63440 Federal Register / Vol. 60, No. 237 / Monday, December 11, 1995 / Rules and Regulations

In addition, section 1102(b) of the Act

requires us to prepare a regulatory

impact analysis if a rule may have a

significant impact on the operations of

a substantial number of small rural

hospitals. Such an analysis must

conform to the provisions of section 604

of the RFA. For purposes of section

1102(b) of the Act, we define a small

rural hospital as a hospital that is

located outside of a Metropolitan

Statistical Area and has fewer than 50

beds.

This rule merely makes a technical

amendment to delay the due date for the

submission, by a group of physicians

that wishes to be identified as a ‘‘group

practice,’’ of a statement attesting that it

meets certain conditions. For this

reason, we are not preparing analyses

for either the RFA or section 1102(b) of

the Act because we have determined,

and we certify, that this rule will not

have a significant economic impact on

a substantial number of small entities or

a significant impact on the operations of

a substantial number of small rural

hospitals.

In accordance with the provisions of

Executive Order 12866, this regulation

was not reviewed by the Office of

Management and Budget.

List of Subjects in 42 CFR Part 411

Kidney diseases, Medicare, Physician

referral, Reporting and recordkeeping

requirements.

42 CFR part 411 is amended as set

forth below:

PART 411—EXCLUSIONS FROM

MEDICARE AND LIMITATION ON

MEDICARE PAYMENT

1. The authority citation for part 411

continues to read as follows:

Authority: Secs. 1102 and 1871 of the

Social Security Act (42 U.S.C. 1302 and

1395hh).

2. In § 411.360, paragraph (e) is

revised to read as follows:

§ 411.360 Group practice attestation.

* * * * *

(e) A group that intends to meet the

definition of a group practice in order to

qualify for an exception described in

§§ 411.355 through 411.357, must

submit the attestation required by

paragraph (a) or paragraph (b)(1) of this

section, as applicable, to its carrier no

later than 60 days after receipt of the

attestation instructions from its carrier.

(Catalog of Federal Domestic Assistance

Program No. 93.774, Medicare—

Supplementary Medical Insurance Program)

Dated: November 21, 1995.

Bruce C. Vladeck,

Administrator, Health Care Financing

Administration.

Dated: November 29, 1995.

Donna E. Shalala,

Secretary.

[FR Doc. 95–30064 Filed 12–8–95; 8:45 am]

BILLING CODE 4120–01–P

42 CFR Part 424

[BPD–838–FC]

RIN 0938–AH19

Medicare Program; Additional Supplier

Standards

AGENCY: Health Care Financing

Administration (HCFA), HHS.

ACTION: Final rule with comment.

SUMMARY: This final rule with comment

period conforms our regulations to

changes made to section 1834 of the

Social Security Act (the Act) by section

131 of the Social Security Act

Amendments of 1994. Section 1834(j) of

the Act requires that suppliers meet

additional standards related to

compliance with State and Federal

licensure requirements, maintaining a

physical facility on an appropriate site,

and proof of appropriate liability

insurance. This final rule retains

existing regulatory standards and

incorporates the three additional

standards specifically cited from the

statute.

DATES: Effective Date: This rule is

effective January 1, 1996.

Comments: Comments will be

considered if we receive them at the

appropriate address, as provided below,

no later than 5 p.m. on February 9,

1996.

ADDRESSES: Mail written comments (1

original and 3 copies) to the following

address: Health Care Financing

Administration, Department of Health

and Human Services, Attention: BPD–

838–FC, P.O. Box 26676, Baltimore, MD

21207.

If you prefer, you may deliver your

written comments (1 original and 3

copies) to one of the following

addresses:

Room 309–G, Hubert H. Humphrey

Building, 200 Independence Avenue

SW., Washington, DC 20201, or

Room C5–09–26, 7500 Security

Boulevard, Baltimore, MD 21244–

1850.

Because of staffing and resource

limitations, we cannot accept comments

by facsimile (FAX) transmission. In

commenting, please refer to file code

BPD–838–FC. Comments received

timely will be available for public

inspection as they are received,

generally beginning approximately 3

weeks after publication of a document,

in Room 309–G of the Department’s

offices at 200 Independence Avenue,

SW, Washington, DC, on Monday

through Friday of each week from 8:30

a.m. to 5 p.m. (phone: (202) 690–7890).

For comments that relate to

information collection requirements,

mail a copy of comments to: Office of

Information and Regulatory Affairs,

Office of Management and Budget,

Room 10235, New Executive Office

Building, Washington, DC 20503, Attn:

Allison Herron Eydt, HCFA Desk

Officer.

FOR FURTHER INFORMATION CONTACT:

Larry Bonander, (410) 786–4479.

SUPPLEMENTARY INFORMATION:

I. Background

A. General

The Medicare Part B program is a

voluntary program that pays all or part

of the costs for physicians’ services,

outpatient hospital services, certain

home health services, services furnished

by rural health clinics, ambulatory

surgical centers, and comprehensive

outpatient rehabilitation facilities, and

certain other medical and hospital

health services not covered by Medicare

Part A.

Medicare services are furnished by

two types of entities, that is, providers

and suppliers. The term ‘‘provider’’ as

defined in our regulations at 42 CFR

400.202, means a hospital, a rural

primary care hospital, a skilled nursing

facility, a comprehensive outpatient

rehabilitation facility, a home health

agency, or a hospice that has in effect an

agreement to participate in Medicare. A

clinic, a rehabilitation agency, or a

public health agency that has a similar

agreement to furnish outpatient physical

therapy or speech pathology services, or

a community mental health center with

a similar agreement to furnish partial

hospitalization services, is also

considered a provider (see sections

1861(u) and 1866(e) of the Social

Security Act (the Act)).

In general, suppliers are individuals

or entities that furnish certain types of

medical and other health services under

part B. There are different definitions of

the term supplier and specific

regulations governing different types of

suppliers. Durable medical equipment,

prosthetics, orthotics, and supplies

(DMEPOS) encompasses the types of

items included in the definition of

‘‘medical equipment and supplies’’

found at section 1834(j)(5) of the Act. In
Federal Register / Vol. 60, No. 237 / Monday, December 11, 1995 / Rules and Regulations 63441

this rule, the term ‘‘DMEPOS supplier’’

refers to all individuals or entities that

furnish these items.

For purposes of DMEPOS supplier

standards, the term ‘‘supplier’’ is

currently defined in § 424.57(a) as an

entity or individual, including a

physician or part A provider, which

sells or rents part B covered items to

Medicare beneficiaries, and which

meets certain standards. We are

retaining this definition for purposes of

identifying those entities that must meet

Medicare DMEPOS supplier standards

in order to obtain a supplier number.

Those individuals or entities that do not

furnish DMEPOS items but only furnish

other types of health care services, such

as physicians’ services or nurse

practitioner services, would not be

subject to these standards. Moreover, a

supplier number is not necessary before

Medicare payment can be made with

respect to medical equipment and

supplies furnished incident to a

physician’s service.

For Medicare purposes, DMEPOS

suppliers either accept or do not accept

assignment. If a DMEPOS supplier

accepts assignment, it agrees to accept

the Medicare approved amount as

payment in full for the covered item.

Generally, Medicare pays 80 percent of

the approved amount and the

beneficiary is responsible for applicable

coinsurance and any unmet Medicare

deductible amounts. DMEPOS suppliers

that have voluntarily agreed to enter

into an agreement to accept assignment

for all items are referred to as

‘‘participating suppliers’’. Participating

DMEPOS suppliers are listed in

directories available to Medicare

beneficiaries and receive part B

payment directly from the Medicare

program. Nonparticipating DMEPOS

suppliers may accept assignment on a

case-by-case basis, and for these claims,

receive payment directly from Medicare.

If a beneficiary receives a service from

a nonparticipating DMEPOS supplier on

a nonassigned basis, however, payment

is made to the beneficiary who in turn

pays the DMEPOS supplier. This rule

applies to all DMEPOS suppliers for all

items furnished to Medicare

beneficiaries regardless of whether they

accept Medicare assignment or are

Medicare participating suppliers.

Durable Medical Equipment

Durable medical equipment (DME) is

included in the definition of ‘‘medical

and other health services’’ as indicated

by section 1861(s)(6) of the Act. The

term DME is defined at section 1861(n)

of the Act. This definition, in part,

excludes from coverage as DME, items

furnished in skilled nursing facilities

and hospitals. (Equipment furnished in

those facilities is paid for as part of their

routine or ancillary costs.) The term is

also defined in § 414.202 as meaning

‘‘equipment, furnished by a supplier or

a home health agency that—

(1) Can withstand repeated use;

(2) Is primarily and customarily used

to serve a medical purpose;

(3) Generally is not useful to an

individual in the absence of an illness

or injury; and

(4) Is appropriate for use in the

home.’’ Examples of DME include such

items as blood glucose monitors,

hospital beds, nebulizers, oxygen

delivery systems, and wheelchairs.

Prosthetic Devices

Prosthetic devices are also included

in the definition of ‘‘medical and other

health services’’ under section

1861(s)(8) of the Act. They are defined

in this section of the Act as ‘‘devices

(other than dental) which replace all or

part of an internal body organ

(including colostomy bags and supplies

directly related to colostomy care),

including replacement of such devices,

and including one pair of conventional

eyeglasses or contact lenses furnished

subsequent to each cataract surgery with

insertion of an intraocular lens’’. Other

examples of prosthetic devices include

cardiac pacemakers, cochlear implants,

electrical continence aids, electrical

nerve stimulators, and tracheostomy

speaking valves.

Orthotics and Prosthetics

Section 1861(s)(9) of the Act provides

for the coverage of ‘‘leg, arm, back, and

neck braces, and artificial legs, arms,

and eyes * * * ’’ under the term

‘‘medical and other health services’’. As

indicated by section 1834(h)(4)(C) of the

Act, these items are often referred to as

‘‘orthotics and prosthetics.’’

Supplies

Section 1861(s)(5) includes ‘‘surgical

dressings, and splints, casts, and other

devices used for reduction of fractures

and dislocations;’’ as one of the

‘‘medical and other health services’’ that

is covered by Medicare. Other items that

may be furnished by suppliers would

include (among others):

(1) Prescription drugs used in

immunosuppressive therapy furnished

to an individual who receives an organ

transplant for which payment is made

under this title, and that are furnished

within a certain time period after the

date of the transplant procedure as

noted at section 1861(s)(2)(J) of the Act.

(2) Extra-depth shoes with inserts or

custom molded shoes with inserts for an

individual with diabetes as listed at

section 1861(s)(12) of the Act.

(3) Home dialysis supplies and

equipment, self-care home dialysis

support services, and institutional

dialysis services and supplies included

at section 1861(s)(2)(F) of the Act.

(4) Oral drugs prescribed for use as an

anticancer therapeutic agent as noted at

section 1861(s)(2)(Q) of the Act.

(5) Self-administered erythropoietin

(as described in section 1861(s)(2)(O) of

the Act).

B. DMEPOS Supplier Standards

On June 18, 1992, we published a

final rule with comment period (57 FR

27290) that established in § 424.57

certain business standards for entities

seeking to qualify as Medicare suppliers

of DMEPOS items. Currently, in order to

obtain a Medicare billing number, a

DMEPOS supplier is required to meet,

and to certify that it meets, the

following supplier standards:

1. Respond to orders received by

filling those orders from its own

inventory or inventory from other

companies with which it has contracted

to fill such orders; or fabricating or

fitting items for sale from supplies

purchased under a contract.

2. Be responsible for delivery of

Medicare covered items to Medicare

beneficiaries.

3. Honor all warranties express and

implied under applicable State law.

4. Answer any questions or

complaints a beneficiary has about the

item or use of the item that was sold or

rented to him or her, and refer

beneficiaries with Medicare questions to

the appropriate carrier.

5. Maintain and repair items rented to

beneficiaries directly or through a

service contract with another company.

6. Accept returns of substandard (less

than full quality for the particular item)

or unsuitable items (inappropriate for

the beneficiary at the time it was fitted

and/or sold) from beneficiaries.

7. Disclose consumer information to

each beneficiary who rents or purchases

items. This information consists of the

supplier standards to which it must

conform.

8. Comply with the disclosure

provisions in § 420.206 (Disclosure of

persons having ownership, financial, or

control interest).

C. Obtaining a DMEPOS Supplier

Number for Identification and Billing

Purposes

Since November 1, 1993, every

DMEPOS supplier that submits claims

to a Durable Medical Equipment

Regional Carrier (DMERC) is required to

complete and return the Medicare
63442 Federal Register / Vol. 60, No. 237 / Monday, December 11, 1995 / Rules and Regulations

Supplier Number Application (HCFA–

192 Form) to the National Supplier

Clearinghouse (NSC). The NSC

distributes applications, verifies the

data, issues numbers to approved

suppliers, and maintains a national

supplier file. The DMEPOS supplier

must obtain a supplier number from the

NSC before the DMERC will accept a

claim. If the DMEPOS supplier attempts

to file a claim before obtaining a

supplier number the DMERC will reject

the claim.

Under this final rule, in order to

obtain a Medicare supplier number, a

DMEPOS supplier will be required to

meet, and to certify that it meets, the

supplier standards found in the new

§ 424.57 as discussed in section II. of

this rule. The DMEPOS supplier

standards found in the new § 424.57

include the supplier standards that are

in the existing § 424.57, and also the

standards cited in section

1834(j)(1)(B)(ii) (I) through (III) of the

Act.

The DMEPOS supplier’s certification

that supplier standards are met must be

completed before a supplier number

will be issued by the NSC. The

DMEPOS supplier is accountable to

complete the application accurately.

Any deliberate misrepresentation or

concealment of material information

may subject the DMEPOS supplier to

liability under civil and criminal laws.

Every three years the DMEPOS supplier

is required to recertify that it continues

to meet the DMEPOS supplier

standards.

II. Provisions of the Final Regulation

Section 131 of the Social Security Act

Amendments of 1994 (SSA ’94, Pub. L.

103–432, enacted on October 31, 1994),

added a new subsection (j) to section

1834 of the Act. Section 1834(j)(1)(B)(i)

of the Act requires that for medical

equipment and supplies furnished on or

after October 31, 1994, and before

January 1, 1996, the supplier must meet

the current standards established in

§ 424.57. Section 1834(j)(1)(B)(ii) of the

Act requires that for medical equipment

and supplies furnished on or after

January 1, 1996, the supplier must meet

revised standards issued by the

Secretary, after consultation with

representatives of suppliers of medical

equipment and supplies, carriers, and

consumers.

As a result of SSA ’94, we are

establishing additional DMEPOS

supplier standards by revising

paragraph (c) of § 424.57 of the

regulations. The revised standards

include all of the standards that are in

the existing § 424.57 and those

standards specifically required by

section 1834(j)(1)(B)(ii) (I) through (III)

of the Act.

Beginning January 1, 1996, a supplier

will be required to meet, and to certify

that it meets, the existing standards

discussed in section C. of this rule, and

also the following additional standards.

The supplier must—

(1) Comply with all applicable State

and Federal licensure and regulatory

requirements;

(2) Maintain a physical facility on an

appropriate site; and

(3) Have proof of appropriate liability

insurance.

We are issuing this final rule to

incorporate those standards that

Congress has explicitly identified and

indicated should be used beginning

January 1, 1996. In addition, our

existing regulatory standards have

already been subject to the notice and

comment process, and both the public

and the industry are familiar with those

standards. Congress did not indicate any

intention to relax those standards.

Rather, we believe Congress’ intent is to

strengthen these standards to protect

Medicare beneficiaries. This final rule

will provide a base level of protection

that will enable us to continue to

process applications of individuals and

entities who seek to become suppliers,

and will provide a basis to revoke the

numbers of suppliers who do not fulfill

those standards according to our

regulations at § 405.874.

The statute also gives the Secretary

the authority to establish additional

standards besides those included in the

existing § 424.57 and those standards

specifically cited in section

1834(j)(1)(B)(ii) (I) through (III). As

directed by the statute, we have

contacted or consulted with

representatives of suppliers, carriers,

and consumers concerning the need for

additional supplier standards. These

meetings were productive and we have

received numerous comments that

suggest that additional standards may be

necessary in certain areas. We are

currently considering these comments

as we develop a proposed rule that

would set forth additional substantive

supplier standards. At this time,

however, we are retaining our existing

standards and only adding those

standards specifically cited from section

1834(j) of the Act.

III. Collection of Information

Requirements

Under the Paperwork Reduction Act

of 1995, agencies are required to provide

a 60-day notice in the Federal Register

and solicit public comment before a

collection of information requirement is

submitted to the Office of Management

and Budget (OMB) for review and

approval. In order to fairly evaluate

whether an information collection

should be approved by OMB, section

3506(c)(2)(A) of the Paperwork

Reduction Act of 1995 requires that we

solicit comment on the following issues:

• Whether the information collection

is necessary and useful to carry out the

proper functions of the agency;

• The accuracy of the agency’s

estimate of the information collection

burden;

• The quality, utility, and clarity of

the information to be collected; and

• Recommendations to minimize the

information collection burden on the

affected public, including automated

collection techniques. Therefore, we are

soliciting public comment on each of

these issues for the information

collection requirements discussed

below.

The following sections of this

document contain information

collection requirements as described

below:

The information collection

requirements in § 424.57 (‘‘Special

payment rules for items furnished by

DMEPOS suppliers and issuance of

DMEPOS supplier billing numbers’’), in

paragraph (c)(7), arise as a result of

requiring all DMEPOS suppliers to give

a copy of the DMEPOS supplier

standards to each Medicare beneficiary

with whom they do business. The

National Supplier Clearinghouse will

supply a copy to each enrolled supplier

which may be photocopied. We estimate

the public reporting burden for this

collection of information to average

approximately 20 minutes per year,

including photocopying and handing

out the standards, which totals

approximately 46,200 hours.

The information collection

requirements in § 424.57(c)(8) cross

refers to § 420.206 (‘‘Disclosure of

persons having ownership, financial, or

control interest’’) concern the

information necessary for disclosure of

ownership and control and the

identities of managing employees. The

respondents who will provide the

information will be the DMEPOS

suppliers. Public reporting burden for

this collection of information is

estimated to be 140,000 hours. We

estimate that 140,000 suppliers will

complete the information which is

estimated at one hour per supplier.

We have submitted a copy of this final

rule with comment period to OMB for

its review of the information collection

requirements in § 424.57(c) (7) and (8).

These requirements are not effective

until they have been approved by OMB.

A notice will be published in the
Federal Register / Vol. 60, No. 237 / Monday, December 11, 1995 / Rules and Regulations 63443

Federal Register when approval is

obtained.

Organizations and individuals

desiring to submit comments on the

information collection and

recordkeeping requirements should

send them to the Health Care Financing

Administration, Office of Financial and

Human Resources, Management

Planning and Analysis Staff, 7500

Security Boulevard, Baltimore,

Maryland, 21244–1850 and to the Office

of Management and Budget official

whose name appears in the ADDRESSES

section of this preamble.

IV. Response to Comments

Because of the large number of items

of correspondence we normally receive

on Federal Register documents

published for comment, we are not able

to acknowledge or respond to them

individually. We will consider all

comments we receive by the date and

time specified in the ‘‘DATES’’ section

of this preamble, and, if we proceed

with a subsequent document, we will

respond to the comments in the

preamble to that document.

V. Waiver of Prior Notice With

Comment Period and of Delayed

Effective Date

We ordinarily publish a notice of

proposed rulemaking for a rule to

provide a period of public comment

prior to the effective date of the rule.

This procedure can be waived, however,

when an agency finds good cause that

a notice and comment procedure is

impracticable, unnecessary, or contrary

to the public interest. Further, we

generally provide for final rules to be

effective no sooner than 30 days after

the date of publication unless we find

good cause to waive the delay.

In the case of this rule, we find good

cause to implement this rule as a final

rule because the delay involved in the

prior notice and comment procedures

for these DMEPOS supplier standards

would be contrary to the public interest.

In SSA ’94, Congress enacted numerous

substantive provisions designed to

protect Medicare beneficiaries from

abusive practices by DMEPOS suppliers.

These provisions establish limitations

on the information DMEPOS suppliers

may include on a certificate of medical

necessity (section 1834(j)(2)), establish

restrictions on the methods DMEPOS

suppliers may use to contact certain

Medicare beneficiaries (section

1834(a)(17)), and limit the Medicare

beneficiary’s liability if the DMEPOS

supplier does not comply with these

statutory requirements (section

1834(j)(4)). Congress has also

established significant penalties,

including civil money penalties, if

DMEPOS suppliers violate particular

statutory provisions (section

1834(a)(18)(B)). Most importantly, for

purposes of this regulation, Congress

has indicated that beginning January 1,

1996, individuals or entities must meet

at least three additional standards in

order to obtain a Medicare supplier

number.

When considered as a whole, these

legislative changes demonstrate that

Congress has serious concerns about the

business practices employed by certain

DMEPOS suppliers, and that Medicare

beneficiaries require additional

protection from these practices. It

would, therefore, be contrary to the

public interest to delay establishing the

specific additional criteria that Congress

has identified by adhering to the normal

notice and comment procedures. In

addition, as noted previously, the

Secretary has already established certain

regulatory standards for DMEPOS

suppliers that were developed in

accordance with the notice and

comment procedures. These standards

are familiar to the public and the

regulated DMEPOS supplier community

and provide a base level of protection

for Medicare beneficiaries. Congress has

not indicated any intention to reduce or

eliminate these existing standards. It is

necessary to maintain these existing

regulatory standards in order to protect

the public interest and to further our

efforts to prevent fraud and abuse in the

Medicare program through Operation

Restore Trust.

As directed by statute, we have met

with representatives of DMEPOS

suppliers, the carriers, and consumers to

consider whether additional standards

are necessary. Although these meetings

were productive, it was not possible to

complete the full notice and comment

procedure in order to have final rules in

place before January 1, 1996. We are

currently preparing a notice of proposed

rulemaking reflecting our consultations

with these entities and individuals and

will publish that document in the near

future. These final rules will be effective

until altered by those regulations.

We believe that it would be contrary

to public interest to delay

implementation of the revised standards

pending the process of publishing both

a proposed rule and a final rule. The

three new standards are required to be

included in any new standards

promulgated by the Secretary, and are

not discretionary. Moreover, the existing

DMEPOS standards had been

promulgated in accordance with the

notice and comment provisions of the

Administrative Procedure Act.

Therefore, we find good cause to waive

proposed rulemaking for the revised

requirements set forth in § 424.57 and to

issue these regulations in final.

However, we are providing a 60-day

period for public comment, as indicated

at the beginning of this rule, on the

changes to § 424.57. For the above

reasons, we also find good cause to

waive the delay in effective date of this

rule.

VI. Regulatory Impact Analysis

Consistent with the Regulatory

Flexibility Act (RFA) (5 U.S.C. 601

through 612), we prepare a regulatory

flexibility analysis unless we certify that

a rule will not have a significant

economic impact on a substantial

number of small entities. For purposes

of the RFA, all providers, physicians,

and other suppliers are considered to be

small entities. Individuals and States are

not included in the definition of a small

entity.

In addition, section 1102(b) of the Act

requires us to prepare a regulatory

impact analysis if a rule may have a

significant impact on the operations of

a substantial number of small rural

hospitals. Such an analysis must

conform to the provisions of section 604

of the RFA. For purposes of section

1102(b) of the Act, we define a small

rural hospital as a hospital that is

located outside of a Metropolitan

Statistical Area and has fewer than 50

beds.

We are not preparing analyses for

either the RFA or section 1102(b) of the

Act because we have determined, and

we certify, that this rule will not have

a significant economic impact on a

substantial number of small entities or

a significant impact on the operations of

a substantial number of small rural

hospitals.

In accordance with the provisions of

Executive Order 12866, this final rule

was not reviewed by the Office of

Management and Budget.

List of Subjects in 42 CFR Part 424

Emergency medical services, Health

facilities, Health professions, Medicare.

42 CFR Part 424 is amended as set

forth below:

PART 424—CONDITIONS FOR

MEDICARE PAYMENT

1. The authority citation for part 424

continues to read as follows:

Authority: Secs. 1102 and 1871 of the

Social Security Act (42 U.S.C. 1302, and

1395hh).

2. Paragraph (c) of § 424.57 is revised

to read as follows:
63444 Federal Register / Vol. 60, No. 237 / Monday, December 11, 1995 / Rules and Regulations

§ 424.57 Special payment rules for items

furnished by DMEPOS suppliers and

issuance of DMEPOS supplier billing

numbers.

* * * * *

(c) Medicare does not issue a billing

number to a supplier that submits

claims for items listed in § 421.210(b) of

this subchapter until that supplier

meets, and certifies that it meets, the

following standards. The supplier—

(1) In response to orders which it

receives, fills those orders from its own

inventory or inventory in other

companies with which it has contracted

to fill such orders or fabricates or fits

items for sale from supplies it buys

under a contract;

(2) Is responsible for delivery of

Medicare covered items to Medicare

beneficiaries;

(3) Honors all warranties express and

implied under applicable State law;

(4) Answers any questions or

complaints a beneficiary has about the

item or use of the item that was sold or

rented to him or her, and refers

beneficiaries with Medicare questions to

the appropriate carrier;

(5) Maintains and repairs directly or

through a service contract with another

company, items it has rented to

beneficiaries;

(6) Accepts returns of substandard

(less than full quality for the particular

item) or unsuitable items (inappropriate

for the beneficiary at the time it was

fitted and/or sold) from beneficiaries;

(7) Discloses consumer information to

each beneficiary with whom it does

business which consists of the supplier

standards to which it must conform;

(8) Complies with the disclosure

provisions in § 420.206.

(9) Complies with all applicable State

and Federal licensure and regulatory

requirements;

(10) Maintains a physical facility on

an appropriate site; and

(11) Has proof of appropriate liability

insurance.

* * * * *

(Catalog of Federal Domestic Assistance

Program No. 93.773, Medicare—Hospital

Insurance; and Program No. 93.774,

Medicare—Supplementary Medical

Insurance Program)

Dated: November 22, 1995.

Bruce C. Vladeck,

Administrator, Health Care Financing

Administration.

[FR Doc. 95–30065 Filed 12–8–95; 8:45 am]

BILLING CODE 4120–01–P

DEPARTMENT OF TRANSPORTATION

Office of the Secretary

49 CFR Part 1

[OST Docket No. 1; Amendment 1–272]

Organization and Delegation of Powers

and Duties; Transfer of Great Lakes

Pilotage Authority From the Coast

Guard to the Saint Lawrence Seaway

Development Corporation

AGENCY: Office of the Secretary, DOT.

ACTION: Final rule.

SUMMARY: The Coast Guard’s

responsibility for administering the

Secretary’s functions under the Great

Lakes Pilotage Act of 1960, as amended,

and the Secretary’s authority to enter

into, revise, or amend arrangements

with Canada, are being transferred to the

Saint Lawrence Seaway Development

Corporation. This rule affirms the

interim final rule amending the

delegations to be in accordance with the

changed responsibilities. Although a

comment period for the Secretary’s

delegations is not required by the

Administrative Procedure Act, the

Department of Transportation requested

public comment on the interim final

rule because of public and

Congressional interest in Great Lakes

Pilotage. This final rule responds to the

comments and is necessary to inform

the public that the interim final rule has

been affirmed.

DATES: This rule is effective on

December 11, 1995.

FOR FURTHER INFORMATION CONTACT:

Steven B. Farbman, Office of the

Assistant General Counsel for

Regulation and Enforcement (202) 366–

9306, United States Department of

Transportation, 400 7th Street SW.,

Washington, DC 20590.

REGULATORY HISTORY: On July 31, 1995,

the Department of Transportation

(Department) published an interim final

rule with request for comments (60 FR

38971). The interim final rule contained

language that would transfer Great

Lakes Pilotage authority from the Coast

Guard to the St. Lawrence Seaway

Development Corporation (SLSDC). The

comment period for the interim final

rule ended on September 29, 1995, and

was to become effective October 30,

1995. On October 27, 1995, the

Department issued a rule suspending

the effectiveness of the interim final

rule. This final rule affirms the interim

final rule and establishes a new effective

date.

SUPPLEMENTARY INFORMATION: The Coast

Guard’s responsibility for administering

the Secretary’s functions under the

Great Lakes Pilotage Act of 1960, as

amended, (the Act) is being transferred

to the SLSDC. This rule amends the

delegations and enabling regulations to

be in accordance with the changed

responsibilities. The functions that are

being transferred are: (1) Investigation

and prosecution of violations of the Act;

(2) registration, qualification, and

training of registered pilots; (3)

association working rules and

dispatching procedures; (4) pilot

working conditions; (5) selection of

pilots; (6) number of pilots; (7)

availability of pilots; (8) number of

pilotage pools; (9) articles of association;

(10) auditing; and (11) ratemaking. The

licensing of pilots and the investigation

and prosecution of marine accidents

and incidents are essential Coast Guard

safety functions that are separate from

the Act and Great Lakes Pilotage

Regulations. These functions will

remain with the Coast Guard.

Transfer of pilotage responsibilities to

the SLSDC will place pilotage under

permanent civilian authority, and

placing pilotage in a smaller

organization with an established

presence on the Great Lakes will give

pilotage issues greater visibility and

more timely attention. In addition, the

SLSDC is being given authority to

negotiate directly with Canada, which

will allow timely adjustments to

pilotage rates. The lack of timely

adjustments has been a subject of past

pilot criticism.

The Secretary’s authority to enter

into, revise, or amend arrangements

with Canada is being delegated to the

SLSDC Administrator in coordination

with the General Counsel of the

Department. A Memorandum of

Arrangements between the United

States and Canada, last renegotiated in

1977, states that the Secretary and the

Minister of Transport of Canada ‘‘will

arrange for the establishment of

regulations imposing identical rates,

charges, and any other conditions or

terms for services of pilots in the waters

of the Great Lakes. * * *.’’ In 1983, the

Act was amended to provide that the

‘‘Secretary, subject to the concurrence of

the Secretary of State, may make

agreements with the appropriate agency

of Canada to * * * prescribe joint or

identical rates and charges .’’

Discussion of Comments and Changes

The Department received comments

from well over 100 commenters

regarding the transfer of Great Lakes

Pilotage oversight from the Coast Guard

to the SLSDC. Comments on the interim

final rule were received from Federal

and State legislators, pilot associations