39514 Federal Register / Vol. 63, No. 141 /Thursday, July 23, 1998 /Rules and Regulations

(i) Nominations Related Standards

(Version 1.2, July 31, 1997), with the

addition of standards 1.1.17 through

1.1.19, 1.2.8 through 1.2.12, 1.3.39

through 1.3.44 (as approved March 12,

1998), the modification of standards

1.3.2, 1.3.20, 1.3.22, 1.3.32 (as approved

March 12, 1998), and the deletion of

standards 1.2.7, 1.3.10, and 1.3.12;

* * * * *

[FR Doc. 98–19368 Filed 7–22–98; 8:45 am]

BILLING CODE 6717–01–P

DEPARTMENT OF VETERANS

38 CFR Part 17

RIN 2900–AH66

Payment for Non-VA Physician

Services Associated with Either

Outpatient or Inpatient Care Provided

at Non-VA Facilities

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

SUMMARY: This document amends

Department of Veterans Affairs (VA)

medical regulations concerning

payment for non-VA physician services

that are associated with either

outpatient or inpatient care provided to

eligible VA beneficiaries at non-VA

facilities. Generally, when a servicespecific reimbursement amount has

been calculated under Medicare’s

Participating Physician Fee Schedule,

VA would pay the lesser of the actual

billed charge or the calculated amount.

Also, when an amount has not been

calculated or when the services

constitute anesthesia services, VA

would pay the amount calculated under

a 75th percentile formula or, in certain

limited circumstances, VA would pay

the usual and customary rate. Adoption

of this final rule is intended to establish

reimbursement consistency among

federal health benefits programs to

ensure that amounts paid to physicians

better represent the relative resource

inputs used to furnish a service, and to

achieve program cost reductions.

Further, consistent with statutory

requirements, the regulations continue

to specify that VA payment constitutes

payment in full.

DATES: Effective Date: August 24, 1998.

FOR FURTHER INFORMATION CONTACT:

Abby O’Donnell, Health Administration

Service (10C3), Department of Veterans

Affairs, 810 Vermont Avenue, NW,

Washington, DC 20420, (202) 273–8307.

(This is not a toll-free number.)

SUPPLEMENTARY INFORMATION: In a

document published in the Federal

Register on July 22, 1997 (62 FR 39197),

we proposed to amend the medical

regulations concerning payment

(regardless of whether or not authorized

in advance) for non-VA physician

services associated with either

outpatient or inpatient care provided to

eligible VA beneficiaries at non-VA

facilities. We provided a 60-day

comment period, which ended

September 22, 1997. We received

comments from seven sources.

For reasons explained below, the final

rule contains only one conversion factor

for calculations under Medicare’s

Participating Physicians Fee Schedule

and the proposed provisions are not

made applicable for anesthesia services.

Otherwise, no changes are made in

response to comments and, based on the

rationale set forth in the proposed rule

and this document, the provisions of the

proposed rule are adopted as a final

rule.

Comments

All of the comments opposed the

proposal based on the assertion that VA

should not lessen physician fees.

• Three commenters asserted that VA

should not use Medicare’s Participating

Physicians Fee Schedule because it was

designed for Medicare patient

populations and not for VA populations.

• One commenter opposed the use

Medicare’s Participating Physicians Fee

Schedule by asserting that VA should

not use the geographic adjustment

factors unless necessary ‘‘to achieve

explicit policy goals (e.g., targeted

adjustments for demonstrated shortfalls

in access to care).’’

• Two commenters opposed the use

of Medicare’s Participating Physicians

Fee Schedule by asserting that VA

should not use Medicare’s conversion

factors. They recommended that VA

establish a conversion factor that would

not lessen physician payments. One of

the commenters stated that the Medicare

conversion factors should not be used

because they are ‘‘constrained by

budget-neutrality and other

considerations, such as the Medicare

Volume Performance Standard system,

that are not applicable to VA.’’

• One commenter who practices

psychiatry in a semi-rural area asserted

that his expenses are high and that if VA

adopted Medicare’s Participating

Physicians Fee Schedule some

procedures would be billed at rates ‘‘at

or below’’ his overhead expense.

• Three commenters questioned

whether the availability and quality of

care would be lessened by the adoption

of Medicare’s Participating Physicians

Fee Schedule.

• One commenter asserted that before

VA adopt payment methodology based

on Medicare principles, VA should

sponsor an independent study and

consult with physician groups.

• Two commenters opposed the

adoption of the Medicare fee schedule

for anesthesia services.

Response to Comments

As stated in the proposed rule, one of

the basic reasons for conducting this

rulemaking proceeding was to achieve

cost reductions. We believe, particularly

in this budget-sensitive era, that it is

sound policy to seek to achieve this

objective. Also, we note that the

Medicare formula does not merely relate

to individuals eligible for Medicare. It is

based on principles applicable to all

individuals, including veterans.

Moreover, even though we could

establish different conversion factors

and even though VA is not ‘‘constrained

by budget-neutrality and other

considerations, such as the Medicare

Volume Performance Standard system,’’

we believe that we should not have to

pay more than the Department of Health

and Human Services pays for physician

services.

Further, regardless of whether some

physicians’ ‘‘overhead payments’’ might

be out of proportion to the amount of

payment received from VA, we do not

believe that this final rule would cause

this to be a common occurrence. In

addition, we do not expect that the

adoption of this final rule would lessen

significantly the availability and quality

of physician care for veterans, and we

believe that even without additional

studies, the rationale in the proposed

rule and this document provide an

adequate basis for this final rule.

The proposed rule was intended to

provide for reimbursement based on the

lesser of the actual billed charge or the

amount calculated under Medicare’s

Participating Physician Fee Schedule.

The formula for Medicare’s Participating

Physician Fee Schedule has been

changed (see 62 FR 59048, 59261). For

services other than anesthesia, the

Medicare formula was changed to have

one conversion factor instead of three

(previously, the Medicare formula

contained a separate conversion factor

for surgical services, nonsurgical

services, and primary care services).

Accordingly, the final rule also makes

this adjustment in the Medicare

formula.

Anesthesia Services

The Medicare formula includes

separate provisions for anesthesia

services. These separate anesthesia

provisions were not included in the

proposed rule. We intend to publish a

new proposal concerning this issue in
Federal Register / Vol. 63, No. 141 /Thursday, July 23, 1998 /Rules and Regulations 39515

the near future. Accordingly, this final

rule does not make changes regarding

anesthesia services. They remain subject

to the payment provisions for those

cases not covered by the Medicare

formula (i.e., lesser of the actual amount

billed or the amount calculated using

the 75th percentile methodology; or the

usual and customary rate if there are

fewer than 8 treatment occurrences for

a procedure during the previous fiscal

year).

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 through 612. The rule

would 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. Therefore,

pursuant to 5 U.S.C. 605(b), the 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 Numbers are 64.009, 64.010

and 64.011.

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 home care,

Philippines, Reporting and

recordkeeping requirements,

Scholarships and fellowships, Travel

and transportation expenses, Veterans.

Approved: May 8, 1998.

Togo D. West, Jr.,

Acting Secretary.

For the reasons set forth in the

preamble, 38 CFR part 17 is amended as

follows:

PART 17—MEDICAL

1. The authority citation for part 17

continues to read as follows:

Authority: 38 U.S.C. 501, 1721, unless

otherwise noted.

§ 17.55 [Amended]

2. In § 17.55, in the introductory text

remove ‘‘38 U.S.C. 1703 or 38 CFR

17.52’’ and add, in its place ‘‘38 U.S.C.

1703 and 38 CFR 17.52 of this part or

under 38 U.S.C. 1728 and 38 CFR

17.120’’; paragraph (h) is removed; and

paragraphs (i), (j) and (k) are redesigned

as paragraphs (h), (i) and (j),

respectively.

3. Section 17.56 is redesignated as

§ 17.57 and a new § 17.56 is added to

read as follows:

§ 17.56 Payment for non-VA physician

services associated with outpatient and

inpatient care provided at non-VA facilities.

(a) Except for anesthesia services,

payment for non-VA physician services

associated with outpatient and inpatient

care provided at non-VA facilities

authorized under § 17.52, or made

under § 17.120 of this part, shall be the

lesser of the amount billed or the

amount calculated using the formula

developed by the Department of Health

& Human Services, Health Care

Financing Administration (HCFA)

under Medicare’s participating

physician fee schedule for the period in

which the service is provided (see 42

CFR Parts 414 and 415). This payment

methodology is set forth in paragraph

(b) of this section. If no amount has been

calculated under Medicare’s

participating physician fee schedule or

if the services constitute anesthesia

services, payment for such non-VA

physician services associated with

outpatient and inpatient care provided

at non-VA facilities authorized under

§ 17.52, or made under § 17.120 of this

part, shall be the lesser of the actual

amount billed or the amount calculated

using the 75th percentile methodology

set forth in paragraph (c) of this section;

or the usual and customary rate if there

are fewer than 8 treatment occurrences

for a procedure during the previous

fiscal year.

(b) The payment amount for each

service paid under Medicare’s

participating physician fee schedule is

the product of three factors: a nationally

uniform relative value for the service; a

geographic adjustment factor for each

physician fee schedule area; and a

nationally uniform conversion factor for

the service. The conversion factor

converts the relative values into

payment amounts. For each physician

fee schedule service, there are three

relative values: An RVU for physician

work; an RVU for practice expense; and

an RVU for malpractice expense. For

each of these components of the fee

schedule, there is a geographic practice

cost index (GPCI) for each fee schedule

area. The GPCIs reflect the relative costs

of practice expenses, malpractice

insurance, and physician work in an

area compared to the national average.

The GPCIs reflect the full variation from

the national average in the costs of

practice expenses and malpractice

insurance, but only one-quarter of the

difference in area costs for physician

work. The general formula calculating

the Medicare fee schedule amount for a

given service in a given fee schedule

area can be expressed as: Payment =

[(RVUwork × GPCIwork) + (RVUpractice

expense × GPCIpractice expense) +

(RVUmalpractice × GPCImalpractice)] ×

CF.

(c) Payment under the 75th percentile

methodology is determined for each VA

medical facility by ranking all

occurrences (with a minimum of eight)

under the corresponding code during

the previous fiscal year with charges

ranked from the highest rate billed to

the lowest rate billed and the charge

falling at the 75th percentile as the

maximum amount to be paid.

(d) Payments made in accordance

with this section shall constitute

payment in full. Accordingly, the

provider or agent for the provider may

not impose any additional charge for

any services for which payment is made

by VA.

4. Section 17.128 is revised to read as

follows:

§ 17.128 Allowable rates and fees.

When it has been determined that a

veteran has received public or private

hospital care or outpatient medical

services, the expenses of which may be

paid under § 17.120 of this part, the

payment of such expenses shall be paid

in accordance with §§ 17.55 and 17.56

of this part.

(Authority: Section 233, Pub. L. 99–576)

[FR Doc. 98–19682 Filed 7–22–98; 8:45 am]

BILLING CODE 8320–01–U

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 52

[WI76–02–7305; FRL–6128–4]

Approval and Promulgation of State

Implementation Plan; Wisconsin; SiteSpecific SIP Revision for Amron

Corporation

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Final rule.

SUMMARY: This rulemaking finalizes the

Environmental Protection Agency’s

(EPA’s) disapproval of a site-specific

State Implementation Plan (SIP)

revision for the Amron Corporation

facility located at 525 Progress Avenue