On February 23, 2022, Gregory E. Demske, Chief Counsel to the Inspector General for HHS’s Office of Inspector General (“OIG”), provided opening remarks and answered questions during the Federal Bar Association’s annual Qui Tam Conference.  Mr. Demske spoke about OIG’s role in False Claims Act (“FCA”) enforcement and resolutions, and discussed enforcement priorities for the upcoming year.

OIG’s Role in FCA Enforcement and Resolutions

Throughout his remarks, Mr. Demske provided insight into the role OIG plays in deciding which FCA matters to pursue and the enforcement tools that OIG utilizes in FCA matters, such as exclusion.

On the former, Mr. Demske provided insight into OIG’s role in the government’s decision whether to move to dismiss a qui tam action under 31 U.S.C. § 3730(c)(2)(A), explaining that OIG reviews cases and makes a recommendation to DOJ regarding whether the government should decline to intervene and, in declined cases, seek dismissal.  Where the qui tam complaint presents a novel issue, the decision to decline to intervene or seek dismissal is a collective decision, and OIG will meet with other HHS officials to understand the nuances of the complaint before making a recommendation to DOJ.  Mr. Demske stated that the government does not have any interest in pursuing meritless cases, but noted that the FCA is structured in a manner to allow declined cases to move forward without the government’s involvement.

On the latter, Mr. Demske highlighted OIG’s use of its exclusion authority.  Approximately 1,000 to 4,000 people are excluded by OIG each year.  Many of these exclusions are imposed as the result of convictions or lost licensure.  Mr. Demske pointed to OIG’s formal protocol for prioritizing cases for exclusion and the Office’s Fraud Risk Indicator, which provides guidance regarding how OIG assesses the future risk posed by an entity or individual in order to resolve exclusion cases.  Using the risk spectrum, each party in an FCA case is assessed and placed into one of five risk categories based on the potential future risk the party poses to Federal health care programs.  At the lowest end of the spectrum, self-disclosure cases are resolved quickly, and OIG will provide a release from potential exclusion without any further requirements.  At the highest end of the spectrum, where OIG determines that the party presents a high risk of fraud, OIG will pursue its administrative remedies and exclude the party from participation in Federal health care programs.  In most FCA matters today, Mr. Demske explained that OIG will elect not to pursue its own administrative remedies; rather, OIG will provide a release from potential exclusion and participate in the monetary settlement process with DOJ.

Mr. Demske also spoke about OIG’s practice with respect to corporate integrity agreements (“CIAs”).  Historically, OIG sought a CIA for all FCA cases in which it decided not to impose exclusion. Mr. Demske explained that this approach was appropriate at the time.  But, as more guidance has been issued by OIG, and more entities engage in voluntary compliance efforts, it is not always the best use of resources to negotiate and monitor a CIA when the financial loss is low and there is not a significant risk to patients.  Therefore, as explained in published guidance, OIG focuses on entering into CIAs where the financial loss is high, there is a high risk to patients’ health and safety, and there is recidivism by the parties involved.  However, Mr. Demske emphasized that, where the decision is made to require a CIA, OIG is focused on ensuring that the agreements contain robust and specific compliance obligations, instead of “cookie cutter” provisions.

Enforcement Priorities for 2022

During his remarks, Mr. Demske also answered questions from the moderator and audience and spoke on OIG’s enforcement priorities going forward in 2022.

• COVID-19 Fraud: Mr. Demske highlighted COVID-19 fraud as one enforcement priority, explaining that OIG is focusing on two types of fraud that have arisen related to the pandemic: (1) fraud related to the disease itself, such as fake tests, fake vaccines or remedies, and the use of COVID-19 as a hook for identity theft or billing Federal health care programs for medically unnecessary services; and (2) fraud related to the response to COVID-19, such as fraud against HHS’s Provider Relief Fund and Uninsured Relief Fund.  Mr. Demske noted that OIG has already settled five CMP cases related to the Provider Relief Fund, arising from allegations of false certifications.  He also pointed to OIG’s COVID-19 Portal, which contains information about all planned, on-going, and completed audits, evaluations, and investigations related to COVID-19, industry guidance, and FAQs addressing the application of OIG’s enforcement authorities during the pandemic.
• Telehealth and “Telefraud”: Referencing a statement issued by OIG’s Principal Deputy Inspector General in 2021, Mr. Demske confirmed that fraud-related telehealth is an enforcement priority for OIG in 2022.  He acknowledged that the COVID-19 pandemic has demonstrated how patients benefit from increased access to health care via telehealth services.  However, to prevent and detect potential abuse, OIG will be conducting audits and evaluations to identify potential vulnerabilities or improvements to help guide programs after the pandemic ends.  In addition, Mr. Demske stated that OIG will continue to focus on “telefraud” schemes, which leverage telemarketers to contact patients in order to provide medically unnecessary items or services.
• Managed Care: As managed care has become a large and growing part of Federal health care programs, including Medicare and Medicaid, Mr. Demske stated that OIG recognizes that risks associated with managed care are different than the risks associated with traditional fee-for-service programs.  In this space, OIG is focusing on patient health and safety within managed care plans, such as whether plans have adequate provider networks and whether those providers are actually available for patients.  In addition, OIG is focusing on fraud related to managed care, including whether diagnoses are being inflated and the various ways in which diagnoses may have been misrepresented on claims for reimbursement.  Mr. Demske cited the Sutter Health settlement in 2021 as an example where inflated diagnoses led to an FCA case.
• Nursing Home Facilities: Mr. Demske noted that oversight of nursing home facilities is an important focus area for OIG, particularly in light of the impact COVID-19 has had on these facilities during the pandemic.  OIG’s efforts in this area focus on health care fraud in the nursing home context, as well as working to identify general best practices for the health and safety of patients in nursing homes.
• Opioids: Mr. Demske stated that opioids continue to be a large focus for OIG.