Federal Register / Vol. 76, No. 52 / Thursday, March 17, 2011 / Proposed Rules 14637 

• E-mail: a-and-r-docket@epa.gov. 

Attention Docket ID Number EPA–HQ– 

OAR–2004–0305. 

• Fax: (202) 566–9744. Attention 

Docket ID Number EPA–HQ–OAR– 

2004–0305. 

• Mail: U.S. Postal Service, send 

comments to: EPA Docket Center 

(6102T), EPA West (Air Docket), 

Attention Docket ID Number EPA–HQ– 

OAR–2004–0305, U.S. Environmental 

Protection Agency, Mailcode 2822T, 

1200 Pennsylvania Ave., NW., 

Washington, DC 20460. Please include a 

total of two copies. In addition, please 

mail a copy of your comments on the 

information collection provisions to the 

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Affairs, Office of Management and 

Budget, Attn: Desk Officer for EPA, 725 

17th St., NW., Washington, DC 20503. 

• Hand Delivery: U.S. Environmental 

Protection Agency, EPA West (Air 

Docket), Room 3334, 1301 Constitution 

Avenue, NW., Washington, DC 20004, 

Attention Docket ID Number EPA–HQ– 

OAR–2004–0305. Such deliveries are 

only accepted during the Docket’s 

normal hours of operation, and special 

arrangements should be made for 

deliveries of boxed information. Please 

include a total of two copies. 

Instructions: Direct your comments to 

Docket ID No. EPA–HQ–OAR–2004– 

0305. EPA’s policy is that all comments 

received will be included in the public 

docket without change and may be 

made available online at http:// 

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personal information provided, unless 

the comment includes information 

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means EPA will not know your identity 

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If you send an e-mail comment directly 

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address will be automatically captured 

and included as part of the comment 

that is placed in the public docket and 

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submit an electronic comment, EPA 

recommends that you include your 

name and other contact information in 

the body of your comment and with any 

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cannot read your comment due to 

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able to consider your comment. 

Electronic files should avoid the use of 

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Docket: All documents in the docket 

are listed in the http:// 

www.regulations.gov index. Although 

listed in the index, some information is 

not publicly available, e.g., CBI or other 

information whose disclosure is 

restricted by statute. Certain other 

material, such as copyrighted material, 

will be publicly available only in hard 

copy. Publicly available docket 

materials are available either 

electronically in http:// 

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the EPA Docket Center, EPA West, 

Room 3334, 1301 Constitution Ave., 

NW., Washington, DC. The Public 

Reading Room is open from 8:30 a.m. to 

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excluding legal holidays. The telephone 

number for the Public Reading Room is 

(202) 566–1744, and the telephone 

number for the Docket Center is (202) 

566–1742. 

FOR FURTHER INFORMATION CONTACT: 

Questions concerning the proposed rule 

should be addressed to Mr. Nathan 

Topham, Office of Air Quality Planning 

and Standards, Sector Policies and 

Programs Division, Metals and Inorganic 

Chemicals Group (D243–02), 

Environmental Protection Agency, 

Research Triangle Park, NC 27711, 

telephone number: (919) 541–0483; fax 

number: (919) 541–3207; e-mail 

address: topham.nathan@epa.gov. 

SUPPLEMENTARY INFORMATION: For the 

reasons noted above, the public 

comment period will now end on April 

19, 2011. 

How can I get copies of the proposed 

rule and other related information? 

The proposed rule titled, National 

Emission Standards for Hazardous Air 

Pollutants: Primary Lead Smelting, was 

published February 17, 2011 (76 FR 

9410). EPA has established the public 

docket for the proposed rulemaking 

under docket ID No. EPA–HQ–OAR– 

2004–0305, and a copy of the proposed 

rule is available in the docket. We note 

that, since the proposed rule was 

published, additional materials have 

been added to the docket. Information 

on how to access the docket is presented 

above in the ADDRESSES section. 

Dated: March 10, 2011. 

Gina McCarthy, 

Assistant Administrator. 

[FR Doc. 2011–6218 Filed 3–16–11; 8:45 am] 

BILLING CODE 6560–50–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Office of Inspector General 

42 CFR Part 1007 

[OIG–1203–P] 

State Medicaid Fraud Control Units; 

Data Mining 

AGENCY: Office of Inspector General 

(OIG), HHS. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule amends a 

provision in HHS regulations that 

prohibits State Medicaid Fraud Control 

Units (MFCU) from using Federal 

matching funds to identify fraud 

through screening and analyzing State 

Medicaid claims data, known as data 

mining. To support and modernize 

MFCU efforts to effectively pursue 

Medicaid provider fraud, we propose to 

permit Federal Financial Participation 

(FFP) in the costs of defined data 

mining activities under specified 

conditions. In addition, we propose that 

MFCUs annually report the costs and 

results of approved data mining 

activities to OIG. 

DATES: To ensure consideration, public 

comments must be delivered to the 

address provided below no later than 

5 p.m. on May 16, 2011. 

ADDRESSES: In commenting, please refer 

to file code OIG–1203–P. Because of 

staff and resource limitations, we cannot 

accept comments by facsimile (FAX) 

transmission. 

You may submit comments in one of 

three ways (please choose only one of 

the ways listed): 

1. Electronically. You may submit 

electronic comments on specific 

recommendations and proposals 

through the Federal eRulemaking Portal 

at http://www.regulations.gov. 

(Attachments should be in Microsoft 

Word, if possible.) 

2. By regular, express, or overnight 

mail. You may send written comments 

to the following address: Office of 

Inspector General, Department of Health 

and Human Services, Attention: OIG– 

1203–P, Room 5541, Cohen Building, 

330 Independence Avenue, SW., 

Washington, DC 20201. Please allow 

sufficient time for mailed comments to 

be received before the close of the 

comment period. 

3. By hand or courier. If you prefer, 

you may deliver, by hand or courier, 

your written comments before the close 

of the comment period to Office of 

Inspector General, Department of Health 

and Human Services, Cohen Building, 

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14638 Federal Register / Vol. 76, No. 52 / Thursday, March 17, 2011 / Proposed Rules 

330 Independence Avenue, SW., 

Washington, DC 20201. Because access 

to the interior of the Cohen Building is 

not readily available to persons without 

Federal Government identification, 

commenters are encouraged to schedule 

their delivery with one of our staff 

members at (202) 619–1343. 

For information on viewing public 

comments, please see the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: 

Richard Stern, Department of Health & 

Human Services, Office of Inspector 

General, (202) 619–0480. 

SUPPLEMENTARY INFORMATION: 

Inspection of Public Comments: All 

comments received before the end of the 

comment period are available for 

viewing by the public, including any 

personally identifiable or confidential 

business information that is included in 

a comment. All comments will be 

posted on http://www.regulations.gov as 

soon as possible after they have been 

received. Comments received timely 

will also be available for public 

inspection as they are received, 

generally beginning approximately 3 

weeks after publication of a document, 

at Office of Inspector General, 

Department of Health and Human 

Services, Cohen Building, 330 

Independence Avenue, SW., 

Washington, DC 20201, Monday 

through Friday of each week from 10 

a.m. to 5 p.m. To schedule an 

appointment to view public comments, 

phone (202) 619–1368. 

I. Background 

In 1977, the Medicare-Medicaid AntiFraud and Abuse Amendments (Pub. L. 

95–142) were enacted to strengthen the 

capability of the Government to detect, 

prosecute, and punish fraudulent 

activities under the Medicare and 

Medicaid programs. Section 17(a) of the 

statute amended section 1903(a) of the 

Social Security Act (the Act) to provide 

for Federal participation in the costs 

attributable to establishing and 

operating an MFCU. The requirements 

for operating an MFCU appear at section 

1903(q) of the Act. Regulations 

implementing the MFCU authority 

appear at 42 CFR part 1007 and were 

promulgated in 1978. 

Section 1903(a)(6) of the Act requires 

the Secretary of Health and Human 

Services (the Secretary) to pay FFP to a 

State for MFCU costs ‘‘found necessary 

by the Secretary for the elimination of 

fraud in the provision and 

administration of medical assistance 

provided under the State plan.’’ Under 

the section, States receive 90 percent 

FFP for an initial 3 year period for the 

costs of establishing and operating a 

MFCU, including the costs of training, 

and 75 percent FFP thereafter. 

Presently, all States with MFCUs receive 

FFP at a 75 percent rate. General 

administrative costs of operating a State 

Medicaid program are reimbursed at a 

rate of 50 percent, although enhanced 

FFP rates are available for other 

activities, including those associated 

with Medicaid management information 

systems (MMIS). 

To increase MFCU effectiveness in 

eliminating Medicaid fraud, we propose 

to modify an existing prohibition on the 

payment of FFP for activities generally 

known as ‘‘data mining.’’ We discuss the 

reasons for this proposed modification 

below. 

For the purposes of this proposed 

rule, we are using the term ‘‘data 

mining’’ to refer specifically to the 

practice of electronically sorting 

Medicaid claims through statistical 

models and intelligent technologies to 

uncover patterns and relationships 

contained within the Medicaid claims 

activity and history to identify aberrant 

utilization and billing practices that are 

potentially fraudulent. 

Routine program monitoring 

activities, including data mining, are 

conducted through analysis of Medicaid 

data and have historically been the 

responsibility of each State Medicaid 

agency. This practice places the sole 

burden of identifying potentially 

fraudulent practices based on this type 

of analysis on the State Medicaid 

agencies and requires the MFCUs to 

remain highly dependent on referrals 

from State Medicaid agencies and other 

external sources. 

While MFCUs may have access to 

Medicaid data, which currently may be 

used for the purposes of individual case 

development, they do not have the 

authority to claim FFP to conduct data 

mining to identify potential Medicaid 

fraud and, therefore, are limited to 

relying on referrals from State Medicaid 

agencies based on the State agencies’ 

analysis methods, tools, and techniques. 

Many MFCUs work actively with a 

variety of State agencies and private 

referral sources, such as individual 

providers and private citizens, to 

identify possible fraud or cases of 

patient abuse and neglect and to 

undertake detection activities. 

We believe that amending the existing 

regulation to permit FFP in data mining 

activities will be an efficient use of 

available resources. At the Federal level, 

analysis of claims data has increased 

OIG’s effectiveness in deploying law 

enforcement resources and proactively 

identifying suspected fraud. Using data 

analysis, Medicare Fraud Strike Forces 

operated by HHS and the U.S. 

Department of Justice have identified 

seven ‘‘hot spots’’ based on high 

indicators of fraud against the Medicare 

program. The Strike Forces analyze 

Medicare data to identify unexplained 

high-billing levels in concentrated areas 

so that interagency teams can target 

emerging or migrating schemes along 

with chronic fraud. By using data 

mining and other law enforcement tools 

to efficiently focus Federal law 

enforcement activities, Medicare Fraud 

Strike Force efforts have resulted in 

hundreds of criminal charges, 

convictions and more than $355 million 

in court-ordered restitutions, fines and 

penalties for fraud against the Medicare 

program since 2007. We could not 

attribute these results directly to use of 

data mining and data analysis 

techniques alone. Moreover, we would 

not expect individual State MFCUs to 

produce results comparable to the 

combined efforts of HHS and DOJ in a 

high priority national Medicare 

investigative and prosecutorial effort. 

However, we anticipate that data mining 

by MFCUs at the State level could 

enhance the MFCU’s ability to counter 

new and existing fraud schemes by 

more effectively identifying early fraud 

indicators. In addition, data mining 

would equip MFCUs with more modern 

tools that have been shown at the 

Federal level to help increase the 

numbers of credible investigative leads, 

pursue recoveries, and detect emerging 

fraud and abuse schemes and trends. 

The 1978 publication of the final rule 

now codified in 42 CFR part 1007 

addressed in some detail the 

relationship between the MFCUs and 

the State Medicaid agency. In response 

to a comment that MFCUs should be 

responsible for the ‘‘investigation of 

non-fraudulent program abuse,’’ the 

preamble to the final rule noted that 

functions such as ‘‘claims processing, 

utilization control and other reviews or 

analysis’’ are already subject to incentive 

funding as part of the mechanized 

claims processing systems operated by 

the State Medicaid agency (43 FR 32078, 

32080–32081 (July 24, 1978)). The 

preamble stated that ‘‘there is no 

indication that Congress intended an 

overlap of funding for such matters’’ (43 

FR 32081). Data mining is one such 

function that may be conducted as part 

of the State Medicaid agency’s 

mechanized claims processing system 

and is subject to Federal reimbursement 

received by State Medicaid agencies. 

Since issuance of the 1978 rule, tools 

and methods for identifying aberrant 

patterns in claims data have advanced 

significantly and become more widely 

available. At the same time, health care 

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fraud schemes have become more 

sophisticated. Use of data mining 

technology is a strategy that is routinely 

used by law enforcement agencies to 

identify billing patterns and provider 

linkages that may have been previously 

undetected with traditional methods of 

claims review. We believe that allowing 

MFCUs the ability to receive funding for 

use of sophisticated data mining 

technology would allow them to 

marshal their resources more effectively 

and take full advantage of their 

expertise in detecting and investigating 

Medicaid fraud. It would also allow the 

MFCUs to operate without relying solely 

on individual case referrals from a 

Medicaid program integrity unit or from 

other sources. 

‘‘Review contractors’’ selected by the 

CMS Medicaid Integrity Group also may 

perform data mining as part of their 

activities. Therefore, MFCUs that 

receive approval to conduct data mining 

as part of their respective 

memorandums of understanding would 

need to coordinate their activities both 

with State Medicaid agencies and the 

review contractors. All review 

contractors already operate under a 

‘‘Joint Operating Agreement’’ with each 

of the States in which they are 

operating. Review contractors are also 

required to share with MFCUs, as well 

as with other interested law 

enforcement or oversight agencies, the 

algorithms they are using and the 

identity of any targets that are identified 

as a result of their data mining 

activities. 

A 2007 OIG study identified 

variability among States in the level of 

cooperation in identifying cases of 

potential fraud and in the number and 

quality of referrals from State Medicaid 

agencies to MFCUs (Suspected Medicaid 

Fraud Referrals, OEI–07–04–00181, 

January 2007). Based on the variability 

found in this study, we believe that 

allowing MFCUs to claim FFP to 

conduct data mining, performed in 

cooperation with the State Medicaid 

agencies, would reduce such variability 

and increase the level of referrals in 

some States. 

We believe that three elements are 

critical to ensuring the effective use of 

data mining by MFCUs. First, we 

believe that MFCUs and State Medicaid 

agencies must fully coordinate the 

MFCUs’ use of data mining and the 

identification of possible provider fraud. 

For example, MFCUs should not pursue 

fraud investigations without 

determining whether the State Medicaid 

agency is considering an overpayment 

or other administrative action for the 

same provider. Second, programmatic 

changes (for example, changes in billing 

codes) may result in certain data 

appearing aberrant when in fact they are 

not. In such situations, MFCU staff 

conducting data mining would need to 

rely on the programmatic knowledge of 

State Medicaid agency staff to 

appropriately identify possible 

instances of fraud. Third, we believe 

that MFCU staff would need to be 

properly trained in data mining 

techniques. 

For these reasons, we are proposing to 

include additional language in 42 CFR 

section 1007.20 that establishes the 

following conditions under which an 

MFCU may claim FFP in costs of data 

mining: (1) The MFCU describes the 

duration of the data mining activity and 

the amount of staff time to be expended; 

(2) the MFCU identifies the methods of 

cooperation between the MFCU and 

Medicaid agency, and between the 

MFCU and review contractors selected 

by the CMS Medicaid Integrity Group; 

and (3) MFCU employees engaged in 

data mining receive specialized training 

in data mining techniques. We are also 

proposing that the agreement between 

the MFCU and Medicaid agency, 

required under section 1007.9(d) of the 

regulations, describe how the MFCU 

will satisfy these conditions and that 

OIG, as the oversight agency for the 

MFCUs, must approve this part of the 

agreement. OIG would review and 

approve proposed agreements in 

consultation with CMS. FFP will only 

be available to those States that satisfy 

the conditions at section 1007.20 and 

receive approval from OIG. 

Including the terms of an MFCU’s 

data mining in the existing agreement 

with the Medicaid agency would be 

logical and efficient. Data mining has 

been the traditional province of State 

Medicaid agencies and depends upon 

access to data maintained by the 

Medicaid agencies. Thus, data mining 

requires unique coordination of the 

resources and expertise of both an 

MFCU and a State Medicaid agency to 

avoid duplication and to leverage each 

agency’s resources. We do not intend 

that this coordination, as part of the 

agreement between the agencies, 

interfere with an MFCU’s independence 

or its separate and distinct identity. As 

before, a Medicaid agency may not 

provide ongoing scrutiny or review of 

an MFCU’s data mining activities and 

under no circumstances would a State 

Medicaid agency be able to prevent or 

prohibit an MFCU from initiating, 

carrying out or completing an 

investigation or prosecution that may 

result from data mining. 

We are also proposing to add a 

provision that requires those MFCUs 

approved to claim FFP and engage in 

data mining to include the following 

information in their annual report: Costs 

associated with expenditures attributed 

to data mining activities; the number of 

cases generated from those data mining 

activities; the outcome and status of 

those cases; and monetary recoveries 

resulting from those activities. This 

information will be used by OIG in 

conducting its oversight and monitoring 

of the MFCUs. 

II. Provisions of the Proposed 

Regulation 

Federal regulations at 42 CFR 

1007.19(e)(2) specify that State MFCUs 

are prohibited from using Federal 

matching funds to conduct ‘‘efforts to 

identify situations in which a question 

of fraud may exist, including the 

screening of claims, analysis of patterns 

of practice, or routine verification with 

recipients of whether services billed by 

providers were actually received.’’ The 

prohibition on Federal matching for 

‘‘screening of claims [and] analysis of 

patterns of practice’’ is commonly 

interpreted as a prohibition on Federal 

matching for the costs of data mining by 

MFCUs. We propose to amend section 

1007.19(e) to provide for an exception to 

this general prohibition on FFP under 

conditions described in new section 

1007.20. 

We propose to add a new section 

1007.20 that would describe the 

conditions under which the Federal 

share of data mining costs would be 

available to MFCUs. We would also 

amend section 1007.1 (Definitions) by 

adding a definition of data mining for 

the purposes of this rule. Finally, the 

proposed rule would amend 42 CFR 

section 1007.17 (Annual Report) to 

include additional reporting 

requirements by MFCUs to capture costs 

associated with expenditures attributed 

to data mining activities; the number of 

cases generated from those data mining 

activities; the outcome and status of 

those cases; and monetary recoveries 

resulting from those activities. 

III. Regulatory Impact Statement 

A. Regulatory Analysis 

We have examined the impacts of this 

proposed rule as required by Executive 

Order 12866, the Unfunded Mandates 

Reform Act of 1995, and the Regulatory 

Flexibility Act of 1980 (RFA) (Pub. L. 

96–354). 

Executive Order 12866 

Executive Order 12866 directs 

agencies to assess all costs and benefits 

of available regulatory alternatives and, 

when regulation is necessary, to select 

regulatory approaches that maximize 

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14640 Federal Register / Vol. 76, No. 52 / Thursday, March 17, 2011 / Proposed Rules 

net benefits (including potential 

economic, environmental, public health, 

and safety effects; distributive impacts; 

and equity). A regulatory impact 

analysis must be prepared for major 

rules with economically significant 

effects ($100 million or more in any 

given year). Since this proposed 

regulation will not have a significant 

effect on program expenditures and as 

there are no additional substantive costs 

to implement the resulting provision, 

we do not consider this to be a major 

rule. 

The proposed rule would allow 

MFCUs to obtain Federal matching 

funds to conduct data mining in efforts 

to detect potential fraudulent activity. 

We believe that the aggregate economic 

impact of this rule will be minimal and 

will have no significant effect on the 

economy or on Federal or State 

expenditures. However, since MFCUs 

have until this year not conducted data 

mining, we have only limited 

information about costs and benefits at 

the State level. One State MFCU, 

Florida, received approval from the 

Secretary of Health and Human Services 

to conduct data mining as a 

demonstration project under section 

1115 of the Social Security Act that 

commenced on August 1, 2010. 

Any economic impact from 

reimbursing State MFCU data mining 

activities will likely result in savings of 

both State and Federal dollars. For the 

MFCU community as a whole, the 

return on investment from MFCU 

activities (calculated from the ratio of 

total reported dollar value of civil and 

criminal recoveries to the total dollar 

value of Federal and State expenditures 

for all MFCUs) exceeded 6.0 for the last 

3 available years, Federal Fiscal Years 

(FYs) 2007, 2008, and 2009. This ratio 

does not reflect the considerable output 

of the MFCUs related to their criminal 

prosecutions that do not result in 

monetary recoveries, including more 

than 1,200 criminal convictions for each 

of FYs 2007, 2008, and 2009. 

We anticipate that the return on 

investment from data mining activities 

by the MFCUs will enhance the ability 

of MFCUs to effectively target and 

deploy existing enforcement resources, 

which is expected to result in increased 

numbers of enforcement actions and 

recoveries. To the extent that there is 

any economic impact, that impact will 

likely result in savings of Federal and 

State dollars. 

Unfunded Mandates Reform Act 

Title II of the Unfunded Mandates 

Reform Act of 1995 (UMRA) (2 U.S.C. 

1531–1538) establishes requirements for 

Federal agencies to assess the effects of 

their regulatory actions on State, local, 

and tribal governments and the private 

sector. Under UMRA, before issuing any 

rule that may result in costs greater than 

$110 million to State, local, or tribal 

governments, in the aggregate, or to the 

private sector, agencies must assess the 

rule’s anticipated costs and benefits. 

This proposed rule does not impose any 

Federal mandates on any State, local, or 

tribal government or the private sector 

within the meaning of UMRA, and thus, 

a full analysis under UMRA is not 

necessary. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

(5 U.S.C. 601 et seq.) generally requires 

an agency to conduct a regulatory 

flexibility analysis of any rule subject to 

notice and comment rulemaking 

requirements unless the agency certifies 

that the rule will not have a significant 

economic impact on a substantial 

number of small entities. For the 

purposes of RFA, small entities include 

small businesses, certain nonprofit 

organizations, and small government 

jurisdictions. Individuals and States are 

not included in this definition of a small 

entity. This proposed rule would revise 

regulations that prohibit State MFCUs 

from using Federal matching funds to 

conduct ‘‘efforts to identify situations in 

which a question of fraud may exist, 

including the screening of claims, 

analysis of patterns of practice, or 

routine verification with recipients of 

whether services billed by a provider 

were actually received.’’ These revisions 

impose no significant economic impact 

on a substantial number of small 

entities. Therefore, the undersigned 

certifies that this rule will not have a 

significant impact on a substantial 

number of small entities. 

Executive Order 13132 

Executive Order 13132 (entitled 

‘‘Federalism’’) prohibits, to the extent 

practicable and permitted by law, an 

agency from promulgating a regulation 

that has federalism implications and 

either imposes substantial direct 

compliance costs on State and local 

governments and is not required by 

statute, or preempts State law, unless 

the relevant requirements of section 6 of 

the Executive Order are met. This rule 

does not have federalism implications 

and does not impose substantial direct 

compliance costs on State and local 

governments or preempt State law 

within the meaning of the Executive 

Order. 

B. Paperwork Reduction Act 

Under the Paperwork Reduction Act 

(PRA) of 1995, before a collection-ofinformation requirement is submitted to 

Office of Management and Budget 

(OMB) for review and approval, we are 

required to provide a 60-day notice in 

the Federal Register and solicit public 

comment. We propose to require that 

MFCUs report annually on the costs of 

data mining and the outcomes of cases 

identified, including monetary 

recoveries. In order to evaluate fairly 

whether this information collection 

should be approved by OMB, section 

3506(c)(2)(A) of the PRA requires that 

we solicit comment on the following 

issues: 

• The need for the information 

collection and its usefulness in carrying 

out the proper functions of our agency; 

• The accuracy of our estimate of the 

information collection burden; 

• The quality, utility, and clarity of 

the information to be collected; and 

• Recommendations to minimize the 

information collection burden on the 

affected public, including automated 

collection techniques. 

Under the PRA, the time, effort, and 

financial resources necessary to meet 

the information collection requirements 

referenced in this section are to be 

considered. We explicitly seek, and will 

consider, public comment on our 

assumptions as they relate to the PRA 

requirements summarized in this 

section. Comments on these information 

collection activities should be sent to 

the following address within 60 days 

following the Federal Register 

publication of this proposed rule: OIG 

Desk Officer, Office of Management and 

Budget, Room 10235, New Executive 

Office Building, 725 17th Street, NW., 

Washington, DC 20053. 

IV. Public Inspection of Comments and 

Response to Comments 

Comments will be available for public 

inspection beginning May 16, 2011, in 

Room 5541, Office of External Affairs, 

Office of Inspector General, at 330 

Independence Avenue, SW., 

Washington, DC 20201, from Monday 

through Friday of each week (Federal 

holidays excepted) between the hours of 

10 a.m. and 5 p.m., (202) 619–1368. 

Because of the large number of items 

of correspondence we normally receive 

on Federal Register documents 

published for comment, we are not able 

to acknowledge or respond to them 

individually. We will consider all 

comments we receive by the date and 

time specified in the DATES section of 

this preamble, and will respond to the 

comments in the preamble of the final 

rule. 

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Federal Register / Vol. 76, No. 52 / Thursday, March 17, 2011 / Proposed Rules 14641 

List of Subjects in 42 CFR Part 1007 

Administrative practice and 

procedure, Fraud, Grant programs— 

health, Medicaid, Reporting and 

recordkeeping requirements. 

Accordingly, 42 CFR part 1007 is 

proposed to be amended as set forth 

below: 

PART 1007—[AMENDED] 

1. Revise the authority citation to part 

1007 to read as follows: 

Authority: 42 U.S.C. 1396b(a)(6), 

1396b(b)(3), 1396b(q), and 1302. 

2. In § 1007.1, add in alphabetical 

order the definition for ‘‘data mining’’ to 

read as follows: 

§ 1007.1 Definitions. 

* * * * * 

Data mining is defined as the practice 

of electronically sorting Medicaid 

claims through statistical models and 

intelligent technologies to uncover 

patterns and relationships contained 

within the Medicaid claims activity and 

history to identify aberrant utilization 

and billing practices that are potentially 

fraudulent. 

* * * * * 

3. In § 1007.17, add paragraph (i) to 

read as follows: 

§ 1007.17 Annual report. 

* * * * * 

(i) All costs expended that year 

attributed to data mining activities 

under § 1007.20; the number of cases 

generated from those data mining 

activities; the outcome and status of 

those cases, including the expected and 

actual monetary recoveries (both 

Federal and non-Federal share); and any 

other relevant indicia of return on 

investment from such activities. 

* * * * * 

4. In § 1007.19, revise paragraph (e)(2) 

to read as follows: 

§ 1007.19 Federal financial participation 

(FFP). 

* * * * * 

(e) * * * 

(2) Routine verification with 

recipients of whether services billed by 

providers were actually received, or, 

except as provided in section 1007.20, 

efforts to identify situations in which a 

question of fraud may exist, including 

the screening of claims and analysis of 

patterns of practice that involve data 

mining as defined in section 1007.1; 

* * * * * 

5. Add § 1007.20 to read as follows: 

§ 1007.20 Conditions under which data 

mining is permissible and approval by HHS 

Office of Inspector General. 

(a) Notwithstanding § 1007.19(e)(2), a 

unit may engage in data mining and 

receive Federal Financial Participation 

only under the three following 

conditions: 

(1) The activity has a defined duration 

and staff time devoted to the activity is 

described; 

(2) The MFCU identifies the methods 

of cooperation between the MFCU and 

State Medicaid agency as well as a 

primary point of contact for data mining 

at the two agencies; and 

(3) MFCU employees engaged in data 

mining receive specialized training in 

data mining techniques. 

(b) The MFCU shall describe how it 

will comply with each of the conditions 

described in paragraph (a) of this 

section as part of the agreement required 

by § 1007.9(d). 

(c) The Office of Inspector General, 

Department of Health and Human 

Services, in consultation with the 

Centers for Medicare & Medicaid 

Services, approves in advance the 

provisions of the agreement as defined 

in paragraph (b) of this section. 

Dated: May 14, 2010. 

Daniel R. Levinson, 

Inspector General. 

Dated: October 15, 2010. 

Kathleen Sebelius, 

Secretary, Department of Health and Human 

Services. 

Editorial Note: This document was 

received in the Office of the Federal Register 

on March 10, 2011. 

[FR Doc. 2011–6012 Filed 3–16–11; 8:45 am] 

BILLING CODE 4152–01–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 209 and 252 

Defense Federal Acquisition 

Regulation Supplement; Identification 

of Critical Safety Items (DFARS Case 

2010–D022) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Proposed rule. 

SUMMARY: DoD is proposing to amend 

the Defense Federal Acquisition 

Regulation Supplement (DFARS) to add 

a contract clause that clearly identifies 

any items being purchased that are 

critical safety items so that the proper 

risk-based surveillance can be 

performed. 

DATES: Comments on the proposed rule 

should be submitted in writing to the 

address shown below on or before May 

16, 2011, to be considered in the 

formation of the final rule. 

ADDRESSES: Submit comments 

identified by DFARS Case 2010–D022, 

using any of the following methods: 

Æ Regulations.gov: http:// 

www.regulations.gov. 

Submit comments via the Federal 

eRulemaking portal by inputting 

‘‘DFARS Case 2010–D022’’ under the 

heading ‘‘Enter keyword or ID’’ and 

selecting ‘‘Search.’’ Select the link 

‘‘Submit a Comment’’ that corresponds 

with ‘‘DFARS Case 2010–D022.’’ Follow 

the instructions provided at the ‘‘Submit 

a Comment’’ screen. Please include your 

name, company name (if any), and 

‘‘DFARS Case 2010–D022’’ on your 

attached document. 

Æ E-mail: dfars@osd.mil. Include 

DFARS Case 2010–D022 in the subject 

line of the message. 

Æ Fax: 703–602–0350. 

Æ Mail: Defense Acquisition 

Regulations System, Attn: Meredith 

Murphy, OUSD(AT&L)DPAP(DARS), 

Room 3B855, 3060 Defense Pentagon, 

Washington, DC 20301–3060. 

Comments received generally will be 

posted without change to http:// 

www.regulations.gov, including any 

personal information provided. To 

confirm receipt of your comment(s), 

please check http://www.regulations.gov 

approximately two to three days after 

submission to verify posting (except 

allow 30 days for posting of comments 

submitted by mail). 

FOR FURTHER INFORMATION CONTACT: 

Meredith Murphy, Defense Acquisition 

Regulations System, OUSD (AT&L) 

DPAP (DARS), Room 3B855, 3060 

Defense Pentagon, Washington, DC 

20301–3060. Telephone 703–602–1302; 

facsimile 703–602–0350. 

SUPPLEMENTARY INFORMATION: 

I. Background 

This DFARS case was initiated at the 

request of the Defense Contract 

Management Agency so that when DoD 

requiring activities identify 

procurements involving critical safety 

items, the buying activities will include 

a clause in the solicitation and resulting 

contract that identifies specific items in 

the procurement that are critical safety 

items. 

The National Defense Authorization 

Act for Fiscal Year 2004 (Pub. L. 108– 

136), section 802, entitled ‘‘Quality 

Control in Procurement of Aviation 

Critical Safety Items and Related 

WReier-Aviles on DSKGBLS3C1PROD with PROPOSALS-1