[Code of Federal Regulations]
[Title 42, Volume 3]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR1001.1001]

[Page 1133-1134]
 
                         TITLE 42--PUBLIC HEALTH
 
                     CHAPTER V--OFFICE OF INSPECTOR
                          GENERAL--HEALTH CARE,
                        DEPARTMENT OF HEALTH AND
                             HUMAN SERVICES
 
PART 1001--PROGRAM INTEGRITY--MEDICARE AND STATE HEALTH CARE PROGRAMS--Table of Contents
 
                    Subpart C--Permissive Exclusions
 
Sec. 1001.1001  Exclusion of entities owned or controlled by a sanctioned person.

    (a) Circumstance for exclusion. (1) The OIG may exclude an entity 
if:
    (i) A person with a relationship with such entity--
    (A) Has been convicted of a criminal offense as described in 
sections 1128(a) and 1128(b) (1), (2) or (3) of the Act;
    (B) Has had civil money penalties or assessments imposed under 
section 1128A of the Act; or
    (C) Has been excluded from participation in Medicare or any of the 
State health care programs, and
    (ii) Such a person--
    (A)(1) Has a direct or indirect ownership interest (or any 
combination thereof) of 5 percent or more in the entity;
    (2) 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 5 percent of the total property and 
assets of the entity;
    (3) Is an officer or director of the entity, if the entity is 
organized as a corporation;
    (4) Is partner in the entity, if the entity is organized as a 
partnership;
    (5) Is an agent of the entity; or
    (6) Is a managing employee, that is, an individual (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
    (B) Was formerly described in paragraph (a)(1)(ii)(A) of this 
section, 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 as defined in paragraph (a)(2) of this 
section, in anticipation of or following a conviction, assessment of a 
CMP, or imposition of an exclusion.
    (2) For purposes of this section, the term:
    Agent means any person who has express or implied authority to 
obligate or act on behalf of an entity.
    Immediate family member means, a person's husband or wife; natural 
or adoptive parent; child or sibling; stepparent, stepchild, stepbrother 
or stepsister; father-, mother-, daughter-, son-, brother- or sister-in-
law; grandparent or grandchild; or spouse of a grandparent or 
grandchild.
    Indirect ownership interest includes an ownership interest through 
any other entities that ultimately have an ownership interest in the 
entity in issue. (For example, an individual has a 10 percent ownership 
interest in the entity at issue if he or she has a 20 percent ownership 
interest in a corporation that wholly owns a subsidiary that is a 50 
percent owner of the entity in issue.)
    Member of household means, with respect to a person, any individual 
with whom they are sharing a common abode as part of a single family 
unit, including domestic employees and others who live together as a 
family unit. A roomer or boarder is not considered a member of 
household.

[[Page 1134]]

    Ownership interest means an interest in:
    (i) The capital, the stock or the profits of the entity, or
    (ii) Any mortgage, deed, trust or note, or other obligation secured 
in whole or in part by the property or assets of the entity.
    (b) Length of exclusion. (1) Except as provided in 
Sec. 1001.3002(c), exclusions under this section will be for the same 
period as that of the individual whose relationship with the entity is 
the basis for this exclusion, if the individual has been or is being 
excluded.
    (2) If the individual was not excluded, the length of the entity's 
exclusion will be determined by considering the factors that would have 
been considered if the individual had been excluded.
    (3) An entity excluded under this section may apply for 
reinstatement at any time in accordance with the procedures set forth in 
Sec. 1001.3001(a)(2).

[57 FR 3330, Jan. 29, 1992, as amended at 64 FR 39427, July 22, 1999]