On April 18, 2016, the Department of Health and Human Services Office of Inspector General (“OIG”) issued an updated version of its Criteria for Implementing Section 1128(b)(7) Exclusion Authority, thereby replacing its 1997 version.

By way of background, the OIG must, pursuant to statute, exclude from participation in all federal health care programs (including Medicare and Medicaid) any individual or entity convicted of: (1) fraud and other offenses related to Medicare/Medicaid; (2) patient abuse or neglect; (3) a felony; or (4) any felony convictions for the unlawful manufacture, distribution, prescription, or dispensing of controlled substances.  Moreover, the statute provides the OIG with discretionary authority to exclude from federal health care programs individuals or entities for misdemeanor convictions, suspended or revoked licenses, the provision of unnecessary or substandard care, the submission of false claims, or for engaging in an unlawful kickback arrangement, among other conduct.

As noted by the OIG in its updated policy, “[t]he question of whether to exercise exclusion authority under section 1128(b)(7) often arises in the context of False Claims Act matters.” However, in a departure from the 1997 version, the OIG established a rebuttable presumption “that some period of exclusion should be imposed against a person who has defrauded Medicare or any other Federal health care program.”  The OIG also established certain factors (albeit non-binding) that may be used in order to rebut this presumption in certain circumstances:

  1. The nature and circumstances of the conduct, including whether the conduct at issue adversely impacted individuals and the financial loss to the federal health care program at issue;
  2. The individual or entity’s conduct during the government’s investigation (i.e., whether the individual or entity fully cooperated with the government);
  3. Significant ameliorative efforts such as disciplinary actions and new compliance initiatives; and
  4. The individual or entity’s history of compliance.

Additionally, the OIG reminded providers that the agency “evaluates health care fraud cases on a continuum” and that “resolution of OIG’s exclusion authorities is based on OIG’s assessment of future risk to the Federal health care programs.”  As such, the OIG emphasized that exclusion is often not necessary where the appropriate self-disclosures are made or where the provider agrees to establish a compliance program under a Corporate Integrity Agreement.  Still, the OIG further noted that it also expects providers to put significant resources toward compliance programs and that providers will receive no additional “credit” just for having a compliance program in place.  Moreover, if no compliance program exists, the OIG will allocate a higher risk factor and most likely move the provider closer to the “exclusion” end of the compliance risk spectrum.

The attorneys at Chilivis Grubman represent healthcare providers in connection all types of fraud and compliance matters, including government investigations, exclusion proceedings, and self-disclosure.  For more information, please contact us at (404) 262-6505 or sgrubman@cglawfirm.com.