5926 Federal Register / Vol. 70, No. 23 / Friday, February 4, 2005 / Rules and Regulations 

mixture must comply with applicable 

state and local requirements in addition 

to the CSA regulatory controls.

Dated: January 28, 2005. 

William J. Walker, 

Deputy Assistant Administrator, Office of 

Diversion Control.

[FR Doc. 05–2212 Filed 2–3–05; 8:45 am] 

BILLING CODE 4410–09–P

DEPARTMENT OF VETERANS 

AFFAIRS 

38 CFR Part 17 

RIN 2900–AK94 

Payment for Non-VA Physician and 

Other Health Care Professional 

Services Associated With Either 

Outpatient or Inpatient Care Provided 

at Non-VA Facilities

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

SUMMARY: This final rule amends the 

Department of Veterans Affairs (VA) 

medical regulations concerning 

payment for non-VA health care 

professional services that are associated 

with either outpatient or inpatient care 

provided to eligible VA beneficiaries at 

non-VA facilities. Currently, the 

medical regulations require all VA 

facilities to reimburse for non-VA health 

care professional services based upon 

the Centers for Medicare and Medicaid 

Services (CMS) physician fee schedule 

in effect at the time the services are 

provided. However, if the standard 

payment methodology is implemented 

in Alaska, VA payments will be 

significantly less than the usual and 

customary charges for the state. This 

may limit VA patient access to non-VA 

health care. Since a large portion of VA 

health care provided in Alaska is 

obtained from non-VA sources, this 

could negatively impact the quality of 

care provided veterans living in that 

state. This rule establishes an Alaskaspecific payment methodology for 

inpatient and outpatient non-VA health 

care professional services within that 

state. The rule ensures that amounts 

paid to health care providers represent 

the local cost to furnish a service, while 

continuing to achieve program cost 

reductions.

DATES: Effective Date: This rule shall 

become effective on March 7, 2005. 

Applicability Date: This rule shall be 

applicable to all claims for payment for 

services rendered on or after April 1, 

2005.

FOR FURTHER INFORMATION CONTACT:

Susan Schmetzer, Chief, Policy & 

Compliance Division, Health 

Administration Center, Department of 

Veterans Affairs, P.O. Box 65020, 

Denver, CO 80206, telephone 303–331–

7552. (This is not a toll-free number.)

SUPPLEMENTARY INFORMATION: In a 

document published in the Federal 

Register on July 29, 2003 (68 FR 44507) 

we proposed to amend VA’s medical 

regulations at 38 CFR part 17 to provide 

for the payment of non-VA physician 

services in Alaska that are associated 

with either outpatient or inpatient care 

provided to eligible VA beneficiaries at 

non-VA facilities. We provided a 60-day 

comment period that ended on 

September 29, 2003. We received one 

comment, in which the commenter 

suggested that VA adopt the Official 

Alaska Workers’ Compensation Medical 

Fee Schedule as a basis for such 

payments. No changes are made based 

on this comment, as adoption of the 

Official Alaska Workers’ Compensation 

Medical Fee Schedule would not 

achieve the dual goal of ensuring that 

the amounts paid to health care 

providers better represent the local cost 

to furnish a service, while continuing to 

achieve program cost reductions. 

A number of technical changes of a 

non-substantive nature have been made 

in this final rule. The proposed rule 

described the title of this rule as 

Payment for Non-VA Physician Services 

Associated with Either Outpatient or 

Inpatient Care Provided at Non-VA 

Facilities. The use of the phrase ‘‘nonVA physician,’’ both in the title of 38 

CFR 17.56 and throughout the 

regulation, is imprecise, as the rule 

applies to all non-VA physician and 

other health care professional services 

associated with outpatient or inpatient 

care provided at non-VA facilities. In 

order to reconcile the terminology used 

in this rule with common practice in 

VA, the phrase ‘‘non-VA physician’’

will be replaced with ‘‘non-VA health 

care professional services.’’

Additionally, the language was clarified 

to state the rates payable are based on 

the geographic location of where the 

services were rendered. 

The proposed rule stated that VA 

would rely on Current Procedural 

Terminology (CPT) codes utilized by 

Centers for Medicare and Medicaid 

Services (CMS) to pay for these non-VA 

services. The reference to CPT codes 

was too restrictive, as CMS uses other 

national coding sets for health care 

professional services. Therefore, the 

references to CPT codes were removed. 

The final rule refers generally to the use 

of national standard code sets.

The proposed rule referenced Fiscal 

Year (FY) 2002 as the base year for 

determining various costs. In light of the 

passage of time since publication of the 

proposed rule, and in order to reflect the 

most up-to-date data, this reference has 

been changed to FY 2003 throughout the 

final rule. 

The proposed rule stated that for 

services that VA did not have occasion 

to pay for in Alaska in FY 2002, and for 

services represented by CPT codes 

established after FY 2002, VA will take 

the Centers for Medicare and Medicaid 

Services’ rate for each unpaid code and 

multiply it times the average percentage 

paid by VA in Alaska for Centers for 

Medicare and Medicaid Services-like 

codes. Applying this rule only to 

services that VA had no occasion to pay 

during the previous Fiscal Year was 

unnecessarily narrow and would limit 

VA’s ability to accurately gauge a 

reasonable payment. It is also 

inconsistent with other provisions of 

this rule, which require a minimum of 

eight occurrences. Therefore, the final 

rule has been revised to apply this rule 

to services that VA provided less than 

eight times in Alaska during the 

previous Fiscal Year. Clarification was 

also made that this rule would be 

applicable to unit-based codes as the VA 

moved from a single payment per code 

irrespective of units to unit-based 

payment in FY 2004, and development 

of a fee schedule that is not unit-based 

would be inconsistent and inaccurate. 

The proposed rule stated that VA 

would increase the amounts on the VA 

Fee Schedule for Alaska annually in 

accordance with annual inflation rate 

adjustments published by CMS. The VA 

will use the national Medicare 

Economic Index (MEI) for that purpose. 

The MEI measures inflation in 

physician practice cost and general 

wage levels. The VA will not make 

modifications to the MEI based on 

regional factors because doing so would 

not achieve the dual goal of ensuring 

that the amounts paid to health care 

providers represent the local cost to 

furnish a service, while continuing to 

achieve program cost reductions. 

Administrative Procedure Act 

The modifications in this final rule 

are logical and reasonable outgrowths of 

the proposed changes set forth in the 

proposed rule and are intended to 

clarify the intent of the proposed rule. 

Based on the rationales set forth in the 

proposed rule and those contained in 

this document, we are adopting the 

provisions of the proposed rule as a 

final rule with the modifications 

described above. 

Federal Register / Vol. 70, No. 23 / Friday, February 4, 2005 / Rules and Regulations 5927

Unfunded Mandates 

The Unfunded Mandates Reform Act 

requires, in 2 U.S.C. 1532, that agencies 

prepare an assessment of anticipated 

costs and benefits before developing any 

rule that may result in an expenditure 

by State, local, or tribal governments, in 

the aggregate, or by the private sector, of 

$100 million or more in any given year. 

This final rule would have no such 

effect on State, local, or tribal 

governments, or the private sector. 

Paperwork Reduction Act 

This document contains no provisions 

constituting a collection of information 

under the Paperwork Reduction Act (44 

U.S.C. 3501–3521). 

Executive Order 12866 

The Office of Management and Budget 

has reviewed this document under 

Executive Order 12866. 

Regulatory Flexibility Act 

The Secretary hereby certifies that 

this final rule 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 through 

612. The final 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 final rule is exempt 

from the initial and final regulatory 

flexibility analysis requirements of 

sections 603 and 604. 

Catalog of Federal Domestic Assistance 

Numbers 

The Catalog of Federal Domestic 

Assistance 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, 

Government 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: October 20, 2004. 

Anthony J. Principi, 

Secretary of Veterans Affairs.

■ For the reasons set out in the preamble, 

38 CFR part 17 is amended as set forth 

below:

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.

■ 2. Section 17.56 is amended by:

■ a. Revising the section heading.

■ b. In paragraph (a), removing ‘‘Except 

for anesthesia services,’’ and adding, in 

its place, ‘‘Except for anesthesia services, 

and services provided in the State of 

Alaska under paragraph (d) of this 

section,’’; removing ‘‘Department of 

Health & Human Services, Health Care 

Financing Administration (HCFA) under 

Medicare’s participating’’ and adding, in 

its place, ‘‘Centers for Medicare and 

Medicaid Services’ (CMS) 

participating’’; removing ‘‘calculated 

under Medicare’s participating’’ and 

adding, in its place, ‘‘calculated under 

Centers for Medicare and Medicaid 

Services’ participating’’; and removing 

all references to ‘‘non-VA physician 

services’’ and adding, in their place, 

‘‘non-VA health care professional 

services’’.

■ c. In paragraph (b), removing 

‘‘Medicare’s participating’’ and adding, 

in its place, ‘‘Centers for Medicare and 

Medicaid Services’ participating’’; and 

removing ‘‘calculating the Medicare fee’’

and adding, in its place, ‘‘calculating the 

Centers for Medicare and Medicaid 

Services’ fee’’.

■ d. Redesignating paragraphs (d) and (e) 

as paragraphs (e) and (f), respectively.

■ e. Adding a new paragraph (d).

■ f. In redesignated paragraph (f), 

removing the phrase ‘‘paragraphs (a) 

through (d)’’ and adding, in its place, 

‘‘paragraphs (a) through (e)’’. 

The revision and addition read as 

follows:

§ 17.56 Payment for non-VA physician and 

other health care professional services.

* * * * *

(d) For services rendered in Alaska, 

VA will pay for services in accordance 

with a fee schedule that uses the Health 

Insurance Portability and 

Accountability Act mandated national 

standard coding sets. VA will pay a 

specific amount for each service for 

which there is a corresponding code. 

Under the VA Alaska Fee Schedule the 

amount paid in Alaska for each code 

will be 90 percent of the average amount 

VA actually paid in Alaska for the same 

services in Fiscal Year (FY) 2003. For 

services that VA provided less than 

eight times in Alaska in FY 2003, for 

services represented by codes 

established after FY 2003, and for unitbased codes prior to FY 2004, VA will 

take the Centers for Medicare and 

Medicaid Services’ rate for each code 

and multiply it times the average 

percentage paid by VA in Alaska for 

Centers for Medicare and Medicaid 

Services-like codes. VA will increase 

the amounts on the VA Alaska Fee 

Schedule annually beginning in 2005 in 

accordance with the published national 

Medicare Economic Index (MEI). For 

those years where the annual average is 

a negative percentage, the fee schedule 

will remain the same as the previous 

year. Payment for non-VA health care 

professional services in Alaska shall be 

the lesser of the amount billed, or the 

amount calculated under this subpart.

* * * * *

(Authority: 38 U.S.C. 513, 1703, 1728)

[FR Doc. 05–2107 Filed 2–3–05; 8:45 am] 

BILLING CODE 8320–01–P

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[R04–OAR–2004–KY–0001–200425(w); FRL–

7868–8] 

Approval and Promulgation of 

Implementation Plans for Kentucky: 1-

Hour Ozone Maintenance Plan Update 

for Edmonson Area; Withdrawal of 

Direct Final Rule

AGENCY: Environmental Protection 

Agency (EPA).

ACTION: Withdrawal of direct final rule.

SUMMARY: Due to adverse comment, EPA 

is withdrawing the direct final rule 

published December 17, 2004, (69 FR 

75473) approving revisions to the 

Edmonson County portion of the State 

Implementation Plan (SIP) submitted by 

the Commonwealth of Kentucky on 

August 24, 2004. The submittal provides 

the 10-year update to the original 1-hour 

ozone maintenance plans for three 1-

hour ozone maintenance areas, 

including the Edmonson County 

Maintenance Area, and also provides 

revised 2004 motor vehicle emission 

budgets (MVEBs) and establishes 2015 

MVEBs. EPA stated in the direct final 

rule that if EPA received adverse 

comment by January 18, 2005, the rule 

would be withdrawn and not take effect. 

EPA subsequently received adverse 

comment. EPA will address the 

comment in a subsequent final action 

based upon the proposed action also