On January 12, 2017, the Office of Inspector General (“OIG”) of the Department of Health and Human Services issued a final rule to expand the exclusion regulations applicable to persons or entities receiving funds, directly or indirectly, from federal health care programs (“Final Rule”).  The Final Rule, which implements Affordable Care Act authority, was issued with an effective date of February 13, 2017; however, the Final Rule is subject to a temporary postponement of its effective date, until approximately March 21, 2017, pursuant to a memorandum issued by the Trump administration delaying implementation of pending regulations to allow the new administration time for review.

The Final Rule expands the OIG’s exclusion authority in order to protect the federal health care programs and their beneficiaries from payments to potentially “untrustworthy” health care providers.  Specifically, the Final Rule expands OIG’s permissive exclusion regulations to reach individuals and entities convicted of interfering with or obstructing investigations and audits, failing to provide payment information, and making false statements and misrepresentations of material facts in applications to participate in the federal health care programs.  Further, the Final Rule implements a 10-year limitations period, grounded in the False Claims Act limitations period, within which OIG must bring an exclusion action.  Additionally, the Final Rule clarifies certain definitions and implements several changes to the aggravating and mitigating factors the OIG considers when determining whether to increase the length of a violator’s exclusion period. Ultimately, the Final Rule significantly strengthens OIG’s exclusion authority by expanding the grounds for exclusion and the depth of its reach to individuals and entities.