Federal Register / Vol. 89, No. 231 / Monday, December 2, 2024 / Proposed Rules 95143 

Executive Airport, Austin, TX; within 2 

miles each side of the 131° bearing from 

Austin Executive Airport extending 

from the 6.6-mile (previously 6.3-mile) 

radius of Austin Executive Airport to 

11.2 (decreased from 11.3) miles 

southeast of the Austin Executive 

Airport; and within 2 miles each side of 

the 311° bearing from the Austin 

Executive Airport extending from the 

6.6-mile (previously 6.3-mile) radius of 

Austin Executive Airport to 10.9 

(increased from 10.5) miles northwest of 

the Austin Executive Airport; 

Establishing Class E airspace extending 

upward from 700 feet above the surface 

within a 7-mile radius of Lago Vista TX/ 

Rusty Allen Airport, Lago Vista, TX; 

And establishing Class E airspace 

extending upward from 700 feet above 

the surface within a 6.8-mile radius of 

Lakeway Airport, Lakeway, TX. 

This action is the result of biennial 

airspace reviews and to bring the 

airspace into compliance with FAA 

orders and support IFR operations at 

these airports. 

Regulatory Notices and Analyses 

The FAA has determined that this 

proposed regulation only involves an 

established body of technical 

regulations for which frequent and 

routine amendments are necessary to 

keep them operationally current. It, 

therefore: (1) is not a ‘‘significant 

regulatory action’’ under Executive 

Order 12866; (2) is not a ‘‘significant 

rule’’ under DOT Regulatory Policies 

and Procedures (44 FR 11034; February 

26, 1979); and (3) does not warrant 

preparation of a regulatory evaluation as 

the anticipated impact is so minimal. 

Since this is a routine matter that will 

only affect air traffic procedures and air 

navigation, it is certified that this 

proposed rule, when promulgated, will 

not have a significant economic impact 

on a substantial number of small entities 

under the criteria of the Regulatory 

Flexibility Act. 

Environmental Review 

This proposal will be subject to an 

environmental analysis in accordance 

with FAA Order 1050.1F, 

‘‘Environmental Impacts: Policies and 

Procedures’’ prior to any FAA final 

regulatory action. 

List of Subjects in 14 CFR Part 71 

Airspace, Incorporation by reference, 

Navigation (air). 

The Proposed Amendment 

In consideration of the foregoing, the 

Federal Aviation Administration 

proposes to amend 14 CFR part 71 as 

follows: 

PART 71—DESIGNATION OF CLASS A, 

B, C, D, AND E AIRSPACE AREAS; AIR 

TRAFFIC SERVICE ROUTES; AND 

REPORTING POINTS 

■ 1. The authority citation for 14 CFR 

part 71 continues to read as follows: 

Authority: 49 U.S.C. 106(f), 106(g); 40103, 

40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 

1959–1963 Comp., p. 389. 

§ 71.1 [Amended] 

■ 2. The incorporation by reference in 

14 CFR 71.1 of FAA Order JO 7400.11J, 

Airspace Designations and Reporting 

Points, dated July 31, 2024, and 

effective September 15, 2024, is 

amended as follows: 

Paragraph 6003 Class E Airspace Areas 

Designated as an Extension. 

* * * * * 

ASW TX E3 Austin, TX [Establish] 

Austin-Bergstrom International Airport, TX 

(Lat 30°11′40′′ N, long 97°40′12′′ W) 

Austin-Bergstrom INTL: RWY 18R–LOC, TX 

(Lat 30°11′36′′ N, long 97°40′42′′ W) 

That airspace extending upward from the 

surface within 2.2 miles each side of the 359° 

bearing from the Austin-Bergstrom INTL: 

RWY 18R–LOC extending from the 5-mile 

radius to 7.1 miles north of the AustinBergstrom INTL: RWY 18R–LOC; and within 

2 miles each side of the 359° bearing from the 

Austin-Bergstrom International Airport 

extending from the 5-mile radius of AustinBergstrom International Airport to 6 miles 

north of the Austin-Bergstrom International 

Airport. 

* * * * * 

Paragraph 6005 Class E Airspace Areas 

Extending Upward From 700 Feet or More 

Above the Surface of the Earth. 

* * * * * 

ASW TX E5 Austin, TX [Amended] 

Austin-Bergstrom International Airport, TX 

(Lat 30°11′40′′ N, long 97°40′12′′ W) 

Austin-Bergstrom INTL: RWY 36R–GS, TX 

(Lat 30°10′54′′ N, long 97°39′22′′ W) 

Austin Executive Airport, TX 

(Lat 30°23′51′′ N, long 97°33′59′′ W) 

That airspace extending upward from 700 

feet above the surface within a 7.5-miles 

radius of the Austin-Bergstrom International 

Airport; and within 4 miles either side of the 

179° bearing from the Austin-Bergstrom 

INTL: RWY 36R–GS extending from the 7.5- 

mile radius of Austin-Bergstrom International 

Airport to 7.7 miles south of the AustinBergstrom INTL: RWY 36R–GS; and within a 

6.6-mile radius of Austin Executive Airport; 

and within 2 miles each side of the 131° 

bearing from Austin Executive Airport 

extending from the 6.6-mile radius of Austin 

Executive Airport to 11.2 miles southeast of 

Austin Executive Airport; and within 2 miles 

each side of the 311° bearing from Austin 

Executive Airport extending from the 6.6- 

mile radius of Austin Executive Airport to 

10.9 miles northwest of Austin Executive 

Airport. 

* * * * * 

ASW TX E5 Lago Vista, TX [Establish] 

Lago Vista TX/Rusty Allen Airport, TX 

(Lat 30°29′55′′ N, long 97°58′10′′ W) 

That airspace extending upward from 700 

feet above the surface within a 7-mile radius 

of the Lago Vista TX/Rusty Allen Airport. 

* * * * * 

ASW TX E5 Lakeway, TX [Establish] 

Lakeway Airpark, TX 

(Lat 30°21′27′′ N, long 97°59′40′′ W) 

That airspace extending upward from 700 

feet above the surface within a 7-mile radius 

of the Lakeway Airpark. 

* * * * * 

Issued in Fort Worth, Texas, on November 

26, 2024. 

Steven T. Phillips, 

Acting Manager, Operations Support Group, 

ATO Central Service Center. 

[FR Doc. 2024–28149 Filed 11–29–24; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Office of Inspector General 

42 CFR Parts 1000 and 1001 

RIN 0936–AA12 

Health Care Programs: Fraud and 

Abuse; Revisions to the Office of 

Inspector General’s Exclusion 

Authorities 

AGENCY: Office of Inspector General 

(OIG), Department of Health and Human 

Services (HHS). 

ACTION: Proposed rule. 

SUMMARY: This proposed rule proposes 

to amend the regulations relating to 

exclusion authorities under the 

authority of the Office of Inspector 

General (OIG) of the Department of 

Health and Human Services (HHS or the 

Department). The proposed rule would 

codify changes made by the Medicaid 

Services Investment and Accountability 

Act of 2019 (MSIAA), that added 

exclusion authorities related to 

misclassification and false information 

about outpatient drugs. The proposed 

rule would also update and clarify OIG’s 

procedures for excluding individuals 

and entities from participation in the 

Federal health care programs, including 

the factors that will be considered in 

determining the length of exclusions, 

the provisions governing notices of 

exclusions, and certain provisions 

related to reinstatement into the 

programs. 


ddrumheller on DSK120RN23PROD with PROPOSALS1
95144 Federal Register / Vol. 89, No. 231 / Monday, December 2, 2024 / Proposed Rules 

DATES: To ensure consideration, public 

comments must be received no later 

than 5 p.m. eastern time on January 31, 

2025. 

ADDRESSES: In commenting, please refer 

to file code OIG–2401–P. Because of 

staff and resource limitations, we cannot 

accept comments by fax transmission. 

You may submit comments in one of 

two ways (no duplicates, please): 

1. Electronically. You may submit 

comments electronically at https://

www.regulations.gov. Follow the 

‘‘Submit a comment’’ instructions and 

refer to file code OIG–2401–P. 

2. By regular, express, or overnight 

mail. You may send written comments 

to the following address: OIG, 

Regulatory Affairs, HHS, Attention: 

OIG–2401–P, Room 5267, Cohen 

Building, 330 Independence Avenue 

SW, Washington, DC 20201. Please 

allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

For information on viewing public 

comments, please see the 

SUPPLEMENTARY INFORMATION section. 

Docket: Go to the Federal 

eRulemaking Portal at https://

www.regulations.gov for access to the 

rulemaking docket, including any 

background documents and the plainlanguage summary of the proposed rule 

of not more than 100 words in length 

required by the Providing 

Accountability Through Transparency 

Act of 2023. 

FOR FURTHER INFORMATION CONTACT: 

David Fuchs, Deputy Branch Chief, 

Office of Counsel to the Inspector 

General, at (202) 763–4750. 

SUPPLEMENTARY INFORMATION: 

Inspection of Public Comments: All 

comments received before the close of 

the comment period are available for 

viewing by the public, including any 

personally identifiable or confidential 

business information that is included in 

a comment. We post all comments 

received before the close of the 

comment period as soon as possible 

after they have been received on the 

following website: https://

www.regulations.gov. 

I. Executive Summary 

A. Purpose and Need for Regulatory 

Action 

MSIAA expanded OIG’s exclusion 

authority to protect the Federal health 

care programs from fraud and abuse by 

allowing OIG to exclude certain 

individuals and entities that knowingly 

misclassify a covered outpatient drug, 

knowingly fail to correct such 

misclassification, or knowingly provide 

false information related to drug pricing, 

drug product information, or data 

related to drug pricing or drug product 

information. OIG proposes to update its 

regulations to codify the changes made 

by MSIAA in the regulations. At the 

same time, OIG proposes to amend other 

sections of the exclusion regulations to 

ensure consistency with statutory 

authority, decrease administrative 

burdens, enhance transparency, and 

improve the efficiency and effectiveness 

of government. The proposed 

amendments include factors that will be 

considered in determining the lengths of 

exclusions, the processes governing 

notices of exclusions, and certain 

provisions related to reinstatement into 

the programs, as well as clarifying 

changes and updates to the regulations. 

B. Legal Authority 

The legal authority for this regulatory 

action is found in: 42 U.S.C. 1302; 

1320a–7; 1395u(j); 1395u(k); 1395y(e); 

and 1395hh. 

II. Summary of Major Provisions 

We propose changes to the exclusion 

regulations at 42 CFR parts 1000 and 

1001 to codify an authority under 

MSIAA, update processes, and make 

clarifying and technical changes to 

existing regulations. Specifically, 

section 6(d) of MSIAA amended section 

1128(b) of the Social Security Act (the 

Act) to add an exclusion authority for 

certain conduct related to the 

misclassification of outpatient drugs, 

and knowingly providing false 

information related to drug pricing, drug 

product information, or data related to 

drug pricing or drug product 

information. 

We propose clarifying changes to 

aggravating and mitigating factors that 

are used to determine periods of 

exclusion under section 1128 of the Act. 

We propose to simplify the mitigating 

factor relating to cooperation and to 

consolidate certain aggravating factors 

relating to other criminal, civil, and 

administrative sanctions into a single 

factor. We propose to modify the 

exclusion authority under section 

1128(b)(12) of the Act, for failure to 

grant immediate access, to eliminate a 

requirement for OIG or a State Medicaid 

Fraud Control Unit (MFCU) to 

demonstrate that the requested material 

is about to be altered or destroyed in 

order to obtain access to the material at 

the time the request is made. We 

propose to modify OIG’s obligations 

with respect to beneficiaries’ access to 

physician services in imposing 

exclusions under section 1128(b)(14) of 

the Act in accordance with the Act. We 

propose to modify the regulatory 

language to align the regulations with 

certain, current OIG practices for 

exclusions imposed under sections 

1128(a) and (b) of the Act and for 

waivers. We propose certain changes to 

the definitions to remove duplication. 

We propose to modify the 

circumstances under which early 

reinstatement is available for 

individuals and entities excluded under 

section 1128(b)(4) of the Act to permit 

individuals who lost their health care 

licenses for reasons related to patient 

abuse and neglect to apply for early 

reinstatement in limited circumstances. 

III. Costs and Benefits 

There are no significant costs 

associated with the proposed regulatory 

revisions that would impose any 

mandates on State, local, or Tribal 

governments or the private sector. 

IV. Background 

A. Exclusion Authority 

The exclusion authorities found in 

section 1128 of the Act are intended to 

protect the Federal health care programs 

and their beneficiaries from 

untrustworthy individuals and entities 

whose behavior has demonstrated that 

those individuals and entities pose a 

risk to program beneficiaries or to the 

integrity of these programs. These 

authorities encompass both mandatory 

exclusions (section 1128(a) of the Act) 

and permissive exclusions (section 

1128(b) of the Act). The Secretary’s 

authority under section 1128 of the Act 

has been delegated to OIG. See 53 FR 

12993 (Apr. 20, 1988). 

The mandatory exclusion authorities 

require OIG to exclude from program 

participation any individual or entity 

convicted of an offense that is: related 

to items or services delivered under 

Medicare and Medicaid; related to 

patient abuse or neglect; or a felony 

related to health care delivery, 

governmental health care programs, or 

controlled substances. Mandatory 

exclusions must be imposed for a 

minimum 5-year period. The permissive 

authorities do not require the 

imposition of an exclusion and may 

either be: (1) ‘‘derivative’’ exclusions 

that are based on actions previously 

taken by a court, other law enforcement, 

or regulatory agencies; or (2) ‘‘nonderivative’’ exclusions that are based on 

OIG-initiated determinations of 

misconduct, e.g., poor quality care or 

submission of false claims for Medicare 

or Medicaid payment. With certain 

exceptions, there are no specified 

minimum periods of exclusion under 

these permissive authorities. 

Over the years, several statutory and 

regulatory provisions have amended or 


ddrumheller on DSK120RN23PROD with PROPOSALS1
Federal Register / Vol. 89, No. 231 / Monday, December 2, 2024 / Proposed Rules 95145 

further clarified OIG’s exclusion 

authorities. For example, the Health 

Insurance Portability and 

Accountability Act of 1996 (HIPAA) 

expanded OIG’s authorities to add 

several exclusion authorities (sections 

1128(a)(3), (a)(4), and (b)(15)) and 

increase minimum or benchmark 

periods of exclusion for certain 

permissive exclusions. The Balanced 

Budget Act (BBA) of 1997 further 

amended OIG’s exclusion authorities by: 

(1) extending the scope of an OIG 

exclusion beyond Medicare and State 

health care programs to all Federal 

health care programs; (2) establishing 

permanent exclusions for persons 

convicted of three or more health carerelated crimes and 10-year exclusions 

for persons convicted of two health 

care-related crimes; and (3) expanding 

the scope of exclusions under section 

1128(b)(8) of the Act. 

The Medicare Prescription Drug, 

Improvement, and Modernization Act of 

2003 (MMA) amended OIG’s authority 

to waive mandatory exclusions. In 2010, 

the Patient Protection and Affordable 

Care Act, Public Law 111–148, 124 Stat. 

119 (2010), as amended by the Health 

Care and Education Reconciliation Act 

of 2010, Public Law 111–152, 124 Stat. 

1029 (2010) (ACA), broadened OIG’s 

waiver authority to permit the 

administrator of a Federal health care 

program to request a waiver if the 

administrator determines that exclusion 

would impose a hardship on 

beneficiaries of that program. In 

addition, the ACA expanded OIG’s 

exclusion authority in several ways, 

including by establishing a new 

permissive exclusion authority under 

section 1128(b)(16) of the Act. On 

January 17, 2017, OIG published a final 

rule addressing new and revised 

exclusion authorities in accordance 

with the ACA and the MMA, as well as 

technical, policy, and clarifying changes 

to 42 CFR parts 1000, 1001, 1002, and 

1006. 

B. Changes Made by MSIAA 

MSIAA expanded OIG’s authority to 

exclude certain individuals and entities 

from participation in the Federal health 

care programs under section 1128 of the 

Act. Section 6(d) of MSIAA established 

a new permissive exclusion authority 

applicable to any manufacturer, or 

officer, director, agent, or managing 

employee of such manufacturer, that 

knowingly misclassifies a covered 

outpatient drug, knowingly fails to 

correct such misclassification, or 

knowingly provides false information 

related to drug pricing, drug product 

information, or data related to drug 

pricing or drug product information. 

The proposed rule would codify this 

statutory authority within the existing 

regulatory framework and address how 

OIG will set the length of exclusions 

imposed under that authority. 

C. Proposed Policy Changes and 

Clarifying Changes 

The proposed rule would revise the 

section governing exclusions under 

section 1128(b)(14) of the Act based on 

an individual’s default on a health 

education loan or scholarship 

obligation. The section currently 

requires OIG to take into account access 

of beneficiaries to physician services for 

which payment may be made under 

Medicare, Medicaid, or other Federal 

health care programs in determining 

whether to impose an exclusion. We 

propose to align the regulation with 

section 1128(b)(14) of the Act by 

limiting OIG’s obligations under this 

section to take into account access of 

beneficiaries to only Medicare and 

Medicaid physician services. By 

aligning the regulation with the 

statutory authority and removing the 

requirement for OIG to take into account 

beneficiary access to physician services 

under Federal health care programs 

other than Medicare and Medicaid, we 

hope to allow for more efficient 

imposition of exclusions under this 

section. 

We propose clarifying changes to 

aggravating and mitigating factors that 

are used to determine periods of 

exclusion under section 1128 of the Act. 

We propose to simplify the mitigating 

factor relating to cooperation and to 

combine certain overlapping factors 

relating to prior civil, criminal, and 

administrative sanctions into a single 

factor. We propose to revise the 

regulation that permits OIG to exclude 

individuals and entities who fail to 

grant OIG or a State MFCU immediate 

access to certain records, to eliminate 

the requirement that OIG or a MFCU 

demonstrate that the requested materials 

are about to be altered or destroyed in 

order to obtain access to the materials at 

the time the request is made, instead of 

within 24 hours of the request. We 

propose to make technical changes to 

the regulations governing exclusions 

under section 1128 of the Act and for 

waivers. We propose to modify the 

circumstances under which early 

reinstatement is available for 

individuals and entities excluded under 

section 1128(b)(4) of the Act. 

The proposed rule would also modify 

the sections governing notice to the 

public and other agencies regarding 

exclusions, notice regarding approval of 

reinstatement requests, and notice 

regarding denial of reinstatement 

requests. These proposed changes 

would modernize notice to the public 

and other agencies and more clearly 

outline OIG’s process for appeals of 

denials of reinstatement requests. 

Finally, the proposed rule would also 

include clarifying changes and updates 

to the exclusion regulations, including 

plain language changes to definitions, 

phrasing, and verbiage ensuring higher 

readability and comprehension for the 

public. Additionally, the proposed rule 

proposes to modernize pronoun 

references. 

V. Provisions of the Proposed Rule 

A. Changes to Part 1000 (Definitions) 

We propose to move the definitions of 

‘‘agent,’’ ‘‘indirect ownership interest,’’ 

‘‘ownership interest,’’ and ‘‘patient’’ 

from § 1001.2 to § 1000.10 (General 

definitions), because these terms are 

used not only in part 1001 but also in 

other parts of subchapter B. We propose 

to modify ‘‘indirect ownership interest’’ 

to correct certain language. The current 

language states that ‘‘‘Indirect 

ownership interest’ includes an 

ownership interest through any other 

entities that ultimately have an 

ownership interest in the entity in 

issue.’’ We propose to modify this 

language to clarify that the indirect 

ownership interest could be in one 

entity or through multiple entities. We 

also propose a technical edit changing 

‘‘in issue’’ to ‘‘at issue.’’ We propose to 

modify the definition of ‘‘ownership 

interest’’ to correct certain language. 

The current language states that an 

ownership interest includes any interest 

in any mortgage, deed, trust or note, or 

other obligation secured in whole or in 

part by the assets of the entity. We 

propose to replace the phrase ‘‘deed, 

trust or note, or other obligation’’ with 

‘‘deed of trust, note, or other 

obligation.’’ The reference to ‘‘deed of 

trust’’ appears in the definition of 

‘‘ownership or control interest’’ at 

§ 1001.2 and in section 1124 of the Act, 

and we believe that ‘‘deed, trust or 

note’’ was a typographical error in the 

regulatory definition because a ‘‘deed of 

trust’’ is an obligation similar to a 

mortgage or note. 

We also propose to modify the 

definition of ‘‘patient’’ to change the 

reference to ‘‘Medicare, Medicaid and 

any other Federal health care program’’ 

to ‘‘any Federal health care program’’ 

because ‘‘Federal health care program’’ 

is a statutorily defined term that 

includes (and is broader than) Medicare 

and State health care programs. See 42 

U.S.C. 1320a–7b(f). Section 1320a–7b(f) 

of U.S. Code title 42 and § 1000.10 

define ‘‘Federal health care program’’ as 


ddrumheller on DSK120RN23PROD with PROPOSALS1
95146 Federal Register / Vol. 89, No. 231 / Monday, December 2, 2024 / Proposed Rules 

‘‘(1) any plan or program that provides 

health benefits, whether directly, 

through insurance, or otherwise, which 

is funded directly, in whole or in part, 

by the United States Government (other 

than the health insurance program 

under chapter 89 of title 5); or (2) any 

State health care program, as defined as 

defined in section 1128(h).’’ 

Lastly, we propose to add a regulatory 

definition of ‘‘knowingly’’ to § 1000.10 

because the term is used in the new 

exclusion authority added by MSIAA. 

We propose the same definition of 

‘‘knowingly’’ that appears in § 1003.110, 

applicable to OIG’s civil monetary 

penalty authorities in section 1128A of 

the Social Security Act (Act). By adding 

the definition to § 1000.10, the 

definition will apply to the regulations 

interpreting both the exclusion statute 

(section 1128 of the Act) and the OIG’s 

civil monetary penalty authorities 

(section 1128A of the Act). The 

proposed language is as follows: 

‘‘Knowingly means that a person, with 

respect to an act, has actual knowledge 

of the act, acts in deliberate ignorance 

of the act, or acts in reckless disregard 

of the act, and no proof of specific intent 

to defraud is required.’’ The definition 

mirrors the definition used in the False 

Claims Act, and is the most widely used 

knowledge standard for civil health care 

fraud. 

B. Changes to Part 1001 

References to Medicare, Medicaid, and 

State Health Care Programs. Title, 

Sections 1001.1, 1001.2, 1001.101, 

1001.102, 1001.201, 1001.301, 1001.401, 

1001.701, 1001.1301, 1001.1401, 

1001.1901, 1001.3002, 1001.3005 

We propose to change the title of part 

1001 from ‘‘Medicare and State health 

care programs’’ to ‘‘The Federal health 

care programs’’ because the statutory 

basis for many of the OIG authorities in 

part 1001 derives from section 1128 of 

the Act, which references ‘‘Federal 

health care program,’’ a defined term 

that includes (and is broader than) 

Medicare and State health care 

programs, as described above. Similarly, 

we propose removing references to 

Medicare and Medicaid in variations of 

the phrase ‘‘Medicare, Medicaid and all 

other Federal health care programs’’ 

throughout part 1001, because the 

statutorily defined term ‘‘Federal health 

care program’’ encompasses Medicare 

and Medicaid. We are proposing to 

remove the references to Medicare and 

Medicaid in the following sections: 

1001.1(a), 1001.101(b), 

1001.401(c)(2)(ii), 1001.701(d)(2)(iv), 

1001.1301(b)(2)(iii), 1001.1401(b)(1), 

1001.1401(b)(4); 1001.1901(a), 

1001.1901(b)(1), 1001.1901(c)(3), and 

1001.1901(c)(5)(i), 1001.3002(b)(3), and 

1001.3005(a). We also propose 

corresponding technical changes to the 

phrases in those sections to account for 

the removal of the references to 

Medicare and Medicaid. Neither the 

removal of the references to Medicare 

and Medicaid, nor the technical 

conforming changes, are meant to 

change the meaning of the phrases to 

which the changes are made. Finally, 

we propose to modernize the pronouns 

throughout part 1001 and make 

corresponding grammatical edits. 

Section 1001.2 Definitions 

We propose deleting the definition of 

‘‘Controlled substance’’ from 1001.2 

because the relevant regulations at 

§§ 1001.101(d) and 1001.401 already 

indicate that the term ‘‘controlled 

substance’’ is being used as defined in 

Federal or State law, so the definition of 

‘‘Controlled substance’’ in § 1001.2 is 

unnecessary. We also propose to move 

certain definitions from § 1001.2 to 

§ 1000.10 and modify them as described 

above. 

Section 1001.101 Basis for Liability 

In § 1001.101(c) and (d), we propose 

to remove the date limitation of August 

21, 1996. The date limitation was 

included because when HIPAA 

amended section 1128 of the Act to add 

new exclusion authorities in sections 

1128(a)(3) and (a)(4) of the Act, it 

specified that only convictions after 

August 21, 1996 (the date of HIPAA’s 

enactment) would be subject to the 

exclusion authorities in those 

subsections. We are proposing to delete 

the date limitation in the corresponding 

regulatory authorities in § 1001.101(c) 

and (d) because it is now obsolete. We 

believe that this change will not impact 

any future exclusions because virtually 

all criminal offenses before August 21, 

1996, are now time-barred from 

prosecution. 

Section 1001.101(c)(2) states ‘‘with 

respect to any act or omission in a 

health care program (other than 

Medicare and a State health care 

program). . . .’’ We propose to make a 

technical change from the word ‘‘and’’ 

to the word ‘‘or’’ in the parenthetical for 

grammatical accuracy. Similar language 

appears in § 1001.201(a)(1)(ii). We 

propose the same technical change for 

that section for grammatical accuracy. 

Aggravating Factors 

When OIG imposes an exclusion 

under section 1128(a), the minimum 

period of the exclusion is required by 

statute to be at least 5 years. However, 

under the regulations the length of an 

exclusion may be extended beyond the 

5-year minimum period if certain 

aggravating factors, as defined in the 

regulations, are present. OIG exclusions 

under certain permissive authorities in 

section 1128(b) are for a period of 3 

years but may be lengthened if certain 

aggravating factors (again, as defined in 

the regulations) are present. This section 

discusses proposed changes to these 

aggravating factors. 

Financial Loss 

The financial loss aggravating factor at 

§ 1001.102(b)(1) currently reads as 

follows: ‘‘The acts resulting in the 

conviction, or similar acts, caused, or 

were intended to cause, a financial loss 

to a government agency or program or 

to one or more other entities of $50,000 

or more. (The entire amount of financial 

loss to such government agencies or 

programs or to other entities, including 

any amounts resulting from similar acts 

not adjudicated, will be considered 

regardless of whether full or partial 

restitution has been made).’’ A similar 

aggravating factor appears in 

§§ 1001.201 and 1001.301. We believe 

that the language of this factor should be 

consistent in each place it appears to 

avoid any question about whether court 

decisions interpreting it under one 

section should apply to its application 

under other sections. Therefore, we 

propose two technical changes to 

§ 1001.102(b)(1) to match the language 

of this factor as it appears in 

§§ 1001.201(b)(2)(i) and 

1001.301(b)(2)(viii): to move the phrase 

‘‘of $50,000 or more’’ to after ‘‘a 

financial loss,’’ and to delete the phrase 

in the parenthetical ‘‘to such 

government agencies or programs or to 

other agencies’’ because it is duplicative 

of language outside the parenthetical. In 

§§ 1001.201(b)(2)(i) and 

1001.301(b)(2)(viii), we propose to 

delete the phrase ‘‘or had a significant 

financial impact on program 

beneficiaries or other individuals’’ 

because we propose adding this concept 

to a separate aggravating factor at 

§§ 1001.201(b)(2)(iii) and 

1001.301(b)(2)(ii) as described in the 

next paragraph. 

Impact on Beneficiaries and Other 

Individuals 

Section 1001.102(b)(3), applicable to 

mandatory exclusions, includes as an 

aggravating factor whether the acts that 

resulted in the conviction, or similar 

acts, had a significant adverse physical, 

mental, or financial impact on one or 

more program beneficiaries or other 

individuals. A similar aggravating factor 

applies to certain permissive exclusions 

under §§ 1001.201 and 1001.301, but 


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those sections do not reference 

‘‘financial’’ impact. In 

§§ 1001.201(b)(2)(iii) and 

1001.301(b)(2)(ii), we propose to add 

‘‘or financial’’ to the aggravating factor 

relating to impact on program 

beneficiaries and other individuals. We 

believe it is appropriate to consider all 

impacts on beneficiaries under the same 

aggravating factor. This change would 

make this aggravating factor consistent 

with a similar factor applicable to 

mandatory exclusions under 

§ 1001.102(b)(3) and would move the 

analysis of financial impact on 

beneficiaries from the aggravating factor 

relating to financial loss (discussed 

above) to the aggravating factor relating 

to impact on beneficiaries. 

In § 1001.301(b)(2)(ii), the aggravating 

factor is applied to convictions related 

to obstruction of an investigation or 

audit under section 1128(b)(2) of the 

Act. We are proposing language changes 

to this factor because we believe it is 

important to apply similar factors 

consistently in all applicable 

exclusions. Consistent language ensures 

that judicial interpretations of certain 

language will be applicable wherever 

the language appears, and that the 

public can reasonably expect OIG to 

apply the factors consistently. 

Therefore, we propose to replace the 

words ‘‘interference or obstruction’’ 

with ‘‘acts that resulted in the 

conviction.’’ When referring to the 

conduct leading to a conviction, other 

sections of the regulation use the word 

‘‘acts,’’ and interference or obstruction 

are the ‘‘acts’’ at issue in the exclusion 

authority related to convictions for 

obstruction. 

For the same reason, in 

§ 1001.401(c)(2)(ii), which applies this 

aggravating factor to misdemeanor 

convictions relating to controlled 

substances, we propose to reorder the 

words ‘‘mental, physical or financial 

impact’’ to ‘‘physical, mental, or 

financial impact’’ for consistency with 

the language as it appears in this factor 

in other sections of the regulation. 

Neither of these modifications are 

intended to change the substance of this 

aggravating factor in either § 1001.301 or 

§ 1001.401; instead, these changes are 

intended to simplify the regulations by 

using consistent language across various 

sections where the same meaning is 

intended. 

Convictions Involving Patient Abuse 

and Neglect 

Section 1001.102(b) includes the 

following as an aggravating factor: ‘‘In 

convictions involving patient abuse or 

neglect, the action that resulted in the 

conviction was premeditated, was part 

of a continuing pattern of behavior, or 

consisted of non-consensual sexual 

acts.’’ See § 1001.102(b)(4). We propose 

a technical change to change ‘‘action’’ to 

‘‘acts’’ for consistency with 

§ 1001.102(b)(1) through (3). We 

propose additional conforming and 

technical changes to § 1001.102(b)(4) to 

account for the grammatical change 

from ‘‘action’’ to ‘‘acts’’ so that the new 

language would read as follows: ‘‘In 

convictions involving patient abuse or 

neglect, the acts that resulted in the 

conviction were premeditated, were part 

of a continuing pattern of behavior, or 

consisted of non-consensual sexual 

acts.’’ These changes to § 1001.102(b)(4) 

are not meant to change the meaning of 

the phrases to which the changes are 

made. 

Criminal, Civil, and Administrative 

Sanctions 

We propose to modify the aggravating 

factors relating to criminal, civil, and 

administrative sanctions. For mandatory 

exclusions, the regulations contain four 

separate factors that can be overlapping: 

‘‘The convicted individual or entity has 

a prior criminal, civil or administrative 

sanction record’’ (§ 1001.102(b)(6)); 

‘‘The individual or entity has previously 

been convicted of a criminal offense 

involving the same or similar 

circumstances’’ (§ 1001.102(b)(7)); ‘‘The 

individual or entity has been convicted 

of other offenses besides those that 

formed the basis for the exclusion’’ 

(§ 1001.102(b)(8)); and ‘‘The individual 

or entity has been the subject of any 

other adverse action by any Federal, 

State or local government agency or 

board if the adverse action is based on 

the same set of circumstances that 

serves as the basis for the imposition of 

the exclusion’’ (§ 1001.102(b)(9)). We 

propose to modify these factors to 

clarify how OIG would consider other 

civil, criminal, or administrative actions 

involving the excluded person for 

purposes of setting the period of 

exclusion. 

First, we propose to modify 

§ 1001.102(b)(6) to replace the phrase ‘‘a 

prior’’ with ‘‘other documented 

instances’’ and replace ‘‘sanction 

record’’ with ‘‘wrongdoing.’’ The 

proposed revised language would read 

as follows: ‘‘The individual or entity has 

other documented instances of criminal, 

civil, or administrative wrongdoing.’’ 

This proposed language is intended to 

encompass any documented instances 

of other criminal, civil, or 

administrative wrongdoing, including 

convictions that occurred before, at the 

same time as, or after the conviction 

forming the basis for exclusion. OIG 

may place greater emphasis on this 

aggravating factor in determining the 

appropriate period of exclusion if 

multiple documented instances exist 

(e.g., an individual or entity has a prior 

conviction, the individual or entity was 

found liable under the False Claims Act, 

or a licensing authority imposed a 

sanction on the individual’s or entity’s 

license to provide health care). 

Second, we propose to remove 

§ 1001.102(b)(7) and (8) because they are 

duplicative of proposed 

§ 1001.102(b)(6). Both a previous 

conviction of a criminal offense 

involving the same or similar 

circumstances (§ 1001.102(b)(7)) and a 

conviction for other offenses besides 

those that formed the basis for the 

exclusion (§ 1001.102(b)(8)) would be 

included in the proposed aggravating 

factor for other documented instances of 

criminal, civil, or administrative 

wrongdoing in § 1001.102(b)(6). 

Third, we propose to remove the 

aggravating factor relating to ‘‘any other 

adverse action’’ in § 1001.102(b)(9) 

because it would be unnecessary with 

the new proposed language in 

§ 1001.102(b)(6). Adverse actions by 

Federal, State, or local government 

agencies and boards would be included 

in other documented instances of 

administrative wrongdoing under 

proposed § 1001.102(b)(6). 

For permissive exclusions, the 

regulations contain three separate 

aggravating factors relating to civil, 

criminal, and administrative sanctions 

that can be overlapping: (1) ‘‘Whether 

the individual or entity has a 

documented history of criminal, civil, or 

administrative wrongdoing;’’ (2) 

‘‘Whether the individual or entity has 

been convicted of other offenses besides 

those that formed the basis for the 

exclusion;’’ and (3) ‘‘Whether the 

individual or entity has been the subject 

of any other adverse action by any 

Federal, State, or local government 

agency or board if the adverse action is 

based on the same set of circumstances 

that serves as the basis for the 

imposition of the exclusion.’’ See, e.g., 

§ 1001.201(b)(2)(v) through (vii). One or 

more of these three aggravating factors, 

with some language variations (as 

addressed below) also appear in 

§§ 1001.301, 1001.401, 1001.701, 

1001.801, 1001.901, 1001.951, 

1001.1101, 1001.1201, 1001.1301, 

1001.1552, 1001.1601, and 1001.1701. 

We intend the proposed changes 

described below to clarify how OIG 

would consider other civil, criminal, 

and administrative sanctions involving 

an excluded person for purposes of 

setting the length of exclusion. 

First, we propose to modify 

§§ 1001.201(b)(2)(v), 1001.301(b)(2)(v), 


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1001.401(c)(2)(iv), 1001.701(d)(2)(iii), 

1001.801(c)(2)(iv), 1001.901(b)(3), 

1001.951(b)(1)(iii), 1001.1101(b)(3), 

1001.1201(b)(4), 1001.1301(b)(2)(iv), 

1001.1401(b)(5), 1001.1552(d)(3), 

1001.1601(b)(1)(iv), and 

1001.1701(c)(1)(v) to make the first of 

the three aggravating factors referenced 

above consistent in each section, as 

‘‘The individual or entity has other 

documented instances of criminal, civil, 

or administrative wrongdoing.’’ The 

proposed language is intended to 

encompass any documented instances 

of other criminal, civil, or 

administrative wrongdoing, including 

convictions that occurred before, at the 

same time as, or after the conviction 

forming the basis for exclusion. OIG 

may place greater emphasis on this 

aggravating factor in determining the 

appropriate period of exclusion if 

multiple documented instances exist 

(e.g., an individual or entity has a prior 

conviction, the individual or entity was 

previously found liable under the False 

Claims Act, or a licensing authority 

imposed a sanction on the individual’s 

or the entity’s license to provide health 

care). 

Several of the permissive exclusion 

authority sections (§§ 1001.901, 

1001.951, 1001.1101, 1001.1201, 

1001.1301, 1001.1401, 1001.1601, and 

1001.1701) include a parenthetical 

stating that ‘‘the lack of any prior record 

is to be considered neutral.’’ In these 

sections, we propose to replace ‘‘lack’’ 

with ‘‘absence’’ to increase readability 

and ‘‘prior record’’ with ‘‘such 

instances’’ for consistency within the 

factor. In § 1001.1401(b)(5), the 

proposed language would use 

‘‘hospital’’ instead of ‘‘individual or 

entity,’’ as that section applies to 

hospitals only. In §§ 1001.1601(b)(1)(iv) 

and 1001.1701(c)(1)(v), the proposed 

language would use ‘‘physician’’ instead 

of ‘‘individual or entity,’’ as those 

sections apply to physicians only. The 

change from ‘‘lack’’ to ‘‘absence’’ is not 

meant to change the meaning of the 

phrase to which the change is made. 

Lastly, in §§ 1001.201(b)(2)(v), 

1001.301(b)(2)(v), 1001.401(c)(2)(iv), 

1001.701(d)(2)(iii), and 

1001.801(c)(2)(iv), the proposed 

language would remove the word 

‘‘whether’’ at the beginning of this 

factor, as the word is extraneous. This 

technical change is not meant to change 

the meaning of the phrases to which the 

changes are made. In 

§ 1001.801(c)(2)(iv), which currently 

reads, ‘‘Whether the individual or entity 

has a documented history of criminal, 

civil or administrative wrongdoing,’’ we 

propose to remove the words ‘‘Whether 

the individual or’’ because this 

authority only applies to entities. 

Second, we propose to remove the 

second aggravating factor discussed 

above (whether the individual or entity 

has been convicted of other offenses 

besides those that formed the basis for 

the exclusion) found in 

§§ 1001.201(b)(2)(vi), 1001.301(b)(2)(vi), 

and 1001.401(c)(2)(v) as duplicative of 

the proposed aggravating factor in 

§§ 1001.201(b)(2)(v), 1001.301(b)(2)(v), 

and 1001.401(c)(2)(iv), described in the 

preceding paragraph. A conviction for 

other offenses besides those that formed 

the basis for the exclusion would be 

included in the proposed aggravating 

factor for other documented instances of 

criminal, civil, or administrative 

wrongdoing. 

We also propose to remove the 

aggravating factor relating to ‘‘any other 

adverse action’’ in 

§§ 1001.201(b)(2)(vii), 

1001.301(b)(2)(vii), 1001.401(c)(2)(vi), 

1001.701(d)(2)(v), 1001.801(c)(2)(v), 

1001.901(b)(4), and 1001.951(b)(iv) 

because it would be unnecessary. 

Adverse actions by Federal, State, or 

local government agencies and boards 

would be included in other documented 

instances of administrative wrongdoing 

under the proposed changes to 

§§ 1001.201(b)(2)(v), 1001.301(b)(2)(v), 

1001.401(c)(2)(iv), 1001.701(d)(2)(iii), 

1001.801(c)(2)(iv), 1001.901(b)(3), 

1001.951(b)(1)(iii), 1001.1101(b)(3), 

1001.1201(b)(4), 1001.1301(b)(2)(iv), 

1001.1552(d)(3), 1001.1601(b)(1)(iv), 

and 1001.1701(c)(1)(v). We propose 

technical changes renumbering 

§ 1001.901(b)(5) to § 1001.901(b)(4) and 

technical changes to the other sections 

to account for the deletions described 

above. 

Effect on Civil and Administrative 

Investigations 

The exclusion authority in section 

1128(b)(2) of the Act and in § 1001.301, 

in part, allows OIG to exclude for 

convictions for obstruction of or 

interference with investigations related 

to the use of funds received from the 

Federal health care programs. We 

propose to remove the aggravating 

factors at § 1001.301(b)(2)(i) (the 

interference or obstruction caused the 

expenditure of significant additional 

time and resources) and 

§ 1001.301(b)(2)(iii) (the interference or 

obstruction also affected a civil or 

administrative investigation). We 

propose removing § 1001.301(b)(2)(i) 

because in our experience the 

subjectivity of the language makes it 

challenging to apply consistently. We 

propose removing § 1001.301(b)(2)(iii) 

because it is OIG’s position that this 

exclusion authority already includes 

administrative and civil investigations 

in the scope of the term 

‘‘investigations.’’ We are concerned that 

including a separate aggravating factor 

at § 1001.301(b)(2)(iii) where the 

interference or obstruction affected a 

civil or administrative investigation 

could be misconstrued as suggesting 

that the exclusion authority does not 

include civil and administrative 

investigations. Also, the application of 

this factor in matters where the 

obstruction or interference occurred in a 

civil or administrative investigation 

would be duplicative of the statutory 

basis for exclusions under section 

1128(b)(2) of the Act. To avoid 

confusion, we propose to remove this 

aggravating factor. Lastly, we propose to 

renumber the aggravating factors 

consistent with the proposed changes 

described above. 

Nature of Violations, Length of Scheme, 

and Impact on Beneficiaries 

We propose to modify the aggravating 

factor at § 1001.701(d)(2)(i) for 

exclusions related to excessive claims or 

furnishing of unnecessary or 

substandard care. The aggravating factor 

currently reads ‘‘the violations were 

serious in nature, and occurred over a 

period of one year or more.’’ We 

propose to replace the phrase 

‘‘violations were serious in nature, and’’ 

with ‘‘conduct.’’ The severity of the 

conduct is considered under the impact 

on beneficiaries aggravating factor at 

§ 1001.701(d)(2)(ii) (‘‘the violations had 

a significant adverse physical, mental or 

financial impact on program 

beneficiaries or other individuals’’) and 

does not also need to be separately 

considered under the length of scheme 

factor at § 1001.701(d)(2)(i). We also 

propose to modify the aggravating factor 

at § 1001.701(d)(2)(ii), by replacing the 

word ‘‘violations’’ with ‘‘conduct.’’ 

Finally, we propose to modify the 

aggravating factor at 

§ 1001.701(d)(2)(iv), which currently 

reads, ‘‘The violation resulted in 

financial loss to Medicare, Medicaid, or 

any other Federal health care program of 

$15,000 or more’’ to change ‘‘violation’’ 

to ‘‘conduct,’’ to increase the amount of 

financial loss from $15,000 to $50,000, 

and to change ‘‘Medicare, Medicaid, or 

any other Federal health care program’’ 

to ‘‘any Federal health care program’’ as 

described above. 

The use of the word ‘‘conduct’’ in this 

section reflects that § 1001.701 

contemplates behavior that may not be 

easily characterized as a set of 

identifiable violations or acts, such as 

the provision of health care that, over 

time or in one instance, may be of a 


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quality that fails to meet professionally 

recognized standards of health care. 

Also, the change in the financial loss 

amount makes this section consistent 

with §§ 1001.102(b)(1), 

1001.201(b)(2)(i), and 

1001.301(b)(2)(viii) (proposed to become 

§ 1001.301(b)(2)(i)) and reflects that the 

passage of time and inflation have 

increased the average amount of 

financial loss to the Federal health care 

programs in fraud schemes. 

Serious Adverse Effect 

We propose technical changes to 

§ 1001.801(c)(2)(iii), for exclusions 

relating to the failure of health 

maintenance organizations to furnish 

medically necessary care. For 

§ 1001.801(c)(2)(iii), which currently 

reads, ‘‘The entity’s failure to provide a 

necessary item or service that had or 

could have had a serious adverse 

effect,’’ we propose to remove ‘‘that’’ 

after ‘‘service’’ as an unnecessary word 

that causes the language to be confusing 

and grammatically incorrect (and 

therefore difficult to apply). The revised 

language would read: ‘‘The entity’s 

failure to provide a necessary item or 

service had or could have had a serious 

adverse effect.’’ 

Mitigating Factors 

When OIG is determining the length 

of exclusion for a mandatory exclusion 

with a minimum exclusion period of 5 

years, if any of the aggravating factors 

described in the regulations are present 

and result in a period of exclusion 

longer than 5 years, OIG may consider 

the mitigating factors specified in the 

regulations as a basis for reducing the 

period of exclusion to no less than 5 

years. For exclusions imposed under the 

permissive authorities with a baseline 

period of 3 years (§§ 1001.201, 

1001.301, and 1001.401) the presence of 

any of the mitigating factors specified in 

the regulations may provide a basis for 

shortening the period of exclusion. 

Proposed changes to some of these 

mitigating factors are described below. 

We propose to remove 

§§ 1001.102(c)(1) and 1001.201(b)(3)(i), 

which are mitigating factors for 

situations in which a person was 

convicted of three or fewer 

misdemeanors and caused less than 

$5,000 of loss. First, in our experience, 

this factor is very rarely present in 

mandatory exclusion cases that present 

aggravating factors warranting an 

exclusion period longer than the 

minimum period of 5 years. Second, we 

question whether it is appropriate to 

shorten an exclusion for conduct 

involving patient harm, a criminal 

scheme that extended beyond 1 year, an 

individual or entity with a record of 

additional sanctions, or conduct that 

warranted incarceration, simply because 

the person was convicted of three or 

fewer misdemeanors. Third, in the case 

of permissive exclusions under 

§ 1001.201 we believe this factor should 

be considered by OIG in determining 

whether a permissive exclusion should 

be imposed, but not whether to reduce 

the length of exclusion. 

Reduced Culpability 

Sections 1001.102(c)(2), 

1001.201(b)(3)(ii), and 1001.301(b)(3)(i) 

describe a mitigating factor that 

considers whether the record in the 

criminal proceedings, including 

sentencing documents, demonstrates 

that the court determined that the 

individual had a mental, emotional, or 

physical condition before or during the 

commission of the offense that reduced 

the individual’s culpability. 

We propose to revise 

§§ 1001.102(c)(2), 1001.201(b)(3)(ii), and 

1001.301(b)(3)(i) to remove the phrase 

‘‘including sentencing documents’’ 

because those documents are clearly 

part of the record in the criminal 

proceedings. We also propose to delete 

the phrase ‘‘mental, emotional or 

physical’’ prior to ‘‘condition’’ to allow 

OIG to consider any condition that a 

court determines to have reduced an 

individual’s culpability. We also 

propose to renumber the remaining 

paragraphs accordingly. 

Addition of Mitigating Factor to 

§ 1001.401 

In § 1001.401(c)(3), we propose to add 

a mitigating factor relating to whether a 

court determined that the excluded 

individual had a condition that reduced 

their culpability for the underlying 

criminal offense. Section 1001.401 

permits OIG to exclude individuals or 

entities convicted of misdemeanors 

related to controlled substances, while 

§ 1001.101(d) mandates OIG exclude 

individuals and entities for felonies 

related to controlled substances. The 

mandatory authority permits 

consideration of a mitigating factor 

relating to whether a court determined 

that the excluded individual had a 

condition that reduced their culpability 

for the underlying criminal offense 

(currently § 1001.102(c)(2)). We propose 

adding the same factor to § 1001.401 

because we believe it is appropriate to 

consider the same mitigating 

circumstances under the permissive 

authority and the mandatory authority. 

Cooperation 

Sections 1001.102(c)(3), 

1001.201(b)(3)(iii), 1001.301(b)(3)(ii), 

and 1001.401(c)(3) include a mitigating 

factor that reads as follows: ‘‘The 

individual’s or entity’s cooperation with 

Federal or State officials resulted in— 

(A) Others being convicted or excluded 

from Medicare, Medicaid, and all other 

Federal health care programs, (B) 

Additional cases being investigated or 

reports being issued by the appropriate 

law enforcement agency identifying 

program vulnerabilities or weaknesses, 

or (C) The imposition of a civil money 

penalty against others.’’ We propose to 

revise §§ 1001.102(c)(3), 

1001.201(b)(3)(iii), 1001.301(b)(3)(ii), 

and 1001.401(c)(3) to allow the 

mitigating factor of cooperation to be 

demonstrated based on the record in the 

criminal proceedings or a written 

statement by a government official that 

demonstrates that the individual’s or 

entity’s cooperation resulted in other 

individuals or entities being excluded, 

indicted, or otherwise charged, 

convicted, or investigated. Under the 

proposed language, the application of 

the cooperation mitigating factor would 

be based on documentation provided by 

an official involved in the underlying 

criminal proceedings rather than OIG’s 

later independent assessment of the 

criminal proceedings. In OIG’s 

experience, it is not always possible to 

obtain court records relating to 

cooperation because they may be sealed 

or otherwise unavailable at the time the 

exclusion is processed. In addition, the 

proposed language would broaden the 

first criteria for cooperation (i.e., the 

cooperation resulted in others being 

convicted or excluded) to include 

circumstances in which others have 

been indicted or otherwise charged or 

investigated. In OIG’s experience, 

subjects have not relied on reports being 

issued by law enforcement agencies 

identifying program vulnerabilities or 

weaknesses, or civil monetary penalties 

being imposed against other individuals 

or entities as a basis to demonstrate 

cooperation, so we are proposing to 

remove those criteria. 

Alternative Sources of Health Care Items 

and Services Mitigating Factor 

We propose to delete 

§§ 1001.201(b)(3)(iv) and 

1001.301(b)(3)(iii), a mitigating factor 

applicable to exclusions related to 

misdemeanor convictions for health 

care fraud and convictions for 

obstruction. The factor allows OIG to 

consider whether alternative sources of 

the type of health care items or services 

furnished by the individual or entity are 

not available. We propose to remove 

this factor from these two sections 

because we believe this factor should be 

considered by OIG in determining 


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95150 Federal Register / Vol. 89, No. 231 / Monday, December 2, 2024 / Proposed Rules 

whether a permissive exclusion should 

be imposed and whether a waiver is 

appropriate but does not relate to the 

length of exclusion. Therefore, we 

propose removing this mitigating factor. 

Few Violations Over a Short Period of 

Time Mitigating Factor 

We propose to modify 

§ 1001.701(d)(3), which currently reads: 

‘‘Only the following factor may be 

considered mitigating and a basis for 

reducing the period of exclusion: 

Whether there were few violations and 

they occurred over a short period of 

time,’’ to read as follows: ‘‘Only the 

following factor may be considered 

mitigating and a basis for reducing the 

period of exclusion: Whether there were 

few occurrences of the conduct, and the 

conduct occurred over a short period of 

time.’’ This change makes this section 

consistent with the changes from 

‘‘violations’’ to ‘‘conduct’’ in 

§ 1001.701(d)(2) discussed above. 

Other Changes to § 1001.102 (Length of 

Exclusion) 

Section 1001.102(d) describes the 

requirement, added by HIPAA, that OIG 

impose exclusions for at least 10 years 

or permanently in certain situations 

involving multiple criminal convictions. 

We propose to modify § 1001.102(d) to 

remove the reference to August 5, 1997, 

in the flush language, as unnecessary 

because virtually all criminal offenses 

before August 5, 1997, are now timebarred from prosecution. 

We propose a technical modification 

to § 1001.102(d)(1) and (2) to replace 

‘‘effected’’ with ‘‘imposed’’ for 

consistency with § 1001.102(a), which 

references exclusions being imposed. 

The revision is not intended to change 

the meaning of § 1001.102(d)(1) and (2). 

In § 1001.102(d)(1), we propose to revise 

the parenthetical language (which 

allows OIG to lengthen exclusions 

beyond 10 years if aggravating and 

mitigating factors are present) to remove 

the reference to mitigating factors 

because only aggravating factors can be 

used to impose a period of more than 10 

years. 

Section 1001.401 Conviction Relating 

to Controlled Substances 

We propose removing § 1001.401(b), 

which states ‘‘the definition of 

controlled substance will be the 

definition that applies to the law 

forming the basis for the conviction,’’ 

because it is unnecessary. This 

definition is already incorporated into 

§ 1001.401(a) by the phrase ‘‘as defined 

under Federal or State law.’’ In other 

words, the definition of controlled 

substance will be based on the Federal 

or State law under which the individual 

or entity is convicted. We also propose 

corresponding technical changes 

renumbering § 1001.401(c) to 

§ 1001.401(b). 

Section 1001.501 Exclusions Based on 

the Loss or Suspension of a Health Care 

License 

We propose removing the aggravating 

factors outlined in § 1001.501(b)(2), 

which permit OIG to lengthen periods of 

exclusion based on the loss of the 

individual’s or entity’s health care 

license, and the mitigating factors 

outlined in § 1001.501(b)(3), which 

could be considered by OIG if 

aggravating factors are applied. Because 

exclusions under section 1128(b)(4) of 

the Act are derivative of a licensing 

board action, OIG generally imposes 

exclusions under this section for the 

same period of time as that of the 

licensing board’s action. As a result, an 

individual is generally eligible for 

reinstatement once they regain the 

health care license on which the 

exclusion is based. Our proposed 

removal of these aggravating and 

mitigating factors would make the 

regulations consistent with OIG’s 

general practice of imposing exclusions 

under this section that are the same 

length as the licensing board actions. 

We propose corresponding technical 

changes by renumbering 

§ 1001.501(b)(4) to § 1001.501(b)(2) and 

modifying the flush language at 

§ 1001.501(b)(1) to remove language 

referring to § 1001.501(b)(2). 

We are also proposing adding the 

word ‘‘surrendered’’ to § 1001.501(b)(1) 

so that this section addresses all the 

bases upon which an exclusion may be 

imposed under this section, which 

includes when an individual’s or 

entity’s license is revoked, suspended, 

surrendered, or otherwise lost. See 

section 1128(b)(4)(B) of the Act. 

We also propose changes to 

§ 1001.501(c). In 2017, OIG published a 

Final Rule implementing a process that 

allows individuals and entities 

excluded under section 1128(b)(4) of the 

Act to request reinstatement before 

regaining the license that was lost and 

on which the exclusion is based 

(referred to as ‘‘early reinstatement’’) 

under two sets of circumstances. 82 FR 

4100, 4105 (Jan. 12, 2017). We propose 

modifications to both sets of 

circumstances. 

First, under § 1001.501(c)(1), an 

individual or entity excluded under 

§ 1001.501 can apply for reinstatement 

if, after fully and accurately disclosing 

the circumstances surrounding the 

original license action that formed the 

basis for the exclusion, the individual or 

entity obtained a health care license in 

another State or a different health care 

license in the same State, or was 

allowed to retain a health care license 

in another State or a different health 

care license in the same State. We 

discuss proposed changes to this section 

below. 

Second, under § 1001.501(c)(2), a 

person excluded under this section 

could request early reinstatement if they 

did not have a valid license to provide 

health care of any kind, based on OIG’s 

consideration of several factors outlined 

in the regulation. One of these factors is 

the length of time the person has been 

excluded. The regulation states that OIG 

will apply a presumption against early 

reinstatement if the individual or entity 

has been excluded for less than 3 years 

and, if the revocation or suspension on 

which the exclusion was based was for 

a set period of longer than 3 years, the 

presumption against reinstatement 

would be coterminous with the period 

set by the licensing board. 

We propose modifying 

§ 1001.501(c)(2)(i) to state that, rather 

than applying a presumption against 

early reinstatement for persons who are 

excluded less than 3 years, OIG will not 

consider a request for early 

reinstatement submitted by an 

individual or entity if such individual 

or entity has been excluded for less than 

3 years. We think this change is 

appropriate because the statute provides 

a 3-year baseline period in certain other 

permissive exclusion authorities 

(§§ 1001.201, 1001.301, and 1001.401). 

The proposal would further modify the 

language in the second clause of the 

second sentence of § 1001.501(c)(2)(i). 

This clause of § 1001.501(c)(2)(i) states 

that if the action on which the exclusion 

is based is for a set period longer than 

3 years, OIG will apply a presumption 

against early reinstatement 

‘‘coterminous with the period set by the 

licensing board.’’ We propose to modify 

this language to state that when the 

action underlying the exclusion is for a 

set period longer than 3 years, OIG will 

not consider a request for early 

reinstatement at any time before the 

expiration of the period set by the 

licensing board. We believe this change 

is appropriate because the period of 

exclusion should be at least as long as 

the period of the underlying action. 

At § 1001.501(c)(3), the early 

reinstatement regulation includes a bar 

to early reinstatement for individuals 

excluded under this section whose 

license revocation or suspension was for 

reasons related to patient abuse or 

neglect. We propose to modify this 

prohibition. In OIG’s experience, the bar 

has the unintended consequence of 


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creating a permanent period of 

exclusion for certain individuals and 

entities who have been excluded under 

§ 1001.501 due to a license revocation or 

suspension related to patient abuse or 

neglect, unless that individual or entity 

has regained the original license. This 

de facto permanent bar to reinstatement 

creates an imbalance between 

mandatory and permissive exclusion 

because individuals and entities that 

have been convicted of an offense 

related to the neglect or abuse of a 

patient and excluded under section 

1128(a)(2) of the Act are eligible to 

apply for reinstatement at the end of 

their period of exclusion, which may be 

the statutory minimum period of 5 

years. OIG recognizes that the loss of a 

professional license for issues related to 

patient abuse or neglect is significant 

and the circumstances of the loss of 

such license in those instances should 

be taken into consideration in 

determining whether early 

reinstatement should be granted. 

Therefore, we propose to modify 

§ 1001.501(c)(1)(i) and (ii) such that, in 

reviewing requests for early 

reinstatement, OIG will consider the 

circumstances that formed the basis for 

the exclusion, including whether such 

circumstances were related to patient 

abuse or neglect. In addition, we 

propose to modify this section to require 

that, in the case of a license revocation 

or suspension for reasons related to 

patient abuse or neglect, OIG will not 

consider a request for early 

reinstatement until the individual or 

entity has been excluded for at least 5 

years for parity with those excluded for 

the statutory minimum period of 5 years 

for a conviction related to the neglect or 

abuse of a patient. 

We also propose several clarifying 

changes throughout § 1001.501(c). These 

changes are not intended to change the 

meaning of § 1001.501 but are intended 

to make the language clearer based upon 

our experience implementing this 

section since 2017. We propose to add 

references to ‘‘entity’’ every time the 

word ‘‘individual’’ is used in § 1001.501 

to clarify that, consistent with section 

1128(b)(4) of the Act, entities as well as 

individuals are subject to exclusion 

under this section. In 

§ 1001.501(c)(1)(iii), we propose 

replacing ‘‘Evidence that’’ with 

‘‘Documentation from’’ to clarify that 

OIG expects documentation from the 

second licensing authority and not 

evidence from a proceeding with that 

authority. We also propose adding 

‘‘indicating that it’’ after ‘‘second 

licensing authority’’ to clarify that the 

documentation must indicate that the 

licensing authority knew of the 

circumstances surrounding the action 

that formed the basis for the exclusion. 

In § 1001.501(c)(1)(iv), we propose 

removing ‘‘satisfactorily’’ and adding 

‘‘to OIG’s satisfaction’’ after ‘‘has 

demonstrated’’ to clarify that whether 

the individual or entity has resolved any 

underlying problem is in the opinion of 

OIG and not the excluded party. We 

propose a nearly identical change in 

§ 1001.501(c)(2)(iii) for the same reason. 

Section 1001.601 Exclusion or 

Suspension Under a Federal or State 

Health Care Program 

We propose a technical change to 

§ 1001.601(a)(1)(ii) to offset the phrase 

‘‘for reasons bearing on the individual’s 

or entity’s professional competence, 

professional performance or financial 

integrity,’’ as it applies to both 

circumstances under § 1001.601(a)(1). 

As currently written, the phrase could 

be read to modify only 

§ 1001.601(a)(1)(ii), referring to actions 

by State health care programs, but the 

statute clearly requires that this clause 

apply to all exclusions under section 

1128(b)(5) of the Act. 

We propose revising § 1001.601(a)(2) 

by replacing the phrase ‘‘is intended to 

cover’’ with ‘‘means’’ to clarify that 

‘‘otherwise sanctioned’’ is limited to the 

definition provided (and does not 

include anything else). We also propose 

adding the phrase ‘‘or otherwise 

sanctioned’’ to § 1001.601(b)(1) for 

consistency with § 1001.601(a)(1) and 

section 1128(b)(5) of the Act, and 

changing the word ‘‘from’’ to ‘‘by’’ for 

grammatical accuracy. 

We propose removing the aggravating 

and mitigating factors outlined in 

§ 1001.601(b)(2) and (3), which permit 

OIG to lengthen periods of exclusion 

based on an individual’s or entity’s 

exclusion, suspension, or other sanction 

by a Federal or State health care 

program, so that all exclusions under 

this section would be coterminous with 

the period of time that the individual or 

entity is excluded, suspended, or 

otherwise sanctioned by the applicable 

Federal or State health care program. 

Because exclusions under section 

1128(b)(5) of the Act are derivative of a 

Federal or State health care program 

action, OIG generally imposes 

exclusions under this section for the 

same period of time as the agency’s 

action. As a result, individuals and 

entities are generally eligible to apply 

for reinstatement once the individual or 

entity is allowed to resume participation 

in the Federal or State health care 

program under which the individual or 

entity was previously suspended, 

excluded, or sanctioned. Our proposed 

removal of these aggravating and 

mitigating factors would make the 

regulations consistent with OIG’s 

general practice under this section and 

clarifies our intention. Due to the 

removal of § 1001.601(b)(2) and (3), we 

propose a technical change renumbering 

§ 1001.601(b)(4) to § 1001.601(b)(2). 

Section 1001.901 False or Improper 

Claims 

In § 1001.901(b), we propose to 

change ‘‘will’’ to ‘‘may’’ to reflect OIG’s 

discretion to consider only the factors 

that are appropriate according to the 

facts and circumstances of each case 

and to reflect that not every factor will 

be present in every case. 

Section 1001.951 Fraud and Kickbacks 

and Other Prohibited Activities 

We propose several changes to 

§ 1001.951 to align the factors with 

those found in the proposed revisions to 

§ 1001.901. These two sections should 

align because both authorities are based 

on section 1128(b)(7) of the Act and 

require OIG to affirmatively prove fraud, 

kickbacks, or other prohibited activities. 

Because neither authority is derivative 

of other actions taken by adjudicative 

bodies, aligning the factors for 

determining length of exclusions under 

§ 1001.951 with the factors under 

§ 1001.901 would create parity and 

provide OIG discretion to consider 

relevant facts and circumstances under 

both authorities that are not derivative 

of the actions of other courts or 

adjudicative bodies, as is appropriate for 

derivative exclusions. 

Specifically, to align §§ 1001.951 and 

1001.901, we are proposing a series of 

revisions and technical changes, which 

collectively will result in both 

authorities having the same factors for 

determining length of exclusion, as 

follows. We propose to remove the 

numbering for § 1001.951(b)(1) to make 

it flush language and to revise the 

language to mirror the proposed 

language in proposed § 1001.901(b) by 

changing ‘‘will’’ to ‘‘may.’’ We propose 

to modify the numbering of the factors 

to change the factor at 

§ 1001.951(b)(1)(i) to § 1001.951(b)(1) 

and to modify the language to mirror 

§ 1001.901(b)(1). The proposed language 

would read: ‘‘The nature and 

circumstances surrounding the actions 

that are the basis for liability, including 

the period of time over which the acts 

occurred, the number of acts, whether 

there is evidence of a pattern and the 

amount claimed.’’ 

We propose to delete the factor at 

§ 1001.951(b)(1)(ii), which is not a factor 

in § 1001.901(b). We propose to add a 

factor at new § 1001.951(b)(2), ‘‘the 


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1Section 1128(b)(14) has been used by OIG to 

exclude borrowers that have defaulted on loans 

from the Health Education Assistance Loan (HEAL) 

Program. The HEAL program is a program of 

Federal insurance of educational loans that were 

made to graduate students in the fields of medicine, 

osteopathic medicine, dentistry, veterinary 

medicine, optometry, podiatric medicine, 

pharmacy, public health, chiropractic, health 

administration, and clinical psychology. See 34 

CFR 681.1. Authorization to fund new HEAL loans 

expired September 30, 1998. 82 FR 53374 (Nov. 15, 

2017). A list of borrowers currently in default can 

be found at 86 FR 54950 (Oct. 5, 2021). 

degree of culpability,’’ which appears at 

§ 1001.901(b)(2). We propose to change 

the numbering of § 1001.951(b)(1)(iii) 

(related to other documented instances 

of wrongdoing) to § 1001.951(b)(3) and 

modify its language consistent with 

proposed § 1001.901(b)(3) and the other 

places this language appears in part 

1001 as described above. We propose to 

add new § 1001.951(b)(4), ‘‘Other 

matters as justice may require,’’ 

consistent with the proposed 

§ 1001.901(b)(4). We further propose to 

remove the factors at 

§ 1001.951(b)(1)(iv) and (v) and remove 

the mitigating factors at § 1001.951(b)(2) 

to align § 1001.951 with § 1001.901. 

Removal of mitigating factors under this 

section is appropriate because the 

factors proposed for § 1001.951 allow 

OIG to consider all the relevant facts 

and circumstances, aggravating and 

mitigating, in setting lengths of 

exclusion under this section. 

Section 1001.1301 Failure To Grant 

Immediate Access 

This section provides OIG with the 

authority to exclude individuals and 

entities that fail to grant immediate 

access to, among others, OIG or a State 

MFCU. Section 1001.1301(a)(2) 

currently defines a ‘‘failure to grant 

immediate access’’ for purposes of 

paragraphs (a)(1)(i) and (ii) of this 

section (applying to requests for 

immediate access by the Secretary or a 

State survey agency) as ‘‘the failure to 

grant access at the time of a reasonable 

request or to provide a compelling 

reason why access may not be granted.’’ 

The regulation does not explain what 

circumstance would constitute ‘‘a 

compelling reason.’’ 

We propose to revise the definition of 

‘‘failure to grant immediate access’’ in 

§ 1001.1301(a)(2) to specify what would 

constitute ‘‘a compelling reason,’’ 

namely, that the requested material does 

not exist or is not at the location where 

the request is presented. The proposed 

language is consistent with OIG’s 

general practice in evaluating 

immediate access requests. 

Section 1001.1301(a)(3) provides a 

separate definition of ‘‘failure to grant 

immediate access’’ for purposes of 

paragraphs (a)(1)(iii) and (iv) of the 

section (applying to requests for 

immediate access by OIG and State 

MFCUs) as ‘‘(i) The failure to produce 

or make available for inspection and 

copying the requested material upon 

reasonable request, or to provide a 

compelling reason why they cannot be 

produced, within 24 hours of such 

request, except when the OIG or State 

Medicaid Fraud Control Unit (MFCU) 

reasonably believes that the requested 

material is about to be altered or 

destroyed, or (ii) When the OIG or 

MFCU has reason to believe that the 

requested material is about to be altered 

or destroyed, the failure to provide 

access to the requested material at the 

time the request is made.’’ We propose 

to revise this section so that the 

definition of ‘‘failure to grant immediate 

access’’ for purposes of 

§ 1001.1301(a)(1)(iii) and (iv) is 

consistent with the proposed definition 

of ‘‘failure to grant immediate access’’ 

for purposes of § 1001.1301(a)(1)(i) and 

(ii). The impact of this change would be 

that all immediate access requests will 

require production of materials at the 

time the request is made unless the 

records do not exist or are in a different 

location and would eliminate the 

analysis of whether records are about to 

be altered or destroyed. We believe this 

change is appropriate because it is 

consistent with the common meaning of 

‘‘immediate’’ as requiring something 

instantly or without delay, and it 

removes the burden from the requesting 

agency to determine whether records 

may be altered or destroyed in the 

intervening 24 hours, which may be 

impossible to know. 

Section 1001.1501 Default of Health 

Education Loan or Scholarship 

Obligations 

Section 1128(b)(14) of the Act, which 

authorizes OIG to exclude individuals 

who default on repayments of health 

education loan or scholarship 

obligations, or the obligations of any 

loan repayment program, requires OIG 

to take into account ‘‘access of 

beneficiaries to physician services for 

which payment may be made under title 

XVIII or XIX.’’ 1 Section 1001.1501(a)(3) 

of the regulations expands this 

requirement to access to physicians’ 

services for which payment may be 

made under Medicare, Medicaid, or 

other Federal health care programs, 

expanding OIG’s obligations beyond 

Medicare and Medicaid. As a result, we 

propose modifying § 1001.1501(a)(3) to 

limit the requirement in this section to 

the Medicare and Medicaid programs, 

consistent with section 1128(b)(14) of 

the Act. We propose a technical 

modification to § 1001.1501(a)(3) to 

replace ‘‘physicians’ services’’ with 

‘‘physician services’’ for consistency 

with section 1128(b)(14) of the Act. The 

revision is not intended to change the 

meaning of § 1001.1501(a)(3). 

Next, § 1001.1501(b) indicates that an 

individual excluded under this section 

will remain excluded until OIG receives 

notice that the individual has cured the 

payment default that provided the basis 

for the exclusion, at which time OIG 

notifies the individual that the 

individual is eligible to apply for 

reinstatement. However, it has been 

OIG’s longstanding practice to allow 

individuals excluded under this section 

to participate in the Federal health care 

programs prior to their health education 

loan or scholarship obligation being 

completely repaid if such individual has 

entered into a repayment agreement 

with the administrator of the health 

education loan, scholarship, or loan 

repayment program following an initial 

payment default. We propose modifying 

§ 1001.1501(b) so that an individual 

who has entered into such repayment 

agreements would be eligible to obtain 

a ‘‘stay’’ of their exclusion for as long as 

the individual remains in compliance 

with the terms of the agreement. While 

this ‘‘stay’’ is in place, the individual 

would be eligible to participate in the 

Federal health care programs. However, 

if OIG receives notice from the 

administrator of the health education 

loan, scholarship, or loan repayment 

program that the individual is no longer 

in compliance with the repayment 

agreement, the ‘‘stay’’ would be lifted 

and the exclusion would be given full 

effect. This proposed change would 

make the regulations consistent with 

OIG’s current practice. 

Section 1001.1551 Exclusion of 

Individuals With Ownership or Control 

Interest in Sanctioned Entities 

We propose modifying 

§ 1001.1551(b)(2) to change ‘‘Medicare, 

Medicaid and all other Federal health 

care programs’’ to ‘‘Medicare or a State 

health care program’’ and to remove the 

phrase ‘‘terminated or’’ for consistency 

with the language of section 1128(b)(15), 

which does not reference all Federal 

health care programs or use the word 

‘‘terminated.’’ 

We also propose modifying 

§ 1001.1551(c)(1) to clarify that the 

length of the individual’s term of 

exclusion will be the same as that of the 

sanctioned entity, regardless of whether 

the individual terminates their 

relationship with the sanctioned entity 

after they have been excluded. For 

example, if Entity A is excluded by OIG 


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for a period of 5 years and Person A 

(who has an ownership interest in 

Entity A) is excluded by OIG under 

section 1128(b)(15) of the Act 6 months 

later, the term of Person A’s exclusion 

will be for 5 years, starting from the 

effective date of Person A’s exclusion. 

Also, Person A will remain excluded for 

the entire 5-year term even if Person A 

divests their ownership interest in 

Entity A at any point during the 5-year 

term of Person A’s exclusion. It would 

be inequitable for an individual with 

knowledge of the conduct that resulted 

in an entity being excluded by OIG and 

who had an ownership interest in the 

entity at the time the conduct occurred 

to be able to avoid exclusion by 

divesting their interest after the entity’s 

term of exclusion is imposed. 

Section 1001.1553 Establishment of a 

New Permissive Exclusion Authority 

Section 6(d) of MSIAA granted a new 

permissive exclusion authority to the 

Secretary under Section 1128(b) of the 

Act. Under the newly enacted section 

1128(b)(17) of the Act, the Secretary 

may exclude any manufacturer or an 

officer, director, agent, or managing 

employee of such manufacturer that 

knowingly misclassifies a covered 

outpatient drug under an agreement 

under section 1927 of the Act, 

knowingly fails to correct such 

misclassification, or knowingly provides 

false information related to drug pricing, 

drug product information, or data 

related to drug pricing or drug product 

information. Accordingly, we propose 

adding a new § 1001.1553 entitled 

‘‘Knowingly misclassifying covered 

outpatient drugs.’’ Under this proposal, 

OIG would have the authority to 

exclude any manufacturer (as defined in 

section 1927 of the Act) or an officer, 

director, agent, or managing employee 

of such manufacturer that knowingly 

misclassifies a covered outpatient drug, 

knowingly fails to correct such 

misclassification, or knowingly provides 

false information to HHS related to drug 

pricing, drug product information, or 

data related to drug pricing or drug 

product information. This exclusion 

authority applies to covered outpatient 

drugs supplied by manufacturers under 

agreements under section 1927 of the 

Act in effect on or after April 18, 2019. 

The definitions proposed for § 1000.10 

would apply to the terms ‘‘agent,’’ 

‘‘managing employee,’’ and 

‘‘knowingly.’’ 

Under this proposal, we would 

determine the length of exclusion based 

on five factors consistent with OIG’s 

other non-derivative exclusion 

authorities in §§ 1001.901 and 1001.951: 

the nature and circumstances 

surrounding the actions that are the 

basis for liability, including the period 

of time over which the acts occurred, 

the number of acts, whether there is 

evidence of a pattern, and the amount 

claimed; the degree of culpability; 

whether the entity has other 

documented instances of criminal, civil, 

or administrative wrongdoing; or other 

matters as justice may require. Because 

this authority requires OIG to prove that 

the manufacturer knowingly 

misclassified a drug or made false 

statements and is not derivative of 

actions taken by other adjudicative 

bodies, we believe it is appropriate to 

apply the same factors to this authority 

that apply to §§ 1001.901 and 1001.951, 

which are also non-derivative 

authorities. 

Section 1001.1801 Waivers of 

Exclusions 

We propose deleting the crossreference to the statutory definition of 

Federal health care program in 

§ 1001.1801(a) as unnecessary because 

the term ‘‘Federal health care program’’ 

is defined in § 1000.10. We also propose 

revising § 1001.1801(d), which currently 

states that ‘‘if the basis for the waiver 

ceases to exist, the waiver will be 

rescinded, and the individual or entity 

will be excluded for the period 

remaining on the exclusion, measured 

from the time the exclusion would have 

been imposed if the waiver had not been 

granted,’’ to state: ‘‘If the basis for the 

waiver ceases to exist, the waiver will 

be rescinded.’’ The existing reference to 

‘‘the time the exclusion would have 

been imposed if the waiver had not been 

granted’’ implies that the waiver stops 

the exclusion from being imposed; 

however, exclusions typically are 

imposed prior to a waiver being put in 

place. We do not intend for the proposal 

to change the current meaning of the 

original provision, which is: If the basis 

for a waiver ceases to exist, the waiver 

will be rescinded, and the existing 

exclusion will then be in effect. 

Section 1001.1901 Scope and Effect of 

Exclusion 

At the end of § 1001.1901(a), we 

propose to correct a cross-reference to 

the definition of ‘‘Federal health care 

programs’’ from § 1001.2 to § 1000.10 

because the definition does not appear 

in § 1001.2. We also propose inserting 

the phrase ‘‘Federal health care’’ prior to 

the word ‘‘program’’ and ‘‘programs’’ in 

§ 1001.1901(b)(2) and (4), respectively, 

for clarity. Finally, we propose deleting 

the parenthetical in 

§ 1001.1901(c)(3)(iii) because it refers to 

an exemption that was limited to the 

period between October 2, 1998, and 

October 4, 1999, and therefore is no 

longer applicable. None of the proposed 

changes to § 1001.1901 are intended to 

change the meaning of the provisions of 

that section. 

Section 1001.2001 Notice of Intent To 

Exclude 

Under the current regulatory text in 

this section, OIG is only required to 

issue a notice of intent to exclude with 

respect to mandatory exclusions under 

section 1128(a) of the Act if the 

proposed period of exclusion is for 

longer than 5 years. We propose 

modifying § 1001.2001(a) to provide that 

OIG will issue a notice of intent to 

exclude for all mandatory and 

permissive exclusions, of any length, 

that are proposed under subpart B or C 

of part 1001. The notice of intent to 

exclude affords individuals and entities 

the opportunity to provide OIG with 

information related to the proposed 

exclusion before it goes into effect and, 

in our experience, the process allows 

OIG to impose exclusions after 

considering as much relevant 

information as possible. We therefore 

believe it should apply to all exclusions 

under subparts B and C of part 1001. 

We also propose modifying this 

section to indicate that a notice of intent 

to exclude will be deemed to have been 

received 7 days after the date of the 

notice (instead of 5 days, as currently 

specified), based on changes in service 

standards and expected delivery times 

for First-Class Mail. 

Sections 1001.2004 Through 1001.2006

Notice to State Agencies, State 

Licensing Agencies, and Others 

Regarding Exclusion 

We propose to clarify that the notice 

to State Medicaid program agencies, 

State licensing authorities, and others 

required by §§ 1001.2004, 1001.2005, 

and 1001.2006 is made by OIG, not by 

HHS. In § 1001.2005(a), we propose to 

remove the words ‘‘from participation’’ 

and the parenthetical ‘‘(or directed to be 

excluded),’’ and to reword the sentence 

so that this section now reads as 

follows: ‘‘OIG will promptly notify the 

appropriate State(s) or local agencies or 

authorities having responsibility for the 

licensing or certification of an excluded 

individual or entity of the facts and 

circumstances of the exclusion.’’ These 

changes are not intended to change the 

meaning of this section. 

Section 1001.2006 currently provides 

that OIG will give notice of an exclusion 

and the effective date to the public, 

beneficiaries, and as appropriate to 

various agencies and entities specified 

in the regulation including: (1) any 

entity in which the excluded individual 


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is known to be serving as an employee, 

administrator, or operator, or in which 

the individual is serving in any other 

capacity and is receiving payment for 

providing services; (2) medical societies 

and other professional organizations; 

and (3) other Federal agencies or 

organizations, as appropriate. However, 

many of these notifications are not 

required by the statute and it is 

impractical for OIG to provide 

individual notice of each exclusion 

imposed by OIG to all the entities listed 

in § 1001.2006. Furthermore, OIG has 

made exclusion information available 

online since at least 1999. As a result, 

we propose to modify § 1001.2006(a) by 

stating that OIG will give notice of 

exclusions to the public, beneficiaries, 

and others via monthly online updates 

to the List of Excluded Individuals/ 

Entities (commonly referred to as ‘‘the 

LEIE’’), which reflects OIG’s 

longstanding practice. 

Section 1001.2007 Appeal of 

Exclusions 

We propose a few technical changes 

in § 1001.2007. First, in 

§ 1001.2007(a)(1)(i) we propose to 

change the word ‘‘sanction’’ to 

‘‘exclusion’’ for consistency with other 

parts of this section and because the 

only relevant actions under this section 

are exclusions. Second, we propose to 

replace the word ‘‘should’’ with ‘‘shall’’ 

in § 1001.2007(a)(3) to reflect that 

certain information must be included in 

the request for a hearing. For example, 

§ 1005.2(d) requires a request for a 

hearing to contain certain information, 

and § 1005.2(e)(4) requires dismissal of 

a hearing request that fails to raise any 

issues which may be properly addressed 

in a hearing. Third, in § 1001.2007(b), 

we propose to add ‘‘the’’ before ‘‘notice 

of exclusion’’ and delete ‘‘such’’ before 

‘‘a hearing.’’ Finally, in § 1001.2007(d) 

we propose to change ‘‘Government’’ to 

‘‘government.’’ These changes are not 

intended to change the meaning of this 

section. 

Sections 1001.3001 Through 1001.3002

Timing and Method of Request and 

Basis for Reinstatement 

We propose making changes to 

§§ 1001.3001(a)(1) and 1001.3002(b)(5) 

to replace references to ‘‘program 

provider number’’ with ‘‘Federal health 

care program provider number’’ for 

clarity. 

Section 1001.3003 Approval of 

Request for Reinstatement 

We propose changes to § 1001.3003 to 

track the statutory language in section 

1128(g) of the Act, which requires that 

notice of reinstatement be provided to 

each appropriate State agency 

administering or supervising the 

administration of each State health care 

program and requires notice to the 

Attorney General in the case of 

exclusions under section 1128(a) of the 

Act to which section 304(a)(95) of the 

Controlled Substances Act may apply. 

We also are proposing to revise this 

section to state that OIG will notify the 

public and others through posting of 

reinstatement information on OIG’s 

website. We are proposing to limit the 

direct notice requirements for 

reinstatements to reduce the burden on 

OIG and to reflect OIG’s longstanding 

practice of providing general notice of 

all reinstatements through the posting of 

a monthly reinstatement file on OIG’s 

public website. Lastly, we are proposing 

to modify § 1001.3003(b) to clarify that 

a reinstatement by OIG does not require 

any other Federal health care program to 

reinstate such individual or entity into 

that program if the program has taken an 

action against the individual or entity 

under its own authority. This proposal 

is intended to clarify the language of 

this section and is not intended to 

change the substance of the provision. 

The current language, which states that 

a reinstatement by OIG has no effect if 

a Federal health care program has 

imposed a longer period of exclusion 

under its own authorities, is imprecise 

and confusing because a reinstatement 

by OIG has effect independent of the 

actions of individual Federal health care 

programs. 

Section 1001.3004 Denial of Request 

for Reinstatement 

We propose several changes to 

§ 1001.3004 to better reflect OIG’s 

current processes regarding denial of 

reinstatement appeal requests and to 

clarify for the public the process by 

which an individual or entity may 

appeal the denial of their request for 

reinstatement. We propose to modify 

§ 1001.3004(a) to reflect a three-step 

process when a request for 

reinstatement is denied. First, OIG 

would send a written notice to the 

individual or entity notifying them that 

their request for reinstatement has been 

denied and the basis for the denial. 

Second, the individual or entity would 

then have 30 days from the date of the 

notice of the reinstatement denial to 

submit a written request to appeal the 

denial. Third, once the individual or 

entity has submitted a written appeal 

request, the individual would have 30 

days from the date of the written request 

for appeal to submit: (1) any written 

argument or additional evidence the 

individual or entity has regarding the 

basis for the denial of reinstatement 

identified in the denial notice, or (2) a 

written request to present oral argument 

or any additional evidence to an OIG 

official. The proposed language would 

provide requesters with an additional 30 

days to submit the documentary 

evidence or the request for oral 

argument allowed under § 1001.3004(a). 

We also propose to clarify 

§ 1001.3004(b) to indicate that OIG will 

only issue a decision regarding a 

reinstatement denial if a written 

argument or additional evidence are 

submitted to OIG or any oral argument 

or additional evidence are presented to 

an OIG official. The current language 

may incorrectly suggest that a decision 

might be issued at the end of the 30-day 

appeal period even if no written or oral 

argument and additional evidence are 

submitted or presented regarding the 

denial of the request for reinstatement. 

Section 1001.3005 Withdrawal of 

Exclusion for Reversed or Vacated 

Decisions 

We propose a technical change to 

clarify § 1001.3005(b) by deleting the 

words ‘‘CMS and other’’ before Federal 

health care programs (because the 

Centers for Medicare & Medicaid 

Services (CMS) is not itself a Federal 

health care program but the agency that 

administers Medicare and Medicaid). 

Finally, we propose to change the word 

‘‘exclusion’’ to ‘‘action’’ in 

§ 1001.3004(d) to reflect the fact that all 

other Federal health care programs do 

not use the term ‘‘exclusion.’’ 

VI. Regulatory Impact Statement 

We have examined the impacts of this 

rulemaking as required by Executive 

Order 12866 on Regulatory Planning 

and Review (September 30, 1993), 

Executive Order 13563 on Improving 

Regulation and Regulatory Review 

(January 18, 2011), Executive Order 

14094 entitled ‘‘Modernizing Regulatory 

Review’’ (April 6, 2023), the Regulatory 

Flexibility Act (RFA) (September 19, 

1980, Pub. L. 96–354), section 1102(b) of 

the Social Security Act, section 202 of 

the Unfunded Mandates Reform Act of 

1995 (March 22, 1995; Pub. L. 104–4), 

and Executive Order 13132 on 

Federalism (August 4, 1999). 

Executive Order Nos. 12866 13563, and 

14094 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 


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equity). The Executive Order 14094 

entitled ‘‘Modernizing Regulatory 

Review’’ (hereinafter, the Modernizing 

E.O.) amends section 3(f)(1) of Executive 

Order 12866 (Regulatory Planning and 

Review). A Regulatory Impact Analysis 

(RIA) must be prepared for significant 

rules with significant effects ($200 

million or more in any 1 year). 

Based on our estimates, OMB’s Office 

of Information and Regulatory Affairs 

(OIRA) has determined this rulemaking 

is not significant per section 3(f)(1) as 

measured by the $200 million or more 

in any given year. This is not a major 

rule as defined at 5 U.S.C. 804(2); it is 

not economically significant because it 

does not reach that economic threshold 

1 year. 

This proposed rule is designed to 

propose implementation of one, new 

statutory provision consisting of a new 

exclusion authority. It is also designed 

to clarify existing regulatory 

requirements. The vast majority of 

providers and the Federal health care 

programs would be minimally, if at all, 

impacted by these proposed revisions. 

The proposed changes to the 

exclusion regulations would have little 

economic impact. On average per year, 

OIG excludes approximately 3,000 

individuals and entities, defends 100 

appeals of exclusions, and hears 2 

reinstatement denial appeals. 

Historically, one waiver of exclusion 

has been requested and granted in any 

given year. Thus, we believe that any 

aggregate economic effect of the 

proposed modifications would be 

minimal and the likely aggregate 

economic effect of these proposed 

modifications to the regulations would 

be significantly less than the monetary 

thresholds under Executive Order 

12866, as amended by Executive Order 

14094, and 5 U.S.C. 804(2). 

Regulatory Flexibility Act 

The RFA and the Small Business 

Regulatory Enforcement and Fairness 

Act of 1996, which amended the RFA, 

require agencies to analyze options for 

regulatory relief of small businesses. For 

purposes of the RFA, small entities 

include small businesses, nonprofit 

organizations, and government agencies. 

Providers are considered small entities 

by having revenues of less than $8.0 

million to $41.5 million in any 1 year. 

For purposes of the RFA, most 

physicians and suppliers are considered 

small entities. 

The aggregate economic impact of the 

exclusion provisions on small entities 

would be minimal. The rulemaking 

directly impacts small entities that may 

be excluded by clarifying how OIG 

determines exclusion lengths, waivers, 

reinstatement, and affirmative 

exclusion. It also codifies exclusion 

authorities added to section 1128 of the 

Act by MSIAA, adding clarity for 

members of the health care community 

regarding the scope of OIG’s actions. 

Because the rulemaking adds 

transparency to OIG’s process and 

implements exclusion authorities 

designed to protect the Federal health 

care programs and their beneficiaries 

from untrustworthy individuals and 

entities, we believe any resulting impact 

will be positive for the health care 

community. In summary, this notice of 

proposed rulemaking will not have a 

significant impact on the operations of 

a substantial number of small providers 

and a regulatory flexibility analysis is 

not required for this rulemaking. 

Unfunded Mandates Reform Act 

The Unfunded Mandates Reform Act 

of 1995 (UMRA) generally requires that 

each agency conduct a cost-benefit 

analysis, identify and consider a 

reasonable number of regulatory 

alternatives, and select the least costly, 

most cost-effective, or least burdensome 

alternative that achieves the objectives 

of the rule before promulgating any 

proposed or final rule that includes a 

Federal mandate that may result in 

expenditures of more than $100 million 

(adjusted for inflation) in at least one 

year by State, local, and Tribal 

governments, or by the private sector. 

Each agency must also seek input from 

State, local, and Tribal governments. 

The current threshold after adjustment 

for inflation using the Implicit Price 

Deflator for the Gross Domestic Product 

is $183 million, reported in 2023 

dollars. This proposed rule, if finalized, 

would not result in an unfunded 

mandate in any year that meets or 

exceeds this amount. 

Executive Order 13132 

Executive Order 13132, Federalism, 

establishes certain requirements that an 

agency must meet when it promulgates 

a rule that imposes substantial direct 

requirements or costs on State and local 

governments, preempts State law, or 

otherwise has federalism implications. 

In reviewing this rulemaking under the 

threshold criteria of Executive Order 

13132, we have determined that this 

proposed rule would not significantly 

affect the rights, roles, or 

responsibilities of State or local 

governments. 

VII. Paperwork Reduction Act 

These proposed changes impose no 

new information collection and 

recordkeeping requirements. 

Consequently, it need not be reviewed 

by the Office of Management and 

Budget under the authority of the 

Paperwork Reduction Act of 1995. 

List of Subjects in 42 CFR Parts 1000 

and 1001 

Administrative practice and 

procedure, Fraud, Grant programs— 

health, Health facilities, Health 

professions, Maternal and child health, 

Medicaid, Medicare. 

For the reasons stated in the 

preamble, OIG proposes to amend 42 

CFR parts 1000 and 1001 as set forth 

below: 

PART 1000—INTRODUCTION; 

GENERAL DEFINITIONS 

■ 1. The authority citation to part 1000 

continues to read as follows: 

Authority: 42 U.S.C. 1320 and 1395hh. 

■ 2. Revise and republish § 1000.10 to 

read as follows: 

§ 1000.10 General definitions. 

In this chapter, unless the context 

indicates otherwise— 

Act means the Social Security Act, 

and titles referred to are titles of that 

Act. 

Administrator means the 

Administrator, Centers for Medicare & 

Medicaid Services (CMS), formerly the 

Health Care Financing Administration 

(HCFA). 

Agent means any person who has 

express or implied authority to obligate 

or act on behalf of an entity. 

ALJ means an Administrative Law 

Judge. 

Beneficiary means any individual 

eligible to have benefits paid to the 

beneficiary, or on the beneficiary’s 

behalf, under Medicare or any State 

health care program. 

CFR stands for Code of Federal 

Regulations. 

CMS stands for Centers for Medicare 

& Medicaid Services, formerly the 

Health Care Financing Administration 

(HCFA). 

Department means the Department of 

Health and Human Services (HHS), 

formerly the Department of Health, 

Education, and Welfare. 

Directly, as used in the definition of 

‘‘furnished’’ in this section, means the 

provision or supply of items and 

services by individuals or entities 

(including items and services provided 

or supplied by them but manufactured, 

ordered, or prescribed by another 

individual or entity) who request or 

receive payment from Medicare, 

Medicaid, or other Federal health care 

programs. 

ESRD stands for end-stage renal 

disease. 


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Exclusion means that items and 

services furnished, ordered, or 

prescribed by a specified individual or 

entity will not be reimbursed under 

Medicare, Medicaid, or any other 

Federal health care programs until the 

individual or entity is reinstated by OIG. 

Federal health care program means 

any plan or program that provides 

health benefits, whether directly, 

through insurance, or otherwise, which 

is funded directly, in whole or in part, 

by the United States Government (other 

than the Federal Employees Health 

Benefits Program), or any State health 

care program as defined in this section. 

FR stands for Federal Register. 

Furnished refers to items or services 

provided or supplied, directly or 

indirectly, by any individual or entity. 

HHS stands for the Department of 

Health and Human Services. 

HHA stands for home health agency. 

HMO stands for health maintenance 

organization. 

ICF stands for intermediate care 

facility. 

Indirect ownership interest includes 

an ownership interest through any other 

entity or entities that ultimately have an 

ownership interest in the entity at issue. 

(For example, an individual has a 10- 

percent ownership interest in the entity 

at issue if they have a 20-percent 

ownership interest in a corporation that 

wholly owns a subsidiary that is a 50- 

percent owner of the entity at issue.) 

Indirectly, as used in the definition of 

‘‘furnished’’ in this section, means the 

provision or supply of items and 

services manufactured, distributed, 

supplied, or otherwise provided by 

individuals or entities that do not 

directly request or receive payment from 

Medicare, Medicaid, or other Federal 

health care programs, but that provide 

items and services to providers, 

practitioners, or suppliers who request 

or receive payment from these programs 

for such items or services. 

Inspector General means the Inspector 

General for the Department of Health 

and Human Services. 

Knowingly means that a person, with 

respect to an act, has actual knowledge 

of the act, acts in deliberate ignorance 

of the act, or acts in reckless disregard 

of the act, and no proof of specific intent 

to defraud is required. 

Managing employee means an 

individual (including a general 

manager, business manager, 

administrator, or director) who exercises 

operational or managerial control over 

the entity or part thereof or directly or 

indirectly conducts the day-to-day 

operations of the entity or part thereof. 

Medicaid means medical assistance 

provided under a State plan approved 

under Title XIX of the Act. 

Medicare means the health insurance 

program for the aged and disabled under 

Title XVIII of the Act. 

OIG means the Office of Inspector 

General within HHS. 

Ownership interest means an interest 

in: 

(1) The capital, the stock, or the 

profits of the entity; or 

(2) Any mortgage, deed of trust, note, 

or other obligation secured in whole or 

in part by the property or assets of the 

entity. 

Patient means any individual who is 

receiving health care items or services, 

including any item or service provided 

to meet their physical, mental, or 

emotional needs or well-being 

(including a resident receiving care in a 

facility as described in part 483 of this 

chapter), whether or not reimbursed 

under any Federal health care program 

and regardless of the location in which 

such item or service is provided. 

QIO means a quality improvement 

organization as that term is used in 

section 1152 of the Act (42 U.S.C. 

1320c–1) and its implementing 

regulations. 

Secretary means the Secretary of the 

Department or the Secretary’s designees. 

SNF stands for skilled nursing 

facility. 

Social Security benefits means 

monthly cash benefits payable under 

section 202 or 223 of the Act. 

SSA stands for Social Security 

Administration. 

State includes the 50 States, the 

District of Columbia, Puerto Rico, the 

Virgin Islands, Guam, American Samoa, 

the Northern Mariana Islands, and the 

Trust Territory of the Pacific Islands. 

State health care program means: 

(1) A State plan approved under title 

XIX of the Act (Medicaid); 

(2) Any program receiving funds 

under title V of the Act or from an 

allotment to a State under such title 

(Maternal and Child Health Services 

Block Grant program); 

(3) Any program receiving funds 

under subtitle A of title XX of the Act 

or from any allotment to a State under 

such subtitle (Block Grants to States for 

Social Services); or 

(4) A State child health plan approved 

under title XXI (Children’s Health 

Insurance Program). 

United States means the 50 States, the 

District of Columbia, the 

Commonwealth of Puerto Rico, the 

Virgin Islands, Guam, American Samoa, 

and the Northern Mariana Islands. 

U.S.C. stands for United States Code. 

PART 1001—PROGRAM INTEGRITY— 

THE FEDERAL HEALTH CARE 

PROGRAMS 

■ 3. The authority citation to part 1001 

continues to read as follows: 

Authority: 42 U.S.C. 1302; 1320a–7; 

1320a–7b; 1395u(j); 1395u(k); 1395w– 

104(e)(6), 1395y(d); 1395y(e); 

1395cc(b)(2)(D), (E), and (F); 1395hh; 

1842(j)(1)(D)(iv), 1842(k)(1), and sec. 2455, 

Pub. L. 103–355, 108 Stat. 3327 (31 U.S.C. 

6101 note). 

■ 4. Revise the heading to part 1001 as 

set forth above. 

■ 5. Revise and republish subpart A, 

consisting of §§ 1001.1 and 1001.2 to 

read as follows: 

Subpart A—General Provisions 

§ 1001.1 Scope and purpose. 

(a) The regulations in this part specify 

certain bases upon which individuals 

and entities may, or in some cases must, 

be excluded from participation in all 

Federal health care programs. They also 

state the effect of exclusion, the factors 

that will be considered in determining 

the length of any exclusion, the 

provisions governing notices of 

exclusions, and the process by which an 

excluded individual or entity may seek 

reinstatement into the programs. 

(b) The regulations in this part are 

applicable to and binding on the Office 

of Inspector General (OIG) in imposing 

and proposing exclusions, as well as to 

Administrative Law Judges (ALJs), the 

Departmental Appeals Board, and 

Federal courts in reviewing the 

imposition of exclusions by OIG (and, 

where applicable, in imposing 

exclusions proposed by OIG). 

§ 1001.2 Definitions. 

For purposes of this part: 

Convicted means that— 

(1) A judgment of conviction has been 

entered against an individual or entity 

by a Federal, State, or local court, 

regardless of whether: 

(i) There is a post-trial motion or an 

appeal pending; or 

(ii) The judgment of conviction or 

other record relating to the criminal 

conduct has been expunged or 

otherwise removed; 

(2) A Federal, State, or local court has 

made a finding of guilt against an 

individual or entity; 

(3) A Federal, State, or local court has 

accepted a plea of guilty or nolo 

contendere by an individual or entity; or 

(4) An individual or entity has 

entered into participation in a first 

offender, deferred adjudication, or other 

program or arrangement where 

judgment of conviction has been 

withheld. 


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HHS means Department of Health and 

Human Services. 

Immediate family member means a 

person’s husband or wife; natural or 

adoptive parent; child or sibling; 

stepparent, stepchild, stepbrother, or 

stepsister; father-, mother-, daughter-, 

son-, brother-, or sister-in-law; 

grandparent or grandchild; or spouse of 

a grandparent or grandchild. 

Incarceration means imprisonment or 

any type of confinement with or without 

supervised release, including, but not 

limited to, community confinement, 

house arrest, and home detention. 

Member of household means, with 

respect to a person, any individual with 

whom the person is sharing a common 

abode as part of a single-family unit, 

including domestic employees and 

others who live together as a family 

unit. A roomer or boarder is not 

considered a member of a household. 

Ownership or control interest means, 

with respect to an entity, a person who: 

(1) Has a direct or an indirect 

ownership interest (or any combination 

thereof) of 5 percent or more in the 

entity; 

(2) Is the owner of a whole or part 

interest in any mortgage, deed of trust, 

note, or other obligation secured (in 

whole or in part) by the entity or any of 

the property assets thereof, if such 

interest is equal to or exceeds 5 percent 

of the total property and assets of the 

entity; 

(3) Is an officer or a director of the 

entity; 

(4) Is a partner in the entity if the 

entity is organized as a partnership; 

(5) Is an agent of the entity; or 

(6) Is a managing employee of the 

entity. 

Professionally recognized standards 

of health care are statewide or national 

standards of care, whether in writing or 

not, that professional peers of the 

individual or entity whose provision of 

care is an issue, recognize as applying 

to those peers practicing or providing 

care within a State. When the 

Department has declared a treatment 

modality not to be safe and effective, 

practitioners who employ such a 

treatment modality will be deemed not 

to meet professionally recognized 

standards of health care. This definition 

will not be construed to mean that all 

other treatments meet professionally 

recognized standards. 

Sole community physician means a 

physician who is the only physician 

who provides primary care services to 

Federal or State health care program 

beneficiaries within a defined service 

area. 

Sole source of essential specialized 

services in the community means that an 

individual or entity— 

(1) Is the only practitioner, supplier, 

or provider furnishing specialized 

services in an area designated by the 

Health Resources Services 

Administration as a health professional 

shortage area for that medical specialty, 

as listed in 42 CFR part 5, appendices 

B through F; 

(2) Is a sole community hospital, as 

defined in § 412.92 of this title; or 

(3) Is the only source of specialized 

services in a reasonably defined service 

area where services by a non-specialist 

could not be substituted for the source 

without jeopardizing the health or safety 

of beneficiaries. 

State Medicaid Fraud Control Unit 

means a unit certified by the Secretary 

as meeting the criteria of 42 U.S.C. 

1396b(q) and § 1002.305 of this chapter. 

■ 6. Revise and republish subpart B, 

consisting of §§ 1001.101 and 1001.102, 

to read as follows: 

Subpart B—Mandatory Exclusions 

§ 1001.101 Basis for liability. 

OIG will exclude any individual or 

entity that— 

(a) Has been convicted of a criminal 

offense related to the delivery of an item 

or service under Medicare or a State 

health care program, including the 

performance of management or 

administrative services relating to the 

delivery of items or services under any 

such program; 

(b) Has been convicted, under Federal 

or State law, of a criminal offense 

related to the neglect or abuse of a 

patient, in connection with the delivery 

of a health care item or service, 

including any offense that OIG 

concludes entailed, or resulted in, 

neglect or abuse of patients (the delivery 

of a health care item or service includes 

the provision of any item or service to 

an individual to meet the individual’s 

physical, mental, or emotional needs or 

well-being, whether or not reimbursed 

under a Federal health care program); 

(c) Has been convicted, under Federal 

or State law, of a felony relating to 

fraud, theft, embezzlement, breach of 

fiduciary responsibility, or other 

financial misconduct— 

(1) In connection with the delivery of 

a health care item or service, including 

the performance of management or 

administrative services relating to the 

delivery of such items or services; or 

(2) With respect to any act or 

omission in a health care program (other 

than Medicare or a State health care 

program) operated or financed in whole 

or in part by any Federal, State, or local 

government agency; or 

(d) Has been convicted, under Federal 

or State law, of a felony relating to the 

unlawful manufacture, distribution, 

prescription, or dispensing of a 

controlled substance, as defined under 

Federal or State law. This applies to any 

individual or entity that— 

(1) Is, or has ever been, a health care 

practitioner, provider, or supplier, or 

furnished or furnishes items or services; 

(2) Holds, or has held, a direct or an 

indirect ownership or control interest in 

an entity that furnished or furnishes 

items or services or is, or has ever been, 

an officer, director, agent, or managing 

employee of such an entity; or 

(3) Is, or has ever been, employed in 

any capacity in the health care industry. 

§ 1001.102 Length of exclusion. 

(a) No exclusion imposed in 

accordance with § 1001.101 will be for 

less than 5 years. 

(b) Any of the following factors may 

be considered to be aggravating and a 

basis for lengthening the period of 

exclusion— 

(1) The acts resulting in the 

conviction, or similar acts, caused, or 

were intended to cause, a financial loss 

of $50,000 or more to a government 

agency or program or to one or more 

other entities. (The entire amount of 

financial loss, including any amounts 

resulting from similar acts not 

adjudicated, will be considered 

regardless of whether full or partial 

restitution has been made.); 

(2) The acts that resulted in the 

conviction, or similar acts, were 

committed over a period of 1 year or 

more; 

(3) The acts that resulted in the 

conviction, or similar acts, had a 

significant adverse physical, mental, or 

financial impact on one or more 

program beneficiaries or other 

individuals; 

(4) In convictions involving patient 

abuse or neglect, the acts that resulted 

in the conviction were premeditated, 

part of a continuing pattern of behavior, 

or consisted of non-consensual sexual 

acts; 

(5) The sentence imposed by the court 

included incarceration; or 

(6) The convicted individual or entity 

has other documented instances of 

criminal, civil, or administrative 

wrongdoing. 

(c) Only if any of the aggravating 

factors set forth in paragraph (b) of this 

section justifies an exclusion longer 

than 5 years, may mitigating factors be 

considered as a basis for reducing the 

period of exclusion to no less than 5 

years. Only the following factors may be 

considered mitigating— 

(1) The record in the criminal 

proceedings demonstrates that the court 


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95158 Federal Register / Vol. 89, No. 231 / Monday, December 2, 2024 / Proposed Rules 

determined that the individual had a 

condition before or during the 

commission of the offense that reduced 

the individual’s culpability; or 

(2) The record in the criminal 

proceedings or a written statement by a 

government official demonstrates that 

the individual’s or entity’s cooperation 

with Federal or State officials resulted 

in other individuals or entities being 

excluded, indicted, or otherwise 

charged, convicted, or investigated. 

(d) In the case of an exclusion under 

this subpart, an exclusion will be— 

(1) For not less than 10 years if the 

individual has been convicted on one 

previous occasion of one or more 

offenses for which an exclusion may be 

imposed under section 1128(a) of the 

Act. (The aggravating factors in 

paragraph (b) of this section can be used 

to impose a period of time in excess of 

the 10-year minimum.); or 

(2) Permanent if the individual has 

been convicted on two or more previous 

occasions of one or more offenses for 

which an exclusion may be imposed 

under section 1128(a) of the Act. 

Subpart C—Permissive Exclusions 

■ 7. Revise and republish §§ 1001.201 

through 1001.951 to read as follows: 

Sec. 

1001.201 Conviction relating to program or 

health care fraud. 

1001.301 Conviction relating to obstruction 

of an investigation or audit. 

1001.401 Conviction relating to controlled 

substances. 

1001.501 License revocation or suspension. 

1001.601 Exclusion or suspension under a 

Federal or State health care program. 

1001.701 Excessive claims or furnishing of 

unnecessary or substandard items and 

services. 

1001.801 Failure of HMOs and CMPs to 

furnish medically necessary items and 

services. 

1001.901 False or improper claims. 

1001.951 Fraud and kickbacks and other 

prohibited activities. 

* * * * * 

§ 1001.201 Conviction relating to program 

or health care fraud. 

(a) Circumstance for exclusion. OIG 

may exclude an individual or entity 

convicted under Federal or State law 

of— 

(1) A misdemeanor relating to fraud, 

theft, embezzlement, breach of fiduciary 

responsibility, or other financial 

misconduct— 

(i) In connection with the delivery of 

any health care item or service, 

including the performance of 

management or administrative services 

relating to the delivery of such items or 

services; or 

(ii) With respect to any act or 

omission in a health care program, other 

than Medicare or a State health care 

program, operated or financed in whole 

or in part by any Federal, State, or local 

government agency; or 

(2) Fraud, theft, embezzlement, breach 

of fiduciary responsibility, or other 

financial misconduct with respect to 

any act or omission in a program, other 

than a health care program, operated or 

financed in whole or in part by any 

Federal, State, or local government 

agency. 

(b) Length of exclusion. (1) An 

exclusion imposed in accordance with 

this section will be for a period of 3 

years unless aggravating or mitigating 

factors listed in paragraphs (b)(2) and (3) 

of this section form a basis for 

lengthening or shortening that period. 

(2) Any of the following factors may 

be considered to be aggravating and a 

basis for lengthening the period of 

exclusion— 

(i) The acts resulting in the 

conviction, or similar acts, caused or 

reasonably could have been expected to 

cause a financial loss of $50,000 or more 

to a government agency or program or 

to one or more other entities. (The entire 

amount of financial loss will be 

considered, including any amounts 

resulting from similar acts not 

adjudicated, regardless of whether full 

or partial restitution has been made.); 

(ii) The acts that resulted in the 

conviction, or similar acts, were 

committed over a period of 1 year or 

more; 

(iii) The acts that resulted in the 

conviction, or similar acts, had a 

significant adverse physical, mental, or 

financial impact on one or more 

program beneficiaries or other 

individuals; 

(iv) The sentence imposed by the 

court included incarceration; or 

(v) The individual or entity has other 

documented instances of criminal, civil, 

or administrative wrongdoing. 

(3) Only the following factors may be 

considered as mitigating and a basis for 

reducing the period of exclusion— 

(i) The record in the criminal 

proceedings demonstrates that the court 

determined that the individual had a 

condition, before or during the 

commission of the offense, that reduced 

the individual’s culpability; or 

(ii) The record in the criminal 

proceedings or a written statement by a 

government official demonstrates that 

the individual’s or entity’s cooperation 

with Federal or State officials resulted 

in other individuals or entities being 

excluded, indicted, or otherwise 

charged, convicted, or investigated. 

§ 1001.301 Conviction relating to 

obstruction of an investigation or audit. 

(a) Circumstance for exclusion. OIG 

may exclude an individual or entity that 

has been convicted, under Federal or 

State law, in connection with the 

interference with or obstruction of any 

investigation or audit related to— 

(1) Any offense described in 

§ 1001.101 or § 1001.201; or 

(2) The use of funds received, directly 

or indirectly, from any Federal health 

care program. 

(b) Length of exclusion. (1) An 

exclusion imposed in accordance with 

this section will be for a period of 3 

years, unless aggravating or mitigating 

factors listed in paragraphs (b)(2) and (3) 

of this section form the basis for 

lengthening or shortening that period. 

(2) Any of the following factors may 

be considered to be aggravating and a 

basis for lengthening the period of 

exclusion— 

(i) The acts resulting in the 

conviction, or similar acts, caused, or 

reasonably could have been expected to 

cause a financial loss of $50,000 or more 

to a government agency or program or 

to one or more other entities. (The entire 

amount of financial loss will be 

considered, including any amounts 

resulting from similar acts not 

adjudicated, regardless of whether full 

or partial restitution has been made.); 

(ii) The acts that resulted in the 

conviction had a significant adverse 

physical, mental, or financial impact on 

one or more program beneficiaries or 

other individuals; 

(iii) The sentence imposed by the 

court included incarceration; 

(iv) The individual or entity has other 

documented instances of criminal, civil, 

or administrative wrongdoing. 

(3) Only the following factors may be 

considered as mitigating and a basis for 

reducing the period of exclusion— 

(i) The record of the criminal 

proceedings demonstrates that the court 

determined that the individual had a 

condition, before or during the 

commission of the offense, that reduced 

the individual’s culpability; or 

(ii) The record in the criminal 

proceedings or a written statement by a 

government official demonstrates that 

the individual’s or entity’s cooperation 

with Federal or State officials resulted 

in other individuals or entities being 

excluded, indicted, or otherwise 

charged, convicted, or investigated. 

§ 1001.401 Conviction relating to 

controlled substances. 

(a) Circumstance for exclusion. OIG 

may exclude an individual or entity 

convicted under Federal or State law of 

a misdemeanor relating to the unlawful 


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manufacture, distribution, prescription, 

or dispensing of a controlled substance, 

as defined under Federal or State law. 

This section applies to any individual or 

entity that— 

(1) Is, or has ever been, a health care 

practitioner, provider, or supplier, or 

furnished or furnishes items or services; 

(2) Holds, or held, a direct or indirect 

ownership or control interest in an 

entity that furnished or furnishes items 

or services or is or has ever been an 

officer, director, agent, or managing 

employee of such an entity; or 

(3) Is, or has ever been, employed in 

any capacity in the health care industry. 

(b) Length of exclusion. (1) An 

exclusion imposed in accordance with 

this section will be for a period of 3 

years, unless aggravating or mitigating 

factors listed in paragraphs (c)(2) and (3) 

of this section form a basis for 

lengthening or shortening that period. 

(2) Any of the following factors may 

be considered to be aggravating and to 

be a basis for lengthening the period of 

exclusion— 

(i) The acts that resulted in the 

conviction or similar acts were 

committed over a period of 1 year or 

more; 

(ii) The acts that resulted in the 

conviction or similar acts had a 

significant adverse physical, mental, or 

financial impact on program 

beneficiaries or other individuals or a 

Federal health care program; 

(iii) The sentence imposed by the 

court included incarceration; or 

(iv) The individual or entity has other 

documented instances of criminal, civil, 

or administrative wrongdoing. 

(3) Only the following factors may be 

considered to be mitigating and to be a 

basis for shortening the period of 

exclusion— 

(i) The record of the criminal 

proceedings demonstrates that the court 

determined that the individual had a 

condition, before or during the 

commission of the offense, that reduced 

the individual’s culpability; or 

(ii) The record in the criminal 

proceedings or a written statement by a 

government official demonstrates that 

the individual’s or entity’s cooperation 

with Federal or State officials resulted 

in other individuals or entities being 

excluded, indicted, or otherwise 

charged, convicted, or investigated. 

§ 1001.501 License revocation or 

suspension. 

(a) Circumstance for exclusion. OIG 

may exclude an individual or entity that 

has— 

(1) Had a license to provide health 

care revoked or suspended by any State 

licensing authority, or has otherwise 

lost such a license (including the right 

to apply for or renew such a license), for 

reasons bearing on the individual’s or 

entity’s professional competence, 

professional performance, or financial 

integrity; or 

(2) Has surrendered such a license 

while a formal disciplinary proceeding 

concerning the individual’s or entity’s 

professional competence, professional 

performance, or financial integrity was 

pending before a State licensing 

authority. 

(b) Length of exclusion. (1) An 

exclusion imposed in accordance with 

this section will not be for a period of 

time less than the period during which 

an individual’s or entity’s license is 

revoked, suspended, or otherwise not in 

effect as a result of, or in connection 

with, a State licensing agency action. 

(2) When an individual or entity has 

been excluded under this section, OIG 

will consider a request for reinstatement 

in accordance with § 1001.3001 if: 

(i) The individual or entity obtains the 

license in the State where the license 

was originally revoked, suspended, 

surrendered, or otherwise lost; or 

(ii) The individual meets the 

conditions for early reinstatement set 

forth in paragraph (c) of this section. 

(c) Consideration of early 

reinstatement. (1) If an individual or 

entity that is excluded in accordance 

with this section fully and accurately 

discloses the circumstances surrounding 

the action that formed the basis for the 

exclusion to a licensing authority of a 

different State or to a different licensing 

authority in the same State and that 

licensing authority grants the individual 

or entity a new health care license or 

has decided to take no adverse action as 

to a currently held health care license, 

OIG will consider a request for early 

reinstatement. OIG will consider the 

following factors in determining 

whether a request for early 

reinstatement under this paragraph 

(c)(1) will be granted: 

(i) The circumstances that formed the 

basis for the exclusion, including 

whether the circumstances were related 

to patient abuse or neglect; 

(ii) Whether the second licensing 

authority is in a State that is not the 

individual’s or entity’s primary place of 

practice; 

(iii) Documentation from the second 

licensing authority indicating that it was 

aware of the circumstances surrounding 

the action that formed the basis for the 

exclusion; 

(iv) Whether the individual or entity 

has demonstrated that the individual or 

entity has satisfactorily resolved any 

underlying problem that caused or 

contributed to the basis for the initial 

licensing action; 

(v) The benefits to the Federal health 

care programs and program beneficiaries 

of early reinstatement; 

(vi) The risks to the Federal health 

care programs and program beneficiaries 

of early reinstatement; 

(vii) Any additional or pending 

license actions in any State; 

(viii) Any ongoing investigations 

involving the individual or entity; and 

(ix) All the factors set forth in 

§ 1001.3002(b). 

(2) If an exclusion has been imposed 

under this section and the individual or 

entity does not have a valid health care 

license of any kind in any State, that 

individual or entity may request OIG to 

consider whether the individual or 

entity may be eligible for early 

reinstatement. OIG will consider the 

following factors in determining 

whether a request for early 

reinstatement under this paragraph 

(c)(2) will be granted: 

(i) The length of time the individual 

or entity has been excluded. OIG will 

not consider a request for early 

reinstatement under paragraph (c)(2) of 

this section if the individual or entity 

has been excluded for less than 3 years; 

however, if the action on which the 

exclusion is based was for a set period 

longer than 3 years, OIG will not 

consider a request for early 

reinstatement at any time prior to the 

expiration of the period set by the 

licensing board; 

(ii) The circumstances that formed the 

basis for the exclusion, including 

whether the circumstances were related 

to patient abuse or neglect; 

(iii) Whether the individual or entity 

has demonstrated that the individual or 

entity has satisfactorily resolved any 

underlying problem that caused or 

contributed to the basis for the initial 

licensing action; 

(iv) The benefits to the Federal health 

care programs and program beneficiaries 

of early reinstatement; 

(v) The risks to the Federal health care 

programs and program beneficiaries of 

early reinstatement; 

(vi) Any additional or pending license 

actions in any State; 

(vii) Any ongoing investigations 

involving the individual or entity; and 

(viii) All the factors set forth in 

§ 1001.3002(b). 

(3) Notwithstanding paragraphs (c)(1) 

and (2) of this section, if an individual’s 

or entity’s license revocation or 

suspension was for reasons related to 

patient abuse or neglect, OIG will not 

consider an application for early 

reinstatement if the individual or entity 

has been excluded for less than 5 years. 


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(4) Except for § 1001.3002(a)(1)(i), all 

provisions of subpart F (§§ 1001.3001 

through 1001.3005) apply to early 

reinstatements under this section. 

§ 1001.601 Exclusion or suspension under 

a Federal or State health care program. 

(a) Circumstance for exclusion. (1) 

OIG may exclude an individual or entity 

suspended or excluded from 

participation, or otherwise sanctioned, 

under— 

(i) Any Federal program involving the 

provision of health care; or 

(ii) A State health care program, for 

reasons bearing on the individual’s or 

entity’s professional competence, 

professional performance, or financial 

integrity. 

(2) The term ‘‘or otherwise 

sanctioned’’ in paragraph (a)(1) of this 

section means all actions that limit the 

ability of a person to participate in the 

program at issue regardless of what such 

an action is called, and includes 

situations where an individual or entity 

voluntarily withdraws from a program 

to avoid a formal sanction. 

(b) Length of exclusion. (1) An 

exclusion imposed in accordance with 

this section will not be for a period of 

time less than the period during which 

the individual or entity is excluded or 

suspended, or otherwise sanctioned, 

from a Federal or State health care 

program. 

(2) If the individual or entity is 

eligible to apply for reinstatement in 

accordance with § 1001.3001, and the 

sole reason why the State or Federal 

health care program denied 

reinstatement to that program is the 

existing exclusion imposed by OIG as a 

result of the original State or Federal 

health care program action, OIG will 

consider a request for reinstatement. 

§ 1001.701 Excessive claims or furnishing 

of unnecessary or substandard items and 

services. 

(a) Circumstance for exclusion. OIG 

may exclude an individual or entity that 

has— 

(1) Submitted, or caused to be 

submitted, bills or requests for 

payments under Medicare or any of the 

State health care programs containing 

charges or costs for items or services 

furnished that are substantially in 

excess of such individual’s or entity’s 

usual charges or costs for such items or 

services; or 

(2) Furnished, or caused to be 

furnished, to patients (whether or not 

covered by Medicare or any of the State 

health care programs) any items or 

services substantially in excess of the 

patient’s needs, or of a quality that fails 

to meet professionally recognized 

standards of health care. 

(b) Sources. OIG’s determination 

under paragraph (a)(2) of this section— 

that the items or services furnished were 

excessive or of unacceptable quality— 

will be made on the basis of 

information, including sanction reports, 

from the following sources: 

(1) The QIO for the area served by the 

individual or entity; 

(2) State or local licensing or 

certification authorities; 

(3) Fiscal agents or contractors, or 

private insurance companies; 

(4) State or local professional 

societies; or 

(5) Any other sources deemed 

appropriate by OIG. 

(c) Exceptions. An individual or 

entity will not be excluded for— 

(1) Submitting, or causing to be 

submitted, bills or requests for payment 

that contain charges or costs 

substantially in excess of usual charges 

or costs when such charges or costs are 

due to unusual circumstances or 

medical complications requiring 

additional time, effort, expense or other 

good cause; or 

(2) Furnishing, or causing to be 

furnished, items or services in excess of 

the needs of patients, when the items or 

services were ordered by a physician or 

other authorized individual, and the 

individual or entity furnishing the items 

or services was not in a position to 

determine medical necessity or to refuse 

to comply with the order of the 

physician or other authorized 

individual. 

(d) Length of exclusion. (1) An 

exclusion imposed in accordance with 

this section will be for a period of 3 

years, unless aggravating or mitigating 

factors set forth in paragraphs (d)(2) and 

(3) of this section form a basis for 

lengthening or shortening the period. In 

no case may the period be shorter than 

1 year for any exclusion taken in 

accordance with paragraph (a)(2) of this 

section. 

(2) Any of the following factors may 

be considered aggravating and a basis 

for lengthening the period of 

exclusion— 

(i) The conduct occurred over a 

period of 1 year or more; 

(ii) The conduct had a significant 

adverse physical, mental, or financial 

impact on program beneficiaries or 

other individuals; 

(iii) The individual or entity has other 

documented instances of criminal, civil, 

or administrative wrongdoing; or 

(iv) The conduct resulted in financial 

loss to any Federal health care program 

of $50,000 or more. 

(3) Only the following factor may be 

considered mitigating and a basis for 

reducing the period of exclusion: 

Whether there were few occurrences of 

the conduct, and the conduct occurred 

over a short period of time. 

§ 1001.801 Failure of HMOs and CMPs to 

furnish medically necessary items and 

services. 

(a) Circumstances for exclusion. OIG 

may exclude an entity— 

(1) That is a— 

(i) Health maintenance organization 

(HMO), as defined in section 1903(m) of 

the Act, providing items or services 

under a State Medicaid Plan; 

(ii) Primary care case management 

system providing services, in 

accordance with a waiver approved 

under section 1915(b)(1) of the Act; or 

(iii) HMO or competitive medical plan 

(CMP) providing items or services in 

accordance with a risk-sharing contract 

under section 1876 of the Act; 

(2) That has failed substantially to 

provide medically necessary items and 

services that are required under a plan, 

waiver or contract described in 

paragraph (a)(1) of this section to be 

provided to individuals covered by such 

plan, waiver or contract; and 

(3) Where such failure has adversely 

affected or has a substantial likelihood 

of adversely affecting covered 

individuals. 

(b) Sources. OIG’s determination 

under paragraph (a)(2) of this section— 

that the medically necessary items and 

services required under law or contract 

were not provided—will be made on the 

basis of information, including sanction 

reports, from the following sources: 

(1) The QIO or other quality assurance 

organization under contract with a State 

Medicaid plan for the area served by the 

HMO or competitive medical plan; 

(2) State or local licensing or 

certification authorities; 

(3) Fiscal agents or contractors, or 

private insurance companies; 

(4) State or local professional 

societies; 

(5) CMS’s HMO compliance office; or 

(6) Any other sources deemed 

appropriate by OIG. 

(c) Length of exclusion. (1) An 

exclusion imposed in accordance with 

this section will be for a period of 3 

years, unless aggravating or mitigating 

factors set forth in paragraphs (c)(2) and 

(3) of this section form a basis for 

lengthening or shortening the period. 

(2) Any of the following factors may 

be considered aggravating and a basis 

for lengthening the period of 

exclusion— 

(i) The entity failed to provide a large 

number or a variety of items or services; 

(ii) The failures occurred over a 

lengthy period of time; 


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(iii) The entity’s failure to provide a 

necessary item or service had or could 

have had a serious adverse effect; or 

(iv) The entity has other documented 

instances of criminal, civil, or 

administrative wrongdoing. 

(3) Only the following factors may be 

considered as mitigating and a basis for 

reducing the period of exclusion— 

(i) There were few violations and they 

occurred over a short period of time; or 

(ii) The entity took corrective action 

upon learning of impermissible 

activities by an employee or contractor. 

§ 1001.901 False or improper claims. 

(a) Circumstance for exclusion. OIG 

may exclude any individual or entity 

that it determines has committed an act 

described in section 1128A of the Act. 

The imposition of a civil money penalty 

or assessment is not a prerequisite for an 

exclusion under this section. 

(b) Length of exclusion. In 

determining the length of an exclusion 

imposed in accordance with this 

section, OIG will consider the following 

factors— 

(1) The nature and circumstances 

surrounding the actions that are the 

basis for liability, including the period 

of time over which the acts occurred, 

the number of acts, whether there is 

evidence of a pattern, and the amount 

claimed; 

(2) The degree of culpability; 

(3) Whether the individual or entity 

has other documented instances of 

criminal, civil, or administrative 

wrongdoing (the absence of any such 

instances is to be considered neutral); or 

(4) Other matters as justice may 

require. 

(c) Limitations. OIG may not impose 

an exclusion under this section more 

than 10 years after the date when an act 

which is described in section 1128A of 

the Act occurred. 

§ 1001.951 Fraud and kickbacks and other 

prohibited activities. 

(a) Circumstance for exclusion. (1) 

Except as provided for in paragraph 

(a)(2)(ii) of this section, OIG may 

exclude any individual or entity that it 

determines has committed an act 

described in section 1128B(b) of the Act. 

(2) With respect to acts described in 

section 1128B of the Act, OIG— 

(i) May exclude any individual or 

entity that it determines has knowingly 

and willfully solicited, received, offered 

or paid any remuneration in the manner 

and for the purposes described therein, 

irrespective of whether the individual or 

entity may be able to prove that the 

remuneration was also intended for 

some other purpose; and 

(ii) Will not exclude any individual or 

entity if that individual or entity can 

prove that the remuneration that is the 

subject of the exclusion is exempted 

from serving as the basis for an 

exclusion. 

(b) Length of exclusion. In 

determining the length of an exclusion 

imposed in accordance with this 

section, OIG may consider the following 

factors— 

(1) The nature and circumstances 

surrounding the actions that are the 

basis for liability, including the period 

of time over which the acts occurred, 

the number of acts, whether there is 

evidence of a pattern and the amount 

claimed; 

(2) The degree of culpability; 

(3) Whether the individual or entity 

has other documented instances of 

criminal, civil, or administrative 

wrongdoing (the absence of any such 

instances is to be considered neutral); or 

(4) Other matters as justice may 

require. 

(c) Limitations. OIG may not impose 

an exclusion under this section more 

than 10 years after the date when an act 

which is described in section 1128B(b) 

of the Act occurred. 

■ 8. Revise and republish §§ 1001.1101 

through 1001.1552 to read as follows: 

Sec. 

* * * * * 

1001.1101 Failure to disclose certain 

information. 

1001.1201 Failure to provide payment 

information. 

1001.1301 Failure to grant immediate 

access. 

1001.1401 Violations of Prospective 

Payment System corrective action. 

1001.1501 Default of health education loan 

or scholarship obligations. 

1001.1551 Exclusion of individuals with 

ownership or control interest in 

sanctioned entities. 

1001.1552 Making false statements or 

misrepresentation of material facts. 

§ 1001.1101 Failure to disclose certain 

information. 

(a) Circumstance for exclusion. OIG 

may exclude any entity that did not 

fully and accurately, or completely, 

make disclosures as required by section 

1124, 1124A or 1126 of the Act, and by 

part 455, subpart B and part 420, 

subpart C of this title. 

(b) Length of exclusion. The following 

factors will be considered in 

determining the length of an exclusion 

under this section— 

(1) The number of instances where 

full and accurate, or complete, 

disclosure was not made; 

(2) The significance of the 

undisclosed information; 

(3) Whether the individual or entity 

has other documented instances of 

criminal, civil, or administrative 

wrongdoing (the absence of such 

instances is to be considered neutral); 

(4) Any other facts that bear on the 

nature or seriousness of the conduct; 

and 

(5) The extent to which the entity 

knew that the disclosures made were 

not full or accurate. 

§ 1001.1201 Failure to provide payment 

information. 

(a) Circumstance for exclusion. OIG 

may exclude any individual or entity 

that furnishes, orders, refers for 

furnishing, or certifies the need for 

items or services for which payment 

may be made under Medicare or any of 

the State health care programs and 

that— 

(1) Fails to provide such information 

as is necessary to determine whether 

such payments are or were due and the 

amounts thereof; or 

(2) Has refused to permit such 

examination and duplication of its 

records as may be necessary to verify 

such information. 

(b) Length of exclusion. The following 

factors will be considered in 

determining the length of an exclusion 

under this section— 

(1) The number of instances where 

information was not provided; 

(2) The circumstances under which 

such information was not provided; 

(3) The amount of the payments at 

issue; and 

(4) Whether the individual or entity 

has other documented instances of 

criminal, civil, or administrative 

wrongdoing (the absence of such 

instances is to be considered neutral). 

§ 1001.1301 Failure to grant immediate 

access. 

(a) Circumstance for exclusion. (1) 

OIG may exclude any individual or 

entity that fails to grant immediate 

access upon reasonable request to— 

(i) The Secretary, a State survey 

agency or other authorized entity for the 

purpose of determining, in accordance 

with section 1864(a) of the Act, 

whether— 

(A) An institution is a hospital or 

skilled nursing facility; 

(B) An agency is a home health 

agency; 

(C) An agency is a hospice program; 

(D) A facility is a rural health clinic 

as defined in section 1861(aa)(2) of the 

Act, or a comprehensive outpatient 

rehabilitation facility as defined in 

section 1861(cc)(2) of the Act; 

(E) A laboratory is meeting the 

requirements of section 1861(s) (15) and 

(16) of the Act, and section 353(f) of the 

Public Health Service Act; 

(F) A clinic, rehabilitation agency or 

public health agency is meeting the 


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requirements of section 1861(p)(4) (A) 

or (B) of the Act; 

(G) An ambulatory surgical center is 

meeting the standards specified under 

section 1832(a)(2)(F)(i) of the Act; 

(H) A portable x ray unit is meeting 

the requirements of section 1861(s)(3) of 

the Act; 

(I) A screening mammography service 

is meeting the requirements of section 

1834(c)(3) of the Act; 

(J) An end-stage renal disease facility 

is meeting the requirements of section 

1881(b) of the Act; 

(K) A physical therapist in 

independent practice is meeting the 

requirements of section 1861(p) of the 

Act; 

(L) An occupational therapist in 

independent practice is meeting the 

requirements of section 1861(g) of the 

Act; 

(M) An organ procurement 

organization meets the requirements of 

section 1138(b) of the Act; or 

(N) A rural primary care hospital 

meets the requirements of section 

1820(i)(2) of the Act; 

(ii) The Secretary, a State survey 

agency or other authorized entity to 

perform the reviews and surveys 

required under State plans in 

accordance with sections 1902(a)(26) 

(relating to inpatient mental hospital 

services), 1902(a)(31) (relating to 

intermediate care facilities for 

individuals with intellectual 

disabilities), 1919(g) (relating to nursing 

facilities), 1929(i) (relating to providers 

of home and community care and 

community care settings), 1902(a)(33), 

and 1903(g) of the Act; 

(iii) OIG for reviewing records, 

documents, and other material or data 

in any medium (including electronically 

stored information and any tangible 

thing) necessary to OIG’s statutory 

functions; or 

(iv) A State Medicaid fraud control 

unit (MFCU) for the purpose of 

conducting its activities. 

(2) For purposes of paragraphs (a)(1)(i) 

and (ii) of this section— 

(i) Failure to grant immediate access 

means the failure to grant access at the 

time of a reasonable request unless the 

requested material does not exist or is 

not at the location where the request is 

presented. 

(ii) Reasonable request means a 

written request made by a properly 

identified agent of the Secretary, of a 

State survey agency, or of another 

authorized entity, during hours that the 

facility, agency or institution is open for 

business. 

(iii) The request will include a 

statement of the authority for the 

request, the rights of the entity in 

responding to the request, the 

definitions of reasonable request and 

failure to grant immediate access, and 

the penalties for failure to comply, 

including when the exclusion will take 

effect. 

(3) For purposes of paragraphs 

(a)(1)(iii) and (iv) of this section— 

(i) Failure to grant immediate access 

means the failure to produce or make 

available for inspection and copying the 

requested material at the time of a 

reasonable request unless the requested 

material does not exist or is not at the 

location where the request is presented. 

(ii) Reasonable request means a 

written request, signed by a designated 

representative of OIG or a MFCU and 

made by a properly identified agent of 

OIG or a MFCU during reasonable 

business hours, where there is 

information to suggest that the person 

has violated statutory or regulatory 

requirements under titles V, XI, XVIII, 

XIX, or XX of the Act. 

(iii) The request will include a 

statement of the authority for the 

request, the person’s rights in 

responding to the request, the 

definitions of reasonable request and 

failure to grant immediate access, and 

the effective date, length, and scope and 

effect of the exclusion that would be 

imposed for failure to comply with the 

request, and the earliest date that a 

request for reinstatement would be 

considered. 

(4) Nothing in this section shall in any 

way limit access otherwise authorized 

under State or Federal law. 

(b) Length of exclusion. (1) An 

exclusion of an individual under this 

section may be for a period equal to the 

sum of: 

(i) The length of the period during 

which the immediate access was not 

granted; and 

(ii) An additional period of up to 90 

days. 

(2) The exclusion of an entity may be 

for a longer period than the period in 

which immediate access was not 

granted based on consideration of the 

following factors— 

(i) The impact of the failure to grant 

the requested immediate access on 

Medicare or any of the State health care 

programs, beneficiaries, or the public; 

(ii) The circumstances under which 

such access was refused; 

(iii) The impact of the exclusion on 

any Federal health care program, 

beneficiaries, or the public; and 

(iv) Whether the entity has other 

documented instances of criminal, civil, 

or administrative wrongdoing (the 

absence of any such instances is to be 

considered neutral). 

(3) For purposes of paragraphs (b)(1) 

and (2) of this section, the length of the 

period in which immediate access was 

not granted will be measured from the 

time the request is made, or from the 

time by which access was required to be 

granted, whichever is later. 

(c) The exclusion will be effective as 

of the date immediate access was not 

granted. 

§ 1001.1401 Violations of Prospective 

Payment System corrective action. 

(a) Circumstance for exclusion. OIG 

may exclude any hospital that CMS 

determines has failed substantially to 

comply with a corrective action plan 

required by CMS under section 

1886(f)(2)(B) of the Act. 

(b) Length of exclusion. The following 

factors will be considered in 

determining the length of exclusion 

under this section— 

(1) The impact of the hospital’s failure 

to comply on any Federal health care 

program, program beneficiaries, or other 

individuals; 

(2) The circumstances under which 

the failure occurred; 

(3) The nature of the failure to 

comply; 

(4) The impact of the exclusion on 

any Federal health care program, 

beneficiaries, or the public; and 

(5) Whether the hospital has other 

documented instances of criminal, civil, 

or administrative wrongdoing (the 

absence of any such instances is to be 

considered neutral). 

§ 1001.1501 Default of health education 

loan or scholarship obligations. 

(a) Circumstance for exclusion. (1) 

Except as provided in paragraph (a)(4) 

of this section, OIG may exclude any 

individual that the administrator of the 

health education loan, scholarship, or 

loan repayment program determines is 

in default on repayments of scholarship 

obligations or loans, or the obligations 

of any loan repayment program, in 

connection with health professions 

education made or secured in whole or 

in part by the Secretary. 

(2) Before imposing an exclusion in 

accordance with paragraph (a)(1) of this 

section, OIG must determine that the 

administrator of the health education 

loan, scholarship, or loan repayment 

program has taken all reasonable 

administrative steps to secure 

repayment of the loans or obligations. 

When an individual has been offered a 

Medicare offset arrangement as required 

by section 1892 of the Act, OIG will find 

that all reasonable steps have been 

taken. 

(3) OIG will take into account access 

of beneficiaries to physician services for 


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which payment may be made under the 

Medicare and Medicaid programs in 

determining whether to impose an 

exclusion. 

(4) OIG will not exclude a physician 

who is the sole community physician or 

the sole source of essential specialized 

services in a community if a State 

requests that the physician not be 

excluded. 

(b) Length of exclusion. The 

individual will be excluded until the 

administrator of the health education 

loan, scholarship, or loan repayment 

program notifies OIG that the individual 

has entered into an agreement with the 

administrator of the health education 

loan, scholarship, or loan repayment 

program to cure the default or that there 

is no longer an outstanding debt. If the 

administrator of the health education 

loan, scholarship, or loan repayment 

program notifies OIG that the individual 

has entered into an agreement to cure 

the default, the individual may be 

eligible for a stay of the effect of 

exclusion by OIG for as long as the 

individual remains in compliance with 

the terms of the agreement. If the 

administrator of the health education 

loan, scholarship, or loan repayment 

program notifies OIG that there is no 

longer an outstanding debt, OIG will 

inform the individual of the individual’s 

right to apply for reinstatement. 

§ 1001.1551 Exclusion of individuals with 

ownership or control interest in sanctioned 

entities. 

(a) Circumstance for exclusion. OIG 

may exclude any individual who— 

(1) Has a direct or indirect ownership 

or control interest in a sanctioned 

entity, and who knows or should know 

(as defined in section 1128A(i)(6) of the 

Act) of the action constituting the basis 

for the conviction or exclusion set forth 

in paragraph (b) of this section; or 

(2) Is an officer or managing employee 

(as defined in section 1126(b) of the Act) 

of such an entity. 

(b) For purposes of paragraph (a) of 

this section, the term ‘‘sanctioned 

entity’’ means an entity that— 

(1) Has been convicted of any offense 

described in §§ 1001.101 through 

1001.401; or 

(2) Has been excluded from 

participation in Medicare or a State 

health care program. 

(c) Length of exclusion. (1) If the 

entity has been excluded, the length of 

the individual’s exclusion will be for 

the same length as that of the sanctioned 

entity, regardless of whether the 

individual terminates the relationship 

with the sanctioned entity. 

(2) If the entity was not excluded, the 

length of the individual’s exclusion will 

be determined by considering the 

factors that would have been considered 

if the entity had been excluded. 

(3) An individual excluded under this 

section may apply for reinstatement in 

accordance with the procedures set 

forth in § 1001.3001. 

§ 1001.1552 Making false statements or 

misrepresentation of material facts. 

(a) Circumstance for exclusion. OIG 

may exclude any individual or entity 

that it determines has knowingly made 

or caused to be made any false 

statement, omission, or 

misrepresentation of a material fact in 

any application, agreement, bid, or 

contract to participate or enroll as a 

provider of services or supplier under a 

Federal health care program, including 

Medicare Advantage organizations 

under Part C of Medicare, prescription 

drug plan sponsors under Part D of 

Medicare, Medicaid managed care 

organizations, and entities that apply to 

participate as providers of services or 

suppliers in such managed care 

organizations and such plans. 

(b) Definition of ‘‘material.’’ For 

purposes of this section, the term 

‘‘material’’ means having a natural 

tendency to influence or be capable of 

influencing the decision to approve or 

deny the request to participate or enroll 

as a provider of services or supplier 

under a Federal health care program. 

(c) Sources. OIG’s determination 

under paragraph (a) of this section will 

be made on the basis of information 

from the following sources: 

(1) CMS; 

(2) Medicaid State agencies; 

(3) Fiscal agents or contractors or 

private insurance companies; 

(4) Law enforcement agencies; 

(5) State or local licensing or 

certification authorities; 

(6) State or local professional 

societies; or 

(7) Any other sources deemed 

appropriate by OIG. 

(d) Length of exclusion. In 

determining the length of an exclusion 

imposed in accordance with this 

section, OIG will consider the following 

factors: 

(1) The nature and circumstances 

surrounding the false statement; 

(2) Whether and to what extent 

payments were requested or received 

from the Federal health care program 

under the application, agreement, bid, 

or contract on which the false statement, 

omission, or misrepresentation was 

made; and 

(3) Whether the individual or entity 

has other documented instances of 

criminal, civil, or administrative 

wrongdoing (the absence of any such 

instances is to be considered neutral). 

■ 9. Add § 1001.1553 to read as follows: 

§ 1001.1553 Knowingly misclassifying 

covered outpatient drugs. 

(a) Circumstance for exclusion. OIG 

may exclude any manufacturer (as 

defined in section 1927 of the Act), or 

officer, director, agent, or managing 

employee of such manufacturer that: 

(1) Knowingly misclassifies a covered 

outpatient drug; 

(2) Knowingly fails to correct such 

misclassification; or 

(3) Knowingly provides false 

information related to drug pricing, drug 

product information, or data related to 

drug pricing or drug product 

information. 

(b) This section applies to covered 

outpatient drugs supplied by 

manufacturers under agreements under 

section 1927 of the Act in effect on or 

after April 18, 2019. 

(c) Length of exclusion. The following 

factors will be considered in 

determining the length of an exclusion 

under this section: 

(1) The nature and circumstances 

surrounding the actions that are the 

basis for liability, including the period 

of time over which the acts occurred, 

the number of acts, and whether there 

is evidence of a pattern; 

(2) The degree of culpability; 

(3) Whether the entity has other 

documented instances of criminal, civil, 

or administrative wrongdoing (the 

absence of any such instances is to be 

considered neutral); or 

(4) Other matters as justice may 

require. 

■ 10. Revise and republish §§ 1001.1601 

and 1001.1701 to read as follows: 

§ 1001.1601 Violations of the limitations on 

physician charges. 

(a) Circumstance for exclusion. (1) 

OIG may exclude a physician whom it 

determines— 

(i) Is a non-participating physician 

under section 1842(j) of the Act; 

(ii) Furnished services to a 

beneficiary; 

(iii) Knowingly and willfully billed— 

(A) On a repeated basis for such 

services actual charges in excess of the 

maximum allowable actual charge 

determined in accordance with section 

1842(j)(1)(C) of the Act for the period 

January 1, 1987 through December 31, 

1990; or 

(B) Individuals enrolled under part B 

of title XVIII of the Act during the 

statutory freeze for actual charges in 

excess of such physician’s actual 

charges determined in accordance with 

section 1842(j)(1)(A) of the Act for the 

period July 1, 1984, to December 31, 

1986; and 


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(iv) Is not the sole community 

physician or sole source of essential 

specialized services in the community. 

(2) OIG will take into account access 

of beneficiaries to physicians’ services 

for which Medicare payment may be 

made in determining whether to impose 

an exclusion. 

(b) Length of exclusion. (1) In 

determining the length of an exclusion 

in accordance with this section, OIG 

will consider the following factors— 

(i) The number of services for which 

the physician billed in excess of the 

maximum allowable charges; 

(ii) The number of beneficiaries for 

whom services were billed in excess of 

the maximum allowable charges; 

(iii) The amount of the charges that 

were in excess of the maximum 

allowable charges; and 

(iv) Whether the physician has other 

documented instances of criminal, civil, 

or administrative wrongdoing (the 

absence of any such instances is to be 

considered neutral). 

(2) The period of exclusion may not 

exceed 5 years. 

§ 1001.1701 Billing for services of 

assistant at surgery during cataract 

operations. 

(a) Circumstance for exclusion. OIG 

may exclude a physician whom it 

determines— 

(1) Has knowingly and willfully 

presented or caused to be presented a 

claim, or billed an individual enrolled 

under Part B of the Medicare program 

(or the individual’s representative) for: 

(i) Services of an assistant at surgery 

during a cataract operation; or 

(ii) Charges that include a charge for 

an assistant at surgery during a cataract 

operation; 

(2) Has not obtained prior approval 

for the use of such assistant from the 

appropriate Utilization and Quality 

Control Quality Improvement 

Organization (QIO) or Medicare carrier; 

and 

(3) Is not the sole community 

physician or sole source of essential 

specialized services in the community. 

(b) Access to services. OIG will take 

into account access of beneficiaries to 

physicians’ services for which Medicare 

payment may be made in determining 

whether to impose an exclusion. 

(c) Length of exclusion. (1) In 

determining the length of an exclusion 

in accordance with this section, OIG 

will consider the following factors— 

(i) The number of instances for which 

claims were submitted or beneficiaries 

were billed for unapproved use of 

assistants during cataract operations; 

(ii) The amount of the claims or bills 

presented; 

(iii) The circumstances under which 

the claims or bills were made, including 

whether the services were medically 

necessary; 

(iv) Whether approval for the use of 

an assistant was requested from the QIO 

or carrier; and 

(v) Whether the physician has other 

documented instances of criminal, civil, 

or administrative wrongdoing (the 

absence of any such instances is to be 

considered neutral). 

(2) The period of exclusion may not 

exceed 5 years. 

Subpart D—Waivers and Effect of 

Exclusion 

■ 11. Revise and republish §§ 1001.1801 

and 1001.1901 to read as follows: 

§ 1001.1801 Waivers of exclusions. 

(a) OIG has the authority to grant or 

deny a request from the administrator of 

a Federal health care program that an 

exclusion from that program be waived 

with respect to an individual or entity, 

except that no waiver may be granted 

with respect to an exclusion under 

§ 1001.101(b). The request must be in 

writing and from an individual directly 

responsible for administering the 

Federal health care program. 

(b) With respect to exclusions under 

§ 1001.101(a), (c), or (d), a request from 

a Federal health care program for a 

waiver of the exclusion will be 

considered only if the Federal health 

care program administrator determines 

that— 

(1) The individual or entity is the sole 

community physician or the sole source 

of essential specialized services in a 

community; and 

(2) The exclusion would impose a 

hardship on beneficiaries (as defined in 

section 1128A(i)(5) of the Act) of that 

program. 

(c) With respect to exclusions 

imposed under subpart C of this part, a 

request for waiver will only be granted 

if OIG determines that imposition of the 

exclusion would not be in the public 

interest. 

(d) If the basis for the waiver ceases 

to exist, the waiver will be rescinded. 

(e) In the event a waiver is granted, it 

is applicable only to the program(s) for 

which waiver is requested. 

(f) The decision to grant, deny, or 

rescind a request for a waiver is not 

subject to administrative or judicial 

review. 

§ 1001.1901 Scope and effect of exclusion. 

(a) Scope of exclusion. Exclusions of 

individuals and entities under this title 

will be from all Federal health care 

programs, as defined in § 1000.10 of this 

chapter. 

(b) Effect of exclusion on excluded 

individuals and entities. (1) Unless and 

until an individual or entity is 

reinstated into the Federal health care 

programs in accordance with subpart F 

of this part, no payment will be made 

by any Federal health care program for 

any item or service furnished, on or 

after the effective date specified in the 

notice— 

(i) By an excluded individual or 

entity; or 

(ii) At the medical direction or on the 

prescription of a physician or an 

authorized individual who is excluded 

when the person furnishing such item 

or service knew, or had reason to know, 

of the exclusion. 

(2) This section applies regardless of 

whether an individual or entity has 

obtained a Federal health care program 

provider number or equivalent, either as 

an individual or as a member of a group, 

prior to being reinstated. 

(3) An excluded individual or entity 

may not take assignment of an enrollee’s 

claim on or after the effective date of 

exclusion. 

(4) An excluded individual or entity 

that submits, or causes to be submitted, 

claims for items or services furnished 

during the exclusion period is subject to 

civil money penalty liability under 

section 1128A(a)(1)(D) of the Act and 

criminal liability under section 

1128B(a)(3) of the Act and other 

provisions. In addition, submitting 

claims, or causing claims to be 

submitted or payments to be made, for 

items or services furnished, ordered, or 

prescribed, including administrative 

and management services or salary, may 

serve as the basis for denying 

reinstatement to the Federal health care 

programs. 

(c) Exceptions to paragraph (b)(1) of 

this section. (1) If an enrollee of Part B 

of Medicare submits an otherwise 

payable claim for items or services 

furnished by an excluded individual or 

entity, or under the medical direction or 

on the prescription of an excluded 

physician or other authorized 

individual after the effective date of 

exclusion, CMS will pay the first claim 

submitted by the enrollee and 

immediately notify the enrollee of the 

exclusion. 

(2) CMS will not pay an enrollee for 

items or services furnished by an 

excluded individual or entity, or under 

the medical direction or on the 

prescription of an excluded physician or 

other authorized individual more than 

15 days after the date on the notice to 

the enrollee, or after the effective date 

of the exclusion, whichever is later. 

(3) Unless the Secretary determines 

that the health and safety of 


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beneficiaries receiving services under 

any Federal health care program 

warrants the exclusion taking effect 

earlier, payment may be made under 

such program for up to 30 days after the 

effective date of the exclusion for— 

(i) Inpatient institutional services 

furnished to an individual who was 

admitted to an excluded institution 

before the date of the exclusion; 

(ii) Home health services and hospice 

care furnished to an individual under a 

plan of care established before the 

effective date of the exclusion; and 

(iii) Any health care items that are 

ordered by a practitioner, provider, or 

supplier from an excluded manufacturer 

before the effective date of the exclusion 

and delivered within 30 days of the 

effective date of such exclusion. 

(4) CMS will not pay any claims 

submitted by, or for items or services 

ordered or prescribed by, an excluded 

provider for dates of service 15 days or 

more after the notice of the provider’s 

exclusion was mailed to the supplier. 

(5)(i) Notwithstanding the other 

provisions of this section, payment may 

be made under any Federal health care 

program for certain emergency items or 

services furnished by an excluded 

individual or entity, or at the medical 

direction or on the prescription of an 

excluded physician or other authorized 

individual during the period of 

exclusion. To be payable, a claim for 

such emergency items or services must 

be accompanied by a sworn statement of 

the person furnishing the items or 

services specifying the nature of the 

emergency and why the items or 

services could not have been furnished 

by an individual or entity eligible to 

furnish or order such items or services. 

(ii) Notwithstanding paragraph 

(c)(5)(i) of this section, no claim for 

emergency items or services will be 

payable if such items or services were 

provided by an excluded individual 

who, through an employment, 

contractual or any other arrangement, 

routinely provides emergency health 

care items or services. 

Subpart E—Notice and Appeals 

■ 12. Revise and republish § 1001.2001 

to read as follows: 

§ 1001.2001 Notice of intent to exclude. 

(a) Except as provided in paragraph 

(c) of this section, if OIG proposes to 

exclude an individual or entity in 

accordance with subpart B or C of this 

part, it will send written notice of its 

intent, the basis for the proposed 

exclusion, and the potential effect of an 

exclusion. Within 30 days of receipt of 

notice, which will be deemed to be 7 

days after the date on the notice, the 

individual or entity may submit 

documentary evidence and written 

argument concerning whether the 

exclusion is warranted and any related 

issues. 

(b) If OIG intends to exclude an 

individual or entity under the 

provisions of § 1001.701, § 1001.801, or 

§ 1001.1552, in conjunction with the 

submission of documentary evidence 

and written argument, an individual or 

entity may request an opportunity to 

present oral argument to an OIG official. 

(c) Exception. If OIG intends to 

exclude an individual or entity under 

the provisions of § 1001.901, § 1001.951, 

§ 1001.1301, § 1001.1401, § 1001.1601, 

or § 1001.1701, paragraph (a) of this 

section will not apply. 

(d) If an entity has a provider 

agreement under section 1866 of the 

Act, and OIG proposes to terminate that 

agreement in accordance with section 

1866(b)(2)(C) of the Act, the notice 

provided for in paragraph (a) of this 

section will so state. 

■ 13. Revise and republish § 1001.2004 

through 1001.2007 to read as follows: 

Sec. 

* * * * * 

1001.2004 Notice to State agencies. 

1001.2005 Notice to State licensing 

agencies. 

1001.2006 Notice to others regarding 

exclusion. 

1001.2007 Appeal of exclusions. 

§ 1001.2004 Notice to State agencies. 

OIG will promptly notify each 

appropriate State agency administering 

or supervising the administration of 

each State health care program of: 

(a) The facts and circumstances of 

each exclusion; and 

(b) The period for which the State 

agency is being directed to exclude the 

individual or entity. 

§ 1001.2005 Notice to State licensing 

agencies. 

(a) OIG will promptly notify the 

appropriate State(s) or local agencies or 

authorities having responsibility for the 

licensing or certification of an excluded 

individual or entity of the facts and 

circumstances of the exclusion. 

(b) OIG will request that appropriate 

investigations be made and sanctions 

invoked in accordance with applicable 

State law and policy, and will request 

that the State or local agency or 

authority keep the Secretary and OIG 

fully and currently informed with 

respect to any actions taken in response 

to the request. 

§ 1001.2006 Notice to others regarding 

exclusion. 

(a) OIG will give notice of the 

exclusion and the effective date to the 

public and others via online publication 

of the List of Excluded Individuals/ 

Entities (commonly referred to as ‘‘the 

LEIE’’). 

(b) In the case of an exclusion under 

§ 1001.101, if section 304(a)(5) of the 

Controlled Substances Act (21 U.S.C. 

824(a)(5)) applies, OIG will give notice 

to the Attorney General of the United 

States of the facts and circumstances of 

the exclusion and the length of the 

exclusion. 

§ 1001.2007 Appeal of exclusions. 

(a)(1) Except as provided in 

§ 1001.2003, an individual or entity 

excluded under this part may file a 

request for a hearing before an ALJ only 

on the issues of whether: 

(i) The basis for the imposition of the 

exclusion exists; and 

(ii) The length of exclusion is 

unreasonable. 

(2) When OIG imposes an exclusion 

under subpart B of this part for a period 

of 5 years, paragraph (a)(1)(ii) of this 

section will not apply. 

(3) The request for a hearing shall 

contain the information set forth in 

§ 1005.2(d) of this chapter. 

(b) The excluded individual or entity 

has 60 days from the receipt of notice 

of exclusion provided for in § 1001.2002 

to file a request for a hearing. 

(c) The standard of proof at a hearing 

is preponderance of the evidence. 

(d) When the exclusion is based on 

the existence of a criminal conviction or 

a civil judgment imposing liability by a 

Federal, State, or local court, a 

determination by another government 

agency, or any other prior determination 

where the facts were adjudicated and a 

final decision was made, the basis for 

the underlying conviction, civil 

judgment, or determination is not 

reviewable and the individual or entity 

may not collaterally attack it either on 

substantive or procedural grounds in 

this appeal. 

(e) The procedures in part 1005 of this 

chapter will apply to the appeal. 

■ 14. Revise and republish subpart F to 

read as follows: 

Subpart F—Reinstatement Into the 

Programs 

Sec. 

1001.3001 Timing and method of request 

for reinstatement. 

1001.3002 Basis for reinstatement. 

1001.3003 Approval of request for 

reinstatement. 

1001.3004 Denial of request for 

reinstatement. 


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1001.3005 Withdrawal of exclusion for 

reversed or vacated decisions. 

Subpart F—Reinstatement Into the 

Programs 

§ 1001.3001 Timing and method of request 

for reinstatement. 

(a)(1) Except as provided in paragraph 

(a)(2) of this section or in 

§ 1001.501(b)(2), § 1001.501(c), or 

§ 1001.601(b)(2), an excluded individual 

or entity (other than those excluded in 

accordance with §§ 1001.1001 and 

1001.1501) may submit a written 

request for reinstatement to OIG only 

after the date specified in the notice of 

exclusion. Obtaining a Federal health 

care program provider number or 

equivalent does not reinstate eligibility. 

(2) An entity excluded under 

§ 1001.1001 may apply for reinstatement 

prior to the date specified in the notice 

of exclusion by submitting a written 

request for reinstatement that includes 

documentation demonstrating that the 

standards set forth in § 1001.3002(c) 

have been met. 

(b) Upon receipt of a written request, 

OIG will require the requestor to furnish 

specific information and authorization 

to obtain information from private 

health insurers, peer review bodies, 

probation officers, professional 

associates, investigative agencies, and 

such others as may be necessary to 

determine whether reinstatement 

should be granted. 

(c) Failure to furnish the required 

information or authorization will result 

in the continuation of the exclusion. 

(d) If a period of exclusion is reduced 

on appeal (regardless of whether further 

appeal is pending), the individual or 

entity may request reinstatement once 

the reduced exclusion period expires. 

§ 1001.3002 Basis for reinstatement. 

(a) OIG will authorize reinstatement if 

it determines that— 

(1) The period of exclusion has 

expired; 

(2) There are reasonable assurances 

that the types of actions that formed the 

basis for the original exclusion have not 

recurred and will not recur; and 

(3) There is no additional basis under 

sections 1128(a) or (b) or 1128A of the 

Act for continuation of the exclusion. 

(b) In making the reinstatement 

determination described in paragraph 

(a) of this section, OIG will consider— 

(1) Conduct of the individual or entity 

occurring prior to the date of the notice 

of exclusion, if not known to OIG at the 

time of the exclusion; 

(2) Conduct of the individual or entity 

after the date of the notice of exclusion; 

(3) Whether all fines and all debts due 

and owing (including overpayments) to 

any Federal, State, or local government 

that relate to any Federal health care 

program have been paid or satisfactory 

arrangements have been made to fulfill 

obligations; 

(4) Whether CMS has determined that 

the individual or entity complies with, 

or has made satisfactory arrangements to 

fulfill, all the applicable conditions of 

participation or supplier conditions for 

coverage under the statutes and 

regulations; 

(5) Whether the individual or entity 

has, during the period of exclusion, 

submitted claims, or caused claims to be 

submitted or payment to be made by 

any Federal health care program, for 

items or services the excluded party 

furnished, ordered, or prescribed, 

including health care administrative 

services. This section applies regardless 

of whether an individual or entity has 

obtained a Federal health care program 

provider number or equivalent, either as 

an individual or as a member of a group, 

prior to being reinstated; and 

(c) If OIG determines that the criteria 

in paragraphs (a)(2) and (3) of this 

section have been met, an entity 

excluded in accordance with 

§ 1001.1001 will be reinstated upon a 

determination by OIG that the 

individual whose conviction, exclusion, 

or civil money penalty was the basis for 

the entity’s exclusion— 

(1) Has properly reduced the 

individual’s ownership or control 

interest in the entity below 5 percent; 

(2) Is no longer an officer, director, 

agent, or managing employee of the 

entity; or 

(3) Has been reinstated in accordance 

with paragraph (a) of this section or 

§ 1001.3005. 

(d) Reinstatement will not be effective 

until OIG grants the request and 

provides notice under § 1001.3003(a). 

Reinstatement will be effective as 

provided in the notice. 

(e) A determination with respect to 

reinstatement is not appealable or 

reviewable except as provided in 

§ 1001.3004. 

(f) An ALJ may not require 

reinstatement of an individual or entity 

in accordance with this chapter. 

§ 1001.3003 Approval of request for 

reinstatement. 

(a) If OIG grants a request for 

reinstatement, OIG will— 

(1) Give written notice to the 

excluded individual or entity specifying 

the date of reinstatement; 

(2) Notify each appropriate State 

agency administering or supervising the 

administration of each State health care 

program (and, in the case of an 

exclusion effected pursuant to 

§ 1001.101 and to which 21 U.S.C. 

824(a)(5) may apply, the Attorney 

General) of the date of the individual’s 

or entity’s reinstatement; and 

(3) Notify the public and others 

through posting of reinstatement 

information on OIG’s website. 

(b) An action taken by OIG under this 

section will not require a Federal health 

care program to reinstate the individual 

or entity if such program has imposed 

an action under its own authority. 

§ 1001.3004 Denial of request for 

reinstatement. 

(a) If a request for reinstatement is 

denied, OIG will give written notice to 

the requesting individual or entity that 

the request for reinstatement has been 

denied and the basis for the denial. 

Within 30 days of the date on the notice, 

the excluded individual or entity may 

submit a written request to appeal the 

denial of the individual’s or entity’s 

reinstatement. The individual or entity 

will have 30 days from the date of the 

written request to appeal to submit: 

(1) Any written argument or 

additional evidence the individual or 

entity has regarding the basis for the 

denial of reinstatement; or 

(2) A written request to present oral 

argument or any additional evidence to 

an OIG official regarding the basis for 

the denial of reinstatement. 

(b) After evaluating any written 

argument or additional evidence 

submitted by the excluded individual or 

entity or any oral argument and 

additional evidence presented to an OIG 

official, OIG will send written notice 

either confirming the denial and 

indicating that a subsequent request for 

reinstatement will not be considered 

until at least 1 year after the date of 

denial, or approving the request 

consistent with the procedures set forth 

in § 1001.3003(a). 

(c) The decision to deny reinstatement 

will not be subject to administrative or 

judicial review. 

§ 1001.3005 Withdrawal of exclusion for 

reversed or vacated decisions. 

(a) An exclusion will be withdrawn 

and an individual or entity will be 

reinstated into all Federal health care 

programs retroactive to the effective 

date of the exclusion when such 

exclusion is based on— 

(1) A conviction that is reversed or 

vacated on appeal; 

(2) An action by another agency, such 

as a State agency or licensing board, that 

is reversed or vacated on appeal; or 

(3) An OIG exclusion action that is 

reversed or vacated at any stage of an 

individual’s or entity’s administrative 

appeal process. 


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Federal Register / Vol. 89, No. 231 / Monday, December 2, 2024 / Proposed Rules 95167 

(b) If an individual or entity is 

reinstated in accordance with paragraph 

(a) of this section, the Federal health 

care programs will make payment for 

services covered under such programs 

that were furnished or performed during 

the period of exclusion. 

(c) OIG will give notice of a 

reinstatement under this section in 

accordance with § 1001.3003(a). 

(d) An action taken by OIG under this 

section will not require a Federal health 

care program to reinstate the individual 

or entity if such program has imposed 

an exclusion under its own authority. 

(e) If an action which results in the 

retroactive reinstatement of an 

individual or entity is subsequently 

overturned, OIG may reimpose the 

exclusion for the initial period of time, 

less the period of time that was served 

prior to the reinstatement of the 

individual or entity. 

Xavier Becerra, 

Secretary. 

[FR Doc. 2024–26804 Filed 11–29–24; 8:45 am] 

BILLING CODE P 


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