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Federal Register / Vol. 86, No. 146 / Tuesday, August 3, 2021 / Proposed Rules
million or more in any 1 year. We estimate that this proposed rule will be budget neutral or have a minimal economic impact that is unlikely to have an annual effect on the economy in excess of the $100 million threshold of Executive Order 12866. Based on our estimates, the Office of Management and Budgets Office of Information and Regulatory Affairs has determined that this rulemaking is significant and not major under Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 also known as the Congressional Review Act.
Although we are establishing a new regulatory provision, the change is merely in the statutory approach, while the effect is largely the same as under 447.10g4. As such, as discussed in the January 16, 2014 final rule 79 FR
2947, 3039 that initially established the authority for these arrangements, we believe that this proposed rule ensures Medicaid funding additional operational flexibilities for states to ensure a strong provider workforce.
There is also no impact on individual practitioners, even though the proposed rule would allow states to deduct payments from providers payment with their consent under the specific circumstances described in the proposed rule. State budgets will not likely be significantly affected because the operational flexibilities in the proposed rule would only facilitate the transfer of funds between participating entities, rather than the addition or subtraction of new funds.
Since the 2014 and 2019 final rules, we are not aware of any state plan amendments submitted by state Medicaid agencies that intended to modify provider payments rates in response to these previous regulatory changes. In addition, we do not formally track the payment amounts that state Medicaid agencies pay to third parties as affected by the proposed regulatory provision. As such, the Department invited public comments to help refine this analysis in the 2018 proposed rule, but no substantive analysis of the economic impact of this rule was provided as noted in the 2019 final rule.
Again, we are seeking comment on this estimate, and particularly on types and amounts deducted from individual providers for payment to third parties, broken down by benefit that may be included under 447.10i.
C. Anticipated Effects The RFA requires agencies to analyze options for regulatory relief of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small
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governmental jurisdictions. Most hospitals and most other providers and suppliers are small entities, either by nonprofit status or by having revenues of less than $8.0 million to $41.5
million in any 1 year. Individuals and states are not included in the definition of a small entity. We are not preparing an analysis for the RFA because we have determined, and the Secretary proposes to certify, that this proposed rule would not have a significant economic impact on a substantial number of small entities.
In addition, section 1102b of the Act requires us to prepare an RIA if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 603
of the RFA. For purposes of section 1102b of the Act, we define a small rural hospital as a hospital that is located outside of a metropolitan statistical area for Medicare payment regulations and has fewer than 100
beds. We are not preparing an analysis for section 1102b of the Act because we have determined, and the Secretary proposes to certify, that this proposed rule would not have a significant impact on the operations of a substantial number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995
dollars, updated annually for inflation.
In 2021, that threshold is approximately $158 million. This rule will have no consequential effect on state, local, or tribal governments or on the private sector.
Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule and subsequent final rule that imposes substantial direct requirement costs on state and local governments, preempts state law, or otherwise has Federalism implications.
Since this regulation does not impose any costs on state or local governments, the requirements of Executive Order 13132 are not applicable.
D. Alternatives Considered We considered incorporating additional regulatory text under 447.10i requiring explicit written consent from a practitioner before state Medicaid agencies may make a payment on behalf of the practitioner to a third party that provides benefits to the workforce such as health insurance, skills training, and other benefits customary for employees. We also
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considered identifying specific employee benefits for which payments may be deducted and paid to a third party in the regulatory text under 447.10i, such as federal income taxes, Federal Insurance Contributions Act FICA taxes, state and local taxes, retirement benefits for example, 401k, profit-sharing, health insurance, dental insurance, vision insurance, long-term care insurance, disability insurance, life insurance, gym memberships, health savings accounts HSA, job-related expenses for example, union dues with affirmative consent, uniforms, tools, meals, and mileage, and charitable contributions. Rather than listing the universe of benefits for which payments may be deducted and paid by state Medicaid agencies to third parties with consent of the provider, we also considered whether to exclude certain benefit deductions from the scope of this proposed rule. Finally, we considered requiring practitioner consent only for specific types of deductions, rather than all types of benefits, for which Medicaid payment amounts may be deducted and paid to a third party in the regulatory text under 447.10i.
We considered but did not propose to require explicit written provider consent for deductions out of concern that codifying a requirement for written consent could unintentionally result in a conflict with state law. As proposed, we would defer to state Medicaid agencies to ensure consent is obtained and for further implementation of provider payment deductions consistent with state law and regulation for state employee benefit deductions. We are requesting public comment on whether to include a CMS requirement for written provider consent or to remain silent on the form such consent must take and to defer to existing state law and regulation. Specifically, we are seeking comments on what constitutes appropriate consent that is, letter, email, form, descriptions of state law that require consent, and how CMS
could minimize burden on state Medicaid agencies and prevent conflict with state laws and regulations if specific consent requirements were finalized within the regulatory text.
Thus, we are providing in this proposed rule that a provider must voluntarily consent to payments to third parties on the providers behalf, but propose to leave to each state to determine the best means of confirming the providers consent in each case.
We also considered but did not propose to codify a defined list of allowable benefits or excluded benefits within the regulatory text based on
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