[Federal Register: December 30, 2004 (Volume 69, Number 250)]
[Rules and Regulations]
[Page 78336-78338]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30de04-14]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 422
[CMS-4041-IFC]
RIN 0938-AK71
Medicare Program; Modifications to Managed Care Rules
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Interim final rule with comment period.
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SUMMARY: This interim final rule with comment period corrects a
technical error made in the August 22, 2003 final rule ``Modifications
to Medicare Rules'' (68 FR 50840).
DATES: This interim final rule with comment period is effective January
31, 2005.
Comment date: To ensure consideration, comments must be received at
one of the addresses provided below, no later than 5 p.m. on February
28, 2005.
ADDRESSES: In commenting, please refer to file code CMS-4041-IFC.
Because of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of three ways (no duplicates,
please):
1. Electronically. You may submit electronic comments to http://www.cms.hhs.gov/regulations/ecomments
or to www.regulations.gov
(attachments should be in Microsoft Word, WordPerfect, or Excel;
however, we prefer Microsoft Word).
2. By mail. You may mail written comments (one original and two
copies) to the following address ONLY: Centers for Medicare & Medicaid
Services, Department of Health and Human Services, Attention: CMS-4041-
IFC, P.O. Box 8010, Baltimore, MD 21244-1850.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By hand or courier. If you prefer, you may deliver (by hand or
courier) your written comments (one original and two copies) before the
close of the comment period to one of the following addresses. If you
intend to deliver your comments to the Baltimore address, please call
telephone number (410) 786-7197 in advance to schedule your arrival
with one of our staff members. Room 445-G, Hubert H. Humphrey Building,
200 Independence Avenue, SW., Washington, DC 20201; or 7500 Security
Boulevard, Baltimore, MD 21244-1850.
(Because access to the interior of the HHH Building is not readily
available to persons without Federal Government identification,
commenters are encouraged to leave their comments in the CMS drop
slots located in the main lobby of the building. A stamp-in clock is
available for persons wishing to retain a proof of filing by
stamping in and retaining an extra copy of the comments being
filed.)
Comments mailed to the addresses indicated as appropriate for hand
or courier delivery may be delayed and received after the comment
period.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Tony Hausner, (410) 786-1093.
SUPPLEMENTARY INFORMATION:
Submitting Comments: We welcome comments from the public on all
issues set forth in this rule to assist us in fully considering issues
and developing policies. You can assist us by referencing the file code
CMS-4041-IFC and the specific ``issue identifier'' that precedes the
section on which you choose to comment.
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. After the close of the
comment period, CMS posts all electronic comments received before the
close of the comment period on its public website. Comments received
timely will be available for public inspection as they are received,
generally beginning approximately 3 weeks after publication of a
document, at the headquarters of the Centers for Medicare & Medicaid
Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday
through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an
appointment to view public comments, phone (410) 786-7197.
I. Background
[If you choose to comment on issues in this section, please include
the caption ``BACKGROUND'' at the beginning of your comments.]
On August 22, 2003, we published a final rule titled,
``Modifications to Managed Care Rules'' (68 FR 50840), which
implemented the Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000 (BIPA), which included certain changes to the
intermediate sanctions regulations at 42 CFR 422.758.
In that final rule, we made limited organizational changes to the
intermediate sanctions regulations (68 FR 50841); however, when making
those organizational changes, we made technical errors in Sec. 422.752
and Sec. 422.758. Specifically, the $25,000 Civil Money Penalty (CMP)
that had been described at Sec. 422.758(a) was inadvertently omitted
in the revised version of the intermediate sanctions regulation. We
note that these CMPs are set forth at section 1857(g)(3)(A) of the
Social Security Act (Act) and provide authority for the Secretary to
apply up to a $25,000 penalty for each determination under section
1857(c)(2) that a deficiency not otherwise described in section
1857(g)(1) of the Act exists and has directly and adversely affected
(or has the substantial likelihood of adversely affecting) one or more
Medicare Advantage (MA) enrollees.
The omission of the $25,000 CMP from Sec. 422.758(a) occurred
because we included language in Sec. 422.758(a) that was intended to
replace the first two sentences of Sec. 422.752(a). This language
clarifies that CMS does not have CMP authority in the case of the
violations set forth in Sec. 422.752(a). The OIG has CMP authority in
the case of these violations. In the preamble to our August 22, 2003
final rule, we noted that we were changing Sec. 422.752(a) for this
purpose (68 FR 50851). However, the regulatory text was inadvertently
placed at Sec. 422.758(a).
We also have determined that the reference to Sec. 422.756(f)(3)
in existing Sec. 422.758(b) more appropriately belongs in the
introductory text of Sec. 422.758 because our authority to impose CMPs
in the amounts set forth in all of Sec. 422.758 is described in Sec.
422.756(f)(3). Section Sec. 422.758(b) also contains a redundant
reference to Sec. 422.752(b), which we are eliminating, in this
interim final rule with comment period, to avoid confusion.
Section 902 of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA) amended section 1871(a) of the Act and
requires the Secretary, in consultation with the Director of the Office
of Management and Budget, to establish and publish timelines for the
publication of Medicare final regulations based on the previous
publication of a Medicare proposed or interim final regulation. Section
902 of the MMA also states that the timelines for these regulations may
vary but shall not exceed 3 years after publication of the preceding
proposed or interim final
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regulation except under exceptional circumstances.
This interim final rule finalizes provisions set forth in the
August 22, 2003 final rule. We will publish the final rule within the
3-year time limit imposed by section 902 of the MMA. Therefore, we
believe that the interim final rule is in accordance with the Congress'
intent to ensure timely publication of final regulations.
II. Provisions of the Interim Final Rule
[If you choose to comment on issues in this section, please include
the caption ``PROVISIONS OF THE INTERIM FINAL RULE'' at the
beginning of your comments.]
To ensure that the Medicare regulations are an accurate reflection
of our current statutory authority to impose CMPs, in this interim
final rule with comment period, we are correcting Sec. 422.758 to
state that if we make a determination under Sec. 422.752(b), based on
any determination under Sec. 422.510(a) except a determination under
Sec. 422.510(a)(4), we may impose civil money penalties, pursuant to
Sec. 422.756(f)(3), in the following amounts:
If the deficiency on which the determination is based has
directly adversely affected (or has the substantial likelihood of
adversely affecting) one or more MA enrollees--up to $25,000 for each
determination.
For each week that a deficiency remains uncorrected after
the week in which the MA organization receives CMS' notice of the
determination--up to $10,000.
If we make a determination, based on a determination under
Sec. 422.510(a)(1), that an MA organization has terminated its
contract with us in a manner other than as described under Sec.
422.512--$250 per Medicare enrollee from the terminated MA plan or
plans at the time the MA organization terminated its contract, or
$100,000, whichever is greater.
In addition, we are correcting Sec. 422.752(a) to incorporate the
changes that we intended to make in the August 22, 2003 final rule (and
which currently appear at Sec. 422.758(a)) to provide that for the
violations listed in Sec. 422.752(a), we may impose the sanctions
specified in Sec. 422.750(a)(2), (a)(3), or (a)(4) on any MA
organization that has a contract in effect. The MA organization may
also be subject to other applicable remedies available under law.
III. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
IV. Waiver of Proposed Rulemaking
We ordinarily publish a notice of proposed rulemaking in the
Federal Register and invite public comment on the proposed rule. The
notice of proposed rulemaking includes a reference to the legal
authority under which the rule is proposed, and the terms and
substances of the proposed rule or a description of the subjects and
issues involved. This procedure can be waived, however, if an agency
finds good cause that a notice-and-comment procedure is impracticable,
unnecessary, or contrary to the public interest and incorporates a
statement of the finding and its reasons in the rule issued.
We find for good cause that it is unnecessary to undertake notice
and comment procedures because this correcting amendment does not make
any substantive policy changes. This correcting amendment sets forth
self-implementing provisions of the Act (as described above) with
respect to the imposition of CMPs. Because the rule directly conforms
to the statute and does not articulate new requirements, we believe
that pursuing notice and comment is unnecessary. Moreover, because that
process could introduce confusion regarding our current authority to
impose CMPs, we find that pursuing that process would be both
impracticable and contrary to the public interest. Therefore, for good
cause, we waive notice and comment procedures under 5 U.S.C. 553(b)(B).
With respect to the requirement of a 60-day delay in the effective
date of any final rule under the Congressional Review Act (CRA) (see
U.S.C. section 801), the CRA provides that the 60-day delayed effective
date shall not apply to any rule ``which an agency for good cause finds
that notice and public procedure thereon are impracticable,
unnecessary, or contrary to the public interest.'' (See 5 U.S.C.
section 808(2).) For the reasons set forth above, we believe that
additional notice and comment rulemaking on this subject would be
impracticable, unnecessary, or contrary to the public interest.
Therefore, we do not believe that the CRA requires a 60-day delay in
the effective date of this final rule.
V. Collection of Information Requirements
This document does not impose information collection and
recordkeeping requirements. Consequently, it need not be reviewed by
the Office of Management and Budget under the authority of the
Paperwork Reduction Act of 1995.
VI. Regulatory Impact
[If you choose to comment on issues in this section, please include
the caption ``REGULATORY IMPACT'' at the beginning of your
comments.]
We have examined the impact of this rule as required by Executive
Order 12866 (September 1993, Regulatory Planning and Review), the
Regulatory Flexibility Act (RFA) (September 16, 1980, Pub. L. 96-354),
section 1102(b) of the Social Security Act, the Unfunded Mandates
Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.
Executive Order 12866 directs agencies to assess all costs and
benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, distributive impacts, and equity). A regulatory impact
analysis (RIA) must be prepared for major rules with economically
significant effects ($100 million or more in any 1 year). This rule
does not reach the economic threshold and thus is not considered a
major rule.
The RFA requires agencies to analyze options for regulatory relief
of small businesses. For purposes of the RFA, small entities include
small businesses, nonprofit organizations, and government agencies.
Most hospitals and most other providers and suppliers are small
entities, either by nonprofit status or by having revenues of $6
million to $29 million in any 1 year. Individuals and States are not
included in the definition of a small entity. We are not preparing an
analysis for the RFA because we have determined that this rule will not
have a significant economic impact on a substantial number of small
entities.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 604 for final rules
of the RFA. For purposes of section 1102(b) of the Act, we define a
small rural hospital as a hospital that is located outside of a
Metropolitan Statistical Area and has fewer than 100
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beds. We are not preparing an analysis for section 1102(b) of the Act
because we have determined that this rule will not have a significant
impact on the operations of a substantial number of small rural
hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule that may result in expenditure in any 1 year by State,
local, or tribal governments, in the aggregate, or by the private
sector, of $110 million. This interim final rule with comment period
does not have any costs associated with this requirement and will not
approach the Unfunded Mandates Reform Act threshold.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. Since this regulation does not impose any costs on State
or local governments, the requirements of E.O. 13132 are not
applicable.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
List of Subjects in 42 CFR Part 422
Administrative practice and procedure, Health facilities, Health
Maintenance Organizations (HMO), Medicare+Choice, Penalties, Privacy,
Provider-sponsored organizations (PSO), Reporting and recordkeeping
requirements.
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Accordingly, 42 CFR chapter IV is corrected by making the following
correcting amendments:
PART 422--MEDICARE ADVANTAGE PROGRAM
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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).
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2. Section 422.752(a) introductory text is revised to read as follows:
Sec. 422.752 Basis for imposing sanctions.
(a) All intermediate sanctions. For the violations listed in this
paragraph (a), we may impose the sanctions specified in Sec.
422.750(a)(2), (a)(3), or (a)(4) on any MA organization that has a
contract in effect. The MA organization may also be subject to other
applicable remedies available under law.
* * * * *
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3. Section 422.758 is revised to read as follows:
Sec. 422.758 Maximum amount of civil money penalties imposed by CMS.
If CMS makes a determination under Sec. 422.752(b), based on any
determination under Sec. 422.510(a) except a determination under Sec.
422.510(a)(4), CMS may impose civil money penalties, pursuant to Sec.
422.756(f)(3), in the following amounts:
(a) If the deficiency on which the determination is based has
directly adversely affected (or has the substantial likelihood of
adversely affecting) one or more Medicare Advantage enrollees--up to
$25,000 for each determination.
(b) For each week that a deficiency remains uncorrected after the
week in which the Medicare Advantage organization receives CMS' notice
of the determination--up to $10,000.
(c) If CMS makes a determination, based on a determination under
Sec. 422.510(a)(1) that a Medicare Advantage organization has
terminated its contract with CMS in a manner other than as described
under Sec. 422.512--$250 per Medicare enrollee from the terminated
Medicare Advantage plan or plans at the time the Medicare Advantage
organization terminated its contract, or $100,000, whichever is
greater.
Dated: June 23, 2004.
Mark B. McClellan,
Administrator, Centers for Medicare & Medicaid Services.
Approved: September 8, 2004.
Tommy G. Thompson,
Secretary.
[FR Doc. 04-28155 Filed 12-29-04; 8:45 am]
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