Perhaps one of the most significant trends in healthcare fraud enforcement, however, has been the government’s increased focus on individual officers and directors. In addition to continuing to crack down on corporate entities, the government has actively pursued individuals by seeking to impose liability under the Responsible Corporate Officer Doctrine and through the use of the Office of Inspector General’s (OIG) permissive exclusionary authority. The Responsible Corporate Officer Doctrine was formulated by the Supreme Court in U.S. v. Park, in which the Court held that individuals who assume positions of authority in businesses that affect the public health may be held to a strict standard of accountability.4


The Responsible Corporate Officer Doctrine is applied by the OIG in its use of its permissive exclusionary authority. Under the OIG’s permissive exclusionary authority, officers or managing employees of a sanctioned entity who knew or should have known of the conduct that led to the sanction may be excluded from participating in any federal healthcare plan.5 Furthermore, the Patient Protection and Affordable Care Act (PPACA) expanded the OIG’s permissive exclusionary authority to include any person: (a) ordering, referring, or certifying items or services payable by a federal healthcare program; (b) who has been convicted in connection with interference or obstruction of a civil audit or investigation; or (c) who knowingly makes or causes to be made any false statement in an application or bid to a federal healthcare program. Confirming its intent to expand the use of its exclusionary authority, the OIG announced on October 20, 2010 that it would “operate with a presumption in favor of exclusion.”6 This statement is reflective of the government’s intensified efforts to hold individuals liable for their participation in healthcare fraud.


When excluded from participating in a federal healthcare plan, an individual is prohibited from working for any entity that directly or indirectly receives Medicare or other federal health benefit program funds. Because few healthcare providers do not take federal health benefit program funds, an exclusion essentially operates as the economic death penalty, by depriving the excluded individual of the ability to earn any income in the healthcare industry.


To protect against this threat of individual liability, a healthcare organization’s officers and directors must continually encourage and oversee the organization’s compliance efforts. Officers and directors should be involved in the implementation and development of the compliance program that address the organization’s risk areas. They also should request regular updates on compliance matters and require the organization engage in periodic auditing and monitoring to ensure continued compliance with applicable legal standards. By setting the tone at the top, officers and directors can establish a culture of compliance, which is the best protection against organizational and personal liability.


About the Authors


Anna M. Grizzle, Esq. focuses her practice on representing healthcare providers and companies in operational and compliance matters, investigations, and litigation. She also currently serves as the chair of the Entry Level Hiring Committee for the law firm of Bass Berry Sims. Anna frequently works with clients in developing and implementing compliance programs and providing advice on compliance-related matters. She also works with clients to develop policies in anticipation of government and commercial payer claims audits, including those performed by Recovery Audit Contractors (RACs), Zone Program Integrity Contractors (ZPICs), and Medicaid Integrity Contractors (MICs). Anna represents clients in responding to claims audits and in the appeals of audit results. On those occasions where the results of the audit are referred to law enforcement, Anna assists clients in conducting an appropriate internal investigation, redressing any improprieties, and resolving any issues with enforcement authorities.


David S. Mitchcell, Jr.


David earned his B.A. from Washington and Lee University in 2007 and his J.D., magna cum laude, from the University of Arkansas School of Law in 2010. While in law school David served as symposium editor and associate editor of the Arkansas Law Review and was elected to the Arkansas School of Law Honor Council. Additionally, he received the award for best advocate in the Arkansas Law School Trial Competition and was named the Top Oralist in the Moot Court Competition. David received the Vincent W. Foster Jr. scholarship for ethics and was elected class speaker for the Arkansas School of Law commencement.



Contact the Authors


To comment on this article please go to




1Press Release, U.S. Department of Health and Human Services, Health Care Fraud Prevention and Enforcement Efforts Result in Record-Breaking Recoveries Totaling Nearly $4.1 Billion (Feb. 14, 2012).






4U.S. v. Park, 421 U.S. 658 (1975).


542 U.S.C. §§ 1320a-7, 1320c-5.


6Department of Health and Human Services, Guidance for Implementing Permissive Exclusion Authority Under Section 1128(b)(15) of the Social Security Act (Oct. 20, 2010), available at


MACs: Unintended Consequences Order of the Day


Share This Article