[Federal Register Volume 64, Number 140 (Thursday, July 22, 1999)]
[Rules and Regulations]
[Pages 39420-39429]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-18515]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of Inspector General
42 CFR Parts 1001, 1002 and 1003
RIN 0991-AA95
Health Care Programs: Fraud and Abuse; Revised OIG Sanction
Authorities Resulting From Public Law 105-33
AGENCY: Office of Inspector General (OIG), HHS.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This rulemaking revises the OIG's exclusion and civil money
penalty authorities set forth in 42 CFR parts 1001, 1002 and 1003, as a
result of the Balanced Budget Act of 1997, Public Law 105-33. These
revisions are intended to protect Medicare and other Federal health
care programs by enhancing the OIG's administrative sanction authority
through new or revised exclusion and civil money penalty provisions.
EFFECTIVE DATE: This rule is effective on July 22, 1999.
FOR FURTHER INFORMATION CONTACT: Joel Schaer, (202) 619-0089, OIG
Regulations Officer.
SUPPLEMENTARY INFORMATION:
I. Background
A. The Health Insurance Portability and Accountability Act
The Health Insurance Portability and Accountability Act (HIPAA) of
1996, Public Law 104-191, was enacted on August 21, 1996, and set forth
a number of significant amendments to the OIG's exclusion and civil
money penalty (CMP) authorities. Among the various provisions related
to the program exclusion authority, HIPAA: (1) Expanded the OIG's
minimum 5-year mandatory exclusion authority to cover any felony
conviction under Federal, State or local law relating to health care
fraud, even if governmental programs were not involved; (2) established
minimum periods of exclusion from 1 to 3 years for certain permissive
exclusions; and (3) established a new permissive exclusion authority
applicable to individuals who have a
[[Page 39421]]
majority ownership in, or have significant control over the operations
of an entity that has been convicted of a program-related offense.
Proposed regulations addressing these revised or expanded OIG exclusion
authorities were published in the Federal Register on September 8, 1997
(62 FR 47182) and final regulations were issued on September 2, 1998
(63 FR 46676).
In addition, HIPAA revised and strengthened the OIG's existing CMP
authorities, and extended the application of the CMP provisions beyond
those programs funded by the Department to include all Federal health
care programs. Separate OIG proposed rulemaking addressing the revised
or expanded CMP provisions resulting from HIPAA were published in the
Federal Register on March 25, 1998 (63 FR 14393).
B. The Balanced Budget Act of 1997
In conjunction with many of the HIPAA fraud and abuse authorities,
the Balanced Budget Act (BBA) of 1997, enacted on August 5, 1997,
contained a number of provisions designed to further protect the
integrity of Medicare, Medicaid and all other Federal health care
programs for current and future beneficiaries, and combat fraudulent
and abusive program activities. Specifically, the fraud and abuse
provisions of BBA serve to strengthen the OIG's exclusion and CMP
authorities with respect to Federal health care programs.
While the new exclusion and CMP authorities under BBA were
effective for violations occurring on or after August 5, 1997, since
the statutory provisions allowed the Department some policy discretion
in their implementation, the OIG developed and issued a proposed
rulemaking on September 2, 1998, that solicited public comments on
proposed exclusion and CMP regulatory revisions resulting from BBA (63
FR 46736).
II. Summary of the Proposed Rule
In accordance with the Department's expanded and revised exclusion
and CMP authorities resulting from BBA, the proposed regulations were
designed to codify in 42 CFR parts 1001, 1002 and 1003 as follows:
A. Revised Exclusion Authorities Resulting From BBA
1. OIG authority to direct exclusions from State health care
programs, and to extend application of OIG exclusions to all Federal
health care programs--Prior to BBA, the OIG was authorized under
section 1128 of the Act to impose exclusions from participation in
Medicare under its own authority, but could not impose other health
care program exclusions directly. Instead, the OIG directed State
health care programs (such as Medicaid) to impose parallel exclusions,
but had no authority with respect to the exclusion from State health
care programs, as listed in section 1128(i) of the Act. Section 4331(c)
of BBA specifically amended sections 1128(a) and (b) of the Act to
extend the scope of an OIG exclusion beyond the Medicare and State
health care programs to all Federal health care programs (as defined in
section 1128B(f) of the Act), and to enable the OIG to impose
exclusions from all Federal health care programs directly. We proposed
amending various sections of 42 CFR part 1001 to reflect this expanded
authority.
The proposed regulations also addressed the effect of this expanded
exclusion authority on the employment of excluded individuals, and
program reimbursement for items and services they may provide to other
Federal health care programs. Prior to BBA, with limited exceptions, no
payment could be made under Medicare and the State health care programs
for any health care item or service furnished, ordered or prescribed by
an excluded individual. However, an individual excluded from Medicare
and the State health care programs could still be employed or receive
payment from other Federal health care programs, such as Tricare or the
Department of Veterans Affairs. With the expanded scope of the
exclusion authority, the proposed rule stated that Federal health care
agencies may neither reimburse for items and services which excluded
individuals provide, order or prescribe, nor pay the salaries or
expenses of such persons using Federal funds. As indicated in the
proposed rule, in accordance with the BBA provision, with limited
exceptions, an exclusion would effectively preclude the employment of
an excluded individual in any capacity by a Federal or State agency, or
other entity, where payment is made by any Federal health care program.
2. Permanent exclusions for individuals convicted of 3 or more
health care-related crimes, and 10 year exclusions for individuals
convicted of 2 health care-related crimes--Most excluded health care
providers become eligible for reinstatement in the Federal and State
health care programs after a specified exclusion period. Section 4301
of BBA established a mandatory exclusion period of not less than 10
years for individuals who have been twice convicted of mandatory
exclusion offenses under section 1128(a) of the Act. In addition, a
permanent program exclusion must be imposed against those individuals
who have been convicted on 3 or more occasions of such mandatory
exclusion offenses. Accordingly, we proposed to amend Sec. 1001.102 to
reflect these new mandatory exclusion periods.
3. Exclusion of entities controlled by family or household members
of sanctioned individuals--The OIG is authorized to exclude entities
owned or controlled by an individual who has been convicted of a health
care related offense, or who has been sanctioned by the OIG. However,
some excluded individuals have been able to circumvent the impact of an
exclusion and retain silent control of operating health care entities
by engaging in paper transfers of their ownership and control interests
to family or household members. To address the problem of excluded
individuals retaining ``silent'' control of participating entities,
section 4303 of BBA allowed for the exclusion of entities owned or
controlled by the family or household members of excluded individuals
when the transfer of ownership or control interest in the entity was
made in anticipation of, or following, a conviction, CMP or exclusion.
We proposed to amend Sec. 1001.1001(a) to reflect this new authority.
B. Revised CMP Authorities Resulting From BBA
1. CMPs against institutional health care providers that employ or
enter into contracts for medical services with excluded individuals--In
some instances, individuals who have been excluded from Medicare or the
State health care programs have been able to obtain (or retain)
employment, staff privileges or other affiliations with various health
care entities that then bill the programs for their services. CMP
authority has existed for health maintenance organizations that submit
claims for items or services furnished by excluded employees or other
excluded individuals with whom they contract, but no parallel sanction
authority existed with respect to a group medical practice, hospital,
nursing home, home health agency, hospice or other provider that failed
to check the credentials of individuals whose services they utilize and
bill to Medicare or State health care programs. In accordance with new
authority set forth in section 4304(a) of BBA, we proposed amending
Secs. 1003.102(a) and 1003.103(a) to allow the OIG to impose a CMP of
up to $10,000 against any entity that submits, or causes to be
submitted, claims for items or services rendered by employees or other
individuals with whom they
[[Page 39422]]
contract, and whom they know, or should know, have been excluded from
participation in the Federal health care programs.
2. CMP for failure to report information to the Healthcare
Integrity and Protection Data Bank--Section 221 of HIPAA established a
national health care fraud and abuse data collection program, the
Healthcare Integrity and Protection Data Bank (HIPDB), for the
reporting of final adverse actions (such as convictions, exclusions and
licensing restrictions) against health care providers, suppliers and
practitioners.1 While this authority mandated that private
health plans, as well as certain State and Federal entities, report
adverse actions to the HIPDB, no penalty provision was included to
address failure by a health care plan to comply with the reporting
requirements. In accordance with section 4331(d) of BBA,
Sec. 1003.102(b) of the proposed regulations set forth a new CMP of not
more than $25,000 against any health plan that fails to report a final
adverse action to HIPDB as required by the statute and regulations.
---------------------------------------------------------------------------
\1\ Proposed regulations setting forth the policies and
procedures for implementing the new HIPDB were published in the
Federal Register on October 29, 1998 (63 FR 58341).
---------------------------------------------------------------------------
3. CMPs for health care providers who violate the anti-kickback
statute--Prior to BBA, criminal penalties or program exclusions were
the only remedies available against those who offered or received
remuneration in return for the referral of business paid for by Federal
health care programs, in violation of the anti-kickback statute. Since
both remedies are potentially quite severe, section 4304 of BBA set
forth an alternative remedy, i.e., a new CMP for violations of the
anti-kickback statute. In accordance with this new statutory provision,
we proposed to amend Secs. 1003.102(b), 1003.103(h) and 1003.104 to
implement a CMP of not more than $50,000 for each kickback violation,
and an assessment of up to 3 times the total amount of remuneration
offered, paid, solicited or received without regard to whether a
portion of such remuneration was offered, paid, solicited or received
for a lawful purpose.
C. Additional Technical and Other Revisions to 42 CFR Parts 1001 and
1003
1. Technical revisions--A number of proposed technical revisions
consistent with the policy provisions resulting from BBA and the
proposed regulatory amendments were also indicated in the notice of
proposed rulemaking. Specifically, we proposed to amend the authority
citation cites for parts 1001 and 1003, Secs. 1001.302 (Basis for
reinstatement), 1003.100 (Basis and purpose), and 1003.114 (Collateral
estoppel) to reflect the revisions being proposed in accordance with
the revised BBA exclusion and CMP authorities. In addition, we proposed
a revision to Sec. 1003.109(a)(3), to delete the phrase ``the amount of
the proposed penalty, assessment and the period of proposed exclusion
(where applicable).'' This language appears in paragraph (a)(4) of this
section, and appears inadvertently in paragraph (a)(3).
2. Proposed revision to OIG reinstatement considerations--We also
proposed to add two new elements to Sec. 1001.3002(b), pertaining to
the OIG's review of an individual's or entity's request for
reinstatement in the Federal health care programs after the
individual's or entity's exclusion period. The first new proposed
element was designed to address the OIG's expectation that excluded
parties adequately and promptly inform all their clients or patients of
the exclusion so that the clients or patients will have a clear
understanding that items and services provided, directed or ordered by
that individual or entity will not be paid for under any Federal health
care program. Under Sec. 1001.1901(b) of the proposed regulations,
Medicare reimbursement is authorized to a beneficiary for the first
claim submitted for an item or service provided by the excluded party,
at which time the beneficiary is notified that future claims will be
denied due to the provider's excluded status. (We did not believe that
notification only after the submission of a claim provides adequate
protection for program beneficiaries.) By stating in the proposed
regulations that the OIG, in making its reinstatement decisions, would
consider whether a provider has adequately and promptly informed
clients or patients of an exclusion, we hoped to offer an incentive for
providers to give the earliest possible notification to beneficiaries
of their exclusion.
A second proposed reinstatement element was designed to codify
existing OIG policy which, in making reinstatement decisions, considers
whether the individual or entity has, during the period of exclusion,
submitted claims or caused claims to be submitted, or payments to be
made by any Federal health care program for items or services the
excluded party furnished, ordered or prescribed, including health care
administrative services during the period of exclusion. By setting
forth this regulatory clarification, we hoped to make clear that the
submission of claims for payment to any Federal health care program
during a provider's period of exclusion will jeopardize the provider's
reinstatement into the programs.
III. Responses to Comments and Summary of Revisions
In response to the notice of proposed rulemaking, the OIG received
a total of five timely-filed public comments from various health care
associations and other interested parties. Set forth below is a
synopsis of the various comments and recommendations received, our
response to those concerns, and a summary of the specific revisions and
clarifications being made to the regulations.
Section 1001.102 Factors in Length of Exclusion
Comment: Two commenters raised concern over the language in
proposed Sec. 1001.102(b)(6), one of the possible aggravating factors
which would provide a basis for lengthening the period of exclusion.
The provision would consider whether the ``individual or entity has at
any time been overpaid a total of $1,500 or more by Medicare, Medicaid
or any Federal health care program as a result of improper billings.''
The commenters indicated that this language was too general and gives
no clear indication of what constitutes ``improper billings.'' The
commenters stated that any overpayments of $1,500 or more, whether part
of the same circumstance that led to the exclusion in the first place,
or ones that are billing error mistakes or simple negligence, could be
deemed an aggravating circumstance. The commenters indicated that
aggravating factors should serve as valid predictors of future
violations of Medicare and other Federal program statutes and
regulations and, therefore, urged that the OIG delete the $1,500
threshold.
Response: It is not our intention to consider overpayment of $1,500
or more based on inadvertent billing errors as an aggravating
circumstance. We agree with the commenters that the $1,500 threshold
for overpayments needs to be related to improper conduct, such as the
submission of false, fraudulent or otherwise improper claims for
payment. This criterion with respect to determining aggravating
circumstances has been included in the OIG's regulations since 1992 and
has not been identified as a problem by either providers or the OIG.
Therefore, this provision, which was not proposed for
[[Page 39423]]
any revision in our proposed rule, will not be revised at this time.
Section 1001.3002(b)(5) Basis for Reinstatement
Comment: Two commenters raised concern over the proposed language
in Sec. 1001.3002(b)(5) that would add a new factor in determining
whether an individual or entity can be reinstated to participate in
Federally-funded health care programs. Specifically, we indicated that
the OIG would consider ``whether the individual or entity, during the
period of exclusion, has adequately and promptly informed its clients
or patients that any items or services provided will not be
reimbursable under any Federal health care program.'' One commenter
requested that the OIG clarify both the terms ``adequate'' and
``prompt'' so that an excluded individual can be aware of whether they
have met the criteria for reinstatement. The commenter also asked for
additional clarification what is meant by a physician's or entity's
``clients and patients.''
A second commenter recommended that the language in this paragraph
be deleted entirely, stating that an excluded party's unwillingness to
notify those affected should not have a bearing on his or her fitness
to be readmitted to the health care programs.
Response: We have considered the comments regarding this proposed
factor for reviewing reinstatement requests, and agree that this factor
may impose an additional burden on excluded individuals and entities
with respect to notification of patients and clients and that this
notification obligation is not mandated by law. In addition, we are
persuaded by the fact that beneficiaries are adequately protected,
since the current procedures provide for payment of the first claim
submitted by or on behalf of a beneficiary for services furnished,
ordered or prescribed by an excluded provider or practitioner, and
simultaneous notification regarding the exclusion. Moreover, we believe
that it would be very difficult to monitor such notifications by
excluded individuals and entities in order to assess their
trustworthiness for purposes of future participation in Federal health
care programs. Based on these reasons, we are deleting this proposed
factor from those to be evaluated in assessing a reinstatement request.
Section 1003.102(a) CMP for Relationships With Excluded Individuals
Comment: A commenter was concerned that the OIG misinterpreted the
statute (42 U.S.C. 1320a-7a(a)(6)) and congressional intent with regard
to the basis for CMPs arising from relationships with excluded
individuals. They indicated that the proposed regulations imply the
existence of an affirmative duty on providers to monitor, on an ongoing
basis, the eligibility of employees and others with whom they enter
into contracts to participate in the Federal health care programs. The
commenter believed that the conditional phrase ``or should have known''
in proposed Sec. 1003.102(a)(2) would effectively impose a duty upon
contracting providers to monitor the list of excluded individuals and
entities on a regular basis or risk imposition of a CMP. The commenter
raised questions regarding (1) how often should they check on employees
and contracting parties, e.g., when employees are hired and when
contracting parties enter into a contract, or rechecked at regular
intervals), and (2) which persons should be checked, e.g., ongoing
contracts, subcontractors or employees of a corporation with whom they
are contracting. The commenter believed the appropriate burden should
be on the OIG or the excluded individual or entity to notify
contracting providers with whom they have employment or other
contractual relationships of their exclusion from the Federal health
care programs.
Response: Providers and contracting parties have a duty to check
the sanction report on the OIG web site prior to entering into
employment or contractual arrangements with new hires or run the risk
of CMP liability if they fail to do so. All exclusion information is
maintained on the OIG web site (www.dhhs.gov/progorg/oig) and updated
on a regular basis. While it is not possible for the OIG to be aware of
every employment arrangement being entered into by providers and
excluded individuals or entities, the OIG does notify and inform
employers of excluded individuals and entities when such pending
employment arrangements are specifically known to the OIG. In addition,
hospitals are under an affirmative obligation to query the National
Practitioner Data Bank (NPDB) when they grant privileges, and
subsequently at 2-year intervals, to determine whether any actions have
been taken against physicians that they employ. Information on
exclusions is contained in the NPDB.
Comment: Another commenter contended that use of the OIG's Sanction
Report posted on the Internet is confusing and inadequate. The
commenter stated that the current information contained on the OIG web
site is not easily accessible, requiring providers to create their own
``cumulative list'' and to manually input data which could leave
providers open to fraud and abuse claims because of simple mistakes or
errors. In light of the new CMP authority under BBA for providers
contracting with or employing an individual or entity that is excluded
from the Federal health care programs, the commenter requested that the
OIG reevaluate the current Sanction Report to create a ``cumulative
list'' of excluded individuals and entities that providers can easily
access and use.
Response: We believe that the current OIG web site containing the
Cumulative Sanction Report is accessible, with large numbers of users
of this web site having no problems in obtaining the information
needed. However, we have also been aware that some users want to be
able to do an on-line search for a single individual or entity, and
agree that the sanction report on the web site needs to be modified to
be more user-friendly in order to permit parties to look for one name
at a time. Early in 1999, the OIG web site was modified so that parties
can search by either name or location in order to ascertain an
individual's or entity's exclusion status, as well as being able to
download the entire file.
It should also be pointed out that the OIG's web site is not the
sole source of information regarding sanctioned individuals and
entities. The NPDB, which hospitals are required to query, contains
information on our sanctioned providers. In addition, the exclusion
information is also available on the GSA list of ``Parties Excluded
from Federal Procurement and Nonprocurement Programs'' and is on-line
searchable.2 Furthermore, the new HIPDB will contain the OIG
exclusion information. With the various avenues of information on
excluded individuals and entities available, we believe parties will be
able to readily obtain the necessary information on current Federal
health care program exclusions.
---------------------------------------------------------------------------
\2\ See http://anet.gov/epls/.
---------------------------------------------------------------------------
Comment: The preamble discussion of the proposed rule stated the
OIG's concern that ``individuals who have been excluded from Medicare
or State health care program participation have, nonetheless, been able
to obtain (or retain) employment, staff privileges or other affiliation
with various health care entities * * *.'' A commenter emphasized that
it is both possible and common for a physician to have medical staff
privileges at a hospital without having either an employment or a
contractual relationship with the
[[Page 39424]]
hospital, particularly in States that prohibit the corporate practice
of medicine. The commenter further stated that a physician's medical
staff privileges at a hospital and his or her provision of items and
services covered by Medicare mean that the hospital and the physician
are ``arranging'' for the provision of such services.
Response: We agree with the commenter's point regarding the
reference to staff privileges. A medical staff relationship, in the
absence of any employment or contractual relationship or arrangement,
in and of itself, remains outside the scope of these regulations.
However, when claims are generated by physicians having privileges in
the hospital for services they furnish, order or prescribe, the
hospital must be held accountable if the items or services are provided
by excluded physicians. Clearly, an excluded physician cannot have any
Federal or State health care program payments made for items and
services that they furnish, order or prescribe; not to hold a hospital
or other organization accountable for allowing such a person to
generate bills to the programs would be inappropriate.
Section 1003.102(b) CMP for Failure To Report Information to the HIPDB
Comment: One commenter believed that the OIG should not proceed
with regulations relating to the new CMP for failure to report
information to the HIPDB until the implementing regulations for the new
data bank have been finalized.
Response: The OIG published proposed regulations in the Federal
Register on October 30, 1998 (63 FR 58341) addressing policies and
procedures for implementing the new HIPDB. Those proposed regulations
are designed to address, among other things, how and when specific
information is to be reported to the data bank; the requirements for
the disclosure and confidentiality of information received by the
HIPDB; applicable fees when requesting data bank information; and the
process for disputing the accuracy of HIPDB information. The HIPDB is
not expected to be operational until final regulations are in place
some time later this year. The OIG will take no CMP action for failure
to report information to the HIPDB until the issuance of final
implementing regulations regarding reporting to he HIPDB.
Section 1003.103 Amount of Penalty
Comment: One commenter indicated that the proposed regulatory
language in Sec. 1003.103(h)(1), that indicates that the OIG may impose
``a penalty of $50,000'' against persons who commit an act in violation
of the anti-kickback statute, is not consistent with the statutory
language set forth in BBA. The statutory language (42 U.S.C. 1320a-
7a(a)) indicates that a person may be subject to a civil money penalty
of not more than * * * $50,000 for each such act.'' The commenter
recommended that the rule be modified to comport with the statutory
language.
Response: We agree that the proposed language was inconsistent, and
are amending paragraph (h)(1) of this section to indicate that the OIG
may not impose ``a penalty of not more than $50,000'' (emphasis added).
Section 1003.106 Factors in Calculating CMPs
Comment: One commenter cited an ambiguity in the preamble and
proposed regulations text at Sec. 1003.106(a)(1)(vii) with regard to
determinations on the amount of a penalty. The commenter states that
the preamble discussion indicates one of the criteria for determining
the appropriate amount of penalty would be ``whether the contracting
provider knew or should have known of the exclusion.'' Also, the
commenter indicates that the proposed language in
Sec. 1003.106(a)(1)(vii) describes this factor as ``whether the
contracting provider knew of the exclusion when employing or otherwise
contracting with an excluded individual or entity.'' The commenter
recommended adding the word ``actually'' before the word ``knew'' in
this paragraph.
The commenter also believed a number of additional factors relating
to the overall culpability of a contracting party should be considered.
They included (i) the volume or value of items or services provided by
an excluded individual or entity with which the contracting provider
has an employment or contractual relationship; (ii) whether the
contracting provider has in place an effective compliance program; and
(iii) the length of time between when the provider knew or should have
known of the exclusion, and when the provider terminated the employment
or other contractual relationship with the excluded individual or
entity.
Response: In making any determinations regarding the amount of
penalty, the OIG intends to draw clear distinctions between cases where
there was actual versus constructive knowledge. As a result, we are
amending the language in Sec. 1003.106(a)(1)(vii) to indicate that in
determining the amount of any penalty in accordance with this
provision, we will take into account whether ``the contracting provider
actually knew of the exclusion when employing or otherwise contracting
with an excluded individual or entity * * *'' (emphasis added).
Comment: Two commenters raised objection to the existing factor,
being redesignated as paragraph (a)(1)(ix) in this section, which
allows the OIG to assess penalties in accordance with ``[S]uch other
matters as justice may require.'' The commenters believe that this
language is unacceptably vague wide-ranging.
Response: The language in Sec. 1003.106(a)(1)(ix), among other
places in part 1003, is not new, and is intended to encompass other
mitigating and aggravating factors that may arise on a case-by-case
basis. It was included in the CMP statutory authority when initially
enacted in 1981. This phrase allows for the consideration of individual
factors, both aggravating and mitigating, that may be meaningful to one
distinct case. For example, the additional factors cited by a commenter
and referenced above, relating to the overall culpability of a
contracting party, may be considered under this factor.
IV. Provisions of the Final Rule
For the most part, this final rule incorporates the provisions of
the September 2, 1998 proposed rule. A brief description of the
provisions of this final rule follow.
In Sec. 1001.2, we are adding a definition for the term
``Federal health care program,'' and are making conforming changes to
include the term ``and other Federal health care programs'' in
Secs. 1001.1(a), 1001.201(b)(3)(iii)(A), 1001.301(b)(2)(ii),
1001.401(c)((2)(ii), 1001.1301(b)(2)(iii), 1001.1401.(b)(1) and (b)(4),
1001.1501(a)(3), 1001.1901(b)(1), 1001.3003, 1001.303 and 1002.2(a).
Similar proposed revisions to Secs. 1001.301(b)(3)(ii)(A) and
1001.401(c)(3)(i)(A) have already been addressed in the OIG final
regulations published on September 2, 1998 (63 FR 46676) addressing
revised OIG exclusion authorities resulting from Public Law 104-191.
In the proposed rule, we set forth in Sec. 1001.2,
Definitions, a revised definition for the term ``exclusion.'' A revised
definition of the term was promulgated in the OIG final regulations
published on September 2, 1998 (63 FR 46676) addressing revised OIG
exclusion authorities resulting from Public Law 104-191. We are
retaining that definition of the term ``exclusion,'' set forth in the
September 2, 1998 final
[[Page 39425]]
rule, in these final regulations as well. We are also adding a
definition in Sec. 1001.2 for the term ``Federal health care program.''
The proposed rule indicated our intention to amend
Sec. 1001.102(b) by revising paragraphs (b)(5) and (b)(6), and by
adding a new paragraph (b)(7). However, in the proposed rule, we
inadvertently deleted existing paragraph (b)(5). In addition, final OIG
regulations published on September 2, 1998 (63 FR 46676) added a new
paragraph (b)(8). As a result, in these final regulations we are
revising current paragraphs (b)(6) and (b)(7) (and not (b)(5) and
(b)(6) as the proposed rule indicated); redesignating the recently-
added paragraph (b)(8) as new paragraph (b)(9); and adding a new
paragraph (b)(8) (designated as new (b)(7) in the proposed rule). We
are also adding a new Sec. 1001.102(d) to reflect the new mandatory
lengths of exclusion.
We are amending Sec. 1001.1001(a) to reflect the statutory
authority that allows for the exclusion of entities controlled by
family or household members of sanctioned individuals. In
Sec. 1001.1001(a)(2), we are also adding definitions for the terms
``immediate family member'' and ``member of household,'' consistent
with the statute.
To reflect the revised scope of exclusions under title XI
of the Act, that allows the Secretary, through the OIG, to direct the
imposition of exclusions from all Federal health care programs and to
directly impose exclusions from all Federal health care programs, we
are revising Sec. 1001.1901(a), (b)(1), introductory paragraph (c)(3)
and (c)(5)(i). While the proposed rule indicated our intention of
revising paragraph (c)(4)(i) (and not (c)(5)(i)) of this section, the
OIG final regulations published on September 2, 1998 (63 FR 46676)
amended paragraph (b)(1), and redesignated paragraph (c)(4) as (c)(5)
and added a new paragraph (c)(4) in its place. The changes being made
in Sec. 1001.1901 in this rule reflect the revisions and redesignation
made in the September 2, 1998 final rule.
With respect to considerations in the OIG's review of an
individual's or entity's request for reinstatement in the Federal
health care programs after the individual's or entity's exclusion
period, we are not including the language proposed for a new
Sec. 1001.3002(b)(5) as indicated in the proposed rule. However, we are
adopting the language proposed for new paragraph (b)(6) of this
section, and are now designating this as new paragraph (b)(5).
Technical revisions to Sec. 1001.3002(b)(3) and (b)(4) are also being
made.
Sections 1003.102(a)(2) and 1003.103(a) are being revised
to reflect the new CMP authority against entities that submit, or cause
to be submitted, claims for health care services rendered by employees
or other individuals under contract whom they know, or should know,
have been excluded from participation in the Federal health care
programs. We are also revising Sec. 1003.106(a)(1) to set forth five
criteria to be considered in determining the penalty amount.
We are amending Sec. 1003.102(b)(5) to address CMPs
imposed against any health plan that fails to report information on an
adverse action required to be reported to the new HIPDB. Section
1003.103(g) is being added to set forth the penalty amount for such
violations.
A new Sec. 1003.102(b)(11)--to codify the CMP authority
for health care providers who violate the anti-kickback statute, and a
new Sec. 1003.103(h), as revised in accordance with the discussion
above, to address the maximum penalty amount--are being added. Section
1003.104 is also being revised to address assessments of not more than
three times the amount of remuneration offered, paid, solicited or
received with regard to this violation.
Technical amendments are also being made in
Secs. 1001.302, 1003.100 and 1003.114 to reflect the regulatory changes
set forth in the OIG's revised exclusion and CMP authorities revisions
in accordance with BBA.
V. Regulatory Impact Statement
Executive Order 12866 and Regulatory Flexibility Act
The Office of Management and Budget (OMB) has reviewed this final
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 substantial number of
small entities the Secretary must specifically consider the economic
effect of a rule on small entities and analyze regulatory options that
could lessen the impact of the rule.
The provisions set forth in this final rulemaking implement new or
revised OIG statutory requirements set forth in Public Law 105-33.
These provisions are designed both to broaden the scope of the OIG's
authority to exclude individuals and entities from Medicare, Medicaid
and all other Federal health care programs, and strengthen current
legal authorities pertaining to the imposition of CMPs against
individuals and entities engaged in prohibited actions and activities.
These regulations implement the new statutory requirements by (1)
expanding the application of the OIG's exclusions to all Federal health
care programs; (2) implementing permanent exclusions for individuals
convicted of three or more offenses for which an exclusion can be
imposed under section 1128(a) of the Act, and 10 year exclusions for
individuals convicted of two or more such offenses; (3) allowing for
the exclusion of entities controlled by family or household members of
sanctioned individuals; and (4) establishing new CMPs in three specific
areas.
With regard to the OIG's new exclusion authorities, the process for
excluding individuals and entities who are convicted in accordance with
these new provisions remains essentially the same, even though the
types of convictions requiring mandatory exclusions have been
broadened. While there may be a resulting increase in the number of
mandatory and permissive exclusions imposed as a result of the expanded
scope of the OIG's exclusion authority, we do not believe these
increases will be significant. The clarification of exclusion authority
in Sec. 1001.1001 regarding a sanctioned individual's transfer of
ownership or control interest to a family or household member, for
example, should not result in a significant increase in exclusion
actions in accordance with section 1128(b)(8) of the Act since the
provision is likely to act as an effective deterrent against the
occurrence of such transfer arrangements. In addition, we do not
foresee significant increases resulting from the implementation of
section 4301 of BBA and Sec. 1001.102, regarding the permanent
exclusion of individuals convicted of three or more health care related
crimes. The authority for promulgating this exclusion is clear cut, and
should limit the total number of repeat exclusions effectuated by the
OIG against such fraudulent providers.
The final regulations addressing the new OIG CMPs also remain
consistent with the congressional intent of BBA and with the OIG's
existing CMP authority which allows for imposition of
[[Page 39426]]
civil money penalties against individuals and entities who commit
fraud. These CMPs are targeted to a limited group of individuals and
entities; that is, those institutional health care providers that
employ or enter into medical service contracts with excluded
individuals, health care plans that fail to report information to the
HIPDB, and health care providers who violate the anti-kickback statute.
As indicated, these final regulations are narrow in scope and
effect, comport with congressional and statutory intent, and strengthen
the Department's legal authorities against those who defraud or
otherwise act improperly against the Federal and State health care
programs. Since the vast majority of individuals, organizations and
entities involved in delivering health care do not engage in the
prohibited activities and practices described in this rulemaking, we
believe that the aggregate economic impact of these regulations will
not be economically significant. Since there is minimal economic effect
on the industry as a whole, there would be little likelihood of effect
on Federal or State expenditures to implement these regulations.
With regard to the effect of these regulations on a substantial
number of small entities, the provisions are targeted specifically to
those individuals and entities who would defraud or abuse the health
care programs, rather than to the health care industry as a whole.
While some of the perpetrators of fraud effected by this rule may be
small entities, it is the nature of the violation and not the size of
the entity that will induce action on the part of the OIG.
In summary, we have concluded, and the Secretary certifies, that
since this final rule will not have a significant economic impact on
Federal, State or local economies and expenditures, nor have a
significant economic impact on a substantial number of small entities,
a regulatory flexibility analysis is not required.
Paperwork Reduction Act
The provisions of these final regulations impose no new reporting
or recordkeeping requirements necessitating clearance by OMB.
List of Subjects
42 CFR Part 1001
Administrative practice and procedure, Fraud, Health facilities,
Health professions, Medicaid, Medicare.
42 CFR Part 1002
Fraud, Grant programs--health, Health facilities, Health
professions, Medicaid, Reporting and recordkeeping.
42 CFR Part 1003
Administrative practice and procedure, Fraud, Grant programs--
health, Health facilities, Health professions, Maternal and child
health, Medicaid, Medicare, Penalties.
Accordingly, 42 Parts 1001, 1002 and 1003 is amended as set forth
below:
PART 1001--[AMENDED]
1. The authority citation for part 1001 continues to read as
follows:
Authority: 42 U.S.C. 1302, 1320a-7, 1320a-7b, 1395u(h),
1395u(j), 1395u(k), 1395y(d), 1395y(e), 1395cc(b)(2)(D), (E) and
(F), and 1395hh; and sec. 2455, Pub.L. 103-355, 108 Stat. 3327 (31
U.S.C. 6101 note).
2. Section 1001.1 is amended by revising paragraph (a) to read as
follows:
Sec. 1001.1 Scope and purpose.
(a) The regulations in this part specify certain bases upon which
individuals and entities may, or in some cases must, be excluded from
participation in Medicare, Medicaid and all other Federal health care
programs. They also state the effect of exclusion, the factors that
will be considered in determining the length of any exclusion, the
provisions governing notices of exclusions, and the process by which an
excluded individual or entity may seek reinstatement into the programs.
* * * * *
3. Section 1001.2 is amended by adding a definition for the term
Federal health care program to read as follows:
Sec. 1001.2 Definitions.
* * * * *
Federal health care program means any plan or program providing
health care benefits, whether directly through insurance or otherwise,
that is funded directly, in whole or part, by the United States
Government (other than the Federal Employees Health Benefits Program),
or any State health care program as defined in this section.
* * * * *
4. Section 1001.102 is amended by revising paragraphs (b)(6) and
(b)(7); redesignating existing paragraph (b)(8) as (b)(9); and by
adding new paragraphs (b)(8) and (9) to read as follows:
Sec. 1001.102 Length of exclusion.
* * * * *
(b) * * *
(6) The convicted individual or entity has a prior criminal, civil
or administrative sanction record;
(7) The individual or entity has at any time been overpaid a total
of $1,500 or more by Medicare, Medicaid or any other Federal health
care programs as a result of intentional improper billings;
(8) The individual or entity has previously been convicted of a
criminal offense involving the same or similar circumstances; or
(9) * * *
* * * * *
(d) In the case of an exclusion under this subpart, based on a
conviction occurring on or after August 5, 1997, an exclusion will be--
(1) For not less than 10 years if the individual has been convicted
on one other occasion of one or more offenses for which an exclusion
may be effected under section 1128(a) of the Act (The aggravating and
mitigating factors in paragraphs (b) and (c) of this section can be
used to impose a period of time in excess of the 10-year mandatory
exclusion); or
(2) Permanent if the individual has been convicted on two or more
other occasions of one or more offenses for which an exclusion may be
effected under section 1128(a) of the Act.
5. Section 1001.201 is amended by revising the heading and
paragraph (b)(3)(iii)(A) to read as follows:
Sec. 1001.201 Conviction relating to program or health care fraud.
* * * * *
(b) Length of exclusion. * * *
(3) * * *
(iii) * * *
(A) Others being convicted or excluded from Medicare, Medicaid or
any of the other Federal health care programs, or
* * * * *
6. Section 1001.301 is amended by revising paragraphs (b)(2)(ii) to
read as follows:
Sec. 1001.301 Conviction relating to obstruction of an investigation.
* * * * *
(b) * * *
(2) * * *
(ii) The interference or obstruction had a significant adverse
mental, physical or financial impact on program beneficiaries or other
individuals or on the Medicare, Medicaid or other Federal health care
programs;
* * * * *
7. Section 1001.401 is amended by revising the heading and
paragraph (c)(2)(ii) to read as follows:
Sec. 1001.401 Conviction relating to controlled substances.
* * * * *
(c) * * *
[[Page 39427]]
(2) * * *
(ii) The acts that resulted in the conviction or similar acts had a
significant adverse mental, physical or financial impact on program
beneficiaries or other individuals or the Medicare, Medicaid or other
Federal health care programs;
* * * * *
8. Section 1001.1001 is amended by revising paragraph (a)(1)(ii);
and by amending paragraph (a)(2) by adding definitions for the terms
Immediate family member and Member of household to read as follows:
Sec. 1001.1001 Exclusion of entities owned or controlled by a
sanctioned person.
(a) * * *
(1) * * *
(ii) Such a person--
(A)(1) Has a direct or indirect ownership interest (or any
combination thereof) of 5 percent or more in the entity;
(2) Is the owner of a whole or part interest in any mortgage, deed
of trust, note or other obligation secured (in whole or in part) by the
entity or any of the property assets thereof, in which whole or part
interest is equal to or exceeds 5 percent of the total property and
assets of the entity;
(3) Is an officer or director of the entity, if the entity is
organized as a corporation;
(4) Is partner in the entity, if the entity is organized as a
partnership;
(5) Is an agent of the entity; or
(6) Is a managing employee, that is, an individual (including a
general manager, business manager, administrator or director) who
exercises operational or managerial control over the entity or part
thereof, or directly or indirectly conducts the day-to-day operations
of the entity or part thereof, or
(B) Was formerly described in paragraph (a)(1)(ii)(A) of this
section, but is no longer so described because of a transfer of
ownership or control interest to an immediate family member or a member
of the person's household as defined in paragraph (a)(2) of this
section, in anticipation of or following a conviction, assessment of a
CMP, or imposition of an exclusion.
(2) * * *
Immediate family member means, a person's husband or wife; natural
or adoptive parent; child or sibling; stepparent, stepchild,
stepbrother or stepsister; father-, mother-, daughter-, son-, brother-
or sister-in-law; grandparent or grandchild; or spouse of a grandparent
or grandchild. * * *
Member of household means, with respect to a person, any individual
with whom they are sharing a common abode as part of a single family
unit, including domestic employees and others who live together as a
family unit. A roomer or boarder is not considered a member of
household.
* * * * *
9. Section 1001.1301 is amended by revising paragraph (b)(2)(iii)
to read as follows:
Sec. 1001.1301 Failure to grant immediate access.
* * * * *
(b) * * *
(2) * * *
(iii) The impact of the exclusion on Medicare, Medicaid or any of
the other Federal health care programs, beneficiaries or the public;
and
* * * * *
10. Section 1001.1401 is amended by revising paragraphs (b)(1) and
(b)(4) to read as follows:
Sec. 1001.1401 Violations of PPS corrective action.
* * * * *
(b) * * *
(1) The impact of the hospital's failure to comply on Medicare,
Medicaid or any of the other Federal health care programs, program
beneficiaries or other individuals;
* * * * *
(4) The impact of the exclusion on Medicare, Medicaid or any of the
other Federal health care programs, beneficiaries or the public; and
* * * * *
11. Section 1001.1501 is amended by revising paragraph (a)(3) to
read as follows:
Sec. 1001.1501 Default of health education loan or scholarship
obligations.
(a) * * *
(3) The OIG will take into account access of beneficiaries to
physicians' services for which payment may be made under Medicare,
Medicaid or other Federal health care programs in determining whether
to impose an exclusion.
* * * * *
12. Section 1001.1901 is amended by revising paragraphs (a),
(b)(1), (c)(3) introductory text and (c)(5)(i) to read as follows:
Sec. 1001.1901 Scope and effect of exclusion.
(a) Scope of exclusion. Exclusions of individuals and entities
under this title will be from Medicare, Medicaid and any of the other
Federal health care programs, as defined in Sec. 1001.2.
(b) Effect of exclusion on excluded individuals and entities. (1)
Unless and until an individual or entity is reinstated into the
Medicare, Medicaid and other Federal health care programs in accordance
with subpart F of this part, no payment will be made by Medicare,
Medicaid or any of the other Federal health care programs for any item
or service furnished, on or after the effective date specified in the
notice period, by an excluded individual or entity, or at the medical
direction or on the prescription of a physician or other authorized
individual who is excluded when the person furnishing such item or
service knew or had reason to know of the exclusion. This section
applies regardless of whether an individual or entity has obtained a
program provider number or equivalent, either as an individual or as a
member of a group, prior to being reinstated.
* * * * *
(c) * * *
(3) Unless the Secretary determines that the health and safety of
beneficiaries receiving services under Medicare, Medicaid or any of the
other Federal health care programs warrants the exclusion taking effect
earlier, payment may be made under such program for up to 30 days after
the effective date of the exclusion for--
* * * * *
(5)(i) Notwithstanding the other provisions of this section,
payment may be made under Medicare, Medicaid or other Federal health
care programs for certain emergency items or services furnished by an
excluded individual or entity, or at the medical direction or on the
prescription of an excluded physician or other authorized individual
during the period of exclusion. To be payable, a claim for such
emergency items or services must be accompanied by a sworn statement of
the person furnishing the items or services specifying the nature of
the emergency and why the items or services could not have been
furnished by an individual or entity eligible to furnish or order such
items or services.
* * * * *
13. Section 1001.3002 is amended by republishing introductory
paragraph (b) introductory text, revising paragraphs (b)3) and (b)(4);
adding new paragraph (b)(6); and by revising paragraph (c)(1) to read
as follows:
Sec. 1001.3002 Basis for reinstatement.
* * * * *
(b) In making the reinstatement determination, the OIG will
consider--
* * * * *
(3) Whether all fines, and all debts due and owing (including
overpayments) to any Federal, State or local government that relate to
[[Page 39428]]
Medicare, Medicaid and all other Federal health care programs, have
been paid or satisfactory arrangements have been made to fulfill
obligations;
(4) Whether HCFA has determined that the individual or entity
complies with, or has made satisfactory arrangements to fulfill, all of
the applicable conditions of participation or supplier conditions for
coverage under the statutes and regulations; and
* * * * *
(6) Whether the individual or entity has, during the period of
exclusion, submitted claims, or caused claims to be submitted or
payment to be made by any Federal health care program, for items or
services the excluded party furnished, ordered or prescribed, including
health care administrative services.
(c) * * *
(1) Has properly reduced his or her ownership or control interest
in the entity below 5 percent;
* * * * *
14. Section 1001.3003 is revised to read as follows:
Sec. 1001.3003 Approval of request for reinstatement.
(a) If the OIG grants a request for reinstatement, the OIG will--
(1) Give written notice to the excluded individual or entity
specifying the date of reinstatement;
(2) Notify HCFA of the date of the individual's or entity's
reinstatement;
(3) Notify appropriate Federal and State agencies that administer
health care programs that the individual or entity has been reinstated
into all Federal health care programs; and
(4) To the extent applicable, give notice to others that were
originally notified of the exclusion.
(b) A determination by the OIG to reinstate an individual or entity
has no effect if a Federal health care program has imposed a longer
period of exclusion under its own authorities.
15. Section 1001.3005 is amended by revising paragraphs (a)
introductory text, (b) and (d) to read as follows:
Sec. 1001.3005 Reversed or vacated decisions.
(a) An individual or entity will be reinstated into Medicare,
Medicaid and other Federal health care programs retroactive to the
effective date of the exclusion when such exclusion is based on--
* * * * *
(b) If an individual or entity is reinstated in accordance with
paragraph (a) of this section, HCFA and other Federal health care
programs will make payment for services covered under such program that
were furnished or performed during the period of exclusion.
* * * * *
(d) An action taken by the OIG under this section will not require
any other Federal health care program to reinstate the individual or
entity if such program has imposed an exclusion under its own
authority.
PART 1002--[AMENDED]
1. The authority citation for part 1002 continues to read as
follows:
Authority: 42 U.S.C. 1302, 1320a-3, 1320a-5, 1320a-7,
1396(a)(4)(A), 1396(p)(1), 1396a(30), 1396a(39), 1396b(a)(6),
1396b(b)(3), 1396b(i)(2) and 1396b(q).
2. Section 1002.2 is amended by revising paragraph (a) to read as
follows:
Sec. 1002.2 General authority.
(a) In addition to any other authority it may have, a State may
exclude an individual or entity from participation in the Medicaid
program for any reason for which the Secretary could exclude that
individual or entity from participation in the Medicare, Medicaid and
other Federal health care programs under sections 1128, 1128A or
1866(b)(2) of the Social Security Act.
* * * * *
PART 1003--[AMENDED]
1. The authority citation for part 1003 is revised to read as
follows:
Authority: 42 U.S.C. 1302, 1320-7, 1320a-7a, 1320a-7e, 1320b-10,
1395dd(d)(1), 1395mm, 1395nn(g), 1395ss(d), 1396b(m), 11131(c) and
11137(b)(2).
2. Section 1003.100 is amended by revising paragraphs (a) and
(b)(1)(iv), (viii), (x) and (xi) and adding paragraph (b)(1)(xii) to
read as follows:
Sec. 1003.100 Basis and purpose.
(a) Basis. This part implements sections 1128(c), 1128A, 1128E,
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 Public Law 99-660
(42 U.S.C. 1320a-7, 1320a-7a, 1320a-7e, 1320a-7(c), 1320b(10), 1395mm,
1395ss(d), 1396(m), 11131(c) and 11137(b)(2)).
(b) * * *
(1) * * *
(iv)(A) 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, or
(B) Are health plans and fail to report information concerning
sanctions or other adverse actions imposed on providers as required to
be reported to the Healthcare Integrity and Protection Data Bank
(HIPDB) in accordance with section 1128E of the Act;
* * * * *
(viii) Have submitted, or caused to be submitted, certain
prohibited claims, including claims for services rendered by excluded
individuals employed by or otherwise under contract with such person,
under one or more Federal health care programs;
* * * * *
(x) Have collected amounts that they know or should know were
billed in violation of Sec. 411.353 of this title and have not refunded
the amounts collected on a timely basis;
(xi) 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; or
(xii) Violate the Federal health care programs' anti-kickback
statute as set forth in section 1128B of the Act.
* * * * *
3. Section 1003.102 is amended by revising paragraphs (a)(2) and
(b)(5); and by adding a new paragraph (b)(11) to read as follows:
Sec. 1003.102 Basis for civil money penalties and assessments.
(a) * * *
(2) An item or service for which the person knew, or should have
known, that the claim was false or fraudulent, including a claim for
any item or service furnished by an excluded individual employed by or
otherwise under contract with that person;
* * * * *
(b) * * *
(5) Fails to report information concerning--
(i) A payment made under an insurance policy, self-insurance or
otherwise, for the benefit of a physician, dentist or other health care
practitioner in settlement of, or in satisfaction in whole or in part
of, a medical malpractice claim or action or a judgment against such a
physician, dentist or other practitioner in accordance with section 421
of Public Law 99-660 (42 U.S.C. 11131) and as required by regulations
at 45 CFR part 60; or
(ii) An adverse action required to be reported to the Healthcare
Integrity and Protection Data Bank as established by section 221 of
Public Law 104-191 and set forth in section 1128E of the Act.
* * * * *
[[Page 39429]]
(11) Has violated section 1128B of the Act by unlawfully offering,
paying, soliciting or receiving remuneration in return for the referral
of business paid for by Medicare, Medicaid or other Federal health care
programs.
* * * * *
4. Section 1003.103 is amended by revising paragraph (a); 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) and (d) through (h) of
this section, the OIG may impose a penalty of not more than $10,000 for
each item or service that is subject to a determination under
Sec. 1003.102.
* * * * *
(g) The OIG may impose a penalty of not more than $25,000 against a
health plan for failing to report information on an adverse action
required to be reported to the Healthcare Integrity and Protection Data
Bank in accordance with section 1128E of the Act and
Sec. 1003.102(b)(5)(ii).
(h) For each violation of Sec. 1003.102(b)(11), the OIG may
impose--
(1) A penalty of not more than $50,000, and
(2) An assessment of up to three times the total amount of
remuneration offered, paid, solicited or received, as specified in
Sec. 1003.104(b).
5. Section 1003.104 is 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 (except for Sec. 1003.102(b)(11)), of not
more than three times the amount claimed for each item or service which
was a basis for the penalty. The assessment is in lieu of damages
sustained by the Department or a State because of that claim.
(b) In accordance with Sec. 1003.102(b)(11), the OIG may impose an
assessment of not more than three times the total amount of
remuneration offered, paid, solicited or received, without regard to
whether a portion of such remuneration was offered, paid, solicited or
received for a lawful purpose.
6. Section 1003.105 is amended by revising the section heading,
paragraph (a)(1) introductory text and paragraph (b)(1) to read as
follows:
Sec. 1003.105 Exclusion from participation in Medicare, Medicaid and
other Federal health care programs.
(a)(1) Except as set forth in paragraph (b) of this section, in
lieu of or in addition to any penalty or assessment, the OIG may
exclude from participation in Medicare, Medicaid and other Federal
health care programs the following persons for a period of time
determined under Sec. 1003.107--
* * * * *
(b)(1)(i) With respect to determinations under Sec. 1003.102(b)(2)
or (b)(3), a physician may not be excluded if the OIG determines that
he or she is the sole community physician or the sole source of
essential specialized services in a community.
(ii) With respect to determinations under Sec. 1003.102(b)(5)(ii),
no exclusion shall be imposed.
* * * * *
7. Section 1003.106 is amended by redesignating paragraph
(a)(1)(vii) as paragraph (a)(1)(ix); by adding new paragraphs
(a)(1)(vii) and (a)(1)(viii); and by revising paragraphs (a)(1)(ii),
(a)(1)(iii), (a)(1)(vi), (a)(2)(i), (a)(2)(ii) and (a)(2)(iii) to read
as follows:
Sec. 1003.106 Determinations regarding the amount of the penalty and
assessment.
(a) * * *
(1) * * *
(ii) The degree of culpability of the contracting provider, or the
person submitting the claim or request for payment, or giving the
information;
(iii) The history of prior offenses of the contracting provider (or
principals of the contracting provider), or the person submitting the
claim or request for payment, or giving the information;
* * * * *
(vi) The amount of financial interest involved with respect to
Sec. 1003.102(b)(10);
(vii) Whether the contracting provider actually knew of the
exclusion when employing or otherwise contracting with an excluded
individual or entity in accordance with Sec. 1003.102(a)(2);
(viii) The harm to patients or any Federal or State health care
program which resulted or could have resulted from the provision of
care by a person or entity with which the contracting provider is
expressly prohibited from contracting under section 1128A(a)(6) of the
Act; and
(ix) * * *
(2) * * *
(i) The nature and circumstances of the failure to properly report
information, or the improper disclosure of information, as required;
(ii) The degree of culpability of the person in failing to provide
timely and complete data or in improperly disclosing, using or
permitting access to information, as appropriate;
(iii) The materiality, or significance of omission, of the
information to be reported, or the materiality of the improper
disclosure of, or use of, or access to information, as appropriate;
* * * * *
8. Section 1003.109 is amended by revising paragraph (a)
introductory text and paragraph (a)(3) to read as follows:
Sec. 1003.109 Notice of proposed determination.
(a) If the Inspector General proposes a penalty and, when
applicable, an assessment, or proposes to exclude a respondent from
participation in Medicare, Medicaid and any other 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--
* * * * *
(3) The reason why such claims, requests for payments or incidents
subject the respondent to a penalty, assessment and exclusion;
* * * * *
9. Section 1003.114 is amended by revising paragraph (a) to read as
follows:
Sec. 1003.114 Collateral estoppel.
(a) Where a final determination pertaining to the respondent's
liability under Sec. 1003.102 has been rendered in any proceeding in
which the respondent was a party and had an opportunity to be heard,
the respondent shall be bound by such determination in any proceeding
under this part.
* * * * *
Dated: February 4, 1999.
June Gibbs Brown,
Inspector General.
Approved: April 8, 1999.
Donna E. Shalala,
Secretary.
[FR Doc. 99-18515 Filed 7-21-99; 8:45 am]
BILLING CODE 4150-04-P
