Health Care Providers Should Consider the Ramifications of “Taking a Plea” in a Criminal Case or Agreeing to a Licensure Action. It May Trigger a Mandatory or Permissive OIG Exclusion Action.

(July 16, 2018):  Perhaps the most severe administrative sanction available under the Social Security Act stems from the authority of the Secretary for the Department of Health and Human Services (HHS) to exclude individuals and entities from participating in Federal and State health benefits programs.[1]  The Secretary has delegated[2] this authority to the HHS, Office of Inspector General (OIG)[3]. As a recent comprehensive, first-of-its-kind study by found that during the period 2013 to 2017, approximately 90% of the permissive OIG exclusion actions taken were based on an adverse administrative action taken against a healthcare provider’s license.  This article examines a decision issued earlier this year by the HHS Departmental Appeals Board (DAB or Board) where the Board examined a licensure-related exclusion action in considerable detail.  

 I.  Brief Overview of OIG Licensure-Related Exclusion Actions: 

With the passage of the Medicare-Medicaid Anti-Fraud and Abuse Amendments[4] in 1977, mandatory OIG exclusion became mandated in cases where a physician and other practitioner has been convicted of program-related crimes. (now codified at section 1128 of the Social Security Act).  Since that time, various additional bases for both mandatory[5] and permissive[6] exclusion have been enacted. Collectively assessed, the most frequent statutory basis relied on by the OIG when seeking to exclude an individual from participation in Federal and State health care programs is “42 USC §1320a-7(b)(4) License Revocation or Suspension.[7]”  As this provision set out:

“Any individual or entity—
(A) whose license to provide health care has been revoked or suspended by any State licensing authority, or who otherwise lost such a license or the right to apply for or renew such a license, for reasons bearing on the individual’s or entity’s professional competence, professional performance, or financial integrity, or
(B) who surrendered such a license while a formal disciplinary proceeding was pending before such an authority and the proceeding concerned the individual’s or entity’s professional competence, professional performance, or financial integrity.”

   OIG Exclusion Check

 II.  Case Study: DAB ALJ Decision No. CR4985
[8]; DAB Appellate Div. Decision #2848.[9] 

In this case, a Virginia-licensed Chiropractor pled guilty in 2016 to one count of manufacturing marijuana, a felony. He was sentenced by the Court to 5 years of incarceration (4 years and 11 months suspended) and ordered him to pay a $2,500.  Based on this felony conviction, the Virginia Board of Medicine suspended the individual’s license to practice chiropractic indefinitely.[10]
  • The OIG excluded the individual under 42 USC §1320a-7(b)(4).
The OIG based its exclusion on the indefinite suspension, which links reinstatement to the term of the licensure suspension. The OIG cited 42 USC §1320a-7(b)(4) as its basis for exclusion. 
  • ALJ review of the OIG’s exclusion action.
The Chiropractor (Petitioner) subsequently filed a timely request for review by an Administrative Law Judge (ALJ).  Both the OIG and the Petitioner subsequently filed arguments and related documentation in support of their position.  Notably, the Petitioner’s submissions included (but were not limited to) a copy of his North Carolina chiropractic license and certificates showing his successful completion of chiropractic training courses.  As the ALJ’s decision reflects, after the record had closed, the Petitioner submitted additional documentation, including a letter attesting to his competence and a copy of his active North Carolina chiropractic license.  The ALJ refused to admit the additional materials into record based on the fact that were not submitted in a timely fashion and were irrelevant.  
Further complicating the case was the fact while the matter was pending before the ALJ, the OIG issued a second exclusion notice, advising the Petitioner that pursuant to section 1128(a)(4) of the Social Security Act (as codified at 42 USC §1320a-7(a)(4)), he was being mandatorily excluded from program participation for five years. As set out under 42 USC §1320a-7(a) Mandatory exclusion

“The Secretary shall exclude the following individuals and entities from participation in any Federal health care program (as defined in section 1320a-7b(f) of this title). . . ”
Since this mandatory exclusion action was based on the Petitioner’s felony conviction of a criminal offense related to the manufacture, distribution, prescription, or dispensing of a controlled substance, it fell under the following exclusion provision:
“(4) Felony conviction relating to controlled substances:
Any individual or entity that has been convicted for an offense which occurred after August 21, 1996, under Federal or State law, of a criminal offense consisting of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.”

Notably the Petitioner does not appear to have appealed the five-year exclusion action. 
Upon consideration of the facts and the evidence, the ALJ sustained the OIG’s decision to exclude the Petitioner from participating in Medicare, Medicaid, and other federal health care programs.
  • Appellate review of the ALJ’s decision.
The Petitioner appealed the ALJ’s decision sustaining the OIG’s decision to exclude him from participation in Medicare, Medicaid and all Federal health care programs. As the ALJ’s ruling reflects, the Petitioner was to be excluded as least until he regained his Virginia chiropractic license. On appeal, the Petitioner raised several issues that were addressed by the Appellate Board:

Petitioner Issue #1:  First, the Petitioner argued that the time frame for exclusion was not adequately addressed by the judge.  The Petitioner further stated that he “did not agree with the length of exclusion because it was excessive and unjust.”

Board Response to #1: As the Board noted in its appellate ruling, in situations where the OIG has excluded an individual’s health care license is revoked or suspended for reasons bearing on the individual’s professional competence, professional performance or financial integrity, the Social Security Act does not delegate an ALJ the discretion to set the length of the exclusion for less than the period during which the individual’s license is suspended. (See, Social Security Act Act § 1128(c)(3)(E); 42 C.F.R. § 1001.501(b)). 

Petitioner Issue #2:  Petitioner argued that the ALJ failed to consider letters from patients and colleagues attesting to the Petitioner’s professional competence and good character in support of a reduction in the length of Petitioner’s exclusion.
Board Response to #2: As the Board noted in its decision, neither it nor the ALJ has the authority to consider the letters from the Petitioner’s patients and colleagues attesting to his professional competence and good character for the purpose of reducing the length of Petitioner’s exclusion.  Simply put, equitable arguments and evidence submitted in an effort to obtain a reduction in the length of exclusion cannot be considered.

Petitioner Issue #3:  The Petitioner’s appeal also raised the imposition of a second and separate OIG five-year exclusion action (based on 1128(a)(4) of the Social Security Act; 42 USC §1320a-7(a)) that was imposed while the Petitioner’s appeal was pending before the ALJ.  In the Board proceeding, the Petitioner argued that he was “appealing the five-year exclusion because it is excessive and unreasonable in [his] case.”  He further stated that he was “requesting that [his] exclusion remain as originally reported: three years or until I regain my Virginia license because that would support my position for Inclusion.”

Board Response to #3:  As the Board noted in its decision, the Petitioner only appealed the initial permissive exclusion action under 1128(b)(4), 42 USC §1320a-7(b)(4).  There was no evidence that the Petitioner had requested an ALJ hearing to contest the OIG’s second exclusion action brought under 1128(a)(4) of the Social Security Act; 42 USC §1320a-7(a).  As a result, the Board could not consider the second exclusion action.
  • Lessons to be learned from this case.
Both the ALJ and Board decisions in this case really highlight the lack of discretion that these adjudicators have when it comes to “adjusting” or “reducing” a health care provider’s length of exclusion for less than the period during which the individual’s license is suspended.  As the case noted, the Petitioner was also licensed in North Carolina, and presumably there were no restrictions on his North Carolina.[11]  Unfortunately, the fact that the Petitioner was fully licensed in North Carolina was irrelevant to the decisions of both the ALJ and the Board.  As 42 C.F.R. § 1001.501(b) expressly provides: 

“(b)Length of exclusion.
(1) Except as provided in paragraph (b)(2) of this section, an exclusion imposed in accordance with this section will not be for a period of time less than the period during which an individual’s or entity’s license is revoked, suspended, or otherwise not in effect as a result of, or in connection with, a State licensing agency action.  (Emphasis Added).

So, what should a health care provider do if he or she receives notice that the OIG is seeking to exclude him or her based on a licensure suspension action?  It is important to keep in mind that a licensure-based exclusion action is a permissive action that may or may not be pursued by the OIG.  To the extent that there is any chance to convince the OIG that the agency should decline to exercise it permissive exclusion authority, now is the time for your legal counsel to make its pitch.

Once the OIG has formally exercised its permissive exclusion authority, the restrictions set forth under 42 C.F.R. § 1001.501(b) must be applied.  Neither an ALJ nor the Board has the discretion to deviate from the time period requirements imposed by statute.  Although the OIG rarely waives its discretion to pursue a permissive licensure-based exclusion action, providers should.

This case also serves as a stark reminder that neither an ALJ nor the Board is in a position to “weigh” the equities in a licensure-based exclusion case when assessing the length of time imposed for the exclusion.  Adjudicators are required by statute to determine whether an exclusion determination made by the OIG was consistent with the law.  Equitable arguments and evidence such as those submitted by the Petitioner in this case cannot be considered in a licensure-based exclusion case.  An individual cannot have an exclusion lifted until his or her license is reinstated.  Period. 

In recent years, the number of exclusion actions imposed by the OIG has continued to grow. While there is little or no flexibility with respect to some of the bases for exclusion, every case is based on a unique set of facts, some of which may present opportunities to negotiate a more favorable period of exclusion with OIG, or even avoid exclusion all together. 

We strongly recommend that you contact experienced health law counsel at the first sign that you may be excluded from participation in Federal and State health care programs.  In terms of strategy, a health care provider’s best course of action is to engage experienced health law counsel at the earliest opportunity, preferably before an adverse action has been taken against your professional license.  A comprehensive response strategy is essential so that you possible minimize the adverse collateral effects of an adverse licensure action.  The attorneys at Liles Parker have extensive experience representing health care providers in exclusion-related proceedings. 

OIG ExclusionRobert W. Liles serves as Managing Partner at the health law firm, Liles Parker, Attorneys and Counselors at Law.  Liles Parker attorneys represent health care providers and suppliers around the country in connection with UPIC audits, OIG exclusion actions and state licensure board disciplinary proceedings.  Has an exclusion action been proposed against your license?  We can help.  For a free initial consultation regarding your situation, call Robert at:  1 (800) 475-1906.

[1] The term “Federal health care programs” is defined under Section 1128B(f) of the Social Security Act as:
(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).
42 U.S.C. § 1320a-7b(f) (2012).
[2]See Updated: Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs, U.S. Dep’t of Health & Human Servs.: Office of Inspector Gen., at 2-3 (May 8, 2013) (stating that . . . the Secretary has delegated authority to OIG to exclude from participation in Medicare, Medicaid, and other Federal health care programs persons that have engaged in fraud or abuse and to impose civil money penalties (CMPs) for certain misconduct related to Federal health care programs”).
[3] The OIG maintains a website containing up-to-date information on federal health care program exclusion rules, which can be found at
[4] While Public Law 95-142’s “exclusion” provisions are important, the legislation is best known for its impact on the Federal Anti-Kickback Statute.  More specifically, the legislation made violations of the Federal Anti-Kickback Statute a felony. It also made those who offered remuneration for referrals and those who received them, subject to various penalties.
[5] Under the government’s mandatory exclusion authority (as set out under Section 1128(a) of the Social Security Act), any individual or entity convicted of certain offenses must be excluded from participation in federal health care programs.  The length of a mandatory exclusion action taken can last a minimum of five years.
[6] Depending on the circumstances, OIG may also exercise “permissive” or discretionary authority to exclude an entity or an individual from participation in federal health care programs.
[7] Under 42 USC §1320a-7(b)(4), any individual or entity whose professional license to provide health care has been revoked or suspended, or has lost the right to apply for a license, CAN be excluded from participation, at OIG’s options.
[8] DAB ALJ Decision No. CR4985, dated December 13, 2017.
[9] DAB Appellate Div. Decision No. 2848, dated February 6, 2018.
[10] Under the Virginia Code, the Board of Medicine may suspend a license indefinitely for “acts of unprofessional conduct,” which include “knowingly and willfully” committing a felony; violating any statute or regulation relating to the manufacture, distribution, dispensing, or administration of drugs; and conviction of a felony.  See Virginia Code §§ 54.1-2915(A)(10), (17), and (20).
[11] This is an interesting point raised by the Petitioner. In some states, the revocation of a professional license is permanent and can only be reinstated upon the submission of a new application.  Even then the state board has the discretion of whether or not to consider the new application.  Theoretically, a health care provider could be licensed in 49 states and still be excluded due to a suspension action in the 50th state.
As an aside, the public record does not address whether North Carolina, like many states, normally imposes reciprocal disciplinary actions based on those taken in other jurisdictions.

DOJ Announces $4.7B in FCA Recoveries: What Does It Mean?

DOJ Announces $4.7 billion in FCA Recoveries

FCA RecoveriesBy Paul Weidenfeld
December 16, 2016

The “Third Best Year” in False Claims Act History?

The Department of Justice announced earlier this week that FY 2016 was its third best year in “False Claims Act History” with recoveries of more than $4.7 billion in settlements and judgments. Though it as been trumpeted as DOJ’s return to its record setting years, an examination of the numbers reveal that healthcare FCA recoveries have actually been remarkably consistent over the past seven years, and that they say more about the emphasis DOJ places on resolving “big” cases than they do about overall fraud enforcement.

A Dependence on Large Casesdoj

Big settlements make for impressive press releases and are good for overall numbers, and FY 2016 was no exception.   The “Top 5” settlements accounted for over 52% of all federal recoveries at 2.5 billion, and total announced recoveries for these cases was a staggering $3.55 billion! Following the playbook, the “Top 5” healthcare settlements accounted for a whopping 60% of all federal healthcare FCA recoveries at just a  tick over $1.5 billion. The dependency on large settlements is not new. Indeed, according to research that we have conducted, the five largest settlements consistently accounted for over 50% of recoveries in every calendar year fro 201-2014 just as it did in FY 2016.

Healthcare Recoveries Remarkably Stable

Despite the dependence on obtaining a few large settlements each year, DOJ’s $2.6 billion in healthcare FCA recoveries for FY 2016 continued a trend of surprising stability in recoveries attributable to healthcare.  Beginning in FY 2010 with the recovery of $2.5 billion, over the seven year period including this year, recoveries attributed to healthcare enforcement have averaged $2.5 with a consistency that belies the suggestion that enforcement has been “up and down” or inconsistent.  The recoveries over that period of time are as follows: FY 2010 – $2.5B, FY 2011 – $2.4B, FY 2012 – $3.1B, FY 2013 – $2.7B, FY 2014 – $2.4B, FY 2015 – $2.1B, and FY 2016 – $2.6B!

Fluctuations are Directly Tied to Housing and Financial Fraud Settlements

Although the fluctuations in FCA recoveries from year to year are often related to how “good” a year DOJ has had, the reality is that with healthcare relatively stable, the differences in recoveries over the last seven years have been directly tied to the Housing and Financial Fraud Settlements. In 2012, DOJ’s reported “record recoveries” were attributable to the $1.7 billion in recoveries it received as part of the landmark housing settlement; in the new record of $6 billion recovered in 2014, 3.3 billion came from banking and housing recoveries; and 2016’s “third best” year was tied to the $2 billion in housing and banking settlements.

Recovery Numbers Do Not Necessarily Equate to Enforcement Efficiency

If enforcement is the process of ensuring compliance with the applicable laws and regulations, it is reasonable to question whether it is fair to equate larger FCA recoveries with greater or more effective enforcement in general — or more particularly, with last year’s major settlements as four of the top five cases were by repeat defendants.  This was the second time Pfizer paid a large sum for Wyeth’s alleged misconduct ($784.6 million in 2016 and $413.2 in 2013); Novartis paid $410 million in 2016 and $495 million in 2010 in settlements; Tenet’s $513 million settlement in 2016 was preceded by a $900 million settlement in 2006 that was a “record settlement” at the time, and Wells Fargo participated in the landmark $25 billion dollar in 2012 before entering into the 1.2 billion it paid this year. 

Could Effective Enforcement Result in Lesser instead of Greater Recoveries?

At some point, one might expect greater or more effective enforcement to result in less fraud and, therefore, lower recoveries.  After all, even though enforcement efforts recovered almost $9 billion in Housing and Financial Fraud Settlements, aren’t those losses attributable in some measure (perhaps in large measure) to a lack of enforcement in the first place?  One would also expect that it might detect situations before they turned into “top heavy” billion dollar losses that drive enforcement recoveries so high.

Congratulations are Still in Order

I may wonder about the “meaning” of the recovery of $4.76 billion dollars in FY 2106, but I certainly don’t question its value or importance — or the work and efforts that went into obtaining them. It is an accomplishment and congratulations are in order.

Providers should take notice and do all that they can to stay out of harms way!


This article was written by Paul Weidenfeld, Co-Founder of Exclusion Screening, LLC.

A frequent speaker and writer on issues related to the Fraud and Abuse Issues, the False Claims Act and Issues related to Exclusions and Exclusion Screening, feel free to reach out to Paul at or to call him at 202-754-8001.


How Compliance Hotlines Can Save You Money!

Compliance Hotlines

By Paul Weidenfeld, March 4, 2016.  An essential element of all compliance plans is developing and promoting “effective lines of communications.” In support of that element, Health and Human Services Office of Inspector General (HHS/OIG) has been urging providers to adopt anonymous compliance hotlines since 1998. CMS, on the other hand, actually requires that Fee-For-Service Contractors (by its 2005 Guidance), and Managed Care and Prescription Drug Contractors (through manual provisions) have “mechanisms that permits anonymous reporting.”

But many providers, while complying, view hotlines with suspicion. They fear that a “successful” compliance hotline might incentivize “whistleblowers” and ultimately result in additional risk and cost to their organization. Though understandable, this fear is misplaced. Properly implemented and supported, hotlines provide valuable support to compliance plans and overall risk management programs. Rather than increasing risk and costing money, compliance hotlines demonstrably decrease risk and save money. Here’s how:

Tips are the Most Common Means of Detecting Fraud

Fraud accounts for an estimated 10% of healthcare spending (almost $1 Billion in 2013). The best way to reduce fraud’s impact is through early detection and quick resolution. According to a recent report on occupational fraud by the Association of Certified Fraud Examiners (ACFE) “tips” are easily the most common means of detecting fraud. It found that over 40% of all cases were detected by a tip — more than twice the rate of any other detection method – and as the percentage of detections by tip increases, detection by other, external means decrease.

The Importance of Compliance Hotlines in Generating Tips

The ACFE report referred to above also looked at the impact of compliance hotlines on generating tips and it found that companies with compliance hotlines discovered fraud through tips 51% of the time as compared to 33% for companies that didn’t have a hotline. Not surprisingly, the companies without compliance hotlines also had higher rates of detection through other means such as external audits and law enforcement. Several factors are cited for the disparity, but the principle reason is the anonymity and confidentiality afforded by hotlines. Indeed, it was reported that 60% of all employee tips were anonymous.

Why Detection by “Tip” is Important

In addition to being the most common means, tips are the most cost-effective way of detecting fraud by external means. Several factors contribute to this, but the report found a significant difference in results for frauds detected by tips as compared to any other external detection method. For example, the median duration and cost of a fraud discovered by tip was 18 months and $150,000, whereas frauds detected by external audit or by accident lasted at least a year longer and cost over twice as much to resolve. Matters detected by law enforcement, a worst case scenario, lasted 30 months and cost $1,250,000!

Compliance Hotlines Don’t Create “Additional” Problems

It is unrealistic to think that issues identified though a hotline would have “fixed themselves and gone away” or, perhaps, never have been found. More likely, the problem would continue unabated until it was discovered by accident or it was picked up by an audit (hopefully, an internal one), or until an employee who would have reported it lost faith in the organization’s ability to deal with the problem and aired his concerns outside the organization – perhaps to law enforcement, perhaps to a lawyer or maybe to both. Regardless, once a problem reaches that point, it is outside the control of the organization. Thus, any resolution will be a long time coming and expensive when it gets there!


Compliance Hotlines save organizations money. By increasing the number of tips, organizations can learn about more problems. This gives them the ability to respond to them sooner and fix them faster. Therefore, small problems won’t become big ones – and big problems can be managed before they become disasters!

Follow us on twitter to get all the latest news and updates on exclusion and compliance!


OIG Exclusion

Paul Weidenfeld is the CEO of Exclusion Screening, LLC and co-founder with Robert W. Liles. Both Paul and Robert are long time health care lawyers and both were also former Health Care Fraud Coordinators for the Department of Justice. Call or contact Paul today at, or at (800) 294-0952 if you have any questions.

2015 Mid-Year Exclusion Enforcement Action Review

OIG Exclusion EnforcementOIG has been busy cracking down on providers who employ or contract with excluded persons or contractors.  In fact, by the end of July OIG settled 27 exclusion violation cases through investigations or self-disclosures.  By way of reminder, there were 60 enforcement actions related to OIG exclusion violations in 2014.  Following is our 2015 mid-year review of OIG’s enforcement against those who employ or contract with excluded providers.

Civil Monetary Penalties 





In six months, OIG recouped $3.79 million from providers who knew or should have known that an employee was excluded from participation in the federal health care programs.  A third of the settlements in the past six months resulted in payments between $100,000 and $250,000 per provider.  The Civil Monetary Penalties (CMPs) returned in each enforcement action range from $10,000 to $431,000 and an overwhelming majority of the cases only involve one excluded individual.  In fact, only 4 of the 27 enforcement actions this year involved more than one excluded provider.  This goes to show that the penalty a provider may face for employing or contracting an excluded person varies widely depending on exactly how many items or services that person provided.

Industry Breakdown

One trend that remains steady is that nursing homes continue to be the industry hit the hardest with enforcement actions.  Following behind nursing homes were hospitals and home health agencies with four enforcement actions each so far this year.  We expect that nursing homes and home health agencies will remain hot beds for OIG exclusion enforcement action as the year progresses.

State Breakdown

One area where 2015 enforcement actions depart from 2014 is the states in which OIG has imposed CMP liability. Texas and California were still hit hard, but Minnesota actually surpassed California with three enforcement actions in the first half of 2015.  Virginia has also been under OIG’s microscope, with three enforcement action settlements this year, making quite the jump from just one in 2014.  We have also seen enforcement action in states that did not have any issues in 2014 like Alabama, Illinois, Indiana, Maryland, and Washington.


While we try to draw comparisons to shed light on OIG’s exclusion enforcement action focus, the fact of the matter is that OIG exclusion enforcement is here to stay.  Nursing homes continue to be a target and the cost of employing just one excluded individual is hefty.  The risks associated with failing to properly screen your employees and contractors is far too high and drastically outweighs the cost of properly screening against all available State and Federal lists monthly.  Contact Exclusion Screening, LLCSM today for a free consultation at 1-800-294-0952 or fill out our online service form.

Also read more on OIG Exclusion

Why Do I Need a Compliance Hotline?

Compliance Hotline ReportingOne of the seven steps to an effective compliance plan is to develop effective lines of communication. While it is important to foster open lines of communication within your practice, many employees may fear retribution. Hence, they may feel more comfortable reporting complaints anonymously or at least to a third party vendor. Fortunately, providing an outside reporting mechanism such as the hotline offered by Compliance Hotline is an extremely cost effective solution. Within this article we will address some of the benefits of outsourcing your compliance hotline.

I. Minimize Risk by Fostering Confidential Compliance Hotline Reporting

Under Sarbanes-Oxley, certain whistleblowers are protected from employer retaliation for reporting instances of fraud. This provision permits an employee to file a complaint with the Secretary of Labor if he is discriminated against for “blowing the whistle.” However, many employees may not be educated about this law, or may still fear retribution. Therefore, they may not file a report to an internal department. By providing an outside confidential report line, like Compliance Hotline, your employees will be more comfortable reporting issues. You will also become aware of any lurking issues within your practice more quickly.

II. Protect your Practice from Fraud and Liability with the Compliance Hotline 

According to the Association of Certified Fraud Examiner’s Report to the Nations, tips are the most common mode of detecting fraud cases within organizations. Tips have a 40% fraud identification rate. Internal audits and management reviews follow as the second and third best detection methods. They have 15% and 13% identification rates, respectively.

Companies that utilized hotlines reported that 46% of fraud cases were reported as tips. However, only 10% of cases were discovered through internal audits, and merely 3% of cases were detected through surveillance/monitoring. Companies who did not provide hotlines had more abysmal numbers, identifying only 30% of fraud cases through tips.

ComplianceHotline powered by Exclusion Screening, LLC is a cost effective way to ferret out and minimize fraud within your practice. Contact us today at 1-800-294-0952 or online for a free consultation so that you can resolve any potential fraud issues before they get out of hand.

Read more about How Compliance Hotline Can Save You Money

Compliance Hotline Reporting

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

Excluded Podiatrist Convicted of Racketeering and Health Care Fraud

health care fraud
I.  Excluded Podiatrist Commits Health Care Fraud   

A Michigan podiatrist who was excluded from participation in the Federal health care programs for a period of 25 years allegedly entered into a health care fraud scheme with another Michigan doctor to perform podiatric services at his clinic. The excluded podiatrist, whose license was also revoked, practiced podiatry at the clinic and occasionally presented himself to patients as the non-excluded doctor. The physicians billed the government and private insurance for the services as if the non-excluded doctor performed the podiatric services.

The Michigan Attorney General filed multiple charges against the excluded provider. These charges included: one count of Racketeering, a 20-year felony carrying up to a $100,000 fine; one count of Unauthorized Practice of a Health Profession, a 4-year felony with up to a $5,000 fine; thirteen counts of Health Care Fraud, a 4-year felony carrying up to a $50,000 fine; and five counts of Medicaid Fraud, a 4-year felony with up to a $50,000 fine. Charges were also filed against the non-excluded provider, which included: one count of Racketeering; thirteen counts of Health Care Fraud; and five counts of Medicaid Fraud. The charges against the non-excluded provider carried the same felony consequences and fines.

The facts released by the Michigan Attorney General do not indicate whether the non-excluded provider “knew” that the podiatrist’s license had been revoked or that he was excluded from participation in the Federal health care programs. Whether he had affirmative knowledge, however, is irrelevant under the “knew or should have known” standard.   

II.  Non-Excluded Provider “Should Have Known” of Partner’s Exclusion

The non-excluded provider, under the 2013 OIG Exclusion Guidance, should have checked the OIG-LEIE prior to entering into the arrangement with the excluded provider and monthly thereafter. In addition, the Michigan Medicaid Provider Manual recommends that providers check the Michigan excluded provider list in addition to the websites of other sanctioning bodies “to avoid accepting orders, prescriptions or referrals . . . from these sanctioned providers.”[1] Furthermore, private insurance companies, like BlueCross Complete of Michigan, mandate that their providers screen against the LEIE and GSA-SAM prior to hiring and continue to screen at least monthly.[2] 

III. Conclusion

With regard to the OIG and Michigan state requirements, any attempt by the non-excluded provider to invoke a defense that he was unaware of the podiatrist’s excluded status will likely fail. The provider had an obligation to check the LEIE, GSA-SAM, and Michigan excluded provider list, among others. Therefore, the non-excluded provider should have known of the podiatrist’s exclusion status, even if he did not in fact know.

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.  Exclusion Screening, LLC  reviews Federal and State exclusion screening requirements regularly to help ensure that its clients’ employees and contractors are properly screened. Contact Exclusion Screening, LLC  for a free consultation at 1-800-294-0952 or online

[1]  Medicaid Provider Manual, Michigan Dep’t of Comm. Health, 15 (Oct. 1, 2014).

[2]  BlueCross Complete Provider Manual, BlueCross Complete of Michigan, 37 (2014).

CMS Finds Fault with Exclusion Information Sharing Between States

I.  Take It from CMS: If You’re Excluded in One State, You’re Excluded in All States

Section 6401(b)(2) of the Affordable Care Act (ACA) required the Centers for Medicare and Medicaid Services (CMS) to create a national database where State agencies could share and access information about individuals and entities that were terminated from the Medicare, Medicaid, or CHIP programs.[1] This platform would help states comply with ACA section 6501,[2] which mandates that a provider must be terminated in all state Medicaid programs if he or she were terminated “for cause”[3] in one state. CMS created the Medicaid and Children’s Health Insurance Program State Information Sharing System (MCSIS) to make this exclusion information available to all State Medicaid agencies.[4]

  Under section 6401(b)(2), states were asked to submit the terminated provider’s name, National Provider Identifier (NPI), and other identifying information to MCSIS. This information was incorporated into MCSIS so that other states could identify providers that needed to be terminated. Even though CMS has the authority[5] to require states to submit this information, it has only asked states to comply. CMS’ failure to make reporting mandatory resulted in a very deficient database.

II.  CMS’ Comprehensive List…Not So Comprehensive

  Only thirty-three states[6] submitted information to CMS and many of the records were incomplete. For example, CMS asked states to only submit providers that were terminated “for cause,” but over 2,000 records lacked a “for cause” termination.[7] In addition, 59 percent of the records also did not include provider NPIs,[8] which the ACA specified as a mandatory database component.[9] Many other data fields, like provider type[10] and address, were blank.

  Seventeen states[11] and the District of Columbia failed to submit any data in the two years between MCSIS’s creation and the Office of the Inspector General’s (OIG) review.[12] Four states[13] submitted 72 percent, or 3,413 of 4,713 total Medicaid records.[14] The other states that reported information reported very small numbers. For example, Massachusetts only submitted two excluded providers between 2011 and 2013.[15] Even though, it excluded fifteen providers in 2012.[16]

 OIG concluded that CMS needed to improve its exclusion information-sharing process.[17] Specifically, CMS should mandate that state agencies report all “for cause” terminations.[18] OIG also stated that CMS should also remove all providers that were not terminated “for cause,” or if it would like to expand its database, then it must issue new guidance instructing the states as to which providers must be terminated under section 6501.[19]

III.  CMS Creates New List: OnePI Portal

  CMS agreed with OIG, and disclosed that it is in the process of creating a private database, the OnePI portal.[20] OnePI is accessible to only CMS, State Medicaid agencies, and CHIP. It provides a private platform for states to share information about terminated providers.

 Under this new system, CMS will require states to submit a copy of the termination letter sent to the provider. Then, CMS will review these letters to ensure that the provider should be included in the OnePI database.[21]

 CMS has not provided a proposed completion date for OnePI.[22] Furthermore, there is no information available in regard to whether this data will be incorporated into the LEIE, if it will be available to providers, or if states will be required to integrate excluded providers from other states into their Medicaid termination lists.

IV. Conclusion

This inaccurate reporting of data illustrates why it is critical to check all state Medicaid lists in addition to OIG-LEIE and GSA-SAM. You will be held responsible if you employ or contract with an excluded individual. A provider that is excluded in one state is excluded in all states. 


Ashley Hudson, Associate Attorney at Liles Parker, LLP and former Chief Operating Officer for Exclusion Screening, LLC, is the author of this article. Contact the exclusion experts at Exclusion Screening, LLCSM today for a free consultation by calling 1-800-294-0952 or online.

[1] Dep’t of Health and Human Servs. Office of the Inspector Gen., CMS’s Process for Sharing Information about Terminated Providers Needs Improvement, 1–2 (Mar. 2014).

[2] 42 C.F.R. § 455.416(c).

[3] States are only required to terminate providers from their Medicaid programs if they were terminated “for cause” under another state program. “For cause” means a provider was terminated due to fraud, integrity or quality.  Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 2.

[4] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 1.

[5] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 13.

[6] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 7.

[7] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 7.

[8] Not all providers are assigned NPIs. Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 4, 9.

[9] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 2.

[10] Thirty-three percent of MCSIS records did not contain information about the provider type. Furthermore, some states identified 95 percent of providers as “other” when 25 different specific provider types were provided in a drop-down menu. See Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 11.

[11] The seventeen states were: Colorado, Hawaii, Kentucky, Minnesota, Montana, New Hampshire, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, South Carolina, South Dakota, Texas, Utah, West Virginia, and Wyoming. See Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 16.

[12] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 7.

[13] California, New York, Pennsylvania, and Illinois. See Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 7.

[14] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 7.

[15] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 16.

[16] Massachusetts Health and Human Services, Suspended/Excluded MassHealth Providers as of 5/31/2014, 2, (last accessed June 6, 2014).

[17] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 13.

[18] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 13.

[19] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 14.

[20] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 22.

[21] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 22.

[22] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 22–23.

2015 OIG Work Plan: Prevention of Grant Awards to Excluded Persons and Entities

oig Exclusion Work Plan
By Paul Weidenfeld

I. Concerns of the 2015 OIG Exclusion Work Plan

The Office of Inspector General (OIG) expressed concern regarding exclusion and suspension enforcement in its 2015 OIG Work Plan. The OIG announced that its Office of Audit Services will study whether the operating divisions within its own agency have been taking adequate precautions to ensure that individuals and entities that have been suspended or debarred are not being awarded Federal grants or contracts.[1]  Noting that “Federal agencies are required to make awards only to responsible sources,” the 2015 OIG Work Plan states that precluding firms or individuals that have been excluded or suspended from receiving contracts or assistance is one of the ways of achieving that objective. The Work Plan suggests it is following up on a Government Accountability Office (GAO) Report that “found that some agency programs need greater attention, and government wide oversight could be improved.”

II. OIG Agency Accountability 

We must note, however, that the study seems only to include suspensions and debarments (which are temporary exclusions or exclusions for a fixed period of time) reported in the System for Award Management (SAM), the exclusion database maintained by the General Services Administration (GSA). While this might signify that OIG is satisfied with agency enforcement of its own administrative sanctions, the important takeaway is that OIG is holding its own agency to a standard that includes screening the SAM in addition to the LEIE.

 III. Conclusion

The inclusion of this study in the work plan has several important messages.  First, providers are reminded that screening of the LEIE alone is clearly not enough. Secondly, indirect payments in the form of contracts cannot be ignored in one’s screening protocol. Finally, enforcement of the payment prohibition to excluded persons and entities remains a high enforcement priority for the OIG.

Read more on OIG Exclusion

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. Contact Paul should you have any  questions at: or 1-800-294-0952.


[1] OAS; W-00-15-59024 which is expected to be issued in FY 2015.