Publications & Presentations
May 24, 2016
Bill to Expand HHS-OIG’s Exclusion Authority in Health Care Fraud Cases

By Emma R. Cecil and Brian F. McEvoy

On May 17, Reps. Lois Frankel (D-Fla.) and William Keating (D-Mass.) introduced The Fighting Medicare Fraud Act of 2016 (H.R. 5267), which would, among other things, allow HHS OIG to exclude from Federal health programs individuals who have a prior interest in organizations that have been convicted of health care fraud or excluded from Federal or state health care programs, or in entities that are affiliated with such sanctioned organizations. Under the proposed law, an individual has a prior interest in a sanctioned entity if he or she had an ownership or control interest in, or was an officer or managing employee of, the sanctioned entity at the time of the fraudulent conduct and knew or should have known of such conduct. The expanded permissive exclusion authority thus would permit HHS-OIG to exclude an officer or managing employee who left the organization before the organization was sanctioned.

The bill is designed to close a loophole in the current law, which limits HHS-OIG’s exclusion authority to individuals who are currently employed by the sanctioned organization. If the bill is passed, officers and employees will no longer be able to escape exclusion by voluntarily separating from employment before sanctions are handed down.

Although expansion of HHS-OIG’s exclusion authority was previously contemplated in proposed legislation in 2013, the bill died before it went to vote. This bill may fare better, however, given the DOJ’s increased emphasis, as formally announced in last September’s Yates memo, on holding individuals accountable for corporate fraud.

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