[Federal Register Volume 87, Number 24 (Friday, February 4, 2022)]
[Proposed Rules]
[Pages 6456-6466]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-02292]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 17

RIN 2900-AR01


VA Pilot Program on Graduate Medical Education and Residency

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: The Department of Veterans Affairs proposes to revise its 
medical regulations to establish a new pilot program on graduate 
medical education and residency, as required by section 403 of the John 
S. McCain III, Daniel K. Akaka, and Samuel R. Johnson VA Maintaining 
Internal Systems and Strengthening Integrated Outside Network Act of 
2018.

DATES: Comments must be received on or before April 5, 2022.

ADDRESSES: Comments may be submitted through www.Regulations.gov or 
mailed to, Paul B. Greenberg, Deputy Chief, Office of Academic 
Affiliations, (14AA), Department of Veterans Affairs, 810 Vermont Ave. 
NW, Washington, DC 20420. Comments should indicate that they are 
submitted in response to ``RIN 2900-AR01--VA Pilot Program on Graduate 
Medical Education and Residency.'' Comments received will be available 
at regulations.gov for public viewing, inspection or copies.

FOR FURTHER INFORMATION CONTACT: Paul B. Greenberg, Deputy Chief, 
Office of Academic Affiliations, (14AA), Department of Veterans 
Affairs, 810 Vermont Ave. NW, Washington, DC 20420, (202) 461-9490. 
(This is not a toll-free telephone number.)

SUPPLEMENTARY INFORMATION: Section 403 of the John S. McCain III, 
Daniel K. Akaka, and Samuel R. Johnson VA Maintaining Internal Systems 
and Strengthening Integrated Outside Network Act of 2018 (Pub. L. 115-
182, hereafter referred to as the MISSION Act) mandated the Department 
of Veterans Affairs (VA) create a pilot program to establish additional 
medical residency positions authorized under section 7302 of title 38 
United States Code (U.S.C.) (note to 38 U.S.C. 7302) at certain covered 
facilities. This proposed rule would establish substantive and 
procedural requirements to allow VA to administer this pilot program in 
a manner consistent with section 403 of the MISSION Act.
    Section 7302(e)(1) of title 38 United States Code (U.S.C.) permits 
VA to both establish medical residency programs in VA facilities and 
ensure that such established programs have a sufficient number of 
residents. Section 403 of the MISSION Act created a note to section 
7302 to expand VA's authority to establish medical residency positions 
in covered facilities to include non-VA facilities such as health care 
facilities of the Department of Defense and Indian Health Service. 
Section 403 of the MISSION Act further provides parameters for VA to 
determine those covered facilities in which residents will be placed. 
For instance, section 403 requires VA to consider certain factors to 
determine whether there is a clinical need for providers in areas where 
residents would be placed. Section 403 also requires prioritized 
placement of residents under the pilot program in Indian Health Service 
facilities, Indian tribal or tribal organization facilities, certain 
underserved VA facilities, or other covered facilities. Section 403 
additionally authorizes VA to pay resident stipends and benefits 
regardless of whether such residents are assigned to a VA facility, and 
requires VA to pay certain startup costs of new residency programs 
(such as curriculum development and faculty salaries) if residents are 
placed in such programs under the pilot program. The authority for the 
pilot was initially scheduled to expire on August 7, 2024; however, it 
was subsequently extended to August 7, 2031, under section 5107 of 
Public Law 116-169.
    Before detailing the regulations we propose to implement this 
mandated pilot program, we provide a brief summary of VA's 
administration of its Graduate Medical Education (GME) programming 
under 38 U.S.C. 7302(e), to establish a basic understanding of VA's 
understand of the conduct of GME programming in general. Under section 
7302(e)(1), VA establishes new medical residency programs in VA 
facilities and

[[Page 6457]]

ensures that such programs have a sufficient number of residents; VA 
also ensures that existing medical residency programs have a sufficient 
number of residents. Criteria under sections 7302(e)(1)(A)-(B) and 
(e)(2)(A)-(B) further guide VA's selection of its facilities in which 
residency programs will be established or residents will be placed, 
where such criteria relate to VA staffing levels, location of VA 
facilities in certain areas deemed as health professional shortage 
areas, and priority for residents to be placed for the provision of 
specific types of health care. Through a request for proposal (RFP) 
mechanism, VA Central Office notifies VA facilities of these selection 
criteria as well as other parameters. This RFP details, among other 
things: Consideration factors to be assessed by VA Central Office (as 
well as the relative importance or weight of such factors); information 
required from VA facilities to be in any response to the RFP submitted 
back to VA Central Office; and the process to submit a response to the 
RFP, to include submission instructions and timelines for completion. 
Upon receipt of those RFP responses submitted by VA health care 
facilities, VA Central Office evaluates the responses submitted against 
the criteria in the RFP to determine those facilities in which 
residents will be placed or whether funding will be made available for 
certain costs of establishing new medical residency programs. In 
administering GME programming under section 7302(e), VA forms 
relationships with non-VA institutions that sponsor graduate medical 
educational programs (most often medical schools or teaching 
hospitals), and it is those sponsoring institutions that provide the 
residents that would be available for placement in VA facilities. VA, 
therefore, does not control the pool of participating educational 
programs or available residents, although VA does assess the 
requirements under section 7302(e) to determine the best placement for 
such residents in VA facilities. VA in effect then does not place 
residents but does provide for resident positions to be filled in VA 
facilities. Under section 7302(d), VA forms academic affiliations with 
sponsoring institutions to delineate the responsibilities regarding the 
training of the residents, and VA enters into other separate agreements 
to control funding of both certain residency program educational costs 
(such as accreditation fees and National Resident Match Program fees) 
and the costs of paying resident stipends and benefits. VA envisions 
that the pilot program authorized under section 403 would be conducted 
under the same basic tenets of GME programming as presented above, such 
that there would be agreements formed with academic affiliations with 
sponsoring institutions and the covered facilities recognized in 
section 403 and in which residents would be placed under the pilot. We 
will note throughout these proposed regulations where we expect there 
to be administrative and substantive similarities and differences 
between VA's statutory GME programming under 38 U.S.C. 7302 and the 
pilot program required by section 403.
    We propose to establish several new regulation sections in part 17 
of title 38 Code of Federal regulation (CFR) in Sec. Sec.  17.243 
through 17.248 to implement this mandated pilot program, as further 
discussed below.

Sec.  17.243 Purpose and scope.

    Proposed Sec.  17.243(a) would establish that proposed Sec. Sec.  
17.243 through 17.248 would implement the VA Pilot Program on Graduate 
Medical Education and Residency (PPGMER) to place residents in existing 
or new residency programs in covered facilities and to reimburse 
certain costs associated with establishing new residency programs in 
covered facilities, as authorized by section 403 of Public Law 115-182. 
Proposed Sec.  17.243(b) would establish the scope of the PPGMER by 
stating that Sec. Sec.  17.243 through 17.248 would apply only to the 
PPGMER as authorized under section 403 of Public Law 115-182, and not 
to VA's more general administration of GME programs in VA facilities as 
authorized under 38 U.S.C. 7302(e). Establishing the scope of the 
PPGMER as separate from VA's more general GME programming under 38 
U.S.C. 7302(e) would be necessary because the PPGMER is a time-limited 
pilot program that will sunset on August 7, 2031 (unless statutorily 
reauthorized or made permanent), and because section 403 of the MISSION 
Act establishes PPGMER-specific criteria that do not otherwise apply to 
VA's administration of GME programs under 38 U.S.C. 7302(e). 
Additionally, although the PPGMER would be a separately administered 
program under these proposed regulations, the PPGMER would utilize some 
of the same administrative concepts or procedures as VA uses to 
administer programs under 38 U.S.C. 7302(e). For instance, some 
definitions as proposed in these regulations may be the same as 
established in certain VA policy used to administer GME programming 
under section 7302(e), as will be explained in discussion of proposed 
Sec.  17.244. Proposed Sec.  17.243 would not state the 2031 sunset 
date of the PPGMER, as the authority for PPGMER may be extended or made 
permanent in the future. If the authority for PPGMER were not extended 
or made permanent, VA would cease to implement the PPGMER and would 
issue a publication in the Federal Register to remove and reserve the 
regulation.

Sec.  17.244 Definitions.

    Proposed Sec.  17.244 would establish definitions to apply to the 
PPGMER under proposed Sec. Sec.  17.243 through 17.249.
    The term benefit would be defined to mean a benefit provided by VA 
to a resident that has monetary value in addition to a resident's 
stipend, which may include but not be limited to health insurance, life 
insurance, worker's compensation, disability insurance, Federal 
Insurance Contributions Act (FICA) taxes, and retirement contributions. 
We believe this would be a commonly understood definition of this term 
as it is consistent with the characterization of benefits in VA policy 
that is used to administer programs under the authority of 38 U.S.C. 
7302(e). This definition would be relevant as VA would pay benefits to 
residents as applicable, as explained later in the discussion of 
proposed Sec.  17.248.
    The term covered facility would be defined to mean any facility 
identified in Sec.  17.245, as that section is proposed and discussed 
later in this rulemaking. We would define covered facility in relation 
to proposed Sec.  17.245, to avoid having to reference Sec.  17.245 in 
every instance in which the term covered facility would be used in the 
proposed regulation text.
    The term educational activities would be defined to mean all 
activities in which residents participate to meet educational goals or 
curriculum requirements of a residency program, to include but not be 
limited to: Clinical duties; attendance in didactic sessions; research; 
attendance at VA facility committee meetings; scholarly activities that 
are part of an accredited training program; and approved educational 
details. We believe this would be a commonly understood definition of 
this term as it is consistent with the characterization of existing 
educational activities in VA policy (see, e.g., Veterans Health 
Administration (VHA) Directive 1400.09, Education of Physicians and 
Dentists) that is used to administer programs under the authority of 38 
U.S.C. 7302(e). This term would be relevant as it would be used to 
qualify those stipend and benefits payments VA may make for residents

[[Page 6458]]

under the PPGMER, as explained later in the discussion of proposed 
Sec.  17.248.
    The term resident would be defined to mean physician trainees 
engaged in post-graduate specialty or subspecialty residency programs 
that are either accredited by the Accreditation Council for Graduate 
Medical Education or in the application process for accreditation. The 
term resident would further be defined to include individuals in their 
first post-graduate year (PGY-1) of training (often referred to as 
Interns), and individuals who have completed training in their primary 
specialty and continue training in a subspecialty graduate medical 
education program and (generally referred to as Fellows). These Fellows 
would often be PGY-4 and above, depending upon the specialty. This term 
is relevant as it would be used throughout these proposed regulations, 
and we believe this proposed definition would be commonly understood as 
it is consistent with the characterization of a resident in VA policy 
that is used to administer programs under the authority of 38 U.S.C. 
7302(e). Because this definition would require the residency programs 
to be accredited or in the process for such accreditation by the 
Accreditation Council of Graduate Medical Education, VA would not 
consider individuals in non-accreditable programs, including VA 
Advanced Fellows or post-training chief residents, as residents under 
this pilot. While section 7302(e) uses the term residency position, for 
purposes of this proposed rule, we propose to use the term resident 
because that was the term used in sections 403(a)(4) through (6) and 
(b) of the MISSION Act. Additionally, the proposed definition of 
resident would permit VA to consider more than one resident as 
occupying a single resident position (such as a split assignment, which 
VA would track according to the percentage of VA assigned educational 
activities).
    The term stipend would be defined to mean the annual salary paid by 
VA for a resident. We believe this proposed definition would be 
commonly understood as it is consistent with the characterization of a 
stipend in VA policy that is used to administer programs under the 
authority of 38 U.S.C. 7302(e). This definition would be relevant as VA 
would pay stipends to residents as applicable, as explained later in 
the discussion of proposed Sec.  17.248.
    The term VA health care facility would be defined to mean any VA-
owned or VA-operated location where VA physicians provide care to 
Veterans, to include but not be limited to a VA medical center, 
independent outpatient clinic, domiciliary, nursing home (community 
living center), residential treatment program, and community-based 
clinic. This definition would be relevant to characterize one type of 
covered facility under proposed Sec.  17.245, and relevant to 
characterize one assessment criterion under proposed Sec.  
17.246(a)(7). We believe this definition is reasonable because it would 
capture the VA settings in which a VA physician provides care to 
Veterans, as it would be physicians who are teaching residents to be 
placed under the PPGMER.

Sec.  17.245 Covered facilities.

    Proposed Sec.  17.245 would list the covered facilities in which 
residents may be placed under the PPGMER, consistent with section 
403(a)(2) of the MISSION Act. We would restate the list of covered 
facilities from section 403(a)(2), versus merely cross-referencing 
section 403 or the statutory note to 38 U.S.C. 7302, for clarity and to 
provide regulatory citations that characterize or define certain terms 
related to covered facilities as applicable. Listing the facility types 
versus cross referencing section 403 would also allow proposed Sec.  
17.245 to include applicable regulatory citations. For instance, 
section 403(a)(2)(B) establishes that one type of covered facility are 
those health care facilities operated by an Indian tribe or tribal 
organization as those terms are defined in 25 U.S.C. 5304; proposed 
Sec.  17.245(b) would restate this language from section 403 and would 
add the relevant regulatory citations for the definitions of Indian 
tribe and tribal organization.
    Proposed Sec.  17.245 would establish the following types of 
facilities as covered facilities under the PPGMER, consistent with 
section 403(a)(2) of the MISSION Act: (1) A VA health care facility as 
defined in Sec.  17.244; (2) a health care facility operated by an 
Indian tribe or tribal organization, as those terms are defined in 25 
U.S.C. 5304 and at 25 CFR 273.106; (3) a health care facility operated 
by the Indian Health Service; (4) a federally-qualified health center 
as defined in 42 U.S.C. 1396d(l)(2)(B); (5) a health care facility 
operated by the Department of Defense; or (6) other health care 
facilities deemed appropriate by VA. We note that although a VA health 
care facility is listed as a covered facility under section 
403(a)(2)(A) and would also be listed as a covered facility in proposed 
Sec.  17.245(a), we do not anticipate the PPGMER being a vehicle for 
the placement of residents in VA facilities, as VA intends to continue 
operating its GME programming to place residents in VA facilities as 
authorized under 38 U.S.C. 7302 and 7406, separate from the PPGMER for 
the duration in which the PPGMER is implemented. We believe the 
authority under section 7302 is sufficient to place residents in VA 
facilities. However, we would not want to exclude from this proposed 
rule an express type of covered facility as listed in section 403(a)(2) 
of the MISSION Act. Similarly, proposed Sec.  17.245(f) would provide, 
consistent with section 403(a)(2)(F), that a covered facility could be 
any other health care facility as VA considers appropriate, giving VA 
the ability to place residents in a variety of facilities, such as 
those recognized by the Department of Health and Human Services as 
Rural Health Clinics, without curtailing the discretion provided to VA 
by section 403(a)(2)(F) in the administration of the PPGMER.

Sec.  17.246 Consideration factors for placement of residents.

    Proposed Sec.  17.246 would establish factors that VA would 
consider when determining in which covered facilities residents would 
be placed under the pilot. Consistent with section 403(a)(4)(A)-(G) of 
the MISSION Act, proposed Sec.  17.246(a)(1) through (7) would 
generally provide that VA would evaluate these factors in the context 
of whether there is a clinical need for providers in the area in which 
a covered facility is located. Proposed paragraphs (a)(1) through (7) 
would then restate from section 403(a)(4)(A)-(G) the specific factors 
VA must consider when determining whether there is a clinical need for 
providers in an area (those specific factors are discussed in detail 
further in this section of the preamble). We note that these proposed 
factors, consistent with section 403(a)(4), would not be weighted in 
any particular manner in the regulation text under proposed Sec.  
17.246(a), to allow flexibility for VA to consider the relative import 
of factors throughout the duration of the pilot. Although these factors 
would not be weighted in regulatory text, it may be the case that VA 
would assign levels of relative importance to these factors as part of 
its selection process, as discussed in the section of this preamble 
related to proposed Sec.  17.247. Additionally, only one factor in 
proposed paragraphs (a)(1) through (7) would be required to be met for 
VA to determine that a covered facility would be in an area with a 
clinical need for providers. As discussed below, it may be the case 
that some covered facilities could be considered to meet the same 
factor under paragraphs (a)(1) through (7) of proposed Sec.  17.246, 
and that

[[Page 6459]]

additional factors would need to be considered.
    Before discussing the specific factors that VA would consider in 
proposed Sec.  17.246(a)(1) through (7) to determine the clinical need 
for providers in an area, we clarify that VA would not be soliciting 
the interest of covered facilities to participate in the PPGMER through 
a public funding announcement, a public request for proposal, or by 
establishing an public application process, because section 403 of the 
MISSION Act is not an express grant or cooperative agreement authority 
through which VA may offer a public funding opportunity. Further, 
section 403 does not authorize any amount of money to be appropriated 
to implement the PPGMER, separate from VA's administration of its 
existing GME programing authorized under 38 U.S.C. 7302 and 7406. 
Because VA does not interpret that section 403 of the MISSION Act to 
authorize a public funding opportunity for which covered facilities may 
apply or submit a proposal to be considered, VA would not conduct a 
public solicitation. Rather, the parameters of VA's selection process 
for covered facilities would be established in proposed Sec.  17.247, 
as discussed later in this proposed rule.
    Consistent with section 403(a)(4)(A) of the MISSION Act, proposed 
Sec.  17.246(a)(1) would establish that VA would evaluate the ratio of 
veterans to VA providers for a standardized geographic area surrounding 
a covered facility, including a separate ratio for general 
practitioners and specialists. Proposed Sec.  17.246(a)(1)(i) would 
establish that VA considers a standardized geographic area to mean the 
county in which a covered facility is located. We believe this is a 
reasonable interpretation of a standardized geographic area by which to 
compare ratios of veterans to VA providers, as most covered facilities 
as well as VA should be able to access such data. We understand that 
proposing to use a county as the standardized geographic area would 
mean that covered facilities in the same county would have the same 
ratios of veterans to VA providers, making such facilities incomparable 
in terms of this consideration factor. We reiterate, therefore, that 
this is only one of multiple factors that VA would consider when 
determining the need for clinical providers in an area, and we do not 
anticipate that this factor would prevent covered facilities in the 
same county from being considered, provided other factors that indicate 
clinical need are met. Proposed Sec.  17.246(a)(1)(ii) would clarify 
that when deciding the clinical need for providers in an area, VA may 
consider either or both of the ratio(s) for general practitioners and 
specialists, where a higher ratio of veterans to VA providers would 
indicate a higher need for health care providers in an area. We believe 
these clarifications would be consistent with section 403(a)(4)(A).
    Consistent with section 403(a)(4)(B) of the MISSION Act, proposed 
Sec.  17.246(a)(2) would establish that VA would evaluate the range of 
clinical specialties of VA and non-VA providers for a standardized 
geographic area surrounding a covered facility, where the presence of 
fewer clinical specialties indicates a higher need for health care 
providers in an area, which we believe is a reasonable interpretation 
of section 403(a)(4)(B) to reflect a commonplace understanding that 
fewer types of providers in an area can indicate a greater clinical 
need. Proposed Sec.  17.246(a)(2) would consider the range of 
specialties of both VA and non-VA providers in an area because section 
403(a)(4)(B) is not specific to only VA providers. We note that the 
term standardized geographic area as used in proposed Sec.  
17.246(a)(2) would mean the county in which a covered facility is 
located, consistent with how that term is defined in proposed Sec.  
17.246(a)(1)(i).
    Consistent with section 403(a)(4)(C) of the MISSION Act, proposed 
Sec.  17.246(a)(3) would establish that VA would evaluate whether the 
specialty of a provider is included in the most recent staffing 
shortage determination by VA under 38 U.S.C. 7412. Under section 
7412(a), not later than September 30 of each year, the Inspector 
General of VA shall determine, certain clinical and nonclinical 
occupations for which there are the largest staffing shortages with 
respect to each VA medical center of the Department. The type of 
providers considered under proposed Sec.  17.246(a)(3) would be based 
on the list developed pursuant to 38 U.S.C. 7412(a). We note that the 
list developed pursuant to 38 U.S.C. 7412(a) is a national list (based 
on data from all VA medical centers in the country related to shortages 
of providers), and that this factor would not be evaluated in relation 
to provider types or numbers at any one VA facility. We also note that 
a covered facility would not similarly have to have a shortage of the 
type of provider on the list developed pursuant to 38 U.S.C. 7412, as 
it may be that a sufficient number of such providers at a covered 
facility could indicate the best conditions in which VA should place 
residents (as these would be the very types of providers VA needs more 
of). We would not regulate this factor more specifically, however, to 
provide VA the flexibility in assessing the list developed pursuant to 
38 U.S.C. 7412.
    Consistent with section 403(a)(4)(D) of the MISSION Act, proposed 
Sec.  17.246(a)(4) would establish that VA would evaluate whether a 
covered facility is located in the local community of a VA facility 
that has been designated by VA as an underserved facility pursuant to 
criteria developed under section 401 of Public Law 115-182. We note 
that section 403(a)(4)(D) of the MISSION Act would require VA to 
consider whether the local community is designated as underserved 
pursuant to criteria developed under section 401 of Public Law 115-182. 
Section 401 of Public Law 115-182 relates to VA's criteria to designate 
its facilities as underserved, rather than communities at large. To 
clarify any potential inconsistency between the reference to 
underserved VA facilities in section 401 and underserved communities in 
section 403, we believe a reasonable reading of section 403(a)(4)(D) 
provides for VA to consider whether covered facilities are located in a 
local community in which a VA facility has been designated as 
underserved under section 401. In developing the criteria to identify 
underserved VA facilities under section 401, VA must consider various 
factors, including the ratio of veterans to VA health care providers in 
an area, the range of clinical specialties offered, whether the local 
community is medically underserved, data on open consults, whether the 
facility is meeting the wait-time goals of the Department, and such 
other factors that VA considers important in determining which 
facilities are not adequately serving area veterans. For purposes of 
this factor, if a covered facility is located in the same Veterans 
Integrated Service Network (VISN) as a VA facility designated as 
underserved pursuant to section 401, then VA would consider that 
covered facility to be located in the same local community as the VA 
facility. We believe the service area of a VISN would allow VA to 
consider a broad range of covered facilities, but we would not regulate 
that requirement more specifically in the event that VA facility 
service area names change in the future. Using the phrase local 
community in proposed Sec.  17.246(a)(4) would also be consistent with 
section 403(a)(4)(D) of the MISSION Act, and would allow VA the 
flexibility to consider a service area that is different from a VISN in 
the future, in which case VA would clearly indicate a different 
standard in the request for proposal that is sent to VA health care 
facilities for consideration.

[[Page 6460]]

Lastly, we note that under section 401, a VA facility is characterized 
as a medical center, ambulatory care facility, and a community-based 
outpatient clinic. Proposed Sec.  17.246(a)(4) would reference VA 
facility to be consistent with section 401.
    Consistent with section 403(a)(4)(E) of the MISSION Act, proposed 
Sec.  17.246(a)(5) would establish that VA would evaluate whether the 
covered facility is located in a community designated by the Secretary 
of Health and Human Services (HHS) as a health professional shortage 
area under 42 U.S.C. 254e. Under 42 U.S.C. 254e(a)(1), a health 
professional shortage is an area in an urban or rural area that has 
been determined to have a provider shortage and which is not reasonably 
accessible to an adequately served area, a population group that has 
been determined to have such a shortage, or a public or nonprofit 
private medical facility or other public facility that has been 
determined to have such a shortage.
    Consistent with section 403(a)(4)(F) of the MISSION Act, proposed 
Sec.  17.246(a)(6) would establish that VA would evaluate whether the 
covered facility is in a rural or remote area. Proposed paragraph 
(a)(6)(i) would further interpret a rural area to mean those areas 
identified by the U.S. Census Bureau as rural. Section 403 does not 
specifically define or characterize the meaning of the term rural, and 
therefore, we believe it is rational to use the definition provided by 
the U.S. Census Bureau. The Census Bureau's classification of rural 
consists of all territory, population, and housing units located 
outside of urbanized areas and urban clusters. Interested parties are 
referred to the Census Bureau's website (https://www.census.gov/programs-surveys/geography/guidance/geo-areas/urban-rural.html) for 
additional information. Proposed paragraph (a)(6)(ii) would further 
interpret a remote area to mean an area within a zip-code designated as 
a frontier and remote area (FAR) code by the Economic Research Service 
within the United States Department of Agriculture, based on the most 
recent decennial census and to include all identified FAR code levels. 
VA would adopt this characterization of a remote area because it does 
not have a similarly comprehensive characterization of remote areas in 
statute or regulation. As we are unsure of the level of familiarity 
with this standard related to a frontier or remote area, as opposed to 
the characterization of a rural area as proposed above, we provide the 
following background. The Economic Research Service within the United 
States Department of Agriculture has developed ZIP-code-level FAR 
designations, where the phrase frontier and remote is used to describe 
territory characterized by some combination of low population size and 
high geographic remoteness. The most updated set of FAR codes is based 
on urban-rural data from the 2010 decennial census and provides four 
FAR definition levels, ranging from one that is relatively inclusive 
(12.2 million FAR level one residents) to one that is more restrictive 
(2.3 million FAR level four residents). FAR areas are defined in 
relation to the time it takes to travel by car to the edges of nearby 
urban areas, and four FAR levels are necessary because rural areas 
experience degrees of remoteness at higher or lower population levels 
that affect access to different types of goods and services. For 
instance, a larger number of people live significant distances from 
cities providing high order goods and services, such as advanced 
medical procedures, stores selling major household appliances, regional 
airport hubs, or professional sports franchises, and level one FAR 
codes are meant to approximate this degree of remoteness. A smaller 
number of people have difficulty accessing low order goods and 
services, such as grocery stores, gas stations, and basic health-care 
services, and level-four FAR codes more closely coincide with this 
higher degree of remoteness. Other types of goods and services--
clothing stores, car dealerships, movie theaters--fall somewhere in 
between. We would use all four levels of FAR codes to characterize 
remote areas for purposes of these proposed rules.
    Consistent with 403(a)(4)(G) of the MISSION Act, proposed Sec.  
17.246(a)(7) would implement VA's permissive authority, for purposes of 
resident placements under PPGMER, to evaluate other criteria that VA 
considers important in determining those covered facilities that are 
not adequately serving area veterans. Proposed paragraph (a)(7) would 
include a non-exhaustive list of criteria VA would consider. Proposed 
Sec.  17.246(a)(7)(i) would establish that VA may evaluate the 
proximity of a non-VA covered facility to a VA health care facility, 
such that residents placed in non-VA covered facilities may also 
receive training in VA health care facilities. This criterion would be 
useful in assessing to what extent residents placed in non-VA covered 
facilities could reasonably be expected to travel to also receive 
resident training in VA health care facilities, consistent with the 
requirement that the discretionary criteria in section 403(a)(4)(G) of 
the MISSION Act relate to identifying those covered facilities that may 
not be adequately serving area veterans. For purposes of assessing the 
criterion in proposed Sec.  17.246(a)(7)(i), VA would define a VA 
health care facility to mean any VA location where VA physicians 
provide care to Veterans, such as a VA medical center, independent 
outpatient clinic, domiciliary, nursing home (community living center), 
residential treatment program, and any of a variety of community-based 
clinics. We note that this definition is broader than the term ``VA 
facility'' under proposed Sec.  17.246(a)(4), as proposed Sec.  17.246 
would relate to an independent characterization of the term VA facility 
under section 401 of Public Law 115-182. We also note that proposed 
Sec.  17.246(a)(7)(i) does not create any requirement for residents 
placed under the PPGMER to necessarily rotate to VA facilities to 
receive training, it is merely one additional criterion that VA may 
assess in accordance with section 403(a)(4)(G) of the MISSION Act. Any 
requirement for rotation to VA facilities for residents placed under 
the PPGMER, like other training requirements for such residents, would 
be controlled by the agreements formed as will be discussed in the 
section of this rule that addresses proposed Sec.  17.248. Proposed 
Sec.  17.246(a)(7)(ii) would establish that VA may evaluate 
programmatic considerations related to establishing or maintaining a 
sustainable residency program when determining facilities are not 
adequately serving area veterans, for purposes of placing residents in 
covered facilities. These programmatic considerations would include but 
not be limited to whether the stated objectives of a residency program 
align with VA's workforce needs; the likely or known available 
educational infrastructure of a new residency program or existing 
residency program (including the ability to attract and retain 
qualified teaching faculty); and the ability of the residency program 
to remain financially sustainable after the cessation of any financial 
support from VA that may be furnished under proposed Sec.  17.248. 
These considerations would allow VA to assess the likelihood of a 
residency program to be successful and sustainable, thus ensuring VA's 
resources in funding residents would be well placed to support the 
PPGMER.
    Proposed Sec.  17.246(b) would establish that there would be a 
prioritized placement of residents under the PPGMER to no fewer than 
100 residents for the duration in which the PPGMER

[[Page 6461]]

is administered in covered facilities operated by either the Indian 
Health Service, an Indian tribe, a tribal organization, or covered 
facilities located in the same areas as VA facilities designated by VA 
as underserved pursuant to criteria developed under section 401 of 
Public Law 115-182. This minimum number of residents to be placed in 
these specific covered facilities is consistent with the requirement in 
section 403(a)(5) of the MISSION Act. Proposed Sec.  17.246(b) would 
further clarify that the placement of these 100 residents would be for 
the duration in which the PPGMER is administered, because we do not 
read anything in section 403(a)(5) to require these 100 residents to be 
the first residents placed under this pilot program. We also interpret 
section 403(a)(5) of the MISSION Act to require VA to consider priority 
placement of at least 100 residents and not 100 resident positions, 
which is consistent with a plain reading of section 403(a)(5). We 
clarify this point because we would define the term resident to permit 
multiple residents to occupy a single resident position as appropriate. 
We note that, generally, residents placed through the PPGMER could be 
at any point in their residency, and that any such placement at any 
point in a residency would qualify amongst the 100 priority placements 
in proposed Sec.  17.246.

Sec.  17.247 Determination process for placement of residents.

    We reiterate from earlier in this proposed rule that VA does not 
interpret that section 403 authorizes a public funding opportunity 
through which covered facilities or any other entity may apply or 
submit a proposal to VA, for VA to then consider having residents 
placed in covered facilities and paying their stipends or benefits, or 
to reimburse certain costs of new residency programs. The introductory 
text to proposed Sec.  17.247 would therefore state that section 403 of 
Public Law 115-182 does not authorize a grant program or cooperative 
agreement program through which covered facilities or any other entity 
may apply for residents to be placed in covered facilities or to apply 
for VA to pay or reimburse costs under Sec.  17.248 (where proposed 
Sec.  17.248, as discussed later in this rulemaking, would establish 
VA's payment of resident stipends and benefits, and VA's reimbursement 
of certain costs of new residency programs). The introductory text to 
proposed Sec.  17.247 would further establish that VA will therefore 
not conduct a public solicitation to determine those covered facilities 
in which residents may be places or to determine costs that may be paid 
or reimbursed under Sec.  17.248, but that VA would instead make such 
determinations based on the parameters further established in proposed 
Sec.  17.247(a) through (c).
    Proposed Sec.  17.247(a) would state that VA Central Office will 
issue a request for proposal (RFP) to VA health care facilities to 
announce opportunities for residents to be placed in covered facilities 
and to have costs paid or reimbursed under Sec.  17.248 (as explained 
later in this rulemaking, proposed Sec.  17.248 will outline the types 
of costs available to be paid or reimbursed by VA under the PPGMER.) 
Proposed Sec.  17.247(a) would further state that the RFP issued by VA 
Central Office would describe, at a minimum: (1) Consideration factors, 
to include the criteria in Sec.  17.246, that will be used to evaluate 
any responses to the RFP, as well as the relative importance of such 
consideration factors; (2) information required to be in any responses 
to the RFP; and (3) the process to submit a response to the RFP. Under 
proposed Sec.  17.247(a), the RFP issued by VA Central Office would 
provide education to VA health care facilities in the evaluation of the 
factors in proposed Sec.  17.246(a)(1) through (7) to determine 
clinical need for providers in an area, and the VA health care 
facilities would then assess covered facilities that may be located in 
such areas to weigh the factors and determine those covered facilities 
that meet the criteria under the RFP. We reiterate from earlier in this 
rulemaking that VA Central Office conducts an RFP process to administer 
its more general GME programming under section 7302(e), and VA 
envisions a similar process to be followed under the PPGMER, where VA 
Central Office notifies VA facilities (directly, or through channels 
via Veterans Integrated Service Networks) of a forthcoming RFP cycle 
for the funding of residents or certain resident program costs. The RFP 
in turn would provide VA health care facilities with all required 
information to complete a response, including a clear statement of the 
consideration factors and submission instructions to include any 
submission dates as applicable and points of contact for questions. The 
RFP will additionally provide a general timeline in which VA health 
care facilities will conduct the process of assessing the consideration 
factors and reaching out to covered facilities regarding the RFP. The 
consideration factors in the RFP for the PPGMER would include those 
consideration factors expressly stated in section 403(a)(4) and in 
proposed Sec.  17.246, and the relative importance of such factors 
(e.g., whether they may be weighted differently). We reiterate from 
earlier in the preamble that the consideration factors in proposed 
Sec.  17.246 would not be weighted in the regulatory text itself to 
allow VA the flexibility to consider the relative importance of factors 
over the duration of the pilot, as the relative importance of those 
factors may change. For instance, an RFP issued by VA Central Office 
for the PPGMER could indicate that there would be more weight assigned 
to areas that issued responses with covered facilities operated by 
Indian Health Service, an Indian tribe, a tribal organization, or 
covered facilities located in the same areas as VA facilities 
designated by VA as underserved, as these are deemed priority placement 
factors for the PPGMER in section 403(a)(5). Alternatively, an RFP 
issued by VA Central Office for the PPGMER could indicate that there 
would be more weight assigned depending on the specialty of a provider 
included in the most recent staffing shortage determination by VA under 
38 U.S.C. 7412.
    Proposed Sec.  17.247(b) would then establish that VA health care 
facilities, in collaboration with covered facilities, will submit 
responses to the RFP to VA Central Office. This language would permit 
only VA health care facilities to submit responses to the RFP issued by 
VA Central Office, to further reinforce VA's interpretation that 
section 403 does not authorize a public funding opportunity for which 
covered facilities may apply directly or submit a proposal to be 
considered. VA health care facilities would assess covered facilities 
in their areas that participate with institutions that sponsor medical 
educational programs (most often a medical school or teaching 
hospital), where typically VA already has academic partnerships with 
such sponsoring institutions and the RFP details the involvement of any 
particular sponsoring institution. However, VA would not be prevented 
in these proposed regulations from assessing covered facilities that 
did not have educational relationships with sponsoring institutions, 
and covered facilities would not be prevented from initiating contact 
with a VA facility to determine if such covered facilities may meet the 
requirements to participate in the PPGMER as detailed in the RFP. We 
reiterate that the RFP will provide a general timeline in which VA 
health

[[Page 6462]]

care facilities will conduct the process of assessing the consideration 
factors and reaching out to covered facilities regarding the RFP.
    Proposed Sec.  17.247(c) would then state that VA Central Office 
will evaluate responses to the RFP from VA health care facilities and 
will determine those covered facilities where residents may be placed 
and costs under Sec.  17.248 are paid or reimbursed. In its evaluation, 
VA Central Office will assess the consideration factors established in 
the RFP to include the criteria in Sec.  17.246, and will weigh those 
factors as their relative importance would be established in the RFP.

Sec.  17.248 Costs of funding residents and new residency programs.

    Proposed Sec.  17.248 would establish the types of costs that VA 
may fund under the PPGMER to place residents in covered facilities or 
to reimburse certain costs incurred by new residency programs in 
accordance with sections 403(a)(6) and (b)(1)-(b)(5) of the MISSION 
Act. Section 403(a)(6) authorizes VA to pay stipends and provide 
benefits for residents in positions created under section 403(a)(1), 
and section 403(b) authorizes VA to reimburse certain new residency 
program costs if VA places a resident in such a program.
    To address a few preliminary matters, we note that section 
403(a)(6) is a discretionary authority to pay stipends and benefits of 
residents, regardless of whether they have been assigned to a VA 
facility, and that VA would retain this discretion in proposed Sec.  
17.248 to include establishing any general restrictions or conditions 
for such payments. We further interpret the discretionary nature of 
section 403(a)(6) to authorize VA's funding of resident stipends and 
benefits either through a direct payment or reimbursement mechanism, in 
accordance with any contract, agreement, or other arrangement VA has 
legal authority to form (possibly, to include payment mechanisms as 
applicable that VA currently uses to administer its more general GME 
programming under 38 U.S.C. 7302(e)). Conversely, we interpret section 
403(b) as a mandatory authority to reimburse certain new resident 
program costs if VA places a resident in such programs, and further 
that subsections (b)(1)-(b)(5) establish the mandatory costs that must 
be reimbursed. However, we do not interpret that section 403(b) limits 
VA's authority to determine restrictions or criteria for such 
reimbursement. Lastly, consistent with section 403(a)(3), and other 
authorities under which VA may legally enter into contracts, 
agreements, or other arrangements, VA would enter into such contracts, 
agreements, or other arrangements to administer the PPGMER. It would be 
those contracts, agreements, or other arrangements that would establish 
the terms to control costs that could be funded.
    The introductory text of proposed Sec.  17.248 would establish that 
once VA determines in which covered facilities residents will be 
placed, in accordance with Sec. Sec.  17.246 through 17.247, payment or 
reimbursement of certain costs would be authorized. Proposed Sec.  
17.248(a) would establish the first category of funding available under 
the PPGMER, related to resident stipends and benefits, consistent with 
section 403(a)(6). Proposed Sec.  17.248(a) would establish that, for 
residents placed in covered facilities by VA, VA may pay only the 
proportionate cost of resident stipends and benefits that are 
associated with residents participating in educational activities 
directly related to the PPGMER. This language is intended to limit 
payments of stipend and benefits to only those educational activities 
that support the PPGMER, to prevent VA's payment for educational 
activities a resident may complete when they may engage in duties or 
responsibilities associated with portions of their training not 
associated with the PPGMER (such as when a resident may have portions 
of their training paid for by other entities not engaged with the 
PPGMER). We clarify that educational activities directly related to the 
PPGMER could be associated with the treatment of non-veteran patients, 
as section 403(a)(6) of the MISSION Act clearly permits VA to pay 
stipends and benefits for residents outside of VA facilities, and 
section 403(b) permits VA to reimburse certain costs associated with 
new residency programs established in covered facilities, which 
includes non-VA facilities. More generally, a primary purpose of VA's 
administration of GME programming under 38 U.S.C. 7302(e), and under 
section 403 of the MISSION Act by extension, is to fulfill one of VA's 
missions under 38 U.S.C. 7302 to assist in providing an adequate supply 
of health personnel to the United States. We reiterate from the 
discussion of proposed Sec.  17.246(a)(7)(i) that this rule would not 
create any requirement for residents placed under the PPGMER to 
necessarily rotate to VA health care facilities to receive training, 
and any such requirement (as with other training requirements for 
PPGMER residents) would be controlled by the agreements formed as 
discussed further in this section of the rule related to proposed Sec.  
17.248. Proposed Sec.  17.248(a) would further state that VA's payment 
of stipends and benefits would be in accordance with any contract, 
agreement, or other arrangement VA has legal authority to form. In 
addition, such stipends and benefits will not exceed VA's established 
maximum amounts for payments under any existing GME agreements. This 
language intends to establish that any criteria or restrictions related 
to VA's payment of stipends and benefits would be clearly indicated in 
contracts, agreements, or other arrangements outside of the proposed 
rule. This language would allow VA the flexibility to establish payment 
parameters as would be relevant to a covered facility, within the 
appropriate purchasing or other mechanisms that VA may legally use, to 
include an agreement permitted under section 403(a)(3) of Public Law 
115-182. We note that VA would be bound by any legal requirements as 
they exist outside of this proposed rule with regards to these other 
authorities to enter into contracts, agreements, or other arrangements. 
Proposed Sec.  17.248(a) would not state or reference these other 
authorities, or the resulting payment instruments, however, to provide 
VA and covered facilities the flexibility that would be needed to 
properly implement the payment of resident stipends and benefits.
    Proposed Sec.  17.248(b) would establish that VA may reimburse 
certain costs associated with new residency programs, consistent with 
section 403(b)(1)-(5) of the MISSION Act. Consistent with section 
403(b), proposed Sec.  17.248(b)(1) would establish that if a covered 
facility establishes a new residency program in which VA places a 
resident, VA will reimburse certain costs as further detailed in 
proposed Sec.  17.248(b)(1)(i) through (v), where the following costs 
in proposed paragraphs (b)(1)(i) through (v) mirror the types of costs 
established in sections 403(b)(1)-(5), which are: Curriculum 
development costs; recruitment and retention of faculty costs; 
accreditation costs; faculty salary costs; and resident education 
expense costs. Each of the types of costs established in proposed Sec.  
17.248(b)(1)(i) through (v) would be further characterized by the 
following non-exhaustive examples: (1) Curriculum development costs 
would include but not be limited to costs associated with needs 
analysis, didactic activities, materials, equipment, consultant fees, 
and instructional design; (2) recruitment and retention of faculty 
costs would include but not be

[[Page 6463]]

limited to costs associated with advertising available faculty 
positions, and monetary incentives to fill such positions such as 
relocation costs and educational loan repayment; (3) accreditation 
costs would include but not be limited to the administrative fees 
incurred by a covered facility in association with applying for only 
initial accreditation of the program by the Accreditation Council for 
Graduate Medical Education; (4) faculty salary costs would include only 
the proportionate cost of faculty performing duties directly related to 
the PPGMER; and (5) resident education expense costs, to include but 
not be limited to costs associated with the required purchase of 
medical equipment and required training, national resident match 
program participation fees, and residency program management software 
fees. We further note that faculty salary costs in proposed Sec.  
17.248(b)(1)(iv) would have a similar qualifying restriction as with 
resident stipends and benefits in proposed Sec.  17.248(a), where 
faculty salary costs would be limited to only the proportionate cost of 
faculty performing duties directly related to the PPGMER. This 
restriction would provide an express notice that VA would not, for 
instance, reimburse costs for any portion of salary of an attending 
physician that correlates with supervising residents that were not 
participating in the PPGMER, as it may be the case that a group of 
residents being supervised by an attending physician is not fully 
comprised of PPGMER participants. Similar to proposed Sec.  17.248(a), 
proposed Sec.  17.248(b) would further state that VA's reimbursement of 
certain costs associated with a new residency program would be in 
accordance with any contract, agreement, or other arrangement VA has 
legal authority to form, and that reimbursements for authorized costs 
may not exceed VA's established maximum amounts for payment under any 
existing GME agreements. This language intends to establish that any 
criteria or restrictions related to VA's reimbursement of these costs 
would be clearly indicated in contracts, agreements, or other 
arrangements outside of the proposed rule, again to allow the 
flexibility to establish parameters as would be relevant and within the 
appropriate purchasing or reimbursement mechanisms that VA may legally 
use. We note that VA would be bound by any legal requirements as exist 
outside of this proposed rule with regards to these other authorities 
to enter into contracts, agreements, or other arrangements, but that 
proposed Sec.  17.248(b) would not state or reference these other 
authorities, again to provide VA and covered facilities the flexibility 
that would be needed to properly implement the reimbursement of these 
costs.
    Although proposed Sec.  17.248(a) and (b) would not state any 
express criteria or restrictions that might exist in contracts, 
agreements, or other arrangements that would control the payment of 
resident stipends or benefits or reimbursement of certain new residency 
program costs, some examples of such criteria or restrictions could 
include: Establishing a discontinuation date for payments or 
reimbursements; establishing limitations on payments proportionate to 
the number of residents placed by VA; establishing any fixed dollar 
amount limits as found relevant or appropriate; or establishing a 
restricted look-back period, whereby VA would not reimburse the costs 
of, for instance, certain curriculum development costs that might occur 
prior to a specified timeframe before VA places a resident. Similarly, 
proposed Sec.  17.248(a) and (b) would not expressly list the legal 
authorities or types of contracts, agreements, or other arrangements 
under which VA may pay resident stipends or benefits, or reimburse 
certain costs of new residency programs, or more generally to 
administer other typical aspects of GME programming through the PPGMER. 
Again, this lack of specificity with regards to identifying specific 
legal instruments in regulation would allow VA maximum flexibility to 
administer the PPGMER. However, we reiterate from earlier in this 
rulemaking that VA would otherwise be bound by any legal requirements 
as exist outside of this proposed rule with regards to these other 
authorities to enter into contracts, agreements, or other arrangements. 
We also reiterate from earlier in this rulemaking that VA would seek to 
administer the PPGMER in much the same manner as VA's more general GME 
programming is administered under 38 U.S.C. 7302(e), as would be 
applicable and permissible, which would likely include the forming of 
certain agreements between VA and sponsoring institutions to establish 
responsibilities for educating residents and to control VA's funding of 
residents and certain costs of new residency programs, or the evidence 
that such agreements were formed between sponsoring institutions and 
non-VA covered facilities. We therefore provide the following examples 
of types of agreements VA uses to administer its more general GME 
programming under section 7302(e), to provide some idea of whether the 
same or similar instruments might also be used to administer the 
PPGMER. Under VA's more general GME programming pursuant to 38 U.S.C. 
7302(e), VA uses an affiliation agreement to delineate the duties and 
responsibilities regarding the training of residents, where an 
affiliation agreement is a central part of the relationship between VA 
and the affiliated institution and may involve specific provisions 
related to patient care, education, or research. Affiliated 
institutions can include academic institutions and other sponsoring 
institutions such as community hospitals, clinics, state agencies 
military treatment facilities, or Federal Health Education Consortia. 
VA would look to an affiliation agreement or similar instrument to form 
similar relationships with entities to administer the PPGMER. We note 
that VA policy currently recognizes sponsoring institutions and other 
entities as able to enter into an affiliation agreement prior to a 
subject residency program receiving comprehensive or full 
accreditation, such as an institution whose residency program may have 
some stage of Accreditation Council for Graduate Medical Education 
(ACGME) initial or provisional accreditation. See VHA Handbook 1400.03, 
Veterans Health Administration Educational Relationships. Under the 
PPGMER, we would retain VA's ability to enter into affiliation 
agreements or similar instruments or look to the formation of such 
instruments between sponsoring institutions and non-VA covered 
facilities, where the subject residency programs may have some form of 
initial or provisional ACGME accreditation.
    Under VA's more general GME programming pursuant to 38 U.S.C. 
7302(e), a disbursement agreement is used to administer stipend and 
benefits payments to residents in VA facilities. A disbursement 
agreement is an agreement through which VA allows a disbursing agent to 
administer salary payments and fringe benefits for medical residents 
assigned to a VA facility, where the disbursing agent may be the 
sponsoring institution for the residency training program itself or an 
entity delegated by the sponsoring institution(s) to handle stipend and 
benefit disbursements (e.g., a graduate medical education consortium). 
VA may look to a similar instrument to administer stipend and benefits 
payments for residents it places in non-VA facilities under the PPGMER, 
or any other contract, agreement, or

[[Page 6464]]

other arrangement VA may enter into as permissible and applicable.
    Under VA's more general GME programming pursuant to 38 U.S.C. 
7302(e), VA uses educational cost contracts to pay pro-rated 
educational costs of the affiliated institutions sponsoring residency 
programs. These educational cost contracts are entered into pursuant to 
38 U.S.C. 8153, where the relevant health care resource being purchased 
includes health care support resources and administrative resources to 
include the operation of a residency program. The pro-rated educational 
costs to be covered are set forth in an educational cost contract in 
proportion to the number of residents that actually rotate to a VA 
facility. VA may look to a similar instrument to administer payments of 
costs associated with the PPGMER, or any other contract, agreement, or 
other arrangement VA may enter into as permissible and applicable.
    VA also generally uses memoranda of agreement or understanding (MOA 
or MOU) as legally permissible to enter into agreements with entities 
and may look to such instruments to administer payments of costs 
associated with the PPGMER or to administer other aspects of the 
PPGMER. For instance, a MOA or MOU might be used to clearly indicate to 
a covered facility the extent of reimbursable costs allowable under 
proposed Sec.  17.248(b), and could also include instructions for 
submitting to VA invoices of such costs and timeframes and modes of 
reimbursement.
    Proposed Sec.  17.248(b)(2) would lastly establish that VA 
considers new residency programs as only those residency programs that 
have initial ACGME accreditation or have continued ACGME accreditation 
without outcomes, and have not graduated an inaugural class, at the 
time VA has determined those covered facilities where residents will be 
placed under Sec.  17.247(c). We believe the ACGME status of initial 
accreditation or continued ACGME accreditation without outcomes 
captures those residency programs still in development and that would 
benefit from VA's reimbursement of certain start-up costs in 
establishing a residency program. The additional criterion that such 
programs must not have graduated an inaugural class further supports 
that VA funding will not go to residency programs that otherwise have 
fully functioning curriculums and infrastructure to produce graduates. 
The ACGME status of initial accreditation is considered a developmental 
stage where residency programs can accept residents, and this status 
allows for site visits to determine compliance with relevant ACGME 
standards. As background, when a status of initial accreditation is 
conferred on a sponsoring institution or program, that institution or 
program will have a full site visit within two years of the effective 
date of initial accreditation, where the effective date is the date of 
the decision by the ACGME review committee (or, any effective date such 
committee may apply retroactively to the beginning of the academic 
year). If a residency program does not matriculate residents in the 
first academic year after receiving a status of initial accreditation, 
a site visit is conducted within three years from the effective date of 
such accreditation. If a sponsoring institution or program demonstrates 
substantial compliance at the subsequent review, the ACGME review 
committee may confer a status of continued accreditation or continued 
accreditation without outcomes. Proposed Sec.  17.248(b)(2) would only 
include the ACGME status of continued accreditation without outcomes, 
beyond the initial accreditation stage, because continued accreditation 
without outcomes indicates that no residents have graduated, which in 
turn may indicate that the residency program still requires VA funding 
of certain costs to fully develop its curriculum and infrastructure.

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. 
The Office of Information and Regulatory Affairs has determined that 
this rule is a significant regulatory action under Executive Order 
12866. The Regulatory Impact Analysis associated with this rulemaking 
can be found as a supporting document at www.regulations.gov.

Consultation and Coordination With Indian Tribal Governments

    We have analyzed this proposed rule in accordance with the 
principles set forth in Executive Order 13175. We have tentatively 
determined that the rule does not contain policies that would have a 
substantial direct effect on one or more Indian Tribes, on the 
relationship between the Federal Government and Indian Tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian Tribes. The Agency solicits comments from tribal 
officials on any potential impact on Indian Tribes from this proposed 
action.

Regulatory Flexibility Act

    The Secretary hereby certifies that this rulemaking would 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. The residents to be placed for training in covered facilities and 
to have certain stipend and benefits costs paid for by VA are 
individuals and not small entities. To the extent that any covered 
facilities are small entities, there is no significant economic impact 
because the rulemaking would only permit VA's reimbursement and not 
payment of certain costs associated with certain start up costs 
associated with new residency programs, there is no funding opportunity 
for which covered facilities may apply to be considered and otherwise 
no economic gain or loss for covered facilities associated with this 
rule. Therefore, pursuant to 5 U.S.C. 605(b), the initial and final 
regulatory flexibility analysis requirements of 5 U.S.C. 603 and 604 do 
not apply.

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 the 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 proposed rule would have no such 
effect on State, local, and tribal governments, or on the private 
sector.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3507) requires that 
VA consider the impact of paperwork and other information collection 
burdens imposed on the public. 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 Office of Management and Budget (OMB) control number. 
This proposed rule contains no provisions constituting a collection of 
information under the Paperwork

[[Page 6465]]

Reduction Act of 1995 (44 U.S.C. 3501-3521).

Assistance Listing

    The Assistance Listing program numbers and titles for the programs 
affected by this document are 64.011--Veterans Dental Care; 64.026--
Veterans State Adult Day Health Care; 64.040--VHA Inpatient Medicine; 
64.041--VHA Outpatient Specialty Care; 64.042--VHA Inpatient Surgery; 
64.043--VHA Mental Health Residential; 64.045--VHA Outpatient Ancillary 
Services; 64.046--VHA Inpatient Psychiatry; 64.047--VHA Primary Care; 
64.048--VHA Mental Health clinics; 64.050--VHA Diagnostic Care; 
64.054--Research and Development.

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.

Signing Authority

    Denis McDonough, Secretary of Veterans Affairs, approved this 
document on October 8, 2021, 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.

Consuela Benjamin,
Regulations Development Coordinator, Office of Regulation Policy & 
Management, Office of General Counsel, Department of Veterans Affairs.

    For the reasons stated in the preamble, the Department of Veterans 
Affairs proposes to amend 38 CFR part 17 as follows:

PART 17--MEDICAL

0
1. Amend the authority citation for part 17 by adding an entry for 
Sec. Sec.  17.243 through 17.248 in numerical order to read in part as 
follows:

    Authority: 38 U.S.C. 501, and as noted in specific sections.
* * * * *
    Sections 17.243 through 17.248 are also issued under 38 U.S.C. 7302 
note.
* * * * *
0
2. Add an undesignated center heading and Sec. Sec.  17.243 through 
17.248 to read as follows:

VA Pilot Program on Graduate Medical Education and Residency

Sec.
17.243 Purpose and scope.
17.244 Definitions.
17.245 Covered facilities.
17.246 Consideration factors for placement of residents.
17.247 Determination process for placement of residents.
17.248 Costs of placing residents and new residency programs.

VA Pilot Program on Graduate Medical Education and Residency


Sec.  17.243  Purpose and scope.

    (a) Purpose. This section and Sec. Sec.  17.244 through 17.248 
implement the VA Pilot Program on Graduate Medical Education and 
Residency (PPGMER), which permits placement of residents in existing or 
new residency programs in covered facilities and permits VA to 
reimburse certain costs associated with establishing new residency 
programs in covered facilities, as authorized by section 403 of Public 
Law 115-182.
    (b) Scope. This section and Sec. Sec.  17.244 through 17.248 apply 
only to the PPGMER as authorized under section 403 of Public Law 115-
182, and not to VA's more general administration of graduate medical 
residency programs in VA facilities as authorized under 38 U.S.C. 
7302(e).


Sec.  17.244  Definitions.

    For purposes of Sec. Sec.  17.243 through 17.248:
    Benefit means a benefit provided by VA to a resident that has 
monetary value in addition to a resident's stipend, which may include 
but not be limited to health insurance, life insurance, worker's 
compensation, disability insurance, Federal Insurance Contributions Act 
taxes, and retirement contributions.
    Covered facility means any facility identified in Sec.  17.245.
    Educational activities mean all activities in which residents 
participate to meet educational goals or curriculum requirements of a 
residency program, to include but not be limited to: Clinical duties; 
research; attendance in didactic sessions; attendance at facility 
committee meetings; scholarly activities that are part of an accredited 
training program; and approved educational details.
    Resident means physician trainees engaged in post-graduate 
specialty or subspecialty training programs that are either accredited 
by the Accreditation Council for Graduate Medical Education or in the 
application process for such accreditation. A resident may include an 
individual in their first post-graduate year (PGY-1) of training (often 
referred to as an intern), and an individual who has completed training 
in their primary specialty and continues training in a subspecialty 
graduate medical education program (generally referred to a fellow).
    Stipend means the annual salary paid by VA for a resident.
    VA health care facility means any VA-owned or VA-operated location 
where VA physicians provide care to Veterans, to include but not be 
limited to a VA medical center, independent outpatient clinic, 
domiciliary, nursing home (community living center), residential 
treatment program, and community-based clinic.


Sec.  17.245  Covered facilities.

    A covered facility is any of the following:
    (a) A VA health care facility;
    (b) A health care facility operated by an Indian tribe or tribal 
organization, as those terms are defined in 25 U.S.C. 5304 and at 25 
CFR 273.106;
    (c) A health care facility operated by the Indian Health Service;
    (d) A federally-qualified health center as defined in 42 U.S.C. 
1396d(l)(2)(B);
    (e) A health care facility operated by the Department of Defense; 
or
    (f) Other health care facilities deemed appropriate by VA.


Sec.  17.246  Consideration factors for placement of residents.

    (a) General. When determining in which covered facilities residents 
will be placed, VA shall consider the clinical need for health care 
providers in an area, as determined by VA's evaluation of the following 
factors:
    (1) The ratio of veterans to VA providers for a standardized 
geographic area surrounding a covered facility, including a separate 
ratio for general practitioners and specialists.
    (i) For purposes of paragraphs (a)(1) and (2) of this section, 
standardized geographic area means the county in which the covered 
facility is located.
    (ii) VA may consider either or both of the ratio(s) for general 
practitioners and specialists, where a higher ratio of veterans to VA 
providers indicates a higher need for health care providers in an area.
    (2) The range of clinical specialties of VA and non-VA providers 
for a standardized geographic area surrounding a covered facility, 
where the presence of fewer clinical specialties indicates a higher 
need for health care providers in an area.

[[Page 6466]]

    (3) Whether the specialty of a provider is included in the most 
recent staffing shortage determination by VA under 38 U.S.C. 7412.
    (4) Whether the covered facility is in the local community of a VA 
facility that has been designated by VA as an underserved facility 
pursuant to criteria developed under section 401 of Public Law 115-182.
    (5) Whether the covered facility is located in a community that is 
designated by the Secretary of Health and Human Services as a health 
professional shortage area under 42 U.S.C. 254e.
    (6) Whether the covered facility is in a rural or remote area, 
where:
    (i) A rural area means an area identified by the U.S. Census Bureau 
as rural; and
    (ii) A remote area means an area within a zip-code designated as a 
frontier and remote area (FAR) code by the Economic Research Service 
within the United States Department of Agriculture, based on the most 
recent decennial census and to include all identified FAR code levels.
    (7) Such other criteria as VA considers important in determining 
those covered facilities that are not adequately serving area veterans. 
These factors may include but are not limited to:
    (i) Proximity of a non-VA covered facility to a VA health care 
facility, such that residents placed in non-VA covered facilities may 
also receive training in VA health care facilities.
    (ii) Programmatic considerations related to establishing or 
maintaining a sustainable residency program, such as: Whether the 
stated objectives of a residency program align with VA's workforce 
needs; the likely or known available educational infrastructure of a 
new residency program or existing residency program (including the 
ability to attract and retain qualified teaching faculty); and the 
ability of the residency program to remain financially sustainable 
after the cessation of funding that VA may furnish under Sec.  17.248.
    (b) Priority in placements. For the duration in which the PPGMER is 
administered, no fewer than 100 residents will be placed in covered 
facilities operated by either the Indian Health Service, an Indian 
tribe, a tribal organization, or covered facilities located in the same 
areas as VA facilities designated by VA as underserved pursuant to 
criteria developed under section 401 of Public Law 115-182.


Sec.  17.247  Determination process for placement of residents.

    Section 403 of Public Law 115-182 does not authorize a grant 
program or cooperative agreement program through which covered 
facilities or any other entity may apply for residents to be placed in 
covered facilities or to apply for VA to pay or reimburse costs under 
Sec.  17.248. VA therefore will not conduct a public solicitation to 
determine those covered facilities in which residents may be placed or 
to determine costs that may be paid or reimbursed under Sec.  17.248. 
VA will instead determine those covered facilities in which residents 
may be placed and determine any costs to be paid or reimbursed under 
Sec.  17.248 in accordance with the following parameters:
    (a) VA Central Office will issue a request for proposal (RFP) to VA 
health care facilities to announce opportunities for residents to be 
placed in covered facilities and to have costs paid or reimbursed under 
Sec.  17.248. This RFP will describe, at a minimum:
    (1) Consideration factors to include the criteria in Sec.  17.246, 
that will be used to evaluate any responses to the RFP, as well as the 
relative importance of such consideration factors;
    (2) Information required to be in any responses to the RFP; and
    (3) The process to submit a response to the RFP.
    (b) VA health care facilities, in collaboration with covered 
facilities, will submit responses to the RFP to VA Central Office.
    (c) Consistent with paragraph (a) of this section, VA Central 
Office will evaluate responses to the RFP from VA health care 
facilities and will determine those covered facilities where residents 
may be placed and costs under Sec.  17.248 are paid or reimbursed.


Sec.  17.248  Costs of placing residents and new residency programs.

    Once VA determines in which covered facilities residents will be 
placed in accordance with Sec. Sec.  17.246 through 17.247, payment or 
reimbursement is authorized for the following costs:
    (a) Resident stipends and benefits. For residents placed in covered 
facilities, VA may pay only the proportionate cost of resident stipends 
and benefits that are associated with residents participating in 
educational activities directly related to the PPGMER, in accordance 
with any contract, agreement, or other arrangement VA has legal 
authority to form.
    (b) Costs associated with new residency programs. (1) If a covered 
facility establishes a new residency program in which a resident is 
placed, VA will reimburse the following costs in accordance with any 
contract, agreement, or other arrangement VA has legal authority to 
form.
    (i) Curriculum development costs, to include but not be limited to 
costs associated with needs analysis, didactic activities, materials, 
equipment, consultant fees, and instructional design.
    (ii) Recruitment and retention of faculty costs, to include but not 
be limited to costs associated with advertising available faculty 
positions, and monetary incentives to fill such positions such as 
relocation costs and educational loan repayment.
    (iii) Accreditation costs, to include but not be limited to the 
administrative fees incurred by a covered facility in association with 
applying for only initial accreditation of the program by the 
Accreditation Council for Graduate Medical Education (ACGME).
    (iv) Faculty salary costs, to include only the proportionate cost 
of faculty performing duties directly related to the PPGMER.
    (v) Resident education expense costs, to include but not be limited 
to costs associated with the required purchase of medical equipment and 
required training, national resident match program participation fees, 
and residency program management software fees.
    (2) VA considers new residency programs as only those residency 
programs that have initial ACGME accreditation or have continued ACGME 
accreditation without outcomes, and have not graduated an inaugural 
class, at the time VA has determined those covered facilities where 
residents will be placed under Sec.  17.247(c).

[FR Doc. 2022-02292 Filed 2-3-22; 8:45 am]
BILLING CODE 8320-01-P