HHS Simplifies Rule Regarding Impact of OIG Exclusion on Debarment and Suspension: Comments Accepted Until April 2, 2007

12 March 2007 Publication
Authors: Judith A. Waltz

Legal News Alert: Health Care

Exclusion from Federal health care programs, as well as employing an excluded individual or contracting with an excluded individual or entity, may have very serious consequences for health care entities. Items or services provided by excluded individuals or entities are not covered by the Federal health care programs, and payments made for such items and services are generally considered to be overpayments. In addition, no payment will be made for any item or service furnished at the medical direction or on the prescription of an excluded physician (assuming knowledge, or reason to know, of the exclusion by the entity furnishing such item or service).

Excluded health care providers that knowingly submit, or cause to be submitted, claims to Federal health care programs for reimbursement may be subject to civil monetary penalties of $10,000 per item or service and may be subject to treble damages. Health care providers that know, or should know, that they have employed or contracted with an excluded individual, or entity, may be subject to civil monetary penalties of $10,000 for each item or service furnished by the excluded individual, or entity, that is submitted for reimbursement to a Federal program, and may also be subject to treble damages and even exclusion. Excluded and debarred individuals and entities can be identified by referencing the Office of Inspector General’s (OIG’s) List of Excluded Individuals/Entities and the U.S. General Services Administration’s Excluded Parties List System. In addition to its impact on Federal health care program participation, an OIG exclusion also prohibits participation in non-health care government procurement and non-procurement programs.

On March 1, 2007, the U.S. Department of Health and Human Services (HHS) issued an Interim Final Rule regarding nonprocurement debarment and suspension. The summary indicates that this is intended as an administrative simplification which would make no substantive change in HHS policy or procedure and is designed to reflect the former government-wide “common rule” on nonprocurement and debarment in a simpler manner than the former 45 CFR Part 76. The Interim Final Rule, which is found in a new Part 376 of Title 2 of the Code of Federal Regulations, provides that any individual or entity excluded from participation in Medicare, Medicaid, and other Federal health care programs under Title XI of the Social Security Act (42 U.S.C. §§ 1320a-7, 1320a-7a, 1320c-5, or 1395ccc, and implementing regulations at 42 CFR Part 1001), will be subject to the prohibitions against participating in covered transactions and is prohibited from participating in all Federal government procurement programs and nonprocurement programs. The regulations specifically identify exclusion by the OIG as precluding that individual or entity from participating in all Federal government procurement and nonprocurement programs. The Interim Final Rule, which was effective as of March 1, is open for comments until April 2.

If you have any questions about the foregoing or need additional information, please contact the attorneys listed below or the lawyer in the firm who generally handles your legal matters:

Rick Rifenbark at 310.975.7793 or rrifenbark@foley.com

Judith A. Waltz at 415.438.6412 or jwaltz@foley.com

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