Administrative Simplification: Modification of the Requirements for the Use of Health Insurance Portability and Accountability Act of 1996 (HIPAA) National Council for Prescription Drug Programs (NCPDP) D.0 Standard, 633-638 [2019-00554]

Download as PDF Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Proposed Rules (2) An eligible veteran who receives urgent care under paragraph (b)(5)(iii) of this section or urgent care consisting solely of an immunization against influenza (flu shot) is not subject to a copayment under paragraph (d)(1) of this section. (3) If an eligible veteran would be required to pay more than one copayment under this section, or a copayment under this section and a copayment under § 17.108 or § 17.111, on the same day, the eligible veteran will only be charged the higher copayment. [FR Doc. 2019–00277 Filed 1–30–19; 8:45 am] BILLING CODE 8320–01–P DEPARTMENT OF HEALTH AND HUMAN SERVICES Office of the Secretary 45 CFR Part 162 [CMS–0055–P] RIN 0938–AT52 Administrative Simplification: Modification of the Requirements for the Use of Health Insurance Portability and Accountability Act of 1996 (HIPAA) National Council for Prescription Drug Programs (NCPDP) D.0 Standard Office of the Secretary, HHS. Proposed rule. AGENCY: ACTION: This proposed rule would adopt a modification to the requirements for the use of the Telecommunication Standard Implementation Guide, Version D, Release 0 (Version D.0), August 2007, National Council for Prescription Drug Programs by requiring covered entities to use the Quantity Prescribed (460–ET) field for retail pharmacy transactions for Schedule II drugs. The modification would enable covered entities to clearly distinguish whether a prescription is a ‘‘partial fill,’’ where less than the full amount prescribed is dispensed, or a refill, in the HIPAA retail pharmacy transactions. We believe this modification is important to ensure information is available to help prevent impermissible refills of Schedule II drugs, which would help to address the public health concerns associated with prescription drug abuse in the United States. khammond on DSKBBV9HB2PROD with PROPOSALS SUMMARY: Comment Date: To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. April 1, 2019. DATES: VerDate Sep<11>2014 17:23 Jan 30, 2019 Jkt 247001 In commenting, please refer to file code CMS–0055–P. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission. Comments, including mass comment submissions, must be submitted in one of the following three ways (please choose only one of the ways listed): 1. Electronically. You may submit electronic comments on this regulation to http://www.regulations.gov. Follow the ‘‘Submit a comment’’ instructions. 2. By regular mail. You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS–0055–P, P.O. Box 8013, Baltimore, MD 21244–8013. Please allow sufficient time for mailed comments to be received before the close of the comment period. 3. By express or overnight mail. You may send written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS–0055–P, Mail Stop C4–26–05, 7500 Security Boulevard, Baltimore, MD 21244–1850. For information on viewing public comments, see the beginning of the SUPPLEMENTARY INFORMATION section. FOR FURTHER INFORMATION CONTACT: Geanelle G. Herring, (410) 786–4466. Daniel Kalwa, (410) 786–1352. Angelo Pardo, (410) 786–1836. SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following website as soon as possible after they have been received: http:// regulations.gov. Follow the search instructions on that website to view public comments. ADDRESSES: I. Background The Health Insurance Portability and Accountability Act of 1996 (HIPAA) required the Secretary of the Department of Health and Human Services (HHS) to adopt standards for electronic health care administrative transactions conducted between health care providers, health plans, and health care clearinghouses. In January 2009 (74 FR 3295), the Secretary adopted the National Council of Prescription Drug Programs (NCPDP) Telecommunication Standard Implementation Guide, PO 00000 Frm 00062 Fmt 4702 Sfmt 4702 633 Version D, Release 0, August 2007 (hereinafter referred to as Version D.0) for the following retail pharmacy transactions: Health care claims or equivalent encounter information; referral certification and authorization; and coordination of benefits. As discussed later, a technical issue with Version D.0 necessitates a modification of the requirements for the use of this standard. A. Inappropriate Medicare Part D Payments for Schedule II Drugs Billed as Refills The HHS Office of the Inspector General (OIG) conducted a study of Medicare Part D payments for Schedule II drugs that were billed as refills in 2009. Schedule II drugs are of particular interest to regulators because of the public health issues associated with their use and the potential for misuse and abuse. Schedule II drugs are defined, in part, by the Controlled Substances Act (CSA) as those with a high potential for abuse, with use potentially leading to severe psychological or physical dependence (21 U.S.C. 812(b)(2)). The CSA prohibits the refilling of Schedule II drugs; however, in some cases partial fills are permissible. Partial fills of Schedule II drugs were previously allowed only in limited circumstances, including where a pharmacist had less quantity on hand than the prescribed amount of medication, the prescription was for a patient in a LTC facility, or a patient had a terminal illness.1 Based on the data from the study, the HHS OIG issued a report in September 2012 titled ‘‘Inappropriate Medicare Part D Payments for Schedule II Drugs Billed as Refills,’’ which analyzed all of the 2009 program year prescription drug event (PDE) records for refills of Schedule II drugs.2 The OIG analyzed 20.1 million records for Schedule II drugs and identified refills according to the numeric values in a particular data field—the Fill Number (403–D3) 3 field. The OIG concluded that the Medicare Part D program had inappropriately paid $25 million for 397,203 Schedule II drug refills and that long-term care 1 The Drug Enforcement Agency (DEA) indicated in a July 2017 letter to the NCPDP that it was currently promulgating proposed rulemaking to address the changes to 21 CFR 1306.13 (which concerns partial fills of prescriptions for Schedule II controlled substances) made by CARA. 2 Inappropriate Medicare Part D Payments for Schedule II Drugs Billed as Refills, https:// oig.hhs.gov/oei/reports/oei-02-09-00605.asp 3 National Council of Prescription Drug Programs (NCPDP) Telecommunication Standard Implementation Guide, Version D, Release 0, August 2007, defines the Fill Number Field as ‘‘403–D3’’. E:\FR\FM\31JAP1.SGM 31JAP1 khammond on DSKBBV9HB2PROD with PROPOSALS 634 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Proposed Rules (LTC) facility pharmacies billed for 75 percent of such refills. OIG stated that the Medicare Part D plan sponsors should not have paid for those drugs because federal law prohibits Schedule II drug refills, and concluded that ‘‘[p]aying for such drugs raises public health concerns and may contribute to the diverting of controlled substances and their being resold on the street.’’ 4 PDE records are claim summary records submitted by prescription drug plan sponsors to CMS for every prescription filled by a provider for a Medicare Part D beneficiary. PDE records contain data elements from prescription drug claims. One of those data elements is the Fill Number (403– D3) field. The Version D.0 implementation specifications require that a ‘‘0’’ be entered in that field for a new prescription and that the number be sequentially increased by 1 for each refill. For purposes of its report, the OIG methodology specified that any value greater than zero is considered a refill.5 Accordingly, where it found the value in the Fill Number (403–D3) field in a PDE record to be greater than zero, the OIG concluded that the PDE record was a refill for a Schedule II drug, though it acknowledged, given the fact that LTC facility pharmacies were allowed to dispense partial fills (where less than the full amount prescribed is dispensed) for Schedule II drugs under certain conditions, that it was possible some LTC facility pharmacies may have incorrectly billed partial fills of these drugs as refills. In its written response to the OIG report,6 the Centers for Medicare & Medicaid Services (CMS) noted its concern that the OIG’s strict interpretation of PDE data did not support the OIG’s findings. CMS believed that the OIG’s findings were based in part on a misinterpretation of Schedule II drug partial fills dispensed to LTC facility residents as refills. The NCPDP maintains a work group, known as WG9 Government Programs Medicare Part D FAQ Task Group (hereinafter referred to as Task Group), designed to guide federal pharmacy programs on NCPDP standards. CMS made an inquiry to the Task Group, noting that although the OIG report appeared to misinterpret partial fills dispensed to patients in LTC facility pharmacies as 4 Inappropriate Medicare Part D Payments for Schedule II Drugs Billed as Refills, page 13 https:// oig.hhs.gov/oei/reports/oei-02-09-00605.asp. 5 Inappropriate Medicare Part D Payments for Schedule II Drugs Billed as Refills, page 6 https:// oig.hhs.gov/oei/reports/oei-02-09-00605.asp. 6 Inappropriate Medicare Part D Payments for Schedule II Drugs Billed as Refills, page 17 https:// oig.hhs.gov/oei/reports/oei-02-09-00605.asp. VerDate Sep<11>2014 17:23 Jan 30, 2019 Jkt 247001 refills, it was not aware of any means by which such a pharmacy could distinguish partial fills of a controlled substance prescription for billing purposes without using the Fill Number (403–D3) field. This inquiry resulted in NCPDP submitting Designated Standard Mainenance Organization (DSMO) change request #1182 7 to update the pharmacy standard. In August 17, 2000 Federal Register (65 FR 50312), we published a final rule titled ‘‘Health Insurance Reform: Standards for Electronic Transactions’’ in which the Secretary adopted procedures to maintain existing HIPAA standards, modify existing HIPAA standards, and adopt new HIPAA standards. This August 2000 final rule also established a new category of organization, entitled ‘‘Designated Standard Maintenance Organization (DSMO).’’ DSMOs which are accredited by the American National Standards Institute (ANSI), are responsible for maintaining the standards adopted under HIPAA and are required to receive and process change requests proposals for new standards or the modification of existing standards. Individuals, entities and organizations that believe an adopted standard requires modification may submit change requests to the appropriate DSMO. The change request must be accompanied by a documented business case that supports the recommendation. The DSMO, through committee structure, will then review the request and notify the appropriate Standard Development Organization, in this case, whether it approves or rejects the modification request. Approved recommendations are then forwarded to National Committee of Vital Health Statistics (NCVHS) by the DSMO. NCVHS reviews the recommendation and, through its own committee structure, determines whether or not to formally recommend adoption of the modification by the Secretary of HHS. DSMO change request #1182, was done in response to CMS request to the Task Group if there was a way to appropriately use the current NCPDP D.0 standard to distinguish partial fills of a controlled substance prescription from refills in LTC facility pharmacy claims. The Task Group replied in a letter 8 to CMS advising that the Version D.0 implementation specification does not support the OIG’s findings regarding the use of the Fill Number (403–D3) field, further stating that the industry 7 https://www.ncpdp.org/NCPDP/media/pdf/ OESS_request_20121115.pdf. 8 https://www.ncpdp.org/NCPDP/media/pdf/ OESS_request_20121115.pdf. PO 00000 Frm 00063 Fmt 4702 Sfmt 4702 uses the Fill Number (403–D3) field to represent the fill number (that is, the amount actually dispensed) and not necessarily the refill number. The Task Group indicated it would work on a clarification to avoid further misinterpretation, advising CMS that the NCPDP would recommend changes to the standard to allow Version D.0 to specify the conditional use of the Quantity Prescribed (460–ET) field, which is not used in the claim billing transaction, to indicate the actual quantity prescribed in the transmission of the claim, which would make data available to validate whether there are inappropriate fills in excess of the quantity prescribed. The NCPDP effected this change in its November 2012 publication of Version D.0, which required the use of the Quantity Prescribed (460–ET) field when claims for Schedule II drugs are submitted to Medicare Part D. NCPDP’s modification to the standard addressed Medicare Part D only, therefore HHS has not adopted the 2012 version because it is limited to Medicare Part D only. Therefore, HIPAA covered entities may not use it to remain in compliance with HIPAA. HHS believes that by modifying the requirements for the use of the NCPDP Telecommunication Standard Implementation Guide, Version D, Release 0 (Version D.0), August 2007, all covered entities, not just entities submitting Medicare Part D transactions, to clearly distinguish whether a prescription is a ‘‘partial fill,’’ where less than the full amount prescribed is dispensed, or a refill, in the HIPAA retail pharmacy transactions. B. National Committee on Vital and Health Statistics (NCVHS) Recommendation The National Committee on Vital and Health Statistics (NCVHS) was established by statute in 1949; it serves as an advisory committee to the Secretary and is statutorily conferred a significant role in the Secretary’s adoption and modification of HIPAA standards. On June 21, 2013, the NCVHS wrote to the Secretary that it agreed with the NCPDP’s recommended plan to allow Version D.0 to specify the conditional use of the Quantity Prescribed (460–ET) field in a republished Version D.0 with an explanation in the Editorial Corrections section and a change to the Version D.0 Editorial Document.9 The NCVHS indicated that with this change, ‘‘data will be available to validate whether or 9 To review the recommendation, see http:// www.ncvhs.hhs.gov/wp-content/uploads/2014/05/ 130621lt1.pdf. E:\FR\FM\31JAP1.SGM 31JAP1 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Proposed Rules khammond on DSKBBV9HB2PROD with PROPOSALS not there are inappropriate fills in excess of the quantity prescribed, a concern raised in a September, 2012 report from the HHS Office of the Inspector General.’’ In light of the opioid crisis, HHS believes in the importance of a targeted modification of the Version D.0 standard, to ensure the availability of data to indicate whether Schedule II drugs are being inappropriately filled, and we are proposing requirements for the use of Version D.0 to specify that covered entities must treat the Quantity Prescribed (460–ET) field as required for retail pharmacy transactions. C. Congressional and Administration Actions in Response to the Opioid Crisis During the last decade the nation has experienced worsening issues with opioid addiction and overdose deaths, prompting various Congressional and Administration actions. For example, the Comprehensive Addiction and Recovery Act (CARA) (Pub. L. 114–198) was enacted on July 22, 2016, and amended the CSA to allow a pharmacist to partially fill a prescription for a Schedule II controlled substance if: (1) Such partial fills are not prohibited by state law; (2) a partial fill is requested by the patient or prescribing practitioner; and (3) the total quantity dispensed in a partial fill does not exceed the quantity prescribed. Partial fills of Schedule II drugs were previously allowed only in limited circumstances, including where a pharmacist had less quantity on hand than the prescribed amount of medication, the prescription was for a patient in a LTC facility, or a patient had a terminal illness.10 We believe CARA’s implementation will yield an upsurge of partial refills, which supports the need for this proposed modification. That view is echoed in a May 31, 2017 letter the NCPDP sent to the DEA, which said ‘‘[w]ith implementation of the CARA partial Fill Provision, the potential exists for a significant increase in the number of occurrences of a prescription for a Schedule II controlled substance being partially filled.’’ At the President’s direction, the Secretary of HHS declared a nationwide public health emergency to address the opioids crisis on October 26, 2017.11 The President also declared a 10 The Drug Enforcement Agency (DEA) indicated in a July 2017 letter to the NCPDP that it was currently promulgating proposed rulemaking to address the changes to 21 CFR 1306.13 (which concerns partial fills of prescriptions for Schedule II controlled substances) made by CARA. 11 https://www.hhs.gov/sites/default/files/ opioid%20PHE%20Declaration-no-sig.pdf. VerDate Sep<11>2014 17:23 Jan 30, 2019 Jkt 247001 nationwide public health emergency pertaining to the opioid crisis and directed the heads of executive departments and agencies to use all lawful means to exercise all appropriate emergency and other relevant authorities to reduce the number of deaths and minimize the devastation the drug demand and opioid crisis inflicts upon American communities. To address the crisis, HHS also announced a 5-Point Strategy calling for better: (1) Addiction prevention, treatment, and recovery services; (2) data; (3) pain management; (4) targeting of overdose reversing drugs; and (5) research.12 The requirements proposed in this rule would support one of HHS’s top opioid strategic priorities calling for better data, which could ultimately result in reduced drug supply. II. Provisions of the Proposed Regulations A. Proposed Modification to the Requirements for Use of the Telecommunication Standard Implementation Guide Version D, Release 0 (Version D.0), August 2007, NCPDP As discussed earlier, covered entities inconsistently reflect partial fills and fill numbers in the HIPAA retail pharmacy transactions that utilize Version D.0 because the currently adopted Version D.0 does not permit covered entities to use the Quantity Prescribed (460–ET) field. As a result, stakeholders cannot reliably discern from transactions data when a Schedule II drug has been partially filled or refilled. To remedy this problem, we are proposing to require, under the circumstances explained later, the Quantity Prescribed (460–ET) field in the August 2007 Version D.0 (the version currently adopted by HHS) to be treated as required. These changes would enable covered entities to clearly distinguish partial fills and fill numbers in the HIPAA retail pharmacy transactions, which would support and improve the Administration’s and the health care industry’s data collection and research efforts by, among other things, enabling policymakers, health care researchers, and other health care stakeholders that monitor the volume of opioids billed to health plans across the country to correctly identify partial fills in claims and prior authorization transactions. By facilitating accurate assessments, policymakers would be able to establish more effective controls and other measures to prevent inappropriate, or 12 https://www.hhs.gov/opioids/about-theepidemic/index.html. PO 00000 Frm 00064 Fmt 4702 Sfmt 4702 635 even illegal, prescribing of Schedule II drugs. In this proposed rule, we would require the Quantity Prescribed (460– ET) field in the August 2007 Version D.0 to be treated as a required field where the transmission uses the August 2007 Version D.0 standard for a Schedule II drug for the following three transactions: (1) Health care claims or equivalent encounter information; (2) referral certification and authorization; and (3) coordination of benefits. We would modify the regulations at §§ 162.1102, 162.1302, and 162.1802 to apply the new requirements. To ensure that the proposed definition of ‘‘Schedule II drugs’’ mirrors the DEA definition, we would specify that the term has the same meaning as the definition of that term at 21 CFR 1308.12. To be clear, our proposal would not modify the presently adopted Version D.0 in any way. Rather, it would require covered entities to treat a field in Version D.0 differently than the Version D.0 implementation specification requires. We further want to make clear that this proposal also does not propose to adopt the 2012 publication of Version D.0. There, the NCPDP changed the Quantity Prescribed (460–ET) field designation from ‘‘not used’’ to ‘‘situational,’’ and the situational circumstance is ‘‘[r]equired for all Medicare Part D claims for drugs dispensed as Schedule II. May be used by trading partner agreement for claims for drugs dispensed as Schedule II only.’’ By applying only to transactions involving Medicare Part D claims, the 2012 publication would not cover a huge swath of HIPAA covered entities and therefore we believe our proposal would yield much greater benefit than if we were to adopt that 2012 publication. We also note that the NCPDP has issued a subsequent publication, the October 2017 Telecommunication Standard Implementation Guide, Version F2 (Version F2), where, among many other unrelated changes, it revised the situational circumstance to specify an even broader use of the Quantity Prescribed (460–ET) field as ‘‘required only if the claim is for a controlled substance or for other products as required by law; otherwise, not available for use.’’ We note that although the NCVHS on May 17, 2018 recommended adoption of Version F2 to the Secretary, we are not presently proposing to adopt it because, it would delay the ability for covered entities to accurately capture partial fills of Schedule II drugs. In addition, given the many other significant changes it would E:\FR\FM\31JAP1.SGM 31JAP1 636 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Proposed Rules require of covered entities, we believe it requires further evaluation. We are, however, committed to continuing to work with stakeholders to update as appropriate the HIPAA standards used for retail pharmacy transactions, and we are carefully considering the NCVHS’s recommendation. In addition, given the public health emergency caused by the opioid crisis and the urgent need to find ways to yield data and information to help combat it, we believe it is more appropriate for us to take this narrow, targeted approach that would not be overly burdensome to covered entities and can be accomplished quickly. khammond on DSKBBV9HB2PROD with PROPOSALS B. Compliance Date We propose to revise § 162.1102 to reflect that covered entities would be required to be in compliance with the modification to the requirements for the use of Version D.0 in retail pharmacy transactions 180 days after the effective date of the final rule. We believe these proposed requirements are a modification to an implementation specification, which is defined at 45 CFR 160.103 as a specific requirement or instruction for implementing a standard. Section 1175(b)(2) of the Act specifies that the compliance date for a modification to a standard or implementation specification cannot be sooner than 180 days after the date the modification is adopted. A modification is considered to be ‘‘adopted’’ on the date it becomes effective in the Federal Register, which in this case would be 60 days after its publication in the Federal Register. Because we believe it is important for this modification to be implemented as soon as statutorily permissible, we are proposing that covered entities would be required to comply with the modification 180 days after the date the modification is adopted in a final rule (to be clear, this would be 240 days following the date of publication of a final rule). III. Collection of Information Requirements This document does not impose information collection and recordkeeping requirements. Consequently, it need not be reviewed by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995. IV. Response to Comments Because of the large number of public comments we normally receive on Federal Register documents, we are not able to acknowledge or respond to them individually. We would consider all VerDate Sep<11>2014 17:23 Jan 30, 2019 Jkt 247001 comments we receive by the date and time specified in the DATES section of this preamble, and, when we proceed with a subsequent document, we would respond to the comments in the preamble to that document. V. Regulatory Impact Statement We have examined the impacts of this rule as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96– 354), section 1102(b) of the Social Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104–4), Executive Order 13132 on Federalism (August 4, 1999), the Congressional Review Act (5 U.S.C. 804(2)), and Executive Order 13771 on Reducing Regulation and Controlling Regulatory Costs (January 30, 2017). Executive Orders 12866 and 13563 direct 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). A Regulatory Impact Analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any 1 year). This rule does not reach the economic threshold and thus is not considered a major rule. Covered entities inconsistently reflect partial fills and fill numbers for Schedule II drugs in retail pharmacy transactions that utilize Version D.0 because Version D.0 does not permit covered entities to use the Quantity Prescribed (460–ET) field. As a result, stakeholders cannot reliably discern from transactions data when a Schedule II drug has been partially filled or refilled. To help understand the economic burden of this issue, we refer back to the previously mentioned 2012 OIG report which estimates that pharmacies inaccurately billed $25 million worth of partial fills as refills in 2009 paid by the Medicare Part D program. The OIG also expressed concerns about the possibility of these inappropriately dispensed Schedule II drugs being resold on the street.13 As noted previously, CMS noted its concern that the OIG’s strict 13 Inappropriate Medicare Part D Payments for Schedule II Drugs Billed as Refills, https:// oig.hhs.gov/oei/reports/oei-02-09-00605.asp. PO 00000 Frm 00065 Fmt 4702 Sfmt 4702 interpretation of PDE data did not support the OIG’s findings. CMS believed that the OIG’s findings were based in part on a misinterpretation of Schedule II drug partial fills dispensed to LTC facility residents as refills, however, these findings are helpful as a starting point for this estimate. The White House Council of Economic Advisers estimates that opioids abuse exacted a cost of $504 billion in 2015 and contributed to a significant number of prescription and illicit drug overdose deaths.14 Furthermore, and as previously discussed, the Secretary declared a public health emergency to combat the opioid crisis. For this analysis we leverage the historical cost and benefit data from the study conducted to support the Modifications to the Health Insurance Portability and Accountability Act (HIPAA) Electronic Transaction Standards proposed and final rules (73 FR 49742 and 74 FR 3295, 3296, respectively) (hereinafter referenced as the study). The impact analysis for this proposed rule utilizes the historical cost estimates derived from the study across covered entities. The final estimate provided an overall cost of $38 million to fully implement the then-new requirements of the 2007 Version D.0 for chain pharmacies (73 FR 49772). Since this is a very narrow, targeted modification that is limited to requiring covered entities to use the Quantity Prescribed (460–ET) field of the already adopted Version D.0, we anticipate the aggregate costs to be minimal. We expect minor system and implementation expenses, which would consist of modifying software configurations, updating business processes, and minimal personnel training. We further believe the investments to adopt this modification and update existing systems have the same cost variables as the adoption of this current D.0 version. We used these same considerations from the January 16, 2009 final rule (74 FR 3296), to formulate our assumptions on implementing system upgrades, and staff training costs. While it is difficult to determine aggregate costs across the industry, we believe system costs for this modification would require limited IT resources, training, and changes to business processes, and have estimated that this modification would cost between 1 to 5 percent of the original estimated cost, or between $380,000 and $1,900,000. The study also estimated a maximum upgrade fee cost of $1.08 million per year for independent pharmacies (73 FR 49772). This results 14 https://www.whitehouse.gov/opioids/. E:\FR\FM\31JAP1.SGM 31JAP1 khammond on DSKBBV9HB2PROD with PROPOSALS Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Proposed Rules in an estimated cost for this modification of $10,800 to $54,000 per year in service fees across all independent pharmacies. Pharmacies would benefit from using the Quantity Prescribed (460–ET) field because it would facilitatefacilitate better monitoring of Schedule II drugs for over- or inappropriate prescribing. By virtue of this more robust data that we believe could be used to help avoid audits and incorrect payments, we, w estimate that large pharmacy chains could save up to $500,000 per year, while, while smaller chains could saveapproximately $100,000 per chain. Therefore, this could yield a total 10year benefit of up to $10 million, and that does not account for the value of the time pharmacists and pharmacy technician staff who process these claims also might save. We believe health plans and their associated pharmacy benefit managers (PBMs) would also incur minimal cost since most have existing hardware and software platforms capable of using this field with their current technology and networks. Thus, we expect this modification to have a similarly minimal cost impact of between 1 and 5 percent of the original implementation costs. The study originally estimated the total cost to implement the 2007 Version D.0 for plans and PBMs to be a maximum of $10.6 million for the industry (73 FR 49773). Thus, we estimate that the total cost for this modification for health plans and PBMs to be between $106,000 and $530,000. Executive Orders 12866 and 13563 direct 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). A RIA must be prepared for major rules with economically significant effects ($100 million or more in any 1 year). This rule does not reach the economic threshold and thus is not considered a major rule. We anticipate that the Quantity Prescribed (460–ET) field requirements would result in a reduction of overprescribing and inappropriate prescribing of Schedule II drugs, and also reinforce our commitment to lowering overall health care costs by reducing administrative burden and improving the quality of health care. The RFA requires agencies to analyze options for regulatory relief of small entities if a rule has a significant impact on a substantial number of small entities. For purposes of the RFA, we VerDate Sep<11>2014 17:23 Jan 30, 2019 Jkt 247001 estimate the great majority of retail pharmacies are small businesses as defined by the Small Business Administration’s (SBA) definition of having revenues of less than $7.5 million to $38.5 million in any 1 year. The SBA defines a size threshold in terms of annual revenues for pharmacies as $27.5 million; we estimate that 95 percent of retail pharmacies have revenues below $27.5 million or are nonprofit organizations and are therefore considered small entities. Individuals and states are not included in the definition of a small entity. We are not preparing an analysis for the RFA because we have determined, and the Secretary certifies, that this proposed rule would not have a significant economic impact on a substantial number of small entities because the Quantity Prescribed (460– ET) field requirements are a minor modification for covered entities. In addition, section 1102(b) of the Act requires us to prepare an RIA if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 603 of the RFA. For purposes of section 1102(b) of the Act, we continue to define a small rural hospital as a hospital that is located outside of a Metropolitan Statistical Area for Medicare payment regulations and has fewer than 100 beds. We are not preparing an analysis for section 1102(b) of the Act because we have determined, and the Secretary certifies, that this proposed rule would not have a significant impact on the operations of a substantial number of small rural hospitals. Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2018, that threshold is approximately $150 million. We believe this proposed rule would have no consequential effect on state, local, or tribal governments or on the private sector in excess of that threshold. Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on state and local governments, preempts state law, or otherwise has Federalism implications. We believe that since this proposed rule would not impose substantial costs on state or local governments, the PO 00000 Frm 00066 Fmt 4702 Sfmt 4702 637 requirements of Executive Order 13132 are not applicable. Executive Order 13771, titled Reducing Regulation and Controlling Regulatory Costs, was issued on January 30, 2017 and requires that the costs associated with significant new regulations ‘‘shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least two prior regulations.’’ This proposed rule is expected to be an E.O. 13771 regulatory action. Details on the estimated costs of this proposed rule can be found in the rule’s economic analysis. We have assessed the anticipated costs and benefits of this proposed rule and estimate that it would reduce operating costs for standard pharmacy transactions, remove inefficiencies and ambiguities, and facilitate better monitoring of Schedule II drugs. In accordance with the provisions of Executive Order 12866, this proposed rule was reviewed by the Office of Management and Budget. List of Subjects 45 CFR Part 162 Administrative practice and procedures, electronic transactions, health facilities, health insurance, hospitals, incorporation by reference, Medicaid, Medicare, Reporting and recordkeeping requirements. For the reasons set forth in the preamble, the Department of Health and Human Services amends 45 CFR part 162 as set forth below: PART 162—ADMINISTRATIVE REQUIREMENTS 1. The authority citation for part 162 continues to read as follows: ■ Authority: Secs. 1171 through 1180 of the Social Security Act (42 U.S.C. 1320d-1320d9), as added by sec. 262 of Pub. L. 104–191, 110 Stat. 2021–2031, sec. 105 of Pub. L. 110– 233, 122 Stat. 881–922, and sec. 264 of Pub. L. 104–191, 110 Stat. 2033–2034 (42 U.S.C. 1320d-2(note), and secs. 1104 and 10109 of Pub. L. 111–148, 124 Stat. 146–154 and 915– 917. 2. Section 162.1102 is amended by adding paragraph (d) to read as follows: ■ § 162.1102 Standards for health care claims or equivalent encounter information transaction. * * * * * (d) For the period on and after [DATE 180 DAYS AFTER THE AFTER PUBLICATION OF THE FINAL RULE IN THE Federal Register], the Quantity Prescribed (460–ET) field must be treated as required where the E:\FR\FM\31JAP1.SGM 31JAP1 638 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Proposed Rules transmission meets both of the following: (1) Is for a Schedule II drug, as defined and updated in 21 CFR 1308.12. (2) Uses the standard identified in paragraph (b)(2)(i) of this section. ■ 3. Section 162.1302 is amended by adding paragraph (d) to read as follows: § 162.1302 Standards for referral certification and authorization transaction. * * * * * (d) For the period on and after [DATE 180 DAYS AFTER THE AFTER PUBLICATION OF THE FINAL RULE IN THE Federal Register], the Quantity Prescribed (460–ET) field must be treated as required where the transmission meets both of the following: (1) Is for a Schedule II drug, as defined and updated in 21 CFR 1308.12. (2) Uses the standard identified in paragraph (b)(2)(i) of this section. ■ 4. Section 162.1802 is amended by adding paragraph (d) to read as follows: § 162.1802 Standards for coordination of benefits information transaction. * * * * * (d) For the period on and after [DATE 180 DAYS AFTER THE PUBLICATION OF THE FINAL RULE IN THE Federal Register], the Quantity Prescribed (460– ET) field must be treated as required where the transmission meets both of the following: (1) Is for a Schedule II drug, as defined and updated in 21 CFR 1308.12. (2) Uses the standard identified in paragraph (b)(2)(i) of this section. Dated: December 18, 2018. Alex M. Azar II, Secretary, Department of Health and Human Services. [FR Doc. 2019–00554 Filed 1–30–19; 8:45 am] BILLING CODE 4120–01–P FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 25 [IB Docket No. 18–314; FCC 18–165] Further Streamlining FCC Rules Governing Satellite Services Federal Communications Commission. ACTION: Proposed rule. khammond on DSKBBV9HB2PROD with PROPOSALS AGENCY: In this document, the Federal Communications Commission (FCC) proposes to create a new, optional, unified license to include both space stations and earth stations operating in a geostationary-satellite orbit, fixedsatellite service satellite network; and to SUMMARY: VerDate Sep<11>2014 17:23 Jan 30, 2019 Jkt 247001 repeal or modify unnecessarily burdensome rules governing satellite services, such as annual reporting requirements. DATES: Comments are due March 18, 2019. Reply comments are due April 16, 2019. ADDRESSES: You may submit comments, identified by IB Docket No. 18–314, by any of the following methods: • FCC website: http://apps.fcc.gov/ ecfs. Follow the instructions for submitting comments. • People with Disabilities: Contact the FCC to request reasonable accommodations (accessible format documents, sign language interpreters, CART, etc.) by email: FCC504@fcc.gov or phone: 202–418–0530 or TTY: 202– 418–0432. For detailed instructions for submitting comments and additional information on the rulemaking process, see the SUPPLEMENTARY INFORMATION section of this document. FOR FURTHER INFORMATION CONTACT: Clay DeCell, 202–418–0803. SUPPLEMENTARY INFORMATION: This is a summary of the Commission’s Notice of Proposed Rulemaking (NPRM), FCC 18– 165, adopted and released November 15, 2018. The full text of the NPRM is available online at https://docs.fcc.gov/ public/attachments/FCC-18-165A1.pdf. The NPRM is also available for inspection and copying during business hours in the FCC Reference Information Center, Portals II, 445 12th Street SW, Room CY–A257, Washington, DC 20554. To request materials in accessible formats for people with disabilities, send an email to FCC504@fcc.gov or call the Consumer & Governmental Affairs Bureau at 202–418–0530 (voice), 202– 418–0432 (TTY). Comment Filing Requirements Interested parties may file comments and reply comments on or before the dates indicated in the DATES section above. Comments may be filed using the Commission’s Electronic Comment Filing System (ECFS). • Electronic Filers. Comments may be filed electronically using the internet by accessing the ECFS, http://apps.fcc.gov/ ecfs. • Paper Filers. Parties who file by paper must include an original and one copy of each filing. Filings may be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission’s Secretary, Office of the Secretary, Federal Communications Commission. PO 00000 Frm 00067 Fmt 4702 Sfmt 4702 • All hand-delivered or messengerdelivered paper filings for the Commission’s Secretary must be delivered to FCC Headquarters at 445 12th Street SW, Room TW–A325, Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes must be disposed of before entering the building. • Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9050 Junction Drive, Annapolis Junction, MD 20701. • U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street SW, Washington DC 20554. • Persons with Disabilities. To request materials in accessible formats for persons with disabilities (braille, large print, electronic files, audio format), or to request reasonable accommodations for filing comments (accessible format documents, sign language interpreters, CART, etc.), send an email to FCC504@ fcc.gov or call 202–418–0530 (voice) or 202–418–0432 (TTY). Ex Parte Presentations Pursuant to 47 CFR 1.1200(a), this proceeding will be treated as a ‘‘permitbut-disclose’’ proceeding in accordance with the Commission’s ex parte rules. Persons making ex parte presentations must file a copy of any written presentation or a memorandum summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine period applies). Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation must (1) list all persons attending or otherwise participating in the meeting at which the ex parte presentation was made, and (2) summarize all data presented and arguments made during the presentation. If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter’s written comments, memoranda or other filings in the proceeding, the presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must be filed consistent with 47 CFR E:\FR\FM\31JAP1.SGM 31JAP1

Agencies

[Federal Register Volume 84, Number 21 (Thursday, January 31, 2019)]
[Proposed Rules]
[Pages 633-638]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-00554]


=======================================================================
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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of the Secretary

45 CFR Part 162

[CMS-0055-P]
RIN 0938-AT52


Administrative Simplification: Modification of the Requirements 
for the Use of Health Insurance Portability and Accountability Act of 
1996 (HIPAA) National Council for Prescription Drug Programs (NCPDP) 
D.0 Standard

AGENCY: Office of the Secretary, HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would adopt a modification to the 
requirements for the use of the Telecommunication Standard 
Implementation Guide, Version D, Release 0 (Version D.0), August 2007, 
National Council for Prescription Drug Programs by requiring covered 
entities to use the Quantity Prescribed (460-ET) field for retail 
pharmacy transactions for Schedule II drugs. The modification would 
enable covered entities to clearly distinguish whether a prescription 
is a ``partial fill,'' where less than the full amount prescribed is 
dispensed, or a refill, in the HIPAA retail pharmacy transactions. We 
believe this modification is important to ensure information is 
available to help prevent impermissible refills of Schedule II drugs, 
which would help to address the public health concerns associated with 
prescription drug abuse in the United States.

DATES: Comment Date: To be assured consideration, comments must be 
received at one of the addresses provided below, no later than 5 p.m. 
April 1, 2019.

ADDRESSES: In commenting, please refer to file code CMS-0055-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    Comments, including mass comment submissions, must be submitted in 
one of the following three ways (please choose only one of the ways 
listed):
    1. Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-0055-P, P.O. Box 8013, 
Baltimore, MD 21244-8013.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-0055-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Geanelle G. Herring, (410) 786-4466. 
Daniel Kalwa, (410) 786-1352. Angelo Pardo, (410) 786-1836.

SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments 
received before the close of the comment period are available for 
viewing by the public, including any personally identifiable or 
confidential business information that is included in a comment. We 
post all comments received before the close of the comment period on 
the following website as soon as possible after they have been 
received: http://regulations.gov. Follow the search instructions on 
that website to view public comments.

I. Background

    The Health Insurance Portability and Accountability Act of 1996 
(HIPAA) required the Secretary of the Department of Health and Human 
Services (HHS) to adopt standards for electronic health care 
administrative transactions conducted between health care providers, 
health plans, and health care clearinghouses. In January 2009 (74 FR 
3295), the Secretary adopted the National Council of Prescription Drug 
Programs (NCPDP) Telecommunication Standard Implementation Guide, 
Version D, Release 0, August 2007 (hereinafter referred to as Version 
D.0) for the following retail pharmacy transactions: Health care claims 
or equivalent encounter information; referral certification and 
authorization; and coordination of benefits. As discussed later, a 
technical issue with Version D.0 necessitates a modification of the 
requirements for the use of this standard.

A. Inappropriate Medicare Part D Payments for Schedule II Drugs Billed 
as Refills

    The HHS Office of the Inspector General (OIG) conducted a study of 
Medicare Part D payments for Schedule II drugs that were billed as 
refills in 2009. Schedule II drugs are of particular interest to 
regulators because of the public health issues associated with their 
use and the potential for misuse and abuse. Schedule II drugs are 
defined, in part, by the Controlled Substances Act (CSA) as those with 
a high potential for abuse, with use potentially leading to severe 
psychological or physical dependence (21 U.S.C. 812(b)(2)). The CSA 
prohibits the refilling of Schedule II drugs; however, in some cases 
partial fills are permissible. Partial fills of Schedule II drugs were 
previously allowed only in limited circumstances, including where a 
pharmacist had less quantity on hand than the prescribed amount of 
medication, the prescription was for a patient in a LTC facility, or a 
patient had a terminal illness.\1\
---------------------------------------------------------------------------

    \1\ The Drug Enforcement Agency (DEA) indicated in a July 2017 
letter to the NCPDP that it was currently promulgating proposed 
rulemaking to address the changes to 21 CFR 1306.13 (which concerns 
partial fills of prescriptions for Schedule II controlled 
substances) made by CARA.
---------------------------------------------------------------------------

    Based on the data from the study, the HHS OIG issued a report in 
September 2012 titled ``Inappropriate Medicare Part D Payments for 
Schedule II Drugs Billed as Refills,'' which analyzed all of the 2009 
program year prescription drug event (PDE) records for refills of 
Schedule II drugs.\2\ The OIG analyzed 20.1 million records for 
Schedule II drugs and identified refills according to the numeric 
values in a particular data field--the Fill Number (403-D3) \3\ field. 
The OIG concluded that the Medicare Part D program had inappropriately 
paid $25 million for 397,203 Schedule II drug refills and that long-
term care

[[Page 634]]

(LTC) facility pharmacies billed for 75 percent of such refills. OIG 
stated that the Medicare Part D plan sponsors should not have paid for 
those drugs because federal law prohibits Schedule II drug refills, and 
concluded that ``[p]aying for such drugs raises public health concerns 
and may contribute to the diverting of controlled substances and their 
being resold on the street.'' \4\
---------------------------------------------------------------------------

    \2\ Inappropriate Medicare Part D Payments for Schedule II Drugs 
Billed as Refills, https://oig.hhs.gov/oei/reports/oei-02-09-00605.asp
    \3\ National Council of Prescription Drug Programs (NCPDP) 
Telecommunication Standard Implementation Guide, Version D, Release 
0, August 2007, defines the Fill Number Field as ``403-D3''.
    \4\ Inappropriate Medicare Part D Payments for Schedule II Drugs 
Billed as Refills, page 13 https://oig.hhs.gov/oei/reports/oei-02-09-00605.asp.
---------------------------------------------------------------------------

    PDE records are claim summary records submitted by prescription 
drug plan sponsors to CMS for every prescription filled by a provider 
for a Medicare Part D beneficiary. PDE records contain data elements 
from prescription drug claims. One of those data elements is the Fill 
Number (403-D3) field. The Version D.0 implementation specifications 
require that a ``0'' be entered in that field for a new prescription 
and that the number be sequentially increased by 1 for each refill. For 
purposes of its report, the OIG methodology specified that any value 
greater than zero is considered a refill.\5\ Accordingly, where it 
found the value in the Fill Number (403-D3) field in a PDE record to be 
greater than zero, the OIG concluded that the PDE record was a refill 
for a Schedule II drug, though it acknowledged, given the fact that LTC 
facility pharmacies were allowed to dispense partial fills (where less 
than the full amount prescribed is dispensed) for Schedule II drugs 
under certain conditions, that it was possible some LTC facility 
pharmacies may have incorrectly billed partial fills of these drugs as 
refills.
---------------------------------------------------------------------------

    \5\ Inappropriate Medicare Part D Payments for Schedule II Drugs 
Billed as Refills, page 6 https://oig.hhs.gov/oei/reports/oei-02-09-00605.asp.
---------------------------------------------------------------------------

    In its written response to the OIG report,\6\ the Centers for 
Medicare & Medicaid Services (CMS) noted its concern that the OIG's 
strict interpretation of PDE data did not support the OIG's findings. 
CMS believed that the OIG's findings were based in part on a 
misinterpretation of Schedule II drug partial fills dispensed to LTC 
facility residents as refills. The NCPDP maintains a work group, known 
as WG9 Government Programs Medicare Part D FAQ Task Group (hereinafter 
referred to as Task Group), designed to guide federal pharmacy programs 
on NCPDP standards. CMS made an inquiry to the Task Group, noting that 
although the OIG report appeared to misinterpret partial fills 
dispensed to patients in LTC facility pharmacies as refills, it was not 
aware of any means by which such a pharmacy could distinguish partial 
fills of a controlled substance prescription for billing purposes 
without using the Fill Number (403-D3) field. This inquiry resulted in 
NCPDP submitting Designated Standard Mainenance Organization (DSMO) 
change request #1182 \7\ to update the pharmacy standard.
---------------------------------------------------------------------------

    \6\ Inappropriate Medicare Part D Payments for Schedule II Drugs 
Billed as Refills, page 17 https://oig.hhs.gov/oei/reports/oei-02-09-00605.asp.
    \7\ https://www.ncpdp.org/NCPDP/media/pdf/OESS_request_20121115.pdf.
---------------------------------------------------------------------------

    In August 17, 2000 Federal Register (65 FR 50312), we published a 
final rule titled ``Health Insurance Reform: Standards for Electronic 
Transactions'' in which the Secretary adopted procedures to maintain 
existing HIPAA standards, modify existing HIPAA standards, and adopt 
new HIPAA standards. This August 2000 final rule also established a new 
category of organization, entitled ``Designated Standard Maintenance 
Organization (DSMO).'' DSMOs which are accredited by the American 
National Standards Institute (ANSI), are responsible for maintaining 
the standards adopted under HIPAA and are required to receive and 
process change requests proposals for new standards or the modification 
of existing standards. Individuals, entities and organizations that 
believe an adopted standard requires modification may submit change 
requests to the appropriate DSMO. The change request must be 
accompanied by a documented business case that supports the 
recommendation. The DSMO, through committee structure, will then review 
the request and notify the appropriate Standard Development 
Organization, in this case, whether it approves or rejects the 
modification request. Approved recommendations are then forwarded to 
National Committee of Vital Health Statistics (NCVHS) by the DSMO. 
NCVHS reviews the recommendation and, through its own committee 
structure, determines whether or not to formally recommend adoption of 
the modification by the Secretary of HHS.
    DSMO change request #1182, was done in response to CMS request to 
the Task Group if there was a way to appropriately use the current 
NCPDP D.0 standard to distinguish partial fills of a controlled 
substance prescription from refills in LTC facility pharmacy claims. 
The Task Group replied in a letter \8\ to CMS advising that the Version 
D.0 implementation specification does not support the OIG's findings 
regarding the use of the Fill Number (403-D3) field, further stating 
that the industry uses the Fill Number (403-D3) field to represent the 
fill number (that is, the amount actually dispensed) and not 
necessarily the refill number. The Task Group indicated it would work 
on a clarification to avoid further misinterpretation, advising CMS 
that the NCPDP would recommend changes to the standard to allow Version 
D.0 to specify the conditional use of the Quantity Prescribed (460-ET) 
field, which is not used in the claim billing transaction, to indicate 
the actual quantity prescribed in the transmission of the claim, which 
would make data available to validate whether there are inappropriate 
fills in excess of the quantity prescribed. The NCPDP effected this 
change in its November 2012 publication of Version D.0, which required 
the use of the Quantity Prescribed (460-ET) field when claims for 
Schedule II drugs are submitted to Medicare Part D. NCPDP's 
modification to the standard addressed Medicare Part D only, therefore 
HHS has not adopted the 2012 version because it is limited to Medicare 
Part D only. Therefore, HIPAA covered entities may not use it to remain 
in compliance with HIPAA. HHS believes that by modifying the 
requirements for the use of the NCPDP Telecommunication Standard 
Implementation Guide, Version D, Release 0 (Version D.0), August 2007, 
all covered entities, not just entities submitting Medicare Part D 
transactions, to clearly distinguish whether a prescription is a 
``partial fill,'' where less than the full amount prescribed is 
dispensed, or a refill, in the HIPAA retail pharmacy transactions.
---------------------------------------------------------------------------

    \8\ https://www.ncpdp.org/NCPDP/media/pdf/OESS_request_20121115.pdf.
---------------------------------------------------------------------------

B. National Committee on Vital and Health Statistics (NCVHS) 
Recommendation

    The National Committee on Vital and Health Statistics (NCVHS) was 
established by statute in 1949; it serves as an advisory committee to 
the Secretary and is statutorily conferred a significant role in the 
Secretary's adoption and modification of HIPAA standards. On June 21, 
2013, the NCVHS wrote to the Secretary that it agreed with the NCPDP's 
recommended plan to allow Version D.0 to specify the conditional use of 
the Quantity Prescribed (460-ET) field in a republished Version D.0 
with an explanation in the Editorial Corrections section and a change 
to the Version D.0 Editorial Document.\9\ The NCVHS indicated that with 
this change, ``data will be available to validate whether or

[[Page 635]]

not there are inappropriate fills in excess of the quantity prescribed, 
a concern raised in a September, 2012 report from the HHS Office of the 
Inspector General.'' In light of the opioid crisis, HHS believes in the 
importance of a targeted modification of the Version D.0 standard, to 
ensure the availability of data to indicate whether Schedule II drugs 
are being inappropriately filled, and we are proposing requirements for 
the use of Version D.0 to specify that covered entities must treat the 
Quantity Prescribed (460-ET) field as required for retail pharmacy 
transactions.
---------------------------------------------------------------------------

    \9\ To review the recommendation, see http://www.ncvhs.hhs.gov/wp-content/uploads/2014/05/130621lt1.pdf.
---------------------------------------------------------------------------

C. Congressional and Administration Actions in Response to the Opioid 
Crisis

    During the last decade the nation has experienced worsening issues 
with opioid addiction and overdose deaths, prompting various 
Congressional and Administration actions. For example, the 
Comprehensive Addiction and Recovery Act (CARA) (Pub. L. 114-198) was 
enacted on July 22, 2016, and amended the CSA to allow a pharmacist to 
partially fill a prescription for a Schedule II controlled substance 
if: (1) Such partial fills are not prohibited by state law; (2) a 
partial fill is requested by the patient or prescribing practitioner; 
and (3) the total quantity dispensed in a partial fill does not exceed 
the quantity prescribed. Partial fills of Schedule II drugs were 
previously allowed only in limited circumstances, including where a 
pharmacist had less quantity on hand than the prescribed amount of 
medication, the prescription was for a patient in a LTC facility, or a 
patient had a terminal illness.\10\
---------------------------------------------------------------------------

    \10\ The Drug Enforcement Agency (DEA) indicated in a July 2017 
letter to the NCPDP that it was currently promulgating proposed 
rulemaking to address the changes to 21 CFR 1306.13 (which concerns 
partial fills of prescriptions for Schedule II controlled 
substances) made by CARA.
---------------------------------------------------------------------------

    We believe CARA's implementation will yield an upsurge of partial 
refills, which supports the need for this proposed modification. That 
view is echoed in a May 31, 2017 letter the NCPDP sent to the DEA, 
which said ``[w]ith implementation of the CARA partial Fill Provision, 
the potential exists for a significant increase in the number of 
occurrences of a prescription for a Schedule II controlled substance 
being partially filled.''
    At the President's direction, the Secretary of HHS declared a 
nationwide public health emergency to address the opioids crisis on 
October 26, 2017.\11\ The President also declared a nationwide public 
health emergency pertaining to the opioid crisis and directed the heads 
of executive departments and agencies to use all lawful means to 
exercise all appropriate emergency and other relevant authorities to 
reduce the number of deaths and minimize the devastation the drug 
demand and opioid crisis inflicts upon American communities. To address 
the crisis, HHS also announced a 5-Point Strategy calling for better: 
(1) Addiction prevention, treatment, and recovery services; (2) data; 
(3) pain management; (4) targeting of overdose reversing drugs; and (5) 
research.\12\ The requirements proposed in this rule would support one 
of HHS's top opioid strategic priorities calling for better data, which 
could ultimately result in reduced drug supply.
---------------------------------------------------------------------------

    \11\ https://www.hhs.gov/sites/default/files/opioid%20PHE%20Declaration-no-sig.pdf.
    \12\ https://www.hhs.gov/opioids/about-the-epidemic/index.html.
---------------------------------------------------------------------------

II. Provisions of the Proposed Regulations

A. Proposed Modification to the Requirements for Use of the 
Telecommunication Standard Implementation Guide Version D, Release 0 
(Version D.0), August 2007, NCPDP

    As discussed earlier, covered entities inconsistently reflect 
partial fills and fill numbers in the HIPAA retail pharmacy 
transactions that utilize Version D.0 because the currently adopted 
Version D.0 does not permit covered entities to use the Quantity 
Prescribed (460-ET) field. As a result, stakeholders cannot reliably 
discern from transactions data when a Schedule II drug has been 
partially filled or refilled. To remedy this problem, we are proposing 
to require, under the circumstances explained later, the Quantity 
Prescribed (460-ET) field in the August 2007 Version D.0 (the version 
currently adopted by HHS) to be treated as required. These changes 
would enable covered entities to clearly distinguish partial fills and 
fill numbers in the HIPAA retail pharmacy transactions, which would 
support and improve the Administration's and the health care industry's 
data collection and research efforts by, among other things, enabling 
policymakers, health care researchers, and other health care 
stakeholders that monitor the volume of opioids billed to health plans 
across the country to correctly identify partial fills in claims and 
prior authorization transactions. By facilitating accurate assessments, 
policymakers would be able to establish more effective controls and 
other measures to prevent inappropriate, or even illegal, prescribing 
of Schedule II drugs.
    In this proposed rule, we would require the Quantity Prescribed 
(460-ET) field in the August 2007 Version D.0 to be treated as a 
required field where the transmission uses the August 2007 Version D.0 
standard for a Schedule II drug for the following three transactions: 
(1) Health care claims or equivalent encounter information; (2) 
referral certification and authorization; and (3) coordination of 
benefits. We would modify the regulations at Sec. Sec.  162.1102, 
162.1302, and 162.1802 to apply the new requirements. To ensure that 
the proposed definition of ``Schedule II drugs'' mirrors the DEA 
definition, we would specify that the term has the same meaning as the 
definition of that term at 21 CFR 1308.12.
    To be clear, our proposal would not modify the presently adopted 
Version D.0 in any way. Rather, it would require covered entities to 
treat a field in Version D.0 differently than the Version D.0 
implementation specification requires. We further want to make clear 
that this proposal also does not propose to adopt the 2012 publication 
of Version D.0. There, the NCPDP changed the Quantity Prescribed (460-
ET) field designation from ``not used'' to ``situational,'' and the 
situational circumstance is ``[r]equired for all Medicare Part D claims 
for drugs dispensed as Schedule II. May be used by trading partner 
agreement for claims for drugs dispensed as Schedule II only.'' By 
applying only to transactions involving Medicare Part D claims, the 
2012 publication would not cover a huge swath of HIPAA covered entities 
and therefore we believe our proposal would yield much greater benefit 
than if we were to adopt that 2012 publication.
    We also note that the NCPDP has issued a subsequent publication, 
the October 2017 Telecommunication Standard Implementation Guide, 
Version F2 (Version F2), where, among many other unrelated changes, it 
revised the situational circumstance to specify an even broader use of 
the Quantity Prescribed (460-ET) field as ``required only if the claim 
is for a controlled substance or for other products as required by law; 
otherwise, not available for use.'' We note that although the NCVHS on 
May 17, 2018 recommended adoption of Version F2 to the Secretary, we 
are not presently proposing to adopt it because, it would delay the 
ability for covered entities to accurately capture partial fills of 
Schedule II drugs. In addition, given the many other significant 
changes it would

[[Page 636]]

require of covered entities, we believe it requires further evaluation. 
We are, however, committed to continuing to work with stakeholders to 
update as appropriate the HIPAA standards used for retail pharmacy 
transactions, and we are carefully considering the NCVHS's 
recommendation.
    In addition, given the public health emergency caused by the opioid 
crisis and the urgent need to find ways to yield data and information 
to help combat it, we believe it is more appropriate for us to take 
this narrow, targeted approach that would not be overly burdensome to 
covered entities and can be accomplished quickly.

B. Compliance Date

    We propose to revise Sec.  162.1102 to reflect that covered 
entities would be required to be in compliance with the modification to 
the requirements for the use of Version D.0 in retail pharmacy 
transactions 180 days after the effective date of the final rule.
    We believe these proposed requirements are a modification to an 
implementation specification, which is defined at 45 CFR 160.103 as a 
specific requirement or instruction for implementing a standard. 
Section 1175(b)(2) of the Act specifies that the compliance date for a 
modification to a standard or implementation specification cannot be 
sooner than 180 days after the date the modification is adopted. A 
modification is considered to be ``adopted'' on the date it becomes 
effective in the Federal Register, which in this case would be 60 days 
after its publication in the Federal Register. Because we believe it is 
important for this modification to be implemented as soon as 
statutorily permissible, we are proposing that covered entities would 
be required to comply with the modification 180 days after the date the 
modification is adopted in a final rule (to be clear, this would be 240 
days following the date of publication of a final rule).

III. Collection of Information Requirements

    This document does not impose information collection and 
recordkeeping requirements. Consequently, it need not be reviewed by 
the Office of Management and Budget under the authority of the 
Paperwork Reduction Act of 1995.

IV. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We would consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed with a subsequent document, we would respond to 
the comments in the preamble to that document.

V. Regulatory Impact Statement

    We have examined the impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, 
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 
1999), the Congressional Review Act (5 U.S.C. 804(2)), and Executive 
Order 13771 on Reducing Regulation and Controlling Regulatory Costs 
(January 30, 2017).
    Executive Orders 12866 and 13563 direct 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). A 
Regulatory Impact Analysis (RIA) must be prepared for major rules with 
economically significant effects ($100 million or more in any 1 year). 
This rule does not reach the economic threshold and thus is not 
considered a major rule.
    Covered entities inconsistently reflect partial fills and fill 
numbers for Schedule II drugs in retail pharmacy transactions that 
utilize Version D.0 because Version D.0 does not permit covered 
entities to use the Quantity Prescribed (460-ET) field. As a result, 
stakeholders cannot reliably discern from transactions data when a 
Schedule II drug has been partially filled or refilled. To help 
understand the economic burden of this issue, we refer back to the 
previously mentioned 2012 OIG report which estimates that pharmacies 
inaccurately billed $25 million worth of partial fills as refills in 
2009 paid by the Medicare Part D program. The OIG also expressed 
concerns about the possibility of these inappropriately dispensed 
Schedule II drugs being resold on the street.\13\ As noted previously, 
CMS noted its concern that the OIG's strict interpretation of PDE data 
did not support the OIG's findings. CMS believed that the OIG's 
findings were based in part on a misinterpretation of Schedule II drug 
partial fills dispensed to LTC facility residents as refills, however, 
these findings are helpful as a starting point for this estimate. The 
White House Council of Economic Advisers estimates that opioids abuse 
exacted a cost of $504 billion in 2015 and contributed to a significant 
number of prescription and illicit drug overdose deaths.\14\ 
Furthermore, and as previously discussed, the Secretary declared a 
public health emergency to combat the opioid crisis.
---------------------------------------------------------------------------

    \13\ Inappropriate Medicare Part D Payments for Schedule II 
Drugs Billed as Refills, https://oig.hhs.gov/oei/reports/oei-02-09-00605.asp.
    \14\ https://www.whitehouse.gov/opioids/.
---------------------------------------------------------------------------

    For this analysis we leverage the historical cost and benefit data 
from the study conducted to support the Modifications to the Health 
Insurance Portability and Accountability Act (HIPAA) Electronic 
Transaction Standards proposed and final rules (73 FR 49742 and 74 FR 
3295, 3296, respectively) (hereinafter referenced as the study). The 
impact analysis for this proposed rule utilizes the historical cost 
estimates derived from the study across covered entities. The final 
estimate provided an overall cost of $38 million to fully implement the 
then-new requirements of the 2007 Version D.0 for chain pharmacies (73 
FR 49772). Since this is a very narrow, targeted modification that is 
limited to requiring covered entities to use the Quantity Prescribed 
(460-ET) field of the already adopted Version D.0, we anticipate the 
aggregate costs to be minimal. We expect minor system and 
implementation expenses, which would consist of modifying software 
configurations, updating business processes, and minimal personnel 
training. We further believe the investments to adopt this modification 
and update existing systems have the same cost variables as the 
adoption of this current D.0 version. We used these same considerations 
from the January 16, 2009 final rule (74 FR 3296), to formulate our 
assumptions on implementing system upgrades, and staff training costs. 
While it is difficult to determine aggregate costs across the industry, 
we believe system costs for this modification would require limited IT 
resources, training, and changes to business processes, and have 
estimated that this modification would cost between 1 to 5 percent of 
the original estimated cost, or between $380,000 and $1,900,000. The 
study also estimated a maximum upgrade fee cost of $1.08 million per 
year for independent pharmacies (73 FR 49772). This results

[[Page 637]]

in an estimated cost for this modification of $10,800 to $54,000 per 
year in service fees across all independent pharmacies.
    Pharmacies would benefit from using the Quantity Prescribed (460-
ET) field because it would facilitatefacilitate better monitoring of 
Schedule II drugs for over- or inappropriate prescribing. By virtue of 
this more robust data that we believe could be used to help avoid 
audits and incorrect payments, we, w estimate that large pharmacy 
chains could save up to $500,000 per year, while, while smaller chains 
could saveapproximately $100,000 per chain. Therefore, this could yield 
a total 10-year benefit of up to $10 million, and that does not account 
for the value of the time pharmacists and pharmacy technician staff who 
process these claims also might save.
    We believe health plans and their associated pharmacy benefit 
managers (PBMs) would also incur minimal cost since most have existing 
hardware and software platforms capable of using this field with their 
current technology and networks. Thus, we expect this modification to 
have a similarly minimal cost impact of between 1 and 5 percent of the 
original implementation costs. The study originally estimated the total 
cost to implement the 2007 Version D.0 for plans and PBMs to be a 
maximum of $10.6 million for the industry (73 FR 49773). Thus, we 
estimate that the total cost for this modification for health plans and 
PBMs to be between $106,000 and $530,000.
    Executive Orders 12866 and 13563 direct 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). A RIA 
must be prepared for major rules with economically significant effects 
($100 million or more in any 1 year). This rule does not reach the 
economic threshold and thus is not considered a major rule. We 
anticipate that the Quantity Prescribed (460-ET) field requirements 
would result in a reduction of overprescribing and inappropriate 
prescribing of Schedule II drugs, and also reinforce our commitment to 
lowering overall health care costs by reducing administrative burden 
and improving the quality of health care.
    The RFA requires agencies to analyze options for regulatory relief 
of small entities if a rule has a significant impact on a substantial 
number of small entities. For purposes of the RFA, we estimate the 
great majority of retail pharmacies are small businesses as defined by 
the Small Business Administration's (SBA) definition of having revenues 
of less than $7.5 million to $38.5 million in any 1 year. The SBA 
defines a size threshold in terms of annual revenues for pharmacies as 
$27.5 million; we estimate that 95 percent of retail pharmacies have 
revenues below $27.5 million or are nonprofit organizations and are 
therefore considered small entities. Individuals and states are not 
included in the definition of a small entity. We are not preparing an 
analysis for the RFA because we have determined, and the Secretary 
certifies, that this proposed rule would not have a significant 
economic impact on a substantial number of small entities because the 
Quantity Prescribed (460-ET) field requirements are a minor 
modification for covered entities.
    In addition, section 1102(b) of the Act requires us to prepare an 
RIA if a rule may have a significant impact on the operations of a 
substantial number of small rural hospitals. This analysis must conform 
to the provisions of section 603 of the RFA. For purposes of section 
1102(b) of the Act, we continue to define a small rural hospital as a 
hospital that is located outside of a Metropolitan Statistical Area for 
Medicare payment regulations and has fewer than 100 beds. We are not 
preparing an analysis for section 1102(b) of the Act because we have 
determined, and the Secretary certifies, that this proposed rule would 
not have a significant impact on the operations of a substantial number 
of small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. In 2018, that 
threshold is approximately $150 million. We believe this proposed rule 
would have no consequential effect on state, local, or tribal 
governments or on the private sector in excess of that threshold.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on state 
and local governments, preempts state law, or otherwise has Federalism 
implications. We believe that since this proposed rule would not impose 
substantial costs on state or local governments, the requirements of 
Executive Order 13132 are not applicable.
    Executive Order 13771, titled Reducing Regulation and Controlling 
Regulatory Costs, was issued on January 30, 2017 and requires that the 
costs associated with significant new regulations ``shall, to the 
extent permitted by law, be offset by the elimination of existing costs 
associated with at least two prior regulations.'' This proposed rule is 
expected to be an E.O. 13771 regulatory action. Details on the 
estimated costs of this proposed rule can be found in the rule's 
economic analysis.
    We have assessed the anticipated costs and benefits of this 
proposed rule and estimate that it would reduce operating costs for 
standard pharmacy transactions, remove inefficiencies and ambiguities, 
and facilitate better monitoring of Schedule II drugs.
    In accordance with the provisions of Executive Order 12866, this 
proposed rule was reviewed by the Office of Management and Budget.

List of Subjects

45 CFR Part 162

    Administrative practice and procedures, electronic transactions, 
health facilities, health insurance, hospitals, incorporation by 
reference, Medicaid, Medicare, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, the Department of Health 
and Human Services amends 45 CFR part 162 as set forth below:

PART 162--ADMINISTRATIVE REQUIREMENTS

0
1. The authority citation for part 162 continues to read as follows:

    Authority:  Secs. 1171 through 1180 of the Social Security Act 
(42 U.S.C. 1320d-1320d-9), as added by sec. 262 of Pub. L. 104-191, 
110 Stat. 2021-2031, sec. 105 of Pub. L. 110-233, 122 Stat. 881-922, 
and sec. 264 of Pub. L. 104-191, 110 Stat. 2033-2034 (42 U.S.C. 
1320d-2(note), and secs. 1104 and 10109 of Pub. L. 111-148, 124 
Stat. 146-154 and 915-917.

0
2. Section 162.1102 is amended by adding paragraph (d) to read as 
follows:


Sec.  162.1102  Standards for health care claims or equivalent 
encounter information transaction.

* * * * *
    (d) For the period on and after [DATE 180 DAYS AFTER THE AFTER 
PUBLICATION OF THE FINAL RULE IN THE Federal Register], the Quantity 
Prescribed (460-ET) field must be treated as required where the

[[Page 638]]

transmission meets both of the following:
    (1) Is for a Schedule II drug, as defined and updated in 21 CFR 
1308.12.
    (2) Uses the standard identified in paragraph (b)(2)(i) of this 
section.
0
3. Section 162.1302 is amended by adding paragraph (d) to read as 
follows:


Sec.  162.1302   Standards for referral certification and authorization 
transaction.

* * * * *
    (d) For the period on and after [DATE 180 DAYS AFTER THE AFTER 
PUBLICATION OF THE FINAL RULE IN THE Federal Register], the Quantity 
Prescribed (460-ET) field must be treated as required where the 
transmission meets both of the following:
    (1) Is for a Schedule II drug, as defined and updated in 21 CFR 
1308.12.
    (2) Uses the standard identified in paragraph (b)(2)(i) of this 
section.
0
4. Section 162.1802 is amended by adding paragraph (d) to read as 
follows:


Sec.  162.1802  Standards for coordination of benefits information 
transaction.

* * * * *
    (d) For the period on and after [DATE 180 DAYS AFTER THE 
PUBLICATION OF THE FINAL RULE IN THE Federal Register], the Quantity 
Prescribed (460-ET) field must be treated as required where the 
transmission meets both of the following:
    (1) Is for a Schedule II drug, as defined and updated in 21 CFR 
1308.12.
    (2) Uses the standard identified in paragraph (b)(2)(i) of this 
section.

    Dated: December 18, 2018.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2019-00554 Filed 1-30-19; 8:45 am]
 BILLING CODE 4120-01-P