Publications & Presentations
April 20, 2016
Yellow Card or Red Card? OIG Updates Criteria for Exclusion from Federal Health Care Programs

By Brian F. McEvoy and William D. Ezzell

Picture yourself as a physician, health care administrator, or nurse. The government initiates a False Claims Act (FCA) investigation and you (or your company), as a provider, commence an immediate internal investigation. The findings are brought to the government, you promptly correct any errors, and a settlement is in sight. This begs the question: What’s next?

Depending on the settlement, the government may not deprive a person’s liberty through prison, but it might take away a health care professional’s freedom to work. Medicare and Medicaid account for nearly 40 percent of the nation’s health expenditure and this number is only going to rise. For the medical professional who has devoted his or her entire career to health care, what is the professional to do if he or she can’t treat Medicare or Medicaid patients?

This week, the Office of the Inspector General (OIG) published new criteria for implementing FHP exclusion authority. Those that pose the highest risk to federal health programs warrant exclusion. As this risk decreases, so do the remedies: heightened scrutiny, integrity obligations, no further action, and release (self-disclosure). This criteria will be useful to providers in determining potential risks when dealing with an FCA investigation.

What Warrants a Red Card?

With FCA cases, government penalties can include significant fines, restitution, and of course, imprisonment. Most FCA matters tend to be civil in nature and stop short of criminal. And the overwhelming majority of civil defendants work out settlements with the government. In resolving FCA cases, one decision the OIG must make is whether the individual or entity should be excluded from participation in federal health care programs like Medicare and Medicaid. The rationale is straightforward: OIG presumes that the person should be excluded from participation because that person’s continued participation constitutes a risk to the very programs the person supposedly defrauded. Fair enough. But what constitutes a risk?

In deciding whether to issue the “Red Card” – exclusion – OIG looks to four broad categories: (1) nature and circumstances of conduct; (2) conduct during the investigation; (3) significant ameliorative effects; and (4) history of compliance.

In the bulletin, the OIG provides a comprehensive list of conduct or circumstances that pose a higher risk. This includes whether patients were harmed, was there a sustained pattern of wrongdoing, how much the government lost, and whether the violator organized and led the unlawful conduct. Perhaps most important, OIG pays particular attention to the conduct during the investigation. Did the person obstruct the investigation? Were any steps taken to conceal the conduct? Those who initiate internal investigations before becoming aware of a government investigation, cooperate with the government, implement appropriate disciplinary action against those responsible, initiate additional training, all indicate lower risks.

However, while a failure to comply within a reasonable amount of time can affect the decision, OIG makes clear that a simple prompt response to a subpoena is meaningless in its eyes. Although the bulletin highlights that an individual’s self-disclosure of fraudulent conduct, agreements to robust integrity obligations, and acceptance of responsibility for the conduct often result in continued FHP participation, each case is nonetheless fact-specific. Thus, retaining effective attorneys with a working knowledge of FCA law and long-standing, professional relationships with government officials is critical.

For those in the crosshairs, convincing the government that a provider can be trusted to participate in Medicare or Medicaid is no easy task. To best avoid the OIG “Red Card,” the best first step is almost always retaining counsel with FCA experience and working government relationships.

To learn more about Polsinelli's False Claims Act Defense practice, click here.