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April 22, 2016 Practice Points

HHS OIG Issues New Criteria for Exclusion from Federal Programs

Per the updated criteria, the OIG "evaluates healthcare fraud cases on a continuum," based on how likely a provider is to commit fraud again and the impact on patients.

By Eric W. Shannon

The Office of the Inspector General (OIG) released updated guidance on April 18 outlining when a person or company will be barred from participating in federal healthcare programs. The new exclusion guidance supersedes previous guidelines issued in 1997. Per the updated criteria, the OIG “evaluates healthcare fraud cases on a continuum,” based on how likely a provider is to commit fraud again and the impact on patients. Lower risk providers include those who self-disclose violations and cooperate with a subsequent investigation. Higher-risk providers may face heightened scrutiny, or in rare cases, Medicare exclusion.

When determining whether a provider is “high” or “low” risk for noncompliance, the OIG will consider a number of factors, including the adverse impact on individuals, leadership involvement, and cooperation during an investigation. Entities that initiate disciplinary actions against individuals responsible for misconduct and devote additional resources to compliance will be considered lower risk. A history of bad conduct and a refusal to enter into a corporate-integrity agreement, however, point to a company or person being higher-risk.

In its new guidance, the OIG focuses on permissive exclusion for conduct that is determined to constitute fraud, kickbacks, or another prohibited activity. The OIG explains in the guidance how an exclusion decision will be made when there is a finding of liability or where the Department of Justice settles a case brought under the False Claims Act. In such a case, the OIG will presume that some period of exclusion should be imposed against such a party. It also notes, however, that “this presumption in favor of exclusion is rebuttable in certain situations.”

According to one expert, the most significant change, however, is that the OIG has made clear that having a compliance program only puts a company in a neutral position, instead of giving said company bonus points. Not having a compliance program, however, will push an entity toward being considered high-risk.


Eric W. Shannon is with Debevoise & Plimpton LLP in New York, New York.

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