2022-05648. Annual Civil Monetary Penalties Inflation Adjustment

AGENCY:

Office of the Assistant Secretary for Financial Resources, Department of Health and Human Services (HHS).

ACTION:

Final rule.

SUMMARY:

The Department of Health and Human Services is updating its regulations to reflect required annual inflation-related increases to the civil monetary penalty amounts in its regulations, under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015; adding references to new penalty authorities; and making technical changes to correct errors in the regulation.

DATES:

Effective date: This final rule is effective March 17, 2022.

Applicability date: The adjusted civil monetary penalty amounts apply to penalties assessed on March 17, 2022, r if the violation occurred on or after November 2, 2015.

FOR FURTHER INFORMATION CONTACT:

Katrina Brisbon, Acting Deputy Assistant Secretary, Office of Acquisitions, Office of the Assistant Secretary for Financial Resources, Room 536-H, Hubert Humphrey Building, 200 Independence Avenue SW, Washington, DC 20201; [phone].

SUPPLEMENTARY INFORMATION:

I. Background

The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (section 701 of Pub. L. 114-74) (the “2015 Act”) amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410, 104 Stat. 890 (1990)), which is intended to improve the effectiveness of civil monetary penalties (CMPs) and to maintain the deterrent effect of such penalties, requires agencies to adjust the CMPs for inflation annually.

The Department of Health and Human Services (HHS) lists the CMP authorities and the amounts administered by all of its agencies in tabular form in 45 CFR 102.3, which was issued in an interim final rule published in the September 6, 2016, Federal Register (81 FR 61538). Annual adjustments were subsequently published on February 3, 2017 (82 FR 9175), October 11, 2018 (83 FR 51369), November 5, 2019 (84 FR 59549), January 17, 2020 (85 FR 2869), and November 15, 2021 (86 FR 62928).

II. Calculation of Annual Inflation Adjustment

The annual inflation adjustment for each applicable CMP is determined using the percent increase in the Consumer Price Index for all Urban Consumers (CPI-U) for the month of October of the year in which the amount of each CMP was most recently established or modified. In the December 15, 2021, Office of Management and Budget (OMB) Memorandum for the Heads of Executive Agencies and Departments, M-22-07, “Implementation of Penalty Inflation Adjustments for 2022, Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015,” OMB published the multiplier for the required annual adjustment. The cost-of-living adjustment multiplier for 2022, based on the CPI-U for the month of October 2021, not seasonally adjusted, is 1.06222. The multiplier is applied to each applicable penalty amount that was updated and published for fiscal year (FY) 2021 and is rounded to the nearest dollar.

III. Other Revisions

In addition to the inflation adjustments for 2022, this final rule updates the table in 45 CFR 102.3 to add references to new, applicable civil money penalty authorities that were established or implemented since the publication of the November 15, 2021 update and that are being updated in this rule. The rule also corrects several technical errors to regulatory citations in the table and updates descriptions for clarification and accuracy. The following technical errors were identified and are corrected in the table at 45 CFR 102.3:

• The citation to, and description of, 42 U.S.C. 299c-3(d) are revised for accuracy.
• The regulatory reference of 42 CFR 1003.210(a)(5) implementing 42 U.S.C. 1395cc(g) which was inadvertently omitted from the regulation and is added.
• The description of the CMP at 42 U.S.C. 1320a-7a(o) is revised for accuracy.

• The regulatory reference to 45 CFR 155.206(i) ^[1] implementing 42 U.S.C. 18041(c)(2) ^[2] which was inadvertently omitted from the regulation is added. Additionally, the amount for this CMP was not included in the 2021 inflation adjustment rule. 86 FR 62928, 62943 (Nov. 15, 2021). Thus, we are updating the inflation amount at this time.

• The first description tied to 42 U.S.C. 1395mm(i)(6)(B)(i) is revised from “is such plan” to “if such plan”.
• The regulatory reference to 85 FR 71142 (Nov. 6, 2020) implementing CARES Act, Pub. L. 116-136, section 3202(b)(2), is revised to read 45 CFR 182.70.

++ The 2022 adjusted amount is calculated by applying the 2021 multiplier to 1.06222 percent and this adjusted amount is reflected in the table of the regulation at 45 CFR 102.3.

IV. Statutory and Executive Order Reviews and Waiver of Proposed Rulemaking

The 2015 Act requires Federal agencies to publish annual penalty inflation adjustments notwithstanding section 553 of the Administrative Procedure Act (APA). Section 4(a) of the 2015 Act directs Federal agencies to publish annual adjustments no later than January 15th of each year thereafter. In accordance with section 553 of the APA, most rules are subject to notice and comment and are effective no earlier than 30 days after publication in the Federal Register . However, section 4(b)(2) of the 2015 Act provides that each agency shall make the annual inflation adjustments “notwithstanding section 553” of the APA. According to OMB's Memorandum M-21-10, the phrase “notwithstanding section 553” in section 4(b)(2) of the 2015 Act means that “the public procedure the APA generally requires (that is, notice, an opportunity for comment, and a delay in effective date) is not required for agencies to issue regulations implementing the annual adjustment.”

Consistent with the language of the 2015 Act and OMB's implementation guidance, the inflation adjustments set out in this rule are not subject to notice and an opportunity for public comment and will be effective immediately upon publication. Additionally, HHS finds that notice and comment procedures would be impracticable and unnecessary under the APA for making the statutorily required inflation updates to newly established penalty amounts and for the ministerial and technical changes in this rule. In addition, HHS is waiving notice and comment for the non-substantive technical corrections set out in this final rule. HHS finds good cause for issuing these changes as a final rule without prior notice and comment because these changes only update the regulation to add the new CMP authorities that will be adjusted in accordance with the 2015 Act which were implemented since the last update.

Pursuant to OMB Memorandum M-21-10, HHS has determined that the annual inflation adjustment to the civil monetary penalties in its regulations does not trigger any requirements under procedural statutes and Executive Orders that govern rulemaking procedures.

V. Effective and Applicability Dates

This rule is effective on the date specified in the DATES section of this final rule. The adjusted civil monetary penalty amounts apply to penalties assessed on or after date specified in the DATES section of this final rule, if the violation occurred on or after November 2, 2015. If the violation occurred before November 2, 2015, or a penalty was assessed before September 6, 2016, the pre-adjustment civil penalty amounts in effect before September 6, 2016, will apply.

List of Subjects in 45 CFR Part 102

• Administrative practice and procedure
• Penalties

Accordingly, the Department of Health and Human Services amends 45 CFR part 102 as follows:

PART 102—ADJUSTMENT OF CIVIL MONETARY PENALTIES FOR INFLATION

1. The authority citation for part 102 is revised to read as follows:

Authority: Pub. L. 101-410, Sec. 701 of Pub. L. 114-74, 31 U.S.C. 3801-3812.

2. Amend §  102.3 by revising table 1 to read as follows:

§ 102.3

Penalty adjustment and table.

* * * * *

Xavier Becerra,

Secretary, Department of Health and Human Services.

Footnotes

1.  The Department recently proposed a technical correction to 45 CFR 155.206(i) to add language that would cross-reference to the authority to implement annual inflation-related increases to CMPs pursuant to the 2015 Act. See Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2023; Proposed Rule, 87 FR 584 at 640-641, 721 (Jan. 5, 2022). To date, no CMPs have been imposed under this authority, but any that are would reflect the current inflationary adjusted amount as required by the 2015 Act and would be calculated in accordance with applicable OMB guidance to all Executive Departments on the implementation of the 2015 Act.

2.  See, e.g., the Patient Protection and Affordable Care Act; Exchange and Insurance Market Standards for 2015 and Beyond; Final Rule, 79 FR 30239 at 30262-30270 (May 27, 2014).