78336 Federal Register / Vol. 69, No. 250 / Thursday, December 30, 2004 / Rules and Regulations 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 422 

[CMS–4041–IFC] 

RIN 0938–AK71 

Medicare Program; Modifications to 

Managed Care Rules

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS.

ACTION: Interim final rule with comment 

period. 

SUMMARY: This interim final rule with 

comment period corrects a technical 

error made in the August 22, 2003 final 

rule ‘‘Modifications to Medicare Rules’’

(68 FR 50840).

DATES: This interim final rule with 

comment period is effective January 31, 

2005. 

Comment date: To ensure 

consideration, comments must be 

received at one of the addresses 

provided below, no later than 5 p.m. on 

February 28, 2005.

ADDRESSES: In commenting, please refer 

to file code CMS–4041–IFC. Because of 

staff and resource limitations, we cannot 

accept comments by facsimile (FAX) 

transmission. 

You may submit comments in one of 

three ways (no duplicates, please): 

1. Electronically. You may submit 

electronic comments to http://

www.cms.hhs.gov/regulations/

ecomments or to www.regulations.gov

(attachments should be in Microsoft 

Word, WordPerfect, or Excel; however, 

we prefer Microsoft Word). 

2. By mail. You may mail written 

comments (one original and two copies) 

to the following address ONLY: Centers 

for Medicare & Medicaid Services, 

Department of Health and Human 

Services, Attention: CMS–4041–IFC, 

P.O. Box 8010, Baltimore, MD 21244–

1850. 

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 (one original 

and two copies) before the close of the 

comment period to one of the following 

addresses. If you intend to deliver your 

comments to the Baltimore address, 

please call telephone number (410) 786–

7197 in advance to schedule your 

arrival with one of our staff members. 

Room 445–G, Hubert H. Humphrey 

Building, 200 Independence Avenue, 

SW., Washington, DC 20201; or 7500 

Security Boulevard, Baltimore, MD 

21244–1850.

(Because access to the interior of the HHH 

Building is not readily available to persons 

without Federal Government identification, 

commenters are encouraged to leave their 

comments in the CMS drop slots located in 

the main lobby of the building. A stamp-in 

clock is available for persons wishing to 

retain a proof of filing by stamping in and 

retaining an extra copy of the comments 

being filed.)

Comments mailed to the addresses 

indicated as appropriate for hand or 

courier delivery may be delayed and 

received after the comment period. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT:

Tony Hausner, (410) 786–1093.

SUPPLEMENTARY INFORMATION:

Submitting Comments: We welcome 

comments from the public on all issues 

set forth in this rule to assist us in fully 

considering issues and developing 

policies. You can assist us by 

referencing the file code CMS–4041–IFC 

and the specific ‘‘issue identifier’’ that 

precedes the section on which you 

choose to comment.

Inspection of Public Comments: All 

comments received before the close 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. After the close of the 

comment period, CMS posts all 

electronic comments received before the 

close of the comment period on its 

public website. Comments received 

timely will be available for public 

inspection as they are received, 

generally beginning approximately 3 

weeks after publication of a document, 

at the headquarters of the Centers for 

Medicare & Medicaid Services, 7500 

Security Boulevard, Baltimore, 

Maryland 21244, Monday through 

Friday of each week from 8:30 a.m. to 

4 p.m. To schedule an appointment to 

view public comments, phone (410) 

786–7197. 

I. Background

[If you choose to comment on issues in this 

section, please include the caption 

‘‘BACKGROUND’’ at the beginning of your 

comments.]

On August 22, 2003, we published a 

final rule titled, ‘‘Modifications to 

Managed Care Rules’’ (68 FR 50840), 

which implemented the Medicare, 

Medicaid, and SCHIP Benefits 

Improvement and Protection Act of 

2000 (BIPA), which included certain 

changes to the intermediate sanctions 

regulations at 42 CFR 422.758. 

In that final rule, we made limited 

organizational changes to the 

intermediate sanctions regulations (68 

FR 50841); however, when making those 

organizational changes, we made 

technical errors in § 422.752 and 

§ 422.758. Specifically, the $25,000 

Civil Money Penalty (CMP) that had 

been described at § 422.758(a) was 

inadvertently omitted in the revised 

version of the intermediate sanctions 

regulation. We note that these CMPs are 

set forth at section 1857(g)(3)(A) of the 

Social Security Act (Act) and provide 

authority for the Secretary to apply up 

to a $25,000 penalty for each 

determination under section 1857(c)(2) 

that a deficiency not otherwise 

described in section 1857(g)(1) of the 

Act exists and has directly and 

adversely affected (or has the substantial 

likelihood of adversely affecting) one or 

more Medicare Advantage (MA) 

enrollees. 

The omission of the $25,000 CMP 

from § 422.758(a) occurred because we 

included language in § 422.758(a) that 

was intended to replace the first two 

sentences of § 422.752(a). This language 

clarifies that CMS does not have CMP 

authority in the case of the violations set 

forth in § 422.752(a). The OIG has CMP 

authority in the case of these violations. 

In the preamble to our August 22, 2003 

final rule, we noted that we were 

changing § 422.752(a) for this purpose 

(68 FR 50851). However, the regulatory 

text was inadvertently placed at 

§ 422.758(a). 

We also have determined that the 

reference to § 422.756(f)(3) in existing 

§ 422.758(b) more appropriately belongs 

in the introductory text of § 422.758 

because our authority to impose CMPs 

in the amounts set forth in all of 

§ 422.758 is described in § 422.756(f)(3). 

Section § 422.758(b) also contains a 

redundant reference to § 422.752(b), 

which we are eliminating, in this 

interim final rule with comment period, 

to avoid confusion. 

Section 902 of the Medicare 

Prescription Drug, Improvement, and 

Modernization Act of 2003 (MMA) 

amended section 1871(a) of the Act and 

requires the Secretary, in consultation 

with the Director of the Office of 

Management and Budget, to establish 

and publish timelines for the 

publication of Medicare final 

regulations based on the previous 

publication of a Medicare proposed or 

interim final regulation. Section 902 of 

the MMA also states that the timelines 

for these regulations may vary but shall 

not exceed 3 years after publication of 

the preceding proposed or interim final 

Federal Register / Vol. 69, No. 250 / Thursday, December 30, 2004 / Rules and Regulations 78337

regulation except under exceptional 

circumstances.

This interim final rule finalizes 

provisions set forth in the August 22, 

2003 final rule. We will publish the 

final rule within the 3-year time limit 

imposed by section 902 of the MMA. 

Therefore, we believe that the interim 

final rule is in accordance with the 

Congress’ intent to ensure timely 

publication of final regulations. 

II. Provisions of the Interim Final Rule

[If you choose to comment on issues in this 

section, please include the caption 

‘‘PROVISIONS OF THE INTERIM FINAL 

RULE’’ at the beginning of your comments.]

To ensure that the Medicare 

regulations are an accurate reflection of 

our current statutory authority to 

impose CMPs, in this interim final rule 

with comment period, we are correcting 

§ 422.758 to state that if we make a 

determination under § 422.752(b), based 

on any determination under § 422.510(a) 

except a determination under 

§ 422.510(a)(4), we may impose civil 

money penalties, pursuant to 

§ 422.756(f)(3), in the following 

amounts: 

• If the deficiency on which the 

determination is based has directly 

adversely affected (or has the substantial 

likelihood of adversely affecting) one or 

more MA enrollees—up to $25,000 for 

each determination. 

• For each week that a deficiency 

remains uncorrected after the week in 

which the MA organization receives 

CMS’ notice of the determination—up to 

$10,000. 

• If we make a determination, based 

on a determination under 

§ 422.510(a)(1), that an MA organization 

has terminated its contract with us in a 

manner other than as described under 

§ 422.512—$250 per Medicare enrollee 

from the terminated MA plan or plans 

at the time the MA organization 

terminated its contract, or $100,000, 

whichever is greater. 

In addition, we are correcting 

§ 422.752(a) to incorporate the changes 

that we intended to make in the August 

22, 2003 final rule (and which currently 

appear at § 422.758(a)) to provide that 

for the violations listed in § 422.752(a), 

we may impose the sanctions specified 

in § 422.750(a)(2), (a)(3), or (a)(4) on any 

MA organization that has a contract in 

effect. The MA organization may also be 

subject to other applicable remedies 

available under law. 

III. Response to Comments 

Because of the large number of public 

comments we normally receive on 

Federal Register documents, 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, when we proceed 

with a subsequent document, we will 

respond to the comments in the 

preamble to that document. 

IV. Waiver of Proposed Rulemaking 

We ordinarily publish a notice of 

proposed rulemaking in the Federal 

Register and invite public comment on 

the proposed rule. The notice of 

proposed rulemaking includes a 

reference to the legal authority under 

which the rule is proposed, and the 

terms and substances of the proposed 

rule or a description of the subjects and 

issues involved. This procedure can be 

waived, however, if an agency finds 

good cause that a notice-and-comment 

procedure is impracticable, 

unnecessary, or contrary to the public 

interest and incorporates a statement of 

the finding and its reasons in the rule 

issued. 

We find for good cause that it is 

unnecessary to undertake notice and 

comment procedures because this 

correcting amendment does not make 

any substantive policy changes. This 

correcting amendment sets forth selfimplementing provisions of the Act (as 

described above) with respect to the 

imposition of CMPs. Because the rule 

directly conforms to the statute and 

does not articulate new requirements, 

we believe that pursuing notice and 

comment is unnecessary. Moreover, 

because that process could introduce 

confusion regarding our current 

authority to impose CMPs, we find that 

pursuing that process would be both 

impracticable and contrary to the public 

interest. Therefore, for good cause, we 

waive notice and comment procedures 

under 5 U.S.C. 553(b)(B). 

With respect to the requirement of a 

60-day delay in the effective date of any 

final rule under the Congressional 

Review Act (CRA) (see U.S.C. section 

801), the CRA provides that the 60-day 

delayed effective date shall not apply to 

any rule ‘‘which an agency for good 

cause finds that notice and public 

procedure thereon are impracticable, 

unnecessary, or contrary to the public 

interest.’’ (See 5 U.S.C. section 808(2).) 

For the reasons set forth above, we 

believe that additional notice and 

comment rulemaking on this subject 

would be impracticable, unnecessary, or 

contrary to the public interest. 

Therefore, we do not believe that the 

CRA requires a 60-day delay in the 

effective date of this final rule. 

V. Collection of Information 

Requirements 

This document does not impose 

information collection and 

recordkeeping requirements. 

Consequently, it need not be reviewed 

by the Office of Management and 

Budget under the authority of the 

Paperwork Reduction Act of 1995. 

VI. Regulatory Impact

[If you choose to comment on issues in this 

section, please include the caption 

‘‘REGULATORY IMPACT’’ at the beginning 

of your comments.]

We have examined the impact of this 

rule as required by Executive Order 

12866 (September 1993, Regulatory 

Planning and Review), the Regulatory 

Flexibility Act (RFA) (September 16, 

1980, Pub. L. 96–354), section 1102(b) of 

the Social Security Act, the Unfunded 

Mandates Reform Act of 1995 (Pub. L. 

104–4), and Executive Order 13132. 

Executive Order 12866 directs 

agencies to assess all costs and benefits 

of available regulatory alternatives and, 

if regulation is 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 (RIA) must be prepared for 

major rules with economically 

significant effects ($100 million or more 

in any 1 year). This rule does not reach 

the economic threshold and thus is not 

considered a major rule. 

The RFA requires 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 hospitals 

and most other providers and suppliers 

are small entities, either by nonprofit 

status or by having revenues of $6 

million to $29 million in any 1 year. 

Individuals and States are not included 

in the definition of a small entity. We 

are not preparing an analysis for the 

RFA because we have determined that 

this rule will not have a significant 

economic impact on a substantial 

number of small entities. 

In addition, section 1102(b) of the 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 

hospitals. This analysis must conform to 

the provisions of section 604 for final 

rules of the RFA. For purposes of 

section 1102(b) of the Act, we define a 

small rural hospital as a hospital that is 

located outside of a Metropolitan 

Statistical Area and has fewer than 100 

78338 Federal Register / Vol. 69, No. 250 / Thursday, December 30, 2004 / Rules and Regulations 

beds. We are not preparing an analysis 

for section 1102(b) of the Act because 

we have determined that this rule will 

not have a significant impact on the 

operations of a substantial number of 

small rural hospitals. 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 also 

requires that agencies assess anticipated 

costs and benefits before issuing any 

rule that may result in expenditure in 

any 1 year by State, local, or tribal 

governments, in the aggregate, or by the 

private sector, of $110 million. This 

interim final rule with comment period 

does not have any costs associated with 

this requirement and will not approach 

the Unfunded Mandates Reform Act 

threshold. 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates a 

proposed rule (and subsequent final 

rule) that imposes substantial direct 

requirement costs on State and local 

governments, preempts State law, or 

otherwise has Federalism implications. 

Since this regulation does not impose 

any costs on State or local governments, 

the requirements of E.O. 13132 are not 

applicable. 

In accordance with the provisions of 

Executive Order 12866, this regulation 

was reviewed by the Office of 

Management and Budget.

List of Subjects in 42 CFR Part 422 

Administrative practice and 

procedure, Health facilities, Health 

Maintenance Organizations (HMO), 

Medicare+Choice, Penalties, Privacy, 

Provider-sponsored organizations (PSO), 

Reporting and recordkeeping 

requirements.

■ Accordingly, 42 CFR chapter IV is 

corrected by making the following 

correcting amendments:

PART 422—MEDICARE ADVANTAGE 

PROGRAM

■ 1. The authority citation for part 422 

continues to read as follows:

Authority: Secs. 1102 and 1871 of the 

Social Security Act (42 U.S.C. 1302 and 

1395hh).

■ 2. Section 422.752(a) introductory text 

is revised to read as follows:

§ 422.752 Basis for imposing sanctions. 

(a) All intermediate sanctions. For the 

violations listed in this paragraph (a), 

we may impose the sanctions specified 

in § 422.750(a)(2), (a)(3), or (a)(4) on any 

MA organization that has a contract in 

effect. The MA organization may also be 

subject to other applicable remedies 

available under law.

* * * * *

■ 3. Section 422.758 is revised to read as 

follows:

§ 422.758 Maximum amount of civil money 

penalties imposed by CMS. 

If CMS makes a determination under 

§ 422.752(b), based on any 

determination under § 422.510(a) except 

a determination under § 422.510(a)(4), 

CMS may impose civil money penalties, 

pursuant to § 422.756(f)(3), in the 

following amounts: 

(a) If the deficiency on which the 

determination is based has directly 

adversely affected (or has the substantial 

likelihood of adversely affecting) one or 

more Medicare Advantage enrollees—

up to $25,000 for each determination. 

(b) For each week that a deficiency 

remains uncorrected after the week in 

which the Medicare Advantage 

organization receives CMS’ notice of the 

determination—up to $10,000. 

(c) If CMS makes a determination, 

based on a determination under 

§ 422.510(a)(1) that a Medicare 

Advantage organization has terminated 

its contract with CMS in a manner other 

than as described under § 422.512—

$250 per Medicare enrollee from the 

terminated Medicare Advantage plan or 

plans at the time the Medicare 

Advantage organization terminated its 

contract, or $100,000, whichever is 

greater.

Dated: June 23, 2004. 

Mark B. McClellan, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Approved: September 8, 2004. 

Tommy G. Thompson, 

Secretary.

[FR Doc. 04–28155 Filed 12–29–04; 8:45 am] 

BILLING CODE 4120–01–P

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Parts 0, 4 and 63 

[ET Docket No. 04–35; FCC 04–188] 

Disruptions to Communications

AGENCY: Federal Communications 

Commission.

ACTION: Final rule; announcement of 

effective date. 

SUMMARY: The Federal Communications 

Commission announces the effective 

date for Part 4, Disruptions to 

Communications, and the amendments 

to § 63.100, Notification of service 

outage, which also contain information 

collection requirements subject to 

approval by OMB. Furthermore, the 

Federal Communications Commission 

has received approval from the Office of 

Management and Budget (OMB) for the 

new and/or revised information 

collection requirements contained in the 

information collection 3060–0484, 

‘‘New Part 4 of the Commission’s Rules 

Concerning Disruptions to 

Communications.’’

DATES: Part 4 and the amendments to 

§ 63.100, published at 69 FR 70316 

(December 3, 2004), and the information 

collection requirements contained 

therein are effective January 3, 2005.

FOR FURTHER INFORMATION CONTACT:

Charles Iseman at (202) 418–2444, 

charles.iseman@fcc.gov, Office of 

Engineering and Technology, TTY (202) 

418–2989.

SUPPLEMENTARY INFORMATION: The FCC 

published a document in the Federal 

Register of December 3, 2004 (69 FR 

70316) that set forth an effective date of 

January 3, 2005, except for part 4 and 

the amendments to § 63.100, which 

contain information collection 

requirements that had not been 

approved by the Office of Management 

and Budget. The document stated that 

the Commission will publish a 

document in the Federal Register

announcing the effective date for part 4 

and the amendments to § 63.100, and 

the information collection requirements 

contained therein. On December 21, 

2004, OMB approved the information 

collection requirements for 3060–0484, 

‘‘Part 4 of the Commission’s Rules 

Concerning Disruptions to 

Communications.’’ Therefore, by this 

Notice, the Commission announces that 

the effective date for part 4 and the 

amendments to § 63.100, and the 

information collection requirements 

contained therein (3060–0484), will be 

January 3, 2005. The expiration date for 

the information collection requirements 

will be December 31, 2007. 

Under OMB’s terms of clearance, 

OMB’s approval of the information 

collection is based on the Commission’s 

Order Granting Partial Stay, FCC 04–

291, adopted December 20, 2004 and 

released December 22, 2004. That Order 

grants an immediate partial stay of the 

provisions of paragraph 134 of the 

Report and Order (summarized as 69 FR 

70316, December 3, 2004) insofar as it 

requires the reporting as outages of DS3 

simplex events that are not corrected 

within five days of their discovery. At 

this time, the duration of the partial stay 

is unknown and the Commission 

continues discussions with both 

homeland security officials and 

impacted industry representatives. The