Medicare and State Health Care Programs: Fraud and Abuse; Revisions to the Office of Inspector General’s Civil Monetary Penalty Rules
Final rule.
CFR Part: "42 CFR Parts 1003 and 1005"
RIN Number: "RIN 0936-AA04"
Citation: "81 FR 88334"
Page Number: "88334"
"Rules and Regulations"
SUMMARY: This final rule amends the civil monetary penalty (CMP or penalty) rules of the
DATES: These regulations are effective on
FOR FURTHER INFORMATION CONTACT:
SUPPLEMENTARY INFORMATION:
I. Executive Summary
A. Purpose of the Regulatory Action
The Affordable Care Act of 2010 (Patient Protection and Affordable Care Act, Pub. L. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. 111-152, 124 Stat. 1029 (2010), hereafter the ACA) significantly expanded OIG's authority to protect Federal health care programs from fraud and abuse. The OIG proposed to update its regulations to codify the changes made by the ACA in the regulations. At the same time, OIG proposed updates pursuant to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 and other statutory authorities, as well as technical changes to clarify and update the regulations.
B. Legal Authority
The legal authority, laid out later in the preamble, for this regulatory action is found in the Social Security Act (the Act), as amended by the ACA. The legal authority for the changes is listed by the parts of Title 42 of the Code of Federal Regulations that we proposed to modify:
1003: 42 U.S.C. 1320a-7(c), 1320a-7a, 1320b-10, 1395w-27(g), 1395w-112(b)(3)(E), 1395w-141(i)(3), 1395y(b)(3)(B), 1395dd(d)(1), 1395mm, 1395nn(g), 1395ss(d), 1396b(m), 1396r-8(b)(3)(B), 1396r-8(b)(3)(C), 1396t(i)(3), 11131(c), 11137(b)(2), and 262a.
1005: 42 U.S.C. 405(a), 405(b), 1302, 1320a-7, 1320a-7a, and 1320c-5.
C. Summary of Major Provisions
We proposed changes to the Civil Monetary Penalties (CMP) regulations at 42 CFR part 1003 to implement or codify authorities under the ACA and other statutes. The ACA provides for CMPs, assessments, and exclusion for:
* Failure to grant OIG timely access to records;
* ordering or prescribing while excluded;
* making false statements, omissions, or misrepresentations in an enrollment application;
* failure to report and return an overpayment; and
* making or using a false record or statement that is material to a false or fraudulent claim.
These statutory changes are reflected in the proposed regulations.
We also proposed a reorganization of 42 CFR part 1003 to make the regulations more accessible to the public and to add clarity to the regulatory scheme. We proposed an alternate methodology for calculating penalties and assessments for employing excluded individuals in positions in which the individuals do not directly bill Federal health care programs for furnishing items or services. We also clarified the liability guidelines under OIG authorities, including the Civil Monetary Penalties Law (CMPL); the Emergency Medical Treatment and Labor Act (EMTALA); section 1140 of the Act for conduct involving electronic mail,
D. Costs and Benefits
There are no significant costs associated with the regulatory revisions that would impose any mandates on State, local, or tribal governments or the private sector. The OIG anticipates that CMP collections may increase in the future in light of the new CMP authorities and other changes proposed in this rule. However, it is difficult to accurately predict the extent of any increase because of a variety of factors, such as budget and staff resources, the number and quality of CMP referrals or other potential cases, and the time needed to investigate and litigate a case. In calendar years 2004-2015, OIG collected annual amounts ranging between
I. Discussion
A. Summary of Revisions and Response to Comments
In response to the notice of proposed rulemaking, 79 FR 27,080 (
Set forth below is a discussion of the proposed changes to the regulations at the 42 CFR part 1003, a synopsis of the various comments and recommendations received in response to the proposed rule, our response to those comments and recommendations, and a summary of the specific revisions and clarifications being made to the regulations as a result of the public comments.
B. Background
For over 27 years, OIG has exercised the authority to impose CMPs, assessments, and exclusions in furtherance of its mission to protect Federal health care programs and their beneficiaries from fraud, waste, and abuse. As those programs have changed over the last two decades, OIG has received new fraud-fighting CMP authorities, including new authorities under the ACA. With the addition of new authorities over time, part 1003 has become cumbersome. While adding new authorities, we are also reorganizing part 1003 to improve its readability and clarity and addressing several substantive issues in our existing authorities.
In 1981,
The ACA is the most recent expansion of the CMP provisions and OIG's ability to protect Federal health care programs from fraud and abuse. Sections 6402(d)(2)(A)(iii) and 6408(a) of ACA amended the CMPL by adding new conduct that subjects a person to penalties, assessments, and/or exclusion from participation in Federal health care programs. The new covered conduct includes: (1) Failure to grant OIG timely access to records, upon reasonable request; (2) ordering or prescribing while excluded when the excluded person knows or should know that the item or service may be paid for by a Federal health care program; (3) making false statements, omissions, or misrepresentations in an enrollment or similar bid or application to participate in a Federal health care program; (4) failure to report and return an overpayment; and (5) making or using a false record or statement that is material to a false or fraudulent claim. See the Act, section 1128A(a)(8)-(12). We are codifying these new authorities and remedies at 42 CFR 1003.200(b)(6)-(10), 1003.210(a)(6)-(9), and 1003.210(b)(3).
Section 6408(b)(2) of the ACA amended section 1857(g)(1) of the Act (42 U.S.C. 1395w-27(g)(1)), which relates to
We have codified these new authorities in the proposed regulations at
C. Reorganization of Part 1003
We proposed reorganizing part 1003 to make the regulations more accessible to the public and to add clarity to the regulatory scheme. Except for general and procedural subparts, the reorganized part 1003 groups CMP authorities into subparts by subject matter. This revised structure also clarifies the differences between the various CMP authorities and their respective statutory remedies. For certain CMP authorities, penalties, assessments, and exclusion are authorized. For other CMP authorities, only penalties, or penalties and assessments, are authorized. Each subpart is intended to be self-contained, with all the relevant provisions concerning a particular violation included in the same subpart.
We received no comments on the reorganization and finalize it as proposed.
D. Technical Changes and Clarifications
Because we intended each subpart to be self-contained, we proposed incorporating the exclusion sections, which were found at SUBSEC 1003.105 and 1003.107, into the subparts in which exclusion is available: False Claims; Anti-kickback and Physician Self-Referral; EMTALA; and Beneficiary Inducement. This proposed revision more clearly reflects the statutory scheme, which permits both monetary and exclusion remedies for these violations.
The proposed changes clarify in each subject matter subpart that we may impose a penalty for each individual violation of the applicable provision. As we explained in the notice of proposed rulemaking, and below, the statutory authorities are clear that each act that constitutes a violation is subject to penalties. The proposed revisions to the regulatory language better reflect this statutory framework.
Throughout part 1003, we proposed replacing references to
The proposed changes clarify that a principal's liability for the acts of its agents does not limit liability only to the principal. Agents are still liable for their misconduct. In our enforcement litigation, we have encountered the argument that agents are not liable for their misconduct where the principal is liable for the same misconduct. We believed the law provides that the agent remains liable for his or her conduct and may not use the principal as a liability shield. The proposed revision clarifies this point. In addition, we proposed to consolidate
We received no comments on these topics and finalize the regulation as proposed.
Under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (sec. 701 of Pub. L. 114-74, 129 Stat. 599), which amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410, 104 Stat. 890), Federal agencies must make annual adjustments to their CMPs, including the CMPs in the Social Security Act. The
E. Civil Monetary Penalty Authorities
Subpart A--General Provisions
Subpart A contains the general provisions that apply to part 1003. The proposed changes revised the "Basis and Purpose" section to state more succinctly part 1003's purpose and to include a complete listing of CMPs. We also proposed updates to statutory authority citations at proposed
We received no comments on these changes and finalize the regulations as proposed.
1003.110 Definitions
The proposed rule included several changes to the "Definitions" section for clarity and readability. First, we proposed to redesignate
Claim
We proposed to revise the definition of "claim" by changing the word "to" to "under." This change more closely aligns the regulations to the CMPL's definition of "claim" to avoid any misinterpretation that a claim is limited to an application for payment for an item or service made directly to a Federal health care program (e.g., a claim also includes applications for payment to contractors).
Contracting Organization
We proposed to update the definition of "contracting organization" to include all entities covered by sections 1857, 1860D-12, 1876(b) (42 U.S.C. 1395mm(b)), or 1903(m) of the Act.
Item or Service
We proposed revisions to the definition of the term "item or service." Section 1128A of the Act provides that the term "item or service" "includes" various items, devices, supplies, and services. By using the word "includes" in section 1128A of the Act,
Knowingly
We proposed clarifying the definition of "knowingly," found in the existing regulation at
Material
We proposed a definition of "material" that mirrors the
Overpayment
We proposed a definition of "overpayment" that is taken from section 1128J(d)(4) of the Act (42 U.S.C. 1320a-7k(d)(4)), as amended by section 6402(a) of the ACA.
Reasonable Request
We proposed a definition of "reasonable request" as part of implementing the new ACA CMP authority for failure to grant OIG timely access to records, as discussed below under
Responsible Official
We proposed a definition of "Responsible Official" as this term relates to the select agent and toxin CMP authority. We proposed to amend the definition of "select agent and toxin" as the term relates to the select agent and toxin CMP authority (42 U.S.C. 262a(i); Act, section 1128A(j)(2)).
Responsible Physician
We also proposed revising the definition of "responsible physician" to more closely conform to statutory intent, as discussed below under
Separately Billable Item or Service and Non-Separately-Billable Item or Service
We also proposed definitions of "separately billable item or service" and "non-separately-billable item or service" to create an alternate method for calculating penalties and assessments for violations of section 1128A(a)(6) of the Act.
We did not receive comments on the proposed definitions of "claim," "contracting organization," "item or service," "Responsible Official," "non-separately-billable item or service," or "separately billable item or service" and are finalizing the definition as proposed. We received comments on the definition of "knowingly," "should know, or should have known," "material," and "timely basis," which are discussed below. We also received comments on the definitions of "overpayment," "reasonable request," and "responsible physician," which we will address in the discussion of the overpayment, timely access, and EMTALA CMPs respectively.
Comment: One commenter recommended that the definitions of "knowingly" and "should know, or should have known" not include that "no proof of specific intent to defraud is required." Another commenter recommended that, when applied to
Response: The definition of "should know" in section 1128A(i)(7) of the Act states that "no proof of specific intent to defraud is required." Similarly, the existing regulatory definitions of "knowingly" and "should know, or should have known" both state that "no proof of specific intent is required." We proposed no changes to that language in either definition. As discussed above, our proposal clarified that the use of the term "knowingly" referred to acts, such as submitting a claim, and "should know or should have known" referred to information, such as the claim was false or fraudulent. Further, OIG does not believe it would be unduly harsh to apply up to a
Comment: Some commenters disagreed with the proposed definition of "material" and recommended we adopt a definition of "having an actual influence on the payment or receipt of money or property."
Response: We respectfully disagree with the commenters and finalize the definition, as proposed. The proposed language mirrors the definition of material in the
Comment: One commenter argued that we should change the definition of "timely basis" to the 60-day period from the time the individual or entity knows that the amounts collected violated the Physician Self-Referral Law. The commenter states that it is unreasonable to expect individuals and entities consistently to know, within 60 days of collection, that an amount was collected in violation of the Stark Law, and that it would be unfair to impose penalties, assessments, and exclusions on individuals and entities for failure to return payments that they did not know were collected in violation of the Stark Law.
Response: Because we did not propose changing the language of the definition, only the internal citation, this suggestion is outside the scope of this rulemaking. We are finalizing the definition, as proposed.
Comment: We also received a comment asking that OIG clarify that the provisions of part 1003 applying to Federal health care programs do not apply to Qualified Health Plan Issuers or State-based or Federally facilitated exchanges.
Response: "Federal health care program" is defined in section 1128B(f) of the Act. part 1003 does not include a definition of "Federal health care program" and none was included in our proposed changes to that part. Therefore, this comment is beyond the scope of the rulemaking. That said, the Department stated in an
1003.140 Determinations Regarding the Amount of Penalties and Assessments and the Period of Exclusion
We proposed modifying the provisions relating to the factors considered in determining exclusion periods and the amount of penalties and assessments for violations. The existing structure separately listed factors for certain CMP violations in
To add clarity and improve transparency in OIG's decision-making, we identified the most common issues among the factors listed and created a single, primary list of factors in the proposed
The OIG will, however, continue to review the facts and circumstances of a violation on a case-by-case basis. For instance, when considering the nature and circumstances of any case, OIG will consider, among other things and to the extent they are relevant, the period over which the conduct occurred, whether a pattern of misconduct is indicated, the magnitude of the violation, the materiality or significance of a false statement or omission, the number of people involved, the number of victims, and whether patients were or could have been harmed.
The proposed changes also clarify that these factors apply to exclusion determinations made under part 1003 as well as penalty and assessment amount determinations. We are removing
At SEC 1003.106(b)(2), the regulations discussed a person's degree of culpability and listed several aggravating circumstances concerning whether a person had knowledge of the violation. We believed the language was out-of-date in light of all the CMP authorities that have been added to part 1003 over the years. We proposed to consider as an aggravating factor a person's having a level of intent to commit the violation that is greater than the minimum intent required to establish liability.
Various CMP authorities have different intent or scienter requirements. Some authorities have a "knows or should know" standard consistent with the
Possessing the lowest level intent to commit a violation is not a defense against liability, a mitigating factor, or a justification for a less serious remedy. Individuals and entities are expected to know the law and Federal health care program rules. While the degree of culpability is relevant in our determination to impose a monetary or exclusion remedy, other factors, such as the nature and circumstances of the violation, may justify a maximum monetary remedy or exclusion to protect Federal health care programs and beneficiaries from fraud, waste, and abuse.
In addition, we proposed to add a mitigating circumstance to the degree-of-culpability factor for taking "appropriate and timely corrective action in response to the violation." The proposed regulation required that a person, to qualify as taking corrective action, disclose the violation to OIG through the Self-Disclosure Protocol (the Protocol) and fully cooperate with OIG's review and resolution of the violation. We have long emphasized the importance of compliance programs that result in appropriate action when Federal health care program compliance issues are identified. We continue to believe that appropriate action for potential violations of OIG's CMP authorities must include self-disclosure and cooperation in the inquiry and resolution of the matter. For most OIG CMP authorities, the person should not qualify for mitigation of the potential monetary or exclusion remedies without self-disclosure through the Protocol (available at-- http://oig.hhs.gov/compliance/self-disclosure-info/protocol.asp). In response to comments, which are summarized below, we are finalizing the rule to include self-disclosure to CMS's Self-Referral Disclosure Protocol for Stark violations. As further discussed in subpart E, we are also including disclosure to CMS for EMTALA violations.
The proposed changes clarified that when we are determining the appropriate remedy against an entity, aggravating circumstances include the prior offenses or other wrongful conduct of: (1) The entity itself; (2) any individual who had a direct or indirect ownership or control interest (as defined in section 1124(a)(3) of the Act (42 U.S.C. 1320a-3)) in the entity at the time the violation occurred and who knew, or should have known, of the violation; or (3) any individual who was an officer or a managing employee (as defined in section 1126(b) of the Act (42 U.S.C. 1320a-5)) of the entity at the time the violation occurred. For "prior offenses," we also proposed to change "any other public or private program for reimbursement for medical services" to "in connection with the delivery of a health care item or service." This proposed change is consistent with the aggravating circumstance "other wrongful conduct."
Finally, the proposed rule clarified when OIG considers the financial condition of a person in determining penalty or assessment amounts. The regulations discussed financial condition in various sections with varying degrees of specificity:
We received the following comments on these proposals. To the extent the comments do not address aspects of these changes, we are finalizing this section of the rule, as proposed.
Comment: Some commenters disagreed with our proposal to include a person's level of intent as an aggravating factor for several reasons. Some commenters viewed proving, and distinguishing between, different degrees of mental states, such as "actual knowledge," "deliberate ignorance," and "reckless disregard," as subjective. Commenters argued that the proposed rule's rationale for using degrees of scienter to determine the existence of aggravating circumstances is not sufficient to overcome concerns regarding the subjectivity involved in distinguishing between and proving these highly nuanced mental states. Aside from the statement that "actual knowledge is considered more egregious than a lower level of intent," commenters expressed concern that the proposed rule does not explain which different scienter requirements carry respectively greater, or lesser, culpability. For example, commenters argued that the proposed rule does not provide if or how scienter requirements, such as "reckless disregard" and "deliberate ignorance," relate to one another with respect to potential culpability. Commenters were also concerned that the proposed rule does not set forth the evidentiary standards required to prove, and distinguish between, degrees of scienter, (e.g., where a person can be held liable: (1) For knowingly presenting an inaccurate claim; or (2) where the person knew, or should have known, that the claim was not accurate). Given that legal expertise is typically required to fully interpret and understand these terms, commenters stated that physicians and health care providers may not fully comprehend the changes proposed by the rule and may be disadvantaged when trying to respond to OIG's determination that an aggravating circumstance is present on the basis of alleged degrees of culpability.
Finally, while commenters acknowledged OIG's experience in CMP enforcement as the main support for its degree-of-culpability proposal, commenters noted that this rule expands OIG's authority to new types of conduct under the five new ACA liability bases to its enforcement authority. These additional bases for CMPs require physicians to understand new authorities and also expands OIG scienter determinations to new areas of the law. Given this expanded scope, commenters urged OIG to reconsider use of this new aggravating factor, especially without providing more detailed guidance distinguishing different mental standards and their applicability to CMPs, assessments, and exclusions.
Response: We have altered the final rule so that in cases in which the scienter standard required to prove a violation is lower than actual knowledge, having actual knowledge will be an aggravating factor. We will continue evaluating each case to determine the appropriate penalties and assessments and whether exclusion is appropriate. In any case in which the scienter standard required to prove a violation is lower than actual knowledge, actual knowledge is more egregious. The OIG's existing regulations provide that actual knowledge is an aggravating factor where a respondent knew an item or service was not provided as claimed or if the respondent knew that a claim was false or fraudulent. In the final rule, OIG is simply extending actual knowledge as an aggravating factor to all cases in which the scienter standard to prove a violation is lower than actual knowledge.
Comment: One commenter expressed concern about OIG's proposed provision that any single aggravating circumstance may justify imposing a penalty and assessment at or close to the maximum even when one or more mitigating factors are present. The commenter argued that this proposed change would tilt the balance in favor of the aggravating factors without due consideration to all of the circumstances in each case and could lead to uneven enforcement. The commenter also stated that this concern was compounded by OIG's other proposal to move away from separately listed aggravating factors to a more general, illustrative list of factors that the commenter argues could be applied more broadly. Finally, the commenter also stated that this proposal could discourage mitigating actions (e.g., participating in the Self-Disclosure Protocol).
Response: We believe that the proposed rule accurately reflects the case-by-case analysis that OIG has historically done and that is conducted in the ALJ hearing process. Aggravating and mitigating circumstances require qualitative weighing of facts and circumstances and are, by their nature, dependent on the facts and circumstances present in the individual case. In this weighing process, it is possible to conclude that one aggravating circumstance should overweigh several mitigating circumstances because of the nature and circumstances of the case. As such, our proposal that any one aggravating circumstance may justify a high penalty or assessment simply reflects this qualitative, fact-driven analysis. The converse is also true, that one mitigating factor could justify a lower penalty. Our proposal is not intended to change OIG's longstanding and repeatedly stated position that appropriate self-disclosure is a critical indication that the provider or supplier has an effective compliance program. We will continue to follow the process outlined in the Self-Disclosure Protocol in resolving Protocol submissions.
Comment: One commenter stated that proposed
Response: We agree with the commenter that the provision is superfluous. The OIG makes determinations regarding penalties, assessments, and exclusion based on a case-by-case analysis, and for any particular case the presence of aggravating circumstances may support exclusion. Therefore, we are finalizing the rule without this proposed provision.
Comment: A few commenters suggested that a lower level of intent be considered as a mitigating factor. Commenters argued that if a higher level of intent may be viewed as a potential aggravating factor, OIG should consider a lower level of intent as a mitigating factor.
Response: Possessing a lower level intent to commit a violation is not a defense against liability or a justification for a less serious remedy. Individuals and entities are expected to know the law and Federal health care program rules. While the degree of culpability is relevant in our determination to impose a monetary or exclusion remedy, other factors, such as the nature and circumstances of the violation, may justify a maximum monetary remedy or exclusion to protect the Federal health care programs and beneficiaries. Moreover, if the facts show that the person did not possess the requisite level of intent to violate a particular statutory or regulatory provision, no monetary penalty or exclusion would apply.
Comment: Several commenters suggested that OIG expand the corrective action that would be considered as a mitigating factor to include more than submissions to the Self-Disclosure Protocol. Commenters argued that limiting the mitigating factor to use of the Self-Disclosure Protocol is overly limited and suggested that the following actions be considered mitigating: Disclosure to the CMS Self-Referral Disclosure Protocol, returning payments to
Response: We have decided to amend our proposal to include use of the CMS Self-Referral Disclosure Protocol (SRDP) as meeting the corrective action requirement for the mitigating factor. We decided to make this change to clarify that appropriately using the SRDP satisfies OIG's goals of encouraging disclosure and recognizes the specific protocol that CMS has created to handle physician self-referral law (
We are also amending subpart E (EMTALA) to include in this mitigating factor disclosure of the violation to CMS prior to CMS receiving a complaint regarding the violation from another source or otherwise learning of the violation.
Comment: Some commenters stated that, as a practical matter, this proposal "mandates" disclosure to the Protocol, which would, for many providers and suppliers, limit the availability of this mitigating circumstance. Some commenters viewed participation in the Protocol as time and labor intensive and often necessitating the assistance of an experienced attorney, which may be expensive for smaller providers and suppliers.
Response: This mitigating factor becomes relevant only if the provider or supplier has CMP liability for the conduct at issue. If that is the case, we expect the provider or supplier to appropriately disclose and resolve the conduct in the Protocol. Attorney representation is not necessary to use the Protocol.
Comment: Some commenters posed questions concerning the relationship between the Self-Disclosure Protocol and the proposed rule. For example, the Self-Disclosure Protocol states that "OIG's general practice is to require a minimum multiplier of 1.5 times the single damages" while the proposed rule contains no discussion concerning the nexus between Protocol settlements and the imposition of monetary penalties, assessments, and exclusion. Commenters asked whether the 1.5 multiplier will be available to those using the Self-Disclosure Protocol if an aggravating factor exists under the proposed rule. Commenters also asked whether OIG would suspend the statutory obligation to report and return an overpayment within 60 days if the provider has appropriately made a disclosure under the Self-Disclosure Protocol and is actively seeking a resolution.
Response: The OIG will continue to follow the process and principles outlined in the Self-Disclosure Protocol in resolving Protocol submissions. Even where aggravating circumstances exist, we will generally apply a 1.5 multiplier in Protocol resolutions, as explained in the Protocol. Regarding the 60-day rule referenced by commenters, CMS has rulemaking authority concerning section 1128J(d) of the Act and published a final rule on
Comment: Some commenters expressed concerns about the proposed rule's expansion of the "history of prior offenses" and "other wrongful conduct" aggravating factors. Specifically, these commenters argued that it would be unjust to consider prior offenses or other wrongful conduct of officers or managing employees unless the officer or managing employee knew or should have known of the violation. Accordingly, they urged OIG to, as with individuals with ownership or control interests, limit consideration of prior offenses and other wrongful conduct of officers and managing employees to situations in which the officer or managing employee knew or should have known of the violation.
Response: We are finalizing the rule, as proposed. Officers and managing employees have significant responsibility for an entity's day-to-day operations. Owners, on the other hand, may be active or passive. Passive owners may have less involvement in daily operations, and consequently may have less culpability in the entity's conduct that creates CMP liability. As such, the rule specifies that individuals who have a direct or indirect ownership or control interest are considered in these factors only if they knew or should have known of the violation. Moreover, this factor was structured to reflect the exclusion authority under section 1128(b)(15) of the Act. Under section 1128(b)(15)(A)(ii) of the Act, an individual who is an officer or managing employee of an excluded entity can be excluded regardless of whether the officer or managing employee knew or should of known of the action that constituted the basis for the exclusion. In contrast, under section 1128(b)(15)(A)(i) of the Act, an owner of the excluded entity can be excluded only if he or she knew or should have known of the action constituting the basis for the exclusion. We believe that
Comment: One commenter argued that "administrative sanctions" in the "history of prior offenses" aggravating factor should not include actions taken by purely private actors, such as health insurers, because, in such private actions, health care providers may not be given due process protections comparable to those available when a governmental entity is seeking administrative sanctions.
Response: We agree with the commenter that the history of prior offenses aggravating factor encompasses only situations in which the provider or supplier was held liable for criminal, civil, or administrative sanctions by a governmental entity, such as a Federal or State agency or one of its contractors.
Comment: One commenter expressed concerns with the proposed rule's increased consideration of wrongful conduct related to the commercial market. The commenter recommended that OIG consider only fraud sanctions in the private market to ensure that the wrongful conduct directly relates to the conduct being addressed by OIG.
Response: We are finalizing the language, as proposed. We do not believe the other wrongful conduct needs, in all cases, to be related to fraud generally or to the CMP authority at issue to be relevant. This factor is intended to provide some guidance on the trustworthiness of the individual or entity in question. The OIG will continue to perform an analysis of whether the other wrongful conduct should be considered an aggravating circumstance in any given case.
1003.150 Delegation of Authority
The proposed rule also adds an express delegation of authority from the Secretary to OIG to impose penalties, assessments, and exclusions against persons who violate any of the provisions of part 1003. Several
We received no comments on this provision and finalize, as proposed.
1003.160 Waiver of Exclusion
We also proposed changes to part 1003's exclusion-waiver provisions to clarify the criteria for a waiver request from a State agency. The existing regulations stated that OIG will consider an exclusion waiver request from a State agency for exclusions imposed pursuant to 42 CFR 1003.102(a), (b)(1), and (b)(4) and 1003.105(a)(1)(ii) under certain circumstances. We proposed updating the regulations to permit an administrator of a Federal health care program to request a waiver, similar to the waiver in part 1001. Also, we proposed removing the limitations concerning when a waiver may be requested by such an administrator.
We received no comments on this provision and finalize, as proposed.
Subpart B--CMPs, Assessments, and Exclusions for False or Fraudulent Claims and Other Similar Misconduct
Subpart B contains most of the provisions that were found in the existing regulations at
On the basis of our experience enforcing section 1128A(a)(6) of the Act, we proposed an alternate methodology for calculating penalties and assessments. This alternate methodology recognizes the variety of ways in which items and services are reimbursed by Federal health care programs and the numerous types of health care professionals and other individuals and entities that contribute to the provision of those items and services.
The proposed regulations addressed how penalties and assessments would be imposed for two distinct types of violations: (1) Instances in which items or services provided by the excluded person may be separately billed to the Federal health care programs and (2) instances in which the items or services provided by the excluded person are not separately billable to the Federal health care programs, but are reimbursed by the Federal health care programs in some manner.
To achieve this distinction, we proposed to define two new terms: "separately billable item or service" and "non-separately-billable item or service." A "separately billable item or service" is defined as "an item or service for which an identifiable payment may be made under a Federal health care program." This type of item or service exists when a person provides, furnishes, orders, or prescribes an identifiable item or service for which a claim for reimbursement may be submitted to a Federal health care program by either the person or another person. Examples include physician office visits and prescribed pharmaceuticals.
A "non-separately-billable item or service" is defined as "an item or service that is a component of, or otherwise contributes to the provision of, an item or service, but is not itself a separately billable item or service." Non-separately-billable items or services are reimbursed as part of the claim submitted under the applicable payment methodology, e.g., nursing or clerical services associated with a physician office visit, care covered by the skilled nursing facility per diem payment, nursing care covered by a hospital diagnosis-related group (DRG) payment, or radiology technician services associated with a specific procedure.
In instances in which the item or service provided by the excluded person is separately billable, the employing or contracting person would continue to be subject to penalties and assessments based on the number and value of those separately billable items and services. For instances in which the item or service provided by the excluded person is non-separately-billable, we proposed an alternate methodology to calculate penalties and assessments. We proposed that penalties would be based on the number of days the excluded person was employed, was contracted with, or otherwise arranged to provide non-separately-billable items or services. We proposed that assessments would be based on the
As discussed above, the ACA added five new violations and corresponding penalties to the CMPL. These new violations and the corresponding penalties are at proposed SUBSEC 1003.200(b)(6)-(10), 1003.210(a)(6)-(9), and 1003.210(b)(3). In general, the proposed regulatory text closely mirrors the statutory text. However, we supplement the statutory text where appropriate. Section 6402(d)(2)(A) of the ACA amends the CMPL by adding a violation for knowingly making or causing to be made "any false statement, omission, or misrepresentation of a material fact in any application, bid, or contract to participate or enroll as a provider of services or a supplier under a Federal health care program." (Emphasis added.) ACA does not, however, include the word "omission" in its description of the penalty and assessment for this violation. To give full effect to the amendment adding "omission" to the CMPL, we have added the word "omission" in the penalty and assessment sections.
Also, we proposed clarifying the penalty under the CMPL, as amended by section 6402(d)(2) of the ACA, for failure to report and return overpayments. Under the amended section 1128J(d) of the Act, overpayments must be reported and returned by the later of 60 days after the date the overpayment was identified or the date any corresponding cost report is due, if applicable. The new CMPL authority under section 1128A(a)(10) of the Act does not contain a specific penalty amount, but instead uses the default penalty amount in the CMPL, which is up to
Section 6408(a)(2) of the ACA amended the CMPL by adding a violation for failure to grant timely access, upon reasonable request, to OIG for the purpose of audits, investigations, evaluations, or other statutory functions. Section 1128(b)(12) of the Act and 42 CFR 1001.1301 authorize exclusion based on similar, but not identical, conduct -- failure to grant immediate access. We believe
The proposed definitions of "failure to grant timely access" and "reasonable request" give OIG flexibility to determine the period in which a person must respond to a specific request for access, depending on the circumstances. Given the different purposes for which OIG may request access to material, such as audits, evaluations, investigations, and enforcement actions, we believe the best approach is for OIG to specify the date for production or access to the material in OIG's written request. In making this decision, OIG will consider the circumstances of the request, including the volume of material, size and capabilities of the party subject to the request, and OIG's need for the material in a timely way to fulfill its responsibilities. The exception to this approach is a case in which OIG has reason to believe that the requested material is about to be altered or destroyed. Under those circumstances, timely access means access at the time the request is made. This exception is the same as provided in
Finally, we proposed revisions to the regulation's aggravating factors for CMPL violations. The aggravating factors listed in proposed
We received the following comments on this subpart. To the extent provisions of the proposed rule are not addressed in the comments below, we are finalizing this section of the rule, as proposed.
Comment: We received many comments supporting the creation of the alternate methodology for calculating assessments for employing or contracting with an excluded individual in violation of section 1128A(a)(6) of the Act. Some commenters argued against a per-day penalty. First, commenters argued that the assessment adequately addresses the misconduct and a per-day penalty seems duplicative. Second, commenters argued that liability should be related to the cost of the items and services and may not be rationally related to the number of days an individual was employed by, or contracted with, the entity. Third, commenters argued that a per-day penalty is contrary to the plain language of the Act because
Response: After considering the comments, we are withdrawing the proposed per-day penalty for section 1128A(a)(6) of the Act. Instead, we are finalizing a penalty of up to
Comment: Many commenters urged OIG to take into account the Federal health care program payor mix, or percentage of Federal health care program business, when determining the assessment for employing or contracting with an excluded individual. Commenters argued that using a pro-rata share of the compensation would more fairly capture the portion of time the excluded person likely spent providing items or services to Federal health care program beneficiaries in violation of their exclusion. These commenters noted that OIG outlined this practice in the 2013 Updated Provider Self-Disclosure Protocol.
Response: We are finalizing the rule, as proposed. We continue to believe that the Federal health care program payor mix is appropriate to consider in the context of a self-disclosure, and OIG will continue to consider it in settlements, as appropriate. Nevertheless, we have decided not to require the consideration of payor mix in the regulations. The appropriate way to measure payor mix is not always clear for the many types of providers, suppliers, items, and services at issue in various cases. Further, there may be cases for which a reduction of the assessment based on payor mix is not appropriate. We view our approach to this CMP as analogous to the CMP for violations of the anti-kickback statute. Under
Comment: Several commenters objected to our proposed reading of the penalty and assessment sections applicable to violations of section 1128A(a)(9) of the Act, as established by section 6402(d)(A) of the ACA, to include "omissions." Those commenters argued that our reading went beyond the authority of the ACA because
Response: We respectfully disagree with the commenters. Adopting the commenters' suggested reading would lead to the conclusion that
Comment: Some commenters requested that OIG clarify that liability for omission of a material fact under Section 1128A(a)(9) of the Act apply only to willful omissions so that the regulations not capture clerical errors or omissions where there was no intention to deceive. Specifically, commenters encouraged us to delete the reference to "omissions" or at a minimum use the term "willful omissions" until a greater degree of standardization among
Response: We do not believe the commenters' suggestion conforms to the statute. To violate section 1128A(a)(9) of the Act, a person must knowingly make a false statement, omission, or misrepresentation of material fact. We believe the commenters' concerns are addressed by the evidentiary standard OIG must meet to bring such a case. In addition, OIG will continue to evaluate the nature and circumstances of the conduct and exercise discretion in deciding whether to pursue a case. The OIG will not pursue cases under this section based on inadvertent (non-reckless) errors and minor oversights.
Comment: Some commenters urged OIG to further specify the standards it will use to determine penalties, assessments, or exclusion imposed under section 1128A(a)(9) of the Act. Commenters stated that clarification is needed to understand whether this new authority could apply to simple documentation errors. Commenters believed that such mistakes would not be done "knowingly." According to commenters, documentation errors are common--not because of deliberate physician misrepresentation, but because of frequent changes in the requirements for applications, contracts, and other agreements that may lead to confusion and miscommunications.
Response: We do not believe further guidance is appropriate in this context. We are unable to anticipate all potential factual scenarios in this rulemaking. We believe our traditional evaluation of the nature and circumstances of the conduct and exercise of discretion will inform whether to pursue an individual enforcement action. As previously stated, it is not OIG's intention to pursue cases under this section for inadvertent (non-reckless) errors or minor oversights.
Comment: One commenter stated that the
Response: The penalty amount is statutory. We will continue to engage in our traditional evaluation of the nature and circumstances of the conduct and exercise of discretion in deciding to pursue cases and determine appropriate penalty amounts.
Comment: Many commenters disagreed with our proposed per-day penalty for failure to report and return an overpayment in violation of section 1128A(a)(10) of the Act. Commenters noted that
Response: After careful consideration, we are finalizing the penalty for section 1128A(a)(10) of the Act as up to
Comment: Some commenters encouraged OIG to adopt a penalty scale for violations of section 1128A(a)(10) of the Act that would penalize providers more gravely for more serious violations. Commenters suggest that such a scale could be based on the length of delay, overpayment amount, and the number of claims.
Response: The factors set forth in
Comment: Commenters from pharmacy organizations expressed concerns with the proposed penalty under section 1128A(a)(10) of the Act of
Response: Based on our evaluation of all the comments on this issue, we are finalizing the penalty as up to
Comment: Some commenters from Part D plan sponsors expressed concerns about the use of per-day, per-claim, or per-item or service penalties in the context of Part D prescription drug claims. Given the huge volume of daily prescription drug events (PDEs), which are not equivalent to final medical claims, commenters believed that the application of CMPs in Part D should focus on the "annual cost report" and not on individual PDEs. According to commenters, Part D drug claims are not final until both the annual reconciliation and the final reopening are completed. Commenters recommended that OIG clarify that, in the context of Part D, determination of the penalty amount should be based on the "annual cost report" submitted by Part D sponsors and not on individual PDEs. Further, commenters argued that OIG should clarify that a PDE is not a claim until it has gone through reconciliation and the final reopening has been completed.
Response: We are finalizing the penalty for section 1128A(a)(10) of the Act, using the CMPL default of up to
Comment: Some commenters suggested that OIG does not recognize CMS's role in overseeing section 1128J of the Act, as applicable to Part C plans or Part D plan sponsors, pursuant to 42 CFR 422.326 and 423.360. One commenter suggested that OIG defer to CMS on overpayment issues and reserve its authority for instances of egregious behavior.
Response: While CMS oversees Part C plans and Part D plan sponsors under its regulations, OIG has been delegated the authority for enforcement of section 1128A of the Act. Thus, we decline to adopt the commenter's suggestion.
Comment: Several commenters suggested that for Part C plans and Part D plan sponsors, compliance with CMS's final rule, 79 FR 29,844 (
Response: This suggestion is outside the scope of our rulemaking, which did not propose to interpret the CMS final rule concerning Part C plans and Part D plan sponsors. In the context of section 1128A(a)(10) of the Act, a plan or plan sponsor may be liable if it knows of an overpayment and did not report and return it in accordance with section 1128J of the Act.
Comment: Several commenters asked that OIG clarify the definition of "overpayment." One commenter suggested that OIG should use CMS's definition of "funds" in the Part C and D final rule, 79 FR 29,844 (
Response: We are finalizing the definition, as proposed. The proposed regulatory text simply mirrors the statute. In the context of Parts C and D, CMS has interpreted the meaning of "overpayment," and we are required to apply the same meaning in an enforcement action against a Part C plan or Part D plan sponsor under section 1128A(a)(10) of the Act. This regulation also applies to Medicare Parts A and B and to
Comment: Several commenters requested clarification as to when the 60-day period begins. Commenters also requested clarification of the term "identify." Some commenters suggested that OIG not impose CMPs for overpayments, or alternatively, defer issuance of this final rule, until CMS finalizes its Part A/B overpayment proposed rule, 77 FR 9179 (
Response: We will continue to evaluate the nature and circumstances of the conduct and the exercise of discretion when deciding whether to pursue a case. The obligations of section 1128J(d) of the Act became effective upon enactment, without a final rule from CMS. However, CMS published its final rule on
Comment: Some commenters stated that providers should not be penalized under section 1128A(a)(10) of the Act in cases in which good faith efforts to return overpayments could not be completed because of the inability of government contractors and their payment systems to receive the overpayment. The commenters complained that
Response: As stated above, CMS is responsible for issuing regulations concerning section 1128J(d) of the Act and, thus, these comments are outside the scope of this rulemaking. As they relate to OIG's enforcement of section 1128A(a)(10) of the Act, we will consider the nature and circumstances of each alleged violation in determining whether to bring an enforcement action and at what amount to set the penalty and assessment. In situations in which a person attempts to return an overpayment but a
Comment: One commenter suggested that, when OIG begins imposing CMPs under section 1128A(a)(10) of the Act, OIG should impose CMPs of not more than
Response: We respectfully disagree with the commenter's suggestion. The obligations under section 1128J(d) have been in effect since the statute was enacted in
Comment: Several commenters suggested that OIG exercise its authority under section 1128A(a)(10) of the Act in coordination with CMS to ensure that: (1) Providers' obligations are uniform across these agencies; and (2) actions by OIG and CMS are undertaken contemporaneously to ensure that the associated administrative burden on providers is minimized.
Response: The OIG coordinates regularly with CMS on various program integrity efforts, including, as appropriate, on OIG administrative enforcement actions. As with many
Comment: Two commenters requested that we clarify that penalties for violation of section 1128A(a)(10) of the Act set forth in the rule are the maximum allowed, leaving discretion to OIG to levy smaller penalties, or no penalties, in cases in which providers are acting in good faith or the delays in repayment are beyond the control of the provider.
Response: We believe that the proposed rule's language, which we are finalizing, is clear on this point. All penalties in the proposed rule are described as "not more than" the applicable penalty amount.
Comment: Several commenters requested that OIG clarify that the CMP at
Response: We agree that, based on a plain reading of the statutory language, the CMP authority at
Comment: Some emergency transport providers requested clarification that an emergency transport provider would not violate section 1128A(a)(1)(B) of the Act or
Response: We decline to adopt the commenters' recommendation. If the provider or supplier knew or had reason to know that the ordering physician was excluded, the provider or supplier also knew or should have known that the claim for those emergency services is not payable. Submitting that claim could subject the provider or supplier to liability under
Comment: Several commenters expressed concern about the aggravating factor at
Response: We believe that a specific dollar threshold gives clearer guidance to the provider and supplier community and still permits the traditional case-by-case analysis of the facts and circumstances as discussed above. We agree, however, with those commenters who stated that the proposed
Comment: Some commenters opposed the proposed change to the aggravating factor in proposed
Response: We are finalizing the rule, as proposed. The existing regulation requires proof that the violation actually caused patient harm, premature discharge, or a need for additional services or subsequent hospital admission. This formulation is overly constrained for several reasons. The CMP authorities in this part, as a general matter, aim to redress fraud on the Federal health care programs by recovering funds, protecting the programs and beneficiaries from untrustworthy providers and suppliers, and deterring improper conduct by others. Accordingly, it is highly relevant if the conduct put beneficiaries at risk of patient harm. The requirement that OIG prove causation does not conform to this aim.
Comment: Several commenters objected to the proposed definition of "reasonable request" with respect to
Response: We do not believe a minimum period is necessary or appropriate in this context. Given the different purposes for which OIG may request access to material, such as audits, evaluations, investigations, and enforcement actions, we believe the best approach to defining timely access and reasonable request is for OIG to specify the date for production or access to the material in a written request. In determining the period a provider has to comply with the request, OIG will consider the circumstances of the request, including the volume of material, size and capabilities of the party subject to the request, and OIG's need for the material in a timely way to fulfill its responsibilities. The exception to this approach is a case in which OIG has reason to believe that the requested material is about to be altered or destroyed. Under those circumstances, timely access means access at the time the request is made.
Comment: Some commenters noted that a "reasonable request" must be "made by a properly identified agent of OIG during reasonable business hours," but that the definition does not specify whether it refers to OIG's or the recipient's business hours. Commenters urged OIG to clarify that the request must be made during the recipient's regular business hours and when the recipient's office is open to the public.
Response: "Reasonable business hours" means the recipient's business hours. This time includes when the recipient holds itself out to the public as open, such as for appointments or walk-in customers. However, a recipient may also conduct its business outside of the times when it is open to the public. We are finalizing the definition, as proposed.
Comment: One commenter expressed concern about OIG's authority to exclude a provider under
Response: We do not believe that such a single standard needs to be put in place. The OIG requests for information are clearly identifiable as being from OIG. The requests are made in writing, appear on OIG letterhead, and are signed by OIG officials.
Subpart C--CMPs, Assessments, and Exclusions for Anti-Kickback and Physician Self-Referral Violations
Subpart C contains the provisions relating to violations of the anti-kickback statute and physician self-referral law, which were found in the existing regulations at
We proposed revising the CMP provisions relating to the physician self-referral law to incorporate statutory terms that are unique to the physician self-referral law (section 1877 of the Act (42 U.S.C. 1395nn)). These revisions include using "designated health service" instead of "item or service" and "furnished" instead of "provided." In addition, we proposed revising the authority regarding "cross-referral arrangements" that was in the existing regulations at
The proposed changes also include minor technical corrections to the CMPs related to the anti-kickback statute to improve consistency with the statute. First, we added the phrases "to induce" and "in whole and in part" to
We received no comments and finalize this subpart, as proposed, except that, for the reasons provided in response to comments to proposed
Subpart D--CMPs and Assessments for Contracting Organization Misconduct
Subpart D contains the proposed provisions for penalties and assessments against managed care organizations. We proposed several stylistic changes to the existing regulations at
We also added to the regulations OIG's authority to impose CMPs against
The ACA amended several provisions of the Act that apply to misconduct by
The violations in this subpart are grouped according to the contracting organizations to which they apply. For instance,
We also proposed to remove the definition of "violation," which was found at
We received the following comments on the subpart. As discussed in response to the comments, we are finalizing this section of the rule as proposed.
Comment: One commenter argued that certain alleged violations of
Response: This comment is outside the scope of our rulemaking. The OIG does not have regulatory authority over the programmatic aspects of the Part C and Part D programs, which would include setting limitations on or requirements for contracting organizations' relationships with providers and suppliers. CMS has this programmatic authority, which includes, among many other things, implementing the provider indemnification limitations contained in section 1852 of the Act and at 42 CFR 422.212.
Comment: Two commenters expressed concern with the overlapping enforcement authority of OIG and CMS with regard to Part D contracting organizations. The commenters argued that this overlap could subject Part D contracting organizations to duplicative enforcement actions, multiple audits of the same activities, and potentially inconsistent standards and interpretations of regulatory requirements. The commenters recommended that CMS be the sole enforcement authority with respect to those areas for which OIG and CMS share jurisdiction, except in cases in which OIG's unique investigative authority is necessary to determine non-compliance. One commenter recommended that OIG state that compliance with the Part D requirements, when assessed by CMS, will be deemed to be compliance with OIG's enforcement authorities. The commenter argued that, if CMS has already performed audits and other oversight activity, there is no reason for OIG to duplicate this work.
Response: We do not agree with the comments. The OIG and CMS have concurrent jurisdiction in various matters concerning the
Comment: A commenter requested a change in the new authority at
Response: The proposed regulation mirrors the statutory language. Specifically, the ACA created a cause of action against a contracting organization that employs or contracts with an excluded person for the provision of health care, utilization review, medical social work, or administrative services, or employs or contracts with any entity for the provision of such services (directly or indirectly) through an excluded person. Accordingly, we are finalizing this section of the rule, as proposed.
Comment: A commenter also asserted that OIG's proposed reference to "health care, utilization review, medical social work, or administrative services" is overly broad and asked OIG to revise "administrative services" to "administrative services for a
Response: We believe that the commenter's proposed revision is inappropriately narrow and does not reflect the statutory language. The regulation mirrors the language of the ACA. Second, there may be administrative services related to a Federal health care program that are not for a specific
Comment: A commenter requested clarification on the potential liability of plans for claims submitted by out-of-network providers or suppliers who have no privity of contract with the health plan.
Response: The CMP authority at
Subpart E--CMPs and Exclusions for EMTALA Violations
Subpart E contains the penalty and exclusion provisions for violations of EMTALA, section 1867 of the Act (42 U.S.C. 1395dd). EMTALA was passed in 1986 as part of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), Public Law 99-272. Section 1867 of the Act sets forth the obligations of a
Under section 1867(d) of the Act, participating hospitals and responsible physicians may be liable for CMPs of up to
We proposed several updates to the EMTALA CMP regulations. First, as part of our proposed general reorganization, we have included the EMTALA authorities within a separate subpart. Further, the proposed revision removed outdated references to the pre-1991 "knowing" scienter requirement. We also proposed minor revisions to emphasize that the CMP may be assessed for each violation of EMTALA and that all participating hospitals subject to EMTALA, including those with emergency departments and those with specialized capabilities or facilities, are subject to penalties.
We proposed revising the "responsible physician" definition to clarify that on-call physicians at any participating hospital subject to EMTALA, including the hospital to which the individual initially presented and the hospital with specialized capabilities or facilities that has received a request to accept an appropriate transfer, face potential CMP and exclusion liability under EMTALA.
Section 1867(d) of the Act provides that any physician who is responsible for the examination, treatment, or transfer of an individual in a participating hospital, including any physician on-call for the care of such an individual, and who negligently violates section 1867 of the Act may be penalized under section 1867(d)(1)(B) of the Act. The definition of "responsible physician" also provides for on-call physician liability. We proposed to revise the definition to clarify the circumstances when an on-call physician has EMTALA liability. An on-call physician who fails or refuses to appear within a reasonable time after such physician is requested to come to the hospital for examination, treatment, or transfer purposes is subject to EMTALA liability. This includes on-call physicians at the hospital where the individual presents initially and requests medical examination or treatment as well as on-call physicians at a hospital with specialized capabilities or facilities where the individual may need to be transferred. In addition, an on-call physician at the hospital with specialized capabilities or facilities may violate EMTALA by refusing to accept an appropriate transfer.
We also proposed revising the factors that were set forth in SUBSEC 1003.106(a)(4) and (d) to improve clarity and better reflect OIG's enforcement policy. First, we proposed clarifying that the factors listed in proposed
Finally, we examined the factors that were at
We concluded that for several reasons, the mitigating factors should be removed. Because of the overall statutory purpose, the fact-specific nature of EMTALA violations, and the CMS certification process, the mitigating factors that were found at
We will continue to evaluate the circumstances of each EMTALA referral to determine whether to exercise our discretion to pursue the violation and to determine the appropriate remedy.
We received the following comments on the subpart. To the extent the provisions of the proposed rule are not addressed in response to the comments below, we are finalizing this section of the rule, as proposed.
Comment: One commenter urged OIG to adopt a regulation that does not impose penalties where the violation of EMTALA is based only on negligence and not on willful conduct.
Response: The suggestion is beyond the scope of the proposed rule and does not reflect the statutory language, which sets the scienter level at negligence.
Comment: Several commenters addressed OIG's changes to the definition of "responsible physician." One commenter requested that OIG clarify that it is not creating a new application of EMTALA to hospitals with specialized capabilities, but simply clarifying that on-call physicians at hospitals with specialized capabilities are considered "responsible physicians." Another commenter asserted that OIG's revised definition is an expansion of EMTALA to physicians and on-call physicians who fail to accept an appropriate transfer. This commenter argued that the nondiscrimination provisions in section 1867(g) of the Act apply only to participating hospitals and do not create CMP liability for physicians at such hospitals. One commenter noted that assessing whether a responsible physician has neglected his or her responsibilities under EMTALA is a rigorous undertaking. The commenter said that the assessment should include more than whether the on-call physician showed up when called, but also whether the on-call physician was in the operating room when called or whether a community call arrangement existed. Finally, a commenter urged OIG to ensure that its enforcement against a "responsible physician" is consistent with the regulations and guidance promulgated by CMS.
Response: We are finalizing the rule, as proposed. In response to comments, we confirm that OIG is clarifying that on-call physicians at hospitals with specialized capabilities are considered "responsible physicians." The OIG believes this is an appropriate reading of the statute and that the proposed regulation does not expand the application of EMTALA. The OIG recognizes that a determination of potential liability for an on-call physician is fact-intensive and takes into account factors that include a hospital's compliance with CMS regulations and guidance regarding the adoption of written policies governing on-call physicians and an on-call physician's compliance with such policies.
Comment: Several commenters discussed OIG's proposal to remove the mitigating factors related to EMTALA CMPs. Two commenters objected to the removal of the mitigating factor under which an individual presented a request for treatment but subsequently exhibited conduct that demonstrated a clear intent to leave the hospital voluntarily. Another commenter stated that removal of this mitigating factor would remove consideration of a hospital's or physician's attempts to comply with EMTALA's requirements where they were unable to do so because of patient conduct over which they had no control. Further, a commenter asserted that EMTALA is not violated when a patient leaves of his or her free will.
Response: We are finalizing the rule, as proposed. The OIG believes that the evaluation of whether an EMTALA violation occurred when the individual who presented for treatment left the hospital voluntarily is fact- and circumstance-specific. If no violation is found to have occurred, the lack of the former mitigating factor would be of no consequence. If a violation is found to have occurred, the patient's having left voluntarily should not be a mitigating circumstance.
Comment: A commenter stated that additional mitigating factors, including the implementation of appropriate policies, procedures, training and action against hospital personnel prior to a CMS investigation, are useful and fair factors to distinguish hospitals making good faith and effective efforts to address EMTALA violations.
Response: The OIG agrees and has added as a mitigating factor situations in which a hospital takes appropriate and timely corrective action in response to a violation. For purposes of this mitigating factor, corrective action must be completed prior to CMS initiating an investigation of the hospital for violations of EMTALA and must include disclosing the violation to CMS prior to CMS receiving a complaint regarding the violation from another source or otherwise learning of the violation.
Comment: One commenter objected to the proposed removal of the term "clearly" from the existing regulation at
Response: The OIG is finalizing the proposal. While determination of EMTALA violations are fact- and circumstance-dependent, OIG would not impose a CMP where a physician or hospital did not at least demonstrate negligence in failing to comply with EMTALA. Further, if the hospital complied with EMTALA and still failed to diagnose an emergency medical condition, there would be no violation.
Comment: Several commenters addressed OIG's proposed aggravating factors. One commenter expressed concern with including premature discharge in the aggravating factor at
Response: In response to the comments, OIG is revising the proposed aggravating factor at
Subpart F--CMPs for Section 1140 Violations
Subpart F applies to violations of section 1140 of the Act (42 U.S.C. 1320b-10). The most significant proposed change to this subpart was clarifying the application of section 1140 of the Act to telemarketing,
We previously defined conduct that constituted a violation for (1) direct or printed mailing solicitations or advertisements and (2) broadcasts or telecasts. The proposed regulations were updated to also reflect telephonic and
The final rule includes changes from the proposed rule to reflect the Bipartisan Budget Act of 2015. We changed "electronic message" and "electronic mail" to "electronic communication." We also state "each dissemination, viewing, or accessing of the electronic communication," as opposed to "each separate email address that received the email message," will constitute a violation. The proposed rule used email addresses as a way to determine the number of disseminations, views, or accessing of the communication. Because not all "electronic communications" involve an "email address," we believe "each dissemination, viewing, or accessing of the electronic communication" is a more appropriate description of potential violations of the rule.
We received no comments on this subpart and finalize, as proposed, except as explained above.
Subpart H--CMPs for Adverse Action Reporting and Disclosure Violations
Subpart H covers violations for failing to report payments in settlement of a medical malpractice claim in accordance with section 421 of Public Law 99-660 (42 U.S.C. 11131); failing to report adverse actions pursuant to section 221 of Public Law 104-191 as set forth in section 1128E of the Act (42 U.S.C. 1320a-7e); or improperly disclosing, using, or permitting access to information reported in accordance with Part B of Title IV of Public Law 99-660 (42 U.S.C. 11137).
The language in proposed subpart H remains largely unchanged from the existing regulations at SUBSEC 1003.102(b)(5)-(6) and SUBSEC 1003.103(c), (g). We proposed to remove the reference to the Healthcare Integrity and Protection Data Bank (HIPDB) in conformity with section 6403(a) of the ACA, which removed the reference from section 1128E of the Act. The relevant reporting requirements, violation, and penalties would remain unchanged. Under section 1128E of the Act, providers must still report the same information. Once the HIPDB is phased out pursuant to section 6403(a) of ACA, the information will be collected and stored in the National Practitioner Data Bank established pursuant to the Health Care Quality Improvement Act of 1986 (42 U.S.C. 11101 et seq.). In the penalty section, we proposed to clarify that a CMP may be imposed for each failure to report required information or adverse action and for each improper disclosure, use, or permitting of access to information.
We received no comments on this subpart and finalize, as proposed.
Subpart I--CMPs for Select Agent Program Violations
Subpart I contains penalties for violations involving select agents, found in the existing regulations at
Proposed subpart I explains that the CMP may be assessed for each individual violation of 42 CFR part 73. The Bioterrorism Act of 2002 states that any person who violates "any provision" of the regulations is subject to the maximum statutory penalty. The plain meaning of "any provision" means that any single violation can subject a person to the maximum penalty. Thus, we proposed amending the regulation to add "each individual" before "violation" to clarify our longstanding interpretation of this section to mean that each violation subjects a person to a CMP up to the maximum amount.
In addition, proposed subpart I includes several aggravating circumstances to guide our penalty determinations. Aggravating factors include: (1) The Responsible Official participated in or knew or should have known of the violation; (2) the violation was a contributing factor, regardless of proportionality, to an unauthorized individual's access to or possession of a select agent or toxin, an individual's exposure to a select agent or toxin, or the unauthorized removal of a select agent or toxin from the person's physical location as identified on the person's certificate of registration; and (3) the person previously received a statement of deficiency from HHS or the
We received no comments on this subpart and, except as noted above, finalize, as proposed.
Subpart J--CMPs, Assessments, and Exclusions for Beneficiary Inducement Violations
Subpart J covers two statutory provisions concerning beneficiary inducement violations. We proposed moving the existing regulation,
We proposed to incorporate the general factors listed in
We changed the basis for penalties for violations of
We received the following comment on this subpart. As the comment was outside the scope of this rulemaking, we are finalizing this subpart, as proposed, except as explained above.
Comment: A commenter urged OIG to include in proposed
Response: Any exceptions to liability under
Subpart K--CMPs for the Sale of Medicare Supplemental Policies
Subpart K covers violations relating to the sale of
The OIG may impose a penalty against any person who it determines has violated section 1882(d)(1) of the Act (42 U.S.C. 1395ss(d)(1)) by knowingly and willfully making or causing to be made or inducing or seeking to induce the making of any false statement or representation of material fact with respect to the compliance of any policy with
The OIG may impose a penalty against any person who it determines has violated section 1882(d)(2) of the Act (42 U.S.C. 1395ss(d)(2)) by falsely assuming or pretending to be acting, or misrepresenting in any way that he is acting, under the authority of or in association with,
The OIG may also impose a penalty against any person who it determines has violated section 1882(d)(4)(A) of the Act (42 U.S.C. 1395ss(d)(4)(A)) by mailing or causing to be mailed any matter for advertising, soliciting, offering for sale, or the delivery of
The OIG may impose a penalty against any person who it determines has violated section 1882(d)(3)(A)(i) of the Act (42 U.S.C. 1395ss(d)(3)(A)) by issuing or selling to an individual entitled to benefits under Part A or enrolled in Part B (including an individual electing a Medicare Part C plan): (1) A health insurance policy with the knowledge that the policy duplicates
The OIG may also impose a penalty against any person who violated section 1882(d)(3)(A)(vi)(II) of the Act (42 U.S.C. 1395ss(d)(3)(A)(vi)(II)) by issuing or selling a health insurance policy (other than a policy described in section 1882(d)(3)(A)(vi)(III) of the Act) to an individual entitled to benefits under Part A or enrolled under Part B who is applying for a health insurance policy without furnishing a disclosure statement (described at section 1882(d)(3)(A)(vii) of the Act). We proposed to add this violation at
The OIG may also impose a penalty against any person who it determines has violated section 1882(d)(3)(B)(iv) of the Act (42 U.S.C. 1395ss(d)(3)(B)(iv)) by issuing or selling a
For violations of section 1882(d)(1), (d)(2), and (d)(4)(A) of the Act, OIG may impose a penalty of not more than
We received the following comment on this subpart. As discussed below, we are finalizing this subpart, as proposed.
Comment: A commenter requested that OIG defer adopting the proposed
Response: We respectfully disagree with the suggestion to defer issuance of the regulation and are finalizing the rule, as proposed. The CMP authorities covered in this subpart have existed in statute for many years and should be added to part 1003 at this time in light of our reorganization. In addition, the concerns raised by the commenter appear to be addressed by the fact that
Subpart L--CMPs for Drug Price Reporting
Subpart L contains the CMPs for drug-price reporting found in section 1927(b)(3)(B)-(C) of the Act (42 U.S.C. 1396r-8(b)(3)(B)-(C)). Although the statutory authority is self-implementing and does not require a regulation, we proposed adding the regulatory language at this time in light of the general reorganization. The proposed regulation text closely mirrors the language of the statute.
Section 1927(a) of the Act implements a drug-pricing program in which manufacturers that sell covered outpatient drugs to covered entities must agree to charge a price that will not exceed an amount determined under a statutory formula. Under section 1927(a) of the Act, manufacturers must provide certain statutorily mandated discounts to covered entities. Section 1927(b)(3)(A) of the Act requires manufacturers with Medicaid Drug Rebate Agreements to provide specified drug-pricing and product information to the Secretary, including, but not limited to, average manufacturer price (AMP), average sales price (ASP), wholesale acquisition cost, and best price. Labelers are required to certify each product and pricing data submission made to CMS.
Manufacturers submit the product and pricing information required by section 1927 of the Act using the National Drug Code (NDC) product identifier. The OIG proposed calculating CMPs under section 1927(b)(3)(C) of the Act at the NDC level. For example, a manufacturer that fails to provide the information required by section 1927(b)(3)(A) of the Act for five separate NDCs may be penalized for each NDC, in an aggregate amount of not more than
Section 1927(b)(3)(B) of the Act provides for verification surveys of AMPs and establishes that a penalty of not more than
Pursuant to section 1927(b)(3)(C) of the Act, OIG may impose a penalty of not more than
We received the following comments on this subpart. To the extent provisions of the proposed rule are not addressed in our response to the comments below, we are finalizing this section of the rule, as proposed.
Comment: One commenter expressed concern with OIG's proposal to calculate penalties at the NDC level instead of per late report. The commenter argued that, where one report contained multiple NDCs, imposing multiple penalties per day instead of one penalty per day would be unduly harsh.
Response: The OIG is finalizing the rule, as proposed. The OIG believes that this interpretation is supported by the statutory text, which refers to NDCs, and by the reporting systems employed by CMS, under which manufacturers are required to report AMP and ASP product and pricing data using NDCs.
Comment: One commenter expressed concern with OIG's proposal to calculate penalties at the 9-digit NDC level. The commenter suggested that OIG avoid establishment of a bright-line rule that would rigidly define products at the 9-digit NDC level for the purposes of calculating penalties. This commenter noted that the preamble language in which OIG proposed calculating penalties at the 9-digit NDC level is not reflected in the regulation text.
Response: We agree that OIG should have discretion to determine the appropriate NDC level at which to calculate penalties based on the particular requirements and submissions for each manufacturer. Neither section 1927(b)(3)(C) of the Act nor the regulation dictates which NDC level must be used in calculating the penalties. Therefore, we have not included the discussion of 9-digit and 11-digit NDC levels in the text of the final rule. To the extent the commenter may have been recommending that OIG not use NDCs to calculate penalties, OIG believes that the use of NDCs is appropriate based on the statutory text and the reporting systems employed by CMS.
Subpart M--CMPs for Notifying a Skilled Nursing Facility, Nursing Facility,
In subpart M, we proposed to add regulations providing for CMPs for notifying a skilled nursing facility (SNF), nursing facility (NF), home health agency (HHA), or a community care setting of the date or time of a survey. The statutory authority for these CMPs is self-implementing and does not require a regulation. Sections 1819(g)(2)(A), 1919(g)(2)(A), 1891(c)(1), 1929(i)(3)(A); 42 U.S.C. 1395i-3(g)(2)(A), 1396r(g)(2)(A), 1395bbb(c)(1), 1396t(i)(3)(A) of the Act. However, we proposed adding the regulatory language at this time in light of the general reorganization. The proposed regulation text closely mirrors the language of the statute.
SNFs, NFs, HHAs, and community care settings are subject to State compliance surveys without any prior notice. Sections 1819(g)(2)(A), 1919(g)(2)(A), 1891(c)(1), and 1929(i)(3)(A) of the Act provide for imposing a penalty of not more than
The OIG will consider the general factors listed in
We received no comments on this subpart and finalize, as proposed.
Subpart O--Procedures for the Imposition of CMPs, Assessments, and Exclusions
Subpart O contains the procedural provisions that apply to part 1003. We proposed several clarifying changes to procedures in this subpart. We proposed amending the methods permitted for service of a notice of a proposal of a penalty, assessment, or exclusion under part 1003. Section 1003.109 required service by certified mail, return receipt requested. Section 1128A(c)(1) of the Act, however, permits service by any method authorized by Rule 4 of the Federal Rules of Civil Procedure (FRCP), which has been amended to authorize various service methods depending on whether the recipient is a domestic or foreign individual or corporation. Therefore, we are amending our regulation at SUBSEC 1003.1500(a) and 1003.1510 to permit service under any means authorized by FRCP Rule 4. By referencing the rule, the regulation would reflect any future amendments to Rule 4 automatically.
We also proposed technical changes to the judicial review provision at
We also proposed a technical change to the regulatory language to clarify the statutory limit on issues eligible for judicial review. Section 1128A(e) of the Act provides that "[n]o objection that has not been urged before the Secretary shall be considered by the court, unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances." We interpret this to mean that a person is precluded from making arguments or raising issues in Federal court that were not first raised during the administrative process, unless the court finds that extraordinary circumstances prevented raising those arguments or issues. We interpret "extraordinary circumstances" to mean that those arguments or issues were beyond the authority of the administrative process.
We received no comments on this subpart and finalize, as proposed.
Other Changes in Part 1003
The OIG has authority to impose CMPs against endorsed sponsors under the Medicare Prescription Drug Discount Card Program that knowingly commit certain violations. The discount card program has been defunct since
We received no comments on removing this CMP and finalize, as proposed.
F. Appeals of Exclusions, Civil Monetary Penalties, and Assessments
We proposed changes to OIG regulations at 42 CFR part 1005 to correct an internal inconsistency in
We received the following comment on this proposal. As discussed in response to the comment, we are finalizing this section of the rule, as proposed.
Comment: A commenter asked OIG to reconsider our proposal to limit an ALJ's authority in the absence of a specific legislative mandate.
Response: We respectfully disagree with the commenter's suggestion and finalize the rule, as proposed. The rule ensures consistency in the ALJ review of discretionary exclusions imposed under sections 1128(b) and 1128A of the Act.
III. Regulatory Impact Statement
We have examined the impact of this proposed rule as required by Executive Order 12866, Executive Order 13563, the Regulatory Flexibility Act (RFA) of 1980, the Unfunded Mandates Reform Act of 1995, and Executive Order 13132.
Executive Order Nos. 12866 and 13563
Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulations are necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects; distributive impacts; and equity). Executive Order 13563 is supplemental to and reaffirms the principles, structures, and definitions governing regulatory review as established in Executive Order 12866. A regulatory impact analysis must be prepared for major rules with economically significant effects, i.e.,
This proposed rule is designed to codify in regulations new statutory provisions, including new CMP authorities. This proposed rule is also designed to clarify the intent of existing statutory requirements and to reorganize CMP regulation sections for ease of use. The vast majority of providers, suppliers, and other persons participating in Federal health care programs would be minimally affected, if at all, by these proposed revisions.
Accordingly, we believe that the likely aggregate economic effect of these regulations would be significantly less than
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) and the Small Business Regulatory Enforcement and Fairness Act of 1996, which amended the RFA, require agencies to analyze options for regulatory relief of small businesses. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and government agencies. Most providers are considered small entities if they have revenues of
The aggregate effect of the changes to the CMP provisions would be minimal.
In summary, we have concluded that this proposed rule should not have a significant impact on the operations of a substantial number of small providers and that a regulatory flexibility analysis is not required for this rulemaking.
In addition, section 1102(b) of the Act (42 U.S.C. 1302) requires us to prepare a regulatory impact analysis if a rule under Titles XVIII or XIX or section B of Title XI of the Act may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to section 604 of the RFA. Only one proposed change has been made under the relevant title, the amendments to the Medicare Contracting Organization Rule at proposed
Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates Reform Act of 1995, Public Law 104-4, also requires that agencies assess anticipated costs and benefits before issuing any rule that may result in expenditures in any one year by State, local, or tribal governments, in the aggregate, or by the private sector, of
Executive Order 13132
Executive Order 13132, Federalism, establishes certain requirements that an agency must meet when it promulgates a rule that imposes substantial direct requirements or costs on State and local governments, preempts State law, or otherwise has Federalism implications. In reviewing this rule under the threshold criteria of Executive Order 13132, we have determined that this proposed rule would not significantly affect the rights, roles, and responsibilities of State or local governments.
IV. Paperwork Reduction Act
These proposed changes to parts 1003 and 1005 impose no new reporting requirements or collections of information. Therefore, a Paperwork Reduction Act review is not required.
List of Subjects
42 CFR Part 1003
Fraud, Grant programs--health, Health facilities, Health professions,
42 CFR Part 1005
Administrative practice and procedure, Fraud, Investigations, Penalties.
For the reasons set forth in the preamble, the
PART 1003--CIVIL MONEY PENALTIES, ASSESSMENTS AND EXCLUSIONS
1. The authority citation for part 1003 continues to read as follows:
Authority: 42 U.S.C. 262a, 1302, 1320-7, 1320a-7a, 1320b-10, 1395u(j), 1395u(k), 1395cc(j), 1395w-141(i)(3), 1395dd(d)(1), 1395mm, 1395nn(g), 1395ss(d), 1396b(m), 11131(c), and 11137(b)(2).
2. Designate SUBSEC 1003.100 through 1003.135 as subpart A, and add a heading for subpart A to read as follows:
Subpart A--General Provisions
3. Revise
(a) Basis. This part implements sections 1128(c), 1128A, 1140, 1819(b)(3)(B), 1819(g)(2)(A), 1857(g)(2)(A), 1860D-12(b)(3)(E), 1860D-31(i)(3), 1862(b)(3)(C), 1867(d)(1), 1876(i)(6), 1877(g), 1882(d), 1891(c)(1); 1903(m)(5), 1919(b)(3)(B), 1919(g)(2)(A), 1927(b)(3)(B), 1927(b)(3)(C), and 1929(i)(3) of the Social Security Act; sections 421(c) and 427(b)(2) of Public Law 99-660; and section 201(i) of Public Law 107-188 (42 U.S.C. 1320a-7(c), 1320a-7a, 1320b-10, 1395i-3(b)(3)(B), 1395i-3(g)(2)(A), 1395w-27(g)(2)(A), 1395w-112(b)(3)(E), 1395w-141(i)(3), 1395y(b)(3)(B), 1395dd(d)(1), 1395mm(i)(6), 1395nn(g), 1395ss(d), 1395bbb(c)(1), 1396b(m)(5), 1396r(b)(3)(B), 1396r(g)(2)(A), 1396r-8(b)(3)(B), 1396r-8(b)(3)(C), 1396t(i)(3), 11131(c), 11137(b)(2), and 262a(i)).
(b) Purpose. This part--
(1) Provides for the imposition of civil money penalties and, as applicable, assessments and exclusions against persons who have committed an act or omission that violates one or more provisions of this part and
(2) Sets forth the appeal rights of persons subject to a penalty, assessment, and exclusion.
SUBSEC 1003.102 through 1003.110, 1003.114, 1003.126 through 1003.129, and 1003.132 through 1003.135 [Removed]
4. Remove SUBSEC 1003.102 through 1003.110, 1003.114, 1003.126 through 1003.129, and 1003.132 through 1003.135.
5. Redesignate SEC 1003.101 as
6. Amend newly designated
a. Removing the definitions of "Act", "Adverse effect", and "ALJ";
b. Revising the definitions of "Assessment" and "Claim";
c. Removing the definition of "CMS";
d. Revising the definitions of "Contracting organization" and "Enrollee";
e. Removing the definitions of "Department", "Exclusion", "Inspector General", and "Item or service";
f. Adding in alphabetical order definitions for "Items and services or items or services", "Knowingly", and "Material";
g. Removing the definition of "
h. Revising the definition of "Medical malpractice claim or action";
i. Removing the definition of "
j. Adding in alphabetical order definitions for "Non-separately-billable item or service", and "Overpayment";
k. Revising the definitions of "Participating hospital", "Penalty", and "Physician incentive plan";
l. Adding in alphabetical order definitions for "Reasonable request", and "Responsible Official";
m. Revising the definition of "Responsible physician";
n. Removing the definition of "Secretary";
o. Revising the definition of "Select agents and toxins";
p. Adding in alphabetical order a definition for "Separately billable item or service";
q. Revising the definitions of "Should know, or should have known" and "Social Services Block Grant Program";
r. Removing the definitions of "State" and "State health care program";
s. Revising the definition of "Timely basis"; and
t. Removing the definition of "Transitional assistance".
The revisions and additions read as follows:
* * * * *
Assessment means the amounts described in this part and includes the plural of that term.
Claim means an application for payment for an item or service under a Federal health care program.
* * * * *
Contracting organization means a public or private entity, including a health maintenance organization,
Enrollee means an individual who is eligible for
* * * * *
Items and services or items or services includes without limitation, any item, device, drug, biological, supply, or service (including management or administrative services), including, but not limited to, those that are listed in an itemized claim for program payment or a request for payment; for which payment is included in any Federal or State health care program reimbursement method, such as a prospective payment system or managed care system; or that are, in the case of a claim based on costs, required to be entered in a cost report, books of account, or other documents supporting the claim (whether or not actually entered).
Knowingly means that a person, with respect to an act, has actual knowledge of the act, acts in deliberate ignorance of the act, or acts in reckless disregard of the act, and no proof of specific intent to defraud is required.
Material means having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property.
* * * * *
Medical malpractice claim or action means a written complaint or claim demanding payment based on a physician's, dentist's, or other health care practitioner's provision of, or failure to provide, health care services and includes the filing of a cause of action based on the law of tort brought in any State or Federal court or other adjudicative body.
* * * * *
Non-separately-billable item or service means an item or service that is a component of, or otherwise contributes to the provision of, an item or a service, but is not itself a separately billable item or service.
Overpayment means any funds that a person receives or retains under
Participating hospital means either a hospital or a critical access hospital, as defined in section 1861(mm)(1) of the Act, that has entered into a
Penalty means the amount described in this part and includes the plural of that term.
* * * * *
Physician incentive plan means any compensation arrangement between a contracting organization and a physician or physician group that may directly or indirectly have the effect of reducing or limiting services provided with respect to enrollees in the organization.
* * * * *
Reasonable request, with respect to
* * * * *
Responsible Official means the individual designated pursuant to 42 CFR part 73 to serve as the Responsible Official for the person holding a certificate of registration to possess, use, or transfer select agents or toxins.
Responsible physician means a physician who is responsible for the examination, treatment, or transfer of an individual who comes to a participating hospital's emergency department requesting examination or treatment, including any physician who is on-call for the care of such individual and fails or refuses to appear within a reasonable time at such hospital to provide services relating to the examination, treatment, or transfer of such individual. Responsible physician also includes a physician who is responsible for the examination or treatment of individuals at hospitals with specialized capabilities or facilities, as provided under section 1867(g) of the Act, including any physician who is on-call for the care of such individuals and refuses to accept an appropriate transfer or fails or refuses to appear within a reasonable time to provide services related to the examination or treatment of such individuals.
* * * * *
Select agents and toxins is defined consistent with the definition of "select agent and/or toxin" and "overlap select agent and/or toxin" as set forth in 42 CFR part 73.
Separately billable item or service means an item or service for which an identifiable payment may be made under a Federal health care program, e.g., an itemized claim or a payment under a prospective payment system or other reimbursement methodology.
Should know, or should have known, means that a person, with respect to information, either acts in deliberate ignorance of the truth or falsity of the information or acts in reckless disregard of the truth or falsity of the information. For purposes of this definition, no proof of specific intent to defraud is required.
Social Services Block Grant Program means the program authorized under Title XX of the Act.
* * * * *
Timely basis means, in accordance with
* * * * *
7. Add SUBSEC 1003.120, 1003.130, 1003.140, 1003.150, and 1003.160 to subpart A to read as follows:
Sec.
* * * * *
1003.120 Liability for penalties and assessments.
1003.130 Assessments.
1003.140 Determinations regarding the amount of penalties and assessments and the period of exclusion.
1003.150 Delegation of authority.
1003.160 Waiver of exclusion.
(a) In any case in which it is determined that more than one person was responsible for a violation described in this part, each such person may be held liable for the penalty prescribed by this part.
(b) In any case in which it is determined that more than one person was responsible for a violation described in this part, an assessment may be imposed, when authorized, against any one such person or jointly and severally against two or more such persons, but the aggregate amount of the assessments collected may not exceed the amount that could be assessed if only one person was responsible.
(c) Under this part, a principal is liable for penalties and assessments for the actions of his or her agent acting within the scope of his or her agency. This provision does not limit the underlying liability of the agent.
The assessment in this part is in lieu of damages sustained by the Department or a State agency because of the violation.
(a) Except as otherwise provided in this part, in determining the amount of any penalty or assessment or the period of exclusion in accordance with this part, the OIG will consider the following factors--
(1) The nature and circumstances of the violation;
(2) The degree of culpability of the person against whom a civil money penalty, assessment, or exclusion is proposed. It should be considered an aggravating circumstance if the respondent had actual knowledge where a lower level of knowledge was required to establish liability (e.g., for a provision that establishes liability if the respondent "knew or should have known" a claim was false or fraudulent, it will be an aggravating circumstance if the respondent knew the claim was false or fraudulent). It should be a mitigating circumstance if the person took appropriate and timely corrective action in response to the violation. For purposes of this part, corrective action must include disclosing the violation to the OIG through the Self-Disclosure Protocol and fully cooperating with the OIG's review and resolution of such disclosure, or in cases of physician self-referral law violations, disclosing the violation to CMS through the Self-Referral Disclosure Protocol;
(3) The history of prior offenses. Aggravating circumstances include, if at any time prior to the violation, the individual--or in the case of an entity, the entity itself; any individual who had a direct or indirect ownership or control interest (as defined in section 1124(a)(3) of the Act) in a sanctioned entity at the time the violation occurred and who knew, or should have known, of the violation; or any individual who was an officer or a managing employee (as defined in section 1126(b) of the Act) of such an entity at the time the violation occurred--was held liable for criminal, civil, or administrative sanctions in connection with a program covered by this part or in connection with the delivery of a health care item or service;
(4) Other wrongful conduct. Aggravating circumstances include proof that the individual--or in the case of an entity, the entity itself; any individual who had a direct or indirect ownership or control interest (as defined in section 1124(a)(3) of the Act) in a sanctioned entity at the time the violation occurred and who knew, or should have known, of the violation; or any individual who was an officer or a managing employee (as defined in section 1126(b) of the Act) of such an entity at the time the violation occurred--engaged in wrongful conduct, other than the specific conduct upon which liability is based, relating to a government program or in connection with the delivery of a health care item or service. The statute of limitations governing civil money penalty proceedings does not apply to proof of other wrongful conduct as an aggravating circumstance; and
(5) Such other matters as justice may require. Other circumstances of an aggravating or mitigating nature should be considered if, in the interests of justice, they require either a reduction or an increase in the penalty, assessment, or period of exclusion to achieve the purposes of this part.
(b)(1) After determining the amount of any penalty and assessment in accordance with this part, the OIG considers the ability of the person to pay the proposed civil money penalty or assessment. The person shall provide, in a time and manner requested by the OIG, sufficient financial documentation, including, but not limited to, audited financial statements, tax returns, and financial disclosure statements, deemed necessary by the OIG to determine the person's ability to pay the penalty or assessment.
(2) If the person requests a hearing in accordance with 42 CFR 1005.2, the only financial documentation subject to review is that which the person provided to the OIG during the administrative process, unless the ALJ finds that extraordinary circumstances prevented the person from providing the financial documentation to the OIG in the time and manner requested by the OIG prior to the hearing request.
(c) In determining the amount of any penalty and assessment to be imposed under this part the following circumstances are also to be considered--
(1) If there are substantial or several mitigating circumstances, the aggregate amount of the penalty and assessment should be set at an amount sufficiently below the maximum permitted by this part to reflect that fact.
(2) If there are substantial or several aggravating circumstances, the aggregate amount of the penalty and assessment should be set at an amount sufficiently close to or at the maximum permitted by this part to reflect that fact.
(3) Unless there are extraordinary mitigating circumstances, the aggregate amount of the penalty and assessment should not be less than double the approximate amount of damages and costs (as defined by paragraph (e)(2) of this section) sustained by
(4) The presence of any single aggravating circumstance may justify imposing a penalty and assessment at or close to the maximum even when one or more mitigating factors is present.
(d)(1) The standards set forth in this section are binding, except to the extent that their application would result in imposition of an amount that would exceed limits imposed by the United States Constitution.
(2) The amount imposed will not be less than the approximate amount required to fully compensate
(3) Nothing in this part limits the authority of the Department or the OIG to settle any issue or case as provided by
(4) Penalties, assessments, and exclusions imposed under this part are in addition to any other penalties, assessments, or other sanctions prescribed by law.
The OIG is delegated authority from the Secretary to impose civil money penalties and, as applicable, assessments and exclusions against any person who has violated one or more provisions of this part. The delegation of authority includes all powers to impose and compromise civil monetary penalties, assessments, and exclusion under section 1128A of the Act.
(a) The OIG will consider a request from the administrator of a Federal health care program for a waiver of an exclusion imposed under this part as set forth in paragraph (b) of this section. The request must be in writing and from an individual directly responsible for administering the Federal health care program.
(b) If the OIG subsequently obtains information that the basis for a waiver no longer exists, the waiver will cease and the person will be fully excluded from the Federal health care programs for the remainder of the exclusion period, measured from the time the full exclusion would have been imposed if the waiver had not been granted.
(c) The OIG will notify the administrator of the Federal health care program whether his or her request for a waiver has been granted or denied.
(d) If a waiver is granted, it applies only to the program(s) for which waiver is requested.
(e) The decision to grant, deny, or rescind a waiver is not subject to administrative or judicial review.
8. Add subparts B through F to read as follows:
Subpart B--CMPs, Assessments, and Exclusions for False or Fraudulent Claims and Other Similar Misconduct
Sec.
1003.200 Basis for civil money penalties, assessments, and exclusions.
1003.210 Amount of penalties and assessments.
1003.220 Determinations regarding the amount of penalties and assessments and the period of exclusion.
Subpart C--CMPs, Assessments, and Exclusions for Anti-Kickback and Physician Self-Referral Violations
1003.300 Basis for civil money penalties, assessments, and exclusions.
1003.310 Amount of penalties and assessments.
1003.320 Determinations regarding the amount of penalties and assessments and the period of exclusion.
Subpart D--CMPs and Assessments for Contracting Organization Misconduct
1003.400 Basis for civil money penalties and assessments.
1003.410 Amount of penalties and assessments.
1003.420 Determinations regarding the amount of penalties and assessments.
Subpart E--CMPs and Exclusions for EMTALA Violations
1003.500 Basis for civil money penalties and exclusions.
1003.510 Amount of penalties.
1003.520 Determinations regarding the amount of penalties and the period of exclusion.
Subpart F--CMPs for Section 1140 Violations
1003.600 Basis for civil money penalties.
1003.610 Amount of penalties.
1003.620 Determinations regarding the amount of penalties.
Subpart B--CMPs, Assessments, and Exclusions for False or Fraudulent Claims and Other Similar Misconduct
(a) The OIG may impose a penalty, assessment, and an exclusion against any person who it determines has knowingly presented, or caused to be presented, a claim that was for--
(1) An item or service that the person knew, or should have known, was not provided as claimed, including a claim that was part of a pattern or practice of claims based on codes that the person knew, or should have known, would result in greater payment to the person than the code applicable to the item or service actually provided;
(2) An item or service for which the person knew, or should have known, that the claim was false or fraudulent;
(3) An item or service furnished during a period in which the person was excluded from participation in the Federal health care program to which the claim was presented;
(4) A physician's services (or an item or service) for which the person knew, or should have known, that the individual who furnished (or supervised the furnishing of) the service--
(i) Was not licensed as a physician;
(ii) Was licensed as a physician, but such license had been obtained through a misrepresentation of material fact (including cheating on an examination required for licensing); or
(iii) Represented to the patient at the time the service was furnished that the physician was certified by a medical specialty board when he or she was not so certified; or
(5) An item or service that a person knew, or should have known was not medically necessary, and which is part of a pattern of such claims.
(b) The OIG may impose a penalty; an exclusion; and, where authorized, an assessment against any person who it determines--
(1) Has knowingly presented, or caused to be presented, a request for payment in violation of the terms of--
(i) An agreement to accept payments on the basis of an assignment under section 1842(b)(3)(B)(ii) of the Act;
(ii) An agreement with a State agency or other requirement of a State Medicaid plan not to charge a person for an item or service in excess of the amount permitted to be charged;
(iii) An agreement to be a participating physician or supplier under section 1842(h)(1) of the Act; or
(iv) An agreement in accordance with section 1866(a)(1)(G) of the Act not to charge any person for inpatient hospital services for which payment had been denied or reduced under section 1886(f)(2) of the Act;
(2) Has knowingly given, or caused to be given, to any person, in the case of inpatient hospital services subject to section 1886 of the Act, information that he or she knew, or should have known, was false or misleading and that could reasonably have been expected to influence the decision when to discharge such person or another person from the hospital;
(3) Is an individual who is excluded from participating in a Federal health care program under section 1128 or 1128A of the Act, and who--
(i) Knows, or should know, of the action constituting the basis for the exclusion and retains a direct or indirect ownership or control interest of 5 percent or more in an entity that participates in a Federal health care program or
(ii) Is an officer or a managing employee (as defined in section 1126(b) of the Act) of such entity;
(4) Arranges or contracts (by employment or otherwise) with an individual or entity that the person knows, or should know, is excluded from participation in Federal health care programs for the provision of items or services for which payment may be made under such a program;
(5) Has knowingly and willfully presented, or caused to be presented, a bill or request for payment for items and services furnished to a hospital patient for which payment may be made under a Federal health care program if that bill or request is inconsistent with an arrangement under section 1866(a)(1)(H) of the Act or violates the requirements for such an arrangement;
(6) Orders or prescribes a medical or other item or service during a period in which the person was excluded from a Federal health care program, in the case when the person knows, or should know, that a claim for such medical or other item or service will be made under such a program;
(7) Knowingly makes, or causes to be made, any false statement, omission, or misrepresentation of a material fact in any application, bid, or contract to participate or enroll as a provider of services or a supplier under a Federal health care program, including contracting organizations, and entities that apply to participate as providers of services or suppliers in such contracting organizations;
(8) Knows of an overpayment and does not report and return the overpayment in accordance with section 1128J(d) of the Act;
(9) Knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim for payment for items and services furnished under a Federal health care program; or
(10) Fails to grant timely access to records, documents, and other material or data in any medium (including electronically stored information and any tangible thing), upon reasonable request, to the OIG, for the purpose of audits, investigations, evaluations, or other OIG statutory functions. Such failure to grant timely access means:
(i) Except when the OIG reasonably believes that the requested material is about to be altered or destroyed, the failure to produce or make available for inspection and copying the requested material upon reasonable request or to provide a compelling reason why they cannot be produced, by the deadline specified in the OIG's written request, and
(ii) When the OIG has reason to believe that the requested material is about to be altered or destroyed, the failure to provide access to the requested material at the time the request is made.
(c) The OIG may impose a penalty against any person who it determines, in accordance with this part, is a physician and who executes a document falsely by certifying that a
(d) The OIG may impose a penalty against any person who it determines knowingly certifies, or causes another individual to certify, a material and false statement in a resident assessment pursuant to sections 1819(b)(3)(B) and 1919(b)(3)(B).
(a) Penalties. /1/ (1) Except as provided in this section, the OIG may impose a penalty of not more than
FOOTNOTE 1 The penalty amounts in this section are updated annually, as adjusted in accordance with the Federal Civil Monetary Penalty Inflation Adjustment Act of 1990 (Pub. L. 101-140), as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (section 701 of Pub. L. 114-74). Annually adjusted amounts are published at 45 CFR part 102. END FOOTNOTE
(2) The OIG may impose a penalty of not more than
(3) The OIG may impose a penalty of not more than
(4) For each individual violation of
(5) The OIG may impose a penalty of not more than
(6) The OIG may impose a penalty of not more than
(7) The OIG may impose a penalty of not more than
(8) The OIG may impose a penalty of not more than
(9) The OIG may impose a penalty of not more than
(10) For each false certification in violation of
(i)
(ii) Three times the amount of
(11) For each false certification in violation of
(i)
(ii)
(b) Assessments. (1) Except for violations of
(2) For violations of
(i) The amount claimed for each separately billable item or service provided, furnished, ordered, or prescribed by an excluded individual or entity or
(ii) The
(3) For violations of
In considering the factors listed in
(a) It should be considered a mitigating circumstance if all the items or services or violations included in the action brought under this part were of the same type and occurred within a short period of time, there were few such items or services or violations, and the
(b) Aggravating circumstances include--
(1) The violations were of several types or occurred over a lengthy period of time;
(2) There were many such items or services or violations (or the nature and circumstances indicate a pattern of claims or requests for payment for such items or services or a pattern of violations);
(3) The amount claimed or requested for such items or services, or the amount of the overpayment was
(4) The violation resulted, or could have resulted, in patient harm, premature discharge, or a need for additional services or subsequent hospital admission; or
(5) The amount or type of financial, ownership, or control interest or the degree of responsibility a person has in an entity was substantial with respect to an action brought under
Subpart C--CMPs, Assessments, and Exclusions for Anti-Kickback and Physician Self-Referral Violations
The OIG may impose a penalty, an assessment, and an exclusion against any person who it determines in accordance with this part--
(a) Has not refunded on a timely basis, as defined in
(b) Is a physician or other person who enters into any arrangement or scheme (such as a cross-referral arrangement) that the physician or other person knows, or should know, has a principal purpose of ensuring referrals by the physician to a particular person that, if the physician directly made referrals to such person, would be in violation of the prohibitions of 42 CFR 411.353.
(c) Has knowingly presented, or caused to be presented, a claim that is for a payment that such person knows, or should know, may not be made under 42 CFR 411.353;
(d) Has violated section 1128B(b) of the Act by unlawfully offering, paying, soliciting, or receiving remuneration to induce or in return for the referral of business paid for, in whole or in part, by
(a) Penalties. /2/ The OIG may impose a penalty of not more than--
FOOTNOTE 2 The penalty amounts in this section are adjusted for inflation annually. Adjusted amounts are published at 45 CFR part 102. END FOOTNOTE
(1)
(2)
(3)
(b) Assessments. The OIG may impose an assessment of not more than 3 times--
(1) The amount claimed for each designated health service that is subject to a determination under
(2) The
In considering the factors listed in
(a) It should be considered a mitigating circumstance if all the items, services, or violations included in the action brought under this part were of the same type and occurred within a short period of time; there were few such items, services, or violations; and the
(b) Aggravating circumstances include--
(1) The violations were of several types or occurred over a lengthy period of time;
(2) There were many such items, services, or violations (or the nature and circumstances indicate a pattern of claims or requests for payment for such items or services or a pattern of violations);
(3) The amount claimed or requested for such items or services or the amount of the remuneration was
(4) The violation resulted, or could have resulted, in harm to the patient, a premature discharge, or a need for additional services or subsequent hospital admission.
Subpart D--CMPs and Assessments for Contracting Organization Misconduct
(a) All contracting organizations. The OIG may impose a penalty against any contracting organization that--
(1) Fails substantially to provide an enrollee with medically necessary items and services that are required (under the Act, applicable regulations, or contract with the Department or a State) to be provided to such enrollee and the failure adversely affects (or has the substantial likelihood of adversely affecting) the enrollee;
(2) Imposes a premium on an enrollee in excess of the amounts permitted under the Act;
(3) Engages in any practice that would reasonably be expected to have the effect of denying or discouraging enrollment by beneficiaries whose medical condition or history indicates a need for substantial future medical services, except as permitted by the Act;
(4) Misrepresents or falsifies information furnished to a person under sections 1857, 1860D-12, 1876, or 1903(m) of the Act;
(5) Misrepresents or falsifies information furnished to the Secretary or a State, as applicable, under sections 1857, 1860D-12, 1876, or 1903(m) of the Act;
(6) Fails to comply with the requirements of 42 CFR 417.479(d) through (i) for
(7) Fails to comply with applicable requirements of the Act regarding prompt payment of claims.
(b) All Medicare contracting organizations. The OIG may impose a penalty against any contracting organization with a contract under section 1857, 1860D-12, or 1876 of the Act that--
(1) Acts to expel or to refuse to reenroll a beneficiary in violation of the Act; or
(2) Employs or contracts with a person excluded, under section 1128 or 1128A of the Act, from participation in
(c)
(1) Enrolls an individual without the individual's (or his or her designee's) prior consent, except as provided under subparagraph (C) or (D) of section 1860D-1(b)(1) of the Act;
(2) Transfers an enrollee from one plan to another without the individual's (or his or her designee's) prior consent;
(3) Transfers an enrollee solely for the purpose of earning a commission;
(4) Fails to comply with marketing restrictions described in subsection (h) or (j) of section 1851 of the Act or applicable implementing regulations or guidance; or
(5) Employs or contracts with any person who engages in the conduct described in paragraphs (a) through (c) of this section.
(d)
(e)
(a) Penalties. /3/ (1) The OIG may impose a penalty of up to
FOOTNOTE 3 The penalty amounts in this section are adjusted for inflation annually. Adjusted amounts are published at 45 CFR part 102. END FOOTNOTE
(2) The OIG may impose a penalty of up to
(b) Additional penalties. In addition to the penalties described in paragraph (a) of this section, the OIG may impose--
(1) An additional penalty equal to double the amount of excess premium charged by the contracting organization for each individual violation of
(2) An additional
FOOTNOTE 4 This penalty amount is adjusted for inflation annually. Adjusted amounts are published at 45 CFR part 102. END FOOTNOTE
(c) Assessments. The OIG may impose an assessment against a contracting organization with a contract under section 1857 or 1860D-12 of the Act (
(d) The OIG may impose a penalty or, when applicable, an assessment, against a contracting organization with a contract under section 1857 or 1860D-12 of the Act (
In considering the factors listed in
(a) Such violations were of several types or occurred over a lengthy period of time;
(b) There were many such violations (or the nature and circumstances indicate a pattern of incidents);
(c) The amount of money, remuneration, damages, or tainted claims involved in the violation was
(d) Patient harm, premature discharge, or a need for additional services or subsequent hospital admission resulted, or could have resulted, from the incident; and
(e) The contracting organization knowingly or routinely engaged in any prohibited practice that acted as an inducement to reduce or limit medically necessary services provided with respect to a specific enrollee in the organization.
Subpart E--CMPs and Exclusions for EMTALA Violations
(a) The OIG may impose a penalty against any participating hospital with an emergency department or specialized capabilities or facilities for each negligent violation of section 1867 of the Act or
(b) The OIG may impose a penalty against any responsible physician for each--
(1) Negligent violation of section 1867 of the Act;
(2) Certification signed under section 1867(c)(l)(A) of the Act if the physician knew, or should have known, that the benefits of transfer to another facility did not outweigh the risks of such a transfer; or
(3) Misrepresentation made concerning an individual's condition or other information, including a hospital's obligations under section 1867 of the Act.
(c) The OIG may, in lieu of or in addition to any penalty available under this subpart, exclude any responsible physician who commits a gross and flagrant, or repeated, violation of this subpart from participation in Federal health care programs.
(d) For purposes of this subpart, a "gross and flagrant violation" is a violation that presents an imminent danger to the health, safety, or well-being of the individual who seeks examination and treatment or places that individual unnecessarily in a high-risk situation.
The OIG may impose /5/ --
FOOTNOTE 5 The penalty amounts in this section are adjusted for inflation annually. Adjusted amounts are published at 45 CFR part 102. END FOOTNOTE
(a) Against each participating hospital, a penalty of not more than
(b) Against each responsible physician, a penalty of not more than
In considering the factors listed in
(a) It should be considered a mitigating circumstance if a hospital took appropriate and timely corrective action in response to the violation. For purposes of this subpart, corrective action must be completed prior to CMS initiating an investigation of the hospital for violations of section 1867 of the Act and must include disclosing the violation to CMS prior to CMS receiving a complaint regarding the violation from another source or otherwise learning of the violation.
(b) Aggravating circumstances include:
(1) Requesting proof of insurance, prior authorization, or a monetary payment prior to appropriately screening or initiating stabilizing treatment for an emergency medical condition, or requesting a monetary payment prior to stabilizing an emergency medical condition;
(2) Patient harm, or risk of patient harm, resulted from the incident; or
(3) The individual presented to the hospital with a request for examination or treatment of a medical condition that was an emergency medical condition, as defined by
Subpart F--CMPs for Section 1140 Violations
(a) The OIG may impose a penalty against any person who it determines in accordance with this part has used the words, letters, symbols, or emblems as defined in paragraph (b) of this section in such a manner that such person knew, or should have known, would convey, or in a manner that reasonably could be interpreted or construed as conveying, the false impression that an advertisement, a solicitation, or other item was authorized, approved, or endorsed by the Department or CMS or that such person or organization has some connection with or authorization from the Department or CMS.
(b) Civil money penalties may be imposed, regardless of the use of a disclaimer of affiliation with the
(1) The words "
(2) The letters "DHHS," "HHS," or "CMS," or any other combination or variation of such letters; or
(3) A symbol or an emblem of the Department or CMS (including the design of, or a reasonable facsimile of the design of, the
(c) Civil money penalties will not be imposed against any agency or instrumentality of a State, or political subdivision of the State, that uses any symbol or emblem or any words or letters that specifically identify that agency or instrumentality of the State or political subdivision.
(a) The OIG may impose a penalty of not more than /6/ --
FOOTNOTE 6 The penalty amounts in this section are adjusted for inflation annually. Adjusted amounts are published at 45 CFR part 102. END FOOTNOTE
(1)
(2)
(3)
(b) For purposes of this paragraph, a violation is defined as--
(1) In the case of a direct mailing solicitation or advertisement, each separate piece of mail that contains one or more words, letters, symbols, or emblems related to a determination under
(2) In the case of a printed solicitation or advertisement, each reproduction, reprinting, or distribution of such item related to a determination under
(3) In the case of a broadcast or telecast, each airing of a single commercial or solicitation related to a determination under
(4) In the case of an electronic communication, each dissemination, viewing, or accessing of the electronic communication that contains one or more words, letters, symbols, or emblems related to a determination under
(5) In the case of a Web page accessed by a computer or other electronic means, each instance in which the Web page was viewed or accessed and that Web page contains one or more words, letters, symbols, or emblems related to a determination under
(6) In the case of a telemarketing solicitation, each individual unsolicited telephone call regarding an item or service under
(a) In considering the factors listed in
(1) The nature and objective of the advertisement, solicitation, or other communication and the degree to which it had the capacity to deceive members of the public;
(2) The frequency and scope of the violation and whether a specific segment of the population was targeted; and
(3) The prior history of the individual, organization, or entity in its willingness or refusal to comply with a formal or informal request to correct violations.
(b) The use of a disclaimer of affiliation with the
Subpart G--[Reserved]
9. Add reserved subpart G.
10. Add subparts H through M to read as follows:
Subpart H--CMPs for Adverse Action Reporting and Disclosure Violations
Sec.
1003.800 Basis for civil money penalties.
1003.810 Amount of penalties.
1003.820 Determinations regarding the amount of penalties.
Subpart I--CMPs for Select Agent Program Violations
1003.900 Basis for civil money penalties.
1003.910 Amount of penalties.
1003.920 Determinations regarding the amount of penalties.
Subpart J--CMPs, Assessments, and Exclusions for Beneficiary Inducement Violations
1003.1000 Basis for civil money penalties, assessments, and exclusions.
1003.1010 Amount of penalties and assessments.
1003.1020 Determinations regarding the amount of penalties and assessments and the period of exclusion.
Subpart K--CMPs for the Sale of Medicare Supplemental Policies
1003.1100 Basis for civil money penalties.
1003.1110 Amount of penalties.
1003.1120 Determinations regarding the amount of penalties.
Subpart L--CMPs for Drug Price Reporting
1003.1200 Basis for civil money penalties.
1003.1210 Amount of penalties.
1003.1220 Determinations regarding the amount of penalties.
Subpart M--CMPs for Notifying a Skilled Nursing Facility, Nursing Facility,
1003.1300 Basis for civil money penalties.
1003.1310 Amount of penalties.
1003.1320 Determinations regarding the amount of penalties.
Subpart H--CMPs for Adverse Action Reporting and Disclosure Violations
The OIG may impose a penalty against any person (including an insurance company) who it determines--
(a) Fails to report information concerning--
(1) A payment made under an insurance policy, self-insurance, or otherwise for the benefit of a physician, dentist, or other health care practitioner in settlement of, or in satisfaction in whole or in part of, a medical malpractice claim or action or a judgment against such a physician, dentist, or other practitioner in accordance with section 421 of Public Law 99-660 (42 U.S.C. 11131) and as required by regulations at 45 CFR part 60 or
(2) An adverse action required to be reported under section 1128E, as established by section 221 of Public Law 104-191.
(b) Improperly discloses, uses, or permits access to information reported in accordance with Part B of Title IV of Public Law 99-660 (42 U.S.C. 11137) or regulations at 45 CFR part 60. (The disclosure of information reported in accordance with Part B of Title IV in response to a subpoena or a discovery request is considered an improper disclosure in violation of section 427 of Public Law 99-660. However, disclosure or release by an entity of original documents or underlying records from which the reported information is obtained or derived is not considered an improper disclosure in violation of section 427 of Public Law 99-660.)
The OIG may impose a penalty of not more than /7/ --
FOOTNOTE 7 The penalty amounts in this section are adjusted for inflation annually. Adjusted amounts are published at 45 CFR part 102. END FOOTNOTE
(a)
(b)
In determining the amount of any penalty in accordance with this subpart, the OIG will consider the factors listed in
Subpart I--CMPs for Select Agent Program Violations
The OIG may impose a penalty against any person who it determines in accordance with this part is involved in the possession or use in
For each individual violation of section 351A(b) or (c) of the Public Health Service Act or 42 CFR part 73, the OIG may impose a penalty of not more than
FOOTNOTE 8 The penalty amounts in this section are adjusted for inflation annually. Adjusted amounts are published at 45 CFR part 102. END FOOTNOTE
In considering the factors listed in
(a) The Responsible Official participated in or knew, or should have known, of the violation;
(b) The violation was a contributing factor to an unauthorized individual's access to or possession of a select agent or toxin, an individual's exposure to a select agent or toxin, or the unauthorized removal of a select agent or toxin from the person's physical location as identified on the person's certificate of registration; or
(c) The person previously received an observation, finding, or other statement of deficiency from the Department or the
Subpart J--CMPs, Assessments, and Exclusions for Beneficiary Inducement Violations
(a) The OIG may impose a penalty, an assessment, and an exclusion against any person who it determines offers or transfers remuneration (as defined in
(b) The OIG may impose a penalty against any person who it determines offered any financial or other incentive for an individual entitled to benefits under
The OIG may impose a penalty of not more than /9/ --
FOOTNOTE 9 The penalty amounts in this section are adjusted for inflation annually. Adjusted amounts are published at 45 CFR part 102. END FOOTNOTE
(a)
(b)
In determining the amount of any penalty or assessment or the period of exclusion under this subpart, the OIG will consider the factors listed in
Subpart K--CMPs for the Sale of Medicare Supplemental Policies
The OIG may impose a penalty against any person who--
(a) Knowingly and willfully makes or causes to be made or induces or seeks to induce the making of any false statement or representation of a material fact with respect to--
(1) The compliance of any policy with the standards and requirements for
(2) The use of the emblem designed by the Secretary under section 1882(a) of the Act for use as an indication that a policy has received the Secretary's certification;
(b) Falsely assumes or pretends to be acting, or misrepresents in any way that he or she is acting, under the authority of or in association with
(c) Knowingly, directly, or through his or her agent, mails or causes to be mailed any matter for the advertising, solicitation, or offer for sale of a
(d) Issues or sells to any individual entitled to benefits under Part A or enrolled under Part B of
(1) A health insurance policy with knowledge that the policy duplicates health benefits to which the individual is otherwise entitled under
(2) A health insurance policy (other than a
(3) In the case of an individual not electing a Part C plan, a
(4) In the case of an individual electing a Part C plan, a
(e) Issues or sells a health insurance policy (other than a policy described in section 1882(d)(3)(A)(vi)(III)) to any individual entitled to benefits under Medicare Part A or enrolled under Medicare Part B who is applying for a health insurance policy and fails to furnish the appropriate disclosure statement described in section 1882(d)(3)(A)(vii); or
(f) Issues or sells a
The OIG may impose a penalty of not more than /10/ --
FOOTNOTE 10 The penalty amounts in this section are adjusted for inflation annually. Adjusted amounts are published at 45 CFR part 102. END FOOTNOTE
(a)
(b)
(c)
In determining the amount of the penalty in accordance with this subpart, the OIG will consider the factors listed in
Subpart L--CMPs for Drug Price Reporting
The OIG may impose a penalty against--
(a) Any wholesaler, manufacturer, or direct seller of a covered outpatient drug that--
(1) Refuses a request for information by, or
2) Knowingly provides false information to, the Secretary about charges or prices in connection with a survey being conducted pursuant to section 1927(b)(3)(B) of the Act; and
(b) Any manufacturer with an agreement under section 1927 of the Act that--
(1) Fails to provide any information required by section 1927(b)(3)(A) of the Act by the deadlines specified therein, or
(2) Knowingly provides any item information required by section 1927(b)(3)(A) or (B) of the Act that is false.
The OIG may impose a penalty of not more than /11/ --
FOOTNOTE 11 The penalty amounts in this section are adjusted for inflation annually. Adjusted amounts are published at 45 CFR part 102. END FOOTNOTE
(a)
(b)
In determining the amount of the penalty in accordance with this subpart, the OIG will consider the factors listed in
Subpart M--CMPs for Notifying a Skilled Nursing Facility, Nursing Facility,
The OIG may impose a penalty against any individual who notifies, or causes to be notified, a skilled nursing facility, nursing facility, home health agency, a community care setting, of the time or date on which a survey pursuant to sections 1819(g)(2)(A), 1919(g)(2)(A), 1891(c)(1), or 1929(i) of the Act is scheduled to be conducted.
The OIG may impose a penalty of not more than
FOOTNOTE 12 This penalty amount is adjusted for inflation annually. Adjusted amounts are published at 45 CFR part 102. END FOOTNOTE
In determining the amount of the penalty in accordance with this subpart, the OIG will consider the factors listed in
Subpart N--[Reserved]
11. Add reserved subpart N.
12. Add subpart O to read as follows:
Subpart O--Procedures for the Imposition of CMPs, Assessments, and Exclusions
Sec.
1003.1500 Notice of proposed determination.
1003.1510 Failure to request a hearing.
1003.1520 Collateral estoppel.
1003.1530 Settlement.
1003.1540 Judicial review.
1003.1550 Collection of penalties and assessments.
1003.1560 Notice to other agencies.
1003.1570 Limitations.
1003.1580 Statistical sampling.
1003.1590 Effect of exclusion.
1003.1600 Reinstatement.
Subpart O--Procedures for the Imposition of CMPs, Assessments, and Exclusions
(a) If the OIG proposes a penalty and, when applicable, an assessment, or proposes to exclude a respondent from participation in all Federal health care programs, as applicable, in accordance with this part, the OIG must serve on the respondent, in any manner authorized by Rule 4 of the Federal Rules of Civil Procedure, written notice of the OIG's intent to impose a penalty, an assessment, and an exclusion, as applicable. The notice will include--
(1) Reference to the statutory basis for the penalty, assessment, and exclusion;
(2) A description of the violation for which the penalty, assessment, and exclusion are proposed (except in cases in which the OIG is relying upon statistical sampling in accordance with
(3) The reason why such violation subjects the respondent to a penalty, an assessment, and an exclusion,
(4) The amount of the proposed penalty and assessment, and the length of the period of proposed exclusion (where applicable);
(5) Any factors and circumstances described in this part that were considered when determining the amount of the proposed penalty and assessment and the length of the period of exclusion;
(6) Instructions for responding to the notice, including--
(i) A specific statement of the respondent's right to a hearing and
(ii) A statement that failure to request a hearing within 60 days permits the imposition of the proposed penalty, assessment, and exclusion without right of appeal; and
(7) In the case of a notice sent to a respondent who has an agreement under section 1866 of the Act, the notice also indicates that the imposition of an exclusion may result in the termination of the respondent's provider agreement in accordance with section 1866(b)(2)(C) of the Act.
(b) Any person upon whom the OIG has proposed the imposition of a penalty, an assessment, or an exclusion may appeal such proposed penalty, assessment, or exclusion to the Departmental Appeals Board in accordance with 42 CFR 1005.2. The provisions of 42 CFR part 1005 govern such appeals.
(c) If the respondent fails, within the time period permitted, to exercise his or her right to a hearing under this section, any exclusion, penalty, or assessment becomes final.
If the respondent does not request a hearing within 60 days after the notice prescribed by
(a) Where a final determination pertaining to the respondent's liability for acts that violate this part has been rendered in any proceeding in which the respondent was a party and had an opportunity to be heard, the respondent shall be bound by such determination in any proceeding under this part.
(b) In a proceeding under this part, a person is estopped from denying the essential elements of the criminal offense if the proceeding--
(1) Is against a person who has been convicted (whether upon a verdict after trial or upon a plea of guilty or nolo contendere) of a Federal crime charging fraud or false statements, and
(2) Involves the same transactions as in the criminal action.
The OIG has exclusive authority to settle any issues or case without consent of the ALJ.
(a) Section 1128A(e) of the Act authorizes judicial review of a penalty, an assessment, or an exclusion that has become final. The only matters subject to judicial review are those that the respondent raised pursuant to 42 CFR 1005.21, unless the court finds that extraordinary circumstances existed that prevented the respondent from raising the issue in the underlying administrative appeal.
(b) A respondent must exhaust all administrative appeal procedures established by the Secretary or required by law before a respondent may bring an action in Federal court, as provided in section 1128A(e) of the Act, concerning any penalty, assessment, or exclusion imposed pursuant to this part.
(c) Administrative remedies are exhausted when a decision becomes final in accordance with 42 CFR 1005.21(j).
(a) Once a determination by the Secretary has become final, collection of any penalty and assessment will be the responsibility of CMS, except in the case of the Maternal and Child Health Services Block Grant Program, in which the collection will be the responsibility of the
(b) A penalty or an assessment imposed under this part may be compromised by the OIG and may be recovered in a civil action brought in the United States district court for the district where the claim was presented or where the respondent resides.
(c) The amount of penalty or assessment, when finally determined, or the amount agreed upon in compromise, may be deducted from any sum then or later owing by the
(d) Matters that were raised, or that could have been raised, in a hearing before an ALJ or in an appeal under section 1128A(e) of the Act may not be raised as a defense in a civil action by
(a) Whenever a penalty, an assessment, or an exclusion becomes final, the following organizations and entities will be notified about such action and the reasons for it: The appropriate State or local medical or professional association; the appropriate quality improvement organization; as appropriate, the State agency that administers each State health care program; the appropriate
(b) When the OIG proposes to exclude a nursing facility under this part, the OIG will, at the same time the facility is notified, notify the appropriate State licensing authority, the
No action under this part will be entertained unless commenced, in accordance with
(a) In meeting the burden of proof in 42 CFR 1005.15, the OIG may introduce the results of a statistical sampling study as evidence of the number and amount of claims and/or requests for payment, as described in this part, that were presented, or caused to be presented, by the respondent. Such a statistical sampling study, if based upon an appropriate sampling and computed by valid statistical methods, shall constitute prima facie evidence of the number and amount of claims or requests for payment, as described in this part.
(b) Once the OIG has made a prima facie case, as described in paragraph (a) of this section, the burden of production shall shift to the respondent to produce evidence reasonably calculated to rebut the findings of the statistical sampling study. The OIG will then be given the opportunity to rebut this evidence.
The effect of an exclusion will be as set forth in 42 CFR 1001.1901.
A person who has been excluded in accordance with this part may apply for reinstatement at the end of the period of exclusion. The OIG will consider any request for reinstatement in accordance with the provisions of 42 CFR 1001.3001 through 1001.3004.
PART 1005--[AMENDED]
13. The authority citation for part 1005 continues to read as follows:
Authority: 42 U.S.C. 405(a), 405(b), 1302, 1320a-7, 1320a-7a and 1320c-5.
14. Section 1005.4 is amended by republishing paragraph (c) introductory text and revising paragraphs (c)(5) and (6) to read as follows:
* * * * *
(c) The ALJ does not have the authority to--
* * * * *
(5) Review the exercise of discretion by the OIG to exclude an individual or entity under section 1128(b) of the Act or under part 1003 of this chapter, or determine the scope or effect of the exclusion;
(6) Set a period of exclusion at zero, or reduce a period of exclusion to zero, in any case in which the ALJ finds that an individual or entity committed an act described in section 1128(b) of the Act or under part 1003 of this chapter; or
* * * * *
Dated:
Inspector General.
Approved:
Secretary.
Note:
This document was received by the
[FR Doc. 2016-28293 Filed 12-6-16;
BILLING CODE 4152-01-P
Notice of Regulatory Waiver Requests Granted for the Third Quarter of Calendar Year 2016
Preretirees ‘Terrified’ Of Future Health Care Costs, Nationwide Study Finds
Advisor News
- Reynolds signs temporary tax hike
- Gov. Kim Reynolds signs temporary tax hike to address Iowa Medicaid shortfall
- Reynolds signs temporary tax hike to address Iowa Medicaid shortfall
- Temporary tax hike to fill Iowa Medicaid gap heads to governor’s desk
- Gov. Kim Reynolds signs health insurance premium tax increase into law
More Advisor NewsAnnuity News
- Corebridge, Equitable merge to create potential new annuity sales king
- LIMRA: Final retail annuity sales total $464.1 billion in 2025
- How annuities can enhance retirement income for post-pension clients
- We can help find a loved one’s life insurance policy
- 2025: A record-breaking year for annuity sales via banks and BDs
More Annuity NewsHealth/Employee Benefits News
- Northwestern Medicine steps up support for Crystal Lake community health clinic as insurance costs soar
- Why health insurance shouldn’t stand between you and colon cancer screening
- Amesbury FD receives grant for cardiac screenings
- SOUTHERN MN REPUBLICAN VOICES: Health care, American style
- Reynolds signs temporary tax hike
More Health/Employee Benefits NewsLife Insurance News
- Corebridge, Equitable Merger Creates $1.5tr Platfrom
- AM Best Removes from Under Review with Positive Implications and Affirms Credit Ratings of Sompo Seguros Mexico S.A. de C.V.
- Corebridge, Equitable merge to create potential new annuity sales king
- Aflac adds new long-term care rider
- AM Best Affirms Credit Ratings of Nan Shan General Insurance Co., Ltd.
More Life Insurance News