The U.S. Department of Health and Human Services Office of Inspector General ("HHS OIG") announced a new legal team dedicated to pursuing civil monetary penalties ("CMPs") and exclusions.
The new litigation task force will be used to complement other enforcement efforts of DOJ and to fill in enforcement gaps. The task force will focus on levying CMPs and excluding individuals and organizations from participating in the Medicare and Medicaid programs. Led by Robert Penezic, a current HHS OIG deputy branch chief, the new litigation team will have at least 10 dedicated attorneys once it is fully staffed. Their task will be to ramp up civil enforcement actions against providers and individuals in cases initiated by HHS OIG, including cases related to improper billing under the Medicare and Medicaid programs, kickbacks, and compliance with corporate integrity agreement ("CIA") obligations. The new enforcement team will pursue cases that arise from referrals to HHS OIG, False Claims Act ("FCA") litigation, and the monitoring of CIAs.
From a practical standpoint, the new HHS OIG task force likely means more enforcement of cases that DOJ does not pursue. Over the past few years, HHS OIG has reported an increase in settlements under its CMP law related to affirmative enforcement actions (as opposed to selfdisclosures). Correlating to the increase in CMP settlements is an increase in individual liability and exclusions, particularly for managers, executives, and physicians. At the American Health Lawyers Association annual meeting, HHS OIG referenced several enforcement matters to further highlight its activities. One such example was a 15-year exclusion and $1.5 million settlement for a physician who allegedly submitted physical therapy claims for services where he was not present. HHS OIG commented that the physician had, among other allegations, submitted claims for procedures furnished at the same time but in different locations. Another example was a settlement with a drug company for billing for drugs that were not dispersed. And another example involved an FCA lawsuit pursued by DOJ against a diagnostic center related to kickbacks. As a separate enforcement action, HHS OIG affirmatively pursued CMPs against 12 physicians involved in the alleged kickback conduct. The recovery by HHS OIG in the individual settlements under its CMP authority was greater than the recovery in the related FCA case.
We expect that the new enforcement team will continue to substantially increase audit and enforcement activities throughout the healthcare industry. The CMPs allow for various recoveries, including treble damages and up to a $50,000 penalty for each occurrence involving certain conduct. In addition, HHS OIG's exclusion authority can prevent entities from participating in the Medicare or Medicaid programs for an extended period or indefinitely. Aside from the more obvious financial implications of losing participation eligibility in government-funded healthcare programs, an exclusion can also impact participation in federal grants, cooperative agreements, and other procurement programs.
With the addition of another government enforcement team in the healthcare industry, healthcare providers as well as healthcare institutions and their directors, owners, executives, and managers should revisit their compliance policies and procedures with an eye toward strengthening those programs. By testing and improving internal audit functions, developing enhanced policies and procedures, and conducting internal investigations when advisable, providers, executives, and individuals can more effectively identify, mitigate, and manage their compliance risks to better defend their actions and decisions should they become the subject of an affirmative enforcement inquiry by this powerful task force.
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