[Federal Register Volume 78, Number 175 (Tuesday, September 10, 2013)]
[Notices]
[Pages 55257-55258]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-22006]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES


Patient Safety and Quality Improvement: Civil Money Penalty 
Inflation Adjustment

AGENCY: Office for Civil Rights, Office of the Secretary, HHS.

ACTION: Notice.

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SUMMARY: In accordance with the Federal Civil Penalties Inflation 
Adjustment Act of 1990, the Office for Civil Rights has determined that 
an adjustment to the maximum civil money penalty amount for violations 
of the confidentiality provisions of the Patient Safety and Quality 
Improvement Rule is not required at this time.

FOR FURTHER INFORMATION CONTACT: Andra Wicks, 202-205-2292.

SUPPLEMENTARY INFORMATION: 

I. Background

    The Patient Safety and Quality and Improvement Act of 2005 (Patient 
Safety Act), 42 U.S.C. 299b-21 to 299b-26, amended Title IX of the 
Public Health Service Act, 42 U.S.C. 299 et seq., the authorizing 
statute for the Agency for Healthcare Research and Quality. The Patient 
Safety and Quality Improvement Rule, 73 FR 70732 (Nov. 21, 2008), 
implemented the requirements in the Patient Safety Act. The Rule 
provides for the listing and delisting of Patient Safety Organizations, 
the confidentiality and privilege protections of Patient Safety Work 
Product (PSWP), and procedures for enforcement against violations of 
the regulations'

[[Page 55258]]

confidentiality requirements. In particular, under Sec.  3.404, a 
person who discloses identifiable PSWP in knowing or reckless violation 
of the Patient Safety Act and 42 CFR part 3 shall be subject to a civil 
money penalty (CMP) of not more than $10,000 for each act constituting 
a violation.
    Congress enacted the Federal Civil Penalties Inflation Adjustment 
Act of 1990 (28 U.S.C. 2461 note, as amended by the Debt Collection 
Improvement Act of 1996 (31 U.S.C. 3701)) (Inflation Adjustment Act), 
based on its findings that the impact of CMPs had been reduced by 
inflation and that reducing the impact of CMPs had weakened their 
deterrent effect. Inflation Adjustment Act section 2, 28 U.S.C. 2461 
note. In general, the Inflation Adjustment Act requires Federal 
agencies to issue regulations to adjust for inflation each CMP provided 
by law within their jurisdiction. The Inflation Adjustment Act applies 
to civil penalties found within the Public Health Service Act, such as 
the Patient Safety Act's CMP provision. The Inflation Adjustment Act 
directs agencies to issue regulations to adjust CMPs under their 
authority by October 23, 1996, and to make additional adjustments at 
least once every four years thereafter based on a specific calculation 
set forth in the Act. While the Inflation Adjustment Act CMP adjustment 
requirements apply to most federal statutes, they do not apply to CMPs 
included in the Social Security Act. The CMPs for title II, subtitle F 
(Administrative Simplification) of the Health Insurance Portability and 
Accountability Act of 1996 (HIPAA) are found at section 1176 of the 
Social Security Act. Thus, the Inflation Adjustment Act does not 
require, or provide authority for, the Department to adjust the HIPAA 
administrative simplification CMPs.
    Because the Patient Safety Act was enacted after October 23, 1996, 
we interpret the Inflation Adjustment Act as requiring the Department 
to determine whether an adjustment for inflation is necessary for the 
Patient Safety Act's CMP amount at least once every four years, 
beginning from the Patient Safety Act's date of enactment, which was 
July 29, 2005. Accordingly, on August, 25, 2009, we published a direct 
final rule to amend the Patient Safety and Quality Improvement Rule by 
adjusting for inflation the maximum CMP amount for violations of the 
confidentiality provisions of the Rule. (74 FR 42777 (Aug. 25, 2009).) 
We chose to use direct final rulemaking because we did not expect to 
receive any adverse comment on the rule. The Department did not receive 
any adverse comments, and the direct final rule became effective and 
the Patient Safety and Quality Improvement Rule was amended on November 
23, 2009. The amendment increased the maximum CMP amount from $10,000 
to $11,000.

II. No Adjustment is Necessary

    In accordance with the Inflation Adjustment Act, the Office for 
Civil Rights (OCR) has determined that an adjustment to the maximum CMP 
amount for violations of the confidentiality provisions of the Patient 
Safety and Quality Improvement Rule is not required at this time.
    The Inflation Adjustment Act provides for the adjustment of a 
penalty amount through a three-step process.\1\ First, we calculate an 
increase in the penalty amount by a ``cost-of-living adjustment.'' 
Inflation Adjustment Act section 5(a), 28 U.S.C. 2461 note. The 
Inflation Adjustment Act defines the cost-of-living adjustment as ``the 
percentage (if any) for each civil monetary penalty by which--(1) the 
Consumer Price Index for the month of June of the calendar year 
preceding the adjustment, exceeds (2) the Consumer Price Index for the 
month of June of the calendar year in which the amount of such civil 
monetary penalty was last set or adjusted pursuant to law.'' Inflation 
Adjustment Act section 5(b), 28 U.S.C. 2461 note. Second, we round the 
adjustment amount pursuant to the methodology set forth in section 5(a) 
of the Inflation Adjustment Act, which rounds the increase based on the 
size of the underlying penalty, as follows:
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    \1\ Pursuant to the Debt Collection Improvement Act's amendment 
to the Federal Civil Penalties Inflation Adjustment Act of 1990, the 
third-step in adjusting a penalty amount requires that the first 
adjustment of the penalty be limited to ten percent of the penalty 
amount. This step is not applicable here because the first 
adjustment to the CMP with respect to the Patient Safety Act 
occurred on September 24, 2009.
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    Any increase determined under this subsection shall be rounded to 
the nearest--
    (1) multiple of $10 in the case of penalties less than or equal to 
$100;
    (2) multiple of $100 in the case of penalties greater than $100 but 
less than or equal to $1,000;
    (3) multiple of $1,000 in the case of penalties greater than $1,000 
but less than or equal to $10,000;
    (4) multiple of $5,000 in the case of penalties greater than 
$10,000 but less than or equal to $100,000;
    (5) multiple of $10,000 in the case of penalties greater than 
$100,000 but less than or equal to $200,000; and
    (6) multiple of $25,000 in the case of penalties greater than 
$200,000.
    With respect to step 1 of the adjustment, the Consumer Price Index 
(CPI) for June of 2012 (the calendar year preceding publication of this 
Notice) was 229.478. The CPI for June of 2009 (the calendar year the 
CMP was last adjusted for inflation) was 215.693. The percent change in 
these CPIs is an increase of 6.39 percent. This leads to an unrounded 
increase in the Patient Safety Act's CMP of $702.90.
    With respect to step 2 of the adjustment, we rounded the amount of 
the increase ($702.90) to the nearest multiple of $5,000 because the 
current maximum CMP is $11,000, which places it in tier (4) above 
(i.e., penalties greater than $10,000 but less than or equal to 
$100,000). The nearest multiple of $5,000 for the $702.90 increase is 
zero.
    Thus, based on the above, we are not amending 42 CFR 3.404(b) at 
this time, and the current maximum CMP remains at $11,000. As required 
by the Inflation Adjustment Act, we will consider whether an adjustment 
is needed again in four years.

    Dated: September 3, 2013.
Leon Rodriguez,
Director.
[FR Doc. 2013-22006 Filed 9-9-13; 8:45 am]
BILLING CODE 4153-01-P