31124 Federal Register / Vol. 65, No. 95 / Tuesday, May 16, 2000 / Proposed Rules

F. How Does This Proposed Rule

Comply With Executive Order 13084:

Consultation and Coordination With

Indian Tribal Governments?

Under Executive Order 13084, EPA

may not issue a regulation that is not

required by statute, that significantly or

uniquely affects the communities of

Indian tribal governments, and that

imposes substantial direct compliance

costs on those communities, unless the

federal government provides the funds

necessary to pay the direct compliance

costs incurred by the tribal

governments. If the mandate is

unfunded, EPA must provide to the

Office of Management and Budget, in a

separately identified section of the

preamble to the rule, a description of

the extent of EPA’s prior consultation

with representatives of affected tribal

governments, a summary of the nature

of their concerns, and a statement

supporting the need to issue the

regulation. In addition, Executive Order

13084 requires EPA to develop an

effective process permitting elected and

other representatives of Indian tribal

governments to provide meaningful and

timely input in the development of

regulatory policies on matters that

significantly or uniquely affect their

communities.

Today’s proposed rule will not

significantly or uniquely affect the

communities of Indian tribal

governments, and it will not impose

substantial direct compliance costs on

such communities. Although Indian

tribal communities live in areas near the

Androscoggin River, their governments

will not be subject to any compliance

costs relating to the proposed sitespecific rule since the rule is directed at

the International Paper mill. Nearby

Indian tribal communities are, in fact,

expected to benefit directly from the

anticipated improvement in water

quality. Accordingly, the requirements

of section 3(b) of Executive Order 13084

do not apply to this rule.

G. Does This Proposed Rule Comply

With Executive Order 13132?

Executive Order 13132, entitled

‘‘Federalism’’ (64 FR 43255; August 10,

1999), requires EPA 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 implications’’ 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 Section 6 of Executive Order

13132, EPA 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 governments, or EPA consults with

State and local officials early in the

process of developing the proposed

regulation. EPA also may not issue a

regulation that has federalism

implications and that preempts State

law, unless the Agency consults with

State and local officials early in the

process of developing the proposed

regulation.

This proposed rule does not have

federalism implications. It would apply

only to a single facility, and it will

therefore not 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, as

specified in Executive Order 13132.

Thus, the requirements of section 6 of

the Executive Order do not apply to this

rule.

H. Does This Proposed Rule Comply

With the National Technology Transfer

and Advancement Act?

Section 12(d) of the National

Technology Transfer and Advancement

Act of 1995 (‘‘NTTAA’’), Public Law

104–113, section 12(d) (15 U.S.C. 272

note) directs EPA to use voluntary

consensus standards in its regulatory

activities unless to do so would be

inconsistent with applicable law or

otherwise impractical. Voluntary

consensus standards are technical

standards (e.g., materials specifications,

test methods, sampling procedures, and

business practices) that are developed or

adopted by voluntary consensus

standards bodies. The NTTAA directs

EPA to provide Congress, through OMB,

explanations when the Agency decides

not to use available and applicable

voluntary consensus standard. This

proposed rulemaking does not involve

technical standards developed by any

voluntary consensus standards bodies.

Therefore, EPA is not considering the

use of any voluntary consensus

standards. EPA welcomes comments on

this aspect of the proposed rulemaking

and, specifically, invites the public to

identify potentially-applicable

voluntary consensus standards and to

explain why such standards should be

used in this regulation.

List of Subjects in 40 CFR Part 430

Environmental protection, Reporting

and recordkeeping requirements, Water

pollution control.

Dated: May 10, 2000.

Carol M. Browner,

Administrator.

For the reasons set forth in the

preamble, title 40 chapter I of the Code

of Federal Regulations is proposed to be

amended as follows:

PART 430—THE PULP, PAPER, AND

PAPERBOARD POINT SOURCE

CATEGORY

1. The authority citation for part 430

continues to read as follows:

Authority: Sections 301, 304, 306, 307,

308, 402, and 501 of the Clean Water Act, as

amended, (33 U.S.C. 1311, 1314, 1316, 1317,

1318, 1342, and 1361), and section 112 of the

Clean Air Act, as amended (42 U.S.C. 7412).

2. Section 430.03 is amended by

adding paragraph (k) to read as follows:

§ 430.03 Best management practices

(BMPs) for spent pulping liquor, soap, and

turpentine management, spill prevention,

and control.

* * * * *

(k) The provisions of paragraphs (c)

through (j) of this section do not apply

to the bleached papergrade kraft mill,

commonly known as the Androscoggin

Mill, that is owned by International

Paper and located in Jay, Maine. In lieu

of imposing the requirements specified

in those paragraphs, the permitting

authority shall establish conditions for

the discharge of COD and color for this

mill on the basis of best professional

judgment.

[FR Doc. 00–12305 Filed 5–15–00; 8:45 am]

BILLING CODE 6560–50–P

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Health Care Financing Administration

42 CFR Part 405

[HCFA–3432–NOI]

RIN 0938–AJ31

Medicare Program; Criteria for Making

Coverage Decisions

AGENCY: Health Care Financing

Administration (HCFA), HHS.

ACTION: Notice of intent to publish a

proposed rule.

SUMMARY: On April 27, 1999, we

published a notice in the Federal

Register that announced the process we

Federal Register / Vol. 65, No. 95 / Tuesday, May 16, 2000 / Proposed Rules 31125

use to make national coverage decisions

under the Medicare program. We also

announced that we would not be

adopting, as final, a 1989 proposed rule

that set forth the criteria we would have

used to make coverage decisions under

Medicare. This notice announces our

intention to publish a proposed rule and

solicits advance public comments on

the criteria we would use to make

certain national coverage decisions and

our contractors would use to make local

coverage decisions.

DATES: We will consider comments if

we receive them at the appropriate

address, as provided below, no later

than 5 p.m. on June 15, 2000.

ADDRESSES: Mail written comments (one

original and three copies) to the

following address ONLY: Health Care

Financing Administration, Department

of Health and Human Services,

Attention: HCFA–3432–NOI, P.O. Box

8016, Baltimore, MD 21244–8016.

If you prefer, you may deliver, by

courier, your written comments (one

original and three copies) to one of the

following addresses:

Room 443–G, Hubert H. Humphrey

Building, 200 Independence Avenue,

SW., Washington, DC 20201, or

C5–14–03, Central Building, 7500

Security Boulevard, Baltimore, MD

21244–1850.

Comments mailed to those addresses

may be delayed and received too late for

us to consider them.

Because of staffing and resource

limitations, we cannot accept comments

by facsimile (FAX) transmission. In

commenting, please refer to file code

HCFA–3432–NOI.

Comments received timely will be

available for public inspection as they

are received, generally beginning

approximately 3 weeks after publication

of a document, in Room 443–G of the

Department’s offices at 200

Independence Avenue, SW.,

Washington, DC, on Monday through

Friday of each week from 8:30 a.m. to

5 p.m. (Phone (202) 690–7890).

FOR FURTHER INFORMATION CONTACT:

Susan Gleeson, (410) 786–0542.

SUPPLEMENTARY INFORMATION: 

Comments, Procedures, Availability of

Copies, and Electronic Access

Because of staff and resource

limitations, we cannot accept comments

by facsimile (FAX) transmission. In

commenting, please refer to file code

HCFA–3432–NOI. Comments received

timely will be available for public

inspection as they are received,

generally beginning approximately 3

weeks after publication of a document,

in Room 443–G of the Department’s

office at 200 Independence Avenue,

SW., Washington, DC, on Monday

through Friday of each week from 8:30

to 5 p.m. (phone: (202) 690–7890).

Copies: To order copies of the Federal

Register containing this document, send

your request to: New Orders,

Superintendent of Documents, P.O. Box

371954, Pittsburgh, PA 15250–7954.

Specify the date of the issue requested

and enclose a check or money order

payable to the Superintendent of

Documents, or enclose your Visa or

Master Card number and expiration

date. Credit card orders can also be

placed by calling the order desk at (202)

512–1800 or by faxing to (202) 512–

2250. The cost for each copy is $8. As

an alternative, you can view and

photocopy the Federal Register

document at most libraries designated

as Federal Depository Libraries and at

many other public and academic

libraries throughout the country that

receive the Federal Register.

This Federal Register document is

also available from the Federal Register

online database through GPO Access, a

service of the U.S. Government Printing

Office. Free public access is available on

a Wide Area Information Server (WAIS)

through the Internet and via

asynchronous dial-in. Internet users can

access the database by using the World

Wide Web; the Superintendent of

Documents home page address is http:/

/www.access.gpo.gov/naraldocs/, by

using local WAIS client software, or by

telnet to swais.access.gpo.gov, then

login as guest (no password required).

Dial-in users should use

communications software and modem

to call 202–512–1661; type swais, then

login as guest (no password required).

Overview

We are issuing this notice to

announce our intention to publish a

proposed rule and solicit public

comments on the criteria we would use

to make a national coverage decision

(NCD) and our contractors would use to

make a local coverage decision (LCD)

under section 1862(a)(1) of the Social

Security Act (the Act). These coverage

decisions are prospective, populationbased policies that apply to a clinical

subset or class of Medicare beneficiaries

and describe the clinical circumstances

and setting under which an item or

service is available (or not available).

We are setting out in this notice the

information and approaches we are

considering at this time for making

coverage decisions. We are interested in

receiving public comments on this

information and we will consider them

when we develop the subsequent

proposed rule.

This notice is narrower in scope than

the January 30, 1989 proposed rule

announcing the coverage criteria we

would have used (54 FR 4302). We have

already announced our process for

making an NCD in an April 27, 1999

general notice (64 FR 22619). Also,

rulemaking is not necessary for us to

establish or modify the procedures our

contractors will use to make LCDs. This

notice only deals with the criteria for

making national and local coverage

decisions under the reasonable and

necessary provisions of section

1862(a)(1) of the Act. This notice does

not, and we do not anticipate that the

proposed rule will, address individual

medical necessity determinations and

claims adjudication by our contractors

and other adjudicators. Finally, this

notice does not address Medicare

payment policies and we do not

anticipate that the proposed rule would

include changes to our current rules on

Medicare payment.

I. Background

A. Need for Timely and Expanded

Medicare Coverage of Items and

Services

Given the dynamic nature of the

health care system, it is important that

the Medicare program be responsive to

the rapid advances in health care.

Regulations describing our criteria for

coverage under the Medicare program

would facilitate timely and expanded

access for Medicare beneficiaries to

appropriate new technologies. Within

the scope of the statutory benefit

categories, these criteria would expand

access for Medicare beneficiaries by

covering the following:

1. A breakthrough technology without

consideration of cost.

2. A medically beneficial item or

service if no other medically beneficial

alternative is available.

3. A medically beneficial item or

service if it is a different clinical

modality compared to an existing

covered beneficial alternative, without

consideration of cost or magnitude of

benefit.

4. A medically beneficial item or

service, even if a less expensive

alternative, which is not a Medicare

benefit, exists.

We anticipate that these criteria

would also make the Medicare coverage

process, both national and local, more

transparent, timely, and predictable to

manufacturers or other requestors

seeking Medicare coverage of an item or

service.

B. Framework of the Medicare Program

From the beginning of the Medicare

program, one of the goals has been to

31126 Federal Register / Vol. 65, No. 95 / Tuesday, May 16, 2000 / Proposed Rules

provide a health insurance system that

would make ‘‘the best of modern

medicine’’ available to Medicare

beneficiaries. Over the last 35 years,

there have been significant advances in

medical science that have changed the

Medicare program and improved the

health of beneficiaries and others. Some

of these changes have been mandated by

the Congress in title XVIII of the Act,

which authorizes coverage of, and

payment for, items and services under

the Medicare program. Other changes

have occurred as a result of

administrative actions. We have adapted

the Medicare program to meet these

changes.

While the Congress has demonstrated

a strong interest in providing access to

necessary medical care for Medicare

beneficiaries, the Congress has been

equally concerned with ensuring that

the Medicare program operates on a

sound financial basis. The Congress has

established the specific scope of benefits

that are included in the program and

has defined many of the key terms in

section 1861 of the Act. In addition,

section 1862(a)(1)(A) of the Act requires

that ‘‘no payment’’ may be made under

Part A (hospital insurance) or Part B

(supplementary medical insurance) for

any expenses incurred for items or

services that ‘‘are not reasonable and

necessary for the diagnosis or treatment

of illness or injury or to improve the

functioning of a malformed body

member.’’ If we do not cover the

expenses incurred for a particular item

or service under this provision, either

the Medicare beneficiary or the health

care provider or supplier may be

financially liable for all of the incurred

costs.

The main purpose of our proposed

rule will be to explain how the term

‘‘reasonable and necessary’’ applies in

making coverage decisions. A Medicare

coverage decision, whether made

nationally or locally, is a prospective,

population-based, policy that applies to

a clinical subset or class of Medicare

beneficiaries and describes the clinical

circumstances and setting under which

an item or service is available (or is not

available).

We have the authority to determine

whether an item or service is reasonable

and necessary by several distinct

approaches. One approach is to make a

national coverage decision (NCD).

Under 42 CFR 405.732 and 405.860, an

NCD either grants, limits, or excludes

Medicare coverage for a specific medical

service, procedure, or device. An NCD

is binding on all carriers, fiscal

intermediaries, Peer Review

Organizations, and other contractors.

Under § 422.256(b), an NCD that

expands coverage is also binding on a

Medicare + Choice Organization.

Moreover, under §§ 405.732(b) and

405.860(b), an NCD made under section

1862(a)(1) of the Act is binding on an

administrative law judge (ALJ) (‘‘An ALJ

may not disregard, set aside, or

otherwise review an NCD.’’). While an

NCD is subject to judicial review, there

are limitations on judicial review. This

framework ensures that an NCD is

consistently applied throughout the

nation and enables a beneficiary to

make an informed decision about

whether to receive an item or service

based on the knowledge that an item or

service will be covered (or not covered)

by the program.

Due to regional, local, or institutional

differences in the practice of medicine,

it is not always prudent to issue a

prescriptive NCD. Sometimes there is

not sufficient information for us to

determine whether an item or service is

an effective treatment on a national

basis. In other circumstances, there are

legitimate regional differences in the

practice of medicine that would make a

preemptive national rule inappropriate.

In the absence of an NCD, a decision

concerning Medicare coverage for an

individual could be resolved on a caseby-case basis after a claim is submitted.

Our regulations separately provide

broad appeal rights for certain

individuals to administratively

challenge our decision to deny payment

for a claim before a neutral ALJ and, in

some cases, Federal court (42 CFR part

405, subparts G and H). This case-bycase approach ensures that a beneficiary

can present all relevant information

concerning a particular need for

payment for an item or service. This

review only applies to claims that have

been denied and is not a mechanism for

attaining prior authorization for a

specific item or service for an

individual.

In order to provide some guidance to

beneficiaries and health care providers

and suppliers regarding which items

and services will (or will not) be

covered in a particular area in the

absence of an NCD, our contractors may

make an LCD. An LCD would provide

guidance, in the absence of, or as an

adjunct to, an NCD by describing the

clinical circumstances and settings

under which an item or service is

available (or is not available) to a

beneficiary under section 1862(a)(1)(A)

of the Act. This notice seeks only to

define the criteria for how we would

make an NCD and our contractors

would make an LCD.

An LCD is not binding on a contractor

in another area of the country or on an

ALJ who decides cases at higher stages

of the appeal process. Still, an LCD

provides a service to the public by

giving some advance notice about an

item or service a contractor is likely to

cover or not cover. If a local contractor

makes an affirmative finding through a

published LCD that an item or service

is reasonable and necessary under the

statute, beneficiaries and providers

could reasonably expect that the service

is available to the beneficiaries in that

jurisdiction for the circumstances

described in the LCD.

C. Federal Register Publications

1. 1989 Proposed Rule

On January 30, 1989, we published a

proposed rule (54 FR 4302), that

identified four generally applicable

criteria that we would use to make

coverage decisions as to whether, and

under what circumstances, specific

health care technologies could be

considered reasonable and necessary

(and thus, covered under Medicare).

The four proposed criteria were: (1)

Safety and effectiveness, (2)

experimental or investigational, (3)

appropriateness, and (4) costeffectiveness. At the time, we explained

that each of the four criteria would not

necessarily apply in all instances

because of the complexity and variety of

issues involved in making coverage

decisions under Medicare. As explained

earlier, we withdrew this proposed rule.

2. 1999 General Notice

On April 27, 1999, we published a

general notice that announced the

process we use to make an NCD (64 FR

22619). This notice formally withdrew

the 1989 proposed rule. This procedural

notice has been well-received by

Medicare beneficiaries, the health care

industry, and others who wanted our

process to be open, responsive, and

understandable to the public.

II. Intentions of This Notice

We are issuing this notice to

announce our intention to publish a

proposed rule and solicit public

comments on the criteria we would use

to make an NCD and our contractors

would use to make an LCD under

section 1862(a)(1) of the Act. We are

setting out in this notice the information

and approaches we are considering at

this time. We are interested in receiving

public comments on this information

and we will consider them when we

develop the subsequent proposed rule.

Before we can make an NCD or LCD,

the item or service must fall within a

statutory Medicare benefit category and

not be otherwise statutorily excluded.

Moreover, if regulated by the Food and

Federal Register / Vol. 65, No. 95 / Tuesday, May 16, 2000 / Proposed Rules 31127

Drug Administration, the item or service

must be lawfully marketed.

We would apply an NCD or LCD

prospectively to all items and services

furnished under identical circumstances

within the respective jurisdiction after

the effective date of the NCD or LCD.

We anticipate the number of criteria we

would apply could be reduced and

simplified based on our experience. We

intend that the criteria would make the

Medicare coverage process more open,

responsive, and understandable to the

public. Finally, as mentioned above, we

anticipate that the criteria would result

in covering more items and services

under Medicare. The criteria could also

result in us beginning a new NCD to

withdraw coverage of a currently

covered item or service. In particular, if

a new item or service is equivalent in

benefit, is in the same clinical modality,

is thus substitutable for the existing

service, and is lower in costs, we would

consider withdrawing coverage for the

more expensive currently covered

alternative service.

A. Criteria for Medicare Coverage

Decisions

We anticipate applying two criteria

when we make an NCD or one of our

contractors makes an LCD. First, the

item or service must demonstrate

medical benefit, and, second, the item

or service must demonstrate added

value to the Medicare population. In

order to ensure that we and our

contractors consistently interpret and

apply these criteria, we would use the

following sequential steps:

Step 1—Medical Benefit: Is there

sufficient evidence that demonstrates

that the item or service is medically

beneficial for a defined population?

If no, the item or service is not

covered under Medicare.

If yes, proceed to Step 2.

Step 2—Added Value: For the defined

patient population, is there a medically

beneficial alternative item or service(s)

that is the same clinical modality and is

currently covered by Medicare?

• If no, the item or service is covered

under Medicare for the defined

population.

• If yes, proceed to Step 3.

Step 3—Added Value: Is the item or

service substantially more or

substantially less beneficial than the

Medicare-covered alternative?

• If the item or service is substantially

more beneficial (that is, a breakthrough),

it is covered under Medicare for the

defined population.

• If the item or service is substantially

less beneficial, it is not covered under

Medicare for the defined population.

• If the item or service is neither

substantially more nor substantially less

beneficial (that is, it is equivalent in

benefit), proceed to Step 4.

Step 4—Added Value: Will the item

or service result in equivalent or lower

total costs for the Medicare population

than the Medicare-covered alternative?

• If yes, the item or service is covered

under Medicare for the defined

population.

• If no, the item or service is not

covered under Medicare.

When we (or our contractors) compare

the medical benefit of two or more items

or services, we would ensure that the

comparisons involve both the same

patient population, the same clinical

circumstances, and the same clinical

modality. We believe that the sequential

steps would be administratively feasible

and would produce results that are

consistent with the statute. We invite

public comments on this approach and

suggestions as to feasible alternatives.

A requestor may use the coverage

reconsideration process to modify a

request that resulted in a denial of

coverage for an item or service. For

example, a requestor could seek a more

limited coverage decision targeting a

narrower population for which there is

no Medicare-covered alternative.

Alternatively, a requestor could submit

new evidence that demonstrates that the

item or service is substantially more

beneficial than the Medicare-covered

alternative.

B. Definitions, Discussion, and

Questions

1. Medical Benefit

We believe an item or service is

medically beneficial if it produces a

health outcome better than the natural

course of illness or disease with

customary medical management of

symptoms. We would require the

requestor to demonstrate that an item or

service is medically beneficial by

objective clinical scientific evidence.

Given the importance of Medicare

coverage decisions for our 39 million

current beneficiaries (as well as future

beneficiaries), we do not believe we

should cover an item or service without

adequate information that shows the

item or service improves the diagnosis

or treatment of an injury or illness, or

improves the functioning of a

malformed body member. It would be

unreasonable and unnecessary to pay

for expenses incurred for an item or

service that are not proven to be

effective for a defined population.

Although mortality and lifeexpectancy are quantifiable and, thus,

‘‘hard’’ health outcomes, we believe we

should move towards ‘‘quality of life’’ as

an acceptable health outcome. To help

us (and our contractors) make coverage

decisions, however, especially assessing

comparative benefits, an acceptable

health outcome should be quantifiable

along a standard scale or metric. We

seek suggestions on a standard metric

system for measuring quality of life

outcomes. Examples of nationally

recognized scales are: QALY—Quality

Adjusted Life Years, DALY—Disability

Adjusted Life Years, or self-described

health status as measured by the SF–36

(Short Form 36).

We believe a beneficiary’s preference,

compliance, and well-being are also

meaningful outcomes. Similarly, we

invite comments on the standardized

metric systems or methodologies we

should employ so that we can quantify

and compare medical benefits that

recognize these outcomes.

Another important consideration is

how we would measure the magnitude

of the improved health outcome. Also,

if the treatment includes risks of adverse

side-effects, how should we determine

that the benefits outweigh the risks?

2. Added Value

We believe that an item or service

adds value to the existing mix of

covered items or services if it

substantially improves health outcomes;

provides access to a medically

beneficial, different clinical modality; or

if it can ‘‘substitute’’ for an existing item

or service and lower costs for the

Medicare population. There are several

situations when a new item or service

would add value compared to the

current mix of services.

One situation is when a new item or

service that falls within a Medicare

benefit category would be medically

beneficial for a beneficiary with a given

clinical circumstance and there is no

Medicare-covered medically beneficial

alternative. We believe this item or

service would add value to the program

and we should cover it without

consideration of costs during the

coverage process.

Another situation is when a new item

or service would be medically beneficial

and it is a different clinical modality

than a Medicare-covered medically

beneficial alternative(s) (for example, a

covered medication versus surgery).

Giving Medicare beneficiaries and

providers access to competing items or

services of different clinical modalities

adds value to the program and we

believe we should also cover the items

or services without consideration of

costs during the coverage process. In

particular, this adds value to the

program because we recognize that there

31128 Federal Register / Vol. 65, No. 95 / Tuesday, May 16, 2000 / Proposed Rules

are legitimate differences between

beneficiaries, medical practices by

region, and delivery systems’

capabilities. We believe access to

different modalities for a similar

medical benefit is warranted.

In making Medicare coverage

decisions under these new criteria, we

would not compare an item or service

that falls within a statutory benefit

category to an item or service that is

outside the scope of the Medicare

program. We do not believe we should

compare the effectiveness of an item or

service that falls within a statutory

benefit category to the effectiveness of a

medically, beneficial alternative that is

not included in a Medicare benefit

category. Due to financial

circumstances, a beneficiary may not

have meaningful access to that

alternative. We believe that by only

comparing two items or services that are

included in a Medicare benefit category,

we increase beneficiary access and add

value to the program.

Value also would be added when the

magnitude of the benefit of an item or

service is substantially more than a

Medicare-covered alternative of similar

clinical modality. We refer to this item

or service as a ‘‘breakthrough’’. Even if

two services are of the same clinical

modality, we believe we should cover

the substantially superior service

without any consideration of cost

during the coverage process.

We believe value would also be added

when a new item or service is

equivalent in benefit, and is in the same

clinical modality (that is, substitutable)

for a Medicare-covered alternative, and

has equal or lower total costs for the

Medicare population. It is possible that

a beneficiary would not notice any

difference in health outcomes, when an

item or service is substituted for a

Medicare-covered alternative. We would

cover a substitutable item or service

only if the total costs are equal or lower

than the total costs of the Medicarecovered alternative. For clinically

substitutable services, it is not

reasonable or necessary to pay for

incurred costs that exceed the cost of a

Medicare-covered alternative that

produces the same health outcome.

Thus, only by assuring equal or lower

costs for the substitutable service could

we assure adding value to the program.

When a service (that is, it has equivalent

health outcomes and the same clinical

modality) is substantially more

expensive than a Medicare-covered

alternative would cost considerations

lead us to deny coverage for the service.

Since we anticipate limiting the

application of costs to a narrow

situation when two services have

equivalent health outcomes and are of

the same clinical modality, we need to

do only a simple cost-analysis.

We would like to receive input on the

proposed added value criteria before

developing a proposed rule. In

particular, we would like suggestions on

how broadly or narrowly we should

define ‘‘same clinical modality.’’ Clearly

surgery and prescription medications

are not the same. But is an open surgical

procedure the same clinical modality as

a closed invasive procedure? What if

they both require general anesthesia?

What if they do not? Perhaps another

way of defining ‘‘same clinical

modality’’ would be to simply use the

existing Medicare statutory benefit

categories.

We would like the public’s views on

the scope of a ‘‘Medicare-covered

alternative.’’ Recognizing that most

Medicare coverage decisions have been

made locally, and not nationally, we

would have to create a standard for

determining which services are

currently covered. One alternative for

the purposes of an NCD or an LCD is to

define ‘‘Medicare-covered alternative’’

when a threshold percentage of the

Medicare population nationally, or in

the contractor’s jurisdiction, has access

to an item or service. What threshold

percentage should we use for either

alternative? Are there other alternative

definitions?

Similarly, we encourage suggestions

on how to best define ‘‘substantially

more beneficial.’’ One way to define this

term is that the benefit is so large that

most clinicians would believe that the

item or service should be the new

standard of care and, thus, completely

replace the Medicare-covered

alternative. Another is that the benefit is

so large that the clinical experts in the

relevant clinical discipline believe that

the item or service should be the new

standard of care and, thus, we should

cover the new item or service and

withdraw coverage of the Medicarecovered alternative. A third way would

be to try to establish a quantifiable

statistical ‘‘effect-size’’ of the new item

or service compared with the Medicarecovered alternative.

We are soliciting input on the

definition of ‘‘equivalent benefit.’’ We

anticipate defining ‘‘equivalent benefit’’

as neither substantially more, nor

substantially less, beneficial than the

Medicare-covered alternative. This

leaves a range of medical benefit

between marginally less beneficial, to

equally beneficial, to marginally more

beneficial. Is there an alternative

definition of ‘‘equivalent benefit?’’ Is

there a common metric system that

could be used to measure the medical

benefit and capture other meaningful

health outcomes including beneficiary

preference, compliance, and well-being?

We are also specifically requesting

comments on the alternative of covering

a new item or service that is

‘‘substitutable’’ for a Medicare-covered

alternative. At a minimum, a

substitutable item or service would

seem to be one that is the same clinical

modality and produces an equivalent

health outcome. If the substitutable item

or service has greater total costs to the

Medicare program, should we deny

coverage for the item or service and

allow the requestor through the

reconsideration process to alter the

request to seek a positive coverage

decision? Should we simply cover the

new item or service but reduce the

Medicare payment rate for the incurred

expenses to the same rate as the

Medicare-covered alternative? This

principle has been called the ‘‘least

costly alternative’’ adjustment and has

been used for many years primarily for

coverage of durable medical equipment.

Coverage of new items and services

under new regulatory requirements may

lead to the reexamination of current

coverage policies. For example, if the

new item or service is ‘‘substitutable’’

for a Medicare-covered alternative and

has lower costs for the Medicare

program, should we deny coverage for

the Medicare-covered alternative or

lower the payment for the Medicarecovered alternative so that the total

costs for the Medicare program are, at a

minimum, equal?

We are interested in suggestions on

the type and extent of information that

parties seeking coverage decisions

should be required to provide in

relation to the associated costs or

savings to the program in addition to the

direct costs of the item or service.

We are soliciting comments on the

implications for private sector insurers

of the proposed approach.

3. Demonstration Through Scientific

Evidence

As previously mentioned, we would

measure both the medical benefit and

the added value criteria by clinical

scientific evidence. We are interested in

comments on the proper evidentiary

standard. Should there be one standard

for all services or should there be

different standards for different health

care sectors (for example, surgical

procedures, diagnostic tests, and

biologics)? Finally, recognizing that

clinical evidence and trials are

frequently imperfect, what is the best

way to deal with bias and external

validity when we consider applying the

findings of clinical trials to coverage

Federal Register / Vol. 65, No. 95 / Tuesday, May 16, 2000 / Proposed Rules 31129

decisions in the real world. More

specifically, under what circumstances

can clinical trial findings be generalized

from the study population to the

Medicare population? In addition,

under what circumstances can the

controlled delivery setting of the

clinical trial be generalized and

reproduced in the current health care

delivery setting or to a different health

care delivery setting?

Section 202 of the Unfunded

Mandates Reform Act of 1995 requires

that agencies assess anticipated costs

and benefits before issuing any rule that

may result in an expenditure in any year

by State, local, or tribal governments, in

the aggregate, or by the private sector, of

$100 million. The notice would not

have any unfunded mandates.

Executive Order 13132 establishes

certain requirements that an agency

must meet when it promulgates a notice

that imposes substantial direct

compliance costs on State and local

governments, preempts State law, or

otherwise has Federalism implications.

The notice would not impose

compliance costs on the governments

mentioned.

In accordance with the provisions of

Executive Order 12866, this notice was

reviewed by the Office of Management

and Budget.

Authority: Secs. 1102 and 1871 of the

Social Security Act (42 U.S.C. 1302 and

1395hh).

(Catalog of Federal Domestic Assistance

Program No. 93.773, Medicare—Hospital

Insurance; and Program No. 93.774,

Medicare—Supplementary Medical

Insurance Program)

Dated: April 5, 2000.

Nancy-Ann Min DeParle,

Administrator, Health Care Financing

Administration.

Approved: April 20, 2000.

Donna E. Shalala,

Secretary.

[FR Doc. 00–12237 Filed 5–11–00; 12:00 pm]

BILLING CODE 4120–01–P

FEDERAL EMERGENCY

MANAGEMENT AGENCY

44 CFR Part 206

RIN 3067–AD08

Disaster Assistance; Debris Removal

AGENCY: Federal Emergency

Management Agency (FEMA).

ACTION: Proposed rule.

SUMMARY: We (FEMA) propose to

change the scope of activities that are

determined to be in the public interest

following a declared disaster. We

propose to provide funding for the

removal of debris and wreckage when

communities convert property acquired

through a FEMA program for hazard

mitigation purposes to uses compatible

with open space, recreational, or

wetlands management practices.

DATES: We invite your comments and

will accept them until June 30, 2000.

ADDRESSES: Please send any comments

to the Rules Docket Clerk, Office of the

General Counsel, Federal Emergency

Management Agency, room 840, 500 C

Street, SW., Washington, DC 20472,

(facsimile) 202–646–4536, or (email)

rules@fema.gov.

FOR FURTHER INFORMATION CONTACT:

Melissa M. Howard, Federal Emergency

Management Agency, room 713, 500 C

Street SW., Washington, DC 20472,

(202) 646–4240, or (email)

melissa.howard@fema.gov.

SUPPLEMENTARY INFORMATION: We

consider that it is in the public interest

to remove substantially damaged

structures and related slabs, driveways,

fencing, garages, sheds, and similar

appurtenances from properties that are

part of a FEMA-funded hazard

mitigation buyout and relocation

project. When the principal structure

has been substantially damaged by a

major disaster, the removal of such

items will help mitigate the risk to life

and property by converting the property

to uses that are compatible with open

space, recreational and wetland

management practices. Federal

assistance used in this way supports the

effort to break the cycle of repetitive

damage and repair and is in the public

interest because it is less costly to

taxpayers than the cycle of repetitive

damage and repair. Mitigation through

buyout and relocation also substantially

reduces the risk of future infrastructure

damage and personal hardship, loss and

suffering.

National Environmental Policy Act

This rule is excluded from the

preparation of an environmental

assessment or environmental impact

statement under 44 CFR 10.8(d)(2)(ii),

where the rule is related to actions that

qualify for categorical exclusion under

44 CFR 10.8(d)(2)(vii).

Executive Order 12866, Regulatory

Planning and Review

This proposed rule would not

adversely affect the availability of

disaster assistance funding to small

entities, would not have significant

secondary or incidental effects on a

substantial number of small entities,

and would not create any additional

burden on small entities. It adds a

category of property eligible to receive

public assistance following a declared

disaster, and will thus benefit those

small entities that qualify for this

assistance.

As Director I certify that this proposed

rule is not a significant regulatory action

within the meaning of section 2(f) of

E.O. 12866 of September 30, 1993, 58

FR 51735, and that it attempts to adhere

to the regulatory principles set forth in

E.O. 12866. The Office of Management

and Budget has reviewed this rule under

E.O. 12866.

Paperwork Reduction Act

This proposed rule does not contain

a collection of information and therefore

is not subject to the provisions of the

Paperwork Reduction Act of 1995.

Executive Order 13132, Federalism

In publishing this proposed rule, we

considered the President’s Executive

Order 13132 on Federalism. This

proposed rule makes no changes in the

division of governmental

responsibilities between the Federal

government and the States, but adds a

category of property eligible to receive

public assistance following a declared

disaster. We have determined that

Executive Order 13132 does not apply

to this regulatory action, and we have

not prepared a Federalism assessment.

List of Subjects in 44 CFR Part 206

Disaster assistance.

Accordingly, we propose to amend 44

CFR part 206 as follows:

1. The authority citation for part 206

continues to read as follows:

Authority: The Robert T. Stafford Disaster

Relief and Emergency Assistance Act, 42

U.S.C. 5121 et seq.; Reorganization Plan No.

3 of 1978, 43 FR 41943, 3 CFR, 1978 Comp.,

p. 329; E.O. 12127, 44 FR 19367, 3 CFR, 1979

Comp., p. 376; E.O. 12148, 44 FR 43239, 3

CFR, 1979 Comp., p. 412; and E.O. 12673, 54

FR 12571, 3 CFR, 1989 Comp., p. 214.

PART 206—FEDERAL DISASTER

ASSISTANCE FOR DISASTERS

DECLARED ON OR AFTER

NOVEMBER 23, 1988

2. Amend § 206.224 by revising

paragraph (a)(3) and adding paragraph

(a)(4) to read as follows:

§ 206.224 Debris removal.

(a) * * *

(3) Ensure economic recovery of the

affected community to the benefit of the

community-at-large; or

(4) Mitigate the risk to life and

property by removing substantially

damaged structures and associated