Federal Register / Vol. 74, No. 163 / Tuesday, August 25, 2009 / Rules and Regulations 42777 

violations of law that are not strictly 

within its statutory or other authority or 

may compile information in the course 

of an investigation which may not be 

relevant to a specific prosecution. It is 

impossible to determine in advance 

what information collected during an 

investigation will be important or 

crucial to the apprehension of fugitives. 

In the interests of effective law 

enforcement, it is necessary to retain 

such information in this system of 

records because it can aid in 

establishing patterns of criminal activity 

and can provide valuable leads for 

federal and other law enforcement 

agencies. This consideration applies 

equally to information acquired from, or 

collated or analyzed for, both law 

enforcement agencies and agencies of 

the U.S. foreign intelligence community 

and military community. 

(7) From subsection (e)(2) because in 

a criminal, civil, or regulatory 

investigation, prosecution, or 

proceeding, the requirement that 

information be collected to the greatest 

extent practicable from the subject 

individual would present a serious 

impediment to law enforcement because 

the subject of the investigation, 

prosecution, or proceeding would be 

placed on notice as to the existence and 

nature of the investigation, prosecution, 

and proceeding and would therefore be 

able to avoid detection or apprehension, 

to influence witnesses improperly, to 

destroy evidence, or to fabricate 

testimony. Moreover, thorough and 

effective investigation and prosecution 

may require seeking information from a 

number of different sources. 

(8) From subsection (e)(3) (to the 

extent applicable) because the 

requirement that individuals supplying 

information be provided a form stating 

the requirements of subsection (e)(3) 

would constitute a serious impediment 

to law enforcement in that it could 

compromise the existence of a 

confidential investigation or reveal the 

identity of witnesses or confidential 

informants and endanger their lives, 

health, and physical safety. The 

individual could seriously interfere 

with undercover investigative 

techniques and could take appropriate 

steps to evade the investigation or flee 

a specific area. 

(9) From subsections (e)(4)(G), (H) and 

(I) because this system is exempt from 

the access provisions of subsection (d) 

pursuant to subsections (j) and (k) of the 

Privacy Act. 

(10) From subsection (e)(5) because 

the acquisition, collation, and analysis 

of information for law enforcement 

purposes from various agencies does not 

permit a determination in advance or a 

prediction of what information will be 

matched with other information and 

thus whether it is accurate, relevant, 

timely and complete. With the passage 

of time, seemingly irrelevant or 

untimely information may acquire new 

significance as further investigation 

brings new details to light and the 

accuracy of such information can often 

only be determined in a court of law. 

The restrictions imposed by subsection 

(e)(5) would restrict the ability of 

trained investigators, intelligence 

analysts, and government attorneys to 

exercise their judgment in collating and 

analyzing information and would 

impede the development of criminal or 

other intelligence necessary for effective 

law enforcement. 

(11) From subsection (e)(8) because 

the individual notice requirements of 

subsection (e)(8) could present a serious 

impediment to law enforcement by 

revealing investigative techniques, 

procedures, evidence, or interest and 

interfering with the ability to issue 

warrants or subpoenas, and could give 

persons sufficient warning to evade 

investigative efforts. 

(12) From subsections (f) and (g) 

because these subsections are 

inapplicable to the extent that the 

system is exempt from other specific 

subsections of the Privacy Act. 

Dated: August 18, 2009. 

Nancy C. Libin, 

Chief Privacy and Civil Liberties Officer. 

[FR Doc. E9–20364 Filed 8–24–09; 8:45 am] 

BILLING CODE 4410–14–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Office of the Secretary 

42 CFR Part 3 

RIN 0991–AB53 

Patient Safety and Quality 

Improvement: Civil Money Penalty 

Inflation Adjustment 

AGENCY: Office for Civil Rights, Office of 

the Secretary, HHS. 

ACTION: Direct final rule. 

SUMMARY: The Department of Health and 

Human Services amends the Patient 

Safety and Quality Improvement Rule 

by adjusting for inflation the maximum 

civil money penalty amount for 

violations of the confidentiality 

provisions of the Rule. We are amending 

the penalty amount to comply with the 

Federal Civil Penalties Inflation 

Adjustment Act of 1990. We are using 

direct final rulemaking for this action 

because we expect that there will be no 

significant adverse comment on the 

rule. 

DATES: This rule is effective November 

23, 2009 without further action, unless 

significant adverse comment is received 

by September 24, 2009. If significant 

adverse comment is received, OCR will 

publish a timely withdrawal of the 

document in the Federal Register. 

ADDRESSES: Send comments to one of 

the following addresses. Please do not 

submit duplicate comments. We will 

treat a comment directed to either the 

direct final rule or proposed rule 

(discussed in the SUPPLEMENTARY

INFORMATION section) as being directed 

towards both, therefore there is no need 

to submit comments on both 

documents. 

• Federal eRulemaking Portal: You 

may submit electronic comments at 

http://www.regulations.gov. Follow the 

instructions for submitting electronic 

comments. Attachments should be in 

Microsoft Word, WordPerfect, or Excel; 

however, we prefer Microsoft Word. 

• Regular, Express, or Overnight Mail: 

You may mail written comments (one 

original and two copies) to the following 

address only: U.S. Department of Health 

and Human Services, Office for Civil 

Rights, Attention: PSQIA CMP 

Adjustment (RIN 0991–AB53), Hubert 

H. Humphrey Building, Room 509F, 200 

Independence Avenue, SW., 

Washington, DC 20201. Mailed 

comments may be subject to delivery 

delays due to security procedures. 

Please allow sufficient time for mailed 

comments to be timely received in the 

event of delivery delays. 

• Hand Delivery or Courier: If you 

prefer, you may deliver (by hand or 

courier) your written comments (one 

original and two copies) to the following 

address only: Office for Civil Rights, 

Attention: PSQIA CMP Adjustment (RIN 

0991–AB53), Hubert H. Humphrey 

Building, Room 509F, 200 

Independence Avenue, SW., 

Washington, DC 20201. (Because access 

to the interior of the Hubert H. 

Humphrey Building is not readily 

available to persons without federal 

government identification, commenters 

are encouraged to leave their comments 

in the mail drop slots located in the 

main lobby of the building.) 

Inspection of Public Comments: All 

comments received before the close of 

the comment period will be available for 

public inspection, including any 

personally identifiable or confidential 

business information that is included in 

a comment. We will post all comments 

received before the close of the 


srobinson on DSKHWCL6B1PROD with RULES
42778 Federal Register / Vol. 74, No. 163 / Tuesday, August 25, 2009 / Rules and Regulations 

1We note that § 4 of the Inflation Adjustment Act, 

found at 28 U.S.C. 2461 note, excludes a small 

number of statutes, such as the Social Security Act, 

from the requirement for agencies to adjust their 

CMPs for inflation. Because the CMPs for title II, 

subtitle F (Administrative Simplification) of the 

Health Insurance Portability and Accountability Act 

of 1996 (HIPAA) are found at section 1176 of the 

Social Security Act, the Department has not made 

similar inflation adjustments to the HIPAA 

administrative simplification CMPs at 45 CFR 

160.404. 

comment period at http:// 

www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: 

Andra Wicks, 202–205–2292. 

SUPPLEMENTARY INFORMATION: 

I. Use of a Direct Final Rule 

The Department has chosen to issue 

this rule as a direct final rule because 

we do not expect to receive any 

significant adverse comment on the 

rule. A direct final rule is a rule that 

provides an opportunity for comment 

and then automatically becomes 

effective on a later date if no significant 

adverse comments are received. We do 

not anticipate significant adverse 

comments because this rule’s 

amendment is required by the Federal 

Civil Penalties Inflation Adjustment Act 

of 1990 (28 U.S.C. 2461 note, as 

amended by the Debt Collection 

Improvement Act of 1996 (31 U.S.C. 

3701)) (Inflation Adjustment Act), and 

the Department has no discretion in 

how it calculates the adjustment. 

As reflected in the DATES section 

above, for this direct final rule we are 

providing a 30-day comment period, 

and the rule will then become effective 

60 days later if no significant adverse 

comments are received. If we do not 

receive any significant adverse 

comments in response to the direct final 

rule or the proposed rule discussed 

below, this rule will become effective on 

the date set forth in the DATES section. 

If we receive significant adverse 

comments to this direct final rule or the 

proposed rule, we will publish a 

document withdrawing this final rule in 

the Federal Register prior to that date. 

In the proposed rule section of this 

issue of the Federal Register, we are 

concurrently proposing and soliciting 

comments on this rule. If we withdraw 

this direct final rule based on the receipt 

of any significant adverse comments, we 

will publish a final rule based on the 

proposed rule and any comments to the 

proposed or direct final rule. 

The Department will not provide 

additional opportunity for comment. 

II. Background 

The Patient Safety and Quality and 

Improvement Act of 2005 (Patient Safety 

Act), 42 U.S.C. 299b–21 to 299b–26, 

amended Title IX of the Public Health 

Service Act, 42 U.S.C. 299 et seq., the 

authorizing statute for the Agency for 

Healthcare Research and Quality. The 

Patient Safety Act creates a voluntary 

program through which health care 

providers can share information related 

to patient safety events and concerns 

(known as patient safety work product 

(PSWP)) with patient safety 

organizations (PSOs) for the purpose of 

improving patient safety and the quality 

of care nationwide. The Patient Safety 

Act requires the Department of Health 

and Human Services (‘‘HHS’’ or ‘‘the 

Department’’) to maintain a listing of 

PSOs. The Patient Safety Act provides 

that PSWP is both privileged and 

confidential. While participation in the 

patient safety program is voluntary, a 

violation of the Patient Safety Act’s 

confidentiality requirements is subject 

to a civil money penalty (CMP) of up to 

$10,000. 42 U.S.C. 299b–22(f). 

On November 21, 2008, the 

Department promulgated regulations to 

implement the Patient Safety Act. 73 FR 

70732, Nov. 21, 2008, adding 42 CFR 

part 3. The regulations provide for the 

listing and delisting of PSOs, the 

confidentiality and privilege protections 

of PSWP, and procedures for 

enforcement against violations of the 

regulations’ confidentiality 

requirements. In particular, under 

§ 3.404, a person who discloses 

identifiable PSWP in knowing or 

reckless violation of the Patient Safety 

Act and 42 CFR part 3 shall be subject 

to a CMP of not more than $10,000 for 

each act constituting a violation. 

The Agency for Healthcare Research 

and Quality administers the provisions 

of the regulations relating to PSOs. The 

Office for Civil Rights investigates and 

enforces compliance with the 

confidentiality provisions and, if 

warranted, may assess CMPs for 

knowing or reckless violations of 

confidentiality. 

III. The Inflation Adjustment Act 

Congress enacted the Inflation 

Adjustment Act based on its findings 

that the impact of CMPs had been 

reduced by inflation and that reducing 

the impact of CMPs had weakened their 

deterrent effect. Inflation Adjustment 

Act § 2, 28 U.S.C. 2461 note. In general, 

the Inflation Adjustment Act requires 

Federal agencies to issue regulations to 

adjust for inflation each CMP provided 

by law within their jurisdiction. The 

Inflation Adjustment Act applies to civil 

penalties found within the Public 

Health Service Act, such as the Patient 

Safety Act’s CMP provision.1

The Inflation Adjustment Act directs 

agencies to issue regulations to adjust 

CMPs under their authority by October 

23, 1996, and to make additional 

adjustments at least once every four 

years thereafter. Because the Patient 

Safety Act was enacted after October 23, 

1996, we interpret the Inflation 

Adjustment Act as requiring the 

Department to issue a regulation to 

adjust for inflation the Patient Safety 

Act’s CMP amount at least once every 

four years, beginning from the Patient 

Safety Act’s date of enactment, which 

was July 29, 2005. Thus, we are issuing 

this rule four years from the Patient 

Safety Act’s enactment. 

IV. Description of Amendment 

The Inflation Adjustment Act 

provides for the adjustment of a penalty 

amount through a three-step process. 

First, we calculate an increase in the 

penalty amount by a ‘‘cost-of-living 

adjustment.’’ Inflation Adjustment Act 

§ 5(a), 28 U.S.C. 2461 note. The Inflation 

Adjustment Act defines the cost-ofliving adjustment as ‘‘the percentage (if 

any) for each civil monetary penalty by 

which—(1) the Consumer Price Index 

for the month of June of the calendar 

year preceding the adjustment, exceeds 

(2) the Consumer Price Index for the 

month of June of the calendar year in 

which the amount of such civil 

monetary penalty was last set or 

adjusted pursuant to law.’’ Inflation 

Adjustment Act § 5(b), 28 U.S.C. 2461 

note. Second, we round the adjustment 

amount pursuant to the methodology set 

forth in section 5(a) of the Inflation 

Adjustment Act, which rounds the 

increase based on the size of the 

underlying penalty, as follows: 

Any increase determined under this 

subsection shall be rounded to the nearest— 

(1) Multiple of $10 in the case of penalties 

less than or equal to $100; 

(2) Multiple of $100 in the case of penalties 

greater than $100 but less than or equal to 

$1,000; 

(3) Multiple of $1,000 in the case of 

penalties greater than $1,000 but less than or 

equal to $10,000; 

(4) Multiple of $5,000 in the case of 

penalties greater than $10,000 but less than 

or equal to $100,000; 

(5) Multiple of $10,000 in the case of 

penalties greater than $100,000 but less than 

or equal to $200,000; and 

(6) Multiple of $25,000 in the case of 

penalties greater than $200,000. 

Third, pursuant to the Debt Collection 

Improvement Act of 1996 § 31001(s)(2)’s 

amendment to the Inflation Adjustment 

Act, we must limit the first adjustment 

of a CMP to ten percent of the penalty 

amount. 

With respect to step 1 of the 

adjustment, the Consumer Price Index 


srobinson on DSKHWCL6B1PROD with RULES
Federal Register / Vol. 74, No. 163 / Tuesday, August 25, 2009 / Rules and Regulations 42779 

2The Inflation Adjustment Act defines 

‘‘Consumer Price Index’’ as ‘‘the Consumer Price 

Index for all-urban consumers published by the 

Department of Labor.’’ Historic data on the 

Consumer Price Index for all-urban consumers, 

including the data relied upon in this rulemaking, 

can be found at ftp://ftp.bls.gov/pub/ 

special.requests/cpi/cpiai.txt. 

3According to the U.S. Department of Commerce, 

Bureau of Economic Analysis, the implicit price 

deflator for gross domestic product was indexed at 

92.106 in 1995 (the year of the Unfunded Mandates 

Reform Act) and 122.422 in 2008. See http:// 

www.bea.gov/national/nipaweb/ (Table 1.1.9). 

(CPI) for June of 2008 (the calendar year 

preceding this adjustment) was 

218.815.2 The CPI for June of 2005 (the 

calendar year in which the Patient 

Safety Act CMP was last set) was 194.5. 

The percent change in these CPIs is an 

increase of 12.5 percent. This leads to 

an unrounded increase in the Patient 

Safety Act’s CMP of $1,250. 

Under step 2, we round the amount of 

the increase ($1,250) based on the size 

of the penalty ($10,000). Because the 

penalty of $10,000 is ‘‘greater than 

$1,000 but less than or equal to 

$10,000,’’ we round the increase to the 

nearest multiple of $1,000. This leads to 

a rounded increase of $1,000, for an 

increased penalty of $11,000. 

Step 3 requires that the first 

adjustment to a civil penalty be limited 

to 10 percent of the penalty amount. 

This is the first adjustment to the 

Patient Safety Act’s CMP. Therefore, 

this 10 percent cap is applicable. 

Pursuant to this cap, the adjusted 

penalty cannot exceed $11,000. Because 

the adjusted penalty is $11,000, it does 

not exceed the cap. Accordingly, the 

Patient Safety Act’s revised maximum 

CMP amount, after adjusting for 

inflation pursuant to the Inflation 

Adjustment Act, is $11,000. 

Based on the above, we are amending 

42 CFR 3.404(b) to provide that the 

Secretary may impose a CMP of not 

more than $11,000, rather than the 

current limit of $10,000, for a violation 

of the Patient Safety Act’s 

confidentiality requirements. 

V. Environmental Impact 

We have determined under 21 CFR 

25.30(a) and (h) that this action is of a 

type that does not individually or 

cumulatively have a significant effect on 

the human environment. Therefore, 

neither an environmental assessment 

nor an environmental impact statement 

is required. 

VI. Paperwork Reduction Act 1995 

We have concluded that the CMP 

adjustment in this direct final rule is not 

subject to review by the Office of 

Management and Budget under the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3501–3520) because it does not 

constitute a ‘‘collection of information.’’ 

That is, the adjustment does not require 

disclosure of any information to the 

Department, third parties, or the public. 

VII. Federalism 

The Department has analyzed this 

direct final rule in accordance with the 

principles set forth in Executive Order 

13132. We have determined that the 

rule does not contain policies that have 

substantial direct effects on the States, 

on the relationship between the 

National Government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of government. Accordingly, we 

have concluded that the rule does not 

contain policies that have Federalism 

implications as defined in the Executive 

Order and, consequently, a Federalism 

summary impact statement is not 

required. 

VIII. Analysis of Impacts 

The Department has examined the 

impacts of the direct final rule under 

Executive Order 12866, the Regulatory 

Flexibility Act (5 U.S.C. 601–612), and 

the Unfunded Mandates Reform Act of 

1995 (Pub. L. 104–4). 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 net benefits 

(including potential economic, 

environmental, public health and safety, 

and other advantages; distributive 

impacts; and equity). The Department 

believes that this direct final rule is not 

a significant regulatory action under the 

Executive Order. 

The Regulatory Flexibility Act 

requires agencies to analyze regulatory 

options that would minimize any 

significant impact of a rule on small 

entities. Because this direct final rule 

simply adjusts the maximum amount of 

a CMP, and because the adjustment is 

required by the Inflation Adjustment 

Act, the Department certifies that the 

rule will not have a significant 

economic impact on a substantial 

number of small entities. 

Section 202(a) of the Unfunded 

Mandates Reform Act of 1995 requires 

that agencies prepare a written 

statement, which includes an 

assessment of anticipated costs and 

benefits, before proposing ‘‘any rule that 

includes any Federal mandate that may 

result in the expenditure by State, local, 

and tribal governments, in the aggregate, 

or by the private sector, of $100,000,000 

or more (adjusted annually for inflation) 

in any one year.’’ The current threshold 

after adjustment for inflation is $133 

million, using the most current (2008) 

Implicit Price Deflator for the Gross 

Domestic Product.3 The Department 

does not expect this direct final rule to 

result in any 1-year expenditure that 

would meet or exceed this amount. 

List of Subjects in 42 CFR Part 3 

Administrative practice and 

procedure, Civil money penalty, 

Confidentiality, Conflict of interests, 

Courts, Freedom of information, Health, 

Health care, Health facilities, Health 

insurance, Health professions, Health 

records, Hospitals, Investigations, Law 

enforcement, Medical research, 

Organization and functions, Patient, 

Patient safety, Privacy, Privilege, Public 

health, Reporting and recordkeeping 

requirements, Safety, State and local 

governments, Technical assistance. 

■ For the reasons stated in the preamble, 

amend part 3 of title 42 of the Code of 

Federal Regulations as follows: 

PART 3—PATIENT SAFETY 

ORGANIZATIONS AND PATIENT 

SAFETY WORK PRODUCT 

■ 1. The authority citation for part 3 

continues to read: 

Authority: 42 U.S.C. 216, 299b–21 through 

299b–26; 42 U.S.C. 299c–6. 

■ 2. Amend § 3.404 by revising 

paragraph (b) to read as follows: 

§ 3.404 Amount of a civil money penalty. 

* * * * * 

(b) The Secretary may impose a civil 

money penalty in the amount of not 

more than $11,000. 

Dated: August 18, 2009. 

Kathleen Sebelius, 

Secretary. 

[FR Doc. E9–20419 Filed 8–24–09; 8:45 am] 

BILLING CODE 4160–90–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 202, 209, 214, 227, 237, 

and 252 

Defense Federal Acquisition 

Regulation Supplement; Technical 

Amendments 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD is making technical 

amendments to the Defense Federal 


srobinson on DSKHWCL6B1PROD with RULES