07-1434. Medicare Program; Physicians' Referrals to Health Care Entities With Which They Have Financial Relations (Phase II); Continuation of Effectiveness and Extension of Timeline for Publication of Final Rule

AGENCY:

Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION:

Interim final rule; continuation of effectiveness and extension of timeline for publication of final rule.

SUMMARY:

This notice announces the continuation of effectiveness of a Medicare interim final rule and the extension of the timeline for publication of the final rule. This notice is issued in accordance with section 1871(a)(3)(C) of the Social Security Act (the Act), which allows an interim final rule to remain in effect after the expiration of the timeline specified in section 1871(a)(3)(B) of the Act if the Secretary publishes a notice of continuation prior to the expiration of the timeline.

DATES:

Effective Date: This notice is effective on March 23, 2007.

FOR FURTHER INFORMATION CONTACT:

Lisa Ohrin, [phone].

SUPPLEMENTARY INFORMATION:

I. Background

Section 1871(a)(3)(A) of the Social Security Act (Act) requires the Secretary, in consultation with the Director of the Office of Management and Budget (OMB), to establish a regular timeline for the publication of a final rule based on the previous publication of a proposed rule or an interim final rule. In accordance with section 1871(a)(3)(B) of the Act, such regular timeline may vary among different final rules, based on the complexity of the rule, the number and scope of the comments received, and other relevant factors. The timeline for publishing the final regulation; however, cannot exceed 3 years from the date of publication of the proposed or interim final rule, unless there are exceptional circumstances. After consultation with the Director of OMB, we published a notice in the Federal Register on December 30, 2004 (69 FR 78442) establishing a general 3-year timeline for publishing final rules after the publication of a proposed or interim final rule.

Section 1871(a)(3)(C) of the Act states that a Medicare interim final rule shall not continue in effect if the final rule is not published before the expiration of the regular timeline, unless the Secretary publishes at the end of the regular timeline a notice of continuation that includes an explanation of why the regular timeline was not met. Upon publication of such a notice, the timeline for publishing the final rule is extended for 1 year.

II. Notice of Continuation

On March 26, 2004, we published an interim final rule with comment period (the “Phase II” rule), which set forth the physician self-referral prohibition and applicable definitions, interpreted various statutory exceptions to the prohibition, and created additional regulatory exceptions for arrangements that do not pose a risk of program or patient abuse (69 FR 16054). Phase II also responded to comments received from an earlier interim final rule (the “Phase I” rule) regarding the physician self-referral prohibition, which was published on January 4, 2001 (66 FR 856). Under the previously established regular timeline for the publication of a final rule, we must respond to public comments on the Phase II rule in a final rule (the “Phase III” rule) published no later than March 26, 2007.

This notice announces an extension of the timeline for publication of the Phase III physician self-referral final rule and the continuation of effectiveness of the Phase II interim final rule. We are not able to meet the 3-year timeline for publication because we received extensive public comments requesting clarification of and revisions to the physician self-referral regulations. We have given the numerous and varied public comments exhaustive review, which required a significant amount of time and resources. Further, because the physician self-referral rules are jointly enforced by CMS, the Office of Inspector General, and the Department of Justice, substantial interagency coordination has been necessary.

This notice extends the timeline for publication of the Phase III final rule through March 26, 2008. In accordance with section 1871(a)(3)(C) of the Act, the March 26, 2004 interim final rule shall remain in effect through March 26, 2008 (unless Phase III is published and becomes effective before March 26, 2008).

Authority: Section 1871 of the Social Security Act (42 U.S.C. 1395hh).

(Catalog of Federal Domestic Assistance Program No. 93.773 Medicare—Hospital Insurance Program; and No. 93.774, Medicare—Supplementary Medical Insurance Program)

Dated: March 19, 2007.

Ann C. Agnew,

Executive Secretary to the Department.