Kusserow on Compliance: OIG expanded exclusion authorities go into effect

On February 13, 2017, the HHS Office of Inspector General (OIG) Final rule amending the regulations related to its exclusion authority goes into effect. It incorporates recent statutory changes, early reinstatement provisions, and recent policy changes, and clarifies existing regulatory provisions. It is the most substantial revision to the exclusion regulations in many years and reflects changes made by the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) in 2010 and the Medicare Modernization Act (MMA) in 2003, as well as informal practices that the OIG has now codified in regulations. Most of the changes in the final rule are largely technical in nature; however they significantly expand and solidify the OIG’s authority to exclude providers.

The scope of OIG oversight now will move beyond claims submission based on the ACA’s permissive exclusion authority over an individual or entity that knowingly makes or causes to be made any false statement, omission, or misrepresentation of 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. Under the new rules, the OIG’s authority has been extended to exclude based on the following:

  • conviction relating to obstruction of an investigation or audit;
  • failure to provide payment information by individuals who “order, refer for furnishing, or certify the need for” items or services paid for by Medicare or state health care programs;
  • those who refer patients or certify the need for items or services, even if they do not provide the items or services; and
  • making false statements or misrepresenting material facts in applications to participate as a provider or supplier under a federal health care program.

The OIG also will now consider materials obtained from various entities, including CMS, state Medicaid agencies, fiscal agents or contractors, private insurance companies, state or local licensing or certification authorities, and law enforcement. This information may be considered in determining the length of exclusion.  Also, a number of technical changes were made regarding key terms, such as replacing the language “who submit claims to” with “who request or receive payment from” in the definitions of “directly” and “indirectly,” thereby clarifying the scope of individuals and entities subject to oversight by the OIG.

The OIG may impose exclusion up to a 10-year period from the time the conduct occurred. It may consider a request for a waiver from a federal health care program administrator, as opposed to only waivers submitted by state health care program administrators. It also makes several changes to the aggravating and mitigating factors that the agency considers in determining whether to increase the length of exclusion above the minimum required. Mitigating factors are only considered if OIG has established one or more aggravating factors. Other changes include:

  • updating the dollar amounts for aggravating and mitigating factors that consider the financial loss to federal health care programs as a result of the misconduct from $15,000 to $50,000;
  • reworking the existing aggravating factors regarding other offenses to include considering adverse actions based on offenses separate from those forming the basis of the exclusion and adverse actions based on the same offenses; and
  • removing the mitigating factor related to availability of alternative sources of the type of health care items or services furnished by the person.