[Federal Register Volume 86, Number 217 (Monday, November 15, 2021)]
[Rules and Regulations]
[Pages 62928-62943]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-24672]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of the Secretary

42 CFR Part 3

Centers for Medicare & Medicaid Services

42 CFR Parts 402, 403, 411, 412, 422, 423, 460, 483, 488, and 493

Office of the Inspector General

42 CFR Part 1003

Office of the Secretary

45 CFR Parts 79, 93, 102, 147, 150, 155, 156, 158, and 160

Administration for Children and Families

45 CFR Part 303

RIN 0991-AC0


Adjustment of Civil Monetary Penalties for Inflation and the 
Annual Civil Monetary Penalties Inflation Adjustment for 2021

AGENCY: Office of the Assistant Secretary for Financial Resources, 
Department of Health and Human Services (HHS).

ACTION: Final rule.

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SUMMARY: This final rule finalizes the provisions of the September 6, 
2016 interim final rule that adjusts for inflation the maximum civil 
monetary penalty (CMP) amounts for all agencies within the Department 
of Health and Human Services (HHS) and updates certain agency-specific 
regulations. It also updates our required annual inflation-related 
increases to the CMP amounts in our regulations, under the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015; adds 
references to new penalty authorities; and reflects technical changes 
to correct errors.

DATES: 
    Effective date: This final rule is effective November 15, 2021.
    Applicability date: The adjusted civil monetary penalty amounts 
apply to penalties assessed on or after November 15, 2021, if the 
violation occurred on or after November 2, 2015.

FOR FURTHER INFORMATION CONTACT: David Dasher, Deputy Assistant 
Secretary, Office of Acquisitions, Office of the Assistant Secretary 
for Financial Resources, Room 536-H, Hubert Humphrey Building, 200 
Independence Avenue SW, Washington DC 20201; 202-205-0706.

SUPPLEMENTARY INFORMATION:

I. Background

    The Federal Civil Penalties Inflation Adjustment Act Improvements 
Act of 2015 (section 701 of Pub. L. 114-74) (the ``2015 Act'') amended 
the Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. 
101-410, 104 Stat. 890 (1990)), which is intended to improve the 
effectiveness of civil monetary penalties (CMPs) and to maintain the 
deterrent effect of such penalties, requires agencies to adjust the 
civil monetary penalties for inflation annually.
    The Department of Health and Human Services (HHS) lists the CMP 
authorities and the amounts administered by all of its agencies in 
tabular form in 45 CFR 102.3, which was issued in an interim final rule 
published in the September 6, 2016, Federal Register (81 FR 61538). 
Annual adjustments were subsequently published on February 3, 2017 (82 
FR 9175), October 11, 2018 (83 FR 51369), November 5, 2019 (84 FR 
59549), and January 17, 2020 (85 FR 2869).

II. Provisions of the Final Rule

A. Finalization of the September 6, 2016 Interim Final Rule

    In the September 6, 2016 Federal Register (81 FR 61538), HHS issued 
a department-wide interim final rule (IFR) titled ``Adjustment of Civil 
Monetary Penalties for Inflation'' that established new regulations at 
45 CFR part 102 to adjust for inflation the maximum CMP amounts for the 
various CMP authorities for all agencies within the Department. HHS 
took this action to comply with the Federal Civil Penalties Inflation 
Adjustment Act of 1990 (the Inflation Adjustment Act) (28 U.S.C. 2461 
note 2(a)), as amended by the Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015 (section 701 of the Bipartisan 
Budget Act of 2015, (Pub. L.114-74), enacted on November 2, 2015). In 
addition, the September 2016 IFR included updates to certain agency-
specific regulations to reflect the new provisions governing the 
adjustment of civil monetary penalties for inflation in 45 CFR part 
102.
    One of the purposes of the Inflation Adjustment Act was to create a 
mechanism to allow for regular inflationary adjustments to federal 
civil monetary penalties. Section 2(b)(1) of the Inflation Adjustment 
Act. The 2015 amendments removed an inflation update exclusion that 
previously applied to the Social Security Act as

[[Page 62929]]

well as to the Occupational Safety and Health Act. The 2015 amendments 
also ``reset'' the inflation calculations by excluding prior 
inflationary adjustments under the Inflation Adjustment Act and 
requiring agencies to identify, for each penalty, the year and 
corresponding amount(s) for which the maximum penalty level or range of 
minimum and maximum penalties was established (that is, originally 
enacted by Congress) or last adjusted other than pursuant to the 
Inflation Adjustment Act. In accordance with section 4 of the Inflation 
Adjustment Act, agencies were required to: (1) Adjust the level of 
civil monetary penalties with an initial ``catch-up'' adjustment 
through an interim final rulemaking to take effect by August 1, 2016; 
and (2) make subsequent annual adjustments for inflation.
    In the September 2016 interim final rule, HHS adopted new 
regulations at 45 CFR part 102 to govern adjustment of civil monetary 
penalties for inflation. The regulation at 45 CFR 102.1 provides that 
part 102 applies to each statutory provision under the laws 
administered by HHS (including the Centers for Medicare & Medicaid 
Services (CMS)) concerning CMPs, and that the regulations in part 102 
supersede existing HHS regulations setting forth CMP amounts. The CMPs 
and the adjusted penalty amounts administered by all HHS agencies are 
listed in tabular form in 45 CFR 102.3. In addition to codifying the 
adjusted penalty amounts identified in Sec.  102.3, the HHS-wide 
interim final rule included several technical conforming updates to 
certain agency-specific regulations, including various CMS regulations, 
to identify their updated information, and incorporate a cross-
reference to the location of HHS-wide regulations.
    In the September 12, 2017 Federal Register (82 FR 42748), CMS 
published a correcting amendment that corrected a limited number of 
technical and typographical errors identified in the CMS provisions of 
the September 6, 2016 IFR.
    The Medicare provisions included in the September 2016 IFR are 
subject to requirements of section 1871(a) of the Social Security Act 
(the Act) which sets forth certain procedures for promulgating 
regulations necessary to carry out the administration of the insurance 
programs under Title XVIII of the Act. Section 1871(a)(3)(A) of the Act 
requires the Secretary, in consultation with the Director of the Office 
of Management and Budget (OMB), to establish a regular timeline for the 
publication of final regulations based on the previous publication of a 
proposed rule or an interim final rule. In accordance with section 
1871(a)(3)(B) of the Act, such timeline may vary among different rules, 
based on the complexity of the rule, the number and scope of the 
comments received, and other relevant factors. However, the timeline 
for publishing the final rule cannot exceed 3 years from the date of 
publication of the proposed or interim final rule, unless there are 
exceptional circumstances. After consultation with the Director of OMB, 
the Secretary published a notice, which appeared in the December 30, 
2004 Federal Register (69 FR 78442), establishing a general 3-year 
timeline for publishing Medicare final rules after the publication of a 
proposed or interim final rule.
    Because the conforming changes to the Medicare provisions were part 
of a larger, omnibus departmental interim final rule, we inadvertently 
missed setting a target date for the final rule to make permanent the 
changes to the Medicare regulations in accordance with section 
1871(a)(3)(A) of the Act and the procedures outlined in the December 
2004 notice. Consistent with section 1871(a)(3)(C) of the Act, we 
published notices of continuation extending the effectiveness of the 
technical conforming changes to the Medicare regulations that were 
implemented through interim final rule and to allow time to publish a 
final rule (see the January 2, 2020 (85 FR 7) and September 8, 2020 (85 
FR 55385) continuation documents). The extended time was needed to 
allow for coordination between CMS and the Department to issue a final 
rule and to avoid the potential for confusion between 45 CFR part 102, 
which established the civil monetary payment amounts, and the Medicare 
regulations subject to the timing requirements in section 1871(a)(3)(C) 
of the Act, which would otherwise cause the regulation to revert to the 
language that was used prior to the Inflation Adjustment Act.
    In this final rule, we are finalizing the provisions of the 
September 6, 2016 IFR without modification. Because the provisions were 
established via interim final rulemaking, finalizing the provisions is 
pro forma for all agencies except CMS. Given the statutory requirements 
specified previously, finalization of the September 2016 IFR 
permanently establishes the interim final regulatory provisions for the 
Medicare program.

B. Calculation of Annual Inflation Adjustment

    The annual inflation adjustment for each applicable CMP is 
determined using the percent increase in the Consumer Price Index for 
all Urban Consumers (CPI-U) for the month of October of the year in 
which the amount of each CMP was most recently established or modified. 
In the December 23, 2020, Office of Management and Budget (OMB) 
Memorandum for the Heads of Executive Agencies and Departments, M-21-
10, ``Implementation of the Penalty Inflation Adjustments for 2021, 
Pursuant to the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015,'' OMB published the multiplier for the 
required annual adjustment. The cost-of-living adjustment multiplier 
for 2021, based on the CPI-U for the month of October 2020, not 
seasonally adjusted, is 1.01182. The multiplier is applied to each 
applicable penalty amount that was updated and published for fiscal 
year (FY) 2020 and is rounded to the nearest dollar.

C. Other Revisions

    In addition to the inflation adjustments for 2021, this final rule 
updates the table in 45 CFR 102.3 to add references to new, applicable 
civil money penalty authorities that were established or implemented 
since the publication of the January 17, 2020 update and that are being 
updated in this rule. The rule also corrects several technical errors 
to regulatory references in the table and updates descriptions for 
clarification and accuracy.
    First, a CMS final rule, ``Medicare and Medicaid Programs: CY 2020 
Hospital Outpatient PPS Policy Changes and Payment Rates and Ambulatory 
Surgical Center Payment System Policy Changes and Payment Rates. Price 
Transparency Requirements for Hospitals to Make Standard Charges 
Public'' (84 FR 65524, November 27, 2019), effective January 1, 2021, 
finalized a new provision, codified at 45 CFR 180.90. That section 
establishes CMPs associated with a hospital's noncompliance with price 
transparency disclosure and display requirements, and the table has 
been modified to reflect this requirement.
    Second, section 3202(b) of the Coronavirus Aid, Relief, and 
Economic Security Act (CARES Act) (Pub. L. 116-136) added a requirement 
that each provider of a diagnostic test for COVID-19 make public the 
cash price for such test on the provider's public internet site, and 
authorized the Secretary to impose a CMP on a provider that fails to 
comply. Rulemaking entitled ``Additional Policy and Regulatory 
Revisions in Response to the COVID-19 Public Health Emergency'' (85 FR 
71142, November 6, 2020) implemented this statutory requirement by

[[Page 62930]]

establishing a provision at 45 CFR 182.70, allowing for imposition of a 
CMP, and the table has been modified to reflect this requirement.
    Third, in a CMS interim final rule with comment period entitled 
``Medicare and Medicaid Programs, Clinical Laboratory Improvement 
Amendments (CLIA), and Patient Protection and Affordable Care Act; 
Additional Policy and Regulatory Revisions in Response to the COVID-19 
Public Health Emergency'' (85 FR 54873 through 54874, September 2, 
2020), CMS established requirements for all CLIA laboratories to report 
COVID-19 test results to the Secretary in such form and manner, and at 
such timing and frequency, as the Secretary may prescribe during the 
COVID-19 Public Health Emergency. Failure to report test results as 
required results in condition level deficiencies for which CMPs or 
other penalties may apply. The table has been modified to reflect this 
requirement. Also in this interim final rule, CMS codified new 
enforcement requirements at 42 CFR 488.447 establishing CMP amounts 
that may be imposed against long term care facilities that fail to 
report COVID-19 related data as required in 42 CFR 483.80(g)(1) and 
(2). The table has been modified to reflect these requirements.
    Finally, the following technical errors were identified and are 
corrected in the table at 45 CFR 102.3:
     The regulatory reference of 42 CFR. 1003.210(a)(5) 
implementing 42 U.S.C. 1395cc(g) which was inadvertently omitted from 
the regulation and is added.
     The two descriptions of 42 U.S.C. 1395dd(d)(1) are revised 
for more accuracy because penalties for a responsible physician, unlike 
penalties for a hospital, are not tied to the number of beds in the 
hospital (see 42 U.S.C. 1395dd(d)(1)(B)).
     The first description tied to 42 U.S.C. 1395mm(i)(6)(B)(i) 
is revised from ``is such plan'' to ``if such plan''.
     The regulatory references tied to 42 U.S.C. 1395ss(a)(2), 
(p)(8), (p)(9)(C), (q)(5)(C), (r)(6)(A), (s)(4), (t)(2) incorrectly 
referred to 42 CFR part 405 and are corrected to refer to 42 CFR part 
402.
     The first set of regulatory references tied to 42 U.S.C. 
1395ss(p)(8) are expanded to also include 42 CFR 402.105(f)(2), which 
was inadvertently omitted, and the corresponding description is revised 
to replace ``any person'' with ``someone other than issuer'' for 
greater accuracy and clarification.
     The description for the second set of regulatory 
references tied to 42 U.S.C. 1395ss(p)(8) is revised to replace ``any 
person'' with ``an issuer'' for greater accuracy and clarification.
     The first set of regulatory references tied to 42 U.S.C. 
1395ss(p)(9)(C) are expanded to also include 42 CFR 402.105(f)(3) and 
(4), which were inadvertently omitted, and the corresponding 
description is revised to replace ``any person'' with ``someone other 
than issuer'' for greater accuracy and clarification.
     The description for the second set of regulatory 
references tied to 42 U.S.C. 1395ss(p)(9)(C) is revised to replace 
``any person'' with ``an issuer'' for greater accuracy and 
clarification.
     The description for 42 U.S.C. 18081(c)(2) is being revised 
to ``Failure to comply with ACA requirements related to risk 
adjustment, reinsurance, risk corridors, Exchanges (including QHP 
standards) and other ACA Subtitle D standards; Penalty for violations 
of rules or standards of behavior associated with issuer compliance 
with risk adjustment, reinsurance, risk corridors, Exchanges (including 
QHP standards) and other ACA Subtitle D standards. (42 U.S.C. 300gg-
22(b)(2)(C))'' for greater accuracy and clarification.
     Reference to the existing CMPs authorized under 42 U.S.C. 
1395m-1(a) and 42 CFR 414.504(e) for a reporting entity that has failed 
to report or made a misrepresentation or omission in reporting 
applicable information was inadvertently omitted from the prior annual 
updates and the regulation is modified to include this authority and 
the 2021 adjusted amount. CMS, in separate rulemaking, made the initial 
catch-up adjustment for this amount in accordance with the 2015 Act on 
June 23, 2016 (81 FR 41036, 41069) which was $10,017, and noted that 
subsequent inflationary adjustments would be made to this amount 
annually.
    ++ The adjusted amounts applying the multiplier for each year 
beginning in 2017 through 2020 \1\ are as follows:
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    \1\ The published multiplier for 2017 is 1.01636 (M-17-11, 
Implementation of the 2017 annual adjustment pursuant to the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015, 
published December 16, 2016); for 2018 it is 1.02041 (M-18-03, 
Implementation of Penalty Inflation Adjustments for 2018 pursuant to 
the Federal Civil Penalties Inflation Adjustment Act Improvements 
Act of 2015, published December 15, 2017); for 2019 it is 1.02522 
(M-19-04, Implementation of Penalty Inflation Adjustments for 2019 
pursuant to the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015, published December 14, 2018); and for 2020 
it is 1.01764 (M-20-05, Implementation of Penalty Inflation 
Adjustments for 2020 pursuant to the Federal Civil Penalties 
Inflation Adjustment Act Improvements Act of 2015, published 
December 16, 2019).

--The 2017 adjusted amount is $10,181 ($10,017 x 1.01636).
--The 2018 adjusted amount is $10,389 ($10,181 x 1.02041).
--The 2019 adjusted amount is $10,651 ($10,389 x 1.02522).
--The 2020 adjusted amount is $10,839 ($10,651 x 1.01764).

    ++ The 2021 adjusted amount is calculated by applying the 2021 
multiplier to $10,839 and this adjusted amount is reflected in the 
table of the regulation at 45 CFR 102.3.

III. Statutory and Executive Order Reviews and Waiver of Proposed 
Rulemaking

    The 2015 Act requires Federal agencies to publish annual penalty 
inflation adjustments notwithstanding section 553 of the Administrative 
Procedure Act (APA).
    Section 4(a) of the 2015 Act directs Federal agencies to publish 
annual adjustments no later than January 15th of each year thereafter. 
In accordance with section 553 of the APA, most rules are subject to 
notice and comment and are effective no earlier than 30 days after 
publication in the Federal Register. However, section 4(b)(2) of the 
2015 Act provides that each agency shall make the annual inflation 
adjustments ``notwithstanding section 553'' of the APA. According to 
OMB's Memorandum M-21-10, the phrase ``notwithstanding section 553'' in 
section 4(b)(2) of the 2015 Act means that ``the public procedure the 
APA generally requires (that is, notice, an opportunity for comment, 
and a delay in effective date) is not required for agencies to issue 
regulations implementing the annual adjustment.''
    Consistent with the language of the 2015 Act and OMB's 
implementation guidance, the inflation adjustments set out in this rule 
is not subject to notice and an opportunity for public comment and will 
be effective immediately upon publication. Additionally, HHS finds that 
notice and comment procedures would be impracticable and unnecessary 
under the APA for making the statutorily required inflation updates to 
newly established penalty amounts and for the ministerial and technical 
changes in this rule. In addition, HHS is waiving notice and comment 
for the non-substantive technical corrections set out in this final 
rule. HHS finds good cause for issuing these changes as a final rule 
without prior notice and comment because these changes only update the 
regulation to add the new CMP authorities that will be adjusted in 
accordance with the 2015 Act which were implemented since the last 
update and to add additional technical clarifying edits to descriptions 
and correcting inadvertent omissions

[[Page 62931]]

and typographical errors. For these same reasons HHS also finds good 
cause to make the final rule effective upon publication.
    Pursuant to OMB Memorandum M-21-10, HHS has determined that the 
annual inflation adjustment to the civil monetary penalties in its 
regulations does not trigger any requirements under procedural statutes 
and Executive Orders that govern rulemaking procedures.

IV. Effective and Applicability Dates

    This rule is effective on the date specified in the DATES section 
of this final rule. The adjusted civil monetary penalty amounts apply 
to penalties assessed on or after date specified in the DATES section 
of this final rule, if the violation occurred on or after November 2, 
2015. If the violation occurred before November 2, 2015, or a penalty 
was assessed before September 6, 2016, the pre-adjustment civil penalty 
amounts in effect before September 6, 2016, will apply.

List of Subjects in 45 CFR Part 102

    Administrative practice and procedure, Penalties.

    For reasons discussed in the preamble, the Department of Health and 
Human Services adopts the interim final rule published September 6, 
2016, at 81 FR 61537, as final with the following changes to 45 CFR 
part 102:

PART 102--ADJUSTMENT OF CIVIL MONETARY PENALTIES FOR INFLATION

0
1. The authority citation for part 102 continues to read as follows:

    Authority: Public Law 101-410, Sec. 701 of Public Law 114-74, 31 
U.S.C. 3801-3812.


0
2. Amend Sec.  102.3 by revising table 1 to read as follows:


Sec.  102.3  Penalty adjustment and table.

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    Dated: November 8, 2021.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2021-24672 Filed 11-12-21; 8:45 am]
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