Are you risking mandatory or permissive “exclusion” by the Office of the Inspector General (OIG)?

If you are a physician, pharmacist, or nurse facing significant legal of disciplinary action, both you and your lawyer need to be aware of 42 U.S.C. 1320a-7, which allows, and sometimes requires, that the Office of the Inspector General (OIG) exclude certain individuals and entities from participation in Medicare and State health care programs. For most physicians, pharmacists and nurses, the practical effect of being “excluded” from any employment receiving federal funding is that you are rendered unemployable during the period of exclusion.

Permissive vs. mandatory exclusion by the OIG

Generally speaking, there are two types of exclusion, “permissive exclusion” and “mandatory exclusion.” See 42 U.S.C. 1320a-7(a) & (b). With permissive exclusion, the OIG has discretion whether to exclude the practitioner. The OIG will exercise its discretion based upon the consideration of multiple factors, which means that your lawyer will have an opportunity to plead your case, by presenting mitigating factors to the OIG against being excluded. With mandatory exclusion, however, mitigating factors will not help you. With mandatory exclusion, if any one of the triggering events is present, and absent a few truly extraordinary circumstances, the exclusion is mandatory for the proscribed period of time, often five years, but in some cases ten years, or permanently. Consequently, the first thing your lawyer should do is to determine the type of exclusion you risk – mandatory or permissive.

Factors that trigger mandatory exclusion by the OIG

Mandatory exclusion applies, for example, when any one of the following events occur: (1) a conviction of a program-related crime; (2) a conviction relating to patient abuse; (3) a felony conviction relating to health care fraud; or a (4) felony conviction relating to a controlled substance. See 42 U.S.C. 1320a-7(a) (1)-(4).

Opportunities to avoid mandatory exclusion by the OIG

If you are facing mandatory exclusion, it is important that your lawyer first verify that you belong in a category that triggers mandatory exclusion. Once you verify that you are properly subject to mandatory exclusion, the opportunities to avoid exclusion are few, but they do exist (e.g., vacation of judgment, or reversal of judgment on appeal, or obtaining a sole community provider waiver). If you cannot avoid permanent exclusion, your lawyer’s next task to hold the period of exclusion to its minimum. Remember, the five and ten-year periods of exclusion are the minimum periods of exclusion – the OIG can extend these minimum periods if aggravating factors warrant. Perhaps the best strategy to avoid a mandatory exclusion is to carefully consider your plea and sentencing options and strategies, to avoid the type of conviction that will trigger mandatory exclusion in the first place.

Factors that trigger permissive exclusion by the OIG

Permissive exclusion may be ordered by the OIG when, for example, there is: (1) a conviction relating to fraud; (2) a conviction relating to obstruction of an investigation or audit; (3) a misdemeanor conviction relating to a controlled substance; (4) a license revocation or suspension; (5) exclusion or suspension by another Federal or State health care program; (6) a claim of excessive charges or unnecessary services or failure of certain organizations to furnish medically necessary services; (7) fraud, kickbacks, and other prohibited activities; (8) an entity controlled by a sanctioned or excluded individual; (9) the failure to disclose required information; (10) failure to supply requested information on subcontractors and suppliers; (11) failure to supply payment information; (12) failure to grant immediate access to premises or records; (13) failure to take corrective action; (14) the default on a health education loan or a scholarship obligation; (15) to individuals controlling a sanctioned entity; or (16) making a false statement or misrepresentation of material fact. See 42 U.S.C. 1320a-7(b) (1)-(16).

Opportunities to avoid permissive exclusion by the OIG

With permissive exclusion, the OIG has discretion whether to exclude the physician, pharmacist, or nurse. The OIG will exercise its discretion based upon the consideration of multiple factors, factors that essentially allow the practitioner to plead his or her case against exclusion. Because each case is unique, the factors that are identified and argued on your behalf will depend upon the skill and experience of your lawyer. For example, I represent physicians, pharmacists, and nurses before the OIG, and I recently helped an Oregon pharmacist avoid permissive exclusion by arguing four mitigating themes, that included: (1) the pharmacist’s unusual circumstances; (2) the pharmacist’s inadequate prior legal representation; (3) the pharmacist’s lack of prior legal or disciplinary history; and (4) the appropriateness in this case of Federal deference to State licensing Boards – i.e., the Oregon Board of Pharmacy and the Washington Board of Pharmacy – as sufficient regulators. It was with a sense of relief that we recently received the OIG’s letter explaining that, based upon our explanation of the underlying circumstances, that the OIG was taking no further action, and instead closing its file.