HHS OIG Compliance News

Weak Cloud Security Controls at the Administration for Children and Families Have Put Sensitive Data at Risk

The Department of Health and Human Services (HHS) Administration for Children and Families (ACF) has put the sensitive data of families and children at risk by failing to address security gaps in its cloud environment, according to a recent audit by the HHS Office of Inspector General (HHS-OIG).

HHS-OIG is conducting a series of audits of HHS divisions to determine if they have implemented effective cybersecurity controls for their cloud environments and are compliant with federal security requirements and guidelines. For the audit, HHS-OIG reviewed ACF’s cloud inventory, policies and procedures, and the configuration settings of ACF vulnerability scanners. Penetration tests were also conducted internally and externally on selected cloud information systems and web applications, and phishing tests were conducted on ACF personnel.

While ACF had implemented security controls to protect its cloud information systems and data, HHS-OIG identified gaps in its security controls and vulnerabilities that could be exploited by malicious actors to gain access to systems and the sensitive data of families and children. One of the main problems stemmed from its inventory of cloud computing assets, which was not comprehensive. HHS-OIG said ACF did not accurately identify all of its cloud computing assets because ACF did not establish policies and procedures to inventory and monitor cloud information system components.

If components are missed from the inventory, security controls to prevent unauthorized access may be overlooked, resulting in those components not being adequately secured and websites may be left vulnerable because they are not kept up-to-date, with patches missed and misconfigurations not identified. While HHS-OIG did not identify compromises, the identified vulnerabilities could be exploited resulting in modifications to cloud systems and the execution of system commands to allow sensitive data to be accessed, including the personally identifiable information of families and children. If assets are not being monitored, there is a risk that threat-hunting efforts may not identify compromises, giving adversaries the freedom to attack other components undetected.

HHS-OIG also found that ACF did not perform adequate cloud and web application technical testing techniques against its systems to proactively identify the vulnerabilities HHS-OIG discovered, potentially putting data at a high risk of compromise. While ACF had implemented security controls to protect its cloud information systems, HHS-OIG identified several other security controls that had not been implemented that are stipulated in federal requirements and guidelines.

HHS-OIG made several recommendations on how ACF should improve the security of its cloud information systems. The audit uncovered 19 security controls that need to be improved, cloud security procedures should be updated, tests should be conducted on cloud information systems that emulate the tactics, techniques, and procedures of adversaries, and ACF must update and maintain a complete and accurate inventory of its cloud information systems and components. HHS-OIG also recommended that ACF leverage cloud security assessment tools to identify weak cybersecurity controls and misconfiguration. ACF concurred with all of HHS-OIG’s recommendations and described the actions that will be taken to address the identified issues.

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The Role of Compliance Officers in HHS OIG Regulations

The role of compliance officers in HHS OIG regulations is to ensure policies and procedures are in place to mitigate the risk of a healthcare organization violating a law protecting HHS programs and beneficiaries from fraud or abuse. It is also the role of compliance officers in HHS OIG regulations to monitor compliance with the policies and procedures, and to enforce sanctions on workforce members when they fail to comply with the policies and procedures.

While this explanation of the role of compliance officers in HHS OIG regulations may sound complicated, it is not as difficult as it seems. There are usually only five healthcare regulations enforced by the Department of Health and Human Services’ (HHS) Office of Inspector General (OIG) – these being:

  • The False Claims Act
  • The Anti-Kickback Regulations
  • The Physician Self-Referral Law
  • The HHS OIG Exclusion Statute
  • The Emergency Medical Treatment and Active Labor Act (EMTALA)

The False Claims Act

The False Claims Act protects HHS programs from being fraudulently charged for medical items or services. It is an offense to submit any claim that a healthcare organization knew or should have known was inaccurate; and, depending on the degree of intent, the penalties for violations of the False Claims Act can be civil (up to $27,894 per violation) or criminal (up to $250,000 per violation plus jail time for individuals and up to $500,000 per violation for organizations).

The role of compliance officers in HHS OIG regulations in this case is to ensure processes exist to verify the authenticity of reimbursement claims, that billing irregularities are flagged for investigation, and that security gaps are closed to prevent internal or external bad actors compromising HHS transactions. In the event that claims and billing are outsourced, the role of compliance officers is to conduct due diligence on third party service providers.

The Anti-Kickback Regulations

The anti-kickback regulations exist to prevent inducements for referrals and “paid-for” recommendations for medical items or services. The consequences of “healthcare by inducement” are not only higher reimbursement claims, but also the risk that patients may not receive the most appropriate healthcare. Consequently, penalties for violations of the anti-kickback regulations are imposed on both the payer of an inducement and its recipient.

Because it is usually individuals who succumb to inducements, it is rare that an organization is investigated for an offense against the anti-kickback regulations. However, compliance officers need to be alert to individual members of the workforce accepting non-exempt inducements. This is because any induced reimbursement claims submitted via the organization will have to be repaid to HHS if a kickback allegation against a workforce member is proven.

The Physician Self-Referral Law

The Physician Self-Referral Law (aka The Stark Law ) prohibits healthcare providers from referring patients to “designated health services” when the healthcare provider or an immediate family member has a financial interest in the designated health service. To prevent violations of this law, compliance officers will need to know if any workforce members have business interests (including indirect family business interests) outside the healthcare organization.

However, when the HHS OIG investigates a violation of the Stark Law, the perpetrators are the referring healthcare provider (i.e., a member of the workforce) and the health service that benefitted from the self-referral. The organization for whom the compliance officer works will not be responsible for repaying the proceeds of any unlawful activity. Nevertheless, workforce members violating HHS OIG fraud laws is not something compliance officers want on their CVs!

The HHS OIG Exclusions List

In 1977, the Medicare-Medicaid Anti-Fraud and Abuse Amendments gave HHS OIG the authority to exclude individuals and entities from participating in HHS programs if they were found to have violated a healthcare fraud or abuse law. Depending on the violation, an exclusion can be mandatory (typically five years) or discretionary (no minimum or maximum limits) – during which time excluded individuals and entities cannot bill HHS programs directly or indirectly.

The role of compliance officers in HHS OIG regulations in this case is to ensure that no excluded individual becomes a member of the workforce and that no goods or services are supplied by an excluded entity. Healthcare organizations that employ excluded individuals or who contract goods or services from an excluded entity can be fined up to $20,000 for each good or service unlawfully claimed plus three times the amount claimed from an HHS program.

The Emergency Medical Treatment and Active Labor Act (EMTALA)

EMTALA requires qualifying healthcare organizations that participate in HHS programs to examine an individual requesting emergency care and provide emergency treatment regardless of the individual’s insurance coverage or ability to pay. If the healthcare organization cannot provide appropriate emergency treatment, they must stabilize the individual and arrange a transfer to another healthcare organization that has appropriate treatment capabilities.

Qualifying healthcare organizations that fail to examine an individual or who fail to accept an individual transferred from another healthcare organization can be fined up to $129,233 and added to the HHS OIG Exclusions List. What can complicate the role of compliance officers in HHS OIG regulations such as EMTALA is when exemptions exist depending on location, the nature of the emergency treatment required, and the professional affiliation of healthcare workers.

How to Fulfil the Role of Compliance Officers in HHS OIG Regulations

The way to fulfil the role of compliance officers in HHS OIG regulations is to adapt existing policies and procedures to mitigate the risk of violating a healthcare fraud or abuse law. For example, most healthcare organizations are required to audit their claims and billing processes as a condition of participation in Medicare and Medicaid. Existing procedures could be adapted so that reimbursement claims are verified and irregularities are flagged in the audit process.

Similarly, with regards to conducting due diligence on third party service providers, this is a condition of HIPAA compliance when PHI is shared with a business associate – as are reasonable and appropriate measures to protect the confidentiality, integrity, and availability of electronic PHI whether it is shared with a business associate or processed inhouse. Complying with HIPAA Security Rule automatically ensures that Part 162 transactions are more secure.

With regards to identifying violations of the anti-kickback regulations, induced reimbursement claims should be flagged as part of an effective audit process, while the requirement to check individuals against the HHS OIG Exclusions List is an extra check to add to the existing Level 2 checks many healthcare organizations already have to do before engaging a new member of the workforce in order to comply with state employment laws.

As many of the policies and procedures required to fulfil the role of compliance officers in HHS OIG regulations are adaptions or extensions of existing policies and procedures, monitoring workforce compliance with the policies and procedures should not create an additional compliance burden – nor should enforcing sanctions on workforce members when they fail to comply with the policies and procedures. Nonetheless, compliance officers uncertain about how to fulfil their role with regards to HHS OIG regulations should seek independent compliance advice.

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HHS-OIG: Pennsylvania Improperly Claimed $551 Million in Medicaid Funds

Audits conducted by the Department of Health and Human Services Office of Inspector General (HHS-OIG) of states that claim Medicaid school-based costs with the assistance of contractors have revealed some states have claimed unallowable federal funds due to their contractors improperly conducting random moment time studies (RMTSs). Pennsylvania is the latest state to be audited by HHS-OIG, which found that approximately $590 million was claimed in federal Medicaid payments for school-based services between July 1, 2015, and June 30, 2019, $551.4 million of which was improperly claimed.

For the audit, HHS-OIG reviewed a stratified random sample of 310 random moments, each of which was coded as a health service or administrative activity. HHS-OIG also looked at the methods Pennsylvania used to allocate health services costs to Medicaid.

Based on the sample, HHS-OIG estimated that Pennsylvania claimed $182.5 million in unallowable Federal funds because it did not support that all moments used in RMTSs and coded as Medicaid-eligible were actually for Medicaid-eligible health services or Medicaid administrative activities. Pennsylvania also improperly claimed $368.9 million when it used unsupported ratios to allocate costs to Medicaid. The RMTSs conducted by contractors for Pennsylvania did not cover all days worked by staff members because they were not conducted for the first month of the school year.

HHS-OIG said that the improper claims were due to complex cost allocation methods that were developed by the state and its contractor which were difficult or impractical to support with documentation, or that CMS guidance was not followed. HHS-OIG recommended that the state refund the $182.5 million as these funds were used for unsupported Medicaid-eligible health services and Medicaid administrative activities. HHS-OIG also recommended that the state either support or refund the $368.9 million, as these funds were claimed using an unsupported cost allocation method. HHS-OIG also provided guidance to the state to help with the preparation of accurate and supportable claims.

Pennsylvania agreed with the guidance but disagreed with the monetary and procedural recommendations, specifically disagreeing with the HHS-OIG finding that the moments were not supported as Medicaid-eligible. Pennsylvania claimed that it was not required to provide documentation other than what RMTS participants provided and that it was not responsible for ensuring that all service providers were appropriately licensed. Pennsylvania also claimed that the ratios it used for allocating costs to Medicaid are accurate.

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What is an HHS OIG Compliance Program?

An HHS OIG compliance program consists of best practices that should be included in an integrated healthcare compliance program to avoid violating fraud and abuse laws enforced by the Department of Health and Human Service (HHS) Office of Inspector General (OIG). Adding HHS OIG compliance best practices to an integrated program not only helps avoid penalties for HHS OIG compliance failures, but may also improve compliance with the integrated program.

Integrated healthcare compliance programs are programs that combine some or all applicable healthcare rules, regulations, and standards into a single compliance program. For example, a healthcare facility might combine CMS’ Emergency Preparedness Rule (81 FR 63860) with OSHA’s Emergency Planning Regulation (§1910.38) and HIPAA’s Contingency Plan Standard (§164.308(a)(7)) to comply with all three requirements via a single activity.

Although integrated healthcare compliance programs can be complicated to develop and keep up to date, they have multiple benefits. In addition to reducing the compliance burden (for example, by reducing the three compliance requirements above to just one), it is also simpler to train workforce members on one integrated compliance program – which has the secondary benefit of simultaneously complying with the CMS, OSHA, and HIPAA training requirements.

What Does an HHS OIG Compliance Program Consist Of?

There is no one-size-fits-all HHS OIG compliance program because some healthcare facilities might not conduct all the activities covered by fraud and abuse laws, while other healthcare facilities might outsource some activities to a third party (i.e., claims and billing) – in which case the third party is liable for compliance violations. However, there are five main fraud and abuse laws most healthcare organizations have to consider in an HHS OIG compliance program:

The False Claims Act

The False Claims Act protects the government from being overcharged for goods or services. In the context of an HHS OIG compliance program, it is a violation of the False Claims Act to submit claims for payment to Medicare, Medicaid, or any other HHS program that a healthcare facility knew – or should have known – were fraudulent. For this reason, it is important to monitor claims and billing activities – even when these activities are outsourced to a third party.

The penalties for violations of the False Claims Act vary depending on whether HHS OIG considers violations to be civil or criminal offenses. HHS OIG has the authority to impose fines of up to $27,894 per civil violation (March 2024) and up to three times the amount falsely claimed from HHS programs. Criminal violations are referred to the Department of Justice, who can pursue fines of up to $500,000 per violation and jail terms of up to five years per violation.

The Anti-Kickback Regulations

In addition to an HHS OIG compliance program consisting of measures to prevent fraudulent billing events, a program should also include measures to prohibit the receipt of – or payment for – kickbacks to induce referrals for items and services reimbursable by an HHS program. HHS OIG considers kickbacks to not only be monetary, but also “in-kind remunerations” such as cost-sharing waivers, shares, subsidies, free items, space, equipment, and services.

The important thing for healthcare facilities to be aware of with regards to the anti-kickback regulations is that both parties involved in a kickback transaction can be found guilty of a violation (i.e., the payer and the recipient of the kickback). In addition, as with violations of the False Claims Act, the penalties for violating the anti-kickback regulations can be criminal and civil – although in this case, the maximum criminal fine is $100,000 per violation.

The Stark Law

The Stark Law, also known as the Physician Self-Referral Law, prohibits physicians from referring patients to receive “designated health services” when the physician or an immediate family member has a financial interest in the designated health service. It is important to be aware the term designated health services not only relates to the provision of treatment, but can also refer to the provision of therapy, medical items, and outpatient prescription drugs.

Both the physician that violated the Law and the health service that benefitted from the violation are considered liable for the violation by HHS OIG. Self-referring physicians can be fined up to $15,000 per violation (or up to $100,000 if the violation is considered an attempt to circumnavigate a criminal anti-kickback regulation), while the health service will have to refund up to three times the amount of any payments received from an HHS healthcare program.

The Exclusion Statute

The Exclusion Statute requires HHS OIG to exclude individuals and organizations from participating in HHS programs if they are found guilty of Medicare or Medicaid fraud, patient abuse or neglect, intentionally violating the anti-kickback regulations, or unlawfully manufacturing, distributing, prescribing, or dispensing controlled substances. HHS OIG also has the discretionary authority to exclude individuals and organizations for misdemeanors.

Being excluded from participating in HHS programs not only means they cannot bill HHS directly. It also means they cannot bill HHS indirectly by providing goods or services via a third party healthcare facility. To make it harder to circumnavigate the Statute, third party healthcare facilities are prohibited from – and can be fined for – contracting goods or services from an individual or organization that appears on the HHS OIG Exclusions List.

The Emergency Medical Treatment and Active Labor Act (EMTALA)

EMTALA requires healthcare facilities that participate in HHS programs to conduct a medical screening examination on any individual requesting emergency care. If the examination identifies an emergency medical condition, the facility must stabilize the individual and provide treatment until the emergency medical condition is resolved. If the facility does not have the capability to treat the individual, it must transfer the individual to a facility that can provide treatment.

Healthcare facilities that fail to conduct a medical screening examination, or who fail to accept an individual transferred from another healthcare facility for emergency treatment, can be fined up to $129,233 and added to the HHS OIG Exclusions List. Individuals to whom a screening or treatment is denied can also take civil action in some states, whereas in other states conditions may apply with regards to the provision of emergency labor and psychiatric treatments.

What are HHS OIG Compliance Best Practices?

Similar to an HHS OIG compliance program, there are no one-size-fits-all HHS OIG compliance  best practices. In order to determine what HHS OIG compliance best practices should be included in a compliance program – whether an integrated compliance program or not – healthcare facilities should assess their exposure to violations of all applicable fraud and abuse laws, and develop policies and procedures to mitigate the risk of a violation occurring.

Recommendations for assessing the risk of an HHS OIG violation include auditing HHS claims and billing processes – even when outsourced to a third party – in order to identify potential vulnerabilities, irregularities, or opportunities for fraud. There is HHS OIG-issued software that can help with the audit process, but smaller healthcare facilities might find it quicker to conduct an audit manually, rather than work out how to use the software on smaller data sets.

One of the most important HHS OIG compliance best practices that all healthcare providers should integrate into a compliance plan is an HHS OIG Background Check. Policies should be put in place to check the HHS OIG Exclusions List before any new hire or supplier is engaged, while procedures should exist to periodically recheck the Exclusions List due to the length of time it can take for an individual or organization under investigation to be added to the Exclusions List.

With regards to EMTALA, it is a best practice for qualifying healthcare facilities to train members of the workforce on what medical conditions qualify for mandatory emergency screening and/or treatment, and when exceptions apply – either due to location, medical discipline, or the professional affiliation of healthcare workers. EMTALA can have several gray areas, so it may be important HHS OIG compliance best practices are enforced when EMTALA is applicable.

The Benefits of HHS OIG Compliance Risk Management

The benefits of HHS OIG compliance risk management are that healthcare facilities mitigate the risk of an HHS OIG violation – reducing the chance of a fine, criminal conviction, or private action by an individual that has been denied emergency care. Even when these consequences of an HHS OIG violation do not happen, healthcare facilities may be required to comply with a Corporate Integrity Agreement – which can be costly to comply with as well as being disruptive.

However, HHS OIG compliance risk management does not have to be particularly complicated. It has already been demonstrated how combining multiple compliance requirements into one integrated healthcare compliance program can reduce the compliance burden and help healthcare facilities save time and money – and adding HHS OIG compliance best practices to an existing integrated healthcare compliance program should be equally as beneficial.

For example, most Medicare Part D and Medicare Advantage providers already have to conduct claims and billing audits as a condition of participation in Medicare. Similarly, most states have laws that require healthcare facilities to conduct Level 2 background checks on new employees (i.e., professional license verification, sex offenders list, etc.) – so adding one more background check (the HHS OIG Exclusions List) is barely going to increase the compliance burden.

Healthcare facilities that are unsure about which fraud and abuse laws apply to their activities (including outsourced activities) and how to comply with them – or when exceptions apply to certain activities under the Safe Harbor regulations – should contact HHS OIG for advice. Alternatively – or to find out more about developing an integrated healthcare compliance program – healthcare facilities can seek independent advice from a compliance professional.

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HHS-OIG Agrees $49,000 Settlement with North Carolina Hospital to Resolve Alleged EMTALA Violation

The Department of Health and Human Services Office of Inspector General (HHS-OIG) has agreed to a settlement with UNC Health Chatham Hospital that resolves an alleged violation of the Emergency Medical Treatment and Labor Act (EMTALA).

EMTALA was enacted in 1986 to ensure public access to emergency services regardless of an individual’s ability to pay, and EMTALA applies to all hospitals that offer emergency services through a dedicated department. There are also specific obligations for hospitals that participate in Medicare that offer emergency services, including the requirement to provide a medical screening examination (MSE) when a request is made for examination or treatment for an emergency medical condition.

On January 16, 2022, a 62-year-old patient presented to Chatham’s Emergency Department (ED) via emergency medical services (EMS). Before arriving at the hospital, EMS called in a report about the patient’s condition to the ED and was told that a cardiologist was not available, and the ED could not manage the patient.

EMS proceeded to take the patient to Chatham’s ED and was met in the ambulance bay by a nursing employee, who spoke to the EMS staff and the ambulance left without the patient receiving an MSE. HHS-OIG determined that Chatham violated EMTALA by failing to provide an appropriate EMS, within the capabilities of its staff and facilities. Under the terms of the settlement, Chatham agreed to pay a $49,000 penalty.

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How to Write an HHS OIG Complaint

The best way to write an HHS OIG complaint to increase the chances of the complaint being investigated is to prepare a narrative explaining the nature, scope, and time frame of the activity being complained about, and how you came to learn about the activity. When you submit the complaint, the chances of the complaint being investigated are further improved if you can provide supporting evidence and the contact information of a third party who can corroborate the narrative.

Each year, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) receives thousands of complaints, tips, and reports of alleged fraud, waste, and abuse in Federal healthcare programs. HHS OIG does not have the resources to investigate every one, so it prioritizes complaints according to the type of activity and the evidence submitted to support the complaint.

In addition, HHS OIG only has the authority to investigate complaints relating to certain activities, and many complaints can be rejected after being reviewed for relevance. The activities HHS OIG has the authority to investigate include:

  • Whistleblower complaints about fraud, waste, and abuse in HHS programs.
  • False or fraudulent (overpriced) claims submitted to Medicare or Medicaid.
  • Kickbacks or inducements for referrals by Medicare or Medicaid providers.
  • Medical identity theft involving Medicare and/or Medicaid beneficiaries.
  • The failure of a hospital to evaluate and stabilize an emergency patient.
  • Patient abuse or neglect in nursing homes and long-term care facilities.
  • Human trafficking by HHS employees, grantees, and contractors.
  • Crimes, gross misconduct, or conflicts of interest involving HHS employees, recipients of HHS grants, or HHS contractors.

Complaints relating to Medicare policies, coverage, claims, and payment decisions, Social Security fraud, identity theft unrelated to HHS programs, and discrimination within HHS departments are not investigated by HHS OIG. Complaints of this nature will be rejected on review without the complainant being notified of the decision. Therefore it is important that when you write an HHS OIG complaint, the nature of the activity is one that HHS OIG has the authority to investigate.

How to Submit an HHS OIG Complaint

There are various ways to submit an HHS OIG complaint. The most effective is the online OIG HHS Hotline because this method of submitting an HHS OIG complaint allows complainants to upload documents in support of the complaint electronically. Alternative methods such as mail and fax are not so easy to use; and, if you use mail, you are advised not to send original documents, digital media, or physical devices because these will not be returned even if the complaint is rejected.

When you submit an HHS OIG complaint online, you also have the option of requesting confidentiality inasmuch as your identity is only known to HHS OIG investigators (unless a disclosure is required by law). You may also submit complaints anonymously, but this course of action precludes HHS OIG from investigating a complaint as a whistleblower retaliation complaint, and may hinder the initial review and/or the subsequent investigation into your compliant.

If your complaint is investigated and upheld, there are several potential outcomes depending on the nature of the activity. Most upheld fraud, waste, and abuse complaints and violations of the HHS OIG anti-kickback regulations are resolved by a civil monetary penalty and/or a Corporate Integrity Agreement. However, more serious complaints, criminal complaints, and the failure of a hospital to evaluate and stabilize an emergency patient are likely to result in exclusion from HHS programs.

Individuals concerned about the potential consequences of submitting an HHS OIG complaint – or who need help to write an HHS OIG complaint – are advised to speak with an HHS OIG advisor on 1-800-477-8477 (1-800-HHS-TIPS). Alternatively, if you would prefer independent advice before speaking with an HHS OIG advisor, it is recommended you speak with a legal professional who has experience in healthcare regulatory compliance.

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How Much are HHS OIG Penalties?

HHS OIG penalties vary depending on the nature of the offense, the scale of the offense, and the cooperation of the violating party during the investigation of the offense. Other factors that can influence HHS OIG penalties include the regulatory limits applied to each type of violation and the violating party’s previous history of compliance with healthcare regulations.

Among its many roles, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) is responsible for investigating allegations of fraud, waste, and abuse in Federal healthcare programs. When HHS OIG identifies fraud, waste, or abuse, it has the authority to recover funds, exclude individuals and organizations from Federal healthcare programs, and pursue civil monetary penalties or criminal penalties depending on the nature of the offense.

The amount of HHS OIG penalties is calculated on a case-by-case basis, and quite often cases can be settled for a mutually agreed amount to avoid potential litigation. The amount of HHS OIG penalties can also be reduced if the violating individual or organization agrees to comply with a Corporate Integrity Agreement. In these cases, compliance with a Corporate Integrity Agreement can save an individual or organization from being added to the HHS OIG Exclusions List.

How HHS OIG Enforcement Actions Unfold

The department of HHS OIG responsible for enforcement actions is the Office of Investigations. The Office of Investigations can be alerted to possible fraud, waste, or abuse by other departments of HHS OIG – for example, the Office of Audit Services or the Office of Evaluation and Inspection – by other operating divisions of HHS – for example, HHS’ Office for Civil Rights – or by members of the public and healthcare employees via the HHS OIG Complaints Hotline.

The Office of Investigations prioritizes HHS OIG enforcement actions according to the nature and scale of the alleged offense and the evidence to support the allegation. The Office then issues subpoenas to acquire documents from the accused “target”, conducts interviews with witnesses and/or employees, and conducts inspections of the target’s workplace. The additional evidence is then reviewed to determine what laws and regulations have been violated.

Depending on the outcome of the reviews, HHS OIG enforcement actions can be settled by mutual consent, by an administrative hearing, or by a court if the offense is criminal in nature. The location can also have an influence on the outcome of HHS OIG enforcement actions if a state law has harsher penalties for a violation than the equivalent Federal law. For example, under California’s WIC Code §15630(h), the failure to report elder abuse carries a jail term of up to one year.

How Regulatory Limits Affect HHS OIG Penalties

State laws aside, the amount of HHS OIG penalties is governed by the regulatory limits of whatever federal law the target has violated. For example, the current (February 2024) regulatory limits for civil violations of the False Claims Act are a minimum civil monetary penalty of $13,946 and a maximum civil monetary penalty of $27,894 per violation. The HHS OIG can also add fines of up to three times the amount falsely claimed from an HHS program.

If the violation of the False Claims Act is criminal, HHS OIG penalties increase to a maximum fine of $500,000 for organizations and $250,000 for individuals. For individuals, criminal convictions under the False Claims Act can also carry a jail term of up to five years. These HHS OIG penalties apply to each individual count filed, and are in addition to penalties prosecutors may seek for conspiracy to defraud the United States, mail fraud, wire fraud, or other federal crimes.

Other laws have different regulatory limits. For example, hospitals that violate the Emergency Medical Treatment and Active Labor Act (EMTALA) are subject to civil penalties of between $64,618 and $129,233 per violation, violations of the HHS OIG Anti-Kickback Regulations can attract fines of up to $27,894 (plus jail terms), while the penalties for violations of the OIG Stark Law are up to $15,000 per item or service charged to an HHS program plus up to $100,000 per arrangement considered a deliberate attempt to circumnavigate the Anti-Kickback Regulations.

Why HHS OIG Sanctions are Sometimes Combined

It is not unusual to read HHS press releases announcing multi-million dollar settlements that appear to be more than the maximum civil monetary penalty multiplied by the number of violations – even allowing for the recovery of three times the funds falsely claimed from an HHS program. This is because HHS OIG sanctions can be combined if (for example) a physician has violated the OIG Stark Law by accepting a non-excluded kickback which then results in a false claim to an HHS program.

By combining HHS OIG sanctions, the Office of Investigations can negotiate one financial settlement with an individual or organization rather than multiple settlements, and impose a more relevant Corporate Integrity Agreement (if applicable). Alternatively, the department can exclude an individual or organization from HHS programs for a longer period of time than if each set of HHS OIG Sanctions had been dealt with independently of each other.

The takeaway from this is that there is no specific answer to the question how much are HHS OIG penalties. In the worst possible scenario, violators of Federal healthcare laws can be fined millions of dollars and/or jailed, and be excluded from HHS programs. Due to the risk of effectively losing the business, individuals and organizations concerned that they may not be complying with all applicable healthcare regulations should seek compliance advice from a legal professional.

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