Hospital Enters into False Claims Settlement for Employee with Lapsed License

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I.  Hospital Employed Therapist with Lapsed License

The Department of Justice (DOJ) entered into a settlement with a nonprofit Michigan hospital this week resolving allegations that the hospital submitted false Medicaid claims. The services had allegedly been rendered by a therapist with a lapsed license. Further, in an unusual move, DOJ required the hospital to acknowledge in the false claims settlement that it should have known of the lapsed license when it submitted the claims.

II.  No Difference Between a Lapsed License and an Exclusion for False Claims Liability

This case is of particular interest because when analyzing the potential for False Claims Act liability, there is no appreciable difference between a person with a lapsed license and a person that has been excluded from Medicare or Medicaid. That is, the claims are said to be legally “false” because of the individual’s status (having no license and being excluded). Unless an employer can come up with a satisfactory explanation (in the eyes of DOJ or HHS/OIG) why he or she wasn’t aware, that employer will either be presumed to have “known” of the status or it can be determined that he or she “should have known” of it. Of course, in either event, liability can attach!

So, beware and be sure to screen your employees, vendors and contractors as required!

Are you taking the necessary precautions to ensure you are not working with an excluded entity? We know it can be difficult to screen every Federal and State exclusion list. Call Exclusion Screening at 1-800-294-0952 or fill out the form below to hear about our cost-effective solution and for a free quote and assessment of your needs.


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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: or 1-800-294-0952.

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