Deeper Than the Headlines: Exclusions Advisory Opinion

What do you do when you’re running an exclusion check on an employee or vendor and you receive a positive match? Does a positive match automatically mean that person can’t work for you?  The answer: It depends.

A recent OIG Advisory Opinion gives an example of where it might be ok for someone who’s been excluded to perform certain kinds of work for certain companies working in the healthcare industry.
But remember, advisory opinions are limited to specific facts and scenarios presented to the OIG by the requestor and the opinion is issued only to the requestor. The advisory opinion has no application to, and cannot be relied upon by, any other individual or entity. But it’s helpful to dissect the OIG’s thought process.

The Advisory Opinion is No. 18-01 and is dated 2/27/18. It can be read in its entirety on the OIG’s website: https://oig.hhs.gov/fraud/docs/advisoryopinions/2018/AdvOpn18-01.pdf

A summary of the Advisory Opinion are as follows: The requestor inquired whether a newly formed, for-profit corporation’s proposal to employ the requestor to market its services would violate the terms of the requestor’s exclusion from federal healthcare programs and constitute grounds for the imposition of sanctions under the civil monetary penalty provision. The OIG concluded that, although the proposed arrangement could violate the requestor’s exclusion and could constitute grounds for the imposition of administrative sanctions, the OIG would not impose such sanctions in connection with the proposed arrangement.

Previously, the requestor had agreed to be permanently excluded from participation in Medicare, Medicaid, and all other Federal health care programs as a result of a criminal conviction for health care fraud and pursuant to a civil False Claims Act settlement.

The requestor has since received a good faith employment offer from a newly formed, for-profit corporation. The Company’s services will consist of offering long-term care pharmacies access to discounted rates for emergency medications that the company negotiates with local retail pharmacies. The prices the company would charge for the medications the LTC Pharmacies obtain from the local retail pharmacies would be the discounted rate the company negotiated with the local retail pharmacies, plus a markup.

The Company would not directly submit claims for items or services that are paid for by any Federal healthcare program, including any medications the LTC Pharmacies obtain from the local retail pharmacies. Neither the requestor nor the company would directly or indirectly have any role in the LTC pharmacies’ or their customers’ submission of claims to any Federal healthcare program. Under the proposed arrangement, the requestor would market the company’s services to the LTC pharmacies and offer them the opportunity to contract with the company to receive lower prices than they normally would pay when ordering emergency medications from a local retail pharmacy. The requestor certified that because the LTC pharmacies and their customers would determine the volume, type, and frequency of any medications they would need or order, neither the requestor nor the company would exercise any direct or indirect control over those determinations. The company would pay the requestor a fixed salary plus a commission based on the number of LTC pharmacy accounts secured for the company. The requestor also certified that compensation would not be determined based on the volume, value, frequency, price, or selection of any medications, including federally reimbursable medications, the LTC pharmacies or their customers would order. The requestor also certified that neither him, nor any of his immediate family members, nor any member of his household, would have any direct or indirect ownership or control interest in the company or would obtain such ownership or control interest during the term of the proposed arrangement.

Given all these certifications, the OIG concluded that even though the specifics of the arrangement could violate the requestor’s agreement to be excluded from all federal healthcare programs, his marketing services on behalf of the company would be so far removed from the emergency medications the LTC pharmacies or their customers would provide to program beneficiaries and would pose minimal risk to federal health care programs and beneficiaries.  Given this, the OIG would not subject the requestor to administrative sanctions in connection with the proposed arrangement.

This is not the first advisory opinion or document the OIG has published regarding individuals who’ve been excluded from federal healthcare programs who desire to continue working in the healthcare sector.  This is the most recent advisory opinion, however, and when you take previous publications into account, you can begin gain insight into the OIG’s thought process on excluded individuals.