Federal Register / Vol. 69, No. 239 / Tuesday, December 14, 2004 / Rules and Regulations 74451

1Eligible beneficiaries may enroll in the Medicare 

drug discount card program beginning no later than 

6 months after the date of enactment of MMA and 

ending December 31, 2005. After December 31, 

2005, beneficiaries enrolled in the program may 

continue to use their drug discount card during a 

short transition period beginning January 1, 2006 

and ending upon the effective date of a beneficiary’s 

outpatient drug coverage under Medicare Part D, 

but no later than the last day of the initial open 

enrollment period under Part D.

action no less often than every five years 

following initiation of that remedial 

action to ensure that human health and 

the environment are being protected. 

EPA has determined as a matter of 

policy that such reviews will also be 

conducted if a removal action leaves 

hazardous substances on site above 

levels that allow for unlimited use and 

unrestricted exposure and no remedial 

action has taken or will take place. 

Since ground water contamination 

remains at the Site above levels that 

allow for unlimited use and unrestricted 

exposure, EPA will use the five-year 

review process to ensure protection of 

human health and the environment. 

EPA completed the first five-year review 

of the Site on September 30, 2002. In 

that five-year review, EPA determined 

that the immediate threats have been 

addressed and the actions taken have 

been protective of human health and the 

environment. EPA plans to complete the 

next five year review prior to September 

30, 2009. 

E. Community Involvement 

Public participation activities have 

been satisfied as required in CERCLA 

Section 113(k), 42 U.S.C. 9613(k), and 

CERCLA Section 117, 42 U.S.C 9617. 

Documents in the deletion docket which 

EPA relied on for recommendation of 

the deletion from the NPL are available 

to the public in the information 

repositories. 

V. Deletion Action 

The EPA, with the concurrence of the 

Commonwealth of Pennsylvania, has 

determined that all appropriate 

responses under CERCLA have been 

completed, and that no further response 

actions, under CERCLA, other than 

O&M of the existing treatment system 

which will be completed under the 1984 

PADER Agreement and five-year 

reviews, are necessary. Therefore, EPA 

is deleting the Site from the NPL. 

Because EPA considers this action to 

be noncontroversial and routine, EPA is 

taking it without prior publication of a 

notice of intent to delete. This action 

will be effective February 14, 2005 

unless EPA receives adverse comments 

by January 13, 2005 on a parallel notice 

of intent to delete published in the 

Proposed Rule section of today’s 

Federal Register. If adverse comments 

are received within the 30-day public 

comment period on the proposal, EPA 

will publish a timely withdrawal of this 

direct final notice of deletion before the 

effective date of the deletion and the 

deletion will not take effect. EPA will 

prepare a response to comments and 

continue with the deletion process on 

the basis of the notice of intent to delete 

and the comments already received. 

There will be no additional opportunity 

to comment.

List of Subjects in 40 CFR Part 300 

Environmental protection, Air 

pollution control, Chemicals, Hazardous 

substances, Hazardous waste, 

Intergovernmental relations, Penalties, 

Reporting and recordkeeping 

requirements, Superfund, Water 

pollution control, Water supply.

Dated: October 26, 2004. 

Richard J. Kampf, 

Acting Regional Administrator, Region III.

■ For the reasons set out in this 

document, 40 CFR part 300 is amended 

as follows:

PART 300—[AMENDED]

■ 1. The authority citation for part 300 

continues to read as follows:

Authority: 33 U.S.C. 1321(c)(2); 42 U.S.C. 

9601–9657; E.O. 12777, 56 FR 54757, 3 CFR., 

1991 Comp., p.351; E.O. 12580, 52 FR 2923, 

3 CFR., 1987 Comp., p. 193.

Appendix B—[Amended]

■ 2. Table 1 of Appendix B to part 300 

is amended by removing the site name 

‘‘York County Solid Waste and Refuse 

Authority, Hopewell Township, PA.’’

[FR Doc. 04–27168 Filed 12–13–04; 8:45 am] 

BILLING CODE 6560–50–P

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Office of Inspector General 

42 CFR Part 1003 

RIN 0991–AB30 

Medicare and State Health Care 

Programs; Fraud and Abuse: OIG Civil 

Money Penalties Under the Medicare 

Prescription Drug Discount Card 

Program

AGENCY: Office of Inspector General 

(OIG), HHS.

ACTION: Final rule.

SUMMARY: In accordance with section 

1860D–31 of the Social Security Act, 

this rule finalizes OIG’s new authority 

for imposing civil money penalties 

(CMPs) against endorsed sponsors under 

the Medicare prescription drug discount 

card program that knowingly engage in 

false or misleading marketing practices; 

overcharge program enrollees; or misuse 

transitional assistance funds.

DATES: The interim rule amending 42 

CFR part 1003 became effective on June 

18, 2004.

FOR FURTHER INFORMATION CONTACT: Joel 

Schaer, Office of External Affairs, (202) 

619–0089.

SUPPLEMENTARY INFORMATION: 

I. Background 

A. OIG Civil Money Penalties 

In 1981, Congress enacted the civil 

money penalty statute, section 1128A of 

the Social Security Act (the Act) (42 

U.S.C. 1320a–7a), as one of several 

administrative remedies to combat 

increases in fraud and abuse. The civil 

money penalty (CMP) law authorized 

the HHS Secretary and the Inspector 

General to impose CMPs and program 

exclusions on individuals and entities 

whose wrongdoing caused injury to 

HHS programs or their beneficiaries. 

Since 1981, the CMP provisions have 

been expanded to apply by reference to 

numerous types of fraudulent and 

abusive activities. 

B. The Medicare Prescription Drug, 

Improvement, and Modernization Act 

Section 101 of the Medicare 

Prescription Drug, Improvement, and 

Modernization Act (MMA) of 2003, as 

enacted by Public Law 108–173 and 

codified in section 1860D–31 of the Act, 

provides for a voluntary prescription 

drug discount card program for 

Medicare beneficiaries entitled to 

benefits, or enrolled, under Part A or 

enrolled under Part B, excluding 

beneficiaries entitled to medical 

assistance for outpatient prescription 

drugs under Medicaid, including 

section 1115 waiver demonstrations. 

Eligible beneficiaries may access 

negotiated prices on prescription drugs 

by enrolling in drug discount card 

programs offered by Medicare-endorsed 

sponsors.1 The Medicare drug discount 

card program is intended to serve as a 

transitional program providing 

immediate assistance to Medicare 

beneficiaries with prescription drug 

costs during calendar years 2004 and 

2005 while preparations are made for 

implementation of the Medicare drug 

benefit under Medicare Part D in 2006.

The implementing regulations 

establishing the requirements for the 

MMA program were published in the 

Federal Register as an interim final rule 

with comment period by the Centers for 

74452 Federal Register / Vol. 69, No. 239 / Tuesday, December 14, 2004 / Rules and Regulations 

2Section 902 of MMA has established timelines 

for the publication of the Medicare rules under 

section 1871(a) of the Act. This provision requires 

CMS to publish a final rule within 3 years of the 

publication of the interim final rule.

3Transitional assistance, as defined in § 403.802 

of the CMS regulations, refers to the subsidy funds 

that transitional enrollees may apply toward the 

cost of covered discount card drugs in the manner 

described in § 403.808(d).

Medicare & Medicaid Services (CMS) on 

December 15, 2003 (68 FR 69840).2

1. Eligibility Procedures and Enrollment 

Sections 1860D–31(b)(1) and (2) of the 

Act, and 42 CFR 403.810(a) and (b) of 

the CMS regulations, establish the 

eligibility criteria for the Medicare drug 

discount card program and for 

transitional assistance. Section 1860D–

31(f)(1)(A) of the Act directs the 

Secretary to specify the procedures for 

determining a beneficiary’s eligibility 

for the Medicare drug discount card 

program or transitional assistance, and 

section 1860D–31(c)(1) directs the 

Secretary to establish a process for 

eligible beneficiaries enrolling in, and 

disenrolling from, an endorsed program. 

These provisions have been codified, 

respectively, in 42 CFR 403.810 and 

403.811 of the CMS regulations. 

2. Endorsed Sponsors 

Section 1860D–31(a)(1)(A) of the Act 

requires the Secretary to endorse 

qualified applicants seeking to offer 

endorsed discount card programs to 

Medicare beneficiaries. MMA sets forth 

specific requirements that applicants 

must satisfy to be eligible for 

endorsement and that endorsed 

sponsors must meet to retain their 

endorsement. The obligations of 

endorsed sponsors related to eligibility 

determinations and enrollment are 

specifically set forth in section II.C.6. of 

the preamble to the interim final rule. 

3. Transitional Assistance 

Under MMA, certain low-income 

Medicare beneficiaries enrolled in the 

Medicare drug discount card program 

are eligible to receive transitional 

assistance of up to $600 per year, which 

may be applied toward the cost of 

covered discount card drugs obtained 

under the program. Section 1860D–

31(h)(1)(C) of the Act requires endorsed 

sponsors to administer the transitional 

assistance on behalf of CMS and to 

demonstrate to the Secretary that they 

have satisfactory arrangements to 

account for the transitional assistance 

provided to transitional assistance 

enrollees. These requirements are 

codified in 42 CFR 403.806(e). 

4. Information and Outreach 

Section 1860D–31(d)(2)(A) of the Act 

requires that each prescription drug 

card endorsed sponsor that offers an 

endorsed discount card program make 

available to beneficiaries eligible for the 

discount card program—through the 

internet and otherwise—information 

that the Secretary identifies as being 

necessary to promote informed choice 

among endorsed discount card 

programs, including information on 

enrollment fees and negotiated prices 

for covered discount card drugs. In 

addition, section 1860D–31(h)(7)(A) of 

the Act limits drug card endorsed 

sponsors to providing under their 

endorsements only products and 

services directly related to covered 

discount card drugs, or discounts on 

over-the-counter drugs; and section 

1860D–31(h)(7)(B) prohibits endorsed 

sponsors from marketing, under their 

endorsements, any products and 

services other than those described in 

section 1860D–31(h)(7)(A). The 

requirements for information to be 

included in materials are contained in 

the CMS regulations at 42 CFR 

403.806(g). 

C. Civil Money Penalties Under Public 

Law 108–173 

Section 1860D–31(i)(3) of the Act 

authorizes the imposition of CMPs 

against endorsed sponsors that 

knowingly engage in conduct that 

violates the requirements of section 

1860D–31 of the Act or engage in false 

or misleading marketing practices. 

Section 403.820(b) of the CMS 

regulations interpreted this to mean that 

those endorsed sponsors that knowingly 

engage in conduct that violates the 

conditions of their endorsement 

agreement with the Department or that 

constitutes false or misleading 

marketing practices may be subject to 

CMPs. 

The Department has divided the 

sanction authority between CMS and 

OIG. Where CMP authority is shared 

between CMS and OIG, the Department 

has assigned sanction authority to OIG 

for those violations that concern 

misleading or defrauding a beneficiary. 

The Department also assigned sanction 

authority to OIG for misuse of 

transitional assistance funds.3 On the 

other hand, CMS has the authority to 

impose CMPs in those instances where 

the endorsed sponsor’s conduct 

constitutes non-compliance with an 

operational requirement not directly 

related to beneficiary protection. 

(Section 403.820(b)(2) of the CMS 

regulations sets forth a full listing of the 

CMS CMP authorities related to the 

Medicare prescription drug card 

program.)

As a result, in accordance with CMS’s 

Medicare prescription drug discount 

card implementing regulations (68 FR 

69787; December 15, 2003), in addition 

to or in place of sanctions that CMS may 

impose, as set forth in 42 CFR 

403.820(a), OIG has been authorized to 

impose CMPs against an endorsed 

sponsor whom it determines knowingly 

(as defined in 42 CFR 1003.102(e)): 

• Misrepresented or falsified 

information in outreach material or 

comparable material provided to a 

program enrollee or other person; 

• Charged a program enrollee in 

violation of the terms of the 

endorsement contract; or 

• Used transitional assistance funds 

in any manner that is inconsistent with 

the purpose of the transitional 

assistance program. 

OIG may impose CMPs of no more 

than $10,000 for each of these 

violations. A violation is deemed to 

occur in each instance when an 

endorsed sponsor (1) provides 

misleading information to a program 

enrollee or other person; (2) overcharges 

a program enrollee; or (3) misuses the 

transitional assistance funds of a 

program enrollee. Appeal rights will be 

afforded in accordance with the appeal 

procedures set forth in 42 CFR parts 

1003 and 1005.

II. Summary Provisions of the Interim 

Final Rule With Comment Period 

On May 19, 2004, we published in the 

Federal Register (69 FR 28842) an 

interim final rule with comment period 

to address these new OIG civil money 

penalty authorities. The interim final 

rule amended 42 CFR part 1003 as 

follows: 

• In § 1003.100, Basis and purpose, 

we revised paragraphs (a) and (b) to 

state the broad purpose of these new 

CMP authorities. 

• In § 1003.101, Definitions, we 

added a definition for the term 

‘‘transitional assistance,’’ consistent 

with the definition in 42 CFR 403.802. 

• In § 1003.102, Basis for CMPs and 

assessments, we added new paragraphs 

(b)(17), (b)(18) and (b)(19) to crossreference the implementing CMS 

regulations and OIG’s authority to 

impose penalties for violations. 

• In § 1003.103, Amount of penalty, 

we added a new paragraph (k) to 

address the $10,000 maximum penalty 

amounts for each of these violations. 

The interim final rule noted that in 

addition to the CMPs set forth above, a 

card sponsor’s misuse of the Medicare 

name or emblem may subject them to 

CMPs in accordance with 42 U.S.C. 

Federal Register / Vol. 69, No. 239 / Tuesday, December 14, 2004 / Rules and Regulations 74453

1320b–10 and OIG regulations at 

§ 1003.102(b)(7), which prohibit the 

misuse of the Medicare name and 

emblem. In general, in accordance with 

the statute and the implementing 

regulations, OIG may impose penalties 

on any person who misuses the term 

‘‘Medicare,’’ or other names associated 

with DHHS in any item constituting a 

communication in a manner which the 

person knows or should know gives the 

false impression that the item is 

approved, endorsed, or authorized by 

the Department. Violators are subject to 

fines of up to $5,000 per violation or, in 

the case of a broadcast or telecast 

violation, $25,000. 

III. Analysis of and Responses to Public 

Comments 

We received no public comments in 

response to the May 19, 2004 interim 

final rule. 

IV. Provisions of the Final Regulations 

The provisions of this final rule are 

identical to the provisions of the May 

19, 2004 interim final rule with 

comment period. 

V. Regulatory Impact Statement 

A. Regulatory Analysis 

We have examined the impacts of this 

rule as required by Executive Order 

12866, the Regulatory Flexibility Act 

(RFA) of 1980, the Unfunded Mandates 

Reform Act of 1995, and Executive 

Order 13132. 

1. Executive Order 12866 

Executive Order 12866 directs 

agencies to assess all costs and benefits 

of available regulatory alternatives and, 

if regulations are necessary, to select 

regulatory approaches that maximize 

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). This is not a major rule as 

defined at 5 U.S.C. 804(2), and it is not 

economically significant since it would 

not have a significant effect on program 

expenditures and there would be no 

additional substantive cost to 

implement the resulting provisions. OIG 

has significant experience in enforcing 

CMPs for a wide variety of violations 

and fraudulent conduct. Over the past 

three fiscal years (FYs), total CMPs 

levied by OIG for various violations and 

fraudulent conduct has averaged about 

$2.2 million annually ($1.1 million in 

FY 2001; $2.4 million in FY 2002; and 

$3.1 million in FY 2003). In addition, 

the revisions to 42 CFR part 1003 set 

forth in this rule are designed to further 

clarify statutory requirements, and 

hence the economic effect of these 

regulatory provisions should impact 

only those limited few endorsed 

sponsors that would perhaps engage in 

prohibited behavior in violation of the 

statute. Given OIG’s enforcement history 

and the nature of the entities subject to 

CMPs, we do not believe that these 

regulations will result in a significant 

economic impact or have an appreciable 

effect on the economy or on Federal or 

State expenditures. 

2. Regulatory Flexibility Act 

The RFA, and the Small Business 

Regulatory Enforcement and Fairness 

Act of 1996, which amended the RFA, 

require agencies to analyze options for 

regulatory relief of small businesses. For 

purposes of the RFA, small entities 

include small businesses, nonprofit 

organizations, and government agencies. 

Most providers are considered to be 

small entities by having revenues of $6 

million to $29 million or less in any one 

year. For purposes of the RFA, most 

physicians and suppliers are considered 

to be small entities. In addition, section 

1102(b) of the Social Security Act 

requires us to prepare a regulatory 

impact analysis if a rule may have a 

significant impact on the operations of 

a substantial number of small rural 

providers. This analysis must conform 

to the provisions of section 604 of the 

RFA.

Because of the requirements to be an 

endorsed sponsor, we anticipate that 

few, if any, endorsed sponsors will be 

small entities and none will be rural 

providers. However, even if some 

sponsored entities are small entities, we 

believe that the aggregate economic 

impact of this rulemaking is minimal 

since it is the nature of the conduct and 

not the size or type of the entity that 

would result in a violation of the statute 

and the regulations. As a result, we have 

concluded that this rulemaking rule 

should not have a significant impact on 

the operations of a substantial number 

of small or rural providers, and that a 

regulatory flexibility analysis is not 

required for this rulemaking. 

3. Unfunded Mandates Reform Act 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 (Public 

Law 104–4) also requires that agencies 

assess anticipated costs and benefits 

before issuing any rule that may result 

in expenditure in any one year by State, 

local, or tribal governments, in the 

aggregate, or by the private sector, of 

$110 million. As indicated, these 

proposed revisions comport with 

congressional and statutory intent and 

clarify the Department’s legal 

authorities against those who defraud or 

otherwise act improperly against the 

Federal and State health care programs. 

As a result, we believe that there are no 

significant expenditures required by 

these revisions that would impose any 

mandates on State, local, or tribal 

governments, or the private sector that 

will result in an expenditure of $110 

million or more (adjusted for inflation) 

in any given year, and that a full 

analysis under the Unfunded Mandates 

Reform Act is not necessary. 

4. Executive Order 13132 

Executive Order 13132, Federalism, 

establishes certain requirements that an 

agency must meet when it promulgates 

a rule that imposes substantial direct 

requirements or costs on State and local 

governments, preempts State law, or 

otherwise has Federalism implications. 

In reviewing this rule under the 

threshold criteria of Executive Order 

13132, we have determined that this 

proposed rule would not significantly 

affect the rights, roles, and 

responsibilities of State or local 

governments. 

The Office of Management and Budget 

(OMB) has reviewed this final rule in 

accordance with Executive Order 12866. 

B. Paperwork Reduction Act 

The provisions of this rulemaking 

impose no express new reporting or 

recordkeeping requirements on health 

care providers or endorsed sponsors.

List of Subjects in 42 CFR Part 1003 

Administrative practice and 

procedure, Fraud, Grant programs—

health, Health facilities, Health 

professions, Maternal and child health, 

Medicaid, Medicare, Penalties, Social 

security.

PART 1003—CIVIL MONEY 

PENALTIES, ASSESSMENTS AND 

EXCLUSIONS

■ Accordingly, the interim final rule 

with comment period amending 42 CFR 

part 1003, which was published on May 

19, 2004 in the Federal Register at 69 FR 

28842–28846 is adopted as a final rule 

without change.

Dated: August 23, 2004. 

Lewis Morris, 

Chief Counsel to the Inspector General.

Approved: November 9, 2004. 

Tommy G. Thompson, 

Secretary.

[FR Doc. 04–27341 Filed 12–13–04; 8:45 am] 

BILLING CODE 4152–01–P