Federal Register / Vol. 77, No. 123 / Tuesday, June 26, 2012 / Notices 38067 

performance period that began on April 

1, 2012. We announced the 

organizations participating in the 

Advanced Payment Model for the first 

performance period (which began on 

April 1, 2012) on April 10, 2012. The 

second performance period of the 

Advance Payment Model will begin on 

July 1, 2012. 

Additional information about the 

Advance Payment Model, including 

organizations currently participating in 

the testing of the Model, is available on 

the Advance Payment Model Web site at 

http://www.innovations.cms.gov/ 

initiatives/ACO/Advance-Payment/. 

II. Provisions of the Notice 

We will be launching a third group of 

Advance Payment Model ACOs on 

January 1, 2013. We will accept 

applications as specified in the DATES

section of this notice. We are creating 

this new opportunity in response to 

requests from stakeholders and potential 

partners who requested additional 

opportunities to partner with CMS as 

Advance Payment ACOs. 

Organizations interested in applying 

to the Advance Payment Model must 

also complete an application for the 

Shared Savings Program. Information 

about the application process and 

deadlines for the Shared Savings 

Program is available at http:// 

www.cms.gov/sharedsavingsprogram. 

Additional information about the 

application process for the Advance 

Payment Model is available on the 

Advance Payment Model Web site at 

http://www.innovations.cms.gov/ 

initiatives/ACO/Advance-Payment/. 

Authority: Section 1115A of the Social 

Security Act. 

Dated: June 19, 2012. 

Marilyn Tavenner, 

Acting Administrator, Centers for Medicare 

& Medicaid Services. 

[FR Doc. 2012–15541 Filed 6–22–12; 11:15 am] 

BILLING CODE 4120–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

[CMS–1445–N] 

Medicare Program; Public Meeting 

Regarding Inherent Reasonableness of 

Medicare Fee Schedule Amounts for 

Non-Mail Order (Retail) Diabetic 

Testing Supplies 

ACTION: Notice of meeting. 

SUMMARY: This notice announces a 

public meeting that provides an 

opportunity for CMS to consult with 

representatives of suppliers and other 

interested parties regarding options to 

adjust the Medicare payment amounts 

for non-mail order diabetic testing 

supplies. This meeting will provide the 

public an opportunity to offer oral and 

written comments. 

DATES: Meeting Date: The public 

meeting will be held on Monday, July 

23, 2012, 9 a.m. to 1 p.m. eastern 

daylight time (e.d.t.). 

Deadline for Attendees that are 

Foreign Nationals (reside outside the 

U.S.) Registration: Prospective attendees 

that are foreign nationals (as described 

in section V. of this notice) are required 

to identify themselves as such, and 

provide the necessary information for 

security clearance (as described in 

section V. of this notice) by 5 p.m. e.d.t. 

Thursday, July 5, 2012. 

Deadline for All Other Attendees: All 

other individuals who plan to attend the 

public meeting must register by 5 p.m. 

e.d.t. Monday, July 16, 2012. 

Deadline for Requesting Special 

Accommodations: Persons attending the 

meeting who are hearing or visually 

impaired, or have a condition that 

requires special assistance or 

accommodations, are asked to contact 

the persons as specified in the FOR

FURTHER INFORMATION CONTACT section of 

this notice no later July 9, 2012, 5 p.m., 

e.d.t. 

Deadline for Submission of Written 

Comments: Written comments must be 

received at the address specified in the 

ADDRESSES section of this notice by 5 

p.m. e.d.t., Monday, July 30, 2012. Once 

submitted, all comments are final. 

ADDRESSES: Meeting Location: The 

public meeting will be held in the main 

auditorium of the central building of the 

Centers for Medicare and Medicaid 

Services, 7500 Security Boulevard, 

Baltimore, MD 21244–1850. 

Submission of Written Comments: 

Written comments may either be 

emailed to DMEPOS@cms.hhs.gov or 

sent via regular mail to Elliot Klein, 

Centers for Medicare & Medicaid 

Services, 7500 Security Boulevard, Mail 

Stop C5–03–17, Baltimore, MD 21244– 

1850. 

Registration and Special 

Accommodations: Individuals wishing 

to participate or who need special 

accommodations or both must register 

by completing the on-line registration 

located at http://www.cms.gov/apps/ 

events/upcomingevents.asp or by 

contacting one of the persons listed in 

the FOR FURTHER INFORMATION CONTACT

section of this notice. 

FOR FURTHER INFORMATION CONTACT: 

Hafsa Vahora at (410) 786–7899 or 

Hafsa.Vahora@cms.hhs.gov 

Elliot Klein at (410) 786–0415 or 

Elliot.Klein@cms.hhs.gov 

SUPPLEMENTARY INFORMATION: 

I. Background 

A. Process for Using Inherent 

Reasonableness Authority 

In the December 13, 2005 Federal 

Register (70 FR 73623), we published a 

final rule entitled ‘‘Medicare Program; 

Application of Inherent Reasonableness 

Payment Policy to Medicare Part B 

Services (Other Than Physician 

Services)’’ that finalized a process for 

establishing a realistic and equitable 

payment amount for Medicare Part B 

services (other than physicians’ 

services) when the existing payment 

amounts are inherently unreasonable 

because they are either grossly excessive 

or grossly deficient. In that December 

2005 final rule, we define grossly 

excessive and deficient payment 

amounts and provide the criteria for 

using valid and reliable data in making 

an inherent reasonableness 

determination. 

Sections 1842(b)(8) and (9) of the Act 

and our regulations at 42 CFR 

405.502(g) and (h) set forth the steps 

that the Secretary must follow in 

determining whether a payment amount 

is grossly excessive and in setting a 

special payment limit. Those steps are 

as follows: 

• Factors Considered In Determining 

Whether Payment Amount is Grossly 

Excessive or Deficient. When making a 

determination that a payment amount is 

grossly excessive, we take into account 

several factors. Factors that may result 

in grossly excessive or deficient 

payment amounts include, but are not 

limited, to the following: 

++ The marketplace is not 

competitive. 

++ Medicare and Medicaid are the 

sole or primary sources of payment for 

a category of items and services. 

++ The payment amounts for a 

category of items and services do not 

reflect changing technology, increased 

facility with that technology, or changes 

in acquisition, production, or supplier 

costs. 

++ The payment amounts for a 

category of items or services in a 

particular locality are grossly high or 

lower than payment amounts in other 

comparable localities for the category of 

items or services. 

++ Payment amounts for a category of 

items and services are grossly higher or 

lower than acquisition or production 


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38068 Federal Register / Vol. 77, No. 123 / Tuesday, June 26, 2012 / Notices 

costs for the category of items and 

services. 

++ There have been increases in 

payment amounts for a category of items 

or services that cannot be explained by 

inflation or technology. 

++ The payment amounts for an item 

or service are grossly higher or lower 

than the payment amounts made for the 

item or service by other purchasers in 

the same locality. 

++ A new technology exists which is 

not reflected in the existing payment 

allowances. 

• Factors Considered in Establishing 

a Payment Limit. In establishing a 

payment limit for a category of items or 

services, we consider the available 

information that is relevant to the 

category of items or services and 

establish a payment amount that is 

realistic and equitable. The factors we 

consider in setting a payment include, 

but are not limited to the following: 

++ Price markup. 

++ Differences in charges. 

++ Costs. 

++ Use. 

++ Payment amounts in other 

localities. 

• Use of Valid and Reliable Data. In 

determining whether a payment amount 

is grossly excessive or deficient and in 

establishing an appropriate payment 

amount, we use valid and reliable data. 

To ensure that valid and reliable data 

are used, we must meet the criteria set 

forth at 42 CFR 405.502(g)(4)(i) through 

(xi), to the extent applicable. 

• Impact Analysis. We consider the 

potential impact of the payment 

adjustments on quality, access, 

beneficiary liability, assignment rates, 

and participation of suppliers. 

• Supplier Consultation. Before 

making a determination that a payment 

amount is not inherently reasonable, we 

consult with representatives of the 

supplier industry likely to be affected by 

the change in payment amounts. 

• Publication of Proposed 

Determination. We publish a proposed 

notice in the Federal Register that— 

++ Provides the proposed payment 

amount or method proposed to be 

established with respect to the item or 

service; 

++ Explains the factors and data 

considered in determining that the 

payment amount was grossly excessive 

or deficient; 

++ Explains the factors and data 

considered in determining the payment 

amounts or methodology, including the 

economic justification for a uniform fee 

or payment limit if it is proposed; 

++ Explains the potential impact of 

the payment adjustments and; 

++ Allows at least 60 days for public 

comment. 

• Publication of Final Determination. 

We publish a final notice in the Federal 

Register containing our final 

determination with respect to the 

payment amount to be established for 

the item or service, explaining the 

factors and data considered in making 

the final determination, and responding 

to public comments. 

B. Mandate To Phase In Competitive 

Bidding Programs for Diabetic Testing 

Supplies 

Sections 1847(a)(1)(A) and (a)(2)(A) of 

the Act mandate the implementation of 

competitive bidding programs for 

durable medical equipment (DME) and 

medical supplies, including diabetic 

testing supplies. Under these programs, 

contracts are to be awarded to suppliers 

for furnishing DME and medical 

supplies throughout the United States at 

reduced payment amounts. Diabetic 

testing supplies are supplies necessary 

for the effective use of durable blood 

glucose monitors and include test strips, 

lancets, spring-powered lancet devices, 

calibration solution/chips, and 

replacement batteries. In 2011, annual 

Medicare Part B allowed charges for 

these items were approximately $1.6 

billion, of which approximately $552 

million (over one-third) was attributed 

to claims for non-mail order items. 

Section 1847(a)(1)(B)(ii) of the Act 

provides authority for phasing in items 

and services under the competitive 

bidding programs, starting with the 

highest cost and highest volume items 

and services or those items and services 

determined to have the largest savings 

potential. The majority of Medicare 

beneficiaries receive their diabetic 

testing supplies on a mail order basis, 

and the competitive bidding program 

was phased in first for supplies 

furnished via this delivery method as 

part of the Round One Rebid of the 

competitive bidding program. In 2011, 

Medicare-allowed payment amounts for 

a box of 50 mail order test strips were 

reduced by 55 percent on average in 9 

local metropolitan areas as a result of 

these programs. 

TABLE 1—COMPARISON OF 2011 FEE SCHEDULE AMOUNTS (NON-MAIL ORDER AND MAIL ORDER) AND MAIL ORDER

COMPETITIVE BIDDING AMOUNTS

Local competitive bidding area 

Fee schedule 

amount (nonmail) 

Fee schedule 

amount (mail) 

Competitive 

bidding 

amount 

Charlotte-Gastonia-Concord, NC–SC .......................................................................................... $34.85 30.03 14.50 

Cincinnati-Middletown, OH .......................................................................................................... 38.74 33.39 15.22 

Cleveland-Elyria-Mentor, OH ....................................................................................................... 38.74 33.39 15.62 

Dallas-Fort Worth-Arlington, TX .................................................................................................. 36.24 31.24 14.25 

Kansas City, MO–KS ................................................................................................................... 34.35 29.60 13.94 

Miami-Fort Lauderdale-Pompano Beach, FL .............................................................................. 38.75 33.40 15.20 

Orlando, FL .................................................................................................................................. 38.75 33.40 14.50 

Pittsburgh, PA .............................................................................................................................. 38.75 33.40 14.50 

Riverside-San Bernardino-Ontario, CA ....................................................................................... 38.75 33.40 13.88 

Average of Nine Areas ................................................................................................................ 37.55 32.36 14.62 

National Average ......................................................................................................................... 37.67 32.47 ........................

A national DMEPOS competitive 

bidding program for mail order diabetic 

testing supplies is scheduled to take 

effect in 2013. For this competition, and 

future competitions for diabetic testing 

supplies, the definitions of mail order 

item and non-mail order item set forth 

in 42 CFR 414.402 will be used to 

determine what items will be included 

in the competitions. These definitions 

are as follows: 

• Mail Order Item—Any item shipped 

or delivered to the beneficiary’s home, 

regardless of the method of delivery. 

• Non-Mail Order Item—Any item 

that a beneficiary or caregiver picks up 


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Federal Register / Vol. 77, No. 123 / Tuesday, June 26, 2012 / Notices 38069 

in person at a local pharmacy or 

supplier storefront. 

Because annual allowed charges for 

non-mail order diabetic testing supplies 

are approximately $552 million, this 

category of items and services 

represents the highest volume category 

of items or services yet to be phased in 

under the DMEPOS competitive bidding 

programs. Also, based on the results of 

the competition for mail order diabetic 

testing supplies in nine Competitive 

Bidding Areas (CBAs) and a review of 

other pricing information for diabetic 

testing supplies in general, we believe 

the savings potential for non-mail order 

diabetic testing supplies is significant. 

Although we recognize that there are 

pricing differences between mail order 

and non-mail order diabetic testing 

supplies because of the delivery 

methods for these supplies, information 

about the prices of mail order diabetic 

testing supplies can inform the analysis 

of prices for non-mail order diabetic 

testing supplies because several key cost 

components are identical for both, such 

as product acquisition costs and 

administrative costs, including claims 

processing and paperwork costs. In 

addition to the significant program and 

beneficiary savings that can be 

generated by lowering the payment 

amounts for non-mail order diabetic 

testing supplies, adjusting the payment 

amounts for these items to bring them 

more in line with the allowed payment 

amounts for mail order diabetic testing 

supplies is important for a number of 

reasons, including the fact that 

maintaining a significant discrepancy 

between what Medicare pays for mail 

order supplies versus non-mail order 

supplies may encourage fraud and abuse 

such as billing for mail order supplies 

as if they were furnished on a non-mail 

order basis. The discrepancy also 

penalizes beneficiaries who choose to 

obtain their supplies on a non-mail 

order basis in the form of significantly 

higher coinsurance payments. 

C. Use of Inherent Reasonableness 

Authority To Delay Phase-In of Items 

Under Competitive Bidding 

Rather than phasing in non-mail order 

diabetic testing supplies under the 

competitive bidding program at this 

time, we are considering an alternative 

for adjusting the payment amounts for 

non-mail order diabetic testing supplies 

in the short term using information 

obtained from the local Round One 

Rebid competitions for mail order 

supplies and other pricing information 

to establish special payment limits for 

non-mail order diabetic testing supplies. 

We believe that this alternative would 

allow beneficiaries the greatest degree of 

choice in deciding where to obtain their 

non-mail order diabetic testing supplies 

as suppliers would not have to be 

awarded contracts to continue 

furnishing these items to Medicare 

beneficiaries. It also has the potential to 

reduce the significant discrepancy in 

payment amounts between mail order 

and non-mail order diabetic testing 

supplies and generate beneficiary and 

program savings sooner than could be 

achieved through competitive bidding. 

National reductions to the fee schedule 

amounts would reduce the savings 

potential that could result from 

application of competitive bidding. This 

would alter the standing of non-mail 

order diabetic testing supplies relative 

to other items in terms of level of 

priority for phase-in under the 

competitive bidding program. It is also 

possible that use of the inherent 

reasonableness authority over time to 

establish special payment limits for 

non-mail order diabetic testing supplies 

could mean that including these items 

under the competitive bidding program 

will not be necessary as significant 

savings would not be achieved. 

Because information generated from 

the local Round One Rebid competitions 

for mail order diabetic testing supplies 

and information about the cost of 

diabetic testing supplies is available, we 

believe we have the information 

necessary to determine whether 

payment amounts for non-mail order 

diabetic testing supplies are grossly 

excessive and should be adjusted using 

our inherent reasonableness authority. 

Use of the inherent reasonableness 

authority would delay or eliminate the 

need to have local pharmacies compete 

and win contracts in order to continue 

furnishing non-mail order diabetic 

testing supplies to Medicare 

beneficiaries, thereby maintaining the 

option of obtaining these items from any 

local, enrolled Medicare supplier. 

Again, given the high volume of 

expenditures for these items, 

competitive bidding for these items 

would need to be implemented in the 

near future if the savings potential for 

these items is not lowered through use 

of the inherent reasonableness 

authority. 

II. Meeting Agenda 

The tentative agenda is as follows: 

• Sign In 

• Opening Remarks 

• CMS Presentation Regarding Payment 

for Non-Mail Order Diabetic Testing 

Supplies 

++ Mandate for Competitive Bidding 

++ Establishing Special Payment Limits 

as a Means of Delaying Competitive 

Bidding for These Items 

++ Steps of the Inherent Reasonableness 

Process 

• Public Comments 

• Closing Remarks 

III. Meeting Registration 

A. Required Information for Registration 

The following information must be 

provided when registering: 

• Name. 

• Company name and address. 

• Direct-dial telephone and fax 

numbers. 

• Email address. 

• Special needs information. 

A CMS staff member will confirm 

your registration by email. 

B. Registration Process 

All comments will be heard and 

accepted after the presentation by CMS 

staff is completed until the end of the 

public meeting. If there are comments 

after the meeting, we will accept written 

comments until the date specified in the 

DATES section of this notice. 

C. Additional Meeting/Registration 

Information 

This public meeting is scheduled in 

order to fulfill the requirement of 

section 1842(b)(9)(A) of the Act to 

consult with representatives of 

suppliers or other individuals who 

furnish an item or service before making 

a determination under section 

1842(b)(8)(B) of the Act with regard to 

that item or service. 

IV. Comment Format 

A. Oral Comments From Meeting 

Attendees 

Oral comments will be heard from the 

meeting attendees during the allotted 

time during the public meeting. 

Comments should last no longer than 10 

minutes each to allow as much 

opportunity for comments from as many 

interested individuals as possible. There 

will be a sign up during the meeting to 

accommodate oral comments and 

speakers will be called in the order in 

which they sign up. We encourage 

anyone providing oral comments to also 

submit their comments in writing. 

B. Written Comments From Meeting 

Attendees 

Written comments will be accepted 

from the general public and meeting 

registrants until the date specified in the 

DATES section. Comments must be sent 

to the address specified in the 

ADDRESSES section of this notice. 

Meeting attendees may also submit their 

written comments at the meeting. 


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38070 Federal Register / Vol. 77, No. 123 / Tuesday, June 26, 2012 / Notices 

C. Summary Comments and Responses 

From Public Meeting 

The summarized comments and 

responses from the public meeting will 

be provided in the proposed notice for 

the adjustment of fee-schedule amounts 

for non-mail order diabetic testing 

supplies. 

V. Security, Building, and Parking 

Guidelines 

The meeting is held within the CMS 

Complex which is not open to the 

general public. Visitors to the complex 

are required to show a valid U.S. 

Government issued photo identification, 

preferably a driver’s license, at the time 

of entry. Participants will also be subject 

to a vehicular search before access to the 

complex is granted. Participants not in 

possession of a valid identification or 

who are in possession of prohibited 

items will be denied access to the 

complex. Prohibited items on Federal 

Property include but are not limited to, 

alcoholic beverages, illegal narcotics, 

dogs or other animals except Seeing Eye 

dogs and other dogs trained to assist the 

handicapped, explosives, firearms or 

other dangerous weapons (including 

pocket knives). 

Once cleared for entry to the complex 

participants will be directed to parking 

by a security officer. In order to ensure 

expedited entry into the building it is 

recommended that participants have 

their ID and a copy of their written 

meeting registration confirmation 

readily available and that they do not 

bring laptops or large/bulky items into 

the building. Participants are reminded 

that photography on the CMS complex 

is prohibited. CMS has also been 

declared a tobacco free campus and 

violators are subject to legal action. 

In planning arrival time, we 

recommend allowing additional time to 

clear security. Individuals who are not 

registered in advance will not be 

permitted to enter the building and will 

be unable to attend the meeting. The 

public may not enter the building earlier 

than 45 minutes before the convening of 

the meeting. Guest access to the 

complex is limited to the meeting area, 

the main lobby, and the cafeteria. If a 

visitor is found outside of those areas 

without proper escort they may be 

escorted out of the facility. 

Also be mindful that there will be an 

opportunity for comment and we 

request that everyone waits for the 

appropriate time to present their 

opinions. Disruptive behavior will not 

be tolerated and may result in removal 

from the meetings and escort from the 

complex. No visitor is allowed to attach 

USB cables, thumb drives or any other 

equipment to any CMS information 

technology (IT) system or hardware for 

any purpose at anytime. Additionally, 

CMS staff is prohibited from taking such 

actions on behalf of a visitor or utilizing 

any removable media provided by a 

visitor. 

We cannot assume responsibility for 

coordinating the receipt, transfer, 

transport, storage, set-up, safety, or 

timely arrival of any personal 

belongings or items used for 

demonstration or to support a comment. 

Special arrangements and approvals are 

required at least 2 weeks prior to the 

public meeting in order to bring pieces 

of equipment or medical devices. These 

arrangements need to be made with the 

public meeting coordinator. It is 

possible that certain requests made in 

advance of the public meeting could be 

denied because of unique safety, 

security or handling issues related to the 

equipment. A minimum of 2 weeks is 

required for approvals and security 

procedures. Any request not submitted 

at least 2 weeks in advance of the public 

meeting will be denied. 

CMS policy requires that every 

foreign visitor is assigned a host. The 

host/hosting official is required to 

inform the Division of Critical 

Infrastructure Protection (DCIP) at least 

12 business days in advance of any visit 

by a foreign national visitor. Foreign 

National visitors will be required to 

produce a valid passport at the time of 

entry. Attendees that are Foreign 

Nationals need to identify themselves as 

such, and provide the following 

information for security clearance to the 

public meeting coordinator by the date 

specified in the DATES section of this 

notice: 

• Visitor’s full name (as it appears on 

passport). 

• Gender. 

• Country of origin and citizenship. 

• Biographical data and related 

information. 

• Date of birth. 

• Place of birth. 

• Passport number. 

• Passport issue date. 

• Passport expiration date. 

• Dates of visits. 

• Company name. 

• Position/Title. 

Meeting participants should arrive 

early to allow time to clear security and 

sign-in. The meeting is expected to 

begin promptly as scheduled. 

Authority: Section 1842(b)(9) of the Act. 

Dated: June 19, 2012. 

Marilyn Tavenner, 

Acting Administrator, Centers for Medicare 

& Medicaid Services. 

[FR Doc. 2012–15425 Filed 6–22–12; 4:15 pm] 

BILLING CODE 4120–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Administration for Children and 

Families 

[CFDA Number 93.676] 

Office of Refugee Resettlement; 

Announcing the Award of a SingleSource Program Expansion 

Supplemental Grant for 

Unaccompanied Alien Children’s 

Shelter Care to Baptist Children and 

Family Services (BCFS) in San 

Antonio, TX 

AGENCY: Office of Refugee Resettlement, 

ACF, HHS. 

ACTION: The Office of Refugee 

Resettlement announces the award of a 

single-source program expansion 

supplement grant from its 

Unaccompanied Alien Children’s 

Program. 

SUMMARY: The Administration for 

Children and Families (ACF), Office of 

Refugee Resettlement (ORR) announces 

the award of a single-source program 

expansion supplement grant to Baptist 

Children and Family Services (BCFS) in 

San Antonio, TX, for a total of 

$22,725,223. The additional funding 

provided by the awards will support 

services to refugees through September 

30, 2012. 

DATES: Project Period: October 1, 2011— 

September 30, 2012. 

FOR FURTHER INFORMATION CONTACT: 

Kenneth Tota, Deputy Director, Office of 

Refugee Resettlement, Administration 

for Children and Families, 370 L’Enfant 

Promenade SW., Washington, DC 20447, 

Telephone (202) 401–4858. 

SUPPLEMENTARY INFORMATION: The 

supplement grant will support the 

expansion of bed capacity to meet the 

number of unaccompanied alien 

children referrals from the Department 

of Homeland Security (DHS). The 

funding program is mandated by 

Section 462 of the Homeland Security 

Act to ensure appropriate placement of 

all referrals from the DHS. The program 

is tied to DHS apprehension strategies 

and sporadic number of border crossers. 

The program has specific 

requirements for the provision of 

services to unaccompanied alien 

children. Existing grantees are the only 

entities with the infrastructure, 

licensing, experience and appropriate 

level of trained staff to meet the 

required service requirements and the 

urgent need for expansion of services in 

response to unexpected arrivals of 

unaccompanied children. The program 

expansion supplement will support 


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