OIG has issued two proposed rules that would expand the agency’s ability to impose certain sanctions on entities and individuals involved with Federal health care programs.  OIG’s first proposed rule—published in the Federal Register on May 9, 2014—expands OIG’s authority to exclude individuals and entities from participating in Federal health care programs and grants the agency authority to issue subpoenas when pursuing potential exclusions (the “Proposed Exclusion Rule”).  OIG’s second proposed rule—published in the Federal Register today—broadens OIG’s Civil Monetary Penalties (CMP) authority by, among other things, setting out additional grounds for the imposition of CMP sanctions (the “Proposed CMP Rule”).  Comments to the Proposed Exclusion Rule are due on or before July 8, 2014, and comments to the Proposed CMP Rule are due on or before July 11, 2014. 

The Proposed Exclusion Rule would update OIG’s regulations to implement various provisions within the Affordable Care Act (ACA) and Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) related to OIG’s exclusion authority.  Under the proposed rule, the following conduct would be added to OIG’s permissive exclusion authority:

• convictions related to obstruction of an audit (consistent with Section 6408(c) of ACA), adding that OIG could “increase the period of exclusion if the acts, or similar acts, that resulted in the obstruction conviction caused a financial loss of $15,000 or more”;

• failure to supply payment information (consistent with Section 6406(c) of ACA), which would only apply to individuals or entities who furnish the items or services; and

• making, or causing to be made, any false statement, omission, or misrepresentation of a material fact in an application to participate in a Federal health care program.

The Proposed Exclusion Rule also includes a proposed modification to the reinstatement rules for individuals excluded as a result of losing their licenses, which would allow them to rejoin the programs earlier, when appropriate.

Under the Proposed CMP Rule, the following new conduct would give rise to OIG’s assessment of CMPs:

• failing to provide OIG access to requested records in a timely fashion;

• ordering or prescribing an item or service by an excluded person when that person knows or should know that the item or service may be paid for by a Federal health care program;

• making false statements, omissions, or misrepresentations in connection with an enrollment application to participate in a Federal health care program;

• failing to report and return a known overpayment; and

• making or using a false record or statement material to a false or fraudulent claim.

The Proposed CMP Rule also sets out five “primary factors” OIG will consider in determining the degree of CMP sanctions.  The primary factors are: (1) the nature and circumstances of the at-issue violation; (2) the actor’s degree of culpability; (3) prior offense history; (4) other wrongful conduct; and (5) “other matters justice may require.”  OIG notes, however, that these factors are “illustrative” rather than a complete set of considerations.  OIG also proposes increasing the claims-mitigating factor from $1,000 to $5,000, which would make “[c]onduct resulting in more than $5,000 in federal health care program loss . . . an indication of more serious conduct.” 

Access to the Proposed Exclusion Rule is available here.  Access to the Proposed CMP Rule is available here.

Reporters, Juliet M. McBride, Houston, +1 713 276 7448, jmcbride@kslaw.com and Greg Sicilian, Atlanta, +1 404 572 2810, gsicilian@kslaw.com.