A quick review of the Office of Inspector General’s (OIG) exclusion enforcement actions might make one wonder why the Civil Monetary Penalties (CMPs) for some entities are only $10,000 while others are closer to $2,000,000. We were curious as well, and took a look into the factors that might contribute to the vast differences in money owed.
The easiest answer is that CMPs tend to be lower for entities that self-disclosed the exclusion violation as opposed to entities that were subject to an OIG investigation. “Tend” is the key word here. You’ll notice that the August 5, 2014 case (see “CMP Liabilities Higher” link above) was self-disclosed and has the highest CMP amount listed at $1,983,907.51.
I. CMP Liability Depends on How Many Excluded Individuals Are Hired
Another contributing factor is the number of excluded individuals that the provider employed or contracted with. More individuals means that more claims were likely submitted for payment. Therefore, the government likely paid more money to these providers than providers who only employed or contracted with one excluded person. This is evident in the two exclusion actions which took place on August 5, 2014. The University Hospital employed one excluded individual and owed $10,000 in CMP liabilities, while the laboratory owed nearly $2,000,000 because it knew or should have known that four employees were excluded from participation in the federal health care programs. However, it’s important to note that the March 7, 2014 case which totaled $243,266.31 in CMPs only involved one excluded individual. So what is going on?
II. CMP for Each Item or Service Provided
OIG has discretion to impose CMPs of up to $10,000 for each item or service that the excluded individual provided. Hence, the length of time and the number of items or services provided by the excluded individual directly contribute to the total CMP amount imposed on a provider. The March 7, 2014 case involved a nursing and rehabilitation center, so it is likely that a large majority of the entity’s claims were submitted to the Federal health care programs for payment. Additional information about the excluded individual is not available, but the rules governing CMPs lead us to believe that this individual was employed with the facility for a fairly substantial period of time and provided a large number of items and services that were directly or indirectly billed to the Federal health care programs.
The Federal health care program monies may not be used for activities that violate the law. Therefore, even a self-disclosing entity will be subject to large CMPs if the excluded individual performed a lot of services that were billed (directly or indirectly) to the Federal health care programs.
III. Our Take-Away
Our take-away from this closer look at CMPs confirms that it is best to identify an individual or entity that is excluded as soon as possible. This is where monthly screening comes in. You might screen your employee or contractor before hiring, but if you continue to let that employee or contractor conduct services that are billed directly or indirectly, you may be responsible for paying that money back. Finding out a person is excluded one month into a relationship with them is much better than learning about the exclusion six months or a year later because the person will not have had an opportunity to perform an extreme amount of services that will get you into hot water.
Paul Weidenfeld, Co-Founder and CEO of Exclusion Screening, LLC, is the author of this article. He is a longtime health care lawyer whose practice has focused on False Claims Act cases and health care fraud matters generally. Contact Paul should you have any questions at: firstname.lastname@example.org or 1-800-294-0952.
 Providers are reminded that OIG may use a lower multiplier for damages in self-disclosure cases, but it is under no obligation to do so. Dep’t of Health and Human Servs. Office of the Inspector Gen., Updated OIG’s Provider Self-Disclosure Protocol, 14 (Apr. 17, 2013).