[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: 42CFR1001.701]

[Page 1107-1108]
 
                         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. 1001.701  Excessive claims or furnishing of unnecessary or substandard items and services.

    (a) Circumstance for exclusion. The OIG may exclude an individual or 
entity that has--
    (1) Submitted, or caused to be submitted, bills or requests for 
payments under Medicare or any of the State health care programs 
containing charges or costs for items or services furnished that are 
substantially in excess of such individual's or entity's usual charges 
or costs for such items or services; or

[[Page 1108]]

    (2) Furnished, or caused to be furnished, to patients (whether or 
not covered by Medicare or any of the State health care programs) any 
items or services substantially in excess of the patient's needs, or of 
a quality that fails to meet professionally recognized standards of 
health care.
    (b) The OIG's determination under paragraph (a)(2) of this section--
that the items or services furnished were excessive or of unacceptable 
quality--will be made on the basis of information, including sanction 
reports, from the following sources:
    (1) The QIO for the area served by the individual or entity;
    (2) State or local licensing or certification authorities;
    (3) Fiscal agents or contractors, or private insurance companies;
    (4) State or local professional societies; or
    (5) Any other sources deemed appropriate by the OIG.
    (c) Exceptions. An individual or entity will not be excluded for--
    (1) Submitting, or causing to be submitted, bills or requests for 
payment that contain charges or costs substantially in excess of usual 
charges or costs when such charges or costs are due to unusual 
circumstances or medical complications requiring additional time, 
effort, expense or other good cause; or
    (2) Furnishing, or causing to be furnished, items or services in 
excess of the needs of patients, when the items or services were ordered 
by a physician or other authorized individual, and the individual or 
entity furnishing the items or services was not in a position to 
determine medical necessity or to refuse to comply with the order of the 
physician or other authorized individual.
    (d) Length of exclusion. (1) An exclusion imposed in accordance with 
this section will be for a period of 3 years, unless aggravating or 
mitigating factors set forth in paragraphs (d)(2) and (d)(3) of this 
section form a basis for lengthening or shortening the period. In no 
case may the period be shorter than 1 year for any exclusion taken in 
accordance with paragraph (a)(2) of this section.
    (2) Any of the following factors may be considered aggravating and a 
basis for lengthening the period of exclusion--
    (i) The violations were serious in nature, and occurred over a 
period of one year or more;
    (ii) The violations had a significant adverse physical, mental or 
financial impact on program beneficiaries or other individuals;
    (iii) Whether the individual or entity has a documented history of 
criminal, civil or administrative wrongdoing;
    (iv) The violation resulted in financial loss to Medicare, Medicaid 
and all other Federal health care programs of $1,500 or more; or
    (v) The individual or entity has been the subject of any other 
adverse action by any Federal, State or local government agency or 
board, if the adverse action is based on the same set of circumstances 
that serves as the basis for the imposition of the exclusion.
    (3) Only the following factors may be considered mitigating and a 
basis for reducing the period of exclusion--
    (i) There were few violations and they occurred over a short period 
of time; or
    (ii) Alternative sources of the type of health care items or 
services furnished by the individual or entity are not available.

[57 FR 3330, Jan. 29, 1992, as amended at 63 FR 46688, Sept. 2, 1998]