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We at Guidepost are always interested in new compliance cases and any unique enforcement methods used by the government. Skadden’s website has a thoughtful writeup about Church Street Health Management (CSHM) and the sanctions placed on them by the Office of the Inspector General of the Department of Health and Human Services (OIG).
After the U.S. Department of Justice (DOJ) alleged that CSHM had engaged in “a pattern of wrongdoing relating to dental services provided to low-income children,” CSHM entered into a civil settlement agreement with the DOJ in January 2010 that included $24 million in penalties, as well as a five-year corporate integrity agreement (CIA) with the OIG. The CIA contained penalty provisions that would take effect if CSHM did not comply with the agreement.
The OIG has the authority to exclude organizations and individuals from taking part in federal health programs — an action which can quickly put a company out of business. Often, private insurers also choose to exclude any providers that are on the federal government’s exclusion list. While exclusion authority is a powerful tool to sanction companies, it is sometimes difficult to justify exercising complete exclusion from federal programs because of the widespread affect this can have on patients and innocent employees when the sanctions are against large corporations.
A provision of CSHM’s agreement stated that a breach of the CIA by CSHM would be grounds for exclusion from federal health programs. In a novel use of its exclusion authority, the OIG forced CSHM to divest one of the affiliates — Small Smiles Dental Center of Manassas — within 90 days to avoid federal exclusion. The Skadden article notes that this is unique because although the OIG in 2010 for the first time forced a company to divest an affiliate to avoid exclusion, that case involved serious criminal charges and the divestiture agreement was part of the resolution of those charges. The CSHM case is the first time that force divestiture has occurred as a result of a breach of the terms of a CIA. In addition, the time frame (90 days) was very short compared to the 7 months that were allowed in the 2010 forced divestiture. The article notes that this could signal a pattern by the OIG to use even more novel enforcement methods, such as the forced divestiture of a company’s product line to avoid exclusion.
Guidepost Solutions has the experience and knowledge to help companies comply with any agreements to ensure that harsh sanctions such as exclusion or forced divestiture are avoided.
Andrew J. O’Connell serves as president of the Investigations and Private Client Protection practice at Guidepost Solutions. He is a former federal prosecutor and federal agent with expert investigative and security consulting experience. Mr. O’Connell oversees and conducts private investigations and security assessments throughout the United States and the world. Andrew can be reached at firstname.lastname@example.org.