[Federal Register Volume 68, Number 22 (Monday, February 3, 2003)]
[Rules and Regulations]
[Pages 5470-5485]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-2398]



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Part V





Office of Personnel Management





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5 CFR Part 890



Debarments and Suspensions of Health Care Providers From the Federal 
Employees Health Benefits Program; Final Rule

  Federal Register / Vol. 68, No. 22 / Monday, February 3, 2003 / Rules 
and Regulations  

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OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 890

RIN 3206-AD76


Debarments and Suspensions of Health Care Providers From the 
Federal Employees Health Benefits Program

AGENCY: Office of Personnel Management.

ACTION: Final rule.

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SUMMARY: 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). 
These regulations implement the suspension and debarment provisions of 
section 2 of the Federal Employees Health Care Protection Act of 1998 
(Pub. L. 105-266). That statute modified both the substantive and 
procedural requirements for FEHBP administrative sanctions. These 
regulations supersede interim final regulations issued in 1989 to 
implement the earlier sanctions legislation that was amended by Public 
Law 105-266. They will promote quicker, more uniform decisionmaking for 
suspensions and debarments, and will enhance protection against unfit 
providers for both the FEHBP and the individuals who receive health 
insurance coverage through the Program.

DATES: Effective February 3, 2003.

FOR FURTHER INFORMATION CONTACT: David Cope, by telephone at 202-606-
2851; by FAX at 202-606-2153; or by e-mail at [email protected].

SUPPLEMENTARY INFORMATION:

Background

    This rule was issued as a notice of proposed rulemaking in the 
December 12, 2001, Federal Register (66 FR 64160). During the 60-day 
public comment period, OPM received written comments from two 
professional organizations representing health care providers, an 
industry association of health insurance plans, and an FEHBP carrier. 
Oral comments were received from an FEHBP carrier and from OPM 
employees. This regulatory preamble addresses all of the comments from 
each source, many of which were incorporated into the final rule.
    After the public comment period closed, we rewrote the proposed 
rule to improve its clarity and to reduce what we, as well as some of 
the commenters, believed to be the unnecessary wordiness associated 
with the ``question and answer'' format. This resulted in wording, 
formatting, and structural changes in virtually every section of the 
regulatory text. However, in no case has the meaning or effect of any 
regulatory material changed simply as a function of our rewriting. 
Because they do not reflect substantive modifications to the proposed 
rule, we have not identified each individual wording or format change. 
However, all such changes fall into one or more of the following 
categories:
    (1) The proposed rule was written in a ``question and answer'' 
format in which the title of each section was phrased as a question and 
the body of the section constituted a response to that question. 
However, because the regulation is intended to apply to four different 
groups with divergent interests--the debarring official, the presiding 
official, health care providers, and health insurance carriers 
participating in FEHBP--in many passages the format created uncertainty 
as to the group or groups to which the regulatory material pertained. 
Therefore, we converted the regulation from ``question and answer'' to 
a third-person narrative format.
    (2) In the proposed rule, the pronouns ``we'' or ``us'' were 
frequently used to denote the U.S. Office of Personnel Management, 
within the context of the ``question and answer'' regulatory format. We 
have since concluded that such references were not appropriate to 
denote a Federal agency, and may have created uncertainty among some 
readers about their meaning. As rewritten, the final rule refers to the 
agency solely as ``OPM,'' except in a very few instances where the 
context and antecedent unambiguously support use of the pronoun ``it.''
    (3) As part of the ``question and answer'' format, the proposed 
rule used the pronoun ``you'' to denote a health care provider(s). In 
narrative format of the final rule, we replaced those references with 
``health care provider'' or ``provider.''
    (4) We have uniformly rendered references to the United States Code 
as (title number) U.S.C. (section number) and references to the Code of 
Federal Regulations as (title number) CFR (part number and/or letter 
designating subpart) (section number).
    (5) In the definitions section (890.1003), we deleted subsection 
designations ((a), (b), etc.). The defined terms continue to be listed 
in alphabetic order.
    (6) We replaced every passage that consisted of a direct 
restatement of a statutory provision with a citation to the applicable 
statutory provision. In most cases, this eliminated an appreciable 
amount of text and substantially shortened the regulatory provision. 
Because such sections had been intended simply to restate a statutory 
passage, there was no change of regulatory effect. Further, this type 
of rewriting improved the precision of the regulatory content by making 
it clear that the regulation intends to apply the cited statutory 
language exactly as written.
    (7) Several sections or passages in the proposed rule contained 
citations to other regulatory sections as an authority for taking 
regulatory action. In every case where the cited regulatory passage had 
a direct underlying statutory authority, we have replaced the 
regulatory citation with a citation to the applicable statutory 
provision as the authority for regulatory action.
    (8) In addition to rewriting the proposed rule from ``question and 
answer'' to narrative format, we attempted to simplify and shorten both 
the language and structure of the regulation wherever possible. We made 
wording changes throughout the regulation to introduce nontechnical 
terminology, and we sought to insure that each paragraph addresses only 
a single concept. In this process, we noted that the proposed Sec.  
890.1009(b) contained two distinctly separate concepts (contesting the 
length of a proposed debarment and requesting a personal appearance 
before the debarring official). Therefore, we created a new Sec.  
890.1009(c) to address the personal appearance, leaving Sec.  
890.1009(b) to address only contests of proposed debarments. Similarly, 
we noted that Sec. Sec.  890.1013(a) and 1016(a) and (b) contained both 
a list of decisional factors and a statement as to how the absence of a 
decisional factor would be treated. Therefore, we created new 
Sec. Sec.  890.1013(b) and 1016(c) to address the impact of an absence 
of decisional factors, leaving Sec. Sec.  890.1013(a) and 1016(a) and 
(b) to contain solely a list of factors. To accommodate pre-existing 
sections, we renumbered the former Sec.  890.1013(b) as 1013(c).

Purpose and Effect of Administrative Sanctions

    Before analyzing the public comments that focused on specific 
sections of the proposed rule, we want to address several generalized 
concerns expressed by the professional organizations regarding the 
overall intent and possible effect of the FEHBP administrative 
sanctions program. Both of the organizations indicated that their

[[Page 5471]]

membership would consider administrative sanctions as ``punitive'' 
measures. They further commented that the statutory sanctions authority 
would ``perpetuate a gotcha [sic] mentality'' on OPM's part toward 
health care providers, leading to severe penalties for essentially 
innocent matters such as inadvertent billing errors or similar mistakes 
resulting from lack of knowledge of FEHBP program requirements.
    We understand that health care providers may inevitably view 
administrative sanctions with some level of concern. However, there is 
simply no factual basis for the belief that OPM will operate any aspect 
of the sanctions program in a manner that would be confrontational or 
hostile toward providers. OPM has conducted an administrative sanctions 
program under the authority of the Governmentwide Nonprocurement 
Debarment and Suspension Common Rule (``common rule'') since May 1993. 
During these 9 years, OPM has debarred over 21,000 health care 
providers, and has maintained a professional and impartial approach to 
sanctions operations.
    While the statutory sanctions authority being implemented by these 
regulations is broader than the common rule, the actual approach to 
sanctions decisionmaking is more objective and offers greater 
procedural protections to the affected health care providers. The FEHBP 
administrative sanctions law contains 18 bases for debarment, each 
involving either a previously adjudicated violation, an association 
between a provider and a previously-sanctioned person or entity, or 
specific actionable conduct by a provider. Sanctions based on conduct 
that has not been previously adjudicated carry a statutory requirement 
that the provider knew or should have known the wrongfulness of his or 
her actions. In this context, we believe it is clear that OPM cannot 
impose sanctions for bona fide errors or mistakes.
    The sanctions that may be imposed under these regulations do not 
constitute punishment as that term is recognized by the law. A line of 
Supreme Court cases has definitively established that administrative 
sanctions such as debarment and civil monetary penalties are not 
``punitive'' for Eighth Amendment or double jeopardy purposes unless 
the legislature intended them to be criminal measures. The leading 
current case in this line, Hudson v. United States, 522 U.S. 93 (1997), 
notes that even sanctions that might, ``in common parlance, be 
described as punishment,'' are appropriately characterized as 
administrative in nature if Congress enacted them to be civil, rather 
than criminal, remedies. There is no question that the FEHBP 
administrative sanctions law was intended to be a civil statute, and in 
fact the administrative sanctions it authorizes are no more severe--and 
in some contexts are less stringent--than the corresponding health care 
provider sanctions under Medicare law.
    Further, OPM's responsibility is to implement the statute 
consistent with the legislative intent and purpose. In this context, 
OPM's principal operating challenge--as is the case for other Federal 
agencies using sanctions authorities--will be to focus its efforts so 
as to afford an optimal level of protection to FEHBP in the most 
efficient manner possible. Hostile, antagonistic, or confrontational 
activities aimed at providers would clearly be improper, incompatible 
with the statute and these regulations, and detrimental to the intended 
protective purposes of the sanctions themselves. We expect that our 
implementation of these regulations will demonstrate that 
administrative sanctions in fact support high standards of professional 
conduct and ethical business practices by holding those who commit 
violations accountable for their actions.

Suggestions Regarding Unrelated Legislation

    One of the professional organizations suggested that we rewrite the 
proposed regulations to incorporate the principles of the Medicare 
Education and Regulatory Fairness Act of 2001 (MERPA), introduced in 
the 107th Congress as H.R. 868 and S. 452, and reissue the resultant 
product as a proposed regulation for further comment. As characterized 
by the professional organization, MERPA would require the Department of 
Health and Human Services (DHHS) to emphasize educating health care 
providers about program requirements and to simplify ``complex legal 
and regulatory requirements'' rather than imposing ``punitive 
enforcement actions'' against providers. MERPA's preamble indicates 
that many physicians are leaving the Medicare program, due to the risks 
of ``aggressive government investigation,'' thus compromising the 
availability of health care for Medicare patients.
    We believe the professional organization's suggestion is 
inappropriate in the context of these regulations. Congress enacted the 
administrative sanctions provisions of Pub. L. 105-266 to meet the 
needs of the FEHBP for an effective and efficient means of addressing 
integrity issues associated with certain types of provider-related 
violations. We note that MERPA's stated objectives do not appear to be 
germane to FEHBP operations. For example, Medicare's regulatory and 
billing practices do not apply to FEHBP, and FEHBP has not experienced 
declining provider participation. In this context, we do not believe 
that MERPA's principal ``instructional'' feature--a system of binding 
advisory opinions on the allowability of specific claims--would be 
necessary or relevant to providers' relationships with the FEHBP claims 
system.
    The remainder of the comments we received dealt with specific 
regulatory provisions or issues. We address each of them in the 
following sections of this preamble.

Informing Providers of Sanctions Action

    The health care provider professional organizations suggested that 
the proposed Sec.  890.1006(c)(2) and (3), authorizing OPM to issue 
notices of proposed debarment via facsimile transmission (fax) or e-
mail, were not in compliance with the terms of 5 U.S.C. 8902a. The same 
commenters also remarked that the provisions of the proposed Sec.  
890.1006(e), authorizing OPM to presume that providers have received a 
notice 5 days after it was sent, are ``irresponsible'' and deprive 
providers of their due process entitlement to adequate notice. The 
commenters recommended that Sec.  890.1006(e) be changed to require OPM 
to obtain actual proof that a provider has received notice before 
taking debarment action.
    The intent of the proposed Sec.  890.1006(c)(2) and (3) was to make 
communication with persons affected by sanctions actions faster and 
more reliable, especially as heightened security measures have slowed 
the delivery of postal mail to many Federal agencies. Similar 
electronic notification provisions appear in the proposed revision to 
the common rule, which was issued as a notice of proposed rulemaking in 
the January 23, 2002, Federal Register (67 FR 3266). The common rule 
revision was developed by the Interagency Suspension and Debarment 
Committee at the request of the Office of Management and Budget. 
However, as reflected by the commenter's concerns, questions remain as 
to the acceptability of electronic media for communicating official 
notices. After consultation with the Interagency Suspension and 
Debarment Committee, we concluded

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that this issue would be more appropriately determined in the 
Governmentwide forum of the proposed common rule. Therefore, we 
modified the proposed Sec.  890.1006(c) to delete any mention of 
electronic transmission of notice, and we have specifically reserved a 
new section Sec.  890.1006(g) to address the ``e-notices'' if they are 
ultimately adopted in the final version of the revised common rule. In 
the interim, we intend to continue our practice of using electronic 
means to communicate material other than official debarment notices 
when providers furnish us a fax number or e-mail address.
    In regard to the comments on the proposed Sec.  890.1006(e), 
presumption of receipt of official notice is a well-established aspect 
of Federal regulatory practice. For example, the common rule has 
contained such a provision since it was first issued in 1988. In 
addition, the Department of Health and Human Services (DHHS) relies 
upon 5-day presumption of receipt provisions for its official notices 
of provider exclusions in the Medicare program (see 42 CFR 1001.2001). 
Further, the burden of operating an ``actual notice'' system, in terms 
of cost, staff time, and prolonged processing timeframes for 
debarments, is highly problematic. Given these factors, we believe that 
a notice system based on regular first class mail with a regulatory 
presumption of receipt represents a reasonable model for transmitting 
debarment notices to providers. We would also point out that Sec.  
890.1006(e) should be read in conjunction with Sec.  890.1006(f), which 
requires OPM to make appropriate followup efforts to secure delivery of 
notice if it learns that a notice cannot be delivered as originally 
addressed. Taken together, these provisions offer a high level of 
assurance that providers will receive notices in a timely manner, while 
permitting OPM the flexibility to implement debarments promptly.

Effective Date of Debarment Orders

    The health care provider professional associations expressed 
concern that the proposed Sec.  890.1009 specified that debarments 
taken under mandatory debarment authorities would go into effect when 
issued by OPM, and remain in effect during the pendency of judicial 
appeals. They characterized this provision as ``a severe penalty'' for 
health care providers whose debarments may be reversed on appeal, and 
suggested that OPM defer the effective date of debarments until after 
all administrative and judicial appeals have been completed.
    The commenters' concerns touch upon two separate but related issues 
that we believe are essential to effective implementation of the 
statutory debarment authorities. The first of these involves OPM's 
ability to effectuate debarments in a timely manner. As noted in the 
``Background'' section of the Supplementary Information accompanying 
the proposed rule (66 FR 64160), Pub. L. 105-266 amended an earlier 
(1988) FEHBP sanctions statute that had proved to be ``costly and 
unworkable,'' primarily because of its requirement that OPM debarment 
orders not go into effect until all administrative and judicial appeal 
avenues to challenge those debarments had been exhausted. This deprived 
OPM's sanctions decisions of meaningful finality and invited delay and 
expense through protracted litigation. Pub. L. 105-266 addressed the 
problem by providing OPM with regulatory authority to establish 
effective dates of debarments. In implementing this authority (Sec.  
890.1009 for mandatory debarments and Sec.  890.1026 for permissive 
debarments), OPM decided to make debarments effective immediately upon 
completion of the administrative appeals process, or, if a provider 
does not file an administrative appeal, immediately upon expiration of 
the 30-day notice period for a proposed debarment. OPM will keep 
debarments in effect while providers exercise their statutory right of 
appeal to U.S. district court. OPM would, of course, stay the 
implementation of a debarment during a judicial appeal if ordered to do 
so by the court.
    The other issue raised by this comment is whether a basis for 
debarment that involves a conviction is affected by a provider's appeal 
of the conviction. The FEHBP debarment statute addresses this in 5 
U.S.C. 8902a(a)(1)(C), which specifies that a ``conviction'' exists 
``without regard to the pendency or outcome of any appeal (other than a 
judgment of acquittal based on innocence) or request for relief.'' The 
purpose of this provision is to keep a mandatory debarment continuously 
in effect during subsequent litigation unless a final appellate ruling 
reverses or vacates the conviction and there is no longer a possibility 
of a retrial.
    As part of our overall rewriting of the regulation, we replaced the 
definition of ``conviction'' in Sec.  890.1003, which was a direct 
restatement of the statutory language of 5 U.S.C. 8902a(a)(1)(C), with 
a citation to the statutory provision. This means that a conviction, as 
a basis for a mandatory debarment, comes into effect immediately upon 
adjudication and remains in effect during all subsequent litigation. To 
reflect the impact of 5 U.S.C. 8902a(a)(1)(C) on reinstatement of a 
provider, we have also added a citation to this provision in Sec.  
890.1052(a).
    Inasmuch as the regulatory provisions criticized by the commenters 
directly implement the provisions of Public Law 105--266 that authorize 
OPM to effectuate debarments, notwithstanding the pendency of judicial 
appeals, we are not adopting the commenters' recommendations.

Aggravating and Mitigating Factors

    One of the professional associations observed that a serious 
inequity appears to exist between the respective lists of aggravating 
and mitigating factors in the proposed Sec. Sec.  890.1008 and 1016. 
The commenter stated that the aggravating factors are ``open-ended,'' 
while the mitigating factors are strictly limited to the items listed. 
Further, the commenter noted that neither the aggravating nor 
mitigating factors recognize restitution a provider may have made for 
incorrect, improper, or wrongful receipt of Federal funds.
    The proposed Sec.  890.1008 identifies the aggravating and 
mitigating factors that the debarring official must consider in 
determining the proposed length of a mandatory debarment. The proposed 
Sec.  890.1016 contains an essentially identical list for permissive 
debarments. We believe the aggravating and mitigating factors 
identified in the regulation are equitable and appropriately recognize 
matters relevant to the violation for which a sanction is being 
proposed. In our estimation, a reasonable reading of Sec. Sec.  
890.1008 and 1016 simply does not support the commenter's 
interpretation that the aggravating factors are broad and ambiguous 
while the mitigating factors are narrowly drawn. The lists of factors 
in each regulatory provision represent the factors that the debarring 
official may consider as aggravating and mitigating, respectively, in 
determining the proposed length of a proposed debarment. Neither list 
contains a ``catch-all'' provision to authorize consideration of other 
factors on an ad hoc basis.
    It should be noted, moreover, that the final length of a debarment 
is not based solely on these factors. After being notified of a 
proposed debarment and its proposed length, the provider has the 
opportunity to challenge them in an administrative proceeding under the 
provisions of Sec. Sec.  890.1022--1029. Decisions regarding the length 
of debarments are discretionary with the debarring official in every 
case, and a

[[Page 5473]]

provider's ability to contest the proposed length of his or her 
debarment is not limited in any way by the aggravating and mitigating 
factors listed in Sec. Sec.  890.1008 and 1016.
    In regard to the treatment of restitution by these regulations, the 
professional organization posed a hypothetical example involving 
restitution of amounts received by a provider because of a ``billing 
error.'' This example reflects an inaccurate premise. In fact, receipt 
of an incorrect payment of FEHBP funds due to a bona fide billing error 
is not a sanctionable violation, and these regulations would not apply 
in such a situation. However, if a provider receives payments of FEHBP 
funds because of false, fraudulent, deceptive, or otherwise wrongful 
claims that form the basis for a debarment, Sec. Sec.  890.1008 and 
1016 authorize the debarring official to consider the resultant 
financial loss to the Government as an aggravating factor. Because the 
actual amount of the improper payments reflects the seriousness of the 
provider's violation, the regulations do not provide for crediting any 
post-violation restitution in calculating the amount of the financial 
loss. However, it is appropriate to recognize restitution made as part 
of a provider's post-violation cooperation with law enforcement 
authorities under the mitigating factors in Sec. Sec.  890.1008(b)(3) 
and 1016(b)(1). To the extent that the proposed regulation may not have 
clearly conveyed this meaning, we have reworded both Sec. Sec.  
890.1008 and 1016 to reflect unambiguously that restitution is an 
aspect of cooperation with law enforcement authorities that may be 
considered mitigating for purposes of computing a proposed period of 
debarment.

Length of Permissive Debarments

    One of the professional organizations commented that the wording of 
the proposed 890.1015 was inconsistent with the underlying statutory 
provisions, to the extent that it could restrict the discretion of the 
debarring official in setting the length of debarments under permissive 
debarment authorities. In every case based on a permissive debarment 
authority, Public Law 105-266 allows the debarring official full 
discretion to debar or not debar, and, if he elects to debar, to set 
the period of the debarment without limitations as to length.
    While we did not intend the proposed Sec.  890.1015 to establish a 
mandatory minimum debarment period for permissive debarments, nor to 
limit the debarring official's discretion in any other way, we agree 
with the commenter's observation that the proposed wording invited such 
an interpretation. Accordingly, we have revised Sec.  890.1015 to 
clarify that the debarring official possesses full discretionary 
decisionmaking authority to establish the length of permissive 
debarments in every case.

Matters To Be Treated as Prior Adjudications

    The proposed Sec.  890.1025 sets forth the criteria which the 
debarring official will use to determine if OPM must conduct a fact-
finding hearing to resolve a provider's administrative appeal of a 
debarment. Public Law 105-266 requires that every material fact on 
which a debarment is based be adjudicated in an appropriate 
administrative proceeding. However, OPM will not readjudicate facts 
determined in prior due process proceedings, such as criminal or civil 
actions or professional licensure actions, or facts to which the 
provider stipulated. Both professional associations objected to the 
wording of the proposed Sec.  890.1025(a)(4), which would treat 
settlement agreements entered into by a provider to resolve civil or 
administrative actions as tantamount to adjudications, even if they 
contain no factual stipulations or admissions. Although the commenters 
did not so indicate, identical language also appeared in the proposed 
Sec.  890.1037(a), regarding prior adjudications in the context of 
administrative appeals of suspensions. We agree with the commenters 
that these passages are inconsistent with the current state of the law. 
Therefore, we have modified the final text of both Sec.  Sec.  
890.1025(a)(4) and 890.1037(a) to indicate that settlement agreements 
may be deemed to be waivers of adjudication only if they contain 
stipulations of facts establishing that a sanctionable violation 
occurred.

Informing FEHBP Enrollees about Provider Debarments

    The proposed Sec.  890.1045 required FEHBP carriers to notify their 
enrollees who have previously obtained items or services from a 
debarred provider of the provider's debarment, and specified certain 
items of information that must be included in the notification. An 
FEHBP carrier and the health insurance industry association both 
suggested that this section be modified to require debarred providers 
to notify the FEHBP enrollees with whom they deal of their debarment. 
This would relieve the carriers of the effort and cost associated with 
the notification responsibility.
    OPM does not have statutory authority to directly regulate provider 
conduct in this manner. In fact, the proposed Sec.  890.1045 was drawn 
directly from 5 U.S.C. 8902a(j), which requires OPM to issue 
regulations placing responsibility on the FEHBP carriers for informing 
enrollees of provider debarments. Therefore, we are not adopting this 
recommendation.
    As an alternate suggestion, the health insurance industry 
association recommended that, if carriers must inform enrollees of 
provider debarments, the proposed Sec.  890.1045 be modified to permit 
carriers to target their notifications in some manner. The literal 
wording of Sec.  890.1045 would have required carriers to notify all 
enrollees who had ever received items or services from a debarred 
provider, but the commenter suggested that such a practice would 
involve excessive time and expense. Instead, the industry association 
suggested targeting notices to enrollees who have (1) incurred claims 
with providers that OPM deemed to present a risk to FEHBP members or 
(2) recently received services from debarred providers.
    We believe this comment is well-founded. Our experience under the 
common rule has revealed that early enrollee notification is absolutely 
vital to carrying out the purpose of debarments. This is even more 
clearly the case under these regulations, because 5 U.S.C. 8902a(j) 
requires enrollee claims for items or services furnished by a debarred 
provider to be paid by FEHBP carriers if the enrollee was unaware of 
the provider's debarment. Since FEHBP enrollees generally need no prior 
approval or clearance to obtain covered services from a health care 
provider, they create an obligation on the part of their FEHBP carrier 
to pay claims simply by receiving such services. Well-targeted notice 
to potential patients regarding the debarment of a provider appears to 
be the most efficient means of reducing the incidence of enrollee 
contact with debarred providers.
    Of the targeting criteria suggested by the industry association, we 
do not believe that we would consistently have sufficient information 
to reliably designate certain providers as ``high risk.'' Further, such 
a practice could be perceived by providers as carrying a potentially 
stigmatizing effect beyond the reasonable needs of the sanctions 
process. In contrast, notifying enrollees who have recently obtained 
items and services from debarred providers appears to offer a 
reasonable approach to diminishing FEHBP payments to those providers, 
without the risk of

[[Page 5474]]

prejudicially labeling them. Accordingly, we have accepted this aspect 
of the industry association's suggestion--including the one year 
recency criterion--and have reworded Sec.  890.1045 to require FEHBP 
carriers to notify enrollees who have obtained items or services from a 
debarred provider within one year prior to the provider's debarment.
    The insurance industry association further suggested that we create 
a website to provide FEHBP carriers and enrollees with up-to-date 
information on provider debarments, and that we reflect this action in 
the proposed Sec.  890.1044. For nearly 2 years, OPM's Office of the 
Inspector General has used a secure Internet webpage to make debarment 
data available to FEHBP carriers. We update the page regularly, 
according to a schedule known to the carriers. Because of the extensive 
amount of Privacy Act-protected information about providers that we 
furnish to carriers, this webpage cannot be publicly accessible. 
However, the function of making debarment information from all agencies 
available to the public in an automated, searchable format is met by 
the General Services Administration's Governmentwide debarment list 
(``GSA List''), which is on the Internet at www.epls.com. There are 
links directly to the GSA List from OPM's website (www.opm.gov). In its 
present form, Sec.  890.1044 accurately reflects OPM's responsibilities 
to make debarment-related information available both to carriers and to 
the GSA List. Therefore, while we will not be adopting this suggestion, 
information about OPM debarments is readily available online for both 
FEHBP carriers and the public.

Authority to Issue Suspensions

    One of the professional associations commented that Public Law 105-
266 did not appear to provide OPM the authority to suspend health care 
providers. Therefore, the commenter recommended that all of the 
proposed provisions regarding suspension (proposed Sec. Sec.  890.1030-
1041) be removed from the final rule.
    While Public Law 105-266 does not contain the term ``suspension,'' 
it does provide authority for OPM to issue the type of sanctions that 
are characterized as suspensions in the proposed 890.1030-1041. We 
designated these actions ``suspensions'' because that terminology is 
widely used among Federal agencies--including OPM under the common rule 
authority--to connote sanctions with certain effects. As used in these 
regulations, ``suspension'' connotes a short-term action with the force 
of a debarment that is (1) effective immediately upon issuance of 
notice by OPM, (2) predicated on one or more of the bases for debarment 
identified in Public Law 105-266, and (3) necessitated by the existence 
of a sufficiently serious risk to warrant removing a provider from 
participating in FEHBP in the most expeditious manner possible. OPM's 
ability to regulate in this area is based on 5 U.S.C. 8902a(g)(1)(A), 
authorizing the agency to set reasonable conditions regarding notice to 
providers and effective dates of debarments, and 5 U.S.C. 
8902a(g)(1)(B), authorizing OPM to establish effective dates in advance 
of process if warranted by the ``health or safety of individuals 
receiving health care services.''
    In drafting the sections of these regulations implementing the 
provider suspension authority, we attempted to incorporate existing 
Governmentwide practices as extensively as possible. The two most 
frequently used suspension models are represented by the Federal 
Acquisition Regulation (FAR) and the common rule. However, the FAR 
approach, providing for automatic and immediate suspension upon 
issuance of every notice of proposed debarment, is clearly beyond the 
scope of the authority granted by 5 U.S.C. 8902a. In contrast, the 
common rule approach, selectively limiting suspension to situations 
where there is a tangible need to protect a program or program 
participants, closely tracks the provisions of the FEHBP sanctions 
statute that authorize suspension. Therefore, Sec. Sec.  890.1030 
through 1041 set forth procedures which generally mirror the 
corresponding common rule practices for suspensions. The administrative 
appeal provisions of Sec. Sec.  890.1035[n'dash]1041 offer greater 
procedural protections to affected providers than those contained in 
the common rule. Their purpose is to assure that all suspended 
providers have the right to contest the suspension promptly, as 
required by 5 U.S.C. 8902a(h)(1), including a personal appearance 
before the suspending official and a separate hearing on any facts 
material to the suspension that have not previously been adjudicated.
    Based on the commenter's observations, we have also revised the 
wording of Sec.  890.1031(c) to conform more closely to the terms of 5 
U.S.C. 8902a(g)(1)(B), limiting suspensions to cases of risk to the 
health or safety of FEHBP enrollees. However, we will construe such 
risk to include not only physical harm resulting from a provider's 
maltreatment or abuse, but also the more generalized risks inherent in 
receiving health care from a provider who has committed any sort of 
sanctionable violations that reflect on his or her trustworthiness.

Miscellaneous Provisions Addressed by Outside Commenters

    The health care provider professional associations expressed 
concerns that several provisions of the proposed regulations broadened 
the reach of OPM's administrative sanctions authority in a manner that 
was unfair to health care providers. The commenters suggested that 
these provisions be deleted from the proposed regulations.
    In fact, each of the proposed regulatory sections identified by the 
commenters is based directly on a provision of the FEHBP sanctions 
statute. Collectively, their placement in these regulations is 
necessary to assure full implementation of the statute. Therefore, we 
are retaining all of these sections in the final regulation. However, 
our overall rewriting of the regulatory text has substantially altered 
their wording and format. As they appeared in the proposed rule, each 
of the regulatory sections cited by the commenters comprised a 
restatement of a statutory provision. As rewritten in the final rule, 
each section simply provides a citation to the corresponding section of 
the statute. The regulatory provisions in question are as follows:
    (1) Proposed Sec.  890.1003(e)(4), defining ``conviction'' to 
include an individual's participation in first offender, pre-trial 
diversion, or other programs under which a formal adjudication of an 
offense is withheld. The commenters considered this definition to be 
``overly broad,'' so as to include any infraction, including an 
inadvertent billing error. As we have previously noted in this 
preamble, we intended the regulatory definition of ``conviction'' to 
correspond precisely to the statutory definition of that term set forth 
in 5 U.S.C. 8902a(a)(1)(C). As now rewritten, the definition of 
``conviction'' appearing in Sec.  890.1003 of the final rule simply 
cites to 5 U.S.C. 8902a(a)(1)(C). The exact wording identified as 
objectionable by the commenter is contained in 8902a(a)(1)(C)(iv). 
Further, as we have stated elsewhere in this preamble, we do not 
believe that a reasonable reading of the statutory definition of 
``conviction,'' or indeed any other provision of the FEHBP sanctions 
statute, would support the conclusion that a truly inadvertent provider 
error could be the basis of a sanctions action.
    (2) Proposed Sec.  890.1011(b)(1)(iii), authorizing permissive 
debarment of an entity based on an ownership or control interest by a 
provider who has been

[[Page 5475]]

assessed a civil monetary penalty under the FEHBP sanctions statute. 
One commenter expressed the belief that this provision ``creates 
serious opportunities for abuse.'' However, this proposed regulatory 
section directly restated the provisions of 5 U.S.C. 8902a(c)(2). The 
rewritten Sec.  890.1011(b) simply cites the statutory provisions 
authorizing debarment based on ownership or control interests--5 U.S.C. 
8902a(c)(2) and (3)--thus removing a substantial amount of unnecessary 
text without altering the intent or effect of the provision.
    (3) Proposed Sec.  890.1011(b)(2), authorizing permissive debarment 
of an individual provider who holds an ownership or control interest in 
an entity that has been debarred, convicted of a sanctionable offense, 
or assessed a civil monetary penalty under the FEHBP provider sanctions 
statute, if the individual knew or should have known of the entity's 
violations. One commenter characterized this provision as ``even more 
offensive'' than the proposed Sec.  890.1011(b)(1). In fact, this 
regulatory provision directly restates the provisions of 5 U.S.C. 
8902a(c)(3). As noted in the preceding paragraph, we have revised the 
proposed Sec.  890.1011(b) to consist simply of a reference to the 
statutory provisions authorizing debarment based on ownership and 
control interests, without restating the rather lengthy statutory text.
    (4) Proposed Sec.  890.1011(c), authorizing permissive debarment 
for certain enumerated claims-related violations. One commenter 
suggested that this provision would permit debarment based on ``a 
single billing error.'' In the proposed rule, Sec.  890.1011(c) 
restated the statutory wording of the seven bases for permissive 
debarment established by 5 U.S.C. 8902a(c)(4) and (5) and (d)(1) and 
(2). As reworded in the final rule, Sec.  890.1011(c) consists simply 
of a citation to those sections of the statute. Once again, we would 
note that a careful reading of these regulations and FEHBP sanctions 
law does not support the conclusion that a good faith error could be 
the basis for a sanctions action.
    (5) Proposed Sec.  890.1011(d), authorizing permissive debarment 
for a provider's failure to furnish claims-related information 
requested by OPM or an FEHBP carrier. While the commenter did not 
indicate the precise nature of its objection to this provision, in fact 
the cited passage in the proposed rule directly restated 5 U.S.C. 
8902a(d)(3). As it appears in the final rule, Sec.  890.1011(d) 
consists only of a citation to that statutory provision.

Miscellaneous Revisions Identified by OPM Comments

    As the result of comments from OPM sources, we have slightly 
modified the following sections of the regulatory package.
    (1) The proposed Sec. Sec.  890.1005 and 1012 address 
implementation of the 6-year statutory limitations period for mandatory 
and permissive debarments, respectively. In each section, we have 
replaced every instance of the phrase ``issue * * * a notice of 
proposed debarment'' with ``send * * * a notice of proposed 
debarment.'' The term ``send'' is used uniformly in proposed Sec.  
890.1006 to denote transmission of official notice, and its 
corresponding use in Sec. Sec.  890.1005 and 1012 clarifies that the 
limitations period is tolled when OPM places a notice of proposed 
debarment into the transmission channels authorized by Sec.  890.1006.
    (2) The proposed Sec.  890.1028(d) describes the manner in which 
OPM will create an official record of fact-finding hearings associated 
with permissive debarments. In preparing the regulatory text for the 
proposed rule, we inadvertently omitted from this section a phrase 
requiring OPM to furnish the provider with a free copy of an audio 
recording of the hearing. We have restored that intended wording in the 
final rule. Further, we have changed the final sentence of Sec.  
890.1028(d) to indicate that OPM will arrange for transcription of the 
recording if the provider requests it, but that the provider must pay 
the cost of the transcription.
    (3) The proposed Sec.  890.1052(a) addressed the procedures for 
reinstating providers whose debarments were based on convictions that 
have been reversed on appeal. An OPM reviewer noted that the proposed 
wording of this section did not account for the full statutory 
definition of ``conviction'' in 5 U.S.C. 8902a(a)(1)(C), which 
indicates that a provider is considered to have been convicted 
``without regard to the pendency or outcome of any appeal.'' Upon a 
literal reading, this passage would seem to support the interpretation 
that a provider remains convicted--and thus debarred--even if an 
appeals court reverses or vacates the conviction on which the debarment 
is based. However, such an interpretation would clearly produce 
anomalous results.
    The actual intent of the statutory wording is to permit a mandatory 
debarment to remain in effect until the appeals process, including 
possible retrials, has concluded. This avoids the possibility of 
sequential retractions and reinstatements of debarments which could 
result from differing appeals court rulings as a case progresses 
through the appeals process. Therefore, as noted elsewhere in this 
preamble, we have expanded the wording of Sec.  890.1052(a) to reflect 
that OPM will reinstate a provider on the basis of a reversed 
conviction only if a final appeals ruling has been issued and there is 
no further possibility of a retrial or if an appeals court enters a 
judgment of acquittal based on the provider's innocence.
    (4) We added a definition of ``days'' in Sec.  890.1003 to support 
the distinction between the ``calendar day'' timeframes applied to most 
deadlines established by the regulation and the ``business day'' 
timeframe associated with presumed receipt of notices of proposed 
sanctions under Sec.  890.1006(e)(2).

Regulatory Flexibility Act

    I certify that this regulation will not have a significant economic 
impact on a substantial number of small entities, because it affects 
only health care providers' 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.

List of Subjects in 5 CFR Part 890

    Administrative practice and procedure, Government employees, Health 
facilities, Health insurance, Health professions, Hostages, Iraq, 
Kuwait, Lebanon.

    Office of Personnel Management.
Kay Coles James,
Director.

    Accordingly, OPM is amending part 890 of title 5, Code of Federal 
Regulations as follows:

PART 890--FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

    1. The authority citation for part 890 is revised to read as 
follows:

    Authority: 5 U.S.C. 8913; Sec.  890.803 also issued under 50 
U.S.C. 403(p), 22 U.S.C. 4069c and 4069c-1; subpart L also issued 
under sec. 599C of Pub. L. 101-513, 104 Stat. 2064, as amended; 
Sec.  890.102 also issued under sections 11202(f), 11232(e), 
11246(b) and (c) of Pub. L. 105-33, 111 Stat. 251; and section 721 
of Pub. L. 105-261, 112 Stat. 2061, unless otherwise noted.

    2. Subpart J of part 890 is revised to read as follows:

[[Page 5476]]

Subpart J--Administrative Sanctions Imposed Against Health Care 
Providers

Sec.

General Provisions and Definitions

890.1001 Scope and purpose.
890.1002 Use of terminology.
890.1003 Definitions.

Mandatory Debarments

890.1004 Bases for mandatory debarments.
890.1005 Time limits for OPM to initiate mandatory debarments.
890.1006 Notice of proposed mandatory debarment.
890.1007 Minimum length of mandatory debarments.
890.1008 Mandatory debarment for longer than the minimum length.
890.1009 Contesting proposed mandatory debarments.
890.1010 Debarring official's decision of contest.

Permissive Debarments

890.1011 Bases for permissive debarments.
890.1012 Time limits for OPM to initiate permissive debarments.
890.1013 Deciding whether to propose a permissive debarment.
890.1014 Notice of proposed permissive debarment.
890.1015 Minimum and maximum length of permissive debarments.
890.1016 Aggravating and mitigating factors used to determine the 
length of permissive debarments.
890.1017 Determining length of debarment based on revocation or 
suspension of a provider's professional licensure.
890.1018 Determining length of debarment for an entity owned or 
controlled by a sanctioned provider.
890.1019 Determining length of debarment based on ownership or 
control of a sanctioned entity.
890.1020 Determining length of debarment based on false, wrongful, 
or deceptive claims.
890.1021 Determining length of debarment based on failure to furnish 
information needed to resolve claims.
890.1022 Contesting proposed permissive debarments.
890.1023 Information considered in deciding a contest.
890.1024 Standard and burden of proof for deciding contests.
890.1025 Cases where additional fact-finding is not required.
890.1026 Procedures if a fact-finding proceeding is not required.
890.1027 Cases where an additional fact-finding proceeding is 
required.
890.1028 Conducting a fact-finding proceeding.
890.1029 Deciding a contest after a fact-finding proceeding.

Suspension

890.1030 Effect of a suspension.
890.1031 Grounds for suspension.
890.1032 Length of suspension.
890.1033 Notice of suspension.
890.1034 Counting a period of suspension as part of a subsequent 
debarment.
890.1035 Provider contests of suspensions.
890.1036 Information considered in deciding a contest.
890.1037 Cases where additional fact-finding is not required.
890.1038 Deciding a contest without additional fact-finding.
890.1039 Cases where additional fact-finding is required.
890.1040 Conducting a fact-finding proceeding.
890.1041 Deciding a contest after a fact-finding proceeding.

Effect of Debarment

890.1042 Effective dates of debarments.
890.1043 Effect of debarment on a provider.

Notifying Outside Parties about Debarment and Suspension Actions

890.1044 Entities notified of OPM-issued debarments and suspensions.
890.1045 Informing persons covered by FEHBP about debarment or 
suspension of their provider.

Exceptions to the Effect of Debarments

890.1046 Effect of debarment on payments for services furnished in 
emergency situations.
890.1047 Special rules for institutional providers.
890.1048 Waiver of debarment for a provider that is the sole source 
of health care services in a community.

Special Exceptions to Protect Covered Persons

890.1049 Claims for non-emergency items or services furnished by a 
debarred provider.
890.1050 Exception to a provider's debarment for an individual 
enrollee.

Reinstatement

890.1051 Applying for reinstatement when period of debarment 
expires.
890.1052 Reinstatements without application.
890.1053 Table of procedures and effective dates for reinstatements.
890.1054 Agencies and entities to be notified of reinstatements.
890.1055 Contesting a denial of reinstatement.

Civil Monetary Penalties and Financial Assessments

[Reserved]

Subpart J--Administrative Sanctions Imposed Against Health Care 
Providers


    Authority: 5 U.S.C. 8902a.

General Provisions and Definitions


Sec.  890.1001  Scope and purpose.

    (a) Scope. This subpart implements 5 U.S.C. 8902a, as amended by 
Public Law 105-266 (October 19, 1998). It establishes a system of 
administrative sanctions that OPM may, or in some cases, must apply to 
health care providers who have committed certain violations. The 
sanctions include debarment, suspension, civil monetary penalties, and 
financial assessments.
    (b) Purpose. OPM uses the authorities in this subpart to protect 
the health and safety of the persons who obtain their health insurance 
coverage through the FEHBP and to assure the financial and programmatic 
integrity of FEHBP transactions.


Sec.  890.1002  Use of terminology.

    Unless otherwise indicated, within this subpart the words ``health 
care provider,'' ``provider,'' and ``he'' mean a health care 
provider(s) of either gender or as a business entity, in either the 
singular or plural. The acronym ``OPM'' and the pronoun ``it'' connote 
the U.S. Office of Personnel Management.


Sec.  890.1003  Definitions.

    In this subpart:
    Carrier means an entity responsible for operating a health benefits 
plan described by 5 U.S.C. 8903 or 8903a.
    Community means a geographically-defined area in which a provider 
furnishes health care services or supplies and for which he may request 
a limited waiver of debarment in accordance with this subpart. Defined 
service area has the same meaning as community.
    Contest means a health care provider's request for the debarring or 
suspending official to reconsider a proposed sanction or the length or 
amount of a proposed sanction.
    Control interest means that a health care provider:
    (1) Has a direct and/or indirect ownership interest of 5 percent or 
more in an entity;
    (2) Owns a whole or part interest in a mortgage, deed of trust, 
note, or other obligation secured by the entity or the entity's 
property or assets, equating to a direct interest of 5 percent or more 
of the total property or assets of the entity;
    (3) Serves as an officer or director of the entity, if the entity 
is organized as a corporation;
    (4) Is a partner in the entity, if the entity is organized as a 
partnership;
    (5) Serves as a managing employee of the entity, including but not 
limited to employment as a general manager, business manager, 
administrator, or other position exercising, either directly or through 
other employees, operational or managerial control over the activities 
of the entity or any portion of the entity;
    (6) Exercises substantive control over an entity or a critical 
influence over the activities of the entity or some portion of thereof, 
whether or not employed by the entity; or

[[Page 5477]]

    (7) Acts as an agent of the entity.
    Conviction or convicted has the meaning set forth in 5 U.S.C. 
8902a(a)(1)(C).
    Covered individual means an employee, annuitant, family member, or 
former spouse covered by a health benefits plan described by 5 U.S.C. 
8903 or 8903a or an individual eligible to be covered by such a plan 
under 5 U.S.C. 8905(d).
    Days means calendar days, unless specifically indicated otherwise.
    Debarment means a decision by OPM's debarring official to prohibit 
payment of FEHBP funds to a health care provider, based on 5 U.S.C. 
8902a (b), (c), or (d) and this subpart.
    Debarring official means an OPM employee authorized to issue 
debarments and financial sanctions under this subpart.
    FEHBP means the Federal Employees Health Benefits Program.
    Health care services or supplies means health care or services and 
supplies such as diagnosis and treatment; drugs and biologicals; 
supplies, appliances and equipment; and hospitals, clinics, or other 
institutional entities that furnish supplies and services.
    Incarceration means imprisonment, or any type of confinement with 
or without supervised release, including but not limited to home 
detention, community confinement, house arrest, or similar 
arrangements.
    Limited waiver means an approval by the debarring official of a 
health care provider's request to receive payments of FEHBP funds for 
items or services rendered in a defined geographical area, 
notwithstanding debarment, because the provider is the sole community 
provider or sole source of essential specialized services in a 
community.
    Mandatory debarment means a debarment based on 5 U.S.C. 8902a(b).
    Office or OPM means the United States Office of Personnel 
Management or the component thereof responsible for conducting the 
administrative sanctions program described by this subpart.
    Permissive debarment means a debarment based on 5 U.S.C. 8902a(c) 
or (d).
    Provider or provider of health care services or supplies means a 
physician, hospital, clinic, or other individual or entity that, 
directly or indirectly, furnishes health care services or supplies.
    Reinstatement means a decision by OPM to terminate a health care 
provider's debarment and to restore his eligibility to receive payment 
of FEHBP funds.
    Sanction or administrative sanction means any administrative action 
authorized by 5 U.S.C. 8902a or this subpart, including debarment, 
suspension, civil monetary penalties, and financial assessments.
    Should know or should have known has the meaning set forth in 5 
U.S.C. 8902a(a)(1)(D).
    Sole community provider means a provider who is the only source of 
primary medical care within a defined service area.
    Sole source of essential specialized services in a community means 
a health care provider who is the only source of specialized health 
care items or services in a defined service area and that items or 
services furnished by a non-specialist cannot be substituted without 
jeopardizing the health or safety of covered individuals.
    Suspending official means an OPM employee authorized to issue 
suspensions under 5 U.S.C. 8902a and this subpart.

Mandatory Debarments


Sec.  890.1004  Bases for mandatory debarments.

    (a) Debarment required. OPM shall debar a provider who is described 
by any category of offense set forth in 5 U.S.C. 8902a(b).
    (b) Direct involvement with an OPM program unnecessary. The conduct 
underlying the basis for a provider's mandatory debarment need not have 
involved an FEHBP covered individual or transaction, or any other OPM 
program.


Sec.  890.1005  Time limits for OPM to initiate mandatory debarments.

    OPM shall send a provider a written notice of a proposed mandatory 
debarment within 6 years of the event that forms the basis for the 
debarment. If the basis for the proposed debarment is a conviction, the 
notice shall be sent within 6 years of the date of the conviction. If 
the basis is another agency's suspension, debarment, or exclusion, the 
OPM notice shall be sent within 6 years of the effective date of the 
other agency's action.


Sec.  890.1006  Notice of proposed mandatory debarment.

    (a) Written notice. OPM shall inform a provider of his proposed 
debarment by written notice sent not less than 30 days prior to the 
proposed effective date.
    (b) Contents of the notice. The notice shall contain information 
indicating the:
    (1) Effective date of the debarment;
    (2) Minimum length of the debarment;
    (3) Basis for the debarment;
    (4) Provisions of law and regulation authorizing the debarment;
    (5) Effect of the debarment;
    (6) Provider's right to contest the debarment to the debarring 
official;
    (7) Provider's right to request OPM to reduce the length of 
debarment, if it exceeds the minimum period required by law or this 
subpart; and
    (8) Procedures the provider shall be required to follow to apply 
for reinstatement at the end of his period of debarment, and to seek a 
waiver of the debarment on the basis that he is the sole health care 
provider or the sole source of essential specialized services in a 
community.
    (c) Methods of sending notice. OPM shall send the notice of 
proposed debarment and the final decision notice (if a contest is 
filed) to the provider's last known address by first class mail, or, at 
OPM's option, by express delivery service.
    (d) Delivery to attorney, agent, or representatives. (1) If OPM 
proposes to debar an individual health care provider, it may send the 
notice of proposed debarment directly to the provider or to any other 
person designated by the provider to act as a representative in 
debarment proceedings.
    (2) In the case of a health care provider that is an entity, OPM 
shall deem notice sent to any owner, partner, director, officer, 
registered agent for service of process, attorney, or managing employee 
as constituting notice to the entity.
    (e) Presumed timeframes for receipt of notice. OPM computes 
timeframes associated with the delivery notices described in paragraph 
(c) of this section so that:
    (1) When OPM sends notice by a method that provides a confirmation 
of receipt, OPM deems that the provider received the notice at the time 
indicated in the confirmation; and
    (2) When OPM sends notice by a method that does not provide a 
confirmation of receipt, OPM deems that the provider received the 
notice 5 business days after it was sent.
    (f) Procedures if notice cannot be delivered. (1) If OPM learns 
that a notice was undeliverable as addressed or routed, OPM shall make 
reasonable efforts to obtain a current and accurate address, and to 
resend the notice to that address, or it shall use alternative methods 
of sending the notice, in accordance with paragraph (c) of this 
section.
    (2) If a notice cannot be delivered after reasonable followup 
efforts as described in paragraph (f)(1) of this section, OPM shall 
presume that the provider received notice 5 days after the latest date 
on which a notice was sent.

[[Page 5478]]

    (g) Use of electronic means to transmit notice. [Reserved]


Sec.  890.1007  Minimum length of mandatory debarments.

    (a) Debarment based on a conviction. The statutory minimum period 
of debarment for a mandatory debarment based on a conviction is 3 
years.
    (b) Debarment based on another agency's action. A debarment based 
on another Federal agency's debarment, suspension, or exclusion remains 
in effect until the originating agency terminates its sanction.


Sec.  890.1008  Mandatory debarment for longer than the minimum length.

    (a) Aggravating factors. OPM may debar a provider for longer than 
the 3-year minimum period for mandatory debarments if aggravating 
factors are associated with the basis for the debarment. The factors 
OPM considers to be aggravating are:
    (1) Whether the FEHBP incurred a financial loss as the result of 
the acts underlying the conviction, or similar acts that were not 
adjudicated, and the level of such loss. In determining the amount of 
financial loss, OPM shall not consider any amounts of restitution that 
a provider may have paid;
    (2) Whether the sentence imposed by the court included 
incarceration;
    (3) Whether the underlying offense(s), or similar acts not 
adjudicated, occurred repeatedly over a period of time, and whether 
there is evidence that the offense(s) was planned in advance;
    (4) Whether the provider has a prior record of criminal, civil, or 
administrative adjudication of related offenses or similar acts; or
    (5) Whether the actions underlying the conviction, or similar acts 
that were not adjudicated, adversely affected the physical, mental, or 
financial well-being of one or more covered individuals or other 
persons.
    (b) Mitigating factors. If the aggravating factors justify a 
debarment longer than the 3 year minimum period for mandatory 
debarments, OPM shall also consider whether mitigating factors may 
justify reducing the debarment period to not less than 3 years. The 
factors that OPM considers to be mitigating are:
    (1) Whether the conviction(s) on which the debarment is based 
consist entirely or primarily of misdemeanor offenses;
    (2) Whether court records, including associated sentencing reports, 
contain an official determination that the provider had a physical, 
mental, or emotional condition before or during the commission of the 
offenses underlying the conviction that reduced his level of 
culpability; or
    (3) Whether the provider's cooperation with Federal and/or State 
investigative officials resulted in criminal convictions, civil 
recoveries, or administrative actions against other individuals, or 
served as the basis for identifying program weaknesses. Restitution 
made by the provider for funds wrongfully, improperly, or illegally 
received from Federal or State programs may also be considered as a 
mitigating circumstance.
    (c) Maximum period of debarment. There is no limit on the maximum 
period of a mandatory debarment based on a conviction.


Sec.  890.1009  Contesting proposed mandatory debarments.

    (a) Contesting the debarment. Within 30 days after receiving OPM's 
notice of proposed mandatory debarment, a provider may submit 
information, documents, and written arguments in opposition to the 
proposed debarment. OPM's notice shall contain specific information 
about where and how to submit this material. If a timely contest is not 
filed, the proposed debarment shall become effective as stated in the 
notice, without further action by OPM.
    (b) Requesting a reduction of the debarment period. If OPM proposes 
a mandatory debarment for a period longer than the 3-year minimum 
required by 5 U.S.C. 8902a(g)(3), the provider may request a reduction 
of the debarment period to not less than 3 years, without contesting 
the debarment itself.
    (c) Personal appearance before the debarring official. In addition 
to providing written material, the provider may appear before the 
debarring official personally or through a representative to present 
oral arguments in support of his contest. OPM's notice shall contain 
specific information about arranging an in-person presentation.


Sec.  890.1010  Debarring official's decision of contest.

    (a) Prior adjudication is dispositive. Evidence indicating that a 
provider was formally adjudicated for a violation of any type set forth 
in 5 U.S.C. 8902a(b) fully satisfies the standard of proof for a 
mandatory debarment.
    (b) Debarring official's decision. The debarring official shall 
issue a written decision, based on the entire administrative record, 
within 30 days after the record closes to receipt of information. The 
debarring official may extend this decision period for good cause.
    (c) No further administrative proceedings. The debarring official's 
decisions regarding mandatory debarment and the period of debarment are 
final and are not subject to further administrative review.

Permissive Debarments


Sec.  890.1011  Bases for permissive debarments.

    (a) Licensure actions. OPM may debar a health care provider to whom 
the provisions of 5 U.S.C. 8902a(c)(1) apply. OPM may take this action 
even if the provider retains current and valid professional licensure 
in another State(s).
    (b) Ownership or control interests. OPM may debar a health care 
provider based on ownership or control of or by a debarred provider, as 
set forth in 5 U.S.C. 8902a(c)(2) and (3).
    (c) False, deceptive, or wrongful claims practices. OPM may debar a 
provider who commits claims-related violations as set forth in 5 U.S.C. 
8902a(c)(4) and (5) and 5 U.S.C. 8902a(d)(1) and (2).
    (d) Failure to furnish required information. OPM may debar a 
provider who knowingly fails to provide information requested by an 
FEHBP carrier or OPM, as set forth in 5 U.S.C. 8902a(d)(3).


Sec.  890.1012  Time limits for OPM to initiate permissive debarments.

    (a) Licensure cases. If the basis for the proposed debarment is a 
licensure action, OPM shall send the provider a notice of proposed 
debarment within 6 years of the effective date of the State licensing 
authority's revocation, suspension, restriction, or nonrenewal action, 
or the date on which the provider surrendered his license to the State 
authority.
    (b) Ownership or control. If the basis for the proposed debarment 
is ownership or control of an entity by a sanctioned person, or 
ownership or control of a sanctioned entity by a person who knew or 
should have known of the basis for the entity's sanction, OPM shall 
send a notice of proposed debarment within 6 years of the effective 
date of the sanction on which the proposed debarment is based.
    (c) False, deceptive, or wrongful claims practices. If the basis 
for the proposed debarment involves a claim filed with a FEHBP carrier, 
OPM shall send the provider a notice of proposed debarment within 6 
years of the date he presented the claim for payment to the covered 
person's FEHBP carrier.
    (d) Failure to furnish requested information. If the basis for the 
proposed debarment involves a provider's failure to furnish information 
requested by OPM or an FEHBP carrier,

[[Page 5479]]

OPM shall send the notice of proposed debarment within 6 years of the 
date on which the carrier or OPM requested the provider to furnish the 
information in question.


Sec.  890.1013  Deciding whether to propose a permissive debarment.

    (a) Review factors. The factors OPM shall consider in deciding 
whether to propose a provider's debarment under a permissive debarment 
authority are:
    (1) The nature of any claims involved in the basis for the proposed 
debarment and the circumstances under which they were presented to 
FEHBP carriers;
    (2) The improper conduct involved in the basis for the proposed 
debarment, and the provider's degree of culpability and history of 
prior offenses;
    (3) The extent to which the provider poses or may pose a risk to 
the health and safety of FEHBP-covered individuals or to the integrity 
of FEHBP transactions; and
    (4) Other factors specifically relevant to the provider's debarment 
that shall be considered in the interests of fairness.
    (b) Absence of a factor. The absence of a factor shall be 
considered neutral, and shall have no effect on OPM's decision.
    (c) Specialized review in certain cases. In determining whether to 
propose debarment under 5 U.S.C 8902a(c)(4) for providing items or 
services substantially in excess of the needs of a covered individual 
or for providing items or services that fail to meet professionally-
recognized quality standards, OPM shall obtain the input of trained 
reviewers, based on written medical protocols developed by physicians. 
If OPM cannot reach a decision on this basis, it shall consult with a 
physician in an appropriate specialty area.


Sec.  890.1014  Notice of proposed permissive debarment.

    Notice of a proposed permissive debarment shall contain the 
information set forth in Sec.  890.1006.


Sec.  890.1015  Minimum and maximum length of permissive debarments.

    (a) No mandatory minimum or upper limit on length of permissive 
debarment. There is neither a mandatory minimum debarment period nor a 
limitation on the maximum length of a debarment under any permissive 
debarment authority.
    (b) Debarring official's process in setting period of permissive 
debarment. The debarring official shall set the period of each 
debarment issued under a permissive debarment authority after 
considering the factors set forth in Sec.  890.1016 and the factors set 
forth in the applicable section from among Sec. Sec.  890.1017 through 
890.1021.


Sec.  890.1016  Aggravating and mitigating factors used to determine 
the length of permissive debarments.

    (a) Aggravating factors. The presence of aggravating circumstances 
may support an OPM determination to increase the length of a debarment 
beyond the nominal periods set forth in Sec. Sec.  890.1017 through 
890.1021. The factors that OPM considers as aggravating are:
    (1) Whether the provider's actions underlying the basis for the 
debarment, or similar acts, had an adverse impact on the physical or 
mental health or well-being of one or more FEHBP-covered individuals or 
other persons.
    (2) Whether the provider has a documented history of prior criminal 
wrongdoing; civil violations related to health care items or services; 
improper conduct; or administrative violations addressed by a Federal 
or State agency. OPM may consider matters involving violence, patient 
abuse, drug abuse, or controlled substances convictions or violations 
to be particularly serious.
    (3) Whether the provider's actions underlying the basis for the 
debarment, or similar acts, resulted in financial loss to the FEHBP, 
FEHBP-covered individuals, or other persons. In determining whether, or 
to what extent, a financial loss occurred, OPM shall not consider any 
amounts of restitution that the provider may have paid.
     (4) Whether the provider's false, wrongful, or improper claims to 
FEHBP carriers were numerous, submitted over a prolonged period of 
time, or part of an on-going pattern of wrongful acts.
    (5) Whether the provider was specifically aware of or directly 
responsible for the acts constituting the basis for the debarment.
    (6) Whether the provider attempted to obstruct, hinder, or impede 
official inquiries into the wrongful conduct underlying the debarment.
    (b) Mitigating factors. The presence of mitigating circumstances 
may support an OPM determination to shorten the length of a debarment 
below the nominal periods set forth in Sec. Sec.  890.1017 through 
890.1021, respectively. The factors that OPM considers as mitigating 
are:
    (1) Whether the provider's cooperation with Federal, State, or 
local authorities resulted in criminal convictions, civil recoveries, 
or administrative actions against other violators, or served as the 
basis for official determinations of program weaknesses or 
vulnerabilities. Restitution that the provider made for funds 
wrongfully, improperly, or illegally received from Federal or State 
programs may also be considered as a mitigating factor.
    (2) Whether official records of judicial proceedings or the 
proceedings of State licensing authorities contain a formal 
determination that the provider had a physical, mental, or emotional 
condition that reduced his level of culpability before or during the 
period in which he committed the violations in question.
    (c) Absence of factors. The absence of aggravating or mitigating 
factors shall have no effect to either increase or lower the nominal 
period of debarment.


Sec.  890.1017  Determining length of debarment based on revocation or 
suspension of a provider's professional licensure.

    (a) Indefinite term of debarment. Subject to the exceptions set 
forth in paragraph (b) of this section, debarment under 5 U.S.C. 
8902a(c)(1) shall be for an indefinite period coinciding with the 
period during which the provider's license is revoked, suspended, 
restricted, surrendered, or otherwise not in effect in the State whose 
action formed the basis for OPM's debarment.
    (b) Aggravating circumstances. If any of the aggravating 
circumstances set forth in Sec.  890.1016 apply, OPM may debar the 
provider for an additional period beyond the duration of the licensure 
revocation or suspension.


Sec.  890.1018  Determining length of debarment for an entity owned or 
controlled by a sanctioned provider.

    OPM shall determine the length of debarments of entities under 5 
U.S.C. 8902a(c)(2) based on the type of violation committed by the 
person with an ownership or control interest. The types of violations 
actionable under this provision are:
    (a) Owner/controller's debarment. The debarment of an entity based 
on debarment of an individual with an ownership or control interest 
shall be for a period concurrent with the individual's debarment. If 
any aggravating or mitigating circumstances set forth in Sec.  890.1016 
apply solely to the entity and were not considered in setting the 
period of the individual's debarment, OPM may debar the entity for a 
period longer or shorter than the individual's debarment.
    (b) Owner/controller's conviction. The debarment of an entity based 
on the criminal conviction of a person with an ownership or control 
interest for an offense listed in 5 U.S.C. 8902a(b)(1)-(4) shall be for 
a period of not less than 3 years, subject to adjustment for any 
aggravating or mitigating circumstances

[[Page 5480]]

set forth in Sec.  890.1016 applying solely to the entity.
    (c) Owner/controller's civil monetary penalty. The debarment of an 
entity based on a civil monetary penalty imposed on a person with an 
ownership or control interest, shall be for a period of not less than 3 
years, subject to adjustment for any aggravating or mitigating 
circumstances set forth in Sec.  890.1016 applying solely to the 
entity.


Sec.  890.1019  Determining length of debarment based on ownership or 
control of a sanctioned entity.

    OPM shall determine the length of debarments of individual 
providers under 5 U.S.C. 8902a(c)(3) based on the type of violation 
committed by the sanctioned entity owned or controlled by the person 
with an ownership or control interest. The types of violations 
actionable under this provision are:
    (a) Entity's debarment. If a provider's debarment is based on his 
ownership or control of a debarred entity, the debarment shall be 
concurrent with the entity's debarment. If any of the aggravating or 
mitigating circumstances identified in Sec.  890.1016 applies directly 
to the provider that owns or controls the debarred entity and was not 
considered in setting the period of the entity's debarment, OPM may 
debar the provider for a period longer or shorter, respectively, than 
the entity's debarment.
    (b) Entity's conviction. If a provider's debarment is based on the 
criminal conviction of an entity he owns or controls for an offense 
listed in 5 U.S.C. 8902a(b)(1)-(4), OPM shall debar the provider for a 
period of no less than 3 years, subject to adjustment for any 
aggravating or mitigating circumstances identified in Sec.  890.1016 
that apply to the provider as an individual.
    (c) Entity's civil monetary penalty. If a provider's debarment is 
based on a civil monetary penalty imposed on an entity he owns or 
controls, OPM shall debar him for 3 years, subject to adjustment on the 
basis of the aggravating and mitigating circumstances listed in Sec.  
890.1016 that apply to the provider as an individual.


Sec.  890.1020  Determining length of debarment based on false, 
wrongful, or deceptive claims.

    Debarments under 5 U.S.C. 8902a(c)(4) and (5) and 5 U.S.C. 
8902a(d)(1) and (2) shall be for a period of 3 years, subject to 
adjustment based on the aggravating and mitigating factors listed in 
Sec.  890.1016.


Sec.  890.1021  Determining length of debarment based on failure to 
furnish information needed to resolve claims.

    Debarments under 5 U.S.C. 8902a(d)(3) shall be for a period of 3 
years, subject to adjustment based on the aggravating and mitigating 
factors listed in Sec.  890.1016.


Sec.  890.1022  Contesting proposed permissive debarments.

    (a) Right to contest a proposed debarment. A provider proposed for 
debarment under a permissive debarment authority may challenge the 
debarment by filing a written contest with the debarring official 
during the 30-day notice period indicated in the notice of proposed 
debarment. In the absence of a timely contest, the debarment shall 
become effective as stated in the notice, without further action by 
OPM.
    (b) Challenging the length of a proposed debarment. A provider may 
contest the length of the proposed debarment, while not challenging the 
debarment itself, or may contest both the length of a debarment and the 
debarment itself in the same contest.


Sec.  890.1023  Information considered in deciding a contest.

    (a) Documents and oral and written arguments. A provider may submit 
documents and written arguments in opposition to the proposed debarment 
and/or the length of the proposed debarment, and may appear personally 
or through a representative before the debarring official to provide 
other relevant information.
    (b) Specific factual basis for contesting the proposed debarment. A 
provider's oral and written arguments shall identify the specific facts 
that contradict the basis for the proposed debarment as stated in the 
notice of proposed debarment. A general or unsupported denial of the 
basis for debarment does not raise a genuine dispute over facts 
material to the debarment, and the debarring official shall not give 
such a denial any probative weight.
    (c) Mandatory disclosures. Regardless of the basis for the contest, 
providers are required to disclose certain types of background 
information, in addition to any other information submitted during the 
contest. Failure to provide such information completely and accurately 
may be a basis for OPM to initiate further legal or administrative 
action against the provider. The specific items of information that 
shall be furnished to OPM are:
    (1) Any existing, proposed, or prior exclusion, debarment, penalty, 
or other sanction imposed on the provider by a Federal, State, or local 
government agency, including any administrative agreement that purports 
to affect only a single agency;
    (2) Any criminal or civil legal proceeding not referenced in the 
notice of proposed debarment that arose from facts relevant to the 
basis for debarment stated in the notice; and
    (3) Any entity in which the provider has a control interest, as 
that term is defined in Sec.  890.1003.


Sec.  890.1024  Standard and burden of proof for deciding contests.

    OPM shall demonstrate, by a preponderance of the evidence in the 
administrative record as a whole, that a provider has committed a 
sanctionable violation.


Sec.  890.1025  Cases where additional fact-finding is not required.

    In each contest, the debarring official shall determine whether a 
further fact-finding proceeding is required in addition to presentation 
of arguments, documents, and information. An additional fact-finding 
proceeding is not required when:
    (a) Prior adjudication. The proposed debarment is based on facts 
determined in a prior due process adjudication. Examples of prior due 
process proceedings include, but are not limited to, the adjudication 
procedures associated with:
    (1) Licensure revocation, suspension, restriction, or nonrenewal by 
a State licensing authority;
    (2) Debarment, exclusion, suspension, civil monetary penalties, or 
similar legal or administrative adjudications by Federal, State, or 
local agencies;
    (3) A criminal conviction or civil judgment; or
    (4) An action by a provider that constitutes a waiver of his right 
to a due process adjudication, such as surrender of professional 
license during the pendency of a disciplinary hearing, entering a 
guilty plea or confession of judgment in a judicial proceeding, or 
signing a settlement agreement stipulating facts that constitute a 
sanctionable violation.
    (b) Material facts not in dispute. The provider's contest does not 
identify a bona fide dispute concerning facts material to the basis for 
the proposed debarment.


Sec.  890.1026  Procedures if a fact-finding proceeding is not 
required.

    (a) Debarring official's procedures. If a fact-finding proceeding 
is not required, the debarring official shall issue a final decision of 
a provider's contest within 30 days after the record

[[Page 5481]]

closes for submitting evidence, arguments, and information as part of 
the contest. The debarring official may extend this timeframe for good 
cause.
    (b) No further administrative review available. There are no 
further OPM administrative proceedings after the presiding official's 
final decision. A provider adversely affected by the decision may 
appeal under 5 U.S.C. 8902a(h)(2) to the appropriate U.S. district 
court.


Sec.  890.1027  Cases where an additional fact-finding proceeding is 
required.

    (a) Criteria for holding fact-finding proceeding. The debarring 
official shall request another OPM official (``presiding official'') to 
hold an additional fact-finding proceeding if:
    (1) Facts material to the proposed debarment have not been 
adjudicated in a prior due process proceeding; and
    (2) These facts are genuinely in dispute, based on the entire 
administrative record available to the debarring official.
    (b) Qualification to serve as presiding official. The presiding 
official is designated by the OPM Director or another OPM official 
authorized by the Director to make such designations. The presiding 
official shall be a senior official who is qualified to conduct 
informal adjudicative proceedings and who has had no previous contact 
with the proposed debarment or the contest.
    (c) Effect on contest. The debarring official shall defer a final 
decision on the contest pending the results of the fact-finding 
proceeding.


Sec.  890.1028  Conducting a fact-finding proceeding.

    (a) Informal proceeding. The presiding official may conduct the 
fact-finding proceedings as informally as practicable, consistent with 
principles of fundamental fairness. Formal rules of evidence or 
procedure do not apply to these proceedings.
    (b) Proceeding limited to disputed material facts. The presiding 
official shall consider only the genuinely disputed facts identified by 
the debarring official as material to the basis for the debarment. 
Matters that have been previously adjudicated or that are not in bona 
fide dispute within the administrative record shall not be considered 
by presiding official.
    (c) Provider's right to present information, evidence, and 
arguments. A provider may appear before the presiding official with 
counsel, submit oral and written arguments and documentary evidence, 
present witnesses on his own behalf, question any witnesses testifying 
in support of the debarment, and challenge the accuracy of any other 
evidence that the agency offers as a basis for the debarment.
    (d) Record of proceedings. The presiding official shall make an 
audio recording of the proceedings and shall provide a copy to the 
provider at no charge. If the provider wishes to have a transcribed 
record, OPM shall arrange for production of one which may be purchased 
at cost.
    (e) Presiding official's findings. The presiding official shall 
resolve all of the disputed facts identified by the debarring official, 
on the basis of a preponderance of the evidence contained within the 
entire administrative record. The presiding official shall issue a 
written report of all findings of fact to the debarring official within 
30 days after the record of the fact-finding proceeding closes.


Sec.  890.1029  Deciding a contest after a fact-finding proceeding.

    (a) Findings shall be accepted. The debarring official shall accept 
the presiding official's findings of fact, unless they are arbitrary, 
capricious, or clearly erroneous. If the debarring official concludes 
that the factual findings are not acceptable, they may be remanded to 
the presiding official for additional proceedings in accordance with 
Sec.  890.1028.
    (b) Timeframe for final decision. The debarring official shall 
issue a final written decision on a contest within 30 days after 
receiving the presiding official's findings. The debarring official may 
extend this decision period for good cause.
    (c) Debarring official's final decision. (1)The debarring official 
shall observe the evidentiary standards and burdens of proof stated in 
Sec.  890.1024 in reaching a final decision.
    (2) In any case where a final decision is made to debar a provider, 
the debarring official has the discretion to set the period of 
debarment, subject to the factors identified in Sec. Sec.  890.1016 
through 1021.
    (3) The debarring official has the discretion to decide not to 
impose debarment in any case involving a permissive debarment 
authority.
    (d) No further administrative proceedings. No further 
administrative proceedings shall be conducted after the debarring 
official's final decision in a contest involving an additional fact-
finding hearing. A provider adversely affected by the debarring 
official's final decision in a contested case may appeal under 5 U.S.C. 
8902a(h)(2) to the appropriate U. S. district court.

Suspension


Sec.  890.1030  Effect of a suspension.

    (a) Temporary action pending formal proceedings. Suspension is a 
temporary action pending completion of an investigation or ensuing 
criminal, civil, or administrative proceedings.
    (b) Immediate effect. Suspension is effective immediately upon the 
suspending official's decision, without prior notice to the provider.
    (c) Effect equivalent to debarment. The effect of a suspension is 
the same as the effect of a debarment. A suspended provider may not 
receive payment from FEHBP funds for items or services furnished to 
FEHBP-covered persons while suspended.


Sec.  890.1031  Grounds for suspension.

    (a) Basis for suspension. OPM may suspend a provider if:
    (1) OPM obtains reliable evidence indicating that one of the 
grounds for suspension listed in paragraph (b) of this section applies 
to the provider; and
    (2) The suspending official determines under paragraph (c) of this 
section that immediate action to suspend the provider is necessary to 
protect the health and safety of persons covered by FEHBP.
    (b) Grounds for suspension. Evidence constituting grounds for a 
suspension may include, but is not limited to:
    (1) Indictment or conviction of a provider for a criminal offense 
that is a basis for mandatory debarment under this subpart;
    (2) Indictment or conviction of a provider for a criminal offense 
that reflects a risk to the health, safety, or well-being of FEHBP-
covered individuals;
    (3) Other credible evidence indicating, in the judgment of the 
suspending official, that a provider has committed a violation that 
would warrant debarment under this subpart. This may include, but is 
not limited to:
    (i) Civil judgments;
    (ii) Notice that a Federal, State, or local government agency has 
debarred, suspended, or excluded a provider from participating in a 
program or revoked or declined to renew a professional license; or
    (iii) Other official findings by Federal, State, or local bodies 
that determine factual or legal matters.
    (c) Determining need for immediate action. Suspension is intended 
to protect the public interest, including the health and safety of 
covered individuals or the integrity of FEHBP funds. The suspending 
official has wide discretion to decide whether to suspend a provider. A 
specific finding of

[[Page 5482]]

immediacy or necessity is not required to issue a suspension. The 
suspending official may draw reasonable inferences from the nature of 
the alleged misconduct and from a provider's actual or potential 
transactions with the FEHBP.


Sec.  890.1032  Length of suspension.

    (a) Initial period. The initial term of all suspensions shall be an 
indefinite period not to exceed 12 months.
    (b) Formal legal proceedings not initiated. If formal legal or 
administrative proceedings have not begun against a provider within 12 
months after the effective date of his suspension, the suspending 
official may:
    (1) Terminate the suspension; or
    (2) If requested by the Department of Justice, the cognizant United 
States Attorney's Office, or other responsible Federal, State, or local 
prosecuting official, extend the suspension for an additional period, 
not to exceed 6 months.
    (c) Formal proceedings initiated. If formal criminal, civil, or 
administrative proceedings are initiated against a suspended provider, 
the suspension may continue indefinitely, pending the outcome of those 
proceedings.
    (d) Terminating the suspension. The suspending official may 
terminate a suspension at any time, and shall terminate it after 18 
months, unless formal proceedings have begun within that period.


Sec.  890.1033  Notice of suspension.

    (a) Written notice. OPM shall send written notice of suspension 
according to the procedures and methods described in Sec.  890.1006(c)-
(f).
    (b) Contents of notice. The suspension notice shall contain 
information indicating that:
    (1) The provider has been suspended, effective on the date of the 
notice;
    (2) The initial period of the suspension;
    (3) The basis for the suspension;
    (4) The provisions of law and regulation authorizing the 
suspension;
    (5) The effect of the suspension; and
    (6) The provider's rights to contest the suspension.


Sec.  890.1034  Counting a period of suspension as part of a subsequent 
debarment.

    The debarring official may consider the provider's contiguous 
period of suspension when determining the length of a debarment.


Sec.  890.1035  Provider contests of suspensions.

    (a) Filing a contest of the suspension. A provider may challenge a 
suspension by filing a contest, in writing, with the suspending 
official not later than 30 days after receiving notice of suspension. 
The suspension shall remain in effect during the contest, unless 
rescinded by the suspending official.
    (b) Informal proceeding. The suspending official shall use 
informal, flexible procedures to conduct the contest. Formal rules of 
evidence and procedure do not apply to this proceeding.


Sec.  890.1036  Information considered in deciding a contest.

    (a) Presenting information and arguments to the suspending 
official. A provider may submit documents and written arguments in 
opposition to the suspension, and may appear personally, or through a 
representative, before the suspending official to provide any other 
relevant information.
    (b) Specific factual basis for contesting the suspension. The 
provider shall identify specific facts that contradict the basis for 
the suspension as stated in the suspension notice. A general denial of 
the basis for suspension does not raise a genuine dispute over facts 
material to the suspension, and the suspending official shall not give 
such a denial any probative weight.
    (c) Mandatory disclosures. Any provider contesting a suspension 
shall disclose the items of information set forth in Sec.  890.1023(c). 
Failure to provide such information completely and accurately may be a 
basis for OPM to initiate further legal or administrative action 
against the provider.


Sec.  890.1037  Cases where additional fact-finding is not required.

    The suspending official may decide a contest without an additional 
fact-finding process if:
    (a) Previously adjudicated facts. The suspension is based on an 
indictment or on facts determined by a prior adjudication in which the 
provider was afforded due process rights. Examples of due process 
proceedings include, but are not limited to, the adjudication 
procedures associated with licensure revocation, suspension, 
restriction, or nonrenewal by a State licensing authority; similar 
administrative adjudications by Federal, State, or local agencies; a 
criminal conviction or civil judgment; or an action by the provider 
that constitutes a waiver of his right to a due process adjudication, 
such as surrender of professional licensure during the pendency of a 
disciplinary hearing, entering a guilty plea or confession of judgment 
in a judicial proceeding, or signing a settlement agreement stipulating 
facts that constitute a sanctionable violation. Neither the existence 
of the prior adjudication nor any of the underlying circumstances are 
considered to be subject to genuine factual dispute as part of the 
suspension proceeding.
    (b) Advisory by law enforcement officials. OPM is advised by the 
Department of Justice, the appropriate U.S. Attorney's Office, a State 
attorney general's office, or a State or local prosecutor's office that 
proceedings before a presiding official would prejudice the substantial 
interests of the Government in pending or contemplated legal 
proceedings based on the same facts as the suspension.
    (c) No bona fide dispute of material facts. The information, 
arguments, and documents submitted to the suspending official do not 
establish that there is a bona fide factual dispute regarding facts 
material to the suspension.


Sec.  890.1038  Deciding a contest without additional fact-finding.

    (a) Written decision. The suspending official shall issue a written 
decision on the contest within 30 days after the record closes for 
submitting evidence, arguments, and information. The suspending 
official may extend this timeframe for good cause.
    (b) No further administrative review available. The suspending 
official's decision is final and is not subject to further 
administrative review.


Sec.  890.1039  Cases where additional fact-finding is required.

    (a) Criteria for holding fact-finding proceeding. The debarring 
official shall request another OPM official (``presiding official'') to 
hold an additional fact-finding proceeding if:
    (1) Facts material to the suspension have not been adjudicated in a 
prior due process proceeding; and
    (2) These facts are genuinely in dispute, based on the entire 
administrative record available to the debarring official.
    (b) Qualification to serve as presiding official. The presiding 
official is designated by the OPM Director or another OPM official 
authorized by the Director to make such designations. The presiding 
official shall be a senior official who is qualified to conduct 
informal adjudicative proceedings and who has had no previous contact 
with the suspension or the contest.
    (c) Effect on contest. The suspending official shall defer a final 
decision on the contest pending the results of the fact-finding 
proceeding.

[[Page 5483]]

Sec.  890.1040  Conducting a fact-finding proceeding.

    (a) Informal proceeding. The presiding official may conduct the 
fact-finding proceedings as informally as practicable, consistent with 
principles of fundamental fairness. Specific rules of evidence or 
procedure do not apply to these proceedings.
    (b) Proceeding limited to disputed material facts. The presiding 
official shall consider only the genuinely disputed facts identified by 
the suspending official as relevant to the basis for the suspension. 
Matters that have been previously adjudicated or which are not in bona 
fide dispute within the record shall not be considered by the presiding 
official.
    (c) Right to present information, evidence, and arguments. A 
provider may appear before the presiding official with counsel, submit 
oral and written arguments and documentary evidence, present witnesses, 
question any witnesses testifying in support of the suspension, and 
challenge the accuracy of any other evidence that the agency offers as 
a basis for the suspension.
    (d) Record of proceedings. The presiding official shall make an 
audio recording of the proceedings and shall provide a copy to the 
provider at no charge. If the provider wishes to have a transcribed 
record, OPM shall arrange for production of one which may be purchased 
at cost.
    (e) Presiding official's findings. The presiding official shall 
resolve all of the disputed facts identified by the suspending 
official, on the basis of a preponderance of the evidence in the entire 
administrative record. Within 30 days after the record of the 
proceeding closes, the presiding official shall issue a written report 
of all findings of fact to the suspending official.


Sec.  890.1041  Deciding a contest after a fact-finding proceeding.

    (a) Presiding official's findings shall be accepted. The suspending 
official shall accept the presiding official's findings, unless they 
are arbitrary, capricious, or clearly erroneous.
    (b) Suspending official's decision. Within 30 days after receiving 
the presiding official's report, the suspending official shall issue a 
final written decision that either sustains, modifies, or terminates 
the suspension. The suspending official may extend this period for good 
cause.
    (c) Effect on subsequent debarment or suspension proceedings. A 
decision by the suspending official to modify or terminate a suspension 
shall not prevent OPM from subsequently debarring the same provider, or 
any other Federal agency from either suspending or debarring the 
provider, based on the same facts.

Effect of Debarment


Sec.  890.1042  Effective dates of debarments.

    (a) Minimum notice period. A debarment shall take effect not sooner 
than 30 days after the date of OPM's notice of proposed debarment, 
unless the debarring official specifically determines that the health 
or safety of covered individuals or the integrity of the FEHBP warrants 
an earlier effective date. In such a situation, the notice shall 
specifically inform the provider that the debarring official decided to 
shorten or eliminate the 30-day notice period.
    (b) Uncontested debarments. If a provider does not file a contest 
within the 30-day notice period, the proposed debarment shall take 
effect on the date stated in the notice of proposed debarment, without 
further procedures, actions, or notice by OPM.
    (c) Contested debarments and requests for reducing the period of 
debarment. If a provider files a contest within the 30-day notice 
period, the proposed debarment shall not go into effect until the 
debarring official issues a final written decision, unless the health 
or safety of covered individuals or the integrity of the FEHBP requires 
the debarment to be effective while the contest is pending.


Sec.  890.1043  Effect of debarment on a provider.

    (a) FEHBP payments prohibited. A debarred provider is not eligible 
to receive payment, directly or indirectly, from FEHBP funds for items 
or services furnished to a covered individual on or after the effective 
date of the debarment. Also, a provider shall not accept an assignment 
of a claim for items or services furnished to a covered individual 
during the period of debarment. These restrictions shall remain in 
effect until the provider is reinstated by OPM.
    (b) Governmentwide effect. Debarment precludes a provider from 
participating in all other Federal agencies' procurement and 
nonprocurement programs and activities, as required by section 2455 of 
the Federal Acquisition Streamlining Act of 1994 (Pub. L. 103--355). 
Other agencies may grant a waiver or exception under their own 
regulations, to permit a provider to participate in their programs, 
notwithstanding the OPM debarment.
    (c) Civil or criminal liability. A provider may be subject to civil 
monetary penalties under this subpart or criminal liability under other 
Federal statutes for knowingly filing claims, causing claims to be 
filed, or accepting payment from FEHBP carriers for items or services 
furnished to a covered individual during a period of debarment .

Notifying Outside Parties About Debarment and Suspension Actions


Sec.  890.1044  Entities notified of OPM-issued debarments and 
suspensions.

    When OPM debars or suspends a provider under this subpart, OPM 
shall notify:
    (a) All FEHBP carriers;
    (b) The General Services Administration, for publication in the 
comprehensive Governmentwide list of Federal agency exclusions;
    (c) Other Federal agencies that administer health care or health 
benefits programs; and
    (d) State and local agencies, authorities, boards, or other 
organizations with health care licensing or certification 
responsibilities.


Sec.  890.1045  Informing persons covered by FEHBP about debarment or 
suspension of their provider.

    FEHBP carriers are required to notify covered individuals who have 
obtained items or services from a debarred or suspended provider within 
one year of the date of the debarment or suspension of:
    (a) The existence of the provider's debarment or suspension;
    (b) The minimum period remaining in the provider's period of 
debarment; and
    (c) The requirement that OPM terminate the debarment or suspension 
before FEHBP funds can be paid for items or services the provider 
furnishes to covered individuals.

Exceptions to the Effect of Debarments


Sec.  890.1046  Effect of debarment on payments for services furnished 
in emergency situations.

    A debarred 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.


Sec.  890.1047  Special rules for institutional providers.

    (a) Covered individual admitted before debarment. If a covered 
person is admitted as an impatient before the effective date of an 
institutional provider's debarment, that provider may continue to 
receive payment of FEHBP funds for inpatient institutional services

[[Page 5484]]

until the covered person is released or transferred, unless the 
debarring official terminates payments under paragraph (b) of this 
section.
    (b) Health and safety of covered individuals. If the debarring 
official determines that the health and safety of covered persons would 
be at risk if they remain in a debarred 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 shall immediately send written notice 
of its action to the institutional provider.
    (d) Finality of debarring official's decision. The debarring 
official's decision to limit or deny payments under paragraph (b) of 
this section is not subject to further administrative review or 
reconsideration.


Sec.  890.1048  Waiver of debarment for a provider that is the sole 
source of health care services in a community.

    (a) Application required. A provider may apply for a limited waiver 
of debarment at any time after receiving OPM's notice of proposed 
debarment. Suspended providers are not eligible to request a waiver of 
suspension.
    (b) Criteria for granting waiver. To receive a waiver, a provider 
shall clearly demonstrate that:
    (1) The provider is the sole community provider or the sole source 
of essential specialized services in a community;
    (2) A limited waiver of debarment would be in the best interests of 
covered individuals in the defined service area;
    (3) There are reasonable assurances that the actions which formed 
the basis for the debarment shall not recur; and
    (4) There is no basis under this subpart for continuing the 
debarment.
    (c) Waiver applies only in the defined service area. A limited 
waiver applies only to items or services provided within the defined 
service area where a provider is the sole community provider or sole 
source of essential specialized services.
    (d) Governmentwide effect continues. A limited waiver applies only 
to a provider's FEHBP transactions. Even if OPM waives a debarment for 
FEHBP purposes, the governmentwide effect under section 2455 of the 
Federal Acquisition Streamlining Act of 1994 (Pub. L. 103-355) 
continues for all other Federal agencies' procurement and 
nonprocurement programs and activities.
    (e) Waiver rescinded if circumstances change. OPM shall rescind the 
limited waiver when any of its underlying bases no longer apply. If OPM 
rescinds the limited waiver, the provider's debarment shall resume full 
effect for all FEHBP transactions. Events warranting rescission 
include, but are not limited to:
    (1) The provider ceases to furnish items or services in the defined 
service area;
    (2) Another provider begins to furnish equivalent items or services 
in the defined service area, so that the provider who received a waiver 
is no longer the sole provider or sole source; or
    (3) The actions that formed the basis for the provider's debarment, 
or similar acts, recur.
    (f) Effect on period of debarment. The minimum period of debarment 
is established when the debarment is initially imposed. A subsequent 
decision to grant, deny, or rescind a limited waiver shall not change 
that period.
    (g) Application is necessary for reinstatement. A provider who has 
received a limited waiver shall apply for reinstatement at the end of 
the debarment period, even if a limited waiver is in effect when the 
debarment expires.
    (h) Finality of debarring official's decision. The debarring 
official's decision to grant or deny a limited waiver is final and not 
subject to further administrative review or reconsideration.

Special Exceptions to Protect Covered Persons


Sec.  890.1049  Claims for non-emergency items or services furnished by 
a debarred provider.

    (a) Covered individual unaware of debarment. FEHBP funds may be 
paid for items and services furnished by a debarred provider if, at the 
time the items or services were furnished, the covered individual did 
not know, and could not reasonably be expected to know, that the 
provider was debarred. 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 shall send a written 
notice to the covered individual, stating that:
    (1) The provider is debarred and prohibited from receiving payment 
of FEHBP funds for items or services furnished after the debarment 
date;
    (2) Claims shall not be paid for items or services furnished by the 
debarred provider after the covered individual receives notice of the 
debarment;
    (3) The current claim is being paid as a legally-authorized 
exception to the effect of the debarment in order to protect covered 
individuals who obtain items or services without knowledge of the 
provider's debarment;
    (4) FEHBP carriers are required to deny payment of any claim for 
items or services rendered by a debarred 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 when the items or services were rendered;
    (5) The minimum period remaining in the provider's debarment; and
    (6) FEHBP funds cannot be paid to the provider until OPM terminates 
the debarment.


Sec.  890.1050  Exception to a provider's debarment for an individual 
enrollee.

    (a) Request by a covered individual. Any individual enrolled in 
FEHBP may submit a request through their FEHBP carrier for continued 
payment of items or services furnished by a debarred provider to any 
person covered under the enrollment. Requests shall not be accepted for 
continued payments to suspended providers.
    (b) OPM action on the request. OPM shall consider the 
recommendation of the FEHBP carrier before acting on the request. To be 
approved, the request shall demonstrate that:
    (1) Interrupting an existing, ongoing course of treatment by the 
provider would have a detrimental effect on the covered individual's 
health or safety; or
    (2) The covered individual does not have access to an alternative 
source of the same or equivalent health care items or services within a 
reasonably accessible service area.
    (c) Scope of the exception. An approved exception applies only to 
the covered individual(s) who requested it, or on whose behalf it was 
requested. The governmentwide effect of the provider's debarment under 
section 2455 of the Federal Acquisition Streamlining Act (Pub. L. 103-
355) is not altered by an exception.
    (d) Provider requests not allowed. OPM shall not consider an 
exception request submitted by a provider on behalf of a covered 
individual.
    (e) Debarring official's decision is final. The debarring 
official's decision on an exception request is not subject to further 
administrative review or reconsideration.

[[Page 5485]]

Reinstatement


Sec.  890.1051  Applying for reinstatement when period of debarment 
expires.

    (a) Application required. Reinstatement is not automatic when the 
minimum period of a provider's debarment expires. The provider shall 
apply in writing to OPM, supplying specific information about the 
reinstatement criteria outlined in paragraph (c) of this section.
    (b) Reinstatement date. A debarred provider may submit a 
reinstatement application not earlier than 60 days before the nominal 
expiration date of the debarment. However, in no case shall OPM 
reinstate a provider before the minimum period of debarment expires.
    (c) Reinstatement criteria. To be approved, the provider's 
reinstatement application shall clearly demonstrate that:
    (1) There are reasonable assurances that the actions resulting in 
the provider's debarment have not recurred and will not recur;
    (2) There is no basis under this subpart for continuing the 
provider's debarment; and
    (3) There is no pending criminal, civil, or administrative action 
that would subject the provider to debarment by OPM.
    (d) Written notice of OPM action. OPM shall inform the provider in 
writing of its decision regarding the reinstatement application.
    (e) Limitation on reapplication. If OPM denies a provider's 
reinstatement application, the provider is not eligible to reapply for 
1 year after the date of the denial.


Sec.  890.1052  Reinstatements without application.

    OPM shall reinstate a provider without a reinstatement application 
if:
    (a) Conviction reversed. The conviction on which the provider's 
debarment was based is reversed or vacated by a final decision of the 
highest appeals court with jurisdiction over the case; and the 
prosecutorial authority with jurisdiction over the case has declined to 
retry it, or the deadline for retrial has expired without action by the 
prosecutor.
    (b) Sanction terminated. A sanction imposed by another Federal 
agency, on which the debarment was based, is terminated by that agency.
    (c) Court order. A Federal court orders OPM to stay, rescind, or 
terminate a provider's debarment.
    (d) Written notice. When reinstating a provider without an 
application, OPM shall send the provider written notice of the basis 
and effective date of his reinstatement.


Sec.  890.1053  Table of procedures and effective dates for 
reinstatements.

    The procedures and effective dates for reinstatements under this 
subpart are:

------------------------------------------------------------------------
                                   Application
     Basis for debarment            required?          Effective date
------------------------------------------------------------------------
Period of debarment expires.  Yes.................  After debarment
                                                     expires.
Conviction reversed on final  No..................  Retroactive (start
 appeal/no retrial possible.                         of debarment).
Other agency sanction ends..  No..................  Ending date of
                                                     sanction.
Court orders reinstatement..  No..................  Retroactive (start
                                                     of debarment).
------------------------------------------------------------------------

Sec.  890.1054  Agencies and entities to be notified of reinstatements.

    OPM shall inform the FEHBP carriers, Government agencies and other 
organizations that were originally notified of a provider's debarment 
when a provider is reinstated under Sec.  890.1051 or Sec.  890.1052.


Sec.  890.1055  Contesting a denial of reinstatement.

    (a) Obtaining reconsideration of the initial decision. A provider 
may contest OPM's decision to deny a reinstatement application by 
submitting documents and written arguments to the debarring official 
within 30 days of receiving the notice described in Sec.  890.1051(d). 
In addition, the provider may request to appear in person to present 
oral arguments to the debarring official. The provider may be 
accompanied by counsel when making a personal appearance.
    (b) Debarring official's final decision on reinstatement. The 
debarring official shall issue a final written decision, based on the 
entire administrative record, within 30 days after the record closes to 
receipt of information. The debarring official may extend the decision 
period for good cause.
    (c) Finality of debarring official's decision. The debarring 
official's final decision regarding a provider's reinstatement is not 
subject to further administrative review or reconsideration.

Civil Monetary Penalties and Financial Assessments [Reserved]

[FR Doc. 03-2398 Filed 1-31-03; 8:45 am]
BILLING CODE 6325-52-U