OIG Proposes Expanding, Reorganizing CMP Rules

16559871_lThe Department of Health and Human Services Office of Inspector General (OIG) published May 11 a proposed rule (79 Fed. Reg. 27080) to codify its expanded authority under the Affordable Care Act (ACA) to impose civil monetary penalties (CMPs) for fraud and abuse of federal health care programs.

The proposed rule follows one issued on May 9 (79 Fed. Reg. 26810) that implements ACA changes significantly expanding OIG’s exclusion authority.

OIG is proposing to update and amend its CMP rules to reflect the changes made by the ACA and other statutes.

Specifically, the ACA provides for CMPs, assessments, and exclusion for:

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

Broadened Liability

The proposed rule also would codify a provision of the ACA clarifying that penalties, and applicable assessments, may be imposed against a Medicare Advantage (MA) or Part D contracting organization when its employees or agents, or any provider or supplier who contracts with it, engages in prohibited conduct.

“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 proposed rule says.

The proposed rule also adds penalties and assessments, per the ACA, against a MA or Part D contracting organization that

  • Enrolls an individual without his or her prior consent;
  • Transfers an enrollee from one plan to another without his or her prior consent;
  • Transfers an enrollee solely for the purpose of earning a commission;
  • Fails to comply with statutory or regulatory marketing restrictions; or
  • Employs or contracts with any person who engages in conduct described in Section 1857(g)(1) of the Social Security Act.

Reorganization of CMP Rules

OIG also is proposing to reorganize its CMP rules at 42 C.F.R. pt. 1003 “to make the regulations more accessible to the public and to add clarity to the regulatory scheme.”

Specifically, OIG said, the reorganized Part 1003 groups CMP authorities into subparts by subject matter.

As part of the reorganization, OIG is proposing to create a single, primary list of factors it will consider in determining the exclusion period and the amount of penalties and assessments for violations. The factors are:

  • 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.

Claims-Mitigating/Aggravating Factor

OIG is proposing to update the claims-mitigating factor by increasing the maximum dollar amount considered as mitigation from $1,000 to $5,000.

“Conduct resulting in more than $5,000 in federal health care program loss is an indication of more serious conduct,” OIG said. “Given the changes in the cost of health care since this regulation was last updated in 2002, we believed the $1,000 threshold was lower than appropriate.”

OIG also proposes assigning a specific dollar value—$15,000—to the claims-aggravating factor. “[W]e . . . believe that a loss greater than $15,000 is an indication of serious misconduct” and using a specific dollar threshold “increases transparency and provides better guidance to the provider community.”

Degree-of-Culpability Factor

OIG is proposing to add a mitigating circumstance to the degree-of-culpability factor for taking “appropriate and timely corrective action in response to the violation,” the rule says.

To qualify as taking corrective action, under the proposed rule, the violation would have to be disclosed to OIG through its Self-Disclosure Protocol.

“We do not believe that without self-disclosure through the Protocol, the person qualifies for the mitigation of the potential monetary or exclusion remedies,” the proposed rule indicates.


OIG says it “anticipates that CMP collections may increase in the future in light of the new CMP authorities and other changes proposed in this rule.” OIG added, however, that it could not predict the extent of any increases at this time.

According to the proposed rule, OIG collected a total of more than $165.2 million in CMP resolutions in calendar years 2004–2013.


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