63634 Federal Register / Vol. 60, No. 238 / Tuesday, December 12, 1995 / Rules and Regulations

EPA is limiting the duration of this

approval to 18 months following

promulgation by EPA of the section

112(g) rule.

3. Program for Delegation of Section 112

Standards as Promulgated

EPA is promulgating approval under

section 112(l)(5) and 40 CFR section

63.91 of NDEP’s program for receiving

delegation of section 112 standards that

are unchanged from federal standards as

promulgated. EPA is approving NDEP’s

delegation mechanism for part 70 and

non-part 70 sources.

III. Administrative Requirements

A. Docket

Copies of NDEP’s submittal and other

information relied upon for the final

interim approval, including public

comment letters received and reviewed

by EPA on the proposal, are contained

in docket number NV–DEP–95–1–OPS

maintained at the EPA Regional Office.

The docket is an organized and

complete file of all the information

submitted to, or otherwise considered

by, EPA in the development of this final

interim approval. The docket is

available for public inspection at the

location listed under the ADDRESSES

section of this document.

B. Executive Order 12866

The Office of Management and Budget

has exempted this action from review

under Executive Order 12866 review.

C. Regulatory Flexibility Act

The EPA’s actions under section 502

of the Act do not create any new

requirements, but simply address

operating permit programs submitted to

satisfy the requirements of 40 CFR part

70. Because this action does not impose

any new requirements, it does not have

a significant impact on a substantial

number of small entities.

D. Unfunded Mandates

Under Section 202 of the Unfunded

Mandates Reform Act of 1995

(‘‘Unfunded Mandates Act’’), signed

into law on March 22, 1995, EPA must

prepare a budgetary impact statement to

accompany any proposed or final rule

that includes a federal mandate that

may result in estimated costs to state,

local, or tribal governments in the

aggregate; or to the private sector, of

$100 million or more. Under Section

205, EPA must select the most costeffective and least burdensome

alternative that achieves the objectives

of the rule and is consistent with

statutory requirements. Section 203

requires EPA to establish a plan for

informing and advising any small

governments that may be significantly

or uniquely impacted by the rule. EPA

has determined that the approval action

promulgated today does not include a

federal mandate that may result in

estimated costs of $100 million or more

to either state, local, or tribal

governments in the aggregate, or to the

private sector. This federal action

approves pre-existing requirements

under state or local law, and imposes no

new federal requirements. Accordingly,

no additional costs to state, local, or

tribal governments, or to the private

sector, result from this action.

List of Subjects in 40 CFR Part 70

Environmental protection,

Administrative practice and procedure,

Air pollution control, Hazardous

substances, Intergovernmental relations,

Operating permits, and Reporting and

recordkeeping requirements.

Authority: 42 U.S.C. sections 7401–7671q.

Dated: December 1, 1995.

Felicia Marcus,

Regional Administrator.

* * * * *

Part 70, title 40 of the Code of Federal

Regulations is amended as follows:

PART 70—[AMENDED]

1. The authority citation for part 70

continues to read as follows:

Authority: 42 U.S.C. 7401, et seq.

2. Appendix A to part 70 is amended

by adding paragraph (a) to the entry for

Nevada:

Appendix A to Part 70—Approval

Status of State and Local Operating

Permits Programs

* * * * *

The following state program was

submitted by the Nevada Division of

Environmental Protection:

(a) Nevada Division of Environmental

Protection: submitted on February 8,

1995; interim approval effective on

January 11, 1996; interim approval

expires January 12, 1998.

* * * * *

[FR Doc. 95–30261 Filed 12–11–95; 8:45 am]

BILLING CODE 6560–50–P

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Office of Inspector General

42 CFR Part 1004

RIN 0991–AA73

Health Care Programs: Fraud and

Abuse; Revisions to the PRO

Sanctions Process

AGENCY: Office of Inspector General

(OIG), HHS.

ACTION: Final rule.

SUMMARY: This final rule revises and

updates the procedures governing the

imposition and adjudication of program

sanctions predicated on

recommendations of State Utilization

and Quality Control Peer Review

Organizations (PROs). These changes

are being made as a result of statutory

revisions designed to address health

care fraud and abuse issues and the OIG

sanctions process. In addition, this final

rule sets forth new appeal and

reinstatement procedures for

practitioners and other persons

excluded by the OIG based on a PRO

recommendation.

EFFECTIVE DATE: December 12, 1995.

FOR FURTHER INFORMATION CONTACT:

Joe J. Schaer, Office of Management and

Policy, (202) 619–3270

Joanne Lanahan, Office of Civil Fraud

and Administrative Adjudication,

(410) 786–9609.

SUPPLEMENTARY INFORMATION:

I. Background

A. The PRO Sanctions Process

Section 1156 of the Social Security

Act imposes specific statutory

obligations on practitioners and other

persons to furnish necessary services to

Medicare and State health care program

beneficiaries that meet professionally

recognized standards, and authorizes

the Secretary—based on a PRO’s

recommendation—to impose sanctions

on those who fail to comply with these

statutory obligations.

Under the PRO sanctions process, no

practitioner or other person is

recommended for an exclusion or a

monetary penalty until the practitioner

or other person has an opportunity to

provide additional information and

have an extensive discussion with the

PRO. After the receipt of a

recommendation from a PRO, the OIG

excludes or imposes a monetary penalty

only after a careful review of all

submitted documents and a separate

determination that the practitioner or
Federal Register / Vol. 60, No. 238 / Tuesday, December 12, 1995 / Rules and Regulations 63635

1 If a PRO decides to use any of the violations

identified during a corrective action plan as a basis

for a pending recommendation for sanction, instead

of a basis to support unwillingness or inability, the

PRO must send out a notification on these

violations in accordance with § 1004.40.

other person (1) violated the statutory

obligations to render medically

necessary and appropriate care or failed

to provide evidence of medical

necessity and quality, and (2) was

unwilling or unable to comply with

these obligations. A practitioner or other

person who is excluded from Medicare

and any State health care programs, or

assessed a monetary penalty, on the

basis of a PRO finding is entitled to

administrative and judicial review after

such sanction is assessed.

B. Summary of Recent Statutory

Changes

A number of recent statutory changes

have resulted in revisions to section

1156 of the Act—

Public Law 100–93: Section 6 of the

Medicare and Medicaid Patient and

Program Protection Act extended the

obligation to provide appropriate and

medically necessary care that meets

professionally recognized standards of

quality, and the obligation to ensure that

the care is appropriately documented, to

encompass all health care services for

which payment may be made under the

Act, and not just Medicare. In addition,

the exclusion authority under section

1156 of the Social Security Act was

extended to encompass violations

occurring in, and exclusions from, the

State health care programs.

Public Law 100–203: Section 4095 of

the Omnibus Budget Reconciliation Act

(OBRA) of 1987 provided that an

exclusion of a practitioner or other

person who practices in a county of less

than 70,000 people or in a rural health

professional shortage area (HPSA)

cannot be effectuated until an

opportunity for a preliminary

administrative hearing is provided and,

if requested, the administrative law

judge (ALJ) determines that the

practitioner or other person will pose a

serious risk to beneficiaries if permitted

to continue furnishing services during

the appeals process.

Public Law 101–508: Section 4205 of

OBRA 1990 set forth new statutory

requirements for PROs, where

appropriate, to offer a corrective action

plan (CAP) to practitioners and other

persons prior to making a finding; and,

in determining whether a practitioner or

other person is willing and able to

comply with his or her obligations,

require the Secretary to consider

whether they entered into and

successfully completed a CAP prior to

the PRO’s submission of a

recommendation and report to the

Secretary.

Public Law 103–432: Section 156 of

the Social Security Act Amendments of

1994 set forth the requirement that if a

PRO, after reasonable notice and

opportunity for discussion with the

physician or practitioner concerned,

finds that the physician or practitioner

has furnished services in violation of

section 1156(a) of the Act and

determines that the physician or

practitioner should enter into a CAP

under section 1156(b)(1), the PRO will

notify the State board(s) responsible for

the licensing or disciplining of the

physician or practitioner of its finding

and of any action taken as a result of the

finding. (See discussion regarding

§ 1004.70 under the Response to the

Public Comments section regarding use

of the term ‘‘physician and

practitioner.’’)

II. Summary of the Proposed

Regulations

On February 28, 1994, the OIG

published a notice of proposed

rulemaking in the Federal Register that

set forth a comprehensive rewrite of 42

CFR part 1004 consistent with the

statutory revisions and other proposed

procedures and recommendations. The

proposed regulations were specifically

designed to revise and update the

administrative procedures for the

imposition and adjudication of the PRO

sanctions process. The proposed

regulations addressed revisions in three

broad areas: (1) Procedural changes

resulting from the OBRA 1990

provisions, (2) the establishment of

preliminary hearings for practitioners

and other persons in rural areas or

counties, and (3) an alternative

sanctions notification process.

A. The OBRA 1990 Provisions Relating

to PRO’s

Among other things, the proposed

regulations provided for—

• The elimination of the procedural

distinction between ‘‘substantial’’

violations and ‘‘gross and flagrant’’

violations.

• The use of any violations of the

obligations identified during a CAP

period in support of the PRO’s

recommendation regarding a

practitioner’s or other person’s

unwillingness or inability to comply

with statutory obligations.1

• The inclusion of a provision that no

physician member of the PRO panel

may be in direct competition with, or

have a substantial bias for or against, the

practitioner or other person being

considered for sanction.

• The revision of § 1004.30(e) by

setting forth instructions to PROs on the

actions to be taken when a physician

relocates after receiving a sanction

notice.

• The inclusion of any prior problems

that any State health care program has

had with a practitioner or other person

as an additional factor to be considered

by the OIG in imposing an exclusion.

B. Preliminary Hearings

The proposed regulations also set

forth provisions to allow a practitioner

or other person in specified rural areas

or counties of a specified population to

request a preliminary hearing when

notified by the OIG of an exclusion from

participation in the Medicare program

resulting from a PRO recommendation.

The preliminary hearing would be

solely on the issue of whether such

practitioner’s or other person’s

continued participation in the program

during the appeal to an ALJ would place

program beneficiaries at serious risk.

Entitlement to such a preliminary

hearing would apply to practitioners

and other persons for whom an

exclusion is proposed who practice in a

rural HPSA for their specialty or in a

county with a population of less than

70,000. A practitioner’s or other

person’s practice was considered to be

where over 50 percent of his, her or its

services were rendered. The proposed

regulations provided that a

practitioner’s or other person’s request

for a preliminary hearing must be

received within 15 days of receipt of an

OIG exclusion notice.

C. Sanctions Notification Process

The proposed regulations set forth an

alternative sanctions notification

process that would allow sanctioned

practitioners and other persons the

option of informing all their patients

directly of the sanction action taken

against them. If they selected this option

and complied with its requirements in

a timely fashion, sanctioned

practitioners and other persons would

be exempted from current requirement

for public notice.

Under this proposed option,

practitioners and other persons would

be required to certify to the Department

that they have taken action to inform all

their patients of the sanction and, in the

case of exclusion, that they would notify

new patients before furnishing services.

Each sanctioned practitioner or other

person opting for this alternative notice

procedure would have to alert both

existing patients and all new patients

through written notification based on a

suggested, non-mandatory model that

would be provided by the OIG. For
63636 Federal Register / Vol. 60, No. 238 / Tuesday, December 12, 1995 / Rules and Regulations

those sanctioned practitioners or other

persons not electing this alternative

method or failing to return the required

certification form within the proposed

30-day period, the OIG would follow its

standard procedure for public

notification.

III. Response to the Public Comments

As a result of the proposed

rulemaking published on February 28,

1994, the OIG received a total of 12

timely-filed public comments from

various practitioners and providers,

medical and professional associations,

third party payers, peer review

organizations and other interested

parties.

Set forth below is a summary of those

comments and our response to the

issues and concerns raised.

Section 1004.1—Scope and Definitions

Comment: Three commenters stated

that the term ‘‘gross and flagrant’’ was

confusing, and as currently defined, has

been erroneously interpreted to permit

the Department and the PROs to focus

on the outcome of the procedure and

not on the degree of the violation. The

commenters believed that under the

existing definition the PROs have been

given broad authority to arbitrarily

determine that any given quality

concern is potentially sanctionable, and

that this, in turn, has lead to the

initiation of the sanction process in

some questionable cases.

Response: We believe it is important

to retain the present definition and

classification for the term ‘‘gross and

flagrant’’ so that the severity of the

violation can be demonstrated. While

we have considered alternative

definitions for defining this term, we

believe that the current classification

adequately and properly reflects the

severity of the violation of the

obligation(s) and the risk to the

patient(s) which has already been

identified. As to one commenter’s

suggestion that the patient must be

‘‘harmed’’ before a violation can be

considered gross and flagrant, we

disagree. We believe that a gross and

flagrant violation includes those

situations where a patient is placed in

danger or in a high-risk situation,

whether or not the patient is harmed.

Thus, we are retaining the current

definition.

Comment: While agreeing that there

needs to be a definition for the term

‘‘pattern of care,’’ one commenter was

concerned that the definition for

‘‘substantial violation in a substantial

number of cases’’—which encompasses

the requirement that there be an

inappropriate pattern of care—has been

interpreted to support a finding of a

substantial violation exclusively on the

basis of multiple allegations of

treatment deficiencies in a single

patient. The commenter believes this is

unfair since, while a physician’s course

of treatment with respect to one patient

may be alleged to be negligent, the

treatment of a single individual does not

indicate the ‘‘pattern’’ of professional

negligence that the law was designed to

address.

Response: We agree with the

commenter’s concern and have revised

the definition of ‘‘pattern of care’’ in

substantial violation cases to mean that

the care under question has been

demonstrated in more than 3 instances,

which must involve different

admissions. Under this revised

definition, the instances could involve

the same patient but reflect problems

with the treatment occurring at different

times. This is in contrast with the

definition of gross and flagrant

violations in which multiple violations

may be found within the same

admission.

Comment: One commenter objected to

our defining the term ‘‘practice area’’ as

‘‘the location where over 50 percent of

the practitioner’s or other person’s

patients are seen,’’ and requested that

the definition be deleted. The

commenter believed that a practitioner

who has any amount of practice in a

rural area should be entitled to a

preliminary hearing on the issue of

whether that person’s continued

participation during the appeal of the

exclusion would place program

beneficiaries at serious risk.

Response: We are rejecting this

comment since we believe it is not

consistent with the statutory provision

and congressional intent in providing

for such preliminary hearings. If

Congress wanted to extend the right to

a preliminary hearing to all, or virtually

all, practitioners and other persons, it

would have done so in the statutory

language. Rather, the statute and these

regulations are targeted only to those

who ‘‘practice’’ in a HPSA or a county

with a population of less than 70,000,

and not those who may occasionally see

a patient in a rural area. In order to carry

out the intent of the statutory provision,

we believe that the definition for the

term ‘‘practice area’’ is appropriate, fair

and reasonable.

Section 1004.40—Action on

Identification of a Violation

Comment: While several commenters

strongly supported the OIG’s proposal to

eliminate the distinction between

‘‘substantial’’ violations and ‘‘gross and

flagrant’’ violations, one commenter

believed that the elimination of this

distinction would result in less due

process by removing the physician’s

right to receive two notices and two

hearings for any violation.

Response: As noted in the proposed

rule, the second meeting in substantial

violation cases has proven simply to be

a repeat of the initial or 20-day meeting.

This, in turn, has increased the risk of

serious patient harm due to this

procedural delay. Experience has shown

that this dual meeting process has

tended to be cumbersome, timeconsuming and confusing to both the

physician responding to substantial

violations issues and the physician

members of the PRO’s sanction panel.

The OIG believes that this approach to

eliminating the violations’ distinction

will serve program beneficiaries well

while still continuing to provide

adequate due process to all practitioners

and other persons.

Comment: One commenter strongly

agreed with the additional safeguards

under § 1004.40 that state that the notice

must contain information regarding the

meeting, that an attorney may represent

the practitioner, and that the attorney

may make opening and closing remarks,

ask clarifying questions at the meeting

and assist the practitioner in presenting

testimony of expert witnesses who may

appear on behalf of the practitioner.

However, the commenter believed that

the notice should also contain a

provision stating that the attorney may

also cross-examine any physician or

other expert who provided evidence

upon which the PRO relied in

identifying a potential violation under

§ 1004.10.

Response: We do not agree with the

commenter’s recommendation under

§ 1004.40 that notice should also

include a provision that would allow

attorney cross-examination. The

meeting between the PRO and the

practitioner or other person is not a

formal adversarial hearing or trial.

Rather, this meeting serves only as a

medical dialogue to afford the

practitioner or other person an

opportunity to discuss medical issues.

Comment: Under § 1004.40, when a

PRO identifies a violation, it must send

a notice to the practitioner or provider

identifying the specific concerns. One

commenter stated that, while

traditionally it has been up to the

provider or practitioner to initiate a CAP

before the PRO would consider it, this

rule change places the obligation on the

PRO to initiate resolution through a

CAP. The commenter questioned

whether the absence of a CAP in the

notice constituted a determination by

the PRO that the case cannot, at that
Federal Register / Vol. 60, No. 238 / Tuesday, December 12, 1995 / Rules and Regulations 63637

time, be resolved with a CAP, and

opined that if a CAP is not considered

appropriate, perhaps the notice should

state this along with the reasons why.

The commenter also wanted the

practitioner or provider to be given an

opportunity to submit additional

information within 15 days of receipt of

notice without, at the same time, having

to decide to request a meeting.

Response: With regard to the use of a

CAP, we believe that there are times

when the PRO will not know if, or what

type of, a CAP is appropriate until they

have met with or heard from the

practitioner or other person in response

to the letter. We are, therefore,

dissuaded by the comment raised. With

regard to the commenter’s second point,

before the PRO sends out a notice under

this regulatory process, the practitioner

or other person is given at least one and,

in most instances, two opportunities to

present clarifying information.

Therefore, we do not believe that

another opportunity such as that

proposed by the commenter would be

necessary.

Comment: One commenter indicated

concern with the proposed language in

§ 1004.40(b)(5) that stated the PRO must

advise the practitioner or other person

of ‘‘the sanction that the PRO could

recommend to the OIG if the violation

continues’’ (italic added). The phrase ‘‘if

the violation continues’’ is not

contained in the current ‘‘gross and

flagrant’’ notice, and the commenter

believed that the use of these words in

the regulations would prevent an

exclusion recommendation by the PRO

in the most egregious of circumstances

if the PRO cannot document that the

violation continues. The commenter

specifically recommended that this

phrase be deleted.

Response: We agree with the

commenter and are deleting this

wording from § 1004.40(b)(5).

Section 1004.50—Meeting With a

Practitioner or Other Person

Comment: Several commenters

strongly agreed with the codification of

the requirement that no physician

member of the PRO panel may be in

direct competition with, or have a

substantial bias against, the practitioner

or other person being considered for

sanction. One commenter urged,

however, that this section be expanded

to include specific reference to the right

of the practitioner’s attorney to crossexamine any reviewing physician who

has made recommendations to the PRO

regarding the quality of care rendered by

the practitioner under review. The

commenter also raised concern over the

lack of a requirement that physicians

providing expertise to the PRO in regard

to the sanction investigation or other

proceedings be in the same specialty as

the practitioner under review.

Response: As discussed above, we do

not believe that it is necessary that the

physician’s attorneys have the

opportunity to cross-examine physician

panel members. The meeting between

the PRO and the physician or other

person is not a formal adversarial

hearing or trial. Rather, it is intended to

remain merely a medical dialogue

designed to afford the practitioner or

other person an opportunity to discuss

medical issues. With respect to the

suggestion that the medical professional

providing expertise be of the same or

closely related specialty and be

practicing in similar circumstances to

the practitioner under review, we

believe that proposed section (d) of this

section satisfies this specific concern.

Specifically, § 1004.50(d) states that at

least one member of the PRO panel

meeting with the practitioner or other

person should practice in a similar

geographic area, and at least one

member of the panel must be in the

same specialty. Both requirements can

be met by a single individual.

Comment: One commenter asked that

the composition of the sanctions panel

be expanded to include persons trained

and experienced in ‘‘hospital issues’’

before any hospital can be appropriately

subject to a sanction.

Response: Since the obligations with

regard to any violation involve medical

quality of care issues, necessary services

and medical documentation, we remain

unclear as to what unique ‘‘hospital

issues’’ are involved. As set forth, we

believe that the changes contained in

the rulemaking adequately remove any

bias from addressing the pertinent

issues in the ongoing sanction process.

Comment: Section 1004.50(g)

provides that, when a practitioner or

other person requests a meeting with the

PRO, ‘‘[t]he PRO may allow the

practitioner or other person 5 working

days after the meeting to provide the

PRO additional relevant information

that may affect its decision * * *.’’ One

commenter suggested that 5 working

days was not adequate time for a

practitioner to provide additional

information to the PRO, and that 14

days would be a more reasonable

amount of time.

Response: We believe that the 5-day

period granted to provide additional

information after the meeting is

adequate. We believe that the

practitioner or other person has been

afforded several opportunities up to this

point to provide additional information,

and that 5 days, consistent with the

American Medical Association (AMA)

understanding, is sufficient in this

instance.

Comment: One commenter indicated

that the terms ‘‘determination,’’

‘‘decision’’ and ‘‘finding’’ are used

interchangeably in §§ 1004.40 and

1004.50, and requested that the terms

‘‘determination’’ and ‘‘decision’’ be

eliminated and the term ‘‘finding’’ be

used consistently throughout.

Response: We agree with the

commenter’s concern, and to be

consistent throughout these sections, we

are deleting the terms ‘‘decision’’ and

‘‘determination’’ by a PRO and inserting

the word ‘‘finding’’ in its place.

Section 1004.60—PRO Finding of a

Violation

Comment: One commenter requested

that we specifically clarify the term

‘‘issue’’ in this section, and specify

when it has been resolved since no clear

distinction is made between a ‘‘issue,’’

a ‘‘determination’’ and a ‘‘finding.’’ In

addition, the commenter asked that the

last sentence in § 1004.60(a) be

eliminated and a new sentence to

paragraph (b) stating that ‘‘(T)he PRO

may, on the basis of the additional

information, modify either its finding or

recommendation or close the case.’’

Response: While we have agreed to

replace the term ‘‘issue’’ with the word

‘‘finding,’’ there remain numerous ways

for a ‘‘finding’’ to be resolved by a PRO

and believe it would not be appropriate

in these regulations to attempt to

attempt further clarification of this term.

With regard to the commenter’s second

point, we have agreed instead to modify

the language in paragraph (a). As

revised, the language in § 1004.60(a)

will state that ‘‘(I)f the finding has been

resolved to the PRO’s satisfaction, the

PRO may modify its initial finding or

recommendation or close the case.’’

Section 1004.70—PRO Action on Final

Finding of a Violation

Comment: A commenter stated that in

§ 1004.70(c) the word ‘‘physician’’

should be replaced with the phrase

‘‘physician or other person’’ to be

consistent with other references found

elsewhere in these regulations.

Response: We agree that a revision to

this section is appropriate. In addition,

a technical correction is being made

over language in section 1154(a)(9)(B) of

the Act resulting from Pub. L. 103–432.

With regard to the requirement that the

PRO notify licensure boards for

practitioners other than physicians

when it submits a report and

recommendation to the OIG, section

1154(a)(9)(B) of the Social Security Act,

as recently amended by Pub. L. 103–
63638 Federal Register / Vol. 60, No. 238 / Tuesday, December 12, 1995 / Rules and Regulations

432, provides that if a PRO finds that a

‘‘physician or practitioner has furnished

services in violation of section 1156(a)

and the organization determines that the

physician or practitioner should enter

into a corrective action plan under

section 1156(b)(1), the organization

shall notify the State board or boards

responsible for the licensing or

disciplining of the physician or

practitioner of its finding and of any

action taken as a result of the finding.’’

The Secretary may require by

regulation that the PRO notify

appropriate licensure boards for nonphysician practitioners when those

practitioners are found in violation.

Accordingly, we are revising

§ 1004.70(c) to include notification by

the PRO of appropriate licensure boards

when it sends a report to the OIG

regarding a physician or other person.

Section 1004.100—Acknowledgement

and Review of Report

Comment: While a number of

respondents concurred with the content

of this section, one commenter stated

that if the OIG believes that a particular

sanction recommendation is not

warranted, procedures should be in

place for the OIG to discuss the matter

with the PRO before making a final

decision. Accordingly, the commenter

requested that we add a provision

requiring the OIG physician advisor to

communicate with one or more of the

physicians on the PRO panel.

Response: We disagree with the need

for this added requirement. We believe

such communication on the part of the

OIG physician advisor could raise

specific concerns of due process. There

would be no clear way for the

practitioner or other person to be made

aware of the questions raised and the

responses made by the PRO through

such communication. In addition, since

the PRO has provided all the

documentation on which it has based its

recommendation, we believe that it is

unnecessary for such discussion to

occur prior to the OIG making a

decision.

Section 1004.110—Notice of Sanction

Comment: Two commenters strongly

opposed any alternative notification

process for sanctions. One of the

commenters indicated that an option of

allowing the physician to notify

privately both his or her existing and

new patients does not adequately

protect the public interest. While

acknowledging the OIG’s concerns that

the current public notification may not

be effectively reaching all of the

physician’s patients, the commenter

stated that the same risk exists with

private notification and, therefore,

suggested that private notification be

mandatory and that it be used in

addition to the current public

notification process.

Response: We believe that the present

public notification process has not

yielded the most effective results of

informing affected parties and program

beneficiaries of a specific sanction

action taken under the program. As a

result of preliminary discussions with

the AMA, the American Association of

Retired Persons (AARP) and the Health

Care Financing Administration, we

believe that this approach, with built-in

safeguards such as the certification of

patient notice, would afford both the

provider community and the patient

community with an alternative for

disseminating information regarding

program sanctions. By definition, this

alternative approach will offer a second

options for public notification. Any

effort to require both newspaper

publication and direct notice to a

physician’s patients would, in effect,

not offer an alternative as we have

contemplated, but rather impose an

additional layer of burden on the

practitioner or other person. Our intent

is for such notice to be both effective

and cost-efficient, and we believe that

this approach will meet those

objectives. In addition, as indicated in

the preamble to the proposed rule,

where the OIG receives reliable

evidence that a practitioner or other

person has not adequately informed his,

her or its new and existing patients of

the sanction, the OIG reserves the right

to follow existing procedures for public

notification. Failure by the practitioner

or other person to comply with the

alternative method of notification once

he, she or it has elected to do so will

be adversely considered by the OIG at

the time of application for

reinstatement.

Comment: While supportive of the

alternative notification process, two

commenters requested that the

regulations also include a requirement

that the OIG receive a copy of the notice

sent to each patient to determine its

adequacy, or include in the regulations

certain minimum requirements for the

content of such notice. One commenter

recommended that if providers are

allowed to create their own letters, then

it should be required that the letters be

reviewed and approved first by the OIG

prior to the provider sending them to

the patients.

Response: We believe that the

requirements that were set forth in

proposed § 1004.110(d) with regard to

patient notification and certification are

adequate. As indicated, the OIG will

provide the sanctioned practitioner or

other person a suggested model letter

designed to address the nature of the

sanction, as well as the exclusion’s

effective date and duration. In turn, the

practitioner or other person is to

specifically certify to the OIG that the

information provided is truthful and

accurate. Failure to properly inform

one’s patients and return to the required

certification to the OIG within 30 days,

or the obtaining of reliable evidence by

the OIG that the practitioner or other

person failed to adequately inform

patients of the sanction, will result in

the publication of a public notice and

will be considered an aggravating factor

at the time of the practitioner’s or other

person’s application for reinstatement.

As a result, we do not believe that the

use of additional OIG staff time in

reviewing such individuals letters is

necessary.

Comment: In order to have each

practitioner or other person in full

compliance with the alternative

notification approach, one commenter

asked that the term ‘‘all existing

patients’’ be cleared defined. In

addition, the commenter questioned

how notice to a new patient presenting

himself or herself for emergency care

would be handled, and whether such

required notice would impede the

provision or quality of care to such

patients.

Response: We agree that the term ‘‘all

existing patients’’ could be interpreted

in different ways. In doing so, we

believe it is necessary to balance our

intent of assuring that proper notice is

provided to the largest possible

spectrum of program beneficiaries that

may be affected by this sanction,

without insurmountable burdens being

placed on practitioners and other

persons to contact their affected patient

base. For this reason, we have agreed to

define the term ‘‘all existing patients’’ to

include all patients currently under

active treatment with the practitioner or

other person, as well as all patients who

have been treated by the practitioner or

other person within the last three years.

We believe that this definition will

provide adequate notification of the

sanction to those most likely to be

affected by it while assuring that this

alternative approach remains a viable,

effective option.

Patients being treated in an

emergency situation could be notified

verbally at the point they seek

treatment, and since excluded

physicians and others can be paid for

emergency services, we do not believe

this to result in a significant quality of

care problem.
Federal Register / Vol. 60, No. 238 / Tuesday, December 12, 1995 / Rules and Regulations 63639

Comment: One commenter believed

that effective monitoring and validation

of timely and complete compliance with

this notice option by the OIG would be

very difficult. A second commenter

stated that monitoring this option

should include a signed statement of

completion by the sanctioned provider

and a follow-up mail survey of a sample

of patients to determine if the

requirements were met.

Response: The issue of ensuring that

direct patient notification is enforced

was given full consideration during the

development of the alternative

notification process. Specifically, we do

not foresee expending and designating

an excessive amount of staff time to

directly monitor the alternative

notification process. Rather, when the

OIG learns through patient complaints

or other methods that the practitioner or

other person has not fully complied, it

will at that point taken an action to

remedy the situation, such as pursuing

penalties for the filing of a false

statement.

Comment: One commenter

recommended that since PRO activity

relates only to Medicare patients, the

alternative notification process should

be limited to Medicare patients only.

Response: Our rationale for selecting

notification to all patients rests with the

statutory requirement for ‘‘reasonable

notice to the public’’ (underlining

added). U.S.C. 1320c–5(b)(2). We

believe that such proper public notice

would not be met by having sanctioned

parties limit notice to only their

program-eligible patients. This selected

option is designed to protect both

Medicare program beneficiaries and

future beneficiaries, and to ensure that

the statutorily-required notice to the

public of a sanction action is as effective

as possible. As a result, in an effort to

achieve proper notification and public

awareness in an effective manner, we

have opted to require that alternative

notification be given to all patients.

Comment: While supportive of the

alternative sanctions notification

process, one commenter believed that

the requirement that hospitals post a

sign ‘‘in all affiliated entities’’ needs to

be clarified to indicate what would be

required of a hospital electing this

alternative approach.

Response: We agree with the

commenter over the need to define this

term. Accordingly, we are defining in

§ 1004.110(d)(1)(i) the term ‘‘in all

affiliated entities’’ to encompass all

entities and properties which provide

services and in which the hospital has

a direct or indirect ownership interest of

5 percent or more and any management,

partnership or control of the entity.

Comment: One commenter was

concerned with the timeframes

provided for in § 1004.110(b). That

section provides that ‘‘the sanction is

effective 15 days from the date of receipt

of the notice. The date of receipt is

presumed to be 5 days after the date on

the notice, unless there is a reasonable

showing to the contrary.’’ The

commenter believed that in order for the

provisions of this rule to be consistent,

the effective date of a sanction should

be 30 days from the date of the receipt

of the notice in order to allow the

sanctioned practitioner’s patients

adequate time to make other

arrangements.

Response: Section 1156(b)(2) of the

Social Security Act requires the

effective date of the sanction to be

consistent with section 1128(c) of the

Act. Therefore, we are retaining the

effective date as 20 days from the date

of notice.

Section 1004.140—Appeal Rights

Comment: The proposed regulations

provided that a request for a preliminary

hearing must be received within 15 days

of receipt of an OIG exclusion notice.

Two commenters indicated that they

did not believe 15 days is sufficient time

to request a preliminary hearing, with

one of these commenters suggesting that

providers be given 30 days, rather than

15 days, to request such a preliminary

hearing of a sanction.

Response: The OIG’s concern remains

with the protection of program

beneficiaries and with decisions being

reached in a timely and efficient

manner. Accordingly, we believe that

since the practitioner or other person

continues to participate in the program

until the time period for requesting a

preliminary hearing has expired or a

decision is made after a preliminary

hearing, this process must be

expeditious. Since all notices of

exclusion under § 1004.110 are sent by

overnight mail, we continue to believe

that 15 days is sufficient time to request

a preliminary hearing when desired.

Comment: The proposed regulations

provided for a preliminary hearing prior

to exclusion ‘‘if the location where

services are rendered to over 50 percent

of the practitioner’s or other person’s

patients at the time of the exclusion

notice is in a rural HPSA or in a county

where the population is less than

70,000.’’ Citing that it is contrary to the

public’s interest to impose a specific,

quantitative requirement on the amount

of services that a practitioner provides

in a rural area as a condition for

eligibility for a hearing, one commenter

disagreed with limiting the right to a

preliminary hearing to physicians where

over 50 percent of their practice is

located in such a rural area.

Further, a second commenter

indicated that they believe it would be

difficult in many instances for the PRO

to determine where 50 percent of the

practitioner’s practice is located.

Response: Section 1156(a) of the Act

specifically limits the right to a

preliminary hearing to those physicians

who practice in a county with a

population of less than 70,000 or those

practicing in a HPSA. The statutory

language was intentionally limiting and

did not provide the right to such a

hearing to every practitioner or other

person who may occasionally provide a

service in a rural HPSA. We believe that

the ‘‘over 50 percent’’ standard is

reasonable and is in keeping with the

statutory intent.

Comment: One commenter believed

that there should be an additional

regulatory requirement that the OIG

notify the PRO when a sanction appeal

is made. The commenter believed that

they should have this knowledge so that

they can participate with and assist the

OIG through the administrative appeal

process.

Response: The OIG does not receive

specific notification when a sanction is

being appealed and, therefore, it cannot

routinely notify the PRO of such action.

In most cases, it is the Regional

Counsel’s office that notifies the PRO so

that it can prepare the defense of the

practitioner’s or other person’s

exclusion action.

IV. Technical Revisions to 42 CFR Part

1004

In addition to the public comments

received on the proposed rulemaking,

the OIG received a number of internal

technical comments from two of the

Department’s Regional Counsel’s offices.

These comments and recommendations

for change were designed to further

clarify specific aspects of the regulatory

language set forth in 42 CFR part 1004,

and are technical, non-substantive and

editorial in nature. We have adopted a

number of these suggestions and have

incorporated them into the revised text

for part 1004 set forth below.

V. Regulatory Impact Statement

The Office of Management and Budget

has reviewed this final rule in

accordance with the provisions of

Executive Order 12866. As indicated

above, the revisions contained in this

final rule are intended to revise and

update administrative procedures

governing the imposition and

adjudication of program sanctions,

based on PRO recommendations, against

practitioners and other persons who
63640 Federal Register / Vol. 60, No. 238 / Tuesday, December 12, 1995 / Rules and Regulations

violate the statute. We believe that the

great majority of practitioners and other

persons do not engage in such

prohibited activities and practices, and

that the aggregate economic impact of

these provisions should, in effect, be

minimal, affecting only those who have

engaged in prohibited behavior in

violation of statutory intent. As such,

these regulations should have no direct

effect on the economy or on Federal or

State expenditures.

In addition, in accordance with the

Regulatory Flexibility Act (5 U.S.C. 601

through 612), the Secretary certifies that

this final rulemaking will not have a

significant economic impact on a

substantial number of small entities.

While some sanctions and penalties

may have an impact on small entities,

we do not anticipate that a substantial

number of these small entities would be

significantly affected by this

rulemaking. Therefore, we have

determined, and the Secretary certifies,

that this final rule should not have a

significant economic impact on a

number of small business entities.

List of Subjects in 42 CFR Part 1004

Administrative practice and

procedure, Health facilities, Health

professions, Medicare, Peer Review

Organizations, Penalties, Reporting and

recordkeeping requirements.

Part 1004 is revised to read as follows:

PART 1004—IMPOSITION OF

SANCTIONS ON HEALTH CARE

PRACTITIONERS AND PROVIDERS OF

HEALTH CARE SERVICES BY A PEER

REVIEW ORGANIZATION

Subpart A—General Provisions

Sec.

1004.1 Scope and definitions.

Subpart B—Sanctions Under the PRO

Program; General Provisions

1004.10 Statutory obligations of

practitioners and other persons.

1004.20 Sanctions.

Subpart C—PRO Responsibilities

1004.30 Basic responsibilities.

1004.40 Action on identification of a

violation.

1004.50 Meeting with a practitioner or

other person.

1004.60 PRO finding of a violation.

1004.70 PRO action on final finding of a

violation.

1004.80 PRO report to the OIG.

1004.90 Basis for recommended sanction.

Subpart D—OIG Responsibilities

1004.100 Acknowledgement and review of

report.

1004.110 Notice of sanction.

Subpart E—Effect and Duration of

Exclusion

1004.120 Effect of an exclusion on program

payments and services.

1004.130 Reinstatement after exclusion.

Subpart F—Appeals

1004.140 Appeal rights.

Authority: 42 U.S.C. 1302 and 1320c–5.

Subpart A—General Provisions

§ 1004.1 Scope and definitions.

(a) Scope. This part implements

section 1156 of the Act by—

(1) Setting forth certain obligations

imposed on practitioners and providers

of services under Medicare;

(2) Establishing criteria and

procedures for the reports required from

peer review organizations (PROs) when

there is failure to meet those obligations;

(3) Specifying the policies and

procedures for making determinations

on violations and imposing sanctions;

and

(4) Defining the procedures for

appeals by the affected party and the

procedures for reinstatements.

(b) Definitions. As used in this part,

unless the context indicates otherwise—

Dentist is limited to licensed doctors

of dental surgery or dental medicine.

Economically means the services are

provided at the least expensive,

medically appropriate type of setting or

level of care available.

Exclusion means that items and

services furnished or ordered (or at the

medical direction or on the prescription

of a physician) by a specified health

care practitioner, provider or other

person during a specified period are not

reimbursed under titles V, XVIII, XIX, or

XX of the Social Security Act and all

other Federal non-procurement

programs.

Gross and flagrant violation means a

violation of an obligation has occurred

in one or more instances which presents

an imminent danger to the health,

safety, or well-being of a program

patient or places the program patient

unnecessarily in high-risk situations.

Health care service or services means

services or items for which payment

may be made (in whole or in part) under

the Medicare or State health care

programs.

Health professional shortage area

(HPSA) means an area designated by the

Secretary and defined in 42 CFR 5.2.

Metropolitan Statistical Area means

an area as defined by the Executive

Office of Management and Budget.

Obligation means any of the

obligations specified at section 1156(a)

of the Act.

Other person means a hospital or

other health care facility, an

organization or an agency that provides

health care services or which payment

may be made (in whole or in part) under

the Medicare or State health care

programs.

Pattern or care means that the care

under question has been demonstrated

in more than three instances, each of

which involved different admissions.

Pharmacy professional is a term

limited to individuals who are licensed

or registered to provide pharmaceutical

services.

Podiatric professional is a term

limited to licensed doctors of podiatric

medicine.

Practice area means the location

where over 50 percent of the

practitioner’s or other person’s patients

are seen.

Practitioner means a physician or

other health care professional licensed

under State law to practice his or her

profession.

Primary medical care professional is

a term limited to:

(i) Licensed doctors of medicine and

doctors of osteopathy providing direct

patient care who practice in the fields

of general or family practice, general

internal medicine, pediatrics, obstetrics

and gynecology, surgery, and any other

specialty that is not accommodated by

the remaining specialty HPSA

designator, or

(ii) Those facilities where care and

treatment is provided to patients with

health problems other than mental

disorders.

Pro area means the geographic area

subject to review by a particular PRO.

Provider means a hospital or other

health care facility, agency, or

organization.

Psychiatric professional is a term

limited to licensed doctors of medicine

who limit their practice to psychiatry or

to those facilities where care and

treatment is limited to patients with

mental disorders.

Rural means any area outside an

urban area.

Rural health professional shortage

area means any health professional

shortage area located outside a

Metropolitan Statistical Area.

Sanction means an exclusion or

monetary penalty that the Secretary may

impose on a practitioner or other person

as a result of a recommendation from a

PRO.

Serious risk includes situations that

may involve the risk of unnecessary

treatment, prolonged treatment, lack of

treatment, incorrect treatment, medical

complication, premature discharge,

physiological or anatomical impairment,

disability, or death.

State health care program means a

State plan approved under title XIX, any
Federal Register / Vol. 60, No. 238 / Tuesday, December 12, 1995 / Rules and Regulations 63641

program receiving funds under title V or

from an allotment to a State under such

title, or any program receiving funds

under title XX or from an allotment to

a State under such title.

Substantial violation in a substantial

number of cases means a pattern of

providing care, as defined in this

section, that is inappropriate,

unnecessary, or does not meet

recognized professional standards of

care, or is not supported by the

necessary documentation of care as

required by the PRO.

Urban means a Metropolitan

Statistical Area as defined by the

Executive Office of Management and

Budget.

Vision care professional is a term

limited to licensed doctors of medicine

who limit their practice to

ophthalmology and to doctors of

optometry.

Subpart B—Sanctions Under the PRO

Program; General Provisions

§ 1004.10 Statutory obligations of

practitioners and other persons.

It is the obligation of any health care

practitioner or other person who

furnishes or orders health care services

that may be reimbursed under the

Medicare or State health care programs

to ensure, to the extent of his or her or

its authority, that those services are—

(a) Provided economically and only

when, and to the extent, medically

necessary;

(b) Of a quality that meets

professionally recognized standards of

health care; and

(c) Supported by evidence of medical

necessity and quality in the form and

fashion and at such time that the

reviewing PRO may reasonably require

(including copies of the necessary

documentation and evidence of

compliance with pre-admission or preprocedure review requirements) to

ensure that the practitioner or other

person is meeting the obligations

imposed by section 1156(a) of the Act.

§ 1004.20 Sanctions.

In addition to any other sanction

provided under law, a practitioner or

other person may be—

(a) Excluded from participating in

programs under titles V, XVIII, XIX, and

XX of the Social Security Act; or

(b) In lieu of exclusion and as a

condition for continued participation in

titles V, XVIII, XIX, and XX of the Act,

if the violation involved the provision

or ordering (or at the medical direction

or the prescription of a physician) of

health care services that were medically

improper or unnecessary, required to

pay an amount not in excess of the cost

of the improper or unnecessary services

that were furnished or ordered (and

prescribed, if appropriate). The

practitioner or other person will be

required either to pay the monetary

assessment within 6 months of the date

of notice or have it deducted from any

sums the Federal government owes the

practitioner or other person.

Subpart C—PRO Responsibilities

§ 1004.30 Basic responsibilities.

(a) The PRO must use its authority or

influence to enlist the support of other

professional or government agencies to

ensure that each practitioner or other

person complies with the obligations

specified in § 1004.10.

(b) When the PRO identifies situations

where an obligation specified in

§ 1004.10 is violated, it will afford the

practitioner or other person reasonable

notice and opportunity for discussion

and, if appropriate, a suggested method

for correcting the situation and a time

period for a corrective action in

accordance with §§ 1004.40 and

1004.60.

(c) The PRO must submit a report to

the OIG after the notice and opportunity

provided under paragraph (b) of this

section and, if appropriate, the

opportunity to enter into and complete

a corrective action plan (CAP) if the

PRO finds that the practitioner or other

person has—

(1) Failed substantially to comply

with any obligation in a substantial

number of admissions; or

(2) Grossly and flagrantly violated any

obligation in one or more instances.

(d) The PRO report to the OIG must

comply with the provisions of

§ 1004.80.

(e) If a practitioner or other person

relocates to another PRO area prior to a

finding of a violation or sanction

recommendation, and the originating

PRO—

(1) Is able to make a finding, the

originating PRO must, as appropriate,

close the case or forward a sanction

recommendation to the OIG; or

(2) Cannot make a finding, the

originating PRO must forward all

documentation regarding the case to the

PRO with jurisdiction, and notify the

practitioner or other person of this

action.

(f) The PRO must deny payment for

services or items furnished or ordered

(or at the medical direction or on the

prescription of an excluded physician)

by an excluded practitioner or other

person when the PRO identifies the

services or items. It must report the

findings to the Health Care Financing

Administration.

§ 1004.40 Action on identification of a

violation.

When a PRO identifies a violation, it

must—

(a) Indicate whether the violation is a

gross and flagrant violation or is a

substantial violation in a substantial

number of cases; and

(b) Send the practitioner or other

person written notice of the

identification of a violation containing

the following information—

(1) The obligation(s) involved;

(2) The situation, circumstances or

activity that resulted in a violation;

(3) The authority and responsibility of

the PRO to report violations of any

obligation under section 1156(a) of the

Act;

(4) A suggested method for correcting

the situation and a time period for

corrective action, if appropriate;

(5) The sanction that the PRO could

recomment to the OIG;

(6) The right of the practitioner or

other person to submit to the PRO

within 30 days of receipt of the notice

additional information or a written

request for a meeting with the PRO to

review and discuss the finding, or both.

The date of receipt is presumed to be 5

days after the date on the notice, unless

there is a reasonable showing to the

contrary. The notice will also state that

if a meeting is requested—

(i) It will be held within 30 days of

receipt by the PRO of the request, but

may be extended for good cause;

(ii) The practitioner or other person

may have an attorney present; and

(iii) The attorney, if present, will be

permitted to make opening and closing

remarks, ask clarifying questions at the

meeting and assist the practitioner or

other person in presenting the testimony

of expert witnesses who may appear on

the practitioner’s or other person’s

behalf; and

(7) A copy of the material used by the

PRO in arriving at its finding except for

PRO deliberations, as set forth in

§ 476.139 of this part.

§ 1004.50 Meeting with a practitioner or

other person.

If the practitioner or other person

requests a meeting with the PRO—

(a) The PRO panel that meets with the

practitioner or other person must

consist of a minimum of 3 physicians;

(b) No physician member of the PRO

panel may be in direct economic

competition with the practitioner or

other person being considered for

sanction;

(c) The PRO must ensure that no

physician member of the PRO panel has
63642 Federal Register / Vol. 60, No. 238 / Tuesday, December 12, 1995 / Rules and Regulations

a substantial bias for or against the

practitioner or other person being

considered for sanction;

(d) At least one member of the PRO

panel meeting with the practitioner or

other person should practice in a similar

area, e.g., urban or rural, and at least one

member of the panel must be in the

same specialty (both requirements could

be met by a single individual);

(e) If the practitioner or other person

has an attorney present, that attorney

will be permitted to make opening and

closing remarks, ask clarifying questions

and assist the practitioner or other

person in presenting the testimony of

expert witnesses who may appear on the

practitioner’s or other person behalf;

(f) The physician who recommends to

the PRO that a practitioner or other

person be sanctioned may not vote on

that recommendation at the meeting;

(g) The PRO may allow the

practitioner or other person 5 working

days after the meeting to provide the

PRO additional relevant information

that may affect its finding; and

(h) A verbatim record must be made

of the meeting and must be made

available to the practitioner or other

person promptly.

§ 1004.60 PRO finding of a violation.

(a) On the basis of any additional

information received, the PRO will

affirm or modify its finding. If the PRO

affirms its finding, it may suggest in

writing a method for correcting the

situation and a time period for

corrective action. This CAP could

correspond with, or be a continuation

of, a prior CAP or be a new proposal

based on additional information

received by the PRO. If the finding has

been resolved to the PRO’s satisfaction,

the PRO may modify its initial finding

or recommendation or close the case.

(b) The PRO must give written notice

to the practitioner or other person of any

action it takes as a result of the

additional information received, as

specified in § 1004.70.

(c) At least one member of the PRO

participating in the process which

resulted in a recommendation to the

OIG that a practitioner or other person

be sanctioned should practice in a

similar geographic area, e.g. urban or

rural, and at least one member of the

panel must be in the same medical

specialty. Both requirements can be met

by a single individual. In addition, no

one at the PRO who is a participant in

such a finding may be in direct

economic competition with, or have a

substantial bias for or against, that

practitioner or other person being

recommended for sanction.

§ 1004.70 PRO action on final finding of a

violation.

If the finding is not resolved to the

PRO’s satisfaction as specified in

§ 1004.60(a), the PRO must—

(a) Submit its report and

recommendation to the OIG;

(b) Send the affected practitioner or

other person a concurrent final notice,

with a copy of all the material that is

being forwarded to the OIG, advising

that—

(1) The PRO recommendation has

been submitted to the OIG;

(2) The practitioner or other person

has 30 days from receipt of this final

notice to submit any additional written

material or documentary evidence to the

OIG at its headquarters location. The

date of receipt is presumed to be 5 days

after the date on the notice, unless there

is a reasonable showing to the contrary;

and

(3) Due to the 120-day statutory

requirement specified in § 1004.100(e),

the period for submitting additional

information will not be extended and

any material received by the OIG after

the 30-day period will not be

considered; and

(c) Provide notice to the State medical

board or to other appropriate licensing

boards for other practitioner types when

it submits a report and

recommendations to the OIG with

respect to a physician or other person

whom the board is responsible for

licensing.

§ 1004.80 PRO report to the OIG.

(a) Manner of reporting. If the

violation(s) identified by the PRO have

not been resolved, it must submit a

report and recommendation to the OIG

at the field office with jurisdiction.

(b) Content of report. The PRO report

must include the following

information—

(1) Identification of the practitioner or

other person and, when applicable, the

name of the director, administrator or

owner of the entity involved;

(2) The type of health care services

involved;

(3) A description of each failure to

comply with an obligation, including

specific dates, places, circumstances

and other relevant facts;

(4) Pertinent documentary evidence;

(5) Copies of written correspondence,

including reports of conversations with

the practitioner or other person

regarding the violation and, if

applicable, a copy of the verbatim

transcript of the meeting with the

practitioner or other person;

(6) The PRO’s finding that an

obligation under section 1156(a) of the

Act has been violated and that the

violation is substantial and has occurred

in a substantial number of cases or is

gross and flagrant;

(7) A case-by-case analysis and

evaluation of any additional information

provided by the practitioner or other

person in response to the PRO’s initial

finding;

(8) A copy of the CAP that was

developed and documentation of the

results of such plan or an explanation of

why such the CAP will be used to

support the PRO’s recommendation

regarding inability or unwillingness in

accordance with § 1004.80(c)(6) and not

as a basis for the sanction;

(9) The number of admissions by the

practitioner or other person reviewed by

the PRO during the period in which the

violation(s) were identified;

(10) The professional qualifications of

the PRO’s reviewers; and

(11) The PRO’s sanction

recommendation.

(c) PRO recommendation. The PRO

must specify in its report—

(1) The sanction recommended;

(2) The amount of the monetary

penalty recommended, if applicable;

(3) The period of exclusion

recommended, if applicable;

(4) The availability of alternative

sources of services in the community,

with supporting information;

(5) The county or counties in which

the practitioner or other person

furnishes services; and

(6) A recommendation, with

supporting documentation, as to

whether the practitioner or other person

is unable or unwilling substantially to

comply with the obligation that was

violated and the basis for that

recommendation.

§ 1004.90 Basis for recommended

sanction.

The PRO’s specific recommendation

must be based on documentation

provided to the OIG showing its

consideration of—

(a) The type of offense involved;

(b) The severity of the offense;

(c) The deterrent value;

(d) The practitioner’s or other

person’s previous sanction record;

(e) The availability of alternative

sources of services in the community;

and

(f) Any other factors that the PRO

considers relevant, such as the duration

of the problem.

Subpart D—OIG Responsibilities

§ 1004.100 Acknowledgement and review

of report.

(a) Acknowledgement. The OIG will

inform the PRO of the date it received

the PRO’s report and recommendation.
Federal Register / Vol. 60, No. 238 / Tuesday, December 12, 1995 / Rules and Regulations 63643

(b) Review. The OIG will review the

PRO report and recommendation to

determine whether—

(1) The PRO has followed the

regulatory requirements of part 1004;

(2) A violation has occurred; and

(3) The practitioner or other person

has demonstrated an unwillingness or

lack of ability substantially to comply

with an obligation.

(c) Rejection of the PRO

recommendation. If the OIG decides

that a sanction is not warranted, it will

notify the PRO that recommended the

sanction, the affected practitioner or

other person, and the licensing board

informed by the PRO of the sanction

recommendation that the

recommendation is rejected.

(d) Decision to sanction. If the OIG

decides that a violation of obligations

has occurred, it will determine the

appropriate sanction by considering—

(1) The recommendation of the PRO;

(2) The type of offense;

(3) The severity of the offense;

(4) The previous sanction record of

the practitioner or other person;

(5) The availability of alternative

sources of services in the community;

(6) Any prior problems the Medicare

or State health care programs have had

with the practitioner or other person;

(7) Whether the practitioner or other

person is unable or unwilling to comply

substantially with the obligations,

including whether he, she or it entered

into a CAP—where such plan was

deemed appropriate by the PRO—prior

to the PRO’s recommendation and, if so,

whether he, she or it successfully

completed such CAP; and

(8) Any other matters relevant to the

particular case.

(e) Exclusion sanction. If the PRO

submits a recommendation for

exclusion to the OIG, and a

determination is not made by the 120th

day after actual receipt by the OIG, the

exclusion sanction recommended will

become effective and the OIG will

provide notice in accordance with

§ 1004.110(f).

(f) Monetary penalty. If the PRO

recommendation is to assess a monetary

penalty, the 120-day provision does not

apply and the OIG will provide notice

in accordance with § 1004.110 (a)–(e).

§ 1004.110 Notice of sanction.

(a) The OIG must notify the

practitioner or other person of the

adverse determination and of the

sanction to be imposed.

(b) The sanction is effective 20 days

from the date of the notice. Receipt is

presumed to be 5 days after the date on

the notice, unless there is a reasonable

showing to the contrary.

(c) The notice must specify—

(1) The legal and factual basis for the

determination;

(2) The sanction to be imposed;

(3) The effective date and, if

appropriate, the duration of the

exclusion;

(4) The appeal rights of the

practitioner or other person;

(5) The opportunity and the process

necessary to provide alternative

notification as set forth in paragraphs

(d) and (e) of this section; and

(6) In the case of exclusion, the

earliest date on which the OIG will

accept a request for reinstatement.

(d) Patient notification. (1)(i) The OIG

will provide a sanctioned practitioner or

other person an opportunity to elect to

inform each of their patients of the

sanction action. In order to elect this

option, the sanctioned practitioner or

other person must, within 30 calendar

days from receipt of the OIG notice,

inform both new and existing patients

through written notification—based on a

suggested (non-mandatory) model

provided to the sanctioned individual

by the OIG—of the sanction and, in the

case of an exclusion, its effective date

and duration. Receipt of the OIG notice

is presumed to be 5 days after the date

of the notice, unless there is a

reasonable showing to the contrary.

Within this time period, the practitioner

or other person must also sign and

return the certification that the OIG will

provide with the notice. For purposes of

this section, the term ‘‘all existing

patients’’ includes all patients currently

under active treatment with the

practitioner or other person, as well as

all patients who have been treated by

the practitioner or other person within

the last 3 years. In addition, the

practitioner or other person must notify

all prospective patients orally at the

time such persons request an

appointment. If the sanctioned party is

a hospital, it must notify all physicians

who have privileges at the hospital, and

must post a notice in its emergency

room, business office and in all

affiliated entities regarding the

exclusion. In addition, for purposes of

this section, the term ‘‘in all affiliated

entities’’ encompasses all entities and

properties in which the hospital has a

direct or indirect ownership interest of

5 percent or more and any management,

partnership or control of the entity.

(ii) The certification will provide that

the practitioner or other person—

(A) Has informed each of his, her or

its patients in writing that the

practitioner or other person has been

sanctioned, or if a hospital, has

informed all physicians having

privileges at the hospital that it has been

sanctioned;

(B) If excluded from Medicare and the

State health care programs, has

informed his, her or its existing patients

in writing that the programs will not

pay for items and services furnished or

ordered (or at the medical direction or

on the prescription of an excluded

physician) by the practitioner or other

person until they are reinstated, or if a

hospital, has provided this information

to all physicians having privileges at

that hospital;

(C) If excluded from Medicare and

State health care programs, will provide

prospective patients—or if a hospital,

physicians requesting privileges at that

hospital prior to furnishing or ordering

(or in the case of an excluded physician,

medically directing or prescribing)

services—oral information of both the

sanction and that the programs will not

pay for services provided and written

notification of the same at the time of

the provision of services;

(D) If excluded from Medicare and

State health care programs and is an

entity such as a hospital, has posted a

notice in its emergency room, business

office and in all affiliated entities that

the programs will not pay for services

provided; and

(E) Certifies to the truthfulness and

accuracy of the notification and the

statements in the certification.

(2) If the sanctioned practitioner or

other person does not inform his, her or

its patients and does not return the

required certification within the 30-day

period, or if the sanctioned practitioner

or other person returns the certification

within the 30-day period but the OIG

obtains reliable evidence that such

person nevertheless has not adequately

informed new and existing patients of

the sanction, the OIG—

(i) Will see that the public is notified

directly of the identity of the sanctioned

practitioner or other person, the finding

that the obligation ha been violated, and

the effective date and duration of any

exclusion; and

(ii) May consider this failure to adhere

to the certification obligation as an

adverse factor at the time the sanctioned

practitioner or other person requests

reinstatement.

(3) If the sanctioned practitioner or

other person is entitled to a preliminary

hearing in accordance with

§ 1004.140(a) and requests such a

preliminary hearing, and if the

administrative law judge (ALJ) decides

that he, she or it poses a risk to program

beneficiaries, the sanctioned

practitioner or other person would have

30 days from the date of receipt of the

ALJ’s decision to provide certification to
63644 Federal Register / Vol. 60, No. 238 / Tuesday, December 12, 1995 / Rules and Regulations

the OIG in accordance with

§ 1004.110(d)(1). The date of receipt is

presumed to be 5 days after the date of

the ALJ’s decision, unless there is a

reasonable showing to the contrary.

(e) Notice of the sanction is also

provided to the following entities as

appropriate—

(1) The PRO that originated the

sanction report;

(2) PROs in adjacent areas;

(3) State Medicaid fraud control units

and State licensing and accreditation

bodies;

(4) Appropriate program contractors

and State agencies;

(5) Hospitals, including the hospital

where the sanctioned individual’s case

originated and where the individual

currently has privileges, if known;

skilled nursing facilities, home health

agencies, and health maintenance

organizations and Federally-funded

community health centers where the

practitioner or other person works;

(6) Medical societies and other

professional organizations; and

(7) Medicare carriers and fiscal

intermediaries, health care prepayment

plans and other affected agencies and

organizations.

(f) If an exclusion sanction is

effectuated because a decision was not

made within 120 days after receipt of

the PRO recommendation, notification

is as follows—

(1) As soon as possible after the 120th

day, the OIG will issue a notice to the

practitioner or other person, in

compliance with the requirements of

paragraph (c) of this section, affirming

the PRO recommendation or modifying

the recommendation based on the OIG’s

review of the case, and that the

exclusion is effective 20 days from the

date of the notice; and

(2) Notice of the sanction is also

provided as specified in paragraph (e) of

this section; and

* * * * *

Subpart E—Effect and Duration of

Exclusion

§ 1004.120 Effect of an exclusion on

program payments and services.

The effect of an exclusion is set forth

in § 1001.1901 of this chapter.

§ 1004.130 Reinstatement after exclusion.

(a) A practitioner or other person who

has been excluded in accordance with

this part may apply for reinstatement at

the end of the period of exclusion. The

OIG will consider any request for

reinstatement in accordance with

provisions of §§ 1001.3001 through

1001.3005 of this chapter.

(b) The OIG may also consider a

practitioner’s or other person’s

compliance with the certification

obligation in § 1004.110(d) at the time of

reinstatement.

Subpart F—Appeals

§ 1004.140 Appeal rights.

(a) Right to preliminary hearing. (1)(i)

A practitioner or other person excluded

from participation in Medicare and any

State health care programs under

section 1156 of the Act may request a

preliminary hearing if the location

where services are rendered to over 50

percent of the practitioner’s or other

person’s patients at the time of the

exclusion notice is in a rural HPSA or

in a county with a population of less

than 70,000.

(ii) Unless the practitioner’s or other

person’s practice meets the definition

for psychiatric professional, vision care

professional, dental professional,

podiatric professional or pharmacy

professional, the HPSA used by the OIG

for determination of entitlement to a

preliminary hearing will be the HPSA

list for primary medical care

professional.

(iii) Information on the population

size of a county in order to determine

entitlement to a preliminary hearing

will be obtained by the OIG from the

responsible officials of that county.

(2)(i) A request for a preliminary

hearing must be made in writing and

received by the Departmental Appeals

Board (DAB) no later than the 15th day

after the notice of exclusion is received

by a practitioner or other person. The

date of receipt of the notice of exclusion

by the practitioner or other person is

presumed to be 5 days after the date

appearing on the notice, unless there is

a reasonable showing to the contrary.

(ii) A request for a preliminary

hearing will stay the effective date of the

exclusion pending a decision of the ALJ

at the preliminary hearing, and all the

parties informed by the OIG of the

exclusion will be notified of the stay.

(iii) A request for a preliminary

hearing received after the 15-day period

has expired will be treated as a request

for a hearing before an ALJ in

accordance with paragraph (b) of this

section.

(iv) If the practitioner or other person

exercises his, her or its right to a

preliminary hearing, such a hearing

must be held by the ALJ in accordance

with paragraph (a)(3)(i) of this section

unless the OIG waives it in accordance

with paragraph (a)(6)(i) of this section.

(v) The ALJ cannot consolidate the

preliminary hearing with a full hearing

without the approval of all parties to the

hearing.

(3)(i) The preliminary hearing will be

conducted by an ALJ of the DAB in a

city that the ALJ deems equitable to all

parties. The ALJ will conduct the

preliminary hearing and render a

decision no later than 45 days after

receipt of the request for such a hearing

by the DAB. Unless there is a reasonable

showing to the contrary, date of receipt

by the DAB is presumed to be 5 days

after the date on the request for a

preliminary hearing or, if undated, the

date of receipt will be the date the DAB

actually received the request. A

reasonable extension to the 45-day

period of up to 15 days may be

requested by any party to the

preliminary hearing and such a request

may be granted upon concurrence by all

parties to the preliminary hearing. Such

request must be received no later than

15 days prior to the scheduled date of

the preliminary hearing.

(ii) The only issue to be heard and

decided on by the ALJ at the

preliminary hearing, based on the

preponderance of the evidence, is

whether the practitioner’s or other

person’s continued participation in the

Medicare and State health care

programs during the appeal of the

exclusion before an ALJ would place

program beneficiaries at serious risk.

The ALJ’s decision is to be based on the

preponderance of the evidence.

(iii) In the interest of time, the ALJ

may issue an oral decision to be

followed by a written decision.

(iv) In those cases where the ALJ has

stayed an exclusion after a preliminary

hearing, a full hearing must be held and

a decision rendered by the ALJ within

6 months. If, for any reason, the request

for a full hearing before the ALJ is

withdrawn or dismissed, the

practitioner or other person will be

excluded effective 5 days after the

notice of the withdrawal or dismissal is

received in the OIG headquarters.

(4) The preliminary hearing decision

is not appealable or subject to further

administrative or judicial review.

(5) A practitioner or other person

found at the preliminary hearing not to

place program beneficiaries at serious

risk, but later determined to have been

properly excluded from program

participation after a full hearing before

an ALJ, is not entitled to have the

exclusion stayed further during an

appeal to the DAB. Exclusions in such

instances will be effective 5 days after

receipt of the ALJ decision in the OIG

headquarters.

(6)(i) After notice of a timely request

for a preliminary hearing, the OIG may

determine that the practitioner’s or

other person’s continued program

participation during the appeal before
Federal Register / Vol. 60, No. 238 / Tuesday, December 12, 1995 / Rules and Regulations 63645

the ALJ will not place program

beneficiaries at serious risk and waive

the preliminary hearing. Under these

circumstances, the exclusion will be

stayed pending the decision of the ALJ

after a full hearing. the hearing must be

held, and a decision reached, within 6

months.

(ii) If the OIG decides to waive the

preliminary hearing, the request for the

preliminary hearing will be considered

a request for a hearing before the ALJ in

accordance with paragraph (b) of this

section.

(b) Right to administrative review. (1)

A practitioner or other person

dissatisfied with an OIG determination,

or an exclusion that results from a

determination not being made within

120 days, is entitled to appeal such

sanction in accordance with part 1005

of this chapter.

(2) Due to the 120-day statutory

requirement specified in § 1004.100(e),

the following limitations apply—

(i) The period of time for submitting

additional information will not be

extended.

(ii) Any material received by the OIG

after the 30-day period allowed will not

be considered by the ALJ or the DAB.

(3) The OIG’s determination continues

in effect unless reversed by a hearing.

(c) Rights to judicial review. Any

practitioner or other person dissatisfied

with a final decision of the Secretary

may file a civil action in accordance

with the provisions of section 205(g) of

the Act.

Approved: October 23, 1995.

June Gibbs Brown,

Inspector General.

[FR Doc. 95–30130 Filed 12–11–95; 8:45 am]

BILLING CODE 4150–04–M

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 73

[MM Docket No. 95–76; RM–8611]

Radio Broadcasting Services;

Homestead and North Miami Beach, FL

AGENCY: Federal Communications

Commission.

ACTION: Final rule.

SUMMARY: This document substitutes

Channel 239C2 for Channel 239C1 at

Homestead, Florida, reallots the channel

to North Miami Beach, Florida, and

modifies the license for Station

WXDJ(FM) accordingly, in response to a

petition filed by New Age Broadcasting,

Inc. See 60 FR 31278, June 14, 1995.

The coordinates for Channel 239C2 at

North Miami Beach, Florida, are 25–42–

55 and 80–09–17. With this action, this

proceeding is terminated.

EFFECTIVE DATE: January 22, 1996.

FOR FURTHER INFORMATION CONTACT:

Kathleen Scheuerle, Mass Media

Bureau, (202) 418–2180.

SUPPLEMENTARY INFORMATION: This is a

summary of the Commission’s Report

and Order, MM Docket No. 95–76,

adopted November 24, 1995, and

released December 6, 1995. The full text

of this Commission decision is available

for inspection and copying during

normal business hours in the

Commission’s Reference Center (Room

239), 1919 M Street, NW., Washington,

DC. The complete text of this decision

may also be purchased from the

Commission’s copy contractors,

International Transcription Services,

Inc., 2100 M Street, NW., Suite 140,

Washington, DC 20037, (202) 857–3800.

List of Subjects in 47 CFR Part 73

Radio broadcasting.

Part 73 of title 47 of the Code of

Federal Regulations is amended as

follows:

PART 73—[AMENDED]

1. The authority citation for part 73

continues to read as follows:

Authority: Secs. 303, 48 Stat., as amended,

1082; 47 U.S.C. 154, as amended.

§ 73.202 [Amended]

2. Section 73.202(b), the Table of FM

Allotments under Florida, is amended

by removing Channel 239C1 and adding

Channel 239C2 at Homestead, removing

Channel 239C2 at Homestead and

adding North Miami Beach, Channel

239C2.

Federal Communications Commission.

John A. Karousos,

Chief, Allocations Branch, Policy and Rules

Division, Mass Media Bureau.

[FR Doc. 95–30218 Filed 12–11–95; 8:45 am]

BILLING CODE 6712–01–F

47 CFR Part 73

[MM Docket No. 90–163; RM–7170]

Radio Broadcasting Services; Bay St.

Louis and Poplarville, MS

AGENCY: Federal Communications

Commission.

ACTION: Final rule.

SUMMARY: This document reallots

Channel 300C from Poplarville,

Mississippi to Bay St. Louis and

modifies the license for Station

WZKX(FM) accordingly, in response to

a petition filed by Dowdy and Dowdy

Partnership. See 55 FR 1913, April 3,

1990. The coordinates for Channel 300C

at Bay St. Louis, MS are 30–44–48 and

89–03–30. With this action, this

proceeding is terminated.

EFFECTIVE DATE: January 22, 1996.

FOR FURTHER INFORMATION CONTACT:

Arthur D. Scrutchins, Mass Media

Bureau, (202) 418–2180.

SUPPLEMENTARY INFORMATION: This is a

summary of the Commission’s Report

and Order, MM Docket No. 90–163,

adopted November 25, 1995, and

released December 6, 1995. The full text

of this Commission decision is available

for inspection and copying during

normal business hours in the

Commission’s Reference Center (Room

239), 1919 M Street, NW., Washington,

DC. The complete text of this decision

may also be purchased from the

Commission’s copy contractors,

International Transcription Services,

Inc., 2100 M Street, NW., Suite 140,

Washington, DC 20037, (202) 857–3800.

List of Subjects in 47 CFR Part 73

Radio broadcasting.

Part 73 of title 47 of the Code of

Federal Regulations is amended as

follows:

PART 73—[AMENDED]

1. The authority citation for part 73

continues to read as follows:

Authority: Secs. 303, 48 Stat., as amended,

1082; 47 U.S.C. 154, as amended.

§ 73.202 [Amended]

2. Section 73.202(b), the Table of FM

Allotments under Mississippi, is

amended by removing Channel 300C

from Poplarville, Mississippi and

adding Bay St. Louis, Channel 300C.

Federal Communications Commission.

John A. Karousos,

Chief, Allocations Branch, Policy and Rules

Division, Mass Media Bureau.

[FR Doc. 95–30219 Filed 12–11–95; 8:45 am]

BILLING CODE 6712–01–F

DEPARTMENT OF ENERGY

48 CFR Part 970

RIN 1991–AB08

Acquisition Regulation; Legislative

Lobbying Cost Prohibition

AGENCY: Department of Energy (DOE).

ACTION: Final rule.

SUMMARY: The Department amends the

Department of Energy Acquisition

Regulation (DEAR) to clarify its