[Federal Register Volume 62, Number 247 (Wednesday, December 24, 1997)]
[Notices]
[Pages 67392-67394]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-33524]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of Inspector General
Criteria for Implementing Permissive Exclusion Authority Under
Section 1128(b)(7) of the Social Security Act
AGENCY: Office of Inspector General (OIG), HHS.
ACTION: Notice.
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SUMMARY: This notice sets forth the non-binding guidelines, to be used
by the OIG in assessing whether to impose a permissive exclusion in
accordance with section 1128(b)(7) of the Social Security Act. These
guidelines identify specific factors with regard to whether an
individual's or entity's continued participation in the Medicare,
Medicaid and other Federal health care programs will pose a risk to the
programs or program beneficiaries, and explain how these factors would
be used by the OIG to assess a permissive exclusion decision.
FOR FURTHER INFORMATION CONTACT:
Joel Schaer, Office of Counsel to the Inspector General (202) 619-0089.
SUPPLEMENTARY INFORMATION:
I. Background
Purpose and Rationale
Section 1128(b)(7) of the Social Security Act (the Act) authorizes
the Secretary, and by delegation the Inspector General, to exclude a
provider from Medicare, Medicaid and the other Federal health care
programs for engaging in conduct described in sections 1128A and 1128B
of the Act. These latter provisions establish administrative and
criminal sanctions, respectively, against individuals and entities that
(1) submit, or cause to be submitted, false or fraudulent claims to
Medicare and the Federal and State health care programs; or (2) offer,
pay, solicit or receive remuneration in return for the referral of
business reimbursed by Medicare or Medicaid, a violation of the
Medicare and Medicaid anti-kickback statute. Exclusions in accordance
with section 1128(b)(7) of the Act, based on such conduct, are
permissive in nature, that is, the Secretary has the discretion whether
to exclude or not to exclude. Respondents in these administrative
exclusion proceedings have the right to a hearing before a Department
of Health and Human Services administrative law judge prior to the
imposition of an exclusion.
On October 24, 1997, the OIG published a proposed policy statement
in the Federal Register (62 FR 55410) in the form of non-binding
guidelines to be used by the OIG in assessing whether to impose a
permissive exclusion in accordance with section 1128(b)(7) of the Act.
We indicated that these draft criteria were designed to allow for the
more effective development of OIG investigations and investigative
plans; establish an objective basis for the OIG's permissive exclusion
decisions; evaluate a provider's trustworthiness to continue to conduct
business with the Medicare, Medicaid and other Federal health care
programs; and positively influence providers' future behavior through
the development of corporate integrity programs and other conduct
contemplated by the exclusion criteria.
The factors listed in these proposed guidelines were derived from
two principal sources--the regulations governing exclusions under
sections 1128(b)(7) and 1128A of the Act (42 CFR parts 1001 and 1003),
and the decisions of the Departmental Appeals Board (DAB) in exclusion
matters. The factors derived from DAB decisions reflected the analysis
of the remedial purpose of program exclusion that is, to protect
Federal health care programs by determining whether the respondent is
sufficiently trustworthy to participate.
Structure of Permissive Exclusion Criteria
The proposed exclusion criteria were organized into four general
categories of factors bearing on the trustworthiness of a provider that
has allegedly engaged in health care fraud and abuse--
The first category addressed the circumstances and
seriousness of the
[[Page 67393]]
underlying misconduct. The factors to be considered are historical in
nature and rely on past misconduct as an indicator of the defendant's
propensity for future abuse of the programs.
The second category considered the defendant's response to
the allegations or determination of wrongdoing. These factors indicate
whether the defendant is willing to affirmately modify his or her
conduct, make injured parties whole, and otherwise acknowledge and
remedy past wrongdoing.
The third category identified various other factors
relevant to assessing the likelihood of a future violation of the law.
The implementation of an adequate corporate integrity program is a key
consideration.
The fourth category related to the defendant's financial
ability to provide quality health care services.
Interested parties were invited to comment on these draft criteria
and submit their written comments to the OIG for consideration. The OIG
received two timely-filed public comments in accordance with that
solicitation request. As a result of those comments, we are making two
technical revisions to the final guidelines. The first change relates
to section D and the defendant's financial ability to provide quality
health care services. We are clarifying this section to indicate its
application only to entities and not individual practitioners. Second,
we are revising the language in paragraph 3 of section A to address the
``knowledge standard.'' Specifically, we are now indicating that a
criterion would be whether there is evidence that the defendant knew,
or should have known, that his or her conduct was prohibited.
We believe that the revised internal guidelines set forth below
should now establish specific criteria on which the OIG may base its
decision as to whether to seek the imposition of a permissive exclusion
against a health care provider in accordance with section 1128(b)(7) of
the Act. While these revised exclusion criteria will now serve as
internal agency guidelines for the OIG, these criteria may be subject
to further modification at any time. They are not intended to limit or
bind the OIG's discretionary authority to exclude individuals or
entities that pose a risk to Medicare, Medicaid and other Federal
health care programs or program beneficiaries. These criteria do not
create any rights or privileges in favor of any party. In addition,
these criteria do not supplant to modify in any way the OIG
regulations, codified at 42 CFR part 1001, governing program
exclusions.
II. Criteria To Implement the OIG's Permissive Exclusion Authority
Under Section 1128(b)(7)
The following criteria may be used to determine whether or not it
is appropriate to impose a permissive exclusion in accordance with
section 1128(b)(7) of the Act (42 U.S.C. 1320a-7(b)(7)). These criteria
are informal and non-binding, and may be used as a guide to assist the
OIG in determining in which cases an exclusion should be imposed. The
presence or absence of any or all of the factors that appear below does
not constitute the sole grounds for determining whether exclusion is
appropriate. There is a presumption that some period of exclusion
should be imposed against an individual or entity that has defrauded
Medicare or other Federal and State health care programs.
A. The Circumstances of the Misconduct and Seriousness of the Offense
1. Was a criminal sanction imposed? The amount of any criminal fine
or penalty imposed, and the length of any period of incarceration that
is ordered, is evidence of the seriousness of the statutory misconduct,
and may have an impact on the exclusion determination.
2. Was there evidence of (i) physical or mental harm to patients or
(ii) financial harm to the Medicare or any of the other Federal and
State health care programs? If financial loss to the programs occurred,
what was the extent of such loss? Exclusion may be appropriate not only
in cases where actual harm is present, but potential harm as well.
3. Is the misconduct an isolated incident or a continuous pattern
of wrongdoing over a significant period of time? Is there evidence that
the defendant knew, or should have known, that his or her conduct was
prohibited? Has the defendant had the same or previous problems with
the OIG, the Health Care Financing Administration (HCFA), the carrier
or intermediary, or the State? What was the nature of these problems?
4. Was the defendant's involvement in the misconduct active or
passive? Was the defendant aware of the misconduct when it was
occurring? Did the defendant play a role in the misconduct?
B. Defendant's Response to Allegations/Determination of Unlawful
Conduct
1. What was the defendant's response to any actual or potential
legal violations or harm to the programs or their beneficiaries? Was
the response appropriate and credible?
2. Did the defendant cooperate with investigators and prosecutors,
and timely respond to lawful requests for documents and the provision
of evidence regarding the involvement of other individuals in a
particular scheme, thereby demonstrating trustworthiness?
3. Has the defendant made or agreed to make full restitution to the
Federal and/or state health care programs, thereby demonstrating
present responsibility and willingness to conform to applicable laws,
regulations and program requirements?
4. Has the defendant paid or agreed to pay all criminal, civil, and
administrative fines, penalties, and assessments resulting from the
improper activity?
5. Has the defendant taken steps to undo the questionable conduct
or mitigate the ill effects of the misconduct, e.g., appropriate
disciplinary action against the individuals responsible for the
activity that constitutes cause for exclusion, or other corrective
action?
6. Has the defendant acknowledged its wrongdoing and changed its
behavior, thereby demonstrating future trustworthiness?
C. Likelihood that Offense or Some Similar Abuse Will Occur Again
1. Was the misconduct the result of a unique circumstance not
likely to recur? Is there minimal risk of repeat conduct?
2. Have prior and subsequent conduct been exemplary or improper?
3. What prior measures had been taken to ensure compliance with the
law? Can the defendant demonstrate that it had an effective compliance
plan in place when the activities that constitute cause for exclusion
occurred?
A. Did the defendant make any efforts to contact the OIG, HCFA, or
its contractors to determine whether its conduct complied with the law
and applicable program requirements? Were any contacts documented?
B. Did the defendant bring the activity in question to the
attention of the appropriate Government officials prior to any
Government action, e.g., was there any voluntary disclosure regarding
the alleged wrongful conduct?
C. Did the defendant have effective standards of conduct and
internal control systems in place at the time of the wrongful activity,
e.g., was there a corporate compliance program in place? If there was
an existing corporate compliance plan:
(i) How long had the compliance plan been in effect?
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(ii). What problems had been identified as a result of the
compliance plan?
(iii). Were any overpayments or systemic changes made if problems
were identified?
(iv) Were appropriate staff sufficiently trained in applicable
policies and procedures pertaining to Medicare and other Federal and
State health care programs?
(v) Was there a corporate compliance officer and an effective
corporate compliance committee in place (if appropriate to the size of
the company)?
(vi) Were regular audits undertaken at the time of the unlawful
activity?
4. What measures have been taken, or will be taken, to ensure
compliance with the law? Has the defendant agreed to implement adequate
compliance measures, including institution of a corporate integrity
plan?
D. Financial Responsibility
If the defendant is an entity and is permitted to continue program
participation, is that defendant able to operate without a real threat
of bankruptcy and without a real threat to its ability to provide
quality health care items or services?
Dated: December 16, 1997.
June Gibbs Brown,
Inspector General.
[FR Doc. 97-33524 Filed 12-23-97; 8:45 am]
BILLING CODE 4150-04-M
