EnforceMintz — Additional Health Care Provider Joins the OIG’s “Heightened Scrutiny” List in 2024
The HHS Office of Inspector General (OIG), in connection with its enforcement responsibilities, must exclude a party from the federal health care programs if the party is found to have violated certain federal laws. This type of exclusion is known as “mandatory exclusion.” The OIG’s enforcement authorities also permit — but do not mandate — the agency to exclude a party for other reasons, including the settlement of a False Claims Act (FCA) case even without a determination of wrongdoing. This type of action is known as a “permissive exclusion.” An excluded party cannot participate in federal or state health care programs, including Medicare, Medicaid, and TRICARE.
During FCA settlement negotiations, the OIG may offer the defendant the opportunity to enter into a Corporate Integrity Agreement (CIA) in return for the OIG’s agreement not to exercise its permissive exclusion authority. Under a CIA, the settling defendant agrees, among other things, to adopt and enforce a compliance program that meets the CIA’s terms, and meeting the terms of a CIA can require substantial financial and human resources. Even so, most settling defendants agree to the CIA and direct their counsel to negotiate terms with the OIG (although the OIG generally has more bargaining power than the defendant). At present, there are nearly 200 CIAs listed on the OIG website.
Sometimes, a settling defendant does not wish to agree to a CIA. The reasons for declining a CIA are as varied as the number of parties who refuse them. In those situations, the OIG may initiate a permissive exclusion action against the defendant or may choose to place the party’s name on its “Heightened Scrutiny” list (or may take no action at all). The OIG describes this list, which has existed since 2018, as naming “[p]arties… subject to heightened scrutiny because they refused to agree to [a CIA] sufficient to protect the Federal health care programs.” At present, the list consists of eight providers, along with affiliated individuals, placed under heightened scrutiny since October 1, 2018, and they include a pharmaceutical company (2023), two hospitals (2023 and 2024, respectively), one orthopedics surgical practice (2022), one multi-specialty primary care practice and related clinics (2022), one hospice company (2020), one rehabilitation facility (2019), and a group of dentists, defunct as of March 2020, that had 33 locations (2018). While we do not know the reasons why these providers chose not to agree to a CIA, some appear to be small providers that may have thought that they lacked the resources to implement a CIA. Others, such as the University of Pittsburgh Medical Center and its affiliated physician group are larger, recognizable entities and likely had different reasons for deciding not to accept a CIA.
In 2024, the OIG added another established provider, the University of Colorado Health d/b/a/ UCHealth, to the Heightened Scrutiny list after UCHealth settled an FCA case for $23 million, without an admission of wrongdoing. According to a press release issued by the Department of Justice following the settlement, UCHealth allegedly submitted claims for Medicare and TRICARE reimbursement automatically using Evaluation & Management emergency department facility codes even though it knew the codes did not comply with the rules applicable to its use. In the OIG’s press release, the OIG described UCHealth’s decision not to enter into a CIA and its consequences as follows:
Although UCHealth entered into this health care fraud settlement with the United States, it refused to agree to compliance-related oversight with the HHS-OIG through a Corporate Integrity Agreement. Therefore, as part of the Settlement Agreement, OIG reserved the right to exclude UCHealth for the alleged conduct resolved in the Settlement Agreement. Because UCHealth refused appropriate integrity obligations, OIG may use various tools to monitor UCHealth’s compliance with the Federal health care programs.
As these events have only just occurred, it is too early to know what steps, if any, the OIG will take to monitor UCHealth’s activities. The tools that the OIG says that it or the Centers for Medicare and Medicaid Services may use in conducting heightened scrutiny include claims reviews, desk reviews, quality control reviews, audits, data reviews, unilateral monitoring, investigations, and other similar types of scrutiny to which other providers are not routinely subjected. While most FCA defendants agree to enter into a CIA when requested to do so by the OIG rather than risk being subjected to the OIG’s heightened scrutiny and the potential reputational hit that may come along with that designation, recent developments suggest that at least some large, established providers may be willing to take their chances.
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