HHS Issues Final Rule for Health Care Programs
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This final rule amends the regulations relating to exclusion authorities under the authority of the
DATES:
These regulations are effective on
FOR FURTHER INFORMATION CONTACT:
SUPPLEMENTARY INFORMATION:
I. Statutory Background
The Affordable Care Act of 2010 (the Patient Protection and Affordable Care Act, Public Law 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010, Public Law 111-152, 124 Stat. 1029 (2010)) (ACA) expanded the Secretary's authority to exclude various individuals and entities from participation in Federal health care programs under section 1128 of the Social Security Act (Act). The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) amended the Secretary's authority to waive certain exclusions under section 1128 of the Act. The Secretary's authority under section 1128 of the Act has been delegated to the
II. Legal Authority
The legal authority for this regulatory action is found in the Act, as amended by MMA and ACA. The legal authority for the proposed changes is listed by the parts of Title 42 of the Code of Federal Regulations (CFR) that we propose to modify:
1000: 42 U.S.C. 1302 and 1395hh.
1001: 42 U.S.C. 1302; 1320a-7; 1320a-7b; 1395u(j); 1395u(k); 1395w-104(e)(6); 1395y(d); 1395y(e); 1395cc(b)(2)(D), (E), and (F); 1395hh; 1842(j)(1)(D)(iv); 1842(k)(1), and sec. 2455, Public Law 103-355, 108 Stat. 3327 (31 U.S.C. 6101 note).
1002: 42 U.S.C. 1302, 1320a-3, 1320a-5, 1320a-7, 1396(a)(4)(A), 1396a(p), 1396a(a)(39), 1396a(a)(41), and 1396b(i)(2).
1006: 42 U.S.C. 405(d), 405(e), 1302, 1320a-7, and 1320a-7a.
III. Summary of the Proposed Rule
On
Part 1000
The proposed regulation made a number of technical changes to the definitions found in section 1000.10 of the regulations. These included changes to the definitions of "Directly," "Furnished," and "Indirectly" that would more clearly incorporate newer payment methodologies into these definitions. The proposed regulation also moved numerous definitions from parts 1001 and 1003 into part 1000 to make them applicable to the entire subchapter and to consolidate the definitions in the subchapter. Lastly, it removed definitions that were specific to
Part 1001
The proposed regulation reflected the expansion of OIG's exclusion authority in MMA and ACA and also proposed numerous technical and policy changes. First, ACA expanded the permissive exclusion authority found in section 1128(b)(2) of the Act to reach all individuals and entities who were convicted for the interference with or obstruction of both investigations and audits related to the use of funds received from a Federal health care program. Next, the proposal reflected an expansion of the permissive exclusion authority found in section 1128(b)(11) of the Act. After ACA, section 1128(b)(11) of the Act provides for exclusion of any individual or entity furnishing, ordering, referring for furnishing, or certifying the need for items and services for which payment may be made under
Third, ACA added a permissive exclusion authority at section 1128(b)(16) of the Act for knowingly making or causing to be made any false statement, omission, or misrepresentation of material fact in any application, agreement, bid, or contract to participate or enroll as a provider of services or supplier under a Federal health care program. The proposed regulation corresponding to this authority, at section1001.1751 (in the final rule as section1001.1552), proposed to describe the sources OIG will consider in determining whether section 1128(b)(16) of the Act applies, including information from the
Lastly, in section1001.1801 the proposal reflected the expansion of OIG's authority to grant waivers of certain exclusions in accordance with ACA and MMA. MMA amended the Act to allow waiver requests to come from administrators of Federal health care programs, rather than just State health care programs, and to apply OIG's waiver authority to sections 1128(a)(3) and (a)(4) of the Act as well as section 1128(a)(1) of the Act. ACA further amended section 1128 of the Act to allow an administrator to request a waiver if the administrator determines that the exclusion would impose a hardship on any beneficiary. The proposal reflected both MMA's and ACA's changes.
The proposed regulation also included numerous changes that reflect OIG's policies and practices. We proposed to narrow the scope of providers excluded under sections 1128(a)(4) and (b)(3) for convictions related to controlled substances to those who were convicted for offenses that occurred during the time they were employed in the health care industry. We also proposed to update the dollar amounts in the aggravating and mitigating factors that take financial harm into account to
We also proposed to add a process for early reinstatement where a health care license has been lost and has not been reinstated, which included numerous factors that OIG would consider under such a process. We proposed to include a provision at section1001.901(c) stating that no period of limitations exists with respect to exclusions under section 1128(b)(7) of the Act. We proposed to add loan repayment programs as the bases for exclusions under section 1128(b)(14) of the Act. We proposed to expand the "pay the first claim rule" to Parts C and D of
The proposed regulation also made numerous technical and clarifying changes. We proposed reorganizing section1001.1001 to clarify the authority and to move all the definitions in section1001.1001 to section1001.2. This proposal would also create a new definition of "ownership or control interest," which mirrors existing regulatory language at section1001.1001(a)(1)(ii). Next, we proposed separating the two concepts in the aggravating factor related to "Other Offenses and Adverse Actions" to clarify that the first portion relates to additional convictions, and the second portion relates to adverse actions by government agencies and boards.
We also proposed revising the language requiring that individuals convicted of previous offenses be excluded for a longer minimum period to reflect the statutory language, which considers "previous" convictions instead of "other" convictions. We proposed to revise the language related to immediate access requirements to include technical clarifications and access to electronically stored documents under the Inspector General Reform Act of 2008.
Lastly, we proposed a clarification to the regulation pertaining to exclusions under section 1128(b)(15) of the Act that would state that the length of an individual's exclusion under section 1128(b)(15) of the Act is the same length as the exclusion of an excluded entity on which the individual's exclusion is based.
Part 1002
The proposed rule included several clarifying and technical changes, including clarifying
Part 1006
Consistent with ACA, the proposed regulation reflected OIG's new authority to issue testimonial subpoenas in investigations of potential cases involving the exclusions statute.
IV. Response to Comments and Summary of Revisions
In response to the Notice of Proposed Rulemaking, OIG received 19 filed public comments from various health care providers and organizations, professional medical societies and organizations, and other interested parties. In the next section below, we address the comments we received to particular proposals. The final rule makes certain non-substantive technical changes that were not included in the proposed rule. First, the final rule implements a reorganization of certain subparts of part 1001. Specifically, section1001.1051, which corresponds to the exclusion authority found at section 1128(b)(15) of the Act, is moved to new section1001.1551, after section1001.1501. The new exclusion authority in section 1128(b)(16), which was proposed at section1001.1751, is moved to new section1001.1552. These changes were made to put the regulatory authorities in the same order as the underlying exclusion authorities in section 1128 of the Act. Because of the non-substantive nature of these changes, we believe it is appropriate to include them in this final rule.
Next, the final rule moves the definition of "Federal health care program" from section1001.2 to section1000.10. The final rule also modifies the definition slightly to mirror the statutory definition in section 1128B(f) of the Act. While these changes were not proposed, they are technical corrections only and do not change the meaning or effect of the regulations. The final rule's definition of Federal health care program mirrors the statutory definition of the phrase and varies only grammatically from the prior regulatory definition (we changed "providing health care benefits" to "provides health benefits" and, because we believe our regulatory definition unintentionally did not mirror the statutory definition, we changed it from "whether directly through insurance or otherwise" to "whether directly, through insurance, or otherwise"). OIG has always interpreted this phrase according to the statutory definition at section 1128B(f) of the Act.
The reason we are moving the definition of Federal health care program from part 1001 to part 1000 is to reflect the statute and OIG's existing regulatory interpretation that this definition applies throughout Chapter V of Title 42, wherever the term may appear. The term "Federal health care program" appears only in parts 1001 and 1003. Part 1003 sometimes refers to the statutory definition (see section1003.101), and sometimes does not (see section1003.102(a)(3), (a)(15)). The move clarifies that one definition, mirroring the statute, applies to both part 1001 and part 1003, but does not change the meaning of any provision in Chapter V.
The final rule also spells out "civil money penalties" in section1001.1001(a)(2), replacing an instance of the term "CMPs." This change does not affect the substance of section1001.1001.
General Comments
Section 1001.901 and 951: Period of Limitations on Affirmative Exclusions
Comments: Thirteen commenters objected to OIG's proposal to clarify that there is no time limitation to exclusions imposed under section 1128(b)(7) of the Act. Some objected on legal grounds, arguing that even if a statute is silent regarding a period of limitations, courts have often applied some period of limitations and not deferred to an agency's interpretation of the period of limitations.
Others highlighted that although the preamble discussed this proposal with respect to all exclusions under section 1128(b)(7) of the Act, the proposed regulatory text only included this language for exclusions pursued under 42 CFR 1001.901 and not for those pursued under 42 CFR 1001.951. Some commenters were concerned that the proposed clarification regarding the limitations period would create an administrative burden because they felt that providers would be required to indefinitely retain all documentation that could be relevant to OIG's authorities. Other commenters suggested that OIG should toll the limitations period for exclusion in individual cases rather than finalize the language as proposed.
Response: The proposal stated that there is no time limitation on OIG's initiating an exclusion action under section 1128(b)(7) of the Act. As a result of the comments we received, OIG has decided not to finalize the rule as proposed and to instead codify a ten-year limitations period.
The proposal was based on the plain language and purpose of section 1128 of the Act and its interaction with the False Claims Act (FCA), the Federal Government's primary civil remedy for health care fraud. Section 1128, which includes no period of limitations, authorizes exclusions as prospective remedial actions to protect Federal health care programs and their beneficiaries from untrustworthy individuals and entities. Almost every Federal health care program fraud actionable under the
We believe we should administer the section 1128(b)(7) exclusion authority in a way that protects the programs and beneficiaries while reducing the risk of wasting resources. We also recognize that older conduct is less relevant to current trustworthiness. We have balanced the commenters' concerns with our policy goal of protecting Federal health care programs and beneficiaries and OIG's experience administering the exclusion statute. We have chosen to adopt a 10-year limitations period for exclusions initiated under 42 CFR 1001.901 or 42 CFR 1001.951.
The 10-year limitations period addresses the commenters' concerns about administrative burden and courts' historical favoring of an enumerated limitations period. Providing for a 10-year limitations period for exclusion under section 1128(b)(7) of the Act will better align the resolution of
When determining whether to seek exclusion of a defendant in an
We believe that recent acts are more indicative of trustworthiness than acts in the distant past. However, in our experience, exclusion can be necessary to protect the Federal health care programs even when the conduct is up to 10 years old. We intend to exercise this authority to preserve our ability to protect the programs when it is impracticable for OIG to pursue exclusion closer in time to the fraudulent conduct. A 10-year limitations period balances the need to provide the defendant certainty and also allow OIG to adequately evaluate exclusion in light of the fraudulent conduct.
As commenters noted, OIG provided notice of the relevant changes to exclusions under 1128(b)(7) of the Act but inadvertently provided only a text change for 42 CFR 1001.901. We have updated the final rule to add the relevant language to both 42 CFR 1001.901 and 42 CFR 1001.951. Commenters' concerns about the length of the limitations period in 42 CFR 1001.901 are equally applicable to 42 CFR 1001.951, and we have considered those concerns in the context of both sections.
Some commenters suggested that OIG toll its statute of limitations in situations where certain conduct would lead to exclusion but OIG has not learned of the conduct until years after the conduct. We have used tolling agreements in certain appropriate matters and will continue to do so where it is needed to preserve our ability to protect the Federal health care programs. However, we do not believe that OIG seeking a tolling agreement in specific cases is an efficient way to preserve OIG's authorities in these cases. As mentioned above, the Government's
Specific Comments
Section 1000.10: Definitions of "Directly," "Furnished," and "Indirectly"
Comment: One commenter suggested that the proposed language would be confusing for providers. Specifically, the commenter noted that OIG's proposed change from "submit claims to" to "request or receive payment from" would confuse providers trying to avoid liability because of the uncertainty about what "requesting" or "receiving" payment means. As an example, the commenter cited capitation payment methodologies, which the commenter stated sometimes "sever the direct link between the items/services that a payment is expected to cover and the items/services that the payment actually ends up covering." The commenter also stated that our reference to the False Claims Act was inappropriate.
Response: We continue to believe that the regulations should be updated to more clearly reflect that Federal health care programs make payments through methods other than the submission of fee-for-service claims, and that individuals and entities who request or receive such payment, directly or indirectly, are subject to exclusion. The prior regulations discussed these concepts in the context of claims for items and services being submitted to Federal health care programs. The proposed definitions more clearly include situations in which payment is made by a Federal health care program without a traditional fee-for-service claim, i.e., where the program makes payments through some other mechanism.
We believe the plain meaning of the words "request" and "receive" can be applied in this context without undue confusion. Funds are requested and received in many different forms from Federal health care programs, and the breadth of these terms is necessary to include current and potential future payment methodologies.
The terms include payment methodologies that have been implemented in the years since the regulations were last amended. By way of example only, some new payment models involve Federal health care programs issuing shared savings payments or performance-based payments (e.g., reflecting quality improvements) to individuals and entities. These individuals and entities therefore may receive payments from Federal health care programs that are not tied exclusively to claims for specific services that were provided. In another example, in managed care or other models, capitated payments may be received by individuals and entities from managed care organizations or the Federal health care programs to pay for health care provided to Federal health care program beneficiaries, but the individuals and entities may not be submitting claims directly to the Federal health care programs for particular items and services. As a final example, diagnosis resource groups that are used to determine payments for inpatient
Over time, more Federal health care program payments for items and services furnished to its beneficiaries are not directly connected to submitted fee-for-service claims. The regulation should clearly encompass such circumstances within the reach of the exclusion remedy. In applying its authorities, OIG carefully considers all relevant facts and circumstances in each case before taking action.
We referenced the False Claims Act's broad definition of "claim" to illustrate that other sections of the United States Code recognize that payment from the Federal Government is requested in many different ways. The statutory intent of recent amendments to that act apply its penalties without limitations imposed by changing payment methodologies. The
Section 1001.101 and 1001.401: Application of Certain Exclusions to Health Care Providers
Comment: One commenter stressed that the temporal change proposed by OIG would not protect beneficiaries from individuals who left employment in the health care industry before committing an offense leading to conviction, and then re-entered the health care industry after their conviction.
Response: We agree with the commenter that the proposed change would not cover individuals who left the health care industry before they committed an offense. Accordingly, we are not including the proposed change in the final rule.
Sections 1001.102(b)(1), 201(b)(2), 301(b)(2)(viii), and 701(d)(2)(iv):
Financial Loss Aggravating Factors
Comment: A commenter expressed concern that OIG's proposal to increase the financial loss aggravating factors used to determine the length of an exclusion from
Response: We partially agree with the commenters with respect to the increase in financial loss aggravating factor. In the final rule, we have increased the amount of the financial loss aggravating factors listed at sections1001.102(b)(1), 1001.201(b)(2)(i), 1001.301(b)(2)(viii) to
Comment: One commenter suggested that OIG retain the financial loss aggravating factors used to determine the length of an exclusion at
Response: While we agree that any loss from health care fraud is troubling, the purpose of the aggravating factor is to provide for an additional period of exclusion for those cases that involve high losses relative to other cases. In order for it to be a meaningful tool, the financial loss aggravating factor used to determine the length of an exclusion must be a realistic marker for differentiating conduct that is more serious because it involves a relatively significant amount of loss. In the current health care fraud environment, the
Section 1001.102(c)(1): Mitigating Factor Relating to Misdemeanor Offenses and Loss to Government Programs
Comment: One commenter supported OIG's proposal to raise the loss amount in this factor to
Response: We have finalized the rule as proposed.
Sections 1001.201, 301, 401, 501, 601, 701, 801, 951, 1101, 1201, 1601, and 1701: Alternative Sources Mitigating Factor
Comment: Two commenters suggested OIG retain the mitigating factor of whether alternative source of the type of health care items of services furnished by the individual or entity being excluded are unavailable. One commenter stated that removal of this factor would impair access to care. Another commenter was concerned that OIG's consideration of this factor prior to determining whether to impose an exclusion, rather than as a mitigating factor, could cause confusion.
Response: Exclusion of an individual or entity can have an impact on access to care as soon as an exclusion is effective. Therefore, it is more appropriate to consider whether exclusion will impact access to care in determining whether to impose a permissive exclusion rather than to determine the length of exclusion. In all permissive exclusions, OIG sends a notice of intent to exclude or a notice of proposal to exclude, giving the individual or entity the opportunity to present information about potential access to care issues. This opportunity to present information should clarify to individuals and entities that OIG will consider access to care issues before imposing an exclusion. OIG will continue to consider the issue of beneficiary access before excluding an individual or entity under OIG's permissive exclusion authorities.
For the full-text of this document, click this link or copy it into your browser: https://www.federalregister.gov/documents/2017/01/12/2016-31390/health-care-programs-fraud-and-abuse-revisions-to-the-office-of-inspector-generals-exclusion
[FR Doc. 2016-31390 Filed 1-11-17;
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