223.203(b)(5) prior to
making its final determination.
Discussion of the Biological Analysis
Underlying the Determination
The goal of the Skagit RMP is to
provide steelhead fishing opportunities
for the Skagit River Treaty Tribes and
for recreational fishers, in a manner that
is conservative at higher run sizes and
increasingly so at lower run sizes. For
a period of five years, the Skagit RMP
will implement annual steelhead
fisheries in the Skagit terminal
management area consistent with the
impact limits, management framework,
enforcement, and monitoring
requirements, as described in the RMP.
The Skagit RMP utilizes an abundancebased, stepped harvest regime to
determine annual harvest rates, based
on the annual forecasted run size. These
stepped harvest rates range from a 4
percent total allowable harvest rate at
low run sizes (<4,001 adults) to 25
percent for runs greater than 8,001
adults.
NMFS has analyzed the Skagit RMP’s
proposed abundance-based, stepped
harvest regime, along with the
conservation measures proposed in the
plan. We have concluded that the Skagit
RMP would provide effective protection
to the Skagit River steelhead
populations based on parameters
defining a viable salmonid population;
in terms of overall abundance and
productivity, as well as the diversity
and spatial structure of the individual
populations within the Skagit River
basin. The Skagit RMP will provide for
the proposed harvest opportunities
while not appreciably slowing the
population’s achievement of viable
function.
NMFS’ determination on the Skagit
RMP depends upon implementation of
all of the monitoring, evaluation,
reporting tasks or assignments, and
E:\FR\FM\12JYN1.SGM
12JYN1
32284
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
enforcement activities included in the
RMP. Reporting and inclusion of new
information derived from research,
monitoring, and evaluation activities
described in the plan provide assurance
that performance standards will be
achieved in future seasons.
Summary of Comments Received in the
Response to the Proposed Evaluation
and Pending Determination
NMFS published notice of its
Proposed Evaluation and Pending
Determination (PEPD) on the plan for
public review and comment on
December 7, 2017 (82 FR 57729). The
PEPD was available for public review
and comment for 30 days.
During the public comment period,
121 comments were received, all by
email. These came in the form of:
Individual, unique comments;
individuals who submitted form-letter
communications, some with added
comments; and letters from fish
conservation organizations. NMFS
thoroughly reviewed and considered all
of the substantive comments received
from the public and the additional
literature and studies submitted. This
review of new information and data
informed NMFS’ subsequent analysis, in
its biological opinion, but did not lead
to any changes to the Skagit RMP, as
submitted, or to NMFS’ determination
that the plan adequately addresses the
4(d), Limit 6 criteria. A section
summarizing and responding to the
substantive comments received during
the public comment period on the PEPD
is included as part of the final
evaluation document, available on the
West Coast Region website. Based on its
evaluation and recommended
determination and taking into account
the public comments, NMFS issued its
final determination on the joint statetribal plan.
amozie on DSK3GDR082PROD with NOTICES1
Authority
Under section 4 of the ESA, the
Secretary of Commerce is required to
adopt such regulations as he deems
necessary and advisable for the
conservation of species listed as
threatened. The ESA salmon and
steelhead 4(d) rule (50 CFR 223.203(b))
specifies categories of activities that
contribute to the conservation of listed
salmonids and sets out the criteria for
such activities. The rule further
provides that the prohibitions of
paragraph (a) of the rule do not apply to
actions undertaken in compliance with
a plan developed jointly by a state and
a tribe and determined by NMFS to be
in accordance with the salmon and
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
steelhead 4(d) rule (65 FR 42422, July
10, 2000).
Angela Somma,
Chief, Endangered Species Division, Office
of Protected Resources, National Marine
Fisheries Service.
[FR Doc. 2018–14950 Filed 7–11–18; 8:45 am]
BILLING CODE 3510–22–P
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
Submission for OMB Review;
Comment Request
The Department of Commerce will
submit to the Office of Management and
Budget (OMB) for clearance the
following proposal for collection of
information under the provisions of the
Paperwork Reduction Act (44 U.S.C.
Chapter 35).
Agency: National Oceanic and
Atmospheric Administration (NOAA).
Title: National Oceanic and
Atmospheric Administration’s
Papahanaumokuakea Marine National
Monument and University of Hawaii
Research Internship Program.
OMB Control Number: 0648–0719.
Form Number(s): None.
Type of Request: Regular (extension of
a currently approved information
collection).
Number of Respondents: 80.
Average Hours per Response: 1 hour
or less, for each application, reference
letter and support letter.
Burden Hours: 80.
Needs and Uses: This request is for
extension of a currently approved
information collection.
The National Oceanic and
Atmospheric Administration’s
(NOAA’s) Papaha¯naumokua¯kea Marine
National Monument (PMNM) would
like to collect student data and
information for the purposes of selecting
candidates for its research internship
program in partnership with the
University of Hawaii. The application
package would contain: (1) A form
requesting information on academic
background and professional
experiences, (2) reference forms in
support of the internship application by
two educational or professional
references, and (3) a support letter from
one academic professor or advisor.
Affected Public: Individuals or
households.
Frequency: One time.
Respondent’s Obligation: Voluntary.
This information collection request
may be viewed at reginfo.gov. Follow
the instructions to view Department of
PO 00000
Frm 00025
Fmt 4703
Sfmt 4703
Commerce collections currently under
review by OMB.
Written comments and
recommendations for the proposed
information collection should be sent
within 30 days of publication of this
notice to OIRA_Submission@
omb.eop.gov or fax to (202) 395–5806.
Dated: July 8, 2018.
Sarah Brabson,
NOAA PRA Clearance Officer.
[FR Doc. 2018–14889 Filed 7–11–18; 8:45 am]
BILLING CODE 3510–NK–P
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
Submission for OMB Review;
Comment Request
The Department of Commerce will
submit to the Office of Management and
Budget (OMB) for clearance the
following proposal for collection of
information under the provisions of the
Paperwork Reduction Act (44 U.S.C.
chapter 35).
Agency: National Oceanic and
Atmospheric Administration (NOAA).
Title: NOAA Marine Debris Program
Performance Progress Report and Data
Collection Form.
OMB Control Number: 0648–0718.
Form Number(s): None.
Type of Request: Regular (revision
and extension of a currently approved
information collection).
Number of Respondents: 70.
Average Hours per Response: 2.
Burden Hours: 1,400.
Needs and Uses: This request is for
revision and extension of an existing
information collection.
The NOAA Marine Debris Program
(MDP) supports national and
international efforts to research,
prevent, and reduce the impacts of
marine debris. The MDP is a centralized
office within NOAA that coordinates
and supports activities, both within the
bureau and with other federal agencies,
which address marine debris and its
impacts. In addition to inter-agency
coordination, the MDP uses
partnerships with state and local
agencies, tribes, non-governmental
organizations, academia, and industry to
investigate and solve the problems that
stem from marine debris through
research, prevention, and reduction
activities, in order to protect and
conserve our nation’s marine
environment and ensure navigation
safety.
The Marine Debris Research,
Prevention, and Reduction Act (33
E:\FR\FM\12JYN1.SGM
12JYN1
amozie on DSK3GDR082PROD with NOTICES1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
U.S.C. 1951 et seq.) as amended by the
Marine Debris Act Amendments of 2012
(Pub. L. 112–213, Title VI, Sec. 603, 126
Stat. 1576, December 20, 2012) outlines
three central program components for
the MDP to undertake: (1) Mapping,
identification, impact assessment,
removal, and prevention; (2) reducing
and preventing fishing gear loss; and (3)
outreach to stakeholders and the general
public. To address these components,
the Marine Debris Act authorized the
MDP to establish several competitive
grant programs on marine debris
research, prevention and removal that
provide federal funding to non-federal
applicants throughout the coastal
United States and territories.
The terms and conditions of the
financial assistance awarded through
these grant programs require regular
progress reporting and communication
of project accomplishments to MDP.
Progress reports contain information
related to, among other things, the
overall short and long-term goals of the
project, project methods and monitoring
techniques, actual accomplishments
(such as pounds of debris removed from
an ecosystem, numbers of volunteers
participating in a cleanup project, etc.),
status of approved activities, challenges
or potential roadblocks to future
progress, and lessons learned. This
information collection enables MDP to
monitor and evaluate the activities
supported by federal funds to ensure
accountability to the public and to
ensure that funds are used consistent
with the purpose for which they were
appropriated. It also ensures that
reported information is standardized in
such a way that allows for it to be
meaningfully synthesized across a
diverse set of projects and project types.
MDP uses the information collected in
a variety of ways to communicate with
federal and non-federal partners and
stakeholders on individual project and
general program accomplishments.
Revision: A section has been added to
the report form, but there is no change
to burden.
Affected Public: Not-for-profit
institutions; business or other for-profit
organizations; state, local or tribal
government.
Frequency: Semiannual.
Respondent’s Obligation: Required to
obtain or retain benefits.
This information collection request
may be viewed at reginfo.gov. Follow
the instructions to view Department of
Commerce collections currently under
review by OMB.
Written comments and
recommendations for the proposed
information collection should be sent
within 30 days of publication of this
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
notice to OIRA_Submission@
omb.eop.gov or fax to (202) 395–5806.
Dated: July 8, 2018.
Sarah Brabson,
NOAA PRA Clearance Officer.
[FR Doc. 2018–14888 Filed 7–11–18; 8:45 am]
BILLING CODE 3510–JE–P
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
Submission for OMB Review;
Comment Request
The Department of Commerce will
submit to the Office of Management and
Budget (OMB) for clearance the
following proposal for collection of
information under the provisions of the
Paperwork Reduction Act (44 U.S.C.
chapter 35).
Agency: National Oceanic and
Atmospheric Administration (NOAA).
Title: Highly Migratory Species
Dealer, Importer, and Exporter
Reporting Family of Forms.
OMB Control Number: 0648–0040.
Form Number(s): None.
Type of Request: Regular (revision
and extension of a currently approved
information collection).
Number of Respondents: 10,391.
Average Hours per Response: 15
minutes for catch document/statistical
document/re-export certificate
validation by government official; 120
minutes for authorization of nongovernmental catch document/statistical
document/re-export certificate
validation; 2 minutes for daily Atlantic
bluefin tuna landing reports; 3 minutes
for daily Atlantic bluefin tuna landing
reports from pelagic longline and purse
seine vessels; 1 minute for Atlantic
bluefin tuna tagging; 15 minutes for
biweekly Atlantic bluefin tuna dealer
landing reports; 15 minutes for HMS
international trade biweekly reports; 15
minutes for weekly electronic HMS
dealer landing reports (e-dealer); 5
minutes for negative weekly electronic
HMS dealer landing reports (e-dealer);
15 minutes for voluntary fishing vessel
and catch forms; 2 minutes for provision
of HMS dealer email address.
Burden Hours: 18,552.
Needs and Uses: This request is for
revision and extension of a currently
approved information collection.
Under the provisions of the
Magnuson-Stevens Fishery
Conservation and Management Act (16
U.S.C. 1801 et seq.), the National Marine
Fisheries Service (NMFS) is responsible
for management of the Nation’s marine
fisheries. NMFS must also promulgate
PO 00000
Frm 00026
Fmt 4703
Sfmt 4703
32285
regulations, as necessary and
appropriate, to carry out obligations the
United States (U.S.) undertakes
internationally regarding tuna
management through the Atlantic Tunas
Convention Act (ATCA, 16 U.S.C. 971 et
seq.).
This collection serves as a family of
forms for Atlantic highly migratory
species (HMS) dealer reporting,
including purchases of HMS from
domestic fishermen, and the import,
export, and/or re-export of HMS,
including federally managed tunas,
sharks, and swordfish.
Transactions covered under this
collection include purchases of Atlantic
HMS from domestic fishermen; and the
import/export of all bluefin tuna, frozen
bigeye tuna, southern bluefin tuna or
swordfish under the HMS International
Trade Program, regardless of geographic
area of origin. This information is used
to monitor the harvest of domestic
fisheries, and/or track international
trade of internationally managed
species.
The domestic dealer reporting
covered by this collection includes
weekly electronic landing reports and
negative reports (i.e., reports of no
activity) of Atlantic swordfish, sharks,
bigeye tuna, albacore, yellowfin, and
skipjack tunas (collectively referred to
as BAYS tunas), and biweekly and
electronic daily landing reports for
bluefin tuna, including tagging of
individual fish. Because of the recent
development of an individual bluefin
quota (IBQ) management system (RIN
0648–BC09), electronic entry of IBQrelated landing data is required for
Atlantic bluefin tuna purchased from
Longline and Purse seine category
vessels. NMFS intends to consider
integrating the electronic dealer
reporting for bluefin tuna and electronic
reporting for the IBQ system; however,
at this time, dealers must submit limited
bluefin tuna landings data to both
NMFS systems for purse seine and
pelagic longline vessels.
International trade tracking programs
are required by both the International
Commission for the Conservation of
Atlantic Tunas (ICCAT) and the InterAmerican Tropical Tuna Commission
(IATTC) to account for all international
trade of covered species. The U.S. is a
member of ICCAT and IATTC and
required by ATCA and the Tunas
Convention Act (16 U.S.C. 951 et. seq.,
consecutively) to promulgate
regulations as necessary and appropriate
to implement ICCAT and IATTC
recommendations. These programs
require that a statistical document or
catch document accompany each export
from and import to a member nation,
E:\FR\FM\12JYN1.SGM
12JYN1
amozie on DSK3GDR082PROD with NOTICES1
32286
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
and that a re-export certificate
accompany each re-export. The
international trade reporting
requirements covered by this collection
include implementation of catch
document, statistical document, and reexport certificate trade tracking
programs for bluefin tuna, frozen bigeye
tuna, and swordfish. An electronic catch
document program for bluefin tuna
(EBCD) was recommended by ICCAT
and implemented by the United States
in 2016 (0648–BF17). U.S. regulations
implementing ICCAT statistical
document and catch document
programs require statistical documents
and catch documents for international
transactions of the covered species from
all ocean areas, so Pacific imports and
exports must also be accompanied by
statistical documents and catch
documents. Since there are statistical
document programs in place under
other international conventions (e.g., the
Indian Ocean Tuna Commission), a
statistical document or catch document
from another program may be used to
satisfy the statistical document
requirement for imports into the United
States. Revision: These statistical and
catch documents are now covered under
OMB Control No. 0648–0732, but their
validation is still part of this
information collection.
Dealers who internationally trade
Southern bluefin tuna are required to
participate in a trade tracking program
to ensure that imported Atlantic and
Pacific bluefin tuna will not be
intentionally mislabeled as ‘‘southern
bluefin’’ to circumvent reporting
requirements. This action is authorized
under ATCA, which provides for the
promulgation of regulations as may be
necessary and appropriate to carry out
ICCAT recommendations.
In addition to statistical document,
catch document, and re-export
certificate requirements, this collection
includes biweekly reports to
complement trade tracking statistical
documents by summarizing statistical
document data and collecting additional
economic information.
Affected Public: Business or other forprofit organizations.
Frequency: Weekly and biweekly.
Respondent’s Obligation: Mandatory.
This information collection request
may be viewed at reginfo.gov. Follow
the instructions to view Department of
Commerce collections currently under
review by OMB.
Written comments and
recommendations for the proposed
information collection should be sent
within 30 days of publication of this
notice to OIRA_Submission@
omb.eop.gov or fax to (202) 395–5806.
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
Dated: July 8, 2018.
Sarah Brabson,
NOAA PRA Clearance Officer.
personal identifiers or contact
information.
BILLING CODE 3510–22–P
DEPARTMENT OF DEFENSE
Office of the Secretary
[Docket ID: DOD–2018–OS–0043]
Proposed Collection; Comment
Request
Office of the Under Secretary of
Defense for Personnel and Readiness,
DoD.
ACTION: Information collection notice.
AGENCY:
In compliance with the
Paperwork Reduction Act of 1995, the
Office of the Deputy Assistant Secretary
of Defense for Military Personnel Policy
announces a proposed public
information collection and seeks public
comment on the provisions thereof.
Comments are invited on: Whether the
proposed collection of information is
necessary for the proper performance of
the functions of the agency, including
whether the information shall have
practical utility; the accuracy of the
agency’s estimate of the burden of the
proposed information collection; ways
to enhance the quality, utility, and
clarity of the information to be
collected; and ways to minimize the
burden of the information collection on
respondents, including through the use
of automated collection techniques or
other forms of information technology.
DATES: Consideration will be given to all
comments received by September 10,
2018.
SUMMARY:
You may submit comments,
identified by docket number and title,
by any of the following methods:
Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
Mail: Department of Defense, Office of
the Chief Management Officer,
Directorate for Oversight and
Compliance, 4800 Mark Center Drive,
Mailbox #24, Suite 08D09, Alexandria,
VA 22350–1700.
Instructions: All submissions received
must include the agency name, docket
number and title for this Federal
Register document. The general policy
for comments and other submissions
from members of the public is to make
these submissions available for public
viewing on the internet at http://
www.regulations.gov as they are
received without change, including any
ADDRESSES:
PO 00000
Frm 00027
Fmt 4703
Sfmt 4703
To
request more information on this
proposed information collection or to
obtain a copy of the proposal and
associated collection instruments,
please write to the Office of the Deputy
Assistant Secretary of Defense for
Military Personnel Policy, ATTN:
Accession Policy (3D1066), 1500
Defense Pentagon, Washington, DC
20301–1500, or call 703–695–5525.
SUPPLEMENTARY INFORMATION:
Title; Associated Form; and OMB
Number: Police Records Check; DD
Form 369; OMB Control Number 0704–
0007.
Needs and Uses: The information
collection requirement is necessary, per
Sections 504, 505 Title 10 U.S.C, to
identify persons who may be
undesirable for military service.
Applicants for enlistment must be
screened to identify any discreditable
involvement with police or other law
enforcement agencies. The DD Form
369, ‘‘Police Records Check,’’ is
forwarded to law enforcement agencies
to identify if an applicant has a criminal
record.
Affected Public: State, Local or Tribal
Government.
Annual Burden Hours: 78,750.
Number of Respondents: 175,000.
Responses per Respondent: 1.
Annual Responses: 175,000.
Average Burden per Response: 27
minutes.
Frequency: On occasion.
FOR FURTHER INFORMATION CONTACT:
[FR Doc. 2018–14887 Filed 7–11–18; 8:45 am]
Dated: July 9, 2018.
Shelly E. Finke,
Alternate OSD Federal Register, Liaison
Officer, Department of Defense.
[FR Doc. 2018–14933 Filed 7–11–18; 8:45 am]
BILLING CODE 5001–06–P
DEPARTMENT OF DEFENSE
Office of the Secretary
[Docket ID: DOD–2018–OS–0041]
Notice of Availability of an
Environmental Assessment
Addressing Hazardous Materials
Warehouses and Gas Cylinder Sheds
at Naval Station Norfolk and Naval
Support Activity Norfolk Naval
Shipyard, Virginia
Defense Logistics Agency
(DLA), Department of Defense.
ACTION: Notice of availability (NOA).
AGENCY:
DLA announces the
availability of an Environmental
Assessment (EA) documenting the
SUMMARY:
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
potential environmental effects
associated with the proposed action to
construct and operate hazardous
materials warehouses and gas cylinder
sheds at Naval Station Norfolk and
Naval Support Activity Norfolk Naval
Shipyard, Virginia. The EA has been
prepared as required under the National
Environmental Policy Act (NEPA) and
DLA Regulation, Environmental
Considerations in Defense Logistics
Agency Actions.
DATES: The public comment period will
end on August 13, 2018.
ADDRESSES: You may submit comments,
identified by DOD–2018–OS–0041, to
one of the following:
Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
Mail: Department of Defense, Office of
the Deputy Chief Management Officer,
Directorate for Oversight and
Compliance, Regulatory and Advisory
Committee Division, 4800 Mark Center
Drive, Mailbox #24, Suite 08D09,
Alexandria, VA 22350–1700.
FOR FURTHER INFORMATION CONTACT: Ira
Silverberg at 571–767–0705 during
normal business hours Monday through
Friday, from 8:00 a.m. to 4:30 p.m.
(EDT) or by email: ira.silverberg@
dla.mil.
Dated: July 9, 2018.
Shelly E. Finke,
Alternate OSD Federal Register, Liaison
Officer, Department of Defense.
You may submit comments,
identified by DOD–2018–OS–0042, to
one of the following:
Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
Mail: Department of Defense, Office of
the Deputy Chief Management Officer,
Directorate for Oversight and
Compliance, Regulatory and Advisory
Committee Division, 4800 Mark Center
Drive, Mailbox #24, Suite 08D09,
Alexandria, VA 22350–1700.
FOR FURTHER INFORMATION CONTACT: Ira
Silverberg at 571–767–0705 during
normal business hours Monday through
Friday, from 8:00 a.m. to 4:30 p.m.
(EDT) or by email: ira.silverberg@
dla.mil.
ADDRESSES:
The EA
has been prepared as required under the
National Environmental Policy Act
(NEPA) and DLA Regulation 1000.22,
Environmental Considerations in
Defense Logistics Agency Actions.
The EA posted to the docket provides
additional information about the
proposed action.
The EA is available in hardcopy at the
Tracy Branch Library, 20 East Eaton
Avenue, Tracy, CA 95376.
SUPPLEMENTARY INFORMATION:
Dated: July 9, 2018.
Shelly E. Finke,
Alternate OSD Federal Register, Liaison
Officer, Department of Defense.
[FR Doc. 2018–14927 Filed 7–11–18; 8:45 am]
BILLING CODE 5001–06–P
[FR Doc. 2018–14926 Filed 7–11–18; 8:45 am]
BILLING CODE 5001–06–P
FEDERAL COMMUNICATIONS
COMMISSION
DEPARTMENT OF DEFENSE
[OMB 3060–1048]
Office of the Secretary
[Docket ID: DOD–2018–OS–0042]
Notice of Availability for an
Environmental Assessment
Addressing Upgrade of the Main Gate
Access Control Point at Defense
Distribution Depot, San Joaquin,
California, and Surrounding Area
Defense Logistics Agency
(DLA), Department of Defense.
ACTION: Notice of availability (NOA).
AGENCY:
amozie on DSK3GDR082PROD with NOTICES1
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
Federal Communications
Commission.
ACTION: Notice and request for
comments.
AGENCY:
As part of its continuing effort
to reduce paperwork burdens, and as
required by the Paperwork Reduction
Act of 1995 (PRA), the Federal
Communications Commission (FCC or
Commission) invites the general public
and other Federal agencies to take this
opportunity to comment on the
following information collections.
Comments are requested concerning:
whether the proposed collection of
information is necessary for the proper
performance of the functions of the
Commission, including whether the
SUMMARY:
DLA announces the
availability of an Environmental
Assessment (EA) documenting the
potential environmental effects
associated with the proposed action to
upgrade the main gate access control
point at Defense Distribution Depot, San
Joaquin, California, and surrounding
area.
DATES: The public comment period will
end on August 13, 2018.
SUMMARY:
Information Collection Being Reviewed
by the Federal Communications
Commission Under Delegated
Authority
PO 00000
Frm 00028
Fmt 4703
Sfmt 4703
32287
information shall have practical utility;
the accuracy of the Commission’s
burden estimate; ways to enhance the
quality, utility, and clarity of the
information collected; ways to minimize
the burden of the collection of
information on the respondents,
including the use of automated
collection techniques or other forms of
information technology; and ways to
further reduce the information
collection burden on small business
concerns with fewer than 25 employees.
The FCC may not conduct or sponsor
a collection of information unless it
displays a currently valid Office of
Management and Budget (OMB) control
number. No person shall be subject to
any penalty for failing to comply with
a collection of information subject to the
PRA that does not display a valid OMB
control number.
DATES: Written PRA comments should
be submitted on or before September 10,
2018. If you anticipate that you will be
submitting comments, but find it
difficult to do so within the period of
time allowed by this notice, you should
advise the contact listed below as soon
as possible.
ADDRESSES: Direct all PRA comments to
Cathy Williams, FCC, via email to PRA@
fcc.gov and to [email protected].
FOR FURTHER INFORMATION CONTACT: For
additional information about the
information collection, contact Cathy
Williams at (202) 418–2918.
SUPPLEMENTARY INFORMATION:
OMB Control Number: 3060–1048.
Title: Section 1.929(c)(1), Composite
Interference Contour (CIC).
Form Number: N/A.
Type of Review: Extension of a
currently approved collection.
Respondents: Business or other forprofit entities, not-for-profit institutions
and state, local or tribal government.
Number of Respondents and
Responses: 50 respondents; 50
responses.
Estimated Time per Response: 2
hours.
Frequency of Response: On occasion
reporting requirement.
Obligation to Respond: Required to
obtain or retain benefits. Statutory
authority for this information collection
is contained in 47 U.S.C. 309(j).
Total Annual Burden: 100 hours.
Total Annual Cost: No cost.
Privacy Impact Assessment: No
impact(s).
Nature and Extent of Confidentiality:
There is no need for confidentiality with
this collection of information.
Needs and Uses: The Commission
will submit this expiring information
collection to the Office of Management
E:\FR\FM\12JYN1.SGM
12JYN1
32288
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
and Budget (OMB) for approval of an
extension request.
Under 47 CFR 1.929(c)(1) of the
Commission’s rules, any increase in the
composite interference contour (CIC) of
a site-based licensee in the Paging and
Radiotelephone Service, Rural
Radiotelephone Service, or 800 MHz
Specialized Mobile Radio Service is a
major modification of a license that
requires prior Commission approval.
However, in February 2005, the
Commission adopted and released final
rules which amended section 1.929(c)(1)
to specify that expansion of a composite
interference contour (CIC) of a sitebased licensee in the Paging and
Radiotelephone Service—as well as the
Rural Radiotelephone Service and 800
MHz Specialized Mobile Radio
Service—over water on a secondary,
non-interference basis should be
classified as a minor (rather than major)
modification of a license. Such
reclassification has eliminated the filing
requirements associated with these
license modifications, but requires sitebased licensees to provide the
geographic area licensee (on the same
frequency) with the technical and
engineering information necessary to
evaluate the site-based licensee’s
operations over water.
Federal Communications Commission.
Marlene Dortch,
Secretary, Office of the Secretary.
[FR Doc. 2018–14860 Filed 7–11–18; 8:45 am]
BILLING CODE 6712–01–P
FEDERAL COMMUNICATIONS
COMMISSION
[OMB 3060–0009, OMB 3060–0594, OMB
3060–0601 and OMB 3060–0609]
Information Collections Being
Reviewed by the Federal
Communications Commission Under
Delegated Authority
Federal Communications
Commission.
ACTION: Notice and request for
comments.
AGENCY:
As part of its continuing effort
to reduce paperwork burdens, and as
required by the Paperwork Reduction
Act of 1995 (PRA), the Federal
Communications Commission (FCC or
Commission) invites the general public
and other Federal agencies to take this
opportunity to comment on the
following information collections.
Comments are requested concerning:
whether the proposed collection of
information is necessary for the proper
performance of the functions of the
amozie on DSK3GDR082PROD with NOTICES1
SUMMARY:
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
Commission, including whether the
information shall have practical utility;
the accuracy of the Commission’s
burden estimate; ways to enhance the
quality, utility, and clarity of the
information collected; ways to minimize
the burden of the collection of
information on the respondents,
including the use of automated
collection techniques or other forms of
information technology; and ways to
further reduce the information
collection burden on small business
concerns with fewer than 25 employees.
The FCC may not conduct or sponsor
a collection of information unless it
displays a currently valid Office of
Management and Budget (OMB) control
number. No person shall be subject to
any penalty for failing to comply with
a collection of information subject to the
PRA that does not display a valid OMB
control number.
DATES: Written PRA comments should
be submitted on or before August 13,
2018. If you anticipate that you will be
submitting comments, but find it
difficult to do so within the period of
time allowed by this notice, you should
advise the contact listed below as soon
as possible.
ADDRESSES: Direct all PRA comments to
Cathy Williams, FCC, via email to PRA@
fcc.gov and to [email protected].
FOR FURTHER INFORMATION CONTACT: For
additional information about the
information collection, contact Cathy
Williams at (202) 418–2918.
SUPPLEMENTARY INFORMATION:
OMB Control Number: 3060–0009.
Title: Application for Consent to
Assignment of Broadcast Station
Construction Permit or License or
Transfer of Control of Corporation
Holding Broadcast Station Construction
Permit or License, FCC Form 316.
Form Number: FCC Form 316.
Type of Review: Extension of a
currently approved collection.
Respondents: Business or other forprofit entities; Not-for-profit
institutions; State, local or tribal
government.
Number of Respondents and
Responses: 750 respondents, 750
responses.
Estimated Time per Response: 1.5–4.5
hours.
Frequency of Response: On occasion
reporting requirement.
Obligation To Respond: Required to
obtain benefits. Statutory authority for
this collection of information is
contained in Sections 154(i) and 310(d)
of the Communications Act of 1934, as
amended.
Total Annual Burden: 1,231 hours.
Total Annual Cost: $711,150.
PO 00000
Frm 00029
Fmt 4703
Sfmt 4703
Privacy Impact Assessment: No
impact(s).
Nature and Extent of Confidentiality:
Confidentiality is not required with this
collection of information.
Needs and Uses: FCC Form 316 is
required when applying for authority for
assignment of a broadcast station
construction permit or license, or for
consent to transfer control of a
corporation holding a broadcast station
construction permit or license where
there is little change in the relative
interest or disposition of its interests;
where transfer of interest is not a
controlling one; there is no substantial
change in the beneficial ownership of
the corporation; where the assignment is
less than a controlling interest in a
partnership; where there is an
appointment of an entity qualified to
succeed to the interest of a deceased or
legally incapacitated individual
permittee, licensee or controlling
stockholder; and, in the case of LPFM
stations, where there is a voluntary
transfer of a controlling interest in the
licensee or permittee entity. In addition,
the applicant must notify the
Commission when an approved transfer
of control of a broadcast station
construction permit or license has been
consummated.
OMB Control Number: 3060–0594.
Title: Cost of Service Filing for
Regulated Cable Services, FCC Form
1220.
Form Number: FCC Form 1220.
Type of Review: Extension of a
currently approved collection.
Respondents: Business or other forprofit entities; State, Local, or Tribal
Government.
Number of Respondents and
Responses: 20 respondents; 10
responses.
Estimated Hours per Response: 4–80
hours.
Frequency of Response: On occasion
and annual reporting requirements;
Third party disclosure requirement.
Total Annual Burden: 1,220 hours.
Total Annual Cost: $100,000.
Obligation to Respond: Required to
obtain or retain benefits. The statutory
authority for this collection is contained
is Sections 154(i) and 623 of the
Communications Act of 1934, as
amended.
Nature and Extent Confidentiality:
There is no need for confidentiality with
this collection of information.
Privacy Impact Assessment: No
impact(s).
Needs and Uses: The Cable Television
Consumer Protection and Competition
Act of 1992 required the Commission to
prescribe rules and regulations for
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
amozie on DSK3GDR082PROD with NOTICES1
determining reasonable rates for basic
tier cable service and to establish
criteria for identifying unreasonable
rates for cable programming services
and associated equipment.
OMB Control Number: 3060–0601.
Title: Setting Maximum Initiated
Permitted Rates for Regulated Cable
Services, FCC Form 1200.
Form Number: FCC Form 1200.
Type of Review: Extension of a
currently approved collection.
Respondents: Business or other forprofit entities; State, Local, or Tribal
Government.
Number of Respondents and
Responses: 100 respondents; 50
responses.
Estimated Hours per Response: 2–10
hours.
Frequency of Response: One time and
annual reporting requirements; Third
party disclosure requirement.
Total Annual Burden: 800 hours.
Total Annual Cost: $62,500.
Obligation to Respond: Required to
obtain or retain benefits. The statutory
authority for this collection is contained
in Section 623 of the Communications
Act of 1934, as amended.
Nature and Extent of Confidentiality:
There is no need for confidentiality with
this collection of information.
Privacy Impact Assessment: No
impact(s).
Needs and Uses: Cable operators and
local franchise authorities file FCC Form
1200 to justify the reasonableness of
rates in effect on or after May 15, 1994.
The FCC uses the data to evaluate cable
rates the first time they are reviewed on
or after May 15, 1994, so that maximum
permitted rates for regulated cable
service can be determined.
OMB Control Number: 3060–0609.
Title: Section 76.934(e), Petitions for
Extension of Time.
Form Number: Not applicable.
Type of Review: Extension of a
currently approved collection.
Respondents: Business or other forprofit entities; and State, local, or tribal
governments.
Number of Respondents and
Responses: 20 respondents; 10
responses.
Frequency of Response: On occasion
reporting requirement; Third party
disclosure requirement.
Estimated Time per Response: 4
hours.
Total Annual Burden: 80 hours.
Total Annual Cost: None.
Privacy Impact Assessment: No
impact(s).
Obligation to Respond: Required to
obtain or retain benefits. The statutory
authority is contained in Sections 4(i)
and 623 of the Communications Act of
1934, as amended.
Nature and Extent of Confidentiality:
There is no need for confidentiality with
this collection of information.
32289
Needs and Uses: The information
collection requirements contained
under 47 CFR 76.934(e) states that small
cable systems may obtain an extension
of time to establish compliance with
rate regulations provided that they can
demonstrate that timely compliance
would result in severe economic
hardship. Requests for the extension of
time should be addressed to the local
franchising authorities (‘‘LFAs’’)
concerning rates for basic service tiers.
Federal Communications Commission.
Marlene Dortch,
Secretary, Office of the Secretary.
[FR Doc. 2018–14858 Filed 7–11–18; 8:45 am]
BILLING CODE 6712–01–P
FEDERAL COMMUNICATIONS
COMMISSION
Open Commission Meeting, Thursday,
July 12, 2018
July 5, 2018.
The Federal Communications
Commission will hold an Open Meeting
on the subjects listed below on
Thursday, July 12, 2018 which is
scheduled to commence at 10:30a.m. in
Room TW–C305, at 445 12th Street SW,
Washington, DC.
Item No.
Bureau
Subject
1 ......................
WIRELESS TELE-COMMUNICATIONS,
INTERNATIONAL AND OFFICE OF
ENGINEERING & TECHNOLOGY.
2 ......................
WIRELESS TELE-COMMUNICATIONS ..
Title: Expanding Flexible Use of the 3.7 to 4.2 GHz Band (GN Docket No. 18–
122); Expanding Flexible Use in Mid-Band Spectrum Between 3.7 and 24 GHz
(GN Docket No. 17–183); Petition for Rulemaking to Amend and Modernize
Parts 25 and 101 of the Commission’s Rules to Authorize and Facilitate the Deployment of Licensed Point-to-Multipoint Fixed Wireless Broadband Service in
the 3.7–4.2 GHz Band (RM–11791); Fixed Wireless Communications Coalition,
Inc., Request for Modified Coordination Procedures in Band Shared Between the
Fixed Service and the Fixed Satellite Service (RM–11778)
Summary: The Commission will consider an Order and Notice of Proposed Rulemaking that would continue the Commission’s efforts to make mid-band spectrum in the 3.7–4.2 GHz band available for expanded flexible use, primarily by
seeking comment on mechanisms for clearing for mobile use and whether to
allow point-to-multipoint use on a shared basis in portions of the band. To inform
the Commission’s decision-making on the future of the band, it would also collect information about FSS earth stations and space stations to provide a clear
understanding of the operations of current users.
Title: Amendment of Parts 1 and 22 of the Commission’s Rules with Regard to the
Cellular Service, Including Changes in Licensing of Unserved Area (WT Docket
No. 12–40); Amendment of the Commission’s Rules with Regard to Relocation
of Part 24 to Part 27; Interim Restrictions and Procedures for Cellular Service
Applications (RM–11510); Amendment of Parts 0, 1, and 22 of the Commission’s Rules with Regard to Frequency Coordination for the Cellular Service;
Amendment of Part 22 of the Commission’s Rules Regarding Certain Administrative and Filing Requirements; Amendment of the Commission’s Rules Governing Radiated Power Limits for the Cellular Service (RM–11660); Amendment
of Parts 1, 22, 24, 27, 74, 80, 90, 95, and 101 to Establish Uniform License Renewal, Discontinuance of Operation, and Geographic Partitioning and Spectrum
Disaggregation Rules and Policies for Certain Wireless Radio Services (WT
Docket No. 10–112); 2016 Biennial Review of Telecommunications Regulations
(WT Docket No. 16–138)
Summary:The Commission will consider a Report and Order eliminating unnecessary rules that apply to cellular service and other licensees.
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00030
Fmt 4703
Sfmt 4703
E:\FR\FM\12JYN1.SGM
12JYN1
32290
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
Item No.
Bureau
Subject
3 ......................
MEDIA ......................................................
4 ......................
PUBLIC SAFETY & HOMELAND SECURITY.
5 ......................
WIRELINE COMPETITION ......................
6 ......................
ENFORCEMENT ......................................
Title: Children’s Television Programming Rules (MB Docket No. 18–202); Modernization of Media Regulation Initiative (MB Docket No. 17–105)
Summary: The Commission will consider a Notice of Proposed Rulemaking seeking comment on proposed revisions to the children’s television programming
rules to provide broadcasters greater flexibility in meeting their children’s programming obligations.
Title: Amendment of Part 11 of the Commission’s Rules Regarding the Emergency
Alert System (PS Docket No. 15–94); Wireless Emergency Alerts (PS Docket
No. 15–91)
Summary: The Commission will consider a Report and Order and Further Notice of
Proposed Rulemaking to improve emergency alerting, including facilitating more
effective EAS tests and preventing false alerts.
Title: Nationwide Number Portability (WC Docket No. 17–244); Numbering Policies
for Modern Communications (WC Docket No. 13–97)
Summary: The Commission will consider a Report and Order that forbears from
legacy requirements and amends rules to facilitate the move toward complete
nationwide number portability to promote competition between all service providers and increase network routing efficiencies.
Title: Amendment of Procedural Rules Governing Formal Complaint Proceedings
Delegated to the Enforcement Bureau (EB Docket No. 17–245)
Summary: The Commission will consider a Report and Order that consolidates and
streamlines the rules governing formal complaint proceedings delegated to the
Enforcement Bureau.
*
*
*
*
*
The meeting site is fully accessible to
people using wheelchairs or other
mobility aids. Sign language
interpreters, open captioning, and
assistive listening devices will be
provided on site. Other reasonable
accommodations for people with
disabilities are available upon request.
In your request, include a description of
the accommodation you will need and
a way we can contact you if we need
more information. Last minute requests
will be accepted, but may be impossible
to fill. Send an email to: [email protected]
or call the Consumer & Governmental
Affairs Bureau at 202–418–0530 (voice),
202–418–0432 (TTY).
Additional information concerning
this meeting may be obtained from the
Office of Media Relations, (202) 418–
0500; TTY 1–888–835–5322. Audio/
Video coverage of the meeting will be
broadcast live with open captioning
over the internet from the FCC Live web
page at www.fcc.gov/live.
For a fee this meeting can be viewed
live over George Mason University’s
Capitol Connection. The Capitol
Connection also will carry the meeting
live via the internet. To purchase these
services, call (703) 993–3100 or go to
www.capitolconnection.gmu.edu.
amozie on DSK3GDR082PROD with NOTICES1
Federal Communications Commission.
Marlene Dortch,
Secretary.
[FR Doc. 2018–14861 Filed 7–11–18; 8:45 am]
BILLING CODE 6712–01–P
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
FEDERAL DEPOSIT INSURANCE
CORPORATION
Agency Information Collection
Activities: Submission for OMB
Review; Comment Request (OMB No.
3064–0109; 0124; and 0162)
Federal Deposit Insurance
Corporation (FDIC).
AGENCY:
ACTION:
Notice and request for comment.
The FDIC, as part of its
continuing effort to reduce paperwork
and respondent burden, invites the
general public and other Federal
agencies to take this opportunity to
comment on the renewal of existing
information collections, as required by
the Paperwork Reduction Act of 1995.
The FDIC published notices of its intent
to renew the information collections
described below in the Federal Register
and requested comment for 60 days. No
comments were received. The FDIC
hereby gives notice of its plan to submit
to OMB a request to approve the
renewal of these collections, and again
invites comment on the renewal.
SUMMARY:
Comments must be submitted on
or before August 13, 2018.
DATES:
Interested parties are
invited to submit written comments to
the FDIC by any of the following
methods:
• https://www.FDIC.gov/regulations/
laws/federal.
ADDRESSES:
PO 00000
Frm 00031
Fmt 4703
Sfmt 4703
• Email: [email protected]. Include
the name and number of the collection
in the subject line of the message.
• Mail: Manny Cabeza, Counsel,
Room MB–3007, Federal Deposit
Insurance Corporation, 550 17th Street
NW, Washington, DC 20429.
• Hand Delivery: Comments may be
hand-delivered to the guard station at
the rear of the 17th Street Building
(located on F Street), on business days
between 7:00 a.m. and 5:00 p.m.
All comments should refer to the
relevant OMB control number. A copy
of the comments may also be submitted
to the OMB desk officer for the FDIC:
Office of Information and Regulatory
Affairs, Office of Management and
Budget, New Executive Office Building,
Washington, DC 20503.
FOR FURTHER INFORMATION CONTACT:
Manny Cabeza, Counsel, 202–898–3767,
[email protected], MB–3007, Federal
Deposit Insurance Corporation, 550 17th
Street NW, Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
Proposal to renew the following
currently approved collections of
information:
1. Title: Notice of Branch Closure.
OMB Number: 3064–0109.
Form Number: None.
Affected Public: Insured depository
institutions.
Burden Estimate:
E:\FR\FM\12JYN1.SGM
12JYN1
32291
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
SUMMARY OF ANNUAL BURDEN
Estimated
time per
response
(hours)
Estimated
number of
respondents
Type of burden
Adoption of Closure Policy ...............................................
Notice of Closure ..............................................................
Recordkeeping .....
Disclosure .............
Mandatory ............
Mandatory ............
23
683
8
2
One time ...............
On occasion .........
184
1,366
Total Estimated Annual Burden ................................
...............................
...............................
....................
....................
...............................
1,550
General Description of Collection:
Section 42 of the Federal Deposit
Insurance Act mandates that an insured
depository institution closing a branch
notify its primary federal regulator not
later than 90 days prior to the closing.
The statute also provides that a notice
be posted on the premises of the branch
for the 30-day period immediately prior
to the closing and that the customers be
notified in a mailing at least 90 days
prior to the closing. Each insured
depository institution that has one or
more branches is required to adopt a
written policy for branch closings.
Burden Estimate Methodology and
Assumptions:
There are no changes in the
methodology or substance of this
information collection. FDIC believes
that the existing estimate of the time
required to develop a written branch
closure policy and to provide the
required branch closure notices is
accurate. The number of branch closure
notifications is closely related to the
number of branches closed, while the
number of closure policy adoptions
equals the number newly chartered
branch banking institutions and the
number of existing banking institutions
that transition from having no branches
to having at least one branch. To derive
an estimate of average annual branch
closure notifications, FDIC Risk
Management Supervision (RMS) staff
counted the number of full-service
standalone and in-store branches that
closed between 2015 and 2017. In
addition, FDIC staff count the number of
newly chartered branch banking
institutions and the number of
institutions that transitioned from
having no branches to having at least
one branch. To derive an estimate of
average annual branch closure
Frequency
of response
Average
total
annual
estimated
burden
(hours)
Obligation
to respond
notifications, FDIC Risk Management
Supervision (RMS) staff counted the
number of full-service standalone and
in-store branches that closed between
2015 and 2017. In addition, FDIC staff
counted the number of newly chartered
branch banking institutions and the
number of institutions that transitioned
from having no branches to having at
least one branch. FDIC records reflect
that there were 683 branch closures, on
average, each year between 2015 and
2017. FDIC estimates that an average of
23 institutions each year will transition
from having no branches to having at
least one branch.
2. Title: Notification of Change of
Insured Status.
OMB Number: 3064–0124.
Form Number: None.
Affected Public: Insured depository
institutions.
Burden Estimate:
amozie on DSK3GDR082PROD with NOTICES1
SUMMARY OF ANNUAL BURDEN
Estimated
time per
response
(hours)
Estimated
number of
respondents
Type of burden
Certification .......................................................................
Notification ........................................................................
Reporting ..............
Disclosure .............
Mandatory ............
Mandatory ............
150
2
.25
1
On Occasion ........
On Occasion ........
37.5
2
Total Estimated Annual Burden ................................
...............................
...............................
....................
....................
...............................
39.5
General Description of Collection:
This information collection consists
of two parts: (1) A certification that
insured depository institutions provide
the FDIC when all deposit liabilities
from one insured depository institution
are assumed from another insured
depository institution, with the latter
institution responsible for providing the
certification, and (2) a notification that
an insured depository institution
provides to its depositors when it seeks
to voluntarily terminate its insured
status. The certification is necessary to
implement the provisions of section 8(q)
of the Federal Deposit Insurance Act, 12
U.S.C. 1818(q), regarding termination of
the insured status of the transferring
institution and termination of the
separate deposit insurance coverage
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
provided on deposit accounts assumed
by the assuming institution. The
depositor notification is required by
section 8(a) (6) of the Federal Deposit
Insurance Act, 12 U.S.C. 1818(a) (6).
This provision ensures that the
institution’s depositors receive
appropriate information regarding the
institution’s intent to terminate its
insured status and that, prior to the
termination of the institution’s insured
status, depositors receive appropriate
information concerning federal deposit
insurance coverage of their accounts
once the institution’s insured status is
terminated.
There is no change in the
methodology or substance of this
information collection. The number of
certifications submitted under this
PO 00000
Frm 00032
Fmt 4703
Sfmt 4703
Frequency
of response
Average
total
annual
estimated
burden
(hours)
Obligation
to respond
information collection is closely related
to the number of insured depository
institutions that are acquired by another
depository institution through mergers
or as a result of the closing of the
institution by its chartering authority.
The number of depositor notifications is
driven by the number of institutions
that elect to voluntarily terminate its
insured status without having its
deposits assumed by another insured
depository institution. The change in
burden is due to economic fluctuation
reflected in a lower number of
certifications following mergers or
closures and a reduction in the number
of notifications due to voluntary
terminations of insured status.
3. Title: Large Bank Deposit Insurance
Program.
E:\FR\FM\12JYN1.SGM
12JYN1
32292
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
OMB Number: 3064–0162.
Form Number: None.
Affected Public: Insured depository
institutions having at least $2 billion in
deposits and at least either: (a) 250,000
Deposit accounts; or (b) $20 billion in
total assets, regardless of the number of
deposit accounts (a ‘‘covered
institution’’).
Burden Estimate:
SUMMARY OF ANNUAL BURDEN
Obligation to
respond
Type of burden
Average
estimated
number of
respondents
Estimated
time per
response
(hours)
Frequency of
response
Average
total annual
estimated
burden
(hours)
Implementation
Posting and removing provisional holds—360.9(c)(1)
and (2).
Providing standard data format for deposit account and
customer information—360.9(d)(1).
Notification of identity of person responsible for producing standard data downloads—360.9(c)(3).
Request for exemption from provisional hold requirements—360.9(c)(9).
Provide deposit account and customer information in required standard format—360.9(d)(3).
Request for extension of compliance deadline—
360.9(e)(7).
Request for exemption—360.9(f) .....................................
Recordkeeping .....
Mandatory ............
8
150
One time ...............
1,200
Recordkeeping .....
Mandatory ............
8
110
One time ...............
880
Reporting ..............
Mandatory ............
8
8
One time ...............
64
Reporting ..............
Voluntary ..............
1
20
On occasion .........
20
Reporting ..............
Mandatory ............
8
40
On occasion .........
320
Reporting ..............
Voluntary ..............
1
20
On occasion .........
20
Reporting ..............
Voluntary ..............
1
20
On occasion .........
20
Total Implementation Burden ....................................
...............................
...............................
....................
....................
...............................
2,524
amozie on DSK3GDR082PROD with NOTICES1
Ongoing
Notification of identity of person responsible for producing standard data downloads—360.9(c)(3).
Request for exemption from provisional hold requirements—360.9(c)(9).
Request for exemption—360.9(f) .....................................
Test compliance with 360.9(c)–(d) pursuant to 360.9(h)
Reporting ..............
Mandatory ............
153
8
On occasion .........
1,224
Reporting ..............
Voluntary ..............
1
20
On occasion .........
20
Reporting ..............
Reporting ..............
Voluntary ..............
Mandatory ............
1
81
20
80
On occasion .........
On occasion .........
20
6,480
Total Ongoing Burden ...............................................
...............................
...............................
....................
....................
...............................
7,744
Total Estimated Annual Burden .........................
...............................
...............................
....................
....................
...............................
10,268
General Description of Collection:
Upon the failure of an FDIC-insured
depository institution, the FDIC is
required to pay insured deposits as soon
as possible.1 To do so, the FDIC must be
able to quickly determine the total
insured amount for each depositor. To
make this determination, the FDIC must
ascertain the balances of all deposit
accounts owned by the same depositor
in the same ownership capacity at a
failed institution as of the day of failure.
The FDIC issued a regulation (12 CFR
360.9) to modernize the process of
determining the insurance status of each
depositor in the event of failure of a
covered institution. The regulation
requires covered institutions to adopt
mechanisms that would, in the event of
the institution’s failure (1) provide the
FDIC with standard deposit account and
other customer information, and (2)
allow the placement and release of
holds on liability accounts, including
deposits. The regulation applies only to
covered institutions and imposes the
1 The FDIC can meet its obligation to pay insured
deposits either by payment in cash or by making
available to each depositor a transferred deposit in
a another insured depository institution. 12 U.S.C
§ 1821(f)(1).
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
following recordkeeping and reporting
requirements:
Recordkeeping
360.9(c)(1) and (2)—Posting and
Removing Provisional Holds. Covered
institutions must have an automatic
process for placing a provisional hold
on deposit accounts within timeframes
specified in FDIC regulations.
360.9(d)(1) and (2)—Providing
Standard Data Format for Deposit
Account and Customer Information.
Covered institutions must produce
information in the specified standard
data format.
Reporting
360.9(c)(3)—Covered institutions
must notify the FDIC of the person(s)
responsible for producing required
standard data downloads and for
administering provisional holds.
360.9(c)(9)—A covered institution
may request an exemption from the
provisional hold requirements for
certain account systems servicing a
relatively small number of accounts
where manual application of
provisional holds is feasible.
PO 00000
Frm 00033
Fmt 4703
Sfmt 4703
360.9(d)(3)—Upon request by the
FDIC, a covered institution must submit
the data required by 360.9(d)(1) .
360.9(e)(7)—A covered institution
may request an extension of the
deadline to comply with provisional
hold and standard data format
requirements.
360.9(f)—A covered institution may
request an exemption from the
provisional hold and standard data
format requirements due to high
concentration of deposits incidental to
credit card operations.
360.9(h)—A covered institution’s
compliance with the recordkeeping and
reporting requirements set forth in the
rule will be tested by the FDIC.
Burden Estimate Methodology and
Assumptions:
The FDIC is revising its burden
estimate because the number of covered
institutions has decreased due to
economic fluctuations and most covered
institutions have already implemented
the requirements of the regulation and
will only face reduced ongoing
compliance burdens. Based on FDIC
Call Report data,2 the regulation
currently applies to 145 institutions.
2 FDIC
E:\FR\FM\12JYN1.SGM
Call Report, September 30, 2017.
12JYN1
32293
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
The FDIC has determined that in the
past, between 1 and 3 new institutions
per quarter have become covered under
the regulation. FDIC estimates that on
average, 2 new institutions per quarter
(8 new institutions per year) will
become covered and be subject to initial
implementation burden. The following
table reflects the FDCI’s estimate of the
breakdown of covered institutions
facing implementation and ongoing
burden during the next three years:
NUMBER OF INSTITUTIONS
Year 1
Year 3
Average
Implementation ................................................................................................................
Ongoing ...........................................................................................................................
8
145
8
153
8
161
8
153
Total ..........................................................................................................................
153
161
169
161
All covered institutions will be
required to comply with the
requirements of 360.9(h). FDIC
estimates that half of the covered
institutions will be tested for
compliance each year. As a result, it is
estimated that an average of 81 covered
institutions will be affected by this
reporting burden annually. No
institutions have requested an extension
under section 360.9(e)(7), or exemptions
under sections 360.9(c)(9) or 360.9(f).
The ‘‘Summary of Annual Burden’’ table
above lists a respondent count of 1 for
these requests as placeholders to
preserve the burden estimates for these
activities.
Request for Comment: Comments are
invited on: (a) Whether the collection of
information is necessary for the proper
performance of the FDIC’s functions,
including whether the information has
practical utility; (b) the accuracy of the
estimates of the burden of the
information collection, including the
validity of the methodology and
assumptions used; (c) ways to enhance
the quality, utility, and clarity of the
information to be collected; and (d)
ways to minimize the burden of the
collection of information on
respondents, including through the use
of automated collection techniques or
other forms of information technology.
All comments will become a matter of
public record.
Dated at Washington, DC, on July 6, 2018.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2018–14864 Filed 7–11–18; 8:45 am]
BILLING CODE 6714–01–P
amozie on DSK3GDR082PROD with NOTICES1
Year 2
FEDERAL ELECTION COMMISSION
Sunshine Act Meeting
Tuesday, July 17, 2018
at 10:00 a.m.
PLACE: 1050 First Street NE,
Washington, DC.
TIME AND DATE:
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
This meeting will be closed to
the public.
MATTERS TO BE CONSIDERED: Compliance
matters pursuant to 52 U.S.C. 30109.
Matters concerning participation in
civil actions or proceedings or
arbitration.
*
*
*
*
*
Contact Person for More Information:
Judith Ingram, Press Officer, Telephone:
(202) 694–1220.
STATUS:
Laura E. Sinram,
Deputy Secretary of the Commission.
[FR Doc. 2018–15024 Filed 7–10–18; 4:15 pm]
BILLING CODE 6715–01–P
FEDERAL RESERVE SYSTEM
Formations of, Acquisitions by, and
Mergers of Bank Holding Companies
The companies listed in this notice
have applied to the Board for approval,
pursuant to the Bank Holding Company
Act of 1956 (12 U.S.C. 1841 et seq.)
(BHC Act), Regulation Y (12 CFR part
225), and all other applicable statutes
and regulations to become a bank
holding company and/or to acquire the
assets or the ownership of, control of, or
the power to vote shares of a bank or
bank holding company and all of the
banks and nonbanking companies
owned by the bank holding company,
including the companies listed below.
The applications listed below, as well
as other related filings required by the
Board, are available for immediate
inspection at the Federal Reserve Bank
indicated. The applications will also be
available for inspection at the offices of
the Board of Governors. Interested
persons may express their views in
writing on the standards enumerated in
the BHC Act (12 U.S.C. 1842(c)). If the
proposal also involves the acquisition of
a nonbanking company, the review also
includes whether the acquisition of the
nonbanking company complies with the
standards in section 4 of the BHC Act
(12 U.S.C. 1843). Unless otherwise
noted, nonbanking activities will be
conducted throughout the United States.
PO 00000
Frm 00034
Fmt 4703
Sfmt 4703
Unless otherwise noted, comments
regarding each of these applications
must be received at the Reserve Bank
indicated or the offices of the Board of
Governors not later than August 6, 2018.
A. Federal Reserve Bank of Kansas
City (Dennis Denney, Assistant Vice
President) 1 Memorial Drive, Kansas
City, Missouri 64198–0001:
1. Platte Valley Financial Service
Companies, Inc., Scottsbluff, Nebraska;
to acquire 100 percent of the voting
shares of The American Bank of Sidney,
Sidney, Nebraska.
Board of Governors of the Federal Reserve
System, July 9, 2018.
Ann Misback,
Secretary of the Board.
[FR Doc. 2018–14931 Filed 7–11–18; 8:45 am]
BILLING CODE P
FEDERAL TRADE COMMISSION
[File No. 182 3100]
ReadyTech Corporation; Analysis To
Aid Public Comment
Federal Trade Commission.
Proposed consent agreement.
AGENCY:
ACTION:
The consent agreement in this
matter settles alleged violations of
federal law prohibiting unfair or
deceptive acts or practices. The attached
Analysis to Aid Public Comment
describes both the allegations in the
complaint and the terms of the consent
order—embodied in the consent
agreement—that would settle these
allegations.
SUMMARY:
Comments must be received on
or before August 1, 2018.
ADDRESSES: Interested parties may file a
comment online or on paper, by
following the instructions in the
Request for Comment part of the
SUPPLEMENTARY INFORMATION section
below. Write: ‘‘ReadyTech Corporation’’
on your comment, and file your
comment online at https://
ftcpublic.commentworks.com/ftc/
readytechconsent by following the
DATES:
E:\FR\FM\12JYN1.SGM
12JYN1
amozie on DSK3GDR082PROD with NOTICES1
32294
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
instructions on the web-based form. If
you prefer to file your comment on
paper, write ‘‘ReadyTech; File No.
1823100’’ on your comment and on the
envelope, and mail your comment to the
following address: Federal Trade
Commission, Office of the Secretary,
600 Pennsylvania Avenue NW, Suite
CC–5610 (Annex D), Washington, DC
20580; or deliver your comment to:
Federal Trade Commission, Office of the
Secretary, Constitution Center, 400 7th
Street SW, 5th Floor, Suite 5610 (Annex
D), Washington, DC 20024.
FOR FURTHER INFORMATION CONTACT:
Monique Einhorn (202–326–2575),
Bureau of Consumer Protection, 600
Pennsylvania Avenue NW, Washington,
DC 20580.
SUPPLEMENTARY INFORMATION: Pursuant
to Section 6(f) of the Federal Trade
Commission Act, 15 U.S.C. 46(f), and
FTC Rule 2.34, 16 CFR 2.34, notice is
hereby given that the above-captioned
consent agreement containing a consent
order to cease and desist, having been
filed with and accepted, subject to final
approval, by the Commission, has been
placed on the public record for a period
of thirty (30) days. The following
Analysis to Aid Public Comment
describes the terms of the consent
agreement, and the allegations in the
complaint. An electronic copy of the
full text of the consent agreement
package can be obtained from the FTC
Home Page (for July 2, 2018), on the
World Wide Web, at https://
www.ftc.gov/news-events/commissionactions.
You can file a comment online or on
paper. For the Commission to consider
your comment, we must receive it on or
before August 1, 2018. Write
‘‘ReadyTech; File No. 1823100’’ on your
comment. Your comment—including
your name and your state—will be
placed on the public record of this
proceeding, including, to the extent
practicable, on the public Commission
website, at https://www.ftc.gov/policy/
public-comments.
Postal mail addressed to the
Commission is subject to delay due to
heightened security screening. As a
result, we encourage you to submit your
comments online. To make sure that the
Commission considers your online
comment, you must file it at https://
ftcpublic.commentworks.com/ftc/
readytechconsent by following the
instructions on the web-based form. If
this Notice appears at http://
www.regulations.gov/#!home, you also
may file a comment through that
website.
If you prefer to file your comment on
paper, write ‘‘ReadyTech; File No.
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
1823100’’ on your comment and on the
envelope, and mail your comment to the
following address: Federal Trade
Commission, Office of the Secretary,
600 Pennsylvania Avenue NW, Suite
CC–5610 (Annex D), Washington, DC
20580; or deliver your comment to the
following address: Federal Trade
Commission, Office of the Secretary,
Constitution Center, 400 7th Street SW,
5th Floor, Suite 5610 (Annex D),
Washington, DC 20024. If possible,
submit your paper comment to the
Commission by courier or overnight
service.
Because your comment will be placed
on the publicly accessible FTC website
at https://www.ftc.gov, you are solely
responsible for making sure that your
comment does not include any sensitive
or confidential information. In
particular, your comment should not
include any sensitive personal
information, such as your or anyone
else’s Social Security number; date of
birth; driver’s license number or other
state identification number, or foreign
country equivalent; passport number;
financial account number; or credit or
debit card number. You are also solely
responsible for making sure that your
comment does not include any sensitive
health information, such as medical
records or other individually
identifiable health information. In
addition, your comment should not
include any ‘‘trade secret or any
commercial or financial information
which . . . is privileged or
confidential’’—as provided by Section
6(f) of the FTC Act, 15 U.S.C. 46(f), and
FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2)—
including in particular competitively
sensitive information such as costs,
sales statistics, inventories, formulas,
patterns, devices, manufacturing
processes, or customer names.
Comments containing material for
which confidential treatment is
requested must be filed in paper form,
must be clearly labeled ‘‘Confidential,’’
and must comply with FTC Rule 4.9(c).
In particular, the written request for
confidential treatment that accompanies
the comment must include the factual
and legal basis for the request, and must
identify the specific portions of the
comment to be withheld from the public
record. See FTC Rule 4.9(c). Your
comment will be kept confidential only
if the General Counsel grants your
request in accordance with the law and
the public interest. Once your comment
has been posted on the public FTC
website—as legally required by FTC
Rule 4.9(b)—we cannot redact or
remove your comment from the FTC
website, unless you submit a
confidentiality request that meets the
PO 00000
Frm 00035
Fmt 4703
Sfmt 4703
requirements for such treatment under
FTC Rule 4.9(c), and the General
Counsel grants that request.
Visit the FTC website at http://
www.ftc.gov to read this Notice and the
news release describing it. The FTC Act
and other laws that the Commission
administers permit the collection of
public comments to consider and use in
this proceeding, as appropriate. The
Commission will consider all timely
and responsive public comments that it
receives on or before August 1, 2018.
For information on the Commission’s
privacy policy, including routine uses
permitted by the Privacy Act, see
https://www.ftc.gov/site-information/
privacy-policy.
Analysis of Proposed Consent Order To
Aid Public Comment
The Federal Trade Commission
(‘‘FTC’’ or ‘‘Commission’’) has accepted,
subject to final approval, a consent
agreement applicable to ReadyTech
Corporation (‘‘ReadyTech’’).
The proposed consent order has been
placed on the public record for thirty
(30) days for receipt of comments by
interested persons. Comments received
during this period will become part of
the public record. After thirty days, the
Commission will again review the
agreement and the comments received,
and will decide whether it should
withdraw from the agreement and take
appropriate action or make final the
agreement’s proposed order.
This matter concerns alleged false or
misleading representations that
ReadyTech made to consumers
concerning its participation in the
Privacy Shield framework agreed upon
by the U.S. and the European Union
(‘‘EU’’). The Privacy Shield framework
allows U.S. companies to transfer data
outside the EU consistent with EU law.
To join the EU-U.S. Privacy Shield
framework, a company must self-certify
to the U.S. Department of Commerce
(‘‘Commerce’’) that it complies with a
set of principles and related
requirements that have been deemed by
the European Commission as providing
‘‘adequate’’ privacy protection. These
principles include notice; choice;
accountability for onward transfer;
security; data integrity and purpose
limitation; access; and recourse,
enforcement, and liability. Commerce
maintains a public website, https://
www.privacyshield.gov/list, where it
posts the names of companies that have
self-certified to the EU-U.S. Privacy
Shield framework. The listing of
companies indicates whether their selfcertification is current. Companies are
required to re-certify every year in order
to retain their status as current members
E:\FR\FM\12JYN1.SGM
12JYN1
amozie on DSK3GDR082PROD with NOTICES1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
of the EU-U.S. Privacy Shield
framework.
ReadyTech provides online and
instructor-led training. According to the
Commission’s complaint, ReadyTech
has set forth on its website,
www.readytech.com/policies/privacypolicy/, privacy policies and statements
about its practices, including statements
related to the status of its participation
in the EU-U.S. Privacy Shield
framework.
The Commission’s complaint alleges
that ReadyTech deceptively represented
that it was actively in the process of
certifying compliance with the EU-U.S.
Privacy Shield framework when, in fact,
ReadyTech never completed the
necessary steps to finalize its
application, and was not certified to
participate in the EU-U.S. Privacy
Shield framework.
Part I of the proposed order prohibits
ReadyTech from making
misrepresentations about its
membership in any privacy or security
program sponsored by the government
or any other self-regulatory or standardsetting organization, including, but not
limited to, the EU-U.S. Privacy Shield
framework and the Swiss-U.S. Privacy
Shield framework.
Parts II through VI of the proposed
order are reporting and compliance
provisions. Part II requires
acknowledgement of the order and
dissemination of the order now and in
the future to persons with
responsibilities relating to the subject
matter of the order. Part III ensures
notification to the FTC of changes in
corporate status and mandates that
ReadyTech submit an initial compliance
report to the FTC. Part IV requires
ReadyTech to retain documents relating
to its compliance with the order for a
five-year period.
Part V mandates that ReadyTech make
available to the FTC information or
subsequent compliance reports, as
requested. Part VI is a provision
‘‘sunsetting’’ the order after twenty (20)
years, with certain exceptions.
The purpose of this analysis is to
facilitate public comment on the
proposed order. It is not intended to
constitute an official interpretation of
the proposed complaint or order or to
modify the order’s terms in any way.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2018–14865 Filed 7–11–18; 8:45 am]
BILLING CODE 6750–01–P
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
GENERAL SERVICES
ADMINISTRATION
[OMB Control No. 3090–0080: Docket No.
2018–0001; Sequence No. 3]
Submission for OMB Review; General
Services Administration Acquisition
Regulation; Contract Financing Final
Payment (GSA Form 1142 Release of
Claims)
Office of Acquisition Policy,
General Services Administration (GSA).
ACTION: Notice of request for public
comments regarding an extension to an
existing OMB clearance.
AGENCY:
Under the provisions of the
Paperwork Reduction Act, the
Regulatory Secretariat Division will be
submitting to the Office of Management
and Budget (OMB) a request to review
and approve an extension of a
previously approved information
collection requirement and the
reinstatement of GSA Form 1142,
Release of Claims, regarding final
payment under construction and
building services contract. GSA
Contracting Officers have used this form
to achieve uniformity and consistency
in the release of claims process.
DATES: Submit comments on or before:
August 13, 2018.
FOR FURTHER INFORMATION CONTACT:
Leah Price, Procurement Analyst,
General Services Acquisition Policy
Division, GSA, by phone at 202–714–
9482 or by email at [email protected].
ADDRESSES: Submit comments regarding
this burden estimate or any other aspect
of this collection of information,
including suggestions for reducing this
burden to: Office of Information and
Regulatory Affairs of OMB, Attention:
Desk Officer for GSA, Room 10236,
NEOB, Washington, DC 20503.
Additionally submit a copy to GSA by
any of the following methods:
• Regulations.gov: http://
www.regulations.gov. Submit comments
via the Federal eRulemaking portal by
searching for Information Collection
3090–0080. Select the link ‘‘Comment
Now’’ that corresponds with
‘‘Information Collection 3090–0080,
Contract Financing Final Payment; GSA
Form 1142, Release of Claims’’. Follow
the instructions on the screen. Please
include your name, company name (if
any), and ‘‘Information Collection 3090–
0080, Contract Financing Final
Payment; GSA Form 1142, Release of
Claims’’ on your attached document.
• Mail: General Services
Administration, Regulatory Secretariat
Division (MVCB), 1800 F Street NW,
Washington, DC 20405. ATTN: Ms.
SUMMARY:
PO 00000
Frm 00036
Fmt 4703
Sfmt 4703
32295
Mandell/IC 3090–0080, Contract
Financing Final Payment; GSA Form
1142, Release of Claims.
Instructions: Comments received
generally will be posted without change
to http://www.regulations.gov, including
any personal and/or business
confidential information provided. To
confirm receipt of your comment(s),
please check www.regulations.gov,
approximately two-to-three days after
submission to verify posting (except
allow 30 days for posting of comments
submitted by mail).
SUPPLEMENTARY INFORMATION:
A. Purpose
The General Services Administration
Acquisition Regulation (GSAR) clause
552.232–72 requires construction and
building services contractors to submit
a release of claims before final payment
is made to ensure contractors are paid
in accordance with their contract
requirements and for work performed.
GSA Form 1142, Release of Claims is
used to achieve uniformity and
consistency in the release of claims
process.
B. Annual Reporting Burden
Respondents: 7,500.
Responses per Respondent: 1.
Annual Responses: 7,500.
Hours per Response: .10.
Total Burden Hours: 750.
C. Public Comments
A notice published in the Federal
Register at 83 FR 13280 on March 28,
2018. No comments were received.
Public comments are particularly
invited on: Whether this collection of
information is necessary and whether it
will have practical utility; whether our
estimate of the public burden of this
collection of information is accurate and
based on valid assumptions and
methodology; and ways to enhance the
quality, utility, and clarity of the
information to be collected.
Obtaining Copies of Proposals:
Requesters may obtain a copy of the
information collection documents from
the General Services Administration,
Regulatory Secretariat Division (MVCB),
1800 F Street NW, Washington, DC
20405, telephone 202–501–4755. Please
cite OMB Control No. 3090–0080,
Contract Financing Final Payment; GSA
Form 1142, Release of Claims, in all
correspondence.
Dated: July 2, 2018.
Jeffrey A. Koses,
Director, Office of Acquisition Policy, Office
of Government-wide Policy.
[FR Doc. 2018–14885 Filed 7–11–18; 8:45 am]
BILLING CODE 6820–61–P
E:\FR\FM\12JYN1.SGM
12JYN1
32296
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
GENERAL SERVICES
ADMINISTRATION
[OMB Control No. 3090–0205; Docket No.
2018–0001; Sequence No. 12]
General Services Administration
Acquisition Regulation (GSAR);
Information Collection; Environmental
Conservation, Occupational Safety,
and Drug-Free Workplace
Office of Acquisition Policy,
General Services Administration (GSA).
ACTION: Notice of request for comments
regarding the extension of a previously
existing OMB clearance.
AGENCY:
Under the provisions of the
Paperwork Reduction Act, the General
Services Administration will be
submitting to the Office of Management
and Budget (OMB) a request to review
and approve an extension of a
previously approved information
collection requirement regarding
Environmental Conservation,
Occupational Safety, and Drug-Free
Workplace.
SUMMARY:
Submit comments on or before:
September 10, 2018.
ADDRESSES: Submit comments
identified by Information Collection
3090–0205 by any of the following
methods:
• Regulations.gov: http://
www.regulations.gov. Submit comments
via the Federal eRulemaking portal by
searching the OMB control number.
Select the link ‘‘Comment Now’’ that
corresponds with ‘‘Information
Collection 3090–0205, Environmental
Conservation, Occupational Safety, and
Drug-Free Workplace’’. Follow the
instructions provided on the screen.
Please include your name, company
name (if any), and ‘‘Information
Collection 3090–0205, Environmental
Conservation, Occupational Safety, and
Drug-Free Workplace’’ on your attached
document.
• Mail: General Services
Administration, Regulatory Secretariat
Division (MVCB), 1800 F Street NW,
Washington, DC 20405. ATTN: Ms.
Mandell/IC 3090–0205, Environmental
Conservation, Occupational Safety, and
Drug-Free Workplace.
Instructions: Please submit comments
only and cite Information Collection
3090–0205, Environmental
Conservation, Occupational Safety, and
Drug-Free Workplace, in all
correspondence related to this
collection. Comments received generally
will be posted without change to
regulations.gov, including any personal
and/or business confidential
information provided. To confirm
amozie on DSK3GDR082PROD with NOTICES1
DATES:
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
receipt of your comment(s), please
check regulations.gov, approximately
two-to-three business days after
submission to verify posting (except
allow 30 days for posting of comments
submitted by mail).
FOR FURTHER INFORMATION CONTACT: Ms.
Johnnie McDowell, Procurement
Analyst, General Services Acquisition
Policy Division, GSA, at telephone 202–
718–6112, or via email to
[email protected].
SUPPLEMENTARY INFORMATION:
A. Purpose
The Federal Hazardous Substance Act
and Hazardous Material Transportation
Act prescribe standards for packaging of
hazardous substances. To meet the
requirements of the Acts, the General
Services Administration Regulation
prescribes provision 552.223–72,
Hazardous Material Information, to be
inserted in solicitations and contracts
that provides for delivery of hazardous
materials on a Free On Board (FOB)
origin basis.
This information collection will be
accomplished by means of the provision
which requires the contractor to identify
for each National Stock Number (NSN),
the DOT Shipping Name, Department of
Transportation (DOT) Hazards Class,
and whether the item requires a DOT
label. Contracting Officers and technical
personnel use the information to
monitor and ensure contract
requirements based on law and
regulation.
Properly identified and labeled items
of hazardous material allows for
appropriate handling of such items
throughout GSA’s supply chain system.
The information is used by GSA, stored
in an NSN database and provided to
GSA customers. Non-Collection and/or
a less frequently conducted collection of
the information resulting from GSAR
provision 552.223–72 would prevent the
Government from being properly
notified. Government activities may be
hindered from apprising their
employees of; (1) All hazards to which
they may be exposed; (2) Relative
symptoms and appropriate emergency
treatment; and (3) Proper conditions and
precautions for safe use and exposure.
B. Annual Reporting Burden
Respondents: 563.
Responses per Respondent: 3.
Total Responses: 1689.
Hours per Response: .67.
Total Burden Hours: 1111.
C. Public Comments
Public comments are particularly
invited on: Whether this collection of
information is necessary, whether it will
PO 00000
Frm 00037
Fmt 4703
Sfmt 4703
have practical utility; whether our
estimate of the public burden of this
collection of information is accurate,
and based on valid assumptions and
methodology; ways to enhance the
quality, utility, and clarity of the
information to be collected; and ways in
which we can minimize the burden of
the collection of information on those
who are to respond, through the use of
appropriate technological collection
techniques or other forms of information
technology.
Obtaining Copies of Proposals:
Requesters may obtain a copy of the
information collection documents from
the General Services Administration,
Regulatory Secretariat Division, 1800 F
Street NW, Washington, DC 20405,
telephone 202–501–4755. Please cite
OMB Control No. 3090–0205,
Environmental Conservation,
Occupational Safety, and Drug-Free
Workplace, in all correspondence.
Dated: July 9, 2018.
Jeffrey Koses,
Senior Procurement Executive, Office of
Acquisition Policy, Office of Governmentwide Policy.
[FR Doc. 2018–14937 Filed 7–11–18; 8:45 am]
BILLING CODE 6820–61–P
GENERAL SERVICES
ADMINISTRATION
[OMB Control No. 3090–0287; Docket No.
2018–0001; Sequence No. 10]
Information Collection; Background
Investigations for Child Care Workers
Office of Mission Assurance,
General Services Administration (GSA).
ACTION: Notice of request for comments
regarding an existing OMB information
collection.
AGENCY:
Under the provisions of the
Paperwork Reduction Act, the
Regulatory Secretariat Division will be
submitting to the Office of Management
and Budget (OMB) a request to review
and approve a previously approved
information collection requirement
regarding the collection of personal data
for background investigations for child
care workers accessing GSA owned and
leased controlled facilities
DATES: Submit comments on or before:
September 10, 2018.
ADDRESSES: Submit comments regarding
this burden estimate or any other aspect
of this collection of information,
including suggestions for reducing this
burden to: Office of Information and
Regulatory Affairs of OMB, Attention:
Desk Officer for GSA, Room 10236,
NEOB, Washington, DC 20503.
SUMMARY:
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
Additionally, submit a copy to GSA by
any of the following methods:
• Regulations.gov: http://
www.regulations.gov. Submit comments
via the Federal eRulemaking portal by
searching the OMB control number.
Select the link ‘‘Submit a Comment’’
that corresponds with ‘‘Information
Collection 3090–0287, Background
Investigations for Child Care Workers’’.
Follow the instructions provided at the
‘‘Submit a Comment’’ screen. Please
include your name, company name (if
any), and ‘‘Information Collection 3090–
0287, Background Investigations for
Child Care Workers’’ on your attached
document.
• Mail: General Services
Administration, Regulatory Secretariat
Division (MVCB), 1800 F Street NW,
Washington, DC 20405. ATTN: Ms.
Mandell/IC 3090–0287, Background
Investigations for Child Care Workers.
Instructions: Please submit comments
only and cite Information Collection
3090–0287, Background Investigations
for Child Care Workers, in all
correspondence related to this
collection. Comments received generally
will be posted without change to http://
www.regulations.gov, including any
personal and/or business confidential
information provided. To confirm
receipt of your comment(s), please
check www.regulations.gov,
approximately two to three days after
submission to verify posting (except
allow 30 days for posting of comments
submitted by mail).
FOR FURTHER INFORMATION CONTACT: Mr.
Phil Ahn, Security Officer, Office of
Mission Assurance, GSA, by telephone
at XXX–XXX–XXXX or email
[email protected].
SUPPLEMENTARY INFORMATION:
amozie on DSK3GDR082PROD with NOTICES1
A. Purpose
Homeland Security Presidential
Directive (HSPD) 12 ‘‘Policy for a
Common Identification Standard for
Federal Employees and Contractors’’
requires the implementation of a
governmentwide standard for secure
and reliable forms of identification for
Federal employees and contractors.
OMB’s implementing instructions
requires all contract employees
requiring routine access to federally
controlled facilities for greater than six
(6) months to receive a background
investigation. The minimum
background investigation is Tier 1 and
the Office of Personnel Management
offers a Tier 1C for child care.
However, there is no requirement in
the law or HSPD–12 that requires child
care employees to be subject to the Tier
1C since employees of child care
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
providers are neither government
employees nor government contractors.
The child care providers are required to
complete the criminal history
background checks mandated in the
Crime Control Act of 1990, Public Law
101–647, dated November 29, 1990, as
amended by Public Law 102–190, dated
December 5, 1991. These statutes
require that each employee of a child
care center located in a Federal building
or in leased space must undergo a
background check.
According to GSA policy, child care
workers (as described above) will need
to submit the following:
1. An original signed copy of a Basic
National Agency Check Criminal
History, GSA Form 176; and
2. Two sets of fingerprints on FBI
Fingerprint Cards, for SF–87 and/or
electronic prints from an enrollment
center.
3. Electronically submit the e-qip
(SF85) application for completion of the
Tier 1C.
This is not a request to collect new
information; this is a request to change
the form that is currently being used to
collect this information.
B. Annual Reporting Burden
Respondents: 1,200.
Responses per Respondent: 1.
Hours per Response: 1.
Total Burden Hours: 1,200.
C. Public Comments
Public comments are particularly
invited on: Whether this collection of
information is necessary and whether it
will have practical utility; whether our
estimate of the public burden of this
collection of information is accurate,
and based on valid assumptions and
methodology; ways to enhance the
quality, utility, and clarity of the
information to be collected.
Obtaining Copies of Proposals:
Requesters may obtain a copy of the
information collection documents from
the General Services Administration,
Regulatory Secretariat Division (MVCB),
1800 F Street NW, Washington, DC
20405, telephone 202–501–4755. Please
cite Background Investigations for Child
Care Workers, in all correspondence.
Dated: July 2, 2018.
David A. Shive,
Chief Information Officer.
[FR Doc. 2018–14882 Filed 7–11–18; 8:45 am]
BILLING CODE 6820–23–P
PO 00000
Frm 00038
Fmt 4703
Sfmt 4703
32297
GENERAL SERVICES
ADMINISTRATION
[OMB Control No. 3090–0007; Docket No.
2018–0001; Sequence No. 1]
Submission for OMB Review; General
Services Administration Acquisition
Regulation; Contractor’s Qualifications
and Financial Information (GSA Form
527)
Office of Acquisition Policy,
General Services Administration (GSA).
ACTION: Notice of request for comments
regarding an extension to an existing
OMB clearance.
AGENCY:
Under the provisions of the
Paperwork Reduction Act, the
Regulatory Secretariat Division will be
submitting to the Office of Management
and Budget (OMB) a request to review
and approve an extension of a
previously approved information
collection requirement regarding
Contractor’s Qualifications and
Financial Information (GSA Form 527).
DATES: Submit comments on or before:
August 13, 2018.
ADDRESSES: Submit comments regarding
this burden estimate or any other aspect
of this collection of information,
including suggestions for reducing this
burden to: Office of Information and
Regulatory Affairs of OMB, Attention:
Desk Officer for GSA, Room 10236,
NEOB, Washington, DC, 20503.
Additionally submit a copy to GSA by
any of the following methods:
• Regulations.gov: http://
www.regulations.gov. Submit comments
via the Federal eRulemaking portal
searching Information Collection 3090–
0007. Select the link ‘‘Comment Now’’
that corresponds with ‘‘Information
Collection 3090–0007, Contractor’s
Qualifications and Financial
Information’’. Follow the instructions
provided on the screen. Please include
your name, company name (if any), and
‘‘Information Collection 3090–0007,
Contractor’s Qualifications and
Financial Information’’ on your attached
document.
• Mail: General Services
Administration, Regulatory Secretariat
Division (MVCB), 1800 F Street NW,
Washington, DC 20405. ATTN: Ms.
Mandell/IC 3090–0007, Contractor’s
Qualifications and Financial
Information.
Instructions: Please submit comments
only and cite Information Collection
3090–0007, Contractor’s Qualifications
and Financial Information, in all
correspondence related to this
collection. Comments received generally
will be posted without change to
SUMMARY:
E:\FR\FM\12JYN1.SGM
12JYN1
32298
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
regulations.gov, including any personal
and/or business confidential
information provided. To confirm
receipt of your comment(s), please
check regulations.gov, approximately
two-to-three business days after
submission to verify posting (except
allow 30 days for posting of comments
submitted by mail).
FOR FURTHER INFORMATION CONTACT:
Johnnie McDowell, Policy Analyst,
Office of Governmentwide Policy, at
202–718–6112, or via email at
[email protected].
SUPPLEMENTARY INFORMATION:
A. Purpose
The General Services Administration
will be requesting that OMB extend
information collection 3090–0007,
concerning GSA Form 527, Contractor’s
Qualifications and Financial
Information. This form is used to
determine the financial capability of
prospective contractors as to whether
they meet the financial responsibility
standards in accordance with the
Federal Acquisition Regulation (FAR)
9.103(a) and 9.104–1 and also the
General Services Administration
Acquisition Manual (GSAM) 509.105–
1(a).
amozie on DSK3GDR082PROD with NOTICES1
B. Annual Reporting Burden
Respondents: 2,542.
Responses per Respondent: 1.2.
Total Responses: 3,050.
Hours per Response: 1.5.
Total Burden Hours: 4,575.
The estimated annual burden has
decreased since GSA’s 2014 submission
from 5,292 to 4,575 burden hours to
reflect the continued use of the
widespread option for potential
contractors to submit financial
statements and balance sheets in lieu of
completing the applicable fields on GSA
Form 527. The alternate submission of
financial statements and balance sheets
significantly reduces the burden on
prospective contractors, as these
documents are generally readily
available. The average estimated hours
to complete a response remained at the
optimal rate of 1.5 hours.
C. Public Comments
Public comments are particularly
invited on: Whether this collection of
information is necessary and whether it
will have practical utility; whether our
estimate of the public burden of this
collection of information is accurate,
and based on valid assumptions and
methodology; ways to enhance the
quality, utility, and clarity of the
information to be collected. A request
for public comments was issued in the
Federal Register at 83 FR 7184, on
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
February 20, 2018. No comments were
received.
Obtaining Copies of Proposals:
Requesters may obtain a copy of the
information collection documents from
the General Services Administration,
Regulatory Secretariat Division (MVCB),
1800 F Street NW, Washington, DC
20405, telephone 202–501–4755.
Please cite OMB Control No. 3090–
0007, Contractor’s Qualifications and
Financial Information (GSA Form 527),
in all correspondence.
Dated: July 2, 2018.
Jeffrey A. Koses,
Senior Procurement Executive, Office of
Acquisition Policy, Office of Governmentwide Policy.
[FR Doc. 2018–14879 Filed 7–11–18; 8:45 am]
BILLING CODE 6820–61–P
GENERAL SERVICES
ADMINISTRATION
[OMB Control No. 3090–XXXX; Docket No.
2018–0001; Sequence No. 17]
Information Collection; CDP Supply
Chain Climate Change Information
Request
Office of Government-Wide
Policy (OGP), General Services
Administration.
ACTION: Notice of request for comments
regarding a new request for an Office of
Management and Budget (OMB)
clearance.
AGENCY:
The Office of Governmentwide Policy, General Services
Administration (GSA) will submit a
request to the Office of Management and
Budget (OMB) for review and clearance
for the CDP Supply Chain Climate
Change Information Request. As
required by the Paperwork Reduction
Act of 1995.
DATES: Submit comments on or before
September 10, 2018.
ADDRESSES: Submit comments
identified by Information Collection
3090–XXXX; CDP Supply Chain Climate
Change Information Request, by any of
the following methods:
ADDRESSES: Submit comments on this
collection by any of the following
methods:
• Regulations.gov: http://
www.regulations.gov. Submit comments
via the Federal eRulemaking portal by
searching for ‘‘Information Collection
3090–XXXX; CDP Supply Chain Climate
Change Information Request.’’ Select the
link ‘‘Submit a Comment’’ that
corresponds with ‘‘Information
Collection 3090–XXXX; CDP Supply
Chain Climate Change Information
SUMMARY:
PO 00000
Frm 00039
Fmt 4703
Sfmt 4703
Request.’’ Follow the instructions
provided at the ‘‘Submit a Comment’’
screen. Please include your name,
company name (if any), and
‘‘Information Collection 3090–XXXX;
CDP Supply Chain Climate Change
Information Request’’ on your attached
document.
• Mail: General Services
Administration, Regulatory Secretariat
Division (MVCB), 1800 F Street NW,
Washington, DC 20405. ATTN: Ms.
Mandell/IC 3090–XXXX; CDP Supply
Chain Climate Change Information
Request.
Instructions: Please submit comments
only and cite Information Collection
3090–XXXX; CDP Supply Chain Climate
Change Information Request, in all
correspondence related to this
collection. Comments received generally
will be posted without change to http://
www.regulations.gov, including any
personal and/or business confidential
information provided. To confirm
receipt of your comment(s), please
check www.regulations.gov,
approximately two to three days after
submission to verify posting (except
allow 30 days for posting of comments
submitted by mail).
SUPPLEMENTARY INFORMATION:
A. Purpose
The CDP Supply Chain Climate
Change Information Request is an
electronic questionnaire designed to
collect information pertinent to
organizations’ exposure to energy
market and environmental risks. The
questionnaire is administered by CDP
North America, Inc., a 501(c)(3)
nonprofit organization (‘‘CDP’’). CDP
administers the questionnaire annually
to companies on behalf of over 650
institutional investors and over 100
major purchasing corporations and
governmental purchasing organizations.
In accordance with 31 U.S. Code
§ 3512(c)(1)(b), GSA will use the
information collected via this
questionnaire to inform and develop
purchasing policies and contract
requirements necessary to safeguard
Federal assets against waste, loss, and
misappropriation resulting from
unmitigated exposure to energy market
and environmental risks.
B. Annual Burden Hours
Frequency: Annual.
Affected Public: Federal contractors.
Number of Respondents: 250.
Responses per Respondent: 1.
Total Annual Responses: 250.
Estimated Time per Respondent: 4.8
hrs.
Total Burden Hours: 1,210.
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
C. Public Comments
Public comments are particularly
invited on: Whether this collection of
information is necessary, whether it will
have practical utility; whether our
estimate of the public burden of this
collection of information is accurate,
and based on valid assumptions and
methodology; ways to enhance the
quality, utility, and clarity of the
information to be collected; and ways in
which we can minimize the burden of
the collection of information on those
who are to respond, through the use of
appropriate technological collection
techniques or other forms of information
technology.
Dated: July 2, 2018.
David A. Shive,
Chief Information Officer.
[FR Doc. 2018–14884 Filed 7–11–18; 8:45 am]
BILLING CODE 6820–61–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Disease Control and
Prevention
Advisory Board on Radiation and
Worker Health (ABRWH or the
Advisory Board), National Institute for
Occupational Safety and Health
(NIOSH)
Centers for Disease Control and
Prevention (CDC), Department of Health
and Human Services (HHS).
ACTION: Notice of meeting.
AGENCY:
In accordance with the
Federal Advisory Committee Act, the
CDC, announces the following meeting
of the Advisory Board on Radiation and
Worker Health (ABRWH). This meeting
is open to the public, limited only by
the space available. The meeting space
accommodates approximately 150
people and the audio conference line
has 150 ports for callers. The public is
welcome to submit written comments in
advance of the meeting, to the contact
person below. Written comments
received in advance of the meeting will
be included in the official record of the
meeting. The public is also welcome to
listen to the meeting by joining the
teleconference (information below).
DATES: The meeting will be held on
August 22, 2018 from 8:30 a.m. to 5:00
p.m., EDT, and August 23, 2018, 8:30
a.m. to 12:00 p.m., EDT. A public
comment session will be held on August
22, 2018 at 5:00 p.m. and conclude at
6:00 p.m. or following the final call for
public comment, whichever comes first.
amozie on DSK3GDR082PROD with NOTICES1
SUMMARY:
VerDate Sep<11>2014
17:21 Jul 11, 2018
Hilton Providence, 21
Atwells Avenue, Providence, RI 02903;
Phone: (401)–831–3900, Fax: (401)–274–
1562 and audio conference call via FTS
Conferencing. The USA toll-free dial-in
number is 1–866–659–0537; the pass
code is 9933701. Web conference by
Skype: meeting CONNECTION: https://
webconf.cdc.gov/zab6/yzdq02pl?sl=1.
ADDRESSES:
Jkt 244001
FOR FURTHER INFORMATION CONTACT:
Theodore Katz, MPA, Designated
Federal Officer, NIOSH, CDC, 1600
Clifton Road, Mailstop E–20, Atlanta,
Georgia 30333, Telephone (513) 533–
6800, Toll Free 1 (800) CDC–INFO,
Email [email protected].
SUPPLEMENTARY INFORMATION:
Background: The Advisory Board was
established under the Energy Employees
Occupational Illness Compensation
Program Act of 2000 to advise the
President on a variety of policy and
technical functions required to
implement and effectively manage the
new compensation program. Key
functions of the Advisory Board include
providing advice on the development of
probability of causation guidelines
which have been promulgated by the
Department of Health and Human
Services (HHS) as a final rule, advice on
methods of dose reconstruction which
have also been promulgated by HHS as
a final rule, advice on the scientific
validity and quality of dose estimation
and reconstruction efforts being
performed for purposes of the
compensation program, and advice on
petitions to add classes of workers to the
Special Exposure Cohort (SEC). In
December 2000, the President delegated
responsibility for funding, staffing, and
operating the Advisory Board to HHS,
which subsequently delegated this
authority to the CDC. NIOSH
implements this responsibility for CDC.
The charter was issued on August 3,
2001, renewed at appropriate intervals,
rechartered under Executive Order
13811 on February 12, 2018, and will
terminate on September 30, 2019.
Purpose: This Advisory Board is
charged with (a) providing advice to the
Secretary, HHS, on the development of
guidelines under Executive Order
13179; (b) providing advice to the
Secretary, HHS, on the scientific
validity and quality of dose
reconstruction efforts performed for this
program; and (c) upon request by the
Secretary, HHS, advising the Secretary
on whether there is a class of employees
at any Department of Energy facility
who were exposed to radiation but for
whom it is not feasible to estimate their
radiation dose, and on whether there is
reasonable likelihood that such
PO 00000
Frm 00040
Fmt 4703
Sfmt 4703
32299
radiation doses may have endangered
the health of members of this class.
Matters to be Considered: The agenda
will include discussions on the
following: NIOSH Program Update;
Department of Labor Program Update;
Department of Energy Program Update;
SEC Petitions Update; possible
discussion of a site profile review (dose
reconstruction methods for Feed
Materials Production Center (Fernald,
Ohio); SEC Petitions for: Sandia
National Laboratory (Albuquerque, New
Mexico), Metals and Controls
Corporation (Attleboro, Massachusetts,
Idaho National Laboratory (Scoville,
Idaho), and DeSoto Facility (Los
Angeles, California); continued review
of dose reconstruction methods
associated with estimating skin doses;
and a Board Work Session. Agenda
items are subject to change as priorities
dictate.
The Director, Management Analysis
and Services Office, has been delegated
the authority to sign Federal Register
notices pertaining to announcements of
meetings and other committee
management activities, for both the
Centers for Disease Control and
Prevention and the Agency for Toxic
Substances and Disease Registry.
Sherri A. Berger,
Chief Operating Officer, Centers for Disease
Control and Prevention.
[FR Doc. 2018–14929 Filed 7–11–18; 8:45 am]
BILLING CODE 4163–19–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Disease Control and
Prevention
Healthcare Infection Control Practices
Advisory Committee (HICPAC)
Centers for Disease Control and
Prevention (CDC), Department of Health
and Human Services (HHS).
ACTION: Notice of meeting.
AGENCY:
In accordance with the
Federal Advisory Committee Act, the
CDC announces the following meeting
for the Healthcare Infection Control
Practices Advisory Committee
(HICPAC). This meeting is open to the
public, limited only by audio phone
lines available. The public is also
welcome to listen to the meeting by
dialing 888–790–3409, passcode:
3250534. A total of 200 lines will be
available. To register for this call, please
go to www.cdc.gov/hicpac.
DATES: The meeting will be held on
August 29, 2018, 3:00 p.m. to 5:00 p.m.,
EDT.
SUMMARY:
E:\FR\FM\12JYN1.SGM
12JYN1
32300
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
Teleconference Number: 1–
888–790–3409, passcode: 3250534.
FOR FURTHER INFORMATION CONTACT: Erin
Stone, M.A., HICPAC, Division of
Healthcare Quality Promotion, NCEZID,
CDC, 1600 Clifton Road NE, Mailstop
A–31, Atlanta, Georgia 30333;
Telephone (404) 639–4045, Email:
[email protected].
SUPPLEMENTARY INFORMATION:
Purpose: The Committee is charged
with providing advice and guidance to
the Director, Division of Healthcare
Quality Promotion (DHQP), the Director,
National Center for Emerging and
Zoonotic Infectious Diseases (NCEZID),
the Director, CDC, the Secretary, Health
and Human Services regarding (1) the
practice of healthcare infection
prevention and control; (2) strategies for
surveillance, prevention, and control of
infections, antimicrobial resistance, and
related events in settings where
healthcare is provided; and (3) periodic
updating of CDC guidelines and other
policy statements regarding prevention
of healthcare-associated infections and
healthcare-related conditions.
Matters to be Considered: The agenda
will include discussions on updates
from the guidelines for infection
prevention in healthcare personnel
workgroup and the guidelines for
infection prevention in patients of
neonatal intensive care units
workgroup. Agenda items are subject to
change as priorities dictate.
The Director, Management Analysis
and Services Office, has been delegated
the authority to sign Federal Register
notices pertaining to announcements of
meetings and other committee
management activities, for both the
Centers for Disease Control and
Prevention and the Agency for Toxic
Substances and Disease Registry.
ADDRESSES:
Sherri A. Berger,
Chief Operating Officer, Centers for Disease
Control and Prevention.
[FR Doc. 2018–14930 Filed 7–11–18; 8:45 am]
BILLING CODE 4163–19–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
amozie on DSK3GDR082PROD with NOTICES1
Centers for Medicare & Medicaid
Services
Notice of Hearing: Reconsideration of
Disapproval Washington Medicaid
State Plan Amendment (SPA) 17–0027
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Notice of hearing:
Reconsideration of disapproval.
AGENCY:
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
This notice announces an
administrative hearing to be held on
August 9, 2018, at the Department of
Health and Human Services, Centers for
Medicare & Medicaid Services, Division
of Medicaid & Children’s Health, Seattle
Regional Office, 701 Fifth Avenue, Suite
1600, Seattle, WA 98104 to reconsider
CMS’ decision to disapprove
Washington’s Medicaid SPA 17–0027.
DATES: Closing Date: Requests to
participate in the hearing as a party
must be received by the presiding
officer by July 27, 2018.
FOR FURTHER INFORMATION CONTACT:
Benjamin R. Cohen, Presiding Officer,
CMS, 2520 Lord Baltimore Drive, Suite
L, Baltimore, Maryland 21244,
Telephone: (410) 786–3169.
SUPPLEMENTARY INFORMATION: This
notice announces an administrative
hearing to reconsider CMS’ decision to
disapprove Washington’s Medicaid state
plan amendment (SPA) 17–0027, which
was submitted to the Centers for
Medicare & Medicaid Services (CMS) on
August 22, 2017 and disapproved on
May 14, 2018. This SPA requested CMS
approval to add coverage and
reimbursement of services provided by
Dental Health Aide Therapists (DHATs)
under the Other Licensed Practitioner
(OLP) benefit. Specifically, SPA 17–
0027 proposed the coverage and
reimbursement of services provided by
DHATs only when furnished in a
practice setting within the boundaries of
a tribal reservation and only when
operated by an Indian health program,
and proposed to make coverage of
DHAT services available only to
members of a federally recognized tribe
or those otherwise eligible for services
under Indian Health Service criteria.
Washington would, therefore, not
permit Medicaid beneficiaries to receive
Medicaid coverage for DHAT services if
they are not members of a federally
recognized tribe or otherwise eligible for
services under Indian Health Service
criteria.
The issues to be considered at the
hearing are whether Washington SPA
17–0027 is inconsistent with the
requirements of:
• Section 1902(a)(23) of the Social
Security Act (the Act) because it would
restrict access to services provided by a
DHAT to a limited group of
beneficiaries, and it would also prevent
beneficiaries from receiving DHAT
services from similarly qualified dental
services providers that provide services
outside the boundaries of a tribal
reservation or that are not Indian health
programs.
• Section 1902(a)(10)(A) of the Act
because it was unclear whether DHATs
SUMMARY:
PO 00000
Frm 00041
Fmt 4703
Sfmt 4703
must be supervised by a licensed
professional consistent with the
requirements of the OLP benefit, and
because CMS was therefore unable to
determine whether DHAT services are
‘‘medical assistance’’ consistent with
1902(a)(10)(A) and 1905 of the Act.
Section 1116 of the Act and federal
regulations at 42 CFR part 430 establish
Department procedures that provide an
administrative hearing for
reconsideration of a disapproval of a
state plan or plan amendment. CMS is
required to publish in the Federal
Register a copy of the notice to a state
Medicaid agency that informs the
agency of the time and place of the
hearing, and the issues to be considered.
If we subsequently notify the state
Medicaid agency of additional issues
that will be considered at the hearing,
we will also publish that notice in the
Federal Register.
Any individual or group that wants to
participate in the hearing as a party
must petition the presiding officer
within 15 days after publication of this
notice, in accordance with the
requirements contained at 42 CFR
430.76(b)(2). Any interested person or
organization that wants to participate as
amicus curiae must petition the
presiding officer before the hearing
begins in accordance with the
requirements contained at 42 CFR
430.76(c). If the hearing is later
rescheduled, the presiding officer will
notify all participants.
The notice to Washington announcing
an administrative hearing to reconsider
the disapproval of its SPA reads as
follows:
Ms. MaryAnne Lindeblad
Director
State of Washington, Health Care Authority
626 8th Avenue PO Box 45502
Olympia, WA 98504–5050
Dear Ms. Lindeblad:
I am responding to your June 8, 2018
request for reconsideration of the decision to
disapprove Washington’s State Plan
amendment (SPA) 17–0027. Washington SPA
17–0027 was submitted to the Centers for
Medicare & Medicaid Services (CMS) on
August 22, 2017, and disapproved on May
14, 2018. I am scheduling a hearing on your
request for reconsideration to be held on
August 9, 2018, at the Department of Health
and Human Services, Centers for Medicare &
Medicaid Services, Division of Medicaid &
Children’s Health, Seattle Regional Office,
701 Fifth Avenue, Suite 1600, Seattle, WA
98104.
I am designating Mr. Benjamin R. Cohen as
the presiding officer. If these arrangements
present any problems, please contact Mr.
Cohen at (410) 786–3169. In order to
facilitate any communication that may be
necessary between the parties prior to the
hearing, please notify the presiding officer to
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
indicate acceptability of the hearing date that
has been scheduled and provide names of the
individuals who will represent the State at
the hearing. If the hearing date is not
acceptable, Mr. Cohen can set another date
mutually agreeable to the parties. The
hearing will be governed by the procedures
prescribed by federal regulations at 42 CFR
Part 430.
This SPA requested CMS approval to add
coverage and reimbursement of services
provided by Dental Health Aide Therapists
(DHATs) under the Other Licensed
Practitioner (OLP) benefit. Specifically, SPA
17–0027 proposed the coverage and
reimbursement of services provided by
DHATs only when furnished in a practice
setting within the boundaries of a tribal
reservation and only when operated by an
Indian health program, and proposed to make
coverage of DHAT services available only to
members of a federally recognized tribe or
those otherwise eligible for services under
Indian Health Service criteria. Washington
would, therefore, not permit Medicaid
beneficiaries to receive Medicaid coverage for
DHAT services if they are not members of a
federally recognized tribe or otherwise
eligible for services under Indian Health
Service criteria.
The issues to be considered at the hearing
are whether Washington SPA 17–0027 is
inconsistent with the requirements of:
• Section 1902(a)(23) of the Social Security
Act (the Act) because it would restrict access
to services provided by a DHAT to a limited
group of beneficiaries, and it would also
prevent beneficiaries from receiving DHAT
services from similarly qualified dental
services providers that provide services
outside the boundaries of a tribal reservation
or that are not Indian health programs.
• Section 1902(a)(10)(A) of the Act because
it was unclear whether DHATs must be
supervised by a licensed professional
consistent with the requirements of the OLP
benefit, and because CMS was therefore
unable to determine whether DHAT services
are ‘‘medical assistance’’ consistent with
1902(a)(10)(A) and 1905 of the Act.
In the event that CMS and the State come
to agreement on resolution of the issues
which formed the basis for disapproval, this
SPA may be moved to approval prior to the
scheduled hearing.
Sincerely,
Seema Verma
amozie on DSK3GDR082PROD with NOTICES1
Administrator
Section 1116 of the Social Security Act (42
U.S.C. section 1316; 42 CFR section 430.18)
(Catalog of Federal Domestic Assistance
program No. 13.714. Medicaid Assistance
Program.)
Dated: July 6, 2018.
Seema Verma,
Administrator, Centers for Medicare &
Medicaid Services.
[FR Doc. 2018–14876 Filed 7–6–18; 4:15 pm]
BILLING CODE 4120–01–P
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA–2018–N–2642]
Advisory Committee; Science Advisory
Board to the National Center for
Toxicological Research; Renewal
AGENCY:
Food and Drug Administration,
HHS.
Notice; renewal of advisory
committee.
ACTION:
The Food and Drug
Administration (FDA) is announcing the
renewal of the Science Advisory Board
(the Board) to the National Center for
Toxicological Research (NCTR) by the
Commissioner of Food and Drugs (the
Commissioner). The Commissioner has
determined that it is in the public
interest to renew the Board to the NCTR
for an additional 2 years beyond the
charter expiration date. The new charter
will be in effect until June 2, 2020.
DATES: Authority for the Board to the
NCTR expired on June 2, 2018;
however, the Commissioner formally
determined that renewal is in the public
interest.
FOR FURTHER INFORMATION CONTACT:
Donna L. Mendrick, National Center for
Toxicological Research, Food and Drug
Administration, 10903 New Hampshire
Ave., Bldg. 32, Rm. 2208, Silver Spring,
MD 20993–0002, 301–796–8892,
[email protected].
SUPPLEMENTARY INFORMATION: Pursuant
to 41 CFR 102–3.65 and approval by the
Department of Health and Human
Services pursuant to 45 CFR part 11 and
by the General Services Administration,
FDA is announcing the renewal of the
Board to the NCTR. The Board is a
discretionary Federal advisory
committee established to provide advice
to the Commissioner. The Board to the
NCTR advises the Commissioner or
designee in discharging responsibilities
as they relate to helping to ensure safe
and effective drugs for human use and,
as required, any other product for which
FDA has regulatory responsibility. The
Board advises the NCTR Director in
establishing, implementing, and
evaluating the research programs that
assist the Commissioner in fulfilling
regulatory responsibilities. The Board
provides an extra-agency review in
ensuring that the research programs at
NCTR are scientifically sound and
pertinent.
The Board shall consist of a core of
nine voting members including the
Chair. Members and the Chair are
selected by the Commissioner or
SUMMARY:
PO 00000
Frm 00042
Fmt 4703
Sfmt 4703
32301
designee from among authorities
knowledgeable in the fields of
toxicological research. Members will be
invited to serve for overlapping terms of
up to 4 years. Almost all non-Federal
members of this Board serve as Special
Government Employees. The core of
voting members may include one
technically qualified member, selected
by the Commissioner or designee, who
is identified with consumer interests
and is recommended by either a
consortium of consumer-oriented
organizations or other interested
persons.
Further information regarding the
most recent charter and other
information can be found at https://
www.fda.gov/AdvisoryCommittees/
CommitteesMeetingMaterials/
ToxicologicalResearch/ucm148166.htm
or by contacting the Designated Federal
Officer (see FOR FURTHER INFORMATION
CONTACT). In light of the fact that no
change has been made to the committee
name or description of duties, no
amendment will be made to 21 CFR
14.100.
This document is issued under the
Federal Advisory Committee Act (5
U.S.C. app.). For general information
related to FDA advisory committees,
please check https://www.fda.gov/
AdvisoryCommittees/default.htm.
Dated: July 9, 2018.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2018–14943 Filed 7–11–18; 8:45 am]
BILLING CODE 4164–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA–2018–N–2565]
Advisory Committee;
Psychopharmacologic Drugs Advisory
Committee; Renewal
AGENCY:
Food and Drug Administration,
HHS.
Notice; renewal of advisory
committee.
ACTION:
The Food and Drug
Administration (FDA) is announcing the
renewal of the Psychopharmacologic
Drugs Advisory Committee by the
Commissioner of Food and Drugs (the
Commissioner). The Commissioner has
determined that it is in the public
interest to renew the
Psychopharmacologic Drugs Advisory
Committee for an additional 2 years
beyond the charter expiration date. The
new charter will be in effect until June
4, 2020.
SUMMARY:
E:\FR\FM\12JYN1.SGM
12JYN1
32302
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
Authority for the
Psychopharmacologic Drugs Advisory
Committee will expire on June 4, 2020,
unless the Commissioner formally
determines that renewal is in the public
interest.
FOR FURTHER INFORMATION CONTACT:
Kalyani Bhatt, Center for Drug
Evaluation and Research, Food and
Drug Administration, 10903 New
Hampshire Ave., Bldg. 31, Rm. 2417,
Silver Spring, MD 20993–0002, 301–
796–9001, email: [email protected].
SUPPLEMENTARY INFORMATION: Pursuant
to 41 CFR 102–3.65 and approval by the
Department of Health and Human
Services pursuant to 45 CFR part 11 and
by the General Services Administration,
FDA is announcing the renewal of the
Psychopharmacologic Drugs Advisory
Committee (the Committee). The
Committee is a discretionary Federal
advisory committee established to
provide advice to the Commissioner.
The Committee advises the
Commissioner or designee in
discharging responsibilities as they
relate to helping to ensure safe and
effective drugs for human use and, as
required, any other product for which
FDA has regulatory responsibility.
The Committee reviews and evaluates
data concerning the safety and
effectiveness of marketed and
investigational human drug products for
use in the practice of psychiatry and
related fields and makes appropriate
recommendations to the Commissioner.
The Committee shall consist of a core
of nine voting members including the
Chair. Members and the Chair are
selected by the Commissioner or
designee from among authorities
knowledgeable in the fields of
psychopharmacology, psychiatry,
epidemiology or statistics, and related
specialties. Members will be invited to
serve for overlapping terms of up to 4
years. Almost all non-Federal members
of this committee serve as Special
Government Employees. The core of
voting members may include one
technically qualified member, selected
by the Commissioner or designee, who
is identified with consumer interests
and is recommended by either a
consortium of consumer-oriented
organizations or other interested
persons. In addition to the voting
members, the Committee may include
one non-voting member who is
identified with industry interests.
Further information regarding the
most recent charter and other
information can be found at https://
www.fda.gov/AdvisoryCommittees/
CommitteesMeetingMaterials/Drugs/
PsychopharmacologicDrugs
amozie on DSK3GDR082PROD with NOTICES1
DATES:
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
AdvisoryCommittee/default.htm or by
contacting the Designated Federal
Officer (see FOR FURTHER INFORMATION
CONTACT). In light of the fact that no
change has been made to the committee
name or description of duties, no
amendment will be made to 21 CFR
14.100.
This document is issued under the
Federal Advisory Committee Act (5
U.S.C. app.). For general information
related to FDA advisory committees,
please check https://www.fda.gov/
AdvisoryCommittees/default.htm.
Dated: July 9, 2018.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2018–14934 Filed 7–11–18; 8:45 am]
BILLING CODE 4164–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA–2018–D–2236]
Human Gene Therapy for Retinal
Disorders; Draft Guidance for Industry;
Availability
AGENCY:
Food and Drug Administration,
HHS.
ACTION:
Notice of availability.
The Food and Drug
Administration (FDA or Agency) is
announcing the availability of a draft
document entitled ‘‘Human Gene
Therapy for Retinal Disorders; Draft
Guidance for Industry.’’ The draft
guidance provides recommendations to
stakeholders developing human gene
therapy (GT) products for retinal
disorders affecting adult and pediatric
patients. The draft guidance focuses on
issues specific to GT products for retinal
disorders and provides
recommendations related to product
development, preclinical testing, and
clinical trial design for such GT
products.
SUMMARY:
Submit either electronic or
written comments on the draft guidance
by October 10, 2018 to ensure that the
Agency considers your comment on this
draft guidance before it begins work on
the final version of the guidance.
ADDRESSES: You may submit comments
on any guidance at any time as follows:
DATES:
Electronic Submissions
Submit electronic comments in the
following way:
• Federal eRulemaking Portal:
https://www.regulations.gov. Follow the
instructions for submitting comments.
Comments submitted electronically,
PO 00000
Frm 00043
Fmt 4703
Sfmt 4703
including attachments, to https://
www.regulations.gov will be posted to
the docket unchanged. Because your
comment will be made public, you are
solely responsible for ensuring that your
comment does not include any
confidential information that you or a
third party may not wish to be posted,
such as medical information, your or
anyone else’s Social Security number, or
confidential business information, such
as a manufacturing process. Please note
that if you include your name, contact
information, or other information that
identifies you in the body of your
comments, that information will be
posted on https://www.regulations.gov.
• If you want to submit a comment
with confidential information that you
do not wish to be made available to the
public, submit the comment as a
written/paper submission and in the
manner detailed (see ‘‘Written/Paper
Submissions’’ and ‘‘Instructions’’).
Written/Paper Submissions
Submit written/paper submissions as
follows:
• Mail/Hand Delivery/Courier (for
Written/Paper Submissions): Dockets
Management Staff (HFA–305), Food and
Drug Administration, 5630 Fishers
Lane, Rm. 1061, Rockville, MD 20852.
• For written/paper comments
submitted to the Dockets Management
Staff, FDA will post your comment, as
well as any attachments, except for
information submitted, marked and
identified, as confidential, if submitted
as detailed in ‘‘Instructions.’’
Instructions: All submissions received
must include the Docket No. FDA–
2018–D–2236 for ‘‘Human Gene
Therapy for Retinal Disorders; Draft
Guidance for Industry.’’ Received
comments will be placed in the docket
and, except for those submitted as
‘‘Confidential Submissions,’’ publicly
viewable at https://www.regulations.gov
or at the Dockets Management Staff
between 9 a.m. and 4 p.m., Monday
through Friday.
• Confidential Submissions—To
submit a comment with confidential
information that you do not wish to be
made publicly available, submit your
comments only as a written/paper
submission. You should submit two
copies total. One copy will include the
information you claim to be confidential
with a heading or cover note that states
‘‘THIS DOCUMENT CONTAINS
CONFIDENTIAL INFORMATION.’’ The
Agency will review this copy, including
the claimed confidential information, in
its consideration of comments. The
second copy, which will have the
claimed confidential information
redacted/blacked out, will be available
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
for public viewing and posted on
https://www.regulations.gov. Submit
both copies to the Dockets Management
Staff. If you do not wish your name and
contact information to be made publicly
available, you can provide this
information on the cover sheet and not
in the body of your comments and you
must identify this information as
‘‘confidential.’’ Any information marked
as ‘‘confidential’’ will not be disclosed
except in accordance with 21 CFR 10.20
and other applicable disclosure law. For
more information about FDA’s posting
of comments to public dockets, see 80
FR 56469, September 18, 2015, or access
the information at: https://www.gpo.gov/
fdsys/pkg/FR-2015-09-18/pdf/201523389.pdf.
Docket: For access to the docket to
read background documents or the
electronic and written/paper comments
received, go to https://
www.regulations.gov and insert the
docket number, found in brackets in the
heading of this document, into the
‘‘Search’’ box and follow the prompts
and/or go to the Dockets Management
Staff, 5630 Fishers Lane, Rm. 1061,
Rockville, MD 20852.
You may submit comments on any
guidance at any time (see 21 CFR
10.115(g)(5)).
Submit written requests for single
copies of the draft guidance to the Office
of Communication, Outreach and
Development, Center for Biologics
Evaluation and Research (CBER), Food
and Drug Administration, 10903 New
Hampshire Ave., Bldg. 71, Rm. 3128,
Silver Spring, MD 20993–0002. Send
one self-addressed adhesive label to
assist the office in processing your
requests. The draft guidance may also be
obtained by mail by calling CBER at 1–
800–835–4709 or 240–402–8010. See
the SUPPLEMENTARY INFORMATION section
for electronic access to the draft
guidance document.
FOR FURTHER INFORMATION CONTACT:
Angela Moy, Center for Biologics
Evaluation and Research, Food and
Drug Administration, 10903 New
Hampshire Ave., Bldg. 71, Rm. 7301,
Silver Spring, MD 20993–0002, 240–
402–7911.
SUPPLEMENTARY INFORMATION:
amozie on DSK3GDR082PROD with NOTICES1
I. Background
FDA is announcing the availability of
a draft document entitled ‘‘Human Gene
Therapy for Retinal Disorders; Draft
Guidance for Industry.’’ The draft
guidance provides recommendations to
stakeholders developing GT products
for retinal disorders affecting adult and
pediatric patients. These disorders vary
in etiology, prevalence, diagnosis, and
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
management, and include genetic as
well as age-related diseases. These
disorders manifest with central or
peripheral visual impairment and often
with progressive visual loss. The draft
guidance focuses on issues specific to
GT products for retinal disorders and
provides recommendations related to
product development, preclinical
testing, and clinical trial design for such
GT products.
Elsewhere in this issue of the Federal
Register, FDA is announcing the
availability of two other human gene
therapy draft guidance documents
entitled ‘‘Human Gene Therapy for
Hemophilia; Draft Guidance for
Industry’’ and ‘‘Human Gene Therapy
for Rare Diseases; Draft Guidance for
Industry.’’
This draft guidance is being issued
consistent with FDA’s good guidance
practices regulation (21 CFR 10.115).
The draft guidance, when finalized, will
represent the current thinking of FDA
on ‘‘Human Gene Therapy for Retinal
Disorders.’’ It does not establish any
rights for any person and is not binding
on FDA or the public. You can use an
alternative approach if it satisfies the
requirements of the applicable statutes
and regulations. This guidance is not
subject to Executive Order 12866.
II. Paperwork Reduction Act of 1995
This draft guidance refers to
previously approved collections of
information subject to review by the
Office of Management and Budget
(OMB) under the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501–3520). The
collections of information in 21 CFR
part 50 have been approved under OMB
control number 0910–0755; the
collections of information in 21 CFR
part 58 have been approved under OMB
control number 0910–0119; the
collections of information in 21 CFR
part 211 have been approved under
OMB control number 0910–0139; the
collections of information in 21 CFR
part 312 have been approved under
OMB control number 0910–0014; the
collections of information in 21 CFR
part 601 have been approved under
OMB control number 0910–0338; the
collections of information in the
guidance entitled ‘‘Expedited Programs
for Serious Conditions—Drugs and
Biologics’’ have been approved under
OMB control number 0910–0765; and
the collections of information in the
guidance entitled ‘‘Formal Meetings
Between the FDA and Sponsors or
Applicants’’ have been approved under
OMB control number 0910–0429.
PO 00000
Frm 00044
Fmt 4703
Sfmt 4703
32303
III. Electronic Access
Persons with access to the internet
may obtain the draft guidance at either
https://www.fda.gov/BiologicsBlood
Vaccines/GuidanceCompliance
RegulatoryInformation/Guidances/
default.htm or https://
www.regulations.gov.
Dated: July 5, 2018.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2018–14870 Filed 7–11–18; 8:45 am]
BILLING CODE 4164–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA–2018–D–2258]
Human Gene Therapy for Rare
Diseases; Draft Guidance for Industry;
Availability
AGENCY:
Food and Drug Administration,
HHS.
ACTION:
Notice of availability.
The Food and Drug
Administration (FDA or Agency) is
announcing the availability of a draft
document entitled ‘‘Human Gene
Therapy for Rare Diseases; Draft
Guidance for Industry.’’ The draft
guidance document provides
recommendations to stakeholders
developing a human gene therapy (GT)
product intended to treat a rare disease
in adult and/or pediatric patients
regarding the manufacturing,
preclinical, and clinical trial design
issues for all phases of the clinical
development program. Such
information is intended to assist
sponsors in designing clinical
development programs for such
products, where there may be limited
study population size and potential
feasibility and safety issues as well as
issues relating to the interpretability of
bioactivity/efficacy outcomes that may
be unique to rare diseases or to the
nature of the GT product itself.
DATES: Submit either electronic or
written comments on the draft guidance
by October 10, 2018 to ensure that the
Agency considers your comment on this
draft guidance before it begins work on
the final version of the guidance.
ADDRESSES: You may submit comments
on any guidance at any time as follows:
SUMMARY:
Electronic Submissions
Submit electronic comments in the
following way:
• Federal eRulemaking Portal:
https://www.regulations.gov. Follow the
E:\FR\FM\12JYN1.SGM
12JYN1
32304
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
amozie on DSK3GDR082PROD with NOTICES1
instructions for submitting comments.
Comments submitted electronically,
including attachments, to https://
www.regulations.gov will be posted to
the docket unchanged. Because your
comment will be made public, you are
solely responsible for ensuring that your
comment does not include any
confidential information that you or a
third party may not wish to be posted,
such as medical information, your or
anyone else’s Social Security number, or
confidential business information, such
as a manufacturing process. Please note
that if you include your name, contact
information, or other information that
identifies you in the body of your
comments, that information will be
posted on https://www.regulations.gov.
• If you want to submit a comment
with confidential information that you
do not wish to be made available to the
public, submit the comment as a
written/paper submission and in the
manner detailed (see ‘‘Written/Paper
Submissions’’ and ‘‘Instructions’’).
Written/Paper Submissions
Submit written/paper submissions as
follows:
• Mail/Hand Delivery/Courier (for
Written/Paper Submissions): Dockets
Management Staff (HFA–305), Food and
Drug Administration, 5630 Fishers
Lane, Rm. 1061, Rockville, MD 20852.
• For written/paper comments
submitted to the Dockets Management
Staff, FDA will post your comment as
well as any attachments, except for
information submitted, marked, and
identified as confidential, if submitted
as detailed in ‘‘Instructions.’’
Instructions: All submissions received
must include the Docket No. FDA–
2018–D–2258 for ‘‘Human Gene
Therapy for Rare Diseases; Draft
Guidance for Industry.’’ Received
comments will be placed in the docket
and, except for those submitted as
‘‘Confidential Submissions,’’ publicly
viewable at https://www.regulations.gov
or at the Dockets Management Staff
between 9 a.m. and 4 p.m., Monday
through Friday.
• Confidential Submissions—To
submit a comment with confidential
information that you do not wish to be
made publicly available, submit your
comments only as a written/paper
submission. You should submit two
copies, total. One copy will include the
information you claim to be confidential
with a heading or cover note that states
‘‘THIS DOCUMENT CONTAINS
CONFIDENTIAL INFORMATION.’’ The
Agency will review this copy, including
the claimed confidential information, in
its consideration of comments. The
second copy, which will have the
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
claimed confidential information
redacted/blacked out, will be available
for public viewing and posted on
https://www.regulations.gov. Submit
both copies to the Dockets Management
Staff. If you do not wish your name and
contact information to be made publicly
available, you can provide this
information on the cover sheet and not
in the body of your comments, and you
must identify this information as
‘‘confidential.’’ Any information marked
as ‘‘confidential’’ will not be disclosed
except in accordance with 21 CFR 10.20
and other applicable disclosure law. For
more information about FDA’s posting
of comments to public dockets, see 80
FR 56469, September 18, 2015, or access
the information at: https://www.gpo.gov/
fdsys/pkg/FR-2015-09-18/pdf/201523389.pdf.
Docket: For access to the docket to
read background documents or the
electronic and written/paper comments
received, go to https://
www.regulations.gov and insert the
docket number, found in brackets in the
heading of this document, into the
‘‘Search’’ box and follow the prompts
and/or go to the Dockets Management
Staff, 5630 Fishers Lane, Rm. 1061,
Rockville, MD 20852.
You may submit comments on any
guidance at any time (see 21 CFR
10.115(g)(5)).
Submit written requests for single
copies of the draft guidance to the Office
of Communication, Outreach and
Development, Center for Biologics
Evaluation and Research (CBER), Food
and Drug Administration, 10903 New
Hampshire Ave., Bldg. 71, Rm. 3128,
Silver Spring, MD 20993–0002. Send
one self-addressed adhesive label to
assist the office in processing your
requests. The draft guidance may also be
obtained by mail by calling CBER at 1–
800–835–4709 or 240–402–8010. See
the SUPPLEMENTARY INFORMATION section
for electronic access to the draft
guidance document.
FOR FURTHER INFORMATION CONTACT:
Jonathan McKnight, Center for Biologics
Evaluation and Research, Food and
Drug Administration, 10903 New
Hampshire Ave., Bldg. 71, Rm. 7301,
Silver Spring, MD 20993–0002, 240–
402–7911.
SUPPLEMENTARY INFORMATION:
I. Background
The Orphan Drug Act of 1983 (Pub. L.
97–414) defines a rare disease as a
disease or condition that affects fewer
than 200,000 persons in the United
States. Since most rare diseases have no
approved therapies, there is a significant
unmet need for effective treatments.
PO 00000
Frm 00045
Fmt 4703
Sfmt 4703
However, developing safe and effective
products to treat rare diseases can be
challenging. For example, it may be
more difficult to find and recruit such
patients into clinical trials, and many
rare diseases exhibit a number of
variations or subtypes. Consequently,
patients may have highly diverse
clinical manifestations and rates of
disease progression with unpredictable
clinical courses. Despite these
challenges, GT-related research and
development continue to grow at a rapid
rate, with several products advancing in
clinical development.
FDA is announcing the availability of
a document entitled ‘‘Human Gene
Therapy for Rare Diseases; Draft
Guidance for Industry.’’ The draft
guidance provides recommendations to
stakeholders developing a GT product
intended to treat a rare disease in adult
and/or pediatric patients regarding the
manufacturing, preclinical, and clinical
trial design issues for all phases of the
clinical development program. Such
information is intended to assist
sponsors in designing clinical
development programs for such
products, where there may be limited
study population size and potential
feasibility and safety issues as well as
issues relating to the interpretability of
bioactivity/efficacy outcomes that may
be unique to rare diseases or to the
nature of the GT product itself.
Elsewhere in this issue of the Federal
Register, FDA is announcing the
availability of two other human gene
therapy draft guidance documents
entitled ‘‘Human Gene Therapy for
Hemophilia; Draft Guidance for
Industry’’ and ‘‘Human Gene Therapy
for Retinal Disorders; Draft Guidance for
Industry.’’
This draft guidance is being issued
consistent with FDA’s good guidance
practices regulation (21 CFR 10.115).
The draft guidance, when finalized, will
represent the current thinking of FDA
on ‘‘Human Gene Therapy for Rare
Diseases.’’ It does not establish any
rights for any person and is not binding
on FDA or the public. You can use an
alternative approach if it satisfies the
requirements of the applicable statutes
and regulations. This guidance is not
subject to Executive Order 12866.
II. Paperwork Reduction Act of 1995
This draft guidance refers to
previously approved collections of
information subject to review by the
Office of Management and Budget
(OMB) under the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501–3520). The
collections of information in 21 CFR
part 50 have been approved under OMB
control number 0910–0755; the
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
collections of information in 21 CFR
part 58 have been approved under OMB
control number 0910–0119; the
collections of information in 21 CFR
part 312 have been approved under
OMB control number 0910–0014; the
collections of information in 21 CFR
part 601 have been approved under
OMB control number 0910–0338; the
collections of information in the
guidance entitled ‘‘Expedited Programs
for Serious Conditions—Drugs and
Biologics’’ have been approved under
OMB control number 0910–0765; and
the collections of information in the
guidance entitled ‘‘Formal Meetings
Between the FDA and Sponsors or
Applicants’’ have been approved under
OMB control number 0910–0429.
Dated: July 5, 2018.
Leslie Kux,
Associate Commissioner for Policy.
III. Electronic Access
Persons with access to the internet
may obtain the draft guidance at either
https://www.fda.gov/BiologicsBlood
Vaccines/GuidanceCompliance
RegulatoryInformation/Guidances/
default.htm or https://
www.regulations.gov.
ACTION:
BILLING CODE 4164–01–P
longer marketed and requested that the
approval of the applications be
withdrawn.
Approval is withdrawn as of
August 13, 2018.
DATES:
FOR FURTHER INFORMATION CONTACT:
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA–2018–N–2180]
Concordia Pharmaceuticals, Inc., et al.;
Withdrawal of Approval of 29 New
Drug Applications
AGENCY:
Food and Drug Administration,
HHS.
Notice.
The Food and Drug
Administration (FDA or Agency) is
withdrawing approval of 29 new drug
applications (NDAs) from multiple
applicants. The holders of the
applications notified the Agency in
writing that the drug products were no
SUMMARY:
Florine P. Purdie, Center for Drug
Evaluation and Research, Food and
Drug Administration, 10903 New
Hampshire Ave., Bldg. 51, Rm. 6248,
Silver Spring, MD 20993–0002, 301–
796–3601.
The
holders of the applications listed in the
table have informed FDA that these drug
products are no longer marketed and
have requested that FDA withdraw
approval of the applications under the
process in § 314.150(c) (21 CFR
314.150(c)). The applicants have also,
by their requests, waived their
opportunity for a hearing. Withdrawal
of approval of an application or
abbreviated application under
§ 314.150(c) is without prejudice to
refiling.
SUPPLEMENTARY INFORMATION:
Application No.
Drug
Applicant
NDA 011287 .........
NDA 016211 .........
Kayexalate (sodium polystyrene sulfonate) Powder for Suspension,
453.6 gram (g)/bottle.
Librium (chlordiazepoxide hydrochloride (HCl)) Capsules, 5 milligram
(mg), 10 mg, and 25 mg.
Miochol (acetylcholine chloride) for Ophthalmic Solution, 20 mg/vial ....
NDA 018674 .........
NDA 018852 .........
Metro I.V. (metronidazole) Injection, 500 mg/100 milliliter (mL) .............
Sulfamethoxazole and Trimethoprim Tablets USP, 400 mg; 80 mg ......
NDA 018854 .........
NDA 018988 .........
NDA 019844 .........
NDA 019870 .........
NDA 019964 .........
Sulfamethoxazole and Trimethoprim Tablets USP, 800 mg; 160 mg ....
Vasocidin (prednisolone sodium phosphate and sulfacetamide sodium)
Ophthalmic Solution, equivalent to (EQ) 0.23% phosphate/10%.
Isolyte H in Dextrose 5% in Plastic Container Injection .........................
Isolyte M in Dextrose 5% in Plastic Container Injection .........................
Terazol 3 (terconazole) Vaginal Cream, 0.8% ........................................
Concordia Pharmaceuticals, Inc., c/o Mapi USA, Inc., 2343 Alexandria
Dr., Lexington, KY 40504.
Valeant Pharmaceuticals North America, LLC, 400 Somerset Corporate Blvd., Bridgewater, NJ 08807.
Novartis Pharmaceuticals Corp., One Health Pl., East Hanover, NJ
07936.
B. Braun Medical, Inc., 901 Marcon Blvd., Allentown, PA 18109.
Watson Laboratories, Inc., Subsidiary of Teva Pharmaceuticals USA,
Inc., 425 Privet Rd., Horsham, PA 19044.
Do.
Novartis Pharmaceuticals Corp.
NDA 020000 .........
NDA 020393 .........
Dextrose 5% in Ringer’s in Plastic Container Injection ..........................
Atrovent (ipratropium bromide) Nasal Spray, 0.021 mg/spray ...............
NDA 020394 .........
NDA 021180 .........
Atrovent (ipratropium bromide) Nasal Spray, 0.042 mg/spray ...............
Ortho Evra (ethinyl estradiol; norelgestromin) Transdermal Patch,
0.035 mg/24 h; 0.15 mg/24 h.
Femtrace (estradiol acetate) Tablets, 0.45 mg, 0.9 mg, and 1.8 mg .....
NDA 012249 .........
NDA 021633 .........
NDA 022033 .........
NDA 022106 .........
NDA 022386 .........
NDA 050201 .........
NDA 050344 .........
NDA 050442 .........
NDA 050497 .........
amozie on DSK3GDR082PROD with NOTICES1
[FR Doc. 2018–14871 Filed 7–11–18; 8:45 am]
32305
NDA 050512 .........
NDA 050527 .........
NDA 050593 .........
NDA 050646 .........
NDA 050668 .........
NDA 050792 .........
VerDate Sep<11>2014
Luvox CR (fluvoxamine maleate) Extended-Release Capsules, 100 mg
and 150 mg.
Doribax (doripenem) for Injection, 250 mg/vial and 500 mg/vial ............
PrandiMet (metformin HCl; repaglinide) Tablets, 500mg; 1 mg and 500
mg; 2 mg.
Ophthocort (chloramphenicol, hydrocortisone acetate, polymyxin B sulfate) Ophthalmic Ointment USP, 10 mg/g; 5 mg/g; 10,000 units/g.
Statrol (neomycin sulfate; polymyxin B sulfate) Ophthalmic Ointment,
EQ 3.5 mg base/g; 10,000 units/g.
Vibramycin (doxycycline hyclate) Injection, EQ to 200 mg base/vial
and EQ 100 mg base/vial.
Ticar (ticarcillin disodium) Injection, EQ 1 g base/vial, EQ 3 g base/
vial, EQ 6 g base/vial, EQ 20 g base/vial, and EQ 30 g base/vial.
Duricef (cefadroxil monohydrate) USP Capsules, EQ 500 mg base and
EQ 250 mg base.
Duricef (cefadroxil monohydrate) USP For Oral Suspension, EQ 125
mg base/5 mL, EQ 250 mg base/5 mL, and EQ 500 mg base/5 mL.
Eryc Sprinkles (erythromycin) Capsules, 125 mg ...................................
Ceptaz (ceftazidime) Injection, 500 mg/vial, 1 g/vial, 2 g/vial, and 10 g/
vial.
Lorabid (loracarbef) Capsules USP, 200 mg and 400 mg .....................
Cefotaxime and Dextrose 2.4% in Plastic Container, EQ 2 g base, and
Cefotaxime and Dextrose 3.9% in Plastic Container, EQ 1 g base.
17:21 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00046
Fmt 4703
Sfmt 4703
B. Braun Medical, Inc.
Do.
Janssen Pharmaceuticals, Inc., 1125 Trenton-Harbourton Rd.,
Titusville, NJ 08560.
B. Braun Medical, Inc.
Boehringer Ingelheim Pharmaceuticals, Inc., 900 Ridgebury Rd., P.O.
Box 368, Ridgefield, CT 06877–0368.
Do.
Janssen Pharmaceuticals, Inc., 1000 U.S. Route 202, P.O. Box 300,
Raritan, NJ 08869–0602.
Allergan Pharmaceuticals International, Ltd., c/o Allergan Sales, LLC,
2525 Dupont Dr., Irvine, CA 92612.
Jazz Pharmaceuticals, Inc., 3180 Porter Dr., Palo Alto, CA 94304.
Shionogi, Inc., 300 Campus Dr., Florham Park, NJ 07932.
Novo Nordisk, Inc., P.O. Box 846, Plainsboro, NJ 08536.
Parkedale Pharmaceuticals, Subsidiary of Pfizer Inc., 235 East 42nd
St., New York, NY 10017.
Alcon Laboratories, Inc., 6201 South Freeway, TC–45, Fort Worth, TX
76134.
Pfizer, Inc., 235 East 42nd St., New York, NY 10017.
GlaxoSmithKline, 1250 Collegeville Rd., Collegeville, PA 19426.
Warner Chilcott Co., LLC, 100 Enterprise Dr., Rockaway, NJ 07866.
Do.
Hospira Inc., 275 North Field Dr., Lake Forest, IL 60045.
GlaxoSmithKline.
King Pharmaceuticals, Inc., 501 Fifth St., Bristol, TN 37620.
B. Braun Medical, Inc.
E:\FR\FM\12JYN1.SGM
12JYN1
32306
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
Application No.
Drug
NDA 050807 .........
Epirubicin HCl for Injection, 50 mg/vial, 200 mg/vial ..............................
Therefore, approval of the
applications listed in the table, and all
amendments and supplements thereto,
is hereby withdrawn as of August 13,
2018. Introduction or delivery for
introduction into interstate commerce of
products without approved new drug
applications violates section 301(a) and
(d) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 331(a) and (d)).
Drug products that are listed in the table
that are in inventory on August 13, 2018
may continue to be dispensed until the
inventories have been depleted or the
drug products have reached their
expiration dates or otherwise become
violative, whichever occurs first.
Dated: July 9, 2018.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2018–14935 Filed 7–11–18; 8:45 am]
BILLING CODE 4164–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA 2018–D–2238]
Human Gene Therapy for Hemophilia;
Draft Guidance for Industry;
Availability
AGENCY:
Food and Drug Administration,
HHS.
amozie on DSK3GDR082PROD with NOTICES1
ACTION:
Notice of availability.
Applicant
Hospira, Inc.
Agency considers your comment on this
draft guidance before it begins work on
the final version of the guidance.
ADDRESSES: You may submit comments
on any guidance at any time as follows:
Electronic Submissions
Submit electronic comments in the
following way:
• Federal eRulemaking Portal:
https://www.regulations.gov. Follow the
instructions for submitting comments.
Comments submitted electronically,
including attachments, to https://
www.regulations.gov will be posted to
the docket unchanged. Because your
comment will be made public, you are
solely responsible for ensuring that your
comment does not include any
confidential information that you or a
third party may not wish to be posted,
such as medical information, your or
anyone else’s Social Security number, or
confidential business information, such
as a manufacturing process. Please note
that if you include your name, contact
information, or other information that
identifies you in the body of your
comments, that information will be
posted on https://www.regulations.gov.
• If you want to submit a comment
with confidential information that you
do not wish to be made available to the
public, submit the comment as a
written/paper submission and in the
manner detailed (see ‘‘Written/Paper
Submissions’’ and ‘‘Instructions’’).
SUMMARY:
Written/Paper Submissions
Submit either electronic or
written comments on the draft guidance
by October 10, 2018 to ensure that the
Submit written/paper submissions as
follows:
• Mail/Hand Delivery/Courier (for
Written/Paper Submissions): Dockets
Management Staff (HFA–305), Food and
Drug Administration, 5630 Fishers
Lane, Rm. 1061, Rockville, MD 20852.
• For written/paper comments
submitted to the Dockets Management
Staff, FDA will post your comment as
well as any attachments, except for
information submitted, marked, and
identified as confidential, if submitted
as detailed in ‘‘Instructions.’’
Instructions: All submissions received
must include the Docket No. FDA 2018–
D–2238 for ‘‘Human Gene Therapy for
Hemophilia; Draft Guidance for
Industry.’’ Received comments will be
placed in the docket and, except for
those submitted as ‘‘Confidential
Submissions,’’ publicly viewable at
https://www.regulations.gov or at the
Dockets Management Staff between 9
The Food and Drug
Administration (FDA or Agency) is
announcing the availability of a draft
document entitled ‘‘Human Gene
Therapy for Hemophilia; Draft Guidance
for Industry.’’ The draft guidance
document provides recommendations to
stakeholders developing human gene
therapy (GT) products for the treatment
of hemophilia. The draft guidance
provides recommendations on the
clinical trial design and related
development of coagulation factor VIII
(hemophilia A) and IX (hemophilia B)
activity assays, including how to
address discrepancies in factor VIII and
factor IX activity assays. The draft
guidance also includes
recommendations regarding preclinical
considerations to support development
of GT products for the treatment of
hemophilia.
DATES:
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00047
Fmt 4703
Sfmt 4703
a.m. and 4 p.m., Monday through
Friday.
• Confidential Submissions—To
submit a comment with confidential
information that you do not wish to be
made publicly available, submit your
comments only as a written/paper
submission. You should submit two
copies, total. One copy will include the
information you claim to be confidential
with a heading or cover note that states
‘‘THIS DOCUMENT CONTAINS
CONFIDENTIAL INFORMATION.’’ The
Agency will review this copy, including
the claimed confidential information, in
its consideration of comments. The
second copy, which will have the
claimed confidential information
redacted/blacked out, will be available
for public viewing and posted on
https://www.regulations.gov. Submit
both copies to the Dockets Management
Staff. If you do not wish your name and
contact information to be made publicly
available, you can provide this
information on the cover sheet and not
in the body of your comments, and you
must identify this information as
‘‘confidential.’’ Any information marked
as ‘‘confidential’’ will not be disclosed
except in accordance with 21 CFR 10.20
and other applicable disclosure law. For
more information about FDA’s posting
of comments to public dockets, see 80
FR 56469, September 18, 2015, or access
the information at: https://www.gpo.gov/
fdsys/pkg/FR-2015-09-18/pdf/201523389.pdf.
Docket: For access to the docket to
read background documents or the
electronic and written/paper comments
received, go to https://
www.regulations.gov and insert the
docket number, found in brackets in the
heading of this document, into the
‘‘Search’’ box and follow the prompts
and/or go to the Dockets Management
Staff, 5630 Fishers Lane, Rm. 1061,
Rockville, MD 20852.
You may submit comments on any
guidance at any time (see 21 CFR
10.115(g)(5)).
Submit written requests for single
copies of the draft guidance to the Office
of Communication, Outreach and
Development, Center for Biologics
Evaluation and Research (CBER), Food
and Drug Administration, 10903 New
Hampshire Ave., Bldg. 71, Rm. 3128,
Silver Spring, MD 20993–0002. Send
one self-addressed adhesive label to
assist the office in processing your
requests. The draft guidance may also be
obtained by mail by calling CBER at 1–
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
800–835–4709 or 240–402–8010. See
the SUPPLEMENTARY INFORMATION section
for electronic access to the draft
guidance document.
FOR FURTHER INFORMATION CONTACT:
Jessica Walker Udechukwu, Center for
Biologics Evaluation and Research,
Food and Drug Administration, 10903
New Hampshire Ave., Bldg. 71, Rm.
7301, Silver Spring, MD 20993–0002,
240–402–7911.
SUPPLEMENTARY INFORMATION:
amozie on DSK3GDR082PROD with NOTICES1
I. Background
FDA is announcing the availability of
a draft document entitled ‘‘Human Gene
Therapy for Hemophilia; Draft Guidance
for Industry.’’ The draft guidance
document provides recommendations to
stakeholders developing GT products
for the treatment of hemophilia. The
draft guidance provides
recommendations on the clinical trial
design and related development of
coagulation factor VIII (hemophilia A)
and IX (hemophilia B) activity assays,
including how to address discrepancies
in factor VIII and factor IX activity
assays. The draft guidance also includes
recommendations regarding preclinical
considerations to support development
of GT products for the treatment of
hemophilia. Hemophilia therapy in the
United States has progressed from
replacement therapies for on-demand
treatment of bleeding to prophylaxis to
reduce the frequency of bleeding. GT
products for hemophilia are being
developed as single-dose treatments that
may provide long-term expression of the
missing or abnormal coagulation factor
in the patient at steady levels to reduce
or eliminate the need for exogenous
factor replacement.
Elsewhere in this issue of the Federal
Register, FDA is announcing the
availability of two other human gene
therapy draft guidance documents
entitled ‘‘Human Gene Therapy for
Retinal Disorders; Draft Guidance for
Industry’’ and ‘‘Human Gene Therapy
for Rare Diseases; Draft Guidance for
Industry.’’
This draft guidance is being issued
consistent with FDA’s good guidance
practices regulation (21 CFR 10.115).
The draft guidance, when finalized, will
represent the current thinking of FDA
on ‘‘Human Gene Therapy for
Hemophilia.’’ It does not establish any
rights for any person and is not binding
on FDA or the public. You can use an
alternative approach if it satisfies the
requirements of the applicable statutes
and regulations. This guidance is not
subject to Executive Order 12866.
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
II. Paperwork Reduction Act of 1995
32307
This draft guidance refers to
previously approved collections of
information subject to review by the
Office of Management and Budget
(OMB) under the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501–3520). The
collections of information in 21 CFR
part 58 have been approved under OMB
control number 0910–0119; the
collections of information in 21 CFR
part 211 have been approved under
OMB control number 0910–0139; the
collections of information in 21 CFR
part 312 have been approved under
OMB control number 0910–0014; the
collections of information in 21 CFR
part 601 have been approved under
OMB control number 0910–0338; the
collections of information in the
guidance entitled ‘‘Expedited Programs
for Serious Conditions—Drugs and
Biologics’’ have been approved under
OMB control number 0910–0765; and
the collections of information in the
guidance entitled ‘‘Formal Meetings
Between the FDA and Sponsors or
Applicants’’ have been approved under
OMB control number 0910–0429.
Applications (INDs); Draft Guidance for
Industry.’’ The draft guidance document
provides sponsors of a human gene
therapy IND with recommendations
regarding CMC information required to
assure product safety, identity, quality,
purity, and strength (including potency)
of the investigational product. The draft
guidance applies to human gene therapy
products and to combination products
that contain a human gene therapy in
combination with a drug or device.
The draft guidance, when finalized, is
intended to supersede the document
entitled ‘‘Guidance for FDA Reviewers
and Sponsors: Content and Review of
Chemistry, Manufacturing, and Control
(CMC) Information for Human Gene
Therapy Investigational New Drug
Applications (INDs),’’ dated April 2008
(April 2008 guidance).
DATES: Submit either electronic or
written comments on the draft guidance
by October 10, 2018 to ensure that the
Agency considers your comment on this
draft guidance before it begins work on
the final version of the guidance.
ADDRESSES: You may submit comments
on any guidance at any time as follows:
III. Electronic Access
Electronic Submissions
Persons with access to the internet
may obtain the draft guidance at either
https://www.fda.gov/BiologicsBlood
Vaccines/GuidanceCompliance
RegulatoryInformation/Guidances/
default.htm or https://
www.regulations.gov.
Submit electronic comments in the
following way:
• Federal eRulemaking Portal:
https://www.regulations.gov. Follow the
instructions for submitting comments.
Comments submitted electronically,
including attachments, to https://
www.regulations.gov will be posted to
the docket unchanged. Since your
comment will be made public, you are
solely responsible for ensuring that your
comment does not include any
confidential information that you or a
third party may not wish to be posted,
such as medical information, your or
anyone else’s Social Security number, or
confidential business information, such
as a manufacturing process. Please note
that if you include your name, contact
information, or other information that
identifies you in the body of your
comments, that information will be
posted on https://www.regulations.gov.
• If you want to submit a comment
with confidential information that you
do not wish to be made available to the
public, submit the comment as a
written/paper submission and in the
manner detailed (see ‘‘Written/Paper
Submissions’’ and ‘‘Instructions’’).
Dated: July 5, 2018.
Leslie Kux.
Associate Commissioner for Policy.
[FR Doc. 2018–14875 Filed 7–11–18; 8:45 am]
BILLING CODE 4164–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA–2008–D–0205]
Chemistry, Manufacturing, and Control
Information for Human Gene Therapy
Investigational New Drug Applications;
Draft Guidance for Industry;
Availability
AGENCY:
Food and Drug Administration,
HHS.
ACTION:
Notice of availability.
The Food and Drug
Administration (FDA or Agency) is
announcing the availability of a draft
guidance for industry entitled
‘‘Chemistry, Manufacturing, and Control
(CMC) Information for Human Gene
Therapy Investigational New Drug
SUMMARY:
PO 00000
Frm 00048
Fmt 4703
Sfmt 4703
Written/Paper Submissions
Submit written/paper submissions as
follows:
• Mail/Hand Delivery/Courier (for
Written/Paper Submissions): Dockets
Management Staff (HFA–305), Food and
E:\FR\FM\12JYN1.SGM
12JYN1
amozie on DSK3GDR082PROD with NOTICES1
32308
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
Drug Administration, 5630 Fishers
Lane, Rm. 1061, Rockville, MD 20852.
• For written/paper comments
submitted to the Dockets Management
Staff, FDA will post your comment as
well as any attachments, except for
information submitted, marked, and
identified as confidential if submitted as
detailed in ‘‘Instructions.’’
Instructions: All submissions received
must include the Docket No. FDA–
2008–D–0205 for ‘‘Chemistry,
Manufacturing, and Control (CMC)
Information for Human Gene Therapy
Investigational New Drug Applications
(INDs); Draft Guidance for Industry.’’
Received comments will be placed in
the docket and, except for those
submitted as ‘‘Confidential
Submissions,’’ publicly viewable at
https://www.regulations.gov or at the
Dockets Management Staff between 9
a.m. and 4 p.m., Monday through
Friday.
• Confidential Submissions—To
submit a comment with confidential
information that you do not wish to be
made publicly available, submit your
comments only as a written/paper
submission. You should submit two
copies, total. One copy will include the
information you claim to be confidential
with a heading or cover note that states
‘‘THIS DOCUMENT CONTAINS
CONFIDENTIAL INFORMATION.’’ The
Agency will review this copy, including
the claimed confidential information, in
its consideration of comments. The
second copy, which will have the
claimed confidential information
redacted/blacked out, will be available
for public viewing and posted on
https://www.regulations.gov. Submit
both copies to the Dockets Management
Staff. If you do not wish your name and
contact information to be made publicly
available, you can provide this
information on the cover sheet and not
in the body of your comments, and you
must identify this information as
‘‘confidential.’’ Any information marked
as ‘‘confidential’’ will not be disclosed
except in accordance with 21 CFR 10.20
and other applicable disclosure law. For
more information about FDA’s posting
of comments to public dockets, see 80
FR 56469, September 18, 2015, or access
the information at: https://www.gpo.gov/
fdsys/pkg/FR-2015-09-18/pdf/201523389.pdf.
Docket: For access to the docket to
read background documents or the
electronic and written/paper comments
received, go to https://
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
www.regulations.gov and insert the
docket number, found in brackets in the
heading of this document, into the
‘‘Search’’ box and follow the prompts
and/or go to the Dockets Management
Staff, 5630 Fishers Lane, Rm. 1061,
Rockville, MD 20852.
You may submit comments on any
guidance at any time (see 21 CFR
10.115(g)(5)).
Submit written requests for single
copies of the draft guidance to the Office
of Communication, Outreach and
Development, Center for Biologics
Evaluation and Research (CBER), Food
and Drug Administration, 10903 New
Hampshire Ave., Bldg. 71, Rm. 3128,
Silver Spring, MD 20993–0002. Send
one self-addressed adhesive label to
assist the office in processing your
requests. The draft guidance may also be
obtained by mail by calling CBER at 1–
800–835–4709 or 240–402–8010. See
the SUPPLEMENTARY INFORMATION section
for electronic access to the draft
guidance document.
FOR FURTHER INFORMATION CONTACT:
Gretchen Opper, Center for Biologics
Evaluation and Research, Food and
Drug Administration, 10903 New
Hampshire Ave., Bldg. 71, Rm. 7301,
Silver Spring, MD 20993–0002, 240–
402–7911.
SUPPLEMENTARY INFORMATION:
I. Background
FDA is announcing the availability of
a draft document entitled ‘‘Chemistry,
Manufacturing, and Control (CMC)
Information for Human Gene Therapy
Investigational New Drug Applications
(INDs); Draft Guidance for Industry.’’
The draft guidance provides sponsors of
a human gene therapy IND with
recommendations regarding CMC
information required to assure product
safety, identity, quality, purity, and
strength (including potency) of the
investigational product (21 CFR
312.23(a)(7)(i)). The draft guidance
applies to human gene therapy products
and to combination products that
contain a human gene therapy in
combination with a drug or device. The
field of gene therapy has progressed
rapidly since FDA issued the April 2008
guidance. Therefore, FDA is updating
the guidance to provide current FDA
recommendations regarding the CMC
content of a gene therapy IND. In
addition, the draft guidance is organized
to follow the structure of the FDA
guidance on the Common Technical
Document.
PO 00000
Frm 00049
Fmt 4703
Sfmt 4703
The draft guidance, when finalized, is
intended to supersede the April 2008
guidance. Elsewhere in this issue of the
Federal Register, FDA is announcing
the availability of two other draft
guidances. In a separate document, FDA
is announcing the availability of a draft
document entitled ‘‘Long Term FollowUp After Administration of Human
Gene Therapy Products; Draft Guidance
for Industry’’ and the availability of a
draft document entitled ‘‘Testing of
Retroviral Vector-Based Human Gene
Therapy Products for Replication
Competent Retrovirus During Product
Manufacture and Patient Follow-up;
Draft Guidance for Industry.’’
This draft guidance is being issued
consistent with FDA’s good guidance
practices regulation (21 CFR 10.115).
The draft guidance, when finalized, will
represent the current thinking of FDA
on CMC information for human gene
therapy INDs. It does not establish any
rights for any person and is not binding
on FDA or the public. You can use an
alternative approach if it satisfies the
requirements of the applicable statutes
and regulations. This guidance is not
subject to Executive Order 12866.
II. Paperwork Reduction Act of 1995
This draft guidance refers to
previously approved collections of
information found in FDA regulations.
These collections of information are
subject to review by the Office of
Management and Budget (OMB) under
the Paperwork Reduction Act of 1995
(44 U.S.C. 3501–3520). The collections
of information in 21 CFR part 211 have
been approved under OMB control
number 0910–0139; the collections of
information in 21 CFR part 312 and
Form FDA 1571 have been approved
under OMB control number 0910–0014;
and the collections of information in 21
CFR part 1271 have been approved
under OMB control number 0910–0543.
III. Electronic Access
Persons with access to the internet
may obtain the draft guidance at either
https://www.fda.gov/BiologicsBlood
Vaccines/GuidanceCompliance
RegulatoryInformation/Guidances/
default.htm or https://
www.regulations.gov.
Dated: July 5, 2018.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2018–14866 Filed 7–11–18; 8:45 am]
BILLING CODE 4164–01–P
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
You may submit comments
on any guidance at any time as follows:
ADDRESSES:
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA–1999–D–0081]
Testing of Retroviral Vector-Based
Human Gene Therapy Products for
Replication Competent Retrovirus
During Product Manufacture and
Patient Follow-up; Draft Guidance for
Industry; Availability
AGENCY:
Food and Drug Administration,
HHS.
ACTION:
Notice of availability.
The Food and Drug
Administration (FDA or Agency) is
announcing the availability of a draft
document entitled ‘‘Testing of Retroviral
Vector-Based Human Gene Therapy
Products for Replication Competent
Retrovirus During Product Manufacture
and Patient Follow-up; Draft Guidance
for Industry.’’ The draft guidance
document provides sponsors of
retroviral vector-based human gene
therapy products recommendations
regarding the testing for replication
competent retrovirus (RCR) during the
manufacture of retroviral vector-based
products, and during follow-up
monitoring of patients who have
received retroviral vector-based
products. Recommendations include the
identification and amount of material to
be tested, and general testing methods.
In addition, recommendations are
provided on monitoring patients for
evidence of retroviral infection after
administration of retroviral vector-based
gene therapy products. The draft
guidance, when finalized, is intended to
supersede the document entitled
‘‘Guidance for Industry: Supplemental
Guidance on Testing for Replication
Competent Retrovirus in Retroviral
Vector Based Gene Therapy Products
and During Follow-up of Patients in
Clinical Trials Using Retroviral
Vectors,’’ dated November 2006. The
draft guidance, when finalized, is also
intended to supplement the documents
entitled ‘‘Long Term Follow-Up After
Administration of Human Gene Therapy
Products; Draft Guidance for Industry’’
and ‘‘Chemistry, Manufacturing, and
Control Information for Human Gene
Therapy Investigational New Drug
Applications; Draft Guidance for
Industry,’’ when these draft guidance
documents are finalized.
DATES: Submit either electronic or
written comments on the draft guidance
by October 10, 2018 to ensure that the
Agency considers your comment on this
draft guidance before it begins work on
the final version of the guidance.
amozie on DSK3GDR082PROD with NOTICES1
SUMMARY:
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
Electronic Submissions
Submit electronic comments in the
following way:
• Federal eRulemaking Portal:
https://www.regulations.gov. Follow the
instructions for submitting comments.
Comments submitted electronically,
including attachments, to https://
www.regulations.gov will be posted to
the docket unchanged. Because your
comment will be made public, you are
solely responsible for ensuring that your
comment does not include any
confidential information that you or a
third party may not wish to be posted,
such as medical information, your or
anyone else’s Social Security number, or
confidential business information, such
as a manufacturing process. Please note
that if you include your name, contact
information, or other information that
identifies you in the body of your
comments, that information will be
posted on https://www.regulations.gov.
• If you want to submit a comment
with confidential information that you
do not wish to be made available to the
public, submit the comment as a
written/paper submission and in the
manner detailed (see ‘‘Written/Paper
Submissions’’ and ‘‘Instructions’’).
Written/Paper Submissions
Submit written/paper submissions as
follows:
• Mail/Hand Delivery/Courier (for
Written/Paper Submissions): Dockets
Management Staff (HFA–305), Food and
Drug Administration, 5630 Fishers
Lane, Rm. 1061, Rockville, MD 20852.
• For written/paper comments
submitted to the Dockets Management
Staff, FDA will post your comment, as
well as any attachments, except for
information submitted, marked and
identified, as confidential, if submitted
as detailed in ‘‘Instructions.’’
Instructions: All submissions received
must include the Docket No. FDA–
1999–D–0081 for ‘‘Testing of Retroviral
Vector-Based Human Gene Therapy
Products for Replication Competent
Retrovirus During Product Manufacture
and Patient Follow-up; Draft Guidance
for Industry.’’ Received comments will
be placed in the docket and, except for
those submitted as ‘‘Confidential
Submissions,’’ publicly viewable at
https://www.regulations.gov or at the
Dockets Management Staff between 9
a.m. and 4 p.m., Monday through
Friday.
• Confidential Submissions—To
submit a comment with confidential
information that you do not wish to be
made publicly available, submit your
PO 00000
Frm 00050
Fmt 4703
Sfmt 4703
32309
comments only as a written/paper
submission. You should submit two
copies total. One copy will include the
information you claim to be confidential
with a heading or cover note that states
‘‘THIS DOCUMENT CONTAINS
CONFIDENTIAL INFORMATION.’’ The
Agency will review this copy, including
the claimed confidential information, in
its consideration of comments. The
second copy, which will have the
claimed confidential information
redacted/blacked out, will be available
for public viewing and posted on
https://www.regulations.gov. Submit
both copies to the Dockets Management
Staff. If you do not wish your name and
contact information to be made publicly
available, you can provide this
information on the cover sheet and not
in the body of your comments and you
must identify this information as
‘‘confidential.’’ Any information marked
as ‘‘confidential’’ will not be disclosed
except in accordance with 21 CFR 10.20
and other applicable disclosure law. For
more information about FDA’s posting
of comments to public dockets, see 80
FR 56469, September 18, 2015, or access
the information at: https://www.gpo.gov/
fdsys/pkg/FR-2015-09-18/pdf/201523389.pdf.
Docket: For access to the docket to
read background documents or the
electronic and written/paper comments
received, go to https://
www.regulations.gov and insert the
docket number, found in brackets in the
heading of this document, into the
‘‘Search’’ box and follow the prompts
and/or go to the Dockets Management
Staff, 5630 Fishers Lane, Rm. 1061,
Rockville, MD 20852.
You may submit comments on any
guidance at any time (see 21 CFR
10.115(g)(5)).
Submit written requests for single
copies of the draft guidance to the Office
of Communication, Outreach and
Development, Center for Biologics
Evaluation and Research (CBER), Food
and Drug Administration, 10903 New
Hampshire Ave., Bldg. 71, Rm. 3128,
Silver Spring, MD 20993–0002. Send
one self-addressed adhesive label to
assist the office in processing your
requests. The draft guidance may also be
obtained by mail by calling CBER at 1–
800–835–4709 or 240–402–8010. See
the SUPPLEMENTARY INFORMATION section
for electronic access to the draft
guidance document.
FOR FURTHER INFORMATION CONTACT:
Melissa Segal, Center for Biologics
Evaluation and Research, Food and
Drug Administration, 10903 New
Hampshire Ave., Bldg. 71, Rm. 7301,
E:\FR\FM\12JYN1.SGM
12JYN1
amozie on DSK3GDR082PROD with NOTICES1
32310
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
Silver Spring, MD 20993–0002, 240–
402–7911.
regulations. This guidance is not subject
to Executive Order 12866.
SUPPLEMENTARY INFORMATION:
II. Paperwork Reduction Act of 1995
I. Background
The draft guidance refers to
previously approved collections of
information found in FDA regulations.
These collections of information are
subject to review by the Office of
Management and Budget (OMB) under
the Paperwork Reduction Act of 1995
(44 U.S.C. 3501–3520). The collections
of information in 21 CFR part 312 have
been approved under OMB control
number 0910–0014; and the collections
of information in 21 CFR part 601 have
been approved under OMB control
number 0910–0338.
FDA is announcing the availability of
a draft document entitled ‘‘Testing of
Retroviral Vector-Based Human Gene
Therapy Products for Replication
Competent Retrovirus During Product
Manufacture and Patient Follow-up;
Draft Guidance for Industry.’’ The draft
guidance document provides sponsors
of retroviral vector-based human gene
therapy products recommendations
regarding the testing for RCR during the
manufacture of retroviral vector-based
products, and during follow-up
monitoring of patients who have
received retroviral vector-based
products. Recommendations are also
provided for RCR testing during
manufacture, including identification
and amount of material to be tested, and
general testing methods. In addition,
recommendations are provided on
monitoring patients for evidence of
retroviral infection after administration
of retroviral vector-based gene therapy
products. The draft guidance, when
finalized, is intended to supersede the
document entitled ‘‘Guidance for
Industry: Supplemental Guidance on
Testing for Replication Competent
Retrovirus in Retroviral Vector Based
Gene Therapy Products and During
Follow-up of Patients in Clinical Trials
Using Retroviral Vectors,’’ dated
November 2006. The draft guidance,
when finalized, is also intended to
supplement the ‘‘Long Term Follow-Up
After Administration of Human Gene
Therapy Products; Draft Guidance for
Industry’’ and ‘‘Chemistry,
Manufacturing, and Control Information
for Human Gene Therapy
Investigational New Drug Applications;
Draft Guidance for Industry,’’ when
these draft guidance documents are
finalized. Elsewhere in this issue of the
Federal Register, FDA is announcing
the availability of these other two draft
guidance documents.
This draft guidance is being issued
consistent with FDA’s good guidance
practices regulation (21 CFR 10.115).
The draft guidance, when finalized, will
represent FDA’s current thinking on
testing of retroviral vector-based human
gene therapy products for replication
competent retrovirus during product
manufacture and patient follow-up. It
does not establish any rights for any
person and is not binding on FDA or the
public. You can use an alternative
approach if it satisfies the requirements
of the applicable statutes and
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
III. Electronic Access
Persons with access to the internet
may obtain the draft guidance at either
https://www.fda.gov/BiologicsBlood
Vaccines/GuidanceCompliance
RegulatoryInformation/Guidances/
default.htm or https://
www.regulations.gov.
Dated: July 5, 2018.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2018–14868 Filed 7–11–18; 8:45 am]
BILLING CODE 4164–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA–2018–N–2475]
Advisory Committee; Allergenic
Products Advisory Committee;
Renewal
AGENCY:
Food and Drug Administration,
HHS.
Notice; renewal of advisory
committee.
ACTION:
The Food and Drug
Administration (FDA) is announcing the
renewal of the Allergenic Products
Advisory Committee by the
Commissioner of Food and Drugs (the
Commissioner). The Commissioner has
determined that it is in the public
interest to renew the Allergenic
Products Advisory Committee for an
additional 2 years beyond the charter
expiration date. The new charter will be
in effect until July 9, 2020.
DATES: Authority for the Allergenic
Products Advisory Committee expired
on July 9, 2018; however, the
Commissioner formally determined that
renewal is in the public interest.
FOR FURTHER INFORMATION CONTACT:
Serina Hunter-Thomas, Division of
SUMMARY:
PO 00000
Frm 00051
Fmt 4703
Sfmt 4703
Scientific Advisors and Consultants,
Center for Biologics Evaluation and
Research, Food and Drug
Administration, 10903 New Hampshire
Ave., Bldg. 71, Rm. 6338, Silver Spring,
MD 20993–0002; 240–402–5771,
[email protected].
SUPPLEMENTARY INFORMATION: Pursuant
to 41 CFR 102–3.65 and approval by the
Department of Health and Human
Services pursuant to 45 CFR part 11 and
by the General Services Administration,
FDA is announcing the renewal of the
Allergenic Products Advisory
Committee. The committee is a
discretionary Federal advisory
committee established to provide advice
to the Commissioner. The committee
advises the Commissioner or designee
in discharging responsibilities as they
relate to helping to ensure safe and
effective drugs for human use and, as
required, any other product for which
FDA has regulatory responsibility.
The Committee reviews and evaluates
available data concerning the safety,
effectiveness, and adequacy of labeling
of marketed and investigational
allergenic biological products or
materials that are administered to
humans for the diagnosis, prevention, or
treatment of allergies and allergic
disease, and makes appropriate
recommendations to the Commissioner
of its findings regarding the affirmation
or revocation of biological product
licenses; on the safety, effectiveness,
and labeling of the products; on clinical
and laboratory studies of such products;
on amendments or revisions to
regulations governing the manufacture,
testing, and licensing of allergenic
biological products; and on the quality
and relevance of FDA’s research
programs that provide the scientific
support for regulating these agents.
The Committee shall consist of a core
of nine voting members including the
Chair. Members and the Chair are
selected by the Commissioner or
designee from among authorities
knowledgeable in the fields of allergy,
immunology, pediatrics, internal
medicine, biochemistry, and related
specialties. Members will be invited to
serve for overlapping terms of up to 4
years. Almost all non-Federal members
of this committee serve as Special
Government Employees. The core of
voting members may include one
technically qualified member, selected
by the Commissioner or designee, who
is identified with consumer interests
and is recommended by either a
consortium of consumer-oriented
organizations or other interested
persons. In addition to the voting
members, the Committee may include
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
one non-voting member who is
identified with industry interests.
Further information regarding the
most recent charter and other
information can be found at https://
www.fda.gov/AdvisoryCommittees/
CommitteesMeetingMaterials/
BloodVaccinesandOtherBiologics/
AllergenicProductsAdvisoryCommittee/
ucm129360.htm or by contacting the
Designated Federal Officer (see FOR
FURTHER INFORMATION CONTACT). In light
of the fact that no change has been made
to the committee name or description of
duties, no amendment will be made to
21 CFR 14.100.
This document is issued under the
Federal Advisory Committee Act (5
U.S.C. app.). For general information
related to FDA advisory committees,
please check https://www.fda.gov/
AdvisoryCommittees/default.htm.
Dated: July 9, 2018.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2018–14942 Filed 7–11–18; 8:45 am]
BILLING CODE 4164–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
[Docket No. FDA–2018–D–2173]
Long Term Follow-Up After
Administration of Human Gene
Therapy Products; Draft Guidance for
Industry; Availability
AGENCY:
Food and Drug Administration,
HHS.
ACTION:
Notice of availability.
The Food and Drug
Administration (FDA or Agency) is
announcing the availability of a draft
document entitled ‘‘Long Term FollowUp After Administration of Human
Gene Therapy Products; Draft Guidance
for Industry.’’ The draft guidance
provides sponsors, who are developing
a human gene therapy (GT) product,
recommendations regarding the design
of long term follow-up (LTFU)
observational studies for the collection
of data on delayed adverse events
following administration of a GT
product. The draft guidance, when
finalized, is intended to supersede the
document entitled ‘‘Guidance for
Industry: Gene Therapy Clinical
Trials—Observing Participants for
Delayed Adverse Events’’ dated
November 2006. This draft guidance,
when finalized, is also intended to
supplement the guidance entitled
‘‘Testing of Retroviral Vector-Based
amozie on DSK3GDR082PROD with NOTICES1
SUMMARY:
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
Human Gene Therapy Products for
Replication Competent Retrovirus
during Product Manufacture and Patient
Follow-up; Draft Guidance for
Industry.’’
Submit either electronic or
written comments on the draft guidance
by October 10, 2018 to ensure that the
Agency considers your comment on this
draft guidance before it begins work on
the final version of the guidance.
ADDRESSES: You may submit comments
on any guidance at any time as follows:
DATES:
Electronic Submissions
Submit electronic comments in the
following way:
• Federal eRulemaking Portal:
https://www.regulations.gov. Follow the
instructions for submitting comments.
Comments submitted electronically,
including attachments, to https://
www.regulations.gov will be posted to
the docket unchanged. Because your
comment will be made public, you are
solely responsible for ensuring that your
comment does not include any
confidential information that you or a
third party may not wish to be posted,
such as medical information, your or
anyone else’s Social Security number, or
confidential business information, such
as a manufacturing process. Please note
that if you include your name, contact
information, or other information that
identifies you in the body of your
comments, that information will be
posted on https://www.regulations.gov.
• If you want to submit a comment
with confidential information that you
do not wish to be made available to the
public, submit the comment as a
written/paper submission and in the
manner detailed (see ‘‘Written/Paper
Submissions’’ and ‘‘Instructions’’).
Written/Paper Submissions
Submit written/paper submissions as
follows:
• Mail/Hand Delivery/Courier (for
Written/Paper Submissions): Dockets
Management Staff (HFA–305), Food and
Drug Administration, 5630 Fishers
Lane, Rm. 1061, Rockville, MD 20852.
• For written/paper comments
submitted to the Dockets Management
Staff, FDA will post your comment, as
well as any attachments, except for
information submitted, marked and
identified, as confidential, if submitted
as detailed in ‘‘Instructions.’’
Instructions: All submissions received
must include the Docket No. FDA–
2018–D–2173 for ‘‘Long Term FollowUp After Administration of Human
Gene Therapy Products; Draft Guidance
for Industry.’’ Received comments will
be placed in the docket and, except for
PO 00000
Frm 00052
Fmt 4703
Sfmt 4703
32311
those submitted as ‘‘Confidential
Submissions,’’ publicly viewable at
https://www.regulations.gov or at the
Dockets Management Staff between 9
a.m. and 4 p.m., Monday through
Friday.
• Confidential Submissions—To
submit a comment with confidential
information that you do not wish to be
made publicly available, submit your
comments only as a written/paper
submission. You should submit two
copies total. One copy will include the
information you claim to be confidential
with a heading or cover note that states
‘‘THIS DOCUMENT CONTAINS
CONFIDENTIAL INFORMATION.’’ The
Agency will review this copy, including
the claimed confidential information, in
its consideration of comments. The
second copy, which will have the
claimed confidential information
redacted/blacked out, will be available
for public viewing and posted on
https://www.regulations.gov. Submit
both copies to the Dockets Management
Staff. If you do not wish your name and
contact information to be made publicly
available, you can provide this
information on the cover sheet and not
in the body of your comments and you
must identify this information as
‘‘confidential.’’ Any information marked
as ‘‘confidential’’ will not be disclosed
except in accordance with 21 CFR 10.20
and other applicable disclosure law. For
more information about FDA’s posting
of comments to public dockets, see 80
FR 56469, September 18, 2015, or access
the information at: https://www.gpo.gov/
fdsys/pkg/FR-2015-09-18/pdf/201523389.pdf.
Docket: For access to the docket to
read background documents or the
electronic and written/paper comments
received, go to https://
www.regulations.gov and insert the
docket number, found in brackets in the
heading of this document, into the
‘‘Search’’ box and follow the prompts
and/or go to the Dockets Management
Staff, 5630 Fishers Lane, Rm. 1061,
Rockville, MD 20852.
You may submit comments on any
guidance at any time (see 21 CFR
10.115(g)(5)).
Submit written requests for single
copies of the draft guidance to the Office
of Communication, Outreach and
Development, Center for Biologics
Evaluation and Research (CBER), Food
and Drug Administration, 10903 New
Hampshire Ave., Bldg. 71, Rm. 3128,
Silver Spring, MD 20993–0002. Send
one self-addressed adhesive label to
assist the office in processing your
requests. The draft guidance may also be
obtained by mail by calling CBER at 1–
800–835–4709 or 240–402–8010. See
E:\FR\FM\12JYN1.SGM
12JYN1
32312
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
the SUPPLEMENTARY INFORMATION section
for electronic access to the draft
guidance document.
FOR FURTHER INFORMATION CONTACT:
Jonathan McKnight, Center for Biologics
Evaluation and Research, Food and
Drug Administration, 10903 New
Hampshire Ave., Bldg. 71, Rm. 7301,
Silver Spring, MD 20993–0002, 240–
402–7911.
SUPPLEMENTARY INFORMATION:
amozie on DSK3GDR082PROD with NOTICES1
I. Background
FDA is announcing the availability of
a draft document entitled ‘‘Long Term
Follow-Up After Administration of
Human Gene Therapy Products; Draft
Guidance for Industry.’’ The draft
guidance provides a brief introduction
of the product characteristics, patientrelated factors, and the preclinical and
clinical data that should be considered
when assessing the need for LTFU
observations for your GT product. The
draft guidance also describes the
Agency’s current recommendations for
the conduct of LTFU studies,
specifically the information/data to
support a sponsor’s rationale for the
duration and design of a LTFU protocol
when clinical trials are initiated. Also
included in the draft guidance are GT
product-specific clinical considerations
for monitoring subjects under a LTFU
protocol and recommendations on
patient monitoring for licensed GT
products. The draft guidance, when
finalized, is intended to supersede the
guidance entitled ‘‘Guidance for
Industry: Gene Therapy Clinical
Trials—Observing Participants for
Delayed Adverse Events’’ dated
November 2006. The draft guidance,
when finalized, is also intended to
supplement the guidance entitled
‘‘Testing of Retroviral Vector-Based
Human Gene Therapy Products for
Replication Competent Retrovirus
during Product Manufacture and Patient
Follow-up; Draft Guidance for
Industry,’’ published elsewhere in this
issue of the Federal Register. Also,
elsewhere in this issue of the Federal
Register, FDA is announcing the
availability of another draft guidance
entitled ‘‘Chemistry, Manufacturing,
and Control Information for Human
Gene Therapy Investigational New Drug
Applications; Draft Guidance for
Industry.’’
This draft guidance is being issued
consistent with FDA’s good guidance
practices regulation (21 CFR 10.115).
The draft guidance, when finalized, will
represent the current thinking of FDA
on long term follow-up after
administration of human gene therapy
products. It does not establish any rights
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
for any person and is not binding on
FDA or the public. You can use an
alternative approach if it satisfies the
requirements of the applicable statutes
and regulations. This guidance is not
subject to Executive Order 12866.
II. Paperwork Reduction Act of 1995
This draft guidance refers to
previously approved collections of
information found in FDA regulations.
These collections of information are
subject to review by the Office of
Management and Budget (OMB) under
the Paperwork Reduction Act of 1995
(44 U.S.C. 3501–3520). The collections
of information in 21 CFR parts 50 and
56 have been approved under OMB
control number 0910–0755; the
collections of information in 21 CFR
part 58 have been approved under OMB
control number 0910–0119; and the
collections of information in 21 CFR
part 312 have been approved under
OMB control number 0910–0014.
III. Electronic Access
Persons with access to the internet
may obtain the draft guidance at either
https://www.fda.gov/BiologicsBlood
Vaccines/GuidanceCompliance
RegulatoryInformation/Guidances/
default.htm or https://
www.regulations.gov.
Dated: July 5, 2018.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2018–14867 Filed 7–11–18; 8:45 am]
BILLING CODE 4164–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Health Resources and Services
Administration
Advisory Committee on Heritable
Disorders in Newborns and Children
Health Resources and Services
Administration (HRSA), Department of
Health and Human Services (HHS).
ACTION: Notice of meeting.
AGENCY:
In accordance with the
Federal Advisory Committee Act, this
notice announces that the Advisory
Committee on Heritable Disorders in
Newborns and Children (ACHDNC) will
hold a public meeting.
DATES: Thursday, August 2, 2018, from
9:30 a.m. to 5:00 p.m. Eastern Time
(ET).
ADDRESSES: This meeting is a webinar
only and requires advanced registration.
Please register online at http://
www.achdncmeetings.org/ by 12:00 p.m.
ET on July 30, 2018.
SUMMARY:
PO 00000
Frm 00053
Fmt 4703
Sfmt 4703
Ann
Ferrero, Maternal and Child Health
Bureau (MCHB), HRSA, in one of three
ways: (1) Send a request to the following
address: Ann Ferrero, MCHB, HRSA
5600 Fishers Lane, Room 18N100C,
Rockville, MD 20857; (2) call 301–443–
3999; or (3) send an email to AFerrero@
hrsa.gov.
SUPPLEMENTARY INFORMATION:
Background: The ACHDNC provides
advice and recommendations to the
Secretary of HHS on the development of
newborn screening activities,
technologies, policies, guidelines, and
programs for effectively reducing
morbidity and mortality in newborns
and children having, or at risk for,
heritable disorders. In addition,
ACHDNC’s recommendations regarding
inclusion of additional conditions for
screening, following adoption by the
Secretary, are evidence-informed
preventive health services provided for
in the comprehensive guidelines
supported by HRSA through the
Recommended Uniform Screening Panel
(RUSP) pursuant to section 2713 of the
Public Health Service Act (42 U.S.C.
300gg–13). Under this provision, nongrandfathered group health plans and
health insurance issuers offering group
or individual health insurance are
required to provide insurance coverage
without cost-sharing (a co-payment, coinsurance, or deductible) for preventive
services for plan years (i.e., policy years)
beginning on or after the date that is one
year from the Secretary’s adoption of the
condition for screening.
Agenda: During the August 2, 2018,
meeting, the ACHDNC will discuss
issues related to long-term follow-up,
timeliness, education and training, the
evidence-based review process, and risk
assessment in newborn screening.
Information about the ACHDNC, a roster
of members, and the meeting agenda, as
well as past meeting summaries, is
located on the ACHDNC website:
https://www.hrsa.gov/advisorycommittees/heritable-disorders/
index.html.
Public Participation: Members of the
public will have the opportunity to
provide comments, which are part of the
official Committee record. To submit
written comments or request time
for an oral comment at the meeting,
please register online by 12:00 p.m. ET
on July 27, 2018, at http://
www.achdncmeetings.org. Oral
comments will be honored in the order
they are requested and may be limited
as time allows. Individuals associated
with groups or who plan to provide
comments on similar topics may be
asked to combine their comments and
FOR FURTHER INFORMATION CONTACT:
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
present them through a single
representative. No audiovisual
presentations are permitted. Written
comments should identify the
individual’s name, address, email,
telephone number, professional or
organization affiliation, background or
area of expertise (i.e., parent, family
member, researcher, clinician, public
health, etc.) and the topic/subject
matter.
Amy P. McNulty,
Acting Director, Division of the Executive
Secretariat.
[FR Doc. 2018–14908 Filed 7–11–18; 8:45 am]
BILLING CODE 4165–15–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
National Institutes of Health
National Center for Advancing
Translational Sciences; Notice of
Meetings
amozie on DSK3GDR082PROD with NOTICES1
Pursuant to section 10(d) of the
Federal Advisory Committee Act, as
amended, notice is hereby given of
meetings of the National Center for
Advancing Translational Sciences.
The meetings will be open to the
public as indicated below, with
attendance limited to space available.
Individuals who plan to attend and
need special assistance, such as sign
language interpretation or other
reasonable accommodations, should
notify the Contact Person listed below
in advance of the meeting.
The meetings will be closed to the
public in accordance with the
provisions set forth in sections
552b(c)(4) and 552b(c)(6), Title 5 U.S.C.,
as amended. The grant applications and
the discussions could disclose
confidential trade secrets or commercial
property such as patentable material,
and personal information concerning
individuals associated with the grant
applications and/or contract proposals,
the disclosure of which would
constitute a clearly unwarranted
invasion of personal privacy.
Name of Committee: Cures Acceleration
Network Review Board.
Date: September 27, 2018.
Time: 8:30 a.m. to 3:00 p.m.
Agenda: Report from the Institute Director.
Place: National Institutes of Health,
Building 31, Conference Room 6, 31 Center
Drive, Bethesda, MD 20892.
Contact Person: Anna L. Ramsey-Ewing,
Ph.D., Executive Secretary, National Center
for Advancing Translational Sciences, 1
Democracy Plaza, Room 1072, Bethesda, MD
20892, 301–435–0809, annn.ramseyewing@
nih.gov.
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
Name of Committee: National Center for
Advancing Translational Sciences Advisory
Council.
Date: September 27, 2018.
Open: 8:30 a.m. to 3:00 p.m.
Agenda: Report from the Institute Director
and other staff.
Place: National Institutes of Health,
Building 31, Conference Room 6, 31 Center
Drive, Bethesda, MD 20892.
Closed: 3:15 p.m. to 4:30 p.m.
Agenda: To review and evaluate grant
applications.
Place: National Institutes of Health,
Building 31, Conference Room 6, 31 Center
Drive, Bethesda, MD 20892.
Contact Person: Anna L. Ramsey-Ewing,
Ph.D., Executive Secretary, National Center
for Advancing Translational Sciences, 1
Democracy Plaza, Room 1072, Bethesda, MD
20892, 301–435–0809, anna.ramseyewing@
nih.gov.
(Catalogue of Federal Domestic Assistance
Program Nos. 93.859, Pharmacology,
Physiology, and Biological Chemistry
Research; 93.350, B—Cooperative
Agreements; 93.859, Biomedical Research
and Research Training, National Institutes of
Health, HHS)
Dated: July 5, 2018.
David D. Clary,
Program Analyst, Office of Federal Advisory
Committee Policy.
[FR Doc. 2018–14873 Filed 7–11–18; 8:45 am]
BILLING CODE 4140–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
National Institutes of Health
National Center for Complementary &
Integrative Health; Notice of Meeting
Pursuant to section 10(d) of the
Federal Advisory Committee Act, as
amended (5 U.S.C. App.), notice is
hereby given of the ZAT1 PJ (02)
meeting.
The meeting will be closed to the
public in accordance with the
provisions set forth in sections
552b(c)(4) and 552b(c)(6), Title 5 U.S.C.,
as amended. The grant applications and
the discussions could disclose
confidential trade secrets or commercial
property such as patentable material,
and personal information concerning
individuals associated with the grant
applications, the disclosure of which
would constitute a clearly unwarranted
invasion of personal privacy.
Name of Committee: National Center for
Complementary and Integrative Health
Special Emphasis Panel; Mechanisms of
Mind and Body Interventions (MMB).
Date: August 1, 2018.
Time: 11:00 a.m. to 4:00 p.m.
Agenda: To review and evaluate grant
applications.
Place: National Institutes of Health, Two
Democracy Plaza, 6707 Democracy
PO 00000
Frm 00054
Fmt 4703
Sfmt 4703
32313
Boulevard, Bethesda, MD 20892 (Virtual
Meeting).
Contact Person: Pamela Eugenia Jeter,
Ph.D., Scientific Review Officer, Office of
Scientific Review, Division of Extramural
Activities, NCCIH, NIH, 6707 Democracy
Boulevard, Suite 401, Bethesda, MD 20892,
301–435–2591, [email protected].
(Catalogue of Federal Domestic Assistance
Program Nos. 93.213, Research and Training
in Complementary and Integrative Health,
National Institutes of Health, HHS)
Dated: July 6, 2018.
Michelle D. Trout,
Program Analyst, Office of Federal Advisory
Committee Policy.
[FR Doc. 2018–14874 Filed 7–11–18; 8:45 am]
BILLING CODE 4140–01–P
DEPARTMENT OF HOMELAND
SECURITY
U.S. Customs and Border Protection
Accreditation and Approval of Saybolt
LP (Nederland, TX) as a Commercial
Gauger and Laboratory
U.S. Customs and Border
Protection, Department of Homeland
Security.
ACTION: Notice of accreditation and
approval of Saybolt LP (Nederland, TX)
as a commercial gauger and laboratory.
AGENCY:
Notice is hereby given,
pursuant to CBP regulations, that
Saybolt LP (Nederland, TX) has been
approved to gauge petroleum and
certain petroleum products and
accredited to test petroleum and certain
petroleum products for customs
purposes for the next three years as of
August 8, 2017.
DATES: Saybolt LP (Nederland, TX) was
approved and accredited as a
commercial gauger and laboratory as of
August 8, 2017. The next triennial
inspection date will be scheduled for
August 2020.
FOR FURTHER INFORMATION CONTACT:
Christopher J. Mocella, Laboratories and
Scientific Services Directorate, U.S.
Customs and Border Protection, 1300
Pennsylvania Avenue NW, Suite 1500N,
Washington, DC 20229, tel. 202–344–
1060.
SUPPLEMENTARY INFORMATION: Notice is
hereby given pursuant to 19 CFR 151.12
and 19 CFR 151.13, that Saybolt LP,
4144 N Twin City Hwy., Nederland, TX
77627, has been approved to gauge
petroleum and certain petroleum
products and accredited to test
petroleum and certain petroleum
products for customs purposes, in
accordance with the provisions of 19
CFR 151.12 and 19 CFR 151.13. Saybolt
SUMMARY:
E:\FR\FM\12JYN1.SGM
12JYN1
32314
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
LP (Nederland, TX) is approved for the
following gauging procedures for
petroleum and certain petroleum
products from the American Petroleum
Institute (API):
CBPL No.
API chapters
3 ...................
7 ...................
8 ...................
12 .................
17 .................
Title
Tank gauging.
Temperature determination.
Sampling.
Calculations.
Maritime measurement.
ASTM
Title
..............
..............
..............
..............
D4006
D4928
D473
D4294
27–48 ..............
Pending ...........
D4052
D4007
Standard Test Method for Water in Crude Oil by Distillation.
Standard Test Method for Water in Crude Oils by Coulometric Karl Fischer Titration.
Standard Test Method for Sediment in Crude Oils and Fuel Oils by the Extraction Method.
Standard Test Method for Sulfur in Petroleum and Petroleum Products by Energy-Dispersive X-ray Fluorescence
Spectrometry.
Standard Test Method for Density and Relative Density of Liquids by Digital Density Meter.
Standard Test Method for Water and Sediment in Crude Oil by the Centrifuge Method (Laboratory Procedure).
27–03
27–05
27–06
27–13
Anyone wishing to employ this entity
to conduct laboratory analyses and
gauger services should request and
receive written assurances from the
entity that it is accredited or approved
by the U.S. Customs and Border
Protection to conduct the specific test or
gauger service requested. Alternatively,
inquiries regarding the specific test or
gauger service this entity is accredited
or approved to perform may be directed
to the U.S. Customs and Border
Protection by calling (202) 344–1060.
The inquiry may also be sent to
[email protected]. Please
reference the website listed below for a
complete listing of CBP approved
gaugers and accredited laboratories.
http://www.cbp.gov/about/labsscientific/commercial-gaugers-andlaboratories.
Dated: July 2, 2018.
Dave Fluty,
Executive Director, Laboratories and
Scientific Services.
descendants or representatives of any
Indian Tribe or Native Hawaiian
organization not identified in this notice
that wish to claim this cultural item
should submit a written request to the
Berkshire Museum. If no additional
claimants come forward, transfer of
control of the cultural item to the lineal
descendants, Indian Tribes, or Native
Hawaiian organizations stated in this
notice may proceed.
Lineal descendants or
representatives of any Indian Tribe or
Native Hawaiian organization not
identified in this notice that wish to
claim this cultural item should submit
a written request with information in
support of the claim to the Berkshire
Museum at the address in this notice by
August 13, 2018.
DATES:
Jason Vivori, Collections
Experience Manager, Berkshire
Museum, 39 South Street, Pittsfield, MA
01201, telephone (413) 443–7171 ext.
341, email jvivori@
berkshiremuseum.org.
ADDRESSES:
[FR Doc. 2018–14918 Filed 7–11–18; 8:45 am]
BILLING CODE 9111–14–P
Notice is
here given in accordance with the
Native American Graves Protection and
Repatriation Act (NAGPRA), 25 U.S.C.
3005, of the intent to repatriate a
cultural item under the control of the
Berkshire Museum, Pittsfield, MA, that
meets the definitions of sacred objects
and objects of cultural patrimony under
25 U.S.C. 3001.
This notice is published as part of the
National Park Service’s administrative
responsibilities under NAGPRA, 25
U.S.C. 3003(d)(3). The determinations in
this notice are the sole responsibility of
the museum, institution, or Federal
agency that has control of the Native
American cultural items. The National
Park Service is not responsible for the
determinations in this notice.
SUPPLEMENTARY INFORMATION:
DEPARTMENT OF THE INTERIOR
National Park Service
[NPS–WASO–NAGPRA–NPS0025701;
PPWOCRADN0–PCU00RP14.R50000]
Notice of Intent To Repatriate Cultural
Items: Berkshire Museum, Pittsfield,
MA
National Park Service, Interior.
Notice.
AGENCY:
ACTION:
amozie on DSK3GDR082PROD with NOTICES1
Saybolt LP (Nederland, TX) is
accredited for the following laboratory
analysis procedures and methods for
petroleum and certain petroleum
products set forth by the U.S. Customs
and Border Protection Laboratory
Methods (CBPL) and American Society
for Testing and Materials (ASTM):
The Berkshire Museum, in
consultation with the appropriate
Indian Tribes or Native Hawaiian
organizations, has determined that the
cultural item listed in this notice meets
the definition of sacred object and object
of cultural patrimony. Lineal
SUMMARY:
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00055
Fmt 4703
Sfmt 4703
History and Description of the Cultural
Item
In 1903, one cultural item was
removed from Pine Point in Becker
County, MN, by John K. West, an
entrepreneur from western
Massachusetts, who arrived in Detroit
Lakes in 1881 with his wife, Ms. Jessie
Campbell West. Both individuals spent
considerable time in Detroit Lakes and
other areas within Becker County and
acquired numerous objects from White
Earth Reservation. Shortly after Ms.
West’s death in January 1903, several
objects were sent to Massachusetts and
were acquired by the Berkshire
Museum. The one sacred object/object
of cultural patrimony is described as an
‘‘Ojibwa large drum’’ (#C1992.53)
otherwise referred to as a ‘‘Big Drum’’ or
‘‘Manidoo Dewe’igan’’ (meaning ‘‘Spirit
Drum’’).
The Pine Point community, where
this particular drum originated, is
within the boundaries of Becker County
on the White Earth Reservation. From
the creation of the White Earth
Reservation in 1867 through the mid1900s, the people of White Earth existed
often under great hardship due to
significant economic, cultural, and
religious oppression combined with
well-documented dispossession of land
and other resources. Historically, the
Big Drum served an important role in
maintaining peace between
communities and such drums continue
to hold a spiritual and healing role with
ceremonies that are still held on the
White Earth Reservation. In addition,
the ongoing historical and spiritual
importance of these drums is that they
are central to the White Earth people as
a whole and could never have been
alienated, appropriated, or conveyed by
any individual regardless of whether or
not the individual was a member of the
tribe. Thomas Vennum wrote in The
Ojibwa Dance Drum, ‘‘Because song and
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
dance are traditionally considered to be
sacred in origin they are for Native
Americans a form of prayer . . . and
because most song is accompanied by
percussion of some sort—drums more
often than not—the instruments
themselves become sacred through their
associations.’’ This feeling was
reaffirmed by the White Earth Band of
the Minnesota Chippewa Tribe during
consultation with the Berkshire
Museum. In a letter dated April 5, 2017,
the White Earth Band of the Minnesota
Chippewa Tribe requested the return of
the Big Drum due to its substantial
cultural and religious significance.
Determinations Made by the Berkshire
Museum
Officials of the Berkshire Museum
have determined that:
• Pursuant to 25 U.S.C. 3001(3)(C),
the one cultural item described above is
a specific ceremonial object needed by
traditional Native American religious
leaders for the practice of traditional
Native American religions by their
present-day adherents.
• Pursuant to 25 U.S.C. 3001(3)(D),
the one cultural item described above
has ongoing historical, traditional, or
cultural importance central to the
Native American group or culture itself,
rather than property owned by an
individual.
• Pursuant to 25 U.S.C. 3001(2), there
is a relationship of shared group
identity that can be reasonably traced
between the sacred object and object of
cultural patrimony and the White Earth
Band of the Minnesota Chippewa Tribe.
amozie on DSK3GDR082PROD with NOTICES1
Additional Requestors and Disposition
Lineal descendants or representatives
of any Indian Tribe or Native Hawaiian
organization not identified in this notice
that wish to claim these cultural items
should submit a written request with
information in support of the claim to
Jason Vivori, Collections Experience
Manager, Berkshire Museum, 39 South
Street, Pittsfield, MA 01201, telephone
(413) 443–7171 ext. 341, email jvivori@
berkshiremuseum.org, by August 13,
2018. After that date, if no additional
claimants have come forward, transfer
of control of the sacred object and object
of cultural patrimony to the White Earth
Band of the Minnesota Chippewa Tribe
may proceed.
The Berkshire Museum is responsible
for notifying the White Earth Band of
the Minnesota Chippewa Tribe that this
notice has been published.
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
Dated: June 1, 2018.
Melanie O’Brien,
Manager, National NAGPRA Program.
[FR Doc. 2018–14896 Filed 7–11–18; 8:45 am]
BILLING CODE 4312–52–P
DEPARTMENT OF THE INTERIOR
National Park Service
[NPS–WASO–NAGPRA–NPS0025846;
PPWOCRADN0–PCU00RP14.R50000]
Notice of Inventory Completion: State
Historic Preservation Office, Lansing,
MI
National Park Service, Interior.
ACTION: Notice.
AGENCY:
The State Historic
Preservation Office (SHPO), Michigan
State Housing Development Authority,
has completed an inventory of human
remains and associated funerary objects
in consultation with the appropriate
Indian Tribes or Native Hawaiian
organizations, and has determined that
there is a cultural affiliation between the
human remains and present-day Indian
Tribes or Native Hawaiian
organizations. Lineal descendants or
representatives of any Indian Tribe or
Native Hawaiian organization not
identified in this notice that wish to
request transfer of control of these
human remains should submit a written
request to the Michigan State Historic
Preservation Office. If no additional
requestors come forward, transfer of
control of the human remains and
associated funerary objects to the lineal
descendants, Indian Tribes, or Native
Hawaiian organizations stated in this
notice may proceed.
DATES: Lineal descendants or
representatives of any Indian Tribe or
Native Hawaiian organization not
identified in this notice that wish to
request transfer of control of these
human remains and associated funerary
objects should submit a written request
with information in support of the
request to the State Historic
Preservation Office at the address in this
notice by August 13, 2018.
ADDRESSES: Dean L. Anderson, State
Historic Preservation Office, Michigan
State Housing Development Authority,
735 East Michigan Avenue, Lansing, MI
48909, telephone: (517) 373–1618, email
[email protected].
SUPPLEMENTARY INFORMATION: Notice is
here given in accordance with the
Native American Graves Protection and
Repatriation Act (NAGPRA), 25 U.S.C.
3003, of the completion of an inventory
of human remains and associated
SUMMARY:
PO 00000
Frm 00056
Fmt 4703
Sfmt 4703
32315
funerary objects under the control of the
State Historic Preservation Office,
Lansing, MI. The human remains and
associated funerary objects were
removed from a highway construction
project on US–12, Lenawee County, MI.
This notice is published as part of the
National Park Service’s administrative
responsibilities under NAGPRA, 25
U.S.C. 3003(d)(3). The determinations in
this notice are the sole responsibility of
the museum, institution, or Federal
agency that has control of the Native
American human remains. The National
Park Service is not responsible for the
determinations in this notice.
Consultation
A detailed assessment of the human
remains was made during 1993–1995 by
the former Office of the State
Archaeologist (OSA) professional staff
and by a physical anthropologist.
According to documents held by the
SHPO, in 1995 the OSA initiated
consultation on the human remains and
funerary objects with the Citizen
Potawatomi Nation, Oklahoma; Forest
County Potawatomi Community,
Wisconsin; Hannahville Indian
Community, Michigan; Pokagon Band of
Potawatomi Indians, Michigan and
Indiana; and Prairie Band Potawatomi
Nation (previously listed as the Prairie
Band of Potawatomi Nation, Kansas).
History and Description of the Remains
In the 1920s, human remains
representing nine individuals were
removed from a highway construction
project in Lenawee County, MI. In 1925,
the remains were re-interred on the
grounds of the Walker Tavern historic
site, located a few miles from the
highway construction project. The
Walker Tavern structure was built
around 1832, as a farmhouse, and then
became a tavern and inn along the
Detroit to Chicago stagecoach route. In
1921, Frederic Hewitt converted the
tavern into a museum, and in 1965, the
structure was sold to the Michigan
Department of Natural Resources. The
Parks and Recreation Division of the
Michigan Department of Conservation
operated the historic site until 1975,
when the Michigan Historical Museum,
which was part of the Michigan
Historical Center (MHC), took
responsibility for the Walker Tavern
museum and its collections.
In the mid-1990s, Barbara Mead,
Assistant State Archaeologist, did the
NAGPRA reporting for the Office of the
State Archaeologist (OSA) and for the
state museum. At that time, the state
museum turned over to Ms. Mead a
single cranium and associated funerary
objects that she determined had been
E:\FR\FM\12JYN1.SGM
12JYN1
amozie on DSK3GDR082PROD with NOTICES1
32316
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
part of the group of human remains that
was re-interred on the grounds of the
Walker Tavern site in 1925.
In 2009, the Department of History,
Arts, and Libraries, which included
both the OSA and the state museum,
was eliminated. The state museum was
moved into the Department of Natural
Resources, and the OSA was moved into
the Michigan State Housing
Development Authority. Soon after that,
the OSA was eliminated, and the
archaeology staff were moved into the
SHPO. Consequently, the archaeological
collections, including the Walker
Tavern materials, are now held by the
SHPO.
The human remains in the Walker
Tavern collection include a single
cranium with no teeth present and
lacking the mandible. The cranium was
examined by a physical anthropologist
who stated that the individual was
approximately 10–15 years of age, and
that no determination of sex or ethnic
identity of the individual could be
made. No known individuals were
identified.
When the state museum assumed
responsibility for the Walker Tavern
collection in 1975, the cranium was
recorded under Michigan Department of
Conservation accession number A1253.
The state museum assigned catalog
number FA–155–75 to the cranium.
The state museum also cataloged a
group of 18 funerary objects associated
with the human remains disinterred
during road construction in the 1920s.
The 18 associated funerary objects are:
One pewter spoon, one bottle, one oval
stone, one deer mandible, three loose
teeth, one lot of fur pieces with tassels
wrapped in porcupine quill, one silver
armband, one wooden bowl or toy
canoe, one lot of wool scraps, one lot of
linen scraps, one silver armband, one
copper or brass kettle fragment, one iron
knife blade, one lot of very small bone
chips, one lot of shell and glass beads
and one pewter bowl.
Based on the funerary objects, it is
estimated that the original interment of
the objects and the human remains took
place between approximately 1760 and
1810. A typescript in the MHC Walker
Tavern files identified as an article in
the Lenawee County Exponent dated
November 22, 1923, describes the
discovery of Indian graves and artifacts
during road construction work in the
Irish Hills area. The article mentions
some of the same funerary objects
described above and associated with the
cranium. This assemblage of funerary
objects, including trade silver and
beads, together with the cranium,
represent a Native American interment.
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
The inventory that Assistant State
Archaeologist Barbara Mead compiled
in 1995 included the following
information on cultural affiliation:
Probably Potawatomi. Early in the
eighteenth century, the Potawatomi,
Miami, Ottawa, Huron/Wyandotte and
Kickapoo were present in southern
Michigan. Most of the reports for tribes
other than the Potawatomi are from the
pre-1720 era. By the 1760s, the
Potawatomi territory included Lenawee
County; no other tribes seemed to be
present, except perhaps as travelers or
temporary residents. (Cleland, Charles
E., 1992, Rites of Conquest, the
University of Michigan Press; Tanner,
Helen Hornbeck (ed.), 1987, Atlas of
Great Lakes Indian History, University
of Oklahoma Press; Trigger, Bruce G.
(ed.), 1978, Handbook of North
American Indians, Vol. 15: Northeast,
Smithsonian Institution).
Determinations Made by the State
Historic Preservation Office
Officials of the State Historic
Preservation Office have determined
that:
• Pursuant to 25 U.S.C. 3001(9), the
human remains described in this notice
represent the physical remains of one
individual of Native American ancestry.
• Pursuant to 25 U.S.C. 3001(3)(A),
the 18 objects described in this notice
are reasonably believed to have been
placed with or near individual human
remains at the time of death or later as
part of the death rite or ceremony.
• Pursuant to 25 U.S.C. 3001(2), there
is a relationship of shared group
identity that can be reasonably traced
between the Native American human
remains and associated funerary objects
and the Citizen Potawatomi Nation,
Oklahoma; Forest County Potawatomi
Community, Wisconsin; Hannahville
Indian Community, Michigan; Pokagon
Band of Potawatomi Indians, Michigan
and Indiana; and Prairie Band
Potawatomi Nation (previously listed as
the Prairie Band of Potawatomi Nation,
Kansas).
Additional Requestors and Disposition
Lineal descendants or representatives
of any Indian tribe or Native Hawaiian
organization not identified in this notice
that wish to request transfer of control
of these human remains and associated
funerary objects should submit a written
request with information in support of
the request to Dean L. Anderson, State
Historic Preservation Office, Michigan
State Housing Development Authority,
735 East Michigan Avenue, P.O. Box
30044, Lansing, MI 48909, telephone
(517) 373–1618, email andersond15@
michigan.gov, by August 13, 2018. After
PO 00000
Frm 00057
Fmt 4703
Sfmt 4703
that date, if no additional requestors
have come forward, transfer of control
of the human remains and associated
funerary objects to the Citizen
Potawatomi Nation, Oklahoma; Forest
County Potawatomi Community,
Wisconsin; Hannahville Indian
Community, Michigan; Pokagon Band of
Potawatomi Indians, Michigan and
Indiana; and Prairie Band Potawatomi
Nation (previously listed as the Prairie
Band of Potawatomi Nation, Kansas)
may proceed.
The State Historic Preservation Office
is responsible for notifying the Citizen
Potawatomi Nation, Oklahoma; Forest
County Potawatomi Community,
Wisconsin; Hannahville Indian
Community, Michigan; Pokagon Band of
Potawatomi Indians, Michigan and
Indiana; and Prairie Band Potawatomi
Nation (previously listed as the Prairie
Band of Potawatomi Nation, Kansas)
that this notice has been published.
Dated: June 21, 2018.
Melanie O’Brien,
Manager, National NAGPRA Program.
[FR Doc. 2018–14905 Filed 7–11–18; 8:45 am]
BILLING CODE 4312–52–P
DEPARTMENT OF THE INTERIOR
National Park Service
[NPS–WASO–NAGPRA–NPS0025769;
PPWOCRADN0–PCU00RP14.R50000]
Notice of Inventory Completion: St.
Joseph Museums, Inc., St. Joseph, MO
National Park Service, Interior.
Notice.
AGENCY:
ACTION:
The St. Joseph Museum has
completed an inventory of human
remains, in consultation with the
appropriate Indian Tribes or Native
Hawaiian organizations, and has
determined that there is a cultural
affiliation between the human remains
and present-day Indian Tribes or Native
Hawaiian organizations. Lineal
descendants or representatives of any
Indian Tribe or Native Hawaiian
organization not identified in this notice
that wish to request transfer of control
of these human remains should submit
a written request to the St. Joseph
Museum. If no additional requestors
come forward, transfer of control of the
human remains to the lineal
descendants, Indian Tribes, or Native
Hawaiian organizations stated in this
notice may proceed.
DATES: Lineal descendants or
representatives of any Indian Tribe or
Native Hawaiian organization not
identified in this notice that wish to
SUMMARY:
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
request transfer of control of these
human remains should submit a written
request with information in support of
the request to the St. Joseph Museum at
the address in this notice by August 13,
2018.
Trevor Tutt, Collections
Manager, St. Joseph Museums, Inc.,
St. Joseph, MO 64506, telephone (816)
232–8471, email trevor@
stjosephmuseum.org.
ADDRESSES:
Notice is
here given in accordance with the
Native American Graves Protection and
Repatriation Act (NAGPRA), 25 U.S.C.
3003, of the completion of an inventory
of human remains under the control of
the St. Joseph Museums, Inc., St. Joseph,
MO. The human remains were removed
from Kake, AK.
This notice is published as part of the
National Park Service’s administrative
responsibilities under NAGPRA, 25
U.S.C. 3003(d)(3). The determinations in
this notice are the sole responsibility of
the museum, institution, or Federal
agency that has control of the Native
American human remains. The National
Park Service is not responsible for the
determinations in this notice.
SUPPLEMENTARY INFORMATION:
Consultation
A detailed assessment of the human
remains was made by the St. Joseph
Museum professional staff in
consultation with representatives of the
Organized Village of Kake.
amozie on DSK3GDR082PROD with NOTICES1
History and Description of the Remains
Prior to 1910, human remains
representing, at minimum, one
individual were removed from Kake,
AK. Subsequently, William H. Case
transferred these human remains to
Harry L. George, who, in turn donated
them to the St. Joseph Museum. The
human remains—a jaw bone—belonged
to a Medicine Man who had died and
was buried in a grave house, in
accordance with Native custom. When a
sickness, attributed to evil spirits, fell
upon the village the Medicine Man’s
bones were thrown in salt water. A
white missionary from Kake was said to
have retrieved the jaw bone from the
Pacific Ocean several years later,
accounting for the barnacles found on
the teeth. As Russian missionaries first
arrived in Kake in the 1790s, the
retrieval of the jaw by a white
missionary would have occurred
between the 1790s and early 1910, when
Case photographed it and sent the
images to George. George had purchased
the jawbone along with a series of ivory
buttons and a jade axe head for $30.00
no later than July 14, 1911.
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
The Harry George collection was
originally meant to be donated to the St.
Joseph Museum prior to George’s death
in 1923, but due to lack of storage space,
it was on loan to the Missouri State
Museum in Jefferson City until it
transferred to the St. Joseph Museum in
October 1944. The bulk of the collection
was stored in the basement of the St.
Joseph City Hall while select items were
displayed at the AJ August House, the
second location of the St. Joseph
Museum. After the St. Joseph Museum
received the Wyeth-Tootle Mansion as
their main display site in 1946, the vast
majority of the items went on display
there. That same year, funds were
provided for the St. Joseph Museum to
purchase the George Collection outright.
The human remains in the collection
have remained in storage since at least
the 1970s. When the St. Joseph
Museum, now the St. Joseph Museums,
Inc., moved to the Glore Psychiatric
Museum in 2004, much of the George
Collection was moved as well, including
the jaw bone. In 2017, it, and other
human remains were returned to storage
at the Wyeth-Tootle Mansion for
processing under NAGPRA.
Research into the Harry George
Collection, specifically the William H.
Case photographs, began around 2017.
Zachary Jones, Archivist at the Alaska
State Archives, assisted in identifying
objects in the collection and initiated
consultation with the Organized Village
of Kake. Frank Hughes, the NAGPRA
Coordinator for the Organized Village of
Kake, contacted Trevor Tutt, the
Collections Manager for the St. Joseph
Museums, Inc., and began
correspondence related to items of
cultural patrimony and remains related
to Kake, Alaska. Through
correspondence, the oral tradition of
human remains being thrown in salt
water in retaliation against a sickness in
the village was confirmed. As research
indicates that missionary activity in
Kake peaked during the 1890s–1910
period, the jaw might have been
removed during that two decade span.
Determinations Made by the St. Joseph
Museum
Officials of the St. Joseph Museum
have determined that:
• Pursuant to 25 U.S.C. 3001(9), the
human remains described in this notice
represent the physical remains of one
individual of Native American ancestry.
• Pursuant to 25 U.S.C. 3001(2), there
is a relationship of shared group
identity that can be reasonably traced
between the Native American human
remains and the Organized Village of
Kake.
PO 00000
Frm 00058
Fmt 4703
Sfmt 4703
32317
Additional Requestors and Disposition
Lineal descendants or representatives
of any Indian Tribe or Native Hawaiian
organization not identified in this notice
that wish to request transfer of control
of these human remains should submit
a written request with information in
support of the request to Trevor Tutt,
Collections Manager, St. Joseph
Museums, Inc., St. Joseph, MO 64506,
telephone (816) 232–8471, email
[email protected], by August
13, 2018. After that date, if no
additional requestors have come
forward, transfer of control of the
human remains to the Organized Village
of Kake may proceed.
The St. Joseph Museum is responsible
for notifying the Organized Village of
Kake that this notice has been
published.
Dated: June 12, 2018.
Melanie O’Brien,
Manager, National NAGPRA Program.
[FR Doc. 2018–14901 Filed 7–11–18; 8:45 am]
BILLING CODE 4312–52–P
DEPARTMENT OF THE INTERIOR
National Park Service
[NPS–WASO–NAGPRA–NPS0025692;
PPWOCRADN0–PCU00RP14.R50000]
Notice of Inventory Completion: U.S.
Department of Agriculture, Tongass
National Forest, Juneau Ranger
District, Juneau, AK
National Park Service, Interior.
Notice.
AGENCY:
ACTION:
The U.S. Department of
Agriculture, Tongass National Forest,
Juneau Ranger District, (Tongass
National Forest) has completed an
inventory of human remains and
associated funerary objects, in
consultation with the appropriate
Indian Tribes or Native Hawaiian
organizations, and has determined that
there is a cultural affiliation between the
human remains and associated funerary
objects and present-day Indian Tribes or
Native Hawaiian organizations. Lineal
descendants or representatives of any
Indian Tribe or Native Hawaiian
organization not identified in this notice
that wish to request transfer of control
of the human remains and associated
funerary objects should submit a written
request to the Tongass National Forest.
If no additional requestors come
forward, transfer of control of the
human remains and associated funerary
objects to the lineal descendants, Indian
Tribes, or Native Hawaiian
SUMMARY:
E:\FR\FM\12JYN1.SGM
12JYN1
32318
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
organizations stated in this notice may
proceed.
DATES: Lineal descendants or
representatives of any Indian Tribe or
Native Hawaiian organization not
identified in this notice that wish to
request transfer of control of these
human remains and associated funerary
objects should submit a written request
with information in support of the
request to the Tongass National Forest at
the address in this notice by August 13,
2018.
ADDRESSES: M. Earl Stewart, Forest
Supervisor, Tongass National Forest,
648 Mission Street, Ketchikan, AK
99901–6591, telephone (907) 228–6281,
email [email protected].
SUPPLEMENTARY INFORMATION: Notice is
here given in accordance with the
Native American Graves Protection and
Repatriation Act (NAGPRA), 25 U.S.C.
3003, of the completion of an inventory
of the human remains and associated
funerary objects under the control of the
USDA Tongass National Forest, Juneau
Ranger District, Juneau, AK. The human
remains and associated funerary objects
were removed from Entrance Island,
near Hobart Bay, AK, on two separate
occasions by two separate collectors.
This notice is published as part of the
National Park Service’s administrative
responsibilities under NAGPRA, 25
U.S.C. 3003(d)(3). The determinations in
this notice are the sole responsibility of
the museum, institution, or Federal
agency that has control of the Native
American human remains and
associated funerary objects. The
National Park Service is not responsible
for the determinations in this notice.
Consultation
A detailed assessment of the human
remains was made by Tongass National
Forest archeologists in partnership with
the professional staff of the Alaska State
Museum and in consultation with
representatives of Douglas Indian
Association and the Organized Village
of Kake.
amozie on DSK3GDR082PROD with NOTICES1
History and Description of the Remains
In the summer of 1961, funerary
objects, in several pieces, were removed
from a small cave on Entrance Island
near Hobart Bay, AK. An individual
exploring the island reported that he
found a small cave that contained
human remains and portions of a
bentwood box, as well as some other
burial items believed to have been
placed there at the time of burial. He
collected a basket of a type that
reportedly was used to cradle a baby
and sometimes was used to bury the
deceased. Additional items collected
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
include a piece of leather cordage, a
portion of a woven cedar mat, and a
piece of wood with evidence of a kerf
corner, all of which were connected
with either the basket or the bentwood
box. The human remains and the
bentwood box were not removed from
the cave at that time. The individual
returned the four burial items to the
Tongass National Forest in 2017.
Subsequently, it was determined that
these funerary objects are associated
with the below described human
remains and funerary object that were
separately collected by a different
individual.
In 1961, the desiccated remains of an
infant inside a bentwood box that had
been wrapped in a cedar mat were
removed from a small burial cave on
Entrance Island, near Hobart Bay. In
November 1961, these human remains
and funerary objects were sent to the
Alaska State Museum for curation.
Based on oral testimony, this burial site
and the above described burial cave are
determined to be one and the same. The
human remains consist of a single
individual, a mummified infant,
estimated to be between the ages of 6
and 9 months. Determination of sex or
affinity based on skeletal features was
not possible. The bentwood box
containing the infant’s remains was
painted and uncarved. It was recovered
from beneath the cedar bark mat. When
found, the infant had ermine skins tied
in its hair.
The human remains and associated
funerary objects are believed to be of
pre-contact or first contact date, as after
contact, the Christian burial practice of
underground internment became
widespread. The human remains are
reasonably believed to be associated
with the Ke´ex Kwa´an, who have
traditionally used and occupied the
island. The cultural affiliation of the
human remains was determined by
consulting Haa Aanı´ Our Land Tlingit
and Haida Land Rights and Use, by
Walter R. Goldschmidt and Theodore H.
Haas, edited by Thomas F. Thorton
(1998). Additional cultural affiliation
information was provided by the
Organized Village of Kake and the
Douglas Indian Association. The Ke´ex
Kwa´an continue to live in their
traditional territory and use the Hobart
Bay area. Their present-day descendants
are the Organized Village of Kake.
Determinations Made by the Tongass
National Forest
Officials of the Tongass National
Forest have determined that:
• Pursuant to 25 U.S.C. 3001(9), the
human remains described in this notice
PO 00000
Frm 00059
Fmt 4703
Sfmt 4703
represent the physical remains of one
individual of Native American ancestry.
• Pursuant to 25 U.S.C. 3001(3)(A),
the seven objects described in this
notice are reasonably believed to have
been placed with or near individual
human remains at the time of death or
later as part of the death rite or
ceremony.
• Pursuant to 25 U.S.C. 3001(2), there
is a relationship of shared group
identity that can be reasonably traced
between the human remains and
associated funerary objects and the
Organized Village of Kake.
Additional Requestors and Disposition
Lineal descendants or representatives
of any Indian Tribe or Native Hawaiian
organization not identified in this notice
that wish to request transfer of control
of these human remains and associated
funerary objects should submit a written
request with information in support of
the request to M. Earl Stewart, Forest
Supervisor, Tongass National Forest,
648 Mission Street, Ketchikan, AK
99901–6591, telephone (907) 228–6281,
email [email protected], by August 13,
2018. After that date, if no additional
requestors have come forward, transfer
of control of the human remains and
associated funerary objects to the
Organized Village of Kake may proceed.
The Tongass National Forest is
responsible for notifying the Douglas
Indian Association and the Organized
Village of Kake that this notice has been
published.
Dated: May 31, 2018.
Melanie O’Brien,
Manager, National NAGPRA Program.
[FR Doc. 2018–14903 Filed 7–11–18; 8:45 am]
BILLING CODE 4312–52–P
DEPARTMENT OF THE INTERIOR
National Park Service
[NPS–WASO–NAGPRA–NPS0025756;
PPWOCRADN0–PCU00RP14.R50000]
Notice of Inventory Completion:
University of San Diego, San Diego, CA
National Park Service, Interior.
Notice.
AGENCY:
ACTION:
The University of San Diego
has completed an inventory of human
remains in consultation with the
appropriate Indian Tribes or Native
Hawaiian organizations, and has
determined that there is no cultural
affiliation between the human remains
and any present-day Indian Tribes or
Native Hawaiian organizations.
Representatives of any Indian Tribe or
Native Hawaiian organization not
SUMMARY:
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
amozie on DSK3GDR082PROD with NOTICES1
identified in this notice that wish to
request transfer of control of these
human remains should submit a written
request to the University of San Diego.
If no additional requestors come
forward, transfer of control of the
human remains to the Indian Tribes or
Native Hawaiian organizations stated in
this notice may proceed.
DATES: Lineal descendants or
representatives of any Indian Tribe or
Native Hawaiian organization not
identified in this notice that wish to
request transfer of control of these
human remains should submit a written
request with information in support of
the request to the University of San
Diego, at the address in this notice by
August 13, 2018.
ADDRESSES: Derrick R. Cartwright,
Ph.D., University of San Diego, 5998
Alcala Park, San Diego, CA 92110,
telephone (619) 260–7632, email
[email protected].
SUPPLEMENTARY INFORMATION: Notice is
here given in accordance with the
Native American Graves Protection and
Repatriation Act (NAGPRA), 25 U.S.C.
3003, of the completion of an inventory
of human remains under the control of
the University of San Diego, San Diego,
CA. The human remains were removed
from Squaw Point, near Dove Creek,
Delores County, CO.
This notice is published as part of the
National Park Service’s administrative
responsibilities under NAGPRA, 25
U.S.C. 3003(d)(3) and 43 CFR 10.11(d).
The determinations in this notice are
the sole responsibility of the museum,
institution, or Federal agency that has
control of the Native American human
remains. The National Park Service is
not responsible for the determinations
in this notice.
Consultation
A detailed assessment of the human
remains were made by the University of
San Diego professional staff in
consultation with representatives of the
Hopi Tribe of Arizona; Kewa Pueblo,
New Mexico (previously listed as the
Pueblo of Santo Domingo); Navajo
Nation, Arizona, New Mexico & Utah;
Ohkay Owingeh, New Mexico
(previously listed as the Pueblo of San
Juan); Pueblo of Acoma, New Mexico;
Pueblo of Cochiti, New Mexico; Pueblo
of Isleta, New Mexico; Pueblo of Jemez,
New Mexico; Pueblo of Laguna, New
Mexico; Pueblo of Nambe, New Mexico;
Pueblo of Picuris, New Mexico; Pueblo
of Pojoaque, New Mexico; Pueblo of San
Felipe, New Mexico; Pueblo of San
Ildefonso, New Mexico; Pueblo of
Sandia, New Mexico; Pueblo of Santa
Ana, New Mexico; Pueblo of Santa
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
Clara, New Mexico; Pueblo of Taos,
New Mexico; Pueblo of Tesuque, New
Mexico; Pueblo of Zia, New Mexico;
Southern Ute Indian Tribe of the
Southern Ute Reservation, Colorado; Ute
Indian Tribe of the Uintah & Ouray
Reservation, Utah; Ute Mountain Ute
Tribe (previously listed as the Ute
Mountain Tribe of the Ute Mountain
Reservation, Colorado, New Mexico &
Utah);Ysleta del Sur Pueblo (previously
listed as the Ysleta Del Sur Pueblo of
Texas); and Zuni Tribe of the Zuni
Reservation, New Mexico (hereafter
referred to as ‘‘The Consulted Tribes’’).
History and Description of the Remains
At an unknown time, human remains
representing, at minimum, one
individual were removed from Squaw
Point, near Dove Creek, CO. No
information regarding the circumstances
surrounding the removal is known. Rose
Tyson, a physical anthropologist,
received the human remains from Dr.
Spencer L. Rogers, also a physical
anthropologist, and gave them to the
Anthropology Department at the
University of San Diego in 2002. The
human remains—one cranium and
mandible—belong to a male and have
been cradleboard flattened. Printed in
ink on the left side of the cranium is
‘‘PII 7/55 Squaw Point near Dove Creek
Colorado prop. S. L. Rogers.
Dimensions: maximum length 143 mm,
maximum width 168 mm.’’ No known
individual was identified. No associated
funerary objects are present.
Determinations Made by the University
of San Diego
Officials of the University of San
Diego have determined that:
• Pursuant to 25 U.S.C. 3001(9), the
human remains described in this notice
represent the physical remains of one
individual of Native American ancestry.
• Pursuant to 25 U.S.C. 3001(2), a
relationship of shared group identity
cannot be reasonably traced between the
Native American human remains and
any present-day Indian Tribe.
• Treaties, Acts of Congress, or
Executive Orders, indicate that the land
from which the Native American human
remain was removed is the aboriginal
land of the Southern Ute Indian Tribe of
the Southern Ute Reservation, Colorado;
Ute Indian Tribe of the Uintah & Ouray
Reservation, Utah; and the Ute
Mountain Ute Tribe (previously listed as
the Ute Mountain Tribe of the Ute
Mountain Reservation, Colorado, New
Mexico & Utah).
• Pursuant to 43 CFR 10.11(c)(1), the
disposition of the human remains may
be to the Southern Ute Indian Tribe of
the Southern Ute Reservation, Colorado;
PO 00000
Frm 00060
Fmt 4703
Sfmt 4703
32319
Ute Indian Tribe of the Uintah & Ouray
Reservation, Utah; and the Ute
Mountain Ute Tribe (previously listed as
the Ute Mountain Tribe of the Ute
Mountain Reservation, Colorado, New
Mexico & Utah).
Additional Requestors and Disposition
Lineal descendants or representatives
of any Indian Tribe or Native Hawaiian
organization not identified in this notice
that wish to request transfer of control
of these human remains should submit
a written request with information in
support of the request to Dr. Derrick R.
Cartwright, University of San Diego,
5998 Alcala Park, San Diego, CA 92110,
telephone (619) 260–7632, email
[email protected] by August
13, 2018. After that date, if no
additional requestors have come
forward, transfer of control of the
human remain to the Southern Ute
Indian Tribe of the Southern Ute
Reservation, Colorado; Ute Indian Tribe
of the Uintah & Ouray Reservation,
Utah; and the Ute Mountain Ute Tribe
(previously listed as the Ute Mountain
Tribe of the Ute Mountain Reservation,
Colorado, New Mexico & Utah) may
proceed.
The University of San Diego is
responsible for notifying The Consulted
Tribes that this notice has been
published.
Dated: June 11, 2018.
Melanie O’Brien,
Manager, National NAGPRA Program.
[FR Doc. 2018–14899 Filed 7–11–18; 8:45 am]
BILLING CODE 4312–52–P
DEPARTMENT OF THE INTERIOR
National Park Service
[NPS–WASO–NAGPRA–NPS0025845;
PPWOCRADN0–PCU00RP14.R50000]
Notice of Inventory Completion: Heard
Museum, Phoenix, AZ
National Park Service, Interior.
Notice.
AGENCY:
ACTION:
The Heard Museum has
completed an inventory of human
remains, in consultation with the
appropriate Indian Tribes or Native
Hawaiian organizations, and has
determined that there is a cultural
affiliation between the human remains
and present-day Indian Tribes or Native
Hawaiian organizations. Lineal
descendants or representatives of any
Indian Tribe or Native Hawaiian
organization not identified in this notice
that wish to request transfer of control
of these human remains should submit
a written request to the Heard Museum.
SUMMARY:
E:\FR\FM\12JYN1.SGM
12JYN1
32320
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
If no additional requestors come
forward, transfer of control of the
human remains to the lineal
descendants, Indian Tribes, or Native
Hawaiian organizations stated in this
notice may proceed.
DATES: Lineal descendants or
representatives of any Indian Tribe or
Native Hawaiian organization not
identified in this notice that wish to
request transfer of control of these
human remains should submit a written
request with information in support of
the request to the Heard Museum at the
address in this notice by August 13,
2018.
ADDRESSES: David Roche, Director/CEO,
Heard Museum, 2301 North Central
Avenue, Phoenix, AZ 85004, telephone
(602) 252–8840, email director@
heard.org.
SUPPLEMENTARY INFORMATION: Notice is
here given in accordance with the
Native American Graves Protection and
Repatriation Act (NAGPRA), 25 U.S.C.
3003, of the completion of an inventory
of human remains under the control of
the Heard Museum, Phoenix, AZ. The
human remains were removed from
Camp Verde, Yavapai County, AZ.
This notice is published as part of the
National Park Service’s administrative
responsibilities under NAGPRA, 25
U.S.C. 3003(d)(3). The determinations in
this notice are the sole responsibility of
the museum, institution, or Federal
agency that has control of the Native
American human remains. The National
Park Service is not responsible for the
determinations in this notice.
amozie on DSK3GDR082PROD with NOTICES1
Consultation
A detailed assessment of the human
remains was made by the Heard
Museum professional staff in
consultation with representatives of
Cheyenne River Sioux Tribe of the
Cheyenne River Reservation, South
Dakota; Hopi Tribe of Arizona; Hualapai
Indian Tribe of the Hualapai Indian
Reservation, Arizona; Three Affiliated
Tribes of the Fort Berthold Reservation,
North Dakota; Yavapai-Apache Nation
of the Camp Verde Indian Reservation,
Arizona; Yavapai-Prescott Indian Tribe
(previously listed as the YavapaiPrescott Tribe of the Yavapai
Reservation, Arizona); and Zuni Tribe of
the Zuni Reservation, New Mexico.
History and Description of the Remains
Sometime prior to 1991, human
remains representing, at minimum, one
individual were removed from Camp
Verde in Yavapai County, AZ. The
circumstances surrounding the removal
are unknown. In 1991, the human
remains were in the collection of the
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
Heard Museum and were assigned the
catalog number NA–SW–PR–T–1. The
human remains are those of an adult. No
known individuals were identified. No
associated funerary objects are present.
Based on consultation, the Camp
Verde provenience, the type of burial
(inhumation), and the presence of
copper oxide stains which are often
found on burials in the Tuzigoot area
(Caywood and Spicer 1935:99–100;
Wilcox 1987:128), the Heard Museum
has determined that these human
remains belong to the Sinagua culture.
The Sinagua period was from A.D. 600
to A.D. 1450. The following present-day
Indian Tribes descend from the Sinagua
culture: Ak-Chin Indian Community
(previously listed as the Ak Chin Indian
Community of the Maricopa (Ak Chin)
Indian Reservation, Arizona); Fort
McDowell Yavapai Nation, Arizona;
Gila River Indian Community of the Gila
River Indian Reservation, Arizona;
Havasupai Tribe of the Havasupai
Reservation, Arizona; Hopi Tribe of
Arizona; Hualapai Indian Tribe of the
Hualapai Indian Reservation, Arizona;
Salt River Pima-Maricopa Indian
Community of the Salt River
Reservation, Arizona; Tohono O’odham
Nation of Arizona; Yavapai-Apache
Nation of the Camp Verde Indian
Reservation, Arizona; Yavapai-Prescott
Indian Tribe (previously listed as the
Yavapai-Prescott Tribe of the Yavapai
Reservation, Arizona); and Zuni Tribe of
the Zuni Reservation, New Mexico
(hereafter referred to as ‘‘The Tribes’’).
Determinations Made by the Heard
Museum
Officials of the Heard Museum have
determined that:
• Pursuant to 25 U.S.C. 3001(9), the
human remains described in this notice
represent the physical remains of one
individual of Native American ancestry.
• Pursuant to 25 U.S.C. 3001(2), there
is a relationship of shared group
identity that can be reasonably traced
between the Native American human
remains and The Tribes.
Additional Requestors and Disposition
Lineal descendants or representatives
of any Indian Tribe or Native Hawaiian
organization not identified in this notice
that wish to request transfer of control
of these human remains should submit
a written request with information in
support of the request to David Roche,
Director/CEO, Heard Museum, 2301
North Central Avenue, Phoenix, AZ
85004, telephone (602) 252–8840, email
[email protected], by August 13, 2018.
After that date, if no additional
requestors have come forward, transfer
PO 00000
Frm 00061
Fmt 4703
Sfmt 4703
of control of the human remains to The
Tribes may proceed.
The Heard Museum is responsible for
notifying The Tribes that this notice has
been published.
Dated: June 21, 2018.
Melanie O’Brien,
Manager, National NAGPRA Program.
[FR Doc. 2018–14904 Filed 7–11–18; 8:45 am]
BILLING CODE 4312–52–P
DEPARTMENT OF THE INTERIOR
National Park Service
[NPS–WASO–NAGPRA–NPS0025827;
PPWOCRADN0–PCU00RP14.R50000]
Notice of Intent To Repatriate Cultural
Items: U.S. Department of the Interior,
National Park Service, Grand Canyon
National Park, Grand Canyon, AZ
National Park Service, Interior.
Notice.
AGENCY:
ACTION:
The U.S. Department of the
Interior, National Park Service, Grand
Canyon National Park, in consultation
with the appropriate Indian Tribes or
Native Hawaiian organizations, has
determined that the cultural items listed
in this notice meet the definition of
unassociated funerary objects. Lineal
descendants or representatives of any
Indian Tribe or Native Hawaiian
organization not identified in this notice
that wish to claim these cultural items
should submit a written request to
Grand Canyon National Park. If no
additional claimants come forward,
transfer of control of the cultural items
to the lineal descendants, Indian Tribes,
or Native Hawaiian organizations stated
in this notice may proceed.
DATES: Lineal descendants or
representatives of any Indian Tribe or
Native Hawaiian organization not
identified in this notice that wish to
claim these cultural items should
submit a written request with
information in support of the claim to
Grand Canyon National Park at the
address in this notice by August 13,
2018.
ADDRESSES: Christine Lehnertz,
Superintendent, Grand Canyon National
Park, P.O. Box 129, Grand Canyon, AZ
86023, telephone (928) 638–7945, email
[email protected].
SUPPLEMENTARY INFORMATION: Notice is
here given in accordance with the
Native American Graves Protection and
Repatriation Act (NAGPRA), 25 U.S.C.
3005, of the intent to repatriate cultural
items under the control of Grand
Canyon National Park, Grand Canyon,
AZ, that meet the definition of
SUMMARY:
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
unassociated funerary objects under 25
U.S.C. 3001.
This notice is published as part of the
National Park Service’s administrative
responsibilities under NAGPRA, 25
U.S.C. 3003(d)(3). The determinations in
this notice are the sole responsibility of
the Superintendent, Grand Canyon
National Park.
History and Description of the Cultural
Items
In 1935, three cultural items were
removed from GC 62 in Coconino
County, AZ, during a vegetation project
by the Works Progress Administration
and the National Park Service. The three
objects were kept by Claude A. Wagner
Jr. until 1974 when he donated them to
Grand Canyon National Park. The three
unassociated funerary objects are one
copper bracelet and two metal bells.
GC 62 is described as a cremation site,
about six feet in diameter with evidence
of a large fire. No human remains were
collected from GC 62. The site is located
in an area traditionally used by the
Havasupai Tribe and cremation was a
Havasupai burial practice. The
Havasupai Tribal Council has identified
the items as likely coming from a tribal
cremation.
amozie on DSK3GDR082PROD with NOTICES1
Determinations Made by Grand Canyon
National Park
Officials of Grand Canyon National
Park have determined that:
• Pursuant to 25 U.S.C. 3001(3)(B),
the three cultural items described above
are reasonably believed to have been
placed with or near individual human
remains at the time of death or later as
part of the death rite or ceremony and
are believed, by a preponderance of the
evidence, to have been removed from a
specific burial site of a Native American
individual.
• Pursuant to 25 U.S.C. 3001(2), there
is a relationship of shared group
identity that can be reasonably traced
between the unassociated funerary
objects and the Havasupai Tribe of the
Havasupai Reservation, Arizona.
Additional Requestors and Disposition
Lineal descendants or representatives
of any Indian Tribe or Native Hawaiian
organization not identified in this notice
that wish to claim these cultural items
should submit a written request with
information in support of the claim to
Christine Lehnertz, Superintendent,
Grand Canyon National Park, P.O. Box
129, Grand Canyon, AZ 86023,
telephone (928) 638–7945, email chris_
[email protected], by August 13, 2018.
After that date, if no additional
claimants have come forward, transfer
of control of the unassociated funerary
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
objects to the Havasupai Tribe of the
Havasupai Reservation, Arizona may
proceed.
Grand Canyon National Park is
responsible for notifying the Havasupai
Tribe of the Havasupai Reservation,
Arizona that this notice has been
published.
Dated: June 18, 2018.
Melanie O’Brien,
Manager, National NAGPRA Program.
[FR Doc. 2018–14902 Filed 7–11–18; 8:45 am]
BILLING CODE 4312–52–P
DEPARTMENT OF THE INTERIOR
National Park Service
[NPS–WASO–NAGPRA–NPS0025702;
PPWOCRADN0–PCU00RP14.R50000]
Notice of Inventory Completion:
University of Michigan, Ann Arbor, MI
National Park Service, Interior.
Notice.
AGENCY:
ACTION:
The University of Michigan
has completed an inventory of human
remains, in consultation with the
appropriate Indian Tribes or Native
Hawaiian organizations, and has
determined that there is a cultural
affiliation between the human remains
and present-day Indian Tribes or Native
Hawaiian organizations. Lineal
descendants or representatives of any
Indian Tribe or Native Hawaiian
organization not identified in this notice
that wish to request transfer of control
of these human remains should submit
a written request to the University of
Michigan. If no additional requestors
come forward, transfer of control of the
human remains to the lineal
descendants, Indian Tribes, or Native
Hawaiian organizations stated in this
notice may proceed.
DATES: Lineal descendants or
representatives of any Indian Tribe or
Native Hawaiian organization not
identified in this notice that wish to
request transfer of control of these
human remains should submit a written
request with information in support of
the request to the University of
Michigan at the address in this notice by
August 13, 2018.
ADDRESSES: Dr. Ben Secunda, NAGPRA
Project Manager, University of
Michigan, Office of Research, 4080
Fleming Building, 503 South Thompson
Street, Ann Arbor, MI 48109–1340,
telephone (734) 647–9085, email
[email protected].
SUPPLEMENTARY INFORMATION: Notice is
here given in accordance with the
Native American Graves Protection and
SUMMARY:
PO 00000
Frm 00062
Fmt 4703
Sfmt 4703
32321
Repatriation Act (NAGPRA), 25 U.S.C.
3003, of the completion of an inventory
of human remains under the control of
the University of Michigan, Ann Arbor,
MI. The human remains were removed
from the Garry site (20AC19), Arenac
County, MI.
This notice is published as part of the
National Park Service’s administrative
responsibilities under NAGPRA, 25
U.S.C. 3003(d)(3). The determinations in
this notice are the sole responsibility of
the museum, institution, or Federal
agency that has control of the Native
American human remains. The National
Park Service is not responsible for the
determinations in this notice.
Consultation
A detailed assessment of the human
remains was made by the University of
Michigan Museum of Anthropological
Archaeology (UMMAA) professional
staff in consultation with
representatives of the Bay Mills Indian
Community, Michigan; Chippewa Cree
Indians of the Rocky Boy’s Reservation,
Montana (previously listed as the
Chippewa-Cree Indians of the Rocky
Boy’s Reservation, Montana); Minnesota
Chippewa Tribe, Minnesota (Six
component reservations: Bois Forte
Band (Nett Lake); Fond du Lac Band;
Grand Portage Band; Leech Lake Band;
Mille Lacs Band; White Earth Band);
Saginaw Chippewa Indian Tribe of
Michigan; Sault Ste. Marie Tribe of
Chippewa Indians, Michigan; and
Sokaogon Chippewa Community,
Wisconsin (hereafter referred to as ‘‘The
Consulted Tribes’’).
Requests for consultation were also
sent to the Bad River Band of the Lake
Superior Tribe of Chippewa Indians of
the Bad River Reservation, Wisconsin;
Grand Traverse Band of Ottawa and
Chippewa Indians, Michigan;
Keweenaw Bay Indian Community,
Michigan; Lac Courte Oreilles Band of
Lake Superior Chippewa Indians of
Wisconsin; Lac du Flambeau Band of
Lake Superior Chippewa Indians of the
Lac du Flambeau Reservation of
Wisconsin; Lac Vieux Desert Band of
Lake Superior Chippewa Indians of
Michigan; Red Cliff Band of Lake
Superior Chippewa Indians of
Wisconsin; Red Lake Band of Chippewa
Indians, Minnesota; St. Croix Chippewa
Indians of Wisconsin; and Turtle
Mountain Band of Chippewa Indians of
North Dakota (hereafter referred to as
‘‘The Tribes Invited to Consult’’).
History and Description of the Remains
In August of 1971, human remains
representing, at minimum, one
individual were removed from the Garry
site (20AC19) in Arenac County, MI.
E:\FR\FM\12JYN1.SGM
12JYN1
32322
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
amozie on DSK3GDR082PROD with NOTICES1
Workers contacted the Michigan State
Police after encountering human
remains while digging a trench for a
water main on private land. The human
remains were taken to the State Crime
Lab for analysis and subsequently
transferred to the UMMAA. After
analyzing the human remains,
archaeologists from the UMMAA and
Indiana State Museum returned to the
burial site to excavate the remaining
portion of the trench. The individual
had been buried in a semi-prone
position within a bell-shaped pit.
Several Post-Contact Period objects were
found in association with the burial but
were transferred to the Arenac County
Historical Society instead of the
UMMAA. The human remains are of
one adolescent, indeterminate sex, 17–
18 years old. Copper staining is present
on the right ulna and radius. Perimortem sharp force trauma, possibly
from a knife or blade, on some of the
human remains may be the cause of
death as there is no evidence of healing
from this trauma. No known individuals
were identified. There are no associated
funerary objects under the control of
UMMAA.
The human remains have been
determined to be Native American
based on burial treatment and
diagnostic artifacts. A relationship of
shared group identity can be reasonably
traced between the Native American
human remains from this site and the
Chippewa based on multiple lines of
evidence. The associated funerary
objects noted from the site are typical of
the types of goods traded in the region
from approximately A.D. 1760 to 1820.
Additionally, according to historical
records, when the burial occurred, the
Chippewa were the predominant tribe
in the area. This is further evinced by
a treaty creating two Chippewa
reservations in the vicinity of the Garry
site in 1837.
Determinations Made by the University
of Michigan
Officials of the University of Michigan
have determined that:
• Pursuant to 25 U.S.C. 3001(9), the
human remains described in this notice
represent the physical remains of one
individual of Native American ancestry.
• Pursuant to 25 U.S.C. 3001(2), there
is a relationship of shared group
identity that can be reasonably traced
between the Native American human
remains and The Consulted Tribes and
The Tribes Invited to Consult.
Additional Requestors and Disposition
Lineal descendants or representatives
of any Indian Tribe or Native Hawaiian
organization not identified in this notice
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
that wish to request transfer of control
of these human remains should submit
a written request with information in
support of the request to Dr. Ben
Secunda, NAGPRA Project Manager,
University of Michigan, Office of
Research, 4080 Fleming Building, 503
South Thompson Street, Ann Arbor, MI
48109–1340, telephone (734) 647–9085,
email [email protected], by August
13, 2018. After that date, if no
additional requestors have come
forward, transfer of control of the
human remains to The Consulted Tribes
and The Tribes Invited to Consult may
proceed.
The University of Michigan is
responsible for notifying The Consulted
Tribes and The Tribes Invited to Consult
that this notice has been published.
Dated: June 1, 2018.
Melanie O’Brien,
Manager, National NAGPRA Program.
[FR Doc. 2018–14897 Filed 7–11–18; 8:45 am]
BILLING CODE 4312–52–P
DEPARTMENT OF THE INTERIOR
National Park Service
[NPS–WASO–NAGPRA–NPS0025758;
PPWOCRADN0–PCU00RP14.R50000]
Notice of Inventory Completion:
Museum of Ojibwa Culture and
Marquette Mission Park, City of St.
Ignace, MI
National Park Service, Interior.
Notice.
AGENCY:
ACTION:
The Museum of Ojibwa
Culture and Marquette Mission Park,
City of St. Ignace, has completed an
inventory of human remains, in
consultation with the appropriate
Indian Tribes or Native Hawaiian
organizations, and has determined that
there is no cultural affiliation between
the human remains and any present-day
Indian Tribes or Native Hawaiian
organizations. Representatives of any
Indian Tribe or Native Hawaiian
organization not identified in this notice
that wish to request transfer of control
of these human remains should submit
a written request to the Museum of
Ojibwa Culture and Marquette Mission
Park, City of St. Ignace. If no additional
requestors come forward, transfer of
control of the human remains to the
Indian Tribes or Native Hawaiian
organizations stated in this notice may
proceed.
DATES: Representatives of any Indian
Tribe or Native Hawaiian organization
not identified in this notice that wish to
request transfer of control of these
SUMMARY:
PO 00000
Frm 00063
Fmt 4703
Sfmt 4703
human remains should submit a written
request with information in support of
the request to the Museum of Ojibwa
Culture and Marquette Mission Park,
City of St. Ignace at the address in this
notice by August 13, 2018.
ADDRESSES: Shirley Sorrels, Director,
Museum of Ojibwa Culture and
Marquette Mission Park, c/o Bernstein &
Associates, 1041 N Lafayette Street,
Denver, CO 80218, telephone (303) 894–
0648, email [email protected].
SUPPLEMENTARY INFORMATION: Notice is
here given in accordance with the
Native American Graves Protection and
Repatriation Act (NAGPRA), 25 U.S.C.
3003, of the completion of an inventory
of human remains under the control of
the Museum of Ojibwa Culture and
Marquette Mission Park, City of St.
Ignace. The human remains were
removed from Marquette Mission Site
(20MK82), Mackinac County, MI.
This notice is published as part of the
National Park Service’s administrative
responsibilities under NAGPRA, 25
U.S.C. 3003(d)(3) and 43 CFR 10.11(d).
The determinations in this notice are
the sole responsibility of the museum,
institution, or Federal agency that has
control of the Native American human
remains. The National Park Service is
not responsible for the determinations
in this notice.
Consultation
A detailed assessment of the human
remains was made by the Museum of
Ojibwa Culture and Marquette Mission
Park, City of St. Ignace professional staff
in consultation with representatives of
the Forest County Potawatomi
Community, Wisconsin; Little Traverse
Bay Bands of Odawa Indians, Michigan;
Saginaw Chippewa Indian Tribe of
Michigan; and Sault Ste. Marie Tribe of
Chippewa Indians, Michigan.
History and Description of the Remains
In 1983, 1997, and 2001, (during
excavations by Michigan State
University archeologists), human
remains representing, at minimum,
three individuals were removed with
faunal remains from the Marquette
Mission site (20MK82) in St. Ignace,
Mackinac County, MI. After each
excavation season, the excavated
material were transported to the
Michigan State University Museum,
where they were curated. In early 2017,
during an examination of the faunal
remains, three human teeth were
identified: A child’s worn shovelshaped maxillary incisor (5810.005.02
box 8), an adult shovel-shaped incisor
(5810.169.91.01), and an adult molar
(5810.123.03.03). No known individuals
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
amozie on DSK3GDR082PROD with NOTICES1
were identified. No associated funerary
objects are present.
The archeological site is within
Marquette Mission Park. The Museum
of Ojibwa Culture and Marquette
Mission Park manages the Park. Both
the Park and the Museum are under the
auspices of the City of St. Ignace. Based
on the archaeological context, the
human remains date to A.D. 17th
century, when Native Americans
representing many different cultures,
including but not limited to, the Wendat
(Huron), Anishinaabek [Ojibwa/Ojibwe
(Chippewa), Odawa (Ottawa)],
Bode´wadmi (Potawatomi), and
Haudenosaunee (Iroquois), lived in
proximity to the Marquette Mission site.
Determinations Made by the Museum of
Ojibwa Culture and Marquette Mission
Park, City of St. Ignace
Officials of the Museum of Ojibwa
Culture and Marquette Mission Park,
City of St. Ignace have determined that:
• Pursuant to 25 U.S.C. 3001(9), the
human remains described in this notice
are Native American based on the
biological and archeological evidence.
• Pursuant to 25 U.S.C. 3001(9), the
human remains described in this notice
represent the physical remains of three
individuals of Native American
ancestry.
• Pursuant to 25 U.S.C. 3001(2), a
relationship of shared group identity
cannot be reasonably traced between the
Native American human remains and
any present-day Indian tribe.
• According to final judgments of the
Indian Claims Commission or the Court
of Federal Claims, or Treaties, Acts of
Congress, or Executive Orders, the land
from which the Native American human
remains were removed is the aboriginal
land of the Absentee-Shawnee Tribe of
Indians of Oklahoma; Bad River Band of
the Lake Superior Tribe of Chippewa
Indians of the Bad River Reservation,
Wisconsin; Bay Mills Indian
Community, Michigan; Chippewa Cree
Indians of the Rocky Boy’s Reservation,
Montana (previously listed as the
Chippewa-Cree Indians of the Rocky
Boy’s Reservation, Montana); Citizen
Potawatomi Nation, Oklahoma;
Delaware Nation, Oklahoma; Delaware
Tribe of Indians; Eastern Shawnee Tribe
of Oklahoma; Forest County Potawatomi
Community, Wisconsin; Grand Traverse
Band of Ottawa and Chippewa Indians,
Michigan; Hannahville Indian
Community, Michigan; Keweenaw Bay
Indian Community, Michigan; Kickapoo
Traditional Tribe of Texas; Kickapoo
Tribe of Indians of the Kickapoo
Reservation in Kansas; Kickapoo Tribe
of Oklahoma; Lac Courte Oreilles Band
of Lake Superior Chippewa Indians of
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
Wisconsin; Lac du Flambeau Band of
Lake Superior Chippewa Indians of the
Lac du Flambeau Reservation of
Wisconsin; Lac Vieux Desert Band of
Lake Superior Chippewa Indians of
Michigan; Little River Band of Ottawa
Indians, Michigan; Little Traverse Bay
Bands of Odawa Indians, Michigan;
Match-e-be-nash-she-wish Band of
Pottawatomi Indians of Michigan;
Miami Tribe of Oklahoma; Minnesota
Chippewa Tribe, Minnesota (Six
component reservations: Bois Forte
Band (Nett Lake); Fond du Lac Band;
Grand Portage Band; Leech Lake Band;
Mille Lacs Band; White Earth Band);
Nottawaseppi Huron Band of the
Potawatomi, Michigan (previously listed
as the Huron Potawatomi, Inc.); Ottawa
Tribe of Oklahoma; Peoria Tribe of
Indians of Oklahoma; Pokagon Band of
Potawatomi Indians, Michigan and
Indiana; Prairie Band Potawatomi
Nation (previously listed as the Prairie
Band of Potawatomi Nation, Kansas);
Red Cliff Band of Lake Superior
Chippewa Indians of Wisconsin; Red
Lake Band of Chippewa Indians,
Minnesota; Saginaw Chippewa Indian
Tribe of Michigan; Sault Ste. Marie
Tribe of Chippewa Indians, Michigan;
Shawnee Tribe, Oklahoma; Sokaogon
Chippewa Community, Wisconsin; St.
Croix Chippewa Indians of Wisconsin;
Stockbridge Munsee Community,
Wisconsin; Turtle Mountain Band of
Chippewa Indians of North Dakota; and
Wyandotte Nation (hereinafter referred
to as ‘‘The Tribes’’)
• Pursuant to 43 CFR 10.11(c)(1), the
disposition of the human remains may
be to The Tribes.
Additional Requestors and Disposition
Representatives of any Indian Tribe or
Native Hawaiian organization not
identified in this notice that wish to
request transfer of control of these
human remains should submit a written
request with information in support of
the request to Shirley Sorrels, Director,
Museum of Ojibwa Culture and
Marquette Mission Park, c/o Bernstein &
Associates, 1041 N Lafayette Street,
Denver, CO 80218, telephone (303) 894–
0648, email [email protected], by August
13, 2018. After that date, if no
additional requestors have come
forward, transfer of control of the
human remains to The Tribes may
proceed.
The Museum of Ojibwa Culture and
Marquette Mission Park, City of St.
Ignace is responsible for notifying The
Tribes that this notice has been
published.
PO 00000
Frm 00064
Fmt 4703
Sfmt 4703
32323
Dated: June 11, 2018.
Melanie O’Brien,
Manager, National NAGPRA Program.
[FR Doc. 2018–14900 Filed 7–11–18; 8:45 am]
BILLING CODE 4312–52–P
DEPARTMENT OF THE INTERIOR
National Park Service
[NPS–WASO–NAGPRA–NPS0025755;
PPWOCRADN0–PCU00RP14.R50000]
Notice of Inventory Completion: San
Diego Museum of Man, San Diego, CA
National Park Service, Interior.
Notice.
AGENCY:
ACTION:
The San Diego Museum of
Man has completed an inventory of
human remains, in consultation with
the appropriate Indian Tribes or Native
Hawaiian organizations, and has
determined that there is a cultural
affiliation between the human remains
and present-day Indian Tribes or Native
Hawaiian organizations. Lineal
descendants or representatives of any
Indian Tribe or Native Hawaiian
organization not identified in this notice
that wish to request transfer of control
of these human remains should submit
a written request to the San Diego
Museum of Man. If no additional
requestors come forward, transfer of
control of the human remains to the
lineal descendants, Indian Tribes, or
Native Hawaiian organizations stated in
this notice may proceed.
DATES: Lineal descendants or
representatives of any Indian Tribe or
Native Hawaiian organization not
identified in this notice that wish to
request transfer of control of these
human remains should submit a written
request with information in support of
the request to the San Diego Museum of
Man at the address in this notice by
August 13, 2018.
ADDRESSES: Ben Garcia, Deputy
Director, San Diego Museum of Man,
1350 El Prado, San Diego, CA 92101,
telephone (619) 239–2001 ext. 17, email
[email protected].
SUPPLEMENTARY INFORMATION: Notice is
here given in accordance with the
Native American Graves Protection and
Repatriation Act (NAGPRA), 25 U.S.C.
3003, of the completion of an inventory
of human remains under the control of
the San Diego Museum of Man, San
Diego, CA. The human remains were
removed from Kanaga Island, AK.
This notice is published as part of the
National Park Service’s administrative
responsibilities under NAGPRA, 25
U.S.C. 3003(d)(3). The determinations in
SUMMARY:
E:\FR\FM\12JYN1.SGM
12JYN1
32324
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
this notice are the sole responsibility of
the museum, institution, or Federal
agency that has control of the Native
American human remains. The National
Park Service is not responsible for the
determinations in this notice.
Consultation
A detailed assessment of the human
remains was made by the San Diego
Museum of Man professional staff in
consultation with representatives of the
Aleut Corporation and the Native
Village of Atka.
History and Description of the Remains
At an unknown date, human remains
representing, at minimum, one
individual were removed from Kanaga
Island, part of the Andreanof Islands
group of the Aleutian Islands in Alaska.
These human remains lack conclusive
collection documentation regarding the
date of collection, collector, or specific
geographic location other than a general
association to Kanaga Island. The
human remains were donated to the San
Diego Museum of Man by Lieutenant M.
Nolan some time before 1950. No
known individuals were identified. No
associated funerary objects are present.
An examination of the human
remains by San Diego Museum of Man
physical anthropology professional staff
determined the individual to be Native
Alaskan. The Aleutian Islands are
known to be aboriginal lands of the
modern Aleut peoples. Based on
museum records, geographical location,
physical examination, and consultation,
the museum reasonably believes the
individual is culturally affiliated with
the Native Village of Atka.
amozie on DSK3GDR082PROD with NOTICES1
Determinations Made by the San Diego
Museum of Man
Officials of the San Diego Museum of
Man have determined that:
• Pursuant to 25 U.S.C. 3001(9), the
human remains described in this notice
represent the physical remains of one
individual of Native American ancestry.
• Pursuant to 25 U.S.C. 3001(2), there
is a relationship of shared group
identity that can be reasonably traced
between the Native American human
remains and the Native Village of Atka.
Additional Requestors and Disposition
Lineal descendants or representatives
of any Indian Tribe or Native Hawaiian
organization not identified in this notice
that wish to request transfer of control
of these human remains should submit
a written request with information in
support of the request to Ben Garcia,
Deputy Director, San Diego Museum of
Man, 1350 El Prado, San Diego, CA
92101, telephone (619) 239–2001 ext.
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
17, email [email protected],
by August 13, 2018. After that date, if
no additional requestors have come
forward, transfer of control of the
human remains to the Native Village of
Atka may proceed.
The San Diego Museum of Man is
responsible for notifying the Native
Village of Atka that this notice has been
published.
Dated: June 11, 2018.
Melanie O’Brien,
Manager, National NAGPRA Program.
[FR Doc. 2018–14898 Filed 7–11–18; 8:45 am]
BILLING CODE 4312–52–P
DEPARTMENT OF THE INTERIOR
Office of Surface Mining Reclamation
and Enforcement
[S1D1S SS08011000 SX064A000
189S180110; S2D2S SS08011000
SX064A000 18XS501520; OMB Control
Number 1029–0098]
Agency Information Collection
Activities: Petition Process for
Designation of Federal Lands as
Unsuitable for All or Certain Types of
Surface Coal Mining Operations and
for Termination of Previous
Designations
Office of Surface Mining
Reclamation and Enforcement, Interior.
ACTION: Notice of information collection;
request for comment.
AGENCY:
In accordance with the
Paperwork Reduction Act of 1995, we,
the Office of Surface Mining
Reclamation and Enforcement (OSMRE),
are announcing our intention to request
renewed approval for the collection of
information that establishes the
minimum procedures and standards for
designating Federal lands unsuitable for
certain types of surface mining
operations and for terminating
designations pursuant to a petition. The
information requested will aid the
regulatory authority in the decision
making process to approve or
disapprove a request. This information
collection activity was previously
approved by the Office of Management
and Budget (OMB), and assigned control
number 1029–0098.
DATES: Interested persons are invited to
submit comments on or before
September 10, 2018.
ADDRESSES: Send your comments on
this information collection request (ICR)
by mail to: The Office of Surface Mining
Reclamation and Enforcement,
Information Collection Clearance
Officer, Attn: John Trelease, 1849 C
SUMMARY:
PO 00000
Frm 00065
Fmt 4703
Sfmt 4703
Street NW; Mail Stop 4559, Washington,
DC 20240. Comments may also be
submitted electronically to jtrelease@
osmre.gov.
To
request additional information about
this ICR, contact John Trelease by email
at [email protected], or by telephone
at (202) 208–2783.
SUPPLEMENTARY INFORMATION: In
accordance with the Paperwork
Reduction Act of 1995, we provide the
general public and other Federal
agencies with an opportunity to
comment on new, proposed, revised,
and continuing collections of
information. This helps us assess the
impact of our information collection
requirements and minimize the public’s
reporting burden. It also helps the
public understand our information
collection requirements and provide the
requested data in the desired format.
We are soliciting comments on the
proposed ICR that is described below.
We are especially interested in public
comment addressing the following
issues: (1) Is the collection necessary to
the proper functions of the OSMRE; (2)
is the estimate of burden accurate; (3)
how might the OSMRE enhance the
quality, utility, and clarity of the
information to be collected; and (4) how
might the OSMRE minimize the burden
of this collection on the respondents,
including through the use of
information technology.
Comments that you submit in
response to this notice are a matter of
public record. We will include or
summarize each comment in our request
to OMB to approve this ICR. Before
including your address, phone number,
email address, or other personal
identifying information in your
comment, you should be aware that
your entire comment—including your
personal identifying information—may
be made publicly available at any time.
While you can ask us in your comment
to withhold your personal identifying
information from public review, we
cannot guarantee that we will be able to
do so.
This notice provides the public with
60 days in which to comment on the
following information collection
activity:
Title of Collection: 30 CFR part 769—
Petition process for designation of
Federal lands as unsuitable for all or
certain types of surface coal mining
operations and for termination of
previous designations.
OMB Control Number: 1029–0098.
Abstract: This part establishes the
minimum procedures and standards for
designating Federal lands unsuitable for
FOR FURTHER INFORMATION CONTACT:
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
certain types of surface mining
operations and for terminating
designations pursuant to a petition. The
information requested will aid the
regulatory authority in the decision
making process to approve or
disapprove a request.
Form Number: None.
Type of Review: Extension of a
currently approved collection.
Respondents/Affected Public: People
who may be adversely affected by
surface mining on Federal lands.
Total Estimated Number of Annual
Respondents: One every three years.
Total Estimated Number of Annual
Responses: One every three years.
Estimated Completion Time per
Response: 3,000 hours.
Total Estimated Number of Annual
Burden Hours: 1,000 hours annually.
Respondent’s Obligation: Required to
obtain or retain a benefit.
Frequency of Collection: Once.
Total Estimated Annual Nonhour
Burden Cost: $0.
An agency may not conduct or
sponsor and a person is not required to
respond to a collection of information
unless it displays a currently valid OMB
control number.
Authority: The authorities for this action
are the Surface Mining Control and
Reclamation Act of 1977, as amended (30
U.S.C. 1201 et seq.), and the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501 et
seq.).
John A. Trelease,
Acting Chief, Division of Regulatory Support.
[FR Doc. 2018–14891 Filed 7–11–18; 8:45 am]
BILLING CODE 4310–05–P
DEPARTMENT OF THE INTERIOR
Office of Surface Mining Reclamation
and Enforcement
[S1D1S SS08011000 SX064A000
189S180110; S2D2S SS08011000
SX064A000 18XS501520; OMB Control
Number 1029–0051]
Agency Information Collection
Activities: State Regulatory Authority:
Inspection and Enforcement
Office of Surface Mining
Reclamation and Enforcement, Interior.
ACTION: Notice of information collection;
request for comment.
amozie on DSK3GDR082PROD with NOTICES1
AGENCY:
In accordance with the
Paperwork Reduction Act of 1995, we,
the Office of Surface Mining
Reclamation and Enforcement (OSMRE),
are announcing our intention to request
renewed approval for the collection of
SUMMARY:
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
information which requires that each
regulatory authority conduct periodic
inspections of coal mining activities,
and prepare and maintain inspection
reports and other related documents for
OSMRE and public review. This
information collection activity was
previously approved by the Office of
Management and Budget (OMB), and
assigned control number 1029–0051.
DATES: Interested persons are invited to
submit comments on or before
September 10, 2018.
ADDRESSES: Send your comments on
this information collection request (ICR)
by mail to: The Office of Surface Mining
Reclamation and Enforcement,
Information Collection Clearance
Officer, Attn: John Trelease,
1849 C Street NW, Mail Stop 4559,
Washington, DC 20240. Comments may
also be submitted electronically to
[email protected].
FOR FURTHER INFORMATION CONTACT: To
request additional information about
this ICR, contact John Trelease by email
at [email protected], or by telephone
at (202) 208–2783.
SUPPLEMENTARY INFORMATION: In
accordance with the Paperwork
Reduction Act of 1995, we provide the
general public and other Federal
agencies with an opportunity to
comment on new, proposed, revised,
and continuing collections of
information. This helps us assess the
impact of our information collection
requirements and minimize the public’s
reporting burden. It also helps the
public understand our information
collection requirements and provide the
requested data in the desired format.
We are soliciting comments on the
proposed ICR that is described below.
We are especially interested in public
comment addressing the following
issues: (1) Is the collection necessary to
the proper functions of the OSMRE; (2)
is the estimate of burden accurate; (3)
how might the OSMRE enhance the
quality, utility, and clarity of the
information to be collected; and (4) how
might the OSMRE minimize the burden
of this collection on the respondents,
including through the use of
information technology.
Comments that you submit in
response to this notice are a matter of
public record. We will include or
summarize each comment in our request
to OMB to approve this ICR. Before
including your address, phone number,
email address, or other personal
identifying information in your
comment, you should be aware that
your entire comment—including your
personal identifying information—may
PO 00000
Frm 00066
Fmt 4703
Sfmt 4703
32325
be made publicly available at any time.
While you can ask us in your comment
to withhold your personal identifying
information from public review, we
cannot guarantee that we will be able to
do so.
This notice provides the public with
60 days in which to comment on the
following information collection
activity:
Title of Collection: 30 CFR part 840—
State Regulatory Authority: Inspection
and Enforcement.
OMB Control Number: 1029–0051.
Abstract: This provision requires the
regulatory authority to conduct periodic
inspections of coal mining activities,
and prepare and maintain inspection
reports and other related documents for
OSMRE and public review. This
information is necessary to meet the
requirements of the Surface Mining
Control and Reclamation Act of 1977
and its public participation provisions.
Public review assures the public that the
State is meeting the requirements of the
Act and approved State regulatory
program.
Form Number: None.
Type of Review: Extension of a
currently approved collection.
Respondents/Affected Public: State
Regulatory Authorities.
Total Estimated Number of Annual
Respondents: 24 States.
Total Estimated Number of Annual
Responses: 106,382.
Estimated Completion Time per
Response: From 4.7 hours to 1,081
hours per response depending on
activity.
Total Estimated Number of Annual
Burden Hours: 296,938 hours for States.
Respondent’s Obligation: Required to
obtain or retain a benefit.
Frequency of Collection: Once,
annually, quarterly, and monthly.
Total Estimated Annual Nonhour
Burden Cost: $1,440.
An agency may not conduct or
sponsor and a person is not required to
respond to a collection of information
unless it displays a currently valid OMB
control number.
Authority: The authorities for this
action are the Surface Mining Control
and Reclamation Act of 1977, as
amended (30 U.S.C. 1201 et seq.), and
the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.).
John A. Trelease,
Acting Chief, Division of Regulatory Support.
[FR Doc. 2018–14892 Filed 7–11–18; 8:45 am]
BILLING CODE 4310–05–P
E:\FR\FM\12JYN1.SGM
12JYN1
32326
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
DEPARTMENT OF THE INTERIOR
Office of Surface Mining Reclamation
and Enforcement
[S1D1S SS08011000 SX064A000
189S180110; S2D2S SS08011000
SX064A000 18XS501520; OMB Control
Number 1029–0094]
Agency Information Collection
Activities: General
Office of Surface Mining
Reclamation and Enforcement, Interior.
ACTION: Notice of information collection;
request for comment.
AGENCY:
In accordance with the
Paperwork Reduction Act of 1995, we,
the Office of Surface Mining
Reclamation and Enforcement (OSMRE),
are announcing our intention to request
renewed approval for the collection of
information establishes procedures and
requirements for terminating
jurisdiction of surface coal mining and
reclamation operations, petitions for
rulemaking, and citizen suits filed
under the Surface Mining Control and
Reclamation Act of 1977. This
information collection activity was
previously approved by the Office of
Management and Budget (OMB), and
assigned control number 1029–0094.
DATES: Interested persons are invited to
submit comments on or before
September 10, 2018.
ADDRESSES: Send your comments on
this information collection request (ICR)
by mail to: The Office of Surface Mining
Reclamation and Enforcement,
Information Collection Clearance
Officer, Attn: John Trelease, 1849
C Street NW, Mail Stop 4559,
Washington, DC 20240. Comments may
also be submitted electronically to
[email protected].
FOR FURTHER INFORMATION CONTACT: To
request additional information about
this ICR, contact John Trelease by email
at [email protected], or by telephone
at (202) 208–2783.
SUPPLEMENTARY INFORMATION: In
accordance with the Paperwork
Reduction Act of 1995, we provide the
general public and other Federal
agencies with an opportunity to
comment on new, proposed, revised,
and continuing collections of
information. This helps us assess the
impact of our information collection
requirements and minimize the public’s
reporting burden. It also helps the
public understand our information
collection requirements and provide the
requested data in the desired format.
We are soliciting comments on the
proposed ICR that is described below.
amozie on DSK3GDR082PROD with NOTICES1
SUMMARY:
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
We are especially interested in public
comment addressing the following
issues: (1) Is the collection necessary to
the proper functions of the OSMRE; (2)
is the estimate of burden accurate; (3)
how might the OSMRE enhance the
quality, utility, and clarity of the
information to be collected; and (4) how
might the OSMRE minimize the burden
of this collection on the respondents,
including through the use of
information technology.
Comments that you submit in
response to this notice are a matter of
public record. We will include or
summarize each comment in our request
to OMB to approve this ICR. Before
including your address, phone number,
email address, or other personal
identifying information in your
comment, you should be aware that
your entire comment—including your
personal identifying information—may
be made publicly available at any time.
While you can ask us in your comment
to withhold your personal identifying
information from public review, we
cannot guarantee that we will be able to
do so.
This notice provides the public with
60 days in which to comment on the
following information collection
activity:
Title of Collection: 30 CFR part 700—
General.
OMB Control Number: 1029–0094.
Abstract: The information requested
by this part establishes procedures and
requirements for terminating
jurisdiction of surface coal mining and
reclamation operations, petitions for
rulemaking, and citizen suits filed
under the Surface Mining Control and
Reclamation Act of 1977.
Form Number: None.
Type of Review: Extension of a
currently approved collection.
Respondents/Affected Public: State
and Tribal regulatory authorities,
private citizens and citizen groups, and
surface coal mining companies.
Total Estimated Number of Annual
Respondents: 23 respondents.
Total Estimated Number of Annual
Responses: 23 responses.
Estimated Completion Time per
Response: Varies from 1 to 50 hours.
Total Estimated Number of Annual
Burden Hours: 80 hours.
Respondent’s Obligation: Required to
obtain or retain a benefit.
Frequency of Collection: Once.
Total Estimated Annual Nonhour
Burden Cost: $0.
An agency may not conduct or
sponsor and a person is not required to
respond to a collection of information
unless it displays a currently valid OMB
control number.
PO 00000
Frm 00067
Fmt 4703
Sfmt 4703
Authority:The authorities for this
action are the Surface Mining Control
and Reclamation Act of 1977, as
amended (30 U.S.C. 1201 et seq.), and
the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.).
John A. Trelease,
Acting Chief, Division of Regulatory Support.
[FR Doc. 2018–14890 Filed 7–11–18; 8:45 am]
BILLING CODE 4310–05–P
DEPARTMENT OF THE INTERIOR
Office of Surface Mining Reclamation
and Enforcement
[S1D1S SS08011000 SX064A000
189S180110; S2D2S SS08011000
SX064A000 18XS501520; OMB Control
Number 1029–0057]
Agency Information Collection
Activities: Reclamation on Private
Lands
Office of Surface Mining
Reclamation and Enforcement, Interior.
ACTION: Notice of information collection;
request for comment.
AGENCY:
In accordance with the
Paperwork Reduction Act of 1995, we,
the Office of Surface Mining
Reclamation and Enforcement (OSMRE),
are announcing our intention to request
renewed approval for the collection of
information which authorizes Federal,
State, and Tribal governments to reclaim
private lands and allows for the
establishment of procedures for the
recovery of the cost of reclamation
activities on privately owned lands.
This information collection activity was
previously approved by the Office of
Management and Budget (OMB), and
assigned control number 1029–0057.
DATES: Interested persons are invited to
submit comments on or before
September 10, 2018.
ADDRESSES: Send your comments on
this information collection request (ICR)
by mail to: The Office of Surface Mining
Reclamation and Enforcement,
Information Collection Clearance
Officer, Attn: John Trelease, 1849
C Street NW, Mail Stop 4559,
Washington, DC 20240. Comments may
also be submitted electronically to
[email protected].
FOR FURTHER INFORMATION CONTACT: To
request additional information about
this ICR, contact John Trelease by email
at [email protected], or by telephone
at (202) 208–2783.
SUPPLEMENTARY INFORMATION: In
accordance with the Paperwork
Reduction Act of 1995, we provide the
general public and other Federal
SUMMARY:
E:\FR\FM\12JYN1.SGM
12JYN1
amozie on DSK3GDR082PROD with NOTICES1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
agencies with an opportunity to
comment on new, proposed, revised,
and continuing collections of
information. This helps us assess the
impact of our information collection
requirements and minimize the public’s
reporting burden. It also helps the
public understand our information
collection requirements and provide the
requested data in the desired format.
We are soliciting comments on the
proposed ICR that is described below.
We are especially interested in public
comment addressing the following
issues: (1) Is the collection necessary to
the proper functions of the OSMRE; (2)
is the estimate of burden accurate; (3)
how might the OSMRE enhance the
quality, utility, and clarity of the
information to be collected; and (4) how
might the OSMRE minimize the burden
of this collection on the respondents,
including through the use of
information technology.
Comments that you submit in
response to this notice are a matter of
public record. We will include or
summarize each comment in our request
to OMB to approve this ICR. Before
including your address, phone number,
email address, or other personal
identifying information in your
comment, you should be aware that
your entire comment—including your
personal identifying information—may
be made publicly available at any time.
While you can ask us in your comment
to withhold your personal identifying
information from public review, we
cannot guarantee that we will be able to
do so.
This notice provides the public with
60 days in which to comment on the
following information collection
activity:
Title of Collection: 30 CFR part 882—
Reclamation on Private Lands.
OMB Control Number: 1029–0057.
Abstract: Public Law 95–87
authorizes Federal, State, and Tribal
governments to reclaim private lands
and allows for the establishment of
procedures for the recovery of the cost
of reclamation activities on privately
owned lands. These procedures are
intended to ensure that governments
have sufficient capability to file liens so
that certain landowners will not receive
a windfall from reclamation.
Form Number: None.
Type of Review: Extension of a
currently approved collection.
Respondents/Affected Public: State
governments and Indian Tribes.
Total Estimated Number of Annual
Respondents: 1 State or Tribe.
Total Estimated Number of Annual
Responses: 1.
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
Estimated Completion Time per
Response: 120 hours.
Total Estimated Number of Annual
Burden Hours: 120 hours.
Respondent’s Obligation: Required to
obtain or retain a benefit.
Frequency of Collection: Once.
Total Estimated Annual Nonhour
Burden Cost: $0.
An agency may not conduct or
sponsor and a person is not required to
respond to a collection of information
unless it displays a currently valid OMB
control number.
Authority:The authorities for this
action are the Surface Mining Control
and Reclamation Act of 1977, as
amended (30 U.S.C. 1201 et seq.), and
the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.).
John A. Trelease,
Acting Chief, Division of Regulatory Support.
[FR Doc. 2018–14893 Filed 7–11–18; 8:45 am]
BILLING CODE 4310–05–P
DEPARTMENT OF THE INTERIOR
Office of Surface Mining Reclamation
and Enforcement
[S1D1S SS08011000 SX064A000
189S180110; S2D2S SS08011000
SX064A000 18XS501520; OMB Control
Number 1029–0087]
Agency Information Collection
Activities: OSM–76—Abandoned Mine
Land Problem Area Description Form
Office of Surface Mining
Reclamation and Enforcement, Interior.
ACTION: Notice of information collection;
request for comment.
AGENCY:
In accordance with the
Paperwork Reduction Act of 1995, we,
the Office of Surface Mining
Reclamation and Enforcement (OSMRE),
are announcing our intention to request
renewed approval for the collection of
information which is used to update the
Office of Surface Mining Reclamation
and Enforcement’s electronic inventory
of abandoned mine lands (e-AMLIS).
From this inventory, the most serious
problem areas are selected for
reclamation through the apportionment
of funds to States and Indian tribes. This
information collection activity was
previously approved by the Office of
Management and Budget (OMB), and
assigned control number 1029–0087.
DATES: Interested persons are invited to
submit comments on or before
September 10, 2018.
ADDRESSES: Send your comments on
this information collection request (ICR)
by mail to: The Office of Surface Mining
SUMMARY:
PO 00000
Frm 00068
Fmt 4703
Sfmt 4703
32327
Reclamation and Enforcement,
Information Collection Clearance
Officer, Attn: John Trelease, 1849
C Street NW, Mail Stop 4559,
Washington, DC 20240. Comments may
also be submitted electronically to
[email protected].
FOR FURTHER INFORMATION CONTACT: To
request additional information about
this ICR, contact John Trelease by email
at [email protected], or by telephone
at (202) 208–2783.
SUPPLEMENTARY INFORMATION: In
accordance with the Paperwork
Reduction Act of 1995, we provide the
general public and other Federal
agencies with an opportunity to
comment on new, proposed, revised,
and continuing collections of
information. This helps us assess the
impact of our information collection
requirements and minimize the public’s
reporting burden. It also helps the
public understand our information
collection requirements and provide the
requested data in the desired format.
We are soliciting comments on the
proposed ICR that is described below.
We are especially interested in public
comment addressing the following
issues: (1) Is the collection necessary to
the proper functions of the OSMRE; (2)
is the estimate of burden accurate; (3)
how might the OSMRE enhance the
quality, utility, and clarity of the
information to be collected; and (4) how
might the OSMRE minimize the burden
of this collection on the respondents,
including through the use of
information technology.
Comments that you submit in
response to this notice are a matter of
public record. We will include or
summarize each comment in our request
to OMB to approve this ICR. Before
including your address, phone number,
email address, or other personal
identifying information in your
comment, you should be aware that
your entire comment—including your
personal identifying information—may
be made publicly available at any time.
While you can ask us in your comment
to withhold your personal identifying
information from public review, we
cannot guarantee that we will be able to
do so.
This notice provides the public with
60 days in which to comment on the
following information collection
activity:
Title of Collection: Abandoned Mine
Land Problem Area Description Form.
OMB Control Number: 1029–0087.
Abstract: The problem area
description (PAD) form is used to
update the Office of Surface Mining
Reclamation and Enforcement’s
E:\FR\FM\12JYN1.SGM
12JYN1
32328
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
electronic inventory of abandoned mine
lands (e-AMLIS). From this inventory,
the most serious problem areas are
selected for reclamation through the
apportionment of funds to States and
Indian tribes.
Form Number: OSM–76.
Type of Review: Extension of a
currently approved collection.
Respondents/Affected Public: State
and Tribal governments.
Total Estimated Number of Annual
Respondents: 27 State and Tribal
governments.
Total Estimated Number of Annual
Responses: 1,888 responses.
Estimated Completion Time per
Response: An average of 8 hours per
new PAD and 1.5 hours for an updated
PAD.
Total Estimated Number of Annual
Burden Hours: 5,016 hours.
Respondent’s Obligation: Required to
obtain or retain a benefit.
Frequency of Collection: Once.
Total Estimated Annual Nonhour
Burden Cost: $0.
An agency may not conduct or
sponsor and a person is not required to
respond to a collection of information
unless it displays a currently valid OMB
control number.
Authority: The authorities for this
action are the Surface Mining Control
and Reclamation Act of 1977, as
amended (30 U.S.C. 1201 et seq.), and
the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.).
John A. Trelease,
Acting Chief, Division of Regulatory Support.
[FR Doc. 2018–14894 Filed 7–11–18; 8:45 am]
BILLING CODE 4310–05–P
DEPARTMENT OF THE INTERIOR
Office of Surface Mining Reclamation
and Enforcement
[S1D1S SS08011000 SX064A000
189S180110; S2D2S SS08011000
SX064A000 18XS501520; OMB Control
Number 1029–0120]
amozie on DSK3GDR082PROD with NOTICES1
Agency Information Collection
Activities: Nomination and Request for
Payment Form for OSMRE’s National
Technical Training Courses
Office of Surface Mining
Reclamation and Enforcement, Interior.
ACTION: Notice of information collection;
request for comment.
AGENCY:
In accordance with the
Paperwork Reduction Act of 1995, we,
the Office of Surface Mining
SUMMARY:
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
Reclamation and Enforcement (OSMRE),
are announcing our intention to request
renewed approval for the collection of
information which is used to identify
and evaluate the training courses
requested by students to enhance their
job performance, to calculate the
number of classes and instructors
needed to complete OSMRE’s technical
training mission, and to estimate costs
to the training program. This
information collection activity was
previously approved by the Office of
Management and Budget (OMB), and
assigned control number 1029–0120.
DATES: Interested persons are invited to
submit comments on or before
September 10, 2018.
ADDRESSES: Send your comments on
this information collection request (ICR)
by mail to: The Office of Surface Mining
Reclamation and Enforcement,
Information Collection Clearance
Officer, Attn: John Trelease, 1849
C Street NW, Mail Stop 4559,
Washington, DC 20240. Comments may
also be submitted electronically to
[email protected].
FOR FURTHER INFORMATION CONTACT: To
request additional information about
this ICR, contact John Trelease by email
at [email protected], or by telephone
at (202) 208–2783.
SUPPLEMENTARY INFORMATION: In
accordance with the Paperwork
Reduction Act of 1995, we provide the
general public and other Federal
agencies with an opportunity to
comment on new, proposed, revised,
and continuing collections of
information. This helps us assess the
impact of our information collection
requirements and minimize the public’s
reporting burden. It also helps the
public understand our information
collection requirements and provide the
requested data in the desired format.
We are soliciting comments on the
proposed ICR that is described below.
We are especially interested in public
comment addressing the following
issues: (1) Is the collection necessary to
the proper functions of the OSMRE; (2)
is the estimate of burden accurate; (3)
how might the OSMRE enhance the
quality, utility, and clarity of the
information to be collected; and (4) how
might the OSMRE minimize the burden
of this collection on the respondents,
including through the use of
information technology.
Comments that you submit in
response to this notice are a matter of
public record. We will include or
summarize each comment in our request
to OMB to approve this ICR. Before
PO 00000
Frm 00069
Fmt 4703
Sfmt 4703
including your address, phone number,
email address, or other personal
identifying information in your
comment, you should be aware that
your entire comment—including your
personal identifying information—may
be made publicly available at any time.
While you can ask us in your comment
to withhold your personal identifying
information from public review, we
cannot guarantee that we will be able to
do so.
This notice provides the public with
60 days in which to comment on the
following information collection
activity:
Title of Collection: Nomination and
Request for Payment Form for OSMRE’s
National Technical Training Courses.
OMB Control Number: 1029–0120.
Abstract: The form is used to identify
and evaluate the training courses
requested by students to enhance their
job performance, to calculate the
number of classes and instructors
needed to complete OSMRE’s technical
training mission, and to estimate costs
to the training program.
Form Number: OSM–105.
Type of Review: Extension of a
currently approved collection.
Respondents/Affected Public: State
and Tribal regulatory and reclamation
employees.
Total Estimated Number of Annual
Respondents: 944 respondents.
Total Estimated Number of Annual
Responses: 944 responses.
Estimated Completion Time per
Response: 120 hours.
Total Estimated Number of Annual
Burden Hours: 79 hours.
Respondent’s Obligation: Required to
obtain or retain a benefit.
Frequency of Collection: Once.
Total Estimated Annual Nonhour
Burden Cost: $0.
An agency may not conduct or
sponsor and a person is not required to
respond to a collection of information
unless it displays a currently valid OMB
control number.
Authority: The authorities for this
action are the Surface Mining Control
and Reclamation Act of 1977, as
amended (30 U.S.C. 1201 et seq.), and
the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.).
John A. Trelease,
Acting Chief, Division of Regulatory Support.
[FR Doc. 2018–14895 Filed 7–11–18; 8:45 am]
BILLING CODE 4310–05–P
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
INTERNATIONAL TRADE
COMMISSION
[Investigation Nos. 701–TA–607 and 731–
TA–1417 and 1419 (Preliminary)]
Steel Propane Cylinders From China
and Thailand
Determinations
On the basis of the record 1 developed
in the subject investigations, the United
States International Trade Commission
(‘‘Commission’’) determines, pursuant
to the Tariff Act of 1930 (‘‘the Act’’),
that there is a reasonable indication that
an industry in the United States is
materially injured by reason of imports
of steel propane cylinders from China
and Thailand that are alleged to be sold
in the United States at less than fair
value (‘‘LTFV’’) and imports of steel
propane cylinders from China that are
allegedly subsidized by the government
of China.2 3 The products subject to
these investigations are provided for in
heading 7311.00.00 of the Harmonized
Tariff Schedule of the United States.
amozie on DSK3GDR082PROD with NOTICES1
Commencement of Final Phase
Investigations
Pursuant to section 207.18 of the
Commission’s rules, the Commission
also gives notice of the commencement
of the final phase of its investigations.
The Commission will issue a final phase
notice of scheduling, which will be
published in the Federal Register as
provided in section 207.21 of the
Commission’s rules, upon notice from
the U.S. Department of Commerce
(‘‘Commerce’’) of affirmative
preliminary determinations in the
investigations under sections 703(b) or
733(b) of the Act, or, if the preliminary
determinations are negative, upon
notice of affirmative final
determinations in those investigations
under sections 705(a) or 735(a) of the
Act. Parties that filed entries of
appearance in the preliminary phase of
the investigations need not enter a
separate appearance for the final phase
of the investigations. Industrial users,
and, if the merchandise under
investigation is sold at the retail level,
representative consumer organizations
have the right to appear as parties in
Commission antidumping and
countervailing duty investigations. The
1 The record is defined in sec. 207.2(f) of the
Commission’s Rules of Practice and Procedure (19
CFR 207.2(f)).
2 Steel Propane Cylinders from the People’s
Republic of China, Taiwan, and Thailand: Initiation
of Less-Than-Fair-Value Investigations, 83 FR
28189, June 18, 2018; Steel Propane Cylinders from
China: Initiation of Countervailing Duty
Investigation, 83 FR 28196, June 18, 2018.
3 Commissioner Jason Kearns not participating.
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
Secretary will prepare a public service
list containing the names and addresses
of all persons, or their representatives,
who are parties to the investigations.
Background
On May 22, 2018, Worthington
Industries Inc., Columbus, Ohio, and
Manchester Tank and Equipment,
Franklin, Tennessee, filed petitions with
the Commission and Commerce,
alleging that an industry in the United
States is materially injured or
threatened with material injury by
reason of subsidized imports of steel
propane cylinders from China and LTFV
imports of steel propane cylinders from
China, Taiwan, and Thailand.
Accordingly, effective May 22, 2018, the
Commission, pursuant to sections 703(a)
and 733(a) of the Act (19 U.S.C.
1671b(a) and 1673b(a)), instituted
countervailing duty investigation No.
701–TA–607 and antidumping duty
investigation Nos. 731–TA–1417–1419
(Preliminary). On June 14, 2018,
petitioners withdrew the antidumping
duty petition covering imports from
Taiwan and the investigation was
subsequently terminated.4
Notice of the institution of the
Commission’s investigations and of a
public conference to be held in
connection therewith was given by
posting copies of the notice in the Office
of the Secretary, U.S. International
Trade Commission, Washington, DC,
and by publishing the notice in the
Federal Register of May 29, 2018 (83 FR
24491). The conference was held in
Washington, DC, on June 12, 2018, and
all persons who requested the
opportunity were permitted to appear in
person or by counsel.
The Commission made these
determinations pursuant to sections
703(a) and 733(a) of the Act (19 U.S.C.
1671b(a) and 1673b(a)). It completed
and filed its determinations in these
investigations on July 6, 2018. The
views of the Commission are contained
in USITC Publication 4804 (July 2018),
entitled Steel Propane Cylinders from
China and Thailand: Investigation Nos.
701–TA–607 and 731–TA–1417 and
1419 (Preliminary).
By order of the Commission.
Issued: July 6, 2018.
Jessica Mullan,
Attorney-Advisor.
32329
INTERNATIONAL TRADE
COMMISSION
[Investigation No. 731–TA–894 (Third
Review)]
Ammonium Nitrate From Ukraine;
Termination of Five-Year Review
United States International
Trade Commission.
ACTION: Notice.
AGENCY:
The Commission instituted
the subject five-year review in May 2018
to determine whether revocation of the
antidumping duty order on Ammonium
Nitrate from Ukraine would be likely to
lead to continuation or recurrence of
material injury. On June 18, 2018, the
Department of Commerce published
notice that it was revoking the order
effective June 12, 2018, because no
domestic interested party filed a notice
of intent to participate. Accordingly, the
subject review is terminated.
DATES: June 29, 2018.
FOR FURTHER INFORMATION CONTACT:
Lawrence Jones (202–205–3358), Office
of Investigations, U.S. International
Trade Commission, 500 E Street SW,
Washington, DC 20436. Hearingimpaired individuals are advised that
information on this matter can be
obtained by contacting the
Commission’s TDD terminal on 202–
205–1810. Persons with mobility
impairments who will need special
assistance in gaining access to the
Commission should contact the Office
of the Secretary at 202–205–2000.
General information concerning the
Commission may also be obtained by
accessing its internet server (https://
www.usitc.gov).
Authority: This review is being
terminated under authority of title VII of
the Tariff Act of 1930 and pursuant to
section 751(c) of the Tariff Act of 1930
(19 U.S.C. 1675(c)). This notice is
published pursuant to section 207.69 of
the Commission’s rules (19 CFR 207.69).
SUMMARY:
By order of the Commission.
Issued: July 6, 2018.
Jessica Mullan,
Attorney-Advisor.
[FR Doc. 2018–14883 Filed 7–11–18; 8:45 am]
BILLING CODE 7020–02–P
DEPARTMENT OF JUSTICE
[FR Doc. 2018–14886 Filed 7–11–18; 8:45 am]
BILLING CODE 7020–02–P
4 Steel Propane Cylinders from Taiwan:
Termination of Less-Than-Fair-Value Investigation,
83 FR 29748, June 26, 2018; Steel Propane
Cylinders from Taiwan: Termination of
Investigation, 83 FR 31174, July 3, 2018.
PO 00000
Frm 00070
Fmt 4703
Sfmt 4703
Notice of Lodging of Proposed
Consent Decree Under the Oil
Pollution Act
On July 5, 2018, the Department of
Justice lodged a proposed Consent
Decree with the United States District
E:\FR\FM\12JYN1.SGM
12JYN1
amozie on DSK3GDR082PROD with NOTICES1
32330
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
Court for the Eastern District of
Louisiana in the lawsuit entitled United
States of America and Louisiana v.
Shell Offshore Inc., Civil Action No.
2:18–cv–6495. The United States is
acting at the request of the designated
federal trustees: National Oceanic and
Atmospheric Administration (‘‘NOAA’’)
and the United States Department of the
Interior (‘‘DOI’’) through the United
States Fish and Wildlife Service. The
State of Louisiana is acting through its
designated State trustees: The Louisiana
Oil Spill Coordinator’s Office,
Department of Public Safety (‘‘LOSCO’’),
Louisiana Department of Natural
Resources (‘‘LDNR’’), Louisiana
Department of Environmental Quality
(‘‘LDEQ’’), Louisiana Department of
Wildlife and Fisheries (‘‘LDWF’’), and
the Coastal Protection and Restoration
Authority (‘‘CPRA’’).
This is a civil action brought against
Defendant Shell Offshore Inc. (‘‘Shell’’)
for recovery of damages for injury to,
destruction of, loss of, or loss of use of
natural resources, under Section 1002 of
the Oil Pollution Act (‘‘OPA’’), 33 U.S.C.
2702, and Section 2480 of the Louisiana
Oil Spill Prevention and Response Act
(‘‘OSPRA’’), La. Rev. Stat. 30:2480. The
United States and Louisiana seek
damages in order to compensate for and
restore natural resources injured by
Shell’s crude oil spill that occurred at
Shell’s Green Canyon Block 248 subsea
oil production system in the Gulf of
Mexico beginning on or about May 11,
2016. The United States and the State
also seek to recover unreimbursed costs
of assessing such injuries.
The Complaint in this natural
resource damages case was filed against
Shell concurrently with the lodging of
the proposed Consent Decree. The
Complaint alleges that Shell is liable for
damages under OPA and OSPRA. The
Complaint alleges that Shell discharged
crude oil into the Gulf of Mexico in May
2016 and that natural resources were
injured as a result of the discharge.
Under the proposed Consent Decree,
Shell will pay a total of $3,871,169.54.
Of this total, Shell will pay $3.625
million to the trustees to restore,
replace, or acquire the equivalent of the
natural resources allegedly injured,
destroyed, or lost as a result of the oil
spill and $246,169.54 to reimburse the
trustees for all remaining unpaid
assessment costs.
The publication of this notice opens
a period for public comment on the
proposed Consent Decree. Comments
should be addressed to the Acting
Assistant Attorney General,
Environment and Natural Resources
Division, and should refer to United
States of America and Louisiana v.
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
Shell Offshore Inc., D.J. Ref. No. 90–5–
1–1–11920. All comments must be
submitted no later than thirty (30) days
after the publication date of this notice.
Comments may be submitted by either
email or by mail:
To submit
comments:
Send them to:
By email .......
pubcomment-ees.enrd@
usdoj.gov.
Acting Assistant Attorney
General, U.S. DOJ—ENRD,
P.O. Box 7611, Washington, DC 20044–7611.
By mail .........
During the public comment period,
the proposed Consent Decree may be
examined and downloaded at this
Justice Department website: https://
www.justice.gov/enrd/consent-decrees.
We will provide a paper copy of the
proposed Consent Decree upon written
request and payment of reproduction
costs. Please mail your request and
payment to: Consent Decree Library,
U.S. DOJ—ENRD, P.O. Box 7611,
Washington, DC 20044–7611.
Please enclose a check or money order
for $7.50 (25 cents per page
reproduction cost) payable to the United
States Treasury.
Thomas Carroll,
Assistant Section Chief, Environmental
Enforcement Section, Environment and
Natural Resources Division.
provide your name and organizational
affiliation. Visitors must report to the
NSF visitor’s desk in the building lobby
to receive a visitor’s badge.
STATUS: Some of these meetings will be
open to the public. Others will be closed
to the public. See full description
below.
MATTERS TO BE CONSIDERED:
Tuesday, July 17, 2018
Plenary Board Meeting
Open Session: 8:00–8:25 a.m.
• NSB Chair’s Opening Remarks
• NSF Director’s Remarks
• Summary of DC Meetings
Committee on Oversight (CO)
Open Session: 8:25–9:15 a.m.
• Committee Chair’s Opening
Remarks
• Approval of Prior Minutes
• Summary of Merit Review Retreat
• Presentation on Enterprise Risk
Management
• Inspector General’s Update
• Chief Financial Officer’s Update
Committee on National Science and
Engineering Policy (SEP)
Open Session: 9:15–10:05 a.m.
[FR Doc. 2018–14907 Filed 7–11–18; 8:45 am]
• Committee Chair’s Opening
Remarks
• Approval of Prior Minutes
• Update on Future Indicators Project
BILLING CODE 4410–15–P
Plenary Board
Open Session 10:15 a.m.–12:00 p.m.
NATIONAL SCIENCE FOUNDATION
Sunshine Act Meetings; National
Science Board
The National Science Board (NSB),
pursuant to NSF regulations (45 CFR
part 614), the National Science
Foundation Act, as amended, (42 U.S.C.
1862n–5), and the Government in the
Sunshine Act (5 U.S.C. 552b), hereby
gives notice of the scheduling of
meetings for the transaction of NSB
business as follows:
TIME AND DATE: Tuesday, July 17, 2018
from 8:00 a.m. to 4:45 p.m. and
Wednesday, July 18, 2018, from 8:00
a.m. to 2:15 p.m. EDT.
PLACE: These meetings will be held at
the NSF headquarters, 2415 Eisenhower
Avenue, Alexandria, VA 22314.
Meetings are held in the boardroom on
the 2nd floor. The public may observe
public meetings held in the boardroom.
All visitors must contact the Board
Office (call 703–292–7000 or send an
email to [email protected]) at
least 24 hours prior to the meeting and
PO 00000
Frm 00071
Fmt 4703
Sfmt 4703
Presentation and Panel Discussion—
‘‘Being Smart About Artificial
Intelligence (AI)’’
• Chair’s Opening Remarks and
Introductions
• Presentation, Dr. Andrew Moore,
Carnegie Mellon University
• Panel Presentations and Discussion
• Dr. Michael Jordan, University of
California, Berkeley
• Dr. Daniela Rus, Massachusetts
Institute of Technology
• Dr. Charles Isbell, Georgia Institute
of Technology
• Dr. James Kurose, Assistant
Director, Computer & Information
Science & Engineering
Committee on Strategy (CS)
Open Session: 1:00–1:30 p.m.
• Committee Chair’s Opening
Remarks
• Approval of Prior Minutes
• FY 2018 Appropriations and FY
2019 Budget Request Update
Committee on Awards and Facilities
(A&F)
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
Open Session: 1:30–2:00 p.m.
• Committee Chair’s Opening
Remarks
• Approval of Prior Minutes
• CY 2018–2019 Schedule of Planned
Action and Information Items
• Update on the Status of Regional
Class Research Vessel Construction
• Discussion of the Information Item/
Action Item Sequence
Committee on Awards and Facilities
(A&F)
Closed Session: 2:00–4:45 p.m.
Committee on External Engagement (EE)
Open Session: 8:00–8:50 a.m.
• Committee Chair’s Opening
Remarks
• Approval of Prior Minutes
• Listening Session Report
• NSB Alumni Network
• Congressional Engagement Plan
Task Force on the Skilled Technical
Workforce (STW)
Open Session: 8:50–9:30 a.m.
• Chair’s Opening Remarks
• Approval of Prior Minutes
• Update and Discussion on
Stakeholder Meetings
• Discussion of Focus Areas for the
Task Force
Committee on Strategy (CS)
Closed Session: 9:30–10:30 a.m.
amozie on DSK3GDR082PROD with NOTICES1
• Board Chair’s Opening Remarks
• Approval of Prior Minutes
• Director’s Remarks
Plenary Board
Open Session: 11:50 a.m.–2:15 p.m.
• Board Chair’s Opening Remarks
• Introduction of Presentation on the
National Academies and Board of
International Scientific Organizations
(Break for lunch from 12:20–1:15 p.m.)
• Board Chair’s Opening Remarks
• NSF Director’s Remarks
• Approval of Prior Minutes
• Vote: NSB Calendar for CY 2019
• Open Committee Reports
• NSF INCLUDES Presentation
• Board Chair’s Closing Remarks
Meeting Adjourns: 2:15 p.m.
MEETINGS THAT ARE OPEN TO THE PUBLIC:
Wednesday, July 18, 2018
• Committee Chair’s Opening
Remarks
• Approval of Prior Minutes
• FY 2020 Budget Discussion
Plenary Board
Tuesday, July 17, 2018
8:00–8:25 a.m. Plenary NSB
Introduction
8:20–9:15 a.m. Committee on Oversight
(CO)
9:15–10:05 a.m. Committee on Science
& Engineering Policy (SEP)
10:15 a.m.– 12:00 p.m. Plenary Panel on
Artificial Intelligence
1:00–1:30 p.m. Committee on Strategy
(CS)
1:30–2:00 p.m. Committee on Awards &
Facilities (A&F)
Wednesday, July 18, 2018
8:00–8:50 a.m. Committee on External
Engagement (EE)
8:50–9:30 a.m. Task Force on Skilled
Technical Workforce (STW)
11:50 a.m.–2:15 p.m. Plenary (break for
lunch from 12:20–1:15 p.m.)
MEETINGS THAT ARE CLOSED TO THE
PUBLIC:
Tuesday, July 17, 2018
2:00–4:45 p.m. (A&F)
Wednesday, July 18, 2018
Closed Session: 10:45–11:35 a.m.
• Board Chair’s Opening Remarks
• Director’s Remarks
17:21 Jul 11, 2018
Plenary Board (Executive)
Closed Session: 11:35–11:50 a.m.
• Committee Chair’s Opening
Remarks
• Approval of Prior Minutes
• Action Item: Leadership-Class
Computing Phase I Acquisition
• Action Item: Seismological facility
for the Advancement of GEosciences
(SAGE) Operations & Maintenance
Award
• Action Item: Geodetic facility for
the Advancement of GEosciences
(GAGE) Operations & Maintenance
Award
• Action Item: Candidate MREFCfunded Upgrades of the ATLAS and
CMS Detectors at the Large Hadron
Collider
• Information Item: Astronomy
Facility Transitions
MATTERS TO BE DISCUSSED:
VerDate Sep<11>2014
• Approval of Prior Minutes
• Closed Committee Reports
• Midscale Research Infrastructure
Report
• Vote: ATLAS and CMS Upgrades
• Vote: GAGE O&M
• Vote: SAGE O&M
• Vote: Leadership-Class Computing
Phase I Acquisition
• Vote: Contract Services for Arctic
Research Support and Logistics
Jkt 244001
9:30–10:30 a.m. (CS)
10:45–11:35 a.m. Plenary
11:35–11:50 a.m. Plenary Executive
PO 00000
Frm 00072
Fmt 4703
Sfmt 4703
32331
CONTACT PERSONS FOR MORE
INFORMATION: The NSB Office
contact is
Brad Gutierrez, [email protected], 703–
292–7000. The NSB Public Affairs
contact is Nadine Lymn, nlymn@
nsf.gov, 703–292–2490.
SUPPLEMENTAL INFORMATION: Public
meetings and public portions of
meetings held in the 2nd floor
boardroom will be webcast. To view
these meetings, go to: http://
www.tvworldwide.com/events/nsf/180
717 and follow the instructions. The
public may observe public meetings
held in the boardroom. The address is
2415 Eisenhower Avenue, Alexandria,
VA, 22314.
Please refer to the NSB website for
additional information. You will find
any updated meeting information and
schedule updates (time, place, subject
matter, or status of meeting) at https://
www.nsf.gov/nsb/meetings/notices.
jsp#sunshine.
The NSB will continue its program to
provide some flexibility around meeting
times. After the first meeting of each
day, actual meeting start and end times
will be allowed to vary by no more than
15 minutes in either direction. As an
example, if a 10:00 meeting finishes at
10:45, the meeting scheduled to begin at
11:00 may begin at 10:45 instead.
Similarly, the 10:00 meeting may be
allowed to run over by as much as 15
minutes if the Chair decides the extra
time is warranted. The next meeting
would start no later than 11:15. Arrive
at the NSB boardroom or check the
webcast 15 minutes before the
scheduled start time of the meeting you
wish to observe.
Chris Blair,
Executive Assistant to the National Science
Board Office.
[FR Doc. 2018–14984 Filed 7–10–18; 11:15 am]
BILLING CODE 7555–01–P
OCCUPATIONAL SAFETY AND
HEALTH REVIEW COMMISSION
Privacy Act of 1974; System of
Records
Occupational Safety and Health
Review Commission.
ACTION: Notice of a Modified System of
Records.
AGENCY:
In accordance with the
Privacy Act of 1974, as amended, the
Occupational Safety and Health Review
Commission (OSHRC) is revising the
notice for Privacy Act system-of-records
OSHRC–3.
DATES: Comments must be received by
OSHRC on or before August 13, 2018.
SUMMARY:
E:\FR\FM\12JYN1.SGM
12JYN1
32332
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
The revised system of records will
become effective on that date, without
any further notice in the Federal
Register, unless comments or
government approval procedures
necessitate otherwise.
ADDRESSES: You may submit comments
by any of the following methods:
• Email: [email protected]. Include
‘‘PRIVACY ACT SYSTEM OF
RECORDS’’ in the subject line of the
message.
• Fax: (202) 606–5417.
• Mail: One Lafayette Centre, 1120
20th Street NW, Ninth Floor,
Washington, DC 20036–3457.
• Hand Delivery/Courier: Same as
mailing address.
Instructions: All submissions must
include your name, return address, and
email address, if applicable. Please
clearly label submissions as ‘‘PRIVACY
ACT SYSTEM OF RECORDS.’’
FOR FURTHER INFORMATION CONTACT: Ron
Bailey, Attorney-Advisor, Office of the
General Counsel, via telephone at (202)
606–5410, or via email at rbailey@
oshrc.gov.
The
Privacy Act of 1974, 5 U.S.C. 552a(e)(4),
requires federal agencies such as
OSHRC to publish in the Federal
Register notice of any new or modified
system of records. As detailed below,
OSHRC is revising Public
Transportation Benefit Program
Records, OSHRC–3, to revise the
system’s name; account for changes in
the names of the pertinent office and
positions within the agency; revise the
categories of records maintained; and
update the reference to the applicable
General Records Schedule for disposal
of records. In addition, OSHRC in the
past has relied on blanket routine uses
to describe the circumstances under
which records may be disclosed. Going
forward, as revised notices are
published for new and modified
systems of records, a full description of
the routine uses—rather than a reference
to blanket routine uses—will be
included in each notice. This is simply
a change in format, however, and has
not resulted in any substantive changes
to the routine uses for this system of
records.
The notice for OSHRC–3, provided
below in its entirety, is as follows.
amozie on DSK3GDR082PROD with NOTICES1
SUPPLEMENTARY INFORMATION:
SYSTEM NAME AND NUMBER
Transportation Subsidy Program
Records, OSHRC–3.
SECURITY CLASSIFICATION:
None.
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
SYSTEM LOCATION:
Office of the Executive Director,
OSHRC, 1120 20th Street NW, Ninth
Floor, Washington, DC 20036–3457;
Atlanta Office, 100 Alabama Street,
Room 2R90, Atlanta, GA 30303–3104.
SYSTEM MANAGER(S):
Support Services Specialist, Office of
the Executive Director, OSHRC, 1120
20th Street NW, Ninth Floor,
Washington, DC 20036–3457; (202) 606–
5100. Lead Legal Assistant, Atlanta
Office, 100 Alabama Street, Room 2R90,
Atlanta, GA 30303–3104; (404) 562–
1640.
AUTHORITY FOR MAINTENANCE OF THE SYSTEM:
29 U.S.C. 661; Executive Order 13150.
PURPOSE(S) OF THE SYSTEM:
This system of records is maintained
for the purpose of documenting an
employee’s participation in the
Transportation Subsidy Program.
CATEGORIES OF INDIVIDUALS COVERED BY THE
SYSTEM:
This system of records covers all
current and former employees who are,
or were, enrolled in the Transportation
Subsidy Program.
CATEGORIES OF RECORDS IN THE SYSTEM:
This system of records includes
information submitted by current and
former participants via the OSHRC
Transportation Subsidy Program
Application. This form contains the
employee’s name and home address.
The system also contains a Pre-tax
Transportation Program Application
which includes the employee’s name
and the last four digits of his or her
social security number. Lastly, the
system includes a SmartTrip form with
the employee’s name.
RECORD SOURCE CATEGORIES:
Information in this system of records
comes from applicants to, and current
and former participants in, the
Transportation Subsidy Program.
ROUTINE USES OF RECORDS MAINTAINED IN THE
SYSTEM, INCLUDING CATEGORIES OF USERS AND
PURPOSES OF SUCH USES:
In addition to disclosures generally
permitted under 5 U.S.C. 552a(b), all or
a portion of the records or information
contained in this system of records may
be disclosed as a routine use pursuant
to 5 U.S.C. 552a(b)(3) under the
circumstances or for the purposes
described below, to the extent such
disclosures are compatible with the
purposes for which the information was
collected:
(1) To the Department of Justice (DOJ),
or to a court or adjudicative body before
PO 00000
Frm 00073
Fmt 4703
Sfmt 4703
which OSHRC is authorized to appear,
when any of the following entities or
individuals—(a) OSHRC, or any of its
components; (b) any employee of
OSHRC in his or her official capacity;
(c) any employee of OSHRC in his or her
individual capacity where DOJ (or
OSHRC where it is authorized to do so)
has agreed to represent the employee; or
(d) the United States, where OSHRC
determines that litigation is likely to
affect OSHRC or any of its
components—is a party to litigation or
has an interest in such litigation, and
OSHRC determines that the use of such
records by DOJ, or by a court or other
tribunal, or another party before such
tribunal, is relevant and necessary to the
litigation.
(2) To an appropriate agency, whether
federal, state, local, or foreign, charged
with investigating or prosecuting a
violation or enforcing or implementing
a law, rule, regulation, or order, when
a record, either on its face or in
conjunction with other information,
indicates a violation or potential
violation of law, which includes civil,
criminal or regulatory violations, and
such disclosure is proper and consistent
with the official duties of the person
making the disclosure.
(3) To a federal, state, or local agency
maintaining civil, criminal or other
relevant enforcement information, such
as current licenses, if necessary to
obtain information relevant to an
OSHRC decision concerning the hiring,
appointment, or retention of an
employee; the issuance, renewal,
suspension, or revocation of a security
clearance; the execution of a security or
suitability investigation; the letting of a
contract; or the issuance of a license,
grant or other benefit.
(4) To a federal, state, or local agency,
in response to that agency’s request for
a record, and only to the extent that the
information is relevant and necessary to
the requesting agency’s decision in the
matter, if the record is sought in
connection with the hiring,
appointment, or retention of an
employee; the issuance, renewal,
suspension, or revocation of a security
clearance; the execution of a security or
suitability investigation; the letting of a
contract; or the issuance of a license,
grant or other benefit by the requesting
agency.
(5) To an authorized appeal grievance
examiner, formal complaints manager,
equal employment opportunity
investigator, arbitrator, or other duly
authorized official engaged in
investigation or settlement of a
grievance, complaint, or appeal filed by
an employee, only to the extent that the
E:\FR\FM\12JYN1.SGM
12JYN1
amozie on DSK3GDR082PROD with NOTICES1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
information is relevant and necessary to
the case or matter.
(6) To OPM in accordance with the
agency’s responsibilities for evaluation
and oversight of federal personnel
management.
(7) To officers and employees of a
federal agency for the purpose of
conducting an audit, but only to the
extent that the record is relevant and
necessary to this purpose.
(8) To OMB in connection with the
review of private relief legislation at any
stage of the legislative coordination and
clearance process, as set forth in
Circular No. A–19.
(9) To a Member of Congress or to a
person on his or her staff acting on the
Member’s behalf when a written request
is made on behalf and at the behest of
the individual who is the subject of the
record.
(10) To the National Archives and
Records Administration (NARA) for
records management inspections and
such other purposes conducted under
the authority of 44 U.S.C. 2904 and
2906.
(11) To appropriate agencies, entities,
and persons when: (a) OSHRC suspects
or has confirmed that there has been a
breach of the system of records; (b)
OSHRC has determined that as a result
of the suspected or confirmed breach
there is a risk of harm to individuals,
OSHRC, the Federal Government, or
national security; and (c) the disclosure
made to such agencies, entities, and
persons is reasonably necessary to assist
in connection with OSHRC’s efforts to
respond to the suspected or confirmed
breach or to prevent, minimize, or
remedy such harm.
(12) To NARA, Office of Government
Information Services (OGIS), to the
extent necessary to fulfill its
responsibilities in 5 U.S.C. 552(h), to
review administrative agency policies,
procedures and compliance with FOIA,
and to facilitate OGIS’ offering of
mediation services to resolve disputes
between persons making FOIA requests
and administrative agencies.
(13) To another federal agency or
federal entity, when OSHRC determines
that information from this system of
records is reasonably necessary to assist
the recipient agency or entity in (a)
responding to a suspected or confirmed
breach or (b) preventing, minimizing, or
remedying the risk of harm to
individuals, the recipient agency or
entity (including its information
systems, programs, and operations), the
Federal Government, or national
security, resulting from a suspected or
confirmed breach.
(14) To other federal agencies to effect
salary or administrative offsets, or for
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
other purposes connected with the
collection of debts owed to the United
States, pursuant to sections 5 and 10 of
the Debt Collection Act of 1982, as
amended by the Debt Collection
Improvement Act of 1996.
(15) To other federal, state, local or
foreign agencies conducting computer
matching programs to help eliminate
fraud and abuse and to detect
unauthorized overpayments made to
individuals. When disclosures are made
as part of computer matching programs,
OSHRC will comply with the Computer
Matching and Privacy Protection Act of
1988, and the Computer Matching and
Privacy Protections Amendments of
1990.
POLICIES AND PRACTICES FOR STORAGE OF
RECORDS:
32333
Street NW, Ninth Floor, Washington, DC
20036–3457. For an explanation on how
such requests should be drafted, refer to
29 CFR 2400.5 (notification), and 29
CFR 2400.6 (procedures for requesting
records).
EXEMPTIONS PROMULGATED FOR THE SYSTEM:
None.
HISTORY:
April 14, 2006, 71 FR 19556; August
4, 2008, 73 FR 45256; October 5, 2015,
80 FR 60182; and September 28, 2017,
82 FR 45324.
Dated: July 5, 2018.
Nadine N. Mancini,
General Counsel, Senior Agency Official for
Privacy.
[FR Doc. 2018–14878 Filed 7–11–18; 8:45 am]
Records are stored on paper in locked
file cabinets.
BILLING CODE 7600–01–P
POLICIES AND PRACTICES FOR RETRIEVAL OF
RECORDS:
POSTAL REGULATORY COMMISSION
Paper records can be retrieved
manually by name.
[Docket Nos. MC2018–190 and CP2018–264]
New Postal Product
POLICIES AND PRACTICES FOR RETENTION AND
DISPOSAL OF RECORDS:
AGENCY:
Records are retained and disposed of
in accordance with NARA’s General
Records Schedule 2.4, Items 130 and
131.
SUMMARY:
ADMINISTRATIVE, TECHNICAL, AND PHYSICAL
SAFEGUARDS:
Paper records are maintained in
locked file cabinets. Access to the
cabinets is limited to personnel having
a need for access to perform their
official functions.
RECORD ACCESS PROCEDURES:
Individuals who wish to gain access
to their records should notify: Privacy
Officer, OSHRC, 1120 20th Street NW,
Ninth Floor, Washington, DC 20036–
3457. For an explanation on how such
requests should be drafted, refer to 29
CFR 2400.6 (procedures for requesting
records).
CONTESTING RECORD PROCEDURES:
Individuals who wish to contest their
records should notify: Privacy Officer,
OSHRC, 1120 20th Street NW, Ninth
Floor, Washington, DC 20036–3457. For
an explanation on the specific
procedures for contesting the contents
of a record, refer to 29 CFR 2400.8
(Procedures for requesting amendment),
and 29 CFR 2400.9 (Procedures for
appealing).
NOTIFICATION PROCEDURES:
Individuals interested in inquiring
about their records should notify:
Privacy Officer, OSHRC, 1120 20th
PO 00000
Frm 00074
Fmt 4703
Sfmt 4703
ACTION:
Postal Regulatory Commission.
Notice.
The Commission is noticing a
recent Postal Service filing for the
Commission’s consideration concerning
negotiated service agreements. This
notice informs the public of the filing,
invites public comment, and takes other
administrative steps.
DATES: Comments are due: July 13,
2018.
Submit comments
electronically via the Commission’s
Filing Online system at http://
www.prc.gov. Those who cannot submit
comments electronically should contact
the person identified in the FOR FURTHER
INFORMATION CONTACT section by
telephone for advice on filing
alternatives.
ADDRESSES:
FOR FURTHER INFORMATION CONTACT:
David A. Trissell, General Counsel, at
202–789–6820.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
II. Docketed Proceeding(s)
I. Introduction
The Commission gives notice that the
Postal Service filed request(s) for the
Commission to consider matters related
to negotiated service agreement(s). The
request(s) may propose the addition or
removal of a negotiated service
agreement from the market dominant or
the competitive product list, or the
E:\FR\FM\12JYN1.SGM
12JYN1
32334
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
modification of an existing product
currently appearing on the market
dominant or the competitive product
list.
Section II identifies the docket
number(s) associated with each Postal
Service request, the title of each Postal
Service request, the request’s acceptance
date, and the authority cited by the
Postal Service for each request. For each
request, the Commission appoints an
officer of the Commission to represent
the interests of the general public in the
proceeding, pursuant to 39 U.S.C. 505
(Public Representative). Section II also
establishes comment deadline(s)
pertaining to each request.
The public portions of the Postal
Service’s request(s) can be accessed via
the Commission’s website (http://
www.prc.gov). Non-public portions of
the Postal Service’s request(s), if any,
can be accessed through compliance
with the requirements of 39 CFR
3007.40.
The Commission invites comments on
whether the Postal Service’s request(s)
in the captioned docket(s) are consistent
with the policies of title 39. For
request(s) that the Postal Service states
concern market dominant product(s),
applicable statutory and regulatory
requirements include 39 U.S.C. 3622, 39
U.S.C. 3642, 39 CFR part 3010, and 39
CFR part 3020, subpart B. For request(s)
that the Postal Service states concern
competitive product(s), applicable
statutory and regulatory requirements
include 39 U.S.C. 3632, 39 U.S.C. 3633,
39 U.S.C. 3642, 39 CFR part 3015, and
39 CFR part 3020, subpart B. Comment
deadline(s) for each request appear in
section II.
II. Docketed Proceeding(s)
amozie on DSK3GDR082PROD with NOTICES1
1. Docket No(s).: MC2018–190 and
CP2018–264; Filing Title: USPS Request
to Add Priority Mail Express & Priority
Mail Contract 70 to Competitive Product
List and Notice of Filing Materials
Under Seal; Filing Acceptance Date:
July 5, 2018; Filing Authority: 39 U.S.C.
3642 and 39 CFR 3020.30 et seq.; Public
Representative: Christopher C. Mohr,
Comments Due: July 13, 2018.
This Notice will be published in the
Federal Register.
Ruth Ann Abrams,
Acting Secretary.
[FR Doc. 2018–14877 Filed 7–11–18; 8:45 am]
BILLING CODE 7710–FW–P
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #15580 and #15581;
NEBRASKA Disaster Number NE–00070]
Presidential Declaration of a Major
Disaster for Public Assistance Only for
the State of Nebraska
U.S. Small Business
Administration.
ACTION: Notice.
AGENCY:
The number assigned to this disaster
for physical damage is 15580B and for
economic injury is 155810.
(Catalog of Federal Domestic Assistance
Number 59008)
Rafaela Monchek,
Acting Associate Administrator for Disaster
Assistance.
[FR Doc. 2018–14932 Filed 7–11–18; 8:45 am]
BILLING CODE 8025–01–P
This is a Notice of the
Presidential declaration of a major
disaster for Public Assistance Only for
the State of Nebraska (FEMA–4375–DR),
dated 06/29/2018.
Incident: Severe Winter Storm and
Straight-line Winds.
Incident Period: 04/13/2018 through
04/18/2018.
DATES: Issued on 06/29/2018.
Physical Loan Application Deadline
Date: 08/28/2018.
Economic Injury (EIDL) Loan
Application Deadline Date: 03/29/2019.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW, Suite 6050,
Washington, DC 20416, (202) 205–6734.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
President’s major disaster declaration on
06/29/2018, Private Non-Profit
organizations that provide essential
services of a governmental nature may
file disaster loan applications at the
address listed above or other locally
announced locations.
The following areas have been
determined to be adversely affected by
the disaster:
Primary Counties: Antelope, Blaine,
Boone, Boyd, Cheyenne, Clay,
Custer, Deuel, Fillmore, Garfield,
Gosper, Greeley, Hall, Hamilton,
Holt, Howard, Keith, Knox, Logan,
Loup, Madison, Merrick, Nance,
Nuckolls, Pierce, Platte, Rock,
Sherman, Valley, Webster, Wheeler.
The Interest Rates are:
SUMMARY:
Percent
For Physical Damage:
Non-Profit Organizations With
Credit Available Elsewhere ...
Non-Profit Organizations Without Credit Available Elsewhere .....................................
For Economic Injury:
Non-Profit Organizations Without
Credit Available Elsewhere
PO 00000
Frm 00075
Fmt 4703
Sfmt 4703
2.500
2.500
2.500
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
[Summary Notice No. 2018–38]
Petition for Exemption; Summary of
Petition Received; 3GLP, Inc. dba
Precision Flight Devices
Federal Aviation
Administration (FAA), DOT.
ACTION: Notice.
AGENCY:
This notice contains a
summary of a petition seeking relief
from specified requirements of Title 14
of the Code of Federal Regulations. The
purpose of this notice is to improve the
public’s awareness of, and participation
in, the FAA’s exemption process.
Neither publication of this notice nor
the inclusion or omission of information
in the summary is intended to affect the
legal status of the petition or its final
disposition.
SUMMARY:
Comments on this petition must
identify the petition docket number and
must be received on or before August 1,
2018.
ADDRESSES: Send comments identified
by docket number FAA–2018–0325
using any of the following methods:
• Federal eRulemaking Portal: Go to
http://www.regulations.gov and follow
the online instructions for sending your
comments electronically.
• Mail: Send comments to Docket
Operations, M–30; U.S. Department of
Transportation (DOT), 1200 New Jersey
Avenue SE, Room W12–140, West
Building Ground Floor, Washington, DC
20590–0001.
• Hand Delivery or Courier: Take
comments to Docket Operations in
Room W12–140 of the West Building
Ground Floor at 1200 New Jersey
Avenue SE, Washington, DC, between 9
a.m. and 5 p.m., Monday through
Friday, except Federal holidays.
• Fax: Fax comments to Docket
Operations at 202–493–2251.
Privacy: In accordance with 5 U.S.C.
553(c), DOT solicits comments from the
public to better inform its rulemaking
process. DOT posts these comments,
DATES:
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
without edit, including any personal
information the commenter provides, to
http://www.regulations.gov, as
described in the system of records
notice (DOT/ALL–14 FDMS), which can
be reviewed at http://www.dot.gov/
privacy.
Docket: Background documents or
comments received may be read at
http://www.regulations.gov at any time.
Follow the online instructions for
accessing the docket or go to the Docket
Operations in Room W12–140 of the
West Building Ground Floor at 1200
New Jersey Avenue SE, Washington,
DC, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
Jake
Troutman, (202) 683–7788, 800
Independence Avenue SW, Washington,
DC 20591.
This notice is published pursuant to
14 CFR 11.85.
FOR FURTHER INFORMATION CONTACT:
Lirio Liu,
Executive Director, Office of Rulemaking.
amozie on DSK3GDR082PROD with NOTICES1
Petition for Exemption
Docket No.: FAA–2018–0325.
Petitioner: 3GLP, Inc. dba Precision
Flight Devices.
Section(s) of 14 CFR Affected: Part 21,
subpart H; part 27; 45.23(b); 45.27(a);
61.113; 91.7(a); 91.9(b)(2); 91.9(c);
91.103; 91.109(a); 91.119; 91.121;
91.151(a); 91.203(a) & (b); 91.405(a);
91.407(a)(1); 91.409(a)(1) & (2); 91.417(a)
& (b).
Description of Relief Sought: The
petitioner is requesting relief to
commercially operate a CW–30, hybrid
fixed wing and vertical takeoff and land
multi-copter, unmanned aircraft (UA)
that weighs more than 55 pounds (lbs.).
The proposed operation would allow
the petitioner to conduct aerial data
collection to include remote sensing and
measuring by an instrument or
combination of instruments aboard the
UA. Specifically, Precision Flight
Devices intends to operate the UA at
less than 30 miles per hour with a
maximum takeoff weight of 75 lbs. The
operations would be conducted within
visual line of sight over a 15.56 square
mile area situated at and around Kiana
and Nulato airfields (8 square miles per
airport) in Western Alaska. The
collection of UA high resolution data
and images may require operations as
close as 200 feet from non-participating
persons.
[FR Doc. 2018–14913 Filed 7–11–18; 8:45 am]
BILLING CODE 4910–13–P
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
[Summary Notice No. PE–2018–57]
Petition for Exemption; Summary of
Petition Received; NextEra Energy, Inc.
Federal Aviation
Administration (FAA), DOT.
ACTION: Notice.
AGENCY:
This notice contains a
summary of a petition seeking relief
from specified requirements of Title 14
of the Code of Federal Regulations. The
purpose of this notice is to improve the
public’s awareness of, and participation
in, the FAA’s exemption process.
Neither publication of this notice nor
the inclusion or omission of information
in the summary is intended to affect the
legal status of the petition or its final
disposition.
SUMMARY:
Comments on this petition must
identify the petition docket number and
must be received on or before August 1,
2018.
ADDRESSES: Send comments identified
by docket number FAA–2018–0225
using any of the following methods:
• Federal eRulemaking Portal: Go to
http://www.regulations.gov and follow
the online instructions for sending your
comments electronically.
• Mail: Send comments to Docket
Operations, M–30; U.S. Department of
Transportation (DOT), 1200 New Jersey
Avenue SE, Room W12–140, West
Building Ground Floor, Washington, DC
20590–0001.
• Hand Delivery or Courier: Take
comments to Docket Operations in
Room W12–140 of the West Building
Ground Floor at 1200 New Jersey
Avenue SE, Washington, DC, between 9
a.m. and 5 p.m., Monday through
Friday, except Federal holidays.
• Fax: Fax comments to Docket
Operations at 202–493–2251.
Privacy: In accordance with 5 U.S.C.
553(c), DOT solicits comments from the
public to better inform its rulemaking
process. DOT posts these comments,
without edit, including any personal
information the commenter provides, to
http://www.regulations.gov, as
described in the system of records
notice (DOT/ALL–14 FDMS), which can
be reviewed at http://www.dot.gov/
privacy.
Docket: Background documents or
comments received may be read at
http://www.regulations.gov at any time.
Follow the online instructions for
accessing the docket or go to the Docket
Operations in Room W12–140 of the
West Building Ground Floor at 1200
DATES:
PO 00000
Frm 00076
Fmt 4703
Sfmt 4703
32335
New Jersey Avenue SE, Washington,
DC, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
FOR FURTHER INFORMATION CONTACT: Jake
Troutman, (202) 683–7788, 800
Independence Avenue SW, Washington,
DC 20591.
This notice is published pursuant to
14 CFR 11.85.
Lirio Liu,
Executive Director, Office of Rulemaking.
Petition for Exemption
Docket No.: FAA–2018–0225.
Petitioner: NextEra Energy, Inc.
Section(s) of 14 CFR Affected:
§§ 61.23(a) & (c); 61.101(e)(4) & (5);
61.113(a); 61.315(a); 91.7(a),
91.105(a)(2), 91.119(c); 91.121;
91.151(a)(1); 91.403(b); 91.405(a);
91.407(a)(1); 91.409(a)(1) & (2); 91.417(a)
& (b).
Description of Relief Sought: The
petitioner proposes to operate
unmanned aircraft systems, weighing
more than 55 pounds, for aerial data
collection operations, including support
of storm response. The operations will
be within visual line of site of the pilot
or visual observer, under 400 feet, and
at speeds at or less than 100 miles an
hour.
[FR Doc. 2018–14912 Filed 7–11–18; 8:45 am]
BILLING CODE 4910–13–P
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
Agency Information Collection
Activities: Information Collection
Renewal; Submission for OMB Review;
Subordinated Debt Licensing
Requirements
Office of the Comptroller of the
Currency (OCC), Treasury.
ACTION: Notice and request for comment.
AGENCY:
The OCC, as part of its
continuing effort to reduce paperwork
and respondent burden, invites the
general public and other federal
agencies to take this opportunity to
comment on a continuing information
collection as required by the Paperwork
Reduction Act of 1995 (PRA).
In accordance with the requirements
of the PRA, the OCC may not conduct
or sponsor, and the respondent is not
required to respond to, an information
collection unless it displays a currently
valid Office of Management and Budget
(OMB) control number.
The OCC is soliciting comment
concerning the renewal of its
SUMMARY:
E:\FR\FM\12JYN1.SGM
12JYN1
amozie on DSK3GDR082PROD with NOTICES1
32336
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
information collection titled,
‘‘Subordinated Debt Licensing
Requirements.’’ The OCC also is giving
notice that it has sent the collection to
OMB for review.
DATES: Comments must be submitted on
or before August 13, 2018.
ADDRESSES: Commenters are encouraged
to submit comments by email, if
possible. You may submit comments by
any of the following methods:
• Email: [email protected].
• Mail: Legislative and Regulatory
Activities Division, Office of the
Comptroller of the Currency, Attention:
1557–0320, 400 7th Street SW, Suite
3E–218, Washington, DC 20219.
• Hand Delivery/Courier: 400 7th
Street SW, Suite 3E–218, Washington,
DC 20219.
• Fax: (571) 465–4326.
Instructions: You must include
‘‘OCC’’ as the agency name and ‘‘1557–
0320’’ in your comment. In general, the
OCC will publish your comment on
www.reginfo.gov without change,
including any business or personal
information that you provide, such as
name and address information, email
addresses, or phone numbers.
Comments received, including
attachments and other supporting
materials, are part of the public record
and subject to public disclosure. Do not
include any information in your
comment or supporting materials that
you consider confidential or
inappropriate for public disclosure.
Additionally, please send a copy of
your comments by mail to: OCC Desk
Officer, 1557–0320, U.S. Office of
Management and Budget, 725 17th
Street NW, #10235, Washington, DC
20503 or by email to oira_submission@
omb.eop.gov.
You may review comments and other
related materials that pertain to this
information collection 1 following the
close of the 30-day comment period for
this notice by any of the following
methods:
• Viewing Comments Electronically:
Go to www.reginfo.gov. Click on the
‘‘Information Collection Review’’ tab.
Underneath the ‘‘Currently under
Review’’ section heading, from the dropdown menu, select ‘‘Department of
Treasury’’ and then click ‘‘submit.’’ This
information collection can be located by
searching by OMB control number
‘‘1557–0320’’ or ‘‘Subordinated Debt
Licensing Requirements.’’ Upon finding
the appropriate information collection,
click on the related ‘‘ICR Reference
Number.’’ On the next screen, select
1 On April 3, 2018, the OCC published a 60-day
notice for this information collection; no public
comments were received.
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
‘‘View Supporting Statement and Other
Documents’’ and then click on the link
to any comment listed at the bottom of
the screen.
• For assistance in navigating
www.reginfo.gov, please contact the
Regulatory Information Service Center
at (202) 482–7340.
• Viewing Comments Personally: You
may personally inspect comments at the
OCC, 400 7th Street SW, Washington,
DC. For security reasons, the OCC
requires that visitors make an
appointment to inspect comments. You
may do so by calling (202) 649–6700 or,
for persons who are deaf or hearing
impaired, TTY, (202) 649–5597. Upon
arrival, visitors will be required to
present valid government-issued photo
identification and submit to security
screening in order to inspect comments.
FOR FURTHER INFORMATION CONTACT: OCC
Clearance Officer, (202) 649–5490 or, for
persons who are deaf or hearing
impaired, TTY, (202) 649–5597,
Legislative and Regulatory Activities
Division, Office of the Comptroller of
the Currency, 400 7th Street SW, Suite
3E–218, Washington, DC 20219.
SUPPLEMENTARY INFORMATION: Under the
PRA (44 U.S.C. 3501–3520), federal
agencies must obtain approval from
OMB for each collection of information
they conduct or sponsor. ‘‘Collection of
information’’ is defined in 44 U.S.C.
3502(3) and 5 CFR 1320.3(c) to include
agency requests or requirements that
members of the public submit reports,
keep records, or provide information to
a third party. The OCC asks OMB to
extend its approval of the following
collection.
Title: Subordinated Debt Licensing
Requirements.
OMB Control No.: 1557–0320.
Frequency of Response: On occasion.
Affected Public: Business or other forprofit.
Burden Estimates:
Prepayment of Subordinated Debt in
Form of Call Option: 184 Respondents;
1.30 burden hours per respondent; 239
total burden hours.
Authority to Limit Distributions: 42
Respondents; 0.5 hours per respondent;
21 total burden hours.
Total Burden: 260 hours.
Description: The scope of this
Information Collection Renewal is
limited to the following: (1) The 12 CFR
5.47(g) and 12 CFR 5.56(b) requirements
that national banks and federal savings
associations (collectively,
‘‘institutions’’) apply for OCC approval
prior to prepaying subordinated debt if
the prepayment is in the form of a call
option and (2) the 12 CFR 5.47(d)
requirement that national banks issuing
PO 00000
Frm 00077
Fmt 4703
Sfmt 4703
subordinated debt disclose the OCC’s
authority under 12 CFR 3.11 to limit
distributions.
National banks must receive prior
OCC approval in order to prepay
subordinated debt that is included in
tier 2 capital, and certain banks must
receive prior approval to prepay
subordinated debt that is not included
in tier 2 capital. If the prepayment is in
the form of a call option, a national bank
must submit the information required
for general prepayment requests under
12 CFR 5.47(g)(1)(ii)(A) and also comply
with 12 CFR 5.47(g)(1)(ii)(B)(2), which
requires a national bank to submit
either: (1) A statement explaining why
the bank believes that following the
proposed prepayment the bank would
continue to hold an amount of capital
commensurate with its risk or (2) a
description of the replacement capital
instrument that meets the criteria for
tier 1 or tier 2 capital under 12 CFR
3.20, including the amount of such
instrument and the time frame for
issuance.
Federal savings associations must
receive OCC approval prior to prepaying
subordinated debt securities or
mandatorily redeemable preferred stock
included in tier 2 capital. If the
prepayment is in the form of a call
option, a federal savings association
must submit the information required
for general prepayment requests under
12 CFR 5.56(b)(2)(i) and also comply
with 12 CFR 5.56(b)(2)(ii)(A), which
requires a federal savings association to
submit either: (1) A statement
explaining why the federal savings
association believes that following the
proposed prepayment the savings
association would continue to hold an
amount of capital commensurate with
its risk or (2) a description of the
replacement capital instrument that
meets the criteria for tier 1 or tier 2
capital under 12 CFR 3.20, including the
amount of such instrument and the time
frame for issuance.
Pursuant to 12 CFR 5.47(d)(3)(ii)(C), a
national bank issuing subordinated debt
must disclose on the face of the note the
OCC’s authority under 12 CFR 3.11 to
limit distributions, including interest
payments on any tier 2 capital
instrument if the national bank has full
discretion to permanently or
temporarily suspend such payments
without triggering an event of default.
Comments submitted in response to
this notice will be summarized and
included in the request for OMB
approval. All comments will become a
matter of public record. Comments are
invited on:
(a) Whether the collections of
information are necessary for the proper
E:\FR\FM\12JYN1.SGM
12JYN1
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
performance of the OCC’s functions,
including whether the information has
practical utility;
(b) The accuracy of the OCC’s
estimates of the burden of the
information collections, including the
validity of the methodology and
assumptions used;
(c) Ways to enhance the quality,
utility, and clarity of the information to
be collected; and
(d) Ways to minimize the burden of
information collections on respondents,
including through the use of automated
collection techniques or other forms of
information technology.
Dated: July 6, 2018.
Karen Solomon,
Acting First Deputy Comptroller and Chief
Counsel.
[FR Doc. 2018–14941 Filed 7–11–18; 8:45 am]
BILLING CODE 4810–33–P
FOR FURTHER INFORMATION CONTACT:
Melissa Avstreih, Designated Federal
Officer, Office of Financial Research,
Department of the Treasury, 1500
Pennsylvania Avenue NW, Washington,
DC 20220, (202) 927–8032 (this is not a
toll-free number), or OFR_FRAC@
ofr.treasury.gov. Persons who have
difficulty hearing or speaking may
access this number via TTY by calling
the toll-free Federal Relay Service at
(800) 877–8339.
SUPPLEMENTARY INFORMATION: On July 2,
2018 (83 FR 31035), the OFR announced
the 12th meeting of the Financial
Research Advisory Committee. The OFR
has had to change the start time for the
meeting until 1:00 p.m. Eastern Time.
All other information in the notice is
unchanged, including the location and
tentative agenda/topics for discussion.
Dated: July 3, 2018.
Barbara Shycoff,
Chief of External Affairs.
DEPARTMENT OF THE TREASURY
[FR Doc. 2018–14949 Filed 7–11–18; 8:45 am]
Open Meeting of the Financial
Research Advisory Committee
BILLING CODE 4810–25–P
Office of Financial Research,
Department of the Treasury.
ACTION: Notice of open meeting; time
change.
AGENCY:
The Financial Research
Advisory Committee for the Treasury’s
Office of Financial Research (OFR)
previously announced its 12th meeting
to be held on Thursday, July 26, 2018,
in the Benjamin Strong Room, Federal
Reserve Bank of New York, 33 Liberty
Street, New York, New York, 10045,
beginning at 11:00 a.m. Eastern Time.
By this notice, the OFR is changing the
start time for the meeting to 1:00 p.m.
Eastern Time. The meeting will be open
to the public and limited seating will be
available.
DATES: The meeting will be held on
Thursday, July 26, 2018, beginning at
1:00 p.m. Eastern Time.
ADDRESSES: The meeting will be held in
the Benjamin Strong Room, Federal
Reserve Bank of New York, 33 Liberty
Street, New York, New York, 10045. The
meeting will be open to the public. A
limited number of seats will be available
for those interested in attending the
meeting, and those seats would be on a
first-come, first-served basis. Because
the meeting will be held in a secured
facility, members of the public who plan
to attend the meeting MUST contact the
OFR by email at OFR_FRAC@
ofr.treasury.gov by 5 p.m. ET on
Thursday, July 19, 2018, to inform the
OFR of their desire to attend the
meeting and receive further instructions
about building clearance.
amozie on DSK3GDR082PROD with NOTICES1
SUMMARY:
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
DEPARTMENT OF VETERANS
AFFAIRS
Creating Options for Veterans
Expedited Recovery (COVER)
Commission; Notice of Meeting
In accordance with the Federal
Advisory Committee Act, the Creating
Options for Veterans Expedited Recover
(COVER) Commission gives notice that
the first meeting will be held on July 24
and July 25, 2018 at the Capital Hilton,
1001 16th Street NW, Washington, DC.
The meeting will convene at 8:00 a.m.
and adjourn at 5:00 p.m. EST on July 24
and July 25. The meeting will be
partially closed to the public on July 24,
2018 and July 25, 2018. In accordance
with 5 U.S.C. 552b(c)(2) and (6), which
exempt a meeting from the requirement
to be open to the public, the meeting
will be closed on July 24 from 8:00 a.m.
to 12:00 p.m. because it is likely to
‘‘relate solely to the internal personnel
rules and practices of an agency’’ or
‘‘disclose . . . information of a personal
nature where disclosure would
constitute a clearly unwarranted
invasion of personal privacy.’’ On July
25, the meeting will be closed from
12:00 p.m. to 5:00 p.m. under section
552b(c)(9)(B) because it would reveal
information the disclosure of which
would, ‘‘in the case of an agency, be
likely to significantly frustrate
implementation of a proposed agency
action.’’ This closed session will
include discussion of ground rules,
decision making protocol, and strategy
PO 00000
Frm 00078
Fmt 4703
Sfmt 4703
32337
to establish ground rules. Any
precipitous release of those discussions
through an open session will frustrate
program implementation, to the
detriment of our Veterans who we
consider our greatest customer/
benefactor of the commission.
Open sessions will be held on both
days in Capital Hilton’s South American
AB room. The open session on Day 1
will focus current VHA Whole Health
Practices, VA’s Mental Health Services
and Resources. The open session Day 2
will include review and discussion of
the objectives of the Commission as
described in the Comprehensive
Addiction and Recovery Act (CARA) of
2016. A listening line will be available
to the public who prefer to call in rather
than attend the open sessions at the
Capital Hilton. This listening line
number will be activated 10 minutes
before each of the two open sessions.
The listening line number is 800–767–
1750; access code 48664#.
The purpose of the COVER
Commission is to examine the evidencebased therapy treatment model used by
the Department of Veterans Affairs (VA)
for treating mental health conditions of
Veterans and the potential benefits of
incorporating complementary and
integrative health approaches as
standard practice throughout the
Department. The Commission will: (1)
Examine the efficacy of the evidencebased therapy model used by VA to treat
mental health illnesses and identify
areas of improvement; (2) conduct a
patient-centered survey within each
VISN to examine: The experiences of
veterans with VA facilities regarding
mental health care, the experiences of
veterans with non-VA facilities
regarding mental health care, the
preferences of veterans regarding
available treatment for mental health
issues and which methods the veterans
believe to be most effective, the
experience, if any, of veterans with
respect to complementary and
integrative health approaches, the
prevalence of prescribing medication to
veterans seeking treatment for mental
health disorders through VA, and the
outreach efforts of VA regarding the
availability of benefits and treatments
for veterans for addressing mental
health issues; (3) examine available
research on complementary and
integrative health approaches for mental
health disorders in areas of therapy
including: Music therapy, equine
therapy, training and caring for service
dogs, yoga therapy, acupuncture
therapy, meditation therapy, outdoor
sports therapy, hyperbaric oxygen
therapy, accelerated resolution therapy,
art therapy, magnetic resonance therapy,
E:\FR\FM\12JYN1.SGM
12JYN1
32338
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Notices
amozie on DSK3GDR082PROD with NOTICES1
and others; (4) study the sufficiency of
VA resources to deliver quality mental
health care; and (5) study the current
treatments and resources available
within VA and assess: The effectiveness
of such treatments and resources in
decreasing the number of suicides per
day by veterans, the number of veterans
who have been diagnosed with mental
health issues, the percentage of veterans
who have completed VA counseling
sessions, and the efforts of VA to
expand complementary and integrative
VerDate Sep<11>2014
17:21 Jul 11, 2018
Jkt 244001
health treatments viable to the recovery
of veterans with mental health issues as
determined by the Secretary to improve
the effectiveness of treatments offered
by VA.
Any member of the public seeking
additional information should email
COVER [email protected]. The
Designated Federal Officer for the
Commission is Ms. Sheila B. Hickman.
Ms. Hickman and the staff will be
monitoring and responding to questions
or comments sent to this email box. The
PO 00000
Frm 00079
Fmt 4703
Sfmt 9990
Committee will also accept written
comments which may be sent to the
same email box. In the public’s
communications with the Committee,
the writers must identify themselves
and state the organizations, associations,
or persons they represent.
Dated: July 9, 2018.
Jelessa M. Burney,
Federal Advisory Committee Management
Officer.
[FR Doc. 2018–14936 Filed 7–11–18; 8:45 am]
BILLING CODE P
E:\FR\FM\12JYN1.SGM
12JYN1
Vol. 83
Thursday,
No. 134
July 12, 2018
Part II
Department of Health and Human Services
amozie on DSK3GDR082PROD with PROPOSALS2
Centers for Medicare & Medicaid Services
42 CFR Parts 409, 424, 484, et al.
Medicare and Medicaid Programs; CY 2019 Home Health Prospective
Payment System Rate Update and CY 2020 Case-Mix Adjustment
Methodology Refinements; Home Health Value-Based Purchasing Model;
Home Health Quality Reporting Requirements; Home Infusion Therapy
Requirements; and Training Requirements for Surveyors of National
Accrediting Organizations; Proposed Rule
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00001
Fmt 4717
Sfmt 4717
E:\FR\FM\12JYP2.SGM
12JYP2
32340
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
42 CFR Parts 409, 424, 484, 486, and
488
[CMS–1689–P]
RIN 0938–AT29
Medicare and Medicaid Programs; CY
2019 Home Health Prospective
Payment System Rate Update and CY
2020 Case-Mix Adjustment
Methodology Refinements; Home
Health Value-Based Purchasing Model;
Home Health Quality Reporting
Requirements; Home Infusion Therapy
Requirements; and Training
Requirements for Surveyors of
National Accrediting Organizations
Centers for Medicare &
Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
AGENCY:
This proposed rule would
update the home health prospective
payment system (HH PPS) payment
rates, including the national,
standardized 60-day episode payment
rates, the national per-visit rates, and
the non-routine medical supply (NRS)
conversion factor, effective for home
health episodes of care ending on or
after January 1, 2019. It also proposes
updates to the HH PPS case-mix weights
for calendar year (CY) 2019 using the
most current, complete data available at
the time of rulemaking; discusses our
efforts to monitor the potential impacts
of the rebasing adjustments that were
implemented in CYs 2014 through 2017;
proposes a rebasing of the HH market
basket (which includes a decrease in the
labor-related share); proposes the
methodology used to determine rural
add-on payments for CYs 2019 through
2022, as required by section 50208 of
the Bipartisan Budget Act of 2018
hereinafter referred to as the ‘‘BBA of
2018’’; proposes regulations text
changes regarding certifying and
recertifying patient eligibility for
Medicare home health services; and
proposes to define ‘‘remote patient
monitoring’’ and recognize the cost
associated as an allowable
administrative cost. Additionally, it
proposes case-mix methodology
refinements to be implemented for
home health services beginning on or
after January 1, 2020, including a
change in the unit of payment from 60day episodes of care to 30-day periods
of care, as required by section 51001 of
the BBA of 2018; includes information
amozie on DSK3GDR082PROD with PROPOSALS2
SUMMARY:
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
on the implementation of temporary
transitional payments for home infusion
therapy services for CYs 2019 and 2020,
as required by section 50401 of the BBA
of 2018; solicits comments regarding
payment for home infusion therapy
services for CY 2021 and subsequent
years; proposes health and safety
standards for home infusion therapy;
and proposes an accreditation and
oversight process for home infusion
therapy suppliers. This rule proposes
changes to the Home Health ValueBased Purchasing (HHVBP) Model to
remove two OASIS-based measures,
replace three OASIS-based measures
with two new proposed composite
measures, rescore the maximum number
of improvement points, and reweight
the measures in the applicable measures
set. Also, the Home Health Quality
Reporting Program provisions include a
discussion of the Meaningful Measures
Initiative and propose the removal of
seven measures to further the priorities
of this initiative. In addition, the HH
QRP offers a discussion on social risk
factors and an update on
implementation efforts for certain
provisions of the IMPACT Act. This
proposed rule clarifies the regulatory
text to note that not all OASIS data is
required for the HH QRP. Finally, it
would require that accrediting
organization surveyors take CMSprovided training.
DATES: To be assured consideration,
comments must be received at one of
the addresses provided below, no later
than 5 p.m. on August 31, 2018.
ADDRESSES: In commenting, please refer
to file code CMS–1689–P. Because of
staff and resource limitations, we cannot
accept comments by facsimile (FAX)
transmission.
Comments, including mass comment
submissions, must be submitted in one
of the following three ways (please
choose only one of the ways listed):
1. Electronically. You may submit
electronic comments on this regulation
to http://www.regulations.gov. Follow
the ‘‘Submit a comment’’ instructions.
2. By regular mail. You may mail
written comments to the following
address ONLY: Centers for Medicare &
Medicaid Services, Department of
Health and Human Services, Attention:
CMS–1689–P, P.O. Box 8013, Baltimore,
MD 21244–8013. Please allow sufficient
time for mailed comments to be
received before the close of the
comment period.
3. By express or overnight mail. You
may send written comments to the
following address ONLY: Centers for
Medicare & Medicaid Services,
Department of Health and Human
PO 00000
Frm 00002
Fmt 4701
Sfmt 4702
Services, Attention: CMS–1689–P, Mail
Stop C4–26–05, 7500 Security
Boulevard, Baltimore, MD 21244–1850.
For information on viewing public
comments, see the beginning of the
SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: For
general information about the Home
Health Prospective Payment System
(HH PPS), send your inquiry via email
to: [email protected].
For general information about home
infusion payment, send your inquiry via
email to: HomeInfusionPolicy@
cms.hhs.gov.
For information about the Home
Health Value-Based Purchasing
(HHVBP) Model, send your inquiry via
email to: HHVBPquestions@
cms.hhs.gov.
For information about the Home
Health Quality Reporting Program (HH
QRP) contact: Joan Proctor, (410) 786–
0949.
For information about home infusion
therapy health and safety standards,
contact: Sonia Swancy, (410) 786–8445
or CAPT Jacqueline Leach, (410) 786–
4282.
For information about health infusion
therapy accreditation and oversight,
contact: Caroline Gallaher (410) 786–
8705.
SUPPLEMENTARY INFORMATION:
Inspection of Public Comments: All
comments received before the close of
the comment period are available for
viewing by the public, including any
personally identifiable or confidential
business information that is included in
a comment. We post all comments
received before the close of the
comment period on the following
website as soon as possible after they
have been received: http://
www.regulations.gov. Follow the search
instructions on that website to view
public comments.
Table of Contents
I. Executive Summary
A. Purpose
B. Summary of the Major Provisions
C. Summary of Costs and Benefits
D. Improving Patient Outcomes and
Reducing Burden Through Meaningful
Measures
II. Background
A. Statutory Background
B. Current System for Payment of Home
Health Services
C. Updates to the Home Health Prospective
Payment System
D. Advancing Health Information Exchange
III. Payment Under the Home Health
Prospective Payment System (HH PPS)
A. Monitoring for Potential Impacts—
Affordable Care Act Rebasing
Adjustments
B. Proposed CY 2019 HH PPS Case-Mix
Weights
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
C. Proposed CY 2019 Home Health
Payment Rate Update
D. Proposed Rural Add-On Payments for
CYs 2019 Through 2022
E. Proposed Payments for High-Cost
Outliers Under the HH PPS
F. Proposed Implementation of the PatientDriven Groupings Model (PDGM) for CY
2020
G. Proposed Regulations Text Changes
Regarding Certifying and Recertifying
Patient Eligibility for Medicare Home
Health Services
H. The Role of Remote Patient Monitoring
Under the Medicare Home Health
Benefit
IV. Home Health Value-Based Purchasing
(HHVBP) Model
A. Background
B. Quality Measures
C. Performance Scoring Methodology
D. Update on the Public Display of Total
Performance Scores
V. Home Health Quality Reporting Program
(HH QRP)
A. Background and Statutory Authority
B. General Considerations Used for the
Selection of Quality Measures for the HH
QRP
C. Proposed Removal Factors for
Previously Adopted HH QRP Measures
D. Quality Measures Currently Adopted for
the HH QRP
E. Proposed Removal of HH QRP Measures
Beginning With the CY 2021 HH QRP
F. IMPACT Act Implementation Update
G. Form, Manner, and Timing of OASIS
Data Submission
H. Proposed Policies Regarding Public
Display for the HH QRP
I. HHCAHPS
VI. Medicare Coverage of Home Infusion
Therapy Services
A. General Background
B. Proposed Health and Safety Standards
for Home Infusion Therapy
C. Payment for Home Infusion Therapy
Services
D. Approval and Oversight of Accrediting
Organizations for Home Infusion
Therapy (HIT) Suppliers
VII. Changes to the Accreditation
Requirements for Certain Medicare
Certified Providers and Suppliers
A. Background
B. Proposed Changes to Certain
Requirements for Medicare-Certified
Providers and Suppliers at Part 488
VIII. Requests for Information
A. Request for Information on Promoting
Interoperability and Electronic
Healthcare Information Exchange
Through Possible Revisions to the CMS
Patient Health and Safety Requirements
for Hospitals and Other Medicare- and
Medicaid-Participating Providers and
Suppliers
B. Request for Information on Price
Transparency: Improving Beneficiary
Access to Home Health Agency Charge
Information
IX. Collection of Information Requirements
A. Wage Estimates
B. ICRs Regarding the OASIS
C. ICRs Regarding Home Infusion Therapy
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
D. ICRs Regarding the Approval and
Oversight of Accrediting Organizations
for Home Infusion Therapy
X. Regulatory Impact Analysis
A. Statement of Need
B. Overall Impact
C. Anticipated Effects
D. Detailed Economic Analysis
E. Alternatives Considered
F. Accounting Statement and Tables
G. Regulatory Reform Analysis Under E.O.
13771
H. Conclusion
Regulation Text
I. Executive Summary
A. Purpose
1. Home Health Prospective Payment
System (HH PPS)
This proposed rule would update the
payment rates for home health agencies
(HHAs) for calendar year (CY) 2019, as
required under section 1895(b) of the
Social Security Act (the Act). This
proposed rule would also update the
case-mix weights under section
1895(b)(4)(A)(i) and (b)(4)(B) of the Act
for CY 2019. For home health services
beginning on or after January 1, 2020,
this rule proposes case-mix
methodology refinements, which
eliminate the use of therapy thresholds
for case-mix adjustment purposes; and
proposes to change the unit of payment
from a 60-day episode of care to a 30day period of care, as mandated by
section 51001 of the Bipartisan Budget
Act of 2018 (Pub. L. 115–123)
(hereinafter referred to as the ‘‘BBA of
2018’’). This proposed rule also:
Proposes the methodology used to
determine rural add-on payments for
CYs 2019 through 2022, as required by
section 50208 of the BBA of 2018;
proposes regulations text changes
regarding certifying and recertifying
patient eligibility for Medicare home
health services under sections 1814(a)
and 1835(a) of the Act; and proposes to
define ‘‘remote patient monitoring’’
under the Medicare home health benefit
and to include the costs of such
monitoring as an allowable
administrative cost. Lastly, this rule
proposes changes to the Home Health
Value Based Purchasing (HHVBP)
Model under the authority of section
1115A of the Act, and the Home Health
Quality Reporting Program (HH QRP)
requirements under the authority of
section 1895(b)(3)(B)(v) of the Act.
2. Home Infusion Therapy Services
This proposed rule would establish a
transitional payment for home infusion
therapy services for CYs 2019 and 2020,
as required by section 50401 of the BBA
of 2018. In addition, this rule proposes
health and safety standards for home
PO 00000
Frm 00003
Fmt 4701
Sfmt 4702
32341
infusion therapy, proposes an
accreditation and oversight process for
qualified home infusion therapy
suppliers, and solicits comments
regarding payment for the home
infusion therapy services benefit for CY
2021 and subsequent years, as required
by section 5012 of the 21st Century
Cures Act (Pub. L. 114–255).
3. Safety Standards for Home Infusion
Therapy Services
This proposed rule would establish
health and safety standards for qualified
home infusion therapy suppliers as
required by Section 5012 of the 21st
Century Cures Act. These proposed
standards would establish a foundation
for ensuring patient safety and quality
care by establishing requirements for the
plan of care to be initiated and updated
by a physician; 7-day-a-week, 24-houra-day access to services and remote
monitoring; and patient education and
training regarding their home infusion
therapy care.
B. Summary of the Major Provisions
1. Home Health Prospective Payment
System (HH PPS)
Section III.A. of this rule discusses
our efforts to monitor for potential
impacts due to the rebasing adjustments
implemented in CY 2014 through CY
2017, as mandated by section 3131(a) of
the Patient Protection and Affordable
Care Act of 2010 (Pub. L. 111–148,
enacted March 23, 2010) as amended by
the Health Care and Education
Reconciliation Act of 2010 (Pub. L. 111–
152, enacted March 30, 2010),
collectively referred to as the
‘‘Affordable Care Act’’. In the CY 2015
HH PPS final rule (79 FR 66072), we
finalized our proposal to recalibrate the
case-mix weights every year with the
most current and complete data
available at the time of rulemaking. In
section III.B of this rule, we are
recalibrating the HH PPS case-mix
weights, using the most current cost and
utilization data available, in a budgetneutral manner. In section III.C., we
propose to rebase the home health
market basket and update the payment
rates under the HH PPS by the home
health payment update percentage of 2.1
percent (using the proposed 2016-based
Home Health Agency (HHA) market
basket update of 2.8 percent, minus 0.7
percentage point for multifactor
productivity) as required by section
1895(b)(3)(B)(vi)(I) of the Act. Also in
section III.C. of this proposed rule, we
propose to decrease the labor-related
share from 78.5 to 76.1 percent of total
costs on account of the rebasing of the
home health market basket. Lastly, in
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32342
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
section III.C. of this rule, we propose to
update the CY 2019 home health wage
index using FY 2015 hospital cost report
data. In section III.D. of this proposed
rule, we are proposing a new
methodology for applying rural add-on
payments for CYs 2019 through 2022, as
required by section 50208 of the BBA of
2018. In section III.E. of this rule, we are
proposing to reduce the fixed-dollar loss
ratio from 0.55 to 0.51 for CY 2019 in
order to increase outlier payments as a
percentage of total payments so that this
percentage is closer to, but no more
than, 2.5 percent.
In the CY 2018 HH PPS proposed
rule, CMS proposed an alternative casemix model, called the Home Health
Groupings Model (HHGM). Ultimately
the HHGM, including a proposed
change in the unit of payment from 60
days to 30 days, was not finalized in the
CY 2018 HH PPS final rule in order to
allow CMS additional time to consider
public comments for potential
refinements to the model and other
alternative case-mix models (82 FR
51676). In section III.F. of this proposed
rule, we are again proposing to
implement case-mix methodology
refinements and a change in the unit of
payment from a 60-day episode of care
to a 30-day period of care; however,
these changes would be effective
January 1, 2020 and would be
implemented in a budget neutral
manner, as required by section 51001 of
the BBA of 2018. Since the proposed
case-mix methodology refinements
represent a more patient-driven
approach to payment we are renaming
the proposed case-mix adjustment
methodology refinements, formerly
known as the Home Health Groupings
Model or ‘‘HHGM’’, as the ‘‘PatientDriven Groupings Model’’ or PDGM.
The proposed PDGM relies more heavily
on clinical characteristics and other
patient information to place patients
into meaningful payment categories and
eliminates the use of therapy service
thresholds, as required by section
51001(a)(3) of the BBA of 2018, that are
currently used to case-mix adjust
payments under the HH PPS. There is
also a proposal regarding how CMS
would determine whether 30-day
periods of care are subject to a LowUtilization Payment Adjustment
(LUPA). The LUPA add-on policy, the
partial episode payment adjustment
policy, and the methodology used to
calculate payments for high-cost outliers
would remain unchanged except for
occurring on a 30-day basis rather than
a 60-day basis.
In section III.G. of this proposed rule,
we are proposing regulation text
changes at 42 CFR 424.22(b)(2) to
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
eliminate the requirement that the
certifying physician must estimate how
much longer skilled services will be
needed as part of the recertification
statement. In addition, in section III.G of
this rule, consistent with section 51002
of the BBA of 2018, we are proposing to
align the regulations text at 42 CFR
424.22(c) with current subregulatory
guidance to allow medical record
documentation from the HHA to be used
to support the basis for certification
and/or recertification of home health
eligibility, if certain requirements are
met.
In section III.H. of this proposed rule,
we propose to define ‘‘remote patient
monitoring’’ under the Medicare home
health benefit as the collection of
physiologic data (for example, ECG,
blood pressure, glucose monitoring)
digitally stored and/or transmitted by
the patient and/or caregiver to the HHA.
Additionally in this section of the rule,
we propose changes to the regulations at
42 CFR 409.46 to include costs of
remote patient monitoring as allowable
administrative costs.
2. Home Health Value Based Purchasing
In section IV of this proposed rule, we
are proposing changes to the Home
Health Value Based Purchasing
(HHVBP) Model implemented January
1, 2016. We are proposing, beginning
with performance year (PY) 4, to:
Remove two Outcome and Assessment
Information Set (OASIS) based
measures, Influenza Immunization
Received for Current Flu Season and
Pneumococcal Polysaccharide Vaccine
Ever Received, from the set of
applicable measures; replace three
OASIS-based measures (Improvement in
Ambulation-Locomotion, Improvement
in Bed Transferring, and Improvement
in Bathing) with two proposed
composite measures on total normalized
composite change in self-care and
mobility; change how we calculate the
Total Performance Scores by changing
the weighting methodology for the
OASIS-based, claims-based, and
HHCAHPS measures; and change the
scoring methodology by reducing the
maximum amount of improvement
points an HHA could earn, from 10
points to 9 points. While we are not
making a specific proposal at this time,
we are also providing an update on the
progress towards developing public
reporting of performance under the
HHVBP Model and seeking comment on
what information should be made
publicly available.
PO 00000
Frm 00004
Fmt 4701
Sfmt 4702
3. Home Health Quality Reporting
Program
In section V. of this proposed rule, we
are proposing to update our policy for
removing previously adopted Home
Health (HH) Quality Reporting Program
(QRP) measures and to adopt eight
measure removal factors to align with
other QRPs, to remove seven measures
beginning with the CY 2021 HH QRP,
and to update our regulations to clarify
that not all OASIS data is required for
the HH QRP. We are also providing an
update on the implementation of certain
provisions of the IMPACT Act, and a
discussion of accounting for social risk
factors in the HH QRP. Finally, we are
proposing to increase the number of
years of data used to calculate the
Medicare Spending per Beneficiary
measure for purposes of display from 1
year to 2 years.
4. Home Infusion Therapy
In section VI.A. of this proposed rule,
we discuss general background of home
infusion therapy services and how that
will relate to the implementation of the
new home infusion benefit. In section
VI.B. of this proposed rule, we are
proposing to add a new subpart I under
the regulations at 42 CFR part 486 to
incorporate health and safety
requirements for home infusion therapy
suppliers. The proposed regulations
would provide a framework for CMS to
approve home infusion therapy
accreditation organizations. Proposed
subpart I would include General
Provisions (Scope and Purpose, and
Definitions) and Standards for Home
Infusion Therapy (Plan of Care and
Required Services). In section VI.C. of
this proposed rule, we include
information on temporary transitional
payments for home infusion therapy
services for CYs 2019 and 2020 as
mandated by section 50401 of the BBA
of 2018, and solicits comments on the
proposed regulatory definition of
‘‘Infusion Drug Administration Calendar
Day’’. Also in section VI.C. of this
proposed rule, we solicit comments
regarding payment for home infusion
therapy services for CY 2021 and
subsequent years as required by section
5012(d) of the 21st Century Cures Act.
In section VI.D. of this proposed rule,
we discuss the requirements set forth in
section 1861(iii)(3)(D)(III) of the Act,
which mandates that suppliers of home
infusion therapy receive accreditation
from a CMS-approved Accrediting
Organization (AO) in order to receive
Medicare payment. The Secretary must
designate AOs to accredit suppliers
furnishing Home Infusion therapy (HIT)
not later than January 1, 2021. Qualified
E:\FR\FM\12JYP2.SGM
12JYP2
32343
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
HIT suppliers are required to receive
accreditation before receiving Medicare
payment for services provided to
Medicare beneficiaries.
At this time, no regulations exist to
address the following elements of CMS’
approval and oversight of the AOs that
accredit suppliers of Home Infusion
Therapy: (1) The required components
to be included in a Home Infusion
Therapy AO’s initial or renewal
accreditation program application; (2)
regulations related to CMS’ review and
approval of the Home Infusion Therapy
AOs application for approval of its
accreditation program; and (3) the
ongoing monitoring and oversight of
CMS-approved Home Infusion Therapy
AOs. Therefore in this rule, we propose
to establish a set of regulations that will
govern the CMS approval and oversight
process for all HIT AOs.
We also propose to modify the
regulations for oversight for AOs that
accredit any Medicare-certified
providers and suppliers at 42 CFR 488.5
by adding a requirement that the AOs
must include a statement with their
application acknowledging that all AO
surveyors are required to complete the
relevant program specific CMS online
trainings initially, and thereafter,
consistent with requirements
established by CMS for state and federal
surveyors. We would also add another
requirement at § 488.5 that would
require the AOs for Medicare certified
providers and suppliers to provide a
written statement with their application
stating that if a fully accredited and
facility deemed to be in good-standing
provides written notification that they
wish to voluntarily withdraw from the
AO’s CMS-approved accreditation
program, the AO must continue the
facility’s current accreditation until the
effective date of withdrawal identified
by the facility or the expiration date of
the term of accreditation, whichever
comes first.
C. Summary of Costs, Transfers, and
Benefits
TABLE 1—SUMMARY OF COSTS, TRANSFERS, AND BENEFITS
Provision
description
Costs and cost savings
Transfers
Benefits
CY 2019 HH PPS Payment Rate
Update.
.......................................................
To ensure home health payments
are consistent with statutory
payment authority for CY 2019.
CY 2019 Temporary Transitional
Payments for Home Infusion
Therapy Services.
.......................................................
CY 2019 HHVBP Model ................
.......................................................
CY 2020 OASIS Changes .............
The overall economic impact of
the HH QRP and the case-mix
adjustment
methodology
changes is annual savings to
HHAs of an estimated $60 million.
.......................................................
The overall economic impact of
the HH PPS payment rate update is an estimated $400 million (2.1 percent) in increased
payments to HHAs in CY 2019.
The overall economic impact of
the temporary transitional payment for home infusion therapy
services is an estimated $60
million in increased payments
to home infusion therapy suppliers in CY 2019.
The overall economic impact of
the HHVBP Model provision for
CY 2018 through 2022 is an estimated $378 million in total
savings from a reduction in unnecessary hospitalizations and
SNF usage as a result of greater quality improvements in the
HH industry (none of which is
attributable to the changes proposed in this proposed rule). As
for payments to HHAs, there
are no aggregate increases or
decreases expected to be applied to the HHAs competing in
the model.
.......................................................
The overall economic impact of
the proposed case-mix adjustment methodology changes, including a change in the unit of
service from 60 to 30 days, for
CY 2020 results in no estimated dollar impact to HHAs,
as section 51001(a) of the BBA
of 2018 requires such change
to be implemented in a budgetneutral manner.
To ensure home health payments
are consistent with statutory
payment authority for CY 2020.
amozie on DSK3GDR082PROD with PROPOSALS2
CY 2020 Case-Mix Adjustment
Methodology Changes, Including
a Change in the Unit of Service
from 60 to 30 days.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00005
Fmt 4701
Sfmt 4702
E:\FR\FM\12JYP2.SGM
To ensure temporary transitional
payments for home infusion
therapy are consistent with statutory authority for CY 2019.
A reduction in burden to HHAs of
approximately 73 hours annually for a savings of approximately $5,150 annually per
HHA.
12JYP2
32344
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 1—SUMMARY OF COSTS, TRANSFERS, AND BENEFITS—Continued
Provision
description
Costs and cost savings
Transfers
Accreditation for Home Infusion
Therapy suppliers.
.......................................................
The cost related to an AO obtaining CMS approval of a home infusion therapy accreditation
program is estimated to be
$8,014.50 per each AO, for
AOs that have previously submitted an accreditation application to CMS. The cost across
the potential 6 home infusion
therapy AOs would be $48,087.
The cost related to each home infusion therapy AO for obtaining
CMS approval of a home infusion therapy accreditation program is estimated to be
$12,453 per each AO, for AOs
that have not previously submitted an accreditation application to CMS. The cost across
the potential 6 home infusion
therapy AOs would be $74,718.
We further estimate that each
home infusion therapy AO
would incur an estimated cost
burden in the amount of
$23,258 for compliance with the
proposed home infusion therapy AO approval and oversight
regulations
at
§§ 488.1010
through 488.1050 (including the
filing of an application). The
cost across the 6 potential
home infusion therapy AOs
would be $139,548.
D. Improving Patient Outcomes and
Reducing Burden Through Meaningful
Measures
Regulatory reform and reducing
regulatory burden are high priorities for
us. To reduce the regulatory burden on
the healthcare industry, lower health
care costs, and enhance patient care, in
October 2017, we launched the
Meaningful Measures Initiative.1 This
initiative is one component of our
agency-wide Patients Over Paperwork
Initiative 2 which is aimed at evaluating
and streamlining regulations with a goal
to reduce unnecessary cost and burden,
increase efficiencies, and improve
beneficiary experience. The Meaningful
Measures Initiative is aimed at
identifying the highest priority areas for
quality measurement and quality
improvement in order to assess the core
quality of care issues that are most vital
to advancing our work to improve
patient outcomes. The Meaningful
Measures Initiative represents a new
approach to quality measures that
fosters operational efficiencies, and will
reduce costs including, the collection
and reporting burden while producing
quality measurement that is more
focused on meaningful outcomes.
The Meaningful Measures Framework
has the following objectives:
• Address high-impact measure areas
that safeguard public health;
• Patient-centered and meaningful to
patients;
• Outcome-based where possible;
Benefits
• Fulfill each program’s statutory
requirements;
• Minimize the level of burden for
health care providers (for example,
through a preference for EHR-based
measures where possible, such as
electronic clinical quality measures);
• Provide significant opportunity for
improvement;
• Address measure needs for
population based payment through
alternative payment models; and
• Align across programs and/or with
other payers.
In order to achieve these objectives,
we have identified 19 Meaningful
Measures areas and mapped them to six
overarching quality priorities as shown
in Table 2:
amozie on DSK3GDR082PROD with PROPOSALS2
TABLE 2—MEANINGFUL MEASURES FRAMEWORK DOMAINS AND MEASURE AREAS
Quality priority
Meaningful measure area
Making Care Safer by Reducing Harm Caused in the Delivery of Care
1 Meaningful Measures web page: https://
www.cms.gov/Medicare/Quality-Initiatives-PatientAssessment-Instruments/QualityInitiativesGenInfo/
MMF/General-info-Sub-Page.html.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
Healthcare-Associated Infections.
Preventable Healthcare Harm.
2 See Remarks by Administrator Seema Verma at
the Health Care Payment Learning and Action
Network (LAN) Fall Summit, as prepared for
delivery on October 30, 2017 https://www.cms.gov/
PO 00000
Frm 00006
Fmt 4701
Sfmt 4702
Newsroom/MediaReleaseDatabase/Fact-sheets/
2017-Fact-Sheet-items/2017-10-30.html.
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
32345
TABLE 2—MEANINGFUL MEASURES FRAMEWORK DOMAINS AND MEASURE AREAS—Continued
Quality priority
Meaningful measure area
Strengthen Person and Family Engagement as Partners in Their Care
Promote Effective Communication and Coordination of Care .................
Promote Effective Prevention and Treatment of Chronic Disease ..........
Work with Communities to Promote Best Practices of Healthy Living ....
Make Care Affordable ..............................................................................
By including Meaningful Measures in
our programs, we believe that we can
also address the following cross-cutting
measure criteria:
• Eliminating disparities;
• Tracking measurable outcomes and
impact;
• Safeguarding public health;
• Achieving cost savings;
• Improving access for rural
communities; and
• Reducing burden.
We believe that the Meaningful
Measures Initiative will improve
outcomes for patients, their families,
and health care providers while
reducing burden and costs for clinicians
and providers and promoting
operational efficiencies.
II. Background
A. Statutory Background
1. Home Health Prospective Payment
System
amozie on DSK3GDR082PROD with PROPOSALS2
a. Background
The Balanced Budget Act of 1997
(BBA) (Pub. L. 105–33, enacted August
5, 1997), significantly changed the way
Medicare pays for Medicare home
health services. Section 4603 of the BBA
mandated the development of the HH
PPS. Until the implementation of the
HH PPS on October 1, 2000, HHAs
received payment under a retrospective
reimbursement system.
Section 4603(a) of the BBA mandated
the development of a HH PPS for all
Medicare-covered home health services
provided under a plan of care (POC) that
were paid on a reasonable cost basis by
adding section 1895 of the Act, entitled
‘‘Prospective Payment For Home Health
Services.’’ Section 1895(b)(1) of the Act
requires the Secretary to establish a HH
PPS for all costs of home health services
paid under Medicare. Section 1895(b)(2)
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
Care is Personalized and Aligned with Patient’s Goals.
End of Life Care according to Preferences.
Patient’s Experience of Care.
Patient Reported Functional Outcomes.
Medication Management.
Admissions and Readmissions to Hospitals.
Transfer of Health Information and Interoperability.
Preventive Care.
Management of Chronic Conditions.
Prevention, Treatment, and Management of Mental Health.
Prevention and Treatment of Opioid and Substance Use Disorders.
Risk Adjusted Mortality.
Equity of Care.
Community Engagement.
Appropriate Use of Healthcare.
Patient-focused Episode of Care.
Risk Adjusted Total Cost of Care.
of the Act requires that, in defining a
prospective payment amount, the
Secretary will consider an appropriate
unit of service and the number, type,
and duration of visits provided within
that unit, potential changes in the mix
of services provided within that unit
and their cost, and a general system
design that provides for continued
access to quality services.
Section 1895(b)(3)(A) of the Act
requires the following: (1) The
computation of a standard prospective
payment amount that includes all costs
for HH services covered and paid for on
a reasonable cost basis, and that such
amounts be initially based on the most
recent audited cost report data available
to the Secretary (as of the effective date
of the 2000 final rule), and (2) the
standardized prospective payment
amount be adjusted to account for the
effects of case-mix and wage levels
among HHAs.
Section 1895(b)(3)(B) of the Act
requires the standard prospective
payment amounts be annually updated
by the home health applicable
percentage increase. Section 1895(b)(4)
of the Act governs the payment
computation. Sections 1895(b)(4)(A)(i)
and (b)(4)(A)(ii) of the Act require the
standard prospective payment amount
to be adjusted for case-mix and
geographic differences in wage levels.
Section 1895(b)(4)(B) of the Act requires
the establishment of an appropriate
case-mix change adjustment factor for
significant variation in costs among
different units of services.
Similarly, section 1895(b)(4)(C) of the
Act requires the establishment of wage
adjustment factors that reflect the
relative level of wages, and wage-related
costs applicable to home health services
furnished in a geographic area
compared to the applicable national
PO 00000
Frm 00007
Fmt 4701
Sfmt 4702
average level. Under section
1895(b)(4)(C) of the Act, the wageadjustment factors used by the Secretary
may be the factors used under section
1886(d)(3)(E) of the Act.
Section 1895(b)(5) of the Act gives the
Secretary the option to make additions
or adjustments to the payment amount
otherwise paid in the case of outliers
due to unusual variations in the type or
amount of medically necessary care.
Section 3131(b)(2) of the Affordable
Care Act revised section 1895(b)(5) of
the Act so that total outlier payments in
a given year would not exceed 2.5
percent of total payments projected or
estimated. The provision also made
permanent a 10 percent agency-level
outlier payment cap.
In accordance with the statute, as
amended by the BBA, we published a
final rule in the July 3, 2000 Federal
Register (65 FR 41128) to implement the
HH PPS legislation. The July 2000 final
rule established requirements for the
new HH PPS for home health services
as required by section 4603 of the BBA,
as subsequently amended by section
5101 of the Omnibus Consolidated and
Emergency Supplemental
Appropriations Act for Fiscal Year 1999
(OCESAA), (Pub. L. 105–277, enacted
October 21, 1998); and by sections 302,
305, and 306 of the Medicare, Medicaid,
and SCHIP Balanced Budget Refinement
Act of 1999, (BBRA) (Pub. L. 106–113,
enacted November 29, 1999). The
requirements include the
implementation of a HH PPS for home
health services, consolidated billing
requirements, and a number of other
related changes. The HH PPS described
in that rule replaced the retrospective
reasonable cost-based system that was
used by Medicare for the payment of
home health services under Part A and
Part B. For a complete and full
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32346
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
description of the HH PPS as required
by the BBA, see the July 2000 HH PPS
final rule (65 FR 41128 through 41214).
Section 5201(c) of the Deficit
Reduction Act of 2005 (DRA) (Pub. L.
109–171, enacted February 8, 2006)
added new section 1895(b)(3)(B)(v) to
the Act, requiring HHAs to submit data
for purposes of measuring health care
quality, and linking the quality data
submission to the annual applicable
payment percentage increase. This data
submission requirement is applicable
for CY 2007 and each subsequent year.
If an HHA does not submit quality data,
the home health market basket
percentage increase is reduced by 2
percentage points. In the November 9,
2006 Federal Register (71 FR 65884,
65935), we published a final rule to
implement the pay-for-reporting
requirement of the DRA, which was
codified at § 484.225(h) and (i) in
accordance with the statute. The payfor-reporting requirement was
implemented on January 1, 2007.
The Affordable Care Act made
additional changes to the HH PPS. One
of the changes in section 3131 of the
Affordable Care Act is the amendment
to section 421(a) of the Medicare
Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) (Pub.
L. 108–173, enacted on December 8,
2003) as amended by section 5201(b) of
the DRA. Section 421(a) of the MMA, as
amended by section 3131 of the
Affordable Care Act, requires that the
Secretary increase, by 3 percent, the
payment amount otherwise made under
section 1895 of the Act, for HH services
furnished in a rural area (as defined in
section 1886(d)(2)(D) of the Act) with
respect to episodes and visits ending on
or after April 1, 2010, and before
January 1, 2016.
Section 210 of the Medicare Access
and CHIP Reauthorization Act of 2015
(Pub. L. 114–10) (MACRA) amended
section 421(a) of the MMA to extend the
3 percent rural add-on payment for
home health services provided in a rural
area (as defined in section 1886(d)(2)(D)
of the Act) through January 1, 2018. In
addition, section 411(d) of MACRA
amended section 1895(b)(3)(B) of the
Act such that CY 2018 home health
payments be updated by a 1 percent
market basket increase. This year,
section 50208(a)(1) of the BBA of 2018
again extended the rural add-on through
the end of 2018. In addition, this section
of the BBA of 2018 made some
important changes to the rural add-on
for CYs 2019 through 2022, to be
discussed below.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
b. Current System for Payment of Home
Health Services
Generally, Medicare currently makes
payment under the HH PPS on the basis
of a national, standardized 60-day
episode payment rate that is adjusted for
the applicable case-mix and wage index.
The national, standardized 60-day
episode rate includes the six home
health disciplines (skilled nursing,
home health aide, physical therapy,
speech-language pathology,
occupational therapy, and medical
social services). Payment for nonroutine supplies (NRS) is not part of the
national, standardized 60-day episode
rate, but is computed by multiplying the
relative weight for a particular NRS
severity level by the NRS conversion
factor. Payment for durable medical
equipment covered under the HH
benefit is made outside the HH PPS
payment system. To adjust for case-mix,
the HH PPS uses a 153-category casemix classification system to assign
patients to a home health resource
group (HHRG). The clinical severity
level, functional severity level, and
service utilization are computed from
responses to selected data elements in
the OASIS assessment instrument and
are used to place the patient in a
particular HHRG. Each HHRG has an
associated case-mix weight which is
used in calculating the payment for an
episode. Therapy service use is
measured by the number of therapy
visits provided during the episode and
can be categorized into nine visit level
categories (or thresholds): 0 to 5; 6; 7 to
9; 10; 11 to 13; 14 to 15; 16 to 17; 18
to 19; and 20 or more visits.
For episodes with four or fewer visits,
Medicare pays national per-visit rates
based on the discipline(s) providing the
services. An episode consisting of four
or fewer visits within a 60-day period
receives what is referred to as a lowutilization payment adjustment (LUPA).
Medicare also adjusts the national
standardized 60-day episode payment
rate for certain intervening events that
are subject to a partial episode payment
adjustment (PEP adjustment). For
certain cases that exceed a specific cost
threshold, an outlier adjustment may
also be available.
c. Updates to the Home Health
Prospective Payment System
As required by section 1895(b)(3)(B)
of the Act, we have historically updated
the HH PPS rates annually in the
Federal Register. The August 29, 2007
final rule with comment period set forth
an update to the 60-day national
episode rates and the national per-visit
rates under the HH PPS for CY 2008.
PO 00000
Frm 00008
Fmt 4701
Sfmt 4702
The CY 2008 HH PPS final rule
included an analysis performed on CY
2005 home health claims data, which
indicated a 12.78 percent increase in the
observed case-mix since 2000. Case-mix
represents the variations in conditions
of the patient population served by the
HHAs. Subsequently, a more detailed
analysis was performed on the 2005
case-mix data to evaluate if any portion
of the 12.78 percent increase was
associated with a change in the actual
clinical condition of home health
patients. We identified 8.03 percent of
the total case-mix change as real, and
therefore, decreased the 12.78 percent of
total case-mix change by 8.03 percent to
get a final nominal case-mix increase
measure of 11.75 percent (0.1278 *
(1¥0.0803) = 0.1175).
To account for the changes in casemix that were not related to an
underlying change in patient health
status, we implemented a reduction,
over 4 years, to the national,
standardized 60-day episode payment
rates. That reduction was to be 2.75
percent per year for 3 years beginning in
CY 2008 and 2.71 percent for the fourth
year in CY 2011. In the CY 2011 HH PPS
final rule (76 FR 68532), we updated our
analyses of case-mix change and
finalized a reduction of 3.79 percent,
instead of 2.71 percent, for CY 2011 and
deferred finalizing a payment reduction
for CY 2012 until further study of the
case-mix change data and methodology
was completed.
In the CY 2012 HH PPS final rule (76
FR 68526), we updated the 60-day
national episode rates and the national
per-visit rates. In addition, as discussed
in the CY 2012 HH PPS final rule (76
FR 68528), our analysis indicated that
there was a 22.59 percent increase in
overall case-mix from 2000 to 2009 and
that only 15.76 percent of that overall
observed case-mix percentage increase
was due to real case-mix change. As a
result of our analysis, we identified a
19.03 percent nominal increase in casemix. At that time, to fully account for
the 19.03 percent nominal case-mix
growth identified from 2000 to 2009, we
finalized a 3.79 percent payment
reduction in CY 2012 and a 1.32 percent
payment reduction for CY 2013.
In the CY 2013 HH PPS final rule (77
FR 67078), we implemented the 1.32
percent reduction to the payment rates
for CY 2013 finalized the previous year,
to account for nominal case-mix growth
from 2000 through 2010. When taking
into account the total measure of casemix change (23.90 percent) and the
15.97 percent of total case-mix change
estimated as real from 2000 to 2010, we
obtained a final nominal case-mix
change measure of 20.08 percent from
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
2000 to 2010 (0.2390 * (1 ¥ 0.1597) =
0.2008). To fully account for the
remainder of the 20.08 percent increase
in nominal case-mix beyond that which
was accounted for in previous payment
reductions, we estimated that the
percentage reduction to the national,
standardized 60-day episode rates for
nominal case-mix change would be 2.18
percent. Although we considered
proposing a 2.18 percent reduction to
account for the remaining increase in
measured nominal case-mix, we
finalized the 1.32 percent payment
reduction to the national, standardized
60-day episode rates in the CY 2012 HH
PPS final rule (76 FR 68532). Section
3131(a) of the Affordable Care Act
added new section 1895(b)(3)(A)(iii) to
the Act, which required that, beginning
in CY 2014, we apply an adjustment to
the national, standardized 60-day
episode rate and other amounts that
reflect factors such as changes in the
number of visits in an episode, the mix
of services in an episode, the level of
intensity of services in an episode, the
average cost of providing care per
episode, and other relevant factors.
Additionally, we were required to phase
in any adjustment over a 4-year period
in equal increments, not to exceed 3.5
percent of the payment amount (or
amounts) as of the date of enactment of
the Affordable Care Act in 2010, and
fully implement the rebasing
adjustments by CY 2017. Therefore, in
the CY 2014 HH PPS final rule (78 FR
72256) for each year, CY 2014 through
CY 2017, we finalized a fixed-dollar
reduction to the national, standardized
60-day episode payment rate of $80.95
per year, increases to the national pervisit payment rates per year, and a
decrease to the NRS conversion factor of
2.82 percent per year. We also finalized
three separate LUPA add-on factors for
skilled nursing, physical therapy, and
speech-language pathology and removed
170 diagnosis codes from assignment to
diagnosis groups in the HH PPS
Grouper. In the CY 2015 HH PPS final
rule (79 FR 66032), we implemented the
second year of the 4-year phase-in of the
rebasing adjustments to the HH PPS
payment rates and made changes to the
HH PPS case-mix weights. In addition,
we simplified the face-to-face encounter
regulatory requirements and the therapy
reassessment timeframes.
In the CY 2016 HH PPS final rule (80
FR 68624), we implemented the third
year of the 4-year phase-in of the
rebasing adjustments to the national,
standardized 60-day episode payment
amount, the national per-visit rates and
the NRS conversion factor (as discussed
previously). In the CY 2016 HH PPS
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
final rule, we also recalibrated the HH
PPS case-mix weights, using the most
current cost and utilization data
available, in a budget-neutral manner
and finalized reductions to the national,
standardized 60-day episode payment
rate in CY 2016, CY 2017, and CY 2018
of 0.97 percent in each year to account
for estimated case-mix growth unrelated
to increases in patient acuity (that is,
nominal case-mix growth) between CY
2012 and CY 2014. Finally, section
421(a) of the MMA, as amended by
section 210 of the MACRA, extended
the payment increase of 3 percent for
HH services provided in rural areas (as
defined in section 1886(d)(2)(D) of the
Act) to episodes or visits ending before
January 1, 2018.
In the CY 2017 HH PPS final rule (81
FR 76702), we implemented the last
year of the 4-year phase-in of the
rebasing adjustments to the national,
standardized 60-day episode payment
amount, the national per-visit rates and
the NRS conversion factor (as outlined
previously). We also finalized changes
to the methodology used to calculate
outlier payments under the authority of
section 1895(b)(5) of the Act. Lastly, in
accordance with section 1834(s) of the
Act, as added by section 504(a) of the
Consolidated Appropriations Act, 2016
(Pub. L. 114–113, enacted December 18,
2015), we implemented changes in
payment for furnishing Negative
Pressure Wound Therapy (NPWT) using
a disposable device for patients under a
home health plan of care for which
payment would otherwise be made
under section 1895(b) of the Act.
2. Home Infusion Therapy
Section 5012 of the 21st Century
Cures Act (‘‘the Cures Act’’) (Pub. L.
114–255), which amended sections
1861(s)(2) and 1861(iii) of the Act,
established a new Medicare home
infusion therapy benefit. The Medicare
home infusion therapy benefit covers
the professional services including
nursing services furnished in
accordance with the plan of care,
patient training and education (not
otherwise covered under the durable
medical equipment benefit), remote
monitoring, and monitoring services for
the provision of home infusion therapy
and home infusion drugs furnished by
a qualified home infusion therapy
supplier. This benefit will ensure
consistency in coverage for home
infusion benefits for all Medicare
beneficiaries. Section 50401 of the BBA
of 2018 amended section 1834(u) of the
Act by adding a new paragraph (7) that
establishes a home infusion therapy
services temporary transitional payment
for eligible home infusion suppliers for
PO 00000
Frm 00009
Fmt 4701
Sfmt 4702
32347
certain items and services furnished in
coordination with the furnishing of
transitional home infusion drugs
beginning January 1, 2019. This
temporary payment covers the cost of
the same items and services, as defined
in section 1861(iii)(2)(A) and (B) of the
Act, related to the administration of
home infusion drugs. The temporary
transitional payment would begin on
January 1, 2019 and end the day before
the full implementation of the home
infusion therapy benefit on January 1,
2021, as required by section 5012 of the
21st Century Cures Act.
Home infusion therapy is a treatment
option for patients with a wide range of
acute and chronic conditions, ranging
from bacterial infections to more
complex conditions such as late-stage
heart failure and immune deficiencies.
Home infusion therapy affords a patient
independence and better quality of life,
because it is provided in the comfort of
the patient’s home at a time that best fits
his or her needs. This is significant,
because generally patients can return to
their daily activities after they receive
their infusion treatments and, in many
cases, they can continue their activities
while receiving their treatments. In
addition, home infusion therapy can
provide improved safety and better
outcomes. The home has been shown to
be a safe setting for patients to receive
infusion therapy.3 Additionally,
patients receiving treatment outside of
the hospital setting may be at lower risk
of hospital-acquired infections, which
can be more difficult to treat because of
multi-drug resistance than those that are
community-acquired. This is
particularly important for vulnerable
patients such as those who are
immunocompromised, as hospitalacquired infections are increasingly
caused by antibiotic-resistant pathogens.
Infusion therapy typically means that
a drug is administered intravenously,
but the term may also refer to situations
where drugs are provided through other
non-oral routes, such as intramuscular
injections and epidural routes (into the
membranes surrounding the spinal
cord). Diseases that may require
infusion therapy include infections that
are unresponsive to oral antibiotics,
cancer and cancer-related pain,
3 Bhole, M.V., Burton, J., & Chapel, H.M., (2008).
Self-infusion programs for immunoglobulin
replacement at home: Feasibility, safety and
efficacy. Immunology and Allergy Clinics of North
America, 28(4), 821–832. doi:10.1016/j.iac.2008.06.
005.
Souayah, N., Hasan, A., Khan, H., et al. (2011).
The safety profile of home infusion of intravenous
immunoglobulin in patients with
neuroimmunologic disorders. Journal of Clinical
Neuromuscular Disease, 12(supp 4), S1–10. doi:
10.1097/CND.0b013e3182212589.
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32348
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
dehydration, and gastrointestinal
diseases or disorders which prevent
normal functioning of the
gastrointestinal system. Other
conditions treated with specialty
infusion therapies may include some
forms of cancers, congestive heart
failure, Crohn’s Disease, hemophilia,
hepatitis, immune deficiencies, multiple
sclerosis and rheumatoid arthritis.
Infusion therapy originates with a
prescription order from a physician or
another qualified prescriber who is
overseeing the care of the patient. The
prescription order is sent to a home
infusion therapy supplier, which is a
state-licensed pharmacy, physician, or
other provider of services or suppliers
licensed by the state.
A 2010 Government Accountability
Office (GAO) report (10–426) found that
most health insurers rely on
credentialing, accreditation, or both to
help ensure that plan members receive
quality home infusion services from
their network suppliers.4 Home infusion
AOs conduct on-site surveys to evaluate
all components of the service, including
medical equipment, nursing, and
pharmacy. Accreditation standards can
include such requirements as the CMS
Conditions of Participation for home
health services, other Federal
government regulations, and industry
best practices. All of the accreditation
standards evaluate a range of provider
competencies, such as having a
complete plan of care, response to
adverse events, and implementation of a
quality improvement plan.
Sections 1861(iii)(3)(D)(III) and
1834(u)(5) of the Act, as amended by
section 5012 of the Cures Act requires
that, in order to participate in Medicare,
home infusion therapy suppliers must
select a CMS-approved AO and undergo
an accreditation review process to
demonstrate that the home infusion
therapy program meets the accreditation
organization’s standards. Section
1861(iii) of the Act, as amended by
section 5012 of the Cures Act, sets forth
standards in three areas: (1) Ensuring
that all patients have a plan of care
established and updated by a physician
that sets out the care and prescribed
infusion therapy necessary to meet the
patient-specific needs, (2) having
procedures to ensure that remote
monitoring services associated with
administering infusion drugs in a
4 https://www.gao.gov/assets/310/305261.pdf.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
patient’s home are provided, and (3)
having procedures to ensure that
patients receive education and training
on the effective use of medications and
equipment in the home.
D. Advancing Health Information
Exchange
The Department of Health and Human
Services (HHS) has a number of
initiatives designed to encourage and
support the adoption of interoperable
health information technology and to
promote nationwide health information
exchange to improve health care. The
Office of the National Coordinator for
Health Information Technology (ONC)
and CMS work collaboratively to
advance interoperability across settings
of care, including post-acute care.
The Improving Medicare Post-Acute
Care Transformation Act of 2014 (Pub.
L. 113–185) (IMPACT Act) requires
assessment data to be standardized and
interoperable to allow for exchange of
the data among post-acute providers and
other providers. To further
interoperability in post-acute care, CMS
is developing a Data Element Library to
serve as a publically available
centralized, authoritative resource for
standardized data elements and their
associated mappings to health IT
standards. These interoperable data
elements can reduce provider burden by
allowing the use and reuse of healthcare
data, support provider exchange of
electronic health information for care
coordination, person-centered care, and
support real-time, data driven, clinical
decision making. Once available,
standards in the Data Element Library
can be referenced on the CMS website
and in the ONC Interoperability
Standards Advisory (ISA).
The 2018 Interoperability Standards
Advisory (ISA) is available at: https://
www.healthit.gov/standards-advisory.
Most recently, the 21st Century Cures
Act (Pub. L. 114–255), enacted in 2016,
requires HHS to take new steps to
enable the electronic sharing of health
information ensuring interoperability
for providers and settings across the
care continuum. Specifically, Congress
directed ONC to ‘‘develop or support a
trusted exchange framework, including
a common agreement among health
information networks nationally.’’ This
framework (https://beta.healthit.gov/
topic/interoperability/trusted-exchangeframework-and-common-agreement)
outlines a common set of principles for
PO 00000
Frm 00010
Fmt 4701
Sfmt 4702
trusted exchange and minimum terms
and conditions for trusted exchange in
order to enable interoperability across
disparate health information networks.
In another important provision,
Congress defined ‘‘information
blocking’’ as practices likely to interfere
with, prevent, or materially discourage
access, exchange, or use of electronic
health information, and established new
authority for HHS to discourage these
practices. We invite providers to learn
more about these important
developments and how they are likely
to affect HHAs.
III. Proposed Provisions for Payment
Under the Home Health Prospective
Payment System (HH PPS)
A. Monitoring for Potential Impacts—
Affordable Care Act Rebasing
Adjustments
1. Analysis of FY 2016 HHA Cost Report
Data
As part of our efforts in monitoring
the potential impacts of the rebasing
adjustments finalized in the CY 2014
HH PPS final rule (78 FR 72293), we
continue to update our analysis of home
health cost report and claims data.
Previous years’ cost report and claims
data analyses and results can be found
in the CY 2018 HH PPS proposed rule
(82 FR 35277–35278). For this proposed
rule, we analyzed the 2016 HHA cost
report data (the most recent, complete
data available at the time of this
proposed rule) and 2016 HHA claims
data to obtain the average number of
visits per episode that match to the year
of cost report data analyzed. To
determine the 2016 average cost per
visit per discipline, we applied the same
trimming methodology outlined in the
CY 2014 HH PPS proposed rule (78 FR
40284) and weighted the costs per visit
from the 2016 cost reports by size,
facility type, and urban/rural location so
the costs per visit were nationally
representative according to 2016 claims
data. The 2016 average number of visits
was taken from 2016 claims data. We
estimated the cost of a 60-day episode
in CY 2016 to be $2,538.54 using 2016
cost report data (Table 2). However, the
national, standardized 60-day episode
payment amount in CY 2016 was
$2,965.12. The difference between the
60-day episode payment rate and
average cost per episode of care for CY
2016 was 16.8 percent.
E:\FR\FM\12JYP2.SGM
12JYP2
32349
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 2—2016 ESTIMATED COST PER EPISODE
2016 Average
costs per visit
2016 Average
NRS costs per
visit
2016 Average
cost + NRS
per visit
2016 Average
number of
visits
2016 60-Day
episode costs
Skilled Nursing .....................................................................
Physical Therapy .................................................................
Occupational Therapy ..........................................................
Speech Pathology ................................................................
Medical Social Services .......................................................
Home Health Aides ..............................................................
$132.83
156.04
153.53
170.06
219.73
60.50
$3.41
3.41
3.41
3.41
3.41
3.41
$136.24
159.45
156.94
173.47
223.14
63.91
8.81
5.58
1.56
0.32
0.14
1.83
$1,200.27
889.73
244.83
55.51
31.24
116.96
Total ..............................................................................
........................
........................
........................
18.24
2,538.54
Discipline
Source: Medicare cost reports pulled in March 2018 and Medicare claims data from 2015 and 2016 for episodes (excluding low-utilization payment adjusted episodes and partial-episode-payment adjusted episodes), linked to OASIS assessments for episodes ending in CY 2016.
2. Analysis of CY 2017 HHA Claims
Data
In the CY 2014 HH PPS final rule (78
FR 72256), some commenters expressed
concern that the rebasing of the HH PPS
payment rates would result in HHA
closures and would therefore diminish
access to home health services. In
addition to examining more recent cost
report data, for this proposed rule we
examined home health claims data from
all four years during which rebasing
adjustments were made (CY 2014, CY
2015, CY 2016, and CY 2017), the first
calendar year of the HH PPS (CY 2001),
and claims data for the year prior to the
implementation of the rebasing
adjustments (CY 2013). Preliminary
analysis of CY 2017 home health claims
data indicates that the number of
episodes decreased by 5.3 percent and
the number of home health users that
received at least one episode of care
decreased by 3.2 percent from 2016 to
2017, while the number of FFS
beneficiaries decreased 0.1 percent from
2016 to 2017. Between 2013 and 2014
there appears to be a net decrease in the
number of HHAs billing Medicare for
home health services of 1.6 percent, a
continued decrease of 1.7 percent from
2014 to 2015, a decrease of 3.4 percent
from 2015 to 2016, and a decrease of 4.4
percent from 2016 to 2017. We note that
in CY 2016 there were 2.9 HHAs per
10,000 FFS beneficiaries and 2.8 HHAs
per 10,000 FFS beneficiaries in CY
2017, which remains markedly higher
than the 1.9 HHAs per 10,000 FFS
beneficiaries close to the inception of
the HH PPS in 2001 (the HH PPS was
implemented on October 1, 2000). The
number of home health users, as a
percentage of FFS beneficiaries, has
decreased from 9.0 percent in 2013 to
8.4 percent in 2017.
TABLE 3—HOME HEALTH STATISTICS, CY 2001 AND CY 2013 THROUGH CY 2017
Number of episodes .................................
Beneficiaries receiving at least 1 episode
(Home Health Users) ...........................
Part A and/or B FFS beneficiaries ...........
Episodes per Part A and/or B FFS beneficiaries .................................................
Home health users as a percentage of
Part A and/or B FFS beneficiaries .......
HHAs providing at least 1 episode ..........
HHAs per 10,000 Part A and/or B FFS
beneficiaries .........................................
2001
2013
2014
2015
2016
2017
3,896,502
6,708,923
6,451,283
6,340,932
6,294,234
5,963,780
2,412,318
34,899,167
3,484,579
38,505,609
3,381,635
38,506,534
3,365,512
38,506,534
3,350,174
38,555,150
3,242,346
38,509,031
0.11
0.17
0.17
0.17
0.16
0.15
6.9%
6,511
9.0%
11,889
8.8%
11,693
8.8%
11,381
8.7%
11,102
8.4%
10,612
1.9
3.1
3.0
3.0
2.9
2.8
amozie on DSK3GDR082PROD with PROPOSALS2
Source: National claims history (NCH) data obtained from Chronic Condition Warehouse (CCW)—Accessed on May 14, 2014 and August 19,
2014 for CY 2013 data; accessed on May 7, 2015 for CY 2001 and CY 2014 data; accessed on April 7, 2016 for CY 2015 data; accessed on
March 20, 2017 for CY 2016 data; accessed on March 8, 2018 for CY 2017 data; and Medicare enrollment information obtained from the CCW
Master Beneficiary Summary File. Beneficiaries are the total number of beneficiaries in a given year with at least 1 month of Part A and/or Part B
Fee-for-Service coverage without having any months of Medicare Advantage coverage.
Note(s): These results include all episode types (Normal, PEP, Outlier, LUPA) and also include episodes from outlying areas (outside of 50
States and District of Columbia). Only episodes with a through date in the year specified are included. Episodes with a claim frequency code
equal to ‘‘0’’ (‘‘Non-payment/zero claims’’) and ‘‘2’’ (‘‘Interim—first claim’’) are excluded. If a beneficiary is treated by providers from multiple
states within a year the beneficiary is counted within each state’s unique number of beneficiaries served.
In addition to examining home health
claims data from all four years of the
implementation of rebasing adjustments
required by the Affordable Care Act, we
examined trends in home health
utilization for all years starting in CY
2001 and up through CY 2017. Figure 1,
displays the average number of visits
per 60-day episode of care and the
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
average payment per visit. While the
average payment per visit has steadily
increased from approximately $116 in
CY 2001 to $170 for CY 2017, the
average total number of visits per 60-day
episode of care has declined, most
notably between CY 2009 (21.7 visits
per episode) and CY 2010 (19.8 visits
per episode), which was the first year
PO 00000
Frm 00011
Fmt 4701
Sfmt 4702
that the 10 percent agency-level cap on
HHA outlier payments was
implemented. The average of total visits
per episode has steadily decreased from
21.7 in 2009 to 17.9 in 2017.
BILLING CODE 4120–01–P
E:\FR\FM\12JYP2.SGM
12JYP2
32350
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
Figure 2 displays the average number
of visits by discipline type for a 60-day
episode of care and shows that while
the number of therapy visits per 60-day
episode of care has increased steadily,
the number of skilled nursing and home
health aide visits have decreased
between CY 2009 and CY 2017. The
results of the Report to Congress,
‘‘Medicare Home Health Study: An
Investigation on Access to Care and
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
Payment for Vulnerable Patient
Populations’’, required by section
3131(d) of the Affordable Care Act,
suggests that the current home health
payment system may discourage HHAs
from serving patients with clinically
complex and/or poorly controlled
chronic conditions who do not qualify
for therapy but require a large number
of skilled nursing visits.5 The home
5 Report to Congress Medicare Home Health
Study: An Investigation on Access to Care and
PO 00000
Frm 00012
Fmt 4701
Sfmt 4702
health study results seem to be
consistent with the recent trend in the
decreased number of visits per episode
of care driven by decreases in skilled
nursing and home health aide services
evident in Figures 1 and 2.
Payment for Vulnerable Patient Populations (2014).
Available at: https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
HomeHealthPPS/Downloads/HH-Report-toCongress.pdf.
E:\FR\FM\12JYP2.SGM
12JYP2
EP12JY18.000
amozie on DSK3GDR082PROD with PROPOSALS2
BILLING CODE 4120–01–C
As part of our monitoring efforts, we
also examined the trends in episode
timing and service use over time.
Specifically, we examined the
percentage of early episodes with 0 to
19 therapy visits, late episodes with 0 to
19 therapy visits, and episodes with 20+
therapy visits from CY 2008 to CY 2017.
In CY 2008, we implemented
refinements to the HH PPS case-mix
system. As part of those refinements, we
added additional therapy thresholds
and differentiated between early and
late episodes for those episodes with
less than 20+ therapy visits. Early
episodes are defined as the 1st or 2nd
episode in a sequence of adjacent
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
covered episodes. Late episodes are
defined as the 3rd and subsequent
episodes in a sequence of adjacent
covered episodes. Table 4 shows that
the percentage of early and late episodes
from CY 2008 to CY 2017 has remained
relatively stable over time. There has
been a decrease in the percentage of
early episodes with 0 to 19 therapy
visits from 65.9 percent in CY 2008 to
61.3 percent in CY 2017 and a slight
increase in the percentage of late
episodes with 0 to 19 therapy visits
from 29.5 percent in CY 2008 to 31.2
percent in CY 2017. In 2015, the casemix weights for the third and later
episodes of care with 0 to 19 therapy
PO 00000
Frm 00013
Fmt 4701
Sfmt 4702
32351
visits decreased as a result of the CY
2015 recalibration of the case-mix
weights. Despite the decreases in the
case-mix weights for the later episodes,
the percentage of late episodes with 0 to
19 therapy visits did not change
substantially. However, episode timing
is not a variable in the determination of
the case-mix weights for those episodes
with 20+ therapy visits and the
percentage of episodes with 20+ therapy
visits has increased from 4.6 percent in
CY 2008 to 7.6 percent in CY 2017.
E:\FR\FM\12JYP2.SGM
12JYP2
EP12JY18.001
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
32352
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 4—HOME HEALTH EPISODES BY EPISODE TIMING, CY 2008 THROUGH CY 2017
Year
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
All episodes
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
Number of
early episodes
(excluding
episodes with
20+ visits)
5,423,037
6,530,200
6,877,598
6,857,885
6,767,576
6,733,146
6,616,875
6,644,922
6,294,232
5,963,778
% of early
episodes
(excluding
episodes with
20+ visits)
3,571,619
3,701,652
3,872,504
3,912,982
3,955,207
4,023,486
3,980,151
4,008,279
3,802,254
3,655,636
Number of
late episodes
(excluding
episodes with
20+ visits)
65.9
56.7
56.3
57.1
58.4
59.8
60.2
60.3
60.4
61.3
% of late
episodes
(excluding
episodes
with
20+ visits)
1,600,587
2,456,308
2,586,493
2,564,859
2,458,734
2,347,420
2,263,638
2,205,052
2,053,972
1,857,840
29.5
37.6
37.6
37.4
36.3
34.9
34.2
33.2
32.6
31.2
Number of
episodes with
20+ visits
250,831
372,240
418,601
380,044
353,635
362,240
373,086
431,591
438,006
450,302
% of episodes
with
20+ visits
4.6
5.7
6.1
5.5
5.2
5.4
5.6
6.5
7.0
7.6
Source: National claims history (NCH) data obtained from Chronic Condition Warehouse (CCW)—Accessed on March 6, 2018.
Note(s): Only episodes with a through date in the year specified are included. Episodes with a claim frequency code equal to ‘‘0’’ (‘‘Non-payment/zero claims’’) and ‘‘2’’ (‘‘Interim—first claim’’) are excluded.
amozie on DSK3GDR082PROD with PROPOSALS2
We also examined trends in
admission source for home health
episodes over time. Specifically, we
examined the admission source for the
‘‘first or only’’ episodes of care (first
episodes in a sequence of adjacent
episodes of care or the only episode of
care) from CY 2008 through CY 2017
(Figure 3). The percentage of first or
only episodes with an acute admission
source, defined as episodes with an
inpatient hospital stay within the 14
days prior to a home health episode, has
decreased from 38.6 percent in CY 2008
to 34.8 percent in CY 2017. The
percentage of first or only episodes with
a post-acute admission source, defined
as episodes which had a stay at a skilled
nursing facility (SNF), inpatient
rehabilitation facility (IRF), or long term
care hospital (LTCH) within 14 days
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
prior to the home health episode, has
slightly increased from 16.4 percent in
CY 2008 to 17.6 percent in CY 2017.
The percentage of first or only episodes
with a community admission source,
defined as episodes which did not have
an acute or post-acute stay in the 14
days prior to the home health episode,
increased from 37.4 percent in CY 2008
to 41.5 percent in CY 2017. Our findings
on the trends in admission source show
a similar pattern with MedPAC’s as
outlined in their 2015 Report to the
Congress.6 MedPAC concluded that
6 Medicare Payment Advisory Commission
(MedPAC). ‘‘Home Health Care Services.’’ Report to
the Congress: Medicare Payment Policy.
Washington, DC, March 2015. P. 214. Accessed on
3/28/2017 at: http://www.medpac.gov/docs/defaultsource/reports/chapter-9-home-health-careservices-march-2015-report-.pdf?sfvrsn=0.
PO 00000
Frm 00014
Fmt 4701
Sfmt 4702
there has been tremendous growth in
the use of home health for patients
residing in the community (that is,
episodes not preceded by a prior
hospitalization) and that these episodes
have more than doubled since 2001.
However, MedPAC examined admission
source trends from 2002 up through
2013 and included first and subsequent
episodes of care, whereas CMS analysis,
as described above, included ‘‘first or
only’’ episodes of care. Nonetheless,
both analyses show a trend of increasing
episodes of care without a preceding
inpatient stay. MedPAC suggests there is
significant potential for overuse,
particularly since Medicare does not
currently require any cost sharing for
home health care.
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
B. Proposed CY 2019 HH PPS Case-Mix
Weights
In the CY 2015 HH PPS final rule (79
FR 66072), we finalized a policy to
annually recalibrate the HH PPS casemix weights—adjusting the weights
relative to one another—using the most
current, complete data available. To
recalibrate the HH PPS case-mix weights
for CY 2018, we will use the same
methodology finalized in the CY 2008
HH PPS final rule (72 FR 49762), the CY
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
2012 HH PPS final rule (76 FR 68526),
and the CY 2015 HH PPS final rule (79
FR 66032). Annual recalibration of the
HH PPS case-mix weights ensures that
the case-mix weights reflect, as
accurately as possible, current home
health resource use and changes in
utilization patterns.
To generate the proposed CY 2019 HH
PPS case-mix weights, we used CY 2017
home health claims data (as of March 2,
2018) with linked OASIS data. These
data are the most current and complete
data available at this time. We will use
CY 2017 home health claims data (as of
June 30, 2018 or later) with linked
OASIS data to generate the CY 2019 HH
PPS case-mix weights in the CY 2019
HH PPS final rule. The process we used
to calculate the HH PPS case-mix
weights are outlined below.
PO 00000
Frm 00015
Fmt 4701
Sfmt 4702
Step 1: Re-estimate the four-equation
model to determine the clinical and
functional points for an episode using
wage-weighted minutes of care as our
dependent variable for resource use.
The wage-weighted minutes of care are
determined using the CY 2016 Bureau of
Labor Statistics national hourly wage
plus fringe rates for the six home health
disciplines and the minutes per visit
from the claim. The points for each of
the variables for each leg of the model,
updated with CY 2017 home health
claims data, are shown in Table 5. The
points for the clinical variables are
added together to determine an
episode’s clinical score. The points for
the functional variables are added
together to determine an episode’s
functional score.
BILLING CODE 4120–01–P
E:\FR\FM\12JYP2.SGM
12JYP2
EP12JY18.002
We will continue to monitor for
potential impacts due to the rebasing
adjustments required by section 3131(a)
of the Affordable Care Act and other
policy changes in the future.
Independent effects of any one policy
may be difficult to discern in years
where multiple policy changes occur in
any given year.
32353
32354
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 5: CASE-MIX ADJUSTMENT VARIABLES AND SCORES
EQUATION:
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
amozie on DSK3GDR082PROD with PROPOSALS2
17
18
CLINICAL DIMENSION
Primary or Other Diagnosis = Blindness/Low Vision
Primary or Other Diagnosis = Blood disorders
Primary or Other Diagnosis = Cancer, selected benign neoplasms
Primary Diagnosis = Diabetes
Other Diagnosis = Diabetes
Primary or Other Diagnosis = Dysphagia
AND
Primary or Other Diagnosis= Neuro 3- Stroke
Primary or Other Diagnosis = Dysphagia
AND
M1030 (Therapy at home)= 3 (Enteral)
Primary or Other Diagnosis = Gastrointestinal disorders
Primary or Other Diagnosis = Gastrointestinal disorders
AND
M1630 (ostomy)= 1 or 2
Primary or Other Diagnosis = Gastrointestinal disorders
AND
Primary or Other Diagnosis = Neuro 1 -Brain disorders and paralysis,
OR Neuro 2 - Peripheral neurological disorders, OR Neuro 3 - Stroke,
OR Neuro 4- Multiple Sclerosis
Primary or Other Diagnosis= Heart Disease OR Hypertension
Primary Diagnosis = Neuro 1 -Brain disorders and paralysis
Primary or Other Diagnosis = Neuro 1 -Brain disorders and paralysis
AND
M1840 (Toilet transfer)= 2 or more
Primary or Other Diagnosis = Neuro 1 -Brain disorders and paralysis
OR Neuro 2 - Peripheral neurological disorders
AND
M1810 or M1820 (Dressing upper or lower body)= 1, 2, or 3
Primary or Other Diagnosis= Neuro 3- Stroke
Primary or Other Diagnosis= Neuro 3- Stroke
AND
Ml810 or Ml820 (Dressing upper or lower body)= 1, 2, or 3
Primary or Other Diagnosis= Neuro 3- Stroke
AND
M1860 (Ambulation) = 4 or more
Primary or Other Diagnosis= Neuro 4 -Multiple Sclerosis AND AT
LEAST ONE OF THE FOLLOWING:
M1830 (Bathing)= 2 or more
OR
M1840 (Toilet transfer)= 2 or more
OR
M1850 (Transferring) = 2 or more
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00016
Fmt 4701
Sfmt 4725
E:\FR\FM\12JYP2.SGM
1 or 2
0-13
1 or 2
14+
3+
0-13
3+
14+
1
2
3
4
2
2
4
2
4
2
15
15
5
5
1
2
5
2
2
3
7
4
2
7
3
2
3
5
2
3
6
2
3
2
12JYP2
7
3
7
EP12JY18.014
Episode number within sequence of adjacent episodes
Therapy visits
32355
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
20
21
22
23
24
25
26
27
amozie on DSK3GDR082PROD with PROPOSALS2
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00017
Fmt 4701
Sfmt 4725
E:\FR\FM\12JYP2.SGM
7
2
7
2
3
1
2
14
6
14
5
11
7
11
1
1
14
10
17
10
13
7
14
10
10
10
7
1
3
2
3
5
3
5
2
1
2
1
6
1
2
12JYP2
4
16
27
12
15
6
5
1
4
9
1
2
2
6
8
5
7
4
4
15
22
12
15
11
8
2
3
7
2
4
5
1
2
EP12JY18.015
19
OR
Ml860 (Ambulation) = 4 or more
Primary or Other Diagnosis = Ortho 1 - Leg Disorders or Gait Disorders
AND
Ml324 (most problematic pressure ulcer stage)= 1, 2, 3 or 4
Primary or Other Diagnosis= Ortho 1 -Leg OR Ortho 2- Other
orthopedic disorders
AND
Ml 030 (Therapy at home) = 1 (IV/Infusion) or 2 (Parenteral)
Primary or Other Diagnosis = Psych 1 - Affective and other psychoses,
depression
Primary or Other Diagnosis = Psych 2 - Degenerative and other organic
psychiatric disorders
Primary or Other Diagnosis = Pulmonary disorders
Primary or Other Diagnosis = Pulmonary disorders AND
Ml860 (Ambulation) = 1 or more
Primary Diagnosis= Skin 1 -Traumatic wounds, bums, and postoperative complications
Other Diagnosis= Skin 1 -Traumatic wounds, bums, post-operative
complications
Primary or Other Diagnosis = Skin 1 -Traumatic wounds, bums, and
post-operative complications OR Skin 2 - Ulcers and other skin
conditions
AND
Ml 030 (Therapy at home) = 1 (IV/Infusion) or 2 (Parenteral)
Primary or Other Diagnosis = Skin 2 - Ulcers and other skin conditions
Primary or Other Diagnosis = Tracheostomy
Primary or Other Diagnosis= Urostomy/Cystostomy
Ml 030 (Therapy at home) = 1 (IV/Infusion) or 2 (Parenteral)
Ml030 (Therapy at home)= 3 (Enteral)
Ml200 (Vision)= 1 or more
Ml242 (Pain)= 3 or 4
Ml308 = Two or more pressure ulcers at stage 3 or 4
Ml324 (Most problematic pressure ulcer stage)= 1 or 2
Ml324 (Most problematic pressure ulcer stage)= 3 or 4
Ml334 (Stasis ulcer status)= 2
Ml334 (Stasis ulcer status)= 3
Ml342 (Surgical wound status)= 2
Ml342 (Surgical wound status)= 3
Ml400 (Dyspnea)= 2, 3, or 4
Ml620 (Bowel Incontinence)= 2 to 5
Ml630 (Ostomy)= 1 or 2
M2030 (Injectable Drug Use)= 0, 1, 2, or 3
FUNCTIONAL DIMENSION
Ml810 or Ml820 (Dressing upper orlower body)= 1, 2, or 3
Ml830 (Bathing)= 2 or more
Ml840 (Toilet transferring)= 2 or more
Ml850 (Transferring)= 2 or more
32356
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
BILLING CODE 4120–01–C
In updating the four-equation model
for CY 2019, using 2017 home health
claims data (the last update to the fourequation model for CY 2018 used CY
2016 home health claims data), there
were few changes to the point values for
the variables in the four-equation
model. These relatively minor changes
reflect the change in the relationship
between the grouper variables and
resource use between CY 2016 and CY
2017. The CY 2019 four-equation model
resulted in 113 point-giving variables
being used in the model (as compared
to the 119 variables for the CY 2018
recalibration, which can be found in
Table 2 of the CY 2018 HH PPS final
rule (82 FR 51684)). There were 7
variables that were added to the model
and 13 variables that were dropped from
the model due to the absence of
additional resources associated with the
variable. Of the variables that were in
both the four-equation model for CY
2019 and the four-equation model for
CY 2018, the points for 10 variables
increased in the CY 2019 four-equation
model and the points for 67 variables
decreased in the CY 2019 4-equation
model. There were 29 variables with the
same point values.
Step 2: Re-defining the clinical and
functional thresholds so they are
reflective of the new points associated
with the CY 2019 four-equation model.
After estimating the points for each of
the variables and summing the clinical
and functional points for each episode,
we look at the distribution of the
clinical score and functional score,
breaking the episodes into different
steps. The categorizations for the steps
are as follows:
• Step 1: First and second episodes,
0–13 therapy visits.
• Step 2.1: First and second episodes,
14–19 therapy visits.
• Step 2.2: Third episodes and
beyond, 14–19 therapy visits.
• Step 3: Third episodes and beyond,
0–13 therapy visits.
• Step 4: Episodes with 20+ therapy
visits.
We then divide the distribution of the
clinical score for episodes within a step
such that a third of episodes are
classified as low clinical score, a third
of episodes are classified as medium
clinical score, and a third of episodes
are classified as high clinical score. The
same approach is then done looking at
the functional score. It was not always
possible to evenly divide the episodes
within each step into thirds due to
many episodes being clustered around
one particular score.7 Also, we looked at
the average resource use associated with
each clinical and functional score and
used that as a guide for setting our
thresholds. We grouped scores with
similar average resource use within the
same level (even if it meant that more
or less than a third of episodes were
placed within a level). The new
thresholds, based off the CY 2019 fourequation model points are shown in
Table 6.
TABLE 6—PROPOSED CY 2019 CLINICAL AND FUNCTIONAL THRESHOLDS
All Episodes
0 to 13
therapy visits
14 to 19
therapy visits
0 to 13
therapy visits
14 to 19
therapy visits
20+ therapy
visits
Grouping Step
1
2
3
4
5
Equations used to calculate points
(see Table 2)
1
2
3
4
(2&4)
...........................
...........................
...........................
...........................
...........................
0 to 1 ................
2 to 3 ................
4+ .....................
0 to 12 ..............
13 .....................
14+ ...................
0 to 1 ................
2 to 7 ................
8+ .....................
0 to 7 ................
8 to 12 ..............
13+ ...................
0 to 1 ................
2 .......................
3+ .....................
0 to 6 ................
7 to 10 ..............
11+ ...................
0 to 1 ................
2 to 9 ................
10+ ...................
0 to 2 ................
3 to 7 ................
8+ .....................
0 to 3.
4 to 16.
17+.
0 to 2.
3 to 6.
7+.
Dimension
Severity
Level
Clinical .............................................
Functional ........................................
amozie on DSK3GDR082PROD with PROPOSALS2
3rd+ Episodes
C1
C2
C3
F1
F2
F3
............
............
............
............
............
............
Step 3: Once the clinical and
functional thresholds are determined
and each episode is assigned a clinical
and functional level, the payment
regression is estimated with an
episode’s wage-weighted minutes of
care as the dependent variable.
Independent variables in the model are
indicators for the step of the episode as
well as the clinical and functional levels
within each step of the episode. Like the
four-equation model, the payment
regression model is also estimated with
robust standard errors that are clustered
at the beneficiary level. Table 7 shows
the regression coefficients for the
variables in the payment regression
model updated with CY 2017 home
7 For Step 1, 41% of episodes were in the medium
functional level (All with score 13).
For Step 2.1, 86.7% of episodes were in the low
functional level (Most with scores 6 to 7).
For Step 2.2, 81.5% of episodes were in the low
functional level (Most with score 0).
For Step 3, 46.7% of episodes were in the
medium functional level (Most with score 9).
For Step 4, 29.9% of episodes were in the
medium functional level (Most with score 6).
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00018
Fmt 4701
Sfmt 4702
E:\FR\FM\12JYP2.SGM
12JYP2
EP12JY18.016
1st and 2nd Episodes
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
health claims data. The R-squared value
for the payment regression model is
32357
0.5508 (an increase from 0.5095 for the
CY 2018 recalibration).
TABLE 7—PAYMENT REGRESSION MODEL
Payment
regression
from
4-equation
model for
CY 2019
Step 1, Clinical Score Medium ............................................................................................................................................................
Step 1, Clinical Score High .................................................................................................................................................................
Step 1, Functional Score Medium .......................................................................................................................................................
Step 1, Functional Score High ............................................................................................................................................................
Step 2.1, Clinical Score Medium .........................................................................................................................................................
Step 2.1, Clinical Score High ..............................................................................................................................................................
Step 2.1, Functional Score Medium ....................................................................................................................................................
Step 2.1, Functional Score High .........................................................................................................................................................
Step 2.2, Clinical Score Medium .........................................................................................................................................................
Step 2.2, Clinical Score High ..............................................................................................................................................................
Step 2.2, Functional Score Medium ....................................................................................................................................................
Step 2.2, Functional Score High .........................................................................................................................................................
Step 3, Clinical Score Medium ............................................................................................................................................................
Step 3, Clinical Score High .................................................................................................................................................................
Step 3, Functional Score Medium .......................................................................................................................................................
Step 3, Functional Score High ............................................................................................................................................................
Step 4, Clinical Score Medium ............................................................................................................................................................
Step 4, Clinical Score High .................................................................................................................................................................
Step 4, Functional Score Medium .......................................................................................................................................................
Step 4, Functional Score High ............................................................................................................................................................
Step 2.1, 1st and 2nd Episodes, 14 to 19 Therapy Visits ..................................................................................................................
Step 2.2, 3rd+ Episodes, 14 to 19 Therapy Visits ..............................................................................................................................
Step 3, 3rd+ Episodes, 0–13 Therapy Visits ......................................................................................................................................
Step 4, All Episodes, 20+ Therapy Visits ............................................................................................................................................
Intercept ...............................................................................................................................................................................................
$21.81
54.06
70.54
99.78
50.90
118.77
25.36
31.96
48.03
187.73
50.06
0.00
18.05
83.67
56.10
81.90
70.97
245.97
4.60
17.77
515.04
510.26
¥60.34
895.79
375.32
amozie on DSK3GDR082PROD with PROPOSALS2
Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 (as of March 2, 2018) for which we had a linked
OASIS assessment.
Step 4: We use the coefficients from
the payment regression model to predict
each episode’s wage-weighted minutes
of care (resource use). We then divide
these predicted values by the mean of
the dependent variable (that is, the
average wage-weighted minutes of care
across all episodes used in the payment
regression). This division constructs the
weight for each episode, which is
simply the ratio of the episode’s
predicted wage-weighted minutes of
care divided by the average wageweighted minutes of care in the sample.
Each episode is then aggregated into one
of the 153 home health resource groups
(HHRGs) and the ‘‘raw’’ weight for each
HHRG was calculated as the average of
the episode weights within the HHRG.
Step 5: The raw weights associated
with 0 to 5 therapy visits are then
increased by 3.75 percent, the weights
associated with 14–15 therapy visits are
decreased by 2.5 percent, and the
weights associated with 20+ therapy
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
visits are decreased by 5 percent. These
adjustments to the case-mix weights
were finalized in the CY 2012 HH PPS
final rule (76 FR 68557) and were done
to address MedPAC’s concerns that the
HH PPS overvalues therapy episodes
and undervalues non-therapy episodes
and to better align the case-mix weights
with episode costs estimated from cost
report data.8
Step 6: After the adjustments in step
5 are applied to the raw weights, the
weights are further adjusted to create an
increase in the payment weights for the
therapy visit steps between the therapy
thresholds. Weights with the same
clinical severity level, functional
severity level, and early/later episode
status were grouped together. Then
within those groups, the weights for
each therapy step between thresholds
are gradually increased. We do this by
Payment Advisory Commission
(MedPAC), Report to the Congress: Medicare
Payment Policy. March 2011, P. 176.
PO 00000
8 Medicare
Frm 00019
Fmt 4701
Sfmt 4702
interpolating between the main
thresholds on the model (from 0–5 to
14–15 therapy visits, and from 14–15 to
20+ therapy visits). We use a linear
model to implement the interpolation so
the payment weight increase for each
step between the thresholds (such as the
increase between 0–5 therapy visits and
6 therapy visits and the increase
between 6 therapy visits and 7–9
therapy visits) are constant. This
interpolation is identical to the process
finalized in the CY 2012 HH PPS final
rule (76 FR 68555).
Step 7: The interpolated weights are
then adjusted so that the average casemix for the weights is equal to 1.0000.9
This last step creates the proposed CY
2019 case-mix weights shown in Table
8.
9 When computing the average, we compute a
weighted average, assigning a value of one to each
normal episode and a value equal to the episode
length divided by 60 for PEPs.
E:\FR\FM\12JYP2.SGM
12JYP2
32358
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 8—PROPOSED CY 2019 CASE-MIX PAYMENT WEIGHTS
amozie on DSK3GDR082PROD with PROPOSALS2
Pay group
10111
10112
10113
10114
10115
10121
10122
10123
10124
10125
10131
10132
10133
10134
10135
10211
10212
10213
10214
10215
10221
10222
10223
10224
10225
10231
10232
10233
10234
10235
10311
10312
10313
10314
10315
10321
10322
10323
10324
10325
10331
10332
10333
10334
10335
21111
21112
21113
21121
21122
21123
21131
21132
21133
21211
21212
21213
21221
21222
21223
21231
21232
21233
21311
21312
21313
21321
21322
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
VerDate Sep<11>2014
Clinical and
functional
levels
(1 = low;
2 = medium;
3 = high)
Description
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
1st
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
and
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
2nd
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
Episodes,
17:39 Jul 11, 2018
0 to 5 Therapy Visits ...............................................................................
6 Therapy Visits ......................................................................................
7 to 9 Therapy Visits ...............................................................................
10 Therapy Visits ....................................................................................
11 to 13 Therapy Visits ...........................................................................
0 to 5 Therapy Visits ...............................................................................
6 Therapy Visits ......................................................................................
7 to 9 Therapy Visits ...............................................................................
10 Therapy Visits ....................................................................................
11 to 13 Therapy Visits ...........................................................................
0 to 5 Therapy Visits ...............................................................................
6 Therapy Visits ......................................................................................
7 to 9 Therapy Visits ...............................................................................
10 Therapy Visits ....................................................................................
11 to 13 Therapy Visits ...........................................................................
0 to 5 Therapy Visits ...............................................................................
6 Therapy Visits ......................................................................................
7 to 9 Therapy Visits ...............................................................................
10 Therapy Visits ....................................................................................
11 to 13 Therapy Visits ...........................................................................
0 to 5 Therapy Visits ...............................................................................
6 Therapy Visits ......................................................................................
7 to 9 Therapy Visits ...............................................................................
10 Therapy Visits ....................................................................................
11 to 13 Therapy Visits ...........................................................................
0 to 5 Therapy Visits ...............................................................................
6 Therapy Visits ......................................................................................
7 to 9 Therapy Visits ...............................................................................
10 Therapy Visits ....................................................................................
11 to 13 Therapy Visits ...........................................................................
0 to 5 Therapy Visits ...............................................................................
6 Therapy Visits ......................................................................................
7 to 9 Therapy Visits ...............................................................................
10 Therapy Visits ....................................................................................
11 to 13 Therapy Visits ...........................................................................
0 to 5 Therapy Visits ...............................................................................
6 Therapy Visits ......................................................................................
7 to 9 Therapy Visits ...............................................................................
10 Therapy Visits ....................................................................................
11 to 13 Therapy Visits ...........................................................................
0 to 5 Therapy Visits ...............................................................................
6 Therapy Visits ......................................................................................
7 to 9 Therapy Visits ...............................................................................
10 Therapy Visits ....................................................................................
11 to 13 Therapy Visits ...........................................................................
14 to 15 Therapy Visits ...........................................................................
16 to 17 Therapy Visits ...........................................................................
18 to 19 Therapy Visits ...........................................................................
14 to 15 Therapy Visits ...........................................................................
16 to 17 Therapy Visits ...........................................................................
18 to 19 Therapy Visits ...........................................................................
14 to 15 Therapy Visits ...........................................................................
16 to 17 Therapy Visits ...........................................................................
18 to 19 Therapy Visits ...........................................................................
14 to 15 Therapy Visits ...........................................................................
16 to 17 Therapy Visits ...........................................................................
18 to 19 Therapy Visits ...........................................................................
14 to 15 Therapy Visits ...........................................................................
16 to 17 Therapy Visits ...........................................................................
18 to 19 Therapy Visits ...........................................................................
14 to 15 Therapy Visits ...........................................................................
16 to 17 Therapy Visits ...........................................................................
18 to 19 Therapy Visits ...........................................................................
14 to 15 Therapy Visits ...........................................................................
16 to 17 Therapy Visits ...........................................................................
18 to 19 Therapy Visits ...........................................................................
14 to 15 Therapy Visits ...........................................................................
16 to 17 Therapy Visits ...........................................................................
Jkt 244001
PO 00000
Frm 00020
Fmt 4701
Sfmt 4702
E:\FR\FM\12JYP2.SGM
12JYP2
C1F1S1
C1F1S2
C1F1S3
C1F1S4
C1F1S5
C1F2S1
C1F2S2
C1F2S3
C1F2S4
C1F2S5
C1F3S1
C1F3S2
C1F3S3
C1F3S4
C1F3S5
C2F1S1
C2F1S2
C2F1S3
C2F1S4
C2F1S5
C2F2S1
C2F2S2
C2F2S3
C2F2S4
C2F2S5
C2F3S1
C2F3S2
C2F3S3
C2F3S4
C2F3S5
C3F1S1
C3F1S2
C3F1S3
C3F1S4
C3F1S5
C3F2S1
C3F2S2
C3F2S3
C3F2S4
C3F2S5
C3F3S1
C3F3S2
C3F3S3
C3F3S4
C3F3S5
C1F1S1
C1F1S2
C1F1S3
C1F2S1
C1F2S2
C1F2S3
C1F3S1
C1F3S2
C1F3S3
C2F1S1
C2F1S2
C2F1S3
C2F2S1
C2F2S2
C2F2S3
C2F3S1
C2F3S2
C2F3S3
C3F1S1
C3F1S2
C3F1S3
C3F2S1
C3F2S2
Proposed
weights for
CY 2019
0.5459
0.6801
0.8143
0.9485
1.0828
0.6485
0.7691
0.8897
1.0104
1.1310
0.6910
0.8049
0.9189
1.0328
1.1467
0.5776
0.7194
0.8612
1.0030
1.1448
0.6802
0.8084
0.9366
1.0648
1.1930
0.7227
0.8442
0.9657
1.0872
1.2087
0.6245
0.7755
0.9264
1.0774
1.2284
0.7271
0.8645
1.0019
1.1392
1.2766
0.7696
0.9003
1.0310
1.1617
1.2923
1.2170
1.3756
1.5342
1.2516
1.4008
1.5499
1.2607
1.4126
1.5646
1.2866
1.4535
1.6204
1.3212
1.4786
1.6361
1.3302
1.4905
1.6508
1.3793
1.5930
1.8067
1.4140
1.6182
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
32359
TABLE 8—PROPOSED CY 2019 CASE-MIX PAYMENT WEIGHTS—Continued
amozie on DSK3GDR082PROD with PROPOSALS2
Pay group
21323
21331
21332
21333
22111
22112
22113
22121
22122
22123
22131
22132
22133
22211
22212
22213
22221
22222
22223
22231
22232
22233
22311
22312
22313
22321
22322
22323
22331
22332
22333
30111
30112
30113
30114
30115
30121
30122
30123
30124
30125
30131
30132
30133
30134
30135
30211
30212
30213
30214
30215
30221
30222
30223
30224
30225
30231
30232
30233
30234
30235
30311
30312
30313
30314
30315
30321
30322
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
VerDate Sep<11>2014
Clinical and
functional
levels
(1 = low;
2 = medium;
3 = high)
Description
1st and 2nd Episodes, 18 to 19 Therapy Visits ...........................................................................
1st and 2nd Episodes, 14 to 15 Therapy Visits ...........................................................................
1st and 2nd Episodes, 16 to 17 Therapy Visits ...........................................................................
1st and 2nd Episodes, 18 to 19 Therapy Visits ...........................................................................
3rd+ Episodes, 14 to 15 Therapy Visits .......................................................................................
3rd+ Episodes, 16 to 17 Therapy Visits .......................................................................................
3rd+ Episodes, 18 to 19 Therapy Visits .......................................................................................
3rd+ Episodes, 14 to 15 Therapy Visits .......................................................................................
3rd+ Episodes, 16 to 17 Therapy Visits .......................................................................................
3rd+ Episodes, 18 to 19 Therapy Visits .......................................................................................
3rd+ Episodes, 14 to 15 Therapy Visits .......................................................................................
3rd+ Episodes, 16 to 17 Therapy Visits .......................................................................................
3rd+ Episodes, 18 to 19 Therapy Visits .......................................................................................
3rd+ Episodes, 14 to 15 Therapy Visits .......................................................................................
3rd+ Episodes, 16 to 17 Therapy Visits .......................................................................................
3rd+ Episodes, 18 to 19 Therapy Visits .......................................................................................
3rd+ Episodes, 14 to 15 Therapy Visits .......................................................................................
3rd+ Episodes, 16 to 17 Therapy Visits .......................................................................................
3rd+ Episodes, 18 to 19 Therapy Visits .......................................................................................
3rd+ Episodes, 14 to 15 Therapy Visits .......................................................................................
3rd+ Episodes, 16 to 17 Therapy Visits .......................................................................................
3rd+ Episodes, 18 to 19 Therapy Visits .......................................................................................
3rd+ Episodes, 14 to 15 Therapy Visits .......................................................................................
3rd+ Episodes, 16 to 17 Therapy Visits .......................................................................................
3rd+ Episodes, 18 to 19 Therapy Visits .......................................................................................
3rd+ Episodes, 14 to 15 Therapy Visits .......................................................................................
3rd+ Episodes, 16 to 17 Therapy Visits .......................................................................................
3rd+ Episodes, 18 to 19 Therapy Visits .......................................................................................
3rd+ Episodes, 14 to 15 Therapy Visits .......................................................................................
3rd+ Episodes, 16 to 17 Therapy Visits .......................................................................................
3rd+ Episodes, 18 to 19 Therapy Visits .......................................................................................
3rd+ Episodes, 0 to 5 Therapy Visits ...........................................................................................
3rd+ Episodes, 6 Therapy Visits ..................................................................................................
3rd+ Episodes, 7 to 9 Therapy Visits ...........................................................................................
3rd+ Episodes, 10 Therapy Visits ................................................................................................
3rd+ Episodes, 11 to 13 Therapy Visits .......................................................................................
3rd+ Episodes, 0 to 5 Therapy Visits ...........................................................................................
3rd+ Episodes, 6 Therapy Visits ..................................................................................................
3rd+ Episodes, 7 to 9 Therapy Visits ...........................................................................................
3rd+ Episodes, 10 Therapy Visits ................................................................................................
3rd+ Episodes, 11 to 13 Therapy Visits .......................................................................................
3rd+ Episodes, 0 to 5 Therapy Visits ...........................................................................................
3rd+ Episodes, 6 Therapy Visits ..................................................................................................
3rd+ Episodes, 7 to 9 Therapy Visits ...........................................................................................
3rd+ Episodes, 10 Therapy Visits ................................................................................................
3rd+ Episodes, 11 to 13 Therapy Visits .......................................................................................
3rd+ Episodes, 0 to 5 Therapy Visits ...........................................................................................
3rd+ Episodes, 6 Therapy Visits ..................................................................................................
3rd+ Episodes, 7 to 9 Therapy Visits ...........................................................................................
3rd+ Episodes, 10 Therapy Visits ................................................................................................
3rd+ Episodes, 11 to 13 Therapy Visits .......................................................................................
3rd+ Episodes, 0 to 5 Therapy Visits ...........................................................................................
3rd+ Episodes, 6 Therapy Visits ..................................................................................................
3rd+ Episodes, 7 to 9 Therapy Visits ...........................................................................................
3rd+ Episodes, 10 Therapy Visits ................................................................................................
3rd+ Episodes, 11 to 13 Therapy Visits .......................................................................................
3rd+ Episodes, 0 to 5 Therapy Visits ...........................................................................................
3rd+ Episodes, 6 Therapy Visits ..................................................................................................
3rd+ Episodes, 7 to 9 Therapy Visits ...........................................................................................
3rd+ Episodes, 10 Therapy Visits ................................................................................................
3rd+ Episodes, 11 to 13 Therapy Visits .......................................................................................
3rd+ Episodes, 0 to 5 Therapy Visits ...........................................................................................
3rd+ Episodes, 6 Therapy Visits ..................................................................................................
3rd+ Episodes, 7 to 9 Therapy Visits ...........................................................................................
3rd+ Episodes, 10 Therapy Visits ................................................................................................
3rd+ Episodes, 11 to 13 Therapy Visits .......................................................................................
3rd+ Episodes, 0 to 5 Therapy Visits ...........................................................................................
3rd+ Episodes, 6 Therapy Visits ..................................................................................................
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00021
Fmt 4701
Sfmt 4702
E:\FR\FM\12JYP2.SGM
12JYP2
C3F2S3
C3F3S1
C3F3S2
C3F3S3
C1F1S1
C1F1S2
C1F1S3
C1F2S1
C1F2S2
C1F2S3
C1F3S1
C1F3S2
C1F3S3
C2F1S1
C2F1S2
C2F1S3
C2F2S1
C2F2S2
C2F2S3
C2F3S1
C2F3S2
C2F3S3
C3F1S1
C3F1S2
C3F1S3
C3F2S1
C3F2S2
C3F2S3
C3F3S1
C3F3S2
C3F3S3
C1F1S1
C1F1S2
C1F1S3
C1F1S4
C1F1S5
C1F2S1
C1F2S2
C1F2S3
C1F2S4
C1F2S5
C1F3S1
C1F3S2
C1F3S3
C1F3S4
C1F3S5
C2F1S1
C2F1S2
C2F1S3
C2F1S4
C2F1S5
C2F2S1
C2F2S2
C2F2S3
C2F2S4
C2F2S5
C2F3S1
C2F3S2
C2F3S3
C2F3S4
C2F3S5
C3F1S1
C3F1S2
C3F1S3
C3F1S4
C3F1S5
C3F2S1
C3F2S2
Proposed
weights for
CY 2019
1.8224
1.4230
1.6300
1.8371
1.2104
1.3713
1.5321
1.2789
1.4189
1.5589
1.2789
1.4248
1.5706
1.2761
1.4465
1.6169
1.3445
1.4942
1.6438
1.3445
1.5000
1.6555
1.4670
1.6515
1.8360
1.5355
1.6992
1.8629
1.5355
1.7050
1.8746
0.4581
0.6086
0.7591
0.9095
1.0600
0.5397
0.6876
0.8354
0.9832
1.1310
0.5772
0.7176
0.8579
0.9982
1.1385
0.4844
0.6427
0.8011
0.9594
1.1178
0.5660
0.7217
0.8774
1.0331
1.1888
0.6035
0.7517
0.8999
1.0481
1.1963
0.5798
0.7573
0.9347
1.1122
1.2896
0.6614
0.8362
32360
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 8—PROPOSED CY 2019 CASE-MIX PAYMENT WEIGHTS—Continued
Pay group
30323
30324
30325
30331
30332
30333
30334
30335
40111
40121
40131
40211
40221
40231
40311
40321
40331
Description
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
............
3rd+ Episodes, 7 to 9 Therapy Visits ...........................................................................................
3rd+ Episodes, 10 Therapy Visits ................................................................................................
3rd+ Episodes, 11 to 13 Therapy Visits .......................................................................................
3rd+ Episodes, 0 to 5 Therapy Visits ...........................................................................................
3rd+ Episodes, 6 Therapy Visits ..................................................................................................
3rd+ Episodes, 7 to 9 Therapy Visits ...........................................................................................
3rd+ Episodes, 10 Therapy Visits ................................................................................................
3rd+ Episodes, 11 to 13 Therapy Visits .......................................................................................
All Episodes, 20+ Therapy Visits .................................................................................................
All Episodes, 20+ Therapy Visits .................................................................................................
All Episodes, 20+ Therapy Visits .................................................................................................
All Episodes, 20+ Therapy Visits .................................................................................................
All Episodes, 20+ Therapy Visits .................................................................................................
All Episodes, 20+ Therapy Visits .................................................................................................
All Episodes, 20+ Therapy Visits .................................................................................................
All Episodes, 20+ Therapy Visits .................................................................................................
All Episodes, 20+ Therapy Visits .................................................................................................
To ensure the changes to the HH PPS
case-mix weights are implemented in a
budget neutral manner, we then apply a
case-mix budget neutrality factor to the
proposed CY 2019 national,
standardized 60-day episode payment
rate (see section III.C.3. of this proposed
rule). The case-mix budget neutrality
factor is calculated as the ratio of total
payments when the CY 2019 HH PPS
case-mix weights (developed using CY
2017 home health claims data) are
applied to CY 2017 utilization (claims)
data to total payments when CY 2018
HH PPS case-mix weights (developed
using CY 2016 home health claims data)
are applied to CY 2017 utilization data.
This produces a case-mix budget
neutrality factor for CY 2019 of 1.0163.
C. CY 2019 Home Health Payment Rate
Update
1. Rebasing and Revising of the Home
Health Market Basket
amozie on DSK3GDR082PROD with PROPOSALS2
a. Background
Section 1895(b)(3)(B) of the Act
requires that the standard prospective
payment amounts for CY 2019 be
increased by a factor equal to the
applicable home health market basket
update for those HHAs that submit
quality data as required by the
Secretary. Effective for cost reporting
periods beginning on or after July 1,
1980, we developed and adopted an
HHA input price index (that is, the
home health ‘‘market basket’’). Although
‘‘market basket’’ technically describes
the mix of goods and services used to
produce home health care, this term is
also commonly used to denote the input
price index derived from that market
VerDate Sep<11>2014
Clinical and
functional
levels
(1 = low;
2 = medium;
3 = high)
17:39 Jul 11, 2018
Jkt 244001
basket. Accordingly, the term ‘‘home
health market basket’’ used in this
document refers to the HHA input price
index.
The percentage change in the home
health market basket reflects the average
change in the price of goods and
services purchased by HHAs in
providing an efficient level of home
health care services. We first used the
home health market basket to adjust
HHA cost limits by an amount that
reflected the average increase in the
prices of the goods and services used to
furnish reasonable cost home health
care. This approach linked the increase
in the cost limits to the efficient
utilization of resources. For a greater
discussion on the home health market
basket, see the notice with comment
period published in the February 15,
1980 Federal Register (45 FR 10450,
10451), the notice with comment period
published in the February 14, 1995
Federal Register (60 FR 8389, 8392),
and the notice with comment period
published in the July 1, 1996 Federal
Register (61 FR 34344, 34347).
Beginning with the FY 2002 HHA PPS
payments, we used the home health
market basket to update payments under
the HHA PPS. We last rebased the home
health market basket effective with the
CY 2013 update (77 FR 67081).
The home health market basket is a
fixed-weight, Laspeyres-type price
index. A Laspeyres-type price index
measures the change in price, over time,
of the same mix of goods and services
purchased in the base period. Any
changes in the quantity or mix of goods
and services (that is, intensity)
purchased over time are not measured.
PO 00000
Frm 00022
Fmt 4701
Sfmt 4702
C3F2S3
C3F2S4
C3F2S5
C3F3S1
C3F3S2
C3F3S3
C3F3S4
C3F3S5
C1F1S1
C1F2S1
C1F3S1
C2F1S1
C2F2S1
C2F3S1
C3F1S1
C3F2S1
C3F3S1
Proposed
weights for
CY 2019
1.0110
1.1858
1.3607
0.6989
0.8662
1.0336
1.2009
1.3682
1.6929
1.6990
1.7165
1.7874
1.7935
1.8110
2.0204
2.0266
2.0441
The index itself is constructed in
three steps. First, a base period is
selected (in this proposed rule, we are
proposing to use 2016 as the base
period) and total base period
expenditures are estimated for a set of
mutually exclusive and exhaustive
spending categories, with the proportion
of total costs that each category
represents being calculated. These
proportions are called ‘‘cost weights’’ or
‘‘expenditure weights.’’ Second, each
expenditure category is matched to an
appropriate price or wage variable,
referred to as a ‘‘price proxy.’’ In almost
every instance, these price proxies are
derived from publicly available
statistical series that are published on a
consistent schedule (preferably at least
on a quarterly basis). Finally, the
expenditure weight for each cost
category is multiplied by the level of its
respective price proxy. The sum of these
products (that is, the expenditure
weights multiplied by their price index
levels) for all cost categories yields the
composite index level of the market
basket in a given period. Repeating this
step for other periods produces a series
of market basket levels over time.
Dividing an index level for a given
period by an index level for an earlier
period produces a rate of growth in the
input price index over that timeframe.
As noted previously, the market
basket is described as a fixed-weight
index because it represents the change
in price over time of a constant mix
(quantity and intensity) of goods and
services needed to provide HHA
services. The effects on total
expenditures resulting from changes in
the mix of goods and services purchased
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
subsequent to the base period are not
measured. For example, a HHA hiring
more nurses to accommodate the needs
of patients would increase the volume
of goods and services purchased by the
HHA, but would not be factored into the
price change measured by a fixedweight home health market basket. Only
when the index is rebased would
changes in the quantity and intensity be
captured, with those changes being
reflected in the cost weights. Therefore,
we rebase the market basket periodically
so that the cost weights reflect recent
changes in the mix of goods and
services that HHAs purchase (HHA
inputs) to furnish inpatient care
between base periods.
b. Rebasing and Revising the Home
Health Market Basket
We believe that it is desirable to
rebase the home health market basket
periodically so that the cost category
weights reflect changes in the mix of
goods and services that HHAs purchase
in furnishing home health care. We
based the cost category weights in the
current home health market basket on
CY 2010 data. We are proposing to
rebase and revise the home health
market basket to reflect 2016 Medicare
cost report (MCR) data, the latest
available and most complete data on the
actual structure of HHA costs.
The terms ‘‘rebasing’’ and ‘‘revising,’’
while often used interchangeably,
denote different activities. The term
‘‘rebasing’’ means moving the base year
for the structure of costs of an input
price index (that is, in this exercise, we
are proposing to move the base year cost
structure from CY 2010 to CY 2016)
without making any other major
changes to the methodology. The term
‘‘revising’’ means changing data sources,
cost categories, and/or price proxies
used in the input price index.
For this proposed rebasing and
revising, we are rebasing the detailed
wages and salaries and benefits cost
weights to reflect 2016 BLS
Occupational Employment Statistics
(OES) data on HHAs. The 2010-based
home health market basket used 2010
BLS OES data on HHAs. We are also
proposing to break out the All Other
(residual) cost category weight into
more detailed cost categories, based on
the 2007 Benchmark U.S. Department of
Commerce, Bureau of Economic
Analysis (BEA) Input-Output (I–O)
Table for HHAs. The 2010-based home
health market basket used the 2002 I–O
data. Finally, due to its small weight, we
are proposing to eliminate the cost
category ‘Postage’ and include these
expenses in the ‘All Other Services’ cost
weight.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
c. Derivation of the Proposed 2016Based Home Health Market Basket Cost
Weights
The major cost weights for this
proposed revised and rebased home
health market basket are derived from
the Medicare Cost Reports (MCR; CMS
Form 1728–94) data for freestanding
HHAs whose cost reporting period
began on or after October 1, 2015 and
before October 1, 2016. Of the 2016
Medicare cost reports for freestanding
HHAs, approximately 84 percent of the
reports had a begin date on January 1,
2016, approximately 6 percent had a
begin date on July 1, 2016, and
approximately 4 percent had a begin
date on October 1, 2015. Using this
methodology allowed our sample to
include HHAs with varying cost report
years including, but not limited to, the
Federal fiscal or calendar year. We refer
to the market basket as a calendar year
market basket because the base period
for all price proxies and weights are set
to CY 2016.
We propose to maintain our policy of
using data from freestanding HHAs,
which account for over 90 percent of
HHAs (82 FR 35383), because we have
determined that they better reflect
HHAs’ actual cost structure. Expense
data for hospital-based HHAs can be
affected by the allocation of overhead
costs over the entire institution.
We are proposing to derive eight
major expense categories (Wages and
Salaries, Benefits, Contract Labor,
Transportation, Professional Liability
Insurance (PLI), Fixed Capital, Movable
Capital, and a residual ‘‘All Other’’)
from the 2016 Medicare HHA cost
reports. Due to its small weight, we are
proposing to eliminate the cost category
‘Postage’ and include these expenses in
the ‘‘All Other (residual)’’ cost weight.
These major expense categories are
based on those cost centers that are
reimbursable under the HHA PPS,
specifically Skilled Nursing Care,
Physical Therapy, Occupational
Therapy, Speech Pathology, Medical
Social Services, Home Health Aide, and
Supplies. These are the same cost
centers that were used in the 2014 base
payment rebasing (78 FR 72276), which
are described in the Abt Associates Inc.
June 2013, Technical Paper, ‘‘Analyses
In Support of Rebasing and Updating
Medicare Home Health Payment Rates’’
(https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
HomeHealthPPS/Downloads/Analysesin-Support-of-Rebasing-and-Updatingthe-Medicare-Home-Health-PaymentRates-Technical-Report.pdf). Total costs
for the HHA PPS reimbursable services
reflect overhead allocation. We provide
PO 00000
Frm 00023
Fmt 4701
Sfmt 4702
32361
detail on the calculations for each major
expense category.
(1) Wages and Salaries: Wages and
Salaries costs reflect direct patient care
wages and salaries costs as well as
wages and salaries costs associated with
Plant Operations and Maintenance,
Transportation, and Administrative and
General. Specifically, we are proposing
to calculate Wages and Salaries by
summing costs from Worksheet A,
column 1, lines 3 through 12 and
subtracting line 5.03 (A&G
Nonreimbursable costs).
(2) Benefits: Benefits costs reflect
direct patient care benefit costs as well
as benefit costs associated with Plant
Operations and Maintenance,
Transportation, and Administrative and
General. Specifically, we are proposing
to calculate Benefits by summing costs
from Worksheet A, column 2, lines 3
through 12 and subtracting line 5.03
(A&G Nonreimbursable costs).
(3) Direct Patient Care Contract Labor:
Contract Labor costs reflect direct
patient care contract labor. Specifically,
we are proposing to calculate Contract
Labor by summing costs from
Worksheet A, column 4, lines 6 through
11.
(4) Transportation: Transportation
costs reflect direct patient care costs as
well as transportation costs associated
with Capital Expenses, Plant Operations
and Maintenance, and Administrative
and General. Specifically, we are
proposing to calculate Transportation by
summing costs from Worksheet A,
column 3, lines 1 through 12 and
subtracting line 5.03 (A&G
Nonreimbursable costs).
(5) Professional Liability Insurance:
Professional Liability Insurance reflects
premiums, paid losses, and selfinsurance costs. Specifically we are
proposing to calculate Professional
Liability Insurance by summing costs
from Worksheet S2, lines 27.01, 27.02
and 27.03.
(6) Fixed Capital: Fixed Capitalrelated costs reflect the portion of
Medicare-allowable costs reported in
‘‘Capital Related Buildings and
Fixtures’’ (Worksheet A, column 5, line
1). We calculate this Medicare allowable
portion by first calculating a ratio for
each provider that reflects fixed capital
costs as a percentage of HHA
reimbursable services. Specifically this
ratio is calculated as the sum of costs
from Worksheet B, column 1, lines 6
through 12 divided by the sum of costs
from Worksheet B, column 1, line 1
minus lines 3 through 5. This
percentage is then applied to the sum of
the costs from Worksheet A, column 5,
line 1.
E:\FR\FM\12JYP2.SGM
12JYP2
32362
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
(7) Movable Capital: Movable Capitalrelated costs reflect the portion of
Medicare-allowable costs reported in
‘‘Capital Related Moveable Equipment’’
(Worksheet A, column 5, line 2). We
calculate this Medicare allowable
portion by first calculating a ratio for
each provider that reflects movable
capital costs as a percentage of HHA
reimbursable services. Specifically this
ratio is calculated as the sum of costs
from Worksheet B, column 2, lines 6
through 12 divided by the sum of costs
from Worksheet B, column 2, line 2
minus lines 3 through 5. This
percentage is then applied to the sum of
the costs from Worksheet A, column 5,
line 2.
(8) All Other (residual): The ‘‘All
Other’’ cost weight is a residual,
calculated by subtracting the major cost
weight percentages (Wages and Salaries,
Benefits, Direct Patient Care Contract
Labor, Transportation, Professional
Liability Insurance, Fixed Capital, and
Movable Capital) from 1.
As prescription drugs and DME are
not payable under the HH PPS, we
continue to exclude those items from
the home health market basket. Totals
within each of the major cost categories
were edited to remove reports where the
data were deemed unreasonable (for
example, when total costs were not
greater than zero). We then determined
the proportion of total Medicare
allowable costs that each category
represents. For all of the major cost
categories except the ‘‘residual’’ All
Other cost weight, we then removed
those providers whose derived cost
weights fall in the top and bottom five
percent of provider-specific cost weights
to ensure the removal of outliers. After
the outliers were removed, we summed
the costs for each category across all
remaining providers. We then divided
this by the sum of total Medicare
allowable costs across all remaining
providers to obtain a cost weight for the
proposed 2016-based home health
market basket for the given category.
Table 9 shows the major cost
categories and their respective cost
weights as derived from the Medicare
cost reports for this proposed rule.
TABLE 9—MAJOR COST CATEGORIES AS DERIVED FROM THE MEDICARE COST REPORTS
Major cost categories
2010 based
Wages and Salaries (including allocated direct patient care contract labor) ..........................................................
Benefits (including allocated direct patient care contract labor) .............................................................................
Transportation ..........................................................................................................................................................
Professional Liability Insurance (Malpractice) .........................................................................................................
Fixed Capital ............................................................................................................................................................
Moveable Capital .....................................................................................................................................................
‘‘All Other’’ residual ..................................................................................................................................................
66.3
12.2
2.5
0.4
1.5
0.6
16.5
Proposed
2016 based
65.1
10.9
2.6
0.3
1.4
0.6
19.0
amozie on DSK3GDR082PROD with PROPOSALS2
* Figures may not sum to 100.0 due to rounding.
The decrease in the wages and
salaries cost weight of 1.2 percentage
points and the decrease in the benefits
cost weight of 1.3 percentage points is
attributable to both employed
compensation and direct patient care
contract labor costs as reported on the
MCR data. Our analysis of the MCR data
shows that the decrease in the
compensation cost weight of 2.4
percentage points (calculated by
combining wages and salaries and
benefits) from 2010 to 2016 occurred
among for-profit, nonprofit, and
government providers and among
providers serving only rural
beneficiaries, only urban beneficiaries,
or both rural and urban beneficiaries.
Over the 2010 to 2016 time period,
the average number of FTEs per
provider decreased considerably. This
corresponds with the HHA claims
analysis published on page 35279 of the
CY 2018 proposed rule (https://
www.gpo.gov/fdsys/pkg/FR-2017-07-28/
pdf/2017-15825.pdf), which shows that
the number of visits per 60-day episode
has decreased from 19.8 visits in 2010
to 17.9 visits in 2016 for Medicare PPS.
Medicare visits account for
approximately 60 percent of total visits.
The direct patient care contract labor
costs are contract labor costs for skilled
nursing, physical therapy, occupational
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
therapy, speech therapy, and home
health aide cost centers. We allocated
these direct patient care contract labor
costs to the Wages and Salaries and
Benefits cost categories based on each
provider’s relative proportions of both
employee wages and salaries and
employee benefits costs. For example,
the direct patient care contract labor
costs that are allocated to wages and
salaries is equal to: (A) The employee
wages and salaries costs as a percent of
the sum of employee wages and salaries
costs and employee benefits costs times;
and (B) direct patient care contract labor
costs. Nondirect patient care contract
labor costs (such as contract labor costs
reported in the Administrative and
General cost center of the MCR) are
captured in the ‘‘All Other’’ residual
cost weight and later disaggregated into
more detail as described below. This is
a similar methodology that was
implemented for the 2010-based home
health market basket.
We further divide the ‘‘All Other’’
residual cost weight estimated from the
2016 Medicare cost report data into
more detailed cost categories. To divide
this cost weight we are proposing to use
the 2007 Benchmark I–O ‘‘Use Tables/
Before Redefinitions/Purchaser Value’’
for NAICS 621600, Home Health
Agencies, published by the BEA. These
PO 00000
Frm 00024
Fmt 4701
Sfmt 4702
data are publicly available at http://
www.bea.gov/industry/io_annual.htm.
The BEA Benchmark I–O data are
generally scheduled for publication
every five years. The most recent data
available at the time of rebasing was for
2007. The 2007 Benchmark I–O data are
derived from the 2007 Economic Census
and are the building blocks for BEA’s
economic accounts. Therefore, they
represent the most comprehensive and
complete set of data on the economic
processes or mechanisms by which
output is produced and distributed.10
Besides Benchmark I–O estimates, BEA
also produces Annual I–O estimates.
While based on a similar methodology,
the Annual I–O estimates reflect less
comprehensive and less detailed data
sources and are subject to revision when
benchmark data become available.
Instead of using the less detailed
Annual I–O data, we are proposing to
inflate the detailed 2007 Benchmark I–
O data forward to 2016 by applying the
annual price changes from the
respective price proxies to the
appropriate market basket cost
categories that are obtained from the
2007 Benchmark I–O data. We repeated
this practice for each year. We then
calculated the cost shares that each cost
10 http://www.bea.gov/papers/pdf/IOmanual_
092906.pdf.
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
category represents of the 2007 data
inflated to 2016. These resulting 2016
cost shares were applied to the ‘‘All
Other’’ residual cost weight to obtain
the detailed cost weights for the
proposed 2016-based home health
market basket. For example, the cost for
Operations and Maintenance represents
8.0 percent of the sum of the ‘‘All
Other’’ 2007 Benchmark I–O HHA
Expenditures inflated to 2016.
Therefore, the Operations and
Maintenance cost weight represents 8.0
percent of the proposed 2016-based
home health market basket’s ‘‘All
Other’’ cost category (19.0 percent),
yielding an Operations and
Maintenance proposed cost weight of
1.5 percent in the proposed 2016-based
home health market basket (0.080 × 19.0
percent = 1.5 percent). For the 2010based home health market basket, we
used the same methodology utilizing the
2002 Benchmark I–O data (aged to
2010).
Using this methodology, we are
proposing to derive nine detailed cost
categories from the proposed 2016based home health market basket ‘‘All
Other’’ residual cost weight (19.0
percent). These categories are: (1)
Operations and Maintenance; (2)
Administrative Support; (3) Financial
32363
Services; (4) Medical Supplies; (5)
Rubber and Plastics; (6) Telephone; (7)
Professional Fees; (8) Other Products;
and (9) Other Services. The 2010-based
home health market basket included a
separate cost category for Postage;
however, due to its small weight for the
2016-based home health market basket,
we propose to eliminate the stand-alone
cost category for Postage and include
these expenses in the Other Services
cost category.
Table 10 lists the proposed 2016based home health market basket cost
categories, cost weights, and price
proxies.
TABLE 10—COST CATEGORIES, WEIGHTS, AND PRICE PROXIES
IN PROPOSED 2016-BASED HOME HEALTH MARKET BASKET
Cost categories
Weight
Price proxy
Compensation, including allocated contract services’
labor.
Wages and Salaries, including allocated contract
services’ labor.
Benefits, including allocated contract services’
labor.
Operations & Maintenance ..............................................
Professional Liability Insurance .......................................
Administrative & General & Other Expenses including
allocated contract services’ labor.
Administrative Support .............................................
76.1
Financial Services ....................................................
1.9
Medical Supplies ......................................................
Rubber & Plastics ....................................................
Telephone ................................................................
Professional Fees ....................................................
0.9
1.6
0.7
5.3
Other Products .........................................................
Other Services .........................................................
2.8
3.2
Transportation .................................................................
Capital-Related ................................................................
Fixed Capital ............................................................
Movable Capital .......................................................
2.6
2.1
1.4
0.6
Total .........................................................................
* 100.0
65.1
Proposed Home Health Blended Wages and Salaries Index (2016).
10.9
Proposed Home Health Blended Benefits Index (2016).
1.5
0.3
17.4
CPI–U for Fuel and utilities.
CMS Physician Professional Liability Insurance Index.
1.0
ECI for Total compensation for Private industry workers in Office and
administrative support.
ECI for Total compensation for Private industry workers in Financial
activities.
PPI Commodity data for Medical, surgical & personal aid devices.
PPI Commodity data for Rubber and plastic products.
CPI–U for Telephone services.
ECI for Total compensation for Private industry workers in Professional and related.
PPI Commodity data for Finished goods less foods and energy.
ECI for Total compensation for Private industry workers in Service
occupations.
CPI–U for Transportation.
CPI–U for Owners’ equivalent rent of residences.
PPI Commodity data for Machinery and equipment.
* Figures may not sum due to rounding.
amozie on DSK3GDR082PROD with PROPOSALS2
d. Proposed 2016-Based Home Health
Market Basket Price Proxies
After we computed the CY 2016 cost
category weights for the proposed
rebased home health market basket, we
selected the most appropriate wage and
price indexes to proxy the rate of change
for each expenditure category. With the
exception of the price index for
Professional Liability Insurance costs,
the proposed price proxies are based on
Bureau of Labor Statistics (BLS) data
and are grouped into one of the
following BLS categories:
• Employment Cost Indexes—
Employment Cost Indexes (ECIs)
measure the rate of change in employee
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
wage rates and employer costs for
employee benefits per hour worked.
These indexes are fixed-weight indexes
and strictly measure the change in wage
rates and employee benefits per hour.
They are not affected by shifts in skill
mix. ECIs are superior to average hourly
earnings as price proxies for input price
indexes for two reasons: (a) They
measure pure price change; and (b) they
are available by occupational groups,
not just by industry.
• Consumer Price Indexes—
Consumer Price Indexes (CPIs) measure
change in the prices of final goods and
services bought by the typical
consumer. Consumer price indexes are
PO 00000
Frm 00025
Fmt 4701
Sfmt 4702
used when the expenditure is more
similar to that of a purchase at the retail
level rather than at the wholesale level,
or if no appropriate Producer Price
Indexes (PPIs) were available.
• Producer Price Indexes—PPIs
measures average changes in prices
received by domestic producers for their
goods and services. PPIs are used to
measure price changes for goods sold in
other than retail markets. For example,
a PPI for movable equipment is used
rather than a CPI for equipment. PPIs in
some cases are preferable price proxies
for goods that HHAs purchase at
wholesale levels. These fixed-weight
indexes are a measure of price change
E:\FR\FM\12JYP2.SGM
12JYP2
32364
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
at the producer or at the intermediate
stage of production.
We evaluated the price proxies using
the criteria of reliability, timeliness,
availability, and relevance. Reliability
indicates that the index is based on
valid statistical methods and has low
sampling variability. Widely accepted
statistical methods ensure that the data
were collected and aggregated in way
that can be replicated. Low sampling
variability is desirable because it
indicates that sample reflects the typical
members of the population. (Sampling
variability is variation that occurs by
chance because a sample was surveyed
rather than the entire population.)
Timeliness implies that the proxy is
published regularly, preferably at least
once a quarter. The market baskets are
updated quarterly and therefore it is
important the underlying price proxies
be up-to-date, reflecting the most recent
data available. We believe that using
proxies that are published regularly
helps ensure that we are using the most
recent data available to update the
market basket. We strive to use
publications that are disseminated
frequently because we believe that this
is an optimal way to stay abreast of the
most current data available. Availability
means that the proxy is publicly
available. We prefer that our proxies are
publicly available because this will help
ensure that our market basket updates
are as transparent to the public as
possible. In addition, this enables the
public to be able to obtain the price
proxy data on a regular basis. Finally,
relevance means that the proxy is
applicable and representative of the cost
category weight to which it is applied.
The CPIs, PPIs, and ECIs selected by us
to be proposed in this regulation meet
these criteria. Therefore, we believe that
they continue to be the best measure of
price changes for the cost categories to
which they would be applied.
As part of the revising and rebasing of
the home health market basket, we are
proposing to rebase the home health
blended Wages and Salaries index and
the home health blended Benefits index.
We propose to use these blended
indexes as price proxies for the Wages
and Salaries and the Benefits portions of
the proposed 2016-based home health
market basket, as we did in the 2010based home health market basket. A
more detailed discussion is provided
below.
• Wages and Salaries: For measuring
price growth in the 2016-based home
health market basket, we are proposing
to apply six price proxies to six
occupational subcategories within the
Wages and Salaries component, which
would reflect the HHA occupational
mix. This is the same approach used for
the 2010-based index. We use a blended
wage proxy because there is not a
published wage proxy specific to the
home health industry.
We are proposing to continue to use
the National Industry-Specific
Occupational Employment and Wage
estimates for North American Industrial
Classification System (NAICS) 621600,
Home Health Care Services, published
by the BLS Office of Occupational
Employment Statistics (OES) as the data
source for the cost shares of the home
health blended wage and benefits proxy.
This is the same data source that was
used for the 2010-based HHA blended
wage and benefit proxies; however, we
are proposing to use the May 2016
estimates in place of the May 2010
estimates. Detailed information on the
methodology for the national industryspecific occupational employment and
wage estimates survey can be found at
http://www.bls.gov/oes/current/oes_
tec.htm.
The needed data on HHA
expenditures for the six occupational
subcategories (Health-Related
Professional and Technical, Non HealthRelated Professional and Technical,
Management, Administrative, Health
and Social Assistance Service, and
Other Service Workers) for the wages
and salaries component were tabulated
from the May 2016 OES data for NAICS
621600, Home Health Care Services.
Table 11 compares the proposed 2016
occupational assignments to the 2010
occupational assignments of the six
CMS designated subcategories. If an
OES occupational classification does
not exist in the 2010 or 2016 data we
use ‘‘n/a.’’
TABLE 11—PROPOSED 2016 OCCUPATIONAL ASSIGNMENTS COMPARED TO 2010 OCCUPATIONAL ASSIGNMENTS FOR CMS
HOME HEALTH WAGES AND SALARIES BLEND
amozie on DSK3GDR082PROD with PROPOSALS2
2016 proposed occupational groupings
2010 occupational groupings
Group 1
Health-related professional and technical
Group 1
Health-related professional and technical
n/a ..................
29–1031 .........
29–1051 .........
29–1062 .........
29–1063 .........
29–1065 .........
29–1066 .........
29–1069 .........
29–1071 .........
n/a ..................
29–1122 .........
29–1123 .........
29–1125 .........
29–1126 .........
29–1127 .........
29–1129 .........
29–1141 .........
29–1171 .........
29–1199 .........
n/a ................................................................................
Dietitians and Nutritionists ...........................................
Pharmacists ..................................................................
Family and General Practitioners ................................
Internists, General ........................................................
Pediatricians, General ..................................................
Psychiatrists .................................................................
Physicians and Surgeons, All Other ............................
Physician Assistants ....................................................
n/a ................................................................................
Occupational Therapists ..............................................
Physical Therapists ......................................................
Recreational Therapists ...............................................
Respiratory Therapists .................................................
Speech-Language Pathologists ...................................
Therapists, All Other ....................................................
Registered Nurses .......................................................
Nurse Practitioners .......................................................
Health Diagnosing and Treating Practitioners, All
Other.
29–1021 .........
29–1031 .........
29–1051 .........
29–1062 .........
29–1063 .........
n/a ..................
n/a ..................
29–1069 .........
29–1071 .........
29–1111 .........
29–1122 .........
29–1123 .........
29–1125 .........
29–1126 .........
29–1127 .........
29–1129 .........
n/a ..................
n/a ..................
29–1199 .........
Dentists, General.
Dietitians and Nutritionists.
Pharmacists.
Family and General Practitioners.
Internists, General.
n/a.
n/a.
Physicians and Surgeons, All Other.
Physician Assistants.
Registered Nurses.
Occupational Therapists.
Physical Therapists.
Recreational Therapists.
Respiratory Therapists.
Speech-Language Pathologists.
Therapists, All Other.
n/a.
n/a.
Health Diagnosing and Treating Practitioners, All
Other.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00026
Fmt 4701
Sfmt 4702
E:\FR\FM\12JYP2.SGM
12JYP2
32365
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
2016 proposed occupational groups
2010 occupational groupings
Group 2
Non health related professional & technical
13–0000 .........
15–0000 .........
n/a ..................
19–0000 .........
n/a ..................
25–0000 .........
27–0000 .........
Business and Financial Operations Occupations ........
Computer and Mathematical Occupations ...................
n/a ................................................................................
Life, Physical, and Social Science Occupations ..........
n/a ................................................................................
Education, Training, and Library Occupations .............
Arts, Design, Entertainment, Sports, and Media Occupations.
Group 3
Management
Group 3
11–0000 .........
Management Occupations ...........................................
11–0000 .........
Group 4
Administrative
Group 4
43–0000 .........
Office and Administrative Support Occupations ..........
43–0000 .........
Group 5
Health and social assistance services
Group 5
Health and social assistance services
21–0000 .........
29–2011 .........
29–2012 .........
29–2021 .........
29–2032 .........
29–2034 .........
29–2041 .........
29–2051 .........
29–2052 .........
29–2053 .........
29–2054 .........
29–2055 .........
29–2061 .........
29–2071 .........
29–2099 .........
n/a ..................
29–9099 .........
21–0000 .........
29–2011 .........
29–2012 .........
29–2021 .........
29–2032 .........
29–2034 .........
29–2041 .........
29–2051 .........
29–2052 .........
n/a ..................
29–2054 .........
n/a ..................
29–2061 .........
29–2071 .........
29–2099 .........
29–9012 .........
29–9099 .........
31–0000 .........
Community and Social Service Occupations ...............
Medical and Clinical Laboratory Technologists ...........
Medical and Clinical Laboratory Technicians ..............
Dental Hygienists .........................................................
Diagnostic Medical Sonographers ...............................
Radiologic Technologists .............................................
Emergency Medical Technicians and Paramedics ......
Dietetic Technicians .....................................................
Pharmacy Technicians .................................................
Psychiatric Technicians ................................................
Respiratory Therapy Technicians ................................
Surgical Technologists .................................................
Licensed Practical and Licensed Vocational Nurses ...
Medical Records and Health Information Technicians
Health Technologists and Technicians, All Other ........
n/a ................................................................................
Healthcare Practitioners and Technical Workers, All
Other.
Healthcare Support Occupations .................................
31–0000 .........
Community and Social Services Occupations.
Medical and Clinical Laboratory Technologists.
Medical and Clinical Laboratory Technicians.
Dental Hygienists.
Diagnostic Medical Sonographers.
Radiologic Technologists and Technicians.
Emergency Medical Technicians and Paramedics.
Dietetic Technicians.
Pharmacy Technicians.
n/a.
Respiratory Therapy Technicians.
n/a.
Licensed Practical and Licensed Vocational Nurses.
Medical Records and Health Information Technicians.
Health Technologists and Technicians, All Other.
Occupational Health and Safety Technicians.
Healthcare Practitioner and Technical Workers, All
Other.
Healthcare Support Occupations.
Group 6
Other service workers
Group 6
Other service workers
33–0000 .........
35–0000 .........
37–0000 .........
Protective Service Occupations ...................................
Food Preparation and Serving Related Occupations ..
Building and Grounds Cleaning and Maintenance Occupations.
Personal Care and Service Occupations .....................
Sales and Related Occupations ..................................
Construction and Extraction Occupations ....................
Installation, Maintenance, and Repair Occupations ....
Production Occupations ...............................................
Transportation and Material Moving Occupations .......
33–0000 .........
35–0000 .........
37–0000 .........
Protective Service Occupations.
Food Preparation and Serving Related Occupations.
Building and Grounds Cleaning and Maintenance Occupations.
Personal Care and Service Occupations.
Sales and Related Occupations.
n/a.
Installation, Maintenance, and Repair Occupations.
Production Occupations.
Transportation and Material Moving Occupations.
39–0000
41–0000
47–0000
49–0000
51–0000
53–0000
.........
.........
.........
.........
.........
.........
Total expenditures by occupation
were calculated by taking the OES
number of employees multiplied by the
Group 2
13–0000
15–0000
17–0000
19–0000
23–0000
25–0000
27–0000
.........
.........
.........
.........
.........
.........
.........
39–0000 .........
41–0000 .........
n/a ..................
49–0000 .........
51–0000 .........
53–0000 .........
Non health related professional & technical
Business and Financial Operations Occupations.
Computer and Mathematical Science Occupations.
Architecture and Engineering Occupations.
Life, Physical, and Social Science Occupations.
Legal Occupations.
Education, Training, and Library Occupations.
Arts, Design, Entertainment, Sports, and Media Occupations.
Management
Management Occupations.
Administrative
Office and Administrative Support Occupations.
OES annual average salary for each
subcategory, and then calculating the
proportion of total wage costs that each
subcategory represents. The proportions
listed in Table 12 represent the Wages
and Salaries blend weights.
TABLE 12—COMPARISON OF THE PROPOSED 2016-BASED HOME HEALTH WAGES AND SALARIES BLEND AND THE 2010BASED HOME HEALTH WAGES AND SALARIES BLEND
Proposed
2016 weight
amozie on DSK3GDR082PROD with PROPOSALS2
Cost subcategory
2010 weight
Health-Related Professional and
Technical.
Non Health-Related Professional
and Technical.
33.7
33.4
2.3
2.3
Management ................................
7.6
8.3
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00027
Price proxy
BLS series ID
ECI for Wages and salaries for All Civilian workers in Hospitals.
ECI for Wages and salaries for Private industry
workers in Professional, scientific, and technical services.
ECI for Wages and salaries for Private industry
workers in Management, business, and financial.
CIU1026220000000I.
Fmt 4701
Sfmt 4702
E:\FR\FM\12JYP2.SGM
12JYP2
CIU2025400000000I.
CIU2020000110000I.
32366
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 12—COMPARISON OF THE PROPOSED 2016-BASED HOME HEALTH WAGES AND SALARIES BLEND AND THE 2010BASED HOME HEALTH WAGES AND SALARIES BLEND—Continued
Proposed
2016 weight
Cost subcategory
2010 weight
Administrative ..............................
6.7
7.7
Health and Social Assistance
Services.
Other Service Occupations .........
35.3
35.8
14.4
12.6
Total * ....................................
100.0
100.0
Price proxy
BLS series ID
ECI for Wages and salaries for Private industry
workers in Office and administrative support.
ECI for Wages and salaries for All Civilian workers in Health care and social assistance.
ECI for Wages and salaries for Private industry
workers in Service occupations.
CIU2020000220000I.
CIU1026200000000I.
CIU2020000300000I.
* Totals may not sum due to rounding.
A comparison of the yearly changes
from CY 2016 to CY 2019 for the 2010based home health Wages and Salaries
blend and the proposed 2016-based
home health Wages and Salaries blend
is shown in Table 13. The annual
increases in the two price proxies are
the same when rounded to one decimal
place.
TABLE 13—ANNUAL GROWTH IN PROPOSED 2016 AND 2010 HOME HEALTH WAGES AND SALARIES BLEND
2016
Wage Blend 2016 ............................................................................................
Wage Blend 2010 ............................................................................................
2017
2.3
2.3
2018
2.5
2.5
2019
2.6
2.6
3.0
3.0
Source: IHS Global Insight Inc. 1st Quarter 2018 forecast with historical data through 4th Quarter 2017.
• Benefits: For measuring Benefits
price growth in the proposed 2016based home health market basket, we
are proposing to apply applicable price
proxies to the six occupational
subcategories that are used for the
Wages and Salaries blend. The proposed
six categories in Table 14 are the same
as those in the 2010-based home health
market basket and include the same
occupational mix as listed in Table 14.
TABLE 14—COMPARISON OF THE PROPOSED 2016-BASED HOME HEALTH BENEFITS BLEND AND 2010-BASED HOME
HEALTH BENEFITS BLEND
Proposed
2016 weight
Cost category
2010 weight
Health-Related Professional and Technical
Non Health-Related Professional and
Technical.
Management ...............................................
33.9
2.3
33.5
2.2
7.3
8.0
Administrative ..............................................
6.7
7.8
Health and Social Assistance Services ......
35.5
35.9
Other Service Workers ................................
14.2
12.5
Total * ...................................................
100.0
100.0
Price proxy
ECI for Benefits for All Civilian workers in Hospitals.
ECI for Benefits for Private industry workers in Professional, scientific, and technical services.
ECI for Benefits for Private industry workers in Management,
business, and financial.
ECI for Benefits for Private industry workers in Office and administrative support.
ECI for Benefits for All Civilian workers in Health care and social
assistance.
ECI for Benefits for Private industry workers in Service occupations.
amozie on DSK3GDR082PROD with PROPOSALS2
* Totals may not sum due to rounding.
There is no available data source that
exists for benefit expenditures by
occupation for the home health
industry. Thus, to construct weights for
the home health benefits blend we
calculated the ratio of benefits to wages
and salaries for CY 2016 for the six ECI
series we are proposing to use in the
blended ‘wages and salaries’ and
‘benefits’ indexes. To derive the relevant
benefits weight, we applied the benefitto-wage ratios to each of the six
occupational subcategories from the
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
2016 OES wage and salary weights, and
normalized. For example, the ratio of
benefits to wages from the 2016 home
health wages and salaries blend and the
benefits blend for the management
category is 0.984. We apply this ratio to
the 2016 OES weight for wages and
salaries for management, 7.6 percent,
and then normalize those weights
relative to the other five benefit
occupational categories to obtain a
benefit weight for management of 7.3
percent.
PO 00000
Frm 00028
Fmt 4701
Sfmt 4702
A comparison of the yearly changes
from CY 2016 to CY 2019 for the 2010based home health Benefits blend and
the proposed 2016-based home health
Benefits blend is shown in Table 15.
With the exception of a 0.1 percentage
point difference in 2019, the annual
increases in the two price proxies are
the same when rounded to one decimal
place.
E:\FR\FM\12JYP2.SGM
12JYP2
32367
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 15—ANNUAL GROWTH IN THE PROPOSED 2016 HOME HEALTH BENEFITS BLEND AND THE 2010 HOME HEALTH
BENEFITS BLEND
2016
Benefits Blend 2016 ........................................................................................
Benefits Blend 2010 ........................................................................................
2017
1.7
1.7
2018
1.9
1.9
2019
2.4
2.4
3.0
2.9
Source: IHS Global Insight Inc. 1st Quarter 2018 forecast with historical data through 4th Quarter 2017.
• Operations and Maintenance: We
are proposing to use CPI U.S. city
average for Fuel and utilities (BLS series
code #CUUR0000SAH2) to measure
price growth of this cost category. The
same proxy was used for the 2010-based
home health market basket.
• Professional Liability Insurance: We
are proposing to use the CMS Physician
Professional Liability Insurance price
index to measure price growth of this
cost category. The same proxy was used
for the 2010-based home health market
basket.
To accurately reflect the price changes
associated with physician PLI, each year
we collect PLI premium data for
physicians from a representative sample
of commercial carriers and publically
available rate filings as maintained by
each State’s Association of Insurance
Commissioners. As we require for our
other price proxies, the PLI price proxy
is intended to reflect the pure price
change associated with this particular
cost category. Thus, the level of liability
coverage is held constant from year to
year. To accomplish this, we obtain
premium information from a sample of
commercial carriers for a fixed level of
coverage, currently $1 million per
occurrence and a $3 million annual
limit. This information is collected for
every State by physician specialty and
risk class. Finally, the State-level,
physician-specialty data are aggregated
to compute a national total, using
counts of physicians by State and
specialty as provided in the AMA
publication, Physician Characteristics
and Distribution in the U.S.
• Administrative and Support: We are
proposing to use the ECI for Total
compensation for Private industry
workers in Office and administrative
support (BLS series code
#CIU2010000220000I) to measure price
growth of this cost category. The same
proxy was used for the 2010-based
home health market basket.
• Financial Services: We are
proposing to use the ECI for Total
compensation for Private industry
workers in Financial activities (BLS
series code #CIU201520A000000I) to
measure price growth of this cost
category. The same proxy was used for
the 2010-based home health market
basket.
• Medical Supplies: We are proposing
to use the PPI Commodity data for
Miscellaneous products-Medical,
surgical & personal aid devices (BLS
series code #WPU156) to measure price
growth of this cost category. The same
proxy was used for the 2010-based
home health market basket.
• Rubber and Plastics: We are
proposing to use the PPI Commodity
data for Rubber and plastic products
(BLS series code #WPU07) to measure
price growth of this cost category. The
same proxy was used for the 2010-based
home health market basket.
• Telephone: We are proposing to use
CPI U.S. city average for Telephone
services (BLS series code
#CUUR0000SEED) to measure price
growth of this cost category. The same
proxy was used for the 2010-based
home health market basket.
• Professional Fees: We are proposing
to use the ECI for Total compensation
for Private industry workers in
Professional and related (BLS series
code #CIS2010000120000I) to measure
price growth of this category. The same
proxy was used for the 2010-based
home health market basket.
• Other Products: We are proposing
to use the PPI Commodity data for Final
demand-Finished goods less foods and
energy (BLS series code #WPUFD4131)
to measure price growth of this category.
The same proxy was used for the 2010based home health market basket.
• Other Services: We are proposing to
use the ECI for Total compensation for
Private industry workers in Service
occupations (BLS series code
#CIU2010000300000I) to measure price
growth of this category. The same proxy
was used for the 2010-based home
health market basket.
• Transportation: We are proposing
to use the CPI U.S. city average for
Transportation (BLS series code
#CUUR0000SAT) to measure price
growth of this category. The same proxy
was used for the 2010-based home
health market basket.
• Fixed capital: We are proposing to
use the CPI U.S. city average for
Owners’ equivalent rent of residences
(BLS series code #CUUS0000SEHC) to
measure price growth of this cost
category. The same proxy was used for
the 2010-based home health market
basket.
• Movable Capital: We are proposing
to use the PPI Commodity data for
Machinery and equipment (BLS series
code #WPU11) to measure price growth
of this cost category. The same proxy
was used for the 2010-based home
health market basket.
e. Rebasing Results
A comparison of the yearly changes
from CY 2014 to CY 2021 for the 2010based home health market basket and
the proposed 2016-based home health
market basket is shown in Table 16.
amozie on DSK3GDR082PROD with PROPOSALS2
TABLE 16—COMPARISON OF THE 2010-BASED HOME HEALTH MARKET BASKET AND THE PROPOSED 2016-BASED HOME
HEALTH MARKET BASKET, PERCENT CHANGE, 2014–2021
Home health
market
basket,
2010-based
Historical data:
CY 2014 ................................................................................................................................
CY 2015 ................................................................................................................................
CY 2016 ................................................................................................................................
CY 2017 ................................................................................................................................
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00029
Fmt 4701
Sfmt 4702
E:\FR\FM\12JYP2.SGM
1.6
1.6
2.0
2.3
12JYP2
Proposed
home health
market
basket,
2016-based
1.6
1.5
2.0
2.3
Difference
(proposed
2016-based
less
2010-based)
0.0
¥0.1
0.0
0.0
32368
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 16—COMPARISON OF THE 2010-BASED HOME HEALTH MARKET BASKET AND THE PROPOSED 2016-BASED HOME
HEALTH MARKET BASKET, PERCENT CHANGE, 2014–2021—Continued
Home health
market
basket,
2010-based
Average CYs 2014–2017 ..............................................................................................
Forecast:
CY 2018 ................................................................................................................................
CY 2019 ................................................................................................................................
CY 2020 ................................................................................................................................
CY 2021 ................................................................................................................................
Average CYs 2018–2021 ..............................................................................................
Proposed
home health
market
basket,
2016-based
Difference
(proposed
2016-based
less
2010-based)
1.9
1.9
0.0
2.5
2.8
3.0
3.0
2.8
2.5
2.8
3.0
3.0
2.8
0.0
0.0
0.0
0.0
0.0
Source: IHS Global Inc. 1st Quarter 2018 forecast with historical data through 4th Quarter 2017.
Table 16 shows that the forecasted
rate of growth for CY 2019 for the
proposed 2016-based home health
market basket is 2.8 percent, the same
rate of growth as estimated using the
2010-based home health market basket;
other forecasted years also show a
similar increase. Similarly, the
historical estimates of the growth in the
2016-based and 2010-based home health
market basket are the same except for
CY 2015 where the 2010-based home
health market basket is 0.1 percentage
point higher. We note that if more
recent data are subsequently available
(for example, a more recent estimate of
the market basket), we would use such
data to determine the market basket
increases in the final rule.
f. Labor-Related Share
Effective for CY 2019, we are
proposing to revise the labor-related
share to reflect the proposed 2016-based
home health market basket
Compensation (Wages and Salaries plus
Benefits) cost weight. The current laborrelated share is based on the
Compensation cost weight of the 2010based home health market basket. Based
on the proposed 2016-based home
health market basket, the labor-related
share would be 76.1 percent and the
proposed non-labor-related share would
be 23.9 percent. The labor-related share
for the 2010-based home health market
basket was 78.5 percent and the nonlabor-related share was 21.5 percent. As
explained earlier, the decrease in the
compensation cost weight of 2.4
percentage points is attributable to both
employed compensation (wages and
salaries and benefits for employees) and
direct patient care contract labor costs
as reported in the MCR data. Table 17
details the components of the laborrelated share for the 2010-based and
proposed 2016-based home health
market baskets.
TABLE 17—LABOR–RELATED SHARE OF CURRENT AND PROPOSED HOME HEALTH MARKET BASKETS
Cost category
Wages and Salaries ................................................................................................................................................
Employee Benefits ...................................................................................................................................................
Total Labor-Related .................................................................................................................................................
Total Non Labor-Related .........................................................................................................................................
We propose to implement the
proposed revision to the labor-related
share of 76.1 percent in a budget neutral
manner. This proposal would be
consistent with our policy of
implementing the annual recalibration
of the case-mix weights and update of
the home health wage index in a budget
neutral manner.
amozie on DSK3GDR082PROD with PROPOSALS2
g. Multifactor Productivity
In the CY 2015 HHA PPS final rule
(79 FR 38384 through 38384), we
finalized our methodology for
calculating and applying the MFP
adjustment. As we explained in that
rule, section 1895(b)(3)(B)(vi) of the Act,
requires that, in CY 2015 (and in
subsequent calendar years, except CY
2018 (under section 411(c) of the
Medicare Access and CHIP
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
Reauthorization Act of 2015 (MACRA)
(Pub. L. 114–10, enacted April 16,
2015)), the market basket percentage
under the HHA prospective payment
system as described in section
1895(b)(3)(B) of the Act be annually
adjusted by changes in economy-wide
productivity. Section
1886(b)(3)(B)(xi)(II) of the Act defines
the productivity adjustment to be equal
to the 10-year moving average of change
in annual economy-wide private
nonfarm business multifactor
productivity (MFP) (as projected by the
Secretary for the 10-year period ending
with the applicable fiscal year, calendar
year, cost reporting period, or other
annual period) (the ‘‘MFP adjustment’’).
The Bureau of Labor Statistics (BLS) is
the agency that publishes the official
measure of private nonfarm business
PO 00000
Frm 00030
Fmt 4701
Sfmt 4702
2010-based
market basket
weight
Proposed
2016-based
market basket
weight
66.3
12.2
78.5
21.5
65.1
11.0
76.1
23.9
MFP. Please see http://www.bls.gov/
mfp, to obtain the BLS historical
published MFP data.
Based on IHS Global Inc.’s (IGI’s) first
quarter 2018 forecast with history
through the fourth quarter of 2017, the
projected MFP adjustment (the 10-year
moving average of MFP for the period
ending December 31, 2019) for CY 2019
is 0.7 percent. IGI is a nationally
recognized economic and financial
forecasting firm that contracts with CMS
to forecast the components of the market
baskets. We note that if more recent data
are subsequently available (for example,
a more recent estimate of the MFP
adjustment), we would use such data to
determine the MFP adjustment in the
final rule.
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
2. Proposed CY 2019 Market Basket
Update for HHAs
Using IGI’s first quarter 2018 forecast,
the MFP adjustment for CY 2019 is
projected to be 0.7 percent. In
accordance with section
1895(b)(3)(B)(iii) of the Act, we propose
to base the CY 2019 market basket
update, which is used to determine the
applicable percentage increase for HHA
payments, on the most recent estimate
of the proposed 2016-based home health
market basket. Based on IGI’s first
quarter 2018 forecast with history
through the fourth quarter of 2017, the
projected increase of the proposed 2016based home health market basket for CY
2019 is 2.8 percent. We propose to then
reduce this percentage increase by the
current estimate of the MFP adjustment
for CY 2019 of 0.7 percentage point in
accordance with 1895(b)(3)(B)(vi) of the
Act. Therefore, the current estimate of
the CY 2019 HHA payment update is 2.1
percent (2.8 percent market basket
update, less 0.7 percentage point MFP
adjustment). Furthermore, we note that
if more recent data are subsequently
available (for example, a more recent
estimate of the market basket and MFP
adjustment), we would use such data to
determine the CY 2019 market basket
update and MFP adjustment in the final
rule.
Section 1895(b)(3)(B)(v) of the Act
requires that the home health update be
decreased by 2 percentage points for
those HHAs that do not submit quality
data as required by the Secretary. For
HHAs that do not submit the required
quality data for CY 2019, the home
health payment update will be 0.1
percent (2.1 percent minus 2 percentage
points).
amozie on DSK3GDR082PROD with PROPOSALS2
3. CY 2019 Home Health Wage Index
Sections 1895(b)(4)(A)(ii) and (b)(4)(C)
of the Act require the Secretary to
provide appropriate adjustments to the
proportion of the payment amount
under the HH PPS that account for area
wage differences, using adjustment
factors that reflect the relative level of
wages and wage-related costs applicable
to the furnishing of HH services. Since
the inception of the HH PPS, we have
used inpatient hospital wage data in
developing a wage index to be applied
to HH payments. We propose to
continue this practice for CY 2019, as
we continue to believe that, in the
absence of HH-specific wage data that
accounts for area differences, using
inpatient hospital wage data is
appropriate and reasonable for the HH
PPS. Specifically, we propose to
continue to use the pre-floor, prereclassified hospital wage index as the
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
wage adjustment to the labor portion of
the HH PPS rates. For CY 2019, the
updated wage data are for hospital cost
reporting periods beginning on or after
October 1, 2014, and before October 1,
2015 (FY 2015 cost report data). We
apply the appropriate wage index value
to the labor portion of the HH PPS rates
based on the site of service for the
beneficiary (defined by section 1861(m)
of the Act as the beneficiary’s place of
residence).
To address those geographic areas in
which there are no inpatient hospitals,
and thus, no hospital wage data on
which to base the calculation of the CY
2019 HH PPS wage index, we propose
to continue to use the same
methodology discussed in the CY 2007
HH PPS final rule (71 FR 65884) to
address those geographic areas in which
there are no inpatient hospitals. For
rural areas that do not have inpatient
hospitals, we propose to use the average
wage index from all contiguous Core
Based Statistical Areas (CBSAs) as a
reasonable proxy. Currently, the only
rural area without a hospital from which
hospital wage data could be derived is
Puerto Rico. However, for rural Puerto
Rico, we do not apply this methodology
due to the distinct economic
circumstances that exist there (for
example, due to the close proximity to
one another of almost all of Puerto
Rico’s various urban and non-urban
areas, this methodology would produce
a wage index for rural Puerto Rico that
is higher than that in half of its urban
areas). Instead, we propose to continue
to use the most recent wage index
previously available for that area. For
urban areas without inpatient hospitals,
we use the average wage index of all
urban areas within the state as a
reasonable proxy for the wage index for
that CBSA. For CY 2019, the only urban
area without inpatient hospital wage
data is Hinesville, GA (CBSA 25980).
On February 28, 2013, OMB issued
Bulletin No. 13–01, announcing
revisions to the delineations of MSAs,
Micropolitan Statistical Areas, and
CBSAs, and guidance on uses of the
delineation of these areas. In the CY
2015 HH PPS final rule (79 FR 66085
through 66087), we adopted the OMB’s
new area delineations using a 1-year
transition.
On August 15, 2017, OMB issued
Bulletin No. 17–01 in which it
announced that one Micropolitan
Statistical Area, Twin Falls, Idaho, now
qualifies as a Metropolitan Statistical
Area. The new CBSA (46300) comprises
the principal city of Twin Falls, Idaho
in Jerome County, Idaho and Twin Falls
County, Idaho. The CY 2019 HH PPS
wage index value for CBSA 46300, Twin
PO 00000
Frm 00031
Fmt 4701
Sfmt 4702
32369
Falls, Idaho, will be 0.8335. Bulletin No.
17–01 is available at https://
www.whitehouse.gov/sites/
whitehouse.gov/files/omb/bulletins/
2017/b-17-01.pdf.11
The most recent OMB Bulletin (No.
18–03) was published on April 10, 2018
and is available at https://
www.whitehouse.gov/wp-content/
uploads/2018/04/OMB-BULLETIN-NO.18-03-Final.pdf.12 The revisions
contained in OMB Bulletin No. 18–03
have no impact on the geographic area
delineations that are used to wage adjust
HH PPS payments.
The CY 2019 wage index is available
on the CMS website at http://
www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/HomeHealthPPS/
Home-Health-Prospective-PaymentSystem-Regulations-and-Notices.html.
4. CY 2019 Annual Payment Update
a. Background
The Medicare HH PPS has been in
effect since October 1, 2000. As set forth
in the July 3, 2000 final rule (65 FR
41128), the base unit of payment under
the Medicare HH PPS is a national,
standardized 60-day episode payment
rate. As set forth in § 484.220, we adjust
the national, standardized 60-day
episode payment rate by a case-mix
relative weight and a wage index value
based on the site of service for the
beneficiary.
To provide appropriate adjustments to
the proportion of the payment amount
under the HH PPS to account for area
wage differences, we apply the
appropriate wage index value to the
labor portion of the HH PPS rates. As
discussed in section III.C.1 of this
proposed rule, based on the proposed
2016-based home health market basket,
the proposed labor-related share would
be 76.1 percent and the proposed nonlabor-related share would be 23.9
percent for CY 2019. The CY 2019 HH
PPS rates use the same case-mix
methodology as set forth in the CY 2008
HH PPS final rule with comment period
(72 FR 49762) and will be adjusted as
described in section III.B of this
proposed rule. The following are the
steps we take to compute the case-mix
11 ‘‘Revised Delineations of Metropolitan
Statistical Areas, Micropolitan Statistical Areas, and
Combined Statistical Areas, and Guidance on Uses
of the Delineations of These Areas’’. OMB
BULLETIN NO. 17–01. August 15, 2017. https://
www.whitehouse.gov/sites/whitehouse.gov/files/
omb/bulletins/2017/b-17-01.pdf.
12 ‘‘Revised Delineations of Metropolitan
Statistical Areas, Micropolitan Statistical Areas, and
Combined Statistical Areas, and Guidance on Uses
of the Delineations of These Areas’’. OMB
BULLETIN NO. 18–03. April 10, 2018. https://
www.whitehouse.gov/wp-content/uploads/2018/04/
OMB-BULLETIN-NO.-18-03-Final.pdf.
E:\FR\FM\12JYP2.SGM
12JYP2
32370
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
and wage-adjusted 60-day episode rate
for CY 2019:
• Multiply the national 60-day
episode rate by the patient’s applicable
case-mix weight.
• Divide the case-mix adjusted
amount into a labor (76.1 percent) and
a non-labor portion (23.9 percent).
• Multiply the labor portion by the
applicable wage index based on the site
of service of the beneficiary.
• Add the wage-adjusted portion to
the non-labor portion, yielding the casemix and wage adjusted 60-day episode
rate, subject to any additional applicable
adjustments.
In accordance with section
1895(b)(3)(B) of the Act, we propose the
annual update of the HH PPS rates.
Section 484.225 sets forth the specific
annual percentage update methodology.
In accordance with § 484.225(i), for a
HHA that does not submit HH quality
data, as specified by the Secretary, the
unadjusted national prospective 60-day
episode rate is equal to the rate for the
previous calendar year increased by the
applicable HH market basket index
amount minus 2 percentage points. Any
reduction of the percentage change
would apply only to the calendar year
involved and would not be considered
in computing the prospective payment
amount for a subsequent calendar year.
Medicare pays the national,
standardized 60-day case-mix and wageadjusted episode payment on a split
percentage payment approach. The split
percentage payment approach includes
an initial percentage payment and a
final percentage payment as set forth in
§ 484.205(b)(1) and (b)(2). We may base
the initial percentage payment on the
submission of a request for anticipated
payment (RAP) and the final percentage
payment on the submission of the claim
for the episode, as discussed in § 409.43.
The claim for the episode that the HHA
submits for the final percentage
payment determines the total payment
amount for the episode and whether we
make an applicable adjustment to the
60-day case-mix and wage-adjusted
episode payment. The end date of the
60-day episode as reported on the claim
determines which calendar year rates
Medicare will use to pay the claim.
We may also adjust the 60-day casemix and wage-adjusted episode
payment based on the information
submitted on the claim to reflect the
following:
• A low-utilization payment
adjustment (LUPA) is provided on a pervisit basis as set forth in §§ 484.205(c)
and 484.230.
• A partial episode payment (PEP)
adjustment as set forth in §§ 484.205(d)
and 484.235.
• An outlier payment as set forth in
§§ 484.205(e) and 484.240.
b. CY 2019 National, Standardized 60Day Episode Payment Rate
Section 1895(b)(3)(A)(i) of the Act
requires that the 60-day episode base
rate and other applicable amounts be
standardized in a manner that
eliminates the effects of variations in
relative case-mix and area wage
adjustments among different home
health agencies in a budget neutral
manner. To determine the CY 2019
national, standardized 60-day episode
payment rate, we apply a wage index
budget neutrality factor and a case-mix
budget neutrality factor described in
section III.B of this proposed rule; and
the home health payment update
percentage discussed in section III.C.2
of this proposed rule.
To calculate the wage index budget
neutrality factor, we simulated total
payments for non-LUPA episodes using
the CY 2019 wage index (including the
application of the proposed laborrelated share of 76.1 percent and the
proposed non-labor-related share of 23.9
percent) and compared it to our
simulation of total payments for nonLUPA episodes using the CY 2018 wage
index and CY 2018 (including the
application of the current labor-related
share of 78.535 percent and the nonlabor-related of 21.465). By dividing the
total payments for non-LUPA episodes
using the CY 2019 wage index by the
total payments for non-LUPA episodes
using the CY 2018 wage index, we
obtain a wage index budget neutrality
factor of 0.9991. We would apply the
wage index budget neutrality factor of
0.9991 to the calculation of the CY 2019
national, standardized 60-day episode
payment rate.
As discussed in section III.B of this
proposed rule, to ensure the changes to
the case-mix weights are implemented
in a budget neutral manner, we propose
to apply a case-mix weight budget
neutrality factor to the CY 2019
national, standardized 60-day episode
payment rate. The case-mix weight
budget neutrality factor is calculated as
the ratio of total payments when CY
2019 case-mix weights are applied to CY
2017 utilization (claims) data to total
payments when CY 2018 case-mix
weights are applied to CY 2017
utilization data. The case-mix budget
neutrality factor for CY 2019 is 1.0163
as described in section III.B of this
proposed rule.
Next, we would update the payment
rates by the CY 2019 home health
payment update percentage of 2.1
percent as described in section III.C.2 of
this proposed rule. The CY 2019
national, standardized 60-day episode
payment rate is calculated in Table 18.
amozie on DSK3GDR082PROD with PROPOSALS2
TABLE 18—CY 2019 60-DAY NATIONAL, STANDARDIZED 60-DAY EPISODE PAYMENT AMOUNT
CY 2018 national, standardized 60-day episode payment
Wage index
budget
neutrality
factor
Case-mix
weights
budget
neutrality
factor
CY 2019 HH
payment
update
CY 2019
National,
standardized
60-day
episode
payment
$3,039.64 ..........................................................................................................
× 0.9991
× 1.0163
× 1.021
$3,151.22
The CY 2019 national, standardized
60-day episode payment rate for an
HHA that does not submit the required
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
quality data is updated by the CY 2019
home health payment update of 2.1
PO 00000
Frm 00032
Fmt 4701
Sfmt 4702
percent minus 2 percentage points and
is shown in Table 19.
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
32371
TABLE 19—CY 2019 NATIONAL, STANDARDIZED 60-DAY EPISODE PAYMENT AMOUNT FOR HHAS THAT DO NOT SUBMIT
THE QUALITY DATA
CY 2018 national, standardized 60-day episode payment
Wage index
budget
neutrality
factor
Case-mix
weights
budget
neutrality
factor
CY 2019
HH payment
update minus
2 percentage
points
CY 2019
National,
standardized
60-day
episode
payment
$3,039.64 ..........................................................................................................
× 0.9991
× 1.0163
× 1.001
$3,089.49
c. CY 2019 National Per-Visit Rates
The national per-visit rates are used to
pay LUPAs (episodes with four or fewer
visits) and are also used to compute
imputed costs in outlier calculations.
The per-visit rates are paid by type of
visit or HH discipline. The six HH
disciplines are as follows:
• Home health aide (HH aide).
• Medical Social Services (MSS).
• Occupational therapy (OT).
• Physical therapy (PT).
• Skilled nursing (SN).
• Speech-language pathology (SLP).
To calculate the CY 2019 national pervisit rates, we started with the CY 2018
national per-visit rates. Then we applied
a wage index budget neutrality factor to
ensure budget neutrality for LUPA per-
visit payments. We calculated the wage
index budget neutrality factor by
simulating total payments for LUPA
episodes using the CY 2019 wage index
and comparing it to simulated total
payments for LUPA episodes using the
CY 2018 wage index. By dividing the
total payments for LUPA episodes using
the CY 2019 wage index by the total
payments for LUPA episodes using the
CY 2018 wage index, we obtained a
wage index budget neutrality factor of
1.0000. We apply the wage index budget
neutrality factor of 1.0000 in order to
calculate the CY 2019 national per-visit
rates.
The LUPA per-visit rates are not
calculated using case-mix weights.
Therefore, no case-mix weights budget
neutrality factor is needed to ensure
budget neutrality for LUPA payments.
Lastly, the per-visit rates for each
discipline are updated by the CY 2019
home health payment update percentage
of 2.1 percent. The national per-visit
rates are adjusted by the wage index
based on the site of service of the
beneficiary. The per-visit payments for
LUPAs are separate from the LUPA addon payment amount, which is paid for
episodes that occur as the only episode
or initial episode in a sequence of
adjacent episodes. The CY 2019 national
per-visit rates for HHAs that submit the
required quality data are updated by the
CY 2019 HH payment update percentage
of 2.1 percent and are shown in Table
20.
TABLE 20—CY 2019 NATIONAL PER-VISIT PAYMENT AMOUNTS FOR HHAS THAT DO SUBMIT THE REQUIRED QUALITY
DATA
HH Discipline
CY 2018
per-visit
payment
Home Health Aide ............................................................................................
Medical Social Services ...................................................................................
Occupational Therapy ......................................................................................
Physical Therapy ..............................................................................................
Skilled Nursing .................................................................................................
Speech-Language Pathology ...........................................................................
$64.94
229.86
157.83
156.76
143.40
170.38
The CY 2019 per-visit payment rates
for HHAs that do not submit the
required quality data are updated by the
CY 2019 HH payment update percentage
Wage index
budget
neutrality
factor
×
×
×
×
×
×
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
CY 2019
HH payment
update
×
×
×
×
×
×
1.021
1.021
1.021
1.021
1.021
1.021
CY 2019
per-visit
payment
$66.30
234.69
161.14
160.05
146.41
173.96
of 2.1 percent minus 2 percentage points
and are shown in Table 21.
amozie on DSK3GDR082PROD with PROPOSALS2
TABLE 21—CY 2019 NATIONAL PER-VISIT PAYMENT AMOUNTS FOR HHAS THAT DO NOT SUBMIT THE REQUIRED
QUALITY DATA
HH Discipline
CY 2018
per-visit rates
Home Health Aide ............................................................................................
Medical Social Services ...................................................................................
Occupational Therapy ......................................................................................
Physical Therapy ..............................................................................................
Skilled Nursing .................................................................................................
Speech-Language Pathology ...........................................................................
$64.94
229.86
157.83
156.76
143.40
170.38
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00033
Fmt 4701
Sfmt 4702
Wage index
budget
neutrality
factor
×
×
×
×
×
×
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
E:\FR\FM\12JYP2.SGM
12JYP2
CY 2019
HH payment
update minus
2 percentage
points
×
×
×
×
×
×
1.001
1.001
1.001
1.001
1.001
1.001
CY 2019
per-visit rates
$65.00
230.09
157.99
156.92
143.54
170.55
32372
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
d. Low-Utilization Payment Adjustment
(LUPA) Add-On Factors
LUPA episodes that occur as the only
episode or as an initial episode in a
sequence of adjacent episodes are
adjusted by applying an additional
amount to the LUPA payment before
adjusting for area wage differences. In
the CY 2014 HH PPS final rule (78 FR
72305), we changed the methodology for
calculating the LUPA add-on amount by
finalizing the use of three LUPA add-on
factors: 1.8451 for SN; 1.6700 for PT;
and 1.6266 for SLP. We multiply the
per-visit payment amount for the first
SN, PT, or SLP visit in LUPA episodes
that occur as the only episode or an
initial episode in a sequence of adjacent
episodes by the appropriate factor to
determine the LUPA add-on payment
amount. For example, in the case of
HHAs that do submit the required
quality data, for LUPA episodes that
occur as the only episode or an initial
episode in a sequence of adjacent
episodes, if the first skilled visit is SN,
the payment for that visit will be
$270.14 (1.8451 multiplied by $146.41),
subject to area wage adjustment.
e. CY 2019 Non-Routine Medical
Supply (NRS) Payment Rates
All medical supplies (routine and
nonroutine) must be provided by the
HHA while the patient is under a home
health plan of care. Examples of
supplies that can be considered non-
routine include dressings for wound
care, I.V. supplies, ostomy supplies,
catheters, and catheter supplies.
Payments for NRS are computed by
multiplying the relative weight for a
particular severity level by the NRS
conversion factor. To determine the CY
2019 NRS conversion factor, we
updated the CY 2018 NRS conversion
factor ($53.03) by the CY 2019 home
health payment update percentage of 2.1
percent. We did not apply a
standardization factor as the NRS
payment amount calculated from the
conversion factor is not wage or casemix adjusted when the final claim
payment amount is computed. The
proposed NRS conversion factor for CY
2019 is shown in Table 22.
TABLE 22—CY 2019 NRS CONVERSION FACTOR FOR HHAS THAT DO SUBMIT THE REQUIRED QUALITY DATA
CY 2018 NRS conversion factor
CY 2019
HH payment
update
CY 2019
NRS
conversion
factor
$53.03 ......................................................................................................................................................................
× 1.021
$54.14
Using the CY 2019 NRS conversion
factor, the payment amounts for the six
severity levels are shown in Table 23.
TABLE 23—CY 2019 NRS PAYMENT AMOUNTS FOR HHAS THAT DO SUBMIT THE REQUIRED QUALITY DATA
Severity level
1
2
3
4
5
6
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
For HHAs that do not submit the
required quality data, we updated the
CY 2018 NRS conversion factor ($53.03)
by the CY 2019 home health payment
update percentage of 2.1 percent minus
2 percentage points. The proposed CY
Points
(scoring)
Relative
weight
CY 2019
NRS payment
amounts
0
1 to 14
15 to 27
28 to 48
49 to 98
99+
0.2698
0.9742
2.6712
3.9686
6.1198
10.5254
$ 14.61
52.74
144.62
214.86
331.33
569.85
2019 NRS conversion factor for HHAs
that do not submit quality data is shown
in Table 24.
amozie on DSK3GDR082PROD with PROPOSALS2
TABLE 24—CY 2019 NRS CONVERSION FACTOR FOR HHAS THAT DO NOT SUBMIT THE REQUIRED QUALITY DATA
CY 2018 NRS conversion factor
CY 2019
HH payment
update
percentage
minus
2 percentage
points
CY 2019
NRS
conversion
factor
$53.03 ......................................................................................................................................................................
× 1.001
$53.08
The payment amounts for the various
severity levels based on the updated
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
conversion factor for HHAs that do not
PO 00000
Frm 00034
Fmt 4701
Sfmt 4702
submit quality data are calculated in
Table 25.
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
32373
TABLE 25—CY 2019 NRS PAYMENT AMOUNTS FOR HHAS THAT DO NOT SUBMIT THE REQUIRED QUALITY DATA
Severity level
amozie on DSK3GDR082PROD with PROPOSALS2
1
2
3
4
5
6
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
...................................................................................................................................................
D. Proposed Rural Add-On Payments for
CYs 2019 Through 2022
described in CMS Transmittal 2047
published on March 20, 2018.
1. Background
Section 421(a) of the MMA required,
for HH services furnished in a rural
areas (as defined in section
1886(d)(2)(D) of the Act), for episodes or
visits ending on or after April 1, 2004,
and before April 1, 2005, that the
Secretary increase the payment amount
that otherwise would have been made
under section 1895 of the Act for the
services by 5 percent.
Section 5201 of the DRA amended
section 421(a) of the MMA. The
amended section 421(a) of the MMA
required, for HH services furnished in a
rural area (as defined in section
1886(d)(2)(D) of the Act), on or after
January 1, 2006, and before January 1,
2007, that the Secretary increase the
payment amount otherwise made under
section 1895 of the Act for those
services by 5 percent.
Section 3131(c) of the Affordable Care
Act amended section 421(a) of the MMA
to provide an increase of 3 percent of
the payment amount otherwise made
under section 1895 of the Act for HH
services furnished in a rural area (as
defined in section 1886(d)(2)(D) of the
Act), for episodes and visits ending on
or after April 1, 2010, and before
January 1, 2016.
Section 210 of the MACRA amended
section 421(a) of the MMA to extend the
rural add-on by providing an increase of
3 percent of the payment amount
otherwise made under section 1895 of
the Act for HH services provided in a
rural area (as defined in section
1886(d)(2)(D) of the Act), for episodes
and visits ending before January 1, 2018.
Section 50208(a) of the Bipartisan
Budget Act of 2018 amended section
421(a) of the MMA to extend the rural
add-on by providing an increase of 3
percent of the payment amount
otherwise made under section 1895 of
the Act for HH services provided in a
rural area (as defined in section
1886(d)(2)(D) of the Act), for episodes
and visits ending before January 1, 2019.
This extension of the rural add-on
payments was implemented as
2. Proposed Rural Add-On Payments for
CYs 2019 Through 2022
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
Section 50208(a)(1)(D) of the BBA of
2018 adds a new subsection (b) to
section 421 of the MMA to provide rural
add-on payments for episodes and visits
ending during CYs 2019 through 2022 .
It also mandates implementation of a
new methodology for applying those
payments. Unlike previous rural addons, which were applied to all rural
areas uniformly, the extension provides
varying add-on amounts depending on
the rural county (or equivalent area)
classification by classifying each rural
county (or equivalent area) into one of
three distinct categories.
Specifically, section 421(b)(1) of the
MMA, as amended by section 50208 of
the BBA of 2018, provides that rural
counties (or equivalent areas) would be
placed into one of three categories for
purposes of HH rural add-on payments:
(1) Rural counties and equivalent areas
in the highest quartile of all counties
and equivalent areas based on the
number of Medicare home health
episodes furnished per 100 individuals
who are entitled to, or enrolled for,
benefits under part A of Medicare or
enrolled for benefits under part B of
Medicare only, but not enrolled in a
Medicare Advantage plan under part C
of Medicare, as provided in section
421(b)(1)(A) of the MMA (the ‘‘High
utilization’’ category); (2) rural counties
and equivalent areas with a population
density of 6 individuals or fewer per
square mile of land area and are not
included in the category provided in
section 421(b)(1)(A) of the MMA, as
provided in section 421(b)(1)(B) of the
MMA (the Low population density’’
category); and (3) rural counties and
equivalent areas not in the categories
provided in either sections 421(b)(1)(A)
or 421(b)(1)(B) of the MMA, as provided
in section 421(b)(1)(C) of the MMA (the
‘‘All other’’ category). The list of
counties and equivalent areas used in
our analysis is based on the CY 2015 HH
PPS wage index file, which includes the
PO 00000
Frm 00035
Fmt 4701
Sfmt 4702
Points
(scoring)
Relative
weight
CY 2019
NRS payment
amounts
0
1 to 14
15 to 27
28 to 48
49 to 98
99+
0.2698
0.9742
2.6712
3.9686
6.1198
10.5254
$ 14.32
51.71
141.79
210.65
324.84
558.69
names of the constituent counties for
each rural and urban area designation.
We used the 2015 HH PPS wage index
file as the basis for our analysis because
the 2015 HH PPS wage index file
already included SSA state and county
codes not normally included on the HH
PPS wage index files, but were included
in the 2015 HH PPS wage index file due
to the transition to new OMB geographic
area delineations that year. The CY 2015
HH PPS wage index file is available for
download at: https://www.cms.gov/
Medicare/Medicare-Fee-for-ServicePayment/HomeHealthPPS/HomeHealth-Prospective-Payment-SystemRegulations-and-Notices-Items/CMS1611-F.html. This file includes 3,246
counties and equivalent areas and their
urban and rural status and uses the
OMB’s geographic area delineations, as
described in section III.C.3 of this
proposed rule. We updated the
information contained in this file to
include any revisions to the geographic
area delineations as published by the
OMB in their publicly available
bulletins that would reflect a change in
urban and rural status. The states, the
District of Columbia, and the U.S.
territories of Guam, Puerto Rico, and the
U.S. Virgin Islands are included in the
analysis file containing 3,246 counties
and equivalent areas. Of the 3,246 total
counties and equivalent areas that were
used in our analysis, 2,006 of these are
considered rural for purposes of
determining HH rural add-on payments.
We identify equivalent areas based on
the definition of equivalent entities as
defined by the OMB in their most recent
bulletin (No. 18–03) available at https://
www.whitehouse.gov/wp-content/
uploads/2018/04/OMB-BULLETIN-NO.18-03-Final.pdf.13 We consider
boroughs and a municipality in Alaska,
parishes in Louisiana, municipios in
Puerto Rico, and independent cities in
13 ‘‘Revised Delineations of Metropolitan
Statistical Areas, Micropolitan Statistical Areas, and
Combined Statistical Areas, and Guidance on Uses
of the Delineations of These Areas’’. OMB
BULLETIN NO. 18–03. April 10, 2018. https://
www.whitehouse.gov/wp-content/uploads/2018/04/
OMB-BULLETIN-NO.-18-03-Final.pdf.
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32374
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
Maryland, Missouri, Nevada, and
Virginia as equivalent areas.
Under section 421(b)(1)(A) of the
MMA, one category of rural counties
and equivalent areas for purposes of the
HH rural add-on payment is a category
comprised of rural counties or
equivalent areas that are in the highest
quartile of all counties or equivalent
areas based on the number of Medicare
home health episodes furnished per 100
Medicare beneficiaries. Section
421(b)(2)(B)(i) of the MMA requires the
use of data from 2015 to determine
which counties or equivalent areas are
in the highest quartile of home health
utilization for the category described
under section 421(b)(1)(A) of the MMA,
that is, the ‘‘High utilization’’ category.
Section 421(b)(2)(B)(ii) of the MMA
requires that data from the territories are
to be excluded in determining which
counties or equivalent areas are in the
highest quartile of home health
utilization and requires that the
territories be excluded from the category
described by section 421(b)(1)(A) of the
MMA. Under section 421(b)(2)(B)(iii) of
the MMA, the Secretary may exclude
data from counties or equivalent areas
in rural areas with a low volume of
home health episodes in determining
which counties or equivalent areas are
in the highest quartile of home health
utilization. If data is excluded for a
county or equivalent area, section
421(b)(2)(B)(iii) of the MMA requires
that the county or equivalent area be
excluded from the category described by
section 421(b)(1)(A) of the MMA (the
‘‘High utilization’’ category).
We used CY 2015 claims data and
2015 data from the Medicare Beneficiary
Summary File to classify rural counties
and equivalent areas into the ‘‘High
utilization’’ category. We propose to
classify a rural county or equivalent area
into this category if the county or
equivalent area is in the highest quartile
(top 25th percentile) of all (urban and
rural) counties and equivalent areas
based on the ratio of Medicare home
health episodes furnished per 100
Medicare enrollees. The Medicare
Beneficiary Summary File contained
information on the Social Security
Administration (SSA) state and county
code of the beneficiary’s mailing
address and information on enrollment
in Medicare Part A, B, and C during
2015. The claims data and information
from the Medicare Beneficiary Summary
File were pulled from the Chronic
Condition Warehouse Virtual Research
Data Center during December 2017. We
used the claims data to determine how
many home health episodes (excluding
Requests for Anticipated Payments
(RAPs) and zero payment episodes)
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
occurred in each state and county or
equivalent area. We assigned each home
health episode to the state and county
code of the beneficiary’s mailing
address. As stipulated by section
421(b)(2)(B)(ii) of the MMA, we
excluded any data from the territories of
Guam, Puerto Rico, and the U.S. Virgin
Islands for determining which rural
counties and equivalent areas belong in
the ‘‘High utilization’’ category. We note
that the territories of American Samoa
and the Northern Mariana Islands were
not included in the CY 2015 HH PPS
wage index file to identify counties or
equivalent areas for these territories so
no data from these territories were
included in determining the ‘‘High
utilization’’ category. As we are not
aware of any Medicare home health
services being furnished in these two
territories in recent years, we will
address any application of home health
rural add-on payments for these
territories in the future should Medicare
home health services be furnished in
them. Therefore, counties and
equivalent areas in the territories of
American Samoa, Guam, the Northern
Mariana Islands, Puerto Rico, and the
U.S. Virgin Islands are not included in
the ‘‘High utilization’’ category, as
required by section 421(b)(2)(B)(ii) of
the MMA. In addition, under the
authority granted to the Secretary (by
section 421(b)(2)(B)(iii) of the MMA) to
exclude data from counties or
equivalent areas in rural areas with a
low volume of home health episodes,
we excluded data from rural counties
and equivalent areas that had 10 or
fewer episodes during 2015 for
determining which counties and
equivalent areas belong in the ‘‘High
utilization’’ category. We believe that
using a threshold of 10 or fewer
episodes is a reasonable threshold for
defining low volume, in accordance
with section 421(b)(2)(B)(iii) of the
MMA. After excluding data from (1) the
territories of Guam, Puerto Rico, and the
U.S. Virgin Islands and (2) counties and
equivalent areas that had 10 or fewer
episodes during 2015, we determined
the number of home health episodes
furnished per 100 enrollees for the
remaining counties and equivalent
areas. We determined that the counties
or equivalent areas in the highest
quartile have a ratio of episodes to
beneficiaries that is at or above
17.72487. The highest quartile consisted
of 778 counties or equivalent areas. Of
those 778 counties or equivalent areas,
510 are rural and, therefore, we propose
to classify these 510 rural counties or
equivalent areas into the ‘‘High
utilization’’ category.
PO 00000
Frm 00036
Fmt 4701
Sfmt 4702
Under section 421(b)(1)(B) of the
MMA, another category of rural counties
and equivalent areas for purposes of the
HH rural add-on payment is a category
comprised of rural counties or
equivalent areas with a population
density of 6 individuals or fewer per
square mile of land area and that are not
included in the ‘‘High utilization’’
category. Section 421(b)(2)(C) of the
MMA requires that data from the 2010
decennial Census be used for purposes
of determining population density with
respect to the category provided under
section 421(b)(1)(B) of the MMA, that is,
the ‘‘Low population density’’ category.
We used 2010 Census data gathered
from the tables provided at: https://
factfinder.census.gov/bkmk/table/1.0/
en/DEC/10_SF1/GCTPH1.US05PR and
https://www.census.gov/data/tables/
time-series/dec/cph-series/cph-t/cph-t8.html to determine which counties and
equivalent areas have a population
density of six individuals or fewer per
square mile of land area.14 15 In
examining the rural counties and
equivalent areas that were not already
classified into the ‘‘High utilization’’
category, we identified each rural
county or equivalent area that had a
population density of six individuals or
fewer per square mile of land area. As
a result of that analysis, we determined
there are 334 rural counties or
equivalent areas that have a population
density of six individuals or fewer per
square mile of land area and that are not
already classified into the ‘‘High
utilization’’ category. We propose to
classify 334 rural counties or equivalent
areas into the ‘‘Low population density’’
category.
Lastly, section 421(b)(1)(C) of the
MMA provides for a category comprised
of rural counties or equivalent areas that
are not included in either the ‘‘High
utilization’’ or the ‘‘Low population
density’’ category. After determining
which rural counties and equivalent
areas should be classified into the ‘‘High
utilization’’ and ‘‘Low population
density’’ categories, we have determined
that there are 1,162 remaining rural
counties and equivalent areas that do
not meet the criteria for inclusion in the
‘‘High utilization’’ or ‘‘Low population
density’’ categories. We propose to
classify these 1,162 rural counties and
14 ‘‘Population, Housing Units, Area, and Density:
2010—United States—County by State; and for
Puerto Rico 2010 Census Summary File 1’’. https://
factfinder.census.gov/bkmk/table/1.0/en/DEC/10_
SF1/GCTPH1.US05PR.
15 ‘‘Population, Housing Units, Land Area, and
Density for U.S. Island Areas: 2010 (CPH–T–8)’’. 10/
28/2013. https://www.census.gov/data/tables/timeseries/dec/cph-series/cph-t/cph-t-8.html.
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
equivalent areas into the ‘‘All other’’
category.
Section 421(b)(1) of the MMA
specifies varying rural add-on payment
percentages and varying durations of
rural add-on payments for home health
services furnished in a rural county or
equivalent area according to which
category described in section
421(b)(1)(A), 421(b)(1)(B), or
421(b)(1)(C) of the MMA that the rural
county or equivalent area is classified
into. The rural add-on payment
percentages and duration of rural addon payments are shown in Table 26. The
national standardized 60-day episode
payment rate, the national per-visit
rates, and the NRS conversion factor
will be increased by the rural add-on
32375
payment percentages as noted in Table
26 when services are provided in rural
areas. The HH Pricer module, located
within CMS’ claims processing system,
will increase the base payment rates
provided in Tables 18 through 25 by the
appropriate rural add-on percentage
prior to applying any case-mix and wage
index adjustments.
TABLE 26—HH PPS RURAL ADD-ON PERCENTAGES, CYS 2019–2022
CY 2019
(%)
Category
amozie on DSK3GDR082PROD with PROPOSALS2
High utilization .................................................................................................
Low population density ....................................................................................
All other ............................................................................................................
Section 421(b)(2)(A) of the MMA
provides that the Secretary shall make a
determination only for a single time as
to which category under sections
421(b)(1)(A), 421(b)(1)(B), or
421(b)(1)(C) of the MMA that a rural
county or equivalent area is classified
into, and that the determination applies
for the entire duration of the period for
which rural add-on payments are in
place under section 421(b) of the MMA.
We propose that our proposed
classifications of rural counties and
equivalent areas in the ‘‘High
utilization’’, ‘‘Low population density’’,
and ‘‘All other’’ categories would be
applicable throughout the period of
rural add-on payments established
under section 421(b) of the MMA and
there would be no changes in
classifications. This would mean that a
rural county or equivalent area
classified into the ‘‘High utilization’’
category would remain in that category
through CY 2022 even after rural addon payments for that category ends after
CY 2020. Similarly, a rural county or
equivalent area classified into the ‘‘All
other’’ category would remain in that
category through CY 2022 even after
rural add-on payments for that category
ends after CY 2021. A rural county or
equivalent area classified into the ‘‘Low
population density’’ category would
remain in that category through CY
2022.
Section 421(b)(3) of the MMA
provides that there shall be no
administrative or judicial review of the
classification determinations made for
the rural add-on payments under
section 421(b)(1) of the MMA.
Section 50208(a)(2) of the Bipartisan
Budget Act of 2018 amended section
1895(c) of the Act by adding a new
requirement set out at section 1895(c)(3)
of the Act. This requirement states that
no claim for home health services may
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
CY 2020
(%)
1.5
4.0
3.0
be paid unless ‘‘in the case of home
health services furnished on or after
January 1, 2019, the claim contains the
code for the county (or equivalent area)
in which the home health service was
furnished.’’ This information will be
necessary in order to calculate the rural
add-on payments. We are proposing that
HHAs enter the FIPS state and county
code, rather than the SSA state and
county code, on the claim. Many HHAs
are more familiar with using FIPS state
and county codes since HHAs in a
number of States are already using FIPS
state and county codes for Statemandated reporting programs. Our
analysis is based entirely on the SSA
state and county codes as these are the
codes that are included in the Medicare
Beneficiary Summary File. We crosswalked the SSA state and county codes
used in our analysis to the FIPS state
and county codes in order to provide
HHAs with the corresponding FIPS state
and county codes that should be
reported on their claims.
The data used to categorize each
county or equivalent area is available in
the Downloads section associated with
the publication of this proposed rule at
https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
HomeHealthPPS/Home-HealthProspective-Payment-SystemRegulations-and-Notices-Items/CMS1689-P.html. In addition, an Excel file
containing the rural county or
equivalent area names, their FIPS state
and county codes, and their designation
into one of the three rural add-on
categories is available for download.
We are soliciting comments regarding
our application of the methodology
specified by section 50208 of the
Bipartisan Budget Act of 2018.
PO 00000
Frm 00037
Fmt 4701
Sfmt 4702
0.5
3.0
2.0
CY 2021
(%)
CY 2022
(%)
........................
2.0
1.0
........................
1.0
........................
E. Proposed Payments for High-Cost
Outliers Under the HH PPS
1. Background
Section 1895(b)(5) of the Act allows
for the provision of an addition or
adjustment to the home health payment
amount otherwise made in the case of
outliers because of unusual variations in
the type or amount of medically
necessary care. Under the HH PPS,
outlier payments are made for episodes
whose estimated costs exceed a
threshold amount for each Home Health
Resource Group (HHRG). The episode’s
estimated cost was established as the
sum of the national wage-adjusted pervisit payment amounts delivered during
the episode. The outlier threshold for
each case-mix group or Partial Episode
Payment (PEP) adjustment is defined as
the 60-day episode payment or PEP
adjustment for that group plus a fixeddollar loss (FDL) amount. For the
purposes of the HH PPS, the FDL
amount is calculated by multiplying the
HH FDL ratio by a case’s wage-adjusted
national, standardized 60-day episode
payment rate, which yields an FDL
dollar amount for the case. The outlier
threshold amount is the sum of the wage
and case-mix adjusted PPS episode
amount and wage-adjusted FDL amount.
The outlier payment is defined to be a
proportion of the wage-adjusted
estimated cost beyond the wageadjusted threshold. The proportion of
additional costs over the outlier
threshold amount paid as outlier
payments is referred to as the losssharing ratio.
As we noted in the CY 2011 HH PPS
final rule (75 FR 70397 through 70399),
section 3131(b)(1) of the Affordable Care
Act amended section 1895(b)(3)(C) of
the Act, and required the Secretary to
reduce the HH PPS payment rates such
that aggregate HH PPS payments were
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32376
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
reduced by 5 percent. In addition,
section 3131(b)(2) of the Affordable Care
Act amended section 1895(b)(5) of the
Act by redesignating the existing
language as section 1895(b)(5)(A) of the
Act, and revising the language to state
that the total amount of the additional
payments or payment adjustments for
outlier episodes could not exceed 2.5
percent of the estimated total HH PPS
payments for that year. Section
3131(b)(2)(C) of the Affordable Care Act
also added section 1895(b)(5)(B) of the
Act which capped outlier payments as
a percent of total payments for each
HHA at 10 percent.
As such, beginning in CY 2011, we
reduce payment rates by 5 percent and
target up to 2.5 percent of total
estimated HH PPS payments to be paid
as outliers. To do so, we first returned
the 2.5 percent held for the target CY
2010 outlier pool to the national,
standardized 60-day episode rates, the
national per visit rates, the LUPA addon payment amount, and the NRS
conversion factor for CY 2010. We then
reduced the rates by 5 percent as
required by section 1895(b)(3)(C) of the
Act, as amended by section 3131(b)(1) of
the Affordable Care Act. For CY 2011
and subsequent calendar years we target
up to 2.5 percent of estimated total
payments to be paid as outlier
payments, and apply a 10 percent
agency-level outlier cap.
In the CY 2017 HH PPS proposed and
final rules (81 FR 43737 through 43742
and 81 FR 76702), we described our
concerns regarding patterns observed in
home health outlier episodes.
Specifically, we noted that the
methodology for calculating home
health outlier payments may have
created a financial incentive for
providers to increase the number of
visits during an episode of care in order
to surpass the outlier threshold; and
simultaneously created a disincentive
for providers to treat medically complex
beneficiaries who require fewer but
longer visits. Given these concerns, in
the CY 2017 HH PPS final rule (81 FR
76702), we finalized changes to the
methodology used to calculate outlier
payments, using a cost-per-unit
approach rather than a cost-per-visit
approach. This change in methodology
allows for more accurate payment for
outlier episodes, accounting for both the
number of visits during an episode of
care and also the length of the visits
provided. Using this approach, we now
convert the national per-visit rates into
per 15-minute unit rates. These per 15minute unit rates are used to calculate
the estimated cost of an episode to
determine whether the claim will
receive an outlier payment and the
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
amount of payment for an episode of
care. In conjunction with our finalized
policy to change to a cost-per-unit
approach to estimate episode costs and
determine whether an outlier episode
should receive outlier payments, in the
CY 2017 HH PPS final rule we also
finalized the implementation of a cap on
the amount of time per day that would
be counted toward the estimation of an
episode’s costs for outlier calculation
purposes (81 FR 76725). Specifically,
we limit the amount of time per day
(summed across the six disciplines of
care) to 8 hours (32 units) per day when
estimating the cost of an episode for
outlier calculation purposes.
We plan to publish the cost-per-unit
amounts for CY 2019 in the rate update
change request, which is issued after the
publication of the CY 2019 HH PPS final
rule. We note that in the CY 2017 HH
PPS final rule (81 FR 76724), we stated
that we did not plan to re-estimate the
average minutes per visit by discipline
every year. Additionally, we noted that
the per-unit rates used to estimate an
episode’s cost will be updated by the
home health update percentage each
year, meaning we would start with the
national per-visit amounts for the same
calendar year when calculating the costper-unit used to determine the cost of an
episode of care (81 FR 76727). We note
that we will continue to monitor the
visit length by discipline as more recent
data become available, and we may
propose to update the rates as needed in
the future.
2. Proposed Fixed Dollar Loss (FDL)
Ratio
For a given level of outlier payments,
there is a trade-off between the values
selected for the FDL ratio and the losssharing ratio. A high FDL ratio reduces
the number of episodes that can receive
outlier payments, but makes it possible
to select a higher loss-sharing ratio, and
therefore, increase outlier payments for
qualifying outlier episodes.
Alternatively, a lower FDL ratio means
that more episodes can qualify for
outlier payments, but outlier payments
per episode must then be lower.
The FDL ratio and the loss-sharing
ratio must be selected so that the
estimated total outlier payments do not
exceed the 2.5 percent aggregate level
(as required by section 1895(b)(5)(A) of
the Act). Historically, we have used a
value of 0.80 for the loss-sharing ratio
which, we believe, preserves incentives
for agencies to attempt to provide care
efficiently for outlier cases. With a losssharing ratio of 0.80, Medicare pays 80
percent of the additional estimated costs
above the outlier threshold amount.
PO 00000
Frm 00038
Fmt 4701
Sfmt 4702
Simulations based on CY 2015 claims
data (as of June 30, 2016) completed for
the CY 2017 HH PPS final rule showed
that outlier payments were estimated to
represent approximately 2.84 percent of
total HH PPS payments in CY 2017, and
as such, we raised the FDL ratio from
0.45 to 0.55. We stated that raising the
FDL ratio to 0.55, while maintaining a
loss-sharing ratio of 0.80, struck an
effective balance of compensating for
high-cost episodes while still meeting
the statutory requirement to target up to,
but no more than, 2.5 percent of total
payments as outlier payments (81 FR
76726). The national, standardized 60day episode payment amount is
multiplied by the FDL ratio. That
amount is wage-adjusted to derive the
wage-adjusted FDL amount, which is
added to the case-mix and wageadjusted 60-day episode payment
amount to determine the outlier
threshold amount that costs have to
exceed before Medicare would pay 80
percent of the additional estimated
costs.
For this proposed rule, simulating
payments using preliminary CY 2017
claims data (as of March 2, 2018) and
the CY 2018 HH PPS payment rates (82
FR 51676), we estimate that outlier
payments in CY 2018 would comprise
2.30 percent of total payments. Based on
simulations using CY 2017 claims data
(as of March 2, 2018) and the proposed
CY 2019 payment rates presented in
section III.C.4 of this proposed rule, we
estimate that outlier payments would
constitute approximately 2.32 percent of
total HH PPS payments in CY 2019. Our
simulations show that the FDL ratio
would need to be changed from 0.55 to
0.51 to pay up to, but no more than, 2.5
percent of total payments as outlier
payments in CY 2019.
Given the statutory requirement that
total outlier payments not exceed 2.5
percent of the total payments estimated
to be made based under the HH PPS, we
are proposing to lower the FDL ratio for
CY 2019 from 0.55 to 0.51 to better
approximate the 2.5 percent statutory
maximum. However, we note that we
are not proposing a change to the losssharing ratio (0.80) for the HH PPS to
remain consistent with payment for
high-cost outliers in other Medicare
payment systems (for example, IRF PPS,
IPPS, etc.). We note that in the final
rule, we will update our estimate of
outlier payments as a percent of total
HH PPS payments using the most
current and complete year of HH PPS
data (CY 2017 claims data as of June 30,
2018 or later) and therefore, we may
adjust the final FDL ratio accordingly.
We invite public comments on the
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
proposed change to the FDL ratio for CY
2019.
3. Home Health Outlier Payments:
Clinical Example
In recent months, concerns regarding
the provision of home health care for
Medicare patients with chronic,
complex conditions have been raised by
stakeholders as well as the
press.16 17 18 19 News stories and
anecdotal reports indicate that Medicare
patients with chronic conditions may be
encountering difficulty in accessing
home health care if the goal of home
health care is to maintain or prevent
further decline of the patient’s condition
rather than improvement of the patient’s
condition. While patients must require
skilled care to be eligible to receive
services under the Medicare home
health benefit, as outlined in regulation
at 42 CFR 409.42(c), we note that
coverage does not turn on the presence
or absence of an individual’s potential
for improvement, but rather on the
beneficiary’s need for skilled care.
Skilled care is covered where such
services are necessary to maintain the
patient’s current condition or prevent or
slow further deterioration so long as the
beneficiary requires skilled care for the
services to be safely and effectively
provided. Additionally, there appears to
be confusion among the HHA provider
community regarding possible Medicare
payment through the HH PPS, as it
appears that some perceive that
payment is somewhat fixed and not able
to account for home health stays with
higher costs.
The news stories referenced an
individual with amyotrophic lateral
sclerosis (ALS), also known as Lou
Gehrig’s disease, and the difficulties
encountered in finding Medicare home
health care. Below we describe a
clinical example of how care for a
patient with ALS could qualify for an
additional outlier payment, which
would serve to offset unusually high
costs associated with providing home
health to a patient with unusual
variations in the amount of medically
necessary care. This example, using
payment policies in place for CY 2018,
is provided for illustrative purposes
only. We hope that in providing the
example below, which illustrates how
HHAs could be paid by Medicare for
providing care to patients with higher
resource use in their homes, and by
reiterating that the patient’s condition
does not need to improve for home
health services to be covered by
Medicare, that there will be a better
understanding of Medicare coverage
policies and how outlier payments
promote access to home health services
for such patients under the HH PPS.
a. Clinical Scenario
Amyotrophic Lateral Sclerosis (ALS)
is a progressive neuromuscular
degenerative disease. The incidence
rates of ALS have been increasing over
the last few decades, and the peak
incidence rate occurs at age 75.20 The
prevalence rate of ALS in the United
States is 4.3 per 100,000 population.21
Half of all people affected with ALS live
at least 3 or more years after diagnosis.
Twenty percent live 5 years or more; up
to 10 percent will live more than 10
years.22 Because of the progressive
nature of this disease, care needs change
and generally intensify as different body
systems are affected. As such, patients
with ALS often require a
multidisciplinary approach to meet
their care needs.
The clinical care of a beneficiary with
ALS typically includes the ongoing
assessment of and treatment for many
impacts to the body systems. As a part
of a home health episode, a skilled
nurse could assess the patient for
shortness of breath, mucus secretions,
sialorrhea, pressure sores, and pain.
From these assessments, the nurse could
speak with the doctor about changes to
the care plan. A nurse’s aide could
provide assistance with bathing,
dressing, toileting, and transferring.
Physical therapy services could also
help the patient with range of motion
exercises, adaptive transfer techniques,
and assistive devices in order to
maintain a level of function.
The following is a description of how
the provision of services per the home
32377
health plan of care could emerge for a
beneficiary with ALS who qualifies for
the Medicare home health benefit. We
note that this example is provided for
illustrative purposes only and does not
constitute a specific Medicare payment
scenario.
b. Example One: Home Health Episodes
1 and 2
A beneficiary with ALS may be
assessed by a physician in the
community and subsequently be
deemed to require home health services
for skilled nursing, physical therapy,
occupational therapy, and a home
health aide. The beneficiary could
receive skilled nursing twice a week for
45 minutes to assess dyspnea when
transferring to a bedside commode,
stage two pressure ulcer at the sacrum,
and pain status. In addition, a home
health aide could provide services for
three hours in the morning and three
hours in the afternoon on Monday,
Wednesday, and Friday and two and a
half hours in the morning and 2.5 hours
in the afternoon on Tuesday and
Thursdays to assist with bathing,
dressing, and transferring. Physical
therapy services twice a week for 45
minutes could be provided for adaptive
transfer techniques, and occupational
therapy services could be supplied
twice a week for 45 minutes for
assessment and teaching of assistive
devices for activities of daily living to
prevent or slow deterioration of the
patient’s condition. Given the patient’s
clinical presentation, for the purpose of
this specific example, we will assign the
patient payment group 40331 (C3F3S1
with 20+ therapy visits).
For the purposes of this example, we
assume that services are rendered per
week for a total of 8 weeks per home
health episode. For both the first and
second home health episodes of care,
the calculation to determine outlier
payment utilizing payment amounts and
case mix weights for CY 2018, as
described in the CY 2018 HH PPS final
rule (82 FR 51676), would be as follows,
per 60-day episode:
TABLE 27—CLINICAL SCENARIO CALCULATION TABLE: EPISODES 1 AND 2
amozie on DSK3GDR082PROD with PROPOSALS2
HH outlier—CY 2018 illustrative values
Value
National, Standardized 60-day Episode Payment Rate ....................................
16 https://www.npr.org/sections/health-shots/
2018/01/17/578423012/home-care-agencies-oftenwrongly-deny-medicare-help-to-the-chronically-ill.
17 http://www.alsa.org/als-care/resources/fyi/
medicare-and-home-health-care.html.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
$3,039.64
Operation
Adjuster
Equals
Output
..................
..................
..................
..................
18 https://patientworthy.com/2018/01/31/
chronically-ill-are-being-denied-medicare-coverageby-home-care-agencies/.
19 https://alsnewstoday.com/2018/05/09/alsmedicare-cover-home-healthcare/.
PO 00000
Frm 00039
Fmt 4701
Sfmt 4702
20 Worms PM, The epidemiology of motor neuron
diseases: A review of recent studies. J Neurol Sci.
2001;191(1–2):3.
21 Mehta P, Prevalence of Amyotrophic Lateral
Sclerosis—United States, 2012–2013. MMWR
Surveill Summ. 2016;65(8):1. Epub 2016 Aug 5.
22 http://www.alsa.org.
E:\FR\FM\12JYP2.SGM
12JYP2
32378
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 27—CLINICAL SCENARIO CALCULATION TABLE: EPISODES 1 AND 2—Continued
HH outlier—CY 2018 illustrative values
Value
Operation
Adjuster
Equals
Output
2.1359
3,039.64
6,492.37
6,492.37
..................
*
*
*
..................
2.1359
0.78535
0.21465
..................
=
¥
=
..................
6,492.37
5,098.78
1,393.59
1.2781
..................
..................
..................
..................
5,098.78
51.66
*
..................
1.2781
..................
=
=
6,516.75
51.66
..................
..................
..................
=
7,962.00
Case-Mix Weight for Payment Group 4.0331 (for C3F3S1 for 20+ therapy ) ..
Case-Mix Adjusted Episode Payment Amount ..................................................
Labor Portion of the Case-Mix Adjusted Episode Payment Amount ................
Non-Labor Portion of the Case-Mix Adjusted Episode Payment Amount ........
Wage Index Value (Beneficiary resides in 31084, Los Angeles-Long BeachGlendale, CA) .................................................................................................
Wage-Adjusted Labor Portion of the Case-Mix Adjusted Episode Payment
Amount ...........................................................................................................
NRS Payment Amount (Severity Level 2) .........................................................
Total Case-Mix and Wage-Adjusted Episode Payment Amount (WageAdjusted Labor Portion plus Non-Labor Portion of the Case-Mix Adjusted Episode Payment Amount plus the NRS Amount) ......................
Total Wage-Adjusted Fixed Dollar Loss Amount:
Fixed Dollar Loss Amount (National, Standardized 60-day Episode Payment Rate * FDL Ratio) ..........................................................................
Labor Portion of the Fixed Dollar Loss Amount .........................................
Non-Labor Amount of the Fixed Dollar Loss Amount ................................
Wage-Adjusted Fixed Dollar Loss Amount ................................................
Total Wage-Adjusted Fixed Dollar Loss Amount (Wage-Adjusted
Labor Portion plus Non-Labor Portion of the Case-Mix Adjusted
Fixed Dollar Loss Amount) ..............................................................
Total Wage-Adjusted Imputed Cost Amount:
National Per-Unit Payment Amount—Skilled Nursing ................................
Number of 15-minute units (45 minutes = 3 units twice per week for 8
weeks) .....................................................................................................
Imputed Skilled Nursing Visit Costs (National Per-Unit Payment Amount
* Number of Units) ..................................................................................
National Per-Unit Payment Amount—Home Health Aide ..........................
Number of 15-minute units (28 hours per week = 112 units per week for
8 weeks) ..................................................................................................
Imputed Home Health Aide Costs (National Per-Unit Payment Amount *
Number of Units) .....................................................................................
National Per-Unit Payment Amount—Occupational Therapy (OT) ............
Number of 15-minute units (45 minutes = 3 units twice per week for 8
weeks) .....................................................................................................
Imputed OT Visit Costs (National Per-Unit Payment Amount * Number of
Units) .......................................................................................................
National Per-Unit Payment Amount—Physical Therapy (PT) ....................
Number of 15-minute units (45 minutes = 3 units twice per week for 8
weeks) .....................................................................................................
Imputed PT Visit Costs (National Per-Unit Payment Amount * Number of
Units) .......................................................................................................
amozie on DSK3GDR082PROD with PROPOSALS2
Total Imputed Cost Amount for all Disciplines ....................................
Labor Portion of the Imputed Costs for All Disciplines ..............................
Non-Labor Portion of Imputed Cost Amount for All Disciplines .................
CBSA Wage Index (Beneficiary resides in 31084, Los Angeles-Long
Beach-Glendale, CA) ..............................................................................
Wage-Adjusted Labor Portion of the Imputed Cost Amount for All Disciplines ....................................................................................................
Total Wage-Adjusted Imputed Cost Amount (Wage-Adjusted Labor
Portion of the Imputed Cost Amount plus Non-Labor Portion of
the Imputed Cost Amount) ...............................................................
Total Payment Per 60-Day Episode:
Outlier Threshold Amount (Total Wage-Adjusted Fixed Dollar Loss
Amount + Total Case-Mix and Wage-Adjusted Episode Payment
Amount) ...................................................................................................
Total Wage-Adjusted Imputed Cost Amount—Outlier Threshold Amount
(Total Wage-Adjusted Fixed Dollar Loss Amount + Total Case-Mix and
Wage-Adjusted Episode Payment Amount) ...........................................
Outlier Payment = Imputed Costs Greater Than the Outlier Threshold *
Loss-Sharing Ratio (0.80) .......................................................................
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00040
Fmt 4701
*
*
*
*
0.55
0.78535
0.21465
1.2781
=
=
=
=
1,671.80
1,312.95
358.85
1,678.08
1,678.08
+
358.85
=
2,036.93
48.01
..................
..................
..................
..................
48
..................
..................
..................
..................
48.01
15.46
*
..................
48
..................
=
..................
2,304.48
..................
896
..................
..................
..................
..................
15.46
50.26
*
..................
896
..................
=
..................
13,852.16
..................
48
..................
..................
..................
..................
50.26
50.46
*
..................
48
..................
=
..................
2,412.48
..................
48
..................
..................
..................
..................
50.46
*
48
=
2,422.08
..................
20,991.20
20,991.20
..................
*
*
..................
0.78535
0.21465
=
=
=
20,991.20
16,485.44
4,505.76
1.2781
..................
..................
..................
..................
16,485.44
*
1.2781
=
21,070.04
21,070.04
+
4,505.76
=
25,575.80
2,036.93
+
7,962.00
=
9,998.93
25,575.80
¥
9,998.93
=
15,576.87
15,576.87
*
0.80
=
12,461.50
7,962.00
+
12,461.50
=
20,423.49
Total Payment Per 60-Day Episode = Total Case-Mix and WageAdjusted Episode Payment Amount + Outlier Payment .................
VerDate Sep<11>2014
3,039.64
1,671.80
1,671.80
1,312.95
Sfmt 4702
E:\FR\FM\12JYP2.SGM
12JYP2
32379
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
For Episodes 1 and 2 of this clinical
scenario, the preceding calculation
illustrates how HHAs are paid by
Medicare for providing care to patients
with higher resource use in their homes.
c. Example Two: Home Health Episodes
3 and 4
ALS is a progressive disease such that
the patient would most likely need care
beyond a second 60-day HH episode. A
beneficiary’s condition could become
more complex, such that the patient
could require a gastrostomy tube, which
could be placed during a hospital stay.
The patient could be discharged to
home for enteral nutrition to maintain
weight and continuing care for his/her
stage two pressure ulcer. Given the
complexity of the beneficiary’s
condition in this example, the episode
could remain at the highest level of care
C3F3S1 and would now fit into
equation 4.
For the purposes of this example, we
assume that services are rendered per
week for a total of 8 weeks per home
health episode. For both the third and
fourth home health episodes of care, the
calculation to determine outlier
payment utilizing payment amounts and
case mix weights for CY 2018 as
described in as described in the CY
2018 HH PPS final rule (82 FR 51676)
would be as follows, per 60-day
episode:
TABLE 28—CLINICAL SCENARIO CALCULATION: EPISODES 3 AND 4
HH outlier—CY 2018 illustrative values
Value
National, Standardized 60-day Episode Payment Rate ....................................
Case-Mix Weight for Payment Group 4.0331 (for C3F3S1 for 20+ therapy) ...
Case-Mix Adjusted Episode Payment Amount ..................................................
Labor Portion of the Case-Mix Adjusted Episode Payment Amount ................
Non-Labor Portion of the Case-Mix Adjusted Episode Payment Amount ........
Wage Index Value (Beneficiary resides in 31084, Los Angeles-Long BeachGlendale, CA) .................................................................................................
Wage-Adjusted Labor Portion of the Case-Mix Adjusted Episode Payment
Amount ...........................................................................................................
NRS Payment Amount (Severity Level 2) .........................................................
Total Case-Mix and Wage-Adjusted Episode Payment Amount (WageAdjusted Labor Portion plus Non-Labor Portion of the Case-Mix Adjusted Episode Payment Amount plus the NRS Amount) ......................
Total Wage-Adjusted Fixed Dollar Loss Amount:
Fixed Dollar Loss Amount (National, Standardized 60-day Episode Payment Rate * FDL Ratio) ..........................................................................
Labor Portion of the Fixed Dollar Loss Amount .........................................
Non-Labor Amount of the Fixed Dollar Loss Amount ................................
Wage-Adjusted Fixed Dollar Loss Amount ................................................
Operation
Adjuster
Equals
Output
$3,039.64
2.1359
3,039.64
6,492.37
6,492.37
..................
..................
*
*
*
..................
..................
2.1359
0.78535
0.21465
..................
..................
=
=
=
..................
..................
$6,492.37
5,098.78
1,393.59
1.2781
..................
..................
..................
..................
5,098.78
324.53
*
..................
1.2781
..................
=
=
6,516.75
324.53
..................
..................
..................
=
8,234.87
amozie on DSK3GDR082PROD with PROPOSALS2
Total Wage-Adjusted Fixed Dollar Loss Amount (Wage-Adjusted
Labor Portion plus Non-Labor Portion of the Case-Mix Adjusted
Fixed Dollar Loss Amount) ..............................................................
Total Wage-Adjusted Imputed Cost Amount:
National Per-Unit Payment Amount—Skilled Nursing ................................
Number of 15-minute units (45 minutes = 3 units twice per week for 8
weeks) .....................................................................................................
Imputed Skilled Nursing Visit Costs (National Per-Unit Payment Amount
* Number of Units) ..................................................................................
National Per-Unit Payment Amount—Home Health Aide ..........................
Number of 15-minute units (28 hours per week = 112 units per week for
8 weeks) ..................................................................................................
Imputed Home Health Aide Costs (National Per-Unit Payment Amount *
Number of Units) .....................................................................................
National Per-Unit Payment Amount—Occupational Therapy (OT) ............
Number of 15-minute units (45 minutes = 3 units twice per week for 8
weeks) .....................................................................................................
Imputed OT Visit Costs (National Per-Unit Payment Amount * Number of
Units) .......................................................................................................
National Per-Unit Payment Amount—Physical Therapy (PT) ....................
Number of 15-minute units (45 minutes = 3 units twice per week for 8
weeks) .....................................................................................................
Imputed PT Visit Costs (National Per-Unit Payment Amount * Number of
Units) .......................................................................................................
Total Imputed Cost Amount for all Disciplines ....................................
Labor Portion of the Imputed Costs for All Disciplines ..............................
Non-Labor Portion of Imputed Cost Amount for All Disciplines .................
CBSA Wage Index (Beneficiary resides in 31084, Los Angeles-Long
Beach-Glendale, CA) ..............................................................................
Wage-Adjusted Labor Portion of the Imputed Cost Amount for All Disciplines ....................................................................................................
Total Wage-Adjusted Imputed Cost Amount (Wage-Adjusted Labor
Portion of the Imputed Cost Amount plus Non-Labor Portion of
the Imputed Cost Amount) ...............................................................
Total Payment Per 60-Day Episode:
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00041
Fmt 4701
3,039.64
1,671.80
1,671.80
1,312.95
*
*
*
*
0.55
0.78535
0.21465
1.2781
=
=
=
=
1,671.80
1,312.95
358.85
1,678.08
1,678.08
+
358.85
=
2,036.93
48.01
..................
..................
..................
..................
48
..................
..................
..................
..................
48.01
15.46
*
..................
48
..................
=
..................
2,304.48
..................
896
..................
..................
..................
..................
15.46
50.26
*
..................
896
..................
=
..................
13,852.16
..................
48
..................
..................
..................
..................
50.26
50.46
*
..................
48
..................
=
..................
2,412.48
..................
48
..................
..................
..................
..................
50.46
*
48
=
2,422.08
..................
20,991.20
20,991.20
..................
*
*
..................
0.78535
0.21465
=
=
=
20,991.20
16,485.44
4,505.76
1.2781
..................
..................
..................
..................
16,485.44
*
1.2781
=
21,070.04
21,070.04
+
4,505.76
=
25,575.80
Sfmt 4702
E:\FR\FM\12JYP2.SGM
12JYP2
32380
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 28—CLINICAL SCENARIO CALCULATION: EPISODES 3 AND 4—Continued
HH outlier—CY 2018 illustrative values
Value
Outlier Threshold Amount (Total Wage-Adjusted Fixed Dollar Loss
Amount + Total Case-Mix and Wage-Adjusted Episode Payment
Amount) ...................................................................................................
Total Wage-Adjusted Imputed Cost Amount¥Outlier Threshold Amount
(Total Wage-Adjusted Fixed Dollar Loss Amount + Total Case-Mix and
Wage-Adjusted Episode Payment Amount) ...........................................
Outlier Payment = Imputed Costs Greater Than the Outlier Threshold *
Loss-Sharing Ratio (0.80) .......................................................................
Total Payment Per 60-Day Episode = Total Case-Mix and WageAdjusted Episode Payment Amount + Outlier Payment .................
For Episodes 3 and 4 of this clinical
scenario, the above calculation
demonstrates how outlier payments
could be made for patients with chronic,
complex conditions under the HH PPS.
We reiterate that outlier payments could
provide payment to HHAs for those
patients with higher resource use and
that the patient’s condition does not
need to improve for home health
services to be covered by Medicare. We
appreciate the feedback we have
received from the public on the outlier
policy under the HH PPS and look
forward to ongoing collaboration with
stakeholders on any further refinements
that may be warranted. We note that this
example is presented for illustrative
purposes only, and is not intended to
suggest that all diagnoses of ALS should
receive the grouping assignment or
number of episodes described here. The
CMS Grouper assigns these groups
based on information in the OASIS.
F. Implementation of the Patient-Driven
Groupings Model (PDGM) for CY 2020
amozie on DSK3GDR082PROD with PROPOSALS2
1. Background and Legislation,
Overview, Data, and File Construction
a. Background and Legislation
In the CY 2018 HH PPS proposed
rule, we proposed an alternative case
mix-adjustment methodology (known as
the Home Health Groupings Model or
HHGM), to be implemented for home
health periods of care beginning on or
after January 1, 2019. Ultimately this
proposed alternative case-mix
adjustment methodology, including a
proposed change in the unit of payment
from 60 days to 30 days, was not
finalized in the CY 2018 HH PPS final
rule in order to allow us additional time
to consider public comments for
potential refinements to the
methodology (82 FR 51676).
On February 9, 2018, the Bipartisan
Budget Act of 2018 (BBA of 2018) (Pub.
L. 115–123) was signed into law.
Section 51001(a)(1) of the BBA of 2018
amended section 1895(b)(2) of the Act
by adding a new subparagraph (B) to
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
Operation
Frm 00042
Fmt 4701
Equals
Output
2,036.93
+
8,234.87
=
10,271.80
25,575.80
¥
10,271.80
=
15,304.00
15,304.00
*
0.80
=
12,243.20
12,243.20
+
8,234.87
=
20,478.07
require the Secretary to apply a 30-day
unit of service for purposes of
implementing the HH PPS, effective
January 1, 2020. Section 51001(a)(2)(A)
of the BBA of 2018 added a new
subclause (iv) under section
1895(b)(3)(A) of the Act, requiring the
Secretary to calculate a standard
prospective payment amount (or
amounts) for 30-day units of service that
end during the 12-month period
beginning January 1, 2020 in a budget
neutral manner such that estimated
aggregate expenditures under the HH
PPS during CY 2020 are equal to the
estimated aggregate expenditures that
otherwise would have been made under
the HH PPS during CY 2020 in the
absence of the change to a 30-day unit
of service. Section 1895(b)(3)(A)(iv) of
the Act requires that the calculation of
the standard prospective payment
amount (or amounts) for CY 2020 be
made before, and not affect the
application of, the provisions of section
1895(b)(3)(B) of the Act. Section
1895(b)(3)(A)(iv) of the Act additionally
requires that in calculating the standard
prospective payment amount (or
amounts), the Secretary must make
assumptions about behavioral changes
that could occur as a result of the
implementation of the 30-day unit of
service under section 1895(b)(2)(B) of
the Act and case-mix adjustment factors
established under section 1895(b)(4)(B)
of the Act. Section 1895(b)(3)(A)(iv) of
the Act further requires the Secretary to
provide a description of the behavioral
assumptions made in notice and
comment rulemaking.
Section 51001(a)(2)(B) of the BBA of
2018 also added a new subparagraph (D)
to section 1895(b)(3) of the Act. Section
1895(b)(3)(D)(i) of the Act requires the
Secretary to annually determine the
impact of differences between assumed
behavior changes as described in section
1895(b)(3)(A)(iv) of the Act, and actual
behavior changes on estimated aggregate
expenditures under the HH PPS with
respect to years beginning with 2020
PO 00000
Adjuster
Sfmt 4702
and ending with 2026. Section
1895(b)(3)(D)(ii) of the Act requires the
Secretary, at a time and in a manner
determined appropriate, through notice
and comment rulemaking, provide for
one or more permanent increases or
decreases to the standard prospective
payment amount (or amounts) for
applicable years, on a prospective basis,
to offset for such increases or decreases
in estimated aggregate expenditures, as
determined under section
1895(b)(3)(D)(i) of the Act. Additionally,
1895(b)(3)(D)(iii) of the Act requires the
Secretary, at a time and in a manner
determined appropriate, through notice
and comment rulemaking, to provide for
one or more temporary increases or
decreases to the payment amount for a
unit of home health services for
applicable years, on a prospective basis,
to offset for such increases or decreases
in estimated aggregate expenditures, as
determined under section
1895(b)(3)(D)(i) of the Act. Such a
temporary increase or decrease shall
apply only with respect to the year for
which such temporary increase or
decrease is made, and the Secretary
shall not take into account such a
temporary increase or decrease in
computing the payment amount for a
unit of home health services for a
subsequent year.
Section 51001(a)(3) of the BBA of
2018 amends section 1895(b)(4)(B) of
the Act by adding a new clause (ii) to
require the Secretary to eliminate the
use of therapy thresholds in the casemix system for 2020 and subsequent
years. Lastly, section 51001(b)(4) of the
BBA of 2018 requires the Secretary to
pursue notice and comment rulemaking
no later than December 31, 2019 on a
revised case-mix system for payment of
home health services under the HH PPS
b. Overview
To meet the requirement under
section 51001(b)(4) of the BBA of 2018
to engage in notice and comment
rulemaking on a HH PPS case-mix
system and to better align payment with
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
patient care needs and better ensure that
clinically complex and ill beneficiaries
have adequate access to home health
care, we are proposing case-mix
methodology refinements through the
implementation of the Patient-Driven
Groupings Model (PDGM). The
proposed PDGM shares many of the
features included in the alternative case
mix-adjustment methodology proposed
in the CY 2018 HH PPS proposed rule.
We propose to implement the PDGM for
home health periods of care beginning
on or after January 1, 2020. The
implementation of the PDGM will
require provider education and training,
updating and revising relevant manuals,
and changing claims processing
systems. Implementation starting in CY
2020 would provide opportunity for
CMS, its contractors, and the agencies
themselves to prepare. This patientcentered model groups periods of care
in a manner consistent with how
clinicians differentiate between patients
and the primary reason for needing
home health care. As required by
section 1895(b)(2)(B) of the Act, we
propose to use 30-day periods rather
than the 60-day episode used in the
current payment system. In addition,
section 1895(b)(4)(B)(ii) of the Act
eliminates the use of therapy thresholds
in the case-mix adjustment for
determining payment. The proposed
PDGM does not use the number of
therapy visits in determining payment.
The change from the current case-mix
adjustment methodology for the HH
PPS, which relies heavily on therapy
thresholds as a major determinant for
payment and thus provides a higher
payment for a higher volume of therapy
provided, to the PDGM would remove
the financial incentive to overprovide
therapy in order to receive a higher
payment. The PDGM would base casemix adjustment for home health
payment solely on patient
characteristics, a more patient-focused
approach to payment. Finally, the
PDGM relies more heavily on clinical
characteristics and other patient
information (for example, diagnosis,
functional level, comorbid conditions,
admission source) to place patients into
clinically meaningful payment
categories. In total, there are 216
different payment groups in the PDGM.
Costs during an episode/period of
care are estimated based on the concept
of resource use, which measures the
costs associated with visits performed
during a home health episode/period.
For the current HH PPS case-mix
weights, we use Wage Weighted
Minutes of Care (WWMC), which uses
data from the Bureau of Labor Statistics
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
(BLS) reflecting the Home Health Care
Service Industry. For the PDGM, we
propose shifting to a Cost-Per-Minute
plus Non-Routine Supplies (CPM +
NRS) approach, which uses information
from the Medicare Cost Report. The
CPM + NRS approach incorporates a
wider variety of costs (such as
transportation) compared to the BLS
estimates and the costs are available for
individual HHA providers while the
BLS costs are aggregated for the Home
Health Care Service industry.
Similar to the current payment
system, 30-day periods under the PDGM
would be classified as ‘‘early’’ or ‘‘late’’
depending on when they occur within
a sequence of 30-day periods. Under the
current HH PPS, the first two 60-day
episodes of a sequence of adjacent 60day episodes are considered early, while
the third 60-day episode of that
sequence and any subsequent episodes
are considered late. Under the PDGM,
the first 30-day period is classified as
early. All subsequent 30-day periods in
the sequence (second or later) are
classified as late. We propose to adopt
this timing classification for 30-day
periods with the implementation of the
PDGM for CY 2020. Similar to the
current payment system, we propose
that a 30-day period could not be
considered early unless there was a gap
of more than 60 days between the end
of one period and the start of another.
The comprehensive assessment would
still be completed within 5 days of the
start of care date and completed no less
frequently than during the last 5 days of
every 60 days beginning with the start
of care date, as currently required by
§ 484.55, Condition of participation:
Comprehensive assessment of patients.
In addition, the plan of care would still
be reviewed and revised by the HHA
and the physician responsible for the
home health plan of care no less
frequently than once every 60 days,
beginning with the start of care date, as
currently required by § 484.60(c),
Condition of participation: Care
planning, coordination of services, and
quality of care.
Under the PDGM, we propose that
each period would be classified into one
of two admission source categories
—community or institutional—
depending on what healthcare setting
was utilized in the 14 days prior to
home health. The 30-day period would
be categorized as institutional if an
acute or post-acute care stay occurred in
the 14 days prior to the start of the 30day period of care. The 30-day period
would be categorized as community if
there was no acute or post-acute care
stay in the 14 days prior to the start of
the 30-day period of care.
PO 00000
Frm 00043
Fmt 4701
Sfmt 4702
32381
The PDGM would group 30-day
periods into categories based on a
variety of patient characteristics. We
propose grouping periods into one of six
clinical groups based on the principal
diagnosis. The principal diagnosis
reported would provide information to
describe the primary reason for which
patients are receiving home health
services under the Medicare home
health benefit. The proposed six clinical
groups, are as follows:
• Musculoskeletal Rehabilitation.
• Neuro/Stroke Rehabilitation.
• Wounds—Post-Op Wound
Aftercare and Skin/Non-Surgical
Wound Care.
• Complex Nursing Interventions.
• Behavioral Health Care (including
Substance Use Disorders).
• Medication Management, Teaching
and Assessment (MMTA).
Under the PDGM, we propose that
each 30-day period would be placed
into one of three functional levels. The
level would indicate if, on average,
given its responses on certain functional
OASIS items, a 30-day period is
predicted to have higher costs or lower
costs. We are proposing to assign
roughly 33 percent of periods within
each clinical group to each functional
level. The criteria for assignment to each
of the three functional levels may differ
across each clinical group. The
proposed functional level assignment
under the PDGM is very similar to the
functional level assignment in the
current payment system. Finally, the
PDGM includes a comorbidity
adjustment category based on the
presence of secondary diagnoses. We
propose that, depending on a patient’s
secondary diagnoses, a 30-day period
may receive ‘‘no’’ comorbidity
adjustment, a ‘‘low’’ comorbidity
adjustment, or a ‘‘high’’ comorbidity
adjustment. For low-utilization payment
adjustments (LUPAs) under the PDGM,
we propose that the LUPA threshold
would vary for a 30-day period under
the PDGM depending on the PDGM
payment group to which it is assigned.
For each payment group, we propose to
use the 10th percentile value of visits to
create a payment group specific LUPA
threshold with a minimum threshold of
at least 2 for each group.
Figure BBB1 represents how each 30day period of care would be placed into
one of the 216 home health resource
groups (HHRGs) under the proposed
PDGM for CY 2020.
BILLING CODE 4210–01–P
E:\FR\FM\12JYP2.SGM
12JYP2
32382
BILLING CODE 4210–01–C
amozie on DSK3GDR082PROD with PROPOSALS2
c. Data and File Construction
To create the PDGM proposed model
and related analyses, a data file based
on home health episodes of care as
reported in Medicare home health
claims was utilized. The claims data
provide episode-level data (for example,
episode From and Through Dates, total
number of visits, HHRG, diagnoses), as
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
well as visit-level data (visit date, visit
length in 15-minute units, discipline of
the staff, etc.). The claims also provide
data on whether NRS was provided
during the episode and total charges for
NRS.
The core file for most of the analyses
for this proposed rule includes 100
percent of home health episode claims
with Through Dates in Calendar Year
(CY) 2017, processed by March 2, 2018,
PO 00000
Frm 00044
Fmt 4701
Sfmt 4702
accessed via the Chronic Conditions
Data Warehouse (CCW). Original or
adjustment claims processed after
March 2, 2018, would not be reflected
in the core file. The claims-based file
was supplemented with additional
variables that were obtained from the
CCW, such as information regarding
other Part A and Part B utilization.
The data were cleaned by processing
any remaining adjustments and by
E:\FR\FM\12JYP2.SGM
12JYP2
EP12JY18.003
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
32383
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
excluding duplicates and claims that
were Requests for Anticipated Payment
(RAP). In addition, visit-level variables
needed for the analysis were extracted
from the revenue center trailers (that is,
the line items that describe the visits)
and downloaded as a separate visit-level
file, with selected episode-level
variables merged onto the records for
visits during those episodes. To account
for potential data entry errors, the visitlevel variables for visit length were topcensored at 8 hours.23
A set of data cleaning exclusions were
applied to the episode-level file, which
resulted in the exclusion of the
following:
• Episodes that were RAPs.
• Episodes with no covered visits.
• Episodes with any missing units or
visit data.
• Episodes with zero payments.
• Episodes with no charges.
• Non-LUPA episodes missing an
HHRG.
The analysis file also includes data on
patient characteristics obtained from the
OASIS assessments conducted by home
health agency (HHA) staff at the start of
each episode. The assessment data are
electronically submitted by HHAs to a
central CMS repository. In constructing
the core data file, 100 percent of the
OASIS assessments submitted October
2016 through December 2017 from the
CMS repository were uploaded by CMS
to the CCW. A CCW-derived linking key
(Bene ID) was used to match the OASIS
data with CY 2017 episodes of care.
Episodes that could not be linked with
an OASIS assessment were excluded
from the analysis file, as they included
insufficient patient-level data to create
the PDGM.
To construct measures of resource
use, a variety of data sources were used
(see section III.F.2 of this proposed rule
for the proposed methodology used to
calculate the cost of care under the
PDGM). First, BLS data on average
wages and fringe benefits were used to
produce wage-weighted minutes of care
(WWMC), the approach used in the
current system to calculate the cost of
care. The wage data are for North
American Industry Classification
System (NAICS) 621600—Home Health
Care Services (see Table 29).
TABLE 29—BLS STANDARD OCCUPATION CLASSIFICATION (SOC) CODES
FOR HOME HEALTH PROVIDERS—
Continued
Standard
Occupation
Code (SOC) No.
29–1127 ................
21–1022 ................
21–1023 ................
31–1011 ................
Occupation
title
Speech-Language Pathologists.
Medical and Public Health Social Workers.
Mental Health and Substance
Abuse Social Workers.
Home Health Aides.
The WWMC approach determines
resource use for each episode by
multiplying utilization (in terms of the
number of minutes of direct patient care
provided by each discipline) by the
corresponding opportunity cost of that
care (represented by wage and fringe
TABLE 29—BLS STANDARD OCCUPA- benefit rates from the BLS).24 Table 30
TION CLASSIFICATION (SOC) CODES shows the occupational titles and
corresponding mean hourly wage rates
FOR HOME HEALTH PROVIDERS
from the BLS. The employer cost per
hour worked shown in the fifth column
Standard
Occupation
Occupation
is calculated by adding together the
title
Code (SOC) No.
mean hourly wage rates and the fringe
29–1141 ................ Registered Nurses.
benefit rates from the BLS. For home
29–2061 ................ Licensed Practical and Lihealth disciplines that include multiple
censed Vocational Nurses.
occupations (such as skilled nursing),
29–1123 ................ Physical Therapists.
the opportunity cost is generated by
31–2021 ................ Physical Therapist Assistants.
31–2022 ................ Physical Therapist Aides.
weighting the employer cost by the
29–1122 ................ Occupational Therapists.
proportions of the labor mix.25
31–2011 ................ Occupational Therapist AssistOtherwise,
the opportunity cost is the
ants.
same as the employer cost per hour.
31–2012 ................ Occupational Therapist Aides.
TABLE 30—OCCUPATIONAL EMPLOYMENT AND WAGES PROVIDED BY THE FEDERAL BUREAU OF LABOR STATISTICS
amozie on DSK3GDR082PROD with PROPOSALS2
Occupation title
Registered Nurses ..............
Licensed Practical and Licensed Vocational Nurses.
Physical Therapists .............
Physical Therapist Assistants.
Occupational Therapists .....
Occupational Therapist Assistants.
Speech-Language Pathologists.
Medical and Public Health
Social Workers.
Mental Health and Substance Abuse Social
Workers.
Home Health Aides .............
National
employment
counts
Mean
hourly
wage
Estimate
of benefits
as
a % of
wages
Estimated
employer
cost
per hour
worked
Labor
mix
Home health discipline
Opportunity
cost
179,280
85,410
$33.34
22.03
43.85
43.85
$47.96
31.69
0.66
0.34
Skilled Nursing ...................
$42.42
24,810
7,330
47.23
31.43
40.92
35.79
66.55
42.68
0.66
0.34
Physical Therapy ................
58.55
10,760
2,270
45.27
33.83
40.92
35.79
63.79
45.94
0.79
0.21
Occupational Therapy ........
59.97
5,360
47.08
40.92
66.34
............
Speech Therapy .................
66.34
18,930
28.76
40.92
40.53
0.97
Medical Social Service .......
40.42
500
25.85
40.92
36.43
0.03
408,920
11.25
35.79
15.28
............
Home Health Aide ..............
15.28
Source: May 2016 National Industry-Specific Occupational Employment and Wage Estimates—NAICS 621600—Home Health Care Services.
23 Less than 0.1 percent of all visits were recorded
as having greater than 8 hours of service.
24 Opportunity costs represent the foregone
resources from providing each minute of care
versus using the resources for another purpose (the
next best alternative). Generally, opportunity costs
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
represent more than the monetary costs, but in
these analyses, they are proxied using hourly wage
rates.
25 Labor mix represents the percentage of
employees with a particular occupational title (as
obtained from claims) within a home health
PO 00000
Frm 00045
Fmt 4701
Sfmt 4702
discipline. Physical therapist aides and
occupational therapist aides were not included in
the labor mix.
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32384
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
Home Health Agency Medicare Cost
Report (MCR) data for FY 2016 were
also used to construct a measure of
resource use after trimming out HHAs
whose costs were outliers (see section
III.F.2 of this proposed rule). These data
are used to provide a representation of
the average costs of visits provided by
HHAs in the six Medicare home health
disciplines: Skilled nursing; physical
therapy; occupational therapy; speechlanguage pathology; medical social
services; and home health aide services.
Cost report data are publicly available
at: https://www.cms.gov/ResearchStatistics-Data-and-Systems/
Downloadable-Public-Use-Files/CostReports/. More details regarding how
HHA MCR data were used in
constructing the CPM+NRS measure of
resource use can be found in section
III.F.2 of this proposed rule.
A comment submitted in response to
the CY 2018 HH PPS proposed rule
questioned the trimming process for the
Medicare cost report data used to
calculate the cost-per-minute plus nonroutine supplies (CPM+NRS)
methodology used to estimate resource
use (outlined in section III.F.2 of this
rule). The commenter stated that for
rebasing, CMS audited 100 cost reports
and the findings of such audits found
that costs were overstated by 8 percent
and that finding was attributed to the
entire population of HHA Medicare cost
reports. The commenter questioned if
CMS applied the 8 percent ‘‘adjustment
factor’’ in last year’s proposed rule,
requested CMS provide the number of
cost reports used for the proposed rule,
asked if only cost reports of freestanding
HHAs were used, and requested that
CMS describe what percentage of cost
reports did not list any costs for NRS,
yet listed NRS charges.
For the calculations in the CY 2018
HH PPS proposed rule, CMS applied the
trimming methodology described in
detail in the ‘‘Analyses in Support of
Rebasing & Updating Medicare Home
Health Payment Rates’’ Report available
at: https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
HomeHealthPPS/Downloads/Analysesin-Support-of-Rebasing-and-Updatingthe-Medicare-Home-Health-PaymentRates-Technical-Report.pdf. This is also
the trimming methodology outlined in
the CY 2014 HH PPS proposed rule (78
FR 40284). Of note, for each discipline
and for NRS, we also followed the
methodology laid out in the ‘‘Rebasing
Report’’ by trimming out values that fell
in the top or bottom 1 percent of the
distribution across all HHAs. This
included the cost-per-visit values for
each discipline and NRS cost-to-charge
ratios that fell in the top or bottom 1
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
percent of the distribution across all
HHAs. For this proposed rule, we
applied the same trimming
methodology.
We included both freestanding and
facility-based HHA Medicare cost report
data in our rebasing calculations as
outlined in the CY 2014 HH PPS
proposed and final rules and in our
analysis of FY 2015 HHA Medicare cost
report data for the CY 2018 HH PPS
proposed rule. We similarly included
both freestanding and facility-based
HHA Medicare cost report data in our
analysis of FY 2016 cost report data for
this proposed rule. We note that
although we found an 8 percent
overstatement of costs from the
Medicare cost reports audits performed
to support the rebasing adjustments, we
did not apply an 8 percent adjustment
to HHA costs in the CY 2014 HH PPS
proposed or final rules. We also did not
apply an 8 percent adjustment to the
costs in the CY 2018 HH PPS proposed
rule or in this proposed rule. The 8
percent overstatement was determined
using a small sample size of HHA
Medicare cost reports and the CY 2014
HH PPS proposed rule included this
information as illustrative only. The
information was not used in any cost
calculations past or present.
Before trimming, there were 10,394
cost reports for FY 2016. In this
proposed rule, we used 7,458 cost
reports. Of the 7,458 cost reports, 5,447
(73.4 percent) had both NRS charges
and costs, 1,672 (22.4 percent) had
neither NRS charges or costs, and 339
(4.5 percent) had NRS charges but no
NRS costs. There were no cost reports
with NRS costs, but no NRS charges.
The initial 2017 analytic file included
6,771,059 episodes. Of these, 959,410
(14.2 percent) were excluded because
they could not be linked to OASIS
assessments or because of the claims
data cleaning process reasons listed
above. This yielded a final analytic file
that included 5,811,649 episodes. Those
episodes are 60-day episodes under the
current payment system, but for the
PDGM those 60-day episodes were
converted into two 30-day periods. This
yielded a final PDGM analytic file that
included 10,160,226, 30-day periods.
Certain 30-day periods were excluded
for the following reasons:
• Inability to merge to certain OASIS
items to create the episode’s functional
level that is used for risk adjustment.
For all the periods in the analytic file,
there was a look-back through CY 2016
for a period with a Start of Care or
Resumption of Care assessment that
preceded the period being analyzed and
was in the same sequence of periods. If
such an assessment was found, it was
PO 00000
Frm 00046
Fmt 4701
Sfmt 4702
used to impute responses for OASIS
items that were not included in the
follow-up assessment. Periods that were
linked to a follow-up assessment which
did not link to a Start of Care or
Resumption of Care assessment using
the process described above were
dropped (after exclusions, n =
9,471,529).
• No nursing visits or therapy visits
(after exclusions, n = 9,287,622).
• LUPAs were excluded from the
analysis. Periods that are identified as
LUPAs in the current payment system
were excluded in the creation of the
functional score. Following the creation
of the score (and the corresponding
levels), case-mix group specific LUPA
thresholds were created and episodes/
periods were excluded that were below
the new LUPA threshold when
computing the case-mix weights.26
Therefore, the final analytic sample
included 8,624,776 30-day periods that
were used for the analyses in the PDGM.
In response to the CY 2018 HH PPS
proposed rule, we received many
comments stating there was limited
involvement with the industry in the
development of the alternative case-mix
adjustment methodology. Commenters
also stated that they were unable to
obtain the necessary data in order to
replicate and model the effects on their
business. We note that, through notice
and comment rulemaking and other
processes, stakeholders always have the
opportunity to reach out to CMS and
provide suggestions for improvement in
the payment methodology under the HH
PPS. In the CY 2014 HH PPS final rule,
we noted that we were continuing to
work on improvements to our case-mix
adjustment methodology and welcomed
suggestions for improving the case-mix
adjustment methodology as we
continued in our case-mix research (78
FR 72287). The analyses and the
ultimate development of an alternative
case-mix adjustment methodology was
shared with stakeholders via technical
expert panels, clinical workgroups, and
special open door forums. We also
provided high-level summaries on our
case-mix methodology refinement work
in the HH PPS proposed rules for CYs
2016 and 2017 (80 FR 39839, and 81 FR
76702). A detailed technical report was
posted on the CMS website in December
of 2016, additional technical expert
panel and clinical workgroup webinars
were held after the posting of the
technical report, and a National
Provider call occurred in January 2017
26 The case-mix group specific LUPA thresholds
were determined using episodes that were
considered LUPAs under the current payment
system.
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
to further solicit feedback from
stakeholders and the general public.27 28
As noted above, the CY 2018 HH PPS
proposed rule further solicited
comments on an alternative case-mix
adjustment methodology. Ultimately the
proposed alternative case-mix
adjustment methodology, including a
proposed change in the unit of payment
from 60 days to 30 days, was not
finalized in the CY 2018 HH PPS final
rule in order to allow CMS additional
time to consider public comments for
potential refinements to the model (82
FR 51676).
On February 1, 2018, CMS convened
another TEP, to gather perspectives and
identify and prioritize recommendations
from industry leaders, clinicians,
patient representatives, and researchers
with experience with home health care
and/or experience in home health
agency management regarding the casemix adjustment methodology
refinements described in the CY 2018
HH PPS proposed rule (82 FR 35270),
and alternative case-mix models
submitted during 2017 as comments to
the CY 2018 HH PPS proposed rule.
During the TEP, there was a description
and solicitation of feedback on the
components of the proposed case-mix
methodology refinement, such as
resource use, 30-day periods, clinical
groups, functional levels, comorbidity
groups, and other variables used to
group periods into respective case-mix
groups. Also discussed were the
comments received from the CY 2018
HH PPS proposed rule, the creation of
case-mix weights, and an open
discussion to solicit feedback and
recommendations for next steps. This
TEP satisfied the requirement set forth
in section 51001(b)(1) of the BBA of
2018, which requires that at least one
session of such a TEP be held between
January 1, 2018 and December 31, 2018.
Lastly, section 51001(b)(3) of the BBA of
2018 requires the Secretary to issue a
report to the Committee on Ways and
Means and Committee on Energy and
Commerce of the House of
Representatives and the Committee on
27 Abt Associates. ‘‘Overview of the Home Health
Groupings Model.’’ Medicare Home Health
Prospective Payment System: Case-Mix
Methodology Refinements. Cambridge, MA,
November 18, 2016. Available at https://
downloads.cms.gov/files/hhgm%20technical%20
report%20120516%20sxf.pdf.
28 Centers for Medicare & Medicaid Services
(CMS). ‘‘Certifying Patients for the Medicare Home
Health Benefit.’’ MLN ConnectsTM National
Provider Call. Baltimore, MD, December 16, 2016.
Slides, examples, audio recording and transcript
available at https://www.cms.gov/Outreach-andEducation/Outreach/NPC/National-Provider-Callsand-Events-Items/2017-01-18-HomeHealth.html?DLPage=2&DLEntries=10&DLSort=0&
DLSortDir=descending.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
32385
Finance of the Senate on the
recommendations from the TEP
members, no later than April 1, 2019.
This report is available on the CMS
HHA Center web page at: https://
www.cms.gov/center/provider-Type/
home-Health-Agency-HHA-Center.html
and satisfies the requirement of section
51001(b)(3) of the BBA of 2018.
Finally, with respect to comments
regarding the availability of data to
replicate and model the effects of the
PDGM on HHAs, we note that generally
the data needed to replicate and model
the effects of the proposed PDGM are
available by request through the CMS
Data Request Center.29 Although claims
data for home health are available on a
quarterly and annual basis as Limited
Data Set (LDS) files and Research
Identifiable Files (RIFs); we note that
assessment data (OASIS) are not
available as LDS files through the CMS
Data Request Center. While CMS is able
to provide LDS files in a more expedited
manner, it may take several months for
CMS to provide RIFs. Therefore, we will
provide upon request a Home Health
Claims-OASIS LDS file to accompany
the CY 2019 HH PPS proposed and final
rules. We believe that in making a Home
Health Claims-OASIS LDS file available
upon request in conjunction with the
CY 2019 HH PPS proposed and final
rules, this would address concerns from
stakeholders regarding data access and
transparency in annual ratesetting.
The Home Health Claims-OASIS LDS
file can be requested by following the
instructions on the following CMS
website: https://www.cms.gov/ResearchStatistics-Data-and-Systems/Files-forOrder/Data-Disclosures-DataAgreements/DUA_-_NewLDS.html and a
file layout will be available. This file
will contain information from claims
data matched with assessment data for
CY 2017, both obtained from the
Chronic Conditions Data Warehouse
(CCW), and each observation in the file
will represent a 30-day period of care
with variables created that provide
information corresponding to both the
30-day period of care and the 60-day
episode of care. The file will also
contain variables that show the case-mix
group that a particular claim would be
grouped into under both the new PDGM
case-mix methodology and the current
case-mix adjustment methodology as
well as variables for all the assessment
items used for grouping the claim into
its appropriate case-mix group under
the PDGM and variables used for
calculating resource use. Because this
Home Health Claims-OASIS LDS file
includes variables used for calculating
resource use, this file will also include
publically available data from home
health cost reports and the BLS. Some
of the cost data in this file is trimmed
and imputed before being used as
outlined above. We note that much of
the content of the Home Health ClaimsOASIS LDS file will be derived from
CMS data sources. That is, many
elements of claims or elements of
OASIS will not be copied to the LDS file
as is. For example, we will have
variables in the data files that will
record the aggregated number of visits
and minutes of service by discipline
type. We will need to create those
aggregates from the line item data
available on the claims data. Because we
will be taking data from different
sources (claims, OASIS, and cost
reports/BLS), we will match the data
across those sources. Information from
claims and costs reports will be linked
using the CCN. OASIS assessment data
will be linked to those sources using
information available both on the claim
and OASIS. As noted earlier in this
section, any episodes that could not be
linked with an OASIS assessment were
excluded from the analysis file, as they
included insufficient patient-level data
to re-group such episodes into one of
the 216 case-mix groups under the
PDGM.
In addition, similar to the CY 2018
HH PPS proposed rule, we will again
provide a PDGM Grouper Tool in
conjunction with this proposed rule on
CMS’ HHA Center web page to allow
HHAs to replicate the PDGM
methodology using their own internal
data.30 In addition, in conjunction with
this proposed rule, we will post a file on
the HHA Center web page that contains
estimated Home Health Agency-level
impacts as a result of the proposed
PDGM.
29 https://www.resdac.org/cms-data/request/cmsdata-request-center.
30 https://www.cms.gov/center/provider-Type/
home-Health-Agency-HHA-Center.html.
PO 00000
Frm 00047
Fmt 4701
Sfmt 4702
2. Methodology Used To Calculate the
Cost of Care
To construct the case-mix weights for
the PDGM proposal, the costs of
providing care needed to be determined.
A Wage-Weighted Minutes of Care
(WWMC) approach is used in the
current payment system based on data
from the BLS. However, we are
proposing to adopt a Cost-per-Minute
plus Non-Routine Supplies (CPM +
NRS) approach, which uses information
from HHA Medicare Cost Reports and
Home Health Claims.
• Home Health Medicare Cost Report
Data: All Medicare-certified HHAs must
report their own costs through publicly-
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32386
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
available home health cost reports
maintained by the Healthcare Cost
Report Information System (HCRIS).
Freestanding HHAs report using a HHAspecific cost report while HHAs that are
hospital-based report using the HHA
component of the hospital cost reports.
These cost reports enable estimation of
the cost per visit by provider and the
estimated NRS cost to charge ratios. To
obtain a more robust estimate of cost, a
trimming process was applied to remove
cost reports with missing or
questionable data and extreme values.31
• Home Health Claims Data:
Medicare home health claims data are
used in both the previous WWMC
approach and in the CPM+NRS method
to obtain minutes of care by discipline
of care.
Under the proposed PDGM, we group
30-day periods of care into their casemix groups taking into account
admission source, timing, clinical
group, functional level, and comorbidity
adjustment. From there, the average
resource use for each case-mix group
dictates the group’s case-mix weight.
We propose that resource use be
estimated with the cost of visits
recorded on the home health claim plus
the cost of NRS recorded on the claims.
The cost of NRS is generated by taking
NRS charges on claims and converting
them to costs using a NRS cost to charge
ratio that is specific to each HHA. NRS
costs are then added to the resource use
estimates. That overall resource use
estimate is then used to establish the
case-mix weights. Similar to the current
system, NRS would still be paid
prospectively under the PDGM, but the
PDGM eliminates the separate case-mix
adjustment model for NRS.
Under the proposed alternative casemix methodology discussed in the CY
2018 HH PPS proposed rule, we
proposed to calculate resource use using
the CPM+NRS approach (82 FR 35270).
In response to the CY 2018 HH PPS
proposed rule, several commenters
expressed support for the proposed
change to the CPM+NRS methodology
used to measure resource use, noting
that such an approach incorporates a
wider variety of costs (such as
transportation) compared to the current
WWMC approach. Alternatively, other
commenters responding to last year’s
proposed rule objected to using
31 The trimming methodology is described in the
report ‘‘Analyses in Support of Rebasing &
Updating Medicare Home Health Payment Rates’’
(Morefield, Christian, and Goldberg 2013). See
https://www.cms.gov/Medicare/Medicare-Fee-forService-Payment/HomeHealthPPS/Downloads/
Analyses-in-Support-of-Rebasing-and-Updatingthe-Medicare-Home-Health-Payment-RatesTechnical-Report.pdf.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
Medicare cost report data rather than
Wage-Weighted Minutes of Care
(WWMC) to calculate resource use. The
commenters indicated that the strength
and utility of period-specific cost
depends on the accuracy and
consistency of agencies’ reported
charges, cost-to-charge ratios, and
period minutes and indicated that they
believe there are no incentives for
ensuring the accuracy of HHA cost
reports, which they believe may result
in erroneous data. Several commenters
also indicated that the use of cost report
data in lieu of WWMC favors facilitybased agencies because they believe that
facility-based agencies have the ability
to allocate indirect overhead costs from
their parent facilities to their service
cost and argued that the proposed
alternative case-mix methodology
would reward inefficient HHAs with
historically high costs. A few
commenters stated that Non-Routine
Supplies (NRS) should not be
incorporated into the base rate and then
wage-index adjusted (as would be the
case if CMS were to use the CPM+NRS
approach to estimate resource use). The
commenters stated that HHAs’ supply
costs are approximately the same
nationally, regardless of rural or urban
locations and regardless of the wageindex, and including NRS in the base
rate will penalize rural providers and
unnecessarily overpay for NRS in high
wage-index areas. We note that in
accordance with the requirement of
section 51001 of the BBA of 2018, a
Technical Expert Panel (TEP) convened
in February 2018 to solicit feedback and
identify and prioritize recommendations
from a wide variety of industry experts
and patient representatives regarding
the public comments received on the
proposed alternative case-mix
adjustment methodology. We received
similar comments on the approach to
calculating resource use using the
CPM+NRS approach, versus the WWMC
approach, bothin response to the CY
2018 HH PPS proposed rule and those
provided by the TEP participants.
We believe that using HHA Medicare
cost report data, through the CPM+NRS
approach, to calculate the costs of
providing care better reflects changes in
utilization, provider payments, and
supply amongst Medicare-certified
HHAs. Using the BLS average hourly
wage rates for the entire home health
care service industry does not reflect
changes in Medicare home health
utilization that impact costs, such as the
allocation of overhead costs when
Medicare home health visit patterns
change. Utilizing data from HHA
Medicare cost reports better represents
PO 00000
Frm 00048
Fmt 4701
Sfmt 4702
the total costs incurred during a 30-day
period (including, but not limited to,
direct patient care contract labor,
overhead, and transportation costs),
while the WWMC method provides an
estimate of only the labor costs (wage
and fringe benefit costs) related to direct
patient care from patient visits that are
incurred during a 30-day period. With
regards to accuracy, we note that each
HHA Medicare cost report is required to
be certified by the Officer or Director of
the home health agency as being true,
correct, and complete with potential
penalties should any information in the
cost report be a misrepresentation or
falsification of information.
As noted above, and in the CY 2018
HH PPS proposed rule, we applied the
trimming methodology described in
detail in the ‘‘Analyses in Support of
Rebasing & Updating Medicare Home
Health Payment Rates’’ Report. This is
also the trimming methodology outlined
in the CY 2014 HH PPS proposed rule
(78 FR 40284) in determining the
rebased national, standardized 60-day
episode payment amount. For each
discipline and for NRS used in
calculating resource use using the
CPM+NRS approach, we also followed
the methodology laid out in the
‘‘Rebasing Report’’ by trimming out
values that fall in the top or bottom 1
percent of the distribution across all
HHAs. This included the cost per visit
values for each discipline and NRS costto-charge ratios that fall in the top or
bottom 1 percent of the distribution
across all HHAs. Normalizing data by
trimming out missing or extreme values
is a widely accepted methodology both
within CMS and amongst the health
research community and provides a
more robust measure of average costs
per visit that is reliable for the purposes
of establishing base payment amounts
and case-mix weights under the HH
PPS. Using HHA Medicare cost report
data to establish the case-mix weight
aligns with the use of this data in
determining the national, standardized
60-day episode payment amount under
the HH PPS.
In response to commenters’ concerns
regarding the allocation of overhead
costs by facility-based HHAs, we note
that a single HHA’s costs impact only a
portion of the calculation of the weights
and costs are blended together across all
HHAs. The payment regression was
estimated using 8,624,776 30-day
periods from 10,480 providers. On
average, each provider contributed 823
30-day periods to the payment
regression, which is only 0.010 percent
of all 30-day periods. Therefore,
including or excluding any single HHA,
on average, would not dramatically
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
impact the results of the payment
regression. Further, facility-based HHAs
are only 8 percent of HHAs whereas 92
percent of HHAs are freestanding, and
coincidentally the percentage of 30-day
periods furnished by facility-based
versus freestanding HHAs is also 8 and
92 percent, respectively. Additionally,
in the PDGM, we estimate the payment
regression using provider-level fixed
effects; therefore we are looking at the
within provider variation in resource
use.
In the CY 2008 HH PPS final rule,
CMS noted that use of non-routine
medical supplies is unevenly
distributed across episodes of care in
home health. In addition, the majority of
episodes do not incur any NRS costs
and, at that time, the current payment
system overcompensated for episodes
with no NRS costs. In the CY 2008 HH
PPS proposed rule, we stated that
patients with certain conditions, many
of them related to skin conditions, were
more likely to require high non-routine
medical supply utilization (72 FR
49850), and that we would continue to
look for ways to improve our approach
to account for NRS costs and payments
in the future (72 FR 25428). We believe
that the proposed PDGM offers an
alternative method for accounting for
NRS costs and payments by grouping
patients more likely to require high NRS
utilization. For example, while the
Wound group and Complex Nursing
Interventions groups comprise about 9
percent and 4 percent of all 30-day
periods of care, respectively; roughly 27
percent of periods where NRS was
supplied were assigned to the Wound
and Complex Nursing Interventions
groups and 44 percent of NRS costs fall
into the Wound and Complex Nursing
groups. We note that CY 2017 claims
data indicates that about 60 percent of
60-day episodes did not provide any
NRS.
In using the CPM + NRS approach to
calculate the cost of proving care
(resource use), NRS costs are reflected
in the average resource use that drives
the case-mix weights. If there is a high
amount of NRS cost for all periods in a
particular group (holding all else equal),
the resource use for those periods will
be higher relative to the overall average
and the case-mix weight will
correspondingly be higher. Similar to
the current system, NRS would still be
paid prospectively under the PDGM, but
the PDGM eliminates the separate casemix adjustment model for NRS.
Incorporating the NRS cost into the
measure of overall resource use (that is,
the dependent variable of the payment
model) requires adjusting the NRS
charges submitted on claims based on
the NRS cost-to-charge ratio from cost
report data.
The following steps would be used to
generate the measure of resource use
under this CPM + NRS approach:
(1) From the cost reports, obtain total
costs for each of the six home health
disciplines for each HHA.
(2) From the cost reports, obtain the
number of visits by each of the six home
health disciplines for each HHA.
(3) Calculate discipline-specific cost
per visit values by dividing total costs
[1] by number of visits [2] for each
discipline for each HHA. For HHAs that
did not have a cost report available (or
a cost report that was trimmed from the
sample), imputed values were used as
follows:
• A state-level mean was used if the
HHA was not hospital-based. The statelevel mean was computed using all nonhospital based HHAs in each state.
• An urban nationwide mean was
used for all hospital-based HHAs
located in a Core-based Statistical Area
(CBSA). The urban nation-wide mean
was computed using all hospital-based
HHAs located in any CBSA.
• A rural nationwide mean was used
for all hospital-based HHAs not in a
CBSA. The rural nation-wide mean was
computed using all hospital-based
HHAs not in a CBSA.
(4) From the home health claims data,
obtain the average number of minutes of
care provided by each discipline across
all episodes for a HHA.
32387
(5) From the home health claims data,
obtain the average number of visits
provided by each discipline across all
episodes for each HHA.
(6) Calculate a ratio of average visits
to average minutes by discipline by
dividing average visits provided [5] by
average minutes of care [4] by discipline
for each HHA.
(7) Calculate costs per minute by
multiplying the HHA’s cost per visit [3]
by the ratio of average visits to average
minutes [6] by discipline for each HHA.
(8) Obtain 30-day period costs by
multiplying costs per minute [7] by the
total number of minutes of care
provided during a 30-day period by
discipline. Then, sum these costs across
the disciplines for each period.
This approach accounts for variation
in the length of a visit by discipline.
NRS costs are added to the resource use
calculated in [8] in the following way:
(9) From the cost reports, determine
the NRS cost-to-charge ratio for each
HHA. The NRS ratio is trimmed if the
value falls in the top or bottom 1
percent of the distribution across all
HHAs from the trimmed sample.
Imputation for missing or trimmed
values is done in the same manner as it
was done for cost per visit (see [3]
above).
(10) From the home health claims
data, obtain NRS charges for each
period.
(11) Obtain NRS costs for each period
by multiplying charges from the home
health claims data [10] by the cost-tocharge ratio from the cost reports [9] for
each HHA.
Resource use is then obtained by:
(12) Summing costs from [8] with
NRS costs from [11] for each 30-day
period.
Table 31 shows these costs for 30-day
periods in CY 2017 (n = 8,624,776). On
average, total 30-day period costs as
measured by resource use are $1,570.68.
The distribution ranges from a 5th
percentile value of $296.66 to a 95th
percentile value of $3,839.91.
TABLE 31—DISTRIBUTION OF AVERAGE RESOURCE USE USING CPM + NRS APPROACH
amozie on DSK3GDR082PROD with PROPOSALS2
[30 Day periods]
Statistics
Mean
N
5th
Percentile
10th
Percentile
25th
Percentile
50th
Percentile
75th
Percentile
90th
Percentile
95th
Percentile
Average Resource Use (CPM +
NRS) ......................................
$1,570.68
8,624,776
$296.66
$394.31
$679.12
$1,272.18
$2,117.47
$3,107.93
$3,839.91
The distributions and magnitude of
the estimates of costs for the CPM +
NRS method versus the WWMC method
are very different. The differences arise
because the CPM + NRS method
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
incorporates HHA-specific costs that
represent the total costs incurred during
a 30-day period (including overhead
costs), while the WWMC method
provides an estimate of only the labor
PO 00000
Frm 00049
Fmt 4701
Sfmt 4702
costs (wage + fringe) related to direct
patient care from patient visits that are
incurred during a 30-day period. Those
costs are not HHA-specific and do not
account for any non-labor costs (such as
E:\FR\FM\12JYP2.SGM
12JYP2
32388
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
transportation costs) or the non-direct
patient care labor costs (such as,
administration and general labor costs).
Because the costs estimated using the
two approaches are measuring different
items, they cannot be directly
compared. However, if the total cost of
a 30-day period is correlated with the
labor that is provided during visits, the
two approaches should be highly
correlated. The correlation coefficient
(estimated by comparing a 30-day
period’s CPM + NRS resource use to the
same period’s WWMC resource use)
between the two approaches to
calculating resource use is equal to
0.8512 (n = 8,624,776). Therefore, the
relationship in relative costs is similar
between the two methods.
Using cost report data to develop
case-mix weights more evenly weights
skilled nursing services and therapy
services than the BLS data. Table 32
shows the ratios between the estimated
costs per hour for each of the home
health disciplines compared with
skilled nursing resulting from the CPM
+ NRS versus WWMC methods. Under
the CPM + NRS methodology, the ratio
for physical therapy costs per hour to
skilled nursing is 1.14 compared with
1.36 using the WWMC method.
TABLE 32—RELATIVE VALUES IN COSTS PER HOUR BY DISCIPLINE
[Skilled nursing is base]
Estimated cost per hour
Skilled nursing
amozie on DSK3GDR082PROD with PROPOSALS2
CPM + NRS .............................................
WWMC .....................................................
1.00
1.00
In response to the CY 2018 HH PPS
proposed rule (82 FR 35270), a few
commenters, stated that based on their
operational experiences with clinical
staffing labor costs, HHA cost report
data suggests more parity exists between
skilled nursing (‘‘SN’’) versus physical
therapist (‘‘PT’’) costs than in fact exists.
Commenters stated that BLS data
showing a 40 percent difference
between SN and PT costs are more
reflective of the human resources
experiences in the markets where they
operate. As such, commenters believe
the use of cost report data would cause
the proposed alternative case-mix
methodology to overpay for nursing
services and underpay for therapy
services, although it was not clear from
the comments why the relative
relationship in cost between disciplines
would necessarily mean that nursing
would be overpaid or underpaid relative
to therapy.
We note that the HHA Medicare cost
report data reflects all labor costs,
including contract labor costs. The BLS
data only reflects employed staff. This
may partially explain why a 40 percent
variation between SN and PT costs is
not evident in the cost report data.
However, the comparison is somewhat
inappropriate because the BLS data only
reflects labor costs whereas the HHA
Medicare cost report data includes labor
and non-labor costs. As noted earlier in
Table 32, there is only a 14 percent
variation using the CPM + NRS
methodology. Moreover, in aggregate,
about 15 percent of compensation costs
are contract labor costs and this varies
among the disciplines with contract
labor costs accounting for a much higher
proportion of therapy visit costs
compared to skilled nursing visit costs.
Utilization also varies among
freestanding providers with smaller
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
Physical
therapy
Occupational
therapy
1.14
1.36
1.15
1.38
providers having a higher proportion of
contract labor costs, particularly for
therapy services compared to larger
providers. The decision of whether to/
or what proportion of contract labor to
use is at the provider’s discretion.
Finally, we note that in order to be
eligible for Medicare HH PPS payments,
providers must complete the HHA
Medicare cost report and certify the
report by the Officer or Director of the
home health agency as being true,
correct, and complete; therefore, such
data can and should be used to calculate
the cost of care.
We have determined that using cost
report data to calculate the cost of home
health care better aligns the case-mix
weights with the total relative cost for
treating various patients. In addition,
using cost report data allows us to
incorporate NRS into the case-mix
system, rather than maintaining a
separate payment system. Therefore, we
are re-proposing to calculate the cost of
a 30-day period of home health care
under the proposed PDGM using the
cost per minute plus non-routine
supplies (CPM + NRS) approach
outlined above, as also outlined in the
CY 2018 proposed rule. We invite
comments on the proposed
methodology for calculating the cost of
a 30-day period of care under the
PDGM.
3. Change From a 60-Day to a 30-Day
Unit of Payment
a. Background
Currently, HHAs are paid for each 60day episode of home health care
provided. In the CY 2018 HH PPS
proposed rule, CMS proposed a change
from making payment based on 60-day
episodes to making payment based on
30-day periods, effective for January 1,
PO 00000
Frm 00050
Fmt 4701
Sfmt 4702
Speech
therapy
1.25
1.56
Medical
social service
1.39
0.94
Home
health aide
0.40
0.35
2019. Examination of the resources used
within a 60-day episode of care
identified differences in resources used
between the first 30-day period within
a 60-day episode and the second 30-day
period within a 60-day episode.
Episodes have more visits, on average,
during the first 30 days compared to the
last 30 days and costs are much higher
earlier in the episode and lesser later on;
therefore, dividing a single 60-day
episode into two 30-day periods more
accurately apportioned payments. In
addition, with the proposed removal of
therapy thresholds from the case-mix
adjustment methodology under the HH
PPS, a shorter period of care reduced
the variation and improved the accuracy
of the case-mix weights generated under
the PDGM. CMS did not finalize the
implementation of a 30-day unit of
payment in the CY 2018 HH PPS final
rule (82 FR 51676).
Section 1895(b)(2)(B) of the Act, as
added by section 51001(a)(1) of the BBA
of 2018, requires the Secretary to apply
a 30-day unit of service for purposes of
implementing the HH PPS, effective
January 1, 2020. We note that we
interpret the term ‘‘unit of service’’ to be
synonymous with ‘‘unit of payment’’
and will henceforth refer to ‘‘unit of
payment’’ in this proposed rule with
regards to payment under the HH PPS.
We propose to make HH payments
based on a 30-day unit of payment
effective January 1, 2020. While we are
proposing to change to a 30-day unit of
payment, we note that the
comprehensive assessment would still
be completed within 5 days of the start
of care date and completed no less
frequently than during the last 5 days of
every 60 days beginning with the start
of care date, as currently required by
§ 484.55, Condition of participation:
Comprehensive assessment of patients.
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
In addition, the plan of care would still
be reviewed and revised by the HHA
and the physician responsible for the
home health plan of care no less
frequently than once every 60 days,
beginning with the start of care date, as
currently required by § 484.60(c),
Condition of participation: Care
planning, coordination of services, and
quality of care.
b. 30-Day Unit of Payment
Under section 1895(b)(3)(A)(iv) of the
Act, we are required to calculate a 30day payment amount for CY 2020 in a
budget neutral manner such that
estimated aggregate expenditures under
the HH PPS during CY 2020 are equal
to the estimated aggregate expenditures
that otherwise would have been made
under the HH PPS during CY 2020 in
the absence of the change to a 30-day
unit of payment. Furthermore, as also
required by section 1895(b)(3)(A)(iv) of
the Act, to calculate a 30-day payment
amount in a budget-neutral manner, we
are required to make assumptions about
behavior changes that could occur as a
result of the implementation of the 30day unit of payment. In addition, in
calculating a 30-day payment amount in
a budget-neutral manner, we must take
into account behavior changes that
could occur as a result of the case-mix
adjustment factors that are implemented
in CY 2020. We are also required to
calculate a budget-neutral 30-day
payment amount before the provisions
of section 1895(b)(3)(B) of the Act are
applied, that is, the home health
applicable percentage increase, the
adjustment for case-mix changes, the
adjustment if quality data is not
reported, and the productivity
adjustment.
In calculating the budget-neutral 30day payment amount, we propose to
make three assumptions about behavior
change that could occur in CY 2020 as
a result of the implementation of the 30day unit of payment and the
implementation of the PDGM case-mix
adjustment methodology outlined in
this proposed rule:
• Clinical Group Coding: A key
component of determining payment
under the PDGM is the 30-day period’s
clinical group assignment, which is
based on the principal diagnosis code
for the patient as reported by the HHA
on the home health claim. Therefore, we
assume that HHAs will change their
documentation and coding practices
and would put the highest paying
diagnosis code as the principal
diagnosis code in order to have a 30-day
period be placed into a higher-paying
clinical group. While we do not support
or condone coding practices or the
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
provision of services solely to maximize
payment, we often take into account
expected behavioral effects of policy
changes related to the implementation
of the proposed rule.
• Comorbidity Coding: The PDGM
further adjusts payments based on
patients’ secondary diagnoses as
reported by the HHA on the home
health claim. While the OASIS only
allows HHAs to designate 1 primary
diagnosis and 5 secondary diagnoses,
the home health claim allows HHAs to
designate 1 principal diagnosis and 24
secondary diagnoses. Therefore, we
assume that by taking into account
additional ICD–10–CM diagnosis codes
listed on the home health claim (beyond
the 6 allowed on the OASIS), more 30day periods of care will receive a
comorbidity adjustment than periods
otherwise would have received if we
only used the OASIS diagnosis codes for
payment. The comorbidity adjustment
in the PDGM can increase payment by
up to 20 percent.
• LUPA Threshold: Rather than being
paid the per-visit amounts for a 30-day
period of care subject to the lowutilization payment adjustment (LUPA)
under the proposed PDGM, we assume
that for one-third of LUPAs that are 1 to
2 visits away from the LUPA threshold
HHAs will provide 1 to 2 extra visits to
receive a full 30-day payment.32 LUPAs
are paid when there are a low number
of visits furnished in a 30-day period of
care. Under the PDGM, the LUPA
threshold ranges from 2–6 visits
depending on the case-mix group
assignment for a particular period of
care (see section F.9 of this proposed
rule for the LUPA thresholds that
correspond to the 216 case-mix groups
under the PDGM).
Table 33 includes estimates of what
the 30-day payment amount would be
for CY 2019 (using CY 2017 home
health utilization data) in order to
achieve budget neutrality both with and
without behavioral assumptions and
including the application of the
proposed home health payment update
percentage of 2.1 percent outlined in
section C.2 of this proposed rule. We
note that these are only estimates to
illustrate the 30-day payment amount if
we had proposed to implement the 30day unit of payment and the proposed
PDGM for CY 2019. However, because
we are proposing to implement the 30day unit of payment and proposed
32 Current data suggest that what would be about
⁄ of the LUPA episodes with visits near the LUPA
threshold move up to become non-LUPA episodes.
We assume this experience will continue under the
PDGM, with about 1⁄3 of those episodes 1 or 2 visits
below the thresholds moving up to become nonLUPA episodes.
13
PO 00000
Frm 00051
Fmt 4701
Sfmt 4702
32389
PDGM for CY 2020, we would propose
the actual 30-day payment amount in
the CY 2020 HH PPS proposed rule
calculated using CY 2018 home health
utilization data, and we would calculate
this amount before application of the
proposed home health update
percentage required for CY 2020 (as
required by section 1895(b)(3)(iv) of the
Act). In order to calculate the budget
neutral 30-day payment amounts in this
proposed rule, both with and without
behavioral assumptions, we first
calculated the total, aggregate amount of
expenditures that would occur under
the current case-mix adjustment
methodology (as described in section
III.B. of this rule) and the 60-day
episode unit of payment using the
proposed CY 2019 payment parameters
(e.g., proposed 2019 payment rates,
proposed 2019 case-mix weights, and
outlier fixed-dollar loss ratio). That
resulted in a total aggregate
expenditures target amount of $16.1
billion.33 We then calculated what the
30-day payment amount would need to
be set at in CY 2019, with and without
behavior assumptions, while taking into
account needed changes to the outlier
fixed-dollar loss ratio under the PDGM
in order to pay out no more than 2.5
percent of total HH PPS payments as
outlier payments (refer to section
III.F.12 of this proposed rule) and in
order for Medicare to pay out $16.1
billion in total expenditures in CY 2019
with the application of a 30-day unit of
payment under the PDGM.
33 The initial 2017 analytic file included
6,771,059 60-day episodes ($18.2 billion in total
expenditures). Of these, 959,410 (14.2 percent) were
excluded because they could not be linked to
OASIS assessments or because of the claims data
cleaning process reasons listed in section III.F.1 of
this proposed rule. We note that of the 959,410
claims excluded, 620,336 were excluded because
they were RAPs without a final claim or they were
claims with zero payment amounts, resulting in
$17.4 billion in total expenditures. After removing
all 959,410 excluded claims, the 2017 analytic file
consisted of 5,811,649 60-day episodes ($16.4
billion in total expenditures). 60-day episodes of
duration longer than 30 days were divided into two
30-day periods in order to calculate the 30-day
payment amounts. As noted in section III.F.1 of this
proposed rule, there were instances where 30-day
periods were excluded from the 2017 analytic file
(for example, we could not match the period to a
start of care or resumption of care OASIS to
determine the functional level under the PDGM, the
30-day period did not have any skilled visits, or
because information necessary to calculate payment
was missing from claim record). The final 2017
analytic file used to calculate budget neutrality
consisted of 9,285,210 30-day periods ($16.1 billion
in total expenditures) drawn from 5,456,216 60-day
episodes.
E:\FR\FM\12JYP2.SGM
12JYP2
32390
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 33—ESTIMATES OF 30-DAY BUDGET-NEUTRAL PAYMENT AMOUNTS
30-day budget
neutral (BN)
standard
amount
Behavioral assumption
amozie on DSK3GDR082PROD with PROPOSALS2
No Behavioral Assumptions ....................................................................................................................................
LUPA Threshold (1⁄3 of LUPAs 1–2 visits away from threshold get extra visits and become case-mix adjusted)
Clinical Group Coding (among available diagnoses, one leading to highest payment clinical grouping classification designated as principal) ..........................................................................................................................
Comorbidity Coding (assigns comorbidity level based on comorbidities appearing on HHA claims and not just
OASIS) .................................................................................................................................................................
Clinical Group Coding + Comorbidity Coding .........................................................................................................
Clinical Group Coding + Comorbidity Coding + LUPA Threshold ..........................................................................
If no behavioral assumptions were
made, we estimate that the 30-day
payment amount needed to achieve
budget neutrality would be $1,873.91.
The clinical group and comorbidity
coding assumptions would result in the
need to decrease the budget-neutral 30day payment amount to $1,786.54 (a
4.66 percent decrease from $1,873.91).
Adding the LUPA assumption would
require us to further decrease that
amount to $1,753.68 (a 6.42 percent
decrease from $1,873.91).
We note that we are also required
under section 1895(b)(3)(D)(i) of the Act,
as added by section 51001(a)(2)(B) of the
BBA of 2018, to analyze data for CYs
2020 through 2026, after
implementation of the 30-day unit of
payment and new case-mix adjustment
methodology, to annually determine the
impact of differences between assumed
behavior changes and actual behavior
changes on estimated aggregate
expenditures. We interpret actual
behavior change to encompass both
behavior changes that were outlined
above, as assumed by CMS when
determining the budget-neutral 30-day
payment amount for CY 2020, and other
behavior changes not identified at the
time the 30-day payment amount for CY
2020 is determined. The data from CYs
2020 through 2026 will be available to
determine whether a prospective
adjustment (increase or decrease) is
needed no earlier than in years 2022
through 2028 rulemaking. As noted
previously, under section
1895(b)(3)(D)(ii) of the Act, we are
required to provide one or more
permanent adjustments to the 30-day
payment amount on a prospective basis,
if needed, to offset increases or
decreases in estimated aggregate
expenditures as calculated under
section 1895(b)(3)(D)(i) of the Act.
Clause (iii) of section 1895(b)(3)(D) of
the Act requires the Secretary to make
temporary adjustments to the 30-day
payment amount, on a prospective
basis, in order to offset increases or
decreases in estimated aggregate
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
expenditures, as determined under
clause (i) of such section. The temporary
adjustments allow us to recover excess
spending or give back the difference
between actual and estimated spending
(if actual is less than estimated) not
addressed by permanent adjustments.
For instance, if expenditures are
estimated to be $18 billion in CY 2020,
but expenditures are actually $18.25
billion in CY 2020, then we can reduce
payments (temporarily) in the future to
recover the $250 million.
As noted above, section
1895(b)(3)(A)(iv) of the Act requires the
Secretary to calculate a budget-neutral
30-day payment amount to be paid for
home health units of service that are
furnished and end during the 12-month
period beginning January 1, 2020. For
implementation purposes, we propose
that the 30-day payment amount would
be paid for home health services that
start on or after January 1, 2020. More
specifically, for 60-day episodes that
begin on or before December 31, 2019
and end on or after January 1, 2020
(episodes that would span the January 1,
2020 implementation date), payment
made under the Medicare HH PPS
would be the CY 2020 national,
standardized 60-day episode payment
amount. For home health units of
service that begin on or after January 1,
2020, the unit of service would now be
a 30-day period and payment made
under the Medicare HH PPS would be
the CY 2020 national, standardized
prospective 30-day payment amount.
For home health units of service that
begin on or after December 2, 2020
through December 31, 2020 and end on
or after January 1, 2021, the HHA would
be paid the CY 2021 national,
standardized prospective 30-day
payment amount.
We are soliciting comments on our
proposals, including the proposed
behavior change assumptions outlined
above to be used in determining the 30day payment amount for CY 2020 and
the corresponding regulation text
PO 00000
Frm 00052
Fmt 4701
Sfmt 4702
Percent
change from
no behavioral
assumptions
$1,873.91
1,841.05
........................
¥1.75
1,793.69
¥4.28
1,866.76
1,786.54
1,753.68
¥0.38
¥4.66
¥6.42
changes outlined in section III.F.13 and
IX. of this proposed rule.
c. Split Percentage Payment Approach
for a 30-Day Unit of Payment
In the current HH PPS, there is a split
percentage payment approach to the 60day episode. The first bill, a Request for
Anticipated Payment (RAP), is
submitted at the beginning of the initial
episode for 60 percent of the anticipated
final claim payment amount. The
second, final bill is submitted at the end
of the 60-day episode for the remaining
40 percent. For all subsequent episodes
for beneficiaries who receive continuous
home health care, the episodes are paid
at a 50/50 percentage payment split.
In the CY 2018 HH PPS proposed rule
(82 FR 35270), we solicited comments
as to whether the split payment
approach would still be needed for
HHAs to maintain adequate cash flow if
the unit of payment changes from 60day episodes to 30-day periods of care.
In addition, we solicited comments on
ways to phase-out the split percentage
payment approach in the future.
Specifically, we solicited comments on
reducing the percentage of the upfront
payment over a period of time and if in
the future the split percentage approach
was eliminated, we solicited comments
on the need for HHAs to submit a notice
of admission (NOA) within 5 days of the
start of care to assure being established
as the primary HHA for the beneficiary
and so that the claims processing system
is alerted that a beneficiary is under a
HH period of care to enforce the
consolidating billing edits as required
by law. Commenters generally
expressed support for continuing the
split percentage payment approach in
the future under the proposed
alternative case-mix model. While we
solicited comments on the possibility of
phasing-out the split percentage
payment approach in the future and the
need for a NOA, commenters did not
provide suggestions for a phase-out
approach, but stated that they did not
agree with requiring a NOA given the
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
experience with such a process under
the Medicare hospice benefit.
While CMS did not finalize the
implementation of a 30-day unit of
payment in the CY 2018 HH PPS final
rule (82 FR 51676), the BBA of 2018
now requires a change to the unit of
payment from a 60-day episode to a 30day period of care, as outlined in
section F.3.b above, effective January 1,
2020. We continue to believe that as a
result of the reduced timeframe for the
unit of payment, that a split percentage
approach to payment may not be needed
for HHAs to maintain adequate cash
flow. Currently, about 5 percent of
requests for anticipated payment are not
submitted until the end of a 60-day
episode of care and the median length
of days for RAP submission is 12 days
from the start of the 60-day episode. As
such, we are reevaluating the necessity
of RAPs for existing and newly-certified
HHAs versus the risks they pose to the
Medicare program.
RAP payments can result in program
integrity vulnerabilities. For example, a
final claim was never submitted for
$321 million worth of RAP payments
between July 1, 2015 and July 31, 2016.
While CMS typically can recoup RAP
overpayments from providers that
continue to submit final claims to the
Medicare program, some fraud schemes
have involved collecting these RAP
payments, never submitting final
claims, and closing the HHA before
Medicare can take action. Below are two
examples of HHAs that were identified
for billing large amounts of RAPs with
no final claim:
• Provider 1 is a Home Health Agency
located in Michigan. It was identified
for submitting home health claims for
beneficiaries located in California and
Florida. Further analysis found that the
HHA was submitting RAPs with no final
claims. CMS discovered that the address
on record for the HHA was vacant for
an extended period of time. In addition,
CMS determined that although Provider
1 had continued billing and receiving
payments for RAP claims, it had not
submitted a final claim in 10 months.
Ultimately, the HHA submitted a total of
$50,234,430.36 in RAP payments and
received $37,204,558.80 in RAP
payments. In addition to the large
amount of money paid to the HHA,
Medicare beneficiaries were also
impacted by the HHA’s billing behavior.
For example, a Florida beneficiary who
needed home health services was
unable to receive the care required due
to the RAP submission by this Provider.
• Provider 2 is a Home Health Agency
that is also located in Michigan that
submitted a significant number of RAPs
with no final claim. While the majority
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
of these beneficiaries were located in
Michigan, data analysis identified
beneficiaries who were not likely
homebound or qualified for home health
services. CMS discovered that the
address on record for the HHA was
vacant. Provider 2 had not submitted
any final claims in more than one year
and was no longer billing the Medicare
program. However, the HHA was paid a
total of $5,765,261.04 in RAP payments
that had no final claim.
Given the program integrity concerns
outlined above and the reduced
timeframe for the unit of payment (30days rather than 60-days), we are
proposing not to allow newly-enrolled
HHAs, that is HHAs certified for
participation in Medicare effective on or
after January 1, 2019, to receive RAP
payments beginning in CY 2020. This
would allow newly-enrolled HHAs to
structure their operations without
becoming dependent on a partial,
advanced payment and take advantage
of receiving full payments for every 30day period of care. We are proposing
that HHAs, that are certified for
participation in Medicare effective on or
after January 1, 2019, would still be
required to submit a ‘‘no pay’’ RAP at
the beginning of care in order to
establish the home health episode, as
well as every 30-days thereafter. RAP
submissions are currently operationally
significant as the RAP establishes the
HHA as the primary HHA for the
beneficiary during that timeframe and
alerts the claims processing system that
a beneficiary is under the care of an
HHA to enforce the consolidating billing
edits required by law under section
1842(b)(6)(F) of the Act. Without such
notification, there would be an increase
in denials of claims subject to the home
health consolidated billing edits that are
prevented when an episode/period is
established in the common working file
(CWF) by the RAP, potentially resulting
in increases in appeals, and increases in
situations where other providers,
including other HHAs, would not have
easy information on whether a patient
was already being served by an HHA.
CMS invites comments on whether the
burden of submitting a ‘‘no-pay’’ RAP
by newly-enrolled HHAs outweighs the
risks to the Medicare program and
providers associated with not
submitting them.
We propose that existing HHAs, that
is HHAs certified for participation in
Medicare with effective dates prior to
January 1, 2019, would continue to
receive RAP payments upon
implementation of the 30-day unit of
payment and the proposed PDGM casemix adjustment methodology in CY
2020. However, we are again soliciting
PO 00000
Frm 00053
Fmt 4701
Sfmt 4702
32391
comments on ways to phase-out the
split percentage payment approach in
the future given that CMS is required to
implement a 30-day unit of payment
beginning on January 1, 2020 as
outlined above. Specifically, we are
soliciting comments on reducing the
percentage of the upfront payment
incrementally over a period of time. If
in the future the split percentage
approach was eliminated, we are also
soliciting comments on the need for
HHAs to submit a NOA within 5 days
of the start of care to assure being
established as the primary HHA for the
beneficiary during that timeframe and
so that the claims processing system is
alerted that a beneficiary is under a HH
period of care to enforce the
consolidating billing edits as required
by law. As outlined above, there are
significant drawbacks to both Medicare
and providers of not establishing a NOA
process upon elimination of RAPs.
In summary, we invite comments on
the change in the unit of payment from
a 60-day episode of care to a 30-day
period of care; the proposed calculation
of the 30-day payment amount in a
budget-neutral manner and behavior
change assumptions for CY 2020; the
proposed interpretation of the statutory
language regarding actual behavior
change; the proposal not to allow
newly-enrolled HHAs (HHAs certified
for participation in Medicare effective
on or after January 1, 2019) to receive
RAP payments upon implementation of
the 30-day unit of payment in CY 2020,
yet still require the submission of a ‘‘no
pay’’ RAP at the beginning of care; the
proposal to maintain the split
percentage payment approach for
existing HHAs and applying such policy
to 30-day periods of care; and the
associated regulations text changes
outlined in section III.F.13 and IX of
this proposed rule. We are also
soliciting comments on ways the split
percentage payment approach could be
phased-out and whether to implement a
NOA process if the split percentage
payment approach is eliminated in the
future.
4. Timing Categories
In the CY 2018 HH PPS proposed
rule, we described analysis showing the
impact of timing on home health
resource use and proposed to classify
the 30-day periods under the proposed
alternative case-mix adjustment
methodology as ‘‘early’’ or ‘‘late’’
depending on when they occur within
a sequence of 30-day periods (82 FR
35307). Under the current HH PPS, the
first two 60-day episodes of a sequence
of adjacent 60-day episodes are
considered early, while the third 60-day
E:\FR\FM\12JYP2.SGM
12JYP2
32392
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
episode of that sequence and any
subsequent episodes are considered late.
Under the alternative case-mix
adjustment methodology, we proposed
that the first 30-day period would be
classified as early and all subsequent
30-day periods in the sequence (second
or later) would be classified as late.
Similar to the current payment system,
we proposed that a 30-day period could
not be considered early unless there was
a gap of more than 60 days between the
end of one period and the start of
another, or it was the first period in a
sequence of periods in which there was
no more than 60 days between the end
of that period and the start of the next
period.
In response to the CY 2018 HH PPS
proposed rule, several commenters were
supportive of the inclusion of the timing
category in the alternative case-mix
adjustment methodology, stating that
this differentiation would reflect that
HHA costs are typically highest during
the first 30 days of care. However, other
commenters expressed concerns
regarding timing, stating that HHAs may
modify the ways in which they provide
care, that the change would cause a
decrease in overall payment to HHAs
and an increase in hospital
readmissions, and that the categories
would not account for increased costs in
the later periods of care. Several
commenters described concerns
regarding the potential for problematic
provider behavior due to financial
incentives as well as the potential for
problems with operational aspects of the
timing element of the alternative casemix adjustment methodology.
Additionally, some commenters
suggested that we modify the definition
of an ‘‘early’’ 30-day period to either the
first two 30-day periods or the first four
30-days of care, stating that those
definitions would more closely mirror
the current payment system’s definition
of ‘‘early’’ and that HHAs would
otherwise experience a payment
decrease when compared to the current
60-day episode payment amount.
As described in detail in the CY 2018
HH PPS proposed rule, our proposal
regarding the timing element of the
alternative case-mix adjustment
methodology was intended to refine and
to better fit costs incurred by agencies
for patients with differing
characteristics and needs under the HH
PPS (82 FR 35270). Analysis of home
health data demonstrates that under the
current payment system, when analyzed
by 30-day periods, HHAs provide more
resources in the first 30-day period of
home health (‘‘early’’) than in later
periods of care. The differences in the
average resource use during early and
late home health episodes when divided
into 30-day periods are presented in
Table 34, and shows the first 30-day
periods in a home health sequence have
significantly higher average resource use
at $2,113.66 as compared with
subsequent 30-day periods. Specifically,
the later 30-day periods showed an
average resource use of $1,311.73, a
difference of more than $800 or a 38
percent decrease. Table 34 also shows a
significant difference between the early
and late median values of resource use.
The median for the first 30-day period
is $1,866.79, while the median for
subsequent 30-day periods is $987.94, a
difference of more than $878 or an
approximately 47 percent decrease.
TABLE 34—AVERAGE RESOURCE USE BY TIMING
[30-Day periods]
Average
resource
use
Timing
Frequency
of periods
Percent
of periods
Standard
deviation of
resource
use
25th
percentile of
resource
use
Median
resource
use
75th
percentile of
resource
use
Early 30-Day Periods ................................................................
Late 30-Day Periods .................................................................
$2,113.66
1,311.73
2,785,039
5,839,737
32.3
67.7
$1,236.30
1,125.44
$1,232.23
534.82
$1,866.79
987.94
$2,707.04
1,735.69
Total ...................................................................................
1,570.68
8,624,776
100.0
1,221.38
679.12
1,272.18
2,117.47
amozie on DSK3GDR082PROD with PROPOSALS2
Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 (as of March 2, 2018).
There is significant difference in the
resource utilization between early and
late 30-day periods as demonstrated in
Table 34. Moreover, the predictive
power of the proposed PDGM in terms
of estimating resource utilization
improved when separating episodes into
30-day periods rather than 60-day
periods (that is, the first and second 30day periods). We believe that a PDGM
that accounts for the demonstrated
increase in resource utilization in the
first 30-day period better captures the
variations in resource utilization and
further promotes the goal of payment
accuracy within the HH PPS.
Moreover, we note that the resource
cost estimates are derived from a very
large, representative dataset. Therefore,
we expect that the proposal reflects
agencies’ average costs for all home
health service delivered in the period
examined. We have constructed the
revised case-mix adjustment model
based upon the actual resources
expended by home health agencies for
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
Medicare beneficiaries, which show that
typically HHAs provide more visits
during the first 30 days of care and
utilize less resources thereafter. We
reiterate that the timing categories are
reflective of the utilization patterns
observed in the data analyzed for the
purposes of constructing the PDGM. The
weights of the two timing categories are
driven by the mix of services provided,
the costs of services provided as
determined by cost report data, the
length of the visits, and the number of
visits provided. The categorization of
30-day periods as ‘‘early’’ and ‘‘late’’
serves to better align payments with
already existing resource use patterns.
This alignment of payment with
resource use is not to be interpreted as
placing a value judgment on particular
care patterns or patient populations.
Our goal in developing the PDGM is to
provide an appropriate payment based
on the identified resource use of
different patient groups, not to
PO 00000
Frm 00054
Fmt 4701
Sfmt 4702
encourage, discourage, value, or devalue
one type of skilled care over another.
For the reasons described above, we
are proposing to classify the 30-day
periods under the proposed PDGM as
‘‘early’’ or ‘‘late’’ depending on when
they occur within a sequence of 30-day
periods. For the purposes of defining
‘‘early’’ and ‘‘late’’ periods for the
proposed PDGM, we are proposing that
only the first 30-day period in a
sequence of periods be defined as
‘‘early’’ and all other subsequent 30-day
periods would be considered ‘‘late’’.
Additionally, we are proposing that the
definition of a ‘‘home health sequence’’
(as currently described in § 484.230)
will remain unchanged relative to the
current system, that is, 30-day periods
are considered to be in the same
sequence as long as no more than 60
days pass between the end of one period
and the start of the next, which is
consistent with the definition of a
‘‘home health spell of illness’’ described
at section 1861(tt)(2) of the Act. We note
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
that because section 1861(tt)(2) of the
Act is a definition related to eligibility
for home health services as described at
section 1812(a)(3) of the Act, it does not
affect or restrict our ability to
implement a 30-dayunit of payment.
At this time, the data do not support
the notion that the first two 30-day
periods should be defined as early, as
only the first 30-day period presents
marked increase in resource use. We
believe the PDGM’s definition of ‘‘early’’
as the first 30-day period most
accurately reflects agencies’ average
costs for patients with characteristics
measured on the OASIS and used in
defining payment groups and supports
the shift from the current ‘‘early’’
category as defined by two 60-day
episodes. We continue to believe that a
PDGM that accounts for the actual,
demonstrated increase in resource
utilization in the first 30-day period
better captures the variations in
resource utilization.
Additionally, in our CY 2008 HH PPS
final rule, we implemented an ‘‘early’’
and ‘‘late’’ distinction in the HH PPS in
which the late episode groupings were
weighted more heavily than those
episodes designated as early due to
heavier resource use during later
episodes (72 FR 49770). At that time,
commenters expressed concerns that
this heavier weighting for later episodes
could lead to gaming by providers, with
patients on service longer than would be
appropriate, and providers not
discharging patients when merited.
During our analysis in support of
subsequent refinements to the HH PPS
in 2015, we analyzed the utilization
patterns observed in the CY 2013 claims
data and observed that the resource use
for later episodes had indeed shifted
such that later episodes had less
resource use than earlier periods, which
was the opposite of the pattern observed
prior to CY 2008. Furthermore, in its
2016 Report to Congress, MedPAC noted
that, between 2002 and 2014, a pattern
in home health emerged where the
number of episodes of care provided to
home health beneficiaries trended
upwards, with the average number of
episodes per user increasing by 18
percent, rising from 1.6 to 1.9 episodes
per user.34 MedPAC noted that this
upward trajectory coincided with,
among other changes, higher payments
for the third and later episodes in a
consecutive spell of home health
episodes. Given the longitudinal
variation in terms of resource provision
during home health episodes, we
34 http://www.medpac.gov/docs/default-source/
reports/chapter-8-home-health-care-services-march2016-report-.pdf.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
believe that restricting the ‘‘early’’
definition to the first 30-day period is
most appropriate for this facet of the
PDGM. Our analysis of home health
resource use as well as comments from
the public that confirm that more
resources are provided in the first 30
days provide compelling evidence to
limit the definition of early to the first
30-day period.
Moreover, the public comments we
received in response to the CY 2018 HH
PPS proposed rule presented conflicting
predictions regarding anticipated
provider behavior in response to the
implementation of the alternative casemix adjustment methodology. Several
commenters stated that they expected
providers to discharge patients after the
first 30-days of care, given that the casemix weights are, on average, higher for
the first 30-days of care. Other
commenters expressed concern that
providers may attempt to keep home
health beneficiaries on service for as
long as possible. Additionally, meeting
the requirement of section 51001 of the
BBA of 2018, a Technical Expert Panel
(TEP) was convened in February 2018 to
solicit feedback and identify and
prioritize recommendations from a wide
variety of industry experts and patient
representatives regarding the public
comments received on the proposed
alternative case-mix adjustment
methodology. Comments on the timing
categories and suggestions for
refinement to this adjustment were very
similar between those received on the
CY 2018 HH PPS proposed rule and
those made by the TEP participants. We
note the PDGM case-mix weights reflect
existing patterns of resource use
observed in our analyses of CY 2016
home health claims data. Since we
propose to recalibrate the PDGM casemix weights on an annual basis to
ensure that the case-mix weights reflect
the most recent utilization data
available at the time of rulemaking,
future recalibrations of the PDGM casemix weights may result in changes to
the case-mix weights for early versus
late 30-day periods of care as a result of
changes in utilization patterns.
Several commenters responding to the
CY 2018 HH PPS proposed rule
suggested that we revise the model such
that a readmission to home health
within the 60-day gap period results in
an ‘‘early’’ instead of a ‘‘late’’ 30-day
period. However, we note that the
PDGM also includes a category
determined specifically by source of
admission, which would account for
any readmission to home health. Under
the PDGM we already account for
whether the patient was admitted to
home health care from the community
PO 00000
Frm 00055
Fmt 4701
Sfmt 4702
32393
or following an institutional stay,
including inpatient stays that occur after
the commencement of a home health
care. For example, if the original home
health stay was categorized as
community and subsequently the
patient experienced an inpatient stay,
the subsequent home health stay would
reset to institutional upon discharge
from the inpatient setting. Similarly, we
note that for the purposes of the timing
component of the PDGM, an intervening
hospital stay would not trigger recategorization to an ‘‘early’’ period
unless there were a 60-day gap in home
health care. Therefore, we do not
believe that the timing element of the
PDGM would create a financial
incentive to inappropriately encourage
the admission of home health patients
to an acute care setting in order to
receive a subsequent home health
referral in the higher-paid ‘‘early’’
category. Our proposal was intended to
refine and to better fit costs incurred by
agencies for patients with differing
characteristics and needs under the
prospective payment system. Therefore,
we expect that the addition of both the
source of admission, as well as the
timing categories do reflect agencies’
average costs for home health patients
and used in defining payment groups.
We believe that crafting a multi-pronged
case-mix adjustment model, which
includes adjustments based both on
timing within a home health sequence
as well as the source of the beneficiary
admission, will serve to more accurately
account for resources required for
Medicare beneficiaries and similarly
provide a differentiated payment
amount for care.
Several commenters responding to the
CY 2018 HH PPS proposed rule
expressed concern regarding the
operational aspects of the timing
element of the alternative case-mix
adjustment methodology. As we
described in the CY 2018 HH PPS
proposed rule, and as we are proposing
in this rule, we would use Medicare
claims data and not the OASIS
assessment in order to determine if a 30day period is considered ‘‘early’’ or
‘‘late’’ (82 FR 35309). We have
developed claims processing procedures
to reduce the amount of administrative
burden associated with the
implementation of the PDGM. Providers
would not have to determine whether a
30-day period is early (the first 30-day
period) or later (all adjacent 30-day
periods beyond the first 30-day period)
if they choose not to. Information from
Medicare systems would be used during
claims processing to automatically
assign the appropriate timing category.
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32394
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
To identify the first 30-day period
within a sequence, the Medicare claims
processing system would verify that the
claim ‘‘From date’’ and ‘‘Admission
date’’ match. If this condition were to be
met, our systems would send the
‘‘early’’ indicator to the HH Grouper for
the 30-day period of care. When the
claim was received by CMS’s Common
Working File (CWF), the system would
look back 60 days to ensure there was
not a prior, related 30-day period. If not,
the claim would continue to be paid as
‘‘early.’’ If another related 30-day period
were to be identified, that is an earlier
30-day period in the sequence, the claim
would be flagged as ‘‘late’’ and returned
to the shared systems for subsequent
regrouping and re-pricing. Those
periods that are not the first 30-day
period in a sequence of adjacent
periods, separated by no more than a 60
day gap, would be categorized as ‘‘late’’
periods and placed in corresponding
PDGM categories.
Early 30-day periods are defined as
the initial 30-day period in a sequence
of adjacent 30-day periods. Late 30-day
periods are defined as all subsequent
adjacent periods beyond the first 30-day
period. Periods are considered to be
adjacent if they are contiguous, meaning
that they are separated by no more than
a 60-day period between 30-day periods
of care. In determining a gap, we only
consider whether the beneficiary was
receiving home health care from
traditional fee-for-service Medicare.
For example, if the beneficiary has not
received home health care through
traditional Medicare for at least 60 days,
and then receives home health care from
agency A, that is an early 30-day period.
If that 30-day period receives a PEP
adjustment and agency B recertifies the
beneficiary for a second 30-day period,
that second 30-day period is now
considered a late 30-day period.
However, the beneficiary could have
received home health care from other
traditional Medicare providers within
60 days before coming to agency A. The
designation of early or late would
depend upon how many adjacent
periods of care were received prior to
coming to agency A. The CWF will
examine claims upon receipt in
comparison to all previously processed
30-day period to verify that the period
is correctly designated as early or later.
The 60-day period to determine a gap
that will begin a new sequence of 30day periods will be counted in most
instances from the calculated end date
of the 30-day period. That is, in most
cases CWF will count from ‘‘day 30’’ of
a 30-day period without regard to an
earlier discharge date. The exception to
this is for 30-day periods that were
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
subject to PEP adjustment. In PEP cases,
CWF will count 60 days from the date
of the last billable home health visit
provided. Under the current HH PPS,
the partial episode payment (PEP)
adjustment is a proportion of the
episode payment that is based on the
span of days, including the start-of-care
date or first billable service date,
through and including the last billable
service date under the original plan of
care, before the intervening event in a
home health beneficiary’s care, which is
defined as: A beneficiary elected
transfer, or a discharge and return to
home health that would warrant, for
purposes of payment, a new OASIS
assessment, physician certification of
eligibility, and a new plan of care.
Because PEPs are paid based upon the
last billable service date and not
necessarily based on the last day of a 60day episode, we would consider the end
of the PEP HH episode as the last
billable home health visit provided and
begin the count of gap days from the
date of the last billable home health
visit and not ‘‘day 30’’ of a 30-day
period.
Regarding PEP adjustments, consider
the following example: A 30-day period
is opened on January 1, 2020 which
would normally span until January 30,
2020. If this 30-day period were not
subject to a PEP adjustment, any 30-day
period beginning within 60 days
following January 30, 2020 would be
considered an adjacent 30-day period.
In the case of a PEP adjustment, the
determination of an adjacent 30-day
period would no longer be based on day
60, but would instead be based on the
latest billable visit in the 30-day period.
Assume in the example, the patient is
transferred to another HHA (triggering
the PEP adjustment) on January 15, 2020
but the last billable visit is provided on
January 13, 2020. In this case, any 30day period beginning within 60 days
following the January 13, 2020 visit
would be considered an adjacent 30-day
period.
Intervening stays in inpatient
facilities will not create any special
considerations in counting the 60-day
gap. If an inpatient stay occurred within
a period, it would not be a part of the
gap, as counting would begin at ‘‘day
60’’ which in this case would be later
than the inpatient discharge date. If an
inpatient stay occurred within the time
after the end of the HH period and
before the beginning of the next one,
those days would be counted as part of
the gap just as any other days would.
If periods are received after a
particular claim is paid that change the
sequence initially assigned to the paid
period (for example, by service dates
PO 00000
Frm 00056
Fmt 4701
Sfmt 4702
falling earlier than those of the paid
period, or by falling within a gap
between paid periods), Medicare
systems will initiate automatic
adjustments to correct the payment of
any necessary periods.
Upon receipt of a HH period coded to
represent the early 30-day period in a
sequence, Medicare systems will search
the period history records that are
maintained for each beneficiary. If an
existing 30-day period is found on that
history, the claim for the new period
will be recoded to represent its
sequence correctly and paid according
to the changed code. In addition, when
any new 30-day period is added to those
history records for each beneficiary, the
coding representing period sequence on
previously paid periods will be checked
to see if the presence of the newly
added period causes the need for
changes to those periods. If the need for
changes is found, Medicare systems will
initiate automatic adjustments to those
previously paid periods.
For example, a given 30-day period is
initially determined to be and paid as
the early period in a sequence of
periods. After some amount of time, a
claim is submitted by another HHA that
occurs before the previously designated
first period in the sequence of adjacent
periods and is less than 60 days before
the beginning of that previously
designated first period. In such a case,
the 30-day period corresponding to the
newly submitted claim becomes the first
30-day period of this sequence of
adjacent 30-day periods and thus is
considered to be an early period. The
30-day period previously designated as
the first 30-day period in the sequence
of periods now becomes the second 30day period in the sequence of adjacent
periods, thus changing its status from
that of an early period to that of a late
period.
We plan to develop materials
regarding timing categories, including
such topics as claims adjustments and
resolution of claims processing issues.
We will also update guidance in the
Medicare Claims Processing Manual, as
well as the Medicare Benefit Manual as
appropriate with detailed procedures.
We will also work with our Medicare
Administrative Contractors (MACs) to
address any concerns regarding the
processing of home health claims as
well as develop training materials to
facilitate all aspects of the transition the
PDGM, including the unique aspects of
the timing categories.
Several commenters responding to the
CY 2018 HH PPS proposed rule had
concerns regarding the potential for
problematic provider behavior due to
financial incentives. We note that we
E:\FR\FM\12JYP2.SGM
12JYP2
32395
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
fully intend to monitor provider
behavior in response to the new PDGM.
As we receive and evaluate new data
related to the provision of Medicare
home health care under the PDGM, we
will reassess the appropriateness of the
payment levels for ‘‘early’’ and ‘‘late’’
periods in a sequence of periods.
Additionally, we will share any
concerning behavior or patterns with
the Medicare Administrative Contracts
(MACs) as well as our Center for
Program Integrity. We plan to monitor
for and identify any variations in the
patterns of care provided to home health
patients, including both increased and
decreased provision of care to Medicare
beneficiaries. We note that an increase
in the volume of Medicare beneficiaries
receiving home health care may, in fact,
represent a positive outcome of the
PDGM, signaling increased access to
care for the Medicare population, so
long as said increase in volume of
beneficiaries is appropriate and in
keeping with eligibility guidelines for
the Medicare home health benefit.
We invite public comments on the
timing categories in the proposed PDGM
and the associated regulations text
changes outlined in section III.F.13. of
this proposed rule.
5. Admission Source Category
In the CY 2018 HH PPS proposed
rule, we described analysis showing the
impact of the source of admission on
home health resource use and proposed
to classify periods into one of two
admission source categories—
community or institutional—depending
on what healthcare setting was utilized
in the 14 days prior to home health (82
FR 35309). We proposed that a 30-day
period would be categorized as
institutional if an acute or post-acute
care (PAC) stay occurred in the 14 days
prior to the start of the 30-day period of
care. We also proposed that a 30-day
period would be categorized as
community if there was no acute or PAC
stay in the 14 days prior to the start of
the 30-day period of care. We proposed
to adopt this categorization by
admission source with the
implementation of alternative case-mix
adjustment methodology refinements.
The proposed admission source
category was discussed in detail in the
CY 2018 HH PPS proposed rule and we
solicited public comments on the
admission source component of the
proposed alternative case-mix
adjustment methodology. Several
commenters expressed their support for
the admission categories within the
framework of the alternative case-mix
adjustment methodology refinements, as
they believe that these groups would be
meaningful and would more
appropriately align the cost of Medicare
home health care with payments,
thereby improving the accuracy of the
HH payment system under the
alternative case-mix adjustment
methodology refinements. Commenters
also expressed a variety of concerns
regarding admission source, stating that
the source of a home health admission
may not always correspond with home
health beneficiary needs and associated
provider costs, that the categories would
discourage the admission of community
entrants due to lower reimbursement,
that the differentiation may encourage
HHAs to favor hospitalization during an
episode of home health care, that
agencies’ ability to provide the care for
beneficiaries in the community would
be reduced, and that small HHAs with
no hospital affiliation would be
negatively impacted. Several
commenters recommended that CMS
consider incorporating other clinical
settings into the definition of the
institutional category, including
hospices and outpatient facilities.
Several commenters also expressed
concern regarding the operational
aspects of the admission source
category, requesting guidance for
retroactive adjustments, plans for the
claims readjustment process due to
institutional claim issues, definitions for
timely filing, and guidance regarding
when occurrence codes may be utilized.
Moreover, in accordance with the
requirement of section 51001 of the BBA
of 2018, a Technical Expert Panel (TEP)
convened in February 2018 to solicit
feedback and identify and prioritize
recommendations from a wide variety of
industry experts and patient
representatives regarding the public
comments received on the proposed
alternative case-mix adjustment
methodology. Comments on the
admission source categories and
suggestions for refinement to this
element of the alternative case-mix
system were very similar between those
received in response to the CY 2018 HH
PPS proposed rule and those provided
by the TEP participants.
We appreciate commenters’ feedback
regarding the admission source element
of the alternative case-mix adjustment
methodology. The intention of the
proposal included in the CY 2018 HH
PPS proposed rule, including the
admission source component, was to
refine and to better fit costs incurred by
agencies for patients with differing
characteristics and needs under the HH
prospective payment system, and we
believe that the differing weights for
source of admission will serve to
promote appropriate alignment between
costs and payment within the HH PPS.
As described in the CY 2018 HH PPS
proposed rule, our analytic findings
demonstrate that institutional
admissions have higher average
resource use when compared with
community admissions, which
ultimately led to the inclusion of the
admission source category within the
framework of the alternative case-mix
adjustment methodology refinements
(82 FR 35309). The differences in care
needs during home health based on
admission source are illustrated in the
resource utilization figures presented in
Table 35, which shows the distribution
of admission sources as well as average
resource use for 30-day periods by
admission source.
TABLE 35—AVERAGE RESOURCE USE BY ADMISSION SOURCE (14 DAY LOOK-BACK; 30 DAY PERIODS) ADMISSION
SOURCE, COMMUNITY AND INSTITUTIONAL ONLY
amozie on DSK3GDR082PROD with PROPOSALS2
Average
resource
use
Frequency
of periods
Percent
of periods
Standard
deviation of
resource
use
25th
percentile of
resource
use
Median
resource
use
75th
percentile of
resource
use
Community ................................................................................
Institutional ................................................................................
$1,363.11
2,171.00
6,408,805
2,215,971
74.3
25.7
$1,119.20
1,303.24
$570.26
1,246.05
$1,062.05
1,920.06
$1,817.75
2,791.91
Total ...................................................................................
1,570.68
8,624,776
100.0
1,221.38
679.12
1,272.18
2,117.47
Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 (as of March 2, 2018).
Institutional admissions have
significantly higher average resource use
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
at $2,171.00 compared with community
admissions at $1,363.11, a difference of
PO 00000
Frm 00057
Fmt 4701
Sfmt 4702
$807.89. Median values of resource use
also show a significant difference
E:\FR\FM\12JYP2.SGM
12JYP2
32396
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
between sources of admission, with
institutional resource use at $1,920.06
while community resource use is at
$1,062.05, a difference of $858.01. The
pattern of higher resource use for
institutional admissions as compared to
community admissions remains
consistent for the 25th and 75th
percentiles, with a difference of
approximately $675 and $974,
respectively.
Additionally, we note that we do not
show preference to any particular
patient profile, but rather aim to better
align home health payment with the
costs associated with providing care. As
discussed in our CY 2018 HH PPS
proposed rule, current research around
those patients who are discharged from
acute and PAC settings shows that these
beneficiaries tend to be sicker upon
admission, are being discharged rapidly
back to the community, and are more
likely to be re-hospitalized after
discharge due to the acute nature of
their illness.35 Additionally, as further
described in the CY 2018 HH PPS
proposed rule, research studies indicate
that patients admitted to home health
from institutional settings are
vulnerable to adverse effects and injury
because of the functional decline that
occurs due to their institutional stay,
indicating that the patient population
referred from an institutional setting
requires more concentrated resources
and supports to account for and mitigate
this functional decline.36 Moreover, as
described in the CY 2018 HH PPS
proposed rule, research suggests that the
reduction in monitoring from the level
typically experienced in an inpatient
facility to that in the home environment
can potentially cause gaps in care and
consequently increased risk for adverse
events for the newly-admitted home
health beneficiary, and any negative
impacts of the transition to the home
setting can be reduced by an appropriate
increase in care for the beneficiary,
particularly through more frequent
assessment of their condition and
ongoing monitoring once transferred to
the home environment.37 Furthermore,
research discussed in our CY 2018 HH
PPS proposed rule shows that
35 O’Connor, M. (2012, February). Hospitalization
Among Medicare-Reimbursed Skilled Home Health
Recipients. Retrieved March 02, 2017, from https://
www.ncbi.nlm.nih.gov/pmc/articles/PMC4690459.
36 Rosati, R. J., Huang, L., Navaie-Waliser, M., &
Feldman, P. H. (2003). Risk Factors for Repeated
Hospitalizations Among Home Healthcare
Recipients. Journal For Healthcare Quality, 25(2),
4–11. doi:10.1111/j.1945–1474.2003.tb01038.x.
37 Forster, A. J. (2003). The Incidence and
Severity of Adverse Events Affecting Patients after
Discharge from the Hospital. Annals of Internal
Medicine, 138(3), 161. doi:10.7326/0003–4819–
138–3–200302040–00007.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
beneficiaries discharged from
institutional settings are more
vulnerable because of, among other
factors, the need to manage new health
care issues, major modifications to
medication interventions, and the
coordination of follow-up
appointments, which could lead to the
risk for adverse drug events, for errors
in a beneficiary’s medication regimen,
and for the need to readmit to the
hospital due to deterioration of the
patient’s condition.38 Additionally, we
note that the goal of the admission
source variable is not to identify or
evaluate for increases in rehospitalization in the home health
beneficiary population but rather to
align payment with the costs of
providing home health care. Other CMS
initiatives such as the HH QRP as well
as the HH VBP demonstration take into
account readmissions, among other
measures of quality. However, because
this population is at higher risk for
possible readmission to an institutional
setting, we believe that more intensive
supports, partnered with differentiated
payment weights, are appropriate in
crafting a payment system that better
reflects the costs incurred by HHAs
while also promoting the delivery of
quality care to the Medicare population.
In summary, clinical research continues
to indicate that the needs of the
institutional population are intensive.
Likewise, our analysis of home health
data shows that costs sustained by home
health agencies for those beneficiaries
admitted from institutional settings are
higher than community entrants.
Therefore, we believe that accounting
for these material differences in the care
needs of the beneficiary population
admitted from institutional settings and
their resultant, differentiated resource
use, will serve to better align payments
with actual costs incurred by HHAs
when caring for Medicare beneficiaries.
We expect that HHAs will continue to
provide the most appropriate care to
Medicare home health beneficiaries,
regardless of admission source or any
other category related to home health
payment. As we noted in the CY 2018
HH PPS proposed rule, the primary goal
of home health care is to provide
restorative care when improvement is
expected, maintain function and health
status if improvement is not expected,
slow the rate of functional decline to
avoid institutionalization in an acute or
38 Meyers, A. G., Salanitro, A., Wallston, K. A.,
Cawthon, C., Vasilevskis, E. E., Goggins, K. M., . . .
Kripalani, S. (2014). Determinants of health after
hospital discharge: Rationale and design of the
Vanderbilt Inpatient Cohort Study (VICS). BMC
Health Services Research, 14(1). doi:10.1186/1472–
6963–14–10.
PO 00000
Frm 00058
Fmt 4701
Sfmt 4702
post-acute care setting, and/or facilitate
transition to end-of-life care as
appropriate (82 FR 35348). The primary
goal of the HH PPS is to align payment
with the costs of providing home health
care. Furthermore, in our CY 2000 HH
PPS final rule, commenters asserted that
patients admitted to home health from
the hospital were often more acutely ill
and resource-intensive than other
patients, particularly when compared
with beneficiaries who had no
institutional care prior to admission (64
FR 41147). We appreciate the concerns
expressed in response to the CY 2018
HH PPS proposed rule regarding
possible behavioral changes by
providers given the perceived incentives
created by the admission source
categories within the alternative casemix adjustment methodology. However,
we continue to expect that HHAs will
provide the appropriate care needed by
all beneficiaries who are eligible for the
home health benefit, including those
beneficiaries with medically-complex
conditions who are admitted from the
community. We will carefully monitor
the outcomes of the proposed change,
including any impacts to community
entrants, and make further refinements
as necessary.
Regarding the incorporation of other
clinical settings into the definition of
the institutional category under the
alternative case-mix adjustment
methodology that some commenters
raised in response to the CY 2018 HH
PPS proposed rule, such as emergency
department (ED) use and observational
stays, we propose to only include those
stays that are considered institutional
stays in other Medicare settings. For
example, observational stays do not
count towards the 3-day window for an
admission to a SNF because they are not
categorized as inpatient. Additionally,
in our analysis of 2017 HH claims data,
we identified those HH stays that,
within the 14 days prior to admission to
HH, had been preceded by ED visits or
outpatient observational stays and
isolated these stays from stays that
would otherwise be grouped into the
community admission source category.
As demonstrated in Table 36, 30-day
periods of care for beneficiaries with a
preceding ED visit (which would
otherwise be grouped into the
community admission source category)
do not show higher resource use when
compared to those beneficiaries entering
from acute or PAC settings, with an
average resource use at $1,660.64 per
home health period as compared to
$2,171.00 for institutional admits. When
compared with those patients admitted
from the community, admissions from
E:\FR\FM\12JYP2.SGM
12JYP2
32397
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
the ED show somewhat higher resource
use at $1,660.64 per home health period
as compared to $1,337.73 for
community admits. We note that the
volume of patients with preceding ED
visits is relatively low, at about 5.8
percent of total home health periods.
TABLE 36—AVERAGE RESOURCE USE BY ADMISSION SOURCE (14 DAY LOOK-BACK, 30 DAY PERIODS) ADMISSION
SOURCE: COMMUNITY, INSTITUTIONAL, AND EMERGENCY DEPARTMENT
Average
resource
use
Number of
30-day
periods
Percent of
30-day
periods
Standard
deviation of
resource
use
25th
percentile of
resource
use
Median
resource
use
75th
percentile of
resource
use
Community ................................................................................
Institutional ................................................................................
Emergency Department ............................................................
$1,337.73
2,171.00
1,660.64
5,905,217
2,215,971
503,588
68.5
25.7
5.8
$1,108.57
1,303.24
1,197.60
$558.54
1,246.05
782.63
$1,035.34
1,920.06
1,396.50
$1,779.73
2,791.91
2,225.38
Total ...................................................................................
1,570.68
8,624,776
100.0
1,221.38
679.12
1,272.18
2,117.47
Similarly, 30-day periods for
beneficiaries with preceding
observational stays (which would
otherwise be grouped into the
community admission source category)
also do not show higher resource use
when compared to those beneficiaries
entering from acute or PAC settings, as
described in Table 37, with average
resource use at $1,820.06 per home
health period as compared to $2,171.00
for institutional admits.
TABLE 37—AVERAGE RESOURCE USE BY ADMISSION SOURCE (14 DAY LOOK-BACK; 30 DAY PERIODS) ADMISSION
SOURCE: COMMUNITY, INSTITUTIONAL, AND OBSERVATIONAL STAYS
amozie on DSK3GDR082PROD with PROPOSALS2
Average
resource
use
Number of
30-day
periods
Percent of
30-day
periods
Standard
deviation
of resource
use
25th
percentile
of resource
use
Median
resource
use
75th
percentile
of resource
use
Community ................................................................................
Institutional ................................................................................
Observational Stays ..................................................................
$1,350.90
2,171.00
1,820.06
6,242,043
2,215,971
166,762
72.4%
25.7%
1.9%
$1,114.94
1,303.24
1,180.96
$564.31
1,246.05
960.15
$1,048.86
1,920.06
1,589.08
$1,799.27
2,791.91
2,399.68
Total ...................................................................................
1,570.68
8,624,776
100.0%
1,221.38
679.12
1,272.18
2,117.47
When compared with those patients
admitted from the community,
admissions from observational stays
show higher resource use at $1,820.06
per home health period as compared to
$1,350.90 for community admits.
However, the volume of patients with
preceding observational stays is very
low, at about 2 percent of total home
health periods.
In summary, home health stays with
preceding observational stays and ED
visits show resource use that falls
between that of the institutional and
community categories. However, the
resource use is not equivalent to that of
the institutional settings; therefore, we
do not believe it appropriate to include
observational stays and ED visits in the
institutional category for the purposes of
the PDGM. Additionally, including
these stays in the institutional category
would lead to a small reduction in the
overall average resource use and related
case mix weights for groups admitted
from acute and PAC settings. Moreover,
including ED or observational stays with
discharges from acute care hospitals,
LTCHs, IRFs and SNFs would be
inconsistent with section 1861(tt)(1) of
the Act, which defines the term ‘‘postinstitutional home health services’’ as
discharges from hospitals (which
include IRFs and LTCHs) and SNFs
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
within 14 days of when home health
care is initiated.
We explored the option of creating a
third admission source category
specifically for observational stays/ED
visits. In order to more fully understand
the potential impact of a third category,
we analyzed the overall impact of the
creation of such a category. For the
purposes of this analysis, in the event
that a home health stay was preceded by
both an institutional stay and an
observation stay or ED visit, the case
would be grouped into the institutional
category. Our findings indicate for those
HH stays with a preceding outpatient
observational stay/ED visit, the overall
payment weight for associated groups
for ‘‘early’’ 30-day periods (as defined in
section III.F.4 of this rule) would be
approximately 6 percent higher than the
community admission counterparts,
whereas institutional stays would see
weights that are approximately 19
percent higher than community
admissions. When examining the
overall payment weights for ‘‘late’’ 30day periods (as defined in section III.F.4
of this rule), HH stays with a preceding
outpatient admission would observe
weights that are approximately 10
percent higher than the community
admission counterparts, whereas
institutional stays would see weights
PO 00000
Frm 00059
Fmt 4701
Sfmt 4702
that are approximately 43 percent
higher than community admissions.
However, we are concerned that a third
admission source category for
observational stays and ED visits could
create an incentive for providers to
encourage outpatient encounters both
prior to a 30-day period of care or
within a 30-day period of care within 14
days of the start of the next 30-day
period, thereby potentially
inappropriately increasing costs to the
Medicare program overall. The clinical
threshold for an observational stay or an
ED visit is not as high as that required
for an institutional admission, and we
are concerned that home health agencies
may encourage beneficiaries to engage
with emergency departments before
initiating a home health stay.
For example, in the FY 2014 IPPS/
LTCH PPS final rule and also the
Medicare Benefit Policy Manual Chapter
1—Inpatient Hospital Services Covered
Under Part A, CMS clarified and
specified in the regulations that an
individual becomes an inpatient of a
hospital, including a long term care
hospital or a Critical Access Hospital,
when formally admitted as such
pursuant to an order for inpatient
admission by a physician or other
qualified practitioner described in the
final regulations (78 FR 50495). The
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32398
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
order is required for payment of hospital
inpatient services under Medicare Part
A. CMS also specified that for those
hospital stays in which the physician
expects the beneficiary to require care
that crosses two midnights and admits
the beneficiary based upon that
expectation, Medicare Part A payment is
generally appropriate. Additionally, for
the purposes of admissions to skilled
nursing facilities, the Medicare Benefit
Policy Manual Chapter 8—Coverage of
Extended Care (SNF) Services Under
Hospital Insurance states that in order to
qualify for post-hospital extended care
services, the individual must have been
an inpatient of a hospital for a medically
necessary stay of at least three
consecutive calendar days and that time
spent in observation or in the
emergency room prior to (or in lieu of)
an inpatient admission to the hospital
does not count toward the 3-day
qualifying inpatient hospital stay, as a
person who appears at a hospital’s
emergency room seeking examination or
treatment or is placed on observation
has not been admitted to the hospital as
an inpatient; instead, the person
receives outpatient services.
Furthermore, admission to an inpatient
rehabilitation facility (IRF) requires that
for IRF care to be considered reasonable
and necessary, the documentation in the
patient’s IRF medical record must
demonstrate a reasonable expectation
that the patient must require active and
ongoing intervention of multiple
therapy disciplines, at least one of
which must be PT or OT; require an
intensive rehabilitation therapy
program, generally consisting of 3 hours
of therapy per day at least 5 days per
week; or in certain well-documented
cases, at least 15 hours of intensive
rehabilitation therapy within a 7consecutive day period, beginning with
the date of admission; reasonably be
expected to actively participate in, and
benefit significantly from the intensive
rehabilitation therapy program; require
physician supervision by a
rehabilitation physician, with face-toface visits at least 3 days per week to
assess the patient both medically and
functionally and to modify the course of
treatment as needed; and require an
intensive and coordinated
interdisciplinary team approach to the
delivery of rehabilitative care, as
described in detail in Medicare Benefit
Policy Manual, Chapter 1—Inpatient
Hospital Services Covered Under Part A
110.2—Inpatient Rehabilitation Facility
Medical Necessity Criteria.
Conversely, CMS specified that for
hospital stays in which the physician
expects the patient to require care less
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
than two midnights, payment under
Medicare Part A is generally
inappropriate. (However, we note that
in the CY 2016 Outpatient Prospective
Payment System final rule, CMS
adopted a policy such that for stays for
which the physician expects the patient
to need less than two midnights of
hospital care (and the procedure is not
on the inpatient-only list or otherwise
listed as a national exception), an
inpatient admission may be payable
under Medicare Part A on a case-by-case
basis based on the judgment of the
admitting physician (80 FR 70297).)
Regarding emergency department
visits by Medicare beneficiaries,
services are generally covered by
Medicare Part B in instances where a
beneficiary experiences an injury, a
sudden illness, or an illness that quickly
worsens. In the case of observational
stays, as described in the Medicare
Claims Processing Manual, Chapter 12,
observation care is a well-defined set of
specific, clinically appropriate services,
which include ongoing short term
treatment, assessment, and reassessment
before a decision can be made regarding
whether patients will require further
treatment as hospital inpatients or if
they are able to be discharged from the
hospital. As described in the Medicare
Benefit Policy Manual, Chapter 6—
Hospital Services Covered Under Part B
20.6—Outpatient Observation Services,
observation services are commonly
ordered for patients who present to the
emergency department and who then
require a significant period of treatment
or monitoring in order to make a
decision concerning their admission or
discharge. Moreover, the Medicare
Claims Processing Manual in Chapter
4—Part B Hospital, 290—Outpatient
Observation Services states that
observation services are covered by
Medicare only when provided by the
order of a physician or another
individual authorized by state licensure
law and hospital staff bylaws to admit
patients to the hospital or to order
outpatient tests. In the majority of cases,
the decision whether to discharge a
patient from the hospital following
resolution of the reason for the
observation care or to admit the patient
as an inpatient can be made in less than
48 hours, usually in less than 24 hours.
In only rare and exceptional cases do
reasonable and necessary outpatient
observation services span more than 48
hours. In summary, the clinical
thresholds for coverage and payment for
an admission to institutional settings are
higher when compared with ED visits
and observational stays. Finally, we
note that the proportion of home health
PO 00000
Frm 00060
Fmt 4701
Sfmt 4702
periods with admissions from ED visits
and observational stays is low relative to
community and institutional
counterparts. Creating a third
community admission source category
for observational stays and ED visits
would potentially introduce added
complexity into the payment system for
a small portion of home health stays,
which could lead to the creation of
payment groups that contain very few
stays with very little difference in casemix weights across the landscape of
groups.
For all of these reasons, we believe
that incorporating HH stays with
preceding observational stays and ED
visits into the community admission
category is most appropriate at this
time. However, we note that as we
receive and evaluate new data related to
the provision of Medicare home health
care under the PDGM, we will continue
to assess the appropriateness of the
payment levels for admission source
within a home health period and give
consideration to any cost differentiation
evidenced by the resources required by
those home health patients with a
preceding outpatient event.
Regarding the operational aspects of
the admission source category, as
described in the CY 2018 HH PPS
proposed rule, we have developed
automated claims processing procedures
with the goal of reducing the amount of
administrative burden associated with
the admission source category of the
alternative case-mix adjustment
methodology (82 FR 35309). For
example, Medicare systems will
automatically determine whether a
beneficiary has been discharged from an
institutional setting for which Medicare
paid the claim, using information used
during claims processing to
systematically identify admission
source and address this issue. When the
Medicare claims processing system
receives a Medicare home health claim,
the systems will check for the presence
of a Medicare acute or PAC claim for an
institutional stay. If such an
institutional claim is found, and the
institutional stay occurred within 14
days of the home health admission, our
systems will trigger an automatic
adjustment of the corresponding HH
claim to the appropriate institutional
category. Similarly, when the Medicare
claims processing system receives a
Medicare acute or PAC claim for an
institutional stay, the systems will
check for the presence of a subsequent
HH claim with a community payment
group. If such a HH claim is found, and
the institutional stay occurred within 14
days of the home health admission, our
systems will trigger an automatic
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
adjustment of the HH claim to the
appropriate institutional category. This
process may occur any time within the
12-month timely filing period for the
acute or PAC claim. The OASIS
assessment will not be utilized in
evaluating for admission source
information.
Moreover, as we also proposed in the
CY 2018 HH PPS proposed rule, we
propose in this rule that newly-created
occurrence codes would also be
established, allowing HHAs to manually
indicate on Medicare home health
claims that an institutional admission
had occurred prior to the processing of
an acute or PAC Medicare claim, if any,
in order to receive the higher payment
associated with the institutional
admission source sooner (82 FR 35312).
However, the usage of the occurrence
codes is limited to situations in which
the HHA has information about the
acute or PAC stay. We also noted that
the use of these occurrence codes would
not be limited to home health
beneficiaries for whom the acute or PAC
claims were paid by Medicare. HHAs
would also use the occurrence codes for
beneficiaries with acute or PAC stays
paid by other payers, such as the
Veterans Administration (VA).
If a HHA does not include on the HH
claim the occurrence code indicating
that a home health patient had a
previous institutional stay, processed
either by Medicare or other institutions
such as the VA, such an admission will
be categorized as ‘‘community’’ and
paid accordingly. However, if later a
Medicare acute or PAC claim for an
institutional stay occurring within 14
days of the home health admission is
submitted within the timely filing
deadline and processed by the Medicare
systems, the HH claim would be
automatically adjusted and recategorized as an institutional
admission and appropriate payment
modifications would be made. If there
was a non-Medicare institutional stay
occurring within 14 days of the home
health admission but the HHA was not
aware of such a stay, upon learning of
such a stay, the HHA would be able to
resubmit the HH claim that included an
occurrence code, subject to the timely
filing deadline, and payment
adjustments would be made
accordingly.
We note that the Medicare claims
processing system will check for the
presence of an acute or PAC Medicare
claim for an institutional stay occurring
within 14 days of the home health
admission on an ongoing basis and
automatically assign the home health
claim as ‘‘community’’ or
‘‘institutional’’ appropriately. As a
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
result, with respect to a HH claim with
a Medicare institutional stay occurring
within 14 days of home health
admission, we will not require the
submission of an occurrence code in
order to appropriately categorize the HH
claim to the applicable admission
source. With respect to a HH claim with
a non-Medicare institutional stay
occurring with 14 days of home health
admission, a HHA would need to
submit an occurrence code on the HH
claim in order to have the HH claim
categorized as ‘‘institutional’’ and paid
the associated higher amount.
Additionally, we plan to provide
education and training regarding all
aspects of the admission source process
and to develop materials for guidance
on claims adjustments, for resolution of
claims processing issues, for defining
timely filing windows, and for
appropriate usage of occurrence codes
through such resources as the Medicare
Learning Network. We will also update
guidance in the Medicare Claims
Processing Manual as well as the
Medicare Benefit Policy Manual as
appropriate with detailed procedures.
We will also work with our Medicare
Administrative Contractors (MACs) to
address any concerns regarding the
processing of home health claims as
well as develop training materials to
facilitate all aspects of the transition to
the PDGM, including the unique aspects
of the admission source categories.
With regards to the length of time for
resubmission of home health claims that
reflect a non-Medicare institutional
claim, all appropriate Medicare rules
regarding timely filing of claims will
still apply. Procedures required for the
resubmission of home health claims will
apply uniformly for those claims that
require editing due to the need to add
or remove occurrence codes. Details
regarding the timely filing guidelines for
the Medicare program are available in
the Medicare Claims Processing Manual,
Chapter 1—General Billing
Requirements, which is available at the
following website: https://
www.cms.gov/Regulations-andGuidance/Guidance/Manuals/
downloads/clm104c01.pdf.
Additionally, adjustments to any resubmitted home health claims will be
processed in the same manner as other
edited Medicare home health claims.
Additionally, we plan to perform robust
testing within the Medicare claims
processing system to optimize and
streamline the payment process.
Regarding the process by which HHAs
should verify a non-Medicare
institutional stay, as we noted in in the
CY 2018 HH PPS proposed rule, we
expect home health agencies would
PO 00000
Frm 00061
Fmt 4701
Sfmt 4702
32399
utilize discharge summaries from all
varieties of institutional providers (that
is, Medicare and non-Medicare) to
inform the usage of these occurrence
codes, and these discharge documents
should already be part of the
beneficiary’s home health medical
record used to support the certification
of patient eligibility as outlined in
§ 424.22(c) (82 FR 35309). Providers
should utilize existing strategies and
techniques for verification of such stays
and incorporate relevant clinical
information into the plan of care, as is
already required by our Conditions of
Participation.
Our evaluation process within the
Medicare claims processing system will
check for the presence of an acute or
PAC Medicare claim for an institutional
stay occurring within 14 days of the
home health admission on an ongoing
basis. Under this approach, the
Medicare systems would only evaluate
for whether an acute or PAC Medicare
claim for an institutional stay occurring
within 14 days of the home health
admission was processed by Medicare,
not whether it was paid. Therefore, we
do not expect that a home health claim
will be denied due to unpaid Medicare
claims for preceding acute or PAC
admissions. Moreover, as previously
stated above, we note that providers
would have the option to submit the
occurrence code indicating a preceding
institutional stay in order to categorize
the home health admission as
‘‘institutional.’’ In the case of a HHA
submitting an occurrence code because
of a preceding Medicare institutional
stay, if upon medical review after
finding no Medicare acute or PAC
claims in the National Claims History,
and there is documentation of a
Medicare acute or PAC stay within the
14 days prior to the home health
admission, but the institutional setting
did not submit its claim in a timely
fashion, or at all, we would permit the
institutional categorization for the
payment of the home health claim
through appropriate administrative
action. Similarly, in the case of a HHA
submitting an occurrence code because
of a preceding non-Medicare
institutional stay, if documentation of a
non-Medicare acute or PAC stay within
the 14 days prior to the home health
admission, is found, we would permit
the categorization of the home health
claim as ‘‘institutional’’.
However, if upon medical review after
finding no acute or PAC Medicare
claims in the National Claims History,
and there is no documentation of an
acute or PAC stay, either a Medicare or
non-Medicare stay, within 14 days of
the home health admission, we would
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32400
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
correct the overpayment. If upon
medical review after finding no
Medicare acute or PAC claims in the
National Claims History and we find
that an HHA is systematically including
occurrence codes that indicate the
patient’s admission source was
‘‘institutional,’’ but no documentation
exists in the medical record of Medicare
or non-Medicare stays, we would refer
the HHA to the zone program integrity
contractor (ZPIC) for further review.
Moreover, we intend to consider
targeted approaches for medical review
after the implementation of the
admission source element of the PDGM,
including potentially identifying HHAs
that have claims that are consistently
associated with acute or PAC denials,
whose utilization pattern of acute or
PAC occurrence codes is aberrant when
compared with their peers, or other
such metrics that would facilitate any
targeted reviews.
For all of the reasons described above,
we are proposing to establish two
admission source categories for
grouping 30-day periods of care under
the PDGM—institutional and
community—as determined by the
healthcare setting utilized in the 14 days
prior to home health admission. We are
proposing that 30-day periods for
beneficiaries with any inpatient acute
care hospitalizations, skilled nursing
facility (SNF) stays, inpatient
rehabilitation facility (IRF) stays, or long
term care hospital (LTCH) stays within
the 14 days prior to a home health
admission would be designated as
institutional admissions. We are
proposing that the institutional
admission source category would also
include patients that had an acute care
hospital stay during a previous 30-day
period of care and within 14 days prior
to the subsequent, contiguous 30-day
period of care and for which the patient
was not discharged from home health
and readmitted (that is, the admission
date and from date for the subsequent
30-day period of care do not match) as
we acknowledge that HHAs have
discretion as to whether they discharge
the patient due to a hospitalization and
then readmit the patient after hospital
discharge. However, we are proposing
that we would not categorize PAC stays
(SNF, IRF, LTCH stays) that occur
during a previous 30-day period and
within 14 days of a subsequent,
contiguous 30-day period of care (that
is, the admission date and from date for
the subsequent 30-day period of care do
not match) as institutional, as we would
expect the HHA to discharge the patient
if the patient required PAC in a different
setting and then readmitted the patient,
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
if necessary, after discharge from such
setting. If the patient was discharged
and then readmitted to home health, the
admission date and ‘‘from’’ date on the
30-day claim would match and the
claims processing system will look for
an acute or a PAC stay within 14 days
of the home health admission date. This
admission source designation process
would be applicable to institutional
stays paid by Medicare or any other
payer. All other 30-day periods would
be designated as community
admissions.
For the purposes of a RAP, we would
only adjust the final home health claim
submitted for source of admission. For
example, if a RAP for a community
admission was submitted and paid, and
then an acute or PAC Medicare claim
was submitted for that patient before the
final home health claim was submitted,
we would not adjust the RAP and would
only adjust the final home health claim
so that it reflected an institutional
admission. Additionally, HHAs would
only indicate admission source
occurrence codes on the final claim and
not on any RAPs submitted.
We invite public comments on the
admission source component of the
proposed PDGM payment system.
6. Clinical Groupings
In the CY 2018 HH PPS proposed rule
(82 FR 35307), we discussed the
findings of the Home Health Study
Report to Congress, which indicates that
the current payment system may
encourage HHAs to select certain types
of patients over others.39 Patients with
a higher severity of illness, including
those receiving a greater level of skilled
nursing care; for example, patients with
wounds, with ostomies, or who are
receiving total parenteral nutrition or
mechanical ventilation were associated
with higher resource use and lower
margins. This may have produced a
disincentive for providing care for
patients with higher clinical acuity, and
thereby may have limited access of
home health services to these vulnerable
patient populations.40 We noted that
payment should be predicated on
resource use and proposed that
adjusting payment based on identified
39 Report to Congress. Medicare Home Health
Study: An Investigation on Access to Care and
Payment for Vulnerable Patient Populations.
Available at https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
HomeHealthPPS/Downloads/HH-Report-toCongress.pdf.
40 Report to the Congress: Medicare Payment
Policy. (2015)Home health care services: Assessing
payment adequacy and updating payments. Ch.9
http://www.medpac.gov/docs/default-source/
reports/chapter-9-home-health-care-services-march2015-report-.pdf?sfvrsn=0.
PO 00000
Frm 00062
Fmt 4701
Sfmt 4702
clinical characteristics and associated
services would better align payment
with resource use.
For these reasons, we propose
grouping 30-day periods of care into six
clinical groups: Musculoskeletal
Rehabilitation, Neuro/Stroke
Rehabilitation, Wounds—Post-Op
Wound Aftercare and Skin/NonSurgical Wound Care, Behavioral Health
Care (including Substance Use
Disorder), Complex Nursing
Interventions, Medication Management,
Teaching and Assessment (MMTA).
These clinical groups are designed to
capture the most common types of care
that HHAs provide. We propose
placement of each 30-day period of care
into a specific clinical group based on
the primary reason the patient is
receiving home health care as
determined by the principal diagnosis
reported on the claim. Although the
principal diagnosis code is the basis for
the clinical grouping, secondary
diagnosis codes and patient
characteristics would then be used to
case-mix adjust the period further
through the comorbidity adjustment and
functional level. A complete list of ICD–
10–CM codes and their assigned clinical
groupings is posted on the CMS HHA
Center web page (https://www.cms.gov/
center/provider-Type/home-HealthAgency-HHA-Center.html). More
information on the analysis and
development of the groupings can be
found in the CY 2018 HH PPS proposed
rule as well as the HHGM technical
report from December 2016, also
available on the HHA Center webpage.
In the CY 2018 HH PPS proposed
rule, we solicited comments on the
clinical groups and the assigned clinical
groupings of the ICD–10–CM codes.
Additionally, in February 2018, a
Technical Expert Panel (TEP) was held
in order to gain insight from industry
leaders, clinicians, patient
representatives, and researchers with
experience in home health care and/or
experience in home health agency
management. Many commenters and
TEP members supported the patientcentered approach to grouping patients
by clinical characteristics, and several
commenters felt that the clinical
groupings did capture the majority of
characteristics of the home health
population. Specifically, commenters
generally approved of the higherweighted complex nursing and wound
groups, and agreed with the
‘‘importance the HHGM places on these
complex patients through its proposed
payment rate.’’ One commenter stated
that ‘‘the most complex and costly
beneficiaries for a HHA are those that
require intensive nursing care, while
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
those that require intensive therapy
produce a significant margin with less
cost.’’ Additional comments on the
clinical groups generally included the
following: Concern that some diagnosis
codes are not used to group claims into
the six clinical groups; concern about
reduced therapy use in the clinical
groups that aren’t specifically for
musculoskeletal or neurological
rehabilitation; concern that the groups
do not capture clinically complex
patients that require multiple home
health disciplines; suggestions that the
clinical groups should be based on
impairments rather than diagnoses; and
concern that the MMTA clinical group
encompasses too many diagnosis codes.
Several commenters expressed concern
that certain ICD 10–CM diagnosis codes
were not used for payment (for example,
codes that were not used to group
claims into the six clinical groupings),
which could possibly restrict access to
the benefit or force beneficiaries to seek
care in institutional settings. Others had
concerns regarding specific diagnosis
codes they felt should be reassigned to
different clinical groups.
As outlined in the HHGM technical
report from December 2016 and in the
CY 2018 HH PPS proposed rule (82 FR
35314), there were several reasons why
a diagnosis code was not assigned to
one of the six clinical groups. These
included if the diagnosis code was too
vague, meaning the code does not
provide adequate information to support
the need for skilled home health
services (for example H57.9,
Unspecified disorder of eye and
adnexa); the code, based on ICD 10–CM,
American Hospital Association (AHA)
Coding Clinic, or Medicare Code Edits
(MCE) would indicate a non-home
health service (for example, dental
codes); the code is a manifestation code
subject to a manifestation/etiology
convention, meaning that the etiology
code must be reported as the principal
diagnosis, or the code is subject to a
code first sequencing convention (for
example, G99.2 myelopathy in diseases
classified elsewhere); the code identifies
a condition which would be unlikely to
require home health services (for
example, L81.2, Freckles); the code is
restricted to the acute care setting per
ICD 10–CM/AHA Coding Clinic, or the
diagnosis indicates death as the
outcome (for example S06.1X7A,
Traumatic cerebral edema with loss of
consciousness of any duration with
death due to brain injury prior to
regaining consciousness). We did,
however, review and re-group certain
codes based on commenter feedback.
For example, with regard to the
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
classification of N39.0, Urinary tract
infection, site not specified as an invalid
code to group the home health period of
care, we do agree that absent definitive
information provided by the referring
physician, a home health clinician
would not know the exact site of a
urinary tract infection (UTI). As such,
Urinary tract infection, site not specified
(N39.0) will be grouped under MMTA,
as the home health services required
would most likely involve teaching
about the treatment for the UTI, as well
as evaluating the effectiveness of the
medication regimen. We encourage
HHAs to review the list of diagnosis
codes in the PDGM Grouping Tool
posted on the HHA Center web page at:
https://www.cms.gov/center/providerType/home-Health-Agency-HHACenter.html. Additionally, the ICD–10–
CM code set exceeds the ICD–9–CM in
the number of diagnoses and conditions
and contains codes that are much more
granular. Therefore, we disagree that
excluding certain codes from payment
will restrict access, considering the
increase in diagnoses potentially
requiring home health.
With regard to commenter concern
that the HHGM clinical groups did not
account for the need for therapy in
home health periods that are not
specifically grouped into
musculoskeletal or neurological
rehabilitation, we continue to expect the
ordering physician, in conjunction with
the therapist to develop and follow a
plan of care for any home health patient,
regardless of clinical group, as outlined
in the skilled service requirements at
§ 409.44, when therapy is deemed
reasonable and necessary. Although the
principal diagnosis is a contributing
factor in the PDGM and determines the
clinical group, it is not the only
consideration in determining what
home health services are needed in a
patient’s plan of care. It is the
responsibility of the patient’s treating
physician to determine if and what type
of therapy the patient needs regardless
of clinical grouping. In accordance with
§ 409.44(c)(1)(i), the therapy goals must
be established by a qualified therapist in
conjunction with the physician when
determining the plan of care. As such,
therapy may likely be included in the
plan of care for a patient in any of the
six clinical groupings. Any therapy
indicated in the plan of care is expected
to meet the requirements outlined in
§ 409.44, which states that all therapy
services must relate directly and
specifically to a treatment regimen
(established by the physician, after any
needed consultation with the qualified
therapist). Additional requirements
PO 00000
Frm 00063
Fmt 4701
Sfmt 4702
32401
dictate that the amount, frequency, and
duration of the services must be
reasonable and necessary, as determined
by a qualified therapist and/or
physician, using accepted standards of
clinical practice. One goal in developing
the PDGM is to provide an appropriate
payment based on the identified
resource use of different patient groups,
not to encourage, discourage, value, or
devalue one type of skilled care over
another.
Likewise, for patients requiring two or
three home health disciplines, the
PDGM takes into account the functional
level and comorbidities of the patient
after the primary reason for the period
is captured by the clinical grouping.
Decreasing functional status, as
indicated by a specific set of OASIS
items, and the presence of certain
comorbid conditions, is associated with
increased resource use. Here is where,
when combined with the clinical
grouping, any multi-disciplinary
therapy patients would be captured. For
instance, a patient grouped into the
Neuro-Rehabilitation clinical grouping
with a high Functional Level (meaning
high functional impairment) indicates
increased therapy needs, potentially
utilizing all skilled therapy disciplines.
Additionally, the comorbidity
adjustment further case mixes the
period and increases payment to capture
the additional resource use for a patient
regardless of whether the services are
skilled nursing or therapy based.
Therefore, a patient with complex
needs, including multiple therapy
disciplines and medical management, is
captured by the combination of the
different levels of the PDGM.
Furthermore, the current case-mix
adjustment methodology does not
differentiate between utilization of
therapy disciplines and whether or not
all three are utilized for the same
patient. We have determined that the
PDGM’s functional level when
combined with the clinical grouping
and comorbidity adjustment actually
provides a much clearer picture of the
patient’s needs, particularly in relation
to therapy services.
Comments on the CY 2018 HH PPS
proposed rule and at the 2018 TEP
indicated that diagnosis does not always
correlate with need and that
impairments and functional limitations
are better predictors of therapy services.
Additionally, some commenters stated
that clinicians are more likely to focus
on impairments and functional
limitations when conceptualizing
overall patient care, and suggested using
them as the basis for the clinical groups
rather than diagnosis codes. We do
agree that diagnosis alone does not
E:\FR\FM\12JYP2.SGM
12JYP2
32402
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
provide the entire clinical picture of the
home health patient; however, in the
same way the clinical group is one
aspect of the PDGM, therapy services
are only one aspect of home health. In
fact, the multidisciplinary nature of the
benefit is precisely the reason that
diagnosis should be an important aspect
of the clinical groupings model. The
various home health disciplines have
different but overlapping roles in
treating the patient; however, a
diagnosis is used across disciplines and
has important implications for patient
care. A patient’s diagnosis consists of a
known set of signs and symptoms
agreed upon by the medical community.
Each different healthcare discipline uses
these identifiable signs and symptoms
to apply its own approach and skill set
to treat the patient. However, it remains
a patient centered approach.
Several commenters and TEP
participants alike, stated that the MMTA
clinical group is too broad and should
be divided into more clinical groups or
subgroups. One commenter questioned
whether it made sense to assign patients
to different clinical groupings if roughly
60 percent of 30-day periods will fall
into the MMTA category. Others
considered it an ‘‘other’’ category that
was counter to the goal of clarifying the
need for home health.
A significant goal of the PDGM is to
clearly define what types of services are
provided in home health and accurately
ascribe payment to resource use. Our
analysis showed that there are four very
broad categories of interventions
frequently provided in the home that are
not attributable to one specific
intervention or diagnosis: Health
teaching; guidance and counseling; case
management; treatments and
procedures; and surveillance. These
categories cross the spectrum of
diagnoses, medications, and
interventions, which understandably is
why this clinical grouping represents
the majority of home health episodes.
We believe that these four broad
categories of interventions in MMTA
cannot be underestimated in
importance. We stated in the CY 2018
HH PPS proposed rule that many home
health patients have multi-morbidity
and polypharmacy, making education
and surveillance crucial in the
management of the home health patient
in order to prevent medication errors
and adverse effects. However, the
principal diagnosis necessitating home
care for these patients may not involve
a complex nursing intervention,
behavioral health, rehabilitation, or
wound care. This group represents a
broader, but no less important reason for
home care. We believe MMTA is not so
much an ‘‘other’’ category as much as it
appears to represent the foundation of
home health. Many commenters
highlighted the complexity of home
health patients; pointing to multimorbidity, ‘‘quicker and sicker’’
discharges, and polypharmacy as
important factors in maintaining home
health access. CMS agrees that these
issues alone are important reasons for
ordering home health services and
necessitate their own clinical grouping.
When initially developing the model,
we looked at breaking MMTA into
subgroups in order to account for
differences amongst diagnoses within
the broader category of this group. We
found that the variation in resource use
was similar across those subgroups and
determined separating diagnoses further
would only serve to make the model
more complex and without significant
variations in case-mix. However, in
response to public comments and the
discussion at the 2018 TEP,20 we
performed further analysis on the
division of MMTA into subgroups in
order to estimate the payment regression
if these groups were separated from
MMTA. We conducted a thorough
review of all the diagnosis codes
grouped into MMTA. We then grouped
the codes into subgroups based on
feedback from public comments, which
mainly focused on cardiac, oncology,
infectious, and respiratory diagnoses.
We created the additional subgroups
(Surgical/Procedural Aftercare, Cardiac/
Circulatory, Endocrine, GI/GU,
Infectious Diseases/Neoplasms,
Respiratory, and Other) based on data
that showed above-average resource use
for the codes in those groups, and then
combined certain groups that had a
minimal number of codes. Those results
are shown in Table 38.
TABLE 38—DISTRIBUTION OF RESOURCE USE BY 30-DAY PERIODS
[MMTA subgroups]
amozie on DSK3GDR082PROD with PROPOSALS2
Subgroup
N
Mean
Median
Aftercare ......................................................................................................................................
Cardiac/Circulatory ......................................................................................................................
Endocrine .....................................................................................................................................
GI/GU ...........................................................................................................................................
Infectious Diseases/Neoplasms/Blood-forming Diseases ...........................................................
Respiratory ...................................................................................................................................
Other ............................................................................................................................................
304,871
1,594,149
425,077
402,322
347,755
724,722
1,226,750
$1,605.43
1,433.02
1,524.45
1,414.44
1,400.65
1,411.61
1,366.56
$1,326.03
1,121.27
1,062.41
1,115.29
1,077.58
1,122.23
1,035.76
Total ......................................................................................................................................
5,025,646
1,428.17
1,105.20
Table 39 shows the impact each
MMTA variable has on case-mix weight.
The impact is calculated by taking the
regression coefficient for each variable
(unreported here) and dividing by the
average resource use of the 30-day
periods in the model. Model 1 shows
the result when MMTA clinical group is
not separated into subgroups. Model 1
shows that all else equal, being in
MMTA—Low Functional impairment
causes no increase in case-mix weight
(for example, a 30-day period’s case-mix
weight would be calculated with the
coefficients from the constant of the
model plus the admission source/timing
of the period plus the comorbidity
adjustment). A 30-day period in
MMTA—Medium Functional would
increase the case-mix weight by 0.1560.
A 30-day period in MMTA—High
Functional would increase the case-mix
weight by 0.2731. Model 2 shows the
same information but now includes the
MMTA subgroups. In any given
functional level, many of the MMTA
subgroups have an impact on the casemix weight that is similar to what is
found in Model 1. For example, a period
in MMTA (Other)—Medium Functional
20 https://www.cms.gov/center/provider-Type/
home-Health-Agency-HHA-Center.html.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00064
Fmt 4701
Sfmt 4702
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
has an increase in case-mix of 0.1568
(which is very similar to the 0.1560
value found in Model 1). There are some
groups like Aftercare, Endocrine, and
GI/GU which show different impacts
than Model 1. Also, to a lesser extent
these differences also exist for the
‘‘Infectious Diseases/Neoplasms/Blood
forming Diseases’’ and ‘‘Respiratory’’
subgroups. Some of these differences are
driven by periods which are paid using
an outlier adjustment. Model 3 removes
32403
outliers and the corresponding results
for the Endocrine subgroup are very
similar to Model 1. Some differences
(for example in Aftercare) persist;
however, the change in case-mix weight
remains similar to Model 1.
TABLE 39—CHANGE IN CASE-MIX WEIGHT ASSOCIATED WITH MMTA VARIABLES
Variable
MMTA—Low Functional .......................................................................................................
MMTA—Medium Functional .................................................................................................
MMTA—High Functional ......................................................................................................
MMTA (Other)—Low Functional ...........................................................................................
MMTA (Other)—Medium Functional ....................................................................................
MMTA (Other)—High Functional ..........................................................................................
MMTA (Aftercare)—Low Functional .....................................................................................
MMTA (Aftercare)—Medium Functional ...............................................................................
MMTA (Aftercare)—High Functional ....................................................................................
MMTA (Cardiac/Circulatory)—Low Functional .....................................................................
MMTA (Cardiac/Circulatory)—Medium Functional ...............................................................
MMTA (Cardiac/Circulatory)—High Functional ....................................................................
MMTA (Endocrine)—Low Functional ...................................................................................
MMTA (Endocrine)—Medium Functional .............................................................................
MMTA (Endocrine)—High Functional ...................................................................................
MMTA (GI/GU)—Low Functional .........................................................................................
MMTA (GI/GU)—Medium Functional ...................................................................................
MMTA (GI/GU)—High Functional .........................................................................................
MMTA (Infectious Diseases/Neoplasms/Blood forming Diseases)—Low Functional ..........
MMTA (Infectious Diseases/Neoplasms/Blood forming Diseases)—Medium Functional ....
MMTA (Infectious Diseases/Neoplasms/Blood forming Diseases)—High Functional .........
MMTA (Respiratory)—Low Functional .................................................................................
MMTA (Respiratory)—Medium Functional ...........................................................................
MMTA (Respiratory)—High Functional ................................................................................
The results show that the change in
case-mix weight was minimal for the 30day periods assigned to these subgroups
compared to the case-mix weights
without the subgroups. Additionally,
the impact of other variables in the
model (admission source/timing,
comorbidity adjustment) on the final
case-mix weights were similar whether
or not MMTA subgroups were used.
Overall, using the MMTA subgroup
model would result in more payment
groups but not dramatic differences in
case-mix weights across those groups.
For this reason, we are not proposing to
divide the MMTA clinical group into
subgroups and to leave them as is
shown in Table 40. However, we are
soliciting comments from the public on
whether there may be other compelling
reasons why MMTA should be broken
Model 1
Model 2
Change in
case-mix
weight
Change in
case-mix
weight
0.000
0.1560
0.2731
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
........................
0.000
0.1568
0.2896
¥0.1082
0.0798
0.2588
¥0.0239
0.1371
0.2737
0.1105
0.2859
0.4071
¥0.0751
0.0997
0.1992
¥0.0452
0.1068
0.2281
¥0.0501
0.1027
0.2241
Model 3
(outliers
excluded)
Change in
case-mix
weight
........................
........................
........................
0.000
0.1523
0.2748
¥0.1196
0.0701
0.2491
¥0.0050
0.1652
0.2952
0.0282
0.1833
0.3086
¥0.0639
0.1256
0.2231
¥0.0472
0.1128
0.2379
¥0.0488
0.1163
0.2400
out into subgroups as shown in Table
38, even if the additional subgroups do
not result in significant differences in
case-mix weights across those
subgroups. We note that we also plan
continue to examine trends in reporting
and resource utilization to determine if
future changes to the clinical groupings
are needed after implementation of the
PDGM.
TABLE 40—PROPOSED CLINICAL GROUPS USED IN THE PDGM
amozie on DSK3GDR082PROD with PROPOSALS2
Clinical groups
The primary reason for the home health encounter is to provide:
Musculoskeletal Rehabilitation ............................
Neuro/Stroke Rehabilitation ................................
Wounds—Post-Op Wound Aftercare and Skin/
Non-Surgical Wound Care.
Behavioral Health Care .......................................
Complex Nursing Interventions ...........................
Medication Management, Teaching and Assessment (MMTA).
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
Therapy (physical, occupational or speech) for a musculoskeletal condition.
Therapy (physical, occupational or speech) for a neurological condition or stroke.
Assessment, treatment & evaluation of a surgical wound(s); assessment, treatment & evaluation of non-surgical wounds, ulcers, burns, and other lesions.
Assessment, treatment & evaluation of psychiatric conditions, including substance use disorders.
Assessment, treatment & evaluation of complex medical & surgical conditions including IV,
TPN, enteral nutrition, ventilator, and ostomies.
Assessment, evaluation, teaching, and medication management for a variety of medical and
surgical conditions not classified in one of the above listed groups.
PO 00000
Frm 00065
Fmt 4701
Sfmt 4702
E:\FR\FM\12JYP2.SGM
12JYP2
32404
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
7. Functional Levels and Corresponding
OASIS Items
amozie on DSK3GDR082PROD with PROPOSALS2
As part of the overall payment
adjustment under an alternative casemix adjustment methodology, in the CY
2018 Home Health Prospective Payment
System proposed rule (82 FR 35317), we
proposed including a functional level
adjustment to account for the resource
costs associated with providing home
health care to those patients with
functional impairments. Research has
shown a relationship exists between
functional status, rates of hospital
readmission, and the overall costs of
health care services.42 Functional status
is defined in a number of ways, but
generally, functional status reflects an
individual’s ability to carry out
activities of daily living (ADLs) and to
participate in various life situations and
in society.43 CMS currently requires the
collection of data on functional status in
home health through a standardized
assessment instrument: The Outcome
and Assessment Information Set
(OASIS). Under the current HH PPS, a
functional status score is derived from
the responses to those items and this
score contributes to the overall case-mix
adjustment for a home health episode
payment.
Including functional status in the
case-mix adjustment methodology
allows for higher payment for those
patients with higher service needs. As
functional status is commonly used for
risk adjustment in various payment
systems, including in the current HH
PPS, we proposed that the alternative
case-mix adjustment methodology
would also adjust payments based on
responses to selected functional OASIS
items that have demonstrated higher
resource use. Therefore, we examined
every OASIS item for potential
inclusion in the alternative case-mix
adjustment methodology including
those items associated with functional
status.
Generally, worsening functional
status is associated with higher resource
use, indicating that the responses to
functional OASIS items may be useful
as adjustors to construct case-mix
weights for an alternative case-mix
adjustment methodology. However, due
42 Burke, R. MD, MS, Whitfield, E. Ph.D., Hittle,
D. Ph.D., Min, S. Ph.D., Levy, C. MD, Ph.D.,
Prochazka, A. MD, MS, Coleman, E. MD, MPH,
Schwartz, R. MD, Ginde, A. (2016). ‘‘Hospital
Readmission From Post-Acute Care Facilities: Risk
Factors, Timing, and Outcomes’’. The Journal of
Post-Acute Care and Long Term Care Medicine.
(17), 249–255.
43 Clauser, S. Ph.D., and Arlene S. Bierman, M.D.,
M.S. (2003). ‘‘Significance of Functional Status Data
for Payment and Quality’’. Health Care Financing
Review. 24(3), 1–12.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
to the lack of variation in resource use
across certain responses and because
certain responses were infrequently
chosen, we combined some responses
into larger response categories to better
capture the relationship between
worsening functional status and
resource use. The resulting
combinations of responses for these
OASIS items are found at Exhibit 7–2 in
the HHGM technical report, ‘‘Overview
of the Home Health Groupings Model,’’
on the HHA Center web page.44
Each OASIS item included in the final
model has a positive relationship with
resource use, meaning as functional
status declines (as measured by a higher
response category), periods have more
resource use, on average. As such, in the
CY 2018 HH PPS proposed rule, we
proposed that the following OASIS
items would be included as part of the
functional level adjustment under an
alternative case-mix adjustment
methodology:
• M1800: Grooming.
• M1810: Current Ability to Dress
Upper Body.
• M1820: Current Ability to Dress
Lower Body.
• M1830: Bathing.
• M1840: Toilet Transferring.
• M1850: Transferring.
• M1860: Ambulation/Locomotion.
• M1033 Risk of Hospitalization (at
least four responses checked, excluding
responses #8, #9, and #10).45
In the CY 2018 HH PPS proposed
rule, we discussed how under the
HHGM a home health period of care
receives points based on each of the
responses associated with the proposed
functional OASIS items which are then
converted into a table of points
corresponding to increased resource
use. That is, the higher the points, the
higher the functional impairment. The
sum of all of these points’ results in a
functional impairment score which is
used to group home health periods into
a functional level with similar resource
use. We proposed three functional
impairment levels of low, medium, and
high with approximately one third of
home health periods from each of the
clinical groups within each level. This
means home health periods in the low
impairment level have responses for the
proposed functional OASIS items that
are associated with the lowest resource
use on average. Home health periods in
the high impairment level have
44 https://downloads.cms.gov/files/
hhgm%20technical%20report%20120516
%20sxf.pdf.
45 Exclusions of the OASIS C–1 Item M1033
include, response #8: ‘‘currently reports
exhaustion’’; response #9: ‘‘other risk(s) not listed
in 1–8; response #10: None of the above.
PO 00000
Frm 00066
Fmt 4701
Sfmt 4702
responses for the proposed functional
OASIS items that are associated with
the highest resource use on average. We
also proposed that the functional
impairment level thresholds would vary
between the clinical groups to account
for the patient characteristics within
each clinical group associated with
increased resource costs affected by
functional impairment. We provided a
detailed analysis of the development of
the functional points and the functional
impairment level thresholds by clinical
group in the HHGM technical report 46
and in Tables 36 and 37 in the CY 2018
HH PPS proposed rule (82 FR 35321).
In the CY 2018 HH PPS proposed
rule, we solicited comments on the
proposed functional OASIS items, the
associated points, and the thresholds by
clinical group used to group patients
into three functional impairment levels
under the HHGM, as outlined above.
The majority of comments received
were from physical therapists, physical
therapy assistants, occupational
therapists, and national physical,
occupational, and speech-language
pathology associations. Likewise, a
Technical Expert Panel (TEP) was
convened in February 2018 to collect
perspectives, feedback, and identify and
prioritize recommendations from a wide
variety of industry experts and patient
representatives regarding the public
comments received on the proposed
HHGM. Comments were very similar
between those received on the CY 2018
HH PPS proposed rule and those made
by the TEP participants.
Most commenters agreed that the
level of functional impairment should
be included as part of the overall casemix adjustment in a revised case-mix
model. Likewise, commenters were
generally supportive of the OASIS items
selected to be used in the functional
level payment adjustment. Commenters
noted that the role of patient
characteristics and functional status as
an indicator of resource use is a wellestablished principle in rehabilitation
care. Some commenters stated that
adopting a similar component in the
home health payment system will help
to remove the incentive to provide
unnecessary therapy services to reach
higher classifications for payment but
will also move the HH PPS toward
greater consistency with other postacute care prospective payment systems.
Other comments received on the
functional impairment level adjustment
46 ‘‘Medicare Home Health Prospective Payment
System: Case-Mix Methodology Refinements
Overview of the Home Health Groupings Model’’
located at https://downloads.cms.gov/files/
hhgm%20technical%20report%20
120516%20sxf.pdf.
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
encompassed several common themes:
The effect of the IMPACT Act
provisions on the HHGM; adequacy of
the functional impairment thresholds
and corresponding payment
adjustments; potential HHA behavioral
changes to the provision of home health
services; the impact of the removal of
therapy thresholds on HHAs; and
recommendations for the inclusion of
other OASIS items into the functional
impairment level adjustment.
We note that the analysis presented in
the CY 2018 HH PPS proposed rule was
based on CY 2016 home health episodes
using version OASIS–C1/ICD–10 data
set, which did not include the
aforementioned IMPACT Act functional
items. To accommodate new data being
collected for the Home Health Quality
Reporting Program in support of the
IMPACT Act, CMS has proposed to add
the functional items, Section GG,
‘‘Functional Abilities and Goals’’, to the
OASIS data set effective January 1,
2019. Because these GG functional items
are not required to be collected on the
OASIS until January 1, 2019, we do not
have the data to determine the effect, if
any, of these newly added items on
resource costs during a home health
period of care. However, if the
alternative case-mix adjustment
methodology, is implemented in CY
2020, we would continue to examine
the effects of all OASIS items, including
the ‘‘GG’’ functional items, on resource
use to determine if any refinements are
warranted.
Addressing those comments regarding
the use and adequacy of the functional
impairment thresholds to adjust
payment, we remind commenters that
the structure of categorizing functional
impairment into Low, Medium, and
High levels has been part of the home
health payment structure since the
implementation of the HH PPS. The
current HH PPS groups’ scores are based
on functional OASIS items with similar
average resource use within the same
functional level, with approximately a
third of episodes classified as low
functional score, a third of episodes are
classified as medium functional score,
and a third of episodes are classified as
high functional score. Likewise, the
PDGM groups’ scores would be based on
functional OASIS items with similar
resource use and would have three
levels of functional impairment severity:
Low, medium and high. However, the
three functional impairment thresholds
vary between the clinical groups to
account for the patient characteristics
within that clinical group associated
with increased resource costs affected
by functional impairment. This is to
further ensure that payment is more
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
accurately aligned with actual patient
resource needs. As such, we believe the
more granular structure of these
functional levels provides the
information needed on functional
impairment and allows greater
flexibility for clinicians to tailor a more
patient-centered home health plan of
care to meet the individualized needs of
their patients. As HHA-reported OASIS
information determines the functional
impairment levels, accurate reporting on
the OASIS will help to ensure that the
case-mix adjustment is in alignment
with the actual level of functional
impairment.
Concerns regarding HHAs changing
the way they provide services to eligible
beneficiaries, specifically therapy
services, should be mitigated by the
more granular functional impairment
level adjustment (for example,
functional thresholds which vary
between each of the clinical groups).
The functional impairment level casemix payment adjustment is reflective of
the resource costs associated with these
reported OASIS items and therefore
ensures greater payment accuracy based
on patient characteristics. We believe
that this approach will help to maintain
and could potentially increase access to
needed therapy services. We remind
HHAs that the provision of home health
services should be based on patient
characteristics and identified care
needs. This could include those patients
with complex and/or chronic care
needs, or those patients requiring home
health services over a longer period of
time or for which there is no
measureable or expected improvement.
While the majority of commenters
agreed that the elimination of therapy
thresholds is appropriate because of the
financial incentive to overprovide
therapy services, some commenters
indicated that the reductions in
payment for therapy visits could result
in a decrease in HHA viability and
could force some HHAs to go out of
business, such as those HHAs that
provide more therapy services than
nursing. We note that section
51001(a)(3) of the BBA of 2018 amended
section 1894(b)(4)(B) of the Act to
prohibit the use of therapy thresholds as
part of the overall case-mix adjustment
for CY 2020 and subsequent years.
Consequently, we have no regulatory
discretion in this matter.
Several commenters provided
recommendations for additional OASIS
items for inclusion to account for
functional impairment. Most notably,
commenters suggested adding OASIS
items associated with cognition,
instrumental activities of daily living
(IADLs), and caregiver support. The
PO 00000
Frm 00067
Fmt 4701
Sfmt 4702
32405
current HH PPS does not use OASIS
items associated with cognition, IADLs,
or caregiver support to case-mix adjust
for payment. Nonetheless, the
relationship between cognition and
functional status is important and welldocumented in health care literature so
we included them in our analysis
because they generally have clinical
significance based on research and
standards of practice. As described in
the CY 2018 HH PPS proposed rule and
the technical report, we examined every
single OASIS item and its effect on
costs. These included those OASIS
items associated with cognition, IADLs,
and caregiver support. Only those
OASIS items associated with higher
resource costs were considered for
inclusion in the functional level
adjustment in the HHGM. Despite
commenters’ recommendations, the
variables suggested were only
minimally helpful in explaining or
predicting resource use and most
reduced the amount of actual payment.
As such, we excluded variables
associated with cognition, IADLs, and
caregiver support because they would
decrease payment for a home health
period of care which is counter to the
purpose of a case-mix adjustment under
the HHGM. The complete analysis of all
of the OASIS items can be found in the
HHGM technical report on the HHA
Center web page.47
After careful consideration of all
comments received on the functional
level adjustment as part of an alternative
case-mix adjustment methodology, we
believe that the three PDGM functional
impairment levels in each of the six
clinical groups are designed to capture
the level of functional impairment. We
believe that the more granular nature of
the levels of functional impairment by
clinical group would encourage
therapists to determine the appropriate
services for their patients in accordance
with identified needs rather than an
arbitrary threshold of visits. While the
functional level adjustment is not meant
to be a direct proxy for the therapy
thresholds, the PDGM has other casemix variables to adjust payment for
those patients requiring multiple
therapy disciplines or those chronically
ill patients with significant functional
impairment. We believe that also
accounting for timing, source of
admission, clinical group (meaning the
primary reason the patient requires
home health services), and the presence
of comorbidities will provide the
necessary adjustments to payment to
ensure that care needs are met based on
47 https://downloads.cms.gov/files/hhgm%20
technical%20report%20120516%20sxf.pdf.
E:\FR\FM\12JYP2.SGM
12JYP2
32406
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
actual patient characteristics. Therefore,
we continue to uphold that the
functional impairment level adjustment
is sufficient and along with the other
case-mix adjustments, payment will
better align with the costs of providing
services.
In summary, we are proposing that
the OASIS items identified in the CY
2018 HH PPS proposed rule would be
included as part of the functional
impairment level payment adjustment
under the proposed PDGM. These items
are:
• M1800: Grooming.
• M1810: Current Ability to Dress
Upper Body.
• M1820: Current Ability to Dress
Lower Body.
• M1830: Bathing.
• M1840: Toilet Transferring.
• M1850: Transferring.
• M1860: Ambulation/Locomotion.
• M1033: Risk of Hospitalization.48
We are proposing that a home health
period of care receives points based on
each of the responses associated with
the proposed functional OASIS items
which are then converted into a table of
points corresponding to increased
resource use (See Table 41). The sum of
all of these points results in a functional
score which is used to group home
health periods into a functional level
with similar resource use. We are
proposing three functional levels of low
impairment, medium impairment, and
high impairment with approximately
one third of home health periods from
each of the clinical groups within each
functional impairment level (See Table
42). The CY 2018 HH PPS Proposed rule
(82 FR 35320) and the technical report
posted on the HHA Center web page
provide a more detailed explanation as
to the construction of these functional
impairment levels using the proposed
OASIS items.
TABLE 41—OASIS POINTS TABLE FOR THOSE ITEMS ASSOCIATED WITH INCREASED RESOURCE USE USING A REDUCED
SET OF OASIS ITEMS, CY 2017
Points
(2017)
Response category
M1800: Grooming ......................................................................................
M1810: Current Ability to Dress Upper Body ............................................
M1820: Current Ability to Dress Lower Body ............................................
2 .................................................................................................................
M1830: Bathing ..........................................................................................
M1840: Toilet Transferring ........................................................................
M1850: Transferring ..................................................................................
M1860: Ambulation/Locomotion ................................................................
M1033: Risk of Hospitalization ..................................................................
1 .......................................................
1 .......................................................
1 .......................................................
11 .....................................................
1 .......................................................
2 .......................................................
3 .......................................................
1 .......................................................
1 .......................................................
2 .......................................................
1 .......................................................
2 .......................................................
3 .......................................................
4 or more items checked ................
4
6
5
20.9
3
13
21
4
4
8
11
13
25
11
Percent
of periods
in 2017
with this
response
category
56.9
60.0
59.3
18.0
53.1
23.6
32.1
37.8
59.2
25.2
52.8
14.8
17.8
Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017(as of March 2, 2018).
TABLE 42—THRESHOLDS FOR FUNCTIONAL LEVELS BY CLINICAL GROUP, CY 2017
Clinical group
Level of impairment
MMTA ...........................................................................................................................
Low ...........................................................
Medium .....................................................
High ...........................................................
Low ...........................................................
Medium .....................................................
High ...........................................................
Low ...........................................................
Medium .....................................................
High ...........................................................
Low ...........................................................
Medium .....................................................
High ...........................................................
Low ...........................................................
Medium .....................................................
High ...........................................................
Low ...........................................................
Medium .....................................................
High ...........................................................
Behavioral Health .........................................................................................................
Complex Nursing Interventions ....................................................................................
Musculoskeletal Rehabilitation .....................................................................................
amozie on DSK3GDR082PROD with PROPOSALS2
Neuro Rehabilitation .....................................................................................................
Wound ..........................................................................................................................
Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 (as of March 2, 2018).
48 In Version OASIS C–2 (effective 1/1/2018),
three responses are excluded: #8:‘‘currently reports
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
exhaustion’’, #9: ‘‘other risks not listed in 1–8’’, and
#10: ‘‘None of the above’’.
PO 00000
Frm 00068
Fmt 4701
Sfmt 4702
E:\FR\FM\12JYP2.SGM
12JYP2
Points
(2017 data)
0–37
38–53
54+
0–38
39–53
54+
0–36
37–57
58+
0–39
40–53
54+
0–45
46–61
62+
0–43
44–63
64+
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
32407
Table 43 shows the average resource
use by clinical group and functional
level for CY 2017:
TABLE 43—AVERAGE RESOURCE USE BY CLINICAL GROUP AND FUNCTIONAL LEVEL, CY 2017
Mean
resource use
MMTA—Low ................
MMTA—Medium ..........
MMTA—High ................
Behavioral Health—Low
Behavioral Health—Medium ..........................
Behavioral Health—
High ..........................
Complex—Low .............
Complex—Medium .......
Complex—High ............
MS Rehab—Low ..........
MS Rehab—Medium ....
MS Rehab—High .........
Neuro—Low .................
Neuro—Medium ...........
Neuro—High ................
Wound—Low ................
Wound—Medium .........
Wound—High ...............
Total ......................
Frequency of
periods
Percent of
periods
Standard
deviation of
resource use
25th
Percentile of
resource use
Median
resource use
75th
Percentile of
resource use
$1,236.05
1,487.24
1,667.38
971.26
1,650,146
1,709,484
1,402,299
98,193
19.1
19.8
16.3
1.1
$1,076.20
1,162.37
1,274.53
845.25
$511.06
628.29
719.29
397.45
$907.38
1,202.12
1,371.99
686.39
$1,632.74
2,020.73
2,265.39
1,285.36
1,309.40
93,145
1.1
990.34
557.57
1,064.55
1,784.48
1,485.06
1,313.78
1,668.06
1,771.05
1,545.07
1,731.15
1,900.89
1,591.74
1,833.25
1,945.49
1,663.25
1,893.35
2,044.09
1,570.68
96,899
104,504
104,717
97,779
587,873
536,444
469,117
308,011
287,788
303,787
275,383
238,063
261,144
8,624,776
1.1
1.2
1.2
1.1
6.8
6.2
5.4
3.6
3.3
3.5
3.2
2.8
3.0
100.0
1,092.42
1,194.16
1,415.99
1,527.71
1,048.07
1,111.26
1,243.84
1,163.69
1,271.31
1,420.56
1,271.45
1,370.79
1,520.35
1,221.38
653.44
553.50
694.35
704.28
779.96
931.97
1,009.66
744.21
900.27
899.47
790.83
927.26
975.19
679.12
1,233.97
953.84
1,275.32
1,336.79
1,323.12
1,527.46
1,672.76
1,323.86
1,568.22
1,618.16
1,328.52
1,550.78
1,644.10
1,272.18
2,027.14
1,669.45
2,202.65
2,361.61
2,055.60
2,293.96
2,520.57
2,127.18
2,467.92
2,629.54
2,152.26
2,475.29
2,669.06
2,117.47
Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 (as of March 2, 2018).
Like the annual recalibration of the
case-mix weights under the current HH
PPS, we expect that annual
recalibrations would also be made to the
PDGM case-mix weights. If the PDGM is
finalized for CY 2020, we will update
the functional points and thresholds
using the most current claims data
available. Likewise, we would continue
to analyze all of the components of the
case-mix adjustment, including
adjustment for functional status, and
would make refinements as necessary to
ensure that payment for home health
periods are in alignment with the costs
of providing care. We invite comments
on the proposed OASIS items and the
associated points and thresholds used to
group patients into three functional
impairment levels under the PDGM, as
outlined above.
amozie on DSK3GDR082PROD with PROPOSALS2
8. Comorbidity Adjustment
The alternative case-mix adjustment
methodology proposed in the CY 2018
HH PPS proposed rule, groups home
health periods based on the primary
reason for home health care (principal
diagnosis), functional level, admission
source, and timing. To further account
for differences in resource use based on
patient characteristics, in the CY 2018
HH PPS proposed rule, we proposed to
use the presence of comorbidities as
part of the overall case-mix adjustment
under the alternative case-mix
adjustment methodology. Specifically,
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
we proposed a home health specific list
of comorbidities further refined into
broader, body system-based categories
and more granular subcategories to
capture those conditions that affect
resource costs during a home health
period of care. The proposed
comorbidities included those conditions
that represent more than 0.1 percent of
periods and had at least as high as the
median resource use as they indicate a
direct relationship between the
comorbidity and resource utilization.
Specifically, we proposed a list based
on the principles of patient assessment
by body systems and their associated
diseases, conditions, and injuries to
develop larger categories of conditions
that identified clinically relevant
relationships associated with increased
resource use. The broad, body systembased categories we proposed to use to
group comorbidities within the HHGM
included the following:
• Heart Disease
• Respiratory Disease
• Circulatory Disease and Blood
Disorders
• Cerebral Vascular Disease
• Gastrointestinal Disease
• Neurological Disease and Associated
Conditions
• Endocrine Disease
• Neoplasms
• Genitourinary and Renal Disease
• Skin Disease
• Musculoskeletal Disease or Injury
PO 00000
Frm 00069
Fmt 4701
Sfmt 4702
• Behavioral Health (including
Substance Use Disorders)
• Infectious Disease
These broad categories used to group
comorbidities within the alternative
case-mix adjustment methodology were
further refined by grouping similar
diagnoses within the broad categories
into statistically and clinically
significant subcategories which would
receive the comorbidity adjustment in
the alternative case-mix adjustment
methodology (for example, Heart
Disease 1; Cerebral Vascular Disease 4).
All of the comorbidity diagnoses
grouped into the aforementioned
categories and subcategories are posted
on the Home Health Agency web page
and listed in the HHGM technical report
at the following link: https://
www.cms.gov/Center/Provider-Type/
Home-Health-Agency-HHA-Center.html.
We originally proposed that if a 30day period of care had at least one
secondary diagnosis reported on the
home health claim that fell into one of
the subcategories, that 30-day period of
care would receive a comorbidity
adjustment to account for higher costs
associated with the comorbidity.
Therefore, the payment adjustment for
comorbidities would be predicated on
the presence of one of the identified
diagnoses within the subcategories
associated with increased resource use
at or above the median. The comorbidity
adjustment amount would be the same
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32408
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
across all of the subcategories. A 30-day
period of care would receive only one
comorbidity adjustment regardless of
the number of secondary diagnoses
reported on the home health claim that
fell into one of the subcategories
associated with higher resource use. If
there is no reported diagnosis that meets
the comorbidity adjustment criteria, the
30-day period of care would not qualify
for the payment adjustment.
We solicited comments on the
proposed comorbidity adjustment in the
CY 2018 HH PPS proposed rule,
including the proposed comorbidity
diagnoses and their associated
subcategories, as part of the overall
alternative case-mix adjustment
methodology. While all commenters
supported the inclusion of a
comorbidity adjustment, most
commenters said that a single
comorbidity payment amount as part of
the overall case-mix adjustment is
insufficient to fully capture the home
health needs and resource costs
associated with the presence of
comorbidities. Meeting the requirement
of section 51001 of the BBA of 2018, a
Technical Expert Panel (TEP) was
convened in February 2018 to collect
perspectives, feedback, and identify and
prioritize recommendations from a wide
variety of industry experts and patient
representatives regarding the public
comments received on the proposed
alternative case-mix adjustment
methodology. Comments on the
comorbidity adjustment and suggestions
for refinement to this adjustment were
very similar between those received on
the CY 2018 HH PPS proposed rule and
those made by the TEP participants.
Specifically, the majority of commenters
stated that the presence of multiple
comorbidities has more of an effect on
home health resource use than a single
comorbidity and that any case-mix
adjustment should account for multiple
comorbidities. There was general
agreement that most home health
patients have multiple conditions which
increase the complexity of their care
and affects the ability to care for one’s
self at home. Several suggested that
CMS should let the data help determine
how many comorbidity adjustment
levels there should be and what
percentage of 30-day periods should be
in each level. Some commenters stated
they preferred specificity and
complexity over simplicity if the
complexity improved accuracy. Others
suggested including interactions
between comorbidities in the model,
specifically interactions of comorbid
conditions with the principal diagnosis
and with other comorbidities.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
Commenters and TEP members alike
focused on those conditions they saw as
most impactful on the provision of care
to home health beneficiaries. These
conditions included chronic respiratory
and cardiac conditions, as well as
psychological and diabetes-related
conditions. Most encouraged CMS to
continue to develop a system to allow
for appropriate changes to be made over
time to the list of comorbidity
subcategories that would assign a
comorbidity adjustment to a 30-day
period of care.
We agree with commenters that the
relationship between comorbidities and
resource use can be complex and that a
single adjustment, regardless of the type
or number of comorbidities, may be
insufficient to fully capture the resource
use of a varied population of home
health beneficiaries. However, we also
recognize that adjusting payment based
on the number of reported comorbidities
may encourage HHAs to inappropriately
report comorbid conditions in order to
increase payment, regardless of any true
impact on the home health plan of care.
Currently, OASIS instructions state that
clinicians must list each diagnosis for
which the patient is receiving home care
and to enter the level of highest
specificity as required by ICD–10 CM
coding guidelines. These instructions
state that clinicians should list
diagnoses in the order that best reflects
the seriousness of each condition and
supports the disciplines and services
provided.49 We also note that CMS
currently uses interaction items as part
of the HH PPS case-mix adjustments. In
the CY 2008 HH PPS final rule (72 FR
49772), we added secondary diagnoses
and their interactions with the principal
diagnosis as part of the clinical
dimension in the overall case-mix
adjustment. However, analysis since
then has shown that nominal case-mix
growth became an ongoing issue
resulting from the incentive in the
current HH PPS to code only those
conditions associated with clinical
points even though the data did not
show an associated increase in resource
utilization. Likewise, when we looked at
a multi-morbidity approach to the
overall case-mix adjustment to a home
health period of care, for the CY 2018
HH PPS proposed rule our analysis
showed that the reporting of secondary
diagnoses on home health claims was
not robust enough to support a payment
adjustment based on the presence of
49 ‘‘Outcome and Assessment I OASIS
Information Set C2 Guidance Manual Effective
January 1, 2018 accessed at https://www.cms.gov/
Medicare/Quality-Initiatives-Patient-AssessmentInstruments/HomeHealthQualityInits/Downloads/
OASIS–C2-Guidance-Manual-Effective_1_1_18.pdf.
PO 00000
Frm 00070
Fmt 4701
Sfmt 4702
multiple comorbidities. This means that
the data did not show significant
variations in resource use with an
increase in reported comorbidities.
In spite of concerns of potential
manipulation of coding patterns to
increase payment due to the
comorbidity adjustment, the results of
our most recent analyses for this
proposed rule show compelling
evidence that patients with certain
comorbidities and interactions of certain
comorbid conditions (as described later
in this section) have home health
episodes with higher resource use than
home health episodes without those
comorbidities or interactions. The goal
of our analyses was to identify those
clinically and statistically significant
comorbidities and interactions that
could be used to further case-mix adjust
a 30-day home health period of care. As
a result of these analyses, we identified
that there were certain individual
comorbidity subgroups and interactions
of the comorbidity subgroups (for
example, having diagnoses associated
with two of the comorbidity subgroups)
which could be used as part of the
comorbidity case-mix adjustment in the
PDGM.
To identify these relationships with
resource utilization, we looked at all
diagnoses reported on the OASIS
(M1021, M1023, and M1025) for each
30-day period of care. These fields
represent 18 different diagnoses which
could be reported on the OASIS. In the
PDGM, the principal diagnosis assigns
each 30-day period of care into a
clinical group which identifies the
primary reason the patient requires
home health services. During our
analysis, this usually was the reported
principal diagnosis, but in cases where
the diagnosis did not link to a clinical
group (for example, the diagnosis could
not be reported as a principal diagnosis
in accordance with ICD–10 CM coding
guidelines), we used a secondary
diagnosis to assign the 30-day period of
care into a clinical group. Any other
diagnoses, except the one used to link
the 30-day period of care into a clinical
group, were considered comorbidities.
However, if one of those comorbid
diagnoses was in the same ICD–10 CM
block of codes as the diagnosis used to
place the 30-day period of care into a
clinical group, then that comorbid
diagnosis was excluded (for example, if
the reported principal diagnosis was
I63.432, Cerebral infarction due to
embolism of left post cerebral artery,
and the reported secondary diagnosis
was I65.01, Occlusion and stenosis of
right vertebral artery, I65.01 would be
excluded as a comorbidity as both codes
are in the same block of ICD–10
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
diagnosis codes, Cerebrovascular
Diseases, and both would group into the
Neuro clinical group if reported as the
principal diagnosis). Then, we checked
those reported comorbid diagnoses
against the home health-specific
comorbidity subgroup list to see if any
reported secondary diagnoses are listed
in a subgroup (for example, if a reported
secondary diagnosis was I50.9, Heart
Failure, unspecified, this diagnosis is
found in the Heart 11 subgroup).
We went through the following steps
to determine which individual
comorbidity subgroups would be used
as part of the comorbidity adjustment:
• After dropping the comorbidity
subgroups with a small number of 30-
day periods of care (for example, those
that made up fewer than 0.1 percent of
30-day periods of care), this left 59
different comorbidity subgroups.
• Of those, there are 56 comorbidity
subgroups with a p-value less than or
equal to 0.05.
• Of those 56 subgroups, there are 22
comorbidity subgroups that have a
positive coefficient when regressing
resource use on the comorbidity
subgroups (and the interactions as
described below) and indicators for the
clinical group, functional level,
admission source, and timing. We
determine the median coefficient of
those 22 comorbidity subgroups to be
$60.67.
32409
• There are 11 comorbidity subgroups
with coefficients that are at or above the
median (for example, $60.67 or above).
This is a decrease from the 15 subgroups
presented in the CY 2018 HH PPS
proposed rule. Potential reasons for this
decrease include the use of CY 2017
data in this analysis, whereas the 2018
HH PPS proposed rule used CY 2016
data; the combination and/or addition of
comorbidity groups; and the inclusion
of the interactions between the
comorbidities.
Those 11 individual comorbidity
subgroups that are statistically and
clinically significant for potential
inclusion in the comorbidity case-mix
adjustment are listed below in Table 44:
TABLE 44—INDIVIDUAL SUBGROUPS FOR COMORBIDITY ADJUSTMENT
Comorbidity
subgroup
Description
Neuro 11 ...............
Neuro 10 ...............
Circulatory 9 ..........
Heart 11 ................
Cerebral 4 .............
Neuro 5 .................
Skin 1 ....................
Neuro 7 .................
Circulatory 10 ........
Skin 3 ....................
Skin 4 ....................
Includes diabetic retinopathy and other blindness ..........................................................................................
Includes diabetic neuropathies ........................................................................................................................
Includes acute and chronic embolisms and thrombosis ..................................................................................
Includes heart failure ........................................................................................................................................
Includes sequelae of cerebrovascular diseases ..............................................................................................
Includes Parkinson’s Disease ..........................................................................................................................
Includes cutaneous abscess, cellulitis, and lymphangitis ................................................................................
Includes hemiplegia, paraplegia, and quadriplegia .........................................................................................
Includes varicose veins with ulceration ...........................................................................................................
Include diseases of arteries, arterioles and capillaries with ulceration and non-pressure chronic ulcers ......
Includes stages Two-Four and unstageable pressure ulcers by site ..............................................................
Coefficient
$61.23
67.98
86.62
101.57
128.78
144.99
174.93
204.42
215.67
365.78
484.83
Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 (as of March 2, 2018).
Next, we examined the impact of
interactions between the various
comorbidity subgroups on resource use.
The following steps show how we
identified which interactions (for
example, diagnoses from two different
comorbidity subgroups) had a clinically
and statistically significant relationship
with increased resource utilization and
could be used for the comorbidity
adjustment:
• After dropping the combinations of
comorbidity subgroups and interactions
with a small number of 30-day periods
of care (that is, those that made up fewer
than 0.1 percent of 30-day periods of
care), there are 343 different
comorbidity subgroup interactions (for
example, comorbidity subgroup
interaction Skin 1 plus Skin 3). As
mentioned previously, we regressed
resource use on the comorbidity
subgroups, the interactions, and
indicators for the clinical group,
functional level, admission source, and
timing.
• From that regression, we found 187
comorbidity subgroup interactions with
a p-value less than or equal to 0.05.
• Of those 187 comorbidity subgroup
interactions, there are 27 comorbidity
subgroup interactions where the
coefficient on the comorbidity subgroup
interaction term plus the coefficients on
both single comorbidity variables equals
a value that exceeds $150. We used
$150 as the inclusion threshold as this
amount is approximately three times
that of the median value for the
individual comorbidity subgroups and
we believe is appropriate to reflect the
increased resource use associated with
comorbidity interactions. The 27
comorbidity subgroup interactions that
are statistically and clinically significant
for potential inclusion in the
comorbidity adjustment are listed in
Table 45.
amozie on DSK3GDR082PROD with PROPOSALS2
TABLE 45—COMORBIDITY SUBGROUP INTERACTIONS FOR COMORBIDITY ADJUSTMENT
Sum of
interaction
term plus
single
comorbidity
coefficients
Comorbidity
subgroup
interaction
Comorbidity
subgroup
Description
Comorbidity
subgroup
Description
1 ..................
2 ..................
3 ..................
Circulatory 4 ....
Endocrine 3 .....
Neuro 3 ...........
Hypertensive Chronic Kidney Disease ........
Diabetes with Complications ........................
Dementia in diseases classified elsewhere
Neuro 11 .........
Neuro 7 ...........
Skin 3 ..............
$151.98
162.35
190.30
4 ..................
5 ..................
6 ..................
Circulatory 4 ....
Cerebral 4 .......
Neuro 7 ...........
Skin 1 ..............
Heart 11 ..........
Renal 3 ............
7 ..................
8 ..................
Circulatory 10 ..
Heart 11 ..........
Hypertensive Chronic Kidney Disease ........
Sequelae of Cerebrovascular Diseases ......
Includes hemiplegia, paraplegia, and quadriplegia.
Includes varicose veins with ulceration .......
Heart Failure ................................................
Includes diabetic retinopathy and other blindness ....
Includes hemiplegia, paraplegia, and quadriplegia ...
Diseases of arteries, arterioles and capillaries with
ulceration and non-pressure chronic ulcers.
Cutaneous abscess, cellulitis, and lymphangitis .......
Heart Failure ..............................................................
Nephrogenic Diabetes Insipidus ................................
Endocrine 3 .....
Neuro 5 ...........
Diabetes with Complications ......................................
Parkinson’s Disease ...................................................
205.52
212.88
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00071
Fmt 4701
Sfmt 4702
E:\FR\FM\12JYP2.SGM
12JYP2
193.33
195.55
202.44
32410
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 45—COMORBIDITY SUBGROUP INTERACTIONS FOR COMORBIDITY ADJUSTMENT—Continued
Comorbidity
subgroup
interaction
Comorbidity
subgroup
9 ..................
Description
Comorbidity
subgroup
Description
Heart 12 ..........
Other Heart Diseases ..................................
Skin 3 ..............
10 ................
Neuro 3 ...........
Dementia in diseases classified elsewhere
Skin 4 ..............
11 ................
Behavioral 2 ....
Mood Disorders ............................................
Skin 3 ..............
12 ................
13 ................
Circulatory 10 ..
Circulatory 4 ....
Includes varicose veins with ulceration .......
Hypertentive Chronic Kidney Disease .........
Heart 11 ..........
Skin 3 ..............
14 ................
Renal 1 ............
Chronic kidney disease and ESRD .............
Skin 3 ..............
15 ................
Respiratory 5 ...
COPD and Asthma ......................................
Skin 3 ..............
16 ................
Skin 1 ..............
Skin 3 ..............
17 ................
Renal 3 ............
Cutaneous abscess, cellulitis, and lymphangitis.
Nephrogenic Diabetes Insipidus ..................
Skin 4 ..............
18 ................
Heart 11 ..........
Heart Failure ................................................
Skin 3 ..............
19 ................
Heart 12 ..........
Other Heart Diseases ..................................
Skin 4 ..............
20 ................
Respiratory 5 ...
COPD and Asthma ......................................
Skin 4 ..............
21 ................
Circulatory 7 ....
Atherosclerosis .............................................
Skin 3 ..............
22 ................
Renal 1 ............
Chronic kidney disease and ESRD .............
Skin 4 ..............
23 ................
Endocrine 3 .....
Diabetes with Complications ........................
Skin 4 ..............
24 ................
Endocrine 3 .....
Diabetes with Complications ........................
Skin 3 ..............
25 ................
Circulatory 4 ....
Hypertensive Chronic Kidney Disease ........
Skin 4 ..............
26 ................
Heart 11 ..........
Heart Failure ................................................
Skin 4 ..............
27 ................
Skin 3 ..............
Diseases of arteries, arterioles and capillaries with ulceration and non-pressure
chronic ulcers.
Skin 4 ..............
Diseases of arteries, arterioles and capillaries with
ulceration and non-pressure chronic ulcers.
Stages Two-Four and unstageable pressure ulcers
by site.
Diseases of arteries, arterioles and capillaries with
ulceration and non-pressure chronic ulcers.
Heart Failure ..............................................................
Diseases of arteries, arterioles and capillaries with
ulceration and non-pressure chronic ulcers.
Diseases of arteries, arterioles and capillaries with
ulceration and non-pressure chronic ulcers.
Diseases of arteries, arterioles and capillaries with
ulceration and non-pressure chronic ulcers.
Diseases of arteries, arterioles and capillaries with
ulceration and non-pressure chronic ulcers.
Stages Two-Four and unstageable pressure ulcers
by site.
Diseases of arteries, arterioles and capillaries with
ulceration and non-pressure chronic ulcers.
Stages Two-Four and unstageable pressure ulcers
by site.
Stages Two-Four and unstageable pressure ulcers
by site.
Diseases of arteries, arterioles and capillaries with
ulceration and non-pressure chronic ulcers.
Stages Two-Four and unstageable pressure ulcers
by site.
Stages Two-Four and unstageable pressure ulcers
by site.
Diseases of arteries, arterioles and capillaries with
ulceration and non-pressure chronic ulcers.
Stages Two-Four and unstageable pressure ulcers
by site.
Stages Two-Four and unstageable pressure ulcers
by site.
Stages Two-Four and unstageable pressure ulcers
by site.
Sum of
interaction
term plus
single
comorbidity
coefficients
260.83
274.16
287.42
292.39
296.70
300.31
306.63
390.47
422.34
422.20
423.08
428.02
432.46
436.39
487.96
504.54
509.63
529.47
750.85
amozie on DSK3GDR082PROD with PROPOSALS2
Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 (as of March 2, 2018).
In order to be considered a
comorbidity subgroup interaction, at
least two reported diagnoses, must
occur in the above corresponding
combinations, as shown in Table 45. For
example, one diagnosis from Heart 11
must be reported along with at least one
diagnosis from Neuro 5 in order to
qualify for comorbidity subgroup
interaction 8. In other words, the
comorbidity subgroups are not
interchangeable between the interaction
groups (for example, reported
conditions from the Renal 1 and
Respiratory 5 subgroups would not be
considered an interaction for purposes
of the comorbidity adjustment).
For illustrative purposes, this would
mean that if a 30-day period of care had
the following secondary diagnoses
reported, I50.22, chronic systolic
(congestive) heart failure and G20,
Parkinson’s Disease (these diagnoses fall
under comorbidity subgroups Heart 11
and Neuro 5 respectively and are in the
same comorbidity subgroup interaction),
this interaction of comorbid conditions
results in a higher level of resource use
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
than just having a comorbid diagnosis
classified in Heart 11 or in Neuro 5.
There will be an updated PDGM
Grouper Tool posted on the HHA Center
web page that HHAs can access to
simulate the HIPPS code and case-mix
weight under the PDGM.50 This Grouper
Tool allows providers to fill in
information, including the
comorbidities, to determine whether a
home health period of care would
receive a comorbidity adjustment under
the PDGM.
The comorbidity interactions identify
subgroup combinations of comorbidities
that are associated with higher levels of
resource use. As such, we believe that
the comorbidity adjustment payment
should be dependent on whether the 30day period of care has an individual
comorbidity subgroup associated with
higher resource use or there is a
comorbidity subgroup interaction
resulting in higher resource use.
Therefore, we propose to have three
50 https://www.cms.gov/Center/Provider-Type/
Home-Health-Agency-HHA-Center.html.
PO 00000
Frm 00072
Fmt 4701
Sfmt 4702
levels in the PDGM comorbidity casemix adjustment: No Comorbidity
Adjustment, Low Comorbidity
Adjustment, and High Comorbidity
Adjustment. This means that depending
on if and which secondary diagnoses are
reported, a 30-day period of care may
receive no comorbidity adjustment
(meaning, no secondary diagnoses exist
or do not meet the criteria for a
comorbidity adjustment), a ‘‘low’’
comorbidity adjustment, or a ‘‘high’’
comorbidity adjustment. We propose
that home health 30-day periods of care
can receive a comorbidity payment
adjustment under the following
circumstances:
• Low comorbidity adjustment: There
is a reported secondary diagnosis that
falls within one of the home-health
specific individual comorbidity
subgroups, as listed in Table 44, (for
example, Heart Disease 11, Cerebral
Vascular Disease 4, etc.) associated with
higher resource use, or;
• High comorbidity adjustment:
There are two or more secondary
diagnoses reported that fall within the
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
same comorbidity subgroup interaction,
as listed in Table 45, (for example, Heart
11 plus Neuro 5) that are associated
with higher resource use.
Under the PDGM, a 30-day period of
care can receive payment for a low
comorbidity adjustment or a high
comorbidity adjustment, but not both. A
30-day period of care can receive only
one low comorbidity adjustment
regardless of the number of secondary
diagnoses reported on the home health
claim that fell into one of the individual
comorbidity subgroups or one high
comorbidity adjustment regardless of
the number of comorbidity group
interactions, as applicable. The low
comorbidity adjustment amount would
be the same across all 11 individual
comorbidity subgroups. Similarly, the
high comorbidity adjustment amount
would be the same across all 27
comorbidity subgroup interactions. See
Table 48 in section III.F.10 of this
proposed rule for the coefficient
amounts associated with both the low
32411
and high comorbidity adjustment, as
well as for all of the case-mix variables
in the PDGM. If a 30-day home health
period of care does not have any
reported comorbidities that fall into one
of the payment adjustments described
above, there would be no comorbidity
adjustment applied. Table 46 illustrates
the average resource use for each of the
comorbidity levels as described in this
section.
TABLE 46—AVERAGE RESOURCE USE BY COMORBIDITY ADJUSTMENT, CY 2017
Mean
resource use
No Comorbidity Adjustment ..........................
Comorbidity Adjustment—Has at least
one comorbidity from
comorbidity list, no
interaction from interaction list ..................
Comorbidity Adjustment—Has at least
one interaction from
interaction list ...........
Total ......................
Frequency
of periods
Percent
of periods
Standard
deviation of
resource use
25th
percentile of
resource use
Median
resource use
75th
percentile of
resource use
$1,539.92
5,402,694
62.6
$1,183.86
$673.27
$1,253.95
$2,078.68
1,575.12
2,721,969
31.6
1,248.71
658.77
1,262.47
2,131.92
1,878.84
500,113
5.8
1,412.06
880.07
1,523.87
2,469.93
1,570.68
8,624,776
100.0
1,221.38
679.12
1,272.18
2,117.47
amozie on DSK3GDR082PROD with PROPOSALS2
Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 (as of March 2, 2018).
Changing to three comorbidity levels
results in 216 possible case-mix groups
for the purposes of adjusting payment in
the PDGM. While this is more case-mix
groups than the 144 case-mix groups
proposed in the CY 2018 HH PPS
proposed rule, this change is responsive
to the comments received regarding
refinements to the comorbidity
adjustment without being unduly
complex. We believe that this method
for adjusting payment for the presence
of comorbidities is more robust,
reflective of patient characteristics,
better aligns payment with actual
resource use, and addresses comments
received from the CY 2018 HH PPS
proposed rule and recommendations
from TEP members. The comorbidity
payment adjustment takes into account
the presence of individual comorbid
conditions, as well as the interactions
between multiple comorbid conditions,
and reflects the types of conditions most
commonly seen in home health patients.
Similar to monitoring of nominal casemix growth under the current HH PPS,
upon implementation of the PDGM,
CMS will monitor the reporting of
secondary diagnoses to determine
whether adjustments to payment based
on the number of reported comorbidities
is resulting in HHAs inappropriately
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
reporting comorbid conditions solely for
the purpose of increased payment and
appropriate program integrity actions
will be taken.
As mentioned previously in this
section, there will be an updated PDGM
Grouper Tool posted on the HHA Center
web page which will be key to
understanding whether a 30-day home
health period of care would receive a
no, low, or high comorbidity adjustment
under the PDGM. If implemented, we
would continue to examine the
relationship of reported comorbidities
on resource utilization and make the
appropriate payment refinements to
help ensure that payment is in
alignment with the actual costs of
providing care. We invite comments on
the change to the comorbidity case-mix
adjustment in the PDGM including the
three comorbidity levels: No
Comorbidity, Low Comorbidity, and
High Comorbidity Adjustment. We also
invite comments on the payment
associated with the Low Comorbidity
and High Comorbidity Adjustment to
account for increased resource
utilization resulting from the presence
of certain comorbidities and
comorbidity interactions.
PO 00000
Frm 00073
Fmt 4701
Sfmt 4702
9. Change in the Low-Utilization
Payment Adjustment (LUPA) Threshold
Currently, a 60-day episode with four
or fewer visits is paid the national per
visit amount by discipline, adjusted by
the appropriate wage index based on the
site of service of the beneficiary, instead
of the full 60-day episode payment
amount. Such payment adjustments are
called Low Utilization Payment
Adjustments (LUPAs). While the
alternative case-mix model proposed in
the CY 2018 HH PPS proposed rule still
included LUPAs, the approach to
calculating the LUPA thresholds needed
to change due to the proposed change in
the unit of payment to 30-day periods of
care from 60-day episodes. The 30-day
periods of care have substantially more
episodes with four or fewer visits than
60-day episodes. To create LUPA
thresholds we proposed in the CY 2018
HH PPS proposed rule to set the LUPA
threshold at the 10th percentile value of
visits or 2, whichever is higher, for each
payment group, (82 FR 35324).
We received comments in response to
the CY 2018 HH PPS proposed rule on
maintaining the use of a single LUPA
threshold instead of varying the
thresholds at the subgroup level. Other
commenters expressed concern that the
variable LUPA thresholds will add
E:\FR\FM\12JYP2.SGM
12JYP2
32412
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
additional administrative burden and
create additional opportunity for error.
After analyzing the data to evaluate the
potential impact, we believe that the
change to a 30-day period of care under
the proposed PDGM from the current
60-day episode warrants variable LUPA
thresholds depending on the payment
group to which it is assigned. We
believe that the proposed LUPA
thresholds that vary based on the casemix assignment for the 30-day period of
care in the proposed PDGM is an
improvement over the current 5 visit
threshold that does not vary by case-mix
assignment. This is the same approach
proposed in the CY 2018 proposed rule
where LUPA thresholds would vary by
case-mix group. LUPA thresholds that
vary by case-mix group take into
account different resource use patterns
based on beneficiaries’ clinical
characteristics. Additionally, we do not
believe that the case-mix-specific LUPA
thresholds would result in additional
administrative burden as LUPA visits
are billed the same as non-LUPA
periods. Likewise, the PDGM will not be
implemented until January 1, 2020,
giving HHAs and vendors sufficient
time to make necessary changes to their
systems and to ensure that appropriate
quality checks are in place to minimize
any claims errors. Therefore, we
propose to vary the LUPA threshold for
a 30-day period of care under the PDGM
depending on the PDGM payment group
to which it is assigned.
We note that in the current payment
system, approximately 8 percent of
episodes are LUPAs. Under the PDGM,
consistent with the CY 2018 HH PPS
proposed rule, we propose the 10th
percentile value of visits or 2 visits,
whichever is higher, in order to target
approximately the same percentage of
LUPAs (approximately 7.1 percent of
30-day periods would be LUPAs
(assuming no behavior change)). For
example, for episodes in the payment
group corresponding to ‘‘MMTA–
Functional Level Medium—Early
Timing—Institutional Admission—No
Comorbidity’’ (HIPPS code 2AB1 in
Table 47), the threshold is four visits. If
a home health 30-day period of care is
assigned to that particular payment
group had three or fewer visits the HHA
would be paid using the national pervisit rates in section III.C.4 of this
proposed rule instead of the case-mix
adjusted 30-day period of care payment
amount. The LUPA thresholds for the
PDGM payment group with the
corresponding HIPPS code is listed in
Table 47.
TABLE 47—PROPOSED LUPA THRESHOLDS FOR THE PROPOSED PDGM PAYMENT GROUPS
amozie on DSK3GDR082PROD with PROPOSALS2
HIPPS
1AA11
1AA21
1AA31
1AB11
1AB21
1AB31
1AC11
1AC21
1AC31
1BA11
1BA21
1BA31
1BB11
1BB21
1BB31
1BC11
1BC21
1BC31
1CA11
1CA21
1CA31
1CB11
1CB21
1CB31
1CC11
1CC21
1CC31
1DA11
1DA21
1DA31
1DB11
1DB21
1DB31
1DC11
1DC21
1DC31
1EA11
1EA21
1EA31
1EB11
1EB21
1EB31
Clinical group and functional level
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
VerDate Sep<11>2014
MMTA—Low ...........................................
MMTA—Low ...........................................
MMTA—Low ...........................................
MMTA—Medium .....................................
MMTA—Medium .....................................
MMTA—Medium .....................................
MMTA—High ...........................................
MMTA—High ...........................................
MMTA—High ...........................................
Neuro—Low ............................................
Neuro—Low ............................................
Neuro—Low ............................................
Neuro—Medium ......................................
Neuro—Medium ......................................
Neuro—Medium ......................................
Neuro—High ...........................................
Neuro—High ...........................................
Neuro—High ...........................................
Wound—Low ...........................................
Wound—Low ...........................................
Wound—Low ...........................................
Wound—Medium ....................................
Wound—Medium ....................................
Wound—Medium ....................................
Wound—High ..........................................
Wound—High ..........................................
Wound—High ..........................................
Complex—Low ........................................
Complex—Low ........................................
Complex—Low ........................................
Complex—Medium ..................................
Complex—Medium ..................................
Complex—Medium ..................................
Complex—High .......................................
Complex—High .......................................
Complex—High .......................................
MS Rehab—Low .....................................
MS Rehab—Low .....................................
MS Rehab—Low .....................................
MS Rehab—Medium ...............................
MS Rehab—Medium ...............................
MS Rehab—Medium ...............................
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00074
Timing and admission source
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Fmt 4701
Sfmt 4702
Comorbidity
adjustment
(0 = none,
1 = single
comorbidity,
2 = interaction)
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
..................................
E:\FR\FM\12JYP2.SGM
Visit
threshold
(10th percentile
or 2—whichever
is higher)
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
12JYP2
4
4
4
4
4
5
4
4
4
4
5
5
5
5
5
4
5
5
4
4
4
5
5
5
4
5
4
3
2
4
3
3
4
3
3
3
5
5
5
5
5
5
32413
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 47—PROPOSED LUPA THRESHOLDS FOR THE PROPOSED PDGM PAYMENT GROUPS—Continued
amozie on DSK3GDR082PROD with PROPOSALS2
HIPPS
1EC11
1EC21
1EC31
1FA11
1FA21
1FA31
1FB11
1FB21
1FB31
1FC11
1FC21
1FC31
2AA11
2AA21
2AA31
2AB11
2AB21
2AB31
2AC11
2AC21
2AC31
2BA11
2BA21
2BA31
2BB11
2BB21
2BB31
2BC11
2BC21
2BC31
2CA11
2CA21
2CA31
2CB11
2CB21
2CB31
2CC11
2CC21
2CC31
2DA11
2DA21
2DA31
2DB11
2DB21
2DB31
2DC11
2DC21
2DC31
2EA11
2EA21
2EA31
2EB11
2EB21
2EB31
2EC11
2EC21
2EC31
2FA11
2FA21
2FA31
2FB11
2FB21
2FB31
2FC11
2FC21
2FC31
3AA11
3AA21
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
VerDate Sep<11>2014
Clinical group and functional level
Timing and admission source
MS Rehab—High ....................................
MS Rehab—High ....................................
MS Rehab—High ....................................
Behavioral Health—Low .........................
Behavioral Health—Low .........................
Behavioral Health—Low .........................
Behavioral Health—Medium ...................
Behavioral Health—Medium ...................
Behavioral Health—Medium ...................
Behavioral Health—High .........................
Behavioral Health—High .........................
Behavioral Health—High .........................
MMTA—Low ...........................................
MMTA—Low ...........................................
MMTA—Low ...........................................
MMTA—Medium .....................................
MMTA—Medium .....................................
MMTA—Medium .....................................
MMTA—High ...........................................
MMTA—High ...........................................
MMTA—High ...........................................
Neuro—Low ............................................
Neuro—Low ............................................
Neuro—Low ............................................
Neuro—Medium ......................................
Neuro—Medium ......................................
Neuro—Medium ......................................
Neuro—High ...........................................
Neuro—High ...........................................
Neuro—High ...........................................
Wound—Low ...........................................
Wound—Low ...........................................
Wound—Low ...........................................
Wound—Medium ....................................
Wound—Medium ....................................
Wound—Medium ....................................
Wound—High ..........................................
Wound—High ..........................................
Wound—High ..........................................
Complex—Low ........................................
Complex—Low ........................................
Complex—Low ........................................
Complex—Medium ..................................
Complex—Medium ..................................
Complex—Medium ..................................
Complex—High .......................................
Complex—High .......................................
Complex—High .......................................
MS Rehab—Low .....................................
MS Rehab—Low .....................................
MS Rehab—Low .....................................
MS Rehab—Medium ...............................
MS Rehab—Medium ...............................
MS Rehab—Medium ...............................
MS Rehab—High ....................................
MS Rehab—High ....................................
MS Rehab—High ....................................
Behavioral Health—Low .........................
Behavioral Health—Low .........................
Behavioral Health—Low .........................
Behavioral Health—Medium ...................
Behavioral Health—Medium ...................
Behavioral Health—Medium ...................
Behavioral Health—High .........................
Behavioral Health—High .........................
Behavioral Health—High .........................
MMTA—Low ...........................................
MMTA—Low ...........................................
Early—Community ..................................
Early—Community ..................................
Early—Community ..................................
Early—Community ..................................
Early—Community ..................................
Early—Community ..................................
Early—Community ..................................
Early—Community ..................................
Early—Community ..................................
Early—Community ..................................
Early—Community ..................................
Early—Community ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Early—Institutional ..................................
Late—Community ...................................
Late—Community ...................................
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00075
Fmt 4701
Sfmt 4702
E:\FR\FM\12JYP2.SGM
Comorbidity
adjustment
(0 = none,
1 = single
comorbidity,
2 = interaction)
Visit
threshold
(10th percentile
or 2—whichever
is higher)
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
12JYP2
5
5
5
3
3
3
4
4
4
4
4
4
3
4
4
4
5
5
4
4
4
5
5
5
6
6
6
5
5
5
4
4
4
5
5
5
4
5
4
3
3
4
4
4
5
4
4
4
5
5
5
6
6
6
6
6
6
3
3
4
4
4
5
4
4
5
2
2
32414
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 47—PROPOSED LUPA THRESHOLDS FOR THE PROPOSED PDGM PAYMENT GROUPS—Continued
amozie on DSK3GDR082PROD with PROPOSALS2
HIPPS
3AA31
3AB11
3AB21
3AB31
3AC11
3AC21
3AC31
3BA11
3BA21
3BA31
3BB11
3BB21
3BB31
3BC11
3BC21
3BC31
3CA11
3CA21
3CA31
3CB11
3CB21
3CB31
3CC11
3CC21
3CC31
3DA11
3DA21
3DA31
3DB11
3DB21
3DB31
3DC11
3DC21
3DC31
3EA11
3EA21
3EA31
3EB11
3EB21
3EB31
3EC11
3EC21
3EC31
3FA11
3FA21
3FA31
3FB11
3FB21
3FB31
3FC11
3FC21
3FC31
4AA11
4AA21
4AA31
4AB11
4AB21
4AB31
4AC11
4AC21
4AC31
4BA11
4BA21
4BA31
4BB11
4BB21
4BB31
4BC11
Clinical group and functional level
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
VerDate Sep<11>2014
MMTA—Low ...........................................
MMTA—Medium .....................................
MMTA—Medium .....................................
MMTA—Medium .....................................
MMTA—High ...........................................
MMTA—High ...........................................
MMTA—High ...........................................
Neuro—Low ............................................
Neuro—Low ............................................
Neuro—Low ............................................
Neuro—Medium ......................................
Neuro—Medium ......................................
Neuro—Medium ......................................
Neuro—High ...........................................
Neuro—High ...........................................
Neuro—High ...........................................
Wound—Low ...........................................
Wound—Low ...........................................
Wound—Low ...........................................
Wound—Medium ....................................
Wound—Medium ....................................
Wound—Medium ....................................
Wound—High ..........................................
Wound—High ..........................................
Wound—High ..........................................
Complex—Low ........................................
Complex—Low ........................................
Complex—Low ........................................
Complex—Medium ..................................
Complex—Medium ..................................
Complex—Medium ..................................
Complex—High .......................................
Complex—High .......................................
Complex—High .......................................
MS Rehab—Low .....................................
MS Rehab—Low .....................................
MS Rehab—Low .....................................
MS Rehab—Medium ...............................
MS Rehab—Medium ...............................
MS Rehab—Medium ...............................
MS Rehab—High ....................................
MS Rehab—High ....................................
MS Rehab—High ....................................
Behavioral Health—Low .........................
Behavioral Health—Low .........................
Behavioral Health—Low .........................
Behavioral Health—Medium ...................
Behavioral Health—Medium ...................
Behavioral Health—Medium ...................
Behavioral Health—High .........................
Behavioral Health—High .........................
Behavioral Health—High .........................
MMTA—Low ...........................................
MMTA—Low ...........................................
MMTA—Low ...........................................
MMTA—Medium .....................................
MMTA—Medium .....................................
MMTA—Medium .....................................
MMTA—High ...........................................
MMTA—High ...........................................
MMTA—High ...........................................
Neuro—Low ............................................
Neuro—Low ............................................
Neuro—Low ............................................
Neuro—Medium ......................................
Neuro—Medium ......................................
Neuro—Medium ......................................
Neuro—High ...........................................
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00076
Timing and admission source
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Community
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Fmt 4701
Comorbidity
adjustment
(0 = none,
1 = single
comorbidity,
2 = interaction)
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
Sfmt 4702
E:\FR\FM\12JYP2.SGM
Visit
threshold
(10th percentile
or 2—whichever
is higher)
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
12JYP2
3
2
2
3
2
2
3
2
2
2
2
2
3
2
2
2
2
3
3
3
3
3
3
3
3
2
2
2
2
2
2
2
2
2
2
2
2
2
2
3
2
2
3
2
2
2
2
2
2
2
2
2
3
3
3
3
3
4
3
3
4
3
4
3
4
4
5
4
32415
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 47—PROPOSED LUPA THRESHOLDS FOR THE PROPOSED PDGM PAYMENT GROUPS—Continued
HIPPS
4BC21
4BC31
4CA11
4CA21
4CA31
4CB11
4CB21
4CB31
4CC11
4CC21
4CC31
4DA11
4DA21
4DA31
4DB11
4DB21
4DB31
4DC11
4DC21
4DC31
4EA11
4EA21
4EA31
4EB11
4EB21
4EB31
4EC11
4EC21
4EC31
4FA11
4FA21
4FA31
4FB11
4FB21
4FB31
4FC11
4FC21
4FC31
Clinical group and functional level
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
...............
Neuro—High ...........................................
Neuro—High ...........................................
Wound—Low ...........................................
Wound—Low ...........................................
Wound—Low ...........................................
Wound—Medium ....................................
Wound—Medium ....................................
Wound—Medium ....................................
Wound—High ..........................................
Wound—High ..........................................
Wound—High ..........................................
Complex—Low ........................................
Complex—Low ........................................
Complex—Low ........................................
Complex—Medium ..................................
Complex—Medium ..................................
Complex—Medium ..................................
Complex—High .......................................
Complex—High .......................................
Complex—High .......................................
MS Rehab—Low .....................................
MS Rehab—Low .....................................
MS Rehab—Low .....................................
MS Rehab—Medium ...............................
MS Rehab—Medium ...............................
MS Rehab—Medium ...............................
MS Rehab—High ....................................
MS Rehab—High ....................................
MS Rehab—High ....................................
Behavioral Health—Low .........................
Behavioral Health—Low .........................
Behavioral Health—Low .........................
Behavioral Health—Medium ...................
Behavioral Health—Medium ...................
Behavioral Health—Medium ...................
Behavioral Health—High .........................
Behavioral Health—High .........................
Behavioral Health—High .........................
amozie on DSK3GDR082PROD with PROPOSALS2
In summary, we propose to vary the
LUPA threshold for a 30-day period of
care under the PDGM depending on the
PDGM payment group to which it is
assigned. We also propose that the
LUPA thresholds for each PDGM
payment group would be re-evaluated
every year based on the most current
utilization data available. We invite
public comments on the LUPA
threshold methodology proposed for the
PDGM and the associated regulations
text changes in section III.F.13 of this
proposed rule.
10. HH PPS Case-Mix Weights Under
the PDGM
Section 1895(b)(4)(B) requires the
Secretary to establish appropriate case
mix adjustment factors for home health
services in a manner that explains a
significant amount of the variation in
cost among different units of services. In
the CY 2018 HH PPS proposed rule (82
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
Timing and admission source
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
...................................
FR 35270), we proposed an alternative
case-mix adjustment methodology to
better align payment with patient care
needs. The proposed alternative casemix adjustment methodology places
patients into meaningful payment
categories based on patient
characteristics (principal diagnosis,
functional level, comorbid conditions,
referral source and timing). We did not
finalize the alternative case-mix
adjustment methodology in the CY 2018
final rule in order to consider comments
and feedback for any potential
refinements to the model. Refinements
were made to the comorbidity case-mix
adjustment while all other variables
remain as proposed in the CY 2018 HH
PPS proposed rule (for example, clinical
group, functional level, admission
source, and episode timing). As outlined
in previous sections of this proposed
rule, we are again proposing an
alternative case-mix adjustment
PO 00000
Frm 00077
Comorbidity
adjustment
(0 = none,
1 = single
comorbidity,
2 = interaction)
Fmt 4701
Sfmt 4702
Visit
threshold
(10th percentile
or 2—whichever
is higher)
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
4
4
3
3
3
4
4
4
3
4
4
2
3
3
3
3
4
3
3
3
3
3
3
4
4
4
4
4
4
2
2
2
3
3
3
3
3
4
methodology, called the PDGM, but this
methodology now results in 216 unique
case-mix groups. These 216 unique
case-mix payment groups are called
Home Health Resource Groups
(HHRGs). In accordance with the BBA of
2018, the proposed PDGM will be
implemented in a budget neutral
manner.
To generate PDGM case-mix weights,
we utilized a data file based on home
health episodes of care, as reported in
Medicare home health claims. The
claims data provide episode-level data
as well as visit-level data. The claims
also provide data on whether nonroutine supplies (NRS) was provided
during the episode and the total charges
for NRS. We used CY 2017 home health
claims data with linked OASIS
assessment data to obtain patient
characteristics. We determined the casemix weight for each of the different
PDGM payment groups by regressing
E:\FR\FM\12JYP2.SGM
12JYP2
32416
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
resource use on a series of indicator
variables for each of the categories using
a fixed effects model. The regression
measures resource use with the Cost per
Minute (CPM) + NRS approach outlined
in section III.F.2 of this proposed rule.
The model used in the PDGM payment
regression generates outcomes that are
statistically significant and consistent
with findings.
We received comments in response to
the proposed alternative case-mix
adjustment methodology in the CY 2018
HH PPS proposed rule on the standards
for subsequent case-mix weight
recalibration (nature and timing).
Similar to the annual recalibration of
the case-mix weights under the current
HH PPS, annual recalibration will be
made to the PDGM case-mix weights.
We will make refinements as necessary
to ensure that payment for home health
periods are in alignment with costs. We
note that this includes a re-calculation
of the proposed PDGM case-mix weights
for CY 2020 in the CY 2020 HH PPS
proposed rule using CY 2018 home
health claims data linked with OASIS
assessment data. In other words, the
table below represents the PDGM casemix weights if we were to implement
the PDGM in CY 2019. However, since
we are proposing to implement the
PDGM on January 1, 2020, the actual
PDGM case-mix weights for CY 2020
will be updated in the CY 2020 HH PPS
proposed rule. We also received a
comment from MedPAC about the
development of alternative case-mix
adjustment methodology using the
regression approach, which is a
statistical estimate of the cost associated
with a payment group instead of the
actual cost. MedPAC stated that this
approach results in estimated payments
that may not equal the actual costs
experienced by HHAs. As noted, CMS
has used a regression approach since the
inception of the HH PPS in 2000. The
regression smoothens weights compared
to a system where each payment group
receives a weight that is based solely on
the average resource use of all 30-day
periods in a payment group compared to
the overall average resource use across
all 30 day periods. Smoothing the
weights helps to see relationships
between variables and foresee trends. In
addition, using a regression approach to
calculate case-mix weights allows CMS
to use a fixed effects model, which will
estimate the variation observed within
individual HHAs and opposed to
estimating the variation across HHAs.
With the fixed effects, the coefficients
should better estimate the relationship
the regression variables have with
resource use compared to not
accounting for fixed effects. We
continue to believe that using a
regression approach for the calculation
of the HH PPS case-mix weights is most
appropriate.
After best fitting the model on home
health episodes from 2017 data, we used
the estimated coefficients of the model
to predict the expected average resource
use of each episode based on the five
PDGM categories. In order to normalize
the results, we have divided the
regression predicted resource use of
each episode by the overall average
resource use of all episodes used to
estimate the model in order to calculate
the case mix weight of all episodes
within a particular payment group,
where each payment group is defined as
the unique combination of the
subgroups within the five PDGM
categories (admission source, timing of
the 30-day period, clinical grouping,
functional level, and comorbidity
adjustment). The case-mix weight is
then used to adjust the base payment
rate to determine each period’s
payment. Table 48 shows the
coefficients of the payment regression
used to generate the weights, and the
coefficients divided by average resource
use. Information can be found in section
III.F.6 of this rule for the clinical groups,
section III.F.7 of this rule for the
functional levels, section III.F.5 for
admission source, section III.F.4 for
timing, and section III.F.8 for the
comorbidity adjustment.
TABLE 48—COEFFICIENT OF PAYMENT REGRESSION AND COEFFICIENT DIVIDED BY AVERAGE RESOURCE USE FOR PDGM
PAYMENT GROUP
Variable
Coefficient
Coefficient
divided
by average
resource use
amozie on DSK3GDR082PROD with PROPOSALS2
Clinical Group and Functional Level (MMTA—Low is excluded)
MMTA—Medium Functional ....................................................................................................................................
MMTA—High Functional ..........................................................................................................................................
Behavioral Health—Low Functional ........................................................................................................................
Behavioral Health—Medium Functional ..................................................................................................................
Behavioral Health—High Functional ........................................................................................................................
Complex—Low Functional .......................................................................................................................................
Complex—Medium Functional .................................................................................................................................
Complex—High Functional ......................................................................................................................................
MS Rehab—Low Functional ....................................................................................................................................
MS Rehab—Medium Functional ..............................................................................................................................
MS Rehab—High Functional ...................................................................................................................................
Neuro—Low Functional ...........................................................................................................................................
Neuro—Medium Functional .....................................................................................................................................
Neuro—High Functional ..........................................................................................................................................
Wound—Low Functional ..........................................................................................................................................
Wound—Medium Functional ...................................................................................................................................
Wound—High Functional .........................................................................................................................................
$237.83
416.75
¥116.39
169.86
309.97
¥27.39
331.88
476.69
141.37
338.96
558.95
329.19
593.98
711.48
368.43
628.37
822.84
0.1514
0.2653
¥0.0741
0.1081
0.1974
¥0.0174
0.2113
0.3035
0.0900
0.2158
0.3559
0.2096
0.3782
0.4530
0.2346
0.4001
0.5239
¥646.84
278.85
45.71
¥0.4118
0.1775
0.0291
Referral Source With Timing (Community Early excluded)
Community—Late ....................................................................................................................................................
Institutional—Early ...................................................................................................................................................
Institutional—Late ....................................................................................................................................................
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00078
Fmt 4701
Sfmt 4702
E:\FR\FM\12JYP2.SGM
12JYP2
32417
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 48—COEFFICIENT OF PAYMENT REGRESSION AND COEFFICIENT DIVIDED BY AVERAGE RESOURCE USE FOR PDGM
PAYMENT GROUP—Continued
Variable
Coefficient
divided
by average
resource use
Coefficient
Comorbidity Adjustment (No Comorbidity Adjustment Group is excluded)
Comorbidity Adjustment—Has at least one comorbidity from comorbidity list, no interaction from interaction list
Comorbidity Adjustment—Has at least one interaction from interaction list ...........................................................
92.44
345.20
0.0589
0.2198
Constant ...................................................................................................................................................................
Average Resource Use ...........................................................................................................................................
N ..............................................................................................................................................................................
Adj. R-Squared ........................................................................................................................................................
$1,560.37
$1,570.68
8,624,776
0.2925
0.9934
........................
........................
........................
Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 (as of March 2, 2018) for which we had a linked
OASIS assessment. LUPA episodes, outlier episodes, and episodes with PEP adjustments were excluded.
Table 49 presents the case-mix weight
for each HHRG in the regression model
(Table 48). LUPA episodes, outlier
episodes, and episodes with PEP
adjustments were excluded. Please find
LUPA information in section III.F.9 of
this rule. Weights are determined by
first calculating the predicted resource
use for episodes with a particular
combination of admission source,
episode timing, clinical grouping,
functional level, and comorbidity
adjustment. This combination specific
calculation is then divided by the
average resource use of all the episodes
that were used to estimate the standard
30-day payment rate, which is
$1,570.68. The resulting ratio represents
the case-mix weight for that particular
combination of a HHRG payment group.
The adjusted R-squared value for this
model is 0.2925 which is slightly higher
than the adjusted R-squared value of
0.2704 that we proposed in CY 2018 by
using the CY 2016 claims data. The
adjusted R-squared value provides a
measure of how well observed outcomes
are replicated by the model, based on
the proportion of total variation of
outcomes explained by the model.
As noted above, there are 216
different HHRG payment groups under
the PDGM. There are 15 HHRG payment
groups that represent roughly 50.2
percent of the total episodes. There are
61 HHRG payment groups that represent
roughly 1.0 percent of total episodes.
The HHRG payment group with the
smallest weight has a weight of 0.5075
(community admitted, late, behavioral
health, low functional impairment level,
with no comorbidity adjustment). The
HHRG payment group with the largest
weight has a weight of 1.9146
(institutional admitted, early, wound,
high functional impairment level, with
interactive comorbidity adjustment).
TABLE 49—CASE MIX WEIGHTS FOR EACH HHRG PAYMENT GROUP
amozie on DSK3GDR082PROD with PROPOSALS2
HIPPS
1AA11
1AA21
1AA31
1AB11
1AB21
1AB31
1AC11
1AC21
1AC31
1BA11
1BA21
1BA31
1BB11
1BB21
1BB31
1BC11
1BC21
1BC31
1CA11
1CA21
1CA31
1CB11
1CB21
1CB31
1CC11
1CC21
1CC31
1DA11
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
..........
..........
..........
...........
VerDate Sep<11>2014
Timing and
admission source
Clinical group and functional level
MMTA—Low ...................................................
MMTA—Low ...................................................
MMTA—Low ...................................................
MMTA—Medium .............................................
MMTA—Medium .............................................
MMTA—Medium .............................................
MMTA—High ...................................................
MMTA—High ...................................................
MMTA—High ...................................................
Neuro—Low ....................................................
Neuro—Low ....................................................
Neuro—Low ....................................................
Neuro—Medium ..............................................
Neuro—Medium ..............................................
Neuro—Medium ..............................................
Neuro—High ...................................................
Neuro—High ...................................................
Neuro—High ...................................................
Wound—Low ...................................................
Wound—Low ...................................................
Wound—Low ...................................................
Wound—Medium ............................................
Wound—Medium ............................................
Wound—Medium ............................................
Wound—High ..................................................
Wound—High ..................................................
Wound—High ..................................................
Complex—Low ................................................
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00079
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Fmt 4701
Sfmt 4702
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
E:\FR\FM\12JYP2.SGM
Proposed
CY 2019
weight
Comorbidity
adjustment
12JYP2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
0.9934
1.0523
1.2132
1.1449
1.2037
1.3646
1.2588
1.3176
1.4785
1.2030
1.2619
1.4228
1.3716
1.4305
1.5914
1.4464
1.5053
1.6662
1.2280
1.2869
1.4478
1.3935
1.4523
1.6133
1.5173
1.5762
1.7371
0.9760
32418
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 49—CASE MIX WEIGHTS FOR EACH HHRG PAYMENT GROUP—Continued
amozie on DSK3GDR082PROD with PROPOSALS2
HIPPS
1DA21
1DA31
1DB11
1DB21
1DB31
1DC11
1DC21
1DC31
1EA11
1EA21
1EA31
1EB11
1EB21
1EB31
1EC11
1EC21
1EC31
1FA11
1FA21
1FA31
1FB11
1FB21
1FB31
1FC11
1FC21
1FC31
2AA11
2AA21
2AA31
2AB11
2AB21
2AB31
2AC11
2AC21
2AC31
2BA11
2BA21
2BA31
2BB11
2BB21
2BB31
2BC11
2BC21
2BC31
2CA11
2CA21
2CA31
2CB11
2CB21
2CB31
2CC11
2CC21
2CC31
2DA11
2DA21
2DA31
2DB11
2DB21
2DB31
2DC11
2DC21
2DC31
2EA11
2EA21
2EA31
2EB11
2EB21
2EB31
2EC11
2EC21
...........
...........
...........
...........
...........
..........
..........
..........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
..........
..........
..........
...........
...........
...........
...........
...........
...........
..........
..........
..........
...........
...........
...........
...........
...........
...........
...........
...........
VerDate Sep<11>2014
Timing and
admission source
Clinical group and functional level
Complex—Low ................................................
Complex—Low ................................................
Complex—Medium ..........................................
Complex—Medium ..........................................
Complex—Medium ..........................................
Complex—High ...............................................
Complex—High ...............................................
Complex—High ...............................................
MS Rehab—Low .............................................
MS Rehab—Low .............................................
MS Rehab—Low .............................................
MS Rehab—Medium .......................................
MS Rehab—Medium .......................................
MS Rehab—Medium .......................................
MS Rehab—High ............................................
MS Rehab—High ............................................
MS Rehab—High ............................................
Behavioral Health—Low .................................
Behavioral Health—Low .................................
Behavioral Health—Low .................................
Behavioral Health—Medium ...........................
Behavioral Health—Medium ...........................
Behavioral Health—Medium ...........................
Behavioral Health—High .................................
Behavioral Health—High .................................
Behavioral Health—High .................................
MMTA—Low ...................................................
MMTA—Low ...................................................
MMTA—Low ...................................................
MMTA—Medium .............................................
MMTA—Medium .............................................
MMTA—Medium .............................................
MMTA—High ...................................................
MMTA—High ...................................................
MMTA—High ...................................................
Neuro—Low ....................................................
Neuro—Low ....................................................
Neuro—Low ....................................................
Neuro—Medium ..............................................
Neuro—Medium ..............................................
Neuro—Medium ..............................................
Neuro—High ...................................................
Neuro—High ...................................................
Neuro—High ...................................................
Wound—Low ...................................................
Wound—Low ...................................................
Wound—Low ...................................................
Wound—Medium ............................................
Wound—Medium ............................................
Wound—Medium ............................................
Wound—High ..................................................
Wound—High ..................................................
Wound—High ..................................................
Complex—Low ................................................
Complex—Low ................................................
Complex—Low ................................................
Complex—Medium ..........................................
Complex—Medium ..........................................
Complex—Medium ..........................................
Complex—High ...............................................
Complex—High ...............................................
Complex—High ...............................................
MS Rehab—Low .............................................
MS Rehab—Low .............................................
MS Rehab—Low .............................................
MS Rehab—Medium .......................................
MS Rehab—Medium .......................................
MS Rehab—Medium .......................................
MS Rehab—High ............................................
MS Rehab—High ............................................
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00080
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Community
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Early—Institutional
Fmt 4701
Sfmt 4702
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
..........................................
E:\FR\FM\12JYP2.SGM
Proposed
CY 2019
weight
Comorbidity
adjustment
12JYP2
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
1.0348
1.1958
1.2047
1.2636
1.4245
1.2969
1.3558
1.5167
1.0834
1.1423
1.3032
1.2092
1.2681
1.4290
1.3493
1.4082
1.5691
0.9193
0.9782
1.1391
1.1016
1.1604
1.3214
1.1908
1.2496
1.4106
1.1710
1.2298
1.3907
1.3224
1.3812
1.5422
1.4363
1.4951
1.6561
1.3805
1.4394
1.6003
1.5491
1.6080
1.7689
1.6239
1.6828
1.8437
1.4055
1.4644
1.6253
1.5710
1.6299
1.7908
1.6948
1.7537
1.9146
1.1535
1.2124
1.3733
1.3823
1.4411
1.6020
1.4745
1.5333
1.6942
1.2610
1.3198
1.4807
1.3868
1.4456
1.6065
1.5268
1.5857
32419
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 49—CASE MIX WEIGHTS FOR EACH HHRG PAYMENT GROUP—Continued
amozie on DSK3GDR082PROD with PROPOSALS2
HIPPS
2EC31
2FA11
2FA21
2FA31
2FB11
2FB21
2FB31
2FC11
2FC21
2FC31
3AA11
3AA21
3AA31
3AB11
3AB21
3AB31
3AC11
3AC21
3AC31
3BA11
3BA21
3BA31
3BB11
3BB21
3BB31
3BC11
3BC21
3BC31
3CA11
3CA21
3CA31
3CB11
3CB21
3CB31
3CC11
3CC21
3CC31
3DA11
3DA21
3DA31
3DB11
3DB21
3DB31
3DC11
3DC21
3DC31
3EA11
3EA21
3EA31
3EB11
3EB21
3EB31
3EC11
3EC21
3EC31
3FA11
3FA21
3FA31
3FB11
3FB21
3FB31
3FC11
3FC21
3FC31
4AA11
4AA21
4AA31
4AB11
4AB21
4AB31
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
..........
..........
..........
...........
...........
...........
...........
...........
...........
..........
..........
..........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
VerDate Sep<11>2014
Clinical group and functional level
Timing and
admission source
MS Rehab—High ............................................
Behavioral Health—Low .................................
Behavioral Health—Low .................................
Behavioral Health—Low .................................
Behavioral Health—Medium ...........................
Behavioral Health—Medium ...........................
Behavioral Health—Medium ...........................
Behavioral Health—High .................................
Behavioral Health—High .................................
Behavioral Health—High .................................
MMTA—Low ...................................................
MMTA—Low ...................................................
MMTA—Low ...................................................
MMTA—Medium .............................................
MMTA—Medium .............................................
MMTA—Medium .............................................
MMTA—High ...................................................
MMTA—High ...................................................
MMTA—High ...................................................
Neuro—Low ....................................................
Neuro—Low ....................................................
Neuro—Low ....................................................
Neuro—Medium ..............................................
Neuro—Medium ..............................................
Neuro—Medium ..............................................
Neuro—High ...................................................
Neuro—High ...................................................
Neuro—High ...................................................
Wound—Low ...................................................
Wound—Low ...................................................
Wound—Low ...................................................
Wound—Medium ............................................
Wound—Medium ............................................
Wound—Medium ............................................
Wound—High ..................................................
Wound—High ..................................................
Wound—High ..................................................
Complex—Low ................................................
Complex—Low ................................................
Complex—Low ................................................
Complex—Medium ..........................................
Complex—Medium ..........................................
Complex—Medium ..........................................
Complex—High ...............................................
Complex—High ...............................................
Complex—High ...............................................
MS Rehab—Low .............................................
MS Rehab—Low .............................................
MS Rehab—Low .............................................
MS Rehab—Medium .......................................
MS Rehab—Medium .......................................
MS Rehab—Medium .......................................
MS Rehab—High ............................................
MS Rehab—High ............................................
MS Rehab—High ............................................
Behavioral Health—Low .................................
Behavioral Health—Low .................................
Behavioral Health—Low .................................
Behavioral Health—Medium ...........................
Behavioral Health—Medium ...........................
Behavioral Health—Medium ...........................
Behavioral Health—High .................................
Behavioral Health—High .................................
Behavioral Health—High .................................
MMTA—Low ...................................................
MMTA—Low ...................................................
MMTA—Low ...................................................
MMTA—Medium .............................................
MMTA—Medium .............................................
MMTA—Medium .............................................
Early—Institutional ..........................................
Early—Institutional ..........................................
Early—Institutional ..........................................
Early—Institutional ..........................................
Early—Institutional ..........................................
Early—Institutional ..........................................
Early—Institutional ..........................................
Early—Institutional ..........................................
Early—Institutional ..........................................
Early—Institutional ..........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Community ...........................................
Late—Institutional ...........................................
Late—Institutional ...........................................
Late—Institutional ...........................................
Late—Institutional ...........................................
Late—Institutional ...........................................
Late—Institutional ...........................................
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00081
Fmt 4701
Sfmt 4702
E:\FR\FM\12JYP2.SGM
Proposed
CY 2019
weight
Comorbidity
adjustment
12JYP2
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
1.7466
1.0969
1.1557
1.3166
1.2791
1.3380
1.4989
1.3683
1.4272
1.5881
0.5816
0.6405
0.8014
0.7330
0.7919
0.9528
0.8469
0.9058
1.0667
0.7912
0.8500
1.0110
0.9598
1.0186
1.1796
1.0346
1.0934
1.2544
0.8162
0.8750
1.0360
0.9817
1.0405
1.2015
1.1055
1.1643
1.3253
0.5642
0.6230
0.7840
0.7929
0.8518
1.0127
0.8851
0.9440
1.1049
0.6716
0.7305
0.8914
0.7974
0.8563
1.0172
0.9375
0.9963
1.1573
0.5075
0.5664
0.7273
0.6898
0.7486
0.9095
0.7790
0.8378
0.9987
1.0225
1.0814
1.2423
1.1740
1.2328
1.3937
32420
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 49—CASE MIX WEIGHTS FOR EACH HHRG PAYMENT GROUP—Continued
HIPPS
4AC11
4AC21
4AC31
4BA11
4BA21
4BA31
4BB11
4BB21
4BB31
4BC11
4BC21
4BC31
4CA11
4CA21
4CA31
4CB11
4CB21
4CB31
4CC11
4CC21
4CC31
4DA11
4DA21
4DA31
4DB11
4DB21
4DB31
4DC11
4DC21
4DC31
4EA11
4EA21
4EA31
4EB11
4EB21
4EB31
4EC11
4EC21
4EC31
4FA11
4FA21
4FA31
4FB11
4FB21
4FB31
4FC11
4FC21
4FC31
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
..........
..........
..........
...........
...........
...........
...........
...........
...........
..........
..........
..........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
...........
Timing and
admission source
Clinical group and functional level
MMTA—High ...................................................
MMTA—High ...................................................
MMTA—High ...................................................
Neuro—Low ....................................................
Neuro—Low ....................................................
Neuro—Low ....................................................
Neuro—Medium ..............................................
Neuro—Medium ..............................................
Neuro—Medium ..............................................
Neuro—High ...................................................
Neuro—High ...................................................
Neuro—High ...................................................
Wound—Low ...................................................
Wound—Low ...................................................
Wound—Low ...................................................
Wound—Medium ............................................
Wound—Medium ............................................
Wound—Medium ............................................
Wound—High ..................................................
Wound—High ..................................................
Wound—High ..................................................
Complex—Low ................................................
Complex—Low ................................................
Complex—Low ................................................
Complex—Medium ..........................................
Complex—Medium ..........................................
Complex—Medium ..........................................
Complex—High ...............................................
Complex—High ...............................................
Complex—High ...............................................
MS Rehab—Low .............................................
MS Rehab—Low .............................................
MS Rehab—Low .............................................
MS Rehab—Medium .......................................
MS Rehab—Medium .......................................
MS Rehab—Medium .......................................
MS Rehab—High ............................................
MS Rehab—High ............................................
MS Rehab—High ............................................
Behavioral Health—Low .................................
Behavioral Health—Low .................................
Behavioral Health—Low .................................
Behavioral Health—Medium ...........................
Behavioral Health—Medium ...........................
Behavioral Health—Medium ...........................
Behavioral Health—High .................................
Behavioral Health—High .................................
Behavioral Health—High .................................
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Late—Institutional
Proposed
CY 2019
weight
Comorbidity
adjustment
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
...........................................
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
0
1
2
1.2879
1.3467
1.5076
1.2321
1.2910
1.4519
1.4007
1.4595
1.6205
1.4755
1.5344
1.6953
1.2571
1.3160
1.4769
1.4226
1.4814
1.6424
1.5464
1.6053
1.7662
1.0051
1.0639
1.2249
1.2338
1.2927
1.4536
1.3260
1.3849
1.5458
1.1125
1.1714
1.3323
1.2383
1.2972
1.4581
1.3784
1.4373
1.5982
0.9484
1.0073
1.1682
1.1307
1.1895
1.3505
1.2199
1.2787
1.4397
amozie on DSK3GDR082PROD with PROPOSALS2
Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 for which we had a linked OASIS assessment.
LUPA episodes, outlier episodes, and episodes with PEP adjustments were excluded.
In conjunction with the
implementation of the PDGM, we are
proposing to revise the frequency with
which we update the HH PPS Grouper
software used to assign the appropriate
HIPPS code used for case-mix
adjustment onto the claim. Since CY
2004 when the HH PPS moved from a
fiscal year to a calendar year basis, we
have updated the Grouper software
twice a year. We provide an updated
version of the Grouper software effective
every October 1 in order to address ICD
coding revisions, which are effective on
October 1. We also provide an updated
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
version of the HH PPS Grouper software
effective on January 1 in order to
capture the new or revised HH PPS
policies that become effective on
January 1. In an effort to reduce
provider burden associated with testing
and installing two software releases, we
propose to discontinue the October
release of the HH PPS Grouper software
and provide a single HH PPS Grouper
software release effective January 1 of
each calendar year. We propose that the
January release of the HH PPS Grouper
software would include the most recent
revisions to the ICD coding system as
PO 00000
Frm 00082
Fmt 4701
Sfmt 4702
well as the payment policy updates
contained in the HH PPS final rule.
Therefore, under this proposal, during
the last quarter of each calendar year,
HHAs would continue to use the ICD–
10–CM codes and reporting guidelines
that they would have used for the first
three calendar quarters. HHAs would
begin using the most recent ICD–10–CM
codes and reporting guidelines on home
health claims beginning on January 1 of
each calendar year. We are soliciting
comments on this proposal.
We invite comments on the proposed
PDGM case-mix weights, case-mix
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
weight methodology and proposed
annual recalibration of the case-mix
weights, updates to the HH PPS Grouper
software, and the associated regulations
text changes in section III.F.13 of this
proposed rule.
11. Low-Utilization Payment
Adjustment (LUPA) Add-On Payments
and Partial Payment Adjustments Under
PDGM
LUPA episodes qualify for an add-on
payment in the case that the established
episode is the first or only episode in a
sequence of adjacent episodes. As stated
in the CY 2008 HH PPS final rule, LUPA
add-on payments are made because the
national per-visit payment rates do not
adequately account for the front-loading
of costs for the first episode of care as
the average visit lengths in these initial
LUPAs are 16 to 18 percent higher than
the average visit lengths in initial nonLUPA episodes (72 FR 49848). LUPA
episodes that occur as the only episode
or as an initial episode in a sequence of
adjacent episodes are adjusted by
applying an additional amount to the
LUPA payment before adjusting for area
wage differences. Under the PDGM, we
propose that the LUPA add-on factors
will remain the same as the current
payment system, described in section
III.C.4 of this proposed rule. We
multiply the per-visit payment amount
for the first SN, PT, or SLP visit in
LUPA episodes that occur as the only
episode or an initial episode in a
sequence of adjacent episodes by the
appropriate factor (1.8451 for SN,
1.6700 for PT, and 1.6266 for SLP) to
determine the LUPA add-on payment
amount.
The current partial episode payment
(PEP) adjustment is a proportion of the
episode payment and is based on the
span of days including the start-of-care
date (for example, the date of the first
billable service) through and including
the last billable service date under the
original plan of care before the
intervening event in a home health
beneficiary’s care defined as:
• A beneficiary elected transfer, or
• A discharge and return to home
health that would warrant, for purposes
of payment, a new OASIS assessment,
physician certification of eligibility, and
a new plan of care.
We received comments on eliminating
PEPs in response to the CY 2018 HH
PPS proposed rule. We note that the
change in the unit of payment from 60
days to 30 days will reduce the number
of instances where a PEP adjustment
occurs. However, we believe
maintaining a PEP adjustment policy is
appropriate to ensure that Medicare is
not paying twice for the same period of
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
care, as the PEP is involved with patient
transfers there is a risk of a duplicate
payment error. For example, if a patient
chooses to transfer to a different HHA
during the course of a home health
period of care, the payment is
proportionally adjusted to reflect the
length of time the beneficiary remained
under the agency’s care prior to the
intervening event and ensures that
Medicare is not paying two HHAs for
the same 30-day period of care.
In summary for 30-day periods of
care, we propose that the process for
partial payment adjustments would
remain the same as the existing policies
pertaining to partial episode payments.
When a new 30-day period begins due
to the intervening event of the
beneficiary elected transfer or discharge
and return to home health during the
30-day episode, the original 30-day
period would be proportionally adjusted
to reflect the length of time the
beneficiary remained under the agency’s
care prior to the intervening event. The
proportional payment is the partial
payment adjustment. The partial
payment adjustment is calculated by
using the span of days (first billable
service date through and including the
last billable service date) under the
original plan of care as a proportion of
30. The proportion is multiplied by the
original case-mix and wage index 30day payment.
12. Payments for High-Cost Outliers
Under the PDGM
As described in section III.E of this
proposed rule, section 1895(b)(5) of the
Act allows for the provision of an
addition or adjustment to the home
health payment amount in the case of
outliers because of unusual variations in
the type or amount of medically
necessary care. The history of and
current methodology for payment of
high-cost outliers under the HH PPS is
described in detail in section III.E of this
proposed rule. In the CY 2018 HH PPS
proposed rule (82 FR 35270), we
proposed that we would maintain the
current methodology for payment of
high-cost outliers upon implementation
of a 30-day unit of payment and that we
would calculate payment for high-cost
outliers based upon 30-day periods of
care.
Commenters expressed concerns
regarding the outlier policy proposed in
the CY 2018 HH PPS proposed rule and
the potential for more providers to
exceed the 10 percent outlier cap under
a 30-day period of care. Commenters
also suggested modification to the 8hour cap on the amount of time per day
that is permitted to be counted toward
PO 00000
Frm 00083
Fmt 4701
Sfmt 4702
32421
the estimation of an episode’s costs for
outlier calculation purposes.
While we appreciate commenters’
feedback regarding the proposed outlier
payment policy described in the CY
2018 HH PPS proposed rule, we are
proposing to maintain the existing
outlier policy under the proposed
PDGM, except that outlier payments
would be determined on a 30-day basis
to align with the 30-day unit of payment
under the proposed PDGM. We believe
that maintaining the existing outlier
policy and applying such policy to 30day periods of care would ensure a
smooth transition within the framework
of the proposed PDGM. We plan to
closely evaluate and model projected
outlier payments within the framework
of the PDGM and consider
modifications to the outlier policy as
appropriate. The requirement that the
total amount of outlier payments not
exceed 2.5 percent of total home health
payments as well as the 10 percent cap
on outlier payments at the home health
agency level are statutory requirements,
as described in section 1895(b)(5) of the
Act. Therefore, we do not have the
authority to adjust or eliminate the 10percent cap or increase the 2.5 percent
maximum outlier payment amount.
Regarding the 8-hour limit on the
amount of time per day counted toward
the estimation of an episode’s costs, as
noted in the CY2017 HH PPS final rule
(81 FR 76729), where a patient is
eligible for coverage of home health
services, Medicare statute limits the
amount of part-time or intermittent
home health aide services and skilled
nursing services covered during a home
health episode. Section 1861(m)(7)(B) of
the Act states that the term ‘‘ ‘part-time
or intermittent services’ means skilled
nursing and home health aide services
furnished any number of days per week
as long as they are furnished (combined)
less than 8 hours each day and 28 or
fewer hours each week (or, subject to
review on a case-by-case basis as to the
need for care, less than 8 hours each day
and 35 or fewer hours per week).’’
Therefore, the daily and weekly cap on
the amount of skilled nursing and home
health aide services combined is a limit
defined within the statute. As we
further noted in the CY 2018 HH PPS
final rule (81 FR 76729), because outlier
payments are predominately driven by
the provision of skilled nursing services,
the 8-hour daily cap on services aligns
with the statute, which requires that
skilled nursing and home health aide
services combined be furnished less
than 8 hours each day. Therefore, we
believe that maintaining the 8-hour per
day cap is appropriate under the
proposed PDGM.
E:\FR\FM\12JYP2.SGM
12JYP2
32422
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
Simulating payments using
preliminary CY 2017 claims data and
the CY 2019 payment rates, we estimate
that outlier payments under the
proposed PDGM with 30-day periods of
care would comprise approximately
4.77 percent of total HH PPS payments
in CY 2019. Given the statutory
requirement to target up to, but no more
than, 2.5 percent of total payments as
outlier payments, we currently estimate
that the FDL ratio under the proposed
PDGM would need to change from 0.55
to 0.71. However, given the proposed
implementation of the PDGM for 30-day
periods of care beginning on or after
January 1, 2020, we will update our
estimate of outlier payments as a
percent of total HH PPS payments using
the most current and complete
utilization data available at the time of
CY 2020 rate-setting.
We invite public comments on
maintaining the current outlier payment
methodology outlined in section III.E of
this proposed rule for the proposed
PDGM and the associated changes in the
regulations text as described in section
III.F.13 of this proposed rule.
13. Conforming Regulations Text
Revisions for the Implementation of the
PDGM in CY 2020
We are proposing to make a number
of revisions to the regulations to
implement the PDGM for episodes
beginning on or after January 1, 2020, as
outlined in sections III.F.1 through
III.F.12 of this proposed rule. We
propose to make conforming changes in
§ 409.43 and part 484 Subpart E to
revise the unit of service from a 60-day
episode to a 30-day period. In addition,
we are proposing to restructure
§ 484.205. These revisions would be
effective on January 1, 2020.
Specifically, we propose to:
• Revise § 409.43, which outlines
plan of care requirements. We propose
to revise several paragraphs to phase out
the unit of service from a 60-day
episode for claims beginning on or
before December 31, 2019, and to
implement a 30-day period as the new
unit of service for claims beginning on
or after January 1, 2020 under the
PDGM. We propose to move and revise
paragraph (c)(2) to § 484.205 as
paragraph (c)(2) aligns more closely
with the regulations addressing the
basis of payment.
• Revise the definitions of rural area
and urban area in § 484.202 to remove
‘‘with respect to home health episodes
ending on or after January 1, 2006’’ from
each definition as this verbiage is no
longer necessary.
• Restructure § 484.205 to provide
more logical organization and revise to
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
account for the change in the unit of
payment under the HH PPS for CY 2020.
The PDGM uses 30-day periods rather
than the 60-day episode used in the
current payment system. Therefore, we
propose to revise § 484.205 to remove
references to ‘‘60-day episode’’ and to
refer more generally to the ‘‘national,
standardized prospective payment’’. We
are also proposing revisions to § 484.205
as follows:
++ Add paragraphs to paragraph (b)
to define the unit of payment.
++ Move language which addresses
the requirement for OASIS submission
from § 484.210 and insert it into
§ 484.205 as new paragraph (c).
++ Move paragraph (c)(2) from
§ 409.43 to § 484.205 as new paragraph
(g) in order to better align with the
regulations detailing the basis of
payment.
++ Add paragraph (h) to discuss split
percentage payments under the current
model and the proposed PDGM.
We are not proposing to change the
requirements or policies relating to
durable medical equipment or
furnishing negative pressure wound
therapy using a disposable device.
• Remove § 484.210 which discusses
data used for the calculation of the
national prospective 60-day episode
payment as we believe that this
information is duplicative and already
incorporated in other sections of part
484, subpart E.
• Revise the section heading of
§ 484.215 from ‘‘Initial establishment of
the calculation of the national 60-day
episode payment’’ to ‘‘Initial
establishment of the calculation of the
national, standardized prospective 60day episode payment and 30-day
payment rates.’’ Also, we propose to add
paragraph (f) to this section to describe
how the national, standardized
prospective 60-day episode payment
rate is converted into a national,
standardized prospective 30-day period
payment and when it applies.
• Revise the section heading of
§ 484.220 from ‘‘Calculation of the
adjusted national prospective 60-day
episode payment rate for case-mix and
area wage levels’’ to ‘‘Calculation of the
case-mix and wage area adjusted
prospective payment rates.’’ We propose
to remove the reference to ‘‘national 60day episode payment rate’’ and replace
it with ‘‘national, standardized
prospective payment’’.
• Revise the section heading in
§ 484.225 from ‘‘Annual update of the
unadjusted national prospective 60-day
episode payment rate’’ to ‘‘Annual
update of the unadjusted national,
standardized prospective 60-day
episode and 30-day payment rates’’.
PO 00000
Frm 00084
Fmt 4701
Sfmt 4702
Also, we propose to revise § 484.225 to
remove references to ‘‘60-day episode’’
and to refer more generally to the
‘‘national, standardized prospective
payment’’. In addition, we propose to
add paragraph (d) to describe the annual
update for CY 2020 and subsequent
calendar years.
• Revise the section heading of
§ 484.230 from ‘‘Methodology used for
the calculation of low-utilization
payment adjustment’’ to ‘‘Low
utilization payment adjustment’’. Also,
we propose to designate the current text
to paragraph (a) and insert language
such that proposed paragraph (a)
applies to claims beginning on or before
December 31, 2019, using the current
payment system. We propose to add
paragraph (b) to describe how low
utilization payment adjustments are
determined for claims beginning on or
after January 1, 2020, using the
proposed PDGM.
• Revise the section heading of
§ 484.235 from ‘‘Methodology used for
the calculation of partial episode
payment adjustments’’ to ‘‘Partial
payment adjustments’’. We propose to
remove paragraphs (a), (b), and (c). We
propose to remove paragraphs (1), (2),
and (3) which describe partial payment
adjustments from paragraph (d) in
§ 484.205 and incorporate them into
§ 484.235. We propose to add paragraph
(a) to describe partial payment
adjustments under the current system,
that is, for claims beginning on or before
December 31, 2019, and paragraph (b) to
describe partial payment adjustments
under the proposed PDGM, that is, for
claims beginning on or after January 1,
2020.
• Revise the section heading for
§ 484.240 from ‘‘Methodology used for
the calculation of the outlier payment’’
to ‘‘Outlier payments.’’ In addition, we
propose to remove language at
paragraph (b) and append it to
paragraph (a). We propose to add
language to proposed revised paragraph
(a) such that paragraph (a) will apply to
payments under the current system, that
is, for claims beginning on or before
December 31, 2019. We propose to
revise paragraph (b) to describe
payments under the proposed PDGM,
that is, for claims beginning on or after
January 1, 2020. In paragraph (c), we
propose to replace the ‘‘estimated’’ cost
with ‘‘imputed’’ cost. Lastly, we propose
to revise paragraph (d) to reflect the per15 minute unit approach to imputing
the cost for each claim.
We are soliciting comments on the
proposed PDGM as outlined in sections
III.F.1 through III.F.12 and the
associated regulations text changes
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
described above and in section IX of this
proposed rule.
G. Proposed Changes Regarding
Certifying and Recertifying Patient
Eligibility for Medicare Home Health
Services
1. Background
Sections 1814(a) and 1835(a) of the
Act require that a physician certify
patient eligibility for home health
services (and recertify, where such
services are furnished over a period of
time). The certifying physician is
responsible for determining whether the
patient meets the eligibility criteria (that
is, homebound status and need for
skilled services) and for understanding
the current clinical needs of the patient
such that the physician can establish an
effective plan of care. In addition, as a
condition for payment, section 6407 of
the Affordable Care Act amended
sections 1814(a)(2)(C) and 1835(a)(2)(A)
of the Act requiring, as part of the
certification for home health services,
that prior to certifying a patient’s
eligibility for the Medicare home health
benefit the certifying physician must
document that the physician himself or
herself or an allowed non-physician
practitioner had a face-to-face encounter
with the patient. The regulations at 42
CFR 424.22(a) and (b) set forth the
requirements for certification and
recertification of eligibility for home
health services. The regulations at
§ 424.22(c) provide the supporting
documentation requirements used as the
basis for determining patient eligibility
for Medicare home health services.
amozie on DSK3GDR082PROD with PROPOSALS2
2. Current Supporting Documentation
Requirements
In determining whether the patient is
or was eligible to receive services under
the Medicare home health benefit at the
start of care, as of January 1, 2015, we
require documentation in the certifying
physician’s medical records and/or the
acute/post-acute care facility’s medical
records (if the patient was directly
admitted to home health) to be used as
the basis for certification of home health
eligibility as described at § 424.22(c).
Specifically, the certifying physician
and/or the acute/post-acute care facility
medical record (if the patient was
directly admitted to home health) for
the patient must contain information
that justifies the referral for Medicare
home health services. This includes
documentation that substantiates the
patient’s:
• Need for the skilled services; and
• Homebound status;
Likewise, the certifying physician
and/or the acute/post-acute care facility
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
medical record (if the patient was
directly admitted to home health) for
the patient must contain the actual
clinical note for the face-to-face
encounter visit that demonstrates that
the encounter:
• Occurred within the required
timeframe,
• Was related to the primary reason
the patient requires home health
services; and
• Was performed by an allowed
provider type.
This information can be found most
often in clinical and progress notes and
discharge summaries. While the face-toface encounter must be related to the
primary reason for home health
services, the patient’s skilled need and
homebound status can be substantiated
through an examination of all submitted
medical record documentation from the
certifying physician, acute/post-acute
care facility, and/or HHA (if certain
requirements are met). The synthesis of
progress notes, diagnostic findings,
medications, and nursing notes, help to
create a longitudinal clinical picture of
the patient’s health status to make the
determination that the patient is eligible
for home health services. HHAs must
obtain as much documentation from the
certifying physician’s medical records
and/or the acute/post-acute care
facility’s medical records (if the patient
was directly admitted to home health)
as they deem necessary to assure
themselves that the Medicare home
health patient eligibility criteria have
been met. HHAs must be able to provide
it to CMS and its review entities upon
request. If the documentation used as
the basis for the certification of
eligibility (that is, the certifying
physician’s and/or the acute/post-acute
care facility’s medical record
documentation) is not sufficient to
demonstrate that the patient is or was
eligible to receive services under the
Medicare home health benefit, payment
will not be rendered for home health
services provided.
3. Proposed Regulations Text Changes
Regarding Information Used to Satisfy
Documentation of Medicare Eligibility
for Home Health Services
Section 51002 of the BBA of 2018
amended sections 1814(a) and 1835(a)
of the Act to provide that, effective for
physician certifications and
recertifications made on or after January
1, 2019, in addition to using the
documentation in the medical record of
the certifying physician or of the acute
or post-acute care facility (where home
health services were furnished to an
individual who was directly admitted to
the HHA from such facility), the
PO 00000
Frm 00085
Fmt 4701
Sfmt 4702
32423
Secretary may use documentation in the
medical record of the HHA as
supporting material, as appropriate to
the case involved. We believe the BBA
of 2018 provisions are consistent with
our existing policy in this area, which
is currently reflected in sub-regulatory
guidance in the Medicare Benefit Policy
Manual (Pub.100–02, chapter 7, section
30.5.1.2) and the Medicare Program
Integrity Manual (Pub. 100–08, chapter
6, section 6.2.3).51 The sub-regulatory
guidance describes the circumstances in
which HHA documentation can be used
along with the certifying physician and/
or acute/post-acute care facility medical
record to support the patient’s
homebound status and skilled need.
Specifically, we state that information
from the HHA, such as the plan of care
required in accordance with 42 CFR
409.43 and the initial and/or
comprehensive assessment of the
patient required in accordance with 42
CFR 484.55, can be incorporated into
the certifying physician’s medical
record for the patient and used to
support the patient’s homebound status
and need for skilled care. However, this
information must be corroborated by
other medical record entries in the
certifying physician’s and/or the acute/
post-acute care facility’s medical record
for the patient. This means that the
appropriately incorporated HHA
information, along with the certifying
physician’s and/or the acute/post-acute
care facility’s medical record, creates a
clinically consistent picture that the
patient is eligible for Medicare home
health services. The certifying physician
officially incorporates the HHA
information into his/her medical record
for the patient by signing and dating the
material. Once incorporated, the
documentation from the HHA, in
conjunction with the certifying
physician and/or acute/post-acute care
facility documentation, must
substantiate the patient’s eligibility for
home health services.
While we believe the provisions in
section 51002 of the BBA of 2018 do not
require a change to the current
regulations because the provisions are
consistent with existing CMS policy, we
are discretionarily proposing to amend
the regulations text at 42 CFR 424.22(c)
to align the regulations text with current
sub-regulatory guidance to allow
medical record documentation from the
HHA to be used to support the basis for
certification and/or recertification of
51 https://www.cms.gov/Regulations-andGuidance/Guidance/Manuals/Downloads/
bp102c07.pdf and https://www.cms.gov/
Regulations-and-Guidance/Guidance/Manuals/
Downloads/pim83c06.pdf.
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32424
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
home health eligibility, if the following
requirements are met:
• The documentation from the HHA
can be corroborated by other medical
record entries in the certifying
physician’s and/or the acute/post-acute
care facility’s medical record for the
patient, thereby creating a clinically
consistent picture that the patient is
eligible for Medicare home health
services as specified in § 424.22 (a)(1)
and (b).
• The certifying physician signs and
dates the HHA documentation
demonstrating that the documentation
from the HHA was considered when
certifying patient eligibility for
Medicare home health services. HHA
documentation can include, but is not
limited to, the patient’s plan of care
required in accordance with 42 CFR
409.43 and the initial and/or
comprehensive assessment of the
patient required in accordance with 42
CFR 484.55.
We believe that this proposal
incorporates existing sub-regulatory
flexibilities into the regulations text that
allow HHA medical record
documentation to support the basis of
home health eligibility. By
incorporating the existing subregulatory guidance into regulation,
HHAs are assured that HHA-generated
documentation can be used as
supporting material for the basis of
home health eligibility, as long as all
conditions are met, as described
previously. HHAs have the discretion to
determine the type and format of any
documentation used to support home
health eligibility. The expectation is that
the HHA-generated supporting medical
record documentation would be used to
support the existing medical record of
the certifying physician or the acute/
post-acute care facility to create a
clinically consistent picture that the
individual is confined to the home and
requires skilled services. Anecdotally,
we have received reports from HHAs
that they typically include this
supporting information on the plan of
care. Generally, the certifying physician
is also the physician who establishes the
plan of care and the plan of care must
be signed by the physician.
Consequently, no additional burden is
incurred by either the HHA or the
certifying physician. As existing subregulatory guidance allows HHAgenerated documentation to be used as
supporting material for the physician’s
determination of eligibility for home
health services, we expect that most
HHAs already have a process in place to
provide this information to the
certifying physician or the acute/post-
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
acute care facility. We welcome
comments on this assumption.
We invite comments on this proposal
to amend the regulations text at
§ 424.22(c), which would codify
subregulatory guidance allowing HHAgenerated medical record
documentation to be used as supporting
material to the certifying physician’s or
the acute and/or post-acute care
facility’s medical record documentation
as part of the certification and/or
recertification of eligibility for home
health services, under certain
circumstances. The corresponding
proposed regulations text changes can
be found in section VIII. of this
proposed rule.
4. Proposed Elimination of
Recertification Requirement To Estimate
How Much Longer Home Health
Services Will Be Required
In the CY 2018 HH PPS proposed rule
(82 FR 35378), we invited public
comments about improvements that can
be made to the health care delivery
system that reduce unnecessary burdens
for clinicians, other providers, and
patients and their families. Specifically,
we asked the public to submit their
ideas for regulatory, sub-regulatory,
policy, practice, and procedural changes
to reduce burdens for hospitals,
physicians, and patients, improve the
quality of care, decrease costs, and
ensure that patients and their providers
and physicians are making the best
health care choices possible. We
specifically stated that CMS would not
respond to the comment submissions in
the final rule. Instead, we would review
the comments submitted in response to
the requests for information and actively
consider them as we develop future
regulatory proposals or future subregulatory policy guidance.
Several commenters requested that
CMS consider eliminating the
requirement that the certifying
physician include an estimate of how
much longer skilled services will be
required at each home health
recertification, as set forth at
§ 424.22(b)(2) and in sub-regulatory
guidance in the Medicare Benefit Policy
Manual (Chapter 7, Section 30.5.2).
Commenters stated that this estimate is
duplicative of the Home Health
Conditions of Participation (CoP)
requirements for the content of the
home health plan of care, set out at 42
CFR 484.60(a)(2).
The Home Health CoP at
§ 484.60(a)(2) sets forth the
requirements for the content of the
home health plan of care, which
includes the types of services, supplies,
and equipment required, as well as, the
PO 00000
Frm 00086
Fmt 4701
Sfmt 4702
frequency and duration of visits to be
made. Commenters stated that the plan
of care requirement already includes the
frequency and duration of visits to be
made and is an estimate of how much
longer home health services are
expected to be required by the patient.
They observed that including this
information as part of the recertification
statement is duplicative and
unnecessary. Commenters went on to
say that because the certifying physician
must review, sign and date the plan of
care at least every 60-days, he/she is
attesting to how much longer he/she
thinks the patient will require home
health services. Commenters also stated
that this estimate appears to have no
value to the patient, the physician, the
HHA, or to CMS, but failure to include
the physician’s estimate of how much
longer skilled care will be required can
result in claim denials.
We have determined that the estimate
of how much longer skilled care will be
required at each recertification is not
currently used for quality, payment, or
program integrity purposes. Given this
consideration and the Home Health CoP
requirements for the content of the
home health plan of care, and to
mitigate any potential denials of home
health claims that otherwise would
meet all other Medicare requirements,
we are proposing to eliminate the
regulatory requirement as set forth at 42
CFR 424.22(b)(2), that the certifying
physician, as part of the recertification
process, provide an estimate of how
much longer skilled services will be
required. All other recertification
content requirements under
§ 424.22(b)(2) would remain unchanged.
We believe the elimination of this
recertification requirement would result
in a reduction of burden for certifying
physicians by reducing the amount of
time physicians spend on the
recertification process and would result
in an overall cost savings of $14.2
million. We provided a more detailed
description of this burden reduction in
section VIII.C.1.c. of this proposed rule.
We invite comments regarding the
proposed elimination of the requirement
that the certifying physician include an
estimate of how much longer skilled
services will be required at each home
health recertification, as well as the
corresponding regulations text changes
at § 424.22(b)(2).
While we are not proposing any
additional changes to the home health
payment regulations in this proposed
rule as suggested by commenters in the
RFI, we will continue to consider
whether future regulatory or subregulatory changes are warranted to
reduce unnecessary burden. We thank
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
the commenters for taking the time to
convey their thoughts and suggestions
on this initiative.
H. Proposed Change Regarding Remote
Patient Monitoring Under the Medicare
Home Health Benefit
Section 4012 of the 21st Century
Cures Act directed the Centers for
Medicare & Medicaid Services (CMS) to
provide information on the current use
of and/or barriers to telehealth services.
This directive, along with advancements
in technology, prompted us to examine
ways in which HHAs can integrate
telehealth and/or remote patient
monitoring into the care planning
process. Telehealth services, under
section 1834(m)(4) of the Act, include
services such as professional
consultations, office visits,
pharmacologic management, and office
psychiatry services furnished via a
telecommunications system by a distant
site physician or practitioner to a
patient located at a designated
‘‘originating site.’’ Originating sites, as
defined under section 1834(m)(4)(C) of
the Act, generally must be certain kinds
of healthcare settings located in certain
geographic areas. This definition
generally does not include the
beneficiary’s home. As a Medicare
condition for payment, an interactive
telecommunications system generally is
required when furnishing telehealth
services. Medicare defines ‘‘interactive
telecommunication systems’’ as audio
and video equipment permitting twoway, real-time interactive
communication between the patient and
distant site physician or practitioner (42
CFR 410.78). Telehealth services are
used to substitute for professional inperson visits when certain eligibility
criteria are met. For patients receiving
care under the Medicare home health
benefit, section 1895(e)(1)(A) of the Act
prohibits payment for services furnished
via a telecommunications system if such
services substitute for in-person home
health services ordered as part of a plan
of care certified by a physician.
However, the statute does not define the
term ‘‘telecommunications system’’ as it
relates to the provision of home health
care and explicitly notes that an HHA is
not prevented from providing services
via a telecommunications system,
assuming the service is not considered
a home health visit for purposes of
eligibility or payment.
Remote patient monitoring, while a
service using a form of
telecommunications, is not considered a
Medicare telehealth service as defined
under section 1834(m) of the Act, but
rather uses ‘‘digital technologies to
collect medical and other forms of
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
health data from individuals in one
location and electronically transmit that
information securely to health care
providers in a different location for
assessment and recommendations.’’ 52
For example, remote patient monitoring
allows the patient to collect and
transmit his or her own clinical data,
such as weight, blood pressure, and
heart rate for monitoring and analysis.
The clinical data is monitored without
a direct interaction between the
practitioner and beneficiary, and then
reviewed by the HHA for potential
consultation with the certifying
physician for changes in the plan of
care. Additionally, because remote
patient monitoring is not statutorily
considered a telehealth service, it would
not be subject to the restrictions on
originating site and interactive
telecommunications systems
technology.
We believe remote patient monitoring
could be beneficial in augmenting the
home health services outlined in the
patient’s plan of care, without
replicating or replacing home health
visits. The plan of care, in accordance
with the home health conditions of
participation (CoPs), must identify
patient-specific measurable outcomes
and goals, and be established,
periodically reviewed, and signed by a
physician (42 CFR 484.60(a)). The HHA
must also promptly alert the relevant
physician(s) to any changes in the
patient’s condition or needs that suggest
that outcomes are not being achieved, or
that the plan of care must be altered (42
CFR 484.60(c)). Remote patient
monitoring could enable the HHA to
more quickly identify any changes in
the patient’s clinical condition, as well
as monitor patient compliance,
prompting physician review of, and
potential changes to, the plan of care, as
required per the CoPs. Particularly in
cases where the home health patient is
admitted for skilled observation and
assessment of the patient’s condition
due to a reasonable potential for
complications or an acute episode,
remote patient monitoring could
augment home health visits until the
patient’s clinical condition stabilized.
Fluctuating or abnormal vital signs
could be monitored between visits,
potentially leading to quicker
interventions and updates to the
treatment plan.
A review of the literature shows that
utilizing remote patient monitoring in
chronic disease management has the
potential to ‘‘significantly improve an
individual’s quality of life, allowing
52 http://www.cchpca.org/remote-patientmonitoring.
PO 00000
Frm 00087
Fmt 4701
Sfmt 4702
32425
patients to maintain independence,
prevent complications, and minimize
costs.’’ 53 Specifically for patients with
chronic obstructive pulmonary disease
(COPD) and congestive heart failure
(CHF), research indicates that remote
patient monitoring has been successful
in reducing readmissions and long-term
acute care utilization.54 Likewise, a
systematic review of evidence collected
by the Agency for Healthcare Research
and Quality (AHRQ) revealed that
remote patient monitoring of chronic
cardiac and respiratory conditions
resulted in lower mortality, improved
quality of life, and reductions in
hospital admissions.55 If changes in
condition are identified early through
careful monitoring, serious
complications may be avoided,
potentially preventing emergency
department visits and hospital
admissions. Surveillance and case
management are frequently occurring
interventions in home health, and
remote patient monitoring leverages
technology to encourage patient
involvement and accountability in order
to improve care coordination.
Anecdotally, we have heard from
various home health agencies regarding
integration of remote patient monitoring
into the care planning process. For
example, on a recent site visit to a home
health agency, CMS participated in a
care coordination meeting, which
included a discussion of the agency’s
experience implementing remote patient
monitoring in home health episodes.
Certain patients with chronic conditions
received tablets pre-loaded with
software enabling patients to take and
transmit their vital signs on a daily
basis. The transmitted health data was
then monitored and analyzed by an
outside service, which contacted the
HHA with any changes or abnormalities.
This example highlights how remote
patient monitoring could be integrated
into the home health episode of care.
Additionally, we believe that the
growth of technology and new software
development could be used in the
53 Rojhan, K., Laplante, S., Sloand, J., Main, C.,
Ibrahim, A., Wild, J., Sturt, N. Remote Monitoring
of Chronic Diseases: A Landscape Assessment of
Policies in Four European Countries (2016) PLOS
One. V11 (5) https://dx.doi.org/10.1371%2Fjour
nal.pone.0155738.
54 Broad, J., Davis, C., Bender, M., Smith, T.
(2014) Feasibility and Acute Care Utilization
Outcomes of a Post-Acute Transitional
Telemonitoring Program for Underserved Chronic
Disease Patients. Journal of Cardiac Failure. Vol 20
(8S) S116. http://dx.doi.org/10.1016/j.cardfail.2
014.06.328.
55 Department of Health and Human Services,
Agency for Healthcare Research and Quality,
Telehealth: Mapping the Evidence for Patient
Outcomes from Systematic Reviews, Technical
Brief Number 26 (Washington, DC: June 2016).
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32426
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
provision of care and care coordination
in the home, as well as empower
patients to be active participants in their
disease management. Other than the
statutory requirement that services
furnished via a telecommunications
system may not substitute for in-person
home health services ordered as part of
a plan of care certified by a physician,
we do not have specific policies
surrounding the use of remote patient
monitoring by HHAs. We anticipate that
HHAs would follow clinical and
manufacturer guidelines when
implementing the technology into
clinical practice, while still meeting all
statutory requirements, conditions for
payment, and the home health
conditions of participation.
Medicare began making separate
payment in CY 2018 for CPT code 99091
that allows physicians and other
healthcare professionals to bill for the
collection and interpretation of
physiologic data digitally stored and/or
transmitted by the patient and/or
caregiver to the physician or other
qualified health care professional (82
CFR 53013). CPT code 99091 is paid
under the Medicare physician fee
schedule, and thus cannot be billed by
HHAs. Additionally, it includes the
interpretation of the physiologic data,
whereas the HHA would only be
responsible for the collection of the
data. However, with this distinction, we
feel the code’s description accurately
describes remote monitoring services.
Therefore, we propose to define remote
patient monitoring under the Medicare
home health benefit as ‘‘the collection of
physiologic data (for example, ECG,
blood pressure, glucose monitoring)
digitally stored and/or transmitted by
the patient and/or caregiver to the
HHA.’’
Although the cost of remote patient
monitoring is not separately billable
under the HH PPS and may not be used
as a substitute for in-person home
health services, there is nothing to
preclude HHAs from using remote
patient monitoring to augment the care
planning process as appropriate. As
such, we believe the expenses of remote
patient monitoring, if used by the HHA
to augment the care planning process,
must be reported on the cost report as
allowable administrative costs (that is,
operating expenses) that are factored
into the costs per visit. Currently, costs
associated with remote patient
monitoring are reported on line 23.20 on
Worksheet A, as direct costs associated
with telemedicine. For 2016,
approximately 3 percent of HHAs
reported telemedicine costs that
accounted for roughly 1 percent of their
total agency costs on the HHA cost
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
report. However, these costs are not
allocated to the costs per visit. We
propose to amend the regulations at 42
CFR 409.46 to include the costs of
remote patient monitoring as an
allowable administrative cost (that is,
operating expense), if remote patient
monitoring is used by the HHA to
augment the care planning process. This
would allow HHAs to report the costs of
remote patient monitoring on the HHA
cost report as part of their operating
expenses. These costs would then be
factored into the costs per visit.
Factoring the costs associated with
remote patient monitoring into the costs
per visit has important implications for
assessing home health costs relevant to
payment, including HHA Medicare
margin calculations. We are soliciting
comments on the proposed definition of
remote patient monitoring under the HH
PPS to describe telecommunication
services used to augment the plan of
care during a home health episode.
Additionally, we welcome comments
regarding additional utilization of
telecommunications technologies for
consideration in future rulemaking. We
are also soliciting comments on the
proposed changes to the regulations at
42 CFR 409.46, to include the costs of
remote patient monitoring as allowable
administrative costs (that is, operating
expenses), as detailed in section IX. of
this proposed rule.
IV. Home Health Value-Based
Purchasing (HHVBP) Model
A. Background
As authorized by section 1115A of the
Act and finalized in the CY 2016 HH
PPS final rule (80 FR 68624), we began
testing the HHVBP Model on January 1,
2016. The HHVBP Model has an overall
purpose of improving the quality and
delivery of home health care services to
Medicare beneficiaries. The specific
goals of the Model are to: (1) Provide
incentives for better quality care with
greater efficiency; (2) study new
potential quality and efficiency
measures for appropriateness in the
home health setting; and (3) enhance the
current public reporting process.
Using the randomized selection
methodology finalized in the CY 2016
HH PPS final rule, we selected nine
states for inclusion in the HHVBP
Model, representing each geographic
area across the nation. All Medicarecertified Home Health Agencies (HHAs)
providing services in Arizona, Florida,
Iowa, Maryland, Massachusetts,
Nebraska, North Carolina, Tennessee,
and Washington (competing HHAs) are
required to compete in the Model.
Requiring all Medicare-certified HHAs
PO 00000
Frm 00088
Fmt 4701
Sfmt 4702
providing services in the selected states
to participate in the Model ensures that:
(1) There is no selection bias; (2)
participating HHAs are representative of
HHAs nationally; and, (3) there is
sufficient participation to generate
meaningful results.
As finalized in the CY 2016 HH PPS
final rule, the HHVBP Model uses the
waiver authority under section
1115A(d)(1) of the Act to adjust
Medicare payment rates under section
1895(b) of the Act beginning in CY 2018
based on the competing HHAs’
performance on applicable measures.
Payment adjustments will be increased
incrementally over the course of the
HHVBP Model in the following manner:
(1) A maximum payment adjustment of
3 percent (upward or downward) in CY
2018; (2) a maximum payment
adjustment of 5 percent (upward or
downward) in CY 2019; (3) a maximum
payment adjustment of 6 percent
(upward or downward) in CY 2020; (4)
a maximum payment adjustment of 7
percent (upward or downward) in CY
2021; and (5) a maximum payment
adjustment of 8 percent (upward or
downward) in CY 2022. Payment
adjustments are based on each HHA’s
Total Performance Score (TPS) in a
given performance year (PY) comprised
of: (1) A set of measures already
reported via the Outcome and
Assessment Information Set (OASIS)
and completed Home Health Consumer
Assessment of Healthcare Providers and
Systems (HHCAHPS) surveys for all
patients serviced by the HHA and select
claims data elements; and (2) three New
Measures for which points are achieved
for reporting data.
For CY 2019, we are proposing to
remove five measures and add two new
proposed composite measures to the
applicable measure set for the HHVBP
model, revise our weighting
methodology for the measures, and
rescore the maximum number of
improvement points.
B. Quality Measures
1. Proposal To Remove Two OASISBased Measures Beginning With
Performance Year 4 (CY 2019)
In the CY 2016 HH PPS final rule, we
finalized a set of quality measures in
Figure 4a: Final PY1 Measures and
Figure 4b: Final PY1 New Measures (80
FR 68671 through 68673) for the
HHVBP Model used in PY1, referred to
as the starter set. We also stated that this
set of measures will be subject to change
or retirement during subsequent model
years and revised through the
rulemaking process (80 FR 68669).
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
The measures were selected for the
Model using the following guiding
principles: (1) Use a broad measure set
that captures the complexity of the
services HHAs provide; (2) incorporate
flexibility for future inclusion of the
Improving Medicare Post-Acute Care
Transformation Act of 2014 (IMPACT)
measures that cut across post-acute care
settings; (3) develop ‘second generation’
(of the HHVBP Model) measures of
patient outcomes, health and functional
status, shared decision making, and
patient activation; (4) include a balance
of process, outcome and patient
experience measures; (5) advance the
ability to measure cost and value; (6)
add measures for appropriateness or
overuse; and (7) promote infrastructure
investments. This set of quality
measures encompasses the multiple
National Quality Strategy (NQS)
domains 56 (80 FR 68668). The NQS
domains include six priority areas
identified in the CY 2016 HH PPS final
rule (80 FR 68668) as the CMS
Framework for Quality Measurement
Mapping. These areas are: (1) Clinical
quality of care; (2) Care coordination; (3)
Population & community health; (4)
Person- and Caregiver-centered
experience and outcomes; (5) Safety;
and (6) Efficiency and cost reduction.
Figures 4a and 4b of the CY 2016 HH
PPS final rule identified 15 outcome
measures (five from the HHCAHPS,
eight from OASIS, and two claims-based
measures), and nine process measures
(six from OASIS, and three New
Measures, which were not previously
reported in the home health setting) for
use in the Model.
In the CY 2017 HH PPS final rule, we
removed four measures from the
measure set for PY1 and subsequent
performance years: (1) Care
Management: Types and Sources of
Assistance; (2) Prior Functioning ADL/
IADL; (3) Influenza Vaccine Data
Collection Period: Does this episode of
care include any dates on or between
October 1 and March 31?; and (4)
Reason Pneumococcal Vaccine Not
Received, for the reasons discussed in
that final rule (81 FR 76743 through
76747).
In the CY 2018 HH PPS final rule, we
removed the Drug Education on All
Medications Provided to Patient/
Caregiver during All Episodes of Care
from the set of applicable measures
beginning with PY3 for the reasons
discussed in that final rule (82 FR 51703
through 51704).
56 2015 Annual Report to Congress, http://
www.ahrq.gov/workingforquality/reports/annualreports/nqs2015annlrpt.htm.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
For PY4 and subsequent performance
years, we propose to remove two
OASIS-based process measures,
Influenza Immunization Received for
Current Flu Season and Pneumococcal
Polysaccharide Vaccine Ever Received,
from the set of applicable measures. We
adopted the Influenza Immunization
Received for Current Flu Season
measure beginning PY1 of the model.
Since that time, we have received input
from both stakeholders and a Technical
Expert Panel (TEP) convened by our
contractor in 2017 that because the
measure does not exclude HHA patients
who were offered the vaccine but
declined it and patients who were
ineligible to receive it due to
contraindications, the measure may not
fully capture HHA performance in the
administration of the influenza vaccine.
In response to these concerns, we are
proposing to remove the measure from
the applicable measure set beginning
PY4.
We also adopted the Pneumococcal
Polysaccharide Vaccine Ever Received
measure beginning PY1 of the model.
This process measure reports the
percentage of HH episodes during
which patients were determined to have
ever received the Pneumococcal
Polysaccharide Vaccine. The measure is
based on guidelines previously issued
by the Advisory Committee on
Immunization Practices (ACIP),57 which
recommended use of a single dose of the
23-valent pneumococcal polysaccharide
vaccine (PPSV23) among all adults aged
65 years and older and those adults aged
19–64 years with underlying medical
conditions that put them at greater risk
for serious pneumococcal infection.58 In
2014, the ACIP updated its guidelines to
recommend that both PCV13 and
PPSV23 be given to all
immunocompetent adults aged ≥65
years.59 The recommended intervals for
57 The Advisory Committee on Immunization
Practices was established under Section 222 of the
Public Health Service Act (42 U.S.C. 217a), as
amended, to assist states and their political
subdivisions in the prevention and control of
communicable diseases; to advise the states on
matters relating to the preservation and
improvement of the public’s health; and to make
grants to states and, in consultation with the state
health authorities, to agencies and political
subdivisions of states to assist in meeting the costs
of communicable disease control programs. (Charter
of the Advisory Committee on Immunization
Practices, filed April 1, 2018. https://www.cdc.gov/
vaccines/acip/committee/ACIP-Charter-2018.pdf).
58 Prevention of Pneumococcal Disease:
Recommendations of the Advisory Committee on
Immunization Practices (ACIP), MMWR 1997;46:1–
24.
59 Tomczyk S, Bennett NM, Stoecker C, et al. Use
of 13-valent pneumococcal conjugate vaccine and
23-valent pneumococcal polysaccharide vaccine
among adults aged ≥65 years: Recommendations of
PO 00000
Frm 00089
Fmt 4701
Sfmt 4702
32427
sequential administration of PCV13 and
PPSV23 depend on several patient
factors including: The current age of the
adult, whether the adult had previously
received PPSV23, and the age of the
adult at the time of prior PPSV23
vaccination (if applicable). Because the
Pneumococcal Polysaccharide Vaccine
Ever Received measure does not fully
reflect the current ACIP guidelines, we
are proposing to remove this measure
from the model beginning PY4.
2. Proposal To Replace Three OASISBased Measures With Two Composite
Measures Beginning With Performance
Year 4
As previously noted, one of the goals
of the HHVBP Model is to study new
potential quality and efficiency
measures for appropriateness in the
home health setting. In the CY 2018 HH
PPS Final Rule, we solicited comment
on additional quality measures for
future consideration in the HHVBP
model, specifically a Total Change in
ADL/IADL Peformance by HHA Patients
Measure, a Composite Functional
Decline Measure, and behavioral health
measures (82 FR 51706 through 51711).
For the reasons discussed, we are
proposing to replace three individual
OASIS measures (Improvement in
Bathing, Improvement in Bed
Transferring, and Improvement in
Ambulation-Locomotion) with two
composite measures: Total Normalized
Composite Change in Self-Care and
Total Normalized Composite Change in
Mobility. These proposed measures use
several of the same ADLs as the
composite measures discussed in the CY
2018 HH PPS Final Rule (82 FR 51707).
Our contractor convened a TEP in
November 2017, which supported the
use of two proposed composite
measures in place of the three
individual measures because HHA
performance on the three individual
measures would be combined with HHA
performance on six additional ADL
measures to create a more
comprehensive assessment of HHA
performance across a broader range of
patient ADL outcomes. The TEP also
noted that HHA performance is
currently measured based on any
change in improvement in patient
status, while the composite measures
would report the magnitude of patient
change (either improvement or decline)
across six self-care and three mobility
patient outcomes.
There are currently three ADL
improvement measures in the HHVBP
Model (Improvement in Bathing,
the Advisory Committee on Immunization Practices
(ACIP). MMWR 2014; 63: 822–5.
E:\FR\FM\12JYP2.SGM
12JYP2
32428
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
Improvement in Bed Transferring, and
Improvement in AmbulationLocomotion). The maximum cumulative
score across all three measures is 30.
Because we are proposing to replace
these three measures with the two
composite measures, we are also
proposing that each of the two
composite measures would have a
maximum score of 15 points, to ensure
that the relative weighting of ADL-based
measures would stay the same if the
proposal to replace the three ADL
improvement measures with the two
composite measures is adopted. That is,
there would still be a maximum of 30
points available for ADL related
measures.
The proposed Total Normalized
Composite Change in Self-Care and
Total Normalized Composite Change in
Mobility measures would represent a
new direction in how quality of patient
care is measured in home health. Both
of these proposed composite measures
combine several existing and endorsed
Home Health Quality Reporting Program
(HH QRP) outcome measures into
focused composite measures to enhance
quality reporting. These proposed
composite measures fit within the
Patient and Family Engagement 60
domain as functional status and
functional decline are important to
assess for residents in home health
settings. Patients who receive care from
an HHA may have functional limitations
and may be at risk for further decline in
function because of limited mobility
and ambulation.
The proposed Total Normalized
Composite Change in Self-Care measure
computes the magnitude of change,
either positive or negative, based on a
normalized amount of possible change
on each of six OASIS-based quality
outcomes. These six outcomes are as
follows:
• Improvement in Grooming (M1800)
• Improvement in Upper Body Dressing
(M1810)
• Improvement in Lower Body Dressing
(M1820)
• Improvement in Bathing (M1830)
• Improvement in Toileting Hygiene
(M1845)
• Improvement in Eating (M1870)
The proposed Total Normalized
Composite Change in Mobility measure
computes the magnitude of change,
either positive or negative, based on the
normalized amount of possible change
on each of three OASIS-based quality
outcomes. These three outcomes are as
follows:
• Improvement in Toilet Transferring
(M1840)
• Improvement in Bed Transferring
(M1850)
• Improvement in Ambulation/
Locomotion (M1860)
The magnitude of possible change for
these OASIS items varies based on the
number of response options. For
example, M1800 (grooming) has four
behaviorally-benchmarked response
options (0 = most independent; 3 = least
independent) while M1830 (bathing)
has seven behaviorally-benchmarked
response options (0 = most
independent; 6 = least independent).
The maximum possible change for a
patient on item M1800 is 3, while the
maximum possible change for a patient
on item M1830 is 6. Both proposed
composite measures would be
computed and normalized at the
episode level, then aggregated to the
HHA level using the following steps:
• Step 1: Calculate absolute change
score for each OASIS item (based on
change between Start of Care(SOC)/
Resumption of Care (ROC) and
discharge) used to compute the Total
Normalized Composite Change in SelfCare (6 items) or Total Normalized
Composite Change in Mobility (3 items)
measures.
• Step 2: Normalize scores based on
maximum change possible for each
OASIS item (which varies across
different items). The normalized scores
result in a maximum possible change for
any single item equal to ‘‘1’’; this score
is provided when a patient achieves the
maximum possible change for the
OASIS item.
• Step 3: Total score for Total
Normalized Composite Change in Self-
Care or Total Normalized Composite
Change in Mobility is calculated by
summing the normalized scores for the
items in the measure. Hence, the
maximum possible range of normalized
scores at the patient level for Total
Normalized Composite Change in SelfCare is ¥6 to +6, and for Total
Normalized Composite Change in
Mobility is ¥3 to +3.
We created two prediction models for
the proposed Total Normalized
Composite Change in Self-Care (TNC_
SC) and Total Normalized Composite
Change in Mobility (TNC_MOB)
measures using information from OASIS
items and patient clinical condition
categories (see Table 50 for details on
the number of OASIS items and OASIS
clinical categories used in the
prediction models). We computed
multiple ordinary least squares (OLS)
analyses beginning with risk factors that
were available from OASIS D items and
patient condition groupings. Any single
OASIS D item might have more than
one risk factor because we create
dichotomous risk factors for each
response option on scaled (from
dependence to independence) OASIS
items. Those risk factors that were
statistically significant at p <0.0001
level were kept in the prediction model.
These two versions (CY 2014 and CY
2015) of the prediction models were
done as ‘‘proof of concept.’’ We are
proposing that the actual prediction
models that would be used if the
proposed composite measures are
finalized would use episodes of care
that ended in CY 2017, which would be
the baseline year for the quality
outcome measures used to compute the
two proposed composite measures, as
listed previously. The baseline year for
these two composite measures would be
calendar year 2017.
The following Table 50 provides an
overview of results from the CY 2014
and CY 2015 prediction models for each
proposed measure with estimated Rsquared values comparing observed vs.
predicted episode-level performance.
amozie on DSK3GDR082PROD with PROPOSALS2
TABLE 50—OBSERVED VERSUS PREDICTED EPISODE-LEVEL PEFORMANCE FOR THE PROPOSED TOTAL NORMALIZED
COMPOSITE CHANGE MEASURES
Number of
OASIS items
used
Prediction model for
2014 TNC_SC ..............................................................................................................................
2015 TNC_SC ..............................................................................................................................
2014 TNC_MOB ..........................................................................................................................
60 2017 Measures under Consideration List.
https://www.cms.gov/Medicare/Quality-Initiatives-
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
Patient-Assessment-Instruments/QualityMeasures/
PO 00000
Frm 00090
Fmt 4701
Sfmt 4702
42
41
42
Number of
clinical
categories
14
13
16
R-squared
value
0.299
0.311
0.289
Downloads/2017-CMS-Measurement-Priorities-andNeeds.pdf.
E:\FR\FM\12JYP2.SGM
12JYP2
32429
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 50—OBSERVED VERSUS PREDICTED EPISODE-LEVEL PEFORMANCE FOR THE PROPOSED TOTAL NORMALIZED
COMPOSITE CHANGE MEASURES—Continued
Number of
OASIS items
used
Prediction model for
2015 TNC_MOB ..........................................................................................................................
Table 50 presents the following
summary information for the prediction
models for the two proposed composite
measures.
• Prediction Model for: This column
identifies the measure and year of data
used for the two ‘‘proof of concept’’
prediction models created for each of
the two proposed composite measures,
Total Normalized Composite Change in
Self-Care (TNC_SC) and Total
Normalized Composite Change in
Mobility (TNC_MOB). The development
of the prediction models was identical
in terms of the list of potential risk
factors and clinical categories. The only
difference was one set of prediction
models used episodes of care that ended
in CY 2014, while the other set of
prediction models used episodes of care
that ended in CY 2015.
• Number of OASIS Items Used: This
column indicates the number of OASIS
items used as risk factors in the
prediction model. For each prediction
model, the number of OASIS items used
is based on the number of risk factors
that were statistically significant at
p <0.0001 level in the prediction model.
• Number of Clinical Categories: This
column indicates the number of patient
clinical categories (for example,
diagnoses related to infections or
neoplasms or endocrine disorders) that
are used as risk factors in the prediction
model.
• R-squared Value: The R-squared
values are a measure of the proportion
of the variation in outcomes that is
accounted for by the prediction model.
The results show that the methodology
that was used to create the prediction
models produced very consistent
models that predict at least 29 percent
of the variability in the proposed
composite measures.
The prediction models are applied at
the episode level to create a specific
predicted value for the composite
measure for each episode of care. These
episode level predicted values are
averaged to compute a national
predicted value and an HHA predicted
value. The episode level observed
values are averaged to compute the
HHA observed value. The HHA TNC_SC
and TNC_MOB observed scores are risk
adjusted based on the following
formula:
HHA Risk Adjusted = HHA Observed +
National Predicted¥HHA Predicted
HHAs are not allowed to skip any of
the OASIS items that are used to
compute these proposed composite
measures or the risk factors that
comprise the prediction models for the
two proposed composite measures. The
OASIS items typically do not include
‘‘not available (NA)’’ or ‘‘unknown
(UK)’’ response options, and per
HHQRP requirements,61 HHAs must
provide responses to all OASIS items for
the OASIS assessment to be accepted
into the CMS data repository. Therefore,
while we believe the likelihood that a
value for one of these items would be
missing is extremely small, we are
proposing to impute a value of ‘‘0’’ if a
value is ‘‘missing.’’ Specifically, if for
some reason the information on one or
more OASIS items that are used to
compute TNC_SC or TNC_MOB is
missing, we impute the value of ‘‘0’’ (no
Number of
clinical
categories
41
R-squared
value
18
0.288
change) for the missing value. Similarly,
if for some reason the information on
one or more OASIS items that are used
as a risk factor is missing, we impute the
value of ‘‘0’’ (no effect) for missing
values that comprise the prediction
models for the two proposed composite
measures. Table 51 contains summary
information for these two proposed
composite measures. Because the
proposed TNC_SC and TNC_MOB are
composite measures rather than simple
outcome measures, the terms
‘‘Numerator’’ and ‘‘Denominator’’ do not
apply to how these measures are
calculated. Therefore, for these
proposed composite measures, the
‘‘Numerator’’ and ‘‘Denominator’’
columns in Table 51 are replaced with
columns describing ‘‘Measure
Computation’’ and ‘‘Risk Adjustment’’.
Table 51 contains the set of applicable
measures under the HHVBP model, if
we finalize our proposals to remove the
OASIS-based measures, Influenza
Immunization Received for Current Flu
Season, Pneumococcal Polysaccharide
Vaccine Ever Received, Improvement in
Ambulation-Locomotion, Improvement
in Bed Transferring, and Improvement
in Bathing, and add the two proposed
OASIS-based outcome composite
measures, Total Change in Self-Care and
Total Change in Mobility. This measure
set, if our proposals are finalized, would
be applicable to PY4 and each
subsequent performance year until such
time that another set of applicable
measures, or changes to this measure
set, are proposed and finalized in future
rulemaking.
amozie on DSK3GDR082PROD with PROPOSALS2
TABLE 51—MEASURE SET FOR THE HHVBP MODEL BEGINNING PY 4 *
NQS domains
Measure title
Measure type
Identifier
Data source
Clinical Quality of
Care.
Improvement in
Dyspnea.
Outcome ......
NA ................
OASIS
(M1400).
Communication &
Care Coordination.
Discharged to
Community.
Outcome ......
NA ................
OASIS
(M2420).
Numerator
Denominator
Number of home health episodes
of care where the discharge assessment indicates less dyspnea
at discharge than at start (or resumption) of care.
Number of home health episodes
where the assessment completed at the discharge indicates
the patient remained in the community after discharge.
Number of home health episodes
of care ending with a discharge
during the reporting period, other
than those covered by generic or
measure-specific exclusions.
Number of home health episodes
of care ending with discharge or
transfer to inpatient facility during
the reporting period, other than
those covered by generic or
measure-specific exclusions.
61 Data Specifications—https://www.cms.gov/
Medicare/Quality-Initiatives-Patient-AssessmentInstruments/OASIS/DataSpecifications.html.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00091
Fmt 4701
Sfmt 4702
E:\FR\FM\12JYP2.SGM
12JYP2
32430
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 51—MEASURE SET FOR THE HHVBP MODEL BEGINNING PY 4 *—Continued
NQS domains
Measure title
Measure type
Identifier
Numerator
Denominator
Efficiency & Cost
Reduction.
Acute Care Hospitalization: Unplanned Hospitalization during first 60 days
of Home Health.
Outcome ......
NQF0171 .....
CCW
(Claims).
Number of home health stays for
patients who have a Medicare
claim for an unplanned admission to an acute care hospital in
the 60 days following the start of
the home health stay.
NQF0173 .....
CCW
(Claims).
Number of home health stays for
patients who have a Medicare
claim for outpatient emergency
department use and no claims
for acute care hospitalization in
the 60 days following the start of
the home health stay.
Outcome ......
NQF0177 .....
OASIS
(M1242).
Patient Safety ........
Improvement in
Outcome ......
Management of
Oral Medications.
NQF0176 .....
OASIS
(M2020).
Patient & Caregiver-Centered
Experience.
Patient & Caregiver-Centered
Experience.
Care of Patients ...
Outcome ......
......................
CAHPS ........
Number of home health episodes
of care where the value recorded
on the discharge assessment indicates less frequent pain at discharge than at the start (or resumption) of care.
Number of home health episodes
of care where the value recorded
on the discharge assessment indicates less impairment in taking
oral medications correctly at discharge than at start (or resumption) of care.
NA ...................................................
Number of home health stays that
begin during the 12-month observation period. A home health
stay is a sequence of home
health payment episodes separated from other home health
payment episodes by at least 60
days.
Number of home health stays that
begin during the 12-month observation period. A home health
stay is a sequence of home
health payment episodes separated from other home health
payment episodes by at least 60
days.
Number of home health episodes
of care ending with a discharge
during the reporting period, other
than those covered by generic or
measure-specific exclusions.
Efficiency & Cost
Reduction.
Emergency Department Use
without Hospitalization.
Outcome ......
Patient Safety ........
Improvement in
Pain Interfering
with Activity.
Communications
between Providers and Patients.
Specific Care
Issues.
Outcome ......
......................
CAHPS ........
NA ...................................................
NA.
Outcome ......
......................
CAHPS ........
NA ...................................................
NA.
Overall rating of
home health
care.
Willingness to recommend the
agency.
Influenza Vaccination Coverage
for Home Health
Care Personnel.
Outcome ......
......................
CAHPS ........
NA ...................................................
NA.
Outcome ......
......................
CAHPS ........
NA ...................................................
NA.
Process ........
NQF0431
(Used in
other care
settings,
not Home
Health).
Herpes zoster
(Shingles) vaccination: Has the
patient ever received the shingles vaccination?.
Process ........
NA ................
Reported by
Healthcare personnel in the de- Number of healthcare personnel
HHAs
nominator population who during
who
are
working
in
the
through
the time from October 1 (or when
healthcare facility for at least 1
Web Portal.
the vaccine became available)
working day between October 1
through March 31 of the following
and March 31 of the following
year: (a) Received an influenza
year, regardless of clinical revaccination administered at the
sponsibility or patient contact.
healthcare facility, or reported in
writing or provided documentation that influenza vaccination
was received elsewhere: Or (b)
were determined to have a medical contraindication/condition of
severe allergic reaction to eggs
or to other components of the
vaccine or history of GuillainBarre Syndrome within 6 weeks
after a previous influenza vaccination; or (c) declined influenza
vaccination; or (d) persons with
unknown vaccination status or
who do not otherwise meet any
of the definitions of the previously mentioned numerator categories.
Reported by
Total number of Medicare bene- Total number of Medicare beneHHAs
ficiaries aged 60 years and over
ficiaries aged 60 years and over
through
who report having ever received
receiving services from the HHA.
Web Portal.
zoster vaccine (shingles vaccine).
amozie on DSK3GDR082PROD with PROPOSALS2
Patient & Caregiver-Centered
Experience.
Patient & Caregiver-Centered
Experience.
Patient & Caregiver-Centered
Experience.
Population/Community Health.
Population/Community Health.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00092
Data source
Fmt 4701
Sfmt 4702
E:\FR\FM\12JYP2.SGM
12JYP2
Number of home health episodes
of care ending with a discharge
during the reporting period, other
than those covered by generic or
measure-specific exclusions.
NA.
32431
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 51—MEASURE SET FOR THE HHVBP MODEL BEGINNING PY 4 *—Continued
NQS domains
Measure title
Communication &
Care Coordination.
NQS domains
Advance Care
Plan.
Measure title
Measure type
Identifier
Process ........
NQF0326 .....
Data source
Measure type
Identifier
Numerator
Denominator
Reported by
Patients who have an advance
HHAs
care plan or surrogate decision
through
maker documented in the medWeb Portal.
ical record or documentation in
the medical record that an advanced care plan was discussed
but the patient did not wish or
was not able to name a surrogate decision maker or provide
an advance care plan.
Data source
All patients aged 65 years and
older.
Measure computation **
Risk adjustment **
A prediction model is computed at
the episode level. The predicted
value for the HHA and the national value of the predicted values are calculated and are used
to calculate the risk-adjusted rate
for the HHA, which is calculated
using this formula: HHA Risk Adjusted = HHA Observed + National Predicted ¥ HHA Predicted.
A prediction model is computed at
the episode level. The predicted
value for the HHA and the national value of the predicted values are calculated and are used
to calculate the risk-adjusted rate
for the HHA, which is calculated
using this formula: HHA Risk Adjusted = HHA Observed + National Predicted ¥ HHA Predicted.
Patient and Family
Engagement.
Total Normalized
Composite
Change in SelfCare.
Composite
Outcome.
NA ................
OASIS
(M1800)
(M1810)
(M1820)
(M1830)
(M1845)
(M1870).
The total normalized change in
self-care functioning across six
OASIS items (grooming, bathing,
upper & lower body dressing, toilet hygiene, and eating).
Patient and Family
Engagement.
Total Normalized
Composite
Change in Mobility.
Composite
Outcome.
NA ................
OASIS
(M1840)
(M1850)
(M1860).
The total normalized change in mobility functioning across three
OASIS items (toilet transferring,
bed transferring, and ambulation/
locomotion).
* Notes: For more detailed information on the measures using OASIS refer to the OASIS–C2 Guidance Manual effective January 1, 2017 available at https://
www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/Downloads/OASIS-C2-Guidance-Manual-6-29-16.pdf.
For NQF endorsed measures see The NQF Quality Positioning System available at http://www.qualityforum.org/QPS. For non-NQF measures using OASIS see
links for data tables related to OASIS measures at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HomeHealthQualityInits/
index.html. For information on HHCAHPS measures see https://homehealthcahps.org/SurveyandProtocols/SurveyMaterials.aspx.
** Because the proposed Total Normalized Composite Change in Self-Care and Mobility measures are composite measures rather than simply outcome measures,
the terms ‘‘Numerator’’ and ‘‘Denominator’’ do not apply.
amozie on DSK3GDR082PROD with PROPOSALS2
We invite public comment on the
proposals to remove two OASIS-based
measures, Influenza Immunization
Received for Current Flu Season and
Pneumococcal Polysaccharide Vaccine
Ever Received, from the set of
applicable measures for PY4 and
subsequent performance years. We also
invite public comment on the proposals
to replace three OASIS-based measures,
Improvement in AmbulationLocomotion, Improvement in Bed
Transferring, and Improvement in
Bathing, with two proposed composite
measures, Total Normalized Composite
Change in Self-Care and Total
Normalized Composite Change in
Mobility, for PY4 and subsequent
performance years.
3. Proposal To Reweight the OASISBased, Claims-Based, and HHCAHPS
Measures
In the CY 2016 HH PPS final rule, we
finalized weighting measures within
each of the HHVBP Model’s four
classifications (Clinical Quality of Care,
Care Coordination and Efficiency,
Person and Caregiver-Centered
Experience, and New Measures) the
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
same for the purposes of payment
adjustment. We finalized weighting
each individual measure equally
because we did not want any one
measure within a classification to be
more important than another measure,
to encourage HHAs to approach quality
improvement initiatives more broadly,
and to address concerns where HHAs
may be providing services to
beneficiaries with different needs.
Under this approach, a measure’s
weight remains the same even if some
of the measures within a classification
group have no available data. We stated
that in subsequent years of the Model,
we would monitor the impact of equally
weighting the individual measures and
may consider changes to the weighting
methodology after analysis and in
rulemaking (80 FR 68679).
For PY4 and subsequent performance
years, we are proposing to revise how
we weight the individual measures and
to amend § 484.320(c) accordingly.
Specifically, we are proposing to change
our methodology for calculating the
Total Performance Score (TPS) by
weighting the measure categories so that
PO 00000
Frm 00093
Fmt 4701
Sfmt 4702
the OASIS-based measure category and
the claims-based measure category
would each count for 35 percent and the
HHCAHPS measure category would
count for 30 percent of the 90 percent
of the TPS that is based on performance
of the Clinical Quality of Care, Care
Coordination and Efficiency, and Person
and Caregiver-Centered Experience
measures. Note that these measures and
their proposed revised weights would
continue to account for the 90 percent
of the TPS that is based on the Clinical
Quality of Care, Care Coordination and
Efficiency, and Person and CaregiverCentered Experience measures. Data
reporting for each New Measure would
continue to have equal weight and
account for the 10 percent of the TPS
that is based on the New Measures
collected as part of the Model. As
discussed further below, we believe that
this proposed reweighting, to allow for
more weight for the claims-based
measures, would better support
improvement in those measures.
Weights would also be adjusted under
this proposal for HHAs that are missing
entire measure categories. For example,
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
if an HHA is missing all HHCAHPS
measures, the OASIS and claims-based
measure categories would both have the
same weight (50 percent each). We
believe that this approach would also
increase the weight given to the claimsbased measures, and as a result give
HHAs more incentive to focus on
improving them. Additionally, if
measures within a category are missing,
the weights of the remaining measures
within that measure category would be
adjusted proportionally, while the
weight of the category as a whole would
remain consistent. We are also
proposing that the weight of the Acute
Care Hospitalization: Unplanned
Hospitalization during first 60 days of
Home Health claims-based measure
would be increased so that it has three
times the weight of the Emergency
Department Use without Hospitalization
claims-based measure, based on our
understanding that HHAs may have
more control over the Acute Care
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
Hospitalization: Unplanned
Hospitalization during first 60 days of
Home Health claims-based measure. In
addition, because inpatient
hospitalizations generally cost more
than ED visits, we believe improvement
in the Acute Care Hospitalization:
Unplanned Hospitalization during first
60 days of Home Health claims-based
measure may have a greater impact on
Medicare expenditures.
We are proposing to reweight the
measures based on our ongoing
monitoring and analysis of claims and
OASIS-based measures, which shows
that there has been a steady
improvement in OASIS-based measures,
while improvement in claims-based
measures has been relatively flat. For
example, Figures 5 and 6 show the
change in average performance for the
claims-based and OASIS-based
performance measures used in the
Model. For both figures, we report the
trends observed in Model and non-
PO 00000
Frm 00094
Fmt 4701
Sfmt 4725
Model states. In both Model and nonModel states, there has been a slight
increase (indicating worse performance)
in the Acute Care Hospitalization:
Unplanned Hospitalization during first
60 days of Home Health measure. For all
OASIS-based measures, except the
Improvement in Management of Oral
Medications measure and the Discharge
to Community measure, there has been
substantial improvement in both Model
and non-Model states. Given these
results, we believe that increasing the
weight given to the claims-based
measures, and the Acute Care
Hospitalization: Unplanned
Hospitalization during first 60 days of
Home Health measure in particular, may
give HHAs greater incentive to focus on
quality improvement in the claimsbased measures. Increasing the weight
of the claims-based measures was also
supported by the contractor’s TEP.
BILLING CODE 4120–01–P
E:\FR\FM\12JYP2.SGM
12JYP2
EP12JY18.004
32432
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
proposed composite measures)
accounting for an equal proportion of
that 50 percent, and the total weight
given to the claims-based measures
scores would be 50 percent, with the
Acute Care Hospitalization: Unplanned
Hospitalizations measure accounting for
37.50 percent and the ED Use without
Hospitalization measure accounting for
12.50 percent. Finally, Table 52 shows
the change in the number of HHAs, by
size, that would qualify for a TPS and
payment adjustment under the current
and proposed weighting methodologies,
using CY 2016 data. We note that Table
52 reflects only the proposed changes to
the weighting methodology and not the
PO 00000
Frm 00095
Fmt 4701
Sfmt 4702
other proposed changes to the HHVBP
model for CY 2019 which, if finalized,
would change the proposed weights as
set forth in Table 52. We refer readers
to Table 65 in section X. of this
proposed rule, which reflects the
weighting that would apply if all of our
proposed changes, including the
proposed changes to the applicable
measure set, are adopted for CY 2019.
As reflected in that table, the two
proposed composite measures, if
finalized, would have weights of 7.5
percent when all three measure
categories are reported.
E:\FR\FM\12JYP2.SGM
12JYP2
EP12JY18.005
amozie on DSK3GDR082PROD with PROPOSALS2
Table 52 shows the current and
proposed weights for each measure
based on this proposal to change the
weighting methodology from weighting
each individual measure equally to
weighting the OASIS, claims-based, and
HHCAHPS measure categories at 35percent, 35-percent and 30-percent,
respectively. Table 52 also shows the
proposed weighting methodology based
on various scoring scenarios. For
example, for HHAs that are exempt from
their beneficiaries completing
HHCAHPS surveys, the total weight
given to OASIS-based measures scores
would be 50 percent, with all OASISbased measures (other than the two
32433
amozie on DSK3GDR082PROD with PROPOSALS2
32434
BILLING CODE 4120–01–C
Jkt 244001
Current Weights (equal weighting)
All
No
No
No claims or
Measures
HHCAHPS
claims
HHCAHPS
(n=1,026)
(n=465)
(n=20)
(n=99)
LargeHHAs
SmallHHAs
Frm 00096
Fmt 4701
Sfmt 4702
12JYP2
claims-based measures account for 35percent, and the HHCAHPS account for
30-percent of the 90 percent of the TPS
that is based on performance on these
E:\FR\FM\12JYP2.SGM
Coordination and Efficiency, and Person
and Caregiver-Centered Experience
classifications so that the OASIS-based
measures account for 35-percent, the
PO 00000
OASIS
Flu vaccine ever received*
Pneumococcal vaccine*
Improve Bathing**
Improve Bed Transfer**
Improve Ambulation**
Improve Oral Meds
Improve Dyspnea
Improve Pain
Discharge to Community
Total weight for OASIS measures
Claims
Hospitalizations
Outpatient ED
Total weight for claims measures
HHCAHPS
Care of patients
Communication between provider
and patient
Discussion of specific care issues
Overall rating of care
Willingness to recommend HHA to
family or friends
Total weight for HHCAHPS
measures
Proposed Weights (OASIS 35%; Claims 35%; HHCAHPS 30%)
All
No
No claims or
Measures
HHCAHPS
HHCAHPS
(n=1,026)
(n=460)
No claims (n=20)
(n=73)
1023
3
382
83
20
0
49
50
1023
3
380
80
20
0
39
34
6.25%
6.25%
6.25%
6.25%
6.25%
6.25%
6.25%
6.25%
6.25%
9.09%
9.09%
9.09%
9.09%
9.09%
9.09%
9.09%
9.09%
9.09%
7.14%
7.14%
7.14%
7.14%
7.14%
7.14%
7.14%
7.14%
7.14%
ll.ll%
ll.ll%
ll.ll%
ll.ll%
ll.ll%
ll.ll%
ll.ll%
ll.ll%
ll.ll%
3.89%
3.89%
3.89%
3.89%
3.89%
3.89%
3.89%
3.89%
3.89%
5.56%
5.56%
5.56%
5.56%
5.56%
5.56%
5.56%
5.56%
5.56%
5.98%
5.98%
5.98%
5.98%
5.98%
5.98%
5.98%
5.98%
5.98%
ll.ll%
ll.ll%
ll.ll%
ll.ll%
ll.ll%
ll.ll%
ll.ll%
ll.ll%
ll.ll%
56.25%
81.82%
64.26%
100.00%
35.00%
50.00%
53.85%
100.00%
6.25%
6.25%
9.09%
9.09%
0.00%
0.00%
0.00%
0.00%
26.25%
8.75%
37.50%
12.50%
0.00%
0.00%
0.00%
0.00%
12.50%
18.18%
0.00%
0.00%
35.00%
50.00%
0.00%
0.00%
6.25%
0.00%
7.14%
0.00%
6.00%
0.00%
9.23%
0.00%
6.25%
6.25%
6.25%
0.00%
0.00%
0.00%
7.14%
7.14%
7.14%
0.00%
0.00%
0.00%
6.00%
6.00%
6.00%
0.00%
0.00%
0.00%
9.23%
9.23%
9.23%
0.00%
0.00%
0.00%
6.25%
0.00%
7.14%
0.00%
6.00%
0.00%
9.23%
0.00%
31.25%
0.00%
35.70%
0.00%
30.00%
0.00%
46.15%
0.00%
Notes: *Measures are proposed to be removed from the applicable measure set beginning CY 2019/PY 4.
**Measures are proposed to be removed if proposed composite measures are added to the applicable measure set beginning CY 2019/PY 4.
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
17:39 Jul 11, 2018
We invite public comment on the
proposal to reweight the measures
within the Clinical Quality of Care, Care
VerDate Sep<11>2014
EP12JY18.006
TABLE 52: CURRENT AND PROPOSED WEIGHTS FOR INDIVIDUAL PERFORMANCE MEASURES
32435
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
measures, for PY4 and subsequent
performance years. We are also
proposing to amend § 484.320 to reflect
these proposed changes. Specifically,
we are proposing to amend § 484.320 to
state that for performance years 4 and 5,
CMS will sum all points awarded for
each applicable measure within each
category of measures (OASIS-based,
claims-based, and HHCAHPS) excluding
the New Measures, weighted at 35percent for the OASIS-based measure
category, 35-percent for the claimsbased measure category, and 30-percent
for the HHCAHPS measure category, to
calculate a value worth 90-percent of
the Total Performance Score. Table 53 is
a sample calculation to show how this
proposal, in connection with the
proposed changes to the measure set,
would affect scoring under the model as
set forth in prior rulemaking (80 FR
68679 through 68686) when all three
measure categories are reported.
TABLE 53—SAMPLE HHVBP TOTAL PERFORMANCE SCORE CALCULATION UNDER CURRENT AND PROPOSED WEIGHTS
FOR INDIVIDUAL PERFORMANCE MEASURES
Points for
current
measures
OASIS:
Composite self-care ......................................................
Composite mobility .......................................................
Flu vaccine ever received .............................................
Pneumococcal vaccine .................................................
Improvement in bathing ................................................
Improvement in bed transfer ........................................
Improvement in ambulation ..........................................
Improve oral meds ........................................................
Improve Dyspnea ..........................................................
Improve Pain .................................................................
Discharge to community ...............................................
Claims:
Outpatient ED ...............................................................
Hospitalizations .............................................................
HHCAHPS:
Care of patients ............................................................
Communication between provider and patient .............
Discussion of special care issues ................................
Overall rating of care ....................................................
Willingness to recommend HHA to family and friends
Total .......................................................................
Current
weight
(%)
Points for
proposed
measures
0.00
0.00
6.25
6.25
6.25
6.25
6.25
6.25
6.25
6.25
6.25
7.661
5.299
N/A
N/A
N/A
N/A
N/A
3.302
4.633
4.279
0.618
7.50
7.50
0.00
0.00
0.00
0.00
0.00
5.00
5.00
5.00
5.00
9.19
6.36
N/A
N/A
N/A
N/A
N/A
2.64
3.71
3.42
0.49
0
1.18
6.25
6.25
0
1.18
8.75
26.25
0.00
4.96
10
10
10
5.921
8.406
6.25
6.25
6.25
6.25
6.25
10
10
10
5.921
8.406
6.00
6.00
6.00
6.00
6.00
9.60
9.60
9.60
5.68
8.07
87.123
100.00
........................
100.00
57.776
Current
Raw score ................................................................................................................................................................
Scaled score (adjusted for # of measures present) ................................................................................................
Weighted score (90% of scaled score) ...................................................................................................................
New measure score .................................................................................................................................................
Weighted new measure score (10% of new measure score) .................................................................................
TPS (sum of weighted score and weighted new measure score) ..........................................................................
amozie on DSK3GDR082PROD with PROPOSALS2
1. Proposal To Rescore the Maximum
Amount of Improvement Points
In the CY 2016 HH PPS final rule, we
finalized that an HHA could earn 0–10
points based on how much its
performance in the performance period
improved from its performance on each
measure in the Clinical Quality of Care,
Care Coordination and Efficiency, and
Person and Caregiver-Centered
Experience classifications during the
baseline period. We noted, in response
to public comment about our scoring
methodology for improvement points,
that we would monitor and evaluate the
impact of awarding an equal amount of
points for both achievement and
improvement and may consider changes
to the weight of the improvement score
relative to the achievement score in
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
future years through rulemaking (80 FR
68682).
We are proposing to reduce the
maximum amount of improvement
points, from 10 points to 9 points, for
PY4 and subsequent performance years
for all measures except for, if finalized,
the Total Normalized Composite Change
in Self-Care and Total Normalized
Composite Change in Mobility
measures, for which the maximum
improvement points would be 13.5. The
maximum score of 13.5 represents 90percent of the maximum 15 points that
could be earned for each of the two
proposed composite measures. The
HHVBP Model focuses on having all
HHAs provide high quality care and we
believe that awarding more points for
achievement than for improvement
beginning with PY4 of the model would
support this goal. We expect that at this
PO 00000
Frm 00097
Weighted
points
N/A
N/A
7.662
8.162
5.064
4.171
3.725
3.302
4.633
4.279
0.618
Total performance score calculation
C. Performance Scoring Methodology
Proposed
weight
(%)
Fmt 4701
Sfmt 4702
87.123
58.082
52.274
100.000
10
62.274
Proposed
57.776
57.776
51.998
100.000
10
61.998
point several years into participation in
the Model, participating HHAs have had
enough time to make the necessary
investments in quality improvement
efforts to support a higher level of care,
warranting a slightly stronger focus on
achievement over improvement on
measure performance.
We believe that reducing the
maximum improvement points to 9
would encourage HHAs to focus on
achieving higher performance levels and
incentivizing in this manner would
encourage HHAs to rely less on their
improvement and more on their
achievement.
This proposal would also be
consistent with public comments, and
suggestions provided by our contractor’s
TEP. As summarized in the CY 2016 HH
PPS final rule, we received comments
encouraging us to focus on rewarding
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
the achievement of specified quality
scores, and reduce the emphasis on
improvement scores after the initial 3
years of the HHVBP Model. Some
commenters suggested measuring
performance primarily based on
achievement of specified quality scores
with a declining emphasis over time on
improvement versus achievement (80
FR 68682).
The TEP also agreed with reducing
the maximum number of improvement
points, which they believed would
better encourage HHAs to pursue
improved health outcomes for
beneficiaries. We note that for the
Hospital Value-Based Purchasing
(HVBP) Program, CMS finalized a
scoring methodology where hospitals
could earn a maximum of 9
improvement points if their
improvement score falls between the
improvement threshold and the
benchmark (76 FR 26515). Similarly,
HHVBP is now proposing a scoring
methodology where HHAs could earn a
maximum of 9 improvement points.
We propose that an HHA would earn
0–9 points based on how much its
performance during the performance
period improved from its performance
on each measure in the Clinical Quality
of Care, Care Coordination and
Efficiency, and Person and CaregiverCentered Experience classifications
during the baseline period. A unique
improvement range for each measure
would be established for each HHA that
defines the difference between the
HHA’s baseline period score and the
same state level benchmark for the
measure used in the achievement
scoring calculation, according to the
proposed improvement formula. If an
HHA’s performance on the measure
during the performance period was—
• Equal to or higher than the
benchmark score, the HHA could
receive an improvement score of 9
points (an HHA with performance equal
to or higher than the benchmark score
could still receive the maximum of 10
points for achievement);
2. Examples of Calculating Achievement
and Improvement Scores
exceeds the benchmark so the HHA
earned the maximum 10 points based on
its achievement score. Its improvement
score is irrelevant in the calculation
because measure performance exceeded
the benchmark.
Figure 7 also shows the scoring for
HHA ‘B.’ As referenced below, HHA B’s
performance on this measure went from
52.168 (which was below the
achievement threshold) in the baseline
period to 76.765 (which is above the
achievement threshold) in the
performance period. Applying the
achievement scale, HHA B’ would earn
1.067 points for achievement, calculated
as follows: 9 * (76.765 ¥ 75.358)/
(97.676 ¥ 75.358) + 0.5 = 1.067.62
Calculating HHA B’s improvement score
yields the following result: based on
HHA B’s period-to-period improvement,
from 52.168 in the baseline year to
76.765 in the performance year, HHA B
would earn 4.364 points, calculated as
follows: 9 * (76.765 ¥ 52.168)/(97.676
¥ 75.358) ¥ 0.5 = 4.364.63 Because the
higher of the achievement and
improvement scores is used, HHA B
would receive 4.364 points for this
measure.
In Figure 8, HHA ‘C’ yielded a decline
in performance on the improvement in
pain measure, falling from 70.266 to
58.487. HHA C’s performance during
the performance period was lower than
the achievement threshold of 75.358
and, as a result, the HHA would receive
0 points based on achievement. It would
also receive 0 points for improvement,
because its performance during the
performance period was lower than its
performance during the baseline period.
62 Achievement points are calculated as 9 * (HHA
Performance Year Score ¥ Achievement
Threshold)/(Benchmark ¥ Achievement threshold)
+ 0.5.
63 The formula for calculating improvement
points is 9 * (HHA Performance Year Score ¥ HHA
Baseline Period Score)/(HHA Benchmark ¥ HHA
Baseline Period Score) ¥ 0.5.
For illustrative purposes we present
the following examples of how the
proposed changes to the performance
scoring methodology would be applied
in the context of the measures in the
Clinical Quality of Care, Care
Coordination and Efficiency, and Person
and Caregiver Centered Experience
classifications. These HHA examples are
based on data from 2015 (for the
baseline period) and 2016 (for the
performance year). Figure 7 shows the
scoring for HHA ‘A’ as an example. The
benchmark calculated for the
improvement in pain measure is 97.676
for HHA A (note that the benchmark is
calculated as the mean of the top decile
in the baseline period for the state). The
achievement threshold was 75.358 (this
is defined as the performance of the
median or the 50th percentile among
HHAs in the baseline period for the
state). HHA A’s Year 1 performance rate
for the measure was 98.348, which
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00098
Fmt 4701
Sfmt 4702
• Greater than its baseline period
score but below the benchmark (within
the improvement range), the HHA could
receive an improvement score of 0–9
(except for, if finalized, the Total
Normalized Composite Change in SelfCare and Total Normalized Composite
Change in Mobility measures, for which
the maximum improvement score
would be 15) for each of the two
proposed composite measures) based on
the formula and as illustrated in the
examples below; or,
• Equal to or lower than its baseline
period score on the measure, the HHA
could receive zero points for
improvement.
BILLING CODE 4120–01–P
E:\FR\FM\12JYP2.SGM
12JYP2
EP12JY18.007
amozie on DSK3GDR082PROD with PROPOSALS2
32436
32437
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
FIGURE 7: EXAMPLE OF AN HHA EARNING POINTS BY
ACHIEVEMENT OR IMPROVEMENT SCORING
Measure: Improvement in Pain
Achievement Threshold
Achievement
75.358
Benchmark
2014
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00099
Fmt 4701
Sfmt 4725
E:\FR\FM\12JYP2.SGM
12JYP2
EP12JY18.008
amozie on DSK3GDR082PROD with PROPOSALS2
HHA B Score: The greater of 1.067 points for
achievement and 4.364 points for improvement.
32438
BILLING CODE 4120–01–C
We would monitor and evaluate the
impact of reducing the maximum
improvement points to 9 and would
consider whether to propose more
changes to the weight of the
improvement score relative to the
achievement score in future years
through rulemaking.
We invite public comment on the
proposal to reduce the maximum
amount of improvement points, from 10
points to 9 points for PY 4 and
subsequent performance years.
amozie on DSK3GDR082PROD with PROPOSALS2
D. Update on the Public Display of Total
Performance Scores
In the CY 2016 HH PPS final rule (80
FR 68658), we stated that one of the
three goals of the HHVBP Model is to
enhance the current public reporting
processes. We reiterated this goal and
continued discussing the public display
of HHAs’ Total Performance Scores
(TPSs) in the CY 2017 HH PPS final rule
(81 FR 76751 through 76752). We
believe that publicly reporting a
participating HHA’s TPS will encourage
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
providers and patients to use this
information when selecting an HHA to
provide quality care. We are encouraged
by the previous stakeholder comments
and support for public reporting that
could assist patients, physicians,
discharge planners, and other referral
sources to choose higher-performing
HHAs.
In the CY 2017 HH PPS final rule, we
noted that one commenter suggested
that we not consider public display
until after the Model was evaluated.
Another commenter favored the public
display of the TPS, but recommended
that CMS use a transparent process and
involve stakeholders in deciding what
will be reported, and provide a review
period with a process for review and
appeal before reporting.
As discussed in the CY 2017 HH PPS
final rule, we are considering public
reporting for the HHVBP Model after
allowing analysis of at least eight
quarters of performance data for the
Model and the opportunity to compare
how these results align with other
publicly reported quality data (81 FR
PO 00000
Frm 00100
Fmt 4701
Sfmt 4702
76751). While we are not making a
specific proposal at this time, we are
soliciting further public comment on
what information, specifically from the
CY 2017 Annual Total Performance
Score and Payment Adjustment Reports
and subsequent annual reports, should
be made publicly available. We note
that HHAs have the opportunity to
review and appeal their Annual Total
Performance Score and Payment
Adjustment Reports as outlined in the
appeals process finalized in the CY 2017
HH PPS final rule (81 FR 76747 through
76750). Examples of the information
included in the Annual Total
Performance Score and Payment
Adjustment Report include the agency:
Name, address, TPS, payment
adjustment percentage, performance
information for each measure used in
the Model (for example, quality measure
scores, achievement, and improvement
points), state and cohort information,
and percentile ranking. Based on the
public comments received, we will
consider what information, specifically
from the annual reports, we may
E:\FR\FM\12JYP2.SGM
12JYP2
EP12JY18.009
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
consider proposing for public reporting
in future rulemaking.
amozie on DSK3GDR082PROD with PROPOSALS2
V. Proposed Updates to the Home
Health Quality Reporting Program (HH
QRP)
A. Background and Statutory Authority
Section 1895(b)(3)(B)(v)(II) of the
Social Security Act (the Act) requires
that for 2007 and subsequent years, each
HHA submit to the Secretary in a form
and manner, and at a time, specified by
the Secretary, such data that the
Secretary determines are appropriate for
the measurement of health care quality.
To the extent that an HHA does not
submit data with respect to a year in
accordance with this clause, the
Secretary is directed to reduce the HH
market basket percentage increase
applicable to the HHA for such year by
2 percentage points. As provided at
section 1895(b)(3)(B)(vi) of the Act,
depending on the market basket
percentage increase applicable for a
particular year, for 2015 and each
subsequent year (except 2018), the
reduction of that increase by 2
percentage points for failure to comply
with the requirements of the HH QRP
and further reduction of the increase by
the productivity adjustment described
in section 1886(b)(3)(B)(xi)(II) of the Act
may result in the home health market
basket percentage increase being less
than 0.0 percent for a year, and may
result in payment rates under the Home
Health PPS for a year being less than
payment rates for the preceding year.
For more information on the policies
we have adopted for the HH QRP, we
refer readers to the CY 2007 HH PPS
final rule (71 FR 65888 through 65891),
the CY 2008 HH PPS final rule (72 FR
49861 through 49864), the CY 2009 HH
PPS update notice (73 FR 65356), the
CY 2010 HH PPS final rule (74 FR 58096
through 58098), the CY 2011 HH PPS
final rule (75 FR 70400 through 70407),
the CY 2012 HH PPS final rule (76 FR
68574), the CY 2013 HH PPS final rule
(77 FR 67092), the CY 2014 HH PPS
final rule (78 FR 72297), the CY 2015
HH PPS final rule (79 FR 66073 through
66074), the CY 2016 HH PPS final rule
(80 FR 68690 through 68695), the CY
2017 HH PPS final rule (81 FR 76752),
and the CY 2018 HH PPS final rule (82
FR 51711 through 51712).
Although we have historically used
the preamble to the HH PPS proposed
and final rules each year to remind
stakeholders of all previously finalized
program requirements, we have
concluded that repeating the same
discussion each year is not necessary for
every requirement, especially if we have
codified it in our regulations.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
Accordingly, the following discussion is
limited as much as possible to a
discussion of our proposals for future
years of the HH QRP, and represents the
approach we intend to use in our
rulemakings for this program going
forward.
B. General Considerations Used for the
Selection of Quality Measures for the
HH QRP
1. Background
For a detailed discussion of the
considerations we historically used for
measure selection for the HH QRP
quality, resource use, and others
measures, we refer readers to the CY
2016 HH PPS final rule (80 FR 68695
through 68696).
2. Accounting for Social Risk Factors in
the HH QRP Program
In the CY 2018 HH PPS final rule (82
FR 51713 through 51714) we discussed
the importance of improving beneficiary
outcomes including reducing health
disparities. We also discussed our
commitment to ensuring that medically
complex patients, as well as those with
social risk factors, receive excellent
care. We discussed how studies show
that social risk factors, such as being
near or below the poverty level as
determined by HHS, belonging to a
racial or ethnic minority group, or living
with a disability, can be associated with
poor health outcomes and how some of
this disparity is related to the quality of
health care.64 Among our core
objectives, we aim to improve health
outcomes, attain health equity for all
beneficiaries, and ensure that complex
patients as well as those with social risk
factors receive excellent care. Within
this context, reports by the Office of the
Assistant Secretary for Planning and
Evaluation (ASPE) and the National
Academy of Medicine have examined
the influence of social risk factors in our
value-based purchasing programs.65 As
we noted in the CY 2018 HH PPS final
rule (82 FR 51713 through 51714),
64 See, for example United States Department of
Health and Human Services. ‘‘Healthy People 2020:
Disparities. 2014.’’ Available at: http://
www.healthypeople.gov/2020/about/foundationhealth-measures/Disparities; or National Academies
of Sciences, Engineering, and Medicine. Accounting
for Social Risk Factors in Medicare Payment:
Identifying Social Risk Factors. Washington, DC:
National Academies of Sciences, Engineering, and
Medicine 2016.
65 Department of Health and Human Services
Office of the Assistant Secretary for Planning and
Evaluation (ASPE), ‘‘Report to Congress: Social Risk
Factors and Performance under Medicare’s ValueBased Purchasing Programs.’’ December 2016.
Available at: https://aspe.hhs.gov/pdf-report/reportcongress-social-risk-factors-and-performanceunder-medicares-value-based-purchasingprograms.
PO 00000
Frm 00101
Fmt 4701
Sfmt 4702
32439
ASPE’s report to Congress, which was
required by the IMPACT Act, found
that, in the context of value based
purchasing programs, dual eligibility
was the most powerful predictor of poor
health care outcomes among those
social risk factors that they examined
and tested. ASPE is continuing to
examine this issue in its second report
required by the IMPACT Act, which is
due to Congress in the fall of 2019. In
addition, as we noted in the FY 2018
IPPS/LTCH PPS final rule (82 FR 38428
through 38429), the National Quality
Forum (NQF) undertook a 2-year trial
period in which certain new measures
and measures undergoing maintenance
review have been assessed to determine
if risk adjustment for social risk factors
is appropriate for these measures.66 The
trial period ended in April 2017 and a
final report is available at: http://
www.qualityforum.org/SES_Trial_
Period.aspx. The trial concluded that
‘‘measures with a conceptual basis for
adjustment generally did not
demonstrate an empirical relationship’’
between social risk factors and the
outcomes measured. This discrepancy
may be explained in part by the
methods used for adjustment and the
limited availability of robust data on
social risk factors. NQF has extended
the socioeconomic status (SES) trial,67
allowing further examination of social
risk factors in outcome measures.
In the CY 2018/FY 2018 proposed
rules for our quality reporting and
value-based purchasing programs, we
solicited feedback on which social risk
factors provide the most valuable
information to stakeholders and the
methodology for illuminating
differences in outcomes rates among
patient groups within a provider that
would also allow for a comparison of
those differences, or disparities, across
providers. Feedback we received across
our quality reporting programs included
encouraging CMS to explore whether
factors could be used to stratify or risk
adjust the measures (beyond dual
eligibility), to consider the full range of
differences in patient backgrounds that
might affect outcomes, to explore risk
adjustment approaches, and to offer
careful consideration of what type of
information display would be most
useful to the public.
We also sought public comment on
confidential reporting and future public
reporting of some of our measures
stratified by patient dual eligibility. In
66 Available at http://www.qualityforum.org/SES_
Trial_Period.aspx.
67 Available at: http://www.qualityforum.org/
WorkArea/
linkit.aspx?LinkIdentifier=id&ItemID=86357.
E:\FR\FM\12JYP2.SGM
12JYP2
32440
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
general, commenters noted that
stratified measures could serve as tools
for hospitals to identify gaps in
outcomes for different groups of
patients, improve the quality of health
care for all patients, and empower
consumers to make informed decisions
about health care. Commenters
encouraged us to stratify measures by
other social risk factors such as age,
income, and educational attainment.
With regard to value-based purchasing
programs, commenters also cautioned
CMS to balance fair and equitable
payment while avoiding payment
penalties that mask health disparities or
discouraging the provision of care to
more medically complex patients.
Commenters also noted that value-based
payment program measure selection,
domain weighting, performance scoring,
and payment methodology must
account for social risk.
As a next step, we are considering
options to improve health disparities
among patient groups within and across
hospitals by increasing the transparency
of disparities as shown by quality
measures. We also are considering how
this work applies to other CMS quality
programs in the future. We refer readers
to the FY 2018 IPPS/LTCH PPS final
rule (82 FR 38403 through 38409) for
more details, where we discuss the
potential stratification of certain
Hospital IQR Program outcome
measures. Furthermore, we continue to
consider options to address equity and
disparities in our value-based
purchasing programs.
We plan to continue working with
ASPE, the public, and other key
stakeholders on this important issue to
identify policy solutions that achieve
the goals of attaining health equity for
all beneficiaries and minimizing
unintended consequences.
C. Proposed Removal Factors for
Previously Adopted HH QRP Measures
As a part of our Meaningful Measures
Initiative, discussed in section I.D.1 of
this proposed rule, we strive to put
patients first, ensuring that they, along
with their clinicians, are empowered to
make decisions about their own
healthcare using data-driven
information that is increasingly aligned
with a parsimonious set of meaningful
quality measures. We began reviewing
the HH QRP measure set in accordance
with the Meaningful Measures Initiative
discussed in section I.D.1 of this
proposed rule, and we are working to
identify how to move the HH QRP
forward in the least burdensome manner
possible, while continuing to prioritize
and incentivize improvement in the
quality of care provided to patients.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
Specifically, we believe the goals of
the HH QRP and the measures used in
the program overlap with the
Meaningful Measures Initiative
priorities, including making care safer,
strengthening person and family
engagement, promoting coordination of
care, promoting effective prevention and
treatment, and making care affordable.
We also evaluated the appropriateness
and completeness of the HH QRP’s
current measure removal factors. In the
CY 2017 HH PPS final rule (81 FR 76754
through 76755), we adopted a process
for retaining, removing, and replacing
previously adopted HH QRP measures.
To be consistent with other established
quality reporting programs, we are
proposing to replace the six criteria
used when considering a quality
measure for removal, finalized in the CY
2017 HH PPS final rule (81 FR 76754
through 76755), with the following
seven measure removal factors, finalized
for the LTCH QRP in the FY 2013 IPPS/
LTCH PPS final rule (77 FR 53614
through 53615), for the SNF QRP in the
FY 2016 SNF PPS final rule (80 FR
46431 through 46432), and for the IRF
QRP in the CY 2013 OPPS/ASC final
rule (77 FR 68502 through 68503), for
use in the HH QRP:
• Factor 1. Measure performance
among HHAs is so high and unvarying
that meaningful distinctions in
improvements in performance can no
longer be made.
• Factor 2. Performance or
improvement on a measure does not
result in better patient outcomes.
• Factor 3. A measure does not align
with current clinical guidelines or
practice.
• Factor 4. A more broadly applicable
measure (across settings, populations, or
conditions) for the particular topic is
available.
• Factor 5. A measure that is more
proximal in time to desired patient
outcomes for the particular topic is
available.
• Factor 6. A measure that is more
strongly associated with desired patient
outcomes for the particular topic is
available.
• Factor 7. Collection or public
reporting of a measure leads to negative
unintended consequences other than
patient harm.
We believe these measure removal
factors are substantively consistent with
the criteria we previously adopted (only
we are changing the terminology to call
them ‘‘factors’’) and appropriate for use
in the HH QRP. However, even if one or
more of the measure removal factors
applies, we might nonetheless choose to
retain the measure for certain specified
reasons. Examples of such instances
PO 00000
Frm 00102
Fmt 4701
Sfmt 4702
could include when a particular
measure addresses a gap in quality that
is so significant that removing the
measure could result in poor quality, or
in the event that a given measure is
statutorily required. Furthermore, we
note that consistent with other quality
reporting programs, we apply these
factors on a case-by-case basis.
We finalized in the CY 2017 HH PPS
final rule (81 FR 76755) that removal of
a HH QRP measure would take place
through notice and comment
rulemaking, unless we determined that
a measure was causing concern for
patient safety. Specifically, in the case
of a HH QRP measure for which there
was a reason to believe that the
continued collection raised possible
safety concerns, we would promptly
remove the measure and publish the
justification for the removal in the
Federal Register during the next
rulemaking cycle. In addition, we would
immediately notify HHAs and the
public through the usual
communication channels, including
listening sessions, memos, email
notification, and Web postings. If we
removed a measure from the HH QRP
under these circumstances but also
collected data on that measure under
different statutory authority for a
different purpose, we would notify
stakeholders that we would also cease
collecting the data under that alternative
statutory authority.
In this proposed rule, we are
proposing to adopt an additional factor
to consider when evaluating potential
measures for removal from the HH QRP
measure set:
• Factor 8. The costs associated with
a measure outweigh the benefit of its
continued use in the program.
As we discussed in section I.D.1 of
this proposed rule, with respect to our
new Meaningful Measures Initiative, we
are engaging in efforts to ensure that the
HH QRP measure set continues to
promote improved health outcomes for
beneficiaries while minimizing the
overall costs associated with the
program. We believe these costs are
multifaceted and include not only the
burden associated with reporting, but
also the costs associated with
implementing and maintaining the
program. We have identified several
different types of costs, including, but
not limited to the following:
• Provider and clinician information
collection burden and burden associated
with the submitting/reporting of quality
measures to CMS.
• The provider and clinician cost
associated with complying with other
HH programmatic requirements.
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
• The provider and clinician cost
associated with participating in
multiple quality programs, and tracking
multiple similar or duplicative
measures within or across those
programs.
• The cost to CMS associated with the
program oversight of the measure,
including measure maintenance and
public display.
• The provider and clinician cost
associated with compliance with other
federal and state regulations (if
applicable).
For example, it may be of limited
benefit to retain or maintain a measure
which our analyses show no longer
meaningfully supports program
objectives (for example, informing
beneficiary choice). It may also be costly
for HHAs to track confidential feedback,
preview reports, and publicly reported
information on a measure where we use
the measure in more than one program.
We may also have to expend resources
to maintain the specifications for the
measure, including the tools needed to
collect, validate, analyze, and publicly
report the measure data.
When these costs outweigh the
evidence supporting the continued use
of a measure in the HH QRP, we believe
it may be appropriate to remove the
measure from the program. Although we
recognize that one of the main goals of
the HH QRP is to improve beneficiary
outcomes by incentivizing health care
providers to focus on specific care
issues and making public data related to
those issues, we also recognize that
those goals can have limited utility
where, for example, the publicly
reported data is of limited use because
it cannot be easily interpreted by
beneficiaries and used to influence their
choice of providers. In these cases,
removing the measure from the HH QRP
may better accommodate the costs of
program administration and compliance
without sacrificing improved health
outcomes and beneficiary choice.
We are proposing that we would
remove measures based on proposed
Factor 8 on a case-by-case basis. For
example, we may decide to retain a
measure that is burdensome for HHAs to
report if we conclude that the benefit to
32441
beneficiaries is so high that it justifies
the reporting burden. Our goal is to
move the HH QRP program forward in
the least burdensome manner possible,
while maintaining a parsimonious set of
meaningful quality measures and
continuing to incentivize improvement
in the quality of care provided to
patients.
We are inviting public comment on
our proposals to replace the six criteria
used when considering a quality
measure for removal with the seven
measure removal factors currently
adopted in the LTCH QRP, IRF QRP,
and SNF QRP. We are also inviting
public comment on our proposal to
adopt new measure removal Factor 8.
The costs associated with a measure
outweigh the benefit of its continued
use in the program.
D. Quality Measures Currently Adopted
for the HH QRP
The HH QRP currently has 31
measures for the CY 2020 program year,
as outlined in Table 54.
TABLE 54—MEASURES CURRENTLY ADOPTED FOR THE CY 2020 HH QRP
Short name
Measure name & data source
OASIS-Based
Ambulation .....................................................
Application of Falls ........................................
Application of Functional Assessment ..........
Bathing ..........................................................
Bed Transferring ............................................
Depression Assessment ................................
Diabetic Foot Care ........................................
DRR ...............................................................
Drug Education ..............................................
Dyspnea ........................................................
Falls Risk .......................................................
Influenza ........................................................
Oral Medications ...........................................
Pain ...............................................................
PPV ...............................................................
Pressure Ulcer/Injury .....................................
Surgical Wounds ...........................................
Timely Care ...................................................
Improvement in Ambulation/Locomotion (NQF #0167).
Application of Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay)
(NQF #0674).
Application of Percent of Long-Term Care Hospital (LTCH) Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631).
Improvement in Bathing (NQF #0174).
Improvement in Bed Transferring (NQF #0175).
Depression Assessment Conducted.
Diabetic Foot Care and Patient/Caregiver Education Implemented during All Episodes of Care
(#0519).
Drug Regimen Review Conducted With Follow-Up for Identified Issues—Post Acute Care (PAC)
HH QRP.
Drug Education on All Medications Provided to Patient/Caregiver during All Episodes of Care.
Improvement in Dyspnea.
Multifactor Fall Risk Assessment Conducted For All Patients Who Can Ambulate (NQF #0537).
Influenza Immunization Received for Current Flu Season (NQF #0522).
Improvement in Management of Oral Medications (NQF #0176).
Improvement in Pain Interfering with Activity (NQF #0177).
Pneumococcal Polysaccharide Vaccine Ever Received.
Percent of Residents or Patients With Pressure Ulcers That Are New or Worsened (Short Stay)
(NQF #0678), removed as of January 1, 2019.
Changes in Skin Integrity Post-Acute Care: Pressure Ulcer/Injury measure, effective January 1,
2019.
Improvement in Status of Surgical Wounds (NQF #0178).
Timely Initiation Of Care (NQF #0526).
amozie on DSK3GDR082PROD with PROPOSALS2
Claims-Based
ACH ...............................................................
DTC ...............................................................
ED Use ..........................................................
ED Use without Readmission .......................
MSPB ............................................................
PPR ...............................................................
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
Acute Care Hospitalization During the First 60 Days of HH (NQF #0171).
Discharge to Community-Post Acute Care (PAC) Home Health (HH) Quality Reporting Program
(QRP).
Emergency Department Use without Hospitalization During the First 60 Days of HH (NQF #0173).
Emergency Department Use without Hospital Readmission During the First 30 Days of HH (NQF
#2505).
Total Estimated Medicare Spending Per Beneficiary (MSPB)—Post Acute Care (PAC) HH QRP.
Potentially Preventable 30-Day Post-Discharge Readmission Measure for HH Quality Reporting
Program.
PO 00000
Frm 00103
Fmt 4701
Sfmt 4702
E:\FR\FM\12JYP2.SGM
12JYP2
32442
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 54—MEASURES CURRENTLY ADOPTED FOR THE CY 2020 HH QRP—Continued
Short name
Measure name & data source
Rehospitalization ...........................................
Rehospitalization During the First 30 Days of HH (NQF #2380).
HHCAHPS-Based
Communication ..............................................
Overall Rating ................................................
Professional Care ..........................................
Team Discussion ...........................................
Willing to Recommend ..................................
E. Proposed Removal of HH QRP
Measures Beginning With the CY 2021
HH QRP
To address the Meaningful Measures
Initiative described in section I.D.1 of
this proposed rule, we are proposing to
remove seven measures from the HH
QRP beginning with the CY 2021 HH
QRP.
1. Proposed Removal of the Depression
Assessment Conducted Measure
We are proposing to remove the
Depression Assessment Conducted
Measure from the HH QRP beginning
with the CY 2021 HH QRP under our
proposed Factor 1. Measure
performance among HHAs is so high
and unvarying that meaningful
distinctions in improvements in
performance can no longer be made.
In the CY 2010 HH PPS final rule (74
FR 58096 through 58098), we adopted
the Depression Assessment Conducted
Measure beginning with the CY 2010
HH QRP. Depression in the elderly is
associated with disability, impaired
well-being, service utilization,68 and
mortality.69 This process measure
reports the percentage of HH episodes in
which patients were screened for
depression (using a standardized
depression screening tool) at start of
care/resumption of care (SOC/ROC).
The measure is calculated solely using
the OASIS Item M1730, Depression
Screening.70 Item M1730 is additionally
used at SOC/ROC as a risk adjuster in
the calculation of several other OASIS-
amozie on DSK3GDR082PROD with PROPOSALS2
68 Beekman
A.T., Deeg D.J., Braam A.W., et al.:
Consequences of major and minor depression in
later life: A study of disability, well-being and
service utilization. Psychological Medicine
27:1397–1409, 1997.
69 Schulz, R., Beach, S.R., Ives, D.G., Martire,
L.M., Ariyo, A.A., & Kop, W.J. (2000). Association
between depression and mortality in older adults—
The Cardiovascular Health Study. Archives of
Internal Medicine, 160(12), 1761–1768.
70 Measure specifications can be found in the
Home Health Process Measures Table on the Home
Health Quality Measures website (https://
www.cms.gov/Medicare/Quality-Initiatives-PatientAssessment-Instruments/HomeHealthQualityInits/
Downloads/Home-Health-Process-Measures-Table_
OASIS-C2_4-11-18.pdf).
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
How well did the home health team communicate with patients.
How do patients rate the overall care from the home health agency.
How often the home health team gave care in a professional way.
Did the home health team discuss medicines, pain, and home safety with patients.
Will patients recommend the home health agency to friends and family.
based outcome measures currently
adopted for the HH QRP.71
In our evaluation of the Depression
Assessment Conducted Measure, we
found that HHA performance is very
high and that meaningful distinctions in
improvements in performance cannot be
made. The mean and median agency
performance scores for this measure in
2017 (96.8 percent and 99.2 percent,
respectively) when compared to the
mean and median agency performance
scores for this measure in 2010 (88.0
percent and 96.6 percent, respectively)
indicate that an overwhelming majority
of patients are screened for depression
in the HH setting. Further, these
performance scores demonstrate the
improvement in measure performance
since its adoption in the HH QRP. In
addition, in 2017 the 75th percentile
measure score (100 percent) and the
90th percentile measure score (100
percent) are statistically
indistinguishable from each other,
meaning that the measure scores do not
meaningfully distinguish scores
between HHAs. Further, the Truncated
Coefficient of Variation (TCV) 72 for this
measure is 0.03, suggesting that it is not
useful to draw distinctions between
individual agency performance scores
for this measure.
For these reasons, we are proposing to
remove the Depression Assessment
Conducted Measure from the HH QRP
beginning with the CY 2021 HH QRP
under our proposed Factor 1. Measure
71 The OASIS-based HH QRP outcome measures
that use OASIS Item M1730 as a risk adjuster in the
calculation of the measure are: Improvement in
Bathing (NQF #0174), Improvement in Bed
Transferring (NQF #0175), Improvement in
Ambulation/Locomotion (NQF #0167),
Improvement in Dyspnea, Improvement in Pain
Interfering with Activity (NQF #0177),
Improvement in Management of Oral Medications
(NQF #0176), and Improvement in Status of
Surgical Wounds (NQF #0178).
72 The truncated coefficient of variation (TCV) is
the ratio of the standard deviation to the mean of
the distribution of all scores, excluding the 5
percent most extreme scores. A small TCV (≤ 0.1)
indicates that the distribution of individual scores
is clustered tightly around the mean value,
suggesting that it is not useful to draw distinctions
between individual performance scores.
PO 00000
Frm 00104
Fmt 4701
Sfmt 4702
performance among HHAs is so high
and unvarying that meaningful
distinctions in improvements in
performance can no longer be made.
If finalized as proposed, HHAs would
no longer be required to submit OASIS
Item M1730, Depression Screening at
SOC/ROC for the purposes of this
measure beginning January 1, 2020.
HHAs would however continue to
submit data on M1730 at the time point
of SOC/ROC as a risk adjuster for
several other OASIS-based outcome
measures currently adopted for the HH
QRP.73 If finalized as proposed, data for
this measure would be publicly reported
on HH Compare until January 2021.
We are inviting public comment on
this proposal.
2. Proposed Removal of the Diabetic
Foot Care and Patient/Caregiver
Education Implemented During All
Episodes of Care Measure
We are proposing to remove the
Diabetic Foot Care and Patient/Caregiver
Education Implemented during All
Episodes of Care Measure from the HH
QRP beginning with the CY 2021 HH
QRP under our proposed Factor 1.
Measure performance among HHAs is so
high and unvarying that meaningful
distinctions in improvements in
performance can no longer be made.
In the CY 2010 HH PPS final rule (74
FR 58096 through 58098), we adopted
the Diabetic Foot Care and Patient/
Caregiver Education Implemented
during All Episodes of Care Measure
beginning with the CY 2010 HH QRP.
This process measure reports the
percentage of HH quality episodes in
which diabetic foot care and patient/
caregiver education were included in
the physician-ordered plan of care and
73 The OASIS-based HH QRP outcome measures
that use OASIS Item M1730 as a risk adjuster in the
calculation of the measure are: Improvement in
Bathing (NQF #0174), Improvement in Bed
Transferring (NQF #0175), Improvement in
Ambulation/Locomotion (NQF #0167),
Improvement in Dyspnea, Improvement in Pain
Interfering with Activity (NQF #0177),
Improvement in Management of Oral Medications
(NQF #0176), and Improvement in Status of
Surgical Wounds (NQF #0178).
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
implemented (at the time of or at any
time since the most recent SOC/ROC
assessment). The measure numerator is
calculated using OASIS Item M2401
row a, Intervention Synopsis: Diabetic
foot care.74
In our evaluation of the Diabetic Foot
Care and Patient/Caregiver Education
Implemented during All Episodes of
Care Measure, we found that HHA
performance is very high and that
meaningful distinctions in
improvements in performance cannot be
made. The mean and median agency
performance scores for this measure in
2017 (97.0 percent and 99.2 percent,
respectively) when compared to the
mean and median agency performance
score for this measure in 2010 (86.2
percent and 91.7 percent, respectively),
indicate that an overwhelming majority
of HH episodes for patients with
diabetes included education on foot
care. Further, these scores demonstrate
the improvement in measure
performance since the Diabetic Foot
Care and Patient/Caregiver Education
Implemented during All Episodes of
Care Measure’s adoption in the HH
QRP. In addition, in 2017 the 75th
percentile measure score (100 percent)
and the 90th percentile score (100
percent) are statistically
indistinguishable from each other,
meaning that the measure scores do not
meaningfully distinguish between
HHAs. Further, the TCV for this
measure is 0.03, suggesting that it is not
useful to draw distinctions between
individual agency performance scores
for this measure.
For these reasons, we are proposing to
remove the Diabetic Foot Care and
Patient/Caregiver Education
Implemented during All Episodes of
Care Measure from the HH QRP
beginning with CY 2021 HH QRP under
our proposed Factor 1. Measure
performance among HHAs is so high
and unvarying that meaningful
distinctions in improvements in
performance can no longer be made.
If finalized as proposed, HHAs would
no longer be required to submit OASIS
Item M2401 row a, Intervention
Synopsis: Diabetic foot care at the time
point of Transfer to an Inpatient Facility
(TOC) and Discharge from Agency—Not
to an Inpatient Facility (Discharge) for
the purposes of the HH QRP beginning
January 1, 2020. HHAs may enter an
equal sign (=) for M2401, row a, at the
74 Measure specifications can be found in the
Home Health Process Measures Table on the Home
Health Quality Measures website (https://
www.cms.gov/Medicare/Quality-Initiatives-PatientAssessment-Instruments/HomeHealthQualityInits/
Downloads/Home-Health-Process-Measures-Table_
OASIS-C2_4-11-18.pdf).
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
time point of TOC and Discharge on or
after January 1, 2020. If finalized as
proposed, data for this measure would
be publicly reported on HH Compare
until January 2021.
We are inviting public comment on
this proposal.
3. Proposed Removal of the Multifactor
Fall Risk Assessment Conducted for All
Patients Who Can Ambulate (NQF
#0537) Measure
We are proposing to remove the
Multifactor Fall Risk Assessment
Conducted for All Patients Who Can
Ambulate (NQF #0537) Measure from
the HH QRP beginning with the CY
2021 HH QRP, under our proposed
Factor 1. Measure performance among
HHAs is so high and unvarying that
meaningful distinctions in
improvements in performance can no
longer be made.
In CY 2010 HH PPS final rule (74 FR
58096 through 58098), we adopted the
Multifactor Fall Risk Assessment
Conducted for All Patients Who Can
Ambulate (NQF #0537) Measure 75
beginning with the CY 2010 HH QRP.
This process measure reports the
percentage of HH quality episodes in
which patients had a multifactor fall
risk assessment at SOC/ROC. The
measure is calculated using OASIS Item
M1910, Falls Risk Assessment.76
In our evaluation of the Multifactor
Fall Risk Assessment Conducted for All
Patients Who Can Ambulate (NQF
#0537) Measure, we found that HHA
performance is very high and that
meaningful distinctions in
improvements in performance cannot be
made. The mean and median agency
performance scores for this measure in
2017 (99.3 percent and 100.0 percent,
respectively) when compared to the
mean and median agency performance
score for this measure in 2010 (94.8
percent and 98.9 percent, respectively),
indicate that an overwhelming majority
of patients in an HHA have had a
multifactor fall risk assessment at SOC/
ROC and demonstrates the improvement
in measure performance since its
adoption. In addition, in 2017 the 75th
percentile measure score (100 percent)
and the 90th percentile measure score
(100 percent) are statistically
indistinguishable from each other,
75 At the time, this measure was adopted as ‘‘Falls
risk assessment for patients 65 and older.’’ The
name of this measure was updated in the CY 2018
HH PPS final rule (82 FR 51717).
76 Measure specifications can be found in the
Home Health Process Measures Table on the Home
Health Quality Measures website (https://
www.cms.gov/Medicare/Quality-Initiatives-PatientAssessment-Instruments/HomeHealthQualityInits/
Downloads/Home-Health-Process-Measures-Table_
OASIS-C2_4-11-18.pdf).
PO 00000
Frm 00105
Fmt 4701
Sfmt 4702
32443
meaning that the measure scores do not
meaningfully distinguish between
HHAs. Further, the TCV for this
measure is 0.01, suggesting that it is not
useful to draw distinctions between
individual agency performance scores
for this measure.
For these reasons, we are proposing to
remove the Multifactor Fall Risk
Assessment Conducted for All Patients
Who Can Ambulate (NQF #0537)
Measure from the HH QRP beginning
with the CY 2021 HH QRP, under our
proposed Factor 1. Measure
performance among HHAs is so high
and unvarying that meaningful
distinctions in improvements in
performance can no longer be made.
If finalized as proposed, HHAs would
no longer be required to submit OASIS
Item M1910, Falls Risk Assessment at
SOC/ROC beginning January 1, 2020.
HHAs may enter an equal sign (=) for
M1910 at the time point of SOC and
ROC beginning January 1, 2020. If
finalized as proposed, data for this
measure would be publicly reported on
HH Compare until January 2021.
We are inviting public comment on
this proposal.
4. Proposed Removal of the
Pneumococcal Polysaccharide Vaccine
Ever Received Measure
We are proposing to remove the
Pneumococcal Polysaccharide Vaccine
Ever Received Measure from the HH
QRP beginning with the CY 2021 HH
QRP, under our proposed Factor 3. A
measure does not align with current
clinical guidelines or practice.
In the CY 2010 HH PPS final rule (74
FR 58096 through 58098), we adopted
the Pneumococcal Polysaccharide
Vaccine Ever Received Measure
beginning with CY 2010 HH QRP. This
process measure reports the percentage
of HH quality episodes during which
patients were determined to have ever
received the Pneumococcal
Polysaccharide Vaccine. The measure is
calculated using OASIS Items M1051,
Pneumococcal Vaccine and M1056,
Reason Pneumococcal Vaccine not
received.77
At the time that this measure was
adopted in the HH QRP, the Advisory
Committee on Immunization Practices
(ACIP),78 which sets current clinical
77 Measure specifications can be found in the
Home Health Process Measures Table on the Home
Health Quality Measures website (https://
www.cms.gov/Medicare/Quality-Initiatives-PatientAssessment-Instruments/HomeHealthQualityInits/
Downloads/Home-Health-Process-Measures-Table_
OASIS-C2_4-11-18.pdf).
78 The Advisory Committee on Immunization
Practices was established under section 222 of the
Public Health Service Act (42 U.S.C. 2l7a), as
E:\FR\FM\12JYP2.SGM
Continued
12JYP2
32444
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
guidelines, recommended use of a single
dose of the 23-valent pneumococcal
polysaccharide vaccine (PPSV23) among
all adults aged 65 years and older and
those adults aged 19 to 64 years with
underlying medical conditions that put
them at greater risk for serious
pneumococcal infection.79
Since this measure was added to the
HH QRP, the ACIP has updated its
pneumococcal vaccination
recommendations.80 Two pneumococcal
vaccines are currently licensed for use
in the United States: the 13-valent
pneumococcal conjugate vaccine
(PCV13) and the 23-valent
pneumococcal vaccine (PPSV23). The
ACIP currently recommends that both
PCV13 and PPSV23 be given to all
immunocompetent adults aged ≥ 65
years. The recommended intervals for
sequential administration of PCV13 and
PPSV23 depend on several patient
factors including: The current age of the
adult, whether the adult had previously
received PPSV23, and the age of the
adult at the time of prior PPSV23
vaccination (if applicable).
The specifications for the
Pneumococcal Polysaccharide Vaccine
Ever Received Measure do not fully
reflect the current ACIP guidelines.
Therefore, we believe that the
Pneumococcal Polysaccharide Vaccine
Ever Received Measure no longer aligns
with the current clinical guidelines or
practice. For this reason, we are
proposing to remove the Pneumococcal
Polysaccharide Vaccine Ever Received
Measure from the HH QRP beginning
with the CY 2021 HH QRP under our
proposed Factor 3. A measure does not
align with current clinical guidelines or
practice.
If finalized as proposed, HHAs would
no longer be required to submit OASIS
Items M1051, Pneumococcal Vaccine
and M1056, Reason Pneumococcal
Vaccine not received at the time point
amended, to assist states and their political
subdivisions in the prevention and control of
communicable diseases; to advise the states on
matters relating to the preservation and
improvement of the public’s health; and to make
grants to states and, in consultation with the state
health authorities, to agencies and political
subdivisions of states to assist in meeting the costs
of communicable disease control programs. (Charter
of the Advisory Committee on Immunization
Practices, filed April 1, 2018. https://www.cdc.gov/
vaccines/acip/committee/ACIP-Charter-2018.pdf.)
79 Prevention of Pneumococcal Disease:
Recommendations of the Advisory Committee on
Immunization Practices (ACIP), MMWR 1997;46:1–
24.
80 Tomczyk S., Bennett N.M., Stoecker C., et al.
Use of 13-valent pneumococcal conjugate vaccine
and 23-valent pneumococcal polysaccharide
vaccine among adults aged ≥65 years:
recommendations of the Advisory Committee on
Immunization Practices (ACIP). MMWR 2014;63:
822–5.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
of TOC and Discharge for the purposes
of the HH QRP beginning January 1,
2020. HHAs may enter an equal sign (=)
for Items M1051 and M1056 at the time
point of TOC and Discharge on or after
January 1, 2020. If finalized as
proposed, data for this measure would
be publicly reported on HH Compare
until January 2021.
We are inviting public comment on
this proposal.
5. Proposed Removal of the
Improvement in the Status of Surgical
Wounds Measure
We are proposing to remove the
Improvement in the Status of Surgical
Wounds Measure from the HH QRP
beginning with the CY 2021 HH QRP
under our proposed Factor 4. A more
broadly applicable measure (across
settings, populations, or conditions) for
the particular topic is available.
In the CY 2008 HH PPS final rule (72
FR 49861 through 49863), we adopted
the Improvement in the Status of
Surgical Wounds Measure for the HH
QRP beginning with the CY 2008
program year. This risk-adjusted
outcome measure reports the percentage
of HH episodes of care during which the
patient demonstrates an improvement in
the condition of skin integrity related to
the surgical wounds. This measure is
solely calculated using OASIS Items
M1340, Does this patient have a
Surgical Wound? and M1342, Status of
Most Problematic Surgical Wound that
is Observable.81 Items M1340 and
M1342 are also used at the time points
of SOC/ROC as risk adjusters in the
calculation of several other OASISbased outcome measures currently
adopted for the HH QRP 82 Additionally,
Items M1340 and M1342 are used at the
time point of Discharge for the
Potentially Avoidable Events measure
Discharged to the Community Needing
Wound Care or Medication Assistance
that is used by HH surveyors during the
survey process.83
81 Measure specifications can be found in the
Home Health Outcomes Measures Table on the
Home Health Quality Measures website (https://
www.cms.gov/Medicare/Quality-Initiatives-PatientAssessment-Instruments/HomeHealthQualityInits/
Downloads/Home-Health-Outcome-MeasuresTable-OASIS-C2_4-11-18.pdf).
82 The OASIS-based HH QRP outcome measures
that use OASIS Items M1340 and M1342 as a risk
adjuster in the calculation of the measure are:
Improvement in Bathing (NQF #0174),
Improvement in Bed Transferring (NQF #0175),
Improvement in Ambulation/Locomotion (NQF
#0167), Improvement in Dyspnea, Improvement in
Pain Interfering with Activity (NQF #0177), and
Improvement in Management of Oral Medications
(NQF #0176).
83 Measure specifications can be found in the
Home Health Potentially Avoidable Events
Measures Table on the Home Health Quality
PO 00000
Frm 00106
Fmt 4701
Sfmt 4702
The Improvement in the Status of
Surgical Wounds Measure is limited in
scope to surgical wounds incurred by
surgical patients and excludes HH
episodes of care where the patient, at
SOC/ROC, did not have any surgical
wounds or had only a surgical wound
that was unobservable or fully
epithelialized. As a result, the majority
of HHAs are not able to report data on
the measure and the measure is limited
in its ability to compare how well HHAs
address skin integrity. For example, in
2016, only 13 percent of HH patients
had a surgical wound at the beginning
of their HH episode and only 36.6
percent of HHAs were able to report
data on the measure with respect to that
year.
In contrast, the Percent of Residents
or Patients with Pressure Ulcers That
Are New or Worsened (Short Stay)
Measure (NQF #0678) 84 and its
replacement measure, Changes in Skin
Integrity Post-Acute Care: Pressure
Ulcer/Injury Measure more broadly
assess the quality of care furnished by
HHAs with respect to skin integrity.
These measures encourage clinicians to
assess skin integrity in the prevention of
pressure ulcers, as well as to monitor
and promote healing in all HH patients,
not just those with surgical wounds.
Therefore, we are proposing to
remove the Improvement in the Status
of Surgical Wounds Measure from the
HH QRP beginning with the CY 2021
HH QRP under our proposed Factor 4.
A more broadly applicable measure
(across settings, populations, or
conditions) for the particular topic is
available.
If finalized as proposed, HHAs would
no longer be required to submit OASIS
Items M1340, Does this patient have a
Surgical Wound? and M1342, Status of
Most Problematic Surgical Wound that
is Observable at the time points of SOC/
ROC and Discharge for the purposes of
this measure beginning with January 1,
2020 episodes of care. However, HHAs
would still be required to submit data
on Items M1340 and M1342 at the time
point of SOC/ROC as risk adjusters for
several other OASIS-based outcome
measures currently adopted for the HH
QRP,85 and also at the time point of
Measures website (https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-Assessment-Instruments/
HomeHealthQualityInits/Downloads/Home-HealthPAE-Measures-Table-OASIS-C2_4-11-18.pdf).
84 To be replaced with a modified version of that
measure, Changes in Skin Integrity Post-Acute Care:
Pressure Ulcer/Injury, beginning with the CY 2020
HH QRP.
85 The OASIS-based HH QRP outcome measures
that use OASIS Items M1340 and M1342 as a risk
adjuster in the calculation of the measure are:
Improvement in Bathing (NQF #0174),
Improvement in Bed Transferring (NQF #0175),
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
Discharge for the Potentially Avoidable
Events measure Discharged to the
Community Needing Wound Care or
Medication Assistance 86 that is used by
HH surveyors during the survey process.
If finalized as proposed, data on this
measure would be publicly reported on
HH Compare until January 2021.
We are inviting public comment on
this proposal.
amozie on DSK3GDR082PROD with PROPOSALS2
6. Proposed Removal of the Emergency
Department Use Without Hospital
Readmission During the First 30 Days of
HH (NQF #2505) Measure
We are proposing to remove the
Emergency Department (ED) Use
without Hospital Readmission during
the First 30 Days of HH (NQF #2505)
Measure from the HH QRP beginning
with the CY 2021 HH QRP, under our
proposed Factor 4. A more broadly
applicable measure (across settings,
populations, or conditions) for the
particular topic is available).
In the CY 2014 HH PPS final rule (78
FR 72298 through 72301), we adopted
the claims-based ED Use without
Hospital Readmission during the first 30
days of HH (NQF #2505) Measure
beginning with CY 2014 HH QRP. The
particular topic for this measure is ED
utilization, as it estimates the riskstandardized rate of ED use without
acute care hospital admission during the
30 days following the start of the HH
stay for patients with an acute inpatient
hospitalization in the 5 days before the
start of their HH stay. The ED Use
without Hospital Readmission during
the First 30 Days of HH (NQF #2505)
Measure is limited to Medicare FFS
patients with a prior, proximal inpatient
stay. Recent analyses from 2016 and
2017 show that this measure annually
captured approximately 2.5 million
(25.1 percent in 2016 and 25.1 percent
in 2017) of Medicare FFS HH stays and
was reportable for less than two-thirds
of the HHAs (62.1 percent in 2016 and
62.6 percent in 2017).
The ED Use without Hospitalization
During the First 60 Days of HH (NQF
#0173) Measure also addresses the topic
of ED utilization during a HH stay. This
measure reports the percentage of
Medicare FFS HH stays in which
patients used the ED but were not
Improvement in Ambulation/Locomotion (NQF
#0167), Improvement in Dyspnea, Improvement in
Pain Interfering with Activity (NQF #0177), and
Improvement in Management of Oral Medications
(NQF #0176).
86 Measure specifications can be found in the
Home Health Potentially Avoidable Events
Measures Table on the Home Health Quality
Measures website (https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-Assessment-Instruments/
HomeHealthQualityInits/Downloads/Home-HealthPAE-Measures-Table-OASIS-C2_4-11-18.pdf).
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
admitted to the hospital during the 60
days following the start of the HH stay.
The ED Use without Hospitalization
during the First 60 days of HH (NQF
#0173) Measure includes Medicare FFS
patients irrespective of whether or not
they had an acute inpatient
hospitalization in the five days prior to
the start of the HH stay and spans the
first 60 days of a HH episode. Recent
analyses using 2016 and 2017 data show
this measure annually captures
approximately 8.3 million stays (81.9
percent in 2016 and 81.8 percent in
2017) and is reportable by a greater
number of HHAs (88.8 percent in 2016
and 88.1 percent in 2017) than the ED
Use without Hospital Readmission
During the First 30 Days of HH (NQF
#2505) Measure.
The ED Use without Hospital
Readmission During the First 30 Days of
HH (NQF #2505) Measure addresses
outcomes of Medicare FFS patients for
a 30-day interval after the start of their
HH care, regardless of the length of their
HH stay. The more broadly applicable
ED Use without Hospitalization during
the First 60 days of HH (NQF #0173)
Measure addresses these same outcomes
for a greater number of Medicare FFS
patients during the first 60 days of a HH
stay and includes the 30-day interval of
the ED Use without Hospital
Readmission During the First 30 Days of
HH (NQF #2505) Measure. The measure
specifications for both measures are
otherwise harmonized along several
measure dimensions, including data
source, population, denominator
exclusions, numerator, and risk
adjustment methodology. As a result,
removing the ED Use without Hospital
Readmission During the First 30 Days of
HH (NQF #2505) Measure in favor of the
ED Use without Hospitalization during
the First 60 days of HH (NQF #173)
Measure will not result in a loss of the
ability to measure the topic of ED
utilization for HH patients.
For these reasons, we are proposing to
remove the ED Use without Hospital
Readmission During the First 30 Days of
HH (NQF #2505) Measure from the HH
QRP beginning with the CY 2021 HH
QRP under our proposed Factor 4. A
more broadly applicable measure
(across settings, populations, or
conditions) for the particular topic is
available. If finalized as proposed, data
for this measure would be reported on
HH Compare until January 2020.
We are inviting public comment on
this proposal.
PO 00000
Frm 00107
Fmt 4701
Sfmt 4702
32445
7. Proposed Removal of the
Rehospitalization During the First 30
Days of HH (NQF #2380) Measure
We are proposing to remove the
Rehospitalization during the First 30
Days of HH (NQF #2380) Measure from
the HH QRP beginning with the CY
2021 HH QRP, under our proposed
Factor 4. A more broadly applicable
measure (across settings, populations, or
conditions) for the particular topic is
available.
In the CY 2014 HH PPS final rule (78
FR 72297 through 72301), we adopted
the claims-based Rehospitalization
during the first 30 Days of HH Measure
beginning with the CY 2014 HH QRP.
The measure was NQF-endorsed (NQF
#2380) in December 2014. The
Rehospitalization during the first 30
Days of HH (NQF #2380) Measure
addresses the particular topic of acute
care hospital utilization during a HH
stay. This measure estimates the riskstandardized rate of unplanned, allcause hospital readmissions for patients
who had an acute inpatient
hospitalization in the 5 days before the
start of their HH stay and were admitted
to an acute care hospital during the 30
days following the start of the HH stay
(78 FR 72297 through 72301). The
Rehospitalization During the First 30
Days of HH (NQF #2380) Measure only
includes Medicare FFS patients. Recent
analyses from 2016 and 2017 show that
this measure annually captured
approximately 2.5 million (25.1 percent
in 2016 and 25.1 percent in 2017) of
Medicare FFS HH stays and was
reportable for less than two-thirds of the
HHAs (62.1 percent in 2016 and 62.6
percent in 2017).
In the CY 2013 HH PPS final rule (77
FR 67093 through 67094), we finalized
the claims-based Acute Care
Hospitalization Measure. The measure’s
title was later updated to Acute Care
Hospitalization During the First 60 Days
of HH (NQF #0171) to improve clarity.87
The Acute Care Hospitalization During
the First 60 Days of HH (NQF #0171)
Measure also addresses the topic of
acute care hospital utilization during a
HH stay. This measure reports the
percentage of HH stays in which
Medicare FFS patients were admitted to
an acute care hospital during the 60
days following the start of the HH stay.
The Acute Care Hospitalization during
the First 60 Days of HH (NQF #0171)
Measure includes Medicare FFS
patients irrespective of whether or not
87 All-Cause Admissions and Readmissions 2015–
2017 Technical Report, National Quality Forum,
Washington DC, 2017. (http://
www.qualityforum.org/WorkArea/linkit.aspx?
LinkIdentifier=id&ItemID=85033) page 20.
E:\FR\FM\12JYP2.SGM
12JYP2
32446
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
they had an acute inpatient
hospitalization in the five days prior to
the start of the HH stay and spans the
first 60 days of a HH episode. Recent
analyses using 2016 and 2017 data show
this measure annually captures
approximately 8.3 million stays (81.9
percent in 2016 and 81.8 percent in
2017) and is reportable by a greater
number of HHAs (88.8 percent in 2016
and 88.1 percent in 2017) than the
Rehospitalization during the First 30
Days of HH (NQF #2380) Measure.
The Rehospitalization during the First
30 Days of HH (NQF #2380) Measure
addresses outcomes of Medicare FFS
patients for a 30-day interval after the
start of their HH care, regardless of the
length of their HH stay. In contrast, the
Acute Care Hospitalization During the
First 60 Days of HH (NQF #0171)
Measure is broader because it addresses
these same outcomes for a greater
number of Medicare FFS patients during
the first 60 Days of a HH stay, which
includes the 30-day interval of the
Rehospitalization during the First 30
Days of HH (NQF #2380) Measure. The
measure specifications for both
measures are otherwise harmonized
along several measure dimensions,
including data source, population,
denominator exclusions, numerator, and
risk adjustment methodology. As a
result, removing the Rehospitalization
during the First 30 Days of HH (NQF
#2380) Measure in favor of the Acute
Care Hospitalization during the First 60
Days of HH (NQF #0171) Measure will
not result in a loss of the ability to
measure the topic of acute care hospital
utilization across the HH setting.
For these reasons, we are proposing to
remove the Rehospitalization during the
First 30 Days of HH (NQF #2380)
Measure from the HH QRP beginning
with the CY 2021 HH QRP under our
proposed Factor 4. A more broadly
applicable measure (across settings,
populations, or conditions) for
particular topic is available. If finalized
as proposed, data for this measure
would be publicly reported on HH
Compare January 2020.
We are inviting public comment on
this proposal.
amozie on DSK3GDR082PROD with PROPOSALS2
F. IMPACT Act Implementation Update
In the CY 2018 HH PPS final rule (82
FR 51731), we stated that we intended
to specify two measures that would
satisfy the domain of accurately
communicating the existence and
provision of the transfer of health
information and care preferences under
section 1899B(c)(1)(E) of the Act no later
than January 1, 2019 and intend to
propose to adopt them for the CY 2021
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
HH QRP, with data collection beginning
on or about January 1, 2020.
As a result of the input provided
during a public comment period
between November 10, 2016 and
December 11, 2016, input provided by
a technical expert panel (TEP) convened
by our contractor, and pilot measure
testing conducted in 2017, we are
engaging in continued development
work on these two measures, including
supplementary measure testing and
providing the public with an
opportunity for comment in 2018.
Further, we reconvened a TEP for these
measures in April 2018. We now intend
to specify the measures under section
1899B(c)(1)(E) of the Act no later than
January 1, 2020, and intend to propose
to adopt the measures beginning with
the CY 2022 HH QRP, with data
collection at the time point of SOC, ROC
and Discharge beginning with January 1,
2021. For more information on the pilot
testing, we refer readers to: https://
www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/Post-Acute-Care-QualityInitiatives/IMPACT-Act-of-2014/
IMPACT-Act-Downloads-andVideos.html.
G. Form, Manner, and Timing of OASIS
Data Submission
Our home health regulations, codified
at § 484.250(a), require HHAs to submit
OASIS assessments and Home Health
Care Consumer Assessment of
Healthcare Providers and Systems
Survey® (HHCAHPS) data to meet the
quality reporting requirements of
section 1895(b)(3)(B)(v) of the Act. We
are proposing to revise § 484.250(a) to
clarify that not all OASIS data described
in § 484.55(b) and (d) are needed for
purposes of complying with the
requirements of the HH QRP. OASIS
data items may be submitted for other
established purposes unrelated to the
HH QRP, including payment, survey,
the HH VBP Model, or care planning.
Any OASIS data that are not submitted
for the purposes of the HH QRP are not
used for purposes of HH QRP
compliance.
We are inviting public comment on
our proposal to revise our regulations at
§ 484.250(a) to clarify that not all OASIS
data described in § 484.55(b) and (d) are
needed for purposes of complying with
the requirements of the HH QRP.
H. Proposed Policies Regarding Public
Display for the HH QRP
Section 1899B(g) of the Act requires
that data and information of PAC
provider performance on quality
measures and resource use and other
measures be made publicly available
PO 00000
Frm 00108
Fmt 4701
Sfmt 4702
beginning not later than 2 years after the
applicable specified ‘application date’.
In the CY 2018 HH PPS final rule (82
FR 51740 through 51741), we finalized
that we would publicly display the
Medicare Spending Per Beneficiary
(MSPB)-PAC HH QRP beginning in CY
2019 based on one year of claims data
on discharges from CY 2017.
In this proposed rule, we are
proposing to increase the number of
years of data used to calculate the
MSPB–PAC HH QRP for purposes of
display from 1 year to 2 years. Under
this proposal, data on this measure
would be publicly reported in CY 2019,
or as soon thereafter as operationally
feasible, based on discharges from CY
2016 and CY 2017. Increasing the
measure calculation and public display
periods from 1 to 2 years of data
increases the number of HHAs with
enough data adequate for public
reporting for the MSPB–PAC HH QRP
measure from 90.7 percent (based on
August 1st, 2014—July 31st, 2015
Medicare FFS claims data) to 94.9
percent (based on August 1st, 2014—
July 31st, 2016 Medicare FFS claims
data). Increasing measure public display
periods to 2 years also aligns with the
public display periods of these
measures in the IRF QRP, LTCH QRP
and SNF QRP.
We invite public comment on our
proposal to increase the number of years
of data used to calculate the MSPB–PAC
HH QRP for purposes of display from 1
year to 2 years.
I. Home Health Care Consumer
Assessment of Healthcare Providers and
Systems® (HHCAHPS)
We are not proposing changes to the
Home Health Care Consumer
Assessment of Healthcare Providers and
Systems® (HHCAHPS) Survey
requirements for CY 2019. Therefore,
HHCAHPS Survey requirements are as
codified in § 484.250 and the HHCAHPS
survey vendors’ data submission
deadlines are as posted on HHCAHPS
website at https://homehealthcahps.org.
VI. Medicare Coverage of Home
Infusion Therapy Services
In this section of the rule, we discuss
the new home infusion therapy benefit
that was established in section 5012 of
the 21st Century Cures Act. This benefit
covers the nursing, patient training and
education, and monitoring services
associated with administering infusion
drugs in a patient’s home. This
proposed rule would establish health
and safety standards for home infusion
therapy and consistency in coverage for
home infusion therapy services. Section
1861(iii)(3)(D)(III) of the Act, as added
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
by section 5012(b) of the 21st Cures Act,
requires that a qualified home infusion
therapy supplier be accredited by an
accrediting organization (AO)
designated by the Secretary in
accordance with section 1834(u)(5) of
the Act. Section 1834(u)(5)(A) of the Act
identifies factors for designating AOs
and modifying the list of designated
AOs. Section 1834(u)(5)(B) of the Act
requires the Secretary to designate AOs
to accredit home infusion therapy
suppliers furnishing home infusion
therapy not later than January 1, 2021.
In addition, this proposed rule
establishes regulations for the approval
and oversight of accrediting
organizations that provide accreditation
to home infusion therapy suppliers.
This rule also provides information on
temporary transitional payments for
home infusion therapy services for CYs
2019 and 2020, as mandated by section
50401 of the BBA of 2018, proposes a
regulatory definition of ‘‘Infusion Drug
Administration Calendar Day’’, and
solicits comments regarding payment
for home infusion therapy services for
CY 2021 and subsequent years as
required by section 5012(d) of the 21st
Century Cures Act.
amozie on DSK3GDR082PROD with PROPOSALS2
A. General Background
1. Overview
Infusion drugs and administration
services can be provided in multiple
health care settings, including inpatient
hospitals, skilled nursing facilities
(SNFs), hospital outpatient departments
(HOPDs), physician offices, and in the
home. Traditional Fee-for-Service (FFS)
Medicare provides coverage for infusion
drugs, equipment, supplies, and
administration services. However,
Medicare coverage requirements and
payment vary for each of these settings.
Infusion drugs, equipment, supplies,
and administration are all covered by
Medicare in the inpatient hospital,
SNFs, HOPDs, and physician’s offices.
Generally, Medicare payment under Part
A for the drugs, equipment, supplies,
and services are bundled, meaning a
single payment is made on the basis of
expected costs for clinically-defined
episodes of care. For example, if a
beneficiary is receiving an infusion drug
during an inpatient hospital stay, the
Part A payment for the drug, supplies,
equipment, and drug administration is
included in the diagnosis-related group
(DRG) payment to the hospital under the
Medicare inpatient prospective payment
system. Beneficiaries are liable for the
Medicare inpatient hospital deductible.
Similarly, if a beneficiary is receiving an
infusion drug while in a SNF under a
Part A stay, the payment for the drug,
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
supplies, equipment, and drug
administration are included in the SNF
prospective payment system payment.
After 20 days of SNF care, there is a
daily beneficiary cost-sharing amount
through day 100 when the beneficiary
becomes responsible for all costs for
each day after day 100 of the benefit
period. Under Medicare Part B, certain
items and services are paid separately
while other items and services may be
packaged into a single payment
together. For example, in an HOPD and
in a physician’s office, the drug is paid
separately, generally at the average sales
price (ASP) plus 6 percent. There is also
a separate payment for drug
administration in which the payment
for infusion supplies and equipment is
packaged in the payment for
administration. The separate payment
for infusion drug administration in an
HOPD and in a physician’s office
generally includes a base payment
amount for the first hour and a payment
add-on that is a different amount for
each additional hour of administration.
The beneficiary is responsible for the 20
percent coinsurance under Medicare
Part B. Medicare FFS covers outpatient
infusion drugs under Part B, ‘‘incident
to’’ a physician’s services, provided the
drugs are not usually self- administered
by the patient. Drugs that are ‘‘not
usually self-administered,’’ are defined
in our manual according to how the
Medicare population as a whole uses
the drug, not how an individual patient
or physician may choose to use a
particular drug. For the purpose of this
exclusion, the term ‘‘usually’’ means
more than 50 percent of the time for all
Medicare beneficiaries who use the
drug. The term ‘‘by the patient’’ means
Medicare beneficiaries as a collective
whole. Therefore, if a drug is selfadministered by more than 50 percent of
Medicare beneficiaries, the drug is
excluded from Part B coverage. This
determination is made on a drug-bydrug basis, not on a beneficiary-bybeneficiary basis.88 The MACs update
Self-Administered Drug (SAD)
exclusion lists on a quarterly basis.89
Home infusion therapy involves the
intravenous or subcutaneous
administration of drugs or biologicals to
an individual at home. Certain drugs
can be infused in the home, but the
nature of the home setting presents
different challenges than the settings
previously described. The components
needed to perform home infusion
88 https://www.cms.gov/Regulations-andGuidance/Guidance/Manuals/Downloads/
bp102c15.pdf.
89 www.cms.gov/medicare-coverage-database/
reports/sad-exclusion-listreport.aspx?bc=AQAAAAAAAAAAAA%3D%3D.
PO 00000
Frm 00109
Fmt 4701
Sfmt 4702
32447
include the drug (for example,
antibiotics, immune globulin),
equipment (for example, a pump), and
supplies (for example, tubing and
catheters). Likewise, nursing services
are necessary to train and educate the
patient and caregivers on the safe
administration of infusion drugs in the
home. Visiting nurses often play a large
role in home infusion. Nurses typically
train the patient or caregiver to selfadminister the drug, educate on side
effects and goals of therapy, and visit
periodically to provide catheter and site
care. Depending on patient acuity or the
complexity of the drug administration,
certain infusions may require more
nursing time, especially those that
require special handling or pre-or postinfusion protocols. The home infusion
process typically requires coordination
among multiple entities, including
patients, physicians, hospital discharge
planners, health plans, home infusion
pharmacies, and, if applicable, home
health agencies. With regard to payment
for home infusion therapy under
traditional Medicare, drugs are generally
covered under Part B or Part D. Certain
infusion pumps, supplies (including
home infusion drugs), and nursing are
covered in some circumstances through
the Part B durable medical equipment
(DME) benefit, the Medicare home
health benefit, or some combination of
these benefits.
Medicare Part B covers a limited
number of home infusion drugs through
the DME benefit if: (1) The drug is
necessary for the effective use of an
external or implantable infusion pump
classified as DME and determined to be
reasonable and necessary for
administration of the drug; and (2) the
drug being used with the pump is itself
reasonable and necessary for the
treatment of an illness or injury. Only
certain types of infusion pumps are
covered under the DME benefit. The
Medicare National Coverage
Determinations Manual, chapter 1, part
4, § 280.1 describes the types of infusion
pumps that are covered under the DME
benefit.90 For DME infusion pumps,
Medicare Part B covers the infusion
drugs and other supplies and services
necessary for the effective use of the
pump, but does not explicitly require or
pay separately for any associated home
infusion nursing services beyond what
is necessary for teaching the patient
and/or caregiver on how to operate the
equipment in order to administer the
90 https://www.cms.gov/Regulations-andGuidance/Guidance/Manuals/internet-OnlyManuals-IOMs-Items/CMS014961.html.
E:\FR\FM\12JYP2.SGM
12JYP2
32448
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
infusion safely and effectively.91
Through local coverage policies, the
DME Medicare administrative
contractors (MACs) specify the details of
which infusion drugs are covered with
these pumps. Examples of covered Part
B DME infusion drugs include, among
others, certain IV drugs for heart failure
and pulmonary arterial hypertension,
immune globulin for primary immune
deficiency (PID), insulin, antifungals,
antivirals, and chemotherapy, in limited
circumstances.
2. Home Infusion Therapy Legislation
Section 5012 of the 21st Century
Cures Act (Pub. L. 114–255) (Cures Act)
creates a separate Medicare Part B
benefit category under 1861(s)(2)(GG) of
the Act for coverage of home infusion
therapy-associated professional services
for certain drugs and biologicals
administered intravenously, or
subcutaneously through a pump that is
an item of DME, effective January 1,
2021. The infusion pump and supplies
(including home infusion drugs) will
continue to be covered under the DME
benefit. Section 1861(iii)(2) of the Act
defines home infusion therapy to
include the following items and
services: the professional services
(including nursing services), furnished
in accordance with the plan, training
and education (not otherwise included
in the payment for the DME), remote
monitoring, and other monitoring
services for the provision of home
infusion therapy furnished by a
qualified home infusion therapy
supplier in the patient’s home. Section
1861(iii)(3)(B) of the Act defines the
patient’s home to mean a place of
residence used as the home of an
individual as defined for purposes of
section 1861(n) of the Act. As outlined
in section 1861(iii)(1) of the Act, i to be
eligible to receive home infusion
therapy services under the home
infusion therapy benefit, the patient
must be under the care of an applicable
provider, defined in section
1861(iii)(3)(A) of the Act as a physician,
nurse practitioner, or physician’s
assistant, and the patient must be under
a physician-established plan of care that
prescribes the type, amount, and
duration of infusion therapy services
that are to be furnished. The plan of care
must be periodically reviewed by the
physician in coordination with the
furnishing of home infusion drugs (as
defined in section 1861(iii)(3)(C) of the
91 See 42 CFR 424.57(c)(12), which states that the
DME ‘‘supplier must document that it or another
qualified party has at an appropriate time, provided
beneficiaries with necessary information and
instructions on how to use Medicare-covered items
safely and effectively.’’
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
Act). Section 1861(iii)(3)(C) of the Act
defines a ‘‘home infusion drug’’ under
the home infusion therapy benefit as a
drug or biological administered
intravenously, or subcutaneously for an
administration period of 15 minutes or
more, in the patient’s home, through a
pump that is an item of DME as defined
under section 1861(n) of the Act. This
definition does not include insulin
pump systems or any self-administered
drug or biological on a self-administered
drug exclusion list.
Section 1861(iii)(3)(D)(i) of the Act
defines a qualified home infusion
therapy supplier as a pharmacy,
physician, or other provider of services
or supplier licensed by the state in
which supplies or services are provided.
The provision specifies qualified home
infusion therapy suppliers must furnish
infusion therapy to individuals with
acute or chronic conditions requiring
administration of home infusion drugs;
ensure the safe and effective provision
and administration of home infusion
therapy on a 7-day-a-week, 24-hour-aday basis; be accredited by an
organization designated by the
Secretary; and meet other such
requirements as the Secretary deems
appropriate, taking into account the
standards of care for home infusion
therapy established by Medicare
Advantage plans under part C and in the
private sector. The supplier may
subcontract with a pharmacy, physician,
other qualified supplier or provider of
medical services, in order to meet these
requirements.
Section 1834(u) of the Act requires
the Secretary to implement a payment
system under which a single payment is
made to a home infusion therapy
supplier for the items and services
(professional services, including nursing
services; training and education; remote
monitoring, and other monitoring
services), beginning January 1, 2021.
The single payment must take into
account, as appropriate, types of
infusion therapy, including variations in
utilization of services by therapy type.
In addition, the single payment amount
is required to be adjusted to reflect
geographic wage index and other costs
that may vary by region, patient acuity,
and complexity of drug administration.
The single payment may be adjusted to
reflect outlier situations, and other
factors as deemed appropriate by the
Secretary, which are required to be done
in a budget neutral manner. Section
1834(u)(3) of the Act specifies that
annual updates to the single payment
are required to be made beginning
January 1, 2022, by increasing the single
payment amount by the percent increase
in the Consumer Price Index (CPI) for all
PO 00000
Frm 00110
Fmt 4701
Sfmt 4702
urban consumers for the 12-month
period ending with June of the
preceding year, reduced by the multifactor productivity adjustment. The unit
of single payment for each infusion drug
administration calendar day, including
the required adjustments and the annual
update, cannot exceed the amount
determined under the fee schedule
under section 1848 of the Act for
infusion therapy services if furnished in
a physician’s office, and the single
payment amount cannot reflect more
than 5 hours of infusion for a particular
therapy per calendar day. Section
1834(u)(4) of the Act also allows the
Secretary discretion, as appropriate, to
consider prior authorization
requirements for home infusion therapy
services. Finally, section 5012(c)(3) of
the Cures Act amended section 1861(m)
of the Act to exclude home infusion
therapy from the HH PPS beginning on
January 1, 2021.
B. Proposed Health and Safety
Standards for Home Infusion Therapy
1. Introduction
Section 5012 of the Cures Act requires
that, to receive payment under the
Medicare home infusion therapy
benefit, home infusion therapy
suppliers must select a CMS-approved
accreditation organization (AO) and
undergo an accreditation review process
to demonstrate that the home infusion
therapy supplier meets the AO’s
standards. Section 1861(iii) of the Act,
as added by section 5012 of the Cures
Act, sets forth four elements for home
infusion therapy in the following areas:
(1) Requiring that the patient be under
the care of a physician, nurse
practitioner, or physician assistant; (2)
requiring that all patients have a plan of
care established and updated by a
physician that sets out the care and
prescribed infusion therapy necessary to
meet the patient specific needs; (3)
providing patients with education and
training on the effective use of
medications and equipment in the home
(not otherwise paid for as durable
medical equipment); and (4) providing
monitoring and remote monitoring
services associated with administering
infusion drugs in a patient’s home.
The Journal of Infusion Nursing
standards of practice specifically
address patient education, and state that
it is the clinician’s role to educate the
patient, caregiver, and/or surrogate
about the prescribed infusion therapy
and plan of care including, but not
limited to, purpose and expected
outcome(s) and/or goals of treatment,
infusion therapy administration;
infusion device-related care; potential
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
complications; or adverse effects
associated with treatment. (Infusion
Therapy Standards of Practice, 2015).92
Currently, standards for home
infusion therapy have been established
by the current AOs; however, they are
not necessarily consistent. In order to
assure consistency in the areas
identified in the Act, we are establishing
basic standards that all AOs would be
required to meet or exceed. We are
proposing universal standards for
Medicare-participating qualified home
infusion therapy suppliers to ensure the
quality and safety of home infusion
therapy services for all beneficiaries that
these suppliers serve.
In preparation for developing these
standards and to gain a clear
understanding of the current home
infusion therapy supplier private sector
climate, we reviewed the requirements
established by section 5012 of the Cures
Act, performed an extensive review of
the standards from all six AOs that
accredit home infusion suppliers (The
Joint Commission, Accreditation
Commission for Health Care,
Compliance Team, Community Health
Accreditation Partner, Healthcare
Quality Association on Accreditation,
and National Association of Boards of
Pharmacy), and reviewed various other
government and industry publications
listed in this proposed rule. In addition
to the standards, we reviewed the
following documents related to
coverage:
• Government Accountability
Office—10–426 report, which describes
the state of coverage of home infusion
therapy components under Medicare
fee-for-service prior to the enactment of
the Cures Act (GAO, 2010).93
• Medicare and Home Infusion white
paper written by the National Home
Infusion Association (NHIA), which
provided an overview of Medicare
coverage provided for Home Infusion
Therapy services prior to the enactment
of the Cures Act, as well as results of a
study conducted by Avalere Health on
the potential savings that could result
from Medicare coverage of infusion
therapy provided in the home (National
Home Infusion Therapy Association,
NDS).94
92 Infusion Therapy: Standards of Practice,
Journal of Infusion Nursing, Wolters Kluwer: Jan/
Feb 2016 pp S25–S26
93 Government Accountability Office. (2010).
Home Infusion Therapy. Differences between
Medicare and Private Insurers’ coverage. (GAO
Publication No. 10–426). Washington, DC: U.S.
Government Printing Office.
94 National Home Infusion therapy Association.
Medicare and Home Infusion White Paper.
Retrieved from https://www.nhia.org/resource/
legislative/documents/NHIAWhitePaper-Web.pdf.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
• American Society of Health System
Pharmacists Guidelines on Home
Infusion Pharmacy Services, which
provided an in-depth overview of
specialized, complex. pharmaceuticals,
best practices on providing home
infusion therapy in the home or
alternative site settings, and the plans to
execute and manage the therapy
(American Society of Health-System
Pharmacists. ASHP guidelines on Home
Infusion Pharmacy Service, 2014).95
• The requirements of numerous
Medicare Advantage plans, Medicare
FFS, and private insurance plans.
Upon review of these materials, we
believe that there is a sufficient privatesector framework already in place to
address many of the areas that would
typically be included in the
establishment of basic health and safety
standards for home infusion therapy.
For example, existing AO standards
include requirements related to plan of
care, monitoring, patient assessment,
quality improvement, and infection
control. While the exact content of the
AO standards vary, we believe that the
standards are adequate to ensure patient
health and safety. The AO representing
the largest number of home infusion
therapy suppliers requires that home
infusion pharmacies provide certain
services to ensure safe and appropriate
therapy, in compliance with nationally
recognized standards of practice. Patient
training and education activities, as part
of their required admission procedures,
include the use of medical and
disposable equipment, medication
storage, emergency procedures, vascular
access device management, recognition
of a drug reaction, and when to report
any adverse drug event. As such, we
conclude that it is appropriate at this
time to propose requirements for only
those elements specifically identified in
section 1861(iii) of the Act. Through the
CMS accreditation organization process,
we would monitor home infusion
therapy suppliers to assure that services
are provided in a safe and effective
manner, and would consider future
rulemaking to address any areas that
may need improvement in the future.
We are seeking public comment on this
approach and invite comments related
to the home infusion therapy proposed
standards. Specifically, are the
standards sufficient for Medicare
beneficiaries, should CMS consider
additional standards and would
95 American Society of Health-System
Pharmacists. ASHP guidelines on Home Infusion
Pharmacy Service, 2014. Retrieved from: https://
www.ashp.org/-/media/assets/policy-guidelines/
docs/guidelines/home-infusion-pharmacy-services.
ashx?la=en&hash=255092A51D0AE4746
C151C51AC7BF82217AC2F76.
PO 00000
Frm 00111
Fmt 4701
Sfmt 4702
32449
additional standards impose additional
burden?
2. Home Infusion Therapy Supplier
Requirements (Proposed Part 486,
Subpart I)
We propose to add a new 42 CFR part
486, subpart I, to incorporate the home
infusion therapy supplier requirements.
The proposed regulations would
provide a framework for CMS to
approve home infusion therapy
accreditation organizations and give
them the authority to approve Medicare
certification for home infusion therapy
suppliers. Proposed subpart I would
include General Provisions (Basis and
Scope, and Definitions) and Standards
for Home Infusion Therapy (Plan of Care
and Required Services).
a. Basis and Scope (Proposed § 486.500)
We propose to set forth the basis and
scope of part 486 at § 486.500. Part 486
is based on sections 1861(iii)(2)(D) of
the Act, which establishes the
requirements that a home infusion
therapy supplier must meet in order to
participate in the Medicare program.
These provisions serve as the basis for
survey activities for the purposes of
determining whether a home infusion
therapy supplier meets the requirements
for participation in Medicare. Section
1834(u) of the Act serves as the basis for
the establishment of a prospective
payment system for home infusion
therapy covered under Medicare. In
addition, 1834(u)(5) of the Act
establishes the factors for the Secretary
to designate organizations to accredit
suppliers furnishing home infusion
therapy and requires that organizations
be designated not later than January 1,
2021.
b. Definitions (Proposed § 486.505)
At § 486.505, we propose to define
certain terms that would be used in the
home infusion therapy requirements.
We propose to define the terms
‘‘applicable provider’’, ‘‘home’’, ‘‘home
infusion drug’’, and ‘‘qualified home
infusion therapy supplier’’ in
accordance with the definitions set forth
in section 1861(iii) of the Act.
Furthermore, section 1861(iii) of the Act
includes a definition of the term ‘‘home
infusion therapy’’ that is the basis of the
proposed health and safety
requirements set forth in this rule. In
accordance with the Act, we propose
the following definitions:
• ‘‘Applicable provider’’ would mean
a physician, a nurse practitioner, and a
physician assistant.
• ‘‘Home’’ would mean a place of
residence used as the home of an
individual, including an institution that
E:\FR\FM\12JYP2.SGM
12JYP2
32450
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
is used as a home. However, an
institution that is used as a home may
not be a hospital, CAH, or SNF as
defined in sections 1861(e),
1861(mm)(1), and 1819 of the Act,
respectively.
• ‘‘Home infusion drug’’ would mean
a parenteral drug or biological
administered intravenously, or
subcutaneously for an administration
period of 15 minutes or more, in the
home of an individual through a pump
that is an item of durable medical
equipment. The term does not include
insulin pump systems or a selfadministered drug or biological on a
self-administered drug exclusion list.
• ‘‘Qualified home infusion therapy
supplier’’ would mean a supplier of
home infusion therapy that meets the all
of the following criteria which are set
forth at section 1861(iii)(3)(D)(i) of the
Act: (1) Furnishes infusion therapy to
individuals with acute or chronic
conditions requiring administration of
home infusion drugs; (2) ensures the
safe and effective provision and
administration of home infusion therapy
on a 7-day-a-week, 24-hour-a-day basis;
(3) is accredited by an organization
designated by the Secretary in
accordance with section 1834(u)(5) of
the Act; and (4) meets such other
requirements as the Secretary
determines appropriate.
amozie on DSK3GDR082PROD with PROPOSALS2
c. Standards for Home Infusion Therapy
Proposed subpart I, as required by
section 5012 of the Cures Act, would
specify that the qualified home infusion
therapy supplier ensure that all patients
have a plan of care established by a
physician.
(1) Plan of Care (Proposed § 486.520)
At § 486.520(a), we propose to require
that all patients must be under the care
of an ‘‘applicable provider’’ as defined
at § 486.505. At § 486.520(b) we would
require that the qualified home infusion
therapy supplier ensure that all patients
must have a plan of care established by
a physician that prescribes the type,
amount, and duration of home infusion
therapy services that are furnished. The
plan of care would also include the
specific medication, the prescribed
dosage and frequency as well as the
professional services to be utilized for
treatment. In addition, the plan of care
would specify the care and services
necessary to meet the patient-specific
needs.
We also propose, at § 486.520(c), that
the qualified home infusion therapy
supplier must ensure that the plan of
care for each patient is periodically
reviewed by the physician. We do not
propose to establish a specific time
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
frame for review requirements, but the
expectation is that the physician is
active in the patient’s care and can make
appropriate decisions related to the
course of therapy if changes are
necessary in regards to the progress of
the patient and goal achievement with
the infusion therapy. We welcome
comments regarding the proposed home
infusion therapy plan of care
requirements and if we should include
specific review timeframes for the plan
of care.
(2) Required Services (Proposed
§ 486.525)
Section 1861(iii)(2)(D)(II) of the Act
specifically mandates that qualified
home infusion therapy suppliers ensure
the safe and effective provision and
administration of home infusion therapy
on a 7-day-a-week, 24-hour-a-day basis.
Infusion drugs are administered directly
into a vein or under the skin, eliciting
a more rapid clinical response than with
oral medications. Consequently, an
adverse effect or a medication error
could result in a quicker and/or more
severe complication. Therefore, at
§ 486.525(a), we propose to require the
provision of professional services,
including nursing services, furnished in
accordance with the plan of care. We
propose to require that home infusion
therapy suppliers ensure that
professional services are available on a
7-day-a-week, 24-hour-a-day basis in
order to ensure that patients have access
to expert clinical knowledge and advice
in the event of an urgent or emergent
infusion-related situation. This
proposed requirement is imperative, as
the success of home infusion therapy is
often dependent upon the professional
services being available during all hours
and days of the week that allows for the
patient to safely and effectively manage
all aspects of treatment.
At § 486.525(b), we propose to require
patient training and education, not
otherwise paid for as durable medical
equipment, and as described in 42 CFR
424.57(c)(12). This proposed
requirement is consistent with section
1861(iii)(2)(B). In addition, the proposed
patient training and education
requirements are consistent with
standards that are already in place, as
established by the current AOs of home
infusion therapy suppliers. This is a
best practice, as home infusion therapy
may entail the use of equipment and
supplies with which patients’ may not
be comfortable or familiar.
At § 486.525(c), we propose to require
qualified home infusion therapy
suppliers to provide remote monitoring
and monitoring services for the
provision of home infusion therapy
PO 00000
Frm 00112
Fmt 4701
Sfmt 4702
services and home infusion drugs
furnished by a qualified home infusion
therapy supplier. This proposed
requirement is also consistent with
section 1861(iii)(2)(B). Monitoring the
patient receiving infusion therapy in
their home is a vital standard of practice
that is an integral part of providing
medical care to patients in their home.96
The expectation is that home infusion
therapy suppliers would provide
ongoing patient monitoring and
continual reassessment of the patient to
evaluate response to treatment, drug
complications, adverse reactions, and
patient compliance. Remote monitoring
may be completed through follow-up
telephone or other electronic
communication, based on patient
preference of communication. However,
we do not propose to limit remote
monitoring to these methods. Suppliers
would be permitted to use all available
remote monitoring methods that are safe
and appropriate for their patients and
clinicians and as specified in the plan
of care as long as adequate security and
privacy protections are utilized.
Monitoring may also be performed
directly during in-home patient visits.
Additional discussion on remote
monitoring and monitoring services can
be found in section II.C.2.d. of this
proposed rule. We invite the public to
submit comments regarding the
proposed home infusion therapy
supplier service requirements.
C. Approval and Oversight of
Accrediting Organizations for Home
Infusion Therapy Suppliers
1. Background
Section 1861(iii)(3)(D)(III) of the
Social Security Act (the Act), as added
by section 5012(b) of the Cures Act,
requires that a home infusion therapy
supplier be accredited by an AO
designated by the Secretary in
accordance with section 1834 (u)(5) of
the Act. Section 1834(u)(5)(A) of the Act
identifies factors for designating AOs
and modifying the list of designated
AOs. These statutory factors are: (1) The
ability of the organization to conduct
timely reviews of accreditation
applications; (2) the ability of the
organization take into account the
capacities of suppliers located in a rural
area (as defined in section 1886(d)(2)(D)
of the Act); (3) whether the organization
has established reasonable fees to be
charged to suppliers applying for
accreditation; and, (4) such other factors
as the Secretary determines appropriate.
96 Infusion Therapy: Standards of Practice,
Journal of Infusion Nursing, Wolters Kluwer: Jan/
Feb 2016 pp S25–S26.
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
Section 1834(u)(5)(B) of the Act
requires the Secretary to designate AOs
to accredit home infusion therapy
suppliers furnishing home infusion
therapy not later than January 1, 2021.
However, at this time, there are six AOs
that are providing accreditation to home
infusion therapy suppliers. These AOs
are: (1) The Joint Commission (TJC); (2)
Accreditation Commission for Health
Care (ACHC); (3) Compliance Team
(TCT); (4) Community Health
Accreditation Partner (CHAP); (5)
Healthcare Quality Association on
Accreditation; and (6) National
Association of Boards of Pharmacy.
These AOs are accrediting home
infusion therapy suppliers as part of the
deeming accreditation of home health
agencies. However, these AOs have not
been separately approved by Medicare
for accreditation of home infusion
therapy services.
We are proposing to publish a
solicitation notice in the Federal
Register, in which we would invite
national AOs to apply to accredit home
infusion therapy suppliers for the
Medicare program. We are proposing
that this solicitation notice would be
published after the final rule is
published, so that we can designate AOs
to accredit home infusion therapy
suppliers by no later than January 1,
2021 as required by 1834(u)(5)(B) of the
Act. Any AOs that respond to this
solicitation notice would be required to
submit an application for CMS-approval
of their home infusion therapy
accreditation program. The application
submitted by an AO that respond to the
solicitation notice would be required to
meet all requirements set forth in
proposed § 488.1010 and demonstrate
that their substantive requirements are
equal to or more stringent than our
proposed regulations at part 485,
subpart I.
Section 1861(iii)(3)(D) of the Act
requires ‘‘qualified home infusion
therapy suppliers’’ to be accredited by a
CMS-approved AO. We are also
proposing that, in order for the home
infusion therapy suppliers accredited by
the six AOs that currently provide nonMedicare approved home infusion
therapy accreditation to continue
receiving payment for the home
infusion therapy services they provide,
the 6 existing AOs must submit
applications to CMS for Medicare
approval of their home infusion therapy
accreditation program. The
accreditation currently being provided
by these six AOs to the home infusion
therapy suppliers is part of another
accreditation program that has not be
separately approved by CMS. These
AOs have not submitted an application
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
to CMS for approval of a specific home
infusion therapy accreditation program
that meets the requirements of section
1861(iii) and section 1834(u)(5) of the
Act; therefore, CMS has not been able to
determine whether the home infusion
therapy accreditation program standards
used by these AOs meets or exceeds
those of Medicare.
We are proposing that the home
infusion therapy accreditation program
submitted to CMS by these existing AOs
be a separate and distinct accreditation
program from the AO’s home health
accreditation program. This would
mean that these AOs must have a
separate accreditation program with
separate survey processes and standards
for the accreditation of home infusion
therapy suppliers. In addition, we
would require that the application
submitted by the six AOs that currently
provide non-Medicare approved
accreditation to home infusion therapy
suppliers meet the requirements set
forth in the proposed regulations at
§ 488.1010 and enforce the substantive
health and safety standards proposed to
be set out at 42 CFR part 485, subpart
I.
Section 1834(u)(5)(C)(ii) of the Act
states that in the case where the
Secretary removes a home infusion
therapy AO from the list of designated
home infusion therapy AOs, any home
infusion therapy supplier that is
accredited by the home infusion therapy
AO during the period beginning on the
date on which the home infusion
therapy AO is designated as an CMSapproved home infusion therapy AO
and ending on the date on which the
home infusion therapy AO is removed
from such list, shall be considered to
have been accredited by an home
infusion therapy AO designated by the
Secretary for the remaining period such
accreditation is in effect. Under section
1834(u)(5)(D) of the Act, in the case of
a home infusion therapy supplier that is
accredited before January 1, 2021 by a
home infusion therapy AO designated
by the Secretary as of January 1, 2019,
such home infusion therapy supplier
shall be considered to be accredited by
a home infusion therapy AO designated
by the Secretary as of January 1, 2023,
for the remaining period such
accreditation is in effect. Home infusion
therapy suppliers are required to receive
accreditation before receiving Medicare
payment for services provided to
Medicare beneficiaries.
Section 1861(iii)(3)(D) of the Act
defines ‘‘qualified home infusion
therapy suppliers’’ as being accredited
by a CMS-approved AO. CMS is
proposing to establish regulations for
the approval and oversight of AOs that
PO 00000
Frm 00113
Fmt 4701
Sfmt 4702
32451
accredit home infusion therapy
suppliers that address the following: (1)
The required components to be
included in a home infusion therapy
AO’s initial or renewal application for
CMS approval of the AO’s home
infusion therapy accreditation program;
(2) the procedure for CMS’ review and
approval of the home infusion therapy
AOs application for CMS approval of its
home infusion therapy accreditation
program; and (3) the ongoing monitoring
and oversight of CMS-approved home
infusion therapy AOs.
2. Proposed Process and Standards for
Home Infusion Therapy Accreditation
and the Approval and Oversight of
Accrediting Organizations With CMSApproved Accreditation Programs for
Home Infusion Therapy Services
a. Establishment of Regulatory
Requirements
We propose to establish new
regulations in a new subpart L in 42
CFR part 488 that would govern CMS’
approval and oversight of AOs that
accredit home infusion therapy
suppliers. We believe these proposed
new regulations would provide CMS
with reasonable assurance that the home
infusion therapy AO’s accreditation
program requirements are consistent
with the appropriate Medicare
accreditation program requirements.
Further, we believe that these proposed
regulations would provide CMS with a
way to provide oversight for AOs that
accredit home infusion therapy
suppliers, and provide CMS with
authority over the home infusion
therapy suppliers.
We are proposing to implement a
comprehensive, consistent and
standardized set of AO oversight
regulations for accreditors of home
infusion therapy suppliers. It is our
intention to provide home infusion
therapy AOs with the flexibility to
innovate within the framework of these
proposed regulations while assuring
that their accreditation standards meet,
or exceed the appropriate Medicare
requirements, and their survey
processes are comparable to those of
Medicare. ‘‘Flexibility to innovate’’
means that AOs retain the freedom to
develop their own accreditation
standards and survey processes, so long
as the AO ensures that they meet the
proposed health and safety standards
(contained in 42 CFR part 486, subpart
B) and the AO meets the requirements
of the proposed AO approval and
oversight regulations.
The proposed regulations would
reflect requirements similar to those in
place for the oversight of national AOs
E:\FR\FM\12JYP2.SGM
12JYP2
32452
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
for Medicare-certified providers and
suppliers which are codified at 42 CFR
488.1 through 488.9 and 42 CFR part
489, but would be modified, as
appropriate, to be applicable for
accreditors of home infusion therapy
suppliers. We believe that it is
important to have AO approval and
oversight regulations that are as
consistent as possible across all AOs
and to treat all AOs in a similar manner.
b. Consideration of Existing Regulations
In formulating our approach to
implementing the statutory
requirements related to accreditation
organizations, we had considered using
the regulations at 42 CFR 488.1 to
488.13 for the approval and oversight of
AOs that accredit home infusion
therapy suppliers. However, we decided
not to do so because Congress, by setting
out separate accreditation organization
approval standards for home infusion
therapy suppliers at 1834(u)(5)(A) of the
Act, intended approval for this
accreditation program to be a discrete
process. We believe that having a
separate set of approval regulations
applicable only to home infusion
therapy suppliers will best reflect
Congress’s intent.
Only limited portions of the
regulations at §§ 488.1 through 488.13
would apply to AOs that accredit home
infusion therapy suppliers. For
example, § 488.6, which provides that a
supplier or provider that has been
granted ‘‘deemed status’’ by CMS by
virtue of its accreditation from a CMSapproved accreditation program is
eligible to participate in the Medicaid
program if they are not required under
Medicaid regulations to comply with
any requirements other than Medicare
participation requirements would not
apply to home infusion therapy
suppliers because home infusion
therapy suppliers cannot be deemed.
The deeming process only applies to
certain types of Medicare certified
providers and suppliers, such as
hospitals.
Section 488.7 titled ‘‘Release and use
of accreditation surveys’’ and § 488.8
titled ‘‘Ongoing review of accrediting
organizations’’ would apply to AOs that
accredit home infusion therapy
suppliers. However, § 488.9 titled
‘‘Validation surveys’’ would not apply
to home infusion therapy suppliers
because the State Survey Agency (SA)
only performs validation surveys for
Medicare providers that have an
agreement with Medicare. Home
infusion therapy suppliers are enrolled
in the Medicare program but do not
enter into an agreement with Medicare,
therefore the SA will not perform
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
validation surveys of home infusion
therapy suppliers. Also, section 1864(a)
of the Act provides, that by agreement
with the Secretary, the SA shall provide
services to the following Medicare
certified healthcare providers:
Hospitals, skilled nursing facilities,
home health agencies, hospice
programs, rural health clinics, critical
access hospitals, comprehensive
outpatient rehabilitation facilities,
laboratories, clinics, rehabilitation
agencies, public health agencies, or
ambulatory surgical centers.
Section 488.10, titled ‘‘State survey
agency review: Statutory provisions’’,
§ 488.11 titled ‘‘State survey agency
functions’’ and § 488.12 titled ‘‘Effect of
survey agency certification’’ would also
not apply to home infusion therapy
AOs. This is because, as stated
previously, the SA does not perform
validation surveys for AOs that accredit
home infusion therapy providers.
Section 488.13, titled ‘‘Loss of
accreditation’’ provides that ‘‘if an
accrediting organization notifies CMS
that it is terminating a provider or
supplier due to non-compliance with its
CMS-approved accreditation
requirements, the SA will conduct a full
review in a timely manner.’’ This
section would also not apply to AOs
that accredit home infusion therapy
suppliers because this regulation section
requires use of the SA.
Section 488.14 titled, ‘‘Effect of QIO
review’’ provides that ‘‘when a QIO is
conducting review activities under
section 1154 of the Act and part 466 of
this chapter, its activities are in lieu of
the utilization review and evaluation
activities required of health care
institutions under sections 1861(e)(6),
and 1861(k) of the Act.’’ This section
would not apply to home infusion
therapy suppliers because it is only
applicable only to hospitals.
Finally, § 488.18, titled
‘‘Documentation of findings’’ states that
‘‘the findings of the State agency with
respect to each of the conditions of
participation, requirements (for SNFs
and NFs), or conditions for coverage
must be adequately documented.’’ This
section would not apply to AOs that
accredit home infusion therapy
suppliers because it involves the finding
of the SA related only to SNFs and NFs.
In conclusion, a majority of sections
contained in §§ 488.1 through 488.13 do
not apply to home infusion therapy AOs
and home infusion therapy suppliers.
Therefore, we are proposing to create a
separate set of regulations that are
specifically applicable to home infusion
therapy AOs and suppliers.
PO 00000
Frm 00114
Fmt 4701
Sfmt 4702
We seek comment on our decision not
to use the existing regulation at §§ 488.1
through 488.13.
c. Consideration of a Validation Process
for Accrediting Organizations That
Accredit Home Infusion Therapy
Suppliers
Our conventional validation process
involves the participation of the CMS
Regional Offices (ROs) to request the
State Survey Agency to conduct an
onsite validation (follow-up) survey
within 60 days of an AO’s onsite survey.
The purpose of a validation survey is to
evaluate the ability of that AO’s survey
process to identify serious, condition
level deficiencies.
We are not proposing to establish a
validation program requirement for
home infusion therapy AOs and
suppliers due to a number of resource
constraints. Several factors limit our
ability to establish and implement a
validation program for home infusion
therapy AOs. First, the SAs are not
available to perform validation surveys
for home infusion therapy AOs
suppliers and other similar non-certified
providers and suppliers. Section 1864(a)
of the Act provides the SA, by
agreement with the Secretary, provides
services to the following Medicare
certified healthcare providers:
Hospitals, skilled nursing facilities,
home health agencies, hospice
programs, rural health clinics, critical
access hospitals, comprehensive
outpatient rehabilitation facilities,
laboratories, clinics, rehabilitation
agencies, public health agencies, or
ambulatory surgical centers.
Second, a validation program for
home infusion therapy supplier AOs
would require the use of contractors.
Third, achieving sample sizes that are
statistically significant from which to
draw reliable conclusions about AO
performances across all home infusion
therapy suppliers would be problematic
as there are a limited number of home
infusion therapy suppliers. Due to the
factors stated previously, we are not
proposing to include validation
requirements in the proposed new
regulations for the oversight of AOs that
accredit suppliers at this time. We seek
public comment on the decision not to
propose a validation process at this
time.
Even though we would not have a
formal validation process in place, we
would be able to monitor the
performance of the home infusion
therapy AOs as part of the ongoing AO
oversight process provided for in the
proposed home infusion therapy AO
approval and oversight regulations at
§§ 488.1010 through 488.1050. For
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
example, under proposed § 488.1030 we
would have the ability to perform
performance reviews to evaluate the
performance of each CMS-approved
home infusion therapy accreditation
program on an ongoing basis;
comparability reviews to assess the
equivalency of a home infusion therapy
AO’s CMS-approved program
requirements with the comparable
Medicare home infusion therapy
accreditation requirements after CMS
imposes new or revised Medicare
accreditation requirements; and
standards reviews when a home
infusion therapy accrediting
organization proposes to adopt new or
revised accreditation standards. We may
also perform CMS-approved home
infusion therapy accreditation program
review if a comparability or
performance, or standards review
reveals evidence of substantial noncompliance of a home infusion therapy
AO’s CMS-approved home infusion
therapy accreditation program with the
requirements of this subpart. (See
proposed § 488.1005 below for a
definition of substantial noncompliance).
In addition, proposed § 488.1035
would require the home infusion
therapy AOs to submit information to
CMS which will help us monitor the
AO’s performance. This information
would also help to ensure that the home
infusion therapy suppliers accredited by
the AO provide care that meets the
proposed health and safety standards
contained in 42 CFR part 486, subpart
B. This information includes the
following:
• Copies of all home infusion therapy
supplier accreditation surveys, together
with any survey-related information.
• Notice of all accreditation
decisions.
• Notice of all complaints related to
the AO’s accredited suppliers.
• Information about all home infusion
therapy accredited suppliers against
which the home infusion therapy
accreditation organization has taken
remedial or adverse action, including
revocation, withdrawal, or revision of
the providers or suppliers accreditation.
• Annual basis, summary data
specified by CMS that relate to the past
year’s accreditation activities and
trends.
• Notice of any proposed changes in
the home infusion therapy accrediting
organization’s accreditation standards or
requirements or survey process.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
32453
d. Application Requirement for AOs
That Currently Provide Accreditation
for Home Infusion Therapy Suppliers
The following sections discuss the
proposed regulations, in their proposed
order.
In this rule, we are proposing to
establish regulations for the approval
and oversight of AOs for home infusion
therapy suppliers. We are also
proposing the health and safety
standards which home infusion therapy
suppliers must meet, and which the
home infusion AOs must meet or exceed
in their accreditation standards. These
health and safety standards are set forth
at 42 CFR part 486, subpart I. The AOs
that currently accredit home infusion
therapy suppliers have not heretofore
been governed by any CMS regulations
related to home infusion therapy
accreditation or health and safety
standards. These AOs have each created
their own set of accreditations
standards. These accreditation
standards vary from AO to AO.
Section 1834(u)(5)(C) of the Act
requires home infusion therapy
suppliers to be accredited in order to
receive payment for the services they
provide. We propose to require that the
home infusion therapy accreditation
program submitted to CMS for approval
by each of the AOs that currently
accredit home infusion therapy
suppliers be separate and distinct
accreditation programs that are not part
of the AOs home health accreditation
program. We would further require that
the AOs home infusion therapy
accreditation standards meet or exceed
the proposed health and safety
standards for home infusion therapy
suppliers. Finally, we would require
that the application meet the
requirements of proposed 42 CFR
488.1010.
We solicit comments on these
proposals.
(1) Basis and Scope (§ 488.1000)
We propose at § 488.1000 to set forth
the statutory authority related to this set
of proposed regulations. Sections
1834(u)(5) and 1861(iii) of the Act
would be the statutory basis for these
proposed regulations. These sections of
the Act provide the Secretary with the
authority necessary to carry out the
administration of the Medicare program.
Section 1861 of the Act defines services,
supplier types and benefits, and over
whom Medicare may have authority.
Section 1861(d) defines the term
‘‘supplier.’’ Section 1834(u)(5) of the
Act governs accreditation of home
infusion therapy suppliers.
Section 1861(iii)(3)(D)(i)(III) of the Act
requires that home infusion therapy
suppliers be accredited by an
organization designated under section
1834(u)(5)of the Act. Section 1834(u)(5)
of the Act requires that the Secretary
establish factors in designating
accrediting organizations and designate
accrediting organizations to accredit
suppliers furnishing home infusion
therapy by January 1, 2021.
Proposed § 488.1000(a) would set
forth the statutory authority for the
accreditation of home infusion therapy
suppliers by the home infusion therapy
AOs. Title 42 CFR 488.1000(b) would
set forth the scope of the proposed
regulation, which is the application and
reapplication procedures for national
AOs seeking approval or re-approval of
authority to accredit home infusion
therapy suppliers; ongoing CMS
oversight processes for approved of
home infusion therapy AOs; and, appeal
procedures for AOs of home infusion
therapy suppliers.
e. Oversight of Home Infusion Therapy
Accrediting Organizations
(2) Definitions (§ 488.1005)
We are proposing to use the following
definitions at § 488.1005:
• Accredited home infusion therapy
supplier means a supplier that has
demonstrated substantial compliance
with a CMS-approved national home
infusion therapy AO’s applicable CMSapproved home infusion therapy
accreditation program standards, which
meet or exceed those of Medicare, and
has been awarded accreditation by that
AO.
• Qualified home infusion therapy
supplier means an entity that meets the
following criteria which are set forth at
1861(iii)(3)(D)(i): (1) Furnishes infusion
therapy to individuals with acute or
chronic conditions requiring
administration of home infusion drugs;
(2) ensures the safe and effective
As noted previously, we are
proposing to create a new set of
regulations titled, ‘‘Approval and
Oversight of Home Infusion Therapy
Supplier Accrediting Organizations’’ at
42 CFR part 488, subpart L. These
proposed regulations would set forth the
application and reapplication
procedures for national AOs seeking
approval or re-approval of authority to
accredit home infusion therapy
suppliers; ongoing CMS oversight
processes for approved AOs that
accredit home infusion therapy
suppliers; and, appeal procedures for
AOs that accredit home infusion
therapy suppliers. In this section of the
proposed rule, we describe our
proposed regulatory provisions.
PO 00000
Frm 00115
Fmt 4701
Sfmt 4702
E:\FR\FM\12JYP2.SGM
12JYP2
32454
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
provision and administration of home
infusion therapy on a 7-day-a-week, 24hour-a-day basis; (3) is accredited by an
organization designated by the Secretary
pursuant to section 1834(u)(5); and (4)
meets such other requirements as the
Secretary determines appropriate.
• Immediate jeopardy means a
situation in which the provider’s or
supplier’s non-compliance with one or
more Medicare accreditation
requirements has caused, or is likely to
cause, serious injury, harm, impairment,
or death to a patient, as codified at
§ 488.1.
• National accrediting organization
means an organization that accredits
supplier entities under a specific
program and whose accredited supplier
entities under each program are widely
dispersed geographically across the
United States. In addition, the specific
program is active, fully implemented,
and operational. This definition is
codified at § 488.1.
• Reasonable assurance means an AO
has demonstrated to CMS’ satisfaction
that its accreditation program
requirements meet or exceed the
Medicare program requirements. This
definition is codified at § 488.1.
• Rural area means an area as defined
at section 1886(d)(2)(D) of the Act.
• Substantial allegation of noncompliance means a complaint from any
of a variety of sources (such as patient,
relative, or third party), including
complaints submitted in person, by
telephone, through written
correspondence, or in the newspaper,
magazine articles or other media, that
would, if found to be present, adversely
affect the health and safety of patients
and raises doubts as to a supplier’s
compliance with any of the Medicare
home infusion therapy accreditation
requirements. This definition is codified
at § 488.1.
(3) Application and Reapplication
Procedures for National Accrediting
Organizations (§ 488.1010)
Proposed § 488.1010 would contain
application and re-application
procedures for all national AOs seeking
CMS-approval of an accreditation
program for home infusion therapy
suppliers. Proposed § 488.1010(a) would
provide a comprehensive listing of the
information, supporting documentation,
certifications, written statements and
other data that prospective AOs for
home infusion therapy suppliers would
be required to include in their
application for approval to accredit
home infusion therapy suppliers. The
requirements under this section would
apply to both initial applications for
CMS-approval as well as applications
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
for re-approval of an existing CMSapproved home infusion therapy
accreditation program. This section
would also require the AOs for home
infusion therapy supplies to furnish
CMS with information that
demonstrates that their accreditation
program requirements meet or exceed
the applicable Medicare requirements.
Proposed § 488.1010(a)(1) would
require AOs for home infusion therapy
suppliers seeking initial or renewed
CMS-approval of their home infusion
therapy accreditation program to
demonstrate that they meet the
definition of a ‘‘national accrediting
organization.’’ Section 1865 of the Act
requires that accrediting organizations
be national in scope.
We believe that because home
infusion therapy suppliers are located
throughout the country, it is necessary
for AOs to demonstrate their ability to
provide accreditation services in a
variety of regions across the country. In
the May 22, 2015 final rule entitled,
‘‘Medicare and Medicaid Programs:
Revisions to Deeming Authority,
Survey, Certification and Enforcement
Procedures’’ (80 FR 29802), we stated
that the term ‘‘national in scope’’
indicated a program already fully
implemented, operational, and widely
dispersed geographically throughout the
country. However, we also stated that
we would not establish a minimum or
a specific geographic distribution for
provider entities that the program must
have already accredited. It is our intent
that this proposed section would require
a home infusion therapy AO to
demonstrate that their accreditation
program meets the ‘‘national in scope’’
description as previously defined.
Proposed § 488.1010(a)(2) would
require AOs to specifically identify the
Medicare supplier type for which they
are requesting CMS-approval or
reapproval. We believe it is necessary
for an AO to establish separate
accreditation requirements for each
supplier type they accredit. There are
many AOs that provide accreditation
programs for multiple types of provider
and supplier types. When we receive an
application from such an AO, we would
not know which type of accreditation
program the AO has submitted for CMS
approval. For example, the AO could be
submitting a renewal application for one
of its existing accreditation programs.
Therefore, it is helpful to CMS if the AO
identifies the type of accreditation for
which they are seeking approval at the
beginning of the application.
Proposed § 488.1010(a)(3) would
require AOs to demonstrate their ability
to take into account the capacities of
home infusion therapy suppliers in
PO 00000
Frm 00116
Fmt 4701
Sfmt 4702
rural areas (as defined in section
1834(u)(5)(A)(ii) of the Act. Rural home
infusion therapy suppliers may have
limitations or access to care issues that
do not apply to suburban and urban
home infusion therapy suppliers. These
limitation may include, but are not
limited to the number of home infusion
therapy suppliers available in rural
areas and limited home infusion therapy
services offered in rural areas. While we
certainly would not permit AOs that
accredit any type of supplier to modify
their accreditation standards for
suppliers in rural areas, these factors
must be taken into account as in
accordance with section
1834(u)(5)(A)(ii) of the Act.
Proposed § 488.1010(a)(4) would
require the home infusion therapy AO
to provide information that documents
their knowledge, expertise, and
experience in the healthcare field for
which they offer accreditation and for
which they are requesting approval. We
believe that to successfully develop
accreditation program standards that
can provide CMS with reasonable
assurance that accredited home infusion
therapy suppliers meet or exceed each
of the applicable Medicare
requirements, evaluate compliance,
support entities in their efforts to
identify and implement necessary
corrective actions and monitor ongoing
compliance, an AO must possess subject
matter expertise and experience in that
field.
Proposed § 488.1010(a)(5) would
require the AO to submit a detailed
crosswalk (in table format) that
identifies, for each of the applicable
Medicare health and safety
requirements, the exact language of the
accrediting organization’s comparable
accreditation requirements and
standards. This requirement would
allow CMS to evaluate whether the
accreditation program standards meet or
exceed the applicable Medicare
requirements. We note that an AO for
home infusion therapy suppliers could
set standards that exceed the Medicare
requirements in the accreditation
program it submits to CMS for approval.
However, at a minimum, AOs for home
infusion therapy suppliers would have
to provide evidence that their
accreditation program utilizes standards
and procedures that met or exceeded
applicable Medicare requirements.
Proposed § 488.1010(a)(6) would
require each AO for home infusion
therapy suppliers to provide a detailed
description of its survey process. This
requirement is intended to allow CMS
to gain a better understanding of an
AO’s proposed survey process and
ensure that its survey and enforcement
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
processes are comparable to Medicare’s
health and safety standards (contained
in 42 CFR part 486, subpart I). The
specific type of information to be
provided under this section is set forth
in proposed § 488.1010(a)(6)(i) through
(vii) and includes, but is not limited to,
the following: (1) A detailed description
of the survey process; (2) type and
frequency of surveys performed; (3)
copies of the AO’s survey forms; (4)
documentation that the survey reports
identify the comparable Medicare home
infusion therapy health and safety
requirements for each finding of noncompliance with accreditation
standards; (5) timeline and procedures
for monitoring home infusion therapy
suppliers found to be out of compliance;
(6) process for addressing deficiencies;
and (7) the ability of the AO to conduct
timely review of accreditation
applications.
We propose at § 488.1010(a)(6)(viii) to
require the AOs for home infusion
therapy suppliers to acknowledge, that
as a condition for CMS approval, the AO
agrees to provide CMS with information
extracted from each accreditation onsite
survey, offsite audit or other evaluation
strategy as part of its data submission
required under § 488.1010(a)(21)(ii).
Upon request, the AO must also provide
CMS with a copy of the most recent
accreditation onsite survey, offsite
audit, or other evaluation strategy
together and any other information
related to the survey process as CMS
may require, including, but not limited
to corrective action plans.
Proposed § 488.1010(a)(6)(ix) would
require the AOs for home infusion
therapy suppliers to provide a statement
acknowledging that they will notify
CMS within two business days, using a
CMS specified format, when an
accreditation survey or complaint
investigation identifies the presence of
an immediate jeopardy situation. For
purposes of this section, the term
‘‘immediate jeopardy’’ is defined in
proposed § 488.1005.
We propose at § 488.1010(a)(7) to
require the AOs for home infusion
therapy suppliers to establish
procedures related to performance of
onsite surveys, offsite audits, and other
survey activities. Proposed
§ 488.1010(a)(7)(i) would require the
home infusion therapy AOs that
performs onsite surveys to make sure
that they are unannounced and that they
establish procedures to prevent against
unannounced surveys from becoming
known to the supplier in advance of the
visit. The purpose of unannounced
onsite surveys is to prevent the supplier
from performing significant
preparations for the survey to the extent
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
that their environment would be so
modified that it does not represent the
normal daily operating conditions of the
home infusion therapy supplier’s office.
If a provider is given advanced notice of
a survey, they may attempt to make
extensive preparations for the survey to
the extent that they may attempt to hide
patient safety issues such as a broken or
malfunctioning medication infusion
pump, areas of risk such as infection
control, and ensuring that the patient
receives the correct type and dosage of
medication, poor quality of care such as
failure to properly cleanse the insertion
site before inserting IV access, and
failure to perform periodic IV site care,
or non-compliance that would normally
be present.
Proposed § 488.1010(a)(7)(ii) would
require home infusion therapy AOs that
use offsite audits, or other evaluation
strategies to evaluate the quality of
services provided by a home infusion
therapy supplier, to follow up these
offsite audits with periodic onsite visits.
We believe that it is very important for
the AOs that accredit home infusion
therapy suppliers to follow-up off-site
survey reviews with periodic on-site
visits to ensure that the home infusion
therapy supplier is complying with all
accreditation standards and meeting all
health and safety regulations. The
requirements of this section are
consistent with existing CMS policy
related to the performance of
unannounced surveys specified in
Chapter 2 of the CMS State Operations
Manual (SOM). Chapter 2 of the State
Operations Manual (SOM) applies to
Medicare-certified providers and
suppliers. Our intent for referencing
Chapter 2 of the SOM is to show that the
proposed provisions related to onsite
surveys for home infusion therapy
suppliers are consistent with the
requirements for Medicare-certified
providers and suppliers. Also, it is our
intent is to have consistent regulations
for the approval and oversight of AOs,
to the extent possible, across all AOs.
We propose at § 488.1010(a)(8), to
require an AO for home infusion
therapy suppliers to provide a
description of the criteria for
determining the size and composition of
the onsite survey or offsite audit teams
or teams used for other accreditation
evaluation strategies. These teams
would perform onsite surveys at
individual home infusion therapy
supplier locations, offsite audits, and
any other types of accreditation review
activity that is performed by the AO.
The AO’s criteria should include, but
not be limited to, the following
information:
PO 00000
Frm 00117
Fmt 4701
Sfmt 4702
32455
• The expected number of individual
home infusion therapy supplier
locations to be surveyed using an onsite
survey.
• The expected number of home
infusion therapy suppliers to be
surveyed using off-site audits.
• A description of other types of
accreditation review activities to be
used.
• The reasons for each type of survey
(that is, initial accreditation survey,
reaccreditation survey; and complaint
surveys).
Adherence to the requirements of this
section would help CMS ensure that
each home infusion therapy AO has
established criteria for determining the
appropriate size and composition of its
survey teams. It is important that an AO
assemble survey teams that are large
enough and have the required
knowledge, experience and training to
properly and adequately survey home
infusion therapy suppliers. We believe
that surveys performed by competent,
well trained surveyor teams would
provide CMS with reasonable assurance
that accredited home infusion therapy
suppliers meet or exceed the applicable
quality standards.
We propose at § 488.1010(a)(9) to
require that an AO for home infusion
therapy suppliers provide CMS with
information regarding the overall
adequacy of the number of surveyors,
auditors, and other staff available to
perform all survey related activities.
Under this section, the home infusion
therapy AO would also be required to
provide an explanation as to how it
would maintain an adequate number of
trained surveyors on staff. The home
infusion therapy AO must also describe
its ability to increase the size of survey,
audit, and other survey program staff to
match growth in the number of
accredited home infusion therapy
suppliers while maintaining reaccreditation intervals for existing
accredited home infusion therapy
suppliers. The intent of these proposed
requirements is to ensure that AOs for
home infusion therapy suppliers
maintain sufficient staffing levels over
time which would enable them to meet
the needs of their clients and also
perform timely and accurate surveys.
We recognize that within a given
accreditation program, there can be
variations in the size and complexity of
individual home infusion therapy
suppliers. Therefore, we believe that
adding a regulatory requirement to
specify a uniform size and composition
of an AO survey teams would not be
appropriate.
We propose at § 488.1010(a)(10) to
require that an AO for home infusion
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32456
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
therapy suppliers provide CMS with
detailed information about the
individuals who perform survey
activities, including onsite surveys,
offsite audits and other review
processes, for the purpose of ensuring
accredited home infusion therapy
suppliers maintain adherence to the
accreditation program requirements.
More specifically, proposed
§ 488.1010(a)(10)(i) would require the
AOs to furnish information about the
numbers of professional and technical
staff available for accreditation related
activities, as well as the educational
background and experience
requirements for its surveyors, auditors
and reviewers. Proposed
§ 488.1010(a)(10)(ii) would require the
AO to provide information about the
educational, past experience and
employment requirements surveyors
must meet. Proposed
§ 488.1010(a)(10)(iii) would require the
AO to provide information about the
content and length of the orientation
program for newly hired surveyors,
auditors and reviewers.
These requirements would help
ensure that AOs for home infusion
therapy suppliers hires survey team staff
members that possess the requisite
knowledge, expertise, training, and
experience specific to home infusion
therapy suppliers. We believe it is
imperative that surveys be performed by
properly educated and trained staff in
order to be valid and accurate. This
proposed section is also intended to
help ensure that the home infusion
therapy AO maintains an adequate
number of properly trained surveyors so
that it would be able to meet the
demand for all surveys, both initial and
re-accreditation, to be performed for all
clients.
We propose at § 488.1010(a)(11) to
require each AO for home infusion
therapy suppliers to describe the
content, frequency and types of inservice training provided to survey and
audit personnel. This requirement
would help ensure that AO personnel
who perform surveys, audits and other
review-related activities maintain the
skills and knowledge necessary to
perform their work with competency.
We believe that surveys performed by
competent, well trained surveyor teams
would provide CMS with reasonable
assurance that accredited home infusion
therapy suppliers meet or exceed the
applicable quality standards.
We propose at § 488.1010(a)(12) to
require AOs for home infusion therapy
suppliers to provide documentation
which describes the evaluation systems
used to monitor the performance of
individual surveyors, survey teams, and
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
staff that perform audit activities. This
proposed requirement would provide
CMS with insight into how each home
infusion therapy AO measures the
performance of their surveyors, survey
teams and staff that perform audit
activities. This requirement would
provide CMS with the ability to assess
whether an AO has a credible process
for ongoing evaluations of its surveyors,
survey teams, and staff that perform
audit activities.
We believe that the performance
evaluation of a home infusion therapy
AO’s surveyors, survey team and other
staff that perform survey and audit
activities can have a significant impact
on the effectiveness of the home
infusion therapy AO’s survey processes.
We propose at § 488.1010(a)(13) to
require the AO for home infusion
therapy suppliers to provide the
organization’s policies and procedures
for avoiding and handling conflicts of
interest, including the appearance of
conflicts of interest, involving
individuals who conduct surveys,
audits or participate in accreditation
decisions. This proposed provision
would help CMS to determine if home
infusion therapy AO has policies to
avoid potential conflicts of interest that
could undermine the integrity of its
accreditation program.
We propose at § 488.1010(a)(14) to
require the AO for home infusion
therapy suppliers to provide CMS with
documentation of its policies and
procedures for handling disputes filed
by a home infusion therapy supplier
regarding survey or audit findings, or an
adverse decision. The intent of this
proposed section is to ensure that a
home infusion therapy AO has
procedures in place to ensure that those
suppliers who wish to dispute the AO’s
survey findings or appeal an adverse
decision are provided with notice of
their organizational and statutory appeal
rights.
We propose at § 488.1010(a)(15) to
require that home infusion therapy AOs
provide CMS with copies of the policies
and procedures to be used when an
accredited home infusion therapy
supplier either—(1) removes or ceases
furnishing services for which they are
accredited; or (2) adds home infusion
therapy services for which they are not
accredited. This proposed requirement
would ensure there is timely
communication between the accredited
home infusion therapy supplier and the
AO, when changes in the supplier’s
circumstances occur that would have an
impact on the status of their
accreditation.
We propose at § 488.1010(a)(16) to
require the home infusion therapy AOs
PO 00000
Frm 00118
Fmt 4701
Sfmt 4702
to provide CMS with the organization’s
policies and procedures for responding
to and investigating complaints and
grievances against accredited suppliers.
These policies and procedures should
include a specific procedure for
coordinating with and making referrals,
when applicable, to the appropriate
licensing bodies, ombudsman’s offices
and CMS. It is our intent that each CMSapproved home infusion therapy AO
has policies and procedures in place for
handling complaints and grievances. We
believe it is important that any
complaints against an accredited home
infusion therapy supplier be
investigated promptly and fairly. It is
also important that the appropriate
referrals be made when necessary.
We propose at § 488.1010(a)(17) to
require that the home infusion therapy
AOs furnish a description of the AO’s
accreditation status decision-making
process. Proposed § 488.1010(a)(17)(i)
would require the organization to
furnish its process for addressing a
home infusion therapy supplier
deficiencies with meeting accreditation
program requirements. This section
would also require the home infusion
therapy AO to provide a description of
the procedures used to monitor the
correction of deficiencies identified
during the accreditation survey and
audit process. It is important for CMS to
ensure that the home infusion therapy
AOs are properly addressing the home
infusion therapy supplier’s deficiencies
and requiring appropriate corrective
action.
We propose at § 488.1010(a)(17)(ii) to
require that the home infusion therapy
AOs furnish a description of all types
and categories of accreditation decisions
associated with the program, including
the duration of each of the
organization’s accreditation decisions.
Proposed § 488.1010(a)(17)(iii) would
require the home infusion therapy AO
to provide information about its
procedures for the granting, withholding
or removal of accreditation status for
home infusion therapy suppliers that
fail to meet the AO’s standards or
requirements. This proposed section
would also require the home infusion
therapy AO to identify the procedures
related to assignment of less than full
accreditation status or other actions
taken by the home infusion therapy AO
in response to non-compliance with its
standards and requirements. Since the
granting of full or less than full
accreditation status is an essential
component of a home infusion therapy
AO’s accreditation decision process, we
believe that it is necessary for CMS to
receive information on the policies and
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
procedures pertaining to these types of
decisions as well.
We propose at § 488.1010(a)(17)(iv) to
require the home infusion therapy AO
to furnish a statement acknowledging
that the organization agrees to notify
CMS (in a manner specified by CMS in
subregulatory guidance) of any decision
to revoke or terminate, withdraw, or
revise the accreditation status of a home
infusion therapy supplier within 3
business days from the date the
organization takes an action.
‘‘Revocation’’ or ‘‘termination’’
represents an involuntary cessation of a
home infusion therapy supplier’s
accreditation. A revocation or
termination of accreditation could
include an action taken when a home
infusion therapy AO concludes that a
home infusion therapy supplier is
substantially non-compliant with
accreditation standards and has not
corrected its deficient practices within
the timeframe specified by the home
infusion therapy AO. A home infusion
therapy AO could also revoke or
terminate a home infusion therapy
supplier’s accreditation due to the nonpayment of accreditation fees. We
define the term ‘‘revised’’ accreditation
status as a change in the accreditation
status of a home infusion therapy
supplier based on the formal
accreditation status categories used by a
home infusion therapy AO. These
changes could include adverse changes
that fall short of revocation, as well as
positive changes reflecting improved
compliance. This is in contrast to a
‘‘withdrawal’’ which is a voluntary
decision on the part of the home
infusion therapy supplier to end its
participation in the AO’s accreditation
program.
Our intent with this proposed
requirement is to require that home
infusion therapy AOs notify CMS when
they have taken a final action
concerning a change in the accreditation
status of a home infusion therapy
supplier. If a home infusion therapy
supplier has filed a request for an
administrative appeal of the AO’s
decision to revoke or terminate
accreditation, the action on the part of
the home infusion therapy AO to revoke
or terminate accreditation cannot be
finalized until after the conclusion of
the administrative appeals process. In
this case, the home infusion therapy AO
would be required to send notice of
their final action to CMS no later than
three business days after that appeals
process has concluded and a final AO
determination has been made.
We propose at § 488.1010(a)(18) to
require a home infusion therapy AOs to
provide CMS with a list of all home
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
infusion therapy suppliers currently
accredited by that home infusion
therapy AO. This list must include the
type and category of accreditation held
by each home infusion therapy supplier
and the expiration date of each
supplier’s current accreditation.
We propose at § 488.1010(a)(19) to
require that the home infusion therapy
AOs provide CMS with a schedule of all
survey activity (including but not
limited to onsite surveys, offsite audits
and other types if survey strategies),
expected to be conducted by the home
infusion therapy AO during the 6-month
period following submission of the
application. This proposed requirement
would apply to both initial and renewal
applications. Under this proposed
section, the home infusion therapy AO
would be required to provide us with its
survey activity schedule for the 6-month
period following submission of their
application for approval to survey and
accredit home infusion therapy
suppliers. We would use the survey
schedule to plan our survey observation
as part of our review of the home
infusion therapy AO’s application.
We propose at § 488.1010(a)(20) to
require that the home infusion therapy
AO submit a written statement or
document that demonstrates the
organization’s ability to furnish CMS
with the electronic data the home
infusion therapy AO must report to
CMS as required by proposed
§ 488.1035. The information and data to
be provided under this section would
assist us in providing effective oversight
of the approved home infusion therapy
accreditation programs. This
information is necessary for effective
assessment and validation of the home
infusion therapy AO’s survey process.
These proposed regulations will
require the AO to submit documentation
to CMS on a periodic basis. The intent
of this requirement is to ensure that the
AO is able to provide CMS with the
required data electronically. CMS is
cutting down of the use of printed
documents and maximizing the use of
electronic document storage.
We propose at § 488.1010(a)(21) to
require that the home infusion therapy
AO provide a description of the
organization’s data management and
analysis system with respect to its
surveys and accreditation decisions.
Proposed § 488.1010(a)(21)(i) would
require the home infusion therapy AO
to furnish a detailed description of how
the home infusion therapy AO uses its
data to assure compliance of its home
infusion therapy accreditation program
with the corresponding Medicare
requirements.
PO 00000
Frm 00119
Fmt 4701
Sfmt 4702
32457
We propose at § 488.1010(a)(21)(ii) to
require the home infusion therapy AO
to submit a written statement in which
the home infusion therapy AO
acknowledges that it agrees to submit
timely, accurate, and complete data,
which CMS determines necessary for
evaluation of the home infusion therapy
AO’s performance, and which would
not be unduly burdensome to submit.
The data to be submitted, according to
proposed § 488.1010(a)(21)(ii)(B) would
include, accredited home infusion
therapy supplier identifying
information, survey findings, quality
measures, and notices of accreditation
decisions. The home infusion therapy
AO would further agree to submit the
necessary data according to the
instructions and timeframes CMS
specifies through subregulatory
guidance.
This data would allow CMS to obtain
information about how the home
infusion therapy AO would use its data
management systems to meet or exceed
Medicare home infusion therapy
accreditation requirements as set forth
in this subpart. The proposed data
would also assist us in providing
effective oversight of the approved
home infusion therapy accreditation
program.
We propose at § 488.1010(a)(22) to
require the home infusion therapy AO
to furnish the three most recent annual
audited financial statements from their
organization. The purpose of this
proposed requirement would be to
verify that the home infusion therapy
AO’s staffing, funding, and other
resources are adequate to perform the
required surveys, audits and related
activities in order to maintain the home
infusion therapy accreditation program
on a national basis. This requirement is
also intended to insure that a home
infusion therapy AO has the financial
stability to ensure ongoing, stable
operations and longevity.
Proposed § 488.1010(a)(23) would
require the home infusion therapy AOs
to provide a written statement, in which
the home infusion therapy AO
acknowledges, as a condition for
approval, that the organization agrees to
the items set forth in § 488.1010(a)(23)(i)
through (vi).
Proposed § 488.1010(a)(23)(i) would
require the home infusion therapy AO
to provide a written statement
acknowledging that, as a condition for
approval, that if the home infusion
therapy AO decides to voluntarily
terminate its accreditation program, the
home infusion therapy AO must provide
written notification to CMS and all
home infusion therapy suppliers
accredited by that AO. This written
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32458
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
notice must be provided at least 90
calendar days in advance of the effective
date of the home infusion therapy AOs
decision to voluntarily terminate its
CMS-approved accreditation program.
This notice must contain the all of
following information:
• Notice that the home infusion
therapy AO is voluntarily terminating
its home infusion therapy accreditation
program.
• The effective date of the
termination.
• The implications for the home
infusion therapy supplier’s payment
status once their current term of
accreditation expires in accordance with
the requirements set forth at
§ 488.1045(a).
Proposed § 488.1010(a)(23)(ii) would
require the home infusion therapy AO
to provide a written statement
acknowledging that, as a condition for
approval, that, a home infusion therapy
AO must provide written notification of
an involuntary withdrawal of CMS
approval of its home infusion therapy
accreditation program to all its
accredited home infusion therapy
suppliers. This written notice must be
provided by the home infusion therapy
AO to all of its accredited home
infusion therapy suppliers no later than
30 calendar days after the public notice
is published in the Federal Register
announcing that CMS is withdrawing its
approval of the accreditation program in
accordance with the requirements at
§ 488.1045(b). This Federal Register
notice must state the implications for
the providers’ or suppliers’ payment
status once their current term of
accreditation expires. Home infusion
therapy suppliers would no longer be
eligible to receive Medicare payments
upon expiration of the current term of
accreditation. Therefore, it is critical
that the home infusion therapy supplier
seek accreditation immediately through
another CMS-approved home infusion
therapy accreditor.
Proposed § 488.1010(a)(23)(ii)(A)
would require the home infusion
therapy AO to acknowledge that they
must send a second written notification,
as a reminder to all accredited home
infusion therapy suppliers within ten
calendar days of the organization’s
removal from the list of CMS-designated
home infusion therapy AOs. We believe
that this second reminder to the
accredited home infusion therapy
suppliers who are in danger of having
a lapse of accreditation is very
important. This notice would remind
the home infusion therapy suppliers
that they must seek another home
infusion therapy accreditor to avoid a
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
lapse in accreditation, and subsequently
a lapse in Medicare payment.
Proposed § 488.1010(a)(23)(ii)(B)
would require the home infusion
therapy AO to acknowledge that they
will notify CMS, in writing, (either
electronically or in hard copy format)
within 2 business days of identification
of an immediate jeopardy situation that
has been identified in any accredited
home infusion therapy supplier. An
immediate jeopardy situation is
presented when a provider or supplier
exhibits a deficiency hat poses serious
risk of harm or death to the home
infusion therapy supplier’s patients,
staff or visitors, or poses a hazard to the
general public. Immediate jeopardy
situations are of such a serious nature
that it is important that they be
identified and removed as quickly as
possible. We propose the 2-day
notification requirement because CMS
must notified of immediate jeopardy
situations as quickly as possible so that
we can monitor these serious situations
and take action as appropriate.
We propose at § 488.1010(a)(23)(iii) to
require the home infusion therapy AO
to provide CMS with an annual
summary of accreditation activity data
and trends, including, but not limited
to, deficiencies, complaints,
terminations, withdrawals, denials,
accreditation decisions, and other
survey related activities as specified by
CMS. We believe that it is important for
CMS to monitor this information as part
of our oversight of the home infusion
therapy AOs performance.
Proposed § 488.1010(a)(23)(iv), would
require a home infusion therapy AO to
work collaboratively with CMS in the
event that CMS terminates the home
infusion therapy AO’s approved status,
to direct its accredited home infusion
therapy suppliers to the remaining
CMS-approved home infusion therapy
AOs within a reasonable period of time.
We would require the terminated home
infusion therapy AO to perform this task
because its accredited home infusion
therapy suppliers would be left with no
accreditation as a result of the
termination of the home infusion
therapy AOs CMS-approval. Therefore,
we believe that the terminated home
infusion therapy AO has some
responsibility to help their accredited
home infusion therapy suppliers seek
alternative accreditors as soon as
possible.
Proposed § 488.1010(a)(23)(v), would
require the home infusion therapy AOs
to notify CMS of any significant
proposed changes in its CMS-approved
accreditation program requirements or
survey process. Under this section, the
home infusion therapy AO would be
PO 00000
Frm 00120
Fmt 4701
Sfmt 4702
required to submit their notice of
revised program requirements or
changes in the survey process to CMS in
writing no less than 60 days in advance
of the proposed implementation date.
As required by proposed
§ 488.1030(c)(1), the home infusion
therapy AO would be required to agree
not to implement the proposed changes
without prior written notice of
continued program approval from CMS,
except as provided for at
§ 488.1030(c)(4).
Proposed § 488.1010(a)(23)(vi), would
require the home infusion therapy AOs
to provide a statement acknowledging
that if they receive a written notice from
CMS which states that there has been a
change in the applicable Medicare home
infusion therapy substantive health and
safety requirements, the home infusion
therapy AO must provide CMS with
proposed corresponding changes in the
home infusion therapy accreditation
requirements for its CMS-approved
home infusion therapy accreditation
program. This requirement is intended
to ensure that the AO’s accreditation
standards continue to meet or exceed
those of Medicare, and that the AO’s
survey process remains comparable
with that of Medicare.
Section 488.1010(a)(23)(vi) provides
that in the event that CMS makes a
change in the applicable home infusion
therapy accreditation requirements, the
home infusion therapy AO must comply
with several requirements. First,
proposed § 488.1010(a)(23)(vi)(A) would
require the home infusion therapy AO
to submit its responsive proposed
changes in their accreditation
requirements and survey processes to
CMS within 30 calendar days of the date
of the written CMS notice to the home
infusion therapy AO or by a date
specified in the notice, whichever is
later. However, CMS will give due
consideration to a home infusion
therapy AO’s request for an extension of
the deadline as long as it is submitted
prior to the due date. Second, proposed
§ 488.1010(a)(23)(vi)(B) would require
that the home infusion therapy AO not
implement its proposed responsive
changes without prior written notice of
continued program approval from CMS,
except as provided for at
§ 488.1030(b)(1)(v).
Proposed § 488.1010(a)(24) would
require the home infusion therapy AOs
to provide CMS with a listing of the
organization’s proposed fees for home
infusion therapy accreditation. The
home infusion therapy AO must notify
CMS of any plans for reducing the
burden and cost of accreditation to
small or rural home infusion therapy
suppliers. While CMS does not
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
undertake to set or regulate the fees
charges by a home infusion therapy AO,
we do review fees charged by AOs to
determine whether they are reasonable
as directed by sections 1834(u)(5)(A)(iii)
of the Act.
Proposed § 488.1010(b) would require
home infusion therapy AOs to agree to
submit any additional information,
documentation, or attestations,
including items not previously listed
that CMS may deem necessary to make
a determination for approval or denial
of the home infusion therapy AO’s
application. Should we require this
additional information, we would notify
the home infusion therapy AO of the
request and provide the home infusion
therapy AO with a reasonable timeframe
to submit the requested information.
We propose at § 488.1010(c) to allow
a home infusion therapy AO to
withdraw its initial application for
CMS’s approval of its home infusion
therapy accreditation program at any
time before we publish the final Federal
Register notice described at
§ 488.1020(b). The intent of this
provision is to provide home infusion
therapy AOs that have encountered
difficulty meeting the requirements
described at § 488.1010(a) during the
application process with the option to
voluntarily withdraw their application
before CMS publishes the final decision
in the Federal Register as required by
proposed § 488.1020(b). Proposed
§ 488.1020(b) would require that the
final notice, published by CMS, specify
the basis for our decision. Because the
Federal Register is a public forum, we
believe it is likely that home infusion
therapy AOs would choose to
voluntarily withdraw their application
instead of having information about the
non-compliance of their home infusion
therapy accreditation program made
publicly available. This may be
especially true for those home infusion
therapy AOs that wish to reapply for
approval of their accreditation program
in the future. A voluntary withdrawal of
an application by the home infusion
therapy AO would terminate the
application review process prior to
publication of the final decision in the
Federal Register.
Proposed § 488.1010(d) would require
CMS to complete its review of an
application submitted by a home
infusion therapy AO within 210
calendar days from the date that CMS
determines that the application is
complete. We propose that to determine
completeness, each application would
be assigned to a technical review team
upon receipt by CMS. This team would
perform a completeness review to
determine if the application contains all
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
documents and supplemental
information required by proposed
§ 488.1010(a). Lastly, we propose that if
the application is not complete, the
review team would contact the home
infusion therapy AO and request that
they submit any missing information or
documents in accordance with
§ 488.1010(b).
We seek public comment on the
proposal related to the proposed
application requirements set forth in
proposed § 488.1010. We further seek
comments on the burden related to the
requirements of the application
procedure.
(4) Resubmitting a Request (§ 488.1015)
Proposed § 488.1015(a) would require
that except as provided in paragraph (b),
a home infusion therapy AO whose
request for CMS’s approval or reapproval of a home infusion therapy
accreditation program was denied, or an
organization that has voluntarily
withdrawn an initial application, could
resubmit its application if the
organization had: (1) Revised its
accreditation program to address the
issues related to the denial of its
previous request or its voluntary
withdrawal; and (2) resubmitted the
application in its entirety.
Proposed § 488.1015(b) would
provide that a home infusion therapy
AO that had asked for reconsideration of
an application denial by CMS could not
submit a new application until the
pending reconsideration was
administratively final. This provision
would ensure that review of
accreditation matters on reconsideration
are pending before only one
administrative agency and one
administrative level at a time.
We seek public comments on the
requirements of proposed § 488.1015.
(5) Public Notice and Comment
(§ 488.1020)
Proposed § 488.1020(a) would require
CMS to publish a notice in the Federal
Register upon receipt of a complete
application package. The notice would
identify the organization, the type of
home infusion therapy suppliers
covered by the accreditation program,
and provides for at least a 30-day public
comment period (which begins on the
date of publication of the Federal
Register notice). The purpose of the
Federal Register notice is to notify the
public that a national AO has filed an
application for approval of a home
infusion therapy accreditation program
and to seek public comment in response
to this application. The requirement for
the publication of a notice in the
Federal Register when an application is
PO 00000
Frm 00121
Fmt 4701
Sfmt 4702
32459
received is an existing regulatory
procedural requirement for all other AO
types. We have added this requirement
to the home infusion therapy AO
approval and oversight regulations for
consistency.
Proposed § 488.1020(b) would require
that when CMS approves or re-approves
an application for approval of a home
infusion therapy AO’s accreditation
program, a final notice would be
published in the Federal Register. This
notice would have to specify the basis
for CMS’ decision. Proposed
§ 488.1020(b)(1), would require that our
final notice include at a minimum, the
following information: (1) How the
accreditation program met or exceeded
Medicare accreditation program
requirements; (2) the effective date of
the CMS approval, which is not later
than the publication date of the notice;
and (3) the term of the approval (6 years
or less).
If CMS makes a decision to
disapprove a home infusion therapy
AOs application, our final notice would
state the deficiencies found in the
application and the reason why the AOs
accreditation program did not met or
exceeded Medicare accreditation
program requirements. However, an AO
has the option of voluntarily
withdrawing its application at any time
up until the publication of the final
notice.
We propose at § 488.1020(b)(2) that if
CMS did not approve a home infusion
therapy AO’s application for approval of
its home infusion therapy accreditation
program, the final notice would explain
how the home infusion therapy AO
failed to meet Medicare home infusion
therapy accreditation program
requirements. This notice would
indicate the effective date of the
decision.
We seek comment on the
requirements of proposed § 488.1020,
including on the appropriate term for
approval of an AO.
(6) Release and Use of Accreditation
Surveys (§ 488.1025)
Proposed § 488.1025 would require a
home infusion therapy AO to include,
in its accreditation agreement with each
home infusion therapy supplier, an
acknowledgement that the home
infusion therapy supplier agrees to
release to CMS a copy of its most
current accreditation survey and any
information related to the survey that
CMS may require, including the home
infusion therapy supplier’s corrective
action plans. Proposed § 488.1025(a)
would provide that CMS may determine
that a home infusion therapy supplier
does not meet the applicable Medicare
E:\FR\FM\12JYP2.SGM
12JYP2
32460
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
conditions or requirements on the basis
of its own investigation of the
accreditation survey or any other
information related to the survey.
Proposed § 488.1025(b) would
prohibit CMS from disclosing home
infusion therapy survey reports or
survey related information according to
section 1865(b) of the Act. However,
CMS would be permitted to publically
disclose an accreditation survey and
information related to the survey, upon
written request, to the extent that the
accreditation survey and survey
information is related to an enforcement
action taken by CMS.
CMS would use the home infusion
therapy supplier accreditation survey
information for purposes such as: (1)
Confirmation of the home infusion
therapy supplier’s eligibility for
Medicare participation; (2) to review
and approve the home infusion therapy
AO’s recommendations regarding
accreditation; (3) to review the home
infusion therapy AO’s investigations of
complaints; and (4) to review the
corrective action taken by the AO when
deficiencies are found on survey.
We seek public comments on the
requirements of proposed § 488.1025.
(7) Ongoing Review of Accrediting
Organizations (§ 488.1030)
Proposed § 488.1030 would clarify
that a formal accreditation program
review could be opened on an ongoing
basis. Specifically, this section would
describe standardized requirements
related to the ongoing federal review of
home infusion therapy AOs and their
approved accreditation programs. This
proposed section would clarify that
CMS oversight of accreditation
programs is consistent across home
infusion therapy AOs. We are
committed to treating all home infusion
therapy AOs subject to our oversight in
the same manner. Under proposed
§ 488.1030, we could conduct the
following three types of reviews of an
AOs home infusion therapy
accreditation programs: (1) Performance
review; (2) comparability review; and
(3) CMS-approved accreditation
program review.
Proposed § 488.1030(a) would allow
CMS to perform a performance review,
in which we would evaluate the
performance of each CMS-approved
home infusion therapy accreditation
program on an ongoing basis.
Specifically, we would review the
following aspects of a home infusion
therapy AO’s for home infusion therapy
program performance: The
organization’s survey activity, and the
organization’s continued fulfillment of
the requirements stated in § 488.1010.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
Proposed § 488.1030(b) would allow
CMS to perform a comparability review
to assess the equivalency of a home
infusion therapy AO’s CMS-approved
home infusion therapy accreditation
program requirements with comparable
Medicare home infusion therapy
accreditation requirements. Proposed
§ 488.1030(b)(1) would allow CMS to
perform a comparability review when
CMS imposes new or revised Medicare
accreditation requirements. When this
occurs, proposed § 488.1030(b)(1) would
require CMS to provide written notice to
the home infusion therapy AOs when
changes have been made to the
Medicare home infusion therapy
accreditation requirements. Proposed
§ 488.1030(b)(2) would require the home
infusion therapy accrediting
organization to make revision to its
home infusion therapy accreditation
standards or survey process so as to
incorporate the new or revised Medicare
accreditation requirements.
Proposed § 488.1030(b)(3) would
further require that the written notice
sent by CMS to the home infusion
therapy AO specify a deadline (not less
than 30 days) by which the home
infusion therapy AO must prepare and
submit their proposed home infusion
therapy accreditation program
requirement revisions and the
timeframe for implementation. Proposed
§ 488.1030(b)(4) would allow a home
infusion therapy AO to submit a written
request for an extension of the
submission deadline as long as this
request was submitted prior to the
original deadline.
Proposed at § 488.1030(b)(5) would
require that, after completing the
comparability review, CMS would
provide written notification to the home
infusion therapy AO, specifying
whether or not their revised home
infusion therapy accreditation program
standards continued to meet or exceed
all applicable Medicare requirements.
We propose at § 488.1030(b)(6) that if,
no later than 60 days after receipt of the
home infusion therapy AO’s proposed
accreditation standard changes, CMS
did not provide the written notice to the
home infusion therapy AO, then the
revised home infusion therapy program
accreditation standards would be
deemed to meet or exceed all applicable
Medicare requirement and the
accreditation program would have
continued CMS-approval without
further review or consideration.
Proposed § 488.1030(b)(7) would
provide that if a home infusion therapy
AO was required to submit a new
application because CMS imposed new
regulations or made significant
substantive revisions to the existing
PO 00000
Frm 00122
Fmt 4701
Sfmt 4702
regulations, CMS would provide notice
of the decision to approve or disapprove
the application within the time period
specified in § 488.1010(d).
We propose at § 488.1030(b)(8) that if
a home infusion therapy AO failed to
submit its proposed changes within the
required timeframe, or failed to
implement the proposed changes that
had been determined by CMS to be
comparable, CMS could open an
accreditation program review in
accordance with § 488.1030(d).
When a home infusion therapy AO
proposes to adopt new home infusion
therapy accreditation standards or
changes, in its survey process, we
propose at § 488.1030(c)(1) to require
the home infusion therapy AO to
provide notice to CMS no less than 60
days prior to the planned
implementation date of the proposed
changes. Proposed § 488.1030(c)(2)
would prohibit the home infusion
therapy AO from implementing these
changes before receiving CMS’ approval
except as provided in § 488.1030(c)(4).
Proposed § 488.1030(c)(3) would require
that this written notice contain a
detailed description of the changes to be
made to the organization’s home
infusion therapy accreditation
standards, including a detailed
crosswalk (in table format) that states
the exact language of the revised
accreditation requirements and the
corresponding Medicare requirements
for each. The requirements of
§§ 488.1030(c)(2) and 488.10(c)(3)
would ensure that the home infusion
therapy AO provides CMS with advance
notice of any proposed changes to their
home infusion therapy accreditation
requirements and survey processes. This
notice would allow CMS time to review
these proposed changes to ensure that
the revised home infusion therapy
accreditation standards and survey
processes continue to meet or exceed all
applicable Medicare home infusion
therapy requirements and continue to be
comparable to all applicable Medicare
home infusion therapy survey
processes, and provide a response to the
home infusion therapy AO. This section
would also prohibit home infusion
therapy AOs from implementing any of
the proposed changes in their home
infusion therapy accreditation
requirements and survey processes,
until CMS approval has been received.
We seek comment on this proposal.
Proposed § 488.1030(c)(4) would
require CMS to provide written notice to
the home infusion therapy accrediting
organization indicating whether the
home infusion therapy accreditation
program, including the proposed
revisions, continued or does not
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
continue to meet or exceed all
applicable Medicare home infusion
therapy requirements. If CMS found that
the accrediting organization’s home
infusion therapy accreditation program,
including the proposed revisions did
not continue to meet or exceed all
applicable Medicare home infusion
therapy requirements. CMS would have
to state the reasons for these findings.
Proposed § 488.1030(c)(5) would
require CMS to provide this written
notice to the home infusion therapy AO
by the 60th calendar day following
receipt of the home infusion therapy
AO’s written proposed changes as to
whether the home infusion therapy
AO’s revised home infusion therapy
accreditation program standards and
survey processes have been be deemed
to meet or exceed all applicable
Medicare home infusion therapy
requirements and have continued CMS
approval without further review or
consideration. This proposed section
would further specify that if CMS failed
to provide the required written notice to
the home infusion therapy AO by the 60
day deadline, the home infusion therapy
AO’s revised accreditation program
standards would be deemed to meet or
exceed all applicable Medicare
requirements and have continued CMS
approval without further review or
consideration.
Proposed § 488.1030(c)(5) would
permit CMS to open an accreditation
program review, in accordance with
proposed § 488.1030(d), if a home
infusion therapy AO implemented
changes to their home infusion therapy
accreditation requirements or survey
process that were not determined nor
deemed by CMS to be comparable to the
applicable Medicare requirements.
We propose at § 488.1030(d) to permit
CMS to initiate an accreditation
program review when a comparability
or performance review reveals evidence
that a home infusion therapy AO’s
CMS–approved home infusion therapy
accreditation program is in substantial
non-compliance with the requirements
of the proposed home infusion therapy
health and safety regulations contained
in 42 CFR part 486, subpart B. Proposed
§ 488.1030(d)(1) would require CMS to
provide written notice to the home
infusion therapy AO when a home
infusion therapy accreditation program
review is initiated. Proposed
§ 488.1030(d)(1)(i) through (iv) would
set forth the requirements for this
written notice, which should contain
the following information: (i) A
statement of the instances, rates or
patterns of non-compliance identified,
as well as other related information, if
applicable; (ii) a description of the
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
process to be followed during the
review, including a description of the
opportunities for the home infusion
therapy AO to offer factual information
related to CMS’ findings; (iii) a
description of the possible actions that
may be imposed by CMS based on the
findings of the accreditation program
review; and, (iv) the actions the home
infusion therapy AO would have to take
to address the identified deficiencies,
and the length of the accreditation
program review probation period, which
will include monitoring of the home
infusion therapy AO’s performance and
implementation of the corrective action
plan. The probation period is not to
exceed 180 calendar days from the date
that CMS has approved the home
infusion therapy AOs plan of correction
(which is the AO written plan for
correcting any deficiencies in its home
infusion therapy accreditation program
that were found by CMS on a program
review).
At § 488.1030(d)(2), we propose that
CMS would review and approve the
home infusion therapy AO’s plan of
correction for acceptability within 30
days after receipt. Proposed
§ 488.1030(d)(3) would provide that
CMS will monitor the implementation
of the home infusion therapy
accrediting organization’s plan of
correction for a period not to exceed 180
days from the date of approval. During
the 180-day review period, CMS would
monitor implementation of the accepted
plan of correction as well as progress
towards correction of identified issues
and areas of non-compliance that
triggered the accreditation program
review.
We propose at § 488.1030(d)(4) to
authorize CMS to place the home
infusion therapy AO’s CMS-approved
accreditation program on probation for
a subsequent period of up to 180
calendar days, if necessary. The
additional period of time may be
necessary if CMS determines, as a result
of the home infusion therapy
accreditation program review or a
review of an application for renewal of
an existing CMS-approved accreditation
program, that the home infusion therapy
AO has failed to meet any of the
requirements of § 488.1010, or has made
significant progress correcting identified
issues or areas of non-compliance, but
requires additional time to complete full
implementation of corrective actions or
demonstrate sustained compliance. If a
home infusion therapy AO’s term of
approval expires before the 180-day
period is completed, the probationary
period will be deemed to end upon the
day of expiration of the home infusion
therapy AO’s term of approval. In the
PO 00000
Frm 00123
Fmt 4701
Sfmt 4702
32461
case of a renewal application where we
have placed the home infusion therapy
accreditation program on probation, we
propose that any approval of the
applications must be conditional while
the program remains on probation.
If we place a home infusion therapy
AO’s accreditation program on
probation, proposed § 488.1030(d)(4)(i)
would require CMS to issue a written
determination to the home infusion
therapy AO, within 60 calendar days
after the end of any probationary period.
The written determination must state
whether or not the CMS-approved home
infusion therapy accreditation program
continued to meet the requirements of
this section and the reasons for the
determination.
If we determined that withdrawal of
approval from a CMS-approved
accreditation program was necessary,
proposed § 488.1030(d)(4)(ii) would
require CMS to send written notice to
the home infusion therapy AO which
contained the following information: (1)
Notice of CMS’ removal of approval of
the home infusion therapy AOs
accreditation program;(2) the reason(s)
for the removal; and (3) the effective
date of the removal determined in
accordance with § 488.1030(d)(4)(ii).
If CMS withdrew the approval of a
home infusion therapy AO accreditation
program, proposed § 488.1030(d)(4)(iii)
would require CMS to publish a notice
of its decision to withdraw approval of
the accreditation program in the Federal
Register. This notice would have to
include the reasons for the withdrawal,
and a notification that the withdrawal
would become effective 60 calendar
days after the date of publication in the
Federal Register. The publication of this
Federal Register Notice is notice would
be necessary to put interested
stakeholders, such as the home infusion
therapy suppliers that are accredited by
the affected AO on notice about the
withdrawal of CMS-approval of their
AO, because this will have an effect on
the status of their accreditation.
Proposed § 488.1030(e) would allow
CMS to immediately withdraw the CMS
approval of an home infusion therapy
AO’s home infusion therapy
accreditation program, if at any time
CMS makes a determination that the
continued approval of that home
infusion therapy accreditation program
poses an immediate jeopardy to the
patients of the entities accredited under
the program; or the continued approval
otherwise constitutes a significant
hazard to the public health. We propose
at § 488.1030(f) to mandate that any
home infusion therapy AO whose CMS
approval of its home infusion therapy
accreditation program has been
E:\FR\FM\12JYP2.SGM
12JYP2
32462
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
withdrawn must notify, in writing, each
of its accredited home infusion therapy
suppliers of the withdrawal of CMS
approval and the implications for the
home infusion therapy suppliers’
payment status no later than 30 calendar
days after the notice is published in the
Federal Register. This requirement
would protect the home infusion
therapy suppliers that have received
their accreditation from a home infusion
therapy AO that has had its CMS
approval of their home infusion therapy
accreditation program removed.
We seek public comments on the
requirements of proposed § 488.1030.
We further seek public comment related
to the burden associated with the
requirements of proposed § 488.1030.
(8) Ongoing Responsibilities of a CMSApproved Accreditation Organization
(§ 488.1035)
Proposed § 488.1035 would require a
home infusion therapy AO to provide
certain information to CMS and carry
out certain activities on an ongoing
basis. More specifically proposed
§ 488.1035(a) would require the home
infusion therapy AO to provide CMS
with all of the following in written
format (either electronic or hard copy):
• Copies of all home infusion therapy
accreditation surveys, together with any
survey-related information that CMS
may require (including corrective action
plans and summaries of findings with
respect to unmet CMS requirements);
• Notice of all home infusion therapy
accreditation decisions.
• Notice of all complaints related to
home infusion therapy suppliers.
• Information about all home infusion
therapy accredited suppliers against
which the home infusion therapy AO
has taken remedial or adverse action,
including revocation, withdrawal, or
revision of the home infusion therapy
supplier’s accreditation.
• Summary data specified by CMS
that relate to the past year’s home
infusion therapy accreditation activities
and trends which is to be provided on
an annual basis.
• Notice of any proposed changes in
its home infusion therapy accreditation
standards or requirements or survey
process.
Proposed § 488.1035(b) would require
a home infusion therapy AO to submit
an acknowledgment of receipt of CMS’
notification of a change in CMS
requirements within 30 days from the
date of the notice. Proposed
§ 488.1035(c) would require that a home
infusion therapy AO permit its
surveyors to serve as witnesses if CMS
takes an adverse action based on
accreditation findings.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
Proposed § 488.1035(d) would require
that within 2 business days of
identifying a deficiency of an accredited
home infusion therapy supplier that
poses immediate jeopardy to a
beneficiary or to the general public, the
home infusion therapy AO must provide
CMS with written notice of the
deficiency and any adverse action
implemented by the home infusion
therapy AO. Proposed § 488.1035(e)
would require that within 10 calendar
days after our notice to a CMS-approved
home infusion therapy AO that CMS
intends to withdraw approval of the
home infusion therapy AO, the home
infusion therapy AO must provide
written notice of the withdrawal to all
of the organization’s accredited home
infusion therapy suppliers.
We seek public comment on the
requirements of proposed § 488.1035.
We further seek public comments
related to the burden associated with
the requirements of proposed
§ 488.1035.
(9) Onsite Observations of Accrediting
Organization Operations (§ 488.1040)
We propose at § 488.1040(a) and (b) to
permit CMS to conduct an onsite
inspection of the home infusion therapy
AOs operations and offices at any time
to verify the organization’s
representations and to assess the
organization’s compliance with its own
policies and procedures. Activities to be
performed by CMS staff during the
onsite inspections may include, but are
not limited to: (1) Interviews with
various home infusion therapy AO staff;
(2) review of documents, and survey
files, audit tools and related records; (3)
observation of meetings concerning the
accreditation process; (4) auditing
meetings concerning the accreditation
process, (5) observation of in-progress
surveys and audits; (6) evaluation of the
home infusion therapy AO’s survey
results and accreditation decisionmaking process.
CMS would perform onsite visits to a
home infusion therapy AOs offices only
for specific reasons. For example, when
an AO had filed an initial or renewal
application for approval of its home
infusion therapy accreditation program,
CMS would perform an onsite visit to
the AOs offices as part of the
application review process. If CMS has
opened a program review and put the
home infusion therapy AO on probation
for a 180 day period, we would perform
an onsite visit to the AOs offices to
check of the AOs progress in
implementing the plan of correction.
If CMS decides to perform on onsite
visit to the home infusion therapy AOs
offices, we would notify the AO. We
PO 00000
Frm 00124
Fmt 4701
Sfmt 4702
would coordinate with the AO staff to
schedule the onsite visit at mutually
agreed upon date and time.
The intended purpose of this section
is to provide CMS with an opportunity
to observe, first hand, the daily
operations of home infusion therapy
AOs and to ensure that the home
infusion therapy accreditation program
is fully implemented and operational as
presented in the written application.
Onsite inspections would strengthen
our continuing oversight of the home
infusion therapy AO performance
because they provide an opportunity for
us to corroborate the verbal and written
information submitted to CMS by the
home infusion therapy AO in their
initial and renewal applications. In
addition, onsite inspections would
allow CMS to assess the home infusion
therapy AO’s compliance with its own
policies and procedures.
We seek public comments on the
requirements of proposed § 488.1040.
We also seek comments regarding the
burden related to § 488.1040.
(10) Voluntary and Involuntary
Termination (§ 488.1045)
The proposed provisions related to
the voluntary and involuntary
termination of CMS approval of a home
infusion therapy AO’s accreditation
program are set out at proposed
§ 488.1045. Proposed § 488.1045(a)
would address voluntary termination of
a home infusion therapy AO’s
accreditation program by the home
infusion therapy AO. A home infusion
therapy AO that decides to voluntarily
terminate its CMS-approved
accreditation program must provide
written notice to CMS and each of its
accredited home infusion therapy
suppliers at least 90 days in advance of
the effective date of the termination.
This written notice must state the
implications for the home infusion
therapy supplier’s payment should there
be a lapse in their accreditation status.
Proposed standard § 488.1045(b)
would address CMS involuntary
termination of a home infusion therapy
AO’s CMS-approved accreditation
program. Once CMS publishes the
notice in the Federal Register
announcing its decision to terminate the
accrediting organization’s home
infusion therapy accreditation program,
the home infusion therapy AO would
have to provide written notification to
all home infusion therapy suppliers
accredited under its CMS-approved
home infusion therapy accreditation
program no later than 30 calendar days
after the notice was published in the
Federal Register. This notice would
state that CMS is withdrawing its
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
approval of the home infusion therapy
AO’s accreditation program and the
implications for their payment, should
there be a lapse in their accreditation
status.
Proposed § 488.1045(c) addresses the
requirements that would apply to both
voluntary and involuntary terminations
of CMS approval of the home infusion
therapy AO. Proposed § 488.1045(c)(1)
would provide that the accreditation
status of affected home infusion therapy
suppliers would be considered to
remain in effect until their current term
of accreditation expired. In the case
where a home infusion therapy AO has
been removed as a CMS-approved AO,
any home infusion therapy supplier that
is accredited by the organization during
the period beginning on the date the
organization was approved by CMS
until the date the organization was
removed, shall be considered accredited
for its remaining accreditation period.
Proposed § 488.1045(c)(2) would
provide that for any home infusion
therapy supplier, whose home infusion
therapy AO’s CMS approval has been
voluntarily or involuntarily terminated
by CMS, and who wishes to continue to
receive reimbursement from Medicare,
must provide written notice to CMS at
least 60-calendar days prior to its
accreditation expiration date which
states that the home infusion therapy
supplier has submitted an application
for accreditation under another CMSapproved home infusion therapy
accreditation program. This section
further states that failure to comply with
this 60-calendar day requirement prior
to expiration of their current
accreditation status could result in a
suspension of payment.
Proposed § 488.1045(c)(3) would
require that the terminated home
infusion therapy AO must provide a
second written notification to all
accredited suppliers ten calendar days
prior to the organization’s accreditation
program effective date of termination.
The proposed notice provisions at
§ 488.1045(c)(2) and (3) could help
prevent home infusion therapy
suppliers from suffering financial
hardship that could result from a denial
of payment of Medicare claims if their
home infusion therapy accreditation
lapses as a result of the voluntary or
involuntary termination of a CMSapproved home infusion therapy AO
program.
We propose at § 488.1045(d), that if a
home infusion therapy supplier requests
a voluntary withdrawal from
accreditation, it will not be possible for
the withdrawal to become effective until
the home infusion therapy AO
completes three required steps. First,
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
the AO would have to contact the home
infusion therapy supplier to seek
written confirmation that the home
infusion therapy supplier intended to
voluntarily withdraw from the
accreditation program. Second, the
home infusion therapy AO would have
to advise home infusion therapy
supplier, in writing, of the statutory
requirement at 1861(iii)(3)(D)(i)(III) of
the Act for requiring accreditation for all
home infusion therapy suppliers. Third,
the home infusion therapy AO would
have to advise the home infusion
therapy supplier of the possible
payment consequence for a lapse in
accreditation status. Proposed
§ 488.1045(d)(3) would require the
home infusion therapy AO to submit
their final notice of the voluntary
withdrawal of accreditation by the home
infusion therapy supplier five business
days after the request for voluntary
withdrawal was ultimately processed
and effective.
We believe that it is important that
the home infusion therapy seek
confirmation that the home infusion
therapy supplier has indeed requested a
voluntary termination of their
accreditation. This confirmation would
prevent the erroneous termination of the
accreditation of a home infusion therapy
supplier that did not request it or had
subsequently withdrawn their request
for voluntary termination.
We believe that it is also important for
the home infusion therapy AO to
provide the required written notice to
the home infusion therapy supplier that
requests a voluntary withdrawal from
accreditation, so that the home infusion
therapy supplier has been fully
informed of the requirements for
accreditation according to section
1861(iii)(3)(D)(i)(III) and the payment
consequences of being unaccredited. If
there is a lapse in the accreditation
status of the home infusion therapy
supplier, they will not be eligible to
receive payment from Medicare for
services furnished to Medicare
beneficiaries. A home infusion therapy
infusion therapy supplier that is
unaware of this payment consequence
could suffer financial hardship due to
furnishing services to Medicare
beneficiaries for which they cannot be
reimbursed after a lapse in
accreditation.
We seek public comments on the
requirements of proposed § 488.1045.
We also seek comments regarding the
burden related to § 488.1045.
(11) Reconsideration (§ 488.1050)
We propose at § 488.1050 to set forth
the appeal process through which a
home infusion therapy AO may request
PO 00000
Frm 00125
Fmt 4701
Sfmt 4702
32463
reconsideration of an unfavorable
decision made by CMS. At proposed
§ 488.1050(b)(1), the home infusion
therapy AO would have to submit a
written request for reconsideration
within 30 calendar days of the receipt
of the CMS notification of an adverse
determination or non-renewal. Proposed
§ 488.1050(b)(2) would require the home
infusion therapy AOs to submit a
written request for reconsideration
which specifies the findings or issues
with which the home infusion therapy
AO disagreed and the reasons for the
disagreement. Proposed § 488.1050(b)(3)
would allow a home infusion therapy
AO to withdraw their request for
reconsideration at any time before the
administrative law judge issues a
decision.
We propose at § 488.1050(c)(1) to
establish requirements for CMS when a
request for reconsideration has been
received from a home infusion therapy
AO. Specifically, CMS would be
required to provide the home infusion
therapy AO with: The opportunity for
an administrative hearing with a hearing
officer appointed by the Administrator
of CMS; the opportunity to present, in
writing and in person, evidence or
documentation to refute CMS’ notice of
denial, termination of approval, or nonrenewal of CMS approval and
designation. Section 488.1050(c)(2)
would require CMS to send the home
infusion therapy AO written notice of
the time and place of the informal
hearing at least 10 business days before
the scheduled hearing date.
We propose at § 488.1050(d)(1) to
establish rules for the administrative
hearing such as who may attend the
hearing on behalf of each party,
including but not limited to legal
counsel, technical advisors, and nontechnical witnesses that have personal
knowledge of the facts of the case. This
proposed section would also specify the
type of evidence that may be introduced
at the hearing. Specifically, we would
specify and clarify, at proposed
§ 488.1050(d)(4), that the hearing officer
would not have the authority to compel
by subpoena the production of
witnesses, papers, or other evidence.
Proposed § 488.1050(d)(5) would
provide that the legal conclusions of the
hearing officer within 45 calendar days
after the close of the hearing. Proposed
§ 488.1050(d)(6) would require the
hearing officer to present his or her
findings and recommendations in a
written report that includes separately
numbered findings of fact. According to
proposed § 488.1050(d)(7), the decision
of the hearing officer would be final.
We seek public comments on the
requirements of proposed § 488.1050.
E:\FR\FM\12JYP2.SGM
12JYP2
32464
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
C. Payment for Home Infusion Therapy
Services
1. Proposed Temporary Transitional
Payment for Home Infusion Therapy
Services for CYs 2019 and 2020
Section 50401 of the BBA of 2018
(Pub. L. 115–123) amended section
1834(u) of the Act by adding a new
paragraph (7) that establishes a home
infusion therapy services temporary
transitional payment for eligible home
infusion suppliers for certain items and
services furnished in coordination with
the furnishing of transitional home
infusion drugs beginning January 1,
2019. This temporary payment covers
the cost of the same items and services,
as defined in section 1861(iii)(2)(A) and
(B) of the Act, and outlined in section
IV.A.2 in this proposed rule, related to
the administration of home infusion
drugs. The temporary transitional
payment would begin on January 1,
2019 and end the day before the full
implementation of the home infusion
therapy benefit on January 1, 2021, as
required by section 5012(d) of the 21st
Century Cures Act.
amozie on DSK3GDR082PROD with PROPOSALS2
a. Transitional Home Infusion Drugs
Section 1834(u)(7)(A)(iii) of the Act
defines the term ‘‘transitional home
infusion drug’’ using the same
definition as ‘home infusion drug’ under
section 1861(iii)(3)(C) of the Act, which
is a drug or biological administered
intravenously, or subcutaneously for an
administration period of 15 minutes or
more, in the home of an individual
through a pump that is an item of DME.
However, section 1834(u)(7)(A)(iii) of
the Act includes an exception to the
definition of ‘home infusion drug’ if the
drug is identified under section
1834(u)(7)(C) of the Act. This provision
specifies the HCPCS codes for the drugs
and biologicals covered under the Local
Coverage Determinations (LCDs) for
External Infusion Pumps. In addition,
subsequent infusion drug additions to
the LCDs and compounded infusion
drugs not otherwise classified, as
identified by HCPCS codes J7799 (Not
otherwise classified drugs, other than
inhalation drugs, administered through
DME) and J7999 (Compounded drug,
not otherwise classified), are also
included in the definition of a
‘transitional home infusion drug.’
b. Infusion Drug Administration
Calendar Day
Section 1834(u)(7)(E)(i) of the Act
states that payment to an eligible home
infusion supplier or qualified home
infusion therapy supplier for an
infusion drug administration calendar
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
day in the individual’s home refers to
payment only for the date on which
professional services, as described in
section 1861(iii)(2) of the Act, were
furnished to administer such drugs to
such individual. This includes all such
drugs administered to such individual
on such day. We believe this to mean
that payment is only for the day on
which the nurse is in the patient’s home
when an infusion drug is being
administered. As section 1861(iii)(2)(A)
of the Act refers to the professional
services, including nursing services, we
believe this to mean skilled services as
set out at 42 CFR 409.32. For the
professional services to be necessary for
the safe and effective administration of
home infusion drugs, they must be
furnished by skilled professionals in
accordance with individual state
practice acts. We understand that there
may be professional services furnished
that do not occur on a day the drug is
being administered. However, payment
for such home infusion therapy services
is built into the single payment for the
day on which the nurse is in the
patient’s home and the drug is being
infused. Accordingly, under section
1834(u)(7)(D) of the Act, the temporary
transitional payment is set equal to 4
hours of infusion in a physician’s office
even though the nurse may be in the
patient’s home for a much shorter
timeframe. In other words, payment is
made only for the day on which the
administration of the infusion drug
occurs even if professional services
were furnished on a different day.
Therefore, we propose to define in
regulation that payment for an infusion
drug administration calendar day is for
the day on which home infusion
therapy services are furnished by skilled
professional(s) in the individual’s home
on the day of infusion drug
administration. The skilled services
provided on such day must be so
inherently complex that they can only
be safely and effectively performed by,
or under the supervision of, professional
or technical personnel. An infusion
drug administration visit that begins in
one calendar day and spans into the
next calendar day would be considered
one visit using the date the visit ended
as the service date. We are soliciting
comment on the proposed definition of
infusion drug administration calendar
day in regulation, as detailed in section
IX of this proposed rule.
c. Eligible Home Infusion Suppliers,
Eligible Individuals, and Relationship to
Home Health
Section 1842(u)(7)(F) of the Act
defines eligible home infusion suppliers
PO 00000
Frm 00126
Fmt 4701
Sfmt 4702
as suppliers that are enrolled in
Medicare as pharmacies that provide
external infusion pumps and external
infusion pump supplies, and that
maintain all pharmacy licensure
requirements in the State in which the
applicable infusion drugs are
administered. This means that existing
DME suppliers that are enrolled as
pharmacies that provide external
infusion pumps and supplies are
considered eligible home infusion
suppliers, as are potential pharmacy
suppliers that enroll and comply with
the Medicare program’s supplier
standards (found at 42 CFR 424.57(c))
and quality standards to become
accredited for furnishing external
infusion pumps and supplies.97 Home
infusion therapy services are furnished
by eligible home infusion suppliers in
the individual’s home to an individual
who is under the care of an applicable
provider and where there is a plan of
care established and periodically
reviewed by a physician prescribing the
type, amount, and duration of infusion
therapy services. In section VI.C.2.f
below, regarding the home infusion
therapy benefit for CY 2021 and
subsequent years, we are soliciting
comments regarding the interaction
between home infusion therapy services
and home health services. However, for
purposes of this proposed temporary
transitional payment for home infusion
therapy services for CYs 2019 and 2020,
we anticipate the relationship between
home infusion therapy and home health
to be as described in section VI.C.2.f of
this proposed rule.
d. Payment Categories
As outlined in section 1834(u)(7)(C) of
the Act, identified HCPCS codes for
transitional home infusion drugs are
assigned to three payment categories for
which a single payment amount will be
established for home infusion therapy
services furnished on each infusion
drug administration calendar day.
Payment category 1 includes antifungals
and antivirals, uninterrupted long-term
infusions, pain management, inotropic,
and chelation drugs. Payment category 2
includes subcutaneous immunotherapy
infusions. Payment category 3 includes
certain chemotherapy drugs. Table 55
provides the complete list of J-codes
associated with the infusion drugs that
97 https://www.cms.gov/Outreach-and-Education/
Medicare-Learning-Network-MLN/MLNProducts/
DMEPOSQuality/DMEPOSQualBooklet905709.html.
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
32465
fall within each of the payment
categories.
TABLE 55—INFUSION DRUG J-CODES ASSOCIATED WITH TEMPORARY TRANSITIONAL PAYMENT CATEGORIES FOR HOME
INFUSION THERAPY SERVICES
J-Code
Drug
Category 1:
J0133 ..................
J0285 ..................
J0287 ..................
J0288 ..................
J0289 ..................
J0895 ..................
J1170 ..................
J1250 ..................
J1265 ..................
J1325 ..................
J1455 ..................
J1457 ..................
J1570 ..................
J2175 ..................
J2260 ..................
J2270 ..................
J2274 ..................
J2278 ..................
J3010 ..................
J3285 ..................
Category 2:
J1555 JB 98 .........
J1559 JB ............
J1561 JB ............
J1562 JB ............
J1569 JB ............
J1575 JB ............
Category 3:
J9000 ..................
J9039 ..................
J9040 ..................
J9065 ..................
J9100 ..................
J9190 ..................
J9200 ..................
J9360 ..................
J9370 ..................
Injection,
Injection,
Injection,
Injection,
Injection,
Injection,
Injection,
Injection,
Injection,
Injection,
Injection,
Injection,
Injection,
Injection,
Injection,
Injection,
Injection,
Injection,
Injection,
Injection,
acyclovir, 5 mg.
amphotericin b, 50 mg.
amphotericin b lipid complex, 10 mg.
amphotericin b cholesteryl sulfate complex, 10 mg.
amphotericin b liposome, 10 mg.
deferoxamine mesylate, 500 mg.
hydromorphone, up to 4 mg.
dobutamine hydrochloride, per 250 mg.
dopamine hcl, 40 mg.
epoprostenol, 0.5 mg.
foscarnet sodium, per 1,000 mg.
gallium nitrate, 1 mg.
ganciclovir sodium, 500 mg.
meperidine hydrochloride, per 100 mg.
milrinone lactate, 5 mg.
morphine sulfate, up to 10 mg.
morphine sulfate, preservative-free for epidural or intrathecal use, 10 mg.
ziconotide, 1 microgram.
fentanyl citrate, 0.1 mg.
treprostinil, 1 mg.
Injection,
Injection,
Injection,
Injection,
Injection,
Injection,
immune
immune
immune
immune
immune
immune
Injection,
Injection,
Injection,
Injection,
Injection,
Injection,
Injection,
Injection,
Injection,
doxorubicin hydrochloride, 10 mg.
blinatumomab, 1 microgram.
bleomycin sulfate, 15 units.
cladribine, per 1 mg.
cytarabine, 100 mg.
fluorouracil, 500 mg.
floxuridine, 500 mg.
vinblastine sulfate, 1 mg.
vincristine sulfate, 1 mg.
globulin (cuvitru), 100 mg.
globulin (hizentra), 100 mg.
globulin, (gamunex-c/gammaked), non-lyophilized (e.g., liquid), 500 mg.
globulin (vivaglobin), 100 mg.
globulin, (gammagard liquid), non-lyophilized, (e.g., liquid), 500 mg.
globulin/hyaluronidase, (hyqvia), 100 mg immune globulin.
The payment category for subsequent
transitional home infusion drug
additions to the LCDs and compounded
infusion drugs not otherwise classified,
as identified by HCPCS codes J7799 and
J7999, will be determined by the
Medicare administrative contractors.
e. Payment Amounts
As set out at new section
1834(u)(7)(D) of the Act, as added by
section 50401 of the BBA of 2018 (Pub.
L. 115–123), each payment category will
be paid at amounts in accordance with
the Physician Fee Schedule for each
infusion drug administration calendar
day in the individual’s home for drugs
assigned to such category without
geographic adjustment. Table 56
provides the payment categories
associated with the HCPCS codes.
TABLE 56—PAYMENT CATEGORIES FOR TEMPORARY TRANSITIONAL PAYMENT FOR HOME INFUSION THERAPY SERVICES
HCPCS code
Category 1:
96365 ..................
amozie on DSK3GDR082PROD with PROPOSALS2
96366 ..................
Category 2:
96369 ..................
96370 ..................
Description
Units
Therapeutic, Prophylactic, and Diagnostic Injections and Infusions (Excludes Chemotherapy and Other Highly
Complex Drug or Highly Complex Biologic Agent Administration)—up to one hour.
Therapeutic, Prophylactic, and Diagnostic Injections and Infusions (Excludes Chemotherapy and Other Highly
Complex Drug or Highly Complex Biologic Agent Administration)—each additional hour.
1
Therapeutic, Prophylactic, and Diagnostic Injections and Infusions (Excludes Chemotherapy and Other Highly
Complex Drug or Highly Complex Biologic Agent Administration)—up to one hour.
Therapeutic, Prophylactic, and Diagnostic Injections and Infusions (Excludes Chemotherapy and Other Highly
Complex Drug or Highly Complex Biologic Agent Administration)—each additional hour.
1
Category 3:
98 The JB modifier indicates that the route of
administration is subcutaneous.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00127
Fmt 4701
Sfmt 4702
E:\FR\FM\12JYP2.SGM
12JYP2
3
3
32466
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 56—PAYMENT CATEGORIES FOR TEMPORARY TRANSITIONAL PAYMENT FOR HOME INFUSION THERAPY SERVICES—
Continued
HCPCS code
96413 ..................
96415 ..................
Description
Injection and Intravenous Infusion Chemotherapy and Other Highly Complex Drug or Highly Complex Biologic
Agent Administration—up to one hour.
Injection and Intravenous Infusion Chemotherapy and Other Highly Complex Drug or Highly Complex Biologic
Agent Administration—each additional hour.
amozie on DSK3GDR082PROD with PROPOSALS2
Section 1834(u)(7)(E)(ii) of the Act
requires that in the case that two (or
more) home infusion drugs or
biologicals from two different payment
categories are administered to an
individual concurrently on a single
infusion drug administration calendar
day, one payment for the highest
payment category would be made.
f. Billing
For eligible home infusion suppliers
to bill for home infusion therapy
services for an infusion drug
administration calendar day, we will
create three new HCPCS G-codes for
each of the three payment categories.
The eligible home infusion supplier
would submit, in line-item detail on the
claim, a G-code for every visit made by
the nurse to provide professional
services to the patient in his/her home
on a day in which a drug is being
infused. Each visit reported would
include the length of time in which
professional services were provided (in
15 minute increments). However, only
one payment would be made per
infusion drug administration calendar
day at the standard amount described by
each of the payment categories noted
previously, for a total payment
equivalent to 4 hours per infusion drug
administration calendar day. These Gcodes could be billed separately from or
on the same claim as the DME, supplies,
and infusion drug; and would be
processed through the DME MACs. The
supplier furnishing the DME, pump, the
infusion drug, and other supplies must
also provide the professional services
under the home infusion therapy benefit
during the temporary transitional
payment period.
For the purposes of this temporary
transitional payment for home infusion
therapy services, section 1834(u)(7)(D)(i)
requires that payment amounts would
be equal to the amounts determined
under the Physician Fee Schedule
established under section 1848 of the
Act for services furnished during the
year for codes and units for such codes
specified without application of
geographic wage adjustment under
section 1848(e) of the Act. In the event
that multiple drugs, which are not all
assigned to the same payment category,
VerDate Sep<11>2014
Units
17:39 Jul 11, 2018
Jkt 244001
are administered on the same infusion
drug administration calendar day,
section 1834(u)(7)(E)(ii) requires that a
single payment would be made that is
equal to the highest payment category.
In order to implement the requirements
of section 1834(u)(7) of the Act for this
temporary transitional payment, we
would issue a Change Request (CR)
prior to implementation of this
temporary transitional payment,
including the G-codes needed for
billing, outlining the requirements for
the claims processing changes needed to
implement this payment.
2. Solicitation of Public Comments
Regarding Payment for Home Infusion
Therapy Services for CY 2021 and
Subsequent Years
Upon the expiration of the home
infusion therapy services temporary
transitional payment, we would be fully
implementing the home infusion
therapy services payment system under
section 1834(u)(1) of the Act, as added
by section 5012 of the 21st Century
Cures Act (Pub. L. 114–255). In
anticipation of future rulemaking, we
are soliciting comments regarding the
payment system for home infusion
therapy services beginning in CY 2021.
a. Relationship to DME
As mentioned previously, Medicare
Part B covers certain infusion pumps
and supplies (including certain home
infusion drugs) that are necessary for
the effective use of the infusion pump,
through the DME benefit. To be covered
under the Part B DME benefit, the drug
must be reasonable and necessary for
the treatment of illness or injury or to
improve the function of a malformed
body member, and the drug must be
necessary for the effective use of the
DME. However, there is no separate
Medicare Part B DME payment for
professional services associated with the
administration of home infusion drugs,
including nursing services, or for
training and education, monitoring, and
remote monitoring services. Therefore,
we consider the home infusion therapy
benefit principally to be a separate
payment in addition to the existing
payment made under the DME benefit,
PO 00000
Frm 00128
Fmt 4701
Sfmt 4702
1
3
thus explicitly and separately paying for
the home infusion therapy services.
b. Definition of Infusion Drug
Administration Calendar Day
Section 1834(u)(7)(E)(i) of the Act
applies the same definition of ‘‘infusion
drug administration calendar day’’ for
both the home infusion therapy
temporary transitional payment and the
home infusion therapy services benefit.
We anticipate retaining the definition of
infusion drug administration calendar
day, as proposed in section IV.C.2. of
this proposed rule for the full
implementation of the home infusion
therapy services benefit. This means
that payment for an infusion drug
administration calendar day is for the
day on which home infusion therapy
services are furnished by skilled
professionals in the individual’s home
on the day of infusion drug
administration. An infusion drug
administration visit that begins in one
calendar day and spans into the next
calendar day would be considered one
visit using the date the visit ended as
the service date. The skilled services
provided on such day must be so
inherently complex that they can only
be safely and effectively performed by,
or under the supervision of, professional
or technical personnel. We are soliciting
comments on the definition as
discussed in section IV.C.2. of this
proposed rule.
c. Payment Basis, Limitation on
Payment, Required and Discretionary
Adjustments, and Billing Procedures
Section 1834(u)(1)(A) of the Act
requires the establishment of a unit of
single payment for each infusion drug
administration calendar day. Section
1834(u)(1)(A)(iii) of the Act limits the
unit of single payment by requiring that
it must not exceed the amount
determined under the fee schedule
under section 1848 of the Act for
infusion therapy services furnished in a
calendar day if furnished in a
physician’s office, and the single
payment must not reflect more than five
hours for a particular therapy in a
calendar day. Additionally, section
1834(u)(1) of the Act includes
provisions for payment adjustments to
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
the unit of single payment for home
infusion therapy. Section 1834(u)(1)(B)
of the Act requires adjustments to reflect
factors such as patient acuity and
complexity of drug administration, and
a geographic wage index and other costs
that may vary by region. While the three
payment categories used for the
temporary transitional payment in CYs
2019 and 2020 reflect the therapy type
and complexity of the drug
administration under the Physician Fee
Schedule, we are soliciting comments
on other ways to account for therapy
type and complexity of administration,
as well as ways to capture patient
acuity.
Section 1834(u)(1)(B)(i) of the Act
requires that the single payment amount
be adjusted by a geographic wage index;
therefore, we are considering using the
Geographic Practice Cost Indices
(GPCIs) to account for regional
variations in wages and adjust the
payment for the professional services. A
GPCI has been established for every
Medicare payment locality for each of
the three components of a procedure’s
relative value unit (RVU) (for example,
the RVUs for work, practice expense,
and malpractice). The GPCIs are applied
in the calculation of a fee schedule
payment amount by multiplying the
RVU for each component times the GPCI
for that component.99 Finally, section
1834(u)(1)(C) of the Act allows for
discretionary adjustments which may
include outlier situations and other
factors as deemed appropriate by the
Secretary, and are required to be made
in a budget neutral manner. We request
feedback on situations that may incur an
outlier payment and potential designs
for an outlier payment calculation.
For CY 2021 and subsequent years,
although not required by law, the Part
B qualified home infusion therapy
supplier could potentially submit a
claim for home infusion therapy
services on a Part B practitioner claim
and processed through the A/B MACs,
rather than the DME MACs. We are
soliciting comment on whether
submitting a Part B practitioner claim
processed through the A/B MACs is
reasonable given that other types of
suppliers and providers of services
(such as physicians and HHAs), and not
just DME suppliers, can meet the
requirements under section 1861(iii) of
the Act, such as accreditation, to
provide home infusion therapy services.
In addition, when Part B practitioner
claims are processed through the A/B
MACs a mechanism is already in place
for the geographic wage adjustment, as
99 https://www.cms.gov/apps/physician-feeschedule/documentation.aspx.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
required for the home infusion therapy
payment system, and we are considering
the use of GPCI as described previously.
In order to bill for the home infusion
therapy services, beginning on January
1, 2021, a qualified home infusion
therapy supplier will need to enroll in
Medicare as a Part B Home Infusion
Therapy supplier. Additionally, in order
to furnish DME equipment and
supplies, that same qualified home
infusion therapy supplier must also be
enrolled as a DME supplier since the
home infusion therapy services are
required to be for the furnishing of DME
infusion drugs through a DME infusion
pump. In other words, both enrollments
would be necessary for the same
supplier to bill for home infusion
therapy services and the DME
equipment and supplies. Therefore, in
order to be paid for all elements of home
infusion therapy, two claims would
need to be submitted: (1) The first claim
for the DME drug, equipment, and
supplies on the 837P/CMS–1500
professional and supplier claims form
submitted to the DME MAC; and (2) a
second claim for the professional
services on the 837P/CMS–1500
professional and supplier claims form
submitted to the A/B MAC.
We invite comments on the unit of
single payment, limitations on payment,
and required and discretionary
adjustments. We are also soliciting
comments on whether it is reasonable to
require two separate claims submissions
to account for all components of home
infusion therapy using the 837P/CMS–
1500 professional and supplier claims
form, and submitting claims to both the
DME MACs and the A/B MACs for
processing. Finally, we are soliciting
any additional suggestions as to how
qualified home infusion therapy
suppliers should bill and be paid for
services under the home infusion
therapy benefit.
d. Definition of Professional/Nursing
Services and Monitoring Related to the
Administration of Home Infusion Drugs
In accordance with section
1861(iii)(2) of the Act, items and
services covered under the home
infusion therapy benefit are as follows:
• Professional services, including
nursing services, furnished in
accordance with the plan.
• Training and education (not
otherwise paid for as DME),
• Remote monitoring, and monitoring
services for the provision of home
infusion drugs furnished by a qualified
home infusion therapy supplier.
Section 1861(n) of the Act defines
DME as equipment used in the patient’s
home. Furthermore, the regulations at
PO 00000
Frm 00129
Fmt 4701
Sfmt 4702
32467
42 CFR 424.57(c)(12) state that the DME
supplier ‘‘must document that it or
another qualified party has at an
appropriate time, provided beneficiaries
with necessary information and
instructions on how to use Medicarecovered items safely and effectively.’’
As the medications in the DME external
infusion pump LCDs are considered
supplies to the external infusion pump,
and have been identified as drugs and
biologicals that can be self-infused in
the home, ongoing nursing supervision
is not required once the patient and/or
caregiver has been sufficiently taught to
safely manage the pump. We recognize
that the DME supplier standards require
a DME supplier to document that it or
another qualified party has at an
appropriate time provided beneficiaries
with necessary information and
instructions on how to use Medicarecovered items safely and effectively (42
CFR 424.57(c)(12)). Therefore, the inhome nursing services under the home
infusion therapy benefit would include
a limited amount of teaching and
training on the provision of home
infusion drugs that is not already
covered under the DME benefit in
accordance.
In determining the reasonable and
necessary number of infusion therapy
visits, the home infusion therapy
supplier must consider whether the
training and education provided
constitutes reinforcement of teaching
provided previously in an institutional
setting or in the home, or whether it
represents initial instruction. Where the
teaching represents initial instruction,
the supplier should consider patient
acuity, including the unique abilities of
the patient, and complexity of the
infusion. Where the teaching constitutes
reinforcement, the supplier should
evaluate the patient’s retained
knowledge and anticipated learning
progress to determine the appropriate
number of visits. Re-teaching or
retraining for an appropriate period may
be considered reasonable and necessary
where there is a change in the infusion
protocol or the patient’s condition that
requires re-teaching, or where the
patient, family, or caregiver is not
properly carrying out the task. The
medical record should document the
anticipated number of training and
education visits required, patient/
caregiver response to training, and if
necessary, the reason that the reteaching or retraining is required. Where
it becomes apparent after a reasonable
period of time that the patient/caregiver
is not able to be trained, or if the
patient/caregiver has been taught to
safely and effectively use the infusion
E:\FR\FM\12JYP2.SGM
12JYP2
32468
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
pump in the home, then further
teaching and training would cease to be
reasonable and necessary. In accordance
with section 1861(iii)(1)(B), an
individual must be under a plan of care
established by a physician, prescribing
the type, amount, and duration of
infusion therapy services that are to be
furnished in coordination with the
furnishing of home infusion drugs
under Part B. These home infusion
drugs, defined under section
1861(iii)(3)(C) of the Act, must be
administered intravenously, or
subcutaneously for an administration
period of 15 minutes or more through a
pump that is an item of DME in order
for home infusion therapy services to be
reasonable and necessary for the
treatment of the illness or injury. In
order to satisfy the definition of DME,
an item must be appropriate for use in
the home. In this case, in order to be
considered appropriate for use in the
home, the patient must be able to safely
and effectively operate the infusion
pump. Therefore, if a patient is unable
to safely and effectively operate the
infusion pump in the home, then the
patient would not be eligible for the
home infusion therapy benefit.
It is important to reiterate that the
professional services covered under this
benefit are not intended to provide ongoing nursing supervision throughout
each infusion. If applicable, the reason
why a training was unsuccessful should
be documented in the record. We invite
comments regarding what constitutes a
reasonable and necessary amount of
training and education for the provision
of home infusion drugs. We outline in
this section additional, more detailed
information on the professional and
nursing services that would be covered,
as well as remote monitoring services
for the provision of home infusion
drugs, as defined in 1861(iii)(3)(C) of the
Act, relative to the therapy types
currently included in the DME external
infusion pump LCD.100
(1) Central Vascular Access Device
Maintenance
As many of the drugs and biologicals
included in the DME external infusion
pump LCD are given continuously,
given on a long-term basis, or are
vesicants or irritants that should not be
given peripherally, many beneficiaries
would likely have central vascular
access devices (CVAD), such as
peripherally inserted central catheters
(PICC), central lines, or ports requiring
training and education regarding
100 https://med.noridianmedicare.com/
documents/2230703/7218263/
External+Infusion+Pumps+LCD.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
maintenance and hygiene, and site care
and dressing changes. The qualified
home infusion therapy supplier would
be responsible for educating the patient
on properly disinfecting access points
and connectors, what to do in the event
of a dislodgement or occlusion, and
signs/symptoms of infection. This also
includes teaching the patient about
flushing the CVAD after the infusion to
ensure all of the medication has been
flushed through the tubing and catheter,
and locking the catheter to prevent
blood from backing into the catheter and
clotting. Education regarding specific
techniques and solutions (saline or
heparin) may be given to minimize
catheter occlusion.101
(2) Medication Education and Disease
Management
The qualified home infusion therapy
supplier would be responsible for
ensuring that the patient has been
properly educated about his/her disease,
medication therapy, and lifestyle
changes. This could include selfmonitoring instruction (for example,
nutrition, temperature, blood pressure,
heart rate, daily weight, abdominal girth
measurement, edema, urine output) and
identification of complications or
problems necessitating a call to the
infusion nurse/pharmacist, or
emergency protocols if they arise. The
qualified home infusion therapy
supplier would ensure proper
understanding of the medication
therapy including: Drug; route of
administration; prescription (dosage,
how often to administer, and duration of
therapy); side effects and interactions
with other medications; adverse
reactions to therapy; goals of therapy;
and indications of progress. Lifestyle
education regarding behavior and food/
fluid modifications/restrictions,
symptom management, and infection
control are also important aspects of this
education. As some drugs covered
under the DME benefit involve
extensive lifestyle changes and dietary
restrictions, training and education as
included in the home infusion therapy
benefit could entail any ancillary
services such as visits with social
workers or dieticians as needed, and
documented in the medical record. For
patients on continuous, potentially life
long IV therapy, the nurse, social
worker, or dietician would assess the
need for further training and education
regarding the concept of long-term drug
infusion and address aspects of life-style
101 Gabriel
J (2013) Venous access devices part 2:
preventing and managing complications of CVADs.
Nursing Times; 109: 40, 20–23.
PO 00000
Frm 00130
Fmt 4701
Sfmt 4702
changes and realistic expectations for
life with an infusion pump.
(3) Patient Evaluation and Assessment
Comprehensive patient assessment is
imperative when providing home
infusion therapy in order to ensure the
accuracy of the medication
administration and safety of the patient,
and to determine whether changes in
the home infusion therapy plan of care
are necessary. The qualified home
infusion therapy supplier would
evaluate patient history, current
physical and mental status, including
patient response to therapy, any adverse
effects or infusion complications, lab
reports, cognitive and psychosocial
status, family/care partner support,
prescribed treatment, concurrent oral
prescriptions, and over-the-counter
medications. This includes obtaining
any necessary blood-work and vital
signs.
(4) Medication Administration
As the DME supplier is responsible,
under the DME benefit,102 for training
the patient and caregiver on pump
operation, maintenance, and
troubleshooting; the qualified home
infusion therapy supplier would be
responsible for all other aspects of
medication administration, including
inspection of medications, containers,
supplies prior to use; proper drug
storage and disposal; household
precautions for chemotherapy drugs
including spills, handling body wastes,
and physical contact precautions; hand
hygiene and aseptic technique; pre/post
medication/hydration administration;
and medication preparation.
(5) Remote Monitoring and Monitoring
Services
Section 1861(iii)(3)(D)(i)(II) of the Act
requires that the qualified home
infusion therapy supplier ‘‘ensures the
safe and effective provision and
administration of home infusion therapy
on a 7-day-a-week, 24-hour-a-day
basis.’’ Therefore, the qualified home
infusion therapy supplier would closely
monitor lab values, patient response to
therapy, and assess compliance. Direct
communication and coordination with
the patient, caregivers, applicable
providers, and pharmacist regarding
changes in the patient’s condition
should be on-going so that any
adjustment to treatment is made as
needed and in a timely fashion.
Monitoring services, as indicated on
the plan of care, would dictate either the
102 https://www.cms.gov/Medicare/ProviderEnrollment-and-Certification/
MedicareProviderSupEnroll/downloads/
DMEPOSAccreditationStandardsCMB.pdf.
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
need for daily monitoring of indicated
vitals (through remote monitoring) or
specify the interval for in-person
evaluation and assessment of the
patient. The use of remote monitoring
services for those patients receiving
home infusion therapy would likely be
limited to patients receiving continuous
infusion medications as identified in the
plan of care. These patients are
considered high risk patients and
require daily monitoring, but generally
do not need to be seen by a practitioner
daily. This can be achieved, for
example, through the use of a remote
monitoring service that includes
monitoring equipment through which
the patient electronically submits selfobtained vital signs, such as weight,
blood pressure, and heart rate. In this
example, an off-site monitoring service
would communicate any abnormal
results to the home infusion therapy
supplier for analysis and consultation
with the provider overseeing the
patient’s care (that is, physician, nurse
practitioner, or physician assistant)
regarding potential treatment plan
changes.
We invite comments on any
additional interpretations of
professional, nursing, training and
education, and monitoring services that
may be considered under the scope of
the home infusion therapy benefit. We
also specifically welcome comments on
the use of remote monitoring under the
home infusion therapy benefit.
e. The Role of Prior Authorization
Under the Home Infusion Therapy
Benefit
Section 1834(u)(4) of the Act states
that the Secretary may apply prior
authorization for home infusion
services. Generally, prior authorization
requires that a decision by a health
insurer or plan be rendered to confirm
that a health care service, treatment
plan, prescription drug or durable
medical equipment is medically
necessary.103 Prior authorization helps
to ensure that a service, such as home
infusion therapy, is being provided
appropriately. Private health plans
generally require prior authorization
before home infusion therapy can begin.
We would maintain the discretion to
decide if certain drugs or frequency in
visits require prior authorization before
therapy can be covered. The emphasis
would be on the appropriateness of the
drug and the necessity of associated
professional services and not the site of
care. We are soliciting comments as to
whether and how prior authorization
103 https://www.healthcare.gov/glossary/
preauthorization/.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
could potentially be utilized for home
infusion therapy.
f. Home Infusion Therapy and the
Relationship to/Interaction With Home
Health
A beneficiary does not have to be
considered confined to the home (that
is, homebound) in order to be eligible
for the home infusion therapy benefit.
However, homebound beneficiaries
requiring home health services also may
be eligible for the home infusion
therapy benefit. Therefore, there may be
circumstances when a patient may
utilize both the home health benefit and
the home infusion therapy benefit
concurrently.
HHAs are required to furnish
necessary DME and coordinate home
infusion services when a patient is
under a home health plan of care. In
accordance with the Home Health
Conditions of Participation at 42 CFR
484.60, the HHA must assure
communication with all physicians
involved in the plan of care, as well as
integrate orders and services provided
by all physicians and disciplines. In
order to qualify for the Medicare home
health benefit, the beneficiary must—
• Be confined to the home;
• Be under the care of a physician;
• Receive services under a plan of
care established and periodically
reviewed by a physician;
• Be in need of skilled nursing care
on an intermittent basis or physical
therapy or speech-language pathology,
or have a continuing need for
occupational therapy; and
• Have had a face-to-face encounter
related to the primary reason for home
health care with an allowed provider
type and within the required timeframe.
If a patient meets the requirements
listed previously and a home health
visit is furnished that is unrelated to
home infusion therapy, then payment
for the home health visit would be
covered by the HH PPS payment and
billed on the home health claim. When
the HHA providing services under the
Medicare home health benefit is also the
same entity furnishing services as the
qualified home infusion therapy
supplier, and a home visit is exclusively
for the purpose of furnishing items and
services related to home infusion
therapy, the HHA would submit a claim
for payment as a home infusion therapy
supplier and receive payment under the
home infusion therapy benefit. If the
home visit includes the provision of
other home health services in addition
to, and separate from, items and services
related to the home infusion therapy,
the HHA would submit both a home
health claim and a home infusion
PO 00000
Frm 00131
Fmt 4701
Sfmt 4702
32469
therapy claim, but must separate the
time spent performing services covered
under the HH PPS from the time spent
performing services covered under the
home infusion therapy benefit. We
anticipate this would be similar to the
approach for furnishing negative
pressure wound therapy using a
disposable device as described in the
regulations at 42 CFR 484.205(b).
We are soliciting feedback on the
relationship between the Medicare
home health benefit and the home
infusion therapy benefit, including how
payment would be made for a
beneficiary who meets eligibility
requirements for home health services
and home infusion therapy services.
VII. Changes to the Accreditation
Requirements for Certain MedicareCertified Providers and Suppliers
A. Background
To participate in the Medicare
program, Medicare-certified providers
and suppliers of health care services,
must be substantially in compliance
with specified statutory requirements of
the Act, as well as any additional
regulatory requirements related to the
health and safety of patients specified
by the Secretary of the Department of
Health and Human Services (HHS).
Medicare certified providers and
suppliers are enrolled in the Medicare
program by entering into an agreement
with Medicare. They include hospitals,
skilled nursing facilities, home health
agencies, hospice programs, rural health
clinics, critical access hospitals,
comprehensive outpatient rehabilitation
facilities, laboratories, clinics,
rehabilitation agencies, public health
agencies, and ambulatory surgical
centers. These health and safety
requirements are generally called
conditions of participation (CoPs) for
most providers, requirements for skilled
nursing facilities (SNFs), conditions for
coverage (CfCs) for ambulatory surgical
centers (ASCs) and other suppliers, and
conditions for certification for rural
health clinics (RHCs). A Medicarecertified provider or supplier that does
not substantially comply with the
applicable health and safety
requirements risks having its
participation in the Medicare program
terminated.
In accordance with section 1864 of
the Act, state health departments or
similar agencies, under an agreement
with CMS, survey health care providers
and suppliers to ascertain compliance
with the applicable CoPs, CfCs,
conditions of certification, or
requirements, and certify their findings
to us. Based on these State Survey
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32470
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
Agency (SA) certifications, we
determine whether the provider or
supplier qualifies, or continues to
qualify, for participation in the
Medicare program.
Section 1865(a) of the Act allows most
health care facilities to demonstrate
compliance with Medicare CoPs,
requirements, CfCs, or conditions for
certification through accreditation by a
CMS-approved program of a national
accreditation body. If an AO is
recognized by the Secretary as having
standards for accreditation that meet or
exceed Medicare requirements, any
provider or supplier accredited by the
AO’s CMS-approved accreditation
program may be deemed by us to meet
the Medicare conditions or
requirements.
We are responsible for the review,
approval and subsequent oversight of
national AOs’ Medicare accreditation
programs, and for ensuring providers or
suppliers accredited by the AO meet the
quality and patient safety standards
required by the Medicare CoPs,
requirements, CfCs, and conditions for
certification. Any national AO seeking
approval of an accreditation program in
accordance with section 1865(a) of the
Act must apply for and be approved by
CMS for a period not to exceed six
years.
The AO must reapply for renewed
CMS approval of an accreditation
program before the date its approval
period expires. This allows providers or
suppliers accredited under the program
to continue to be deemed to be in
compliance with the applicable
Medicare CoPs, requirements, CfCs, and
conditions for certification. Regulations
implementing these provisions are
found at 42 CFR 488.1 through 488.9.
We believe that it is necessary to
revise the regulations for Medicarecertified providers and providers to add
two new requirements for the AOs that
accredit certified providers and
providers. First, we are proposing at
§ 488.5 to require AOs for Medicarecertified providers and suppliers to
include a written statement in their
application which states that if a fully
accredited and deemed facility in good
standing provides written notification
that they wish to voluntarily withdraw
from the AO’s CMS-approved
accreditation program, the AO must
continue the facility’s current
accreditation until the effective date of
withdrawal identified by the facility or
the expiration date of the term of
accreditation, whichever comes first.
We are also proposing to modify the AO
oversight regulations at § 488.5 by
adding new requirements for training
for AO surveyors.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
B. Proposed Changes to Certain
Requirements for Medicare-Certified
Providers and Suppliers at Part 488
1. Continuation of Term of
Accreditation When a MedicareCertified Provider or Supplier Decides
to Voluntarily Terminate the Services of
an Accrediting Organization (§ 488.5)
We propose to add a new regulation
at § 488.5(a)(17)(iii), which would
require that, with an initial or renewal
application for CMS-approval of a
Medicare certified provider or supplier
accreditation program, an AO must
include a written statement agreeing
that when a fully accredited, deemed
provider or supplier in good standing
notifies its AO that it wishes to
voluntarily withdraw from the AO’s
accreditation program, the AO would
honor the provider’s or supplier’s
current term of accreditation until the
effective date of withdrawal identified
by the facility, or the expiration date of
the term of accreditation, whichever
comes first. We make this proposal
because we have received numerous
complaints from accredited and deemed
facilities in good standing with their
current AO stating that once they
provide notification to the AO of their
intent to voluntary withdrawal their
accreditation from that AO, the AO
frequently terminates their accreditation
immediately without regard to their
current accreditation status, up to date
payment of fees, contract status, or the
facility’s requested effective date of
withdrawal. Accreditation is voluntary
for Medicare certified providers and
suppliers that participate in Medicare. It
is not required for participation in
Medicare. Therefore, we do not believe
it is reasonable for AOs to penalize
facilities because they choose to
terminate the services of an AO.
Medicare certified providers and
suppliers may freely choose to
demonstrate compliance with the
Medicare conditions.by receiving
surveys from any CMS-approved AO of
their choice, or the SA.
2. Training Requirements for
Accrediting Organization Surveyors
(§ 488.5(a)(7))
We are proposing to add a new
requirement at § 488.5(a)(7) which
imposes a new training requirement for
surveyors of AO that accredit Medicare
certified provider and supplier types by
amending the provision at § 488.5(a)(7).
We are proposing that all AO surveyors
be required to complete the relevant
program-specific CMS online trainings
initially, and thereafter, consistent with
requirements established by CMS for
state surveyors. CMS provides a wide
PO 00000
Frm 00132
Fmt 4701
Sfmt 4702
variety of comprehensive trainings
through an on-demand integrated
surveyor training website. These online
trainings are available and can be
accessed by state and federal surveyors
and the public, free of charge, 24 hours
a day, 365 days a year. These online
trainings are currently publically
available for the SA surveyors.
As part of our oversight of the AOs
performance, CMS has contracted with
the SAs to perform validation surveys
on a sample of providers and suppliers
(such as hospitals, critical access
hospital, ambulatory surgical centers,
and home health agencies) accredited by
the AOs that accredit Medicare certified
providers and suppliers. Validation
surveys must be performed by the SA
within 60 days of the survey performed
by the AO. As a validation survey is
performed within 60 days of the AO
survey, we believe that the conditions at
the hospital or other facility being
surveyed would be similar at the time
of the validation survey.
The purpose of a validation survey is
to compare the survey findings of the
AO to the survey findings of the SA to
see if there are any disparities. The
amount of disparities found in the AO’s
survey is called the ‘‘disparity rate’’ and
is tracked by CMS as an indication of
the quality of the surveys performed by
the AO.
CMS has determined that many of the
AOs’ disparity rates have been
consistently high. This means that the
AOs have consistently failed to find the
same condition level deficiencies in the
care provided by the hospital or other
providers surveyed that were found by
the SA during the validation survey.
We believe that the disparity in
findings made by the AO surveyors and
those of the SA surveyors can largely be
attributed the difference in the training
and education provided to the AO
surveyors. Each AO is responsible for
providing training and education to
their surveyors. The surveyor training
and education provided varies from AO
to AO and is not consistent. CMS
provides comprehensive online training
to the SA surveyor staff on the CMS
Surveyor Training website 104 which are
specific to each type of provider of
supplier type to be surveyed.
It is our belief that the AO’s disparity
rate would be decreased if all surveyors
took the same training. We believe
completion of the same surveyor
training by both SA and AO surveyors
would increase the consistency between
the results of the surveys performed by
the SAs and AOs and have a positive
impact on the historically high disparity
104 https://surveyortraining.cms.hhs.gov/.
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
rate. Therefore we are proposing that all
AO surveyors be required to take the
CMS online surveyor training offered on
the CMS website. We would require
each AO to provide CMS with
documentation which provides proof
that each of their surveyors has
completed the CMS online surveyor
training. If the AO fails to provide this
documentation, CMS could place the
AO on an accreditation program review
pursuant to § 488.8(c).
amozie on DSK3GDR082PROD with PROPOSALS2
VIII. Requests for Information
This section addresses two requests
for information (RFI). Upon reviewing
the RFIs, respondents are encouraged to
provide complete but concise responses.
These RFIs are issued solely for
information and planning purposes;
neither RFI constitutes a Request for
Proposal (RFP), application, proposal
abstract, or quotation. The RFIs do not
commit the U.S. Government to contract
for any supplies or services or make a
grant award. Further, CMS is not
seeking proposals through these RFIs
and will not accept unsolicited
proposals. Responders are advised that
the U.S. Government will not pay for
any information or administrative costs
incurred in response to these RFIs; all
costs associated with responding to
these RFIs will be solely at the
interested party’s expense. Failing to
respond to either RFI will not preclude
participation in any future procurement,
if conducted. It is the responsibility of
the potential responders to monitor each
RFI announcement for additional
information pertaining to the request.
Please note that CMS will not respond
to questions about the policy issues
raised in these RFIs. CMS may or may
not choose to contact individual
responders. Such communications
would only serve to further clarify
written responses. Contractor support
personnel may be used to review RFI
responses. Responses to these RFIs are
not offers and cannot be accepted by the
U.S. Government to form a binding
contract or issue a grant. Information
obtained as a result of these RFIs may
be used by the U.S. Government for
program planning on a non-attribution
basis. Respondents should not include
any information that might be
considered proprietary or confidential.
This RFI should not be construed as a
commitment or authorization to incur
cost for which reimbursement would be
required or sought. All submissions
become U.S. Government property and
will not be returned. CMS may
publically post the comments received,
or a summary thereof.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
A. Request for Information on
Promoting Interoperability and
Electronic Healthcare Information
Exchange Through Possible Revisions to
the CMS Patient Health and Safety
Requirements for Hospitals and Other
Medicare- and Medicaid-Participating
Providers and Suppliers
Currently, Medicare- and Medicaidparticipating providers and suppliers
are at varying stages of adoption of
health information technology (health
IT). Many hospitals have adopted
electronic health records (EHRs), and
CMS has provided incentive payments
to eligible hospitals, critical access
hospitals (CAHs), and eligible
professionals who have demonstrated
meaningful use of certified EHR
technology (CEHRT) under the Medicare
EHR Incentive Program. As of 2015, 96
percent of Medicare- and Medicaidparticipating non-Federal acute care
hospitals had adopted certified EHRs
with the capability to electronically
export a summary of clinical care.105
While both adoption of EHRs and
electronic exchange of information have
grown substantially among hospitals,
significant obstacles to exchanging
electronic health information across the
continuum of care persist. Routine
electronic transfer of information postdischarge has not been achieved by
providers and suppliers in many
localities and regions throughout the
Nation.
CMS is firmly committed to the use of
certified health IT and interoperable
EHR systems for electronic healthcare
information exchange to effectively help
hospitals and other Medicare- and
Medicaid-participating providers and
suppliers improve internal care delivery
practices, support the exchange of
important information across care team
members during transitions of care, and
enable reporting of electronically
specified clinical quality measures
(eCQMs). The Office of the National
Coordinator for Health Information
Technology (ONC) acts as the principal
Federal entity charged with
coordination of nationwide efforts to
implement and use health information
technology and the electronic exchange
of health information on behalf of the
Department of Health and Human
Services.
In 2015, ONC finalized the 2015
Edition health IT certification criteria
(2015 Edition), the most recent criteria
for health IT to be certified to under the
ONC Health IT Certification Program.
The 2015 Edition facilitates greater
statistics can be accessed at:
https://dashboard.healthit.gov/quickstats/pages/
FIG-Hospital-EHR-Adoption.php.
PO 00000
105 These
Frm 00133
Fmt 4701
Sfmt 4702
32471
interoperability for several clinical
health information purposes and
enables health information exchange
through new and enhanced certification
criteria, standards, and implementation
specifications. CMS requires eligible
hospitals and CAHs in the Medicare and
Medicaid EHR Incentive Programs and
eligible clinicians in the Quality
Payment Program (QPP) to use EHR
technology certified to the 2015 Edition
beginning in CY 2019.
In addition, several important
initiatives will be implemented over the
next several years to provide hospitals
and other participating providers and
suppliers with access to robust
infrastructure that will enable routine
electronic exchange of health
information. Section 4003 of the 21st
Century Cures Act (Pub. L. 114–255),
enacted in 2016, and amending section
3000 of the Public Health Service Act
(42 U.S.C. 300jj), requires HHS to take
steps to advance the electronic exchange
of health information and
interoperability for participating
providers and suppliers in various
settings across the care continuum.
Specifically, Congress directed that
ONC ‘‘. . . for the purpose of ensuring
full network-to-network exchange of
health information, convene publicprivate and public-public partnerships
to build consensus and develop or
support a trusted exchange framework,
including a common agreement among
health information networks
nationally.’’ In January 2018, ONC
released a draft version of its proposal
for the Trusted Exchange Framework
and Common Agreement,106 which
outlines principles and minimum terms
and conditions for trusted exchange to
enable interoperability across disparate
health information networks (HINs).
The Trusted Exchange Framework (TEF)
is focused on achieving the following
four important outcomes in the longterm:
• Professional care providers, who
deliver care across the continuum, can
access health information about their
patients, regardless of where the patient
received care.
• Patients can find all of their health
information from across the care
continuum, even if they do not
remember the name of the professional
care provider they saw.
• Professional care providers and
health systems, as well as public and
private health care organizations and
public and private payer organizations
106 The draft version of the trusted Exchange
Framework may be accessed at: https://
beta.healthit.gov/topic/interoperability/trustedexchange-framework-and-common-agreement.
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32472
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
accountable for managing benefits and
the health of populations, can receive
necessary and appropriate information
on groups of individuals without having
to access one record at a time, allowing
them to analyze population health
trends, outcomes, and costs; identify atrisk populations; and track progress on
quality improvement initiatives.
• The health IT community has open
and accessible application programming
interfaces (APIs) to encourage
entrepreneurial, user-focused
innovation that will make health
information more accessible and
improve EHR usability.
ONC will revise the draft TEF based
on public comment and ultimately
release a final version of the TEF that
will subsequently be available for
adoption by HINs and their participants
seeking to participate in nationwide
health information exchange. The goal
for stakeholders that participate in, or
serve as, a HIN is to ensure that
participants will have the ability to
seamlessly share and receive a core set
of data from other network participants
in accordance with a set of permitted
purposes and applicable privacy and
security requirements. Broad adoption
of this framework and its associated
exchange standards is intended to both
achieve the outcomes described above
while creating an environment more
conducive to innovation.
In light of the widespread adoption of
EHRs along with the increasing
availability of health information
exchange infrastructure predominantly
among hospitals, we are interested in
hearing from stakeholders on how we
could use the CMS health and safety
standards that are required for providers
and suppliers participating in the
Medicare and Medicaid programs (that
is, the Conditions of Participation
(CoPs), Conditions for Coverage (CfCs),
and Requirements for Participation
(RfPs) for Long-Term Care (LTC)
Facilities) to further advance electronic
exchange of information that supports
safe, effective transitions of care
between hospitals and community
providers. Specifically, CMS might
consider revisions to the current CMS
CoPs for hospitals, such as: Requiring
that hospitals transferring medically
necessary information to another facility
upon a patient transfer or discharge do
so electronically; requiring that
hospitals electronically send required
discharge information to a community
provider via electronic means if possible
and if a community provider can be
identified; and requiring that hospitals
make certain information available to
patients or a specified third-party
application (for example, required
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
discharge instructions) via electronic
means if requested.
On November 3, 2015, we published
a proposed rule (80 FR 68126) to
implement the provisions of the
Improving Medicare Post-Acute Care
Transformation Act of 2014 (the
IMPACT Act) (Pub. L. 113–185) and to
revise the discharge planning CoP
requirements that hospitals (including
short-term acute care hospitals, longterm care hospitals (LTCHs),
rehabilitation hospitals, psychiatric
hospitals, children’s hospitals, and
cancer hospitals), critical access
hospitals (CAHs), and home health
agencies (HHAs) would need to meet in
order to participate in the Medicare and
Medicaid programs. This proposed rule
has not been finalized yet. However,
several of the proposed requirements
directly address the issue of
communication between providers and
between providers and patients, as well
as the issue of interoperability:
• Hospitals and CAHs would be
required to transfer certain necessary
medical information and a copy of the
discharge instructions and discharge
summary to the patient’s practitioner, if
the practitioner is known and has been
clearly identified;
• Hospitals and CAHs would be
required to send certain necessary
medical information to the receiving
facility/post-acute care providers, at the
time of discharge; and
• Hospitals, CAHs, and HHAs would
need to comply with the IMPACT Act
requirements that would require
hospitals, CAHs, and certain post-acute
care providers to use data on quality
measures and data on resource use
measures to assist patients during the
discharge planning process, while
taking into account the patient’s goals of
care and treatment preferences.
We published another proposed rule
(81 FR 39448) on June 16, 2016, that
updated a number of CoP requirements
that hospitals and CAHs would need to
meet in order to participate in the
Medicare and Medicaid programs. This
proposed rule has not been finalized
yet. One of the proposed hospital CoP
revisions in that rule directly addresses
the issues of communication between
providers and patients, patient access to
their medical records, and
interoperability. We proposed that
patients have the right to access their
medical records, upon an oral or written
request, in the form and format
requested by such patients, if it is
readily producible in such form and
format (including in an electronic form
or format when such medical records
are maintained electronically); or, if not,
in a readable hard copy form or such
PO 00000
Frm 00134
Fmt 4701
Sfmt 4702
other form and format as agreed to by
the facility and the individual,
including current medical records,
within a reasonable timeframe. The
hospital must not frustrate the
legitimate efforts of individuals to gain
access to their own medical records and
must actively seek to meet these
requests as quickly as its recordkeeping
system permits.
We also published a final rule (81 FR
68688) on October 4, 2016, that revised
the requirements that LTC facilities
must meet to participate in the Medicare
and Medicaid programs. In this rule, we
made a number of revisions based on
the importance of effective
communication between providers
during transitions of care, such as
transfers and discharges of residents to
other facilities or providers, or to home.
Among these revisions was a
requirement that the transferring LTC
facility must provide all necessary
information to the resident’s receiving
provider, whether it is an acute care
hospital, an LTCH, a psychiatric facility,
another LTC facility, a hospice, a home
health agency, or another communitybased provider or practitioner (42 CFR
483.15(c)(2)(iii)). We specified that
necessary information must include the
following:
• Contact information of the
practitioner responsible for the care of
the resident;
• Resident representative information
including contact information;
• Advance directive information;
• Special instructions or precautions
for ongoing care;
• The resident’s comprehensive care
plan goals; and
• All other necessary information,
including a copy of the resident’s
discharge or transfer summary and any
other documentation to ensure a safe
and effective transition of care.
We note that the discharge summary
mentioned above must include
reconciliation of the resident’s
medications, as well as a recapitulation
of the resident’s stay, a final summary
of the resident’s status, and the postdischarge plan of care. In addition, in
the preamble to the rule, we encouraged
LTC facilities to electronically exchange
this information if possible and to
identify opportunities to streamline the
collection and exchange of resident
information by using information that
the facility is already capturing
electronically.
Additionally, we specifically invite
stakeholder feedback on the following
questions regarding possible new or
revised CoPs/CfCs/RfPs for
interoperability and electronic exchange
of health information:
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
• If CMS were to propose a new CoP/
CfC/RfP standard to require electronic
exchange of medically necessary
information, would this help to reduce
information blocking as defined in
section 4004 of the 21st Century Cures
Act?
• Should CMS propose new CoPs/
CfCs/RfPs for hospitals and other
participating providers and suppliers to
ensure a patient’s or resident’s (or his or
her caregiver’s or representative’s) right
and ability to electronically access his
or her health information without
undue burden? Would existing portals
or other electronic means currently in
use by many hospitals satisfy such a
requirement regarding patient/resident
access as well as interoperability?
• Are new or revised CMS CoPs/CfCs/
RfPs for interoperability and electronic
exchange of health information
necessary to ensure patients/residents
and their treating providers routinely
receive relevant electronic health
information from hospitals on a timely
basis or will this be achieved in the next
few years through existing Medicare and
Medicaid policies, the implementing
regulations related to the privacy and
security standards of the Health
Insurance Portability and
Accountability Act of 1996 (HIPAA)
(Pub. L. 104–91), and implementation of
relevant policies in the 21st Century
Cures Act?
• What would be a reasonable
implementation timeframe for
compliance with new or revised CMS
CoPs/CfCs/RfPs for interoperability and
electronic exchange of health
information if CMS were to propose and
finalize such requirements? Should
these requirements have delayed
implementation dates for specific
participating providers and suppliers, or
types of participating providers and
suppliers (for example, participating
providers and suppliers that are not
eligible for the Medicare and Medicaid
EHR Incentive Programs)?
• Do stakeholders believe that new or
revised CMS CoPs/CfCs/RfPs for
interoperability and electronic exchange
of health information would help
improve routine electronic transfer of
health information as well as overall
patient/resident care and safety?
• Under new or revised CoPs/CfCs/
RfPs, should non-electronic forms of
sharing medically necessary information
(for example, printed copies of patient/
resident discharge/transfer summaries
shared directly with the patient/resident
or with the receiving provider or
supplier, either directly transferred with
the patient/resident or by mail or fax to
the receiving provider or supplier) be
permitted to continue if the receiving
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
provider, supplier, or patient/resident
cannot receive the information
electronically?
• Are there any other operational or
legal considerations (for example,
implementing regulations related to the
HIPAA privacy and security standards),
obstacles, or barriers that hospitals and
other providers and suppliers would
face in implementing changes to meet
new or revised interoperability and
health information exchange
requirements under new or revised CMS
CoPs/CfCs/RfPs if they are proposed and
finalized in the future?
• What types of exceptions, if any, to
meeting new or revised interoperability
and health information exchange
requirements should be allowed under
new or revised CMS CoPs/CfCs/RfPs if
they are proposed and finalized in the
future? Should exceptions under the
QPP, including CEHRT hardship or
small practices, be extended to new
requirements? Would extending such
exceptions impact the effectiveness of
these requirements?
We would also like to directly address
the issue of communication between
hospitals (as well as the other providers
and suppliers across the continuum of
patient care) and their patients and
caregivers. MyHealthEData is a
government-wide initiative aimed at
breaking down barriers that contribute
to preventing patients from being able to
access and control their medical
records. Privacy and security of patient
data will be at the center of all CMS
efforts in this area. CMS must protect
the confidentiality of patient data, and
CMS is completely aligned with the
Department of Veterans Affairs (VA), the
National Institutes of Health (NIH),
ONC, and the rest of the Federal
Government, on this objective.
While some Medicare beneficiaries
have had, for quite some time, the
ability to download their Medicare
claims information, in pdf or Excel
formats, through the CMS Blue Button
platform, the information was provided
without any context or other
information that would help
beneficiaries understand what the data
were really telling them. For
beneficiaries, their claims information is
useless if it is either too hard to obtain
or, as was the case with the information
provided through previous versions of
Blue Button, hard to understand. In an
effort to fully contribute to the Federal
Government’s MyHealthEData initiative,
CMS developed and launched the new
Blue Button 2.0, which represents a
major step toward giving patients
meaningful control of their health
information in an easy-to-access and
understandable way. Blue Button 2.0 is
PO 00000
Frm 00135
Fmt 4701
Sfmt 4702
32473
a developer-friendly, standards-based
application programming interface (API)
that enables Medicare beneficiaries to
connect their claims data to secure
applications, services, and research
programs they trust. The possibilities for
better care through Blue Button 2.0 data
are exciting, and might include enabling
the creation of health dashboards for
Medicare beneficiaries to view their
health information in a single portal, or
allowing beneficiaries to share complete
medication lists with their doctors to
prevent dangerous drug interactions.
To fully understand all of these health
IT interoperability issues, initiatives,
and innovations through the lens of its
regulatory authority, CMS invites
members of the public to submit their
ideas on how best to accomplish the
goal of fully interoperable health IT and
EHR systems for Medicare- and
Medicaid-participating providers and
suppliers, as well as how best to further
contribute to and advance the
MyHealthEData initiative for patients.
We are particularly interested in
identifying fundamental barriers to
interoperability and health information
exchange, including those specific
barriers that prevent patients from being
able to access and control their medical
records. We also welcome the public’s
ideas and innovative thoughts on
addressing these barriers and ultimately
removing or reducing them in an
effective way, specifically through
revisions to the current CMS CoPs, CfCs,
and RfPs for hospitals and other
participating providers and suppliers.
We have received stakeholder input
through recent CMS Listening Sessions
on the need to address health IT
adoption and interoperability among
providers that were not eligible for the
Medicare and Medicaid EHR Incentives
program, including long-term and postacute care providers, behavioral health
providers, clinical laboratories and
social service providers, and we would
also welcome specific input on how to
encourage adoption of certified health
IT and interoperability among these
types of providers and suppliers as well.
B. Request for Information on Price
Transparency: Improving Beneficiary
Access to Home Health Agency Charge
Information
In the FY 2019 IPPS/LTCH PPS
proposed rule (83 FR 20548 and 20549)
and the FY 2015 IPPS/LTCH PPS
proposed and final rules (79 FR 28169
and 79 FR 50146, respectively), we
stated that we intend to continue to
review and post relevant charge data in
a consumer-friendly way, as we
previously have done by posting
hospital and physician charge
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32474
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
information on the CMS website.107 In
the FY 2019 IPPS/LTCH PPS proposed
rule, we also continued our discussion
of the implementation of section 2718(e)
of the Public Health Service Act, which
aims to improve the transparency of
hospital charges. This discussion in the
FY 2019 IPPS/LTCH PPS proposed rule
continued a discussion we began in the
FY 2015 IPPS/LTCH PPS proposed rule
and final rule (79 FR 28169 and 79 FR
50146, respectively). In all of these
rules, we noted that section 2718(e) of
the Public Health Service Act requires
that each hospital operating within the
United States, for each year, establish
(and update) and make public (in
accordance with guidelines developed
by the Secretary) a list of the hospital’s
standard charges for items and services
provided by the hospital, including for
diagnosis-related groups (DRGs)
established under section 1886(d)(4) of
the Social Security Act. In the FY 2015
IPPS/LTCH PPS proposed and final
rules, we reminded hospitals of their
obligation to comply with the
provisions of section 2718(e) of the
Public Health Service Act and provided
guidelines for its implementation. We
stated that hospitals are required to
either make public a list of their
standard charges (whether that be the
chargemaster itself or in another form of
their choice) or their policies for
allowing the public to view a list of
those charges in response to an inquiry.
In the FY 2019 IPPS/LTCH PPS
proposed rule, we took one step to
further improve the public accessibility
of charge information. Specifically,
effective January 1, 2019, we are
updating our guidelines to require
hospitals to make available a list of their
current standard charges via the internet
in a machine readable format and to
update this information at least
annually, or more often as appropriate.
In general, we encourage all providers
and suppliers to undertake efforts to
engage in consumer-friendly
communication of their charges to help
patients understand what their potential
financial liability might be for services
they obtain, and to enable patients to
compare charges for similar services.
We encourage providers and suppliers
to update this information at least
annually, or more often as appropriate,
to reflect current charges.
We are concerned that challenges
continue to exist for patients due to
insufficient price transparency. Such
challenges include patients being
107 See, for example, Medicare Provider
Utilization and Payment Data, available at: https://
www.cms.gov/Research-Statistics-Data-andSystems/Statistics-Trends-and-Reports/MedicareProvider-Charge-Data/index.html.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
surprised by out-of-network bills for
physicians, such as anesthesiologists
and radiologists, who provide services
at in-network hospitals and in other
settings, and patients being surprised by
facility fees, physician fees for
emergency department visits, or fees for
services that are part of the beneficiary’s
episode of care but that are not
otherwise included in a hospital’s
chargemaster (for example, home health
or physical therapy services that follow
a hospital stay but are billed separately).
We also are concerned that, for
providers and suppliers that maintain a
list of standard charges, the charge data
may not be helpful to patients for
determining what they are likely to pay
for a particular service or facility
encounter. In order to promote greater
price transparency for patients, we are
considering ways to improve the
accessibility and usability of current
charge information.
We also are considering potential
actions that would be appropriate to
further our objective of having providers
and suppliers undertake efforts to
engage in consumer-friendly
communication of their charges to help
patients understand what their potential
financial liability might be for services
they obtain from the provider or
supplier, and to enable patients to
compare charges for similar services
across providers and suppliers,
including when services could be
offered in more than one setting.
Therefore, we are seeking public
comment from all providers and
suppliers, including home health
agencies, on the following:
• How should we define ‘‘standard
charges’’ in the home health setting? Is
there one definition for those settings
that maintain chargemasters, and
potentially a different definition for
those settings that do not maintain
chargemasters? Should ‘‘standard
charges’’ be defined to mean: average or
median rates for the items on a
chargemaster or other price list or
charge list; average or median rates for
groups of items and/or services
commonly billed together, as
determined by the HHA based on its
billing patterns; or the average discount
off the chargemaster, price list or charge
list amount across all payers, either for
each separately enumerated item or for
groups of services commonly billed
together? Should ‘‘standard charges’’ be
defined and reported for both some
measure of the average contracted rate
and the chargemaster, price list or
charge list? Or is the best measure of a
HHA’s standard charges its
chargemaster, price list or charge list?
PO 00000
Frm 00136
Fmt 4701
Sfmt 4702
• What types of information would be
most beneficial to patients, how can
HHAs best enable patients to use charge
and cost information in their decisionmaking, and how can CMS and HHAs
help third parties create patient-friendly
interfaces with these data?
• Should HHAs be required to inform
patients how much their out-of- pocket
costs for a service will be before those
patients are furnished that service? How
can information on out-of-pocket costs
be provided to better support patients’
choice and decision-making? What
changes would be needed to support
greater transparency around patient
obligations for their out-of-pocket costs?
How can CMS help beneficiaries to
better understand how co-pays and coinsurance are applied to each service
covered by Medicare? What can be done
to better inform patients of their
financial obligations? Should HHAs
play any role in helping to inform
patients of what their out-of-pocket
obligations will be?
• If HHAs were required to provide
patients with information on what
Medicare pays for a particular service
performed by that HHA, what changes
would need to be made by HHAs? What
burden would be added as a result of
such a requirement?
In addition, we are seeking public
comment on improving a Medigap
patient’s understanding of his or her
out-of-pocket costs prior to receiving
services, especially with respect to the
following particular questions:
• How does Medigap coverage affect
patients’ understanding of their out-ofpocket costs before they receive care?
What challenges do HHAs face in
providing information about out-ofpocket costs to patients with Medigap?
What changes can Medicare make to
support HHAs that share out-of-pocket
cost information with patients that
reflects the patient’s Medigap coverage?
Who is best situated to provide patients
with clear Medigap coverage
information on their out-of-pocket costs
prior to receipt of care? What role can
Medigap plans play in providing
information to patients on their
expected out-of-pocket costs for a
service? What state-specific
requirements or programs help educate
Medigap patients about their out-ofpocket costs prior to receipt of care?
VII. Collection of Information
Requirements
Under the Paperwork Reduction Act
of 1995, we are required to provide 60day notice in the Federal Register and
solicit public comment before a
collection of information requirement is
submitted to the Office of Management
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
and Budget (OMB) for review and
approval. In order to fairly evaluate
whether an information collection
should be approved by OMB, section
3506(c)(2)(A) of the Paperwork
Reduction Act of 1995 requires that we
solicit comment on the following issues:
• The need for the information
collection and its usefulness in carrying
out the proper functions of our agency.
• The accuracy of our estimate of the
information collection burden.
• The quality, utility, and clarity of
the information to be collected.
• Recommendations to minimize the
information collection burden on the
affected public, including automated
collection techniques.
A. Wage Estimates
To derive average costs, we used data
from the U.S. Bureau of Labor Statistics’
32475
May 2017 National Occupational
Employment and Wage Estimates for all
salary estimates (http://www.bls.gov/
oes/current/oes_nat.htm). In this regard,
the following table (Table 57) presents
the mean hourly wage rate, fringe
benefits costs and overhead (calculated
at 100 percent of salary), and the
adjusted hourly wage.
TABLE 57—MAY 2017 NATIONAL INDUSTRY–SPECIFIC OCCUPATIONAL EMPLOYMENT AND WAGE ESTIMATES—NAICS
621600—HOME HEALTH CARE SERVICES
Occupation
code
Occupation title
Registered Nurse (RN) ....................................................................................
Physical therapists HHAs ................................................................................
Speech-Language Pathologists (SLP) ............................................................
Occupational Therapists (OT) .........................................................................
amozie on DSK3GDR082PROD with PROPOSALS2
This proposed rule makes reference to
associated information collections that
are not discussed in the regulation text
contained in this document. These
proposed changes are associated with
the Information Collection Request (ICR)
for CMS–10545—Outcome and
Assessment Information Set (OASIS)
OASIS–C2/ICD–10, approved under
OMB control number 0938–1279. We
note that on March 12, 2018 we
published a notice in the Federal
Register seeking public comment on a
revision to CMS–10545 (OMB control
number 0938–1279), which would
modify the OASIS and refer to the
revised item set as the OASIS–D upon
implementation of the revised data set
on January 1, 2019 (83 FR 10730). We
are soliciting public comment on
additional changes related to when
certain OASIS items are required to be
completed by HHA clinicians due to the
proposed implementation of the patientdriven groupings model (PDGM) for CY
2020, as outlined in section III.F of this
proposed rule; and the changes to due
to the proposed removal of HH QRP
measures beginning with the CY 2021
HH QRP, as outlined in section V.E of
this proposed rule.
B. ICRs Regarding the OASIS
We believe that the burden associated
with the OASIS is the time and effort
associated with data collection and
reporting. As of April 1, 2018, there are
approximately 11,623 HHAs reporting
OASIS data to CMS.
In section V.E.1 of the proposed rule,
we are proposing to remove the
Depression Assessment Conducted
Measure from the HH QRP beginning
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
29–1141
29–1123
29–1127
29–1122
with the CY 2021 HH QRP under our
proposed Factor 1. Measure
performance among HHAs is so high
and unvarying that meaningful
distinctions in improvements in
performance can no longer be made.
The removal of this measure will not
impact collection of information
because OASIS Item M1730, which is
used to calculate this measure, is also
used as a risk adjuster to calculate other
OASIS-based outcome measures
currently adopted for the HH QRP.108
In section V.E.2 of the proposed rule,
we are proposing to remove the Diabetic
Foot Care and Patient/Caregiver
Education Implemented during All
Episodes of Care Measure from the HH
QRP beginning with the CY 2021 HH
QRP under our proposed Factor 1.
Measure performance among HHAs is so
high and unvarying that meaningful
distinctions in improvements in
performance can no longer be made.
This measure is calculated using OASIS
Item M2401, row a at the time point of
Transfer to an Inpatient Facility (TOC)
and Discharge from Agency—Not to an
Inpatient Facility (Discharge).
Specifically, we are proposing to
remove this one data element at the
TOC and Discharge time points.
108 The OASIS-based HH QRP outcome measures
that use OASIS Item M1730 as a risk adjuster in the
calculation of the measure are: Improvement in
Bathing (NQF #0174), Improvement in Bed
Transferring (NQF #0175), Improvement in
Ambulation/Locomotion (NQF #0167),
Improvement in Dyspnea, Improvement in Pain
Interfering with Activity (NQF #0177),
Improvement in Management of Oral Medications
(NQF #0176), and Improvement in Status of
Surgical Wounds (NQF #0178).
PO 00000
Frm 00137
Fmt 4701
Sfmt 4702
Mean
hourly wage
($/hr)
$33.77
46.19
43.93
43.70
Fringe
benefits and
overhead
(100%) ($/hr)
$33.77
46.19
43.93
43.70
Adjusted
hourly wage
($/hr)
$67.54
92.38
87.86
87.40
In section V.E.3 of the proposed rule,
we are proposing to remove the
Multifactor Fall Risk Assessment
Conducted For All Patients Who Can
Ambulate (NQF #0537) Measure from
the HH QRP beginning with the CY
2021 HH QRP under our proposed
Factor 1. Measure performance among
HHAs is so high and unvarying that
meaningful distinctions in
improvements in performance can no
longer be made. This measure is
calculated using OASIS Item M1910 at
the time point of SOC/ROC.
Specifically, we are proposing to
remove this one data element at the
SOC/ROC time point.
In section V.E.4 of the proposed rule,
we are proposing to remove the
Pneumococcal Polysaccharide Vaccine
Ever Received Measure from the HH
QRP beginning with the CY 2021 HH
QRP, under our proposed Factor 3. A
measure does not align with current
clinical guidelines or practice. This
measure is calculated using OASIS
Items M1051 and M1056 at the time
points of TOC and Discharge.
Specifically, we are proposing to
remove these two data elements at the
TOC and Discharge time points.
In section V.E.5 of the proposed rule,
we are proposing to remove the
Improvement in the Status of Surgical
Wounds Measure from the HH QRP
beginning with the CY 2021 HH QRP
under our proposed Factor 4. A more
broadly applicable measure (across
settings, populations, or conditions) for
the particular topic is available. The
removal of this measure will not impact
collection of information because
OASIS Items M1340 and M1342 are
E:\FR\FM\12JYP2.SGM
12JYP2
32476
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
used as risk adjusters to calculate other
OASIS-based outcome measures
currently adopted for the HH QRP and
OASIS Items M1340 and M1342 are also
used for the Potentially Avoidable
Events measure Discharged to the
Community Needing Wound Care or
Medication Assistance that is used by
HH surveyors during the survey
process.109 110
In sections V.E.6 and V.E.7 of the
proposed rule, we are proposing to
remove the Emergency Department Use
without Hospital Readmission during
the First 30 Days of HH (NQF #2505)
Measure and the Rehospitalization
during the First 30 Days of HH (NQF
#2380) Measure from the HH QRP
beginning with the CY 2021 HH QRP
under our proposed Factor. A more
broadly applicable measure (across
settings, populations, or conditions) for
the particular topic is available. Because
these are both claims-based measures,
their removal will not impact collection
of information.
Therefore, we are proposing the net
reduction of 1 data element at SOC, 1
data element at ROC, 3 data elements at
TOC and 3 data elements at Discharge
associated with OASIS item collection
as a result of the measure removal
proposals from the HH QRP.
The OASIS instrument is used for
meeting the home health Conditions of
Participation, requirements under the
HH QRP, and for payment purposes
under the HH PPS. As outlined in
section III.F of this proposed rule, to
calculate the case-mix adjusted payment
amount for the PDGM, we are proposing
to add collection of two current OASIS
items (10 data elements) at the FU time
point:
• M1033: Risk for Hospitalization
(9 data elements)
• M1800: Grooming (1 data element)
As outlined in section III.F of this
proposed rule, several OASIS items
would not be needed in case-mix
adjusting the period payment for the
PDGM; therefore, we are proposing to
make 19 current OASIS items (48 data
elements) optional at the FU time point:
• M1021: Primary Diagnosis (3 data
elements)
• M1023: Other Diagnosis (15 data
elements)
• M1030: Therapies (3 data elements)
• M1200: Vision (1 data element)
• M1242: Frequency of Pain Interfering
(1 data element)
• M1311: Current Number of Unhealed
Pressure Ulcers at Each Stage (12 data
elements)
• M1322: Current Number of Stage 1
Pressure Ulcers (1 data element)
• M1324: Stage of Most Problematic
Unhealed Pressure Ulcer that is
Stageable (1 data element)
• M1330: Does this patient have a Stasis
Ulcer? (1 data element)
• M1332: Current Number of Stasis
Ulcer(s) that are Observable (1 data
element)
• M1334: Status of Most Problematic
Stasis Ulcer that is Observable (1 data
element)
• M1340: Does this patient have a
Surgical Wound (1 data element)
• M1342: Status of Most Problematic
Surgical Wound that is Observable
(1 data element)
• M1400: Short of Breath (1 data
element)
• M1610: Urinary Incontinence or
Urinary Catheter Presence (1 data
element)
• M1620: Bowel Incontinence
Frequency (1 data element)
• M1630: Ostomy for Bowel
Elimination (1 data element)
• M2030: Management of Injectable
Medications (1 data element)
• M2200: Therapy Need (1 data
element)
Therefore, we are proposing the net
reduction of 38 data elements at FU
associated with OASIS item collection
as a result of the implementation of the
PDGM for CY 2020.
In summary, under our proposals,
there would be a net reduction of 1 data
element at SOC, 1 data element at ROC,
38 data elements at FU, 3 data elements
at TOC and 3 data elements at Discharge
associated with OASIS item collection
as a result of the measure removal
proposals from the HH QRP and the
proposed implementation of the PDGM
starting January 1, 2020.
We assume that each data element
requires 0.3 minutes of clinician time to
complete. Therefore, we estimate that
there would be a reduction in clinician
burden per OASIS assessment of 0.3
minutes at SOC, 0.3 minutes at ROC,
11.4 minutes at FU, 0.9 minutes at TOC
and 0.9 minutes at Discharge.
The OASIS is completed by RNs or
PTs, or very occasionally by
occupational therapists (OT) or speech
language pathologists (SLP/ST). Data
from 2016 show that the SOC/ROC
OASIS is completed by RNs
(approximately 87 percent of the time),
PTs (approximately 12.7 percent of the
time), and other therapists, including
OTs and SLP/STs (approximately 0.3
percent of the time). We estimated a
weighted clinician average hourly wage
of $70.75, inclusive of fringe benefits,
using the hourly wage data in Table 57.
Individual providers determine the
staffing resources necessary.
Table 58 shows the total number of
assessments submitted in CY 2017 and
estimated burden at each time point.
TABLE 58—CY 2017 OASIS SUBMISSIONS AND ESTIMATED BURDEN, BY TIME POINT
CY 2017
assessments
completed
amozie on DSK3GDR082PROD with PROPOSALS2
Time point
Estimated
burden
($)
Start of Care ................................................................................................................................................
Resumption of Care .....................................................................................................................................
Follow-up .....................................................................................................................................................
Transfer to an inpatient facility ....................................................................................................................
Death at Home ............................................................................................................................................
Discharge from agency ................................................................................................................................
6,420,299
1,062,962
3,688,651
1,925,270
41,183
5,249,483
¥$2,271,180.77
¥376,022.81
¥49,584,691.07
¥2,043,192.79
0
¥5,571,013.83
Total ......................................................................................................................................................
18,387,848
¥59,846,101.27
* Estimated Burden ($) at each Time-Point = (# CY 2017 Assessments Completed) × (clinician burden [min]/60) × ($70.75 [weighted clinician
average hourly wage]).
109 The OASIS-based HH QRP outcome measures
that use OASIS Items M1340 and M1342 as a risk
adjuster in the calculation of the measure are:
Improvement in Bathing (NQF #0174),
Improvement in Bed Transferring (NQF #0175),
Improvement in Ambulation/Locomotion (NQF
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
#0167), Improvement in Dyspnea, Improvement in
Pain Interfering with Activity (NQF #0177), and
Improvement in Management of Oral Medications
(NQF #0176).
110 Measure specifications can be found in the
Home Health Potentially Avoidable Events
PO 00000
Frm 00138
Fmt 4701
Sfmt 4702
Measures Table on the Home Health Quality
Measures website (https://www.cms.gov/Medicare/
Quality-Initiatives-Patient-Assessment-Instruments/
HomeHealthQualityInits/Downloads/Home-HealthPAE-Measures-Table-OASIS-C2_4-11-18.pdf).
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
Based on the data in Table 58 for the
11,623 active Medicare-certified HHAs
in April 2018, we estimate the total
average decrease in cost associated with
proposed changes with OASIS item
collection at $5,148.94 per HHA
annually, or $59,846,101.27 for all
HHAs annually. This corresponds to an
estimated reduction in clinician burden
associated with changes to collection of
information associated with the OASIS
of 72.8 hours per HHA annually, or
845,881.3 hours for all HHAs annually.
This decrease in burden would be
accounted for in the information
collection under OMB control number
0938–1279.
C. ICRs Regarding Home Infusion
Therapy
At § 486.520, Plan of Care, we propose
that all patients must have a plan of care
established by a physician that
prescribes the type, amount, and
duration of infusion therapy services
that are to be furnished. This
requirement directly implements
section 5012 of the 21st Cures Act.
Accredited home infusion therapy
suppliers are already required by their
accrediting bodies to provide all care in
accordance with a plan of care that
specifies the type, amount, and duration
of infusion therapy services to be
furnished to each patient; therefore this
proposed requirement would not
impose a burden upon accredited
agencies. Furthermore, all existing home
infusion therapy suppliers are already
accredited due to existing payment
requirements established by private
insurers and Medicare Advantage plans.
In accordance with the implementing
regulations of the PRA at 5 CFR
1320.3(b)(3), this requirement exists
even in the absence of a federal
requirement; therefore, the associated
burden is not subject to the PRA.
amozie on DSK3GDR082PROD with PROPOSALS2
D. ICRs Regarding the Approval and
Oversight of Accrediting Organizations
for Home Infusion Therapy
1. Background
We are proposing to establish a new
set of regulations related to the approval
and oversight of accrediting
organizations that accredit home
infusion therapy suppliers. If finalized,
these new regulatory requirements
would impose burden on those new
AOs that seek approval of their Home
Infusion Therapy accreditation program.
This burden would include, but is not
limited to the time and costs associated
with the following activities: (1)
Preparation and filing of an initial
application seeking CMS approval of the
AOs home infusion therapy
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
accreditation program; (2) participation
in the application review process (that
is, meetings, provide additional
information and materials that may be
required, participate in a site visit, etc.);
(3) seeking new accreditation clients; (4)
performing on-site surveys, off-site
survey audits or the performance of
other types of survey activities; (5)
participation in CMS ongoing
accreditation program review activities;
(6) performance of periodic reaccreditation activities; (7) investigation
of complaints and performing complaint
surveys; (8) administration of the
appeals process for providers that have
been denied accreditation; (9) staff
training, in-services and continuing
education; and (10) ensuring that
surveyor staff have the proper
education, training, and credentials.
The following is a discussion of the
potential ICR burdens associated with
the proposed home infusion therapy
supplier accreditation oversight
regulations and well as any PRA
exceptions that may apply.
2. Applicable PRA Exception
We believe that the information
collection burden associated with the
preparation and submission of an initial
or renewal application for approval and
designation as an home infusion therapy
AO and the participation in other
accreditation related activities does not
meet the definition of ‘‘collection of
information’’ as defined in 5 CFR
1320.3(c) because it is ‘‘not imposed on
10 or more persons.’’ This information
collection burden would be imposed
only on those national AOs that accredit
home infusion therapy suppliers.
At this time, there are five CMSapproved AOs and one non-CMSapproved AO that provide accreditation
for home infusion therapy suppliers
(that is, The Joint Commission (TJC),
Accreditation Commission for Health
Care (ACHC), The Compliance Team
(TCT), Community Health Accreditation
Partner (CHAP), Healthcare Quality
Association on Accreditation, and
National Association of Boards of
Pharmacy). However, these AOs offer
home infusion therapy accreditation as
part of the deeming accreditation of
home health agencies or the home
infusion therapy accreditation provided
is CMS approved.
In this proposed rule, we have
proposed to require that these AO must
apply for CMS approval of a home
infusion therapy accreditation that is
separate and distinct from its home
health accreditation program. When we
do solicit AOs to accredit home infusion
therapy suppliers, we do not anticipate
receiving more than the six applications
PO 00000
Frm 00139
Fmt 4701
Sfmt 4702
32477
which would be submitted by the
existing AOs seeking approval of a
home infusion therapy accreditation
program, because this is a specialized
area of accreditation.
It is possible that the number of AOs
that we designate to accredit home
infusion therapy suppliers may increase
to 10 or more in the future, when we
begin accepting applications for home
infusion therapy AOs. However, we do
not anticipate that the number of AOs
that would accredit home infusion
therapy suppliers would increase to 10
or more in the foreseeable future.
Should the number of AOs that
accredit home infusion therapy
suppliers rise to 10 or more, we would
prepare and submit an information
collection request (ICR) for the burden
associated with the accreditation
process, as well as obtain OMB
approval, prior to accepting additional
applications.
E. ICR Regarding Modifications to 42
CFR 488.5
We have proposed to modify the AO
approval and oversight regulations for
Medicare certified providers and
suppliers by adding 2 new
requirements. The first proposed new
requirement is to added to § 488.5(a)(7)
and is a requirement that in their
application for CMS approval, the AOs
that accredited Medicare certified
providers and suppliers must include a
statement acknowledging that all
accrediting organization surveyors have
completed or will complete the relevant
program specific CMS online trainings
established for state surveyors, initially,
and thereafter. The second requirement
is to be added as § 488.5(a)(18)(iii) and
would require that the AOs for Medicare
certified providers and suppliers
include a written statement in their
application for CMS approval agreeing
that if a fully accredited and deemed
facility in good standing provides
written notification that they wish to
voluntarily withdraw from the
accrediting organization’s CMSapproved accreditation program, the
accrediting organization must continue
the facility’s current accreditation in full
force and effect until the effective date
of withdrawal identified by the facility
or the expiration date of the term of
accreditation, whichever comes first.
1. Burden Associated With CMS Online
Training for AO Surveyors
CMS provides a number of online
surveyor training modules that are
available to the State Survey Agency
surveyors. We have proposed to require
the AO surveyors to take this training in
an attempt to decrease the historically
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32478
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
high disparity rate between the AOs
survey results and those of the
validation surveys performed by the
State Survey Agency surveyors.
There are a total of 163 online training
programs that are available the State
Survey Agency surveyors on the CMS
Surveyor Training website. This website
provides courses that are general in
nature such as ‘‘Principles of
Documentation Learning Activity—Long
Term Care’’ and ‘‘Basic Writing Skills
for Surveyor Staff’’, infection control,
patient safety, Emergency Preparedness.
The CMS Surveyor Training website
also offers courses related to specific
healthcare settings, services, and
regulations such as hospitals, CAHs,
ASCs, CLIA, Community Mental Health
Centers, EMTALA, Federally Qualified
Health Centers (FQHCs), Home Health
Agencies and OASIS, Hospices, Nursing
Homes and the MDS, Outpatient
Physical Therapy/Outpatient Speech
Therapy. These courses are self-paced
and the person taking the course can
take the courses over a period of time.
The amount of time required to
complete each of these training course
varies depending on the pace at which
the trainee completes the training.
We estimate that each SA surveyor
takes approximately 10 of these courses.
We further estimate that it would take
approximately 3–5 hours to complete
each of these courses. Therefore a SA
surveyor would incur a time burden of
30–50 hours for the completion of these
CMS surveyor training courses. We
believe that the surveyors for AOs that
accredit Medicare certified providers
would need to take the same number
and type of surveyor training courses as
the SA surveyors (that is—
approximately 10 courses). This means
that each of the AOs surveyors that
takes this training would incur a time
burden in the amount of 30–50 hours.
The AOs that accredit Medicare
certified providers and suppliers would
incur a cost burden for the wages of
their surveyors for the time they spend
taking these online surveyor training
courses. Most surveyors are clinicians
such as Registered Nurses. According to
the U.S. Bureau of Labor Statistics, the
mean hourly wage for a Registered
Nurse is $35.36 (https://www.bls.gov/
oes/current/oes291141.htm). As noted
above, we estimated that it would take
approximately 30–50 hours for each AO
surveyor to complete 10 online surveyor
courses. Therefore, the AO would incur
wages in the amount of $1,060.80 to
$1,768.00 per each surveyor that
completes the CMS online surveyor
training. The AO would also incur
additional costs for fringe benefits and
overhead in the amount of $1,060.80 to
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
$1,768.00 per each surveyor that
completes the CMS online surveyor
training.
We are not able to accurately estimate
to total time and cost burden to each AO
for the wages incurred for the time spent
by all surveyors of that AO that take the
CMS online surveyor training courses,
because we do not know exactly how
many surveyors each AO has. However,
if we estimate that each AO has 15
surveyors, the estimated time burden to
each AO associated with this
requirement would be 450 to 750 hours
((30 hours × 15 surveyors = 450 hours
per all surveyors) and (50 hours × 15
surveyors = 750 hours per all
surveyors)). The estimated cost burden
to each AO for Medicare certified
providers and supplies associated with
this requirement would be $31,824 to
$53,040 (($1,060.80 × 15 = $15,912) and
($1,768.00 × 15= $26,520) and ($15,912
to $26,520 for fringe benefits and
overhead)).
There are currently 9 AOs that
accredit Medicare certified providers
and suppliers. We estimate that the time
burden across all of these AOs
associated with the requirement that
their surveyors take the CMS online
surveyor training would be 4,050 to
6,750 ((450 hours per all surveyors/AO
× 9 AOs = 4,050 hours across all AOs)
and (750 hours per all surveyors/AO ×
9 AOs = 6,750 hours across all AOs).
The estimated cost across all AOs that
accredit Medicare certified providers
and suppliers would be $763,776
($15,912 × 9 AOs = $143,208) and
($26,520 × 9 AOs = $238,680) and
($381,888 for fringe benefits and
overhead).
However, we believe that the
information collection burden
associated with the requirement that the
surveyors of AOs that accredit Medicare
certified providers and suppliers does
not meet the definition of ‘‘collection of
information’’ as defined in 5 CFR
1320.3(c) because it is ‘‘not imposed on
10 or more persons.’’ This information
collection burden would be imposed
only on those AOs that accredit
Medicare certified providers and
suppliers. At this time, there are nine
CMS-approved AOs that accredit
Medicare certified providers and
suppliers (that is, AAAASF, AAAHC,
ACHC, AOA–HFAP, Community Health
Accreditation Partner (CHAP), CIHQ,
DNV–GL, The Joint Commission (TJC),
Accreditation Commission for Health
Care (ACHC), The Compliance Team
(TCT)). Should the number of AOs that
accredit Medicare certified providers
and suppliers rise to 10 or more, we will
seek OMB approval for the burden
PO 00000
Frm 00140
Fmt 4701
Sfmt 4702
associated with the accreditation
process.
2. Burden Associated With the
Requirement for AOs To Continue a
Medicare-Certified Provider’s or
Supplier’s Accreditation
This proposal would require the AOs
for Medicare certified providers and
suppliers to include a written statement
in their application for CMS approval of
their accreditation program, agreeing
that if a fully accredited and deemed
facility in good standing provides
written notification that they wish to
voluntarily withdraw from the
accrediting organization’s CMSapproved accreditation program, the
accrediting organization must continue
the facility’s current accreditation in full
force and effect until the effective date
of withdrawal identified by the facility
or the expiration date of the term of
accreditation, whichever comes first.
We believe that the AO would incur
limited burden associated with this task,
because this regulation simply requires
that the AOs include a written statement
in their application stating that they
agree to continue the facility’s current
accreditation in full force and effect
until the effective date of withdrawal
identified by the facility or the
expiration date of the term of
accreditation, whichever comes first, if
a provider of supplier provides written
notification that they wish to
voluntarily withdraw from the
accrediting organization’s CMSapproved accreditation program. All
AOs that accredit Medicare certified
providers and suppliers are required to
submit an initial application to CMS
when they first seek CMS approval and
to submit renewal applications to CMS
every 6 years thereafter. In accordance
wirh 42 CFR 488.5, the AOs are required
to provide a number of written
acknowledgements with their
application. We believe that the AO
could add the required written
statement to the other written
acknowledgements that are included
with their applications. As the AO
would already be preparing the other
acknowledgements required to be
submitted with their application, it
would be little if any additional burden
for the AO to add the required written
statement to their application.
We estimate that the required written
statement would consist of only 1–2
sentences and would take no more than
5 minutes to prepare. We further believe
that clinicians such as registered nurses
would prepare the required statement to
be included in the AOs application.
According to the U.S. Bureau of Labor
Statistics, the mean hourly wage for a
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
non-industry specific registered nurse is
$35.36 (https://www.bls.gov/oes/
current/oes291141.htm). Therefore, the
estimated cost burden to the AOs
associated with the preparation of the
written statement would be
approximately $17.68 (15 minutes ×
$35.36 per hour = $8.84 plus $8.84 in
fringe benefits and overhead = $17.68).
There are 9 AOs that accredit
Medicare certified providers and
suppliers. The estimated time burden
across all of these AOs would be 45
minutes (15 minutes × 9 AOs = 135
minutes per all AOs). The estimated
cost burden across all AOs that accredit
Medicare certified providers and
suppliers would be $159.12 ($8.84 × 9
AOs = $79.56 per all AOs + $79.56 for
fringe benefits and overhead).
However, we believe that the
information collection burden
associated with the requirement that the
AOs that accredit Medicare certified
providers and suppliers provide a
written statement in their application
stating that they agree to continue the
facility’s current accreditation in full
force and effect until the effective date
of withdrawal identified by the facility
or the expiration date of the term of
accreditation, whichever comes first, if
a provider or supplier provides written
notification that they wish to
voluntarily withdraw from the
accrediting organization’s CMSapproved accreditation program, does
not meet the definition of ‘‘collection of
information’’ as defined in 5 CFR
1320.3(c) because it is ‘‘not imposed on
10 or more persons.’’ This information
collection burden would be imposed
only on those AOs that accredit
Medicare-certified providers and
suppliers. At this time, there are nine
CMS-approved AOs that accredit
Medicare-certified providers and
suppliers (that is, AAAASF, AAAHC,
ACHC, AOA–HFAP, Community Health
Accreditation Partner (CHAP), CIHQ,
DNV–GL, The Joint Commission (TJC),
The Compliance Team (TCT)). Should
the number of AOs that accredit
Medicare certified providers or
suppliers rise to 10 or more, we will
seek OMB approval for the burden
associated with the accreditation
process.
F. Submission of PRA-Related
Comments
We have submitted a copy of this
proposed rule to OMB for its review of
the rule’s information collection and
recordkeeping requirements. The
requirements are not effective until they
have been approved by OMB.
We invite public comments on these
information collection requirements. If
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
you wish to comment, please identify
the rule (CMS–1689–P) and, where
applicable, the ICR’s CFR citation, CMS
ID number, and OMB control number.
To obtain copies of a supporting
statement and any related forms for the
proposed collection(s) summarized in
this notice, you may make your request
using one of following:
1. Access CMS’ website address at
https://www.cms.gov/Regulations-andGuidance/Legislation/PaperworkRed
uctionActof1995/PRA-Listing.html.
2. Email your request, including your
address, phone number, OMB number,
and CMS document identifier, to
[email protected].
3. Call the Reports Clearance Office at
(410) 786–1326.
See this rule’s DATES and ADDRESSES
sections for the comment due date and
for additional instructions.
VIII. Regulatory Impact Analysis
A. Statement of Need
1. Home Health Prospective Payment
System (HH PPS)
Section 1895(b)(1) of the Act requires
the Secretary to establish a HH PPS for
all costs of home health services paid
under Medicare. In addition, section
1895(b) of the Act requires: (1) The
computation of a standard prospective
payment amount include all costs for
home health services covered and paid
for on a reasonable cost basis and that
such amounts be initially based on the
most recent audited cost report data
available to the Secretary; (2) the
prospective payment amount under the
HH PPS to be an appropriate unit of
service based on the number, type, and
duration of visits provided within that
unit; and (3) the standardized
prospective payment amount be
adjusted to account for the effects of
case-mix and wage levels among HHAs.
Section 1895(b)(3)(B) of the Act
addresses the annual update to the
standard prospective payment amounts
by the HH applicable percentage
increase. Section 1895(b)(4) of the Act
governs the payment computation.
Sections 1895(b)(4)(A)(i) and
(b)(4)(A)(ii) of the Act require the
standard prospective payment amount
to be adjusted for case-mix and
geographic differences in wage levels.
Section 1895(b)(4)(B) of the Act requires
the establishment of appropriate casemix adjustment factors for significant
variation in costs among different units
of services. Lastly, section 1895(b)(4)(C)
of the Act requires the establishment of
wage adjustment factors that reflect the
relative level of wages, and wage-related
costs applicable to home health services
furnished in a geographic area
PO 00000
Frm 00141
Fmt 4701
Sfmt 4702
32479
compared to the applicable national
average level.
Section 1895(b)(3)(B)(iv) of the Act
provides the Secretary with the
authority to implement adjustments to
the standard prospective payment
amount (or amounts) for subsequent
years to eliminate the effect of changes
in aggregate payments during a previous
year or years that were the result of
changes in the coding or classification
of different units of services that do not
reflect real changes in case-mix. Section
1895(b)(5) of the Act provides the
Secretary with the option to make
changes to the payment amount
otherwise paid in the case of outliers
because of unusual variations in the
type or amount of medically necessary
care. Section 1895(b)(3)(B)(v) of the Act
requires HHAs to submit data for
purposes of measuring health care
quality, and links the quality data
submission to the annual applicable
percentage increase. Section 50208 of
the BBA of 2018 (Pub. L. 115–123)
requires the Secretary to implement a
new methodology used to determine
rural add-on payments for CYs 2019
through 2022.
Section 1895(b)(2) of the Act and
section 1895(b)(3)(A) of the Act, as
amended by section 51001(a)(1) and
51001(a)(2) of the BBA of 2018
respectively, require the Secretary to
implement a 30-day unit of service,
effective for CY 2020, and calculate a
30-day payment amount for CY 2020 in
a budget neutral manner, respectively.
In addition, section 1895(b)(4)(B) of the
Act, as amended by section 51001(a)(3)
of the BBA of 2018 requires the
Secretary to eliminate the use of the
number of therapy visits provided to
determine payment, also effective for
CY 2020.
Finally, the HHVBP Model applies a
payment adjustment based on an HHA’s
performance on quality measures to test
the effects on quality and expenditures.
2. Home Infusion Therapy
Section 1861(iii) of the Act, as added
by the Cures Act, sets forth three
elements for home infusion therapy
suppliers in three areas: (1) Ensuring
that all patients have a plan of care
established and updated by a physician
that sets out the care and prescribed
infusion therapy necessary to meet the
patient-specific needs, (2) having
procedures to ensure that remote
monitoring services associated with
administering infusion drugs in a
patient’s home are provided, and (3)
having procedures to ensure that
patients receive education and training
on the effective use of medications and
equipment in the home. These
E:\FR\FM\12JYP2.SGM
12JYP2
32480
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
provisions serve as the basis for
suppliers to participate in Medicare.
Section 1834(u) of the Act serves as
the basis for the establishment of a
prospective payment system for home
infusion therapy covered under
Medicare. Section 1834(u)(7) of the Act,
as added by BBA of 2018 requires the
Secretary to provide a temporary
transitional payment to eligible home
infusion therapy suppliers for items and
services associated with the furnishing
of transitional home infusion drugs for
CYs 2019 and 2020. Under this payment
methodology (as described in section
VI.C. of this proposed rule), the
Secretary would establish three
payment categories at amounts equal to
the amounts determined under the
Physician Fee Schedule established
under section 1848 for services
furnished during CY 2019 for codes and
units of such codes, determined without
application of the geographic
adjustment.
Section 1834(u)(5)(B) of the Act
requires the Secretary to designate
organizations to accredit qualified home
infusion therapy suppliers furnishing
home infusion therapy no later than
January 1, 2021. Qualified home
infusion therapy suppliers must furnish
infusion therapy to individuals with
acute or chronic conditions requiring
administration of home infusion drugs;
ensure the safe and effective provision
and administration of home infusion
therapy on a 7-day-a-week, 24-hour-aday basis; be accredited by an
accrediting organization designated and
approved by the Secretary; and meet
other such requirements as the Secretary
deems appropriate.
B. Overall Impact
We have examined the impacts of this
rule as required by Executive Order
12866 on Regulatory Planning and
Review (September 30, 1993), Executive
Order 13563 on Improving Regulation
and Regulatory Review (January 18,
2011), the Regulatory Flexibility Act
(RFA) (September 19, 1980, Pub. L. 96–
354), section 1102(b) of the Social
Security Act, section 202 of the
Unfunded Mandates Reform Act of 1995
(March 22, 1995; Pub. L. 104–4),
Executive Order 13132 on Federalism
(August 4, 1999), the Congressional
Review Act (5 U.S.C. 804(2)), and
Executive Order 13771 on Reducing
Regulation and Controlling Regulatory
Costs (January 30, 2017).
Executive Orders 12866 and 13563
direct agencies to assess all costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). Section 3(f) of Executive Order
12866 defines a ‘‘significant regulatory
action’’ as an action that is likely to
result in a rule: (1) Having an annual
effect on the economy of $100 million
or more in any 1 year, or adversely and
materially affecting a sector of the
economy, productivity, competition,
jobs, the environment, public health or
safety, or state, local or tribal
governments or communities (also
referred to as ‘‘economically
significant’’); (2) creating a serious
inconsistency or otherwise interfering
with an action taken or planned by
another agency; (3) materially altering
the budgetary impacts of entitlement
grants, user fees, or loan programs or the
rights and obligations of recipients
thereof; or (4) raising novel legal or
policy issues arising out of legal
mandates, the President’s priorities, or
the principles set forth in the Executive
Order.
A regulatory impact analysis (RIA)
must be prepared for major rules with
economically significant effects ($100
million or more in any 1 year). The net
transfer impact related to the changes in
payments under the HH PPS for CY
2019 is estimated to be $400 million (2.1
percent). The net transfer impact in CY
2020 related to the change in the unit of
payment under the proposed PDGM is
estimated to be $0 million as section
51001(a) of the BBA of 2018 requires
such change to be implemented in a
budget-neutral manner. The net transfer
impact in CY 2019 related to the
Temporary Transitional Payment for
Home Infusion Therapy is estimated to
be $60 million. The savings impacts
related to the HHVBP model as a whole
are estimated at $378 million. The cost
impact related to OASIS item collection
as a result of the proposed
implementation of the PDGM and
proposed changes to the HH QRP is
estimated to be a net $60 million in
annualized cost savings to HHAs,
discounted at 7 percent relative to year
2016, over a perpetual time horizon
beginning in CY 2020. Finally, the
estimated cost impact to each potential
home infusion therapy AO is $23,258.
We estimate that this rulemaking is
‘‘economically significant’’ as measured
by the $100 million threshold, and
hence also a major rule under the
Congressional Review Act. Accordingly,
we have prepared a Regulatory Impact
Analysis that to the best of our ability
presents the costs and benefits of the
rulemaking.
PO 00000
Frm 00142
Fmt 4701
Sfmt 4702
C. Anticipated Effects
The RFA requires agencies to analyze
options for regulatory relief of small
entities, if a rule has a significant impact
on a substantial number of small
entities. For purposes of the RFA, small
entities include small businesses,
nonprofit organizations, and small
governmental jurisdictions. Most
hospitals and most other providers and
suppliers are small entities, either by
nonprofit status or by having revenues
of less than $7.5 million to $38.5
million in any one year. For the
purposes of the RFA, we estimate that
almost all HHAs are small entities as
that term is used in the RFA.
Individuals and states are not included
in the definition of a small entity. The
economic impact assessment is based on
estimated Medicare payments
(revenues) and HHS’s practice in
interpreting the RFA is to consider
effects economically ‘‘significant’’ only
if greater than 5 percent of providers
reach a threshold of 3 to 5 percent or
more of total revenue or total costs. The
majority of HHAs’ visits are Medicare
paid visits and therefore the majority of
HHAs’ revenue consists of Medicare
payments. Based on our analysis, we
conclude that the policies proposed in
this rule would result in an estimated
total impact of 3 to 5 percent or more
on Medicare revenue for greater than 5
percent of HHAs. Therefore, the
Secretary has determined that this HH
PPS proposed rule would have a
significant economic impact on a
substantial number of small entities.
In addition, section 1102(b) of the Act
requires us to prepare a RIA if a rule
may have a significant impact on the
operations of a substantial number of
small rural hospitals. This analysis must
conform to the provisions of section 603
of RFA. For purposes of section 1102(b)
of the Act, we define a small rural
hospital as a hospital that is located
outside of a metropolitan statistical area
and has fewer than 100 beds. This rule
is not applicable to hospitals. Therefore,
the Secretary has determined this
proposed rule would not have a
significant economic impact on the
operations of small rural hospitals.
Section 202 of the Unfunded
Mandates Reform Act of 1995 (UMRA)
also requires that agencies assess
anticipated costs and benefits before
issuing any rule whose mandates
require spending in any 1 year of $100
million in 1995 dollars, updated
annually for inflation. In 2018, that
threshold is approximately $150
million. This rule is not anticipated to
have an effect on State, local, or tribal
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
governments, in the aggregate, or on the
private sector of $150 million or more.
Executive Order 13132 establishes
certain requirements that an agency
must meet when it promulgates a
proposed rule (and subsequent final
rule) that imposes substantial direct
requirement costs on state and local
governments, preempts State law, or
otherwise has Federalism implications.
We have reviewed this proposed rule
under these criteria of Executive Order
13132, and have determined that it will
not impose substantial direct costs on
state or local governments. If regulations
impose administrative costs on private
entities, such as the time needed to read
and interpret this proposed rule, we
must estimate the cost associated with
regulatory review. Due to the
uncertainty involved with accurately
quantifying the number of entities that
would review the rule, we assume that
the total number of unique commenters
on this year’s proposed rule would be
the similar to the number of reviewers
of last year’s proposed rule. We
acknowledge that this assumption may
understate or overstate the costs of
reviewing this rule. It is possible that
not all commenters reviewed this year’s
rule in detail, and it is also possible that
some reviewers chose not to comment
on the proposed rule. For these reasons
we thought that the number of past
commenters would be a fair estimate of
the number of reviewers of this rule. We
welcome any comments on the
approach in estimating the number of
entities which would review this
proposed rule. We also recognize that
different types of entities are in many
cases affected by mutually exclusive
sections of this proposed rule, and
therefore for the purposes of our
estimate we assume that each reviewer
reads approximately 50 percent of the
rule. We seek comments on this
assumption. Using the wage information
from the BLS for medical and health
service managers (Code 11–9111), we
estimate that the cost of reviewing this
rule is $107.38 per hour, including
overhead and fringe benefits (https://
www.bls.gov/oes/current/oes_nat.htm.
Assuming an average reading speed of
250 words per minute, we estimate that
it would take approximately 5.3 hours
for the staff to review half of this
proposed rule, which consists of
approximately 160,000 words. For each
HHA that reviews the rule, the
estimated cost is $569.11 (5.3 hours ×
$107.38). Therefore, we estimate that
the total cost of reviewing this
regulation is $767,729.39 ($569.11 ×
1,349 reviewers).
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
1. HH PPS
a. HH PPS for CY 2019
The update set forth in this rule
applies to Medicare payments under HH
PPS in CY 2019. Accordingly, the
following analysis describes the impact
in CY 2019 only. We estimate that the
net impact of the policies in this rule is
approximately $400 million in
increased payments to HHAs in CY
2019. We applied a wage index budget
neutrality factor and a case-mix weight
budget neutrality factor to the rates as
discussed in section III.C.3 of this
proposed rule. Therefore, the estimated
impact of the 2019 wage index and the
recalibration of the case-mix weights for
CY 2019 is $0 million. The $400 million
increase reflects the distributional
effects of the CY 2019 home health
payment update of 2.1 percent ($400
million increase), a 0.1 percent increase
in payments due to decreasing the FDL
ratio in order to target to pay no more
than 2.5 percent of total payments as
outlier payments ($20 million increase)
and a 0.1 percent decrease in payments
due to the new rural add-on policy
mandated by the BBA of 2018 for CY
2019 ($20 million decrease). The $400
million in increased payments is
reflected in the last column of the first
row in Table 59 as a 2.1 percent increase
in expenditures when comparing CY
2018 payments to estimated CY 2019
payments.
With regards to options for regulatory
relief, the rural add-on policy for CYs
2019 through 2022 is statutory and we
do not have the authority to alter the
methodology used to categorize rural
counties or to revise the rural add-on
percentages.
b. HH PPS for CY 2020 (Proposed
PDGM)
We estimate no net impact of the
proposed policies related to the
implementation of the PDGM for the CY
2020 HH PPS, as the transition to the
30-day unit of payment is required to be
budget neutral. However, since the
PDGM eliminates the use of therapy
thresholds as a factor in determining
payment, HHAs that provide more
nursing visits, and thus experience
lower margins under the current
payment system which may incentivize
overutilization of therapy, may
experience higher payments.
Conversely, HHAs that provide more
therapy visits compared to nursing
visits, and thus may profit more from
the current payment system, may
experience lower payments.
PO 00000
Frm 00143
Fmt 4701
Sfmt 4702
32481
c. Proposed Elimination of
Recertification Requirement To Estimate
How Much Longer Home Health
Services Will Be Required
Sections 1814(a)(2)(C) and
1835(a)(2)(A) of the Act require, as a
condition of payment, that a physician
must certify (and recertify, when home
health services are furnished over a
period of time) that the individual is
eligible for home health services. The
regulations at § 424.22(b)(2) set forth the
content and basis for recertification
requirements and states that the
recertification statement must indicate
the continuing need for services and
estimate how much longer the services
will be required. This requirement has
been longstanding policy that predates
the Paperwork Reduction Act of 1995
requirements. Therefore, there is no
corresponding Collection of Information
that was submitted to the Office of
Management and Budget (OMB) for
review and approval for the burden
estimate for the recertification
requirement that the certifying
physician must estimate how much
longer home health services will be
required.
In section III.G. of this proposed rule,
we are proposing to eliminate the
regulatory requirement as set forth at 42
CFR 424.22(b)(1), that the certifying
physician, as part of the recertification
process, include an estimate of how
much longer home health services will
be required at each home health
recertification. While all other
recertification content requirements
under § 424.22 will remain unchanged,
the certifying physician would not be
required to provide his/her estimation
as to how much longer the patient will
require home health services on
recertifications on and after January 1,
2019. Therefore, we believe this would
result in a reduction of burden for
certifying physicians by reducing the
amount of time physicians spend on the
recertification process and we are
providing an estimate on the reduction
in burden in this proposed rule. All
salary information is based on the May
2017 wage data for physicians and
surgeons from the Bureau of Labor
Statistics (BLS) website at (https://
www.bls.gov/oes/current/
oes291069.htm) and includes a fringe
benefits and overhead worth 100
percent of the base salary.
Using CY 2017 claims, we estimate
that of the total number of Medicare
home health claims (5.8 million), 37
percent were recertifications (2.1
million) completed by 284,615
E:\FR\FM\12JYP2.SGM
12JYP2
32482
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
certifying physicians.111 Of those 2.1
million recertifications, we estimate that
the time needed to recertify patient
eligibility will decrease by 2 minutes
per recertification with a total reduction
of 69,930 physician hours for all
recertifications as a result of eliminating
the time estimation statement. Based on
the physician’s hourly wage of $203.26
as described previously ($101.63 with
100 percent fringe benefits and
overhead), this results in an overall
annualized cost savings of $14.2 million
beginning in CY 2019.
2. HHVBP Model
Under the HHVBP Model, the first
payment adjustment applies in CY 2018
based on PY1 (2016) data and the final
payment adjustment will apply in CY
2022 based on PY5 (2020) data. In the
CY 2016 HH PPS final rule, we
estimated that the overall impact of the
HHVBP Model from CY 2018 through
CY 2022 was a reduction of
approximately $380 million (80 FR
68716). In the CY 2017 HH PPS final
rule, we estimated that the overall
impact of the HHVBP Model from CY
2018 through CY 2022 was a reduction
of approximately $378 million (81 FR
76795). We do not believe the changes
proposed in this rule would affect the
prior estimates.
amozie on DSK3GDR082PROD with PROPOSALS2
3. Home Infusion Therapy
a. Health and Safety Standards
Section 5012 of the Cures Act (Pub. L.
114–255), which amended section
1861(s)(2) of the Social Security Act (the
Act), established a new Medicare home
infusion therapy benefit. Section
1861(iii) of the Act, as added by section
5012 of the Cures Act defines, the
Medicare home infusion therapy benefit
and covers professional services
including nursing services, training and
education, and remote monitoring and
monitoring services associated with
administering certain infusion drugs in
a patient’s home. This benefit would
ensure consistency in coverage for home
infusion benefits for all Medicare
beneficiaries. Section 1861(iii) of the
Act, as added by the Cures Act, sets
forth elements for home infusion
therapy suppliers in three areas: (1)
Ensuring that all patients have a plan of
care established and updated by a
physician that sets out the care and
prescribed infusion therapy necessary to
meet the patient-specific needs, (2)
having procedures to ensure that remote
monitoring services associated with
administering infusion drugs in a
patient’s home are provided, and (3)
111 CY 2017 OASIS assessments matched to
Medicare FFS claims (as of March 2, 2018).
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
having procedures to ensure that
patients receive education and training
on the effective use of medications and
equipment in the home.
We propose to implement the
following requirements for home
infusion therapy suppliers—
• Ensure that all patients must have
a plan of care established by a physician
that prescribes the type, amount and
duration of infusion therapy services
that are furnished. The plan of care
would specify the care and services
necessary to meet the patient specific
needs.
• Ensure that the plan of care for each
patient is periodically reviewed by the
physician.
• Ensure that patients have infusion
therapy support services at all times
through the provision of professional
services, including nursing services,
furnished in accordance with the plan
of care on a 7-day-a-week, 24-hour-a-day
schedule.
• Provide patient training and
education.
• Provide remote monitoring and
monitoring services for the provision of
home infusion therapy and home
infusion drugs.
All current standards established by
AOs already address the proposed
requirements set forth in this rule.
Furthermore, all existing home infusion
therapy suppliers are already accredited
by an existing AO for home infusion
therapy to meet requirements
established by private insurers and
Medicare Advantage plans. Therefore,
we assume that there would be no new
burden imposed on home infusion
therapy suppliers in order to meet the
proposed health and safety standards.
Additionally, we assume that these
proposed health and safety provisions
would not impose a new burden on
home infusion therapy AOs that are
likely to apply to be Medicare approved
AOs for home infusion therapy because
their existing standards would already
meet or exceed those that would be
established in this rule.
considered eligible home infusion
suppliers, as are potential pharmacy
suppliers that enroll and comply with
the Medicare program’s supplier
standards (found at 42 CFR 424.57(c))
and quality standards to become
accredited for furnishing external
infusion pumps and supplies). Prior to
the implementation of the temporary
transitional payment, home infusion
suppliers have not been separately
reimbursed for providing these services
under the DME benefit. For the
temporary transitional payment we do
not anticipate an increase in
beneficiaries receiving home infusion
therapy services as referral patterns are
not likely to change significantly due to
the inability for other provider types (for
example, physicians, HHAs) to become
home infusion therapy suppliers prior
to CY 2021 and given that existing DME
suppliers already provide home
infusion therapy services without
separate reimbursement.
b. Home Infusion Therapy Payment
We estimate that the net impact of the
policies in this rule is approximately
$60 million in increased Medicare
payments to home infusion suppliers in
CY 2019. This increase reflects the cost
of providing infusion therapy services to
existing DME home infusion therapy
beneficiaries (at a 4-hour rate), as the
temporary transitional payment applies
only to existing Medicare qualified
home infusion suppliers (that is, DME
suppliers that are enrolled as
pharmacies that provide external
infusion pumps and supplies are
(1) Burden Incurred by Home Infusion
Therapy AOs
PO 00000
Frm 00144
Fmt 4701
Sfmt 4702
c. Accreditation of Quality Home
Infusion Therapy Suppliers
The requirement for accreditation of
home infusion therapy suppliers will
cause both the home infusion therapy
AOs and the home infusion therapy
suppliers to incur costs related to the
accreditation process. This section
provides a discussion of the estimated
time and cost burdens that home
infusion therapy suppliers may incur as
part of the accreditation process. It also
discusses the estimated time and cost
burdens that may be incurred by the
home infusion therapy AOs to comply
with the proposed home infusion
therapy AO approval and oversight
regulations at §§ 488.1010 through
488.1050. As the following discussion
demonstrates, we have estimated that
each home infusion therapy AO would
incur an estimated cost burden in the
amount of $23,258 for compliance with
the proposed home infusion therapy AO
approval and oversight regulations at
§§ 488.1010 through 488.1050.
Section 1834(u)(5)(B) of the Act
requires the Secretary to designate AOs
to accredit suppliers furnishing home
infusion therapy not later than January
1, 2021. To date, we have not solicited
nor approved any AOs to accredit home
infusion therapy suppliers as required
by section 1834(u)(5)(B) of the Act.
Therefore, in this rule we have proposed
to publish a solicitation notice in the
Federal Register seeking national AOs
to accredit home infusion therapy
suppliers. We propose to publish this
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
solicitation after the publication of the
final rule.
The AOs that respond to the
solicitation notice would be required to
submit an application to CMS
requesting CMS-approval of a home
infusion therapy accreditation program
for Medicare. If CMS approves the AOs
application, the home infusion therapy
AO would also be required to meet, on
an ongoing basis, the requirements set
forth in proposed §§ 488.1010 through
488.1050. The following is a discussion
of the burden associated with specific
sections of the proposed home infusion
therapy AO approval and oversight
regulations at §§ 488.1010 through
488.1050.
(a) Burden for Home Infusion Therapy
AOs Associated With Proposed
§ 488.1010
The AOs that accredit home infusion
therapy suppliers would incur time and
costs burdens associated with the
preparation of the application they
submit to CMS requesting approval of
their home infusion therapy
accreditation program. This would
include the preparation, gathering or
obtaining of all the documentation
required in proposed § 488.1010(a)(1)
through (24).
If the AO has never submitted an
application to CMS, we estimate that it
would take approximately 70 hours of
time to gather, obtain or prepare all
documentation required by proposed
§ 488.1010(a)(1) through (23). However,
for an existing AO that has previously
submitted an application to CMS for any
type of accreditation program, we
estimate that it would take
approximately 45 hours to gather, obtain
or prepare all required documentation.
We believe that it would take less time
for an AO that has previously submitted
an application to CMS to prepare an
application requesting approval of a
home infusion therapy accreditation
program because this AO would already
be familiar with the application process
and requirements. The proposed
application requirements for home
infusion therapy AOs, set forth at
§ 488.1010(a)(1) through (23), are
consistent with those for Medicarecertified providers and suppliers which
are set forth at § 488.5.
The home infusion therapy AO would
incur costs associated with the
preparation and submission of the home
infusion therapy accreditation program
application. The home infusion therapy
AO would incur costs for the wages of
all AO staff that work on the preparation
of the application. We estimate that the
AO would have 2 staff work on the
preparation of the application. We
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
believe that the AO staff that works on
the AOs application would be clinicians
such as registered nurses or medical or
health services manager. According to
the U.S. Bureau of Labor Statistics, the
mean hourly wage for a registered nurse
is $35.36 (https://www.bls.gov/oes/
current/oes291141.htm) and the mean
hourly wage for a medical or health
services manager is $53.69 (https://
www.bls.gov/oes/current/
oes119111.htm)). Therefore, we estimate
that the home infusion therapy AO
would incur wages for 45 hours of time
by a registered nurse and wages for 45
hours of time by a medical or health
services manager in the amount of
$8,014.50 (45 hours × $35.36 per hour
= $1,591.20) + (45 hours × $53.69 =
$2,416.05 per hour) + ($4,007.25 for
fringe benefits and overhead).
As stated previously, we estimate that
it would take approximately 70 hours
for an AO that has never submitted an
application before to prepare and
submit their home infusion therapy
accreditation program application to
CMS. We estimate that the home
infusion therapy AO would incur wages
for 70 hours of time by a registered
nurse and 70 hours of time by a medical
or health services manager in the
amount of $12,453 (70 hours × $35.36
per hour = $2,475.20) + (70 hours ×
$53.59 = $3,751.30 + ($6,226,50 for
fringe benefits and overhead).
In addition, AOs are required to
submit 2 hard copies of their
application to CMS in notebooks with
dividers and an electronic copy of their
application on a thumb drive. Because
of this requirement, the home infusion
therapy AO would incur costs for the
notebooks, dividers, thumb drive,
photocopying, paper and ink, and
postage costs for mailing the notebooks
with the hard copies of the application
to the CMS Central Office. We estimate
that these costs would be no more than
$250.
At this time, there are six AOs that
accredit home infusion therapy
suppliers (that is—The Joint
Commission (TJC), Accreditation
Commission for Health Care (ACHC),
The Compliance Team (TCT),
Community Health Accreditation
Partner (CHAP), Healthcare Quality
Association on Accreditation (HQAA),
and National Association of Boards of
Pharmacy). The home infusion therapy
accreditation offered by these AOs is
offered as part of the deeming
accreditation of a home health
accreditation program and has not been
approved under the requirements of
section 1834(u)(5)(A) of the Act.
Therefore, we are proposing that, in
order for the home infusion therapy
PO 00000
Frm 00145
Fmt 4701
Sfmt 4702
32483
suppliers accredited by these AOs to
continue to receive payment for the
home infusion therapy services
furnished to Medicare beneficiaries,
these AOs must obtain Medicare
approval for a home infusion therapy
accreditation program. If all of these six
AOs were to submit applications to
CMS for approval of a home infusion
therapy accreditation program, the cost
incurred across all of these potential
home infusion therapy AOs for the
preparation and submission of their
applications would be $48,087
($4,007.25 × 6 AOs = $24,043.50) +
($24,043.50 for fringe benefits and
overhead).
To obtain this CMS approval, we are
proposing that these AOs would be
required to submit an application to
CMS seeking approval of a home
infusion therapy accreditation program
that meets the requirements set forth in
the proposed new home infusion
therapy AO approval and oversight
regulations set forth at §§ 488.1010.1
through 488.1010.24 and the proposed
new home infusion therapy health and
safety regulations at 42 CFR part 466,
subpart I. We have further proposed that
the home infusion therapy accreditation
programs submitted to CMS for
approval by the existing home infusion
therapy AOs be consistent with the
requirements of section 5102 of the 21st
Century CURES Act and section
1861(iii) of the Act. We would also
require that the home infusion therapy
programs submitted by these AOs be
separate and distinct from the AOs
home health deeming accreditation
program.
The AOs that currently provide home
infusion therapy accreditation would
incur the time and costs associated with
the preparation of the CMS application
and required supporting documentation.
We estimate that it would take these
AOs approximately 45 hours to prepare
their applications and supporting
documentation because they have
previously submitted applications for
approval of their home health
accreditation programs. The existing
AOs that accredit home infusion
therapy suppliers would also incur costs
for the wages for all AO staff involved
with the preparation and submission of
the application. The AO would also
incur costs for printing the hard copies
of the application, ink and paper,
notebooks and dividers, and postage.
(b) Burden for Home Infusion Therapy
AOs Associated With Proposed
§ 488.1030
In accordance with proposed
§ 488.1030(b) CMS would perform a
comparability review if CMS makes
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32484
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
changes to the home infusion therapy
AO approval and oversight regulations
or home infusion therapy health and
safety regulation. The purpose of the
comparability review is to allow CMS to
assess the equivalency of a home
infusion therapy AO’s accreditation
standards with the comparable
Medicare home infusion therapy
accreditation requirements after CMS
imposes new or revised Medicare home
infusion therapy accreditation
requirements.
Proposed § 488.1030(b)(1) would
provide that if CMS were to make
changes to the home infusion therapy
AO approval and oversight accreditation
regulations or the home infusion
therapy health and safety regulations,
CMS would send a written notice of the
changes to the home infusion therapy
AOs. Proposed § 488.1030(b)(2) would
provide that CMS would provide a
deadline of not less than 30 day by
which the AO must submit its revised
home infusion therapy accreditation
program standards to CMS.
Proposed § 488.1030(b)(2) would
require the home infusion therapy AOs
to revise their home infusion therapy
accreditation standards so as to
incorporate the changes made by CMS.
The AO must submit their revised home
infusion therapy accreditation program
standards to CMS by the deadline
specified in CMS’ written notice. The
AO may submit a request for an
extension of the submission deadline, so
long as the request is submitted prior to
the original submission deadline.
The home infusion therapy AOs
would incur a time burden associated
with the time required for the AO staff
to review CMS’ notice of the revisions
to the home infusion therapy AO
approval and oversight accreditation
standards or home infusion therapy
health and safety standards. We
estimate that it would take no more than
1 hour for the AO to review the notice
from CMS notifying the AO of the
changes to the AO approval and
oversight regulations or health and
safety regulation.
The home infusion therapy AOs
would incur a cost burden for the wages
of the AO staff that are involved with
reviewing the CMS notice and the
preparation of the home infusion
therapy AO’s revised accreditation
program standards. We believe that the
AO staff that would review the notice
from CMS regarding changes to the CMS
home infusion therapy regulations
would be clinicians such as registered
nurses. According to the U.S. Bureau of
Labor Statistics, the mean hourly wage
for a non-industry specific registered
nurse is $35.36 (https://www.bls.gov/
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
oes/current/oes291141.htm). Therefore,
the home infusion therapy AO would
incur a cost burden in the amount of
$70.72 for the preparation of the
response to CMS (1 hour × $35.36 per
hour = $35.36) + ($35.36 for fringe
benefits and overhead).
The home infusion therapy would
also incur a cost burden for the wages
of the AO staff for the time spent
preparing the AOs revised home
infusion therapy accreditation
standards. However, we are unable to
accurately estimate this cost because the
amount of wages incurred would be
dependent on the amount of time spent
by the AO staff preparing the AOs
revised accreditation standards.
We believe that the AO staff that
would prepare the home infusion
therapy AOs revised home infusion
therapy accreditation standards would
be a clinician such as registered nurses.
According to the U.S. Bureau of Labor
Statistics, the mean hourly wage for a
non-industry specific registered nurse is
$35.36 (https://www.bls.gov/oes/
current/oes291141.htm). If we were to
estimate that it would take 5 hours for
the home infusion therapy AO to
prepare the revised home infusion
therapy accreditation standards, the
estimated cost burden to the AO would
be $353.60 (5 hours × $35.36 per hour
= $176.80) + ($176.80 for fringe benefits
and overhead).
At this time, there are six AOs that
accredit home infusion therapy
suppliers (that is—The Joint
Commission (TJC), Accreditation
Commission for Health Care (ACHC),
The Compliance Team (TCT),
Community Health Accreditation
Partner (CHAP), Healthcare Quality
Association on Accreditation (HQAA),
and National Association of Boards of
Pharmacy). The home infusion therapy
accreditation offered by these AOs is
offered as part of the deeming
accreditation of a home health
accreditation program and has not been
approved under the requirements of
section 1834(u)(5)(A) of the Act. If all of
these six AOs were to submit
applications to CMS for approval of a
home infusion therapy accreditation
program, the cost incurred across all of
these AOs for the preparation of revised
accreditation standards would be
$2,121.60 ($176.80 × 6 AOs = $1,060.80)
+ ($1,060.80 for fringe benefits and
overhead).
As provided by proposed
§ 488.1030(b)(4), a home infusion
therapy AO may request an extension of
the deadline by which they must submit
their revised accreditation home
infusion therapy standards, so long as
the extension request is submitted prior
PO 00000
Frm 00146
Fmt 4701
Sfmt 4702
to the submission deadline. If the home
infusion therapy AO requested an
extension of the submission deadline,
the AO would incur burden for the time
required to prepare and submit the
deadline extension request, however,
we believe this burden would be
minimal. We believe that the extension
request could be sent in the form of an
email to CMS, would consist of no more
than a few paragraphs and would take
no more than 15 minutes to prepare and
send.
The AO would incur a cost burden for
the wages for the AO staff who prepares
the extension request. We believe that
this email would be sent by an
administrative assistant. According to
the U.S. Bureau of Labor Statistics, the
mean hourly wage for an executive
administrative assistant is $28.56
(https://www.bls.gov/oes/current/
oes436011.htm). We estimate that the
AO would incur a cost burden for wages
related to the preparation and sending
of the extension request to CMS in the
amount of $14.28. ($28.56 × 15 minutes
= $7.14) + ($7.14 for fringe benefits and
overhead).
At this time, there are six AOs that
accredit home infusion therapy
suppliers (that is—The Joint
Commission (TJC), Accreditation
Commission for Health Care (ACHC),
The Compliance Team (TCT),
Community Health Accreditation
Partner (CHAP), Healthcare Quality
Association on Accreditation (HQAA),
and National Association of Boards of
Pharmacy). If all of these six AOs were
to submit applications to CMS for
approval of a home infusion therapy
accreditation program, they could
become CMS-approved home infusion
therapy AOs. It is unlikely that all of the
AOs would submit a request for an
extension of the deadline to submit their
revised accreditation standards to CMS.
However, if this were to occur, the cost
incurred across all of these AOs for the
preparation of the extension requests by
each home infusion therapy AO would
be $85.68 ($7.14 × 6 AOs = $42.84) +
($42.84 for fringe benefits and
overhead).
Proposed § 488.1030(b)(7) would
provide that if CMS were to make
significant substantial changes to the
home infusion therapy AO approval and
oversight accreditation standards or the
home infusion therapy health and safety
standards, we may require the home
infusion therapy AOs to submit a new
application for approval of their revised
home infusion therapy accreditation
programs. If this were to occur, the
home infusion therapy AOs would incur
a time burden for the time associated
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
the preparation of the AOs new
application.
We estimate that it would take the
home infusion therapy AO
approximately 45 hours to prepare and
submit their new application to CMS.
This would include the time and costs
required to gather and prepare the
required supporting documentation to
go with the application. We believe that
the home infusion therapy AOs would
already be familiar with the CMS
application process and would be able
to use their previous application and
supporting documentation with
updates, therefore, the reapplication
process would be less burdensome.
The home infusion therapy AO would
also incur costs associated with the
preparation and submission of a new
application. The home infusion therapy
AO would incur costs for the wages of
all AO staff that work on the preparation
of the application. We estimate that the
AO would have 2 staff persons work on
the preparation of the application.
Furthermore, we believe that the AO
staff that works on the AOs application
would be clinicians such as a registered
nurse and a medical or health services
manager. According to the U.S. Bureau
of Labor Statistics, the mean hourly
wage for a non-industry specific
registered nurse is $35.36 ((https://
www.bls.gov/oes/current/
oes291141.htm). and the mean hourly
wage for a medical or health services
manager is $53.69 ((https://
www.bls.gov/oes/current/
oes119111.htm). Therefore, we estimate
that the home infusion therapy AO
would incur wages for 45 hours of time
by a registered nurse and 45 hours of
time by a medical or health services
manager in the amount of $$8,014.50
(45 hours × $35.36 per hour = $1,591.20)
+ (45 hours × $53.69 = $2,416.05 per
hour) + ($4,007.25 for fringe benefits
and overhead). The cost across all the 6
potential home infusion therapy AOs
would be $48,087 ($4007.25 × 6 AOs =
$24,043.50) + ($24,043.50 for fringe
benefits and overhead).
In addition, AOs are required to
submit 2 hard copies of their
application to CMS in notebooks with
dividers and an electronic copy of their
application on a thumb drive. Because
of this requirement, the home infusion
therapy AO would incur costs for the
notebooks, dividers, thumb drive,
photocopying, paper and ink, and
postage costs for mailing the notebooks
with the hard copies of the application
to the CMS Central Office. We estimate
that these costs would be no more than
$250.
In accordance with proposed
§ 488.1030(c), CMS will perform a
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
standards review when the home
infusion therapy AO makes updates to
its accreditation standards and surveys
processes. Proposed § 488.1030(c)(1)
would require that when a home
infusion therapy AO proposes to adopt
new or revised accreditation standards,
requirements or changes in its survey
process, the home infusion therapy AO
must submit its revised accreditation
standards and survey processes to CMS
for review, at least 60 days prior to the
proposed implementation date of the
revised standards. Proposed
§ 488.1030(c)(3) would require that the
home infusion therapy AO provide CMS
with a detailed description of the
changes that are to be made to the AO’s
home infusion therapy accreditation
standards, requirements and survey
processes and a detailed crosswalk (in
table format) that states the exact
language of the organization’s revised
accreditation requirements and the
applicable Medicare requirements for
each. Proposed § 488.1030(c)(4) would
provide that CMS must provide a
written notice to the home infusion
therapy accrediting organization which
states whether the home infusion
therapy accreditation program,
including the proposed revisions,
continues or does not continue to meet
or exceed all applicable Medicare home
infusion therapy requirements within 60
days of receipt of the home infusion
therapy accrediting organization’s
proposed changes. Proposed
§ 488.1030(c)(5) would provide that if a
home infusion therapy AO implements
changes that have neither been
determined nor deemed by CMS to be
comparable to the applicable Medicare
home infusion therapy requirements,
CMS may open a home infusion therapy
accreditation program review in
accordance with proposed
§ 488.1030(c)(d).
The burden to the home infusion
therapy AO associated with the
standards review includes the time
required for the home infusion therapy
AO to prepare its revised accreditation
standards and detailed crosswalk for
submission to CMS and submit them to
CMS for review. This burden would also
include the time required for the AO
staff to read and respond to CMS’
written response. It is important to note
that we do not include in our burden
estimate the time that would be spent by
the home infusion therapy AO in
making voluntary revisions to their
accreditation standards that are not
required by CMS nor prompted by a
regulatory change.
The home infusion therapy AO would
also incur costs for the wages of the AO
staff involved with the preparation of
PO 00000
Frm 00147
Fmt 4701
Sfmt 4702
32485
the AO’s revised home infusion therapy
accreditation standards and the detailed
crosswalk for submission to CMS. The
AO would also incur costs for wages for
the time the AO staff spent reviewing
CMS’ response. However, the AO could
send their revised accreditation
standards to CMS via email, therefore
the AO would not incur costs for
postage.
We are not able to accurately estimate
the total time and cost burden
associated with the standards review
because the time required for the home
infusion therapy AO to prepare its
revised home infusion therapy
accreditation standards and detailed
crosswalk would depend on the extent
of the revision the AO has made to its
home infusion therapy accreditation
standards or survey processes. The
burden would also depend of the
content and length of CMS’ response
letter. However, we do estimate that the
preparation of the home infusion
therapy AOs revised accreditation
standard and detailed crosswalk for
submission to CMS would take no less
than 5 hours.
We believe that the AO staff that
would prepare the home infusion
therapy AOs revised home infusion
therapy accreditation standards and
detailed crosswalk for submission to
CMS would be clinicians such as
registered nurses. According to the U.S.
Bureau of Labor Statistics, the mean
hourly wage for a non-industry specific
registered nurse is $35.36 (https://
www.bls.gov/oes/current/
oes291141.htm). Therefore, if we were
to estimate that this task would take 5
hours to complete, the cost burden to
the home infusion therapy would be
$353.60 (5 hours × $35.36 per hour =
$176.80) + ($176.80 for fringe benefits
and overhead).
We further estimate that it would take
the home infusion therapy AO
approximately 30 minutes for the home
infusion therapy AO to review the CMS
response to their submission of the
revised home infusion therapy
accreditation standards and detailed
crosswalk. We believe that a clinician
such as a registered nurse would review
the CMS response letter. Therefore, the
cost burden to the home infusion
therapy AO associated with this task
would be $ 53.04 (45 minutes × $35.36
per hour = $26.52) + ($26.52 for fringe
benefits and overhead).
It is important to note that we have
not calculated this burden across all of
the potential home infusion therapy
AOs. We have not done so because the
submission of revised home infusion
therapy accreditation standards by a
home infusion therapy AO would only
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32486
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
occur on an occasional basis and would
never be done by all 6 potential AOs at
the same time.
In accordance with proposed
§ 488.1030(d), CMS may perform a
home infusion therapy accreditation
program review if a comparability,
performance, or standards review
reveals evidence of substantial noncompliance of a home infusion therapy
AO’s CMS-approved home infusion
therapy accreditation program with the
requirements of the proposed home
infusion therapy AO approval and
oversight regulation at 42 CFR part 488,
subpart L. If a home infusion therapy
accreditation program review is
initiated, CMS will provide written
notice to the home infusion therapy AO
indicating that its CMS-approved
accreditation program approval may be
in jeopardy and that a home infusion
therapy accreditation program review is
being initiated. The notice would
provide all of the following information:
• A statement of the instances, rates
or patterns of non-compliance
identified, as well as other related
information, if applicable.
• A description of the process to be
followed during the review, including a
description of the opportunities for the
home infusion therapy accrediting
organization to offer factual information
related to CMS’ findings.
• A description of the possible
actions that may be imposed by CMS
based on the findings of the home
infusion therapy accreditation program
review.
• The actions the home infusion
therapy accrediting organization must
take to address the identified
deficiencies.
• A timeline for implementation of
the home infusion therapy accrediting
organization’s corrective action plan,
not to exceed 180 calendar days after
receipt of the notice that CMS is
initiating a home infusion therapy
accreditation program review.
Proposed § 488.1030(d)(3) would
provide that CMS will monitor the
performance of the AO’s home infusion
therapy and the implementation of the
corrective action plan during a
probation period of up to 180 days.
Proposed § 488.1030(d)(4) would
provide that if CMS determines, as a
result of the home infusion therapy
accreditation program review or a
review of an application for renewal of
the accrediting organizations existing
CMS-approved home infusion therapy
accreditation program, that the home
infusion therapy accrediting
organization has failed to meet any of
the requirements of the proposed
regulations at §§ 488.1010 through
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
488.1050, CMS may place the home
infusion therapy AO’s CMS-approved
home infusion therapy accreditation
program on an additional probation
period of up to 180 calendar days
subsequent to the period described in
§ 488.1030(d)(1)(iv).
The time burden associated with the
home infusion therapy accreditation
program review includes the time
burden associated with the AO’s review
of CMS’ written notice which indicates
that the home infusion therapy AO’s
CMS-approved accreditation program
approval may be in jeopardy and that a
home infusion therapy accreditation
program review is being initiated. The
time required for the review of the CMS
letter will depend on the length of CMS’
finding. However, we estimate it would
take no more than 60 minutes to review
this letter.
The AO would incur costs for the
wages of the AO staff who performs the
review of the CMS letter. We believe
that an AO staff person with a clinical
background such as a registered nurse
would review the CMS letter. According
to the U.S. Bureau of Labor Statistics,
the mean hourly wage for a registered
nurse is $35.36 (https://www.bls.gov/
oes/current/oes291141.htm). Therefore,
we estimate that the cost burden to the
home infusion therapy AO associated
with the review of the CMS letter would
be approximately $70.72 (1 hour ×
$35.36 = $35.36) + ($35.36 for fringe
benefits and overhead).
There is further burden associated
with the requirement that the AO
prepare and submit a written response
to the CMS letter and a corrective action
plan. However, we are unable to
accurately estimate the time burden
associated with this task because the
amount of time required for the home
infusion therapy AO to prepare the
response letter and corrective plan
would be dependent on the number and
type of findings identified in CMS’
letter.
However, we believe that an AO staff
person with a clinical background such
as a registered nurse would prepare the
home infusion therapy AO’s written
response to the CMS letter and a
corrective action plan. According to the
U.S. Bureau of Labor Statistics, the
mean hourly wage for a registered nurse
is $35.36 (https://www.bls.gov/oes/
current/oes291141.htm). If we were to
estimate that it would take the home
infusion therapy AO 3 hours to prepare
and submit a written response to the
CMS letter and a corrective action plan,
the estimated cost burden to the home
infusion therapy AO associated with
this task would be $212.16 (3 hours ×
$35.36 = $106.08) + ($106.08 for fringe
PO 00000
Frm 00148
Fmt 4701
Sfmt 4702
benefits and overhead). Proposed
§ 488.1030(d)(2) provides that CMS
would review and approve the AO’s
plan of correction within 30 days of
receipt. If CMS requires the home
infusion therapy AO to make changes to
their corrective action plan as a
condition of approval, the AO would
incur burden for the time required to
make the required revisions to their
plan of correction and resubmit it to
CMS.
The home infusion therapy AO would
incur a time burden for the time spent
by the AO staff making corrections to
the AOs corrective action plan. We are
unable to accurately estimate how long
it would take for the AO to revise its
corrective action plan because the
revision to be made to the corrective
action plan would be dependent on the
extent of the correction requested by
CMS.
However, we believe that an AO staff
person with a clinical background such
as a registered nurse would make the
corrections to the AOs corrective action
plan. According to the U.S. Bureau of
Labor Statistics, the mean hourly wage
for a registered nurse is $35.36 (https://
www.bls.gov/oes/current/
oes291141.htm). So, if we were to
estimate that it would take the home
infusion therapy AO 2 hours to prepare
and submit a written response to the
CMS letter and make any necessary
revision to the corrective action plan,
the estimated cost burden to the home
infusion therapy AO associated with
this task would be $141.44 (2 hours ×
$35.36 per hour = $70.72) + ($70.72 for
fringe benefits and overhead). During
the 180 day probationary period, CMS is
likely to require the home infusion
therapy AO to submit periodic progress
reports and participate in periodic
telephone to monitor the home infusion
therapy AOs progress. The home
infusion therapy AO would incur
burden for the time required to prepare
and submit an initial progress report.
We estimate that the initial progress
report would take approximately one
hour to prepare. We further estimate
that the burden associated with the
preparation and submission of
subsequent progress reports would be
less than that for the initial progress
report because the AO would be able to
modify or update their initial or
previous progress report. We estimate
that it would take approximately 1 hour
for the AO staff to prepare the initial
progress report and 30 minutes for the
AO staff to prepare subsequent progress
reports. If CMS were to require the AO
to submit one progress report per month
during the entire 180 day probation
period (6 months), the AO would have
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
to submit 1 initial progress report and
5 subsequent progress reports.
Therefore, we estimate that the AO
would incur a time burden in the
amount of 3.5 hours for the submission
of all progress reports during the 180
day probation period. The AO would
also incur a cost burden for the wages
of the AO staff person who is involved
in the preparation and submission of the
progress reports. We believe that the
initial and subsequent progress reports
would be prepared by person with a
clinical background such as a registered
nurse. According to the U.S. Bureau of
Labor Statistics, the mean hourly wage
for a registered nurse is $35.36 (https://
www.bls.gov/oes/current/
oes291141.htm). We estimate that the
home infusion therapy AO would incur
a cost burden in the amount of $247.52
for the preparation of the progress
reports during the 180 day probation
period ($3.5 hours × 35.36 per hour =
$123.76) + ($123.76 for fringe benefits
and overhead).
The home infusion therapy AO would
also incur burden associated with the
time required to participate in the
periodic phone calls with CMS. We are
not able to accurately estimate the
amount of time that would be required
for these periodic phone calls because
we do not know how often the AO
would be required to participate in
phone calls with CMS or how long these
phone calls would last. However, we do
not believe that these phone calls would
be held more often that monthly or last
more than one hour. The AO would
incur costs for the wages of all AO staff
that participate in the periodic
telephone calls. We are not able to
accurately estimate the total cost burden
for wages that would be incurred by the
home infusion therapy AO at this time,
because we do not know who from the
AO would be attending these meetings.
If we were to estimate that these
phone calls were to be held on a
monthly basis during the 180 day
probation period for a period of one
hour period per call, the home infusion
therapy AO would incur a time burden
in the amount of 6 hours per each staff
member that participates in these phone
calls. We believe that the AO would
have a minimum of 3 staff that are
clinicians, such as registered nurses,
participate on the call. According to the
U.S. Bureau of Labor Statistics, the
mean hourly wage for a registered nurse
is $35.36 (https://www.bls.gov/ooh/
healthcare/registered-nurses.htm).
Therefore, the cost burden to the home
infusion therapy AO for participation in
the monthly telephone calls would be
$1,272.96 ((3 AO staff × $35.36 per hour
= $106.08 per call per all staff/$106.08
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
per call per all staff × 6 calls = $636.48
total wages per all staff per all calls) +
($636.48 for fringe benefits and
overhead)).
At or near the end of the first 180 day
probationary period, CMS will make a
decision as to whether the home
infusion therapy AO has successfully
come into compliance with the home
infusion therapy regulations, or whether
the AO has failed to do so. Proposed
§ 488.1030(d)(4) would provide that if
CMS finds that the home infusion
therapy AO has failed to properly
implement the plan of correction and
come into compliance with the
requirements of the proposed home
infusion therapy AO approval and
oversight regulation or the proposed
home infusion therapy health and safety
regulations, CMS may place the home
infusion therapy AO’s on an additional
probation period of up to 180 calendar
days. If this were to occur, the AO
would incur the same or similar time
and cost burdens as in the initial 180
day probationary period. (See previous
estimates for the estimated time and
cost burden associated with the 180-day
probationary period).
It is important to note that we have
not calculated the burden associated
with the tasks required of the home
infusion therapy AO under
§ 488.1030(d) across all of the potential
home infusion therapy AOs. We have
not done so because the act of CMS
placing a home infusion therapy AO on
an accreditation program review would
only occur on a sporadic and as needed
basis. There would never be a situation
in which all 6 potential AOs would be
under an accreditation program review
at the same time.
(c) Burden for Home Infusion Therapy
AOs Associated With Proposed
§ 488.1035
Proposed § 488.1035 titled ‘‘Ongoing
responsibilities of a CMS-approved
home infusion therapy accrediting
organization’’ would require that the
home infusion therapy AO carry out
certain activities and submit certain
documents to CMS on an ongoing basis.
Proposed § 488.1035(a) would require
the home infusion therapy AO to submit
the following documents to CMS: (1)
Copies of all home infusion therapy
accreditation surveys, together with any
survey-related information that CMS
may require (including corrective action
plans and summaries of findings with
respect to unmet CMS requirements); (2)
notice of all accreditation decisions; (3)
notice of all complaints related to
providers or suppliers; (4) information
about all home infusion therapy
accredited suppliers against which the
PO 00000
Frm 00149
Fmt 4701
Sfmt 4702
32487
home infusion therapy accreditation
organization has taken remedial or
adverse action, including revocation,
withdrawal, or revision of the providers
or suppliers accreditation; (5) the home
infusion therapy accrediting
organization must provide, on an annual
basis, summary data specified by CMS
that relate to the past year’s
accreditation activities and trends; (6)
notice of any proposed changes in the
home infusion therapy accrediting
organization’s accreditation standards or
requirements or survey process.
We believe that there would be little
burden associated with this
requirements for several reasons. First,
while the home infusion therapy AOs
would be required to provide copies of
all survey reports and any surveyrelated information that CMS may
require, the AOs would only be required
to provide this information upon
request. CMS may not request the home
infusion therapy AO to submit this
information if there are no compliance
concerns. Second, we believe the home
infusion therapy AO would keep these
records in the normal course of their
business as a home infusion therapy AO
and would store the survey records in
electronic format. As the AO already has
this information prepared and stored in
an electronic format, it would place
little if any burden on the home
infusion therapy AO to provide this
information to CMS. We believe that the
AO could send this information to CMS
via email and attach the survey record
electronic files to the email.
We estimate that it would take
approximately 30 minutes to locate the
required survey information files and
approximately 15 minutes for the AO
staff to prepare an email to CMS and
attach the electronic files to the email.
We believe that the person at the AO
that would prepare the email sending
the survey information to CMS would
most likely be a clinician such as a
registered nurse. According to the U.S.
Bureau of Labor Statistics, the mean
hourly wage for a registered nurse is
$35.36 (https://www.bls.gov/ooh/
healthcare/registered-nurses.htm).
Therefore, the cost burden to the home
infusion therapy AO associated with the
preparation and submission of the
survey reports and information to CMS
would be $53.04 (30 minutes to locate
information requested by CMS × $35.36
per hour = $17.68) + (15 minutes ×
$35.36 = $8.84) + ($26.52 for fringe
benefits and overhead). The estimated
cost across the potential 6 home
infusion therapy AOs for these tasks
would be $318.24 ($53.04 × 6 home
infusion therapy AOs = $318.24).
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32488
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
Proposed § 488.1035(a)(2) would
require the home infusion therapy AO
to provide CMS with notice of all
accreditation decisions made for each
home infusion therapy supplier that
files an application for accreditation.
This would consist of a list of each
home infusion therapy supplier that had
filed an application with the home
infusion therapy AO for accreditation
and the accreditation decision made by
the AO.
We believe that these accreditation
decisions would be made by the AO in
the normal course of the AOs business
of performing accreditation of home
infusion therapy suppliers. We further
believe that there would be little burden
associated with the requirement that the
AO provide CMS with a list of the
accreditation decisions made by the AO
as this is information that would be
readily available to the AO and that
could quickly and easily be provided to
CMS via email. We estimate that it
would take approximately 15 minutes
for the home infusion AO to gather the
required accreditation decision
information in preparation for sending it
to CMS.
We believe that this information can
be sent to CMS via email and estimate
that it would take an additional 15
minutes for the AO staff to prepare an
email to CMS and attach the electronic
files containing the accreditation
decision information to the email. We
believe that the person at the AO who
would prepare the accreditation
decision information and prepare the
email to CMS would most likely be a
clinician such as a registered nurse.
According to the U.S. Bureau of Labor
Statistics, the mean hourly wage for a
registered nurse is $35.36 (https://
www.bls.gov/oes/current/
oes291141.htm). Therefore, the
estimated cost burden to the home
infusion therapy AO associated with the
preparation and submission of the
survey reports and information to CMS
would be $35.36 (15 minutes × $35.36
per hour = $8.84) and (15 minutes ×
$35.36 = $8.84) + ($17.68 for fringe
benefits and overhead). The estimated
cost across the potential 6 home
infusion therapy AOs for these tasks
would be $212.16 ($35.36 × 6 home
infusion therapy AOs = $212.16).
Section 488.1035(a)(3) would require
the AO to report complaint information
to CMS. Complaint information is
typically reported to CMS by other AOs
by email on a monthly basis for the
previous month. The contents of the
complaint information reported to CMS
would depend on whether the AO had
received any complaints during the
previous month. For example, if the AO
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
received no complaint during the
previous month, this email could
consist of a sentence stating that the AO
had received no complaints. If the AO
had received one or more complaints
during the previous month, the AO
would be required to provide
information about the nature of each
complaint, a description of the
investigation performed, a description
of how the complaint was resolved and
the date resolved.
We believe that there would be little
burden associated with the reporting of
complaint information by the home
infusion therapy AO to CMS for several
reasons. First, we estimate that the
home infusion therapy AOs will rarely
receive complaints about their
accredited home infusion therapy
suppliers. Second, we believe that the
home infusion therapy AO will store
information about any complaints
received in an electronic format.
Therefore, complaint information can be
reported by the home infusion therapy
AO to CMS via email. We estimate that
the preparation of the complaint
information email would take only no
more than 15 minutes to prepare and
send.
We believe that the person at the AO
who would prepare the complaint
information email and sent it to CMS
would most likely be a clinician such as
a registered nurse. According to the U.S.
Bureau of Labor Statistics, the mean
hourly wage for a registered nurse is
$35.36 (https://www.bls.gov/oes/
current/oes291141.htm) Therefore, the
estimated monthly cost burden to the
home infusion therapy AO associated
with the submission of complaint
information to CMS would be $17.68
(15 minutes × $35.36 per hour = $8.84)
+ ($8.84 for fringe benefits and
overhead). The estimated yearly burden
to the home infusion therapy AO for
this task would be $212.16 ($17.68 per
month × 12 months per year = $212.16
per year).
The estimated monthly cost across the
potential 6 home infusion therapy AOs
for these tasks would be $106.08 ($17.68
× 6 home infusion therapy AOs =
$106.08). The estimated yearly cost
across the 6 potential home infusion
therapy AOs would be $1,272.96
($17.68 × 6 AOs = $106.08 per all AOs
per month/$106.08 per year × 12
months per year = $1,272.96. Proposed
§ 488.1035(a)(4) would require the AO
to provide CMS with information about
all home infusion therapy accredited
suppliers against which the home
infusion therapy AO has taken remedial
or adverse action, including revocation,
withdrawal, or revision of the providers
or suppliers accreditation. The
PO 00000
Frm 00150
Fmt 4701
Sfmt 4702
information to be sent to CMS would
simply consist of a list of the home
infusion therapy suppliers and the type
of remedial or adverse action taken.
We expect that when a home infusion
therapy AO takes remedial or adverse
action against its accredited supplier,
the AO would prepare documentation
which states the action taken and the
reason this action was taken. We further
believe that the AO would store this
information electronically. This would
enable the AO to send the required
information to CMS via email.
Therefore, we believe that there would
be little burden associated with this
requirement.
We believe that the home infusion
therapy AOs could send information
about adverse or remedial actions they
have taken against their accredited
suppliers via email. We estimate that it
would take approximately 30 minutes
for a home infusion therapy AO to
prepare a report about the adverse or
remedial actions taken against its
accredited suppliers and approximately
15 minutes to prepare an email to CMS,
attach the electronic file with the
required information and send it to
CMS. The home infusion therapy AOs
would be required to report this
information to CMS on a monthly basis.
The AO would incur a cost burden for
the wages of the AO staff for the time
spent preparing the report of the adverse
or remedial action taken against the
AO’s accredited home infusion therapy
suppliers and the time spent preparing
the email to CMS. We believe that the
person at the AO who would prepare
the report of adverse or remedial action
taken and prepare the email to CMS
would most likely be a clinician such as
a registered nurse. According to the U.S.
Bureau of Labor Statistics, the mean
hourly wage for a registered nurse is
$35.36 (https://www.bls.gov/oes/
current/oes291141.htm). Therefore, the
estimated cost monthly cost burden to
the home infusion therapy AO
associated with the submission of
information about the adverse or
remedial action taken by the home
infusion therapy AO against its
accredited home infusion therapy
suppliers to CMS would be $53.04 (30
minutes × $35.36 per hour = $17.68 +
(15 minutes × $35.36 per hour = $8.84)
+ ($26.52 for fringe benefits and
overhead). The estimated yearly cost
burden to the home infusion therapy
AO for this task would be $636.48
($53.04 per month × 12 months per year
= $636.48 per year).
The estimated monthly cost across the
potential 6 home infusion therapy AOs
for these tasks would be $318.24 ($53.04
× 6 home infusion therapy AOs =
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
$318.24). The estimated yearly cost
across the 6 potential home infusion
therapy AOs would be $3,818.88
($53.04 × 6 AOs = $318.24 per all AOs
per month/$318.24 per year × 12
months per year = $3,818.88.
Proposed § 488.1035(a)(5) would
require the home infusion therapy
accrediting organization to provide, on
an annual basis, summary data specified
by CMS that relates to the past year’s
accreditation activities and trends. This
summary data might include
information such as the total number of
complaints received during the year, the
total number of immediate jeopardy
situations found during the year, and
the total number of deficiencies cited.
We believe this is information that the
AO would collect and document
throughout the year in the normal
course of business. We further believe
that the home infusion therapy AO
would prepare this year end summary
data for their own informational, quality
improvement, and research purposes.
We believe that there would be little,
if any time burden associated with the
submission of the documents and
information required by proposed
§ 488.1035(a)(5) by the home infusion
therapy AOs to CMS, because these are
documents which the AO would keep in
the normal course of business, therefore
these documents would be easily
accessible to the home infusion therapy
AO. Title 5 CFR 1320.3(b)(2) states that
the time, effort, and financial resources
necessary to comply with a collection of
information that would be incurred in
the normal course of their activities (for
example in compiling and maintaining
business records) will be excluded from
the burden if the agency demonstrates
that the reporting, recordkeeping, or
disclosure activities needed to comply
are usual and customary. Further, we
believe that most, if not all of the home
infusion therapy AOs would store these
documents electronically and would be
able to send them electronically to CMS
via email.
The home infusion therapy AO would
incur a time burden for the preparation
and submission of the annual summary
data to CMS. We estimate that it would
take approximately 60 minutes for the
home infusion therapy AO to locate the
required annual summary data
information and prepare it for
submission to CMS. We further estimate
that it would take an additional 15
minutes to prepare an email to CMS and
attach the electronic files containing the
summary data.
The home infusion therapy AO would
incur a cost burden for the wages of the
AO staff who prepares that summary
data for submission to CMS and
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
prepares the email to in which the
annual summary data are submitted to
CMS. We believe that the person at the
AO who would prepare the summary
data for submission to CMS and also
prepare the email to CMS would most
likely be a clinician such as a registered
nurse. According to the U.S. Bureau of
Labor Statistics, the mean hourly wage
for a registered nurse is $35.36 (https://
www.bls.gov/oes/current/
oes291141.htm). Therefore, the
estimated cost burden to the home
infusion therapy AO associated with the
submission of summary data to CMS
would be $88.40 (60 minutes × $35.36
per hour = $35.36) + (15 minutes ×
$35.36 per hour = $8.84) + ($44.20 for
fringe benefits and overhead). The
estimate cost burden across the 6
potential home infusion therapy AOs for
this task would be $530.40 ($88.40 × 6
potential home infusion therapy AOs =
$530.40).
Proposed § 488.1035(b) would require
that within 30 calendar days after a
change in CMS requirements, the home
infusion therapy accrediting
organization must submit an
acknowledgment of receipt of CMS’
notification to CMS. The time burden
associated with this requirement would
be the time required for an AO staff
person to review the notification from
CMS about the change in home infusion
therapy accreditation program
requirements and the time required for
the AO staff person to compose and
send an acknowledgement email to
CMS.
We estimate the time required for the
AO staff to review the notice of a change
in CMS requirements would be 1 hour.
We further estimate that the time that
would be required to prepare and
submit the acknowledgement of receipt
of the CMS notice would be
approximately 15 minutes because this
notice could be sent to CMS via email
and would only consist of 1–2
paragraphs.
The home infusion therapy AO would
incur a cost burden for the wages of the
staff for the time required to review the
notice from CMS of the change in CMS
requirements. The home infusion
therapy AO would incur a cost burden
for the wages of the staff for the time
required to prepare the
acknowledgement and submits it to
CMS. We believe that the person at the
AO who would prepare the email to
CMS acknowledging receipt of the CMS
notice would most likely be a clinician
such as a registered nurse. According to
the U.S. Bureau of Labor Statistics, the
mean hourly wage for a registered nurse
is $35.36 (https://www.bls.gov/oes/
current/oes291141.htm).
PO 00000
Frm 00151
Fmt 4701
Sfmt 4702
32489
The estimated cost burden to the
home infusion therapy AO associated
with the review of the notice from CMS
of changes to the CMS requirements
would be $70.72 (1 hour × $35.36 per
hour) + ($35.36 for fringe benefits and
overhead). The estimated cost burden
associated with the preparation and
submission of the acknowledgement by
the home infusion therapy AO would be
$17.68 (15 minutes × $35.36 per hour =
$8.84) + ($8.84 for fringe benefits and
overhead). The estimates cost across the
6 potential home infusion therapy AOs
would be $530.40 ($70.72 × 6 = $424.32)
+ ($17.68 × 6 = $106.08).
It is important to note that the home
infusion therapy AOs would only have
to perform these tasks if CMS were to
make a change to the home infusion
therapy standards. We believe that this
would occur on an infrequent basis,
therefore, the home infusion therapy
AOs would incur these time and cost
burdens on an infrequent basis.
Proposed § 488.1035(c) would require
that the home infusion therapy AO
permit its surveyors to serve as
witnesses if CMS takes an adverse
action based on accreditation findings.
An example in which a surveyor would
be needed to testify as a witness would
be if there was litigation about CMS’
termination of a home infusion therapy
supplier’s participation in the Medicare
program and the surveyor that had
performed a survey of that home
infusion therapy supplier was needed to
testify about the survey findings. The
burden associated with this requirement
would be the time the surveyor spent
providing testimony, any travel
expenses the home infusion therapy AO
would be responsible to pay, and the
wages paid to the surveyor during the
time spent giving testimony.
The home infusion therapy AO would
incur a time burden for the time
required for the AO’s surveyor to serve
as a witness. This would include travel
time to and from the location where the
hearing is being held. The AO would
also incur cost burdens for the wages
paid to the surveyor during the time
they are serving as a witness and also
for any travel expenses the AO may be
required to pay, that are not reimbursed.
It is important to note that the home
infusion therapy AO surveyors would
rarely, if ever, be required to act as a
witness. Therefore, this is a burden that
the home infusion therapy AOs would
not be likely to incur.
Proposed § 488.1035(d) would require
that, within 2 business days of
identifying a deficiency of an accredited
home infusion therapy supplier that
poses immediate jeopardy to a
beneficiary or to the general public, the
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32490
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
home infusion therapy AO must provide
CMS with written notice of the
deficiency and any adverse action
implemented by the AO. The burden
associated with this requirement is the
time required to provide notice to CMS
of the immediate jeopardy situation and
the wages for the AO staff person for the
time spent preparing and submitting
this notice.
We believe that the AO would keep
this information in the normal course of
their business of providing home
infusion therapy accreditation.
Therefore, the AO should have these
readily available. We further believe
that the home infusion therapy AOs
would keep records related to
immediate jeopardy findings in an
electronic format.
The AO would incur a time burden
for the time required to report the
immediate jeopardy information to
CMS. We estimate that it would take the
AO no more than 20 minutes to prepare
an email to CMS in which they provide
the required information about the
immediate jeopardy situation that has
been discovered. The AO can attach
electronic files to the email that contain
the required information. It is important
to note that we do not count, as a
burden, the time spent by the home
infusion therapy AO in finding the
immediate jeopardy situation or
resolving it, because it is the duty of any
CMS-approved AO to monitor it’s
accredited providers or supplier to
ensure they are providing care that
meets the accreditation standards and
that they do not have any situation that
put the patients or general public in
imminent danger of harm. The home
infusion therapy AO would incur a cost
burden for the wages of the AO staff that
prepares the email to CMS which
notified CMS of the immediate jeopardy
situation. We believe that the person at
the AO who would prepare the
immediate jeopardy notification email
to CMS would most likely be a clinician
such as a registered nurse. According to
the U.S. Bureau of Labor Statistics, the
mean hourly wage for a registered nurse
is $35.36 (https://www.bls.gov/oes/
current/oes291141.htm). Therefore, the
estimated cost burden to the home
infusion therapy AO associated with the
preparation and submission of the
acknowledgement by the home infusion
therapy AO would be $23.60 ($35.36
divided by 60 minutes per hour = $0.59
per minute/20 minutes × $0.59 per
minute = $11.80) + ($11.80 for fringe
benefits and overhead).
The home infusion therapy AOs
would have to perform these tasks and
incur these time and costs burdens only
if they discover an immediate jeopardy
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
situation with an accredited home
infusion therapy supplier. We would
like to point out that this would not be
a regular time and cost burden that
would be incurred by the home infusion
therapy AOs, as the discovery of
immediate jeopardy situations by AOs
do not occur frequently.
It is important to note that we have
not calculated the burden associated
with the tasks required of the home
infusion therapy AO under
§ 488.1035(d) across all of the potential
home infusion therapy AOs. We have
not done so because the need for a home
infusion therapy AO to report an
immediate jeopardy situation to CMS
would only occur on a sporadic basis.
We do not believe that there would ever
be a situation in which all 6 potential
AOs would be required to report an
immediate jeopardy situation
simultaneously. Proposed § 488.1035(e)
would require that within 10 calendar
days after CMS’ notice to a CMSapproved home infusion therapy AO
that CMS intends to withdraw approval
of the AO’s home infusion therapy
accreditation program, the home
infusion therapy AO must provide
written notice of the withdrawal to all
of the home infusion therapy AO’s
accredited suppliers. The time burden
associated with this requirement would
be the time spent by the AO staff to
prepare the required notice that must be
sent to all of the AOs accredited home
infusion therapy suppliers and the time
required for the AO to send this notice
out to all of its accredited suppliers.
We estimate that it would take that
home infusion therapy AO
approximately 45 minutes to prepare
the notice that they must send out to
their accredited suppliers. We believe it
would take an additional 2 minutes per
letter to be sent by the home infusion
therapy AO to its accredited suppliers to
prepare these letters for mailing (that
is—fold letter, place in envelope, affix
correct amount of postage and place the
letter into the outgoing mail). We are not
able to accurately estimate the amount
of time it would take for the AO to send
this notice out to all of its accredited
suppliers because this would be
dependent on the number of accredited
suppliers the AO has at the time.
However, if were to assume that a home
infusion therapy AO had 50 accredited
home infusion therapy suppliers, this
task would take the AO staff 1.7 hours
to complete (2 minutes × 50 letters = 100
minutes/100 minutes divided by 60
minutes per hour = 1.7 hours).
The home infusion therapy AO would
incur a cost burden for the wages of the
AO staff person that prepares the
required notification. We believe that
PO 00000
Frm 00152
Fmt 4701
Sfmt 4702
the person at the AO who would
prepare the required notification would
most likely be a clinician such as a
registered nurse. According to the U.S.
Bureau of Labor Statistics, the mean
hourly wage for a registered nurse is
$35.36 (https://www.bls.gov/oes/
current/oes291141.htm). Therefore, the
estimated cost burden to the home
infusion therapy AO associated with the
preparation of the required notice which
is to be sent to all of the AO’s accredited
suppliers would be $53.04 (45 minutes
× $35.36 per hour = $26.52) + ($26.52
for fringe benefits and overhead)
The home infusion therapy would
also incur a cost burden for the wages
of the staff person for the time spent
preparing the required notices for
mailing and mailing them. We are
unable to accurately estimate this cost
burden because the time required to
perform this task would be dependent
on the number of accredited home
infusion therapy supplier the AO has at
the time. However, if were to assume
that a home infusion therapy AO had 50
accredited home infusion therapy
suppliers, this task would take the AO
staff 1.7 hours to complete (2 minutes ×
50 letters = 100 minutes/100 minutes
divided by 60 minutes per hour = 1.7
hours). We believe that the person that
would perform this task would be an
Administrative Assistant. According to
the U.S. Bureau of Labor Statistics, the
mean hourly wage for an executive
administrative Assistant is $28.56
(https://www.bls.gov/oes/current/
oes436011.htm). Therefore, the home
infusion therapy AO would incur a cost
burden in the amount of $97.92 for the
completion of this task ($28.56 per hour
divided by 60 minutes per hour = $0.48
per minute/60 minutes per hour divided
by 10 = 6 minutes per 0.1 hour/6
minutes × 7 = 42 minutes = 0.7 hour/
60 minutes + 42 minutes = 102 minutes
or 1.7 hours/$0.48 per minute × 102
minutes = $48.96) + ($48.96 for fringe
benefits and overhead). The home
infusion therapy AO would incur an
additional cost burden for
miscellaneous costs. These costs would
include the cost of the paper used to
print the notices on, the printer ink
used, the cost of the envelopes used,
and the postage required to mail all the
notices. We are unable to accurately
estimate these costs as they are
dependent on the number of notices that
would be sent. We believe that these
costs would not exceed $250.
It is important to note that the home
infusion therapy AO surveyors would
rarely, if ever, be required to perform
the tasks required by proposed
§ 488.1035(e) because we would rarely
withdraw the CMS approval of a home
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
infusion therapy AO. We would do so
if there were serious, unresolved
compliance concerns that the AO was
unable or unwilling to rectify, even after
being placed on an accreditation
program probationary period. We do not
believe that it would be possible that all
of the home infusion therapy AOs
would incur these cost and time
burdens at the same time.
(d) Burden for Home Infusion Therapy
AOs Related to Proposed § 488.1040
Proposed § 488.1040 would require
that as part of the application review
process, the ongoing review process, or
the continuing oversight of an home
infusion therapy AO’s performance,
CMS may conduct onsite inspections of
the home infusion therapy AO’s
operations and offices at any time to
verify the home infusion therapy AO’s
representations and to assess the home
infusion therapy AO’s compliance with
its own policies and procedures.
Proposed § 488.1040(b) provides that
the activities to be performed by CMS
staff during the onsite inspections may
include, but are not limited to the
following: (1) Interviews with various
AO staff; (2) review of documents,
survey files, audit tools, and related
records; (3) observation of meetings
concerning the home infusion therapy
accreditation process; (4) auditing
meetings concerning the accreditation
process; (5) observation of in-progress
surveys and audits; and (6) evaluation of
the AO’s survey results and
accreditation decision-making process.
We believe that there would be little
burden associated with the onsite visits
made by CMS to the home infusion
therapy AO’s operations and offices
because most of the activities related to
the onsite visit involve work performed
by the CMS staff, which would not
impose burden on the AO staff (such as
review of records or observation of
meeting held at the AOs offices). We
estimate that the time burden to the
home infusion therapy AO associated
with these onsite visits would include
the time required for the AO staff to
greet the CMS team upon arrival and
show them to the conference room, the
time required to locate the records the
CMS team requests for review, and the
time required for CMS to conduct
interviews of AO staff members. If the
home infusion therapy AOs records are
electronic, an AO staff member may
need to remain with the CMS team
during their record review to assist them
with access to the AO’s records.
We are not able to accurately estimate
the total time that would be required for
these activities because we have not yet
accredited any home infusion therapy
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
AOs, nor have we had an opportunity to
perform an onsite visit to a home
infusion therapy AO. We do not yet
know what type of accreditation
standards and surveys processes the
home infusion therapy AOs would use.
Also, we do not know the amount and
type of records we would seek to review
during an onsite visit to a home infusion
therapy AO or approximately how much
time we would need to review these
records. Likewise, we do not yet know
how much interaction we would need to
have with the home infusion therapy
AO staff or which AO staff members we
would choose to interview. The onsite
AO visits we have performed for other
types of AOs have lasted 1 to 2 days
depending on the type of AO.
However, if we estimate that it would
take 1 hour for the CMS team entrance
conference, 8 hours for the CMS team to
perform their records review and 1 hour
for the CMS team conduct the exit
conference, the home infusion therapy
AO would incur a time burden in the
amount of 1 hour for each AO staff
person that attends the entrance
conference, 8 hours for any staff that
remains with the CMS team to assist
them with the record review and 1 hour
of time for each AO staff person that
attends the exit conference. We believe
that the AO staff that would be
attending the entrance and exit
conferences and assisting the CMS staff
with their records review would most
likely be clinicians such as registered
nurses. According to the U.S. Bureau of
Labor Statistics, the mean hourly wage
for a non-industry specific registered
nurse is $35.36 (https://www.bls.gov/
oes/current/oes291141.htm). We
estimate that approximately 4 AO staff
persons would attend the entrance and
exit conferences and that one AO staff
person would assist the CMS team with
their record review.
Based on the a previously stated time
estimate, we estimate that the home
infusion therapy AO would incur a cost
burden in the amount of $282.88 for
wages for four AO staff for attendance
at the entrance conference. ($35.36 per
hour per each AO staff × 1 hour =
$35.36/$35.36 per hour × 4 AO staff =
$141.44) + ($141.44 for fringe benefits
and overhead).
We further estimate that the AO
would incur a cost burden in the
amount of $282.88 for the wages of the
four AO staff for attendance at the exit
conference. ($35.36 per hour per each
AO staff × 1 hour = $35.36/$35.36 per
hour × 4 AO staff = $141.44) + ($141.44
for fringe benefits and overhead).
We also estimate that the AO would
incur a cost burden in the amount of
$565.76 for the wages of the AO staff
PO 00000
Frm 00153
Fmt 4701
Sfmt 4702
32491
person that would remain with the CMS
team to assist them with their record
review. (8 hours × $35.36 = $282.88) +
($282.88 for fringe benefits and
overhead).
The total estimated cost burden to the
home infusion therapy AO associated
with the CMS onsite visit is $1,131.52
($282.88 for entrance conference +
$282.88 for exit conference + $565.76
for assisting CMS staff with record
review = $1,131.52). The estimated cost
burden across all of the potential six
home infusion therapy AOs would be
$6,789.12.
In this proposed rule, we have
proposed that the six AOs that currently
provide accreditation to home infusion
therapy suppliers must submit an
application to CMS for approval of a
separate and distinct home infusion
therapy accreditation program. A
corporate onsite visit to the home
infusion therapy AOs office is a part of
the application review and approval
process. Therefore, each of the AOs that
submit an application to CMS for
approval of a home infusion therapy
program would incur the previously
stated estimated burden related to the
corporate onsite visit. However, after the
initial application process has been
completed, CMS would only make
additional corporate onsite visits every
6 years when the home infusion therapy
AOs submit their renewal application.
Therefore, this would not be is a
frequent or ongoing burden incurred by
the home infusion therapy AOs.
(e) Burden for Home Infusion Therapy
AOs Related to Proposed § 488.1045
Proposed § 488.1045 contains
regulations related to the voluntary and
involuntary termination of the CMS
approval of a home infusion therapy
AO’s home infusion therapy
accreditation program. Proposed
§ 488.1045(a) would provide that a
home infusion therapy accrediting
organization that decides to voluntarily
terminate its CMS-approved home
infusion therapy accreditation program
must provide written notice at least 90
days in advance of the effective date of
the termination to CMS and each of its
accredited home infusion therapy
suppliers.
The requirement that the home
infusion therapy AO provide notice of
its decision to voluntarily terminate its
CMS approved home infusion therapy
accreditation program to CMS and all of
its accredited home infusion therapy
suppliers would cause the AO to incur
the following time burdens: (1) The time
required to prepare and send the
required notice to CMS; and (2) the time
required to prepare and send the
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32492
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
required notice to all of the AOs
accredited home infusion therapy
suppliers. We would require that the
AO send the required notice of their
decision to voluntarily terminate its
CMS-approved accreditation program to
CMS by U.S. mail. We would also
require the AO to send the required
notice to all of its accredited home
infusion therapy suppliers by U.S. mail.
We estimate that it would take
approximately 60 minutes for the AO
staff person to prepare the letter to CMS
in which the AO notified CMS that the
AO wishes to voluntarily terminate its
CMS-approved home infusion therapy
accreditation program, print the letter
and mail it.
We further estimate that it would take
the AO staff person another 4 hours to
perform the following tasks: (1) Draft a
letter its accredited home infusion
therapy suppliers, giving notice that the
AO is voluntarily terminating its CMS
approved home infusion therapy
accreditation program; (2) perform a
mail merge to prepare a copy of the
letter addressed to each accredited
home infusion therapy supplier; (3)
print out a letter to each accredited
supplier and envelope; put the letters
into the envelopes; (4) affix the correct
amount of postage; and (5) put the
envelopes in the outgoing mail. We
believe that the person at the AO who
would perform these tasks would most
likely be a clinician such as a registered
nurse. According to the U.S. Bureau of
Labor Statistics, the mean hourly wage
for a registered nurse is $35.36 (https://
www.bls.gov/oes/current/
oes291141.htm). Therefore, the
estimated cost burden to the home
infusion therapy AO associated with the
preparation of the required notice which
is to be sent to all of the AO’s accredited
suppliers would be $35.36 (60 minutes
× $35.36 per hour = $35.36).
The home infusion therapy AO would
also incur a cost burden for the wages
of the staff person for the time spent
preparing and mailing the required
notices to be sent to the AO’s accredited
home infusion therapy suppliers. As
stated previously, we estimate that it
would take approximately 4 hours of
time for an AO staff person to prepare
the required notification letter to the
AOs accredited providers, print out a
copy of the letter for each accredited
home infusion therapy supplier and put
these letters into the mail. We believe
that the person at the AO who would
perform these tasks would most likely
be a clinician such as a registered nurse.
According to the U.S. Bureau of Labor
Statistics, the mean hourly wage for a
registered nurse is $35.36 (https://
www.bls.gov/oes/current/
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
oes291141.htm). Therefore, the
estimated cost burden to the home
infusion therapy AO associated with the
preparation of the required notice for
mailing would be $353.60 (4 hours ×
$35.36 per hour = $176.80) + ($176.80
for fringe benefits and overhead).
The home infusion therapy AO would
incur an additional burden for
miscellaneous costs associated with the
preparation of the required notices to be
sent to CMS and the AOs accredited
home infusion therapy suppliers,
including the cost of the paper on which
the notices are printed, the printer ink
used, the cost of the envelopes used,
and the postage required to mail all of
the notices. We are unable to accurately
estimate these costs as they are
dependent on the number of notices that
would need to be sent. However we
believe these costs would not exceed
$200. We seek comment on how to
estimate this burden.
It is important to note that we have
not calculated the burden associated
with the tasks required of the home
infusion therapy AO under § 488.1045
across all of the potential home infusion
therapy AOs. We have not done so
because the need for a home infusion
therapy AO to perform these tasks only
arise if a home infusion therapy AO
voluntarily decides to terminate its CMS
approved home infusion therapy
accreditation program. This would
occur rarely, if ever.
We do not believe that there would
ever be a situation in which all six of
the potential home infusion therapy
AOs would decide to terminate their
CMS approved accreditation programs
simultaneously.
Proposed § 488.1045(b) states that
once CMS publishes a notice in the
Federal Register announcing the
decision to involuntarily terminate the
home infusion therapy AO’s home
infusion therapy accreditation program,
the home infusion therapy AO must
provide written notification to all
suppliers accredited under its CMSapproved home infusion therapy
accreditation program by no later than
30 calendar days after the notice is
published in the Federal Register. This
notice would announce that CMS is
withdrawing its approval of the AOs
home infusion therapy accreditation
program and the implications for the
home infusion therapy suppliers
payment status in accordance with the
requirements at § 488.1010(f) once their
current term of accreditation expires.
The time burden associated with
proposed § 488.1045(b) would be the
time it takes for the home infusion
therapy AO to prepare and send the
required written notification to all
PO 00000
Frm 00154
Fmt 4701
Sfmt 4702
accredited home infusion therapy
suppliers which states that CMS is
withdrawing the AOs approval of the
home infusion therapy accreditation
program and which also states the
implications for the home infusion
therapy suppliers payment status. We
estimate that it would take no more than
4 hours for an AO staff person to
perform the following tasks: (1) Draft the
required notification letter; (2) perform
a mail merge to prepare a copy of the
letter that is addressed to each home
infusion therapy supplier accredited by
the AO; (3) print copies of the
notification letters for each of the AOs
accredited home infusion therapy
suppliers; (4) put each notifications
letter into an envelope; (5) affix the
correct amount of postage to the
envelope and (6) put the envelopes into
the outgoing mail.
The home infusion therapy AO would
incur a cost burden for the wages for the
AO staff who performs the previously
stated tasks. We believe that the person
at the AO who would perform these
tasks would most likely be a clinician
such as a registered nurse. According to
the U.S. Bureau of Labor Statistics, the
mean hourly wage for a registered nurse
is $35.36 (https://www.bls.gov/oes/
current/oes291141.htm). Therefore, the
estimated cost burden to the home
infusion therapy AO associated with the
preparation of the required notice which
is to be sent to all of the AO’s accredited
suppliers would be $282.88 (4 hours ×
$35.36 per hour = $141.44) + ($141.44
for fringe benefits and overhead).
The home infusion therapy AO would
incur an additional burden for
miscellaneous costs associated with the
preparation of the required notices to be
sent to the AOs accredited home
infusion therapy suppliers, including
the cost of the paper on which the
notices are printed, the printer ink used,
the cost of the envelopes used, and the
postage required to mail all of the
notices. We believe that these costs
would not exceed $200.
It is important to note that we have
not calculated the burden associated
with the tasks required of the home
infusion therapy AO under § 488.1045
across all of the potential home infusion
therapy AOs. We have not done so
because the need for a home infusion
therapy AO to perform these tasks
required by § 488.1045(b) would only
arise if CMS decides to involuntarily
terminate the CMS approval of the AO’s
home infusion therapy accreditation
program. This would occur rarely, if
ever. Also, we do not believe that there
would ever be a situation in which all
6 of the potential home infusion therapy
AOs would decide to terminate their
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
CMS approved accreditation programs
simultaneously.
Proposed § 488.1045(c)(3) would
require that for both voluntary and
involuntary terminations of a home
infusion therapy AOs CMS approved
home infusion therapy accreditation
program, the home infusion therapy AO
must provide a second written
notification to all of its accredited home
infusion therapy suppliers ten calendar
days prior to the AO’s accreditation
program termination effective date. We
estimate that the time and cost burdens
associated with this requirement would
be the same as our estimated burden for
proposed § 488.1045(b) set forth
previously.
Proposed § 488.1045(d) sets forth the
required steps that a home infusion
therapy AO must take when one of its
accredited home infusion therapy
suppliers has requested a voluntary
withdrawal from accreditation. The
withdrawal from accreditation by the
home infusion therapy supplier may not
become effective until the AO completes
all of the following 3 steps: (1) The
home infusion therapy AO must contact
the home infusion therapy supplier to
seek written confirmation that the home
infusion therapy supplier intends to
voluntarily withdraw from the home
infusion therapy accreditation program;
(2) the home infusion therapy AO must
advise the home infusion therapy
supplier, in writing, of the statutory
requirement for accreditation for all
home infusion therapy suppliers and
the possible payment consequences for
a lapse in accreditation status; (3) the
home infusion therapy AO must submit
their final notice of the voluntary
withdrawal of accreditation by the home
infusion therapy supplier to CMS by no
later than 5 business days after the
request for voluntary withdrawal is
ultimately processed and effective.
The burden associated with the
requirement that the home infusion
therapy AO contact the home infusion
therapy supplier to seek written
confirmation that the home infusion
therapy supplier intends to voluntarily
withdraw from the home infusion
therapy accreditation program would
include the time required for the AO to
contact the home infusion therapy
supplier to request written confirmation
that the home infusion therapy supplier
does indeed want to terminate their
home infusion therapy accreditation.
We estimate that the AO would most
likely contact the home infusion therapy
supplier to make this request by
telephone or email. We estimate this
would take no more than 15 minutes.
The AO would incur a cost burden for
the wages of the AO staff person for the
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
time spent contacting the home infusion
therapy supplier to confirm they intend
to voluntarily withdraw from the home
infusion therapy accreditation program.
We believe that the person at the AO
who would perform this task would
most likely be a clinician such as a
registered nurse. According to the U.S.
Bureau of Labor Statistics, the mean
hourly wage for a registered nurse is
$35.36 (https://www.bls.gov/oes/
current/oes291141.htm). Therefore, the
estimated cost burden to the home
infusion therapy AO associated with
contacting the home infusion therapy
supplier to confirm that they do want to
voluntarily terminate would be $17.68
(15 minutes × $35.36 per hour = $8.84)
+ ($8.84 for fringe benefits and
overhead).
The home infusion therapy AO would
also incur a time burden associated with
the requirement that they send a written
notice to the home infusion therapy
supplier that is voluntarily terminating
their home infusion therapy
accreditation, which provides notice of
the statutory requirement for
accreditation for all home infusion
therapy suppliers and the possible
payment consequences for a lapse in
accreditation status. We estimate that it
would take the home infusion therapy
no more than 60 minutes to prepare the
written notification.
We believe that the person at the AO
who would prepare the required written
notice to be sent to the home infusion
therapy supplier that is voluntarily
terminating its home infusion therapy
accreditation would most likely be a
clinician such as a registered nurse.
According to the U.S. Bureau of Labor
Statistics, the mean hourly wage for a
registered nurse is $35.36 (https://
www.bls.gov/oes/current/
oes291141.htm). Therefore, the
estimated cost burden to the home
infusion therapy AO associated with the
preparation of the required written
notice would be $70.72 (1 hours ×
$35.36 per hour = $35.36) + ($35.36 for
fringe benefits and overhead). We
further estimate that the AO would
incur postage costs in the amount of
$0.50 for each letter sent.
Finally, we estimate the burden
associated with § 488.1045(d)(3) would
include the time required for the home
infusion therapy AO staff to prepare a
final notice of voluntary withdrawal of
accreditation by the home infusion
therapy supplier and the time required
to send this notice to CMS. We estimate
that it would only take the AO staff 15
minutes or less to prepare the required
notice for CMS, because this notice
could be sent to CMS by email. We
estimate it would take an additional 10
PO 00000
Frm 00155
Fmt 4701
Sfmt 4702
32493
minutes of time for the AO staff to
prepare the email and attach the written
notice to the email.
The AO would incur a cost burden for
the wages of the AO staff for the time
spent preparing the notice and sending
it to CMS. We believe that the person at
the AO who would prepare the required
written notice to be sent to CMS would
most likely be a clinician such as a
registered nurse. According to the U.S.
Bureau of Labor Statistics, the mean
hourly wage for a registered nurse is
$35.36 (https://www.bls.gov/oes/
current/oes291141.htm). Therefore, the
estimated cost burden to the home
infusion therapy AO associated with the
preparation of the required written
notice to be sent to CMS would be
$29.48 (15 minutes × $35.36 per hour =
$8.84) + (10 minutes × $35.36 per hour
= $5.90) + ($14.74 for fringe benefits and
overhead).
It is important to note that we have
not calculated the burden associated
with the tasks required of the home
infusion therapy AO under
§ 488.1045(d) across all of the potential
home infusion therapy AOs. We have
not done so because the need for a home
infusion therapy AO to perform these
tasks would only arise if a home
infusion therapy supplier would decide
to voluntarily terminate its accreditation
with the home infusion therapy AO.
This would occur on an infrequent
basis. We do not believe that there
would ever be a situation in which all
6 of the potential home infusion therapy
AOs would have a home infusion
therapy supplier decide to voluntarily
terminate the accreditation with their
home infusion therapy AOs
simultaneously.
(f) Burden for Home Infusion Therapy
AOs Associated With Proposed
§ 488.1050
Proposed § 488.1050(a) would provide
that a home infusion therapy AO that is
dissatisfied with a determination, made
by CMS, that its home infusion therapy
accreditation requirements do not
provide or do not continue to provide
reasonable assurance that the suppliers
accredited by the home infusion therapy
AO meet the applicable quality
standards is entitled to reconsideration.
Proposed § 488.1050(b)(1) would
require that a written request for
reconsideration be filed within 30
calendar days of the receipt of CMS’
notice of an adverse determination or
non-renewal. Proposed § 488.1050(b)(2)
would provide that the written request
for reconsideration must specify the
findings or issues with which the home
infusion therapy AO disagrees and the
reasons for the disagreement. Proposed
E:\FR\FM\12JYP2.SGM
12JYP2
32494
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
§ 488.1050(c)(1) provides the
opportunity for a hearing to be
conducted by a hearing officer
appointed by the Administrator of CMS
and proposed § 488.1050(c)(2) provides
that written notice of the time and place
of the hearing will be provided at least
10 business days before the scheduled
date.
We estimate that it would take
approximately 2 hours for a home
infusion therapy AO to prepare its
request for reconsideration. We believe
that the person at the AO who would
prepare the request for reconsideration
would most likely be a clinician such as
a registered nurse. According to the U.S.
Bureau of Labor Statistics, the mean
hourly wage for a registered nurse is
$35.36 (https://www.bls.gov/oes/
current/oes291141.htm). Therefore, the
estimated cost burden to the home
infusion therapy AO associated with the
preparation of the request for
reconsideration would be $141.44 (2
hours × $35.36 per hour = $70.72) +
($70.72 for fringe benefits and
overhead).
The remaining information that
would be submitted in connection with
a request for reconsideration or a
reconsideration hearing, including any
evidence or testimony provided is not
considered ‘‘information’’ in accordance
with 5 CFR 1320.3(h)(8), which
excludes as ‘‘information’’ any ‘‘facts or
opinions obtained or solicited at or in
connection with public hearings.’’
It is important to note that we have
not calculated the burden associated
with the tasks required of the home
infusion therapy AO under § 488.1050
across all of the potential home infusion
therapy AOs. We have not done so
because we believe that the filing of a
request for reconsideration by a home
infusion therapy AO would occur
rarely, if ever. Further, we do not
believe that there would ever be a
situation in which all 6 of the potential
home infusion therapy AOs would
decide to file a request for
reconsideration at the same time.
Therefore, there would never be an
occurrence where all the home infusion
therapy AOs would incur the previously
stated burden simultaneously.
(g) Burdens for Home Infusion Therapy
AOs Related to Survey Activities and
Accreditation of Home Infusion Therapy
Suppliers
The home infusion therapy AO would
incur time and cost associated the
accreditation of home infusion therapy
suppliers. These would include the time
and costs required to perform an onsite
survey, offsite survey or other type of
survey activity for each home infusion
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
therapy supplier that has hired that AO
to provide accreditation. However, as
we have not approved any home
infusion therapy AOs, we do not yet
know what type of home infusion
therapy accreditation standards they
will use, or what the home infusion
therapy accreditation survey process
will consist of. Therefore, we are unable
to accurately estimate the time and cost
burden associated with the survey of
home infusion therapy suppliers.
However, we can state that if the
home infusion therapy AO were to
perform an onsite survey, it would incur
wages for each of the surveyors that are
sent to perform the survey for the
amount of time spent performing the
survey. The AO would also incur wages
for the time spent by the surveyors or
other home infusion therapy AO staff in
reviewing the survey documents,
making a decision about whether to
grant accreditation to the home infusion
therapy supplier that was surveyed and
preparing the decision letter to the
home infusion therapy supplier. The
AO would also incur travel costs for the
AO staff to travel to the home infusion
therapy supplier’s location to perform
the survey.
If the home infusion therapy AO were
to do an offsite records audit survey, the
AO would request that the home
infusion therapy supply the AO with
specific records. The AO would incur
costs for the wages of the AO staff that
performed the audit of the documents
provided by the home infusion therapy
supplier. The AO would also incur
wages for the time spent by the
surveyors or other home infusion
therapy AO staff in making a decision
about whether to grant accreditation to
the home infusion therapy supplier that
was audited and preparing the decision
letter to the home infusion therapy
supplier.
We seek comment on how to estimate
this burden.
2. Burden to Home Infusion Therapy
Suppliers Related to Home Infusion
Therapy Health and Safety Standards
All existing home infusion therapy
suppliers are already accredited by
existing home infusion therapy AOs to
meet requirements established by
private insurers and Medicare
Advantage plans. We are proposing that,
in order for the existing home infusion
therapy suppliers accredited by these
AOs to continue to receive payment for
the home infusion therapy services
provided, these AOs must obtain
Medicare approval for a home infusion
therapy accreditation program. To
obtain this CMS approval, we are
proposing that these AOs would be
PO 00000
Frm 00156
Fmt 4701
Sfmt 4702
required to submit an application to
CMS seeking approval of a home
infusion therapy accreditation program
that meets the requirements set forth in
the proposed new home infusion
therapy AO approval and oversight
regulations and proposed new home
infusion therapy health and safety
regulations. We would also require that
the home infusion therapy program
submitted by these AOs be separate and
distinct from the AOs home health
deeming accreditation program.
It is likely that the home infusion
therapy suppliers would need to be
resurveyed after their home infusion
therapy AO obtains CMS approval of a
home infusion therapy accreditation
program, under section
1861(iii)(3)(D)(i)(III) of the Act. We
believe this resurvey would be
necessary because the AOs would have
to determine if the home infusion
therapy suppliers they accredit meet
their new Medicare-approved home
infusion therapy accreditation program
accreditation standards. However, if a
current home infusion therapy AOs
current home infusion therapy
standards already meet or exceed the
proposed home infusion therapy health
and safety standards, so that a revision
of that AOs home infusion therapy
accreditation standards is not required,
then a resurvey of that AO’s accredited
home infusion therapy suppliers may
not be necessary.
The home infusion therapy supplier
would incur some time burden in order
to come into compliance with the home
infusion therapy AOs new home
infusion therapy accreditation program
requirements initially and thus prepare
for the accreditation survey. However,
all existing home infusion therapy
suppliers are already accredited by
existing home infusion therapy AOs to
meet requirements established by
private insurers and Medicare
Advantage plans. Therefore, we assume
that there would be little, is any new
burden imposed on home infusion
therapy suppliers in order to implement
the proposed new health and safety
standards.
The home infusion therapy supplier
would be charged a fee by the AO for
providing accreditation services. Fees
for the home infusion therapy
accreditation currently offered by the
six AOs listed previously accreditation
programs offered by the six AOs listed
previously vary between $5,950 and
$12,500 and, in general, currently cover
all of the following items: Application
fee, manuals, initial accreditation fee,
onsite surveys or other auditing
(generally once every 3 years), and
travel, when necessary for survey
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
personnel. Accreditation costs also vary
by the size of the provider or supplier
seeking accreditation, its number of
locations, and the number of services it
provides.
We recognize that cost and time
burdens associated with becoming
accredited may be a barrier for small
suppliers such as home infusion therapy
suppliers. We propose to implement the
following to minimize the burden of
accreditation on suppliers, including
small businesses:
• Multiple accreditation
organizations—We expect that more
than one AO would submit an
application to become a designated
Home Infusion Therapy AO. We believe
that selection of more than one home
infusion therapy AO would introduce
competition resulting in reductions in
accreditation costs.
• Required plan for small
businesses—During the application
process we would require prospective
home infusion therapy AOs to include
a plan that details their methodology to
reduce accreditation fees and burden for
small or specialty suppliers. This would
need to include that the AO’s fees are
based on the size of the organization.
• Reasonable quality standards—The
quality standards that would be used to
evaluate the services rendered by each
home infusion therapy supplier are
being proposed in this rule. Many home
infusion therapy suppliers already
comply with the standards and have
incorporated these practices into their
daily operations. It is our belief that
compliance with the quality standards
would result in more efficient and
effective business practices and would
assist suppliers in reducing overall
costs.
There are at least two important
sources of uncertainty in estimating the
impact of accreditation on home
infusion therapy suppliers. First, our
estimates assume that all home infusion
therapy suppliers with positive
Medicare payments would seek
accreditation. We assume that home
infusion therapy suppliers who
currently receive no Medicare allowed
charges would choose not to seek
accreditation. It is also possible that
many of the home infusion therapy
suppliers with allowed charges between
$1 and $1,000 may decide not to incur
the costs of accreditation.
Second, it is difficult to predict what
accreditation fees would be in the
future. Our experience with other
accreditation programs has lead us to
believe that the accreditation rates
would go up, due to factors such as
wage increases, and increased travel
costs. To monitor accreditation fees, we
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
propose to require the AOs for home
infusion therapy suppliers to submit
their proposed fees to CMS for review
for reasonableness. We would require
home infusion therapy AOs to notify
CMS anytime there is an increase in
accreditation fees.
(d) Medicare-Certified Accreditation
Organizations—Proposed Changes to 42
CFR 488.5
We have proposed to modify the AO
approval and oversight regulations for
Medicare-certified providers and
suppliers by adding two new
requirements. The first proposed new
requirement is to added to 42 CFR
488.5(a)(7) and is a requirement that in
their application for CMS approval, the
AOs that accredited Medicare-certified
providers and suppliers must include a
statement acknowledging that all
accrediting organization surveyors have
completed or will complete the relevant
program specific CMS online trainings
established for state surveyors, initially,
and thereafter. The second requirement
is to be added as § 488.5(a)(18)(iii) and
would require that the AOs for
Medicare-certified providers and
suppliers include a written statement in
their application for CMS approval
agreeing that if a fully accredited and
deemed facility in good standing
provides written notification that they
wish to voluntarily withdraw from the
accrediting organization’s CMSapproved accreditation program, the
accrediting organization must continue
the facility’s current accreditation in full
force and effect until the effective date
of withdrawal identified by the facility
or the expiration date of the term of
accreditation, whichever comes first.
(1) Burden Associated With the Online
Training Requirement for AO Surveyors
CMS provides a number of online
surveyor training modules that are
available to the State Survey Agency
surveyors. We have proposed to require
the AO surveyors to take this training in
an attempt to decrease the historically
high disparity rate between the AOs
survey results and those of the
validation surveys performed by the
State Survey Agency surveyors.
CMS offers 168 online surveyor
training programs that are available for
the State Survey Agency surveyors. This
website provides courses that are
general in nature such as ‘‘Principles of
Documentation Learning Activity—Long
Term Care’’, ‘‘Basic Writing Skills for
Surveyor Staff’’, Infection Control,
Patient Safety, and Emergency
Preparedness. The CMS Surveyor
Training website also offers courses
related to specific healthcare settings,
PO 00000
Frm 00157
Fmt 4701
Sfmt 4702
32495
services, and regulations, such as
hospitals, CAHs, ASCs, CLIA, CMHCs,
EMTALA, FQHCs, HHAs and OASIS,
Hospices, Nursing Homes and the MDS,
Outpatient Physical Therapy/Outpatient
Speech Therapy (OPT/OST). These
courses are self-paced and the person
taking the course can take the courses
over a period of time. The amount of
time required to complete each of these
training course varies depending on the
pace preferred by the trainee.
We estimate that each SA surveyor
takes approximately 10 courses on the
CMS Surveyor Training website. We
estimate that it would take
approximately 3–5 hours to complete
each of these courses. We believe that
the surveyors for AOs that accredit
Medicare-certified providers should
take the same number and type of
surveyor training courses as the SA
surveyors (that is—approximately 10
courses). This means that each of the
AOs surveyors that takes this training
would incur a time burden in the
amount of 30 to 50 hours.
The AOs that accredit Medicarecertified providers and suppliers would
incur a cost burden for the wages of the
surveyor for the time they spend taking
these online surveyor training courses.
Most surveyors are clinicians such as
registered nurses. According to the U.S.
Bureau of Labor Statistics, the mean
hourly wage for a registered nurse is
$35.36 (https://www.bls.gov/oes/
current/oes291141.htm). As noted
previously, we estimated that it would
take approximately 30–50 hours for
each AO surveyor to complete 10 online
surveyor courses. Therefore, the AO
would incur wages in the amount of
$1,060.80 to $1,768 per each surveyor
that completes the CMS online surveyor
training (($35.36 × 30 hours = $1,060.80)
and ($35.36 × 50 hours = $1,768)). The
AO would also incur additional costs
for fringe benefits and overhead in the
amount of $1,060.80 to $1,768.00 per
each surveyor that completes the CMS
online surveyor training.
We are not able to accurately estimate
to total time and cost burden to each AO
for the wages incurred for the time spent
by all surveyors of that AO that take the
CMS online surveyor training courses,
because we do not know exactly how
many surveyors each AO has. However,
if we estimate that each AO has 15
surveyors, the estimated time burden to
each AO associated with this
requirement would be 450 to 750 hours
((30 hours × 15 surveyors = 450 hours
per all surveyors) and (50 hours × 15
surveyors = 750 hours per all
surveyors)). The estimated cost burden
to each AO for Medicare-certified
providers and supplies associated with
E:\FR\FM\12JYP2.SGM
12JYP2
32496
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
this requirement would be $31,824 to
$53,040 (($1,060.80 × 15 = $15,912) and
($1,768.00 × 15 = $26,520) and ($15,912
to $26,520 for fringe benefits and
overhead)).
There are currently 9 AOs that
accredit Medicare-certified providers
and suppliers. We estimate that the time
burden across all of these AOs
associated with the requirement that
their surveyors take the CMS online
surveyor training would be 4,050 to
6,750 ((450 hours per all surveyors/AO
× 9 AOs = 4,050 hours across all AOs)
and (750 hours per all surveyors/AO ×
9 AOs = 6,750 hours across all AOs)).
The estimated cost across all AOs that
accredit Medicare-certified providers
and suppliers would be $143,208 to
$238,680 (($15,912 × 9 AOs = $143,208)
and ($26,520 × 9 AOs = $238,680)). The
cost for fringe benefits and overhead on
these estimated wages across all AOs
would be $143,208 to 238,680.
(2) Burden Associated With the
Statement Requirement for AOs
We are proposing that AOs approved
in accordance with section 1865 of the
Act, and regulated under part 488
subpart A, provide a written statement
in their application in which they agree
to continue a provider’s or supplier’s
current accreditation in full force and
effect until the effective date of
withdrawal identified by the facility or
the expiration date of the term of
accreditation, whichever comes first.
Proposed § 488.5(a)(18)(iii) would
require the AOs for Medicare-certified
providers and suppliers to include a
written statement in their application
for CMS approval of their accreditation
program, agreeing that if a fully
accredited and deemed facility in good
standing provides written notification
that they wish to voluntarily withdraw
from the accrediting organization’s
CMS-approved accreditation program,
the accrediting organization must
continue the facility’s current
accreditation in full force and effect
until the effective date of withdrawal
identified by the facility or the
expiration date of the term of
accreditation, whichever comes first.
We believe that the AOs that accredit
Medicare-certified providers and
suppliers would incur limited burden
associated with this requirement,
because this proposed regulation simply
requires that the AOs to include a
statement in their application stating
that they agree to continue the facility’s
current accreditation in full force and
effect until the effective date of
withdrawal identified by the facility or
the expiration date of the term of
accreditation, whichever comes first, if
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
a provider of supplier provides written
notification that they wish to
voluntarily withdraw from the
accrediting organization’s CMSapproved accreditation program. We
believe that this written statement to be
provided by the AO would consist of
only 1 to 2 paragraphs and would take
no more than 15 minutes to prepare.
We believe that a clinicians such as
registered nurses would prepare the
required statement to be included in the
AOs application. According to the U.S.
Bureau of Labor Statistics, the mean
hourly wage for a registered nurse is
$35.36 (https://www.bls.gov/oes/
current/oes291141.htm). Therefore, the
estimated cost burden to the AOs that
accredit Medicare-certified providers
and suppliers associated with the
preparation of the required statement
would be approximately $17.68 ((15
minutes × $35.36 per hour = $8.84) +
($8.84 for fringe benefits and overhead)).
There are nine AOs that accredit
Medicare-certified providers and
suppliers. The cost across all AOs for
the completion of this task would be
$158.12 (($8.84 × 9 AOs = $79.56) +
($79.56 for fringe benefits and overhead.
However, AOs for Medicare-certified
providers and suppliers are required to
submit a renewal application only every
six years. Therefore, the existing AOs
would be required to submit the
statement stating that they agree to
continue the facility’s current
accreditation in full force and effect
until the effective date of withdrawal
identified by the facility or the
expiration date of the term of
accreditation, whichever comes first, if
a provider of supplier provides written
notification that they wish to
voluntarily withdraw from the
accrediting organization’s CMSapproved accreditation program with
their next renewal application which is
submitted after the publication of the
final rule. While we have calculated the
cost for the performance of this task
across all AOs that accredit Medicarecertified providers and suppliers, it is
important to note that the existing AOs
are scheduled to submit their renewal
applications at varying dates and times
over a period of several years. Therefore
there will be no time period in which
all of these AOs will incur these
expenses simultaneously.
D. Detailed Economic Analysis
1. HH PPS
This rule proposes updates for the CY
2019 HH PPS rates contained in the CY
2018 HH PPS final rule (82 FR 51676
through 51752). The impact analysis of
this proposed rule presents the
PO 00000
Frm 00158
Fmt 4701
Sfmt 4702
estimated expenditure effects of policy
changes proposed in this rule. We use
the latest data and best analysis
available, but we do not make
adjustments for future changes in such
variables as number of visits or casemix.
This analysis incorporates the latest
estimates of growth in service use and
payments under the Medicare HH
benefit, based primarily on Medicare
claims data from 2017. We note that
certain events may combine to limit the
scope or accuracy of our impact
analysis, because such an analysis is
future-oriented and, thus, susceptible to
errors resulting from other changes in
the impact time period assessed. Some
examples of such possible events are
newly-legislated general Medicare
program funding changes made by the
Congress, or changes specifically related
to HHAs. In addition, changes to the
Medicare program may continue to be
made as a result of the Affordable Care
Act, or new statutory provisions.
Although these changes may not be
specific to the HH PPS, the nature of the
Medicare program is such that the
changes may interact, and the
complexity of the interaction of these
changes could make it difficult to
predict accurately the full scope of the
impact upon HHAs.
a. HH PPS for CY 2019
Table 59 represents how HHA
revenues are likely to be affected by the
policy changes proposed in this rule for
CY 2019. For this analysis, we used an
analytic file with linked CY 2017 OASIS
assessments and HH claims data for
dates of service that ended on or before
December 31, 2017. The first column of
Table 59 classifies HHAs according to a
number of characteristics including
provider type, geographic region, and
urban and rural locations. The second
column shows the number of facilities
in the impact analysis. The third
column shows the payment effects of
the CY 2019 wage index and revised
labor share. The fourth column shows
the payment effects of the CY 2019 casemix weights. The fifth column shows
the effects of the new rural add-on
payment provision in statute. The sixth
column shows the effects of the revised
FDL ratio used to calculate outlier
payments, and the seventh column
shows the effects of the CY 2019 home
health payment update percentage.
The last column shows the combined
effects of all the policies proposed in
this rule. Overall, it is projected that
aggregate payments in CY 2019 would
increase by 2.1 percent. As illustrated in
Table 59, the combined effects of all of
the changes vary by specific types of
E:\FR\FM\12JYP2.SGM
12JYP2
32497
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
providers and by location. We note that
some individual HHAs within the same
group may experience different impacts
on payments than others due to the
distributional impact of the CY 2019
wage index, the extent to which HHAs
had episodes in case-mix groups where
the case-mix weight decreased for CY
2019 relative to CY 2018, the percentage
of total HH PPS payments that were
subject to the low-utilization payment
adjustment (LUPA) or paid as outlier
payments, and the degree of Medicare
utilization.
TABLE 59—ESTIMATED HHA IMPACTS BY FACILITY TYPE AND AREA OF THE COUNTRY, CY 2019
CY 2019
wage index
and labor
share 1
(%)
Number of
agencies
All Agencies .............................................
10,547
CY 2019
case-mix
weights 2
(%)
0.0
Rural
add-on
revisions
(%)
0.0
Updated
outlier
FDL ratio
0.51
(%)
CY 2019
HH payment
update
percentage 3
Total
(%)
¥0.1
0.1
2.1
2.1
Facility Type and Control
Free-Standing/Other Vol/NP ....................
Free-Standing/Other Proprietary ..............
Free-Standing/Other Government ...........
Facility-Based Vol/NP ..............................
Facility-Based Proprietary ........................
Facility-Based Government ......................
Subtotal:
Subtotal:
Subtotal:
Subtotal:
Subtotal:
Freestanding ......................
Facility-based ....................
Vol/NP ...............................
Proprietary .........................
Government .......................
1,065
8,366
260
604
76
176
¥0.3
0.1
0.3
0.0
¥0.3
¥0.1
¥0.1
0.0
0.1
0.0
0.1
0.0
0.0
¥0.1
¥0.1
0.0
¥0.2
¥0.3
0.2
0.1
0.2
0.2
0.2
0.2
2.1
2.1
2.1
2.1
2.1
2.1
1.9
2.2
2.6
2.3
1.9
1.9
9,691
856
1,669
8,442
436
0.0
¥0.1
¥0.2
0.1
0.1
0.0
0.0
¥0.1
0.0
0.0
¥0.1
¥0.1
0.0
¥0.1
¥0.2
0.1
0.2
0.2
0.1
0.2
2.1
2.1
2.1
2.1
2.1
2.1
2.1
2.0
2.2
2.2
¥0.3
¥0.7
¥0.2
¥0.3
¥0.5
¥0.4
0.2
0.1
0.2
0.2
0.1
0.2
2.1
2.1
2.1
2.1
2.1
2.1
2.2
2.1
2.7
2.3
2.0
2.2
0.0
0.0
0.0
0.0
0.0
¥0.1
0.2
0.1
0.2
0.2
0.2
0.1
2.1
2.1
2.1
2.1
2.1
2.1
1.8
2.2
2.5
2.1
1.8
1.6
¥0.6
0.0
0.1
0.1
2.1
2.1
2.0
2.2
0.0
0.0
0.0
0.0
0.0
¥0.5
¥0.3
0.1
0.0
0.0
0.2
0.2
0.1
0.2
0.1
0.1
0.1
0.2
0.1
0.2
2.1
2.1
2.1
2.1
2.1
2.1
2.1
2.1
2.1
2.1
1.4
1.8
2.0
2.4
2.0
1.7
2.6
2.2
2.7
2.3
0.0
¥0.1
¥0.1
¥0.1
¥0.1
0.2
0.1
0.1
0.1
0.1
2.1
2.1
2.1
2.1
2.1
2.6
2.6
2.5
2.3
2.0
Facility Type and Control: Rural
Free-Standing/Other Vol/NP ....................
Free-Standing/Other Proprietary ..............
Free-Standing/Other Government ...........
Facility-Based Vol/NP ..............................
Facility-Based Proprietary ........................
Facility-Based Government ......................
253
821
176
273
41
134
0.1
0.6
0.5
0.2
0.1
0.2
0.1
0.0
0.1
0.1
0.2
0.1
Facility Type and Control: Urban
Free-Standing/Other Vol/NP ....................
Free-Standing/Other Proprietary ..............
Free-Standing/Other Government ...........
Facility-Based Vol/NP ..............................
Facility-Based Proprietary ........................
Facility-Based Government ......................
812
7,545
84
331
35
42
¥0.4
0.0
0.1
¥0.1
¥0.6
¥0.4
¥0.1
0.0
0.1
¥0.1
0.1
¥0.1
Facility Location: Urban or Rural
Rural .........................................................
Urban .......................................................
1,698
8,849
0.4
0.0
0.0
0.0
Facility Location: Region of the Country (Census Region)
New England ............................................
Mid Atlantic ..............................................
East North Central ...................................
West North Central ..................................
South Atlantic ...........................................
East South Central ...................................
West South Central ..................................
Mountain ..................................................
Pacific .......................................................
Other ........................................................
363
482
2,031
705
1,647
423
2,774
678
1,403
41
¥0.9
¥0.3
¥0.3
0.0
0.0
0.1
0.6
¥0.3
0.3
0.9
0.0
¥0.2
0.1
0.1
¥0.2
¥0.1
0.1
0.1
0.2
¥0.9
amozie on DSK3GDR082PROD with PROPOSALS2
Facility Size (Number of First Episodes)
<100 episodes .........................................
100 to 249 ................................................
250 to 499 ................................................
500 to 999 ................................................
1,000 or More ..........................................
2,907
2,301
2,218
1,637
1,484
0.0
0.1
0.1
0.1
0.0
0.3
0.4
0.3
0.1
¥0.1
Source: CY 2017 Medicare claims data for episodes ending on or before December 31, 2017 for which we had a linked OASIS assessment.
1 The impact of the CY 2019 home health wage index is offset by the wage index budget neutrality factor described in section III.C.4 of this
proposed rule.
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00159
Fmt 4701
Sfmt 4702
E:\FR\FM\12JYP2.SGM
12JYP2
32498
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
2 The impact of the CY 2019 home health case-mix weights reflects the recalibration of the case-mix weights offset by the case-mix weights
budget neutrality factor described in section III.B of this proposed rule.
3 The CY 2019 home health payment update percentage reflects the home health payment update of 2.1 percent as described in section
III.C.2 of this proposed rule.
Region Key:
New England = Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont; Middle Atlantic = Pennsylvania, New Jersey,
New York; South Atlantic = Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, West Virginia;
East North Central = Illinois, Indiana, Michigan, Ohio, Wisconsin; East South Central = Alabama, Kentucky, Mississippi, Tennessee; West
North Central = Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota; West South Central = Arkansas, Louisiana, Oklahoma, Texas; Mountain = Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, Wyoming; Pacific = Alaska, California, Hawaii, Oregon, Washington; Other = Guam, Puerto Rico, Virgin Islands.
b. HH PPS for CY 2020 (Proposed
PDGM)
Table 60 represents how HHA
revenues are likely to be affected by the
policy changes proposed in this rule for
CY 2020. For this analysis, we used an
analytic file with linked CY 2017 OASIS
assessments and CY 2017 HH claims
data (as of March 2, 2018) for dates of
service that ended on or before
December 31, 2017. The first column of
Table 60 classifies HHAs according to a
number of characteristics including
provider type, geographic region, and
urban and rural locations. The second
column shows the number of HHAs in
the impact analysis. The PDGM, as
required by Section 51001(a)(2)(A) of
the BBA of 2018, will be implemented
in a budget neutral manner and the
third column shows the total impact of
the proposed PDGM as outlined in
section III.F of this proposed rule. As
illustrated in Table 60, the effect of the
proposed PDGM varies by specific types
of providers and location. We note that
some individual HHAs within the same
group may experience different impacts
on payments than others. This is due to
distributional differences among HHAs
with regards to the percentage of total
HH PPS payments that were subject to
the low-utilization payment adjustment
(LUPA) or paid as outlier payments, the
degree of Medicare utilization, and the
ratio of overall visits that were provided
as therapy versus skilled nursing.
As outlined in section III.F of this
proposed rule, several OASIS items
would no longer be needed to case-mix
adjust the 30-day payment under the
PDGM; therefore, we would make 19
current OASIS items (48 data elements)
optional at the FU time point starting
January 1, 2020. As also discussed in
section III.F. of this proposed rule, in
order to calculate the case-mix adjusted
payment amount for the PDGM, we
would add the collection of two current
OASIS items (10 data elements) at the
FU time point starting January 1, 2020.
Section VII of this proposed rule
provides a detailed description of the
net decrease in burden associated with
these proposed changes in conjunction
with the changes in burden that result
from OASIS item collection changes due
to the proposed removal of certain
measures required under HH QRP, also
effective for January 1, 2020 as outlined
in section V.E of this rule. We estimate
that the burden associated with OASIS
item collection as a result of this
proposed rule results in a net $60
million in annualized cost savings to
HHAs, discounted at 7 percent relative
to year 2016, over a perpetual time
horizon beginning in CY 2020.
TABLE 60—IMPACTS OF PDGM, CY 2020
Number of
agencies
All Agencies .............................................................................................................................................................
PDGM
(%)
10,480
0.0%
1,055
8,309
260
604
76
176
2.6
¥1.2
1.1
3.8
4.4
4.6
9,624
856
1,659
8,385
436
¥0.4
3.9
2.9
¥1.2
2.9
253
820
176
273
41
134
3.8
3.9
1.9
4.1
11.3
5.9
802
7,489
84
331
35
2.4
¥1.8
0.3
3.7
0.1
Facility Type and Control
Free-Standing/Other Vol/NP ....................................................................................................................................
Free-Standing/Other Proprietary .............................................................................................................................
Free-Standing/Other Government ...........................................................................................................................
Free-Based Vol/NP ..................................................................................................................................................
Free-Based Proprietary ...........................................................................................................................................
Free-Based Government .........................................................................................................................................
Subtotal:
Subtotal:
Subtotal:
Subtotal:
Subtotal:
Freestanding .....................................................................................................................................
Free-based ........................................................................................................................................
Vol/NP ...............................................................................................................................................
Proprietary .........................................................................................................................................
Government .......................................................................................................................................
amozie on DSK3GDR082PROD with PROPOSALS2
Facility Type and Control: Rural
Free-Standing/Other Vol/NP ....................................................................................................................................
Free-Standing/Other Proprietary .............................................................................................................................
Free-Standing/Other Government ...........................................................................................................................
Free-Based Vol/NP ..................................................................................................................................................
Free-Based Proprietary ...........................................................................................................................................
Free-Based Government .........................................................................................................................................
Facility Type and Control: Urban
Free-Standing/Other Vol/NP ....................................................................................................................................
Free-Standing/Other Proprietary .............................................................................................................................
Free-Standing/Other Government ...........................................................................................................................
Free-Based Vol/NP ..................................................................................................................................................
Free-Based Proprietary ...........................................................................................................................................
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00160
Fmt 4701
Sfmt 4702
E:\FR\FM\12JYP2.SGM
12JYP2
32499
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 60—IMPACTS OF PDGM, CY 2020—Continued
Number of
agencies
Free-Based Government .........................................................................................................................................
PDGM
(%)
42
3.4
1,697
8,783
4.0
¥0.6
354
479
2,012
703
1,643
423
2,750
675
1,400
41
2.5
3.1
¥1.1
¥3.9
¥5.3
0.9
4.1
¥5.2
3.8
11.0
2,841
2,301
2,218
1,636
1,484
1.9
1.1
0.6
¥0.3
¥0.2
2,620
2,620
2,620
2,620
¥9.9
¥0.8
6.5
17.0
Facility Location: Urban or Rural
Rural ........................................................................................................................................................................
Urban .......................................................................................................................................................................
Facility Location: Region of the Country (Census Region)
New England ...........................................................................................................................................................
Mid Atlantic ..............................................................................................................................................................
East North Central ...................................................................................................................................................
West North Central ..................................................................................................................................................
South Atlantic ...........................................................................................................................................................
East South Central ..................................................................................................................................................
West South Central .................................................................................................................................................
Mountain ..................................................................................................................................................................
Pacific ......................................................................................................................................................................
Other ........................................................................................................................................................................
Facility Size (Number of 1st Episodes)
< 100 episodes ........................................................................................................................................................
100 to 249 ................................................................................................................................................................
250 to 499 ................................................................................................................................................................
500 to 999 ................................................................................................................................................................
1,000 or More ..........................................................................................................................................................
Nursing/Therapy Visits Ratio
1st Quartile (Lowest 25 Nursing) .............................................................................................................................
2nd Quartile .............................................................................................................................................................
3rd Quartile ..............................................................................................................................................................
4th Quartile (Top 25 Nursing) ..................................................................................................................................
Source: CY 2017 Medicare claims data (as of March 2, 2018) for episodes ending on or before December 31, 2017 for which we had a linked
OASIS assessment.
Note(s): The ‘‘PDGM’’ is the 30-day version of the model with no behavioral assumptions applied. From the impact file, this analysis omits
354,099 60-day episodes not grouped under the PDGM (either due to a missing SOC OASIS, because they could be assigned to a clinical
grouping, or had missing therapy/nursing visits). After converting 60-day episodes to 30-day periods for the PDGM, a further 26 periods were excluded with missing NRS weights, and 2,386 periods with a missing urban/rural indicator. These excluded episodes results overall in 67 fewer
HHAs being represented than in the standard impact tables.
Region Key:
New England = Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont; Middle Atlantic = Pennsylvania, New Jersey,
New York; South Atlantic = Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, West Virginia;
East North Central = Illinois, Indiana, Michigan, Ohio, Wisconsin; East South Central = Alabama, Kentucky, Mississippi, Tennessee; West
North Central = Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota; West South Central = Arkansas, Louisiana, Oklahoma, Texas; Mountain = Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, Wyoming; Pacific = Alaska, California, Hawaii, Oregon, Washington; Other = Guam, Puerto Rico, Virgin Islands.
In response to the CY 2019 case-mix
adjustment methodology refinements
proposed in the CY 2018 HH PPS
proposed rule (82 FR 35270), a few
commenters requested that CMS include
more information in the impact table for
the proposed PDGM, specifically how
payments are impacted for patients with
selected clinical conditions as was
included in the Technical Report which
is available at: https://
downloads.cms.gov/files/
hhgm%20technical
%20report%20120516%20sxf.pdf.
Therefore, we are including Table 61
which provides more information on the
impact of the PDGM case-mix
adjustment methodology for patients
with selected clinical conditions.
amozie on DSK3GDR082PROD with PROPOSALS2
TABLE 61—IMPACT OF THE PDGM FOR SELECTED PATIENT CHARACTERISTICS
Ratio of average PDGM
payment to average
current (30-day
equivalent) payment
All Episodes (60-Day Count) ...............................................................................................................................................
1.00
Clinical Group
Behavioral Health ................................................................................................................................................................
Complex ...............................................................................................................................................................................
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00161
Fmt 4701
Sfmt 4702
E:\FR\FM\12JYP2.SGM
12JYP2
0.85
1.13
32500
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 61—IMPACT OF THE PDGM FOR SELECTED PATIENT CHARACTERISTICS—Continued
Ratio of average PDGM
payment to average
current (30-day
equivalent) payment
MMTA ..................................................................................................................................................................................
MS Rehab ............................................................................................................................................................................
Neuro Rehab .......................................................................................................................................................................
Wound ..................................................................................................................................................................................
1.00
0.96
0.93
1.27
Functional Level
Low ......................................................................................................................................................................................
Medium ................................................................................................................................................................................
High ......................................................................................................................................................................................
0.95
1.00
1.05
Admission Source
Community ...........................................................................................................................................................................
Institutional ...........................................................................................................................................................................
0.89
1.30
Timing
Early .....................................................................................................................................................................................
Late ......................................................................................................................................................................................
1.25
0.87
Comorbidity Group
No adjustment ......................................................................................................................................................................
Single Comorbidity ...............................................................................................................................................................
Comorbidity Interaction ........................................................................................................................................................
0.97
1.02
1.22
Dual Status
Not (Full) Dual Eligible .........................................................................................................................................................
Yes (Full) Dual Eligible ........................................................................................................................................................
0.99
1.03
Parenteral Nutrition
No Parenteral Nutrition ........................................................................................................................................................
Yes Parenteral Nutrition ......................................................................................................................................................
1.00
1.18
Surgical Wounds
No Known Surgical Wound .................................................................................................................................................
Yes Known Surgical Wound ................................................................................................................................................
0.98
1.11
Ulcers
No Ulcers Recorded ............................................................................................................................................................
Positive Number of Ulcers Recorded ..................................................................................................................................
0.99
1.16
Bathing
Able to Bathe with some independence ..............................................................................................................................
Cannot bathe independently ................................................................................................................................................
0.97
1.08
Poorly-Controlled Cardiac Dysrhythmia
No Poorly-Controlled Cardiac Dysrhythmia .........................................................................................................................
Yes Poorly-Controlled Cardiac Dysrhythmia .......................................................................................................................
1.00
1.04
amozie on DSK3GDR082PROD with PROPOSALS2
Poorly-Controlled Diabetes
No Poorly-Controlled Diabetes ............................................................................................................................................
Yes Poorly-Controlled Diabetes ..........................................................................................................................................
0.99
1.06
Poorly-Controlled Peripheral Vascular Disease
No Poorly-Controlled Peripheral Vascular Disease ............................................................................................................
Yes Poorly-Controlled Peripheral Vascular Disease ...........................................................................................................
1.00
1.07
Poorly-Controlled Pulmonary Disorder
No Poorly-Controlled Pulmonary Disorder ..........................................................................................................................
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00162
Fmt 4701
Sfmt 4702
E:\FR\FM\12JYP2.SGM
12JYP2
1.00
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
32501
TABLE 61—IMPACT OF THE PDGM FOR SELECTED PATIENT CHARACTERISTICS—Continued
Ratio of average PDGM
payment to average
current (30-day
equivalent) payment
Yes Poorly-Controlled Pulmonary Disorder .........................................................................................................................
1.03
Open Wound/Lesion
No Open Wound/Lesion ......................................................................................................................................................
Yes Open Wound/Lesion .....................................................................................................................................................
0.98
1.10
Temporary Health Risk
No Temporary Health Risk ..................................................................................................................................................
Yes Temporary Health Risk ................................................................................................................................................
0.99
1.02
Fragile/Serious Health Risk
Yes Fragile/Serious Health Risk ..........................................................................................................................................
No Fragile/Serious Health Risk ...........................................................................................................................................
0.98
1.04
Note(s): **For this table only**, payments are for normal episodes and do not include outlier payments. For comparability with the 30-day
PDGM, current payments have been halved from 60-day amounts to simulate 30-day payments. PDGM payments have been normalized so that
national average 30-day payments equaled the 30-day current system equivalent payment to facilitate an understanding of reallocation of payments from the current system. For the ratio of PDGM to current payments in the right-hand column, a value greater than one signifies that characteristic would receive increased payment and a value less than one would signify that characteristic would receive lesser payment, all else
equal, in the PDGM. To be classified as Poorly Controlled Cardiac Dysrhythmia, Diabetes, Peripheral Vascular Disease, or Pulmonary Disorder
required one of the following respective primary or secondary diagnosis codes with an accompanying recorded ‘‘poorly-controlled’’ degree of
symptom control: Cardiac Dysthymia: ICD–10 I–21–I22.9 & I47–I49; Diabetes: E08.0–E08.8, E09.0–E09.8, & E10–E14; Peripheral Vascular Disease: ICD–10 I73; and Pulmonary Disorder: (I40–47, J84.01, J84.02, J84.03, J84.10, J96.0–J96.92, & J98.01–J98.3).
amozie on DSK3GDR082PROD with PROPOSALS2
2. HHVBP Model
Table 62 displays our analysis of the
distribution for possible payment
adjustments at the maximum 7-percent,
and 8-percent rates that will be used in
Years 4 and 5 of the Model. These
analyses use performance year data from
2016, the first year of HHVBP, the most
recent year for which complete
performance year data are available. The
estimated impacts are for the following
proposed changes, each of which would
take effect beginning with PY4 (2019):
• Remove two OASIS-based measures
(Influenza Immunization Received for
Current Flu Season and Pneumococcal
Polysaccharide Vaccine Ever Received);
• Replace three OASIS-based
measures (Improvement in Bathing,
Improvement in Bed Transferring, and
Improvement in AmbulationLocomotion) with two composite
measures (Total Change in Self Care,
Total Change in Mobility). The two
composite measures would have a
maximum score of 15 points;
• Reduce the maximum possible
improvement points from 10 to 9 (13.5
for the two composite measures); and,
• Change the weights given to the
performance measures used in the
Model so that the OASIS and claimsbased measures each count for 35
percent and the HHCAHPS measures
count for 30 percent of the 90 percent
of the Total Performance Score (TPS)
that is based on performance on the
Clinical Quality of Care, Care
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
Coordination and Efficiency, and Person
and Caregiver-Centered Experience
measures. Data reporting for each New
Measure would continue to have equal
weight and account for the 10 percent
of the TPS that is based on the New
Measures collected as part of the Model.
The weight of the unplanned
hospitalization measure would also be
increased so that it has three times the
weight of the ED use without
hospitalization measure.
We analyzed the payment adjustment
percentage and the number of eligible
HHAs under current policy to determine
the impacts if the proposed changes in
this rule were finalized. We used PY1
(CY2016) data to measure the impacts.
The data sources for these analyses are
data from the QIES system for the
existing OASIS and claims-based
measures, OASIS assessments for the
two composite measures, HHCAHPS
data received from the HHCAHPS
contractor, and New Measure data
submitted by Model participants. HHAs
are classified as being in the smaller or
larger volume cohort using the 2016
Quality Episode File, which is created
using OASIS assessments. We note that
this impact analysis is based on the
aggregate value across all nine Model
states.
Table 63 displays our analysis of the
estimated impact of the proposals in
this rule on the number of eligible
HHAs and the distribution of percentage
change in payment adjustment
PO 00000
Frm 00163
Fmt 4701
Sfmt 4702
percentage based on the same PY1
(CY2016) data used to calculate Table
62. We note that this impact analysis is
based on the aggregate value across all
nine Model states. Note that all
Medicare-certified HHAs that provide
services in Massachusetts, Maryland,
North Carolina, Florida, Washington,
Arizona, Iowa, Nebraska, and Tennessee
are required to compete in this Model.
The analysis is calculated at the state
and size cohort level. It is expected that
a certain number of HHAs would not
have a payment adjustment because
they may be servicing too small of a
population to report an adequate
number of measures to calculate a TPS.
Table 63 shows that there would be a
reduction in the number of HHAs that
would have a sufficient number of
measures to receive a payment
adjustment for performance year 4 of 31
HHAs (Change column), a decrease from
1,610 HHAs (Current column) to 1,579
HHAs (Simulated column) across the
nine selected states.
This analysis reflects only HHAs that
would have data for at least five
measures that meet the requirements of
§ 484.305 and would be included in the
LEF and would have a payment
adjustment calculated. Value-based
incentive payment adjustments for the
estimated eligible 1,579 HHAs in the
selected states that would compete in
the HHVBP Model are stratified by size
as described in section IV.B. of the CY
2017 HH PPS final rule. As finalized in
E:\FR\FM\12JYP2.SGM
12JYP2
32502
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
section IV.B. of the CY 2017 final rule,
there must be a minimum of eight HHAs
in any cohort.
Those HHAs that are in states that do
not have at least eight smaller-volume
HHAs will not have a separate smallervolume cohort and thus there will only
be one cohort that will include all the
HHAs in that state. As indicated in
Table 63, Maryland, North Carolina,
Tennessee, Washington, and Arizona
would have only one cohort while
Florida, Iowa, Massachusetts, and
Nebraska would have both a smallervolume cohort and a larger-volume
cohort. For example, Iowa would have
17 HHAs eligible to be exempt from
being required to have their
beneficiaries’ complete HHCAHPS
surveys because they provide HHA
services to less than 60 beneficiaries.
Therefore, those 17 HHAs would be
competing in Iowa’s smaller-volume
cohort for CY 2019 (PY4) under the
Model.
Table 63 shows the distribution of
percentage change in payment
adjustment percentage resulting from
the proposals in this rule. Using 2016
data and the maximum payment
adjustment for performance year 4 of 7
percent (as applied in CY 2021), based
on the six proposed OASIS quality
measures and two claims-based
measures in QIES, the five HHCAHPS
measures, and the three New Measures,
we see that, across all nine states, 31
HHAs would no longer be eligible for a
payment adjustment for PY4 because
they would not have data on at least five
measures that meet the requirements of
§ 484.305. The distribution of scores by
percentile shows the distribution of the
change in percent payment adjustment.
For example, the distribution for HHAs
in Florida in the smaller-volume cohort
ranges from ¥2.5 percent at the 10th
percentile to +2.9 percent at the 90th
percentile. This means that, for 7 of the
77 HHAs in the smaller-volume cohort
in Florida, the proposed changes would
decrease their payment adjustment
percentage by ¥2.5 percent or more
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
while, for another 7 HHAs these
proposed changes would increase their
payment adjustment percentage by 2.9
percent or more. For half of the HHAs
in Florida’s smaller volume cohort, the
impact of these proposed changes on
their payment adjustment percentage
would be between ¥1.1 percent and
+1.3 percent. These impact analyses
suggest that, for most participating
HHAs, the impacts of the proposed
changes would be modest.
Table 64 provides the payment
adjustment distribution based on agency
size, proportion of dually-eligible
beneficiaries, average case mix (using
the average case-mix for non-LUPA
episodes), the proportion of the HHA’s
beneficiaries that reside in rural areas
and HHA organizational status. HHAs
with a higher proportion of duallyeligible beneficiaries and HHAs whose
beneficiaries have higher acuity tend to
have a more negative impact associated
with the proposals in this rule based on
the 50th percentile of the impact of the
changes on payment adjustment
percentage.
Table 65 shows the current and
proposed weights for individual
performance measures by measure
category and possible applicable
measure category scenarios to
demonstrate the weight of the
individual measures when an HHA has
scores on All Measures or if an HHA is
missing all measures in a measure
category. For example, for an HHA that
has quality measure scores on All
Measures in all the measure categories
(OASIS-based, claims-based and
HHCAHPS) under the current weighting
method, the individual measures are
weighted equally. The Proposed
Weights columns show the proposed
weights for the individual performance
measures based on the changes to the
weighting methodology proposed in this
rule. For example, for HHAs with scores
on All Measures, the OASIS-based
measures account for 35 percent of the
TPS, with equal weighting given to the
Improvement in Oral Medications,
PO 00000
Frm 00164
Fmt 4701
Sfmt 4702
Improvement in Dyspnea, Improvement
in Pain, and Discharge to Community
measures. The proposed Composite
Self-Care and Composite Mobility
measures would be weighted 1.5 times
more than the other OASIS-based
measures so that the maximum score for
the two composite measures is the same
as for the three functional OASIS-based
measures that they would replace
(Improvement in Ambulation, Bathing
and Bed Transferring). Under the
proposed weights, the two claims-based
measures, which would collectively
account for 35 percent of an HHA’s TPS,
would not be weighted equally. We are
proposing that the weight of the acute
care hospitalization measure would be
three times higher than that of the ED
Use measure. Thus, its weight would be
26.25 percent while the weight of the
ED Use measure would be 8.75 percent
for an HHA that reported on all
measures. The HHCAHPS measures
would account for 30 percent of an
HHA’s TPS and each measure would be
weighted equally.
Table 65 also shows the number of
HHAs that would have enough
measures to receive a payment
adjustment under each possible scoring
scenario under both the current and
proposed weighting methodologies.
Most of the HHAs that would no longer
receive a payment adjustment with the
proposed changes in this rule are those
with no claims or HHCAHPS measures.
With only OASIS measures, these HHAs
are more impacted by the proposal to
remove the two immunization measures
and the proposal to replace three OASIS
functional measures with the two
composite measures. The number of
HHAs without claims or HHCAHPS
measures that do not have enough
measures to receive a payment
adjustment would drop from 99 to 73 (a
decrease of 26 HHAs), and the majority
of the HHAs that would no longer have
a payment adjustment would be smaller
HHAs (16 of the 26 HHAs).
BILLING CODE 4120–01–P
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
VerDate Sep<11>2014
Jkt 244001
PO 00000
Frm 00165
Fmt 4701
Percentile
Sfmt 4725
E:\FR\FM\12JYP2.SGM
Payment Adj.
Distribution
7% Payment Adj. For PY4
of the Model
8%PaymentAdj. ForPY5
of the Model
Maximum
Payment
Adjustment
Percentage
10%
20%
30%
40%
Median
60%
70%
80%
90%
7%
-3.3%
-2.4%
-1.7%
-0.9%
-0.2%
0.5%
1.2%
2.2%
3.7%
8%
-3.8%
-2.8%
-1.9%
-1.0%
-0.3%
0.5%
1.4%
2.5%
4.2%
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
17:39 Jul 11, 2018
TABLE 62: ADJUSTMENT DISTRIBUTION BY PERCENTILE LEVEL OF QUALITY TOTAL PERFORMANCE
SCORE AT DIFFERENT MODEL PAYMENT ADJUSTMENT RATES (PERCENTAGE)
32503
EP12JY18.010
amozie on DSK3GDR082PROD with PROPOSALS2
32504
VerDate Sep<11>2014
Jkt 244001
PO 00000
Number of Eligible HHAs
State
Cohort
Current
Simulated
Change
Frm 00166
Fmt 4701
Sfmt 4725
E:\FR\FM\12JYP2.SGM
12JYP2
All
1610
1579
31
HHAs with no separate small HHA cohort
AZ
All
113
112
1
51
50
1
MD
All
NC
All
163
163
0
TN
All
122
122
0
WA
All
57
57
0
Large-volume HHA Cohort in states with small cohort
FL
Large
706
703
3
lA
Large
99
97
2
MA
Large
123
119
4
NE
Large
45
45
0
Small-volume HHA Cohort in states with small cohort
FL
Small
77
68
9
lA
Small
25
17
8
MA
Small
15
12
3
NE
Small
14
14
0
Distribution of Percentage Change in Payment Adjustment
Percentage Resulting From Proposed Changes
lOth
25th
50th
75th
90th
Percentile Percentile Percentile
Percentile
Percentile
-2.1%
-1.0%
-0.1%
0.9%
1.9%
-2.7%
-1.7%
-1.6%
-1.2%
-1.3%
-1.4%
-0.6%
-0.8%
-0.7%
-0.8%
-0.1%
-0.3%
0.0%
0.2%
0.0%
0.7%
0.9%
0.7%
0.8%
0.8%
1.8%
1.6%
1.9%
1.7%
2.0%
-2.3%
-1.9%
-2.0%
-2.8%
-1.2%
-1.2%
-1.1%
-0.9%
-0.2%
-0.2%
-0.4%
-0.3%
1.0%
0.8%
0.5%
0.6%
2.0%
1.5%
1.4%
1.8%
-2.5%
0.1%
-1.4%
-3.0%
-1.1%
1.3%
-0.5%
-1.0%
0.1%
2.9%
0.3%
0.0%
1.3%
4.4%
1.5%
1.2%
2.9%
6.4%
2.2%
2.2%
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
17:39 Jul 11, 2018
EP12JY18.011
TABLE 63: HHA COHORT PAYMENT ADJUSTMENT DISTRIBUTIONS BY STATE/COHORT
[Based on a 7-percent payment adjustment]
amozie on DSK3GDR082PROD with PROPOSALS2
VerDate Sep<11>2014
Number of Eligible HHAs
Jkt 244001
Cohort
PO 00000
Frm 00167
Fmt 4701
Sfmt 4725
E:\FR\FM\12JYP2.SGM
12JYP2
Facility size
(# of patients)
SmallHHA
LargeHHA
Percentage of Medicaid patients
No Medicaid
>0 and< 30% Medicaid
30%+ Medicaid
Patient acuity
Low Acuity
Medium Acuity
High Acuity
Percentage of rural beneficiaries
None
>0 and< 90%
>=90%
Facility type and control
Non-profit
For profit
Government
Distribution of Percentage Change in Payment Adjustment
Percentage Resulting From Proposed Chan !!es
lOth
25th
50th
75th
90th
Percentile
Percentile
Percentile
Percentile
Percentile
Current
Simulated
Change
136
1474
117
1462
19
12
-3.2%
-2.0%
-1.6%
-1.0%
-0.2%
-0.1%
1.1%
0.9%
3.1%
1.9%
749
661
200
743
653
183
6
8
17
-2.2%
-1.7%
-2.6%
-1.1%
-0.9%
-1.4%
-0.1%
0.0%
-0.4%
0.9%
0.9%
0.6%
2.0%
1.9%
1.8%
403
805
402
384
798
397
19
7
5
-2.2%
-1.8%
-2.3%
-1.0%
-0.9%
-1.3%
-0.1%
0.0%
-0.3%
1.0%
0.9%
0.9%
2.0%
1.9%
2.0%
1482
11
117
1458
10
111
24
1
6
-2.1%
-4.1%
-1.7%
-1.1%
-1.1%
-0.9%
-0.1%
-0.4%
0.2%
0.9%
0.3%
1.5%
1.9%
1.7%
2.7%
310
1191
109
308
1169
102
2
22
7
-1.4%
-2.2%
-1.9%
-0.8%
-1.1%
-0.9%
0.2%
-0.2%
0.0%
1.0%
0.8%
1.2%
1.9%
1.9%
2.7%
Freestanding
1448
1419
29
-2.1%
-1.1%
-0.2%
0.9%
1.9%
Facility -based
162
160
2
-1.2%
-0.5%
0.2%
1.1%
2.0%
Rural beneficiaries identified based on the CBSA code reported on the clmm.
2
Acuity is based on the average case-mx weight for non-LUPA episodes. Low acuity is defined as the bottom 25% (among HHVBP model participants); midacuity is the middle 50% and high acuity is the highest 25%.
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
17:39 Jul 11, 2018
TABLE 64: PAYMENT ADJUSTMENT DISTRIBUTIONS BY CHARACTERISTICS FOR THE HHVBP MODEL
[Based on a 7-percent payment adjustment 1• 2 ]
32505
EP12JY18.012
amozie on DSK3GDR082PROD with PROPOSALS2
32506
Current \Veiohts
Jkt 244001
PO 00000
Frm 00168
Fmt 4701
/"arf2014
EP12JY18.013
TABLE 65: CURRENT AND PROPOSED WEIGHTS FOR INDIVIDUAL PERFORMANCE MEASURES FOR THE
HHVBP MODEL 1234
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
3. HH QRP
Failure to submit data required under
section 1895(b)(3)(B)(v) of the Act with
respect to a calendar year will result in
the reduction of the annual home health
market basket percentage increase
otherwise applicable to a HHA for that
calendar year by 2 percentage points.
For the CY 2018 annual payment update
determination, 1,311 of the 11,776
active Medicare-certified HHAs, or
approximately 11.1 percent, did not
receive the full annual percentage
increase. Information is not available to
determine the precise number of HHAs
that would not meet the requirements to
receive the full annual percentage
increase for the CY 2019 payment
determination.
As discussed in section V.E. of this
proposed rule, we are proposing to
remove seven measures from the HH
QRP: Depression Assessment
Conducted, Diabetic Foot Care and
Patient/Caregiver Education
Implemented during All Episodes of
Care, Multifactor Fall Risk Assessment
Conducted For All Patients Who Can
Ambulate (NQF #0537), Pneumococcal
Polysaccharide Vaccine Ever Received,
Improvement in the Status of Surgical
Wounds, Emergency Department Use
without Hospital Readmission during
the First 30 Days of HH (NQF #2505),
32507
Act, which are shown in column 2. In
column 3, 2017 claims were again used
to determine the total weeks of care,
which is the sum of weeks of care across
all beneficiaries found in each category.
Weeks of care for payment categories 1
and 3 are defined as the week of the last
infusion drug or pump claim minus the
week of the first infusion drug or pump
claim plus one. For Category 2, we used
the median number of weeks of care, 47,
as many patients use immune globulin
for the whole year. Column four
assumes the initial week of care requires
two nurse visits, and all subsequent
weeks only require one visit, in order to
estimate the total visits of care per
category. In general, nursing visits for
payment category 2, subcutaneous
immune globulin (SCIG) administration,
occur once per month; therefore, we
assume the estimated number of visits
for these patients is 12. The fifth column
multiplies the volume of nurse visits
across beneficiaries by the payment rate
(using the 2018 Physician Fee Schedule
amounts) in order to estimate the
increased cost per each of the three
infusion drug categories.112 In the CY
2019 HH PPS final rule, we will update
this impact analysis using more
complete 2017 claims data (as of June
30, 2018 or later) and the CY 2019
Physician Fee Schedule amounts.
Rehospitalization during the First 30
Days of HH (NQF #2380). All seven of
these measures are proposed for
removal starting with the CY 2021 HH
QRP. As noted previously, section VII.
of this proposed rule provides a detailed
description of the net decrease in
burden associated with these proposed
changes in conjunction with the
changes in burden that result from the
proposed implementation of the PDGM
for CY 2020. We estimate that the
burden associated with OASIS item
collection as a result of this proposed
rule results in a net $60 million in
annualized cost savings to HHAs,
discounted at 7 percent relative to year
2016, over a perpetual time horizon
beginning in CY 2020.
4. Home Infusion Therapy Payment
The following analysis applies to the
Temporary Transitional Payment for
Home Infusion Therapy as set forth in
section 1834(u)(7) of the Act, as added
by section 50401 of the BBA of 2018
(Pub. L 115–123), and accordingly,
describes the impact for CY 2019 only.
Table 66 represents the estimated
increased costs of existing DME users
currently using home infusion therapy
services. We used CY 2017 data to
identify beneficiaries with DME claims
containing 1 of the 37 HCPCS codes
identified in section 1834(u)(7)(C) of the
TABLE 66—ESTIMATED INCREASED COSTS OF EXISTING DME HOME INFUSION PATIENTS NOW RECEIVING COVERED
HOME INFUSION THERAPY SERVICES, CY 2019
Number of
beneficiaries
Payment category
Total weeks
of care
Estimated total
visits of care
2018
Payment rate
Estimated
cost
1 .........................................................................................
2 .........................................................................................
3 .........................................................................................
5,885
6,315
5,774
130,896
236,470
87,260
136,781
75,780
93,034
$141.12
224.28
239.76
$19,302,535
16,995,938
22,305,832
Total ............................................................................
17,974
........................
........................
........................
58,604,305
Table 67 displays the estimated
regional impacts using the beneficiary
enrollment address reported in the
Medicare Master Beneficiary Summary
File. Table 68 displays impacts based on
rural or urban designations. All
beneficiaries identified had at least one
applicable home infusion claim (claims
with 1 of the 37 drug codes listed in
section 1834(u)(7)(C) of the Act) in CY
2017. Unknown beneficiaries were those
without valid state and county
information in the Master Beneficiary
Summary File. Additionally, the tables
provide the estimated impacts by drug
category.
TABLE 67—ESTIMATED IMPACTS OF THE TEMPORARY TRANSITIONAL PAYMENT FOR HOME INFUSION THERAPY SERVICES
BY REGION, CY 2019
Number of home
infusion patients
amozie on DSK3GDR082PROD with PROPOSALS2
Census Region
New England .........................................
Mid Atlantic ............................................
East North Central .................................
West North Central ................................
South Atlantic .........................................
East South Central ................................
719
3,503
2,493
1,296
4,396
1,201
112 Based on the 2018 Medicare PFS these rates
are $141.12 ($74.16 + 3 * $22.32) for Category 1,
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
Category 1
$1,030,740.48
2,699,343.36
3,204,976.32
1,192,605.12
4,367,805.12
1,330,761.60
Category 2
$866,617.92
1,582,519.68
1,733,235.84
1,351,062.72
4,849,830.72
1,544,840.64
Category 3
$$263,496.24
8,670,920.40
3,346,330.32
1,644,034.32
4,516,359.12
668,690.64
$224.28 ($176.76 + 3 * $15.84) for Category 2, and
$239.76 ($144.72 + 3 * $31.68) for Category 3.
PO 00000
Frm 00169
Fmt 4701
Sfmt 4702
E:\FR\FM\12JYP2.SGM
12JYP2
Total
$2,160,854.64
12,952,783.44
8,284,542.48
4,187,702.16
13,733,994.96
3,544,292.88
32508
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
TABLE 67—ESTIMATED IMPACTS OF THE TEMPORARY TRANSITIONAL PAYMENT FOR HOME INFUSION THERAPY SERVICES
BY REGION, CY 2019—Continued
Number of home
infusion patients
Census Region
Category 1
Category 2
Category 3
Total
West South Central ...............................
Mountain ................................................
Pacific ....................................................
Other ......................................................
1,729
847
1,727
63
2,546,228.16
978,949.44
1,928,969.28
22,155.84
1,824,742.08
1,404,889.92
1,800,519.84
37,679.04
942,256.80
281,957.76
1,882,595.52
89,190.72
5,313,227.04
2,665,797.12
5,612,084.64
149,025.60
Total ................................................
17,974
19,302,534.72
16,995,938.40
22,305,831.84
58,604,304.96
TABLE 68—ESTIMATED URBAN/RURAL IMPACTS OF THE TEMPORARY TRANSITIONAL PAYMENT FOR HOME INFUSION
THERAPY SERVICES, CY 2019
Number of home
infusion patients
CBSA Urban/rural
Category 2
Category 3
Total
Urban .....................................................
Rural ......................................................
Unknown ................................................
14,692
3,239
43
$15,906,058.56
3,384,057.60
12,418.56
$14,495,664.96
2,462,594.40
37,679.04
$17,419,762.80
4,863,052.08
23,016.96
$47,821,486.32
10,709,704.08
73,114.56
Total ................................................
17,974
19,302,534.72
16,995,938.40
22,305,831.84
58,604,304.96
E. Alternatives Considered
1. HH PPS
a. HH PPS for CY 2019
amozie on DSK3GDR082PROD with PROPOSALS2
Category 1
Section 1895(b)(3)(B) of the Act
requires that the standard prospective
payment amounts for CY 2019 be
increased by a factor equal to the
applicable HH market basket update for
those HHAs that submit quality data as
required by the Secretary. For CY 2019,
Section 1895(b)(3)(B)(vi) of the Act
requires that the market basket update
under the HHA prospective payment
system be annually adjusted by changes
in economy-wide productivity. The
proposed 0.7 percentage point
multifactor productivity adjustment to
the proposed CY 2019 home health
market basket update of 2.8 percent, is
discussed in the preamble of this rule
and is not discretionary as it is a
requirement in section
1895(b)(3)(B)(vi)(I) of the Act.
We considered not rebasing the home
health market basket. However, we
believe that it is desirable to rebase the
home health market basket periodically
so that the cost category weights reflect
changes in the mix of goods and
services that HHAs purchase in
furnishing home health care. In
addition, we considered not
implementing the proposed revision to
the labor-related share of 76.1 percent in
a budget neutral manner. However, we
believe it is more prudent to implement
the revision to the labor-related share in
a manner that does not increase or
decrease budgetary expenditures.
With regards to payments made under
the HH PPS for high-cost outlier
episodes of care (that is, episodes of care
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
with unusual variations in the type or
amount of medically necessary care), we
did not consider maintaining the
current FDL ratio of 0.55. As discussed
in section III.E.3. of this proposed rule,
we propose to revise the FDL ratio to
0.51. Simulations using CY 2017 claims
data and the proposed CY 2019 HH PPS
payment rates resulted in an estimated
2.32 percent of total HH PPS payments
being paid as outlier payments using the
existing methodology for calculating the
cost of an episode of care. The FDL ratio
and the loss-sharing ratio must be
selected so that the estimated outlier
payments do not exceed the 2.5 percent
of total HH PPS payments (as required
by section 1895(b)(5)(A) of the Act). We
did not consider proposing a change to
the loss sharing ratio (0.80) in order for
the HH PPS to remain consistent with
payment for high-cost outliers in other
Medicare payment systems (for
example, IRF PPS, IPPS, etc.)
b. HH PPS for CY 2020 (PDGM)
For CY 2020, we did not consider
alternatives to changing the unit of
payment from 60 days to 30 days,
eliminating the use of therapy
thresholds for the case-mix adjustment,
and requiring the revised payments to
be budget neutral. Section 51001 of the
BBA of 2018 requires the change in the
unit of payment from 60 days to 30 days
to be made in a budget neutral manner
and mandates the elimination of the use
of therapy thresholds for case-mix
adjustment purposes. The BBA of 2018
also requires these measures to be
implemented on January 1, 2020 and
that we make assumptions about
behavior changes that could occur as a
PO 00000
Frm 00170
Fmt 4701
Sfmt 4702
result of the implementation of the 30day unit of payment and as a result of
the case-mix adjustment factors that are
implemented in CY 2020 in calculating
a 30-day payment amount for CY 2020
in a budget neutral manner.
Alternatives to making 19 current
OASIS items (48 data elements) optional
at the FU time point as outlined in
section VII. of this proposed rule, would
be to either not implement the case-mix
adjustment methodology changes
proposed under the PDGM or to
continue collecting the 19 current
OASIS items at the FU time point, even
though they would not be used to casemix adjust payments under the PDGM.
Similarly, an alternative to adding
collection of two current OASIS items
(10 data elements) at the FU time point
as discussed in section VII. of this
proposed rule would be to either not
adopt the PDGM or not to include the
two current OASIS items (M1800 and
M1033) as part of the case-mix
adjustment methodology under the
proposed PDGM. As noted previously,
we did not consider not implementing
the case-mix methodology changes
under the proposed PDGM as a new
case-mix adjustment methodology is
required to be implemented in
accordance with section 51001 of the
BBA of 2018, which mandates the
elimination of the use of therapy
thresholds for case-mix adjustment
purposes by January 1, 2020. We believe
that continuing to require HHAs to
report responses for the 19 current
OASIS items at the FU time point that
are no longer needed for case-mix
adjustment purposes under the PDGM
results in unnecessary burden for HHAs.
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
While requiring HHAs to report
responses for two current OASIS items
at the FU time point results in a small
increase in burden if CMS were to not
make 19 current OASIS items optional
at the FU time point, those two OASIS
items (M1800 and M1033) are correlated
with increases in resource use and are
used to determine the patient’s
functional impairment level under the
HHGM, thus they are important for casemix adjustment purposes in order to
ensure accurate payments to HHAs
under the proposed PDGM.
We considered whether to continue
using the wage-weighted minutes of
care (WWMC) approach to estimate
resource use under the PDGM, as
described in section III.F.2. of this
proposed rule. Although the
relationship in relative costs between
the WWMC approach and the proposed
cost-per-minute plus non-routine
supplies (CPM + NRS) approach is very
similar (correlation coefficient equal to
0.8512), the WWMC approach does not
as evenly weight skilled nursing costs
relative to therapy costs as evidenced in
the cost report data and would require
us to maintain a separate case-mix
adjustment mechanism for NRS. If we
were to maintain the current WWMC
approach, skilled nursing and therapy
costs would not be as evenly weighted
and a certain level of complexity in
calculating payments under the HH PPS
would persist as we would need to
continue with the current method of
case-mix adjusting NRS payments
separate from service costs (that is,
skilled nursing, physical therapy,
occupational therapy, speech-language
pathology, home health aide, and
medical social services) under the HH
PPS.
In this proposed rule and to begin in
CY 2020, we considered proposing a
phase-out of the split percentage
payment approach by reducing the
percentage of the upfront payment over
a period of time and requiring a notice
of admission (NOA) to be submitted
upon full elimination of the splitpercentage payment. However, we
wanted to take the opportunity in this
year’s rule to more clearly signal our
intent to potentially eliminate the split
percentage payment approach over time
as a reduced timeframe for the unit of
payment (30 days rather than 60 days)
is now required in statute. Given that
existing HHAs (certified with effective
dates prior to January 1, 2019) would
need to adapt to changes in cash flow
with the elimination of the split
percentage payment approach, we hope
to receive additional feedback on the
timeframes for a phase-out of the split
percentage payment approach and
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
whether there is a need for an NOA
upon completion of a phase-out of the
split percentage payment approach that
we can take into consideration for
potential future rulemaking.
2. HHVBP Model
An alternative to our proposal to
remove the two vaccination measures
beginning with PY 4 would be to
continue to include them in the
applicable measure set.
An alternative to our proposal to
replace three OASIS-based measures
with two proposed composite measures
would be to make no changes to the
OASIS-based measures category.
Another alternative to this proposal
would be to finalize one but not both
composite measures. All three of the
ADL measures that would be replaced
(Improvement in Bathing, Improvement
in Bed Transferring, Improvement in
Ambulation-Locomotion) relate to the
normalized change in self-care measure,
so, if only the self-care measure were
adopted it would replace the three
individual ADL items and count for 30
points. If only the mobility composite
measure were adopted, however, it
would count for 15 points and the three
individual measures (which would not
be dropped) would count for 5 points
each. That would keep the relative
points for the ADL measures at 30 no
matter which option were adopted.
An alternative to rescoring the
maximum improvement points from 10
points to 9 points would be to keep the
current scoring methodology.
An alternative to reweighting the
OASIS-based, claims-based and
HHCAHPS measure categories would be
to keep the current equally weighted
methodology.
3. HH QRP
An alternative to removing seven
measures from the HH QRP (Depression
Assessment Conducted, Diabetic Foot
Care and Patient/Caregiver Education
Implemented during All Episodes of
Care, Multifactor Fall Risk Assessment
Conducted For All Patients Who Can
Ambulate (NQF #0537), Pneumococcal
Polysaccharide Vaccine Ever Received,
Improvement in the Status of Surgical
Wounds, Emergency Department Use
without Hospital Readmission during
the First 30 Days of HH (NQF #2505),
Rehospitalization during the First 30
Days of HH (NQF #2380)), as discussed
in section V.E. of this proposed rule
would be to retain these measures in the
HH QRP.
PO 00000
Frm 00171
Fmt 4701
Sfmt 4702
32509
4. Home Infusion Therapy
a. Health and Safety Standards
We considered establishing additional
requirements related to patient
assessment, infection control and
quality improvement. However,
according to the home infusion therapy
supplier industry, and our research, we
believe there are already AO standards
that include requirements related to
patient assessment, quality
improvement, and infection control.
While the exact content of the AO
standards vary, we believe that the
standards are adequate to ensure basic
patient health and safety.
b. Payment
We did not consider alternatives to
implementing the home infusion
therapy benefit for CY 2019 and 2020
because section 1834(u)(7) of the Act
requires the Secretary to provide a
temporary transitional payment to
eligible home infusion therapy suppliers
for items and services associated with
the furnishing of transitional home
infusion drugs.
c. Accreditation of Qualified Home
Infusion Therapy Suppliers
AOs that accredit home infusion
therapy suppliers must become
accredited by an AO designated by the
Secretary. In these options, we have
attempted to minimize the burden of
accreditation on home infusion therapy
suppliers, which include approving
home infusion therapy AOs that
consider the unique needs of small
home infusion therapy suppliers. Also,
it is likely that the surveys of home
infusion therapy suppliers would be
performed as a desk review instead of
an onsite survey. Doing a desk audit
survey would prevent the travel time
and cost that is required when the AO
has to send a survey team to the home
infusion therapy supplier’s location to
perform an onsite survey.
F. Accounting Statement and Tables
As required by OMB Circular A–4
(available at http://
www.whitehouse.gov/omb/circulars_
a004_a-4), in Table 69, we have
prepared an accounting statement
showing the classification of the
transfers and costs associated with the
CY 2019 HH PPS provisions of this rule.
For CY 2020, due to the section 51001(a)
of the BBA of 2018 requirement that the
transition to the 30-day unit of payment
be budget neutral, Table 70 displays a
transfer of zero. Table 71 provides our
best estimates of the changes to OASIS
item collection as a result of the
proposed implementation of the PDGM
E:\FR\FM\12JYP2.SGM
12JYP2
32510
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
and proposed changes to the HH QRP.
Table 72 provides our best estimate of
the increase in Medicare payments to
home infusion therapy suppliers related
to the temporary transitional payment
for home infusion therapy in CY 2019.
Table 73 provides our best estimate of
cost of AO compliance with our
proposed home infusion the Infusion
Therapy requirements.
TABLE 69—ACCOUNTING STATEMENT:
HH PPS CLASSIFICATION OF ESTIMATED TRANSFERS, FROM CY 2018
TO 2019
Category
Transfers
TABLE 73—ACCOUNTING STATEMENT:
CLASSIFICATION
OF
ESTIMATED
COSTS FOR HOME INFUSION THERAPY
ACCREDITATION ORGANIZATIONS, FROM CY 2019 TO CY 2020
2. OASIS Changes Related to the HH
QRP and HH PPS (PDGM) for CY 2020
In conclusion, we estimate that the
changes to OASIS item collection as a
Costs
result of the proposed changes to the
HH QRP and the proposed changes to
the HH PPS (PDGM), both effective on
and after January 1, 2020, would result
in a net $60 million in annualized cost
savings, discounted at 7 percent relative
to year 2016, over a perpetual time
$23,258. horizon beginning in CY 2020.
Category
Annualized Monetized Net
Burden to Each Home Infusion Therapy AO for
Compliance with the Proposed Regulations at
§§ 488.1010 through
488.1050 ...........................
G. Regulatory Reform Analysis Under
E.O. 13771
Executive Order 13771, entitled
‘‘Reducing Regulation and Controlling
Regulatory Costs,’’ was issued on
Federal Government to HHAs. January 30, 2017 and requires that the
costs associated with significant new
regulations ‘‘shall, to the extent
TABLE 70—ACCOUNTING STATEMENT: permitted by law, be offset by the
HH PPS CLASSIFICATION OF ESTI- elimination of existing costs associated
MATED TRANSFERS DUE TO THE with at least two prior regulations.’’
PDGM PROPOSALS, FROM CY 2019 Details on the estimated costs of this
proposed rule, including limitations on
TO 2020 PDGM
the ability thus far to quantify some
categories of impacts, can be found in
Category
Transfers
the rule’s economic analysis. The
Annualized Monetized
$0 million.
determination of this proposed rule’s
Transfers.
status as a regulatory or deregulatory
From Whom to Whom? .... HHAs to Federal
action for the purposes of Executive
Government.
Order 13771 will be informed by
comments received in response to this
TABLE 71—ACCOUNTING STATEMENT: proposed rulemaking.
Annualized Monetized
Transfers.
From Whom to Whom? ....
$400 million.
CLASSIFICATION
OF
ESTIMATED H. Conclusion
COSTS OF OASIS ITEM COLLEC- 1. HH PPS
TION, FROM CY 2019 TO CY 2020
a. HH PPS for CY 2019
amozie on DSK3GDR082PROD with PROPOSALS2
Category
Costs
In conclusion, we estimate that the
net impact of the HH PPS policies in
Annualized Monetized Net ¥$60 million
this rule is an increase of 2.1 percent, or
Burden for HHAs’ Sub$400 million, in Medicare payments to
mission of the OASIS.
HHAs for CY 2019. The $400 million
increase reflects the effects of the CY
TABLE 72—ACCOUNTING STATEMENT: 2019 home health payment update of
TEMPORARY TRANSITIONAL PAY- 2.1 percent ($400 million increase), a
MENT FOR HOME INFUSTION THER- 0.1 percent increase in payments due to
APY CLASSIFICATION OF ESTIMATED decreasing the FDL ratio in order to
TRANSFERS, FROM CY 2018 TO target to pay no more than 2.5 percent
of total payments as outlier payments
2019
($20 million increase), and a ¥0.1
percent decrease in CY 2019 payments
Category
Transfers
due to the new rural add-on policy
mandated by the BBA of 2018 ($20
Annualized Monetized
$60 million.
million decrease).
Transfers.
From Whom to Whom? ....
VerDate Sep<11>2014
Federal Government to Home
Infusion Therapy Suppliers.
17:39 Jul 11, 2018
Jkt 244001
b. HH PPS for CY 2020 (PDGM)
In conclusion, we estimate that
Medicare payments to HHAs for CY
2020 will remain the same compared to
CY 2019 as a result of the
implementation of the PDGM. Section
51001(a) of the BBA of 2018 requires the
PO 00000
Frm 00172
Fmt 4701
Sfmt 4702
Secretary to implement the 30-day unit
of payment in a budget-neutral manner.
3. HHVBP Model
In conclusion, we estimate there
would be no net impact (to include
either a net increase or reduction in
payments) in this proposed rule in
Medicare payments to HHAs competing
in the HHVBP Model for CY 2019.
However, the overall economic impact
of the HHVBP Model is an estimated
$378 million in total savings from a
reduction in unnecessary
hospitalizations and SNF usage as a
result of greater quality improvements
in the home health industry over the life
of the HHVBP Model. We do not believe
the changes proposed in this rule would
affect the prior estimates.
4. Home Infusion Therapy
a. Health and Safety Standards
In summary, the proposed health and
safety standards would not have any
economic impact on home infusion
therapy suppliers or accreditation
organizations.
b. Payment
In conclusion, we estimate that the
net impact of the temporary transitional
payment to eligible home infusion
suppliers for items and services
associated with the furnishing of
transitional home infusion drugs would
result in approximately $60 million in
additional Medicare payments to home
infusion suppliers in CY 2019.
c. Accreditation of Qualified Home
Infusion Therapy Suppliers
In summary, AOs that accredit HIT
suppliers must become accredited by an
AO designated by the Secretary. In these
options, we have attempted to minimize
the burden of accreditation on HIT
suppliers, which include approving
AOs that consider the unique needs of
small HIT suppliers. Also, it is likely
that the surveys of HIT suppliers will be
performed as a desk review instead of
an onsite survey. Doing a desk audit
survey would prevent the travel time
and cost that is required when the AO
has to send a survey team to the HIT
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
supplier’s location to perform an onsite
survey.
This analysis, together with the
remainder of this preamble, provides an
initial Regulatory Flexibility Analysis.
In accordance with the provisions of
Executive Order 12866, this proposed
rule was reviewed by the Office of
Management and Budget.
List of Subjects
42 CFR Part 409
Health facilities, Medicare.
42 CFR Part 424
Emergency medical services, Health
facilities, Health professions, Medicare,
and Reporting and recordkeeping
requirements.
42 CFR Part 484
Health facilities, Health professions,
Medicare, and Reporting and
recordkeeping requirements.
Allowable administrative costs.
*
*
*
*
*
(e) Remote patient monitoring.
Remote patient monitoring is defined as
the collection of physiologic data (for
example, ECG, blood pressure, or
glucose monitoring) digitally stored and
transmitted by the patient or caregiver
or both to the home health agency. If
remote patient monitoring is used by the
home health agency to augment the care
planning process, the costs of the
equipment and service related to this
system are allowable administrative
costs.
PART 424—CONDITIONS FOR
MEDICARE PAYMENT
4. The authority citation for part 424
continues to read as follows:
■
Authority: Secs. 1102 and 1871 of the
Social Security Act (42 U.S.C. 1302 and
1395hh).
5. Section 424.22 is amended by
revising paragraphs (b)(2) and (c) to read
as follows:
■
42 CFR Part 486
Grant programs-health, Health
facilities, Medicare, Reporting and
recordkeeping requirements, X-rays.
§ 424.22 Requirements for home health
services.
42 CFR Part 488
*
Administrative practice and
procedure, Health facilities, Medicare,
Reporting and recordkeeping
requirements.
For the reasons set forth in the
preamble, the Centers for Medicare &
Medicaid Services proposes to amend
42 CFR chapter IV as set forth below:
PART 409—HOSPITAL INSURANCE
BENEFITS
1. The authority citation for part 409
continues to read as follows:
■
Authority: Secs. 1102 and 1871 of the
Social Security Act (42 U.S.C. 1302 and
1395hh).
§ 409.43
[Amended]
2. Section 409.43 is amended—
a. By removing paragraph (c)(2);
b. By resignating paragraphs (c)(3) and
(4) as paragraphs (c)(2) and (3);
■ c. In newly redesignated paragraph
(c)(2)(ii) by removing the phrase ‘‘for
services is submitted for the final
percentage prospective payment’’ and
adding in its place the phrase ‘‘(for
episodes beginning on or before
December 31, 2019) or 30-day period
(for periods beginning on or after
January 1, 2020) is submitted’’; and
■ d. In paragraph (e)(1)(iii) by removing
the phrase ‘‘during the 60-day episode’’
and adding in its place the phrase
‘‘within 60 days’’.
■ 3. Section 409.46 is amended by
adding paragraph (e) to read as follows:
■
■
■
amozie on DSK3GDR082PROD with PROPOSALS2
§ 409.46
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
*
*
*
*
(b) * * *
(2) Content and basis of
recertification. As a condition for
payment of home health services under
Medicare Part A or Medicare Part B, if
there is a continuing need for home
health services, a physician must
recertify the patient’s continued
eligibility for the home health benefit as
outlined in sections 1814(a)(2)(C) and
1835(a)(2)(A) of the Act, as set forth in
paragraph (a)(1) of this section, and as
specified in paragraphs (b)(2)(i) and (ii)
of this section.
(i) Need for occupational therapy may
be the basis for continuing services that
were initiated because the individual
needed skilled nursing care or physical
therapy or speech therapy.
(ii) If a patient’s underlying condition
or complication requires a registered
nurse to ensure that essential nonskilled care is achieving its purpose,
and necessitates a registered nurse be
involved in the development,
management, and evaluation of a
patient’s care plan, the physician must
include a brief narrative describing the
clinical justification of this need. If the
narrative—
(A) Is part of the recertification form,
then the narrative must be located
immediately prior to the physician’s
signature.
(B) Exists as an addendum to the
recertification form, in addition to the
physician’s signature on the
recertification form, the physician must
PO 00000
Frm 00173
Fmt 4701
Sfmt 4702
32511
sign immediately following the
narrative in the addendum.
(c) Determining patient eligibility for
Medicare home health services. (1)
Documentation in the certifying
physician’s medical records or the
acute/post-acute care facility’s medical
records (if the patient was directly
admitted to home health) or both must
be used as the basis for certification of
the patient’s eligibility for home health
as described in paragraphs (a)(1) and (b)
of this section. Documentation from the
HHA may also be used to support-the
basis for certification of home health
eligibility, but only if the following
requirements are met:
(i) The documentation from the HHA
can be corroborated by other medical
record entries in the certifying
physician’s medical record for the
patient or the acute/post-acute care
facility’s medical record for the patient
or both, thereby creating a clinically
consistent picture that the patient is
eligible for Medicare home health
services.
(ii)(A) The certifying physician signs
and dates the HHA documentation
demonstrating that the documentation
from the HHA was considered when
certifying patient eligibility for
Medicare home health services.
(B) HHA documentation can include,
but is not limited to, the patient’s plan
of care required under § 409.43 of this
chapter and the initial or
comprehensive assessment of the
patient required under § 484.55 of this
chapter.
(2) The documentation must be
provided upon request to review entities
or CMS or both. If the documentation
used as the basis for the certification of
eligibility is not sufficient to
demonstrate that the patient is or was
eligible to receive services under the
Medicare home health benefit, payment
is not rendered for home health services
provided.
*
*
*
*
*
PART 484—HOME HEALTH SERVICES
6. The authority citation for part 484
continues to read as follows:
■
Authority: Secs 1102 and 1871 of the Act
(42 U.S.C. 1302 and 1395(hh)) unless
otherwise indicated.
7. Section 484.202 is amended by
revising the definitions of ‘‘Rural area’’
and ‘‘Urban area’’ to read as follows:
■
§ 484.202
Definitions.
*
*
*
*
*
Rural area means an area defined in
§ 412.64(b)(1)(ii)(C) of this chapter.
E:\FR\FM\12JYP2.SGM
12JYP2
32512
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
Urban area means an area defined in
§ 412.64(b)(1)(ii)(A) and (B) of this
chapter.
■ 8. Section 484.205 is revised to read
as follows:
amozie on DSK3GDR082PROD with PROPOSALS2
§ 484.205
Basis of payment.
(a) Method of payment. An HHA
receives a national, standardized
prospective payment amount for home
health services previously paid on a
reasonable cost basis (except the
osteoporosis drug defined in section
1861(kk) of the Act) as of August 5,
1997. The national, standardized
prospective payment is determined in
accordance with § 484.215.
(b) Unit of payment—(1) Episodes
before December 31, 2019. For episodes
beginning on or before December 31,
2019, an HHA receives a unit of
payment equal to a national,
standardized prospective 60-day
episode payment amount.
(2) Periods on or after January 1,
2020. For periods beginning on or after
January 1, 2020, a HHA receives a unit
of payment equal to a national,
standardized prospective 30-day
payment amount.
(c) OASIS data. A HHA must submit
to CMS the OASIS data described at
§ 484.55(b) and (d) in order for CMS to
administer the payment rate
methodologies described in §§ 484.215,
484.220, 484. 230, 484.235, and 484.240.
(d) Payment adjustments. The
national, standardized prospective
payment amount represents payment in
full for all costs associated with
furnishing home health services and is
subject to the following adjustments and
additional payments:
(1) A low-utilization payment
adjustment (LUPA) of a predetermined
per-visit rate as specified in § 484.230.
(2) A partial payment adjustment as
specified in § 484.235.
(3) An outlier payment as specified in
§ 484.240.
(e) Medical review. All payments
under this system may be subject to a
medical review adjustment reflecting
the following:
(1) Beneficiary eligibility.
(2) Medical necessity determinations.
(3) Case-mix group assignment.
(f) Durable medical equipment (DME)
and disposable devices. DME provided
as a home health service as defined in
section 1861(m) of the Act is paid the
fee schedule amount. Separate payment
is made for ‘‘furnishing NPWT using a
disposable device,’’ as that term is
defined in § 484.202, and is not
included in the national, standardized
prospective payment.
(g) Split percentage payments.
Normally, there are two payments
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
(initial and final) paid for an HH PPS
unit of payment. The initial payment is
made in response to a request for
anticipated payment (RAP) as described
in paragraph (h) of this section, and the
residual final payment is made in
response to the submission of a final
claim. Split percentage payments are
made in accordance with requirements
at § 409.43(c) of this chapter.
(1) Split percentage payments for
episodes beginning on or before
December 31, 2019—(i) Initial and
residual final payments for initial
episodes on or before December 31,
2019. (A) The initial payment for initial
episodes is paid to an HHA at 60
percent of the case-mix and wageadjusted 60-day episode rate.
(B) The residual final payment for
initial episodes is paid at 40 percent of
the case-mix and wage-adjusted 60-day
episode rate.
(ii) Initial and residual final payments
for subsequent episodes before
December 31, 2019. (A) The initial
payment for subsequent episodes is paid
to an HHA at 50 percent of the case-mix
and wage-adjusted 60-day episode rate.
(B) The residual final payment for
subsequent episodes is paid at 50
percent of the case-mix and wageadjusted 60-day episode rate.
(2) Split percentage payments for
periods beginning on or after January 1,
2020—(i) Initial and residual final
payments for initial periods beginning
on or after January 1, 2020. (A) The
initial payment for initial 30-day
periods is paid to an HHA at 60 percent
of the case-mix and wage-adjusted 30day payment rate.
(B) The residual final payment for
initial 30-day periods is paid at 40
percent of the case-mix and wageadjusted 30-day payment rate.
(ii) Initial and residual final payments
for subsequent periods beginning on or
after January 1, 2020. (A) The initial
payment for subsequent 30-day periods
is paid to an HHA at 50 percent of the
case-mix and wage-adjusted 30-day
payment rate.
(B) The residual final payment for
subsequent 30-day periods is paid at 50
percent of the case-mix and wageadjusted 30-day payment rate.
(iii) Split percentage payments on or
after January 1, 2019. Split percentage
payments are not made to HHAs that are
certified for participation in Medicare
effective on or after January 1, 2019. An
HHA that is certified for participation in
Medicare effective on or after January 1,
2019 receives a single payment for a 30day period of care after the final claim
is submitted.
(h) Requests for anticipated payment
(RAP). (1) HHAs that are certified for
PO 00000
Frm 00174
Fmt 4701
Sfmt 4702
participation in Medicare effective by
December 31, 2018 submit requests for
anticipated payment (RAPs) to request
the initial split percentage payment as
specified in paragraph (g) of this
section. HHAs that are certified for
participation in Medicare effective on or
after January 1, 2019 are still required to
submit RAPs although no split
percentage payments are made in
response to these RAP submissions. The
HHA can submit a RAP when all of the
following conditions are met:
(i) After the OASIS assessment
required at § 484.55(b)(1) and (d) is
complete, locked or export ready, or
there is an agency-wide internal policy
establishing the OASIS data is finalized
for transmission to the national
assessment system.
(ii) Once a physician’s verbal orders
for home care have been received and
documented as required at §§ 484.60(b)
and 409.43(d) of this chapter.
(iii) A plan of care has been
established and sent to the physician as
required at § 409.43(c) of this chapter.
(iv) The first service visit under that
plan has been delivered.
(2) A RAP is based on the physician
signature requirements in § 409.43(c) of
this chapter and is not a Medicare claim
for purposes of the Act (although it is a
‘‘claim’’ for purposes of Federal, civil,
criminal, and administrative law
enforcement authorities, including but
not limited to the following:
(i) Civil Monetary Penalties Law (as
defined in 42 U.S.C. 1320a–7a(i)(2)).
(ii) The Civil False Claims Act (as
defined in 31 U.S.C. 3729(c)).
(iii) The Criminal False Claims Act
(18 U.S.C. 287)).
(iv) The RAP is canceled and
recovered unless the claim is submitted
within the greater of 60 days from the
end date of the appropriate unit of
payment, as defined in paragraph (b) of
this section, or 60 days from the
issuance of the RAP.
(3) CMS has the authority to reduce,
disprove, or cancel a RAP in situations
when protecting Medicare program
integrity warrants this action.
§ 484.210
[Removed and Reserved]
9. Section 484.210 is removed and
reserved.
■ 10. Section 484.215 is amended—
■ a. By revising the section heading;
■ b. In paragraph (d) introductory text
by removing the phrase ‘‘CMS calculates
the’’ and adding in its place the phrase
‘‘For episodes beginning on or before
December 31, 2019, CMS calculates
the’’; and
■ c. By adding paragraph (f).
The revisions and addition reads as
follows:
■
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
§ 484.215 Initial establishment of the
calculation of the national, standardized
prospective payment rates.
*
*
*
*
*
(f) For periods beginning on or after
January 1, 2020, a national,
standardized prospective 30-day
payment rate applies. The national,
standardized prospective 30-day
payment rate is an amount determined
by the Secretary, as subsequently
adjusted in accordance with § 484.225.
■ 11. Section 484.220 is amended—
■ a. By revising the section heading and
introductory text; and
■ b. In paragraph (a) introductory text
by removing the phrase ‘‘national
prospective 60-day episode’’ and adding
in its place the phrase ‘‘national,
standardized prospective’’.
The revisions read as follows:
§ 484.220 Calculation of the case-mix and
wage area adjusted prospective payment
rates.
CMS adjusts the national,
standardized prospective payment rates
as referenced in § 484.215 to account for
the following:
*
*
*
*
*
■ 12. Section 484.225 is amended—
■ a. By revising the section heading and
paragraph (a);
■ b. In paragraphs (b) and (c) by
removing the phrase ‘‘national
prospective 60-day episode’’ and adding
in its place the phrase ‘‘national,
standardized prospective’’; and
■ c. By adding paragraph (d).
The revisions and addition reads as
follows:
amozie on DSK3GDR082PROD with PROPOSALS2
§ 484.225 Annual update of the unadjusted
national, standardized prospective payment
rates.
(a) CMS annually updates the
unadjusted national, standardized
prospective payment rate on a calendar
year basis (in accordance with section
1895(b)(1)(B) of the Act).
*
*
*
*
*
(d) For CY 2020, the national,
standardized prospective 30-day
payment amount is an amount
determined by the Secretary. CMS
annually updates this amount on a
calendar year basis in accordance with
paragraphs (a) through (c) of this
section.
■ 13. Section 484.230 is revised to read
as follows:
§ 484.230 Low-utilization payment
adjustments.
(a) For episodes beginning on or
before December 31, 2019, an episode
with four or fewer visits is paid the
national per-visit amount by discipline
determined in accordance with
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
§ 484.215(a) and updated annually by
the applicable market basket for each
visit type, in accordance with § 484.225.
(1) The national per-visit amount is
adjusted by the appropriate wage index
based on the site of service of the
beneficiary.
(2) An amount is added to the lowutilization payment adjustments for
low-utilization episodes that occur as
the beneficiary’s only episode or initial
episode in a sequence of adjacent
episodes.
(3) For purposes of the home health
PPS, a sequence of adjacent episodes for
a beneficiary is a series of claims with
no more than 60 days without home
care between the end of one episode,
which is the 60th day (except for
episodes that have been PEP-adjusted),
and the beginning of the next episode.
(b) For periods beginning on or after
January 1, 2020, an HHA receives a
national 30-day payment of a
predetermined rate for home health
services, unless CMS determines at the
end of the 30-day period that the HHA
furnished minimal services to a patient
during the 30-day period.
(1) For each payment group used to
case-mix adjust the 30-day payment
rate, the 10th percentile value of total
visits during a 30-day period of care is
used to create payment group specific
thresholds with a minimum threshold of
at least 2 visits for each case-mix group.
(2) A 30-day period with a total
number of visits less than the threshold
is paid the national per-visit amount by
discipline determined in accordance
with § 484.215(a) and updated annually
by the applicable market basket for each
visit type, in accordance with § 484.225.
(3) The national per-visit amount is
adjusted by the appropriate wage index
based on the site of service for the
beneficiary.
(c) An amount is added to lowutilization payment adjustments for
low-utilization periods that occur as the
beneficiary’s only 30-day period or
initial 30-day period in a sequence of
adjacent periods of care. For purposes of
the home health PPS, a sequence of
adjacent periods of care for a beneficiary
is a series of claims with no more than
60 days without home care between the
end of one period, which is the 30th day
(except for episodes that have been
partial payment adjusted), and the
beginning of the next episode.
■ 14. Section 484.235 is revised to read
as follows:
§ 484.235
Partial payment adjustments.
(a) Partial episode payments (PEPs)
for episodes beginning on or before
December 31, 2019. (1) An HHA
receives a national, standardized 60-day
PO 00000
Frm 00175
Fmt 4701
Sfmt 4702
32513
payment of a predetermined rate for
home health services unless CMS
determines an intervening event,
defined as a beneficiary elected transfer
or discharge with goals met or no
expectation of return to home health
and the beneficiary returned to home
health during the 60-day episode,
warrants a new 60-day episode for
purposes of payment. A start of care
OASIS assessment and physician
certification of the new plan of care are
required.
(2) The PEP adjustment does not
apply in situations of transfers among
HHAs of common ownership.
(i) Those situations are considered
services provided under arrangement on
behalf of the originating HHA by the
receiving HHA with the common
ownership interest for the balance of the
60-day episode.
(ii) The common ownership exception
to the transfer PEP adjustment does not
apply if the beneficiary moves to a
different MSA or Non-MSA during the
60-day episode before the transfer to the
receiving HHA.
(iii) The transferring HHA in
situations of common ownership not
only serves as a billing agent, but must
also exercise professional responsibility
over the arranged-for services in order
for services provided under
arrangements to be paid.
(3) If the intervening event warrants a
new 60-day payment and a new
physician certification and a new plan
of care, the initial HHA receives a
partial episode payment adjustment
reflecting the length of time the patient
remained under its care based on the
first billable visit date through and
including the last billable visit date. The
PEP is calculated by determining the
actual days served as a proportion of 60
multiplied by the initial 60-day
payment amount.
(b) Partial payment adjustments for
periods beginning on or after January 1,
2020. (1) An HHA receives a national,
standardized 30-day payment of a
predetermined rate for home health
services unless CMS determines an
intervening event, defined as a
beneficiary elected transfer or discharge
with goals met or no expectation of
return to home health and the
beneficiary returned to home health
during the 30-day period, warrants a
new 30-day period for purposes of
payment. A start of care OASIS
assessment and physician certification
of the new plan of care are required.
(2) The partial payment adjustment
does not apply in situations of transfers
among HHAs of common ownership.
(i) Those situations are considered
services provided under arrangement on
E:\FR\FM\12JYP2.SGM
12JYP2
32514
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
behalf of the originating HHA by the
receiving HHA with the common
ownership interest for the balance of the
30-day period.
(ii) The common ownership exception
to the transfer partial payment
adjustment does not apply if the
beneficiary moves to a different MSA or
Non-MSA during the 30-day period
before the transfer to the receiving HHA.
(iii) The transferring HHA in
situations of common ownership not
only serves as a billing agent, but must
also exercise professional responsibility
over the arranged-for services in order
for services provided under
arrangements to be paid.
(3) If the intervening event warrants a
new 30-day payment and a new
physician certification and a new plan
of care, the initial HHA receives a
partial payment adjustment reflecting
the length of time the patient remained
under its care based on the first billable
visit date through and including the last
billable visit date. The partial payment
is calculated by determining the actual
days served as a proportion of 30
multiplied by the initial 30-day
payment amount.
■ 15. Section 484.240 is revised to read
as follows:
amozie on DSK3GDR082PROD with PROPOSALS2
§ 484.240
Outlier payments.
(a) For episodes beginning on or
before December 31, 2019, an HHA
receives an outlier payment for an
episode whose estimated costs exceeds
a threshold amount for each case-mix
group. The outlier threshold for each
case-mix group is the episode payment
amount for that group, or the PEP
adjustment amount for the episode, plus
a fixed dollar loss amount that is the
same for all case-mix groups.
(b) For periods beginning on or after
January 1, 2020, an HHA receives an
outlier payment for a 30-day period
whose estimated cost exceeds a
threshold amount for each case-mix
group. The outlier threshold for each
case-mix group is the 30-day payment
amount for that group, or the partial
payment adjustment amount for the 30day period, plus a fixed dollar loss
amount that is the same for all case-mix
groups.
(c) The outlier payment is a
proportion of the amount of imputed
cost beyond the threshold.
(d) CMS imputes the cost for each
claim by multiplying the national per-15
minute unit amount of each discipline
by the number of 15 minute units in the
discipline and computing the total
imputed cost for all disciplines.
■ 16. Section 484.250 is amended by
revising paragraph (a)(1) to read as
follows:
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
§ 484.250
Patient assessment data.
(a) * * *
(1) Such OASIS data described at
§ 484.55(b) and (d) as is necessary for
CMS to administer the payment rate
methodologies described in §§ 484.215,
484.220, 484.230, 484.235, and 484.240;
and such OASIS data described at
§ 484.55(b) and (d) as is necessary to
meet the quality reporting requirements
of section 1895(b)(3)(B)(v) of the Act.
*
*
*
*
*
■ 17. Section 484.320 is amended by
revising paragraph (c) to read as follows:
§ 484.320 Calculation of the Total
Performance Score.
*
*
*
*
*
(c)(1) For performance years 1 through
3, CMS will sum all points awarded for
each applicable measure excluding the
New Measures, weighted equally at the
individual measure level to calculate a
value worth 90 percent of the Total
Performance Score.
(2) For performance years 4 and 5,
CMS will sum all points awarded for
each applicable measure within each
category of measures (OASIS-based,
claims-based and HHCAHPs) excluding
the New Measures, weighted at 35
percent for the OASIS-based measure
category, 35 percent for the claimsbased measure category, and 30 percent
for the HHCAHPS measure category
when all three measure categories are
reported, to calculate a value worth 90
percent of the Total Performance Score.
*
*
*
*
*
PART 486—CONDITIONS FOR
COVERAGE OF SPECIALIZED
SERVICES FURNISHED BY
SUPPLIERS
18. The authority citation for part 486
is revised to read as follows:
■
Authority: 42 U.S.C. 1302, and 1395hh.
19. Add reserved subpart H and
subpart I to read as follows:
■
Subpart H—[Reserved]
Subpart I—Requirements for Home Infusion
Therapy Suppliers
General Provisions
Sec.
486.500
486.505
Basis and Scope.
Definitions.
Standards for Home Infusion Therapy
486.520
486.525
PO 00000
Plan of care.
Required services.
Frm 00176
Fmt 4701
Sfmt 4702
Subpart I—Requirements for Home
Infusion Therapy Suppliers
General Provisions
§ 486.500
Basis and scope.
Section 1861(s)(2)(iii) of the Act
requires the Secretary to establish the
conditions that home infusion therapy
suppliers must meet in order to
participate in the Medicare program and
which are considered necessary to
ensure the health and safety of patients.
§ 486.505
Definitions.
Applicable provider means a
physician, a nurse provider, and a
physician assistant.
Home means a place of residence
used as the home of an individual,
including an institution that is used as
a home. An institution that is used as a
home may not be a hospital, CAH, or
SNF as defined in section 1861(e)(1),
1861(mm)(1), or 1819(a)(1) of the Act,
respectively.
Home infusion drug means a parental
drug or biological administered
intravenously, or subcutaneously for an
administration period of 15 minutes or
more, in the home of an individual
through a pump that is an item of
durable medical equipment. The term
does not include insulin pump systems
or a self-administered drug or biological
on a self-administered drug exclusion
list.
Infusion drug administration calendar
day means the day on which home
infusion therapy services are furnished
by skilled professionals in the
individual’s home on the day of
infusion drug administration. The
skilled services provided on such day
must be so inherently complex that they
can only be safely and effectively
performed by, or under the supervision
of, professional or technical personnel.
Qualified home infusion therapy
supplier means a supplier of home
infusion therapy that meets the all of the
following criteria which are set forth at
section 1861(iii)(3)(D)(i) of the Act:
(1) Furnishes infusion therapy to
individuals with acute or chronic
conditions requiring administration of
home infusion drugs.
(2) Ensures the safe and effective
provision and administration of home
infusion therapy on a 7-day-a-week, 24hour-a-day basis.
(3) Is accredited by an organization
designated by the Secretary in
accordance with section 1834(u)(5) of
the Act.
(4) Meets such other requirements as
the Secretary determines appropriate.
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
Standards for Home Infusion Therapy
§ 486.520
Plan of care.
The qualified home infusion therapy
supplier ensures the following:
(a) All patients must be under the care
of an applicable provider.
(b) All patients must have a plan of
care established by a physician that
prescribes the type, amount, and
duration of the home infusion therapy
services that are to be furnished.
(c) The plan of care for each patient
must be periodically reviewed by the
physician.
§ 486.525
Required services.
The qualified home infusion therapy
supplier must provide the following
services on a 7-day-a-week, 24-hour-aday basis in accordance with the plan of
care:
(a) Professional services, including
nursing services.
(b) Patient training and education not
otherwise paid for as durable medical
equipment as described in
§ 424.57(c)(12) of this chapter.
(c) Remote monitoring and monitoring
services for the provision of home
infusion therapy services and home
infusion drugs.
PART 488—SURVEY, CERTIFICATION,
AND ENFORCEMENT PROCEDURES
20. The authority citation for part 488
is revised to read as follows:
■
Authority: 42 U.S.C. 1302, and 1395hh.
21. Section 488.5 is amended—
a. By redesignating paragraphs (a)(7)
through (21) as paragraphs (a)(8)
through (22);
■ b. By adding a new paragraph (a)(7);
■ c. In newly redesignated paragraph
(a)(18)(i) by removing the word ‘‘and’’ at
the end of the paragraph;
■ d. In newly redesignated paragraph
(a)(18)(ii) by removing the period and
adding in its place ‘‘; and’’; and
■ e. By adding paragraph (a)(18)(iii).
The additions read as follows:
■
■
amozie on DSK3GDR082PROD with PROPOSALS2
§ 488.5 Application and re-application
procedures for national accrediting
organizations.
(a) * * *
(7) A statement acknowledging that
all accrediting organization surveyors
have completed or will complete the
relevant program specific CMS online
trainings established for state surveyors,
initially, and thereafter.
*
*
*
*
*
(18) * * *
(iii) Include a written statement that
if a fully accredited and deemed facility
in good standing provides written
notification that they wish to
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
voluntarily withdraw from the
accrediting organization’s CMSapproved accreditation program, the
accrediting organization must continue
the facility’s current accreditation in full
force and effect until the effective date
of withdrawal identified by the facility
or the expiration date of the term of
accreditation, whichever comes first.
*
*
*
*
*
■ 22. Add reserved subpart K and
subpart L to read as follows:
Subpart K—[Reserved]
Subpart L—Accreditation of Home Infusion
Therapy Suppliers
General Provisions
Sec.
488.1000 Basis and scope.
488.1005 Definitions.
Approval and Oversight of Home Infusion
Therapy Supplier Accrediting Organizations
488.1010 Application and reapplication
procedures for national home infusion
therapy accrediting organizations.
488.1015 Resubmitting a request for
reapproval.
488.1020 Public notice and comment.
488.1025 Release and use of home infusion
therapy accreditation surveys.
488.1030 Ongoing review of home infusion
therapy accrediting organizations.
488.1035 Ongoing responsibilities of a
CMS-approved home infusion therapy
accreditation organization.
488.1040 Onsite observations of home
infusion therapy accrediting organization
operations.
488.1045 Voluntary and involuntary
termination.
488.1050 Reconsideration.
Subpart L—Accreditation of Home
Infusion Therapy Suppliers
General Provisions
§ 488.1000
Basis and scope.
(a) Regulatory basis for home infusion
therapy services. The home infusion
therapy health and safety regulations are
codified at part 486, subpart L, of this
chapter.
(b) Statutory basis for the
accreditation of home infusion therapy
suppliers. (1) Sections 1102 and 1871 of
the Act require that the Secretary
prescribe such regulations as may be
necessary to carry out the
administration of the Medicare program.
(2) Section 1834(u)(5) of the Act
require the Secretary to designate and
approve independent organizations for
the purposes of accrediting qualified
home infusion therapy suppliers.
(c) Scope. This subpart sets forth the
following:
(1) Application and reapplication
procedures for national accrediting
organizations seeking approval or re-
PO 00000
Frm 00177
Fmt 4701
Sfmt 4702
32515
approval of authority to accredit
qualified home infusion therapy
suppliers.
(2) Ongoing CMS oversight processes
for approved accrediting organizations
that accredit qualified home infusion
therapy suppliers.
(3) Appeal procedures for accrediting
organizations that accredit qualified
home infusion therapy suppliers.
§ 488.1005
Definitions.
As used in this subpart—
Immediate jeopardy means a situation
in which the provider’s or supplier’s
non-compliance with one or more
Medicare accreditation requirements
has caused, or is likely to cause, serious
injury, harm, impairment, or death to a
patient.
National accrediting organization
means an organization that accredits
provider or supplier entities under a
specific program and whose accredited
provider or supplier entities under each
program are widely dispersed
geographically across the United States.
In addition, the specific program is
active, fully implemented, and
operational.
National in scope means a program is
fully implemented, operational, and
widely dispersed geographically
throughout the country.
Qualified home infusion therapy
supplier means a supplier of home
infusion therapy that meets the all of the
following criteria which are set forth at
section 1861(iii)(3)(D)(i) of the Act:
(1) Furnishes infusion therapy to
individuals with acute or chronic
conditions requiring administration of
home infusion drugs.
(2) Ensures the safe and effective
provision and administration of home
infusion therapy on a 7-day-a-week, 24hour-a-day basis.
(3) Is accredited by an organization
designated by the Secretary in
accordance with section 1834(u)(5) of
the Act.
(4) Meets such other requirements as
the Secretary determines appropriate.
Reasonable assurance means an
accrediting organization has
demonstrated to CMS’ satisfaction that
its accreditation program requirements
meet or exceed the Medicare program
requirements.
Rural area as defined at section
1886(d)(2)(D) of the Act.
Substantial allegation of noncompliance means a complaint from any
of a variety of sources (such as patient,
relative, or third party), including
complaints submitted in person, by
telephone, through written
correspondence, or in the newspaper,
magazine articles or other media, that
E:\FR\FM\12JYP2.SGM
12JYP2
32516
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
would, if found to be present, adversely
affect the health and safety of patients
and raises doubts as to a qualified home
infusion therapy supplier’s compliance
with the applicable Medicare
accreditation requirements.
Approval and Oversight of Home
Infusion Therapy Supplier Accrediting
Organizations
amozie on DSK3GDR082PROD with PROPOSALS2
§ 488.1010 Application and reapplication
procedures for national accrediting
organizations.
(a) Information submitted with
application. A national home infusion
therapy accrediting organization
applying to CMS for approval or reapproval of a designated home infusion
therapy accreditation program must
furnish CMS with information and
materials that demonstrate that its home
infusion therapy accreditation program
requirements meet or exceed the
applicable Medicare requirements for
accrediting organizations, including the
following:
(1) Documentation that demonstrates
the organization meets the definition of
a national accrediting organization
under § 488.1005 as it relates to the
accreditation program.
(2) The Medicare provider or supplier
type for which the organization is
requesting approval or re-approval.
(3) Documentation that demonstrates
the home infusion therapy accrediting
organization’s ability to take into
account the capacities of rural home
infusion therapy suppliers (as required
by section 1834(u)(5)(A)(ii) of the Act).
(4) Information that demonstrates the
home infusion therapy accrediting
organization’s knowledge, expertise,
and experience in home infusion
therapy.
(5) A detailed crosswalk (in table
format) that identifies, for each of the
applicable Medicare requirements, the
exact language of the organization’s
comparable accreditation requirements
and standards.
(6) A detailed description of the home
infusion therapy accrediting
organization’s survey processes to
confirm that a home infusion therapy
supplier’s processes are comparable to
those of Medicare. This description
must include all of the following:
(i) The types and frequency of surveys
performed, and a rationale for which
accreditation requirements will be
evaluated via onsite surveys and which
will be evaluated via offsite audits, or
other strategies for ensuring accredited
home infusion therapy suppliers
maintain adherence to the home
infusion therapy accreditation program
requirements, including an explanation
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
of how the accrediting organization will
maintain the schedule it proposes.
(ii) Copies of the home infusion
therapy accrediting organizations survey
and audit forms, guidelines, and
instructions to surveyors.
(iii) Documentation demonstrating
that the home infusion therapy
accrediting organization’s onsite survey
or offsite audit reports identify, for each
finding of non-compliance with
accreditation standards, the comparable
Medicare home infusion therapy
accreditation requirements, as
applicable.
(iv) A description of the home
infusion therapy accrediting
organization’s accreditation survey
review process.
(v) A description of the home infusion
therapy accrediting organization’s
procedures and timelines for notifying a
surveyed or audited home infusion
therapy supplier of non-compliance
with the home infusion therapy
accreditation program’s standards.
(vi) A description of the home
infusion therapy accrediting
organization’s procedures and timelines
for monitoring the home infusion
therapy supplier’s correction of
identified non-compliance with the
accreditation program’s standards.
(vii) The ability of the home infusion
therapy accrediting organization to
conduct timely reviews of accreditation
applications.
(viii) A statement acknowledging that,
as a condition for CMS approval of a
national accrediting organization’s
accreditation program, the home
infusion therapy accrediting
organization agrees to provide CMS
with information extracted from each
home infusion therapy accreditation
onsite survey, offsite audit or other
evaluation strategies as part of its data
submissions required under paragraph
(a)(19) of this section, and, upon request
from CMS, a copy of the most recent
accreditation onsite survey, offsite
audit, or other evaluation strategy
together with any other information
related to the survey as CMS may
require (including corrective action
plans).
(ix) A statement acknowledging that
the home infusion therapy accrediting
organization will provide timely
notification to CMS when an
accreditation survey or complaint
investigation identifies an immediate
jeopardy as that term is defined at
§ 488.1005. Using the format specified
by CMS, the home infusion therapy
accrediting organization must notify
CMS within 2 business days from the
date the accrediting organization
identifies the immediate jeopardy.
PO 00000
Frm 00178
Fmt 4701
Sfmt 4702
(7) Procedures to ensure that—
(i) Unannounced onsite surveys, as
appropriate, will be conducted
periodically, including procedures that
protect against unannounced surveys
becoming known to the provider or
supplier in advance of the visit; or
(ii) Offsite survey audits are
performed to evaluate the quality of
services provided which may be
followed up with periodic onsite visits.
(8) The criteria for determining the
size and composition of the home
infusion therapy accrediting
organization’s survey, audit and other
evaluation strategy teams for individual
supplier onsite surveys. The home
infusion therapy accrediting
organization’s criteria should include,
but not be limited to the following
information:
(i) The expected number of individual
home infusion therapy supplier
locations to be surveyed using an onsite
survey.
(ii) The number of home infusion
therapy suppliers to be surveyed using
off-site audits.
(iii) A description of other types of
home infusion therapy accreditation
review activities to be used.
(iv) The reasons for each type of
survey (that is, initial accreditation
survey, reaccreditation survey, and
complaint survey).
(9) The overall adequacy of the
number of the home infusion therapy
accrediting organization’s surveyors,
auditors, and other staff available to
perform survey related activities,
including how the organization will
increase the size of the survey, audit,
and other evaluation staff to match
growth in the number of accredited
facilities or programs while maintaining
re-accreditation intervals for existing
accredited facilities or programs.
(10) Detailed information about the
individuals who perform onsite surveys,
offsite audits or other strategies for
ensuring accredited home infusion
therapy suppliers maintain adherence to
the home infusion therapy accreditation
program requirements, including all of
the following information:
(i) The number and types of
professional and technical staff
available for conducting onsite surveys,
offsite audits, or other strategies for
ensuring accredited home infusion
therapy suppliers maintain adherence to
the home infusion therapy accreditation
program requirements.
(ii) The education, employment, and
experience requirements surveyors and
auditors must meet.
(iii) The content and length of the
orientation program.
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
(11) The content, frequency and types
of in-service training provided to survey
and audit personnel.
(12) The evaluation systems used to
monitor the performance of individual
surveyors, auditors and survey teams.
(13) The home infusion therapy
accrediting organization’s policies and
procedures to avoid conflicts of interest,
including the appearance of conflicts of
interest, involving individuals who
conduct surveys, audits or participate in
accreditation decisions.
(14) The policies and procedures used
when a home infusion therapy supplier
has a dispute regarding survey or audit
findings, or an adverse decision.
(15) Procedures for the home infusion
therapy supplier to use to notify the
home infusion therapy accrediting
organization when the accredited home
infusion therapy supplier does the
either of the following:
(i) Removes or ceases furnishing
services for which they are accredited.
(ii) Adds services for which they are
not accredited.
(16) The home infusion therapy
accrediting organization’s procedures
for responding to, and investigating
complaints against accredited facilities,
including policies and procedures
regarding referrals, when applicable, to
appropriate licensing bodies,
ombudsmen offices, and CMS.
(17) A description of the home
infusion therapy accrediting
organization’s accreditation status
decision-making process. The home
infusion therapy accrediting
organization must furnish the following:
(i) Its process for addressing
deficiencies identified with
accreditation program requirements,
and the procedures used to monitor the
correction of deficiencies identified
during an accreditation survey and
audit process.
(ii) A description of all types and
categories of accreditation decisions
associated with the program, including
the duration of each of the
organization’s accreditation decisions.
(iii) Its policies and procedures for the
granting, withholding or removal of
accreditation status for facilities that fail
to meet the accrediting organization’s
standards or requirements, assignment
of less than full accreditation status or
other actions taken by the organization
in response to non-compliance with its
standards and requirements.
(iv) A statement acknowledging that
the home infusion therapy accrediting
organization agrees to notify CMS (in a
manner CMS specifies) of any decision
to revoke, terminate, or revise the
accreditation status of a home infusion
therapy supplier, within 3 business days
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
from the date the organization takes an
action.
(18) A list of all currently accredited
home infusion therapy suppliers, the
type and category of accreditation,
currently held by each, and the
expiration date for each home infusion
therapy supplier’s current accreditation.
(19) A schedule of all survey activity
(such as onsite surveys, offsite audits
and other types if survey strategies)
expected to be conducted by the
organization during the 6-month period
following submission of an initial or
renewal application.
(20) A written presentation that
demonstrates the organization’s ability
to furnish CMS with electronic data.
(21) A description of the home
infusion therapy accrediting
organization’s data management and
analysis system with respect to its
surveys and accreditation decisions,
including all of the following:
(i) A detailed description of how the
home infusion therapy accrediting
organization uses its data to assure the
compliance of its home infusion therapy
accreditation program with the
Medicare home infusion therapy
accreditation program requirements.
(ii) A written statement
acknowledging that the home infusion
therapy accrediting organization agrees
to submit timely, accurate, and
complete data that CMS has determined
is both necessary to evaluate the
accrediting organization’s performance
and is not unduly burdensome for the
accrediting organization to submit.
(A) The organization must submit
necessary data according to the
instructions and timeframes CMS
specifies.
(B) Data to be submitted includes the
following:
(1) Accredited home infusion therapy
supplier identifying information.
(2) Survey findings.
(3) Quality measures.
(4) Notices of accreditation decisions.
(22) The three most recent annual
audited financial statements of the
home infusion therapy accrediting
organization that demonstrate that the
organization’s staffing, funding, and
other resources are adequate to perform
the required surveys, audits, and related
activities to maintain the accreditation
program.
(23) A written statement
acknowledging that, as a condition for
approval, the home infusion therapy
accrediting organization agrees to the
following:
(i) Voluntary termination. Provide
written notification to CMS and all
home infusion therapy suppliers
accredited under its CMS-approved
PO 00000
Frm 00179
Fmt 4701
Sfmt 4702
32517
home infusion therapy accreditation
program at least 90 calendar days in
advance of the effective date of a
decision by the home infusion therapy
accrediting organization to voluntarily
terminate its CMS-approved home
infusion therapy accreditation program
and the implications for the suppliers’
payment status once their current term
of accreditation expires in accordance
with the requirements at § 488.1045(a).
(ii) Involuntary termination. Provide
written notification to all accredited
home infusion therapy suppliers
accredited under its CMS-approved
home infusion therapy accreditation
program no later than 30 calendar days
after the notice is published in the
Federal Register announcing that CMS
is withdrawing its approval of its
accreditation program and the
implications for the home infusion
therapy supplier’s payment status in
accordance with the requirements at
§ 488.1045(b) once their current term of
accreditation expires.
(A) For both voluntary and
involuntary terminations, provide a
second written notification to all
accredited home infusion therapy
suppliers 10 calendar days prior to the
organization’s accreditation program
effective date of termination.
(B) Notify CMS, in writing
(electronically or hard copy), within 2
business days of a deficiency identified
in any accredited home infusion therapy
supplier from any source where the
deficiency poses an immediate jeopardy
to the home infusion therapy supplier’s
beneficiaries or a hazard to the general
public.
(iii) Provide, on an annual basis,
summary accreditation activity data and
trends including the following:
(A) Deficiencies.
(B) Complaints.
(C) Terminations.
(D) Withdrawals.
(E) Denials.
(F) Accreditation decisions.
(G) Other survey-related activities as
specified by CMS.
(iv) If CMS terminates a home
infusion therapy accrediting
organization’s approved status, the
home infusion therapy accrediting
organization must work collaboratively
with CMS to direct its accredited home
infusion therapy suppliers to the
remaining CMS-approved accrediting
organizations within a reasonable
period of time.
(v) Notify CMS at least 60 days in
advance of the implementation date of
any significant proposed changes in its
CMS-approved home infusion therapy
accreditation program and that it agrees
not to implement the proposed changes
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32518
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
without prior written notice of
continued program approval from CMS,
except as provided for at
§ 488.1040(b)(2).
(vi) A statement acknowledging that,
in response to a written notice from
CMS to the home infusion therapy
accrediting organization of a change in
the applicable home infusion therapy
accreditation requirements or survey
process, the organization will provide
CMS with proposed corresponding
changes in the accrediting
organization’s home infusion therapy
accreditation requirements for its CMSapproved home infusion therapy
accreditation program to ensure that its
accreditation standards continue to
meet or exceed those of Medicare, or
survey process remains comparable
with that of Medicare. The home
infusion therapy accrediting
organization must comply with the
following requirements:
(A) The proposed changes must be
submitted within 30 calendar days of
the date of the written CMS notice to the
home infusion therapy accrediting
organization or by a date specified in
the notice, whichever is later. CMS
gives due consideration to a home
infusion therapy accrediting
organization’s request for an extension
of the deadline as long as it is submitted
prior to the due date.
(B) The proposed changes are not to
be implemented without prior written
notice of continued program approval
from CMS, except as provided for at
§ 488.1040(b)(2)(ii).
(24) The organization’s proposed fees
for accreditation, including any plans
for reducing the burden and cost of
accreditation to small and rural
suppliers.
(b) Additional information needed. If
CMS determines that additional
information is necessary to make a
determination for approval or denial of
the home infusion therapy accrediting
organization’s initial application or reapplication for CMS-approval of an
accreditation program, CMS requires
that the home infusion therapy
accrediting organization submit any
specific documentation requirements
and attestations as a condition of
approval of accreditation status. CMS
notifies the home infusion therapy
accrediting organization and afford it an
opportunity to provide the additional
information.
(c) Withdrawing an application. A
home infusion therapy accrediting
organization may withdraw its initial
application for CMS’ approval of its
home infusion therapy accreditation
program at any time before CMS
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
publishes the final notice described in
§ 488.1025(b).
(d) Notice of approval or disapproval
of application. CMS sends a notice of its
decision to approve or disapprove the
home infusion therapy accrediting
organization’s application within 210
calendar days from the date CMS
determines the home infusion therapy
accrediting organization’s application is
complete. The final notice specifies the
following:
(1) The basis for the decision.
(2) The effective date.
(3) The term of the approval (not
exceed 6 years).
§ 488.1015 Resubmitting a request for
reapproval.
(a) Except as provided in paragraph
(b) of this section, a home infusion
therapy accrediting organization whose
request for CMS’s approval or reapproval of an accreditation program
has been denied, or a home infusion
therapy accrediting organization that
has voluntarily withdrawn an initial
application, may resubmit its
application if the home infusion therapy
accrediting organization satisfies all of
the following requirements:
(1) Revises its home infusion therapy
accreditation program to address the
issues related to the denial of its
previous request or its voluntary
withdrawal.
(2) Resubmits the application in its
entirety.
(b) If a home infusion therapy
accrediting organization has requested,
in accordance with § 488.1050, a
reconsideration of CMS’s disapproval, it
may not submit a new application for
approval of a home infusion therapy
accreditation program until such
reconsideration is administratively
final.
§ 488.1020
Public notice and comment.
CMS publishes a notice in the Federal
Register when the following conditions
are met:
(a) Proposed notice. CMS publishes a
notice after the receipt of a completed
application from a national home
infusion therapy accrediting
organization seeking CMS’s approval of
a home infusion therapy accreditation
program. The notice identifies the home
infusion therapy accrediting
organization, the type of suppliers
covered by the home infusion therapy
accreditation program, and provides at
least a 30 day public comment period
(beginning on the date of publication).
(b) Final notice. The final notice
announces CMS decision to approve or
deny a national accrediting organization
application. The notice specifies the
basis for the CMS decision.
PO 00000
Frm 00180
Fmt 4701
Sfmt 4702
(1) Approval or re-approval. If CMS
approves or re-approves the home
infusion therapy accrediting
organization’s home infusion therapy
accreditation program, the final notice
at a minimum includes the following
information:
(i) A description of how the home
infusion therapy accreditation program
meets or exceeds Medicare home
infusion therapy accreditation program
requirements.
(ii) The effective date of approval (no
later than the publication date of the
notice).
(iii) The term of the approval (6 years
or less).
(2) Denial. If CMS does not approve
the home infusion therapy accrediting
organization’s accreditation program,
the final notice describes the following:
(i) How the home infusion therapy
accrediting organization fails to meet
Medicare home infusion therapy
accreditation program requirements.
(ii) The effective date of the decision.
§ 488.1025 Release and use of home
infusion therapy accreditation surveys.
The home infusion therapy
accrediting organization must include,
in its accreditation agreement with each
supplier, an acknowledgement that the
supplier agrees to release to CMS a copy
of its most current accreditation survey
and any information related to the
survey that CMS may require, corrective
action plans.
(a) CMS may determine that a home
infusion therapy supplier does not meet
the applicable Medicare conditions or
requirements on the basis of its own
investigation of the accreditation survey
or any other information related to the
survey.
(b) With the exception of home health
agency surveys, general disclosure of an
accrediting organization’s survey
information is prohibited under section
1865(b) of the Act. CMS may publically
disclose an accreditation survey and
information related to the survey, upon
written request, to the extent that the
accreditation survey and survey
information are related to an
enforcement action taken by CMS.
§ 488.1030 Ongoing review of home
infusion therapy accrediting organizations.
(a) Performance review. CMS
evaluates the performance of each CMSapproved home infusion therapy
accreditation program on an ongoing
basis. This review includes the review
of the following:
(1) The home infusion therapy
accrediting organization’s survey
activity.
(2) The home infusion therapy
accrediting organization’s continued
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
fulfillment of the requirements at
§§ 488.1010 and 488.1035.
(b) Comparability review. CMS
assesses the equivalency of a home
infusion therapy accrediting
organization’s CMS-approved program
requirements with the comparable
Medicare home infusion therapy
accreditation requirements after CMS
imposes new or revised Medicare
accreditation requirements. When this
occurs, the following takes place:
(1) CMS provides the home infusion
therapy accrediting organizations with
written notice of the changes to the to
the Medicare home infusion therapy
accreditation requirements.
(2) The home infusion therapy
accrediting organization must make
revisions to its home infusion therapy
accreditation standards or survey
processes which incorporate the new or
revised Medicare accreditation
requirements.
(3) In the written notice, CMS
specifies the deadline (no less than 30
calendar days) by which the home
infusion therapy accrediting
organization must submit its proposed
revised home infusion therapy
accreditation standard or survey process
revisions, and the timeframe(s) for
implementation of these revised home
infusion therapy accreditation
standards.
(4) CMS may extend the submission
deadline by which the accrediting
organization must submit its proposed
revised home infusion therapy
accreditation standards and survey
processes, if both of the following occur:
(i) The accrediting organization
submits a written request for an
extension of the submission deadline.
(ii) The request for extension is
submitted prior to the original
submission deadline.
(5) After completing the comparability
review of the home infusion therapy
accrediting organizations revised home
infusion therapy accreditation standards
and survey processes, CMS shall
provide written notification to the home
infusion therapy accrediting
organization regarding whether or not
its home infusion therapy accreditation
program, including the proposed
revised home infusion therapy
accreditation standards and
implementation timeframe(s), continues
to meet or exceed all applicable
Medicare requirements.
(6) If, no later than 60 calendar days
after receipt of the home infusion
therapy accrediting organization’s
proposed changes, CMS does not
provide the written notice to the home
infusion therapy accrediting
organization required, then the revised
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
home infusion therapy accreditation
standards and program is deemed to
meet or exceed all applicable Medicare
requirements and to have continued
CMS-approval.
(7) If a home infusion therapy
accrediting organization is required to
submit a new application because CMS
imposes new home infusion therapy
regulations or makes significant
substantive revisions to the existing
home infusion therapy regulations, CMS
provides notice of the decision to
approve or disapprove the new
application submitted by the home
infusion therapy accrediting
organization within the time period
specified in § 488.1010(d).
(8) If a home infusion therapy
accrediting organization fails to submit
its proposed changes to its home
infusion therapy accreditation standards
and survey processes within the
required timeframe, or fails to
implement the proposed changes that
have been determined or deemed by
CMS to be comparable, CMS may open
an accreditation program review in
accordance with paragraph (d) of this
section.
(c) Review of revised home infusion
therapy accreditation standards
submitted to CMS by an accrediting
organization. When a home infusion
therapy accrediting organization
proposes to adopt new or revised
accreditation standards, requirements or
changes in its survey process, the home
infusion therapy accrediting
organization must do the following:
(1) Provide CMS with written notice
of any proposed changes in home
infusion therapy accreditation
standards, requirements or survey
process at least 60 days prior to the
proposed implementation date of the
proposed changes.
(2) Not implement any of the
proposed changes before receiving
CMS’s approval, except as provided in
paragraph (c)(4) of this section.
(3) Provide written notice to CMS that
includes all of the following:
(i) A detailed description of the
changes that are to be made to the
organization’s home infusion therapy
accreditation standards, requirements
and survey processes.
(ii) A detailed crosswalk (in table
format) that states the exact language of
the organization’s revised accreditation
requirements and the applicable
Medicare requirements for each.
(4) CMS must provide a written notice
to the home infusion therapy
accrediting organization which states
whether the home infusion therapy
accreditation program, including the
proposed revisions, continues or does
PO 00000
Frm 00181
Fmt 4701
Sfmt 4702
32519
not continue to meet or exceed all
applicable Medicare home infusion
therapy requirements within 60 days of
receipt of the home infusion therapy
accrediting organization’s proposed
changes. If CMS has made a finding that
the home infusion therapy accrediting
organization’s home infusion therapy
accreditation program, accreditation
requirements and survey processes,
including the proposed revisions does
not continue to meet or exceed all
applicable Medicare home infusion
therapy requirements. CMS must state
the reasons for these findings.
(5) If, no later than 60 calendar days
after receipt of the home infusion
therapy accrediting organization’s
proposed changes, CMS does not
provide written notice to the home
infusion therapy accrediting
organization that the home infusion
therapy accreditation program,
including the proposed revisions,
continues or does not continue to meet
or exceed all applicable Medicare home
infusion therapy requirements, then the
revised home infusion therapy
accreditation program is deemed to
meet or exceed all applicable Medicare
home infusion therapy requirements
and to have continued CMS approval.
(6) If a home infusion therapy
accrediting organization implements
changes that have neither been
determined nor deemed by CMS to be
comparable to the applicable Medicare
home infusion therapy requirements,
CMS may open a home infusion therapy
accreditation program review in
accordance with paragraph (d) of this
section.
(d) CMS-approved home infusion
therapy accreditation program review. If
a comparability, performance, or
standards review reveals evidence of
substantial non-compliance of a home
infusion therapy accrediting
organization’s CMS-approved home
infusion therapy accreditation program
with the requirements of this subpart,
CMS may initiate a home infusion
therapy accreditation program review.
(1) If a home infusion therapy
accreditation program review is
initiated, CMS will provide written
notice to the home infusion therapy
accrediting organization indicating that
its CMS-approved accreditation program
approval may be in jeopardy and that a
home infusion therapy accreditation
program review is being initiated. The
notice will provide all of the following
information:
(i) A statement of the instances, rates
or patterns of non-compliance
identified, as well as other related
information, if applicable.
E:\FR\FM\12JYP2.SGM
12JYP2
amozie on DSK3GDR082PROD with PROPOSALS2
32520
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
(ii) A description of the process to be
followed during the review, including a
description of the opportunities for the
home infusion therapy accrediting
organization to offer factual information
related to CMS’ findings.
(iii) A description of the possible
actions that may be imposed by CMS
based on the findings of the home
infusion therapy accreditation program
review.
(iv) The actions the home infusion
therapy accrediting organization must
take to address the identified
deficiencies
(v) The length of the accreditation
program review probation period, which
will include monitoring of the home
infusion therapy accrediting
organization’s performance and
implementation of the corrective action
plan. The probation period is not to
exceed 180 calendar days from the date
that CMS approves the AOs corrective
action plan.
(2) CMS will review and approve the
home infusion therapy accrediting
organization’s plan of correction for
acceptability within 30 days after
receipt.
(3) CMS will monitor the AO’s
performance and implementation of the
plan of correction during the probation
period which is not to exceed 180 days
from the date of approval of the plan of
correction.
(4) If CMS determines, as a result of
the home infusion therapy accreditation
program review or a review of an
application for renewal of the
accrediting organizations existing CMSapproved home infusion therapy
accreditation program, that the home
infusion therapy accrediting
organization has failed to meet any of
the requirements of this subpart, CMS
may place the home infusion therapy
accrediting organization’s CMSapproved home infusion therapy
accreditation program on an additional
probation period of up to 180 calendar
days subsequent to the 180-day
probation period described in paragraph
(d)(1)(v) of this section to implement
additional corrective actions or
demonstrate sustained compliance, not
to exceed the home infusion therapy
accrediting organization’s current term
of approval. In the case of a renewal
application where CMS has already
placed the home infusion therapy
accreditation program on probation,
CMS indicates that any approval of the
application is conditional while the
program is placed on probation.
(i) Within 60 calendar days after the
end of any probationary period, CMS
issues a written determination to the
home infusion therapy accrediting
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
organization as to whether or not its
CMS-approved home infusion therapy
accreditation program continues to meet
the requirements of this subpart,
including the reasons for the
determination.
(ii) If CMS determines that the home
infusion therapy accrediting
organization does not meet the
requirements, CMS may withdraw
approval of the CMS-approved home
infusion therapy accreditation program.
The notice of determination provided to
the home infusion therapy accrediting
organization includes notice of the
removal of approval, reason for the
removal, including the effective date
determined in accordance with
paragraph (d)(4)(iii) of this section.
(iii) CMS publishes in the Federal
Register a notice of its decision to
withdraw approval of a CMS-approved
accreditation program, including the
reasons for the withdrawal, effective 60
calendar days after the date of
publication of the notice.
(e) Immediate jeopardy. If at any time
CMS determines that the continued
approval of a CMS-approved home
infusion therapy accreditation program
of any home infusion therapy
accrediting organization poses an
immediate jeopardy to the patients of
the suppliers accredited under the
program, or the continued approval
otherwise constitutes a significant
hazard to the public health, CMS may
immediately withdraw the approval of a
CMS-approved home infusion therapy
accreditation program of that home
infusion therapy accrediting
organization and publish a notice of the
removal, including the reasons for it, in
the Federal Register.
(f) Notification to home infusion
therapy suppliers of withdrawal of CMS
approval status. A home infusion
therapy accrediting organization whose
CMS approval of its home infusion
therapy accreditation program has been
withdrawn must notify each of its
accredited home infusion therapy
suppliers, in writing, of the withdrawal
of CMS approval status no later than 30
calendar days after the notice is
published in the Federal Register. The
notification to the accredited home
infusion therapy suppliers must inform
them of the implications for their
payment status once their current term
of accreditation expires.
§ 488.1035 Ongoing responsibilities of a
CMS-approved home infusion therapy
accrediting organization.
A home infusion therapy
accreditation organization approved by
CMS must carry out the following
activities on an ongoing basis:
PO 00000
Frm 00182
Fmt 4701
Sfmt 4702
(a) Provide CMS with all of the
following in written format (either
electronic or hard copy):
(1) Copies of all home infusion
therapy accreditation surveys, together
with any survey-related information that
CMS may require (including corrective
action plans and summaries of findings
with respect to unmet CMS
requirements).
(2) Notice of all accreditation
decisions.
(3) Notice of all complaints related to
providers or suppliers.
(4) Information about all home
infusion therapy accredited suppliers
against which the home infusion
therapy accreditation organization has
taken remedial or adverse action,
including revocation, withdrawal, or
revision of the providers or suppliers
accreditation.
(5) The home infusion therapy
accrediting organization must provide,
on an annual basis, summary data
specified by CMS that relate to the past
year’s accreditation activities and
trends.
(6) Notice of any proposed changes in
the home infusion therapy accrediting
organization’s accreditation standards or
requirements or survey process. If the
home infusion therapy accrediting
organization implements the changes
before or without CMS’ approval, CMS
may withdraw its approval of the
accrediting organization.
(b) Within 30 calendar days after a
change in CMS requirements, the home
infusion therapy accrediting
organization must submit an
acknowledgment of receipt of CMS’
notification to CMS.
(c) The home infusion therapy
accrediting organization must permit its
surveyors to serve as witnesses if CMS
takes an adverse action based on
accreditation findings.
(d) Within 2 business days of
identifying a deficiency of an accredited
home infusion therapy supplier that
poses immediate jeopardy to a
beneficiary or to the general public, the
home infusion therapy accrediting
organization must provide CMS with
written notice of the deficiency and any
adverse action implemented by the
accrediting organization.
(e) Within 10 calendar days after
CMS’ notice to a CMS-approved home
infusion therapy accrediting
organization that CMS intends to
withdraw approval of the home infusion
therapy accrediting organization, the
home infusion therapy accrediting
organization must provide written
notice of the withdrawal to all of the
home infusion therapy accrediting
organization’s accredited suppliers.
E:\FR\FM\12JYP2.SGM
12JYP2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
§ 488.1040 Onsite observations of home
infusion therapy accrediting organization
operations.
(a) As part of the application review
process, the ongoing review process, or
the continuing oversight of a home
infusion therapy accrediting
organization’s performance, CMS may
conduct onsite inspections of the home
infusion therapy accrediting
organization’s operations and offices at
any time to verify the home infusion
therapy accrediting organization’s
representations and to assess the home
infusion therapy accrediting
organization’s compliance with its own
policies and procedures.
(b) Activities to be performed by CMS
staff during the onsite inspections may
include, but are not limited to the
following:
(1) Interviews with various
accrediting organization staff.
(2) Review of documents, survey files,
audit tools, and related records.
(3) Observation of meetings
concerning the home infusion therapy
accreditation process.
(4) Auditing meetings concerning the
accreditation process.
(5) Observation of in-progress surveys
and audits.
(6) Evaluation of the accrediting
organization’s survey results and
accreditation decision-making process.
amozie on DSK3GDR082PROD with PROPOSALS2
§ 488.1045 Voluntary and involuntary
termination.
(a) Voluntary termination by a CMSapproved accrediting program. In
accordance with § 488.1010(a)(23), a
home infusion therapy accrediting
organization that decides to voluntarily
terminate its CMS-approved home
infusion therapy accreditation program
must provide written notice at least 90
days in advance of the effective date of
the termination to CMS and each of its
accredited home infusion therapy
suppliers.
(b) Involuntary termination of an
accrediting organization’s approval by
CMS. Once CMS publishes the notice in
the Federal Register announcing its
decision terminate the home infusion
therapy accrediting organization’s home
infusion therapy accreditation program,
the home infusion therapy accrediting
organization must provide written
notification to all suppliers accredited
under its CMS-approved home infusion
therapy accreditation program no later
than 30 calendar days after the notice is
published in the Federal Register
announcing that CMS is withdrawing its
approval of its home infusion therapy
accreditation program and the
implications for the home infusion
therapy suppliers payment status in
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
accordance with the requirements at
§ 488.1010(f) once their current term of
accreditation expires.
(c) Voluntary and involuntary
terminations. For both voluntary and
involuntary terminations—
(1) The accreditation status of affected
home infusion therapy suppliers is
considered to remain in effect until their
current term of accreditation expires;
(2) If the home infusion therapy
supplier wishes to avoid a suspension of
payment, it must provide written notice
to CMS at least 60-calendar days prior
to its accreditation expiration date that
it has submitted an application for home
infusion therapy accreditation under
another CMS-approved home infusion
therapy accreditation program. Failure
to comply with this 60-calendar day
requirement prior to expiration of their
current home infusion therapy
accreditation stations within could
result in a suspension of payment; and
(3) The home infusion therapy
accrediting organization provides a
second written notification to all
accredited home infusion therapy
suppliers ten calendar days prior to the
organization’s accreditation program
effective date of termination.
(d) Voluntary withdrawal from
accreditation requested by a home
infusion therapy supplier. If a voluntary
withdrawal from accreditation is
requested by the home infusion therapy
supplier, the withdrawal may not
become effective until the accrediting
organization completes all of the
following steps:
(1) The accrediting organization must
contact the home infusion therapy
supplier to seek written confirmation
that the home infusion therapy supplier
intends to voluntarily withdraw from
the home infusion therapy accreditation
program.
(2) The home infusion therapy
accrediting organization must advise the
home infusion therapy supplier, in
writing, of the statutory requirement for
accreditation for all home infusion
therapy suppliers and the possible
payment consequences for a lapse in
accreditation status.
(3) The home infusion therapy
accrediting organization must submit
their final notice of the voluntary
withdrawal of accreditation by the home
infusion therapy supplier to CMS by 5
business days after the request for
voluntary withdrawal is ultimately
processed and effective.
§ 488.1050
Reconsideration.
(a) General rule. A home infusion
therapy accrediting organization
dissatisfied with a determination that its
home infusion therapy accreditation
PO 00000
Frm 00183
Fmt 4701
Sfmt 4702
32521
requirements do not provide or do not
continue to provide reasonable
assurance that the suppliers accredited
by the home infusion therapy
accrediting organization meet the
applicable quality standards is entitled
to reconsideration.
(b) Filing requirements. (1) A written
request for reconsideration must be filed
within 30 calendar days of the receipt
of CMS notice of an adverse
determination or non-renewal.
(2) The written request for
reconsideration must specify the
findings or issues with which the home
infusion therapy accrediting
organization disagrees and the reasons
for the disagreement.
(3) A requestor may withdraw its
written request for reconsideration at
any time before the issuance of a
reconsideration determination.
(c) CMS response to a request for
reconsideration. In response to a request
for reconsideration, CMS provides the
accrediting organization with—
(1) The opportunity for a hearing to be
conducted by a hearing officer
appointed by the Administrator of CMS
and provide the accrediting organization
the opportunity to present, in writing
and in person, evidence or
documentation to refute the
determination to deny approval, or to
withdraw or not renew designation; and
(2) Written notice of the time and
place of the hearing at least 10 business
days before the scheduled date.
(d) Hearing requirements and rules.
(1) The reconsideration hearing is a
public hearing open to all of the
following:
(i) Authorized representatives and
staff from CMS, including, but not
limited to, the following:
(A) Technical advisors (individuals
with knowledge of the facts of the case
or presenting interpretation of the facts).
(B) Legal counsel.
(C) Non-technical witnesses with
personal knowledge of the facts of the
case.
(ii) Representatives from the
accrediting organization requesting the
reconsideration including, but not
limited to, the following:
(A) Authorized representatives and
staff from the accrediting organization.
(B) Technical advisors (individuals
with knowledge of the facts of the case
or presenting interpretation of the facts).
(C) Legal counsel.
(D) Non-technical witnesses, such as
patients and family members that have
personal knowledge of the facts of the
case.
(2) The hearing is conducted by the
hearing officer who receives testimony
and documents related to the proposed
action.
E:\FR\FM\12JYP2.SGM
12JYP2
32522
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Proposed Rules
amozie on DSK3GDR082PROD with PROPOSALS2
(3) Testimony and other evidence may
be accepted by the hearing officer even
though such evidence may be
inadmissible under the Federal Rules of
Civil Procedure.
(4) The hearing officer does not have
the authority to compel by subpoena the
production of witnesses, papers, or
other evidence.
(5) Within 45 calendar days after the
close of the hearing, the hearing officer
VerDate Sep<11>2014
17:39 Jul 11, 2018
Jkt 244001
will present the findings and
recommendations to the accrediting
organization that requested the
reconsideration.
(6) The written report of the hearing
officer will include separate numbered
findings of fact and the legal
conclusions of the hearing officer.
(7) The hearing officer’s decision is
final.
PO 00000
Frm 00184
Fmt 4701
Sfmt 9990
Dated: June 25, 2018.
Seema Verma,
Administrator, Centers for Medicare and
Medicaid Services.
Dated: June 28, 2018.
Alex M. Azar II,
Secretary, Department of Health and Human
Services.
[FR Doc. 2018–14443 Filed 7–2–18; 4:15 pm]
BILLING CODE 4120–01–P
E:\FR\FM\12JYP2.SGM
12JYP2
Vol. 83
Thursday,
No. 134
July 12, 2018
Part III
Department of the Treasury
amozie on DSK3GDR082PROD with RULES2
Internal Revenue Service
26 CFR Part 1
Inversions and Related Transactions; Rule
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00001
Fmt 4717
Sfmt 4717
E:\FR\FM\12JYR2.SGM
12JYR2
32524
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9834]
RIN 1545–BO20; 1545–BO22
Inversions and Related Transactions
Internal Revenue Service (IRS),
Treasury.
ACTION: Final regulations, temporary
regulations, and removal of temporary
regulations.
AGENCY:
This document contains final
regulations that address transactions
that are structured to avoid the purposes
of sections 7874 and 367 of the Internal
Revenue Code (the Code) and certain
post-inversion tax avoidance
transactions. These regulations affect
certain domestic corporations and
domestic partnerships whose assets are
directly or indirectly acquired by a
foreign corporation and certain persons
related to such domestic corporations
and domestic partnerships. This
document finalizes proposed
regulations, and removes temporary
regulations, published on April 8, 2016.
DATES:
Effective date: These regulations are
effective on July 12, 2018.
Applicability dates: For dates of
applicability, see §§ 1.304–7(e),
1.367(a)–3(c)(11)(ii), 1.367(b)–4(h),
1.956–2(i), 1.7701(l)–4(h), 1.7874–
1(i)(2), 1.7874–2(l)(2), 1.7874–3(f)(2),
1.7874–6(h), 1.7874–7(g), 1.7874–8(i),
1.7874–9(g), 1.7874–10(l), 1.7874–11(f),
and 1.7874–12(b).
FOR FURTHER INFORMATION CONTACT:
Regarding the regulations under
sections 304, 367, and 7874, Shane M.
McCarrick, (202) 317–6937; regarding
the regulations under sections 956 and
7701(l), Rose E. Jenkins, (202) 317–6934
(not toll-free numbers).
SUPPLEMENTARY INFORMATION:
SUMMARY:
Background
amozie on DSK3GDR082PROD with RULES2
I. Overview
On April 8, 2016, the Department of
the Treasury (the Treasury Department)
and the IRS published final and
temporary regulations under sections
304, 367, 956, 7701(l), and 7874 (TD
9761) in the Federal Register (81 FR
20858, as corrected at 81 FR 40810 and
81 FR 46832). On the same date, the
Treasury Department and the IRS
published a notice of proposed
rulemaking (REG–135734–14) in the
Federal Register (81 FR 20588, as
corrected at 81 FR 35275) by cross-
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
reference to the temporary regulations
(the 2016 proposed regulations)
(together with the final and temporary
regulations described in the preceding
sentence, the 2016 regulations). No
public hearing was requested or held.
Numerous written comments were
received with respect to the proposed
regulations and are available at
www.regulations.gov or upon request. A
comment was also received with respect
to a notice that preceded the 2016
regulations (Notice 2015–79, 2015–49
I.R.B. 775) and, as explained in the
preamble to those regulations, the
comment has been included in the
administrative record for the proposed
regulations. The majority of the
comments supported the 2016
regulations.
On January 18, 2017, the Treasury
Department and the IRS published final
and temporary regulations under section
7874 (TD 9812) in the Federal Register
(82 FR 5388, as corrected at 82 FR
42233), which adopted as final
regulations the proposed regulations in
§ 1.7874–4 (including the portions
included in the 2016 regulations) and
modified certain portions of the 2016
regulations (see 82 FR 5476–01). This
Treasury decision adopts the remaining
2016 proposed regulations, with the
changes generally described in the
Summary of Comments and Explanation
of Revisions section of this preamble, as
final regulations and removes the
corresponding temporary regulations.
II. Section 7874 Background
A foreign corporation (foreign
acquiring corporation) generally is
treated as a surrogate foreign
corporation under section 7874(a)(2)(B)
if, pursuant to a plan (or a series of
related transactions), three conditions
are satisfied. First, the foreign acquiring
corporation completes, after March 4,
2003, the direct or indirect acquisition
of substantially all of the properties held
directly or indirectly by a domestic
corporation (domestic entity
acquisition). Second, after the domestic
entity acquisition, at least 60 percent of
the stock (by vote or value) of the
foreign acquiring corporation is held by
former shareholders of the domestic
corporation (former domestic entity
shareholders) by reason of holding stock
in the domestic corporation (such
percentage, the ownership percentage,
and the fraction used to calculate the
ownership percentage, the ownership
fraction). And third, after the domestic
entity acquisition, the expanded
affiliated group (as defined in section
7874(c)(1)) that includes the foreign
acquiring corporation (EAG) does not
have substantial business activities in
PO 00000
Frm 00002
Fmt 4701
Sfmt 4700
the foreign country in which, or under
the law of which, the foreign acquiring
corporation is created or organized
when compared to the total business
activities of the EAG. Similar provisions
apply if a foreign acquiring corporation
acquires substantially all of the
properties constituting a trade or
business of a domestic partnership. The
domestic corporation or the domestic
partnership described in this paragraph
is referred to at times in this preamble
as the ‘‘domestic entity.’’ For other
definitions used throughout this
preamble but not defined in this
preamble, see § 1.7874–12 (providing
common definitions for purposes of
certain regulations under sections
367(b), 956, 7701(l), and 7874).
The tax treatment of a domestic entity
acquisition in which the EAG does not
have substantial business activities in
the relevant foreign country varies
depending on the level of owner
continuity. If the ownership percentage
is at least 80, the foreign acquiring
corporation is treated as a domestic
corporation for all purposes of the Code
pursuant to section 7874(b).
If, instead, the ownership percentage
is at least 60 but less than 80 (in which
case the domestic entity acquisition is
referred to in this preamble as an
‘‘inversion transaction’’), the foreign
acquiring corporation is respected as a
foreign corporation but the domestic
entity and certain other persons are
subject to special rules that reduce the
tax benefits of the inversion transaction.
For example, section 7874(a)(1) prevents
the use of certain tax attributes to
reduce the U.S. federal income tax owed
on certain income or gain (inversion
gain) recognized in transactions
intended to remove foreign operations
from the U.S. taxing jurisdiction. ‘‘An
Act to provide for reconciliation
pursuant to titles II and V of the
concurrent resolution on the budget for
fiscal year 2018’’ (the Act), Public Law
115–97, amended certain sections of the
Code to further reduce the tax benefits
of inversion transactions. See section
1(h)(11)(C)(iii) (shareholders of
surrogate foreign corporations not
eligible for reduced rate on dividends);
section 59A (for inverted groups,
generally treating costs of goods sold as
a base erosion payment for purposes of
the base erosion and anti-abuse tax);
section 965 (upon certain inversions,
recapturing the benefit of a deduction
related to a transition tax); and section
4985 (increasing the rate of the excise
tax imposed on certain holders of stock
options and other stock-based
compensation).
Section 7874(c)(6) grants the Secretary
authority to prescribe regulations as
E:\FR\FM\12JYR2.SGM
12JYR2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
may be appropriate to determine
whether a corporation is a surrogate
foreign corporation, including
regulations to treat stock as not stock. In
addition, section 7874(g) grants the
Secretary authority to provide
regulations necessary to carry out
section 7874, including regulations
providing for such adjustments to the
application of section 7874 as are
necessary to prevent the avoidance of
the purposes of section 7874.
Summary of Comments and
Explanation of Revisions
I. Rules Addressing Certain
Transactions That Are Structured To
Avoid the Purposes of Section 7874
To address certain transactions that
are structured to avoid the purposes of
section 7874, the 2016 regulations
provided rules for (i) identifying
domestic entity acquisitions and foreign
acquiring corporations in certain
multiple-step transactions; (ii)
calculating the ownership percentage
and, more specifically, disregarding
certain stock of the foreign acquiring
corporation for purposes of computing
the denominator of the ownership
fraction and, in addition, taking into
account certain non-ordinary course
distributions (NOCDs) made by a
domestic entity for purposes of
computing the numerator of the
ownership fraction; (iii) determining
when certain stock of a foreign
acquiring corporation is treated as held
by a member of the EAG; and (iv)
determining when an EAG has
substantial business activities in a
relevant foreign country. The comments
and modifications with respect to these
rules are discussed in this Part I.
amozie on DSK3GDR082PROD with RULES2
A. Calculation of the Ownership
Percentage
1. Passive Assets Rule
Section 1.7874–7T of the 2016
regulations provides a rule (the passive
assets rule) that excludes from the
denominator of the ownership fraction
stock of the foreign acquiring
corporation attributable to certain
passive assets. In general, the rule
applies with respect to a domestic entity
acquisition if, on the completion date,
more than 50 percent of the gross value
of all foreign group property constitutes
foreign group nonqualified property.
The amount of stock that is excluded is
equal to the product of (i) the value of
the stock of the foreign acquiring
corporation, other than stock that is
described in section 7874(a)(2)(B)(ii)
and stock that is excluded from the
denominator of the ownership fraction
under either § 1.7874–1(b) or § 1.7874–
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
4(b) (the multiplicand), and (ii) the
proportion of foreign group property
that is foreign group nonqualified
property, determined based on gross
value (the foreign group nonqualified
property fraction). For purposes of
determining the foreign group
nonqualified property fraction, property
received by the EAG that gives rise to
stock excluded from the ownership
fraction under § 1.7874–4(b) is not taken
into account.
Under the 2016 regulations, the
passive assets rule applies for purposes
of determining the ownership
percentage by vote and value. The
Treasury Department and the IRS have
determined that applying the rule for
purposes of determining the ownership
percentage by vote could give rise to
administrative complexities, because
the rule does not exclude particular
shares of stock but instead excludes an
amount of stock. In particular, when
classes of stock of the foreign acquiring
corporation have different voting power,
a special rule would be needed to
allocate the excluded amount among the
shares. Consistent with other rules
under section 7874, the Treasury
Department and the IRS have concluded
that the rule should apply only for
purposes of determining the ownership
percentage by value. See § 1.7874–8
(excluding an amount of stock for
purposes of determining the ownership
percentage by value); § 1.7874–10
(treating an amount as additional stock
described in section 7874(a)(2)(B)(ii) for
purposes of determining the ownership
percentage by value). The final
regulations therefore contain this
modification. See § 1.7874–7(b).
The Treasury Department and the IRS
have also determined that the passive
assets rule should be modified to take
into account the other stock exclusion
rules. For example, stock excluded
under § 1.7874–8(b) (disregard of certain
stock attributable to serial acquisitions)
or § 1.7874–9(b) (disregard of certain
stock in third-country transactions)
should not be taken into account when
determining the multiplicand. In
addition, property of an entity the
acquisition of which gives rise to stock
excluded under § 1.7874–8(b) or
§ 1.7874–9(b) generally should not be
taken into account when determining
the foreign group nonqualified property
fraction. The final regulations thus
modify the multiplicand so that stock
excluded under any of the stock
exclusion rules is not taken into
account. See § 1.7874–7(b)(1). Further,
the final regulations modify the foreign
group nonqualified property fraction so
that, in general, property that gives rise
to stock excluded under any of the stock
PO 00000
Frm 00003
Fmt 4701
Sfmt 4700
32525
exclusion rules is not taken into
account. See § 1.7874–7(e)(3). The final
regulations also include an example
illustrating these rules. See § 1.7874–7(f)
Example 4.
Further, in response to a comment,
the final regulations clarify that the
passive assets rule is subject to section
7874(c)(4). See § 1.7874–7(a)
(penultimate sentence). For example,
section 7874(c)(4) can apply to the
transfer of properties or liabilities as
part of a plan a principal purpose of
which is to prevent the more-than-50percent threshold of the passive assets
rule from being satisfied with respect to
a domestic entity acquisition. In these
cases, section 7874(c)(4) would
disregard the transaction and, as a
result, the passive assets rule (including
the more-than-50-percent threshold)
would be applied as if the transfer did
not occur.
Lastly, and also in response to a
comment, the Treasury Department and
the IRS clarify § 1.7874–7(e)(1)(i)(C),
which excludes property that gives rise
to income described in section
1297(b)(2)(A) or (B) from the definition
of foreign group nonqualified property.
Under section 1297(b)(2)(A) and (B), for
certain purposes of the passive foreign
investment company rules, passive
income does not include certain income
derived in the active conduct of a
banking or insurance business. The final
regulations clarify that for purposes of
determining whether property qualifies
for the exclusion under § 1.7874–
7(e)(1)(i)(C), other passive foreign
investment company rules do not apply.
See § 1.7874–7(e)(1)(i)(C) (parenthetical
language). Thus, for example, the rules
in section 1298(b)(2) or (3) that except
certain corporations from being treated
as passive foreign investment
companies during a start-up year or
following a change in business do not
apply for this purpose.
2. Serial Acquisitions of Domestic
Entities
Section 1.7874–8T of the 2016
regulations provides a rule (the serial
acquisition rule) that, with respect to a
domestic entity acquisition (a relevant
domestic entity acquisition), excludes
from the denominator of the ownership
fraction stock of the foreign acquiring
corporation attributable to certain
domestic entity acquisitions previously
completed by the foreign acquiring
corporation (or a predecessor).
Consistent with the explanation in the
preamble to the 2016 regulations, this
rule addresses a concern that domestic
entity acquisitions previously
completed by the foreign acquiring
corporation serve as a platform for
E:\FR\FM\12JYR2.SGM
12JYR2
amozie on DSK3GDR082PROD with RULES2
32526
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
additional and even larger domestic
entity acquisitions.
For administrability purposes, the
serial acquisition rule under the 2016
regulations looks only to whether the
foreign acquiring corporation completed
a domestic entity acquisition within the
36-month period ending on the signing
date of the relevant domestic entity
acquisition (such acquisition, in general,
a ‘‘prior domestic entity acquisition’’).
Absent this 36-month look-back period,
the rule could be difficult to administer,
as all domestic entity acquisitions
previously completed by the foreign
acquiring corporation would need to be
identified. In addition, as the period
between a relevant domestic entity
acquisition and a previous domestic
entity acquisition increases, it may
become more difficult to determine
which stock of the foreign acquiring
corporation is attributable to the
previous domestic entity acquisition (for
example, due to changes in the capital
structure of the foreign acquiring
corporation resulting from divisive or
acquisitive transactions). The use of a
36-month look-back period provides an
administrable standard and is consistent
with other look-back periods under the
Code and regulations. See, e.g., section
865(f) (sourcing rule for sales of stock in
a foreign affiliate); section 2035
(transfers before death); section
7701(b)(3) (substantial presence test for
residency); and § 1.7874–10 (NOCD
rule). The final regulations therefore
retain the 36-month look-back period.
The majority of the comments
received on the 2016 regulations
involved the serial acquisition rule. Of
those comments, nearly every one
supported the rule.
One comment, however, while
generally supporting the prevention of
inversions, asserted that the serial
acquisition rule targets a specific
transaction that was pending when the
2016 regulations were issued. The
comment suggested that this would
cause mistrust of federal agencies and
could ultimately harm U.S. businesses.
The Treasury Department and the IRS
disagree with the comment. The serial
acquisition rule does not target a
specific transaction. Instead, and as
explained in the preamble to the 2016
regulations, it addresses a particular
practice occurring in the marketplace in
which a foreign acquiring corporation
completes multiple domestic entity
acquisitions over a span of just a few
years, with the corporation’s increased
value serving as a platform to complete
still larger domestic entity acquisitions
that avoid the application of section
7874. The Treasury Department and the
IRS have concluded that such serial
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
acquisitions, which in effect permit a
single foreign acquiring corporation to
facilitate the inversion of multiple
domestic entities over time, are
inconsistent with the policies
underlying section 7874. As also
explained in the preamble to the 2016
regulations, the Treasury Department
and the IRS have determined that the
rule appropriately addresses this
practice. See Part I.B.3.a of the
Explanation of Provisions of the
preamble to the 2016 regulations; see
also S. Rep. No. 192, at 142 (2003)
(expressing concern that certain
inversions ‘‘permit corporations and
other entities to continue to conduct
business in the same manner as they did
prior to the inversion, but with the
result that the inverted entity avoids
U.S. tax on foreign operations and may
engage in earnings-stripping techniques
to avoid U.S. tax on domestic
operations.’’).
One other comment asserted that the
serial acquisition rule exceeds statutory
authority and lacks a reasoned
explanation. Those same claims were
subsequently asserted in Chamber of
Commerce of the United States v.
Internal Revenue Serv., No. 1:16–CV–
944–LY (W.D. Tex. Sept. 29, 2017),
appeal docketed, No. 17–51063 (5th Cir.
Dec. 1, 2017), in which the serial
acquisition rule in the temporary
regulations was challenged. While the
district court invalidated the temporary
regulation on procedural grounds
because it was not subjected to prior
notice and comment, the court found
that the serial acquisition rule was
substantively valid under sections
7874(c)(6) and (g) (the Code sections
under which the Treasury Department
and the IRS promulgated the rule). The
court concluded that the rule did not
exceed the statutory authority of the
Treasury Department and the IRS
because it was within their broad
authority under section 7874 to ‘‘treat
stock as not stock’’—the exercise of
which, the court noted, could in certain
cases ‘‘substantially alter a calculation
under the statute’’—and to prevent the
avoidance of the purposes of section
7874. The court also ‘‘reviewed the full
analysis by which the Agencies
determined the Rule is necessary’’ and
concluded that the Treasury Department
and the IRS provided a sufficient
explanation in issuing the serial
acquisition rule in the temporary
regulation, and did not engage in
arbitrary and capricious rulemaking.
The final regulations adopt the rule
with three technical clarifications or
modifications, in response to comments.
First, the final regulations clarify that
the determination of stock of the foreign
PO 00000
Frm 00004
Fmt 4701
Sfmt 4700
acquiring corporation attributable to a
prior domestic entity acquisition does
not take into account stock of the
foreign acquiring corporation deemed
under § 1.7874–10(b) (the NOCD rule) or
section 7874(c)(4) more broadly to have
been received in the prior domestic
entity acquisition. See § 1.7874–8(g)(3)
(excluding such stock from the
definition of total number of prior
acquisition shares).
Second, the final regulations provide
an exception to the definition of the
term prior domestic entity acquisition in
addition to the one under the 2016
regulations (relating to certain de
minimis acquisitions). Under this
additional exception, the term does not
include a domestic entity acquisition
that occurs within a foreign-parented
group and qualifies for the internal
group restructuring exception of
§ 1.7874–1(c)(2). See § 1.7874–
8(g)(4)(ii)(B). In these cases, the
Treasury Department and the IRS have
determined that because the domestic
entity remains (or is considered to
remain) within the same foreignparented group, the acquisition should
not be viewed as creating a platform to
complete larger domestic entity
acquisitions. As a result, the Treasury
Department and the IRS have concluded
that these acquisitions do not give rise
to the policy concerns underlying the
serial acquisition rule. Accordingly, like
under the 2016 regulations, the term
prior domestic entity acquisition under
the final regulations means any
domestic entity acquisition completed
by the foreign acquiring corporation (or
a predecessor) within a 36-month lookback period, except for those
acquisitions that, for administrative or
policy reasons, qualify for an exception.
Third, the final regulations define a
predecessor of a foreign acquiring
corporation for purposes of the serial
acquisition rule. See § 1.7874–8(b)
(defining predecessor by cross-reference
to the definition in the NOCD rule
under § 1.7874–10(f)(1)).
3. Third-Country Rule
Section 1.7874–9T of the 2016
regulations provides a rule (the thirdcountry rule) that excludes stock of the
foreign acquiring corporation from the
denominator of the ownership fraction
when a domestic entity acquisition is a
‘‘third-country transaction,’’ which
occurs when three requirements are
satisfied. First, the foreign acquiring
corporation must complete a ‘‘covered
foreign acquisition’’ in a transaction
related to the domestic entity
acquisition. In general, a covered foreign
acquisition is an acquisition by the
foreign acquiring corporation of another
E:\FR\FM\12JYR2.SGM
12JYR2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
amozie on DSK3GDR082PROD with RULES2
foreign corporation (such acquisition, a
‘‘foreign acquisition,’’ and such
corporation, an ‘‘acquired foreign
corporation’’), provided that an
ownership continuity requirement is
satisfied. Second, after all related
transactions are complete, the foreign
acquiring corporation must be a tax
resident in a ‘‘third country’’—that is, a
foreign country other than the foreign
country in which, before the foreign
acquisition and any related transaction,
the acquired foreign corporation was a
tax resident. (The 2016 regulations refer
to the country in which a corporation is
‘‘subject to tax as a resident,’’ rather
than the country in which a corporation
is ‘‘tax resident.’’ However, similar to
the reasons discussed in Part I.C. of this
Summary of Comments and Explanation
of Revisions section (concerning the
substantial business activities test), the
final regulations refer to ‘‘tax resident.’’)
And third, the ownership percentage,
determined without regard to the third
country rule, must be at least 60 (by vote
or value).
As explained in Notice 2015–79, the
Treasury Department and the IRS have
determined that when a domestic entity
acquisition is a third-country
transaction, the decision to locate the
tax residence of the foreign acquiring
corporation in the third country
generally is driven by tax planning,
including the facilitation of U.S. tax
avoidance following the acquisition,
and, as a result, generally is contrary to
the policies underlying section 7874.
Accordingly, the third country rule
provides that stock of the foreign
acquiring corporation held by former
shareholders of the acquired foreign
corporation by reason of holding stock
in the acquired foreign corporation is
excluded from the denominator of the
ownership fraction.
a. Exceptions to Rule’s Application
A comment suggested that the
Treasury Department and the IRS
consider adding one or more exceptions
to the third-country rule, so as to better
tailor the rule’s application to domestic
entity acquisitions in which the use of
a third country is likely driven by tax
planning. The comment recommended
against an exception based on the
subjective criterion of whether a non-tax
business purpose exists for the foreign
acquiring corporation’s use of the third
country. Instead, the comment
suggested that any exception should be
based on objective criteria. In particular,
the comment proposed exceptions based
on (i) the foreign group’s business
activities in the third country, and (ii)
a comparison of the treaty benefits
(specifically, the withholding tax rate
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
with respect to dividends, interest, and
royalties) available to the foreign
acquiring corporation in the third
country as compared to the benefits that
would be available in the country in
which the acquired foreign corporation
is a tax resident.
In response to the comment, the final
regulations provide that the thirdcountry rule generally does not apply if
the EAG has substantial business
activities in the third country compared
to the total business activities of the
EAG. See § 1.7874–9(d)(4)(ii) (providing
an exception to the definition of a
covered foreign acquisition). For this
purpose, the principles of § 1.7874–3
apply, and the determination of whether
there are substantial business activities
is made without regard to the domestic
entity acquisition.
The final regulations also generally
provide that the third-country rule does
not apply if (i) both the foreign
acquiring corporation and the acquired
foreign corporation are created or
organized in, or under the law of, a
foreign country that does not impose
corporate income tax, and (ii) neither
the foreign acquiring corporation nor
the acquired foreign corporation is a tax
resident of any other foreign country.
See § 1.7874–9(d)(4)(iii) (providing an
exception to the definition of a covered
foreign acquisition). In these cases, the
Treasury Department and the IRS have
determined that the migration from one
no-income-tax jurisdiction to another
such jurisdiction is unlikely to be
driven by tax planning, as the countries
would generally be equally favorable
from a tax perspective.
The Treasury Department and the IRS
decline, however, to provide an
additional exception based on a
comparison of treaty benefits. Even if
the withholding rates with respect to
certain categories of income are at least
as high under the U.S. tax treaty with
the third country as compared to the
U.S. tax treaty with the country in
which the acquired foreign corporation
is a tax resident, the use of the third
country may nevertheless be motivated
by tax planning. For example, there
could be tax-related features other than
withholding rates that make the third
country more advantageous; and,
significant administrative difficulties
could arise if the comparison were to
include those features. Moreover, the
third country might have a less
restrictive regime for controlled foreign
corporations, which could facilitate the
use of low- or no-taxed entities to erode
the U.S. tax base following the domestic
entity acquisition. Consistent with the
explanation in Notice 2015–79, the
Treasury Department and the IRS have
PO 00000
Frm 00005
Fmt 4701
Sfmt 4700
32527
concluded that it is appropriate for the
third-country rule to address this
concern.
b. Other Issues
A comment observed that, in a
transaction related to a domestic entity
acquisition, the foreign acquiring
corporation could change its tax
residency by simply changing the
country in which it is considered
managed and controlled. The comment
noted that, in such a case, the foreign
acquiring corporation might not be
viewed as having completed a foreign
acquisition and, as a result, the thirdcountry rule could inappropriately be
circumvented. The Treasury Department
and the IRS agree with this comment
and the final regulations are modified
accordingly. See § 1.7874–9(e)(5).
Finally, a comment recommended
clarifying that the third-country rule
compares only the tax residency of the
foreign acquiring corporation and
acquired foreign corporation, and thus
does not consider the countries in
which the corporations are created or
organized. The Treasury Department
and the IRS have determined that this
is clear under the 2016 regulations;
therefore the text of § 1.7874–9(c)(2) is
unchanged from the corresponding
provision in the 2016 regulations.
4. NOCD Rule
Section 1.7874–10T of the 2016
regulations provides a rule (the NOCD
rule) that, for purposes of determining
the ownership percentage by value,
deems former domestic entity
shareholders or former domestic entity
partners to receive, by reason of holding
stock or an interest in the domestic
entity, an amount of stock of the foreign
acquiring corporation with a fair market
value equal to the aggregate value of
NOCDs made by the domestic entity
(such stock, ‘‘NOCD stock’’). The rule
provides mechanics for determining
NOCDs.
The final regulations include seven
clarifications or modifications to the
NOCD rule, in response to comments.
First, the regulations clarify and refine
the definition of distribution. The 2016
regulations define the term broadly but
provide several exclusions, including,
in general, an exclusion for a
distribution that occurs pursuant to an
asset reorganization. The final
regulations clarify that the exclusion
does not apply to a distribution to
which section 355 applies, regardless of
whether in connection with a
reorganization described in section
368(a)(1)(D). See § 1.7874–10(k)(1)(i)(C).
That is, a distribution of stock of a
controlled corporation pursuant to a
E:\FR\FM\12JYR2.SGM
12JYR2
amozie on DSK3GDR082PROD with RULES2
32528
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
divisive reorganization is a distribution
for purposes of the NOCD rule, but a
distribution of an acquiring
corporation’s stock pursuant to an
acquisitive reorganization (such as a
merger described in section
368(a)(1)(A)) is not a distribution for
this purpose. In addition, the final
regulations refine the definition of
distribution such that, in the case of a
partnership, a distribution does not
include a deemed distribution pursuant
to section 752(b) to the extent that the
transaction giving rise to the deemed
distribution does not reduce the
partnership’s value.
Second, the final regulations modify a
special rule that applies when a
domestic corporation (distributing
corporation) distributes stock of another
domestic corporation (controlled
corporation) pursuant to a transaction
described in section 355 and,
immediately before the distribution, the
fair market value of the controlled
corporation represents more than 50
percent of the fair market value of the
stock of the distributing corporation.
When the special rule applies, the
controlled corporation is deemed for
purposes of the NOCD rule to have
distributed the stock of the distributing
corporation. The final regulations
modify the condition for the rule to
apply: As modified, the rule considers
the fair market value of the stock of the
controlled corporation owned by the
distributing corporation and any related
person. See § 1.7874–10(g). Accordingly,
the special rule would not apply, for
example, if the fair market value of the
stock of the distributing corporation
were $100x (not taking into account the
fair market value of the stock of the
controlled corporation), the fair market
value of the stock of the controlled
corporation were $110x, and $100x or
less of the stock of the controlled
corporation were owned by the
distributing corporation (with the
balance owned by a person unrelated to
the distributing corporation).
Third, the final regulations clarify
how the NOCD rule relates to the
expanded affiliated group rules of
section 7874(c)(2)(A) and § 1.7874–1
(the EAG rules). The preamble to the
2016 regulations indicates that the
NOCD rule applies only for purposes of
determining the ownership percentage
by value and that it does not apply for
any other purpose, including the loss of
control exception of § 1.7874–1(c)(3)
(one of the EAG rules). The final
regulations clarify that NOCD stock is
not taken into account for purposes of
the EAG rules. See § 1.7874–1(d)(2)
(providing that NOCD stock is not taken
into account for purposes of
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
determining the members of an EAG or
whether a domestic entity acquisition
qualifies for the internal group
restructuring or loss of control
exception). As a result, the
determination of the EAG and whether
a domestic entity acquisition qualifies
for the internal group restructuring or
loss of control exception is based on the
stock of the foreign acquiring
corporation that actually exists. See also
Part I.B of this Summary of Comments
and Explanation of Revisions section
(discussing the interaction of the stock
exclusion rules and the EAG rules).
Fourth, the final regulations provide
guidance regarding how to allocate
NOCD stock among the former domestic
entity shareholders. Because the NOCD
rule provides that NOCD stock is treated
as stock described in section
7874(a)(2)(B)(ii), in most cases the
NOCD stock will simply be included in
both the numerator and denominator of
the ownership fraction and, as a result,
it will be irrelevant which former
domestic entity shareholders or former
domestic entity partners are considered
to hold such stock. However, in certain
cases involving the application of the
EAG rules, the allocation of the NOCD
stock among the former domestic entity
shareholders or former domestic entity
partners may affect whether the stock is
included in the numerator and
denominator of the ownership fraction.
For example, assume two foreign
corporations, F1 and F2, each own 50%
of the stock of a domestic corporation,
DT. During year y, DT makes a $10x
distribution to each of F1 and F2 and,
thereafter, distributes $40x to F2 in
redemption of all of F2’s stock of DT.
Then, on December 31 of year y, and in
a transaction related to the redemption,
F1 contributes all of the stock of DT to
a newly-formed foreign corporation, FA,
in exchange for all the stock of FA (DT
acquisition). Assume that there are $36x
of NOCDs with respect to the look-back
year ending on December 31 of year y
and that there are no NOCDs with
respect to the other look-back years. An
EAG exists (for this purpose, NOCD
stock is not taken into account),
composed of F1, FA, and DT, but the DT
acquisition does not qualify for the
internal group restructuring exception
because F1 did not own 80 percent or
more of the stock of DT before the DT
acquisition and any related transaction.
See § 1.7874–1(c)(2)(i) and (g).
Moreover, the acquisition does not
qualify for the loss of control exception
because after the acquisition F1 (a
former domestic entity shareholder)
holds more than 50 percent of the stock
of a member of the EAG. See § 1.7874–
1(c)(3). Thus, all FA stock held by F1,
PO 00000
Frm 00006
Fmt 4701
Sfmt 4700
including any NOCD stock considered
held by F1, is excluded from the
numerator and denominator of the
ownership fraction. See § 1.7874–1(b).
Any NOCD stock considered held by F2,
however, is included in both the
numerator and the denominator of the
ownership fraction.
To address this allocation issue, the
final regulations provide that NOCD
stock is allocated among the former
domestic entity shareholders or former
domestic entity partners based on the
amount of NOCDs that the persons are
treated as receiving. See § 1.7874–10(h).
For this purpose, and for ease of
administration, the regulations provide
that a pro rata portion of each
distribution during a look-back year is
treated as comprising an NOCD with
respect to the look-back year, based on
the amount of NOCDs during the year
relative to the total amount of
distributions during the year. Thus, in
the example above, because 60 percent
of the distributions during year y
constituted NOCDs ($36x/$60x), 60
percent of each of the $10x dividend
distributions to F1 and F2, as well as 60
percent of the $40x distribution to F2 as
part of the redemption, are treated as
comprising the NOCD. Accordingly,
under § 1.7874–10(h), F1 and F2 are
treated as having received $6x and $30x
of distributions comprising the NOCD,
respectively. F1 and F2 are therefore
treated as holding $6x and $30x of
NOCD stock, respectively. As a result,
the ownership percentage (by value)
with respect to the DT acquisition is 100
($30x/$30x).
Fifth, the final regulations provide
guidance when multiple foreign
acquiring corporations complete a
domestic entity acquisition, as to which
corporation’s or corporations’ stock the
NOCD stock is considered comprised. In
general, the final regulations provide
that the NOCD stock is considered
comprised, on a pro rata basis, of stock
of each foreign acquiring corporation
that directly or indirectly provided
consideration in the domestic entity
acquisition. For this purpose,
consideration is not considered directly
provided by a foreign acquiring
corporation if it was indirectly provided
by another foreign acquiring
corporation. See § 1.7874–10(i). For
example, assume FP, a foreign
corporation, owns all the stock of FS,
also a foreign corporation, and FS
acquires all the stock of DT, a domestic
corporation, solely in exchange for FP
stock. Pursuant to § 1.7874–2(c)(1)(i)
and (iii), both FS and FP are treated as
having completed a domestic entity
acquisition. Under § 1.7874–10(i),
because FP indirectly provided 100
E:\FR\FM\12JYR2.SGM
12JYR2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
amozie on DSK3GDR082PROD with RULES2
percent of the consideration in the
domestic entity acquisition, stock of FP
is considered to comprise 100 percent of
any NOCD stock.
Sixth, the final regulations address
how the NOCD rule applies when,
pursuant to § 1.7874–2(e), two or more
domestic entities are treated as a single
domestic entity. Specifically, the
regulations provide that the NOCD rule
is initially applied to each domestic
entity on a separate basis, and then the
amount of NOCDs treated as made by
the single domestic entity is the sum of
the separately computed NOCDs made
by each domestic entity. See § 1.7874–
10(j).
Finally, the final regulations confirm
that NOCD stock is included in both the
numerator and the denominator of the
ownership fraction, except to the extent
that the stock is treated as held by a
member of the EAG and excluded from
the numerator or both the numerator
and denominator, as applicable, under
the EAG rules. See § 1.7874–1(d)(2).
5. De Minimis Exceptions
Certain stock exclusion rules under
section 7874 contain a de minimis
exception. See § 1.7874–4(b)
(disqualified stock rule); § 1.7874–7T(b)
(passive assets rule); and 1.7874–10T(b)
(NOCD rule). As explained in the
preamble to TD 9812 (final regulations
regarding the disqualified stock rule),
together the de minimis exceptions
generally prevent one or more of the
disqualified stock rule, the passive
assets rule, and NOCD rule from causing
section 7874 to apply to a domestic
entity acquisition that, given minimal
actual ownership continuity, largely
resembles a cash purchase by the
foreign acquiring corporation of the
stock of (or interests in) the domestic
entity.
Each of the de minimis exceptions is
satisfied when two requirements are
met. First, the ownership percentage—
determined without regard to the
application of the disqualified stock
rule, the passive assets rule, and the
NOCD rule—must be less than five (by
vote and value). Second, after the
domestic entity acquisition and all
related transactions, each former
domestic entity shareholder or former
domestic entity partner, as applicable,
must own (applying the attribution rules
of section 318(a) with the modifications
described in section 304(c)(3)(B)) less
than five percent (by vote and value) of
the stock of (or a partnership interest in)
each member of the EAG. Originally,
this second requirement considered the
ownership by the former domestic
entity shareholders or former domestic
entity partners collectively. However, in
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
response to a comment, TD 9812
modified the requirement so that it
considers only the ownership by the
former domestic entity shareholders or
former domestic entity partners
individually.
Similar to a comment submitted with
respect to the disqualified stock rule
and addressed in TD 9812, a comment
recommended additional modifications
to the second requirement. The
comment stated that, particularly in
cases involving a publicly-traded
domestic entity or a complex ownership
structure, it could be difficult or
burdensome to identify each former
domestic entity shareholder or former
domestic entity partner (including a de
minimis former domestic entity
shareholder or former domestic entity
partner), as applicable, and then
determine (taking into account the
applicable attribution rules) the person’s
ownership of the foreign acquiring
corporation and each member of the
EAG.
The Treasury Department and the IRS
agree that it is appropriate to modify the
second requirement in order to make the
de minimis exceptions easier for
taxpayers to comply with and for the
IRS to administer. Accordingly, under
the final regulations, only former
domestic entity shareholders or former
domestic entity partners, as applicable,
that own (taking into account the
applicable attribution rules) at least five
percent of the stock of (or a partnership
interest in) the domestic entity need be
identified. If none of those former
domestic entity shareholders or former
domestic entity partners owns (taking
into account the applicable attribution
rules) at least five percent of the foreign
acquiring corporation or a member of
the EAG, then the second requirement is
satisfied.
B. Coordination of Rules Affecting the
Ownership Fraction With the EAG Rules
Existing regulations under section
7874 coordinate the application of (i)
rules that disregard certain stock of the
foreign acquiring corporation for
purposes of determining the ownership
fraction, with (ii) the EAG rules. See
§ 1.7874–4(h) (regarding the interaction
of the EAG rules with the rule that
disregards disqualified stock) and
§ 1.7874–7T(e) (regarding the interaction
of the EAG rules with the rule that
disregards certain stock attributable to
passive assets). The final regulations
broaden this coordination to other rules
that similarly disregard certain stock of
the foreign acquiring corporation for
purposes of determining the ownership
fraction—namely, the serial acquisition
rule and the third-country rule, as well
PO 00000
Frm 00007
Fmt 4701
Sfmt 4700
32529
as section 7874(c)(4) generally, the
application of which in certain cases
would similarly disregard stock of the
foreign acquiring corporation. The final
regulations provide a general
coordination rule in § 1.7874–1(d)(1) to
coordinate the stock exclusion rules and
the EAG rules, and remove provisions of
the existing regulations that are
duplicative of this rule. See § 1.7874–
4(i), Example 8 and Example 9 for
illustrations involving the general
coordination rule.
C. The Substantial Business Activities
Test
Section 1.7874–3T(b)(4) of the 2016
regulations provides that, for an EAG to
be considered to have substantial
business activities in the relevant
foreign country, the foreign acquiring
corporation must be subject to tax as a
resident of the ‘‘relevant foreign
country’’ (the tax residence
requirement). The relevant foreign
county means the foreign country in
which, or under the law of which, the
foreign acquiring corporation was
created or organized (country of
organization). The tax residence
requirement is in addition to the three
qualitative requirements relating to the
percentage of employees, assets, and
income in the relevant foreign country.
See § 1.7874–3(b)(1) through (3).
One comment made several
recommendations with respect to the
substantial business activities test. First,
the comment recommended providing
standards for determining when the tax
residence requirement is considered
satisfied, including in cases in which
the relevant foreign country is a noincome-tax jurisdiction. The comment
suggested that the standards be based on
the definition of residence under the
United States’ income tax treaties with
foreign countries. It further suggested
providing guidance on when a foreign
acquiring corporation is considered to
be fiscally-transparent in, and thus not
a tax resident of, the relevant foreign
country.
The Treasury Department and the IRS
generally agree with these
recommendations. The final regulations
thus define a tax resident of a country
as a body corporate liable to tax under
the laws of the country as a resident.
See § 1.7874–3(d)(11). The Treasury
Department and the IRS have concluded
that defining tax resident in this manner
obviates the need to provide specific
guidance on when a foreign acquiring
corporation is treated as fiscallytransparent under the laws of the
relevant foreign country. In addition,
the Treasury Department and the IRS
have determined that when the relevant
E:\FR\FM\12JYR2.SGM
12JYR2
32530
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
foreign country is a country that does
not impose corporate income tax, the
tax residency requirement should not
apply. See § 1.7874–3(b)(4) (second
sentence).
The comment also suggested that the
Treasury Department and the IRS
consider changing the definition of
relevant foreign country from the
country of organization to the country in
which the foreign acquiring corporation
is a tax resident. Under this approach,
the substantial business activities test
would look to the percentage of the
EAG’s employees, assets, and income in
the foreign country where the foreign
acquiring corporation is a tax resident,
without regard to the corporation’s
country of organization. The Treasury
Department and the IRS have concluded
that section 7874(a)(2)(B)(iii) requires
substantial business activities in the
country of organization, with tax
residency in that country serving as a
necessary component for establishing
substantial business activities.
Accordingly, the final regulations do not
adopt this comment.
II. Rules Addressing Certain PostInversion Tax Avoidance Transactions
As described in the preamble to the
2016 regulations, as well as in Notice
2015–79 and Notice 2014–52 (2014–42
I.R.B. 712), certain inversion
transactions are motivated in substantial
part by the ability to engage in tax
avoidance transactions after the
inversion transaction that would not be
possible in the absence of the inversion
transaction. To reduce the tax benefits
of certain post-inversion tax avoidance
transactions, the 2016 regulations
provided rules under sections
304(b)(5)(B), 367, 956(e), 7701(l), and
7874. The comments and modifications
with respect to these rules are discussed
in this Part II.
amozie on DSK3GDR082PROD with RULES2
A. United States Property Rule
Section 1.956–2T(a)(4)(i) of the 2016
regulations provides that, generally, for
purposes of section 956 and § 1.956–
2(a), United States property includes an
obligation of a foreign person and stock
of a foreign corporation if (i) the
obligation or stock is held by a CFC that
is an expatriated foreign subsidiary
(EFS), (ii) the foreign person or foreign
corporation is a non-CFC foreign related
person, and (iii) the obligation or stock
was acquired either during the
applicable period or in a transaction
related to the inversion transaction.
Similarly, § 1.956–2T(c)(5) extends the
pledge and guarantee rule in § 1.956–
2(c) to apply to obligations of non-CFC
foreign related persons.
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
Comments requested that the rules in
§ 1.956–2T of the 2016 regulations (the
United States property rule) be extended
to apply to all foreign-parented groups,
and not only those that are foreignparented as a result of an inversion
transaction. The Treasury Department
and the IRS continue to study those
comments, but do not adopt them in
these final regulations.
B. Nomenclature and Other Changes
For clarity, the final regulations use
the term ‘‘non-EFS foreign related
person’’ instead of the term ‘‘non-CFC
foreign related person.’’
In addition, the final regulations
modify various examples involving
foreign corporations that were not
controlled foreign corporations before
the effective date of section 14214 of the
Act (amending section 958(b) so as to
provide ‘‘downward attribution’’ of
stock from foreign persons to United
States persons). In general, the final
regulations now refer to those foreign
corporations as CFCs, as appropriate,
and otherwise retain the regulations
under sections 367(b), 956, and 7701(l).
Although the recent amendment to
section 958(b)(4) makes it more difficult
for post-inversion planning to cause an
EFS to cease to be a CFC, such planning
could still substantially dilute a United
States shareholder’s interest in the EFS.
Accordingly, the recharacterization
rules under § 1.7701(l)–4T concerning
post-inversion dilution are finalized.
The Treasury Department and the IRS
decline at this time to extend the
application of § 1.7701(l)–4 to all
foreign-parented groups, in part,
because other provisions may address
such planning, including the fast-pay
arrangement rules under § 1.7701(l)–3.
Further, for purposes of determining
whether an entity is an EFS, the final
regulations provide that downward
attribution from a non-United States
person to a United States person does
not apply. Absent this modification, in
certain cases the term EFS would be
over-inclusive and, as a result, the term
non-EFS foreign related person would
be under-inclusive; this could result in
the regulations under sections 367(b),
956, and 7701(l) inappropriately not
applying in certain cases. Similarly, the
final regulations provide that, when
determining if an entity is a CFC for
purposes of § 1.304–7, downward
attribution from a non-United States
person to a United States person does
not apply. The Treasury Department
and the IRS have determined that these
modifications—the effect of which is
that the determination of whether an
entity is an EFS, as well as whether an
entity is a CFC for purposes of § 1.304–
PO 00000
Frm 00008
Fmt 4701
Sfmt 4700
7, is the same under pre- and post-Act
law—are necessary to carry out the
purposes of the provisions.
III. Miscellaneous Rules
A. New Definitions Section in Section
7874 Regulations
Section 1.7874–12T of the 2016
regulations provides definitions for
certain terms commonly used in
§§ 1.367(b)–4, 1.956–2, 1.7701(l)–4, and
certain of the section 7874 regulations.
These final regulations adopt this
definitions section. They also update
other portions of the section 7874
regulations to conform those sections
with the nomenclature used in
§ 1.7874–12.
B. Rules Under Section 956 Relating to
the Definition of Obligation
Section 1.956–2T(d)(2)(iv) of the 2016
regulations provides the short-term
obligation exception described in Notice
88–108, 1988–2 C.B. 446, and § 1.956–
2T(d)(2)(v) provides the alternative
short-term obligation exception
described in Notice 2008–91, 2008–43
I.R.B. 1001, as modified by Notice 2009–
10, 2009–5 I.R.B. 419, and Notice 2010–
12, 2010–4 I.R.B. 326. No comments
were received on these rules;
accordingly, § 1.956–2(d)(2)(iv) is
adopted as proposed. However, these
final regulations do not contain the rule
contained in proposed § 1.956–
2(d)(2)(v), which applied only for
certain taxable years beginning before
2011.
C. Applicability Dates
Section 7805(b)(1)(B) and (C) provide
that a final regulation may apply to a
taxable period ending on or after the
date on which a proposed or temporary
regulation to which the final regulation
relates was filed with the Federal
Register or the date on which a notice
substantially describing the expected
contents of the regulation was issued to
the public. The applicability dates of the
rules in the final regulations are
generally the same as the applicability
dates of the rules as set forth in the 2016
regulations, which were issued as
temporary regulations to address
transactions that are structured to avoid
the purposes of sections 7874 and 367
and certain post-inversion tax avoidance
transactions. Accordingly, the
applicability date of some provisions in
the final regulations corresponds to the
date the 2016 regulations were filed
with the Federal Register, and the
applicability dates of other provisions in
the final regulations predate the filing of
the 2016 regulations and correspond to
the issuance of Notice 2014–52, 2014–
E:\FR\FM\12JYR2.SGM
12JYR2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
42 I.R.B. 712, which was issued on
September 22, 2014, or Notice 2015–79,
2015–49 I.R.B. 775, which was issued
on November 19, 2015.
However, differences between the
final regulations and the 2016
regulations generally apply on a
prospective basis, with an option for
taxpayers to apply the differences
retroactively. Moreover, because
taxpayers may have relied on the 2016
regulations, the modifications to the
final regulations generally apply
prospectively. However, domestic entity
acquisitions completed before July 12,
2018 continue to be subject to those
rules as set forth in the 2016 regulations
(but generally with an option for
taxpayers to apply the differences
retroactively).
Statement of Availability of IRS
Documents
IRS Revenue Procedures, Revenue
Rulings, notices, and other guidance
cited in this document are published in
the Internal Revenue Bulletin (or
Cumulative Bulletin) and are available
from the Superintendent of Documents,
U.S. Government Publishing Office,
Washington, DC 20402, or by visiting
the IRS website at http://www.irs.gov.
Special Analyses
Regulatory Planning and Review—
Economic Analysis
amozie on DSK3GDR082PROD with RULES2
Executive Orders 13563 and 12866
direct agencies to assess costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). Executive Order 13563
emphasizes the importance of
quantifying both costs and benefits, of
reducing costs, of harmonizing rules,
and of promoting flexibility. This rule
has been designated a ‘‘significant
regulatory action’’ although not
economically significant, under section
3(f) of Executive Order 12866.
Accordingly, the rule has been reviewed
by the Office of Management and
Budget. This final rule is considered an
E.O. 13771 deregulatory action. For
more detail on the economic analysis,
please refer to the analysis below.
Need for the Final Regulations
These final regulations refine and
clarify certain aspects of the proposed
and temporary regulations published in
2016 (collectively referred to as the 2016
regulations, as explained in the
preamble). The changes finalized in this
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
set of regulations help to ensure that the
regulations do not impact mergers that
provide market benefits independent of
tax avoidance; for example, those that
increase efficiencies within the
corporation or provide other growth
opportunities or that contribute to social
welfare. These regulations still maintain
the thresholds and substantiation
requirements of the 2016 regulations
aimed at discouraging tax-motivated
inversions.
Background
Cross-border mergers can make the
U.S. economy stronger by enabling U.S.
companies to invest overseas and
encouraging foreign investment to flow
into the United States. In order for these
benefits to be realized, these
transactions should be driven by
underlying economic considerations
rather than by a desire to avoid U.S.
taxes. One way for a U.S.-based
multinational to avoid or reduce U.S.
tax is for the company to expatriate by
changing its tax residence from the U.S.
to another country through an inversion
transaction. Though there are some
limitations, the transaction allows the
inverted company to reduce future taxes
on U.S.-source earnings, for example, by
deducting interest paid on loans from
the new foreign parent. In addition to
potentially eroding the U.S. tax base,
inversions may impose other costs on
the U.S. economy. For instance, as a
result of the inversion, a company’s
headquarters may move overseas. This
loss of a U.S. corporate identity or
location of headquarters for the
company may reduce employment in
the United States.
To limit inversions that are taxmotivated, section 7874 (enacted in
2004), in general, targets transactions in
which a foreign corporation acquires a
domestic corporation and, immediately
after the transaction, the former
shareholders of the domestic
corporation make up a significant
portion of the shareholders of the
acquiring foreign corporation. If the
former shareholders of the domestic
corporation hold 80 percent or more of
the stock of the foreign corporation after
the transaction, the foreign corporation
is treated as a domestic corporation for
U.S. tax purposes. If the former
shareholders hold at least 60 percent but
less than 80 percent of the stock of the
foreign acquiring corporation after the
transaction, then the transaction is
respected but use of tax attributes such
as net operating losses and foreign tax
credits is limited. Transactions where
the former shareholders of the domestic
corporation hold less than 60 percent of
PO 00000
Frm 00009
Fmt 4701
Sfmt 4700
32531
the stock of the foreign acquiring
corporation are generally not limited.
Since the enactment of section 7874,
multiple sets of regulations have been
issued interpreting the statute and
restricting the ability of domestic
corporations to undertake an inversion
transaction.
The Tax Cuts and Jobs Act of 2017
(TCJA) reduced, but did not completely
eliminate, the tax-motivated incentives
to invert. Particular TCJA provisions
that reduced those incentives include
the reduction in the maximum U.S.
statutory corporate tax rate from 35
percent to 21 percent, the exemption
from U.S. tax of dividends received
from certain foreign corporations, the
strengthening of Internal Revenue Code
Section 163(j) on interest stripping, and
the adoption of four punitive
disincentives for new inversions in the
60 percent to 80 percent range. While
the TCJA also included provisions that
may increase incentives to invert,
including the tax imposed on Global
Intangible Low Tax Income (GILTI) of
foreign subsidiaries, overall taxmotivated incentives to invert were
reduced.
The following qualitative analysis
provides further detail regarding the
anticipated impacts of this rulemaking.
Baseline
The 2016 regulations serve as the noaction baseline for our tax regulatory
review. The 2016 regulations, which
were issued pursuant to authority under
sections 7874 and 7805 (as well as other
sections), restrict the ability of U.S.
companies to invert and reduce the
incentives to invert.
Alternatives
As an alternative to these final
regulations, Treasury considered
retaining the 2016 regulations without
amendment. Given public comment and
the agency’s desire to provide
transparency and clarity to the public,
Treasury decided against this approach
and moved forward with the final
regulations as drafted.
Anticipated Impacts
These final regulations maintain the
thresholds and substantiation
requirements of the 2016 regulations
aimed at discouraging tax-motivated
inversions. In response to public
comments, the final regulations make
certain limited changes to the 2016
regulations that are designed to improve
clarity, provide additional exceptions to
their application, and reduce
unnecessary burdens on taxpayers,
including by providing guidance on
how to apply particular mechanical
E:\FR\FM\12JYR2.SGM
12JYR2
32532
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
rules. Specifically, clarifying changes
were made to certain of the stock
exclusion rules, and in particular, the
passive assets rule, the serial acquisition
rule, and the third country rule, as well
as to the substantial business activities
rule. Additional exceptions were added
to the serial acquisition rule and the
third country rule that narrowed their
scope on the margins. Finally, changes
to the passive assets rule, the NOCD
rule, and the rules coordinating the
application of the stock exclusion rules
with the expanded affiliated group
(EAG) rules were made to reduce
complexity and ambiguity associated
with these provisions.
Given the limited nature of the
changes made by these final regulations
relative to the no-action baseline,
Treasury estimates that collectively,
these final regulations are not
economically significant under
Executive Order 12866.
Revenue Impacts
Due to the narrow scope of
clarifications and refinements in the
final regulations and the small number
of taxpayers subject to these regulations,
Treasury does not anticipate any
meaningful change to revenues.
amozie on DSK3GDR082PROD with RULES2
Anticipated Benefits
At the margin, the final regulations
may increase the incentive for crossborder mergers that are economically
beneficial and not tax-motivated. The
regulations are designed to help ensure
that the regulations do not impact
mergers that provide market benefits.
Economically beneficial mergers make
the U.S. economy stronger by enabling
U.S. companies to invest overseas and
encouraging foreign investment to flow
into the U.S.
Anticipated Costs
The changes made by the final
regulations are designed generally to
reduce unnecessary burdens on
taxpayers, an action that may lead to
increased merger activity, and some of
these additional mergers may
potentially be tax-motivated at least in
part. Due to the narrow scope of these
changes, however, Treasury anticipates
that any increase in tax-motivated crossborder merger activity will be relatively
small relative to the no-action baseline
and will not result in any meaningful
adverse effects on economic activity
relative to the no-action baseline. In
particular, additional exceptions added
to the serial acquisition rule and the
third country rule are designed to
narrow their role in defining crossborder mergers that are subject to
targeted tax treatment.
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
Effects on Compliance Costs
The final regulations narrow the
scope of regulated activities and reduce
compliance costs relative to the 2016
regulations. The regulations also aim to
reduce required paperwork burden,
complexity, and ambiguities that may
unintentionally discourage legitimate
merger activity. In particular, changes
that reduce complexity and ambiguity
were made to the passive assets rule, the
NOCD rule, and the rules coordinating
the application of the stock exclusion
rules with the expanded affiliated group
(EAG) rules. Clarifying changes were
made to the passive assets rule, the
serial acquisition rule, the third country
rule, and the substantial business
activities rule.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5
U.S.C. chapter 6) does not apply
because the regulations do not impose a
collection of information on small
entities. Pursuant to section 7805(f) of
the Internal Revenue Code, the notice of
proposed rulemaking preceding these
regulations was submitted to the Chief
Counsel for Advocacy of the Small
Business Administration for comment
on its impact on small business. No
comments were received.
Drafting Information
The principal authors of these
regulations are Rose E. Jenkins and
Shane M. McCarrick of the Office of
Associate Chief Counsel (International).
However, other personnel from the
Treasury Department and the IRS
participated in their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
Adoption of the Amendments to the
Regulations
Accordingly, 26 CFR part 1 is
amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 is amended by removing the
entries for §§ 1.304–7T, 1.367(b)–4T,
1.956–2T, 1.7701(l)–4T, 1.7874–2T,
1.7874–3T, 1.7874–6T, 1.7874–7T,
1.7874–8T, 1.7874–9T, 1.7874–10T,
1.7874–11T, 1.7874–12T and adding
entries for §§ 1.304–7, 1.7701(l)–4,
1.7874–2, 1.7874–6, 1.7874–7, 1.7874–8,
1.7874–9, 1.7874–10, 1.7874–11, and
1.7874–12 in numerical order and
revising the entry for § 1.367(b)–4 to
read in part as follows:
■
PO 00000
Authority: 26 U.S.C. 7805 * * *
Frm 00010
Fmt 4701
Sfmt 4700
Section 1.304–7 also issued under 26
U.S.C. 304(b)(5)(C).
*
*
*
*
*
Section 1.367(b)–4 also issued under 26
U.S.C. 367(a) and (b) and 954(c)(6)(A).
*
*
*
*
*
Section 1.7701(l)-4 also issued under 26
U.S.C. 7701(l) and 954(c)(6)(A).
*
*
*
*
*
Section 1.7874–2 also issued under 26
U.S.C. 7874(c)(6) and (g).
*
*
*
*
*
Section 1.7874–6 also issued under 26
U.S.C. 7874(c)(6) and (g).
Section 1.7874–7 also issued under 26
U.S.C. 7874(c)(6) and (g).
Section 1.7874–8 also issued under 26
U.S.C. 7874(c)(6) and (g).
Section 1.7874–9 also issued under 26
U.S.C. 7874(c)(6) and (g).
Section 1.7874–10 also issued under 26
U.S.C. 7874(c)(4) and (g).
Section 1.7874–11 also issued under 26
U.S.C. 7874(g).
Section 1.7874–12 also issued under 26
U.S.C. 7874(g).
*
*
*
*
*
Par. 2. Section 1.304–7 is added to
read as follows:
■
§ 1.304–7 Certain acquisitions by foreign
acquiring corporations.
(a) Scope. This section provides rules
regarding the application of section
304(b)(5)(B) to an acquisition of stock
described in section 304 by an acquiring
corporation that is foreign (foreign
acquiring corporation). Paragraph (b) of
this section provides the rule for
determining which earnings and profits
are taken into account for purposes of
applying section 304(b)(5)(B). Paragraph
(c) of this section provides rules
addressing the use of a partnership,
option (or similar interest), or other
arrangement. Paragraph (d) of this
section provides examples that illustrate
the rules of this section. Paragraph (e) of
this section provides the applicability
date.
(b) Earnings and profits taken into
account. For purposes of applying
section 304(b)(5)(B), only the earnings
and profits of the foreign acquiring
corporation are taken into account in
determining whether more than 50
percent of the dividends arising from
the acquisition (determined without
regard to section 304(b)(5)(B)) would
neither be subject to tax under chapter
1 of subtitle A of the Internal Revenue
Code for the taxable year in which the
dividends arise (subject to tax) nor be
includible in the earnings and profits of
a controlled foreign corporation
(includible by a controlled foreign
corporation). For purposes of this
section, a controlled foreign corporation
has the meaning provided in section 957
and without regard to section 953(c),
E:\FR\FM\12JYR2.SGM
12JYR2
amozie on DSK3GDR082PROD with RULES2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
determined without applying
subparagraphs (A), (B), and (C) of
section 318(a)(3) so as to consider a
United States person as owning stock
which is owned by a person who is not
a United States person.
(c) Use of a partnership, option (or
similar interest), or other arrangement.
If a partnership, option (or similar
interest), or other arrangement, is used
with a principal purpose of avoiding the
application of this section (for example,
to treat a transferor as a controlled
foreign corporation), then the
partnership, option (or similar interest),
or other arrangement will be
disregarded for purposes of applying
this section.
(d) Examples. The following examples
illustrate the rules of this section. For
purposes of the examples, assume the
following facts in addition to the facts
stated in the examples:
(1) FA is a foreign corporation that is
not a controlled foreign corporation;
(2) FA wholly owns DT, a domestic
corporation;
(3) DT wholly owns FS1, a controlled
foreign corporation; and
(4) No portion of a dividend from FS1
would be treated as from sources within
the United States under section 861.
recognition agreement that complies with the
requirements set forth in section 4.01 of
Notice 2012–15, 2012–9 I.R.B 424, with
respect to the portion (60 percent) of the FS2
stock that DT is deemed to transfer to FS1 in
an exchange described in section 367(a)(1).
See § 1.367(a)–1T(c)(3)(i)(A).
(ii) Analysis. Under section 304(a)(1), PRS
and FS1 are treated as if PRS transferred its
FS2 stock to FS1 in an exchange described
in section 351(a) solely for FS1 stock, and, in
turn, FS1 redeemed such FS1 stock in
exchange for $100x of cash. The redemption
of the FS1 stock is treated as a distribution
to which section 301 applies pursuant to
section 302(d). Without regard to the
application of section 304(b)(5)(B), more than
50 percent of a dividend arising from the
acquisition, taking into account only the
earnings and profits of FS1 pursuant to
paragraph (b) of this section, would be
subject to tax. In particular, 60 percent of a
dividend from FS1 would be included in
DT’s distributive share of PRS’s partnership
income and therefore would be subject to tax.
Accordingly, section 304(b)(5)(B) does not
apply, and the entire distribution of $100x is
treated under section 301(c)(1) as a dividend
out of the earnings and profits of FS1.
Example 1—(i) Facts. DT has earnings and
profits of $51x, and FS1 has earnings and
profits of $49x. FA transfers DT stock with
a fair market value of $100x to FS1 in
exchange for $100x of cash.
(ii) Analysis. Under section 304(a)(2), the
$100x of cash is treated as a distribution in
redemption of the stock of DT. The
redemption of the DT stock is treated as a
distribution to which section 301 applies
pursuant to section 302(d), which ordinarily
would be sourced first from FS1 under
section 304(b)(2)(A). Without regard to the
application of section 304(b)(5)(B), more than
50 percent of the dividend arising from the
acquisition, taking into account only the
earnings and profits of FS1 pursuant to
paragraph (b) of this section, would neither
be subject to tax nor includible by a
controlled foreign corporation. In particular,
no portion of a dividend from FS1 would be
subject to tax or includible by a controlled
foreign corporation. Accordingly, section
304(b)(5)(B) and paragraph (b) of this section
apply to the transaction, and no portion of
the distribution of $100x is treated under
section 301(c)(1) as a dividend out of the
earnings and profits of FS1. Furthermore, the
$100x of cash is treated as a dividend to the
extent of the earnings and profits of DT
($51x).
Example 2—(i) Facts. FA and DT own 40
percent and 60 percent, respectively, of the
capital and profits interests of PRS, a foreign
partnership. PRS wholly owns FS2, a
controlled foreign corporation. The FS2 stock
has a fair market value of $100x. FS1 has
earnings and profits of $150x. PRS transfers
all of its FS2 stock to FS1 in exchange for
$100x of cash. DT enters into a gain
■
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
(e) Applicability date. This section
applies to acquisitions that are
completed on or after September 22,
2014.
§ 1.304–7T
[Removed]
Par. 3. Section 1.304–7T is removed.
■ Par. 4. Section 1.367(a)–3 is amended
by revising paragraphs (c)(3)(iii)(C) and
(c)(11)(ii) to read as follows:
§ 1.367(a)–3 Treatment of transfers of
stock or securities to foreign corporations.
*
*
*
*
*
(c) * * *
(3) * * *
(iii) * * *
(C) Special rule for U.S. target
company value. For purposes of
§ 1.367(a)–3(c)(3)(iii)(A), the fair market
value of the U.S. target company
includes the aggregate amount of nonordinary course distributions (NOCDs)
made by the U.S. target company. To
calculate the aggregate value of NOCDs,
the principles of § 1.7874–10, including
the rule regarding predecessors in
§ 1.7874–10(e) and the rule regarding a
deemed distribution of stock in certain
cases in § 1.7874–10(g), apply. However,
this paragraph (c)(3)(iii)(C) does not
apply if the principles of the de minimis
exception in § 1.7874–10(d) are
satisfied.
*
*
*
*
*
(11) * * *
(ii) Applicability date of certain
provisions of this paragraph (c). The
first and second sentence of paragraph
(c)(3)(iii)(C) of this section apply to
transfers completed on or after
September 22, 2014. The third sentence
PO 00000
Frm 00011
Fmt 4701
Sfmt 4700
32533
of paragraph (c)(3)(iii)(C) of this section
applies to transfers completed on or
after November 19, 2015. Taxpayers
may, however, elect to apply the third
sentence of paragraph (c)(3)(iii)(C) of
this section to transfers completed on or
after September 22, 2014, and before
November 19, 2015.
*
*
*
*
*
§ 1.367(a)–3T
[Removed]
Par. 5. Section 1.367(a)–3T is
removed.
■ Par. 6. Section 1.367(b)–4 is amended
by revising paragraph (a), paragraph (b)
introductory text, and paragraphs
(b)(1)(i)(C), (d)(1), (e), (f), (g), and (h) to
read as follows:
■
§ 1.367(b)–4 Acquisition of foreign
corporate stock or assets by a foreign
corporation in certain nonrecognition
transactions.
(a) Scope. This section applies to
certain acquisitions by a foreign
corporation of the stock or assets of a
foreign corporation in an exchange
described in section 351 or in a
reorganization described in section
368(a)(1). Paragraph (b) of this section
provides a rule regarding when an
exchanging shareholder is required to
include in income as a deemed
dividend the section 1248 amount
attributable to the stock that it
exchanges. Paragraph (c) of this section
provides a rule excluding deemed
dividends from foreign personal holding
company income. Paragraph (d) of this
section provides rules for subsequent
sales or exchanges. Paragraphs (e) and
(f) of this section provide rules
regarding certain exchanges following
inversion transactions. Paragraph (g) of
this section provides definitions and
special rules, including special rules
regarding triangular reorganizations and
recapitalizations. Paragraph (h) of this
section provides the applicability dates
for certain paragraphs of this section.
See also § 1.367(a)–3(b)(2) for
transactions subject to the concurrent
application of sections 367(a) and (b)
and § 1.367(b)–2 for additional
definitions that apply.
(b) Income inclusion. If a foreign
corporation (the transferee foreign
corporation) acquires the stock of a
foreign corporation in an exchange
described in section 351 or the stock or
assets of a foreign corporation in a
reorganization described in section
368(a)(1) (in either case, the foreign
acquired corporation), then an
exchanging shareholder must, if its
exchange is described in paragraph
(b)(1)(i), (b)(2)(i), or (b)(3) of this section,
include in income as a deemed
dividend the section 1248 amount
E:\FR\FM\12JYR2.SGM
12JYR2
amozie on DSK3GDR082PROD with RULES2
32534
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
attributable to the stock that it
exchanges.
(1) * * *
(i) * * *
(C) The exchange is not a specified
exchange to which paragraph (e)(1) of
this section applies.
*
*
*
*
*
(d) * * *
(1) Rule. If an exchanging shareholder
(as defined in § 1.1248–8(b)(1)(iv)) is not
required to include in income as a
deemed dividend the section 1248
amount under paragraph (b) or
paragraph (e)(1) of this section (noninclusion exchange), then, for purposes
of applying section 367(b) or 1248 to
subsequent sales or exchanges, and
subject to the limitation of § 1.367(b)–
2(d)(3)(ii) (in the case of a transaction
described in § 1.367(b)–3), the
determination of the earnings and
profits attributable to the stock an
exchanging shareholder receives in the
non-inclusion exchange is determined
pursuant to the rules of section 1248
and the regulations under that section.
*
*
*
*
*
(e) Income inclusion and gain
recognition in certain exchanges
following an inversion transaction—(1)
General rule. If a foreign corporation
(the transferee foreign corporation)
acquires stock of a foreign corporation
in an exchange described in section 351
or stock or assets of a foreign
corporation in a reorganization
described in section 368(a)(1) (in either
case, the foreign acquired corporation),
then an exchanging shareholder must, if
its exchange is a specified exchange and
the exception in paragraph (e)(3) of this
section does not apply—
(i) Include in income as a deemed
dividend the section 1248 amount
attributable to the stock that it
exchanges; and
(ii) After taking into account the
increase in basis provided in § 1.367(b)–
2(e)(3)(ii) resulting from the deemed
dividend (if any), recognize all realized
gain with respect to the stock that
would not otherwise be recognized.
(2) Specified exchanges. An exchange
is a specified exchange if—
(i) Immediately before the exchange,
the foreign acquired corporation is an
expatriated foreign subsidiary and the
exchanging shareholder is either an
expatriated entity described in
paragraph (b)(1)(i)(A)(1) of this section
or an expatriated foreign subsidiary
described in paragraph (b)(1)(i)(A)(2) of
this section;
(ii) The stock received in the
exchange is stock of a foreign
corporation; and
(iii) The exchange occurs during the
applicable period.
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
(3) De minimis exception. The
exception in this paragraph (e)(3)
applies if—
(i) Immediately after the exchange, the
foreign acquired corporation (in the case
of an acquisition of stock of the foreign
acquired corporation) or the transferee
foreign corporation (in the case of an
acquisition of assets of the foreign
acquired corporation) is a controlled
foreign corporation;
(ii) The post-exchange ownership
percentage with respect to the foreign
acquired corporation (in the case of an
acquisition of stock of the foreign
acquired corporation) or the transferee
foreign corporation (in the case of an
acquisition of assets of the foreign
acquired corporation) is at least 90
percent of the pre-exchange ownership
percentage with respect to the foreign
acquired corporation; and
(iii) The post-exchange ownership
percentage with respect to each lowertier expatriated foreign subsidiary of the
foreign acquired corporation is at least
90 percent of the pre-exchange
ownership percentage with respect to
the lower-tier expatriated foreign
subsidiary.
(4) Certain exceptions from foreign
personal holding company not
available. An income inclusion of a
foreign corporation under paragraph
(e)(1) of this section does not qualify for
the exceptions from foreign personal
holding company income provided by
sections 954(c)(3)(A)(i) and 954(c)(6) (to
the extent in effect).
(5) Examples. The following examples
illustrate the application of this
paragraph (e). For purposes of all of the
examples, unless otherwise indicated:
FP, a foreign corporation, owns all of
the stock of USP, a domestic
corporation, and all 40 shares of stock
of FS, a controlled foreign corporation
for its taxable year beginning January 1,
2017, but not for prior taxable years,
except as a result of a transaction
described in the facts of an example.
USP owns all 50 shares of stock of FT1,
a controlled foreign corporation, which,
in turn, owns all 50 shares of FT2, a
controlled foreign corporation. FP
acquired all of the stock of USP in an
inversion transaction that was
completed on July 1, 2016. Therefore,
with respect to that inversion
transaction, USP is an expatriated
entity; FT1 and FT2 are expatriated
foreign subsidiaries; and FP and FS are
each a non-EFS foreign related person.
All entities have a calendar year tax year
for U.S. tax purposes. All shares of stock
have a fair market value of $1x, and
each corporation has a single class of
stock outstanding.
PO 00000
Frm 00012
Fmt 4701
Sfmt 4700
Example 1. Specified exchange to which
general rule applies—(i) Facts. During the
applicable period, and pursuant to a
reorganization described in section
368(a)(1)(B), FT1 transfers all 50 shares of
FT2 stock to FS in exchange solely for 50
newly issued voting shares of FS.
Immediately before the exchange, USP is a
section 1248 shareholder with respect to FT1
and FT2. At the time of the exchange, the
FT2 stock owned by FT1 has a fair market
value of $50x and an adjusted basis of $5x,
such that the FT2 stock has a built-in gain
of $45x. In addition, the earnings and profits
of FT2 attributable to FT1’s stock in FT2 for
purposes of section 1248 is $30x, taking into
account the rules of § 1.367(b)–2(c)(1)(i) and
(ii), and therefore the section 1248 amount
with respect to the FT2 stock is $30x (the
lesser of the $45x of built-in gain and the
$30x of earnings and profits attributable to
the stock).
(ii) Analysis. FT1’s exchange is a specified
exchange because the requirements set forth
in paragraphs (e)(2)(i) through (iii) of this
section are satisfied. The requirement set
forth in paragraph (e)(2)(i) of this section is
satisfied because, immediately before the
exchange, FT2 (the foreign acquired
corporation) is an expatriated foreign
subsidiary and FT1 (the exchanging
shareholder) is an expatriated foreign
subsidiary that is described in paragraph
(b)(1)(i)(A)(2) of this section. The
requirement set forth in paragraph (e)(2)(ii) of
this section is also satisfied because the stock
received in the exchange (FS stock) is stock
of a foreign corporation. The requirement set
forth in paragraph (e)(2)(iii) of this section is
satisfied because the exchange occurs during
the applicable period. Accordingly, under
paragraph (e)(1)(i) of this section, FT1 must
include in income as a deemed dividend
$30x, the section 1248 amount with respect
to its FT2 stock. In addition, under paragraph
(e)(1)(ii) of this section, FT1 must, after
taking into account the increase in basis
provided in § 1.367(b)–2(e)(3)(ii) resulting
from the deemed dividend (which increases
FT1’s basis in its FT2 stock from $5x to
$35x), recognize $15x ($50x amount realized
less $35x basis), the realized gain with
respect to the FT2 stock that would not
otherwise be recognized.
Example 2. De minimis shift to non-EFS
foreign related persons—(i) Facts. The facts
are the same as in the introductory sentences
of this paragraph (e)(5), except as follows.
FT1 does not own any shares of FT2, and all
40 shares of FS are owned by DX, a domestic
corporation wholly owned by individual A,
and thus FS is not a non-EFS foreign related
person. During the applicable period and
pursuant to a reorganization described in
section 368(a)(1)(D), FT1 transfers all of its
assets to FS in exchange for 50 newly issued
FS shares, FT1 distributes the 50 FS shares
to USP in liquidation under section 361(c)(1),
and USP exchanges its 50 shares of FT1 stock
for the 50 FS shares under section 354.
Further, immediately after the exchange, FS
is a controlled foreign corporation.
(ii) Analysis. Although USP’s exchange is
a specified exchange, paragraph (e)(1) of this
section does not apply to the exchange
because, as described in paragraphs (ii)(A)
E:\FR\FM\12JYR2.SGM
12JYR2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
amozie on DSK3GDR082PROD with RULES2
through (C) of this Example 2, the
requirements of paragraph (e)(3) of this
section are satisfied.
(A) Because the assets, rather than the
stock, of FT1 (the foreign acquired
corporation) are acquired, the requirement
set forth in paragraph (e)(3)(i) of this section
is satisfied if FS (the transferee foreign
corporation) is a controlled foreign
corporation immediately after the exchange.
As stated in the facts, FS is a controlled
foreign corporation immediately after the
exchange.
(B) The requirement set forth in paragraph
(e)(3)(ii) of this section is satisfied if the postexchange ownership percentage with respect
to FS is at least 90% of the pre-exchange
ownership percentage with respect to FT1.
Because USP, a domestic corporation that is
an expatriated entity, directly owns 50 shares
of FT1 stock immediately before the
exchange, none of those shares are treated as
indirectly owned by FP (a non-EFS foreign
related person) for purposes of calculating
the pre-exchange ownership percentage with
respect to FT1. See paragraph (g)(1) of this
section. Thus, for purposes of calculating the
pre-exchange ownership percentage with
respect to FT1, FP is treated as directly or
indirectly owning 0%, or 0 of 50 shares, of
the stock of FT1. Accordingly, the preexchange ownership percentage with respect
to FT1 is 100 (calculated as 100% less 0%,
the percentage of FT1 stock that non-EFS
foreign related persons are treated as directly
or indirectly owning immediately before the
exchange). Consequently, for the requirement
set forth in paragraph (e)(3)(ii) of this section
to be satisfied, the post-exchange ownership
percentage with respect to FS must be at least
90. Because USP, a domestic corporation that
is an expatriated entity, directly owns 50
shares of FS stock immediately after the
exchange, none of those shares are treated as
indirectly owned by FP (a non-EFS foreign
related person) for purposes of calculating
the post-exchange ownership percentage
with respect to FS. See paragraph (g)(1) of
this section. Thus, for purposes of calculating
the post-exchange ownership percentage
with respect to FS, FP is treated as directly
or indirectly owning 0%, or 0 of 90 shares,
of the stock of FS. As a result, the postexchange ownership percentage with respect
to FS is 100 (calculated as 100% less 0%, the
percentage of FS stock that non-EFS foreign
related persons are treated as directly or
indirectly owning immediately after the
exchange). Therefore, because the postexchange ownership percentage with respect
to FS (100) is at least 90, the requirement set
forth in paragraph (e)(3)(ii) of this section is
satisfied.
(C) Because there is not a lower-tier
expatriated foreign subsidiary of FT1, the
requirement set forth in paragraph (e)(3)(iii)
of this section does not apply.
(f) Gain recognition upon certain
transfers of property described in
section 351 following an inversion
transaction—(1) General rule. If, during
the applicable period, an expatriated
foreign subsidiary transfers specified
property to a foreign corporation (the
transferee foreign corporation) in an
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
exchange described in section 351, then
the expatriated foreign subsidiary must
recognize all realized gain with respect
to the specified property transferred that
would not otherwise be recognized,
unless the exception in paragraph (f)(2)
of this section applies.
(2) De minimis exception. The
exception in this paragraph (f)(2)
applies if—
(i) Immediately after the transfer, the
transferee foreign corporation is a
controlled foreign corporation; and
(ii) The post-exchange ownership
percentage with respect to the transferee
foreign corporation is at least 90 percent
of the pre-exchange ownership
percentage with respect to the
expatriated foreign subsidiary.
(3) Examples. The following examples
illustrate the application of this
paragraph (f). For purposes of all of the
examples, unless otherwise indicated:
FP, a foreign corporation, owns all of
the stock of USP, a domestic
corporation, and all 10 shares of stock
of FS, a controlled foreign corporation
for its taxable year beginning January 1,
2017, but not for prior taxable years,
except as a result of a transaction
described in the facts of an example.
USP owns all 50 shares of stock of FT,
a controlled foreign corporation. FT
owns Asset A, which is specified
property with a fair market value of
$50x and an adjusted basis of $10x. FP
acquired all of the stock of USP in an
inversion transaction that was
completed on or after September 22,
2014. Accordingly, with respect to that
inversion transaction, USP is an
expatriated entity, FT is an expatriated
foreign subsidiary, and FP and FS are
each a non-EFS foreign related person.
All entities have a calendar year tax year
for U.S. tax purposes. All shares of stock
have a fair market value of $1x, and
each corporation has a single class of
stock outstanding.
Example 1. Transfer to which general rule
applies—(i) Facts. In addition to the stock of
USP and FS, FP owns Asset B, which has a
fair market value of $40x. During the
applicable period, and pursuant to an
exchange described in section 351, FT
transfers Asset A to FS in exchange for 50
newly issued shares of FS stock, and FP
transfers Asset B to FS in exchange for 40
newly issued shares of FS stock.
(ii) Analysis. Paragraph (f)(1) of this section
applies to the transfer by FT (an expatriated
foreign subsidiary) of Asset A, which is
specified property, to FS (the transferee
foreign corporation). Thus, FT must
recognize gain of $40x under paragraph (f)(1)
of this section, which is the realized gain
with respect to Asset A that would not
otherwise be recognized ($50x amount
realized less $10x basis). For rules regarding
whether the FS stock held by FT is treated
PO 00000
Frm 00013
Fmt 4701
Sfmt 4700
32535
as United States property for purposes of
section 956, see § 1.956–2(a)(4)(i).
Example 2. De minimis shift to non-EFS
foreign related persons—(i) Facts. Individual,
a United States person, owns Asset B, which
has a fair market value of $40x. During the
applicable period, and pursuant to an
exchange described in section 351, FT
transfers Asset A to FS in exchange for 50
newly issued shares of FS stock, and
Individual transfers Asset B to FS in
exchange for 40 newly issued shares of FS
stock.
(ii) Analysis. Paragraph (f)(1) of this section
does not apply to the transfer by FT (an
expatriated foreign subsidiary) of Asset A,
which is specified property, to FS (the
transferee foreign corporation)) because the
requirements set forth in paragraph (f)(2) of
this section are satisfied. The requirement set
forth in paragraph (f)(2)(i) of this section is
satisfied because FS is a controlled foreign
corporation immediately after the transfer.
The requirement set forth in paragraph
(f)(2)(ii) of this section is satisfied if the postexchange ownership percentage with respect
to FS is at least 90 percent of the preexchange ownership percentage with respect
to FT. Because USP, a domestic corporation
that is an expatriated entity, directly owns 50
shares of FT stock immediately before the
transfer, none of those shares are treated as
indirectly owned by FP (a non-EFS foreign
related person) for purposes of calculating
the pre-exchange ownership percentage with
respect to FT. See paragraph (g)(1) of this
section. Thus, for purposes of calculating the
pre-exchange ownership percentage with
respect to FT, FP is treated as directly or
indirectly owning 0 percent, or 0 of 50
shares, of the stock of FT. Accordingly, the
pre-exchange ownership percentage with
respect to FT is 100 (calculated as 100
percent less 0 percent, the percentage of FT
stock that non-EFS foreign related persons
are treated as directly or indirectly owning
immediately before the transfer).
Consequently, for the requirement set forth in
paragraph (f)(2)(ii) of this section to be
satisfied, the post-exchange ownership
percentage with respect to FS must be at least
90. Although FP directly owns 10 FS shares,
none of the 50 FS shares that FP owns
through USP (a domestic corporation that is
an expatriated entity) are treated as indirectly
owned by FP for purposes of calculating the
post-exchange ownership percentage with
respect to FS because USP directly owns
them. See paragraph (g)(1) of this section.
Thus, for purposes of calculating the postexchange ownership percentage with respect
to FS, FP is treated as directly or indirectly
owning 10 percent, or 10 of 100 shares, of the
stock of FS. As a result, the post-exchange
ownership percentage with respect to FS is
90 (calculated as 100 percent less 10 percent,
the percentage of FS stock that non-EFS
foreign related persons are treated as directly
or indirectly owning immediately after the
transfer). Therefore, because the postexchange ownership percentage with respect
to FS (90) is at least 90, the requirement set
forth in paragraph (f)(2)(ii) of this section is
satisfied.
(g) Definitions and special rules. In
addition to the definitions and special
E:\FR\FM\12JYR2.SGM
12JYR2
amozie on DSK3GDR082PROD with RULES2
32536
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
rules in §§ 1.367(b)–2 and 1.7874–12,
the following definitions and special
rules apply for purposes of this section.
(1) Indirect ownership. To determine
indirect ownership of the stock of a
corporation for purposes of calculating
a pre-exchange ownership percentage or
post-exchange ownership percentage
with respect to that corporation, the
principles of section 958(a) apply
without regard to whether an
intermediate entity is foreign or
domestic. For this purpose, stock of the
corporation that is directly or indirectly
(applying the principles of section
958(a) without regard to whether an
intermediate entity is foreign or
domestic) owned by a domestic
corporation that is an expatriated entity
is not treated as indirectly owned by a
non-EFS foreign related person.
(2) A lower-tier expatriated foreign
subsidiary means an expatriated foreign
subsidiary whose stock is directly or
indirectly owned (under the principles
of section 958(a)) by an expatriated
foreign subsidiary.
(3) Pre-exchange ownership
percentage means, with respect to a
corporation, 100 percent less the
percentage of stock (by value) in the
corporation that, immediately before an
exchange, is owned, in the aggregate,
directly or indirectly by non-EFS foreign
related persons.
(4) Post-exchange ownership
percentage means, with respect to a
corporation, 100 percent less the
percentage of stock (by value) in the
corporation that, immediately after the
exchange, is owned, in the aggregate,
directly or indirectly by non-EFS foreign
related persons.
(5) Specified property means any
property other than stock of a lower-tier
expatriated foreign subsidiary.
(6) Recapitalizations. A foreign
corporation that undergoes a
reorganization described in section
368(a)(1)(E) is treated as both the foreign
acquired corporation and the transferee
foreign corporation.
(7) Triangular reorganizations—(i)
Definition. A triangular reorganization
means a reorganization described in
§ 1.358–6(b)(2)(i) (forward triangular
merger), (ii) (triangular C
reorganization), (iii) (reverse triangular
merger), (iv) (triangular B
reorganization), and (v) (triangular G
reorganization).
(ii) Special rules—(A) Triangular
reorganizations other than a reverse
triangular merger. In the case of a
triangular reorganization other than a
reverse triangular merger, the surviving
corporation is the transferee foreign
corporation that acquires the assets or
stock of the foreign acquired
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
corporation, and the reference to
controlling corporation (foreign or
domestic) is to the corporation that
controls the surviving corporation.
(B) Reverse triangular merger. In the
case of a reverse triangular merger, the
surviving corporation is the entity that
survives the merger, and the controlling
corporation (foreign or domestic) is the
corporation that before the merger
controls the merged corporation. In the
case of a reverse triangular merger, this
section applies only if stock of the
foreign surviving corporation is
exchanged for stock of a foreign
corporation in control of the merging
corporation; in such a case, the foreign
surviving corporation is treated as a
foreign acquired corporation.
(h) Applicability date of certain
paragraphs in this section. Except as
otherwise provided in this paragraph
(h), paragraphs (a), (b) introductory text,
(b)(1)(i)(C), (d)(1), (e), (f), and (g) of this
section apply to exchanges completed
on or after September 22, 2014, but only
if the inversion transaction was
completed on or after September 22,
2014. Paragraph (e)(1)(ii) of this section
applies to exchanges completed on or
after November 19, 2015, but only if the
inversion transaction was completed on
or after September 22, 2014. The portion
of paragraph (e)(2)(i) of this section that
requires the exchanging shareholder to
be an expatriated entity or an
expatriated foreign subsidiary apply to
exchanges completed on or after April 4,
2016, but only if the inversion
transaction was completed on or after
September 22, 2014. For inversion
transactions completed on or after
September 22, 2014, however, taxpayers
may elect to apply the portion of
paragraph (e)(2)(i) of this section that
requires the exchanging shareholder to
be an expatriated entity or an
expatriated foreign subsidiary to
exchanges completed on or after
September 22, 2014, and before April 4,
2016. Paragraphs (f) and (g)(5) of this
section apply to transfers completed on
or after April 4, 2016, but only if the
inversion transaction was completed or
after September 22, 2014. See
§ 1.367(b)–4, as contained in 26 CFR
part 1 revised as of April 1, 2016, for
exchanges completed before September
22, 2014.
§ 1.367(b)–4T
[Removed]
Par. 7. Section 1.367(b)–4T is
removed.
■
§ 1.367(b)–6
[Amended]
Par. 8. Section 1.367(b)–6 is amended
by:
■ 1. Removing paragraph (a)(1)(iii).
■
PO 00000
Frm 00014
Fmt 4701
Sfmt 4700
2. Redesignating paragraphs (a)(1)(iv)
and (v) as (a)(1)(iii) and (iv),
respectively.
■ 3. In newly redesignated paragraph
(a)(1)(iv), removing the language
‘‘1.367(b)–4(a), §’’ in the first sentence
and removing the language ‘‘§ 1.367(b)–
4(a)’’ in the second sentence.
■ Par. 9. Section 1.956–2 is amended
by:
■ 1. Revising paragraphs (a)(4), (c)(5),
and (d)(2).
■ 2. Adding paragraphs (f) and (h)(3)
through (6).
■ 3. Removing paragraph (i).
The revisions and additions read as
follows:
■
§ 1.956–2
property.
Definition of United States
(a) * * *
(4) Certain foreign stock and
obligations held by expatriated foreign
subsidiaries following an inversion
transaction—(i) General rule. Except as
provided in paragraph (a)(4)(ii) of this
section, for purposes of section 956 and
paragraph (a) of this section, United
States property includes an obligation of
a foreign person and stock of a foreign
corporation when the following
conditions are satisfied—
(A) The obligation or stock is held by
a controlled foreign corporation that is
an expatriated foreign subsidiary,
regardless of whether, when the
obligation or stock was acquired, the
acquirer was a controlled foreign
corporation or an expatriated foreign
subsidiary;
(B) The foreign person or foreign
corporation is a non-EFS foreign related
person, regardless of whether, when the
obligation or stock was acquired, the
foreign person or foreign corporation
was a non-EFS foreign related person;
and
(C) The obligation or stock was
acquired—
(1) During the applicable period; or
(2) In a transaction related to the
inversion transaction.
(ii) Exceptions. For purposes of
section 956 and paragraph (a) of this
section, United States property does not
include—
(A) Any obligation of a non-EFS
foreign related person arising in
connection with the sale or processing
of property if the amount of the
obligation at no time during the taxable
year exceeds the amount that would be
ordinary and necessary to carry on the
trade or business of both the other party
to the sale or processing transaction and
the non-EFS foreign related person had
the sale or processing transaction been
made between unrelated persons; and
(B) Any obligation of a non-EFS
foreign related person to the extent the
E:\FR\FM\12JYR2.SGM
12JYR2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
amozie on DSK3GDR082PROD with RULES2
principal amount of the obligation does
not exceed the fair market value of
readily marketable securities sold or
purchased pursuant to a sale and
repurchase agreement or otherwise
posted or received as collateral for the
obligation in the ordinary course of its
business by a United States or foreign
person which is a dealer in securities or
commodities.
(iii) Definitions. The definitions in
§ 1.7874–12 apply for the purposes of
the application of paragraphs (a)(4),
(c)(5), and (d)(2) of this section.
(iv) Examples. The following
examples illustrate the rules of this
paragraph (a)(4). For purposes of the
examples, FA, a foreign corporation,
wholly owns DT, a domestic
corporation, which, in turn, wholly
owns FT, a foreign corporation that is a
controlled foreign corporation. FA also
wholly owns FS, a foreign corporation
that is a controlled foreign corporation
for its taxable year beginning January 1,
2017, but not for prior taxable years
except as a result of a transaction
described in the facts of an example. All
entities have a calendar year tax year for
U.S. tax purposes. FA acquired DT in an
inversion transaction that was
completed on January 1, 2015.
Example 1. (A) Facts. FT acquired an
obligation of FS on January 31, 2015.
(B) Analysis. Pursuant to § 1.7874–12, DT
is a domestic entity, FT is an expatriated
foreign subsidiary, and FS is a non-EFS
foreign related person. In addition, FT
acquired the FS obligation during the
applicable period. Thus, as of January 31,
2015, the obligation of FS is United States
property with respect to FT for purposes of
section 956(a) and this paragraph (a).
Example 2. (A) Facts. The facts are the
same as in Example 1 of this paragraph
(a)(4)(iv), except that on February 15, 2015,
FT contributed assets to FS in exchange for
60% of the stock of FS, by vote and value.
(B) Analysis. As a result of the transaction
on February 15, 2015, FS became a controlled
foreign corporation with respect to which an
expatriated entity, DT, is a United States
shareholder. Accordingly, under § 1.7874–
12(a)(9), FS is an expatriated foreign
subsidiary, and is therefore not a non-EFS
foreign related person. Thus, as of February
15, 2015, the stock and obligation of FS are
not United States property with respect to FT
for purposes of section 956(a) and this
paragraph (a). FS is not excluded from the
definition of expatriated foreign subsidiary
pursuant to § 1.7874–12(a)(9)(ii) because FS
was not a CFC on the completion date.
Example 3. (A) Facts. Before the inversion
transaction, FA also wholly owns USP, a
domestic corporation, which, in turn, wholly
owns, LFS, a foreign corporation that is a
controlled foreign corporation. DT was not a
United States shareholder of LFS on or before
the completion date. On January 31, 2015, FT
contributed assets to LFS in exchange for
60% of the stock of LFS, by vote and value.
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
FT acquired an obligation of LFS on February
15, 2015.
(B) Analysis. LFS is a foreign related
person. Because LFS was a controlled foreign
corporation and a member of the EAG with
respect to the inversion transaction on the
completion date, and DT was not a United
States shareholder with respect to LFS on or
before the completion date, LFS is excluded
from the definition of expatriated foreign
subsidiary pursuant to § 1.7874–12(a)(9)(ii).
Thus, pursuant to § 1.7874–12(a)(16), LFS is
a non-EFS foreign related person, and the
stock and obligation of LFS are United States
property with respect to FT for purposes of
section 956(a) and this paragraph (a). The fact
that FT contributed assets to LFS in exchange
for 60% of the stock of LFS does not change
this result.
Example 4. (A) Facts. The facts are the
same as in Example 3 of this paragraph
(a)(4)(iv), except that on February 10, 2015,
LFS organized a new foreign corporation
(LFSS), transferred all of its assets to LFSS,
and liquidated, in a transaction treated as a
reorganization described in section
368(a)(1)(F), and FT acquired an obligation of
LFSS, instead of LFS, on February 15, 2015.
On March 1, 2015, LFSS acquired an
obligation of FS.
(B) Analysis. LFS is a controlled foreign
corporation with respect to which USP, an
expatriated entity, is a United States
shareholder. USP is an expatriated entity
because on the completion date, USP and DT
became related to each other within the
meaning of section 267(b). Because LFSS was
not a member of the EAG with respect to the
inversion transaction on the completion date,
LFSS is not excluded from the definition of
expatriated foreign subsidiary pursuant to
§ 1.7874–12(a)(9)(ii). Accordingly, under
§ 1.7874–12(a)(9)(i), LFFS is an expatriated
foreign subsidiary and is therefore not a nonEFS foreign related person. Thus, the stock
and obligation of LFSS are not United States
property with respect to FT for purposes of
section 956(a) and paragraph (a) of this
section. However, because LFSS is an
expatriated foreign subsidiary, pursuant to
§ 1.7874–12(a)(9), the obligation of FS, a nonEFS foreign related person, is United States
property with respect to LFSS for purposes
of section 956(a) and this paragraph (a).
*
*
*
*
*
(c) * * *
(5) Special guarantee and pledge rule
for expatriated foreign subsidiaries—(i)
General rule. In applying paragraphs
(c)(1) and (2) of this section to a
controlled foreign corporation that is an
expatriated foreign subsidiary, the
phrase ‘‘of a United States person or a
non-EFS foreign related person’’ is
substituted for the phrase ‘‘of a United
States person’’ each place it appears.
(ii) Additional rules. The rule in
paragraph (c)(5)(i) of this section—
(A) Applies regardless of whether,
when the pledge or guarantee was
entered into or treated as entered into,
the controlled foreign corporation was a
controlled foreign corporation or an
expatriated foreign subsidiary, or a
PO 00000
Frm 00015
Fmt 4701
Sfmt 4700
32537
foreign person whose obligation is
subject to the pledge or guarantee, or
deemed pledge or guarantee, was a nonEFS foreign related person; and
(B) Applies to pledges or guarantees
entered into, or treated pursuant to
paragraph (c)(2) of this section as
entered into—
(1) During the applicable period; or
(2) In a transaction related to the
inversion transaction.
(d) * * *
(2) Obligation defined. For purposes
of section 956 and this section, the term
‘‘obligation’’ includes any bond, note,
debenture, certificate, bill receivable,
account receivable, note receivable,
open account, or other indebtedness,
whether or not issued at a discount and
whether or not bearing interest, except
that the term does not include—
(i) Any indebtedness arising out of the
involuntary conversion of property
which is not United States property
within the meaning of paragraph (a) of
this section;
(ii) Any obligation of a United States
person (as defined in section 957(c))
arising in connection with the provision
of services by a controlled foreign
corporation to the United States person
if the amount of the obligation
outstanding at any time during the
taxable year of the controlled foreign
corporation does not exceed an amount
which would be ordinary and necessary
to carry on the trade or business of the
controlled foreign corporation and the
United States person if they were
unrelated. The amount of the
obligations shall be considered to be
ordinary and necessary to the extent of
such receivables that are paid within 60
days;
(iii) Any obligation of a non-EFS
foreign related person arising in
connection with the provision of
services by an expatriated foreign
subsidiary to the non-EFS foreign
related person if the amount of the
obligation outstanding at any time
during the taxable year of the
expatriated foreign subsidiary does not
exceed an amount which would be
ordinary and necessary to carry on the
trade or business of the expatriated
foreign subsidiary and the non-EFS
foreign related person if they were
unrelated. The amount of the
obligations shall be considered to be
ordinary and necessary to the extent of
such receivables that are paid within 60
days; or
(iv) Any obligation of a United States
person (as defined in section 957(c))
that is collected within 30 days from the
time it is incurred (a 30-day obligation),
unless the controlled foreign
corporation that holds the 30-day
E:\FR\FM\12JYR2.SGM
12JYR2
amozie on DSK3GDR082PROD with RULES2
32538
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
obligation holds for 60 or more calendar
days during the taxable year in which it
holds the 30-day obligation any
obligations which, without regard to the
exclusion described in this paragraph
(d)(2)(iv), would constitute United
States property within the meaning of
section 956 and paragraph (a) of this
section.
*
*
*
*
*
(f) [Reserved]. For further guidance,
see § 1.956–2T(f).
*
*
*
*
*
(h) * * *
(3) Except as otherwise provided in
this paragraph (h)(3), paragraphs (a)(4)
and (c)(5) of this section apply to
obligations or stock acquired or to
pledges or guarantees entered into, or
treated as entered into, on or after
September 22, 2014, but only if the
inversion transaction was completed on
or after September 22, 2014. The phrase
‘‘, regardless of whether, when the
obligation or stock was acquired, the
acquirer was a controlled foreign
corporation or an expatriated foreign
subsidiary’’ in paragraph (a)(4)(i)(A) of
this section, the phrase ‘‘regardless of
whether, when the obligation or stock
was acquired, the foreign person or
foreign corporation was a non-EFS
foreign related person’’ in paragraph
(a)(4)(i)(B) of this section, and
paragraphs (a)(4)(i)(C)(2), (c)(5)(ii)(A),
and (c)(5)(ii)(B)(2) of this section apply
to obligations or stock acquired or
pledges or guarantees entered into or
treated as entered into on or after April
4, 2016, but only if the inversion
transaction was completed on or after
September 22, 2014. Paragraph (a)(4)(ii)
of this section applies to obligations
acquired on or after April 4, 2016. For
inversion transactions completed on or
after September 22, 2014, however,
taxpayers may elect to apply paragraph
(a)(4)(ii) of this section to an obligation
acquired before April 4, 2016. For
purposes of paragraph (a)(4)(i) of this
section and this paragraph (h)(3), a
deemed exchange of an obligation or
stock pursuant to section 1001
constitutes an acquisition of the
obligation or stock. For purposes of
paragraph (c)(5) of this section and this
paragraph (h)(3), a pledgor or guarantor
or deemed pledgor or guarantor is
treated as entering into a pledge or
guarantee when there is a significant
modification, within the meaning of
§ 1.1001–3(e), of an obligation with
respect to which it is a pledgor or
guarantor or is treated as a pledgor or
guarantor.
(4) Paragraphs (d)(2)(i) and (ii) of this
section are effective June 14, 1988, with
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
respect to investments made on or after
June 14, 1988.
(5) Paragraph (d)(2)(iii) of this section
applies to obligations acquired on or
after April 4, 2016, but only if the
inversion transaction was completed on
or after September 22, 2014. For
inversion transactions completed on or
after September 22, 2014, however,
taxpayers may elect to apply paragraph
(d)(2)(iii) of this section to an obligation
acquired on or after September 22, 2014,
and before April 4, 2016. For purposes
of paragraph (d)(2)(iii) of this section
and this paragraph (h)(5), a significant
modification, within the meaning of
§ 1.1001–3(e), of an obligation on or
after April 4, 2016, constitutes an
acquisition of an obligation on or after
April 4, 2016.
(6) Paragraph (d)(2)(iv) of this section
applies to obligations held on or after
September 16, 1988. See § 1.956–
2T(d)(2)(v), as contained in 26 CFR part
1 revised as of April 1, 2017, for
additional rules applicable to certain
taxable years of a foreign corporation
beginning before January 1, 2011.
■ Par. 10. Section 1.956–2T is amended
by:
■ 1. Removing and reserving paragraph
(a)(4).
■ 2. Revising paragraphs (b)(2) through
(c)(4).
■ 3. Removing and reserving paragraphs
(c)(5) and (d)(2).
■ 4. Removing paragraphs (i) and (j).
The revisions read as follows:
§ 1.956–2T Definition of United States
property (temporary).
*
*
*
*
*
(b)(2) through (c)(4). [Reserved] For
further guidance, see § 1.956–2(b)(2)
through (c)(4).
*
*
*
*
*
■ Par. 11. Section 1.7701(l)–4 is added
to read as follows:
§ 1.7701(l)–4 Rules regarding inversion
transactions.
(a) Overview. This section provides
rules applicable to United States
shareholders of controlled foreign
corporations after certain inversion
transactions. Paragraph (b) of this
section defines specified transactions
and provides the scope of the rules in
this section. Paragraph (c) of this section
provides rules recharacterizing certain
specified transactions. Paragraph (d) of
this section sets forth rules governing
transactions that affect the stock of an
expatriated foreign subsidiary following
a recharacterized specified transaction.
Paragraph (e) of this section sets forth a
rule concerning the treatment of
amounts included in income as a result
of a specified transaction as foreign
PO 00000
Frm 00016
Fmt 4701
Sfmt 4700
personal holding company income.
Paragraph (f) of this section sets forth
definitions that apply for purposes of
this section. Paragraph (g) of this section
sets forth examples illustrating these
rules. Paragraph (h) of this section
provides applicability dates. See
§ 1.367(b)–4(e) and (f) for rules
concerning certain other exchanges after
an inversion transaction. See also
§ 1.956–2(a)(4), (c)(5), and (d)(2) for
additional rules applicable to United
States property held by controlled
foreign corporations after an inversion
transaction.
(b) Specified transaction—(1) In
general. Except as provided in
paragraph (b)(2) of this section,
paragraph (c) of this section applies to
specified transactions. For purposes of
this section, a specified transaction is,
with respect to an expatriated foreign
subsidiary, a transaction in which stock
of the expatriated foreign subsidiary is
issued or transferred to a person that
immediately before the issuance or
transfer is a specified related person,
provided the transaction occurs during
the applicable period. However, a
specified transaction does not include a
transaction in which stock of the
expatriated foreign subsidiary is deemed
issued pursuant to section 304.
(2) Exceptions. Paragraph (c) of this
section does not apply to a specified
transaction—
(i) That is a fast-pay arrangement that
is recharacterized under § 1.7701(l)–
3(c)(2);
(ii) In which the specified stock was
transferred by a shareholder of the
expatriated foreign subsidiary, and the
shareholder either—
(A) Pursuant to § 1.367(b)–4(e)(1),
both—
(1) Included in gross income as a
deemed dividend the section 1248
amount attributable to the specified
stock; and
(2) After taking into account the
increase in basis provided in § 1.367(b)–
2(e)(3)(ii) resulting from the deemed
dividend (if any), recognized all realized
gain with respect to the stock that
otherwise would not have been
recognized; or
(B) Included in gross income all of the
gain recognized on the transfer of the
specified stock (including gain included
in gross income as a dividend pursuant
to section 964(e), section 1248(a), or
section 356(a)(2)); or
(iii) In which—
(A) Immediately after the specified
transaction and any related transaction,
the expatriated foreign subsidiary is a
controlled foreign corporation;
(B) The post-transaction ownership
percentage with respect to the
E:\FR\FM\12JYR2.SGM
12JYR2
amozie on DSK3GDR082PROD with RULES2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
expatriated foreign subsidiary is at least
90 percent of the pre-transaction
ownership percentage with respect to
the expatriated foreign subsidiary; and
(C) The post-transaction ownership
percentage with respect to any lowertier expatriated foreign subsidiary is at
least 90 percent of the pre-transaction
ownership percentage with respect to
the lower-tier expatriated foreign
subsidiary. See Example 3 and Example
4 of paragraph (g) of this section.
(c) Recharacterization of specified
transactions—(1) In general. Except as
otherwise provided, a specified
transaction that is recharacterized under
this paragraph (c) is recharacterized for
all purposes of the Internal Revenue
Code as of the date on which the
specified transaction occurs, unless and
until the rules of paragraph (d) of this
section apply to alter or terminate the
recharacterization. For purposes of
paragraphs (c)(2) and (3) and (d) of this
section, stock is considered owned by a
section 958(a) U.S. shareholder if it is
owned within the meaning of section
958(a) by the section 958(a) U.S.
shareholder.
(2) Specified transactions through
stock issuance. A specified transaction
in which the specified stock is issued by
an expatriated foreign subsidiary to a
specified related person is
recharacterized as follows—
(i) The transferred property is treated
as having been transferred by the
specified related person to the persons
that were section 958(a) U.S.
shareholders of the expatriated foreign
subsidiary immediately before the
specified transaction, in proportion to
the stock of the expatriated foreign
subsidiary owned by each section 958(a)
U.S. shareholder, in exchange for
deemed instruments in the section
958(a) U.S. shareholders; and
(ii) The transferred property treated as
transferred to the section 958(a) U.S.
shareholders pursuant to paragraph
(c)(2)(i) of this section is treated as
having been contributed by the section
958(a) U.S. shareholders (through
intermediate entities, if any, in
exchange for equity in the intermediate
entities) to the expatriated foreign
subsidiary in exchange for deemed
issued stock in the expatriated foreign
subsidiary. See Example 1, Example 2,
and Example 6 of paragraph (g) of this
section.
(3) Specified transactions through
shareholder transfer. A specified
transaction in which specified stock is
transferred by shareholders of the
expatriated foreign subsidiary to a
specified related person is
recharacterized as follows—
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
(i) The transferred property is treated
as having been transferred by the
specified related person to the persons
that were section 958(a) U.S.
shareholders of the expatriated foreign
subsidiary immediately before the
specified transaction, in proportion to
the specified stock owned by each
section 958(a) U.S. shareholder, in
exchange for deemed instruments in the
section 958(a) U.S. shareholders; and
(ii) To the extent the section 958(a)
U.S. shareholders are not the
transferring shareholders, the
transferred property treated as
transferred to the section 958(a) U.S.
shareholders pursuant to paragraph
(c)(3)(i) of this section is treated as
having been contributed by the section
958(a) U.S. shareholders (through
intermediate entities, if any, in
exchange for equity in the intermediate
entities) to the transferring shareholder
in exchange for equity in the
transferring shareholder. See Example 5
of paragraph (g) of this section.
(4) Treatment of deemed instruments
following a recharacterized specified
transaction—(i) Deemed instruments.
The deemed instruments described in
paragraphs (c)(2) and (3) of this section
have the same terms as the specified
stock issued or transferred pursuant to
the specified transaction (that is, the
disregarded specified stock), other than
the issuer. When a distribution is made
with respect to the disregarded specified
stock, matching seriatim distributions
with respect to the deemed issued stock
are treated as made by the expatriated
foreign subsidiary, through intermediate
entities, if any, to the section 958(a) U.S.
shareholders, which, in turn, then are
treated as making corresponding
payments with respect to the deemed
instruments to the specified related
person.
(ii) Paying agent. The expatriated
foreign subsidiary is treated as the
paying agent of the section 958(a) U.S.
shareholder with respect to the deemed
instruments treated as issued by the
section 958(a) U.S. shareholder to the
specified related person.
(d) Transactions affecting ownership
of stock of an expatriated foreign
subsidiary following a recharacterized
specified transaction—(1) Transfers of
stock other than specified stock. When,
after a specified transaction with respect
to an expatriated foreign subsidiary that
is recharacterized under paragraph (c)(2)
or (3) of this section, stock of the
expatriated foreign subsidiary, other
than disregarded specified stock, that is
owned by a section 958(a) U.S.
shareholder is transferred, the deemed
issued stock treated as owned by the
section 958(a) U.S. shareholder as a
PO 00000
Frm 00017
Fmt 4701
Sfmt 4700
32539
result of the specified transaction
continues to be treated as directly
owned by the holder, as are the deemed
instruments treated as issued to the
specified related person as a result of
the specified transaction.
(2) Transactions in which the
expatriated foreign subsidiary ceases to
be a foreign related person. When, after
a specified transaction with respect to
an expatriated foreign subsidiary that is
recharacterized under paragraph (c)(2)
or (3) of this section, there is a
transaction that affects the ownership of
the stock (including disregarded
specified stock) of the expatriated
foreign subsidiary, and, immediately
after the transaction, the expatriated
foreign subsidiary is not a foreign
related person (determined without
taking into account the
recharacterization under paragraph
(c)(2) or (3) of this section), then,
immediately before the transaction—
(i) Each section 958(a) U.S.
shareholder that is treated as owning
deemed issued stock in the expatriated
foreign subsidiary under paragraph
(c)(2) or (3) of this section is treated as
transferring the deemed issued stock
(after the deemed issued stock is
deemed to be transferred to the section
958(a) U.S. shareholder through
intermediate entities, if any, in
redemption of equity deemed issued by
the intermediate entities pursuant to
paragraph (c)(2) or (3) of this section) to
the specified related person that is
treated as holding the deemed
instruments issued by the section 958(a)
U.S. shareholder under paragraph (c)(2)
or (3) of this section, in redemption of
the deemed instruments; and
(ii) The deemed issued stock that is
treated as transferred pursuant to
paragraph (d)(2)(i) of this section is
treated as recapitalized into the
disregarded specified stock actually
held by the specified related person,
which immediately thereafter is treated
as specified stock owned by the
specified related person for all purposes
of the Internal Revenue Code. See
Example 8, Example 9, and Example 12
of paragraph (g) of this section.
(3) Transfers in which disregarded
specified stock ceases to be held by a
foreign related person, specified related
person, or expatriated entity. When,
after a specified transaction with respect
to an expatriated foreign subsidiary that
is recharacterized under paragraph (c)(2)
or (3) of this section, there is a direct or
indirect transfer of the disregarded
specified stock in the expatriated
foreign subsidiary, and immediately
after the transfer, the expatriated foreign
subsidiary is a foreign related person,
then, to the extent that, as a result of the
E:\FR\FM\12JYR2.SGM
12JYR2
amozie on DSK3GDR082PROD with RULES2
32540
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
transfer, the disregarded specified stock
is actually held (determined without
taking into account the
recharacterization under paragraph
(c)(2) or (3) of this section) by a person
that is not a foreign related person, a
specified related person, or an
expatriated entity, immediately before
the transfer—
(i) Each section 958(a) U.S.
shareholder that is treated as owning all
or a portion of the deemed issued stock
in the expatriated foreign subsidiary is
treated as transferring the deemed
issued stock that is allocable to the
transferred disregarded specified stock
that is out-of-group transferred
disregarded specified stock (after the
deemed issued stock is deemed to be
transferred to the section 958(a) U.S.
shareholder through intermediate
entities, if any, in redemption of equity
deemed issued by the intermediate
entities pursuant to paragraph (c)(2) or
(3) of this section) to the specified
related person that is treated as holding
the deemed instruments allocable to the
out-of-group transferred disregarded
specified stock, in redemption of the
deemed instruments that are allocable to
the out-of-group transferred disregarded
specified stock; and
(ii) The deemed issued stock that is
treated as transferred pursuant to
paragraph (d)(3)(i) of this section is
treated as recapitalized into the
disregarded specified stock actually
held by the specified related person,
which immediately thereafter is treated
as specified stock owned by the
specified related person for all purposes
of the Internal Revenue Code. See
Example 7 and Example 11 of paragraph
(g) of this section.
(4) Certain direct transfers of
disregarded specified stock to which
unwind rules do not apply. When a
specified related person directly
transfers the disregarded specified stock
of the expatriated foreign subsidiary and
paragraphs (d)(2) and (3) of this section
do not apply with respect to the
transfer, the specified related person is
deemed to transfer the deemed
instruments allocable to the transferred
disregarded specified stock, whether it
is in-group transferred disregarded
specified stock or out-of-group
transferred disregarded specified stock,
to the transferee of the specified stock,
in lieu of the disregarded specified
stock, in exchange for the consideration
provided by the transferee for the
disregarded specified stock. See
Example 10 of paragraph (g) of this
section.
(5) Determination of deemed issued
stock and deemed instruments allocable
to transferred disregarded specified
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
stock—(i) Out-of-group transfers of
disregarded specified stock. For
purposes of paragraphs (d)(3) and (4) of
this section, the portion of the deemed
issued stock treated as owned, and of
the deemed instruments treated as
issued, by each section 958(a) U.S.
shareholder as a result of the specified
transaction that is allocable to out-ofgroup transferred disregarded specified
stock is the amount that is proportionate
to the ratio of the amount of the out-ofgroup transferred disregarded specified
stock to the amount of disregarded
specified stock of the expatriated foreign
subsidiary that is actually held by the
specified related person immediately
before the transfer referred to in
paragraph (d)(3) or (4) of this section as
a result of the specified transaction.
(ii) In-group direct transfers of
disregarded specified stock. For
purposes of paragraph (d)(4) of this
section, the portion of the deemed
issued stock treated as owned by each
section 958(a) U.S. shareholder as a
result of the specified transaction that is
allocable to in-group transferred
disregarded specified stock is the
amount that is proportionate to the ratio
of the amount of the in-group
transferred disregarded specified stock
to the amount of disregarded specified
stock of the expatriated foreign
subsidiary that is actually held by the
specified related person immediately
before the transfer described in
paragraph (d)(4) of this section as a
result of the specified transaction.
(e) Certain exception from foreign
personal holding company income not
available. An amount included in the
gross income of a controlled foreign
corporation as a dividend with respect
to stock transferred in a specified
transaction does not qualify for the
exception from foreign personal holding
company income provided by section
954(c)(6) (to the extent in effect).
(f) Definitions. In addition to the
definitions in § 1.7874–12, the following
definitions and special rules apply for
purposes of this section:
(1) Deemed instruments mean, with
respect to a specified transaction,
instruments deemed issued by a section
958(a) U.S. shareholder in exchange for
transferred property in the specified
transaction.
(2) Deemed issued stock means, with
respect to a specified transaction, stock
of an expatriated foreign subsidiary
deemed issued to a section 958(a) U.S.
shareholder (or an intermediate entity)
in the specified transaction.
(3) Disregarded specified stock means,
with respect to a specified transaction,
specified stock that is actually held by
a specified related person but that is
PO 00000
Frm 00018
Fmt 4701
Sfmt 4700
disregarded for all purposes of the
Internal Revenue Code pursuant to
paragraph (c)(2) or (3) of this section.
(4) Indirect ownership. To determine
indirect ownership of the stock of a
corporation for purposes of calculating
a pre-transaction ownership percentage
or post-transaction ownership
percentage with respect to that
corporation, the principles of section
958(a) apply without regard to whether
an intermediate entity is foreign or
domestic. For this purpose, stock of the
corporation that is directly or indirectly
(applying the principles of section
958(a) without regard to whether an
intermediate entity is foreign or
domestic) owned by a domestic
corporation that is an expatriated entity
is not treated as indirectly owned by a
non-EFS foreign related person.
(5) In-group transferred disregarded
specified stock means disregarded
specified stock that is directly
transferred to a foreign related person, a
specified related person, or an
expatriated entity.
(6) A lower-tier expatriated foreign
subsidiary means an expatriated foreign
subsidiary, stock of which is directly or
indirectly owned by an expatriated
foreign subsidiary.
(7) Out-of-group transferred
disregarded specified stock means
disregarded specified stock that, as a
result of a transfer of disregarded
specified stock, is actually held by a
person that is not a foreign related
person, a specified related person, or an
expatriated entity.
(8) Pre-transaction ownership
percentage means, with respect to a
corporation, 100 percent less the
percentage of stock (by value) in the
corporation that, immediately before a
specified transaction and any related
transaction, is owned, in the aggregate,
directly or indirectly by non-EFS foreign
related persons.
(9) Post-transaction ownership
percentage means, with respect to a
corporation, 100 percent less the
percentage of stock (by value) in the
corporation that, immediately after the
specified transaction and any related
transaction, is owned, in the aggregate,
directly or indirectly by non-EFS foreign
related persons.
(10) A section 958(a) U.S. shareholder
means, with respect to an expatriated
foreign subsidiary, a United States
shareholder with respect to the
expatriated foreign subsidiary that owns
(within the meaning of section 958(a))
stock of the expatriated foreign
subsidiary and that is an expatriated
entity.
(11) Specified stock means the stock
of the expatriated foreign subsidiary that
E:\FR\FM\12JYR2.SGM
12JYR2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
amozie on DSK3GDR082PROD with RULES2
is issued or transferred to a specified
related person in a specified transaction.
(12) Transferred property means the
property transferred by the specified
related person in exchange for specified
stock in a specified transaction.
(g) Examples. The following examples
illustrate the regulations described in
this section. Except as otherwise
provided, FA, a foreign corporation,
wholly owns DT, a domestic
corporation, which, in turn, wholly
owns FT, a foreign corporation that is a
controlled foreign corporation. FA also
wholly owns FS, a foreign corporation
that is a controlled foreign corporation
for its taxable year beginning January 1,
2017, but not for prior taxable years. FA
acquired DT in an inversion transaction
that was completed on January 1, 2015.
Accordingly, DT is the domestic entity
and a section 958(a) U.S. shareholder
with respect to FT, FT is an expatriated
foreign subsidiary, and FA and FS are
non-EFS foreign related persons and
specified related persons. All entities
have a calendar year tax year for U.S.
tax purposes.
Example 1. (i) Facts. On February 1, 2015,
FA acquires $6x of FT stock, representing
60% of the total voting power and value of
the stock of FT, from FT in a stock issuance,
in exchange for $6x of cash.
(ii) Analysis. (A) Under paragraph (b) of
this section, FA’s acquisition of the FT
specified stock from FT is a specified
transaction because stock of an expatriated
foreign subsidiary was issued to a specified
related person (FA) during the applicable
period. Furthermore, the exceptions to
recharacterization in paragraph (b)(2) of this
section do not apply to the transaction.
(B) FA’s acquisition of the FT specified
stock is recharacterized under paragraphs
(c)(1) and (2) of this section as follows, with
the result that FT continues to be a CFC even
before its taxable year beginning January 1,
2017:
(1) DT is treated as having issued deemed
instruments to FA in exchange for $6x of
cash.
(2) DT is treated as having contributed the
$6x of cash to FT in exchange for deemed
issued stock of FT.
(C) Under paragraph (c)(4)(i) of this
section, any distribution with respect to the
FT specified stock issued to FA will be
treated as a distribution to DT, which, in
turn, will be treated as making a matching
distribution with respect to the deemed
instruments that DT is treated as having
issued to FA. Under paragraph (c)(4)(ii) of
this section, FT is treated as the paying agent
of DT with respect to the deemed
instruments issued by DT to FA.
Example 2. (i) Facts. DT owns stock of FT
representing 60% of the total voting power
and value of the stock of FT, and the
remaining stock of FT, representing 40% of
the total voting power and value, is owned
by USP, a domestic corporation that is not an
expatriated entity. On February 1, 2015, FA
acquires $6x of FT stock, representing 60%
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
of the total voting power and value of the
stock of FT, from FT in a stock issuance, in
exchange for $6x of cash.
(ii) Analysis. (A) Under paragraph (b) of
this section, FA’s acquisition of the FT
specified stock from FT is a specified
transaction because stock of an expatriated
foreign subsidiary was issued to a specified
related person (FA) during the applicable
period. Furthermore, the exceptions to
recharacterization in paragraph (b)(2) of this
section do not apply to the transaction.
(B) FA’s acquisition of the FT specified
stock is recharacterized under paragraphs
(c)(1) and (2) of this section as follows, with
the result that FT continues to be a CFC even
before its taxable year beginning January 1,
2017:
(1) DT is treated as having issued deemed
instruments to FA in exchange for $6x of
cash.
(2) DT is treated as having contributed the
$6x of cash to FT in exchange for deemed
issued stock of FT.
(3) DT is treated as owning $8.40x of the
stock of FT, representing 84% of the total
voting power and value of the stock of FT.
USP owns $1.60x of the stock of FT,
representing 16% of the total voting power
and value of the stock of FT.
(C) Under paragraph (c)(4)(i) of this
section, any distribution with respect to the
FT specified stock issued to FA will be
treated as a distribution to DT, which, in
turn, will be treated as making a matching
distribution with respect to the deemed
instruments that DT is treated as having
issued to FA. Under paragraph (c)(4)(ii) of
this section, FT is treated as the paying agent
of DT with respect to the deemed
instruments issued by DT to FA.
Example 3. (i) Facts. DT owns stock of FT
representing 50% of the total voting power
and value of the $8x of stock of FT
outstanding, and the remaining stock of FT,
representing 50% of the total voting power
and value, is owned by USP, a domestic
corporation that is not an expatriated entity.
On April 30, 2016, FA and USP each
simultaneously acquire $1x of FT stock from
FT in a stock issuance, in exchange for $1x
of cash each.
(ii) Analysis. (A) Under paragraph (b) of
this section, FA’s acquisition of the FT
specified stock from FT is a specified
transaction because stock of an expatriated
foreign subsidiary was issued to a specified
related person (FA) during the applicable
period.
(B) However, the specified transaction is
not recharacterized under paragraphs (c)(1)
and (2) of this section because the exception
in paragraph (b)(2)(iii) of this section applies.
The exception applies because FT remains a
controlled foreign corporation immediately
after the specified transaction and any related
transaction, and the post-transaction
ownership percentage with respect to FT is
90% (90%/100%), or at least 90%, of the pretransaction ownership percentage with
respect to FT. The rule in paragraph
(b)(2)(iii)(C) of this section does not apply
because there is no lower-tier expatriated
foreign subsidiary. Although FA (a non-EFS
foreign related person) indirectly owns $4x of
FT stock both immediately before and after
PO 00000
Frm 00019
Fmt 4701
Sfmt 4700
32541
the specified transaction and any related
transaction, all of that stock is directly owned
by DT (a domestic corporation), and as a
result, under paragraph (f)(4) of this section,
none of that stock is treated as directly or
indirectly owned by FA for purposes of
calculating the pre-transaction ownership
percentage and the post-transaction
ownership percentage with respect to FT.
Accordingly, under paragraph (f)(8) of this
section, the pre-transaction ownership
percentage with respect to FT (100% less the
percentage of stock (by value) in FT that,
immediately before the specified transaction
with respect to FT and any related
transaction, is owned by non-EFS foreign
related persons) is 100 (100%¥0%). Under
paragraph (f)(9) of this section, the posttransaction ownership percentage with
respect to FT (100% less the percentage of
stock (by value) in FT that, immediately after
the specified transaction with respect to FT
and any related transaction, is owned by nonEFS foreign related persons) is 90
(100%¥10% ($1x/$10x)).
Example 4. (i) Facts. On February 1, 2015,
FA acquires 60% of the FT stock owned by
DT in exchange for $2.40x of cash in a fully
taxable transaction. DT recognizes and
includes in income all of the gain (including
any gain treated as a deemed dividend
pursuant to section 1248(a)) with respect to
the FT stock transferred to FA.
(ii) Analysis. (A) Under paragraph (b) of
this section, FA’s acquisition of the FT
specified stock is a specified transaction
because stock of an expatriated foreign
subsidiary was transferred to a specified
related person (FA) during the applicable
period.
(B) However, the specified transaction is
not recharacterized under paragraphs (c)(1)
and (c)(3) of this section because the
exception in paragraph (b)(2)(ii) of this
section applies. The exception applies
because DT recognizes and includes in
income all of the gain (including any gain
treated as a deemed dividend pursuant to
section 1248(a)) with respect to the FT
specified stock transferred to FA.
Example 5. (i) Facts. On February 1, 2015,
DT and FA organize FPRS, a foreign
partnership, with nominal capital. DT
transfers all of the stock of FT to FPRS in
exchange for 40% of the capital and profits
interests in the partnership. Furthermore, FA
contributes property to FPRS in exchange for
the other 60% of the capital and profits
interests.
(ii) Analysis. (A) Under paragraph (b) of
this section, DT’s transfer of the FT specified
stock is a specified transaction, because stock
of an expatriated foreign subsidiary was
transferred to a specified related person
(FPRS) during the applicable period. The
exceptions to recharacterization in paragraph
(b)(2) of this section do not apply to the
transaction.
(B) DT’s transfer of the FT specified stock
is recharacterized under paragraphs (c)(1)
and (c)(3) of this section as follows, with the
result that FT continues to be a CFC even
before its taxable year beginning January 1,
2017:
(1) FPRS is treated as having issued 40%
of its capital and profits interests to DT in
E:\FR\FM\12JYR2.SGM
12JYR2
amozie on DSK3GDR082PROD with RULES2
32542
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
exchange for deemed instruments treated as
having been issued by DT.
(2) DT is treated as continuing to own all
of the stock of FT, as well as the FPRS
interests.
(C) Under paragraph (c)(4)(i) of this
section, any distribution with respect to the
FT specified stock transferred to FPRS will
be treated as a distribution to DT, which, in
turn, will be treated as making a matching
distribution with respect to the deemed
instruments that DT is treated as having
issued to FPRS. Under paragraph (c)(4)(ii) of
this section, FT is treated as the paying agent
of DT with respect to the deemed
instruments issued by DT to FPRS.
Example 6. (i) Facts. DT wholly owns FT2,
a foreign corporation that is a controlled
foreign corporation. FT and FT2 each own
50% of the capital and profits interests in
DPRS, a domestic partnership. DPRS wholly
owns FT3, a foreign corporation that is a
controlled foreign corporation. FT2 and FT3
are expatriated foreign subsidiaries. On April
30, 2016, FS acquires $9x of the stock of each
of FT and FT2, representing 9% of the total
voting power and value of the stock of FT
and FT2, from FT and FT2, respectively, in
a stock issuance, in exchange for cash of $9x
each. Also on April 30, 2016, in a related
transaction, FS acquires $9x of the stock of
FT3, representing 9% of the total voting
power and value of the stock of FT3, from
FT3 in a stock issuance, in exchange for cash
of $9x.
(ii) Analysis. (A) Under paragraph (b) of
this section, the acquisitions by FS of the
specified stock of each of FT, FT2, and FT3
from FT, FT2, and FT3 are specified
transactions with respect to each of FT, FT2,
and FT3, respectively, because stock of an
expatriated foreign subsidiary was issued to
a specified related person (FS) during the
applicable period.
(B) If FS had acquired only stock of FT and
FT2, and had not acquired stock of FT3 in
a related transaction, the specified
transactions resulting from the acquisitions
with respect to FT and FT2 would not have
been recharacterized under paragraphs (c)(1)
and (2) of this section, because the exception
from recharacterization in paragraph
(b)(2)(iii) of this section would have applied.
FT and FT2 remain controlled foreign
corporations immediately after each specified
transaction and any related transaction.
Under paragraph (f)(9) of this section, the
post-transaction ownership percentage with
respect to each of FT, FT2, and FT3 (a lowertier expatriated foreign subsidiary of FT and
FT2) would have been 91% ((100%¥9%)/
(100%¥0%)), or at least 90%, of the pretransaction ownership percentage
determined under paragraph (f)(8) of this
section with respect to each of FT, FT2, and
FT3 (100%).
(C) However, for the specified transactions
with respect to FT, FT2, and FT3, the posttransaction ownership percentage
determined under paragraph (f)(9) of this
section with respect to FT3 (the lower-tier
expatriated foreign subsidiary of FT and
FT2), 100% less the percentage of stock (by
value) in FT3 that, immediately after each of
the specified transactions with respect to
each of FT and FT2 and any related
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
transaction, is owned by the non-EFS foreign
related persons, is 82.81 (100% ¥ (9% ×
50% × 91%)¥(9% × 50% × 91%)¥9%).
Accordingly, the post-transaction ownership
percentage with respect to FT3 is 82.81%
(82.81/(100%¥0%)), which is less than 90%,
of the pre-transaction ownership percentage
determined under paragraph (f)(8) of this
section with respect to FT3. Thus, the
exception from recharacterization in
paragraph (b)(2)(iii) of this section does not
apply with respect to the specified
transactions with respect to FT, FT2, or FT3.
(D) The specified transactions with respect
to FT and FT2 are recharacterized under
paragraphs (c)(1) and (2) of this section as
follows:
(1) DT is treated as having issued 2 deemed
instruments worth $9x each to FA in
exchange for $18x ($9x + $9x) of cash.
(2) DT is treated as having contributed $9x
of cash to each of FT and FT2 in exchange
for deemed issued stock of FT and FT2.
(3) DT is treated as continuing to own all
of the stock of FT and FT2.
(E) Under paragraph (c)(4)(i) of this section,
any distribution with respect to the FT and
FT2 specified stock issued to FS will be
treated as a distribution to DT, which, in
turn, will be treated as making a matching
distribution with respect to the deemed
instruments that DT is treated as having
issued to FS. Under paragraph (c)(4)(ii) of
this section, FT and FT2 are treated as the
paying agents of DT with respect to the
deemed instruments issued by DT to FS.
(F) The specified transaction with respect
to FT3 is recharacterized under paragraphs
(c)(1) and (2) of this section as follows:
(1) DPRS is treated as having issued a
deemed instrument worth $9x to FA in
exchange for $9x of cash.
(2) DPRS is treated as having contributed
$9x of cash to FT3 in exchange for deemed
issued stock of FT3.
(3) DPRS is treated as continuing to own
all of the stock of FT3.
(G) Under paragraph (c)(4)(i) of this
section, any distribution with respect to the
FT3 specified stock issued to FS will be
treated as a distribution to DPRS, which, in
turn, will be treated as making a matching
distribution with respect to the deemed
instruments that DPRS is treated as having
issued to FS. Under paragraph (c)(4)(ii) of
this section, FT3 is treated as the paying
agent of DPRS with respect to the deemed
instrument issued by DPRS to FS.
Example 7. (i) Facts. The facts are the same
as in Example 1 of this paragraph (g). On
April 30, 2016, FA transfers $4x of the FT
disregarded specified stock that it acquired
on February 1, 2015 to USP, a domestic
corporation that is not an expatriated entity,
in exchange for $4x of cash.
(ii) Results. After the transfer, FT remains
a foreign related person. Therefore, paragraph
(d)(2) of this section does not apply.
However, the $4x of FT disregarded specified
stock transferred to USP ceases to be held by
a foreign related person, a specified related
person, or an expatriated entity (determined
without taking into account paragraph (c)(2)
or (3) of this section). Therefore, under
paragraph (d)(3) of this section, immediately
before the transfer of the disregarded
PO 00000
Frm 00020
Fmt 4701
Sfmt 4700
specified stock, DT is deemed to transfer $4x
($6x × ($4x/$6x)) of the FT deemed issued
stock that it is treated as owning to FA, the
specified related person, in redemption of
$4x ($6x × ($4x/$6x)) of the DT deemed
instruments that FA is treated as owning, and
the $4x of FT deemed issued stock deemed
transferred to FA is deemed recapitalized
into disregarded specified stock actually held
by FA, which is thereafter treated as owned
by FA for all purposes of the Code until the
transfer to USP.
Example 8. (i) Facts. The facts are the
same as in Example 7 of this paragraph (g),
except that on April 30, 2016, FA transfers
all $6x of the FT disregarded specified stock
to USP in exchange for $6x of cash.
(ii) Results. After the transfer, FT ceases to
be a foreign related person (determined
without taking into account paragraph (c)(2)
or (3) of this section). Therefore, under
paragraph (d)(2) of this section, immediately
before the transfer of the disregarded
specified stock, DT is deemed to transfer the
$6x of FT deemed issued stock that it is
treated as owning to FA, the specified related
person, in redemption of the $6x of DT
deemed instruments that FA is treated as
owning, and the $6x of FT deemed issued
stock deemed transferred to FA is deemed
recapitalized into disregarded specified stock
actually held by FA, which is thereafter
treated as owned by FA for all purposes of
the Code until the transfer to USP.
Example 9. (i) Facts. The facts are the
same as in Example 7 of this paragraph (g),
except that on April 30, 2016, FA transfers
$5.5x of the FT disregarded specified stock
to USP in exchange for $5.5x of cash.
(ii) Results. After the transfer, FT ceases to
be a foreign related person (determined
without taking into account paragraph (c)(2)
or (3) of this section). Therefore, under
paragraph (d)(2) of this section, immediately
before the transfer of the disregarded
specified stock, DT is deemed to transfer the
$6x of FT deemed issued stock that it is
treated as owning to FA, the specified related
person, in redemption of the $6x of DT
deemed instruments that FA is treated as
owning, and the $6x of FT deemed issued
stock deemed transferred to FA is deemed
recapitalized into disregarded specified stock
actually held by FA, which is thereafter
treated as owned by FA for all purposes of
the Code and $5.5x of which is transferred
to USP. The remaining $0.5x of the specified
stock continues to be treated as owned by FA
for all purposes of the Code.
Example 10. (i) Facts. The facts are the
same as in Example 1 of this paragraph (g).
On April 30, 2016, FA transfers $5x of the
FT disregarded specified stock that it
acquired on February 1, 2015 to DS, a
domestic corporation wholly owned by DT,
in exchange for $5x of cash.
(ii) Results. After the transfer, FT remains
a foreign related person because DS is wholly
owned by DT. Therefore, paragraph (d)(2) of
this section does not apply. Furthermore, the
$5x of FT disregarded specified stock is not,
as a result of the transfer, held by a person
that is not a foreign related person, a
specified related person, or an expatriated
entity. Therefore, paragraph (d)(3) of this
section does not apply. Because FA, a
E:\FR\FM\12JYR2.SGM
12JYR2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
amozie on DSK3GDR082PROD with RULES2
specified related person, directly transferred
disregarded specified stock of FT in a
transaction to which paragraphs (d)(2) and
(3) of this section do not apply, under
paragraph (d)(4) of this section, FA is treated
as transferring the $5x of deemed
instruments of DT allocable to the $5x of ingroup transferred disregarded specified stock
($6x × ($5x/$6x)) to DS.
Example 11. (i) Facts. On February 1,
2015, FS acquires $6x of FT stock,
representing 60% of the total voting power
and value of the stock of FT, from FT in a
stock issuance, in exchange for $6x of cash.
The $6x of FT stock is specified stock, and
the transaction is recharacterized under
paragraph (c)(2) of this section. See Example
1 of this paragraph (g). On April 30, 2016, FA
transfers stock of FS representing 60% of the
total voting power and value of the stock of
FS to USP, a domestic corporation that is not
an expatriated entity. As a result of the
transfer, FS ceases to be a foreign related
person.
(ii) Results. After the February 1, 2015
transfer, FT remains a foreign related person
because the FT stock is acquired by FS, a
foreign related person with respect to DT at
that time. Therefore, paragraph (d)(2) of this
section does not apply. However, after the
April 30, 2016 transfer, because FS ceases to
be a foreign related person, it ceases to be a
specified related person. Furthermore, the
$6x of disregarded specified stock held
before the transaction continues to be held by
FS after the transaction, and therefore is not
held by a foreign related person, a specified
related person, or an expatriated entity after
the transaction. Accordingly, under
paragraph (d)(3) of this section, immediately
before the transfer of FS disregarded
specified stock, DT is deemed to transfer $6x
($6x × ($6x/$6x)) of the FT deemed issued
stock that it is treated as owning to FS, the
specified related person, in redemption of
$6x ($6x × ($6x/$6x)) of the DT deemed
instruments that FS is treated as owning, and
the $6x of FT deemed issued stock deemed
transferred to FS is deemed recapitalized into
disregarded specified stock actually held by
FS, which thereafter is treated as owned by
FS for all purposes of the Code, including
after the transfer of 60% of the FS stock to
USP.
Example 12. (i) Facts. The facts are the
same as in Example 1 of this paragraph (g).
On April 30, 2016, FP, a foreign corporation
that is not a foreign related person acquires
$15x of FT stock, representing 60% of the
total voting power and value of the stock of
FT, from FT in a stock issuance, in exchange
for $15x of cash.
(ii) Results. After the transaction, FT ceases
to be a foreign related person. Therefore,
under paragraph (d)(2) of this section,
immediately before the issuance of FT stock
to FP, DT is deemed to transfer the $6x of FT
deemed issued stock that it is treated as
owning to FA, the specified related person,
in redemption of the $6x of DT deemed
instruments that FA is treated as owning, and
the $6x of FT deemed issued stock deemed
transferred to FA is deemed recapitalized
into disregarded specified stock actually held
by FA, which thereafter is treated as owned
by FA for all purposes of the Code.
Example 13. (i) Facts. The facts are the
same as in Example 1 of this paragraph (g).
On April 30, 2016, FS acquires $4x of the FT
stock owned by DT in exchange for $4x of
cash in a fully taxable transaction. DT
recognizes and includes in income all of the
gain (including any gain treated as a deemed
dividend pursuant to section 1248(a)) with
respect to the FT stock transferred to FS.
(ii) Results. (A) The transfer of FT stock by
DT to FS is a specified transaction, but it is
not recharacterized under paragraphs (c)(1)
and (3) of this section because the exception
in paragraph (b)(2)(ii) of this section applies.
See Example 4 of this paragraph (g).
(B) After the transfer, FT remains a foreign
related person. Therefore, paragraph (d)(2) of
this section does not apply. The disregarded
specified stock of FT is not, as a result of the
transfer, held by a person that is not a foreign
related person, a specified related person, or
an expatriated entity. Therefore, paragraph
(d)(3) of this section does not apply. There
has been no direct transfer of specified stock.
Therefore, paragraph (d)(4) of this section
also does not apply.
(C) Under paragraph (d)(1) of this section,
the $6x of deemed issued stock treated as
owned by DT as a result of the specified
transaction in which FA acquired FT stock
continues to be treated as owned by DT, and
the $6x of deemed instruments treated as
issued by DT to FA continue to be treated as
owned by FA.
(h) Applicability date. Except as
otherwise provided in this paragraph
(h), this section applies to specified
transactions completed on or after
September 22, 2014, but only if the
inversion transaction was completed on
or after September 22, 2014. Paragraph
(b)(2)(ii)(A)(2) of this section applies to
specified transactions completed on or
after November 19, 2015, but only if the
inversion transaction was completed on
or after September 22, 2014. Paragraphs
(d) and (f)(5), (7), and (10) of this section
apply to specified transactions
completed on or after April 4, 2016, but
only if the inversion transaction was
Paragraph
Remove
(a), first sentence ...............................................
foreign corporation referred to in section
7874(a)(2)(B).
expanded affiliated group (EAG) that includes
such foreign corporation.
the ownership percentage determination required by section 7874(a)(2)(B)(ii).
fraction that determines such percentage
(ownership fraction).
acquisition ........................................................
(a), first sentence ...............................................
(b) .......................................................................
(b) .......................................................................
(c)(1), first sentence ...........................................
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
PO 00000
Frm 00021
Fmt 4701
Sfmt 4700
32543
completed on or after September 22,
2014. For inversion transactions
completed on or after September 22,
2014, however, taxpayers may elect to
apply paragraphs (d) and (f)(5), (7), and
(10) of this section to specified
transactions completed before April 4,
2016. In addition, for inversion
transactions completed on or after
September 22, 2014, in lieu of applying
paragraphs (d) and (f)(5) and (7) of this
section to specified transactions
completed on or after September 22,
2014, and before April 4, 2016,
taxpayers may elect to apply the
principles of § 1.7701(l)–3(c)(3)(iii).
Furthermore, for inversion transactions
completed on or after September 22,
2014, in lieu of applying paragraph
(f)(10) of this section to specified
transactions completed on or after
September 22, 2014, and before April 4,
2016, taxpayers may elect to define a
section 958(a) U.S. shareholder as a
United States shareholder with respect
to the expatriated foreign subsidiary that
owns (within the meaning of section
958(a)) stock in the expatriated foreign
subsidiary, but only if such United
States shareholder is related (within the
meaning of section 267(b) or 707(b)(1))
to the specified related person or is
under the same common control (within
the meaning of section 482) as the
specified related person.
§ 1.7701(l)–4T
[Removed]
Par. 12. Section 1.7701(l)–4T is
removed.
■
Par. 13. Section 1.7874–1 is amended
by:
■ 1. Adding a sentence at the end of
paragraph (a).
■ 2. Revising paragraph (c)(2)(iii).
■ 2. Redesignating paragraphs (d)
through (h) as paragraphs (e) through (i),
respectively.
■ 3. Adding a new paragraph (d).
■ 4. Revising newly redesignated
paragraphs (g) and (i)(2).
■ 5. For each paragraph listed in the
following table, removing the language
in the ‘‘Remove’’ column and adding in
its place the language in the ‘‘Add’’
column.
■
Add
foreign acquiring corporation.
expanded affiliated group.
determining the ownership percentage described in section 7874(a)(2)(B)(ii).
ownership fraction.
domestic entity acquisition.
E:\FR\FM\12JYR2.SGM
12JYR2
32544
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
Paragraph
Remove
Add
(c)(1), second sentence .....................................
(c)(2), introductory text .......................................
(c)(2)(i) ................................................................
(c)(2)(ii) ...............................................................
(c)(2)(ii) ...............................................................
(c)(3) ...................................................................
(c)(3) ...................................................................
§ 1.7874–4, see § 1.7874–4(h) ........................
an acquisition ...................................................
Before the acquisition ......................................
acquisition ........................................................
acquiring foreign corporation ...........................
acquisition results in ........................................
former shareholders or partners of the domestic entity.
acquisition ........................................................
(d)(2) ................................................................
other rules, see paragraph (d) of this section.
a domestic entity acquisition.
Before the domestic entity acquisition.
domestic entity acquisition.
foreign acquiring corporation.
domestic entity acquisition results in.
former domestic entity shareholders or former
domestic entity partners.
domestic entity acquisition.
(e)(2).
acquisitions ......................................................
an acquisition ...................................................
prior acquisitions ..............................................
domestic entity acquisitions.
a domestic entity acquisition.
domestic entity acquisitions completed before
May 20, 2008.
(f).
domestic entity acquisitions.
newly redesignated (e)(2) ...................................
newly redesignated (h), Example 6 (ii), third
sentence.
newly redesignated (i)(1), first sentence ............
newly redesignated (i)(1), second sentence ......
newly redesignated (i)(1), fourth sentence .........
newly redesignated (i)(1), fifth sentence ............
newly redesignated (i)(1), last sentence ............
The revisions and additions read as
follows:
amozie on DSK3GDR082PROD with RULES2
§ 1.7874–1
stock.
Disregard of affiliate-owned
(a) * * * For definitions that apply
for purposes of this section, see 1.7874–
12.
*
*
*
*
*
(c) * * *
(2) * * *
(iii) Special rule. If § 1.7874–6(c)(2)
applies for purposes of applying section
7874(c)(2)(A) and this section, then, for
purposes of paragraph (c)(2) of this
section (and so much of paragraph (c)(1)
of this section as relates to paragraph
(c)(2) of this section), the determination
of the EAG after the domestic entity
acquisition, as well as the determination
of stock held by one or more members
of the EAG after the domestic entity
acquisition, is made without regard to
one or more transfers (other than by
issuance), in a transaction (or series of
transactions) after and related to the
acquisition, of stock of the acquiring
foreign corporation by one or more
members of the foreign-parented group
described in § 1.7874–6(c)(2)(i).
*
*
*
*
*
(d) Interaction of expanded affiliated
group rules with other rules—(1)
Exclusion rules. Stock that is excluded
from the denominator of the ownership
fraction pursuant to § 1.7874–4(b),
1.7874–7(b), 1.7874–8(b), 1.7874–9(b),
or section 7874(c)(4) is taken into
account for purposes of determining
whether an entity is a member of the
expanded affiliated group for purposes
of applying section 7874(c)(2)(A) and
paragraph (b) of this section and
determining whether a domestic entity
acquisition qualifies as an internal
group restructuring or results in a loss
of control, as described in paragraphs
(c)(2) and (3) of this section,
respectively. However, such stock is
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
(e) .....................................................................
acquisitions ......................................................
excluded from the denominator of the
ownership fraction regardless of
whether it otherwise would be included
in the denominator of the ownership
fraction as a result of the application of
paragraph (c) of this section. See
Example 8 and Example 9 of § 1.7874–
4(i) for illustrations of the application of
this paragraph (d)(1).
(2) NOCD rule. Stock of the foreign
acquiring corporation treated as
received by former domestic entity
shareholders or former domestic entity
partners, as applicable, under § 1.7874–
10(b) is not taken into account for
purposes of determining whether an
entity is a member of the expanded
affiliated group for purposes of applying
section 7874(c)(2)(A) and paragraph (b)
of this section and determining whether
a domestic entity acquisition qualifies
as an internal group restructuring or
results in a loss of control, as described
in paragraphs (c)(2) and (3) of this
section, respectively. However, such
stock is included in the numerator and
denominator of the ownership fraction,
except to the extent that it is treated as
held by a member of the EAG and is
excluded from the numerator or both
the numerator and the denominator, as
applicable, under section 7874(c)(2)(A)
or paragraphs (b) or (c) of this section.
*
*
*
*
*
(g) Treatment of transactions related
to the acquisition. Except as provided in
paragraph (c)(2)(iii) of this section, all
transactions that are related to an
acquisition are taken into account in
applying this section.
*
*
*
*
*
(i) * * *
(2) Applicability date of certain
provisions of this section. Except as
provided in this paragraph (i)(2),
paragraph (c)(2)(iii) of this section
applies to domestic entity acquisitions
completed on or after April 4, 2016.
PO 00000
Frm 00022
Fmt 4701
Sfmt 4700
Except as provided in this paragraph
(i)(2), paragraph (d) of this section
(interaction of EAG rules with other
rules) applies to domestic entity
acquisitions completed on or after July
12, 2018. See §§ 1.7874–4(h) and
1.7874–7T(e), as contained in 26 CFR
part 1 revised as of April 1, 2017, for
certain coordination rules for domestic
entity acquisitions completed before
July 12, 2018. Except as provided in this
paragraph (i)(2), paragraph (g) of this
section applies to domestic entity
acquisitions completed on or after
September 22, 2014. For domestic entity
acquisitions completed before April 4,
2016, however, taxpayers may elect to
consistently apply paragraphs (c)(2)(iii)
and (g) of this section, and § 1.7874–
6(c)(2), (d)(2), and (f)(2)(ii). In addition,
for domestic entity acquisitions
completed before July 12, 2018,
taxpayers may elect to consistently
apply paragraph (d) of this section.
§ 1.7874–1T
[Removed]
Par. 14. Section 1.7874–1T is
removed.
■ Par. 15. Section 1.7874–2 is amended
by:
■ 1. Revising paragraph (a).
■ 2. Removing the language ‘‘§ 1.7874–
12T’’ in paragraph (b) introductory text,
and adding the language ‘‘§ 1.7874–12’’
in its place.
■ 3. Revising paragraphs (b)(7) through
(13), (c)(2) and (4), (f)(1) introductory
text, (f)(1)(iv), Example 21 of paragraph
(k)(2), and paragraph (l)(2).
The revisions read as follows:
■
§ 1.7874–2
Surrogate foreign corporation.
(a) Scope. This section provides rules
for determining whether a foreign
corporation is treated as a surrogate
foreign corporation under section
7874(a)(2)(B). Paragraph (b) of this
section provides definitions and special
rules. Paragraph (c) of this section
E:\FR\FM\12JYR2.SGM
12JYR2
amozie on DSK3GDR082PROD with RULES2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
provides rules to determine whether a
foreign corporation has acquired
properties held by a domestic
corporation (or a partnership).
Paragraph (d) of this section provides
rules that apply when two or more
foreign corporations complete, in the
aggregate, a domestic entity acquisition.
Paragraph (e) of this section provides
rules that apply when, pursuant to a
plan, a single foreign corporation
completes more than one domestic
entity acquisition. Paragraph (f) of this
section provides rules to identify the
stock of a foreign corporation that is
held by reason of holding stock in a
domestic corporation (or an interest in
a domestic partnership). Paragraph (g) of
this section provides rules that treat
certain publicly traded foreign
partnerships as foreign corporations for
purposes of section 7874. Paragraph (h)
of this section provides rules concerning
the treatment of certain options (or
similar interests) for purposes of section
7874. Paragraph (i) of this section
provides rules that treat certain interests
(including debt, stock, or a partnership
interest) as stock of a foreign
corporation for purposes of section
7874. Paragraph (j) of this section
provides rules concerning the
conversion of a foreign corporation to a
domestic corporation by reason of
section 7874(b). Paragraph (k) of this
section provides examples that illustrate
the rules of this section. Paragraph (l) of
this section provides the applicability
dates of this section. For additional
definitions that apply for purposes of
this section, see § 1.7874–12.
(b) * * *
(7) A former initial acquiring
corporation shareholder of an initial
acquiring corporation means any person
that held stock in the initial acquiring
corporation before the subsequent
acquisition, including any person that
holds stock in the initial acquiring
corporation both before and after the
subsequent acquisition.
(8) An initial acquisition means, with
respect to a subsequent acquisition, a
domestic entity acquisition occurring,
pursuant to a plan that includes the
subsequent acquisition (or a series of
related transactions), before the
subsequent acquisition.
(9) An initial acquiring corporation
means, with respect to an initial
acquisition, the foreign acquiring
corporation.
(10) A subsequent acquisition means,
with respect to an initial acquisition, a
transaction occurring, pursuant to a
plan that includes the initial acquisition
(or a series of related transactions), after
the initial acquisition in which a foreign
corporation directly or indirectly
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
acquires (within the meaning of
paragraph (c)(4)(ii) of this section)
substantially all of the properties held
directly or indirectly by the initial
acquiring corporation.
(11) A subsequent acquiring
corporation means, with respect to a
subsequent acquisition, the foreign
corporation that directly or indirectly
acquires substantially all of the
properties held directly or indirectly by
the initial acquiring corporation.
(12) Special rule regarding initial
acquisitions. With respect to an initial
acquisition, the determination of the
ownership percentage described in
section 7874(a)(2)(B)(ii) is made without
regard to the subsequent acquisition and
all related transactions occurring after
the subsequent acquisition.
(13) Special rule regarding subsequent
acquisitions. With respect to a
subsequent acquisition (or a similar
acquisition under the principles of
paragraph (c)(4)(i) of this section) that is
an inversion transaction, the applicable
period begins on the first date that
properties are acquired as part of the
initial acquisition.
(c) * * *
(2) Acquisition of stock of a foreign
corporation. Except as provided in
paragraph (c)(4) of this section, an
acquisition of stock of a foreign
corporation that owns directly or
indirectly stock of a domestic
corporation (or an interest in a
partnership) shall not constitute an
indirect acquisition of any properties
held by the domestic corporation (or the
partnership). See Example 4 of
paragraph (k) of this section for an
illustration of the rules of this paragraph
(c)(2).
*
*
*
*
*
(4) Multiple-step acquisitions—(i)
Rule. A subsequent acquisition is
treated as a domestic entity acquisition,
and the subsequent acquiring
corporation is treated as a foreign
acquiring corporation. See Example 21
of paragraph (k) of this section for an
illustration of this rule. See also
paragraph (f)(1)(iv) of this section
(treating certain stock of the subsequent
acquiring corporation as stock of a
foreign corporation that is held by
reason of holding stock of, or a
partnership interest in, the domestic
entity).
(ii) Acquisition of property pursuant
to a subsequent acquisition. In
determining whether a foreign
corporation directly or indirectly
acquires substantially all of the
properties held directly or indirectly by
an initial acquiring corporation, the
principles of section 7874(a)(2)(B)(i)
PO 00000
Frm 00023
Fmt 4701
Sfmt 4700
32545
apply, including paragraph (c) of this
section other than paragraph (c)(2) of
this section. For this purpose, the
principles of paragraph (c)(1) of this
section, including paragraph (b)(5) of
this section, apply by substituting the
term ‘‘foreign’’ for ‘‘domestic’’ wherever
it appears.
(iii) Additional related transactions.
If, pursuant to the same plan (or a series
of related transactions), a foreign
corporation directly or indirectly
acquires (under the principles of
paragraph (c)(4)(ii) of this section)
substantially all of the properties
directly or indirectly held by a
subsequent acquiring corporation in a
transaction occurring after the
subsequent acquisition, then the
principles of paragraph (c)(4)(i) of this
section apply to such transaction (and
any subsequent transaction or
transactions occurring pursuant to the
plan (or the series of related
transactions)).
*
*
*
*
*
(f) * * *
(1) Certain transactions. For purposes
of section 7874(a)(2)(B)(ii), stock of a
foreign corporation that is held by
reason of holding stock in a domestic
corporation (or an interest in a domestic
partnership) includes, but is not limited
to, the stock described in paragraphs
(f)(1)(i) through (iv) of this section.
*
*
*
*
*
(iv) Stock of a subsequent acquiring
corporation received by a former initial
acquiring corporation shareholder
pursuant to a subsequent acquisition in
exchange for, or with respect to, stock
of an initial acquiring corporation that
is held by reason of holding stock of, or
a partnership interest in, a domestic
entity.
*
*
*
*
*
(k) * * *
(2) * * *
Example 21. Application of multiple-step
acquisition rule—(i) Facts. Individual A
owns all 70 shares of stock of DC1, a
domestic corporation. Individual B owns all
30 shares of stock of F1, a foreign corporation
that is a tax resident (as described in
§ 1.7874–3(d)(11)) of Country X. Pursuant to
a reorganization described in section
368(a)(1)(D), DC1 transfers all of its
properties to F1 solely in exchange for 70
newly issued voting shares of F1 stock (DC1
acquisition) and distributes the F1 stock to
Individual A in liquidation pursuant to
section 361(c)(1). Pursuant to a plan that
includes the DC1 acquisition, F2, a newly
formed foreign corporation that is also a tax
resident of Country X, acquires 100 percent
of the stock of F1 solely in exchange for 100
newly issued shares of F2 stock (F1
acquisition). After the F1 acquisition,
Individual A owns 70 shares of F2 stock,
Individual B owns 30 shares of F2 stock, F2
E:\FR\FM\12JYR2.SGM
12JYR2
32546
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
owns all 100 shares of F1 stock, and F1 owns
all the properties held by DC1 immediately
before the DC1 acquisition. In addition, the
form of the transaction is respected for U.S.
federal income tax purposes.
(ii) Analysis—(A) The DC1 acquisition is a
domestic entity acquisition, and F1 is a
foreign acquiring corporation, because F1
directly acquires 100 percent of the
properties of DC1. In addition, the 70 shares
of F1 stock received by A pursuant to the
DC1 acquisition in exchange for Individual
A’s DC1 stock are stock of a foreign
corporation that is held by reason of holding
stock in DC1. As a result, those 70 shares are
included in both the numerator and the
denominator of the ownership fraction when
applying section 7874 to the DC1 acquisition.
(B) The DC1 acquisition is also an initial
acquisition because it is a domestic entity
acquisition that, pursuant to a plan that
includes the F1 acquisition, occurs before the
F1 acquisition (which, as described in
paragraph (ii)(C) of this Example 21, is a
subsequent acquisition). Thus, F1 is the
initial acquiring corporation.
(C) The F1 acquisition is a subsequent
acquisition because it occurs, pursuant to a
plan that includes the DC1 acquisition, after
the DC1 acquisition and, pursuant to the F1
acquisition, F2 acquires 100 percent of the
(l) * * *
(2) Applicability date of certain
provisions of this section. Paragraphs
(a), (b)(7) through (13), (c)(2) and (4),
and (f)(1)(iv) of this section, as well as
the introductory text of paragraph (f)(1)
Paragraph
Remove
(b), introductory text ...........................................
after an acquisition described in section
7874(a)(2)(B)(i).
acquisition
described
in
section
7874(a)(2)(B)(i).
acquisition date ................................................
acquisition date ................................................
acquisition date ................................................
(c)(1)(iii) ..............................................................
newly redesignated (d)(1)(i) ...............................
newly redesignated (d)(1)(ii) ...............................
newly redesignated (d)(3), first, second, third,
and fifth sentences.
newly redesignated (d)(9) ...................................
(f)(1) ....................................................................
The revisions and addition read as
follows:
§ 1.7874–3
Substantial business activities.
*
amozie on DSK3GDR082PROD with RULES2
stock of F1 and therefore is treated under
paragraph (c)(4)(ii) of this section (which
applies the principles of section
7874(a)(2)(B)(i) with certain modifications) as
indirectly acquiring substantially all of the
properties held directly or indirectly by F1.
Thus, F2 is the subsequent acquiring
corporation.
(D) Under paragraph (c)(4)(i) of this
section, the F1 acquisition is treated as a
domestic entity acquisition, and F2 is treated
as a foreign acquiring corporation. In
addition, under paragraph (f)(1)(iv) of this
section, the 70 shares of F2 stock received by
Individual A (a former initial acquiring
corporation shareholder) pursuant to the F1
acquisition in exchange for Individual A’s F1
stock are stock of a foreign corporation that
is held by reason of holding stock in DC1. As
a result, those 70 shares are included in both
the numerator and the denominator of the
ownership fraction when applying section
7874 to the F1 acquisition.
*
*
*
*
(b) * * *
(4) Tax residence of foreign acquiring
corporation. The foreign acquiring
corporation is a tax resident of the
relevant foreign country. However, this
paragraph (b)(4) does not apply if the
relevant foreign country does not
impose corporate income tax.
*
*
*
*
*
(d) Definitions and special rules. In
addition to the definitions in § 1.7874–
12, the following definitions and special
rules apply for purposes of this section.
*
*
*
*
*
(8) The term relevant financial
statements means financial statements
prepared consistently for all members of
the expanded affiliated group in
accordance with either U.S. Generally
Accepted Accounting Principles (U.S.
GAAP) or the International Financial
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
Reporting Standards (IFRS) used for the
expanded affiliated group’s
consolidated financial statements, but,
if, after the domestic entity acquisition,
financial statements will not be
prepared consistently for all members of
the expanded affiliated group in
accordance with either U.S. GAAP or
IFRS, then, for each member, financial
statements prepared in accordance with
either U.S. GAAP or IFRS. The relevant
financial statements must take into
account all items of income generated
by all members of the expanded
affiliated group for the entire testing
period.
*
*
*
*
*
(11) The term tax resident means,
with respect to a foreign country, a body
corporate liable to tax under the laws of
the country as a resident.
*
*
*
*
*
(f) * * *
(2) Paragraphs (b)(4), (d)(8), and
(d)(11) of this section. The first sentence
Frm 00024
Fmt 4701
Sfmt 4700
§ 1.7874–2T
[Removed]
Par. 16. Section 1.7874–2T is
removed.
■ Par. 17. Section 1.7874–3 is amended
by:
■ 1. Revising paragraph (b)(4).
■ 2. Revising the introductory text of
paragraph (d).
■ 3. Removing paragraphs (d)(1) and
(d)(4).
■ 4. Redesignating paragraphs (d)(2),
(d)(3), (d)(5) through (12), and (d)(13) as
paragraphs (d)(1), (d)(2), (d)(3) through
(10), and (d)(12), respectively.
■ 5. Revising newly redesignated
paragraph (d)(8).
■ 6. Adding paragraph (d)(11).
■ 7. Revising paragraph (f)(2).
■ 8. For each paragraph listed in the
following table, removing the language
in the ‘‘Remove’’ column and adding in
its place the language in the ‘‘Add’’
column.
■
Add
foreign corporation described in section
7874(a)(2)(B).
acquisitions ......................................................
PO 00000
and Example 21 of paragraph (k)(2),
apply to domestic entity acquisitions
completed on or after April 4, 2016.
on the completion date.
domestic entity acquisition.
completion date.
completion date.
completion date.
foreign acquiring corporation.
domestic entity acquisitions.
of paragraph (b)(4) of this section
applies to domestic entity acquisitions
completed on or after November 19,
2015, and the second sentence applies
to domestic entity acquisitions
completed on or after July 12, 2018.
Paragraph (d)(8) of this section applies
to domestic entity acquisitions
completed on or after April 4, 2016.
Paragraph (d)(11) of this section applies
to domestic entity acquisitions
completed on or after July 12, 2018. For
domestic entity acquisitions completed
on or after June 3, 2015, and before
April 4, 2016, however, taxpayers may
elect to apply paragraph (d)(8) of this
section. For domestic entity acquisitions
completed on or after November 19,
2015, and before July 12, 2018,
taxpayers may elect to apply the second
sentence of paragraph (b)(4) and
paragraph (d)(11) of this section.
§ 1.7874–3T
[Removed]
Par. 18. Section 1.7874–3T is
removed.
■
E:\FR\FM\12JYR2.SGM
12JYR2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
Par. 19. Section 1.7874–4 is amended
by:
■ 1. Revising the seventh sentence of
paragraph (a), and adding a sentence at
the end of paragraph (a).
■ 2. Revising paragraph (d)(1)(ii).
■ 3. Removing paragraph (h).
amozie on DSK3GDR082PROD with RULES2
■
4. Redesignating paragraphs (i), (j),
and (k) as paragraphs (h), (i), and (j),
respectively.
■ 5. In newly redesignated paragraph
(j)(1), removing the language ‘‘(d)(1)(ii),’’
from the fourth and seventh sentences
■
32547
and adding two sentences at the end of
the paragraph.
■ 6. For each paragraph listed in the
following table, removing the language
in the ‘‘Remove’’ column and adding in
its place the language in the ‘‘Add’’
column.
Paragraph
Remove
(a), eighth sentence ...........................................
(a), ninth sentence .............................................
(a), tenth sentence .............................................
(c)(1)(i), second sentence ..................................
(c)(1)(ii)(A), last sentence ...................................
(c)(2), last sentence ...........................................
(d)(1)(i) ................................................................
(d)(1)(ii), last sentence .......................................
newly redesignated (h), introductory text ...........
newly redesignated (h)(1), last sentence ...........
newly redesignated (h)(1), last sentence ...........
newly redesignated (h)(2), introductory text, first
sentence.
newly redesignated (h)(2), introductory text,
second sentence.
newly redesignated (h)(2)(ii) ...............................
newly redesignated (h)(2)(iii)(A), last sentence
newly redesignated (h)(2)(iii)(A), last sentence
newly redesignated (h)(2)(iii)(C)(2) ....................
newly redesignated (h)(2)(iv), first sentence ......
newly redesignated (h)(2)(iv), last sentence ......
newly redesignated (h)(2)(iv), last sentence ......
newly redesignated (i)(10) ..................................
newly redesignated (i)(11) ..................................
newly redesignated (i), Example 1 (i), second
sentence.
newly redesignated (i), Example 1 (ii), first sentence.
newly redesignated (i), Example 2 (i), second
sentence.
newly redesignated (i), Example 2 (ii), first and
fifth sentences.
newly redesignated (i), Example 3 (i), last sentence.
newly redesignated (i), Example 3 (ii), first and
fifth sentences.
newly redesignated (i), Example 4 (ii), first sentence.
newly redesignated (i), Example 4 (ii), first sentence.
newly redesignated (i), Example 4 (iii), sixth
sentence.
newly redesignated (i), Example 5 (ii), first sentence.
newly redesignated (i), Example 5 (ii), fourth
sentence.
newly redesignated (i), Example 6 (ii), first sentence.
newly redesignated (i), Example 7 (ii), first sentence.
newly redesignated (i), Example 8 (ii), first sentence.
newly redesignated (i), Example 8 (ii), fifth sentence.
newly redesignated (i), Example 9 (i), last sentence.
newly redesignated (i), Example 9 (ii), first sentence.
newly redesignated (i), Example 9 (ii), fifth sentence.
newly redesignated (i), Example 9 (ii), penultimate sentence.
newly redesignated (i), Example 9 (iii), first sentence.
(i) ......................................................................
(j) ......................................................................
(k) .....................................................................
(j) ......................................................................
(j) ......................................................................
(j) ......................................................................
§§ 1.7874–7T(b) and 1.7874–10T(b) ...............
(j) ......................................................................
§ 1.7874–12T ...................................................
(j) ......................................................................
(i)(1) ..................................................................
(i)(2)(i) ..............................................................
(h).
(i).
(j).
(i).
(i).
(i).
§§ 1.7874–7(b) and 1.7874–10(b).
(i).
§ 1.7874–12.
(i).
(h)(1).
(h)(2)(i).
(i)(2)(ii) ..............................................................
(h)(2)(ii).
(i)(1) ..................................................................
(j) ......................................................................
(i)(2)(iii)(A) ........................................................
(i)(2)(iii)(B) ........................................................
(i)(2)(i) ..............................................................
(j) ......................................................................
(i)(2)(iv) .............................................................
§ 1.7874–7T(b) .................................................
§ 1.7874–10T(b) ...............................................
(i)(1) ..................................................................
(h)(1).
(i).
(h)(2)(iii)(A).
(h)(2)(iii)(B).
(h)(2)(i).
(i).
(h)(2)(iv).
§ 1.7874–7(b).
§ 1.7874–10(b).
(h)(1).
(i)(2)(ii) ..............................................................
(h)(2)(ii).
(i)(1) ..................................................................
(h)(1).
(i)(2)(iv) .............................................................
(h)(2)(iv).
(i)(2)(i) ..............................................................
(h)(2)(i).
(i)(2)(iv) .............................................................
(h)(2)(iv).
(i)(1) ..................................................................
(h)(1).
(i)(2)(ii) ..............................................................
(h)(2)(ii).
(i)(2)(ii) ..............................................................
(h)(2)(ii).
(i)(2)(i) ..............................................................
(h)(2)(i).
§§ 1.7874–7T(b) and 1.7874–10T(b) ...............
§§ 1.7874–7(b) and 1.7874–10(b).
(i)(2)(iii)(A) ........................................................
(h)(2)(iii)(A).
(i)(2)(i) ..............................................................
(h)(2)(i).
(i)(2)(i) ..............................................................
(h)(2)(i).
paragraph (h) of this section ............................
§ 1.7874–1(d)(1).
(i)(1) ..................................................................
(h)(1).
(i)(2)(ii) ..............................................................
(h)(2)(ii).
paragraph (h) of this section ............................
§ 1.7874–1(d)(1).
paragraphs (b) and (h) of this section .............
paragraph (b) of this section and § 1.7874–
1(d)(1).
(h)(1).
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
Add
(i)(1) ..................................................................
PO 00000
Frm 00025
Fmt 4701
Sfmt 4700
E:\FR\FM\12JYR2.SGM
12JYR2
32548
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
Paragraph
Remove
newly redesignated (i), Example 9 (iii), first sentence.
newly redesignated (i), Example 9 (iii), fifth sentence.
newly redesignated (i), Example 9 (iii), tenth
sentence.
newly redesignated (j)(1), first sentence ............
newly redesignated (j)(1), second sentence ......
newly redesignated (j)(1), fourth sentence .........
newly redesignated (j)(1), fifth sentence ............
newly redesignated (j)(1), last sentence ............
newly redesignated (j)(1), last sentence ............
newly redesignated (j)(2), introductory text ........
newly redesignated (j)(2)(i) .................................
newly redesignated (j)(2)(iv) ...............................
(i)(2) ..................................................................
(h)(2).
paragraph (h) of this section ............................
§ 1.7874–1(d)(1).
paragraphs (b) and (h) of this section .............
(k) .....................................................................
(i)(1) and (i)(2)(iv) .............................................
(i)(2)(iii), and (i)(3) ............................................
(i)(1) and (i)(2)(iv) .............................................
(i)(2)(iii) .............................................................
(i)(3) ..................................................................
(k)(3) .................................................................
(i)(2)(iii) .............................................................
paragraphs (d) and (h) of this section .............
newly redesignated (j)(3), first sentence ............
(k)(1) .................................................................
paragraph (b) of this section and § 1.7874–
1(d)(1).
(j).
(h)(1) and (h)(2)(iv).
(h)(2)(iii), and (h)(3).
(h)(1) and (h)(2)(iv).
(h)(2)(iii).
(h)(3).
(j)(3).
(h)(2)(iii).
Paragraph (d) of this section and § 1.7874–
1(d)(1).
(j)(1).
The revisions and addition read as
follows:
§ 1.7874–4 Disregard of certain stock
related to the domestic entity acquisition.
(a) * * * Paragraph (g) of this section
provides rules for the treatment of
partnerships, and paragraph (h) of this
section provides definitions. * * * See
§ 1.7874–1(d)(1) for rules addressing the
interaction of this section with the
expanded affiliated group rules of
section 7874(c)(2)(A) and § 1.7874–1.
*
*
*
*
*
(d) * * *
(1) * * *
(ii) On the completion date, each five
percent former domestic entity
shareholder or five percent former
domestic entity partner, as applicable,
owns (applying the attribution rules of
section 318(a) with the modifications
described in section 304(c)(3)(B)) less
than five percent (by vote and value) of
the stock of (or a partnership interest in)
each member of the expanded affiliated
group. For this purpose, a five percent
former domestic entity shareholder (or
five percent former domestic entity
partner) is a former domestic entity
shareholder (or former domestic entity
partner) that, before the domestic entity
acquisition, owned (applying the
attribution rules of section 318(a) with
the modifications described in section
304(c)(3)(B)) at least five percent (by
vote and value) of the stock of (or a
partnership interest in) the domestic
entity. See Example 5 of this paragraph
(i) for an illustration of this paragraph
(d).
*
*
*
*
*
Paragraph
Remove
(c) .......................................................................
(d) .......................................................................
§ 1.7874–6T .....................................................
§ 1.7874–12T ...................................................
Par. 21. Section 1.7874–6 is added to
read as follows:
■
§ 1.7874–6 Stock transferred by members
of the EAG.
amozie on DSK3GDR082PROD with RULES2
Add
(a) Scope. This section provides rules
regarding whether transferred stock is
treated as held by members of the EAG
for purposes of applying section
7874(c)(2)(A) and § 1.7874–1. Paragraph
(b) of this section sets forth the general
rule under which transferred stock is
not treated as held by members of the
EAG for purposes of applying section
7874(c)(2)(A) and § 1.7874–1. Paragraph
(c) of this section provides exceptions to
the general rule. Paragraph (d) of this
section provides rules regarding the
treatment of partnerships, and
paragraph (e) of this section provides
rules regarding transactions related to
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
Frm 00026
Fmt 4701
Sfmt 4700
§ 1.7874–5
[Amended]
Par. 20. For each paragraph listed in
the following table, removing the
language in the ‘‘Remove’’ column and
adding in its place the language in the
‘‘Add’’ column.
■
Add
the acquisition. Paragraph (f) of this
section provides definitions. Paragraph
(g) of this section provides examples
illustrating the application of the rules
of this section. Paragraph (h) of this
section provides dates of applicability.
(b) General rule. Except as provided
in paragraph (c) of this section,
transferred stock is not treated as held
by members of the EAG for purposes of
applying section 7874(c)(2)(A) and
§ 1.7874–1. Transferred stock that is not
treated as held by members of the EAG
for purposes of applying section
7874(c)(2)(A) and § 1.7874–1 is included
in the numerator and the denominator
of the ownership fraction. See § 1.7874–
5(a).
(c) Exceptions. Transferred stock is
treated as held by members of the EAG
for purposes of applying section
PO 00000
(j) * * *
(1) * * * Paragraph (d)(1)(ii) of this
section applies to domestic entity
acquisitions completed on or after July
12, 2018, though taxpayers may elect to
consistently apply paragraph (d)(1)(ii) of
this section to domestic entity
acquisitions completed before July 12,
2018. For domestic entity acquisitions
completed before July 12, 2018, see
§ 1.7874–4(d)(1)(ii) as contained in 26
CFR part 1 revised as of April 1, 2017.
*
*
*
*
*
§ 1.7874–6.
§ 1.7874–12.
7874(c)(2)(A) and § 1.7874–1 if
paragraph (c)(1) or (2) of this section
applies. Transferred stock that is treated
as held by members of the EAG for
purposes of applying section
7874(c)(2)(A) and § 1.7874–1 is
excluded from the numerator of the
ownership fraction and, depending
upon the application of § 1.7874–1(c),
may be excluded from the denominator
of the ownership fraction. See § 1.7874–
1(b) and (c).
(1) Transfers involving a U.S.parented group. This paragraph (c)(1)
applies if the following conditions are
satisfied:
(i) Before the domestic entity
acquisition, the transferring corporation
is a member of a U.S.-parented group.
(ii) After the domestic entity
acquisition, each of the transferring
E:\FR\FM\12JYR2.SGM
12JYR2
amozie on DSK3GDR082PROD with RULES2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
corporation (or its successor), any
person that holds transferred stock, and
the foreign acquiring corporation are
members of a U.S.-parented group the
common parent of which—
(A) Before the domestic entity
acquisition, was a member of the U.S.parented group described in paragraph
(c)(1)(i) of this section; or
(B) Is a corporation that was formed
in a transaction related to the domestic
entity acquisition, provided that,
immediately after the corporation was
formed (and without regard to any
related transactions), the corporation
was a member of the U.S.-parented
group described in paragraph (c)(1)(i) of
this section.
(2) Transfers involving a foreignparented group. This paragraph (c)(2)
applies if the following conditions are
satisfied:
(i) Before the domestic entity
acquisition, the transferring corporation
and the domestic entity are members of
the same foreign-parented group.
(ii) After the domestic entity
acquisition, the transferring
corporation—
(A) Is a member of the EAG; or
(B) Would be a member of the EAG
absent one or more transfers (other than
by issuance), in a transaction (or series
of transactions) after and related to the
domestic entity acquisition, of stock of
the foreign acquiring corporation by one
or more members of the foreignparented group described in paragraph
(c)(2)(i) of this section.
(d) Treatment of partnerships—(1)
Stock held by a partnership. For
purposes of this section, each partner in
a partnership, as determined without
regard to the application of paragraph
(d)(2) of this section, is treated as
holding its proportionate share of the
stock held by the partnership, as
determined under the rules and
principles of sections 701 through 777.
(2) Partnership treated as corporation.
For purposes of this section, if one or
more members of an affiliated group, as
determined after the application of
paragraph (d)(1) of this section, own, in
the aggregate, more than 50 percent (by
value) of the interests in a partnership,
the partnership will be treated as a
corporation that is a member of the
affiliated group.
(e) Treatment of transactions related
to the acquisition. Except as provided in
paragraphs (c)(1)(ii)(B) and (c)(2)(ii)(B)
of this section, all transactions that are
related to a domestic entity acquisition
are taken into account in applying this
section.
(f) Definitions. In addition to the
definitions provided in § 1.7874–12, the
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
following definitions apply for purposes
of this section.
(1) A foreign-parented group means
an affiliated group that has a foreign
corporation as the common parent
corporation. A member of the foreignparented group is an entity included in
the foreign-parented group.
(2) Transferred stock—(i) In general.
Transferred stock means stock of the
foreign acquiring corporation described
in section 7874(a)(2)(B)(ii) that is
received by a transferring corporation
and, in a transaction (or series of
transactions) related to the domestic
entity acquisition, is subsequently
transferred.
(ii) Special rule. This paragraph
(f)(2)(ii) applies in certain cases in
which a transferring corporation
receives stock of the foreign acquiring
corporation described in section
7874(a)(2)(B)(ii) that has the same terms
as other stock of the foreign acquiring
corporation that is received by the
transferring corporation in a transaction
(or series of transactions) related to the
domestic entity acquisition or that is
owned by the transferring corporation
prior to the domestic entity acquisition
(the stock described in this sentence,
collectively, fungible stock). Pursuant to
this paragraph (f)(2)(ii), if, in a
transaction (or series of transactions)
related to the domestic entity
acquisition, the transferring corporation
subsequently transfers less than all of
the fungible stock, a pro rata portion of
the stock subsequently transferred is
treated as consisting of stock of the
foreign acquiring corporation described
in section 7874(a)(2)(B)(ii). The pro rata
portion is based, at the time of the
subsequent transfer, on the relative fair
market value of the fungible stock that
is stock of the foreign acquiring
corporation described in section
7874(a)(2)(B)(ii) to the fair market value
of all the fungible stock.
(3) A transferring corporation means a
corporation that is a former domestic
entity shareholder or former domestic
entity partner.
(4) A U.S.-parented group means an
affiliated group that has a domestic
corporation as the common parent
corporation. A member of the U.S.parented group is an entity included in
the U.S.-parented group, including the
common parent corporation.
(g) Examples. The following examples
illustrate the application of this section.
Example 1. U.S.-parented group exception
not available—(i) Facts. USP, a domestic
corporation wholly owned by Individual A,
owns all the stock of DT, a domestic
corporation, as well as other property. The
DT stock does not represent substantially all
of the property of USP for purposes of section
PO 00000
Frm 00027
Fmt 4701
Sfmt 4700
32549
7874. Pursuant to a reorganization described
in section 368(a)(1)(D), USP transfers all the
DT stock to FA, a newly formed foreign
corporation, in exchange for 100 shares of FA
stock (DT acquisition) and distributes the FA
stock to Individual A pursuant to section
361(c)(1).
(ii) Analysis. The 100 FA shares received
by USP are stock of a foreign acquiring
corporation described in section
7874(a)(2)(B)(ii) and, under § 1.7874–5(a), the
shares retain their status as such even though
USP subsequently distributes the shares to
Individual A pursuant to section 361(c)(1).
Thus, the 100 FA shares are included in the
ownership fraction, unless the shares are
treated as held by members of the EAG for
purposes of applying section 7874(c)(2)(A)
and § 1.7874–1 and are excluded from the
ownership fraction under those rules. For
purposes of applying section 7874(c)(2)(A)
and § 1.7874–1, the 100 FA shares, which
constitute transferred stock under paragraph
(f)(2) of this section, are treated as held by
members of the EAG only if an exception in
paragraph (c) of this section applies. See
paragraph (b) of this section. The U.S.parented group exception described in
paragraph (c)(1) of this section does not
apply. Although before the DT acquisition,
USP (the transferring corporation) is a
member of a U.S.-parented group of which
USP is the common parent, after the DT
acquisition, and taking into account all
transactions related to the acquisition, each
of USP, Individual A (the person that holds
the transferred stock), and FA (the foreign
acquiring corporation) are not members of a
U.S.-parented group described in paragraph
(c)(1)(ii)(A) or (B) of this section.
Accordingly, because the 100 FA shares are
not treated as held by members of the EAG,
those shares are included in the numerator
and the denominator of the ownership
fraction. Therefore, the ownership fraction is
100/100.
Example 2. U.S.-parented group exception
available—(i) Facts. USP, a domestic
corporation wholly owned by Individual A,
owns all the stock of USS, a domestic
corporation, and USS owns all the stock of
FT, a foreign corporation. FT owns all the
stock of DT, a domestic corporation. FT does
not own any other property and has no
liabilities. Pursuant to a reorganization
described in section 368(a)(1)(F), FT transfers
all of its DT stock to FA, a newly formed
foreign corporation, in exchange for 100
shares of FA stock (DT acquisition) and
distributes the FA stock to USS in liquidation
pursuant to section 361(c)(1). In a transaction
after and related to the DT acquisition, USP
sells 60 percent of the stock of USS (by vote
and value) to Individual B.
(ii) Analysis. The 100 FA shares received
by FT are stock of a foreign acquiring
corporation described in section
7874(a)(2)(B)(ii) and, under § 1.7874–5(a), the
shares retain their status as such even though
FT subsequently distributes the shares to
USS pursuant to section 361(c)(1). Thus, the
100 FA shares are included in the ownership
fraction, unless the shares are treated as held
by members of the EAG for purposes of
applying section 7874(c)(2)(A) and § 1.7874–
1 and are excluded from the ownership
E:\FR\FM\12JYR2.SGM
12JYR2
amozie on DSK3GDR082PROD with RULES2
32550
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
fraction under those rules. For purposes of
applying section 7874(c)(2)(A) and § 1.7874–
1, the 100 FA shares, which constitute
transferred stock under paragraph (f)(2) of
this section, are treated as held by members
of the EAG only if an exception in paragraph
(c) of this section applies. See paragraph (b)
of this section. The U.S.-parented group
exception described in paragraph (c)(1) of
this section applies. The requirement set
forth in paragraph (c)(1)(i) of this section is
satisfied because before the DT acquisition,
FT (the transferring corporation) is a member
of a U.S.-parented group of which USP is the
common parent (the USP group). The
requirement set forth in paragraph (c)(1)(ii) of
this section is satisfied because after the DT
acquisition, and taking into account all
transactions related to the acquisition, each
of FA (which is both the successor to FT, the
transferring corporation, and the foreign
acquiring corporation) and USS (the person
that holds the transferred stock) are members
of a U.S.-parented group of which USS (a
member of the USP group before the DT
acquisition) is the common parent. Moreover,
the DT acquisition qualifies as an internal
group restructuring under § 1.7874–1(c)(2).
The requirement set forth in § 1.7874–
1(c)(2)(i) is satisfied because before the DT
acquisition, 80 percent or more of the stock
(by vote and value) of DT was held directly
or indirectly by USS (the corporation that
after the acquisition, and taking into account
all transactions related to the acquisition, is
the common parent of the EAG). The
requirement set forth in § 1.7874–1(c)(2)(ii) is
satisfied because after the acquisition, and
taking into account all transactions related to
the acquisition, 80 percent or more of the
stock (by vote and value) of FA (the foreign
acquiring corporation) is held directly or
indirectly by USS. Therefore, the 100 FA
shares are excluded from the numerator, but
included in the denominator, of the
ownership fraction. Accordingly, the
ownership fraction is 0/100.
Example 3. U.S.-parented group exception
available—(i) Facts. USP, a domestic
corporation wholly owned by Individual A,
owns all the stock of USS, a domestic
corporation, and USS owns all the stock of
DT, also a domestic corporation. DT owns all
the stock of FT, a foreign corporation. The FT
stock represents substantially all of the
property of DT for purposes of section 7874.
Pursuant to a reorganization described in
section 368(a)(1)(D), DT transfers all the FT
stock to FA, a newly formed foreign
corporation, in exchange for 100 shares of FA
stock (DT acquisition) and distributes the FA
stock to USS pursuant to section 361(c)(1). In
a related transaction, USS distributes all the
FA stock to USP under section 355(c)(1).
Lastly, in another related transaction and
pursuant to a divisive reorganization
described in section 368(a)(1)(D), USP
transfers all the stock of USS and FA to DP,
a newly formed domestic corporation, in
exchange for all the stock of DP and
distributes the DP stock to Individual A
pursuant to section 361(c)(1).
(ii) Analysis. The 100 FA shares received
by USS are stock of a foreign acquiring
corporation described in section
7874(a)(2)(B)(ii) and, under § 1.7874–5(a), the
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
shares retain their status as such even though
USS subsequently transfers the shares to
USP. Thus, the 100 FA shares are included
in the ownership fraction, unless the shares
are treated as held by members of the EAG
for purposes of applying section
7874(c)(2)(A) and § 1.7874–1 and are
excluded from the ownership fraction under
those rules. For purposes of applying section
7874(c)(2)(A) and § 1.7874–1, the 100 FA
shares, which constitute transferred stock
under paragraph (f)(2) of this section, are
treated as held by members of the EAG only
if an exception in paragraph (c) of this
section applies. See paragraph (b) of this
section. The U.S.-parented group exception
described in paragraph (c)(1) of this section
applies. The requirement set forth in
paragraph (c)(1)(i) of this section is satisfied
because before the DT acquisition, USS (the
transferring corporation) is a member of a
U.S.-parented group of which USP is the
common parent (the USP group). The
requirement set forth in paragraph (c)(1)(ii) of
this section is satisfied because after the DT
acquisition, and taking into account all
transactions related to the acquisition, each
of USS, DP (the person that holds the
transferred stock), and FA (the foreign
acquiring corporation) are members of a U.S.parented group of which DP (a corporation
that was formed in a transaction related to
the DT acquisition and that, immediately
after it was formed (but without regard to any
related transactions) was a member of the
USP group) is the common parent. Therefore,
the 100 FA shares are excluded from the
numerator and the denominator of the
ownership fraction. Accordingly, the
ownership fraction is 0/0.
Example 4. Foreign-parented group
exception—(i) Facts. Individual A owns all
the stock of FT, a foreign corporation, and FT
owns all the stock of DT, a domestic
corporation. FT does not own any other
property and has no liabilities. Pursuant to a
reorganization described in section
368(a)(1)(F), FT transfers all the stock of DT
to FA, a newly formed foreign corporation, in
exchange for 100 shares of FA stock (DT
acquisition) and distributes the FA stock to
Individual A in liquidation pursuant to
section 361(c)(1).
(ii) Analysis. The 100 FA shares received
by FT are stock of a foreign acquiring
corporation described in section
7874(a)(2)(B)(ii) and, under § 1.7874–5(a), the
shares retain their status as such even though
FT subsequently distributes the shares to
Individual A pursuant to section 361(c)(1).
Thus, the 100 FA shares are included in the
ownership fraction, unless the shares are
treated as held by members of the EAG of
purposes of applying section 7874(a)(2)(A)
and § 1.7874–1 and are excluded from the
ownership fraction under those rules. For
purposes of applying section 7874(c)(2)(A)
and § 1.7874–1, the 100 FA shares, which
constitute transferred stock under paragraph
(f)(2) of this section, are treated as held by
members of the EAG only if an exception in
paragraph (c) of this section applies. See
paragraph (b) of this section. The foreignparented group exception described in
paragraph (c)(2) of this section applies. The
requirement set forth in paragraph (c)(2)(i) of
PO 00000
Frm 00028
Fmt 4701
Sfmt 4700
this section is satisfied because before the DT
acquisition, FT (the transferring corporation)
and DT are members of the foreign-parented
group of which FT is the common parent.
The requirement set forth in paragraph
(c)(2)(ii) of this section is satisfied because
after the acquisition, and taking into account
all transactions related to the acquisition, FT
would be a member of the EAG absent the
distribution of the FA shares pursuant to
section 361(c)(1). Moreover, the DT
acquisition qualifies as an internal group
restructuring under § 1.7874–1(c)(2). The
requirement set forth in § 1.7874–1(c)(2)(i) is
satisfied because before the acquisition, 80
percent or more of the stock (by vote and
value) of DT was held directly or indirectly
by FT, the corporation that, without regard to
the distribution of the FA shares pursuant to
section 361(c)(1), would be common parent
of the EAG after the acquisition. See
§ 1.7874–1(c)(2)(iii). The requirement set
forth in § 1.7874–1(c)(2)(ii) is satisfied
because after the acquisition, but without
regard to the distribution of the FA shares
pursuant to the section 361(c)(1) distribution,
FT would directly or indirectly hold 80
percent or more of the stock (by vote and
value) of FA (the foreign acquiring
corporation). See § 1.7874–1(c)(2)(iii).
Therefore, the 100 FA shares are excluded
from the numerator, but included in the
denominator, of the ownership fraction.
Accordingly, the ownership fraction is 0/100.
(iii) Alternative facts. The facts are the
same as in paragraph (i) of this Example 4,
except that in a transaction after and related
to the DT acquisition, FA issues 200 shares
of FA stock to Individual B in exchange for
qualified property (within the meaning of
§ 1.7874–4(h)(2)). The foreign-parented group
exception does not apply because after the
acquisition, and taking into account FA’s
issuance of the 200 FA shares to Individual
B, FT would not be a member of the EAG
absent FT’s distribution of the 100 FA shares
pursuant to section 361(c)(1). Accordingly,
the 100 FA shares received by FT are not
treated as held by a member of the EAG for
purposes of applying section 7874(c)(2)(A)
and § 1.7874–1. As a result, the ownership
fraction is 100/300.
(h) Applicability dates. Except as
otherwise provided in this paragraph
(h), this section applies to domestic
entity acquisitions completed on or after
September 22, 2014. Paragraphs (d)(2)
and (f)(2)(ii) of this section apply to
domestic entity acquisitions completed
on or after April 4, 2016. Taxpayers,
however, may elect either to apply
paragraph (c)(2) of this section to
domestic entity acquisitions completed
before September 22, 2014, or to
consistently apply paragraphs (c)(2),
(d)(2), and (f)(2)(ii) of this section and
§ 1.7874–1(c)(2)(iii) and (g) to domestic
entity acquisitions completed before
April 4, 2016.
§ 1.7874–6T
[Removed]
Par. 22. Section 1.7874–6T is
removed.
■
E:\FR\FM\12JYR2.SGM
12JYR2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
Par. 23. Section 1.7874–7 is added to
read as follows:
■
amozie on DSK3GDR082PROD with RULES2
§ 1.7874–7 Disregard of certain stock
attributable to passive assets.
(a) Scope. This section identifies
certain stock of a foreign acquiring
corporation that is attributable to
passive assets and that is disregarded in
determining the ownership fraction by
value. Paragraph (b) of this section sets
forth the general rule regarding when
stock of a foreign acquiring corporation
is excluded from the denominator of the
ownership fraction under this section.
Paragraph (c) of this section provides a
de minimis exception to the application
of the general rule of paragraph (b) of
this section. Paragraph (d) of this
section provides rules for the treatment
of partnerships, and paragraph (e) of
this section provides definitions.
Paragraph (f) of this section provides
examples illustrating the application of
the rules of this section. Paragraph (g) of
this section provides dates of
applicability. The rules provided in this
section are also subject to section
7874(c)(4). See § 1.7874–1(d)(1) for rules
addressing the interaction of this section
with the expanded affiliated group rules
of section 7874(c)(2)(A) and § 1.7874–1.
(b) General rule. If, on the completion
date, more than fifty percent of the gross
value of all foreign group property
constitutes foreign group nonqualified
property, then, for purposes of
determining the ownership percentage
by value (but not vote) described in
section 7874(a)(2)(B)(ii), stock of the
foreign acquiring corporation is
excluded from the denominator of the
ownership fraction in an amount equal
to the product of—
(1) The value of the stock of the
foreign acquiring corporation, other
than stock that is described in section
7874(a)(2)(B)(ii) and stock that is
excluded from the denominator of the
ownership fraction under § 1.7874–1(b),
§ 1.7874–4(b), § 1.7874–8(b), § 1.7874–
9(b), or section § 7874(c)(4); and
(2) The foreign group nonqualified
property fraction.
(c) De minimis ownership. Paragraph
(b) of this section does not apply if—
(1) The ownership percentage
described in section 7874(a)(2)(B)(ii),
determined without regard to the
application of paragraph (b) of this
section and §§ 1.7874–4(b) and 1.7874–
10(b), is less than five (by vote and
value); and
(2) On the completion date, each five
percent former domestic entity
shareholder or five percent former
domestic entity partner, as applicable,
owns (applying the attribution rules of
section 318(a) with the modifications
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
described in section 304(c)(3)(B)) less
than five percent (by vote and value) of
the stock of (or a partnership interest in)
each member of the expanded affiliated
group. For this purpose, a five percent
former domestic entity shareholder (or
five percent former domestic entity
partner) is a former domestic entity
shareholder (or former domestic entity
partner) that, before the domestic entity
acquisition, owned (applying the
attribution rules of section 318(a) with
the modifications described in section
304(c)(3)(B)) at least five percent (by
vote and value) of the stock of (or a
partnership interest in) the domestic
entity.
(d) Treatment of partnerships. For
purposes of this section, if one or more
members of the modified expanded
affiliated group own, in the aggregate,
more than 50 percent (by value) of the
interests in a partnership, the
partnership is treated as a corporation
that is a member of the modified
expanded affiliated group.
(e) Definitions. In addition to the
definitions provided in § 1.7874–12, the
following definitions apply for purposes
of this section.
(1) Foreign group nonqualified
property—(i) General rule. Foreign
group nonqualified property means
foreign group property described in
§ 1.7874–4(h)(2), other than the
following:
(A) Property that gives rise to income
described in section 954(h),
determined—
(1) In the case of property held by a
foreign corporation, by substituting the
term ‘‘foreign corporation’’ for the term
‘‘controlled foreign corporation;’’ and
(2) In the case of property held by a
domestic corporation, by substituting
the term ‘‘domestic corporation’’ for the
term ‘‘controlled foreign corporation,’’
without regard to the phrase ‘‘other than
the United States’’ in section
954(h)(3)(A)(ii)(I), and without regard to
any inference that the tests in section
954(h) should be calculated or
determined without taking transactions
with customers located in the United
States into account.
(B) Property that gives rise to income
described in section 954(i), determined
by substituting the term ‘‘foreign
corporation’’ for the term ‘‘controlled
foreign corporation.’’
(C) Property that gives rise to income
described in section 1297(b)(2)(A) or (B)
(determined without regard to other
passive foreign investment company
rules).
(D) Property held by a domestic
corporation that is subject to tax as an
insurance company under subchapter L
of chapter 1 of subtitle A of the Internal
PO 00000
Frm 00029
Fmt 4701
Sfmt 4700
32551
Revenue Code, provided that the
property is required to support, or is
substantially related to, the active
conduct of an insurance business.
(ii) Special rule. Foreign group
nonqualified property also means any
foreign group property that, in a
transaction related to the domestic
entity acquisition, is acquired in
exchange for other property, including
cash, if such other property would be
described in paragraph (e)(1)(i) of this
section had the transaction not
occurred.
(2) Foreign group property means any
property (including excluded property,
as described in paragraph (e)(3)(ii) of
this section)) held on the completion
date by the modified expanded affiliated
group, other than—
(i) Property that is directly or
indirectly acquired in the domestic
entity acquisition;
(ii) Stock or a partnership interest in
a member of the modified expanded
affiliated group; and
(iii) An obligation of a member of the
modified expanded affiliated group.
(3) Foreign group nonqualified
property fraction—(i) In general.
Foreign group nonqualified property
fraction means a fraction calculated
with the following numerator and
denominator:
(A) The numerator of the fraction is
the gross value of all foreign group
nonqualified property, other than
excluded property (as described in
paragraph (e)(3)(ii) of this section).
(B) The denominator of the fraction is
the gross value of all foreign group
property, other than excluded property
(as described in paragraph (e)(3)(ii) of
this section)
(ii) Excluded property. For purposes
of paragraph (e)(3) of this section,
excluded property means property that
gives rise to stock that is excluded from
the ownership fraction with respect to
the domestic entity acquisition under
§ 1.7874–4(b), § 1.7874–8(b), § 1.7874–
9(b), or section 7874(c)(4). For this
purpose, only property that was directly
or indirectly acquired in a prior
domestic entity acquisition (as
described in § 1.7874–8(g)(4)) or covered
foreign acquisition (as described in
§ 1.7874–9(d)(4)) with respect to the
domestic entity acquisition may be
considered to give rise to stock that is
excluded from the ownership fraction
with respect to the domestic entity
acquisition under § 1.7874–8(b) or
§ 1.7874–9(b). If only a portion of the
consideration provided in a prior
domestic entity acquisition or covered
foreign acquisition consisted of stock of
the foreign acquiring corporation, then
only a pro rata portion of a property
E:\FR\FM\12JYR2.SGM
12JYR2
32552
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
amozie on DSK3GDR082PROD with RULES2
directly or indirectly acquired in the
prior domestic entity acquisition or
covered foreign acquisition may be
considered excluded property, based on
a fraction the numerator of which is the
amount of the consideration that
consisted of stock of the foreign
acquiring corporation and the
denominator of which is the total
amount of consideration.
(4) Modified expanded affiliated
group means, with respect to a domestic
entity acquisition, the group described
in either paragraph (e)(4)(i) of this
section or paragraph (e)(4)(ii) of this
section. A member of the modified
expanded affiliated group is an entity
included in the modified expanded
affiliated group.
(i) When the foreign acquiring
corporation is not the common parent
corporation of the expanded affiliated
group, the expanded affiliated group
determined as if the foreign acquiring
corporation was the common parent
corporation.
(ii) When the foreign acquiring
corporation is the common parent
corporation of the expanded affiliated
group, the expanded affiliated group.
(f) Examples. The following examples
illustrate the rules of this section.
Example 1. Application of general rule—(i)
Facts. Individual A owns all 20 shares of the
sole class of stock of FA, a foreign
corporation. FA acquires all the stock of DT,
a domestic corporation, solely in exchange
for 76 shares of newly issued FA stock (DT
acquisition). In a transaction related to the
DT acquisition, FA issues 4 shares of stock
to Individual A in exchange for Asset A,
which has a gross value of $50x. On the
completion date, in addition to the DT stock
and Asset A, FA holds Asset B, which has
a gross value of $150x, and Asset C, which
has a gross value of $100x. Assets A and B,
but not Asset C, are nonqualified property
(within the meaning of § 1.7874–4(h)(2)).
Further, Asset C was not acquired in a
transaction related to the DT acquisition.
(ii) Analysis. The 4 shares of FA stock
issued to Individual A in exchange for Asset
A are disqualified stock under § 1.7874–4(c)
and are excluded from the denominator of
the ownership fraction pursuant to § 1.7874–
4(b). Furthermore, additional shares of FA
stock are excluded from the denominator of
the ownership fraction pursuant to paragraph
(b) of this section. This is because on the
completion date, the gross value of all foreign
group property is $300x (the sum of the gross
values of Assets A, B, and C), the gross value
of all foreign group nonqualified property is
$200x (the sum of the gross values of Assets
A and B), and thus 66.67% of the gross value
of all foreign group property constitutes
foreign group nonqualified property ($200x/
$300x). Because FA has only one class of
stock outstanding, the shares of FA stock that
are excluded from the denominator of the
ownership fraction pursuant to paragraph (b)
of this section are calculated by multiplying
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
20 shares of FA stock (100 shares less the 76
shares described in section 7874(a)(2)(B)(ii)
and the 4 shares of disqualified stock) by the
foreign group nonqualified property fraction.
The numerator of the foreign group
nonqualified property fraction is $150x (the
gross value of Asset B) and the denominator
is $250x (the sum of the gross values of
Assets B and C). Asset A is not taken into
account for purposes of the foreign group
nonqualified property fraction because it
gives rise to FA stock that is excluded under
§ 1.7874–4(b) (4 shares) and, as a result, is
excluded property. Accordingly, 12 shares of
FA stock are excluded from the denominator
of the ownership fraction pursuant to
paragraph (b) of this section (20 shares
multiplied by $150x/$250x). Thus, a total of
16 shares are excluded from the denominator
of the ownership fraction (4 + 12). As a
result, the ownership fraction by value is
76/84.
Example 2. Application of de minimis
exception—(i) Facts. Individual A owns all
96 shares of the sole class of stock of FA, a
foreign corporation. Individual B wholly
owns DT, a domestic corporation.
Individuals A and B are not related. FA
acquires all the stock of DT solely in
exchange for 4 shares of newly issued FA
stock (DT acquisition). On the completion
date, in addition to all of the stock of DT, FA
holds Asset A, which is nonqualified
property (within the meaning of § 1.7874–
4(h)(2)).
(ii) Analysis. Without regard to the
application of §§ 1.7874–4(b) and 1.7874–
10(b) as well as paragraph (b) of this section,
the ownership percentage described in
section 7874(a)(2)(B)(ii) would be less than 5
(by vote and value), or 4 (4/100, or 4 shares
of FA stock held by Individual B by reason
of owning the DT stock, determined under
§ 1.7874–2(f)(2), over 100 shares of FA stock
outstanding after the DT acquisition).
Furthermore, on the completion date,
Individual B owns less than 5% (by vote and
value) of the stock of FA and DT (the
members of the expanded affiliated group).
Accordingly, the de minimis exception in
paragraph (c) of this section applies.
Therefore, paragraph (b) of this section does
not apply and the ownership fraction is
4/100.
Example 3. Foreign acquiring corporation
not common parent of EAG—(i) Facts. FP, a
foreign corporation, owns all 85 shares of the
sole class of stock of FA, a foreign
corporation. FA acquires all the stock of DT,
a domestic corporation, solely in exchange
for 65 shares of newly issued FA stock (DT
acquisition). On the completion date, FA, in
addition to all of the stock of DT, owns Asset
A, which has a gross value of $40x, and Asset
B, which has a gross value of $45x. Moreover,
on the completion date, in addition to the 85
shares of FA stock, FP owns Asset C, which
has a gross value of $10x. Assets A and C,
but not Asset B, are nonqualified property
(within the meaning of § 1.7874–4(h)(2)).
Further, Asset B was not acquired in a
transaction related to the DT acquisition in
exchange for nonqualified property.
(ii) Analysis. Under paragraph (e)(2) of this
section, Assets A and B, but not Asset C, are
foreign group property. Although Asset C is
PO 00000
Frm 00030
Fmt 4701
Sfmt 4700
held on the completion date by FP, a member
of the expanded affiliated group, Asset C is
not foreign group property because FP is not
a member of the modified expanded affiliated
group. This is the case because if the
expanded affiliated group were determined
based on FA as the common parent
corporation, FP would not be a member of
such expanded affiliated group (see
paragraph (e)(4)(i) of this section). Under
paragraph (e)(1) of this section, Asset A, but
not Asset B, is foreign group nonqualified
property. Therefore, on the completion date,
the gross value of all foreign group property
is $85x (the sum of the gross values of Assets
A and B), and the gross value of all foreign
group nonqualified property is $40x (the
gross value of Asset A). Accordingly, on the
completion date, only 47.06% of the gross
value of all foreign group property
constitutes foreign group nonqualified
property ($40x/$85x). Consequently,
paragraph (b) of this section does not apply
to exclude any FA stock from the
denominator of the ownership fraction.
Example 4. Coordination with serial
acquisition rule—(i) Facts. Individual A
owns all 30 shares of the sole class of stock
of FA, a foreign corporation. In Year 1, FA
acquires all the stock of DT1, a domestic
corporation, solely in exchange for 40 shares
of newly issued FA stock (DT1 acquisition).
In Year 2, FA acquires all the stock of DT2,
a domestic corporation, solely in exchange
for 50 shares of newly issued FA stock (DT2
acquisition). On the completion date for the
DT2 acquisition, in addition to the DT2
stock, FA holds Asset A, which has a gross
value of $15x, Asset B, which has a gross
value of $15x, and all the stock of DT1,
which has a gross value of $40x. At all times,
DT1 holds only Asset C, which has a gross
value of $30x, and Asset D, which has a gross
value of $10x. Assets A and C, but not Assets
B and D, are nonqualified property (within
the meaning of § 1.7874–4(h)(2)). In addition,
at all times, the fair market value of each
share of FA stock is $1x. Further, there have
been no redemptions of FA stock subsequent
to the DT1 acquisition. Lastly, under
§ 1.7874–8, the DT1 acquisition is a prior
domestic entity acquisition with respect to
the DT2 acquisition and $40x of FA stock is
excluded from the denominator of the
ownership fraction with respect to the DT2
acquisition.
(ii) Analysis. Shares of FA stock are
excluded from the denominator of the
ownership fraction pursuant to paragraph (b)
of this section. This is because on the
completion date, the gross value of all foreign
group property is $70x (the sum of the gross
values of Assets A, B, C, and D), the gross
value of all foreign group nonqualified
property is $45x (the sum of the gross values
of Assets A and C), and thus 64.29% of the
gross value of all foreign group property
constitutes foreign group nonqualified
property ($45x/$70x). The shares of FA stock
that are excluded from the denominator of
the ownership fraction pursuant to paragraph
(b) of this section are calculated by
multiplying $30x ($120x, the value of all the
shares of FA stock, less $50x, the value of the
stock described in section 7874(a)(2)(B)(ii),
less $40x, the value of the stock excluded
E:\FR\FM\12JYR2.SGM
12JYR2
amozie on DSK3GDR082PROD with RULES2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
under § 1.7874–8(b)) by the foreign group
nonqualified property fraction. The property
taken into account for purposes of
determining the foreign group nonqualified
property fraction is Asset A and Asset B.
Asset C and Asset D are not taken into
account for purposes of the foreign group
nonqualified property fraction because they
are excluded property. This is because FA
indirectly acquired the Assets in the DT1
acquisition (a prior domestic entity
acquisition with respect to the DT2
acquisition) and, as a result of that
acquisition, $40x of FA stock is excluded
from the denominator of the ownership
fraction with respect to the DT2 acquisition
under § 1.7874–8(b). Thus, the numerator of
the foreign group nonqualified property
fraction is $15x (the gross value of Asset A)
and the denominator is $30x (the sum of the
gross values of Asset A, $15x, and Asset B,
$15x). Accordingly, $15x of FA stock is
excluded from the denominator of the
ownership fraction pursuant to paragraph (b)
of this section ($30x multiplied by $15x/
$30x). Thus, a total of $55x of FA stock is
excluded from the denominator of the
ownership fraction ($40x + $15x), making the
denominator $65x ($120x ¥ $55x). As a
result, the ownership percentage with respect
to the DT2 acquisition by value is 76.92
($50x/$65x).
(ii) Alternative facts. The facts are the same
as in paragraph (i) of this Example 4, except
as follows. Initially, there are 40 shares of FA
stock outstanding, all of which are owned by
Individual A. At all times, the gross value of
asset D is $20x. In the DT1 acquisition, FA
acquires all the stock of DT1 ($50x fair
market value) solely in exchange for 40
shares of newly issued FA stock and $10x of
other property. As in paragraph (i) of this
Example 4, shares of FA stock are excluded
from the denominator of the ownership
fraction pursuant to paragraph (b) of this
section. This is because on the completion
date, the gross value of all foreign group
property is $80x (the sum of the gross values
of Assets A, B, C, and D), the gross value of
all foreign group nonqualified property is
$45x (the sum of the gross values of Assets
A and C), and thus 56.25% of the gross value
of all foreign group property constitutes
foreign group nonqualified property ($45x/
$80x). The shares of FA stock that are
excluded from the denominator of the
ownership fraction pursuant to paragraph (b)
of this section are calculated by multiplying
$40x ($130x, the value of all the shares of FA
stock, less $50x, the value of the stock
described in section 7874(a)(2)(B)(ii), less
$40x, the value of the stock excluded under
§ 1.7874–8(b)) by the foreign group
nonqualified property fraction. The property
taken into account for purposes of
determining the foreign group nonqualified
property fraction is Asset A, Asset B, and the
portion of Asset C and Asset D that is not
excluded property. Eighty percent of each of
Asset C and Asset D are considered excluded
property because FA indirectly acquired
Asset C and Asset D in the DT1 acquisition
(a prior domestic entity acquisition with
respect to the DT2 acquisition); as a result of
that acquisition, $40x of FA stock is excluded
from the denominator of the ownership
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
fraction with respect to the DT2 acquisition
under § 1.7874–8(b); and 80% of the
consideration provided in the DT1
acquisition consisted of stock of FA ($40x/
$50x). Thus, the numerator of the foreign
group nonqualified property fraction is $21x
(the sum of the gross values of Asset A, $15x,
and the portion of Asset C that is not
excluded property, $6x) and the denominator
is $40x (the sum of the gross values of Asset
A, $15x, Asset B, $15x, and the portion of
Asset C and Asset D that is not excluded
property, $6x and $4x, respectively).
Accordingly, $21x of FA stock is excluded
from the denominator of the ownership
fraction pursuant to paragraph (b) of this
section ($40x multiplied by $21x/$40x).
Thus, a total of $61x of FA stock is excluded
from the denominator of the ownership
fraction pursuant to paragraph (b) of this
section ($40x + $21x), making the
denominator $69x ($130x ¥ $61x). As a
result, the ownership percentage with respect
to D2 acquisition by value is 72.46 ($50x/
$69x).
(g) Applicability dates. This section
applies to domestic entity acquisitions
completed on or after July 12, 2018. For
domestic entity acquisitions completed
before July 12, 2018, see § 1.7874–7T, as
contained in 26 CFR part 1 revised as of
April 1, 2017. However, to the extent
this section differs from § 1.7874–7T, as
contained in 26 CFR part 1 revised as of
April 1, 2017, taxpayers may elect to
consistently apply the differences to
domestic entity acquisitions completed
before July 12, 2018.
§ 1.7874–7T
[Removed]
Par. 24. Section 1.7874–7T is
removed.
■ Par. 25. Section 1.7874–8 is added to
read as follows:
■
§ 1.7874–8 Disregard of certain stock
attributable to serial acquisitions.
(a) Scope. This section identifies stock
of a foreign acquiring corporation that is
disregarded in determining an
ownership fraction by value because it
is attributable to certain prior domestic
entity acquisitions. Paragraph (b) of this
section sets forth the general rule
regarding the amount of stock of a
foreign acquiring corporation that is
excluded from the denominator of the
ownership fraction by value under this
section, and paragraphs (c) through (f) of
this section provide rules for
determining this amount. Paragraph (g)
provides definitions. Paragraph (h) of
this section provides examples
illustrating the application of the rules
of this section. Paragraph (i) of this
section provides dates of applicability.
This section applies after taking into
account § 1.7874–2(e). See § 1.7874–
1(d)(1) for rules addressing the
interaction of this section with the
PO 00000
Frm 00031
Fmt 4701
Sfmt 4700
32553
expanded affiliated group rules of
section 7874(c)(2)(A) and § 1.7874–1.
(b) General rule. This paragraph (b)
applies to a domestic entity acquisition
(relevant domestic entity acquisition)
when the foreign acquiring corporation
(including a predecessor, as defined in
§ 1.7874–10(f)(1)) has completed one or
more prior domestic entity acquisitions.
When this paragraph (b) applies, then,
for purposes of determining the
ownership percentage by value (but not
vote) described in section
7874(a)(2)(B)(ii), stock of the foreign
acquiring corporation is excluded from
the denominator of the ownership
fraction in an amount equal to the sum
of the excluded amounts computed
separately with respect to each prior
domestic entity acquisition and each
relevant share class.
(c) Computation of excluded amounts.
With respect to each prior domestic
entity acquisition and each relevant
share class, the excluded amount is the
product of—
(1) The total number of prior
acquisition shares, reduced by the sum
of the number of allocable redeemed
shares for all redemption testing
periods; and
(2) The fair market value of a single
share of stock of the relevant share class
on the completion date of the relevant
domestic entity acquisition.
(d) Computation of allocable
redeemed shares—(1) In general. With
respect to each prior domestic entity
acquisition and each relevant share
class, the allocable redeemed shares,
determined separately for each
redemption testing period, is the
product of the number of redeemed
shares during the redemption testing
period and the redemption fraction.
(2) Redemption fraction. The
redemption fraction is determined
separately with respect to each prior
domestic entity acquisition, each
relevant share class, and each
redemption testing period, as follows:
(i) The numerator is the total number
of prior acquisition shares, reduced by
the sum of the number of allocable
redeemed shares for all prior
redemption testing periods.
(ii) The denominator is the sum of—
(A) The number of outstanding shares
of the foreign acquiring corporation
stock as of the end of the last day of the
redemption testing period; and
(B) The number of redeemed shares
during the redemption testing period.
(e) Rules for determining redemption
testing periods—(1) In general. Except
as provided in paragraph (e)(2) of this
section, a redemption testing period
with respect to a prior domestic entity
acquisition is the period beginning on
E:\FR\FM\12JYR2.SGM
12JYR2
amozie on DSK3GDR082PROD with RULES2
32554
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
the day after the completion date of the
prior domestic entity acquisition and
ending on the day prior to the
completion date of the relevant
domestic entity acquisition.
(2) Election to use multiple
redemption testing periods. A foreign
acquiring corporation may establish a
reasonable method for dividing the
period described in paragraph (e)(1) of
this section into shorter periods (each
such shorter period, a redemption
testing period). A reasonable method
would include a method based on a
calendar convention (for example, daily,
monthly, quarterly, or yearly), or on a
convention that triggers the start of a
new redemption testing period
whenever a share issuance occurs that
exceeds a certain threshold. In order to
be reasonable, the method must be
consistently applied with respect to all
prior domestic entity acquisitions and
all relevant share classes.
(f) Appropriate adjustments required
to take into account share splits and
similar transactions. For purposes of
this section, appropriate adjustments
must be made to take into account
changes in a foreign acquiring
corporation’s capital structure,
including, for example, stock splits,
reverse stock splits, stock distributions,
recapitalizations, and similar
transactions. Thus, for example, in
determining the total number of prior
acquisition shares with respect to a
relevant share class, appropriate
adjustments must be made to take into
account a stock split with respect to that
relevant share class that occurs after the
completion date with respect to a prior
domestic entity acquisition.
(g) Definitions. In addition to the
definitions provided in § 1.7874–12, the
following definitions apply for purposes
of this section.
(1) A binding contract means an
instrument enforceable under applicable
law against the parties to the
instrument. The presence of a condition
outside the control of the parties
(including, for example, regulatory
agency approval) does not prevent an
instrument from being a binding
contract. Further, the fact that
insubstantial terms remain to be
negotiated by the parties to the contract,
or that customary conditions remain to
be satisfied, does not prevent an
instrument from being a binding
contract. A tender offer that is subject to
section 14(d) of the Securities and
Exchange Act of 1934, (15 U.S.C.
78n(d)(1)), and Regulation 14D (17 CFR
240.14d–1 through 240.14d–103) and
that is not pursuant to a binding
contract, is treated as a binding contract
made on the date of its announcement,
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
notwithstanding that it may be modified
by the offeror or that it is not
enforceable against the offerees.
(2) A relevant share class means, with
respect to a prior domestic entity
acquisition, each separate legal class of
shares in the foreign acquiring
corporation from which prior
acquisition shares were issued. See also
paragraph (f) of this section (requiring
appropriate adjustments in certain
cases).
(3) Total number of prior acquisition
shares means, with respect to a prior
domestic entity acquisition and each
relevant share class, the total number of
shares of stock of the foreign acquiring
corporation that were described in
section 7874(a)(2)(B)(ii) as a result of
that acquisition (without regard to
whether the 60 percent test of section
7874(a)(2)(B)(ii) was satisfied), other
than stock treated as received by former
domestic entity shareholders or former
domestic entity partners under
§ 1.7874–10(b) or section 7874(c)(4),
adjusted as appropriate under paragraph
(f) of this section.
(4) A prior domestic entity
acquisition—(i) General rule. Except as
provided in this paragraph (g)(4), a prior
domestic entity acquisition means, with
respect to a relevant domestic entity
acquisition, a domestic entity
acquisition that occurred within the 36month period ending on the signing
date of the relevant domestic entity
acquisition.
(ii) Exception. A domestic entity
acquisition is not a prior domestic entity
acquisition if it is described in
paragraph (g)(4)(ii)(A) or (B) of this
section.
(A) De minimis. A domestic entity
acquisition is described in this
paragraph (g)(4)(ii)(A) if—
(1) The ownership percentage
described in section 7874(a)(2)(B)(ii)
with respect to the domestic entity
acquisition was less than five (by vote
and value); and
(2) The fair market value of the stock
of the foreign acquiring corporation
described in section 7874(a)(2)(B)(ii) as
a result of the domestic entity
acquisition (without regard to whether
the 60 percent test of section
7874(a)(2)(B)(ii) was satisfied) did not
exceed $50 million, as determined on
the completion date with respect to the
domestic entity acquisition.
(B) Foreign-parented group. A
domestic entity acquisition is described
in this paragraph (g)(4)(ii)(B) if—
(1) Before the domestic entity
acquisition and any related transaction,
the domestic entity was a member of a
foreign-parented group (as described in
§ 1.7874–6(f)(1)); and
PO 00000
Frm 00032
Fmt 4701
Sfmt 4700
(2) The domestic entity acquisition
qualified for the internal group
restructuring exception under § 1.7874–
1(c)(2).
(5) A redeemed share means a share
of stock in a relevant share class that
was redeemed (within the meaning of
section 317(b)).
(6) A signing date means the first date
on which the contract to effect the
relevant domestic entity acquisition is a
binding contract, or if another binding
contract to effect a substantially similar
acquisition was terminated with a
principal purpose of avoiding section
7874, the first date on which such other
contract was a binding contract.
(h) Examples. The following examples
illustrate the rules of this section.
Example 1. Application of general rule—(i)
Facts. Individual A wholly owns DT1, a
domestic corporation. Individual B owns all
100 shares of the sole class of stock of FA,
a foreign corporation. In Year 1, FA acquires
all the stock of DT1 solely in exchange for
100 shares of newly issued FA stock (DT1
acquisition). On the completion date with
respect to the DT1 acquisition, the fair
market value of each share of FA stock is $1x.
In Year 3, FA enters into a binding contract
to acquire all the stock of DT2, a domestic
corporation wholly owned by Individual C.
Thereafter, FA acquires all the stock of DT2
solely in exchange for 150 shares of newly
issued FA stock (DT2 acquisition). On the
completion date with respect to the DT2
acquisition, the fair market value of each
share of FA stock is $1.50x. FA did not
complete the DT1 acquisition and DT2
acquisition pursuant to a plan (or series of
related transactions) for purposes of applying
§ 1.7874–2(e). In addition, there have been no
redemptions of FA stock subsequent to the
DT1 acquisition.
(ii) Analysis. The DT1 acquisition is a prior
domestic entity acquisition with respect to
the DT2 acquisition (the relevant domestic
entity acquisition) because the DT1
acquisition occurred within the 36-month
period ending on the signing date with
respect to the DT2 acquisition. Accordingly,
paragraph (b) of this section applies to the
DT2 acquisition. As a result, and because
there were no redemptions of FA stock, the
excluded amount is $150x, calculated as 100
(the total number of prior acquisition shares)
multiplied by $1.50x (the fair market value
of a single share of FA stock on the
completion date with respect to the DT2
acquisition). Accordingly, the numerator of
the ownership fraction by value is $225x (the
fair market value of the stock of FA that, with
respect to the DT2 acquisition, is described
in section 7874(a)(2)(B)(ii)) (150 shares x
$1.50x per share). In addition, the
denominator of the ownership fraction is
$375x (calculated as $525x, the fair market
value of all 350 shares of FA stock as of the
completion date with respect to the DT2
acquisition, less $150x, the excluded
amount). Therefore, the ownership
percentage by value is 60 ($225x divided by
$375x).
E:\FR\FM\12JYR2.SGM
12JYR2
amozie on DSK3GDR082PROD with RULES2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
Example 2. Effect of certain redemptions—
(i) Facts. The facts are the same as in
paragraph (i) of Example 1 of this paragraph
(h), except that in Year 2 FA redeems 50
shares of its stock (the Year 2 redemption).
(ii) Analysis. As is the case in paragraph
(ii) of Example 1 of this paragraph (h), the
DT1 acquisition is a prior domestic entity
acquisition with respect to the DT2
acquisition (the relevant domestic entity
acquisition), and paragraph (b) of this section
thus applies to the DT2 acquisition. Because
of the Year 2 redemption, the allocable
redeemed shares, and thus the redemption
fraction, must be calculated. For this
purpose, the redemption testing period is the
period beginning on the day after the
completion date with respect to the DT1
acquisition and ending on the day prior to
the completion date with respect to the DT2
acquisition. The redemption fraction for the
redemption testing period is thus 100/200,
calculated as 100 (the total number of prior
acquisition shares) divided by 200 (150, the
number of outstanding shares of FA stock on
the last day of the redemption testing period,
plus 50, the number of redeemed shares
during the redemption testing period), and
the allocable redeemed shares for the
redemption testing period is 25, calculated as
50 (the number of redeemed shares during
the redemption testing period) multiplied by
100/200 (the redemption fraction for the
redemption testing period). As a result, the
excluded amount is $112.50x, calculated as
75 (100, the total number of prior acquisition
shares, less 25, the allocable redeemed
shares) multiplied by $1.50x (the fair market
value of a single share of FA stock on the
completion date with respect to the DT2
acquisition). Accordingly, the numerator of
the ownership fraction by value is $225x (the
fair market value of the stock of FA that, with
respect to the DT2 acquisition, is described
in section 7874(a)(2)(B)(ii)) (150 shares ×
$1.50x per share), and the denominator of the
ownership fraction is $337.50x (calculated as
$450x, the fair market value of all 300 shares
of FA stock as of the completion date with
respect to the DT2 acquisition, less $112.50x,
the excluded amount). Therefore, the
ownership percentage by value is 66.67
($225x divided by $337.50x).
Example 3. Stock split—(i) Facts. The facts
are the same as in paragraph (i) of Example
2 of this paragraph (h), except as follows.
After the Year 2 redemption, but before the
DT2 acquisition, FA undergoes a stock split
and, as a result, each of the 150 shares of FA
stock outstanding are converted into two
shares (Year 2 stock split). Further, pursuant
to the DT2 acquisition, FA acquires all the
stock of DT2 solely in exchange for 300
shares of newly issued FA stock. Moreover,
on the completion date with respect to the
DT2 acquisition, the fair market value of each
share of FA stock is $0.75x.
(ii) Analysis. As is the case in paragraph
(ii) of Example 1 of this paragraph (h), the
DT1 acquisition is a prior domestic entity
acquisition with respect to the DT2
acquisition (the relevant domestic entity
acquisition), and paragraph (b) of this section
thus applies to the DT2 acquisition. In
addition, as is the case in paragraph (ii) of
Example 2 of this paragraph (h), the
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
redemption testing period is the period
beginning on the day after the completion
date with respect to the DT1 acquisition and
ending on the day prior to the completion
date with respect to the DT2 acquisition. To
calculate the redemption fraction, the total
number of prior acquisition shares and the
number of redeemed shares during the
redemption testing period must be
appropriately adjusted to take into account
the Year 2 stock split. See paragraph (f) of
this section. In this case, the appropriate
adjustment is to increase the total number of
prior acquisition shares from 100 to 200 and
to increase the number of redeemed shares
during the redemption testing period from 50
to 100. Thus, the redemption fraction for the
redemption testing period is 200/400,
calculated as 200 (the total number of prior
acquisition shares) divided by 400 (300, the
number of outstanding shares of FA stock on
the last day of the redemption testing period,
plus 100, the number of redeemed shares
during the redemption testing period), and
the allocable redeemed shares for the
redemption testing period is 50, calculated as
100 (the number of redeemed shares during
the redemption testing period) multiplied by
200/400 (the redemption fraction for the
redemption testing period). In addition, for
purposes of calculating the excluded amount,
the total number of prior acquisition shares
must be adjusted from 100 to 200. See
paragraph (f) of this section. Accordingly, the
excluded amount is $112.50x, calculated as
150 (200, the total number of prior
acquisition shares, less 50, the allocable
redeemed shares) multiplied by $0.75x (the
fair market value of a single share of FA stock
on the completion date with respect to the
DT2 acquisition). Consequently, the
numerator of the ownership fraction by value
is $225x (the fair market value of the stock
of FA that, with respect to the DT2
acquisition, is described in section
7874(a)(2)(B)(ii)) (300 shares × $0.75x per
share), and the denominator of the ownership
fraction is $337.50x (calculated as $450x, the
fair market value of all 600 shares of FA stock
as of the completion date with respect to the
DT2 acquisition, less $112.50x, the excluded
amount). Therefore, the ownership
percentage by value is 66.67 ($225 divided by
$337.50x).
(i) Applicability dates. Except as
provided in this paragraph (i), this
section applies to domestic entity
acquisitions completed on or after April
4, 2016, regardless of when a prior
domestic entity acquisition was
completed. Paragraphs (g)(3) and
(g)(4)(ii) of this section apply to
domestic entity acquisitions completed
on or after July 12, 2018. However,
taxpayers may elect to consistently
apply paragraphs (g)(3) and (g)(4)(ii) of
this section to domestic entity
acquisitions completed on or after April
4, 2016, and before July 12, 2018. For
domestic entity acquisitions completed
on or after April 4, 2016, and before July
12, 2018, see § 1.7874–8T(g)(3) and
(g)(4)(ii) as contained in 26 CFR part 1
revised as of April 1, 2017.
PO 00000
Frm 00033
Fmt 4701
Sfmt 4700
§ 1.7874–8T
32555
[Removed]
Par. 26. Section 1.7874–8T is
removed.
■ Par. 27. Section 1.7874–9 is added to
read as follows:
■
§ 1.7874–9 Disregard of certain stock in
third-country transactions.
(a) Scope. This section identifies
certain stock of a foreign acquiring
corporation that is disregarded in
determining the ownership fraction.
Paragraph (b) of this section provides a
rule that, in a third-country transaction,
excludes from the denominator of the
ownership fraction stock in the foreign
acquiring corporation held by former
shareholders of an acquired foreign
corporation by reason of holding certain
stock in that foreign corporation.
Paragraph (c) of this section defines a
third-country transaction, and
paragraph (d) of this section provides
other definitions. Paragraph (e) of this
section provides operating rules.
Paragraph (f) of this section provides an
example illustrating the application of
the rules of this section. Paragraph (g) of
this section provides the dates of
applicability. See § 1.7874–1(d)(1) for
rules addressing the interaction of this
section with the expanded affiliated
group rules of section 7874(c)(2)(A) and
§ 1.7874–1.
(b) Exclusion of certain stock of a
foreign acquiring corporation from the
ownership fraction. When a domestic
entity acquisition is a third-country
transaction, stock of the foreign
acquiring corporation held by reason of
holding stock in the acquired foreign
corporation (within the meaning of
paragraph (e)(4) of this section) is, to the
extent the stock otherwise would be
included in the denominator of the
ownership fraction, excluded from the
denominator of the ownership fraction
pursuant to this paragraph.
(c) Third-country transaction. A
domestic entity acquisition is a thirdcountry transaction if the following
requirements are satisfied:
(1) The foreign acquiring corporation
completes a covered foreign acquisition
pursuant to a plan (or series of related
transactions) that includes the domestic
entity acquisition.
(2) After the covered foreign
acquisition and all related transactions
are complete, the foreign acquiring
corporation is not a tax resident of the
foreign country in which the acquired
foreign corporation was a tax resident
before the covered foreign acquisition
and all related transactions.
(3) The ownership percentage
described in section 7874(a)(2)(B)(ii),
determined without regard to the
E:\FR\FM\12JYR2.SGM
12JYR2
amozie on DSK3GDR082PROD with RULES2
32556
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
application of paragraph (b) of this
section, is at least 60.
(d) Definitions. In addition to the
definitions provided in § 1.7874–12, the
following definitions apply for purposes
of this section.
(1) A foreign acquisition means a
transaction in which a foreign acquiring
corporation directly or indirectly
acquires substantially all of the
properties held directly or indirectly by
an acquired foreign corporation (within
the meaning of paragraph (e)(2) of this
section).
(2) An acquired foreign corporation
means a foreign corporation whose
properties are acquired in a foreign
acquisition.
(3) Foreign ownership percentage
means, with respect to a foreign
acquisition, the percentage of stock (by
vote or value) of the foreign acquiring
corporation held by reason of holding
stock in the acquired foreign
corporation (within the meaning of
paragraph (e)(3) of this section).
(4) Covered foreign acquisition—(i) In
general. Except as provided in
paragraphs (d)(4)(ii) and (iii) of this
section, a covered foreign acquisition
means a foreign acquisition in which,
after the acquisition and all related
transactions are complete, the foreign
ownership percentage is at least 60.
(ii) Substantial business activities
exception. A foreign acquisition is not a
covered foreign acquisition if, on the
completion date, the following
requirements are satisfied:
(A) The foreign acquiring corporation
is a tax resident of a foreign country.
(B) The expanded affiliated group has
substantial business activities in the
country in which the foreign acquiring
corporation is a tax resident when
compared to the total business activities
of the expanded affiliated group. For
this purpose, the principles of § 1.7874–
3 apply and the determination of
whether there are substantial business
activities is made without regard to the
domestic entity acquisition.
(iii) No income tax exception. A
foreign acquisition is not a covered
foreign acquisition if—
(A) Before the acquisition and all
related transactions, the acquired
foreign corporation was created or
organized in, or under the law of, a
foreign country that does not impose
corporate income tax and was not a tax
resident of any other foreign country;
and
(B) After the acquisition and all
related transactions are complete, the
foreign acquiring corporation is created
or organized in, or under the law of, a
foreign country that does not impose
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
corporate income tax and is not a tax
resident of any other foreign country.
(5) A tax resident of a foreign country
has the meaning set forth in § 1.7874–
3(d)(11).
(e) Operating rules. The following
rules apply for purposes of this section.
(1) Acquisition of multiple foreign
corporations that are tax residents of the
same foreign country. When multiple
foreign acquisitions occur pursuant to
the same plan (or a series of related
transactions) and two or more of the
acquired foreign corporations were tax
residents of the same foreign country
before the foreign acquisitions and all
related transactions, then those foreign
acquisitions are treated as a single
foreign acquisition and those acquired
foreign corporations are treated as a
single acquired foreign corporation for
purposes of this section.
(2) Acquisition of properties of an
acquired foreign corporation. For
purposes of determining whether a
foreign acquisition occurs, the
principles of section 7874(a)(2)(B)(i) and
§ 1.7874–2(c) and (d) (regarding
acquisitions of properties of a domestic
entity and acquisitions by multiple
foreign corporations) apply with the
following modifications:
(i) The principles of § 1.7874–2(c)(1)
(providing rules for determining
whether there is an indirect acquisition
of properties of a domestic entity),
including § 1.7874–2(b)(5) (providing
rules for determining the proportionate
amount of properties indirectly
acquired), apply by substituting the
term ‘‘foreign’’ for ‘‘domestic’’ wherever
it appears.
(ii) The principles of § 1.7874–2(c)(2)
(regarding acquisitions of stock of a
foreign corporation that owns a
domestic entity) apply by substituting
the term ‘‘domestic’’ for ‘‘foreign’’
wherever it appears.
(3) Computation of foreign ownership
percentage. For purposes of determining
a foreign ownership percentage, the
principles of all rules applicable to
calculating an ownership percentage
apply (including §§ 1.7874–2, 1.7874–4,
1.7874–5, 1.7874–7, and section
7874(c)(4)) with the following
modifications:
(i) Stock of a foreign acquiring
corporation described in section
7874(a)(2)(B)(ii) is not taken into
account.
(ii) The principles of this section,
section 7874(c)(2)(A), and §§ 1.7874–1,
1.7874–6, 1.7874–8, and 1.7874–10 do
not apply.
(iii) The principles of § 1.7874–7
apply by, in addition to the exclusions
listed in § 1.7874–7(e)(2)(i) through (iii),
also excluding from the definition of
PO 00000
Frm 00034
Fmt 4701
Sfmt 4700
foreign group property any property
held directly or indirectly by the
acquired foreign corporation
immediately before the foreign
acquisition and directly or indirectly
acquired in the foreign acquisition.
(4) Stock held by reason of holding
stock in an acquired foreign
corporation. For purposes of
determining stock of a foreign acquiring
corporation held by reason of holding
stock in an acquired foreign corporation,
the principles of section 7874(a)(2)(B)(ii)
and §§ 1.7874–2(f) and 1.7874–5 apply.
(5) Change in the tax residency of a
foreign corporation. For purposes of this
section, a change in a country in which
a foreign corporation is a tax resident is
treated as a transaction. Further, for
purposes of this section, if a foreign
acquiring corporation changes the
country in which it is a tax resident in
a manner that would not otherwise be
considered to result in a foreign
acquisition (for example, by changing
where it is managed and controlled),
then the foreign acquiring corporation is
treated as—
(i) Both an acquired foreign
corporation and a foreign acquiring
corporation; and
(ii) Directly or indirectly acquiring all
of the properties held directly or
indirectly by the acquired foreign
corporation solely in exchange for stock
of the foreign acquiring corporation.
(f) Example. The following example
illustrates the rules of this section.
Example. Third-country transaction—(i)
Facts. FA, a newly formed foreign
corporation that is a tax resident of Country
Y, acquires all the stock of DT, a domestic
corporation that is wholly owned by
Individual A, solely in exchange for 65
shares of newly issued FA stock (DT
acquisition). Pursuant to a plan that includes
the DT acquisition, FA acquires all the stock
of FT, a foreign corporation that is a tax
resident of Country X and wholly owned by
Individual B, solely in exchange for the
remaining 35 shares of newly issued FA
stock (FT acquisition). After the FT
acquisition and all related transactions, the
expanded affiliated group does not have
substantial business activities in Country Y
when compared to the total business
activities of the expanded affiliated group, as
determined under the principles of § 1.7874–
3 and without regard to the DT acquisition.
(ii) Analysis. As described in paragraphs
(A) through (C) of this Example, the
requirements set forth in paragraphs (c)(1)
through (3) of this section are satisfied and,
as result, the DT acquisition is a thirdcountry transaction.
(A) The FT acquisition is a foreign
acquisition because, pursuant to the FT
acquisition, FA (a foreign acquiring
corporation) acquires 100 percent of the stock
of FT and is thus treated as indirectly
acquiring 100 percent of the properties held
by FT (an acquired foreign corporation). See
E:\FR\FM\12JYR2.SGM
12JYR2
amozie on DSK3GDR082PROD with RULES2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
§ 1.7874–2(c)(1) and paragraph (e)(2) of this
section. Moreover, Individual B is treated as
receiving 35 shares of FA stock by reason of
holding stock in FT. See § 1.7874–2(f)(1)(i)
and paragraph (e)(4) of this section. As a
result, not taking into account the 65 shares
of FA stock held by Individual A (a former
domestic entity shareholder), 100 percent
(35/35) of the stock of FA is held by reason
of holding stock in FT and, thus, the foreign
ownership percentage is 100. See paragraph
(e)(3) of this section. Accordingly, the FT
acquisition is a covered foreign acquisition.
Therefore, because the FT acquisition occurs
pursuant to a plan that includes the DT
acquisition, the requirement set forth in
paragraph (c)(1) of this section is satisfied.
(B) The requirement set forth in paragraph
(c)(2) of this section is satisfied because, after
the FT acquisition and all related
transactions, the foreign country in which FA
is a tax resident (Country Y) is different than
the foreign country in which FT was a
resident (Country X) before the FT
acquisition and all related transactions.
(C) The requirement set forth in paragraph
(c)(3) of this section is satisfied because, not
taking into account paragraph (b) of this
section, the ownership fraction is 65/100 and
the ownership percentage is 65.
(D) Because the DT acquisition is a thirdcountry transaction, the 35 shares of FA stock
held by reason of holding stock in FT are
excluded from the denominator of the
ownership fraction. See paragraph (b) of this
section. As a result, the ownership fraction
is 65/65 and the ownership percentage is
100. The result would be the same if instead
FA had directly acquired all of the properties
held by FT in exchange for FA stock, for
example, in a transaction that would qualify
for U.S. federal income tax purposes as an
asset reorganization under section 368.
(iii) Alternative facts. The facts are the
same as in paragraph (i) of this example,
except that before the FT acquisition, but in
a transaction related to the FT acquisition, FT
becomes a tax resident of Country Y by
reincorporating in Country Y. As is the case
in paragraph (ii) of this Example, the
requirements set forth in paragraphs (c)(1)
and (3) of this section are satisfied. The
requirement set forth in paragraph (c)(2) of
this section is satisfied because, after the FT
acquisition and any related transactions, the
foreign country of which FA is a tax resident
(Country Y) is different than the foreign
country of which FT was a tax resident
(Country X) before the FT acquisition and the
reincorporation. See paragraph (e)(5) of this
section. Accordingly, the DT acquisition is a
third-country transaction and the
consequences are the same as in paragraph
(ii)(D) of this Example.
(iv) Alternative facts. The facts are the
same as in paragraph (i) of this Example,
except that, instead of FA acquiring all of the
stock of FT, FS, a newly formed foreign
corporation that is wholly owned by FA and
that is a tax resident of Country X, acquires
all the stock of FT solely in exchange for 35
shares of newly issued FA stock (FT
acquisition). As a result of the FT acquisition,
FS and FA are each treated as indirectly
acquiring 100 percent of the properties held
by FT. See § 1.7874–2(c)(1)(i) and (iii) and
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
paragraph (e)(2) of this section. Accordingly,
each of FS’s and FA’s indirect acquisition of
properties of FT (an acquired foreign
corporation) is a foreign acquisition.
However, FS’s indirect acquisition of FT’s
properties is not a covered foreign
acquisition because no shares of FS stock are
held by reason of holding stock in FT; thus,
with respect to this foreign acquisition, the
foreign ownership percentage is zero. See
§ 1.7874–2(f) and paragraphs (e)(3) and (4) of
this section. FA’s indirect acquisition of FT’s
properties is a covered foreign acquisition
because 35 shares of FA stock (the shares
received by Individual B) are held by reason
of holding stock in FT; thus, the foreign
ownership percentage is 100 percent (35/35).
See § 1.7874–2(f)(1)(i) and paragraphs (e)(3)
and (4) of this section. Accordingly, because
the FT acquisition occurs pursuant to a plan
that includes the DT acquisition, the
requirement set forth in paragraph (c)(1) of
this section is satisfied. Further, as is the case
in paragraphs (ii)(B) through (C) of this
Example, the requirements set forth in
paragraphs (c)(2) and (3) of this section are
satisfied. Therefore, the DT acquisition is a
third-country transaction and the
consequences are the same as in paragraph
(ii)(D) of this Example.
(g) Applicability dates. This section
applies to domestic entity acquisitions
completed on or after July 12, 2018. For
domestic entity acquisitions completed
before July 12, 2018, see § 1.7874–9T, as
contained in 26 CFR part 1 revised as of
April 1, 2017. However, to the extent
this section differs from § 1.7874–9T, as
contained in 26 CFR part 1 revised as of
April 1, 2017, taxpayers may elect to
consistently apply the differences to
domestic entity acquisitions completed
before July 12, 2018.
§ 1.7874–9T
[Removed]
Par. 28. Section 1.7874–9T is
removed.
■ Par. 29. Section 1.7874–10 is added to
read as follows:
■
§ 1.7874–10 Disregard of certain
distributions.
(a) Scope. This section identifies
distributions made by a domestic entity
that are disregarded in determining an
ownership fraction. Paragraph (b) of this
section provides the general rule that
former domestic entity shareholders or
former domestic entity partners are
treated as receiving additional stock of
the foreign acquiring corporation when
the domestic entity has made nonordinary course distributions (NOCDs).
Paragraph (c) of this section identifies
distributions that, in whole or in part,
are outside the scope of this section.
Paragraph (d) of this section provides a
de minimis exception to the application
of the general rule in paragraph (b) of
this section. Paragraph (e) of this section
provides rules concerning the treatment
PO 00000
Frm 00035
Fmt 4701
Sfmt 4700
32557
of distributions made by a predecessor,
and paragraph (f) of this section
provides rules for identifying a
predecessor. Paragraph (g) of this
section provides a special rule for
certain distributions described in
section 355. Paragraph (h) of this section
provides rules regarding the allocation
of NOCD stock. Paragraph (i) of this
section addresses cases in which there
are multiple foreign acquiring
corporations, and paragraph (j) of this
section addresses cases in which
multiple domestic entities are treated as
a single domestic entity. Paragraph (k)
of this section provides definitions.
Paragraph (l) of this section provides
dates of applicability. See § 1.7874–
1(d)(2) for rules addressing the
interaction of this section with the
expanded affiliated group rules of
section 7874(c)(2)(A) and § 1.7874–1.
(b) General rule regarding NOCDs.
Except as provided in paragraph (d) of
this section, for purposes of determining
the ownership percentage by value (but
not vote) described in section
7874(a)(2)(B)(ii), former domestic entity
shareholders or former domestic entity
partners, as applicable, are treated as
receiving, by reason of holding stock or
partnership interests in a domestic
entity, stock of the foreign acquiring
corporation with a fair market value
equal to the amount of the non-ordinary
course distributions (NOCDs),
determined as of the date of the
distributions, made by the domestic
entity during the look-back period. The
stock of the foreign acquiring
corporation treated as received under
this paragraph (b) (NOCD stock) is in
addition to stock of the foreign
acquiring corporation otherwise treated
as received by the former domestic
entity shareholders or former domestic
entity partners by reason of holding
stock or partnership interests in the
domestic entity.
(c) Distributions that are not NOCDs.
If only a portion of a distribution is an
NOCD, section 7874(c)(4) may apply to
the remainder of the distribution. This
section does not, however, create a
presumption that section 7874(c)(4)
applies to the remainder of the
distribution.
(d) De minimis exception to the
general rule. Paragraph (b) of this
section does not apply if—
(1) The ownership percentage
described in section 7874(a)(2)(B)(ii),
determined without regard to the
application of paragraph (b) of this
section and §§ 1.7874–4(b) and 1.7874–
7(b), is less than five (by vote and
value); and
(2) On the completion date, each five
percent former domestic entity
E:\FR\FM\12JYR2.SGM
12JYR2
amozie on DSK3GDR082PROD with RULES2
32558
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
shareholder or five percent former
domestic entity partner, as applicable,
owns (applying the attribution rules of
section 318(a) with the modifications
described in section 304(c)(3)(B)) less
than five percent (by vote and value) of
the stock of (or a partnership interest in)
each member of the expanded affiliated
group. For this purpose, a five percent
former domestic entity shareholder (or
five percent former domestic entity
partner) is a former domestic entity
shareholder (or former domestic entity
partner) that, before the domestic entity
acquisition, owned (applying the
attribution rules of section 318(a) with
the modifications described in section
304(c)(3)(B)) at least five percent (by
vote and value) of the stock of (or a
partnership interest in) the domestic
entity.
(e) Treatment of distributions made by
a predecessor. For purposes of this
section, a corporation or a partnership
(relevant entity), including a domestic
entity, is treated as making the
following distributions made by a
predecessor with respect to the relevant
entity:
(1) A distribution made before the
predecessor acquisition with respect to
the predecessor; and
(2) A distribution made in connection
with the predecessor acquisition to the
extent the property distributed is
directly or indirectly provided by the
predecessor. See paragraph (k)(1)(iv) of
this section.
(f) Rules for identifying a
predecessor—(1) Definition of
predecessor. A corporation or a
partnership (tentative predecessor) is a
predecessor with respect to a relevant
entity if—
(i) The relevant entity completes a
predecessor acquisition; and
(ii) After the predecessor acquisition
and all related transactions are
complete, the tentative predecessor
ownership percentage is at least 10.
(2) Definition of predecessor
acquisition—(i) In general. Predecessor
acquisition means a transaction in
which a relevant entity directly or
indirectly acquires substantially all of
the properties held directly or indirectly
by a tentative predecessor.
(ii) Acquisition of properties of a
tentative predecessor. For purposes of
determining whether a predecessor
acquisition occurs, the principles of
section 7874(a)(2)(B)(i) apply, including
§ 1.7874–2(c) other than § 1.7874–2(c)(2)
and (4) (regarding acquisitions of
properties of a domestic entity), without
regard to whether the tentative
predecessor is domestic or foreign.
(iii) Lower-tier entities of a
predecessor. If, before a predecessor
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
acquisition and all related transactions,
the predecessor held directly or
indirectly stock in a corporation or an
interest in a partnership, then, for
purposes of this section, the relevant
entity is not considered to directly or
indirectly acquire the properties held
directly or indirectly by the corporation
or partnership.
(3) Definition of tentative predecessor
ownership percentage. Tentative
predecessor ownership percentage
means, with respect to a predecessor
acquisition, the percentage of stock or
partnership interests (by value) in a
relevant entity held by reason of holding
stock or partnership interests in the
tentative predecessor. For purposes of
computing the tentative predecessor
ownership percentage, the following
rules apply:
(i) For purposes of determining the
stock or partnership interests in a
relevant entity held by reason of holding
stock or partnership interests in the
tentative predecessor, the principles of
section 7874(a)(2)(B)(ii) and §§ 1.7874–
2(f)(1)(i) through (iii) and 1.7874–5
apply.
(ii) For purposes of determining the
stock or partnership interests in a
relevant entity included in the
numerator of the fraction used to
compute the tentative predecessor
ownership percentage, the rules of
paragraph (f)(3)(i) of this section apply,
and all the rules applicable to
calculating the numerator of an
ownership fraction with respect to a
domestic entity acquisition apply,
except that—
(A) The principles of section
7874(c)(2)(A) and §§ 1.7874–1 and
1.7874–6 do not apply; and
(B) The principles of paragraph (b) of
this section do not apply.
(iii) For purposes of determining stock
or partnership interests in a relevant
entity included in the denominator of
the fraction used to compute the
tentative predecessor ownership
percentage, the principles of section
7874(a)(2)(B)(ii) and all rules applicable
to calculating the denominator of an
ownership fraction with respect to a
domestic entity acquisition apply,
except that—
(A) The principles of section
7874(c)(2)(A) and §§ 1.7874–1 and
1.7874–6 do not apply; and
(B) The principles of §§ 1.7874–4 and
1.7874–7 through 1.7874–9 do not
apply.
(g) Rule regarding direction of a
section 355 distribution. For purposes of
this section, if a domestic corporation
(distributing corporation) distributes the
stock of another domestic corporation
(controlled corporation) pursuant to a
PO 00000
Frm 00036
Fmt 4701
Sfmt 4700
transaction described in section 355,
and, immediately before the
distribution, the fair market value of the
stock of the controlled corporation
owned by the distributing corporation
and any related person (determined
under section 7874(d)(3), without regard
to whether the person is foreign)
represents more than 50 percent of the
fair market value of the stock of the
distributing corporation, then, the
controlled corporation is deemed, on
the date of the distribution, to have
distributed the stock of the distributing
corporation. The deemed distribution is
equal to the fair market value of the
stock of the distributing corporation (but
not taking into account the fair market
value of the stock of the controlled
corporation) on the date of the
distribution.
(h) Allocation of NOCD stock. NOCD
stock is allocated among the former
domestic entity shareholders or former
domestic entity partners, as applicable,
based on the amount of NOCDs that the
former domestic entity shareholders or
former domestic entity partners, as
applicable, are treated as having
received under this paragraph (h).
Under this paragraph (h), a pro rata
portion of each distribution during a
look-back year is treated as comprising
an NOCD with respect to the look-back
year, based on a fraction the numerator
of which is the amount of NOCDs
during the look-back year and the
denominator of which is the amount of
distributions during the look-back year.
Thus, each former domestic entity
shareholder or former domestic entity
partner, as applicable, is treated as
receiving an amount of NOCD stock
equal to the amount of NOCDs treated
as received by the former domestic
entity shareholder or former domestic
entity partner, as applicable.
(i) Multiple foreign acquiring
corporations. If there are multiple
foreign acquiring corporations with
respect to a domestic entity acquisition,
then the foreign acquiring corporation
or corporations as to which NOCD stock
is considered comprised is based on the
proportion of consideration directly or
indirectly provided by a foreign
acquiring corporation in the domestic
entity acquisition relative to the total
amount of consideration directly or
indirectly provided by the foreign
acquiring corporations in the domestic
entity acquisition. For purposes of this
paragraph (i), consideration is not
considered directly provided by a
foreign acquiring corporation if it was
indirectly provided by another foreign
acquiring corporation. In addition, for
purposes of this paragraph (i),
consideration provided in the domestic
E:\FR\FM\12JYR2.SGM
12JYR2
amozie on DSK3GDR082PROD with RULES2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
entity acquisition does not include
money or other property described in
paragraph (k)(1)(iii) of this section.
(j) Multiple domestic entities. If
pursuant to § 1.7874–2(e) two or more
domestic entities are treated as a single
domestic entity, then the determination
of the amount of NOCDs made by the
single domestic entity is made by—
(1) Applying the rules of this section
to each domestic entity on a separate
basis, with the result that the amount of
NOCDs made by each domestic entity is
separately computed; and
(2) Treating the amount of NOCDs
made by the single domestic entity as
the sum of the separately computed
NOCDs made by each domestic entity.
(k) Definitions. In addition to the
definitions provided in § 1.7874–12, the
following definitions apply for purposes
of this section.
(1) A distribution means the
following:
(i) Any distribution made by a
corporation with respect to its stock
other than—
(A) A distribution to which section
305 applies;
(B) A distribution to which section
304(a)(1) applies; and
(C) Except as provided in paragraphs
(k)(1)(iii) and (iv) of this section, a
distribution pursuant to section
361(c)(1) (other than a distribution to
which section 355 applies).
(ii) Any distribution by a partnership
(other than a distribution pursuant to
section 752(b) to the extent that the
transaction giving rise to such
distribution does not reduce the
partnership’s value).
(iii) In the case of a domestic entity,
a transfer of money or other property to
the former domestic entity shareholders
or former domestic entity partners that
is made in connection with the
domestic entity acquisition to the extent
the money or other property is directly
or indirectly provided by the domestic
entity.
(iv) In the case of a predecessor, a
transfer of money or other property to
the former owners of the predecessor
that is made in connection with the
predecessor acquisition to the extent the
money or other property is directly or
indirectly provided by the predecessor.
(2) Distribution history period—(i) In
general. Except as provided in
paragraph (k)(2)(ii) or (iii) of this
section, a distribution history period
means, with respect to a look-back year,
the 36-month period preceding the start
of the look-back year.
(ii) Formation date less than 36
months but at least 12 months before
look-back year. If the formation date is
less than 36 months, but at least 12
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
months, before the start of a look-back
year, then the distribution history
period with respect to that look-back
year means the entire period, starting
with the formation date, that precedes
the start of the look-back year.
(iii) Formation date less than 12
months before look-back year. If the
formation date is less than 12 months
before the start of a look-back year, then
there is no distribution history period
with respect to that look-back year.
(3) Formation date means, with
respect to a domestic entity, the date
that the domestic entity was created or
organized, or, if earlier, the earliest date
that any predecessor of the domestic
entity was created or organized.
(4) Look-back period means, with
respect to a domestic acquisition, the
36-month period ending on the
completion date or, if shorter, the entire
period, starting with the formation date,
that ends on the completion date.
(5) Look-back year means, with
respect to a look-back period, the
following:
(i) If the look-back period is 36
months, the three consecutive 12-month
periods that comprise the look-back
period.
(ii) If the look-back period is less than
36 months, but at least 24 months—
(A) The 12-month period that ends on
the completion date;
(B) The 12-month period that
immediately precedes the period
described in paragraph (k)(5)(ii)(A) of
this section; and
(C) The period, if any, that
immediately precedes the period
described in paragraph (k)(5)(ii)(B) of
this section.
(iii) If the look-back period is less
than 24 months, but at least 12
months—
(A) The 12-month period that ends on
the completion date; and
(B) The period, if any, that
immediately precedes the period
described in paragraph (k)(5)(iii)(A) of
this section.
(iv) If the look-back period is less than
12 months, the entire period, starting
with the formation date, that ends on
the completion date.
(6) NOCDs mean, with respect to a
look-back year, the excess of all
distributions made during the look-back
year over the NOCD threshold for the
look-back year.
(7) NOCD threshold means, with
respect to a look-back year, the
following:
(i) If the look-back year has at least a
12-month distribution history period,
110 percent of the sum of all
distributions made during the
distribution history period multiplied
PO 00000
Frm 00037
Fmt 4701
Sfmt 4700
32559
by a fraction. The numerator of the
fraction is the number of days in the
look-back year and the denominator is
the number of days in the distribution
history period with respect to the lookback year.
(ii) If the look-back year has no
distribution history period, zero.
(l) Applicability date. This section
applies to domestic entity acquisitions
completed on or after July 12, 2018. For
domestic entity acquisitions completed
before July 12, 2018, see § 1.7874–10T,
as contained in 26 CFR part 1 revised as
of April 1, 2017. However, to the extent
this section differs from § 1.7874–10T,
as contained in 26 CFR part 1 revised as
of April 1, 2017, taxpayers may elect to
consistently apply the differences to
domestic entity acquisitions completed
before July 12, 2018.
§ 1.7874–10T
[Removed]
Par. 30. Section 1.7874–10T is
removed.
■ Par. 31. Section 1.7874–11 is added to
read as follows:
■
§ 1.7874–11
gain.
Rules regarding inversion
(a) Scope. This section provides rules
for determining the inversion gain of an
expatriated entity for purposes of
section 7874. Paragraph (b) of this
section provides rules for determining
the inversion gain of an expatriated
entity. Paragraph (c) of this section
provides special rules with respect to
certain foreign partnerships in which an
expatriated entity owns an interest.
Paragraph (d) of this section provides
additional definitions. Paragraph (e) of
this section provides an example that
illustrates the rules of this section.
Paragraph (f) of this section provides the
applicability dates.
(b) Inversion gain—(1) General rule.
Except as provided in paragraphs (b)(2)
and (3) of this section, inversion gain
includes income (including an amount
treated as a dividend under section 78)
or gain recognized by an expatriated
entity for any taxable year that includes
any portion of the applicable period by
reason of a direct or indirect transfer of
stock or other properties or license of
any property either as part of the
domestic entity acquisition, or after
such acquisition if the transfer or
license is to a specified related person.
(2) Exception for property described
in section 1221(a)(1). Inversion gain
does not include income or gain
recognized by reason of the transfer or
license, after the domestic entity
acquisition, of property that is described
in section 1221(a)(1) in the hands of the
transferor or licensor.
E:\FR\FM\12JYR2.SGM
12JYR2
32560
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
amozie on DSK3GDR082PROD with RULES2
(3) Treatment of partnerships. Except
to the extent provided in paragraph (c)
of this section and section 7874(e)(2),
inversion gain does not include income
or gain recognized by reason of the
transfer or license of property by a
partnership.
(c) Transfers and licenses by
partnerships. If a partnership that is a
foreign related person transfers or
licenses property, a partner of the
partnership shall be treated as having
transferred or licensed its proportionate
share of that property, as determined
under the rules and principles of
sections 701 through 777, for purposes
of determining the inversion gain of an
expatriated entity. See section
7874(e)(2) for rules regarding the
treatment of transfers and licenses by
domestic partnerships and transfers of
interests in certain domestic
partnerships.
(d) Definitions. The definitions
provided in § 1.7874–12 apply for
purposes of this section.
(e) Example. The following example
illustrates the rules of this section.
Example —(i) Facts. On July 1, 2016, FA,
a foreign corporation, acquires all the stock
of DT, a domestic corporation, in an
inversion transaction. When the inversion
transaction occurred, DT wholly owned FS,
a foreign corporation that is a controlled
foreign corporation (within the meaning of
section 957(a)). During the applicable period,
FS sells to FA property that is not described
in section 1221(a)(1) in the hands of FS.
Under section 951(a)(1)(A), DT has a $80x
gross income inclusion that is attributable to
FS’s gain from the sale of the property. Under
section 960(a)(1), DT is deemed to have paid
$20x of the post-1986 foreign income taxes of
FS by reason of this income inclusion and
includes $20x in gross income as a deemed
dividend under section 78. Accordingly, DT
recognizes $100x ($80x + $20x) of gross
income because of FS’s sale of property to
FA.
(ii) Analysis. Pursuant to section
7874(a)(2)(A), DT is an expatriated entity.
Under paragraph (b)(1) of this section, DT’s
$100x gross income recognized under
sections 951(a)(1)(A) and 78 is inversion
gain, because it is income recognized by an
expatriated entity during the applicable
period by reason of an indirect transfer of
property by DT (through its wholly-owned
CFC, FS) after the inversion transaction to a
specified related person (FA). Sections
7874(a)(1) and (e) therefore prevent the use
of certain tax attributes (such as net operating
losses) to reduce the U.S. tax owed with
respect to DT’s $100x gross income
recognized under sections 951(a)(1)(A) and
78.
(f) Applicability dates. Except as
otherwise provided in this paragraph (f),
this section applies to transfers and
licenses of property completed on or
after November 19, 2015, but only if the
inversion transaction was completed on
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
or after September 22, 2014. For
inversion transactions completed on or
after September 22, 2014, however,
taxpayers may elect to apply paragraph
(b) of this section by excluding the
phrase ‘‘(including an amount treated as
a dividend under section 78)’’ for
transfers and licenses of property
completed on or after November 19,
2015, and before April 4, 2016.
§ 1.7874–11T
[Removed]
Par. 32. Section 1.7874–11T is
removed.
■ Par. 33. Section 1.7874–12 is added to
read as follows:
■
§ 1.7874–12
Definitions.
(a) Definitions. Except as otherwise
provided, the following definitions
apply for purposes of this section and
§§ 1.367(b)–4, 1.956–2, 1.7701(l)–4, and
1.7874–1 through 1.7874–11.
(1) An affiliated group has the
meaning set forth in section 1504(a) but
without regard to section 1504(b)(3),
except that section 1504(a) is applied by
substituting ‘‘more than 50 percent’’ for
‘‘at least 80 percent’’ each place it
appears. A member of the affiliated
group is an entity included in the
affiliated group.
(2) The applicable period means, with
respect to an inversion transaction, the
period described in section 7874(d)(1).
However, see also § 1.7874–2(b)(13) in
the case of a subsequent acquisition (or
a similar acquisition under the
principles of § 1.7874–2(c)(4)(i)) that is
an inversion transaction.
(3) The completion date means, with
respect to a domestic entity acquisition,
the date that the domestic entity
acquisition and all transactions related
to the domestic entity acquisition are
complete.
(4) A controlled foreign corporation
(or CFC) has the meaning provided in
section 957.
(5) A domestic entity acquisition
means an acquisition described in
section 7874(a)(2)(B)(i).
(6) A domestic entity means, with
respect to a domestic entity acquisition,
a domestic corporation or domestic
partnership described in section
7874(a)(2)(B)(i). A reference to a
domestic entity includes a successor to
such domestic corporation or domestic
partnership, including a corporation
that succeeds to and takes into account
amounts with respect to the domestic
entity pursuant to section 381.
(7) An expanded affiliated group (or
EAG) means, with respect to a domestic
entity acquisition, an affiliated group
that includes the foreign acquiring
corporation, determined as of the
completion date. A member of the EAG
PO 00000
Frm 00038
Fmt 4701
Sfmt 4700
is an entity included in the EAG, and a
reference to a member of the EAG
includes a predecessor with respect to
such member.
(8) An expatriated entity means, with
respect to an inversion transaction—
(i) The domestic entity; and
(ii) A United States person that, on
any date on or after the completion date,
is or was related (within the meaning of
section 267(b) or 707(b)(1)) to the
domestic entity.
(9) Expatriated foreign subsidiary—(i)
General rule. Except as provided in
paragraph (a)(9)(ii) of this section, an
expatriated foreign subsidiary means a
foreign corporation that is a CFC
(determined without applying
subparagraphs (A), (B), and (C) of
section 318(a)(3) so as to consider a
United States person as owning stock
which is owned by a person who is not
a United States person) and in which an
expatriated entity is a United States
shareholder (determined without
applying subparagraphs (A), (B), and (C)
of section 318(a)(3) so as to consider a
United States person as owning stock
which is owned by a person who is not
a United States person).
(ii) Exception to the general rule. A
foreign corporation is not an expatriated
foreign subsidiary if, with respect to the
inversion transaction as a result of
which the foreign corporation otherwise
would be an expatriated foreign
subsidiary—
(A) On the completion date, the
foreign corporation was both a CFC
(determined without applying
subparagraphs (A), (B), and (C) of
section 318(a)(3) so as to consider a
United States person as owning stock
which is owned by a person who is not
a United States person) and a member
of the EAG; and
(B) On or before the completion date,
the domestic entity was not a United
States shareholder (determined without
applying subparagraphs (A), (B), and (C)
of section 318(a)(3) so as to consider a
United States person as owning stock
which is owned by a person who is not
a United States person) with respect to
the foreign corporation.
(10) A foreign acquiring corporation
means, with respect to a domestic entity
acquisition, the foreign corporation
described in section 7874(a)(2)(B). A
reference to a foreign acquiring
corporation includes a successor to the
foreign acquiring corporation, including
a corporation that succeeds to and takes
into account amounts with respect to
the foreign acquiring corporation
pursuant to section 381.
(11) A foreign related person means,
with respect to an inversion transaction,
a foreign person that is related (within
E:\FR\FM\12JYR2.SGM
12JYR2
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Rules and Regulations
amozie on DSK3GDR082PROD with RULES2
the meaning of section 267(b) or
707(b)(1)) to, or under the same
common control as (within the meaning
of section 482), a person that is an
expatriated entity with respect to the
inversion transaction.
(12) A former domestic entity partner
of a domestic entity that is a domestic
partnership is any person that held an
interest in the partnership before the
domestic entity acquisition, including
any person that holds an interest in the
partnership both before and after the
domestic entity acquisition.
(13) A former domestic entity
shareholder of a domestic entity that is
a domestic corporation is any person
that held stock in the domestic
corporation before the domestic entity
acquisition, including any person that
holds stock in the domestic corporation
both before and after the domestic entity
acquisition.
(14) An interest in a partnership
includes a capital or profits interest.
(15) An inversion transaction means a
domestic entity acquisition in which the
foreign acquiring corporation is treated
as a surrogate foreign corporation under
VerDate Sep<11>2014
18:00 Jul 11, 2018
Jkt 244001
section 7874(a)(2)(B), taking into
account section 7874(a)(3).
(16) A non-EFS foreign related person
means, with respect to an inversion
transaction, a foreign related person that
is not an expatriated foreign subsidiary.
(17) The ownership fraction means,
with respect to a domestic entity
acquisition, the ownership percentage
described in section 7874(a)(2)(B)(ii),
expressed as a fraction.
(18) A specified related person means,
with respect to an inversion
transaction—
(i) A non-EFS foreign related person;
(ii) A domestic partnership in which
a non-EFS foreign related person is a
partner; and
(iii) A domestic trust of which a nonEFS foreign related person is a
beneficiary.
(19) A United States person means a
person described in section 7701(a)(30).
(20) A United States shareholder has
the meaning provided in section 951(b).
(b) Applicability dates. Except as
otherwise provided in this paragraph
(b), this section applies to domestic
entity acquisitions completed on or after
September 22, 2014. The following
PO 00000
Frm 00039
Fmt 4701
Sfmt 9990
32561
apply to domestic entity acquisitions
completed on or after April 4, 2016:
paragraph (a)(8) of this section; in
paragraph (a)(6) of this section, the
phrase ‘‘, including a corporation that
succeeds to and takes into account
amounts with respect to the domestic
entity pursuant to section 381’’; and the
second sentence of paragraph (a)(10) of
this section. For domestic entity
acquisitions completed on or after
September 22, 2014, and before April 4,
2016, however, taxpayers, may elect to
apply the provisions in the immediately
prior sentence.
§ 1.7874–12T
[Removed]
Par. 34. Section 1.7874–12T is
removed.
Kirsten Wielobob,
Deputy Commissioner for Services and
Enforcement.
Approved: June 22, 2018.
David J. Kautter,
Assistant Secretary of the Treasury (Tax
Policy).
[FR Doc. 2018–14693 Filed 7–11–18; 8:45 am]
BILLING CODE 4830–01–P
E:\FR\FM\12JYR2.SGM
12JYR2
i
Reader Aids
Federal Register
Vol. 83, No. 134
Thursday, July 12, 2018
CUSTOMER SERVICE AND INFORMATION
Federal Register/Code of Federal Regulations
General Information, indexes and other finding
aids
Laws
CFR PARTS AFFECTED DURING JULY
202–741–6000
741–6000
Presidential Documents
Executive orders and proclamations
The United States Government Manual
741–6000
741–6000
Other Services
Electronic and on-line services (voice)
Privacy Act Compilation
Public Laws Update Service (numbers, dates, etc.)
741–6020
741–6050
741–6043
ELECTRONIC RESEARCH
World Wide Web
Full text of the daily Federal Register, CFR and other publications
is located at: www.fdsys.gov.
Federal Register information and research tools, including Public
Inspection List, indexes, and Code of Federal Regulations are
located at: www.ofr.gov.
E-mail
FEDREGTOC (Daily Federal Register Table of Contents Electronic
Mailing List) is an open e-mail service that provides subscribers
with a digital form of the Federal Register Table of Contents. The
digital form of the Federal Register Table of Contents includes
HTML and PDF links to the full text of each document.
To join or leave, go to https://public.govdelivery.com/accounts/
USGPOOFR/subscriber/new, enter your email address, then
follow the instructions to join, leave, or manage your
subscription.
PENS (Public Law Electronic Notification Service) is an e-mail
service that notifies subscribers of recently enacted laws.
To subscribe, go to http://listserv.gsa.gov/archives/publaws-l.html
and select Join or leave the list (or change settings); then follow
the instructions.
FEDREGTOC and PENS are mailing lists only. We cannot
respond to specific inquiries.
Reference questions. Send questions and comments about the
Federal Register system to: [email protected]
The Federal Register staff cannot interpret specific documents or
regulations.
CFR Checklist. Effective January 1, 2009, the CFR Checklist no
longer appears in the Federal Register. This information can be
found online at http://bookstore.gpo.gov/.
amozie on DSK3GDR082PROD with FRONT MATTER CU
Jkt 244001
Proposed Rules:
357.......................31697, 31702
906...................................31471
981...................................31473
1206.................................32215
1220.................................31477
Frm 00001
Fmt 4712
16 CFR
1112.................................30837
1237.................................30837
10 CFR
Proposed Rules:
Proposed Rules:
8 CFR
212...................................31447
431...................................31704
1.......................................31078
12 CFR
611...................................30833
615...................................30833
19 CFR
12.....................................31654
14 CFR
1.......................................31450
21.....................................31450
25.....................................31450
26.....................................31450
27.....................................31450
34.....................................31450
39 ...........31325, 31643, 31646,
31648, 31650, 31850, 32198,
32201, 32203
43.....................................31450
45.....................................31450
PO 00000
33.....................................31479
39 ...........31488, 31491, 31493,
31496, 31499, 31504, 31507,
31509, 31705, 31911, 32221
71.....................................31708
17 CFR
210...................................31992
229...................................31992
230...................................31992
239...................................31992
240...................................31992
249...................................31992
274...................................31859
1610.................................31896
30831–31036......................... 2
31037–31324......................... 3
31325–31440......................... 5
31441–31640......................... 6
31641–31840......................... 9
31841–32060.........................10
32061–32190.........................11
32191–32562.........................12
19:41 Jul 11, 2018
Proposed Rules:
7 CFR
52.....................................31441
905...................................31442
929...................................32193
930...................................31444
3201.................................31841
4280.................................30831
Proposed Rules:
FEDERAL REGISTER PAGES AND DATE, JULY
VerDate Sep 11 2014
At the end of each month the Office of the Federal Register
publishes separately a List of CFR Sections Affected (LSA), which
lists parts and sections affected by documents published since
the revision date of each title.
60.....................................31450
2 CFR
61.....................................31450
180...................................31037
63.....................................31450
65.....................................31450
3 CFR
71 ...........31327, 31653, 31853,
Proclamations:
31854, 31855, 31857
9766.................................31641
73.....................................32061
91.....................................31450
Administrative Orders:
97 ............30833, 30836, 31450
Memorandums:
107...................................31450
Memorandum of June
110...................................31450
4, 2018 .........................31321
119...................................31450
Presidential
121...................................31450
Determinations:
125...................................31450
No. 2018–1 of June 4,
129...................................31450
2018 .............................31323
133...................................31450
5 CFR
135...................................31450
137...................................31450
890...................................32191
141...................................31450
892...................................32191
142...................................31450
894...................................32191
145...................................31450
Proposed Rules:
183...................................31450
531...................................31694
Sfmt 4712
E:\FR\FM\12JYCU.LOC
12JYCU
20 CFR
404...................................30849
416...................................30849
21 CFR
1308.................................31877
Proposed Rules:
101...................................32221
22 CFR
41.....................................31451
24 CFR
200...................................31038
330...................................31042
ii
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Reader Aids
26 CFR
328...................................32227
1.......................................32524
34 CFR
29 CFR
Proposed Rules:
300...................................31306
600...................................31296
668...................................31296
1910.................................31086
37 CFR
30 CFR
Proposed Rules:
Proposed Rules:
201...................................32068
1910.................................31045
70.....................................31710
71.....................................31710
72.....................................31710
75.....................................31710
90.....................................31710
250...................................31343
38 CFR
32 CFR
3001.................................31258
3004.................................31258
3007.................................31258
706...................................31046
763...................................31451
17.....................................31452
Proposed Rules:
17.....................................31711
39 CFR
Proposed Rules:
33 CFR
100 .........30860, 31047, 31883,
32206
117 .........31048, 31452, 31659,
31886
165 .........30862, 30863, 30865,
30866, 30869, 30871, 30872,
30875, 30877, 31048, 31050,
31052, 31054, 31055, 31057,
31059, 31060, 31062, 31886,
31887, 31889, 31891, 32208
Proposed Rules:
amozie on DSK3GDR082PROD with FRONT MATTER CU
100...................................31913
165...................................31344
VerDate Sep 11 2014
19:28 Jul 11, 2018
111...................................31712
113...................................31713
3050 .......31344, 31346, 31713,
32069
40 CFR
52 ...........31064, 31068, 31072,
31328, 31330, 31332, 31454,
32062, 32064, 32209, 32211
63.........................30879, 32213
81.........................31334, 32064
180...................................31893
Proposed Rules:
Ch. I .................................31098
Jkt 244001
PO 00000
Frm 00002
Fmt 4712
52 ...........31087, 31348, 31350,
31352, 31511, 31513, 31915
63.....................................31939
80.........................31098, 32024
110...................................32227
112...................................32227
116...................................32227
117...................................32227
122...................................32227
230...................................32227
232...................................32227
300...................................32227
302...................................32227
401...................................32227
745...................................30889
1500.................................32071
1501.................................32071
1502.................................32071
1503.................................32071
1504.................................32071
1505.................................32071
1506.................................32071
1507.................................32071
1508.................................32071
44 CFR
59.....................................31337
61.....................................31337
64.....................................31075
47 CFR
51.....................................31659
54 ............30883, 30884, 31458
63.....................................31659
68.....................................31659
Proposed Rules:
0.......................................30901
1...........................30901, 31515
5.......................................30901
27.....................................31515
51.....................................31099
54.....................................31516
61.....................................31099
73 ............30901, 31516, 32255
74.....................................30901
49 CFR
Proposed Rules:
Ch. II ................................31944
Subchp. B ........................31944
42 CFR
Proposed Rules:
50 CFR
409...................................32340
424...................................32340
447...................................32252
484...................................32340
486...................................32340
488...................................32340
635.......................30884, 31677
648.......................30887, 31684
679.......................31340, 31460
Sfmt 4711
E:\FR\FM\12JYCU.LOC
12JYCU
Proposed Rules:
635...................................31517
648.......................31354, 31945
Federal Register / Vol. 83, No. 134 / Thursday, July 12, 2018 / Reader Aids
in today’s List of Public
Laws.
LIST OF PUBLIC LAWS
Last List July 11, 2018
amozie on DSK3GDR082PROD with FRONT MATTER CU
Note: No public bills which
have become law were
received by the Office of the
Federal Register for inclusion
VerDate Sep 11 2014
19:28 Jul 11, 2018
Public Laws Electronic
Notification Service
(PENS)
PENS is a free electronic mail
notification service of newly
Jkt 244001
PO 00000
Frm 00003
Fmt 4712
Sfmt 4711
E:\FR\FM\12JYCU.LOC
12JYCU
iii
enacted public laws. To
subscribe, go to http://
listserv.gsa.gov/archives/
publaws-l.html
Note: This service is strictly
for E-mail notification of new
laws. The text of laws is not
available through this service.
PENS cannot respond to
specific inquiries sent to this
address.
| File Type | application/pdf |
| File Modified | 2018-07-12 |
| File Created | 2018-07-12 |