Analysis of the recent OIG advisory opinion on the employment of excluded people | Arnall Golden Gregory LLP

The Department of Health and Human Services, Office of the Inspector General (OIG) recently issued a favorable advisory opinion, OIG Advisory Opinion No. 22-11 (the “Opinion”), analyzing the proposed employment of a person excluded from federal health care programs. to perform marketing functions related to workers’ compensation (WC) programs (the “Proposed Arrangement”). Plaintiff, a group medical practice, asked whether the proposed arrangement would be grounds for sanctions under Section 1128A(a)(6) of the Social Security Act (the “Act”), 42 USC § 1320a-7a(a)(6). The OIG concluded that although the proposed use would present a significant risk of non-compliance to the claimant, the OIG would not impose any sanctions under the law in connection with the proposed arrangement.

The advisory opinion. According to the facts presented, the Applicant is a medical group specializing in pain management. While the majority of Plaintiff’s patient treatment is covered by WC programs that are not federal healthcare programs, Plaintiff also processes and submits claims for items and services provided to WC program beneficiaries. federal health.

In 2016, a licensed chiropractor (the “excluded person”) pleaded guilty to conspiracy to receive illegal kickbacks for referring WC patients to a certain hospital for spine surgery. In April 2017, the excluded individual was suspended from participating in the state’s WC system as a doctor, practitioner or provider. In March 2019, the Plaintiff hired the Excluded Person as an administrative employee to provide related services, at least in part, to recipients of the federal health care program. The state’s Medicaid program disqualified the disqualified individual in May 2019, and the OIG disqualified the disqualified individual in March 2021. Plaintiff placed the disqualified individual on unpaid administrative leave in May 2021 and disclosed the employment of the person at BIG.

Under the proposed arrangement, Plaintiff would reinstate the Excluded Person’s employment as a WC Paymaster Relations Representative, marketing Plaintiff’s medical services to WC Payers and attorneys working with WC Payer Covered Persons. . The excluded individual would also develop marketing materials, research potential contacts within the state’s WC industry, participate in WC industry groups, and provide information about the WC to the plaintiff’s management. Applicant has certified that the Excluded Person will not provide marketing, billing, or any other services to Federal Health Care Program recipients or any provider or supplier who refers Federal Health Care Program recipients to Applicant . Further, the individual would have no contact with federal health care program recipients and would not provide any items or services, directly or indirectly, for which payment may be made by a federal health care program. health. Plaintiff also certified that it would create a separate payroll division that would pool revenue from the reimbursement plaintiff receives only from non-federal health care program payers, and that the salary, benefits, and expenses of the excluded person would be paid exclusively from this separate payroll. .

The OIG concluded that the proposed arrangement would not engage its civil authority for monetary penalties under section 1128A(a)(6) of the Act. He relied on the plaintiff’s certifications that the disqualified person would not provide any items or services directly or indirectly to federal health care program recipients and that federal health care programs would not pay, directly or indirectly, the salary of the excluded person. The OIG also noted the plaintiff’s certification that the individual would be paid from separate payroll funds derived solely from reimbursement from non-federal health care program payors, but pointed out that “[a] the provider need not maintain a separate account from which to pay the excluded person, so long as no claim is submitted or payment is received from federal health care programs for items or services that the excluded person provides and that such items or services relate only to non-Federal Health Care Program patients.

The OIG’s advice was not without caveats, however. The OIG cautioned that its opinion: (1) did not address potential liability based on the disqualified person’s prior employment with the claimant; and (2) gave no opinion on whether the proposed arrangement would involve or violate the terms of the disqualified person’s suspension from participation in the state’s WC system. The OIG further cautioned that the proposed arrangement raises compliance concerns, as the claimant proposes to employ a person convicted of receiving illegal bribes in exchange for directing WC patients into a marketing role designed to encourage WC payers and attorneys to refer their clients to the applicant for medical services. Nevertheless, since the excluded person’s employment under the proposed arrangement would not involve the provision of items or services for which payment may be made under a federal health care program health, so it would not involve the civilian monetary penalty authority of the OIG.

Analysis. Pursuant to 42 CFR § 1001.1901, no payment may be made by Medicare, Medicaid, or any other federal health care program for any item or service provided by an excluded person or entity during the exclusion period. Accordingly, federal health care programs do not pay for items or services provided directly or indirectly by an excluded person, regardless of who bills for those items or services. Providing “indirectly” means providing items or services manufactured, distributed, or otherwise provided by persons or entities who do not directly submit claims to Medicare, Medicaid, or other federal health care programs, but who provide items or services to providers, practitioners, or vendors who submit claims to these programs for such items and services. 42 CFR § 1000.10.

Advisory Opinion 22-11 is the latest in the OIG’s analysis regarding the employment of excluded persons by health care providers who submit claims to federal health care programs. See, for example, OIG Advisory Opinion No. 18-011 (finding that an excluded participant could market the company’s services to long-term pharmacies that could submit claims to federal health care programs because the marketing services offered were far removed from the products provided to program beneficiaries ); OIG Advisory Opinion No. 03-012 (finding that the excluded physician could perform some attenuated business development functions for the employer without sanction, although the employer’s products would ultimately be paid for by the Medicare program through inclusion in hospital cost reports ); OIG Advisory Opinion No. 01-163 (concluding that the employment of an excluded physician as a program developer in a health maintenance organization would not be subject to administrative penalties).4 The OIG has also provided guidance relating to prohibitions on employing or contracting with excluded individuals and entities in its “Special Information Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs.” health “.5

Advisory Opinion 22-11 is available at While this notice and others discussed herein apply only to the specific facts and proposed arrangement presented in each particular application and should not be construed as general policy, they do offer informal guidance to care providers. on practices related to the employment of persons excluded from the federal government. health care programs that could result in the imposition of significant monetary penalties.

[1] Available at
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[4] See also OIG Advisory Opinion No. 19-05 (purchasing real estate from an excluded person would not trigger penalties), available at -19-05.pdf; OIG Advisory Opinion No. 07-17 (finding that an excluded person who assigned to a family-controlled entity the rights to an invention ultimately sold to health care providers who could bill federal programs for this was not subject to sanctions) available at
[5] Available at

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