Liles Parker PLLC
(202) 298-8750 (800) 475-1906
Washington, DC | Houston, TX
San Antonio, TX | Baton Rouge, LA

We Defend Healthcare Providers Nationwide in Audits & Investigations

Proposed Rule Seeks to Give Expand OIG CMP Authority

Proposed Rule Seek to Expand OIG CMP Authority

(July 14, 2014): In the near future, Medicare Providers may be at an increased risk of Civil Monetary Penalties (CMP).  Last month, the Department of Health and Human Services, Office of Inspector General (OIG) published a Proposed Rule (79 Fed. Reg. 27080) that will potentially expand OIG’s authority under the Affordable Care Act (ACA) to impose CMPs, assessments, and exclusion actions against Medicare providers who defraud or abuse federal health care programs.


I.   Primary Purpose of the Proposed Rule – Expand OIG CMP Authority:

This Proposed Rule is intended to amend the current CMP rules so that they reflect statutory changes made under the ACA.  The ACA expanded the type of conduct that permits the HHS-OIG to impose CMPs, and in its proposed rule the OIG proposes to codify these permissions. The ACA and the Proposed Rule enumerate the following bases for CMPs:

  • Failure to provide OIG with timely access to records upon reasonable request;
  • Ordering or prescribing while excluded by OIG;
  • Making false statements, omissions, or misrepresentations in an enrollment application;
  • Failure to report and return a known overpayment; and
  • Making or using a false record or statement that is material to a false or fraudulent claim.

Although the ACA did not specify a penalty amount for failure to report and return a known overpayment, the OIG is proposing the default penalty is up to $10,000 per day. The Proposed Rule does not specify whether this default penalty will attach to each claim identified as an overpayment. Furthermore, the Proposed Rule would allow the OIG to also impose $10,000 per day penalties on drug manufacturers who fail to timely report and certify drug-pricing data.

II.   Factors Considered when HHS-OIG Recommends Penalties, Assessments and Exclusion Actions:

Notably, the Proposed Rule sets out a list of factors that HHS-OIG intends to review when deciding how long a proposed exclusion period will last.  These factors will also be used by HHS-OIG to arrive at the amount of recommended penalties and assessments that the agency will pursue against a health care provider or other party in response to one or more statutory violations.  These factors include:

  • The nature and circumstances of the violation;
  • The degree of culpability of the person;
  • The history of prior offenses;
  • Other wrongful conduct; and
  • Other matters as justice may require.

III.   Impact on Medicare Advantage Plans, Part D Organizations, and their Agents:

As a final point, the Proposed Rule also clarifies that penalties and assessments may be imposed against a Medicare Advantage Plan or a Part D contracting organization when its employees or agents, or any provider or supplier who contracts with it, engages in prohibited conduct. The Proposed Rule states:

“This statutory change broadens the general liability of principals for the actions of their agents under our existing regulations . . . to include contracting providers and suppliers who may not qualify as agents of the contracting organization.”

The ACA created new categories of misconduct that can serve as the basis for CMPs, including:

  • Enrolling people without prior consent;
  • Transferring enrollees to a different plan without prior consent;
  • Transferring enrollees solely for the purpose of earning a commission;
  • Failure to comply with applicable marketing restrictions; and
  • Employing or contracting with anyone who engages in certain wrongful conduct (which includes failure to provide medically necessary care and discouraging enrollment by vulnerable eligible individuals).

IV.  Final Remarks:

The Proposed Rule would expand the OIG’s ability to impose significant penalties on providers and suppliers and in expand the circumstances under which CMPs can be imposed. When the rules are finalized and enacted, it can be expected that OIG will take an even more active role in settling Federal health care investigations.

Healthcare AttorneyRobert W. Liles, Esq., serves as Managing Partner at Liles Parker, Attorneys & Counselors at Law.  Liles Parker attorneys represent health care providers and suppliers around the country in connection with Medicare audits, HIPAA Omnibus Rule risk assessments, privacy breach matters, State Medical Board inquiries, and regulatory compliance reviews. For a free consultation, call Robert at: 1 (800) 475-1906.


  • Advertisement

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!

You must be logged in to post a comment.