OIG Proposed Expansion of Civil Monetary Penalties and Exclusion Authority

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Recently, the Department of Health and Human Services, Office of Inspector General (the “OIG”) proposed an exclusion rule to amend the existing regulations (the “Exclusion Rule”) and a separate rule to expand the Civil Monetary Penalties (“CMP”), in which the OIG would be authorized to seek additional CMPs for specified violations, including submitting false or fraudulent claims or Anti-Kickback Statute (“AKS”) violations (the “CMP Rule”). This article provides a summary of the major provisions implicated for each proposed rule as well as details of several comments submitted on the rules.

Proposed Exclusion Authority Rule
The proposed Exclusion Rule would significantly expand the exclusion regulations to persons or entities that receive funds from federal health care programs. The Exclusion Rule provides for the following three new permissive exclusions:
·         Conviction of an offense in connection with obstruction of an audit;

·         Failure to supply payment information, including when ordering, referring for furnishing, or certifying the need for items or services; and

·         Making, or causing to be made, any false statement, omission, or misrepresentation of a material fact in applications to participate as a provider of services or supplier under a Federal health care program.
The Exclusion Rule further provides details for when and how the CMPs are applied, the method for calculating such payments, and the liability guidelines under the OIG.
Proposed Civil Monetary Penalties Update  
The proposed CMP Rule would codify five new penalties, assessments, and exclusions, as stated below:
·         Timely access to records not granted to the OIG;

·         Ordering or prescribing covered services while excluded from a Federal program;

·         Making false statements, omissions, or misrepresentations in an enrollment application;

·         Failure to report and return overpayments; and

·         Making or using a false record or statement that is material to a false or fraudulent claim.
These proposed changes further the government’s focus under the Affordable Care Act to strengthen fraud and abuse regulations and increase funding to deter fraud. For example, the proposed rule provides that CMPs may be assessed ranging from $10,000 per improper claim to $50,000 for each improper violation of the AKS. Further, the CMP Rule defaults to a penalty of $10,000 for each day for not timely reporting and returning an identified overpayment.
Organizations need to ensure that their compliance processes are in place for the finalization of these rules.  This includes adequately assessing processes and procedures to ensure your organization can effectively monitor any issues covered under these rules.
For additional information related to compliance concerns or these proposed rules, please feel free to contact Susan E. Ziel at (317) 238-6244  or Alex T. Krouse at (574) 485-2003.