Can a Medicare Provider or Supplier Hire an Excluded Individual or Enter in a Contract with an Excluded Entity?

Hiring Federally Excluded Individuals(October 9, 2019):  Should you choose to participate in the Medicare and / or Medicaid programs, you must comply with a wide variety of program integrity requirements. One obligation in particular is often missed by physician practices, home health agencies, hospices and laboratories – the “screening” of employees, contractors and agents to ensure that the provider or supplier has not employed or entered into a business relationship with an individual or entity that has been excluded from participation in Federal health care programs.[1]  Does that mean that a Medicare provider can never employ an excluded individual or entity?  Not necessarily.  In this article, we will examine how the Department of Health & Human Services (HHS), Office of Inspector General (OIG) has interpreted the impact and scope of an exclusion action.

I. How Did Your Exclusion Screening Obligations Arise?

When reviewing mandatory exclusion screening obligations with health care providers and suppliers, we are regularly asked – How did this obligation arise?  As described below, as a participating provider in the Medicare and / or Medicaid program, you have been prohibited from employing (or contracting with) any individual or entity that has been excluded from participation in Federal health benefit programs for more than 40 years. A brief overview of the evolution of your statutory and regulatory exclusion screening obligation is set out below:
  • Medicare-Medicaid Anti-Fraud and Abuse Amendments. The statutory basis for the mandatory exclusion (from Medicare, Medicaid and other Federal health care programs) of physicians and other practitioners convicted of certain crimes was first enacted as part of the “Medicare-Medicaid Anti-Fraud and Abuse Amendments”[2]of 1977.  
  • Civil Monetary Penalties Law. The initial 1977 legislation discussed above was soon followed in 1981 by passage of the “Civil Monetary Penalties Law,”[3] which authorized the OIG to impose Civil Monetary Penalties (CMPs), assessments, and program exclusion actions against any party that submitted false, fraudulent or improper claims to Medicare or Medicaid for payment.
  • Medicare and Medicaid Patient and Program Protection Act.  In 1987, Congress passed legislation which expanded the OIG’s administrative authorities.  Section 1128(a) of the Act[4] outlined a number of adverse actions[5] which mandated the exclusion of an individual or entity from participation in Federal health care programs.  The agency’s expanded authorities included the establishment of additional mandatory and discretionary basis’ for excluding individuals or entities.  Finally, Section 214 set out the minimum period of exclusion that could be assessed against “practitioners and persons failing to meet statutory obligations.”
  • Health Insurance Portability and Accountability Act (HIPAA).[6]  Among its many landmark privacy and enforcement provisions, HIPAA also included statutory provisions related to the permissive exclusion of individuals and entities. For instance, under Section 212, the legislation established a minimum period of exclusion for certain individuals and entities subject to permissive exclusion from Medicare and State health care programs.  Additionally, Section 213 covers the permissive exclusion of individuals with ownership or a controlling interest in sanctioned entities.   
  • Balanced Budget Act (BBA of 1997).[7]  Under the BBA of 1997, Congress expanded the authorities under which an individual or entity could be excluded from participating in Medicare, Medicaid and other Federal health care programs. For instance, under Section 4301, individuals convicted of three or more health care related crimes became subject to permanent exclusion and pursuant to Section 4302, the Secretary could refuse to enter into Medicare agreements with individuals or entities convicted of felonies.  Finally, Section 4303 revised the Act to permit the Secretary of HHS (through the OIG), to exclude entities controlled by a family member of a sanctioned individual.  The BBA of 1997 also amended the CMPs that could be assessed against persons that contract with excluded individuals.
Hiring Excluded Individuals
  • Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs.[8]  This guidance was issued in an effort to help “affected parties better understand the scope of payment prohibitions that apply to items and services provided to Federal program beneficiaries, and to provide guidance to individuals and entities that have been excluded from the Federal health care programs and to those who employ or contract with an excluded individual or entity to provide such items or services.”
  • Medicare Prescription Drug, Improvement, and Modernization Act of 2003.[9]  Under 42 USC 1314, Section 949, the Secretary, HHS (after consulting with the OIG) was given the authority to waive the exclusion of an individual or entity if the “individual or entity is the sole community physician or sole source of essential specialized services in a community,” AND the party’s exclusion would impose a hardship on individuals entitled to benefits.
  • Solicitation of Information and Recommendations for Supplementing the Guidance Provided in the Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs. In November 2010, the OIG published a notice in the Federal Register, advising the public that it intended to update its 1999 guidance, “Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs,” and it sought comments from the public with respect to the development of the updated guidance.  As the request for comments noted:
With time it has become even more apparent that exclusion has a significant impact, not only on those who have been excluded but also on entities that have employed or contracted with excluded persons and been faced with liability for overpayments and civil monetary penalties as a result. As OIG’s compliance and enforcement activities in this area have increased, many health care providers have discovered that they employ excluded individuals and have self-disclosed to the OIG.”[10]
  • Patient Protection and Affordable Care Act of 2010.[11] Under Section 6401, the Affordable Care Act imposed increased disclosure requirements on health care providers and supplier participating in the Medicare, Medicaid and / or CHIP programs.[12]  Among the new disclosure requirements was the fact that excluded “affiliations” now had to be disclosed to CMS. 
  • Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs (Special Advisory Bulletin).[13]  In May 2013, the OIG released an updated Special Advisory Bulletin addressing the effect of exclusion from participation in Federal health care programs. The updated 2013 guidance goes into considerable detail describing the scope and effect of an exclusion action items or services furnished (1) by an excluded person, or (2) at the medical direction or on the prescription of an excluded person.  The guidance also discusses the scope and frequency of a provider’s screening obligations.

II. What is the Practical Effect of Exclusion from Federal Health Care Programs:

Simply stated, an exclusion action is perhaps the most severe administrative remedy that can be imposed on an individual or entity by the OIG. If an individual is excluded by the OIG from participating in Medicare, Medicaid and other Federal health care programs, he or she cannot be hired or contracted to work for any entity that participates in any of these programs. From a practical standpoint, the government does not want any Federal health care monies to be used to pay any of the salary or benefits of an excluded individual.  This “payment prohibition” serves as complete ban and applies to all methods of Federal program reimbursement” regardless of whether the reimbursement results from an itemized claim, an entry on a cost report or is included in a capitated payment to an entity.[14]  As the OIG’s 2013 Special Advisory Bulletin notes, the broad payment prohibition applied to excluded parties includes, but is not limited to the following:
  • Management, administrative or any leadership roles;
  • Surgical support or other activities that indirectly support care; 
  • Claims processing and information technology; 
  • Transportation services including ambulance company dispatchers;
  • Selling, delivering or refilling orders for medical devices
 
Notably, even the work of an unpaid volunteer who is an excluded party can trigger CMP liability if the services provided are not “wholly unrelated to Federal Health Care Programs.” [15]  In consideration of these broad prohibitions, you may ask “Can a Medicare provider ever hire an excluded individual”?  As discussed below, there are only four limited circumstances under which a participating provider can hire an excluded individual and avoid overpayment and CMP liability.  Moreover, it is very difficult to qualify for any of the exceptions that have been identified.

III. When Can a Medicare Provider or Supplier Employ an Excluded Individual?

Exception #1If Federal health care programs do not pay, either directly or indirectly, for any of the items or services being provided by the excluded individual, then a participating provider may employ or contract with an excluded person to provide those items or services.[16]    Unfortunately, this exception is far easier to describe than it is to appropriately arrange.  Two challenges immediately arise.  First, how will a participating provider be able to ensure that an excluded party will not be paid, either directly or indirectly, with reimbursement monies paid by Medicare, Medicaid and / or another Federal health benefits program? Second, how can a participating provider ensure that all of the items or services provided by an excluded individual “relate solely to non-Federal health benefit program patients?”  [17]

Exception #2If an employer employs or contracts with an excluded person to furnish items or services solely to non-Federal health care beneficiaries, a participating provider would not be subject to CMP liability.  As in the first example, this business arrangement is theoretically possible but would likely provide difficult to properly execute.  Prior to entering into this type of arrangement, we strongly recommend that the participating provide seek an Advisory Opinion from the OIG to verify that the duties, structure and payment practices would not trigger CMP liability.

Exception #3Seek an exclusion “Waiver” under Section 1128A(i)(5) of the Act. At the outset, it is important to note that an excluded individual does not have the authority to “request” a waiver of his or her exclusion action by the OIG.  If a mandatory exclusion action is based on violation of 42 CFR §1001.101(a), (c) or (d), the Administrator of a Federal health care program has the authority to request an exclusion waiver from the OIG.[18]  However, even the Federal health care Administrator does not the authority to seek an exclusion waiver if the exclusion action has been based on a conviction under Federal or State law of a criminal offense related to the neglect or abuse of a patient (as outlined under 42 CFR §1001.101(b)). 
In order to request an exclusion waiver from the OIG, the Administrator of a Federal health care program must first determine that:
“(1) The individual or entity is the sole community physician or the sole source of essential specialized services in a community; and
(2) The exclusion would impose a hardship on beneficiaries (as defined in section 1128A(i)(5) of the Act) of that program.”
If an exclusion action has been based on one of the OIG’s permissive exclusion authorities, the OIG can only grant a waiver of the exclusion action if the agency determines that imposition of the exclusion would not be in the public interest.[19] 

Exception #4:  Seek an Advisory Opinion from the OIG.  To the extent that you believe that a proposed arrangement which contemplates the employment of an excluded individual would not constitute grounds for the imposition of CMP sanctions, you may submit a request for an Advisory Opinion from the OIG.  From our review, it appears that there have only been three Advisory Opinion requests seeking guidance from the OIG on this issue since the issuance of the initial guidance in 1998.  Two of the Advisory Opinions involved the proposed employment of an excluded individual and the remaining Advisory Opinion examined whether a participating provider could purchase real estate that was owned and managed, in part, by an excluded individual.  The three Advisory Opinions examining the excluded party issue include:  
  • OIG Advisory Opinion No. 01-16: Issued September 2001 / Posted October 5, 2001.
  • OIG Advisory Opinion No. 03-01: Issued January 13, 2003 / Posted January 21, 2003.
  • OIG Advisory Opinion No. 19-05: Issued September 6, 2019 / Posted September 11, 2019.
Notably, the OIG held that none of the three proposed arrangements involving an excluded party would give rise to CMP sanctions. Before you jump to conclusions, however, we recommend that you read the specific factual scenarios involved in each of the requests for Advisory Opinion.  None of the proposed arrangements encompass situations that would be controversial or questionable in light of the financial and reimbursement relationship between the participating provider and the excluded individual.

IV. Recommendations for Medicare Providers Seeking to Employ an Excluded Party:

As a general rule, a Medicare provider cannot employ an excluded party. Yes, there are exceptions to this rule, but as described above, each of the primary exceptions discussed are quite narrow in scope and involve very fact specific scenarios where an excluded individual would not be providing services to Medicare beneficiaries and would not be paid, directly or indirectly from monies received in reimbursement from Medicare, Medicaid or Federal health care program claims.  It is important to keep in mind that only Exception #3 (Seeking a Waiver) and Exception #4 (Requesting an Advisory Opinion) offer any real opportunity to reduce the high level of risk that you will face if choose to employ an excluded individual or enter into a contract with an excluded entity. 

Exception #1 and Exception #2 are cited by the OIG in its 2013 Special Advisory Bulletin as possible factual scenarios where it may be possible to employ an excluded individual in a position that is sufficiently walled-off from the provision of services to Federal health care program beneficiaries, where no Federal funds are used to pay the individual’s salary, benefits, overhead and other costs. Unfortunately, even if such a position may initially be possible, over time there is a real possibility that the such barriers will erode.  Should this occur, your organization may face significant CMPs, possible False Claims Act penalties and damages, and other adverse administrative actions.  The bottom line is simple:

It is a Bad Idea to Try and Support the Employment of an Excluded Individual Based on the Reasoning Set out in Exception #1 and / or Exception #2.
 
Should you choose to proceed down this path, we strongly recommend that you contact experienced health law counsel (such as the folks at Liles Parker PLLC) for guidance and to determine if such as seeking a waiver or requesting an Advisory Opinion, a viable alternative with considerably less risk.

In the meantime, it is essential that you ensure that your employees, contractors, agents and vendors have not been excluded from participating in the Medicare, Medicaid or other Federal health care programs.   The folks at Exclusion Screening can help.  Give us a call at:  1 (800) 294-0952.



[1] Now codified at Section 1128B(f) of the Social Security Act (the Act), the term “Federal health care program” means:
“(1) any plan or program that provides health benefits, whether directly, through insurance, or otherwise, which is funded directly, in whole or in part, by the United States Government (other than the health insurance program under chapter 89 of title 5, United States Code); or
(2) any State health care program, as defined in section 1128(h).”
[5] Generally, these mandatory exclusion actions included: (1) Conviction of Program-Related Crimes, and (2) Conviction Relating to Patient Abuse.  The legislation also covered a number of “permissive” exclusion actions.  These included:  (1) Conviction Related to Fraud; (2) Conviction Related to Obstruction of an Investigation; (3) Conviction Related to Controlled Substance; (4) License Revocation or Suspension; (5) Exclusion or Suspension Under Federal or State Health Care Program; (6) Claims for Excessive Charges or Unnecessary Services and Failure of Certain Organizations to Furnish Medically Necessary Services; (7) Fraud, Kickbacks and other Prohibited Practices; (8) Entities Controlled by a Sanctioned Individual; and (9) Failure to Disclose Required Information; (10) Failure to Supply Requested Information on Subcontractors of Suppliers; (11) Failure to Supply Payment Information; (12) Failure to Grant Immediate Access; (13) Failure to Take Corrective Action; and, (14) Default of Health Education Loan or Scholarship Obligations.
[6] Health Insurance Portability and Accountability Act of 1996, Public Law 104-191.  (August 21, 1996). 
[7] Balanced Budget Act (BBA) of 1997, Public Law 105–33.
[8] 64 FR 52791 (September 30, 1999).
[9] Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Public Law 108-173.  (December 8, 2003).
[10] 74 FR 69452, 69453 (November 10, 2010).
[11] Patient Protection and Affordable Care Act of 2010, Public Law 111-148. June 9, 2010.
[12] For a more detailed discussion on these disclosure requirements, see the article outlining the Final Rule entitled “Medicare, Medicaid, and Children’s Health Insurance Programs; Program Integrity Enhancements to the Provider Enrollment Process.” 
[13] Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs.  Issued May 8, 2013.
[14] Ibid, at pgs. 6 and 7.
[15] Ibid, at pgs. 11 and 12.
[16] Ibid, at pg. 12.
[17] Id.
[18] 42 CFR 1001.1801(a).
[19] 42 CFR 1001.1801(c).

Pennsylvania Doctor Excluded in Connection with Quality of Care


(September 26, 2019): 
Over the past year, both State and Federal law enforcement investigators and prosecutors have gone to considerable lengths to publicize the government’s fight against opioid abuse.  While much of this fight has focused on the manufacturers of prescription opioid products, the improper prescribing practices of physicians and other medical professionals found to be prescribing these drugs “without any legitimate purpose and outside the usual course of professional practice” have been repeatedly highlighted in criminal prosecutions by U.S. Attorney’s Offices around the country.  A recent case against a Philadelphia-area cardiologist provides a classic example of how improper opioid prescribing practices can lead to criminal prosecution, civil penalties AND severe administrative sanctions (in this case, exclusion from participation in Federal health care programs).  The article examines how the cardiologists was identified and steps you should take to reduce your level of risk in this regard.

 I. Background of the Case:

Like many big cities, Philadelphia has a problem with illegal drugs.  Despite the city’s efforts to curb illicit drug use, unintentional drug overdoses have steadily grown since 2010 and have only slightly tapered-off from their all-time high since 2017.[1]

Social Security Act 1128(b)(6)
While the percentage of opioid-related deaths changes from quarter to quarter, it is estimated that approximately 80% of all unintentional drug deaths in Philadelphia are due to opioid misuse and overdose.  In response to the opioid abuse crisis in Philadelphia and other areas of the country, a multi-agency team of Federal and State investigators and prosecutors, known as the Medicare Fraud Strike Force[2] (Philadelphia Strike Force) has been targeting physicians, nurse practitioners and other medical professionals who have been improperly prescribing and / or distributing opioids.  In this particular case, the prescribing practices of this Philadelphia cardiologist (defendant) were identified by the Philadelphia Strike Force as warranting further review.  Upon investigation, the government alleged that from 2016 to 2018, the defendant wrote a number of prescriptions for oxycodone and / or benzodiazepine to patients without a legitimate medical purpose.  

In light of the allegations presented, the U.S. Attorney’s Office pursued both civil and criminal claims against the cardiologist.  It is important to keep in mind that the Department of Justice has long instructed its prosecutors to pursue parallel criminal and civil actions against a defendant, when appropriate.  As Title 9, Section 27 of the Justice Manual[3] provides:

Department policy is that criminal prosecutors and civil trial counsel should timely communicate, coordinate, and cooperate with one another and agency attorneys to the fullest extent appropriate to the case and permissible by law, whenever an alleged offense or violation of federal law gives rise to the potential for criminal, civil, regulatory, and/or agency administrative parallel (simultaneous or successive) proceedings. By working together in this way, the Department can better protect the government’s interests (including deterrence of future misconduct and restoration of program integrity) and secure the full range of the government’s remedies (including incarceration, fines, penalties, damages, restitution to victims, asset seizure, civil and criminal forfeiture, and exclusion and debarment).”  (emphasis added). 

The Justice Manual guidance further notes that:
“Courts have recognized that “[t]here is nothing improper about the government undertaking simultaneous criminal and civil investigations provided that we use those proceedings and associated investigative tools for their proper purposes and in appropriate ways.”  (emphasis added).

II. Criminal Prosecution for Violations of 21 USC §841(a)(1) and (b)(1)(C):

In March 2019, the defendant pleaded guilty to eight felony counts of the unlawful distribution and dispensing of a controlled substance, in violation of 21 USC §841(a)(1) and (b)(1)(C).   The defendant’s sentencing is scheduled to take place later this year.  As a result of the criminal conviction, the defendant may be sentenced to prison for a significant period of time AND assessed criminal fines for his unlawful conduct.

III.  Civil Liability under the False Claims Act, 31 USC §3729:

Notably, it does not appear that the defendant entered into a “global” settlement at the time he decided to plead guilty to the criminal charges discussed above.  As a result, any civil and / or administrative actions that the government might choose to pursue remained active.  On July 1, 2019, the defendant agreed to enter into a False Claims Act settlement with the government and pay $107,584 in penalties and damages to the government.   

IV. Administrative Actions Taken Against the Defendant:

As part of his civil settlement reached with the government, the defendant cardiologist agreed to:
  • Surrender his medical license and Drug Enforcement Administration Certificate of Registration and further agreed not to seek to renew or reinstate either one in the future.
  • Be excluded from participation in Federal Health programs.
As HHS-OIG’s records reflects, the defendant was excluded from participation in Federal health care programs on July 18, 2019.  The basis for exclusion cited by the government is Section 1128(b)(6) of the Social Security Act – Quality of Care.

As you will recall, under Section 1128 of the Social Security Act, if an individual or entity is convicted of certain crimes, the Department of Health and Human Services (HHS), Office of Inspector General (OIG) is required by law to exclude the individual or entity from participation in Federal health care programs.  These types of actions are referred to as “Mandatory Exclusions.”  The bases for imposing a mandatory exclusion are set out in Section 1128(a)(1) through Section 1128(c)(3)(G)(ii).  In contrast to mandatory exclusion actions, there are also a number of “Permissive Exclusion” authorities that may be used (at the agency’s discretion) by HHS-OIG to bar an individual or entity from participating in Federal health benefit programs.  The permissive exclusion authorities that may be exercised by HHS-OIG are covered in the Social Security Act from Section 1128(b)(1)(A) through 1128(b)(16).  HSS-OIG may also exercise its permissive exclusion authority under Social Security Section 1156, if a provider fails to meet its obligations to provide medically necessary services that meet the professional recognized standards of care.
In this particular case, HHS-OIG chose to exercise its permissive exclusion authority under Section 1128(b)(6) of the Social Security Act – Quality of CareThis particular basis for excluding an individual or entity can be assessed if a defendant or target is alleged to have submitted:
“Claims for excessive charges, unnecessary services or services which fail to meet professionally recognized standards of health care, or failure of an HMO to furnish medically necessary services.”
Under this statutory provision, an individual or entity can be excluded for a minimum period of one year.  In light of the allegations presented, the defendant cardiologist was excluded from participation by HHS-OIG for a total of seven years.[4]

V. Impact of Medicare Exclusion on the Defendant’s Career:

As the case synopsis above reflects, Federal law enforcement prosecuted the defendant in this case to the full extent of their abilities.  In addition to facing incarceration, the defendant was also assessed penalties and damages of more than $107,000 under the False Claims Act.  While the criminal and civil actions taken against the defendant are quite serious, the cardiologist’s problems are further magnified by the fact that he has also been excluded from participation in Federal health care programs.  At the end of the day, it is quite conceivable that the U.S. Sentencing Guidelines, the defendant’s criminal sentence will be relatively brief.  Depending upon the terms of his civil / administrative settlement, he may be free to seek licensure in another state upon his release from jail. 

VI. Final Thoughts:

Even assuming that the defendant regains licensure in another state, the administrative exclusion action taken against him will effectively bar him from enrolling in Federal health care benefit programs for the entire period that he remains excluded.  While excluded, he will not be eligible to work for any provider or supplier who participates in one or more Federal health care plans.  Should a health care provider or supplier choose to employ the defendant (an excluded party), each of the claims submitted to Medicare, Medicaid and other government plans may be subject to significant civil monetary penalties. 

How can you protect your practice?  Consistent with your obligations under the law, it is imperative that you screen your employees, agents, contractors and vendors against all of the 43 exclusion databases currently in operation.  Unfortunately, it is practically impossible for a medical practice or other entity to screen one or more of its employees against all 43 databases.  Luckily, the folks at Exclusion Screening can take this time-consuming (and often frustrating) task off of your shoulders.  Give us a call at 1 (800) 294-0952 for a complimentary discussion of your screening needs and a quote.


[2] The government’s Medicare Fraud Strike Force is primarily composed of Federal agents and investigators of the Department of Health and Human Services, Office of Inspector General (HHS-OIG) and the Federal Bureau of Investigation (FBI), along with Federal prosecutors working for U.S. Attorneys Offices around the country.  First established in March 2007, the Strike Force has been instrumental in investigating and prosecuting cases of health care fraud, waste and abuse. 
[4] “Pennsylvania physician Agrees to Voluntary Exclusion” https://oig.hhs.gov/fraud/enforcement/cmp/cmp-ae.asp

Personal Care Service Aides and Attendants Excluded in 2017


personal care services (January 22, 2018): With 2017 behind us, it can be quite helpful to review the Medicare “exclusion” actions taken by the Department of Health and Human Services, Office of Inspector General (HHS-OIG) to gauge the level of regulatory exclusion risk presented by aides and attendants working for personal care agencies around the country.  As a review of these actions will show, personal care services aides and attendants were among the most frequent type of health care provider excluded from participating in Federal health care benefits program by HHS-OIG during calendar year 2017. 

It is therefore essential that owners of personal care agencies take affirmative steps to  ensure that they have robust, effective systems in prevent excluded individuals from being hired or otherwise engaged to care for Medicaid beneficiaries.  To accomplish this, agencies must screen their employees, vendors or contractors against all Federal and State exclusion lists every 30 days.  An overview of the 2017 exclusion actions taken against personal care aides and attendants is set out below.

 I. What is an “Exclusion” Action? 

The “exclusion” of individuals or entities from participation in Federally-funded programs is covered under § 1128 of the Social Security Act. When an individual or entity is excluded from participation, the excluded party is essentially barred from Federal health benefits programs. This makes them untouchable by almost any healthcare related entity. With the exception of losing one’s professional license (for instance, if you are a licensed physician, nurse or pharmacist), being excluded is the most severe administrative sanction that can be taken against an individual or entity.  Not only is an excluded party barred from participating in government health benefits programs, he / she cannot even work for a party that participates in one or more government health benefits programs.

 II. Overview of Personal Care Service Aides and Attendants “Excluded” During 2017” 

There are a number of mandatory and permissive authorities upon which HHS-OIG can base an exclusion action.  Depending on the reason for exclusion, an individual or entity can be excluded for an undetermined minimum period up to a permanent exclusion from participating in Federal health benefits programs. During 2017, a number of personal care aides and attendants were placed on HHS-OIG’s exclusion list.  The reasons for exclusion were primarily grouped into the categories for exclusion described below:   

42 U.S.C. § 1320a-7(a)(1): Conviction of program-related crimes 71.73% of all exclusions against personal care providers. Personal care providers were excluded under this mandatory exclusion statute more than any other type of exclusion. For reference only 40.13% of persons excluded across all areas of medical practice areas were excluded under this variety of exclusion. Of the cases reviewed, the personal care aides excluded under this statutory basis were most often charged with theft or billing for services not rendered.  For example, in one of the cases reviewed, a Virginia personal care attendant plead guilty to defrauding Medicaid. Over a four year span the attendant was alleged to have been billing Medicaid while out working at a part time job. The attendant in this case supposedly defrauded Medicaid thousands of dollars.  Since the individual was excluded under one of the “mandatory” statutory bases, the personal care attendant was excluded for a minimum of 5 years. This type of case comprised 71.73% of all personal care exclusions in 2017.

42 U.S.C. § 1320a-7(b)(5): Exclusion or suspension under federal or state health care program 18.06% of all exclusions against personal care providers.  Last year, HHS-OIG cited this statutory basis when excluding 18.06% of the personal care aides and attendants from participating in Federal health benefit programs. In comparison, this statutory basis was only cited in 3.17% of the universe of 2017 exclusions.

42 U.S.C. § 1320a-7(a)(3):  Felony conviction relating to health care fraud 1.83% of all exclusions against personal care providersIn 2017 1.83% of excluded personal care providers were excluded under this statute which is much smaller than the 7.59% rate of total.

42 U.S.C. § 1320a-7(a)(4): Felony conviction relating to controlled substance 26% of all exclusions against personal care providersThis category of exclusion is the rarest for personal care at .26% while it represents 5.97% of total healthcare exclusions. It generally describes highly overt incidents in which a provider was directly involved with the illegal acquisition or sale of controlled substances. Persons excluded under this statute are excluded for drug related crimes and generally including conspiracy, direct sale of controlled substances, or other means of improperly handling controlled substances.

 III.  Are Your Agency’s Screening Practices Exposing You to Civil Monetary Penalties? 

Personal Care Services
When considering your affirmative obligation to “screen” employees, contractors, vendors and other eligible parties against Federal and State exclusion lists, it is important to keep in mind that the government has been “excluding” physicians and other individuals and entities convicted from program related crimes from participating in the Medicare and Medicaid programs for more than 30 years.[1] With the subsequent passage of the Civil Monetary Penalties Law in 1981, HHS-OIG received statutory authorization to impose civil monetary penalties, issue assessments and pursue program exclusions actions against individuals and entities that submit false, fraudulent and / or improper claims for Medicare or Medicaid payment.[2]   

Simply speaking, an excluded person (or an organization employing an excluded person) is in violation of the exclusion rules if the excluded person furnishes to Federally-funded health care program beneficiaries items or services for which Federal health care program payment is then sought.   In the case of Medicaid-eligible personal care services, since the Medicaid is funded, in part, by the Federal government, the program qualifies as a Federal health care program.
You may face severe penalties if your organization employs or contracts with an excluded individual or entity and subsequently bills for tainted services provided to Medicaid beneficiaries.  For example, in 2017,[3] under 42 C.F.R. §1003.210(a)(1), the civil monetary penalty that may be imposed against a health care provider or supplier for ordering or prescribing medical or other item or service during a period in which the person was excluded was $11,052 per violation. 

Notably, the penalties that can be assessed by HHS-OIG if an organization is found to have improperly employed or contracted with an excluded individual party or individual are substantially more severe if the organization is a Medicare Advantage Organization or an HMO. Under 42 C.F.R. §1003.410, the penalty faced by a Medicare Advantage organization in 2017 was $37,396 per violation.  Similarly, under 42 C.F.R. §1003.410, the penalty faced by an HMO was $48,114 per violation.

 IV. What Steps Should Your Personal Care Services Agency Take to Limit its Level of Risk? 

From a risk standpoint, it isn’t sufficient to merely include a question in your employment application asking applicants if they are currently (or have ever been) excluded from participation in a Federal or State health benefits program OR been debarred from a Federal program. Even the most detailed applications for employment can prove useless if your personal care services agency’s due diligence efforts are ineffective.  People lie. Sorry, that’s just how it is.  A 2017 survey by conducted by HireRight found that 85% of job applicants lied or misrepresented one of more facts on their resumes or job application forms during screening.  As HireRight wrote:

Eighty five percent of survey respondents uncovered a lie or misrepresentation on a candidate’s resume or job application during the screening processup from 66% five years ago.”

So what is the answer?  The ONLY way to reduce your level of regulatory risk with respect to the accidental or unknowing employment or engagement of an individual or contracting entity is to make sure that all Federal and State exclusion databases are screened every 30 days.

 V. Conclusion: 

Government oversight of your agency’s operations will only increase in the future. As we have seen in the case of exclusions enforcement, over the last three decades, the government’s efforts focused on the improper provision of care and / or submission of claims by excluded parties has risen each year.  Today, thirty-eight states currently maintain a state exclusion database of individuals and entities that have been excluded from participating in Medicaid and other Federally-funded health benefits programs.  The number of states maintaining Medicaid exclusion databases varies from year to year, but is steadily increasing.  We anticipate that within the next five years, almost all states will have implemented a Medicaid exclusion database.  Unfortunately, there isn’t a government-sponsored site that consolidates the 40+ databases you need to be checking on a monthly basis.  Therefore, we strongly recommend that you utilize the services of an organization such as screening.wpengine.com.  Their services are inexpensive yet comprehensive.  

The monthly exclusion screening of your employees, contractors and vendors is an important component of your Compliance Program. In fact, it is likely one of the least expensive steps you can take TODAY to significantly reduce your level of regulatory risk.   We recommend you contact the folks at Exclusion Screening to obtain a complimentary assessment of your organization’s needs.

OIG ExclusionRobert 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 personal care agencies and other health care providers around the country in connection with Medicare, Medicaid and private payor audits.  For a complimentary consultation, give Robert a call at: (202) 298-8750.




[1]
The Medicare-Medicaid Anti-Fraud and Abuse Amendments, Public Law 95-142 (now codified at section 1128 of the Social Security Act) was enacted into law in 1977. 
[2] This legislation was followed four years later with the passage of the Civil Monetary Penalties Law (CMPL), Public Law 97-35 (codified at section 1128A of the Act).  This legislation provided HHS-OIG with the authority to pursue a range of administrative sanctions, up to and including exclusion, against individuals and entities found to have submitted false, fraudulent or improper claims to the government for payment.  
[3] Under the Federal Civil Penalties Inflation Adjustment Act Improvement Act of 2015, HHS is required to make annual inflation related increases to its CMP regulations.  We do not anticipate these updated regulations to be issued for 2018 until February or later of this year.

Home Health Final Rule Extends Exclusion Screening Obligation: Failure to Screen Could Result in Termination from Medicare

Catalina photoBy Paul Weidenfeld and Catalina Jandorf 





The new Final Rule issued by CMS revising the conditions of participation for home health agencies (HHAs) requires that providers “must ensure” that agencies providing services under arrangement have not been excluded from Medicare, Medicaid or any other federal health care program.  Effective July 17, 2017, the rule also states that providers must ensure that such agencies have not had their billing privileges revoked, and that they have not been terminated or been debarred from participating in any government program.  In making these requirements a condition of participation, CMS has created an affirmative screening obligation under which they have enforcement authority.

Compliance as a Condition of Participation

By making compliance with exclusion regulations a condition of participation, CMS has raised the stakes for failing to properly screen the exclusion status of vendors or contractors for HHAs while reaffirming the agency’s longstanding concerns about the participation of excluded persons in the Medicare Program.   Specifically, CMS has a wide assortment of administrative remedies that can be imposed for failing to meet conditions of participation – including even the ability to terminate a provider from participation in the program itself – all of which are independent from the OIG’s enforcement authorities for exclusion violations.

Guidance that Doesn’t Guide

CMS logo

Under the Final Rule, CMS may now hold an HHA liable for a State Exclusion in addition to a Federal Exclusion, by including Medicaid exclusion screening as a condition of participation.  However, as there is no universal list of all Medicaid excluded entities and individuals and the newly published final rule provides no guidance on how this requirement can be met, CMS has created an affirmative obligation without any guidance on how to fulfill it.  

In the response to a commenter’s concerns about the difficulties involved in meeting these requirements CMS stated that it “appreciates the opportunity to clarify [the] requirement” but it did not actually speak to the State issue.  The agency discussed the Federal exclusion lists but failed to address how an HHA could screen for a Medicaid exclusion.  It provided that self-certification is an appropriate mechanism in identifying denial of Medicare or Medicaid enrollment or in verifying debarment from government programs, but maintained that an HHA will still be held responsible for failing to properly screen a contracted entity that is providing “services under arrangement”.  This lack of guidance in screening requirements could be potentially problematic for a home health agency that relies solely on self-certification or just screening the Federal exclusion lists to weed out excluded entities. 

Conclusion

We think it is clear at this point that the mandated screening requirements consist of checking the List of Excluded Individuals and Entities (LEIE) and the System for Award Management (SAM) for a Medicare exclusion upon hire and every 30 days thereafter.  However, since the final rule does not clearly articulate what agencies must do to meet these requirements – particularly insofar as they involve Exclusions imposed by State and their Medicaid Fraud Control Units – home health agencies are left without clear guidance as to how to meet this requirement and are well advised to employ a broad exclusion screening protocol.

The best way to remain in compliance and avoid a Medicare or Medicaid Exclusion is to screen all employees, contractors, and vendors every month against all 38 state lists in addition to the LEIE and SAM.  To eliminate the risk of being barred from participation in the Federal health care programs, contact the Exclusion Experts at 1-800-294-0952 or online for a free consultation.

Paul Weidenfeld is a nationally recognized expert in health care fraud litigation and the Federal False Claims Act.  A former Department of Justice National Health Care Fraud Coordinator, he is currently in private representing health care providers and individuals, and a co-founder of Exclusion Screening, LLC.

Catalina Jandorf is a 3L at American University Washington College of Law.  She has experience working in health care as a law clerk at the Department of Health and Human Services Office of Counsel to the Inspector General and Inova Health System Office of the General Counsel.

What Medical Practices Need to Know About OIG Exclusion Screening

OIG Exclusion

By Paul Weidenfeld [1] The Office of Inspector General (OIG) has steadily increased its enforcement of OIG Exclusion violations since the issuance of its Special Advisory stressing the effect of an OIG Exclusion in May, 2013. Among other things, they have created a special unit to focus specifically on  Civil Money Penalties (CMPs) (its favored enforcement tool), supported numerous prosecutions by both its Office of Audit and its Office of Evaluations and Inspections, and sought greater regulatory authority from Congress. This article was originally directed (and is still intended) to give a basic tutorial on what an exclusion is, how it effects them, and what they can do to protect themselves.

I.  What is an OIG Exclusion?

The Department of Health and Human Services (HHS) is responsible for administering the Medicare and Medicaid Programs and it decides who may receive benefits under these programs as well as who will be allowed to provide them. When it is determined that a person or entity will not be permitted to provide services to the program, that person or entity is said to be “excluded.” The authority to exclude individuals and entities from Federal health care programs has been delegated by the Secretary of HHS to the OIG.[2]

There are two types of OIG exclusions, mandatory and permissive, and both have the effect of barring an individual or entity from participating in all Federal health care programs until such time, if ever, that their privilege has been reinstated.[3]  Mandatory exclusions last a minimum of 5 years and must be imposed if a person or entity is convicted of certain criminal offenses. These include, among others, offenses related to defrauding Federal or State health care programs, felony convictions for other health care related offenses, most drug related felony convictions, and patient abuse or neglect.

Permissive exclusion authority implicates a much wider range of conduct. The type of conduct for which permissive exclusions may be imposed include misdemeanor convictions related to defrauding health care fraud programs; drug related misdemeanors; suspension, revocation or surrender of a health care license based on competence, performance, or financial integrity; providing unnecessary or substandard services; submitting false claims; defaulting on health education loans or student loans, and so on.

II.  What is the Impact of an OIG Exclusion?

The impact of an OIG exclusion extends to any provider who employs or contracts with the excluded person or entity. The regulation that grants OIG the exclusion authority states that payments cannot be made for items or services furnished “by an excluded individual or entity, or at the medical direction or on the prescription of a physician or other authorized individual who is excluded when the person furnishing such item or service knew or had reason to know of the exclusion.” 42 CFR § 1001.1901(b)

Though the language of the regulation appears to be directed at excluded persons who provide direct, billable services, the OIG broadly interprets the regulation to create a “payment prohibition” that includes virtually any item or service performed by an excluded person that contributes to any claim for reimbursement from any Federal or State Health Care Program.[4] For example, the OIG considers the preparation of a surgical tray or the inputting of information into a computer by an excluded person in violation of the prohibition. Similarly, administrative and management services, IT support, and even strategic planning would also be problematic. Even an excluded volunteer’s assistance might trigger the prohibition unless his activities were “wholly unrelated to Federal health care programs.”[5]

As indicated earlier, the favored enforcement tool is the imposition of civil penalties pursuant to 42 CFR §1003.102(a)(2). Though this regulation also appears to be restrictive in nature,[6]  the OIG interprets it to authorize CMPs for the failure of providers to screen their employees, vendors and contractors for exclusions. In its view, any time an “excluded person participates in any way in the furnishing of items or services that are payable by a Federal health care program,” [7] a  employer/provider that fails to screen will be held to have “known” — or “should have known” — of the exclusion.[8]

III.  OIG Exclusion Screening Requirements

Federal screening requirements are contained in the May, 2013 Special Advisory Bulletin.[9] The Advisory Bulletin states that in order for a provider to “avoid potential CMP liability,” they must check the List of Excluded Individuals and Entities (LEIE) to “determine the exclusion status” of their current employees, vendors and contractors. This can be done, according to the Bulletin’s guidance, by reviewing “each job category or contractual relationship to determine whether the item or service being provided is directly or indirectly, in whole or in part, payable by a Federal health care program,” and then “screen everyone that perform[s] under that contract or in that job category.[10] 

While the OIG concedes that it does not have the authority to require that screening be performed every 30 days, it makes it clear that providers who fail to screen their employees, contractors, or vendors monthly risk the imposition of CMPs and overpayment liability. In addition, the OIG observes that the LEIE is updated on a monthly basis, that CMS mandated monthly screening for all State Medicaid Units in 2009 and 2011, and it requires monthly screening in all of its corporate integrity agreements.

IV. Are the OIG Exclusion Requirements Difficult to Meet?

The logistics of the screening process are extremely challenging for most providers despite the fact that the LEIE is a “searchable and downloadable database that can assist in identifying excluded employees.”[11]  Providers can elect to use the “search function” of the LEIE, but can only screen five employees at a time and each name must be entered manually. In addition, potential matches can only be verified individually by entering the social security number. This may work well if a provider only has to screen a handful of employees or contractors, but how would this work out if a provider has 200, 2,000, or even 20,000 employees?

The alternative, downloading the LEIE database and comparing the employee list to it, is equally problematic. Most providers simply do not have the capability to download the LEIE (which contains almost 60,000 names) and compare it with their own employee database in any reliable, or economically viable way. Another issue is the requirement that providers apply the same standard to contractors and sub-contractors as to their own employees. Contractors are unlikely to want to share their employee lists, and a provider would not want to screen the employee list of a large contractor. While the OIG does seem to recognize the issue by suggesting that providers can “choose to rely [on] screening conducted by the contractor,” it immediately follows the suggestion by reminding providers that they remain responsible for both overpayment liability and CMPs if they fail to ensure that “appropriate exclusion screening” has been conducted.[12]

V.  State Exclusion Requirements

It is important to remember that the OIG’s guidance addresses only federal concerns. While the OIG may be satisfied with just screening the LEIE on a  “regular” basis, there are only a handful of State Medicaid Programs that would find that this satisfied their requirements. Indeed, most States require, at a minimum, that providers screen their State Exclusion List (37 States have them) in addition to the LEIE, and many also require screening of the GSA/SAM[13] and/or other State specific exclusions lists (such as sex offender lists, elder abuse lists, etc.).

States also commonly include additional screening requirements through their provider agreements — some of which can be quite onerous. For example, in some States, applicants are required to certify that no employees or contractors are “suspended, or excluded from Medicare, Medicaid or other Health Care Program in any state”.[14] Additionally, State exclusion lists have a wide range of formats that vary from excel spreadsheets to unsearchable PDF documents further adding to the problems with screening.

For additional information refer to OIG Exclusion and State Exclusion Lists: Which Exclusion Lists Need to Be Screened? What Is the Difference Between Them?

VI.  Outsourcing of Exclusion Screening is a Simple, and Affordable Solution

Exclusion Screening, LLC was created because we recognized the difficulties providers faced when seeking to comply with their exclusion screening obligations.  We were determined to provide a simple, cost effective solution to the problem and we feel strongly that we accomplished our goal.  

Exclusion Screening is simple (we do all the work), cost effective (likely to cost less than the monthly cost of the water delivered to your office), and best of all, it is a complete solution to your screening needs. Call or email me if you have any questions at: pweidenfeld@exclusionscreening.com or 1-800-294-0952.

 

OIG Exclusion 

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. 


[1] This is an update of an article that was first published in by the National Alliance of Medical Auditing Specialists (NAMAS) and posted on this website in November, 2014. It was done with the assistance of Jonathan Culpepper.

[2] Sections 1128 and 1156 of the Social Security Act. Though loosely defined to include any program that provides any health benefits, the most significant of these programs are Medicare and TRICARE. Medicaid exclusions are left to the State Fraud Control Units.

[3] Mandatory exclusions are found at 42 USC § 1320a-7; permissive exclusions at 42 USC § 1320a-7(b).

[4] The Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs issued May, 8, 2013 replaced and superseded the 1999 Bulletin and states: “This payment prohibition applies to all methods of Federal health care program payment, whether from itemized claims, cost reports, fee schedules, capitated payments, a prospective payment system or other bundled payment, or other payment system and applies even if the payment is made to a State agency or a person that is not excluded (at page 6 of the Bulletin).

[5] These are examples taken from the Special Advisory Bulletin, id.

[6] The regulation seems to be explaining the circumstances under which CMPs are available, not extending them stating that they may be assessed where a person making a claim stating: “knew, or should have known, that the claim was false or fraudulent, including a claim for any item or service furnished by an excluded individual employed by or otherwise under contract with that person.”

[7] Id. at 11.

[8] This is the language that appears in the OIG press releases announcing settlements of exclusion violations.

[9] Special Advisory Bulletin, at 13-18.

[10] Id. at 15-16.

[11] Id. at 14.

[12] Id. at 16.

[13] The System for Award Management (SAM) is the Official U.S. Government system that consolidated the capabilities of the CCR/FedReg, ORCA, and EPLS which were pre-existing debarment databases.

[14] See, for example, Rule § 352.5 of the Texas Administrative Code which specifically requires such a certification and the Louisiana Medicaid Provider Agreement.

Who Is to Blame for Gaps in OIG and State Exclusion Lists? What Is the Impact on Providers?

 

The failure to report excludable offenses by state Medicaid offices and licensing boards is a longstanding issue for the OIG. Recent OIG audits and reports have confirmed these state failures to report. For example, an OIG study released in August found that over 12% of terminated providers were able to continue participating in other state Medicaid programs because states were not sharing terminated provider information. In addition, two recent Medicaid Fraud Control Unit (MFCU) audits discovered that they routinely failed to timely report conviction information to the OIG and sometimes did not report them at all.[1] Reporting failures lead to gaps in the OIG Exclusion List (LEIE) because the OIG cannot exclude an individual if the OIG is never informed of the state’s conviction, termination, or suspension of providers. Such failures to report are important because the information that would have been reported can lead to exclusion violations, which are listed on the LEIE. But, state compliance failures are not the only cause of gaps in OIG and State exclusion lists – as we discuss, no matter who is at fault, the provider may pay for anyone’s mistake.

The OIG Exclusion List Has Limited Search Capabilities

One important reason providers should not rely on screening only the LEIE is that its search function is extremely narrow.  If an excluded individual uses a different name, such as a middle or maiden name, an LEIE search using the person’s first and last names my not produce any results.[2]  For example, J. A.[3] was excluded from participation on Georgia’s state exclusion list in August 2015. However, a search for “J.A.” on the LEIE currently produces zero results. 

J.A. LEIE_Redacted

Conversely, when we searched J.A. on SAFERTM, our proprietary exclusion database, we not only found a match on the Georgia list (“J.A.”), but we also found a match on the LEIE and SAM databases for “R.J.A.”. Interestingly, “J.A.” has the same middle and last name as “R.J.A.,” they are both Georgia residents, and they were both excluded from participation in April 2015. Like many states, the identifying information on Georgia’s list is sparse. Nevertheless, it is extremely likely that R.J.A. and J.A. are the same person, which a provider would have missed if he only searched the LEIE for J.A.

J.A.SAFER_Redacted

Reported Cases May Not Be Picked Up by OIG

Florida’s Agency for Health Care Administration publishes monthly press releases which identify persons terminated from participation in Florida Medicaid.  It expressly states that the exclusion information was “reported to the federal government for placement on the federal exclusion list,” and named providers appear on Florida’s Excluded Provider List.  When we conducted a SAFERTM search for G.B., who was listed on the April 2015 memo as “terminated from participation,” the only two “hits” were from Florida’s state exclusion list.  

G.B. SAFER_Redacted

However, an LEIE search for G.B. produced zero results.  

G.B. LEIE_Redacted

One possible explanation for why G.B. fails to show up on the LEIE could be the administrative process of OIG actually reviewing the reason for the termination and then formally excluding G.B. Nevertheless, a provider who only screens the LEIE and employs or is considering employing G.B. would miss this exclusion.  

OIG Just Misses Some Cases

K.B., a Registered Nurse (RN) with multistate licensure privileges, was placed on probation for substance abuse in February 2005. After testing positive for morphine, Iowa revoked her license and several other states revoked her multistate privileges. While the revocations were reported, the licensure revocation only resulted in K.B.’s exclusion from participation by California and the GSA-SAM in 2010. K.B. is not listed on the LEIE. This means that K.B. is unable to participate in any other state Medicaid program because under the ACA 6501, if you are terminated for cause from participation in one state, then you are terminated in all states, and K.B. is barred from contracting with the federal government. However, if a provider only screened the LEIE he would be completely unaware and could potentially face very hefty fines.

What This Means

Clearly some information is getting lost or mixed up in the reporting pipeline between state Medicaid offices, MFCUs, and the OIG, and the lesson for providers is that merely screening the LEIE is not enough. The examples above demonstrate that human error, narrow search functions, and simply missed information all play a role in the gaps that exist between publication on state exclusion lists and the LEIE.

State Medicaid offices are responsible for compiling and reporting information about excluded providers. However, as demonstrated by the “J.A.” case, the probable human error of transposing names combined with the LEIE’s limited search capabilities could result in a provider employing an excluded person, even though he was properly screened against the LEIE. To avoid this, providers should screen against the LEIE, the GSA-SAM, and all available state lists monthly. Practices should also ensure they use wide search parameters (alternate spellings, full names, maiden names, etc.) when conducting searches or they should select a vendor, like Exclusion Screening, LLC, with a system designed to anticipate these issues.

Notwithstanding name discrepancies, some information just does not make it to the LEIE. As the “G.B.” example reveals, a practice may face considerable monetary fines because it failed to screen the Florida exclusion list and relied solely on the LEIE for exclusion information, and the OIG failed to add G.B.’s name to the LEIE. Similarly, a provider who considered employing “K.B.” would be totally unaware that she was excluded from participation unless the provider screened the GSA-SAM and/or the California exclusion list. Remember that ACA section 6501 states that when an individual or contractor is excluded in one state, he or she is excluded in all states. When a provider misses such state exclusion information, he or she could be liable for CMPs of $10,000 for each claim provided directly or indirectly by the excluded individual, an assessment of up to three times the total amount paid by the government, and potential false claims liability.  Relying on the LEIE’s exclusion information without checking all other available state exclusion lists is a substantial monetary risk for a practice to take. If screening and verifying 40 state and federal exclusion lists each month is overly burdensome for your practice, contact Exclusion Screening, LLC today for a free assessment: 1 (800) 294-0952.

[1] MFCUs are supposed to send a referral letter to the OIG within 30 days of sentencing for the purpose of alerting the OIG about providers excluded from state programs, but the OIG found that in some cases this exclusion information was not referred to the OIG for over 100 days.

[2] We have even found that hyphenated names frustrate LEIE searches even where the actual names are used!

[3] Full names have been redacted for privacy.

Health Care Fraud: Second Conviction Secured in Michigan Excluded Provider Scheme

health care fraudIn February, we reported that the Michigan Attorney General secured a racketeering and health care fraud conviction against an excluded Michigan podiatrist. The podiatrist participated in an elaborate health care fraud scheme with another Michigan provider. In early July, the Michigan Attorney General successfully convicted the doctor who knew or should have known that the podiatrist was excluded.

Health Care Fraud Conviction Details

The Attorney General’s investigators determined that the provider hired a former podiatrist who was convicted of health care fraud in 2003. The podiatrist was subsequently excluded from participation in the federal health care programs for a period of 25 years. The provider billed private insurance and the government for the excluded podiatrist’s medical services as if he performed them. Trial testimony indicated that the provider made payments to the excluded podiatrist from the same account where health care program payments were deposited.

For entering into this scheme, the provider was convicted of racketeering (20-year felony), thirteen counts of health care fraud (4-year felony), and five counts of Medicaid fraud (4-year felony). Up to $200,000 in fines accompanied the convictions.

Takeaway

The Michigan provider was held liable because he “knew or should have known” that the podiatrist he contracted with was excluded from participation in the federal health care programs. The OIG and state Attorney Generals are working to end health care fraud by seeking out providers who employ or contract with excluded persons or entities. The best way to protect yourself from liability is to screen all employees and contractors against all federal and state exclusion lists monthly. Call Exclusion Screening, LLC today for a free assessment of your needs and costs at 1(800) 294-0952

 

Ashley Hudson

Ashley Hudson, Associate Attorney at Liles Parker, LLP and former Chief Operating Officer for Exclusion Screening, LLC, is the author of this article.

Pennsylvania Judge Holds that CIA violations May Result in FCA Liability

OIG

 

In late July, a federal district court in Pennsylvania joined in the flurry of False Claims Act (FCA) decisions. These decisions further interpreted the ACA’s amendments to the law. The court in United States ex rel. Boise v. Cephalon, Inc. considered two important issues. The issues regarded when a party has an obligation to pay the government, and when a failure to do so could result in reverse false claims liability. Providers should be on high alert and ensure that they are in compliance with all requirements. This includes the requirement to screen employees monthly in order to avoid being OIG’s next false claims target.

Background

The defendant in Cephalon failed to comply with its Corporate Integrity Agreement (CIA) and OIG sought repayment. OIG alleged that they failed to comply with the CIA, which caused reverse false claims and produced FCA liability.

Cephalon, a drug manufacturer, argued that it could have only had an obligation to pay penalties under the CIA if HHS-OIG actually demanded payment. The relator argued that Cephalon’s obligation to pay actually arose when it breached the CIA’s reporting requirements. The court disagreed with Cephalon and instead held for the relator. The court found that a CIA imposes contractual obligations through reporting requirements. Furthermore, a breach of these contractual obligations could cause a company to be liable for reverse false claims even if OIG had not yet demanded payment. Finally, the court elaborated that “specific contract remedies” like specific penalties create a “less contingent obligation to pay.”

Takeaways

The federal government is taking advantage of the new false claims recoupment tools made available to it through the ACA. If you are not screening your employees and contractors against state and federal exclusion lists, then now is the time to ensure your practice is complying with the law. Call Exclusion Screening, LLC for a free assessment of your needs and costs at 1-800- 294-0952.

Ashley Hudson

Ashley Hudson, Associate Attorney at Liles Parker, LLP and former Chief Operating Officer for Exclusion Screening, LLC, is the author of this article.

Excluded Individual Conducts Elaborate Health Care Fraud Scheme

close-up-of-the-front-of-a-canadian-ontario-ambulance-1441977

 

The owner of a New Jersey ambulance company was indicted for health care fraud in mid-August of 2015. The owner was excluded from participation in the federal health care programs after being convicted of defrauding New Jersey health care programs in 2003. This is just the latest in a steady stream of health care related enforcement actions by state attorney generals.

Background

New Jersey prosecutors allege that the provider has been the owner and operator of a New Jersey ambulance company to which Medicare and Medicaid have paid out a combined $7.5 million since 2010. The provider allegedly hid his involvement in the company by paying employees in cash. The defendant has owned and operated the ambulance company since 2005, which is only two years after he was excluded from participation in the federal health care programs for a period of 11 years. The provider now faces a 17-count federal indictment with a possible sentence of 30 years in prison for conducting the health care fraud scheme.

Takeaways

It may be difficult to protect yourself from individuals like this New Jersey provider who explicitly sought to defraud the federal health care programs. Providers should, however, try to protect themselves by conducting monthly exclusion screening searches of their employees and contractors. Providers should also maintain proper records of these searches. States, like the federal government, are actively pursuing those who are in violation of federal health care regulations. Remember, compliance is always the best policy!

Ashley Hudson

Ashley Hudson, Associate Attorney at Liles Parker, LLP and former Chief Operating Officer for Exclusion Screening, LLC, is the author of this article. Feel free to contact us at 1-800-294-0952 or online for a free consultation.

Exclusion Screening Required in United States Territories

coconut-trees-2-1359166Our experts at Exclusion Screening, LLC maintain fact sheets that contain the screening requirements for providers in every state, including those states that do not currently maintain a separate excluded or terminated provider list. However, Medicaid participation and adherence to exclusion screening requirements does not stop with the fifty states. United States territories like Puerto Rico and the U.S. Virgin Islands also participate in Medicaid, and therefore, providers must comply with the same screening requirements as United States Medicaid providers.

A Closer Look

Through our research, we analyzed and compiled the exclusion screening requirements in Puerto Rico, the U.S. Virgin Islands, the Northern Mariana Islands, and Guam. A summary for each territory follows.

Puerto Rico

Puerto Rico’s Medicaid program does not maintain a separate excluded provider list and does not demand that providers conduct independent exclusion screening. Instead, private companies, like Molina Healthcare, which contracts with Puerto Rico Medicaid, conduct exclusion screening searches before accepting a provider’s Medicaid enrollment application. The contracted healthcare company continually reviews review the exclusion lists monthly thereafter.

U.S. Virgin Islands

The U.S. Virgin Islands, on the other hand, require providers to disclose quite a bit of information pertaining to exclusions. When a provider enrolls in the Virgin Islands’ Medicaid program, he must disclose whether: the provider; any person or entity that has a direct or indirect ownership interest of 5% or more of the provider; any person or entity with an interest in any subcontractor that the provider has an ownership interest of 5% or more; any agent, officer, director, or managing employee has ever been excluded from participation in any program under Medicare, Medicaid, or Title XXI services since the inception of the program.

In addition, the provider must certify that the enrolling provider, its owners, managers, employees, and contractors are not excluded from participation in the federal health care programs by checking the LEIE at the time of enrollment, before hiring or contracting, and monthly thereafter. The provider must also agree to immediately report any exclusion information discovered to the Department of Human Services.

Northern Mariana Islands

The Northern Mariana Islands, like the U.S. Virgin Islands, address exclusions within the Medicaid Provider Enrollment application. Specifically, the provider must disclose whether he or she has ever been denied, terminated, or suspended by Medicare or any Medicaid program.   In addition, the provider must disclose whether any person with an ownership or control interest or any agents or managing employees have ever been convicted of a criminal offense related to his or her involvement in the federal health care programs, the commission of which would likely result in exclusion from participation in the programs.

Guam

Guam’s State Medicaid Plan, effective January 1, 2012, requires that the Medicaid agency performs exclusion screening checks on all providers, any person with an ownership or control interest in the provider, or any of the provider’s agents or managing employees.

Takeaway

The U.S. Territories, much like the fifty states, have varied exclusion screening requirements.   We believe all providers must be aware of the specific requirements imposed by their state Medicaid office, but also believe that providers should not stop at their state’s baseline minimum for exclusion screening. Compliance is always the best policy and screening all available state lists is an excellent way to ensure that your practice is abiding by any requirements imposed by Medicare, Medicaid, or private insurance companies. In addition, when it comes time to enroll or re-enroll (and upcoming deadline for many) in your state Medicaid program, you can certify with confidence that no employee, contractor, or vendor has ever been excluded from participation in any state. Call Exclusion Screening, LLC today at 1(800) 294-0952 to discuss your specific state’s screening requirements or for a free consultation regarding your practice’s exclusion screening program!

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