[Federal Register Volume 63, Number 239 (Monday, December 14, 1998)]
[Rules and Regulations]
[Pages 68687-68697]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-33010]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
42 CFR Parts 400, and 402
[HCFA-6135-FC]
Medicare and Medicaid Program; Civil Money Penalties,
Assessments, Exclusions, and Related Appeals Procedures
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Final rule with comment period.
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SUMMARY: This rule establishes procedures for imposing civil money
penalties, assessments, and exclusions for certain violations of the
Medicare and Medicaid programs. The regulations also provide for
hearings and appeals when those penalties, assessments, and exclusions
are imposed. These procedures are based on the procedures that the
Office of the Inspector General has promulgated for the civil money
penalties, assessments, and exclusions. These regulations are designed
to protect program beneficiaries from unfit health care practitioners
and to otherwise improve antifraud provisions under the Medicare and
Medicaid Acts.
DATES: These regulations are effective on January 13, 1999. Comments
must be received by February 12, 1999.
FOR FURTHER INFORMATION CONTACT: Joel Cohen, (410) 786-3349
ADDRESSES: Mail written comments (1 original and 3 copies) to the
following address: Health Care Financing Administration, Department of
Health and Human Services, Attention: HCFA-6135-FC, PO Box 26676,
Baltimore, MD 21207-0519.
If you prefer, you may deliver your written comments (1 original
and 3 copies) to one of the following addresses:
Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW.,
Washington, DC 20201, or
Room C5-09-26, 7500 Security Boulevard, Baltimore, MD 21244-1850
Comments may also be submitted electronically to the following e-
mail address: [email protected] For e-mail comment procedures, see
the beginning of SUPPLEMENTARY INFORMATION. For further information on
ordering copies of the Federal Register containing this document and on
electronic access, see the beginning of SUPPLEMENTARY INFORMATION.
Electronically submitted comments will be available for public
inspection at the Independence Avenue address below.
SUPPLEMENTARY INFORMATION:
E-Mail, Comments, Procedures, Availability of Copies, and
Electronic Access
E-mail comments must include the full name and address of the
sender and must be submitted to the referenced address to be
considered. All comments must be incorporated in the e-mail message
because we may not be able to access attachments.
Because of staffing and resource limitations, we cannot accept
comments by facsimile (FAX) transmission. In commenting, please refer
to file code HCFA-0047-P and the specific section or sections of the
proposed rule. Both electronic and written comments received by the
time and date indicated above will be available for public inspection
as they are received, generally beginning approximately 3 weeks after
publication of a document, in Room 309-G of the Department's offices at
200 Independence Avenue, SW., Washington, DC, on Monday through Friday
of each week from 8:30 a.m. to 5 p.m. (phone: (202) 690-7890).
Electronic and legible written comments will also be posted, along with
this proposed rule, at the following web site: http://aspe.os.dhhs.gov/
admnsimp/.
Copies: To order copies of the Federal Register containing this
document, send your request to: New Orders, Superintendent of
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I. Background
In 1981, the Congress added section 1128A to the Social Security
Act (the Act) (section 2105 of Pub.L. 97-35) to authorize the Secretary
of Health and Human Services to impose civil money penalties and
assessments on certain health care facilities, health care
practitioners, and other suppliers under the Medicare and Medicaid
programs. Civil money penalties and assessments provide an alternative
enforcement tool for agencies to establish compliance with legal and
program standards and are in addition to potential criminal
proceedings.
Since 1981, the Congress has significantly increased both the
number and the types of circumstances under which the Secretary may
impose civil money penalties. Some of the civil money penalty
authorities address fraud, misrepresentation, or falsification while
others address noncompliance with programmatic or regulations
requirements. The Secretary has delegated the authority for these
provisions to either the Office of Inspector General (OIG) or HCFA (58
FR 52967, October 20, 1994). Under this delegation of authority, the
OIG has the authority to impose civil money penalties and prosecute
cases involving civil money penalties and assessments that were
delegated to HCFA if HCFA and the OIG jointly determine it to be
[[Page 68688]]
in the interest of economy, efficiency, or effective coordination of
activities.
On October 31, 1994, the Social Security Amendments of 1994 (Pub.
L. 103-432) were enacted. This law repealed several statutory
provisions providing for civil money penalties and established
additional civil money penalty provisions. On August 21, 1996, the
Health Insurance Portability and Accountability Act of 1996 (Pub. L.
104-191) was enacted. This law provides for higher maximum civil money
penalties ($10,000 instead of $2,000) for certain of the violations and
also increased the assessments that can be imposed for those
violations.
Most of the specific statutory provisions authorizing civil money
penalties also permit the Secretary of Health and Human Services (or
his or her designee) to impose an assessment in addition to the civil
money penalty. An assessment is an additional monetary payment in lieu
of damages sustained by HHS or a State agency. The maximum amount of
the assessment varies according to the civil money penalty (from $1,000
to $25,000) and is not more than three times the amount claimed for
each service upon which the civil money penalty was based. Also, for
many statutory violations, the Secretary of Health and Human Services
or his or her designee may exclude the individual or entity violating
the statute from participating in a Federal health care program for
certain specific periods of time. A Federal health care program is
defined in section 1128B of the Act (42 U.S.C. 1320(a)-7b) as ``any
plan or program that provides health benefits, whether directly,
through insurance, or otherwise, which is funded directly, in whole or
in part, by the United States Government (other than the health
insurance program under chapter 89 of title 5, United States Code); or
* * * any State health care program as defined in section 1128(h) of
the Social Security Act.''
The regulations currently governing civil money penalties,
assessments, and civil money penalty-related exclusions are contained
in 42 CFR part 1003. Procedures for hearings and appeals of civil money
penalties, assessments, and exclusions are in 42 CFR part 1005.
II. Regulations Revisions
This final rule with comment period duplicates in substance 42 CFR
part 1003 for most of the civil money penalties and related assessments
that have been delegated to HCFA. Other rules concerning civil money
penalties and assessment authorities that have been delegated to HCFA,
such as those imposed for violations by long term care facilities and
clinical laboratories, have already been codified in the Code of
Federal Regulations. Civil money penalties and assessments that were
added by the Balanced Budget Act of 1997 (BBA), Pub. L. 105-33 (August
5, 1997) and that are delegated to HCFA in the future will be added to
the Code of Federal Regulations through another Federal Register
document, as will the specific rules concerning the exclusions that
HCFA is authorized to impose.
Although we are not addressing the civil money penalties and
assessments added by the BBA in this regulation, it is important to
recognize the impact of the BBA on certain provisions of this
regulation. Section 4507 of the BBA permits a physician or practitioner
to enter into private contracts with Medicare beneficiaries for
services furnished on or after January 1, 1998. If a physician or
practitioner enters into a private contract, he or she has ``opted
out'' of the Medicare program for two years for all covered items or
services furnished to Medicare beneficiaries. A beneficiary who enters
into a private contract agrees to waive the right to Medicare payment
for services rendered by the physician or practitioner and to pay the
physician or practitioner without regard to any limits that would
otherwise apply to what the physician or practitioner could charge. We
are clarifying here that physicians and practitioners who enter into
valid private contracts will not be subject to civil money penalties
and assessments under this regulation unless they knowingly and
willfully violate the terms of the private agreement. In particular,
physicians and practitioners will not be subject to penalties and
assessments pursuant to section 1834(c)(4) of the Social Security Act,
which provides for sanctions against physicians who charge in excess of
the limiting charge, or section 1848(g)(4) of the Act, which imposes
sanctions on physicians and practitioners who violate the mandatory
submission of claims requirement of the statute.
The civil money penalties to which this rule pertains include those
that apply to Medicare payments or billings as ``assignment''
violations; violations involving the failure to provide information or
improperly providing information; violations of charge or service
limits; and violations of Medigap and Medicare Select requirements.
This rule adds a new part to chapter IV of title 42 of the Code of
Federal Regulations. This new part is part 402 and is entitled Civil
Money Penalties, Assessments and Exclusions. We are dividing the part
into three subparts for the present: Subpart A-General Requirements;
Subpart B-Civil Money Penalties and Assessments; and Subpart C-
Exclusions (which is reserved for future use).
Subpart A contains the statutory authorities for most of the civil
money penalties, assessments, and exclusions that the Secretary has
delegated to HCFA. The remainder of the subpart contains the general
requirements and procedures that are common to the imposition of civil
money penalties, assessments, and exclusions. These procedures are
based on the OIG regulations in 42 CFR part 1003.
Under the Secretary's delegation, some authorities will be enforced
by the Office of Inspector General, even though similar penalties,
applicable under other statutes, are delegated to HCFA. For instance,
two of the statutory citations that subject violators to potential
sanctions (section 1842(p)(3)(A) and 1848(g)(1)(B)) authorize HCFA to
impose various penalties for abusive practices involving bills or
requests for payment that are not made on an assignment-related basis.
We note that the OIG has the comparable authority under section 1128A
of the Act to impose civil money penalties for those abusive practices
in cases where payment is requested on an assignment-related basis.
Although the OIG penalties are not listed in this section, we want to
make clear that individuals involved in abusive billing practices are
subject to penalties, whether or not the claim is submitted on an
assignment-related basis.
Subpart B includes procedures specific to the imposition of civil
money penalties and assessments. These rules are also based on those
the OIG uses in 42 CFR part 1003.
Our regulations are based on those in part 1003 but are organized
somewhat differently in order to be able to, in the future, include all
our rules regarding exclusions in more detail. The organization will
also make the regulations easier to understand and to find. The
organizational changes are not substantive; they change neither the
procedures nor the extent of the regulations' applicability.
Although the OIG regulations generally refer to the OIG as the
government entity implementing a given function, our new regulations
will refer to ``HCFA or OIG'' as the government agent.
Another purely technical departure from the OIG regulations is our
inclusion of a description of all the statutory citations. HCFA is
revising its rules to include a description of all pertinent statutory
citations in a
[[Page 68689]]
particular section, rather than using a long list of citations (by
number only) in the ``Authority'' paragraph that currently appears in
each part or subpart in title 42 of the Code of Federal Regulations.
The descriptions, of course, also include the new authorities that are
not in the existing OIG rules. We also make several editorial changes
and clarifying changes designed to make the language clearer to the
public.
The regulations provisions in this rule do not revise any
procedures or rights currently available to any person on whom we may
impose a civil money penalty, assessment, or exclusion. The procedures
we will follow also remain the same.
III. Impact Analysis
Consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
through 612), we prepare a regulatory flexibility analysis unless we
certify that a rule will not have a significant economic impact on a
substantial number of small entities. For purposes of the RFA, all
health care providers and suppliers of services (except some individual
physicians) are considered to be small entities. Individuals and States
are not included in the definition of a small entity.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. Such
an analysis must conform to the provisions of section 604 of the RFA.
For purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area and has fewer than 50 beds.
As indicated above, the provisions in this final rule with comment
period provide HCFA (and the OIG) with regulations to implement the
statutory authorities to levy civil money penalties and assessments
against providers and physicians and other suppliers of services. The
civil money penalties to which this rule pertains include those that
apply to Medicare payments or billings as ``assignment'' violations;
violations involving the failure to provide information or the improper
provision of information; violations of charge or service limits; and
violations of Medigap and Medicare Select requirements. Most of these
authorities rested solely with the OIG until October 1994; there are
also a few new authorities, which are included in the new part 402.
These new authorities do not materially expand or increase the overall
impact of civil money penalty oversight activities. This final rule
basically transfers the existing civil money penalty functional
responsibility (along with the new authorities) for assuring compliance
with programatic and/or regulations violations (versus fraud,
misrepresentation, and falsification types of violations, which remain
with the OIG) from the OIG to HCFA. It is expected that no significant
economic impact will be imposed on a substantial number of small
business entities as a result of this action.
For this reason, any new economic effect of these regulations
should be minimal, affecting only those that have engaged in prohibited
behavior contained in the authorities put in place on or after October
31, 1994; the economic effect of the already existing authorities is
not new and is also minimal because of the relatively few violators
involved. We believe the majority of the persons and entities subject
to these regulations do not commit the violations discussed in these
regulations. Those providers, physicians, and suppliers that are not
currently in compliance with existing and new authorities will be
subject to more vigorous enforcement of these provisions of the CMP
oversight activity and may experience a significant economic impact as
a result of such violations. However, the population subject to such
actions is reasonably believed to be a very minor portion of the total
population of providers, physicians and other suppliers. Moreover,
small rural hospitals are not expected to be appreciably affected by
this final rule. In addition, there are minimal costs and savings to
the government.
For these reasons, we are not preparing analyses for either the RFA
or section 1102(b) of the Act because we have determined, and we
certify, that this rule will not have a significant economic impact on
a substantial number of small entities or a significant impact on the
operations of a substantial number of small rural hospitals.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
IV. Response to Comments
Because of the large number of items of correspondence we normally
receive on Federal Register documents published for comment, we are not
able to acknowledge or respond to them individually. We will consider
all comments we receive by the date and time specified in the ``DATES''
section of this preamble and will respond to the comments in the
preamble to any subsequent Federal Register document.
V. Waiver of Proposed Rulemaking
We ordinarily publish a notice of proposed rulemaking in the
Federal Register and invite prior public comment on proposed rules. The
notice of proposed rulemaking includes a reference to the legal
authority under which the rule is proposed and the terms and substances
of the proposed rule or a description of the subjects and issues
involved. This procedure can be waived, however, if an agency finds
good cause that a notice-and-comment procedure is impracticable,
unnecessary, or contrary to the public interest and incorporates a
statement of the finding and its reasons in the rule issued.
It would be contrary to the public interest to delay the
publication of these rules pending completion of the usual notice and
comment procedures. The delay would be contrary to the public interest
because HCFA would not be able to utilize fully civil money penalties
and assessments as tools to encourage compliance with certain
provisions of the Medicare Act as the Congress intended. These
provisions are designed to discourage entities from engaging in
fraudulent and abusive behavior. According to the General Accounting
Office's report, Vulnerable Payers Lose Billions to Fraud and Abuse
(GAO/HRD-92-69), costs of health care fraud and abuse are estimated to
be ten percent of our total health care spending. The Medicare trust
funds and the public are significantly harmed by these abusive
practices, and we find that further delaying the use of these sanctions
pending the end of a public comment period would be contrary to the
public's interest.
We also believe it is unnecessary to delay publication of these
final rules pending completion of a notice and comment period. We are
adopting the OIG's procedures and policies as our own and are not
revising the rights of persons to whom the provisions pertain. Over the
years, the Department of Health and Human Services has published the
substance of the OIG's regulations in proposed rules that solicited
comment and responded to those comments in final rules (55 FR 12205,
April 2, 1990; 57 FR 3298, January 29, 1992). The procedures in this
rule do not differ significantly from the OIG rules and we believe it
is redundant to, in effect, propose rules that are already contained in
the Code of Federal Regulations.
Finally, a delay of publication of the final rule is unnecessary
because all of
[[Page 68690]]
the specific civil money penalties are required by the current statute.
Thus, the one significant addition to the OIG rules, the addition of
the new authorities, is not discretionary and we would not be able to
change these authorities in the regulations in response to public
comment.
Accordingly, we find good cause for waiving the prior notice-and-
comment procedure as unnecessary and contrary to the public interest.
List of Subjects in 42 CFR Part 402
Administrative practice and procedure, Health facilities, Health
professions, Medicaid, Medicare, Penalties.
42 CFR chapter IV is amended as set forth below:
PART 400--[AMENDED]
A. Part 400 is amended as follows:
1. The authority citation continues to read as follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh) and 44 U.S.C. Chapter 35.
2. Section 400.200 is amended by adding, in alphabetical order, a
definition for ``DAB'' to read as follows:
Sec. 400.200 General definitions.
* * * * *
DAB stands for Departmental Appeals Board.
* * * * *
B. A new part 402 is added to read as follows:
PART 402--CIVIL MONEY PENALTIES, ASSESSMENTS, AND EXCLUSIONS
Subpart A--General Provisions
Secs.
402.1 Basis and scope.
402.3 Definitions.
402.5 Right to a hearing before the final determination.
402.7 Notice of proposed determination.
402.9 Failure to request a hearing.
402.11 Notice to other agencies and other entities.
402.13 Penalty, assessment, and exclusion not exclusive.
402.15 Collateral estoppel.
402.17 Settlement.
402.19 Hearings and appeals.
402.21 Judicial review.
Subpart B--Penalties and Assessments
Secs.
402.105 Amount of penalty.
402.107 Amount of assessment.
402.109 Statistical sampling.
402.111 Factor consideration determinations regarding the amount of
penalties and assessments.
402.113 When a penalty and assessment are collectible.
402.115 Collection of assessment and penalty.
Subpart C--Exclusions [Reserved]
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
Subpart A--General Provisions
Sec. 402.1 Basis and scope.
(a) Basis. This part is based on the sections of the Act that are
specified in paragraph (c) of this section.
(b) Scope. This part--
(1) Provides for the imposition of civil money penalties,
assessments, and exclusions against persons that violate the provisions
of the Act specified in paragraph (c), (d), or (e) of this section; and
(2) Sets forth the appeal rights of persons subject to penalties,
assessments, or exclusion and the procedures for reinstatement
following exclusion.
(c) Civil money penalties. HCFA or OIG may impose civil money
penalties against any person or other entity specified in paragraphs
(c)(1) through (c)(30) of this section under the identified section of
the Act. The authorities that also permit imposition of an assessment
or exclusion are noted in the applicable paragraphs.
(1) Sections 1833(h)(5)(D) and 1842(j)(2)--Any person that
knowingly and willfully, and on a repeated basis, bills for a clinical
diagnostic laboratory test, other than on an assignment-related basis.
This provision includes tests performed in a physician's office but
excludes tests performed in a rural health clinic. (This violation may
also include an assessment and cause exclusion.)
(2) Section 1833(i)(6)--Any person that knowingly and willfully
presents, or causes to be presented, a bill or request for payment for
an intraocular lens inserted during or after cataract surgery for which
the Medicare payment rate includes the cost of acquiring the class of
lens involved.
(3) Section 1833(q)(2)(B)--Any entity that knowingly and willfully
fails to provide information about a referring physician, including the
physician's name and unique physician identification number for the
referring physician, when seeking payment on an unassigned basis. (This
violation, if it occurs in repeated cases, may also cause an
exclusion.)
(4) Sections 1834(a)(11)(A) and 1842(j)(2)--Any durable medical
equipment supplier that knowingly and willfully charges for a covered
service that is furnished on a rental basis after the rental payments
may no longer be made (except for maintenance and servicing) as
provided in section 1834(a)(7)(A). (This violation may also include an
assessment and cause exclusion.)
(5) Sections 1834(a)(18)(B) and 1842(j)(2)--Any nonparticipating
durable medical equipment supplier that knowingly and willfully, in
violation of section 1834(a)(18)(A), fails to make a refund to Medicare
beneficiaries for a covered service for which payment is precluded due
to an unsolicited telephone contact from the supplier. (This violation
may also include an assessment and cause exclusion.)
(6) Sections 1834(b)(5)(C) and 1842(j)(2)--Any nonparticipating
physician or supplier that knowingly and willfully charges a Medicare
beneficiary more than the limiting charge, as specified in section
1834(b)(5)(B), for radiologist services. (This violation may also
include an assessment and cause exclusion.)
(7) Sections 1834(c)(4)(C) and 1842(j)(2)--Any nonparticipating
physician or supplier that knowingly and willfully charges a Medicare
beneficiary more than the limiting charge, as specified in section
1834(c)(4)(B), for mammography screening. (This violation may also
include an assessment and cause exclusion.)
(8) Sections 1834(h)(3) and 1842(j)(2)--Any supplier of prosthetic
devices, orthotics, and prosthetics that knowingly and willfully
charges for a covered prosthetic device, orthotic, or prosthetic that
is furnished on a rental basis after the rental payment may no longer
be made (except for maintenance and servicing). (This violation may
also include an assessment and cause exclusion.)
(9) Section 1834(j)(2)(A)(iii)--Any supplier of durable medical
equipment, including a supplier of prosthetic devices, prosthetics,
orthotics, or supplies, that knowingly and willfully distributes a
certificate of medical necessity in violation of section
1834(j)(2)(A)(i) or fails to provide the information required under
section 1834(j)(2)(A)(ii).
(10) Sections 1834(j)(4) and 1842(j)(2)--
(i) Any supplier of durable medical equipment, including a supplier
of prosthetic devices, prosthetics, orthotics, or supplies, that
knowingly and willfully fails to make refunds in a timely manner to
Medicare beneficiaries for services billed other than on an assignment-
related basis if--
(A) The supplier does not possess a Medicare supplier number;
[[Page 68691]]
(B) The service is denied in advance under section 1834(a)(15); or
(C) The service is determined not to be medically necessary or
reasonable.
(ii) These violations may also include an assessment and cause
exclusion.
(11) Sections 1842(b)(18)(B) and 1842(j)(2)--Any practitioner
specified in section 1842(b)(18)(C) (physician assistants, nurse
practitioners, clinical nurse specialists, certified registered nurse
anesthetists, certified nurse-midwives, clinical social workers, and
clinical psychologists) or other person that knowingly and willfully
bills or collects for any services by the practitioners on other than
an assignment-related basis. (This violation may also include an
assessment and cause exclusion.)
(12) Sections 1842(k) and 1842(j)(2)--Any physician who knowingly
and willfully presents, or causes to be presented, a claim or bill for
an assistant at cataract surgery performed on or after March 1, 1987
for which payment may not be made because of section 1862(a)(15). (This
violation may also include an assessment and cause exclusion.)
(13) Sections 1842(l)(3) and 1842(j)(2)--Any nonparticipating
physician who does not accept payment on an assignment-related basis
and who knowingly and willfully fails to refund on a timely basis any
amounts collected for services that are not reasonable or medically
necessary or are of poor quality, in accordance with section
1842(l)(1)(A). (This violation may also include an assessment and cause
exclusion.)
(14) Sections 1842(m)(3) and 1842(j)(2)--(i) Any nonparticipating
physician, who does not accept payment for an elective surgical
procedure on an assignment-related basis and whose charge is at least
$500, who knowingly and willfully fails to--
(A) Disclose the information required by section 1842(m)(1)
concerning charges and coinsurance amounts; and
(B) Refund on a timely basis any amount collected for the procedure
in excess of the charges recognized and approved by the Medicare
program.
(ii) This violation may also include an assessment and cause
exclusion.
(15) Sections 1842(n)(3) and 1842(j)(2)--Any physician who
knowingly and willfully, in repeated cases, bills one or more
beneficiaries, for purchased diagnostic tests, any amount other than
the payment amount specified in section 1842(n)(1)(A) or section
1842(n)(1)(B). (This violation may also include an assessment and cause
exclusion.)
(16) Section 1842(p)(3)(A)--Any physician who knowingly and
willfully fails promptly to provide the appropriate diagnosis code or
codes upon request by HCFA or a carrier on any request for payment or
bill not submitted on an assignment-related basis for any service
furnished by the physician. (This violation, if it occurs in repeated
cases, may also cause exclusion.)
(17) Sections 1848(g)(1)(B) and 1842(j)(2)--
(i) Any nonparticipating physician, supplier, or other person that
furnishes physicians' services and does not accept payment on an
assignment-related basis, that--
(A) Knowingly and willfully bills or collects in excess of the
limiting charge (as defined in section 1848(g)(2)) on a repeated basis;
or
(B) Fails to make an adjustment or refund on a timely basis as
required by section 1848(g)(1)(A)(iii) or (iv).
(ii) These violations may also include an assessment and cause
exclusion.
(18) Section 1848(g)(3)(B) and 1842(j)(2)--Any person that
knowingly and willfully bills for State plan approved physicians'
services, as defined in section 1848(j)(3), on other than an
assignment-related basis for a Medicare beneficiary who is also
eligible for Medicaid (these individuals include qualified Medicare
beneficiaries). This provision applies to services furnished on or
after April 1, 1990. (This violation may also include an assessment and
cause exclusion.)
(19) Section 1848(g)(4)(B)(ii), 1842(p)(3), and 1842(j)(2)(A)--
(i) Any physician, supplier, or other person (except any person
that has been excluded from the Medicare program) that, for services
furnished after September 1, 1990, knowingly and willfully--
(A) Fails to submit a claim on a standard claim form for services
provided for which payment is made under Part B on a reasonable charge
or fee schedule basis; or
(B) Imposes a charge for completing and submitting the standard
claims form.
(ii) These violations, if they occur in repeated cases, may also
cause exclusion.
(20) Section 1862(b)(5)(C)--Any employer (other than a Federal or
other governmental agency) that, before October 1, 1998, willfully or
repeatedly fails to provide timely and accurate information requested
relating to an employee's group health insurance coverage.
(21) Section 1862(b)(6)(B)--Any entity that knowingly, willfully,
and repeatedly--
(i) Fails to complete a claim form relating to the availability of
other health benefit plans in accordance with section 1862(b)(6)(A); or
(ii) Provides inaccurate information relating to the availability
of other health benefit plans on the claim form.
(22) Section 1877(g)(5)--Any person that fails to report
information required by HHS under section 1877(f) concerning ownership,
investment, and compensation arrangements. (This violation may also
include an assessment and cause exclusion.)
(23) Sections 1879(h), 1834(a)(18), and 1842(j)(2)--
(i) Any durable medical equipment supplier, including a supplier of
prosthetic devices, prosthetics, orthotics, or supplies, that knowingly
and willfully fails to make refunds in a timely manner to Medicare
beneficiaries for services billed on an assignment-related basis if--
(A) The supplier did not possess a Medicare supplier number;
(B) The service is denied in advance under section 1834(a)(15) of
the Act; or
(C) The service is determined not to be payable under section
1834(a)(17)(b) because of unsolicited telephone contacts.
(ii) These violations may also include an assessment and cause
exclusion.
(24) Section 1882(a)(2)--Any person that issues a Medicare
supplemental policy that has not been approved by the State regulatory
program or does not meet Federal standards on and after the effective
date in section 1882(p)(1)(C). (This violation may also include an
assessment and cause exclusion.)
(25) Section 1882(p)(8)--Any person that sells or issues Medicare
supplemental policies, on or after July 30, 1992, that fail to conform
to the NAIC or Federal standards established under section 1882(p).
(This violation may also include an assessment and cause exclusion.)
(26) Section 1882(p)(9)(C)--
(i) Any person that sells a Medicare supplemental policy and--
(A) Fails to make available for sale the core group of basic
benefits when selling other Medicare supplemental policies with
additional benefits; or
(B) Fails to provide the individual, before the sale of the policy,
an outline of coverage describing the benefits provided by the policy.
(ii) These violations may also include an assessment and cause
exclusion.
(27) Section 1882(q)(5)(C)--
(i) Any person that fails to--
(A) Suspend a Medicare supplemental policy at the policyholder's
request, if
[[Page 68692]]
the policyholder applies for and is determined eligible for medical
assistance, and the policyholder provides notice within 90 days of the
eligibility determination; or
(B) Automatically reinstate the policy as of the date of
termination of medical assistance if the policyholder loses eligibility
for medical assistance and the policyholder provides notice within 90
days of loss of eligibility.
(ii) These violations may also include an assessment and cause
exclusion.
(28) Section 1882(r)(6)(A)--Any person that fails to provide
refunds or credits as required by section 1882(r)(1)(B). (This
violation may also include an assessment and cause exclusion.)
(29) Section 1882(s)(3)--
(i) Any issuer of a Medicare supplemental policy that--
(A) Does not waive any time periods applicable to preexisting
conditions, waiting periods, elimination periods, or probationary
periods if the time periods were already satisfied under a preceding
Medicare supplemental policy; or
(B) Denies a policy, conditions the issuance or effectiveness of
the policy, or discriminates in the pricing of the policy based on
health status or other criteria as specified in section 1882(s)(2)(A).
(ii) These violations may also include an assessment and cause
exclusion.
(30) Section 1882(t)(2)--
(i) Any issuer of a Medicare supplemental policy that--
(A) Fails substantially to provide medically necessary services to
enrollees seeking the services through the issuer's network of
entities;
(B) Imposes premiums on enrollees in excess of the premiums
approved by the State;
(C) Acts to expel an enrollee for reasons other than nonpayment of
premiums; or
(D) Does not provide each enrollee at the time of enrollment with
the specific information provided in section 1882(t)(1)(E)(i) or fails
to obtain a written acknowledgment from the enrollee of receipt of the
information (as required by section 1882(t)(1)(E)(ii)).
(ii) These violations may also include an assessment and cause
exclusion.
(d) Assessments. HCFA or OIG may impose assessments in addition to
civil money penalties for violations of the following statutory
sections:
(1) Section 1833: Paragraph (h)(5)(D).
(2) Section 1834: Paragraphs (a)(11)(A), (a)(18)(B), (b)(5)(C),
(c)(4)(C), (h)(3), and (j)(4).
(3) Section 1842: Paragraphs (k), (l)(3), (m)(3), and (n)(3).
(4) Section 1848: Paragraph (g)(1)(B).
(5) Section 1877: Paragraph (g)(5).
(6) Section 1879: Paragraph (h).
(7) Section 1882: Paragraphs (a)(2), (p)(8), (p)(9)(C), (q)(5)(C),
(r)(6)(A), (s)(3), and (t)(2).
(e) Exclusions. (1) HCFA or OIG may exclude any person from
participation in the Medicare program on the basis of any of the
following violations of the statute:
(i) Section 1833: Paragraphs (h)(5)(D) and, in repeated cases,
(q)(2)(B).
(ii) Section 1834: Paragraphs (a)(11)(A), (a)(18)(B), (b)(5)(C),
(c)(4)(C), (h)(3), and (j)(4).
(iii) Section 1842: Paragraphs (b)(18)(B), (k), (l)(3), (m)(3),
(n)(3), and, in repeated cases, (p)(3)(B).
(iv) Section 1848: Paragraphs (g)(1)(B), (g)(3)(B), and, in
repeated cases, (g)(4)(B)(ii).
(v) Section 1877: Paragraph (g)(5).
(vi) Section 1879: Paragraph (h).
(vii) Section 1882: Paragraphs (a)(2), (p)(8), (p)(9)(C),
(q)(5)(C), (r)(6)(A), (s)(3), and (t)(2).
(2) HCFA or OIG must exclude from participation in the Medicare
program any of the following, under the identified section of the Act:
(i) Section 1834(a)(17)(C)--Any supplier of durable medical
equipment and supplies that are covered under section 1834(a)(13) that
knowingly contacts Medicare beneficiaries by telephone regarding the
furnishing of covered services in violation of section 1834(a)(17)(A)
and whose conduct establishes a pattern of prohibited contacts as
described under section 1834(a)(17)(A).
(ii) Section 1834(h)(3)--Any supplier of prosthetic devices,
orthotics, and prosthetics that knowingly contacts Medicare
beneficiaries by telephone regarding the furnishing of prosthetic
devices, orthotics, or prosthetics in the same manner as in the
violation under section 1834(a)(17)(A) and whose conduct establishes a
pattern of prohibited contacts in the same manner as described in
section 1834(a)(17)(C).
(f) Responsible persons. (1) If HCFA or OIG determines that more
than one person is responsible for any of the violations described in
paragraph (c) or paragraph (d) of this section, it may impose a civil
money penalty or a civil money penalty and assessment against any one
of those persons or jointly and severally against two or more of those
persons. However, the aggregate amount of the assessments collected may
not exceed the amount that could be assessed if only one person were
responsible.
(2) A principal is liable for penalties and assessments for the
actions of his or her agent acting within the scope of the agency.
(g) Time limits. Neither HCFA nor OIG initiates an action to impose
a civil money penalty, assessment, or proceeding to exclude a person
from participation in the Medicare program unless it begins the action
within 6 years from the date on which the claim was presented, the
request for payment was made, or the incident occurred.
Sec. 402.3 Definitions.
For purposes of this part:
Assessment means the amount described in Sec. 402.107 and includes
the plural of that term.
Assignment-related basis means that the claim submitted by a
physician, supplier or other person is paid on the basis of an
assignment, whereby the physician, supplier or other person agrees to
accept the Medicare payment as payment in full for the services
furnished to the beneficiary and is precluded from charging the
beneficiary more than the deductible and coinsurance based upon the
approved Medicare fee amount. Additional obligations, including
obligations to make refunds in certain circumstances, are established
at section 1842(b)(3) of the Act.
Claim means an application for payment for a service for which the
Medicare or Medicaid program may pay.
Covered means that a service is described as reasonable and
necessary for the diagnosis or treatment of illness or injury or to
improve the functioning of a malformed body member. A service is not
covered if it is specifically identified as excluded from Medicare Part
B coverage or is not a defined Medicare Part B benefit.
Exclusion means the temporary or permanent barring of a person or
other entity from participation in the Medicare or State health care
program and that services furnished or ordered by that person are not
paid for under either program.
General Counsel means the General Counsel of HHS or his or her
designees.
Knowingly or knowingly and willfully means that a person, with
respect to information--
(1) Has actual knowledge of the information;
(2) Acts in deliberate ignorance of the truth or falsity of the
information; or
(3) Acts in reckless disregard of the truth or falsity of the
information; and
(4) No proof of specific intent is required.
Medicare supplemental policy means a policy guaranteeing that a
health plan will pay a policyholder's coinsurance and deductible and
will cover other
[[Page 68693]]
limitations on payment imposed under title XVIII of the Act and will
provide additional health plan or non-Medicare coverage for services up
to a predefined benefit limit.
NAIC stands for the National Association of Insurance
Commissioners.
Nonparticipating describes a physician, supplier, or other person
(excluding any provider of services) that, at the time of furnishing
the services to Medicare Part B beneficiaries, is not a participating
physician or supplier.
Participating describes a physician or supplier (excluding any
provider of services) that, before the beginning of any given year,
enters into an agreement with HHS that provides that the physician or
supplier will accept payment under the Medicare program on an
assignment-related basis for all services furnished to Medicare Part B
beneficiaries.
Penalty means the amount described in Sec. 402.105 and includes the
plural of that term.
Person means an individual, trust or estate, partnership,
corporation, professional association or corporation, or other entity,
public or private.
Physicians' services means the following Medicare covered
professional services:
(1) Surgery, consultation, home, office and institutional calls,
and other professional services performed by physicians.
(2) Services and supplies furnished ``incident to'' a physician's
professional services.
(3) Outpatient physical and occupational therapy services.
(4) Diagnostic x-ray tests and other diagnostic tests (excluding
clinical diagnostic laboratory tests).
(5) X-ray, radium, and radioactive isotope therapy, including
materials and services of technicians.
(6) Antigens prepared by a physician.
Radiologist service means radiology services performed only by, or
under the direction of, a physician who is certified, or eligible to be
certified, by the American Board of Radiology or for whom radiology
services account for at least 50 percent of the total amount of charges
made under part B of title XVIII of the Act.
Request for payment means an application submitted by a person to
any person for payment for a service.
Respondent means the person upon which HCFA or OIG has imposed, or
proposes to impose, a civil money penalty, assessment, or exclusion.
Service includes--
(1) Any item, device, medical supply, or service claimed to have
been furnished to a patient and listed in an itemized claim for program
payment; or
(2) In the case of a claim based on costs, any entry or omission in
a cost report, books of account or other documents supporting the
claim.
State includes the District of Columbia, Puerto Rico, the Virgin
Islands, Guam, American Samoa, the Northern Mariana Islands, and the
Trust Territory of the Pacific Islands.
Timely basis means that the adjustment to a bill or a refund is
considered ``on a timely basis'' if the physician, supplier, or other
person makes the adjustment or refund to the appropriate party no later
than 30 days after the date the physician, supplier, or other person is
notified by the Medicare Part B contractor of the violation and the
requirement to refund any excess collections.
Sec. 402.5 Right to a hearing before the final determination.
HCFA or OIG does not make a determination adverse to any person
under this part until the person has been given a written notice and
opportunity for the determination to be made on the record after a
hearing at which the person is entitled to be represented by counsel,
to present witnesses, and to cross-examine witnesses against the
person.
Sec. 402.7 Notice of proposed determination.
(a) If HCFA or OIG proposes a penalty and, as applicable, an
assessment, or proposes to exclude a respondent from participation in
Medicare in accordance with this part, it sends the respondent written
notice of its intent by certified mail, return receipt requested. The
notice includes the following information:
(1) Reference to the statutory basis or bases for the penalty,
assessment, exclusion, or any combination, as applicable.
(2)(i) A description of the claims, requests for payment, or
incidents with respect to which the penalty, assessment, and exclusion
are proposed; or
(ii) If HCFA or OIG is relying upon statistical sampling to project
the number and types of claims or requests for payment and the dollar
amount, a description of the claims and requests for payment comprising
the sample and a brief description of the statistical sampling
technique HCFA or OIG used.
(3) The reason why the claims, requests for payment, or incidents
are subject to a penalty and assessment.
(4) The amount of the proposed penalty and of any proposed
assessment.
(5) Any mitigating or aggravating circumstances that HCFA or OIG
considered when it determined the amount of the proposed penalty and
any applicable assessment.
(6) Information concerning response 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
renders the proposed determination final and permits the imposition of
the proposed penalty and any assessment.
(iii) A statement that the debt may be collected through an
administrative offset.
(7) In the case of a respondent that has an agreement under section
1866 of the Act, notice that imposition of an exclusion may result in
termination of the provider's agreement in accordance with section
1866(b)(2)(C) of the Act.
Sec. 402.9 Failure to request a hearing.
(a) If the respondent does not request a hearing within 60 days of
receipt of the notice of proposed determination specified in
Sec. 402.7, any civil money penalty, assessment, or exclusion becomes
final and HCFA or OIG may impose the proposed penalty, assessment, or
exclusion, or any less severe penalty, assessment, or suspension.
(b) HCFA or OIG notifies the respondent by certified mail, return
receipt requested, of any penalty, assessment, or exclusion that has
been imposed and of the means by which the respondent may satisfy the
judgment.
(c) The respondent has no right to appeal a penalty, assessment, or
exclusion for which he or she has not requested a hearing.
Sec. 402.11 Notice to other agencies and other entities.
(a) Whenever a penalty, assessment, or exclusion becomes final,
HCFA or OIG notifies the following organizations and entities about the
action and the reasons for it:
(1) The appropriate State or local medical or professional
association.
(2) The appropriate peer review organization.
(3) As appropriate, the State agency responsible for the
administration of each State health care program (Medicaid, the
Maternal and Child Health Services Block Grant Program, and the Social
Services Block Grant Program).
(4) The appropriate Medicare carrier or fiscal intermediary.
(5) The appropriate State or local licensing agency or organization
(including the Medicare and Medicaid State survey agencies).
[[Page 68694]]
(6) The long-term care ombudsman.
(b) For exclusions, HCFA or OIG also notifies the public and
specifies the effective date.
Sec. 402.13
Penalty, assessment, and exclusion not exclusive.
Penalties, assessments, and exclusions imposed under this part are
in addition to any other penalties prescribed by law.
Sec. 402.15
Collateral estoppel.
(a) When a final determination that the respondent presented or
caused to be presented a claim or request for payment falling within
the scope of Sec. 402.1 has been rendered in any proceeding in which
the respondent was a party and had an opportunity to be heard, the
respondent is bound by that determination in any proceeding under this
part.
(b) 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 is barred from denying the essential
elements of the criminal offense if the proceedings under this part
involve the same transactions.
Sec. 402.17
Settlement.
HCFA or OIG has exclusive authority to settle any issues or case,
without the consent of the ALJ or the Secretary, at any time before a
final decision by the Secretary. Thereafter, the General Counsel has
the exclusive authority.
Sec. 402.19
Hearings and appeals.
The hearings and appeals procedures set forth in part 1005 of
chapter V of this title are available to any person that receives an
adverse determination under this part. For an appeal of a civil money
penalty, assessment, or exclusion imposed under this part, either HCFA
or OIG may represent the government in the hearing and appeals process.
Sec. 402.21
Judicial review.
After exhausting all available administrative remedies, a
respondent may seek judicial review of a penalty, assessment, or
exclusion that has become final. The respondent may seek review only
with respect to a penalty, assessment, or exclusion with respect to
which the respondent filed an exception under Sec. 1005.21(c) of this
title unless the court excuses the failure or neglect to urge the
exception in accordance with section 1128A(e) of the Act because of
extraordinary circumstances.
Subpart B--Civil Money Penalties and Assessments
Sec. 402.105
Amount of penalty.
(a) $2,000. Except as provided in paragraphs (b) through (f) of
this section, HCFA or OIG may impose a penalty of not more than $2,000
for each service, bill, or refusal to issue a timely refund that is
subject to a determination under this part and for each incident
involving the knowing, willful, and repeated failure of an entity
furnishing a service to submit a properly completed claim form or to
include on the claim form accurate information regarding the
availability of other health insurance benefit plans
(Sec. 402.1(c)(21)).
(b) $1,000. HCFA or OIG may impose a penalty of not more than
$1,000 for the following:
(1) Per certificate of medical necessity knowingly and willfully
distributed to physicians on or after December 31, 1994 that--
(i) Contains information concerning the medical condition of the
patient; or
(ii) Fails to include cost information.
(2) Per individual about whom information is requested, for willful
or repeated failure of an employer to respond to an intermediary or
carrier about coverage of an employee or spouse under the employer's
group health plan (Sec. 402.1(c)(20)).
(c) $5,000. HCFA or OIG may impose a penalty of not more than
$5,000 for each violation resulting from the following:
(1) The failure of a Medicare supplemental policy issuer, on a
replacement policy, to waive any time periods applicable to pre-
existing conditions, waiting periods, elimination periods, or
probationary periods that were satisfied under a preceding policy
(Sec. 402.1(c)(29)); and
(2) Any issuer of any Medicare supplemental policy denying a
policy, conditioning the issuance or effectiveness of the policy, or
discriminating in the pricing of the policy based on health status or
other criteria as specified in section 1882(s)(2)(A).
(Sec. 402.1(c)(29)).
(d) $10,000. (1) HCFA or OIG may impose a penalty of not more than
$10,000 for each day that reporting entity ownership arrangements is
late (Sec. 402.1(c)(22)).
(2) HCFA or OIG may impose a penalty of not more than $10,000 for
the following violations that occur on or after January 1, 1997:
(i) Knowingly and willfully, and on a repeated basis, billing for a
clinical diagnostic laboratory test, other than on an assignment-
related basis (Sec. 402.1(c)(1)).
(ii) By any durable medical equipment supplier, knowingly and
willfully charging for a covered service that is furnished on a rental
basis after the rental payments may no longer be made (except for
maintenance and servicing) as provided in section 1834(a)(7)(A)
(Sec. 402.1(c)(4)).
(iii) By any durable medical equipment supplier, knowingly and
willfully, in violation of section 1834(a)(18)(A), failing to make a
refund to Medicare beneficiaries for a covered service for which
payment is precluded due to an unsolicited telephone contact from the
supplier (Sec. 402.1(c)(5)).
(iv) By any nonparticipating physician or supplier, knowingly and
willfully charging a Medicare beneficiary more than the limiting
charge, as specified in section 1834(b)(5)(B), for radiologist services
(Sec. 402.1(c)(6)).
(v) By any nonparticipating physician or supplier, knowingly and
willfully charging a Medicare beneficiary more than the limiting
charge, as specified in section 1834(c)(3), for mammography screening
(Sec. 402.1(c)(7)).
(vi) By any supplier of prosthetic devices, orthotics, and
prosthetics, knowingly and willfully charging for a covered prosthetic
device, orthotic, or prosthetic that is furnished on a rental basis
after the rental payment may no longer be made (except for maintenance
and servicing) (Sec. 401.2(c)(8)).
(vii) By any supplier of durable medical equipment, including a
supplier of prosthetic devices, prosthetics, orthotics, or supplies,
knowingly and willfully failing to make refunds in a timely manner to
Medicare beneficiaries for services billed other than on an assigned-
related basis if--
(A) The supplier does not possess a Medicare supplier number;
(B) The service is denied in advance; or
(C) The service is determined not to be medically necessary or
reasonable (Sec. 402.1(c)(10)).
(viii) Knowingly and willfully billing or collecting for any
services on other than an assignment-related basis for practitioners
specified in section 1842(b)(18)(B) (Sec. 402.1(c)(11)).
(xix) By any physician, knowingly and willfully presenting, or
causing to be presented, a claim or bill for an assistant at cataract
surgery performed on or after March 1, 1987 for which payment may not
be made because of section 1862(a)(15) (Sec. 402.1(c)(12)).
(x) By any nonparticipating physician who does not accept payment
on an
[[Page 68695]]
assignment-related basis, knowingly and willfully failing to refund on
a timely basis any amounts collected for services that are not
reasonable or medically necessary or are of poor quality, in accordance
with section 1842(l)(1)(A) (Sec. 402.1(c)(13)).
(xi) By any nonparticipating physician, who does not accept payment
for an elective surgical procedure on an assignment-related basis and
whose charge is at least $500, knowingly and willfully failing to--
(A) Disclose the information required by section 1842(m)(1)
concerning charges and coinsurance amounts; and
(B) Refund on a timely basis any amount collected for the procedure
in excess of the charges recognized and approved by the Medicare
program (Sec. 402.1(c)(14)).
(xii) By any physician, in repeated cases, knowingly and willfully
billing one or more beneficiaries, for purchased diagnostic tests, any
amount other than the payment amount specified in section 1842(n)(1)(A)
or section 1842(n)(1)(B) (Sec. 402.1(c)(15)).
(xiii) By any nonparticipating physician, supplier, or other person
that furnishes physicians' services and does not accept payment on an
assignment-related basis--
(A) Knowingly and willfully billing or collecting in excess of the
limiting charge (as defined in section 1843(g)(2)) on a repeated basis;
or
(B) Failing to make an adjustment or refund on a timely basis as
required by section 1848(g)(1)(A)(iii) or (iv) (Sec. 402.1(c)(17)).
(xiv) Knowingly and willfully billing for State plan approved
physicians' services on other than an assignment-related basis for a
Medicare beneficiary who is also eligible for Medicaid
(Sec. 402.1(c)(18)).
(xv) By any supplier of durable medical equipment, including a
supplier of prosthetic devices, prosthetics, orthotics, or supplies,
knowingly and willfully failing to make refunds in a timely manner to
Medicare beneficiaries for services billed on an assignment-related
basis if--
(A) The supplier did not possess a Medicare supplier number;
(B) The service is denied in advance; or
(C) The service is determined not to be medically necessary or
reasonable (Sec. 402.1(c)(23)).
(e) $15,000. HCFA or OIG may impose a penalty of not more than
$15,000 if the seller of a Medicare supplemental policy is not the
issuer, for each violation described in paragraphs (f)(2) and (f)(3) of
this section (Sec. 402.1 (c)(25) and (c)(26)).
(f) $25,000. HCFA or OIG may impose a penalty of not more than
$25,000 for each of the following violations:
(1) Issuance of a Medicare supplemental policy that has not been
approved by an approved State regulatory program or does not meet
Federal standards on and after the effective date in section
1882(p)(1)(C) of the Act (Sec. 402.1(c)(23)).
(2) Sale or issuance after July 30, 1992, of a Medicare
supplemental policy that fails to conform with the NAIC or Federal
standards established under section 1882(p) of the Act
(Sec. 402.1(c)(25)).
(3) Failure to make the core group of basic benefits available for
sale when selling other Medicare supplemental plans with additional
benefits (Sec. 402.1(c)(26)).
(4) Failure to provide, before sale of a Medicare supplemental
policy, an outline of coverage describing the benefits provided by the
policy (Sec. 402.1(c)(26)).
(5) Failure of an issuer of a policy to suspend or reinstate a
policy, based on the policy holder's request, during entitlement to or
upon loss of eligibility for medical assistance (Sec. 402.1(c)(27)).
(6) Failure to provide refunds or credits for Medicare supplemental
policies as required by section 1882(r)(1)(B) (Sec. 402.1(c)(28)).
(7) By an issuer of a Medicare supplemental policy--
(i) Substantial failure to provide medically necessary services to
enrollees seeking the services through the issuer's network of
entities;
(ii) Imposition of premiums on enrollees in excess of the premiums
approved by the State;
(iii) Action to expel an enrollee for reasons other than nonpayment
of premiums; or
(iv) Failure to provide each enrollee, at the time of enrollment,
with the specific information provided in section 1882(t)(1)(E)(i) or
failure to obtain a written acknowledgment from the enrollee of receipt
of the information (as required by section 1882(t)(1)(E)(ii)) (section
1882(t)(2)).
Sec. 402.107
Amount of assessment.
A person subject to civil money penalties specified in
Sec. 402.1(c) may be subject, in addition, to an assessment. An
assessment is a monetary payment in lieu of damages sustained by HHS or
a State agency.
(a) The assessment may not be more than twice the amount claimed
for each service that was a basis for the civil money penalty, except
for the violations specified in paragraph (b) of this section that
occur before January 1, 1997.
(b) For the violations specified in this paragraph occurring after
January 1, 1997, the assessment may not be more than three times the
amount claimed for each service that was the basis for a civil money
penalty. The violations are the following:
(1) Knowingly and willfully billing, and on a repeated basis, for a
clinical diagnostic laboratory test, other than on an assignment-
related basis (Sec. 402.1(c)(1)).
(2) By any durable medical equipment supplier, knowingly and
willfully charging for a covered service that is furnished on a rental
basis after the rental payments may no longer be made (except for
maintenance and servicing) as provided in section 1834(a)(7)(A)
(Sec. 402.1(c)(4)).
(3) By any durable medical equipment supplier, knowingly and
willfully failing, in violation of section 1834(a)(18)(A), to make a
refund to Medicare beneficiaries for a covered service for which
payment is precluded due to an unsolicited telephone contact from the
supplier (Sec. 402.1(c)(5)).
(4) By any nonparticipating physician or supplier, knowingly and
willfully charging a Medicare beneficiary more than the limiting
charge, as specified in section 1834(b)(5)(B), for radiologist services
(Sec. 402.1(c)(6)).
(5) By any nonparticipating physician or supplier, knowingly and
willfully charging a Medicare beneficiary more than the limiting charge
as specified in section 1834(c)(3), for mammography screening
(Sec. 402.1(c)(7)).
(6) By any supplier of prosthetic devices, orthotics, and
prosthetics, knowingly and willfully charging for a covered prosthetic
device, orthotic, or prosthetic that is furnished on a rental basis
after the rental payment may no longer be made (except for maintenance
and servicing) (Sec. 401.2(c)(8)).
(7) By any supplier of durable medical equipment, including a
supplier of prosthetic devices, prosthetics, orthotics, or supplies,
knowingly and willfully failing to make refunds in a timely manner to
Medicare beneficiaries for services billed other than on an assignment-
related basis if--
(i) The supplier does not possess a Medicare supplier number;
(ii) The service is denied in advance; or
(iii) The service is determined not to be medically necessary or
reasonable (Sec. 402.1(c)(10)).
[[Page 68696]]
(8) Knowingly and willfully billing or collecting for any services
on other than an assignment-related basis for practitioners specified
in section 1842(b)(18)(B) (Sec. 402.1(c)(11)).
(9) By any physician, knowingly and willfully presenting, or
causing to be presented, a claim or bill for an assistant at cataract
surgery performed on or after March 1, 1987 for which payment may not
be made because of section 1862(a)(15) (Sec. 402.1(c)(12)).
(10) By any nonparticipating physician who does not accept payment
on an assignment-related basis, knowingly and willfully failing to
refund on a timely basis any amounts collected for services that are
not reasonable or medically necessary or are of poor quality, in
accordance with section 1842(l)(1)(A) (Sec. 402.1(c)(13)).
(11) By any nonparticipating physician, who does not accept payment
for an elective surgical procedure on an assignment-related basis and
whose charge is at least $500, knowingly and willfully failing to--
(i) Disclose the information required by section 1842(m)(1)
concerning charges and coinsurance amounts; and
(ii) Refund on a timely basis any amount collected for the
procedure in excess of the charges recognized and approved by the
Medicare program (Sec. 402.1(c)(14)).
(12) By any physician, in repeated cases, knowingly and willfully
billing one or more beneficiaries, for purchased diagnostic tests, any
amount other than the payment amount specified in section 1842(n)(1)(A)
or section 1842(n)(1)(B) (Sec. 402.1(c)(15)).
(13) By any nonparticipating physician, supplier, or other person
that furnishes physicians' services and does not accept payment on an
assignment-related basis--
(i) Knowingly and willfully billing or collecting in excess of the
limiting charge (as defined in section 1843(g)(2)) on a repeated basis;
or
(ii) Failing to make an adjustment or refund on a timely basis as
required by section 1848(g)(1)(A) (iii) or (iv) (Sec. 402.1(c)(17)).
(14) Knowingly and willfully billing for State plan approved
physicians' services on other than an assignment-related basis for a
Medicare beneficiary who is also eligible for Medicaid
(Sec. 402.1(c)(18)).
(15) By any supplier of durable medical equipment, including
suppliers of prosthetic devices, prosthetics, orthotics, or supplies,
knowingly and willfully failing to make refunds in a timely manner to
Medicare beneficiaries for services billed on an assignment-related
basis if--
(i) The supplier did not possess a Medicare supplier number;
(ii) The service is denied in advance; or
(iii) The service is determined not to be medically necessary or
reasonable (Sec. 402.1(c)(23)).
Sec. 402.109
Statistical sampling.
(a) Purpose. HCFA or OIG may introduce the results of a statistical
sampling study to show the number and amount of claims subject to
sanction under this part that the respondent presented or caused to be
presented.
(b) Prima facie evidence. The results of the statistical sampling
study, if based upon an appropriate sampling and computed by valid
statistical methods, constitute prima facie evidence of the number and
amount of claims or requests for payment subject to sanction under
Sec. 402.1.
(c) Burden of proof. Once HCFA or OIG has made a prima facie case,
the burden is on the respondent to produce evidence reasonably
calculated to rebut the findings of the statistical sampling study.
HCFA or OIG then has the opportunity to rebut this evidence.
Sec. 402.111
Factors considered in determinations regarding the amount of
penalties and assessments.
(a) Basic factors. In determining the amount of any penalty or
assessment, HCFA or OIG takes into account the following:
(1) The nature of the claim, request for payment, or information
given and the circumstances under which it was presented or given.
(2) The degree of culpability, history of prior offenses, and
financial condition of the person submitting the claim or request for
payment or giving the information.
(3) The resources available to the person submitting the claim or
request for payment or giving the information.
(4) Such other matters as justice may require.
(b) Criteria to be considered. As guidelines for taking into
account the factors listed in paragraph (a) of this section, HCFA or
OIG considers the following circumstances:
(1) Aggravating circumstances of the incident. An aggravating
circumstance is any of the following:
(i) The services or incidents were of several types, occurring over
a lengthy period of time.
(ii) There were many of these services or incidents or the nature
and circumstances indicate a pattern of claims or requests for payment
for these services or a pattern of incidents.
(iii) The amount claimed or requested for these services was
substantial.
(iv) Before the incident or presentation of any claim or request
for payment subject to imposition of a civil money penalty, the
respondent was held liable for criminal, civil, or administrative
sanctions in connection with a program covered by this part or any
other public or private program of payment for medical services.
(v) There is proof that a respondent engaged in wrongful conduct,
other than the specific conduct upon which liability is based, relating
to government programs or in connection with the delivery of a health
care service. (The statute of limitations governing civil money penalty
proceedings does not apply to proof of other wrongful conduct as an
aggravating circumstance.)
(2) Mitigating circumstances. The following circumstances are
mitigating circumstances:
(i) All the services or incidents subject to a civil money penalty
were few in number and of the same type, occurred within a short period
of time, and the total amount claimed or requested for the services was
less than $1,000.
(ii) The claim or request for payment for the service was the
result of an unintentional and unrecognized error in the process of
presenting claims or requesting payment and the respondent took
corrective steps promptly after discovering the error.
(iii) Imposition of the penalty or assessment without reduction
would jeopardize the ability of the respondent to continue as a health
care provider.
(3) Other matters as justice may require. Other circumstances of an
aggravating or mitigating nature are taken into account if, in the
interests of justice, they require either a reduction of the penalty or
assessment or an increase in order to ensure the achievement of the
purposes of this part.
(c) Effect of aggravating or mitigating circumstances. In
determining the amount of the penalty and assessment to be imposed for
every service or incident subject to a determination under
Sec. 402.1(c)--
(1) If there are substantial or several mitigating circumstances,
the aggregate amount of the penalty and assessment is set at an amount
sufficiently below the maximum permitted by Secs. 402.105(a) and
402.107 to reflect that fact.
(2) If there are substantial or several aggravating circumstances,
the aggregate
[[Page 68697]]
amount of the penalty and assessment is set at an amount at or
sufficiently close to the maximum permitted by Secs. 402.105(a) and
402.107 to reflect that fact.
(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 is not less than the approximate amount
required to fully compensate the United States, or any State, for its
damages and costs, tangible and intangible, including but not limited
to the costs attributable to the investigation, prosecution, and
administrative review of the case.
(3) Nothing in this section limits the authority of HCFA or OIG to
settle any issue or case as provided by Sec. 402.19 or to compromise
any penalty and assessment as provided by Sec. 402.115.
Sec. 402.113 When a penalty and assessment are collectible.
A civil money penalty and assessment become collectible after the
earliest of the following:
(a) Sixty days after the respondent receives HCFA's or OIG's notice
of proposed determination under Sec. 402.7, if the respondent has not
requested a hearing before an ALJ.
(b) Immediately after the respondent abandons or waives his or her
appeal right at any administrative level.
(c) Thirty days after the respondent receives the ALJ's decision
imposing a civil money penalty or assessment under Sec. 1005.20(d) of
this title, if the respondent has not requested a review before the
DAB.
(d) If the DAB grants an extension of the period for requesting the
DAB's review, the day after the extension expires if the respondent has
not requested the review.
(e) Immediately after the ALJ's decision denying a request for a
stay of the effective date under Sec. 1005.22(b) of this title.
(f) If the ALJ grants a stay under Sec. 1005.22(b) of this title,
immediately after the judicial ruling is completed.
(g) Sixty days after the respondent receives the DAB's decision
imposing a civil money penalty if the respondent has not requested a
stay of the decision under Sec. 1005.22(b) of this title.
Sec. 402.115 Collection of penalty or assessment.
(a) Once a determination by HHS has become final, HCFA is
responsible for the collection of any penalty or assessment.
(b) The General Counsel may compromise a penalty or assessment
imposed under this part, after consultation with HCFA or OIG, and the
Federal government may recover the penalty or assessment 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 United States or a State agency may deduct the amount of a
penalty and assessment when finally determined, or the amount agreed
upon in compromise, from any sum then or later owing to the respondent.
(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 the United States
to collect a penalty under this part.
Subpart C--Exclusions [Reserved]
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; Program No. 93.774, Medicare--
Supplementary Medical Insurance Program; and Program No. 93.778,
Medical Assistance Program)
Dated: July 7, 1998.
Nancy-Ann Min De Parle,
Administrator, Health Care Financing Administration.
[FR Doc. 98-33010 Filed 12-11-98; 8:45 am]
BILLING CODE 4120-01-P
