[Federal Register Volume 63, Number 57 (Wednesday, March 25, 1998)]
[Proposed Rules]
[Pages 14393-14402]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-7506]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of Inspector General
42 CFR Parts 1003, 1005 and 1006
RIN 0991-AA90
Health Care Programs: Fraud and Abuse; Revised OIG Civil Money
Penalties Resulting From the Health Insurance Portability and
Accountability Act of 1996
AGENCY: Office of Inspector General (OIG), HHS.
ACTION: Notice of proposed rulemaing.
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SUMMARY: This proposed rule would revise the OIG's civil money penalty
(CMP) authorities, in conjunction with new and revised provisions set
forth in the Health Insurance Portability and Accountability Act of
1996. Among other provisions, this proposed rulemaking would codify new
CMPs for: Excluded individuals retaining ownership or control interest
in an entity; upcoding and claims for medically unnecessary services;
offering inducements to beneficiaries; and false certification of
eligibility for home health services. This rule would also codify a
number of technical and conforming changes consistent with the OIG's
existing sanction authorities.
DATES: To assure consideration, public comments must be delivered to
the address provided below by no later than 5 p.m. on May 26, 1998.
ADDRESSES: Pleas mail or deliver your written comments to the following
address: Office of Inspector General, Department of Health and Human
Services, Attention: OIG-25-P, Room 5527 Cohen Building, 330
Independence Avenue, S.W., Washington, D.C. 20201.
Because of staffing and resource limitations, we cannot accept
comments by facsimile (FAX) transmission. In commenting, please refer
to file code OIG-25-P.
Comments will be available for public inspection April 8, 1998 in
Room 5524 of the Office of Inspector General at 330 Independence
Avenue, S.W., Washington, D.C., on Monday through Friday of each week
from 8 a.m. to 4:30 p.m., (202) 619-0089.
FOR FURTHER INFORMATION CONTACT:
Joel Schaer, (202) 619-0089, OIG Regulations Officer.
SUPPLEMENTARY INFORMATION:
I. Background
A. Overview of the OIG Civil Money Penalty Authorities
In 1981, Congress enacted the civil money penalty (CMP) statute,
section 1128A of the Social Security Act (the Act) (42 U.S.C. 1320a-
7a), as one of several administrative remedies to combat increases in
health care fraud and abuse. The CMP law authorized the Secretary and
the inspector General to impose CMPs, assessment and program exclusions
on individuals and entities whose wrongdoing caused injury to
Department programs or their beneficiaries. The statutory penalty and
assessment amounts under section 1128A generally provided for a penalty
of no more than $2,000 for each item or service at issue, and an
assessment in lieu of damages of not more than twice the amount
claimed.
Since 1981, Congress has greatly expanded the CMP provisions to
apply to numerous types of fraudulent and abusive activities related to
Medicare and State health care programs. Specifically, new statutory
provisions provided the Secretary and the OIG with the authority to
sanction such improper practices as: (1) Hospitals paying physicians to
reduce or limit services provided to program beneficiaries; (2) health
maintenance organizations (HMOs) failing to provide medically necessary
items and services; (3) individuals and entities engaging in certain
misleading or fraudulent practices with respect to the marketing and
selling of supplemental (Medigap) insurance policies; and (4) hospitals
failing to examine and treat, or to properly transfer, emergency room
patients (patient dumping).
In 1987, the Medicare and Medicaid Patient and Program Protection
Act (MMPPPA), Public Law 100-93, was enacted to improve the ability of
the Department ``to protect the Medicare and Medicaid programs from
fraud and abuse, and to protect the beneficiaries of these programs
from incompetent practitioners and from inappropriate and inadequate
care.'' The MMPPPA significantly revised and expanded the OIG's CMP and
exclusion sanction authorities. Final OIG regulations addressing
amendments to out exclusion and CMP authorities resulting from Public
Law 100-93 were published in the Federal Register on January 29, 1992
(57 FR 3298).
B. The Health Insurance Portability and Accountability Act of 1996
In the first significant amendments to the OIG's sanction
authorities since MMPPPA, the Health Insurance Portability and
Accountability Act (HIPAA) of 1996, Public Law 104-191, sets forth a
number of important improvements to the OIG's authorities intended to
curtail and eliminate health care fraud and abuse. With regard to the
sanction authorities, HIPAA expanded the scope of certain basic fraud
authorities by extending the application of current CMP provisions
beyond those funded by the Department to include all Federal health
care programs. The HIPAA also significantly revised and strengthened
the OIG's existing CMP authorities pertaining to violations under
Medicare and the State health care programs.
Among other provisions related to our CMP authority, HIPAA (1)
increases the maximum penalty amounts per false claim from $2,000 to
$10,000; (2) allows CMPs to be assessed for incorrect coding, medically
unnecessary services, and persons offering remuneration to induce a
program beneficiary to order from a particular provider or supplier
receiving Medicare or State health care funds; and (3) establishes a
new CMP for the false certification of eligibility for Medicare-covered
home health services.
While the majority of these revisions to the OIG's CMP authorities
under section 1128A of the Act are effective on January 1, 1997,\1\
these provisions do allow the Department some policy discretion in
their implementation. As a result, we are developing this proposed
rulemaking to address these HIPAA penalty provisions, along with other
technical revisions and conforming policy changes to the OIG's sanction
authorities codified in 42 CFR parts 1003, 1005, and 1006.
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\1\ Section 232 of HIPAA applies to certifications made on or
after August 21, 1996, the enactment date of the statute.
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[[Page 14394]]
II. Provisions of the Proposed Rule
A. Extension of Current CMP Authority to All Federal Health Care
Programs
Section 231(a) of HIPAA amended section 1128A of the Act to allow
for the Federal government-wide application of CMPs for false claims to
other health care programs, as defined in section 1128B(f) of the Act.
Specifically, under section 231(a), the Medicare and State health care
programs' CMP authorities for specified fraud and abuse violations,
like the Medicare criminal statutes, will now apply to similar
violations involving all Federal health care programs, such as CHAMPUS,
Veterans, and the Public Health Service programs. (The Federal Employee
Health Benefits Plan is expressly excluded from this definition of
``Federal health care program.'')
As a result, we would amend Secs. 1003.100(b)(1)(i),
1003.102(a)(3), 1003.109(a), as well as the definitions for the terms
claim and exclusion set forth in Sec. 1003.101, to apply CMP coverage
to all applicable Federal government health care programs. The
definition for the term program currently set forth in Sec. 1003.101
would also be deleted.
B. Increases in Civil Money Penalty Amounts
Prior to HIPAA, many of the CMP and assessment amounts authorized
by section 1128A of the Act, and codified in Sec. 1003.103 of the OIG
regulations, remained consistent with the penalty and damage amounts
contained in the False Claims Act (FCA) (31 U.S.C. 3729), and had not
been revised since the 1986 amendments to that Act. Section 231(c) of
HIPAA generally increases the amount of authorized CMPs from $2,000 to
$10,000 per item or service improperly claimed or prohibited practice,
and raises the authorized assessment amount from double to triple the
amount claimed. This amendment to the OIG's authorized CMP amounts is
consistent with the penalty and assessment amounts in the FCA which
were increased by statute in 1986.
In accordance with section 231(c) of HIPAA, we are proposing to
amend Sec. 1003.103(a) to address the increased penalty amount, and
Sec. 1003.104 to address the revised assessment amount.
C. Clarification of the Knowledge Standard for Civil Money Penalties
The CMP statute was originally intended to provide an alternative
administrative enforcement tool when injury to government programs and
beneficiaries was not redressed through traditional civil or criminal
remedies. Section 1128A of the Act and our implementing regulations
have applied the ``knows or should know'' standard of proof for the
Medicare and State health are programs' CMP provisions regarding false
claims and other prohibited acts. The term ``should know'' has
historically placed a duty on health care providers to use ``reasonable
diligence'' to ensure that claims submitted to Medicare were true and
accurate. The reason this standard was chosen was that the Medicare
system relies heavily on the honesty and good faith of providers in
submitting their claims. (The ``should know'' standard did not impose
liability for honest mistakes; if the provider exercised reasonable
diligence and still made a mistake, the provider was not liable.)
However, to make the knowledge standard consistent with the FCA,
section 231(d) of HIPAA defined the term ``should know'' to mean
``reckless disregard'' or ``deliberate ignorance'' of the truth, with
no proof of specific intent required. Under the newly defined ``should
know'' standard in these proposed regulations, individuals and entities
would only be liable if they act with deliberate ignorance or reckless
disregard of information pertaining to the falsity of a claim or other
fraud. No specific intent to defraud is required. The terms should know
and should have known would be specifically defined in Sec. 1003.101,
with corresponding revisions made in Secs. 1003.100(b)(1)(i) and
1003.102(a) and (b).
In addition, we are proposing to add a new paragraph (e) to
Sec. 1003.102, defining the term ``knowingly,'' to clarify
congressional intent to apply the FCA standard of knowledge to the
presentment of a claim under the CMP law.
D. New Civil Money Penalty for Excluded Individuals Retaining Ownership
or Control Interest in a Participating Entity
Prior to HIPAA, if an individual retained a direct or indirect
ownership or control interest in, or had a management role with, a
health care entity that participates in Medicare or any State health
care program after the individual had been excluded, the entity itself
was at risk of exclusion under section 1128(b)(8) of the Act for as
long as the individual maintained his or her relationship with that
entity. However, the individual faced no additional liability unless he
or she filed, or caused to be filed, a claim for reimbursement. This
created a major loophole through which excluded individuals were often
able, without penalty, to continue to reap the benefit of participation
in Medicare and the State health care programs while excluded.
Section 231(b) of HIPAA specifically set forth new CMP authority
designed to deter such affiliations by subjecting the excluded
individual to a CMP of up to $10,000 for each day an excluded
individual retained a prohibited relationship with a participating
entity. This new CMP provision is to apply only to those with an
ownership or control interest in a participating entity who know, or
should know, of the action constituting the basis for the exclusion, or
any excluded persons who retain positions as officers or managing
employees of a participating entity. The imposition of the new CMP
authority against an excluded individual will prevent excluded parties
from continuing to benefit from government health care financing
programs through indirect participation.
Under Sec. 1003.102, Basis for civil money penalties and
assessments, we propose to add a new paragraph (b)(11) to codify this
new authority. Conforming revisions are also being proposed to
Sec. 1003.100, Basis and purpose, through the addition of a new
paragraph (b)(1)(xi), and to Sec. 1003.103, Amount of penalty, through
the addition of a new paragraph (h). In addition, technical changes are
being proposed to Secs. 1003.105 and 1003.106.
E. New Civil Money Penalties for the Submission of Claims for Upcoding
and for Medically Unnecessary Services
The OIG has historically viewed as unlawful under the statute (1)
the claiming of an inappropriately elevated medical procedure code in
order to obtain program reimbursement exceeding the amount allowed for
the item or service rendered (upcoding); (2) a pattern of claiming
reimbursement for services that an individual or entity knows, or
should know, are not medically necessary; and (3) the routine waiver of
Medicare part B copayments and deductibles. To clarify that these
actions are unlawful practices, section 231(e) of HIPAA expressly
rendered upcoding and the claiming of medically unnecessary services as
violations of the CMP statute. (Section 231(h) of HIPAA further
addressed the practice of routinely waiving deductible and coinsurance
amounts, and is discussed below in section F.)
Section 231(e) of HIPAA establishes specific CMP authority for a
pattern or practice of submitting claims, or causing claims to be
submitted, based on a code that the person ``knows or should
[[Page 14395]]
know'' will result in greater payment than the code that should have
been claimed.
To codify the upcoding prohibition, we would clarify
Sec. 1003.102(a)(1) of the regulations to indicate that the OIG may
impose a penalty and assessment against any person it determines has
presented or caused to be presented a claim for any item or service
that the person knows, or should have known, was not provided as
claimed, including any claim that is part of a pattern or practice of
claims based on upcoding. A new Sec. 1003.102(a)(6) would also be added
to implement the OIG's authority to impose a CMP and assessment for any
claim for an item or service that was medically unnecessary and part of
a pattern or practice of such claims.
F. New Civil Money Penalty for the Offering of Inducements to
Beneficiaries
Section 231(h) of HIPAA establishes a new CMP against individuals
or entities that know, or should know, that offering remuneration or
inducements to a program beneficiary will influence the patient's
decision to order or receive any item or service from a particular
provider, practitioner or supplier reimbursable under Medicare or the
State health care programs. Remuneration includes both the waiver of
all or part of the coinsurance and deductible amounts, and ``transfers
of items and services for free or for other than fair market value.''
As a result, we are proposing to add a new Sec. 1003.102(b)(12) to
codify the new CMP authority for the offering of inducements to
beneficiaries, with a conforming change also being made with the
addition of a new Sec. 1003.100(b)(1)(xii). In addition, new factors
that take into account the degree of culpability and the amount of
remuneration offered or transferred with respect to this authority are
also being proposed for inclusion in new Sec. 1003.106(a)(1)(i),
(a)(1)(vii) and (b)(2)(iv).
This provision is a separate and distinct authority, completely
independent of the Medicare and State health care program anti-kickback
statute (42 U.S.C. 1320a-7b(b)). Specifically, the anti-kickback
statute is an intent-based statute; that is, in order to provide a
violation it is necessary to show specific intent to induce referrals
or orders for services. Under this new CMP authority, individuals and
entities risk imposition of CMPs if they offer remuneration under
circumstances where they know or should know that it is likely to
influence the selection of the health care provider or service.
For purposes of this provision, we wish to clarify that the
offering of remuneration or inducements to program beneficiaries (other
than increased coverage, reduced cost-sharing amounts and reduced
premium amounts permitted by section 1876 of the Act) to enroll in a
Medicare or Medicaid managed health care plan would violate this
statutory provision, as such plans restrict beneficiaries to particular
providers, practitioners or suppliers.
Statutory exceptions. There are three statutory exceptions to the
definition of remuneration in this CMP provision. The first relates to
waivers for coinsurance and deductibles that meet certain conditions,
the second is for differentials in coinsurance and deductibles as part
of a benefits plan design under certain conditions, and the third is
for incentives given to individuals to promote the delivery of
preventive care as determined by the Secretary. In accordance with
section 231(h) of HIPAA, these three exceptions apply only to this CMP
provision and have no application to the anti-kickback statute.
The first statutory exception relating to the waiver of coinsurance
and deductible amounts exempts from this statutory provision waivers to
indigent beneficiaries or after responsible collection efforts have
failed.\2\ The second exception relating to differentials in
coinsurance and deductible amounts as part of a benefits plan design
applies where (1) The differentials have been disclosed in writing to
all beneficiaries, third-party payors and providers and (2) the
differentials meet standards defined by the Secretary. We do not
interpret the limited exception for differentials as authorizing any
benefit plan design that directly or indirectly attempts to waive a
beneficiary's obligation to pay deductible or coinsurance amounts under
a Federal health care program. For example, a private insurance
company's ``coordination of benefits'' provision does not operate to
relieve a provider of its obligation to bill applicable coinsurance
amounts to Medicare beneficiaries. Of course, a private insurer or
employer may assume responsibility to pay such deductible or
coinsurance amounts for its enrollees. At this time, we are choosing
not to set forth in regulations a definition of differentials in
coinsurance that are part of a plan design. Rather, we are seeking
public comments on how best to define these standards in regulations
for purposes of this provision.
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\2\ In the Balanced Budget Act of 1997, Pub. L. 105-33, a
technical correction was made in section 4331(e)(1) to indicate that
remuneration does not include a waiver of coinsurance and deductible
amounts that are permissible under section 1128B(b)(3) of the Act or
in regulations developed by the Secretary.
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The third exception from the statutory definition of remuneration
under HIPAA protects incentives given to individuals to promote the
delivery of preventive care. (However, the exception does not include
the direct rendering of preventive medical care.) Specifically, the
exception includes the provision of incentives to individuals who are
eligible for benefits under a Federal health care program (as defined
by section 1128B(f) of the Act) where such incentives are provided for
the purpose of inducing individuals to obtain preventive care. The
HIPAA requires the Secretary to identify what constitutes ``preventive
care'' for purposes of this provision. Accordingly, we propose to
define preventive care within the definition of remuneration at
Sec. 1003.101 to mean annual physicals and care associated with, and
integral to, preventing the need for treatment or diagnosis of a
specific illness, symptom, complaint or injury (including, but not
limited to, prenatal and postnatal care, flu shots and immunizations
for childhood diseases, AIDS and HIV testing, mammograms, pap smears
and prostate cancer screenings, eye examinations, treatment for alcohol
and drug addiction, and treatment designed to prevent domestic
violence) where such care is provided or directly supervised by the
medical provider that has provided the incentive.
Examples of incentives permitted under this provision would
include, but would not be limited to, (1) Transportation to and from
preventive care services; (2) car seats, baby formula and child safety
devices provided for participating in prenatal or parenting classes;
and (3) tee shirts, exercise videos and water bottles provided for
participating in a post-cardiac care fitness program. Examples of
impermissible incentives would include, but would not be limited to,
items or services related to the promotion of general health and
fitness (excluding an annual physical), such as health club
memberships, nonprescription vitamins, nutritional supplements and
beauty aids. Also, we believe incentives permitted under section 231(h)
of HIPAA and these regulations would not include cash (or cash
equivalents).
The conference report accompanying this new CMP made it clear that
``this provision (does) not preclude the provision of items and
services of nominal value, including, for example,
[[Page 14396]]
refreshments, medical literature, complimentary local transportation
services, or participation in free health fairs.'' We are interpreting
this statement to mean that the aggregate value of such services
provided to any individual must be nominal. Hence, the frequent
rendering of items and services to any individual may preclude such
items and services as being classified as nominal in value.
G. New Civil Money Penalty for the False Certification of Eligibility
for Home Health Services
Section 232 of HIPAA established a new CMP for false certification
of eligibility to receive home health care. Specifically, under this
provision if a physician falsely certifies the medical necessity for
Medicare-covered home health services, Knowing that the care is not
necessary, he or she may be subject to a CMP of the greater of $5,000
or 3 times the amount of the Medicare payments made for the home health
care services. This provision applies to false certifications made on
or after August 21, 1996. The new authority would be codified in
proposed Secs. 1003.100(b)(1)(xiii), 1003.102(b)(13) and 1003.103(g) of
the regulations.
H. Other Conforming and Technical Regulatory Revisions
In addition to the changes to the OIG regulations at 42 CFR part
1003 designed to comply with the revised CMP sanction provisions
required by HIPAA, we are proposing a number of technical changes in
part 1003 to clarify and expand the applicability of existing
regulations and procedures. In addition, with regard to the
applicability of the appeals of exclusions, CMPs and assessments,
limited changes are also being proposed in 42 CFR part 1005 with regard
to motions to compel discovery and interlocutory appeals to the
Departmental Appeals Board (DAB), and the scope of an administrative
law judge's (ALJ) authority to issue subpoenas duces tecum is being
clarified to include the authority to subpoena documents at or prior to
the administrative hearing.
Section 1003.100, Basis and purpose--The current language in
Sec. 1003.100(b)(1)(viii) provides for the imposition of CMPs and, as
applicable, assessments against persons who have ``submitted certain
prohibited claims against the Medicare program.'' As a technical
change, we propose to delete this language and redesignate the existing
paragraphs accordingly, since many CMPs (including several new CMP
authorities in HIPAA) do not involve the submission of claims as the
prohibited conduct.
Section 1003.102, Basis for civil money penalties and assessments--
We are proposing to delete the current regulatory language currently
set forth in paragraphs (b)(2) and (b)(3) of this section, and reserve
these paragraphs. The authority contained in Sec. 1003.102(b)(2)
addresses CMPs for non-participating physicians billing for actual
charges in excess of the maximum allowable actual charge. The statutory
freeze for actual charges exceeding the maximum allowed has expired,
making this authority no longer valid. Section 1003.102(b)(3) addresses
CMPs for billing for the services of an assistant at routine cataract
surgery. As this authority has now been delegated to the Health Care
Financing Administration, we are proposing to delete it from the OIG
regulations. Conforming changes would also be made through the deletion
of paragraphs (c) and (e) in Sec. 1003.107.
Section 1003.103, Amount of penalty; and section 1003.105,
Exclusion from participation in Medicare and State Health care
programs--We are proposing to update the regulatory language currently
set forth in Secs. 1003.103(e) and 1003.105(a)(1), relating to patient
anti-dumping provisions, consistent with the statutory amendments to
the knowledge standard and penalty amounts.
Section 1003.106, Determinations regarding the amount of the
penalty and assessment--We are proposing to broaden the language in
paragraph (a)(1) of this section to include all existing and new CMP
authorities. In addition, we would amend Sec. 1003.106(b)(5), the
factor addressing financial condition, by deleting the first sentence
in this paragraph. The current language indicates that it should be
considered a mitigating circumstance ``if the imposition of the penalty
or assessment without reduction will jeopardize the ability of the
respondent to continue as a health care provider;; (underling added).
Since this penalty authority is intended to apply not only to direct
providers of health care, but also to those involved in other related
activities and positions (such as a transporter of patients or a CEO of
a drug company), we believe this factor does not represent a generally
applicable standards, and therefore propose deleting this factor.
Section 1003.107, Determinations regarding exclusions--We would
amend paragraph (b) of this section to incorporate reference to the new
CMP authorities being set forth in Sec. 1003.102(b) (11) and (12)
referenced above.
Section 1005.1. Definitions--While the terms ``OIG'' and
``Inspector General'' are defined, respectively, at the beginning of
parts 1001 and 1003, part 1005 does not currently set forth such a
definition. We would revise the definitions section of part 1005 to
include a definition for the term ``Inspector General.''
Section 1005.7. Discovery--We are proposing a revision to
Sec. 1005.7(e) to provide for motions to compel discovery once a
request for production of documents has been received. Presently, the
language in paragraph (e) states that ``[A]fter a party has been served
with a request for production of documents, that party may file for a
protective order.'' However, there is no provision currently
authorizing a motion to compel requested discovery. Thus, the burden is
now on the person who wishes to withhold requested documents to file a
motion, instead of upon the party who has requested the documents, and
who can best explain their relevance. As in the Federal Rules of Civil
Procedure, we believe that motions to compel discovery should be
authorized by these administrative hearing regulations, so that the
party requesting discovery will be responsible for invoking a judicial
determination of a discovery dispute. The revision we propose would
allow either party to object to discovery requests, and if a motion to
compel is filed, a request for a protective order may be requested in
response.
Specifically, we would revise Sec. 1005.7(e) to make clear that a
party has a right to object to discovery requests without requiring
that party to file for a protective order, leaving it to the party
seeking the documents to justify why access is appropriate in a motion
to compel discovery. Any objections to production of documents would
have to be filed with the opposing party within 15 days of receiving
the discovery request. The party seeking the production of documents
may then file a motion to compel discovery within the next 15 days or
any other time frame set by the ALJ. We welcome comments on this
clarifying change.
Section 1005.9. Subpoenas for attendance at hearing--We would
revise paragraph (b) of Sec. 1005.9 to clarify that this provision is
intended to authorize an administrative law judge to issue a subpoena
to any individual to attend the hearing and to provide documentary
evidence at or prior to the hearing. The existing language in this
section has been misconstrued in some instances as only authorizing the
production of documents at the hearing. We are clarifying this language
to
[[Page 14397]]
indicate that an ALJ may issue a subpoena duces tecum requiring
documents to be produced before the hearing. We believe the proposed
language should fully clarify the intent of this provisions.
Section 1005.15, The hearing and burden of proof--Section 1005.2(b)
of the regulations defines a ''respondent'' as the party appealing a
CMP, and a ``petitioner'' as the party appealing an exclusion. The
existing language in paragraph (b) of Sec. 1005.15, however, currently
incorrectly uses the term ``respondent'' to refer to several exclusion
authorities. We propose revising Sec. 1005.15(b) to make the language
in this paragraph consistent with the way parties are currently defined
in Sec. 1005.2(b).
Section 1005.21, Appeal to DAB--We would revise the current
language in paragraph (d) of this section to allow for interlocutory
appeals to the DAB in one limited situation; that is, on the timeliness
of filing of the hearing request. Otherwise, in many cases a final
ruling on the timeliness of a hearing request will be rendered
meaningless because the hearing will take place before an appeal of an
appeal of an ALJ's ruling on timeliness can occur.
Deletion of reference to the Office of the General Counsel in
Secs. 1003.126, 1003.128 and 1006.4--We would make a technical revision
in Secs. 1003.126, 1003.128(b) and 1006.4(b)(2) by deleting the current
reference to ``the Office of the General Counsel.'' Section 1003.126
gives the Office of the General Counsel (OGC) the exclusive authority
to settle a case prior to a final decision of the Secretary. Paragraph
(b) of Sec. 1003.128 authorizes the OGC ``after consultation with the
IG'' to compromise any penalty and assessment imposed by the Secretary.
Section 1006.4(b) addresses attendance at investigational inquiries.
The current language indicates that both representatives of the OIG and
the OGC may attend and ask questions. With the consolidation of the IG
Division of Office of the General Counsel into the OIG, these
references to the OGC are no longer appropriate, and the regulatory
language should be revised to give the OIG exclusive authority to
settle or compromise cases, and to attend investigational inquiries.
III. Regulatory Impact Statement
Executive Order 12866 and Regulatory Flexibility Act
The Office of Management and Budget (OMB) has reviewed this
proposed rule in accordance with the provisions of Executive Order
12866 and the Regulatory Flexibility Act (5 U.S.C. 601-612), and has
determined that it does not meet the criteria for a significant
regulatory action. Executive Order 12866 directs agencies to assess all
costs and benefits of available regulatory alternatives and, when
rulemaking is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health, safety distributive and equity effects). In addition, under the
Regulatory Flexibility Act, if a rule has a significant economic effect
on a number of businesses the Secretary must specifically consider the
economic effect of a rule on small business entities and analyze
regulatory options that could lessen the impact of the rule.
As indicated above, the provisions contained in this proposed
rulemaking are primarily intended to comply with amended statutory
authority by (1) expanding the protection of certain basic fraud
authorities beyond the Department to include other Federal health care
programs, (2) strengthening current legal authorities pertaining to our
imposition of CMPs against individuals and entities engaged in
prohibited actions and activities, and (3) codifying other new and
revised OIG sanction authorities set forth in Public Law 104-191.
We believe that these regulations will not have a significant
ecomonic effect on Federal, State or local economies, nor will they
have a significant economic effect on a substantial number of small
entities. The CMP statute, as enacted by Congress in 1981, was an
administrative remedy to combat increases in health care fraud. The CMP
provisions have been expanded upon since their original enactment to
counteract evolving fraudulent and abusive practices. These proposed
regulations merely continue the approach of authorizing CMP sanctions
against individuals and entities that abuse Federal and State health
care programs as emerging fraudulent practices are identified. These
remedial sanctions are addressed to a limited group of individuals and
entities; that is, providers who abuse the Federal health care programs
to the detriment of the beneficiaries and the public fisc.
The revised CMP provisions set forth in this proposed rule that
address the upcoding of claims, and claims for medically unnecessary
services, are essentially clarifications of existing OIG authorities.
In addition, with respect to the new penalty authorities being
codified, such as the CMP for excluded individuals retaining ownership
or control interest in an entity and the CMP for the false
certification of eligibility for home health services, these provisions
target egregious conduct that is limited in scope and nature.
The proposed regulations would implement congressional intent in
the area of fraud and abuse in health care programs. The regulations
target areas of fraud, not industry; the scope of effect is narrow and
targeted specifically to those individuals defrauding or abusing the
Medicare and State health care programs. There should be no increase in
paperwork or reporting burdens in any pre-existing programs as a result
of these regulations.
Similarly, while increases in the authorized CMP amounts from
$2,000 to $10,000 per false item or service claimed or prohibited
practice may increase overall penalty amounts and recoveries, the
process for deriving any settlement will remain essentially the same.
While the rise in the amount of penalty from $2,000 to $10,000 is an
increase, it is only proportionate to the amount of fraud against the
public fisc. It also serves as a deterrent to health care fraud,
consistent with congressional intent in the enactment of HIPAA. This
penalty amount increase should not significantly affect the health case
industry; the only effect is remedial against those who perpetrate
fraud against the system and thus violate Federal and State law. This
increased maximum amount per false claim or prohibited practice may, in
certain circumstances, reduce OIG investigative costs since fewer
individual false claims will need to be developed and proved in order
for the Government to recover appropriate penalties and assessments. In
addition, we believe settlements with individuals and entities may
become more likely since the OIG's bargaining power is now enhanced in
the face of greater potential financial exposure for the individual or
entity.
Overall, we believe that any increase in CMP recoveries will not be
significant since the vast majority of individuals, organizations and
entities addressed by these regulations do not engage in such
prohibited activities and practices. As indicated, these proposed
regulations are narrow in scope and effect, serve to codify or revise
existing OIG sanctions, comport with congressional and statutory
intent, and strengthen the Department legal authorities against those
who defraud or otherwise act improperly against the Federal and State
health care program. Since there is no significant economic effect on
the industry as a whole, there is little likelihood of effect on
Federal or State expenditures to implement these
[[Page 14398]]
regulations. While some sanctions addressed in this rule may have a
minor impact on small entities, it is the nature of the violation and
not the size of the entity that will result in an action by the OIG. In
conclusion, we believe that the aggregate economic impact of these
regulations will be minimal, affecting only those limited few who have
chosen to engage in prohibited arrangements, schemes and practices in
violation of statutory intent. As a result, we have conducted, and the
Secretary certifies, that this proposed rule should not have a
significant economic impact on a substantial number of small entities
that would require a regulatory flexibility analysis.
Paperwork Reduction Act
This proposed rule would impose no new reporting or recordkeeping
requirements necessitating clearance by OMB.
List of Subjects
42 CFR Part 1003
Administrative practice and procedure, Fraud, Grant programs--
health, Health facilities, Health professions, Maternal and child
health, Medicaid, Medicare, Penalties.
42 CFR Part 1005
Administrative practice and procedure, Fraud, Penalties.
42 CFR Part 1006
Administrative practice and procedure, Fraud, Investigations,
Penalties.
Accordingly, 42 CFR Parts 1003, 1005 and 1006 is proposed to be
amended as set forth below:
PART 1003--[AMENDED]
A. Part 1003 would be amended as follows:
1. The authority citation for part 1003 would be revised to read as
follows:
Authority: 42 U.S.C. 1302, 1320-7, 1320a-7a, 1320b-10,
1395dd(d)(1). 1395mm, 1395nn(g), 1395ss(d), 1396b(m), 11131(c) and
11137(b)(2).
2. Section 1003.100 would be revised to read as follows:
Sec. 1003.100 Basis and purpose.
(a) Basis. This part implements sections 1128(c), 1128A, 1140,
1876(i)(6), 1877(g), 1882(d) and 1903(m)(5) of the Social Security Act,
and sections 421(c) and 427(b)(2) of Pub.L. 99-660 (42 U.S.C. 1320a-7,
1320a-7a,1320a-7(c), 1320b(10), 1395mm, 1395ss(d), 1396b(m), 11131(c)
and 11137(b)(2)).
(b) Purpose. This part--
(1) Provides for the imposition of civil money penalties and, as
applicable, assessments against persons who--
(i) Have knowingly submitted certain prohibited claims under
Federal health care programs;
(ii) Seek payment in violation of the terms of an agreement or a
limitation on charges or payments under the Medicare program, or a
requirement not to charge in excess of the amount permitted under the
Medicaid program;
(iii) Give false or misleading information that might affect the
decision to discharge a Medicare patient from the hospital;
(iv) Fail to report information concerning medical malpractice
payments or who improperly disclose, use or permit access to
information reported under part B of title IV of Public Law 99-660, and
regulations specified in 45 CFR part 60;
(v) Misuse certain Departmental and Medicare and Medicaid program
words, letters symbols or emblems;
(vi) Violate a requirement of section 1867 of the Act Sec. 489.24
of this title;
(vii) Substantially fail to provide an enrollee with required
medically necessary items and services, or engage in certain marketing,
enrollment, reporting, claims payment, employment or contracting
abuses, or that do not meet the requirements for physician incentive
plans for Medicare specified in Secs. 417.479(d) through (f) of this
title;
(viii) Present or cause to be presented a bill or claim for
designated health services (as defined in Sec. 411.351 of this title)
that they know, or should know, were furnished in accordance with a
referral prohibited under Sec. 411.353 of this title;
(ix) Have collected amounts that they know or should know were
billed in violation of Sec. 422.353 of this title and have not refunded
the amounts collected on a timely basis;
(x) Are physicians or entities that enter into an arrangement or
scheme that they know or should know has as a principal purpose the
assuring of referrals by the physician to a particular entity which, if
made directly, would violate the provisions of Sec. 411.353 of this
title;
(xi) Are excluded, and who retain an ownership or control interest
of five percent or more in an entity participating in Medicare or a
State health care program, or who are officers or managing employees of
such an entity (as defined in section 1126(b) of the Act);
(xii) Offer inducements to influence Medicare or State health care
program beneficiaries to order or receive particular items or services;
or
(xiii) Are physicians who knowingly misrepresent that a Medicare
beneficiary requires home health services;
(2) Provides for the exclusion of persons from the Medicare or
State health care programs against whom a civil money penalty or
assessment has been imposed, and the basis for reinstatement of persons
who have been excluded; and
(3) Sets forth the appeal rights of persons subject to a penalty,
assessment and exclusion.
3. Section 1003.101 would be amended by republishing the
introductory text; by revising the definition for the terms Claim and
Exclusion; by removing the terms General Counsel and Program; and by
adding, in alphabetical order, definitions for the terms Remuneration
and Should know, or should have known to read as follows:
Sec. 1003.101 Definitions.
For purposes of this part:
* * * * *
Claim means an application for payment for an item or service to a
Federal health care program (as defined in section 1128B(f) of the
Act).
* * * * *
Exclusion means the temporary or permanent barring of a person from
participation in a Federal health care program (as defined in section
1128B(f) of the Act).
* * * * *
Remuneration, as set forth in Sec. 1003.102(b)(12), is consistent
with the definition contained in section 1128A(i)(6) of the Act. For
purposes of this definition of remuneration, preventive care means
annual physicals and care associated with, and integral to, preventing
the need for treatment or diagnosis of a specific illness, symptom,
complaint or injury.
* * * * *
Should know or should have known means that a person, with respect
to information--
(1) Acts in deliberate ignorance of the truth or falsity of the
information; or
(2) 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.
* * * * *
4. Section 1003.102 would be amended by revising the introductory
text of paragraph (a) and paragraphs (a)(1) and (a)(3); republishing
the introductory text of paragraph (a)(4) and revising paragraphs
(a)(4)(iii) and paragraph (a)(5); adding a new
[[Page 14399]]
paragraph (a)(6); republishing the introductory text of paragraph (b)
and revising introductory paragraph (b)(1); removing and reserving
paragraphs (b)(2) and (b)(3); revising paragraphs (b)(4) and (b)(9);
and by adding new paragraphs (b)(11) through (b)(13) and (e) to read as
follows:
Sec. 1003.102 Basis for civil money penalties and assessments.
(a) The OIG may impose a penalty and assessment against any person
whom it determines in accordance with this part has knowingly
presented, or caused to be presented, a claim which is for--
(1) An item or service that the person knew, or should have known,
was not provided as claimed, including a claim that is part of a
pattern or practice of claims based on codes that the person knows or
should know will result in greater payment to the person than the code
applicable to the item or service actually provided;
* * * * *
(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 made;
(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--
* * * * *
(iii) Represented to the patient at the time the service was
furnished that the physician was certified in a medical specialty board
when he or she was not so certified;
(5) A payment that such person knows, or should know, may not be
made under Sec. 411.353 of this title; or
(6) An item or service that is medically unnecessary, and which is
part of a pattern or practice of such claims.
(b) The OIG may impose a penalty, and where authorized, an
assessment against any person (including an insurance company in the
case of paragraphs (b)(5) and (b)(6) of this section) whom it
determines in accordance with this part--
(1) Has knowingly presented or caused to be presented a request for
payment in violation of the terms of--
* * * * *
(4) Has knowingly given or caused to be given to any person, in the
case of inpatient hospital services subject to the provisions of
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.
* * * * *
(9) Has not refunded on a timely basis, as defined in
Sec. 1003.101, amounts collected as the result of billing an
individual, third party payer or other entity for a designated health
service that was provided in accordance with a prohibited referral as
described in Sec. 411.353 of this title.
* * * * *
(11) Who is not an organization, agency or other entity, and who is
excluded from participating in Medicare or a State health care program
in accordance with sections 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 five percent or more in an entity that participates in
Medicare or a State health care program; or
(ii) Is an officer or managing employee (as defined in section
1126(b) of the Act) of such entity.
(12) Offers or transfers remuneration (as defined in section
1128(i)(6) of the Act) to any individual eligible for benefits under
Medicare or a State health care program, that such person knows or
should know is likely to influence such individual to order or to
receive from a particular provider, practitioner or supplier any item
or service for which payment may be made, in whole or in part, under
Medicare or a State health care program.
(13) Is a physician and who executes a document falsely by
certifying that a Medicare beneficiary requires home health services
when the physician knows that the beneficiary does not meet the
eligibility requirements set forth in sections 1814(a)(2)(C) or
1835(a)(2)(A) of the Act.
* * * * *
(e) For purposes of this section, the term ``knowingly'' is defined
consistent with the definition set forth in the Civil False Claims Act
(31 U.S.C. 3729(b)).
5. Section 1003.103 would be amended by revising paragraphs (a) and
(e); and by adding new paragraphs (g) and (h) to read as follows:
Sec. 1003.103 Amount of penalty.
(a) Except as provided in paragraphs (b) through (h) of this
section, the OIG may impose a penalty of not more than--
(1) $2,000 for each wrongful act occurring before January 1, 1997
that is subject to a determination under Sec. 1003.102; and
(2) $10,000 for each wrongful act occurring on or after January 1,
1997 that is subject to a determination under Sec. 1003.102.
* * * * *
(e) For violations of section 1867 of the Act or Sec. 489.24 of
this title, the OIG may impose--
(1) Against each participating hospital with an emergency
department, a penalty of not more than $50,000 for each negligent
violation occurring on or after May 1, 1991, except that it the
participating hospital has fewer than 100 State-licensed, Medicare-
certified beds on the date the penalty is imposed, the penalty will not
exceed $25,000; and
(2) Against each responsible physician, a penalty of not more than
$50,000 for each negligent violation occurring on or after May 1, 1991.
* * * * *
(g) For violations of Sec. 1003.102(b)(3) the OIG may impose a
penalty of not more than the greater of--
(1) $5,000; or
(2) Three times the amount of Medicare payments for home health
services that are made with regard to the false certification of
eligibility by a physician in accordance with sections 1814(a)(2)(C) or
1835(a)(2)(A) of the Act.
(h) The OIG may impose a penalty of not more than $10,000 per day
for each day that the prohibited relationship described in
Sec. 1003.102(b)(11) occurs. 6.
6. Section 1003.104 would be revised to read as follows:
Sec. 1003.104 Amount of assessment.
(a) The OIG may impose an assessment, where authorized, in
accordance with Sec. 1003.102, of not more than--
(1) Two times the amount for each item or service wrongfully
claimed prior to January 1, 1997; and
(2) Three times the amount for each item or service wrongfully
claimed on or after January 1, 1997.
(b) The assessment is in lieu of damages sustained by the
Department or a State agency because of that claim.
7. Section 1003.105 would be amended by revising paragraph (a)(1);
removing existing paragraph (b)(1); and by redesignating existing
paragraphs (b)(2) and (b)(3) respectively as new paragraphs (b)(1) and
(b)(2) to read as follows:
Sec. 1003.105 Exclusion from participation in Medicare and State
health care programs.
(a)(1) Except as set forth in paragraph (b) of this section, the
following persons may be subject, in lieu of or in addition to any
penalty or assessment, to an exclusion from participation in Medicare
for a period of time determined under Sec. 1003.107. There will be
exclusions from State health care
[[Page 14400]]
programs for the same period as the Medicare exclusion for any person
who--
(i) Is subject to a penalty or assessment under Sec. 1003.102(a),
(b)(1), (b)(4), (b)(11) or (b)(12); or
(ii) Commits a gross and flagrant, or repeated, violation of
section 1867 of the Act or Sec. 489.24 of this title on or after May 1,
1991. For purposes of this section, a gross and flagrant violation is
one that presents an imminent danger to the health, safety or well-
being of the individual who seeks emergency examination and treatment
or places that individual unnecessarily in a high-risk situation.
* * * * *
8. Section 1003.106 would be amended by revising paragraph (a)(1);
republishing the introductory text of paragraph (b) and revising
paragraphs (b)(2) and (b)(5); revising the introductory text of
paragraph (c) and paragraph (c)(3); redesignating existing paragraphs
(d) and (e) as new paragraphs (e) and (f); revising the introductory
text of new redesignated paragraph (e); and by adding a new paragraph
(d) to read as follows:
Sec. 1003.106 Determinaitons regarding the amount of the penalty and
assessment.
(a) Amount of penalty. (1) In determining the amount of any penalty
or assessment in accordance with Sec. 1003.102(a), (b)(1), (b)(4) and
(b)(9) through (b)(13), the Department will take into account--
(i) The nature of the claim, referral arrangement or other
wrongdoing;
(ii) The degree of culpability of the person against whom a civil
money penalty is proposed;
(iii) The history of prior offenses of the person against whom a
civil money penalty is proposed;
(iv) The financial condition of the person against whom a civil
money penalty is proposed;
(v) The completeness and timeliness of the refund with respect to
Sec. 1003.102(b)(9);
(vi) The amount of financial interest involved with respect to
Sec. 1003.102(b)(11);
(vii) The amount of remuneration offered or transferred with
respect to Sec. 1003.102(b)(12); and
(viii) Such other matters as justice may require.
* * * * *
(b) Determining the amount of the penalty or assessment. As
guidelines for taking into account the factors listed in paragraph
(a)(1) of this section, the following circumstances are to be
considered--
* * * * *
(2) Degree of culpability. It should be considered a mitigating
circumstance if the claim or request for payment for the item or
service was the result of an unintentional and unrecognized error in
the process the respondent followed in presenting claims or requesting
payment, and corrective steps were taken promptly after the error was
discovered. It should be considered an aggravating circumstance if--
(i) The respondent knew the item or service was not provided as
claimed or if the respondent knew that the claim was false or
fraudulent;
(ii) The respondent knew that the items or services were furnished
during a period that he or she had been excluded from participation and
that no payment could be made as specified in Secs. 1003.102(a)(3) and
1003.102(b)(11), or because payment would violate the terms of an
assignment or an agreement with a State agency or other agreement or
limitation on payment under 1003.102(b);
(iii) The respondent knew that the information could reasonably be
expected to influence the decision of when to discharge a patient from
a hospital; or
(iv) The respondent knew that the offer or transfer or remuneration
described in 1003.102(b)(12) would influence a beneficiary to order or
receive particular items or services under Medicare or a State health
care program.
* * * * *
(5) Final condition. In all cases, the resources available to the
respondent will be considered when determining the amount of the
penalty and assessment.
* * * * *
(c) In determining the amount of the penalty and assessment to be
imposed for every item or service or incident subject to a
determination under Secs. 1003.102 (a), (b)(1) and (b)(4)--
* * * * *
(3) Unless there are extraordinary mitigating circumstances, the
aggregate amount of the penalty and assessment should never be less
than double the approximate amount of damages and costs (as defined in
paragraph (f) of this section) sustained by the United States, or any
State, as a result of claims or incidents subject to a determination
under Secs. 1003.102 (a), (b)(1) and (b)(4).
(d) In considering the factors listed in paragraph (a)(4) of this
section for violations subject to a determination under
Sec. 1003.103(e), the following circumstances are to be considered, as
appropriate, in determining the amount of any penalty--
(1) Degree of culpability. It would be a mitigating circumstance if
the respondent hospital had appropriate policies and procedures in
place, and had effectively trained all of its personnel in the
requirements of section 1867 of the Act and Sec. 489.24 of this title,
but an employee or responsible physician acted contrary to the
respondent hospital's policies and procedures.
(2) Seriousness of individual's condition. It would be an
aggravating circumstance if the respondent's violation(s) occurred with
regard to an individual who presented to the hospital a request for
treatment of a medical condition that was clearly an emergency, as
defined by Sec. 489.24(b) of this title.
(3) Prior offenses. It would be an aggravating circumstance if
there is evidence that at any time prior to the current violation(s)
the respondent was found to have violated any provision of section 1867
of the Act or Sec. 489.24 of this title.
(4) Financial condition. In all cases, the resources available to
the respondent would be considered when determining the amount of the
penalty. A respondent's audited financial statements, tax returns or
financial disclosure statements, as appropriate, will be reviewed by
OIG auditors to make a determination with respect to the respondent's
financial condition.
(5) Nature and circumstances of the incident. It would be
considered a mitigating circumstance if an individual presented a
request for treatment, but subsequently exhibited conduct that
demonstrated a clear intent to leave the respondent hospital
voluntarily. In reviewing such circumstances, the OIG would evaluate
the respondent's efforts to--
(i) Provide the services required by section 1867 of the Act and
Sec. 489.24 of this title, despite the individual's withdrawal of the
request for examination or treatment; and
(ii) Document any attempts to inform the individual (or his or her
representative) of the risks of leaving the respondent hospital without
receiving an appropriate medical screening examination or treatment,
and obtain informed consent from the individual (or his or her
representative) prior to the individual's departure from the respondent
hospital.
(6) Other matters as justice may require. (i) It would be
considered a mitigating circumstance if the respondent hospital--
(A) Developed and implemented a corrective action plan;
[[Page 14401]]
(B) Took immediate appropriate action against any hospital
personnel or responsible physician who violated section 1867 of the Act
or Sec. 489.24 of this title prior to any investigation of the
respondent hospital by HCFA; or
(C) Is a rural or county-owned facility that is faced with severe
physician staffing and financial deficiencies.
(ii) It would be considered an aggravating circumstance if an
individual was severely harmed or died as a result of the respondent's
violation of section 1867 of the Act or Sec. 489.24 of this title.
(iii) Other circumstances of an aggravating or mitigating nature
will be taken into account if, in the interests of justice, they
require either a reduction of the penalty or an increase in order to
assure the achievement of the purposes of this part.
(e) In considering the factors listed in paragraph (a)(5) of this
section for violations subject to a determination under
Sec. 1003.103(f), the following circumstances are to be considered, as
appropriate, in determining the amount of any penalty--
* * * * *
9. Section 1003.107 would be amended by revising paragraph (b);
removing existing paragraph (c) and (e); redesignating paragraph (d) as
new paragraph (c) and revising it to read as follows:
Sec. 1003.107 Determinations regarding exclusion.
* * * * *
(b) With respect to determinations to exclude a person under
Secs. 1003.102(a), (b)(1), (b)(4), (b)(11), or (b)(12), the Department
considers those circumstances described in Sec. 1003.106(b). Where
there are aggravating circumstances with respect to such
determinations, the person should be excluded.
(c) The guidelines set forth in this section are not binding.
Nothing in this section limits the authority of the Department to
settle any issue or case as provided by Sec. 1003.126.
10. Section 1003.109 would be amended by revising the introductory
text of paragraph (a) to read as follows:
Sec. 1003.109 Notice of proposed determination.
(a) If the Inspector General proposes a penalty and, when
applicable, assessment, or proposes to exclude a respondent from
participation in a Federal health care program, as applicable, in
accordance with this part, he or she must deliver or send by certified
mail, return receipt requested, to the respondent written notice of his
or her intent to impose a penalty, assessment and exclusion, as
applicable. The notice includes--
* * * * *
11. Section 1003.126 would be revised to read as follows:
Sec. 1003.216 Settlement.
The Inspector General has exclusive authority to settle any issues
or case, without consent of the ALJ.
12. Section 1003.128 would be amended by revising paragraph (b) to
read as follows:
Sec. 1003.128 Collection of penalty and assessment.
* * * * *
(b) A penalty or assessment imposed under this part may be
compromised by the Inspector General, 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.
* * * * *
PART 1005--[AMENDED]
B. Part 1005 would be amended as follows:
1. The authority citation for part 1005 would continue to read as
follows:
Authority: 42 U.S.C. 405(a), 405(b), 1302, 1320a-7, 1320a-7a and
1320c-5.
2. Section 1005.1 would be amended by adding, in alphabetical
order; a definition for the term Inspector General to read as follows:
Sec. 1005.1 Definitions.
* * * * *
Inspector General (IG) means the Inspector General of the
Department of Health and Human Services or his or her designees.
3. Section 1005.7 would be amended by revising paragraphs (e)(1)
(e)(2) to read as follows:
Sec. 1005.7 Discovery.
* * * * *
(e)(1) When a request for production of documents has been
received, within 15 days the party receiving that request will either
fully respond to the request, or state that the request is being
objected to and the reasons for that objection. If objection is made to
part of an item or category, the part will be specified. Upon receiving
any objections, the party seeking production may then, within 15 days
or any other time frame set by the ALJ, file a motion for an order
compelling discovery. (The party receiving a request for production may
also file a motion for protective order any time prior to the date the
production is due.)
(2) The ALJ may grant a motion for protective order or deny a
motion for an order compelling discovery if the ALJ finds that the
discovery sought--
(i) Is irrelevant;
(ii) Is unduly costly or burdensome;
(iii) Will unduly delay the proceeding; or
(iv) Seeks privileged information
* * * * *
4. Section 1005.9 would be amended by revising paragraph (b) to
read as follows:
Sec. 1005.9 Subpoenas for attendance at hearing.
* * * * *
(b) A subpoena requiring the attendance of an individual in
accordance with paragraph (a) of this section may also require the
individual (whether or not the individual is a party) to produce
evidence authorized under Sec. 1005.7 at or prior to the hearing.
* * * * *
5. Section 1005.15 would be amended by revising the introductory
text of paragraph (b) and paragraph (b)(1) to read as follows:
Sec. 1005.15 The hearing and burden of proof.
* * * * *
(b) With regard to the burden of proof in civil money penalty cases
under part 1003 of this chapter, in Peer Review Organization exclusion
cases under part 1004 of this chapter, and in exclusion cases under
Secs. 1001.701, 1001.901 and 1001.951 of this chapter--
(1) The respondent or petitioner, as applicable, bears the burden
of going forward and the burden of persuasion with respect to
affirmative defenses and any mitigating circumstances; and
* * * * *
6. Section 1005.21 would be amended by revising paragraph (d) to
read as follows:
Sec. 1005.21 Appeal to DAB.
* * * * *
(d) There is no right to appear personally before the DAB or to
appeal to the DAB any interlocutory ruling by the ALJ, except on the
timeliness of a filing of the hearing request.
* * * * *
PART 1006--[AMENDED]
C. Part 1006 would be amended as follows:
1. The authority citation for part 1006 would continue to read as
follows:
Authority: 42 U.S.C. 405(d), 405(e), 1302 and 1320a-7a.
2. Section 1006.4 would be amended by republishing the introductory
text of
[[Page 14402]]
paragraph (b) and by revising paragraph (b)(2) to read as follows:
Sec. 1006.4 Procedures for investigational inquiries.
* * * * *
(b) Investigational inquiries are non-public investigatory
proceedings. Attendance of non-witnesses is within the discretion of
the OIG, except that--
* * * * *
(2) Representatives of the OIG are entitled to attend and ask
questions.
* * * * *
Dated: August 21, 1997.
June Gibbs Brown,
Inspector General.
Approved: December 4, 1997.
Donna E. Shalala,
Secretary.
[FR Doc. 98-7506 Filed 3-24-98; 8:45 am]
BILLING CODE 4150-04-M
