The HHS Office of the Inspector General (OIG) recently published some new guidance about how it will exercise its "permissive exclusion" authority. This new guidance is important because it emphasizes the importance of a proactive and aggressive compliance program for any health care entity. It also provides some significant incentives for your senior management to support a strong compliance program. Specifically, the guidance details the factors that the OIG will use to determine whether to use its permissive authority to exclude an "officer or managing employee" from participation in government programs following sanctions against a company. This authority can be exercised even in situations where the officer or managing authority did not have knowledge of the inappropriate company action—the OIG can exclude "when there is evidence that an officer or managing employee knew or should have known of the conduct."

Accordingly, in determining whether to exercise its exclusion authority, the OIG will review factors including:

  • The circumstances of the misconduct and seriousness of the offense;
  • The individual's role in the sanctioned entity
  • The individual's actions in response to the misconduct; and
  • Other information about the entity

In addition to this new guidance, HHS also has issued a request for information on the guidance it will be issuing in the future about required elements for compliance programs in the health care industry (as required by PPACA).

This new guidance and the increasing focus on health care fraud activities across the federal government indicate that this is a good time to be re-evaluating your corporate compliance program, to ensure that your program is taking steps to remain proactive and consistent with evolving best practices. While companies hope that they will not face sanctions from the federal government, companies across the health care spectrum should recognize the importance of this increased emphasis on compliance programs, both as a means of preventing or minimizing inappropriate activity and reducing the potential risks from an investigation.

Click here to view the guidance.