Office of Personnel Management.
The Office of Personnel Management (OPM) is amending its regulations regarding administrative sanctions of health care providers participating in the Federal Employees Health Benefits Program (FEHBP). This rule clarifies the circumstances under which payments may be made from FEHBP funds to suspended providers and implements the financial sanctions provisions of section 2 of the Federal Employees Health Care Protection Act of 1998 (Pub. L. 105-266), which authorize OPM to impose civil monetary penalties and financial assessments against health care providers who commit certain types of violations against the FEHBP. In concert with the final regulations on debarment and suspension that were issued on February 3, 2003 (68 FR 5470), the financial sanctions provisions afford OPM a full range of administrative remedies to deter and rectify provider misconduct within FEHBP. The regulatory framework established by this issuance contains appropriate procedural safeguards to assure that the amounts of financial sanctions are determined through a consistent and equitable process, that the Government's financial interests are fully protected, and that financial sanctions are imposed only after an opportunity for an administrative hearing on all facts material to the basis for the sanctions.
March 3, 2004.Start Further Info
FOR FURTHER INFORMATION CONTACT:
David Cope, Debarring Official, Office of the Inspector General, Office of Personnel Management, by telephone at 202-606-2851, by fax at 202-606-2153, or by e-mail at firstname.lastname@example.org.End Further Info End Preamble Start Supplemental Information
OPM's final regulations on debarment and suspension of health care providers were published in the Federal Register on February 3, 2003 (68 FR 5470). Subsequently, during the public comment period for OPM's proposed regulations on financial sanctions of health care providers (see the following section of this preamble titled “Financial Sanctions”), an FEHBP carrier commented to our office that the wording of several sections of the debarment and suspension regulations was ambiguous and potentially subject to misinterpretation in regard to the circumstances under which payments could be made to suspended providers.
The carrier's comments focused on §§ 890.1046 through 890.1050 of the regulations, which speak to certain special situations where payments to debarred providers may be permissible. Section 890.1048, regarding providers who are the sole source of health care services in their communities and section 890.1050, authorizing special exceptions to debarments for individual FEHBP enrollees, both contain specific language prohibiting payments to suspended providers in these circumstances. Sections 890.1046, 890.1047, and 890.1049, addressing services provided in emergency situations, institutional health care providers, and claims filed by enrollees who are unaware that their provider has been sanctioned, respectively, are silent regarding the permissibility of payments to suspended providers in those situations. By not specifically identifying the treatment of suspended providers in these three sections, we intended that they be governed by the overall policy stated in § 890.1030(c), that the effect of a suspension is the same as the effect of a debarment. However, we agree with the carrier's observation that the presence of language in §§ 890.1048 and 890.1050 specifically excluding suspended providers from payment under some “special” circumstances may have inadvertently created confusion among both carriers and providers as to our actual intent in situations where the regulatory wording did not specify the rights of suspended providers. Therefore, to avoid possible misinterpretations, we are revising §§ 890.1046, 890.1047, and 890.1049 by adding appropriate language to indicate that suspended providers are eligible to receive FEHBP payments in the special situations addressed by those sections.
The proposed financial sanctions regulations were issued in a notice of proposed rulemaking in the February 10, 2003, Federal Register (68 FR 6649). During the 60-day public comment period, OPM received written comments from an industry association of health insurance plans and oral comments from an FEHBP carrier and from employees. This section of the regulatory preamble addresses all of the comments and explains OPM's rationale for incorporating certain of them in the final rule and declining to implement others.
Rewording of Redundant or Ambiguous Passages
Most commenters observed that some of the wording in the proposed rule was ambiguous or redundant in addressing (1) the factors used to determine the amounts of penalties and assessments and (2) the procedures for contesting or settling proposed financial sanctions. Upon review, we agree that several sections could be reworded to clarify the intended meaning.
In particular, the proposed § 890.1064(b) appeared to be largely duplicated by § 890.1064(c) and (d), and this redundancy might have fostered some uncertainty as to the relationship between the purposes of financial sanctions and the specific factors that may determine the amount of a sanction against a given provider. In fact, the purposes of financial sanctions are to (1) make OPM whole for any monetary losses and damages associated with a provider's violations and (2) deter future violations by the sanctioned provider and other providers. The procedure for determining amounts in specific cases is intended to effectuate those purposes. Therefore, we have consolidated Start Printed Page 9920paragraphs (b), (c), and (d) of § 890.1064 as they appeared in the proposed rule into paragraph (b) as it appears in the final rule, thus eliminating the redundancy and emphasizing the seamless connection between overall regulatory purpose and the amounts of penalties in individual cases. As the result of this consolidation, the proposed paragraph (e) has been redesignated as § 890.1064(c) in the final rule.
Similarly, we have reworded the proposed § 890.1067(c) to clarify that (1) the debarring official may settle or compromise proposed financial sanctions at any stage of the sanctions process prior to issuance of a final decision and (2) such settlements or compromises do not have to be predicated on a provider's filing a contest of the proposed sanctions or making a formal settlement offer.
Several commenters noted that the phrase “intention to contest” in § 890.1068(a) was ambiguous as to the nature of the contact from a provider that would be sufficient to initiate OPM contest procedures. We have rewritten this section in the final rule to make it clear that, in filing a contest, the provider must adhere to the instructions given by the notice of proposed sanctions issued by OPM. If a provider does not file a contest within the timeframe stated in the notice, in a manner that complies with the procedures specified by the notice, OPM may implement the proposed sanctions immediately and without further procedures. However, OPM does not intend to use this provision to deny the opportunity to contest on the grounds of minor “technical” deviations from the instructions in the notice of proposed sanctions. Providers will receive the benefit of any reasonable doubt regarding their adherence to the requirements for filing a contest.
Some commenters also observed that the proposed §§ 890.1070 and 890.1071 were partially redundant and unclear regarding OPM's procedures for conducting and deciding contests. Upon review, we agree that a revision of these sections is warranted. Accordingly, we have consolidated the proposed §§ 890.1070 and 890.1071 into a single § 890.1070 in the final rule. This section sets forth in sequential order the process that the debarring official must apply to deciding contests of proposed financial sanctions and identifies the critical decision points at each stage of this process. To account for the consolidation, we have renumbered proposed §§ 890.1072 and 890.1073 as §§ 890.1071 and 890.1072, respectively, in the final rule.
Impact of Financial Sanctions on FEHBP Carriers
The association of insurance carriers suggested that the scope of the proposed rule be expanded to provide a mechanism for crediting collected amounts of financial sanctions, deposited in the Employees Health Benefits Fund, to reimburse FEHBP plans for any losses and costs they incur as a result of the provider misconduct on which the financial sanctions are based. In support of this suggestion, the association noted that FEHBP plans may expend substantial amounts when investigating provider violations, and that there is no formula for “compensating plans for [such] losses.” However, FEHBP carriers are reimbursed from the Employees Health Benefits Fund for allowable costs incurred in administering their responsibilities under their FEHBP contracts. The nature and extent of such reimbursement is addressed within the regulatory framework of the Federal Employees Health Benefits Acquisition Regulations, and is subject to annual negotiation between OPM and the carrier. In contrast, the FEHBP sanctions statute is designed solely as an enforcement measure aimed at untrustworthy health care providers, and offers no basis or authority for regulating costs and/or reimbursement policies. Therefore, we have not accepted the carrier association's suggestions.
Regulatory Flexibility Act
I certify that this proposed regulation will not have a significant economic impact on a substantial number of small entities, because the financial sanctions are limited to the portion of health care providers' activities involving transactions with the Federal Employees Health Benefits Program.
Executive Order 12866, Regulatory Review
This rule has been reviewed by the Office of Management and Budget in accordance with Executive Order 12866.Start List of Subjects
List of Subjects in 5 CFR Part 890
- Administrative practice and procedure
- Government employees
- Health facilities
- Health insurance
- Health professions
Office of Personnel Management.
Kay Coles James,
Accordingly, OPM is amending part 890 of title 5, Code of Federal Regulations as follows:End Amendment Part Start Part
PART 890—FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAMEnd Part Start Amendment Part
1. The authority citation for part 890 continues to read as follows:End Amendment Part Start Amendment Part
2. In subpart J, § 890.1046 is revised to read as follows:End Amendment Part
A debarred or suspended health care provider may receive FEHBP funds paid for items or services furnished on an emergency basis if the FEHBP carrier serving the covered individual determines that:
(a) The provider's treatment was essential to the health and safety of the covered individual; and
(b) No other source of equivalent treatment was reasonably available.
3. In subpart J, § 890.1047 is revised to read as follows:End Amendment Part
(a) Covered individual admitted before debarment or suspension. If a covered person is admitted as an inpatient before the effective date of an institutional provider's debarment or suspension, that provider may continue to receive payment of FEHBP funds for inpatient institutional services until the covered person is released or transferred, unless the debarring or suspending official terminates payments under paragraph (b) of this section.
(b) Health and safety of covered individuals. If the debarring or suspending official determines that the health and safety of covered persons would be at risk if they remain in a debarred or suspended institution, OPM may terminate FEHBP payments at any time.
(c) Notice of payment limitations. If OPM limits any payment under paragraph (b) of this section, it must immediately send written notice of its action to the institutional provider.
(d) Finality of debarring or suspending official's decision. The debarring or suspending official's decision to limit or deny payments under paragraph (b) of this section is not subject to administrative review or reconsideration.
4. In subpart J, § 890.1049 is revised to read as follows:End Amendment Part
(a) Covered individual unaware of debarment or suspension. FEHBP funds may be paid for items or services furnished by a debarred or suspended provider if, at the time the items or services were furnished, the covered individual did not know, and could not reasonably be expected to have known, that the provider was debarred or suspended. This provision is intended solely to protect the interests of FEHBP-covered persons who obtain services from a debarred or suspended provider in good faith and without knowledge that the provider has been sanctioned. It does not authorize debarred or suspended providers to submit claims for payment to FEHBP carriers.
(b) Notice sent by carrier. When paying a claim under the authority of paragraph (a) of this section, an FEHBP carrier must send a written notice to the covered individual, stating:
(1) That the provider is debarred or suspended and is prohibited from receiving payment of FEHBP funds for items or services furnished after the effective date of the debarment or suspension;
(2) That claims may not be paid for items or services furnished by the debarred or suspended provider after the covered individual is informed of the debarment or suspension;
(3) That the current claim is being paid as a legally-authorized exception to the effect of the debarment or suspension in order to protect covered individuals who obtain items or services without knowledge of their provider's debarment or suspension;
(4) That FEHBP carriers are required to deny payment of any claim for items or services rendered by a debarred or suspended provider 15 days or longer after the date of the notice described in paragraph (b) of this section, unless the covered individual had no knowledge of the provider's debarment or suspension when the items or services were rendered;
(5) The minimum period remaining in the provider's debarment or suspension; and
(6) That FEHBP funds cannot otherwise be paid to the provider until OPM terminates the debarment or suspension.
5. In subpart J, §§ 890.1060 through 890.1072 are added to read as follows:End Amendment Part
Subpart J—Administrative Sanctions Imposed Against Health Care Providers Civil Monetary Penalties and Financial Assessments
- Purpose and scope of civil monetary penalties and assessments.
- Bases for penalties and assessments.
- Deciding whether to impose penalties and assessments.
- Maximum amounts of penalties and assessments.
- Determining the amounts of penalties and assessments to be imposed on a provider.
- Deciding whether to suspend or debar a provider in a case that also involves penalties and assessments.
- Notice of proposed penalties and assessments.
- Provider contests of proposed penalties and assessments.
- Effect of not contesting proposed penalties and assessments.
- Information the debarring official must consider in deciding a provider's contest of proposed penalties and assessments.
- Deciding contests of proposed penalties and assessments.
- Further appeal rights after final decision to impose penalties and assessments.
- Collecting penalties and assessments.
Civil Monetary Penalties and Financial Assessments
(a) Civil monetary penalty. A civil monetary penalty is an amount that OPM may impose on a health care provider who commits one of the violations listed in § 890.1061. Penalties are intended to protect the integrity of FEHBP by deterring repeat violations by the same provider and by reducing the likelihood of future violations by other providers.
(b) Assessment. An assessment is an amount that OPM may impose on a provider, calculated by reference to the claims involved in the underlying violations. Assessments are intended to recognize monetary losses, costs, and damages sustained by OPM as the result of a provider's violations.
(c) Definitions. In §§ 890.1060 through 890.1072:
Penalty means civil monetary penalty; and
Penalties and assessments may connote the singular or plural forms of either of those terms, and may represent either the conjunctive or disjunctive sense.
(d) Relationship to debarment and suspension. In addition to imposing penalties and assessments, OPM may concurrently debar or suspend a provider from participating in the FEHBP on the basis of the same violations.
(e) Relationship to other penalties provided by law. The penalties, assessments, debarment, and suspension imposed by OPM are in addition to any other penalties that may be prescribed by law or regulation administered by an agency of the Federal Government or any State.
(a) Improper claims. OPM may impose penalties and assessments on a provider if a claim presented by that provider for payment from FEHBP funds meets the criteria set forth in 5 U.S.C. 8902a(d)(1).
(b) False or misleading statements. OPM may impose penalties and assessments on a provider who makes a false statement or misrepresentation as set forth in 5 U.S.C. 8902a(d)(2).
(c) Failing to provide claims-related information. OPM may impose penalties and assessments on a provider who knowingly fails to provide claims-related information as otherwise required by law.
(a) Authority of debarring official. The debarring official has discretionary authority to impose penalties and assessments in accordance with 5 U.S.C. 8902a and this subpart.
(b) Factors to be considered. In deciding whether to impose penalties and assessments against a provider that has committed one of the violations identified in § 890.1061, OPM must consider:
(1) The number and frequency of the provider's violations;
(2) The period of time over which the violations were committed;
(3) The provider's culpability for the specific conduct underlying the violations;
(4) The nature of any claims involved in the violations and the circumstances under which the claims were presented to FEHBP carriers;
(5) The provider's history of prior offenses or improper conduct, including any actions that could have constituted a basis for a suspension, debarment, penalty, or assessment by any Federal or State agency, whether or not any sanction was actually imposed;
(6) The monetary amount of any damages, losses, and costs, as described in § 890.1064(c), attributable to the provider's violations; and
(7) Such other factors as justice may require.
(c) Additional factors when penalty or assessment is based on provisions of Start Printed Page 9922§ 890.1061(b) or (c). In the case of violations involving false or misleading statements or the failure to provide claims-related information, OPM must also consider:
(1) The nature and circumstances of the provider's failure to properly report information; and
(2) The materiality and significance of the false statements or misrepresentations the provider made or caused to be made, or the information that the provider knowingly did not report.
OPM may impose penalties and assessments in amounts not to exceed those set forth in U.S.C. 8902a(d).
(a) Authority of debarring official. The debarring official has discretionary authority to set the amounts of penalties and assessments in accordance with law and this subpart.
(b) Factors considered in determining amounts of penalties and assessments. In determining the amounts of penalties and assessments to impose on a provider, the debarring official must consider:
(1) The Government's interests in being fully compensated for all damages, losses, and costs associated with the provider's violations, including:
(i) Amounts wrongfully paid from FEHBP funds as the result of the provider's violations and interest on those amounts, at rates determined by the Department of the Treasury;
(ii) All costs incurred by OPM in investigating a provider's sanctionable misconduct; and
(iii) All costs incurred in OPM's administrative review of the case, including every phase of the administrative sanctions processes described by this subpart;
(2) The Government's interests in deterring future misconduct by health care providers;
(3) The provider's personal financial situation, or, in the case of an entity, the entity's financial situation;
(4) All of the factors set forth in § 890.1062(b) and (c); and
(5) The presence of aggravating or less serious circumstances, as described in paragraphs (c)(1) through (c)(7) of this section.
(c) Aggravated and less serious circumstances. The presence of aggravating circumstances may cause OPM to impose penalties and assessments at a higher level within the authorized range, while less serious violations may warrant sanctions of relatively lower amounts. Paragraphs (c)(1) through (c)(7) of this section provide examples of aggravated and less serious violations. These examples are illustrative only, and are not intended to represent an exhaustive list of all possible types of violations.
(1) The existence of many separate violations, or of violations committed over an extended period of time, constitutes an aggravating circumstance. OPM may consider conduct involving a small number of violations, committed either infrequently or within a brief period of time, to be less serious.
(2) Violations for which a provider had direct knowledge of the material facts (for example, submitting claims that the provider knew to contain false, inaccurate, or misleading information), or for which the provider did not cooperate with OPM's or an FEHBP carrier's investigations, constitute aggravating circumstances. OPM may consider violations where the provider did not have direct knowledge of the material facts, or in which the provider cooperated with post-violation investigative efforts, to be less serious.
(3) Violations resulting in substantial damages, losses, and costs to OPM, the FEHBP, or FEHBP-covered persons constitute aggravating circumstances. Violations producing a small or negligible overall financial impact may be considered to be less serious.
(4) A pattern of conduct reflecting numerous improper claims, high-dollar false claims, or improper claims involving several types of items or services constitutes aggravating circumstances. OPM may consider a small number of improper claims for relatively low dollar amounts to be less serious.
(5) Every violation involving any harm, or the risk of harm, to the health and safety of an FEHBP enrollee, must be considered an aggravating circumstance.
(6) Any prior violation described in § 890.1062(b)(5) constitutes an aggravating circumstance. OPM may consider repeated or multiple prior violations to represent an especially serious form of aggravating circumstances.
(7) OPM may consider other circumstances or actions to be aggravating or less serious within the context of an individual case, as the interests of justice require.
In a case where both penalties and assessments and debarment are proposed concurrently,OPM must decide the proposed debarment under the same criteria and procedures as if it had been proposed separately from penalties and assessments.
(a) Written notice. OPM must inform a provider of proposed penalties and assessments by written notice, sent via certified mail with return receipt requested, to the provider's last known street or post office address. OPM may, at its discretion, use an express service that furnishes a verification of delivery instead of postal mail.
(b) Statutory limitations period. OPM must send the notice to the provider within 6 years of the date on which the claim underlying the proposed penalties and assessments was presented to an FEHBP carrier. If the proposed penalties and assessments do not involve a claim presented for payment, OPM must send the notice within 6 years of the date of the actions on which the proposed penalties and assessments are based.
(c) Contents of the notice. OPM's notice must contain, at a minimum:
(1) The statement that OPM proposes to impose penalties and/or assessments against the provider;
(2) Identification of the actions, conduct, and claims that comprise the basis for the proposed penalties and assessments;
(3) The amount of the proposed penalties and assessments, and an explanation of how OPM determined those amounts;
(4) The statutory and regulatory bases for the proposed penalties and assessments; and
(5) Instructions for responding to the notice, including specific explanations regarding:
(i) The provider's right to contest the imposition and/or amounts of penalties and assessments before they are formally imposed; and
(ii) OPM's right, if the provider does not contest the proposed penalties and assessments within 30 days of the date he receives the notice, to implement them immediately without further administrative appeal or recourse.
(d) Proposing debarment in the same notice. OPM may propose a provider's debarment in the same notice that also proposes penalties and assessments. In this case, the notice must also provide the elements of information required to appear in a notice of proposed debarment under § 890.1006(b).Start Printed Page 9923
(e) Procedures if the notice cannot be delivered. OPM must apply the provisions of § 890.1006(f) if the notice of proposed penalties and assessments cannot be delivered as originally addressed.
(f) Sending notice by electronic means.[Reserved]
(a) Contesting proposed sanctions. A provider may formally contest the proposed penalties and assessments by sending a written notice to the debarring official within 30 days after receiving the notice described in § 890.1066. The debarring official must apply the administrative procedures set forth in §§ 890.1069 and 890.1070 to decide the contest.
(b) Contesting debarments and financial sanctions concurrently. If OPM proposes debarment and penalties and assessments in the same notice, the provider may contest both the debarment and the financial sanctions in the same proceeding. If the provider pursues a combined contest, the requirements set forth in §§ 890.1022 through 890.1024, as well as this section, apply.
(c) Settling or compromising proposed sanctions. The debarring official may settle or compromise proposed sanctions at any time before issuing a final decision under § 890.1070.
(a) Proposed sanctions may be implemented immediately. In the absence of a timely response by a provider as required in the notice described in § 890.1066, the debarring official may issue a final decision implementing the proposed financial sanctions immediately, without further procedures.
(b) Debarring official sends notice after implementing sanctions. Immediately upon issuing a final decision under paragraph (a), the debarring official must send the provider written notice, via certified return receipt mail or express delivery service, stating:
(1) The amount of penalties and assessments imposed;
(2) The date on which they were imposed; and
(3) The means by which the provider may pay the penalties and assessments.
(c) No appeal rights. A provider may not pursue a further administrative or judicial appeal of the debarring official's final decision implementing any sanctions if a timely contest was not filed in response to OPM's notice under § 890.1066.
(a) Documentary material and written arguments. As part of a provider's contest, the provider must furnish a written statement of reasons why the proposed penalties and assessments should not be imposed and/or why the amounts proposed are excessive.
(b) Mandatory disclosures. In addition to any other information submitted during the contest, the provider must inform the debarring official in writing of:
(1) Any existing, proposed, or prior exclusion, debarment, penalty, assessment, or other sanction that was imposed by a Federal, State, or local government agency, including any administrative agreement that purports to affect only a single agency; and
(2) Any current or prior criminal or civil legal proceeding that was based on the same facts as the penalties and assessments proposed by OPM.
(c) In-person appearance. A provider may request a personal appearance (in person, by telephone conference, or through a representative) to provide testimony and oral arguments to the debarring official.
(a) Debarring official reviews entire administrative record. After the provider submits the information and evidence authorized or required by § 890.1069, the debarring official shall review the entire official record to determine if the contest can be decided without additional administrative proceedings, or if an evidentiary hearing is required to resolve disputed material facts.
(b) Previously determined facts. Any facts relating to the basis for the proposed penalties and assessments that were determined in prior due process proceedings are binding on the debarring official in deciding the contest. “Prior due process proceedings” are those set forth in § 890.1025(a)(1) through (4).
(c) Deciding the contest without further proceedings. To decide the contest without further administrative proceedings, the debarring official must determine that:
(1) The preponderance of the evidence in the administrative record as a whole demonstrates that the provider committed a sanctionable violation described in § 890.1061; and
(2) The evidentiary record contains no bona fide dispute of any fact material to the proposed financial sanction. A “material fact” is a fact essential to determining whether a provider committed a sanctionable violation for which penalties and assessments may be imposed.
(d) Final decision without further proceedings. If the debarring official determines that paragraphs (c)(1) and (c)(2) of this section both apply, a final decision may be issued, imposing financial sanctions in amounts not exceeding those proposed in the notice to the provider described in § 890.1066.
(e) Insufficient evidence. If the debarring official determines that a preponderance of the evidence does not demonstrate that the provider committed a sanctionable violation described in § 890.1061, the notice of proposed sanctions described in § 890.1066 must be withdrawn.
(f) Disputed material facts. If the debarring official determines that the administrative record contains a bona fide dispute about any fact material to the proposed sanction, he must refer the case for a fact-finding hearing to resolve the disputed fact or facts. The provisions of § 890.1027(b) and (c), 890.1028, and 890.1029(a) and (b) will govern such a hearing.
(g) Final decision after fact-finding hearing. After receiving the report of the fact-finding hearing, the debarring official must apply the provisions of paragraphs (c), (d), and (e) of this section to reach a final decision on the provider's contest.
If the debarring official's final decision imposes any penalties and assessments, the affected provider may appeal it to the appropriate United States district court under the provisions of 5 U.S.C. 8902a(h)(2).
(a) Agreed-upon payment schedule. At the time OPM imposes penalties and assessments, or the amounts are settled or compromised, the provider must be afforded the opportunity to arrange an agreed-upon payment schedule.
(b) No agreed-upon payment schedule. In the absence of an agreed-upon payment schedule, OPM must collect penalties and assessments under its regular procedures for resolving debts owed to the Employees Health Benefits Fund.
(c) Offsets. As part of its debt collection efforts, OPM may request other Federal agencies to offset the penalties and assessments against amounts that the agencies may owe to Start Printed Page 9924the provider, including Federal income tax refunds.
(d) Civil lawsuit. If necessary to obtain payment of penalties and assessments, the United States may file a civil lawsuit as set forth in 5 U.S.C. 8902(i).
(e) Crediting payments. OPM must deposit payments of penalties and assessments into the Employees Health Benefits Fund.
[FR Doc. 04-4730 Filed 3-2-04; 8:45 am]
BILLING CODE 6325-52-P