[Federal Register Volume 89, Number 218 (Tuesday, November 12, 2024)]
[Rules and Regulations]
[Pages 88888-88889]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-25975]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 70

RIN 2900-AS19


Changes in Rates VA Pays for Special Modes of Transportation; 
Delay of Effective Date From February 16, 2025, Until February 16, 2029

AGENCY: Department of Veterans Affairs.

ACTION: Final rule; delay of effective date.

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SUMMARY: The Department of Veterans Affairs (VA) published in the 
Federal Register on February 16, 2023, a final rule to amend its 
beneficiary travel regulations to establish a new payment methodology 
for special modes of transportation available through the VA 
beneficiary travel program. The preamble of that final rule stated the 
effective date was February 16, 2024. VA published in the Federal 
Register on December 29, 2023, a final rule to delay the effective date 
for the rule from February 16, 2024, to February 16, 2025. This 
rulemaking further delays the effective date of February 16, 2025, to 
February 16, 2029.

DATES: Effective Date: The effective date for the final rule published 
February 16, 2023, at 88 FR 10032, and delayed on December 29, 2023, at 
88 FR 90120, until February 16, 2025, is further delayed until February 
16, 2029.

FOR FURTHER INFORMATION CONTACT: Ben Williams, Director, Veterans 
Transportation Program (15MEM), Veterans Health Administration, 
Department of Veterans Affairs, 810 Vermont Avenue NW, Washington, DC 
20420, (404) 828-5691. (This is not a toll-free number.)

SUPPLEMENTARY INFORMATION: On November 5, 2020, VA proposed amending 
its beneficiary travel regulations to implement the discretionary 
authority in 38 U.S.C. 111(b)(3)(C), which permits VA to pay the lesser 
of the actual charge for ambulance transportation or the amount 
determined by the Centers for Medicare and Medicaid Services (CMS) 
Medicare Part B Ambulance Fee Schedule (hereafter referred to the CMS 
ambulance fee schedule) established under section 1834(l) of the Social 
Security Act (42 U.S.C. 1395m(l)), unless VA has entered into a 
contract for that transportation. We provided a 60-day comment period 
that ended on January 4, 2021, and we received six comments, five of 
which were substantive. Those five comments all raised similar concerns 
about 38 CFR 70.30(a)(4) introductory text and (a)(4)(i) and (ii) as 
proposed, related to using the CMS ambulance fee schedule or, in the 
case of travel by modes other than ambulance, the posted rates from 
each State. We responded to all comments in a final rule published in 
the Federal Register on February 16, 2023 (88 FR 10032), wherein we 
stated that we would not make changes from the proposed rule related to 
application of the CMS ambulance fee schedule but would delay the 
effective date of the final rule by one year (to be February 16, 2024) 
to ensure that ambulance providers have adequate time to adjust to VA's 
new methodology for calculating ambulance rates. (88 FR 10035). We 
further stated in the final rule that such adjustment could include 
ambulance providers entering negotiations with VA to contract for 
payment rates different than those under the CMS ambulance fee 
schedule, as contemplated in the final rule.
    After the final rule was published, VA received feedback from both 
internal and external stakeholders, including VA employees, ambulance 
providers, and industry experts, that more time would be necessary for 
successful implementation of the rule. Specifically, delaying the 
effective date was intended to accommodate unforeseen difficulties in 
air ambulance broker contracting. At the time, VA believed it would be 
able to enter into contracts and/or subcontract relationships with air 
ambulance service providers for non-VA initiated service calls if given 
more time for negotiations. Based on this feedback and evaluation of 
the continued effort that would be required by air ambulance brokers to 
negotiate and enter into contracts before February 16, 2024, VA 
published a final rule on December 29, 2023, (88 FR 90120) that delayed 
the effective date of the regulation by one year to February 16, 2025.
    After the final rule delaying the effective date to February 2025 
was published, however, VA learned through continued discussions with 
industry experts, including air ambulance providers and brokers, that 
contracting for emergency, non-VA initiated air transportation is not 
feasible at this time. Impediments include the lack of air industry 
infrastructure for air ambulance brokers to enter into subcontracts 
with providers for non-VA initiated ambulance transports, as well as 
the general lack of authority of non-VA individuals to enter into 
orders or other contractually binding agreements for transportation on 
behalf of VA.
    Air ambulance providers contend that the Medicare reimbursement 
rate that

[[Page 88889]]

will apply absent a contract is unsustainable for their business 
operations and may result in either a reduction in the availability of 
air ambulance services for both veterans and the public and/or will 
place veterans at risk of receiving bills for the balance of charges 
for services. As a result, VA is delaying the effective date of the 
regulation by four years to allow time for VA to establish additional 
protections to veterans against balance billing for non-VA initiated 
air emergency ambulance transports that are reimbursed at a rate other 
than actual charges. In addition, the delay will provide time for VA to 
examine alternative payment methodologies for non-VA initiated air 
ambulance transports. VA has determined that a 4-year delay is 
necessary to ensure sufficient time to evaluate and address these 
concerns, which may require additional notice and comment rulemaking.

Administrative Procedure Act

    The Administrative Procedure Act (APA), codified in part at 5 
U.S.C. 553, generally requires that agencies publish substantive rules 
in the Federal Register for notice of proposed rulemaking and to 
solicit public comment. However, pursuant to 5 U.S.C. 553(b)(B) of the 
APA, general notice and the opportunity for public comment are not 
required with respect to a rulemaking when an ``agency for good cause 
finds (and incorporates the finding and a brief statement of reasons 
therefor in the rules issued) that notice and public procedure thereon 
are impracticable, unnecessary, or contrary to the public interest.''
    VA finds that there is good cause under the APA to issue this rule 
without prior notice and opportunity for public comment. As stated 
previously, VA last delayed the effective date of the final rule (that 
published on February 16, 2023, at 88 FR 10032) in late December 2023, 
to provide additional time for air ambulance brokers to enter into 
subcontracts with ambulance providers for emergency, non-VA initiated 
transports. During the first few months of 2024, VA engaged in 
continued discussions and further contracting efforts with the 
ambulance industry generally, with a particular focus on emergent, non-
VA initiated air ambulance transportation. In the spring of 2024, 
however, VA learned that contracting for emergency, non-VA initiated 
air transportation is not feasible at this time due to the lack of air 
industry infrastructure for ambulance brokers to enter into 
subcontracts with providers for non-VA initiated ambulance transports, 
as well as the general lack of authority of non-VA individuals to enter 
into orders or other contractually binding agreements for 
transportation on behalf of VA. As a result, VA promptly began 
developing alternative courses of action to address emergent non-VA 
initiated air ambulance transportation. However, due to the upcoming 
effective date of the final rule, VA ultimately determined that the 
best and most veteran-centric way forward would be to further delay the 
final rule, to allow additional time for VA to ensure that veterans 
would not be negatively impacted by balance billing from these 
ambulance providers.
    The final rule published at 88 FR 10032 would become effective on 
February 16, 2025, pursuant to the final rule delaying its effective 
date that published at 88 FR 90120. Seeking prior notice and the 
opportunity for public comment on this delay is impracticable. 
Specifically, VA was not aware of the need to delay the effective date 
until summer of 2024. Given the process for publishing a notice of 
proposed rulemaking followed by an adequate public comment period on 
the proposed rule, and adequate time to respond to any comments and 
publish a final rule, VA does not believe there would be sufficient 
time to ensure that the new rule would be effective before February 16, 
2025. As a result, the current final rule would become effective 
February 16, 2025, and ambulance providers who have been unable to 
contract for services would be subject to those payment methodologies, 
which is likely to cause confusion, uncertainty, and possibly result in 
veterans being billed directly.
    Similarly, VA finds that prior notice and opportunity for comment 
would be contrary to the public interest because it could adversely 
impact veteran care or result in veterans being billed directly for 
services. If the new regulation becomes effective on February 16, 2025, 
VA will pay the lesser of actual charges associated with an air 
ambulance service or the CMS ambulance fee schedule rate for non-VA 
initiated ambulance services, because separate contract rates will not 
exist (as explained earlier, VA now knows that it cannot effectively 
establish contractual or sub contractual relationships with air 
ambulance service providers at this time for non-VA initiated emergency 
transportation). Air ambulance providers contend that the Medicare 
reimbursement rate that would apply is unsustainable for their business 
operations and may result in either a reduction in the availability of 
air ambulance services for veterans and the public, and/or place 
veterans at risk for being billed directly for the difference between 
the Medicare rate that VA pays for emergency, non-VA initiated trips 
and the amount billed by the ambulance provider. For these reasons, VA 
finds that good cause exists to dispense with the prior notice and 
public comment procedures for this final rule, as it concludes that 
such procedures are impracticable and contrary to the public interest 
pursuant to 5 U.S.C. 553(b)(B).

Executive Orders 12866, 13563, and 14094

    Executive Order 12866 (Regulatory Planning and Review) directs 
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 14094 (Executive Order on 
Modernizing Regulatory Review) supplements and reaffirms the 
principles, structures, and definitions governing contemporary 
regulatory review established in Executive Order 12866 of September 30, 
1993 (Regulatory Planning and Review), and Executive Order 13563 of 
January 18, 2011 (Improving Regulation and Regulatory Review). The 
Office of Information and Regulatory Affairs has determined that this 
rulemaking is a significant regulatory action under Executive Order 
12866, as amended by Executive Order 14094. The Regulatory Impact 
Analysis associated with this rulemaking can be found as a supporting 
document at www.regulations.gov.

Signing Authority

    Denis McDonough, Secretary of Veterans Affairs, approved and signed 
this document on October 31, 2024, 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.

Luvenia Potts,
Regulation Development Coordinator, Office of Regulation Policy & 
Management, Office of General Counsel, Department of Veterans Affairs.
[FR Doc. 2024-25975 Filed 11-8-24; 8:45 am]
BILLING CODE 8320-01-P