[Code of Federal Regulations]

[Title 42, Volume 4]

[Revised as of October 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 42CFR1001.1001]



[Page 1157-1158]

 

                         TITLE 42--PUBLIC HEALTH

 

      GENERAL--HEALTH CARE, DEPARTMENT OF HEALTH AND HUMAN SERVICES

 

PART 1001_PROGRAM INTEGRITY_MEDICARE AND STATE HEALTH CARE PROGRAMS--

 

                     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



[[Page 1158]]



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.

    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]