A Provider’s Guide to OIG Exclusions: Part 2

OIG Background Check

Federal Exclusion Regulations and Enforcement Authorities, and How Providers Can Avoid Risk with Proper Exclusion Screening OIG background check –Part 2

Paul S. Weidenfeld, JD

This article was originally written by Paul Weidenfeld and published by GreenBranch Publishing.  This article is Part 2 from a 2-Part article originally published by GreenBranch Publishing on their website.

Office Inspector General of (OIG) exclusions are one of the most powerful weapons available to law enforcement in its effort to fight healthcare fraud. Individuals and entities subject to an OIG exclusion are barred from participation in all federal healthcare benefit programs, resulting in a payment prohibition on all items and services they provide, whether directly or indirectly. Additionally, providers that employ or contract with excluded individuals or entities risk the imposition of civil money penalties, overpayment liability, and even potential exposure under the False Claims Act. However, even though OIG exclusions also are one of law enforcement’s oldest tools, many providers often fail to appreciate their compliance obligations with respect to exclusions and the risks associated with employing or contracting with excluded individuals or entities. Indeed, many providers make only minimal efforts to screen their employees and contractors to ensure compliance—and some make no effort at all. This article seeks to educate providers on the existing legal and regulatory framework, the risks and potential consequences of a failure to comply with those laws and regulations, and how best to comply and avoid those risks.


he Office of Inspector General (OIG) credits the 1999 Special Advisory as the “beginning” of its initiative to ensure compliance and enforcement of exclusions (2013 Special Advisory, at pg 2), but the updates to the OIG’s Self-Disclosure Protocol and its Special Advisory on the Effect of Exclusions in 2013 more accurately mark the beginning of the OIG’s focus on exclusion enforcement.[1] Before the Special Advisory was updated, for example, the OIG routinely suggested that providers screen employees and those with whom they had contracts on an annual basis, whereas the Updated Advisory requires monthly screening of a significantly expanded universe of persons and entities. And until the OIG issued its Updated Self-Disclosure Protocol only weeks earlier, there was no established protocol for providers to self-disclose exclusion violations. Read together, and in conjunction with the investigation and repayment obligations in the Affordable Care Act (ACA), these three principles form the foundation upon which exclusion enforcement is based.

Enforcement matters come to the OIG’s attention in a variety of ways. In addition to its inherent authority to initiate investigations, the OIG receives hotline tips, referrals from its sister agencies,[2] referrals from various CMS contractors, self-referrals from providers wishing to avoid civil monetary penalties (CMPs), and whistleblower actions, to name just some. With respect to exclusion enforcement, however, the OIG historically has relied heavily on self- disclosures. Indeed, until the 2013 Updates, the OIG rarely initiated investigations based on exclusion violations on its own. In the years leading up to the 2013 Updates, the OIG reported the following numbers of exclusion settlements based on an investigation it had initiated: seven in 2010; three in 2011; ten in 2012; and none in 2013 prior to the publication of the updates.

Since 2013, however, some change has been evident. The number of reported settlements based on OIG investigations increased to a high of 26 in 2015; both the Office of Evaluations and Inspections and the Office of Audit have reported separate “exclusion initiatives”; and in 2015, the OIG established a special litigation unit that focused on the imposition of civil monetary penalties and exclusions.

Many providers are under the mistaken impression that the OIG’s enforcement efforts are focused on physicians and other direct billers, and therefore think that their credentialing process adequately screens for exclusions. This can be a costly mistake.[3]

Figure 1:OIG Background Check
Table 1:
OIG Background Check
Figure 1 reflects OIG enforcement efforts in cases in which the agency initiated the investigation. It shows the OIG’s focus on institutions that provide a lot of care and then submit a lot of claims for that care.

Table 1 shows that the OIG’s enforcement net extends far wider than doctors and other direct billers. Although there is an emphasis on non-billing, direct care providers, the chart shows that no position is “safe” when it comes to imposing CMPs for excluded employees.

Although the imposition of CMPs is the favored enforcement methodology, a growing number of cases involving exclusions have resulted in False Claims Act (FCA) cases and criminal convictions. For example, a joint federal/state investigation in Tennessee involving an excluded private duty nurse who worked for a home health agency resulted in a $6.5 million settlement. In addition, the OIG has brought a number of FCA cases in which the principal allegations involved businesses operated by excluded persons

Finally, recent enforcement efforts with respect to the requirement that providers ensure the exclusion status of physicians, pharmacies, and labs at the point of service have been increasing. This has resulted in a number of settlements with pharmacies based on the employment of excluded pharmacists or excluded support personnel. For example, in one of the settlements, a pharmacy chain paid $21.5 million in settlement because it had employed a large number of excluded pharmacists.[4] States also have taken an interest in this issue; for example, the Attorney General of New York settled with a pharmacy for $442,000 to resolve allegations that the pharmacy had been fulfilling prescriptions written by an excluded physician.


Exclusion enforcement is based on the simple principle that providers are responsible for ensuring the exclusion status of their employees and those with whom they do business. As a consequence, claims for items or services furnished by excluded individuals or entities result in regulatory violations subject to the imposition of civil money penalties, and all federal reimbursements for such items or services violate the payment prohibition and constitute overpayments.[5] Only proper exclusion screening can help providers avoid these risks, and this section seeks to help providers understand their federal screening obligations. Much of the content in this section relies on the guidance contained in the 2013 Special Advisory,[6] but it relies as well on subsequent guidance issued by the OIG, and on Corporate Integrity Agreements (CIAs) that have been imposed by the OIG as part of recent False Claims Act settlements.[7]

Which Employees Should be Screened for OIG Exclusions?

Employees must be screened for exclusions if they furnish any item or service that is payable directly or indirectly, whether in whole or in part, by a federal healthcare program. The OIG recommends the following process for providers to use in determining which employees should be screened:

Review 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 healthcare program. If the answer is yes, then the best mechanism for limiting CMP liability is to screen all persons that perform under that contract or that are in that job category. (2013 Special Advisory, at 15-16).

Because all the relevant terms are broadly defined (see footnote 9 and pages 2 and 3, infra,) and as the process is as time-consuming and difficult to follow as it is broad, providers are best served by screening all of their direct employees unless they can identify specific employees who work in a separate, identifiable division wholly unrelated to federal healthcare programs. Caution dictates against “picking and choosing” who to screen unless a “quarantine” can be guaranteed.[8] In addition, corporate integrity agreements include owners, officers, directors, managing employees, agents, and active medical staff as those who should be screened regardless of whether they are employed directly or indirectly.

Exclusion Screening of Vendors and Contractors

The OIG suggests that providers use the same analysis in determining “whether or not to screen contractors, subcontractors, and the employees of contractors” that it uses for its own employees. This standard is unrealistic in many circumstances, and although the OIG does not acknowledge the difficulty of its suggestion, it goes on to states that “The risk of potential CMP liability is greatest for those persons that provide items or services integral to the provision of patient care because it is more likely that such items or services are payable by the Federal health care programs.” (See 2013 Special Advisory at 16.) The dual focus of patient safety and program integrity was again emphasized in the amendment of CMP rules in 2017. The new 2017 rules are a valuable guide in determining whom to screen.

The CMP authorities in this part, as a general matter, aim to redress fraud on the federal health care programs by recovering funds, protecting the programs and beneficiaries from untrustworthy providers and suppliers, and deterring improper conduct by others. Accordingly, it is highly relevant if the conduct put beneficiaries at risk of patient harm (81 Fed. Reg. 88, 334 (Dec. 7, 2016)).

CIA’s from OIG settlements can contain indirect acknowledgments by the OIG as to the broad nature of the screening obligation is outlined in the guidance. In most of these documents, there is a specific provision stating that providers do not need to screen vendors whose sole connection to the provider is selling or providing supplies or equipment for which the vendor does not bill. This is a common-sense exception that removes uncertainty with regard to a large class of vendors who provide supplies for which the provider is ultimately reimbursed.

Applying the guidance and understanding of the concerns of the OIG, the contractors and vendors who are likely candidates for exclusion screening are those that provide the following services:

  • Ambulance and other transportation service providers;
  • IT solution providers;
  • Security providers and their technicians;
  • Medical equipment suppliers;
  • Food service workers;
  • Lab technicians;
  • Billers and coders;
  • Pharmacists;
  • Nurses, physicians, and other individuals provided by staffing agencies; and
  • Physician groups that provide emergency room coverage.

For obvious reasons, the OIG is highly focused on screening billers and third-party billing companies. In most CIAs, OIG will only allow providers to delegate the exclusion screening function to their billing company if it does not have an ownership or controlling interest in the billing company and it certifies that the following conditions have been met:

  1. The billing company has a policy of not employing persons who are excluded, suspended, or otherwise ineligible to participate in Medicare or other federal healthcare programs;
  2. The company screens its employees upon hire and monthly thereafter against the List of Excluded Individuals/Entities (LEIE);
  3. The company provides proof of its screening activities; and
  4. The billing company provides training in the applicable requirements of the federal healthcare programs to those employees involved in the preparation and submission of claims to federal healthcare programs.


How Often Should Providers Screen?

Providers are responsible for ensuring the exclusion status of employees, vendors, and contractors at all times and at the point of service, and they should screen accordingly. Thus, exclusion screening should be performed prior to employment or to the initiation of a business relationship. Exclusion screening also should be performed without regard to the person’s status or “whether or by whom” exclusion screening had previously been performed.

In order to ensure ongoing compliance with the obligation to ensure an “exclusion free” workforce, screening also must be performed “regularly” thereafter. Providers sometimes question the necessity of ongoing screening, but the reasons for it are obvious: exclusion is not a static condition, and someone who is not excluded at the time of hire can certainly become excluded at a later date. This is particularly the case if an exclusion is based on a licensing action that was pending at the time of employment but not resolved until sometime after the employment relationship began. Also, and perhaps most importantly, regular screening is required.

Although there are no statutes or regulations that expressly state exactly what constitutes “regular screening,” the OIG has unequivocally expressed its view that monthly screening “best minimizes potential overpayment and CMP liability” (2013 Special Advisory at 15). In addition, the OIG notes that in June of 2008, CMS issued a State Medicaid Director Letter (SMDL #08-003) that provided guidance to Medicaid directors on checking providers and contractors for excluded individuals,[9] and that CMS issued a follow-up directive in 2009 (SMDL #09-001) providing further guidance to the states and, essentially, mandating that screening be done upon hire and monthly thereafter.[10] The OIG also notes that LEIE is updated monthly. Finally, there is the practical consideration that removing an excluded employee as soon as possible is the best action a practice can take for business.[11]

Which Federal Exclusion Lists Should be Screened?

The OIG requires that providers screen its LEIE. It does not, however, require providers to screen the Government Service Administration’s System for Award Management (GSA/SAM), because the OIG has no authority to impose penalties or assessments based on an individual’s or entity’s inclusion on a separate federal agency’s debarment list or on a state exclusion or debarment list.

Although searching the LEIE can satisfy the OIG’s screening requirement, providers that participate in state Medicaid Programs should understand that every state has its own set of exclusion regulations and exclusion screening requirements. Indeed, at last count, 40 states had their own exclusion lists, which had to be screened in addition to the LEIE. Medicaid providers need to consult the relevant rules and regulations in the state, or states, in which they participate.[12]

It is also noted that Section 6501 of the ACA specifically states that if a provider or entity is excluded from any state Medicaid program, then that provider or entity is excluded from participating in all state programs (42 U.S.C. § 1396(a)). Although it has not been fully settled as to how the statute will be implemented, it is worth noting and considering when determining which databases to screen. Many screening services routinely screen all such databases instead of screening individual states.

Additional Recommended Practices

The following policies and procedures are all found in either CIAs or other materials published by the OIG. They are not required, but they do reflect practices that providers might consider including as part of exclusion screening program:

  • Have a provision on maintaining documentation of its exclusion screening activities in its document retention policy;
  • Have a written policy requiring the disclosure of any exclusion or any other adverse action that occurs during the course of their employment, including any state exclusions, suspensions, licensing actions, revocations and debarments; and
  • Have a written policy requiring employees to report the existence of any pending or proposed exclusions or adverse action that might cause an exclusion.


How Difficult Is It to Actually Screen?

The actual process of screening employees, vendors, and contractors against the LEIE is a cumbersome one. Providers can either manually input names into the OIG website or download the entire exclusion list from the website and compare it with their employee list—but both options provide significant challenges. If a provider decides to manually input the names, for example, he or she is limited to five names or four entities at a time. Any potential match requires an additional step for confirmation, and unless the submitted name is an exact match with the name in the LEIE, it will not register as a potential exclusion. Providers that elect to download the entire list, the other option, also face serious challenges. There are over 65,000 names on the LEIE, and many providers simply don’t have the technical expertise to compare lists—particularly where the names may not result in perfect matches. In addition, the OIG requires that the screening process be documented by screenshots or otherwise, which would not be easily accomplished by either screening methodology.

Can Providers Rely on Others to Screen?

The OIG recognizes that providers will sometimes seek to delegate their screening obligation to contractors such as staffing agencies. When that occurs, the OIG again advises the provider to demand and maintain documentation that the screening was performed, and it also reminds providers that a delegation of the responsibility to screen does not equate to a delegation of the liability attached to that obligation. For example, the OIG states in its 2013 Advisory that even when a third party reliably and effectively screens for excluded individuals, those that rely on them are still “responsible for overpayments and CMPs” (at page 8).

Regardless of whether and by whom screening is performed and the status of the person . . . the provider is subject to overpayment liability for any items or services furnished by any excluded person for which the provider received federal healthcare program reimbursement and may be subject to CMP liability if the provider does not ensure that an appropriate exclusion screening was performed (2013 Special Advisory, at 16).

Does It Make Sense for Providers to Hire a Third-Party Vendor to Perform Screening?

Hiring a third-party vendor to screen for exclusions does not solve all of a provider’s screening issues and problems, but it is a relatively inexpensive alternative that solves most of them. Reputable exclusion screening vendors can do all of the work inherent in screening, including the verification of potential matches, so that providers don’t need to waste employee time manually entering tens (or hundreds, or thousands) of names. These vendors should have sophisticated software that is able to identify “potential matches” when names are not a “perfect match,” and they should also maintain records of all screening activities. Another important advantage of having a vendor perform exclusion screening is that they should be able to screen the various state exclusion lists at little or no additional cost. Finally, even though a provider cannot delegate its overpayment liability, having a third party that regularly screens all names can provide strong defenses against the imposition of any civil money penalties.[13]


The OIG’s updated Self-Disclosure Protocol issued added a new section for self-disclosing exclusion violations and a formula for calculating single damages.[14] In addition to creating a path for self-disclosures and injecting some certainty into the process, the updated protocol clarified the OIG’s expectation that providers fully comply with exclusion regulations and its intention to enforce the exclusion regulations if providers fail to do so.

The protocol requires that providers fully investigate the matter and submit their findings in a narrative that includes the following information:

  • Identification information regarding the excluded individual, including license and provider identification information (if any);
  • Job duties, and their dates of service;
  • A description of the screening that took place both prior to and after employment began;
  • How the problem was discovered or and the corrective actions taken; and
  • A calculation of the loss (see following section).

Calculation of the “Loss”

Prior to the update, calculating the “loss” for exclusion violations was particularly problematic if the employee provided services that indirectly contributed to the submission of a claim but were not billable in of themselves (e.g., nurses, surgical assistants) or if the employee provided

services that supported the organization but were not connected with any specific claims (e.g., administrative, IT, or housekeeping services). Providers were at a loss when attempting to calculate the single damages of exclusion violations associated such individuals. To calculate the loss for an excluded shift supervisor, would every service provided during every shift while the shift supervisor was employed be tainted and constitute an overpayment? How would one calculate the overpayment amount for a biller or coder, or a coding or billing supervisor?

The revised protocol directly addressed this issue of how to self-disclose by creating a simple, workable methodology that could be used to generate an amount, which would then serve as a proxy for the single damages. Specifically, the formula requires providers to do the following:

  1. Identify the total cost of employment for the excluded person or persons (including benefits, etc.) during the period of employment;
  2. Calculate the provider’s payer mix (by the unit in which the person worked if possible, or by the entire entity if not); and
  3. Simply multiply the cost by the federal mix.

The result can then be used as a “proxy” for the single damages and as a basis for “compromising the OIG’s CMP authority.” Because the calculation considers the contribution of the excluded employee during the exclusion period and the extent of the federal contribution to the organization, it provides a generally proportionate result in matters involving non-billing employees that provide services that contribute to claims to federal healthcare payers.[15]


Reinstatement at the conclusion of an exclusion period is not automatic. Applications may be submitted 90 days prior to the reinstatement date. However, in many permissive exclusions, the reinstatement date is dependent on external factors that are unknown at the time of the exclusion. For example, when a person is excluded based on a license revocation, he or she is not eligible for reinstatement until he or she has regained the license referenced in the exclusion or an equivalent license in another state. Alternatively, if the person does not regain his or her license, he or she may seek reinstatement if a minimum of three years has passed and the action was not based on patient abuse or neglect (42 CFR § 1001.501(b)-(c)). An OIG exclusion based on a state healthcare program exclusion also is linked in length to that action, but a person subject to an exclusion on this basis is not eligible for reinstatement until the state exclusion is lifted—unless the basis of that action was an OIG exclusion in the first place (42 CFR § 1001.601(b)).

If the OIG determines that the provider is eligible for reinstatement, the OIG will send the provider a number of forms and releases of information to be completed, notarized, and returned. In evaluating reinstatement requests, the OIG considers the following:

  • Conduct of the individual or entity prior to, and after, the exclusion;
  • Whether there are reasonable assurances that the conduct that formed the basis for the original exclusion will not recur;
  • Whether all fines and all debts due have been repaid or if there are satisfactory arrangements for those that have not ;
  • The benefits of reinstatement to federal healthcare programs and its beneficiaries; and
  • Whether CMS has determined that the individual or entity complies with, or has made satisfactory arrangements to fulfill, all the applicable conditions of participation (42 C.F.R. § 1001.3002).

Once it has completed its review, the OIG will notify the applicant of its decision. If an application for reinstatement is denied, the excluded individual or entity has 30 days to submit documentary evidence and written argument against the continued exclusion. He or she also may make a request to present written evidence and oral argument to an OIG official. After evaluating the submission, the OIG will send the provider written notice of its final decision. If the OIG confirms its decision to deny reinstatement, the decision is not subject to administrative or judicial review, and the provider must wait at least one year to submit another request for reinstatement (42 C.F.R. § 1001.3004).


The OIG has the authority to grant a “waiver” of an exclusion under certain limited circumstances as found in 42 C.F.R. § 1001.1801, et seq. The request must come from the administrator of a federal healthcare program who is “directly responsible” for administering that program under certain limited circumstances. It may not be made on behalf of someone excluded for abuse or neglect. If the request is made on behalf of a person who has been the subject of a mandatory exclusion, the administrator must determine that: (1) the individual or entity is the sole source of an essential specialized service in a community, and (2) that the exclusion would impose a hardship to the beneficiaries of that program. Requests made on behalf of persons or entities subject to a permissive exclusion must also be made by a program administrator. However, the waiver may be granted if the “OIG determines that imposition of the exclusion would not be in the public interest” (42 CFR § 10011801(c)). If a waiver is granted, it is applicable only to the program (or programs if made by more than one) for which it has been requested, and if the basis for the waiver ceases to exist, it is rescinded. The decision to grant, deny, or rescind a waiver is not subject to administrative or judicial review (§ 10011801(c)).


The primary goal of this article is to give providers a comprehensive reference guide on the existing legal and regulatory framework of OIG exclusions and the risks and potential consequences of exclusion violations, and to make suggestions on compliance strategies to avoid those risks. However, providers are reminded that there are additional good reasons for having a rigorous and effective exclusion screening program. State Medicaid programs, for example, often have screening requirements that are more rigorous than those of the OIG; and, finally, in light of the fact that almost all exclusions are imposed for reasons related to fraud, abuse, or drugs, providers should also assess the potential risks excluded entities pose to their patients and their organization.  

>> Click here to read part 1 of this article!

To learn more about how Exclusion Screening LLC may be able to assist you with OIG background check and screenings, call us at 1-800-294-0952 or complete the form below.



OIG Background CheckPaul Weidenfeld is a former federal healthcare fraud prosecutor and Department of Justice National Health Care Fraud Coordinator. His principle area of practice is healthcare fraud and abuse and the Federal False Claims Act, and he has represented providers and individuals in healthcare matters since leaving government in 2006. He is currently “Of Counsel” to the firm of Liles Parker. Mr. Weidenfeld also has an extensive litigation background that includes numerous trials and appeals and appearances before the United States Supreme Court, the Federal 5tht Circuit Court of Appeals, and the Louisiana Supreme Court. He has received recognition both as a prosecutor and as defense counsel and has been recipient of numerous awards. These include Nightingale’s Outstanding Healthcare Litigators, the Attorney General Award for Fraud Prevention, the Office of Inspector General Cooperative Achievement Award, and the National “Case of the Year” honors by the NHCAA. In 2014, Mr. Weidenfeld cofounded Exclusion Screening, LLC. Exclusion Screening helps providers navigate the difficulties and issues related to the screening for excluded individuals and entities, and along the way he has become one of the foremost experts in the field of IG exclusions and Exclusion-related issues.



[1] The self disclosure protocol was updated on April 17, 2013, and the Special Advisory was updated May 3, 2013.
[2] The Office of Evaluations and Inspections (OIG/OEI) and the Office of Audit (OIG/OA).
[3] The table cited is intended to be a demonstrative sample of settlements. Settlements of exclusion civil money penalty cases are reported and published on the OIG website, https://oig.hhs.gov/fraud/ enforcement/cmp/index.asp.
[4] Cases referenced herein have been reported and published on https://oig.hhs.gov/fraud/enforcement.
[5] Overpayments that are not the result of a regulatory violation can occur if a provider properly screens and an employee is added to the LEIE while employed. This would limit the overpayment and not result in a CMP.
[6] The updated Bulletin was issued, in part, to provide guidance “on the scope and frequency of screening employees and contractors” See 2013 Special Advisory at 1.
[7] CIAs are imposed by the OIG in lieu of their imposing administrative remedies in cases involving FCA investigations. As such, requirements in them are sometimes concrete examples of OIG interpretations and expectations, and therefore they can be useful as “guidance.”
[8] Meaning to take actions sufficient to ensure that the employee does not touch federally reimbursed services. But even if it were possible that a provider could meet this test, the scope of the payment prohibition is so broad that it is unlikely that it would be worth the effort to remove them from the screening list.
[9] See https://downloads.cms.gov/cmsgov/archived-downloads/ SMDL/downloads/SMD061208.pdf
[10] See https://downloads.cms.gov/cmsgov/archived-downloads/ SMDL/downloads/SMD011609.pdf
[11] In addition to meeting its regulatory obligations, a proper exclusion screening program can also provide significant benefits to compliance and risk management programs. See HCCA, Measuring Compliance Program Effectiveness: A Resource Guide (Jan. 2017), available at https://oig.hhs.gov/compliance/compliance-resource-portal/files/ HCCA-OIG-Resource-Guide.pdf.
[12] States, at a minimum, require that providers screen the LEIE and the state list (if there is one). However, they may also require providers to screen additional state lists and/or additional Federal debarment lists.
[13] The author is a cofounder of Exclusion Screening, LLC, a third-party vendor of exclusion screening services and OIG background check.
[14] See OIG’s Provider Self-Disclosure Protocol (April 17, 2013). https:// oig.hhs.gov/compliance/self-disclosure-info/files/Provider-Self- Disclosure-Protocol.pdf.
[15] The result is generally proportionate to the violation because of the loss increases in proportion to the employment of the excluded employee, the amount of salary paid to that person, and the payer mix of the entity. For example, the loss involving an excluded nursing aide that was discovered soon after hire by a provider with a 25% federal payer mix would be minimal compared with that involving an excluded administrator or management employee who worked for a provider with a 75% federal payer mix for a period of months or possibly even years before discovery.

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 Exclusion Screening.  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.

Call Exclusion Screening at 1-800-294-0952 or fill out the form below for a free quote and an assessment o your exclusion compliance 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.

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.