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House Passes Bill to Strengthen OIG Enforcement Under Fraud and Abuse Violations

On September 22, 2010, the House passed HR 6130: Strengthening Medicare Anti-Fraud Measures Act of 2010 (the “Bill”), introduced by Reps. Pete Stark (D-CA) and Wally Herger (R-CA). The Bill provides for an expanded “permissive exclusion from participation in Federal health care programs to individuals and entities affiliated with sanctioned entities.” Summaries of the pertinent definitions are below:
– “Individuals or entities affiliated with a sanctioned entity” includes any person who has or had an ownership interest in a sanctioned entity, or affiliated entity, at the time of the fraudulent conduct and who knew, or should have known, about the conduct; any person who is or was an officer or managing employee of a sanctioned entity or affiliated entity of such sanctioned entity at the time of the conduct that formed the basis for the conviction or exclusion from Federal health care programs; or any affiliated entity of a sanctioned entity.

– “Sanctioned entity” is means an entity that has been convicted of making false statements or false claims to a Federal health care program; or an entity that has been excluded from participating in a Federal health care program or State health care program.

– “Affiliated entity” is defined as an entity affiliated with a sanctioned entity and “an entity that was so affiliated at the time of any of the conduct that formed the basis for the conviction or exclusion….”

– An entity is affiliated with another entity if one of the following apply:

One of the entities is or was, at the time in which the conduct that formed the basis for the conviction or exclusion, a person with an ownership or control interest;

There is or was, at the time in which the conduct that formed the basis for the conviction or exclusion, a person with an ownership or control interest in both entities; or

There is or was, at the time in which the conduct that formed the basis for the conviction or exclusion, an officer or managing employee of both entities.

According to Rep. Herger’s press release, “the legislation expands the authority of the HHS Office of Inspector General (OIG) to allow it to ban corporate executives from doing business with Medicare if their companies were convicted of fraud. It also gives the OIG the ability to exclude parent companies that may be committing fraud through shell companies.” The Bill has passed in the House and was received and read in the Senate’s Committee on Finance on September 23.

For more information, please contact Adrienne Dresevic, Esq., Carey F. Kalmowitz, Esq. or Robert S. Iwrey, Esq. at (248) 996-8510 or (212) 734-0128 or Daniel B. Brown, Esq. at (770) 804-6475, or visit our Stark and Anti-Kickback specialty page on the HLP website.

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