CMS can now exclude individual providers and entities from participating in federal healthcare programs, including Medicare and Medicaid. HHS Secretary Robert F. Kennedy Jr. delegated the authority to the CMS administrator in a notice that took effect immediately.
Here are seven things to know:
1. The notice was published in the Federal Register on Oct. 14. It delegates the HHS secretary’s permissive exclusion authority under Section 1128(b) of the Social Security Act. CMS requested the delegation, according to the notice.
“As the agency directly responsible for administering Medicare and Medicaid, CMS is uniquely positioned to investigate, identify, and develop the evidentiary basis underpinning permissive exclusion determinations,” the notice said. “Formalizing this delegation aligns investigative and enforcement responsibilities within a single operating division, reducing redundancy and improving program integrity outcomes.”
2. Grounds for permissive exclusion under the statute include misdemeanor convictions related to healthcare fraud or controlled substances, license revocations or suspensions, billing substantially excessive charges or furnishing unnecessary services, kickbacks and other prohibited activities, and making false statements on program enrollment applications.
3. The HHS inspector general’s existing authority is unaffected. HHS delegated these authorities to the inspector general in 1988, and the notice states that the new delegation does not diminish that earlier delegation or any actions taken under it.
4. Two powers stay outside CMS’ reach under the notice: holding hearings and issuing regulations. Mr. Kennedy retains the authority to issue regulations and to submit reports to Congress.
5. The authority may be redelegated. Any redelegations or edits must be reviewed by the Division of Performance and Organizational Programs within CMS’ Office of Human Capital.
6. CMS must exercise the authority in line with HHS’ existing policies, procedures, guidelines and regulations, according to the notice.
7. The notice also affirms and ratifies any actions the administrator or subordinates took under the authority before the delegation became effective.
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