The Office of the Inspector General of the Department of Health and Human Services (OIG) last week replaced a 20-year old policy statement, and issued guidance on the criteria the agency will use to evaluate whether to exclude certain individuals and entities from billing or “participation in” Federal health programs under its permissive exclusion authority. The new guidelines supersede and replace the OIG’s December 24, 1997 policy statement and set forth “non-binding” criteria that the OIG may consider in exercising this authority under circumstances involving fraud, kickbacks and other prohibited conduct. The newly-memorialized policy is yet another effort by the agency to encourage healthcare providers to implement robust compliance mechanisms that can timely identify and voluntarily self-disclose to the government any unlawful conduct.

Under Sections 1128(b)(1)-(b)(15) of the Social Security Act (the “Act”), the Secretary, by delegation to the OIG, has discretion to exclude individuals and entities based on a number of grounds. This so-called “permissive exclusion” authority grants significant discretion to the OIG.  The new policy provides guidelines for permissive exclusions that are based on Section 1128(b)(7) of the Act, which permits the OIG to exclude persons from participation in any Federal health care program if the OIG determines that the individual or the entity has engages in fraud, kickbacks and other prohibited activities.


Continue Reading OIG Updates Policy on Permissive Exclusions Based On Fraud and Kickbacks

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Spotlight on Best Practices, Litigation, Antitrust, and Tax for Health Care Companies

Crowell & Moring LLP is pleased to release its “2016 Litigation & Regulatory Forecasts: What Corporate Counsel Need to Know for the Coming Year.” The reports examine the trends and developments that will impact health care companies and other corporations in the coming year—from the last year of the Obama administration to how corporate litigation strategy is transforming from the inside out. This year will bring remarkable change for companies, as market disruptions and the speed of innovation transform industries like never before, and the litigation and regulatory environments in which they operate are keeping pace.


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On November 2, President Obama signed the Bipartisan Budget Act of 2015. As an offset for near-term increases in federal spending, the new law extends by one year – to 2025 – two-percent sequestration reductions in federal spending for mandatory federal programs including Medicare.  The end result is that Medicare Advantage Organizations (MAOs) can expect their capitated payments from Centers for Medicare and Medicaid Services (“CMS”) to continue to be reduced, and Medicare fee-for-service providers can also expect to have sequestration reductions on their CMS reimbursements until at least 2025.

First established by the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA), “sequestration” is a process of automatic, largely across-the-board reductions enacted to constrain federal spending. Sequestration in its current form began on March 1, 2013, when President Obama, pursuant to the Budget Control Act of 2011, ordered cuts to federal spending effective April 1, 2013, after Congress and the President failed to reach a budget compromise.

Under the Budget Control Act of 2011, the size of reductions to the Medicare program is limited to two-percent. As required by President Obama’s sequestration executive order, on March 8, 2013, CMS notified providers that a “2 percent reduction in Medicare payment[s]” would apply to “Medicare FFS claims with dates-of-service or dates-of-discharge on or after April 1, 2013.” In other words, due to sequestration, as of April 1, 2013, CMS reduced the amount it pays to providers for fee-for-service Medicare claims by two-percent.


Continue Reading Sequestration Extended to 2025 in Federal Budget Deal

The California Department of Insurance (CDI) has issued emergency regulations governing health insurer provider networks that became effective January 30, 2015.  The new regulations, which do not modify existing standards for plans licensed under California’s Knox-Keene Act, impose several requirements on health insurers, including standards for network adequacy, timely access to care, provider directories and

Earlier this week, the Supreme Court heard arguments in a case that could determine whether federal regulators may revise established interpretations of rules without first complying with the notice-and-comment rulemaking process required by the Administrative Procedure Act. Although the specific case before the Court (Perez v. MBA) involves a Department of Labor rule, a decision