Annual Civil Monetary Penalties Inflation Adjustment

<RULE> DEPARTMENT OF HEALTH AND HUMAN SERVICES <CFR>45 CFR Part 102</CFR> <RIN>RIN 0991-AC34</RIN> <SUBJECT>Annual Civil Monetary Penalties Inflation Adjustment</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Office of the Assistant Secretary for Financial Resources, Department of Health and Human Services. <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Department of Health and Human Services (HHS) is updating its regulations to reflect required annual inflation-related increases to the civil monetary penalty (CMP) amounts in its statutes and regulations, under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> <E T="03">Effective date:</E> This final rule is effective August 8, 2024. <E T="03">Applicability date:</E> The adjusted civil monetary penalty amounts apply to penalties assessed on or after August 8, 2024, if the violation occurred on or after November 2, 2015. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Katrina Brisbon, Deputy Assistant Secretary, Office of Acquisitions, Office of the Assistant Secretary for Financial Resources, Room 536-H, Hubert Humphrey Building, 200 Independence Avenue SW, Washington, DC 20201; (202) 260-6677. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Background</HD> The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (section 701 of Pub. L. 114-74) (the “2015 Act”) amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410, 104 Stat. 890 (1990)), which is intended to improve the effectiveness of CMPs and to maintain the deterrent effect of such penalties, requires agencies to adjust the CMPs for inflation annually. HHS lists the CMP authorities and the amounts administered by all of its agencies in tabular form in 45 CFR 102.3, which was issued in an interim final rule published in the September 6, 2016, issue of the <E T="04">Federal Register</E> (81 FR 61538). Annual adjustments were subsequently published in the <E T="04">Federal Register</E> on February 3, 2017 (82 FR 9175), October 11, 2018 (83 FR 51369), November 5, 2019 (84 FR 59549), January 17, 2020 (85 FR 2869), November 15, 2021 (86 FR 62928), March 17, 2022 (87 FR 15100), and October 6, 2023 (88 FR 69531). <HD SOURCE="HD1">II. Calculation of Annual Inflation Adjustment and Other Updates</HD> The annual inflation adjustment for each applicable CMP is determined using the percent increase in the Consumer Price Index for all Urban Consumers (CPI-U) for the month of October of the year in which the amount of each CMP was most recently established or modified. In the December 19, 2023, Office of Management and Budget (OMB) Memorandum for the Heads of Executive Agencies and Departments, M-24-07, “Implementation of Penalty Inflation Adjustments for 2024, Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015,” OMB published the multiplier for the required annual adjustment. The cost-of-living adjustment multiplier for 2024, based on the CPI-U for the month of October 2023, not seasonally adjusted, is 1.03241. The multiplier is applied to each applicable penalty amount that was updated and published for fiscal year (FY) 2023 and is rounded to the nearest dollar. In addition to the inflation adjustments for 2023, this final rule makes a few non-substantive changes to punctuation in the table in 45 CFR 102.3. <HD SOURCE="HD1">III. Statutory and Executive Order Reviews and Waiver of Proposed Rulemaking</HD> The 2015 Act requires Federal agencies to publish annual penalty inflation adjustments notwithstanding section 553 of the Administrative Procedure Act (APA). Section 4(a) of the 2015 Act directs Federal agencies to publish annual adjustments no later than January 15th of each year thereafter. In accordance with section 553 of the APA, most rules are subject to notice and comment and are effective no earlier than 30 days after publication in the <E T="04">Federal Register</E> . However, section 4(b)(2) of the 2015 Act provides that each agency shall make the annual inflation adjustments “notwithstanding section 553” of the APA. According to OMB's Memorandum M-24-07, the phrase “notwithstanding section 553” in section 4(b)(2) of the 2015 Act means that “the public procedure the APA generally requires—notice, an opportunity for comment, and a delay in effective date—is not required for agencies to issue regulations implementing the annual adjustment.” Consistent with the language of the 2015 Act and OMB's implementation guidance, the inflation adjustments set out in this rule are not subject to notice and an opportunity for public comment and will be effective immediately upon publication. Pursuant to OMB Memorandum M-24-07, HHS has determined that the annual inflation adjustment to the civil monetary penalties in its regulations does not trigger any requirements under procedural statutes and Executive Orders that govern rulemaking procedures. <HD SOURCE="HD1">IV. Effective and Applicability Dates</HD> This rule is effective on the date specified in the <E T="02">DATES</E> section of this final rule. The adjusted civil monetary penalty amounts apply to penalties assessed on or after the date specified in the <E T="02">DATES</E> section of this final rule, if the violation occurred on or after November 2, 2015 ( <E T="03">i.e.,</E> the date of enactment of the 2015 Act). If the violation occurred before November 2, 2015, or a penalty was assessed before September 6, 2016, the pre-adjustment civil penalty amounts in effect before September 6, 2016, will apply. <LSTSUB> <HD SOURCE="HED">List of Subjects in 45 CFR Part 102</HD> Administrative practice and procedure, Penalties. </LSTSUB> For reasons discussed in the preamble, the Department of Health and Human Services amends subtitle A, title 45 of the Code of Federal Regulations as follows: <HD SOURCE="HED">PART 102—ADJUSTMENT OF CIVIL MONETARY PENALTIES FOR INFLATION</HD> <REGTEXT TITLE="45" PART="102"> 1. The authority citation for part 102 continues to read as follows: <HD SOURCE="HED">Authority:</HD> Pub. L. 101-410, Sec. 701 of Pub. L. 114-74, 31 U.S.C. 3801-3812. </REGTEXT> <REGTEXT TITLE="45" PART="102"> 2. Amend §  102.3 by revising table 1 to read as follows: <SECTION> <SECTNO>§ 102.3 </SECTNO> <SUBJECT>Penalty adjustment and table.</SUBJECT> <STARS/> <GPOTABLE COLS="7" OPTS="L2,nj,p7,7/8,i1" CDEF="s100,r100,xs36,r200,10,10,10"> <TTITLE>Table 1 to § 102.3—Civil Monetary Penalty Authorities Administered by HHS</TTITLE> <CHED H="1">U.S.C. section(s)</CHED> <ENT I="22">21 U.S.C.:</ENT> </ROW> <ROW> <ENT I="03">333(b)(2)(A)</ENT> <ENT/> <ENT>FDA</ENT> <ENT>Penalty for violations related to drug samples resulting in a conviction of any representative of manufacturer or distributor in any 10-year period</ENT> <ENT>2023</ENT> <ENT>123,965</ENT> <ENT>127,983</ENT> </ROW> <ROW> <ENT I="03">333(b)(2)(B)</ENT> <ENT/> <ENT>FDA</ENT> <ENT>Penalty for violation related to drug samples resulting in a conviction of any representative of manufacturer or distributor after the second conviction in any 10-yr period</ENT> <ENT>2023</ENT> <ENT>2,479,282</ENT> <ENT>2,559,636</ENT> </ROW> <ROW> <ENT I="03">333(b)(3)</ENT> <ENT/> <ENT>FDA</ENT> <ENT>Penalty for failure to make a report required by 21 U.S.C. 353(d)(3)(E) relating to drug samples</ENT> <ENT>2023</ENT> <ENT>247,929</ENT> <ENT>255,964</ENT> </ROW> <ROW> <ENT I="03">333(f)(1)(A)</ENT> <ENT/> <ENT>FDA</ENT> <ENT>Penalty for any person who violates a requirement related to devices for each such violation</ENT> <ENT>2023</ENT> <ENT>33,483</ENT> <ENT>34,568</ENT> </ROW> <ROW> <ENT I="22"> </ENT> <ENT O="xl"/> <ENT>FDA</ENT> <ENT>Penalty for aggregate of all violations related to devices in a single proceeding</ENT> <ENT>2023</ENT> <ENT>2,232,281</ENT> <ENT>2,304,629</ENT> </ROW> <ROW> <ENT I="03">333(f)(2)(A)</ENT> <ENT/> <ENT>FDA</ENT> <ENT>Penalty for any individual who introduces or delivers for introduction into interstate commerce food that is adulterated per 21 U.S.C. 342(a)(2)(B) or any individual who does not comply with a recall order under 21 U.S.C. 350l</ENT> <ENT>2023</ENT> <ENT>94,128</ENT> <ENT>97,179</ENT> </ROW> <ROW> <ENT I="22"> </ENT> <ENT O="xl"/> <ENT>FDA</ENT> <ENT>Penalty in the case of any other person (other than an individual) for such introduction or delivery of adulterated food</ENT> <ENT>2023</ENT> <ENT>470,640</ENT> <ENT>485,893</ENT> </ROW> <ROW> <ENT I="22"> </ENT> <ENT O="xl"/> <ENT>FDA</ENT> <ENT>Penalty for aggregate of all such violations related to adulterated food adjudicated in a single proceeding</ENT> <ENT>2023</ENT> <ENT>941,280</ENT> <ENT>971,787</ENT> </ROW> <ROW> <ENT I="03">333(f)(3)(A)</ENT> <ENT/> <ENT>FDA</ENT> <ENT>Penalty for all violations adjudicated in a single proceeding for any person who violates 21 U.S.C. 331(jj) by failing to submit the certification required by 42 U.S.C. 282(j)(5)(B) or knowingly submitting a false certification; by failing to submit clinical trial information under 42 U.S.C. 282(j); or by submitting clinical trial information under 42 U.S.C. 282(j) that is false or misleading in any particular under 42 U.S.C. 282(j)(5)(D)</ENT> <ENT>2023</ENT> <ENT>14,262</ENT> <ENT>14,724</ENT> </ROW> <ROW> <ENT I="03">333(f)(3)(B)</ENT> <ENT/> <ENT>FDA</ENT> <ENT>Penalty for each day any above violation is not corrected after a 30-day period following notification until the violation is corrected</ENT> <ENT>2023</ENT> <ENT>14,262</ENT> <ENT>14,724</ENT> </ROW> <ROW> <ENT I="03">333(f)(4)(A)(i)</ENT> <ENT/> <ENT>FDA</ENT> <ENT>Penalty for any responsible person that violates a requ ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 97k characters. 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