OIG Advisory Opinion Addresses Payment After Program Exclusion

The OIG released an Advisory Opinion that confirms what happens after a provider is excluded from participation in federal programs with regard to reimbursement earned prior to exclusion. An excluded practitioner sold a practice to a buyer and as part of the sale required the buyer to remit to the excluded practitioner any payments received for services rendered prior to the exclusion date. The seller sought the Advisory Opinion to make sure this arrangement would not violate the law. If so, it would mean the provider could be subject to administrative sanctions. Technically, the relevant law (section 1128 of the Social Security Act) states that no payments from government programs such as Medicare and Medicaid can be made for any “item or service furnished by that [excluded] individual on or after the effective date of the exclusion.” Payment can’t even be made to another provider who provides services at the “medical direction” or pursuant to a prescription of an excluded physician if the provider had reason to know of the exclusion. The OIG confirmed that this prohibition only applies when the service or item is provided “on or after the effective date of the exclusion.” So it wouldn’t apply to services provided before the exclusion date. Thus, in this case, the seller requesting the opinion could require the buyer to forward any payments received for services the selling practitioner rendered before the exclusion. This advisory opinion, as with all OIG advisory opinions, is only applicable to the factual situation described in the request for the opinion. But this advisory still provides some comfort to providers involved in acquisitions when addressing how to deal with payments received for services rendered prior to an exclusion. Source Office of Inspector General, Advisory Opinion No. 15-02, Feb. 13, 2015. Takeaway: The OIG confirms what may be an obvious expectation of providers—despite being excluded from Medicare participation, providers can keep payments for services rendered prior to that exclusion, regardless of when those payments are received.