[Code of Federal Regulations]

[Title 45, Volume 1]

[Revised as of October 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 45CFR160.410]



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                        TITLE 45--PUBLIC WELFARE

 

                    SUBTITLE A--DEPARTMENT OF HEALTH

                           AND HUMAN SERVICES

 

PART 160_GENERAL ADMINISTRATIVE REQUIREMENTS--Table of Contents

 

              Subpart D_Imposition of Civil Money Penalties

 

Sec.  160.410  Affirmative defenses.



    (a) As used in this section, the following terms have the following 

meanings:

    Reasonable cause means circumstances that would make it unreasonable 

for the covered entity, despite the exercise of ordinary business care 

and prudence, to comply with the administrative simplification provision 

violated.

    Reasonable diligence means the business care and prudence expected 

from a person seeking to satisfy a legal requirement under similar 

circumstances.

    Willful neglect means conscious, intentional failure or reckless 

indifference to the obligation to comply with the administrative 

simplification provision violated.

    (b) The Secretary may not impose a civil money penalty on a covered 

entity for a violation if the covered entity establishes that an 

affirmative defense exists with respect to the violation, including the 

following:

    (1) The violation is an act punishable under 42 U.S.C. 1320d-6;

    (2) The covered entity establishes, to the satisfaction of the 

Secretary, that it did not have knowledge of the violation, determined 

in accordance with the federal common law of agency, and, by exercising 

reasonable diligence, would not have known that the violation occurred; 

or

    (3) The violation is--

    (i) Due to reasonable cause and not willful neglect; and

    (ii) Corrected during either:

    (A) The 30-day period beginning on the date the covered entity 

liable for



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the penalty knew, or by exercising reasonable diligence would have 

known, that the violation occurred; or

    (B) Such additional period as the Secretary determines to be 

appropriate based on the nature and extent of the failure to comply.