January 16, 2017
On January 11, 2017, the Office of Inspector General (“OIG”) of the U.S. Department of Health and Human Services published a Final Rule on its website amending exclusion authority regulations.1 The new regulations took effect on Friday, January 13, 2017 and the full text is available here. While there were a number of revisions to existing exclusionary rules, the most notable changes were: (I) the establishment of a 10 year look-back period for misconduct leading to exclusions; (II) expansion of the permissive exclusion authority to include obstruction of audits; and (III) the creation of an early reinstatement policy for individuals who obtain new licenses or seek employment in non-licensed positions. A brief summary and analysis of these revisions is provided below.
10 year lookback period to examine conduct
The Final Rule caps the look-back period to examine wrongdoing at 10 years in direct response to provider concerns about an unlimited or indefinite look-back period. The OIG responded to comments, stating “[t]he 10-year period is grounded in the FCA period of limitations, provides certainty to the industry, and better protects the OIG’s ability to protect the programs and individuals from untrustworthy persons identified in FCA cases or otherwise.” Since the FCA is the Federal Government’s primary civil remedy for health care fraud, the majority of exclusions considered by the OIG are related to FCA cases. The longer limitations period is designed to allow the FCA cases to be fully litigated, allowing the OIG to consider exclusion after there is a judgment which will form the basis for the exclusion. The limitations period is also intended to alleviate the burden on the parties of litigating an exclusion action while the FCA litigation is pending.
Expansion of Permissive Exclusion Authority to Include Obstruction of Audits
The OIG has made it very clear that obstructing an audit is akin to obstructing an investigation and may form the basis of exclusion. In addition to potential criminal exposure for altering, falsifying, or destroying records under 18 U.S.C. § 1519, the OIG is now prepared to actively pursue exclusions for providers who obstruct or otherwise fail to fully comply with audits.
The OIG definitively stated that audits are considered formal in nature and that compliance with audit requests is “…integral to fraud prevention and detection by payors and law enforcement.” The OIG declined to provide a formal definition for “audit,” instead choosing to adopt the general meaning found in dictionaries. The implication is that any inspection for the purpose of verifying compliance with a Government program will fall under this provision.
The OIG adopted a process for early reinstatement to increase beneficiary access to care and promote employment of individuals who obtain a new license or seek employment in an unlicensed position. The OIG also shortened the amount of time it will require providers to overcome the presumption against reinstatement to a three year period. That’s down from the prior five-year time period that the presumption against reinstatement applied. An exception to this shortened time period applies to instances where a licensing board took action leading to the exclusion and assigned a license revocation or exclusion that was greater than three years. In those cases, the individual may not seek reinstatement until the term set by the licensing board has lapsed.
Early reinstatement will not be available to individuals who have lost their license due to patient abuse or neglect. The OIG has broad discretion when considering applications for early reinstatement and will consider a wide range of investigations, even those that do not directly impact Federal health care programs, including investigations by private insurers as part of the OIG’s assessment of a provider’s trustworthiness.
The changes highlighted above are only a few of the policies that took effect January 13, 2017. The new Final Rule also increased the financial loss aggravating factors to at least $15,000 (up from $5,000), but in some instances may be increased to $50,000. Providers should review the full text of OIG’s new rules to gain a firm understanding of the criteria the OIG considers in determining whether to pursue an exclusion. If you have any questions about OIG’s new exclusion rules or need assistance implementing changes to your organization’s compliance program, please contact Mary Malone.
1. Department of Health and Human Services, 82 Fed. Reg. 50, 4100-4118 (January 12, 2017)(to be codified at 42 C.F.R. §§ 1000, 1001, 1002, and 1006).
The information contained in this advisory is for general educational purposes only. It is presented with the understanding that neither the author nor Hancock, Daniel & Johnson, P.C., PC, is offering any legal or other professional services. Since the law in many areas is complex and can change rapidly, this information may not apply to a given factual situation and can become outdated. Individuals desiring legal advice should consult legal counsel for up-to-date and fact-specific advice. Under no circumstances will the author or Hancock, Daniel & Johnson, P.C., PC be liable for any direct, indirect, or consequential damages resulting from the use of this material.