In OIG Advisory Opinion No.19-05, the Department of Health and Human Services Office of the Inspector General (OIG) concluded that it would not impose sanctions against a requestor under the civil monetary provision of the Social Security Act (SSA) that prohibits certain persons from contracting with individuals or entities known to be excluded from participation in Federal health care programs (FHCP) for items or services that will be paid by the FHCPs. The requestor in the proposed arrangement reviewed by the OIG is a community health center that receives Federal grant funding from the Health Resources and Services Administration (HRSA) and that has multiple sites enrolled in the Medicare Program as Federally Qualified Health Centers (FQHC). The proposed arrangement includes the community health center purchasing the medical clinic and surrounding real estate located at one of its FQHC sites from a company that is owned and managed, in part, by an excluded person. An independent appraisal obtained by the requestor and company would determine the purchase price to be paid by the requestor.

In its analysis, the OIG considered the following factors:

• The transaction did not include the provision of items or services that would be reimbursed by a FHCP as the community health center certified that the purchase of the property would not be included in any FHCP claim or request for payment from a FHCP.

• The transaction would not involve any HRSA grant funds or any financing from the company or excluded person.

• The community health center will be the sole titleholder of the property after the purchase and there would be no ongoing relationship in any form with the excluded person or company.

This Advisory Opinion serves as an important reminder for organizations to review and update their policies, procedures and processes for screening individuals and entities to ensure compliance with laws. Additional OIG guidance related to excluded persons is available here.

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