[Federal Register Volume 75, Number 110 (Wednesday, June 9, 2010)]
[Rules and Regulations]
[Pages 32668-32670]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-13872]
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DEPARTMENT OF VETERANS AFFAIRS
38 CFR Part 17
RIN 2900-AN50
Copayments for Medications
AGENCY: Department of Veterans Affairs.
ACTION: Final rule.
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SUMMARY: This document affirms as final an interim final rule that
froze through June 30, 2010, the copayment required by Department of
Veterans Affairs (VA) regulations for certain outpatient medications.
Under those regulations, the copayment amount must be increased based
on the prescription drug component of the Medical Consumer Price Index
(CPI-P), and the maximum annual copayment amount must be increased when
the copayment is increased.
DATES: This final rule is effective June 9, 2010.
FOR FURTHER INFORMATION CONTACT: Roscoe Butler, Acting Director,
Business Policy, Chief Business Office, 810 Vermont Avenue, Washington,
DC 20420, 202-461-1586. (This is not a toll-free number.)
SUPPLEMENTARY INFORMATION: Under 38 U.S.C. 1722A(a), VA must require
veterans to pay a $2 copayment for each 30-day supply of medication
furnished on an outpatient basis for the treatment of a nonservice-
connected disability or condition. Under 38 U.S.C. 1722A(b), VA
``may,'' by regulation, increase that copayment and establish a maximum
annual copayment (a ``cap''). We have interpreted section 1722A(b) to
mean that VA has discretion to determine the appropriate copayment
amount and annual cap amount for medication
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furnished on an outpatient basis for covered treatment, provided that
any decision by VA to increase the copayment amount or annual cap
amount is the subject of a rulemaking proceeding. We have implemented
this statute in 38 CFR 17.110.
Under current 38 CFR 17.110(b)(1), veterans are ``obligated to pay
VA a copayment for each 30-day or less supply of medication provided by
VA on an outpatient basis (other than medication administered during
treatment).'' The regulation includes an escalator provision for the
copayment amount. Since 2001, the regulation has stated that the
copayment amount for each calendar year is established using the CPI-P
as follows: The Index as of the previous September 30 will be divided
by the Index as of September 30, 2001. The ratio so obtained will be
multiplied by the original copayment amount of $7. The new copayment
amount will be this result, rounded down to the whole dollar amount.
In a notice announcing an interim final, rule published on December
31, 2009, we stated that we had concerns about an imminent increase in
copayments under the methodology in current 38 CFR 17.110(b). 74 FR
69283. We notified the public of our need for ``time to determine
whether an increase [in copayments] might pose a significant financial
hardship for certain veterans and if so, what alternative approach
would provide appropriate relief for these veterans.'' On that basis,
we ``froze'' copayments at $8 for the period January 1, 2010, through
June 30, 2010. We concluded that the copayment freeze would give us
time to analyze the current methodology and determine whether it might
cause a significant financial hardship for veterans. We also provided
notice that based upon VA analysis of copayments, ``the Secretary may
initiate new rulemaking [regarding the methodology for increasing
copayments] rather than continue to rely on the CPI-P escalator
provision.'' Thus, as we stated in the notice announcing the interim
final rule, the intended effect of this rulemaking was ``to temporarily
freeze copayments and the copayment cap, following which copayments and
the copayment cap would increase as prescribed in Sec. 17.110(b).''
We received 5 comments on the interim final rule. None of the
comments opposed freezing copayments from January 1 to June 30, 2010.
Some commenters indicated that VA should not allow the escalator
clause to become effective again at the end of the 6-month period for a
variety of reasons related to VA's authority to charge and increase
copayments and its current methodology for determining copayment
amounts. However, VA's intent regarding the interim final rule was only
to delay the effect of the escalator clause that would otherwise have
required an increase from $8 to $9 on January 1, 2010, while VA further
considered its copayment policy. The interim final rule did not alter
the current methodology for increasing copayments, and did not affect
any period beyond June 30, 2010. To the extent that the commenters
suggest an extension of the freeze in copayments, we will initiate a
separate rulemaking that addresses copayments after June 30, 2010. We
encourage commenters to carefully review the substance of the new
rulemaking and provide us their comments.
Several commenters opined that VA should not increase copayments at
all. Some reasons suggested were the current state of the economy and
because, the commenters assert, the same medications can be obtained
for a lower price from commercial vendors. One commenter suggested that
the copayment amount should ``regress to the earlier, base, [sic]
amount of $7.00.'' Another suggested that our prices are higher than
the actual cost of the drugs. All of these comments concern bases for
the methodology used by VA to calculate copayment amounts, which was
not the subject of the interim final rule. The rule merely delayed
application of the methodology while VA considers the merits of its
copayment policy.
Regarding comments related to VA's copayment rate versus commercial
vendors, as we indicated in the December 31, 2009, rulemaking notice,
we are in the process of examining this matter. See 74 FR 69283. We
cannot adequately respond to the substance of these comments until we
have had sufficient time to complete our review and decide on a
possible alternative methodology for computing the copayment amount.
When our review is complete, if we determine that a new methodology is
appropriate, we intend to publish a notice of proposed rulemaking,
consider public comments, and implement a final rule before the
expiration of any freeze in copayments. We appreciate the commenters'
interest in this critical issue and encourage them to submit specific
comments addressing the provisions of any proposed rule that would
revise VA's copayment policy.
Another commenter suggested that after June 30, 2010, we use the
current methodology to increase the copayment amount only for veterans
with nonservice-connected disabilities who are in priority category 8.
Again, the purpose of the interim final rule was to avoid an imminent
increase in copayments while VA considers its copayment policy--it did
not change the existing methodology for increasing copayments, and
merely provided for a return to that methodology after June 30, 2010.
However, we will use the comment to inform our decision in the separate
rulemaking noted above that addresses copayments after June 30, 2010.
Because none of the comments that we received opposed the 6-month
freeze prescribed by the interim final rule on December 31, 2009, we
are affirming the interim final rule without change.
Unfunded Mandates
The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C.
1532, that agencies prepare an assessment of anticipated costs and
benefits before issuing any rule that may result in an expenditure by
State, local, and tribal governments, in the aggregate, or by the
private sector, of $100 million or more (adjusted annually for
inflation) in any given year. This final rule would have no such effect
on State, local, and tribal governments, or on the private sector.
Paperwork Reduction Act
This document contains no provisions constituting a collection of
information under the Paperwork Reduction Act (44 U.S.C. 3501-3521).
Executive Order 12866
Executive Order 12866 directs agencies to assess all costs and
benefits of available regulatory alternatives and, when regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety,
and other advantages; distributive impacts; and equity). The Executive
Order classifies a regulatory action as a ``significant regulatory
action,'' requiring review by the Office of Management and Budget (OMB)
unless OMB waives such review, if it is a regulatory action that is
likely to result in a rule that may: (1) Have an annual effect on the
economy of $100 million or more or 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
governments or communities; (2) create a serious inconsistency or
otherwise interfere with an action taken or planned by another agency;
(3) materially alter the budgetary impact of entitlements, grants, user
fees, or loan programs or the rights and obligations of
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recipients thereof; or (4) raise novel legal or policy issues arising
out of legal mandates, the President's priorities, or the principles
set forth in the Executive Order.
VA has examined the economic, interagency, budgetary, legal, and
policy implications of this rule and has concluded that it does
constitute a significant regulatory action under the Executive Order.
Regulatory Flexibility Act
The Secretary hereby certifies that this rule will not have a
significant economic impact on a substantial number of small entities
as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-
612. This rule freezes for 6 months the copayments that certain
veterans are required to pay for prescription drugs furnished by VA.
The rule affects individuals and has no impact on any small entities.
Therefore, pursuant to 5 U.S.C. 605(b), this rule is exempt from the
initial and final regulatory flexibility analysis requirements of
sections 603 and 604.
Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance program number and title
for this rule are as follows: 64.005, Grants to States for Construction
of State Home Facilities; 64.007, Blind Rehabilitation Centers; 64.008,
Veterans Domiciliary Care; 64.009, Veterans Medical Care Benefits;
64.010, Veterans Nursing Home Care; 64.011, Veterans Dental Care;
64.012, Veterans Prescription Service; 64.013, Veterans Prosthetic
Appliances; 64.014, Veterans State Domiciliary Care; 64.015, Veterans
State Nursing Home Care; 64.016, Veterans State Hospital Care; 64.018,
Sharing Specialized Medical Resources; 64.019, Veterans Rehabilitation
Alcohol and Drug Dependence; 64.022, Veterans Home Based Primary Care;
and 64.024, VA Homeless Providers Grant and Per Diem Program.
Signing Authority
The Secretary of Veterans Affairs, or designee, approved this
document and authorized the undersigned to sign and submit the document
to the Office of the Federal Register for publication electronically as
an official document of the Department of Veterans Affairs. John R.
Gingrich, Chief of Staff, approved this document on March 12, 2010, for
publication.
List of Subjects in 38 CFR Part 17
Administrative practice and procedure, Alcohol abuse, Alcoholism,
Claims, Day care, Dental health, Drug abuse, Foreign relations,
Government contracts, Grant programs--health, Grant programs--Veterans,
Health care, Health facilities, Health professions, Health records,
Homeless, Medical and dental schools, Medical devices, Medical
research, Mental health programs, Nursing homes, Philippines, Reporting
and recordkeeping requirements, Scholarships and fellowships, Travel
and transportation expenses, Veterans.
Dated: June 3, 2010.
William F. Russo,
Director of Regulations Management, Office of the General Counsel.
PART 17--MEDICAL
0
Accordingly, the interim final rule amending 38 CFR 17.110, which was
published at 74 FR 69283 on December 31, 2009, is adopted as a final
rule without change.
[FR Doc. 2010-13872 Filed 6-8-10; 8:45 am]
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