SECTION 371.1705. Mandatory Exclusion

(a) The OIG must exclude from participation in Titles V, XIX, XX, and CHIP programs, as applicable, any person if it determines that the person:

(1) has been excluded from participation in Medicare or any other federal health care programs;

(2) is a provider whose health care license, certification, or other qualifying requirement to perform certain types of service is revoked, suspended, voluntarily surrendered, or otherwise terminated such that the provider is unable to legally perform their profession due to loss of their license, certification, or other qualifying requirement;

(3) 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;

(4) has been convicted, under federal or state law, of a felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct:

(A) 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

(B) with respect to any act or omission in a health care program (other than Medicare and a State health care program) operated by, or financed in whole or in part, by any federal, state or local government agency;

(5) 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 a person that:

(A) is, or has ever been, a health care practitioner, person, or supplier;

(B) holds, or has held, a direct or indirect ownership or control interest (as defined in §1124(a)(3) of the Social Security Act) in an entity that is a health care person or supplier, or is, or has ever been, an officer, director, agent or managing employee (as defined in §1126(b) of the Social Security Act) of such an entity; or

(C) is or has ever been, employed in any capacity in the health care industry;

(6) is an MCO or other entity furnishing services under a waiver approved under §1915(b)(1) of the Social Security Act that has an affiliate relationship with a person, and that person:

(A) has been convicted:

(i) of an offense that is a ground for mandatory exclusion under this section;

(ii) of an offense under federal or state law consisting of a misdemeanor relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct:

(I) in connection with the delivery of a health care item or service;

(II) with respect to any act or omission in a health care program (other than those specifically described in paragraph (1) of this subsection) operated by or financed in whole or in part by any federal, state, or local government agency; or

(III) relating to 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 by or financed in whole or in part by any federal, state, or local government agency;

(iii) of an offense under federal or state law in connection with the interference with or obstruction of any investigation related to:

(I) an offense that is a ground for mandatory exclusion under this section; or

(II) the use of funds received, directly or indirectly, from any federal health care program;

(iv) of an offense under federal or state law for acts that took place after January 1, 2010, in connection with the interference with or obstruction of any audit related to:

(I) an offense that is a ground for mandatory exclusion under this section; or

(II) the use of funds received, directly or indirectly, from any federal health care program;

(v) has had civil money penalties or assessments imposed under §1128A of the Social Security Act (federal false claims); or

(vi) has been excluded from participation in Medicare or any of the state health care programs or CHIP; and

(B) that person:

(i) has an ownership interest in the entity;

(ii) 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, in which whole or part interest is equal to or exceeds five percent of the total property and assets of the entity;

(iii) is an officer or director of the entity, if the entity is organized as a corporation;

(iv) is a partner in the entity, if the entity is organized as a partnership;

(v) is an agent of the entity;

(vi) is a managing employee, that is, a an person (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; or

(vii) was formerly described in clauses (i) - (vi) of this subparagraph, but is no longer so described because of a transfer of ownership or control interest to an immediate family member or a member of the person's household in anticipation of or following a conviction, assessment of a civil monetary penalty, or imposition of an exclusion;

(7) is an individual and has an ownership or control interest or a substantial contractual relationship in or is an officer or managing employee of a sanctioned entity, and who knew or should have known of an action that constituted the basis for a conviction or mandatory exclusion of the sanctioned entity; or

(8) is convicted, pleads guilty or pleads nolo contendere to an offense arising from a fraudulent act under the Medicaid program, which results in injury to a person age 65 or older, a person with a disability, or a person younger than 18 years of age.

(b) The OIG may exclude a person without sending prior notice of intent to exclude in the following circumstances:

(1) The OIG determines that the person is subject to mandatory exclusion under subsection (a) of this section and the person may be placing the health and/or safety of persons receiving services under an HHS program at risk; or

(2) a person who is subject to mandatory exclusion under subsection (a) of this section fails:

(A) to grant immediate access to the OIG or to a requesting agency upon reasonable request;

(B) to allow the OIG or a requesting agency to conduct any duties that are necessary to the performance of their official functions; or

(C) to provide to the OIG or a requesting agency as requested copies or originals of any records, documents, or other items, as determined necessary by the OIG or the requesting agency.

(c) When the OIG issues a final notice of exclusion, the notice includes the requirements and procedures for reinstatement.

(d) Due process.

(1) After receiving a notice of intent to exclude, a person has a right to the informal resolution process in accordance with §371.1613 of this subchapter (relating to Informal Resolution Process) unless the exclusion is required under subsection (a)(1) of this section or under 42 C.F.R. §1001.101.

(2) A person may request an administrative appeal hearing in accordance with §371.1615 of this subchapter (relating to Appeals) after receipt of a final notice of exclusion unless the exclusion is required under subsection (a)(1) of this section or under 42 C.F.R. §1001.101. The OIG must receive the written request for an appeal no later than 15 days after the date the person receives final notice.

(3) When the exclusion is based on the existence of a criminal conviction; a civil fraud finding; a civil judgment imposing liability by federal, state, or local court; a determination by another government agency or board; any other prior determination; or provisions within a settlement agreement, the individual or entity subject to exclusion may not collaterally attack the underlying determination, either on substantive or procedural grounds, in an administrative appeal.

(e) Scope and effect of exclusion.

(1) An exclusion becomes effective on the following:

(A) the date the person's health care services or items became ineligible for federal financial participation as described in subsection (a)(1) of this section;

(B) the effective date the person lost its license, certification, or other qualifying requirement as described in subsection (a)(2) of this section;

(C) the date of the criminal judgment of conviction or date of order the person received for deferred adjudication or pre-trial diversion as described in subsection (a)(3) - (5) and (8) of this section;

(D) the date of the criminal judgment of conviction, or effective date of the assessment of civil monetary penalties or exclusion as described in subsection (a)(6) of this section;

(E) the effective date of final determination of liability pursuant to Texas Human Resources Code §32.039(c) as described in subsection (a)(8) of this section;

(F) the date of the final notice of exclusion if the exclusion is based on a health or safety risk as described in subsection (b)(1) of this section;

(G) the date of the original request for records if the exclusion is based on failure to provide access as described in subsection (b)(2) of this section; or

(H) if the exclusion is upheld at an administrative hearing, the effective date is made retroactive to the applicable effective date described in this section.

(2) An exclusion remains in effect for the period indicated in the final notice of exclusion. The person is not eligible to apply for reinstatement or reenrollment as a provider until the exclusion period has elapsed. The minimum length of exclusion is determined as follows:

(A) The minimum length of exclusion is the federally mandated exclusion period plus one additional year if the exclusion is based upon a conviction as described in subsection (a)(3), (4), or (5) of this section.

(B) An MCO is excluded for the same period as the related person was excluded, as described in subsection (a)(6) of this section.

(C) An individual is excluded for the same period as the sanctioned entity in which the individual held an ownership, control interest, or substantial contractual relationship as described in subsection (a)(7) of this section.

(D) The exclusion is effective for ten years if the exclusion is based upon an assessment of civil monetary penalties pursuant to Texas Human Resources Code §32.039(c) arising out of injury to a person who is 65 years of age or older, a person with a disability, or a person under 18 years of age as described in subsection (a)(8) of this section.

(E) The exclusion is effective for three years if the exclusion is based upon an assessment of civil monetary penalties pursuant to Texas Human Resources Code §32.039(c).

(F) The exclusion is permanent if the exclusion is based upon a criminal conviction for committing a fraudulent act under the Medicaid program that results in injury to a person who is 65 years of age or older, a person with a disability, or a person under 18 years of age as described in subsection (a)(8) of this section.

(G) Unless otherwise provided, the length of exclusion is determined by the OIG in its discretion. The OIG considers the factors enumerated in §371.1305(c) of this chapter (relating to Preliminary Investigation and Report) in determining the length of exclusion.

(3) Unless a person is reinstated and re-enrolled as a provider in the Texas Medicaid program, no payment is made by the Medicaid program for any item or service furnished or requested by an excluded person on or after the effective date of exclusion.

(4) An excluded person is prohibited from:

(A) personally or through a clinic, group, corporation, or other association or entity, billing or otherwise requesting or receiving payment for any Title V, XVIII, XIX, XX, or CHIP program for items or services provided on or after the effective date of the exclusion;

(B) providing any service under the Medicaid program, whether or not the excluded person directly requests Medicaid program payment for such services;

(C) assessing care or ordering or prescribing services, directly or indirectly, to Title V, XIX, XX, or CHIP recipients after the effective date of the person's exclusion; and

(D) accepting employment by any person whose revenue stream includes funds from a Title V, XVIII, XIX, XX, or CHIP program.

(5) If, after the effective date of an exclusion, an excluded person submits or causes to be submitted claims for services or items furnished within the period of exclusion, the person may be subject to civil monetary penalty liability under §1128A(a)(1)(D), and criminal liability under §1128B(a)(3) of the Social Security Act in addition to sanctions or penalties by the OIG.

(6) In accordance with federal and state requirements, when the OIG excludes a person, the OIG may notify each state agency administering or supervising the applicable state health care program, as well as the appropriate state or local authority or agency responsible for licensing or certifying the person excluded. If issued, notification includes:

(A) the facts, circumstances, and period of exclusion;

(B) a request that appropriate investigations be made and any necessary sanctions or disciplinary actions be imposed in accordance with applicable law and policy; and

(C) a request that the state or local authority or agency fully and timely inform the OIG with respect to any actions taken in response to the OIG's request.

(7) The OIG notifies the public of all persons excluded.

(8) A person who has been excluded from the Texas Medicaid or CHIP program is excluded from the Medicaid and/or CHIP program in every other state and from the Medicare program pursuant to each program's applicable state or federal authority. When exclusion from the Texas Medicaid and/or CHIP program is based on the person's exclusion from Medicare, or from another state's Medicaid or CHIP program, the prohibitions enumerated in paragraph (4) of this subsection may apply.

Source Note: The provisions of this §371.1705 adopted to be effective October 14, 2012, 37 TexReg 7989; amended to be effective April 15, 2014, 39 TexReg 2833; amended to be effective May 1, 2016, 41 TexReg 2941