HHS Expands Ability to Ban Medicare, Medicaid Providers

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By James Swann

Physicians who obstruct government audits or fail to provide investigators with prompt access to medical records can face exclusion from Medicare and Medicaid.

Exclusion from the federal health programs can be a death sentence for providers who rely on claims payments to stay in business. The exclusion expansion may heighten provider risk.

The exclusion expansion was part of a final rule from the Health and Human Services Office of Inspector General released Jan. 11. The final rule was published in the Federal Register Jan. 12 (82 Fed. Reg. 4,100) and is effective Feb. 13.

The final rule is likely to push providers to cooperate with federal audits and investigations, because the risks of exclusion are high for failing to do so, even failing to provide accurate information on a Medicare provider enrollment application, Judith Waltz, a health-care attorney with Foley & Lardner LLP in San Francisco, told Bloomberg BNA.

“I think these provisions reflect the government’s current approach to just get rid of providers they find untrustworthy,” Waltz said.

The final rule complements a December 2016 OIG final rule that expanded the use of civil monetary penalties for violations such as physicians making false statements when enrolling in federal health-care programs, Waltz said.

However, Waltz said it remains to be seen whether the exclusion expansion will stand if the Affordable Care Act is repealed. The ACA is the underlying authority for the exclusion expansion, Waltz said.

The OIG also expanded its exclusion authority to include banning providers from Medicare and Medicaid if they’re convicted of illegally prescribing or distributing a controlled substance and failing to provide payment information to the OIG.

Under the final rule, organizations can be excluded from Medicare and Medicaid if they have direct or indirect ownership relationships with individuals who have been convicted of criminal offenses.

10-Year Limit

The final rule also limits the OIG to a 10-year period to pursue exclusions. The earlier proposed rule didn’t include a limit.

The OIG said the 10-year limit would allow for necessary exclusions while easing administrative burdens on Medicare and Medicaid providers.

The lack of a time limit on the OIG’s ability to initiate exclusions could have placed a significant burden on providers and suppliers, since their conduct and compliance efforts could be second-guessed for many years based on supporting documentation and witness statements from early in the process, Elizabeth Carder-Thompson, a health-care attorney at Reed Smith LLP in Washington, told Bloomberg BNA.

Carder-Thompson said she expects the OIG will increase the use of its exclusion authority in the future for providers and suppliers.

The OIG also said the 10-year period would lower the risk of the agency initiating an exclusion while a provider’s False Claims Act case is on trial, which can prove difficult for both the government and the provider.

To contact the reporter on this story: James Swann in Washington at jswann1@bna.com

To contact the editor responsible for this story: Kendra Casey Plank at kcasey@bna.com

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