Health Law alert by Lamb McErlane PC attorneys Vasilios J. Kalogredis, Esq. and Sonal Parekh, Esq.

The U.S. government regularly investigates and addresses healthcare fraud pursuant to the False Claims Act (“FCA”). The majority of FCA cases are resolved through settlement agreements in which the Office of Inspector General (“OIG”) takes one of the following approaches (ordered from highest to lowest risk to the Federal health care programs).

1. Exclusion – The OIG has the authority to exclude individuals and entities from Federally funded health care programs, including Medicare and Medicaid. An excluded individual or entity can no longer receive payments from Federal health care programs for any products or services they provide, order, or prescribe. As discussed in our previous article, Employers may and should check the OIG’s List of Excluded Individuals/Entities to ensure new hires and current employees are not on it and avoid civil monetary penalties (“CMPs”).
2. Heightened Scrutiny – Parties may be subjected to heightened scrutiny if they refused to agree to integrity obligations sufficient to protect the Federal health care programs. The OIG maintains a list of parties subjected to heightened scrutiny through settlements finalized on October 1, 2018 or later.

3. Integrity Obligations – Under a Corporate Integrity Agreement (“CIA”), individual providers or entities agree to certain integrity obligations in order to avoid exclusion from participation in Medicare, Medicaid, or other Federal health care programs. Each element of a CIA addresses the specific facts at issue and usually attempts to acknowledge and accommodate elements of preexisting voluntary compliance programs. CIAs include provisions that allow the OIG to impose CMPs for failure to comply. A material breach of the CIA would serve as an independent basis for exclusion. A CIA typically lasts 5 years and generally includes requirements to:

• • Hire a compliance officer and/or appoint a compliance committee;
  • Develop written standards and policies;
  • Implement a comprehensive employee training program;
  • Retain an independent review organization to conduct annual reviews;
  • Establish a confidential disclosure program;
  • Restrict employment of ineligible persons;
  • Report overpayments, reportable events, and ongoing investigations and/or legal proceedings; and
  • Provide an implementation report and annual reports to the OIG on the status of the entity’s compliance activities.
  • No further action
  • In the case of a good faith and cooperative Self-Disclosure, release of 1128(b)(7) exclusion with no integrity obligations.

Additional information on how the OIG evaluates risk to the Federal health care programs and the criteria the OIG considers in evaluating exclusions in FCA cases can be found in the OIG’s April 18, 2016 notice.

*This alert is for educational purposes only and is not intended to be legal advice. Should you require legal advice on this topic or have any questions or concerns, please contact Vasilios J. (Bill) Kalogredis, Esq. or Sonal Parekh, Esq.

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Vasilios J. (Bill) Kalogredis, Esq. has been advising physicians, dentists, and other healthcare professionals and their businesses as to contractual, regulatory and transactional matters for over 45 years. He is Chairman of Lamb McErlane PC’s Health Law Department. Bill can be reached by email at bkalogredis@lambmcerlane.com or by phone at 610-701-4402.

Sonal Parekh, Esq., is an associate at Lamb McErlane PC who focuses on healthcare transactional matters and a broad range of healthcare regulatory-related issues on behalf of healthcare systems, physicians, dentists, and other healthcare providers, and is a pharmacist by education and training. Sonal can be reached by email at sparekh@lambmcerlane.com or by phone at 610-701-4416.