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Federal Register / Vol. 86, No. 177 / Thursday, September 16, 2021 / Proposed Rules
requested documentation or request an extension. Any extension request would be required to be submitted in writing, detail the reasons for the extension request and show good cause. CMS
would consider the following circumstances a non-exhaustive list of examples of good cause: i Limited staffing resources to prepare a response, or ii when a responsible entity requests clarification from CMS
regarding its request for information. If CMS grants the extension, the responsible entity would be required to respond to the documentation request within the time frame specified in CMSs letter granting the extension request. The new proposed language in 45 CFR 150.313f also specifies that if the responsible entity fails to respond within the initial deadline provided or within the extended time frame if granted by CMS, then CMS may impose a civil money penalty based on the information provided in the complaint or other information alleging or indicating a violation of PHS Act requirements. New proposed 45 CFR
150.313f would also capture the opportunity for the responsible entity to provide additional information, including documentation of compliance as described in 45 CFR 150.311, that the responsible entity believes would aid CMS in conducting the examination.
HHS also proposes to add 45 CFR
150.313g to describe the fieldwork CMS undertakes during a market conduct examination. Under current CMS practices and as reflected in new proposed 45 CFR 150.313g, during the course of the examination, CMS may request additional information or documentation to support the review of the entitys data or other documents to assess the responsible entitys compliance with applicable PHS Act requirements. The request for additional information or documentation would specify the time frame allotted for the responsible entity to respond and forward the requested materials. Similar to the proposed initial documentation requests, HHS proposes to capture a similar framework that permits responsible entities to make a written request for an extension from CMS
detailing the reasons for the request and showing good cause. Examples of what CMS would consider good cause include, but are not limited to, when a responsible entity indicates it has limited staffing resources to prepare a response, or when a responsible entity requests clarification from CMS
regarding its request for information. If CMS grants the extension, the responsible entity would be required to
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respond to the documentation request within the time frame specified in CMSs letter granting the extension request. As detailed in the new proposed 45 CFR 150.313g, the failure to respond and provide such additional requested documentation within the initial time frame, or within the extended time frame if granted by CMS, may result in CMSs imposition of a civil money penalty based upon the complaint or other information when there is sufficient evidence indicating a violation of applicable PHS Act requirements. This new proposed rule also states that, during the examination, CMS may identify and notify the responsible entity of any potential PHS
Act violations and, in such circumstances, would provide the entity an opportunity to respond and submit evidence of its compliance or other documentation the responsible entity believes would aid CMS in conducting the examination.
HHS seeks comment on these proposed changes.
13. Determining the Amount of the PenaltyMitigating Circumstances 45
CFR 150.319
HHS proposes to make a conforming edit to 45 CFR 150.319 to add reference to the notice to initiate a market conduct examination under the new proposed 45
CFR 150.313e.
14. Determining the Amount of PenaltyAggravating Circumstances 45
CFR 150.321
HHS proposes to amend 45 CFR
150.321 to add a new paragraph d, which would specify that an entitys failure to cooperate with an investigation or market conduct examination would be considered an aggravating circumstance for purposes of determining the aggregate amount of a penalty. HHS is proposing this additional aggravating circumstance based on CMSs experience conducting examinations and investigations. More specifically, HHS has experienced situations where responsible entities fail to respond to requests for information in a timely fashion or otherwise generally fail to cooperate in a CMS enforcement action. For example, in one market conduct examination, an issuer failed to respond to CMSs requests for information for 6 months thereby causing significant delay to the examination. HHS is of the view that it is appropriate and necessary to add this additional aggravating circumstance to provide CMS a vehicle to increase the amount of a civil money penalty up to but not in excess of the statutory maximum in situations when the
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responsible entity fails to cooperate with a CMS investigation or market conduct examination and there is sufficient evidence indicating a violation of an applicable PHS Act requirement to discourage these behaviors.
HHS seeks comment on this proposed change.
15. Settlement Authority 45 CFR
150.325
HHS proposes to make a conforming edit to 45 CFR 150.325 to add reference to the notice to initiate a market conduct examination under the new proposed 45
CFR 150.313e.
16. Definitions 45 CFR 150.401
HHS proposes to make a conforming amendment to the definition of respondent to add a reference to a notice of proposed determination of a civil money penalty issued under the proposed new 45 CFR 150.515. This proposed amendment would provide for the same process for administrative hearings regarding civil money penalties assessed against providers and facilities as the process established for nonFederal governmental plans and issuers in states where CMS directly enforces PHS Act requirements.
17. Filing of Request for Hearing 45
CFR 150.405
HHS proposes to make a conforming edit to 45 CFR 150.405a to add reference to a notice of proposed determination of a civil money penalty issued under the new proposed 45 CFR
150.515. This would provide providers and facilities 30 days from the date of such notice to request a hearing with an administrative law judge to appeal the proposed determination. This would align with the existing time frame provided to non-Federal governmental plans and issuers for such appeals in states where CMS directly enforces PHS
Act requirements.
18. Issues To Be Heard and Decided by ALJ 45 CFR 150.417
HHS proposes to make a conforming amendment to add a reference to proposed 45 CFR 150.513 for factors an Administrative Law Judge ALJ can apply to determine the reasonableness of a civil money penalty. This proposed amendment would provide for the same process for administrative hearings regarding civil money penalties assessed against providers and facilities as the process established for non-Federal governmental plans, and issuers in states where CMS directly enforces PHS
Act requirements.

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