Proposed Rules Expand OIG’s Exclusion Authority and Revise Civil Monetary Penalties

In May, the Department of Health and Human Services Office of Inspector General (OIG) proposed changes to the OIG’s exclusion authority and ability to impose civil monetary penalties (CMPs).  The proposed rules codify the changes made by the Affordable Care Act, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, and other statutory authorities.

The first rule proposes to expand the OIG’s exclusion authority in accordance with the Affordable Care Act (ACA).  79 Fed. Reg. 26810.  The comment period for this proposed rule ends July 8.  The OIG proposes that the following new conduct would subject a person to permissive exclusion:

• conviction of an offense in connection with obstructing an audit;
• failing to supply payment information; and/or
• making or causing to be made any false statement, omission, or misrepresentation of a material fact on an application to a federal health care program.

The OIG’s proposed rule makes several additional changes, including the following:

• an early reinstatement process for certain individuals who lost their health care licenses; and
• expanding the list of individuals and entities entitled to present oral argument to the OIG before being excluded from federal health care programs.

The proposed rule also clarifies that there is no statute of limitation period for exclusions.

The second proposed rule expands the OIG’s ability to assess CMPs.  79 Fed. Reg. 27080.  The comment period for this proposed rule ends July 11.  The proposed rule adds penalties for the following conduct:

• failing to grant OIG timely access to records following a reasonable request;
• ordering or prescribing while excluded from federal health care programs when the excluded person knew or should know the excluded item or service may be paid for by a federal health care program;
• making false statements, omissions, or misrepresentations in an enrollment or similar application to participate in a federal health care program;
• failing to report and return a known overpayment; and/or
• making or using a false record or statement that is material to a false or fraudulent claim.

The OIG is soliciting comments about its proposed clarification of the penalty for failing to report and return a known overpayment.  Under the ACA, overpayments must be reported and returned by the later of 60 days after the date the overpayment was identified or the date any corresponding cost report is due, if applicable.

The new CMP provision does not have a specific penalty amount, but uses the default penalty of up to $10,000 for each item and service.  The OIG has proposed a penalty of up to $10,000 for each day a person fails to report and return a known overpayment by the deadline.  Noting that Congress did not specify a per day penalty, the OIG also has requested comments on whether to interpret the $10,000 penalty for each item and service as pertaining to each claim for which the provider or supplier identified an overpayment.

Health care providers should continue to monitor the OIG’s rulemaking in the fraud and abuse area as the OIG continues to implement changes as a result of the ACA.