[Federal Register Volume 73, Number 188 (Friday, September 26, 2008)]
[Rules and Regulations]
[Pages 55763-55765]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-22592]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 422 and 423

[CMS-4124-F2]
RIN-0938-AO78


Medicare Program; Revisions to the Medicare Advantage and Part D 
Prescription Drug Contract Determinations, Appeals, and Intermediate 
Sanctions Processes; Correcting Amendment

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Final rule; correcting amendment.

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SUMMARY: In the December 5, 2007 issue of the Federal Register, we 
published a final rule finalizing the Medicare program provisions 
relating to contract determinations involving Medicare Advantage (MA) 
organizations and Medicare Part D prescription drug plan sponsors, 
including eliminating the reconsideration process for review of 
contract determinations, revising the provisions related to appeals of 
contract determinations, and clarifying the process for MA 
organizations and Part D sponsors to complete corrective action plans. 
In that final rule, we also clarified the intermediate sanction and 
civil money penalty provisions that apply to MA organizations and Part 
D sponsors, modified elements of MA organizations and Part D sponsors' 
compliance plans, retained voluntary self-reporting for Part D 
sponsors, implemented voluntary self-reporting for MA organizations, 
and revised provisions to ensure HHS has access to the books and 
records of MA organizations and Part D sponsors' first tier, 
downstream, and related entities. This correcting amendment corrects a 
limited number of technical and typographical errors identified in the 
December 5, 2007 final rule.

DATES: These correcting amendments are effective September 26, 2008, 
except for the amendment to Sec.  423.505, which is effective on 
January 1, 2009. The correcting amendments for Sec.  422.756(d) and 
Sec.  423.756(d) are applicable beginning January 4, 2008.

FOR FURTHER INFORMATION CONTACT: Christine Reinhard (410) 786-2987. 
Stephanie Blaydes Kaisler (410) 786-0957.

SUPPLEMENTARY INFORMATION:

I. Background

    In FR Doc. 07-5946 (72 FR 68700 through 68741), the final rule 
entitled, ``Revisions to the Medicare Advantage and Part D Prescription 
Drug Contract Determinations, Appeals, and Intermediate Sanctions 
Processes,'' there were technical errors that have been identified and 
corrected in the regulations text of this correcting amendment. We note 
that correcting two of these technical errors, found at Sec.  
422.756(d) and Sec.  423.756(d), ensure that certain existing 
provisions which were never intended to be the subject of notice and 
comment rulemaking, remain in place for the benefit of all affected 
parties, including MA organizations and Part D sponsors. The provisions 
in this correcting amendment for Sec.  422.756(d) and Sec.  423.756(d) 
are effective as if they were included in the final rule published 
December 5, 2007. Accordingly, the corrections are effective 
retroactive to January 4, 2008, the effective date of most of the 
provisions of the final rule. However, the provisions in this 
correcting amendment for Sec.  423.505 are effective January 1, 2009 
since these particular provisions in Sec.  423.505 were not set to take 
effect until January 1, 2009.

II. Summary of Errors in the Regulations Text

    On pages 68726 and 68735 of the December 5, 2007 final rule, there 
were technical errors made in the regulation text of Sec.  422.756(d) 
and Sec.  423.756(d). Specifically, a typographical error in our 
amendatory instructions caused us to inadvertently omit from the Code 
of Federal Regulations (CFR) existing paragraphs Sec.  422.756(d)(3) 
and Sec.  423.756(d)(3) regarding the duration of an MA and Part D 
intermediate sanction, respectively. We note that these existing 
provisions were not intended to be revised in the December 5, 2007 
final rule (72 FR 68700 through 68741).
    On page 68732 of the December 5, 2007 final rule, our amendatory 
instruction indicated that we were revising Sec.  423.505(i)(2)(i). 
However, when we set out the changed regulations text, we inadvertently 
revised paragraph (i)(2)(ii) instead of paragraph (i)(2)(i). This 
typographical error, if not corrected, would have inadvertently deleted 
from the CFR the current paragraph at Sec.  423.505(i)(2)(ii) regarding 
the 10-year record retention requirement as of January 1, 2009, the 
effective date of this provision as specified in the final rule. The 
correct Sec.  423.505(i)(2)(i) should read ``HHS, the Comptroller 
General, or their designees

[[Page 55764]]

have the right to audit, evaluate and inspect any books, contracts, 
records, including medical records, and documentation of the first 
tier, downstream, and related entities involving transactions related 
to CMS' contract with the Part D sponsor.'' As stated above, the 
existing Sec.  423.505(i)(2)(ii), which references the 10-year record 
retention requirements, remains in the CFR unchanged.
    In Sec.  423.505(i)(3)(iii) the term ``related entity'' is 
incorrectly used twice in the same sentence, so we have removed this 
duplication. In addition, we inadvertently included MA organization in 
Sec.  423.505(i)(3)(iv) which only applies to Part D sponsors. We have 
revised the language accordingly.

III. Waiver of Proposed Rulemaking and Delay in Effective Date

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register to provide a period for public comment before the 
provisions of a rule take effect in accordance with section 553(b) of 
the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). However, we 
can waive this notice and comment procedure if the Secretary finds, for 
good cause, that the notice and comment process is impracticable, 
unnecessary, or contrary to the public interest, and incorporates a 
statement of the finding and the reasons therefore in the notice.
    Section 553(d) of the APA ordinarily requires a 30-day delay in 
effective date of final rules after the date of their publication in 
the Federal Register. This 30-day delay in effective date can be 
waived, however, if an agency finds for good cause that the delay is 
impracticable, unnecessary, or contrary to the public interest, and the 
agency incorporates a statement of the findings and its reasons in the 
rule issued.
    The provisions of this correcting amendment regarding the duration 
of sanctions at Sec.  422.756(d) and Sec.  423.756(d) make no 
substantive changes and are intended to restore provisions which were 
inadvertently removed from the CFR. These provisions were not revised 
in the final rule but were dropped because of a typographical error in 
our amendatory instructions. We must reinstate these provisions in the 
CFR to ensure that CMS may lift sanctions on MA and Part D plans as 
appropriate.
    In addition, a typographical error in our regulations text would 
have inadvertently removed the current Sec.  423.505(i)(2)(ii) from the 
CFR as of the effective date for these provisions on January 1, 2009. 
We are taking this opportunity to correct this error in the CFR to 
ensure that the 10-year record retention requirements for Part D 
sponsors remains in the CFR unchanged. Without this correcting 
amendment, the Medicare Part D regulations could have been construed as 
being silent on the 10-year Part D recordkeeping requirement which 
could create confusion and uncertainty for affected parties regarding 
CMS' policy on this issue.
    Finally, we are also taking this opportunity to correct 
typographical errors in Sec.  423.505(i)(3)(iii) and (iv).
    Because we are issuing this correcting amendment based on 
typographical errors, we find that undertaking further notice and 
comment procedures to incorporate these corrections into the December 
5, 2007 final rule is unnecessary and contrary to the public interest.
    For the same reasons, we are also waiving the 30-day delay in 
effective date for Sec.  422.756(d) and Sec.  423.756(d) in this 
correcting amendment. We believe that it is in the public interest to 
ensure that the December 5, 2007 final rule accurately state the 
current law and CMS policy. Thus, delaying the effective date of these 
corrections would be contrary to the public interest. Therefore, we 
also find good cause to waive the 30-day delay in effective date for 
Sec.  422.756(d) and Sec.  423.756(d).

List of Subjects

42 CFR Parts 422 and 423

0
Accordingly, 42 CFR chapter IV is corrected by making the following 
correcting amendments to parts 422 and 423.

PART 422--MEDICARE ADVANTAGE PROGRAM

0
1. The authority citation for part 422 continues to read as follows:

    Authority: Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh).


0
2. Section 422.756 is amended by adding paragraph (d)(3) to read as 
follows:


Sec.  422.756  Procedures for imposing intermediate sanctions and civil 
money penalties.

* * * * *
    (d) * * *
    (3) Duration of sanction. The sanction remains in effect until CMS 
notifies the MA organization that CMS is satisfied that the basis for 
imposing the sanction has been corrected and is not likely to recur.
* * * * *

PART 423--VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT

0
3. The authority citation for part 423 continues to read as follows:

    Authority: Secs. 1102, 1860D-1 through 1860D-42, and 1871 of the 
Social Security Act (42 U.S.C. 1302, 1395w-101 through 1395w-152, 
and 1395hh).


0
4. Section 423.505 is amended by--
0
A. Revising paragraph (i)(2)(i).
0
B. Revising paragraph (i)(2)(ii).
0
C. Revising paragraph (i)(3)(iii).
0
D. Revising paragraph (i)(3) (iv).
    The revisions read as follows:


Sec.  423.505  Contract provisions.

* * * * *
    (i) * * *
    (2) * * *
    (i) HHS, the Comptroller General, or their designees have the right 
to audit, evaluate, and inspect any books, contracts, records, 
including medical records, and documentation of the first tier, 
downstream, and related entities involving transactions related to CMS' 
contract with the Part D sponsor.
    (ii) HHS', the Comptroller General's, or their designee's right to 
inspect, evaluate, and audit any pertinent information for any 
particular contract period exists through 10 years from the final date 
of the contract period or from the date of completion of any audit, 
whichever is later.
    (3) * * *
    (iii) A provision requiring that any services or other activity 
performed by a first tier, downstream, and related entity in accordance 
with a contract or written agreement are consistent and comply with the 
Part D sponsor's contractual obligations.
    (iv) A provision requiring the Part D sponsor's first tier, 
downstream, and related entities to produce upon request by CMS, or its 
designees, any books, contracts, records, including medical records and 
documentation of the Part D sponsor, relating to the Part D program, to 
either the sponsor to provide to CMS, or directly to CMS or its 
designees.
* * * * *


0
5. Section 423.756 is amended by adding paragraph (d)(3) to read as 
follows:


Sec.  423.756  Procedures for imposing intermediate sanctions and civil 
money penalties.

* * * * *
    (d) * * *
    (3) Duration of sanction. The sanction remains in effect until CMS 
notifies the Part D sponsor that CMS is satisfied that

[[Page 55765]]

the basis for imposing the sanction is corrected and is not likely to 
recur.
* * * * *
(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)

    Dated: September 16, 2008.
Ann C. Agnew,
Executive Secretary to the Department.
 [FR Doc. E8-22592 Filed 9-25-08; 8:45 am]
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