30706 Federal Register / Vol. 72, No. 106 / Monday, June 4, 2007 / Rules and Regulations 

required information to the U.S. Senate, 

the U.S. House of Representatives, and 

the Comptroller General of the United 

States prior to publication of the rule in 

the Federal Register. A major rule 

cannot take effect until 60 days after it 

is published in the Federal Register. 

This action is not a ‘‘major rule’’ as 

defined by 5 U.S.C. 804(2). 

Under section 307(b)(1) of the CAA, 

petitions for judicial review of this 

action must be filed in the United States 

Court of Appeals for the appropriate 

circuit by August 3, 2007. Filing a 

petition for reconsideration by the 

Administrator of this final rule does not 

affect the finality of this rule for the 

purposes of judicial review, nor does it 

extend the time within which a petition 

for judicial review may be filed, and 

shall not postpone the effectiveness of 

such rule or action. This action may not 

be challenged later in proceedings to 

enforce its requirements. (See section 

307(b)(2)). 

List of Subjects in 40 CFR Part 52 

Environmental protection, Air 

pollution control, Carbon monoxide, 

Intergovernmental relations, Nitrogen 

dioxide, Ozone, Particulate matter, 

Reporting and recordkeeping 

requirements, Sulfur oxides, Volatile 

organic compounds. 

Dated: May 22, 2007. 

Russell L. Wright, Jr., 

Acting Regional Administrator, Region 4. 

[FR Doc. E7–10696 Filed 6–1–07; 8:45 am] 

BILLING CODE 6560–50–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Indian Health Service 

42 CFR Part 136 

Center for Medicare & Medicaid 

Services 

42 CFR Part 489 

[CMS–2206–F] 

RIN 0917–AA02 

Section 506 of the Medicare 

Prescription Drug, Improvement, and 

Modernization Act of 2003—Limitation 

on Charges for Services Furnished by 

Medicare Participating Inpatient 

Hospitals to Individuals Eligible for 

Care Purchased by Indian Health 

Programs 

AGENCY: Indian Health Service (IHS), 

Center elsewhere for Medicare & 

Medicaid Services (CMS), Health and 

Human Services (HHS). 

ACTION: Final rule. 

SUMMARY: The Secretary of the 

Department of Health and Human 

Services (HHS) hereby issues this final 

rule establishing regulations required by 

section 506 of the Medicare Prescription 

Drug, Improvement, and Modernization 

Act of 2003 (MMA), (Pub. L. 108–173). 

Section 506 of the MMA amended 

section 1866 (a)(1) of the Social Security 

Act to add subparagraph (U) which 

requires hospitals that furnish inpatient 

hospital services payable under 

Medicare to participate in the contract 

health services program (CHS) of the 

Indian Health Service (IHS) operated by 

the IHS, Tribes, and Tribal 

organizations, and to participate in 

programs operated by urban Indian 

organizations that are funded by IHS 

(collectively referred to as I/T/Us) for 

any medical care purchased by those 

programs. Section 506 also requires 

such participation to be in accordance 

with the admission practices, payment 

methodology, and payment rates set 

forth in regulations established by the 

Secretary, including acceptance of no 

more than such payment rates as 

payment in full. 

DATES: These final regulations are 

effective July 5, 2007. 

FOR FURTHER INFORMATION CONTACT: Carl 

Harper, Director, Office of Resource 

Access and Partnerships, IHS, 801 

Thompson Avenue, Twinbrook Metro 

Plaza Suite 360, Rockville, Maryland 

20852, telephone (301) 443–2694. 

Dorothy Dupree, Director, Tribal Affairs 

Group, OEA, CMS, 7500 Security 

Boulevard, Mail Stop: C1–13–11, 

Baltimore, Maryland 21244, telephone 

(410) 786–1942. (These are not toll free 

numbers.) 

SUPPLEMENTARY INFORMATION: 

I. Background 

On April 28, 2006, IHS and CMS 

published proposed rules in the Federal 

Register (71 FR 25124) as mandated by 

section 506(c) of the MMA, which 

requires the Secretary to publish rules 

implementing the requirements of 

section 506 of the MMA. Under that 

statutory provision, hospitals that 

furnish inpatient hospital services 

payable under Medicare are required to 

participate both in the contract health 

service (CHS) program of IHS operated 

by IHS, Tribes, and Tribal organizations, 

and in programs operated by urban 

Indian organizations (I/T/Us) that are 

funded by the IHS, for medical care 

purchased by those programs. Section 

506 also requires such participation to 

be in accordance with the admission 

practices, payment methodology, and 

payment rates set forth in regulations 

established by the Secretary, including 

acceptance of no more than such rate as 

payment in full. The proposed rule 

provided interested persons until June 

27, 2006 to submit written comments. 

II. Provisions of the Proposed 

Regulations 

a. The Proposed Rule 

We proposed to amend the IHS 

regulations at 42 CFR part 136, by 

adding a new subpart D to describe the 

payment methodology and other 

requirements for Medicare-participating 

hospitals and critical access hospitals 

(CAHs) that furnish inpatient services, 

either directly or under arrangement, to 

individuals who are authorized to 

receive services from such hospitals 

under a CHS program of the IHS, Tribes, 

and Tribal organizations, and IHSfunded programs operated by urban 

Indian organizations (collectively, I/T/U 

programs). As provided in the statute, 

we also proposed to amend CMS 

regulations at 42 CFR part 489 to require 

Medicare-participating hospitals and 

critical access hospitals (CAHs) that 

furnish inpatient hospital services to 

individuals who are eligible for and 

authorized to receive items and services 

covered by such I/T/U programs to 

accept no more than the payment 

methodology under 42 CFR part 136, 

subpart D as payment in full for such 

items and services. The proposed rule 

did not include additional regulation of 

admission practices. 

b. Summary of Changes in the Final 

Rule 

In reviewing several comments, IHS 

and CMS determined that the payment 

methodology in the proposed rule was 

not adequately explained. Therefore, we 

are clarifying the payment 

methodologies established by this 

regulation to include more detail. For 

hospital services that would be paid 

under prospective payment systems 

(PPS) by the Medicare program, the 

basic payment methodology under this 

rule is based on the applicable PPS. For 

example, inpatient hospital services of 

acute care hospitals, psychiatric 

hospitals, rehabilitation hospitals, and 

long-term care hospitals will be paid 

based on the same four Medicare PPS 

systems as would be used to pay for 

similar hospital services to the 

hospitals’ Medicare patients, as 

described under 42 CFR part 412, while 

outpatient hospital services and skilled 

nursing facility services (SNF) will be 

paid based on their Medicare PPS 

systems, as described under 42 CFR part 

419 (outpatient) and 42 CFR part 413 


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(SNF) respectively. The basic payment 

methodology under this rule for 

Medicare-participating hospitals that 

furnish inpatient services but are 

exempt from PPS and currently receive 

reasonable cost reimbursement under 

the Medicare program (for example, 

critical access hospitals (CAHs), 

children’s hospitals, cancer hospitals, 

and certain other hospitals reimbursed 

by Medicare under special 

arrangements), is based on 42 CFR part 

413, which addresses reasonable cost 

reimbursement. 

In addition, based on the comments 

received, IHS and CMS determined that 

the requirement that providers 

participate in IHS and Tribal CHS 

programs and IHS-funded urban Indian 

organization programs was not clear in 

the proposed rule and additional 

guidance was needed. Therefore, we 

clarified that hospitals participating in 

Medicare that furnish inpatient hospital 

services will be required to accept the 

payment methodology and no more than 

the rates established under 42 CFR part 

136, subpart D as payment in full for 

such services. This change also clarifies 

that such hospitals may not refuse 

service to an individual on the basis that 

the individual may be eligible for 

payment under such CHS and IHSfunded urban Indian programs. We did 

not include additional prohibitions on 

discrimination in admission practices 

because such requirements are already 

covered and enforced by the HHS Office 

for Civil Rights under existing 

regulations at 45 CFR part 80. 

III. Analysis of and Responses to Public 

Comments 

The IHS received 35 comments from 

Tribes, Tribal organizations, hospital 

associations, CAHs, and individuals. 

The IHS, in partnership with CMS, 

carefully reviewed the submissions by 

individuals, groups, Indian, and nonIndian organizations. We did not 

consider 4 of these comments, because 

they were received after the closing 

date. Of the 31 timely comments, 26 

comments supported the proposed 

regulation. Several comments requested 

clarification of certain sections of the 

rule. 

Comment: We received 10 comments 

that expressed serious concern 

regarding the long delay in publication 

of the proposed rule and requested 

expedited publication of a final rule. 

Response: The development of this 

final rule has been a long and careful 

process, involving consultation with the 

Tribes through the CMS Tribal 

Technical Advisory Group, and close 

collaboration between IHS and CMS. An 

incidental benefit of this process has 

been greater understanding by all 

parties of the service delivery and 

payment processes that are at issue in 

this rule. 

Comment: A number of the comments 

from Tribes and Tribal organizations 

expressed concerns that affected Indian 

health programs would need training to 

fully implement and monitor the 

participation and payment 

requirements. 

Response: IHS is authorized to 

provide technical assistance regarding 

implementation of this final rule. Tribal 

program representatives can contact Mr. 

Carl Harper at the phone number listed 

in the contact information. 

Comment: One commenter expressed 

concern that American Indian/Alaska 

Native (AI/AN) populations have many 

complications and co-morbidities that 

do not exist to the same extent in the 

patient population as a whole, including 

diabetes, cardiovascular disease, injury, 

trauma, and alcoholism. The commenter 

suggested that costs to treat this 

population are higher and suggested IHS 

would be paying less for its patient 

population than Medicare actually pays 

for services furnished to a comparable 

population. 

Response: Patients who are more 

seriously ill tend to require a higher 

level of hospital resources than patients 

who are less seriously ill even though 

they may be admitted to the hospital for 

the same reason. Recognizing this, 

Medicare payments can be higher for 

patients in certain diagnostic-related 

groups (DRGs) based on a secondary 

diagnosis that could indicate specific 

complications or co-morbidities. Also, 

the DRG groupings take into 

consideration co-morbidity factors, and 

payment adjustments that would be 

available to reflect the higher costs of 

disproportionate share hospital 

adjustments and outlier payments are 

provided for exceptionally high cost 

cases, all of which would address high 

costs of this patient population. As a 

result, IHS payment under this rule will 

reflect the serious health issues faced by 

its patient population. 

Comment: One commenter expressed 

concern that the CHS program payments 

are not always timely and should be 

paid in accordance with Medicare 

timeline requirements. 

Response: This regulation addresses 

practices, payment methodologies, and 

rates of payment that are not already 

addressed under current laws or 

regulations. The time frame for paying 

claims authorized by IHS under the CHS 

program is already governed by section 

220 of the Indian Health Care 

Improvement Act (IHCIA). 

Comment: One commenter expressed 

concern that payment for services 

should be absolute for services 

rendered, not at the service unit’s 

discretion. In addition, this commenter 

suggested IHS set the timeline for 

notification of emergency services at a 

minimum of 30 days following services 

rendered. 

Response: Payment for services is 

based on a medical priority system 

which is based on the availability of 

funds as established under 42 CFR part 

136, subpart C. Under subpart C of title 

42, notification of emergency services 

must be provided within 72 hours after 

the beginning of treatment or admission 

to a health care facility. The timeline for 

notification of emergency services for 

the elderly and disabled is currently set 

at 30 days in accordance with section 

406 of the IHCIA. 

Comment: One commenter expressed 

concern that the proposed rule places an 

additional burden on hospitals by 

capping rates paid to public and private 

non-IHS funded hospitals, with no 

additional responsibility or 

accountability placed on I/T/U 

programs regarding payments to such 

hospitals. 

Response: This rule would provide for 

rates that hospitals accept under the 

Medicare program. We do not believe 

these rates place an additional burden 

on hospitals. 

Comment: One commenter asked 

whether the payment rates required 

under this rule would apply to claims 

for services furnished by long-term care 

hospitals, independent inpatient 

rehabilitation facilities, and inpatient 

psychiatric facilities to individuals who 

were authorized for the service by an 

I/T/U program. 

Response: Long-term care hospitals, 

independent inpatient rehabilitation 

facilities, and inpatient psychiatric 

facilities are covered by these rules 

because they meet the criteria of section 

506 of the MMA: They are covered by 

the definition of ‘‘hospital’’ in section 

1861(e) or (f), as applicable, of the 

Social Security Act and they furnish 

inpatient hospital services. They will be 

paid based upon their respective 

Medicare PPS systems. 

Comment: A commenter asked 

whether agents will be precluded from 

charging the I/T/U for the records 

needed for payment determination or 

quality assurance in cases in which a 

facility is using an outside agent to 

manage its medical records and patient 

information. 

Response: Under section 136.30(j), 

additional payment would not be 

available for the cost of copying of 

medical records to an outside agent who 


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manages medical records and patient 

information. 

Comment: One commenter expressed 

concern that the proposed rule does not 

clearly define what it means to 

‘‘participate’’ in programs operated by 

IHS, Tribes, Tribal organizations, or 

urban Indian (I/T/U) programs. 

Response: Participation in I/T/U 

programs means that all hospitals 

covered by this rule must accept the 

admission practices, payment 

methodology, and no more than the 

rates of payment established under this 

rule as payment in full for items and 

services purchased by I/T/U programs 

for individuals eligible for and referred 

by such programs. To clarify that 

acceptance of these requirements is 

mandatory for participation in 

Medicare, IHS has revised the proposed 

rule in two ways. First, subsections (a) 

and (b) of 42 CFR 136.30 have been 

amended to clarify which entities are 

affected by the rule and the services that 

will be covered. Second, 42 CFR 489.29 

has also been amended to be consistent 

with 42 CFR part 136, subpart D. 

Paragraph (b) has been added to 42 CFR 

489.29 to clarify that hospitals cannot 

deny services to an individual on the 

basis that payment for such services is 

authorized by an I/T/U program. 

However, the rule does not provide 

additional regulation of discrimination 

in admission practices because such 

requirements are already covered and 

enforced by the HHS Office for Civil 

Rights under existing regulations at 45 

CFR part 80. 

Comment: One commenter asked 

whether hospitals which are not 

reimbursed on a reasonable cost basis 

will be reimbursed based on the 

Medicare DRGs or other prospective 

payment rate. 

Response: We have clarified the 

payment methodology in the final rule 

in response to this comment. We are 

clarifying that, for hospital services that 

would be paid under prospective 

payment systems (PPS) by the Medicare 

program, the basic payment 

methodology under this rule is based on 

the applicable PPS. For example, 

inpatient services furnished by acute 

care hospitals, psychiatric hospitals, 

rehabilitation hospitals, and long-term 

care hospitals will be paid based on 

their respective PPS used in the 

Medicare program to pay for similar 

hospital services to the hospitals’

Medicare patients, as described under 

42 CFR part 412, while outpatient 

hospital services and skilled nursing 

facility (SNF) services will be paid 

based on their Medicare PPS, as 

described under 42 CFR part 419 

(outpatient) and 42 CFR part 413 (SNF) 

respectively. Under the basic payment 

methodology of this rule for Medicareparticipating hospitals that furnish 

inpatient services but are exempt from 

PPS and currently receive reasonable 

cost reimbursement under the Medicare 

program (for example, CAHs, children’s 

hospitals, cancer hospitals, and certain 

other hospitals reimbursed by Medicare 

under special arrangements), I/T/Us will 

reimburse such hospitals for claims in 

accordance with 42 CFR part 413, which 

addresses reasonable cost 

reimbursement. In other words, 

hospitals reimbursed by Medicare on a 

reasonable cost basis will not be paid by 

use of DRGs or other case classification 

systems used under the various 

Medicare PPS payment methods. To 

clarify what hospitals can expect to 

receive as reimbursements, IHS has 

created two basic payment 

determinations under section 136.30(c) 

in the final rule; one for PPS based 

payments and one for payments based 

on reasonable costs. 

Comment: Two commenters 

recommended that payment 

adjustments for organ acquisition costs, 

blood clotting factors, new technology 

services, and disproportionate share be 

included in the interim payment 

calculations in order to provide for an 

appropriate level of reimbursement. 

Response: IHS agrees that payment 

adjustments for the types of services 

listed above should be included in the 

payment calculations in order to 

provide for an appropriate level of 

reimbursement. Payment adjustments 

for disproportionate share and new 

medical technology already are 

included in the PPS methodology under 

subparts F and G of part 412. Moreover, 

to ensure that hospitals receiving PPS 

payment include these payment 

adjustments, IHS will use the Medicare 

PRICER system (or a similar system) in 

calculating final payment. The system 

includes adjustments such as those 

above. For items not adjusted within the 

system, the IHS fiscal intermediary will 

be instructed to use standard payments 

calculated by CMS (for example, 

payments based on the Average Sales 

Price (ASP) for hemophilia clotting 

factors). To clarify that such payments 

will be added to the basic rate 

calculation, IHS has added a new 

section 136.30(d) to the rule. 

Comment: Several commenters 

expressed concern that the interim 

payment rates will have a financial 

impact on CAHs. Another commenter 

expressed concern about the per diem 

mechanism used to make interim 

payments to CAHs because there is no 

requirement to follow Medicare 

regulations by the I/T/U. 

Response: The economic financial 

impact study conducted by an IHS fiscal 

intermediary demonstrates that the 

interim payment rates will have limited 

financial impact on rural and small 

rural hospitals as explained in section 

VI of this final rule, Regulatory Impact 

Statement. Moreover, in revising the 

proposed adoption of the Medicare 

payment methodologies in section 

136.30(c) of the final rule, IHS has 

identified two basic determinations for 

payment. Payments to CAHs are covered 

under section 136.30(c)(2). IHS will 

follow payment guidance based on the 

reasonable cost methodology under 42 

CFR 413.70, ‘‘Payment for services of a 

CAH’’. As with other payments based on 

reasonable cost, payments to CAHs will 

be based on the interim payment rate 

established under 42 CFR part 413, 

subpart E. 

Comment: One commenter asked 

whether the final rule will be applied to 

claims which are received after the 

effective date, regardless of the date of 

service, or only to claims with a date of 

service after the effective date. 

Response: The requirements of the 

final rule will apply to claims with a 

date of service on or after the effective 

date of the final regulation. 

Comment: A commenter asked 

whether contracts will become 

invalidated by this regulation or remain 

in effect until they expire in situations 

in which a hospital contract is currently 

in place with IHS, which has rates that 

are not based on Medicare or are not 

less than Medicare rates. 

Response: Medicare-participating 

hospitals that furnish inpatient services 

must accept the rate methodology 

established under this regulation as a 

condition of participation in the 

Medicare program. Current hospital 

contract rates that are lower than the 

rates established by this regulation will 

continue to apply in accordance with 

section 136.30(c). 

Comment: One commenter asked if 

the Medicare timely filing guidelines 

will be waived and/or modified for 

claims when the I/T/U (1) is not the 

primary payor and the patient has 

alternate resources or, (2) delayed in 

sending out a timely purchase order. 

Response: Under 42 CFR 136.61, as 

applied in this rule, the I/T/U program 

is the payor of last resort for individuals 

eligible for any alternate resources. The 

timely filing period under 42 CFR 

424.44 and provisions of the Medicare 

Claims Processing Manual will apply to 

all claims submitted to an I/T/U 

program for payment. 

Comment: One commenter asked the 

IHS to remove the Health Insurance 

Portability and Accountability Act 


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(HIPAA) requirement for electronic 

claim submission. 

Response: If the I/T/U program 

accepts paper claims, this is still an 

acceptable format for claims 

submission. However, if non-I/T/U 

providers generally submit their claims 

electronically to other payers, they 

should also do so for I/T/U payers that 

accept electronic claims. HIPAA 

requires electronic claims to be filed 

using the standard 837 format. 

IV. Collection of Information 

Requirements 

This document does not impose any 

new information collection and 

recordkeeping requirements. 

Consequently, it need not be reviewed 

by the Office of Management and 

Budget under the authority of the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 35). Note: The burden 

requirements in section 136.30(h)(1) for 

submitting a claim form are currently 

approved under OMB approval number 

0938–0279. 

V. Regulatory Impact Statement 

The IHS has examined the impact of 

this final rule as required by Executive 

Order 12866 (September 1993, 

Regulatory Planning and Review), the 

Regulatory Flexibility Act (RFA) 

(September 19, 1980, Pub. L. 96–354), 

section 1102(b) of the Social Security 

Act, the Unfunded Mandates Reform 

Act of 1995 (Pub. L. 104–4), and 

Executive Order 13132. 

Executive Order 12866 directs 

agencies to assess all costs and benefits 

of available regulatory alternatives and, 

if regulation is necessary, to select 

regulatory approaches that maximize 

net benefits (including potential 

economic, environmental, public health 

and safety effects, distributive impacts, 

and equity). A regulatory impact 

analysis (RIA) must be prepared for 

major rules with economically 

significant effects ($100 million or more 

in any 1 year). This action is not a 

significant regulatory action under 

Executive Order 12866. Further 

regulatory evaluation is not necessary 

because the economic impact will be 

minimal. 

The RFA requires agencies to analyze 

options for regulatory relief of small 

businesses. For purposes of the RFA, 

small entities include small businesses, 

nonprofit organizations, and 

government agencies. Most hospitals 

and most other providers and suppliers 

are small entities, either by nonprofit 

status or by having revenues of $6 

million to $29 million in any 1 year. 

Individuals and States are not included 

in the definition of a small entity. 

The I/T/Us have entered into 

contracts with many public and private 

non-I/T Medicare-participating 

hospitals at rates less than or equal to 

the rate proposed in this rule. IHS 

intends to continue existing contracts 

with these hospitals; however, to the 

extent that I/T/Us are not able to 

negotiate a contract with a hospital, 

payment rates established by this rule 

will apply. This action will alleviate the 

need for and administrative burden of 

negotiating rates through individual 

contracts by IHS as well as the 

Medicare-participating hospitals. 

The IHS conducted a study to 

determine the financial impact the 

interim payment rates, as proposed by 

this regulation, would have on public 

and private non-I/T/U hospitals. As part 

of this study, IHS compared the interim 

rates to the rates that IHS has negotiated 

per contracts with public and private 

non-I/T/U hospitals. For FY 2003, of the 

387 hospitals that IHS does business 

with, IHS has negotiated contracts with 

48 percent of these hospitals. Based on 

IHS data, the findings revealed the 

overall negative impact on these public 

and private non-I/T/U hospitals would 

be less than 1 percent. Of the 387 

hospitals in the study, 105 are rural 

hospitals. Out of the 105 rural hospitals, 

84 are small rural hospitals (less than 

100 beds). By comparing the interim 

rate to full billed charges, (that is, what 

IHS pays if a contract is not negotiated) 

revealed a negative financial impact of 

8 percent on these rural hospitals. 

Further analysis of the inpatient bed 

utilization by hospital revealed IHS 

represents less than 2 percent of the 

rural and small rural hospitals total 

business meaning that 98 percent of the 

hospitals’ income comes from other 

sources. For these reasons, IHS has 

determined that the rates proposed by 

these regulations will not have a 

significant economic impact on a 

substantial number of small entities 

within the meaning of the Regulatory 

Flexibility Act, 5 U.S.C. 601 et seq. 

In addition, section 1102(b) of the Act 

requires IHS to prepare a regulatory 

impact analysis if a rule may have a 

significant impact on the operations of 

a substantial number of small rural 

hospitals. This analysis must conform to 

the provisions of section 603 of the 

RFA. For purposes of section 1102(b) of 

the Act, IHS defines a small rural 

hospital as a hospital that is located 

outside of a Metropolitan Statistical 

Area and has fewer than 100 beds. For 

the reasons provided above, IHS has 

determined that this rule will not have 

a significant impact on the operations of 

a substantial number of small rural 

hospitals. Section 202 of the Unfunded 

Mandates Reform Act of 1995 also 

requires that agencies assess anticipated 

costs and benefits before issuing any 

rule whose requirements mandate 

expenditure in any 1 year by State, 

local, or Tribal governments, in the 

aggregate, or by the private sector, of 

$120 million. This proposal would not 

impose substantial Federal mandates on 

State, local or Tribal governments or 

private sector. 

Executive Order 13132 establishes 

certain requirements that an Agency 

must meet when it promulgates a final 

rule that imposes substantial direct 

requirement costs on State and local 

governments, preempts State law, or 

otherwise has Federalism implications. 

It has been determined that this action 

would not have a substantial direct 

effect on the States, on the relationship 

between the national Government and 

the States, or on the distribution of 

power and responsibilities among the 

various levels of government, and 

therefore would not have Federalism 

implications. 

In accordance with the provisions of 

Executive Order 12866, this regulation 

was reviewed by the Office of 

Management and Budget. 

(Catalog of Federal Domestic Assistance 

Program No. 93.773, Medicare—Hospital 

Insurance) 

List of Subjects 

42 CFR Part 136 

American Indian, Alaska Natives, 

Health, Medicare. 

42 CFR Part 489 

Health facilities, Medicare, Reporting 

and recordkeeping requirements. 

Dated: November 2, 2006. 

Charles W. Grim, 

Assistant Surgeon General, Director, Indian 

Health Service. 

Dated: November 16, 2006. 

Leslie V. Norwalk, 

Acting Administrator, Centers for Medicare 

& Medicaid Services. 

Dated: April 18, 2007. 

Michael O. Leavitt, 

Secretary. 

■ The Indian Health Service is 

amending 42 CFR Chapter I as set forth 

below: 

PART 136—INDIAN HEALTH 

■ 1. The authority citation for part 136 

continues to read as follows: 

Authority: 25 U.S.C. 13; 42 U.S.C. 

1395cc(a)(1)(U), 42 U.S.C. 2001 and 2003, 

unless otherwise noted. 


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■ 2. Add new subpart D consisting of 

§§ 136.30 through 136.32, to read as 

follows: 

Subpart D—Limitation on Charges for 

Services Furnished by MedicareParticipating Hospitals to Indians 

Sec. 

136.30 Payment to Medicare-participating 

hospitals for authorized Contract Health 

Services. 

136.31 Authorization by urban Indian 

organization. 

136.32 Disallowance. 

Subpart D—Limitation on Charges for 

Services Furnished by MedicareParticipating Hospitals to Indians 

§ 136.30 Payment to Medicareparticipating hospitals for authorized 

Contract Health Services. 

(a) Scope. All Medicare-participating 

hospitals, which are defined for 

purposes of this subpart to include all 

departments and provider-based 

facilities of hospitals (as defined in 

sections 1861(e) and (f) of the Social 

Security Act) and critical access 

hospitals (as defined in section 

1861(mm)(1) of the Social Security Act), 

that furnish inpatient services must 

accept no more than the rates of 

payment under the methodology 

described in this section as payment in 

full for all items and services authorized 

by IHS, Tribal, and urban Indian 

organization entities, as described in 

paragraph (b) of this section. 

(b) Applicability. The payment 

methodology under this section applies 

to all levels of care furnished by a 

Medicare-participating hospital, 

whether provided as inpatient, 

outpatient, skilled nursing facility care, 

as other services of a department, 

subunit, distinct part, or other 

component of a hospital (including 

services furnished directly by the 

hospital or under arrangements) that is 

authorized under part 136, subpart C by 

a contract health service (CHS) program 

of the Indian Health Service (IHS); or 

authorized by a Tribe or Tribal 

organization carrying out a CHS 

program of the IHS under the Indian 

Self-Determination and Education 

Assistance Act, as amended, Pub. L. 93–

638, 25 U.S.C. 450 et seq.; or authorized 

for purchase under § 136.31 by an urban 

Indian organization (as that term is 

defined in 25 U.S.C. 1603(h)) (hereafter 

‘‘I/T/U’’). 

(c) Basic determination. (1) Payment 

for hospital services that the Medicare 

program would pay under a prospective 

payment system (PPS) will be based on 

that PPS. For example, payment for 

inpatient hospital services shall be 

made per discharge based on the 

applicable PPS used by the Medicare 

program to pay for similar hospital 

services under 42 CFR part 412. 

Payment for outpatient hospital services 

shall be made based on a PPS used in 

the Medicare program to pay for similar 

hospital services under 42 CFR part 419. 

Payment for skilled nursing facility 

(SNF) services shall be based on a PPS 

used in the Medicare program to pay for 

similar SNF services under 42 CFR part 

413. 

(2) For Medicare participating 

hospitals that furnish inpatient services 

but are exempt from PPS and receive 

reimbursement based on reasonable 

costs (for example, critical access 

hospitals (CAHs), children’s hospitals, 

cancer hospitals, and certain other 

hospitals reimbursed by Medicare under 

special arrangements), including 

provider subunits exempt from PPS, 

payment shall be made per discharge 

based on the reasonable cost methods 

established under 42 CFR part 413, 

except that the interim payment rate 

under 42 CFR part 413, subpart E shall 

constitute payment in full for 

authorized charges. 

(d) Other payments. In addition to the 

amount payable under paragraph (c)(1) 

of this section for authorized inpatient 

services, payments shall include an 

amount to cover: The organ acquisition 

costs incurred by hospitals with 

approved transplantation centers; direct 

medical education costs; units of blood 

clotting factor furnished to an eligible 

patient who is a hemophiliac; and the 

costs of qualified non-physician 

anesthetists, to the extent such costs 

would be payable if the services had 

been covered by Medicare. Payment 

under this subsection shall be made on 

a per discharge basis and will be based 

on standard payments established by 

the Centers for Medicare & Medicaid 

Services (CMS) or its fiscal 

intermediaries. 

(e) Basic payment calculation. The 

calculation of the payment by I/T/Us 

will be based on determinations made 

under paragraphs (c) and (d) of this 

section consistent with CMS 

instructions to its fiscal intermediaries 

at the time the claim is processed. 

Adjustments will be made to correct 

billing or claims processing errors, 

including when fraud is detected. 

I/T/Us shall pay the providing hospital 

the full PPS based rate, or the interim 

reasonable cost rate, without reduction 

for any co-payments, coinsurance, and 

deductibles required by the Medicare 

program from the patient. 

(f) Exceptions to payment calculation. 

Notwithstanding paragraph (e) of this 

section, if an amount has been 

negotiated with the hospital or its agent 

by the I/T/U, the I/T/U will pay the 

lesser of: The amount determined under 

paragraph (e) of this section or the 

amount negotiated with the hospital or 

its agent, including but not limited to 

capitated contracts or contracts per 

Federal law requirements; 

(g) Coordination of benefits and 

limitation on recovery. If an I/T/U has 

authorized payment for items and 

services provided to an individual who 

is eligible for benefits under Medicare, 

Medicaid, or another third party 

payor—

(1) The I/T/U shall be the payor of last 

resort under § 136.61; 

(2) If there are any third party payers, 

the I/T/U will pay the amount for which 

the patient is being held responsible 

after the provider of services has 

coordinated benefits and all other 

alternative resources have been 

considered and paid, including 

applicable co-payments, deductibles, 

and coinsurance that are owed by the 

patient; and 

(3) The maximum payment by the 

I/T/U will be only that portion of the 

payment amount determined under this 

section not covered by any other payor; 

and 

(4) The I/T/U payment will not 

exceed the rate calculated in accordance 

with paragraph (e) of this section or the 

contracted amount (plus applicable cost 

sharing), whichever is less; and 

(5) When payment is made by 

Medicaid it is considered payment in 

full and there will be no additional 

payment made by the I/T/U to the 

amount paid by Medicaid (except for 

applicable cost sharing). 

(h) Claims processing. For a hospital 

to be eligible for payment under this 

section, the hospital or its agent must 

submit the claim for authorized 

services—

(1) On a UB92 paper claim form (until 

abolished, or on an officially adopted 

successor form) or the HIPAA 837 

electronic claims format ANSI X12N, 

version 4010A1 (until abolished, or on 

an officially adopted successor form) 

and include the hospital’s Medicare 

provider number/National Provider 

Identifier; and 

(2) To the I/T/U, agent, or fiscal 

intermediary identified by the I/T/U in 

the agreement between the I/T/U and 

the hospital or in the authorization for 

services provided by the I/T/U; and 

(3) Within a time period equivalent to 

the timely filing period for Medicare 

claims under 42 CFR 424.44 and 

provisions of the Medicare Claims 

Processing Manual applicable to the 

type of item or service provided. 

(i) Authorized services. Payment shall 

be made only for those items and 


rmajette on PROD1PC64 with RULES
Federal Register / Vol. 72, No. 106 / Monday, June 4, 2007 / Rules and Regulations 30711 

services authorized by an I/T/U 

consistent with part 136 of this title or 

section 503(a) of the Indian Health Care 

Improvement Act (IHCIA), Public Law 

94–437, as amended, 25 U.S.C. 1653(a). 

(j) No additional charges. A payment 

made in accordance with this section 

shall constitute payment in full and the 

hospital or its agent may not impose any 

additional charge—

(1) On the individual for I/T/U 

authorized items and services; or 

(2) For information requested by the 

I/T/U or its agent or fiscal intermediary 

for the purposes of payment 

determinations or quality assurance. 

§ 136.31 Authorization by urban Indian 

organization. 

An urban Indian organization may 

authorize for purchase items and 

services for an eligible urban Indian (as 

those terms are defined in 25 U.S.C. 

1603(f) and (h)) according to section 503 

of the IHCIA and applicable regulations. 

Services and items furnished by 

Medicare-participating inpatient 

hospitals shall be subject to the payment 

methodology set forth in § 136.30. 

§ 136.32 Disallowance. 

(a) If it is determined that a hospital 

has submitted inaccurate information 

for payment, such as admission, 

discharge or billing data, an I/T/U may 

as appropriate—

(1) Deny payment (in whole or in 

part) with respect to any such services, 

and; 

(2) Disallow costs previously paid, 

including any payments made under 

any methodology authorized under this 

subpart. The recovery of payments made 

in error may be taken by any method 

authorized by law. 

(b) For cost based payments 

previously issued under this subpart, if 

it is determined that actual costs fall 

significantly below the computed rate 

actually paid, the computed rate may be 

retrospectively adjusted. The recovery 

of overpayments made as a result of the 

adjusted rate may be taken by any 

method authorized by law. 

■ The Centers for Medicare & Medicaid 

Services is amending 42 CFR Chapter 

IV, as set forth below: 

PART 489—PROVIDER AGREEMENTS 

AND SUPPLIER APPROVAL 

■ 3. The authority citation for part 489 

continues to read as follows: 

Authority: Sec. 1102 and 1871 of the Social 

Security Act (42 U.S.C. 1302 and 1395hh). 

Subpart B—Essentials of Provider 

Agreements 

■ 4. A new § 489.29 is added to subpart 

B to read as follows: 

§ 489.29 Special requirements concerning 

beneficiaries served by the Indian Health 

Service, Tribal health programs, and urban 

Indian organization health programs. 

(a) Hospitals (as defined in sections 

1861(e) and (f) of the Social Security 

Act) and critical access hospitals (as 

defined in section 1861(mm)(1) of the 

Social Security Act) that participate in 

the Medicare program and furnish 

inpatient hospital services must accept 

the payment methodology and no more 

than the rates of payment established 

under 42 CFR part 136, subpart D as 

payment in full for the following 

programs: 

(1) A contract health service (CHS) 

program under 42 CFR part 136, subpart 

C, of the Indian Health Service (IHS); 

(2) A CHS program under 42 CFR part 

136, subpart C, carried out by an Indian 

Tribe or Tribal organization pursuant to 

the Indian Self-Determination and 

Education Assistance Act, as amended, 

Public Law 93–638, 25 U.S.C. 450 et 

seq.; and 

(3) A program funded through a grant 

or contract by the IHS and operated by 

an urban Indian organization under 

which items and services are purchased 

for an eligible urban Indian (as those 

terms are defined in 25 U.S.C. 1603 (f) 

and (h)). 

(b) Hospitals and critical access 

hospitals may not refuse service to an 

individual on the basis that the payment 

for such service is authorized under 

programs described in paragraph (a) of 

this section. 

[FR Doc. 07–2740 Filed 6–1–07; 8:45 am] 

BILLING CODE 4165–16–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 300 

[Docket No. 070215036–7107–02; I.D. 

012307A] 

RIN 0648–AU79 

International Fisheries; Pacific Tuna 

Fisheries; Restrictions for 2007 Purse 

Seine and Longline Fisheries in the 

Eastern Tropical Pacific Ocean 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Department of Commerce. 

ACTION: Final rule. 

SUMMARY: NMFS publishes this final 

rule to implement the 2007 management 

measures to reduce overfishing of the 

eastern tropical Pacific Ocean (ETP) 

tuna stocks in 2007, consistent with 

recommendations by the Inter-American 

Tropical Tuna Commission (IATTC) that 

have been approved by the Department 

of State (DOS) under the Tuna 

Conventions Act. The U.S. purse seine 

fishery for yellowfin, bigeye, and 

skipjack tunas in the ETP will be closed 

for a 6–week period beginning August 1, 

2007, through September 11, 2007. The 

longline fishery for bigeye tuna will 

close when a 500 metric ton (mt) limit 

has been reached. These actions are 

taken to limit fishing mortality caused 

by purse seine fishing and longline 

fishing in the ETP and contribute to 

long-term conservation of the tuna 

stocks at levels that support healthy 

fisheries. 

DATES: The 2007 purse seine fishery 

closure for yellowfin, bigeye, and 

skipjack tunas is effective on 12:00 a.m. 

Pacific Time, August 1, 2007, through 

11:59 p.m. Pacific Time, September 11, 

2007. For 2007, NMFS will close the 

bigeye longline fishery through 

appropriate procedures to ensure that 

the bigeye longline tuna catch does not 

exceed 500 mt. 

ADDRESSES: Copies of the regulatory 

impact review/final regulatory 

flexibility analysis (FRFA) may be 

obtained from the Southwest Regional 

Administrator, Southwest Region, 

NMFS, 501 West Ocean Boulevard, 

Suite 4200, Long Beach, CA 90802–

4213. 

FOR FURTHER INFORMATION CONTACT: J. 

Allison Routt, Sustainable Fisheries 

Division, Southwest Region, NMFS, 

(562) 980–4030. 

This Federal Register document is 

also accessible via the Internet at the 

Office of the Federal Register’s website 

at http://www.gpoaccess.gov/ 

SUPPLEMENTARY INFORMATION: The 

United States is a member of the IATTC, 

which was established by international 

agreement through the Convention for 

the Establishment of an Inter-American 

Tropical Tuna Commission 

(Convention), which was signed in 

1949. The IATTC was established to 

ensure the effective international 

conservation and management of highly 

migratory species of fish in the ETP. For 

the purposes of these closures, the ETP 

is defined to include the waters 

bounded by the coast of the Americas, 

the 40° N. and 40° S. parallels, and the 

150° W. meridian. The IATTC has 

maintained a scientific research and 


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