New OIG Advisory Opinion Issued on Effect of Exclusion
On February 13, 2015, the Office of Inspector General published Advisory Opinion 15-02, on the effect of exclusion from Medicare, Medicaid and all other Federal health care programs. The Opinion responds specifically to an inquiry as to whether payments for services performed by a physician and his/her medical practice prior to the effective date of exclusion would violate the terms of the physician’s exclusion and constitute grounds for sanctions under the civil monetary penalty provisions at section 1128A(a) (1)(D).
The physician had been excluded from Medicare, Medicaid and all other Federal health care programs for a period of 20 years, effective October 25, 2013, as a result of a criminal plea and civil False Claims Act settlement to resolve various allegations of health care fraud. The settlement required the physician to divest all ownership in a medical practice. The practice was sold by means of an Asset Purchase Agreement dated October 31, 2013.
Prior to the exclusion date, the physician and practice performed services and submitted claims for those services to the programs from which the physician is now excluded. After the exclusion date, the programs made payment for the services performed prior to the exclusion date. The buyer of the practice controlled the medical practice’s bank account at the time the payments were made and received. It was proposed that the buyer remit to the excluded physician the payment for the services. The seller physician was concerned whether this would violate the terms of exclusion and subject the physician to administrative sanctions.
The Advisory Opinion analyzes the applicable statute and regulations, stating the prohibition of payment by the Federal health programs applies to items or services furnished by the excluded individual on or after the effective date of the exclusion. Apparently, the need for the opinion arose due to the ambiguity of whether the phrase “on or after the effective date of the exclusion” modified the phrase “no payment may be made” or “for any item or service furnished.” The Opinion notes that the regulations state that no payment may be made for items or services furnished at the medical direction or on the prescription of an excluded physician, if the person furnishing the item or service knew or had reason to know of the exclusion. 42 C.F.R. section 1001.1901(b)(1).
The OIG’s conclusion is that payment may be made by the Federal health care programs for services rendered prior to the exclusion date, even though such payments are made after the exclusion date.