Administrative Sanctions of Health Care Providers

Various studies by the GAO, the Office of the Inspector General (OIG) of the Department of Health and Human Services, and health insurance industry groups have placed the overall rate of provider fraud in the American health care system within a range of 6 to 12 percent of the total dollar value of claims. The OIG of the Office of Personnel Management has recognized for many years that fraud by health care providers poses a significant problem for both the financial integrity of the Federal Employees Health Benefits Program (FEHBP) and the health care interests of the persons who obtain coverage through it.

One of the difficulties in pursuing providerrelated fraud within FEHBP has been the inadequacy of the legal remedies available to address the problem, prior to the passage of Pub. L. 105266. Although the false claims, false statements, and mail fraud statutes are nominally applicable to many instances of health care fraud, in practice they are seldom invoked because of the high burden of proof in criminal cases and the fact that the dollar amounts in question typically do not reach prosecutorial thresholds. In fact, most instances of provider fraud
[[Page 64161]]
are not amenable to being handled appropriately within the federal judicial system. However, the Pub. L. 105266 administrative sanctions authorities, as implemented by the proposed regulation, are specifically designed to address fraudulent or improper conduct by health care providers quickly, efficiently, and costeffectively. Transition to Statutory Debarment System

Adoption of this proposed regulation will have the following effect on existing OPM regulations:

The proposed regulation fully reflects the policy concepts underlying OPM's operation of the FEHBP. The principal objectives of administrative sanctions activities will be to protect the health and safety of covered persons and the integrity of the FEHBP by excluding providers whose conduct indicates that they may pose a threat to either of those interests. Other than terminating the rights of certain providers to receive payment of FEHBP funds, the regulations will not affect the manner or conditions through which health care services are delivered to FEHBPcovered persons, or any other aspect of the providerpatient relationship. There will be no effect on the ability of FEHBP subscribers to select health insurance coverage appropriate to their circumstances. Finally, sanctions imposed under these regulations will apply only to health care providers, and will not affect the contractual relationship between OPM and the FEHBP carriers. As a related matter, OPM is committed to coordinating with other agencies to combat health care fraud and abuse. The proposed rule attempts wherever possible to maintain consistency and cooperation between FEHBP sanctions and the Medicare administrative sanctions program operated by the OIG, Department of Health and Human Services.

Mandatory and Permissive Debarment

Pub. L. 105266 established two broad categories of debarments, distinguished by their underlying bases and the debarring official's range of discretion in imposing the sanction. Mandatory debarment authorities require OPM to debar providers who, in prior due process proceedings, were found to have committed certain types of violations. This concept has been part of the Medicare administrative sanctions statute for many years. As detailed in Sec. 890.1004 of the proposed rule, grounds for mandatory debarment include conviction of crimes involving (1) fraud or other financial misconduct, (2) abuse of patients, (3) abuse of controlled substances, or (4) obstruction of an investigation of those crimes. Mandatory debarment also applies to providers who have been debarred, suspended, or excluded by another Federal agency.

Permissive debarment authorities cover violations for which the debarring official may exercise discretion to impose or not impose debarment, according to the facts of each case. Pub. L. 105266 established 12 separate grounds for permissive debarment. Section 1011 of the proposed rule arranges these grounds into four broad categories. The categories are (1) actions involving revocation, suspension, nonrenewal, or surrender of health care licensure; (2) ownership or control of an entity by a debarred provider, or ownership/control by a provider of a debarred entity; (3) false, deceptive, or wrongful claims practices; and (4) refusal to provide information requested by OPM or a FEHBP carrier to determine the validity or amount of a claim. Length of Debarments

Pub. L. 105266 and the proposed rule establish a minimum 3year period of debarment for mandatory debarments based on convictions. The proposed rule also adopts the Medicare practice of using specific aggravating and mitigating factors to determine whether a period of debarment longer than the minimum period should be imposed (see Sec. 890.1008). Mandatory debarments based on another agency's sanction will always be for an indefinite period running concurrently with the sanction on which they are based. Therefore, they are not subject to a specified minimum period or to extension because of aggravating factors.

Unlike mandatory debarments, Pub. L. 105266 does not specify statutory minimum periods for permissive debarments. However, to foster economical and consistent decisionmaking, Secs. 890.1016890.1021 of the proposed rule recommend periods for permissive debarments that may be increased or decreased, based on factors specified in the statute. In the interests of sound administration, Sec. 890.1015 establishes an overall minimum period of not less than one year for any permissive debarment.

Procedures and Appeals

Pub. L. 105266, and these proposed regulations, require OPM to implement the findings of prior criminal, civil, or administrative due process proceedings with regard to all categories of mandatory debarments. For permissive debarments, the debarring official may, but is not required to, accept the relevant findings of a prior adjudication at the Federal, State, or local level as satisfying the requisite factual basis for debarment (e.g., a licensure revocation or suspension by a Federal regulatory board).

The subject of a proposed mandatory debarment will receive a 30day advance notice of the impending debarment and may challenge (``contest'') OPM's action by submitting information and arguments on their behalf (see Sec. 890.1006). If OPM proposes a period of debarment exceeding the 3year statutory minimum, the provider has the further right to make a personal appearance before the debarring official. The proposed mandatory debarment can be withdrawn only if the basis for it no longer exists, such as a conviction being reversed on appeal, or if the proposed subject is incorrectly identified. No further administrative appeal or reconsideration is available. Mandatory debarments become effective when implemented by OPM and remain in force during all judicial appeals. Sections 890.1009 and 890.1010 of the proposed rule address these procedures.

Permissive debarments (other than those based on prior adjudications) inherently require more extensive adjudication of individual cases than mandatory debarments. However, Pub. L. 105266 provided an effective method of administering them by establishing specific factors that OPM must consider when deciding whether to impose a permissive debarment. These are enumerated in Sec. 890.1013 of the proposed rule. A provider proposed for debarment on permissive grounds that have been previously adjudicated will receive advance written notice and an opportunity to contest the proposed debarment on essentially the same basis as an individual proposed for debarment on mandatory grounds. These procedures are reflected in
[[Page 64162]]

Sec. Sec. 890.1022890.1026 of the proposed rule.

When the grounds for a permissive debarment have not previously been determined through a due process adjudication, Pub. L. 105266 requires that OPM provide an opportunity for a due process hearing to establish the underlying facts. If the debarring official determines that the administrative record contains a bona fide dispute about facts material to the debarment, he must request a factfinding hearing before imposing debarment. If the debarring official decides that there is no genuine and material factual dispute on the record, he may issue a decision without a hearing. Except for debarments based on refusal to provide requested information or false/wrongful claims, the debarment will remain in effect while the hearing and associated procedures are held. The presiding official's findings (whether the hearing is held before or after debarment) are binding on the debarring official. No further administrative appeals are available after the debarring official's final decision. Sections 890.1027890.1029 of the proposed rule detail the procedural rights of a provider subject to permissive debarment on previously unadjudicated grounds.

Suspension

Suspension is a temporary measure, equivalent in its effect to debarment, i.e., FEHBP funds may not be paid for items or services furnished while a provider is suspended. However, in contrast to a debarment, suspension can be imposed without prior due process, pending the completion of legal or administrative proceedings. Although Pub. L. 105266 does not address suspension per se, it does confer discretion to make debarments effective immediately, if necessary to protect the health and safety of covered individuals. To exercise this authority systematically, we are proposing in Secs. 890.1030890.1041 to treat suspension as a separate form of sanction. This is also consistent with governmentwide practice under the Uniform Suspension and Debarment Common Rule. Section 890.1031 outlines the bases for taking a suspension action. To suspend a provider, OPM must have reasonable cause to believe that he has committed a violation warranting debarment and adequate evidence that the health and safety of covered individuals, or the integrity of FEHBP funds, would be at risk if a suspension were not issued immediately.

As provided in Sec. 890.1032, the initial period of a suspension may not exceed 12 months. The Department of Justice or a Federal or local prosecutor may request that the suspension be extended for an additional six months. When formal legal or administrative proceedings are initiated during the period of suspension, it may continue indefinitely, pending their completion. If a suspended provider is subsequently debarred, Sec. 890.1034 authorizes the debarring official to account for the period of suspension in determining the period of debarment.

Sections 890.1035890.1041 provide a reconsideration procedure for suspensions, including the opportunity to make a personal appearance before the suspending official and the right to request a factfinding proceeding before a presiding official when there is a bona fide dispute regarding facts material to the suspension.

Waivers and Exceptions

The proposed rule contains a number of waivers and exceptions that protect the financial and health care interests of persons who obtain their health insurance coverage through the FEHBP. These include provisions that (1) claims will be paid for covered persons who obtain services from a debarred provider without knowledge of his debarment [Sec. 890.1045]; (2) services furnished by a debarred provider in an emergency situation will be paid under each carrier's emergency coverage provisions [Sec. 890.1046]; (3) inpatients who were admitted to a debarred institution before its debarment will have continued coverage for inpatient institutional services until they are discharged or transferred, unless OPM determines that their health and safety require an earlier termination of payments [Sec. 890.1047]; (4) providers who are the sole provider of health care services or the sole source of essential specialized services in a community may apply for a limited waiver of debarment to continue their participation in FEHBP [Sec. 890.1048]; and (5) covered persons may apply for individual exceptions to permit continued payment of FEHBP funds for services they receive from a debarred provider if equivalent services are not reasonably available to them from a nondebarred provider or if interrupting an ongoing course of treatment by the debarred provider would create a risk to their health [Sec. 890.1050].

Reinstatement

The proposed rule recognizes two types of reinstatement. First, Sec. 890.1051 implements the provisions of Pub. L. 105266 authorizing OPM to establish regulations under which debarred providers may be reinstated after expiration of the term of their debarment. The statute makes all such reinstatements permissive on OPM's part and requires the provider to prove that they meet the criteria of Sec. 890.1051(c). The proposed rule requires the debarred provider to apply for
reinstatement. The effective date of a provider's reinstatement is to be established by OPM, but it may not occur before the period of debarment expires.

The second type of reinstatement, addressed in Sec. 890.1052, applies when administrative or legal action occurring after the debarment has the effect of retroactively invalidating the basis for the debarment. This will occur, for example, where a conviction or licensure action that was the grounds for our debarment is overturned on appeal. In this case, the provider may qualify for reinstatement before their period of debarment expires. Also included in this category are cases where a provider excluded by another agency is reinstated by that agency, thus removing the basis for debarment. In all of these situations, OPM will reinstate the provider without an application being filed. The effective date of these ``automatic'' reinstatements will reflect the date of the event forming the basis for the reinstatement. Therefore, if an appeals court's reversal of a criminal conviction or licensure revocation has the effect of invalidating the action from its inception, we will normally make the reinstatement retroactive to the beginning date of the debarment. However, in the case of a termination of a sanction imposed by another Federal agency, the effective date of the automatic reinstatement will be the date of the other agency's reinstatement. The table in Sec. 890.1053 provides an additional reference aid on these issues. Regulatory Flexibility Act

I certify that this proposed regulation will not have a significant economic impact on a substantial number of small entities.

Executive Order 12866, Regulatory Review

This rule has been reviewed by the Office of Management and Budget in accordance with Executive Order 12866.

List of Subjects in 5 CFR Part 890

Administrative practice and procedure, Government employees, Health facilities, Health insurance, Health professions, Hostages, Iraq, Kuwait, Lebanon.
[[Page 64163]]

Office of Personnel Management.
Kay Coles James,

Director.

Accordingly, OPM proposes to amend part 890 of title 5, Code of Federal Regulations as follows:

PART 890FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

1. The authority citation for Part 890 continues to read as follows:

Authority: 5 U.S.C. 8913; Sec. 890.803 also issued under 50 U.S.C. 403(p), 22 U.S.C. 4069c and 4069c1; subpart L also issued under sec. 599C of Pub. L. 101513, 104 Stat. 2064, as amended; Sec. 890.102 also issued under sections 11202(f), 11232(e), 11246(b) and (c) of Pub. L. 10533, 111 Stat. 251; and section 721 of Pub. L. 105261, 112 Stat. 2061.

2. Subpart J of part 890 is revised to read as follows: Subpart JAdministrative Sanctions Imposed Against Health Care Providers
Sec.
General Provisions and Definitions
890.1001 What are the scope and purpose of these regulations? 890.1002 How is this subpart written and organized?
890.1003 What terms in this subpart have specialized meanings? Mandatory Debarments
890.1004 What are the grounds for mandatory debarments?
890.1005 What is OPM's time limit for initiating a mandatory debarment?
890.1006 How will OPM notify me of my proposed debarment?
890.1007 What is the minimum period of debarment for mandatory debarments?
890.1008 When can the period of a mandatory debarment based on a conviction exceed the statutory minimum period?
890.1009 How may I contest OPM's proposal to debar me under a mandatory debarment authority?
890.1010 How will the debarring official decide my contest? Permissive Debarments
890.1011 What are the grounds for permissive debarments?
890.1012 What are OPM's time limits for initiating a permissive debarment?
890.1013 How will OPM decide whether to propose a permissive debarment?
890.1014 How will OPM notify me of my proposed debarment under a permissive debarment authority?
890.1015 What are the minimum and maximum periods for permissive debarments?
890.1016 What aggravating and mitigating factors will OPM consider in making a final determination of the period of my debarment? 890.1017 How will OPM determine the period of my debarment based on revocation or suspension of my professional licensure?
890.1018 How will OPM determine the period of debarment for an entity owned or controlled by a sanctioned person?
890.1019 How will OPM determine the period of my debarment based on my ownership or control of a sanctioned entity?
890.1020 How will OPM determine the period of my debarment based on false, wrongful, or deceptive claims?
890.1021 How will OPM determine the period of my debarment based on my failure to provide information needed to resolve claims? 890.1022 How may I contest OPM's proposal to debar me under a permissive debarment authority?
890.1023 What information will the debarring official consider as part of my contest?
890.1024 What standards and burdens of proof apply to my contest? 890.1025 When can the debarring official decide my contest without an additional factfinding proceeding?
890.1026 How will the debarring official resolve my contest if a factfinding proceeding is not required?
890.1027 When must the debarring official request a factfinding proceeding before deciding my contest?
890.1028 How will the presiding official conduct the factfinding proceeding?
890.1029 How will the debarring official decide my contest after the factfinding proceeding?
Suspension
890.1030 What is a suspension?
890.1031 Under what circumstances may OPM suspend me?
890.1032 How long will my suspension last?
890.1033 How will OPM notify me of a suspension?
890.1034 If I am debarred after being suspended, will the suspension period count as part of the debarment period?
890.1035 How may I contest OPM's decision to suspend me?
890.1036 What information will the suspending official consider as part of my contest?
890.1037 When can the suspending official decide my contest without arranging an additional factfinding proceeding?
890.1038 How will the suspending official resolve my contest if he determines that a factfinding proceeding is not required?
890.1039 Under what circumstances must the suspending official arrange a factfinding proceeding before deciding my contest? 890.1040 How will the presiding official conduct the factfinding proceeding?
890.1041 How will the suspending official decide my contest after the factfinding proceeding is completed?
Effect of Debarment
890.1042 When will my debarment go into effect?
890.1043 How does my debarment affect me?
Notifying Outside Parties About Debarment and Suspension Actions 890.1044 What entities will OPM notify of my debarment or suspension?
890.1045 How will OPM inform persons covered by FEHBP about my debarment or suspension?
Exceptions to the Effect of Debarments
890.1046 How does my debarment affect payments to me for services I furnish in emergency situations?
890.1047 What special rules apply to me as an institutional provider?
890.1048 How may I obtain a waiver of my debarment if I am the sole source of health care services in a community?
Special Exceptions To Protect Covered Persons
890.1049 How will FEHBP carriers handle claims for items or services furnished after a provider's debarment?
890.1050 How may an FEHBP covered individual request an exception to a provider's debarment?
Reinstatement
890.1051 How may I be reinstated when my period of debarment expires?
890.1052 Under what circumstances will OPM reinstate me without my filing an application?
890.1053 Table of procedures and effective dates for
reinstatements.
890.1054 What agencies and entities will OPM notify about my reinstatement?
890.1055 How may I contest OPM's decision to deny my reinstatement application?
Civil Monetary Penalties and Financial Assessments [Reserved] Subpart JAdministrative Sanctions Imposed Against Health Care Providers
General Provisions and Definitions
Sec. 890.1001 What are the scope and purpose of these regulations? (a) Scope. This subpart implements section 8902a of title 5, United States Code, as amended by Public Law 105266 (October 19, 1998). It establishes a system of administrative sanctions that OPM may, or in some cases, must apply to health care providers who have committed certain violations. The sanctions include debarment, suspension, civil monetary penalties, and financial assessments.
(b) Purpose. OPM will use the authorities in this subpart to protect the health and safety of the persons who obtain their health insurance coverage through the FEHBP and the financial and programmatic integrity of FEHBP transactions.
Sec. 890.1002 How is this subpart written and organized?
(a) Plain language format. We wrote this subpart in a questionand answer
[[Page 64164]]
format to make it easier for the public and health care providers to use. In this format, the questions comprising most section headings are integral parts of the respective sections and subsections, because the reader cannot interpret the answers without the context of the questions. Therefore, each question and answer are a unified whole with regulatory effect. The tables contained in this subpart also have regulatory effect.
(b) Words connoting OPM and health care providers. Unless otherwise indicated, the words ``you,'' ``me,'' and ``I'' connote a health care provider(s) and the word ``we'' connotes the Office of Personnel Management.
Sec. 890.1003 What terms in this subpart have specialized meanings?

The following terms have the meanings shown throughout this subpart:
(a) Carrier means an entity responsible for operating a health benefits plan described by section 8903 or section 8903a of title 5, United States Code.
(b) Community means a geographicallydefined area in which you furnish health care services or supplies and for which you may request a limited waiver of debarment in accordance with this subpart. Defined service area has the same meaning as community.
(c) Contest means your request for the debarring or suspending official to reconsider your proposed sanction, its length, or its amount.
(d) Control interest means that:
(1) You have a direct and/or indirect ownership interest of 5 percent or more in an entity;
(2) You own a whole or part interest in a mortgage, deed of trust, note, or other obligation secured by the entity, its property, or its assets, equating to a direct interest of 5 percent or more of the total property or assets of the entity;
(3) You are an officer or director of the entity, if it is organized as a corporation;
(4) You are a partner in the entity, if it is organized as a partnership;
(5) You are a managing employee of the entity, including but not limited to a general manager, business manager, administrator, or other employee who exercises, either directly or through other employees, operational or managerial control over the activities of the entity or a portion of it;
(6) You have substantive control over an entity or a critical influence over the activities of the entity or some portion of it, whether or not you are employed by the entity; or
(7) You act as an agent of the entity.
(e) Conviction or convicted means the following, without regard to the pendency or outcome of an appeal (other than a judgment of acquittal based on innocence) or request for relief:
(1) A Federal, State, or local court has entered a judgment of conviction against you for a felony or misdemeanor offense; (2) A Federal, State, or local court has found you guilty of a felony or misdemeanor offense;
(3) A Federal, State, or local court has accepted your plea of guilty, nolo contendere, or the equivalent to a felony or misdemeanor offense; or
(4) You have entered a first offender, diversion, or other program in which a judgment of conviction for a felony or misdemeanor offense has been withheld.
(f) Covered individual means an employee, annuitant, family member, or former spouse covered by a health benefits plan described by section 8903 or section 8903a of title 5, United States Code, or an individual eligible under section 8905(d) of title 5, United States Code. (g) Debarment means a decision by the debarring official to prohibit payment of FEHBP funds to you, based on section 8902a (b), (c), or (d) of title 5, United States Code and this subpart. (h) Debarring official means an OPM employee authorized to issue debarments under this subpart.
(i) FEHBP means the Federal Employees Health Benefits Program. (j) Health care services or supplies means health care or services and supplies such as diagnosis and treatment; drugs and biologicals; supplies, appliances and equipment; and hospitals or other institutional entities that furnish supplies and services.
(k) Incarceration means imprisonment, or any type of confinement with or without supervised release, including but not limited to home detention, community confinement, house arrest, or similar arrangements.
(l) Limited waiver means an approval by the debarring official of your request to receive payments of FEHBP funds for items or services rendered in a defined geographical area, notwithstanding your debarment, because you are the sole community provider or sole source of essential specialized services in a community.
(m) Mandatory debarment means a debarment based on section 8902a(b) of title 5, United States Code. OPM must debar providers who have committed violations listed in that section.
(n) Office or OPM means the United States Office of Personnel Management or the component thereof responsible for conducting the administrative sanctions program described by this subpart. (o) Permissive debarment means a debarment based on sections 8902a(c) or (d) of title 5, United States Code. The debarring official has discretionary authority to debar providers who have committed violations listed in those sections.
(p) Provider or provider of health care services or supplies means a physician, hospital, or other individual or entity that, directly or indirectly, furnishes health care services or supplies.
(q) Reinstatement means a decision by OPM to terminate your debarment and restore your eligibility to receive payment of FEHBP funds.
(r) Sanction or administrative sanction means any administrative action authorized by section 8902a of Title 5, United States Code, or this subpart, including debarment, suspension, civil monetary penalties, and financial assessments.
(s) Should know or should have known means that you act(ed) in deliberate ignorance or reckless disregard of the truth or falsity of information. For the purpose of imposing a sanction when the grounds incorporate a ``should know'' standard, no proof of specific intent to defraud is required to determine that you have committed an actionable violation.
(t) Sole community provider means that you are the only source of primary medical care within a defined service area.
(u) Sole source of essential specialized services in a community means that you are the only source of specialized health care items or services in a defined service area and items or services furnished by a nonspecialist cannot be substituted without jeopardizing the health or safety of covered individuals.
(v) Suspending official means an OPM employee authorized to issue suspensions under this subpart.
Mandatory Debarments
Sec. 890.1004 What are the grounds for mandatory debarments?

OPM must debar you if any of the factors listed in paragraph (a) or (b) of this section applies to you.
(a) Conviction for criminal offenses. You have been convicted under Federal or State law of a criminal offense relating to:
(1) Fraud, corruption, breach of fiduciary responsibility, or other [[Page 64165]]
financial misconduct in connection with the delivery of a health care service or supply;
(2) Neglect or abuse of patients in connection with the delivery of a health care service or supply;
(3) Interference with or obstruction of an investigation or prosecution of a criminal offense described in paragraph (a)(1) or (a)(2) of this section; or
(4) Unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.
(b) Administrative sanction currently in effect. You are currently debarred, suspended, or otherwise excluded from any Federal procurement or nonprocurement activity, within the meaning of section 2455 of the Federal Acquisition Streamlining Act of 1994.
(c) Direct involvement with an OPM program unnecessary. Your conviction of an offense listed in paragraph (a) of this section or your receiving a sanction described in paragraph (b) of this section need not have involved an FEHBP covered individual or transaction, or any other OPM program, in order to serve as a basis for mandatory debarment.
Sec. 890.1005 What is OPM's time limit for initiating a mandatory debarment?

OPM must issue you written notice of a proposed mandatory debarment within 6 years of the event that forms the basis for the debarment. If the basis for the proposed debarment is a conviction, the notice must be issued within 6 years of the date of the conviction. If the basis is another agency's suspension, debarment, or exclusion, the OPM notice must be issued within 6 years of the effective date of the other agency's action.
Sec. 890.1006 How will OPM notify me of my proposed debarment? (a) Written notice. We will inform you of your proposed debarment by written notice sent not less than 30 days prior to the proposed effective date.
(b) Contents of the notice. The notice will contain the following items of information:
(1) Effective date of your debarment;
(2) Minimum length of your debarment;
(3) Basis for your debarment;
(4) The provisions of law and regulation authorizing OPM to debar you;
(5) Effect of the debarment;
(6) Your right to contest the debarment to the debarring official; (7) Your right to request that we reduce the period of your debarment, if it exceeds the minimum required by law or this subpart; and
(8) The procedures you must follow to apply for reinstatement at the end of your period of debarment, or to seek a waiver of the debarment on the basis that you are the sole health care provider in a community or the sole source of essential specialized services. (c) Methods of sending notice. We will send the notice of proposed debarment to you by one of the following means:
(1) First class mail or, at our option, express delivery service, to your last known street or post office address;
(2) Facsimile transmission (fax), if you have furnished us a current fax number; or
(3) Email, if you have furnished us a current email address. (d) Delivery to attorney, agent, or representatives.
(1) If we are proposing to debar you as an individual, we may send the notice of proposed debarment to you or to any other person you have designated to act on your behalf during debarment proceedings. (2) If we are proposing to debar an entity, we may send the notice of proposed debarment to any owner, partner, director, officer, registered agent for service of process, attorney, or managing employee.
(e) Presumed timeframes for receipt of notice. When we compute deadlines associated with your receipt of notices we send to you, we will apply the timeframes specified in paragraphs (e)(1) through (e)(3) of this section.
(1) We will consider any notice we send by first class mail or express delivery service to your last known street or post office address as having been received by you not later than 5 days after we send it.
(2) We will consider any notice we send by facsimile (fax) transmission to a number that you provided to us as having been received by you when we transmit it.
(3) We will consider any notice we send by email to an email address that you furnished to us as having been received by you when we transmit it to your email service provider.
(f) Procedures if notice cannot be delivered.
(1) If we learn that a notice we sent to you was undeliverable as addressed or routed, we will make reasonable efforts to obtain a current and accurate address or to use alternative methods of transmitting the notice to you.
(2) If we are unable to deliver a notice to you after reasonable followup efforts, we will presume that you received it 5 days after the date of our final attempt to send it to you.
Sec. 890.1007 What is the minimum period of debarment for mandatory debarments?
(a) Debarment based on a conviction. The statutory minimum period of debarment for a mandatory debarment based on a conviction is 3 years.
(b) Debarment based on another agency's action. A mandatory debarment based on another Federal agency's debarment, suspension, or exclusion remains in effect until the originating agency terminates its sanction.
Sec. 890.1008 When can the period of a mandatory debarment based on a conviction exceed the statutory minimum period?
(a) Aggravating factors. OPM may debar you for longer than the 3 year minimum period if aggravating factors are associated with the basis for your debarment. The factors we consider to be aggravating are as follows:
(1) The FEHBP incurred a financial loss as the result of the acts underlying your conviction, or similar acts that were not adjudicated. In determining whether a financial loss occurred, we will not consider any amounts of restitution you may have paid;
(2) The sentence imposed by the court included incarceration; (3) The underlying offense(s), or similar acts not adjudicated, occurred repeatedly over a period of time, or there is evidence that you planned the offense(s) in advance;
(4) You have a prior record of criminal, civil, or administrative adjudication of related offenses or similar acts; or
(5) The actions underlying your conviction, or similar acts that were not adjudicated, adversely affected the physical, mental, or financial wellbeing of one or more covered individuals or other persons.
(b) Mitigating factors. If the aggravating factors justify debarring you for longer than 3 years, we will also consider whether mitigating factors may justify reducing your debarment period to not less than 3 years. The only factors that we will consider to be mitigating are as follows:
(1) The conviction(s) on which your debarment is based consist entirely or primarily of misdemeanor offenses;
(2) Court records, including associated sentencing reports, contain an official determination that you had a physical, mental, or emotional condition before or during the commission of the offenses underlying the conviction that reduced your level of culpability; or
(3) Your cooperation with Federal and/or State investigative officials
[[Page 64166]]
resulted in criminal convictions, civil recoveries, or administrative actions against other individuals, or served as the basis for identifying program weaknesses.
(c) Maximum period of debarment. There is no limit on the maximum period of a mandatory debarment based on a conviction.
Sec. 890.1009 How may I contest OPM's proposal to debar me under a mandatory debarment authority?
(a) Contesting the debarment. Within 30 days after receiving written notice that we intend to debar you under a mandatory debarment authority, you may submit information, documents, and written arguments in opposition to the proposed debarment. Our notice will give you specific information about where and how to submit this material. If you do not file a timely contest, your debarment will become effective as stated in the notice, without further action by OPM.
(b) Requesting a reduction of the debarment period. If we propose to debar you for a period longer than the 3year minimum required by Sec. 890.1007(a), you may request us to reduce the debarment period to not less than 3 years. You may make this request even if you are not contesting the debarment itself. In addition to providing written material, you may appear before the debarring official personally or through a representative to present oral arguments in support of your contest. Our notice will give you specific information about arranging an inperson presentation.
Sec. 890.1010 How will the debarring official decide my contest? (a) Prior adjudication is dispositive. Evidence indicating that you were the subject of a prior adjudication of a type described in Sec. 890.1004 fully satisfies the standard of proof for a mandatory debarment.
(b) Debarring official's decision. The debarring official will issue a written decision, based on all the information in the administrative record, within 30 days after the administrative record is complete. This decision period may be extended for good cause. (c) No further administrative proceedings. The debarring official's decisions regarding mandatory debarment and the period of your debarment are final and are not subject to further administrative review.
Permissive Debarments
Sec. 890.1011 What are the grounds for permissive debarments? (a) Licensure actions. We may debar you if either paragraph (a)(1) or (a)(2) of this section applies to you. We may take this action even if you retain current and valid professional licensure in another State(s).
(1) A State licensing authority revokes, suspends, restricts, or declines to renew your license to provide health care items or services for reasons related to your professional competence, professional performance, or financial integrity; or
(2) You surrender your license to provide health care items or services while a formal disciplinary proceeding concerning your professional competence, professional performance, or your financial integrity is pending before a State licensing authority.
(b) Ownership or control interests.
(1) We may debar a health care provider that is an entity because a person who holds an ownership or control interest of 5 percent or more in the entity has been:
(i) Convicted of a criminal offense listed in Sec. 890.1003(a) as a basis for debarment;
(ii) Debarred under this subpart from participating in the FEHBP; or
(iii) Assessed with a civil monetary penalty under section 8902a of title 5, United States Code and this subpart.
(2) We may debar you as an individual if both paragraphs (b)(2)(i) and (b)(2)(ii) of this section apply to you.
(i) You have an ownership or control interest in an entity that has been:
(A) Convicted of a criminal offense listed in Sec. 890.1004(a) as a basis for debarment;
(B) Debarred under this subpart from participating in the FEHBP; or (C) Assessed with a civil monetary penalty under section 8902a of title 5, United States Code and this subpart; and
(ii) You know or should know of the actions underlying the entity's conviction, debarment, or civil monetary penalty.
(c) False, deceptive, or wrongful claims practices. We may debar you if, in connection with a claim or claims submitted to a FEHBP carrier, you commit any of the following violations:
(1) You charge for health care items or services in an amount substantially in excess of your customary charges for those items or services;
(2) You charge for health care items or services that are substantially in excess of the needs of the covered individual to whom they are furnished;
(3) You charge for health care items or services whose quality fails to meet professionally recognized standards for items or services of that type;
(4) You charge for health care items or services that you knew or should have known were not furnished to the covered individual as claimed;
(5) You knowingly make, or cause to be made, a false statement or misrepresentation of a material fact reflected in a claim;
(6) You charge for items or services that you knew or should have known were furnished while you were debarred from participation in the FEHBP under this subpart; or
(7) You charge for items and services that you knew or should have known are in violation of the applicable charge limitations of section 8904(b) of title 5, United States Code.
(d) Failure to furnish required information. We may debar you if you knowingly fail to provide any information requested by a FEHBP carrier or OPM to determine:
(1) Whether a payment or reimbursement is properly payable; or (2) The proper amount of payment or reimbursement that may be due. Sec. 890.1012 What are OPM's time limits for initiating a permissive debarment?
(a) Licensure cases. If the basis for your proposed debarment is a licensure action, we must issue you a notice of proposed debarment within 6 years of the effective date on which a State licensing authority revoked, suspended, restricted, or declined to renew your license, or the date on which you surrendered your license to the State authority.
(b) Ownership or control. If the basis for the proposed debarment is ownership or control of an entity by a sanctioned person, or ownership or control of a sanctioned entity by a person who knew or should have known of the basis for the entity's sanction, we must issue a notice of proposed debarment within 6 years of the effective date of the sanction on which the proposed debarment is based.
(c) False, deceptive, or wrongful claims practices. If the basis for your proposed debarment involves a claim filed with a FEHBP carrier, we must issue you a notice of proposed debarment within 6 years of the date you presented the claim for payment to the covered person's FEHBP carrier.
(d) Failure to furnish requested information. If the basis for your proposed debarment involves your failure to furnish information requested by an FEHBP carrier or OPM, we must issue you a notice of proposed
[[Page 64167]]
debarment within 6 years of the date on which the carrier or OPM requested you to furnish the information in question.
Sec. 890.1013 How will OPM decide whether to propose a permissive debarment?
(a) Review factors. We will consider the factors listed in paragraphs (a)(1) through (a)(4) of this section in deciding whether to propose your debarment under a permissive debarment authority. The absence of a factor will be considered neutral; that is, it will have no effect on our decision.
(1) The nature of any claims involved in the basis for your proposed debarment and the circumstances under which they were presented to FEHBP carriers;
(2) The improper conduct involved in the basis for your proposed debarment, your degree of culpability, and your history of prior offenses;
(3) The extent to which you pose or may pose a risk to the health and safety of FEHBPcovered individuals or to the integrity of FEHBP transactions; and
(4) Other factors specifically relevant to your debarment that must be considered in the interests of fairness.
(b) Specialized review in certain cases. In determining whether to propose debarment under Sec. 890.1011(c)(2), providing items or services substantially in excess of the needs of a covered individual, or Sec. 890.1011(c)(3), providing items or services that fail to meet professionallyrecognized quality standards, we will obtain the input of trained reviewers, based on written medical protocols developed by physicians. If we cannot reach a decision on this basis, we will consult with a physician in an appropriate specialty area.
Sec. 890.1014 How will OPM notify me of my proposed debarment under a permissive debarment authority?

We will apply the provisions of Sec. 890.1006 to notify you of your proposed permissive debarment.
Sec. 890.1015 What are the minimum and maximum periods for permissive debarments?

We will not issue a permissive debarment for a period of less than one year, unless we specifically determine that a shorter period is in the interests of the FEHBP and its covered individuals. There is no limit on the maximum period of a permissive debarment.
Sec. 890.1016 What aggravating and mitigating factors will OPM consider in making a final determination of the period of my debarment? (a) Aggravating factors. We will consider the presence of any of the factors listed in paragraphs (a)(1) through (a)(5) of this section, to represent aggravating circumstances that may support increasing the length of a debarment beyond the periods specified in Secs. 890.1016 through 890.1021, respectively. The absence of a factor will have no effect either to increase or lower the nominal period of debarment. (1) Your actions underlying the basis for the debarment, or similar acts, had an adverse impact on the physical or mental health or well being of one or more FEHBPcovered individuals or other persons. (2) You have a documented history of prior criminal wrongdoing; civil violations related to health care items or services; improper conduct; or administrative violations addressed by a Federal or State agency. We will consider matters involving violence, patient abuse, drug abuse, or controlled substances convictions or violations to be particularly serious.
(3) Your actions underlying the basis for the debarment, or similar acts, resulted in financial loss to the FEHBP, FEHBPcovered individuals, or other persons. In determining whether, or to what extent, a financial loss occurred, we will not consider any amounts of restitution you may have paid.
(4) You filed false, wrongful, or improper claims to FEHBP carriers that were numerous, submitted over a prolonged period of time, part of an ongoing pattern of wrongful acts, or of which you were specifically aware or directly responsible.
(5) You attempted to obstruct, hinder, or impede official inquiries into the wrongful conduct underlying your debarment.
(b) Mitigating factors. The presence of either of the factors identified in paragraphs (b)(1) or (b)(2) of this section may support shortening your period of debarment to not less than one year. Their absence will have no effect to either raise or lower the period of debarment.
(1) Your cooperation with Federal, State, or local authorities resulted in criminal convictions, civil recoveries, or administrative actions against other violators, or served as the basis for official determinations of program weaknesses or vulnerabilities; and (2) Official records of judicial proceedings or the proceedings of State licensing authorities contain a formal determination that you had a physical, mental, or emotional condition that reduced your level of culpability before or during the period in which you committed the violations in question.
Sec. 890.1017 How will OPM determine the period of my debarment based on revocation or suspension of my professional licensure?
(a) Indefinite term of debarment. Subject to the exceptions in paragraph (b) of this section, your debarment under Sec. 890.1011(a) will be for an indefinite period coinciding with the period during which your license is revoked, suspended, restricted, surrendered, or otherwise not in effect in the State whose action against your license formed the basis for our debarment.
(b) Aggravating circumstances. If any of the aggravating circumstances in Sec. 890.1016 apply to you, we may debar you for a stated period beyond the duration of your licensure revocation or suspension.
Sec. 890.1018 How will OPM determine the period of debarment for an entity owned or controlled by a sanctioned person?

We will determine the length of debarments issued under Sec. 890.1011(b)(1) as described in paragraphs (a) through (c) of this section.
(a) Concurrent with owner/controller's debarment. The debarment of an entity based on debarment of an individual with an ownership or control interest will be for a period concurrent with the individual's debarment. If any aggravating or mitigating circumstances identified in Sec. 890.1016 apply to the entity itself and were not considered in setting the period of the individual's debarment, we may debar the entity for a period longer or shorter than the individual's debarment. (b) Debarment based on owner/controller's conviction. The debarment of an entity based on the criminal conviction of a person with an ownership or control interest for an offense listed in
Sec. 890.1004(a)(1) through (a)(4), will be for a period of no less than 3 years, subject to adjustment for any aggravating or mitigating circumstances identified in Sec. 890.1016 that apply to the entity itself.
(c) Debarment based on owner/controller's civil monetary penalty. The debarment of an entity based on a civil monetary penalty imposed on a person with an ownership or control interest, will be for a period of no less than 3 years, subject to adjustment for any aggravating or mitigating circumstances identified in Sec. 890.1016 that apply to the entity itself.
[[Page 64168]]
Sec. 890.1019 How will OPM determine the period of my debarment based on my ownership or control of a sanctioned entity?

We will determine the period of a debarment issued under Sec. 890.1011(b)(2) as described in paragraphs (a) through (c) of this section.
(a) Concurrent with entity's debarment. If your debarment is based on your ownership or control of a debarred entity, we may debar you for a period concurrent with the entity's debarment. If any of the aggravating or mitigating circumstances identified in Sec. 890.1016 applies to you personally and was not considered in setting the period of the entity's debarment, we may debar you for a period longer or shorter than the entity's debarment.
(b) Debarment based on conviction of entity. If your debarment is based on the criminal conviction of an entity you own or control for an offense listed in Sec. 890.1004(a)(1) through (a)(4), we will debar you for a period of no less than 3 years, subject to adjustment for any aggravating or mitigating circumstances identified in Sec. 890.1016 that apply to you as an individual.
(c) Debarment based on civil monetary penalty against entity. If your debarment is based on a civil monetary penalty imposed on an entity you own or control, we will debar you for 3 years, subject to adjustment on the basis of the aggravating and mitigating circumstances listed in Sec. 890.1016 that apply to you as an individual. Sec. 890.1020 How will OPM determine the period of my debarment based on false, wrongful, or deceptive claims?

Debarments under Sec. 890.1011(c) will be for a period of 3 years, subject to adjustment based on the aggravating and mitigating factors listed in Sec. 890.1016.
Sec. 890.1021 How will OPM determine the period of my debarment based on my failure to provide information needed to resolve claims?

Debarments under Sec. 890.1011(d) will be for a period of 3 years, subject to adjustment based on the aggravating and mitigating factors listed in Sec. 890.1016.
Sec. 890.1022 How may I contest OPM's proposal to debar me under a permissive debarment authority?
(a) Right to contest your proposed debarment. You may challenge a proposed debarment by filing a written contest with the debarring official during the 30day notice period. If you do not file a timely contest, the debarment will become effective as stated in the notice, without further action by OPM.
(b) Challenging the length of your proposed debarment. You may contest the length of the proposed debarment, even if you are not challenging the debarment itself, or you may challenge both the length of a debarment and the debarment itself in the same contest. However, issues involving the length of a debarment are not subject to a fact finding hearing under Sec. 890.1028.
Sec. 890.1023 What information will the debarring official consider as part of my contest?
(a) Documents and oral and written arguments. You may submit documents and written arguments in opposition to the proposed debarment and/or its length, and you may appear personally or through a representative before the debarring official to provide any other information you believe to be relevant.
(b) Specific factual basis for contesting the proposed debarment. You must identify the specific facts that contradict the basis for your proposed debarment as stated in your notice of proposed debarment. A general or unsupported denial that the basis for debarment applies to you does not raise a genuine dispute over facts material to the debarment, and the debarring official will not give it any probative weight.
(c) Mandatory disclosures. In addition to any other information that you submit during the contest, you must inform the debarring official of any of the matters in paragraphs (c)(1) through (c)(3) of this section, that applies to you. If you fail to provide applicable information, OPM may initiate further legal or administrative action against you.
(1) Any existing, proposed, or prior exclusion, debarment, penalty, or other sanction imposed on you by a Federal, State, or local government agency, including any administrative agreement that purports to affect only a single agency;
(2) Any criminal or civil legal proceeding not referenced in the notice of proposed debarment that arose from facts relevant to the basis for debarment stated in the notice; and
(3) Any entity in which you have a control interest, as that term is defined in Sec. 890.1003(d).
Sec. 890.1024 What standards and burdens of proof apply to my contest? (a) Preponderance of evidence. OPM must prove by a preponderance of the evidence that you have committed a sanctionable violation. (b) Demonstrating basis for not imposing debarment. If OPM establishes an evidentiary basis for your debarment, you have the burden of demonstrating that you are presently responsible to participate in FEHBP and that debarment is not necessary to protect the interests of the program and its covered individuals.
Sec. 890.1025 When can the debarring official decide my contest without an additional factfinding proceeding?

A factfinding proceeding in addition to your presentation of arguments, documents, and information to the debarring official is not required in the following circumstances:
(a) Previously adjudicated facts. Your proposed debarment is based on facts determined in a prior due process adjudication. Examples of prior due process proceedings include, but are not limited to, the adjudication procedures associated with:
(1) Licensure revocation, suspension, restriction, or nonrenewal by a State licensing authority;
(2) Debarment, exclusion, suspension, civil monetary penalties, or similar legal or administrative adjudications by Federal, State, or local agencies;
(3) A criminal conviction or civil judgment; or
(4) An action on your part that constitutes a waiver of your right to a due process adjudication, such as surrender of your professional license during the pendency of a disciplinary hearing, entering a guilty plea or confession of judgment in a judicial proceeding, or entering a settlement agreement to resolve or forestall a civil, criminal, or administrative action.
(b) No dispute of material facts. Your contest does not identify a bona fide dispute concerning facts material to the basis for your proposed debarment.
Sec. 890.1026 How will the debarring official resolve my contest if a factfinding proceeding is not required?
(a) Debarring official's procedures. If the debarring official determines that a factfinding proceeding is not required, you will receive the final decision on your contest within 30 days after the record closes for submitting evidence, arguments, and information as part of your contest. The debarring official may extend this timeframe for good cause.
(b) No further administrative review available. There are no further administrative proceedings after the presiding official's final decision. If you are adversely affected by the decision, you may appeal to the appropriate United States District Court under section 8902a(h)(2) of title 5, United States Code.
[[Page 64169]]
Sec. 890.1027 When must the debarring official request a factfinding proceeding before deciding my contest?
(a) Criteria for holding factfinding proceeding. The debarring official must request another OPM official (``presiding official'') to hold a factfinding proceeding if both paragraphs (a)(1) and (a)(2) of this section apply.
(1) Facts material to your proposed debarment have not been adjudicated in a prior due process proceeding; and
(2) These facts are genuinely in dispute, based on the entire administrative record available to the debarring official.
(b) Qualification to serve as presiding official. The presiding official is designated by the OPM Director or another OPM official authorized by the Director to make such designations. The presiding official will be a senior official who is able to conduct informal adjudicative processes. He will have had no previous contact with your proposed debarment or the contest.
(c) Effect on contest. The debarring official must defer his decision on your contest pending the results of the factfinding proceeding.
Sec. 890.1028 How will the presiding official conduct the factfinding proceeding?
(a) Informal proceeding. The presiding official will conduct the factfinding proceedings as informally as practicable, consistent with principles of fundamental fairness. Formal rules of evidence or procedure do not apply to these proceedings.
(b) Proceeding limited to disputed material facts. The presiding official can consider only the genuinely disputed facts identified by the debarring official as relevant to the basis for your debarment. Matters previously adjudicated or about which there is no bona fide dispute on the record are outside the presiding official's jurisdiction.
(c) Right to present information, evidence, and arguments. You may appear before the presiding official with your counsel, submit oral and written arguments and documentary evidence, present witnesses on your behalf, question any witnesses testifying in support of your suspension, and challenge the accuracy of any other evidence that the agency offers as a basis for your suspension.
(d) Record of proceedings. The presiding official will make an audio recording of the proceedings before him. If you wish to have a transcribed record, you may purchase it.
(e) Presiding official's findings. The presiding official will determine all of the disputed facts identified by the debarring official, on the basis of a preponderance of the evidence in the entire administrative record. Within 30 days after the record of the proceeding closes, the presiding official must issue a written report of all findings of fact to the debarring official.
Sec. 890.1029 How will the debarring official decide my contest after the factfinding proceeding?
(a) Findings must be accepted. The debarring official must accept the presiding official's findings of fact, unless they are arbitrary, capricious, or clearly erroneous. In such a case, the debarring official must remand the material facts to the presiding official for additional proceedings in accordance with Sec. 890.1028.
(b) Timeframe for final decision. The debarring official will issue a final written decision on your contest within 30 days after receiving the presiding official's findings. The debarring official may extend this decision period for good cause.
(c) Debarring official's final decision.
(1) The debarring official must observe the evidentiary standards and burdens of proof stated in Sec. 890.1024 in reaching a final decision to debar.
(2) In any case where the final decis

FOR FURTHER INFORMATION CONTACT

David Cope, 202-606-2851, FAX 202-606- 2153.