Patient Safety and Quality Improvement: Civil Money Penalty Inflation Adjustment, 42831-42833 [E9-20418]

Download as PDF Federal Register / Vol. 74, No. 163 / Tuesday, August 25, 2009 / Proposed Rules [FR Doc. E9–20395 Filed 8–24–09; 8:45 am] BILLING CODE 6560–50–C DEPARTMENT OF HEALTH AND HUMAN SERVICES Office of the Secretary 42 CFR Part 3 RIN 0991–AB53 Patient Safety and Quality Improvement: Civil Money Penalty Inflation Adjustment jlentini on DSKJ8SOYB1PROD with PROPOSALS AGENCY: Office for Civil Rights, Office of the Secretary, HHS. ACTION: Proposed rule. SUMMARY: The Department of Health and Human Services is publishing this companion proposed rule to the direct final rule, published elsewhere in this issue of the Federal Register, which amends the Patient Safety and Quality Improvement Rule by adjusting for inflation the maximum civil money penalty amount for violations of the confidentiality provisions of the Rule. We are proposing to amend the penalty amount to comply with the Federal Civil Penalties Inflation Adjustment Act of 1990. DATES: Submit written or electronic comments on this proposed rule by September 24, 2009. If significant adverse comment is received on this proposed rule or the direct final rule (discussed in the SUPPLEMENTARY INFORMATION section), OCR will publish a timely withdrawal of the direct final rule in the Federal Register. ADDRESSES: Send comments to one of the following addresses. Please do not submit duplicate comments. We will treat a comment directed to either the direct final rule or proposed rule as being directed towards both, therefore there is no need to submit comments on both documents. • Federal eRulemaking Portal: You may submit electronic comments at https://www.regulations.gov. Follow the instructions for submitting electronic comments. Attachments should be in Microsoft Word, WordPerfect, or Excel; however, we prefer Microsoft Word. • Regular, Express, or Overnight Mail: You may mail written comments (one original and two copies) to the following address only: U.S. Department of Health and Human Services, Office for Civil Rights, Attention: PSQIA CMP Adjustment (RIN 0991–AB53), Hubert H. Humphrey Building, Room 509F, 200 Independence Avenue, SW., Washington, DC 20201. Mailed VerDate Nov<24>2008 23:52 Aug 24, 2009 Jkt 217001 comments may be subject to delivery delays due to security procedures. Please allow sufficient time for mailed comments to be timely received in the event of delivery delays. • Hand Delivery or Courier: If you prefer, you may deliver (by hand or courier) your written comments (one original and two copies) to the following address only: Office for Civil Rights, Attention: PSQIA CMP Adjustment (RIN 0991–AB53), Hubert H. Humphrey Building, Room 509F, 200 Independence Avenue, SW., Washington, DC 20201. (Because access to the interior of the Hubert H. Humphrey Building is not readily available to persons without Federal government identification, commenters are encouraged to leave their comments in the mail drop slots located in the main lobby of the building.) Inspection of Public Comments: All comments received before the close of the comment period will be available for public inspection, including any personally identifiable or confidential business information that is included in a comment. We will post all comments received before the close of the comment period at https:// www.regulations.gov. 42831 rule. If we receive significant adverse comments on this proposed rule or the direct final rule, we will publish a document withdrawing the direct final rule in the Federal Register prior to that date. If we withdraw the direct final rule based on the receipt of any significant adverse comments, we will publish a final rule based on this proposed rule and any comments to the proposed or direct final rule. The Department will not provide additional opportunity for comment. II. 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 Act creates a voluntary program through which health care providers can share information related to patient safety events and concerns (known as patient safety work product (PSWP)) with patient safety organizations (PSOs) for the purpose of improving patient safety and the quality of care nationwide. The Patient Safety Act requires the Department of Health FOR FURTHER INFORMATION CONTACT: and Human Services (‘‘HHS’’ or ‘‘the Andra Wicks, 202–205–2292. Department’’) to maintain a listing of PSOs. The Patient Safety Act provides SUPPLEMENTARY INFORMATION: that PSWP is both privileged and I. Use of a Direct Final Rule confidential. While participation in the The Department has chosen to patient safety program is voluntary, a concurrently issue this proposed rule as violation of the Patient Safety Act’s a direct final rule because we do not confidentiality requirements is subject expect to receive any significant adverse to a civil money penalty (CMP) of up to comment on the rule. A direct final rule $10,000. 42 U.S.C. 299b–22(f). is a rule that provides an opportunity On November 21, 2008, the for comment and then automatically Department promulgated regulations to becomes effective on a later date if no implement the Patient Safety Act. 73 FR significant adverse comments are 70732, Nov. 21, 2008, adding 42 CFR received. We do not anticipate part 3. The regulations provide for the significant adverse comments because listing and delisting of PSOs, the this rule’s amendment is required by the confidentiality and privilege protections Federal Civil Penalties Inflation of PSWP, and procedures for Adjustment Act of 1990 (28 U.S.C. 2461 enforcement against violations of the note, as amended by the Debt Collection regulations’ confidentiality Improvement Act of 1996 (31 U.S.C. requirements. In particular, under 3701)) (Inflation Adjustment Act), and § 3.404, a person who discloses the Department has no discretion in identifiable PSWP in knowing or how it calculates the adjustment. reckless violation of the Patient Safety We are providing a 30-day comment Act and 42 CFR part 3 shall be subject period for both this proposed rule and to a CMP of not more than $10,000 for the direct final rule. If no significant each act constituting a violation. The Agency for Healthcare Research adverse comments are received, we will and Quality administers the provisions take no further action on this proposed of the regulations relating to PSOs. The rule and the direct final rule will Office for Civil Rights investigates and become effective 60 days later. If we do enforces compliance with the not receive any significant adverse comments in response to the direct final confidentiality provisions and, if warranted, may assess CMPs for rule or this proposed rule, the direct knowing or reckless violations of final rule will become effective on the date set forth in the DATES section of that confidentiality. PO 00000 Frm 00033 Fmt 4702 Sfmt 4702 E:\FR\FM\25AUP1.SGM 25AUP1 42832 Federal Register / Vol. 74, No. 163 / Tuesday, August 25, 2009 / Proposed Rules III. The Inflation Adjustment Act Congress enacted the 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 § 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.1 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. Because the Patient Safety Act was enacted after October 23, 1996, we interpret the Inflation Adjustment Act as requiring the Department to issue a regulation to adjust for inflation 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. Thus, we are proposing this rule four years from the Patient Safety Act’s enactment. jlentini on DSKJ8SOYB1PROD with PROPOSALS IV. Description of Amendment The Inflation Adjustment Act provides for the adjustment of a penalty amount through a three-step process. First, we calculate an increase in the penalty amount by a ‘‘cost-of-living adjustment.’’ Inflation Adjustment Act § 5(a), 28 U.S.C. 2461 note. The Inflation Adjustment Act defines the cost-ofliving 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 § 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 1 We note that § 4 of the Inflation Adjustment Act, found at 28 U.S.C. 2461 note, excludes a small number of statutes, such as the Social Security Act, from the requirement for agencies to adjust their CMPs for inflation. Because 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, the Department has not made similar inflation adjustments to the HIPAA administrative simplification CMPs at 45 CFR 160.404. VerDate Nov<24>2008 23:52 Aug 24, 2009 Jkt 217001 increase based on the size of the underlying penalty, as follows: 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. Third, pursuant to the Debt Collection Improvement Act of 1996 § 31001(s)(2)’s amendment to the Inflation Adjustment Act, we must limit the first adjustment of a CMP to ten percent of the penalty amount. With respect to step 1 of the adjustment, the Consumer Price Index (CPI) for June of 2008 (the calendar year preceding this adjustment) was 218.815.2 The CPI for June of 2005 (the calendar year in which the Patient Safety Act CMP was last set) was 194.5. The percent change in these CPIs is an increase of 12.5 percent. This leads to an unrounded increase in the Patient Safety Act’s CMP of $1,250. Under step 2, we round the amount of the increase ($1,250) based on the size of the penalty ($10,000). Because the penalty of $10,000 is ‘‘greater than $1,000 but less than or equal to $10,000,’’ we round the increase to the nearest multiple of $1,000. This leads to a rounded increase of $1,000, for an increased penalty of $11,000. Step 3 requires that the first adjustment to a civil penalty be limited to 10 percent of the penalty amount. This is the first adjustment to the Patient Safety Act’s CMP. Therefore, this 10 percent cap is applicable. Pursuant to this cap, the adjusted penalty cannot exceed $11,000. Because the adjusted penalty is $11,000, it does not exceed the cap. Accordingly, the Patient Safety Act’s revised maximum CMP amount, after adjusting for inflation pursuant to the Inflation Adjustment Act, is $11,000. Based on the above, we are proposing to amend 42 CFR 3.404(b) to provide 2 The Inflation Adjustment Act defines ‘‘Consumer Price Index’’ as ‘‘the Consumer Price Index for all-urban consumers published by the Department of Labor.’’ Historic data on the Consumer Price Index for all-urban consumers, including the data relied upon in this rulemaking, can be found at ftp://ftp.bls.gov/pub/ special.requests/cpi/cpiai.txt. PO 00000 Frm 00034 Fmt 4702 Sfmt 4702 that the Secretary may impose a CMP of not more than $11,000, rather than the current limit of $10,000, for a violation of the Patient Safety Act’s confidentiality requirements. V. Environmental Impact We have determined under 21 CFR 25.30(a) and (h) that the proposed action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required. VI. Paperwork Reduction Act 1995 We have concluded that the CMP adjustment in this proposed rule is not subject to review by the Office of Management and Budget under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3520) because it does not constitute a ‘‘collection of information.’’ That is, the adjustment does not require disclosure of any information to the Department, third parties, or the public. VII. Federalism The Department has analyzed this proposed rule in accordance with the principles set forth in Executive Order 13132. We have determined that the rule does not contain policies that have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, we have concluded that the rule does not contain policies that have Federalism implications as defined in the Executive Order and, consequently, a Federalism summary impact statement is not required. VIII. Analysis of Impacts The Department has examined the impacts of the proposed rule under Executive Order 12866, the Regulatory Flexibility Act (5 U.S.C. 601–612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4). Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The Department believes that this proposed rule is not a significant regulatory action under the Executive Order. The Regulatory Flexibility Act requires agencies to analyze regulatory options that would minimize any E:\FR\FM\25AUP1.SGM 25AUP1 Federal Register / Vol. 74, No. 163 / Tuesday, August 25, 2009 / Proposed Rules significant impact of a rule on small entities. Because this proposed rule simply adjusts the maximum amount of a CMP, and because the adjustment is required by the Inflation Adjustment Act, the Department certifies that the rule will not have a significant economic impact on a substantial number of small entities. Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing ‘‘any rule that includes any Federal mandate that may result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.’’ The current threshold after adjustment for inflation is $133 million, using the most current (2008) Implicit Price Deflator for the Gross Domestic Product.3 The Department does not expect this proposed rule to result in any 1-year expenditure that would meet or exceed this amount. List of Subjects in 42 CFR Part 3 Administrative practice and procedure, Civil money penalty, Confidentiality, Conflict of interests, Courts, Freedom of information, Health, Health care, Health facilities, Health insurance, Health professions, Health records, Hospitals, Investigations, Law enforcement, Medical research, Organization and functions, Patient, Patient safety, Privacy, Privilege, Public health, Reporting and recordkeeping requirements, Safety, State and local governments, Technical assistance. For the reasons stated in the preamble, HHS proposes to amend part 3 of title 42 of the Code of Federal Register as follows: PART 3—PATIENT SAFETY ORGANIZATIONS AND PATIENT SAFETY WORK PRODUCT 1. The authority citation for part 3 continues to read: Authority: 42 U.S.C. 216, 299b–21 through 299b–26; 42 U.S.C. 299c–6. jlentini on DSKJ8SOYB1PROD with PROPOSALS 2. Amend § 3.404 by revising paragraph (b) to read as follows: § 3.404 * * Amount of a civil money penalty. * * * 3 According to the U.S. Department of Commerce, Bureau of Economic Analysis, the implicit price deflator for gross domestic product was indexed at 92.106 in 1995 (the year of the Unfunded Mandates Reform Act) and 122.422 in 2008. See https:// www.bea.gov/national/nipaweb/ (Table 1.1.9). VerDate Nov<24>2008 23:52 Aug 24, 2009 Jkt 217001 (b) The Secretary may impose a civil money penalty in the amount of not more than $11,000. Dated: August 18, 2009. Kathleen Sebelius, Secretary. [FR Doc. E9–20418 Filed 8–24–09; 8:45 am] BILLING CODE 4160–90–P DEPARTMENT OF TRANSPORTATION Federal Motor Carrier Safety Administration 49 CFR Part 385 [Docket No. FMCSA–2001–11061] RIN 2126–AB17 New Entrant Safety Assurance Process: Implementation of Section 210(b) of the Motor Carrier Safety Improvement Act of 1999 AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT. ACTION: Advance notice of proposed rulemaking (ANPRM); request for comments. SUMMARY: The Federal Motor Carrier Safety Administration (FMCSA) requests comment on the methods the Agency should consider implementing to provide further assurance that a new applicant carrier is knowledgeable about the applicable safety requirements before being granted New Entrant authority. We are considering whether to implement a proficiency examination as part of our revised New Entrant Safety Assurance Process and seek information concerning issues that should be considered in the development and use of such an examination. In addition, the Agency requests comments on other alternatives to a proficiency examination to complement the assurances already in place that new entrant carriers are knowledgeable about applicable safety requirements. This notice responds to issues raised by Advocates for Highway and Auto Safety (Advocates) regarding new entrant applicant knowledgeability. DATES: Send your comments on or before October 26, 2009. ADDRESSES: You may submit comments identified by FDMS Docket ID Number FMCSA–2001–11061 by any of the following methods: • Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the online instructions for submitting comments. • Mail: Docket Management Facility: U.S. Department of Transportation, 1200 PO 00000 Frm 00035 Fmt 4702 Sfmt 4702 42833 New Jersey Avenue, SE., West Building Ground Floor, Room W12–140, Washington, DC 20590–0001. • Hand Delivery or Courier: West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue, SE., between 9 a.m. and 5 p.m. ET, Monday through Friday, except Federal holidays. • Fax: 202–493–2251. Instructions: For detailed instructions on submitting comments and additional information on the rulemaking process, see the Public Participation heading under the SUPPLEMENTARY INFORMATION caption of this document. Note that all comments received will be posted without change to https:// www.regulations.gov, including any personal information provided. Please see the Privacy Act heading below. Privacy Act: Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT’s complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477) or you may visit https:// DocketInfo.dot.gov. Docket: For access to the docket to read background documents or comments received, go to https:// www.regulations.gov or the street address listed above. Follow the online instructions for accessing the dockets. FOR FURTHER INFORMATION CONTACT: Mr. Richard Johnson, New Entrant Program Specialist, (202) 366–0476, richard.johnson@dot.gov. Business hours are from 8 a.m. to 4:30 p.m., e.t., Monday through Friday, except Federal holidays. SUPPLEMENTARY INFORMATION: Public Participation The Federal eRulemaking Portal (https://www.regulations.gov) is available 24 hours each day, 365 days each year. You can get electronic submission and retrieval help and guidelines under the ‘‘How to Use This Site’’ menu option. Comments received after the comment closing date will be included in the docket, and we will consider late comments to the extent practicable. Legal Basis for the Rulemaking Under 49 U.S.C. 31144, the Secretary of Transportation (Secretary) is required to determine whether a new motor vehicle owner or operator is fit to operate safely. Section 210(a) of the Motor Carrier Safety Improvement Act of 1999 [Pub. L. 106–159, 113 Stat. 1764, December 9, 1999] (MCSIA) added E:\FR\FM\25AUP1.SGM 25AUP1

Agencies

[Federal Register Volume 74, Number 163 (Tuesday, August 25, 2009)]
[Proposed Rules]
[Pages 42831-42833]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-20418]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of the Secretary

42 CFR Part 3

RIN 0991-AB53


Patient Safety and Quality Improvement: Civil Money Penalty 
Inflation Adjustment

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

ACTION: Proposed rule.

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SUMMARY: The Department of Health and Human Services is publishing this 
companion proposed rule to the direct final rule, published elsewhere 
in this issue of the Federal Register, which amends the Patient Safety 
and Quality Improvement Rule by adjusting for inflation the maximum 
civil money penalty amount for violations of the confidentiality 
provisions of the Rule. We are proposing to amend the penalty amount to 
comply with the Federal Civil Penalties Inflation Adjustment Act of 
1990.

DATES: Submit written or electronic comments on this proposed rule by 
September 24, 2009. If significant adverse comment is received on this 
proposed rule or the direct final rule (discussed in the SUPPLEMENTARY 
INFORMATION section), OCR will publish a timely withdrawal of the 
direct final rule in the Federal Register.

ADDRESSES: Send comments to one of the following addresses. Please do 
not submit duplicate comments. We will treat a comment directed to 
either the direct final rule or proposed rule as being directed towards 
both, therefore there is no need to submit comments on both documents.
     Federal eRulemaking Portal: You may submit electronic 
comments at https://www.regulations.gov. Follow the instructions for 
submitting electronic comments. Attachments should be in Microsoft 
Word, WordPerfect, or Excel; however, we prefer Microsoft Word.
     Regular, Express, or Overnight Mail: You may mail written 
comments (one original and two copies) to the following address only: 
U.S. Department of Health and Human Services, Office for Civil Rights, 
Attention: PSQIA CMP Adjustment (RIN 0991-AB53), Hubert H. Humphrey 
Building, Room 509F, 200 Independence Avenue, SW., Washington, DC 
20201. Mailed comments may be subject to delivery delays due to 
security procedures. Please allow sufficient time for mailed comments 
to be timely received in the event of delivery delays.
     Hand Delivery or Courier: If you prefer, you may deliver 
(by hand or courier) your written comments (one original and two 
copies) to the following address only: Office for Civil Rights, 
Attention: PSQIA CMP Adjustment (RIN 0991-AB53), Hubert H. Humphrey 
Building, Room 509F, 200 Independence Avenue, SW., Washington, DC 
20201. (Because access to the interior of the Hubert H. Humphrey 
Building is not readily available to persons without Federal government 
identification, commenters are encouraged to leave their comments in 
the mail drop slots located in the main lobby of the building.)
    Inspection of Public Comments: All comments received before the 
close of the comment period will be available for public inspection, 
including any personally identifiable or confidential business 
information that is included in a comment. We will post all comments 
received before the close of the comment period at https://www.regulations.gov.

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

SUPPLEMENTARY INFORMATION:

I. Use of a Direct Final Rule

    The Department has chosen to concurrently issue this proposed rule 
as a direct final rule because we do not expect to receive any 
significant adverse comment on the rule. A direct final rule is a rule 
that provides an opportunity for comment and then automatically becomes 
effective on a later date if no significant adverse comments are 
received. We do not anticipate significant adverse comments because 
this rule's amendment is required by 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), and the Department has no discretion in how 
it calculates the adjustment.
    We are providing a 30-day comment period for both this proposed 
rule and the direct final rule. If no significant adverse comments are 
received, we will take no further action on this proposed rule and the 
direct final rule will become effective 60 days later. If we do not 
receive any significant adverse comments in response to the direct 
final rule or this proposed rule, the direct final rule will become 
effective on the date set forth in the DATES section of that rule. If 
we receive significant adverse comments on this proposed rule or the 
direct final rule, we will publish a document withdrawing the direct 
final rule in the Federal Register prior to that date.
    If we withdraw the direct final rule based on the receipt of any 
significant adverse comments, we will publish a final rule based on 
this proposed rule and any comments to the proposed or direct final 
rule.
    The Department will not provide additional opportunity for comment.

II. 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 Act creates a voluntary program through which health care 
providers can share information related to patient safety events and 
concerns (known as patient safety work product (PSWP)) with patient 
safety organizations (PSOs) for the purpose of improving patient safety 
and the quality of care nationwide. The Patient Safety Act requires the 
Department of Health and Human Services (``HHS'' or ``the Department'') 
to maintain a listing of PSOs. The Patient Safety Act provides that 
PSWP is both privileged and confidential. While participation in the 
patient safety program is voluntary, a violation of the Patient Safety 
Act's confidentiality requirements is subject to a civil money penalty 
(CMP) of up to $10,000. 42 U.S.C. 299b-22(f).
    On November 21, 2008, the Department promulgated regulations to 
implement the Patient Safety Act. 73 FR 70732, Nov. 21, 2008, adding 42 
CFR part 3. The regulations provide for the listing and delisting of 
PSOs, the confidentiality and privilege protections of PSWP, and 
procedures for enforcement against violations of the regulations' 
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 CMP 
of not more than $10,000 for each act constituting a violation.
    The Agency for Healthcare Research and Quality administers the 
provisions of the regulations relating to PSOs. The Office for Civil 
Rights investigates and enforces compliance with the confidentiality 
provisions and, if warranted, may assess CMPs for knowing or reckless 
violations of confidentiality.

[[Page 42832]]

III. The Inflation Adjustment Act

    Congress enacted the 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 Sec.  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.\1\
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    \1\ We note that Sec.  4 of the Inflation Adjustment Act, found 
at 28 U.S.C. 2461 note, excludes a small number of statutes, such as 
the Social Security Act, from the requirement for agencies to adjust 
their CMPs for inflation. Because 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, the Department has not made similar 
inflation adjustments to the HIPAA administrative simplification 
CMPs at 45 CFR 160.404.
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    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. 
Because the Patient Safety Act was enacted after October 23, 1996, we 
interpret the Inflation Adjustment Act as requiring the Department to 
issue a regulation to adjust for inflation 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. Thus, we are 
proposing this rule four years from the Patient Safety Act's enactment.

IV. Description of Amendment

    The Inflation Adjustment Act provides for the adjustment of a 
penalty amount through a three-step process. First, we calculate an 
increase in the penalty amount by a ``cost-of-living adjustment.'' 
Inflation Adjustment Act Sec.  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 Sec.  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:

    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.

Third, pursuant to the Debt Collection Improvement Act of 1996 Sec.  
31001(s)(2)'s amendment to the Inflation Adjustment Act, we must limit 
the first adjustment of a CMP to ten percent of the penalty amount.
    With respect to step 1 of the adjustment, the Consumer Price Index 
(CPI) for June of 2008 (the calendar year preceding this adjustment) 
was 218.815.\2\ The CPI for June of 2005 (the calendar year in which 
the Patient Safety Act CMP was last set) was 194.5. The percent change 
in these CPIs is an increase of 12.5 percent. This leads to an 
unrounded increase in the Patient Safety Act's CMP of $1,250.
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    \2\ The Inflation Adjustment Act defines ``Consumer Price 
Index'' as ``the Consumer Price Index for all-urban consumers 
published by the Department of Labor.'' Historic data on the 
Consumer Price Index for all-urban consumers, including the data 
relied upon in this rulemaking, can be found at ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt.
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    Under step 2, we round the amount of the increase ($1,250) based on 
the size of the penalty ($10,000). Because the penalty of $10,000 is 
``greater than $1,000 but less than or equal to $10,000,'' we round the 
increase to the nearest multiple of $1,000. This leads to a rounded 
increase of $1,000, for an increased penalty of $11,000.
    Step 3 requires that the first adjustment to a civil penalty be 
limited to 10 percent of the penalty amount. This is the first 
adjustment to the Patient Safety Act's CMP. Therefore, this 10 percent 
cap is applicable. Pursuant to this cap, the adjusted penalty cannot 
exceed $11,000. Because the adjusted penalty is $11,000, it does not 
exceed the cap. Accordingly, the Patient Safety Act's revised maximum 
CMP amount, after adjusting for inflation pursuant to the Inflation 
Adjustment Act, is $11,000.
    Based on the above, we are proposing to amend 42 CFR 3.404(b) to 
provide that the Secretary may impose a CMP of not more than $11,000, 
rather than the current limit of $10,000, for a violation of the 
Patient Safety Act's confidentiality requirements.

V. Environmental Impact

    We have determined under 21 CFR 25.30(a) and (h) that the proposed 
action is of a type that does not individually or cumulatively have a 
significant effect on the human environment. Therefore, neither an 
environmental assessment nor an environmental impact statement is 
required.

VI. Paperwork Reduction Act 1995

    We have concluded that the CMP adjustment in this proposed rule is 
not subject to review by the Office of Management and Budget under the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) because it does 
not constitute a ``collection of information.'' That is, the adjustment 
does not require disclosure of any information to the Department, third 
parties, or the public.

VII. Federalism

    The Department has analyzed this proposed rule in accordance with 
the principles set forth in Executive Order 13132. We have determined 
that the rule does not contain policies that have substantial direct 
effects on the States, on the relationship between the National 
Government and the States, or on the distribution of power and 
responsibilities among the various levels of government. Accordingly, 
we have concluded that the rule does not contain policies that have 
Federalism implications as defined in the Executive Order and, 
consequently, a Federalism summary impact statement is not required.

VIII. Analysis of Impacts

    The Department has examined the impacts of the proposed rule under 
Executive Order 12866, the Regulatory Flexibility Act (5 U.S.C. 601-
612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). 
Executive Order 12866 directs agencies to assess all costs and benefits 
of available regulatory alternatives and, when regulation is necessary, 
to select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity). The Department believes 
that this proposed rule is not a significant regulatory action under 
the Executive Order.
    The Regulatory Flexibility Act requires agencies to analyze 
regulatory options that would minimize any

[[Page 42833]]

significant impact of a rule on small entities. Because this proposed 
rule simply adjusts the maximum amount of a CMP, and because the 
adjustment is required by the Inflation Adjustment Act, the Department 
certifies that the rule will not have a significant economic impact on 
a substantial number of small entities.
    Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires 
that agencies prepare a written statement, which includes an assessment 
of anticipated costs and benefits, before proposing ``any rule that 
includes any Federal mandate that may result in the expenditure by 
State, local, and Tribal governments, in the aggregate, or by the 
private sector, of $100,000,000 or more (adjusted annually for 
inflation) in any one year.'' The current threshold after adjustment 
for inflation is $133 million, using the most current (2008) Implicit 
Price Deflator for the Gross Domestic Product.\3\ The Department does 
not expect this proposed rule to result in any 1-year expenditure that 
would meet or exceed this amount.
---------------------------------------------------------------------------

    \3\ According to the U.S. Department of Commerce, Bureau of 
Economic Analysis, the implicit price deflator for gross domestic 
product was indexed at 92.106 in 1995 (the year of the Unfunded 
Mandates Reform Act) and 122.422 in 2008. See https://www.bea.gov/national/nipaweb/ (Table 1.1.9).
---------------------------------------------------------------------------

List of Subjects in 42 CFR Part 3

    Administrative practice and procedure, Civil money penalty, 
Confidentiality, Conflict of interests, Courts, Freedom of information, 
Health, Health care, Health facilities, Health insurance, Health 
professions, Health records, Hospitals, Investigations, Law 
enforcement, Medical research, Organization and functions, Patient, 
Patient safety, Privacy, Privilege, Public health, Reporting and 
recordkeeping requirements, Safety, State and local governments, 
Technical assistance.

    For the reasons stated in the preamble, HHS proposes to amend part 
3 of title 42 of the Code of Federal Register as follows:

PART 3--PATIENT SAFETY ORGANIZATIONS AND PATIENT SAFETY WORK 
PRODUCT

    1. The authority citation for part 3 continues to read:

    Authority: 42 U.S.C. 216, 299b-21 through 299b-26; 42 U.S.C. 
299c-6.

    2. Amend Sec.  3.404 by revising paragraph (b) to read as follows:


Sec.  3.404  Amount of a civil money penalty.

* * * * *
    (b) The Secretary may impose a civil money penalty in the amount of 
not more than $11,000.

    Dated: August 18, 2009.
Kathleen Sebelius,
Secretary.
[FR Doc. E9-20418 Filed 8-24-09; 8:45 am]
BILLING CODE 4160-90-P
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