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May 31, 2022

Health Headlines – May 31, 2022


OIG Issues Advisory Opinion on Medical Group’s Proposed Employment of Individual Excluded from Participation in Federal Health Care Programs

On May 25, 2022, OIG posted an Advisory Opinion analyzing a medical group’s proposal to employ an individual excluded from participation in federal health care programs to perform marketing tasks related to workers’ compensation (WC) programs. OIG determined that the medical group’s proposed arrangement would not constitute grounds for the imposition of sanctions under the civil monetary penalty provision at section 1128A(a)(6) of the Social Security Act (the Act).

The medical group specializes in pain management, and most of its patients are treated for injuries covered by its state’s WC program. According to the medical group, none of these WC programs are federal health care programs.

In 2016, the excluded individual—who was a licensed chiropractor—pleaded guilty to conspiracy, in violation of 18 U.S.C. § 371, in relation to receiving illegal kickbacks for referring WC patients to a certain hospital for spinal surgery.  In 2017, the state’s WC department suspended the excluded individual from participating in the state’s WC system as a provider. OIG excluded the individual in 2021, pursuant to section 1128(a)(3) of the Act.

Under the proposed arrangement, the medical group would establish the excluded individual’s employment as a WC payor relations representative. In this role, the excluded individual’s primary job responsibility would be marketing the medical group’s services to WC payors, and attorneys who work with persons covered by WC payors, by explaining the medical group’s services and the benefits of working with it.  

Moreover, the excluded individual would not provide marketing, billing, or any other services to federal health care program beneficiaries or to any providers or suppliers who refer such beneficiaries to the medical group. Additionally, the excluded individual would have no contact with any federal health care program beneficiaries.  Also, the medical group would create a separate payroll division that will segregate revenues received from non-federal health care program payors from federal health care program payors.

In reaching its conclusion that the proposed arrangement would not implicate the civil monetary penalty provision of the Act, OIG reasoned that the excluded individual would not provide any items or services directly or indirectly to federal health care program beneficiaries, and would be paid from segregated payroll funds derived exclusively from non-federal health care program WC payors.

Finally, OIG limited the scope of its determination, noting that it would not opine on whether the proposed arrangement would violate the terms of the excluded individual’s suspension from participation in the state’s WC system, the physician self-referral law, or the federal False Claims Act.  OIG also acknowledged that the proposed arrangement raises compliance concerns, given the excluded individual’s prior history of participating in kickback schemes involving referrals of WC patients.

OIG Advisory Opinion No. 22-11 is available here.

Reporter, Kelley T. Tran, Los Angeles, +1 213 443 4328, ktran@kslaw.com.

HHS Withdraws Trump Administration’s SUNSET Rule – Last week, HHS withdrew the SUNSET rule, which, in general, would have caused HHS regulations to expire unless reviewed or assessed every 10 years.  As previously reported (see here and here), the Biden administration twice postponed the effective date for the SUNSET rule before ultimately withdrawing the rule in its entirety. 

The rule was scheduled to become effective September 22, 2022.  HHS estimated that, if implemented, the SUNSET rule would have cost $69.9 million and would have significantly altered HHS’s operations.  In withdrawing the SUNSET rule, HHS stated that most commentors had opposed the rule and several stakeholders had filed suit challenging it.

HHS’s withdrawal of the SUNSET rule is available here

Reporter, Isabella E. Wood, Atlanta, + 1 404 572 3527, iwood@kslaw.com.

Also in the News

CMS Posts Independence at Home Program Year 7 Results

The Independence at Home (IAH) Demonstration was established by CMS to test if delivering comprehensive primary care services at home would improve the care provided to Medicare beneficiaries with chronic conditions.  On May 23, 2022, CMS published the IAH Demonstration Performance Year 7 Results.  The results found that the IAH Demonstration has resulted in a reduction of $6,585 in care costs per IAH eligible beneficiary.  The IAH Demonstration Year 7 Results Fact Sheet can be found here.