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OIG Proposes Significant Changes to Provider Exclusion Authority

Last week, the Office of the Inspector General (OIG) released a Proposed Rule that changes its provider exclusion authority and significantly alters certain provider exclusion procedures and the substantive bases for exclusion from a Federal healthcare program. The Proposed Rule was released in conjunction with another Proposed Rule on the same date regarding Civil Monetary Penalties (CMPs). Comments regarding the rules are due on July 8.

§ 1128 of the Social Security Act grants the OIG authority to exclude certain individuals and entities from participation in Federal healthcare programs. If the OIG determines that an individual or entity has engaged in certain prohibited conduct, it must ban such a person or entity from participation in Federal healthcare programs for a statutorily mandated five year minimum period. However, many bases for exclusion are merely “permissive”, where the OIG retains discretion in deciding whether to exclude an individual or entity.

The Proposed Rule provides the OIG with three new bases upon which they may permissively exclude a provider or entity: the failure of ordering, referring, or prescribing providers to furnish payment information under Section 1128(b)(11); knowingly making, or causing to be made, false statements, omissions, or misstatements of material fact on a federal health care program application under Section 1128(b)(16); or convictions in connection with obstruction of a healthcare audit under Section 1128(b)(2).

The Proposed Rule also provides the OIG with the power to issue testimonial subpoenas during exclusion investigations – a power that the OIG previously lacked. The Proposed Rule would give any member of the OIG staff the power to compel testimony of witnesses and production of evidence as it relates to an exclusion action. For certain permissive exclusions that do not require a conviction, this expanded authority will give the OIG the ability to more effectively investigate alleged improper conduct.

Finally, in the Proposed Rule, the OIG takes the position that there is no statute of limitations for its actions pursuant to § 1128(b)(7) (false claims). Usually, governmental actions under the False Claims Act are subject to a 10 year statute of limitations period that begins on the date of the occurrence. Under the Proposed Rule, OIG provider exclusion actions arising from False Claims Act proceedings could go beyond 10 years. However, the OIG also recognizes that the age of the claim will be one factor in weighing the trustworthiness of the individual or entity.

The OIG also has issued a number of modifications to exclusion proceedings:

  • The OIG has adjusted its aggravating and mitigating factors for higher dollar amounts of government losses;
  • The OIG seeks to provide an alternate mechanism for providers who have been excluded on the basis of actions against their licenses – one of the more common bases for exclusion – to regain the right to participate in Federal healthcare programs if they have obtained another license from a different board;
  • The OIG seeks to expand the rights of parties to make an oral argument prior to the imposition of an exclusion under Section 1128(b)(16);
  • Lastly, the OIG seeks to streamline many of its definitions under the exclusion regulations in an effort to reduce confusion.

Wachler & Associates’ health law attorneys will continue to monitor any further developments regarding the Proposed Rule and all other federal and state regulations. If you have any questions about how your entity will be impacted by the final rule or any other regulation, please contact an experienced health care attorney at Wachler & Associates via phone at 248-544-0888 or via email at wapc@wachler.com.