A Provider’s Guide to OIG ExclusionsFederal Exclusion Regulations and Enforcement Authorities, and How Providers Can Avoid Risk with Proper Exclusion Screening–Part 1
Paul S. Weidenfeld, JD
ABOUT THE AUTHOR
“OIG” in this paper refers to “Office of Inspector General, Department of Health and Human Services” unless otherwise stated. The term “OIG Exclusion” is used as shorthand for an administrative action taken by the OIG barring an individual or entity from participating in Federal health care programs pursuant to §1128(a)(1)-(4), (b)(1)-(b)(16) or §1156 of the Social Security Act (SSA).
 This article focuses on exclusions from a regulatory and enforcement perspective, but exclusions also play a critical role in compliance and risk management programs. See, e.g., HCCA, Measuring Compliance Program Effectiveness: A Resource Guide (Jan. 2017), available at ttps://oig.hhs.gov/compliance/compliance-resource-portal/files/HCCA-OIG-Resource-Guide.pdf. (guidance reconfigures the traditional “Seven Elements of an Effective Compliance Program” and makes the “Screening and Evaluation of Employees, Physicians, Vendors and other Agents” an element unto itself – or the new “Seventh Element of Compliance”).
 The Medicare-Medicaid Anti-Fraud and Abuse Amendments of 1977, Public Law 95–142. In 1979, the Department of Health Education and Welfare was renamed the Department of Health and Human Services (HHS).
See e.g. Crackdown on Health Care Fraud, https://www.nytimes.com/1995/12/22/us/in-crackdown-on-health-care-fraud-us-focuses-on-training-hospitals-and-clinics.html.
 In addition to establishing the principle of insurance portability, HIPAA contained several provisions related to health care fraud enforcement, including containing legislation that significantly increased the ability of law enforcement agencies to obtain and share information and establishing the Health Care Fraud and Abuse Fund (HCFAC) as a permanent funding source specifically designated for health care fraud enforcement.
 The effect of an OIG Exclusion is addressed in the Special Advisory Bulletin on the Effects of Exclusion from Federal Health Care Programs,” issued September 2, 1999, and in the “Updated Special Advisory Bulletin on the Effect of Exclusions from Participation in Federal Health Care Programs,” issued May 8, 2013. Hereinafter, the initial advisory will be referred to as the “1999 Special Advisory” and the update will be referred to as the “Updated Special Advisory” or the “2013 Special Advisory.” The 1999 Special Advisory can be found at: https://oig.hhs.gov/fraud/docs/alertsandbulletins/effected.htm; the 2013 Updated Special Advisory can be found at https://oig.hhs.gov/exclusions/files/sab-05092013.pdf.
 Inspector General June Gibbs Brown, in the press release for the 1999 Special Advisory.
 See 42 C.F.R. § 1001.10. Definitional changes were made to direct and indirect claims pursuant to rulemaking authority granted to the OIG in the MMA and the ACA; See also, OIG Advisory Opinion No. 18-01 at 5 (Feb. 20, 2018) available at https://oig.hhs.gov/fraud/docs/advisoryopinions/2018/AdvOpn18-01.pdf.
 The Data in the figures in this section come from the exclusion data reportered in the List of Excluded Individuals/Entities (LEIE) by calendar year.
 The data in the charts in this section comes from exclusion data reported in the List of Excluded Individuals/Entities (LEIE).
 These calculatiosn are based on the composition of the LEIE through December 31, 2017.
 See, §§ 1128(c)(3)(G)(i) and (G)ii of the SSA. See also 82 Fed. Reg. 4100.
 See https://oig.hhs.gov
 See Criteria for implementing section 1128(b)(7) exclusion authority (April 18, 2016) available at https://oig.hhs.gov/exclusions/files/1128b7exclusion-criteria.pdf. The OIG breaks these down into “high risk factors,” “low risk factors,” and factors that have “no effect.” High risk factors include the impact on beneficiaries cooperation, and whether an adverse licensing action occurred. “Lower risk” factors include acceptance of responsibility and self-disclosure. Factors that are “expected,” and thsu have “no effect”, are coopearation in the investigation and having a compliance plan with the seven elements of compliance.
 See Guidance for the Implentation of its Permissive Exclusion Authority Under Sectino 1128(b)(15) at 1, available at https://oig.hhs.gov/fraud/exclusions/files/permissive_excl_under_1128b15_10192010.pdf. The guidance was issued because 1128(b)(15) provides for exclusion based on whether the individual in question is either an owner or an officer or a managing employee and the analysis is different for each.
 Criteria for implementing section 1128(b)(7) exlcusion authority (April 18, 2016) avialable at https://oig.hhs.gov/exclusions/files/1128b7exclusion-criteria.pdf.See also 81 Fed. Reg. 88, 334 (Dec. 7, 2016): “In 1981, Congress enacted the CMPL, section 1128A of the Act (42 U.S.C. §1320a-7a), as one of several administrative remedies to combat fraud and abuse in Medicare and medicaid”
Id. 81 Fed. Reg. at 88.
 This is a listing of the CMP authorities related to exclusion violations. A complete listing of the OIGs CMP authorities can be found on the OIG’s website, or at 42 C.F.R. § 1003.210.
 The OIG may also impose a penalty or, when applicable, an assessment, against a Medicare Advantage or Part D contracting organization with a contract under section 1857 or 1860D-12 of the SSA if any of its employees, agents, or contracting providers violate § 1003.400(a) – (d).
 The penalty amounts for CMPs and assessments are updated annually and are published at 45 C.F.R. § 102.
 A discussion of the change is found in 81 Fed. Reg. 88, 334 (Dec. 7, 2016).
 See 42 CFR § 1004.140(c); see also Criteria for implementing section 1128(b)(7) exclusion authority (April 18, 2016), available at https://oig.hhs.gov/exclusions/files/1128b7exclusion-criteria.pdf..
See § 3729(a)(1) of the Fraud Enforcement Recovery Act of 2009 and § 6401of the Affordable Care Act (2010).
OIG has been busy cracking down on providers who employ or contract with excluded persons or contractors. In fact, by the end of July OIG settled 27 exclusion violation cases through investigations or self-disclosures. By way of reminder, there were 60 enforcement actions related to OIG exclusion violations in 2014. Following is our 2015 mid-year review of OIG’s enforcement against those who employ or contract with excluded providers.
Civil Monetary Penalties
In six months, OIG recouped $3.79 million from providers who knew or should have known that an employee was excluded from participation in the federal health care programs. A third of the settlements in the past six months resulted in payments between $100,000 and $250,000 per provider. The Civil Monetary Penalties (CMPs) returned in each enforcement action range from $10,000 to $431,000 and an overwhelming majority of the cases only involve one excluded individual. In fact, only 4 of the 27 enforcement actions this year involved more than one excluded provider. This goes to show that the penalty a provider may face for employing or contracting an excluded person varies widely depending on exactly how many items or services that person provided.
One trend that remains steady is that nursing homes continue to be the industry hit the hardest with enforcement actions. Following behind nursing homes were hospitals and home health agencies with four enforcement actions each so far this year. We expect that nursing homes and home health agencies will remain hot beds for OIG exclusion enforcement action as the year progresses.
One area where 2015 enforcement actions depart from 2014 is the states in which OIG has imposed CMP liability. Texas and California were still hit hard, but Minnesota actually surpassed California with three enforcement actions in the first half of 2015. Virginia has also been under OIG’s microscope, with three enforcement action settlements this year, making quite the jump from just one in 2014. We have also seen enforcement action in states that did not have any issues in 2014 like Alabama, Illinois, Indiana, Maryland, and Washington.
While we try to draw comparisons to shed light on OIG’s exclusion enforcement action focus, the fact of the matter is that OIG exclusion enforcement is here to stay. Nursing homes continue to be a target and the cost of employing just one excluded individual is hefty. The risks associated with failing to properly screen your employees and contractors is far too high and drastically outweighs the cost of properly screening against all available State and Federal lists monthly.
Contact Exclusion Screening, LLCSM today for a free consultation at 1-800-294-0952 or fill out the form below.
Also read more on OIG Exclusion
I. Gains in State Exclusion Enforcement Efforts Highlighted
The Office of the Inspector General’s (OIG) annual Report for the State Medicaid Fraud Control Units (MCFUs),1 released earlier this week, announced that one third of all OIG Exclusions (1,337 of 4,017) were the result of MFCU investigations, prosecutions, and convictions. We also note that licensure revocations and patient abuse (both primarily State related issues) accounted for an additional 1,933 exclusions at 1,744 and 189 respectively according to the HCFAC report issued in March. State issues and State efforts were a large percentage of last year’s exclusions.
II. State Initiated Exclusion by MFCU
The Annual Report also highlighted a State initiated exclusion in which the West Virginia MFCU entered into a civil agreement with the owner of a durable medical equipment (DME) company. The DME company allegedly collaborated with an excluded provider to bill both Medicare and Medicaid for back braces that were provided by the excluded company. After submitting the charges to Medicare and Medicaid, the DME company allegedly kept ½ of the reimbursement and passed the remaining monies on to the excluded company using false invoices to support the billing.
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.
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: email@example.com or 1-800-294-0952.
 State Medicaid Fraud Control Units (MFCUs) investigate and prosecute Medicaid provider fraud and patient abuse and neglect in health care facilities or board and care facilities in their respective states. They are governmental entities but they must be separate and independent from the State Medicaid Program. The annual reports are prepared in conjunction with the OIG’s oversight responsibility for the Units, and are used in part to determine whether or not to re-certify the various units.