Compliance With Title X Requirements by Project Recipients in Selecting Subrecipients, 91852-91860 [2016-30276]

Download as PDF 91852 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations (d) Indirect or inadvertent residues. [Reserved] [FR Doc. 2016–30467 Filed 12–16–16; 8:45 am] BILLING CODE 6560–50–P DEPARTMENT OF HEALTH AND HUMAN SERVICES 42 CFR Part 59 RIN 937–AA04 Compliance With Title X Requirements by Project Recipients in Selecting Subrecipients Office of Population Affairs, Office of the Secretary, Department of Health and Human Services. ACTION: Final rule. AGENCY: The Department is amending the regulations that apply to Title X Project Grants for Family Planning Services. The final rule amends eligibility requirements to require that no recipient making subawards for the provision of services as part of its Title X project may prohibit an entity from participating for reasons other than its ability to provide Title X services. DATES: This Rule is effective on January 18, 2017. FOR FURTHER INFORMATION CONTACT: Susan B. Moskosky, MS, WHNP–BC, Office of Population Affairs (OPA), 200 Independence Avenue SW., Suite 716G, Washington, DC 20201; telephone (240) 453–2800; email: OPA_Resource@ hhs.gov. SUPPLEMENTARY INFORMATION: On September 7, 2016, The Department issued a proposed rule seeking comment on amending eligibility criteria under the Title X family planning services program so that no recipient making subawards for the provision of services as part of its Title X project may prohibit an entity from participating for reasons unrelated to its ability to provide Title X services effectively. 81 FR 61639. As reiterated below, the proposed rule set forth the need for the amendment and sought public input. SUMMARY: srobinson on DSK5SPTVN1PROD with RULES I. Background A. Title X Background As discussed in the Notice of Proposed Rule Making (NPRM), the Title X Family Planning Program, Public Health Service Act (PHSA) secs. 1001 et seq. [42 U.S.C. 300], was enacted in 1970 as part of the Public Health Service Act. Administered by the Office of Population Affairs (OPA) within the Office of the Assistant Secretary for Health (OASH), Title X is the only federal program focused solely on VerDate Sep<11>2014 20:05 Dec 16, 2016 Jkt 241001 providing family planning and related preventive services. In 2015, more than 4 million individuals received services through more than 3,900 Title X-funded health centers.1 Title X serves women, men, and adolescents to enable individuals to determine freely the number and spacing of children. By law, services are provided to low-income individuals at no or reduced cost. Services provided through Title X-funded health centers assist in preventing unintended pregnancies and achieving pregnancies that result in positive birth outcomes. These services include contraceptive services, pregnancy testing and counseling, preconception health services, screening and treatment for sexually transmitted diseases (STD), HIV testing and referral for treatment, services to aid with achieving pregnancy, basic infertility services, and screening for cervical and breast cancer. By statute, Title X funds are not available to programs where abortion is a method of family planning (PHSA sec. 1008). Additionally, Title X implementing regulations require that all pregnancy options counseling shall be neutral and nondirective. 42 CFR 59.5(a)(5)(ii). The Title X statute authorizes the Secretary ‘‘to make grants to and enter into contracts with public or nonprofit private entities to assist in the establishment and operation of voluntary family planning projects which shall offer a broad range of acceptable and effective family planning methods and services (including natural family planning methods, infertility services, and services for adolescents).’’ PHSA sec. 1001(a). In addition, in awarding Title X grants and contracts, the Secretary must ‘‘take into account the number of patients to be served, the relative need of the applicant, and its capacity to make rapid and effective use of such assistance.’’ PHSA sec. 1001(b). The statute also requires that local and regional entities ‘‘shall be assured the right to apply for direct grants and contracts.’’ PHSA sec. 1001(b). The statute delegates rulemaking authority to the Secretary to set the terms and conditions of these grants and contracts. PHSA sec. 1006. These regulations were last revised in 2000. 65 FR 41270 (July 3, 2000). Title X regulations delineating the criteria used to decide which family planning projects to fund and in what amount, include, among other factors, 1 Fowler, C.I., Gable, J., Wang, J., & Lasater, B. (2016, August). Family Planning Annual Report: 2015 National Summary. Research Triangle Park, NC: RTI International. PO 00000 Frm 00210 Fmt 4700 Sfmt 4700 the extent to which family planning services are needed locally, the number of patients (and, in particular, lowincome individuals) to be served, and the adequacy of the applicant’s facilities and staff. 42 CFR 59.7. Project recipients receive funds directly from the federal government following a competitive process. The project recipients may elect to provide Title X services directly, subaward funds to subrecipients, or both. The Department is responsible for monitoring and evaluating the project recipient’s performance and outcomes, and each project recipient that subawards to eligible subrecipients is responsible for monitoring the performance and outcomes of those subrecipients. The subrecipients must meet the same federal requirements as the project recipients, including being a public or private nonprofit entity, and adhering to all Title X and other applicable federal requirements. In the event of poor performance or noncompliance, a project recipient may take enforcement actions as described in the uniform grants rules at 45 CFR 75.371. B. State Restrictions on Subrecipients In the past several years, a number of states have taken actions to restrict participation by certain types of providers as subrecipients in the Title X program, for reasons other than the provider’s ability to provide Title X services. In at least several instances, this has led to disruption of services or reduction of services. Since 2011, 13 states have placed restrictions on or eliminated subawards with specific types of providers based on reasons other than their ability to provide Title X services. In several instances, these restrictions have interfered with the ‘‘capacity [of the applicant] to make rapid and effective use of [Title X federal] assistance.’’ PHSA sec. 1001(b). Moreover, states that restrict eligibility of subrecipients have caused limitations in the geographic distribution of services and decreased access to services through trusted providers. States have restricted subrecipients from participating in the Title X program in several ways. Some states have employed a tiered approach to compete or distribute Title X funds, whereby entities such as comprehensive primary care providers, state health departments, or community health centers receive a preference in the distribution of Title X funds. This approach effectively excludes providers focused on reproductive health from receiving funds, even though they have been shown to provide higher quality services, such as preconception E:\FR\FM\19DER1.SGM 19DER1 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations srobinson on DSK5SPTVN1PROD with RULES services, and accomplish Title X programmatic objectives more effectively.2 3 For example, in 2011, Texas reduced its contribution to family planning services, and also re-competed subawards of Title X funds using a tiered approach. The combination of these actions decreased the Title X provider network from 48 to 36 providers, and the number of Title X clients served was reduced dramatically. Although another entity became the statewide project recipient in 2013, the number of Title X clients served decreased from 259,606 in 2011 to 166,538 in 2015.4 5 In other cases, states have prohibited specific types of providers from being eligible to receive Title X subawards, which has had a direct impact on service availability, primarily for low-income women. In some cases, experienced providers that have historically served large numbers of patients in major cities or geographic areas have been eliminated from participation in the Title X program. In Kansas, for example, following the exclusion of specific family planning providers in 2011, the number of clients, 87 percent of whom were low income (at or below 200 percent of the Federal Poverty Level), declined from 38,461 in 2011 to 24,047 in 2015, a decrease of more than 37 percent. As with the declines in Texas, this is a far greater decrease than the national average of 20 percent.6 7 In New Hampshire, in 2011, the New Hampshire Executive Council voted not to renew the state’s contract with a specific provider that was contracted to provide Title X family planning services for more than half of the state. To restore services to clients in the unserved part of the state, the 2 Robbins, C.L., Gavin, L., Zapata, L.B., Carter, M. W., Lachance, C., Mautone-Smith, N., & Moskosky, S.B. (2016). Preconception Care in Publicly Funded U.S. Clinics That Provide Family Planning Services. American Journal of Preventive Medicine. 3 Carter, M.W., Gavin, L., Zapata, L.B., Bornstein, M., Mautone-Smith, N., & Moskosky, S.B. (2016). Four aspects of the scope and quality of family planning services in US publicly funded health centers: Results from a survey of health center administrators. Contraception. 4 Fowler, CI, Lloyd, S, Gable, J, Wang, J, and McClure, E. (November 2012). Family Planning Annual Report: 2011 National Summary. Research Triangle Park, NC: RTI International. 5 Fowler, C.I., Gable, J., Wang, J., & Lasater, B. (2016, August). Family Planning Annual Report: 2015 National Summary. Research Triangle Park, NC: RTI International. 6 Fowler, CI, Lloyd, S, Gable, J, Wang, J, and McClure, E. (November 2012). Family Planning Annual Report: 2011 National Summary. Research Triangle Park, NC: RTI International. 7 Fowler, C.I., Gable, J., Wang, J., & Lasater, B. (2016, August). Family Planning Annual Report: 2015 National Summary. Research Triangle Park, NC: RTI International. VerDate Sep<11>2014 20:05 Dec 16, 2016 Jkt 241001 Department issued an emergency replacement grant, but there was significant disruption in the delivery of services, and for approximately three months, no Title X services were available to potential clients in a part of the state. Most recently, in 2016 Florida enacted a law that would have gone into effect on July 1, 2016, prohibiting the state from making Title X subawards to certain family planning providers.8 In one county alone, 1,820 clients are served by the family planning provider that would have been excluded, and it is not clear how the needs of those clients would have been met. None of these state restrictions have been related to the subrecipients’ ability to deliver Title X services. Instead, these restrictions are based either on non-Title X funded health services offered or on other activities the providers may separately conduct using non-federal funds, or because of the provider’s affiliation. The Title X program provides that the Secretary shall make awards for family planning services based on ‘‘the number of patients to be served, the extent to which family planning services are needed locally, the relative need of the applicant, and its capacity to make rapid and effective use of [Title X Federal] assistance.’’ PHSA sec. 1001(b). Allowing project recipients, including states and other entities, to impose restrictions on subrecipients for reasons other than their ability to provide Title X services has been shown to have an adverse effect on the number of people receiving Title X services and the fundamental goals of the Title X program. C. Litigation As discussed in the NPRM, litigation concerning these restrictions has led to inconsistency across states in how recipients may choose subrecipients. As the restrictions vary, so have the statutory and constitutional issues raised in the cases. II. Final Rule and Responses to Public Comments A. Overview of the Final Rule The Department is finalizing the proposed rule with modifications. After reviewing the relevant comments, the Department is eliminating the qualifier 8 H.B. 1411, 2016 Leg., Reg. Sess. (Fla. 2016). The law was preliminarily enjoined on June 30, 2016. Planned Parenthood of Southwest and Central Florida v. Philip, et al., No. 4:16cv321–RH/CAS, 2016 U.S. Lexis 86251 (N.D. Fla. June 30, 2016)(‘‘the defunding provision does not survive the unconstitutional conditions doctrine.’’). The law was permanently enjoined on August 18, 2016, in an unpublished order. PO 00000 Frm 00211 Fmt 4700 Sfmt 4700 91853 ‘‘effectively’’ and changing ‘‘unrelated to’’ to ‘‘other than’’ in the regulatory language. The amendment now reads, ‘‘No recipient making subawards for the provision of services as part of its Title X project may prohibit an entity from participating for reasons other than its ability to provide Title X services.’’ The Department does not believe that including the term ‘‘effectively’’ is necessary for operation of this rule. Inclusion of ‘‘effectively’’ has the potential for inconsistent application and could create compliance burdens on recipients trying to apply a measure of ‘‘effectiveness’’ across a range of subrecipients. The revised language addresses the Department’s concern that certain Title X recipients have imposed restrictions on subrecipients that are designed to further policy objectives other than the delivery of Title X services. Title X is the only federal program focused solely on providing family planning and related preventive services. Restrictions not directly related to that goal hinder the program’s statutory mission and adversely affect the program’s intended beneficiaries. For example, as outlined in the NPRM, state restrictions on subrecipients for activities unrelated to Title X-funded services have kept eligible providers from serving priority populations.9 Therefore, restricting participation by certain types of providers for such reasons will not be allowable under the rule. Similarly, while tiering Title X subawards may fulfill some state-based policy goals, tiering does not advance the specific Title X goals of providing ‘‘a broad range of acceptable and effective family planning methods and services.’’ PHSA sec. 1001(a). Prohibiting recipients from adding eligibility criteria for a reason other than the provision of Title X services ensures the broadest available pool of applicants for subawards and the use of federal resources in furtherance of statutory goals. As is currently the case, applicants for new and continuing Title X grants that do not provide all services directly will describe the process and criteria by which they select subrecipients. Following implementation of this new rule, the Department will review this information to determine an applicant’s eligibility to receive a new or continuing award. For new awards, the Department will assess whether any subrecipient restrictions are for reasons other than the subrecipient’s ability to provide 9 Stevenson AJ, Flores-Vazquez IM, Allgeyer RL, Schenkkan P, Potter JE. Effect of Removal of Planned Parenthood from the Texas Women’s Health Program. N Engl J Med. 2016 Mar 3;374(9):853–60. E:\FR\FM\19DER1.SGM 19DER1 91854 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations Title X services. For continuing awards, the Department will work with recipients to help entities come into compliance prior to an award being made. If, despite the Department’s assistance, compliance is not achieved, the Department will discontinue funding in accordance with all applicable rules and regulations. If available and as appropriate, this will include administrative appeals and a recoupment and re-awarding of funds. Further, if a current recipient amends the scope of its approved project by changing its process for selecting subrecipients, that request requires prior approval and the Department will apply the same review criteria. 45 CFR 75.308. srobinson on DSK5SPTVN1PROD with RULES B. Responses to Public Comments Overall, 145,303 comments were received. Approximately 91 percent (132,032) of the total comments received were in favor of the proposed rule. The vast majority of comments both favoring and opposing the rule were duplicate comments. Comments came from a wide variety of individuals and organizations, including private citizens, health care providers, religious organizations, patient advocacy groups, professional organizations, research institutions, consumer organizations, and state and federal agencies and representatives. Many of the comments dealt with a range of issues beyond the scope of this rulemaking including, but not limited to, the separation of church and state, additional confidentiality protections, provider fraud, and general opposition to Title X funding. A summary of the applicable comments, and the Department’s responses, follows below. Comment: One commenter stated the comment period was too short for the rule and did not allow enough time for response on its significant economic and federalism impacts. Response: Given the limited scope of this rulemaking, the Department believes that notice was sufficient because ‘‘interested parties [had] a reasonable opportunity to participate in the rulemaking process’’ and were not ‘‘deprived of the opportunity to present relevant information by lack of notice that the issue was there.’’ Am. Radio Relay League v. FCC, 524 F.3d 227, 236 (D.C. Cir. 2008) (citations omitted). In fact, the Department received over 145,000 responses to the notice of proposed rulemaking, many with detailed suggestions on different aspects of the proposed rule. Therefore, the Department does not believe that extending the comment period was necessary or warranted. VerDate Sep<11>2014 20:05 Dec 16, 2016 Jkt 241001 Comment: Several commenters suggested the Department lacks legal authority to issue a rule in this area. Response: The Department disagrees. The Title X statute explicitly provides rulemaking authority for the making of conditions for grants. 42 U.S.C. 300a– 4(a). The Department has engaged in rulemaking for this program on multiple occasions. See, e.g., 65 FR 41270 (July 3, 2000); 65 FR 49057 (Aug. 10, 2000); 53 FR 2922 (Feb. 2, 1988). In addition, courts, including the Supreme Court, have consistently upheld this authority. Rust v. Sullivan, 500 U.S. 173 (1991). On the very issue of state legislation affecting Title X, the U.S. Court of Appeals for the Tenth Circuit stated: ‘‘HHS has deep experience and expertise in administering Title X, and the great breadth of the statutory language suggests a congressional intent to leave the details to the agency . . . . Of course, administrative actions taken by HHS will often be reviewable under the Administrative Procedure Act, but only after the federal agency has examined the matter and had the opportunity to explain its analysis to a court that must show substantial deference.’’ Planned Parenthood of Kansas & Mid-Missouri v. Moser, 747 F.3d 814, 824–25 (10th Cir. 2014). The Department is choosing to exercise that authority to promulgate a rule that it believes, as discussed above, is ‘‘reasonably related to the purposes of the enabling legislation’’ (the standard to which the Supreme Court has held previous exercises of this authority). Mourning v. Family Publication Service, 411 U.S. 356, 369 (1973). Comment: Commenters stated the rule was not clear in how it applied to recipients who provide some services directly and contract out some services. Response: The rule applies to all project recipients whenever they make subawards for the provision of Title X services. It is not intended to require those who directly provide all Title X services to start providing subawards. However, if a project recipient makes subawards for any Title X services, it may not prohibit an entity from participating in the program as a subrecipient for reasons other than that entity’s ability to provide Title X services. Comment: Commenters stated clarification is needed about how the proposed rule will affect services at the state level and speculated that the proposed rule will cause a disruption in services. Response: The primary goals of the rule change are to ensure consistency of subrecipient participation, improve provision of services, and guarantee PO 00000 Frm 00212 Fmt 4700 Sfmt 4700 Title X resources are used to fulfill Title X goals. The final rule will be applied in a prospective manner, meaning with the submission of new competitive applications or, for recipients applying for non-competing funds, with the initiation of a new budget period. As a result, it is unlikely that the rule will cause disruption during a budget period, as each renewed budget period requires approval prior to an award. In the instance when a recipient makes a change to its process for selecting subrecipients in the middle of a budget period, if found to be out of compliance it may cause an interruption in the provision of services, but such midcycle changes are expected to be very rare. As previously stated, the Department will make every effort to help entities come into compliance, and will award replacement grants to other providers when necessary to minimize any disruption of services. The final regulation will not invalidate conflicting state laws. Instead, the regulation informs states with conflicting laws that if they intend to apply for new or continuing Title X funds, they would need to comply with federal law under which a recipient may not exclude an entity from participating for reasons other than its ability to provide Title X services. The rule will not interfere with statutory requirements in those states where recipients directly provide all Title X services, or where recipients select subrecipients based solely on their ability to provide Title X services. Comment: Commenters stated the proposed rule would allow Title X service providers that also provide abortion services to redirect their nonTitle X funds toward abortion services or use Title X funding to fund abortion. Response: Title X funds cannot be used for abortions. The Title X statute prohibits any of the funds appropriated under Title X to be used in programs where abortion is a method of family planning. PHSA sec.1008. Title X provides family planning and related reproductive health services such as: testing and counseling for sexually transmitted diseases (STDs), including HIV; contraceptive methods including method-specific counseling; breast and cervical cancer screening; pregnancy tests and counseling, and other related services to over four million low-income women, men, and adolescents each year. Additionally, beyond cost-sharing and program income requirements, federal grant programs do not generally have the authority to stipulate what recipients do with non-federal funds. See Planned Parenthood of C. and N. E:\FR\FM\19DER1.SGM 19DER1 srobinson on DSK5SPTVN1PROD with RULES Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations Ariz. v. State of Ariz., 718 F.2d 938, 945 (9th Cir. 1983), in which the court stated: ‘‘we hold that as a matter of law, the freeing up theory cannot justify withdrawing all state funds from otherwise eligible entities merely because they engage in abortion-related activities disfavored by the state.’’ The commenters also assume, without substantiation, that federal funding will supplant private funding for family planning, allowing the private funding to be used to fund abortions instead of additional family planning services and programs. According to the uniform grant rules, grants funds and any program-generated income must be used to further the objectives of the Title X program and would not be allowed to be diverted for non-allowable activities. 45 CFR 75.307 (e). Speculation about the indirect effects of Title X funding is not a sufficient basis to justify making subawards based on reasons other than the ability to provide Title X services. Comment: Commenters stated that Title X should fund sites that provide comprehensive primary care rather than sites providing primarily reproductive health care. Response: The Department appreciates the value of providers, such as federally qualified health centers (FQHCs), which deliver comprehensive primary care services in communities. The Department also respects states’ rights to spend their own (non-Federal) funds. However, the Title X program was specifically enacted to offer a broad range of family planning services, and not comprehensive primary care. While Title X has neither the authority nor purpose of providing comprehensive primary care, to the extent FQHCs may be the best providers of family planning services in a particular area, there is no prohibition on FQHCs being selected by project recipients as subrecipients. OPA’s efforts to ensure widespread access to quality family planning services is consistent with efforts to provide comprehensive care. Family planning is a subset of comprehensive care services, which are particularly important for women and men of reproductive age. Given the fact that family planning services are often not provided, or are provided with poor quality in some primary care settings,10 OPA efforts are focused on ensuring that quality family planning services are included within the broader set of 10 Wood, S., et al., Scope of family planning services available in Federally Qualified Health Centers. Contraception, 2014. 89(2): p. 85–90. VerDate Sep<11>2014 20:05 Dec 16, 2016 Jkt 241001 comprehensive preventive care needs of all Americans.11 In addition, women of reproductive age often report that their family planning provider is also their usual source of health care.12 Providers of family planning services serve as entry points for their clients to other essential health care services. Preconception care (PCC), which includes screening for obesity, smoking, and mental health, is a key service provided as part of high quality family planning care. PCC improves women and men’s health and can increase a person’s ability to conceive and to have a healthy birth outcome. In a nationally representative sample of publicly funded clinical administrators, conducted in 2013– 2014, written protocols for preconception care screening, which serve as instructions for clinicians providing these services, were more common in dedicated reproductive health centers compared with primary care centers and health departments.13 Comment: Commenters stated that the proposed rule would be discriminatory against men and adolescents because the ‘‘notice shows HHS intends to impose a preference for prioritizing funding to ‘specific providers with a reproductive health focus.’’’ Response: Title X regulations require projects to provide services without regard to religion, race, color, national origin, handicapping condition, age, sex, number of pregnancies, or marital status. 42 CFR 59.5(a)(4). The Title X statute specifically mentions adolescents as a priority population for receiving Title X services. In fact, in 2015 approximately 44 percent of the Title X clients served were between the ages of 15 and 24 years. Moreover, OPA funds projects to improve outreach and male-centered services in an effort to increase the number of men who use Title X services. Between 2003 and 2014, Title X providers served a total of 3.8 million males, nearly doubling the percentage of male family planning users from 4.5 percent in 2003 to 8.8 percent in 2014.14 In addition, the 2014 11 CDC, Providing Quality Family Planning Services: Recommendations of the CDC and the U.S. Office of Population Affairs. MMWR Recommendations and Reports, 2014. 63(4): p. 1– 54. 12 Frost J. U.S. women’s use of sexual and reproductive health services: Trends, sources of care and factors associated with use, 1995–2010. New York, NY: Guttmacher Institute; 2013. 13 Robbins CL, Gavin L, Zapata LB, Carter MW, Lachance C, Mautone-Smith N, Moskosky SB. Preconception Care in Publicly Funded U.S. Clinics That Provide Family Planning Services. Am J Prev Med. 2016 Sep;51(3):336–43. 14 Besera, G, Moskosky, S., Et. Al. (2016), Male Attendance at Title X Family Planning Clinics— PO 00000 Frm 00213 Fmt 4700 Sfmt 4700 91855 report Providing Quality Family Planning Services: Recommendations of CDC and the U.S. Office of Population Affairs 15 (QFP) identifies a specific set of family planning and related services that should be provided to men and adolescents. Comment: Commenters stated that use of the word ‘‘effectively’’ in the proposed rule is vague. The commenters asserted that it would be difficult to determine which policies were allowable under the rule without a clear definition of ‘‘effectively.’’ Response: As noted previously, after reviewing the relevant comments, the Department recognizes the challenge of measuring effectiveness across all grant recipients and subrecipients as a condition of participation, and is eliminating the qualifier ‘‘effectively’’ from the regulatory language. The amendment now reads, ‘‘No recipient making subawards for the provision of services as part of its Title X project may prohibit an entity from participating for reasons other than its ability to provide Title X services.’’ The Department believes that the revised language addresses the Department’s concern that certain Title X recipients have imposed restrictions on subrecipients that are designed to further policy objectives other than the ability to provide Title X services. A recipient imposing a ban on particular types of providers or imposing a tiering structure is prohibiting subrecipients from participating on factors other than the ability to provide Title X services. Only qualifications of recipients tied to Title X objectives, such as the ability to make rapid and effective use of federal funds and compliance with Title X regulations, are relevant factors. The revised language is clear and does not depend on the meaning of ‘‘effectively.’’ Comment: Commenters stated that the Title X program lacks a clear evidencebased process for establishing program guidelines. Response: The Department has adopted an evidence-based approach for defining program guidelines, such as what constitutes ‘‘quality’’ family planning services. Quality family planning services were defined in the 2014 clinical recommendations, Providing Quality Family Planning United States 2003–2014. Morbidity and Mortality Weekly Report, 65(23), 602–605. 15 Gavin, L., & Pazol, K. (2016). Update: Providing Quality Family Planning Services — Recommendations from CDC and the U.S. Office of Population Affairs, 2015. MMWR. Morbidity and Mortality Weekly Report MMWR Morb. Mortal. Wkly. Rep., 65(9), 231–234. E:\FR\FM\19DER1.SGM 19DER1 91856 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations Services (QFP).16 These recommendations were developed using an evidence-based approach, and adopted the Institute of Medicine’s (IOM) definition of health care ‘‘quality,’’ which is: ‘‘The degree to which health care services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge.’’ 17 srobinson on DSK5SPTVN1PROD with RULES The process of developing QFP recommendations was rigorous and aligned with current national and international standards for guidelines development; a priority was placed on clinical services for which there was evidence of effectiveness as defined by the presence of research demonstrating a protective impact on a behavioral or health outcome.18 19 For this reason, the provision of quality care is very likely to result in a change in health outcomes. This emphasis on improving the quality of care is consistent with global and national efforts that have highlighted its importance to achieving key outcomes. For example, quality care has been identified by the Institute of Medicine (IOM) and other leaders in health care delivery as the driving factor that will achieve the goals of improved health, client experience and cost savings.20 21 OPA’s development and implementation of the QFP recommendations in the Title X program also demonstrates that steps have been taken to address comments from another IOM report published in 2009.22 The 2009 report urged OPA to 16 CDC, Providing Quality Family Planning Services: Recommendations of the CDC and the U.S. Office of Population Affairs. MMWR Recommendations and Reports, 2014. 63(4): p. 1–54. 17 Institute of Medicine, Crossing the quality chasm: A new health system for the 21st century, ed. Committee on Quality of Health Care in America. 2001, Washington, DC: National Academies of Science. 18 CDC, Providing Quality Family Planning Services: Recommendations of the CDC and the U.S. Office of Population Affairs. MMWR Recommendations and Reports, 2014. 63(4): p. 1–54. 19 Gavin, L., S.B. Moskosky, and W. Barfield, Developing U.S. Recommendations for Providing Quality Family Planning Services. American Journal of Preventive Medicine, 2015. 49((2) Supplement 1). 20 Institute of Medicine, Crossing the quality chasm: A new health system for the 21st century, ed. Committee on Quality of Health Care in America. 2001, Washington, DC: National Academies of Science. 21 Berwick, D., T. Nolan, and J. Whittington, The Triple Aim: Care, Health, and Cost. Health Affairs, 2008. 27(3): p. 759–769. 22 Institute of Medicine, A Review of the HHS Family Planning Program: Mission, Management, and Measurement of Results, ed. A. Stith Butler and E. Clayton. 2009, Washington, DC: National Academies Press. VerDate Sep<11>2014 20:05 Dec 16, 2016 Jkt 241001 ensure that its recipients follow ‘‘current evidence-based professional clinical recommendations,’’ and consider ‘‘making the Title X guidelines the standard used by all federal health programs.’’ Comment: Commenters questioned the legitimacy of the findings of the study by Robbins et al.23 related to Title X service providers cited by the Department including challenging the assumption that the existence of written clinical protocols indicated higher quality care. Response: Regarding the findings of the study by Robbins et al.,24 the Department clarifies that written clinical protocols are not printed worksheets given to clients. Rather, they are explicit guidance that clinicians use to provide services in accordance with nationally recognized standards of care. Furthermore, written clinical protocols are associated with higher quality care.25 Comment: Commenters requested information about how OPA will ensure that compliance with and enforcement of the proposed rule are integrated into the final rule and Title X award process. Response: The Department believes that relying on our existing enforcement mechanisms rather than developing new reporting requirements or new certification requirements will be the most efficient means of ensuring compliance. The primary goals of the rule change are to ensure consistency of subrecipient participation, improve provision of services, and guarantee Title X resources are used to fulfill Title X goals. As part of the funding opportunity announcement (FOA) for each grant cycle, applicants are required to describe how their projects will address Title X requirements. This includes, but is not limited to, fully describing if they will not provide all services directly, the process and selection criteria used, or to be used, to select subrecipients, service sites and providers, including a description of eligible entities for funding as 23 Robbins, C.L., Gavin, L., Zapata, L.B., Carter, M.W., Lachance, C., Mautone-Smith, N., & Moskosky, S.B. (2016). Preconception Care in Publicly Funded U.S. Clinics That Provide Family Planning Services. American Journal of Preventive Medicine. 24 Robbins, C.L., Gavin, L., Zapata, L.B., Carter, M.W., Lachance, C., Mautone-Smith, N., & Moskosky, S.B. (2016). Preconception Care in Publicly Funded U.S. Clinics That Provide Family Planning Services. American Journal of Preventive Medicine. 25 Committee on Patient Safety and Quality Improvement. Committee Opinion No. 629: Clinical guidelines and standardization of practice to improve outcomes. Obstet Gynecol. 2015 Apr;125(4):1027–9. PO 00000 Frm 00214 Fmt 4700 Sfmt 4700 subrecipients.26 Recipients applying for non-competing continuation funds (those with part of their project period remaining after their current budget period, for example, in year one or two of a three-year project period) will also be required to describe, if they will not provide all services directly, the process and selection criteria used or to be used for selection of service sites and providers, including a description of eligible entities for funding as subrecipients. For recipients applying for non-competing continuation funds, the Department will work with them to help entities come into compliance prior to an award being made. If, despite the Department’s assistance, compliance is not achieved, the Department will discontinue funding in accordance with all applicable rules and regulations. If available and as appropriate, this will include administrative appeals and a recoupment and re-awarding of funds. Further, if a current recipient amends the scope of its approved project by changing its process for selecting subrecipients, that request requires prior approval and the Department will apply the same review criteria. 45 CFR 75. Additionally, recipients are subject to uniform grant rule requirements related to subawards, 45 CFR 75.352, and all other applicable rules. Comment: Commenters stated concern that the Department did not consider the alternative of modifying the grant process to make it easier for providers restricted from being eligible as a subrecipient in specific states to receive grants directly from Title X. Response: The grants process is established by the Department to ensure integrity and accountability in the award and administration of grants, and to protect federal resources across all Departmental programs. As a result, the Department does not consider suggestions to change the grants process for specific applicants under Title X a viable alternative to this rule. Applicants who meet the eligibility criteria in the funding opportunity announcement (FOA) may submit, directly, an application for consideration as a Title X recipient, independent of the size of the entity. Applicants should also have the option to be considered eligible as a subrecipient. The rule addresses recipients or applicants that propose excluding potential subrecipient entities 26 United States of America. Office of the Assistant Secretary for Health. Office of Population Affairs. Announcement of Anticipated Availability of Funds for Family Planning Services Grants. 5 Oct. 2016. Accessed on 2 Dec. 2016 at https:// www.hhs.gov/opa/sites/default/files/FY-17-Title-XFOA-New-Competitions.pdf. E:\FR\FM\19DER1.SGM 19DER1 srobinson on DSK5SPTVN1PROD with RULES Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations based on criteria other than the entity’s ability to provide Title X services. Comment: Commenters stated that states should not have to fund Planned Parenthood because these commenters claim the organization has perpetuated Medicaid fraud. Commenters also stated that the proposed rule would allow for preferential treatment of Planned Parenthood and that by allowing Title X funds to be awarded to Planned Parenthood it could create a monopoly in family planning service providers. Response: No comment provided evidence to support allegations that any Title X provider has engaged in Medicaid fraud. Entities that are suspended, excluded or debarred from participation in federal health care programs are not eligible to receive awards under the Title X program. Furthermore, the Uniform Administrative Requirements, Cost Principles and Audit Requirements for HHS Awards stipulate requirements for making financial assistance awards to applicants and existing recipients that include the need to take into consideration the ability of the applicant to use federal funds properly in the manner intended. 45 CFR 75.205. These rules also require an assessment of the applicant’s ability to meet legal, financial, and administrative obligations prior to receiving federal funds, as well as during the entire duration of the project period in which the federal funds are expended. This is accomplished by several methods, including, but not limited to, the awarding program office and grants management office conducting a risk assessment, which directly assesses the applicant for financial stability, quality of management systems, history of performance, audit reports and findings, and ability to implement effectively statutory, regulatory, and other requirements. The awarding program office and the grants management office also evaluate the applicant using the Federal Awardee Performance and Integrity Information System (FAPIIS). These steps must be completed prior to the initial award and are assessed throughout the entire project period. Additionally, Government-wide suspension and debarment activities are used to safeguard federal funds by disallowing awards to organizations and their principals based on a lack of business honesty or integrity. Federal agencies only do business with those organizations, and only provide funding for those principals, that have a satisfactory record of business ethics and integrity. 2 CFR part 180, subpart D. The rule will not provide any preferential treatment, nor disadvantage VerDate Sep<11>2014 20:05 Dec 16, 2016 Jkt 241001 any applicant, from receiving Title X family planning service grants. In contrast to the assertion made by the commenter, this final rule encourages providers to compete based on their ability to provide Title X services. The rule will ensure consistent opportunity of subrecipient participation across geographic areas, and guarantee Title X resources are allocated on the basis of fulfilling Title X goals. This final rule does not favor particular providers, and does not deter competition between providers; it requires recipients to evaluate potential subrecipients based on their ability to provide Title X services. As a result, new and existing providers will be able to receive Title X funding based on their ability to provide Title X services. III. Regulatory Impact Analysis A. Comments Received in Response to Executive Order 13132 Federalism Review Comment: Several commenters were critical of the Federalism analysis performed under Executive Order 13132. These commenters stated the rule was targeted at states and their traditional authority over health care. Additionally, many commenters suggested the proposed program requirement violated the Tenth Amendment, the Spending Clause, and preemption principles. Several commenters additionally asserted that Title X federal funding conditions should not interfere with state priorities, even when using federal funds. Response: Title X was enacted in order for family planning projects to offer a broad range of family planning methods and services. It was not enacted as a federal-state cooperative statute, as is evidenced by the eligibility of nonprofit, private entities to apply for grants directly. Currently, 40 nonprofit entities receive Title X funding directly from the Department. Further, every state has at least one Title X recipient, and 13 states and the District of Columbia, have only nonprofit, private recipients. The Supreme Court has long been clear that the Tenth Amendment limitation on the Congressional regulation of state affairs does not limit the range of conditions legitimately placed on federal grants. Oklahoma v. Civil Serv, Comm’n, 330 U.S. 127 (1947). The Department may attach conditions to the awarding of funds to carry out best its statutory goals. South Dakota v. Dole, 483 U.S. 203 (1987); Rust v. Sullivan, 500 U.S. 173, 191 (1991) (‘‘We have recognized that Congress’ power to allocate funds for PO 00000 Frm 00215 Fmt 4700 Sfmt 4700 91857 public purposes includes an ancillary power to ensure that those funds are properly applied to the prescribed use.’’) The possible loss of future Title X grants does not amount to coercing the states (or nonprofit private entities) to capitulate to program requirements. Similarly, as the rule only attaches requirements to the receipt of federal funds, it would not invalidate any state laws with which it conflicts. States often opt not to apply for federal grant funds where the federal program requirement conflicts with state law priorities. Therefore, there is no preemption of state laws caused by this rule. It must also be emphasized that this rule applies to all Title X project recipients, not only to project recipients that represent state health departments. As the NPRM explained, ‘‘All project recipients that do not provide services directly must only choose subrecipients on the basis of their ability to deliver Title X required services. Nonprofit recipients that do not provide all services directly must also allow any eligible providers that can provide Title X services in a given area to apply to provide those services, and they may not continue or begin contracting (or subawarding) with providers simply because they are affiliated in some way that is unrelated to the programmatic objectives of Title X.’’ 81 FR at 61643. Comment: One commenter also suggested that the proposed rule violated spending clause principles. Specifically, the commenter argued, given the vagueness of ‘‘effectively,’’ grant recipients would not be on clear notice of what would be expected of them. Response: As noted above, the Department eliminated the qualifier ‘‘effectively’’ from the regulatory language. The amendment now reads, ‘‘No recipient making subawards for the provision of services as part of its Title X project may prohibit an entity from participating for reasons other than its ability to provide Title X services.’’ As explained previously in this preamble, restrictions placed on organizations unrelated to the delivery of Title X services and tiering approaches would not be allowed. As this requirement will only be applied in future FOAs and continuation funding applications, there will be additional opportunities for the Department to provide guidance consistent with this final rule and entities may seek further guidance from the Department as to what other practices may be problematic before applying before applying for funds. Thus, applicants will have the option to E:\FR\FM\19DER1.SGM 19DER1 91858 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations srobinson on DSK5SPTVN1PROD with RULES apply for funds knowing the relevant conditions, or to decline to do so. As stated in the NPRM, Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a final rule that imposes substantial direct requirement costs on state and local governments, preempts state law, or otherwise has federalism implications. This rule will not cause substantial economic impact on states or nonprofit private entities. It may implicate state laws only if those states with contrary laws wish to apply for federal Title X funds. States that choose to do so and also choose to subaward Title X funds will be required to do so in a manner that considers only the ability of the subrecipients to meet the statutory objectives of Title X. B. Comments Received in Response to Economic Impact Analysis Under E.O. 12866 Comment: Commenters stated concern that the Department did not consider regulatory alternatives. Response: This regulation is the simplest way to achieve the goal of ensuring that Title X recipients determine subrecipients based on their ability to provide Title X services. As a result, more complex regulatory alternatives in the impact analysis were not discussed. The Department did consider the no action alternative, but concluded that it would not further the statutory goals served by the regulation. These commenters and others described various regulatory alternatives, and these alternatives, such as direct grants, are discussed in the final rule. Comment: Commenters stated concern that the impact analysis did not address impacts to states and service providers affected by the rule. Response: Contrary to the assertions made by the commenters, the impact analysis did estimate costs borne by recipients, including recipients that represented state health departments, associated with evaluating the rule and modifying policies to ensure compliance with the rule, and the impact analysis noted that the rule may result in some shifts in funding from some family planning services providers to other family planning services providers. Comment: Commenters stated concern that the impact analysis did not address the consequences of states electing not to participate in Title X. Response: The primary goal of the impact analysis was to determine the societal impact of the rule. If a potential recipient decides not to participate in Title X as a result of the rule, this may result in a reallocation of resources, and VerDate Sep<11>2014 20:05 Dec 16, 2016 Jkt 241001 under certain circumstances this could result in a reduction in the utilization of services in some areas. If Title X funding and the associated services declined in a specific area, this would correspond with a commensurate increase in services in other areas due to the reallocation of funding. Although the Department does not anticipate this to occur widely, this shift would represent an indirect transfer of federal funding for health care services from individuals in some areas to individuals in other areas, which the Department estimates would have no net effect on total Title X expenditures by the United States. 1. Introduction The Department has examined the impact of this final rule under Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), the Regulatory Flexibility Act of 1980 (Pub. L. 96–354, September 19, 1980), the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4, March 22, 1995), and Executive Order 13132 on Federalism (August 4, 1999). Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health, and safety effects; distributive impacts; and equity). Executive Order 13563 is supplemental to and reaffirms the principles, structures, and definitions governing regulatory review as established in Executive Order 12866. The Department expects that this final rule will not have an annual effect on the economy of $100 million or more in any one year. Therefore, this rule is not an economically significant regulatory action as defined by Executive Order 12866 or a major rule under either the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1501, or the Congressional Review Act, 5 U.S.C. 801. The Regulatory Flexibility Act (RFA) requires agencies that issue a regulation to analyze options for regulatory relief of small businesses if a rule has a significant impact on a substantial number of small entities. The RFA generally defines a ‘‘small entity’’ as (1) a proprietary firm meeting the size standards of the Small Business Administration; (2) a nonprofit organization that is not dominant in its field; or (3) a small government jurisdiction with a population of less than 50,000 (States and individuals are PO 00000 Frm 00216 Fmt 4700 Sfmt 4700 not included in the definition of ‘‘small entity’’). For similar rules, the Department considers a rule to have a significant economic impact on a substantial number of small entities if at least five percent of small entities experience an impact of more than three percent of revenue. The Department anticipates that the final rule will not have a significant economic impact on a substantial number of small entities. Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing ‘‘any rule that includes any Federal mandate that may result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.’’ The current threshold after adjustment for inflation is $146 million, using the most current (2015) implicit price deflator for the gross domestic product. This final rule would not trigger the Unfunded Mandate Reform Act because it will not result in any expenditure by states or other government entities. 2. Summary of the Final Rule Since 2011, 13 states have taken actions to restrict participation by certain types of providers as subrecipients in the Title X program based on reasons other than the providers’ ability to provide Title X services. In at least several instances, this has led to disruption of services or reduction of services in instances where a public entity, such as a state health department, is a Title X recipient and makes subawards to subrecipients for the provision of services. In response to these actions, this final rule requires that any Title X recipient subawarding funds for the provision of Title X services not prohibit an entity from participating as a subrecipient for reasons other than its ability to provide Title X services. 3. Need for the Final Rule Certain states have policies in place that limit access to family planning services by restricting specific types of providers from participating as subrecipients in the Title X program. These policies, and varying court decisions on their legality, have led to uncertainty among recipients, inconsistency in program administration, and reduced access to services for Title X priority populations. These restrictive state policies exclude certain entities for reasons other than their ability to provide Title X services. E:\FR\FM\19DER1.SGM 19DER1 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations As a result of these state policies, providers previously determined by Title X recipients to be eligible providers of family planning services have been excluded from participation in the Title X program. In turn, the exclusion of these providers is associated with a reduction in the number of Title X service sites, reduced geographic availability of Title X services, and fewer Title X clients served between 2011 and 2014.27 28 This final regulation seeks to ensure that state and nonprofit private entity policies regarding Title X do not direct or restrict funding to subrecipients for reasons other than their ability to provide Title X services. Reducing access to Title X services has many adverse effects. Title X services have a large effect on reducing the number of unintended pregnancies and unplanned births in the United States. For example, the Guttmacher Institute estimates that in 2014 publicly funded contraceptive care at Title Xfunded clinics has helped women to prevent approximately 50 percent of an estimated total 1.9 million unintended pregnancies prevented by publically supported services nationally, and 70 percent (904,000) of the 1.3 million unintended pregnancies prevented by women with the help of publicly funded providers. The 904,000 unintended pregnancies would have resulted in an estimated 439,000 unplanned births, 326,000 abortions, and 139,000 miscarriages.29 The Title X program also helps prevent the spread of STDs by providing screening and treatment.30 The program helps reduce maternal morbidity and mortality, as well as low birth weight, preterm birth, and infant mortality.31 32 Title X, as it exists today, srobinson on DSK5SPTVN1PROD with RULES 27 Fowler, CI, Lloyd, S, Gable, J, Wang, J, and McClure, E. (November 2012). Family Planning Annual Report: 2011 National Summary. Research Triangle Park, NC: RTI International. 28 Fowler, C. I., Gable, J., Wang, J., & Lasater, B. (2015, August). Family Planning Annual Report: 2014 National Summary. Research Triangle Park, NC: RTI International. 29 Frost JJ, Frohwirth L, and Zolna MR. Contraceptive Needs and Services, 2014. New York: Guttmacher Institute, 2015, <https:// www.guttmacher.org/report/contraceptive-needsand-services-2014-update>. 30 Fowler, CI, Gable, J, Wang, J, and McClure, E. (November 2013). Family Planning Annual Report: 2012 National Summary. Research Triangle Park, NC: RTI International. 31 Kavanaugh ML and Anderson RM, Contraception and Beyond: The Health Benefits of Services Provided at Family Planning Centers, New York: Guttmacher Institute, 2013 <https:// www.guttmacher.org/sites/default/files/report_pdf/ health-benefits.pdf>. 32 Preconception Health and Reproductive Life Plan. (n.d.). Retrieved May 18, 2016, from https:// www.hhs.gov/opa/title-x-family-planning/ initiatives-and-resources/preconceptionreproductive-life-plan/. VerDate Sep<11>2014 20:05 Dec 16, 2016 Jkt 241001 is also very cost beneficial: every grant dollar spent on family planning saves an average of $7.09 in Medicaid-related costs.33 In addition to reducing access to the Title X program, these policies that restrict specific types of providers from being eligible to participate in the Title X project may reduce the quality of Title X services, as described previously. Research has shown that providers with a reproductive health focus provide services that more closely align with the statutory and regulatory goals and purposes of the Title X program.34 In particular, these entities provide a broader range of contraceptive methods on-site, are more likely to have written protocols that assist clients with initiating and continuing contraceptive use without barriers, disproportionately serve more clients in need of family planning services, and may provide higher quality services.35 The Department is concerned that policies that restrict certain types of entities from becoming subrecipients for reasons other than their ability to provide Title X services could limit the set of available providers for reasons unrelated to the quality of family planning services they provide. This, in turn, could reduce access to care and may reduce the availability of high quality family planning services. This regulation takes the simplest approach to reverse the adverse effects of policies that have excluded certain entities for reasons other than their ability to provide Title X services. 4. Analysis of Benefits and Costs a. Benefits to Potential Title X Clients and Reduced Federal Expenditures This final rule directly prohibits Title X recipients that subaward funds for the provision of Title X services from excluding an entity from participating for reasons other than its ability to provide Title X services. Following the implementation of policies this regulation would address, states shifted funding away from family planning 33 Frost, J.J., Sonfield, A., Zolna, M.R., & Finer, L.B. (2014). Return on Investment: A Fuller Assessment of the Benefits and Cost Savings of the US Publicly Funded Family Planning Program. Milbank Quarterly, 92(4), 696–749. 34 Robbins, C.L., Gavin, L., Zapata, L.B., Carter, M.W., Lachance, C., Mautone-Smith, N., & Moskosky, S.B. (2016). Preconception Care in Publicly Funded U.S. Clinics That Provide Family Planning Services. American Journal of Preventive Medicine. 35 Robbins, C.L., Gavin, L., Zapata, L.B., Carter, M.W., Lachance, C., Mautone-Smith, N., & Moskosky, S.B. (2016). Preconception Care in Publicly Funded U.S. Clinics That Provide Family Planning Services. American Journal of Preventive Medicine. PO 00000 Frm 00217 Fmt 4700 Sfmt 4700 91859 service providers previously determined to be eligible. The Department believes that this final rule is likely to undo these effects. To the extent that a state may come into compliance with this regulation by relinquishing its Title X grant or not applying to continue a Title X grant, other organizations could compete for Title X funding to deliver services in areas where a state entity previously subawarded funds for the delivery of Title X services. In turn, the Department expects that this has the potential to reverse the associated reduction in access to Title X services and deterioration of outcomes for affected populations. As previously stated, research has shown that every grant dollar spent on family planning saves an average of $7.09 in Medicaid-related expenditures.36 In addition to reducing spending, these services improve the health and quality of life for affected individuals, suggesting that the return on investment to these family planning services is even higher. For example, these services reduce the incidence of invasive cervical cancer and sexually transmitted infections in addition to improving birth outcomes through reductions in preterm and low birthweight births.37 Data show that specific provider types with a reproductive health focus have been shown to serve disproportionately more clients in need of publicly funded family planning services than do public health departments and FQHCs.38 Therefore, eliminating restrictions against certain providers has the potential to result in an increased number of clients served and services delivered by the Title X program. b. Costs to the Federal Government Associated With Disseminating Information About the Rule and Evaluating Grant Applications for Conformance With Policy Following publication of the final rule, OPA will educate Title X program recipients and applicants about the requirement not to prohibit an entity from participating for reasons other than 36 Frost, J.J., Sonfield, A., Zolna, M.R., & Finer, L.B. (2014). Return on Investment: A Fuller Assessment of the Benefits and Cost Savings of the US Publicly Funded Family Planning Program. Milbank Quarterly, 92(4), 696–749. 37 Frost, J.J., Sonfield, A., Zolna, M.R., & Finer, L.B. (2014). Return on Investment: A Fuller Assessment of the Benefits and Cost Savings of the US Publicly Funded Family Planning Program. Milbank Quarterly, 92(4), 696–749. 38 Frost JJ, Zolna MR and Frohwirth L, Contraceptive Needs and Services, 2010, New York: Guttmacher Institute, 2013, <https:// www.guttmacher.org/pubs/win/contraceptiveneeds-2010.pdf.> E:\FR\FM\19DER1.SGM 19DER1 91860 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Rules and Regulations srobinson on DSK5SPTVN1PROD with RULES its ability to provide Title X services. OPA will send a letter summarizing the change to current recipients of Title X funds and post the letter to its Web site. Language conforming to this final rule will be included in forthcoming FOAs and continuation application guidance. OPA also has other existing channels for disseminating information to stakeholders. Therefore, based on previous experience, the Department estimates that preparing and disseminating these materials will require approximately one to three percent of a full-time equivalent OPA employee at the GS–12 step 5 level. Based on federal wage schedule for 2016 in the Washington, DC area, GS–12 step 5 level corresponds to an annual salary of $87,821. The salary cost is doubled to account for overhead and benefits. As a result, the Department estimates a cost of approximately $1,800–$5,300 to disseminate information following publication of the final rule. c. Grant Recipient Costs To Evaluate and Implement the Policy Change The Department expects that stakeholders, including grant applicants and recipients potentially affected by this final policy change, will process the information and decide how to respond. This change will not affect the majority of current recipients and, as a result, the majority of current recipients will spend very little time reviewing these changes before deciding that no change on their part is required. For the states that currently hold Title X grants and have laws or policies restricting eligibility of Title X subrecipients based on reasons other than their ability to deliver Title X services, the final rule may implicate the state’s law or policy. State agencies that currently restrict subrecipients would need to consider their current practices carefully in order to comply with this final rule if they wish to continue obtaining Title X grants and engaging subrecipients. The Department estimates that current and potential recipients will spend an average of one to two hours processing the information and deciding what action to take. The Department notes that individual responses are likely to vary, as many parties unaffected by these changes will spend a negligible amount of time in response to these changes. According to the U.S. Bureau of Labor Statistics,1 the average hourly wage for a chief executive in state government is $54.26, which the Department believes is a good proxy for the individuals who will spend time on these activities. After adjusting upward by 100 percent to account for overhead and benefits, it is estimated that the per- VerDate Sep<11>2014 20:05 Dec 16, 2016 Jkt 241001 hour cost of a state government executive’s time is $108.52. Thus, the average cost per current or potential grant recipient to process this information and decide upon a course of action is estimated to be $108.52– $217.04. OPA will disseminate information to an estimated 89 Title X grant recipients. As a result, it is estimated that dissemination will result in a total cost of approximately $9,700– $19,300. Date: December 12, 2016. Sylvia M. Burwell, Secretary. List of Subjects in 42 CFR part 59 Birth control, Family planning, Grant programs. Therefore, under the authority of section 1006 of the Public Health Service Act as amended, and for the reasons stated in the preamble, the Department amends 42 CFR part 59 as follows: d. Summary of Impacts Public funding for family planning services has the potential to shift to providers that see a higher number of patients and provide higher quality services. Increases in the quantity and quality of Title X service utilization could lead to fewer unintended pregnancies, improved health outcomes, reduced Medicaid costs, and increased quality of life for many individuals and families. The final rule’s impacts will take place over a long period of time, as it will allow for the continued flow of funding to provide family planning services for those most in need, and it will prevent future attempts to prohibit Title X funding to current and potential subrecipients for reasons other than their ability to meet the objectives of the Title X program. The Department estimates approximate costs in the range of $11,400–$24,600 in the first year following publication of the final rule. This rule is beneficial to society in increasing access to and quality of care. e. Analysis of Regulatory Alternatives The Department carefully considered the option of not pursuing regulatory action. However, as discussed previously, not pursuing regulatory action would allow the continued denial of Title X funds to entities for reasons other than their ability to provide Title X services. This, in turn, means accepting reductions in access to and quality of services to populations who rely on Title X. As a result, the Department chose to pursue regulatory action. C. Paperwork Reduction Act of 1995 The amendments in this rule will not impose any additional data collection requirements beyond those already imposed under the current information collection requirements that have been approved by the Office of Management and Budget. PO 00000 Frm 00218 Fmt 4700 Sfmt 4700 PART 59—GRANTS FOR FAMILY PLANNING SERVICES 1. The authority citation for Part 59 continues to read as follows: ■ Authority: 42 U.S.C. 300a–4. 2. Section 59.3 is revised to read as follows: ■ § 59.3 Who is eligible to apply for a family planning services grant or to participate as a subrecipient as part of a family planning project? (a) Any public or nonprofit private entity in a State may apply for a grant under this subpart. (b) No recipient making subawards for the provision of services as part of its Title X project may prohibit an entity from participating for reasons other than its ability to provide Title X services. [FR Doc. 2016–30276 Filed 12–14–16; 8:45 am] BILLING CODE 5140–34–P DEPARTMENT OF TRANSPORTATION Pipeline and Hazardous Materials Safety Administration 49 CFR Parts 191 and 192 [Docket No. PHMSA–2016–0016; Amdt. Nos. 191–24; 192–122] RIN 2137–AF22 Pipeline Safety: Safety of Underground Natural Gas Storage Facilities Pipeline and Hazardous Materials Safety Administration (PHMSA), Department of Transportation (DOT). ACTION: Interim final rule. AGENCY: This interim final rule (IFR) revises the Federal pipeline safety regulations to address critical safety issues related to downhole facilities, including wells, wellbore tubing, and casing, at underground natural gas storage facilities. This IFR responds to Section 12 of the Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2016, which was enacted following the serious SUMMARY: E:\FR\FM\19DER1.SGM 19DER1

Agencies

[Federal Register Volume 81, Number 243 (Monday, December 19, 2016)]
[Rules and Regulations]
[Pages 91852-91860]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-30276]


-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

42 CFR Part 59

RIN 937-AA04


Compliance With Title X Requirements by Project Recipients in 
Selecting Subrecipients

AGENCY: Office of Population Affairs, Office of the Secretary, 
Department of Health and Human Services.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Department is amending the regulations that apply to Title 
X Project Grants for Family Planning Services. The final rule amends 
eligibility requirements to require that no recipient making subawards 
for the provision of services as part of its Title X project may 
prohibit an entity from participating for reasons other than its 
ability to provide Title X services.

DATES: This Rule is effective on January 18, 2017.

FOR FURTHER INFORMATION CONTACT: Susan B. Moskosky, MS, WHNP-BC, Office 
of Population Affairs (OPA), 200 Independence Avenue SW., Suite 716G, 
Washington, DC 20201; telephone (240) 453-2800; email: 
OPA_Resource@hhs.gov.

SUPPLEMENTARY INFORMATION: On September 7, 2016, The Department issued 
a proposed rule seeking comment on amending eligibility criteria under 
the Title X family planning services program so that no recipient 
making subawards for the provision of services as part of its Title X 
project may prohibit an entity from participating for reasons unrelated 
to its ability to provide Title X services effectively. 81 FR 61639. As 
reiterated below, the proposed rule set forth the need for the 
amendment and sought public input.

I. Background

A. Title X Background

    As discussed in the Notice of Proposed Rule Making (NPRM), the 
Title X Family Planning Program, Public Health Service Act (PHSA) secs. 
1001 et seq. [42 U.S.C. 300], was enacted in 1970 as part of the Public 
Health Service Act. Administered by the Office of Population Affairs 
(OPA) within the Office of the Assistant Secretary for Health (OASH), 
Title X is the only federal program focused solely on providing family 
planning and related preventive services. In 2015, more than 4 million 
individuals received services through more than 3,900 Title X-funded 
health centers.\1\
---------------------------------------------------------------------------

    \1\ Fowler, C.I., Gable, J., Wang, J., & Lasater, B. (2016, 
August). Family Planning Annual Report: 2015 National Summary. 
Research Triangle Park, NC: RTI International.
---------------------------------------------------------------------------

    Title X serves women, men, and adolescents to enable individuals to 
determine freely the number and spacing of children. By law, services 
are provided to low-income individuals at no or reduced cost. Services 
provided through Title X-funded health centers assist in preventing 
unintended pregnancies and achieving pregnancies that result in 
positive birth outcomes. These services include contraceptive services, 
pregnancy testing and counseling, preconception health services, 
screening and treatment for sexually transmitted diseases (STD), HIV 
testing and referral for treatment, services to aid with achieving 
pregnancy, basic infertility services, and screening for cervical and 
breast cancer. By statute, Title X funds are not available to programs 
where abortion is a method of family planning (PHSA sec. 1008). 
Additionally, Title X implementing regulations require that all 
pregnancy options counseling shall be neutral and nondirective. 42 CFR 
59.5(a)(5)(ii).
    The Title X statute authorizes the Secretary ``to make grants to 
and enter into contracts with public or nonprofit private entities to 
assist in the establishment and operation of voluntary family planning 
projects which shall offer a broad range of acceptable and effective 
family planning methods and services (including natural family planning 
methods, infertility services, and services for adolescents).'' PHSA 
sec. 1001(a). In addition, in awarding Title X grants and contracts, 
the Secretary must ``take into account the number of patients to be 
served, the relative need of the applicant, and its capacity to make 
rapid and effective use of such assistance.'' PHSA sec. 1001(b). The 
statute also requires that local and regional entities ``shall be 
assured the right to apply for direct grants and contracts.'' PHSA sec. 
1001(b). The statute delegates rulemaking authority to the Secretary to 
set the terms and conditions of these grants and contracts. PHSA sec. 
1006. These regulations were last revised in 2000. 65 FR 41270 (July 3, 
2000).
    Title X regulations delineating the criteria used to decide which 
family planning projects to fund and in what amount, include, among 
other factors, the extent to which family planning services are needed 
locally, the number of patients (and, in particular, low-income 
individuals) to be served, and the adequacy of the applicant's 
facilities and staff. 42 CFR 59.7. Project recipients receive funds 
directly from the federal government following a competitive process. 
The project recipients may elect to provide Title X services directly, 
subaward funds to subrecipients, or both. The Department is responsible 
for monitoring and evaluating the project recipient's performance and 
outcomes, and each project recipient that subawards to eligible 
subrecipients is responsible for monitoring the performance and 
outcomes of those subrecipients. The subrecipients must meet the same 
federal requirements as the project recipients, including being a 
public or private nonprofit entity, and adhering to all Title X and 
other applicable federal requirements. In the event of poor performance 
or noncompliance, a project recipient may take enforcement actions as 
described in the uniform grants rules at 45 CFR 75.371.

B. State Restrictions on Subrecipients

    In the past several years, a number of states have taken actions to 
restrict participation by certain types of providers as subrecipients 
in the Title X program, for reasons other than the provider's ability 
to provide Title X services. In at least several instances, this has 
led to disruption of services or reduction of services. Since 2011, 13 
states have placed restrictions on or eliminated subawards with 
specific types of providers based on reasons other than their ability 
to provide Title X services. In several instances, these restrictions 
have interfered with the ``capacity [of the applicant] to make rapid 
and effective use of [Title X federal] assistance.'' PHSA sec. 1001(b). 
Moreover, states that restrict eligibility of subrecipients have caused 
limitations in the geographic distribution of services and decreased 
access to services through trusted providers.
    States have restricted subrecipients from participating in the 
Title X program in several ways. Some states have employed a tiered 
approach to compete or distribute Title X funds, whereby entities such 
as comprehensive primary care providers, state health departments, or 
community health centers receive a preference in the distribution of 
Title X funds. This approach effectively excludes providers focused on 
reproductive health from receiving funds, even though they have been 
shown to provide higher quality services, such as preconception

[[Page 91853]]

services, and accomplish Title X programmatic objectives more 
effectively.\2\ \3\ For example, in 2011, Texas reduced its 
contribution to family planning services, and also re-competed 
subawards of Title X funds using a tiered approach. The combination of 
these actions decreased the Title X provider network from 48 to 36 
providers, and the number of Title X clients served was reduced 
dramatically. Although another entity became the statewide project 
recipient in 2013, the number of Title X clients served decreased from 
259,606 in 2011 to 166,538 in 2015.\4\ \5\ In other cases, states have 
prohibited specific types of providers from being eligible to receive 
Title X subawards, which has had a direct impact on service 
availability, primarily for low-income women. In some cases, 
experienced providers that have historically served large numbers of 
patients in major cities or geographic areas have been eliminated from 
participation in the Title X program. In Kansas, for example, following 
the exclusion of specific family planning providers in 2011, the number 
of clients, 87 percent of whom were low income (at or below 200 percent 
of the Federal Poverty Level), declined from 38,461 in 2011 to 24,047 
in 2015, a decrease of more than 37 percent. As with the declines in 
Texas, this is a far greater decrease than the national average of 20 
percent.\6\ \7\
---------------------------------------------------------------------------

    \2\ Robbins, C.L., Gavin, L., Zapata, L.B., Carter, M. W., 
Lachance, C., Mautone-Smith, N., & Moskosky, S.B. (2016). 
Preconception Care in Publicly Funded U.S. Clinics That Provide 
Family Planning Services. American Journal of Preventive Medicine.
    \3\ Carter, M.W., Gavin, L., Zapata, L.B., Bornstein, M., 
Mautone-Smith, N., & Moskosky, S.B. (2016). Four aspects of the 
scope and quality of family planning services in US publicly funded 
health centers: Results from a survey of health center 
administrators. Contraception.
    \4\ Fowler, CI, Lloyd, S, Gable, J, Wang, J, and McClure, E. 
(November 2012). Family Planning Annual Report: 2011 National 
Summary. Research Triangle Park, NC: RTI International.
    \5\ Fowler, C.I., Gable, J., Wang, J., & Lasater, B. (2016, 
August). Family Planning Annual Report: 2015 National Summary. 
Research Triangle Park, NC: RTI International.
    \6\ Fowler, CI, Lloyd, S, Gable, J, Wang, J, and McClure, E. 
(November 2012). Family Planning Annual Report: 2011 National 
Summary. Research Triangle Park, NC: RTI International.
    \7\ Fowler, C.I., Gable, J., Wang, J., & Lasater, B. (2016, 
August). Family Planning Annual Report: 2015 National Summary. 
Research Triangle Park, NC: RTI International.
---------------------------------------------------------------------------

    In New Hampshire, in 2011, the New Hampshire Executive Council 
voted not to renew the state's contract with a specific provider that 
was contracted to provide Title X family planning services for more 
than half of the state. To restore services to clients in the unserved 
part of the state, the Department issued an emergency replacement 
grant, but there was significant disruption in the delivery of 
services, and for approximately three months, no Title X services were 
available to potential clients in a part of the state.
    Most recently, in 2016 Florida enacted a law that would have gone 
into effect on July 1, 2016, prohibiting the state from making Title X 
subawards to certain family planning providers.\8\ In one county alone, 
1,820 clients are served by the family planning provider that would 
have been excluded, and it is not clear how the needs of those clients 
would have been met.
---------------------------------------------------------------------------

    \8\ H.B. 1411, 2016 Leg., Reg. Sess. (Fla. 2016). The law was 
preliminarily enjoined on June 30, 2016. Planned Parenthood of 
Southwest and Central Florida v. Philip, et al., No. 4:16cv321-RH/
CAS, 2016 U.S. Lexis 86251 (N.D. Fla. June 30, 2016)(``the defunding 
provision does not survive the unconstitutional conditions 
doctrine.''). The law was permanently enjoined on August 18, 2016, 
in an unpublished order.
---------------------------------------------------------------------------

    None of these state restrictions have been related to the 
subrecipients' ability to deliver Title X services. Instead, these 
restrictions are based either on non-Title X funded health services 
offered or on other activities the providers may separately conduct 
using non-federal funds, or because of the provider's affiliation. The 
Title X program provides that the Secretary shall make awards for 
family planning services based on ``the number of patients to be 
served, the extent to which family planning services are needed 
locally, the relative need of the applicant, and its capacity to make 
rapid and effective use of [Title X Federal] assistance.'' PHSA sec. 
1001(b). Allowing project recipients, including states and other 
entities, to impose restrictions on subrecipients for reasons other 
than their ability to provide Title X services has been shown to have 
an adverse effect on the number of people receiving Title X services 
and the fundamental goals of the Title X program.

C. Litigation

    As discussed in the NPRM, litigation concerning these restrictions 
has led to inconsistency across states in how recipients may choose 
subrecipients. As the restrictions vary, so have the statutory and 
constitutional issues raised in the cases.

II. Final Rule and Responses to Public Comments

A. Overview of the Final Rule

    The Department is finalizing the proposed rule with modifications. 
After reviewing the relevant comments, the Department is eliminating 
the qualifier ``effectively'' and changing ``unrelated to'' to ``other 
than'' in the regulatory language. The amendment now reads, ``No 
recipient making subawards for the provision of services as part of its 
Title X project may prohibit an entity from participating for reasons 
other than its ability to provide Title X services.'' The Department 
does not believe that including the term ``effectively'' is necessary 
for operation of this rule. Inclusion of ``effectively'' has the 
potential for inconsistent application and could create compliance 
burdens on recipients trying to apply a measure of ``effectiveness'' 
across a range of subrecipients. The revised language addresses the 
Department's concern that certain Title X recipients have imposed 
restrictions on subrecipients that are designed to further policy 
objectives other than the delivery of Title X services. Title X is the 
only federal program focused solely on providing family planning and 
related preventive services. Restrictions not directly related to that 
goal hinder the program's statutory mission and adversely affect the 
program's intended beneficiaries.
    For example, as outlined in the NPRM, state restrictions on 
subrecipients for activities unrelated to Title X-funded services have 
kept eligible providers from serving priority populations.\9\ 
Therefore, restricting participation by certain types of providers for 
such reasons will not be allowable under the rule. Similarly, while 
tiering Title X subawards may fulfill some state-based policy goals, 
tiering does not advance the specific Title X goals of providing ``a 
broad range of acceptable and effective family planning methods and 
services.'' PHSA sec. 1001(a). Prohibiting recipients from adding 
eligibility criteria for a reason other than the provision of Title X 
services ensures the broadest available pool of applicants for 
subawards and the use of federal resources in furtherance of statutory 
goals.
---------------------------------------------------------------------------

    \9\ Stevenson AJ, Flores-Vazquez IM, Allgeyer RL, Schenkkan P, 
Potter JE. Effect of Removal of Planned Parenthood from the Texas 
Women's Health Program. N Engl J Med. 2016 Mar 3;374(9):853-60.
---------------------------------------------------------------------------

    As is currently the case, applicants for new and continuing Title X 
grants that do not provide all services directly will describe the 
process and criteria by which they select subrecipients. Following 
implementation of this new rule, the Department will review this 
information to determine an applicant's eligibility to receive a new or 
continuing award. For new awards, the Department will assess whether 
any subrecipient restrictions are for reasons other than the 
subrecipient's ability to provide

[[Page 91854]]

Title X services. For continuing awards, the Department will work with 
recipients to help entities come into compliance prior to an award 
being made. If, despite the Department's assistance, compliance is not 
achieved, the Department will discontinue funding in accordance with 
all applicable rules and regulations. If available and as appropriate, 
this will include administrative appeals and a recoupment and re-
awarding of funds. Further, if a current recipient amends the scope of 
its approved project by changing its process for selecting 
subrecipients, that request requires prior approval and the Department 
will apply the same review criteria. 45 CFR 75.308.

B. Responses to Public Comments

    Overall, 145,303 comments were received. Approximately 91 percent 
(132,032) of the total comments received were in favor of the proposed 
rule. The vast majority of comments both favoring and opposing the rule 
were duplicate comments. Comments came from a wide variety of 
individuals and organizations, including private citizens, health care 
providers, religious organizations, patient advocacy groups, 
professional organizations, research institutions, consumer 
organizations, and state and federal agencies and representatives. Many 
of the comments dealt with a range of issues beyond the scope of this 
rulemaking including, but not limited to, the separation of church and 
state, additional confidentiality protections, provider fraud, and 
general opposition to Title X funding. A summary of the applicable 
comments, and the Department's responses, follows below.
    Comment: One commenter stated the comment period was too short for 
the rule and did not allow enough time for response on its significant 
economic and federalism impacts.
    Response: Given the limited scope of this rulemaking, the 
Department believes that notice was sufficient because ``interested 
parties [had] a reasonable opportunity to participate in the rulemaking 
process'' and were not ``deprived of the opportunity to present 
relevant information by lack of notice that the issue was there.'' Am. 
Radio Relay League v. FCC, 524 F.3d 227, 236 (D.C. Cir. 2008) 
(citations omitted). In fact, the Department received over 145,000 
responses to the notice of proposed rulemaking, many with detailed 
suggestions on different aspects of the proposed rule. Therefore, the 
Department does not believe that extending the comment period was 
necessary or warranted.
    Comment: Several commenters suggested the Department lacks legal 
authority to issue a rule in this area.
    Response: The Department disagrees. The Title X statute explicitly 
provides rulemaking authority for the making of conditions for grants. 
42 U.S.C. 300a-4(a). The Department has engaged in rulemaking for this 
program on multiple occasions. See, e.g., 65 FR 41270 (July 3, 2000); 
65 FR 49057 (Aug. 10, 2000); 53 FR 2922 (Feb. 2, 1988). In addition, 
courts, including the Supreme Court, have consistently upheld this 
authority. Rust v. Sullivan, 500 U.S. 173 (1991). On the very issue of 
state legislation affecting Title X, the U.S. Court of Appeals for the 
Tenth Circuit stated: ``HHS has deep experience and expertise in 
administering Title X, and the great breadth of the statutory language 
suggests a congressional intent to leave the details to the agency . . 
. . Of course, administrative actions taken by HHS will often be 
reviewable under the Administrative Procedure Act, but only after the 
federal agency has examined the matter and had the opportunity to 
explain its analysis to a court that must show substantial deference.'' 
Planned Parenthood of Kansas & Mid-Missouri v. Moser, 747 F.3d 814, 
824-25 (10th Cir. 2014). The Department is choosing to exercise that 
authority to promulgate a rule that it believes, as discussed above, is 
``reasonably related to the purposes of the enabling legislation'' (the 
standard to which the Supreme Court has held previous exercises of this 
authority). Mourning v. Family Publication Service, 411 U.S. 356, 369 
(1973).
    Comment: Commenters stated the rule was not clear in how it applied 
to recipients who provide some services directly and contract out some 
services.
    Response: The rule applies to all project recipients whenever they 
make subawards for the provision of Title X services. It is not 
intended to require those who directly provide all Title X services to 
start providing subawards. However, if a project recipient makes 
subawards for any Title X services, it may not prohibit an entity from 
participating in the program as a subrecipient for reasons other than 
that entity's ability to provide Title X services.
    Comment: Commenters stated clarification is needed about how the 
proposed rule will affect services at the state level and speculated 
that the proposed rule will cause a disruption in services.
    Response: The primary goals of the rule change are to ensure 
consistency of subrecipient participation, improve provision of 
services, and guarantee Title X resources are used to fulfill Title X 
goals. The final rule will be applied in a prospective manner, meaning 
with the submission of new competitive applications or, for recipients 
applying for non-competing funds, with the initiation of a new budget 
period. As a result, it is unlikely that the rule will cause disruption 
during a budget period, as each renewed budget period requires approval 
prior to an award. In the instance when a recipient makes a change to 
its process for selecting subrecipients in the middle of a budget 
period, if found to be out of compliance it may cause an interruption 
in the provision of services, but such mid-cycle changes are expected 
to be very rare. As previously stated, the Department will make every 
effort to help entities come into compliance, and will award 
replacement grants to other providers when necessary to minimize any 
disruption of services.
    The final regulation will not invalidate conflicting state laws. 
Instead, the regulation informs states with conflicting laws that if 
they intend to apply for new or continuing Title X funds, they would 
need to comply with federal law under which a recipient may not exclude 
an entity from participating for reasons other than its ability to 
provide Title X services. The rule will not interfere with statutory 
requirements in those states where recipients directly provide all 
Title X services, or where recipients select subrecipients based solely 
on their ability to provide Title X services.
    Comment: Commenters stated the proposed rule would allow Title X 
service providers that also provide abortion services to redirect their 
non-Title X funds toward abortion services or use Title X funding to 
fund abortion.
    Response: Title X funds cannot be used for abortions. The Title X 
statute prohibits any of the funds appropriated under Title X to be 
used in programs where abortion is a method of family planning. PHSA 
sec.1008. Title X provides family planning and related reproductive 
health services such as: testing and counseling for sexually 
transmitted diseases (STDs), including HIV; contraceptive methods 
including method-specific counseling; breast and cervical cancer 
screening; pregnancy tests and counseling, and other related services 
to over four million low-income women, men, and adolescents each year.
    Additionally, beyond cost-sharing and program income requirements, 
federal grant programs do not generally have the authority to stipulate 
what recipients do with non-federal funds. See Planned Parenthood of C. 
and N.

[[Page 91855]]

Ariz. v. State of Ariz., 718 F.2d 938, 945 (9th Cir. 1983), in which 
the court stated: ``we hold that as a matter of law, the freeing up 
theory cannot justify withdrawing all state funds from otherwise 
eligible entities merely because they engage in abortion-related 
activities disfavored by the state.'' The commenters also assume, 
without substantiation, that federal funding will supplant private 
funding for family planning, allowing the private funding to be used to 
fund abortions instead of additional family planning services and 
programs. According to the uniform grant rules, grants funds and any 
program-generated income must be used to further the objectives of the 
Title X program and would not be allowed to be diverted for non-
allowable activities. 45 CFR 75.307 (e). Speculation about the indirect 
effects of Title X funding is not a sufficient basis to justify making 
subawards based on reasons other than the ability to provide Title X 
services.
    Comment: Commenters stated that Title X should fund sites that 
provide comprehensive primary care rather than sites providing 
primarily reproductive health care.
    Response: The Department appreciates the value of providers, such 
as federally qualified health centers (FQHCs), which deliver 
comprehensive primary care services in communities. The Department also 
respects states' rights to spend their own (non-Federal) funds. 
However, the Title X program was specifically enacted to offer a broad 
range of family planning services, and not comprehensive primary care. 
While Title X has neither the authority nor purpose of providing 
comprehensive primary care, to the extent FQHCs may be the best 
providers of family planning services in a particular area, there is no 
prohibition on FQHCs being selected by project recipients as 
subrecipients.
    OPA's efforts to ensure widespread access to quality family 
planning services is consistent with efforts to provide comprehensive 
care. Family planning is a subset of comprehensive care services, which 
are particularly important for women and men of reproductive age. Given 
the fact that family planning services are often not provided, or are 
provided with poor quality in some primary care settings,\10\ OPA 
efforts are focused on ensuring that quality family planning services 
are included within the broader set of comprehensive preventive care 
needs of all Americans.\11\
---------------------------------------------------------------------------

    \10\ Wood, S., et al., Scope of family planning services 
available in Federally Qualified Health Centers. Contraception, 
2014. 89(2): p. 85-90.
    \11\ CDC, Providing Quality Family Planning Services: 
Recommendations of the CDC and the U.S. Office of Population 
Affairs. MMWR Recommendations and Reports, 2014. 63(4): p. 1-54.
---------------------------------------------------------------------------

    In addition, women of reproductive age often report that their 
family planning provider is also their usual source of health care.\12\ 
Providers of family planning services serve as entry points for their 
clients to other essential health care services. Preconception care 
(PCC), which includes screening for obesity, smoking, and mental 
health, is a key service provided as part of high quality family 
planning care. PCC improves women and men's health and can increase a 
person's ability to conceive and to have a healthy birth outcome. In a 
nationally representative sample of publicly funded clinical 
administrators, conducted in 2013-2014, written protocols for 
preconception care screening, which serve as instructions for 
clinicians providing these services, were more common in dedicated 
reproductive health centers compared with primary care centers and 
health departments.\13\
---------------------------------------------------------------------------

    \12\ Frost J. U.S. women's use of sexual and reproductive health 
services: Trends, sources of care and factors associated with use, 
1995-2010. New York, NY: Guttmacher Institute; 2013.
    \13\ Robbins CL, Gavin L, Zapata LB, Carter MW, Lachance C, 
Mautone-Smith N, Moskosky SB. Preconception Care in Publicly Funded 
U.S. Clinics That Provide Family Planning Services. Am J Prev Med. 
2016 Sep;51(3):336-43.
---------------------------------------------------------------------------

    Comment: Commenters stated that the proposed rule would be 
discriminatory against men and adolescents because the ``notice shows 
HHS intends to impose a preference for prioritizing funding to 
`specific providers with a reproductive health focus.'''
    Response: Title X regulations require projects to provide services 
without regard to religion, race, color, national origin, handicapping 
condition, age, sex, number of pregnancies, or marital status. 42 CFR 
59.5(a)(4). The Title X statute specifically mentions adolescents as a 
priority population for receiving Title X services. In fact, in 2015 
approximately 44 percent of the Title X clients served were between the 
ages of 15 and 24 years. Moreover, OPA funds projects to improve 
outreach and male-centered services in an effort to increase the number 
of men who use Title X services. Between 2003 and 2014, Title X 
providers served a total of 3.8 million males, nearly doubling the 
percentage of male family planning users from 4.5 percent in 2003 to 
8.8 percent in 2014.\14\ In addition, the 2014 report Providing Quality 
Family Planning Services: Recommendations of CDC and the U.S. Office of 
Population Affairs \15\ (QFP) identifies a specific set of family 
planning and related services that should be provided to men and 
adolescents.
---------------------------------------------------------------------------

    \14\ Besera, G, Moskosky, S., Et. Al. (2016), Male Attendance at 
Title X Family Planning Clinics--United States 2003-2014. Morbidity 
and Mortality Weekly Report, 65(23), 602-605.
    \15\ Gavin, L., & Pazol, K. (2016). Update: Providing Quality 
Family Planning Services -- Recommendations from CDC and the U.S. 
Office of Population Affairs, 2015. MMWR. Morbidity and Mortality 
Weekly Report MMWR Morb. Mortal. Wkly. Rep., 65(9), 231-234.
---------------------------------------------------------------------------

    Comment: Commenters stated that use of the word ``effectively'' in 
the proposed rule is vague. The commenters asserted that it would be 
difficult to determine which policies were allowable under the rule 
without a clear definition of ``effectively.''
    Response: As noted previously, after reviewing the relevant 
comments, the Department recognizes the challenge of measuring 
effectiveness across all grant recipients and subrecipients as a 
condition of participation, and is eliminating the qualifier 
``effectively'' from the regulatory language. The amendment now reads, 
``No recipient making subawards for the provision of services as part 
of its Title X project may prohibit an entity from participating for 
reasons other than its ability to provide Title X services.'' The 
Department believes that the revised language addresses the 
Department's concern that certain Title X recipients have imposed 
restrictions on subrecipients that are designed to further policy 
objectives other than the ability to provide Title X services. A 
recipient imposing a ban on particular types of providers or imposing a 
tiering structure is prohibiting subrecipients from participating on 
factors other than the ability to provide Title X services. Only 
qualifications of recipients tied to Title X objectives, such as the 
ability to make rapid and effective use of federal funds and compliance 
with Title X regulations, are relevant factors. The revised language is 
clear and does not depend on the meaning of ``effectively.''
    Comment: Commenters stated that the Title X program lacks a clear 
evidence-based process for establishing program guidelines.
    Response: The Department has adopted an evidence-based approach for 
defining program guidelines, such as what constitutes ``quality'' 
family planning services. Quality family planning services were defined 
in the 2014 clinical recommendations, Providing Quality Family Planning

[[Page 91856]]

Services (QFP).\16\ These recommendations were developed using an 
evidence-based approach, and adopted the Institute of Medicine's (IOM) 
definition of health care ``quality,'' which is:
---------------------------------------------------------------------------

    \16\ CDC, Providing Quality Family Planning Services: 
Recommendations of the CDC and the U.S. Office of Population 
Affairs. MMWR Recommendations and Reports, 2014. 63(4): p. 1-54.

    ``The degree to which health care services for individuals and 
populations increase the likelihood of desired health outcomes and 
are consistent with current professional knowledge.'' \17\
---------------------------------------------------------------------------

    \17\ Institute of Medicine, Crossing the quality chasm: A new 
health system for the 21st century, ed. Committee on Quality of 
Health Care in America. 2001, Washington, DC: National Academies of 
Science.

    The process of developing QFP recommendations was rigorous and 
aligned with current national and international standards for 
guidelines development; a priority was placed on clinical services for 
which there was evidence of effectiveness as defined by the presence of 
research demonstrating a protective impact on a behavioral or health 
outcome.18 19
---------------------------------------------------------------------------

    \18\ CDC, Providing Quality Family Planning Services: 
Recommendations of the CDC and the U.S. Office of Population 
Affairs. MMWR Recommendations and Reports, 2014. 63(4): p. 1-54.
    \19\ Gavin, L., S.B. Moskosky, and W. Barfield, Developing U.S. 
Recommendations for Providing Quality Family Planning Services. 
American Journal of Preventive Medicine, 2015. 49((2) Supplement 1).
---------------------------------------------------------------------------

    For this reason, the provision of quality care is very likely to 
result in a change in health outcomes. This emphasis on improving the 
quality of care is consistent with global and national efforts that 
have highlighted its importance to achieving key outcomes. For example, 
quality care has been identified by the Institute of Medicine (IOM) and 
other leaders in health care delivery as the driving factor that will 
achieve the goals of improved health, client experience and cost 
savings.20 21
---------------------------------------------------------------------------

    \20\ Institute of Medicine, Crossing the quality chasm: A new 
health system for the 21st century, ed. Committee on Quality of 
Health Care in America. 2001, Washington, DC: National Academies of 
Science.
    \21\ Berwick, D., T. Nolan, and J. Whittington, The Triple Aim: 
Care, Health, and Cost. Health Affairs, 2008. 27(3): p. 759-769.
---------------------------------------------------------------------------

    OPA's development and implementation of the QFP recommendations in 
the Title X program also demonstrates that steps have been taken to 
address comments from another IOM report published in 2009.\22\ The 
2009 report urged OPA to ensure that its recipients follow ``current 
evidence-based professional clinical recommendations,'' and consider 
``making the Title X guidelines the standard used by all federal health 
programs.''
---------------------------------------------------------------------------

    \22\ Institute of Medicine, A Review of the HHS Family Planning 
Program: Mission, Management, and Measurement of Results, ed. A. 
Stith Butler and E. Clayton. 2009, Washington, DC: National 
Academies Press.
---------------------------------------------------------------------------

    Comment: Commenters questioned the legitimacy of the findings of 
the study by Robbins et al.\23\ related to Title X service providers 
cited by the Department including challenging the assumption that the 
existence of written clinical protocols indicated higher quality care.
---------------------------------------------------------------------------

    \23\ Robbins, C.L., Gavin, L., Zapata, L.B., Carter, M.W., 
Lachance, C., Mautone-Smith, N., & Moskosky, S.B. (2016). 
Preconception Care in Publicly Funded U.S. Clinics That Provide 
Family Planning Services. American Journal of Preventive Medicine.
---------------------------------------------------------------------------

    Response: Regarding the findings of the study by Robbins et 
al.,\24\ the Department clarifies that written clinical protocols are 
not printed worksheets given to clients. Rather, they are explicit 
guidance that clinicians use to provide services in accordance with 
nationally recognized standards of care. Furthermore, written clinical 
protocols are associated with higher quality care.\25\
---------------------------------------------------------------------------

    \24\ Robbins, C.L., Gavin, L., Zapata, L.B., Carter, M.W., 
Lachance, C., Mautone-Smith, N., & Moskosky, S.B. (2016). 
Preconception Care in Publicly Funded U.S. Clinics That Provide 
Family Planning Services. American Journal of Preventive Medicine.
    \25\ Committee on Patient Safety and Quality Improvement. 
Committee Opinion No. 629: Clinical guidelines and standardization 
of practice to improve outcomes. Obstet Gynecol. 2015 
Apr;125(4):1027-9.
---------------------------------------------------------------------------

    Comment: Commenters requested information about how OPA will ensure 
that compliance with and enforcement of the proposed rule are 
integrated into the final rule and Title X award process.
    Response: The Department believes that relying on our existing 
enforcement mechanisms rather than developing new reporting 
requirements or new certification requirements will be the most 
efficient means of ensuring compliance. The primary goals of the rule 
change are to ensure consistency of subrecipient participation, improve 
provision of services, and guarantee Title X resources are used to 
fulfill Title X goals. As part of the funding opportunity announcement 
(FOA) for each grant cycle, applicants are required to describe how 
their projects will address Title X requirements. This includes, but is 
not limited to, fully describing if they will not provide all services 
directly, the process and selection criteria used, or to be used, to 
select subrecipients, service sites and providers, including a 
description of eligible entities for funding as subrecipients.\26\ 
Recipients applying for non-competing continuation funds (those with 
part of their project period remaining after their current budget 
period, for example, in year one or two of a three-year project period) 
will also be required to describe, if they will not provide all 
services directly, the process and selection criteria used or to be 
used for selection of service sites and providers, including a 
description of eligible entities for funding as subrecipients. For 
recipients applying for non-competing continuation funds, the 
Department will work with them to help entities come into compliance 
prior to an award being made. If, despite the Department's assistance, 
compliance is not achieved, the Department will discontinue funding in 
accordance with all applicable rules and regulations. If available and 
as appropriate, this will include administrative appeals and a 
recoupment and re-awarding of funds. Further, if a current recipient 
amends the scope of its approved project by changing its process for 
selecting subrecipients, that request requires prior approval and the 
Department will apply the same review criteria. 45 CFR 75. 
Additionally, recipients are subject to uniform grant rule requirements 
related to subawards, 45 CFR 75.352, and all other applicable rules.
---------------------------------------------------------------------------

    \26\ United States of America. Office of the Assistant Secretary 
for Health. Office of Population Affairs. Announcement of 
Anticipated Availability of Funds for Family Planning Services 
Grants. 5 Oct. 2016. Accessed on 2 Dec. 2016 at https://www.hhs.gov/opa/sites/default/files/FY-17-Title-X-FOA-New-Competitions.pdf.
---------------------------------------------------------------------------

    Comment: Commenters stated concern that the Department did not 
consider the alternative of modifying the grant process to make it 
easier for providers restricted from being eligible as a subrecipient 
in specific states to receive grants directly from Title X.
    Response: The grants process is established by the Department to 
ensure integrity and accountability in the award and administration of 
grants, and to protect federal resources across all Departmental 
programs. As a result, the Department does not consider suggestions to 
change the grants process for specific applicants under Title X a 
viable alternative to this rule.
    Applicants who meet the eligibility criteria in the funding 
opportunity announcement (FOA) may submit, directly, an application for 
consideration as a Title X recipient, independent of the size of the 
entity. Applicants should also have the option to be considered 
eligible as a subrecipient. The rule addresses recipients or applicants 
that propose excluding potential subrecipient entities

[[Page 91857]]

based on criteria other than the entity's ability to provide Title X 
services.
    Comment: Commenters stated that states should not have to fund 
Planned Parenthood because these commenters claim the organization has 
perpetuated Medicaid fraud. Commenters also stated that the proposed 
rule would allow for preferential treatment of Planned Parenthood and 
that by allowing Title X funds to be awarded to Planned Parenthood it 
could create a monopoly in family planning service providers.
    Response: No comment provided evidence to support allegations that 
any Title X provider has engaged in Medicaid fraud. Entities that are 
suspended, excluded or debarred from participation in federal health 
care programs are not eligible to receive awards under the Title X 
program. Furthermore, the Uniform Administrative Requirements, Cost 
Principles and Audit Requirements for HHS Awards stipulate requirements 
for making financial assistance awards to applicants and existing 
recipients that include the need to take into consideration the ability 
of the applicant to use federal funds properly in the manner intended. 
45 CFR 75.205. These rules also require an assessment of the 
applicant's ability to meet legal, financial, and administrative 
obligations prior to receiving federal funds, as well as during the 
entire duration of the project period in which the federal funds are 
expended. This is accomplished by several methods, including, but not 
limited to, the awarding program office and grants management office 
conducting a risk assessment, which directly assesses the applicant for 
financial stability, quality of management systems, history of 
performance, audit reports and findings, and ability to implement 
effectively statutory, regulatory, and other requirements. The awarding 
program office and the grants management office also evaluate the 
applicant using the Federal Awardee Performance and Integrity 
Information System (FAPIIS). These steps must be completed prior to the 
initial award and are assessed throughout the entire project period. 
Additionally, Government-wide suspension and debarment activities are 
used to safeguard federal funds by disallowing awards to organizations 
and their principals based on a lack of business honesty or integrity. 
Federal agencies only do business with those organizations, and only 
provide funding for those principals, that have a satisfactory record 
of business ethics and integrity. 2 CFR part 180, subpart D.
    The rule will not provide any preferential treatment, nor 
disadvantage any applicant, from receiving Title X family planning 
service grants. In contrast to the assertion made by the commenter, 
this final rule encourages providers to compete based on their ability 
to provide Title X services. The rule will ensure consistent 
opportunity of subrecipient participation across geographic areas, and 
guarantee Title X resources are allocated on the basis of fulfilling 
Title X goals.
    This final rule does not favor particular providers, and does not 
deter competition between providers; it requires recipients to evaluate 
potential subrecipients based on their ability to provide Title X 
services. As a result, new and existing providers will be able to 
receive Title X funding based on their ability to provide Title X 
services.

III. Regulatory Impact Analysis

A. Comments Received in Response to Executive Order 13132 Federalism 
Review

    Comment: Several commenters were critical of the Federalism 
analysis performed under Executive Order 13132. These commenters stated 
the rule was targeted at states and their traditional authority over 
health care. Additionally, many commenters suggested the proposed 
program requirement violated the Tenth Amendment, the Spending Clause, 
and preemption principles. Several commenters additionally asserted 
that Title X federal funding conditions should not interfere with state 
priorities, even when using federal funds.
    Response: Title X was enacted in order for family planning projects 
to offer a broad range of family planning methods and services. It was 
not enacted as a federal-state cooperative statute, as is evidenced by 
the eligibility of nonprofit, private entities to apply for grants 
directly. Currently, 40 nonprofit entities receive Title X funding 
directly from the Department. Further, every state has at least one 
Title X recipient, and 13 states and the District of Columbia, have 
only nonprofit, private recipients.
    The Supreme Court has long been clear that the Tenth Amendment 
limitation on the Congressional regulation of state affairs does not 
limit the range of conditions legitimately placed on federal grants. 
Oklahoma v. Civil Serv, Comm'n, 330 U.S. 127 (1947). The Department may 
attach conditions to the awarding of funds to carry out best its 
statutory goals. South Dakota v. Dole, 483 U.S. 203 (1987); Rust v. 
Sullivan, 500 U.S. 173, 191 (1991) (``We have recognized that Congress' 
power to allocate funds for public purposes includes an ancillary power 
to ensure that those funds are properly applied to the prescribed 
use.'') The possible loss of future Title X grants does not amount to 
coercing the states (or nonprofit private entities) to capitulate to 
program requirements. Similarly, as the rule only attaches requirements 
to the receipt of federal funds, it would not invalidate any state laws 
with which it conflicts. States often opt not to apply for federal 
grant funds where the federal program requirement conflicts with state 
law priorities. Therefore, there is no preemption of state laws caused 
by this rule.
    It must also be emphasized that this rule applies to all Title X 
project recipients, not only to project recipients that represent state 
health departments. As the NPRM explained, ``All project recipients 
that do not provide services directly must only choose subrecipients on 
the basis of their ability to deliver Title X required services. 
Nonprofit recipients that do not provide all services directly must 
also allow any eligible providers that can provide Title X services in 
a given area to apply to provide those services, and they may not 
continue or begin contracting (or subawarding) with providers simply 
because they are affiliated in some way that is unrelated to the 
programmatic objectives of Title X.'' 81 FR at 61643.
    Comment: One commenter also suggested that the proposed rule 
violated spending clause principles. Specifically, the commenter 
argued, given the vagueness of ``effectively,'' grant recipients would 
not be on clear notice of what would be expected of them.
    Response: As noted above, the Department eliminated the qualifier 
``effectively'' from the regulatory language. The amendment now reads, 
``No recipient making subawards for the provision of services as part 
of its Title X project may prohibit an entity from participating for 
reasons other than its ability to provide Title X services.'' As 
explained previously in this preamble, restrictions placed on 
organizations unrelated to the delivery of Title X services and tiering 
approaches would not be allowed. As this requirement will only be 
applied in future FOAs and continuation funding applications, there 
will be additional opportunities for the Department to provide guidance 
consistent with this final rule and entities may seek further guidance 
from the Department as to what other practices may be problematic 
before applying before applying for funds. Thus, applicants will have 
the option to

[[Page 91858]]

apply for funds knowing the relevant conditions, or to decline to do 
so.
    As stated in the NPRM, Executive Order 13132 establishes certain 
requirements that an agency must meet when it promulgates a final rule 
that imposes substantial direct requirement costs on state and local 
governments, preempts state law, or otherwise has federalism 
implications. This rule will not cause substantial economic impact on 
states or nonprofit private entities. It may implicate state laws only 
if those states with contrary laws wish to apply for federal Title X 
funds. States that choose to do so and also choose to subaward Title X 
funds will be required to do so in a manner that considers only the 
ability of the subrecipients to meet the statutory objectives of Title 
X.

B. Comments Received in Response to Economic Impact Analysis Under E.O. 
12866

    Comment: Commenters stated concern that the Department did not 
consider regulatory alternatives.
    Response: This regulation is the simplest way to achieve the goal 
of ensuring that Title X recipients determine subrecipients based on 
their ability to provide Title X services. As a result, more complex 
regulatory alternatives in the impact analysis were not discussed. The 
Department did consider the no action alternative, but concluded that 
it would not further the statutory goals served by the regulation. 
These commenters and others described various regulatory alternatives, 
and these alternatives, such as direct grants, are discussed in the 
final rule.
    Comment: Commenters stated concern that the impact analysis did not 
address impacts to states and service providers affected by the rule.
    Response: Contrary to the assertions made by the commenters, the 
impact analysis did estimate costs borne by recipients, including 
recipients that represented state health departments, associated with 
evaluating the rule and modifying policies to ensure compliance with 
the rule, and the impact analysis noted that the rule may result in 
some shifts in funding from some family planning services providers to 
other family planning services providers.
    Comment: Commenters stated concern that the impact analysis did not 
address the consequences of states electing not to participate in Title 
X.
    Response: The primary goal of the impact analysis was to determine 
the societal impact of the rule. If a potential recipient decides not 
to participate in Title X as a result of the rule, this may result in a 
reallocation of resources, and under certain circumstances this could 
result in a reduction in the utilization of services in some areas. If 
Title X funding and the associated services declined in a specific 
area, this would correspond with a commensurate increase in services in 
other areas due to the reallocation of funding. Although the Department 
does not anticipate this to occur widely, this shift would represent an 
indirect transfer of federal funding for health care services from 
individuals in some areas to individuals in other areas, which the 
Department estimates would have no net effect on total Title X 
expenditures by the United States.
1. Introduction
    The Department has examined the impact of this final rule under 
Executive Order 12866 on Regulatory Planning and Review (September 30, 
1993), Executive Order 13563 on Improving Regulation and Regulatory 
Review (January 18, 2011), the Regulatory Flexibility Act of 1980 (Pub. 
L. 96-354, September 19, 1980), the Unfunded Mandates Reform Act of 
1995 (Pub. L. 104-4, March 22, 1995), and Executive Order 13132 on 
Federalism (August 4, 1999).
    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health, and safety 
effects; distributive impacts; and equity). Executive Order 13563 is 
supplemental to and reaffirms the principles, structures, and 
definitions governing regulatory review as established in Executive 
Order 12866. The Department expects that this final rule will not have 
an annual effect on the economy of $100 million or more in any one 
year. Therefore, this rule is not an economically significant 
regulatory action as defined by Executive Order 12866 or a major rule 
under either the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1501, 
or the Congressional Review Act, 5 U.S.C. 801.
    The Regulatory Flexibility Act (RFA) requires agencies that issue a 
regulation to analyze options for regulatory relief of small businesses 
if a rule has a significant impact on a substantial number of small 
entities. The RFA generally defines a ``small entity'' as (1) a 
proprietary firm meeting the size standards of the Small Business 
Administration; (2) a nonprofit organization that is not dominant in 
its field; or (3) a small government jurisdiction with a population of 
less than 50,000 (States and individuals are not included in the 
definition of ``small entity''). For similar rules, the Department 
considers a rule to have a significant economic impact on a substantial 
number of small entities if at least five percent of small entities 
experience an impact of more than three percent of revenue. The 
Department anticipates that the final rule will not have a significant 
economic impact on a substantial number of small entities.
    Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires 
that agencies prepare a written statement, which includes an assessment 
of anticipated costs and benefits, before proposing ``any rule that 
includes any Federal mandate that may result in the expenditure by 
state, local, and tribal governments, in the aggregate, or by the 
private sector, of $100,000,000 or more (adjusted annually for 
inflation) in any one year.'' The current threshold after adjustment 
for inflation is $146 million, using the most current (2015) implicit 
price deflator for the gross domestic product. This final rule would 
not trigger the Unfunded Mandate Reform Act because it will not result 
in any expenditure by states or other government entities.
2. Summary of the Final Rule
    Since 2011, 13 states have taken actions to restrict participation 
by certain types of providers as subrecipients in the Title X program 
based on reasons other than the providers' ability to provide Title X 
services. In at least several instances, this has led to disruption of 
services or reduction of services in instances where a public entity, 
such as a state health department, is a Title X recipient and makes 
subawards to subrecipients for the provision of services. In response 
to these actions, this final rule requires that any Title X recipient 
subawarding funds for the provision of Title X services not prohibit an 
entity from participating as a subrecipient for reasons other than its 
ability to provide Title X services.
3. Need for the Final Rule
    Certain states have policies in place that limit access to family 
planning services by restricting specific types of providers from 
participating as subrecipients in the Title X program. These policies, 
and varying court decisions on their legality, have led to uncertainty 
among recipients, inconsistency in program administration, and reduced 
access to services for Title X priority populations. These restrictive 
state policies exclude certain entities for reasons other than their 
ability to provide Title X services.

[[Page 91859]]

As a result of these state policies, providers previously determined by 
Title X recipients to be eligible providers of family planning services 
have been excluded from participation in the Title X program. In turn, 
the exclusion of these providers is associated with a reduction in the 
number of Title X service sites, reduced geographic availability of 
Title X services, and fewer Title X clients served between 2011 and 
2014.27 28 This final regulation seeks to ensure that state 
and nonprofit private entity policies regarding Title X do not direct 
or restrict funding to subrecipients for reasons other than their 
ability to provide Title X services.
---------------------------------------------------------------------------

    \27\ Fowler, CI, Lloyd, S, Gable, J, Wang, J, and McClure, E. 
(November 2012). Family Planning Annual Report: 2011 National 
Summary. Research Triangle Park, NC: RTI International.
    \28\ Fowler, C. I., Gable, J., Wang, J., & Lasater, B. (2015, 
August). Family Planning Annual Report: 2014 National Summary. 
Research Triangle Park, NC: RTI International.
---------------------------------------------------------------------------

    Reducing access to Title X services has many adverse effects. Title 
X services have a large effect on reducing the number of unintended 
pregnancies and unplanned births in the United States. For example, the 
Guttmacher Institute estimates that in 2014 publicly funded 
contraceptive care at Title X-funded clinics has helped women to 
prevent approximately 50 percent of an estimated total 1.9 million 
unintended pregnancies prevented by publically supported services 
nationally, and 70 percent (904,000) of the 1.3 million unintended 
pregnancies prevented by women with the help of publicly funded 
providers. The 904,000 unintended pregnancies would have resulted in an 
estimated 439,000 unplanned births, 326,000 abortions, and 139,000 
miscarriages.\29\ The Title X program also helps prevent the spread of 
STDs by providing screening and treatment.\30\ The program helps reduce 
maternal morbidity and mortality, as well as low birth weight, preterm 
birth, and infant mortality.31 32 Title X, as it exists 
today, is also very cost beneficial: every grant dollar spent on family 
planning saves an average of $7.09 in Medicaid-related costs.\33\
---------------------------------------------------------------------------

    \29\ Frost JJ, Frohwirth L, and Zolna MR. Contraceptive Needs 
and Services, 2014. New York: Guttmacher Institute, 2015, <https://www.guttmacher.org/report/contraceptive-needs-and-services-2014-update.
    \30\ Fowler, CI, Gable, J, Wang, J, and McClure, E. (November 
2013). Family Planning Annual Report: 2012 National Summary. 
Research Triangle Park, NC: RTI International.
    \31\ Kavanaugh ML and Anderson RM, Contraception and Beyond: The 
Health Benefits of Services Provided at Family Planning Centers, New 
York: Guttmacher Institute, 2013 <https://www.guttmacher.org/sites/default/files/report_pdf/health-benefits.pdf.
    \32\ Preconception Health and Reproductive Life Plan. (n.d.). 
Retrieved May 18, 2016, from https://www.hhs.gov/opa/title-x-family-planning/initiatives-and-resources/preconception-reproductive-life-plan/.
    \33\ Frost, J.J., Sonfield, A., Zolna, M.R., & Finer, L.B. 
(2014). Return on Investment: A Fuller Assessment of the Benefits 
and Cost Savings of the US Publicly Funded Family Planning Program. 
Milbank Quarterly, 92(4), 696-749.
---------------------------------------------------------------------------

    In addition to reducing access to the Title X program, these 
policies that restrict specific types of providers from being eligible 
to participate in the Title X project may reduce the quality of Title X 
services, as described previously. Research has shown that providers 
with a reproductive health focus provide services that more closely 
align with the statutory and regulatory goals and purposes of the Title 
X program.\34\ In particular, these entities provide a broader range of 
contraceptive methods on-site, are more likely to have written 
protocols that assist clients with initiating and continuing 
contraceptive use without barriers, disproportionately serve more 
clients in need of family planning services, and may provide higher 
quality services.\35\
---------------------------------------------------------------------------

    \34\ Robbins, C.L., Gavin, L., Zapata, L.B., Carter, M.W., 
Lachance, C., Mautone-Smith, N., & Moskosky, S.B. (2016). 
Preconception Care in Publicly Funded U.S. Clinics That Provide 
Family Planning Services. American Journal of Preventive Medicine.
    \35\ Robbins, C.L., Gavin, L., Zapata, L.B., Carter, M.W., 
Lachance, C., Mautone-Smith, N., & Moskosky, S.B. (2016). 
Preconception Care in Publicly Funded U.S. Clinics That Provide 
Family Planning Services. American Journal of Preventive Medicine.
---------------------------------------------------------------------------

    The Department is concerned that policies that restrict certain 
types of entities from becoming subrecipients for reasons other than 
their ability to provide Title X services could limit the set of 
available providers for reasons unrelated to the quality of family 
planning services they provide. This, in turn, could reduce access to 
care and may reduce the availability of high quality family planning 
services. This regulation takes the simplest approach to reverse the 
adverse effects of policies that have excluded certain entities for 
reasons other than their ability to provide Title X services.
4. Analysis of Benefits and Costs
a. Benefits to Potential Title X Clients and Reduced Federal 
Expenditures
    This final rule directly prohibits Title X recipients that subaward 
funds for the provision of Title X services from excluding an entity 
from participating for reasons other than its ability to provide Title 
X services. Following the implementation of policies this regulation 
would address, states shifted funding away from family planning service 
providers previously determined to be eligible. The Department believes 
that this final rule is likely to undo these effects. To the extent 
that a state may come into compliance with this regulation by 
relinquishing its Title X grant or not applying to continue a Title X 
grant, other organizations could compete for Title X funding to deliver 
services in areas where a state entity previously subawarded funds for 
the delivery of Title X services. In turn, the Department expects that 
this has the potential to reverse the associated reduction in access to 
Title X services and deterioration of outcomes for affected 
populations.
    As previously stated, research has shown that every grant dollar 
spent on family planning saves an average of $7.09 in Medicaid-related 
expenditures.\36\ In addition to reducing spending, these services 
improve the health and quality of life for affected individuals, 
suggesting that the return on investment to these family planning 
services is even higher. For example, these services reduce the 
incidence of invasive cervical cancer and sexually transmitted 
infections in addition to improving birth outcomes through reductions 
in preterm and low birthweight births.\37\ Data show that specific 
provider types with a reproductive health focus have been shown to 
serve disproportionately more clients in need of publicly funded family 
planning services than do public health departments and FQHCs.\38\ 
Therefore, eliminating restrictions against certain providers has the 
potential to result in an increased number of clients served and 
services delivered by the Title X program.
---------------------------------------------------------------------------

    \36\ Frost, J.J., Sonfield, A., Zolna, M.R., & Finer, L.B. 
(2014). Return on Investment: A Fuller Assessment of the Benefits 
and Cost Savings of the US Publicly Funded Family Planning Program. 
Milbank Quarterly, 92(4), 696-749.
    \37\ Frost, J.J., Sonfield, A., Zolna, M.R., & Finer, L.B. 
(2014). Return on Investment: A Fuller Assessment of the Benefits 
and Cost Savings of the US Publicly Funded Family Planning Program. 
Milbank Quarterly, 92(4), 696-749.
    \38\ Frost JJ, Zolna MR and Frohwirth L, Contraceptive Needs and 
Services, 2010, New York: Guttmacher Institute, 2013, <https://www.guttmacher.org/pubs/win/contraceptive-needs-2010.pdf.
---------------------------------------------------------------------------

b. Costs to the Federal Government Associated With Disseminating 
Information About the Rule and Evaluating Grant Applications for 
Conformance With Policy
    Following publication of the final rule, OPA will educate Title X 
program recipients and applicants about the requirement not to prohibit 
an entity from participating for reasons other than

[[Page 91860]]

its ability to provide Title X services. OPA will send a letter 
summarizing the change to current recipients of Title X funds and post 
the letter to its Web site. Language conforming to this final rule will 
be included in forthcoming FOAs and continuation application guidance. 
OPA also has other existing channels for disseminating information to 
stakeholders. Therefore, based on previous experience, the Department 
estimates that preparing and disseminating these materials will require 
approximately one to three percent of a full-time equivalent OPA 
employee at the GS-12 step 5 level. Based on federal wage schedule for 
2016 in the Washington, DC area, GS-12 step 5 level corresponds to an 
annual salary of $87,821. The salary cost is doubled to account for 
overhead and benefits. As a result, the Department estimates a cost of 
approximately $1,800-$5,300 to disseminate information following 
publication of the final rule.
c. Grant Recipient Costs To Evaluate and Implement the Policy Change
    The Department expects that stakeholders, including grant 
applicants and recipients potentially affected by this final policy 
change, will process the information and decide how to respond. This 
change will not affect the majority of current recipients and, as a 
result, the majority of current recipients will spend very little time 
reviewing these changes before deciding that no change on their part is 
required. For the states that currently hold Title X grants and have 
laws or policies restricting eligibility of Title X subrecipients based 
on reasons other than their ability to deliver Title X services, the 
final rule may implicate the state's law or policy. State agencies that 
currently restrict subrecipients would need to consider their current 
practices carefully in order to comply with this final rule if they 
wish to continue obtaining Title X grants and engaging subrecipients.
    The Department estimates that current and potential recipients will 
spend an average of one to two hours processing the information and 
deciding what action to take. The Department notes that individual 
responses are likely to vary, as many parties unaffected by these 
changes will spend a negligible amount of time in response to these 
changes. According to the U.S. Bureau of Labor Statistics,\1\ the 
average hourly wage for a chief executive in state government is 
$54.26, which the Department believes is a good proxy for the 
individuals who will spend time on these activities. After adjusting 
upward by 100 percent to account for overhead and benefits, it is 
estimated that the per-hour cost of a state government executive's time 
is $108.52. Thus, the average cost per current or potential grant 
recipient to process this information and decide upon a course of 
action is estimated to be $108.52-$217.04. OPA will disseminate 
information to an estimated 89 Title X grant recipients. As a result, 
it is estimated that dissemination will result in a total cost of 
approximately $9,700-$19,300.
d. Summary of Impacts
    Public funding for family planning services has the potential to 
shift to providers that see a higher number of patients and provide 
higher quality services. Increases in the quantity and quality of Title 
X service utilization could lead to fewer unintended pregnancies, 
improved health outcomes, reduced Medicaid costs, and increased quality 
of life for many individuals and families. The final rule's impacts 
will take place over a long period of time, as it will allow for the 
continued flow of funding to provide family planning services for those 
most in need, and it will prevent future attempts to prohibit Title X 
funding to current and potential subrecipients for reasons other than 
their ability to meet the objectives of the Title X program.
    The Department estimates approximate costs in the range of $11,400-
$24,600 in the first year following publication of the final rule. This 
rule is beneficial to society in increasing access to and quality of 
care.
e. Analysis of Regulatory Alternatives
    The Department carefully considered the option of not pursuing 
regulatory action. However, as discussed previously, not pursuing 
regulatory action would allow the continued denial of Title X funds to 
entities for reasons other than their ability to provide Title X 
services. This, in turn, means accepting reductions in access to and 
quality of services to populations who rely on Title X. As a result, 
the Department chose to pursue regulatory action.

C. Paperwork Reduction Act of 1995

    The amendments in this rule will not impose any additional data 
collection requirements beyond those already imposed under the current 
information collection requirements that have been approved by the 
Office of Management and Budget.

    Date: December 12, 2016.
Sylvia M. Burwell,
Secretary.

List of Subjects in 42 CFR part 59

    Birth control, Family planning, Grant programs.

    Therefore, under the authority of section 1006 of the Public Health 
Service Act as amended, and for the reasons stated in the preamble, the 
Department amends 42 CFR part 59 as follows:

PART 59--GRANTS FOR FAMILY PLANNING SERVICES

0
1. The authority citation for Part 59 continues to read as follows:

    Authority: 42 U.S.C. 300a-4.

0
2. Section 59.3 is revised to read as follows:


Sec.  59.3  Who is eligible to apply for a family planning services 
grant or to participate as a subrecipient as part of a family planning 
project?

    (a) Any public or nonprofit private entity in a State may apply for 
a grant under this subpart.
    (b) No recipient making subawards for the provision of services as 
part of its Title X project may prohibit an entity from participating 
for reasons other than its ability to provide Title X services.
[FR Doc. 2016-30276 Filed 12-14-16; 8:45 am]
BILLING CODE 5140-34-P
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.