Government Updates

The Virginia Chapter of AAHAM and the Virginia Hospital and Healthcare Association have a strong partnership which supports our membership through education and networking.   For more information on the VHHA, click here.

Please contact Brent Rawlings or Sara Heisler with any questions regarding this material.

More information on these and other measures considered during the 2016 session is available at http://leg1.state.va.us.


2016 General Assembly Review

Access to Care

 

Finding a common sense approach to utilizing available federal funds to address the access needs of low-income uninsured Virginians is a top priority for the VHHA.  The 2016 General Assembly session addressed Medicaid expansion, but there was little if any progress made on the issue.

The Governor’s introduced budget authorized Medicaid expansion with the state share of the costs to be financed through an assessment on hospitals, but this language was eliminated from both the House and Senate budget bills.  The final House and Senate budges included what is referred to as the “Stanley Amendment,” which expressly prohibits any general or nongeneral funds from being appropriated or expended for costs as may be incurred to implement coverage for the newly eligible population under Medicaid expansion.

One introduced bill, HB 797 (Plum), sought to implement Medicaid expansion by modifying Medicaid eligibility to include newly eligible individuals.  This bill was tabled and failed to report out of a subcommittee of the House Health, Welfare and Institutions Committee (“HWI”).

In the absence of a broader efforts to address the access needs of low-income uninsured Virginians, the General Assembly did include in the House and Senate budget bills additional funding to increase the income eligibility criteria for the so called “Governor’s Access Plan” or “GAP” for adults with serious mental illness from 60 to 80 percent of the federal poverty level, effective July 1, 2016.

Financial Sustainability of Hospitals

 

Ensuring the financial sustainability of our hospitals and health systems is a top priority for the VHHA.  VHHA has supported a process to develop a provider contribution program to draw down additional federal funds for the Medicaid program, provided certain conditions are met. The Governor’s introduced budget authorized the Department of Medical Assistance Services (DMAS) to levy an assessment on private acute care hospitals, capped at three percent, with those funds being used to cover the non-federal share of costs of expanded coverage and the remainder directed to the Virginia Health Care Fund and reserved for 1) the non-federal share of future Medicaid costs; 2) increased payments to hospitals, including rural hospitals; 3) graduate medical education; and 4) the costs of administering the assessment.  This provision was eliminated from the House and Senate budgets.  Hospitals and health systems remain opposed to any contribution program where there is any possibility that the funds generated are used for any purpose other than covering net costs of expanded coverage, addressing Medicaid payment shortfalls, strengthening rural hospitals, providing additional graduate medical education (GME) funding, or used to supplant existing state General Funds within the program.

Medicaid payment rates for inpatient and outpatient hospitals fall well below costs and the General Assembly has not provided inflation updates for hospital payment rates since 2013.  The final House and Senate budgets restore one-half of the inflation updates for hospital payment rates amounting to approximately $32 million over the two-year biennium.

Certificate of Public Need (COPN)

 

VHHA’s position is that any broad scale deregulation of COPN must be done in a thoughtful, comprehensive manner – consistent with the principles laid out in General Assembly’s 2000 plan for deregulation under which each phase of deregulation was accompanied by increases in Medicaid payment rates, coverage for uninsured low-income adults, and full funding of graduate medical education costs.  Meanwhile, COPN process improvements and related efficiencies are needed at this time to ensure that the Commonwealth and its citizens continue to benefit from this program.

Last year, HB 1277 (Orrock) and SB 1283 (Martin) removed capital expenditures for general hospitals from the requirement to obtain a COPN and directed the Secretary of Health and Human Resources to assemble a COPN Work Group to review the current COPN process, and the impact of such process on health care services in the Commonwealth, and the need for changes to the current COPN process, and to make recommendations to the General Assembly by Dec. 1, 2015.  The final report of the COPN Work Group contained a series of recommendations to reform the COPN process.  VHHA supported a majority of the recommendations coming out of the COPN Work Group.

Eighteen different bills were introduced in the 2016 General Assembly session seeking to make various changes to COPN.  Only two of these bills passed out of the House and none passed out of the Senate. HB 350 (Byron) made its way to the Senate floor, but ultimately failed to come to a vote on procedural grounds due to it containing revenue provisions in its amended form.  This resulted in the bill being re-referred to Senate Finance.

These bills could be grouped into three broad categories: 1) repeal, 2) piecemeal deregulation, and 3) reform.  VHHA opposed all of the bills seeking to implement repeal or piecemeal deregulation of COPN, but supported bills seeking to make meaningful reforms to the COPN program.

Repeal Bills

HB 193 (O’Bannon) would have implemented a phased repeal of COPN, deregulating all services except for nursing homes, rehabilitation hospitals and beds, organ or tissue transplant services, and open heart surgery services by July 1, 2018.  Ambulatory and outpatient surgery centers and capital expenditures at medical care facilities would have been deregulated effective July 1, 2016.  Imaging services, including magnetic resonance imaging (MRI), computed tomography (CT), and positron emission tomography (PET) would have been deregulated as of Jan. 1, 2017.  All other services except for nursing homes and rehab, open heart, and organ transplant would have been deregulated as of Jan. 1, 2018.  SB 561 (Newman) and SB 333 (DeSteph) were Senate companions to HB 193.  Another bill, HB 688 (Peace) sought to repeal COPN in its entirety, but the bill was laid on the table in HWI.

HB 193 was subsequently amended to phase-out regulation only for non-rural areas of the state, but to modify the schedule for deregulation of services.  Under the amended bill, non-rural ambulatory and outpatient surgery centers and capital expenditures at non-rural medical care facilities would have been deregulated effective July 1, 2016, and all other services in non-rural areas would have been deregulated, except for nursing homes and rehabilitation hospitals and beds, certain open heart surgery services, and organ and tissue transplant as of Jan. 1, 2017.  The amended bill also included a number of process reforms that were included in other reform bills discussed below.

The amended HB 193 passed out of the House (52-Y 46-N 1-A), but was laid on the table and continued to 2017 in the Senate Education & Health Committee (“Ed & Health”).

Piecemeal Deregulation Bills

Several bills sought to remove select services from COPN review.   VHHA opposed all of these bills, which can be summarized as follows:

  • HB 59 (Byron) eliminated COPN review for the provision of outpatient or ambulatory surgery in specialized centers or clinics or that portion of a physician's office developed for the provision of outpatient or ambulatory surgery.
  • HB 347 (Byron) eliminated COPN review for the establishment of a new medical care facility for the provision of LASIK eye surgery, the addition at an existing medical care facility of any new LASIK service, or the addition at any existing medical care facility of any new equipment for LASIK eye surgery.
  • HB 348 (Byron) eliminated COPN review for the addition by an existing medical care facility of any new cardiac catheterization, CT scanning, stereotactic radiosurgery, lithotripsy, MRI, MSI, open heart surgery, PET scanning, radiation therapy, stereotactic radiotherapy, proton beam therapy, nuclear medicine imaging, or other specialized service designated by the Board by regulation, or equipment for same.
  • HB 349 (Byron) eliminated COPN review for non-rural facilities except (i) nursing homes and (ii) hospitals, specialized centers or clinics or a portion of a physician’s office developed for performance of outpatient or ambulatory surgery, cardiac cath, CT/MRI/MSI/PET, radiation therapy, stereotactic radiotherapy, proton beam therapy, nuclear medicine,
  • HB 463 (Head) eliminated COPN review for transfer of medical equipment for which a COPN was initially required from an existing medical care facility to a medical care facility that is no more than 5 miles from the existing medical care facility.
  • HB 621 (Bell, R.B.) eliminates COPN review for ICF/MR, mental hospitals, facilities for individuals with intellectual disability, psychiatric hospitals and ICF established primarily for the medical, psychiatric or psychological treatment and rehab of individuals with substance abuse, introduction of psychiatric or substance abuse services, or conversion of hospital beds to psychiatric beds.
  • HB 651 (Bell, R.P.) eliminated COPN review for an increase in number of beds by 15% within a 24 month period, increase in number of ORs in an existing general hospital, introduction of intermediate or specialty-level NICU, introduction of open heart surgery services or open heart surgery equipment if facility performs a minimum of 1,100 adult cardiac caths, of which 400 are therapeutic, or discharges at least 800 patients with the principal diagnosis of ischemic heart disease, and conversion of beds to psychiatric beds.
  • SB 398 (DeSteph) eliminated COPN review for (i) establishing a specialized center or clinic or portion of a physician’s office developed for the provision of outpatient cataract surgery, (ii) introducing cataract surgery services into an existing medical care facility, and (iii) adding of equipment for cataract surgery services by an existing medical care facility.

Each of these House bills was either stricken or laid on the table by a subcommittee of HWI.  SB 398 was incorporated into SB 561, which was laid on the table and continued to 2017 in Ed & Health.

Reform Bills

There were five different reform bills introduced.  VHHA supported three of these bills, HB 1283 (Stolle), SB 641 (Stanley) (Senate companion bill to HB 1283), and SB 777 (Barker).  VHHA also supported elements of HB 350 (Byron) as it was originally introduced.

HB 1283 and SB 641 implemented all of the recommendations coming out of the COPN Work Group created by the General Assembly.  The bills eliminated COPN review for lithotripsy, obstetrical services, magnetic source imaging, and nuclear medicine imaging.  The bills also sought to put in place a number of process reforms to COPN including:

  • Exempting amendments to the State Medical Facilities Plan (renamed the State Health Services Plan) from Administrative Process Act rulemaking requirements to streamline the update process and make updates more timely.
  • Creating a new State Health Services Plan Advisory Council to develop recommendations for a comprehensive State Health Services Plan for adoption by the Board by Nov. 1, 2016, and thereafter to be reviewed annually and revised, as necessary, at least every 2 years.
  • Deleting minimum and maximum amount for application fees and allowing fees to be applied to registration of COPN-exempt projects.
  • Requiring the Board to promulgate regulations that establish an expedited 45-day review process for “projects identified by the Board to be generally noncontested and to present limited health planning impacts.”
  • Defining “application” and requiring applicants to provide sufficient information to prove public need without the addition of supplemental or supporting material at a later date.
  • Deleting requirements for a public hearing unless there are competing applications or a request is made by an elected local official, member of the General Assembly, Commissioner, applicant or member of the public
  • Revising the “good cause” filing deadline to be consistent with regulatory deadline.
  • Requiring the Joint Commission to review current role of Regional Health Planning Agencies.
  • Requiring the Department to develop recommendations to reduce the review cycle to not more than 120 days from the date of receipt of a letter of intent.
  • Requiring the Board to promulgate charity care regulations that set forth a methodology and formula for uniform application of, measuring and monitoring of compliance with, and approval of alternative plans for compliance with conditions.
  • Requiring the Commissioner to develop and implement by Nov. 1, 2016 an analytical framework to support the Advisory Council in developing recommendations concerning the appropriateness of COPN for specific medical care facilities and projects, or whether such projects should be subject to expedited review, and improvements in the COPN process.
  • Requiring the Secretary to implement a system by Jan. 1, 2017, to make COPN information and documents, including LOIs, available in real-time in a searchable, digital format online, as well as, an inventory of COPN-authorized capacity and charity compliance reporting status and details on amount provided/contributed.

HB 350 included similar process reform measures and removal of lithotripsy, magnetic source imaging, and nuclear medicine imaging from COPN review, but also would have removed certain behavioral health services from COPN review.  SB 777 would have required the Board to promulgate regulations to establish procedures to evaluate emerging technologies and health care delivery models, equipment, and facility types to determine if they should be subject to COPN by Nov. 1, 2017, and granted the Commissioner the authority to condition certificates on the agreement of the applicant to (i) participate in Medicaid and provide access to Medicaid beneficiaries and (ii) establish and maintain a charity care policy to provide free and discounted care to indigents.
SB 585 (Barker/Reeves) included support of charitable organizations specifically concerned with the provision of health care services to disabled veterans as a condition that can be placed on a COPN.

HB 1283 was tabled in HWI.  SB 641 and SB 585 were incorporated into SB 561, which was continued to 2017 in Ed & Health.

HB 350 became the vehicle for COPN legislation in the Senate.  Ed & Health adopted amendments to HB 350 adding the removal of MRI, CT, and PET services in non-rural areas from COPN review, subject to the creation of a Virginia Charity Care Fund for the purposes of compensating medical care facilities for losses incurred in the provision of charity care and improving reimbursement rates for Medicaid providers, in a manner designed to obtain federal matching funds.  Medical care facilities would be required to contribute into the Fund based upon the level of charity care provided and the net operating revenues over expenses of the medical care facility.  VHHA opposed the deregulation of MRI, CT, and PET services in the absence of accompanying increases in Medicaid payment rates and other conditions.

The amendments to the bill were proposed on the Senate floor on March 7, 2016.  This date was past the March 2, 2016, deadline (50th day of session) for each chamber to act on revenue bills.  In addition, because the amendments included revenue provisions related to creation of the Fund, the Senate Rules required the bill to be re-referred to Senate Finance.[1]  Accordingly, the bill was re-referred to Senate Finance and was continued to 2017.

[1] Senate Rule 20 (n) requires that “Any bill, except the budget bill sent down by the Governor, whose principal objective is taxation or which establishes a special fund or any type of nonreverting fund, whether or not such bill may also require an appropriation, tax, special or general revenue, shall first be referred to the Standing Committee which has jurisdiction of the subject matter of the bill as defined in rules 18 (a) through 18 (j) of the Rules of the Senate. If said bill is reported by the Committee of original jurisdiction then said bill shall be re-referred by the Committee to the Finance Committee.”

2016 Budget Priorities

 

VHHA focused on budget priorities that would help to address critical funding needs in key areas of importance to hospitals and health systems across the Commonwealth.

  • Hospital Inflation
    • SB 30 Item 306 #20s (Alexander) and HB 30 Item 306 #7h (Stolle) would have restored the hospital inflation adjustment for inpatient operating rates, graduate medical education payments (GME), disproportionate share hospital payments (DSH), and outpatient hospital rates.
    • Cost $15,004,581 (GF) and $14,668,870 (NGF) in the first year and $32,651,145 (GF) and $31,880,708 (NGF) in the second year.
    • The final House and Senate budgets restore one-half of the inflation updates for hospital payment rates amounting to approximately $32 million over the two year biennium ($7,185,612 (GF) and $7,325,333 (NGF) in the first year and $8,262,228 (GF) and $8,418,665 (NGF) in the second year).  The final House and Senate budgets also fully restore the 2.6 percent inflation adjustment for Children’s Hospital of the King’s Daughters in fiscal year 2017.
  • Graduate Medical Education
    • The final House and Senate budgets include $2,500,000 to fund 25 additional residency slots in FY2018 (13 primary care, 12 high need specialties). The Virginia Department of Health will identify hospitals and the number of new residency slots to be awarded supplemental payments by April 1, 2017.
Other budget items relevant to hospital and health systems include:
  • Funding retained for Medicaid coverage of Substance Use Disorder Treatment.
  • GAP program eligibility for those with serious mental illness increased from 60 to 80 percent of the federal poverty level.

Workers’ Compensation

 

VHHA continued to work with other stakeholders over the past year including the Medical Society of Virginia, the Virginia Orthopaedic Society, the Virginia Self-Insurers Association, and Workers’ Compensation (WC) insurance carriers to develop a prevailing community rate fee schedule.  This resulted in consensus legislation being passed through the House and Senate.

HB 378 (Farrell) / SB 631 (Wagner) directs the Workers' Compensation Commission to adopt regulations establishing fee schedules setting the maximum liability of the employer for medical services provided to injured persons to become effective on January 1, 2018.  The initial fee schedules will set amounts based on the average of all amounts paid to providers in the same category of providers for the medical service in the same medical community. The budget includes $1,000,000 in appropriations to contract with an actuarial firm to develop the fee schedule.  The Commission is required to review and revise the fee schedules in the year after they become effective and biennially thereafter. A stop-loss feature allows hospitals to receive payments or reimbursements that exceed the fee schedule amount for certain claims when the total charges exceed a charge outlier threshold, which initially is 150 percent of the maximum fee for the service set forth in the applicable fee schedule. Providers are prohibited from using a different charge master or schedule of fees for any medical service provided for workers' compensation patients than the provider uses for health care services provided to patients who are not claimants.

Behavioral Health

 

Following upon recommendations of the Joint Subcommittee on Mental Health Services in the 21st Century, legislators considered numerous bills seeking to improve Virginia’s mental health crisis response system and other measures to improve coordination of behavioral health services.  Legislation that passed this year includes:

  • HB 616 (Bell) requires that, prior to the release from involuntary admission or discharge from involuntary admission to mandatory outpatient treatment of an individual who has not executed an advance directive, the individual be given a written explanation of the procedures for executing an advance directive and an advance directive form.
  • HB 1110 (Bell) / SB 567 (Barker) imposes a duty on health care providers providing services to a person subject to emergency custody, temporary detention, or involuntary admission proceedings to make a reasonable attempt to notify the person's family member or personal representative and clarifies that such representative includes an agent named in an advance directive; currently, such health care provider has discretion as to whether to make such notification.

Prescription Monitoring/Opioid Abuse

 

A number of bills sought to make changes to the Prescription Monitoring Program (PMP) requirements and other laws aimed at addressing opioid abuse in the Commonwealth.

  • HB 293 (Herring) / SB 513 (Dunnavant) requires prescribers prescribing opiates for a course of 14 or more consecutive days to consult the PMP database with exceptions from the requirement for cases in which  a benzodiazepine or opiate is (i) prescribed to a patient currently receiving hospice or palliative care; (ii)  prescribed to a patient as part of treatment for a surgical procedure, provided that such prescription is not refillable; (iii) prescribed during inpatient hospital admission or at discharge; or (iv) is prescribed to a patient of a nursing home or assisted living facility or the PMP is not operational or available due to temporary technological or electrical failure or natural disaster.
  • SB 556 (Wexton) removes certain restrictions for licensure of a provider who provides treatment for persons with opiate addiction using nonmethadone opioid replacements.
  • HB 657 (O’Bannon) directs the Director of the Department of Health Professions (DOHP) to develop criteria for indicators of unusual patterns of prescribing or dispensing of covered substances by prescribers or dispensers and authorizes the Director to disclose information about the unusual prescribing or dispensing of a covered substance by an individual prescriber or dispenser to the Enforcement Division of the DOHP.
  • HB 1044 (Landes) / SB 491 (Hanger) provides that the Director of the DOHP may disclose information about a specific recipient who is a member of a Virginia Medicaid managed care program to a physician or pharmacist licensed in the Commonwealth and employed by the Virginia Medicaid managed care program. Such information shall only be used to determine eligibility for and to manage the care of the specific recipient in a Patient Utilization Management Safety or similar program.
  • HB 829 (Stolle) authorizes the Director of the DOHP to disclose information to the Board of Medicine about prescribers who meet a certain threshold for prescribing covered substance for the purpose of requiring relevant continuing education.

Nurse Practitioner Scope of Practice

 

A number of bills seeking to expand the scope of practice for nurse practitioners were introduced this session.  Ultimately, only modest changes were made to allow additional flexibility for nurse practitioners to prevent barriers to access to care arising out of physician collaboration arrangements.

  • SB 369 (Stanley) establishes a pilot program for physicians to serve via telemedicine as patient care team physicians to nurse practitioners at practice sites in medically underserved areas of the state as designated by the Department of Health.[1]
  • HB 581 (Robinson) / SB 264 (Dance) allows nurse practitioners to continue to treat patients without a patient care team physician for a period of 60 days in the event of death, disability, retirement, loss of license, or relocation of the patient care team physician.[2]
  • SB 463 (Carrico) modifies collaboration requirements to allow a nurse practitioner licensed as a certified nurse midwife to have in place a practice agreement that addresses availability of the physician for routine and urgent consultation on patient care.[3]

[1] The introduced bill eliminated the requirement that a nurse practitioner practice in collaboration and consultation with a patient care team or practice agreement, in any clinic that is located in a medically underserved area of the state as determined by VDH or an area of the state that has an unemployment rate of one and one-half times the statewide average unemployment rate.

[2] The introduced bill eliminated the requirement that a nurse practitioner practice in collaboration and consultation with a patient care team or practice agreement, for any nurse practitioner with at least 2,000 hours of post-licensure experience that is practicing in any clinic that is: organized for the delivery of health care without charge, or organized for the delivery of primary care services for the indigent and uninsured, and designated by CMS as a federally qualified health center or located in a medically underserved area of the state as determined by VDH.

[3] The introduced bill eliminated the requirement that a nurse practitioner practice in collaboration and consultation with a patient care team or practice agreement for a nurse practitioner licensed as a certified nurse midwife.

Bills Affecting Hospital Operations

 

There were three bills pertaining to hospital operations.

  • HB 905 (Yancey) requires every hospital, upon request of a patient scheduled to receive an elective procedure, test, or service or his legally authorized representative, to provide an estimate of the payment amount for which the patient will be responsible for such elective procedure, test, or service.  The introduced bill would have required the hospital to provide a calculation of the payment amount, taking into consideration insurance deductible and copayment obligations.
  • HB 652 (O’Bannon) updates terminology related to declarations of neurological death to conform with the Uniform Death Declaration Act.
  • SB 595 (Alexander) requires any person or institution that has initial custody of a dead human body for more than 48 hours, which could include a hospital or nursing home following the death of a patient, to ensure that the dead body is maintained in refrigeration at no more than approximately 40 degrees Fahrenheit or to enter into an agreement with a local funeral service establishment to store the dead body.

Health Professions and Workforce

 

Several bills pertained to the health professions and workforce.

  • HB 319 (Rasoul) authorizes the Department of Health to enter into written agreements with volunteer health care providers for the provision of health care services, without compensation, to low-income individuals receiving health services through a local health department or a health care facility licensed by the Department and operated by a nonprofit entity in exchange for satisfaction of board-required continuing education for individuals registered, certified, licensed, or issued by a multistate licensure privilege by a health regulatory board.
  • HB 239 (O’Bannon) / SB 201 (Dunnavant) clarifies and makes consistent with applicable federal laws rules prohibiting division of fees among physicians.  The legislation provides that rules prohibiting division of fees among physicians shall not prohibit (i) members of a group practice of physicians licensed to practice medicine or osteopathy from making any division of their total fees among themselves as they may determine; (ii) arrangements permitted under the Practitioner Self-Referral Act (§ 54.1-2410 et seq.) (the “Stark” law) ; or (iii) certain payments, business arrangements, or payment practices that would be permitted in accordance with 42 U.S.C. §1320a-7b(b)(3) (the Federal Anti-kickback Statute).
  • HB 825 (Stolle) / SB 437 (Barker) directs the Department of Veterans Services and the Department of Health Professions to develop a pilot program in which military medical personnel may practice and perform certain delegated acts that constitute the practice of medicine under the supervision of a licensed physician or podiatrist.
  • SB 452 (Stanley) requires medical schools to obligate medical students to participate in at least one clinical rotation in a hospital or clinic located in a medically underserved area of the state as determined by the Department of Health, in an area of the state that has an unemployment rate of 1½ times the statewide average unemployment rate, or in a locality with a population of 50,000 or less in the Commonwealth.

Direct Primary Care Arrangements

 

HB 685 (Landes) provides that state insurance laws and regulations do not apply to agreements between a primary care physician and a patient authorizing the physician to charge a periodic fee as consideration for providing ongoing primary care to the patient.  The legislation specifies content, disclosures, and disclaimers that must be included in the written agreement and prohibits the primary care physician from billing a third party payer for any services the physician is obligated to provide under the arrangement.  SB 627 (Stanley) was the Senate companion bill to HB 685, but it did not pass out of the Senate Commerce & Labor Committee and was continued until 2017.  The Governor proposed recommended action on the bill for the reconvened session to include a reenactment clause, requiring further action by the 2017 General Assembly.

Medical Malpractice and Legal Procedure

 

Three bills involved medical malpractice and legal procedure:

  • HB 637 (Habeeb) extends the two-year limitations period for personal injury actions in malpractice cases arising out of the negligent failure to diagnose a malignant tumor to include intracranial, intraspinal, or spinal schwannoma or to communicate such diagnosis to the patient for a period of one year from the date the existence of the condition is communicated to the patient. This bill was a recommendation of the Boyd-Graves Conference
  • HB 1128 (Habeeb) provides that a lien arising out of a judgment for a spouse's emergency medical care shall not attach to the principal residence held by the patient and spouse as tenants by the entireties or that was held by them as tenants by the entireties prior to the death of either spouse where the tenancy was terminated as a result of the death of either spouse.
  • HB 232 (Leftwich) allows a plaintiff's spouse, guardian, agent under an advance directive, agent under a power of attorney, or next friend to identify a medical bill and provide testimony on the bill to establish a rebuttable presumption of authenticity and reasonableness of the bill if the court finds the plaintiff is unable to provide such testimony. Current law requires the plaintiff to identify and provide testimony on the bill.


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