Collections Allowed for Pre-Exclusion Services

Advisory Opinion 15-02, issued by the Office of the Inspector General (“OIG”) for the Department of Health and Human Services on February 13, 2015 offers some, albeit minimal, relief for providers excluded from participation on Medicare and other federal healthcare programs.

In the Advisory Opinion, the Requestor was an individual physician who as excluded from participation in Medicare, Medicaid and all other federal healthcare programs after entering a settlement agreement to resolve criminal and civil charges.  As part of the settlement, the Requestor had to sell its medical practice.  The exclusion was effective as of October 25, 2013.  However, the Requestor and its practice had billed federal healthcare programs for services prior to that date, which services were not covered by the settlement.  After sale of the practice, payment was received for the services.

The Requestor asked the OIG if those payments could be retained.  The OIG said the payments could be retained by the Requestor and such retention would not violate the Anti-Kickback Statute.  The OIG stated that exclusion prevents the submission of claims by the individual or anyone on that individual’s behalf.  If any claims are submitted by or on behalf of an excluded individual, then civil monetary penalties may be imposed.

However, the prohibition only applies to services performed on or after the date of exclusion.  In the scenario presented by the Requestor, the claims related to services performed prior to the effective date of the exclusion.  As such, the OIG allowed the payment.  It should be noted that the Advisory Opinion does not purport to alter the terms of the Requestor’s settlement with the government, which prohibited submission of claims for services covered by the settlement agreement.

As with all Advisory Opinions, it should be noted that the OIG states it only applies to the exact factual scenario  presented and cannot be relied upon by others.  Despite this limiting statement, Advisory Opinions are always looked at as providing guidance for handling future situations.

The outcome of the Advisory Opinion seems logical, and offers a clear statement from the OIG that may influence outcomes going forward.  Whenever an individual or entity is excluded from Medicare or other federal healthcare programs, the cause and result are very serious.  The seriousness of the situation can result in caution about how to treat the situation.  At the same time, just because exclusion is imposed, does not mean that all services were rendered in violation of applicable law.  For those services that did not violate applicable law, payment should be made.  This Advisory Opinion provides a means and justification for obtaining such payment.

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About Matt Fisher

Matt is the chair of Mirick O'Connell's Health Law Group and a partner in the firm's Business Group. Matt focuses his practice on health law and all areas of corporate transactions. Matt's health law practice includes advising clients with regulatory, fraud, abuse, and compliance issues. With regard to regulatory matters, Matt advises clients to ensure that contracts, agreements and other business arrangements meet both federal and state statutory and regulatory requirements. Matt's regulatory advice focuses on complying with requirements of the Stark Law, Anti-Kickback Statute, fraud and abuse regulations, licensing requirements and HIPAA. Matt also advises clients on compliance policies to develop appropriate monitoring and oversight of operations.
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