SUPPLEMENTARY INFORMATION:

Background

Section 701 of the BBA, referred to as the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Inflation Adjustment Act),^[1] placed requirements on Federal agencies that impose CMPs, including: 1) adjusting the maximum level of CMPs via an initial “catch-up” adjustment, which was to be codified by interim final regulations to be effective no later than August 1, 2016; and 2) adjusting the penalties for inflation annually.^[2]

Based on guidance issued by the Office of Management and Budget (OMB),^[3] we modified the penalty level or range that we identified as needing an initial catch-up based on the percent change between the not seasonally adjusted Consumer Price Index for All Urban Consumers (CPI-U) for the month of October in the year in which the penalty was established or previously adjusted and the October 2015 CPI-U.^[4] We used OMB-published multipliers to make these initial adjustments, ensuring not to exceed 150 percent of the amount of that penalty as of the date of enactment of the Inflation Adjustment Act.^[5] Based on the Inflation Adjustment Act, the annual inflation adjustment in subsequent years must be a cost-of-living adjustment based on any increases in the October CPI-U (not seasonally adjusted) each year, rounded to the nearest multiple of $1.^[6]

On June 27, 2016, we published an interim final rule ^[7] implementing these changes to the maximum penalty amounts that may be imposed under the CMP program, pursuant to the Inflation Adjustment Act. This interim final rule provided notice of the initial “catch-up” adjustment in the maximum penalty amounts, and the calculation for the annual adjustment of these penalty amounts. As disclosed in the interim final rule, for any future adjustments of the maximum penalty assessed after 2016, we would publish a notice in the Federal Register announcing adjustment of the new amounts to account for inflation.^[8] We have published annual notices in the Federal Register each year after 2016.^[9] We did not request comments on the interim final rule.

For the 2024 annual notice, our adjustments to the existing maximum CMPs resulted in the new maximum penalties effective January 15, 2025: $9,704.00 for each violation under section 1129 of the Social Security Act for fraud facilitators in a position of trust (42 U.S.C. 1320a-8); $10,289.00 for each violation under section 1129 of the Social Security Act for all other violators (42 U.S.C. 1320a-8); $65,653.49 per broadcast or telecast under section 1140 of the Social Security Act; and $12,799.00 for all other violations under section 1140 of the Social Security Act (42 U.S.C. 1320b-10).^[10]

As noted above, the interim final rule incorporated the penalty inflation adjustments for CMPs contained in sections 1129 and 1140 of the Social Security Act, and established that we will publish a notice of the maximum penalty in the Federal Register on an annual basis on or before January 15 of each calendar year. With this final rule, we are adopting without change the regulatory text from the interim final rule that was published in the Federal Register on June 27, 2016.

Regulatory Procedure

Good Cause for Exception to Rulemaking Procedure

Pursuant to sections 205(a), 702(a)(5), and 1631(d)(1) of the Social Security Act, 42 U.S.C. 405(a), 42 U.S.C. 902(a)(5), and 42 U.S.C. 1383(d)(1), we follow the Administrative Procedures Act (APA) rulemaking procedures specified in 5 U.S.C. 553 in the development of our regulations.

The APA provides exceptions to its Notice of Proposed Rulemaking (NPRM) procedures when an agency finds that there is good cause for dispensing with such procedures on the basis that they are impracticable, unnecessary, or contrary to the public interest. In 2016, we dispensed with those procedures and published an interim final rule because Section 701(b)(1)(D) of the BBA 2015 required that we adjust CMPs through an interim final rulemaking and that we implement those adjustments not later than August 1, 2016. Because the adjustment was required without policy discretion, we find upon good cause that prior notice and other public procedure with respect to this action are not necessary.

In addition, we find that there is good cause for dispensing with the 30-day delay in the effective date of this final rule as provided by 5 U.S.C. 553(d)(3). As we explained above, this final rule codifies the existing statutory requirements in the CFR, as set forth in the interim final rule. We are making no other changes. Therefore, we find that it is unnecessary to delay the effective date of the final rule.

Executive Order (E.O.) 12866, as Supplemented by E.O. 13563

We consulted with OMB and determined that this final rule does not meet the criteria for a significant regulatory action under E.O. 12866 as supplemented by E.O. 13563. Thus, OMB did not review this final rule.

Regulatory Flexibility Act

The provisions of the Regulatory Flexibility Act relating to an initial and final regulatory flexibility analysis (5 U.S.C. 603, 604) are not applicable to this final rule because we were not required to publish notice of proposed rulemaking under 5 U.S.C. 553 or any other law. Accordingly, a regulatory flexibility analysis is not required when among other things the agency, for good cause, finds that notice and public procedure are impracticable, unnecessary, or contrary to the public interest.

Nevertheless, while the increase in the civil monetary penalties provided ( printed page 35138) for under sections 1129 and 1140 of the Act might have a slight impact on small entities, it is the nature of the violation and not the size of the entity that will result in an action by the Office of Inspector General. Additionally, the Social Security Act requires the consideration of individual factors, including the financial condition of the person or entity committing the offense, in determining the CMP amount. Therefore, we do not anticipate that small entities will be significantly affected.

Congressional Review Act

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.) this rule is not a “major rule,” as defined by 5 U.S.C. 804(2).^[11]

E.O. 14192

Based upon the criteria established in E.O. 14192 and OMB Memorandum M-25-20, this rule is not an “E.O. regulatory action” because it does not impose total costs greater than zero.^[12]

Paperwork Reduction Act

These rules do not create any new or affect any existing collections and, therefore, do not require OMB approval under the Paperwork Reduction Act.

91 FR 35136