58646 Federal Register / Vol. 70, No. 194 / Friday, October 7, 2005 / Proposed Rules 

that has wholesale or retail customers 

served under cost-based regulation. 

(3) Value when applied to: 

(i) Transmission facilities, generation 

facilities, transmitting utilities, electric 

utility companies, and holding 

companies, means the market value of 

the facilities or companies. For 

transmission facilities, in the absence of 

a readily ascertainable market value, 

value means original cost 

undepreciated; 

(ii) Wholesale contracts, means the 

total expected contract revenues over 

the remaining life of the contract; and 

(iii) Securities, means the market 

price at the time the security is 

acquired. For transactions between nonaffiliated companies, the Commission 

will rebuttably presume that the market 

value is the agreed-upon transaction 

price. 

(4) The terms associate company, 

electric utility company, holding 

company, and holding company system 

have the meaning given those terms in 

the Public Utility Holding Company Act 

of 2005. 

6. Section 33.2 is amended to add 

paragraph (j) to read as follows: 

§ 33.2. Contents of application—general 

information requirements. 

* * * * * 

(j) An explanation (to be identified as 

Exhibit M to this application): 

(1) Of how applicants are providing 

assurance that the proposed transaction 

will not result in cross-subsidization of 

a non-utility associate company or 

pledge or encumbrance of utility assets 

for the benefit of an associate company, 

with appropriate evidentiary support for 

such explanation; or 

(2) If no such assurance can be 

provided, an explanation of how such 

cross-subsidization, pledge, or 

encumbrance will be consistent with the 

public interest. 

7. Section 33.11 is added to read as 

follows: 

§ 33.11 Commission procedures for the 

consideration of applications under section 

203 of the FPA. 

(a) The Commission will act on a 

completed application for approval of a 

transaction (i.e., one that is consistent 

with the requirements of this part) not 

later than 180 days after the completed 

application is filed. If the Commission 

does not act within 180 days, such 

application shall be deemed granted 

unless the Commission finds, based on 

good cause, that further consideration is 

required to determine whether the 

proposed transaction meets the 

standards of section 203(a)(4) of the FPA 

and issues, by the 180th day, an order 

tolling the time for acting on the 

application for not more than 180 days, 

at the end of which additional period 

the Commission shall grant or deny the 

application. 

(b) The Commission will provide for 

the expeditious consideration of 

completed applications for the approval 

of transactions that are not contested, do 

not involve mergers, and are consistent 

with Commission precedent. The 

transactions that would generally 

warrant expedited review include: 

(1) A disposition of only transmission 

facilities, particularly those that both 

before and after the transaction remain 

under the functional control of a 

Commission-approved regional 

transmission organization or 

independent system operator; 

(2) Transfers involving generation 

facilities of a size that do not require an 

Appendix A analysis; 

(3) Internal corporate reorganizations 

that do not present cross-subsidization 

issues; and 

(4) The acquisition of a foreign utility 

company by a holding company with no 

captive customers in the United States. 

[FR Doc. 05–20311 Filed 10–6–05; 8:45 am] 

BILLING CODE 6717–01–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 165 

[COTP Prince William Sound 02–011] 

RIN 1625–AA87 (Formerly 1625–AA00) 

Security Zones; Port Valdez and 

Valdez Narrows, Valdez, AK 

AGENCY: Coast Guard, DHS. 

ACTION: Third supplemental notice of 

proposed rulemaking; request for 

comments. 

SUMMARY: The Coast Guard proposes to 

establish permanent security zones 

encompassing the Trans-Alaska Pipeline 

(TAPS) Valdez Terminal Complex, 

Valdez, Alaska and TAPS Tank Vessels 

and a security zone in the Valdez 

Narrows, Port Valdez, Alaska. These 

security zones are necessary to protect 

the TAPS Terminal and vessels from 

damage or injury from sabotage, 

destruction or other subversive acts. 

Entry of vessels into these security 

zones would be prohibited unless 

specifically authorized by the Captain of 

the Port, Prince William Sound, Alaska. 

DATES: Comments and related material 

must reach the Coast Guard on or before 

November 7, 2005. 

ADDRESSES: You may mail comments 

and related material to U.S. Coast Guard 

Marine Safety Office, PO Box 486, 

Valdez, Alaska 99686. Marine Safety 

Office Valdez, Port Operations 

Department maintains the public docket 

for this rulemaking. Comments and 

material received from the public, as 

well as documents indicated in this 

preamble as being available in the 

docket, will become part of this docket 

and will be available for inspection or 

copying at Marine Safety Office Valdez, 

105 Clifton, Valdez, AK 99686 between 

7:30 a.m. and 4:30 p.m., Monday 

through Friday, except Federal holidays. 

FOR FURTHER INFORMATION CONTACT: 

LTJG Duane Lemmon, Port Operations 

Department, U.S. Coast Guard Marine 

Safety Office Valdez, Alaska, (907) 835–

7218. 

SUPPLEMENTARY INFORMATION: 

Regulatory History 

On November 7, 2001, we published 

three temporary final rules in the 

Federal Register (66 FR 56208, 56210, 

56212) that created security zones 

effective through June 1, 2002. The 

section numbers and titles for these 

zones are—

§ 165.T17–003—Security zone; TransAlaska Pipeline Valdez Terminal 

Complex, Valdez, Alaska; 

§ 165.T17–004—Security zone; Port 

Valdez, and 

§ 165.T17–005—Security zones; 

Captain of the Port Zone, Prince 

William Sound, Alaska. 

Then on June 4, 2002, we published 

a temporary final rule (67 FR 38389) 

that established security zones to 

replace these security zones. That rule 

issued in April 2002, which expired 

July 30, 2002, created temporary 

§ 165.T17–009, entitled ‘‘Port Valdez 

and Valdez Narrows, Valdez, Alaska—

security zone’’. 

Then on July 31, 2002, we published 

a temporary final rule (67 FR 49582) 

that established security zones to extend 

the temporary security zones that would 

have expired. This extension was to 

allow for the completion of a noticeand-comment rulemaking to create 

permanent security zones to replace the 

temporary zones. 

On October 23, 2002, we published a 

notice of proposed rulemaking (NPRM) 

that sought public comment on 

establishing permanent security zones 

similar to the temporary security zones 

(67 FR 65074). The comment period for 

that NPRM ended December 23, 2002. 

Although no comments were received 

that would result in changes to the 

proposed rule an administrative 

omission was found that resulted in the 

Federal Register / Vol. 70, No. 194 / Friday, October 7, 2005 / Proposed Rules 58647 

need to issue a supplemental notice of 

proposed rulemaking (SNPRM) to 

address a collection of information issue 

regarding of the proposed rule (68 FR 

14935, March 27, 2003). Then on May 

19, 2004, we published a Second 

Supplemental Notice of Proposed 

Rulemaking (SSNPRM) (69 FR 28871) 

incorporating changes to Trans-Alaska 

Pipeline (TAPS) Valdez Terminal 

complex (Terminal), Valdez, Alaska and 

TAPS Tank Vessels security zone 

coordinates described in the NPRM (67 

FR 65074). The comment period for that 

SNPRM ended on July 30, 2004. 

Although no comments were received 

that would result in changes to the 

SSNPRM, we have learned over the last 

3 years that the Trans-Alaska Pipeline 

(TAPS) Valdez Terminal complex 

(Terminal) security zone is actually 

larger than originally intended due to a 

conversion oversight in that particular 

zone’s respective longitude and latitude 

values. Accordingly, to correct the 

conversion oversight and to allow for 

more effective enforcement, proposed 

changes to the Trans-Alaska Pipeline 

(TAPS) Valdez Terminal complex 

(Terminal) security zone coordinates 

results in the need to issue a Third 

Supplemental Notice of Proposed 

Rulemaking (TSNPRM). We have also 

removed unnecessary text from the 

description of the Valdez Narrows, Port 

Valdez, Valdez, Alaska security zone in 

proposed 33 CFR 165.1710(a)(3). 

This TSNPRM proposes to reduce the 

size of the Trans-Alaska Pipeline 

(TAPS) Valdez Terminal complex 

(Terminal) security zone we initially 

proposed in the NPRM published 

October 23, 2002 (67 FR 65074). 

Request for Comments 

We encourage you to participate in 

this rulemaking by submitting 

comments and related material. If you 

do so, please include your name and 

address, identify the docket number for 

this rulemaking, COTP Prince William 

Sound 02–011, indicate the specific 

section of this document to which each 

comment applies, and give the reason 

for each comment. Please submit all 

comments and related material in an 

unbound format, no larger than 81⁄2 by 

11 inches, suitable for copying. If you 

would like to know they reached us, 

please enclose a stamped, self-addressed 

postcard or envelope. We will consider 

all comments and material received 

during the comment period. We may 

change this proposed rule in view of 

them. 

Public Meeting 

We do not now plan to hold a public 

meeting. But you may submit a request 

for a meeting by writing to Marine 

Safety Office Valdez at the address 

under ADDRESSES explaining why one 

would be beneficial. If we determine 

that one would aid this rulemaking, we 

will hold one at a time and place 

announced by a later notice in the 

Federal Register. 

Background and Purpose 

The Coast Guard is taking this action 

for the protection of the national 

security interests in light of terrorist acts 

perpetrated on September 11, 2001, and 

the continuing threat that remains from 

those responsible for those acts. As a 

vibrant port with a high volume of oil 

tanker traffic, these security zones are 

necessary to provide protection for the 

tankers transiting through the Port of 

Valdez and Valdez Narrows. These 

security zones are a necessary part of 

the Coast Guard’s efforts to provide for 

the safety of the people and 

environment in Valdez and the 

surrounding area. 

We are incorporating changes to the 

Trans-Alaska Pipeline (TAPS) Valdez 

Terminal complex (Terminal) security 

zone coordinates because we have been 

able to determine over the years that the 

changes are necessary in order to 

properly mark and monitor the zone, 

reduce the number of zone incursions 

and provide proper tactical enforcement 

while still keeping boaters a safe 

distance from the TAPS terminal. 

Discussion of Proposed Rule 

This supplemental notice of proposed 

rulemaking sets out three security 

zones. The Trans-Alaska Pipeline 

Valdez Marine Terminal Security zone 

encompasses the waters of Port Valdez 

between Allison Creek to the east and 

Sawmill Spit to the west and offshore to 

marker buoys A and B (approximately 

.85 nautical miles offshore from the 

TAPS Terminal). The Tank Vessel 

Moving Security Zone encompasses the 

waters within 200 yards of a TAPS 

Tanker within the Captain of the Port, 

Prince William Sound Zone. The Valdez 

Narrows Security Zone encompasses the 

waters 200 yards either side of the 

Tanker Optimum Trackline through 

Valdez Narrows between Entrance 

Island and Tongue Point. 

This action is necessary to provide for 

the safety of the TAPS terminal and 

TAPS tank vessels. The Coast Guard has 

worked closely with local and regional 

users of Port Valdez and Valdez 

Narrows waterways to develop these 

security zones in order to mitigate the 

impact on commercial and recreational 

users. 

Regulatory Evaluation 

This proposed rule is not a 

‘‘significant regulatory action’’ under 

section 3(f) of Executive Order 12866, 

Regulatory Planning and Review, and 

does not require an assessment of 

potential costs and benefits under 

section 6(a)(3) of that Order. The Office 

of Management and Budget has not 

reviewed it under that Order. It is not 

‘‘significant’’ under the regulatory 

policies and procedures of the 

Department of Homeland Security 

(DHS). 

We expect the economic impact of 

this proposed rule to be so minimal that 

a full Regulatory Evaluation under the 

regulatory policies and procedures of 

DHS is unnecessary. 

Economic impact is expected to be 

minimal because there are alternative 

routes for vessels to use when the zone 

is enforced, permits to enter the zone 

are available, and the Tank Vessel 

Moving Security Zone is in effect for a 

short duration. 

Small Entities 

Under the Regulatory Flexibility Act 

(5 U.S.C. 601–612), we have considered 

whether this proposed rule would have 

a significant economic impact on a 

substantial number of small entities. 

The term ‘‘small entities’’ comprises 

small businesses, not-for-profit 

organizations that are independently 

owned and operated and are not 

dominant in their fields, and 

governmental jurisdictions with 

populations of less than 50,000. 

The Coast Guard certifies under 5 

U.S.C. 605(b) that this proposed rule 

would not have a significant economic 

impact on a substantial number of small 

entities. The number of small entities 

impacted by this rule is expected to be 

minimal because there are alternative 

routes for vessels to use when the zone 

is enforced, permission to enter the zone 

is available, and the Tank Vessel 

Moving Security Zone is in effect for a 

short duration. Since the time frame this 

rule is in effect may cover commercial 

harvests of fish in the area, the entities 

most likely affected are commercial and 

native subsistence fishermen. The 

Captain of the Port will consider 

applications for entry into the security 

zone on a case-by-case basis; therefore, 

it is likely that very few, if any, small 

entities will be impacted by this rule. 

Those interested may apply for a permit 

to enter the zone by contacting Marine 

Safety Office, Valdez at the above 

contact number. 

If you think that your business, 

organization, or governmental 

jurisdiction qualifies as a small entity 

58648 Federal Register / Vol. 70, No. 194 / Friday, October 7, 2005 / Proposed Rules 

and that this rule would have a 

significant economic impact on it, 

please submit a comment (see 

ADDRESSES) explaining why you think it 

qualifies and how and to what degree 

this rule would economically affect it. 

Assistance for Small Entities 

Under section 213(a) of the Small 

Business Regulatory Enforcement 

Fairness Act of 1996 (Public Law 104–

121), we want to assist small entities in 

understanding this proposed rule so that 

they can better evaluate its effects on 

them and participate in the rulemaking. 

If the rule would affect your small 

business, organization, or governmental 

jurisdiction and you have questions 

concerning its provisions or options for 

compliance, please contact LTJG Duane 

Lemmon, Marine Safety Office Valdez, 

Alaska at (907)835–7218. 

Collection of Information 

This proposed rule would call for no 

new collection of information under the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3501–3520.). 

Federalism 

A rule has implications for federalism 

under Executive Order 13132, 

Federalism, if it has a substantial direct 

effect on State or local governments and 

would either preempt State law or 

impose a substantial direct cost of 

compliance on them. We have analyzed 

this proposed rule under that Order and 

have determined that it does not have 

implications for federalism. 

Unfunded Mandates Reform Act 

The Unfunded Mandates Reform Act 

of 1995 (2 U.S.C. 1531–1538) requires 

Federal agencies to assess the effects of 

their discretionary regulatory actions. In 

particular, the Act addresses actions 

that may result in the expenditure by a 

State, local, or tribal government, in the 

aggregate, or by the private sector of 

$100,000,000 or more in any one year. 

Though this proposed rule would not 

result in such an expenditure, we do 

discuss the effects of this rule elsewhere 

in this preamble. 

Taking of Private Property 

This proposed rule would not effect a 

taking of private property or otherwise 

have taking implications under 

Executive Order 12630, Governmental 

Actions and Interference with 

Constitutionally Protected Property 

Rights. 

Civil Justice Reform 

This proposed rule meets applicable 

standards in sections 3(a) and 3(b)(2) of 

Executive Order 12988, Civil Justice 

Reform, to minimize litigation, 

eliminate ambiguity, and reduce 

burden. 

Protection of Children 

We have analyzed this proposed rule 

under Executive Order 13045, 

Protection of Children from 

Environmental Health Risks and Safety 

Risks. This rule is not an economically 

significant rule and would not create an 

environmental risk to health or risk to 

safety that might disproportionately 

affect children. 

Indian Tribal Governments 

This proposed rule does not have 

tribal implications under Executive 

Order 13175, Consultation and 

Coordination with Indian Tribal 

Governments, because it would not 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. 

Energy Effects 

We have analyzed this proposed rule 

under Executive Order 13211, Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use. We have 

determined that it is not a ‘‘significant 

energy action’’ under that order because 

it is not a ‘‘significant regulatory action’’

under Executive Order 12866 and is not 

likely to have a significant adverse effect 

on the supply, distribution, or use of 

energy. The Administrator of the Office 

of Information and Regulatory Affairs 

has not designated it as a significant 

energy action. Therefore, it does not 

require a Statement of Energy Effects 

under Executive Order 13211. 

Environment 

We have analyzed this rule under 

Commandant Instruction M16475.lD, 

which guides the Coast Guard in 

complying with the National 

Environmental Policy Act of 1969 

(NEPA) (42 U.S.C. 4321–4370f), and 

have concluded that there are no factors 

in this case that would limit the use of 

a categorical exclusion under section 

2.B.2 of the Instruction. Therefore, this 

rule is categorically excluded, under 

figure 2–1, paragraph (34)(g), of the 

Instruction, from further environmental 

documentation. This rule creates no 

additional vessel traffic and thus 

imposes no additional burdens on the 

environment in Prince William Sound. 

It simply provides guidelines for vessels 

transiting in the Captain Of The Port, 

Prince William Sound Zone so that 

vessels may transit safely in the vicinity 

of the Port of Valdez and the TAPS 

terminal. A draft ‘‘Environmental 

Analysis Check List’’ and a draft 

‘‘Categorical Exclusion Determination’’

(CED) are available in the docket where 

indicated under ADDRESSES. Comments 

on this section will be considered before 

we make the final decision on whether 

the rule should be categorically 

excluded from further environmental 

review. 

List of Subjects in 33 CFR Part 165 

Harbors, Marine safety, Navigation 

(water), Reporting and record keeping 

requirements, Safety measures, Vessels, 

Waterways. 

For the reasons discussed in the 

preamble, the Coast Guard proposes to 

amend 33 CFR part 165 as follows: 

PART 165—REGULATED NAVIGATION 

AREAS AND LIMITED ACCESS AREAS 

1. The authority citation for part 165 

continues to read as follows: 

Authority: 33 U.S.C. 1231; 50 U.S.C. 191, 

195; 33 CFR 1.05–1(g), 6.04–1, 6.04–6, and 

160.5; Department of Homeland Security 

Delegation No. 0170.1. 

§ 165.T17–020 [Removed] 

2. Remove § 165.T17–020. 

3. Add new § 165.1710 to read as 

follows: 

§ 165.1710 Port Valdez and Valdez 

Narrows, Valdez, Alaska-security zones. 

(a) Location. The following areas are 

security zones: 

(1) Trans-Alaska Pipeline (TAPS) 

Valdez Terminal complex (Terminal), 

Valdez, Alaska and TAPS Tank Vessels. 

All waters enclosed within a line 

beginning on the southern shoreline of 

Port Valdez at 61°04′25′′ N, 146°25′42′′ 

W; thence northerly to yellow buoy at 

61°06′00′′ N, 146°25′42′′ W; thence east 

to the yellow buoy at 61°06′00′′ N, 

146°21′30′′ W; thence south to 61°04′25′′ 

N, 146°21′30′′ W; thence west along the 

shoreline and including the area 2000 

yards inland along the shoreline to the 

beginning point. 

(2) Tank Vessel Moving Security 

Zone. All waters within 200 yards of 

any TAPS tank vessel maneuvering to 

approach, moor, unmoor or depart the 

TAPS Terminal or transiting, 

maneuvering, laying to or anchored 

within the boundaries of the Captain of 

the Port, Prince William Sound Zone 

described in 33 CFR 3.85–20 (b). 

(3) Valdez Narrows, Port Valdez, 

Valdez, Alaska. All waters 200 yards 

either side of the Valdez Narrows 

Tanker Optimum Track line bounded by 

a line beginning at 61°05′15′′ N, 

146°37′18′′ W; thence south west to 

61°04′00′′ N, 146°39′52′′ W; thence 

Federal Register / Vol. 70, No. 194 / Friday, October 7, 2005 / Proposed Rules 58649 

southerly to 61°02′32.5′′ N, 146°41′25′′ 

W; thence north west to 61°02′40.5′′N, 

146°41′47′′ W; thence north east to 

61°04′07.5′′ N, 146°40′15′′ W; thence 

north east to 61°05′22′′ N, 146°37′38′′ W; 

thence south east back to the starting 

point at 61°05′15′′ N, 146°37′18′′ W. 

(b) Regulations. (1) The general 

regulations in 33 CFR 165.33 apply to 

the security zones described in 

paragraph (a) of this section. 

(2) Tank vessels transiting directly to 

the TAPS terminal complex, engaged in 

the movement of oil from the terminal 

or fuel to the terminal, and vessels used 

to provide assistance or support to the 

tank vessels directly transiting to the 

terminal, or to the terminal itself, and 

that have reported their movements to 

the Vessel Traffic Service, as required 

under 33 CFR part 161 and § 165.1704, 

may operate as necessary to ensure safe 

passage of tank vessels to and from the 

terminal. 

(3) All persons and vessels must 

comply with the instructions of the 

Coast Guard Captain of the Port and the 

designated on-scene patrol personnel. 

These personnel comprise 

commissioned, warrant, and petty 

officers of the Coast Guard. Upon being 

hailed by a vessel displaying a U.S. 

Coast Guard ensign by siren, radio, 

flashing light, or other means, the 

operator of the vessel must proceed as 

directed. Coast Guard Auxiliary and 

local or state agencies may be present to 

inform vessel operators of the 

requirements of this section and other 

applicable laws. 

Dated: September 23, 2005. 

M.S. Gardiner, 

Commander, United States Coast Guard, 

Captain of the Port, Prince William Sound, 

Alaska. 

[FR Doc.05–20276 Filed 10–6–05; 8:45 am] 

BILLING CODE 4910–15–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 421 

[CMS–6022–P] 

RIN 0938–AN31 

Medicare Program; Termination of 

Non-Random Prepayment Review 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

implement the statutory requirements 

regarding the termination of nonrandom prepayment review under the 

Medicare Prescription Drug, 

Improvement, and Modernization Act of 

2003. This proposed rule provides the 

criteria for terminating a provider or 

supplier from non-random prepayment 

review. 

DATES: To be assured consideration, 

comments must be received at one of 

the addresses provided below, no later 

than 5 p.m. on December 6, 2005. 

ADDRESSES: In commenting, please refer 

to file code CMS–6022–P. Because of 

staff and resource limitations, we cannot 

accept comments by facsimile (FAX) 

transmission. 

You may submit comments in one of 

three ways (no duplicates, please): 

1. Electronically. You may submit 

electronic comments on specific issues 

in this regulation to http:// 

www.cms.hhs.gov/regulations/ 

ecomments. (Attachments should be in 

Microsoft Word, WordPerfect, or Excel; 

however, we prefer Microsoft Word.) 

2. By mail. You may mail written 

comments (one original and two copies) 

to the following address ONLY: Centers 

for Medicare & Medicaid Services, 

Department of Health and Human 

Services, Attention: CMS–6022–P, PO 

Box 8012, Baltimore, MD 21244–8012. 

Please allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

3. By hand or courier. If you prefer, 

you may deliver (by hand or courier) 

your written comments (one original 

and two copies) before the close of the 

comment period to one of the following 

addresses. If you intend to deliver your 

comments to the Baltimore address, 

please call telephone number (410) 786–

9994 in advance to schedule your 

arrival with one of our staff members. 

Room 445–G, Hubert H. Humphrey 

Building, 200 Independence Avenue, 

SW., Washington, DC 20201; or 7500 

Security Boulevard, Baltimore, MD 

21244–1850. 

(Because access to the interior of the 

HHH Building is not readily available to 

persons without Federal Government 

identification, commenters are 

encouraged to leave their comments in 

the CMS drop slots located in the main 

lobby of the building. A stamp-in clock 

is available for persons wishing to retain 

a proof of filing by stamping in and 

retaining an extra copy of the comments 

being filed.) 

Comments mailed to the addresses 

indicated as appropriate for hand or 

courier delivery may be delayed and 

received after the comment period. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: 

Lieutenant Commander Marie Casey, 

(410) 786–7861 or Daniel Schwartz, 

(410) 786–4197. 

SUPPLEMENTARY INFORMATION: 

Submitting Comments: We welcome 

comments from the public on all issues 

set forth in this rule to assist us in fully 

considering issues and developing 

policies. You can assist us by 

referencing the file code CMS–6022–P. 

Inspection of Public Comments: All 

comments received before the close of 

the comment period are available for 

viewing by the public, including any 

personally identifiable or confidential 

business information that is included in 

a comment. CMS posts all electronic 

comments received before the close of 

the comment period on its public 

website as soon as possible after they 

have been received. Comments received 

timely will be available for public 

inspection as they are received, 

generally beginning approximately 3 

weeks after publication of a document, 

at the headquarters of the Centers for 

Medicare & Medicaid Services, 7500 

Security Boulevard, Baltimore, 

Maryland 21244, Monday through 

Friday of each week from 8:30 a.m. to 

4 p.m. To schedule an appointment to 

view public comments, phone 1–800–

743–3951. 

I. General and Legislative History 

Medicare contracting authority has 

been in place since the inception of the 

Medicare program in 1965. Section 1874 

of the Social Security Act (the Act) 

authorizes the Secretary to perform 

Medicare program functions directly or 

by contract. 

On August 21, 1995, the Congress 

enacted the Health Insurance Portability 

and Accountability Act of 1996 (Pub. L. 

104–191) (HIPAA). Section 202 of 

HIPAA added section 1893 to the Act 

that establishes the Medicare Integrity 

Program and allows us to contract with 

eligible entities to perform program 

integrity activities. Specifically, we 

contract with intermediaries as 

specified in section 1816(a) of the Act; 

and carriers as specified in section 

1842(a) of the Act; and program 

safeguard contractors (PSCs) to perform 

medical, fraud, and utilization reviews, 

and cost report audits of Medicare 

claims. (Hereinafter, intermediaries, 

carriers, and PSCs that perform medical 

review functions are referred to as 

contractors). This program is funded by 

the Medicare Hospital Insurance Trust 

Fund for activities related to Medicare 

Part A and Part B.