Exclusion of entities owned or controlled by a sanctioned person.
Circumstance for exclusion.
The OIG may exclude an entity if:
A person with a relationship with such entity—
Has been convicted of a criminal offense as described in sections 1128(a) and 1128(b) (1), (2) or (3) of the Act;
Has had civil money penalties or assessments imposed under section 1128A of the Act; or
Has been excluded from participation in Medicare or any of the State health care programs, and
(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
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.
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.
Ownership interest means an interest in:
The capital, the stock or the profits of the entity, or
Any mortgage, deed, trust or note, or other obligation secured in whole or in part by the property or assets of the entity.
Except as provided in § 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.
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.
An entity excluded under this section may apply for reinstatement at any time in accordance with the procedures set forth in § 1001.3001(a)(2).
[57 FR 3330, Jan. 29, 1992, as amended at 64 FR 39427
, July 22, 1999]