Testimony by Employees and the Production of Documents in Proceedings Where the United States Is Not a Party, 53148-53151 [E8-21113]

Agencies

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

[Federal Register Volume 73, Number 179 (Monday, September 15, 2008)]
[Rules and Regulations]
[Pages 53148-53151]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-21113]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of the Secretary

45 CFR Part 2


Testimony by Employees and the Production of Documents in 
Proceedings Where the United States Is Not a Party

AGENCY: Department of Health and Human Services.

ACTION: Final rule.

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SUMMARY: This rule amends Part 2 of Title 45 of the Code of Federal 
Regulations, which provides that employees and former employees of the 
Department of Health and Human Services (HHS or Department) may not 
provide testimony as part of their official duties in litigation where 
the United States or a federal agency is not a party, without the 
approval of the head of the agency. The purpose of these amendments is 
to modify the definition of ``employee'' contained in 45 CFR part 2. 
Under these amendments, the definition of employee will be revised to 
reflect changes in Medicare contracting, including changes brought 
about by the Medicare Prescription Drug, Improvement, and Modernization 
Act of 2003 (MMA) (Pub. L. 108-173). In addition, the definition of 
employee will be modified to include employees of a state agency 
performing survey, certification, or enforcement functions under Title 
XVIII of the Social Security Act or Section 353 of the Public Health 
Service Act. Further, the definition of employee with respect to 
employees of entities covered by the

[[Page 53149]]

Federally Supported Health Centers Assistance Act, as amended, 42 
U.S.C. 233(g)-(n) (FSHCAA), will be limited to testimony requested in 
medical malpractice tort litigation which relates to medical functions 
performed at a time when the center was covered under FSHCAA.

DATES: Effective Date: October 15, 2008.

FOR FURTHER INFORMATION CONTACT: Jeffrey S. Davis, Associate General 
Counsel, General Law Division, Office of the General Counsel, 
Department of Health and Human Services, 330 Independence Ave., SW., 
Room 4760 Cohen Bldg., Washington, DC 20201, Telephone Number 202-619-
0150.

SUPPLEMENTARY INFORMATION: In 1987, the Department of Health and Human 
Services published regulations addressing the issue of the increasing 
number of requests for the testimony of Department employees in 
litigation involving only private parties and not the United States. 
The regulations generally prohibit an employee or former employee of 
the Department from giving testimony concerning information acquired in 
the course of performing official duties or because of such person's 
official capacity, except where the relevant agency head determines 
that the appearance would promote the objectives of the Department.
    These amendments are designed to address changes in Medicare 
contracting, including changes brought about by the MMA. The amendments 
also address involvement of the Department in matters in which parties 
request testimony or documents from employees of state survey agencies 
or contractors that carry out survey, certification, or enforcement 
activities for the Medicare and CLIA programs. Finally, these 
amendments address the involvement of the Department in cases other 
than medical malpractice matters where parties request testimony from 
any current or former employee or contractor of an entity covered by 
the FSHCAA.
    Section 911 of the MMA added section 1874A to the Social Security 
Act (SSA) and took the separate authorities under which the Centers for 
Medicare & Medicaid Services (CMS) contracted with intermediaries and 
carriers and consolidated them into a single authority for a new type 
of contractor, the Medicare Administrative Contractor (MAC). See MMA 
section 911. Under section 911, the Secretary may enter into contracts 
with any eligible entity to serve as a MAC with respect to the 
performance of the core Medicare administrative functions listed at SSA 
section 1874A(a)(4). Thus, in the contracting environment created by 
the MMA, MACs perform functions once performed solely by intermediaries 
and carriers. Currently, CMS has agreements with intermediaries, 
carriers and MACs to make Medicare payments for health care items and 
services. Furthermore, under section 911(e) of the MMA, any reference 
to a carrier or intermediary under title XI or XVIII of the Social 
Security Act (or any regulation, manual instruction, interpretative 
rule, statement of policy, or guideline issued to carry out these 
titles) shall be deemed a reference to a MAC.
    Furthermore, historically, carriers and intermediaries also carried 
out all Medicare program integrity activities, such as cost report 
audits and medical, utilization, and fraud reviews. However, CMS has 
begun contracting with Program Safeguard Contractors (PSCs) and 
Recovery Audit Contractors (RACs) to perform program integrity 
activities, see SSA section 1893, although intermediaries and carriers 
continue to carry out many program integrity functions. There is 
substantial functional overlap between the functions that are performed 
by PSCs and RACs and the program integrity activities that are now, or 
were once, carried out by carriers and intermediaries.
    Accordingly, we are amending the definition of ``employee'' in 
these regulations to include the employees of contractors that perform 
the core Medicare administrative functions listed at SSA sections 
1874A(a)(4) and 1893. Under such definition, these regulations cover 
intermediaries, carriers, MACs, PSCs and RACs, and any successor 
entities that perform the functions listed in the amended definition. 
Not only does this definition reflect the more flexible contracting 
procedures created by the MMA, but a functional definition of 
``employee'' also limits the need to amend these regulations again in 
the event Congress further modifies the Medicare contracting 
nomenclature through future legislation.
    The second amendment concerns requests for testimony and documents 
of employees of contractors, subcontractors, and state survey agencies 
that carry out many of the Department's survey, certification, and 
enforcement activities. Section 1864 of the Social Security Act 
provides that the Secretary shall enter into agreements with states 
under which appropriate state or local survey agencies determine 
whether providers meet Medicare conditions of participation, suppliers 
meet Medicare conditions of coverage, and rural health clinics meet 
Medicare conditions of certification. Furthermore, under section 353(o) 
of the Public Health Service Act, the Secretary is permitted to use the 
services of state agencies to carry out his responsibilities under the 
Clinical Laboratory Improvement Act Amendments of 1988 (CLIA). Thus, 
employees of state survey agencies carry out federal functions for both 
the Medicare and CLIA programs. In addition, contractors of the 
Department under certain circumstances survey and certify providers and 
suppliers. Contractors of the Department also perform validation 
surveys to ensure that state survey agencies and deeming authorities 
satisfactorily perform their survey, certification, and enforcement 
responsibilities.
    Parties in private litigation frequently request testimony and 
documents from employees of contractors, subcontractors, and state 
survey agencies that perform survey, certification, and enforcement 
functions under the Medicare and CLIA programs. These requests are 
especially prevalent in medical malpractice litigation. Although any 
specific request for testimony or documents may not be unduly 
burdensome, the requests divert employees from their federal survey, 
certification, and enforcement responsibilities. The cumulative effect 
of these requests can impede these activities. Moreover, we believe 
that information gathered during these federal activities is federal 
information and may be protected by governmental privileges. Therefore, 
we are amending the definition of ``employee'' in these regulations to 
include employees of contractors, subcontractors, and state survey 
agencies that perform survey, certification, or enforcement activities 
under the Medicare and CLIA programs.
    We recognize that employees of state survey agencies may have dual 
roles. These employees perform activities for the Medicare and CLIA 
programs, but also have survey, certification, and enforcement 
responsibilities with respect to state requirements. For example, it is 
our understanding that state survey agencies commonly survey skilled 
nursing facilities for compliance with both federal and state 
requirements during a single visit. Under 45 CFR 2.1(a), the 
Department's regulations apply only to information acquired in the 
course of performing official duties or because of the employee's 
official capacity with the Department. Therefore, these regulations 
will apply to requests for testimony or documents from an employee of a 
contractor, subcontractor, or state agency only to the extent the 
information was acquired in the course of performing survey,

[[Page 53150]]

certification, or enforcement functions under Title XVIII of the Social 
Security Act or section 353 of the Public Health Service Act and 
regardless of whether documents are also relevant to the state's 
activities.
    The third amendment addresses the increasing frequency of requests 
to the Department in cases other than medical malpractice matters for 
employees and qualified contractors of entities covered under the 
FSHCAA to provide testimony. The FSHCAA provides that, for the purposes 
of the Federal Tort Claims Act (FTCA), employees and certain qualified 
health care practitioner contractors acting within the scope of their 
employment with an entity covered under the FSHCAA are deemed to be 
employees of the Public Health Service. 42 U.S.C. 233(g)(1)(A). As 
such, these employees or qualified contractors are deemed to be 
employees solely for the purpose of securing coverage under the FTCA in 
medical malpractice cases brought against them. The current definition 
of ``employee'' in the Department's regulations includes employees and 
contractors of a covered entity when the requested testimony relates to 
their performance of medical, surgical, dental or related functions 
which were performed at a time when HHS deemed the entity to be covered 
by the FSHCAA, even in matters that do not relate to medical 
malpractice litigation.
    The interests of the United States are implicated in state court 
actions that may impact upon liability under the FTCA. By amending the 
definition to require application of these regulations in medical 
malpractice cases only, the number of requests to the Department for 
testimony of federally supported health center employees and qualified 
contractors will be significantly reduced. Thus, the burden on the 
Department to respond to these time-consuming requests will be 
lessened.
    Further, the current definition of ``employee'' under subpart (3) 
of section 2.2 refers to ``the requested testimony or information.'' 
Because FSHCAA entities and records are normally subject to state law 
and are beyond the control of the Department, we have only applied the 
Department's regulations in matters involving the FSHCAA to requests 
for testimony in FTCA matters, not to record requests. Therefore, we 
have limited this subpart to requests for testimony.
    Public Participation: This rule is published as a final rule. It is 
exempt from public comment, pursuant to 5 U.S.C. 553(b)(A), as a rule 
of ``agency organization, procedure, or practice.''
    Paperwork Reduction Act: This regulation is not subject to the 
Paperwork Reduction Act because it deals solely with the Department's 
internal rules of organization, procedure or practice.
    Cost/Regulatory Analysis: We have examined the impact of this rule 
as required by Executive Order (EO) 12866 (Regulatory Planning and 
Review), as amended, the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 
et seq.); the Unfunded Mandated Reform Act of 1995 (UMRA) (2 U.S.C. 
1501 et seq.); and EO 13132 (Federalism). EO 12866, as amended, directs 
agencies to assess all costs and benefits of available regulatory 
alternatives and, if regulation is necessary, to select regulatory 
approaches that maximize the benefits (including potential economic, 
environmental, public health and safety effects, distributive impacts, 
and equity). A regulatory impact analysis must be prepared for major 
rules with economically significant effects ($100 million or more in 1 
year). We have determined that the rule is consistent with the 
principals set forth in the EO, and we find that the rule would not 
have an effect on the economy that exceeds $100 million in any one 
year. Under the RFA, if a rule has a significant impact on a 
substantial number of small entities, an agency must analyze regulatory 
options that would minimize any significant impact of the rule on small 
entities and determine it will not have any effect. The agency has 
considered the effect that this rule would have on small entities. I 
hereby certify, under 5 U.S.C. 605(b), that the rule will not have a 
significant economic impact on a substantial number of small entities, 
including small businesses, small organizations and small local 
governments. Therefore, a regulatory flexibility analysis is not 
required. The UMRA also requires that agencies assess anticipated costs 
and benefits before issuing any rule that may result in expenditure in 
any one year by State, local, or tribunal governments, in the 
aggregate, or by the private sector of $100 million. As noted above, we 
find that the rule would not have an effect of this magnitude on the 
economy. Therefore, no further analysis is required under the UMRA. EO 
13132 establishes certain requirements that an agency must meet when it 
promulgates a final rule that imposes substantial direct requirement 
costs on State and local governments, preempts State law, or otherwise 
has federalism implications. We have reviewed the rule under the 
threshold criteria of EO 13132 and have determined that this rule would 
not have substantial direct impact on States, or on the distribution of 
power and responsibilities among the various levels of government. As 
there are no federalism implications, a federalism impact statement is 
not required.

List of Subjects in 45 CFR Part 2

    Administrative practice and procedure, Freedom of Information, 
Government employees.

0
Accordingly, for the reasons set forth in the preamble, 45 CFR part 2 
is amended as follows:

PART 2--[AMENDED]

0
1. The authority citation for part 2 continues to read as follows:

    Authority: 5 U.S.C. 301, 5 U.S.C. 552.


0
2. The definition of ``Employee'' in 45 CFR 2.2 is amended by revising 
the introductory text and paragraphs (2) and (3), adding paragraph (4), 
and placing the definition in alphabetical order to read as follows:


Sec.  2.2  Definitions.

* * * * *
    Employee of the Department includes current and former:
* * * * *
    (2) Employees of intermediaries, carriers, Medicare Administrative 
Contractors, Program Safeguard Contractors, and Recovery Audit 
Contractors, and any successor entities, that perform one or more of 
the following functions described in section 1874A or 1893 of the 
Social Security Act relating to the administration of the Medicare 
program:
    (i) Determination of payment amounts; making payments; beneficiary 
education and assistance; providing consultative services; 
communication with providers; or, provider education and technical 
assistance; or,
    (ii) Other such functions as are necessary to carry out the 
Medicare program, including any of the following program integrity 
functions under section 1893 of the Social Security Act:
    (A) Review of activities of providers or suppliers, including 
medical and utilization review and fraud review;
    (B) Auditing of cost reports;
    (C) Determinations as to whether payment should not be, or should 
not have been, made because Medicare is the secondary payer, and 
recovery of payments that should not have been made;
    (D) Education of providers, beneficiaries, and other persons with 
respect to payment integrity and benefit quality assurance issues; or,

[[Page 53151]]

    (E) Developing (and periodically updating) a list of items of 
durable medical equipment which are subject to prior authorization.
    (3) Employees of a contractor, subcontractor, or state agency 
performing survey, certification, or enforcement functions under title 
XVIII of the Social Security Act or Section 353 of the Public Health 
Service Act but only to the extent the requested information was 
acquired in the course of performing those functions and regardless of 
whether documents are also relevant to the state's activities.
    (4) Employees and qualified contractors of an entity covered under 
the Federally Supported Health Centers Assistance Act of 1992, as 
amended, 42 U.S.C. 233(g)-(n), (FSHCAA), provided that the testimony is 
requested in medical malpractice tort litigation and relates to the 
performance of medical, surgical, dental or related functions which 
were performed by the entity, its employees and qualified contractors 
at a time when the DHHS deemed the entity and its employees and 
qualified contractors to be covered by the FSHCAA.
* * * * *

    Dated: August 28, 2008.
Michael O. Leavitt,
Secretary.
[FR Doc. E8-21113 Filed 9-12-08; 8:45 am]
BILLING CODE 4150-26-P