(January 12, 2018): The Medicare and Medicaid programs are both essential, yet costly health benefit programs sponsored in whole or in part by the Federal government. With Medicare and Medicaid costing $686 and $368 billion each year, respectively, the government has dedicated experienced investigators, auditors and prosecutors to ferret out incidents of health care fraud and abuse. While most health care fraud administrative, civil and / or criminal cases are brought against medical providers, dental providers and the members of their staff are increasingly finding that their actions are under scrutiny by Federal and State regulators. A prime example is illustrated by the various “exclusion” actions taken against dentists and dentist office staff last year during 2017.
I. What is an “Exclusion” Action?
Simply put, under certain circumstances, the Department of Health and Human Services, Office of Inspector General, Office of Inspector General (HHS-OIG) is mandated by law to “exclude”
individuals and entities from participating in Federally funded health care program under 1128 of the Social Security Act (SSA),
and from Medicare and State health care programs under section 1156 of the SSA. Under other circumstances, HHS-OIG exercises the discretionary authority to decide whether or not to exclude a party.
During 2017, HHS-OIG took a number of administrative exclusions actions against dentists and dental practice personnel in order to meet their statutory obligations. As set out below, a brief description of the exclusion actions taken against dental professionals, along the frequency of their occurrence are described in the section below.
II. Exclusion Actions Taken Against Dentists and Dental Staff in 2017:
With the exception of the permanent revocation of one’s professional license, there is perhaps no administrative sanction that may be taken against a health care provider that is more serious than an exclusion action. As we will discuss later in this article, the collateral impact of an exclusion action can be financially devastating to your dental practice. In any event, there are a number of mandatory and permissive bases upon which HHS-OIG can base an exclusion action. Depending on the reason for exclusion, an individual or entity can be excluded from an undetermined minimum period up to a permanent exclusion from participating in Federal health benefits programs.
Dentists and dental staff members are subject to exclusion and are regularly sanctioned by HHS-OIG. During 2017, a handful of dental professionals were placed on HHS-OIG’s exclusion list most months but the reasons for exclusion were primarily grouped into the categories for exclusion described below:
42 U.S.C. §1320a-7(b)(14): Default on health education loan or scholarship obligations. 50% of all exclusions against dentists / dental staff. The largest group of dentists and dental office personnel excluded by HHS-OIG in 2017 were sanctioned on the basis of their default of one or more Federally-secured health education loans. Approximately 53.13% of the dental professionals and staff were excluded on this basis. This is especially noteworthy when you consider the fact that only 2.38% of the total number of health care providers and other individuals excluded by HHS-OIG in 2017 were on the basis of a similar loan default. Although it is never a “good” thing to be excluded from participating in Federal health benefits programs, health care providers who are excluded under this this provision are eligible to apply for reinstatement as soon as they resolve they resolve their loan default with the Federal government. In the overall exclusion scheme, this is by far the most benign of all exclusion authorities.
42 U.S.C. § 1320a-7(a)(1): Conviction of program-related crimes. 18.75% of all exclusions against dentists / dental staff.
This mandatory exclusion provision was the second most frequent basis cited by HHS-OIG when sanctioning dentists and dental staff in 2017. As an example, in one case
, a Charleston, WV dentist admitted that he improperly engaged in upcoding with respect to at least 7,490 tooth extractions. These extractions led to more than $1.3 million in billings. He further admitted that if those extractions were medically necessary, and if had actually performed the procedures he claimed, then he should have been paid only $599,200. He next admitted that he submitted other false bills and improperly received payment. As part of his plea agreement, the dentist agreed to pay $738,067 in restitution. He also entered into a separate civil settlement agreed to be excluded from participation in the Medicare and Medicaid programs for 13 years. Notably, across the board, among all health care providers and individuals, 42 U.S.C. § 1320a-7(a)(1) was used as a basis for excluding individuals, in 39.09%
of all cases. In contrast, it was only cited in 18.75%
of the cases involving dentists and dental staff.
42 U.S.C. § 1320a-7(a)(3): Felony conviction relating to health care fraud. 3.13% of all exclusions against dentists / dental staff.
This mandatory exclusion provision requires that HHS-OIG exclude an individual who is convicted of felony health care fraud for a minimum of 5 years. In one 2017 case
citing this basis for exclusion, a long-time claims manager in a dental practice went to the State Dental Board to complain that the dentist for whom she worked was engaging in fraud. She alleged that he was billing Delta Health Systems
for dental services not rendered, performing medically-unnecessary dental services and offering cash and noncash incentives to his staff to make appointments. The claims manager was then implicated in the wrongdoing and both the dentist and the claims manager were charged with Federal crimes. The claims manager was subsequently sentenced to 21 months in prison and the dentist for whom she worked was sentenced to three years, 10 months in prison. Both defendants were ordered to jointly pay $726,300 in restitution. 3.13%
of the exclusion actions against dentists and dental staff were on the basis of 42 U.S.C. § 1320a-7(a)(3). Similarly, 7.68%
of the exclusion actions taken against all health care providers by HHS-OIG were on this basis.
42 U.S.C. § 1320a-7(b)(4): License revocation, suspension, or surrender. 12.50% of all exclusions against dentists / dental staff.
Under this basis for permissive exclusion, HHS-OIG may choose to exclude a provider if the provider’s license is revoked, suspended or surrendered. In one 2017 case
, the State of Utah alleged that the one of its licensed dentists had engaged in unprofessional conduct. The conduct supposedly included using controlled substances from prescriptions written to family members, treating family members for opioid addiction without being trained to do so, having a conviction for impaired driving and providing false information on an application. The dentist’s licenses were revoked, the revocations were stayed and the dentist’s licenses were placed on probation for five years. Based on the licensure actions taken, HHS-OIG exercised its permissive exclusion authority under 42 U.S.C. § 1320a-7(b)(4). Globally, licensure-based exclusion actions constituted 30.81%
of the actions taken by HHS-OIG against health care providers and other individuals during 2017. In contrast, only 12.50%
of the exclusion actions against dentists and dental staff were based an underlying licensure disciplinary action.
42 U.S.C. § 1320a-7(a)(4): Felony conviction relating to controlled substance. 6.25% of all exclusions against dentists / dental staff.
This mandatory basis for exclusion was only cited 6.25%
of the time by HHS-OIG when sanctioning dentists and dental staff. Consistent with its finding for dentists, HHS-OIG only based exclusions on this authority 5.63%
of the time among all health care providers (and other individuals) during 2017. In one of the cases
we reviewed, a South Dakota dentist pleaded guilty to a charge of “Obtaining Possession of Controlled Substance by Fraud or Deception,”
a Class 4 Felony. In light of the plea, HHS-OIG was required by law to exclude the dentist from participation in Federal health benefits program for a minimum of 5 years.
Two other bases for exclusion, 42 U.S.C. § 1320a-7(b)(3): Misdemeanor conviction relating to controlled substance, and 42 U.S.C. § 1128b7: Fraud, kickbacks, and other prohibited activities, were infrequently cited by HHS-OIG in connection with exclusion actions it took against dentists during 2017. None of the other mandatory or permissive exclusion authorities were relied upon by HHS-OIG when sanctioning dentists and / or dental personnel during 2017.
III. Impact of Exclusion on Dentists and Dental Staff:
Former Federal prosecutor and the current Compliance Officer for Exclusion Screening
, Paul Weidenfeld,
best described the impact of an exclusion action when he stated:
“If an individual is excluded from participating in Federal health benefits programs, for all practical purposes, they are likely unemployable by anyone who accepts insurance from Medicare, Medicaid, TriCare, FEHBP or another health benefit program that is funded in whole or in part by Federal funds. Moreover, each year we are seeing more and more private payors insist that their participating providers screen out any excluded employees, contractors, vendors and agents.
Ultimately, this is a matter of RISK. You must screen your staff, vendors, agents and contractors every 30 days. The last thing you want is to have a staff member with either a suspended / revoked license or a felony conviction for fraud or patient abuse working in your practice without your express knowledge.”
A. Are Your Lax Practices Exposing You to CMPs?
In 1981, Congress enacted the Civil Monetary Penalties (CMP) law, Public Law 97-35 codified at section 1128A of the Social Security Act). Under this statute, HHS-OIG was authorized to impose CMPs against any individual or entity found to have submitted claims for payment by Medicare or Medicaid for items or services furnished by an excluded individual. Since first being passed, there have been several additional statutes further expanding HHS-OIG’s authority to assess CMPs. As it now stands, if a health care provider fails to properly screen to ensure that no excluded individuals are employed, virtually every claim that an excluded individual is associated with will be regarded as “tainted” and will be subject to CMPs.
B. Don’t Judge a Book by Its Cover – Screen All Applicants Before Bringing on New Hires.
Merely asking an applicant on their application if they are currently excluded from Medicare or Medicaid (or have ever been excluded from Medicare or Medicaid) is totally insufficient. After filling out one or two applications for employment, individuals who have been excluded are savvy enough to realize that anytime they check the box “YES,” they will not even qualify for an interview. As a result, over the last year, our Firm has handled several voluntary disclosure matters where an applicant lied about his exclusion status in order to get a job. Six to a year later, the provider learned that the new employee was excluded and had been excluded when initially hired at the practice. The lesson to be learned is simple – you cannot rely on any assertions made by an applicant regarding the applicant’s exclusion status. You need to verify it yourself, prior to onboarding a new hire.
C. Exclusions are Not Restricted to Merely Licensed Professionals:
The impact of an exclusion action on a health care provider’s ability to conduct business can be significant. Moreover, the severe consequences of exclusion have been a constant warning of HHS-OIG since it first published its Special Advisory Bulletin
in 1999 entitled “The Effect of Exclusion From Participation in Federal Health Care Programs.”
Importantly, virtually anyone can be excluded from participation Federal health care programs. Moreover, the adverse impact of an exclusion action is not merely limited to licensed individuals such as dentists, oral surgeons and / or dental hygienists. Non-clinical staff who furnish administrative and management services that are payable by the Federal health care programs are also affected by an exclusion action and can expose your dental practice to liability. As HHS-OIG’s “Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs”
goes on to further clarify:
“. . . an excluded individual may not provide other types of administrative and management services, such as health information technology services and support, strategic planning, billing and accounting, staff training, and human resources, unless wholly unrelated to Federal health care programs.”
D. Exclusion Actions are Reported to the NPDB:
If an individual is excluded from participation in Federal health care benefits programs, HHS-OIG considers the matter to be a reportable event
and will report the administrative sanction to the National Practitioner Databank (NPDB) for inclusion in its system. As a result, all payors (both public and private), will be notified of the adverse action. Since most dental practices participate in at least one dental insurance program, you are likely required to notify the payor of any adverse actions brought against you within 30 – 60 days of the event (the time to report varies from contract to contract). Dentists placed in this position often find it difficult to effectively respond to private payor inquiries regarding an exclusion order. If the dentist notifies a payor immediately after being excluded, most payors will initiate their own administrative review of the facts to determine whether they want to continue to allow the provider to continue work as a participating provider. If a dentist fails to notify the payor of the exclusion action within the 30-60 day deadline imposed under the parties’ contract, a payor will typically initiate a termination action based on the provider’s breach of its contractual obligations.IV. The Solution – Reducing Your Level of Risk:
To reduce your level of risk, a dental provider should screen its applicants, clinical staff, administrative staff, contractors, vendors and agents on a monthly basis. At the time of the writing of this article, there a total of 40 different databases that need to be checked. These 40 databases include:
(1) List of Excluded Individuals and Entities (LEIE). Maintained by HHS-OIG.
(2) System for Award Management (SAM). Maintained by the General Services Administration.
(3) 38 State Medicaid Exclusion Registries. Maintained by either the State Attorney General’s Office or the State Medicaid Fraud Control Unit (MFCU).
Neither the Federal nor the State governments currently maintain a “consolidated” database that incorporates all of the Medicare and Medicaid exclusion actions into a single records system that can easily be checked by providers. From a practical standpoint, it is rarely cost-effective for a provider to check all 40 databases on an individual basis. Therefore, we strongly recommend that you utilize the services of an organization such as www.exclusionscreening.com. Their services are inexpensive yet comprehensive.
The implementation of an effective screening program is perhaps the least expensive step you can take to help bring your dental practice into at least partial compliance. Although, it won’t satisfy all of your obligations as a health care provider, it is a significant step in the right direction and can greatly reduce your level of overall risk. We therefore strongly recommend that you fully comply with the recommendations of HHS-OIG and screen your employees, contractors, agents and vendors every 30 days. If handling this task is too burdensome to complete in-house, use the services of a company like Exclusion Screening.
Robert W. Liles, J.D., M.B.A., M.S., serves as Managing Partner at Liles Parker, PLLC. Liles Parker is a health law firm representing dentists and dental practices around the country in connection with Medicare, Medicaid and private payor audits. We also represent dentists in State Dental Board disciplinary actions. For a complimentary consultation, give Robert a call at: (202) 298-8750.
 Please keep in mind, the List of Excluded Individuals and Entities (LEIE) that is maintained by HHS-OIG only includes Medicare exclusion actions and other exclusion actions that have been reported to it by one of the states. Despite their obligation to do so, many states do not report all or some of the exclusion actions they have taken against health care providers, individuals and entities. For a complete analysis of the exclusion actions taken against dentists and dental staff in 2017, a review of each of the state exclusion actions taken must also be conducted.
Under the provisions of the 1977 Medicare-Medicaid Anti-Fraud and Abuse Amendments, Public Law 95-142 (now codified at Section 1128 of the Social Security Act), physicians and other practitioners convicted of program-related crimes were first excluded from participation in the Medicare and Medicaid programs.
In this case, Delta Health Systems was the program administrator for United Parcel Service Inc. (UPS) employees.
It is also worth noting that in a case
where a pharmacist entered into an agreement to plead guilty if the state would not oppose a “deferred judgment,” HHS-OIG still took the position that it was appropriate to exclude the pharmacist from participation from participation in Federal health benefits programs. Unfortunately, the author does not give a citation for the case. HHS-OIG may have exercised its exclusion authority under one of the applicable permissive exclusion provisions.