SECTION 357.589. Scope of Sanction

(a) A sanction may be applied to all affiliates of a provider after considering all relevant facts and circumstances. The violation, failure, or inadequacy of performance may be attributed to a provider's affiliate if the affiliate knew or approved of the misconduct within the course of his official duty.

(b) When a person is excluded under the provisions of §79.2105 of this title (relating to Grounds for Fraud Referral and Administrative Sanction) he must neither personally nor through a clinic, group, corporation, or other association bill or receive payment for any Title XIX or XX services or supplies provided on or after the date of the exclusion. Additionally, he must not order or prescribe services to Title XIX or XX recipients after that date. A clinic, group, corporation, or other association that is a provider is not permitted to submit claims for any services or supplies provided by a person within the organization who is excluded from participation unless the services or supplies are provided before the exclusion effective date. A provider is not permitted to include in a cost report or any documents used to determine an individual payment rate, a statewide payment rate, or a fee, the salary, fringe, overhead, or any other costs associated with any employee, owner, officer, director, board member, independent contractor, or agent associated with the provider who was previously excluded from the Medicare or Medicaid Program for program abuse. Under certain circumstances, depending upon the reason for exclusion, the department does not permit the excluded physician or individual to act as a stockholder owning 5.0% or more ownership interest, officer, director, board member, independent contractor, manager, consultant, employee providing or billing for services provided to Title XIX or XX recipients, or agent associated with a Title XIX or XX provider. Additionally, the department may exclude a Title XIX or XX provider who knowingly and willingly uses a person or entity as an employee, independent contractor, or agent who was previously excluded under these provisions.

(c) If any of the sections in this subchapter and in §§79.2301-79.2305 of this title (relating to Recovery of Benefits Wrongfully Received); state or federal law; provider agreements, provider manuals, or Medicaid bulletins are violated, the department may exclude the organization and any person in the organization who is responsible for the violation.

(d) To be readmitted, the provider must reapply for participation after exclusion. The department or its agent considers the merits of the case.

(e) Except as specified in subsection (f) of this section, no Title XIX or XX payments are made for services or supplies provided by participating provider that have been prescribed or ordered by an excluded practitioner on or after the effective date specified by the department. This date is subsequent to the actual effective date of the provider exclusion unless the provider's license to practice has been cancelled, in which case nothing can be ordered or prescribed after license cancellation. The following criteria are used to determine when payments begin to be denied.

(1) If the department excludes under its own authority and the excluded provider fails to appeal, payments are denied 45 days from the date the excluded provider's right to appeal expires.

(2) If the department excludes under its own authority and the excluded provider appeals within the time allowed, payments are denied 45 days from the date of the administrative law judge's final decision.

(3) If the department excludes under a mandate by the Department of Health and Human Services, and Federal Financial Participation (FFP) is denied, payments are denied 45 days from the date of exclusion. When FFP is denied, the state statute postponing the exclusion until after disposition of the appeal does not apply.

(f) An order or prescription written before the exclusion of a physician is valid for the duration of the order except as specified in subsection (h) of this section.

(g) If, after the effective date of an exclusion, the excluded person submits claims for which payment is prohibited, he may be subject to a civil monetary penalty under the authority contained in 42 United States Code 1329a-7a or § 79.2402 of this title (relating to Liability).

(h) Unless the department determines that the health and safety of patients receiving services warrants an earlier exclusion effective date, under the following circumstances an exclusion does not apply to payments made under Title XIX or XX until 30 days after its effective date:

(1) inpatient institutional services furnished to an individual who was admitted to the institution before the effective date of the exclusion; and

(2) home health services and hospice care furnished to an individual under a plan established before the effective date of the exclusion.

(i) In the event that an individual is excluded under §79.2105(4) of this title (relating to Grounds for Fraud Referral and Administrative Sanction), the period of the exclusion is equal to the sum of:

(1) the length of the period in which the individual failed to grant the immediate access; and

(2) an additional period, not to exceed 90 days, set by the department.

Source Note: The provisions of this §357.589 adopted to be effective July 1, 1986, 11 TexReg 2825; amended to be effective December 15, 1988, 13 TexReg 5828; transferred effective September 1, 2004, as published in the Texas Register September 17, 2004, 29 TexReg 9013