[Federal Register Volume 65, Number 128 (Monday, July 3, 2000)]
[Rules and Regulations]
[Pages 41270-41280]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-16758]



[[Page 41269]]

-----------------------------------------------------------------------

Part V





Department of Health and Human Services





-----------------------------------------------------------------------



Office of Public Health and Science; Standards of Compliance for and 
Provision of Abortion-Related Services in Family Planning Services 
Projects; Final Rule and Notice

Federal Register / Vol. 65, No. 128 / Monday, July 3, 2000 / Rules 
and Regulations

[[Page 41270]]


-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

42 CFR Part 59

RIN: 0940-AA00


Standards of Compliance for Abortion-Related Services in Family 
Planning Services Projects

AGENCY: Office of Population Affairs, OPHS, DHHS.

ACTION: Final rules.

-----------------------------------------------------------------------

SUMMARY: The rules issued below revise the regulations that apply to 
grantees under the federal family planning program by readopting the 
regulations, with one revision, that applied to the program prior to 
February 2, 1988. Several technical changes to the regulation are also 
made to remove and/or update obsolete regulatory references. The effect 
of the revisions made by the rules below is to revoke the compliance 
standards, promulgated in 1988 and popularly known as the ``Gag Rule,'' 
that restricted family planning grantees from providing abortion-
related information in their grant-funded projects.

DATES: These rules are effective July 3, 2000.

FOR FURTHER INFORMATION CONTACT: Samuel S. Taylor, Office of Population 
Affairs, (301) 594-4001.

SUPPLEMENTARY INFORMATION: The Secretary of Health and Human Services 
issues below regulations establishing requirements for recipients of 
family planning services grants under section 1001 of the Public Health 
Service Act, 42 U.S.C. 300. The rules below adopt, with minor technical 
amendments and one substantive modification, the regulations proposed 
for public comment on February 5, 1993, at 58 FR 7464. They accordingly 
revoke the compliance standards, known as the ``Gag Rule,'' promulgated 
on February 2, 1988.
    By notice published elsewhere in this issue of the Federal 
Register, the Department is separately acting to reinstitute, with 
minor changes, the interpretations of the statute relating to the 
provision of abortion-related information and services that applied to 
grantees prior to the issuance of the Gag Rule. The Secretary had 
previously proposed reinstituting these interpretations in the notice 
of February 5, 1993 and requested public comment on this proposed 
action; the public comment period was subsequently reopened by notice 
of June 23, 1993, 58 FR 34024.

I. Background

    In 1988, the Secretary of Health and Human Services issued rules, 
widely known as the ``Gag Rule,'' which substantially revised the 
longstanding polices and interpretations defining what abortion-related 
activities were permissible under Title X's statutory limitation on 
abortion services. That statutory limitation, section 1008 (42 U.S.C. 
300a-6), provides that ``[n]one of the funds appropriated under this 
title shall be used in programs where abortion is a method of family 
planning.'' The rules issued on February 2, 1988 (53 FR 2922) set out 
detailed requirements that (1) Prohibited the provision to Title X 
clients of nondirective counseling on all pregnancy options and 
referral to abortion providers, (2) required physical and financial 
separation of abortion-related activities from Title X project 
activities, and (3) prohibited Title X projects from engaging in 
activities that encourage, promote, or advocate abortion. These 
requirements are presently codified principally at 42 CFR 59.7-59.10.
    The February 2, 1988 ``Gag Rule'' was extremely controversial: The 
proposed rules generated approximately 75,000 public comments, many of 
which were negative. 53 FR 2922. The rules were subsequently challenged 
in several district courts by a variety of providers, provider 
organizations, and others. Although the requirements embodied in the 
Gag Rule were upheld by the Supreme Court in 1991 as a permissible 
construction of section 1008, the rules continued to be a source of 
controversy, with the provider and medical communities litigating after 
1991 to prevent enforcement of the rules. Following his inauguration in 
1993, President Clinton ordered the Secretary to suspend the rules and 
initiate a new rulemaking:

    The Gag Rule endangers women's lives and health by preventing 
them from receiving complete and accurate medical information and 
interferes with the doctor-patient relationship by prohibiting 
information that medical professionals are otherwise ethically and 
legally required to provide to their patients. Furthermore, the Gag 
Rule contravenes the clear intent of a majority of the members of 
both the United States Senate and House of Representatives, which 
twice passed legislation to block the Gag Rule's enforcement but 
failed to override Presidential vetoes.
    For these reasons, you have informed me that you will suspend 
the Gag Rule pending the promulgation of new regulations in 
accordance with the ``notice and comment'' procedures of the 
Administrative Procedure Act. I hereby direct you to take that 
action as soon as possible. I further direct that, within 30 days, 
you publish in the Federal Register new proposed regulations for 
public comment.

Presidential Memorandum of January 22, 1993, published at 58 FR 7455 
(February 5, 1993). The Secretary subsequently suspended the 1988 rules 
on February 5, 1993 (58 FR 7462) and issued proposed rules for public 
comment (58 FR 7464).
    The notice of proposed rulemaking proposed to revise the program 
regulations by readopting the program regulations as they existed prior 
to the adoption of the Gag Rule, which would have the effect of 
revoking the Gag Rule. It also proposed that the policies and 
interpretations in effect prior to the issuance of the Gag Rule be 
reinstated, both in substance and in form. As noted in the proposed 
rules, these policies and interpretations, which had been in effect for 
a considerable time prior to 1988, were set out largely, ``in the 1981 
Family Planning Guidelines and in individual policy interpretations.'' 
58 FR 7464. The pre-1988 interpretations had been developed during the 
1970's and early 1980's in response to questions arising out of the 
Department's initial interpretation that section 1008 not only 
prohibited Title X projects from performing or providing abortions, but 
also prohibited actions by Title X projects that ``promoted or 
encouraged'' abortion as a method of family planning. Over time, 
questions were raised, and answered in a series of legal opinions, as 
to whether particular actions would violate the statute by promoting or 
encouraging abortion as a method of family planning. As summarized in 
the proposed rules, the answers that were developed were generally as 
follows:

    Title X projects [are] required, in the event of an unplanned 
pregnancy and where the patient requests such action, to provide 
nondirective counseling to the patient on all options relating to 
her pregnancy, including abortion, and to refer her for abortion, if 
that is the option she selects. However, consistent with the long-
standing Departmental interpretation of the statute, Title X 
projects [are] not * * * permitted to promote or encourage abortion 
as a method of family planning, such as by engaging in pro-choice 
litigation or lobbying activities. Title X projects [are] also * * * 
required to maintain a separation (that is more than a mere exercise 
in bookkeeping) of their project activities from any activities that 
promote or encourage abortion as a method of family planning.

Id. By notice dated June 23, 1993 (58 FR 34024), the Secretary made 
available for public comment a detailed exposition of the prior 
policies and interpretations.
    In the public comment periods, the Secretary received 146 comments,

[[Page 41271]]

virtually all of which concerned the proposed policies and 
interpretations rather than the proposed regulations themselves. 
Approximately one-third of these opposed the proposed policies and 
interpretations on various grounds; most of these comments were from 
individuals who, in general, were opposed to any change to the Gag 
Rule. The remainder of the public comments, most of which were from 
providers and other health organizations, generally supported the 
reinstatement of the prior policies and interpretations, although a 
number of these comments suggested that they be modified in various 
respects. The public comments and the Secretary's response thereto are 
summarized below.

II. Public Comment and Departmental Response

    The public comment generally focused on a few issues raised by the 
rulemaking. As noted above, these comments generally pertained to the 
proposed policies and interpretations rather than to the proposed 
regulatory language itself. Accordingly, the comments on the issues 
raised in the rulemaking are summarized below, and the Secretary's 
response thereto is provided.

A. Lack of a Rational Basis To Revoke the Gag Rule; Necessity for 
Continuation of the Gag Rule

    Most of the comments in opposition to the proposed rules came from 
individuals, and most objected to the proposed revocation of the Gag 
Rule on the ground that abortion is wrong or that tax dollars should 
not be used to provide abortion services of any kind. Several comments 
also objected that the Secretary had not rational basis for revoking 
the Gag Rule, as it had never gone into operation. For example, a 
comment signed by fifteen members of Congress argued that--

    HHS intends to discard the February 2, 1988 regulations in their 
entirety * * * regardless of whether any particular portion was the 
subject of court challenge or legislative action. * * * We believe 
the rejection of the 1988 rule is precipitous and that each portion 
of the 1988 regulations must be reviewed on its merits and 
justification provided in any final regulations as to why the 1988 
clarifications were or were not maintained in a new rule.

    With respect to the comments objecting to the revocation of the Gag 
Rule or the use of tax dollars for abortion on moral grounds, the 
Secretary notes that, under the interpretations adopted in conjunction 
with the regulations below, the funding of abortion or activities that 
promote or encourage abortion with Title X funds has been and will 
continue to be prohibited. Rather, what changes under the 
interpretations reinstated in conjunction with the regulations below is 
which activities are considered to ``promote or encourage'' abortion. 
In contrast to the position taken under the Gag Rule, under the present 
view (which was also the Department's view of the statute prior to 
1988), the provision of neutral and factual information about abortion 
is not considered to promote or encourage abortion as a method of 
family planning. Indeed, the rule itself, now requires the provision to 
pregnant women, on request, of neutral, factual information and non-
directive counseling on each of three options. The basic statutory 
interpretation underlying both the Gag Rule and the specific policies 
that governed the Title X program prior to 1988--that section 1008 
prohibits activities that promote or encourage abortion as a method of 
family planning--remains unchanged.
    With respect to the contentions that the Secretary lacks a rational 
basis for revoking the Gag Rule and that she must justify each separate 
part of the Gag Rule being discarded, we do not agree. The pre-1988 
interpretation of the statute represents a permissible exercise of 
administrative discretion. The crucial difference between this approach 
and the Gag Rule is one of experience. Because of ongoing litigation, 
the Gag Rule was never implemented on a nationwide basis, so that its 
proponents can point to no evidence that it can and will work 
operationally on a national basis in the Title X program. The policies 
reflected in, and interpretations reinstituted in conjunction with, the 
regulations below, on the other hand, have been used by the program for 
virtually its entire history; indeed, they have been in effect during 
the pendency of this rulemaking. Both the program managers and the 
Title X grantee community are well-versed in these policies and 
interpretations, and the grantees have in the past generally been able 
to operate in compliance with them. Further, as evidenced by the public 
comment received, the reinstituted policies and interpretations are 
generally acceptable to the grantee community, in contrast to the 
compliance standards in the Gag Rule, which were generally unacceptable 
to the grantee community. This factor likewise favors their adoption, 
as it suggests a far greater likelihood of voluntary compliance by 
grantees. Finally, the suggestion that the Gag Rule provisions should 
be accepted or rejected separately is rejected as unsound. The 
provisions of the Gag Rule were an interrelated set of requirements 
that depended on several underlying assumptions about how the Title X 
program should work; moreover, they depended in part on several 
definitions that applied to all the major provisions of the Gag Rule. 
See, in this regard, 53 FR 2923, 2925; see also, the discussion of 
definitions at 53 FR 2926-2927.

B. Failure To Comply With the Administrative Procedure Act; Vagueness 
of Standards

    A number of comments, from both proponents of and opponents to the 
proposed rules, objected to the failure to publish the actual policies 
and interpretations as part of the proposed rule on the ground that 
this violated the public comment requirements of the Administrative 
Procedure Act (APA); several comments argued that it was impossible to 
comment on policies that had never been published. A related criticism 
was that several of the interpretations described in the preamble to 
the notice of proposed rulemaking, particularly the interpretation 
relating to physical separation, were too vague.
    The Secretary agreed that the provision of further information on 
the specific details of the pre-1988 policies and interpretations would 
promote more helpful public comment. Accordingly, by notice dated June 
23, 1993 (58 FR 34024), the Department made available on request a 
summary of the policies and interpretations in existence prior to 1988. 
The June notice also extended the public comment period for 45 days, to 
permit further substantive comment on the prior policies and 
interpretations. Over a third of the public comments, including the 
majority of the comments from individuals, were received during the re-
opened and comment period. The Secretary has thus addressed the concern 
about notice of the content of the policies and interpretations 
expressed by these comments.
    As is further discussed below, the Secretary has incorporated in 
the regulatory text the policies relating to nondirective counseling 
and referral of the 1981 Program Guidelines for Project Grants for 
Family Planning Services (1981 Guidelines). The comments urging that 
these Guidelines requirements be reflected in the regulations have thus 
been accepted. With respect to the longstanding program 
interpretations, however, the Secretary does not agree that the 
Department is required to set out those

[[Page 41272]]

interpretations in the regulations promulgated below and accordingly, 
has not accepted the comments suggesting that it do so. As noted above, 
the interpretations themselves were developed in the classic way in 
which statutory interpretations are done: That is, they have generally 
been developed in legal opinions written to answer questions about how 
the statutory prohibition, as initially interpreted by the Department, 
applied to particular situations. This is not an unusual approach 
within the program as a whole: Interpretive guidance has been provided 
on a number of issues (e.g., fee schedules, use of certain methods) 
over the years, as particular questions have arisen in the course of 
the program. While the program could incorporate those interpretations 
in the legislative rules below, the Secretary has decided not to do so. 
With respect to the areas that continue to be covered by guidance, the 
Secretary believes that incorporating the guidance into the regulations 
below would be inadvisable and unnecessary. The Secretary has thus 
chosen to preserve the program's flexibility to address new issues that 
may arise in this area.
    Moreover, the Title X program grantees have operated on the basis 
of the policies of the 1981 Guidelines and the interpretations 
summarized in the notice published elsewhere in this issue of the 
Federal Register for virtually the entire history of the program and in 
general compliance with them. As the comment of one State agency 
grantee stated with regard to this issue:

    The [State] Family Planning Program has been a participant in 
the nation's Title X program since the early 1970's. The rules and 
1981 Family Planning Guidelines in place prior to the ``Gag Rule'' 
were adequate guidance to the state for program operation and for 
compliance with the statutory prohibition related to abortions. 
These guidelines and directives have been used successfully for many 
years in providing quality medical care, education and counseling to 
clients in the program.

The audits of 14 Title X grantees conducted by the GAO and of 31 Title 
X grantees conducted by the Department's Office of the Inspector 
General in the 1980's showed only minor compliance problems. Indeed, 
the principal recommendation of both audit reports was that the 
Department provide more specific guidance to its grantees than that 
previously available in the program guidelines and prior legal 
opinions, not that the Department undertake major disallowances, 
require major corrective actions, or develop new interpretations of the 
law such as that embodied in the Gag Rule. See, e.g., Comp. Gen. Rep. 
No GAO/HARD-HRD-82-106 (1982), at 14-15. The Secretary is addressing 
this recommendation through the specific guidance in the notice 
published elsewhere in this edition of the Federal Register and believe 
that the notice will provide grantees with sufficient guidance to 
reduce or eliminate potential variations in grantee practice.
    The Secretary views this final rule, the principal purposes of 
which are to revoke the Gag Rule and adopt the counseling and referral 
requirements noted, as separate and severable from the Notice. The 
interpretations set out in the Notice are being set out in order to 
clarify the Department's view of the statute and its operation in 
practical terms, and because so much of the public comment received was 
directed at the interpretations reflected in the Notice rather than at 
the revision of the regulation itself. Were the policies set forth in 
the Notice to be challenged or invalidated, it is our view that the 
Title X program could still be administered under the rules below in 
compliance with the statute, in that grantees would be prohibited by 
Sec. 59.5(a)(5) below from providing abortions as part of the Title X 
family project and from engaging in counseling and referral practices 
inconsistent with the regulatory requirements adopted in that section. 
Such an outcome would be consistent with a permissible interpretation 
of the statute.

C. Amend, or Adopt a More Restrictive Reading of, the Statute

    Fifteen of the comments that stated support for the proposed 
policies and interpretations suggested, however, that the prior 
limitations in the policies and interpretations with respect to what 
abortion-related activities a Title X project could engage in be 
eliminated. A few of these comments suggested that the statutory 
prohibition of section 1008 be repealed outright. Most of the comments 
suggested in essence that the statute be read strictly to prohibit only 
the use of funds for abortions, thereby permitting Title X projects to 
engage in a number of abortion-related activities that would not be 
permitted under the pre-1988 interpretations.
    With respect to the suggestion that section 1008 be repealed, such 
an action is obviously outside the scope of what can be accomplished 
through rulemaking and thus cannot be accepted in this context. With 
respect to the remaining comments, while the Secretary agrees that the 
statute could on its face be read only to proscribe the use of Title X 
funds for the provisions of abortion, this is not considered to be the 
better reading of the statutory language. Rather, the legislative 
history of section 1008 indicates that that section was intended to 
restrict the permissible scope of abortion-related services provided 
under Title X. Conf. Rep. No. 1667, 97th Cong., 2d Sess. 8-9 (1970). 
The floor statements by the section's principal sponsor, Rep. Dingell, 
indicated that the section's restrictions on the ``use'' of Title X 
funds should be read as having a broader scope that is urged by these 
comments:

    Mr. Speaker, I support the legislation before this body. I set 
forth in my extended remarks the reasons why I offered to the 
amendment which prohibited abortion as a method of family planning * 
* *. With the ``prohibition of abortion'' the committee members 
clearly intended that abortion is not to be encouraged or promoted 
in any way through this legislation. Programs which include abortion 
as a method of family planning are not eligible for funds allocated 
through this Act.

116 Cong. Rec. 37375 (1970). The Department has consistently, since 
1972, read section 1008 as incorporating this legislation on activities 
that ``promote or encourage'' abortion as a method of family planning. 
This interpretation is well-known to Congress, which has not, to date 
amended section 1008. Thus, there is legal support for this 
longstanding interpretation of the statute. Moreover, there is nothing 
in the rulemaking record that suggests that this fundamental reading of 
the statute, as it was administered before the Gag Rule, presented 
major operational problems for Title X projects. Accordingly, the 
Secretary has not accepted the suggestions made by this group of 
comments that section 1008 be read only to prohibit the provision of, 
or payment for, abortions.

D. Abortion Information and Counseling

    The Gag Rule prohibited the provision of information other than 
information directed at protecting maternal and fetal health to women 
determined to be pregnant; thus, it prohibited what is generally known 
as ``options counseling'', i.e., the provision to pregnant women in a 
nondirective fashion of neutral, factual information about all options 
for the management of a pregnancy, including abortion. See, 42 CFR 59.8 
(1989 ed.). The pre-1988 policies, in contrast, required options 
counseling, if requested. As stated in the 1981 ``Title X Guidelines'':

    Pregnant women should be offered information and counseling 
regarding their pregnancies. Those requesting information on options 
for the management of an

[[Page 41273]]

unintended pregnancy are to be given non-directive counseling on the 
following alternative courses of action, and referral upon requests:
    <bullet> Prenatal care and delivery
    <bullet> Infant care, foster care, or adoption
    <bullet> Pregnancy termination.

The June, 1993 summary of the pre-1988 interpretations also stated that 
Title X projects were not permitted to provide options counseling that 
promoted abortion or encouraged patients to obtain abortion, but could 
advise patients of all medical options and accompanying risks.
    Most of those comments supporting adoption of the proposed rules 
appeared to agree with the pre-1988 policies and interpretations. 
However, there appeared to be some confusion among those who agreed 
with the pre-1988 requirement for options counseling as to how much 
information and counseling could be provided. Several of these comments 
also suggested that the ``on request'' limitation be deleted, 
particularly where State law requires the provision of information 
about abortion to women considering that option.
    Several comments opposing adoption of the proposed rules and 
revocation of the Gag Rule also specifically addressed the issue of 
counseling. Several of these comments suggested that counseling on 
``all options'' include the option of keeping the baby, and two 
comments suggested that the rules should contain an exception for 
grantees or individuals who object to providing such information and 
counseling on moral grounds.
    A number of comments argued that the regulatory text should reflect 
the requirement for nondirective counseling and referral. These 
comments recommended that the final regulations include specific 
language providing for options counseling as a necessary component of 
quality reproductive health care services. Some cited medical ethics 
and good medical care as requiring that patients receive full and 
complete information to enable them to make informed decisions. For 
example, a leading medical organization commented that all women, 
regardless of their income level, have a right to full and accurate 
information about all options for managing an unwanted pregnancy. The 
organization pointed out that it is essential that the program 
regulations contain specific language about the counseling and referral 
requirements, and recommended the incorporation of sections of the 1981 
Title X program guidelines into the regulations so as to be absolutely 
clear that pregnancy counseling and referral must be provided to 
patients facing an unwanted pregnancy upon request. Congress has also 
repeatedly indicated that it considers this requirement to be an 
important one: the program's four most recent appropriations, Pub. L. 
104-208 (110 Stat. 300-243), Pub. L. 105-78 (111 Stat. 1478), Pub. L. 
105-277 (112 Stat. 2681), and Pub. L. 106-113 (113 Stat. 1501-225), 
required that pregnancy counseling in the Title X program be 
``nondirective.'' Consequently, the Secretary has decided to reflect 
this fundamental program policy in the regulatory text. See, 
Sec. 59.5(a)(5) below. The interpretive summary has also been revised 
to reflect this change to the regulation. However, in response to the 
apparent confusion as to the amount of counseling permitted to be 
provided under the pre-1988 interpretations, the interpretive summary 
clarifies that Title X grantees are not restricted as to the 
completeness of the factual information they may provide relating to 
all options, including the option of pregnancy termination. It should 
be noted, though, that the previous restriction as to the ``type'' of 
information that may be provided about abortion continues: Information 
and counseling provided by Title X projects on all options for 
pregnancy management, including pregnancy termination, must be 
nondirective. Thus, grantees may provide as much factual, neutral 
information about any option, including abortion, as they consider 
warranted by the circumstances, but may not steer or direct clients 
toward selecting any option, including abortion, in providing options 
counseling.
    The Secretary is retaining the ``on request'' policy in the 
regulatory language adopted below, on the ground that it properly 
implements the requirement for nondirective counseling. If projects 
were to counsel on an option even where a client indicated that she did 
not want to consider that option, there would be a real question as to 
whether the counseling was truly nondirective or whether the client was 
being steered to choose a particular option. We note that under the 
``on request'' policy a Title X grantee is not prohibited from offering 
to a pregnant client information and counseling on all options for 
pregnancy management, including pregnancy termination; indeed, such an 
offer is required under Sec. 59.5(a)(5) below. However, if the client 
indicates that she does not want information and counseling on any 
particular option, that decision must be respected. The regulatory 
language below reflects this policy. Also, consistent with longstanding 
program practice and sound public health policy (see the discussion in 
the following paragraphs) and to avoid ambiguity in when the offer of 
pregnancy options counseling must be made, the rule has been clarified 
to require the offer of pregnancy options counseling to be made 
whenever a pregnant client presents, not just when the pregnancy is 
``unintended.''
    With respect to the suggestion that counseling on ``keeping the 
baby'' be provided, the Secretary views that suggestion as co-extensive 
with the requirement for the provision of counseling on prenatal care 
and delivery, as the remaining counseling option set out in the 1981 
``Title X Guidelines'' and the regulatory language adopted below 
relates to foster care and adoption. If a more directive form of 
counseling is meant by this suggestion, it is rejected as inconsistent 
with the underlying interpretation, recently reinforced by Congress, 
that counseling on pregnancy options should be nondirective.
    Finally, the Secretary rejects the suggestion that an exception to 
the requirement for options counseling be carved out for those 
organizations that object to providing such counseling on religious or 
moral grounds. First, totally omitting information on a legal option or 
removing an option from the client's consideration necessarily steers 
her toward the options presented and is a directive form of counseling. 
Second, the Secretary is unaware of any current grantees that object to 
the requirement for nondirective options counseling, so this suggestion 
appears to be based on more of a hypothetical than an actual concern. 
Third, the requirement for nondirective options counseling has existed 
in the Title X program for many years, and, with the exception of the 
period 1988-1992, it has always been considered to be a necessary and 
basic health service of Title X projects. Indeed, pregnancy testing is 
a common and frequent reason for women coming to visit a Title X 
clinic: in 1995, an estimated 1.1 million women obtained pregnancy 
tests in Title X clinics. (National Survey of Family Growth, 1995 
cycle, special table.) Clearly, a significant number of Title X clients 
have a need for information and counseling relating to pregnancy. 
Fourth, this policy is also consistent with the prevailing medical 
standards recommended by national medical groups such as the American 
College of Obstetricians and Gynecologists and the American Medical 
Association. ``Guidelines for Women's Health Care,'' American College 
of Obstetricians and

[[Page 41274]]

Gynecologists, 1996 ed., at 65; ``Pregnancy Choices: Raising the Baby, 
Adoption, and Abortion,'' American College of Obstetricians and 
Gynecologists, September, 1993, reviewed December, 1995; ``Code of 
Medical Ethics: Current Opinions with Annotations,'' American Medical 
Association, 199-1997 ed. Accordingly, the Secretary has not accepted 
this suggestion.
    The corollary suggestion, that the requirement to provide options 
counseling should not apply to employees of a grantee who object to 
providing such counseling on moral or religious grounds, is likewise 
rejected. In addition to the foregoing considerations, such a 
requirement is not necessary: under 42 U.S.C. 300a-7(d), grantees may 
not require individual employees who have such objections to provide 
such counseling. However, in such cases the grantees must make other 
arrangements to ensure that the service is available to Title X clients 
who desire it.

E. Referral for abortion

    The Gag Rule specifically prohibited referral for abortion as a 
method of family planning and required grantees to give women 
determined to be pregnant a list of providers of prenatal care, which 
list could not include providers ``whose principal business is the 
provision of abortion.'' 42 CFR 59.8(a) (1989 ed.). The Gag Rule 
permitted referral to an abortion provider only where there was a 
medical emergency. 42 CFR 59.8(a)(2) (1989 ed.). By contrast, the 1981 
Guidelines required appropriate referral on request, while the pre-1988 
interpretations permitted Title X projects to make what was known as a 
``mere referral'' for abortion; a ``mere referral'' was considered to 
be the provision to the client of the name and address and/or telephone 
number of an abortion provider. Affirmative actions, such as obtaining 
a consent for the abortion, arranging for transportation, negotiating a 
reduction in the fee for an abortion or arranging for or scheduling the 
procedure, were considered to be prohibited by section 1008. The pre-
1988 rules (Sec. 59.5(b)(1)) were interpreted by the agency to require 
referral for abortion where medically indicated. See, Valley Family 
Planning v. State of North Dakota, 489 F.Supp. 238 (D.N.D. 1980), 
aff'd., 661 F.2d 99 (8th Cir. 1981).
    A number of comments, mostly from individuals and organizations 
supporting revocation of the Gag Rule, suggested modifications of the 
proposed referral policies and interpretations. Most of these comments 
suggested that the content limitations on referrals be broadened, with 
Title X grantees being permitted to provide other relevant information, 
such as comparative charges, stage of pregnancy up to which referral 
providers may under State law or will provide abortion, the number of 
weeks of estimated gestation, etc. These comments argued that the 
provision of such factual information does not ``promote or encourage'' 
abortion any more than does the provision of the abortion providers' 
names and addresses and/or telephone numbers. One comment also 
suggested that the restriction on negotiating fees for clients referred 
for abortion conflicts with the requirement to refer for abortion where 
medically indicated.
    Several comments opposing revocation of the Gag Rule also expressed 
problems with the proposed referral policies and interpretations. A few 
comments urged that referrals to agencies that can assist clients who 
choose the ``keeping the baby'' or adoption options should be required. 
Another comment criticized the requirement for referral where 
``medically indicated'' as confusing. Revisions suggested were that 
``self-referrals'' for abortion be specifically prohibited, to reduce 
commercialization and profiteering by Title X grantees who are also 
abortion providers and that grantees who objected to abortion on moral 
or religious grounds be permitted not to make abortion referrals.
    The Secretary agrees with the comments advocating expanding the 
content of what information may be provided in the course of an 
abortion referral. The content (as opposed to action) restrictions of 
the ``mere referral'' policy proceeded from an assumption that the 
provision of information other than the name and address and/or 
telephone number of an abortion provider might encourage or promote 
abortion as a method of family planning. The Secretary now agrees, 
based on experience and the comments of several providers on this 
point, that the provision of the types of additional neutral, factual 
information about particular providers described above is likely to do 
little, if anything, to encourage or promote the selection of abortion 
as a method of family planning over and above the provision of the 
information previously considered permissible; at most, such 
information would seem likely to assist clients in making a rational 
selection among abortion providers, if abortion is being considered. 
Moreover, it does not seem rational to restrict the provision of 
factual information in the referral context, when no similar 
restriction applies in the counseling context. Accordingly, the 
Secretary has revised the interpretations summarized in the notice 
section to clarify that grantees are not restricted from providing 
neutral, factual information about abortion providers in the course of 
providing an abortion referral, when one is requested by a pregnant 
Title X client.
    Consistent with the incorporation of the requirement for 
nondirective counseling in the regulations, the regulations below also 
include the remaining requirement from the 1981 Guidelines, the 
requirement to provide a referral, if requested by the client. As 
referenced previously, a number of comments argued that the regulatory 
text should reflect the requirement for nondirective counseling and 
referral. One comment described the provision of factual information 
and referral as requested as both a necessary and significant component 
of the Title X program for many years. Another comment pointed out that 
the program guideline requirements regarding pregnancy options 
counseling and referral have been used for many years, are well 
understood and accepted in the Title X provider community, and should 
be required services in Title X family planning clinics. Since the 
services about which pregnancy options counseling is provided are not 
ones which a Title X project typically provides, the provision of a 
referral is the logical and appropriate outcome of the counseling 
process.
    The Secretary is not accepting the remainder of the comments on 
this issue, as they either proceed from a misunderstanding of, or do 
not raise valid objections to, the regulations and the proposed 
policies and interpretations. The comment arguing that the restriction 
on negotiating fees conflicts with the requirement to refer for 
abortion where medically indicated is based on a misunderstanding of 
that requirement: in such circumstances, the referral is not for 
abortion ``as a method of family planning'' (i.e., to determine the 
number and/or space of one's children) but is rather for the treatment 
of a medical condition; thus, the statutory prohibition does not apply, 
so there is no restriction on negotiating fees and similar actions. The 
suggestion that referrals to agencies that can assist clients who 
choose the options of ``keeping the baby'' or adoption be required is 
likewise rejected as unnecessary. Under the regulatory language adopted 
below, the options of prenatal care and delivery and adoption are 
options that are required to be part of the options counseling process, 
so an

[[Page 41275]]

appropriate referral for one or the other option would be required, if 
the client chose one of those options and requested a referral. 
However, requiring a referral for prenatal care and delivery or 
adoption where the client rejected those options would seem coercive 
and inconsistent with the concerns underlying the ``nondirective'' 
counseling requirement. The Secretary also rejects the criticism that 
the provision requiring referral for abortion where medically indicated 
is undefined and confusing. The meaning of the regulatory requirement 
for referrals where medically indicated (which applies to all medical 
services not provided by the project, not just abortion services) has 
not in the past been a source of confusion for providers, and the 
Secretary believes that Title X medical personnel are able to make the 
medical judgments this requirement calls for.
    The Secretary likewise rejects the suggestion that ``self-
referrals'' for abortion be banned. Very few current Title X providers 
are also abortion providers: it is estimated that, over the past 
decade, the percentage of Title X providers located with or near 
abortion providers has been at or below five percent, with 
approximately half of these providers consisting of hospitals. Thus, 
the issue this comment raises is irrelevant to the vast majority of 
Title X grantees and the program as a whole. Moreover, with respect to 
those few grantees that are also abortion providers, some may be the 
only or one of only a few abortion providers in their service area, 
making ``self-referrals'' a necessity in such situations. The 
Department has no evidence that commercialization and profiteering are 
occurring in these circumstances; absent such evidence, the Secretary 
sees no reason to limit or cut off a legal service option for those 
Title X clients who freely select it. However, the Department will 
continue to monitor the issue of self-referrals in the Title X program, 
to forestall the type of problem suggested by these commenters.
    Finally, the Secretary rejects the suggestion that the referral 
requirement not apply to providers that object to it on moral or 
religious grounds for the same reasons it objected to the same 
suggestion with respect to counseling.

F. Physical and Financial Separation

    The Gag Rule required Title X projects to be organized so as to 
have a physical and financial separation from prohibited abortion 
activities, determined by whether there was ``objective integrity and 
independence [of the Title X project] from prohibited activities.'' 42 
CFR 59.9 (1989 ed.). This determination was to be based on a case-by-
case review of facts and circumstances. Factors relevant to this 
determination included, but were not limited to, the existence of 
separate accounting records, the degree of separation from facilities 
(such as treatment, consultation, examination, and waiting room) in 
which prohibited activities occurred and the extent of such prohibited 
activities, the existence of separate personnel, and the extent of the 
presence of evidence of identification of the Title X project and the 
absence of identification of material promoting abortion. Id.
    The pre-1988 interpretations required Title X grantees to maintain 
physical and financial separation between the Title X project and any 
abortion-related activities they conducted, in that a Title X grantee 
was required to ensure that the Title X-supported project was separate 
and distinguishable from those activities. This requirement was held to 
go beyond a requirement for the technical allocation of funds between 
Title X project activities and impermissible abortion activities. 
However, it was considered permissible for a hospital grantee to 
provide abortions, as long as ``sufficient separation'' was maintained, 
and common waiting rooms were also permissible, as long as no 
impermissible materials were present. Common staff and unitary filing 
systems were also permissible, so long as costs were properly allocated 
and, with respect to staff members, their abortion-relation activities 
were performed in a program that was itself separate from the Title X 
project. The test, as articulated in the summary made available for 
comment by the June 23, 1993 notice, was ``whether the abortion element 
in a program of family planning services bulks so large and is so 
intimately related to all aspects of the program as to make it 
difficult or impossible to separate the eligible and non-eligible items 
of cost.''
    These interpretations received by far the most specific and 
extensive public comment. The vast majority of this public comment was 
from providers and provider organizations and was negative. Although it 
was generally agreed that the financial separation of Title X project 
activities from abortion-related activities was required by statute 
and, in the words of one comment, ``absolutely necessary,'' many of 
these comments objected that requiring additional types of separation 
would be unnecessary, costly, and medically unwise. The argument was 
made that the requirement for physical separation is unnecessary, as it 
is not required by the statute which, on its face, requires financial 
separation only. Further, it was argued that since Title X grantees are 
subject to rigorous financial audits, it can be determined whether 
program funds have been spent on permissible family planning services, 
without additional requirements being necessary. With respect to the 
issue of cost, it was generally objected that requiring separation of 
staff and facilities would be inefficient and cost ineffective. For 
example, one comment argued that--

    The wastefulness and inefficiency of the separation requirements 
is * * * illustrated by the policy which allows common waiting 
rooms, but disallows ``impermissible materials'' in them. This puts 
grantees in the position of having to continuously monitor health 
information for undefined ``permissibility'' or to build a separate 
waiting room just to be able to utilize those materials * * *.

It was argued that these concerns were particularly important for small 
and rural clinics ``that may be the only accessible Title X family 
planning and/or abortion providers for a large population of low-income 
women.'' Of particular concern for such clinics was the duplication of 
costs inherent in the separation requirements, as they--

cannot afford to operate separate facilities or to employ separate 
staff for these services without substantially increasing the prices 
of * * * services. Nor can they offer different services on 
different days of the week because so many of their patients * * * 
are only able to travel to the clinic on one day.

Many providers also pointed out that requiring complete physical 
separation of services would be inconsistent with public health 
principles, which recommend integrated health care, and would impact 
negatively on continuity of care. As one comment stated, ``women's 
reproductive health needs are not artificially separated between 
services: a woman who needs an abortion may also need contraceptive 
services, and may at another time require parental care.'' Several 
providers objected in particular that such a separation would, in the 
words of one comment, ``remove * * * one of the most opportune time[s] 
to facilitate the entry of the abortion patent into family planning 
counseling, which is at the post-abortion check-up.'' it was also 
pointed out that separation of services would burden women, by making 
them ``make multiple appointments or trips to visit different staff or 
facilities.'' Finally, the separation policy was objected to by several 
of the comments that otherwise generally supported the proposed rule

[[Page 41276]]

as unnecessarily broad, ambiguous, and vague.
    Several of the comments opposing the revocation of the Gag Rule and 
the adoption of the proposed rules likewise objected specifically to 
the separation requirements, generally on the ground that the pre-1988 
policies were vague and unenforceable. Two comments also argued that, 
if the pre-1988 requirement of physical separation was to be 
reinstituted, it made no sense to revoke Sec. 59.9 of the Gag Rule in 
its entirety, as that section of the Gag Rule contained specific 
standards to implement this requirement; alternatively, it was argued 
that if the Secretary is going to use different standards to determine 
whether the requisite physical separation existed, those should be 
published for public comment.
    The Secretary agrees that the comments on both sides of this issue 
have identified substantial concerns with the pre-1988 interpretations 
with respect to the issue of how much physical separation should be 
required between a grantee's Title X project activities and abortion-
related activities. The Secretary agrees with the comments that the 
pre-1988 interpretation that some physical separation was required was 
unenforceable. Indeed, since the pre-1988 interpretations had held that 
it was permissible to provide abortions on a Title X clinic site and to 
have common waiting areas, records, and staff (subject largely to 
proper allocation of costs), it was difficult to tell just what degree 
and kind of physical separation were prohibited. As a consequence, the 
agency attempted to enforce this requirement on only a few occasions 
prior to 1988. The Secretary does not agree with opponents of the 
proposed rules, however, who argued that the ``physical separation'' 
requirements in Sec. 59.9 of the Gag Rule should be retained on the 
ground that they provide a necessary clarification of this issue. 
Although Sec. 59.9 provided ostensibly more specific standards, the 
fundamental measure of compliance under that section remained 
ambiguous: ``the degree of separation from facilities [in which 
prohibited activities occurred] and the extent of such prohibited 
activities,'' and ``[t]he extent to which'' certain materials were 
present or absent. Furthermore, since under Sec. 59.9 compliance was to 
be determined on a ``facts and circumstances'' basis, this section of 
the Gag Rule provided grantees with less specific advance notice of the 
compliance standards than did the pre-1988 policies and 
interpretations. Moreover, the change in policy from the more concrete 
policies proposed during the Gag Rule rulemaking to the less concrete 
``facts and circumstances'' standard ultimately adopted in the final 
Gag Rule as a result of the public comment suggests the practical 
difficulties of line-drawing in this area. In fact, since the Gag Rule 
was never implemented on a national basis, the precise contours of the 
compliance standards of Sec. 59.9 were never determined. The Secretary 
has accordingly not accepted the suggestion from several opponents of 
the proposed rule that the policies of Sec. 59.9 be retained.
    As noted by many of the comments from groups that generally 
supported the revocation of the Gag Rule, the statute does not on its 
face require physical separation; rather, by its terms it is addressed 
to the use of ``funds.'' While the interpretation of the statute by 
agency counsel on which the requirement for physical separation is 
based was reasonable, it is not the only possible reading of the 
statute. Rather, the fundamental question under the statute is, as the 
agency sees it, whether Title X funds are used by Title X grantees to 
promote or encourage abortions as a method of family planning in the 
Title X-assisted project. The Department has traditionally viewed a 
grant project as consisting of an identified set of activities 
supported in whole or in part by grant funds. If a Title X grantee can 
demonstrate by its financial records, counseling and service protocols, 
administrative procedures, and other means that--within the identified 
set of Title X-supported activities--promotion or encouragement of 
abortion as a method of family planning does not occur, then it is hard 
to see what additional statutory protection is afforded by the 
imposition of a requirement for ``physical'' separation. Indeed, in the 
light of the enforcement history noted above, it is not unreasonable to 
say that the standard of ``physical'' separation has, as a practical 
matter, had little relevance or applicability in the Title X program to 
date. Moreover, the practical difficulty of drawing lines in this area, 
both as experienced prior to 1988 and as evident in the history of the 
Gag Rule itself, suggests that this legal interpretation is not likely 
ever to result in an enforceable compliance policy that is consistent 
with the efficient and cost-effective delivery of family planning 
services. Accordingly, the Secretary has accepted the suggestion of a 
number of the comments that the requirement for physical separation be 
dropped; the interpretations summarized in the notice published in the 
notices section of this edition of the Federal Register are revised 
accordingly. This decision makes it unnecessary to respond to the 
remaining comments on the issue.

G. Advocacy Restrictions 

    The Gag Rule, at 42 CFR 59.10 (1989 ed.), prohibited Title X 
projects from encouraging, promoting, or advocating abortion as a 
method of family planning. This section prohibited Title X projects 
from engaging in actions to ``assist women to obtain abortions or 
increase the availability or accessibility of abortion for family 
planning purposes,'' including actions such as lobbying for the passage 
of legislation to increase the availability of abortion as a method of 
family planning, providing speakers to promote the use of abortion as a 
method of family planning, paying dues to any group that as a 
significant part of its activities advocated abortion as a method of 
family planning, using legal action to make abortion available as a 
method of family planning, and developing or disseminating materials 
advocating abortion as a method of family planning. The pre-1988 
interpretations likewise prohibited the promotion or encouragement of 
abortion as a method of family planning through advocacy activities 
such as providing speakers, bringing legal action to liberalize 
statutes relating to abortion, and producing and/or showing films that 
tend to encourage or promote abortion as a method of family planning. 
However, under those prior interpretations, it was considered 
permissible for Title X grantees to be dues-paying members of abortion 
advocacy groups, so long as there were other legitimate program-related 
reasons for the affiliation.
    Very few comments were received concerning these proposed 
interpretations. Those received from persons and entities that 
generally supported the proposed rules generally argued against the 
restriction on showing films advocating abortion, on the ground that it 
was possible to violate this restriction by showing a film that was 
purely factual and detailed relative risks. The few comments on this 
part of the policies and interpretations received from those who 
generally opposed revoking the Gag Rule pointed out the similarity 
between the advocacy policies articulated in the proposed 
interpretations and Sec. 59.10 of the Gag Rule and argued that 
Sec. 59.10 should accordingly be reinstated.
    As set out above, the Secretary is of the view the Gag Rule cannot 
and should not be adopted piecemeal, as recommended by these comments. 
Moreover, the Secretary is of the view

[[Page 41277]]

that the prohibition against dues paying contained in Sec. 59.10 is not 
required by the statute and does not represent sound public policy. 
Accordingly, the suggestion that Sec. 59.10 be reinstated has not been 
adopted. With respect to the criticism of the prohibition against Title 
X grantees showing films advocating abortion as a method of family 
planning, it is recognized that the prohibition should not encompass 
the kind of neutral, factual information that grantees are permitted to 
provide in the counseling context; the interpretations have been 
clarified accordingly. To the extent that these comments seek to 
further liberalize the advocacy restrictions, however, they are 
rejected as inconsistent with the Secretary's basic interpretation of 
section 1008.

H. Miscellaneous

    A number of comments were received on miscellaneous issues. Those 
comments, and the Secretary's responses thereto, are summarized below.
1. Changes outside the scope of the rulemaking
    Several comments were received advocating changes to other sections 
of the regulations on issues other than the issue of compliance with 
section 1008. These comments included the following suggestions: that 
the regulations be revised to permit natural family planning providers 
to be Title X grantees; that the regulations be revised to prohibit 
single method providers from participating in Title X projects; that 
the footnote in the regulation addressing Pub. L. 94-63 be revised to 
state that the law also forbids coercion to carry a pregnancy to term; 
that the regulations be revised to deal with recent medical 
developments, such as HIV or Norplant. All of these suggestions are 
rejected on the ground that they exceed the scope of the rulemaking 
because these issues were not the subject of the Notice of Proposed 
Rulemaking.
2. Audit standards
    Several providers urged that the OMB audit standards for Title X 
projects be revised to reflect the change in the regulations. While 
this comment is likewise outside the scope of the rulemaking, the 
Department intends to work with the Office of Management and Budget to 
revise the program audit standards to reflect the regulations below and 
the policies and interpretations also being reinstituted.
3. Separation of Powers
    Two comments, including one from four members of Congress, argued 
that the suspension of the Gag Rule violated the separation of powers 
insofar as it misspent federal tax dollars without amendment to the 
statute or compliance with the APA. The Secretary disagrees that 
suspension of the Gag Rule violated either the statute or the APA. The 
Gag Rule was, in the Secretary's view, a permissible interpretation of 
the statute, but not the only permissible interpretation of the 
statute; thus, suspension of those rules (and reinstitution of the 
Department's longstanding policies and interpretations of the statute) 
is not inconsistent with the statute. Nor was the suspension action 
inconsistent with the APA, as the findings which the APA requires be 
made in such circumstances were made. Finally, the Secretary notes that 
this issues is now moot, with the publication of the regulations below.

I. Technical Amendments

    Because the proposed rules proposed the reissuance of the program 
regulations that were issued in 1980, it was recognized that--

some of the other regulations cross-referenced in the rules below 
may no longer be operative or citations may need to be updated. 
However, such housekeeping details will be addressed in the final 
rules.

58 FR 7464. Further review of the proposed regulations has established 
that this is indeed the case. Accordingly, a number of technical 
amendments have been made to the regulations, to delete obsolete 
statutory or regulatory references or to clarify the existing 
provisions or incorporate new regulatory or other references made 
relevant by subsequent changes in the law. A summary of the technical 
amendments, and the reasons therefor, follows:
    1. Sec. 59.2 (definition of ``low income family''): The reference 
to ``Community Services Administration Income Poverty Guidelines (45 
CFR 1060.2)'' is changed to ``Poverty Guidelines issued pursuant to 42 
U.S.C. 9902(2).'' This change reflects a change in the law, effected by 
Pub. L. 97-35, Sec. 673.
    2. Sec. 59.2 (definition of ``State''): The definition of this term 
is changed to reflect statutory changes regarding the Trust Territories 
of the Pacific Islands effected by Pub. L. 99-239 (relating to the 
Federated States of Micronesia, the Marshall Islands, and the Republic 
of Palau).
    3. Sec. 59.5(a)(8): The reference to the ``CSA Income Poverty 
Guidelines'' is changed, consistent with and for the reason set out 
above with respect to Sec. 59.2 (definition of ``low income family'').
    4. Sec. 59.9: The reference to ``Subpart Q'' of 45 CFR Part 74 has 
been deleted, as that subpart has been revoked. A reference to 45 CFR 
Part 92 has been added, to reflect the requirements at that part that 
apply by their terms of State and local governments.
    5. Sec. 59.10: The references to 42 CFR Part 122 and 45 CFR Part 19 
have been deleted, as those parts have been revoked. A reference to 37 
CFR Part 401, which applies by its terms, has been added, reflecting a 
change in the law. The description of 45 CFR Part 74 has been changed, 
to reflect accurately the current title of that part. A reference to 45 
CFR Part 92 has been added, to reflect the requirements at that part 
that apply by their terms to State and local governments.
    6. Sec. 59.11: The word ``documented'' has been inserted before the 
word ``consent'' in this section to clarify what was implicit in this 
section, that the consent for disclosure must be documented by the 
project.
    7. Sec. 59.12 (proposed): The proposed section (which was the prior 
section relating to inventions and discoveries) has been deleted, as it 
has been superseded by the government-wide regulations at 37 CFR Part 
401, a reference to which has been added to Sec. 59.10. This change has 
also occasioned the renumbering of the proposed Sec. 59.13.
    The above changes are all technical in nature and simply bring the 
regulations issued below into conformity with current law. They are 
thus essentially housekeeping in nature, as noted in the proposed 
rules. Accordingly, and for the reasons set out above, the Secretary 
finds that public comment on these changes would be impracticable, 
unnecessary, and contrary to the public interest and that good cause 
therefore exists for omitting public comment thereon.

III. Effective Date

    These regulations are adopted effective upon publication, as they 
meet the conditions for exception from the requirement for a 30-day 
delay in effective date under 5 U.S.C. 553(d). First, by revoking the 
Gag Rule, the regulations below relieve the restrictions imposed on 
grantees' conduct of their Title X projects by the Gag Rule. Second, 
the policies adopted in the regulations below and the interpretations 
adopted in conjunction with them are already largely in effect, by 
virtue of the suspension of the Gag Rule and the reinstitution of the 
pre-

[[Page 41278]]

1988 policies and interpretations effected by the interim rules of 
February 5, 1993. To the extent this status quo is changed by the 
revision of the policies and interpretations in question, the effect of 
those revisions is to clarify and simplify certain of the present 
restrictions, which should make complying with the policies and 
interpretations easier for grantees than is presently the case. Thus, 
no useful purpose would be served by delaying the effective date of 
these regulations, and the Secretary accordingly finds that good cause 
exists for making them effective upon publication.

IV. Analysis of Impacts

    The Secretary has examined the impacts of the final rule under the 
Regulatory Flexibility Act (5 U.S.C. 601-612), and certifies that this 
final rule will not have a significant impact on a substantial number 
of small entities.
    Section 202 of the Unfunded Mandates Reform Act (the Act) requires 
that agencies prepare an assessment of anticipated costs and benefits 
before proposing any rule that may result in an expenditure by State, 
local, and tribal governments, in the aggregate, or by the private 
sector, of $100,000,000 (adjusted for inflation) in any year. This rule 
will not result in such an expenditure; consequently, it is not covered 
by Section 202 of the Act.
    Executive Order 13132 requires that a Federalism Assessment be 
prepared in any cases in which policies have significant federalism 
implications as defined in the Executive Order. The Department does not 
intend or interpret this final rule as imposing additional costs or 
burdens on the States. The Department has evaluated the public 
comments. Public comments from State and local health departments 
indicate support for the Title X policies contained in the final rule 
and the interpretations to ensure the provision of quality medical care 
and patients' rights to comprehensive services. In the interest of 
consistent program operation and uniform understanding of the policy, 
the final rule codifies what has been longstanding program policy and 
is consistent with current program practice.
    The Office of Management and Budget has reviewed this rule pursuant 
to Executive Order 12866.

List of Subjects in 42 CFR Part 59.

    Family planning--birth control; Grant programs--health; Health 
facilities.

    Dated: June 28, 2000.
David Satcher,
Assistant Secretary for Health and Surgeon General.
    Approved: June 28, 2000.
Donna E. Shalala,
Secretary.

PART 59--GRANTS FOR FAMILY PLANNING

    For the reasons set out in the preamble, subpart A of part 59 of 
title 42, Code of Federal Regulations, is hereby revised to read as 
follows:
Subpart A--Project Grants for Family Planning Services
Sec.
59.1   To what programs do these regulations apply?
59.2   Definitions.
59.3   Who is eligible to apply for a family planning services 
grant?
59.4   How does one apply for a family planning services grant?
59.5   What requirements must be met by a family planning project?
59.6   What procedures apply to assure the suitability of 
informational and educational material?
59.7   What criteria will the Department of Health and Human 
Services use to decide which family planning services projects to 
fund and in what amount?
59.8   How is a grant awarded?
59.9   For what purposes may grant funds be used?
59.10   What other HHS regulations apply to grants under this 
subpart?
59.11   Confidentiality.
59.12   Additional conditions.

Subpart A--Project Grants for Family Planning Services

    Authority: 42 U.S.C. 300a-4.


 Sec. 59.1  To what programs do these regulations apply?

    The regulations of this subpart are applicable to the award of 
grants under section 1001 of the Public Health Service Act (42 U.S.C. 
3200) to assist in the establishment and operation of voluntary family 
planning projects. These projects shall consist of the educational, 
comprehensive medical, and social services necessary to aid individuals 
to determine freely the number and spacing of their children.


 Sec. 59.2  Definitions.

    As used in this subpart:
    Act means the Public Health Service Act, as amended.
    Family means a social unit composed of one person, or two or more 
persons living together, as a household.
    Low income family means a family whose total annual income does not 
exceed 100 percent of the most recent Poverty Guidelines issued 
pursuant to 42 U.S.C. 9902(2). ``Low-income family'' also includes 
members of families whose annual family income exceeds this amount, but 
who, as determined by the project director, are unable, for good 
reasons, to pay for family planning services. For example, 
unemancipated minors who wish to receive services on a confidential 
basis must be considered on the basis of their own resources.
    Nonprofit, as applied to any private agency, institution, or 
organization, means that no part of the entity's net earnings benefit, 
or may lawfully benefit, any private shareholder or individual.
    Secretary means the Secretary of Health and Human Services and any 
other officer or employee of the Department of Health and Human 
Services to whom the authority involved has been delegated.
    State includes, in addition to the several States, the District of 
Columbia, Guam, the Commonwealth of Puerto Rico, the Northern Mariana 
Islands, the U.S. Virgin Islands, American Samoa, the U.S. Outlaying 
Islands (Midway, Wage, et al.), the Marshall Islands, the Federated 
State of Micronesia and the Republic of Palau.


 Sec. 59.3  Who is eligible to apply for a family planning services 
grant?

    Any public or nonprofit private entity in a State may apply for a 
grant under this subpart.


 Sec. 59.4  How does one apply for a family planning services grant?

    (a) Application for a grant under this subpart shall be made on an 
authorized form.
    (b) An individual authorized to act for the applicant and to assume 
on behalf of the applicant the obligations imposed by the terms and 
conditions of the grant, including the regulations of this subpart, 
must sign the application.
    (c) The application shall contain--
    (1) A description, satisfactory to the Secretary, of the project 
and how it will meet the requirements of this subpart;
    (2) A budget and justification of the amount of grant funds 
requested;
    (3) A description of the standards and qualifications which will be 
required for all personnel and for all facilities to be used by the 
project; and
    (4) Such other pertinent information as the Secretary may require.


 Sec. 59.5  What requirements must be met by a family planning project?

    (a) Each project supported under this part must:
    (1) Provide a broad range of acceptable and effective medically 
approved family planning methods

[[Page 41279]]

(including natural family planning methods) and services (including 
infertility services and services for adolescents). If an organization 
offers only a single method of family planning, it may participated as 
part of a project as long as the entire project offers a broad range of 
family planning services.
    (2) Provide services without subjecting individuals to any coercion 
to accept services or to employ or not to employ any particular methods 
of family planning. Acceptance of services must be solely on a 
voluntary basis and may not be made a prerequisite to eligibility for, 
or receipt of, any other services, assistance from or participation in 
any other program of the applicant.\1\
---------------------------------------------------------------------------

    \1\ Section 205 of Pub. L. 94-63 states: ``Any (1) officer or 
employee of the United States, (2) officer or employee of any State, 
political subdivision of a State, or any other entity, which 
administers or supervises the administration of any program 
receiving Federal financial assistance, or (3) person who receives, 
under any program receiving Federal assistance, compensation for 
services, who coerces or endeavors to coerce any person to undergo 
an abortion or sterilization procedure by threatening such person 
with the loss of, or disqualification for the receipt of, any 
benefit or service under a program receiving Federal financial 
assistance shall be fined not more than $1,000 or imprisoned for not 
more than one year, or both.''
---------------------------------------------------------------------------

    (3) Provide services in a manner which protects the dignity of the 
individual.
    (4) Provide services without regard of religion, race, color, 
national origin, handicapping condition, age, sex, number of 
pregnancies, or martial status.
    (5) Not provide abortion a method of family planning. A project 
must:
    (i) Offer pregnant women the opportunity to provided information 
and counseling regarding each of the following options:
    (A) Prenatal care and delivery;
    (B) Infant care, foster care, or adoption; and
    (C) Pregnancy termination.
    (ii) If requested to provide such information and counseling, 
provide neutral, factual information and nondirective counseling on 
each of the options, and referral upon request, except with respect to 
any option(s) about which the pregnant woman indicates she does not 
wish to receive such information and counseling.
    (6) Provide that priority in the provision of services will be 
given to persons from low-income families.
    (7) Provide that no charge will be made for services provided to 
any persons from a low-income family except to the extent that payment 
will be made by a third party (including a government agency) which is 
authorized to or is under legal obligation to pay this charge.
    (8) Provide that charges will be made for services to persons other 
than those from low-income families in accordance with a schedule of 
discounts based on ability to pay, except that charges to persons from 
families whose annual income exceeds 250 percent of the levels set 
forth in the most recent Poverty Guidelines issued pursuant to 42 
U.S.C. 9902(2) will be made in accordance with a schedule of fees 
designed to recover the reasonable cost of providing services.
    (9) If a third party (including a Government agency) is authorized 
or legally obligated to pay for services, all reasonable efforts must 
be made to obtain the third-party payment without application of any 
discounts. Where the cost of services is to be reimbursed under title 
XIX, XX, or XXI of the Social Security Act, a written agreement with 
the title XIX, XX or XXI agency is required.
    (10)(i) Provide that if an application relates to consolidation of 
service areas or health resources or would otherwise affect the 
operations of local or regional entities, the applicant must document 
that these entities have been given, to the maximum feasible extent, an 
opportunity to participate in the development of the application. Local 
and regional entities include existing or potential subgrantees which 
have previously provided or propose to provide family planning services 
to the area proposed to be served by the applicant.
    (ii) Provide an opportunity for maximum participation by existing 
or potential subgrantees in the ongoing policy decisionmaking of the 
project.
    (11) Provide for an Advisory Committee as required by Sec. 59.6.
    (b) In addition to the requirements of paragraph (a) of this 
section, each project must meet each of the following requirements 
unless the Secretary determines that the project has established good 
cause for its omission. Each project must:
    (1) Provide for medical services related to family planning 
(including physician's consultation, examination prescription, and 
continuing supervision, laboratory examination, contraceptive supplies) 
and necessary referral to other medical facilities when medically 
indicated, and provide for the effective usage of contraceptive devices 
and practices.
    (2) Provide for social services related to family planning, 
including counseling, referral to and from other social and medical 
services agencies, and any ancillary services which may be necessary to 
facilitate clinic attendance.
    (3) Provide for informational and educational programs designed 
to--
    (i) Achieve community understanding of the objectives of the 
program;
    (ii) Inform the community of the availability of services; and
    (iii) Promote continued participation in the project by persons to 
whom family planning services may be beneficial.
    (4) Provide for orientation and in-service training for all project 
personnel.
    (5) Provide services without the imposition of any durational 
residency requirement or requirement that the patient be referred by a 
physician.
    (6) Provide that family planning medical services will be performed 
under the direction of a physician with special training or experience 
in family planning.
    (7) Provide that all services purchased for project participants 
will be authorized by the project director or his designee on the 
project staff.
    (8) Provide for coordination and use of referral arrangements with 
other providers of health care services, local health and welfare 
departments, hospitals, voluntary agencies, and health services 
projects supported by other federal programs.
    (9) Provide that if family planning services are provided by 
contract or other similar arrangements with actual providers of 
services, services will be provided in accordance with a plan which 
establishes rates and method of payment for medical care. These 
payments must be made under agreements with a schedule of rates and 
payment procedures maintained by the grantee. The grantee must be 
prepared to substantiate, that these rates are reasonable and 
necessary.
    (10) Provide, to the maximum feasible extent, an opportunity for 
participation in the development, implementation, and evaluation of the 
project by persons broadly representative of all significant elements 
of the population to be served, and by others in the community 
knowledgeable about the community's needs for family planning services.


Sec. 59.6  What procedures apply to assure the suitability of 
informational and educational material?

    (a) A grant under this section may be made only upon assurance 
satisfactory to the Secretary that the project shall provide for the 
review and approval of informational and educational materials 
developed or made available under the project by an Advisory Committee 
prior to their distribution, to assure that the materials are suitable 
for the population

[[Page 41280]]

or community to which they are to be made available and the purposes of 
title X of the Act. The project shall not disseminate any such 
materials which are not approved by the Advisory Committee.
    (b) The Advisory Committee referred to in paragraph (a) of this 
section shall be established as follows:
    (1) Size. The Committee shall consist of no fewer than five but not 
more than nine members, except that this provision may be waived by the 
Secretary for good cause shown.
    (2) Composition. The Committee shall include individuals broadly 
representative (in terms of demographic factors such as race, color, 
national origin, handicapped condition, sex, and age) of the population 
or community for which the materials are intended.
    (3) Function. In reviewing materials, the Advisory Committee shall:
    (i) Consider the educational and cultural backgrounds of 
individuals to whom the materials are addressed;
    (ii) Consider the standards of the population or community to be 
served with respect to such materials;
    (iii) Review the content of the material to assure that the 
information is factually correct;
    (iv) Determine whether the material is suitable for the population 
or community to which is to be made available; and
    (v) Establish a written record of its determinations.


Sec. 59.7  What criteria will the Department of Health and Human 
Services use to decide which family planning services projects to fund 
and in what amount?

    (a) Within the limits of funds available for these purposes, the 
Secretary may award grants for the establishment and operation of those 
projects which will in the Department's judgment best promote the 
purposes of section 1001 of the Act, taking into account:
    (1) The number of patients, and, in particular, the number of low-
income patients to be served;
    (2) The extent to which family planning services are needed 
locally;
    (3) The relative need of the applicant;
    (4) The capacity of the applicant to make rapid and effective use 
of the federal assistance;
    (5) The adequacy of the applicant's facilities and staff;
    (6) The relative availability of non-federal resources within the 
community to be served and the degree to which those resources are 
committed to the project; and
    (7) The degree to which the project plan adequately provides for 
the requirements set forth in these regulations.
    (b) The Secretary shall determine the amount of any award on the 
basis of his estimate of the sum necessary for the performance of the 
project. No grant may be made for less than 90 percent of the project's 
costs, as so estimated, unless the grant is to be made for a project 
which was supported, under section 1001, for less than 90 percent of 
its costs in fiscal year 1975. In that case, the grant shall not be for 
less than the percentage of costs covered by the grant in fiscal year 
1975.
    (c) No grant may be made for an amount equal to 100 percent for the 
project's estimated costs.


Sec. 59.8  How is a grant awarded?

    (a) The notice of grant award specifies how long HHS intends to 
support the project without requiring the project to recompete for 
funds. This period, called the project period, will usually be for 
three to five years.
    (b) Generally the grant will initially be for one year and 
subsequent continuation awards will also be for one year at a time. A 
grantee must submit a separate application to have the support 
continued for each subsequent year. Decisions regarding continuation 
awards and the funding level of such awards will be made after 
consideration of such factors as the grantee's progress and management 
practices, and the availability of funds. In all cases, continuation 
awards require a determination by HHS that continued funding is in the 
best interest of the government.
    (c) Neither the approval of any application nor the award of any 
grant commits or obligates the United States in any way to make any 
additional, supplemental, continuation, or other award with respect to 
any approved application or portion of an approved application.


Sec. 59.9  For what purpose may grant funds be used?

    Any funds granted under this subpart shall be expended solely for 
the purpose for which the funds were granted in accordance with the 
approved application and budget, the regulations of this subpart, the 
terms and conditions of the award, and the applicable cost principles 
prescribed in 45 CFR Part 74 or Part 92, as applicable.


Sec. 59.10  What other HHS regulations apply to grants under this 
subpart?

    Attention is drawn to the following HHS Department-wide regulations 
which apply to grants under this subpart. These include:

37 CFR Part 401--Rights to inventions made by nonprofit 
organizations and small business firms under government grants, 
contracts, and cooperative agreements
42 CFR Part 50, Subpart D--Public Health Service grant appeals 
procedure
45 CFR Part 16--Procedures of the Departmental Grant Appeals Board
45 CFR Part 74--Uniform administrative requirements for awards and 
subawards to institutions of higher education, hospitals, other 
nonprofit organizations, and commercial organizations; and certain 
grants and agreements with states, local governments and Indian 
tribal governments
45 CFR Part 80--Nondiscrimination under programs receiving Federal 
assistance through the Department of Health and Human Services 
effectuation of Title VI of the Civil Rights Act of 1964
45 CFR Part 81--Practice and procedure for hearings under Part 80 of 
this Title
45 CFR Part 84--Nondiscrimination on the basis of handicap in 
programs and activities receiving or benefitting from Federal 
financial assistance
45 CFR Part 91--Nondiscrimination on the basis of age in HHS 
programs or activities receiving Federal financial assistance
45 CFR Part 92--Uniform administrative requirements for grants and 
cooperative agreements to state and local governments

Sec. 59.11  Confidentiality.

    All information as to personal facts and circumstances obtained by 
the project staff about individuals receiving services must be held 
confidential and must not be disclosed without the individual's 
documented consent, except as may be necessary to provide services to 
the patient or as required by law, with appropriate safeguards for 
confidentiality. Otherwise, information may be disclosed only in 
summary, statistical, or other form which does not identify particular 
individuals.


Sec. 59.12  Additional conditions.

    The Secretary may, with respect to any grant, impose additional 
conditions prior to or at the time of any award, when in the 
Department's judgment these conditions are necessary to assure orb 
protect advancement of the approved program, the interests of public 
health, or the proper use of grant funds.
[FR Doc. 00-16758 Filed 6-30-00; 8:45 am]
BILLING CODE 4160-17-M