25460 Federal Register / Vol. 65, No. 85 / Tuesday, May 2, 2000 / Proposed Rules

§ 165.110 [Amended]

2. In § 165.110(a)(1), remove the

words ‘‘two miles’’ and add, in its place,

the words ‘‘one mile’’.

Dated: April 3, 2000.

J.R. Whitehead,

Captain, U.S. Coast Guard, Captain of the

Port, Boston, Massachusetts.

[FR Doc. 00–10848 Filed 5–1–00; 8:45 am]

BILLING CODE 4910–15–P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 62

[OK–19–1–7453b; FRL–6582–2]

Approval and Promulgation of State

Plans for Designated Facilities and

Pollutants: Oklahoma

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Proposed rule.

SUMMARY: We propose to approve the

section 111(d) Plan submitted by the

Oklahoma Department of Environmental

Quality on November 17, 1999, to

implement and enforce the Emissions

Guidelines (EG) for existing Hospital/

Medical/Infectious Waste Incinerators

(MWI). The EG require States to develop

plans to reduce toxic air emissions from

all MWIs. In the final rules section of

this Federal Register, we are approving

the State Plan as a direct final rule

without prior proposal because we view

this as a noncontroversial amendment

and anticipates no adverse comments. A

detailed rationale for the approval is set

forth in the direct final rule. If no

adverse comments are received in

response to this rule, no further activity

is contemplated in relation to this rule.

If we receive adverse comments, the

direct final rule will be withdrawn, and

all public comments received will be

addressed in a subsequent final rule

based on this proposed rule. We will not

institute a second comment period on

this action. Any parties interested in

commenting on this action should do so

at this time. Please see the direct final

notice of this action located elsewhere

in today’s Federal Register for a

detailed description of the Oklahoma

State Plan.

DATES: Comments must be received by

June 1, 2000.

ADDRESSES: You should address

comments on this action to Lt.

Commander Mick Cote, EPA Region 6,

Air Planning Section (6PD–L), 1445

Ross Avenue, Suite 1200, Dallas, Texas

75202. Copies of all materials

considered in this rulemaking may be

examined during normal business hours

at the following locations: EPA Region

6 offices, 1445 Ross Avenue, Suite 700,

Dallas, Texas 75202, and at the

Oklahoma Department of Environmental

Quality offices, 707 North Robinson,

Oklahoma City, Oklahoma 73101–1677.

FOR FURTHER INFORMATION CONTACT: Lt.

Commander Mick Cote at (214) 665–

7219.

List of Subjects in 40 CFR Part 62

Environmental protection,

Administrative practice and procedure,

Air pollution control, Intergovernmental

relations, Reporting and recordkeeping

requirements.

Dated: March 31, 2000.

Jerry Clifford,

Acting Regional Administrator, Region 6.

[FR Doc. 00–10762 Filed 5–1–00; 8:45 am]

BILLING CODE 6560–50–P

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Office of Inspector General

42 CFR Part 1003

RIN 0991–AB04

Medicare and State Health Care

Programs: Fraud and Abuse; Civil

Money Penalty Safe Harbor To Protect

Payment of Medicare Supplemental

Insurance and Medigap Premiums for

ESRD Beneficiaries

AGENCY: Office of Inspector General

(OIG), HHS.

ACTION: Notice of proposed rulemaking.

SUMMARY: In accordance with section

5201 of the Omnibus Consolidated and

Emergency Supplemental

Appropriations Act for Fiscal Year 1999,

this proposed rule would set forth in the

OIG’s civil money penalty provisions in

42 CFR part 1003 a new safe harbor for

unlawful inducements to beneficiaries

to provide protection for independent

dialysis facilities that pay, in whole or

in part, premiums for Supplementary

Medical Insurance (Medicare Part B) or

Medicare Supplemental Health

Insurance policies (Medigap) for

financially needy Medicare beneficiaries

with end-stage renal disease (ESRD).

This safe harbor would specifically

establish various standards and

guidelines that, if met, would result in

the particular arrangement being

protected from civil sanctions under

section 1128A(a)(5) of the Social

Security Act.

DATES: To assure consideration, public

comments on this proposed rule must

be delivered to the address provided

below by no later than 4:30 p.m. on July

3, 2000.

ADDRESSES: Please mail or deliver your

written comments to the following

address: Office of Inspector General,

Department of Health and Human

Services, Attention: OIG–699–P, Room

5546, Cohen Building, 330

Independence Avenue, S.W.,

Washington, D.C. 20201. We do not

accept comments by facsimile (FAX)

transmission. In commenting, please

refer to code OIG–699–P.

FOR FURTHER INFORMATION CONTACT: Julie

Kass (202) 205–9501 or Joel Schaer (202)

619–0089, Office of Counsel to the

Inspector General.

SUPPLEMENTARY INFORMATION:

I. Background

A. Section 1128A(a)(5) of the Social

Security Act

The Health Insurance Portability and

Accountability Act of 1996 (HIPAA),

Public Law 104–191, amended the

Social Security Act (Act) to prohibit

providers from offering patients any

inducement to order or receive items or

services from a particular provider,

practitioner or supplier. Specifically,

section 231(h) of HIPAA established a

new provision—section 1128A(a)(5) of

the Act—to provide for the imposition

of a civil money penalty (CMP) against

any person who:

Offers or transfers remuneration to any

individual eligible for benefits under

[Medicare or Medicaid] that such person

knows or should know is likely to influence

such individual to order or receive from a

particular provider, practitioner, or supplier

any item or service for which payment may

be made, in whole or in part, under

[Medicare or Medicaid].

Section 231(h) of HIPAA also created

a new section 1128A(i)(6) of the Act to

define the term ‘‘remuneration’’ for

purposes of the new CMP. The section

defines ‘‘remuneration,’’ in relevant

part, as ‘‘transfers of items or services

for free or for other than fair market

value.’’ Remuneration does not include

certain enumerated practices, including

waivers of coinsurance and deductible

amounts, if the waiver: (1) Is not

advertised; (2) is not routinely offered;

and (3) is made following an

individualized good faith assessment of

financial need or is made after

reasonable efforts to collect the

coinsurance or deductible amounts have

failed. There is no exception for the

payment of Medicare Part B or Medigap

insurance premiums on behalf of

beneficiaries even when the same

criteria are met.

Federal Register / Vol. 65, No. 85 / Tuesday, May 2, 2000 / Proposed Rules 25461

1See OIG Advisory Opinion 97–1.

2See OIG Advisory Opinions 97–2 and 98–17.

On October 21, 1998, Congress

enacted the Omnibus Consolidated and

Emergency Supplemental

Appropriations Act for Fiscal Year 1999

(OCESAA), Public Law 105–277.

Section 5201 of OCESAA specifically

authorized the Secretary to issue

regulations establishing ‘‘safe harbors’’

under section 1128A(a)(5) of the Act for

payment practices that would otherwise

run afoul of the statute. (In addition to

this provision, the Secretary is vested

with the authority to issue advisory

opinions providing legal and regulatory

guidance to providers under this

section.) With respect to the payment of

Medicare Part B and Medigap premiums

for ESRD patients, Congress required

any exception to be established through

a rulemaking process and limited it to

the two-year period beginning on the

date the final rule is promulgated. In

addition, if the Secretary promulgates a

safe harbor for ESRD premiums,

Congress required the Comptroller

General of the United States to conduct

a study of any disproportionate impact

on specific issuers of Medigap insurance

policies due to adverse selection in

enrolling Medicare ESRD beneficiaries.

The Comptroller report would include a

recommendation as to whether the time

limit on the safe harbor should be

extended.

B. End-Stage Renal Disease and

Medicare’s Dialysis Benefit

End-stage renal disease is a chronic

disease that requires regular renal

replacement therapy, such as dialysis

treatments, as well as regular

monitoring of laboratory values, diet

and medication. In addition to

irreversible renal failure, ESRD patients

commonly suffer from certain co-morbid

conditions, such as diabetes, anemia,

hypertension and congestive heart

failure. Without ongoing dialysis

treatment or a transplant, ESRD is a fatal

condition. End-stage renal disease

affects a disproportionate share of

minority populations that also have a

higher than average incidence of

poverty.

In 1978, Congress amended title 11 of

the Act to create a special Medicare

benefit under Public Law 95–292 for

eligible individuals with ESRD (or

dependents of those who are eligible). In

accordance with section 226A of the

Act, eligible persons are entitled to

benefits under Medicare Part A and are

eligible to enroll under Part B of the

Medicare program. End-stage renal

disease benefits include all Part A and

Part B items and services covered under

the Medicare program, and ESRD

beneficiaries are subject to all the

regular deductible, premium and

coinsurance provisions of Part A and

Part B.

Medicare pays a composite rate to

dialysis facilities for each dialysis

treatment. The composite rate includes:

(1) Medically necessary dialysis

equipment, (2) home dialysis support

services, (3) all necessary dialysis

supplies, (4) routine ESRD-related

laboratory tests and (5) all dialysis

services furnished by the dialysis

facility’s staff. Certain other ESRD

services, such as non-routine laboratory

tests, may be paid to the facility outside

of the composite rate.

Medicare Part B payments generally

cover 80 percent of the composite rate.

End-stage renal disease patients are

responsible for the remaining 20 percent

coinsurance and any deductibles.

Typically, ESRD patients are

responsible for approximately $5,000

per year in coinsurance for their dialysis

treatments alone. This amount does not

include the cost of coinsurance

associated with hospital and physician

services. In addition, ESRD patients

must pay for a number of related drugs

that are not covered by Medicare. On

average the cost of Medigap insurance

can range from approximately $1,200 to

$3,600, depending on what the policy

covers.

C. Effects of Section 1128A(a)(5) on the

ESRD Population

After the enactment of HIPAA,

representatives of a number of ESRD

providers informed the OIG that many

ESRD providers had been paying for

Medicare Part B premiums and Medigap

policies for financially needy patients

who could not afford to purchase such

insurance. Under the new statutory

CMP provision, the OIG concluded that

such premium subsidies could be

unlawful in many circumstances, and

dialysis providers subsequently

suspended the purchase of Medigap

policies and payment of Medicare Part

B premiums for their patients. However,

some providers entered into

arrangements with nonprofit

organizations that agreed to pay

premiums on behalf of needy ESRD

patients.

To date, in accordance with statutory

authority under section 1128D(b) of the

Act, the OIG has issued three advisory

opinions approving the payment by

unrelated entities of insurance

premiums for financially needy ESRD

patients. In the first opinion, the

American Kidney Fund (AKF)—a bona

fide section 501(c)(3) charitable and

educational organization—and a

number of dialysis providers established

an arrangement whereby providers

make contributions to the AKF which,

in turn, independently screens

candidates for financial need and then

pays Medicare Part B and Medigap

premiums on behalf of qualifying

patients 1. We have indicated that this

system does not violate the CMP

provision because the dialysis providers

are not making payments to patients or

on their patients’ behalf, and there is no

‘‘pass through’’ of specific payments to

specific patients. The two other

advisory opinion requests, which were

also approved, involved a State-funded

program and a Statewide program

modeled on the AKF arrangement. 2

Providers claim that these new

premium payment programs are

unwieldy, create delays and uncertainty

for beneficiaries, and create unnecessary

paperwork and bureaucracy. In

addition, the provider community has

indicated that the risks to the Medicare

and Medicaid programs and to the

patients do not appear to differ

significantly from when dialysis

providers paid the premiums directly.

II. Provisions of the Proposed Rule

We are proposing an exception to

section 1128A(a)(5) of the Act for

independent dialysis facilities, as

defined in 42 CFR 413.174, that pay for

Medicare Part B and Medigap premiums

for financially needy ESRD patients

when:

• The payment is not advertised;

• The dialysis facility does not

routinely make payments for such

policies; and

• The dialysis facility makes a good

faith determination that the individual

is financially needy.

Protection would not extend to the

payment of Medicare Part B or Medigap

premiums on behalf of any other

beneficiaries (i.e., beneficiaries without

ESRD) or by any other provider, conduct

which section 1128A(a)(5) of the Act

specifically prohibits.

The OIG is concerned that by offering

to provide financial assistance to ESRD

patients as part of an advertisement or

solicitation, providers might influence a

beneficiary’s choice of provider.

Therefore, to fit within the proposed

exception, independent dialysis

facilities would have to refrain from

advertising any offer to make such

payments. Without advertising the

payment of premiums, the likelihood

increases that ESRD patients will have

selected their dialysis provider prior to

receiving the offer of payment for

Medicare Part B or Medigap premiums.

Moreover, we believe that it is

inappropriate for health care providers

25462 Federal Register / Vol. 65, No. 85 / Tuesday, May 2, 2000 / Proposed Rules

to pay Medicare Part B or Medigap

premiums routinely on behalf of ESRD

beneficiaries, rather than to make

payment decisions on a case-by-case

basis. In this proposed rule, we are not

specifying any particular method of

determining financial need, since what

may constitute ‘‘financial need’’ will

vary depending on various factors and

circumstances. What is important is that

providers make determinations of

financial need on an individualized,

case-by-case basis in accordance with a

reasonable set of income guidelines

uniformly applied in all cases. The

guidelines should be based on objective

criteria and appropriate for the

applicable locality. We believe that it is

not appropriate to apply inflated income

guidelines that result in waivers of

copayments for persons not in genuine

financial need.

Limited applicability. Despite the

similarity of the criteria for the

proposed payment of premium safe

harbor to the statutory criteria for the

waiver of copayment exception, we

wish to emphasize that the proposed

regulatory protection would apply only

to payments by independent dialysis

facilities that have no hospital,

physician or other provider or supplier

ownership. While waivers of

copayments are themselves suspect, the

payment of insurance premiums by a

provider or supplier who is paid on a

fee-for-service basis significantly

increases the incentive for

overutilization and other abuse.

In the case of dialysis, providers are

paid a prospectively fixed payment for

the dialysis services provided to each

patient. Thus, there is less incentive to

overutilize or provide unnecessary

services, notwithstanding the additional

insurance coverage. By contrast, we

believe that a provider or supplier that

is treating a patient with a chronic

condition on a fee-for-service basis has

a strong incentive to recoup its outlay

for the premium by providing additional

services. In the case of a hospital-based

dialysis facility or independent dialysis

facility in which a hospital, physician or

other provider or supplier has an

ownership interest, we are concerned

that these providers or suppliers would

have the same incentive as other

providers or suppliers paid on a fee-forservice basis, especially given the

substantial amount of health care

services required by ESRD patients for

co-morbid conditions. Accordingly, we

are excluding from this proposed

exception hospital-based dialysis

facilities and independent dialysis

facilities, owned in whole or in part by

a hospital, physician or other provider

or supplier paid on a fee-for-service

basis, and seek specific comments on

this exclusion from the exception. We

are also concerned with the potential

impact of adverse selection on the

Medigap insurance market, and seek

specific comments concerning the

potential effects this provision may have

on Medigap plans.

III. Regulatory Impact Statement

Executive Order 12866, the Unfunded

Mandates Reform Act and the

Regulatory Flexibility Act

The Office of Management and Budget

(OMB) has reviewed this proposed rule

in accordance with the provisions of

Executive Order 12866 and the

Regulatory Flexibility Act (5 U.S.C.

601–612), and has determined that the

rulemaking does not meet the criteria

for a significant regulatory action.

Executive Order 12866 directs agencies

to assess all costs and benefits of

available regulatory alternatives and,

when rulemaking is necessary, to select

regulatory approaches that maximize

net benefits, including potential

economic, health and equity effects. The

Unfunded Mandates Reform Act (Public

Law 104–4) requires that agencies

prepare an assessment of anticipated

costs and benefits on any rulemaking

that may result in an expenditure by

State, local or tribal government, or by

the private sector of $100 million or

more in any given year. In addition,

under the Regulatory Flexibility Act, if

a rule has a significant economic effect

on a substantial number of small

businesses, the Secretary must

specifically consider the economic

effect of a rule on small business entities

and analyze regulatory options that

could lessen the impact of the rule.

Executive Order 12866

Executive Order 12866 requires that

all regulations reflect consideration of

alternatives, costs, benefits, incentives,

equity and available information.

Regulations must meet certain

standards, such as avoiding unnecessary

burden. We believe that this proposed

rule would have no significant

economic impact. The proposed safe

harbor provision being set forth is

designed to permit individuals and

entities to freely engage in business

practice and arrangements that

encourage competition, choice and

economy. In doing so, the rule would

impose no requirements on any party.

Independent dialysis facilities may

voluntarily seek to comply with this

proposed provision so that their

business practice is not subject to

enforcement actions under the civil

money penalty statute. Any aggregate

economic effect of this safe harbor rule

would be minimal, allowing

independent dialysis facilities to do

directly what some dialysis facilities are

already allowed to do indirectly through

the AKF (in accordance with OIG

Advisory Opinion 97–1). As such, we

believe that the aggregate economic

impact of this proposed safe harbor rule

would be minimal and would have no

effect on the economy or on Federal or

State expenditures.

Unfunded Mandates Reform Act

Additionally, in accordance with the

Unfunded Mandates Reform Act of

1995, since there are no significant costs

associated with this proposed safe

harbor guideline that would impose any

mandates on State, local or tribal

governments, or the private sector that

would result in an expenditure of $100

million or more in any given year, we

have determined that a full analysis

under the Act is not necessary.

Regulatory Flexibility Act

In accordance with Regulatory

Flexibility Act (RFA) of 1980, and the

Small Business Regulatory Enforcement

Act of 1996, which amended the RFA,

we have determined that this proposed

rule would have no significant

economic effect on a substantial number

of small entities. While this proposed

safe harbor may have an impact on some

small entities, we believe that the

aggregate economic impact of this

rulemaking should be minimal, since it

is the nature of a violation and not the

size of the entity that determines

whether the OIG will pursue a sanction

action. Since this proposed safe harbor

would offer individuals and entities

greater flexibility in their business

arrangements, we believe that the

proposed regulations should not have a

significant economic impact on a

number of small business providers, and

that a regulatory flexibility analysis is

not required for this rulemaking.

IV. Public Inspection of Comments

Comments will be available for public

inspection beginning on May 16, 2000

in Room 5518 of the Office of Inspector

General at 330 Independence Avenue,

SW., Washington, DC, on Monday

through Friday of each week from 8:00

a.m. to 4:30 p.m., (202) 619–0089.

Because of the large number of

comments we normally receive on

regulations, we cannot acknowledge or

respond to them individually. However,

we will consider all timely and

appropriate comments when developing

the final rule.

List of Subjects in 42 CFR Part 1003

Administrative practice and

procedure, Fraud, Grant programs—

health, Health facilities, Health

Federal Register / Vol. 65, No. 85 / Tuesday, May 2, 2000 / Proposed Rules 25463

professions, Maternal and child health,

Medicare, Medicaid, Penalties.

Accordingly, 42 CFR part 1003 would

be amended as set forth below:

PART 1003—[AMENDED]

1. The authority citation for part 1003

would be revised to read as follows:

Authority: 42 U.S.C. 1302, 1320–7, 1320a–

7a, 1320b–10, 1395u(j), 1395u(k),

1395dd(d)(1), 1395mm, 1395nn, 1395ss(d),

1396b(m), 11131(c), 11137(b)(2).

2. Section 1003.101 would be

amended by:

a. Republishing the introductory text;

and

b. Amending the definition of

renumeration by revising the

introductory text and paragraphs (3) and

(4), and by adding a new paragraph (5).

§ 1003.101 Definitions.

For purposes of this part:

* * * * *

Remuneration, as set forth in

§ 1003.102(b)(12) of this part, is

consistent with the definition contained

in section 1128A(i)(6) of the Act, and

includes the waiver of coinsurance and

deductible amounts (or any part thereof)

and transfers of items or services for free

or for other than fair market value. The

term ‘‘remuneration’’ does not include—

* * * * *

(3) Differentials in coinsurance and

deductible amounts as part of a benefit

plan design (as long as the differentials

have been disclosed in writing to all

beneficiaries, third party payers and

providers), to whom claims are

presented;

(4) Incentives given to individuals to

promote the delivery of preventive care

services where the delivery of such

services is not tied (directly or

indirectly) to the provision of other

services reimbursed in whole or in part

by Medicare or an applicable State

health care program. Such incentives

may include the provision of preventive

care, but may not include—

(i) Cash or instruments convertible to

cash; or

(ii) An incentive the value of which

is disproportionately large in

relationship to the value of the

preventive care service (i.e., either the

value of the service itself or the future

health care costs reasonably expected to

be avoided as a result of the preventive

care); or

(5) Any payments for Supplementary

Medical Insurance (Medicare Part B) or

Medicare Supplemental Health

Insurance (Medigap) premium amounts

(or any parts thereof) by an independent

dialysis facility, as defined in § 413.174

of this title, that is not owned in whole

or in part by a hospital, physician, or

other provider or supplier paid on a feefor-service basis, as long as all of the

following three standards are met —

(i) The payment is not offered as part

of any advertisement or solicitation;

(ii) The facility does not routinely

make payments for such premiums; and

(iii) The facility makes the payment

for such premiums only after

determining in good faith that the

individual on behalf of whom such

payment is made is in financial need.

* * * * *

Dated: August 9, 1999.

June Gibbs Brown,

Inspector General.

Approved: September 2, 1999.

Editorial Note: This document was received

at the Office of the Federal Register on April

25, 2000.

Donna E. Shalala,

Secretary.

[FR Doc. 00–10695 Filed 5–1–00; 8:45 am]

BILLING CODE 4152–01–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 73

[DA 00–831; MM Docket No. 99–282; RM–

9710]

Radio Broadcasting Services;

Littlefield, AZ

AGENCY: Federal Communications

Commission.

ACTION: Proposed rule; denial.

SUMMARY: This document denies a

petition for rule making filed by

Mountain West Broadcasting proposing

the allotment of FM Channel 265C to

Littlefield, Arizona, as a first local aural

transmission service, for failure to

establish that locality is a bona fide

community for allotment purposes. See

64 FR 51286, September 22, 1999. With

this action, the proceeding is

terminated.

ADDRESSES: Federal Communications

Commission, Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT:

Nancy Joyner, Mass Media Bureau, (202)

418–2180.

SUPPLEMENTARY INFORMATION: This is a

synopsis of the Commission’s Report

and Order, MM Docket No. 99–282,

adopted April 5, 2000, and released

April 14, 2000 . The full text of this

Commission decision is available for

inspection and copying during normal

business hours in the FCC’s Reference

Information Center (Room CY–A257),

445 Twelfth Street, SW., Washington,

DC. The complete text of this decision

may also be purchased from the

Commission’s copy contractor,

International Transcription Service,

Inc., 1231 20th Street, NW.,

Washington, D.C. 20036, (202) 857–

3800.

List of Subjects in 47 CFR Part 73

Radio broadcasting.

Federal Communications Commission.

John A. Karousos,

Chief, Allocations Branch, Policy and Rules

Division, Mass Media Bureau.

[FR Doc. 00–10756 Filed 5–1–00; 8:45 am]

BILLING CODE 6712–01–P