AMARILLO, TX – If an individual is convicted of a crime, particularly one that pertains to a health care product or service paid for by a federal health care program (“FHCP”), it is likely the individual will receive a letter from the OIG that begins with something like the following: “Effective ___ days from the date of the letter, you will be excluded from participating in FHCPs.”

Assume that the individual is an employee of a DME supplier. The supplier may have two questions:

• Assume that according to the OIG letter, the effective date of the exclusion is March 1, 2023. Assume that prior to March 1, 2023, the individual appeals the exclusion to an Administrative Law Judge (“ALJ”). The appeal will not be concluded until well after March 1, 2023. Will the exclusion (i) be stopped (or “stayed”) until after the ALJ issues a ruling or (ii) go into effect on March 1, 2023 and remain in effect during the appeal process?
• If the individual is excluded, can the DME supplier nevertheless continue to employ the person in some capacity?

This is a slippery slope. The OIG has a great deal of discretion in deciding whether to impose Civil Monetary Penalties (“CMPs”) on a DME supplier that employs an excluded individual. The safest course of action is for the DME supplier not to employ the excluded individual in any capacity.

If the DME supplier nevertheless decides to employ an excluded person in some capacity, here are some guidelines:

• The OIG can impose CMPs on a DME supplier that employs an excluded individual “to provide items or services payable by an FHCP.”
• The above language means that no FHCP payments can be made for items or services furnished by the excluded individual.
• If no FHCP directly or indirectly pays for items/services provided by the excluded individual, the risk of employing the excluded individual is reduced.
• If the DME supplier employs the excluded individual to furnish items or services solely to non-FHCP patients, the risk of an OIG enforcement action is reduced.

Here are examples of services that an excluded individual may be able to provide to a DME supplier in which the risk of an OIG enforcement action is low:

• The excluded individual might develop online and/or print materials designed to educate (i) patients about maintaining healthy lifestyles and/or (ii) the supplier’s employees about personal growth.
• The excluded individual might be a delivery driver for (i) cash-pay patients and (ii) commercial insurance patients in which there is no connection between the commercial insurer and an FHCP.
• The excluded individual might be a custodian.
• The excluded individual might be a marketing rep in which he/she only generates (i) cash-pay patients and (ii) commercial insurance patients in which there is no connection between the commercial insurer and an FHCP.
• The excluded individual might be a warehouse worker who handles products not connected to an FHCP.

Assume that the excluded individual intends to appeal the exclusion. The question is whether the exclusion will go into effect on the date specified in the letter (e.g., March 1, 2023) … or whether an appeal filed before the exclusion date will stop the exclusion from going into effect until after the appeal is completed.

It is likely that (i) the exclusion will go into effect on March 1, 2023 and (ii) will not be stayed (delayed) if the individual files an appeal. This opinion is based on the following:

• The language in the hypothetical letter (above) is a notice of exclusion. The OIG (i) has the discretion of deciding when the exclusion will go into effect and (ii) will factor in the risk to individuals receiving services under an FHCP in determining the type of notice of exclusion to issue.
• The OIG can issue three different types of exclusion notices: (1) a notice of intent to exclude (42 C.F.R. § 1001.2001); (2) a notice of exclusion (42 C.F.R. § 1001.2002); and (3) a notice of proposal to exclude (42 C.F.R. § 1001.2003).
• Under 42 C.F.R. § 1001.2003(c), if the OIG determines that the health or safety of individuals receiving services under an FHCP warrants the exclusion taking place prior to the completion of an ALJ proceeding, the OIG will proceed under 42 C.F.R. §§ 1001.2001 and 1001.2002.
• Assume the individual receives a notice of exclusion. The information required in a notice of exclusion is contained in 42 C.F.R. § 1001.2002. Specifically, 42 C.F.R. § 1001.2002 contains (i) the process of issuing the notice about the exclusion and (ii) the information that is required to be in it. Notably, 42 C.F.R. § 1001.2002 does not contain language indicating that the exclusion is stayed pending appeal. Contrast this with 42 C.F.R. § 1001.2003(b). There, we find an example of language in the regulations for whether an exclusion will be stayed if an appeal is pursued pursuant to 42 C.F.R. § 1001.2003(b). § 1001.2003(b) states that in the event of a proposal to exclude, an exclusion will be stayed if a timely written request for a hearing is submitted, and the OIG has determined that the health or safety of individuals receiving services under an FHCP does not warrant immediate exclusion. Since 42 C.F.R. § 1001.2002 does not contain language like in 42 C.F.R. § 1001.2003(b), the omission indicates that the exclusion will take place on the date as stated in the letter regardless of whether there is an appeal submitted.
• According to 42 C.F.R. § 1001.3005, an exclusion will be withdrawn, and an individual will be reinstated retroactive to the effective date of the exclusion if the exclusion is reversed or vacated at any stage of an individual’s administrative appeals process. This regulation indicates that the exclusion will only be withdrawn and the individual reinstated if the exclusion is reversed or vacated, not when appealed by the individual.
• Additionally, according to 42 C.F.R. § 1005.20, the ALJ will issue an initial decision on the appeal based on the record that will contain findings of fact and conclusions of law. The ALJ may affirm, increase, or reduce the exclusion imposed by the OIG or reverse the imposition of the exclusion. There is no mention of the exclusion being stayed pending the appeal to the ALJ.
• The period of exclusion will likely commence before the ALJ hearing, so any period of exclusion imposed by the ALJ will be deemed to begin on the date that the exclusion originally went into effect. If the excluded individual appeals and the ALJ does not reverse the exclusion, the exclusion will still be effective on the date listed in the letter.

Based on the above regulations, if the letter states that effective e.g., March 1, 2023, the OIG is excluding the individual from participating in FHCPs, the exclusion will likely remain in effect during the ALJ appeal process. By electing to issue a notice of exclusion, the OIG has determined there is some risk to individuals who are covered by an FHCP to warrant immediate exclusion.

AAHOMECARE’S EDUCATIONAL WEBINAR

Copayment Collection and Patient Assistance Programs

Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato & Matthew D. Earl, Esq., Brown & Fortunato

Tuesday, February 14, 2023

1:30-2:30 p.m. CENTRAL TIME
Federal law is clear: a DME supplier must make a reasonable effort to collect copayments. All (or virtually all) commercial insurers, including Medicare Advantage Plan, impose the same requirement. If a DME supplier routinely waives or reduces copayments, it can be held liable under the federal anti-kickback statute, federal beneficiary inducement statute, and federal False Claims Act. In fact, many federal criminal and civil cases brough against DME suppliers (often at the instigation of a whistleblower) are based, in whole or in part, on the failure to make a reasonable effort to collect copayments. In the same vein, insurers will terminate agreements with suppliers on the basis of not making a reasonable effort to collect copayments. This program will (i) discuss what it means to “make a reasonable effort” to collect copayments; (ii) discuss how a supplier can implement a financial hardship policy that allows the supplier to waive/reduce a copayment on a patient-by-patient basis; (iii) point out that the existence of such a financial hardship policy cannot be advertised; (iv) discuss how a DME supplier can implement a patient assistance program; and (v) discuss how a supplier can access charities that may be in the position to assist patients in paying their copayments.

Register for Copayment Collection and Patient Assistance Programs on Tuesday, February 14, 2023, 1:30-2:30 p.m. CT, with Jeffrey S. Baird, Esq., and Matthew D. Earl, Esq., of  Brown & Fortunato.

Members:  $99
Non-Members:  $129

Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato, PC, a law firm with a national health care practice based in Texas. He represents pharmacies, infusion companies, HME companies, manufacturers and other health care providers throughout the United States. Mr. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization and can be reached at (806) 345-6320 or [email protected].