Statutes of limitation serve an essential purpose in ensuring that claims are timely pursued before evidence becomes stale, and that parties can manage their affairs without a cloud of potential liability hanging over them indefinitely. These purposes apply with particular force in the context of the United States Department of Health and Human Services, Office of Inspector General's authority to exclude health care providers from participation in Medicare and Medicaid due to the importance of those programs to the financial survival of providers.
OIG gave short shrift to the purposes of limitations periods in a proposed rule issued on May 9 regarding its exclusion authority. The proposed rule would amend the regulations governing exclusion from Medicare and state health care programs to provide that exclusion is "neither time barred nor subject to any statute of limitations period, even when the exclusion is based on violations of another statute that may have a specified limitations period." Comments to the proposed rule must be submitted by July 8.
OIG indicates that the amendment is based on the absence of any express limitations period in 42 U.S.C. § 1320a-7 ("the Act").According to OIG, no limitations period should apply even though exclusions must be based on, and the Act therefore refers to, violations of the prohibitions on fraud and kickbacks that are governed by statutes of limitations. In other words, even though the limitations period for a False Claims Act action is presumptively six years, according to OIG no statute of limitations applies to an exclusion proceeding based on the alleged submission of false claims.
OIG acknowledges concerns that its proposed rule could have the result that "an individual or entity could be excluded for conduct that occurred years before and that does not bear on the person's current trustworthiness or integrity." OIG also acknowledges concerns that "after the passage of significant time, evidence becomes difficult or impossible to gather." Based on these concerns, OIG decided in 2002 not to finalize a proposed regulation providing that there would be no time limitation on OIG's imposition of program exclusions. Moreover, OIG indicates that it still "agree[s] that, as a general matter, recent acts are more indicative of current trustworthiness than acts that took place in the distant past." However, OIG now states that it "believe[s] that conduct that is more than 6 years old may sometimes form a proper basis to conclude that a person should be excluded."
OIG dismisses any notion that the proposed amendment will prejudice defendants. It argues that exclusion decisions are often appropriately made long after the conduct occurs, when parties reach a global settlement of civil and criminal liability for alleged fraud that may include payment of restitution, fines, or penalties as well as compliance measures. "Until a settlement agreement is reached," OIG states, it "cannot know whether the provider will agree to make such payments or subject itself to appropriate compliance measures. Therefore, in most cases it makes sense for the OIG to decide whether to impose an exclusion based on the facts and circumstances at the time of the potential settlement." Alternatively, OIG states, if a case does not settle and is litigated, "the OIG generally waits to see what the civil findings are before determining whether to seek an exclusion."
What these arguments ignore is the key purpose behind statutes of limitations in ensuring prompt assertion of claims. In the absence of a limitations period, there is nothing to prevent OIG from waiting indefinitely to decide whether to exclude a provider. The proposed rule gives OIG unlimited authority to wield its exclusion power whenever it so chooses long after a settlement and eliminates any pressure on OIG to resolve the issue at the bargaining table. Moreover, far from facilitating settlements, the proposed rule would likely make them more difficult to achieve, while simultaneously providing less closure for providers.
Comments to the proposed rule must be received by OIG no later than 5:00 p.m. EST on July 8, 2014. They can be submitted electronically through the Federal eRulemaking Portal at http://www.regulations.gov; by regular, express, or overnight mail to Patrice Drew, Office of Inspector General, Department of Health and Human Services, Attention: OIG-403-P2, Cohen Building, 330 Independence Avenue SW, Room 5541C, Washington, DC 20201; or by hand or courier to the same address as for mailed comments.