Kusserow on Compliance: More on the new OIG guidance on exclusions

The HHS Office of Inspector General (OIG) has authority under the Social Security Act to exclude any individual or entity from participation in the federal health care programs for engaging in prohibited conduct. Those programs may not pay for any items or services furnished, ordered, or prescribed by an excluded party. Going back to 1997, the OIG published a policy statement with non-binding criteria to be used by the OIG in assessing whether to impose exclusion under its authorities and has used this in evaluating whether to impose exclusion ever since. This policy has also been used as an OIG authority in the creation of Corporate Integrity Agreements (CIAs), or the use of some other approach to mitigate risks of future misconduct with OIG oversight. The OIG has now published a revised superseding policy.

The OIG position in favor of sanctions is rooted in the idea that some period of exclusion should be imposed against a person who has defrauded Medicare or any other federal health care program. The new OIG guidance document sets forth circumstances in which this presumption may be rebutted and the non-binding factors that the OIG will use to make such a determination, as well as describing how they will evaluate risk to the federal health care programs in using its other available remedies. The OIG outlined a “risk spectrum” range of options when settling a civil or administrative health care fraud case that includes the following remedies: (1) exclusion; (2) heightened scrutiny (e.g., implement unilateral monitoring); (3) integrity obligations; (4) take no further action; or (5) in the case of a good faith and cooperative self-disclosure, release exclusion with no integrity obligations.

The OIG often concludes that exclusion is not necessary if there is agreement to appropriate integrity obligations, in exchange for a release of exclusion, such as with a CIA. The CIAs are designed to strengthen and promote an entities’ compliance program so that future issues can be prevented or identified, reported, and corrected. Integrity obligations also enhance the OIG’s oversight of the entity. Failure to agree to terms of a CIA may result in pursuing exclusion or the exercise of other administrative actions, as deemed appropriate to “unilaterally monitor” compliance with federal health care programs. If the OIG determines a party presents a relatively low risk to federal health care programs, neither exclusion nor integrity obligations will be deemed necessary. These situations include the absence of egregious conduct, such as patient harm or intentional fraud, relatively low financial harm, and where a successor owner, after the misconduct, is resolving the matter.

There are two limited circumstances in which OIG will usually give a person a release of exclusion without requiring integrity obligations: (1) when the person self- discloses the fraudulent conduct, cooperatively and in good faith, to the OIG; or (2) when the person agrees to robust integrity obligations with a state or the Department of Justice (DOJ) and OIG determines these obligations are sufficient to protect the federal health care programs.

It is worthwhile to review the revised exclusion policy statement and evaluate how your compliance programs, self-disclosure protocols, and other practices measure against the standards described by the OIG.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2016 Strategic Management Services, LLC. Published with permission.

 

 

Kusserow on Compliance: New program exclusion guidance issued by the OIG

On April 18, 2016, the HHS Office of Inspector General (OIG) announced at the Health Care Compliance Association (HCCA) conference in Las Vegas that it has issued new guidance, superseding that issued in 1997, regarding the process followed in determining whether a health care entity or practitioner should be excluded from participation in federal health care programs. The OIG advises that it evaluates health care fraud cases “on a continuum . . . of future risk to the federal health care programs.” Cases demonstrating high risk will result in program exclusion and cases with low future risk may result in a decision not to exclude. The OIG stated that “in the absence of egregious conduct such as patient harm or intentional fraud, relatively low financial harm weighs in favor of not requiring integrity obligations” through a Corporate Integrity Agreement (CIA) or a program exclusion. The OIG has provided advice on the steps that can be taken to mitigate enforcement action through program exclusion. It also “flags” the critical factors the OIG will use in assessing a provider’s or practitioner’s future risk to federal health care programs, as well as whether program exclusion to address high risk is necessary.

Tom Herrmann, JD, who served over 20 years in the Office of Counsel to the Inspector General, explained that “The authorities referred to in this guidance is grounded in law and regulations that were delegated to the OIG to exclude entities and individuals from participation in Medicare, Medicaid, and other federal health care programs. To fully appreciate the significance of this guidance, it should be read in conjunction with another OIG Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs, issued in 2013.”

Exclusions are of two types, “mandatory” and “permissive or discretionary.” It is mandatory under the law, if there is a conviction for a program-related crime or patient abuse/neglect. In the new transmittal, the OIG focused on permissive exclusions for conduct that is determined to constitute fraud, kickbacks, or another prohibited activity and sets forth the “non-binding criteria the OIG intends to use in evaluating exclusion. The OIG explains in the transmittal how a decision will be made on the appropriateness of program exclusion when there is a finding of liability or where the Department of Justice settles a case brought under the False Claims Act (FCA). In such a case, the OIG will presume that some period of exclusion should be imposed against such a party. It also notes, “this presumption in favor of exclusion is rebuttable in certain situations” and in the new guidance “sets forth circumstances in which the presumption may be rebutted and the non-binding factors that OIG will use to make such a determination.”

Often, upon resolution of a FCA case, the OIG and the defendant enter a CIA, where an entity or individual agrees to assume certain “integrity obligations in exchange for a release of OIG’s . . . exclusion authority.” Herrmann notes, “It is the OIG view that a CIA enhances their oversight and promotes the entity’s compliance program through integrity obligations that mitigate future risks. Entities who fail to enter into a CIA represent a continuing risk that necessitates their using other tools to mitigate compliance risks.”

The OIG will decide whether or not to impose program exclusion, based on its evaluation of the following factors:

  • nature and circumstances of the conduct at issue, including adverse impact on individuals and financial loss;
  • leadership role;
  • history of prior fraudulent conduct;
  • conduct during the investigation;
  • significant ameliorative efforts; and
  • history of compliance.

Herrmann finds it noteworthy that the OIG will usually give a release a person from exclusion without requiring a CIA when the person self-discloses the fraudulent conduct to the agency, and agrees to “robust integrity obligations” that the OIG determines sufficient to protect the federal health care programs. The new guidance should help those facing potential legal exposure under the FCA to decide on appropriateness of self-disclosing improper conduct involving federal health care programs. The OIG has provided transparency concerning their exclusion decision-making process. It also sends a message that encourages voluntary compliance efforts and the adoption of remedial measures in cases where there is legal exposure.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2016 Strategic Management Services, LLC. Published with permission.