[Federal Register Volume 82, Number 175 (Tuesday, September 12, 2017)]
[Rules and Regulations]
[Pages 42748-42749]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-19311]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 403
[CMS-6076-IFR2]
RIN 0991-AC0
Adjustment of Civil Monetary Penalties for Inflation; Correcting
Amendment
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Interim final rule; correcting amendment.
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SUMMARY: In the September 6, 2016 Federal Register (81 FR 61538), we
published an interim final rule (IFR) issuing a new regulation to
adjust for inflation the maximum civil monetary penalty amounts for the
various civil monetary penalty authorities for all agencies within HHS.
This correcting amendment corrects a limited number of technical and
typographical errors identified in the CMS provisions of the September
6, 2016 IFR.
DATES:
Effective date: This correcting amendment is effective September
12, 2017.
Applicability date: The corrections indicated in this correcting
amendment are applicable beginning September 6, 2016.
FOR FURTHER INFORMATION CONTACT: Ian Mahoney, (410) 786-4247.
SUPPLEMENTARY INFORMATION:
I. Background
In the September 6, 2016 (81 FR 61538) Federal Register, in the
interim final rule (IFR) titled ``Adjustment of Civil Monetary
Penalties for Inflation,'' there is a technical error identified and
corrected in this correcting amendment. The provisions of this
correcting amendment are effective as if they had been included in the
IFR published on September 6, 2016 and, accordingly, are applicable
beginning September 6, 2016.
The Federal Civil Penalties Inflation Adjustment Act Improvements
Act of 2015 (the 2015 Act) (section 701 of the Bipartisan Budget Act of
2015, Pub. L. 114-74, enacted on November 2, 2015), which amended the
Federal Civil Penalties Inflation Adjustment Act of 1990 (the Inflation
Adjustment Act) (Pub. L. 101-410, 104 Stat. 890 (1990) (codified as
amended at 28 U.S.C. 2461 note 2(a)), is intended to improve the
effectiveness of civil monetary penalties and to maintain the deterrent
effect of such penalties by requiring agencies to adjust the civil
monetary penalties for inflation on an initial basis and annually. The
U.S. Department of Health and Human Services (HHS) lists the civil
monetary penalties and the penalty amounts administered by all of its
agencies in tabular form in 45 CFR 102.3.
II. Summary of Errors
On page 61561 of the IFR, in the table indicating the changes in
regulations text for Sec. 403.912(a)(1), we inadvertently made errors
in the specifying the minimum and maximum civil monetary penalty
amounts to which the inflation adjustment would be applied (the ``base
penalty range''). Specifically, we inadvertently changed the base
penalty range from $1,000 and $10,000 to $10,000 and $100,000,
respectively. The statutory authority for this civil money penalty is
section 1128G of the Act (42 U.S.C. 1320a-7h), which requires
applicable manufacturers to report annually to CMS any payments or
other transfers of value to covered recipients. In addition, the
statute requires applicable manufacturers and applicable group
purchasing organizations to report annually to CMS ownership investment
interests held by physicians or their family members in such entities.
Section 1128G(b)(1) of the Act provides that if an applicable
manufacturer or applicable group purchasing organization fails to
report the required information in timely manner to CMS, the entity is
subject to a civil money penalty amount between $1,000 and $10,000 for
each payment or transfer of value or ownership or investment interest
not reported, up to an annual maximum of $150,000 per submission by a
reporting entity. Accordingly, we are revising
[[Page 42749]]
Sec. 403.912(a)(1) to correct the typographical error in the penalty
ranges originally established in section 1128G of the Act.
III. Waiver of Proposed Rulemaking and Delay in Effective Date
In accordance with section 553(b) of the Administrative Procedure
Act (APA) (5 U.S.C. 553(b)), we ordinarily publish a notice of proposed
rulemaking in the Federal Register to provide for a period of public
comment before the provisions of a rule take effect. However, we can
waive this notice and comment procedure if the Secretary finds, for
good cause, that the notice and comment process is impracticable,
unnecessary, or contrary to the public interest, and incorporates a
statement of the finding and the reasons therefore in the notice.
Section 553(d) of the APA ordinarily requires a 30-day delay in
effective date of final rules after the date of their publication in
the Federal Register. This 30-day delay in effective date can be
waived, however, if an agency finds for good cause that the delay is
impracticable, unnecessary, or contrary to the public interest, and the
agency incorporates a statement of the findings and its reasons in the
rule issued.
We believe that this document does not constitute a rulemaking that
would be subject to the requirement for a public comment period.
Specifically, we find that undertaking further notice and comment
procedures to correct the IFR in unnecessary and contrary to public
interest.
First, we believe it is unnecessary to allow for public comment
regarding whether to correct a misstated penalty range that is
inconsistent with, and exponentially higher than, that permitted by the
authorizing statute. As noted previously, this correcting amendment
merely corrects a typographical error in the base penalty range to
which the inflation increase implemented by the IFR would be applied.
This correction is necessary to ensure that the base penalty range does
not exceed the range authorized under section 1128G(b)(1)(A) of the
Act, as adjusted under the Inflation Adjustment Act. Public comment on
this correction amendment is unnecessary because it could never change
the statutory penalty range at issue. We note that the IFR never
indicated that we were increasing the base penalty range identified in
this or any other civil money penalty authority. In fact, on page 61548
of the IFR, we indicated that the new inflation adjusted penalty range
under Sec. 403.912(a) would be from $1,087 to $10,874 per unreported
arrangement, up to a calendar year cap of $163,117. Furthermore, we
note that the erroneous base range stated on page 61561 of the IFR
makes little sense in light of the statutory calendar year cap for this
penalty. Under the original base penalty range, CMS could impose the
minimum penalty of $1,000 for up to 150 unreported arrangements. Under
the erroneous regulations text in the IFR, CMS would be permitted to
impose the minimum penalty amount of $10,000 for only a maximum of 16
unreported arrangements. Even if we had the statutory authority to
increase the base penalty range through rulemaking, the maximum penalty
amount erroneously stated in the IFR is patently inconsistent with one
of the stated policies of the IFR--to maintain the deterrent effect of
civil money penalties. Second, we believe that providing an opportunity
for public comment on this correcting amendment is contrary to the
public interest. First, as noted previously, public comment in this
case could never change the statutory penalty range at issue. We
believe that it would not be in the public interest to offer a futile
comment period. Second, the entities subject to civil money penalties
authorized under section 1128G(b) of the Act should be advised, in a
timely manner, of the correct amounts for which they could be liable.
It is in the public interest to ensure that the regulations accurately
reflect the statutory authority.
For similar reasons, we are also waiving the 30-day delay in
effective date for this correcting amendment. First, we believe it is
unnecessary to delay the effective date of corrections to a
typographical error in regulation text that was patently inconsistent
with the relevant statutory authority. Second, we believe that delaying
the effective date of these corrections would be contrary to the public
interest because the entities subject to civil money penalties should
be advised, in a timely manner, of the correct amounts for which they
could be liable. Therefore, we find good cause to waive the 30-day
delay in effective date.
Finally, the corrections indicated in this correcting amendment are
applicable to civil monetary penalties as if they had been included in
the IFR. That is, the corrections are applicable to civil money
penalties imposed under Sec. 403.912(a)(1) beginning September 6,
2016, the date the IFR became effective. We do not believe this
correcting amendment constitutes retroactive rulemaking because the
erroneous base penalty range was never authorized under section
1128G(b) of the Act. In addition, we have not imposed any penalties
under Sec. 403.912(a)(1) since the effective date of the IFR.
List of Subjects in 42 CFR Part 403
Grant programs--health, Health insurance, Hospitals,
Intergovernmental relations, Medicare, Reporting and recordkeeping
requirements.
Accordingly, as noted in section II. of this document, the Centers
for Medicare & Medicaid Services is making the following correcting
amendments to 42 CFR part 403:
PART 403--SPECIAL PROGRAMS AND PROJECTS
0
1. The authority citation for part 403 continues to read as follows:
Authority: 42 U.S.C. 1395b-3 and Secs. 1102 and 1871 of the
Social Security Act (42 U.S.C. 1302 and 1395hh).
Sec. 403.912 [Amended]
0
2. Section 403.912(a)(1) is amended by removing the phrase ``not less
than $10,000, but not more than $100,000'' and adding in its place the
phrase ``not less than $1,000, but not more than $10,000.''
Dated: August 17, 2017.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
Dated: September 6, 2017.
Thomas E. Price,
Secretary, Department of Health and Human Services.
[FR Doc. 2017-19311 Filed 9-11-17; 8:45 am]
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