Rule2021-21457
Implementation of Executive Order on Access to Affordable Life-Saving Medications; Rescission of Regulation
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
October 1, 2021
Effective
November 1, 2021
Issuing agencies
Health and Human Services Department
Abstract
HHS is rescinding the final rule entitled "Implementation of Executive Order on Access to Affordable Life-Saving Medications," published in the December 23, 2020, Federal Register (2020 Rule). HHS is rescinding the 2020 Rule due to the excessive administrative costs and burdens that implementation would have imposed on health centers. In particular, the 2020 Rule required health centers to create and maintain new practices necessary to determine patients' eligibility to receive certain drugs at or below the discounted price paid by the health center or subgrantees plus a minimal administration fee. HHS finds the 2020 Rule's implementation would have resulted in reduced resources available to support critical services to health center patients--including those who use insulin and injectable epinephrine. HHS's consideration of the 2020 Rule's impact was informed, in part, by the demands on health centers resulting from the COVID-19 pandemic. As Executive Order 13937 remains in effect, HHS is exploring non- regulatory options to implement the Executive Order.
Full Text
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<title>Federal Register, Volume 86 Issue 188 (Friday, October 1, 2021)</title>
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[Federal Register Volume 86, Number 188 (Friday, October 1, 2021)]
[Rules and Regulations]
[Pages 54390-54396]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-21457]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
42 CFR Part 51c
RIN 0906-AB30
Implementation of Executive Order on Access to Affordable Life-
Saving Medications; Rescission of Regulation
AGENCY: Health Resources and Services Administration (HRSA), Department
of Health and Human Services (HHS).
ACTION: Final rule; rescission of regulations.
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SUMMARY: HHS is rescinding the final rule entitled ``Implementation of
Executive Order on Access to Affordable Life-Saving Medications,''
published in the December 23, 2020, Federal Register (2020 Rule). HHS
is rescinding the 2020 Rule due to the excessive administrative costs
and burdens that implementation would have imposed on health centers.
In particular, the 2020 Rule required health centers to create and
maintain new practices necessary to determine patients' eligibility to
receive certain drugs at or below the discounted price paid by the
health center or subgrantees plus a minimal administration fee. HHS
finds the 2020 Rule's implementation would have resulted in reduced
resources available to support critical services to health center
patients--including those who use insulin and injectable epinephrine.
HHS's consideration of the 2020 Rule's impact was informed, in part, by
the demands on health centers resulting from the COVID-19 pandemic. As
Executive Order 13937 remains in effect, HHS is exploring non-
regulatory options to implement the Executive Order.
DATES: This rule is effective November 1, 2021.
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#9bf1f1f4e8feebf3dbf3e9e8fab5fcf4ed"><span class="__cf_email__" data-cfemail="395353564a5c495179514b4a58175e564f">[email protected]</span></a>; telephone: 301-594-4300; fax:
301-594-4997.
SUPPLEMENTARY INFORMATION:
I. Public Participation
On June 16, 2021, HHS published a Notice of Proposed Rulemaking
(2021 NPRM) in the Federal Register (86 FR 32008) to rescind the
``Implementation of Executive Order on Access to Affordable Life-Saving
Medications'' rule. The 2021 NPRM provided for a 30-day comment period,
and HHS received 332 comments. HHS carefully considered all comments in
developing this rule, as outlined in Section VI below, and presents a
summary of all significant comments and HHS responses.
II. Background
HHS published the subject NPRM in the Federal Register on September
28, 2020 (85 FR 60748), and the 2020 Rule on December 23, 2020 (85 FR
83822). The 2020 Rule established a new requirement directing all
health centers receiving grants under section 330(e) of the Public
Health Service 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.
On June 16, 2021, 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 to delay the effective date published at 86 FR 13872
(March 11, 2021), HHS published the 2021 NPRM to rescind the 2020 Rule.
The 2021 NPRM cited significant concerns regarding health centers
needing to divert vital resources to implement the 2020 Rule. The 2021
NPRM requested comment on the administrative burden and costs to comply
with the 2020 Rule and thus maintain eligibility for future Health
Center Program grants. The 2021 NPRM also requested comment on whether
a rescission would assist health centers in continuing to provide
primary care services to medically underserved and vulnerable
populations. HHS noted the administrative burdens associated with the
2020 Rule, particularly in light of health centers' continuing role in
ensuring equitable access to COVID-19 vaccination and maintaining the
capacity to provide primary and preventive care that addresses the
ongoing and evolving needs of hard-to-reach and disproportionately
affected populations. HHS also noted that the 2020 Rule would carry
increased administrative costs and administrative burden and would
result in reduced resources being available to support services to
health center patients. In addition, most comments submitted previously
noted that, in many cases, health centers already voluntarily provided
medications at reduced prices to their patients.
The 2021 NPRM comment period ended on July 16, 2021. After review
and consideration of all submitted comments, HHS has concluded that the
2020 Rule created excessive administrative burden for health centers,
which in turn would have resulted in reduced resources for health
center patient services. HHS has determined that the overall impacts of
the administrative burden outweigh benefits to patients from the
reduction in prices of insulin and injectable epinephrine. Therefore,
HHS is issuing this final rule rescinding the 2020 Rule, which was
published at 85 FR 83822.
The 2020 Rule became effective on July 20, 2021, prior to
publication of this rescission. Due to the timing of Health Center
Program funding, grants awarded in Fiscal Year 2022 would be the first
opportunity for HRSA to impose the requirements of the ``Implementation
of Executive Order on Access to Affordable Life-Saving Medications''
rule, and so the requirements have not yet been implemented.
III. Statutory Authority
The statement of authority for 42 CFR part 51c cites to sections
330 (42 U.S.C. 254b) and 215 of the Public Health Service Act, (42
U.S.C. 216), respectively.
IV. Overview of This Rule
HHS is rescinding the 2020 Rule and therefore deleting the
associated revision to the regulations codified at 42 CFR 51c.303(w).
42 CFR 51c.303(w) stated: ``To the extent that an applicant for funding
under Section 330(e) of the Public Health Service Act (42 U.S.C.
254b(e)) has indicated that it plans to distribute, either directly, or
through a written agreement, drugs purchased through the 340B Drug
Pricing Program (42 U.S.C. 256b), and to the extent that such applicant
plans to make insulin and/or injectable epinephrine available to its
patients, the applicant shall provide an assurance that it has
established practices to provide insulin and injectable epinephrine at
or below the discounted price paid by the health center grantee or
subgrantee under the 340B Drug Pricing Program (plus a
[[Page 54391]]
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 have no health insurance.''
This final rule also states that the program term established by
the ``Implementation of Executive Order on Access to Affordable Life-
Saving Medications'' rule will not be included on any Notices of Award
issued to health centers receiving grant funds under section 330(e) of
the Public Health Service Act. Due to the timing of Health Center
Program funding, placement of that program term on health center awards
would have first been applied to funds awarded in Fiscal Year 2022. As
HHS has issued this final rule prior to the issuance of such awards,
this program term has not been placed on Health Center Program awards.
This final rule does not revoke Executive Order 13937, which may
only be revoked by executive order. As Executive Order 13937 remains in
effect, HHS is exploring non-regulatory options to implement the
Executive Order.
V. Rationale for Rescission
HHS is rescinding the 2020 Rule because the overall impact of the
additional administrative costs and burden that the 2020 Rule would
have placed on health centers would have harmed health centers and the
patients they serve.
In implementing the requirement of the 2020 Rule, health centers
would have had to absorb significant additional costs in financial
resources, 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 based on
the numerous different categories set forth in the 2020 Rule for
patients to receive insulin and injectable epinephrine.
The 2020 Rule would have significantly increased the administrative
burden on health centers because it would have required health centers
to track and monitor in real time: (1) Whether patients were receiving
insulin or injectable epinephrine through a 340B pharmacy, (2) whether
patients' incomes met the threshold in the 2020 Rule (which is
different from the standard used for the Health Center Program sliding
fee discount schedule and therefore would have had to be calculated
separately), and (3) whether patients had a high unmet deductible each
time they filled their prescriptions--which may have been further
complicated due to medical billing and claims processing delays or
whether they had a high deductible or high cost-sharing requirement as
part of their insurance plan. These burdens would have also required
that health centers work with their contract pharmacies to implement
these new requirements, which would have created extra administrative
costs. HHS has determined that, under the 2020 Rule, health centers and
pharmacies would have found it challenging to ascertain in real time a
patient's eligibility for discounted pricing under the 2020 Rule based
on whether or not that patient continued to have a high unmet
deductible, as defined in the 2020 Rule, particularly due to delays in
medical billing and claims processing.
HHS also notes that the 2020 Rule codified a new definition,
applicable only to these two classes of drugs, for ``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 definition contrasted with the Health Center Program's
sliding fee discount schedule requirement 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). Under this subsection,
health centers must 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.
In its decision to rescind the 2020 Rule, HHS notes the concerns
expressed by the vast majority of commenters that the ``low income''
definition of 350 percent of the FPG, applicable to patients receiving
these two classes of drugs, would have created significant
administrative challenges for health centers. HHS is issuing this rule
in recognition that the 2020 Rule would have resulted in additional
administrative burden and costs, resulting in a diversion of resources
from needed patient care, especially during the COVID-19 pandemic, in
order to cover such increased administrative costs.
As commenters have noted, the rule would have forced health centers
to construct two different eligibility systems. As the 2020 Rule's
definition of ``low income'' is inconsistent with standards applied in
the Health Center Program and in other comparable federal programs with
an income eligibility threshold, this would have imposed new
administrative burdens on health centers to implement. Furthermore, the
2020 Rule would require health center staff, who are not clinicians, to
ask patients at the time of screening if they use insulin or injectable
epinephrine, which may raise concerns related to the sharing of
protected health information if not conducted in a confidential
setting.
Rescinding the 2020 Rule prevents unnecessary costs to health
centers that are on the front lines of fighting COVID-19 and providing
care to millions of Americans. The 2020 Rule would have resulted in
increased administrative costs and administrative burden and 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.
VI. Public Comments and Responses
HRSA received a total of 332 comments from the public, including:
Health centers, associations and organizations representing health
centers, a health center controlled network, individual health center
staff and clinical professionals, individuals and organizations
concerned with the high cost of insulin or injectable epinephrine, an
association representing pharmacies, an association representing
hospitals participating in the 340B Program, a health insurance issuer,
a health innovation and research non-profit organization, a
pharmaceutical manufacturer, and an association representing
pharmaceutical manufacturers.
The vast majority of comments (318) favored rescission of the 2020
Rule. There were 12 comments opposing rescission of the 2020 Rule and
supporting its implementation. Two remaining comments did not
explicitly support or oppose the rescission of the 2020 Rule.
All comments were considered in developing this final rule. This
section
[[Page 54392]]
presents a summary of all major issues raised by commenters, grouped by
subject, as well as responses to the comments. Commenters used the
terms ``Federally Qualified Health Centers (FQHCs)'' and ``health
centers'' interchangeably. This final rule only applies to health
centers funded under Section 330(e) of the Public Health Service Act,
and not to other FQHCs. For consistency, this final rule uses ``health
center'' throughout.
1. Support for Rescission
Approximately 318 commenters supported rescission of the 2020 Rule.
Commenters cited a number of reasons for their support, which are
summarized below.
Comment: Approximately 316 commenters expressed concern that the
net impact of implementing the 2020 Rule would be a reduction in access
to care for underserved populations. These commenters described the
anticipated administrative burden and cost for health centers to
implement the rule and noted that these costs would reduce resources
available to provide essential primary care services to patients.
A subset of these commenters (61) detailed the specific
administrative burdens and costs that would result if the 2020 Rule
were implemented, including:
<bullet> Determining in real time whether a patient has a high
remaining deductible. The remaining deductible amount can be inaccurate
as it may change as a result of pending and delayed medical bills;
<bullet> Adjusting the charge for qualifying patients for every
form of insulin and injectable epinephrine every quarter, when the 340B
price changes; and
<bullet> Keeping pharmacy partners/contractors informed and
ensuring their compliance with new charges and eligibility rules.
Another subset of commenters (59) also noted that HRSA estimated it
would require one full-time equivalent (FTE) staff member per health
center to implement the 2020 Rule, resources the commenters stated
would be better spent increasing access in other ways. For example,
commenters stated that one FTE would have greater impact on patient
pharmaceutical access by focusing efforts such as helping patients
apply to pharmaceutical manufacturers' Patient Assistance Programs and
for enabling services to connect patients to other services in the
community.
Response: HHS agrees with these commenters' concerns regarding
reduced access to care resulting from the additional burden required of
health centers to implement the 2020 Rule. Specifically, the 2020 Rule
would necessitate some health centers redirecting resources that might
have otherwise gone to support patient care to support additional staff
to ascertain whether a high unmet deductible has been met in real time.
Comment: Approximately 305 commenters noted that the 2020 Rule's
definition of ``low income'' as persons below 350 percent of the FPG
was inconsistent with other federal programs. These commenters further
stated that having different definitions across programs increases
administrative burden of implementing the 2020 Rule.
A subset of these commenters (58) outlined specific issues that
these differing ``low income'' definitions would cause for health
centers implementing the 2020 Rule:
<bullet> Health centers would need to establish new policies and
procedures for eligibility determinations;
<bullet> Eligibility workers would need to ask all patients if they
use insulin or injectable epinephrine to appropriately screen them,
which would require patients to share protected health information with
non-clinicians;
<bullet> The higher income threshold would reduce health center
savings on these medications, reducing revenue that could be used to
support patient services for all patients; and
<bullet> A higher income threshold would reduce the cost that
health centers could charge insurers for insulin and injectable
epinephrine, effectively transferring savings from the health centers
to insurers. The commenters explained that this is because insurance
contracts generally prohibit health centers from billing insurers more
than their ``usual and customary'' rate for each specific drug, and if
the 2020 Rule were not rescinded, it would be very difficult for health
centers to argue that the 340B price is not their usual and customary,
as very few cash patients would not qualify for the 340B price.
Response: HHS agrees with these commenters' concerns that the
definition of ``low income'' in the 2020 Rule increases the
administrative burden of implementing this rule. For example, the 2020
Rule's inconsistency with current health center requirements would
require health centers to create new policies, procedures, and
workflows to ensure that eligible patients would be charged the 340B
price or less for insulin and injectable epinephrine. Additionally, HHS
shares commenters' concerns regarding the sharing of protected health
information with non-clinicians.
Comment: Approximately 300 commenters expressed concern that
implementation of the 2020 Rule would divert health center resources
away from the COVID-19 pandemic response.
A subset of these commenters (57) further noted that health centers
are making meaningful contributions to COVID-19 testing, treatment, and
vaccination, and that these contributions are very resource-intensive.
These commenters stated that reducing burden by rescinding the 2020
Rule would allow this vital work to continue.
Response: HHS appreciates the role health centers continue to play
in the response to the COVID-19 pandemic. HHS shares commenters'
concerns about the potential for implementation of the 2020 Rule to
divert resources away from health centers' ongoing critical role in the
COVID-19 pandemic response, stabilization, and recovery.
Comment: Approximately 301 commenters stated that implementing the
2020 Rule would only improve medication access for a small population
of patients, and health center services would be drastically reduced
for all health center patients given the increase in administrative
costs and loss of 340B savings.
A subset of these commenters (59) noted that the 2020 Rule would
have no impact on the overall price of the covered medications outside
of the 340B Program; those prices are set by manufacturers and would
not be changed by this rule. Further, these commenters stated that 90
percent of diabetic patients in the United States are not health center
patients, and therefore the 2020 Rule would not impact what the
majority of diabetic patients pay for insulin. Commenters also stated
that health center patients with diabetes are already likely to qualify
for discounted pricing through health centers.
Response: HHS appreciates the detail provided by commenters in
support of their conclusion that the 2020 Rule would not meaningfully
impact medication access for health center patients or individuals who
are not health center patients. HHS agrees that the 2020 Rule would be
unlikely to impact the underlying price of these two medications. HHS
also agrees that the 2020 Rule would likely improve medication access
for only a small population of health center patients.
Comment: One commenter, an association of chain drug stores, stated
that the 2020 Rule would place undue burdens on 340B-covered entities
as well as their contract pharmacies. The commenter also stated that
the 2020 Rule had not sufficiently resolved
[[Page 54393]]
several concerns, including concerns regarding the need for specific
guidance to 340B-covered entities for determining the patient's
deductible at the pharmacy point-of-sale and communicating patient
eligibility to contract pharmacies and additional clarity with respect
to administration fees. The commenter argued that because these
concerns were not addressed in the 2020 Rule, the proper course of
action would be for HRSA to rescind the 2020 Rule.
Response: HHS acknowledges that the 2020 Rule would result in
significant administrative burden on health centers, which may be
passed on to the pharmacies with which they contract to provide access
to medications.
Comment: One commenter, a health insurance issuer, stated support
for rescinding the 2020 Rule. The commenter also stated that as HHS
considers alternative approaches to implementation of Executive Order
13937, it should prioritize options that can be implemented with
minimal administrative burden to the parties involved in the 340B
Program, including health centers, their private sector partners, and
patients served. The commenter further stated that any alternative
approaches should ensure that HRSA maintains a regularly updated
directory of health centers, require health centers to adjudicate 340B
claims of patients who have health insurance, and require pharmacy
providers to adhere to 340B claim stamping using the National Council
for Prescription Drugs Programs submission clarification code.
Response: HHS acknowledges the comment and support for minimizing
administrative burden. Alternative methods for implementation of
Executive Order 13937 are beyond the scope of this rulemaking.
2. Opposition to Proposed Rescission
Twelve commenters opposed the proposed rescission of the 2020 Rule.
Commenters cited a number of reasons for their opposition, which are
summarized below.
Comment: Six commenters opposed HHS's proposed rescission of the
2020 Rule noting the importance of insulin and the additional costs
that could be imposed on the health system if patients were not taking
the necessary amounts of insulin to avoid additional complications.
Response: HHS shares commenters' concerns about the additional
health care costs that can result from a lack of access to timely and
appropriate primary health care. The fundamental purpose of the Health
Center Program is to ensure access to care for underserved and
vulnerable populations; Section 330 of the Public Health Service Act
requires health centers to provide comprehensive primary health care to
patients without regard to the patient's ability to pay. HHS is
concerned that the increased costs due to the extra administrative
burden placed on health centers to comply with the 2020 Rule would lead
to fewer resources available to help provide comprehensive primary
health care to as many health center patients as possible and that
decrease in resources would result in the cost of the 2020 Rule
outweighing its benefit.
Comment: Five commenters opposed HHS's proposed rescission of the
2020 Rule noting that the cost of monthly medications poses a financial
burden to patients which can be life-threatening, especially for
underserved populations who depend on lower medication costs. These
commenters further stated that HHS should consider the cost to patients
and not just the financial burden on healthcare systems. A subset of
these commenters (3) stated that if medication costs increase, these
patients will likely stop taking their medication or be forced to
choose between food, rent, or medication. Another subset of these
commenters (2) opposed HHS's proposed rescission of the 2020 Rule
noting that human life is of greater value than costs to institutions,
and that the increased burden on health centers does not justify taking
away affordable medications from underserved populations.
Response: HHS is concerned that the increased costs due to the
extra administrative burden placed on health centers to comply with the
2020 Rule would lead to the availability of fewer resources to help
provide comprehensive primary health care to as many health center
patients as possible and that decrease in resources would result in the
cost of the 2020 Rule outweighing its benefit. HHS believes the 2020
Rule would improve medication access for only a small percentage of
health center patients while not meaningfully impacting medication
access for the majority of health center patients.
Comment: Four commenters opposed HHS's proposed rescission of the
2020 Rule noting that they disagree with HHS's reasoning for rescinding
the 2020 Rule. The commenters stated that administrative burden and
administrative costs do not justify limiting access to lifesaving
medications to low income patients who do not have insurance or
otherwise cannot afford their medications.
Response: HHS is concerned that the increased costs due to the
extra administrative burden placed on health centers to comply with the
2020 Rule would lead to fewer resources available to help provide
comprehensive primary health care to as many health center patients as
possible and that decreased resources would result in the cost of the
2020 Rule outweighing its benefit. Executive Order 13937 remains in
effect and HHS is exploring alternative approaches to address the high
costs of prescription drugs, such as insulin or injectable epinephrine.
Comment: Two commenters opposed HHS's proposed rescission of the
2020 Rule noting that health care institutions (including health
centers) can address increasing costs of providing essential programs,
including during the COVID-19 pandemic, without HHS rescinding this
rule. Comments included suggested alternative health center cost
cutting methods such as allocating resources, improving workflows, and
using employee retention strategies.
Response: HHS is rescinding the 2020 Rule to maximize resources
health centers have to provide access to high quality, comprehensive
primary health care in the most efficient way and to as many health
center patients as possible. HHS believes the 2020 Rule would improve
medication access for only a small percentage of health center
patients. Examining other cost cutting measures to decrease the burden
on health centers is beyond the scope of this proposed rulemaking.
Comment: Two commenters opposed HHS's proposed rescission of the
2020 Rule noting that it would benefit numerous health center patients
through greater access to affordable insulin and it should be kept for
that reason. One of those commenters further noted that, unlike
patients under 200 percent of the FPG who already receive significant
discounts from health centers and would be less impacted by the 2020
Rule, patients between 200 and 350 percent of the FPG would greatly
benefit from this rule going into effect.
Response: While the 2020 Rule would likely provide benefits to a
small number of health center patients with diabetes and severe
allergic reactions, HHS is concerned that the increased costs due to
the extra administrative burden placed on health centers to comply with
the 2020 Rule would lead to fewer resources available to provide
comprehensive primary health care to as many health center patients as
possible. As Executive Order 13937 remains in effect, HHS is exploring
non-regulatory options to implement the Executive Order.
Comment: One commenter opposed HHS's proposed rescission of the
2020
[[Page 54394]]
Rule noting that HHS should not place a charge on American families to
pay for administrative costs at health centers, nor administrative
costs caused by the COVID-19 pandemic.
Response: HHS appreciates this comment and is committed to
maximizing resources for health centers to provide comprehensive
primary health care to health center patients without regard for
patients' ability to pay.
Comment: One commenter opposed HHS's proposed rescission of the
2020 Rule noting that it would allow health centers to divert resources
to other services at the expense of the community's health needs during
the COVID-19 pandemic, specifically, access to the lifesaving
medications of insulin and injectable epinephrine.
Response: HHS is concerned that the increased costs due to the
extra administrative burden placed on health centers to comply with the
2020 Rule would lead to fewer resources available to provide
comprehensive primary health care to as many health center patients as
possible, including those who use insulin or injectable epinephrine,
and that decrease in resources would result in the cost of the 2020
Rule outweighing its benefit. In addition, as noted in the 2020 Rule,
in many cases, health centers already voluntarily provide medications,
including insulin and injectable epinephrine, to their patients at
reduced prices.
Comment: One commenter, a pharmaceutical manufacturer, opposed
HHS's proposed rescission of the 2020 Rule noting that most of its
insulin products are available to covered entities for pennies and
rescinding the 2020 Rule would make covered entity patients pay more
for the medications. The commenter also noted that covered entity
patients in most cases could receive larger discounts from the
company's own discount programs for medications.
Response: Nothing in this rule rescinding the 2020 Rule prohibits
health center patients from accessing pharmaceutical company and
charity discount programs to find the most affordable medications,
including for insulin or injectable epinephrine.
Comment: One commenter, a pharmaceutical manufacturer, opposed
HHS's proposed rescission of the 2020 Rule, noting that it provides
insulin to several charitable organizations including its own
foundation, which provide insulin for free for qualifying patients at
or below 400 percent of FPG and covered entities should be held to the
same standard. Additionally, this commenter noted that it participates
in a number of programs that allow patients, regardless of their
income, to purchase insulin at no more than $35 a month.
Response: HHS commends those who are working to ensure underserved
patients are able to access discounted medications. As noted above, HHS
is concerned that the increased costs due to the extra administrative
burden placed on health centers to comply with the 2020 Rule would lead
to fewer resources available to provide comprehensive primary health
care to as many health center patients as possible, including those who
use insulin or injectable epinephrine.
Comment: One commenter, a pharmaceutical manufacturer, opposed
HHS's proposed rescission of the 2020 Rule, noting that grantees that
are covered entities under the 340B Program should not be able to
charge large markups on drugs purchased through the 340B Program to
uninsured or underinsured individuals to fund their operations.
Response: With regard to the commenter's concern regarding the
general requirements of the 340B Program, those requirements, including
charges for drugs purchased through the 340B Program by covered
entities, are beyond the scope of this rulemaking.
Comment: One commenter, a pharmaceutical manufacturer, opposed
HHS's proposed rescission of the 2020 Rule, noting that the commenter
is able to verify income and insurance information with minimal burden
and that six covered entities have worked with the commenter to provide
insulin to their patients for pennies, demonstrating that the 2020 Rule
would not be overly burdensome.
Response: HHS has concerns that under the 2020 Rule's definition of
``high unmet deductible,'' health centers and pharmacies with which
they contract may find it challenging to ascertain in real time a
patient's eligibility for pricing based on whether or not the patient
continues to have a ``high unmet deductible'' that meets the 2020
Rule's definition of the term. The 2020 Rule defined ``high unmet
deductible'' as ``the amount a patient owes toward their high
deductible at any time during a plan year in which the portion of the
patient's high deductible for the plan year that has not yet been met
exceeds 20 percent of the deductible.'' Determining whether a patient's
plan year spending toward their deductible meets this definition has
the potential to be particularly challenging due to medical billing and
claims processing delays. For these and other reasons, HHS believes the
administrative burden and costs the 2020 Rule places on health centers
outweigh the benefits.
3. General Comments
Comment: One commenter, an association of pharmaceutical
manufacturers, while not opposing rescission of the 2020 Rule, noted
that the 340B Program has grown exponentially in recent years without a
commensurate benefit to the underserved patients.
Response: The growth of the 340B Program is beyond the scope of
this rulemaking.
Comment: One commenter stated that the 340B Program is essential to
the well-being of all patients that receive care at health centers and
asked that the 340B Program be kept in place.
Response: HHS acknowledges the importance of the 340B Program to
patients served by health centers. This rulemaking does not change the
340B Program.
4. Request To Revoke Executive Order 13937
Comment: Approximately 300 commenters urged revocation of the
``Executive Order on Access to Affordable Lifesaving Medications,'' on
which the 2020 Rule was based. These commenters expressed many concerns
with the underlying Executive Order and requested that it be revoked.
Response: Revoking Executive Order 13937, ``Access to Affordable
Lifesaving Medications'' is beyond the authority of HHS and outside the
scope of this final rule.
5. Miscellaneous
Other commenters raised a variety of issues that HHS determined did
not pertain to the rescission of the 2020 Rule. This rulemaking does
not address those issues as they are outside of its scope.
VII. Regulatory Impact Analysis (RIA)
HHS has examined the effects of this 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 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
[[Page 54395]]
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 have needed to hire 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 2020 Rule, HRSA determined that the
2020 Rule was not economically significant, given that the
administrative burden of $68.7 million described above fell 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. As Executive
Order 13937 remains in effect, HHS is exploring non-regulatory options
for implementation.
HHS welcomed but did not receive comments on whether the proposed
rescission of the 2020 Rule is a ``significant regulatory action''
under Section 3(f) of Executive Order 12866.
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'' 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 $8
million to $41.5 million. As of September 31, 2020, the Health Center
Program provides grant funding under section 330(e) of the Public
Health Service Act to 1,315 organizations to provide health care to
medically underserved communities. HHS has determined, and the
Secretary certifies, that this rule will 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 2020 Rule will be minimal. HHS welcomed but
did not receive comments concerning the economic impact of the proposed
rescission of the ``Implementation of Executive Order on Access to
Affordable Life-Saving Medications'' rule on health centers for the
purposes of the RFA.
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.'' The current threshold after adjustment
for inflation is $158 million, using the most current (2020) Implicit
Price Deflator for the Gross Domestic Product. As stated in the RIA for
the 2020 Rule, HRSA determined that the administrative burden of $68.75
million described above fell below the Unfunded Mandates Reform Act's
threshold of $158 million. HRSA relies on that same analysis now,
finding that rescission of that rule will have an economic impact of
the same amount, $68.75 million in administrative savings to health
centers, and that such amount is below the threshold of $158 million.
Executive Order 13132--Federalism
HHS has reviewed this rule in accordance with Executive Order 13132
regarding federalism and has determined that it does not have
``federalism implications.'' This rule will 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 rule
will 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 rule is projected
to have no impact on current reporting and recordkeeping burden for
health centers. This rule will result in no new reporting burdens. HHS
welcomed but did not receive comments that this rule would result in
new reporting burdens for health centers.
Dated: September 28, 2021.
Xavier Becerra,
Secretary, Department of Health and Human Services.
List of Subjects in 42 CFR Part 51c
Grant programs--Health, Health care, Health facilities, Reporting
and recordkeeping requirements.
[[Page 54396]]
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. 2021-21457 Filed 9-30-21; 8:45 am]
BILLING CODE 4165-15-P
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