Proposed Rule2021-12545
Proposed Rescission of Executive Order 13937, “Executive Order on Access to Affordable Life-Saving Medications”
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Published
June 16, 2021
Issuing agencies
Health and Human Services Department
Abstract
The Department of Health and Human Services (HHS) proposes to rescind the final rule entitled "Implementation of Executive Order on Access to Affordable Life-Saving Medications," published in the December 23, 2020, Federal Register. HHS is proposing the rescission due to undue administrative costs and burdens that implementation would impose on health centers. In particular, the final rule would require health centers to create and sustain new practices necessary to determine patients' eligibility to receive certain drugs at or below the discounted price paid by the health center or subgrantees under the 340B Program, resulting in reduced resources available to support critical services to their patients--including those who use insulin and injectable epinephrine. These challenges would be significantly exacerbated by the multitude of demands on health centers related to the COVID-19 pandemic. HHS is seeking public comment on this notice of proposed rulemaking (NPRM). As Executive Order 13937 remains in effect, should the final rule be rescinded, other implementation approaches will be considered to effectuate the Executive Order.
Full Text
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<title>Federal Register, Volume 86 Issue 114 (Wednesday, June 16, 2021)</title>
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[Federal Register Volume 86, Number 114 (Wednesday, June 16, 2021)]
[Proposed Rules]
[Pages 32008-32011]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-12545]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
42 CFR Part 51c
RIN 0906-AB25
Proposed Rescission of Executive Order 13937, ``Executive Order
on Access to Affordable Life-Saving Medications''
AGENCY: Health Resources and Services Administration (HRSA), Department
of Health and Human Services (HHS).
ACTION: Proposed rule.
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SUMMARY: The Department of Health and Human Services (HHS) proposes to
rescind the final rule entitled ``Implementation of Executive Order on
Access to Affordable Life-Saving Medications,'' published in the
December 23, 2020, Federal Register. HHS is proposing the rescission
due to undue administrative costs and burdens that implementation would
impose on health centers. In particular, the final rule would require
health centers to create and sustain new practices necessary to
determine patients' eligibility to receive certain drugs at or below
the discounted price paid by the health center or subgrantees under the
340B Program, resulting in reduced resources available to support
critical services to their patients--including those who use insulin
and injectable epinephrine. These challenges would be significantly
exacerbated by the multitude of demands on health centers related to
the COVID-19 pandemic. HHS is seeking public comment on this notice of
proposed rulemaking (NPRM). As Executive Order 13937 remains in effect,
should the final rule be rescinded, other implementation approaches
will be considered to effectuate the Executive Order.
DATES: Written comments and related material to this proposed rule must
be received to the online docket via <a href="https://www.regulations.gov">https://www.regulations.gov</a> on or
before July 16, 2021.
ADDRESSES: Comments must be identified by HHS Docket No. HRSA-2021-0003
and submitted electronically to the Federal eRulemaking Portal at
<a href="https://www.regulations.gov">https://www.regulations.gov</a>. Follow the instructions for submitting
comments. Comments and attachments will be posted to the docket
unchanged. Because your comments will be made public, you are solely
responsible for ensuring that your comments do not include any
confidential information that you or a third party may not wish to be
posted, such as medical information, your or anyone else's Social
Security number, or confidential business information. Additionally, if
you include your name, contact information, or other information that
identifies you in the body of your comments, that information will be
posted.
FOR FURTHER INFORMATION CONTACT: Jennifer Joseph, Director, Office of
Policy and Program Development, Bureau of Primary Health Care, Health
Resources and Services Administration, 5600 Fishers Lane, Rockville,
Maryland 20857; email: <a href="/cdn-cgi/l/email-protection#a0cacacfd3c5d0c8e0c8d2d3c18ec7cfd6"><span class="__cf_email__" data-cfemail="583232372b3d283018302a2b39763f372e">[email protected]</span></a>; telephone: 301-594-4300; fax:
301-594-4997.
SUPPLEMENTARY INFORMATION:
I. Background
HHS published a notice of proposed rulemaking (NPRM) in the Federal
Register on September 28, 2020 (85 FR 60748), and a final rule on
December 23, 2020 (85 FR 83822) entitled, ``Implementation of Executive
Order on Access to Affordable Life-Saving Medications.'' This rule
established a new requirement directing all health centers receiving
grants under section 330(e) of the Public Health Service (PHS) Act (42
U.S.C. 254b(e)) that participate in the 340B Program (42 U.S.C. 256b),
to the extent that they plan to make insulin and/or injectable
epinephrine available to their patients, to provide assurances that
they have established practices to provide these drugs at or below the
discounted price paid by the health center or subgrantees under the
340B Program (plus a minimal administration fee) to health center
patients with low incomes, as determined by the Secretary, who have a
high cost sharing requirement for either insulin or injectable
epinephrine; have a high unmet deductible; or who have no health
insurance.
Pursuant to the January 20, 2021, memorandum from the Assistant to
the President and Chief of Staff, entitled ``Regulatory Freeze Pending
Review,'' and OMB Memorandum M-21-14, the effective date of the
``Implementation of Executive Order on Access to Affordable Life-Saving
Medications'' rule, published in the December 23, 2020, Federal
Register (85 FR 83822), was delayed from January 22, 2021, to March 22,
2021 (86 FR 7069), to give HHS officials the opportunity for further
review and consideration of the rule.
On March 11, 2021 (86 FR 13872), HHS published a proposed rule to
further delay the effective date of the ``Implementation of Executive
Order on Access to Affordable Life-Saving Medications'' rule. On March
22, 2021, the effective date of the
[[Page 32009]]
``Implementation of Executive Order on Access to Affordable Life-Saving
Medications'' rule was delayed to July 20, 2021 (86 FR 15423), to allow
HHS an additional opportunity to review and consider further questions
of fact, law, and policy that may be raised by the rule, including
whether revision or withdrawal of the rule may be warranted.
After a careful reassessment of the comments submitted in response
to the proposed rule published at 85 FR 60748 (September 28, 2020) and
consideration of the comments received on the proposed rule published
at 86 FR 13872 (March 11, 2021), HHS is proposing in this NRPM to
rescind the ``Implementation of Executive Order on Access to Affordable
Life-Saving Medications'' rule. As set forth more specifically below,
HHS has significant concerns regarding health centers needing to divert
vital resources to implement this rule, as the administrative burden
and cost necessary to comply with the rule and thus maintain
eligibility for future grants has the potential to constrain health
centers' ability to provide ongoing primary care services to medically
underserved and vulnerable populations. HHS has reconsidered previously
submitted comments regarding the administrative burdens associated with
the rule in light of the significantly increased, long-term reliance on
health centers in responding to the COVID-19 pandemic, particularly
related to health centers' role in addressing health equity and vaccine
delivery for hard-to-reach and disproportionately affected populations
that were not readily apparent at the time the rule was finalized in
December 2020. Moreover, this rule will result in a loss of revenue
from 340B savings for health centers participating in the 340B Program
and this loss, along with increased administrative costs and
administrative burden, will result in reduced resources being available
to support services to health center patients. In addition, most
commenters noted that, in many cases, these health centers already
provide medications at reduced prices to their patients.
HHS has considered comments submitted by commenters prior to the
final rule's promulgation and in response to the proposed rule
published at 86 FR 13872 (March 11, 2021) in the development of this
NPRM and will consider new comments submitted in response to this NPRM.
II. Statutory Authority
The statement of authority for 42 CFR part 51c continues to read
section 330 of the Public Health Service Act (``PHS Act'' or ``the
Act'') (42 U.S.C. 254b) and section 215 of the PHS Act, (42 U.S.C.
216).
III. Discussion of Proposed Rule
HHS is proposing to rescind the ``Implementation of Executive Order
on Access to Affordable Life-Saving Medications'' rule. As the final
rule has not become effective, this NPRM proposes that the existing
regulation remain unchanged. In particular, this NPRM proposes to
rescind the final rule and retract the related requirement for awarding
new grants under section 330(e) of the PHS Act (42 U.S.C. 254b) that
the awardee offering insulin and injectable epinephrine to its patients
have established written practices to make insulin and injectable
epinephrine available at or below the discounted price paid by the
health center grantee or subgrantee under the 340B Program (plus a
minimal administration fee) to health center patients with low incomes
who: (a) Have a high cost sharing requirement for either insulin or
injectable epinephrine, (b) have a high unmet deductible, or (c) have
no health insurance.
This NPRM proposes to rescind the rule that amended 42 CFR 51c.303,
by deleting paragraph (w). This NPRM also proposes that the Program
Term established by the ``Implementation of Executive Order on Access
to Affordable Life-Saving Medications'' rule not be included on any
Notices of Award issued to health centers receiving grant funds under
section 330(e) of the Act.
HHS is proposing to rescind this rule because, although certain
health center patients might benefit from it, the additional costs and
burden the rule would place on health centers could harm the program
and the patients it serves as a whole. Allowing this final rule to
become effective would increase the burden on health centers and divert
necessary resources from patient care to the administration of new
processes. In order to implement this new requirement, health centers
would need to absorb significant additional cost, time, and ongoing
support staff to create and maintain new reporting, monitoring,
technical and administrative re-engineering, staff training, and
workflow re-designs to assess eligibility for patients to receive
insulin and injectable epinephrine consistent with the final rule.
Other more specific administrative burdens and costs imposed by the
final rule that were shared by commenters included the need for health
center staff to track patients' eligibility for the pricing described
in the rule as it relates to: (1) Whether patients are receiving
insulin or injectable epinephrine through a 340B pharmacy, (2) whether
patients' incomes meet the threshold in the rule (which is different
from that used for the Health Center Program sliding fee discount
schedule and therefore has to be calculated separately), and (3)
whether patients have a high unmet deductible each time they fill their
prescriptions--which may be further complicated due to the delay in
medical billing and claims processing--or whether they have a high
deductible or high cost-sharing requirement as part of their insurance
plan. These burdens would also extend to ensuring that all relevant
information is transmitted to contract pharmacies. HHS has concerns
that under the final rule, health centers and pharmacies with whom they
contract may find it challenging to ascertain a patient's eligibility
for pricing under this rule based on whether or not that patient
continues to have a high unmet deductible in real time, particularly
due to delays in medical billing and claims processing.
HHS is also concerned that the final rule creates a new required
definition, applicable only to these two classes of drugs, of
``individuals with low income,'' to include those individuals with
incomes at or below 350 percent of the amount identified in the Federal
Poverty Guidelines (FPG). This new required definition is in contrast
with the Health Center Program's required use of a sliding fee discount
schedule standard for Health Center Program grantees applicable to
individuals with incomes at or below 200 percent of the FPG, pursuant
to 42 CFR 51c.303(f). Health centers must currently establish a sliding
fee discount schedule for services provided to patients with incomes
between 100 and 200 percent of the FPG, with a full discount to
individuals and families with annual incomes at or below 100 percent of
those set forth in the FPG. Health centers also may collect nominal
fees for services from individuals and families at or below 100 percent
of the FPG, and no sliding fee discount may be provided to individuals
and families with annual incomes greater than 200 percent of the FPG.
Health centers must also demonstrate to HHS that they maintain and
apply such sliding fee discount schedules to the provision of health
services, which requires them to establish and maintain processes for
identifying patient income levels for billing purposes consistent with
these requirements. Therefore, given the differences between these
standards,
[[Page 32010]]
HHS agrees with the concerns expressed by a substantial majority of
commenters that describing ``low income'' as 350 percent of FPG for the
purpose of the rule would require the establishment of a new, distinct,
and higher ``low income'' threshold applicable to these two classes of
drugs, and that applying this distinct standard for purposes of billing
for these drugs would create significant administrative challenges for
health centers. HHS shares commenters' concerns regarding the undue
administrative burden and costs of the rule and the resulting diversion
of resources from needed patient care, especially during the COVID-19
pandemic, in order to cover such increased administrative costs.
HHS also shares commenters' concerns that defining ``individuals
with low incomes'' at 350 percent of FPG imposes the additional burden
and cost of creating and operating two different eligibility systems.
This definition of ``low income'' is inconsistent with standards
applied in other comparable federal programs. Commenters noted that
every federal program with an income eligibility threshold defines
``low income'' as 250 percent of the FPG or less. Commenters further
noted that, while the Patient Protection and Affordable Care Act uses a
ceiling of 400 percent of the FPG to identify those eligible for
premium tax credits on the Exchanges, this is not a definition of ``low
income,'' as premium tax credits are designed for both lower and middle
income individuals. 26 U.S.C. 36B(b)(3)(A)(i).
Finally, commenters expressed concerns that the rule was based on a
fundamental misunderstanding of the 340B Program since health centers
are already required by the Health Center Program to use any savings to
benefit their patient population (42 U.S.C. 254b(e)(5)(D)). HHS shares
their concerns that this rule will result in a loss of 340B revenue for
health centers participating in the 340B Program, and that this loss,
along with increased administrative costs and administrative burden,
will result in reduced resources available to support critical services
to health center patients, including those who use insulin or
injectable epinephrine and who receive other services from health
centers. HHS is undertaking this unusual step of issuing this NPRM to
understand more about these concerns and to propose a potential
rescission of this rule.
HHS invites comment on this NPRM proposing to rescind the final
rule ``Implementation of Executive Order on Access to Affordable Life-
Saving Medications.''
IV. Regulatory Impact Analysis (RIA)
HHS has examined the effects of this NPRM as required by Executive
Order 12866 on Regulatory Planning and Review (September 30, 1993),
Executive Order 13563 on Improving Regulation and Regulatory Review
(January 8, 2011), the Regulatory Flexibility Act (Pub. L. 96-354,
September 19, 1980), the Unfunded Mandates Reform Act of 1995 (Pub. L.
104-4), and Executive Order 13132 on Federalism (August 4, 1999).
Executive Orders 12866 and 13563
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 is supplemental to and reaffirms the principles,
structures, and definitions governing regulatory review as established
in Executive Order 12866, emphasizing the importance of quantifying
both costs and benefits, of reducing costs, of harmonizing rules, and
of promoting flexibility. Section 3(f) of Executive Order 12866 defines
a ``significant regulatory action'' as an action that is likely to
result in a rule: (1) Having an annual effect on the economy of $100
million or more in any 1 year, or adversely and materially affecting a
sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, or Tribal
governments or communities (also referred to as ``economically
significant''); (2) creating a serious inconsistency or otherwise
interfering with an action taken or planned by another agency; (3)
materially altering the budgetary impacts of entitlement grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or (4) raising novel legal or policy issues arising out of
legal mandates, the President's priorities, or the principles set forth
in the Executive Order. A regulatory impact analysis (RIA) must be
prepared for major rules with economically significant effects ($100
million or more in any 1 year), and a ``significant'' regulatory action
is subject to review by the Office of Management and Budget (OMB). HRSA
estimates that, on average, each health center would need one
additional full-time equivalent (FTE) eligibility assistance worker at
approximately $50,000 to support necessary additional administrative
processes, totaling approximately $68,750,000 across health centers.
As stated in the RIA for the final rule published December 23,
2020, HRSA determined that the rule is not economically significant,
given that the administrative burden of $68.7 million described above
falls below the ``economically significant'' threshold of $100 million.
HRSA relies on that same analysis now, finding that rescission of that
rule will have an economic impact of the same amount, $68,750,000, in
administrative savings to health centers, and that such amount is below
the ``economically significant'' threshold of $100 million. Also, as
stated in the December 23, 2020 final rule, a number of patients served
at health centers and covered by that final rule may already receive
these two medications at reduced prices, further reducing the economic
significance of this proposed rescission. In order to determine whether
the proposed rescission of the rule is a ``significant regulatory
action'' under Section 3(f) of Executive Order 12866, HHS welcomes
comments concerning the economic impact of this proposed rescission of
the ``Implementation of Executive Order on Access to Affordable Life-
Saving Medications'' rule or implementation of the proposed rescission
on the economy, productivity, competition, jobs, the environment,
public health or safety, or state, local, or tribal governments or
communities.
The Regulatory Flexibility Act (RFA)
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) and the
Small Business Regulatory Enforcement and Fairness Act of 1996, which
amended the RFA, require HHS to analyze options for regulatory relief
of small businesses. If a rule has a significant economic effect on a
substantial number of small entities, the Secretary must specifically
consider the economic effect of the rule on small entities and analyze
regulatory options that could lessen the impact of the rule. As we did
in the ``Implementation of Executive Order on Access to Affordable
Life-Saving Medications'' final rule, HHS will use an RFA threshold of
at least a 3 percent impact on at least 5 percent of small entities.
For purposes of the RFA, HHS considers all health care providers to
be small entities either by meeting the Small Business Administration
(SBA) size standard for a small business, or by being a nonprofit
organization that is not dominant in its market. The current SBA size
standard for health care providers ranges from annual receipts of
[[Page 32011]]
$8 million to $41.5 million. As of August 8, 2020, the Health Center
Program provides grant funding under section 330(e) of the PHS Act to
1,310 organizations to provide health care to medically underserved
communities. HHS has determined, and the Secretary certifies, that this
NPRM would not have a significant impact on the operations of a
substantial number of small health centers; therefore, we are not
preparing an analysis of impact for purposes of the RFA. HHS estimates
the economic impact on small entities as a result of rescinding the
``Implementation of Executive Order on Access to Affordable Life-Saving
Medications'' final rule would be minimal. HHS welcomes comments
concerning the economic impact of this NPRM on health centers.
Unfunded Mandates Reform Act
Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires
that agencies prepare a written statement, which includes an assessment
of anticipated costs and benefits, before proposing ``any rule that
includes any Federal mandate that may result in the 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 one year.'' In 2019, that threshold level was
approximately $164 million. HHS does not expect this NPRM to exceed the
threshold.
Executive Order 13132--Federalism
HHS has reviewed this NPRM in accordance with Executive Order 13132
regarding federalism, and has determined that it does not have
``federalism implications.'' This NPRM would not ``have substantial
direct effects on the States, or on the relationship between the
national government and the States, or on the distribution of power and
responsibilities among the various levels of government.'' This NPRM
would not adversely affect the following family elements: Family
safety, family stability, marital commitment; parental rights in the
education, nurture, and supervision of their children; family
functioning, disposable income or poverty; or the behavior and personal
responsibility of youth, as determined under section 654(c) of the
Treasury and General Government Appropriations Act of 1999.
Paperwork Reduction Act of 1995
The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires
that OMB approve all collections of information by a federal agency
from the public before they can be implemented. This NPRM is projected
to have no impact on current reporting and recordkeeping burden for
health centers. This NPRM would result in no new reporting burdens.
Comments are welcome on the accuracy of this statement.
List of Subjects in 42 CFR Part 51c
Grant programs--Health, Health care, Health facilities, Reporting
and recordkeeping requirements.
Dated: June 10, 2021.
Xavier Becerra,
Secretary, Department of Health and Human Services.
Accordingly, by the authority vested in me as the Secretary of
Health and Human Services, and for the reasons set forth in the
preamble, 42 Code of Federal Regulations Part 51c is amended as
follows:
PART 51c--GRANTS FOR COMMUNITY HEALTH CENTERS
0
1. The authority citation for part 51c is revised to read as follows:
Authority: Sec. 330, Public Health Service Act, 89 Stat. 342,
(42 U.S.C. 254b); sec. 215, Public Health Service Act, 58 Stat. 690,
(42 U.S.C. 216).
Sec. 51c.303 [Amended]
0
2. Amend Sec. 51c.303 by removing paragraph (w).
[FR Doc. 2021-12545 Filed 6-15-21; 8:45 am]
BILLING CODE 4165-15-P
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