“Permissive” Exclusions, Even on Managers, Not Subject to Review
The Office of the Inspector General (OIG) issued guidance recently, via public statements, documents and actions, explaining that it fully intends to use permissive exclusions under Sec. 1128(b)(15) of the Social Security Act, to prevent owners, officers and managing employees from working in, for or with all Federal healthcare programs, if their “entity” is excluded or convicted of certain offenses, including fraud, kickbacks, certain other convictions, and/or license revocation. Also, according to the OIG, decisions to exclude companies and/or individuals are not subject to administrative or judicial review.
So-called “permissive” exclusions are different from mandatory exlcusions, which are defined by law. Permissive exclusions are imposed at the discretion of the OIG, and are judged via several factors, outlined on the OIG website. These factors were set by the Social Security Act, but nevertheless provide different standards to be applied for company owners, versus officers and managing employees.
To exclude owners for their company’s bad acts, the OIG must find evidence that the individual either did know or “should know” [as defined in section 1128A(i)(7)] about those acts. However, officers or managing employees can be excluded without any evidence of knowledge of the bad acts. [see section 1128b(15)]
Additionally, sections 1128 and 1156 of the Social Security Act give the OIG authority to impose civil money penalties (CMPs). Those penalties, $10,000 for each item or service that caused the exclusion, could include treble damages per item, and may mean the individual or entity might never be reinstated into Federal health care programs.
The OIG further states that if a provider employs or contracts with an individual or entity who is excluded by the OIG, that provider may then be subject to CMP, damages and program exclusion. According to the Special Advisory Bulletin posted on the site, “for liability to be imposed, the statute requires that the provider submitting the claims for health care items or services furnished by an excluded individual or entity “knows or should know” that the person was excluded from participation in the Federal health care programs [see section 1128A(a)(6)]. Providers and contracting entities have an affirmative duty to check the program exclusion status of individuals and entities prior to entering into employment or contractual relationships, or run the risk of CMP liability if they fail to do so.”
Since these decisions are not subject to either administrative or judicial review, barring a later reconsideration by the OIG, an exclusion could effectively end an individual’s healthcare industry career. Nevertheless, the assertion by OIG that its decisions are not subject to review has yet to be tested in court.
AIS Health.com recently reported on public remarks made by Assistant Attorney General Tony West, in their Nov. 12 article:
“Assistant Attorney General Tony West said in an Oct. 20 speech to the Pharmaceutical Regulatory and Compliance Congress in Washington, D.C., that there are cases “that underscore our renewed focus on individual wrongdoers because where the facts and law allow, the civil division will pursue the individuals responsible for illegal conduct just as vigorously as we will companies.” West cited two DOJ enforcement actions against physicians for performing allegedly medically unnecessary surgery at hospitals.”
In his remarks, Mr. West cited several cases of shocking abuses, even citing cases of dentists performing unnecessary tooth extractions where healthy teeth were pulled; unnecessary crowns; and excessive baby root canals – one case of a child receiving 16 root canals in a single sitting.
Read the AIS article in full.
Find a list with links to relevant paragraphs providing authority for Exclusions: Exclusion Authorities for the OIG
Download: AAG Tony West’s prepared remarks of October 20, 2010
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