Civil Money Penalties: Procedures for Investigations, Imposition of Penalties, and Hearings-Extension of Expiration Date, 54293-54294 [05-18254]

Agencies

• Office of the Secretary
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 70, Number 177 (Wednesday, September 14, 2005)]
[Rules and Regulations]
[Pages 54293-54294]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-18254]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of the Secretary

45 CFR Part 160

[CMS-0010-IFC]
RIN 0938-AM63


Civil Money Penalties: Procedures for Investigations, Imposition 
of Penalties, and Hearings--Extension of Expiration Date

AGENCY: Office of the Secretary, HHS.

ACTION: Final rule.

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SUMMARY: An interim final rule establishing procedures for the 
imposition, by the Secretary of Health and Human Services, of civil 
money penalties on entities that violate standards adopted by the 
Secretary under the Administrative Simplification provisions of the 
Health Insurance Portability and Accountability Act of 1996 (HIPAA) was 
published on April 17, 2003. The interim final rule expires on 
September 16, 2005. This regulatory action extends the expiration date 
to March 16, 2006 to avoid the disruption of ongoing enforcement 
actions while HHS completes with rulemaking to develop a more 
comprehensive enforcement rule.

DATES: Effective September 14, 2005, the expiration date of 45 CFR part 
160, subpart E is extended from September 16, 2005, to March 16, 2006.

FOR FURTHER INFORMATION CONTACT: Carol Conrad, (202) 690-1840.

SUPPLEMENTARY INFORMATION:

I. Background

    On April 17, 2003, the Secretary of Health and Human Services 
published an interim final rule with request for comments. 68 FR 18895. 
The interim final rule adopted rules of procedure for the imposition by 
the Department of Health and Human Services (HHS) of civil money 
penalties on entities that violate standards and requirements adopted 
by HHS under the Administrative Simplification provisions of the Health 
Insurance Portability and Accountability Act of 1996 (HIPAA), Pub. L. 
104-191. These rules are codified at 45 CFR part 160, subpart E 
(subpart E).
    As corrected at 68 FR 22453 (April 28, 2003), subpart E was 
scheduled to expire on September 16, 2004. On September 15, 2004, HHS 
published a final rule extending the expiration date for one year, to 
September 16, 2005. 69 FR 55515. The final rule extended the original 
expiration date to avoid disruption of ongoing enforcement actions 
while HHS undertook a rulemaking to propose complete procedural and 
substantive provisions for the enforcement of the HIPAA rules through 
the imposition of civil money penalties, which would supersede subpart 
E.
    On April 18, 2005, HHS published a notice of proposed rulemaking 
proposing this complete set of enforcement provisions. 70 FR 20224. The 
public comment period on the proposed rules closed on June 17, 2005. 
HHS is currently considering the public comments received, but will not 
be able to issue the final rule by September 16, 2005. Thus, in order 
to preserve the status quo with respect to enforcement during the 
pendency of the rulemaking, HHS is extending the expiration date of 
subpart E for an additional six months, to March 16, 2006.

II. Procedural Requirements

A. Determination To Issue Final Rule Extending Expiration Date Without 
Notice and Comment, To Be Effective in Less Than 30 Days

    As noted, HHS has proposed a rule to supersede subpart E. However, 
this rulemaking will not be completed by September 16, 2005, when the 
interim final rule that adopted subpart E is scheduled to expire. The 
resulting hiatus in the procedures for civil money penalty enforcement 
actions could create confusion for both the public and HHS with respect 
to enforcement during this period. Thus, HHS hereby extends the 
expiration date of subpart E to March 16, 2006. This action is being 
taken under HHS's authority at 42 U.S.C. 1302(a) and 1320d-6.
    Notwithstanding this extension, HHS fully expects to issue the 
final rule that will result from the pending rulemaking as soon as 
possible. However, the six-month extension should provide HHS with a 
period sufficient to avoid another extension, should unexpected 
circumstances delay the regulatory development process.
    The Administrative Procedure Act generally requires agencies to 
provide advance notice and an opportunity to comment on agency 
rulemakings. However, there are certain exceptions to this requirement. 
As the preamble to the April 17, 2003 interim final rule explained, 
subpart B sets out--

    The procedures for provision by the agency of the statutorily 
required notice and hearing and procedures for issuing 
administrative subpoenas. Such provisions are exempted from the 
requirement for notice-and-comment rulemaking under the ``rules of 
agency * * * procedure, or practice'' exemption at 5 U.S.C. 
553(b)(3)(A).

68 FR 18897. Since this regulatory action does no more than extend the 
effectiveness of a rule that itself was not required to be issued 
through notice-and-comment rulemaking, the extension of the rule 
likewise comes within the exemption of 5 U.S.C. 553(b)(3)(A). 
Accordingly, we do not request comment on the extension.
    We have also determined that good cause exists to waive the 
requirement of publication 30 days in advance of the rule's effective 
date under 5 U.S.C. 553(d)(3). Since subpart E is already in effect, no 
useful purpose would be served in delaying the effective date of this 
action, as those entities who are subject to subpart E are already on 
notice of its terms. Making this extension effective on less than 30 
days notice accordingly will not impose a burden upon anyone. In 
addition, to the extent that a delayed effective date occasioned a 
hiatus in the effectiveness of subpart E, it could cause the confusion 
that the extension seeks to avoid. Accordingly, we find good cause 
under 5 U.S.C. 553(d)(3) for not delaying the effective date of this 
action.

[[Page 54294]]

B. Review Under Procedural Statutes and Executive Orders

    We have reviewed this final rule under the following statutes and 
executive orders governing rulemaking procedures: The Unfunded Mandates 
Reform Act of 1995, 2 U.S.C. 1501 et seq.; the Regulatory Flexibility 
Act, 5 U.S.C. 601 et seq.; the Small Business Regulatory Enforcement 
Fairness Act of 1996, 5 U.S.C. 801 et seq.; the Paperwork Reduction 
Act, 44 U.S.C. 3501 et seq. Executive Order 12866 (Regulatory Planning 
and Review), as amended by Executive Order 13258; and Executive Order 
13132 (Federalism). Since this rule merely extends the expiration date 
of subpart E, the information in the compliance statements that we 
published on April 17, 2003 with the existing rule continues to apply.

List of Subjects in 45 CFR Part 160

    Administrative practice and procedure, Computer technology, 
Electronic transactions, Employer benefit plan, Health, Health care, 
Health facilities, Health insurance, Health records, Hospitals, 
Investigations, Medicaid, Medical research, Medicare, Penalties, 
Privacy, Reporting and record keeping requirements, Security.

    Dated: September 7, 2005.
Michael O. Leavitt,
Secretary.
[FR Doc. 05-18254 Filed 9-13-05; 8:45 am]
BILLING CODE 4120-01-P