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Timestamp: 2018-11-14 13:54:48
Document Index: 64048570

Matched Legal Cases: ['§ 1395', '§1395', '§1857', '§4001', '§1000', '§513', '§1', '§617', '§222', '§900', '§164', '§6408', '§1103', '§17001', '§6408', '§6408', '§6408', '§6408', '§6408', '§164', '§171', '§172', '§173', '§222', '§900', '§222', '§222', '§222', '§222', '§222', '§222', '§222', '§222', '§237', '§222', '§1', '§623', '§1', '§617', '§1000', '§513', '§1000', '§513', '§1000', '§522', '§1000', '§522', '§1000', '§522', '§1000', '§522', '§1000', '§522', '§1000', '§522', '§164', '§171', '§172', '§173', '§1', '§617', '§1', '§623', '§1000', '§513', '§1000', '§522', '§1000', '§513', '§17001', '§3207', '§107', '§4002']

[USC10] 42 USC 1395w-27: Contracts with Medicare+Choice organizations
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42 USC 1395w-27: Contracts with Medicare+Choice organizations Text contains those laws in effect on October 23, 2018 Pending Updates: Pub L. 115-271 (10/24/2018), Pub L. 115-271 (10/24/2018), Pub L. 115-271 (10/24/2018) [View Details]
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§1395w–27. Contracts with Medicare+Choice organizations
Subject to paragraph (2), the Secretary may not enter into a contract under this section with a Medicare+Choice organization unless the organization has-
(A) at least 5,000 individuals (or 1,500 individuals in the case of an organization that is a provider-sponsored organization) who are receiving health benefits through the organization, or
(B) at least 1,500 individuals (or 500 individuals in the case of an organization that is a provider-sponsored organization) who are receiving health benefits through the organization if the organization primarily serves individuals residing outside of urbanized areas.
(2) Termination authority
In accordance with procedures established under subsection (h), the Secretary may at any time terminate any such contract if the Secretary determines that the organization-
(B) is carrying out the contract in a manner inconsistent with the efficient and effective administration of this part; or
(C) no longer substantially meets the applicable conditions of this part.
(2) Inspection and audit
Each contract under this section shall provide that the Secretary, or any person or organization designated by the Secretary-
(A) shall have the right to timely inspect or otherwise evaluate (i) the quality, appropriateness, and timeliness of services performed under the contract, and (ii) the facilities of the organization when there is reasonable evidence of some need for such inspection, and
(B) shall have the right to timely audit and inspect any books and records of the Medicare+Choice organization that pertain (i) to the ability of the organization to bear the risk of potential financial losses, or (ii) to services performed or determinations of amounts payable under the contract.
Each contract under this section shall require the organization to provide (and pay for) written notice in advance of the contract's termination, as well as a description of alternatives for obtaining benefits under this subchapter, to each individual enrolled with the organization under this part.
(i) Such information as the Secretary may require demonstrating that the organization has a fiscally sound operation.
(ii) A copy of the report, if any, filed with the Secretary containing the information required to be reported under section 1320a–3 of this title by disclosing entities.
(iii) A description of transactions, as specified by the Secretary, between the organization and a party in interest. Such transactions shall include-
(I) any sale or exchange, or leasing of any property between the organization and a party in interest;
(II) any furnishing for consideration of goods, services (including management services), or facilities between the organization and a party in interest, but not including salaries paid to employees for services provided in the normal course of their employment and health services provided to members by hospitals and other providers and by staff, medical group (or groups), individual practice association (or associations), or any combination thereof; and
(III) any lending of money or other extension of credit between an organization and a party in interest.
For the purposes of this paragraph, the term "party in interest" means-
(i) any director, officer, partner, or employee responsible for management or administration of a Medicare+Choice organization, any person who is directly or indirectly the beneficial owner of more than 5 percent of the equity of the organization, any person who is the beneficial owner of a mortgage, deed of trust, note, or other interest secured by, and valuing more than 5 percent of the organization, and, in the case of a Medicare+Choice organization organized as a nonprofit corporation, an incorporator or member of such corporation under applicable State corporation law;
(ii) any entity in which a person described in clause (i)-
(II) is a partner (if such entity is organized as a partnership);
(iii) any person directly or indirectly controlling, controlled by, or under common control with an organization; and
(iv) any spouse, child, or parent of an individual described in clause (i).
The Secretary is authorized to charge a fee to each Medicare+Choice organization with a contract under this part and each PDP sponsor with a contract under part D that is equal to the organization's or sponsor's pro rata share (as determined by the Secretary) of the aggregate amount of fees which the Secretary is directed to collect in a fiscal year. Any amounts collected shall be available without further appropriation to the Secretary for the purpose of carrying out section 1395w–21 of this title (relating to enrollment and dissemination of information), section 1395w–101(c) of this title, and section 1395b–4 of this title (relating to the health insurance counseling and assistance program).
In any fiscal year the fees collected by the Secretary under subparagraph (B) shall not exceed the lesser of-
(i) the estimated costs to be incurred by the Secretary in the fiscal year in carrying out the activities described in section 1395w–21 of this title and section 1395w–101(c) of this title and section 1395b–4 of this title; or
(ii)(I) $200,000,000 in fiscal year 1998;
(II) $150,000,000 in fiscal year 1999;
(III) $100,000,000 in fiscal year 2000;
(IV) the Medicare+Choice portion (as defined in subparagraph (E)) of $100,000,000 in fiscal year 2001 and each succeeding fiscal year before fiscal year 2006; and
(V) the applicable portion (as defined in subparagraph (F)) of $200,000,000 in fiscal year 2006 and each succeeding fiscal year.
(E) Medicare+Choice portion defined
In this paragraph, the term "Medicare+Choice portion" means, for a fiscal year, the ratio, as estimated by the Secretary, of-
(i) the average number of individuals enrolled in Medicare+Choice plans during the fiscal year, to
(ii) the average number of individuals entitled to benefits under part A, and enrolled under part B, during the fiscal year.
(F) Applicable portion defined
In this paragraph, the term "applicable portion" means, for a fiscal year-
(i) with respect to MA organizations, the Secretary's estimate of the total proportion of expenditures under this subchapter that are attributable to expenditures made under this part (including payments under part D that are made to such organizations); or
(ii) with respect to PDP sponsors, the Secretary's estimate of the total proportion of expenditures under this subchapter that are attributable to expenditures made to such sponsors under part D.
(4) Requirement for minimum medical loss ratio
If the Secretary determines for a contract year (beginning with 2014) that an MA plan has failed to have a medical loss ratio of at least .85-
(A) the MA plan shall remit to the Secretary an amount equal to the product of-
(i) the total revenue of the MA plan under this part for the contract year; and
(ii) the difference between .85 and the medical loss ratio;
(B) for 3 consecutive contract years, the Secretary shall not permit the enrollment of new enrollees under the plan for coverage during the second succeeding contract year; and
(C) the Secretary shall terminate the plan contract if the plan fails to have such a medical loss ratio for 5 consecutive contract years.
(2) Secretary's option to bypass noncomplying organization
In the case of a Medicare+Choice eligible organization which the Secretary determines, after notice and opportunity for a hearing, has failed to make payments of amounts in compliance with paragraph (1), the Secretary may provide for direct payment of the amounts owed to providers and suppliers (or, in the case of a Medicare+Choice private fee-for-service plan, amounts owed to the enrollees) for covered services and supplies furnished to individuals enrolled under this part under the contract. If the Secretary provides for the direct payments, the Secretary shall provide for an appropriate reduction in the amount of payments otherwise made to the organization under this part to reflect the amount of the Secretary's payments (and the Secretary's costs in making the payments).
(3) Incorporation of certain prescription drug plan contract requirements
If the Secretary determines that a Medicare+Choice organization with a contract under this section-
(A) fails substantially to provide medically necessary items and services that are required (under law or under the contract) to be provided to an individual covered under the contract, if the failure has adversely affected (or has substantial likelihood of adversely affecting) the individual;
(B) imposes premiums on individuals enrolled under this part in excess of the amount of the Medicare+Choice monthly basic and supplemental beneficiary premiums permitted under section 1395w–24 of this title;
(C) acts to expel or to refuse to re-enroll an individual in violation of the provisions of this part;
(D) engages in any practice that would reasonably be expected to have the effect of denying or discouraging enrollment (except as permitted by this part) by eligible individuals with the organization whose medical condition or history indicates a need for substantial future medical services;
(E) misrepresents or falsifies information that is furnished-
(i) to the Secretary under this part, or
(ii) to an individual or to any other entity under this part;
(F) fails to comply with the applicable requirements of section 1395w–22(j)(3) or 1395w–22(k)(2)(A)(ii) of this title;
(G) employs or contracts with any individual or entity that is excluded from participation under this subchapter under section 1320a–7 or 1320a–7a of this title for the provision of health care, utilization review, medical social work, or administrative services or employs or contracts with any entity for the provision (directly or indirectly) through such an excluded individual or entity of such services;
(H) except as provided under subparagraph (C) or (D) of section 1395w–101(b)(1) of this title, enrolls an individual in any plan under this part without the prior consent of the individual or the designee of the individual;
(I) transfers an individual enrolled under this part from one plan to another without the prior consent of the individual or the designee of the individual or solely for the purpose of earning a commission;
(J) fails to comply with marketing restrictions described in subsections (h) and (j) of section 1395w–21 of this title or applicable implementing regulations or guidance; or
(K) employs or contracts with any individual or entity who engages in the conduct described in subparagraphs (A) through (J) of this paragraph;
The remedies described in this paragraph are-
(A) civil money penalties of not more than $25,000 for each determination under paragraph (1) or, with respect to a determination under subparagraph (D) or (E)(i) of such paragraph, of not more than $100,000 for each such determination, except with respect to a determination under subparagraph (E),1 an assessment of not more than the amount claimed by such plan or plan sponsor based upon the misrepresentation or falsified information involved, plus, with respect to a determination under paragraph (1)(B), double the excess amount charged in violation of such paragraph (and the excess amount charged shall be deducted from the penalty and returned to the individual concerned), and plus, with respect to a determination under paragraph (1)(D), $15,000 for each individual not enrolled as a result of the practice involved,
(B) suspension of enrollment of individuals under this part after the date the Secretary notifies the organization of a determination under paragraph (1) and until the Secretary is satisfied that the basis for such determination has been corrected and is not likely to recur, or
(C) suspension of payment to the organization under this part for individuals enrolled after the date the Secretary notifies the organization of a determination under paragraph (1) and until the Secretary is satisfied that the basis for such determination has been corrected and is not likely to recur.
(3) Other intermediate sanctions
(A) Civil money penalties of not more than $25,000 for each determination under subsection (c)(2) if the deficiency that is the basis of the determination has directly adversely affected (or has the substantial likelihood of adversely affecting) an individual covered under the organization's contract.
(B) Civil money penalties of not more than $10,000 for each week beginning after the initiation of civil money penalty procedures by the Secretary during which the deficiency that is the basis of a determination under subsection (c)(2) exists.
(C) Suspension of enrollment of individuals under this part after the date the Secretary notifies the organization of a determination under subsection (c)(2) and until the Secretary is satisfied that the deficiency that is the basis for the determination has been corrected and is not likely to recur.
(D) Civil monetary penalties of not more than $100,000, or such higher amount as the Secretary may establish by regulation, where the finding under subsection (c)(2)(A) is based on the organization's termination of its contract under this section other than at a time and in a manner provided for under subsection (a).
The Secretary may terminate a contract with a Medicare+Choice organization under this section in accordance with formal investigation and compliance procedures established by the Secretary under which-
(A) the Secretary provides the organization with the reasonable opportunity to develop and implement a corrective action plan to correct the deficiencies that were the basis of the Secretary's determination under subsection (c)(2); and
(B) the Secretary provides the organization with reasonable notice and opportunity for hearing (including the right to appeal an initial decision) before terminating the contract.
To facilitate the offering of Medicare+Choice plans under contracts between Medicare+Choice organizations and employers, labor organizations, or the trustees of a fund established by one or more employers or labor organizations (or combination thereof) to furnish benefits to the entity's employees, former employees (or combination thereof) or members or former members (or combination thereof) of the labor organizations, the Secretary may waive or modify requirements that hinder the design of, the offering of, or the enrollment in such Medicare+Choice plans.
To facilitate the offering of MA plans by employers, labor organizations, or the trustees of a fund established by one or more employers or labor organizations (or combination thereof) to furnish benefits to the entity's employees, former employees (or combination thereof) or members or former members (or combination thereof) of the labor organizations, the Secretary may waive or modify requirements that hinder the design of, the offering of, or the enrollment in such MA plans. Notwithstanding section 1395w–21(g) of this title, an MA plan described in the previous sentence may restrict the enrollment of individuals under this part to individuals who are beneficiaries and participants in such plan.
(Aug. 14, 1935, ch. 531, title XVIII, §1857, as added Pub. L. 105–33, title IV, §4001, Aug. 5, 1997, 111 Stat. 319 ; amended Pub. L. 106–113, div. B, §1000(a)(6) [title V, §§513(a), (b)(1), 522(a)], Nov. 29, 1999, 113 Stat. 1536 , 1501A-383, 1501A-387; Pub. L. 106–554, §1(a)(6) [title VI, §§617(a), 623(a)], Dec. 21, 2000, 114 Stat. 2763 , 2763A-561, 2763A-566; Pub. L. 108–173, title II, §§222(j), (k), (l)(3)(C), 237(c), title IX, §900(e)(1)(I), Dec. 8, 2003, 117 Stat. 2205 , 2207, 2213, 2372; Pub. L. 110–275, title I, §§164(d)(2), 171(b), 172(a)(2), 173(b), July 15, 2008, 122 Stat. 2574 , 2580, 2581; Pub. L. 111–148, title VI, §6408(b), Mar. 23, 2010, 124 Stat. 771 ; Pub. L. 111–152, title I, §1103, Mar. 30, 2010, 124 Stat. 1047 ; Pub. L. 114–255, div. C, title XVII, §17001(b), Dec. 13, 2016, 130 Stat. 1330 .)
2016-Subsec. (h)(3). Pub. L. 114–255 added par. (3).
2010-Subsec. (d)(2)(A). Pub. L. 111–148, §6408(b)(1)(A), inserted "timely" before "inspect".
Subsec. (d)(2)(B). Pub. L. 111–148, §6408(b)(1)(B), inserted "timely" before "audit and inspect".
Subsec. (g)(1). Pub. L. 111–148, §6408(b)(2)(C), inserted at end of concluding provisions "The Secretary may provide, in addition to any other remedies authorized by law, for any of the remedies described in paragraph (2), if the Secretary determines that any employee or agent of such organization, or any provider or supplier who contracts with such organization, has engaged in any conduct described in subparagraphs (A) through (K) of this paragraph."
Subsec. (g)(1)(H) to (K). Pub. L. 111–148, §6408(b)(2), added subpars. (H) to (K).
Subsec. (g)(2)(A). Pub. L. 111–148, §6408(b)(3), inserted "except with respect to a determination under subparagraph (E), an assessment of not more than the amount claimed by such plan or plan sponsor based upon the misrepresentation or falsified information involved," after "for each such determination,".
2008-Subsec. (d)(6). Pub. L. 110–275, §164(d)(2), added par. (6).
Subsec. (f)(3). Pub. L. 110–275, §171(b), added par. (3).
Subsec. (f)(3)(B). Pub. L. 110–275, §172(a)(2), added subpar. (B).
Subsec. (f)(3)(C). Pub. L. 110–275, §173(b), added subpar. (C).
2003-Subsec. (d)(1). Pub. L. 108–173, §222(l)(3)(C), substituted "and costs, including allowable costs under section 1395w–27a(c) of this title" for ", costs, and computation of the adjusted community rate".
Subsec. (d)(4)(A)(ii). Pub. L. 108–173, §900(e)(1)(I), substituted "Secretary" for "Health Care Financing Administration".
Subsec. (e)(2)(A). Pub. L. 108–173, §222(k)(1), inserted "and a PDP sponsor under part D" after "organization".
Subsec. (e)(2)(B). Pub. L. 108–173, §222(k)(2), inserted "and each PDP sponsor with a contract under part D" after "contract under this part", "or sponsor's" after "organization's", and ", section 1395w–101(c) of this title," after "information)".
Subsec. (e)(2)(C). Pub. L. 108–173, §222(k)(3), inserted "and ending with fiscal year 2005" after "beginning with fiscal year 2001", "and for each fiscal year beginning with fiscal year 2006 an amount equal to $200,000,000," after "$100,000,000,", and "and section 1395w–112(b)(3)(D) of this title" after "under this paragraph".
Subsec. (e)(2)(D)(i). Pub. L. 108–173, §222(k)(4)(A), inserted "and section 1395w–101(c) of this title" after "section 1395w–21 of this title".
Subsec. (e)(2)(D)(ii)(III). Pub. L. 108–173, §222(k)(4)(B), struck out "and" at end.
Subsec. (e)(2)(D)(ii)(IV). Pub. L. 108–173, §222(k)(4)(C), substituted "each succeeding fiscal year before fiscal year 2006; and" for "each succeeding fiscal year."
Subsec. (e)(2)(D)(ii)(V). Pub. L. 108–173, §222(k)(4)(D), added subcl. (V).
Subsec. (e)(2)(F). Pub. L. 108–173, §222(k)(5), added subpar. (F).
Subsec. (e)(3). Pub. L. 108–173, §237(c), added par. (3).
Subsec. (i). Pub. L. 108–173, §222(j), designated existing provisions as par. (1), inserted heading, and added par. (2).
2000-Subsec. (g)(3)(D). Pub. L. 106–554, §1(a)(6) [title VI, §623(a)], added subpar. (D).
Subsec. (i). Pub. L. 106–554, §1(a)(6) [title VI, §617(a)], added subsec. (i).
1999-Subsec. (c)(4). Pub. L. 106–113, §1000(a)(6) [title V, §513(b)(1)(B), (C)], designated existing provisions as subpar. (A), inserted heading, realigned margins, and added subpar. (B).
Pub. L. 106–113, §1000(a)(6) [title V, §513(a), (b)(1)(A)], substituted "2-year period" for "5-year period" and "except as provided in subparagraph (B) and except in such other circumstances" for "except in circumstances".
Subsec. (e)(2)(B). Pub. L. 106–113, §1000(a)(6) [title V, §522(a)(1)], substituted "Any amounts collected shall be available without further appropriation to the Secretary for" for "Any amounts collected are authorized to be appropriated only for".
Subsec. (e)(2)(C). Pub. L. 106–113, §1000(a)(6) [title V, §522(a)(2)], amended heading and text of subpar. (C) generally. Prior to amendment, text read as follows: "For any fiscal year, the fees authorized under subparagraph (B) are contingent upon enactment in an appropriations act of a provision specifying the aggregate amount of fees the Secretary is directed to collect in a fiscal year. Fees collected during any fiscal year under this paragraph shall be deposited and credited as offsetting collections."
Subsec. (e)(2)(D)(ii)(II). Pub. L. 106–113, §1000(a)(6) [title V, §522(a)(3)(A)], struck out "and" after semicolon.
Subsec. (e)(2)(D)(ii)(III). Pub. L. 106–113, §1000(a)(6) [title V, §522(a)(3)(B)], substituted "; and" for "and each subsequent fiscal year."
Subsec. (e)(2)(D)(ii)(IV). Pub. L. 106–113, §1000(a)(6) [title V, §522(a)(3)(C)], added subcl. (IV).
Subsec. (e)(2)(E). Pub. L. 106–113, §1000(a)(6) [title V, §522(a)(4)], added subpar. (E).
Pub. L. 110–275, title I, §164(g), July 15, 2008, 122 Stat. 2575 , provided that: "The amendments made by subsections (c)(1), (d), and (e)(1) [amending this section and section 1395w–28 of this title] shall apply to plan years beginning on or after January 1, 2010, and shall apply to all specialized Medicare Advantage plans for special needs individuals regardless of when the plan first entered the Medicare Advantage program under part C of title XVIII of the Social Security Act [42 U.S.C. 1395w–21 et seq.]."
Pub. L. 110–275, title I, §171(c), July 15, 2008, 122 Stat. 2580 , provided that: "The amendments made by this section [amending this section and section 1395w–112 of this title] shall apply to plan years beginning on or after January 1, 2010."
Pub. L. 110–275, title I, §172(b), July 15, 2008, 122 Stat. 2581 , provided that: "The amendments made by this section [amending this section and section 1395w–112 of this title] shall apply to plan years beginning on or after January 1, 2010."
Pub. L. 110–275, title I, §173(c), July 15, 2008, 122 Stat. 2581 , provided that: "The amendments made by this section [amending this section and section 1395w–112 of this title] shall apply to plan years beginning on or after January 1, 2009."
Pub. L. 106–554, §1(a)(6) [title VI, §617(b)], Dec. 21, 2000, 114 Stat. 2763 , 2763A-562, provided that: "The amendment made by subsection (a) [amending this section] shall apply with respect to years beginning with 2001."
Pub. L. 106–554, §1(a)(6) [title VI, §623(b)], Dec. 21, 2000, 114 Stat. 2763 , 2763A-566, provided that: "The amendment made by subsection (a) [amending this section] shall apply to terminations occurring after the date of the enactment of this Act [Dec. 21, 2000]."
Pub. L. 106–113, div. B, §1000(a)(6) [title V, §513(c)], Nov. 29, 1999, 113 Stat. 1536 , 1501A-383, provided that: "The amendments made by this section [amending this section] apply to contract terminations occurring before, on, or after the date of the enactment of this Act [Nov. 29, 1999]."
Pub. L. 106–113, div. B, §1000(a)(6) [title V, §522(b)], Nov. 29, 1999, 113 Stat. 1536 , 1501A-387, provided that: "The amendments made by subsection (a) [amending this section] apply to fees charged on or after January 1, 2001. The Secretary of Health and Human Services may not increase the fees charged under section 1857(e)(2) of the Social Security Act (42 U.S.C. 1395w–27(e)(2)) for the 3-month period beginning with October 2000 above the level in effect during the previous 9-month period."
Pub. L. 106–113, div. B, §1000(a)(6) [title V, §513(b)(2)], Nov. 29, 1999, 113 Stat. 1536 , 1501A-383, provided that: "Nothing in the amendment made by paragraph (1)(C) [amending this section] shall be construed to affect the authority of the Secretary of Health and Human Services to provide for exceptions in addition to the exception provided in such amendment, including exceptions provided under Operational Policy Letter #103 (OPL99.103)."
Pub. L. 114–255, div. C, title XVII, §17001(a), Dec. 13, 2016, 130 Stat. 1330 , provided that: "Consistent with the studies provided under the IMPACT Act of 2014 (Public Law 113–185) [see Tables for classification], it is the intent of Congress-
"(1) to continue to study and request input on the effects of socioeconomic status and dual-eligible populations on the Medicare Advantage STARS rating system before reforming such system with the input of stakeholders; and
"(2) pending the results of such studies and input, to provide for a temporary delay in authority of the Centers for Medicare & Medicaid Services (CMS) to terminate Medicare Advantage plan contracts solely on the basis of performance of plans under the STARS rating system."
Pub. L. 111–148, title III, §3207, Mar. 23, 2010, 124 Stat. 459 , provided that: "For plan year 2011 and subsequent plan years, to the extent that the Secretary of Health and Human Services is applying the 2008 service area extension waiver policy (as modified in the April 11, 2008, Centers for Medicare & Medicaid Services' memorandum with the subject '2009 Employer Group Waiver-Modification of the 2008 Service Area Extension Waiver Granted to Certain MA Local Coordinated Care Plans') to Medicare Advantage coordinated care plans, the Secretary shall extend the application of such waiver policy to employers who contract directly with the Secretary as a Medicare Advantage private fee-for-service plan under section 1857(i)(2) of the Social Security Act (42 U.S.C. 1395w–27(i)(2)) and that had enrollment as of October 1, 2009."
Pub. L. 108–173, title I, §107(d), Dec. 8, 2003, 117 Stat. 2171 , directed the Secretary of Health and Human Services to provide for a study on the feasibility and advisability of providing for contracting with PDP sponsors and MA organizations under this part and part D of this subchapter on a multi-year basis, and to submit to Congress a report on such study not later than Jan. 1, 2007.
Pub. L. 105–33, title IV, §4002(g), Aug. 5, 1997, 111 Stat. 330 , provided that: "Section 1857(e)(2) of the Social Security Act [42 U.S.C. 1395w–27(e)(2)] (requiring contribution to certain costs related to the enrollment process comparative materials) applies to demonstrations with respect to which enrollment is effected or coordinated under section 1851 of such Act [42 U.S.C. 1395w–21]."
1 So in original. Probably means subpar. (E) of par. (1).