Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Rules and Regulations 537 

have been examined, and it has been 

determined not to be a significant 

regulatory action under Executive Order 

12866. VA’s impact analysis can be 

found as a supporting document at 

http://www.regulations.gov, usually 

within 48 hours after the rulemaking 

document is published. Additionally, a 

copy of the rulemaking and its impact 

analysis are available on VA’s website at 

http://www.va.gov/orpm/, by following 

the link for ‘‘VA Regulations Published 

From FY 2004 Through Fiscal Year to 

Date.’’ This rule is not an Executive 

Order 13771 regulatory action because 

this rule is not significant under 

Executive Order 12866. 

Unfunded Mandates 

The Unfunded Mandates Reform Act 

of 1995 requires, at 2 U.S.C. 1532, that 

agencies prepare an assessment of 

anticipated costs and benefits before 

issuing any rule that may result in the 

expenditure by State, local, and tribal 

governments, in the aggregate, or by the 

private sector, of $100 million or more 

(adjusted annually for inflation) in any 

one year. This final rule will have no 

such effect on State, local, and tribal 

governments, or on the private sector. 

Paperwork Reduction Act 

This final rule contains no provisions 

constituting a collection of information 

under the Paperwork Reduction Act of 

1995 (44 U.S.C. 3501–3521). 

Regulatory Flexibility Act 

The Regulatory Flexibility Act, 5 

U.S.C. 601 et seq. (RFA), imposes 

certain requirements on Federal agency 

rules that are subject to the notice and 

comment requirements of the 

Administrative Procedure Act (APA), 5 

U.S.C. 553(b). This final rule is exempt 

from the notice and comment 

requirements of the APA because the 

2015 Act directed the Department to 

issue the annual adjustments without 

regard to section 553 of the APA. 

Therefore, the requirements of the RFA 

applicable to notice and comment 

rulemaking do not apply to this rule. 

Accordingly, the Department is not 

required either to certify that the final 

rule would not have a significant 

economic impact on a substantial 

number of small entities or to conduct 

a regulatory flexibility analysis. 

Catalog of Federal Domestic Assistance 

The Catalog of Federal Domestic 

Assistance number and title for the 

program affected by this document is 

64.114, Veterans Housing Guaranteed 

and Insured Loans. 

List of Subjects 

38 CFR Part 36 

Condominiums, Housing, Individuals 

with disabilities, Loan programs— 

housing and community development, 

Loan programs—veterans, Manufactured 

homes, Mortgage insurance, Reporting 

and recordkeeping requirements, 

Veterans. 

38 CFR Part 42 

Administrative practice and 

procedure, Claims, Fraud, Penalties. 

Signing Authority 

The Secretary of Veterans Affairs 

approved this document and authorized 

the undersigned to sign and submit the 

document to the Office of the Federal 

Register for publication electronically as 

an official document of the Department 

of Veterans Affairs. Robert L. Wilkie, 

Secretary, Department of Veterans 

Affairs, approved this document on 

January 23, 2019, for publication. 

Dated: January 23, 2019. 

Jeffrey M. Martin, 

Assistant Director, Office of Regulation Policy 

& Management, Office of the Secretary, 

Department of Veterans Affairs. 

For the reasons stated in the 

preamble, the Department of Veterans 

Affairs amends 38 CFR parts 36 and 42 

as set forth below: 

PART 36—LOAN GUARANTY 

■ 1. The authority citation for part 36 

continues to read as follows: 

Authority: 38 U.S.C. 501 and 3720. 

§ 36.4340 [Amended] 

■ 2. In § 36.4340, amend paragraphs 

(k)(1)(i) introductory text and (k)(3) by 

removing ‘‘$22,363’’ and adding in its 

place ‘‘$22,927’’. 

PART 42—STANDARDS 

IMPLEMENTING THE PROGRAM 

FRAUD CIVIL REMEDIES ACT 

■ 3. The authority citation for part 42 

continues to read as follows: 

Authority: Pub. L. 99–509, secs. 6101– 

6104, 100 Stat. 1874, codified at 31 U.S.C. 

3801–3812. 

§ 42.3 [Amended] 

■ 4. In § 42.3, amend paragraphs 

(a)(1)(iv) and (b)(1)(ii) by removing 

‘‘$11,181’’ and adding in its place 

‘‘$11,463’’. 

[FR Doc. 2019–00369 Filed 1–30–19; 8:45 am] 

BILLING CODE 8320–01–P 

POSTAL REGULATORY COMMISSION 

39 CFR Part 3015 

[Docket No. RM2017–1; Order No. 4963] 

Competitive Postal Products 

AGENCY: Postal Regulatory Commission. 

ACTION: Final rule. 

SUMMARY: The Commission is adopting 

a final rule concerning the minimum 

amount that the Postal Service’s 

competitive products as a whole are 

required to contribute to institutional 

costs annually. The rule as adopted uses 

a formula-based approach to annually 

calculate competitive products’ 

appropriate share of institutional costs. 

For additional information, Order No. 

4963 can be accessed electronically 

through the Commission’s website at 

https://www.prc.gov. 

DATES: Effective: March 4, 2019. 

FOR FURTHER INFORMATION CONTACT: 

David A. Trissell, General Counsel, at 

202–789–6820. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Relevant Statutory Requirements 

II. Background 

III. Basis and Purpose of Rule Change 

IV. Final Rule 

I. Relevant Statutory Requirements 

Section 3633(a)(3) of title 39 of the 

United States Code requires the 

Commission to ‘‘ensure that all 

competitive products collectively cover 

what the Commission determines to be 

an appropriate share of the institutional 

costs of the Postal Service.’’ 39 U.S.C. 

3633(a)(3). Section 3633(b) requires that 

the Commission revisit the appropriate 

share regulation at least every 5 years in 

order to determine if the minimum 

contribution requirement should be 

‘‘retained in its current form, modified, 

or eliminated.’’ 39 U.S.C. 3633(b). In 

making such a determination, the 

Commission is required to consider ‘‘all 

relevant circumstances, including the 

prevailing competitive conditions in the 

market, and the degree to which any 

costs are uniquely or disproportionately 

associated with any competitive 

products.’’ Id. 

II. Background 

Pursuant to section 3633(b), the 

Commission initiated Docket No. 

RM2017–1 for the purpose of 

conducting its second review of the 

appropriate share requirement since the 

enactment of the Postal Accountability 

and Enhancement Act (PAEA), Public 

Law 109–435, 120 Stat. 3198 (2006). In 

the decade following the PAEA’s 


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538 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Rules and Regulations 

1See Docket No. RM2007–1. Order Proposing 

Regulations to Establish a System of Ratemaking, 

August 15, 2007, at 70 (Order No. 26). 

2See Order No. 26 at 70–74; Docket No. RM2007– 

1, Order Establishing Ratemaking Regulations for 

Market Dominant and Competitive Products, 

October 29, 2007, at 91, 138 (Order No. 43). 

3See generally Docket No. RM2012–3, Order 

Reviewing Competitive Products’ Appropriate 

Share Contribution to Institutional Costs, August 

23, 2012 (Order No. 1449). 

4See Docket No. RM2017–1, Order Adopting 

Final Rules Relating to the Institutional Cost 

Contribution Requirement for Competitive 

Products, January 3, 2019, at 4–12, 114–170 (Order 

No. 4963); Docket No. RM2017–1, Revised Notice 

of Proposed Rulemaking, August 7, 2018, at 41–42 

(Order No. 4742); Docket No. RM2017–1, Notice of 

Proposed Rulemaking to Evaluate the Institutional 

Cost Contribution Requirement for Competitive 

Products, February 8, 2018, at 12, 32, 34–53 (Order 

No. 4402). 

enactment, competitive products’ 

appropriate share has been set at 5.5 

percent of the Postal Service’s total 

institutional costs. When the 

Commission promulgated its initial 

competitive product rules in Docket No. 

RM2007–1, it found that basing the 

appropriate share on a percentage of 

total institutional costs was an easily 

understood approach that mirrored the 

directive of section 3633(a)(3).1 The 

Commission considered the amount that 

competitive products had historically 

contributed to the Postal Service’s 

institutional costs and set the 

appropriate share at 5.5 percent.2 In 

Docket No. RM2012–3, the Commission 

completed its first review of the 

appropriate share and, after performing 

a qualitative evaluation of the criteria of 

section 3633(b), determined that the 

appropriate share should be maintained 

at 5.5 percent.3

In its second review of the 

appropriate share, the Commission 

found that market conditions have 

changed since the PAEA’s enactment 

and since the Commission’s last review 

of the appropriate share.4 Most 

significantly, the parcel delivery market 

has experienced a significant increase in 

demand, particularly over the last 5 

years, due to the growing prevalence of 

e-commerce. Order No. 4963 at 5–12. 

This has led to steady increases in 

revenue and profit for all competitors in 

the market, as well as growth in 

competitive volumes and market share 

for the Postal Service. Id. 

III. Basis and Purpose of Rule Change 

In light of the changes described 

above, Order No. 4963 implements a 

formula-based approach to determining 

the appropriate share and adopts related 

rule changes. Id. at 19–29. The purpose 

of the Commission’s formula-based 

approach is to provide an objective basis 

on which to quantify the statutory 

considerations of section 3633(b) in 

order to determine the year-to-year 

change in competitive products’ joint 

minimal capacity to generate profit that 

can be contributed to the coverage of 

institutional costs. Id. 

The objective basis that the formula 

relies on is the Postal Service’s market 

power, which implicitly captures the 

vast majority of the qualitative 

considerations that the Commission has 

previously looked to in assessing the 

prevailing competitive conditions in the 

market and other relevant 

circumstances. Id. at 20. Market power 

is a firm’s ability to price a product or 

service higher than the marginal cost of 

producing it and, as a concept, 

embodies both absolute and relative 

aspects. Id. at 20–21. A firm’s absolute 

market power is its ability to raise prices 

with regard to its own consumers. Id. at 

21, 22. A firm’s relative market power, 

which can also be described as its 

market position, is its capacity to 

exercise market power relative to its 

competitors. Id. at 21, 25. A firm’s 

absolute market power in a competitive 

market will necessarily be limited by its 

market position and, as such, the Postal 

Service’s absolute market power and its 

market position must be assessed in 

conjunction. Id. at 21. 

In order to assess the Postal Service’s 

absolute market power and its market 

position, the formula utilizes two 

distinct components. The first 

component is the Competitive 

Contribution Margin, which measures 

the Postal Service’s absolute market 

power. Id. at 22–24. Specifically, the 

Competitive Contribution Margin is 

calculated by subtracting the total 

attributable costs of producing the 

Postal Service’s competitive products 

collectively from the total amount of 

revenue the Postal Service is able to 

realize from those competitive products 

collectively in a given fiscal year, and 

then dividing this result by the total 

competitive product revenue. Id. at 23– 

24. The formula assesses the year-overyear percent change in the Competitive 

Contribution Margin to determine how 

much, if any, the Postal Service’s 

absolute market power has changed. Id. 

at 22. 

The second component of the formula 

is the Competitive Growth Differential, 

which measures the Postal Service’s 

market position. Id. at 25–26. 

Specifically, the Competitive Growth 

Differential is calculated by subtracting 

the year-over-year percent change in the 

combined revenue for the Postal 

Service’s competitors from the yearover-year percent change in the Postal 

Service’s competitive product revenue. 

Id. at 25. This relative growth is then 

weighted by the Postal Service’s market 

share. Id. 

Using the above-described 

components, the Commission’s formula 

is represented by the following 

equation: 

ASt ∂ 1 = ASt * (1+%DCCMt¥1 + 

CGDt¥1) 

If t=0=FY 2007, AS = 5.5% 

Where, 

AS = Appropriate Share 

CCM = Competitive Contribution Margin 

CGD = Competitive Growth Differential 

t = Fiscal Year 

Id. at 26. 

In order to calculate an upcoming 

fiscal year’s appropriate share 

percentage (ASt ∂ 1), the formula 

multiplies the sum of the prior fiscal 

year’s Competitive Growth Differential 

and percentage change in the 

Competitive Contribution Margin (1 + 

%DCCMt¥1 + CGDt¥1) by the current 

fiscal year’s appropriate share (ASt). Id. 

at 27. Both components of the formula 

are given equal weight. Id. The formula 

is recursive in order to incorporate all 

changes in the parcel delivery market 

since the PAEA was enacted and the 

appropriate share was initially set. Id. 

The formula’s calculation thus begins in 

FY 2007 with a beginning appropriate 

share of 5.5 percent. Id. The upcoming 

fiscal year’s appropriate share will be 

updated by the Commission each year 

as part of the Commission’s Annual 

Compliance Determination, which is 

performed pursuant to 39 U.S.C. 3653. 

Id. 

IV. Final Rule 

In order to implement the 

Commission’s formula, existing 

§ 3015.7(c) is revised. Final 

§ 3015.7(c)(1) establishes the formula 

which is to be used in calculating the 

appropriate share and defines each of 

the formula’s terms. Existing § 3015.7(c) 

states that the appropriate share of 

institutional costs to be covered by 

competitive products set forth in that 

rule is a minimum contribution level, 

and final § 3015.7(c)(1) retains this 

concept. 

Final § 3015.7(c)(2) establishes the 

process by which the Commission shall 

update the appropriate share for each 

fiscal year. The Commission will 

annually use the formula to calculate 

the minimum appropriate share for the 

upcoming fiscal year and report the new 

appropriate share level for the 

upcoming fiscal year as part of its 

Annual Compliance Determination. 

List of Subjects for 39 CFR Part 3015 

Administrative practice and 

procedure. 


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Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Rules and Regulations 539 

For the reasons stated in the 

preamble, the Commission amends 

chapter III of title 39 of the Code of 

Federal Regulations as follows: 

PART 3015—REGULATION OF RATES 

FOR COMPETITIVE PRODUCTS 

■ 1. The authority citation for part 3015 

continues to read as follows: 

Authority: 39 U.S.C. 503; 3633. 

■ 2. Amend § 3015.7 by revising 

paragraph (c) to read as follows: 

§ 3015.7 Standard for Compliance. 

* * * * * 

(c)(1) Annually, on a fiscal year basis, 

the appropriate share of institutional 

costs to be recovered from competitive 

products collectively, at a minimum, 

will be calculated using the following 

formula: 

ASt ∂ 1 = ASt * (1+%DCCMt¥1 + 

CGDt¥1) 

Where, 

AS = Appropriate Share, expressed as a 

percentage and rounded to one decimal 

place 

CCM = Competitive Contribution Margin 

CGD = Competitive Growth Differential 

t = Fiscal Year 

If t = 0 = FY 2007, AS = 5.5 percent 

(2) The Commission shall, as part of 

each Annual Compliance 

Determination, calculate and report 

competitive products’ appropriate share 

for the upcoming fiscal year using the 

formula set forth in paragraph (c)(1) of 

this section. 

By the Commission. 

Stacy L. Ruble, 

Secretary. 

[FR Doc. 2019–00399 Filed 1–30–19; 8:45 am] 

BILLING CODE 7710–FW–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 414 

[CMS–1693–CN] 

RIN 0938–AT31 

Medicare Program; Revisions to 

Payment Policies Under the Physician 

Fee Schedule and Other Revisions to 

Part B for CY 2019; Medicare Shared 

Savings Program Requirements; 

Quality Payment Program; Medicaid 

Promoting Interoperability Program; 

Quality Payment Program—Extreme 

and Uncontrollable Circumstance 

Policy for the 2019 MIPS Payment 

Year; Provisions From the Medicare 

Shared Savings Program— 

Accountable Care Organizations 

Pathways to Success; and Expanding 

the Use of Telehealth Services for the 

Treatment of Opioid Use Disorder 

Under the Substance Use-Disorder 

Prevention That Promotes Opioid 

Recovery and Treatment (SUPPORT) 

for Patients and Communities Act; 

Correction 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Correction of final rule. 

SUMMARY: This document corrects 

technical errors that appeared in the 

final rule published in the Federal 

Register on November 23, 2018 entitled 

‘‘Medicare Program; Revisions to 

Payment Policies under the Physician 

Fee Schedule and Other Revisions to 

Part B for CY 2019; Medicare Shared 

Savings Program Requirements; Quality 

Payment Program; Medicaid Promoting 

Interoperability Program; Quality 

Payment Program—Extreme and 

Uncontrollable Circumstance Policy for 

the 2019 MIPS Payment Year; 

provisions from the Medicare Shared 

Savings Program—Accountable Care 

Organizations Pathways to Success; and 

Expanding the Use of Telehealth 

Services for the Treatment of Opioid 

Use Disorder under the Substance UseDisorder Prevention that Promotes 

Opioid Recovery and Treatment 

(SUPPORT) for Patients and 

Communities Act.’’ 

DATES: This correcting document is 

effective January 31, 2019, and is 

applicable beginning January 1, 2019. 

FOR FURTHER INFORMATION CONTACT: 

Benjamin Chin, (410) 786–0679, Alesia 

Hovatter (410) 786–6861 or Molly 

MacHarris, (410) 786–4461. 

SUPPLEMENTARY INFORMATION: 

I. Background 

In FR Doc. 2018–24170 of November 

23, 2018 (83 FR 59452 through 60303), 

there were a number of technical errors 

that are identified and corrected in the 

Correction of Errors section below. 

These corrections are effective January 

1, 2019. 

II. Summary of Errors 

A. Summary of Errors in the Regulation 

Text 

On page 60090, in regulation text 

regarding § 414.1415, we made a 

typographical error in identifying the 

year in the effective date. 

B. Summary of Errors in the Appendix 

On page 60151, we inadvertently 

omitted Table B.6. Internal Medicine 

(Removal Table), Table B.7. Emergency 

Medicine, Table B.8. Obstetrics/ 

Gynecology, Table B.9. Ophthalmology, 

Table B.10. Orthopedic Surgery, Table 

B.11. Otolaryngology, Table B.12. 

Pathology, and Table B.13 Pediatrics. 

III. Waiver of Proposed Rulemaking 

Under 5 U.S.C. 553(b) of the 

Administrative Procedure Act (the 

APA), the agency is required to publish 

a notice of the proposed rule in the 

Federal Register before the provisions 

of a rule take effect. Similarly, section 

1871(b)(1) of the Social Security Act 

(the Act) requires the Secretary to 

provide for notice of the proposed rule 

in the Federal Register and provide a 

period of not less than 60 days for 

public comment. In addition, section 

553(d) of the APA and section 

1871(e)(1)(B)(i) of the Act mandate a 30- 

day delay in effective date after issuance 

or publication of a rule. Sections 

553(b)(B) and 553(d)(3) of the APA 

provide for exceptions from the APA 

notice and comment, and delay in 

effective date requirements; in cases in 

which these exceptions apply, sections 

1871(b)(2)(C) and 1871(e)(1)(B)(ii) of the 

Act provide exceptions from the notice 

and 60-day comment period and delay 

in effective date requirements of the Act 

as well. Section 553(b)(B) of the APA 

and section 1871(b)(2)(C) of the Act 

authorize an agency to dispense with 

normal notice and comment rulemaking 

procedures for good cause if the agency 

makes a finding that the notice and 

comment process is impracticable, 

unnecessary, or contrary to the public 

interest, and includes a statement of the 

finding and the reasons for it in the rule. 

In addition, section 553(d)(3) of the 

APA and section 1871(e)(1)(B)(ii) allow 

the agency to avoid the 30-day delay in 

effective date where such delay is 

contrary to the public interest and the 


khammond on DSKBBV9HB2PROD with RULES