[Federal Register Volume 68, Number 27 (Monday, February 10, 2003)]
[Proposed Rules]
[Pages 6649-6653]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-3125]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 68, No. 27 / Monday, February 10, 2003 / 
Proposed Rules  

[[Page 6649]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 890

RIN 3206-AJ42


Financial Sanctions of Health Care Providers Participating in the 
Federal Employees Health Benefits Program

AGENCY: Office of Personnel Management.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Office of Personnel Management (OPM) is proposing to amend 
its regulations on administrative sanctions of health care providers 
participating in the Federal Employees Health Benefits Program (FEHBP). 
This proposed rule addresses the financial sanctions provisions of 
Section 2 of Public Law 105-266, the Federal Employees Health Care 
Protection Act of 1998, which authorize OPM to impose civil monetary 
penalties and financial assessments against health care providers who 
commit certain types of violations against the FEHBP. In concert with 
the previously-issued regulations on debarment and suspension 
authorities, this proposed rule will afford OPM a full range of 
administrative remedies to deter and rectify provider misconduct within 
FEHBP. The regulatory framework established by this issuance provides 
appropriate due process protections to assure that the amounts of 
financial sanctions are assessed through a consistent and equitable 
process, the Government's financial interests are fully protected, and 
financial sanctions are imposed only after an opportunity for an 
administrative hearing on all facts material to the basis for the 
sanctions.

DATES: Submit comments on or before April 11, 2003.

ADDRESSES: Send or deliver written comments to David Cope, U.S. Office 
of Personnel Management, 1900 E Street NW., Room 6400, Washington, DC 
20415, or submit comments electronically to [email protected].

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

    Section 2 of the Federal Employees Health Care Protection Act of 
1998 (Pub. L. 105-266), enacted a comprehensive set of administrative 
sanctions authorities for OPM to use in combating health care provider 
fraud within the FEHBP. These authorities fall into two broad 
categories--exclusion, comprising suspension and debarment from 
participation in FEHBP, and financial sanctions, comprising civil 
monetary penalties and financial assessments.
    On December 12, 2001, OPM published proposed regulations at 66 FR 
64160 to implement the exclusion-based authorities. The current 
issuance contains proposed regulations for the financial sanctions 
authorities. When issued as final rules, the two regulatory packages 
shall fully implement all of the administrative sanctions enacted by 
Pub. L. 105-266.
    Administrative sanctions enable an agency to protect its financial 
and program interests against individuals or entities that have 
committed certain types of actionable violations specified by statute. 
In addition, health care provider sanctions also protect the health 
care interests of persons covered through the FEHBP. Both of these 
interests are specifically recognized by the proposed regulations as 
principal objectives of sanctions activities.
    Exclusion-related sanctions recognize past misconduct and protect 
against future violations by removing the subject of the sanction from 
further participation in FEHBP. (In the context of the FEHBP sanctions 
statute, ``participation'' means receiving funds. Thus, an excluded 
provider may treat FEHBP covered persons, but may not be paid FEHBP 
funds for any items or services provided after the effective date of 
the exclusion.)
    Financial sanctions have similar ``look back'' and ``look forward'' 
purposes. Pub. L. 105-266 established two categories of financial 
sanctions--assessments and civil monetary penalties. As stated in Sec.  
890.1060(b) of the proposed rule, assessments are intended to recognize 
all of the losses, costs, and damages OPM incurred as the result of a 
provider's wrongful conduct, although the amount assessed is not 
limited by the dollar value of those items. Civil monetary penalties 
are lump-sum amounts that, while computed by reference to improper 
claims, are intended principally to deter future violations.
    Section 890.1060(e) states that financial sanctions may be imposed 
in addition to all other criminal, civil, and administrative remedies 
that any state or Federal agency may apply to the same conduct by a 
provider.

Bases for Financial Sanctions

    Pub. L. 105-266 sets forth three bases for imposing financial 
sanctions. All relate in some degree either to claims actually filed 
with FEHBP carriers or to conduct associated with claims, even if no 
claim was filed. In contrast to exclusion-based sanctions, where the 
underlying violations need not have affected FEHBP, financial sanctions 
may be imposed only for violations that directly involve FEHBP 
enrollees, carriers, or funds.
    As outlined in Sec.  890.1061 of the proposed rule, the bases for 
financial sanctions are (1) fraudulent or improper claims; (2) false or 
misleading statements in or about claims; and (3) failure to provide 
claims-related information that is required by law to be disclosed.

Imposing Financial Sanctions

    While some exclusion-based sanctions are mandatory (i.e., OPM must 
debar a provider who commits certain types of violations), imposition 
of any financial sanction is always permissive with the debarring 
official. Sections 890.1062(b) through (d) identify the factors that 
the debarring official must consider in deciding whether to impose 
financial sanctions in a given case. Most of these factors are 
identified specifically by Pub. L. 105-266. We have added Sec.  
890.1062(d) to reflect the particular importance OPM attaches to 
protecting FEHBP covered persons from untrustworthy providers.

Amounts of Financial Sanctions

    Section 890.1063 reflects the statutory limits on amounts of 
financial sanctions. Assessments may not exceed twice the amount 
claimed for each item or service ``involved'' in the claims on which 
the assessment is based. Civil monetary penalties may not exceed

[[Page 6650]]

$10,000 for each ``involved'' item or service. As the statute makes 
clear, penalties and assessments may be imposed concurrently for the 
same violations.

Setting the Amount of Financial Sanctions Within Statutory Limits

    Federal courts have regularly upheld the use of financial sanctions 
authority in health care claims cases to produce a total of assessments 
and penalties that substantially exceeds the amount of Federal funds 
that had been paid improperly. Thus, the debarring official has 
authority to set sanctions amounts across very wide permissible limits, 
and decisions regarding the amounts may carry significant financial 
consequences for providers. Section 890.1064 is intended to provide the 
guidance necessary for the debarring official to exercise this 
authority in an equitable and consistent manner. Section 890.1064(b) 
sets the overall policy context for determining amounts of financial 
sanctions, including recovery of all damages, losses, and costs 
incurred by OPM as a result of sanctionable violations, and imposition 
of an additional penalty amount to deter future violations. Section 
890.1064(c) emphasizes that ``damages, losses, and costs'' are to be 
given the broadest possible interpretation. Section 890.1064(d) 
summarizes the factors that the debarring official must consider in 
determining the amount of financial sanctions. These consist of (1) the 
factors identified in Sec.  890.1062 as material to determining whether 
to impose financial sanctions; (2) the level of aggravation or 
mitigation reflected in the circumstances of the case; (3) the need to 
deter future misconduct; and (4) the provider's financial situation. 
This latter factor is not referred to in Pub. L. 105-266, but the 
concept appears in several other agencies' financial sanctions 
regulations, including the Department of Health and Human Services' 
Medicare provider sanctions authorities. Section 890.1064(e) addresses 
aggravating and mitigating factors as a series of benchmarks, 
describing the types of violations that would warrant assessments and 
penalties at the higher and lower ends of the statutory range.

Procedures

    The procedures for proposing and imposing financial sanctions 
generally mirror those used for permissive debarments. OPM initiates a 
financial sanction action by sending written notice of the proposed 
sanction. As is the case with exclusion-based sanctions, there is a 6-
year limitation period for proposed financial sanctions. Section 
890.1066 explains the limitation period and specifies the contents and 
methods of delivery of the notice. Section 890.1067 sets out the 
options available to providers upon receiving a notice of proposed 
sanctions. In brief, the provider may either formally contest the 
sanctions or seek to settle or compromise them through negotiation with 
the debarring official. As indicated in Sec.  890.1068, if the subject 
of the proposed sanction takes no action during the 30-day notice 
period, OPM may immediately finalize the sanction, without further 
right of appeal or recourse by the provider.

Contesting Proposed Financial Sanctions

    Sections 890.1069 through 1071 address contests of proposed 
financial sanctions. They incorporate by reference most of the 
provisions of Sec. Sec.  890.1022 through 1029, regarding contests of 
proposed permissive debarments.
    As indicated by Sec.  890.1069, the subject of the proposed 
sanction may contest it simply by submitting documents to the debarring 
official, or, at the provider's option, may also make a personal 
appearance, with or without counsel, to present testimony and oral 
arguments.
    Section 890.1070(a) states that (as is the case in contests of 
proposed debarments), facts previously adjudicated in due process 
proceedings (e.g., criminal or civil proceedings, administrative 
hearings, or actions that constitute waiver of the right to a due 
process proceeding) are binding on the debarring official in deciding 
the contest.
    Section 890.1070(b) sets ``preponderance of the evidence'' as the 
standard of proof for decisions on contests.
    Section 890.1070(c) states that the amounts of penalties and 
assessments proposed in OPM's notice to the provider effectively 
establish a ceiling on the size of financial sanctions that may 
ultimately be imposed. The debarring official cannot increase the 
proposed amount under any circumstances, and has the discretion to 
impose a lower amount if evidence in the administrative record so 
warrants.
    Section 890.1071 applies to contests of financial sanctions the 
same decisionmaking methodologies established for contests of proposed 
debarments in Sec. Sec.  890.1026 through 1029. The debarring official 
shall decide the contest without a further proceeding if there are no 
disputed material facts. If material facts are in dispute, the 
debarring official must refer them to a hearing officer who has had no 
prior involvement in the case, to conduct a due process hearing. The 
hearing process under Sec.  890.1071(c) tracks that used to resolve 
disputed material facts in contests of proposed debarments. The hearing 
officer reports the facts found to the debarring official, who must 
accept and apply these findings in reaching a final decision on the 
contest.

Appeals of Final Decisions

    Section 890.1072 states the right of judicial appeal provided in 
the FEHBP sanctions statute. Any provider on whom a final decision of 
the debarring official imposes any financial sanction may appeal to the 
appropriate U.S. district court, unless the provider's ability to 
appeal has been foreclosed by their failure to administratively contest 
a proposed sanction in a timely manner.

Collecting Payment of Financial Sanctions

    Section 890.1073 outlines the methods OPM shall use to collect 
financial sanctions. These include a mutually agreed payment schedule 
and other administrative debt collection procedures, including offset 
against monies owed by other Federal agencies. If administrative 
efforts do not resolve the debt, 5 U.S.C. 8902a(i) authorizes the 
Department of Justice to file a civil lawsuit in the appropriate U.S. 
district court to enforce payment. As stated in 890.1073(e), the 
statute further specifies that monies collected in respect of financial 
sanctions are to be paid to the Employees Health Benefits Fund.

Regulatory Flexibility Act

    I certify that this proposed regulation will not have a significant 
economic impact on a substantial number of small entities, because the 
financial sanctions are limited to the portion of health care 
providers' activities involving transactions with the Federal Employees 
Health Benefits Program.

Executive Order 12866, Regulatory Review

    This rule has been reviewed by the Office of Management and Budget 
in accordance with Executive Order 12866.

List of Subjects in 5 CFR Part 890

    Administrative practice and procedure, Government employees, Health 
facilities, Health insurance, Health professions, Hostages, Iraq, 
Kuwait, Lebanon, Military personnel, Reporting and recordkeeping 
requirements, Retirement.


[[Page 6651]]


Office of Personnel Management,
Kay Coles James,
Director.
    Accordingly, OPM proposes to amend 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 continues 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.

    2. In Subpart J, Sec. Sec.  890.1060 through 1073 are added to read 
as follows:

Subpart J--Administrative Sanctions Imposed Against Health Care 
Providers

Sec.

Civil Monetary Penalties and Financial Assessments

890.1060 Purpose and scope of civil monetary penalties and 
assessments.
890.1061 Bases for penalties and assessments.
890.1062 Deciding whether to impose penalties and assessments.
890.1063 Maximum amounts of penalties and assessments.
890.1064 Determining the amounts of penalties and assessments to be 
imposed on a provider.
890.1065 Deciding whether to suspend or debar a provider in a case 
that also involves penalties and assessments.
890.1066 Notice of proposed penalties and assessments.
890.1067 Provider contests of proposed penalties and assessments.
890.1068 Effect of not contesting proposed penalties and 
assessments.
890.1069 Information the debarring official shall consider in 
deciding a provider's contest of proposed penalties and assessments.
890.1070 Burdens of proof and standards of evidence in contests of 
proposed penalties and assessments.
890.1071 Deciding contests of proposed penalties and assessments.
890.1072 Further appeal rights after final decision on penalties and 
assessments.
890.1073 Collecting penalties and assessments.

Civil Monetary Penalties and Financial Assessments


Sec.  890.1060  Purpose and scope of civil monetary penalties and 
assessments.

    (a) Civil monetary penalty. A civil monetary penalty is an amount 
that OPM may impose on a health care provider who commits one of the 
violations listed in Sec.  890.1061. Penalties are intended to protect 
the integrity of FEHBP by deterring repeat violations by the same 
provider and by reducing the likelihood of future violations by other 
providers.
    (b) Assessment. An assessment is an amount that OPM may impose on a 
provider, calculated by reference to the claims involved in the 
underlying violations. Assessments are intended to recognize monetary 
losses, costs, and damages sustained by OPM as the result of a 
provider's violations.
    (c) Use of terminology. In Sec. Sec.  890.1060 through 1072
    Penalty means ``civil monetary penalty;'' and
    Penalties and assessments may connote the singular or plural forms 
of either of those terms, and may represent them in either the 
conjunctive or disjunctive sense.
    (d) Relationship to debarment and suspension. In addition to 
imposing penalties and assessments, OPM may concurrently debar or 
suspend a provider from participating in FEHBP on the basis of the same 
violations.
    (e) Relationship to other penalties provided by law. The penalties, 
assessments, debarment, and suspension imposed by OPM are in addition 
to any other penalties that may be prescribed by law or regulation 
administered by an agency of the Federal Government or any State.


Sec.  890.1061  Bases for penalties and assessments.

    (a) Improper claims. OPM may impose penalties and assessments on a 
provider if a claim presented by that provider for payment from FEHBP 
funds meets the criteria set forth in 5 U.S.C. 8902a(d)(1).
    (b) False or misleading statements. OPM may impose penalties and 
assessments on a provider who makes a false statement or 
misrepresentation as set forth in 5 U.S.C. 8902a(d)(2).
    (c) Failing to provide claims-related information. OPM may impose 
penalties and assessments on a provider who knowingly fails to provide 
claims-related information as otherwise required by law.


Sec.  890.1062  Deciding whether to impose penalties and assessments.

    (a) Authority of debarring official. The debarring official has 
discretionary authority to impose penalties and assessments in 
accordance with 5 U.S.C. 8902a and this subpart.
    (b) Factors to be considered. In deciding whether to impose 
penalties and assessments against a provider that has committed one of 
the violations identified in Sec.  890.1061, OPM shall consider:
    (1) The number and frequency of the provider's violations;
    (2) The period of time over which the violations were committed;
    (3) The provider's culpability for the specific conduct underlying 
the violations;
    (4) The nature of any claims involved in the violations and the 
circumstances under which the claims were presented to FEHBP carriers;
    (5) The provider's history of prior offenses or improper conduct, 
including any actions that could have constituted a basis for a 
suspension, debarment, penalty, or assessment by any Federal or State 
agency, whether or not any sanction was actually imposed;
    (6) Any monetary damages, losses, and costs, as described in Sec.  
890.1064(c), attributable to the provider's violations; and
    (7) Such other factors as justice may require.
    (c) Additional factors when penalty or assessment is based on Sec.  
890.1061(b) or (c). In the case of violations involving false or 
misleading statements or the failure to provide claims-related 
information, OPM shall also consider:
    (1) The nature and circumstances of the provider's failure to 
properly report information; and
    (2) The materiality and significance of the false statements or 
misrepresentations the provider made or caused to be made, or the 
information that the provider knowingly did not report.


Sec.  890.1063  Maximum amounts of penalties and assessments.

    OPM may impose penalties and assessments in amounts not to exceed 
those set forth in 5 U.S.C. 8902a(d).


Sec.  890.1064  Determining the amounts of penalties and assessments to 
be imposed on a provider.

    (a) Authority of debarring official. The debarring official has 
discretionary authority to set the amounts of penalties and assessments 
in accordance with law and this subpart.
    (b) Objectives of penalties and assessments. In setting the amounts 
of penalties and assessments to be imposed on a provider, the debarring 
official shall be guided by the overall objectives of:
    (1) Assuring that the United States is fully compensated for all 
damages, losses, and costs associated with a provider's violations; and
    (2) Deterring future violations by the provider on whom the 
penalties and

[[Page 6652]]

assessments were imposed, and other health care providers.
    (c) Determining damages, losses, and costs. In determining the 
appropriate amount of compensation due to the United States, OPM shall 
include, at the minimum:
    (1) Amounts wrongfully paid from FEHBP funds as the result of a 
provider's violations and interest on those amounts, at rates 
determined by the Department of the Treasury;
    (2) All costs incurred by OPM and FEHBP carriers in investigating a 
provider's sanctionable misconduct; and
    (3) All costs associated with administrative review of a case, 
including every phase of the administrative sanctions process described 
by this subpart.
    (d) Factors considered in determining amounts of penalties and 
assessments. In determining the amounts of penalties and assessments to 
impose on a provider OPM shall consider:
    (1) All of the factors set forth in Sec.  890.1062(b) through (d);
    (2) The provider's personal financial situation, or, in the case of 
violations committed by an entity, the entity's financial situation;
    (3) The Government's interests in deterring future misconduct by 
providers; and
    (4) The presence of aggravating or less serious circumstances, as 
described in paragraphs (e)(1) through (e)(7) of this section.
    (e) Aggravated and less serious circumstances. The presence of 
aggravating circumstances may cause OPM to impose penalties and 
assessments at a higher level within the authorized range, while less 
serious violations may warrant sanctions of relatively lower amounts. 
Paragraphs (e)(1) through (e)(7) of this section provide examples of 
aggravated and less serious violations. These examples are illustrative 
only, and are not intended to represent an exhaustive list of all 
possible types of violations.
    (1) The existence of many separate violations, or of violations 
committed over an extended period of time, constitutes an aggravating 
circumstance. OPM may consider conduct involving a small number of 
violations, committed either infrequently or within a brief period of 
time, to be less serious.
    (2) Violations for which a provider had direct knowledge of the 
material facts (for example, submitting claims that the provider knew 
to contain false, inaccurate, or misleading information), or for which 
the provider did not cooperate with OPM's or an FEHBP carrier's 
investigations, constitute aggravating circumstances. OPM may consider 
violations where the provider did not have direct knowledge of the 
material facts, or in which the provider cooperated with post-violation 
investigative efforts, to be less serious.
    (3) Violations resulting in substantial damages, losses, and costs 
to OPM, the FEHBP, or FEHBP covered persons constitute aggravating 
circumstances. Violations producing a small or negligible overall 
financial impact may be considered to be less serious.
    (4) A pattern of conduct reflecting numerous improper claims, high-
dollar false claims, or improper claims involving several types of 
items or services constitutes aggravating circumstances. OPM may 
consider a small number of improper claims for relatively low dollar 
amounts to be less serious.
    (5) Every violation involving any harm, or the risk of harm, to the 
health and safety of an FEHBP enrollee, shall be considered an 
aggravating circumstance.
    (6) Any prior violation described in Sec.  890.1062(b)(5) 
constitutes an aggravating circumstance. OPM may consider repeated or 
multiple prior violations to represent an especially serious form of 
aggravating circumstances.
    (7) OPM may consider other circumstances or actions to be 
aggravating or less serious within the context of an individual case, 
as the interests of justice require.


Sec.  890.1065  Deciding whether to suspend or debar a provider in a 
case that also involves penalties and assessments.

    In a case where both penalties and assessments and debarment are 
proposed concurrently, OPM shall decide the proposed debarment under 
the same criteria and procedures as if it had been proposed separately 
from penalties and assessments.


Sec.  890.1066  Notice of proposed penalties and assessments.

    (a) Written notice. OPM shall inform a provider of proposed 
penalties and assessments by written notice, sent via certified mail 
with return receipt requested to the provider's last known street or 
post office address. OPM may, at its discretion, use an express service 
that furnishes a verification of delivery instead of postal mail.
    (b) Statutory limitations period. OPM shall send the notice to the 
provider within 6 years of the date on which the claim underlying the 
proposed penalties and assessments was presented to an FEHBP carrier. 
If the proposed penalties and assessments do not involve a claim 
presented for payment, OPM shall send the notice within 6 years of the 
date of the actions on which the proposed penalties and assessments are 
based.
    (c) Contents of the notice. OPM's notice shall contain, at a 
minimum:
    (1) The statement that OPM proposes to impose penalties and/or 
assessments against the provider;
    (2) Identification of the actions, conduct, and claims that 
comprise the basis for the proposed penalties and assessments;
    (3) The amount of the proposed penalties and assessments, and an 
explanation of how OPM determined those amounts;
    (4) The statutory and regulatory bases for the proposed penalties 
and assessments; and
    (5) Instructions for responding to the notice, including specific 
explanations regarding:
    (i) the provider's right to contest the imposition and/or amounts 
of penalties and assessments before they are formally imposed; and
    (ii) OPM's right, if the provider does not contest the proposed 
penalties and assessments within 30 days of the date he receives the 
notice, to implement them immediately without further administrative 
appeal or recourse.
    (d) Proposing debarment in the same notice. OPM may propose a 
provider's debarment in the same notice that also proposes penalties 
and assessments. In this case, the notice shall also provide the 
elements of information required to appear in a notice of proposed 
debarment under Sec.  890.1006(b).
    (e) Procedures if the notice cannot be delivered. OPM shall apply 
the provisions of Sec.  890.1006(f) if the notice of proposed penalties 
and assessments cannot be delivered as originally addressed.
    (f) Sending notice by electronic means. [Reserved]


Sec.  890.1067  Provider contests of proposed penalties and 
assessments.

    (a) Contesting proposed sanctions. A provider may formally contest 
the proposed penalties and assessments by sending a written notice to 
the debarring official within 30-days after receiving the notice 
described in Sec.  890.1066. The debarring official shall apply the 
administrative procedures set forth in Sec. Sec.  890.1069 through 1071 
to decide the contest.
    (b) Contesting debarments and financial sanctions concurrently. If 
OPM proposes debarment and penalties and assessments in the same 
notice, the provider may contest both the debarment and the financial 
sanctions in the same proceeding. If the provider pursues a combined 
contest, the

[[Page 6653]]

requirements set forth in Sec. Sec.  890.1022 through 1024, as well as 
this section, apply.
    (c) Settling or compromising proposed sanctions. As part of or in 
lieu of a contest, a provider may offer to settle the proposed 
penalties and assessments. The debarring official has authority to 
settle or compromise proposed sanctions at any time before issuing a 
final decision under Sec.  890.1071.


Sec.  890.1068  Effect of not contesting proposed penalties and 
assessments.

    (a) Proposed sanctions may be implemented immediately. If a 
provider does not inform the debarring official of his intention to 
contest proposed penalties and assessments within the 30-day period set 
forth by Sec.  890.1067(a), OPM may implement the proposed sanctions 
immediately, without further procedures.
    (b) Debarring official sends notice after implementing sanctions. 
The debarring official shall send the provider written notice, via 
certified return receipt mail or express delivery service, stating:
    (1) The amount of penalties and assessments imposed;
    (2) The date on which they were imposed; and
    (3) The means by which the provider may pay the penalties and 
assessments.
    (c) No appeal rights. A provider may not pursue a further 
administrative or judicial appeal of the debarring official's final 
decision implementing any sanctions unless a timely contest was filed 
in response to OPM's notice under Sec.  890.1066.


Sec.  890.1069  Information the debarring official shall consider in 
deciding a provider's contest of proposed penalties and assessments.

    (a) Documentary material and written arguments. As part of the 
contest, a provider shall furnish a written statement of reasons why 
the proposed penalties and assessments should not be imposed and/or why 
the amounts proposed are excessive.
    (b) Mandatory disclosures. In addition to any other information 
submitted during the contest, the provider shall inform the debarring 
official in writing of:
    (1) Any existing, proposed, or prior exclusion, debarment, penalty, 
assessment, or other sanction that was imposed by a Federal, State, or 
local government agency, including any administrative agreement that 
purports to affect only a single agency; and
    (2) Any current or prior criminal or civil legal proceeding that 
was based on the same facts as the penalties and assessments proposed 
by OPM.
    (c) In-person appearance. A provider may request a personal 
appearance (in person, by telephone conference, or through a 
representative) to provide testimony and oral arguments to the 
debarring official.


Sec.  890.1070  Burdens of proof and standards of evidence in contests 
of proposed penalties and assessments.

    (a) Previously determined facts. Any facts relating to the basis 
for the proposed penalties and assessments that were determined in a 
prior due process proceeding are binding on the debarring official in 
deciding the contest. Prior due process proceedings are those set forth 
in Sec.  890.1025(a)(1) through (4).
    (b) Preponderance of the evidence. To impose penalties and 
assessments, the debarring official must find that the preponderance of 
the evidence in the entire official record demonstrates that the 
provider committed a sanctionable violation described in Sec.  
890.1061.
    (c) Final decision regarding the amount of penalties and 
assessments. If the preponderance of the evidence establishes that a 
provider committed a sanctionable violation for which penalties and 
assessments may be imposed, the debarring official may impose financial 
sanctions in amounts not exceeding those proposed in the notice issued 
to the provider under Sec.  890.1066.


Sec.  890.1071  Deciding contests of proposed penalties and 
assessments.

    (a) Debarring official reviews entire official record. After the 
provider submits the information and evidence authorized or required by 
Sec.  890.1069, the debarring official shall review the entire official 
record to determine if the contest can be decided without additional 
administrative proceedings, or if an evidentiary hearing is required to 
resolve disputed material facts.
    (b) Deciding the contest without further proceedings. To decide the 
contest without further administrative proceedings, the debarring 
official must determine that the evidentiary record contains no bona 
fide dispute as to material facts. A ``material fact'' is a fact 
essential to determining whether a provider committed a sanctionable 
violation for which penalties and assessments may be imposed. If there 
are no bona fide disputed material facts, the debarring official shall 
apply the provisions of Sec.  890.1070 to reach a final decision of the 
contest.
    (c) Bona fide dispute about material facts. If the debarring 
official determines that the official record contains a bona fide 
dispute about any fact material to the basis for the proposed penalties 
and assessments, a fact-finding hearing shall be held to resolve the 
disputed facts. The provisions of Sec. Sec.  890.1027(b) and (c), 1028, 
and 1029(a) and (b) govern such hearings.
    (d) Debarring official's decision after fact-finding hearing. After 
receiving the results of the fact-finding hearing, the debarring 
official shall apply the provisions of Sec.  890.1070 to reach a final 
decision of the contest.


Sec.  890.1072  Further appeal rights after final decision to impose 
penalties and assessments.

    If the debarring official's final decision imposes any penalties 
and assessments, the affected provider may appeal it to the appropriate 
United States district court under the provisions of 5 U.S.C. 
8902a(h)(2).


Sec.  890.1073  Collecting penalties and assessments.

    (a) Agreed-upon payment schedule. At the time OPM imposes penalties 
and assessments, or the amounts are settled or compromised, the 
provider shall be afforded the opportunity to arrange an agreed-upon 
payment schedule.
    (b) No agreement on payment schedule. In the absence of an agreed-
upon payment schedule, OPM shall collect penalties and assessments 
under its regular procedures for resolving debts owed to the Employees 
Health Benefits Fund.
    (c) Offsets. As part of its debt collection efforts, OPM may 
request other Federal agencies to offset the penalties and assessments 
against amounts that the agencies may owe to the provider, including 
Federal income tax refunds.
    (d) Civil lawsuit. If necessary to obtain payment of penalties and 
assessments, the United States may file a civil lawsuit as set forth in 
5 U.S.C. 8902(i).
    (e) Crediting payments. OPM shall deposit payments of penalties and 
assessments into the Employees Health Benefits Fund.

[FR Doc. 03-3125 Filed 2-7-03; 8:45 am]
BILLING CODE 6325-52-P