Federal Register / Vol. 77, No. 77 / Friday, April 20, 2012 / Rules and Regulations 23615 

TABLE TO § 165.171—Continued 

• Location: In the vicinity of Eliot Town Boat Launch, Eliot, Maine in 

approximate position: 

43°08′56′′ N, 070°49′52′′ W (NAD 83). 

Dated: March 30, 2012. 

C.L. Roberge, 

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

Port Sector Northern New England. 

[FR Doc. 2012–9519 Filed 4–19–12; 8:45 am] 

BILLING CODE 9110–04–P 

DEPARTMENT OF VETERANS 

AFFAIRS 

38 CFR Part 17 

RIN 2900–AN86 

Payment or Reimbursement for 

Emergency Services for NonserviceConnected Conditions in Non-VA 

Facilities 

AGENCY: Department of Veterans Affairs. 

ACTION: Final rule. 

SUMMARY: This document amends the 

Department of Veterans Affairs (VA) 

‘‘Payment or Reimbursement for 

Emergency Services for NonserviceConnected Conditions in Non-VA 

Facilities’’ regulations to conform with 

a statutory change that expanded 

veterans’ eligibility for reimbursement. 

Some of the revisions in this final rule 

are purely technical, matching the 

language of our regulations to the 

language of the revised statute, while 

others set out VA’s policies regarding 

the implementation of statutory 

requirements. This final rule expands 

the qualifications for payment or 

reimbursement to veterans who receive 

emergency services in non-VA facilities, 

and establishes accompanying standards 

for the method and amount of payment 

or reimbursement. 

DATES: This final rule is effective May 

21, 2012. 

FOR FURTHER INFORMATION CONTACT: Lisa 

Brown, Division Chief, Policy 

Management Department, Purchased 

Care at the Veterans Health 

Administration Center, Department of 

Veterans Affairs, 3773 Cherry Creek Dr. 

N. East Tower, Suite 485, Denver, CO 

80209, (303) 331–7829. (This is not a 

toll-free number). 

SUPPLEMENTARY INFORMATION: On 

February 1, 2010, Congress enacted 

Public Law 111–137 (2010 Act), which 

amended 38 U.S.C. 1725 by expanding 

veteran eligibility for reimbursement for 

emergency treatment furnished in a 

non-VA facility. Current VA regulations 

implement section 1725 in 38 CFR 

17.1000 through 17.1008 under the 

undesignated heading ‘‘Payment or 

Reimbursement for Emergency Services 

for Nonservice-Connected Conditions in 

Non-VA Facilities.’’ This final rule 

revises §§ 17.1001, 17.1002, 17.1004, 

and 17.1005. These revisions eliminate 

certain exclusions from emergency care 

payment or reimbursement, and define 

the payment limitations for those 

qualifying for payment or 

reimbursement under the law as 

amended by the 2010 Act. 

The 2010 Act amended 38 U.S.C. 

1725(f)(2) by removing a provision that 

included automobile insurance in the 

definition of ‘‘health-plan contract.’’ 

Under 38 U.S.C. 1725(b)(3)(B), veterans 

who are covered by a health-plan 

contract are ineligible for VA payment 

or reimbursement. Thus, we are 

removing current 38 CFR 17.1001(a)(5), 

which includes automobile insurance in 

the definition of ‘‘health-plan contract.’’ 

This amendment will implement VA’s 

authority to pay or reimburse claimants 

for providing emergency services to a 

veteran if the veteran received, or is 

legally eligible to receive, partial 

payment towards emergency services 

from an automobile insurer. 

The 2010 Act also amended 38 U.S.C. 

1725 by revising a provision that 

precluded certain claimants from 

payment or reimbursement by VA for 

emergency care at non-VA facilities. 

Parties who qualified as claimants 

under section 1725 prior to the 2010 Act 

(as implemented by VA in current 38 

CFR 17.1004(a)) included veterans, the 

provider of the emergency treatment, or 

the person or organization that paid for 

such treatment on behalf of the veteran. 

Under the 2010 Act, claimants who are 

entitled to partial payment from a third 

party for providing non-VA emergency 

services to a veteran are no longer 

barred from also receiving VA payment 

or reimbursement for such care. Prior to 

the 2010 Act, section 1725(b)(3)(C) 

required that VA deny any claim in 

which a veteran has ‘‘other contractual 

or legal recourse against a third party 

that would, in whole or in part, 

extinguish such liability to the 

provider.’’ The 2010 Act removed ‘‘or in 

part’’ from this exclusion. In order to 

remove this partial payment exclusion 

from VA regulations, we are removing 

the clause ‘‘or in part’’ from § 17.1002(g) 

to parallel the language in current 38 

U.S.C. 1725. 

In addition, the 2010 Act authorized, 

but did not require, VA to provide 

repayment under section 1725 ‘‘for 

emergency treatment furnished to a 

veteran before the date of the enactment 

of the [2010] Act, if the Secretary 

determines that, under the 

circumstances applicable with respect 

to the veteran, it is appropriate to do 

so.’’ We interpret this provision to allow 

VA, through regulation, to provide 

retroactive reimbursement, and we are 

implementing this authority in new 

§ 17.1004(f). 

In a document published in the 

Federal Register on May 26, 2011 (76 

FR 30598), VA proposed to amend the 

regulations that govern the payment or 

reimbursement for emergency services 

for nonservice-connected conditions in 

non-VA facilities. We provided a 60 day 

comment period, which ended on July 

25, 2011. We received three comments 

from the general public. 

In the proposed rule, we stated that 

§ 17.1005 would be amended by adding 

new paragraphs (c) and (d). However, on 

December 21, 2011 (76 FR 79071), VA 

published an entirely separate final rule 

that added new paragraphs (c) and (d) 

to § 17.1005. Accordingly, in this final 

rule we are renumbering proposed 

§ 17.1005(c) as new § 17.1005(e), and we 

are also renumbering proposed 

§ 17.1005(d) as new § 17.1005(f). None 

of the comments received on the 

proposed rulemaking for this final rule 

addressed these paragraphs, so the 

discussion below is not affected by this 

change. 

One commenter applauded VA for 

‘‘taking steps to change the 

reimbursement policies.’’ The 

commenter further believes that ‘‘it is 

only fair that the VA reimburse’’ 

veterans for the emergency care they 

receive in non-VA hospitals, especially 

when the non-VA hospitals are ‘‘better 

equipped to handle the injury.’’ We 

appreciate the supportive comment on 

this rulemaking, and thank the 

commenter. 

A second commenter commended VA 

for the proposed regulation stating that 

the regulation is ‘‘in the best interest of 

the local health care provider, the 

veteran, and possibly the veteran’s 

administration.’’ We thank the 

commenter for taking the time to 


tkelley on DSK3SPTVN1PROD with RULES
23616 Federal Register / Vol. 77, No. 77 / Friday, April 20, 2012 / Rules and Regulations 

comment and for the commenter’s 

support of this rulemaking. 

Another commenter identified 

perceived inconsistencies between 38 

U.S.C. 1725(c)(2) and 1725(d). The 

commenter stated that section 1725(c)(2) 

contains ‘‘a prerequisite to VA payments 

that the veteran or the provider of 

emergency treatment exhaust without 

success all reasonably available claims 

and remedies available against a third 

party for payment.’’ The commenter 

then noted that, in section 1725(d), VA 

is given ‘‘[a]n independent right to 

recover amounts paid for such treatment 

when a third party subsequently makes 

payment for the same treatment 

([paragraph] (1)), a lien against any 

amounts recovered when a third party 

subsequently makes payment for the 

same treatment ([paragraph] (3)), and 

the right to notice of any subsequent 

payment by a third party for the same 

treatment ([paragraph] (4)).’’ The 

commenter explained that the apparent 

inconsistencies between subsection (c) 

‘‘requiring exhaustion of remedies prior 

to reimbursement’’ and subsection (d) 

‘‘talking about [the] right to recover 

subsequent third party payment, liens 

on subsequent third part[y] payments 

and [the] right to notice of third party 

payments’’ can be resolved by 

‘‘understanding the condition precedent 

to VA payment being that the veteran 

make a demand for payment from the 

third party for the cost of the emergency 

medical treatment.’’ The commenter 

concluded that subsection (d) should 

come into play after a ‘‘rejection of the 

demand or an offer to pay some but not 

all of the reasonable and necessary 

emergency medical treatment.’’ In order 

to effectively address these perceived 

inconsistencies, the commenter 

suggested changes to the regulation text 

that were not addressed in the proposed 

rulemaking. 

The stated intent of one of the 

suggested changes would be to allow ‘‘a 

demand for payment [to] satisf[y] the 

exhaustion of remedies requirement.’’ 

The commenter suggested adding a new 

paragraph (d)(3) to § 17.1004 as a 

condition to receive payment or 

reimbursement for emergency services 

to state: ‘‘The date the veteran filed a 

demand for payment without complete 

success, against a third party, for 

payment of such treatment.’’ Current 

§ 17.1004(d)(4) states: ‘‘The date the 

veteran finally exhausted, without 

success, action to obtain payment or 

reimbursement for the treatment from a 

third party.’’ By requiring merely that 

the veteran ‘‘file[] a demand for 

payment without complete success’’ 

without requiring resolution of that 

demand, the text suggested by the 

commenter would, in some 

circumstances, require VA to make 

payment or reimbursement before the 

third party has finally decided not to 

make the demanded payment. The 

current language in § 17.1004(d)(4) 

requires the exhaustion of all attempts 

for reimbursement or payment from the 

third party before the claimant files a 

claim with VA. This ensures that 

duplicative payments are not made to 

the claimant for the care rendered. If VA 

were to pay before the claimant fully 

exhausted his or her claim with the 

third party, and the third party 

ultimately made payment, VA would be 

required to seek reimbursement of its 

premature payment, resulting in a 

collection action against the claimant 

and unnecessary administrative costs 

and resource utilization. We will not 

amend § 17.1004 based on the 

commenter’s suggestion because the 

suggested amendment could result in 

duplicative payments, increased costs 

and, ultimately, no additional benefit to 

the veteran. Thus, as proposed, we have 

retained the current language in 

paragraph (d)(4), renumbered as 

paragraph (d)(3) by this rulemaking. 

Sections 1725(c)(2) and 1725(d) are 

not inconsistent because, even after ‘‘the 

veteran or the provider of emergency 

treatment has exhausted without 

success all claims and remedies 

reasonably available to the veteran or 

provider against a third party for 

payment of such treatment’’ and VA has 

provided reimbursement, a third party 

may subsequently, under certain 

circumstances, make payment for the 

same treatment. 

The commenter also suggested that 

we make changes to current § 17.1002, 

which permits payment or 

reimbursement under 38 U.S.C. 1725 for 

emergency treatment only under certain 

conditions, which are specified in the 

regulation. One such condition bars 

payment if a veteran has coverage under 

a health-plan contract, such that the 

health-plan contract is responsible to 

pay for, or reimburse the veteran for 

payment of, the emergency treatment. 

This condition applies whether the 

health-plan contract’s responsibility is 

for all or part of the cost of the 

emergency treatment. 

The statutory authority for this 

paragraph is 38 U.S.C. 1725(b)(3)(B), 

which states that a veteran is liable for 

emergency treatment if he or she ‘‘has 

no entitlement to care or services under 

a health-plan contract.’’ The commenter 

suggested that we remove the term ‘‘or 

in part’’ from current § 17.1002(f). (We 

note that, although the commenter 

referred to § 17.1002(g), the December 

21, 2011, rulemaking redesignated 

paragraph (g) as paragraph (f).) As 

previously stated in this rulemaking, the 

2010 Act removed the term ‘‘or in part’’ 

from 38 U.S.C. 1725(b)(3)(C). Section 

1725(b)(3)(B) had no such revision. In 

other words, section 1725(b)(3)(B) 

requires that the veteran have ‘‘no 

entitlement to care or services under a 

health-plan contract,’’ which means that 

any entitlement, even a partial one, bars 

eligibility under section 1725(b). In 

comparison, section 1725(b)(3)(C), as 

amended, requires veterans to have ‘‘no 

other contractual or legal recourse 

against a third party that would, in 

whole, extinguish such liability to the 

provider’’ to be eligible for 

reimbursement under section 1725(b). 

(Emphasis added.) If a veteran has a 

contractual or legal recourse against a 

third party that would, in part, 

extinguish liability to the provider, the 

veteran would not be barred from 

eligibility under section 1725(b). The 

current language of § 17.1002(f) clarifies 

the language of section 1725(b)(3)(B) by 

reiterating the veteran’s liability for 

emergency treatment if such veteran has 

no health-plan contract ‘‘in whole or in 

part.’’ If we were to remove ‘‘or in part,’’ 

the provision would treat a veteran with 

some coverage under a health-plan 

contract in the same manner as one 

without coverage. We respectfully 

decline to make any changes to the 

regulation text based on this comment. 

Finally, this rule amends current 

paragraph (g) of § 17.1002 by removing 

the words ‘‘or in part’’ to parallel the 

language in 38 U.S.C. 1725(b)(3)(C), and 

removes the partial payment exclusion 

from VA regulations. A commenter 

suggested further amending current 

§ 17.1002(g) by dividing the paragraph 

into two separate paragraphs. However, 

the commenter’s suggested revision 

does not contain the amendment 

established by the 2010 Act, which 

removed the term ‘‘or in part.’’ The 

suggested revision does not offer any 

substantive amendment to the language 

of the current paragraph (g), nor does it 

offer ease of readability. We, therefore, 

will not further amend current 

paragraph (g) of § 17.1002. 

Based on the rationale set forth in the 

proposed rule and in this document, VA 

is adopting the proposed rule as a final 

rule, with the above stated renumbering 

change. 

Effect of Rulemaking 

Title 38 of the Code of Federal 

Regulations, as revised by this final rule, 

represents the exclusive legal authority 

on this subject. No contrary rules or 

procedures are authorized. All VA 

guidance must be read to conform with 

this rulemaking if possible or, if not 


tkelley on DSK3SPTVN1PROD with RULES
Federal Register / Vol. 77, No. 77 / Friday, April 20, 2012 / Rules and Regulations 23617 

possible, such guidance is superseded 

by this rulemaking. 

Unfunded Mandates 

The Unfunded Mandates Reform Act 

of 1995 requires, at 2 U.S.C. 1532, that 

agencies prepare an assessment of 

anticipated costs and benefits before 

issuing any rule that may result in an 

expenditure by State, local, and tribal 

governments, in the aggregate, or by the 

private sector, of $100 million or more 

(adjusted annually for inflation) in any 

one year. This final rule will have no 

such effect on State, local, and tribal 

governments, or on the private sector. 

Paperwork Reduction Act 

The Office of Management and Budget 

(OMB) assigns a control number for 

each collection of information it 

approves. Except for emergency 

approvals under 44 U.S.C. 3507(j), VA 

may not conduct or sponsor, and a 

person is not required to respond to, a 

collection of information unless it 

displays a currently valid OMB control 

number. 

Current § 17.1004 contains a 

collection of information under the 

Paperwork Reduction Act (44 U.S.C. 

3501–3521). OMB previously approved 

the collection of information and 

assigned Control Number 2900–0620. 

Because this final rule does not alter the 

information collection approved by 

OMB under the existing control number, 

we are not seeking new approval. 

We are inserting a citation to the OMB 

control number immediately after the 

authority citation for § 17.1004 to clarify 

that that section contains an approved 

collection of information. 

Executive Orders 12866 and 13563 

Executive Orders 12866 and 13563 

direct agencies to assess the costs and 

benefits of available regulatory 

alternatives and, when regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, and other advantages; 

distributive impacts; and equity). 

Executive Order 13563 (Improving 

Regulation and Regulatory Review) 

emphasizes the importance of 

quantifying both costs and benefits, 

reducing costs, harmonizing rules, and 

promoting flexibility. Executive Order 

12866 (Regulatory Planning and 

Review) defines a ‘‘significant 

regulatory action,’’ which requires 

review by OMB, as ‘‘any regulatory 

action that is likely to result in a rule 

that may: (1) Have an annual effect on 

the economy of $100 million or more or 

adversely affect in a material way the 

economy, a sector of the economy, 

productivity, competition, jobs, the 

environment, public health or safety, or 

State, local, or tribal governments or 

communities; (2) Create a serious 

inconsistency or otherwise interfere 

with an action taken or planned by 

another agency; (3) Materially alter the 

budgetary impact of entitlements, 

grants, user fees, or loan programs or the 

rights and obligations of recipients 

thereof; or (4) Raise novel legal or policy 

issues arising out of legal mandates, the 

President’s priorities, or the principles 

set forth in this Executive Order.’’ 

The economic, interagency, 

budgetary, legal, and policy 

implications of this regulatory action 

have been examined and it has been 

determined not to be a significant 

regulatory action under Executive Order 

12866. 

Regulatory Flexibility Act 

The Secretary hereby certifies that 

this final rule will not have a significant 

economic impact on a substantial 

number of small entities as they are 

defined in the Regulatory Flexibility 

Act, 5 U.S.C. 601–612. This final rule 

will not cause a significant economic 

impact on health care providers, 

suppliers, or entities since only a small 

portion of the business of such entities 

concerns VA beneficiaries. Further, 

under this final rule, affected small 

entities will be reimbursed for the 

expenses they incur for the emergency 

treatment of certain veterans. Therefore, 

pursuant to 5 U.S.C. 605(b), this final 

rule is exempt from the initial and final 

regulatory flexibility analysis 

requirements of sections 603 and 604. 

Catalog of Federal Domestic Assistance 

Numbers 

The Catalog of Federal Domestic 

Assistance program number and title for 

this final rule are as follows: 64.005, 

Grants to States for Construction of State 

Home Facilities; 64.007, Blind 

Rehabilitation Centers; 64.008, Veterans 

Domiciliary Care; 64.009, Veterans 

Medical Care Benefits; 64.010, Veterans 

Nursing Home Care; 64.014, Veterans 

State Domiciliary Care; 64.015, Veterans 

State Nursing Home Care; 64.018, 

Sharing Specialized Medical Resources; 

64.019, Veterans Rehabilitation Alcohol 

and Drug Dependence; 64.022, Veterans 

Home Based Primary Care; and 64.024, 

VA Homeless Providers Grant and Per 

Diem Program. 

Signing Authority 

The Secretary of Veterans Affairs, or 

designee, approved this document and 

authorized the undersigned to sign and 

submit the document to the Office of the 

Federal Register for publication 

electronically as an official document of 

the Department of Veterans Affairs. John 

R. Gingrich, Chief of Staff, Department 

of Veterans Affairs, approved this 

document on April 11, 2012, for 

publication. 

List of Subjects in 38 CFR Part 17 

Administrative practice and 

procedure, Alcohol abuse, Alcoholism, 

Claims, Day care, Dental health, Drug 

abuse, Foreign relations, Government 

contracts, Grant programs-health, Grant 

programs-Veterans, Health care, Health 

facilities, Health professions, Health 

records, Homeless, Medical and dental 

schools, Medical devices, Medical 

research, Mental health programs, 

Nursing homes, Philippines, Reporting 

and recordkeeping requirements, 

Scholarships and fellowships, Travel 

and transportation expenses, Veterans. 

Dated: April 12, 2012. 

Robert C. McFetridge, 

Director of Regulation Policy and 

Management, Office of the General Counsel, 

Department of Veterans Affairs. 

For the reasons stated in the 

preamble, the Department of Veterans 

Affairs amends 38 CFR part 17 as 

follows: 

PART 17—MEDICAL 

■ 1. The authority citation for part 17 

continues to read as follows: 

Authority: 38 U.S.C. 501, and as noted in 

specific sections. 

§ 17.1001 [Amended] 

■ 2. Amend § 17.1001 by removing 

paragraph (a)(5). 

§ 17.1002 [Amended] 

■ 3. Amend § 17.1002 by removing the 

words ‘‘or in part’’ in paragraph (g). 

■ 4. Amend § 17.1004 as follows: 

■ a. Remove paragraph (d)(1). 

■ b. Redesignate paragraphs (d)(2), 

(d)(3) and (d)(4) as new paragraphs 

(d)(1), (d)(2), and (d)(3), respectively. 

■ c. Add paragraph (f). 

■ d. Add an information collection 

approval parenthetical at the end of the 

section. 

The additions read as follows: 

§ 17.1004 Filing claims. 

* * * * * 

(f) Notwithstanding paragraph (d) of 

this section, VA will provide retroactive 

payment or reimbursement for 

emergency treatment received by the 

veteran on or after July 19, 2001, but 

more than 90 days before May 21, 2012, 

if the claimant files a claim for 


tkelley on DSK3SPTVN1PROD with RULES
23618 Federal Register / Vol. 77, No. 77 / Friday, April 20, 2012 / Rules and Regulations 

reimbursement no later than 1 year after 

May 21, 2012. 

* * * * * 

(The Office of Management and Budget has 

approved the information collection 

requirements in this section under control 

number 2900–0620.) 

■ 5. Amend § 17.1005 by adding 

paragraphs (e) and (f), to read as follows: 

§ 17.1005 Payment limitations. 

* * * * * 

(e) If an eligible veteran under 

§ 17.1002 has contractual or legal 

recourse against a third party that would 

only partially extinguish the veteran’s 

liability to the provider of emergency 

treatment, then: 

(1) VA will be the secondary payer; 

(2) Subject to the limitations of this 

section, VA will pay the difference 

between the amount VA would have 

paid under this section for the cost of 

the emergency treatment and the 

amount paid (or payable) by the third 

party; and 

(3) The provider will consider the 

combined payment under paragraph 

(c)(2) of this section as payment in full 

and extinguish the veteran’s liability to 

the provider. 

(f) VA will not reimburse a claimant 

under this section for any deductible, 

copayment or similar payment that the 

veteran owes the third party. 

* * * * * 

[FR Doc. 2012–9265 Filed 4–19–12; 8:45 am] 

BILLING CODE 8320–01–P 

POSTAL SERVICE 

39 CFR Part 501 

Authority To Manufacture and 

Distribute Postage Evidencing 

Systems 

AGENCY: Postal ServiceTM. 

ACTION: Final rule. 

SUMMARY: The Postal Service is adopting 

an editorial revision of the rules 

concerning inventory controls for 

Postage Evidencing Systems (PES). 

These changes are intended to clarify 

the rules, and reflect a change in the 

name of the office responsible for 

enforcing them. 

DATES: This rule is effective May 21, 

2012. 

FOR FURTHER INFORMATION CONTACT: 

Marlo Kay Ivey, Business Programs 

Specialist, Payment Technology, U.S. 

Postal Service, at 202–268–7613. 

SUPPLEMENTARY INFORMATION: On 

December 1, 2011, the Postal Service 

proposed an editorial revision of the 

rules governing the inventory control 

processes of PES provided to customers 

by manufacturers or distributors. The 

office formerly known as Postage 

Technology Management (PTM) is now 

known as Payment Technology, making 

it necessary to modify the numerous 

references to PTM in 39 CFR 501.14 to 

reflect the new name. In addition, the 

Postal Service believed it was 

appropriate to take this opportunity to 

make a number of minor editorial 

changes throughout § 501.14 to improve 

its clarity. None of these changes was 

intended to modify the substantive 

requirements of the section. No 

comments were received concerning 

this proposal. Accordingly, the 

proposed revision to § 501.14 is adopted 

without further changes. 

List of Subjects in 39 CFR Part 501 

Administrative practice and 

procedure. 

Accordingly, 39 CFR part 501 is 

amended as follows: 

PART 501—AUTHORIZATION TO 

MANUFACTURE AND DISTRIBUTE 

POSTAGE EVIDENCING SYSTEMS 

1. The authority citation for 39 CFR 

part 501 continues to read as follows: 

Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 

401, 403, 404, 410, 2601, 2605, Inspector 

General Act of 1978, as amended (Pub. L. 95– 

452, as amended); 5 U.S.C. App. 3. 

■ 2. Section 501.14 is revised to read as 

follows: 

§ 501.14 Postage Evidencing System 

inventory control processes. 

(a) Each authorized provider of 

Postage Evidencing Systems must 

permanently hold title to all Postage 

Evidencing Systems that it 

manufactures or distributes, except 

those purchased by the Postal Service or 

distributed outside the United States. 

(b) An authorized provider must 

maintain sufficient facilities for and 

records of the business relationship, 

distribution, control, storage, 

maintenance, repair, replacement, and 

destruction or disposal of all Postage 

Evidencing Systems and their 

components to enable accurate 

accounting and location thereof 

throughout the entire life cycle of each 

Postage Evidencing System. A complete 

record shall entail a list by serial 

number of all Postage Evidencing 

Systems manufactured or distributed 

showing all movements of each system 

from the time that it is produced until 

it is scrapped, and the reading of the 

ascending register each time the system 

is checked into or out of service. These 

records must be available for inspection 

by Postal Service officials at any time 

during business hours. 

(c) To ensure adequate control over 

Postage Evidencing Systems, plans for 

the following subjects must be 

submitted for prior approval, in writing, 

to the office of Payment Technology. 

(1) Service procedures for all Postage 

Evidencing Systems—these are 

procedures to address the process to be 

used for new Postage Evidencing 

Systems as well as those previously 

leased to another customer. 

(2) Transportation and storage of 

Postage Evidencing Systems—these are 

procedures that provide reasonable 

precautions to prevent use by 

unauthorized individuals. Providers 

must ship all postage meters by Postal 

Service Registered Mail® service unless 

given written permission by the Postal 

Service to use another carrier. The 

provider must demonstrate that the 

alternative delivery carrier employs 

security procedures equivalent to those 

for Registered Mail service. 

(3) Postage Evidencing System 

examination/inspection procedures and 

schedule—the provider is required to 

perform postage meter examinations or 

inspections based on an approved 

schedule. Failure to complete the 

postage meter examination or 

inspections by the due date may result 

in the Postal Service requiring the 

provider to disable the meter’s resetting 

capability. If necessary, the Postal 

Service shall notify the customer that 

the postage meter is to be removed from 

service and the authorization to use a 

Postage Evidencing System revoked, 

following the procedures for revocation 

specified by regulation. The Postal 

Service shall notify the provider to 

remove the postage meter from the 

customer’s location. 

(4) Out-of-service procedures for a 

nonfaulty Postage Evidencing System— 

these procedures must be used when the 

system is to be removed from service for 

any reason. 

(5) Postage Evidencing System repair 

process—any physical or electronic 

access to the internal components of a 

postage meter, as well as any access to 

software or security parameters, must be 

conducted within an approved facility 

under the provider’s direct control and 

active supervision. To prevent 

unauthorized use, the provider or any 

third party acting on its behalf must 

keep secure any equipment or other 

component that can be used to open or 

access the internal, electronic, or secure 

components of a postage meter. 

(6) Handling procedures for faulty 

meters—the provider must maintain 

handling procedures for faulty meters, 

including those that are inoperable, misVerDate Mar<15>2010 16:08 Apr 19, 2012 Jkt 226001 PO 00000 Frm 00022 Fmt 4700 Sfmt 4700 E:\FR\FM\20APR1.SGM 20APR1

tkelley on DSK3SPTVN1PROD with RULES