Project Exclusion: The OIG’s Latest Attempt to Make Its Exclusion Authority Real

On January 11, 2017, the Office of Inspector General (OIG) at the U.S. Department of Health and Human Services (HHS), issued a new robust set of policy and rule-making guidelines, significantly clarifying and reaffirming regulatory efforts to place both individuals and corporations that engage in fraudulent Medicare and Medicaid programs on the Agency’s exclusionary list. Although such regulatory enhancements strengthen the Agency’s overall approach to combating fraudulent activity, it also seeks to impart a level of “objective fairness” in such process.

For years, the OIG and compliance professionals have understood the Government’s “nuclear threat”; the threat being that if a life science company is convicted of a federal healthcare violation, the company can no longer sell its products to the federal government: no Medicare, Medicaid, CHIP, or VA dollars (e.g., exclusion). Since Medicare and Medicaid account for 37% of the major sources healthcare funding in the U.S., exclusion effectively would wipe a company off the playing field.