View Page As PDF
Share Button
Tweet Button
On April 18, 2016, the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS) updated its criteria for exercising its permissive exclusion authority against individuals and entities involved in false claims, kickbacks or other fraud and abuse violations.

Section 1128(b)(7) of the Social Security Act (42 USC 1320a-7) allows the OIG to exclude individuals and entities from participating in any federal health care programs (e.g., Medicare, Medicaid, TRICARE, and CHIP) on various grounds relating to fraud and abuse. Federal health care programs will not pay for any items or services that are furnished, ordered or prescribed by an excluded individual or entity. Furthermore, a health care provider that directly or indirectly receives payment from any federal health care program will be precluded from employing an excluded individual except in limited circumstances. This policy statement revises nonbinding criteria from the OIG’s 1997 policy statement.

The OIG can pursue various administrative options when settling a health care fraud case, including exclusion or milder action, such as a corporate integrity agreement (CIA) or heightened scrutiny, or taking no action. The policy statement lists factors that the OIG considers in determining where an individual or entity falls on the compliance risk spectrum, and therefore whether to pursue exclusion or more lenient alternatives. At the highest risk level, the OIG will pursue exclusion. The policy statement divides the factors into four broad categories:
  • Nature and circumstances of the conduct
  • The person’s conduct (e.g., level of cooperation or obstruction) during the investigation
  • Significant efforts to ameliorate the impact of the conduct, such as disciplinary action, training, and devotion of resources to compliance
  • Compliance history
The OIG expects each health care provider to implement a compliance program incorporating the U.S. Sentencing Commission Guidelines Manual’s seven elements (pillars) of an effective compliance program. Under this policy statement, the existence of an effective compliance program will not affect the risk assessment (effective compliance programs are expected, so no bonus points for having one). Significantly, the absence of a compliance program that incorporates the seven elements of an effective compliance program will heighten the risk level and, therefore, subject a provider to a higher risk of being excluded. Moreover, an effective compliance program would also be expected to significantly decrease the risk level on various other factors.
This policy statement provides another compelling reminder of the need for all health care providers to implement effective compliance programs incorporating the seven elements of compliance:
  1. Designation of a compliance officer
  2. Development and distribution of compliance practice standards
  3. Internal monitoring and auditing
  4. Education and training
  5. Appropriate responses and corrective action for detected offenses
  6. Open lines of communication
  7. Enforcement of disciplinary standards through well-publicized guidelines
Health care providers should regularly review their compliance programs to ensure that they stay up-to-date and effectively implement all seven elements in a manner appropriate for the provider’s specific circumstances.

While a compliance program is not a “get out of jail free” card, an effective compliance program – or absence thereof – can go a long way toward determining how severe or lenient the OIG will be in applying its exclusion authority and alternatives.

For additional information or if you have questions concerning the OIG's updated criteria for exclusion from federal health care programs, please contact the attorney listed below.
COMMENT
+