OIG Final Rule Takes Aim At Clarity & Transparency
On January 12, 2017, the Department of Health and Human Services Office of the Inspector General (“OIG”) published a final rule amending the regulations pertaining to the OIG’s exclusion authority in regard to the following issues: incorporating recent statutory changes; early reinstatement provisions; recent policy changes; and clarifying existing regulatory provisions. The OIG’s stated purpose for the final rule is the promotion of transparency, and the office believes the revisions within the final rule will have little to no impact on the majority of providers and programs. The final rule will take effect on February 13, 2017.
The OIG gained the authority to exclude individuals and entities from participation in federal health care programs (the “exclusion authority”) through the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. The final rule is a result of proposed changes dating back to 2014, seeking to clarify the OIG’s further expanded exclusion authority provided by the Affordable Care Act (“ACA”).
The final rule adds, removes, and changes the section locations of several definitions within 42 C.F.R. § 1000 and the related sections in an effort to clarify the scope of individuals and entities subject to the OIG’s oversight. Notably, the changes made to 42 C.F.R. § 1001 expand, per the ACA, the OIG’s authority to reach individuals and entities convicted for interference or obstruction of investigations and audits related to funds received from federal health care programs. They also broaden OIG’s reach to include those who refer patients or certify item or service needs even if they do not actually provide the items or services.
The new oversight of the OIG moves beyond that of just claim submission and now includes the right to consider materials obtained from various entities. The factors the OIG may consider in determining the length of exclusion also need not be in the form of any final judgment or conclusive statement regarding the individual or entity that committed any wrongdoing. The final rule also codifies a compromise made in determining the OIG’s statute of limitations on its ability to exclude, settling on a ten (10) year limitation from the time the conduct occurred for statutory violations.
In considering waivers from health care program administrators, the final rule now allows the OIG to consider requests for waivers from both federal and state health care program administrators. However, the OIG will only consider the waiver once the administrator determines the individual or entity is the sole provider of essential services in a given community and the exclusion would impose a hardship on beneficiaries of that program. Further changes implemented by the final rule now allow the OIG to exclude providers from federal health care programs through some counterintuitive mechanisms, such as Medicaid agencies’ right to refuse to enter an agreement based on criminal convictions stemming from misuse of federal health care programs and OIG’s ability to issue testimonial subpoenas in investigating potential cases of exclusion.
Though it may seem that the final rule is a further broadening of the scope of OIG’s authority, it also provides those subject to OIG authority with added Due Process rights that were not previously inherent to the exclusion process. For example, 42 C.F.R. §§ 1001.2001 and 3004(a)(2) provide a right to request an opportunity to present oral argument to an OIG official (unless exclusion is based on the False Claims Act or fraud) and the right to request early reinstatement, respectively.
Ultimately, although the changes implemented under the new final rule are largely technical and subtle, they both expand and solidify OIG authority to exclude providers. However, the final rule also helps to clarify the application of some provisions while adding a few safeguards to those falling under OIG oversight and authority.
The final rule can be found by clicking here: OIG Final Rule