OIG Proposes Rules to Expand Exclusion and CMP Authorities

Over the last several years, the Federal Governments enforcement efforts have continued to bear fruit. On February 26, 2014, the Departments of Justice (DOJ) and Health and Human Services (HHS) announced that the "government’s health care fraud prevention and enforcement efforts recovered a record-breaking $4.3 billion in taxpayer dollars in Fiscal Year (FY) 2013, up from $4.2 billion in FY 2012."[1] Further, "[o]ver the last five years, the administration’s enforcement efforts have recovered $19.2 billion, up from $9.4 billion over the prior five-year period.  Since the inception of the program in 1997, the HCFAC Program has returned more than $25.9 billion to the Medicare Trust Funds and treasury."[2]

The Affordable Care Act (ACA) greatly expanded the OIGs authority to exclude individuals and entities from the Federal health care programs and expanded the grounds for which civil monetary penalties (CMPs) could be issued. The OIG published proposed rules on each of May 9 and May 12 to incorporate these changes.

On May 9, 2014, the HHS's Office of Inspector General (OIG) published a proposed rule that would significantly expand the exclusion regulations applicable to individuals or entities receiving funds, directly or indirectly, from federal health care programs. [3] "OIG’s exclusion authorities are intended to protect the Federal health care programs and their beneficiaries from untrustworthy health care providers, i.e., individuals and entities who pose a risk to program beneficiaries or to the integrity of these programs." [4] The OIG's authorities include both mandatory exclusions (section 1128(a) of the Act) and permissive exclusions (section 1128(b) of the Act).

In this Proposed Rule, the OIG incorporates the changes from the ACA and the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). The ACA expanded the OIG’s authority for exclusion and established a new authority at Section 1128(f)(4) of the Act for the OIG to issue testimonial subpoenas in investigations of exclusion cases. In this Proposed Rule, the OIG incorporates these statutory changes, revises certain definitions applicable to exclusions, proposes early reinstatement procedures for individuals excluded as a result of loosing their licenses, and provides for a number of other proposed policy changes related to exclusions.

Comments on the May 9 Proposed Rule are due July 8, 2014.

Separately, on May 12, the OIG published a proposed rule to implement the expanded CMP authorities set forth in the ACA.[5] The ACA provided for CMPs, assessments, and exclusions for:

• failure to grant OIG timely access to records;
  
• ordering or prescribing while excluded;
  
• making false statements, omissions, or misrepresentations in an enrollment application;
  
• failure to report and return an overpayment; and
  
• making or using a false record or statement that is material to a false or fraudulent claim.
  

This Proposed Rule addresses a number of issues, including (1) when and how these CMPs are applied, (2) an alternate methodology for calculating the penalties and assessments for employing excluded individuals in positions in which the individuals do not directly bill the Federal health care programs for furnishing items or services, and (3) the liability guidelines under other OIG authorities, including the Civil Monetary Penalties Law (CMPL), the Emergency Medical Treatment and Labor Act (EMTALA), section 1140 of the Act for conduct involving electronic mail, Internet, and telemarketing solicitations, and section1927 of the Act for late or incompletereporting of drug-pricing information.

Comments on the May 12 Proposed Rule are due by July 11, 2014.

The ACA also made some enforcement easier because it changed the scienter standard with respect to the Anti-Kickback Statute. Under this change a provider does not need to have actual knowledge of the Anti-Kickback section or specific intent to commit a violation of the Anti-Kickback Section to find intent. This change will make it easier for the government to prosecute health care fraud cases.

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[1] Press Release, Departments of Justice and Health and Human Services Announce Record-Breaking Recoveries Resulting from Joint Efforts to Combat Health Care Fraud, HHS (Feb. 26, 2014), https://www.hhs.gov/news/press/2014pres/02/20140226a.html.
[2] Id.
[3] HHS OIG, Medicare and State Health Care Programs: Fraud and Abuse; Revisions to the Office of Inspector General’s Exclusion Authorities, 79 FR 26810 (May 9, 2014), https://www.gpo.gov/fdsys/pkg/FR-2014-05-09/pdf/2014-10390.pdf.
[4] Id.
[5] HHS OIG, Medicare and State Health Care Programs: Fraud and Abuse; Revisions to the Office of Inspector General’s Civil Monetary Penalty Rules, 79 FR 27080 (May 12, 2014), https://www.gpo.gov/fdsys/pkg/FR-2014-05-09/pdf/2014-10390.pdf.
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Posted by Tatiana Melnik on May 26, 2014

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