Rule2021-24672
Adjustment of Civil Monetary Penalties for Inflation and the Annual Civil Monetary Penalties Inflation Adjustment for 2021
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 15, 2021
Effective
November 15, 2021
Issuing agencies
Health and Human Services DepartmentCenters for Medicare & Medicaid ServicesChildren and Families Administration
Abstract
This final rule finalizes the provisions of the September 6, 2016 interim final rule that adjusts for inflation the maximum civil monetary penalty (CMP) amounts for all agencies within the Department of Health and Human Services (HHS) and updates certain agency-specific regulations. It also updates our required annual inflation-related increases to the CMP amounts in our regulations, under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015; adds references to new penalty authorities; and reflects technical changes to correct errors.
Full Text
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<title>Federal Register, Volume 86 Issue 217 (Monday, November 15, 2021)</title>
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[Federal Register Volume 86, Number 217 (Monday, November 15, 2021)]
[Rules and Regulations]
[Pages 62928-62943]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-24672]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of the Secretary
42 CFR Part 3
Centers for Medicare & Medicaid Services
42 CFR Parts 402, 403, 411, 412, 422, 423, 460, 483, 488, and 493
Office of the Inspector General
42 CFR Part 1003
Office of the Secretary
45 CFR Parts 79, 93, 102, 147, 150, 155, 156, 158, and 160
Administration for Children and Families
45 CFR Part 303
RIN 0991-AC0
Adjustment of Civil Monetary Penalties for Inflation and the
Annual Civil Monetary Penalties Inflation Adjustment for 2021
AGENCY: Office of the Assistant Secretary for Financial Resources,
Department of Health and Human Services (HHS).
ACTION: Final rule.
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SUMMARY: This final rule finalizes the provisions of the September 6,
2016 interim final rule that adjusts for inflation the maximum civil
monetary penalty (CMP) amounts for all agencies within the Department
of Health and Human Services (HHS) and updates certain agency-specific
regulations. It also updates our required annual inflation-related
increases to the CMP amounts in our regulations, under the Federal
Civil Penalties Inflation Adjustment Act Improvements Act of 2015; adds
references to new penalty authorities; and reflects technical changes
to correct errors.
DATES:
Effective date: This final rule is effective November 15, 2021.
Applicability date: The adjusted civil monetary penalty amounts
apply to penalties assessed on or after November 15, 2021, if the
violation occurred on or after November 2, 2015.
FOR FURTHER INFORMATION CONTACT: David Dasher, Deputy Assistant
Secretary, Office of Acquisitions, Office of the Assistant Secretary
for Financial Resources, Room 536-H, Hubert Humphrey Building, 200
Independence Avenue SW, Washington DC 20201; 202-205-0706.
SUPPLEMENTARY INFORMATION:
I. Background
The Federal Civil Penalties Inflation Adjustment Act Improvements
Act of 2015 (section 701 of Pub. L. 114-74) (the ``2015 Act'') amended
the Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L.
101-410, 104 Stat. 890 (1990)), which is intended to improve the
effectiveness of civil monetary penalties (CMPs) and to maintain the
deterrent effect of such penalties, requires agencies to adjust the
civil monetary penalties for inflation annually.
The Department of Health and Human Services (HHS) lists the CMP
authorities and the amounts administered by all of its agencies in
tabular form in 45 CFR 102.3, which was issued in an interim final rule
published in the September 6, 2016, Federal Register (81 FR 61538).
Annual adjustments were subsequently published on February 3, 2017 (82
FR 9175), October 11, 2018 (83 FR 51369), November 5, 2019 (84 FR
59549), and January 17, 2020 (85 FR 2869).
II. Provisions of the Final Rule
A. Finalization of the September 6, 2016 Interim Final Rule
In the September 6, 2016 Federal Register (81 FR 61538), HHS issued
a department-wide interim final rule (IFR) titled ``Adjustment of Civil
Monetary Penalties for Inflation'' that established new regulations at
45 CFR part 102 to adjust for inflation the maximum CMP amounts for the
various CMP authorities for all agencies within the Department. HHS
took this action to comply with the Federal Civil Penalties Inflation
Adjustment Act of 1990 (the Inflation Adjustment Act) (28 U.S.C. 2461
note 2(a)), as amended by the Federal Civil Penalties Inflation
Adjustment Act Improvements Act of 2015 (section 701 of the Bipartisan
Budget Act of 2015, (Pub. L.114-74), enacted on November 2, 2015). In
addition, the September 2016 IFR included updates to certain agency-
specific regulations to reflect the new provisions governing the
adjustment of civil monetary penalties for inflation in 45 CFR part
102.
One of the purposes of the Inflation Adjustment Act was to create a
mechanism to allow for regular inflationary adjustments to federal
civil monetary penalties. Section 2(b)(1) of the Inflation Adjustment
Act. The 2015 amendments removed an inflation update exclusion that
previously applied to the Social Security Act as
[[Page 62929]]
well as to the Occupational Safety and Health Act. The 2015 amendments
also ``reset'' the inflation calculations by excluding prior
inflationary adjustments under the Inflation Adjustment Act and
requiring agencies to identify, for each penalty, the year and
corresponding amount(s) for which the maximum penalty level or range of
minimum and maximum penalties was established (that is, originally
enacted by Congress) or last adjusted other than pursuant to the
Inflation Adjustment Act. In accordance with section 4 of the Inflation
Adjustment Act, agencies were required to: (1) Adjust the level of
civil monetary penalties with an initial ``catch-up'' adjustment
through an interim final rulemaking to take effect by August 1, 2016;
and (2) make subsequent annual adjustments for inflation.
In the September 2016 interim final rule, HHS adopted new
regulations at 45 CFR part 102 to govern adjustment of civil monetary
penalties for inflation. The regulation at 45 CFR 102.1 provides that
part 102 applies to each statutory provision under the laws
administered by HHS (including the Centers for Medicare & Medicaid
Services (CMS)) concerning CMPs, and that the regulations in part 102
supersede existing HHS regulations setting forth CMP amounts. The CMPs
and the adjusted penalty amounts administered by all HHS agencies are
listed in tabular form in 45 CFR 102.3. In addition to codifying the
adjusted penalty amounts identified in Sec. 102.3, the HHS-wide
interim final rule included several technical conforming updates to
certain agency-specific regulations, including various CMS regulations,
to identify their updated information, and incorporate a cross-
reference to the location of HHS-wide regulations.
In the September 12, 2017 Federal Register (82 FR 42748), CMS
published a correcting amendment that corrected a limited number of
technical and typographical errors identified in the CMS provisions of
the September 6, 2016 IFR.
The Medicare provisions included in the September 2016 IFR are
subject to requirements of section 1871(a) of the Social Security Act
(the Act) which sets forth certain procedures for promulgating
regulations necessary to carry out the administration of the insurance
programs under Title XVIII of the Act. Section 1871(a)(3)(A) of the Act
requires the Secretary, in consultation with the Director of the Office
of Management and Budget (OMB), to establish a regular timeline for the
publication of final regulations based on the previous publication of a
proposed rule or an interim final rule. In accordance with section
1871(a)(3)(B) of the Act, such timeline may vary among different rules,
based on the complexity of the rule, the number and scope of the
comments received, and other relevant factors. However, the timeline
for publishing the final rule cannot exceed 3 years from the date of
publication of the proposed or interim final rule, unless there are
exceptional circumstances. After consultation with the Director of OMB,
the Secretary published a notice, which appeared in the December 30,
2004 Federal Register (69 FR 78442), establishing a general 3-year
timeline for publishing Medicare final rules after the publication of a
proposed or interim final rule.
Because the conforming changes to the Medicare provisions were part
of a larger, omnibus departmental interim final rule, we inadvertently
missed setting a target date for the final rule to make permanent the
changes to the Medicare regulations in accordance with section
1871(a)(3)(A) of the Act and the procedures outlined in the December
2004 notice. Consistent with section 1871(a)(3)(C) of the Act, we
published notices of continuation extending the effectiveness of the
technical conforming changes to the Medicare regulations that were
implemented through interim final rule and to allow time to publish a
final rule (see the January 2, 2020 (85 FR 7) and September 8, 2020 (85
FR 55385) continuation documents). The extended time was needed to
allow for coordination between CMS and the Department to issue a final
rule and to avoid the potential for confusion between 45 CFR part 102,
which established the civil monetary payment amounts, and the Medicare
regulations subject to the timing requirements in section 1871(a)(3)(C)
of the Act, which would otherwise cause the regulation to revert to the
language that was used prior to the Inflation Adjustment Act.
In this final rule, we are finalizing the provisions of the
September 6, 2016 IFR without modification. Because the provisions were
established via interim final rulemaking, finalizing the provisions is
pro forma for all agencies except CMS. Given the statutory requirements
specified previously, finalization of the September 2016 IFR
permanently establishes the interim final regulatory provisions for the
Medicare program.
B. Calculation of Annual Inflation Adjustment
The annual inflation adjustment for each applicable CMP is
determined using the percent increase in the Consumer Price Index for
all Urban Consumers (CPI-U) for the month of October of the year in
which the amount of each CMP was most recently established or modified.
In the December 23, 2020, Office of Management and Budget (OMB)
Memorandum for the Heads of Executive Agencies and Departments, M-21-
10, ``Implementation of the Penalty Inflation Adjustments for 2021,
Pursuant to the Federal Civil Penalties Inflation Adjustment Act
Improvements Act of 2015,'' OMB published the multiplier for the
required annual adjustment. The cost-of-living adjustment multiplier
for 2021, based on the CPI-U for the month of October 2020, not
seasonally adjusted, is 1.01182. The multiplier is applied to each
applicable penalty amount that was updated and published for fiscal
year (FY) 2020 and is rounded to the nearest dollar.
C. Other Revisions
In addition to the inflation adjustments for 2021, this final rule
updates the table in 45 CFR 102.3 to add references to new, applicable
civil money penalty authorities that were established or implemented
since the publication of the January 17, 2020 update and that are being
updated in this rule. The rule also corrects several technical errors
to regulatory references in the table and updates descriptions for
clarification and accuracy.
First, a CMS final rule, ``Medicare and Medicaid Programs: CY 2020
Hospital Outpatient PPS Policy Changes and Payment Rates and Ambulatory
Surgical Center Payment System Policy Changes and Payment Rates. Price
Transparency Requirements for Hospitals to Make Standard Charges
Public'' (84 FR 65524, November 27, 2019), effective January 1, 2021,
finalized a new provision, codified at 45 CFR 180.90. That section
establishes CMPs associated with a hospital's noncompliance with price
transparency disclosure and display requirements, and the table has
been modified to reflect this requirement.
Second, section 3202(b) of the Coronavirus Aid, Relief, and
Economic Security Act (CARES Act) (Pub. L. 116-136) added a requirement
that each provider of a diagnostic test for COVID-19 make public the
cash price for such test on the provider's public internet site, and
authorized the Secretary to impose a CMP on a provider that fails to
comply. Rulemaking entitled ``Additional Policy and Regulatory
Revisions in Response to the COVID-19 Public Health Emergency'' (85 FR
71142, November 6, 2020) implemented this statutory requirement by
[[Page 62930]]
establishing a provision at 45 CFR 182.70, allowing for imposition of a
CMP, and the table has been modified to reflect this requirement.
Third, in a CMS interim final rule with comment period entitled
``Medicare and Medicaid Programs, Clinical Laboratory Improvement
Amendments (CLIA), and Patient Protection and Affordable Care Act;
Additional Policy and Regulatory Revisions in Response to the COVID-19
Public Health Emergency'' (85 FR 54873 through 54874, September 2,
2020), CMS established requirements for all CLIA laboratories to report
COVID-19 test results to the Secretary in such form and manner, and at
such timing and frequency, as the Secretary may prescribe during the
COVID-19 Public Health Emergency. Failure to report test results as
required results in condition level deficiencies for which CMPs or
other penalties may apply. The table has been modified to reflect this
requirement. Also in this interim final rule, CMS codified new
enforcement requirements at 42 CFR 488.447 establishing CMP amounts
that may be imposed against long term care facilities that fail to
report COVID-19 related data as required in 42 CFR 483.80(g)(1) and
(2). The table has been modified to reflect these requirements.
Finally, the following technical errors were identified and are
corrected in the table at 45 CFR 102.3:
<bullet> The regulatory reference of 42 CFR. 1003.210(a)(5)
implementing 42 U.S.C. 1395cc(g) which was inadvertently omitted from
the regulation and is added.
<bullet> The two descriptions of 42 U.S.C. 1395dd(d)(1) are revised
for more accuracy because penalties for a responsible physician, unlike
penalties for a hospital, are not tied to the number of beds in the
hospital (see 42 U.S.C. 1395dd(d)(1)(B)).
<bullet> The first description tied to 42 U.S.C. 1395mm(i)(6)(B)(i)
is revised from ``is such plan'' to ``if such plan''.
<bullet> The regulatory references tied to 42 U.S.C. 1395ss(a)(2),
(p)(8), (p)(9)(C), (q)(5)(C), (r)(6)(A), (s)(4), (t)(2) incorrectly
referred to 42 CFR part 405 and are corrected to refer to 42 CFR part
402.
<bullet> The first set of regulatory references tied to 42 U.S.C.
1395ss(p)(8) are expanded to also include 42 CFR 402.105(f)(2), which
was inadvertently omitted, and the corresponding description is revised
to replace ``any person'' with ``someone other than issuer'' for
greater accuracy and clarification.
<bullet> The description for the second set of regulatory
references tied to 42 U.S.C. 1395ss(p)(8) is revised to replace ``any
person'' with ``an issuer'' for greater accuracy and clarification.
<bullet> The first set of regulatory references tied to 42 U.S.C.
1395ss(p)(9)(C) are expanded to also include 42 CFR 402.105(f)(3) and
(4), which were inadvertently omitted, and the corresponding
description is revised to replace ``any person'' with ``someone other
than issuer'' for greater accuracy and clarification.
<bullet> The description for the second set of regulatory
references tied to 42 U.S.C. 1395ss(p)(9)(C) is revised to replace
``any person'' with ``an issuer'' for greater accuracy and
clarification.
<bullet> The description for 42 U.S.C. 18081(c)(2) is being revised
to ``Failure to comply with ACA requirements related to risk
adjustment, reinsurance, risk corridors, Exchanges (including QHP
standards) and other ACA Subtitle D standards; Penalty for violations
of rules or standards of behavior associated with issuer compliance
with risk adjustment, reinsurance, risk corridors, Exchanges (including
QHP standards) and other ACA Subtitle D standards. (42 U.S.C. 300gg-
22(b)(2)(C))'' for greater accuracy and clarification.
<bullet> Reference to the existing CMPs authorized under 42 U.S.C.
1395m-1(a) and 42 CFR 414.504(e) for a reporting entity that has failed
to report or made a misrepresentation or omission in reporting
applicable information was inadvertently omitted from the prior annual
updates and the regulation is modified to include this authority and
the 2021 adjusted amount. CMS, in separate rulemaking, made the initial
catch-up adjustment for this amount in accordance with the 2015 Act on
June 23, 2016 (81 FR 41036, 41069) which was $10,017, and noted that
subsequent inflationary adjustments would be made to this amount
annually.
++ The adjusted amounts applying the multiplier for each year
beginning in 2017 through 2020 \1\ are as follows:
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\1\ The published multiplier for 2017 is 1.01636 (M-17-11,
Implementation of the 2017 annual adjustment pursuant to the Federal
Civil Penalties Inflation Adjustment Act Improvements Act of 2015,
published December 16, 2016); for 2018 it is 1.02041 (M-18-03,
Implementation of Penalty Inflation Adjustments for 2018 pursuant to
the Federal Civil Penalties Inflation Adjustment Act Improvements
Act of 2015, published December 15, 2017); for 2019 it is 1.02522
(M-19-04, Implementation of Penalty Inflation Adjustments for 2019
pursuant to the Federal Civil Penalties Inflation Adjustment Act
Improvements Act of 2015, published December 14, 2018); and for 2020
it is 1.01764 (M-20-05, Implementation of Penalty Inflation
Adjustments for 2020 pursuant to the Federal Civil Penalties
Inflation Adjustment Act Improvements Act of 2015, published
December 16, 2019).
--The 2017 adjusted amount is $10,181 ($10,017 x 1.01636).
--The 2018 adjusted amount is $10,389 ($10,181 x 1.02041).
--The 2019 adjusted amount is $10,651 ($10,389 x 1.02522).
--The 2020 adjusted amount is $10,839 ($10,651 x 1.01764).
++ The 2021 adjusted amount is calculated by applying the 2021
multiplier to $10,839 and this adjusted amount is reflected in the
table of the regulation at 45 CFR 102.3.
III. Statutory and Executive Order Reviews and Waiver of Proposed
Rulemaking
The 2015 Act requires Federal agencies to publish annual penalty
inflation adjustments notwithstanding section 553 of the Administrative
Procedure Act (APA).
Section 4(a) of the 2015 Act directs Federal agencies to publish
annual adjustments no later than January 15th of each year thereafter.
In accordance with section 553 of the APA, most rules are subject to
notice and comment and are effective no earlier than 30 days after
publication in the Federal Register. However, section 4(b)(2) of the
2015 Act provides that each agency shall make the annual inflation
adjustments ``notwithstanding section 553'' of the APA. According to
OMB's Memorandum M-21-10, the phrase ``notwithstanding section 553'' in
section 4(b)(2) of the 2015 Act means that ``the public procedure the
APA generally requires (that is, notice, an opportunity for comment,
and a delay in effective date) is not required for agencies to issue
regulations implementing the annual adjustment.''
Consistent with the language of the 2015 Act and OMB's
implementation guidance, the inflation adjustments set out in this rule
is not subject to notice and an opportunity for public comment and will
be effective immediately upon publication. Additionally, HHS finds that
notice and comment procedures would be impracticable and unnecessary
under the APA for making the statutorily required inflation updates to
newly established penalty amounts and for the ministerial and technical
changes in this rule. In addition, HHS is waiving notice and comment
for the non-substantive technical corrections set out in this final
rule. HHS finds good cause for issuing these changes as a final rule
without prior notice and comment because these changes only update the
regulation to add the new CMP authorities that will be adjusted in
accordance with the 2015 Act which were implemented since the last
update and to add additional technical clarifying edits to descriptions
and correcting inadvertent omissions
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and typographical errors. For these same reasons HHS also finds good
cause to make the final rule effective upon publication.
Pursuant to OMB Memorandum M-21-10, HHS has determined that the
annual inflation adjustment to the civil monetary penalties in its
regulations does not trigger any requirements under procedural statutes
and Executive Orders that govern rulemaking procedures.
IV. Effective and Applicability Dates
This rule is effective on the date specified in the DATES section
of this final rule. The adjusted civil monetary penalty amounts apply
to penalties assessed on or after date specified in the DATES section
of this final rule, if the violation occurred on or after November 2,
2015. If the violation occurred before November 2, 2015, or a penalty
was assessed before September 6, 2016, the pre-adjustment civil penalty
amounts in effect before September 6, 2016, will apply.
List of Subjects in 45 CFR Part 102
Administrative practice and procedure, Penalties.
For reasons discussed in the preamble, the Department of Health and
Human Services adopts the interim final rule published September 6,
2016, at 81 FR 61537, as final with the following changes to 45 CFR
part 102:
PART 102--ADJUSTMENT OF CIVIL MONETARY PENALTIES FOR INFLATION
0
1. The authority citation for part 102 continues to read as follows:
Authority: Public Law 101-410, Sec. 701 of Public Law 114-74, 31
U.S.C. 3801-3812.
0
2. Amend Sec. 102.3 by revising table 1 to read as follows:
Sec. 102.3 Penalty adjustment and table.
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BILLING CODE 4150-24-P
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Dated: November 8, 2021.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2021-24672 Filed 11-12-21; 8:45 am]
BILLING CODE 4150-24-C
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