This post was also written by Jennifer A. Goldstein, Thomas W. Greeson, and Laura A. Mastrangelo.

On October 20, 2010, the Office of Inspector General (OIG) of the Department of Health and Human Services issued significant new guidance for implementing its permissive exclusion authority under section 1128(b)(15) of the Social Security Act. Section 1128(b)(15) specifically authorizes the OIG to exclude an owner, officer or managing employee of a sanctioned entity, i.e., health care provider, supplier, or manufacturer, from participation in federal health care programs. The OIG’s new guidance sets out non-binding factors that the OIG intends to consider in deciding whether to impose exclusion on owners, officers and managing employees.

In addition, there have been recent statements by officials of the Food & Drug Administration concerning the bringing of misdemeanor charges against executives of entities that promote off-label uses of their products. Taken together, these OIG and FDA developments clearly signal that increasing investigative and enforcement activity is forthcoming regarding the owners, officers and managing employees of providers, suppliers, and manufacturers alike.

For a more detailed summary of the OIG’s new guidance and the need to take proactive measures against potential abuses and misconduct, read our full alert.