A rule proposed by the Department of Health and Human Services Office of Inspector General (“OIG”) would broaden its authority to exclude individuals and entities from participation in federal healthcare programs, and grant the agency authority to issue subpoenas when seeking potential exclusions.

The proposed rule – which implements heightened exclusion authority available under the Affordable Care Act – would enable the OIG to impose exclusions on individuals for:

  • convictions related to the obstruction of an audit;
  • failure to supply payment information to either Medicare or a state healthcare program; and
  • making, or causing to be made, false statements on a provider application for participation in a federal healthcare program.

With respect to false statements, the length of the exclusion would be based on “what the repercussions of the false statement are and whether the individual or entity has a documented history of criminal, civil, or administrative wrongdoing.” But the proposed rule has a higher threshold for an “aggravating factor” to determine the length of an exclusion. Although a financial loss of $5,000 or more is the current benchmark for an aggravating factor, under the proposed rule, the aggravating factor threshold would be increased to $15,000, which the OIG stated “is an appropriate threshold that is consistent with [the] rationale behind the original amount and provides a realistic marker for determining whether someone is untrustworthy.”

Further, the proposed rule includes some mitigating provisions. For example, exclusion would be limited to “current health care practitioners, providers, suppliers, those who furnish items or services, owners, managing employees, or those who are employed in any capacity in the health care industry,” or individuals who held these positions at the time of the relevant actions.

Read the proposed rule, published in the Federal Register on May 9, 2014 in Vol. 79, No. 90. Comments are due by July 8.

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