The Pennsylvania Precluded Provider List, commonly referred to as “Medicheck,” identifies individuals and entities who have been excluded from participating in the State’s Medicaid Program. It is similar to the OIG’s List of Excluded Individuals and Entities (LEIE) in that health care programs are prohibited from paying for services furnished by barred entities, and that claims which violate the payment prohibition can result in the serious overpayments and civil money penalties, but the two list differ in a number of important ways – such as their provider screening requirements. The focus of this article is to help Pennsylvania providers understand their screening obligations, the risks to providers that fail to meet them, and how providers can easily fulfill their screening obligations and avoid those risks.
I. How and Why are Providers Listed on the Precluded Provider and the OIG’s Excluded Provider List?
A. Overview of the Pennsylvania Precluded Provider List – Medicheck.
The Pennsylvania Department of Human Services has the authority to terminate providers from the State Medical Assistance (or Medicaid) Program. 55 Pa. Code § 1101.77(a). The department is also required to maintain the list of all terminated providers in Pennsylvania’s “Medicheck (Precluded Provider) List.” 55 Pa. Code § 1101.77(e). Since all terminated providers are on the Pennsylvania Precluded Provider List the terms preclusion and termination are used interchangeably in this article. The database can be searched online at: https://www.humanservices.state.pa.us/Medchk/MedchkSearch/Index.
The principal reasons for provider terminations and subsequent placement on the Pennsylvania Precluded Provider list are found below. The full list can be found at PA Code § 1101.77(c):
- Failure to comply with the conditions of participation or terms of the provider agreement.
- Exclusion, suspension or termination from Medicare.
- Conviction of a Medicare or Medicaid offense as certified by a Federal, State or local court.
- Conviction under State or Federal law relating to the practice of the provider’s profession.
- Disciplinary action taken by the State licensing or certifying agency.
- Failure to report changes in a DEA Number and/or loss of a controlled substance license.
- Refusal to permit access to records to verify services rendered or claims for payment.
Providers that have been placed on the list have limited appeal rights. Appeals to terminations based on an exclusion or conviction, for example, are limited to the “identity” of the provider involved. This same limitation exists if the action is based on a professional disciplinary action. Reinstatement at the conclusion of a preclusion is also not automatic. If an application for reinstatement is rejected, there are no appeal rights rejection prior to the date specified by the Department. 55 Pa. Code § 1101.82(a).
As will be seen in the next section, the bases for terminations and OIG Exclusions are similar. However, the reasons for each do not mirror each other and providers on the Pennsylvania Precluded Provider List are not necessarily on the OIG Exclusion list. Or the other way around. For instance, the Medicheck (Precluded Provider) List identifies more than 900 physicians whereas the LEIE only has about 350 doctors from Pennsylvania. Additionally, although almost 6000 sanctioned parties are listed on Pennsylvania’s Preclusion List, the LEIE has less than 3000 from Pennsylvania.
B. The OIG List of Excluded Individuals and Entities (LEIE).
Exclusions were initially authorized by Congress in the Medicare-Medicaid Anti-Fraud and Abuse Amendments of 1977. The current framework was established by the Medicare and Medicaid Patient and Program Protection Act of 1987, and the authority to impose exclusions was delegated to the Office of Inspector General of the Department of Health and Human Services (HHS/OIG or OIG) a year later. 53 Fed. Reg. 12,993 (April 20, 1988). The OIG’s authority and the procedural processes governing exclusions are found in 42 CFR 1001 through section 1001.1701. A searchable version of the LEIE can be found at https://exclusions.oig.hhs.gov/.
The are two types of OIG exclusions, mandatory and permissive. The authority for mandatory exclusions is found in §1128(a)(1)-(4) of the Social Security Act, and permissive exclusions are found in sections §1128(b)(1)-(b)(16) and §1156. Regardless of which is imposed, however, the effect of each is the same until such time, if ever, that the excluded party is reinstated.
A. Mandatory Exclusions.
Mandatory exclusions must last a minimum of 5 years, but they can be imposed for virtually any length of time. The offenses that give rise to mandatory exclusions are:
- Conviction for Medicare or Medicaid fraud, or any other offense related to the fraudulent delivery of items or services to Federal or State health care programs;
- Patient abuse or neglect;
- Felony convictions for other health care related fraud, theft, or other financial misconduct; and
- Felony convictions relating to controlled substances (manufacture, distribution, etc.).
B. Permissive Exclusions.
Most permissive exclusions must last at least 3 years and there is a much broader range of conduct that gives rise to them, but the vast majority of permissive exclusions are based on disciplinary actions by professional licensing boards. The permissive exclusions that are most likely to be imposed are:
- Misdemeanor convictions related to defrauding a heath care fraud program,
- Certain misdemeanor convictions relating to controlled substances
- Suspension, revocation, or surrender of a license to provide health care
- Provision of unnecessary or substandard services;
- Submission of false or fraudulent claims to a Federal health care program,
- Engaging in unlawful kickback arrangements,
- Defaulting on health education loan or scholarship obligation, and
- Controlling a sanctioned entity as an owner, officer, or managing employee.
C. Challenging the Imposition of an Exclusion Action.
Defenses to exclusion actions are limited in much the same way they are with preclusion actions. If a mandatory exclusion is sought, the conviction is not subject to challenge and only the length of the exclusion is subject to challenge. Similarly, where a permissive exclusion is based on a disciplinary or licensing matter, the underlying action (suspension, loss of license, etc.) cannot be challenged and only the length of exclusion is subject to appeal. Reinstatement, like with preclusion, is not automatic. Excluded providers must apply for reinstatement, and if they are denied, they must wait a year before reapplying. Also, reinstatement denials cannot be appealed administratively or judicially.
II. What is the Impact of Preclusion and Exclusion Actions?
A. Payment Prohibition for all Items and Services.
Providers on the Pennsylvania Precluded Provider List are barred from all participation in Pennsylvania’s Medical Assistance Programs. Pennsylvania Medicaid will not pay for any services or items that are rendered, prescribed or ordered on and after the effective date of a provider’s termination from the program. Pa. Code §§ 1101.66(e) and 1101.77(c). If an excluded party contributes directly or indirectly to an item or service, the prohibition applies even if the claim is made by a practitioner, or supplier that is not excluded. 42 CFR § 1001.1901(b).In addition, excluded providers may not own, render, order or arrange for a service, nor may it receive direct or indirect payments from the Department in the form of salary, equity, dividends, shared fees, contracts, kickbacks or rebates from or through a participating provider or related entity. Pa. Code 55 § 1101.42(c) and 55 Pa. Code § 1101.77(c).
The OIG similarly describes the effect of an exclusion in its 2013 Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs and its November, 2023 General Compliance Program Guidance. No Federal health care payment may be made for any items or services furnished directly or indirectly by an excluded person, or at the medical direction or on the prescription of an excluded person. (42 CFR 1001.1901). Federal health care programs are broadly defined to include Medicare, Medicaid, CHIPs, TRICARE and any other program that provides health benefits directly or indirectly. And the payment prohibition applies to all methods of Federal health care program payment (whether from itemized claims, cost reports, bundled payment, etc.).
The payment prohibition extends to non-billers and third parties that contribute to claims and is similarly described by both Pennsylvania and the OIG. Below are examples of persons by both: The PA Medicaid Bulletin #99-11-05 identifies the following as persons who cannot contribute to claims:
- Pharmacists or persons who input prescription information for payment.
- Ambulance drivers, dispatchers and others involved in providing transportation.
- Individuals who sell, deliver or refill orders for medical devices.
- Social workers, support staff and administrators.
- Billing agents, accountants, and claims processors.
This list from the 2013 Advisory is much the same:
- Management, administrative or other leadership positions.
- Those that process claims or work in information technology.
- Providers of transportation services including drivers and dispatchers.
- Medical billers and/or third-party billers.
- Providers of Medical devices and equipment if ultimately reimbursed by Federal payors.
- Preparation of a surgical tray, review of treatment plans, and other support services, whether billed separately or as part of a bundled payment.
B. Penalties for Preclusion and Exclusion Violations.
All payments made for services furnished by excluded parties are overpayments that need to be repaid. Additionally, both the State and the OIG are authorized to impose penalties for violations of the payment prohibition. The Pennsylvania Department of Human Services is authorized to institute a civil action against the provider to recover twice the amount of all such payments plus legal interest. 55 Pa. Code § 1101.83(e). The OIG can impose civil money penalties (CMPs) of up to $22,427.00 for each claim submitted to a Federal health care program for an item or service furnished by the excluded individual, and that same amount for knowingly contracting with an excluded party. 42 CFR Section 1003.210(a).
C. Initial Sanctions Often Trigger Additional Adverse Actions.
Both the State and the OIG are required to notify other healthcare stakeholders of their actions. Pennsylvania must notify the OIG (if it is not already aware), its Medicaid Fraud Control Unit and Attorney General Office, relevant licensing boards, and other State and local agencies involved in providing health care. Pa. Code § 1101.77(e). The OIG notifies the States, plus hospitals, skilled nursing facilities, the National Practitioner Data Bank and private insurance companies. 42 CFR 1001.2006. Broad notification often leads to an extension of the impact of the sanction. Notification to the Medicaid Fraud Control Unit and the Attorney General Office are advised of a preclusion, for example, allows them to evaluate whether criminal prosecution is warranted. Similarly, licensing boards are likely to consider the sanction and the conduct if they haven’t already done so. And since OIG Exclusions prohibit payments by any and all Federal health care programs (including Medicaid, CHIPs, TRICARE, etc.), upon notification, all such programs should exclude them if they haven’t already done so.
D. Medicheck / Pennsylvania Precluded Provider Listings Can Result in Other State Sanctions.
Preclusions can also lead to sanctions in other States pursuant to Section 6501 of the Affordable Care Act (42 U.S.C. 1396(a)). Although Section 6501 states that providers excluded from anyState Medicaid program are to be excluded from participating in all State programs, since States sometimes place parties on their sanction lists for reasons unrelated to either healthcare or fraud, the application of 6501 is not automatic. However, since it does apply when the sanction has been based for a “cause,” by sharing the termination with reasons, states are able to determine if the exclusion imposed by Pennsylvania presents a valid basis for exclusion in their state. And if so, they can impose their own exclusion sanctions. While this may sound complicated, the following CMS diagram explains how the process is intended to work. And the fact is, it does work in many states.
III. The Role of Managed Care Plans in Screening:
Since providers must contract and credential with managed care plans to qualify as a participating provider, they should keep in mind that they provide almost all of the Medicaid services in Pennsylvania (92%) and over half of the Medicare beneficiaries (54%).
Also, since both Medicaid Managed Care Organizations (MCOs) and Medicare Advantage plans that employ or contract with excluded entities risk the imposition of civil penalties for each violation (up to $59,316 for MCOs and $46,102 for MA Plans (42 CFR 1003.400, 42 CFR 1003.410), Providers are advised to pay serious attention to any screening obligations that may arise out of their contractual relationships with the plans.
IV. Exclusion / Preclusion Screening Basics:
There are three basic questions relevant to screening: Which databases to screen? Who are the individuals and which entities must be screened? How often should these databases be screened?
A. Which Databases Should be Screened?
At a minimum, providers should comply with Pennsylvania Medicaid Bulletin #99-11-05. It states that providers should screen and determine if any of their employees or contractors are listed on any of the following databases:
- The Office of Inspector General – List of Excluded Individuals and Entities (LEIE).
- Pennsylvania Precluded Provider List (Medicheck).
- Excluded Party List of the General Services Administration (which is now known as the General Services Administration/System for Award Management List, or simply, GSA/SAM).
There are, however, several reasons from compliance, risk mitigation and legal perspectives that strongly advocate the addition of all of the other State exclusion lists to those listed above. One of the most important reasons for screening States lists is that PA 55 § 1101.42(c), Prerequisites for Participation clearly states that if someone is excluded in another State that person is simply not eligible to participate in Pennsylvania’s Medical Assistance Program. Here is what the statute says:
Providers or applicants ineligible for program participation:
Providers whose provider agreements have been terminated by the Department or who have been excluded from the Medicare program or any other state’s Medicaid program are not eligible to participatein this Commonwealth’s MA Program during the period of their termination.(Emphasis added).
Another strong reason for screening other states is that the standard language in most Medicaid Managed Care Provider Manuals states that they will not make payments for services provided by a “Sanctioned Person.” And here is how sanctioned persons are typically defined:
A Sanctioned Person is defined as any person or affiliate of a person who (i) is debarred, suspended or excluded from participation in Medicare, Medicaid, the State Children’s Health Insurance Program (SCHIP) or any other Federal health care program; (ii) convicted of a criminal offense related to the delivery of items or services under the Medicare or Medicaid program; or (iii) had any disciplinary action taken against any professional license or certification held in any state or U.S. territory, including disciplinary action, board consent order, suspension, revocation, or voluntary surrender of a license or certification. (Emphasis added).
The disclosure requirements that are part of enrolling in Pennsylvania’s Medical Assistance Program should also be considered. Applicants must identify all owners, agents and managing employees and disclose whether they have been “terminated, excluded, precluded, suspended, debarred from or had their participation in any federal or state health care program.” This disclosure can only be answered by screening the individuals who meet these terms, and their definitions are extremely broad.
Managing employee means a general manager, business manager, administrator, director, or other individual who exercises operational or managerial control over, or who directly or indirectly conducts the day-to-day operation of an institution, organization. Agency and agent means any person who has been delegated the authority to obligate or act on behalf of a provider.
Providers should also consider the value of screening all States from a compliance and risk management perspective. The point of compliance and risk management is to be proactive – to avoid trouble before it happens — so would you really want to hire someone who is already on another State’s termination or exclusion list? After all, such a person is very likely to eventually end up on the LEIE and/or the Pennsylvania Precluded Provider List – why wait for that to happen?
As a final note on which databases to include, it is suggested that readers might want to consider screening the Social Security Death Master File. A good discussion of what the file is and why one may want to screen it can be found here: Why Should We Screen Against the Social Security Administration Death Master File?
B. Who Should I Screen?
Employees, Contractors, and Vendors.
Since providers are responsible for ensuring that none of their employees or the entities they do business with are excluded or terminated, they are well advised to cast a wide net when determining who to screen. Providers should start by including all direct employees on their screening list regardless of how remote their job description is to the submission of claims because it is simply too difficult and time-consuming to consider each job description and position separately. The only exception to this might be for providers with distinctly separate service or product silos that are completely unrelated to health care, but even this should be done carefully and with the advice of counsel.
When choosing which vendors or contractors to screen, providers should consider whether they pose a risk of harm to patients and how closely connected they are to claims. The OIG has stated that these are its principal areas of concern, and the higher the risk, the more likely it is that they should be added to the screening list. For example, staffing companies and the people they provide are high on both concerns and both the company and the people they provide should be screened. Conversely, the cable company is at the very low end of both concerns.
The OIG advises providers to request or demand that their vendors and contractors screen and provide proof thereof, but depending on size and bargaining power, this is often impractical and/or unrealistic. Still, providers should always screen all of their vendors and contractors that are connected to claims or patients, as well as their owners and any regular employees that impact care or payment.
Providers that need orders, certifications or referrals (such as pharmacies, labs, home health agencies, etc.) should also screen the sources that provide them. An excluded physician might legally be able to write a prescription if he still has a valid license and a pharmacy might be able to legally fill that prescription, no claim to Medicare or Medicaid could be made for that drug or item because an excluded party would have directly or indirectly contributed to the submission of the claim.
Owners, Agents, and Managing Directors Must also be Screened.
Providers must identify all owners of the entity (of 5% or more), officers, directors, agents and managing employees when they apply to enroll in Pennsylvania’s Medical Assistance Program. They must also disclose whether they have: “Been terminated, excluded, precluded, suspended, debarred from or had their participation in any federal or state health care program limited in any way, including voluntary withdrawal from a program.” This requirement is consistent with 42 § 438.602(d), and 42 § 438.602(d). As mentioned earlier, the broad definitions associated with this requirement should be kept in mind.
Special Rules for Billers and Coders.
Not surprisingly, employed billers and third-party billing companies receive “special attention” when it comes to exclusion screening. This recognizes both the complexity of billing and the likelihood that providers may have to delegate some or all of their billing outside of the practice. And while the OIG has issued guidelines (found below) for screening billers, as is always the case, the OIG makes clear that the provider remains legally responsible for their exclusion status and for any overpayment liability.
- The provider should require 3rd party billers to have a policy of not employing excluded persons.
- 3rd Party billers should be required to screen upon hire and monthly thereafter.
- 3rd Party Billers should be required to maintain documentation of its screening.
- The Provider should require that a 3rd party biller to provide training to its employees in connection with the applicable requirements and preparation of the claims they are submitting.
While a provider may still be responsible for any overpayments, if it follows these requirements, it is extremely unlikely that any civil money penalties would be imposed.
C. How Often Should Screening be Done?
This is the one easy answer when it comes to screening. Pennsylvania’s Medical Assistance Program, the Office of Inspector General, CMS, and all relevant regulations and guidance require screening upon hire and monthly thereafter. See, for example, 42 CFR 1001.1901(b), PA 99-11-05 Medical Assistance Bulletin, CMS State Medicaid Director Letters #08-003 and #09-001, the 2013 OIG Special Advisory on the Effect of Exclusion from Participation in Federal Health Programs – and many other authorities.
V. What is the Best Way to Accomplish Screening? Can I do it on my own?
Providers are best served by screening with the assistance of a third-party vendor. This is particularly true for large and mid-sized providers, but small providers also benefit greatly. Here are just some of the reasons why this is the case:
- The databases to be screened are extremely large. In order to screen just the GSA/SAM, the LEIE and Pennsylvania’s Medicheck (Precluded Provider) List, a provider must compare his list of employees, vendors and contractors against a total of almost a quarter of a million names! A of December in 2023, the GSA/SAM had almost 150,000 entries, the LEIE had just shy of 78,000 and the Medicheck Preclusion list had almost 5800 names listed.
- In addition to being large databases, they are also formatted differently with different information/ As such, a provider would need special analytical tools to screen them.
- The databases also change each month; some names are added, others are deleted. As such, it cannot be taken for granted that someone who “passed” last month will pass again this month.
- Monthly screening takes an employee away from doing something related to providing care.
- Providers that want to screen all of the State Exclusion Lists (currently, 43) face the following obstacles: The lists vary in format (some are posted in excel, others in WORD and still others are in PDF); some have very limited information; they are updated irregularly; and, from time to time, have actually changed the internet URL on which they were posted.
In contrast, a vendor such as Exclusion Screening can make the process easy and very cost effect. Providers simply update their lists each month, and in my experience the cost of screening has always been LESS than the cost of the waiting room water!
VI. Closing Comments:
The goal of this article has been to help providers in Pennsylvania gain an understanding of both State based Preclusions / Terminations and Federal exclusions. We have focused on the process and obligations associated with provider screening. However, if after reading this article you have any questions or concerns about exclusions or exclusion screening, please do not hesitate to give us a call.
The experienced professionals at Exclusion Screening can help. Call us for a complimentary consultation to discuss your sanction monitoring needs. Exclusion Screening is the ONLY screening company developed by nationally recognized former Federal prosecutors with your regulatory compliance needs in mind. We can be reached at 1 (800) 294-0952.