New Guidance on Exclusion

For the first time in nearly 20 years the Office of Inspector General (OIG) of the Department of Health & Human Services has issued new guidance on the exercise of its authority to exclude health care providers from participating in federal health care programs, including Medicare, Medicaid, and Tri-Care.  Because of size of these programs, exclusion can be the equivalent of a financial death sentence.

The April 18 guidance is the first since December 1997 (see 62 Fed. Reg. 1128(b)(7)) and replaces that earlier guidance. On the day the new guidance was released Inspector General Daniel Levinson told an audience at the Health Care Compliance Association’s annual Compliance Institute that the new guidance gives the OIG more discretion in making exclusion decisions.

The guidance lists four broad categories of considerations that will go into the decision: Nature & Circumstances of Conduct, Conduct During Investigation, Significant Ameliorative Efforts, and History of Compliance.  Like the previous guidance, the new rules put a premium on self-disclosure, spontaneous corrective efforts, robust compliance programs, and a history of compliance.

One noteworthy feature of the new guidance is its focus on identification and punishment of individual wrongdoers by the health care entity in question.  Thus an entity will be graded down “if individuals with managerial or operational control” were the ones who “organized, led, or planned the unlawful activity.”  Correspondingly, an entity will be graded up if it has “taken appropriate disciplinary action against individuals responsible for the conduct.”

This emphasis on identifying and punishing individual wrongdoing is consistent with the focus of the so-called Yates Memo issued last September by Deputy Attorney General Sally Yates.

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