Lawmakers Propose Expanding OIG's Health Program Exclusion Authority

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By James Swann

May 18 — A bill introduced in the House May 17 would expand the government's ability to exclude individuals from participating in federal health-care programs.

The Fighting Medicare Fraud Act of 2016 (H.R. 5267), introduced by Reps. Lois Frankel (D-Fla.) and William Keating (D-Mass.), would let the Health and Human Services Office of Inspector General exclude an individual if he or she has any affiliations with an organization that has been penalized for fraud.

For example, if an individual was an officer or a managing employee at a health-care organization that was engaged in fraudulent activity, but left before the organization was penalized, that person would be eligible for exclusion under the bill.

Kirk Ogrosky, an attorney with Arnold & Porter in Washington, told Bloomberg BNA May 18 that the OIG has repeatedly suggested expanding exclusion authority as a way to solve what it considers a serious loophole in its authority.

Ogrosky said that under current law, permissive exclusions are limited to individuals who are currently employed, so voluntarily terminating an employment relationship blocks the OIG from exercising its exclusion authority.

“This bill would allow the OIG to initiate exclusion proceedings against former employees and close the loophole,” Ogrosky said.

Previous legislation introduced in 2013 (H.R. 2925, the Strengthening Medicare Anti-Fraud Measures Act of 2013) also attempted to expand exclusion authority, but never reached the House floor for a vote (150 HCDR, 8/5/13).

Yates Memo

Kevin McAnaney, an attorney with the Law Offices of Kevin G. McAnaney in New York, told Bloomberg BNA May 18 that the bill appears to mirror changes the OIG has been seeking for a long time. Officers and managing employees know that the OIG can only exclude employees working at a sanctioned entity, and they often end up leaving before sanctions are imposed, McAnaney said.

McAnaney said the bill dovetails with the Yates memo and with congressional interest in addressing individual culpability.

The Yates memo, which was introduced by Deputy Attorney General Sally Quillian Yates in September 2015, encourages prosecutors to go after individuals, as opposed to the overall corporation, and requires civil and criminal prosecutors to work together to bring civil and criminal charges (176 HCDR, 9/11/15).

Stolen Medicare Numbers

In addition to expanding the exclusion authority, the bill would crack down on the illegal sale and distribution of Medicare, Medicaid and Children's Health Insurance Plan identification or provider numbers. Illegally purchasing or selling more than two beneficiary or provider numbers would lead to a prison term of up to 15 years or a fine.

The bill would also require all Medicare Advantage plans to report any instances of fraud and abuse to the HHS within 60 days of identification.

The HHS would have to issue guidance to all MA plans within 90 days of the bill's enactment defining what constituted fraud and abuse.

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To contact the editor responsible for this story: Kendra Casey Plank at

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