Department of Health and Human Services January 15, 2008 – Federal Register Recent Federal Regulation Documents

The Food and Drug Administration (FDA) is announcing that a collection of information entitled ``Patent Term Restoration, Due Diligence Petitions, Filing, Format, and Content of Petitions'' has been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995.

The Food and Drug Administration (FDA) is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act of 1995 (the PRA), Federal agencies are required to publish notice in the Federal Register concerning each proposed collection of information, including each proposed extension of an existing collection of information, and to allow 60 days for public comment in response to the notice. This notice solicits comments on the procedures by which sponsors of orphan drugs may request eligibility for the incentives by implementing a program as outlined in the Orphan Drug Act and the joint adoption by FDA and the European Medicines Agency (EMEA) of the Common EMEA/FDA Application Form for Orphan Medicinal Product Designation (form FDA 3671).

The Food and Drug Administration (FDA) is announcing a tentative schedule of forthcoming meetings of its public advisory committees for 2008. During 1991, at the request of the Commissioner of Food and Drugs (the Commissioner), the Institute of Medicine (the IOM) conducted a study of the use of FDA's advisory committees. In its final report, one of the IOM's recommendations was for the agency to publish an annual tentative schedule of its meetings in the Federal Register. This publication implements the IOM's recommendation.

This document corrects typographical errors identified in the final rule that appeared in the January 3, 2008 Federal Register (73 FR 404). The final rule delayed until January 1, 2009 the applicability of the anti-markup provisions in Sec. 414.50, as revised at 72 FR 66222, except with respect to the technical component of a purchased diagnostic test and with respect to any anatomic pathology diagnostic testing services furnished in space that is utilized by a physician group practice as a ``centralized building'' (as defined at Sec. 411.351) for purposes of complying with the physician self-referral rules and does not qualify as a ``same building'' under Sec. 411.355(b)(2)(i) of this chapter.

The Food and Drug Administration (FDA) is announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995.

The Health Resources and Services Administration (HRSA) is seeking comments from the public on its plan to institute a permanent deviation from a policy in the Department of Health and Human Services (HHS), Grants Policy Directive (GPD) 3.01 governing indirect cost recovery for one of its grant programs. The GPD states ``HHS considers activities conducted by grantees that result in indirect charges a necessary and appropriate part of HHS grants, and HHS awarding offices must reimburse their share of these costs.'' Although HRSA typically reimburses grantees for their full share of administrative overhead represented in approved indirect cost rates (which can be up to 50 percent or higher), the Agency believes, in the case of its Small Rural Hospital Improvement Grant Program (SHIP), that full recovery of overhead expenditures would be detrimental to the ability to adequately conduct the activities mandated in the authorizing legislation. The purpose of the SHIP grant program is to assist eligible small rural hospitals in implementing Prospective Payments Systems (PPS), compliance with the Health Insurance Portability and Accountability Act (HIPAA) regulations, and to reduce medical errors and to support quality improvement. Funding for the SHIP grant program is routed first through the State Offices of Rural Health (SORH); they are then distributed evenly by the SORH to the individual hospitals. This process creates efficiencies because of the large number of eligible hospitals and relatively small size of each award. In fiscal year 2007, $14,508,691 was awarded to 1,622 hospitals (approximately $8,945 each) in 46 States. Thus, the SORH is the official grantee of record for the State, as the recipient of the award and fiscal intermediary for the Federal government in distributing the funds. It is in the best interest of the SHIP grant program to limit the total administrative cost recovery to 5 percent of the Federal award, thereby allowing 95 percent of available grant funds to be used to carry out the required program activities. Since the SHIP grant program began in FY 02, through FY 07, the administrative costs have been restricted. Indirect costs were not allowed and there was a five percent maximum of other costs, for administrative costs, within the grant guidance. The SORHs voluntarily decided to limit these cost categories. For FY 07, the average administrative charge was only 3.64 percent. Thus, the cap on administrative costs has worked well. Limiting administrative costs is necessary because 20 percent of SHIP grantees are located in academic settings that have established indirect cost rates in the range of 30 to 50 percent. Without a limitation on the amount of grant funds allocated for administrative costs, the SORH grantee could potentially charge its full indirect cost rate and the grant awards would be significantly less for each small rural hospital. As much as 50 percent of the grant award could be consumed by indirect costs, depending upon the host institution's indirect cost rate. This would significantly reduce the amount of funds available to initiate and maintain the activities of the grant. A limitation on administrative costs will ensure that each hospital, not an unintended source, receives the maximum amount of funding. The limitations placed on these cost categories will ensure that the majority of funding is routed to the small rural hospitals, to be used for the prescribed intents and purposes of the grant program. A continued limitation on administrative costs for future SHIP grant cycles will help to assure that small rural hospitals receive the appropriated support, necessary to carry out the objectives of the grant program. The limitation would be applicable to all grantees of the Small Rural Hospital Improvement Grant Program.