DHHS Expands Exclusion Authority Relating to Federal Health Care Programs

The U.S. Department of Health & Human Services, Office of Inspector General (OIG) issued a Final Rule, effective February 13, 2017, enacting new policies for excluding individuals and entities from participation in federal health care programs such as Medicare and Medicaid. The rule makes many notable changes to current exclusion regulations, including the following:

• Setting a time limit of ten years in which the OIG can look back for acts which may be the basis of exclusion.
• Establishing an early reinstatement process for providers that were excluded after losing their health care license for reasons such as lapses in professional competence, professional performance or financial integrity.
• Increasing the amount that federal healthcare programs would have to lose in order for the loss to be considered an aggravating factor in determining how long the exclusion should last.
• Permitting the OIG to exclude individuals who hold ownership or control interests in excluded entities.
• Permitting banning providers from Medicare and Medicaid for illegally prescribing or distributing controlled substances, or for obstruction of investigations and audits.

The rule may be subject to repeal as part of the Trump Administration’s threatened repeal of the Affordable Care Act. Additionally, since the rule was not yet in effect at the time of the issuance of the President’s Freeze Memo, the current implementation date is likely to be postponed. See our Health Law Alert published with this Health Law Update.