Veterans Care Agreements

 
CONTENT
Federal Register, Volume 84 Issue 93 (Tuesday, May 14, 2019)
[Federal Register Volume 84, Number 93 (Tuesday, May 14, 2019)]
[Rules and Regulations]
[Pages 21668-21682]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-10076]
[[Page 21667]]
Vol. 84
Tuesday,
No. 93
May 14, 2019
Part V
Department of Veterans Affairs
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38 CFR Part 17
Veterans Care Agreements; Interim Final Rule
Federal Register / Vol. 84 , No. 93 / Tuesday, May 14, 2019 / Rules
and Regulations
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DEPARTMENT OF VETERANS AFFAIRS
38 CFR Part 17
RIN 2900-AQ45
Veterans Care Agreements
AGENCY: Department of Veterans Affairs.
ACTION: Interim final rule.
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SUMMARY: The Department of Veterans Affairs (VA) amends its medical
regulations to implement its authority to furnish necessary care to
covered individuals through certain agreements. Section 102 of the John
S. McCain III, Daniel K. Akaka, and Samuel R. Johnson VA Maintaining
Internal Systems and Strengthening Integrated Outside Networks Act of
2018 authorizes VA to enter into agreements to furnish required care
and services when such care and services are not feasibly available to
certain individuals through a VA facility, a contract, or a sharing
agreement. This interim final rule establishes the parameters of those
agreements, to include: Establishing a certification process for
providers who will furnish such care or services; establishing a
methodology by which rates will be calculated for payment of care or
services under an agreement; and establishing an administrative process
for adjudicating disputes arising under or related to such agreements,
including those pertaining to claims for payment for care or services
provided under an agreement.
DATES: Effective date: This rule is effective on May 14, 2019.
    Comment date: Comments must be received on or before July 15, 2019.
ADDRESSES: Written comments may be submitted by email through http://www.regulations.gov; by mail or hand-delivery to Director, Office of
Regulation Policy and Management (00REG), Department of Veterans
Affairs, 810 Vermont Avenue NW, Room 1064, Washington, DC 20420; or by
fax to (202) 273-9026. (This is not a toll-free number.) Comments
should indicate that they are submitted in response to ``RIN 2900-AQ45,
Veterans Care Agreements.'' Copies of comments received will be
available for public inspection in the Office of Regulation Policy and
Management, Room 1064, between the hours of 8:00 a.m. and 4:30 p.m.
Monday through Friday (except holidays). Please call (202) 461-4902 for
an appointment. (This is not a toll-free number.) In addition, during
the comment period, comments may be viewed online through the Federal
Docket Management System (FDMS) at http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Joseph Duran, Office of Community Care
(10D), Veterans Health Administration, Department of Veterans Affairs,
Ptarmigan at Cherry Creek, Denver, CO, 80209; [email protected],
(303) 372-4629. (This is not a toll-free number.)
SUPPLEMENTARY INFORMATION: The John S. McCain III, Daniel K. Akaka, and
Samuel R. Johnson VA Maintaining Internal Systems and Strengthening
Integrated Outside Networks Act of 2018 (hereafter referred to as the
``MISSION Act'') includes five titles containing more than 60
substantive provisions, many of which amend existing law or create new
law that affects the way VA furnishes necessary care and services to
covered individuals. This interim final rule will implement section 102
of the MISSION Act, which creates a new 38 U.S.C. 1703A to authorize VA
to enter into agreements to furnish required care and services when
such care and services are not feasibly available through a VA
facility, a contract, or a sharing agreement. This interim final rule
establishes the parameters of those agreements, to include establishing
a certification process for providers who will furnish such care or
services; establishing a methodology by which rates will be calculated
for payment of care or services under an agreement; and establishing an
administrative process for adjudicating disputes arising under or
related to such agreements, including those pertaining to claims for
payment for care or services provided under an agreement. Section
1703A(k) requires VA to promulgate regulations to carry out section
1703A.
    This interim final rule will not implement section 101 of the
MISSION Act, which creates a new VA Community Care Program to furnish
care to eligible veterans through non-VA providers. The VA Community
Care Program will be implemented in a separate rulemaking (2900-AQ46),
however, we provide here a brief explanation regarding the need to
implement the agreements authorized by section 1703A ahead of the
community care program itself. In accordance with section 101(c)(1) of
the MISSION Act, VA is required to promulgate regulations to carry out
Veterans Community Care Program by June 6, 2019. Concurrent with this
statutory deadline, section 143 of the MISSION Act amended section
101(p) of the Veterans Access, Choice, and Accountability Act of 2014
(the Choice Act) to state that VA may not use the Choice Act to furnish
care and services after June 6, 2019. As a result, after June 6, 2019,
VA will no longer be able to use Veterans Choice Program provider
agreements. The agreements authorized by this rulemaking will
essentially replace the Veterans Choice Program provider agreements as
a method for purchasing community care through instruments other than
conventional procurement contracts that are subject to the Federal
Acquisition Regulation (FAR) and all other Federal procurement laws. VA
needs the regulations governing these new agreements to be legally
effective before June 6, 2019, so that VA has time to establish new
purchasing relationships with community providers, because VA's
contractual network of community providers as required by the new
section 1703(h), as amended by section 101(a) of the MISSION Act, may
not be at full coverage by June 6, 2019. Additionally, in VA's
experience, certain care and services (such as home health services)
have been procured from sources that are unwilling, or unable, to enter
into conventional procurement contracts subject to the FAR, and VA
expects this will continue to be true after June 6, 2019. If the
agreements that will be promulgated by this rulemaking are not in
effect with enough time to provide VA and community providers an
opportunity to transition away from the current Veterans Choice Program
provider agreements before June 6, 2019, there is risk of disruptions
to veterans receiving community care (see the section that discusses
the Administrative Procedure Act for more specific information
regarding disruption to care). To ensure the transition from the
current Veterans Choice Program to the Veterans Community Care Program
occurs without such disruption, VA requires this interim final rule to
establish the parameters of agreements and other related authorities so
that VA may legally order care and services under them by June 6, 2019.
Sec.  17.4100 Definitions
    Section 17.4100 will establish definitions for Sec. Sec.  17.4100-
17.4135, which are promulgated to implement the agreements authorized
by 38 U.S.C. 1703A.
    The term covered individual is defined to mean an individual who is
eligible to receive hospital care, medical services, or extended care
services from a non-VA provider under title 38 U.S.C. and title 38 CFR.
This definition is consistent with the definition of covered individual
in section 1703A(l) and will be used throughout Sec. Sec.  17.4100-
17.4135 to indicate who may be furnished care
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or services under a Veterans Care Agreement (VCA). This definition
further clarifies that the covered individual must separately be
eligible under laws administered by VA to receive care from a non-VA
provider. Section 1703A is strictly an authority related to how VA may
purchase care and services in the community; it does not establish
eligibility to receive such care or services from a non-VA provider at
VA expense. Such authority must exist elsewhere in title 38 U.S.C.
(e.g., 38 U.S.C. 1703). The definition of covered individual in Sec.
17.4100 further references ``title 38 CFR,'' to ensure any implementing
regulatory criteria related to the receipt of care or services from
non-VA providers at VA expense also apply (more specific applicable
regulatory criteria in title 38 CFR will not be cited, as such
references may not be exhaustive or accurate should VA revise its
regulations in the future).
    The term contract is defined to mean any of the following: Federal
procurement agreements regulated by the Federal Acquisition Regulation;
common law contracts; other transactions; or any other instrument.
However, Veterans Care Agreements are expressly excluded from the
definition. This definition relates to the assessment by VA in Sec.
17.4115 of whether care and services are feasibly available from a VA
facility or through a contract or sharing agreement.
    Extended care services is defined as the services described in 38
U.S.C. 1710B(a); this definition of ``extended care services'' is
sufficiently broad to capture all extended care services offered by VA.
    The terms hospital care and medical services are similarly defined
by cross reference to the applicable statutory definitions at 38 U.S.C.
1701(5) and (6), respectively, to sufficiently capture those types of
care furnished by VA.
    The term sharing agreement is defined to mean an agreement, under
statutory authority other than 38 U.S.C. 1703A, by which VA can obtain
hospital care, medical services, or extended care services for a
covered individual.
    The term VA facility is defined to mean a point of VA care where
covered individuals can receive hospital care, medical services, or
extended care services, to include a VA medical center, a VA community-
based outpatient clinic, a VA health care center, a VA community living
center, an VA independent outpatient clinic, and other VA outpatient
services sites. This definition relates to the assessment by VA in
Sec.  17.4115 of whether care and services are feasibly available from
a VA facility or through a contract or sharing agreement. We have
defined this term in accordance with the types of care and services
that a VA facility provides, and we have provided a non-exhaustive list
of examples of designations of such facilities (e.g., VA medical
center, VA community-based outpatient clinic, etc.) to ensure that any
future changes to descriptions or designations of VA facilities would
not result in a gap in our regulations.
    The term Veterans Care Agreement is defined to mean an agreement
authorized by 38 U.S.C. 1703A. We note that we are using the term
veterans care agreement, although individuals other than veterans may
receive care under an agreement authorized by section 1703A (see the
definition of covered individual). We additionally note that,
throughout the remainder of the preamble, we may refer more simply to
agreement rather than veterans care agreement.
Sec.  17.4105 Purpose and Scope
    Section 17.4105 will establish purpose and scope paragraphs. The
purpose in paragraph (a) will state that Sec. Sec.  17.4100-17.4135
implement 38 U.S.C. 1703A, as required under section 1703A(j).
Paragraph (a) will further state that section 1703A authorizes VA to
enter into and utilize Veterans Care Agreements to furnish hospital
care, medical services, and extended care services to a covered
individual when such individual is eligible for and requires such care
or services that are not feasibly available to the covered individual
through a VA facility, a contract, or a sharing agreement.
    The scope in paragraph (b) will state that Sec. Sec.  17.4100-
17.4135 contain procedures, requirements, obligations, and limitations
for: The process of certifying entities or providers under 38 U.S.C.
1703A; entering into, administering, furnishing care or services
pursuant to, and discontinuing Veterans Care Agreements; and all
disputes arising under or related to Veterans Care Agreements.
Paragraph (b) will further state that Sec. Sec.  17.4100 through
17.4135 apply to all entities and providers, where applicable, that are
parties to a Veterans Care Agreement, participate in the certification
process, and/or furnish hospital care, medical services, or extended
care services pursuant to a Veterans Care Agreement.
Sec.  17.4110 Entity or Provider Certification
    Section 17.4110 will implement the certification process required
by 38 U.S.C. 1703A(c), by establishing the standards and process VA
will use to certify entities or providers that are interested in
entering into agreements with VA and furnishing care and services
through such agreements. Generally, section 1703A(c) requires VA to
establish procedures for application for certification, criteria to
approve or deny certification and recertification, and criteria to
revoke certification.
    Paragraph (a) of Sec.  17.4110 will establish the general
requirement that to be eligible to enter into a Veterans Care
Agreement, an entity or provider must be certified by VA in accordance
with the process and criteria established in paragraph (b) of Sec.
17.4110. Paragraph (a) will also establish that an entity or provider
must be actively certified while furnishing hospital care, medical
services, or extended care services pursuant to a Veterans Care
Agreement that the entity or provider has entered into with VA. We
believe this meets the intent of section 1703A(c), to ensure that
entities or providers must meet and maintain VA's certification
requirements to be considered eligible to furnish care or services
under a Veterans Care Agreement.
    Paragraph (b) of Sec.  17.4110 will establish the process and
criteria for entity and provider certification. Paragraph (b)(1) will
establish that an entity or provider must apply for certification, by
submitting the following information to VA: (i) Documentation of
applicable medical licenses, and (ii) all other information and
documentation that is required by VA. This additional information may
include (but is not limited to): A provider's first and last names;
legal business names, National Provider Number (NPI), NPI type,
provider identifier type (e.g. individual or group practice), tax
identification number, specialty (taxonomy code), business address,
billing address, phone number, and care site address. We interpret
section 1703A(c) as requiring an application for certification (as
section 1703A(c)(1) requires VA to establish through regulation a
timeframe by which VA must act upon such application), and we are
implementing that requirement by establishing that application occurs
with the entity or provider submitting information as required by VA in
Sec.  17.4010(b)(1)(i)-(ii). This information is what VA presently
requires providers to submit to be considered eligible to provide
community care under Choice Provider Agreements, and we believe
providers are familiar with this information. Although providers who
will furnish services through a VCA will be familiar with submitting
this information, the information collection burden will not be
grandfathered from the Choice
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Provider Agreements to the VCA program, because the certification
process required by section 1703A(c) is new and therefore will be
accounted for as a new information collection as described later in
this rule. Because this collection is supporting a new statutory
process VA must account for it as a new collection, which will include
submission by providers of all new information.
    Paragraph (b)(2) of Sec.  17.4110 will establish the process and
criteria for approval or denial of an application for certification, as
required by section 1703A(c)(2). Paragraph (b)(2)(i) will first
establish that VA will review all information it obtains including
through applicable federal and state records systems and as submitted
by the applicant, and will determine eligibility for certification.
These federal and state records systems would be those that VA accesses
presently to conduct its certification processes for providers.
Paragraph (b)(2)(ii) will then establish that an applicant must submit
all information required under paragraph (b)(1) of this section. VA
will then review all applicable documentation received to determine
whether all requirements are met.
    Paragraph (b)(2)(iii) of Sec.  17.4110 will establish the first
mandatory basis for denial of certification, which is established in
section 1703A(c), whereby VA must deny an application for certification
if VA determines that the entity or provider is excluded from
participating in a Federal health care program, or is identified as an
excluded source on the System for Award Management Exclusions list.
This mandatory denial is consistent with section 1703A(c)(3).
    The second mandatory basis for denial of certification that VA is
establishing is under Sec.  17.4110(b)(2)(iv), whereby VA will deny an
application for certification if VA determines that the applicant is
already barred from furnishing hospital care, medical services, and
extended care services under chapter 17 of title 38, U.S.C., because VA
has previously determined the applicant submitted to VA a fraudulent
claim, as that term is defined in 38 U.S.C. 1703D(i)(4), for payment
for hospital care, medical services, or extended care services. We
believe this basis of denial is reasonable and consistent with the
purposes of section 1703A(c) because it would allow VA to deny an
application based on a separate, previous determination by VA that the
applicant is barred from furnishing care and services due to submitting
a fraudulent claim.
    Paragraph (b)(2)(v) of Sec.  17.4110, establishes a discretionary
standard that would allow VA to deny an application for certification
if VA determines that, based on programmatic considerations, VA is
unlikely to enter into a Veterans Care Agreement with the applicant. We
believe this basis of denial is reasonable because section 1703A is a
permissive procurement authority that allows (but does not require) VA
to enter into and use Veterans Care Agreements. Therefore, there is
little or no benefit to a provider or entity, or to VA, from proceeding
with the certification process in section 1703A(c), including obtaining
and monitoring certified status, when VA, in the exercise of its
programmatic judgment, determines it is unlikely to enter into a VCA
with the entity or provider. Under those circumstances, in order to
avoid unnecessary expenditure of resources by the entity or provider,
and by VA, VA may deny the application. VA's determination that the
basis of denial in Sec.  17.4110(b)(2)(v) has been met will be assessed
on a case by case basis. We will not regulate more specific
circumstances under which VA might apply this basis of denial, although
such circumstances would generally exist when VA would not likely enter
into a VCA with an entity or provider because the care or services
required by a covered individual are instead feasibly available through
a VA facility, a contract, or a sharing agreement (see 38 U.S.C.
1703A(a)(1)). For instance, if an entity or provider were already a
participant in VA's contractual community care network, or if VA's
contractual community care network in a certain locality already had
adequate coverage of the services the entity or provider furnishes, VA
would be unlikely to seek to enter into a VCA with that entity or
provider.
    As required by section 1703A(c)(1), Sec.  17.4110(b)(2)(vi) will
establish a deadline for VA to act on an application for certification,
to require that within 120 days of VA receiving an application, VA will
issue a written decision approving or denying certification, if
practicable. We believe 120 days is a reasonable amount of time to make
such a determination, and we include the if practicable language only
to provide for limited exceptions where the 120 days may not be met
(for instance, if a very large quantity of applications is received by
VA at the same time or within a short timeframe). Section
17.4110(b)(2)(vi) will further establish that notices of approval will
set forth the effective date and duration of the certification, while
notices of denial will set forth the specific grounds for denial and
supporting evidence. We believe this will provide entities and
providers adequate notice of their relative certification status.
Lastly, Sec.  17.4110(b)(2)(vi) will establish that a denial
constitutes VA's final decision on an application.
    Paragraph (b)(3) of Sec.  17.4110 will establish the duration of
the certification, in accordance with the requirement to regulate such
duration in section 1703A(c)(2). Paragraph (b)(3)(i) will provide that
an entity or provider's certification will last for a three-year
period, unless VA revokes such certification within that period under
the standards established in Sec.  17.4110(b)(4) (this revocation is
discussed further below). This three-year certification period is
reasonable for VA to administer and should not create any undue burden
for entities or providers. Paragraph (b)(3)(ii) of Sec.  17.4110 will
further establish that an entity or provider must maintain
certification throughout the three-year period and must inform VA of
any changes or events that would affect its eligibility within 30
calendar days of the change or event. We believe this maintenance of
certification is consistent with the intent of section 1703A(c).
    Paragraph (b)(3)(iii) of Sec.  17.4110 will establish that a
certified entity or provider seeking certification after the end of its
current three-year certification must apply for recertification at
least 60 calendar days prior to the expiration of its current
certification; otherwise, the procedures set forth in paragraph
(b)(3)(iv) of Sec.  17.4110 will apply. Upon application for
recertification by the entity or provider, including submitting any new
or updated information within the scope of paragraph (b)(1) of Sec.
17.4110 that VA requests in conjunction with such application for
recertification, VA will reassess the entity or provider under the
criteria in paragraph (b)(2) of Sec.  17.4110. VA will issue a decision
approving or denying the application for recertification within 60
calendar days of receiving the application, if practicable. Notice of
the decision will be furnished to the applicant in writing. Notices of
recertification will set forth the effective date and duration of the
certification. Notices of denial will set forth the specific grounds
for denial and supporting evidence. A denial constitutes VA's final
decision on the application for recertification. We believe the
processes established in Sec.  17.4105(b)(3)(iii) provide an entity or
provider with adequate notice to begin and complete the process of
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recertification, as well as notice that VA will assess for
recertification under the criteria established in Sec.  17.4110(b)(2),
as VA is required to regulate recertification under section
1703A(c)(2). As with initial certification, we find that written notice
is adequate to communicate to entities and providers their relative
recertification status, and that VA's denial notice for recertification
constitutes VA's final decision on application for recertification.
Paragraph (b)(3)(iv) of Sec.  17.4110 will lastly establish that if a
certified entity or provider applies for recertification after the
deadline in paragraph (b)(3)(iii) of Sec.  17.4110 (fewer than 60 days
prior to their three-year period lapsing), such application will
constitute a new application for certification and will be processed in
accordance with paragraphs (b)(1)-(2) of Sec.  17.4110.
    Paragraph (b)(4) of Sec.  17.4110 will establish the process for
revocation of certification, in accordance with the requirement to
regulate such revocation in section 1703A(c)(2). Paragraph (b)(4)(i)
will establish that VA may revoke an entity's or provider's
certification in accordance with Sec.  17.4010(b)(2)(ii)-(v). Paragraph
(b)(4)(ii) will establish that when VA determines revocation is
appropriate, VA will notify the entity or provider in writing of the
proposed revocation. The notice of revocation will set forth the
specific grounds for the action and will notify the entity or provider
that it has 30 calendar days from the date of issuance to submit a
written response addressing either of the following: (A) Documenting
compliance and proving any grounds false, or (B) providing information
and documentation that demonstrates the entity or provider has,
subsequent to the notice of proposed revocation, achieved compliance
with all criteria for certification set forth in Sec.  17.4110(b)(2).
Paragraph (b)(4)(iii) will establish that following the 30-day response
period, VA will consider any information and documentation submitted by
the entity or provider and will, within 30 calendar days, determine
whether revocation is warranted. If VA determines that revocation is
not warranted, VA will notify the entity or provider of that
determination in writing. If VA determines that revocation is
warranted, the entity or provider will immediately lose certified
status, and VA will issue a notice of revocation to the entity or
provider. Notices of revocation will set forth the specific facts and
grounds for, and the effective date of, such revocation. A notice of
revocation constitutes VA's final decision. Lastly, paragraph
(b)(4)(iv) will establish that revocation of certification results in
such status being rendered void, and the provider or entity may not
furnish services or care under a VCA prior to applying for and
obtaining certified VCA status.
    We believe that the processes established in Sec.  17.4110(b)(4)
provide adequate notice in both timeframes and format to providers and
entities of VA's decision to revoke to then permit providers and
entities with an opportunity to respond and potentially remediate
circumstances that could result in VA not revoking certification. As
with approvals of initial certification or recertification, VA's
decision to revoke certification will constitute VA's final decision.
Sec.  17.4115 VA Use of Veterans Care Agreements
    Section 17.4115 will establish basic parameters regarding the use
of agreements. Paragraph (a)(1) of Sec.  17.4115 will establish that VA
may furnish hospital care, medical services, or extended care services
through a VCA only if such care or services are furnished to a covered
individual who is eligible for such care or services under 38 U.S.C.
chapter 17 and requires such care or services. The requirement in Sec.
17.4115(a)(1) that individuals be eligible for care or services is
consistent with section 1703A(a)(1)(A). Paragraph (a)(2) of Sec.
17.4115 will restate the general requirement in section 1703A(a)(1)(A)
that VA may use agreements to furnish care or services only if such
care or services are not feasibly available to the covered individual
through a VA facility, contract, or a sharing agreement. Paragraph (a)
of Sec.  17.4115 essentially restates language from section 1703A(a),
but modifies it to include that agreements may ``only'' be considered
for use after considering those other means of furnishing care and
services. We believe this reflects the clear intent of section
1703A(a), which only authorizes VA to use agreements to purchase care
in the community when such care is not feasibly available from a VA
facility or through a contract or sharing agreement. Paragraph (a)(2)
of Sec.  17.4115 will also include the express qualifying language from
section 1703A(a)(1)(C) that VA may consider the medical condition of
the individual, the travel involved, the nature of the care or
services, or a combination of these factors when determining if the
furnishing of care and services through a contract or sharing agreement
would be impracticable or inadvisable, thereby warranting use of an
agreement instead.
    Paragraph (b) of Sec.  17.4115 will establish standards of conduct,
as well as indicate improper business practices, for VA officials and
for entities and providers. We note that we will not be restating the
regulatory text verbatim below to explain its inclusion in regulations,
to avoid unnecessary duplication and because such regulation text is
predominantly self-explanatory. Paragraph (b)(1)(i) of Sec.  17.4115
will establish general parameters that Government business shall be
conducted in a manner above reproach and, except as authorized by
statute or regulation, with complete impartiality and with preferential
treatment for none. Paragraph (b)(1)(ii) of Sec.  17.4115 will
memorialize that certain other statutes and regulations address
prohibited conduct for VA officials and employees. Examples of such
authorities are identified in paragraphs (b)(1)(ii)(A)-(D). Paragraph
(b)(2) of Sec.  17.4115 will establish more specific standards and
requirements for entities and providers that enter into Veterans Care
Agreements, to require such an entity or provider to: (i) Have a
satisfactory performance record; (ii) have a satisfactory record of
integrity and business ethics; (iii) notify VA within 30 calendar days
of the existence of an indictment, charge, conviction, or civil
judgment, or Federal tax delinquency in an amount that exceeds $3,500;
(iv) not engage in a fraudulent or criminal activity or offense (such
prohibited activities or offenses are more specifically listed in the
regulation text under Sec.  17.4115(b)(2)(iv)); and (v) not submit to
VA a fraudulent claim, as that term is defined in 38 U.S.C.
1703D(i)(4), for payment for hospital care, medical services, or
extended care services.
Sec.  17.4120 Payment Rates
    Section 17.4120 will establish that the rate structure for payment
for hospital care, medical services, and extended care services
furnished pursuant to an agreement authorized by section 1703A of this
title will be the rates set forth in the terms of such agreement. Each
such agreement will contain price terms for all services within its
scope. Payment rates will comply with the parameters defined in Sec.
17.4120(a)-(e), as described below. To be consistent with section
1703A(d), payment rates will be analogous to the parameters established
in section 1703(i) as amended by section 101 of the MISSION Act. For
the sake of convenience and understanding, we refer to provisions of
section 1703, as section 101 of the MISSION Act will amend it, although
we recognize that section 1703 as so amended is not
[[Page 21672]]
legally effective until VA has published a final rule implementing the
Veterans Community Care Program (the proposed rule RIN 2900-AQ46,
Veterans Community Care Program, was published on February 22, 2019,
see 84 FR 5629). Until section 1703(i) as amended is effective, VA
exercises its general authority in this interim final rule to establish
the rates paid for care and services provided through an agreement, and
such rates will be consistent with section 1703(i) when it comes into
effect.
    Paragraph (a) of Sec.  17.4120 will establish that, except as
otherwise provided in Sec.  17.4120, payment rates will not exceed the
applicable Medicare fee schedule or prospective payment system amount
(hereafter referred to as ``Medicare rate''), if any, for the period in
which the service was provided (without any changes based on the
subsequent development of information under Medicare authorities). This
will be analogous to the general provision in section 1703(i)(1), that,
with certain exceptions, the rates paid for care and services may not
exceed the applicable Medicare rate. The parenthetical language in
Sec.  17.4120(a), to indicate that VA's rates would be based on
Medicare rates without any changes based on the subsequent development
of information under Medicare authorities, is intended to limit VA's
rate adjustments to an annual basis in line with Medicare's annual
payment update, versus other adjustments that Medicare may make to its
rates throughout any given year that is typically provider-specific and
is based on provider and other reporting.
    Paragraph (b) of Sec.  17.4120 will establish that, with respect to
services furnished in a State with an All-Payer Model Agreement under
section 1814(b)(3) of the Social Security Act (42 U.S.C. 1395f(b)(3))
that became effective on or after January 1, 2014, the Medicare rate
under paragraph (a) will be calculated based on the payment rates under
such agreement. This is consistent with section 1703(i)(4).
    Paragraph (c) of Sec.  17.4120 will establish that payment rates
for services furnished in a highly rural area may exceed the
limitations set forth in Sec.  17.4120(a)-(b). VA will use the
authority in section 1703(i)(1) to establish rates for highly rural
areas, versus the authority in section 1703(i)(2)A. Section 17.4120(c)
will further establish that the term ``highly rural area'' means an
area located in a county that has fewer than seven individuals residing
in that county per square mile, consistent with the definition of
``highly rural area'' in section 1703(i)(2)(B). Section 17.4120(c) will
reflect VA's interpretation that imposing the limitations set forth in
Sec.  17.4120(a)-(b) may not be practicable for all services furnished
in highly rural areas. VA's assessment of practicability in Sec.
17.4120(c) is consistent with the authority in section 1703(i)(1),
which expressly provides that the payment limitations of that section
only apply ``to the extent practicable.'' VA may find that it is not
practicable to impose the payment limitations in Sec.  17.4120(a)-(b)
for services furnished in highly rural areas primarily because the
typical laws of supply and demand dictate that in highly rural areas,
the scarcity of health care providers and other health care resources
tends to create increased prices for delivery of health care services.
VA will not implement the more express statutory payment exception in
section 1703(i)(2)(A) for services furnished to individuals residing in
highly rural areas, because it would not be practicable to tie payment
rates to the location of a patient's residence as set forth in section
1703(i)(2)(A). We reiterate from above that a driver of increased cost
of services in highly rural areas relates to the location where the
services are provided, not necessarily to the location from which the
patient travels to receive the services. Indeed, it may not be accurate
that, in all cases, individuals who reside in highly rural areas are
receiving care and services in those same areas. Accordingly, VA does
not want to adopt a payment methodology that relies on the authority in
section 1703(i)(2)(A), as that that can universally permit payment of
higher rates to certain health care providers furnishing services in
other than highly rural areas. Attempting to tie payment rates to
particular patients, rather than setting general rates for particular
health care providers, would be administratively cumbersome and could
lead to selective acceptance of patients that would adversely affect
other patients. Using the authority in section 1703(i)(1) to establish
rates for highly rural areas, versus the authority in section
1703(i)(2)A), provides for more consistent and fair rate setting for
these areas.
    Paragraph (d) of Sec.  17.4120 will establish that VA may deviate
from the parameters set forth in Sec.  17.4120(a)-(c) when VA
determines that, based on patient needs, market analyses, health care
provider qualifications, or other factors, it is not practicable to
limit payments as will be dictated by application of Sec.  17.4120(a)-
(c). This general exception will be consistent with the provision in
section 1703(i)(1) that authorizes VA to pay at rates not to exceed the
Medicare rate ``to the extent practicable.'' Paragraph (d) will afford
VA the flexibility to ensure it can reach agreement with entities or
providers to furnish necessary services when factors that drive costs
may shift faster than established Medicare rates. This flexibility will
not be a guarantee of payments above applicable Medicare rates because
the introductory language in Sec.  17.4120 will establish that payment
rates are ultimately set forth in the terms of the agreement under
which the care and services are furnished. Such agreements will provide
for the relevant procedures and review process for any payments that
might utilize the exception in Sec.  17.4120(d), to ensure a consistent
level of VA oversight.
    Finally, paragraph (e) of Sec.  17.4120 will establish, consistent
with section 1703(i)(3), that payment rates for services furnished in
Alaska will not be subject to paragraphs (a) through (d).
Sec.  17.4125 Review of Veterans Care Agreements
    Section 17.4125 will establish basic parameters for VA to review
certain agreements that have been formed to determine if care and
services should be furnished through a contract or sharing agreement
instead, in accordance with the requirements in 38 U.S.C. 1703A(a)(2)
and (a)(3). Under Sec.  17.4125, VA will periodically review each
Veterans Care Agreement that exceeds $5,000,000 annually), to determine
if it is feasible and advisable to furnish the hospital care, medical
services, and extended care services that VA has furnished or
anticipates furnishing under such Veterans Care Agreements through a VA
facility, contract, or sharing agreement instead. If VA determines it
is feasible and advisable to provide any such hospital care, medical
services, or extended care services in a VA facility or by contract or
sharing agreement, it will take action to do so. The $5,000,000 amount
is established in section 1703A(a)(3) for extended care services, and
we believe that amount is reasonable to consider for agreements for
hospital care and medical services as well.
Sec.  17.4130 Discontinuation of Veterans Care Agreements
    Section 17.4130 will establish parameters for the discontinuation
of agreements, consistent with 38 U.S.C. 1703A(f). Paragraph (a) of
Sec.  17.4130 will establish that discontinuation of an agreement by an
entity or provider requires a written notice of request to discontinue
to be submitted to VA, in accordance with the terms of the VCA
[[Page 21673]]
and additional terms as established in Sec.  17.4130(a)(1) and (a)(2).
Paragraph (a)(1) will establish that the written notice must be
received by VA at least 45 calendar days before the intended
discontinuation date and must specify the discontinuation date, and
paragraph (a)(2) will state that the notice must be delivered to the
designated VA official to which such notice must be submitted under the
terms of the Veterans Care Agreement and in accordance with the terms
of the Veterans Care Agreement. Paragraphs (a)(1)-(2) will implement
section 1703A(f)(1), which requires VA to establish, through
regulations, time and notice requirements for an entity or provider to
discontinue an agreement. The 45-day notice requirement in advance of
discontinuation under Sec.  17.4130(a)(1) is consistent with the
discontinuation notice in current Choice Program provider agreements
and is familiar to entities and providers, and otherwise necessary to
ensure continuity of care should VA need to secure other health care
resources prior to an agreement being discontinued.
    Paragraph (b)(1) of Sec.  17.4130 will establish the parameters
under which VA may discontinue an agreement with an entity or provider,
to require a written notice of discontinuation to be submitted by VA to
the entity or provider, in accordance with the terms of the VCA and
additional terms as established in paragraphs (b)(1)(i) and (b)(1)(ii).
Paragraph (b)(1)(i) will establish that the written notice will be
issued by VA at least 45 calendar days before the intended
discontinuation date except as provided in paragraph (b)(1)(ii).
Paragraph (b)(1)(ii) will establish that notice may be issued fewer
than 45 calendar days before the discontinuation date, including notice
that is effective immediately upon issuance, when VA determines such
abbreviated or immediate notice is necessary to protect the health of
covered individuals or when such abbreviated or immediate notice is
permitted under the terms of the Veterans Care Agreement. Paragraph
(b)(1)(ii) of Sec.  17.4130 would provide for fewer than 45 days'
notice prior to discontinuation in certain circumstances, for two
reasons. First, VA must be able to discontinue an agreement without
advance notice in circumstances where doing so is necessary to protect
the health of covered individuals. Second, VA wants to retain the right
to discontinue with fewer than 45 days' notice under other
circumstances if the parties to an agreement negotiate terms permitting
such an approach. Paragraph (b)(2) of Sec.  17.4130 will establish that
the written notice will be delivered to the entity or provider in
accordance with the terms of the Veterans Care Agreement.
    Paragraph (b)(3) of Sec.  17.4130 will provide that VA may
discontinue an agreement for any reason that is expressly enumerated in
section 1703A(f)(2). These reasons are: (i) If the entity or provider
fails to comply substantially with the provisions of 38 U.S.C. 1703A or
38 CFR 17.4100-17.4135; (ii) if the entity or provider fails to comply
substantially with a provision of the agreement; (iii) if the entity or
provider is excluded from participating in a Federal health care
program or is identified on the System for Award Management exclusions
list; (iv) if VA ascertains that the entity or provider has been
convicted of a felony or other serious offense under Federal or State
law and their continued participation would be detrimental to the best
interest of the individuals receiving care or of VA; and (v) if VA
determines it is reasonable to terminate the agreement based on the
health care needs of the individual receiving care or services.
Sec.  17.4135 Disputes
    Section 17.4135 will establish administrative procedures and
requirements for eligible entities and providers to present disputes
arising under agreements, in accordance with 38 U.S.C. 1703A(h)(1).
Paragraph (a) of Sec.  17.4135 will generally establish the parameters
of these administrative procedures, consistent with section
1703A(h)(2)-(h)(4). Paragraph (a)(1) will more specifically establish
that, for purposes of Sec.  17.4135, a dispute means a disagreement
between VA and the entity or provider that entered into the subject
Veterans Care Agreement with VA that meets the following criteria: (i)
Pertains to one of the subject matters set forth in Sec.  17.4135(b)
(which, as explained later, are limited to claims for payment or scope
of authorizations); (ii) is not resolved informally by mutual agreement
of the parties; and (iii) culminates in one of the parties demanding or
asserting, as a matter of right, the payment of money in a sum certain
under the Veterans Care Agreement, the interpretation of the terms of
the Veterans Care Agreement or a specific authorization thereunder, or
other relief arising under or relating to the Veterans Care Agreement.
Paragraph (a)(1)(iii) will also clarify that a dispute does not
encompass any demand or assertion, as a matter of right, for penalties
or forfeitures prescribed by a statute or regulation that another
federal agency is specifically authorized to administer, settle, or
determine.
    Paragraph (a)(2) of Sec.  17.4135 will establish that the
procedures in Sec.  17.4135 should only be used when the parties to a
Veterans Care Agreement have failed to resolve an issue in controversy
by mutual agreement. This language will reinforce the characterization
in Sec.  17.4135(a)(1)(ii) that when the parties to an agreement are
working to informally resolve a matter by mutual agreement, those
actions and that process do not constitute a dispute within the meaning
of this section. In other words, the existence of this disputes process
does not preclude the parties to an agreement from working together to
mutually resolve any issues arising under or related to the agreement,
including issues pertaining to claims for payment, the scope of
authorizations, receipt or non-receipt of medical documentation by VA,
or simple clerical errors (such as a miscoding of a procedure by an
entity or provider).
    Paragraph (a)(3) of Sec.  17.4135 will establish that the dispute
procedures in Sec.  17.4135 constitute an entity or provider's
exclusive administrative remedies for disputes arising under
agreements, consistent with section 1703A(h)(2). We interpret section
1703A(h)(2) to shield disputes under agreements from the application of
any other administrative remedies that VA may use to adjudicate and/or
resolve disputes in other contexts, including application of
administrative requirements and procedures under 38 U.S.C. chapter 71
and 38 CFR part 19.
    Paragraph (a)(4) of Sec.  17.4135 will provide that disputes under
Sec.  17.4135 are not considered claims for purposes of such laws that
would otherwise require the application of 41 U.S.C. 7101-7109, also
known as the Contract Disputes Act of 1978, which is consistent with 38
U.S.C. 1703A(h)(4).
    Paragraph (a)(5) of Sec.  17.4135 will establish that an eligible
entity or provider must first exhaust the procedures further
established in Sec.  17.4135 before seeking judicial review under 28
U.S.C. 1346, consistent with 38 U.S.C. 1703A(h)(3).
    Paragraph (b) of Sec.  17.4135 will provide that disputes arising
under agreements may only pertain to: (1) The scope of one or more
specific authorizations under the applicable Veterans Care Agreement;
or (2) claims for payment under the applicable Veterans Care Agreement.
These limitations as to what may be disputed are consistent with
section 1703A(h)(4).
    Paragraph (c) of Sec.  17.4135 will establish procedures for
disputes arising
[[Page 21674]]
under agreements, specifically related to initiation and review of the
dispute, as well as issuance and effect of VA's decision. Paragraph
(c)(1) of Sec.  17.4135 will provide that (i) disputes must be
initiated by submitting a notice of dispute, in writing, to the
designated VA official to which notice must be submitted under the
terms of the Veterans Care Agreement and in accordance with the terms
of the Veterans Care Agreement, and (ii) the notice of dispute must
contain all specific assertions or demands, all facts pertinent to the
dispute, any specific resolutions or relief sought, and all information
and documentation necessary to review and adjudicate the dispute. The
information in Sec.  17.4135(c)(ii) is what is minimally required by VA
to assess the matter in dispute and issue a decision.
    Paragraph (c)(1)(iii) of Sec.  17.4135 will establish that the
notice of dispute must be received by the designated VA official to
which such notice must be submitted under the terms of the Veterans
Care Agreement and in accordance with the terms of the Veterans Care
Agreement, within 90 calendar days after the accrual of the dispute.
For purposes of Sec.  17.4135(c)(1)(iii), the accrual of the dispute is
the date when all events, that fix the alleged liability of either VA
or the entity or provider and permit the applicable demand(s) and
assertion(s), were known or should have been known. We believe 90 days
is a reasonable timeframe for entities or providers to submit disputes
to VA regarding claims for payment or scope of authorizations (based on
VA's experience, we believe entities or providers will seek to resolve
any disagreements regarding payment amounts much sooner). To clarify
when VA would determine a date certain to start the 90-day timeframe
under this accrual of dispute standard, Sec.  17.4135(c)(1)(iii) would
further establish that the term accrual of the dispute has the
following meanings in each of the two specific circumstances: (A) When
a dispute consists of an entity or provider asserting that VA has made
payment in an incorrect amount, under circumstances where VA has issued
a corresponding payment notice and the entity or provider has received
such notice, the accrual of the dispute is the date such notice was
received by the entity or provider; and (B) when a dispute consists of
an entity or provider asserting that VA has improperly denied payment
to which it is entitled, under circumstances where VA has issued a
corresponding denial of payment notice and the entity or provider has
received such notice, the accrual of the dispute is the date such
notice was received by the entity or provider. We believe that these
two circumstances will cover a vast majority of disputes, because,
under section 1703A(h)(4), disputes must pertain to claims for payment
or the scope of authorizations.
    Paragraph (c)(2) of Sec.  17.4135 will establish the scope of VA's
authority to decide and resolve disputes. Paragraph (c)(2)(i) will
establish that a VA official acting within the scope of authority
delegated by the Secretary of Veterans Affairs (hereafter referred to
in this section as the responsible VA official) will decide and resolve
disputes under this section. We believe that it is adequate to
reference such a VA official, versus a more specific job title or
position, to avoid a gap in our regulations should such titles or
positions be renamed or restructured in the future. Paragraph
(c)(2)(ii) will establish that the authority to decide or resolve
disputes under this section does not extend to the settlement,
compromise, payment, or adjustment of any claim for payment that
involves fraud or misrepresentation of fact. For purposes of Sec.
17.4135(c)(2)(ii), misrepresentation of fact means a false statement of
substantive fact, or any conduct which leads to the belief of a
substantive fact material to proper understanding of the matter in
hand, made with intent to deceive or mislead. If the responsible VA
official encounters evidence of misrepresentation of fact or fraud on
the part of the entity or provider, the responsible VA official shall
refer the matter to the agency official responsible for investigating
fraud and may refer the matter to other federal entities as
appropriate.
    Paragraph (c)(3) of Sec.  17.4135 will establish procedures related
to review of disputes and VA's decision in resolving disputes.
Paragraph (c)(3)(i) will establish that upon receipt of a notice of
dispute, the responsible VA official will review the dispute and all
facts pertinent to the dispute. Paragraph (c)(3)(ii) will further
establish that if the responsible VA official determines additional
information or documentation is required for review and adjudication of
the dispute, the official will, within 90 calendar days of VA's receipt
of the notice of dispute, provide written notice to both parties, in
accordance with the notice provisions of the Veterans Care Agreement,
that additional information or documentation is required for review and
adjudication of the dispute. Such notice will identify and request the
additional information and documentation deemed necessary to review and
adjudicate the dispute.
    Paragraph (c)(3)(iii) of Sec.  17.4135 will establish that upon VA
receipt of a notice of dispute that conforms to the requirements of
Sec.  17.4135(c)(1), the responsible VA official will take one of the
following actions within 90 calendar days, either: (A) Issue a written
decision, in accordance with the notice provisions of the Veterans Care
Agreement, that will include all information further described in Sec.
17.4135(c)(3)(iii)(A)(1)-(5); or (B) upon a determination that
additional time is required to issue a decision, provide written notice
in accordance with the notice provisions of the Veterans Care Agreement
of the time within which the decision will be issued. The determination
of the appropriate amount of additional time must be reasonable and
will take into account the complexity of the dispute and any other
relevant factors, and the total time will not exceed 150 calendar days.
Under Sec.  17.4135(c)(3)(iii)(B), if additional time is needed, the
responsible VA official will subsequently issue a written decision in
accordance with paragraph (c)(3)(iii)(A) of this section. Under 38
U.S.C. 1703(A)(h)(4), disputes must pertain to claims for payment or
the scope of authorizations. With regards to these timeframes of 90
days and 150 days that will be established in Sec.  17.4134(c)(3) as
described above, VA has extensive experience dealing with non-VA
providers regarding both payment and scope of authorizations, including
resolving discrepancies and disagreements outside of the new process in
section 1703(A)(h)(4) regarding amounts of payment, nonpayment, and
scope of authorizations. Based on that experience, VA is familiar with
the types of information and documentation necessary to resolve these
matters, and we have found that we can generally identify all such
information and documentation in fewer than 60 days after an issue is
first identified. However, to ensure we cover the potential for
unforeseen delays that may arise given the more formal nature of this
new disputes process (relative to how VA currently resolves similar
matters with non-VA community providers) VA has established a 90-day
timeframe. We believe 90 days is a prudent timeframe for VA to commit
to identifying information and documentation necessary to adjudicate
most disputes under this section. Section 17.4135(c)(3) will then
further provide for an additional 60 days, for a
[[Page 21675]]
total of 150 days, in what we expect to be the rare occurrence when the
90 days would not be sufficient. We determined that the 90 days and 150
days were reasonable by balancing uncertainties that may increase the
timeframe for VA to identify information under this process against the
interests of providers and entities that enter into VCAs in expeditious
processing and resolution of formal disputes under this section.
    Paragraph (c)(4) of Sec.  17.4135 will establish that VA will
furnish its decision on the dispute to the entity or provider by any
method that provides evidence of receipt. Such methods can include
electronic means.
    Paragraph (c)(5) of Sec.  17.4135 will establish that the written
decision issued by the responsible VA official constitutes VA's final
decision on the dispute. This language serves to clarify that VA
maintains no administrative process to appeal such a decision and to
emphasize the reality that, under section 1703A(h)(2), this disputes
process constitutes entities' and providers' exhaustive and exclusive
administrative remedy.
Administrative Procedure Act
    The Secretary of Veterans Affairs finds that there is good cause
under 5 U.S.C. 553(b)(B) and (d)(3) to dispense with the opportunity
for advance notice and opportunity for public comment and to publish
this rule with an immediate effective date. As previously stated in
this rulemaking, VA's contractual network of community providers as
will be required under section 1703(h), as added by section 101 of the
MISSION Act, will not be fully operational by June 6, 2019. Further,
section 143 of the MISSION Act amended section 101(p) of the Choice Act
to state that VA may not use the Choice Act to furnish care and
services after June 6, 2019. As a result, on that date, VA will no
longer be able to use Veterans Choice Program provider agreements. If
these regulations governing Veterans Care Agreements (VCAs) are not
legally effective prior to June 6, 2019, VA will not be able to use
such agreements to replace the Choice Program provider agreements. If
VA cannot use VCAs to replace Choice Program provider agreements, VA
will not be able to: (1) Fill gaps in coverage for the furnishing of
general care and services until the contractual network of community
providers is fully established, and (2) furnish certain specific care
and services that VA does not anticipate being secured through the
contractual network of community providers at least in the near future.
    Concerning gaps in coverage for general care and services until the
contractual network of community providers is fully established, VA has
been able to modify some of its current community care contracts for
expansion until the new network is fully functional. However, even
these expansions have not been able to absorb all existing Choice
Program provider agreements that are used within each of the 21
Veterans Integrated Service Networks (VISN) to secure care and services
outside of VA's community care contracts. Using data from April 2019,
there were over 22,000 Choice Program provider agreements still in
place across all VISNs. There is some disparity between VISNs regarding
use of Choice Program provider agreements, for instance VISN 8 had
3,809 outstanding Choice Provider Agreements while VISN 17 had only 71.
    Although continued efforts under current contract expansions as
well as continued development of the new contractual network might be
expected to absorb some of this outstanding volume of Choice Program
provider agreements, there will be coverage gaps across all VISN areas
nationwide if VCAs are not in place by June 6, 2019. VA uses Choice
Program provider agreements to purchase a myriad of care and services
for veterans in the community, all of which are clinically necessary.
If VCAs are not in place to furnish these care and services when the
authority for these provider agreements lapses, this care will not be
furnished and veterans could be harmed. This would be especially true
for treatment of certain diseases such as cancer that require
continuous and uninterrupted care and monitoring on an immediate and
stringent schedule upon diagnosis. Similarly, the health and safety of
individuals receiving mental health treatment would be at risk if
continuity of care were not maintained to ensure, for instance,
retention of current mental health professionals already providing
these services.
    In addition to the general gaps in coverage as described above as
VA works to expand its contracted network of care, there are specific
care and services that are explicitly excluded from VA's current
community care contracts that are in place as of the date of
publication of this rulemaking (to include the expansions mentioned
above) and that will not be covered by the new contracted network
immediately after June 6, 2019. These services include unskilled home
health services as well as dental care, and these services would simply
stop being furnished to affected veterans on June 6, 2019 unless a VCA
was in place to furnish them. Based on VA's experience, home health
providers that are parties to the Choice Program provider agreements
are typically unwilling to enter into a conventional procurement
contract subject to the Federal Acquisition Regulation (FAR). For
instance, home health care services are typically furnished by small
providers serving a limited number of individuals, and it is VA's
understanding in dealing with such providers for many years that being
subject to Federal contractor obligations dis-incentivizes their
participation in VA community care, resulting in the possibility of
significant disruptions in the provision of home health care services
to VA beneficiaries.
    Veterans in receipt of these services represent a vulnerable
population because they require assistance to retain their highest
level of functioning in the least restrictive environment (their home)
as possible, often avoiding a higher level of institutionalized care
that is not yet needed by the veteran. Should such home health services
stop, then VA could reasonably expect the health conditions of affected
veterans to worsen, which could more rapidly necessitate the veteran
requiring institutionalized care. For instance, veterans often receive
home health aide services to assist them to properly take their
prescribed medications. Should these services cease, there would be
clear and unavoidable negative health outcomes for these veterans.
Because institutionalized care in this type of scenario would be
required due to an absence of home health care, and not necessarily due
to the veteran's otherwise progressive and actual need for a higher
level of service, such institutionalized care would not likely be
supporting optimal clinical outcomes and would also be furnished at a
much greater cost to VA.
    Using dental services as another example, VCAs are needed to ensure
there are not lapses in the provision of medically necessary dental
care that is furnished under Choice Program provider agreements.
Without proper oral hygiene and dental care, bacteria in the mouth can
reach levels that might lead to oral infections, such as tooth decay
and gum disease. In addition, certain medications--such as
decongestants, antihistamines, painkillers, diuretics and
antidepressants--can reduce saliva flow, where saliva washes away food
and neutralizes acids produced by bacteria in the mouth and helps
protect from microbial invasion or overgrowth that might lead to gum
disease. Dental
[[Page 21676]]
care is critical to ensure monitoring or treatment of oral inflammation
or infection that can be associated with overgrowth of oral bacterial,
where this inflammation or infection can negatively impact a person's
overall health and has been linked to specific diseases. For instance,
endocarditis is an infection of the inner lining of your heart
(endocardium), which typically occurs when bacteria or other germs from
another part of your body, such as your mouth, spread through your
bloodstream and attach to damaged areas in your heart. More generally,
heart disease, clogged arteries and stroke might be linked to the
inflammation and infections that oral bacteria can cause. Lastly,
periodontitis (severe gum disease) has been linked to premature birth
and low birth weight.
    The lack of full coverage for general care and services that cannot
be absorbed under the current contract expansions until the contractual
network of providers is fully functional, and the lack of coverage for
certain specific services that are excluded under VA's current
community care contracts (to include expansions) and where some
providers may not enter into the new contractual network of providers
in the future, will create disruptions in the provision of care and
services if VCAs are not in place prior to June 6, 2019. VA reviewed
data from October 2017 through August 2018 and determined that there
were more than 183,000 unique patients that were furnished VA community
care under Choice provider agreements. Two predominant categories of
care that have briefly been discussed for which these provider
agreements have been used are home health services (with roughly 53,659
unique patients affected) and dental care (with roughly 24,846 unique
patients affected). Although VA cannot predict with certainty that this
same number of individuals will continue to require care under a
Veterans Care Agreement, VA expects that a significant number of
patients will require care and services under such agreements.
Considering the risk to disrupting the furnishing of care for
individuals who will need to receive care and services under VCAs, it
is impracticable and contrary to the public interest to provide advance
notice and opportunity to comment on these regulations, as this would
considerably reduce the likelihood that VA will successfully transition
away from the use of the current Choice provider agreements ahead of
June 6, 2019.
    The Secretary of Veterans Affairs finds there is good cause under 5
U.S.C. 553(b)(B) and (d)(3) to publish this rule with an immediate
effective date, prior to the usual 30-day delay for an interim final
rule to allow VA to begin entering into agreements immediately. This
timeline is necessary to avoid potential gaps in community care
because, for the reasons discussed above, entering into a broad array
of agreements authorized under section 1703A, in advance of June 6,
2019, will be critical for the purposes of filling gaps in care
coverage until the new contractual network is fully functional and
ensuring VA has replacement instruments in place for specific care and
services currently provided under Choice provider agreements with those
entities and providers that are unwilling or unable to enter into
conventional procurement contracts. Any further delay in the effective
date of this rulemaking would substantially increase the risk that VA
will be unable to enter into agreements in the timeframes necessary to
fully achieve those purposes and mitigate or eliminate risk of
significant disruptions to eligible individuals receiving community
care.
    For the above reasons, the Secretary issues this rule as an interim
final rule with an immediate effective date. However, VA will consider
and address comments that are received within 60 days of the date this
interim final rule is published in the Federal Register.
Effect of Rulemaking
    The Code of Federal Regulations, as revised by this rulemaking,
will represent the exclusive legal authority on this subject. No
contrary rules or procedures will be authorized. All VA guidance will
be read to conform with this rulemaking if possible or, if not
possible, such guidance will be superseded by this rulemaking.
Paperwork Reduction Act
    The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires
that VA consider the impact of paperwork and other information
collection burdens imposed on the public. Except for emergency
approvals under 44 U.S.C. 3507(j), VA may not conduct or sponsor, and a
person is not required to respond to, a collection of information
unless it displays a currently valid OMB control number. VA has
requested that OMB approve the collection of information on an
emergency basis. This interim final rule includes provisions
constituting new collections of information under the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501-3521) that require approval by
the Office of Management and Budget (OMB). Accordingly, under 44 U.S.C.
3507(d), VA has submitted a copy of this rulemaking to OMB for review.
    OMB assigns control numbers to collections of information it
approves. VA may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid OMB control number. Proposed Sec. Sec.  17.4110,
17.4130, and 17.4135 contain collections of information under the
Paperwork Reduction Act of 1995. If OMB does not approve the
collections of information as requested, VA will immediately remove the
provisions containing a collection of information or take such other
action as is directed by OMB.
    Comments on the collections of information contained in this
interim final rule should be submitted to the Office of Management and
Budget, Attention: Desk Officer for the Department of Veterans Affairs,
Office of Information and Regulatory Affairs, Washington, DC 20503,
with copies sent by mail or hand delivery to the Director, Office of
Regulation Policy and Management (00REG), Department of Veterans
Affairs, 810 Vermont Avenue NW, Room 1063B, Washington, DC 20420; fax
to (202) 273-9026; or through www.Regulations.gov. Comments should
indicate that they are submitted in response to ``RIN 2900-AQ45
Veterans Care Agreements.''
    OMB is required to make a decision concerning the collections of
information contained in this proposed rule between 30 and 60 days
after publication of this document in the Federal Register. Therefore,
a comment to OMB is best assured of having its full effect if OMB
receives it within 30 days of publication. This does not affect the
deadline for the public to comment on the proposed rule.
    VA considers comments by the public on proposed collections of
information in--
     Evaluating whether the proposed collections of information
are necessary for the proper performance of the functions of VA,
including whether the information will have practical utility;
     Evaluating the accuracy of VA's estimate of the burden of
the proposed collections of information, including the validity of the
methodology and assumptions used;
     Enhancing the quality, usefulness, and clarity of the
information to be collected; and
     Minimizing the burden of the collections of information on
those who are to respond, including through the use of appropriate
automated, electronic, mechanical, or other technological collection
techniques or other forms of information technology,
[[Page 21677]]
e.g., permitting electronic submission of responses.
    The collections of information contained in the amendments to title
38 CFR part 17 are described immediately following this paragraph,
under their respective titles. As discussed in the regulatory impact
analysis, VA believes that the net impact of the reorganization of the
collections of information is likely to be regulatory under E.O. 13771.
For each of the new or proposed collections of information below, VHA
used general wage data from the Bureau of Labor Statistics (BLS) to
estimate the respondents' costs associated with completing the
information collection. According to the latest available BLS data, the
mean hourly wage of full-time wage and salary workers was $15.57 based
on the BLS wage code--``31-1000 Healthcare Support Occupations.'' This
information was taken from the following website: https://www.bls.gov/oes/current/oes_nat.htm (May 2018). This wage code was chosen because
it represents most closely the types of providers likely to submit this
information themselves, or those support occupations that will submit
the information for such providers.
    Title: Submission of information for application for certification.
    OMB Control No.: 2900-xxxx (New).
    CFR Provision: 38 CFR 17.4110.
    Summary of collection of information: Proposed Sec.  17.4110
requires eligible entities and providers to submit to VA information
concerning applicable medical licenses, as well as other information as
requested by VA to evaluate eligibility for certification.
    Description of the need for information and proposed use of
information: The information collection is authorized under 38 U.S.C.
1703A(c) and is necessary for and would be used to verify that non-VA
entities and providers that are applying for certification--and, hence,
the opportunity to furnish hospital care and medical services to
covered veterans under a Veterans Care Agreement--meet basic standards
to ensure patient safety.
    Description of likely respondents: Eligible entities or providers
furnishing care and services through the Veterans Community Care
Program.
    Average estimated number of respondents per year: (32,181 eligible
entities or providers in year 1; 8,850 eligible entities or providers
in year 2; 4,425 eligible entities or providers in year 3)/3 = 15,152.
    Estimated frequency of responses per year: 1 time annually.
    Estimated average burden per response: 5 minutes.
    Estimated total annual reporting and recordkeeping burden: 1,263
hours.
    Estimated cost to respondents per year: VHA estimates the total
cost to all respondents to be $19,664.91 per year (1,263 burden hours x
$15.57 per hour).
    Title: Submission of notice to discontinue a Veterans Care
Agreement.
    OMB Control No.: 2900-xxxx (New).
    CFR Provision: 38 CFR 17.4130.
    Summary of collection of information: Proposed Sec.  17.4130
requires eligible entities and providers to submit to VA a written
notice of intent to discontinue a Veterans Care Agreement prior to the
date of such discontinuation.
    Description of the need for information and proposed use of
information: The information collection is authorized under 38 U.S.C.
1703A(f)(1) and is necessary for and would be used to provide VA with
adequate advance notice when an entity or provider intends to
discontinue an agreement, for purposes of ensuring continuity of care.
    Description of likely respondents: Eligible entities or providers
furnishing care and services through the Veterans Community Care
Program.
    Estimated number of respondents per year: 152 eligible entities or
providers (1% of average annual number of entities and providers
estimated to be certified per year).
    Estimated frequency of responses per year: 1 time per year.
    Estimated average burden per response: 10 minutes.
    Estimated total annual reporting and recordkeeping burden: 25
hours.
    Estimated cost to respondents per year: VHA estimates the total
cost to all respondents to be $389.25 per year (25 burden hours x
$15.57 per hour).
    Title: Submission of notices of dispute.
    OMB Control No.: 2900-xxxx (New).
    CFR Provision: 38 CFR 17.4135.
    Summary of collection of information: Proposed Sec.  17.4135
requires eligible entities and providers to submit to VA written
notices of dispute that contain specific information to allow VA to
assess and resolve the matter in dispute.
    Description of the need for information and proposed use of
information: The information collection is authorized under 38 U.S.C.
1703A(h) and is necessary for and would be used to permit VA to collect
the minimally necessary information to assess and resolve matters in
dispute.
    Description of likely respondents: Eligible entities or providers
furnishing care and services through the Veterans Community Care
Program.
    Estimated number of respondents per year: 803 eligible entities or
providers (5% of average annual number of entities and providers
estimated to be certified per year).
    Estimated frequency of responses per year: 1 time per year.
    Estimated average burden per response: 20 minutes.
    Estimated total annual reporting and recordkeeping burden: 268
hours.
    Estimated cost to respondents per year: VHA estimates the total
cost to all respondents to be $4,172.76 per year (268 burden hours x
$15.57 per hour).
Regulatory Flexibility Act
    The Regulatory Flexibility Act, 5 U.S.C. 601-612, is not applicable
to this rulemaking because notice of proposed rulemaking is not
required. 5 U.S.C. 601(2), 603(a), 604(a).
Executive Orders 12866, 13563 and 13771
    Executive Orders 12866 and 13563 direct agencies to assess the
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 effects, and other advantages; distributive impacts;
and equity). Executive Order 13563 (Improving Regulation and Regulatory
Review) emphasizes the importance of quantifying both costs and
benefits, reducing costs, harmonizing rules, and promoting flexibility.
Executive Order 12866 (Regulatory Planning and Review) defines a
``significant regulatory action,'' which requires review by OMB, as
``any 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 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 this Executive
Order.''
    VA has examined the economic, interagency, budgetary, legal, and
policy implications of this regulatory action and determined that the
action is a significant regulatory action under Executive Order 12866,
because it raises novel legal or policy issues arising out
[[Page 21678]]
of legal mandates, the President's priorities, or the principles set
forth in this Executive Order. VA's impact analysis can be found as a
supporting document at http://www.regulations.gov, usually within 48
hours after the rulemaking document is published. Additionally, a copy
of the rulemaking and its impact analysis are available on VA's website
at http://www.va.gov/orpm by following the link for VA Regulations
Published from FY 2004 through FYTD.
    This interim final rule is considered an E.O. 13771 regulatory
action. Details on the estimated costs of this interim final rule can
be found in the rule's economic analysis. VA has determined that the
net costs are $7.4 million over a five-year period (FY2019-FY2023) and
$656,053.56 per year on an ongoing basis discounted at 7 percent
relative to year 2016, over a perpetual time horizon.
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 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. This interim final rule will have no such
effect on State, local, and tribal governments, or on the private
sector.
Catalog of Federal Domestic Assistance
    The Catalog of Federal Domestic Assistance numbers and titles for
the programs affected by this document are as follows: 64.009, Veterans
Medical Care Benefits; and 64.018, Sharing Specialized Medical
Resources.
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.
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. Robert L.
Wilkie, Secretary, Department of Veterans Affairs, approved this
document on March 7, 2019, for publication.
    Dated: May 10, 2019.
Consuela Benjamin,
Regulations Development Coordinator, Office of Regulation Policy &
Management, Office of the Secretary, Department of Veterans Affairs.
    For the reasons set forth in the preamble, we amend 38 CFR part 17
as follows:
PART 17--MEDICAL
0
1. The general authority citation for part 17 continues, and an
authority for section 17.4100 et seq. is added, to read as follows:
    Authority: 38 U.S.C. 501, and as noted in specific sections.
* * * * *
    Section 17.4100 et seq. is also issued under 38 U.S.C. 1703A.
0
2. Add an undesignated center heading and Sec. Sec.  17.4100 through
17.4135 to read as follows:
Veterans Care Agreements
Sec.
17.4100 Definitions.
17.4105 Purpose and scope.
17.4110 Entity or provider certification.
17.4115 VA use of Veterans Care Agreements.
17.4120 Payment rates.
17.4125 Review of Veterans Care Agreements.
17.4130 Discontinuation of Veterans Care Agreements.
17.4135 Disputes.
Sec.  17.4100  Definitions.
    For the purposes of Sec. Sec.  17.4100 through 17.4135, the
following definitions apply:
    Contract is any of the following: Federal procurement agreements
regulated by the Federal Acquisition Regulation; common law contracts;
other transactions; or any other instrument. Veterans Care Agreements
are excluded from this definition.
    Covered individual is an individual who is eligible to receive
hospital care, medical services, or extended care services from a non-
VA provider under title 38 U.S.C. and title 38 CFR.
    Extended care services are the services described in 38 U.S.C.
1710B(a).
    Hospital care is defined in 38 U.S.C. 1701(5).
    Medical services is defined in 38 U.S.C. 1701(6).
    Sharing agreement is an agreement, under statutory authority other
than 38 U.S.C. 1703A, by which VA can obtain hospital care, medical
services, or extended care services for a covered individual.
    VA facility is a point of VA care where covered individuals can
receive hospital care, medical services, or extended care services, to
include a VA medical center, a VA community-based outpatient clinic, a
VA health care center, a VA community living center, a VA independent
outpatient clinic, and other VA outpatient services sites.
    Veterans Care Agreement is an agreement authorized under 38 U.S.C.
1703A for the furnishing of hospital care, medical services, or
extended care services to covered individuals.
Sec.  17.4105  Purpose and Scope.
    (a) Purpose. Sections 17.4100 through 17.4135 implement 38 U.S.C.
1703A, as required under section 1703A(j). Section 1703A authorizes VA
to enter into and utilize Veterans Care Agreements to furnish hospital
care, medical services, and extended care services to a covered
individual when such individual is eligible for and requires such care
or services that are not feasibly available to the covered individual
through a VA facility, a contract, or a sharing agreement.
    (b) Scope. Sections 17.4100 through 17.4135 contain procedures,
requirements, obligations, and limitations for: The process of
certifying entities or providers under 38 U.S.C. 1703A; entering into,
administering, furnishing care or services pursuant to, and
discontinuing Veterans Care Agreements; and all disputes arising under
or related to Veterans Care Agreements. Sections 17.4100 through
17.4135 apply to all entities and providers, where applicable, that are
parties to a Veterans Care Agreement, participate in the certification
process, or furnish hospital care, medical services, or extended care
services pursuant to a Veterans Care Agreement.
Sec.  17.4110  Entity or provider certification.
    (a) General. To be eligible to enter into a Veterans Care
Agreement, an entity or provider must be certified by VA in accordance
with the process and criteria established in paragraph (b) of this
section. Additionally, an entity or provider must be actively certified
while furnishing hospital care, medical services, or extended care
services pursuant to a Veterans Care Agreement that the entity or
provider has entered into with VA.
    (b) Process and criteria--(1) Application for certification. An
entity
[[Page 21679]]
or provider must apply for certification by submitting the following
information and documentation to VA:
    (i) Documentation of applicable medical licenses; and
    (ii) All other information and documentation required by VA. This
information and documentation may include, but is not limited to,
provider first and last names, legal business names, National Provider
Identifier (NPI), NPI type, provider identifier type (e.g., individual
or group practice), tax identification number, specialty (taxonomy
code), business address, billing address, phone number, and care site
address.
    (2) Approval or denial of certification. (i) VA will review all
information obtained by VA, including through applicable federal and
state records systems and as submitted by the applicant, and will
determine eligibility for certification.
    (ii) An applicant must submit all information required under
paragraph (b)(1) of this section.
    (iii) VA will deny an application for certification if VA
determines that the entity or provider is excluded from participation
in a Federal health care program (as defined in section 1128B(f) of the
Social Security Act (42 U.S.C. 1320a-7b(f)) under section 1128 or 1128A
of such Act (42 U.S.C. 1320a-7 and 1320a-7a) or is identified as an
excluded source on the System for Award Management Exclusions list
described in part 9 of title 48, Code of Federal Regulations, and part
180 of title 2 of such Code, or successor regulations.
    (iv) VA will deny an application for certification if VA determines
that the applicant is already barred from furnishing hospital care,
medical services, and extended care services under chapter 17 of title
38, U.S.C., because VA has previously determined the applicant
submitted to VA a fraudulent claim, as that term is defined in 38
U.S.C. 1703D(i)(4), for payment for hospital care, medical services, or
extended care services.
    (v) VA may deny an application for certification if VA determines
that based on programmatic considerations, VA is unlikely to seek to
enter into a Veterans Care Agreement with the applicant.
    (vi) VA will issue a decision approving or denying an application
for certification within 120 calendar days of receipt of such
application, if practicable. Notices of approval will set forth the
effective date and duration of the certification. Notices of denial
will set forth the specific grounds for denial and supporting evidence.
A denial constitutes VA's final decision on the application.
    (3) Duration of certification and application for recertification.
(i) An entity or provider's certification under this section lasts for
a three-year period, unless VA revokes certification during that three-
year period pursuant to paragraph (b)(4) of this section.
    (ii) A certified entity or provider must maintain its eligibility
throughout the period in which it is certified and must inform VA of
any changes or events that would affect its eligibility within 30
calendar days of the change or event.
    (iii) A certified entity or provider seeking certification after
the end of its current three-year certification must apply for
recertification at least 60 calendar days prior to the expiration of
its current certification; otherwise, the procedures set forth in
paragraph (b)(3)(iv) of this section will apply. Upon application for
recertification by the entity or provider, including submitting any new
or updated information within the scope of paragraph (b)(1) of this
section that VA requests in conjunction with such application for
recertification, VA will reassess the entity or provider under the
criteria in paragraph (b)(2) of this section. VA will issue a decision
approving or denying the application for recertification within 60
calendar days of receiving the application, if practicable. Notice of
the decision will be furnished to the applicant in writing. Notices of
recertification will set forth the effective date and duration of the
certification. Notices of denial will set forth the specific grounds
for denial and supporting evidence. A denial constitutes VA's final
decision on the application for recertification.
    (iv) If a certified entity or provider applies for recertification
after the deadline in paragraph (b)(3)(iii) of this section, such
application will constitute a new application for certification and
will be processed in accordance with paragraphs (b)(1) and (2) of this
section.
    (4) Revocation of certification--(i) Standard for revocation. VA
may revoke an entity's or provider's certification in accordance with
paragraphs (b)(2)(ii) through (v) of this section.
    (ii) Notice of proposed revocation. When VA determines revocation
is appropriate, VA will notify the entity or provider in writing of the
proposed revocation. The notice of proposed revocation will set forth
the specific grounds for the action and will notify the entity or
provider that it has 30 calendar days from the date of issuance to
submit a written response addressing either of the following:
    (A) Documenting compliance and proving any grounds false, or
    (B) Providing information and documentation that demonstrates the
entity or provider has, subsequent to the notice of proposed
revocation, achieved compliance with all criteria for certification set
forth in paragraph (b)(2) of this section.
    (iii) Decision to revoke. Following the 30-day response period, VA
will consider any information and documentation submitted by the entity
or provider and will, within 30 calendar days, determine whether
revocation is warranted. If VA determines that revocation is not
warranted, VA will notify the entity or provider of that determination
in writing. If VA determines that revocation is warranted, the entity
or provider will immediately lose certified status, and VA will issue a
notice of revocation to the entity or provider. Notices of revocation
will set forth the specific facts and grounds for, and the effective
date of, such revocation. A notice of revocation constitutes VA's final
decision.
    (iv) Effect of revocation. Revocation of certification results in
such status being rendered void, and the provider or entity may not
furnish services or care to a covered individual under a Veterans Care
Agreement prior to applying for and obtaining certified VCA status.
(The information collection requirements have been submitted to the
Office of Management and Budget (OMB) and are pending OMB approval.)
Sec.  17.4115  VA use of Veterans Care Agreements.
    (a) Criteria for using. VA may furnish hospital care, medical
services, or extended care services through a Veterans Care Agreement
only if:
    (1) Such care or services are furnished to a covered individual who
is eligible for such care or services under 38 U.S.C. chapter 17 and
requires such care or services; and
    (2) Such care or services are not feasibly available to that
covered individual through a VA facility, contract, or sharing
agreement. For purposes of this subparagraph, hospital care, medical
services, or extended care services are not feasibly available through
a VA facility, contract, or sharing agreement when VA determines that
the medical condition of the covered individual, the travel involved,
the nature of the care or services, or a combination of these factors
make the use of a VA facility, contract, or sharing agreement
impracticable or inadvisable.
    (b) Standards of conduct and improper business practices--(1)
[[Page 21680]]
General. (i) Government business shall be conducted in a manner above
reproach and, except as authorized by statute or regulation, with
complete impartiality and with preferential treatment for none.
Transactions relating to the expenditure of public funds require the
highest degree of public trust and an impeccable standard of conduct.
The general rule is to avoid strictly any conflict of interest or even
the appearance of a conflict of interest in Government-contractor
relationships. The conduct of Government personnel must be such that
they would have no reluctance to make a full public disclosure of their
actions.
    (ii) VA officials and employees are reminded that there are other
statutes and regulations that deal with prohibited conduct, including:
    (A) The offer or acceptance of a bribe or gratuity is prohibited by
18 U.S.C. 201. The acceptance of a gift, under certain circumstances,
is prohibited by 5 U.S.C. 7353, and 5 CFR part 2635;
    (B)(1) Certain financial conflicts of interest are prohibited by 18
U.S.C. 208 and regulations at 5 CFR part 2635.
    (2) Contacts with an entity or provider that is seeking or receives
certification under section 17.4110 of this part or is seeking, enters
into, and/or furnishes services or care under a Veterans Care Agreement
may constitute ``seeking employment,'' (see Subpart F of 5 CFR part
2635). Government officers and employees (employees) are prohibited by
18 U.S.C. 208 and 5 CFR part 2635 from participating personally and
substantially in any particular matter that would affect the financial
interests of any person from whom the employee is seeking employment.
An employee who engages in negotiations or is otherwise seeking
employment with an offeror or who has an arrangement concerning future
employment with an offeror must comply with the applicable
disqualification requirements of 5 CFR 2635.604 and 2635.606. The
statutory prohibition in 18 U.S.C. 208 also may require an employee's
disqualification from participation in matters pertaining to the
certification of an entity or provider or a entering into and
administering a Veterans Care Agreement with an entity or provider even
if the employee's duties may not be considered ``participating
personally and substantially'';
    (C) Post-employment restrictions are covered by 18 U.S.C. 207 and 5
CFR part 2641, that prohibit certain activities by former Government
employees, including representation of an entity or provider before the
Government in relation to any particular matter involving specific
parties on which the former employee participated personally and
substantially while employed by the Government. Additional restrictions
apply to certain senior Government employees and for particular matters
under an employee's official responsibility; and
    (D) Using nonpublic information to further an employee's private
interest or that of another and engaging in a financial transaction
using nonpublic information are prohibited by 5 CFR 2635.703.
    (2) Standards and requirements for entities or providers that enter
into Veterans Care Agreements. An entity or provider that enters into a
Veterans Care Agreement must comply with the following standards and
requirements throughout the term of the Veterans Care Agreement:
    (i) Must have a satisfactory performance record.
    (ii) Must have a satisfactory record of integrity and business
ethics.
    (iii) Must notify VA within 30 calendar days of the existence of an
indictment, charge, conviction, or civil judgment, or Federal tax
delinquency in an amount that exceeds $3,500.
    (iv) Must not engage in any of the following:
    (A) Commission of fraud or a criminal offense in connection with--
    (1) Obtaining;
    (2) Attempting to obtain; or
    (3) Performing a public contract or subcontract, or a Veterans Care
Agreement;
    (B) Violation of Federal or State antitrust statutes relating to
the submission of offers;
    (C) Commission of embezzlement, theft, forgery, bribery,
falsification or destruction of records, making false statements, tax
evasion, violating Federal criminal tax laws, or receiving stolen
property;
    (D) Delinquent Federal taxes in an amount that exceeds $3,500.
Federal taxes are considered delinquent for purposes of this provision
if both of the following criteria apply:
    (1) The tax liability is finally determined. The liability is
finally determined if it has been assessed and all available
administrative remedies and rights to judicial review have been
exhausted or have lapsed.
    (2) The taxpayer is delinquent in making payment. A taxpayer is
delinquent if the taxpayer has failed to pay the tax liability when
full payment was due and required. A taxpayer is not delinquent in
cases where enforced collection action is precluded.
    (E) Knowing failure by a principal, until 3 years after final
payment on any Government contract awarded to the contractor (or any
Veterans Care Agreement entered into with the entity or provider), to
timely disclose to the Government, in connection with the award or
agreement, performance, or closeout of the contract or agreement or a
subcontract thereunder, credible evidence of--
    (1) Violation of Federal criminal law involving fraud, conflict of
interest, bribery, or gratuity violations found in Title 18 of the
United States Code;
    (2) Violation of the civil False Claims Act (31 U.S.C. 3729-3733);
or
    (3) Significant overpayment(s) on the contract or Veterans Care
Agreement, other than overpayments resulting from contract financing
payments. Contract financing payments means an authorized Government
disbursement of monies to a contractor prior to acceptance of supplies
or services by the Government; or
    (F) Commission of any other offense indicating a lack of business
integrity or business honesty that seriously and directly affects the
present responsibility of an entity or provider.
    (v) Must not submit to VA a fraudulent claim, as that term is
defined in 38 U.S.C. 1703D(i)(4), for payment for hospital care,
medical services, or extended care services.
Sec.  17.4120   Payment rates.
    The rates paid by VA for hospital care, medical services, and
extended care services (hereafter in this section referred to as
``services'') furnished pursuant to a Veterans Care Agreement will be
the rates set forth in the price terms of the Veterans Care Agreement.
Each Veterans Care Agreement will contain price terms for all services
within its scope. Such payment rates will comply with the following
parameters:
    (a) Except as otherwise provided in this section, payment rates
will not exceed the applicable Medicare fee schedule or prospective
payment system amount (hereafter in this section referred to as
``Medicare rate''), if any, for the period in which the service was
provided (without any changes based on the subsequent development of
information under Medicare authorities).
    (b) With respect to services furnished in a State with an All-Payer
Model Agreement under section 1814(b)(3) of the Social Security Act (42
U.S.C. 1395f(b)(3)) that became effective on or after January 1, 2014,
the Medicare rate under paragraph (a) will be calculated based on the
payment rates under such agreement.
    (c) Payment rates for services furnished in a highly rural area may
[[Page 21681]]
exceed the limitations set forth in paragraphs (a) and (b) of this
section. The term ``highly rural area'' means an area located in a
county that has fewer than seven individuals residing in that county
per square mile.
    (d) Payment rates may deviate from the parameters set forth in
paragraphs (a) through (c) of this section when VA determines, based on
patient needs, market analyses, health care provider qualifications, or
other factors, that it is not practicable to limit payment for services
to the rates available under paragraphs (a) through (c).
    (e) Payment rates for services furnished in Alaska are not subject
to paragraphs (a) through (d) of this section.
Sec.  17.4125   Review of Veterans Care Agreements.
    VA will periodically review each Veterans Care Agreement that
exceeds $5,000,000 annually, to determine if it is feasible and
advisable to furnish the hospital care, medical services, and extended
care services that VA has furnished or anticipates furnishing under
such Veterans Care Agreements through a VA facility, contract, or
sharing agreement instead. If VA determines it is feasible and
advisable to provide any such hospital care, medical services, or
extended care services in a VA facility or by contract or sharing
agreement, it will take action to do so.
Sec.  17.4130   Discontinuation of Veterans Care Agreements.
    (a) Discontinuation of the agreement by the entity or provider
requires a written notice of request to discontinue, in accordance with
the terms of the Veterans Care Agreement and the following notice
requirements:
    (1) Written notice must be received by VA at least 45 calendar days
before the discontinuation date and must specify the discontinuation
date; and
    (2) Such notice must be delivered to the designated VA official to
which such notice must be submitted under the terms of the Veterans
Care Agreement, and the notice and delivery must comply with all terms
of the Veterans Care Agreement.
    (b)(1) Discontinuation of the agreement by VA requires a written
notice of discontinuation to the entity or provider in accordance with
the terms of the Veterans Care Agreement and the following notice
standards:
    (i) Written notice of discontinuation will be issued at least 45
calendar days before the discontinuation date, except as provided in
subparagraph (ii).
    (ii) Notice may be issued fewer than 45 calendar days before the
discontinuation date, including notice that is effective immediately
upon issuance, when VA determines such abbreviated or immediate notice
is necessary to protect the health of covered individuals or when such
abbreviated or immediate notice is permitted under the terms of the
Veterans Care Agreement.
    (2) Notice will be delivered to the entity or provider in
accordance with the terms of the Veterans Care Agreement.
    (3) VA may discontinue a Veterans Care Agreement for the following
reasons:
    (i) If VA determines the entity or provider failed to comply
substantially with the provisions of 38 U.S.C. 1703A or 38 CFR 17.4100-
17.4135
    (ii) If VA determines the entity or provider failed to comply
substantially with the provisions, terms, or conditions of the Veterans
Care Agreement;
    (iii) If VA determines the entity or provider is excluded from
participation in a Federal health care program (as defined in section
1128B(f) of the Social Security Act (42 U.S.C. 1320a-7b(f)) under
section 1128 or 1128A of such Act (42 U.S.C. 1320a-7 and 1320a-7a), or
is identified as an excluded source on the System for Award Management
Exclusions list described in part 9 of title 48, Code of Federal
Regulations, and part 180 of title 2 of such Code, or successor
regulations;
    (iv) If VA ascertains that the entity or provider has been
convicted of a felony or other serious offense under federal or state
law and determines that discontinuation of the Veterans Care Agreement
would be in the best interest of a covered individual or VA; or
    (v) If VA determines it is reasonable to discontinue the Veterans
Care Agreement based on the health care needs of a covered individual.
(The information collection requirements have been submitted to the
Office of Management and Budget (OMB) and are pending OMB approval.)
Sec.  17.4135   Disputes.
    (a) General. (1) This section establishes the administrative
procedures and requirements for asserting and resolving disputes
arising under or related to a Veterans Care Agreement. For purposes of
this section, a dispute means a disagreement, between VA and the entity
or provider that entered into the subject Veterans Care Agreement with
VA, that meets the following criteria:
    (i) Pertains to one of the subject matters set forth in paragraph
(b) of this section;
    (ii) Is not resolved informally by mutual agreement of the parties;
and
    (iii) Culminates in one of the parties demanding or asserting, as a
matter of right, the payment of money in a sum certain under the
Veterans Care Agreement, the interpretation of the terms of the
Veterans Care Agreement or a specific authorization thereunder, or
other relief arising under or relating to the Veterans Care Agreement.
However, a dispute does not encompass any demand or assertion, as a
matter of right, for penalties or forfeitures prescribed by a statute
or regulation that another federal agency is specifically authorized to
administer, settle, or determine.
    (2) The procedures established in this section should only be used
when the parties to a Veterans Care Agreement have failed to resolve an
issue in controversy by mutual agreement.
    (3) The procedures established in this section constitute an
entity's or provider's exclusive administrative remedy for disputes
under this section.
    (4) Disputes under this section are not considered claims for the
purposes of laws that would otherwise require the application of
sections 7101 through 7109 of title 41 U.S.C.
    (5) An entity or provider must first exhaust the procedures
established in this section before seeking judicial review under
section 1346 of title 28 U.S.C.
    (b) Subject matter of disputes. Disputes under this section must
pertain to:
    (1) The scope of one or more specific authorizations under the
applicable Veterans Care Agreement; or
    (2) Claims for payment under the applicable Veterans Care
Agreement.
    (c) Procedures--(1) Initiation of dispute. Disputes under this
section must be initiated in accordance with the following procedures
and requirements:
    (i) Disputes must be initiated by submitting a notice of dispute,
in writing, to the designated VA official to which notice must be
submitted under the terms of the Veterans Care Agreement. The notice of
dispute must comply with, and be submitted in accordance with,
applicable terms of the Veterans Care Agreement.
    (ii) The notice of dispute must contain all specific assertions or
demands, all facts pertinent to the dispute, any specific resolutions
or relief sought, and all information and documentation necessary to
review and adjudicate the dispute.
    (iii) The notice of dispute must be received by the designated VA
official to which such notice must be submitted, in accordance with the
terms of the
[[Page 21682]]
Veterans Care Agreement, within 90 calendar days after the accrual of
the dispute. For purposes of this paragraph, the accrual of the dispute
is the date when all events, that fix the alleged liability of either
VA or the entity or provider and permit the applicable demand(s) and
assertion(s), were known or should have been known. The term ``accrual
of the dispute,'' as defined, has the following meanings in each of the
two specific circumstances that follow:
    (A) When a dispute consists of an entity or provider asserting that
VA has made payment in an incorrect amount, under circumstances where
VA has issued a corresponding payment notice and the entity or provider
has received such notice, the accrual of the dispute is the date such
notice was received by the entity or provider.
    (B) When a dispute consists of an entity or provider asserting that
VA has improperly denied payment to which it is entitled, under
circumstances where VA has issued a corresponding denial of payment
notice and the entity or provider has received such notice, the accrual
of the dispute is the date such notice was received by the entity or
provider.
    (2) VA authority to decide and resolve disputes arising under or
relating to Veterans Care Agreements. (i) A VA official acting within
the scope of authority delegated by the Secretary of Veterans Affairs
(hereafter referred to in this section as the ``responsible VA
official'') will decide and resolve disputes under this section.
    (ii) The authority to decide or resolve disputes under this section
does not extend to the settlement, compromise, payment, or adjustment
of any claim for payment that involves fraud or misrepresentation of
fact. For purposes of this paragraph, ``misrepresentation of fact''
means a false statement of substantive fact, or any conduct which leads
to the belief of a substantive fact material to proper understanding of
the matter in hand, made with intent to deceive or mislead. If the
responsible VA official encounters evidence of misrepresentation of
fact or fraud on the part of the entity or provider, the responsible VA
official shall refer the matter to the agency official responsible for
investigating fraud and may refer the matter to other federal entities
as necessary.
    (3) Review of dispute and written decision. (i) Upon receipt of a
notice of dispute, the responsible VA official will review the dispute
and all facts pertinent to the dispute.
    (ii) If the responsible VA official determines additional
information or documentation is required for review and adjudication of
the dispute, the official will, within 90 calendar days of VA's receipt
of the notice of dispute, provide written notice to both parties, in
accordance with the notice provisions of the Veterans Care Agreement,
that additional information or documentation is required for review and
adjudication of the dispute. Such notice will identify and request the
additional information and documentation deemed necessary to review and
adjudicate the dispute.
    (iii) Upon VA receipt of a notice of dispute that conforms to the
requirements of paragraph (c)(1) of this section (including containing
all information and documentation necessary to review and adjudicate
the dispute), the responsible VA official will take one of the
following actions within 90 calendar days:
    (A) Issue a written decision, in accordance with the notice
provisions of the Veterans Care Agreement, to both parties. The written
decision will include:
    (1) A description of the dispute;
    (2) A reference to the pertinent terms of the Veterans Care
Agreement and any relevant authorizations;
    (3) A statement of the factual areas of agreement and disagreement;
    (4) A statement of the responsible official's decision, with
supporting rationale; and
    (5) A statement that the decision constitutes the final agency
decision on the matter in dispute.
    (B) Upon a determination that additional time is reasonably
required to issue a decision, the responsible VA official will provide
written notice to both parties, in accordance with the notice
provisions of the Veterans Care Agreement, of such determination and
the time within which a decision will be issued. The time within which
a decision will be issued must be reasonable, taking into account the
complexity of the dispute and any other relevant factors, and must not
exceed 150 calendar days after receipt of a notice of dispute that
conforms to the requirements of paragraph (c)(1) of this section and
all information and documentation necessary to review and adjudicate
the dispute. The responsible VA official will subsequently issue a
written decision in accordance with paragraph (c)(3)(iii)(A) of this
section.
    (4) Issuance of decision. VA will furnish the decision to the
entity or provider by any method that provides evidence of receipt.
    (5) Effect of decision. A written decision issued by the
responsible VA official constitutes the agency's final decision on the
dispute.
(The information collection requirements have been submitted to the
Office of Management and Budget (OMB) and are pending OMB approval.)
[FR Doc. 2019-10076 Filed 5-13-19; 8:45 am]
 BILLING CODE 8320-01-P