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The final regulation modifies 42 CFR 1003 and 1005 by addressing three issues.  First, the 21st Century Cures Act (Cures Act) provision that authorizes the Department of Health and Human Services (HHS) to impose civil monetary penalties, assessments, and exclusions upon individuals and entities that engage in fraud and other misconduct related to HHS grants, contracts, and other agreements.  Second, the Cures Act information blocking provisions that authorize the Office of Inspector General to investigate claims of information blocking and provide HHS the authority to impose CMPs for information blocking.  Third, the Bipartisan Budget Act of 2018 increases in penalty amounts in the Civil Monetary Penalties Law.

Statement of Need:

The 21st Century Cures Act (Cures Act) set forth new authorities which need to be added to HHS’s existing civil monetary penalty authorities. This final rule seeks to add the new authorities to the existing civil monetary penalty regulations and to set forth the procedural and appeal rights for individuals and entities. The Bipartisan Budget Act of 2018 (BBA) amended the Civil Monetary Penalties Law (CMPL) to increase the amounts of certain civil monetary penalties which requires amending the existing regulations for conformity. The final rule seeks to ensure alignment between the increased civil monetary penalties in the statute and the civil monetary penalties set forth in the OIG’s rules.

Summary of the Legal Basis:

The legal authority for this regulatory action is found in: (1) section 1128A(a)-(b) of the Social Security Act, the Civil Monetary Penalties Law (42 U.S.C. 1320a-7a), which provides for civil monetary penalty amounts; (2) section 1128A(o)-(s) of the Social Security Act, which provides for civil monetary penalties for fraud and other misconduct related to grants, contracts, and other agreements; and (3) section 3022(b) of the Public Health Service Act (42 U.S.C. 300jj-52), which provides for investigation and enforcement of information blocking.

Alternatives:

The regulations incorporate the statutory changes to HHS' authority found in the Cures Act and the BBA. The alternative would be to rely solely on the statutory authority and not align the regulations accordingly. However, we concluded that the public benefit of providing clarity by placing the new civil monetary penalties and updated civil monetary penalty amounts within the existing regulatory framework outweighed any burdens of additional regulations promulgated.

Anticipated Costs and Benefits:

We believe that there are no significant costs associated with these proposed revisions that would impose any mandates on State, local, or Tribal governments or the private sector. The regulation will provide a disincentive for bottlenecks to the flow of health data that exist, in part, because parties are reticent to share data across the healthcare system or prefer not to do so. The final rule will help foster interoperability, thus improving care coordination, access to quality healthcare, and patients’ access to their healthcare data.

Risks:

We believe the risks of this regulatory action are minimal because we are relying upon statutory authorities and placing the regulation within our existing regulatory framework.