OIG moves to expand sanction authorities

The Office of Inspector General proposed a new rule to strengthen its authority to exclude providers from federal healthcare programs.

The new rule would allow the OIG to oust providers for new reasons, including conviction of an offense connected with obstructing an audit or investigation, failure to supply payment information, and lying or omitting material fact in an application, agreement, bid or contract related to federal healthcare programs.

The latter problem made news recently when authorities arrested an owner of three home care agencies for allegedly committing a $78 million dollar Medicaid fraud despite prior exclusion. She used aliases to apply for and receive new participating provider numbers, as FierceHealthPayer: Anti-Fraud previously reported.

From a provider perspective, exclusion from federal healthcare programs may be the "kiss of death" since Medicare and Medicaid are significant revenue generators, according to Policy and Medicine. Exclusion also blocks providers' payment by an employer or group practice and closes the door to employment by government contractors, the article noted.

Accordingly, the OIG is considering implementing a process for early reinstatement of providers excluded after losing a healthcare license, Policy and Medicine noted. If another state or licensing board grants an excluded provider a new license, the OIG will decide if the person solved the problem leading to license loss and weigh the advantages of reinstatement against possible risks.

Another feature of the OIG's proposal is extending the Medicare Part B "pay first claim rule" to Parts C and D. The Centers for Medicare & Medicaid Services allow Part B payment for claims filed by beneficiaries for excluded providers' services when the patient doesn't know about the exclusion. Medicare must inform the person of the exclusion and stop paying such claims after a reasonable time, the proposal noted.

If the new rule becomes final, screening staff and contractors against the list of excluded individuals and entities may get easier for payers, according to a commentary by former U.S. Department of Health and Human Service Inspector General Richard P. Kusserow.

Comments on the proposed rule are due by July 8.

For more:
- read OIG's proposed new rule (.pdf)
- here's the Policy and Medicine article
- see Kusserow's commentary