        DEPARTMENT OF COMMERCE
        National Oceanic and Atmospheric Administration
        50 CFR Part 224
        [Docket No 1108195182318-01]
        RIN 0648-BB20
        Endangered Fish and Wildlife; Proposed Rule To Eliminate the Expiration Date Contained in the Final Rule To Reduce the Threat of Ship Collisions With North Atlantic Right Whales

          AGENCY:
          National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

          ACTION:
          Proposed rule; request for comments.

          SUMMARY:
          NMFS proposes to eliminate the expiration date (or “sunset clause”) contained in regulations requiring vessel speed restrictions to reduce the likelihood of lethal vessel collisions with North Atlantic right whales. The regulations restrict vessel speeds to no more than 10 knots for vessels 65 ft (19.8 m) or greater in overall length in certain locations and at certain times of the year along the east coast of the U.S. Atlantic seaboard. The speed regulations will expire December 9, 2013, unless the sunset clause is removed. NMFS seeks public comment on the Proposed Rule to eliminate the sunset clause and on metrics for assessing the long term costs and benefits of the rule to the endangered North Atlantic right whale population.

          DATES:
          Written or electronic comments (see ADDRESSES) must be received no later than 5 p.m. local time on August 5, 2013.

          ADDRESSES:

          Copies of this proposed rule and related documents can be obtained from: www/nmfs.noaa.gov/pr/shipstrike. Written requests for copies of these documents should be addressed to: Chief, Marine Mammal and Sea Turtle Conservation Division, Attn: Right Whale Ship Strike Reduction Rule, Office of Protected Resources, NMFS, 1315 East-West Highway, Silver Spring, MD 20910.You may submit comments, identified by [NOAA-NMFS-2012-0058], by any of the following methods:

            Electronic Submissions: Submit all electronic public comments via the Federal eRulemaking Portal http://www.regulations.gov.

            Mail: Send comments to: Chief, Marine Mammal and Sea Turtle Conservation Division, Office of Protected Resources, National Marine Fisheries Service, 1315 East-West Highway, Silver Spring, MD 20910, Attn: Right Whale Ship Strike Reduction Rule.

            Instructions: All comments received are a part of the public record and will generally be posted to http://www.regulations.gov without change. All Personal Identifying Information (for example, name, address, etc.) voluntarily submitted by the commenter may be publicly accessible. Do not submit Confidential Business Information or otherwise sensitive or protected information.
          NMFS will accept anonymous comments (enter N/A in the required fields, if you wish to remain anonymous). You may submit attachments to electronic comments in Microsoft Word, Excel, WordPerfect, or Adobe PDF file formats only.

          FOR FURTHER INFORMATION CONTACT:
          Gregory Silber, Ph.D., Greg.Silber@noaa.gov, Office of Protected Resources, NMFS, at (301) 427-8485.

        SUPPLEMENTARY INFORMATION:
        Background
        The Western North Atlantic right whale (Eubalaena glacialis) was severely depleted by commercial whaling. By the early 1900s, the remaining population off North America was reduced to no more than a few hundred whales. Despite the existence of protection from commercial whaling since 1935, the remaining population has failed to fully recover. The most recent (October 2011) peer-reviewed estimate of minimum population size is 444 North Atlantic right whales known to be alive in 2009 (Waring et al, 2012), which is approximately the same number that existed 25 years ago (Best et al., 2001). At this level, North Atlantic right whales are not only one of the world's most critically endangered large whale species but also one of the world's most endangered mammals.

        Population models suggest that their abundance may have increased at a rate of approximately 2 percent per year during the 1980s, but that it declined at about the same rate in the 1990s (Caswell et al., 1999; Waring et al., 2012). Analysis of data on the minimum number of whales alive during 1990-2009 (based on 2011 analysis) indicate an increase in the number of catalogued whales during the period, a mean growth rate of 2.6 percent, but with high inter-annual variation in numbers (Waring et al., 2012). These population trends are low compared to those for populations of other large whales that are recovering, such as south Atlantic right whales and taxonomically similar western Arctic bowhead whales, which have had growth rates of 4-7 percent or more per year for decades.

        Inherently low rates of reproduction in large whales mean that recovery rates for these populations can be low even under the best of circumstances. North Atlantic right whales may live 60 years or more. The age of first reproduction for female North Atlantic right whales is about 7 to 10 years old and calving intervals for the population have been estimated to average from about 3.5 to more than 5 years over the past three decades (Kraus et al., 2001; Kraus et al., 2007). Considering the high rates of natural mortality for calves and juveniles compared to adults, population projections indicate that female right whales must produce at least four calves over their lifetime to allow population growth, because half of the calves born are male, and the survival of female calves to adulthood is less than one in two (Kraus et al., 2001).

        Between the mid-1980s and late-1990s, documented calf production for the North Atlantic right whale population averaged about 11 calves per year (Kraus et al., 2001). Since 2001, a series of good calving years has been a source of optimism for future recovery. Between 1993 and 2010, calf production averaged about 17 calves per year (Waring et al., 2012) and the average calving interval for adult females declined to close to its lowest recorded level (between 2000 and 2006) (Kraus et al., 2007). However, not all calves enter the population as viable adults or sub-adults due, for example, to natural mortality. Between 17 and 45 calves are estimated to have died between 1989 and 2003 (Browning et al., 2010).The mean number of adult females recruited into the population between 2000/01 and 2005/06 was 3.8 per year (Kraus et al., 2007).

        Because of the species' low reproductive output and small population size, even low levels of human-caused mortality can pose a significant obstacle for North Atlantic right whale recovery. Population modeling studies in the late 1990s (Caswell et al., 1999; Fujiwara and Caswell, 2001) indicated that preventing the death of two adult females per year could be sufficient to reverse the slow decline detected in right whale population trends in the 1990s. However, in some years the rate of removal of individuals from this population due to human activities may exceed this number. In the 2004/2005 calving season alone three adult females were found dead with near-term fetuses.

        The primary causes of the right whale's failure to recover are deaths resulting from collisions with ships and entanglement in commercial fishing gear (Clapham et al., 1999; Knowlton and Kraus, 2001; Moore et al., 2005; NMFS, 2005). An average of approximately two known vessel collision-related right whale deaths have occurred annually over the last decade (Henry et al., 2012, Waring et al., 2012) and an average of 1.2 known vessel-strike related fatalities occurred in the period 2006-2010 (Waring et al., 2012). NOAA believes the actual number of deaths can possibly be higher than those documented, as some deaths likely go undetected or unreported, and in many cases when deaths are observed it is not possible to determine the cause of death from recovered carcasses due, for example, to advanced decomposition. Kraus et al., (2005) concluded that the number of documented deaths may be as little as 17 percent of the actual number of deaths from all sources.
        Studies indicate that female (van der Hoop et al., 2012) and sub-adult (Knowlton and Kraus, 2001) right whales are more often ship strike victims than are other age and gender classes. Although the reasons for this are not clear, one factor may be that pregnant females and females with nursing calves may spend more time at the surface where they are vulnerable to being struck. The effect of this on population recovery may be particularly profound if the lost female is at the height of, or just entering, her most reproductively active years because of the loss of her reproductive potential, and that of her female offspring, indefinitely.

        The number of right whale deaths resulting from vessel collisions appears to be related to an overlap between important right whale feeding, calving, and migratory habitats and shipping corridors along the eastern United States and Canada. Most right whales that died as a result of ship collisions were first reported dead in or near major shipping channels off east coast ports between Jacksonville, Florida and New Brunswick, Canada. Right whales appear to be particularly vulnerable to ship strikes in their nursery areas off Georgia/Florida (Vanderlaan et al., 2009). Based on massive injuries to whales killed by ships (e.g., crushed skulls, internal hemorrhaging, severed tail stocks, and deep, broad propeller wounds) (Campbell-Malone, et al., 2008), it appears that many right whales killed by vessels are victims of collisions with large ships.

        For the North Atlantic right whale population to recover, vessel-related deaths and serious injuries must be reduced. The North Atlantic Right Whale Recovery Plan (NMFS, 2005) ranks steps to reduce and eliminate such deaths among its highest priorities, and indicates that developing and implementing an effective strategy to address this threat is essential to recovery of the species. The ultimate goal of identifying and implementing conservation measures, including this one, on behalf of an endangered species is to recover the species.

        NMFS has taken steps to reduce vessel collisions with right whales, including extensive efforts to raise awareness among, and encourage voluntary actions by, vessel operators to reduce the risk of collisions (descriptions of these actions can be found in 73 FR 60173 (October 10, 2008); Lagueux et al., 2011; MMC, 2010). Despite those measures, whale deaths from ship strikes continue (Henry et al., 2012) and voluntary measures appear to be insufficient to address the problem (71 FR 36304; June 26, 2006). Accordingly, NMFS promulgated regulations that require vessels 65 feet and greater in length to travel at speeds of 10 knots or less in certain defined areas during certain times of the year (73 FR 60173; October 10, 2008).

        As indicated in that rule, vessel speed has been implicated as a principal causal factor in the severity of vessel collisions with large whales. As vessel speed increases, the probability of serious injury or death of a whale involved in a strike increases (Pace and Silber, 2005; Vanderlaan and Taggart, 2007). Studies have also indicated that as vessel speed increases so does both the size of the zone of influence around the hull of a vessel (i.e., the area in which a whale is vulnerable to a strike or might be drawn into a strike) and acceleration (i.e., impact velocity) experienced by the whale involved in a collision (Campbell-Malone, 2007; Silber et al., 2010).

        Among the comments that NMFS received on its 2008 proposed rule for the vessel speed restrictions were those indicating that the specific ways in which whale and vessel interacted prior to a collision were not well understood, and vessel speed restrictions were not likely to achieve their intended purpose, and thus that the rule should expire at a time certain. NMFS acknowledged there was uncertainty regarding the manner in which ships and whales interact at the time of a strike and the mechanisms that drive the relationship of speed and other factors (e.g., whale behavior in response to an approaching vessel) that lead to injuries and deaths. In view of those uncertainties and the burdens imposed on vessel operators, NMFS added a “sunset” provision to the final rule under which the regulation would expire five years from its effective date (i.e., December 9, 2013). Given that the justification for establishing the initial rule remains applicable and is supported by subsequent studies regarding the diminished probability of lethal strikes and an absence of vessel-related right whale deaths since the rule went into effect (as discussed below), NMFS specifically requests comments on this proposed rule to remove the sunset provision contained in the existing regulations.
        Further, in accordance with Executive Order 13563, NOAA conducts periodic and retrospective reviews of its existing regulations. Recent retrospective analysis of the existing rule (which was done by quantifying actual vessel speeds following implementation of the rule) indicate that economic impacts of the rule are substantially lower than were initially projected in 2008 (Nathan Associates Inc., 2012). However, quantifying the benefits of the existing vessel speed restriction rule can be less straightforward because the rule has been in effect for a relatively short period and because it can be difficult to determine if growth rates in a small biological population are linked to a specific conservation measure, particularly when that population is subject to a number of threats.

        Studies indicate that the North Atlantic right whale population is slowly growing (Waring, et al., 2012). In addition, as noted above, recent studies indicate that the probability of lethal strikes have been diminished substantially as a result of the rule (Lagueux et al., 2011; Wiley et al., 2011; Conn and Silber, 2013), and there have been no vessel-strike related right whale deaths in the areas covered by the vessel speed restriction rule since its implementation. Still, there may be additional means of assessing whether the rule is meeting its objectives, and, therefore whether an alternative time for a sunset provision may be appropriate. To address these questions and provide benchmarks or a timetable for retrospective review of any final rule in this proceeding, NOAA seeks public feedback about information that may help establish the amount of time and the studies needed to determine how effective the rule is in protecting and recovering the population over the long term. In other words, to conduct a reassessment of the benefits of the rule, what metrics are needed and how much time is needed to obtain data for such metrics?
        In this regard, NMFS indicated that while the rule was in effect, the agency would, to the extent possible with existing resources, synthesize existing data, gather additional data, or conduct additional research on ship/whale collisions to address those uncertainties. NMFS also committed to review the previously estimated economic consequences of the speed restriction rule (73 FR 60183 (comment and response 11)). Some of this work has now been completed (Nathan Associates Inc., 2012). NMFS also noted in the final rule that determining the biological effectiveness of protective measures like the speed rule to a high level of statistical significance is difficult and takes many years of data collection (73 FR 60182 (comment and response 7)).

        In November 2008, NMFS convened a workshop, and later prepared a report that identified ways to assess the rule's effectiveness (Silber and Bettridge, 2009). As did the final rule, the workshop participants recognized that adequately assessing the effectiveness of any protective measure (the vessel speed rule included) with statistical rigor would be nearly impossible in brief sampling periods (e.g., 2-3 years) because definitively-determined ship strike-related right whale deaths are rare occurrences, and the ability to ascribe a cause of death is limited. Therefore, conclusions regarding the rule's biological effectiveness would require data collection periods longer than one to five years. These caveats notwithstanding, NMFS committed to assess the rule's effectiveness to the extent possible.
        Consistent with the workshop report, NMFS initiated studies to assess, among other things, vessel operator response to, and compliance with, the provisions of the rule; changes in ship strike-related death rates in U.S. east coast large whale populations; and economic impacts of the rule to shipping and related maritime interests. The findings of these studies are summarized in Silber and Bettridge (2012). Statistical analyses contained in the 2012 report indicated that the sampling period was too short to make a meaningful determination about the rule's impact on the right whale population. Simply detecting a relatively large change in the rate of known ship strike deaths and serious injuries would require 5-7 or more years (depending on the magnitude of the change), perhaps longer (Pace, 2011; Silber and Bettridge, 2012). Thus, for these reasons and others indicated above, it is difficult to make definitive conclusions at this time regarding the long-term biological effectiveness of the current vessel speed restriction rule.

        With regard to reassessment of the existing rule, NMFS will continue to monitor right and large whale death rates; determine causes of whale deaths when possible; monitor right whale population size, demographics, and such things as calving and recruitment rates; monitor vessel operations in response to the vessel speed restrictions; attempt to further assess the relationship between vessel speed and the likelihood of ship strikes of whales; and evaluate new and historic whale sighting records. Such analysis eventually may lead to subsequent rulemaking to modify or refine certain aspects of the regulation (e.g., possible changes to the locations, dimensions, or duration of management areas, or termination of parts or all of the rule's provisions). Those efforts are ongoing but will not be concluded before the current rule expires. Therefore, NMFS also requests comments on its ongoing activities to monitor and assess the rule's effectiveness, as well as input on the data, metrics, and time needed to do so.
        NMFS continues to believe the 2008 speed regulation is an important conservation measure for North Atlantic right whales, based on the supporting information contained in the preamble for the 2008 rule, additional information that has emerged since, and the lack of any new information that contradicts our original conclusions that the regulation is justified. Accordingly, NMFS is proposing to remove the sunset clause to allow this protective regulation to remain in effect and seeks comment on this proposed action. In addition, given that the justification for establishing the initial rule remains applicable and is supported by subsequent studies, but that difficulty remains in quantifying the benefits of the existing rule, NOAA requests comments on whether the final rule should include an extension of the sunset provision that would allow time for a more comprehensive assessment of the benefits and effectiveness of the rule, and what time frame would be appropriate for such an extension. Further, NOAA seeks comments on modifications that would improve the effectiveness of the rule.
        Justification for This Proposed Rule

        The use of vessel speed restrictions in the 2008 rule to reduce lethal vessel strikes of right whales was based largely on analysis by Laist et al. (2001), Pace and Silber (2005), and Vanderlaan and Taggart (2007). These studies found that the likelihood of serious injury and death in whales struck by vessels was diminished by reduced vessel speed. The latter two analyses indicated that the probability of death or a serious injury of a struck whale is rapidly diminished when vessel speeds are below 12 knots (and the probability decreases as speed decreases). Vanderlaan and Taggart (2007) concluded that for each one-knot increase in vessel speed the likelihood of a fatal whale strike increased by 1.5-fold. Based on the findings reported in these same studies, vessel speed restrictions are being used in other locations to reduce the threat of ship strikes to large whales including humpback whales in Glacier Bay, AK, and fin and sperm whales in the Mediterranean Sea. Vessel speed restrictions have also been effective in reducing vessel strikes of manatees (Laist and Shaw, 2005), and the relationship between vessel speed and the likelihood of collisions with marine turtles has been demonstrated (Hazel and Gyuris, 2006; Hazel et al., 2007).

        The studies relied upon for the 2008 rule continue to represent the best available information and NMFS is not aware of any new information that contradicts the original basis for the speed restriction. Additional relevant peer-reviewed studies have been published since the rule went into effect. Among them, Vanderlaan et al. (2009; regarding right whales along the U.S. and Canadian eastern seaboard), Vanderlaan and Taggart (2009; right whales in Canadian waters), and Gende et al. (2011; humpback whales in Alaskan waters) concluded that vessel speed restrictions are effective in reducing the occurrence or severity of vessel strikes of right and other large whale species in various geographic locations. Recent modeling studies estimated that the vessel speed restrictions established by the 2008 final rule have substantially lowered the probability of lethal vessel strikes of North Atlantic right whales (Lagueux et al., 2011; Wiley et al., 2011; Conn and Silber, 2013). In addition, no right whale vessel strike-related fatalities have occurred in or near the vessel speed restriction areas established by the 2008 rule (from December 2008 to present). At least two right whale deaths or serious injuries have occurred as a result of vessel strikes since implementation of the rule, but they either occurred outside vessel speed zones or involved vessels not subject to the rule. In one case the vessel type involved is not known and a non-military sovereign vessel was involved in the second case. Operators of sovereign vessels in U.S. waters that are not subject to the provisions of the rule (e.g., military vessels) are well aware of the vessel speed restrictions through ESA Section 7 consultations with NMFS, regular interagency collaboration and notification, and through NMFS involvement in these agencies' marine conservation programs. Also, NOAA provides information to operators of vessels that are not subject to the rule due to vessel size (e.g., those less than 65 feet in length) via notices that routinely accompany marine weather broadcasts and other radio broadcasts to boaters, information posted at small ports and dock facilities, a smart phone application, the distribution of brochures, its maritime community liaisons, press releases, and in meetings with the general public.
        Based on the information relied upon for the 2008 speed restriction rule and subsequent information cited herein, NMFS has determined that the provisions of that rule should be extended to maintain the status quo and to continue a measure designed to reduce the threat of vessel collisions with Western North Atlantic right whales. The way to achieve that is through the proposed removal of the expiration provision currently in the regulation. The underlying science and administrative record providing support for the vessel speed restrictions remain unchanged. All other provisions of the rule as it now exists would remain in place.
        Public Participation

        It is the policy of the Department of Commerce, whenever practicable, to afford the public an opportunity to participate in the rulemaking process. Accordingly, interested persons may submit written comments regarding this proposed rule by one of the methods listed in the ADDRESSES section. All comments must be received by midnight of the close of the comment period.
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          Lagueux, K.M., M.A. Zani, A.R. Knowlton, S.D. Kraus. 2011. Response by vessel operators to protection measures for right whales Eubalaena glacialis in the southeast US calving ground. Endangered Species Research. 14:69-77.
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          Marine Mammal Commission. 2010. Annual Report to Congress 2010. U.S. Marine Mammal Commission, Bethesda, Maryland. http://mmc.gov/reports/annual/welcome.shtml

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          Nathan Associates Inc. 2008. Economic analysis for the Final Environmental Impact Statement of the North Atlantic right whale ship strike reduction strategy. Report to the Office of Protected Resources, NMFS, NOAA. August 2008. 165 pages. http://www.nmfs.noaa.gov/pr/shipstrike/.

          Nathan Associates Inc. 2012. Economic Analysis of North Atlantic Right Whale Ship Strike Reduction Rule: Update of Economic Impact and Scoping Assessment for Study of Potential Modifications. Report to the Office of Protected Resources, NMFS, NOAA. December 2012. Available at: http://www.nmfs.noaa.gov/pr/shipstrike/.

          National Marine Fisheries Service. 2004. Advanced Notice of Proposed Rulemaking for Right Whale Ship Strike Reduction. U.S. Department of Commerce. 69 FR 30857, 1 June 2004.

          National Marine Fisheries Service, 2005. Recovery Plan for the North Atlantic Right Whale (Eubalaena glacialis), Revision. U.S. Dept. of Commerce, Office of Protected Resources, National Marine Fisheries Service.
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          Silber, G.K. and S. Bettridge. 2012. An Assessment of the Final Rule to Implement Vessel Speed Restrictions to Reduce the Threat of Vessel Collisions with North Atlantic Right Whales.U.S. Dept. of Commerce, NOAA Technical Memorandum NMFS-OPR-48, 120 pages. www.nmfs.noaa.gov/pr/shipstrike/.

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        Classification

        This proposed rule has been determined to be significant for purposes of Executive Order 12866.

        This final rule does not have Federalism implications as that term is defined in Executive Order 13132.
        This proposed rule does not contain any new collections of information subject to the Paperwork Reduction Act (PRA). However, the regulation that this proposed rule would extend does contain such a collection of information. If under certain conditions deviation from the speed restriction are necessary to maintain safe maneuvering speed, the vessel log book must contain an entry, signed and dated by the master of the vessel, documenting the reasons for the deviation, the speed at which the vessel is operated, the area, and the time and duration of such deviation. These entries are estimated to average five minutes per response, including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection information. On October 30, 2008, the Office of Management and Budget (OMB) approved the collection-of-information requirements contained in the October 10, 2008, final rule with an expiration date of April 30, 2009. On August 27, 2009, OMB approved a request by NMFS to extend its approval of the collection-of-information requirements without change, with an expiration date of August 31, 2012. NMFS has applied for an extension of this expiration date. There is no additional cost to the affected public.
        Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB Control Number.

        NMFS prepared a draft and final Environmental Impact Statement (FEIS) pursuant to the National Environmental Policy Act and an accompanying Economic Analysis report for the existing rule. While the FEIS contained an alternative with an expiration clause, the DEIS and economic analysis evaluated an alternative without an expiration, and that alternative was incorporated by reference into the FEIS. This proposed rule seeks only to remove the expiration clause of the existing speed regulation. The provisions of the speed regulation that would remain upon removal of the expiration are otherwise the same as those analyzed in those documents. NMFS prepared a Supplemental Information Report (SIR) that provides updates to the information and analysis contained in the FEIS. NMFS also prepared an updated economic analysis for the existing regulation. Based on the SIR, NMFS determined preliminarily that a supplemental NEPA analysis is not required for this proposed rule. The FEIS is posted at: http://www.nmfs.noaa.gov/pr/shipstrike/. Copies of the Economic Analysis prepared for the FEIS are available from NMFS's Office of Protected Resources (see ADDRESSES).
        Pursuant to the Regulatory Flexibility Act, NMFS prepared the following Initial Regulatory Flexibility Analysis (IRFA).
        IRFA
        A description of the action, why it is being considered, and the legal basis for this action are contained in the preamble to this proposed rule, as well as the preambles to the vessel speed restriction 2006 proposed (71 FR 36299) and 2008 final (73 FR 60173) rules. This proposed rule would extend the provisions of the existing rule by removing its expiration date. This proposed rule does not duplicate, overlap, or conflict with other Federal rules.

        This IRFA incorporates analysis prepared for the 10-knot vessel speed restrictions contained in the 2006 proposed and 2008 final rules, and the corresponding initial and final Regulatory Flexibility Act analyses and determinations contained in those rulemaking actions. It also incorporates economic analysis contained in the FEIS, and the Regulatory Impact Review (RIR) and Economic Analysis (Nathan Associates Inc., 2008) prepared for the 2008 final rule. In addition to these documents, incorporated here by reference, NMFS has conducted studies to update the previously prepared (i.e., 2008) economic and other analyses. Results of those studies are provided in Silber and Bettridge (2012) and in Nathan Associates Inc. (2012) and are summarized in “Economic Impact” section below.
        NMFS believes that there may be disproportionate impacts resulting from implementation of this proposed rule among types of small entities within the same industry as well as between large and small entities of different vessel types occurring within different industries based on the IRFA developed for the 2008 final rule. There may also be disproportionate impacts between or among vessels servicing different areas or ports, but there are no data or evidence to indicate that this is the case. The economic impacts of the proposed rule as it relates to small entities are discussed below.

        This proposed rule would contribute to the protection of the critically endangered North Atlantic Right Whale and advance the objectives outlined in the recovery plan for the species. NMFS believes that the justification for the utility of vessel speed restriction in reducing the risk of fatal strikes to whales as provided in the final rule and as contained in various scientific studies (e.g., Vanderlaan and Taggart, 2007) continue to apply. In addition, this conclusion has been backed by subsequent modeling analyses presented in a number of peer-reviewed papers published since implementation of the vessel speed rule (e.g., Gende et al., 2011; Vanderlaan et al, 2009; Wiley et al., 2011; Conn and Silber, 2013) and as referenced in the “Justification for this Proposed Rule” section of this proposed rule (above). This proposed amendment to the existing rule would preserve the status quo beyond the current expiration date.
        Description and Estimate of the Number of Affected Small Entities to Which This Rule Will Apply
        This proposed rule will continue to apply to vessels that are 65 feet (19.8 m) or greater in overall length. Five industries are directly affected by this proposed rulemaking: Commercial shipping, passenger ferries, whale watching vessels, commercial fishing vessels, and charter fishing vessels. This analysis uses size standards prescribed by the Small Business Administration (SBA). Specifically, for international and domestic shipping operators, the SBA size standard for a small business is 500 employees or less. The same threshold applies for international cruise operators and domestic ferry service operators. For whale watching operators and charter fishing commercial fish harvesters, the SBA threshold is $7.0 million of average annual receipts. For commercial fishing operators, the SBA threshold is $4.0 million of average annual receipts. Based on the economic analysis provided for the 2008 final rule and the most recent economic impact studies (Nathan Associates Inc., 2012), the number of small entities potentially affected by this proposed rule, by industry, are expected to be as follows: 362 commercial shipping vessels of various classifications (31 of which are passenger ships), 297 commercial fishing vessels, 40 charter fishing vessels, 14 passenger ferries, 22 whale-watching vessels.

        Detailed information on small entities, other than commercial shipping, can be found on pages 143 through 147 and in Tables 4-45 (commercial fishing), 4-46 (passenger ferries), and 4-49 (whale watching) of the Economic Analysis for the FEIS (Nathan Associates Inc., 2008) prepared for the 2008 final rule and as updated on pages 31-36 of the Nathan Associates Inc. (2012) report. Detailed information on small entities in the commercial shipping sector is contained on pages 158 through 161 of the Economic Analysis for the FEIS and pages 29-33 of Nathan Associates Inc. (2012). Those analyses are incorporated here, as are updates to the economic impact analysis as noted below.
        Based on analysis contained in the FRFA that accompanied the 2008 final rule and the 2012 Nathan Associates Inc. report (which is also incorporated into this IRFA), NMFS concludes that there may be disproportionate impacts resulting from implementation of that rule among types of small entities within the same industry as well as between large and small entities of different vessel types occurring within different industries. NMFS also believes that there may be disproportionate impacts between large commercial shipping and large passenger vessels, and the group consisting of passenger ferries, high-speed whale watching vessels, and charter fishing vessels (see “Economic Impacts” below). These conclusions were based on the assumption that large commercial vessels would be less adversely affected than their companion small commercial and shipping vessels.
        Economic Impacts
        Proposed Alternative (Continuation of 10-Knot Speed Restriction)

        The proposed alternative continues the imposition of a 10-knot speed limit applied in defined areas on a seasonal basis. As noted above, economic impact analyses are contained in the IRFA for the 2006 proposed rule and Final Regulatory Flexibility Analysis (FRFA) for the 2008 final rule, draft and final EIS, and the accompanying 2008 economic analysis for the vessel speed restrictions. These analyses remain pertinent to this proposed action (and are not reprinted here, but are incorporated by reference). Further, they have been updated based on data collected since the 2008 rule has been in effect, including more recent (i.e., 2009 and 2012) bunker fuel prices and improved vessel operation information (i.e., actual, rather than projected, vessel traffic and speed data). This analysis can be found in Appendix K of Silber and Bettridge (2012) and in Nathan Associates Inc. (2012) which are available at http://www.nmfs.noaa.gov/pr/shipstrike/. The results of the updated economic analysis indicate that the overall economic impacts as well as the economic impacts to each of the industries directly affected by this proposed rule are likely to be lower than what had been predicted for the 2008 final rule.
        Previous estimates for the 2006 proposed rule and the 2008 final rule had relied on 2003/2004 USCG port-call data (the best available at the time), 2004 vessel operating costs, 2008 fuel costs, and typical vessel operating speed by vessel type and size. New information was used to revise the economic impact estimates. The primary operational impact on the shipping industry is the extra sailing time caused when vessels limit their speed. Changes in sailing times were assessed using Automatic Identification System (AIS) vessel operation information, which enabled a more precise analysis of actual vessel speeds rather than assumptions about expected at-sea speed capabilities. Therefore, these data provided a quantification of the actual number and actual speeds of trips through affected areas rather than port-call information.

        The results from the updated economic analysis indicate that the overall average delay in sailing time for all vessels was 0.37 hours (22 min) and ranged from 0.08 hours (5 min) for refrigerated cargo ships to 0.62 hours (37 minutes) for combination cargo (e.g., oil-bulk-ore) carriers. The estimated delays were lower than what was predicted for the 2008 final rule, which projected overall estimated average delays of 1.2 hours for all vessel types and over 2 hours for freight barge trips into some ports.
        The IRFA for the 2006 proposed rule reflected the alternatives being considered at the time to achieve the purpose and need. That information, while still relevant, is not repeated here. This current IRFA for the proposed action reflects the current purpose and need, namely, to maintain the status quo of reducing the risk of lethal ship strikes to highly endangered North Atlantic right whales.
        The only alternative considered in this proposed rule is the “no action” alternative. This alternative would allow the provisions of the 2008 final rule to expire in December 9, 2013. The no-action alternative would be economically preferable for some small entities, including some passenger ferries, high-speed whale watching vessels, and charter fishing vessels. The “no action” alternative was rejected because NMFS has determined that vessel speed restrictions are needed to reduce the threat of ship collisions with right whales and to aid in the recovery of this highly endangered species.
        The rule making process for the 2008 final rule considered different speed alternatives. As the IRFA and FRFA for that rule making acknowledged, a 12-knot or 14-knot speed limit would be economically preferable for some small entities. However, based on the best information available both then and now, the likelihood of serious injury and death to whales increases with vessel speed. Therefore, NMFS continues to believe that 10 knots provides the greatest protection for, and the greatest likelihood of allowing recovery of, right whales.
        Description of the Projected Reporting, Recordkeeping, and Other Compliance Requirements of the Final Rule
        Recordkeeping requirements associated with this rule include logbook entries in the event of deviation from speed restrictions. These entries are estimated to average five minutes per response, including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection information.
        There are no compliance requirements other than the management actions contained in this proposed rule.

          List of Subjects in 50 CFR Part 224
          Endangered marine and anadromous species.

          Dated: May 31, 2013.
          Samuel D. Rauch III,
          Deputy Assistant Administrator for Regulatory Programs, Performing the functions and duties of the Assistant Administrator for Regulatory Programs, National Marine Fisheries Service.

        For the reasons set out in the preamble, 50 CFR part 224 is proposed to be amended as follows:

          PART 224—ENDANGERED MARINE AND ANADROMOUS SPECIES

        1. The authority citation for 50 CFR part 224 continues to read as follows:

          Authority:
           16 U.S.C. 1531-1543 and 16 U.S.C. 1361 et seq,

        2. In § 224.105, paragraph (d) is removed.

      [FR Doc. 2013-13442 Filed 6-5-13; 8:45 am]
      BILLING CODE 3510-22-P


        DEPARTMENT OF HEALTH AND HUMAN SERVICES
        Centers for Medicare & Medicaid Services
        42 CFR Part 410
        [CMS-1436-P]
        RIN 0938-AR06
        Medicare Program; Clinical Laboratory Fee Schedule: Signature on Requisition

          AGENCY:
          Centers for Medicare & Medicaid Services (CMS), HHS.

          ACTION:
          Proposed rule.

          SUMMARY:
          This proposed rule would retract the policy adopted in the calendar year 2011 Physician Fee Schedule final rule with comment period that requires the signature of a physician or qualified non-physician practitioner on a requisition for clinical diagnostic laboratory tests paid under the Clinical Laboratory Fee Schedule (CLFS). In addition, this proposed rule would reinstate the prior policy that the signature of a physician or qualified non-physician practitioner is not required on a requisition for Medicare purposes for a clinical diagnostic laboratory test paid under the CLFS.

          DATES:
          To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. eastern daylight time (e.d.t.) on August 29, 2011.

          ADDRESSES:
          In commenting, please refer to file code CMS-1436-P. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.
          You may submit comments in one of four ways (please choose only one of the ways listed):

          1. Electronically. You may submit electronic comments on this regulation to  http://www.regulations.gov. Follow the instructions for “submitting a comment.”
          2. By regular mail. You may mail written comments to the following address only: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1436-P, P.O. Box 8013, Baltimore, MD 21244-8013.
          Please allow sufficient time for mailed comments to be received before the close of  the comment period.
          3. By express or overnight mail. You may send written comments to the following address only: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1436-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-8013
          4. By hand or courier. Alternatively, you may deliver (by hand or courier) your written comments before the close of the comment period to either of the following addresses:
          a. For delivery in Washington, DC—  Centers for Medicare & Medicaid Services, Department of Health and Human Services, Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201
          (Because access to the interior of the Hubert H. Humphrey 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.)
          b. For delivery in Baltimore, MD—  Centers for Medicare & Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850.
          If you intend to deliver your comments to the Baltimore address, please call telephone number (410) 786-1066 in advance to schedule your arrival with one of our staff members.
          Comments mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the close of the comment period.

          FOR FURTHER INFORMATION CONTACT:
           Glenn McGuirk, (410) 786-5723.

        SUPPLEMENTARY INFORMATION:

        I. Background
        A. History and Overview
        In the March 10, 2000 Federal Register (65 FR 13082), we published a proposed rule entitled “Medicare Program; Negotiated Rulemaking: Coverage and Administrative Policies for Clinical Diagnostic Laboratory Services,” to announce and solicit comments on the results of our negotiated rulemaking committee tasked to establish national coverage and administrative policies for clinical diagnostic laboratory services payable under Part B of Medicare.
        In the November 23, 2001 Federal Register (66 FR 58788), we published a final rule, which established these national coverage and administrative policies. In that final rule, we explained our policy on ordering clinical diagnostic laboratory services and revised regulatory language in § 410.32. Our regulation at § 410.32(a) includes a requirement that states “[a]ll diagnostic x-ray tests, diagnostic laboratory tests, and other diagnostic tests must be ordered by the physician who is treating the beneficiary.” In the November 23, 2001 final rule (66 FR 58809), we added paragraph (d)(2) to § 410.32 to require that the physician or qualified nonphysician practitioner (NPP) (that is, clinical nurse specialists, clinical psychologists, clinical social workers, nurse-midwives, nurse practitioners, and physician assistants) who orders the service must maintain documentation of medical necessity in the beneficiary's medical record. In both the March 10, 2000 proposed rule (65 FR 13089) and the November 23, 2001 final rule (66 FR 58802), we noted that “[w]hile the signature of a physician on a requisition is one way of documenting that the treating physician ordered the test, it is not the only permissible way of documenting that the test has been ordered.” In the preamble of these rules, we described the policy of not requiring physician signatures on requisitions for clinical diagnostic laboratory tests, but implicitly left in place the existing requirements for a written order to be signed by the ordering physician or NPP for clinical diagnostic laboratory tests, as well as other types of diagnostic tests. We further stated, in the March 10, 2000 proposed rule (65 FR 13089) and the November 23, 2001 final rule (66 FR 58802), that we would publish instructions to Medicare contractors clarifying that the signature of the ordering physician or NPP on a requisition for a clinical diagnostic laboratory test, is not required for Medicare purposes.
        On March 5, 2002, we issued a program memorandum (Transmittal AB-02-030, Change Request 1998) implementing the administrative policies set forth in the November 23, 2001 final rule, including the following instruction:

          Medicare does not require the signature of the ordering physician on a laboratory service requisition. While the signature of a physician on a requisition is one way of documenting that the treating physician ordered the service, it is not the only permissible way of documenting that the service has been ordered. For example, the physician may document the ordering of specific services in the patient's medical record.

        On January 24, 2003, we issued a program transmittal (Transmittal 1787, Change Request 2410) to manualize the March 5, 2002 program memorandum. The transmittal page stated, “Section 15021, Ordering Diagnostic Tests, manualizes Transmittal AB-02-030, dated March 5, 2002. In accordance with negotiated rulemaking for outpatient clinical diagnostic laboratory services, no signature is required for the ordering of such services or for physician pathology services.” In the manual instructions in that transmittal (that is, Transmittal 1787), we stated in a note: “No signature is required on orders for clinical diagnostic tests paid on the basis of the physician fee schedule or for physician pathology services.” The manual instructions inadvertently omitted the reference to clinical diagnostic laboratory tests. Thus, the transmittal seemed to extend the policy set forth in the November 23, 2001 final rule (that no signature is required on requisitions for clinical diagnostic laboratory tests paid under the clinical laboratory fee schedule (CLFS)) to also apply to clinical diagnostic tests paid on the basis of the physician fee schedule (PFS) and physician pathology services. In addition, the manual instructions used the term “order” instead of “requisition,” which some members of the industry have asserted caused confusion. When we transitioned from paper manuals to the current electronic Internet Only Manual (IOM) system, these manual instructions were inadvertently omitted from the new Benefit Policy Manual (BPM).
        On August 28, 2008, we issued a program transmittal (Transmittal 94, Change Request 6100) to update the BPM to incorporate language that was previously contained in section 15021 of the Medicare Carriers Manual. The reissued language stated, “No signature is required on orders for clinical diagnostic tests paid on the basis of the clinical laboratory fee schedule, the physician fee schedule, or for physician pathology services.” After the publication of the August 2008 Program Transmittal (Transmittal 94), we received numerous inquiries from laboratories, diagnostic testing facilities, and hospital representatives who had questions about whether the provision applied to all diagnostic services, including x-rays, magnetic resonance imaging (MRIs), and other nonclinical laboratory fee schedule diagnostic services.
        To resolve any existing confusion surrounding the implementation of the CLFS policy in 2001 and subsequent transmittals, we restated and solicited public comments on our policy in the July 13, 2009 proposed rule (74 FR 33641 and 33642), entitled “Medicare Program; Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2010” (hereinafter referred to as the CY 2010 PFS proposed rule). At that time, our policy was that the signature of a physician or NPP was not required on a requisition for clinical diagnostic laboratory tests paid on the basis of the CLFS. However, we were clear that we would still require that it must be evident, in accordance with our regulations at § 410.31(d)(2) and (3), that the physician or NPP had ordered the services.
        We clarified that this policy regarding requisitions for clinical diagnostic laboratory tests would not supersede other applicable Medicare requirements (such as those related to hospital conditions of participation (CoPs)), which require the medical record to include an order signed by the physician or NPP who is treating the beneficiary. In addition, we stated that we did not believe that our policy regarding signatures on requisitions for clinical diagnostic laboratory tests supersedes other requirements mandated by professional standards of practice or obligations regarding orders and medical records promulgated by Medicare, the Joint Commission, or State law; nor did we believe the policy would require providers to change their business practices.
        In the CY 2010 PFS proposed rule (74 FR 33641 and 33642), we also restated and solicited public comment on our longstanding policy, consistent with the principle in § 410.32(a) that a written order for diagnostic tests including those paid under the CLFS and those that are not paid under the CLFS (for example, that are paid under the PFS or under the OPPS), such as X-rays, MRIs, and the technical component (TC) of physician pathology services, must be signed by the ordering physician or NPP. We were clear that the policy that signatures are not required on requisitions for clinical diagnostic laboratory tests paid based on the CLFS applied only to requisitions (as opposed to written orders).
        Additionally, in the CY 2010 PFS proposed rule (74 FR 33642) we solicited public comments about the distinction between an order and a requisition. We noted that an “order” as defined in our Internet Only Manual (IOM), 100-02, Chapter 15, Section 80.6.1, is a communication from the treating physician or NPP requesting that a diagnostic test be performed for a beneficiary. The order may conditionally request an additional diagnostic test for a particular beneficiary if the result of the initial diagnostic test ordered yields a certain value determined by the treating physician or NPP (for example, if test X is negative, then perform test Y). We further clarified in the CY 2010 PFS final rule with comment period (74 FR 61930) that an order may be delivered via any of the following forms of communication:
        • A written document signed by the treating physician or NPP, which is hand-delivered, mailed, or faxed to the testing facility.
        • A telephone call by the treating physician or NPP or his or her office to the testing facility.
        • An electronic mail, or other electronic means, by the treating physician or NPP or his or her office to the testing facility.
        If the order is communicated via telephone, both the treating physician or NPP, or his or her office, and the testing facility must document the telephone call in their respective copies of the beneficiary's medical records.
        In the CY 2010 PFS proposed rule (74 FR 33642), we defined a “requisition” as the actual paperwork, such as a form, which is furnished to a clinical diagnostic laboratory that identifies the test or tests to be performed for a patient. The requisition may contain patient information, ordering physician information, referring institution information, information on where to send reports, billing information, specimen information, shipping addresses for specimens or tissue samples, and checkboxes for test selection. We believed the requisition was ministerial in nature, assisting laboratories with the billing and handling of results, and serves as an administrative convenience to providers and patients. We believed that a written order, which may be part of the medical record, and the requisition, were two different documents, although a requisition that is signed may serve as an order.
        During the public comment period for the CY 2010 PFS proposed rule, we received numerous comments on these issues. Subsequently, in the CY 2010 PFS final rule with comment period (74 FR 61931), we stated that we would continue to carefully consider the issue of physician signatures on requisitions and orders and that we planned to revisit these issues in the future.

        In the CY 2011 PFS proposed rule (75 FR 40162 through 40163), we proposed to require a physician's or NPP's signature on requisitions for clinical diagnostic laboratory tests paid on the basis of the CLFS. We stated that we believed this policy would result in a less confusing process because a physician's signature would be required for all requisitions and orders, eliminating the uncertainty over whether the documentation is a requisition or an order, whether the type of test being ordered requires a signature, or which payment system does or does not require a physician's or NPP's signature. We also stated that we believed the requirement would not increase the burden on physicians and would be easier for the reference laboratory technicians to know whether a test is appropriately requested, which would minimize potential compliance problems for laboratories during the course of a subsequent Medicare audit because a signature would be consistently required. We solicited public comments on the CY 2011 PFS proposed rule.
        After careful consideration of all the comments received, we finalized our proposed policy without modification to require a physician's or NPP's signature on requisitions for clinical diagnostic laboratory tests paid under the CLFS in the CY 2011 PFS final rule with comment period (75 FR 73483), which became effective on January 1, 2011. This policy did not affect physicians or NPPs who chose not to use requisitions to request clinical diagnostic laboratory tests paid under the CLFS. Such physicians or NPPs could continue to request such tests by other means, such as by using the annotated medical records, documented telephonic requests, or electronic requests.
        II. Provisions of the Proposed Rule
        In this proposed rule, we would retract the policy we finalized in the CY 2011 PFS final rule with comment period (75 FR 73483) and reinstate the prior policy that the signature of the physician or NPP is not required on a requisition for Medicare purposes for a clinical diagnostic laboratory test paid under the CLFS. We are proposing this policy based on continued and new concerns noted by stakeholders regarding the practical effect of the finalized policy on beneficiaries, physicians, and NPPs.

        While we did not solicit further comments on the signature on requisition issue in the CY 2011 PFS final rule with comment period, we did receive additional feedback from industry stakeholders on the issue after its publication in the Federal Register. Industry stakeholders identified many scenarios where it would be difficult to obtain the physician's or NPP's signature on the requisition for clinical diagnostic laboratory tests under the CLFS. Industry stakeholders asserted that there are many different situations where the physician or NPP would direct staff to prepare requisitions for laboratory tests, but then would be unavailable to provide his or her signature on the requisition. As an example, and one that was raised by commenters to the CY 2011 PFS proposed rule, in the long-term care setting, the physician is typically not available in person on a daily basis. In these cases, the physician may keep abreast of the patient's condition by calling the nursing staff. If a patient's condition indicates that a clinical diagnostic laboratory test is required, the nursing staff typically transcribes the order from the physician over the telephone onto a requisition. The information has to be transmitted to the laboratory and, in this scenario, there is no physician's or NPP's signature on the requisition. Another example that occurs in many settings, including nursing homes, all types of hospitals (inpatient as well as outpatient), and physician offices, involves specimens that are packaged for transmission to the laboratory with a requisition by nursing staff. Because the specimen often is transferred directly from the patient to the nursing staff without, in most cases, a physician's or NPP's intervention, the requisition that accompanies the specimen does not bear the signature of the physician or NPP.
        Even in cases where the physician or NPP sees the patient in his/her offices for an appointment and recommends that clinical diagnostic laboratory testing be performed, we now better understand that, typically, the information is transcribed from the medical record onto a paper requisition by office staff after the physician or NPP and the patient have concluded their interaction. In practice, we can see how requiring the physician or NPP to sign the paper requisition could, in some cases, be very inconvenient and disruptive to the physician, NPP, the beneficiary, and other patients. The physician or NPP may need to take time either during appointments with subsequent patients or between patient appointments to make sure that the requisition is signed for a particular patient prior to his/her departure from the office. In addition, a beneficiary might have to wait for a physician or NPP to complete the requisition signature process before the beneficiary could depart from the office.
        Another situation identified by industry stakeholders that we did not previously consider concerns physicians or NPPs who maintain several practice locations. A patient may see his or her physician or NPP only at one particular practice location. If that patient presents to the practice location with a medical issue that the physician or NPP believes warrants immediate laboratory testing, but the physician or NPP is physically at a different location that day, the physician or NPP may be able to direct his or her nursing staff to prepare a requisition for the laboratory test. But, if the physician or NPP must sign the requisition, there could be a delay of several days or longer, before the physician or NPP is able to do so, which means the patient would have to wait to have the laboratory test performed.
        The aforementioned scenarios have detrimental implications for expeditious patient care that were not evident to us until the new policy was effectuated and we started hearing from stakeholders in the industry that would be negatively impacted by the policy. In response to a comment suggesting that physicians be educated about this new requirement to alleviate problems of non-compliance, we stated, in the CY 2011 PFS final rule with comment period (75 FR 73482), that we would update our manuals and direct the Medicare contractors to educate physicians and NPPs on this policy. After publication of the CY 2011 PFS final rule with comment period, it became even clearer to us that some physicians, NPPs, and clinical diagnostic laboratories were not aware of, or did not understand, the policy. Therefore, in the first calendar quarter of 2011, we focused on developing educational and outreach materials to educate those affected by this policy. Further, we issued a statement that, once the first quarter of 2011 educational campaign is fully underway, we would expect requisitions to be signed. While developing educational and outreach materials, we realized how difficult and burdensome the actual implementation of this policy was for physicians and NPPs and that, in some cases, the implementation of this policy could have a negative impact on patient care. At that point, we decided that the better course of action was to re-examine the policy.

        We re-examined our policy and our reasons for adopting this policy in light of industry stakeholders' comments received after publication of the CY 2011 PFS final rule with comment period and comments received on the CY 2011 PFS proposed rule. We reviewed our beliefs and assumptions regarding the effect of our policy on access to care and with respect to administrative burden on physicians and NPPs, the effect on innovation, and the impact on laboratories. We believed that the policy would not have a negative impact on beneficiary access to care. However, we now believe that we underestimated the potential impact on beneficiary health and safety. As discussed previously, care may be delayed under this policy in situations where the physician or NPP orders the test but is not available onsite to sign the requisition. For example, we understand there are concerns that certain populations of patients, such as nursing home patients and patients confined to their homes, may have laboratory tests ordered urgently by a distant physician or NPP to obtain information that is imminently needed in order to assess a need for immediate referral to a hospital, emergency department or other facility. If the ordering physician or NPP is not onsite, it is unlikely that he or she would be able to receive, sign, and return a requisition in the timeframe needed to respond to the patient's urgent clinical status. We had not anticipated this impact on care when we finalized our policy.
        We also believed that the administrative burden on physicians and NPPs would be minimal and would result in a less confusing process. Physicians and NPPs must document their orders, in some form, in one or more of the medical records of the patient. We still believe that signing a laboratory requisition at the time of the order, if the requisition is ready for signature, imposes little burden on the physician or NPP, while significantly increasing our ability to minimize improper payments due to fraud and abuse. However, we believe we may have underestimated the number of occasions in which the physician or NPP cannot perform both steps concurrently. We now understand that it is not always the case that a physician or NPP can perform both steps concurrently. For instance, a physician may sign an order at the time of delivering care, but the requisition may not be available for signature until sometime later. In that situation, the physician may need to interrupt a subsequent examination in order to sign a completed requisition so that the patient may leave with the requisition. Given recently released estimates of physician shortfalls in primary care (as referenced in remarks by the Health Resources and Services Administration (HRSA) Administrator to the Bureau of Health Professions Advisory Committee on April 21, 2009), the cost of lost physician time must also be revalued upwards. Alternatively, the beneficiary may have to wait for the physician or NPP to conclude his/her subsequent appointment, which could be as long as 30 minutes or more. Neither of these situations—interrupting the physician or NPP in a subsequent appointment or making the beneficiary wait for an inconvenient period of time—is acceptable. Further, we believed that the policy resulted in a less confusing process because a physician or NPP signature would be required for all requisitions and orders, eliminating uncertainty over whether the documentation is a requisition or an order, whether the type of test being ordered requires a signature, or which payment system does nor does not require a physician or NPP signature. However, based on industry stakeholder comments subsequent to the publication of the CY 2011 PFS final rule with comment period, we now believe this process may not be less confusing. Further, industry stakeholders assured us that they had not been confused about the former physician signature policy and that they never intended for us to interpret their call for consistency in the signature process to mean that they should be burdened with an additional requirement when they were already signing the medical record.
        In addition, we believed that many stakeholders either had converted or were in the process of converting to an electronic health records process that would negate the need for a requisition. Electronic health records and electronic transmission of health information are key pieces of this Administration's economic recovery plan and, moreover, are key elements of our plan to improve healthcare quality and efficiency. From the additional stakeholder concerns subsequent to our CY 2011 PFS final rule with comment period, we are sensitive to the increasing migration of information transfer away from paper forms, such as requisitions, to the direct electronic submission of requests for services. After we adopted the new policy, stakeholders expressed their concerns that the requirement for a signature would increase paperwork, in direct opposition to our promotion of time-saving electronic communications. We believe that the requirement for a signature on the requisition does not impact stakeholders who utilize an electronic process for ordering clinical diagnostic laboratory tests because the policy only applies to requisitions, which are paper forms. Our intent was not to suggest that a requisition was necessary in those cases. However, we recognize that members of the provider and supplier community believe that this regulation could inhibit their use of innovative technology and investment in healthcare IT resources even after we explained the issue. Therefore, we underestimated the potential for paperwork burden.
        Finally, we believed that the policy would make it easier for a reference laboratory to know whether a test is appropriately requested and to minimize potential compliance problems. Specifically, we believe that the policy improves a laboratory's ability to authenticate requisitions. While we still believe this is true, based on industry stakeholder concerns received after the CY 2011 PFS final rule with comment period, which elaborated on comments submitted in response to the CY 2011 PFS proposed rule (75 FR 40161 through 40163), we now believe our estimate of the financial benefit of this aspect of the policy is less than we originally believed, because the percentage of laboratory requests actually covered by this policy may be smaller than we originally predicted and may continue to shrink as new technology is adopted. We also believed the policy provided a mechanism for laboratories to fulfill their responsibility to ensure that they only provide and bill for services on the direct order of a physician or NPP as the signature on the requisition would provide documentation and evidence that the physician or NPP had ordered the service. However, industry stakeholders expanded on comments to the CY 2011 PFS proposed rule and informed us that there was a cost to adopting a rigid mechanism of establishing authenticity. Laboratories believe that it is more efficient for them to use internal procedures and controls to ensure that they do not provide and bill for services in the absence of a physician authorization rather than through a Federal policy. We believe that the benefits expected may be lower than we originally estimated.
        In summary, there were many situations that we could not recognize as problematic until we finalized the new policy and stakeholders began to implement. Upon review of the concerns that industry stakeholders raised after we finalized our policy in the CY 2011 PFS final rule with comment period, and in reconsideration of comments to the CY 2011 PFS proposed rule, we propose to retract the policy that was finalized in the CY 2011 PFS final rule with comment period, which required a physician's or NPP's signature on a requisition for clinical diagnostic laboratory tests paid under the CLFS (75 FR 73483) and we propose to reinstate our prior policy that the signature of the physician or NPP is not required on a requisition for a clinical diagnostic laboratory test paid under the CLFS for Medicare purposes.

        We remain concerned about the costs and impact of fraud and abuse on the Medicare program. The requirement that the treating physician or NPP must document the ordering of the test remains, as does our longstanding policy that requires orders, including those for clinical diagnostic laboratory tests, to be signed by the ordering physician or NPP. We believe that all parties share in the responsibility of ensuring that Medicare services are provided only in accordance with all applicable statutes and regulations, such as the requirement for a physician or NPP order. In many instances, such as in the case of orders originating in hospitals, we believe that retaining all the other requirements previously discussed, especially requiring the physician or NPP who orders the service to maintain documentation of medical necessity in the beneficiary's medical record according to § 410.32(d)(2)(i), as well as the hospital CoPs on medical record services at § 482.24, are sufficient. However, we note that hospital CoPs do not apply to other settings, such as private offices.
        We believe that it is the responsibility of the clinical diagnostic laboratory, as it is for the provider of any service, to have sufficient processes and safeguards in place to ensure that all services are delivered only when ordered by the physician or NPP. This proposed rule does not preclude an individual laboratory from requiring a physician's or NPP's signature on the requisition. The laboratory may develop its own compliance procedures to ensure that it only furnishes services in response to a physician or NPP order. Such procedures could include internal audits, agreements with ordering physicians or NPPs to provide medical record evidence of the order in the event of an internal or external audit, steps to confirm the existence of an order under certain circumstances, or any other measures including the acceptance of risk by the clinical laboratory. We believe that this financial and compliance responsibility was implicit in the 2001 final rule (66 FR 58788), was reiterated in the March 5, 2002 transmittal (Change Request 2410, Transmittal AB-02-030), and has remained a consistent element of the subsequent instructions.
        III. Collection of Information Requirements
        This document does not impose information collection and recordkeeping requirements. Consequently, it need not be reviewed by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995.
        IV. Response to Comments

        Because of the large number of public comments we normally receive on Federal Register documents, 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, when we proceed with a subsequent document, we will respond to the comments in the preamble to that document.
        V. Regulatory Impact Statement
        We have examined the impact of this proposed rule as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 1999) and the Congressional Review Act (5 U.S.C. 804(2)).
        Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any 1 year) or that adversely affect, in a material way, the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal government or communities. There are no expenditures or fiscal impact on the Medicare program associated with the policy discussed in this proposed rule. While the policy that is proposed for reinstatement in this proposed rule may have an effect on beneficiaries, we believe that any effect would be positive as we are changing a requirement that might have impeded access to care in some cases. There are no proposed policies in this proposed rule that impact payment rates under the clinical laboratory fee schedule, or any other part of the Medicare program. Therefore, for the change in policy regarding the physician's or NPP's signature on requisitions for clinical diagnostic laboratory tests paid under the CLFS, this proposed rule does not reach the economic threshold and thus is not considered a major rule.
        The RFA requires agencies to analyze options for regulatory relief of small entities, if a rule has a significant impact on a substantial number of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Many hospitals and many other providers and suppliers are small entities, either by nonprofit status or by meeting the Small Business Administration (SBA) definition of a small business. Individuals and States are not included in the definition of a small entity. We are not preparing an analysis for the RFA because the Secretary has determined that this proposed rule, if finalized, would not have a significant economic impact on a substantial number of small entities.
        In addition, section 1102(b) of the Social Security Act (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. This analysis must conform to the provisions of section 603 of the RFA. With the exception of hospitals located in certain New England counties, for purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of an urban area and has fewer than 100 beds. Section 601(g) of the Social Security Amendments of 1983 (Pub. L. 98-21) designated hospitals in certain New England counties as belonging to the adjacent urban areas. Thus, for our purposes, we continue to classify these hospitals as urban hospitals. We are not preparing an analysis for section 1102(b) of the Act because the Secretary has determined that this proposed rule, if finalized, would not have a significant impact on the operations of a substantial number of small rural hospitals.
        Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2011, that threshold is approximately $136 million. This proposed rule, if finalized, would have no consequential effect on State, local, or tribal governments or the private sector.

        Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. Since this proposed regulation does not impose any costs on State or local governments, the requirements of Executive Order 13132 are not applicable.
        In accordance with the provisions of Executive Order 12866, this proposed rule was not reviewed by the Office of Management and Budget.

          (Catalog of Federal Domestic Assistance Program No. 93.773, Medicare—Hospital Insurance; and Program No. 93.774, Medicare—Supplemental Medical Insurance Program)

          Dated: June 2, 2011.
          Donald M. Berwick,
          Administrator, Centers for Medicare & Medicaid Services.
          Approved: June 24, 2011.
          Kathleen Sebelius,
          Secretary, Department of Health and Human Services.

      [FR Doc. 2011-16366 Filed 6-29-11; 8:45 am]
      BILLING CODE 4120-01-P