Civil Monetary Penalties and Affirmative Exclusions
The Social Security Act authorizes the Secretary of HHS to seek civil monetary penalties (CMPs), assessments, and exclusion for many types of conduct. The Secretary of HHS has delegated many of these authorities to the OIG. In most cases for which the OIG may seek CMPs, the OIG may also seek exclusion from participation in all Federal health care programs (together with certain permissive exclusions, these are referred to as "affirmative exclusions"). Many of the OIG's CMPs are in the Civil Monetary Penalties Law ("CMPL"), 42 U.S.C. § 1320a-7a, and the OIG's CMPs codified elsewhere in the Social Security Act adopt by reference many of the provisions of the CMPL.
The OIG may seek CMPs for a wide variety of conduct. See 42 CFR § 1003.102. For example, the OIG may seek CMPs against any person who:
- Presents or causes to be presented claims to a Federal health care program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent. 42 U.S.C. § 1320a-7a(a)(1)(A) and (B).
- Violates the anti-kickback statute (42 U.S.C. § 1320a-7b(b)) by knowingly and willfully: (1) offering or paying remuneration to induce the referral of Federal health care program business; or (2) soliciting or receiving remuneration in return for the referral of Federal health care program business. 42 U.S.C. § 1320a-7a(a)(7).
- Presents or causes to be presented a claim that the person knows or should know is for a service for which payment may not be made under 42 U.S.C. § 1395nn, the physician self-referral or "Stark" law. 42 U.S.C. § 1395nn(g)(3).
In addition, the OIG may seek a CMP against any hospital that has negligently violated its obligations under 42 U.S.C. § 1393dd, which requires: (1) hospitals that operate an emergency department to provide appropriate medical screening examinations to individuals who present to the hospital and request examination; (2) hospitals to provide stabilizing treatment or an appropriate transfer to any individual who has an emergency medical condition; and (3) hospitals with specialized capabilities and capacity to accept appropriate transfers of individuals with emergency medical conditions. 42 U.S.C. § 1395dd(d)(1)(A). The OIG may also seek a CMP, and in some cases exclusion, against a responsible physician, including an on-call physician, who violates this statute. 42 U.S.C. § 1395dd(d)(1)(B).
The OIG is authorized to seek different amounts of CMPs and assessments based on the type of violation at issue. See 42 CFR § 1003.103. For example, in a case of false or fraudulent claims, the OIG may seek a penalty of up to $10,000 for each item or service improperly claimed, and an assessment of up to three times the amount improperly claimed. 42 U.S.C. § 1320a-7a(a). In a kickback case, the OIG may seek a penalty of up to $50,000 for each improper act and damages of up to three times the amount of remuneration at issue (regardless of whether some of the remuneration was for a lawful purpose). 42 U.S.C. § 1320a-7a(a).
The regulations describing the administrative appeals process for the OIG's CMP cases are at 42 CFR part 1005. The formal initiation of a CMP case occurs when the OIG issues a demand letter describing the sanction sought (CMP, assessment, and/or exclusion) and the factual basis for the sanction. The subject of the action (the respondent) has the right to request a hearing before an administrative law judge (ALJ) within HHS. In such a hearing, the OIG and the respondent have the right to present evidence and make arguments to the ALJ, who issues a written decision. The ALJ's decision may be appealed administratively and to federal court.
Prior to initiating formal administrative CMP or affirmative exclusion proceedings, the OIG seeks to resolve matters through negotiation. Most CMP cases are resolved through settlement with no decision having been made on the merits of the OIG's allegations or the respondent's defenses. If the OIG and the respondent cannot reach a negotiated settlement, the case will result in an administrative decision, and, if appealed, additional administrative and court decisions. Any administrative or court decision represents a finding on the OIG's allegations and the respondent's defenses. Cases involving a decision rather than a settlement agreement are clearly identified below.
Some cases settled by the OIG result from self-disclosures to the OIG (see the OIG self-disclosure protocol. When a health care provider appropriately self-discloses potentially fraudulent conduct, the OIG takes the self-disclosure and the provider's level of cooperation into account when determining the appropriate settlement terms.
The OIG generally reaches settlement with persons against whom the OIG is seeking, or considering seeking, CMPs. The settlement agreements described in this section resulted from OIG investigations and represent a compromise by the OIG and the settling party. Unless specifically identified as an administrative or court decision, all the matters described in this section are settlement agreements. In all of these settled cases, the OIG alleged that certain facts existed and that those facts formed the basis for the OIG to seek a CMP or an affirmative exclusion.
In each CMP or affirmative exclusion case resolved through a settlement agreement, the settling party has contested the OIG's allegations and denied any liability. No judgment or finding of liability has been made against the settling party.
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