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71020 Federal Register / Vol. 70, No.

226 / Friday, November 25, 2005 / Rules and Regulations

PART 424—CONDITIONS FOR Dated: May 2, 2005. I. Background


MEDICARE PAYMENT Mark B. McClellan, Title I of the Health Insurance
Administrator, Centers for Medicare & Portability and Accountability Act of
■ 1. The authority citation for part 424 Medicaid Services. 1996 (HIPAA) created a new title XXVII
continues to read as follows: Approved: August 15, 2005. of the Public Health Service (PHS) Act
Authority: Secs. 1102 and 1871 of the Michael O. Leavitt, (42 U.S.C. 300gg, et seq.) that requires
Social Security Act (42 U.S.C. 1302 and Secretary. group health plans and health insurance
1395hh).
Editorial Note: This document was
issuers to provide certain guarantees for
received at the Federal Register on availability and renewability of health
■ 2. Amend § 424.32 by— November 17, 2005. coverage in the group and individual
■ A. Revising paragraphs (d)(1)(v); health insurance markets.
[FR Doc. 05–23080 Filed 11–23–05; 8:45 am] HIPAA created a series of parallel
(d)(1)(vi); (d)(3)(ii), and (d)(4)
introductory text. BILLING CODE 4120–01–P provisions that were placed in the
Employee Retirement Income Security
■ B. Redesignating (d)(4)(iii) as
Act (ERISA), which is within the
paragraph (d)(4)(v).
jurisdiction of the Department of Labor;
■ C. Adding paragraphs (d)(4)(iii) and DEPARTMENT OF HEALTH AND the Public Health Service (PHS) Act,
(iv). HUMAN SERVICES (HHS) which is within the jurisdiction of the
The revisions and additions read as Centers for Medicare & Medicaid Department of Health and Human
follows: Services Services; and the Internal Revenue
Code, which is within the jurisdiction of
§ 424.32 Basic requirements for all claims. the Department of the Treasury. These
45 CFR Parts 144, 146, 148, and 150
(d) * * * ‘‘shared provisions’’ set forth Federal
requirements relating to portability of
(1) * * * [CMS–4091–F]
and access to group health plan
(v) Initial Medicare claim means a coverage, as well as group health
claim submitted to Medicare for RIN 0938–AN35 insurance coverage provided by issuers.
payment under Part A or Part B of the The shared provisions contain rules
Federal Enforcement in Group and
Medicare Program under title XVIII of limiting the use of preexisting condition
Individual Health Insurance Markets
the Act for initial processing, including exclusion periods, and prohibiting
claims sent to Medicare for the first time AGENCY: Centers for Medicare & discrimination against participants and
for secondary payment purposes. Initial Medicaid Services (CMS), HHS. beneficiaries based on health status.
Medicare claim excludes any ACTION: Final rule.
Section 104 of Title I of HIPAA
adjustment or appeal of a previously requires that the Secretaries of the three
submitted claim, and claims submitted SUMMARY: This rule makes final an Departments ensure through an
for payment under Part C of the interim final rule that details procedures interagency Memorandum of
Medicare program under title XVIII of we use for enforcing title XXVII of the Understanding (MOU) that regulations,
the Act. Public Health Service Act as added by rulings, and interpretations issued by
(vi) Physician, practitioner, facility, or the Health Insurance Portability and each of the Departments relating to the
supplier is a Medicare provider or Accountability Act of 1996, and as same matter over which two or more
supplier other than a provider of amended by the Mental Health Parity departments have jurisdiction, are
services. Act of 1996, the Newborns’ and administered so as to have the same
Mothers’ Health Protection Act of 1996, effect at all times. Under section 104,
* * * * * the Departments, through the MOU, are
and the Women’s Health and Cancer
(3) * * * Rights Act of 1998. Specifically, we are to provide for coordination of policies
(i) * * * responsible for enforcing title XXVII relating to enforcement of the same
requirements in States that do not enact requirements in order to have a
(ii) The entity submitting the claim is coordinated enforcement strategy that
the legislation necessary to enforce
a small provider of services or small avoids duplication of enforcement
those requirements, or otherwise fail to
supplier. efforts and assigns priorities in
substantially enforce the requirements.
(4) Unusual cases. The Secretary may We are also responsible for taking enforcement. The Secretaries of the
waive the requirement of paragraph enforcement actions against non-Federal three departments signed and published
(d)(2) of this section in unusual cases as governmental plans. The regulation the MOU in 1999 (64 FR 70164).
the Secretary finds appropriate. Unusual describes the process we use in both HIPAA also added certain provisions
cases are deemed to exist in the enforcement contexts. This final rule governing insurance in the group and
following situations: deletes an appendix to the interim rule individual markets, and with respect to
* * * * * that listed examples of violations of title non-Federal governmental plans, which
XXVII and corrects the description of a are contained only in the Public Health
(iii) The entity submitting the claim
cross-reference, but makes no Service Act and are not within the
submits fewer than 10 claims to
substantive changes to the interim final regulatory jurisdiction of the
Medicare per month, on average.
rule. Department of Labor or the Department
(iv) The entity submitting the claim of the Treasury.
DATES: These regulations are effective
only furnishes services outside of the Under section 101(b) of HIPAA the
on December 27, 2005.
U.S. territory. Department of Labor is not authorized to
FOR FURTHER INFORMATION CONTACT:
* * * * * enforce any of the portability
David Mlawsky (877) 267–2323, ext. requirements of part 7 of ERISA (the
(Catalog of Federal Domestic Assistance
61565. ‘‘shared’’ provisions) against a health
Program No. 93.774, Medicare—
Supplementary Medical Insurance Program) SUPPLEMENTARY INFORMATION insurance issuer offering health

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Federal Register / Vol. 70, No. 226 / Friday, November 25, 2005 / Rules and Regulations 71021

insurance coverage in connection with a health insurance coverage that requires III. Analysis of and Responses to Public
group health plan, although individuals coverage of at least the coverage of Comments
covered under ERISA can bring suit reconstructive breast surgery otherwise We received no public comments on
against the issuer. Also, governmental required under WHCRA. the August 20, 1999 interim final rule.
plans, while they are defined in section HIPAA affirms that the States are the
3(32) of ERISA, are exempt from ERISA primary regulators of health insurance IV. Provisions of the Final Regulations
requirements. (See section 4(b)(1) of coverage in each State. However, in the The provisions of this final rule are
ERISA.) Thus, the scope of the MOU is event that a State either does not enact identical to the provisions of the August
limited, with respect to coordination of legislation that meets or exceeds the 20, 1999, interim final rule with
enforcement activities, to enforcement Federal requirements, or if it otherwise comment period, except that we have
of shared provisions. Enforcement of fails to substantially enforce the HIPAA deleted the appendix to subpart C that
these provisions constitutes only a standards, we enforce the HIPAA listed examples of specific situations
relatively small portion of our requirements that apply to health that may trigger the assessment of civil
responsibilities. insurance issuers offering coverage money penalties. We believe the
The Newborns’ and Mothers’ Health within that State. inclusion of that document is
Protection Act of 1996 (NMHPA) We are also responsible for enforcing unnecessary, in light of the fact that
amended the PHS Act and ERISA (with the HIPAA requirements with respect to assessments are triggered by breaches of
corresponding provisions in the Tax non-Federal governmental plans. Non- the provisions within the regulation
Code) to provide protections for mothers Federal governmental plans that self- itself.
and their newborn children with regard insure, rather than purchasing health Additionally, in § 150.311(e), the
to the length of hospital stay following insurance coverage may elect exemption cross-reference made to the document
childbirth. The Mental Health Parity Act from one or more requirements of described in § 150.307 incorrectly
of 1996 (MHPA) further amended the HIPAA, but must comply with identified that document as the notice of
PHS Act and ERISA (with intent to assess a penalty. We are
requirements regarding certification and
corresponding provisions in the Tax correcting that cross-reference in
disclosure of creditable coverage.
Code) to provide for parity in the 150.311(e) so it references the notice to
application of certain annual and II. Provisions of the Interim Final the responsible entity or entities
lifetime dollar limits on mental health Regulations described in § 150.307.
benefits with annual and lifetime dollar Subpart A—General Provisions
limits on medical/surgical benefits. The V. Collection of Information
Women’s Health and Cancer Rights Act Section 150.101 Basis and Scope Requirements
of 1998 (WHCRA) amended the PHS Act On April 8, 1997, we published This document does not impose
(and ERISA) to provide certain regulations to implement HIPAA by information collection and
protections for patients who elect breast recordkeeping requirements.
adding 45 CFR parts 144, 146, and 148.
reconstruction in connection with a Consequently, it need not be reviewed
Included in those regulations were
mastectomy. (As used hereafter in this by the Office of Management and
enforcement provisions. After gaining
preamble, ‘‘HIPAA’’ refers to title XXVII Budget under the authority of the
some experience with direct Federal
of the PHS Act, as added by the Health Paperwork Reduction Act of 1995.
enforcement in some States, we
Insurance Portability and
determined that it was necessary to VI. Regulatory Impact Statement
Accountability Act of 1996, and later
provide more detail on the procedures In drafting the interim regulation that
amended by MHPA, NMHPA, and
that will be used to enforce HIPAA this regulation finalizes, we had
WHCRA).
HIPAA added two preemption when a State does not do so. Therefore, examined the impacts of the interim
provisions to the PHS Act. With respect on August 20, 1999, we published final regulation as required by Executive
to HIPAA’s preexisting condition interim final regulations (HCFA–2019– Order 12866 (September 1993,
exclusion rules, and the special IFC) (64 FR 45786) that added a new Regulatory Planning and Review), the
enrollment rights contained in section part that revised and expanded the Regulatory Flexibility Act (RFA)
2701 of the PHS Act, State law cannot provisions contained in § 146.184, (September 19, 1980, Pub. L. 96–354),
differ in any way from the Federal § 148.200, and § 148.202. Those sections the Unfunded Mandates Reform Act of
requirements, except to expand the were deleted. 1995 (Pub. L. 104–4), and Executive
protections in one of several ways That new part, 45 CFR part 150, Order 13132. We published a Regulatory
specifically permitted by the statute. consists of four subparts. Subpart A Impact Statement addressing all those
(See section 2723(b) of the PHS Act.) explains the basis and scope of the impacts in the preamble to the interim
With respect to HIPAA’s other regulation and presents definitions that regulation (64 FR 45786, 45792). This
requirements (except for NMHPA and supplement definitions located in 45 regulation merely finalizes that interim
WHCRA), including the non- CFR 144.103 and 148.103. Subpart B final regulation, and makes no
discrimination provisions in section describes how we determine whether to substantive changes to it. Therefore, that
2702 of the PHS Act, State laws are assume enforcement authority in a State Regulatory Impact Statement applies to
preempted only to the extent they and explains the process for transferring this final regulation as well, and we
prevent the application of any authority back to the State. Subpart C refer the reader to it. However, we note
requirement of HIPAA. (See section describes procedures for assessing civil that under Executive Order 12866 (58
2723(a) of the PHS Act.) In addition, the money penalties. Examples of specific FR 551735, October 4, 1993), the
NMHPA does not apply to health situations that may trigger the Department must determine whether a
insurance issuers in States that have assessment are listed in Appendix A to regulatory action is ‘‘significant’’ and
certain types of laws regulating coverage subpart C. Subpart D describes the therefore subject to the requirements of
for the length of post-childbirth administrative appeals process. the Executive Order and subject to
hospitalization. WHCRA does not We refer the reader to the August 20, review by the Office of Management and
preempt State laws in effect on the date 1999, interim final rule with comment Budget (OMB). Under section 3(f), the
of WHCRA’s enactment with respect to period for greater detail. order defines a ‘‘significant regulatory

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71022 Federal Register / Vol. 70, No. 226 / Friday, November 25, 2005 / Rules and Regulations

action’’ as an action that is likely to responsibilities among the various Commissioners (NAIC). The NAIC is a
result in a rule (1) having an annual levels of government. This is because non-profit corporation established by
effect on the economy of $100 million the process set forth in these regulations the insurance commissioners of the 50
or more, or adversely and materially impacts the relationship between States, the District of Columbia, and
affecting a sector of the economy, national government and the States. four U.S. territories. In most States the
productivity, competition, jobs, the However, in the Department’s view, the insurance commissioner is appointed by
environment, public health or safety, or Federalism implications of these final the Governor, in approximately 14
State, local, or tribal governments or regulations are minimal. This is States, the insurance commissioner is an
communities (also referred to as evidenced by the fact that no State elected official. Among other activities,
‘‘economically significant’’); (2) creating submitted any comments on the interim it provides a forum for the development
serious inconsistency or otherwise final regulations suggesting that the of uniform policy when uniformity is
interfering with an action taken or regulations would in fact materially appropriate. Its members meet, discuss
planned by another agency; (3) impact States’ relationship with the and offer solutions to mutual problems.
materially altering the budgetary national government, or would unduly The NAIC sponsors quarterly meetings
impacts of entitlement grants, user fees, infringe on States’ historical function of to provide a forum for the exchange of
or loan programs or the rights and regulating health insurance issuers. ideas and in-depth consideration of
obligations of recipients thereof; or (4) Additionally, the Department notes that insurance issues by regulators, industry
raising novel legal or policy issues the PHS Act provides that the States representatives and consumers. CMS
arising out of legal mandates, the may enforce the provisions of title staff have been consistently attending
President’s priorities, or the principles XXVII as they pertain to issuers, but that these quarterly meetings to listen to the
set forth in the Executive Order. We the Secretary of Health and Human concerns of the State Insurance
have determined that this action is not Services must enforce any provisions Departments regarding HIPAA
economically significant for the reasons that a State fails to substantially enforce. enforcement and other issues. In
stated in the preamble to the interim Currently, HHS enforces the title XXVII addition to the general discussions,
final regulation. The action also does group market portability and committee meetings, and task groups,
not create any serious inconsistency or nondiscrimination provisions in only the NAIC sponsors the standing CMS/
interfere with another agency’s action or one State 1 in accordance with that Department of Labor meeting on HIPAA
planned action, nor does it materially State’s specific request to do so. issues for members during the quarterly
alter any budgetary impacts of Additionally, HHS enforces the NMHPA conferences. This meeting provides
entitlement grants, user fees, or loan provisions in title XXVII in one State 2 CMS (and the Department of Labor)
programs or the rights and obligations of that has not enacted conforming with the opportunity to provide updates
recipients thereof. Additionally, because legislation, and has varying levels of on enforcement actions, regulations,
this final regulation merely keeps in direct enforcement responsibility in four bulletins, and outreach efforts regarding,
force an interim regulation already in States 3 with respect to the WHCRA among other things, title XXVII of the
effect before the publication of this final provisions in title XXVII. In these PHS Act.
regulation, and makes no substantive instances, the Department complied The Department has also cooperated
changes to it, this final regulation does with the procedures set forth in the with the States in several ongoing
not raise any novel legal or policy interim final regulation (and this outreach initiatives, through which
issues. regulation) before assuming such information on, among other things, title
We also note that Executive Order enforcement responsibilities.4 When XXVII of the PHS Act, is shared among
12612 (‘‘Federalism’’) has been revoked exercising its responsibilities in this Federal regulators, State regulators, and
subsequent to the issuance of the regard, HHS works cooperatively with the regulated community. In particular,
interim final regulation, and has been the State for the purpose of addressing CMS has sponsored conferences with
replaced by Executive Order 13132 the State’s concerns and avoiding the States—the consumer Outreach and
(‘‘Federalism’’). Executive Order 13132 conflicts with the exercise of State Advocacy conferences in March 1999
outlines fundamental principles of authority. and June 2000, and the Implementation
Federalism. It requires adherence to In compliance with Executive Order and Enforcement of HIPAA National
specific criteria by federal agencies in 13132’s requirements that agencies State-Federal Conferences in August
formulating and implementing policies examine closely any policies that may 1999, 2000, 2001, 2002, and 2003.
that have ‘‘substantial direct effects’’ on have Federalism implications or limit Furthermore, CMS websites offer links
the States, the relationship between the the policymaking discretion of the to important State websites and other
national government and States, or on States, HHS has engaged in numerous resources, facilitating coordination
the distribution of power and efforts to consult and work between State and federal regulators and
responsibilities among the various cooperatively with affected State and the regulated community. Throughout
levels of government. Federal agencies local officials. For example, the the process of developing these
promulgating regulations that have Department has worked closely with regulations, to the extent feasible, the
these federalism implications must State insurance regulators and the Department has attempted to balance
consult with State and local officials, National Association of Insurance the States’ interests in regulating health
and describe the extent of their insurance issuers, and Congress’ intent
consultation and the nature of the 1 Missouri. to ensure federal enforcement of the
concerns of State and local officials in 2 Wisconsin.
provisions of title XXVII in instances
3 Colorado, Massachusetts, Rhode Island, and
the preamble to the regulation. where a State fails to substantially
Wisconsin.
In the Department’s view, these final 4 Additionally, HHS applied the process set forth
enforce those provisions.
regulations have Federalism in the interim final regulation (and in this final Pursuant to the requirements set forth
implications because they may have regulation) with regard to several other States that in section 8(a) of Executive Order
substantial direct effects on the States, had not enacted legislation conforming to NMHPA, 13132, and by the signatures affixed to
WHCRA and MHPA. Largely as a result of initiating
the relationship between the national that process and working cooperatively with those
these final regulations, the Department
government and States, or on the States, every one of them enacted conforming certifies that the CMS has complied
distribution of power and legislation. with the requirements of Executive

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Federal Register / Vol. 70, No. 226 / Friday, November 25, 2005 / Rules and Regulations 71023

Order 13132 for the attached final Dated: January 19, 2005. send comments to: PRA@fcc.gov. To
regulation, Federal Enforcement in Mark B. McClellan, submit your PRA comments by U.S.
Group and Individual Health Insurance Administrator, Centers for Medicare & mail, mark them to the attention of
Markets (RIN 09–38–AN35), in a Medicare Services. Judith B. Herman and address them to
meaningful and timely manner. Dated: August 15, 2005. the Federal Communications
Michael O. Leavitt, Commission, Room 1–C804, 445 12th
In accordance with Executive Order
Secretary, Department of Health & Human Street, SW., Washington, DC 20554.
12866, this regulation was reviewed by
Services. FOR FURTHER INFORMATION CONTACT: Jean
the Office of Management and Budget.
Editorial Note: This document was Ann Collins, Senior Counsel, Office of
List of Subjects received at the Federal Register on Homeland Security, Enforcement
45 CFR Parts 144 and 146 November 17, 2005. Bureau, at (202) 418–1199. For
[FR Doc. 05–23076 Filed 11–23–05; 8:45 am] additional information concerning the
Health care, Health insurance, BILLING CODE 4120–01–U Paperwork Reduction Act information
Reporting and recordkeeping collection requirements contained in
requirements. this document, send an e-mail to
FEDERAL COMMUNICATIONS PRA@fcc.gov or contact Judith B.
45 CFR Part 148 Herman at (202) 418–0214.
COMMISSION
Administrative practice and SUPPLEMENTARY INFORMATION: This is a
procedure, Health care, Health 47 CFR Part 11 summary of the Commission’s First
insurance, Penalties, Reporting and [EB Docket No. 04–296; FCC 05–191] Report and Order in EB Docket No. 04–
recordkeeping requirements. 296, FCC 05–191, adopted November 3,
Review of the Emergency Alert System 2005, and released November 10, 2005.
45 CFR Part 150 The complete text of this document is
AGENCY: Federal Communications
Administrative practice and Commission. available for inspection and copying
procedure, Health care, Health during normal business hours in the
ACTION: Final rule.
insurance, Penalties, Reporting and FCC Reference Information Center,
recordkeeping requirements. SUMMARY: In this document, the Federal Portals II, 445 12th Street, SW., Room
Communications Commission CY–A257, Washington, DC, 20554. This
■ Accordingly, for the reasons set forth (Commission) adopts rules that expand document may also be purchased from
in the preamble, the interim final rule the reach of the Emergency Alert System the Commission’s duplicating
with comment period adding 45 CFR (EAS), as currently constituted, to cover contractor, Best Copy and Printing, Inc.,
Part 150, Subparts A through D, which digital communications technologies 445 12th Street, SW., Room CY–B402,
was published on August 20, 1999, in that are increasingly being used by the Washington, DC 20554, telephone (800)
the Federal Register at 64 FR 45786 American public to receive news and 378–3160 or (202) 863–2893, facsimile
through 45807, is adopted as a final entertainment—digital television and (202) 863–2898, or via e-mail at http://
rule, with the following amendments: radio, digital cable, and satellite www.bcpiweb.com. It is also available
television and radio. This First Report on the Commission’s Web site at
PART 150—CMS ENFORCEMENT IN and Order is the most recent in a series http://www.fcc.gov. This document
GROUP AND INDIVIDUAL INSURANCE of proceedings in which the contains new information collection
MARKETS Commission has sought to contribute to requirements. The Commission, as part
an efficient and technologically current of its continuing effort to reduce
■ 1. The authority citation for part 150 public alert and warning system. paperwork burdens, invites the general
continues to read as follows: DATES: Effective Date: The rules set forth public to comment on the information
in the First Report and Order shall collection requirements contained in
Authority: Secs. 2701 through 2763, 2791,
become effective for digital television this document as required by the
and 2792 of the PHS Act (42 U.S.C. 300gg
broadcasters, digital audio broadcasters, Paperwork Reduction Act of 1995,
through 300gg–63, 300gg–91, and 300gg–92).
digital cable systems and SDARS Public Law 104–13. Public and agency
§ 150.307 [Amended] licensees on December 31, 2006, and for comments are due January 24, 2006. In
DBS providers on May 31, 2007, except addition, the Commission notes that
■ 2. In § 150.307, paragraph (a) is §§ 11.15, 11.21, 11.35, 11.51, 11.52, pursuant to the Small Business
amended by removing the parenthetical 11.55 and 11.61 which contains Paperwork Relief Act of 2002, Public
‘‘(See Appendix A to this subpart for information that has not been approved Law 107–198, see 44 U.S.C. 3506(c)(4),
examples of violations.)’’ by OMB. The Commission will publish the Commission previously sought
a document in the Federal Register specific comment on how the
§ 150.311 [Amended] Commission might ‘‘further reduce the
announcing the effective dates of these
■ 3. In § 150.311, paragraph (e) is sections. information collection burden for small
amended by removing the phrase ‘‘of Comment Date: Written comments by business concerns with fewer than 25
the public on the new and/or modified employees.’’
intent to assess a penalty’’ and adding
in its place the phrase ‘‘to the information collection requirements are In this present document, the
responsible entity or entities’’. due January 24, 2006. Commission has assessed the effects of
ADDRESSES: Federal Communications expanding the reach of EAS to cover
Appendix A To Subpart C [Removed] Commission, 445 12th Street, SW., DTV, DAB, digital cable, DBS and
Room TW–A325, Washington, DC SDARS providers, and finds that this
■ 4. In Part 150, ‘‘Appendix A To 20554. You may submit your Paperwork imposes minimal regulation on small
Subpart C Of Part 150—Examples Of Reduction Act (PRA) comments by entities to the extent consistent with the
Violations’’ is removed. electronic mail or U.S. mail. To submit Commission’s goal of advancing its
your PRA comments by electronic mail, public safety mission.

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