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From Health Law Daily, January 12, 2017

HHS OIG’s exclusion authority loosens, allows more discretion

By Kayla R. Bryant, J.D.

The HHS Office of Inspector General (OIG) now has more flexibility to choose when to exclude noncompliant and fraudulent providers from participation in federal health care programs. Under authority granted by the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), HHS can now apply its permissive exclusion power to more individuals in the event that a waiver is requested, particularly when the exclusion would cause access to care issues for beneficiaries. Due to certain comments, the agency made several changes since issuing its Proposed rule (73 FR 26809) in May 2014 (Final rule, 82 FR 4100, January 12, 2017).

Comments and changes. The OIG received a number of objections to its Proposed rule’s section clarifying that there is no time limit to exclusions imposed on providers who have committed fraudulent activities, including making false statements (see Codification of OIG’s statutory authority to waive exclusions proposed, May 9, 2014). The objections included reminders that courts may not defer to an agency’s interpretation of a limitation period and concerns about an increased administrative burden on providers to retain documentation indefinitely. Due to the comments received, the OIG has decided to codify a ten-year limitations period, noting that "older conduct is less relevant to current trustworthiness."

Also due to comments, the OIG is not finalizing the proposed temporal change of applying certain exclusions to providers. A commenter noted that if finalized, this regulation would not protect beneficiaries from providers who left employment in the industry, committed an offense leading to conviction, and then re-entering the industry.

Although the agency did not receive comments on the proposal that would have removed aggravating and mitigating factors for certain exclusions, the agency has reconsidered and will leave the factors in place.

Early reinstatement. The added flexibility in the revised regulations is reflected in the excluded provider’s ability to submit a request for early reinstatement in the event that a state licensing authority has issued a new license or chosen not to take adverse action. In this event, the OIG will consider the circumstances that formed the basis of the exclusion. The agency has also chosen to shorten the presumption against reinstatement period to three years for unlicensed individuals.

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