A review of three different OIG exclusions provides insight into how the OIG determines the length of the exclusion and how the Administrative Law Judges for the Department of Health and Human Services Departmental Appeals Board views them.

Under the Social Security Act Section 1128, an individual or entity can be excluded from all federal health programs if convicted, or pled guilty, of a criminal offense relating to fraud, theft, patient or substance abuse and the conviction was in connection with the delivery of a health care service or item. 

Further, under 42 U.S.C. Section 1320a-7(a), an individual or entity must be excluded from federal health care programs for a minimum of five years if convicted of a criminal offense related to the delivery of health care services under Medicare.  The OIG can exercise its rights under 42 C.F.R. Section 1001.102(b), to consider aggravating factors to lengthen the exclusion time period, including a loss to the government of $5,000 or more, the acts underlying the conviction were committed for a period of more than one year, and that the sentence included incarceration.

So let’s look at three recent cases to see how this works:

1. Less than five years was justified:

The Administrative Law Judges (ALJ) in the matter of Beckhorn v. OIG, HHS Departmental Appeals Bd., Civil Remedies Div., No CR3641 (Feb. 2015) affirmed the OIG exclusion of a Registered Nurse from all federal health care programs for two years due to a misdemeanor fraud conviction related to the delivery of health care items and the presence of one mitigating factor. Ms. Beckhorn pled guilty to one count of forgery. She was the Director of Nursing at a nursing home in NY where she forged documents to state surveyors that falsely stated nurses gave medication to residents on certain dates.

 The ALJ found the two year term to be fair in light of the fact that she pled guilty and the healthcare fraud was directly related to falsifying medical records regarding the administration of medication. There were no other aggravating circumstances.  

2. Five years was just enough:

The ALJ in the matter of Castaneda v. OIG HHS Departmental Appeals Bd., Civil Remedies Div., No CR3607 (Jan. 29, 2015) affirmed a five  year exclusion of a licensed nurse from all federal health care programs due to a felony fraud conviction in connection with the delivery of health care items or services. In this case, Ms. Castaneda was a licensed Vocational Nurse working in a Texas nursing home. She kept for herself hydrocodone pills she was supposed to administer to residents.  She pled guilty to two felony counts of knowingly possessing and obtaining a controlled substance by fraud.  

The ALJ said the definition of conviction includes deferred convictions, regardless of how state law treats such convictions. Further, the ALJ held that trustworthiness is not a basis for which to overturn an exclusion

3. 18 years was well deserved:

After a jury convicted Richard Hogan of conspiracy to commit healthcare fraud by participating in a two-and-a-half year scheme to submit fraudulent claims to Medicare for non-medically necessary services, and to induce referrals through kickbacks, the scheme cost Medicare $983,652.00.  He was sentenced to 60 months in prison and ordered to pay restitution to HHS in the amount of $988,539.00.

The ALJ affirmed the 18 year OIG exclusion period because the conviction directly related to the delivery of services under Medicare and due to his conspiracy to defraud Medicare by submitting fraudulent claims. The statue in this case required (mandatory) exclusion when there is a conviction, regardless of whether an appeal is pending.  The 18 year exclusion period was reasonable because the significance of aggravating factors entitled them to substantial weight, and there were no mitigating factors. The ALJ noted the fraud totaled 197 times the $5,000 minimum threshold in the statute.

Summary:

The length of the exclusion is directly correlated to the facts, fraudulent money involved and whether there were aggravating factors. Misdemeanor convictions can lead to less than five year terms, but felony convictions will lead to at least five years and up to indefinite.  Also, a plea of guilt is the same as being convicted.


 You Might Also Enjoy:
History of the OIG Exclusion List – what if it didn’t exist?
Healthcare Compliance – applying lessons from kindergarten
2016 Already? The OIG Work Plan is here
Even the Boss can be Excluded when Healthcare Fraud is Committed

Do you think trustworthiness is a basis to overturn an exclusion? Share your thoughts below.

Michael Rosen, ESQ

Written by Michael Rosen, ESQ
ProviderTrust Co-Founder, mrosen@providertrust.com

Michael brings over 20 years of experience founding and leading risk mitigation businesses, receiving numerous accolades such as: Inc Magazine’s Inc 500 Award and Nashville Chamber of Commerce Small Business of the Year
Connect with Michael on Linkedin

Have you seen our recent “Comply with Mike” healthcare compliance video series? If not, be sure to check it out: Healthcare Compliance – what’s all the fuss about?