In a recently published Proposed Rule, the Office of Inspector General for HHS proposes to amend the civil monetary penalty (“CMP”) regulations to incorporate new CMP authorities and clarify existing authorities. Most significantly, the proposed rule would limit penalties in situations where billing of Medicare and Medicaid is only partially fraudulent.

The rule proposes a new approach for monetary penalties when care provided by an excluded provider is billed to the federal government. While a prescription written by an excluded provider must be entirely repaid, the amount paid for a claim that only partially involves an excluded provider would be treated differently. For example, if an excluded nurse contributes to care provided in an office visit, the government would not reclaim the entire amount of the claim, because the nurse’ services are not separately billable, but instead are included as part of the amount paid for an office visit.

For such situations, OIG proposes an “alternative methodology” to calculate CMPs. Instead of recouping the total amount of the claim, OIG would look at both the number of days the excluded employee was involved in providing care and the amount that the excluded employee is compensated.

The proposed rule also would implement changes mandated under the ACA, which provides for CMPs, assessments, and exclusions from Medicare and Medicaid for:

  • Failure to grant OIG timely access to records;
  • Ordering or prescribing while excluded;
  • Making false statements, omissions, or misrepresentations in an enrollment application;
  • Failure to report and return an overpayment; and
  • Making or using a false record or statement that is material to a false or fraudulent claim.

The primary factors that OIG would use when considering the extent to levy CMPs are: (1) the nature and circumstances of the violation, (2) the degree of culpability of the person, (3) the history of prior offenses, (4) other wrongful conduct, and (5) other matters as justice may require. OIG emphasizes that these are illustrative factors rather than a comprehensive list.

OIG also specifically requests comments regarding the ACA’s requirement that providers return overpayments within 60 days of identifying them. OIG proposes regulatory text interpreting the default penalty as up to $10,000 for each day a person fails to report and return an overpayment. However, OIG is requesting comments on whether it should instead apply the default penalty of $10,000 to each individual claim that contained an overpayment.

The full rule can be read here. Comments are due by 5 p.m. EST on July 11, 2014. Comments can be submitted electronically through the Federal eRulemaking Portal. All comments should reference file code OIG-403-P.

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