OIG Proposed Rule Would Broaden Scope Of Exclusion Authority, Allow for Subpoenas

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By James Swann  

May 8 — A proposed rule (RIN 0936-AA05) released by the Department of Health and Human Services Office of Inspector General May 8 would broaden the agency's authority to exclude individuals and entities from participating in federal health-care programs, as well as grant it the authority to issue subpoenas when pursuing potential exclusions.

The enhanced exclusion authority comes courtesy of the Affordable Care Act and would allow the OIG to impose exclusions on individuals for:

  •  convictions associated with the obstruction of an audit;
  •  failure to supply payment information to either Medicare or a state health-care program; and
  •  making, or causing to be made, false statements on a provider application for participation in a federal health-care program.

    The proposed rule will be published in the Federal Register May 9. Comments are due July 8.

    Section 1128 of the Social Security Act provides the OIG with two categories of exclusion authority: mandatory and permissive.

    Mandatory exclusions are required for “any individual or entity convicted of a ‘program-related' crime,” according to the proposed rule, such as patient abuse or the diversion of controlled substances. Mandatory exclusions last at least five years.

    The OIG has more discretion when it comes to permissive exclusions, which have no five-year minimum. Permissive exclusions can be based on previous law enforcement convictions or actions taken by other regulatory agencies, or can be the result of OIG investigations.

    Permissive Exclusions

    The proposed rule would implement Section 6406(c) of the ACA, allowing the OIG to exclude “any individual or entity furnishing, ordering, referring for furnishing, or certifying the need for items or services” for which payment can be made by Medicare or Medicaid if they fail to provide payment information.

    The OIG's permissive exclusion authority based on failing to supply payment information applies only to individuals or entities who just furnish the items or services.

    The proposed rule also would implement Section 6402(d) of the ACA, which would expand the permissive exclusion authority to “any individual or entity that knowingly makes or causes to be made any false statement, omission, or misrepresentation of a material fact in any application, agreement, bid, or contract to participate or enroll as a provider of services or supplier under a Federal health care program.”

    The OIG's decision on whether to impose an exclusion for a false statement would be based on information from a number of sources, including the Centers for Medicare & Medicaid Services, state Medicaid agencies and contractors, the proposed rule said.

    The length of the exclusion would be based on “what the repercussions of the false statement are and whether the individual or entity has a documented history of criminal, civil, or administrative wrongdoing,” the proposed rule said.

    Audit Offenses

    Before passage of the ACA, the OIG was allowed to exclude individuals or entities who were convicted of obstructing investigations into criminal offenses within federal health-care programs, but not individuals or entities convicted of obstructing audits.

    However, Section 6408(c) of the ACA broadened the OIG's exclusion authority, allowing for the exclusion of individuals or entities convicted of obstructing an audit into potential criminal offenses affecting federal health-care programs.

    In addition to implementing Section 6408(c), the proposed rule would “allow OIG to increase the period of exclusion if the acts, or similar acts, that resulted in the obstruction conviction caused a financial loss of $15,000 or more.”

    Mitigating Factors

    The proposed rule includes several provisions mitigating potential OIG exclusions.

    For example, the proposed rule would limit the individuals eligible for exclusion to “current health care practitioners, providers, suppliers, those who furnish items or services, owners, managing employees, or those who are employed in any capacity in the health care industry,” or individuals who formerly held such positions at the time of action necessitating exclusion.

    The proposed rule would revise how the OIG uses financial losses to determine the length of an exclusion.

    Current regulations “list, as an aggravating factor, whether the acts resulting in the conviction, or similar acts, caused or were intended to cause, a financial loss of $5,000 or more,” according to the proposed rule.

    Under the proposed rule, the aggravating factor threshold would be increased to $15,000, which the OIG said “is an appropriate threshold that is consistent with [the] rationale behind the original amount and provides a realistic marker for determining whether someone is untrustworthy.”

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

    To contact the editor responsible for this story: Ward Pimley at wpimley@bna.com

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