[Federal Register Volume 65, Number 108 (Monday, June 5, 2000)]
[Rules and Regulations]
[Pages 35583-35584]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-13994]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of the Secretary

Office of Inspector General

42 CFR Parts 1001, 1003, 1005 and 1006

RIN 0991-AA90


Health Care Programs: Fraud and Abuse; Revised OIG Civil Money 
Penalties Resulting From Public Law 104-191

AGENCY: Office of Inspector General (OIG), HHS.

ACTION: Final rule; correction amendments.

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SUMMARY: This document contains several corrections to the final 
regulations which were published in the Federal Register on Wednesday, 
April 26, 2000 (65 FR 24400). These regulations revised the OIG's civil 
money penalty (CMP) authorities in conjunction with new or revised 
provisions set forth in the Health Insurance Portability and 
Accountability Act of 1996, and codified a number of technical 
corrections to the regulations governing the OIG's sanction 
authorities. Inadvertent errors appeared in the text of the regulations 
concerning the knowledge standard in Sec. 1003.102 (a)(6), and in 
Sec. 1005.7 with respect to discovery. In addition, an incorrect cross-
reference was cited in the definition for the term ``preventive care,'' 
as set forth in part 1003. As a result, we are making corrections to 42 
CFR 1003.101, 1003.102(a) and 1005.7 to assure the technical 
correctness of these regulations.

EFFECTIVE DATE: June 5, 2000.

FOR FURTHER INFORMATION CONTACT: Joel Schaer, (202) 619-0089, OIG 
Regulations Officer.

SUPPLEMENTARY INFORMATION: The HHS Office of Inspector General (OIG) 
issued final regulations on April 26, 2000 (65 FR 24400) that revised 
the OIG's CMP authorities, in conjunction with new and revised 
provisions set forth in the Health Insurance Portability and 
Accountability Act of 1996, Public Law 104-191. Among other provisions, 
this final rulemaking codified new CMPs for excluded individuals 
retaining ownership or control interest in an entity; upcoding and 
claims for medically unnecessary services; offering inducements to 
beneficiaries; and false certification of eligibility for home health 
services. The rule also codified a number of technical corrections to 
the regulations governing OIG's sanction authorities. In that final 
rule, several inadvertent errors appeared in the regulations text and 
are now being corrected.

CMP Knowledge Standard--Sec. 1003.102(a)(6)

    In the preamble discussion regarding revisions to 
Sec. 1003.102(a)(6), addressing the submission of claims for services 
that are medically unnecessary, we indicated that this paragraph was 
being amended to include the ``knows or should know'' standard found in 
the statute and in the revision to Sec. 1003.102(a)(1) to ensure that 
it is not the OIG's intent to subject providers to penalties for 
legitimate disagreements over the medical necessity of items and 
services or for honest mistakes or errors (65 FR 24403). As indicated 
in that discussion, while the knowledge standard in the statute 
requires that providers assume responsibility for appropriate billing 
of their services, the OIG intends to impose CMPs only after 
establishing that a provider knew that a billed item or service was not 
medically necessary, or that he or she deliberately ignored or 
recklessly disregarded such information. Accordingly, we indicated that 
we were revising Sec. 1003.102(a)(6) by adding the words ``knows or 
should know'' to have the paragraph read as: ``An item or service that 
a person knows or should know is medically unnecessary, and which is 
part of a pattern of such claims.'' (emphasis added). This language was 
inadvertently omitted from the revised regulations text. In order to be 
consistent with the preamble discussion, we are correcting the omission 
that occurred in Sec. 1003.102(a)(6).

Discovery--Sec. 1005.7

    In summarizing the provisions of the final rule, we indicated that 
we were amending Sec. 1005.7 to provide for motions to compel discovery 
once a request for production of documents has been received. The 
preamble stated that any objections to a request for the production of 
documents will have to be filed with the opposing party within 15 days 
of receiving the discovery request, and that the party seeking the 
production of documents may then file a motion to compel discovery 
within 15 days, unless a lengthier time frame is set by the 
administrative law judge (ALJ) (65 FR 24412-13). This discretion 
afforded to the ALJ to grant an extension was inadvertently omitted 
from the regulations text in Sec. 1005.7(e). We are correcting this 
omission by redesignating existing paragraph (e)(3) in this section to 
read as (e)(4) and by adding a new paragraph (e)(3) to address the 
ALJ's discretion in extending the appropriate time frames

Preventive Care--Sec. 1003.101

    In the definition for ``preventive care'' appearing in 
Sec. 1003.101, the definition incorrectly cites Sec. 1003.102(b)(13) as 
the applicable cross-reference. We are amending this definition to cite 
the correct cross-reference, which is to the term ``remuneration'' that 
is set forth in this same section.

Amendatory Language to Sec. 1003.103(a) Introductory Text and 
Sec. 1003.105(a)(1)(i)

    We are amending the language in the introductory text for 
Sec. 1003.103(a) and

[[Page 35584]]

in paragraph (a)(1)(i) for Sec. 1003.105 to make the references 
consistent with the those provisions added in earlier final rulemaking 
published on April 7, 2000 (65 FR 18434), which addressed OIG CMP 
authority for unbundling hospital outpatient services.

List of Subjects

42 CFR Part 1001

    Administrative practice and procedure, Fraud, Health facilities, 
Health professions, Medicaid, Medicare.

42 CFR Part 1003

    Administrative practice and procedure, Fraud, Grant programs--
health, Health facilities, Health professions, Maternal and child 
health, Medicaid, Medicare, Penalties.

42 CFR Part 1005

    Administrative practice and procedure, Fraud, Penalties.

42 CFR Part 1006

    Administrative practice and procedure, Fraud, Investigations, 
Penalties.

    Accordingly, 42 CFR parts 1003 and 1005 are corrected by making the 
following correcting amendments:

PART 1003--CIVIL MONEY PENALTIES, ASSESSMENTS AND EXCLUSIONS

    1. The authority citation for part 1003 continues to read as 
follows:

    Authority: 42 U.S.C. 1302, 1320-7, 1320a-7a, 1320a-7e,1320b-10, 
1395u(j), 1395u(k), 1395cc(g), 1395dd(d)(1), 1395mm, 1395nn(g), 
1395ss(d), 1396b(m), 11131(c) and 11137(b)(2).


    2. Section 1003.101 is amended by republishing the introductory 
text, and by revising the introductory paragraph for the definition of 
the term Preventive care to read as follows:


Sec. 1003.101  Definitions.

    For purposes of this part:
* * * * *
    Preventive care, for purposes of the definition of the term 
Remuneration as set forth in this section and the preventive care 
exception to section 231(h) of HIPAA, means any service that--
* * * * *

    3. Section 1003.102 is amended by republishing the introductory 
text of paragraph (a) and by revising paragraph (a)(6) to read as 
follows:


Sec. 1003.102  Basis for civil money penalties and assessments.

    (a) The OIG may impose a penalty and assessment against any person 
whom it determines in accordance with this part has knowingly 
presented, or caused to be presented, a claim which is for--
* * * * *
    (6) An item or service that a person knows or should know is 
medically unnecessary, and which is part of a pattern of such claims.
* * * * *

    4. Section 1003.103 is amended by revising the introductory text of 
paragraph (a) to read as follows:


Sec. 1003.103  Amount of penalty.

    (a) Except as provided in paragraphs (b) through (k) of this 
section, the OIG may impose a penalty of not more than--
* * * * *

    5. Section 1003.105 is amended by revising paragraph (a)(1)(i) to 
read as follows:


Sec. 1003.105  Exclusion from participation in Medicare, Medicaid and 
all Federal health care programs.

    (a)(1) * * *
    (i) Is subject to a penalty or assessment under Sec. 1003.102(a), 
(b)(1), (b)(4), (b)(12), (b)(13) or (b)(15); or
* * * * *

PART 1005--APPEALS OF EXCLUSIONS, CIVIL MONEY PENALTIES AND 
ASSESSMENTS

    1. The authority citation for part 1005 continues to read as 
follows:

    Authority: 42 U.S.C. 405(a), 405(b), 1302, 1320a-7, 1320a-7a and 
1320c-5.


    2. Section 1005.7 is amended by redesignating existing paragraph 
(e)(3) as (e)(4) and by adding a new paragraph (e)(3) to read as 
follows:


Sec. 1005.7  Discovery.

* * * * *
    (e) * * *
    (3) The ALJ may extend any of the time frames set forth in 
paragraph (e)(1) of this section.

    Dated: May 26, 2000.
Michael Carelton,
Deputy Director for Information Resource Management.
[FR Doc. 00-13994 Filed 6-2-00; 8:45 am]
BILLING CODE 4152-01-P