Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules 63035

1See section 1128 of the Act; 42 U.S.C. 1320a–

7.

2See Manocchio v. Kusserow (961 F.2d 1539

(11th Cir. 1992)), which held that exclusions are

remedial.

Consultants, Inc. and Malcolm Pirnie,

Inc. under contract 68–C–C6–0039 with

EPA OGWDW. April 1999.

US EPA. 2000a. ‘‘Estimated Per Capita Water

Ingestion in the United States: Based on

Data Collected by the United States

Department of Agriculture’s (USDA)

1994–1996 Continuing Survey of Food

Intakes by Individuals.’’ Office of Water,

Office of Standards and Technology.

EPA–822–00–008. April 2000.

US EPA. 2000b. Proposed Arsenic in

Drinking Water Rule: Regulatory Impact

Analysis (RIA). Prepared by Abt

Associates, Inc. under contract to EPA

OGWDW. EPA 815–R–013. June 2000.

US EPA. 2000c. ‘‘Arsenic Occurrence in

Public Drinking Water Supplies.’’ Public

Comment Draft. Office of Water,

Washington DC. EPA 815–D–00–001.

May 2000.

US EPA. 2000d. National Primary Drinking

Water Regulations; Arsenic and

Clarifications to Compliance and New

Source Contaminants Monitoring;

Proposed Rule. Federal Register. Vol. 65,

No. 121, p. 38888. June 22, 2000.

Viscusi, W.K., W.A. Magat, and J. Huber.

1991. Pricing Environmental Health

Risks: Survey Assessments of Risk-Risk

and Risk-Dollar Trade-Offs for Chronic

Bronchitis. ‘‘Journal of Environmental

Economics and Management.’’ 21:32–51.

Wu, M.M., T.L. Kuo, Y.H. Hwant, and C.J.

Chen. 1989. Dose-response relation

between arsenic concentration in well

water and mortality from cancers and

vascular diseases. American Journal of

Epidemiology. 130:1123–1132.

Authority: 42 U.S.C. 300f, 300g–1, 300g–2,

300g–3, 300g–4, 300g–5, 300g–6, 300j–4,

300j–9, and 300j–11.

Dated: October 13, 2000.

J. Charles Fox,

Assistant Administrator for Water.

[FR Doc. 00–27034 Filed 10–19–00; 8:45 am]

BILLING CODE 6560–50–P

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Office of Inspector General

42 CFR Parts 1001, 1003, 1005 and

1008

RIN 0991–AB09

Medicare and State Health Care

Programs: Fraud and Abuse;

Revisions and Technical Corrections

AGENCY: Office of Inspector General

(OIG), HHS.

ACTION: Proposed rule.

SUMMARY: This proposed rule sets forth

several revisions and technical

corrections to the OIG regulations. This

rule proposes revisions or clarifications

to the definition of the term ‘‘item or

service’’, to the reinstatement

procedures relating to exclusions

resulting from a default on health

education or scholarship obligations,

and to the limitations period applicable

to exclusions. In addition, this rule

would make a number of minor

technical corrections to the current

regulations, and serves to clarify various

issues and inadvertent errors appearing

in the OIG’s existing regulatory

authorities in order to achieve greater

clarity and consistency.

DATES: To assure consideration, public

comments must be mailed and delivered

to the address provided below by no

later than 5 p.m. November 20, 2000.

ADDRESSES: Please mail or deliver your

written comments to the following

address: Department of Health and

Human Services, Office of Inspector

General, Room 5246, Attention: OIG–

62–P, Washington, D.C. 20201.

FOR FURTHER INFORMATION CONTACT: Joel

J. Schaer, Office of Counsel to the

Inspector General, (202) 619–0089.

SUPPLEMENTARY INFORMATION: Consistent

with existing regulatory authority, the

OIG is proposing the following revisions

to 42 CFR chapter V, many of which are

technical in nature:

• Limitations Period for Exclusions;

§ 1001.1 (Scope of Exclusions).

The purpose of an OIG program

exclusion is to protect Medicare,

Medicaid and all other Federal health

care programs from fraud and abuse,

and to protect beneficiaries of those

programs from untrustworthy providers.

Questions have been raised as to

whether a limitations period is

applicable to the imposition of OIG

program exclusions. The OIG frequently

determines that conduct which occurred

several years in the past does not

warrant an exclusion (other than an

exclusion that is mandated by statute).

However, there is no statute of

limitations specified for exclusions in

the Social Security Act (the Act).1

Moreover, program exclusions are

remedial in nature,2 and it is the OIG’s

position that if we determine that an

exclusion is necessary to protect the

programs and beneficiaries from

untrustworthy individuals and entities,

we are authorized to impose such an

exclusion without being subject to a

limitations period. To eliminate any

confusion on this point, we are

clarifying § 1001.1 to indicate that there

is no time limitation on the imposition

of a program exclusion.

Thus, for example, when a program

exclusion imposed under section

1128(b)(7) of the Act is based on

violations of another statute, such as the

civil money penalty (CMP) statute

(section 1128A of the Act), which has a

6 year statute of limitations, the program

exclusion is not similarly time limited.

• Amendment to § 1001.101(c) (Basis

for Liability)

In introductory paragraph (c) of

§ 1001.101, we propose to add the word

‘‘financial’’ before the word

‘‘misconduct.’’ This revision would be

consistent with the statutory language

set forth in section 1128(a)(3) of the Act

which specifically uses the word

‘‘financial’’ to describe the felony under

which the OIG will exclude an

individual or entity. The revision to this

paragraph is intended to mirror the

statutory language.

• Revisions to §§ 1001.102 and

1001.201 With Respect to Financial Loss

and the Threshold Amount

Currently, §§ 1001.102 and 1001.201

set forth an aggravating factor for

lengthening the period of exclusion

when an individual’s conviction, or

similar acts, resulted in financial loss of

$1,500 or more. First, we are proposing

to revise §§ 1001.102(b)(1) and

1001.201(b)(2)(i) to increase the

financial loss considered to be an

aggravating factor from $1,500 to $5,000.

We believe that this revision would

more properly reflect the current

economics of health care fraud in the

programs and would establish a more

reasonable threshold amount as an

aggravating factor to be considered as a

basis for lengthening a period of

exclusion.

In addition, we are proposing to

clarify §§ 1001.102(b)(1) and

1001.201(b)(2)(i) to reflect as an

aggravating factor both the actual and

intended loss to the programs associated

with this conduct. We believe that any

loss—not just the actual, out-of-pocket

loss—that is designed to cause harm to

the programs should be taken into

consideration. For example, in a

situation where an individual intends to

commit damage to the programs by

filing false cost reports, but whose plans

are detected and prevented from

reaching fruition by an intermediary

who intercepts the damage before it can

occur, we believe the intended loss, and

not just any actual loss, should also be

taken in consideration as a valid

measure of the individual’s culpability.

Accordingly, we would also clarify

§§ 1001.102(b)(1) and 1001.201(b)(2)(i)

63036 Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules

to specifically indicate that any

intended loss to the programs would be

considered as an aggravating factor in

assessing an individual’s behavior and

trustworthiness. Parallel changes to

§§ 1001.102(c)(1) and 1001.201(b)(3)(i)

would also be made.

In addition,

• Clarification of Paragraph (b)(9) in

§ 1001.102 (Length of Exclusion)

Section 1001.102 addresses the length

of an exclusion, and paragraph (b) of

that section sets forth various factors

that may be considered to be aggravating

and a basis for lengthening the period of

exclusion. We propose to revise

paragraph (b)(9) by adding the word

‘‘even’’ to indicate that one factor we

would consider is ‘‘[w]hether the

individual or entity was convicted of

other offenses besides those which

formed the basis for the exclusion, or

has been the subject of any other

adverse action by a Federal, State or

local government agency or board, even

if the adverse action is based on the

same set of circumstances that serves as

the basis for the imposition of the

exclusion’’ (underlining added). The

inclusion of the word ‘‘even’’ was

inadvertently omitted in the revisions to

§ 1001.102(b) that were set forth in the

OIG final rulemaking issued on

September 2, 1998 (63 FR 46676),

addressing revised OIG exclusion

authorities resulting from Public Law

104–191, and a subsequent revision set

forth in final rulemaking issued on July

22, 1999 (64 FR 39420), addressing

revised OIG sanction authorities

resulting from Public Law 105–33.

• Revisions to §§ 1001.102(c)(1),

1001.951 and 1001.952 To Encompass

Acts Occurring With Respect to ‘‘All

Other Federal Health Care Programs’’

Section 231 of Public Law 104–191,

the Health Insurance Portability and

Accountability Act (HIPAA) of 1996,

amended the CMP and criminal

provisions in section 1128A and 1128B

of the Act (42 U.S.C. 1320a–7a and

1320a–7b) to encompass acts occurring

with respect to a ‘‘Federal health care

program,’’ as defined in section 1128B(f)

of the Act. Section 4331(c) of Public

Law 105–33, the Balanced Budget Act

(BBA) of 1997, further amended section

1128(a) and (b) of the Act to extend the

scope of an OIG exclusion beyond the

Medicare and State health care

programs to all other Federal health care

programs and to enable the OIG directly

to impose exclusions from all other

Federal health care programs. In the

final regulations addressing OIG

exclusion authorities resulting from

HIPAA (63 FR 46676) and in the final

rulemaking addressing revised OIG

sanction authorities resulting from the

BBA (64 FR 39420), while we made

several revisions to part 1001 to include

the term ‘‘Federal health care program,’’

conforming revisions were not made in

§§ 1001.102(c)(1), 1001.951 and

1001.952. We propose to amend these

sections to accurately reflect this

expanded authority.

• Additional Technical Revisions to

§ 1001.952

On November 19, 1999, we published

a final rule setting forth clarifications to

the initial OIG safe harbor provisions in

1991 and establishing additional safe

harbor provisions under the antikickback statute (64 FR 63518). In that

final rule, certain minor technical errors

appeared in the regulations text when

published, which we are proposing to

clarify or correct at this time.

Specifically, in paragraph (h)(1)(ii), we

are proposing to substitute the phrase

‘‘Department or a State health care

program,’’ with the phrase ‘‘Department

or health agency,’’ to be consistent with

similar context language used in this

same paragraph. (The italics appearing

in introductory paragraph (h)(1) in the

November 19, 1999 final rule would

also be removed.) In addition, in

paragraph (h)(2) (ii)(A), the current

introductory phrase reads: ‘‘[W]here a

discount is required to be reported to

Medicare or a State health care program

under paragraph (h)(1) of this section,

* * *’’ We are proposing to clarify this

discussion by amending this

introductory statement to read as

‘‘[W]here the value of the discount is

known at the time of sale, * * *’’ This

would be consistent with the current

introductory language appearing in

paragraph (h)(2)(ii)(B) of § 1001.952. We

are also clarifying the definition of the

term ‘‘rebate’’ in § 1001.952(h)(4) to

make clear that a rebate is a price

reduction after the time of sale. We are

further proposing to clarify the language

in paragraph (h)(5)(ii) by including an

example as to what is meant by the

phrase ‘‘same methodology’’ as used in

this discussion. The example is

consistent with the November 19, 1999

final rule preamble discussion. The

additional language would indicate that

the ‘‘same methodology’’ would reflect,

as an example, the same DRG,

prospective payment or per diem

payment, but would not include fee

schedules. For clarification purposes,

we are also proposing to include a

comma after the word ‘‘reflected’’ in this

same paragraph to make clear that the

phrase ‘‘where appropriate and as

appropriate’’ modifies both the terms

‘‘disclosed’’ and ‘‘reflected.’’

In addition, we are also proposing to

clarify, gramatically, the introductory

language for paragraph (r) to more

clearly state the conditions under which

‘‘remuneration’’ does not include a

payment that is a return on an

investment interest for ambulatory

surgical centers. Also, in paragraph

(r)(2)(ii), we are proposing to substitute

the word ‘‘physician’s’’ for the word

‘‘surgeon’s,’’ which was inadvertently

set forth in the November 19, 1999 final

regulations. As corrected, the paragraph

would read as: ‘‘(ii) At least one-third of

each physician investor’s medical

practice income from all sources for the

previous fiscal year or previous 12-

month period must be derived from the

physician’s performance of procedures

(as defined in this paragraph).’’

With regard to § 1001.952, we are only

requesting comments on the changes set

forth specifically in this proposed rule.

We expect to address other substantive

revisions to aspects of the November 19,

1999 new safe harbors, as appropriate,

through a separate clarifying proposed

rule.

• Revision to § 1001.1501 (Default of

Health Education Loan or Scholarship

Obligations)

Under section 1128(b)(14) of the Act,

and § 1001.1501 of the implementing

regulations, the OIG may exclude any

individual that the Public Health

Service (PHS) determines is in default

on repayment of scholarship obligations

or loans made in connection with health

profession education. The current

regulations provide that an individual

may be excluded until such time as PHS

notifies the OIG that the default has

been cured or the obligations have been

resolved to the PHS’s satisfaction. This

regulatory language has resulted in

some uncertainty as to exactly when a

determination may be made that a

default is cured or that the obligations

have been adequately resolved.

We propose to revise § 1001.1501(b)

to make it clear that once an individual

is excluded, he or she will be eligible for

reinstatement only (1) after the debt is

repaid by the individual or (2) when

there is no longer an outstanding debt

as determined by the PHS (e.g., the debt

has been written off). We specifically

propose to revise paragraph (b) to

indicate that an individual will be

excluded until such time as PHS

notifies the OIG that the individual’s

debt has been paid or resolved. Upon

receipt of notice from PHS, the OIG will,

in turn, inform the individual of his or

her right to apply for reinstatement. In

addition, we are amending this

Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules 63037

paragraph to specifically state that an

individual who has had his or her debt

written off by PHS will be eligible to

apply to the OIG for reinstatement any

time following PHS’s notification to the

individual that there is no longer an

outstanding debt.

• Clarification to § 1001.1801 (Waivers

of Exclusions)

We are proposing to expand the

designated programs which may request

a waiver of an exclusion to conform

with statutory amendments which

broadened the scope of an OIG program

exclusion. Prior to the BBA, an

exclusion was applicable only to

participation in Medicare and all State

health care programs (as defined in

section 1128(h) of the Act). In section

4331 of the BBA, Congress amended

sections 1128(a) and (b) of the Act to

provide that an exclusion will be from

all ‘‘Federal health care programs,’’ as

defined in section 1128B(f) of the Act.

Notwithstanding this authority, current

law only permits waivers to be

requested by State health care programs.

Although Congress expanded the

scope of exclusion under section 1128

of the Act to participation in all other

Federal health care programs, it did not

explicitly broaden the authority to

request a waiver of an exclusion under

either section 1128(c)(3)(B) or

1128(d)(3)(B) of the Act to include

requests of waivers by Federal health

care programs other than Medicare or

State health care programs. However,

we believe that the clear congressional

intent was to broaden both the scope

and applicability of the entire exclusion

authority to ‘‘all other Federal health

care programs.’’ Thus, we believe that it

would be consistent for the

implementing regulations to provide for

a parallel approach with respect to

requests for waiver of an exclusion. We

are, therefore, proposing to amend

§ 1001.1801 to specify that a ‘‘Federal

health care program’’ may request a

waiver, thus replacing the current

provision which only authorizes such

waiver requests from a ‘‘State health

care program.’’

• Collateral Estoppel Effect in

§ 1001.2007 (Appeal of Exclusions)

Many of the OIG exclusion authorities

are predicated on prior determinations

made by courts or other administrative

agencies. Section 1001.2007 of the OIG

regulations currently contains a

provision that precludes, in the

administrative appeal of such

exclusions, the relitigation of the

underlying determination. We are

proposing to further clarify paragraph

(d) of this section to specifically state

that a civil judgment rendered by a

Federal, State or local court is an

additional type of prior determination

that may serve as the basis for an

exclusion (and may not be relitigated in

the exclusion proceeding). This

clarification is predicated on the general

principles of collateral estoppel.

• Revision to § 1001.3005 (Reversed or

Vacated Decisions)

Section 1001.3005 provides that an

individual or entity will be reinstated

into the Medicare program retroactive to

the effective date of the exclusion when

such exclusion is based on either (1) a

conviction that is reversed or vacated on

appeal, or (2) an action by another

agency, such as a State agency or

licensing board, that is reversed or

vacated on appeal. However, current

regulations do not specify at what point

in the appeal process retroactive

reinstatement will occur. We are

proposing to modify § 1001.3005 to

provide that when an exclusion action

is reversed or vacated at any stage of an

administrative appeal process, the OIG

will reinstate the individual or entity at

that time retroactive to the effective date

of the underlying exclusion. However,

the regulation would make clear that the

exclusion would be reimposed if the

administrative decision reversing or

vacating the exclusion is overturned

upon further appeal.

• Revisions to § 1003.100 (Basis and

Purpose)

Section 1003.100 sets for the basis

and purpose for the OIG’s CMP and

assessment authorities. In final

rulemaking published on July 22, 1999

(64 FR 39428), § 1003.100 was amended

by, among other things, revising

(b)(1)(iv), (viii), (x) and (xi) and by

adding a new paragraph (b)(1)(xii).

These revisions to § 1003.100 were not

properly reflected in the OIG final

rulemaking on April 26, 2000 (65 FR

24415) that also made additional

revisions to this section. Accordingly,

we are amending § 1003.100 to

accurately reflect paragraph (b)(1)(iv). In

addition, paragraphs designated in the

July 22, 1999 final rule as (b)(1)(viii) and

(b)(1)(xii) would now being set forth as

paragraphs (b)(1)(xiv) and (b)(1)(xv),

respectively, in the section.

• Revision to the Definition of the Term

‘‘Item and Service’’ in § 1003.101

(Definitions)

The current definition of the term

‘‘item or service’’ set forth in § 1003.101

follows the statutory language by

defining the term to include items or

services paid either in accordance with

(1) an itemized claim or (2) an entry or

omission on a cost report. Some health

care providers have mistakenly believed

that this definition only covered goods

and services paid on the bases of those

two methodologies, and did not cover

goods or services paid in accordance

with one of the various prospective

payment methodologies. To reflect the

varying reimbursement systems and

mechanisms in practice, we are

proposing to modify the current

definition of the term ‘‘item and

service’’ in this section to clarify that, in

addition to itemized claims or cost

reports, the term ‘‘item and service’’

includes any item or service that is

reimbursed through any health care

payment mechanism, such as

prospective payment systems.

• Clarifying Factor in § 1003.106(a)(4)

for Determining the Amount of Penalty

for Patient Dumping Violations

Section 1003.106(a)(4) sets forth six

factors to be taken into account in

determining a CMP amount for

violations in accordance with

§ 1003.102(c), the patient anti-dumping

provisions. One of the criteria for

considering the amount of CMP to

impose in a patient dumping case is

‘‘the prior history of offenses’’ under the

Patient Anti-Dumping Act. The current

language allows the OIG only to

consider ‘‘prior’’ offenses, and does not

allow the consideration of similar

conduct after the incident in question.

For example, if the OIG is pursuing a

case against a physician responsible for

an inappropriate transfer, and it is

learned that the physician was later

terminated for causing another

inappropriate transfer, we cannot

currently consider this in determining

the CMP amount, even though we

believe that this conduct is relevant in

making a determination. In order to

permit the OIG to consider this

subsequent act in determining the

amount of penalty to be assessed, we are

proposing to revise paragraph (a)(4)(iii)

of this section to allow the OIG to

consider as a factor other related or

similar allegations subsequent to the

incident under review.

• Revised Time Frames in § 1005.7(e)

(Discovery)

Section 1005.7(e) sets forth

procedures and time frames governing

the discovery process. The time frames

set forth in paragraph (e)(1) are intended

to ensure that the hearing process

proceeds in an orderly and timely

manner, and to induce parties to

produce documents within a reasonable

period of time. While the 15-day period

set forth in the current regulations may

be adequate in many cases, it has been

63038 Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules

suggested that the time frames given to

parties to comply fully with requests for

documents and for raising objections

may be too short a period of time.

Because we believe it is practical to

provide greater flexibility and establish

more reasonable and appropriate time

frames consistent with the Federal Rules

of Civil Procedure, we are

recommending amending § 1005.7(e)(1)

to expand the specified time frames to

30 days. (Section 1005.7(e)(3) already

permits the administrative law judge

(ALJ) the discretion to further expand or

modify these time frames, on a case-bycase basis, for parties to comply and

object with discovery.)

• Revision to § 1005.16 (Witnesses)

The OIG is proposing to amend

§ 1005.16(b) to give the ALJ discretion to

admit written expert testimony that is

reliable. Under the current regulations,

the ALJ is not permitted to accept

reliable written testimony, such as

depositions, trial testimony and

administrative proceedings, from

experts. We are proposing to revise

paragraph (b) by further stating that

‘‘[T]he ALJ may admit prior sworn

testimony of experts which has been

subject to adverse examination, such as

a deposition or trial testimony.’’ We

believe this revision would allow the

ALJ the discretion to admit written

testimony of experts if he or she finds

it is relevant and reliable.

• Revision to § 1005.17 (Evidence)

Section 1005.17 addresses the

admissibility of evidence in

administrative proceedings. While the

ALJs are not strictly bound by the

Federal Rules of Evidence (FRE),

paragraph (b) of this section permits the

ALJs to apply the FRE where

appropriate, e.g., to exclude unreliable

evidence. However, we believe that

there is a need to protect the credibility

of witnesses from being attacked by the

introduction of evidence of character

and conduct not conforming to the

limitations of Rule 608 of the FRE.

Without such limitations, the

introduction of such character and

conduct evidence is purely at the

discretion of the ALJ who may choose

to hear testimony that would be

excluded under Rule 608. Because of

the unpredictability of this situation,

witnesses may be reluctant to testify for

fear that their credibility will be

attacked by the introduction of highly

personal information that may be

embarrassing or upsetting, but not

highly probative of the witnesses’

character for truthfulness or

untruthfulness. Therefore, we are

proposing to amend § 1005.17 by adding

a new paragraph to require adherence to

Rule 608 of the FRE in administrative

proceedings under this section. We

believe that by requiring adherence to

Rule 608, the use of character and

conduct evidence will be appropriately

limited and more predictable for all

parties. We do not intend to foreclose

other forms of impeachment, such as

evidence of criminal conviction or prior

inconsistent statements.

• Revision to U.S.C. Citation in

§ 1008.37

In the OIG final rule published in the

Federal Register on July 16, 1998 (63 FR

38311) addressing the issuance of

advisory opinions by the OIG, an

inadvertent error was made in citing the

United States Code referenced in

§ 1008.37, disclosure of ownership and

related information. The citation error

in § 1008.37, which refers to 42 U.S.C.

1302a–3(a)(1), would be corrected to

read as 42 U.S.C. 1320a–3(a)(1).

Regulatory Impact Statement

The Office of Management and Budget

(OMB) has reviewed this proposed rule

in accordance with the provisions of

Executive Order 12866, and has

determined that it does not meet the

criteria for an economically significant

regulatory action. Specifically,

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. In

addition, section 202 of the Unfunded

Mandates Reform Act, Public Law 104–

4, requires that agencies prepare an

assessment of anticipated costs and

benefits on any rulemaking that may

result in an expenditure by State, local

or tribal government, or by the private

sector of $100 million or more in any

given year. Further, under the Small

Business Enforcement Act (SBEA) of

1996, if a rule has a significant

economic effect on a substantial number

of small businesses, the Secretary must

specifically consider the economic

effect of a rule on small business entities

and analyze regulatory options that

could lessen the impact of the rule, and

under the Regulatory Flexibility Act, if

a rule has a significant economic effect

on a substantial number of small

businesses, the Secretary must

specifically consider the economic

effect of a rule on small business entities

and analyze regulatory options that

could lessen the impact of the rule.

Executive Order 13132, Federalism,

further requires agencies to determine if

a rule will have a significant affect on

States, on their relationship with the

Federal Government, and on the

distribution of power and responsibility

among the various levels of

Government.

Executive Order 12866

Executive Order 12866 requires that

all regulations reflect consideration of

alternatives, costs, benefits, incentives,

equity and available information.

Regulations must meet certain

standards, such as avoiding unnecessary

burden. We believe that this proposed

rule would have no significant

economic impact. The proposed

revisions set forth in this rulemaking are

either technical in nature or are

designed to further clarify OIG statutory

requirements.

Specifically, these provisions are

designed to clarify the scope of the

OIG’s existing authorities to exclude

individuals and entities from Medicare,

Medicaid and all other Federal health

care programs, and to strengthen current

legal authorities pertaining to the

imposition of CMPs against individuals

and entities engaged in prohibited

actions and activities. We believe that

any aggregate economic effect of these

revised regulatory provisions would be

minimal and would impact only those

limited few who engage in prohibited

behavior in violation of the statute. As

such, we believe that the aggregate

economic impact of these proposed

regulations is minimal and would have

no appreciable effect on the economy or

on Federal or State expenditures.

Unfunded Mandates Reform Act of

1995. Additionally, in accordance with

the Unfunded Mandates Reform Act of

1995, we believe that there are no

significant costs associated with these

proposed revisions that would impose

any mandates on State, local or tribal

governments, or the private sector that

will result in an expenditure of $100

million or more in any given year. As

indicated, these proposed revisions are

narrow in scope and effect, comport

with congressional and statutory intent,

and clarify the Department’s legal

authorities against those who defraud or

otherwise act improperly against the

Federal and State health care programs.

Accordingly, we believe that a full

analysis under the Act is not necessary.

Regulatory Flexibility Act

In accordance with the Regulatory

Flexibility Act (RFA) of 1980, and the

Small Business Regulatory Enforcement

Act of 1996, which amended the RFA,

we are required to determine if this rule

will have a significant economic effect

on a substantial number of small entities

Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules 63039

and, if so, to identify regulatory options

that could lessen the impact. While

these clarifying provisions may have an

impact on small entities, we believe that

the aggregate economic impact of this

rulemaking would be minimal, since it

is the nature of the violation and not the

size of the entity that will result in a

violation of the statute. Since the vast

majority of individuals and entities

potentially affected by these regulations

do not engage in prohibited

arrangements, schemes or practices in

violation of the law, we believe that

these proposed regulations would not

have a significant economic impact on

a number of small business entities.

Executive Order 13132, Federalism

We have also reviewed this rule under

the threshold criteria of Executive Order

13132, Federalism, and we have

determined that this rulemaking would

not have significantly affect the rights,

roles and responsibilities of States. In

summary, we have concluded, and the

Secretary certifies, that since this rule

would have no significant economic

impact on Federal, State or local

economies, nor have a significant

economic impact on a substantial

number of small entities, a regulatory

flexibility analysis is not required.

Paperwork Reduction Act

The provisions of these proposed

regulations impose no new reporting or

recordkeeping requirements

necessitating clearance by OMB.

Response to Public Comments

Comments will be available for public

inspection beginning on November 3,

2000 in Room 5518 of the Office of

Inspector General at 330 Independence

Avenue, S.W., Washington, DC, on

Monday through Friday of each week

from 8:30 a.m. to 4:30 p.m., (202) 619–

0089. Because of the large number of

comments we normally receive on

regulations, we cannot acknowledge or

respond to them individually. However,

we will consider all timely and

appropriate comments when developing

the final rule.

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 1008

Administrative practice and

procedure, Fraud, Grant programs—

health, Health facilities, Health

professions, Medicaid, Medicare,

Penalties.

Accordingly, 42 CFR chapter V would

be amended as set forth below:

PART 1001—[AMENDED]

1. The authority citation for part 1001

would continue to read as follows:

Authority: 42 U.S.C. 1302, 1320a–7,

1320a–7b, 1395u(h), 1395u(j), 1395u(k),

1395y(d), 1395y(e), 1395cc(b)(2)(D), (E) and

(F), and 1395hh; and sec. 2455, Pub.L. 103–

355, 108 Stat. 3327 (31 U.S.C. 6101 note).

2. Section 1001.1 would be amended

by redesignating existing paragraph (b)

to read as paragraph (c) and by adding

a new paragraph (b) to read as follows:

§ 1001.1 Scope and purpose.

* * * * *

(b) A program exclusion is deemed to

be remedial in nature and designed to

protect Medicare, Medicaid and other

Federal health care programs and their

beneficiaries from fraudulent

individuals and entities. Accordingly,

an exclusion is neither time-barred nor

subject to any limitations period, even

when the exclusion is based on

violations of another statute which may

have a specified limitations period.

(c) * * *

3. Section 1001.101 would be

amended by republishing the

introductory text and by revising

introductory paragraph (c) to read as

follows:

§ 1001.101 Basis for liability.

The OIG will exclude any individual

or entity that—

* * * * *

(c) Has been convicted, under Federal

or State law, of a felony that occurred

after August 21, 1996, relating to fraud,

theft, embezzlement, breach of fiduciary

responsibility, or other financial

misconduct—

* * * * *

4. Section 1001.102 would be

amended by republishing the

introductory text for paragraph (b) and

revising paragraphs (b)(1) and (b)(9),

and by republishing the introductory

text for paragraph (c) and revising

paragraph (c)(1) to read as follows:

§ 1001.102 Length of exclusion.

* * * * *

(b) Any of the following factors may

be considered to be aggravating and a

basis for lengthening the period of

exclusion—

(1) The acts resulting in the

conviction, or similar acts, resulted in

financial loss (both actual loss and

intended loss) to a Government program

or to one or more entities of $5,000 or

more. (The entire amount of financial

loss to such programs or entities,

including any amounts resulting from

similar acts not adjudicated, will be

considered regardless of whether full or

partial restitution has been made);

* * * * *

(9) Whether the individual or entity

was convicted of other offenses besides

those which formed the basis for the

exclusion, or has been the subject of any

other adverse action by any Federal,

State or local government agency or

board, even if the adverse action is

based on the same set of circumstances

that serves as the basis for the

imposition of the exclusion.

(c) Only if any of the aggravating

factors set forth in paragraph (b) of this

section justifies an exclusion longer

than 5 years, may mitigating factors be

considered as a basis for reducing the

period of exclusion to no less than 5

years. Only the following factors may be

considered mitigating—

(1) The individual or entity was

convicted of 3 or fewer misdemeanor

offenses, and the entire amount of

financial loss (both actual loss and

intended loss) to Medicare or any other

Federal, State or local governmental

health care program due to the acts that

resulted in the conviction, and similar

acts, is less than $1,500;

* * * * *

5. Section 1001.201 would be

amended by republishing the

introductory text for paragraph (b)(2)

and revising paragraph (b)(2)(i), and by

republishing the introductory text for

paragraph (b)(3) and revising paragraph

(b)(3)(i) to read as follows:

§ 1001.201 Conviction relating to program

or health care fraud.

* * * * *

(b) * * *

(2) Any of the following factors may

be considered to be aggravating and a

basis for lengthening the period of

exclusion—

(i) The acts resulting in the

conviction, or similar acts, resulted in

financial loss (both actual loss and

intended loss) of $5,000 or more to a

Government program or to one or more

other entities, or had a significant

financial impact on program

beneficiaries or other individuals. (The

total amount of financial loss will be

63040 Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules

considered, including any amounts

resulting from similar acts not

adjudicated, regardless of whether full

or partial restitution has been made);

* * * * *

(3) Only the following factors may be

considered as mitigating and a basis for

reducing the period of exclusion—

(i) The individual or entity was

convicted of 3 or fewer offenses, and the

entire amount of financial loss (both

actual loss and intended loss) to a

Government program or to other

individuals or entities due to the acts

that resulted in the conviction and

similar acts is less than $1,500;

* * * * *

6. Section 1001.951 would be

amended by revising paragraph (b)(1)(ii)

to read as follows:

§ 1001.951 Fraud and kickbacks and other

prohibited activities.

* * * * *

(b) * * *

(1) * * *

(ii) The nature and extent of any

adverse physical, mental, financial or

other impact the conduct had on

program beneficiaries or other

individuals or the Medicare, Medicaid

and all other Federal health care

programs;

* * * * *

7. Section 1001.952 would be

amended as follows:

a. By republishing the introductory

text;

b. Republishing the introductory text

to paragraph (b), revising paragraph

(b)(5), removing the undesignated

paragraph following paragraph (b)(5),

and adding a sentence at the end of

paragraph (b)(6);

c. Republishing the introductory text

to paragraph (c), revising paragraph

(c)(5), removing the undesignated

paragraph following paragraph (c)(5),

and adding a sentence at the end of

paragraph (c)(6);

d. Republishing the introductory text

to paragraph (d) and revising paragraph

(d)(5);

e. Republishing introductory text to

paragraph (e)(1) and revising paragraph

(e)(1)(ii);

f. Republishing introductory text to

paragraph (e)(2) revising paragraph

(e)(2)(ii);

g. Republishing introductory

paragraph (f) and revising paragraph

(f)(2) ;

h. Revising introductory paragraph

(h); introductory paragraph (h)(1),

introductory paragraph (h)(1)(ii) and

introductory paragraph (h)(1)(iii);

introductory paragraph (h)(2) and

paragraph (h)(2)(ii)(A); introductory

paragraph (h)(3) and introductory

paragraph (h)(3)(iii); paragraph (h)(4);

and paragraphs (h)(5)(ii) and (h)(5)(iii);

i. Revising paragraph (i);

j. Republishing the introductory

paragraph (j), adding a sentence at the

end of paragraph (j)(2), and removing

the undesignated paragraph following

paragraph (j)(2);

k. Republishing introductory

paragraph (n) and revising paragraph

(n)(6);

l. Republishing introductory

paragraph (o) and revising paragraph

(o)(5);

m. Revising introductory paragraph (r)

and paragraph (r)(2)(ii); and

n. Revising the introductory text for

paragraph (s).

The revisions to § 1001.952 would

read as follows:

§ 1001.952 Exceptions.

The following payment practices shall

not be treated as a criminal offense

under section 1128B of the Act and

shall not serve as the basis for an

exclusion:

* * * * *

(b) Space rental. As used in section

1128B of the Act, ‘‘remuneration’’ does

not include any payment made by a

lessee to a lessor for the use of premises,

as long as all of the following six

standards are met—

* * * * *

(5) The aggregate rental charge is set

in advance, is consistent with fair

market value in arms-length

transactions and is not determined in a

manner that takes into account the

volume or value of any referrals or

business otherwise generated between

the parties for which payment may be

made in whole or in part under

Medicare, Medicaid or other Federal

health care program.

(6) * * * Note that for purposes of

paragraph (b) of this section, the term

fair market value means the value of the

rental property for general commercial

purposes, but shall not be adjusted to

reflect the additional value that one

party (either the prospective lessee or

lessor) would attribute to the property

as a result of its proximity or

convenience to sources of referrals or

business otherwise generated for which

payment may be made in whole or in

part under Medicare, Medicaid and all

other Federal health care programs.

* * * * *

(c) Equipment rental. As used in

section 1128B of the Act,

‘‘remuneration’’ does not include any

payment made by a lessee of equipment

to the lessor of the equipment for the

use of the equipment, as long as all of

the following six standards are met—

* * * * *

(5) The aggregate rental charge is set

in advance, is consistent with fair

market value in arms-length

transactions and is not determined in a

manner that takes into account the

volume or value of any referrals or

business otherwise generated between

the parties for which payment may be

made in whole or in part under

Medicare, Medicaid or all other Federal

health care programs.

(6) * * * Note that for purposes of

paragraph (c) of this section, the term

fair market value means the value of the

equipment when obtained from a

manufacturer or professional

distributor, but shall not be adjusted to

reflect the additional value one party

(either the prospective lessee or lessor)

would attributable to the equipment as

a result of its proximity or convenience

to sources of referrals or business

otherwise generated for which payment

may be made in whole or in part under

Medicare, Medicaid or other Federal

health care program.

(d) Personal services and

management contracts. As used in

section 1128B of the Act ,

‘‘remuneration’’ does not include any

payment made by a principal to an

agent as compensation for the services

of the agent , as long as all of the

following seven standards are met—

* * * * *

(5) The aggregate compensation paid

to the agent over the term of the

agreement is set in advance, is

consistent with fair market value in

arms-length transactions and is not

determined in a manner that takes into

account the volume or value of any

referrals or business otherwise

generated between the parties for which

payment may be made in whole or in

part under Medicare, Medicaid or other

Federal health care programs.

* * * * *

(e) Sale of practice. (1) As used in

section 1128B of the Act,

‘‘remuneration’’ does not include any

payment made to a practitioner by

another practitioner where the former

practitioner is selling his or her practice

to the latter practitioner, as long as both

of the following two standards are met—

* * * * *

(ii) The practitioner who is selling his

or her practice will not be in a

professional position to make referrals

to, or otherwise generate business for,

the purchasing practitioner for which

payment may be made in whole or in

part under Medicare, Medicaid or other

Federal health care programs after one

Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules 63041

year from the date of the first agreement

pertaining to the sale.

(2) As used in section 1128B of the

Act, ‘‘remuneration’’ does not include

any payment made to a practitioner by

a hospital or other entity where the

practitioner is selling his or her practice

to the hospital or other entity, so long

as the following four standards are met:

* * * * *

(ii) The practitioner who is selling his

or her practice will not be in a

professional position after completion of

the sale to make or influence referrals

to, or otherwise generate business for,

the purchasing hospital or entity for

which payment may be made under

Medicare, Medicaid or other Federal

health care programs.

* * * * *

(f) Referral services. As used in

section 1128B of the Act,

‘‘remuneration’’ does not include any

payment or exchange of anything of

value between an individual or entity

(‘‘participant’’) and another entity

serving as a referral service (‘‘referral

service’’), as long as all of the following

four standards are met—

* * * * *

(2) Any payment the participant

makes to the referral service is assessed

equally against and collected equally

from all participants, and is only based

on the cost of operating the referral

service, and not on the volume or value

of any referrals to or business otherwise

generated by the either party for the

referral service for which payment may

be made in whole or in part under

Medicare, Medicaid or other Federal

health care programs.

* * * * *

(h) Discounts. As used in section

1128B of the Act, ‘‘remuneration’’ does

not include a discount, as defined in

paragraph (h)(5) of this section, on an

item or service for which payment may

be made, in whole or in part, under

Medicare, Medicaid or other Federal

health care programs for a buyer as long

as the buyer complies with the

applicable standards of paragraph (h)(1)

of this section; a seller as long as the

seller complies with the applicable

standards of paragraph (h)(2) of this

section; and an offeror of a discount

who is not a seller under paragraph

(h)(2) of this section so long as such

offeror complies with the applicable

standards of paragraph (h)(3) of this

section:

(1) With respect to the following three

categories of buyers, the buyer must

comply with all of the applicable

standards within one of the three

following categories—

* * * * *

(ii) If the buyer is an entity which

reports its costs on a cost report

required by the Department or a health

agency, it must comply with all of the

following four standards—

* * * * *

(iii) If the buyer is an individual or

entity in whose name a claim or request

for payment is submitted for the

discounted item or service and payment

may be made, in whole in part, under

Medicare, Medicaid or other Federal

health care programs (not including

individuals or entities defined as buyers

in paragraph (h)(1)(i) or (h)(1)(ii) of this

section), the buyer must comply with

both of the following standards—

* * * * *

(2) The seller is an individual or

entity that supplies an item or service

for which payment may be made, in

whole or in part, under Medicare,

Medicaid or other Federal health care

programs to the buyer and who permits

a discount to be taken off the buyer’s

purchase price. The seller must comply

with all of the applicable standards

within one of the following three

categories—

* * * * *

(ii) * * *

(A) Where the value of the discount

is known at the time of sale, the seller

must fully and accurately report such

discount on the invoice, coupon or

statement submitted to the buyer;

inform the buyer in a manner that is

reasonably calculated to give notice to

the buyer of its obligations to report

such discount and to provide

information upon request under

paragraph (h)(1) of this section; and

refrain from doing anything that would

impede the buyer from meeting its

obligations under this paragraph; or

* * * * *

(3) The offeror of a discount is an

individual or entity who is not a seller

under paragraph (h)(2) of this section,

but promotes the purchase of an item or

service by a buyer under paragraph

(h)(1) of this section at a reduced price

for which payment may be made, in

whole or in part, under Medicare,

Medicaid or other Federal health care

programs. The offeror must comply with

all of the applicable standards within

the following three categories—

* * * * *

(iii) If the buyer is an individual or

entity in whose name a request for

payment is submitted for the discounted

item or service and payment may be

made, in whole or in part, under

Medicare, Medicaid or other Federal

health care programs (not including

individual or entities defined as buyers

in paragraph (h)(1)(i) or (h)(1)(ii) of this

section), the offeror must comply with

the following two standards—

* * * * *

(4) For purposes of this paragraph, a

rebate is any discount the terms of

which are fixed and disclosed in writing

to the buyer at the time of the initial

purchase to which the discount applies,

but which is given after the time of sale.

(5) * * *

(ii) Supplying one good or service

without charge or at a reduced charge to

induce the purchase of a different good

or service, unless the goods and services

are reimbursed by the same Federal

health care program using the same

methodology (e.g., under the same DRG,

prospective payment, or per diem, but

not including fee schedules) and the

reduced charge is fully disclosed to the

Federal health care program and

accurately reflected, where appropriate,

and as appropriate, to the

reimbursement methodology;

(iii) A reduction in price applicable to

one payer but not to Medicare, Medicaid

or other Federal health care programs;

* * * * *

(i) Employees. As used in section

1128B of the Act, ‘‘remuneration’’ does

not include any amount paid by an

employer to an employee, who has a

bona fide employment relationship with

the employer, for employment in the

furnishing of any item or service for

which payment may be made in whole

or in part under Medicare, Medicaid or

other Federal health care program. For

purposes of paragraph (i) of this section,

the term employee has the same

meaning as it does for purposes of 26

U.S.C. 3121(d)(2).

(j) Group purchasing organizations.

As used in section 1128B of the Act,

‘‘remuneration’’ does not include any

payment by a vendor of goods or

services to a group purchasing

organization (GPO), as part of an

agreement to furnish such goods or

services to an individual or entity as

long as both of the following two

standards are met—

* * * * *

(2) * * * Note that for purposes of

paragraph (j) of this section, the term

group purchasing organization (GPO)

means an entity authorized to act as a

purchasing agent for a group of

individuals or entities who are

furnishing services for which payment

may be made in whole or in part under

Medicare, Medicaid or other Federal

health care programs, and who are

neither wholly-owned by the GPO nor

subsidiaries of a parent corporation that

wholly owns the GPO (either directly or

through another wholly-owned entity).

* * * * *

63042 Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules

(n) Practitioner recruitment. As used

in section 1128B of the Act,

‘‘remuneration’’ does not include any

payment or exchange of anything of

value by an entity in order to induce a

practitioner who has been practicing

within his or her current specialty for

less than 1 year to locate, or to induce

any other practitioner to relocate, his or

her primary place of practice into a

HPSA for his or her specialty area, as

defined in Departmental regulations,

that is served by the entity, as long as

all of the following nine standards are

met—

* * * * *

(6) The amount or value of the

benefits provided by the entity may not

vary (or be adjusted or renegotiated) in

any manner based on the volume or

value of any expected referrals to or

business otherwise generated for the

entity by the practitioner for which

payment may be made in whole in part

under Medicare, Medicaid or any other

Federal health care programs.

* * * * *

(o) Obstetrical malpractice insurance

subsidies. As used in section 1128B of

the Act, ‘‘remuneration’’ does not

include any payment made by a hospital

or other entity to another entity that is

providing malpractice insurance

(including a self-funded entity), where

such payment is used to pay for some

or all of the costs of malpractice

insurance premiums for a practitioner

(including a certified nurse-midwife as

defined in section 1861(gg) of the Act)

who engages in obstetrical practice as a

routine part of his or her medical

practice in a primary care HPSA, as long

as all of the following seven standards

are met—

* * * * *

(5) The amount of payment may not

vary based on the volume or value of

any previous or expected referrals to or

business otherwise generated for the

entity by the practitioner for which

payment may be made in whole or in

part under Medicare, Medicaid or any

other Federal health care programs.

* * * * *

(r) Ambulatory surgical center. As

used in section 1128B of the Act,

‘‘remuneration’’ does not include any

payment that is in return on an

investment interest, such as a dividend

or interest income, made to an investor,

as long as the investment entity is a

certified ambulatory surgical center

(ASC) under part 416 of this title, the

operating and recovery room space of

which is dedicated exclusively to the

ASC; patients referred to the investment

entity by an investor are fully informed

of the investor’s investment interest;

and all of the applicable standards are

met within one of the following four

categories—

* * * * *

(2) * * *

(ii) At least one-third of each

physician investor’s medical practice

income from all sources for the previous

fiscal year or previous 12-month period

must be derived from the physician’s

performance of procedures (as defined

in this paragraph).

* * * * *

(s) Referral arrangements for specialty

services. As used in section 1128B of the

Act, ‘‘remuneration’’ does not include

any exchange of value among

individuals and entities where one party

agrees to refer a patient to the other

party for the provision of a specialty

service payable in whole or in part

under Medicare, Medicaid or any other

Federal health care programs in return

for an agreement on the part of the other

party to refer that patient back at a

mutually agreed upon time or

circumstance as long as the following

four standards are met—

* * * * *

8. Section 1001.1501 would be

amended by revising paragraph (b) to

read as follows:

§ 1001.1501 Default of health education

loan or scholarship obligations.

* * * * *

(b) Length of exclusion. The

individual will be excluded until such

time as PHS notifies the OIG that the

default has been cured or that there is

no longer an outstanding debt. Upon

such notice, the OIG will inform the

individual of his or her right to apply

for reinstatement. 9. Section 1001.1801

would be amended by revising

paragraphs (a), (b), (e) and (f), and by

deleting paragraph (g) to read as follows:

§ 1001.1801 Waivers of exclusions.

(a) The OIG has authority to grant or

deny a request from a Federal health

care program that an exclusion from that

program be waived with respect to an

individual or entity, except that no

waiver may be granted with respect to

an exclusion under § 1001.101(b). The

waiver request must be in writing and

from an individual directly responsible

for administering the Federal health

care program.

(b) With respect to exclusions under

§ 1001.101(a), a request from a Federal

health care program for a waiver of the

exclusion will only be considered if the

individual is the sole community

physician or if the individual or entity

is the sole source of essential

specialized items or services.

* * * * *

(e) In the event a waiver is granted,

the OIG may determine the scope of the

waiver to apply to particular items,

services, locations or programs.

(f) The decision to grant or deny a

request for a waiver, to limit the scope

of a waiver, or to rescind a waiver is not

subject to administrative or judicial

review.

10. Section 1001.2007 would be

amended by revising paragraph (d) to

read as follows:

§ 1001.2007 Appeal of exclusions.

* * * * *

(d) When the exclusion is based on

the existence of a criminal conviction or

a civil judgment imposing liability by

Federal, State or local court, a

determination by another Government

agency, or any other prior determination

where the facts were adjudicated and a

final decision was made, the basis for

the underlying conviction, civil

judgment or determination is not

reviewable and the individual or entity

may not collaterally attack it either on

substantive or procedural grounds in

this appeal.

* * * * *

11. Section 1001.3005 would be

amended by revising paragraph (a) and

by adding a new paragraph (e) to read

as follows:

§ 1001.3005 Reversed or vacated

decisions.

(a) An individual or entity will be

reinstated into Medicare, Medicaid and

other Federal health care programs

retroactive to the effective date of the

exclusion when such exclusion is based

on—

(1) A conviction that is reversed or

vacated on appeal;

(2) An action by another agency, such

as a State agency or licensing board, that

is reversed or vacated on appeal; or

(3) An OIG exclusion action that is

reversed or vacated at any stage of an

individual’s or entity’s administrative

appeal process.

* * * * *

(e) If an action which results in the

retroactive reinstatement of an

individual or entity is subsequently

overturned, the OIG may reimpose the

exclusion for the initial period of time,

less the period of time that was served

prior to the reinstatement of the

individual or entity.

PART 1003—[AMENDED]

1. The authority citation for part 1003

would continue to read as follows:

Authority: 42 U.S.C. 1302, 1320a–7,

1320a–7a, 1320a–7e, 1320b–10, 1395u(j),

1395u(k), 1395cc(g), 1395dd(d)(1), 1395mm,

Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules 63043

1395nn(g), 1395ss(d), 1396b(m), 11131(c) and

11137(b)(2).

2. Section 1003.100 would be

amended by revising paragraphs

(b)(1)(iv), (b)(1)(xii) and (b)(1)(xiii); and

by adding paragraphs (b)(1)(xiv) and

(b)(1)(xv) to read as follows:

§ 1003.100 Basis and purpose.

* * * * *

(b) * * *

(1) * * *

(iv)(A) Fail to report information

concerning medical malpractice

payments or who improperly disclose,

use or permit access to information

reported under part B of title IV of

Public Law 99–660, and regulations

specified in 45 CFR part 60, or

(B) Are health plans and fail to report

information concerning sanctions or

other adverse actions imposed on

providers as required to be reported to

the Healthcare Integrity and protection

Data Bank (HIPDB) in accordance with

section 1128E of the Act;

* * * * *

(xii) Offer inducements that they

know or should know are likely to

influence Medicare or State health care

program beneficiaries to order or receive

particular items or services;

(xiii) Are physicians who knowingly

misrepresent that a Medicare

beneficiary requires home health

services;

(xiv) Have submitted, or caused to be

submitted, certain prohibited claims,

including claims for services rendered

by excluded individuals employed by or

otherwise under contract with such

person, under one or more Federal

health care programs; or

(xv) Violate the Federal health care

programs’ anti-kickback statute as set

forth in section 1128B of the Act.

* * * * *

3. Section 1003.101 would be

amended by republishing the

introductory text and by revising the

definition for the term item or service to

read as follows:

§ 1003.101 Definitions.

For purposes of this part:

* * * * *

Item or service includes—

(1) Any item, device, medical supply

or service provided to a patient—

(i) Which is listed in an itemized

claim for program payment or a request

for payment, or

(ii) For which payment is included in

other Federal or State health care

reimbursement methods, such as a

prospective payment system; and

(2) In the case of a claim based on

costs, any entry or omission in a cost

report, books of account or other

documents supporting the claim.

* * * * *

4. Section 1003.106 would be

amended by republishing the

introductory text for paragraph (a)(4)

and by revising paragraph (a)(4)(iii) to

read as follows:

§ 1003.106 Determinations regarding the

amount of the penalty and assessment.

(a) * * *

(4) In determining the amount of any

penalty in accordance with

§ 1003.102(c), the OIG takes into

account—

* * * * *

(iii) Any other instances where the

respondent failed to provide appropriate

emergency medical screening,

stabilization and treatment of

individuals coming to a hospital’s

emergency department or to effect an

appropriate transfer;

* * * * *

PART 1005—[AMENDED]

1. The authority citation for part 1005

would continue 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 would by amended

by revising paragraph (e)(1) to read as

follows:

§ 1005.7 Discovery.

* * * * *

(e)(1) When a request for production

of documents has been received, within

30 days the party receiving that request

will either fully respond to the request,

or state that the request is being objected

to and the reasons for that objection. If

objection is made to part of an item or

category, the part will be specified.

Upon receiving any objections, the party

seeking production may then, within 30

days or any other time frame set by the

ALJ, file a motion for an order

compelling discovery. (The party

receiving a request for production may

also file a motion for protective order

any time prior to the date the

production is due.)

* * * * *

3. Section 1005.16 would be amended

by revising paragraph (b) to read as

follows:

§ 1005.16. Witnesses.

* * * * *

(b) At the discretion of the ALJ,

testimony (other than expert testimony)

may be admitted in the form of a written

statement. The ALJ may admit prior

sworn testimony of experts which has

been subject to adverse examination,

such as a deposition or trial testimony.

Any such written statement must be

provided to all other parties along with

the last known address of such

witnesses, in a manner that allows

sufficient time for other parties to

subpoena such witness for crossexamination at the hearing. Prior

written statements of witnesses

proposed to testify at the hearing will be

exchanged as provided in § 1005.8.

* * * * *

4. Section 1005.17 would be amended

by redesignating existing paragraphs (g)

through (j) respectively as new

paragraphs (h) through (k); and by

adding a new paragraph (g) to read as

follows:

§ 1005.17 Evidence.

* * * * *

(g) Evidence related to the character

and conduct of witnesses may be

introduced only as permitted under

Rule 608 of the Federal Rules of

Evidence.

* * * * *

PART 1008—[AMENDED]

1. The authority citation for part 1008

would continue to read as follows:

Authority: 42 U.S.C. 1320a–7d(b).

2. Section 1008.37 would be revised

to read as follows:

§ 1008.37 Disclosure of ownership and

related information.

Each individual or entity requesting

an advisory opinion must supply full

and complete information as to the

identity of each entity owned or

controlled by the individual or entity,

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.

(Approved by the Office of Management

and Budget under control number 0990–

0213)

Dated: May 31, 2000.

Michael F. Mangano,

Principal Deputy Inspector General.

Approved: June 29, 2000.

Donna E. Shalala,

Secretary.

[FR Doc. 00–26736 Filed 10–19–00; 8:45 am]

BILLING CODE 4152–01–P