[Federal Register Volume 62, Number 33 (Wednesday, February 19, 1997)]
[Rules and Regulations]
[Pages 7350-7360]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-4086]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of Inspector General

42 CFR Part 1008

RIN 0991-AA85


Medicare and State Health Care Programs: Fraud and Abuse; 
Issuance of Advisory Opinions by the OIG

AGENCY: Office of Inspector General (OIG), HHS

ACTION: Interim final rule with comment period.

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SUMMARY: In accordance with section 205 of the Health Insurance 
Portability and Accountability Act of 1996, this final rule establishes 
a new part 1008 in 42 CFR chapter V to address the new OIG advisory 
opinion process. Specifically, these regulations set forth the specific 
procedures by which the Office of Inspector General, in consultation 
with the Department of Justice, will issue advisory opinions to outside 
parties regarding the interpretation and applicability of certain 
statutes relating to the Medicare and State health care programs.

DATES: Effective Date: This rule is effective on February 21, 1997.
    Comment Period: To assure consideration, public comments must be 
delivered to the first address provided under ADDRESSES by no later 
than 5 p.m. on April 21, 1997. Comments will be available for public 
inspection March 5, 1997 at the second address provided under ADDRESSES 
on Monday through Friday of each week from 8:00 a.m. to 4:30 p.m., 
(202) 619-0089.

ADDRESSES: Please mail or deliver your written comments to the 
following address: Office of Inspector General, Department of Health 
and Human Services, Attention: OIG-10-IFC, Room 5246, Cohen Building, 
330 Independence Avenue, SW., Washington, DC 20201.
    Because of staffing and resource limitations, we cannot accept 
comments by facsimile (FAX) transmission. In commenting, please refer 
to file code OIG-10-IFC.

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

SUPPLEMENTARY INFORMATION:

I. Background

A. The Medicare Anti-Kickback Statute

    Section 1128B(b) of the Social Security Act (42 U.S.C. 1320a-7b(b)) 
provides criminal penalties for individuals or entities that knowingly 
and willfully offer, pay, solicit or receive remuneration in order to 
induce business reimbursed under the Medicare or State health care 
programs. The offense is classified as a felony, and is punishable by 
fines of up to $25,000 and imprisonment for up to 5 years.
    This provision is quite broad. The types of remuneration covered 
specifically include kickbacks, bribes, and rebates, whether made 
directly or indirectly, overtly or covertly, or in cash or in kind. In 
addition, prohibited conduct includes not only remuneration intended to 
induce referrals of patients, but remuneration intended to induce the 
purchasing, leasing, ordering, or arranging for any good, facility, 
service, or item paid for by Medicare or State health care programs.
    Since the statute on its face is so broad, concern has been 
expressed for many years that some relatively innocuous commercial 
arrangements are technically covered by the statute and are, therefore, 
subject to criminal prosecution.

B. Safe Harbors and Fraud Alerts

    As a response to the above concern, the Medicare and Medicaid 
Patient and Program Protection Act of 1987, Public Law 100-93, 
specifically required the development and promulgation of regulations, 
the so-called ``safe harbor'' provisions, designed to specify various 
payment and business practices which, although potentially capable of 
inducing referrals of business under the Medicare and State health care 
programs, would not be treated as criminal offenses under the anti-
kickback statute (section 1128B(b) of the Social Security Act; 42 
U.S.C. 1320b(b)) and would not serve as a basis for a program exclusion 
under section 1128(b)(7) of the Social Security Act; 42 U.S.C. 1320a-
7(b)(7).
    The OIG safe harbor provisions have been developed to permit 
individuals and entities to freely engage in business practices and 
arrangements that encourage competition, innovation and economy. Health 
care providers and others may voluntarily seek to comply with these 
provisions so that they have the assurance that their business 
practices are not subject to any enforcement action under the anti-
kickback statute or program exclusion authority. The 13 final safe 
harbor provisions, which specify practices which are expressly made 
legal, are codified at 42 CFR 1001.952.
    In addition, the OIG has also periodically issued Special Fraud 
Alerts to give continuing guidance to health care providers with 
respect to practices the OIG regards as unlawful. Eight individual 
Special Fraud Alerts were published in the Federal Register on December 
19, 1994 (59 FR 65372), August 10, 1995 (60 FR 40847) and June 17, 1996 
(61 FR 30623). Thus, for many years the OIG has been publishing 
substantial guidance indicating what practices are lawful and what 
practices the OIG considers unlawful under the anti-kickback statute.

C. Advisory Opinions: Section 205 of Public Law 104-191

    The Health Insurance Portability and Accountability Act of 1996, 
Public Law 104-191, effective August 21, 1996, now requires the 
Department to provide additional formal guidance regarding the 
application of the anti-kickback statute and the safe harbor 
provisions, as well as other OIG health care fraud and abuse sanctions. 
Among the provisions set forth in section 205 of Public Law 104-191 is 
the requirement that the Department, in consultation with the 
Department of Justice (DoJ), issue written advisory opinions to 
particular parties with regard to: (1) What constitutes prohibited 
remuneration under the anti-kickback statute; (2) whether an 
arrangement or proposed arrangement satisfies the criteria in section 
1128B(b)(3) of the Social Security Act, or established by regulation, 
for activities which do not result in prohibited remuneration; (3) what 
constitutes an inducement to

[[Page 7351]]

reduce or limit services under section 1128A(b) of the Act to Medicare 
or Medicaid program beneficiaries <SUP>1; and (4) whether an activity 
or proposed activity constitutes grounds for the imposition of civil or 
criminal sanctions under sections 1128, 1128A or 1128B of the Act. 
Thus, advisory opinions will be issued with regard to the provisions 
authorizing the Department to exclude individuals and entities from 
participation in Medicare and the State health care programs. Section 
1128 of the Act authorizes exclusion in a wide variety of 
circumstances, for example, conviction of health care related offenses, 
State licensure action, and submission of claims in excess of usual 
charges or for services which fail to meet professionally recognized 
standards of health care. Similarly, the civil money penalty provisions 
of section 1128A of the Act authorize penalties and exclusion for a 
variety of acts, for example, presentation of a Medicare or Medicaid 
claim that is false or fraudulent, and hospital payments to physicians 
to induce the physician to reduce or limit care to any Medicare or 
Medicaid beneficiary under the physician's direct care. The Department 
will also provide advisory opinions regarding the criminal provisions 
of section 1128B of the Act which includes the anti-kickback statute.
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    \1\  Public Law 104-191 cited this provision as section 1128B(b) 
of the Act. We believe the correct reference is section 1128A(b).
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    (On December 31, 1996, the OIG, in accordance with section 205 of 
HIPAA, published a notice in the Federal Register (61 FR 69060) that 
solicited proposals and recommendations for developing new and 
modifying existing safe harbor provisions under the Medicare and State 
health care programs' anti-kickback statute, as well as for developing 
new OIG Special Fraud Alerts. We specifically indicated in that notice 
our intention of publishing separate rulemaking addressing the 
procedures and process for accepting and issuing advisory opinions and 
soliciting public comments and recommendations in this area.)
    In accordance with the statute, requests for advisory opinions must 
be accepted for agency review on or after February 21, 1997. While the 
President's fiscal year 1998 budget submission proposes a repeal of 
section 205, the OIG and the Department are proceeding to implement 
these statutory obligations in accordance with existing law.

D. Waiver of Proposed Rulemaking

    In developing and publishing these regulations as an interim final 
rule, the Secretary has determined that for good cause it is both 
impracticable and contrary to public interest to first issue these 
regulations in proposed rulemaking form. We believe that the statutory 
requirement that final regulations addressing the advisory opinion 
process be in effect no later than February 17, 1997, makes it 
impracticable to develop such procedures with the necessary inter-
governmental collaboration and initial public comment usually required 
in such rulemaking by the statutory deadline.
    In addition, we believe that it is imperative that we have in place 
specific procedures by February 21, 1997, to address the receipt and 
processing of advisory opinion requests. It would be against the public 
interest to proceed to receive and process advisory opinions without 
setting forth procedural guidance. However, we believe that the 60-day 
period for public comments being set forth in this interim final rule 
will serve to protect the public's interest in this rulemaking process 
by allowing for an opportunity for additional input and 
recommendations, without unduly delaying the intent of these 
regulations. We will respond to all appropriate and relevant public 
comments received during the 60-day comment period, and make any 
necessary revisions to these regulations through a revised final rule 
to be issued, if possible, within 9 months of the close of the comment 
period. Accordingly, we believe this interim final rule approach will 
achieve the dual purpose of issuing a rulemaking consistent with 
statutory time frames while soliciting and benefiting from the public 
comment process.

II. Provisions of the Interim Final Rule

Anti-kickback Statute Advisory Opinions: ``Case specific'' Safe Harbors

    These interim final regulations establish a new 42 CFR part 1008 
that is designed to establish procedures for advisory opinions that 
will provide the public with meaningful advice regarding the anti-
kickback and other OIG sanction statutes regarding specific factual 
situations. With respect to the anti-kickback statute, these procedures 
contemplate particularized or ``case specific'' safe harbors. In 
establishing the regulatory safe harbors inSec. 1001.952, the OIG first 
considered the full scope of factual circumstances potentially subject 
to the anti-kickback statute, that is, generally all types of 
arrangements that could potentially involve an intentional payment of 
remuneration to induce the referral of Medicare business. Next, we 
proceeded to ``limit the reach of the statute somewhat by permitting 
certain non-abusive arrangements, while encouraging beneficial or 
innocuous arrangements.'' (56 FR 35952, July 29, 1991). Thus we sought 
to specify particular safe harbors that, despite the potentially 
unlawful intent, would protect non-abusive relationships. To accomplish 
this objective, each safe harbor contains limitations and controls that 
provide adequate assurance that the programs will not be abused. The 
actual intent of the parties is entirely irrelevant to this analysis. 
The OIG has designed 13 final safe harbors that describe practices that 
are sheltered from liability, even though unlawful intent may be 
present, and is continuing to finalize 8 additional safe harbor 
provisions.
    The OIG views the advisory opinion process with a means of analysis 
similar to the safe harbor provisions, with one major exception. Where 
the safe harbors describe generalized, hypothetical arrangements which 
are protected, we view an advisory opinion as a means of relating the 
anti-kickback statute to the particular facts of a specific 
arrangement. There are likely to be factors that make some specific 
arrangements appropriate for a favorable advisory opinion, even in 
subject matter areas where a generalized safe harbor may be 
impractical. Thus, we believe that particularized or ``case specific'' 
safe harbor treatment is appropriate where the specific arrangement 
contains limitations, requirements or controls that give adequate 
assurance that Federal health care programs can not be abused.
    These regulations are designed to avoid the potential pitfalls of 
advisory opinions on intent-based statutes, such as the anti-kickback 
statute. First, it is not practical for the agency to make an 
independent determination of the subjective intent of the parties based 
only upon written materials submitted by the requestor. While 
requestors are required to submit a complete written description of the 
transaction, along with copies of the documents that establish the 
arrangements in question, these materials do not afford a satisfactory 
basis upon which to make a reliable determination of subjective intent. 
In anti-kickback cases, the intent issue is whether one purpose of the 
remuneration in question is intended to induce the referral of Federal 
program business. In anti-kickback cases under investigation, the 
determination of this

[[Page 7352]]

issue requires substantial independent investigation of all facts and 
circumstances surrounding the transaction, usually including extensive 
interviews. It is most unlikely that written materials prepared by the 
requestor could encompass all the information necessary to enable the 
OIG to make a reliable determination of the subjective intent of the 
parties.
    The second potential pitfall is that advisory opinions are capable 
of being misused by persons not a party to the transaction in question 
in order to inappropriately escape liability. While the safe harbors 
are intended to create exemptions that apply generally, advisory 
opinions are intended to address the facts of a particular arrangement. 
A third party may implement an arrangement that appears similar to the 
arrangement described in the advisory opinion, but the third party may 
introduce additional factors that may make a difference in the outcome 
of an advisory opinion. Thus, advisory opinions are binding upon and 
may legally be relied upon only by the requestor(s).
    We believe that these regulations provide for meaningful guidance 
to the public on the statutes for which advisory opinions are 
authorized, while avoiding the potential pitfalls described above.
    As set forth, these interim final regulations have been developed 
primarily to address: (1) The procedures to be followed by a party 
applying for advisory opinions; (2) the procedures to be followed by 
the OIG in responding to these requests; (3) the time frames under 
which the OIG will receive and respond to requests for advisory 
opinions; (4) the type and amount of fees to be charged to the party 
requesting an advisory opinion; and (5) the manner in which the general 
public will be informed of the issuance of any advisory opinions by the 
OIG.
    These regulations do not address the substance or the content of 
advisory opinions by the OIG.

Responsibilities of Outside Parties Seeking Advisory Opinions

    Any individual or entity may submit a request for an advisory 
opinion. However, since we anticipate that most requests will apply to 
health care business arrangements, for purposes of this discussion, we 
will generally use the term ``arrangement'' to refer to the factual 
circumstances under which an advisory opinion is requested, even though 
we realize that some requests will involve facts that are not related 
to a business arrangement.
    As indicated above, the advisory opinion process is designed to 
provide authoritative guidance to participants in particular 
arrangements. Therefore, the regulations indicate that the arrangement 
in question must either be in existence at the time of the request for 
an advisory opinion, or with respect to prospective arrangements, there 
must be a good faith intention to enter into the described arrangement 
in the near future. (With respect to prospective conduct, we are 
stating that the requestor can declare the intention to enter into the 
arrangement contingent on the receipt of a favorable advisory opinion.)
    We do not believe that it is appropriate to provide advisory 
opinions to persons not involved in the arrangement in question. For 
example, we believe that a description of a competitor's arrangement is 
not the proper subject of an OIG advisory opinion since the 
participants to the particular transaction would not be involved in the 
request. A party to an actual arrangement--either existing or about to 
be entered into--is in a position to provide full and complete 
information regarding the facts in question. By contrast, third parties 
are not in a position to provide a reliable statement as to the facts 
of a particular arrangement in which the third party is not a 
participant. In addition, it is unclear who would be bound by an 
advisory opinion on an arrangement not involving the requestor.
    Similarly, we do not believe it is appropriate to provide advisory 
opinions on hypothetical or generalized arrangements for several 
reasons. First, the anti-kickback statute and the other OIG sanction 
statutes impose liability with respect to acts by specific people in 
particular factual circumstances, i.e., the context in which 
prosecutive decisions are made. Anti-kickback cases are almost never 
alike in all material respects. In addition, especially with intent-
based statutes like the anti-kickback statute, it is often not possible 
to determine that a particular general practice is invariably good or 
bad. An arrangement may be legal under the anti-kickback statute with 
respect to one party, but not with respect to a second party. Such 
differing results can be a function of the different intentions of the 
two parties, or a function of the introduction by a party of additional 
factors that would make a material difference in the resulting opinion. 
We believe it would not be possible for an advisory opinion reliably to 
identify all the possible hypothetical factors that might lead to 
different results.
    Moreover, the OIG already has in place a process for offering 
guidance on the application of the OIG's legal authorities to 
hypothetical or generalized factual circumstances--the safe harbor 
provisions and Special Fraud Alerts. As indicated above, the OIG has 
promulgated 13 final safe harbor provisions in Sec. 1001.952, and has 
proposed several others specifying generalized payment practices that 
will not be subject to sanction under the Medicare and Medicaid anti-
kickback statute. Members of the public may also now under section 
1128D(a) of the Act submit proposals for additional safe harbor 
regulations to the OIG. Further, in accordance with section 1128D(c) of 
the Act, if a member of the public is aware of a practice that may be 
suspect or of particular concern under Medicare or a State health care 
program, they may request the OIG to issue a Special Fraud Alert 
regarding the practice.
    Requestors who are not individuals are required to disclose certain 
ownership and control information, so that the appropriate checks can 
be made to ensure that the matter which is the subject of the advisory 
opinion request is not under current investigation.

Initiating the Process for an Advisory Opinion

    To initiate the advisory opinion process, we are indicating in part 
1008 that the requestor must submit a written request for an advisory 
opinion. The request must clearly and thoroughly present a complete 
description of the facts for which an advisory opinion is being 
requested. To the extent that the subject matter of the request is the 
requestor's potential liability under one sanction authority, we 
believe the request should provide a complete description of the facts 
addressing the elements of that authority. Under these interim final 
regulations, if the request asks the OIG to advise on whether an 
arrangement is subject to sanction under more than one legal authority, 
we believe the submission should include a complete description of the 
facts regarding the different sanction authorities in those statutes. 
To the extent that the necessary information is provided in a clear and 
orderly manner, the OIG will be better able to process the request.
    The regulations are requiring any submission to include copies of 
all relevant documents, such as contracts, leases, employment 
agreements and court documents, as well as descriptions of any other 
understandings that may affect the documents. In addition, the 
submission should include a narrative description of the arrangement. 
As

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indicated in Sec. 1008.36, in making the request, the identities 
(including names and addresses) of the requestor and all other actual 
and potential parties, to the extent known to the requestor to the 
arrangement that is the subject of the request to the advisory opinion 
must be included. In addition, the requestor must identify a designated 
contact person who will be available to communicate with the OIG.
    We are requesting comments on the certification process being 
adopted. Under these regulations at this point we are requiring two 
certifications to be made in a request for an advisory opinion. The 
certifications must be signed by the individual (if an individual 
requestor), the Chief Executive Officer, or comparable officer of the 
company (if a corporate requestor), or the managing partner (if a 
partnership is the requestor). The responsible individual must certify 
that all of the information provided is true and correct, and 
constitutes a complete description of the facts regarding which an 
advisory opinion is sought, to the best of the knowledge of the 
requestor. Where the request relates to prospective conduct, the 
regulations state that the request must also include a certification 
that the requestor intends in good faith to enter into the arrangement 
described in the request. This certification may be made contingent 
upon receipt of a favorable advisory opinion.
    Under these interim final regulations, while all submissions should 
include the above information, because of the wide variety of 
activities upon which the OIG must issue advisory opinions, we cannot 
detail at this point all of the information a requestor must provide. 
We are requesting public comment and input on the type of information 
to be provided by the requesting party and will address this point 
further in any revised final rulemaking. In the interim, prior to 
submitting a request for an advisory opinion, the requestor is advised 
to contact the OIG to inquire about the information needed by the OIG 
to process a request of the type the requestor intends to submit. 
Inquiries should be made in writing and sent to the Office of Inspector 
General, Office of Counsel to the Inspector General, Industry Guidance 
Branch, Room 5246 Cohen Building, 330 Independence Avenue, S.W., 
Washington, D.C. 20201. (Any changes to this address regarding 
inquiries will be posted on the OIG home page at <a href="http://www.sba.gov/
ignet/internal/hhs/hhs.html">http://www.sba.gov/
ignet/internal/hhs/hhs.html</a>.) The OIG may, depending on the subject 
matter of the inquiry, provide the requestor with preliminary questions 
designated to elicit the factual information necessary to facilitate an 
OIG response to the request. These questions should be (but are not 
required to be) answered in the request for an advisory opinion.
    If the information needed by the OIG is in the preliminary 
submission, we will be better able to render a prompt, concise and 
appropriate advisory opinion. We welcome comments on this approach.

Fees Charged to Requesting Parties

    Section 1128D(b)(5)(B)(ii) of the Act requires that requestors be 
charged a fee equal to the costs incurred by the Department in 
responding to the request. The fee must be paid into the general fund 
of the U.S. Treasury.
    Section 1008.31 of these regulations indicates that the actual 
costs of responding to requests for advisory opinions will factor in 
the salary, benefits and overhead costs of attorneys and others who 
will work on analyzing requests and writing advisory opinions from 
requesting parties. In light of the breadth of subject matter and 
possible range of complexities for advisory opinion requests, we do not 
believe it is possible to calculate or accurately estimate the actual 
cost of providing an advisory opinion in advance. Indeed, we believe 
that the statute requires us to calculate the actual costs incurred 
during the processing of a specific request and charge the requestor 
for that amount. As set forth in these regulations, at the conclusion 
of the advisory opinion process, when either the opinion has been 
issued or the request has been withdrawn, the requestor is responsible 
for paying the U.S. Treasury an amount equal to the costs incurred by 
the Government in responding to the request.
    Although we cannot reliably project the processing costs in 
advance, we can make broad estimates that may be of use to prospective 
requestors. We estimate that the actual cost of processing requests, 
including salaries, benefits and overhead, will be near $100 per hour. 
We must include the time of staff attorneys, supervisors and support 
staff, as well as others who are consulted on various issues. The 
processing time will vary according to the complexity of the request 
and the quality of the submission. Simple requests, for example, 
regarding whether a certain court action is a conviction for the 
purposes of exclusion in accordance with section 1128 of the Act may 
take approximately 3 hours to analyze and produce a written opinion. On 
the other hand, requests involving the application of the anti-kickback 
statute to large, multiple party, intricate business deals may take in 
excess of 40 hours or more to fully analyze and produce a written 
advisory opinion.
    We believe that it is reasonable to expect that requests for an 
advisory opinion will cost at least $250 in initial processing. Every 
request for an advisory opinion will take time to read and analyze for 
the OIG to ensure that it has an accurate understanding of all material 
facts submitted. Following that initial analysis, the OIG is required 
to consult with the DoJ and write the actual advisory opinion. By its 
very nature, most of this work will need to be done by the OIG staff 
attorneys. Accordingly, the regulations are providing for a non-
refundable payment of $250 that is to accompany the request for an 
advisory opinion. Once we have gained experience in the time and staff 
resources involved in this process, a clearer estimate may need to be 
made and a re-calculation set forth.
    Because we do not believe that we can accurately estimate our costs 
in advance for a particular request, we are attempting to accommodate 
requestors who may want to limit the costs of receiving an advisory 
opinion. The regulations provide that a requestor may designate a 
``triggering dollar amount'' in their request for an advisory opinion. 
If the OIG calculates that the cost of processing the request has 
reached, or is likely to exceed, that triggering amount, the OIG will 
stop processing the request and promptly notify the requestor. The 
requestor may then decide to either authorize continued processing or 
withdraw the request for an advisory opinion. While the OIG intends to 
be able to more accurately reflect such costs in advance as experience 
is gained, this triggering mechanism approach should ensure that 
requestors do not pay costs far in excess of what they expect to incur 
by their request.
    Section 1008.39 of the regulations specifically indicates that 
while a requestor may withdraw a request for an advisory opinion at any 
time, he or she will be responsible for any costs incurred in 
processing the request prior to its withdrawal.
    When the advisory opinion has been completed as discussed below, or 
the request has been withdrawn, the OIG will calculate the total costs 
incurred in processing the request after taking into account any 
previous payments, such as the initial $250 fee, associated with the 
request, and the OIG will then notify the requestor of the amount owed. 
Once the requestor has paid the full amount owed for the cost of 
processing the request as required by statute, the OIG will release the 
advisory opinion to the requestor.
    While the OIG believes the above approach for payment and release 
will

[[Page 7354]]

be sufficient for the vast majority of requests for advisory opinions, 
an additional procedure will be necessary in those cases where the 
request requires expert advice on non-legal matters. The OIG is 
particularly concerned about requests for advisory opinions requiring 
review by medical experts. For example, section 1128(b)(6)(B) of the 
Act authorizes the OIG to exclude any individual or entity who has 
furnished services to patients ``substantially in excess of the needs 
of such patients or of a quality which fails to meet professionally 
recognized standards of health care.'' In order to determine whether a 
given factual scenario would form the basis for a sanction under this 
authority, as stated in Sec. 1008.33 of these regulations, the OIG may 
make a determination that extensive medical as well as legal analysis 
is required, and that the medical analysis should be referred to a Peer 
Review Organization or other entity capable of providing and issuing 
medical reviews.
    Because of the time and expense of such expert reviews, we believe 
that a request that requires such outside consultation should be 
treated differently from a standard request involving the application 
of the governing law to a given set of facts. When the OIG determines 
that an expert non-legal opinion is required, we will obtain an 
estimate for the costs of such an opinion and provide the requestor 
with that estimate. The requestor may then decide whether to pay the 
estimated cost of the expert review or withdraw the request. If the 
requestor pays the estimated cost, the OIG will promptly refer the 
matter to the expert for such review. Once the OIG receives the medical 
or other review from the outside expert, the advisory opinion process 
will continue with the OIG applying the expert evaluation to the legal 
question(s) at issue.

Responsibilities of the OIG in Reviewing the Advisory Opinion Requests

    Subpart E of part 1008 discusses the obligations and 
responsibilities of the OIG in answering requests for advisory 
opinions. As set forth in these regulations, once the OIG receives a 
request for an advisory opinion, we will promptly examine it to 
determine if it appears to contain sufficient information to form the 
basis for an informed advisory opinion. Generally speaking, the request 
must contain responses to the preliminary questions posed by the OIG, 
as discussed above. If the request does not appear sufficient, we will 
promptly notify the requestor what additional information is required. 
Conversely, if the request appears to be sufficient, we will accept the 
request. In all cases, we will either request additional information or 
accept the request within 10 working days after receiving the request. 
If we have requested additional information and the requestor resubmits 
the advisory opinion request, we will assess within 10 working days the 
resubmission to determine whether it can be accepted or whether we 
still need further information. At the point when the OIG accepts the 
request, we will notify the requestor by U.S. mail of the date of 
acceptance.
    We believe that this approach allows the OIG a reasonable amount of 
time to identify requests that do not contain information sufficient 
for the OIG to process the request. While we are limiting the time 
period of this initial assessment to ensure that facially complete 
requests are promptly processed, we are soliciting public comment on 
the appropriateness of this method of screening requests for advisory 
opinions prior to their acceptance.
    Notwithstanding the acceptance of a request, the OIG reserves the 
right to later determine that it needs additional information. If we 
decide such additional information is necessary, we will notify the 
requestor in the same manner as we did prior to acceptance. The time 
period between when we notify the requestor about the additional 
information we need and when we receive the requested information will 
not be counted in considering the time for issuance of an opinion.
    Because of the fact-intensive inquiry that will be necessary to 
render most advisory opinions, the OIG anticipates that there may be a 
need to request additional information from many requestors. In 
responding, the requestor should provide the OIG with the necessary 
information and accompany that submission with a certification from the 
same individual (or one in the same position) who certified the 
original request for an advisory opinion.
    As required by section 1128D(b)(5)(B) of the Act and set forth in 
Sec. 1008.43, the OIG will issue an advisory opinion within 60 days 
after the request for the opinion is accepted. Once the OIG receives a 
request for an opinion that appears to meet the submission criteria, 
the request for an opinion will be promptly accepted and the 60-day 
time period for issuance of an opinion will commence. The OIG will send 
the advisory opinion to the requestor by regular U.S. mail at the 
conclusion of the 60-day time period and once all required fees have 
been paid.
    We believe that under certain circumstances the running of the 60-
day time limit for issuing an opinion should be tolled. The tolling 
periods will only reflect time when the OIG cannot work on analyzing 
the request. If the OIG notifies the requestor that the costs have 
reached, or are likely to exceed, the triggering amount designated by 
that requestor, the OIG will stop processing the request until the 
requestor instructs the OIG to continue. Similarly, if the OIG notifies 
a requestor of the need for, and estimated cost of, an outside expert 
opinion on a non-legal issue, the regulations state that the OIG will 
stop processing the request until the requestor pays the estimated cost 
and the outside expert provides its opinion. Likewise, in those 
instances when the OIG requests additional information from the 
requestor that the OIG believes is necessary to issue the advisory 
opinion, the OIG will stop processing the opinion until the additional 
information is provided. The time that elapses during these periods 
when the OIG is not processing the request will not be counted as part 
of the 60-day period.
    The time period for issuing an advisory opinion does not include 
the time after the OIG notifies the requestor that the advisory opinion 
is completed and the requestor must pay the full balance due for the 
cost of the opinion.
    While the OIG intends to issue advisory opinions within 60 days of 
the receipt of the request, we do not believe that the 60-day time 
period should include delays in the processing of the request that are 
not within the control of the OIG. With the exception of the delay 
while waiting for a needed outside expert opinion, all of the possible 
tolling events are under the exclusive control of the requestor, and as 
such, since for what we believe will be the vast majority of advisory 
opinion requests, the 60-day period will only be tolled for those 
periods during which the requestor has not paid a required fee or has 
not provided information necessary to the processing of the request.
    As required by section 1128D(b)(1) of the Act, the OIG will consult 
with DoJ when responding to requests for advisory opinions, and will 
issue an advisory opinion to the requestor after considering the 
complete description of all facts provided to it by the requestor. The 
opinion will restate the material facts known to the OIG and discuss 
the OIG's analysis and conclusion regarding the legal question(s) to be 
applied to the facts presented.

[[Page 7355]]

Dissemination of Advisory Opinions

    Section 1128D(b)(5)(A)(v) requires these regulations to describe 
the manner in which advisory opinions will be made available to the 
public. As set forth in subpart E of these regulations, once the OIG 
issues an advisory opinion to a requestor, the OIG will promptly make a 
copy of that opinion available for public inspection at the OIG 
headquarters and the DHHS/OIG web site. We also anticipate that 
advisory opinions will likely be made widely available to interested 
members of the public through commercial publishers and trade groups. 
Public comments and additional suggestions regarding the dissemination 
of advisory opinions to the public will be welcomed.
    Documents submitted to the OIG related to requested advisory 
opinions, and internal government documents related to such opinions, 
will be available to the extent authorized by the Freedom of 
Information Act (FOIA) (5 U.S.C. 552). To the extent that a requestor 
provides information it believes is not subject to disclosure under 
FOIA, such as items that the requestor believes are trade secrets or 
privileged and confidential commercial or financial information, the 
requestor should identify such information in the manner described in 
45 CFR 5.65 (c) and (d). The requestor's assertions about the nature of 
information, however, are not controlling.
    In addition, although a document may be exempt from disclosure 
under FOIA, facts reflected on that document may become part of the 
advisory opinion that will be provided to the public. The material 
facts of the arrangement in question will be described in the body of 
each advisory opinion, all of which will be fully available to the 
public.

Rescission of an Advisory Opinion

    Section 1008.45 of the regulations addresses the rescission of an 
advisory opinion by the OIG. The regulations reserve the right of the 
OIG to rescind an advisory opinion after its issuance in limited 
circumstances, such as when the OIG learns after the issuance of the 
opinion that the arrangement in question may lead to fraud and abuse. 
In such an instance, the OIG will notify the requestor of the 
rescission and make such notice available to the same extent as an 
advisory opinion. Unless the OIG establishes that the requestor failed 
to provide material information in its submissions to the OIG, the 
requestor would not be subject to OIG sanction for actions it took 
prior to the notice of rescission if the requestor acted in good faith 
reliance on the advisory opinion. We are specifically soliciting 
comments on whether this approach reasonably balances the Government's 
need to ensure that advisory opinions are legally correct and the 
requestor's interest in finality.

Scope and Effect of Advisory Opinions

    Subpart F of part 1008 of these regulations addresses the scope and 
effect of advisory opinions. An advisory opinion issued under this 
process is legally binding on the Department (including the OIG) and 
the requestor, but only with respect to the specific conduct of the 
particular requestor. In other words, in accordance with section 
1128D(b)(4)(A) of the Act with respect to the issuance of advisory 
opinions, the Department is not legally bound with respect to the 
conduct of third parties, even if the conduct of that party appears 
similar to the requestor. We believe that no third parties are bound 
nor may they rely on an advisory opinion since each advisory opinion 
will apply legal standards to a set of facts involving certain known 
persons who provide specific statements about key factual issues. A 
third party may implement a look-alike arrangement with additional 
characteristics that would lead to an unfavorable opinion. Therefore, 
by their very nature, advisory opinions, unlike the safe harbor 
regulations, cannot be applied generally.
    We believe the receipt of an advisory opinion regarding a certain 
arrangement does not totally prevent the Government from commencing an 
action against a party to the arrangement where, for example, a 
requestor failed to disclose a material fact. In any such action under 
sections 1128, 1128A or 1128B of the Act, an individual or entity who 
has requested and received an advisory opinion from the OIG regarding 
the arrangement in question may seek to introduce the advisory opinion 
into evidence in the proceeding. We believe that the court must then 
determine whether the requestor of the advisory opinion was justified 
in relying on the opinion. This determination must be made by examining 
all relevant circumstances, including whether the requestor fully and 
accurately described the arrangement in its submissions to the OIG.

III. Regulatory Impact Analysis

Executive Order 12866

    The Office of Management and Budget (OMB) has reviewed this interim 
final rule in accordance with the provisions of Executive Order 12866. 
Executive Order 12866 directs agencies to assess all costs and benefits 
of available regulatory alternatives and, when rulemaking is necessary, 
to select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health, safety, distributive, 
and equity effects).
    As indicated in section II of this preamble, this rule deals 
primarily with the procedural issues involved in the receipt, review 
and response to requests for advisory opinions by the OIG. It sets up 
the procedures as required by Public Law 104-191, for obtaining an 
advisory opinion on whether or not certain activities violate 
designated fraud and abuse authorities. This rule does not address the 
substance of the anti-kickback or other sanction statutes. It does not 
address the substance or content of advisory opinions which may be 
issued in the future. To the extent that advisory opinions affect the 
behavior of health care providers, that effect is the product of the 
substantive content of the sanction statutes themselves, and the 
substantive content of the advisory opinions which will be issued on a 
case-by-case basis in the future. The effect of advisory opinions on 
health care providers is not a function of the process for requesting 
an advisory opinion.
    In addition, the extent to which advisory opinions will result in 
alteration of future business practices, if any, is impossible to 
analyze without experience. It would be completely speculative to try 
to divine to what degree business deals may or may not occur as a 
result of the substance of advisory opinions issued in the future.
    Moreover, we have no way of knowing in advance what the volume of 
requests for advisory opinions will be. However, we estimate that we 
will receive approximately 500 requests per year that will generally 
require between 3 and 40 hours each to process. Accordingly, it would 
likely cost in the range of $150,000 to $2,000,000 per year to issue 
advisory opinions.

Regulatory Flexibility Act

    Under the Regulatory Flexibility Act (5 U.S.C. 601-612), if a rule 
has a significant economic effect on a substantial number of small 
businesses the Secretary must specifically consider the effects of a 
rule on small business entities and analyze regulatory options that 
could lessen the impact of the rule. As stated above, this rule does 
not address the substance of the fraud and abuse statutes or the 
substance of advisory opinions which may be issued in the future. It 
describes the process by which an individual or entity may receive an 
opinion as to the application of these statutes to particular business

[[Page 7356]]

practices. The aggregate economic impact of this rulemaking on small 
business entities should, therefore, be minimal.
    There will, however, be costs involved in filing requests for 
opinions by OIG. Those costs will vary depending on the complexity of 
the request. Compared to the costs of seeking private legal advice, it 
would appear that fees charged for the OIG's review would not be 
substantial. Furthermore, the requirement that applicants pay cost-
based fees for advisory opinions is not a product of this rulemaking: 
It is prescribed by statute that such fees be paid by those requesting 
advisory opinions. This rule merely lays out the procedures for such 
costs to be paid. Thus, we have concluded, and the Secretary certifies, 
that this final rule will not have a significant economic impact on a 
substantial number of small business entities, and that a regulatory 
flexibility analysis is not required for this rulemaking.

IV. Paperwork Reduction Act

    In order to provide appropriate advisory opinions, the OIG will 
need certain information from the parties who request advisory 
opinions. Sections 1008.18, 1008.36(b) and 1008.37 through 1008.40 of 
this interim final rule contain information collection requirements 
that require approval by OMB. We are required to solicit public 
comments under section 3506(c)(2)(A) of the Paperwork Reduction Act of 
1995. Specifically, comments are invited on (1) whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information will 
have practical utility; (2) the accuracy of the estimate of the burden 
of the proposed collection of information; (3) ways to enhance the 
quality, utility and clarity of the information collected; and (4) ways 
to minimize the burden of the collection of information on respondents, 
including through the use of automated collection techniques or other 
forms of information technology.
    We are seeking emergency OMB approval for the collection of 
information contained in this rule. In a separate Federal Register 
notice, containing a 60-day public comment period, we will solicit 
public comment on these requirements, thereby initiating the normal 
Paperwork Reduction Act clearance.
    Title: OIG Advisory Opinion Procedure.
    Summary of the collection of information: Section 205 of Public Law 
104-191 requires the Department to provide advisory opinions to the 
public regarding several categories of subject matter. The Department 
must opine on requestor's potential liability under sections 1128, 
1128A, and 1128B of the Act. These regulations provide the procedures 
under which members of the public may request advisory opinions from 
the OIG. Because all requests for advisory opinions are purely 
voluntary, respondents will only be required to provide information 
regarding facts about which they have decided to request an opinion 
from the OIG.
    In order to ensure a useful advisory opinion process, the OIG must 
receive information sufficient to determine whether the arrangement in 
question is subject to sanction. The information provided by the 
requestor will be applied by the OIG to the legal question posed in the 
request for an advisory opinion. In general, we are requiring a 
complete description of all facts relevant to the inquiry, including 
all related documents.
    The general requirements in this rulemaking may be supplemented by 
voluntary preliminary questions we have developed that correspond with 
each sanction authority in sections 1128, 1128A, and 1128B of the Act 
as appropriate. These more specific information collection requirements 
are being made available for public review and comment by a separate 
Federal Register notice. The preliminary questions will be designed to 
elicit the specific information that will enable the OIG to provide the 
most accurate and timely opinion possible. For example, if a request is 
made for an advisory opinion on whether a given arrangement will 
violate the anti-kickback statute, one question may relate specifically 
to how much remuneration is paid to various parties to the arrangement. 
Although requestors will be under no obligation to answer the 
preliminary questions, we believe that the questions will provide 
requestors with valuable guidance about what information we will need 
to answer their inquiry. A request for an advisory opinion that 
includes complete answers to the preliminary questions corresponding to 
the issue(s) raised by the requestor should contain most, if not all, 
of the information that we will require to issue an advisory opinion. 
Even though we believe that the questions will aid requestors, the 
answering of these questions is purely voluntary in nature and we will 
process advisory opinion requests regardless of whether the preliminary 
questions are answered.
    The following discussion relates the aggregate effect of the 
collections of information included in the text of this interim final 
rule and in the preliminary questions.
    Respondents: The ``respondents'' for the collection of information 
described in these regulations will be self-selected individuals and 
entities that choose to submit requests for advisory opinions to the 
OIG. We anticipate that the respondents will include health care 
providers of many types, from sole practitioner physicians to large 
diversified publicly-traded corporations.
    Estimated number of respondents: 500. Most individuals and entities 
that provide medical services that may be paid for by Medicare, 
Medicaid or Federal health care programs could potentially have 
questions regarding one of the subject matters about which the OIG will 
issue advisory opinions. In reality, we believe that the number of 
requestors will be a small fraction of such providers.
    Over the past several years, the Inspector General Division of the 
Office of the General Counsel has answered telephone inquiries from 
individuals and entities seeking informal guidance with respect to the 
Medicare and State health care programs' anti-kickback statute and 
other sanction authorities. Many of the inquiries related to 
authorities outside the scope of the advisory opinion process, that is, 
the self-referral provisions of section 1877 of the Act. Furthermore, 
we believe that most of the inquiries have been of a nature that the 
caller would be unlikely to request a written advisory opinion on the 
subject matter. Many inquiries related to relatively simple matters 
that could be researched by private counsel at relatively minor 
expense. Nevertheless, the rate of these telephone inquiries may form a 
starting point for estimating the number of advisory opinion requests. 
We estimate that we received an average of 6 telephone inquiries per 
day over the past several years. Of these, we believe that an average 
of two per day could potentially have been the subject of an advisory 
opinion. Using that history as a rough guide, we estimate an annual 
number of 500 requests. Obviously, the actual number of requests could 
be larger since, for the first time, formal written opinions are 
available. Conversely, the numbers could be smaller for a combination 
of many unquantifiable reasons, such as the desire not to subject an 
arrangement to official scrutiny.
    Estimated number of responses per respondent: 1.
    Estimated total annual burden on respondents: We believe that the 
burden of preparing requests for advisory opinions will vary widely 
because of differences in size and complexity of the

[[Page 7357]]

business transaction in question. We estimate that the average burden 
for each submitted request for an advisory opinion will be in the range 
of 2 to 40 hours. We further believe that the burden for most requests 
will be closer to the lower end of the range, with an average burden of 
10 hours per respondent. Total burden for this proposed information 
collection is estimated to be 5000 hours.
    We are requiring requests for advisory opinions to involve existing 
conduct, or conduct in which the requestor intends to engage. We 
anticipate that most requests will involve business arrangements into 
which the requesting party intends to enter. Because the facts will 
relate to business plans, the requesting party will have collected and 
analyzed all or almost all of the information we will need to collect 
to review the request. Therefore, in order to request an advisory 
opinion, the requestor will most likely simply need to compile already 
collected information for our examination. In some cases, however, the 
requestor may need to expend a more significant amount of time in 
preparing a submission related to a complex arrangement involving a 
large number of parties.
    In addition to the hour burden discussed above, some respondents 
may incur additional costs related to the purchase of outside 
professional services, such as attorneys or consultants. We believe 
that the cost burden related to such outside assistance will vary from 
zero to 40 hours per submission. The outside assistance cost burden 
estimate is based on an estimate of 10 hours per request at $200 per 
hour. Thus, the cost burden for these outside functions is estimated at 
$1,000,000.
    Comments on this information collection should be sent to both:

Cynthia Agens Bauer, OS Reports Clearance Officer, ASMB Budget Office, 
Room 503-H, Humphrey Building, 200 Independence Avenue, S.W., 
Washington, D.C. 20201, FAX: (202) 690-6352
Allison Herron Eydt, OIG Desk Officer, Office of Management and Budget, 
Room 10235, New Executive Office Building, 725 17th Street, N.W., 
Washington, D.C. 20053, FAX: (202) 395-6974.

    Comments on these paperwork reduction requirements may be submitted 
to the above-cited individuals within two days following the Federal 
Register publication of this interim final rule.

List of Subjects in 42 CFR Part 1008

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

    Accordingly, 42 CFR chapter V, subchapter B is amended by adding a 
new part 1008 as set forth below:

TITLE 42--PUBLIC HEALTH

CHAPTER V--OFFICE OF INSPECTOR GENERAL--HEALTH CARE, DEPARTMENT OF 
HEALTH AND HUMAN SERVICES

PART 1008--ADVISORY OPINIONS BY THE OIG

Subpart A--General Provisions

Sec.
1008.1  Basis and purpose.
1008.3  Effective period.
1008.5  Matters subject to advisory opinions.
Subpart B--Preliminary Obligations and Responsibilities of the 
Requesting Party
1008.11  Who may submit a request.
1008.15  Facts subject to advisory opinions.
1008.18  Preliminary questions suggested for the requesting party.

Subpart C--Advisory Opinion Fees

1008.31  OIG fees for the cost of advisory opinions.
1008.33  Expert opinions from outside sources.
Subpart D--Submission of a Formal Request for an Advisory Opinion
1008.36  Submission of a request.
1008.37  Disclosure of ownership and related information.
1008.38  Signed certifications by the requestor.
1008.39  Additional information.
1008.40  Withdrawal.

Subpart E--Obligations and Responsibilities of the OIG

1008.41  OIG acceptance of the request.
1008.43  Issuance of a formal advisory opinion.
1008.45  Rescission.
1008.47  Disclosure.

Subpart F--Scope and Effect of OIG Advisory Opinions

1008.51  Exclusivity of OIG advisory opinions.
1008.53  Affected parties.
1008.55  Admissibility of evidence.
1008.59  Range of the advisory opinion.

Authority: 42 U.S.C. 1320a-7d(b).

Subpart A--General Provisions


Sec. 1008.1  Basis and purpose.

    (a) This part contains the specific procedures for the submission 
of requests by an individual or entity for advisory opinions to, and 
the issuance of advisory opinions by, the OIG, in consultation with the 
Department of Justice (DoJ), in accordance with section 1128D(b) of the 
Social Security Act (Act), 42 U.S.C. 1320a-7d(b). The OIG will issue 
such advisory opinions based on actual or proposed factual 
circumstances submitted by the requesting individual or entity.
    (b) An individual or entity may request an advisory opinion from 
the OIG regarding on any of 5 specific subject matters described in 
Sec. 1008.5 of this part.
    (c) The requesting party must provide a complete description of the 
facts as set forth in subpart B of this part, and pay the costs to the 
OIG of processing the request for an advisory opinion as set forth in 
subpart C of this part.
    (d) Nothing in this part limits the investigatory or prosecutorial 
authority of the OIG, DoJ or any other agency of the Government.


Sec. 1008.3  Effective period.

    The provisions in this part are applicable to requests for advisory 
opinions submitted on or after February 21, 1997, and before August 21, 
2000, and to any requests submitted during any other time period for 
which the OIG is required by law to issue advisory opinions.


Sec. 1008.5  Matters subject to advisory opinions.

    (a) An individual or entity may request an advisory opinion from 
the OIG regarding--
    (1) What constitutes prohibited remuneration within the meaning of 
section 1128B(b) of the Act;
    (2) Whether an arrangement, or proposed arrangement, satisfies the 
criteria set forth in section 1128B(b)(3) of the Act for activities 
that do not result in prohibited remuneration;
    (3) Whether an arrangement, or proposed arrangement, satisfies the 
criteria set forth in Sec. 1001.952 of this chapter for activities that 
do not result in prohibited remuneration;
    (4) What constitutes an inducement to reduce or limit services 
under section 1128A(b) of the Act to Medicare or Medicaid program 
beneficiaries; and
    (5) Whether any activity, or proposed activity, constitutes grounds 
for the imposition of a sanction under sections 1128, 1128A or 1128B of 
the Act.
    (b) Exceptions. The OIG will not address through the advisory 
opinion process--
    (1) What the fair market value will be, or what the fair market 
value was paid or received, for any goods, services or property; and
    (2) Whether an individual is a bona fide employee within the 
requirements of section 3121(d)(2) of the Internal Revenue Code of 
1986.

[[Page 7358]]

Subpart B--Preliminary Obligations and Responsibilities of the 
Requesting Party


Sec. 1008.11  Who may submit a request.

    Any individual or entity may submit a request to the OIG for an 
advisory opinion regarding an existing arrangement or one which the 
requestor in good faith specifically plans to undertake. The requestor 
must be a party to the arrangement, or proposed arrangement, that is 
the subject of the request.


Sec. 1008.15  Facts subject to advisory opinions.

    (a) The OIG will consider requests from a requesting party for 
advisory opinions regarding the application of specific facts to the 
subject matters set forth in Sec. 1008.5(a) of this part. The facts 
must relate to an existing arrangement, or one which the requestor in 
good faith plans to undertake. The plans may be contingent upon 
receiving a favorable advisory opinion. The advisory opinion request 
should contain a complete description of the arrangement that the 
requestor is undertaking, or plans to undertake.
    (b) Requests presenting a general question of interpretation, 
posing a hypothetical situation, or regarding the activities of third 
parties do not qualify as advisory opinion requests.
    (c) An advisory opinion request will not be accepted when--
    (1) The request is not related to a named individual or entity;
    (2) The same, or substantially the same, course of action is under 
investigation, or is or has been the subject of a proceeding involving 
the Department of Health and Human Services or another governmental 
agency; or
    (3) An informed opinion cannot be made, or could be made only after 
extensive investigation, clinical study, testing or collateral inquiry.


Sec. 1008.18  Preliminary questions suggested for the requesting party.

    (a) The OIG may establish and maintain a set of questions 
corresponding to the categories of opinion subject matter as set forth 
in Sec. 1008.5(a) of this part as appropriate. The questions will be 
designed to elicit specific information relevant to the advisory 
opinion being sought; however, answering the questions is voluntary.
    (b) Questions the OIG suggests the requestor to address may be 
obtained from the OIG. Requests should be made in writing, specify the 
subject matter and be sent to the headquarter offices of the OIG.
    (c) When submitting a request for an advisory opinion, a requestor 
may answer the questions corresponding to the subject matter for which 
the opinion is requested. The extent to which any of the questions is 
not fully answered may effect the content of the advisory opinion.

Subpart C--Advisory Opinion Fees


Sec. 1008.31  OIG fees for the cost of advisory opinions.

    (a) Responsibility for fees. The requestor is responsible for 
paying a fee equal to the costs incurred by the Department in 
responding to the request for an advisory opinion.
    (b) Initial payment. A request for an advisory opinion must be 
accompanied by a check or money order payable to the Treasury of the 
United States for $250. This initial payment is non-refundable.
    (c) Calculation of costs. Prior to the issuance of the advisory 
opinion, the OIG will calculate the costs to be incurred by the 
Department in responding to the request. The calculation will include 
the costs of salaries and benefits payable to attorneys and others who 
have worked on the request in question, as well as administrative and 
supervisory support for such persons. The OIG has the exclusive 
authority to determine the cost of responding to a request for an 
advisory opinion and such determination is not reviewable or waivable.
    (d) Agreement to pay all costs. (1) By submitting the request for 
an advisory opinion, the requestor agrees, except as indicated in 
paragraph (d)(3) of this section, to pay all costs incurred by the OIG 
in responding to the request for an advisory opinion.
    (2) In its request for an advisory opinion, the requestor may 
designate a triggering dollar amount. If the OIG estimates that the 
costs of processing the advisory opinion request have reached or are 
likely to exceed the designated triggering dollar amount, the OIG will 
notify the requestor.
    (3) If the OIG notifies the requestor that the estimated cost of 
processing the request has reached or is likely to exceed the 
triggering dollar amount, the OIG will stop processing the request 
until such time as the requestor makes a written request for the OIG to 
continue processing the request. Any delay in the processing of the 
request for an advisory opinion attributable to these procedures will 
toll the time for issuance of an advisory opinion until the requestor 
asks the OIG to continue working on the request.
    (4) If the requestor chooses not to pay for completion of an 
advisory opinion, or withdraws the request, the requestor is still 
obligated to pay for all costs incurred and identified by the OIG 
attributable to processing the request for an advisory opinion up to 
that point.
    (5) If the costs incurred by the OIG in responding to the request 
are greater than the amount paid by the requestor, the OIG will, prior 
to the issuance of the advisory opinion, notify the requestor of any 
additional amount due. The OIG will not issue an advisory opinion until 
the full amount owed by the requestor has been paid. Once the requestor 
has paid the OIG the total amount due for the costs of processing the 
request, the OIG will issue the advisory opinion. The time period for 
issuing advisory opinions will be tolled from the time the OIG notifies 
the requestor of the amount owed until the time full payment is 
received.
    (e) Fees for outside experts. (1) In addition to the fees 
identified in this section, the requestor also must pay any required 
fees for expert opinions, if any, from outside sources, as described in 
Sec. 1008.33.
    (2) The time period for issuing an advisory opinion will be tolled 
from the time that the OIG notifies the requestor of the need for an 
outside expert opinion until the time the OIG receives the necessary 
expert opinion.


Sec. 1008.33  Expert opinions from outside sources.

    (a) The OIG may request expert advice from qualified sources on 
non-legal issues if necessary to respond to the advisory opinion 
request. For example, the OIG may require the use of appropriate 
medical reviewers, such as peer review organizations, to obtain medical 
opinions on specific issues.
    (b) If the OIG determines that it is necessary to obtain expert 
advice to issue a requested advisory opinion, the OIG will notify the 
requestor of that fact and provide the identity of the appropriate 
expert and an estimate of the costs of the expert advice. As indicated 
in Sec. 1008.31(e), the requestor must pay the estimated cost of the 
expert advice.
    (c) Once payment is made for the cost of the expert advice, the OIG 
will arrange for a prompt expert review of the issue or issues in 
question.

Subpart D--Submission of a Formal Request for an Advisory Opinion


Sec. 1008.36  Submission of a request.

    (a) A request for a formal advisory opinion must be submitted in 
writing. An original and 2 copies of the request

[[Page 7359]]

should be addressed to the headquarter offices of the OIG.
    (b) Each request for an advisory opinion must include--
    (1) The identities, including the names and addresses, of the 
requestor and of all other actual and potential parties, to the extent 
known to the requestor to the arrangement that is the subject of the 
request for an advisory opinion;
    (2) The name, title, address, and daytime telephone number of a 
contact person who will be available to discuss the request for an 
advisory opinion with the OIG on behalf of the requestor;
    (3) A declaration of the subject category or categories as 
described in Sec. 1008.5 of this part for which the advisory opinion is 
requested;
    (4) A complete and specific description of all relevant information 
bearing on the arrangement for which an advisory opinion is requested 
and on the circumstances of the conduct,<SUP>1 including--
---------------------------------------------------------------------------

    \1\ The requestor is under an affirmative obligation to make 
full and true disclosure with respect to the facts regarding the 
advisory opinion being requested.
---------------------------------------------------------------------------

    (i) Background information,
    (ii) Complete copies of all operative documents, and
    (iii) Detailed statements of all collateral or oral understandings, 
if any;
    (5) All Medicare and Medicaid provider numbers used by all parties 
to the arrangement;
    (6) Signed certifications by the requestor, as described in 
Sec. 1008.37 of this part; and
    (7) A check or money order payable to the Treasury of the United 
States in the amount of $250, as discussed in Sec. 1008.31(b) of this 
part.


Sec. 1008.37  Disclosure of ownership and related information.

    Each individual or entity requesting an advisory opinion will 
supply full and complete information as to the identity of each entity 
owned or controlled by the indivudual, and of each person with an 
ownership or control interest in the entity, as defined in section 
1124(a)(1) of the Social Security Act (42 U.S.C. 1320a-3(a)(1)) and 
part 420 of this chapter.


Sec. 1008.38  Signed certifications by the requestor.

    (a) Every request must include the following signed certification: 
``With knowledge of the penalties for false statements provided by 18 
U.S.C. 1001 and with knowledge that this request for an advisory 
opinion is being submitted to the Department of Health and Human 
Services, I certify that all of the information provided is true and 
correct, and constitutes a complete description of the facts regarding 
which an advisory opinion is sought, to the best of my knowledge and 
belief.''
    (b) If the advisory opinion relates to a proposed arrangement, the 
request must also include the following signed certification: ``The 
arrangement described in this request for an advisory opinion is one 
that [the requestor] in good faith plans to undertake.'' This statement 
may be made contingent on a favorable OIG advisory opinion, in which 
case, the phrase ``if the OIG issues a favorable advisory opinion'' 
should be added to the certification.
    (c) The certification(s) will be signed by--
    (1) The requestor, if the requestor is an individual;
    (2) The chief executive officer, or comparable officer, of the 
requestor, if the requestor is a corporation; or
    (3) The managing partner of the requestor, if the requestor is a 
partnership.


Sec. 1008.39  Additional information.

    (a) If the request for an advisory opinion does not contain all of 
the information required by Sec. 1008.36 of this part, or the OIG 
believes it needs more information prior to rendering an advisory 
opinion, the OIG may, at any time, request whatever additional 
information or documents it deems necessary. The time period for the 
issuance of an advisory opinion will be tolled from the time the OIG 
requests the additional information from the requestor until such time 
as the OIG determines that it has received the requested information.
    (b) The OIG may request additional information before or after the 
request for an advisory opinion has been accepted.
    (c) Additional information should be provided in writing, signed by 
the same person who signed the initial request and certified by this 
person to be a true, correct and complete disclosure of the requested 
information in a manner equivalent to that described in Sec. 1008.37 of 
this part.
    (d) In connection with any request for an advisory opinion, the OIG 
or DoJ may conduct whatever independent investigation they believe 
appropriate.


Sec. 1008.40  Withdrawal.

    The requestor of an advisory opinion may withdraw the request prior 
to the issuance of a formal advisory opinion by the OIG. The withdrawal 
must be written and must be submitted to the same address as the 
submitted request, as indicated in Secs. 1008.18(b) and 1008.36(a) of 
this part. Regardless of whether the request is withdrawn, the 
requestor must pay the costs expended by the OIG in processing the 
opinion, as discussed in Sec. 1008.31(d) of this part. The OIG reserves 
the right to retain any request for an advisory opinion, documents and 
information submitted to it under these procedures, and to use them for 
any governmental purposes.

Subpart E--Obligations and Responsibilities of the OIG


Sec. 1008.41  OIG acceptance of the request.

    (a) Upon receipt of a request for an advisory opinion, the OIG will 
promptly make an initial determination of whether the submission 
includes all of the information the OIG will require to process the 
request.
    (b) Within 10 working days of receipt of the request, the OIG 
will--
    (1) Formally accept the request for an advisory opinion,
    (2) Notify the requestor of what additional information is needed, 
or
    (3) Decline to formally accept the request.
    (c) If the requestor provides the additional information requested, 
or otherwise resubmits the request, the OIG will process the 
resubmission in accordance with paragraphs (a) and (b) of this section 
as if it was an initial request for an advisory opinion.
    (d) Upon acceptance of the request, the OIG will notify the 
requestor by regular U.S. mail of the date that the request for the 
advisory opinion was formally accepted.
    (e) The 60-day period for issuance of an advisory opinion set forth 
in
    Sec. 1008.43(c) of this part will not commence until the OIG has 
formally accepted the request for an advisory opinion.


Sec. 1008.43  Issuance of a formal advisory opinion.

    (a) An advisory opinion will be considered issued, once payment is 
received, when it is dated, numbered, and signed by an authorized 
official of the OIG.
    (b) An advisory opinion will contain a description of the material 
facts known to the OIG with regard to the arrangement for which an 
advisory opinion has been requested. The advisory opinion will state 
the OIG's opinion regarding the subject matter of the request based on 
the facts provided and known to the OIG.
    (c)(1) The OIG will issue an advisory opinion, in accordance with 
the provisions of this part, within 60 days after the request for an 
advisory opinion has been formally accepted;

[[Page 7360]]

    (2) If the 60th day falls on a Saturday, Sunday, or Federal 
holiday, the time period will end at the close of the business day next 
following the weekend or holiday;
    (3) The 60 day period will be tolled from the time the OIG--
    (i) Notifies the requestor that the costs have reached or are 
likely to exceed the triggering amount until the time when the OIG 
receives written notice from the requestor to continue processing the 
request;
    (ii) Requests additional information from the requestor until the 
time the OIG receives the requested information;
    (iii) Notifies the requestor of the full amount due until the time 
the OIG receives payment of the full amount owed; and
    (iv) Notifies the requestor of the need for expert advice until the 
time the OIG receives the expert advice.
    (d) After the OIG has notified the requestor of the full amount 
owed and the OIG has received full payment of that amount, the OIG will 
issue the advisory opinion and promptly mail it to the requestor by 
regular first class U.S. mail.


Sec. 1008.45  Rescission.

    Any advice given by the OIG is without prejudice to the right of 
the OIG to reconsider the questions involved and, where the public 
interest requires, to rescind or revoke the action. Notice of such 
rescission or revocation will be given to the requestor so that the 
individual or entity may discontinue the course of action taken in 
accordance with the OIG advisory opinion. The OIG will not proceed 
against the requestor with respect to any action taken in good faith 
reliance upon the OIG advice under this part, where all the relevant 
facts were fully, completely and accurately presented to the OIG, and 
where such action was promptly discontinued upon notification of 
rescission or revocation of the OIG approval.


Sec. 1008.47  Disclosure.

    (a) Advisory opinions issued and released in accordance with the 
provisions set forth in this part will be available to the public.
    (b) Promptly after the issuance and release of an advisory opinion 
to the requestor, a copy of the advisory opinion will be available for 
public inspection between the hours of 10:00 a.m. and 3:00 p.m. on 
normal business days at the headquarter offices of the OIG and on the 
DHHS/OIG web site.
    (c) Any pre-decisional document, or part of such pre-decisional 
document, that is prepared in the OIG, DoJ or any other Department or 
agency of the United States in connection with an advisory opinion 
request under the procedures set forth in this part will be exempt from 
disclosure under 5 U.S.C. 552, and will not be made publicly available.
    (d) Documents submitted by the requestor to the OIG in connection 
with a request for an advisory opinion will be available to the public 
to the extent authorized by 5 U.S.C. 552, through procedures set forth 
in 45 CFR part 5.
    (e) Nothing in this section will limit the OIG's right, in its 
discretion, to issue a press release or otherwise publicly disclose the 
identity of the requesting party or parties, and the nature of the 
action taken by the OIG upon the request.

Subpart F--Scope and Effect of OIG Advisory Opinions


Sec. 1008.51  Exclusivity of OIG advisory opinions.

    The only method for obtaining a binding advisory opinion regarding 
any of the subject matters set forth in Sec. 1008.5(a) is through the 
procedures described in this part. No binding advisory opinion, oral or 
written, has or may be issued by the OIG regarding the specific matters 
set forth in Sec. 1008.5(a) except through written opinions issued in 
accordance with this part.


Sec. 1008.53  Affected parties.

    An advisory opinion issued by the OIG will have no application to 
any individual or entity that does not join in the request for the 
opinion. No individual or entity other than the requestor(s) may rely 
on an advisory opinion.


Sec. 1008.55  Admissibility of evidence.

    (a) The failure of a party to seek an advisory opinion may not be 
introduced into evidence to prove that the party intended to violate 
the provisions of sections 1128, 1128A or 1128B of the Act.
    (b) An advisory opinion not issued to a person may not be 
introduced into evidence to prove that person did not intend to violate 
the provisions of sections 1128, 1128A or 1128B of the Act.


Sec. 1008.59  Range of the advisory opinion.

    (a) An advisory opinion will state only the OIG's opinion regarding 
the subject matter of the request. If the arrangement for which an 
advisory opinion is requested is subject to approval or regulation by 
any other agency, such advisory opinion will not be taken to indicate 
the OIG's views on the legal or factual issues that may be raised 
before that agency.
    (b) An advisory opinion issued under this part will not bind or 
obligate any agency other than the Department. It will not affect the 
requestor's, or anyone else's, obligations to any other agency, or 
under any statutory or regulatory provision other than that which is 
the specific subject matter of the advisory opinion.

    Dated: December 26, 1996.
June Gibbs Brown,
Inspector General, Department of Health and Human Services.

    Approved: January 28, 1997.
Donna E. Shalala,
Secretary.
[FR Doc. 97-4086 Filed 2-18-97; 8:45 am]
BILLING CODE 4150-04-P