What Medical Practices Need to Know About an OIG Exclusion

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.

Exclusion Loophole: Medicaid Managed Care

Medicaid Managed CareIn August, we discussed an OIG audit, which revealed that Medicaid providers who were terminated for cause were often able to still participate in other state Medicaid programs. Through this audit, OIG discovered that many providers were able to take advantage of a particular exclusion loophole within the Medicaid Managed Care program. Specifically, OIG discovered that 25 of the 41 states that participate in Medicaid Managed Care do not require providers to enroll in their state’s Medicaid program. The states instead permit providers to perform Medicaid managed care services based on contracts with managed care companies.

Identifying and Terminating

This loophole creates two unique problems for state Medicaid programs. First, it is much harder for a state to keep track of the providers participating in its Medicaid Managed Care program if the state does not require providers to actually enroll. In addition, if a state does not know exactly who is participating in its Medicaid Managed Care Program, then it is also difficult to search for providers to ensure that they were not terminated from participation in another state as required by ACA 6501. Second, it is very difficult for a state to terminate a provider from participating in its Medicaid program if it has no contractual relationship with that provider. In other words, it is very hard to end a relationship with someone if there was never a mutual agreement to actually begin the relationship.

Solution in Sight?

OIG recommended that CMS require state Medicaid programs to enroll Medicaid managed care providers. This would ensure that state Medicaid programs are actually able to identify and terminate providers who are terminated from participating in the federal health care programs by another state. CMS, not only heard this recommendation, but issued a Notice of Proposed Rulemaking in June 2015 which will close the loophole if finalized. Even if this loophole is officially closed, Exclusion Screening, LLC will continue to recommend that providers screen all available federal and state lists to protect their practices. This is just one of the many ways terminated providers have gamed the system. Call Exclusion Screening, LLC today at 1(800) 294-0952 for a free assessment of your needs and costs.

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.

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.

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!

Exclusion Screening Basics for Providers

Doctor in Medical Records room. Exclusion Screening Basics

Exclusion Screening Is Mandatory

Providers of medical services that participate in Federal or State Health Care Programs are required to screen all of their employees, vendors, and contractors monthly to ensure that none have been excluded from either the Medicare or Medicaid programs. Practices that fail to meet this requirement risk Civil Monetary Penalties (CMPs) and overpayments because Federal and State regulations prohibit payment for any item or service that was provided, directly or indirectly, by an excluded person.

Enforcement cases involving the employment of excluded persons are increasing dramatically. The imposition of CMPs more than doubled from 2013 to 2014, and recent case investigations have been supported by data analysis projects by the Office of Audit Services and the Office of Evaluation and Inspections. In light of the increasing enforcement efforts and the potential consequences, it is critical that providers gain a basic understanding of the issues relating to Exclusion Screening and how they can be addressed.

What is an Exclusion?

HHS/OIG has the authority (by delegation from the Secretary) to deny persons and entities the ability to participate in federal healthcare programs. When such an action is taken by the OIG, that person or entity is said to be “excluded” and placed on the List of Excluded Individuals and Entities (commonly abbreviated “LEIE”).

Federal exclusions can be either mandatory or permissive, but both have the effect of barring participation in all federal healthcare programs until such time, if ever, that the government agrees to reinstatement. Mandatory exclusions last a minimum of 5 years and generally involve felony convictions for defrauding health care programs, felony drug offenses, and convictions for patient abuse or neglect. Permissive exclusions implicate a wider range of conduct and most often involve misdemeanor health care fraud, misdemeanor drug offenses, and licensing issues.

States also have the authority to exclude individuals and entities from participating in their own programs, such as Medicaid. Currently, 37 states maintain their own exclusion lists that are separate from the OIG’s LEIE. States will generally add OIG Exclusions to their own list, but they are also free to adopt their own exclusion criteria. It is important to note that states also often fail to report their own exclusions to CMS or the OIG such that it is not uncommon for an individual to end up on a state exclusion list and not the LEIE.

Federal and State Regulations Prohibit Payment for any Item or Service Performed by an Excluded Person

Neither Medicare nor Medicaid will pay for any item or service that results in a claim for reimbursement if an excluded individual contributed to it either directly or indirectly.  The so-called “payment prohibition” is broadly interpreted by the OIG. For instance, in it’s May, 2013 “Special Advisory on the Effect of Exclusions,” they expressed the view that the preparation of a surgical tray or the inputting of information by an excluded person or vendor could taint a claim. Even volunteer work by an excluded person could trigger the prohibition unless the volunteer activities were “wholly unrelated to federal health care programs.”

Thus, a practice that hires an excluded person or does business with an excluded vendor or contractor could find that every billable service he or it contributes to is tainted. They would then be liable for a potential overpayment. Most states have also adopted this rationale and apply it to their Medicaid claims.

Don’t Risk Civil Money Penalties, Overpayments and Potential Actions under the False Claims Act

CMPs are often employed by the OIG as an enforcement tool when it discovers that claims have been made for an item or service that was provided, or contributed to, by an excluded employee. CMPs are very difficult to defend since the OIG has interpreted the relevant federal regulations to mean that the entity either “knew” of the exclusion and still submitted the claim, or that the entity “should have known,” but failed to properly screen the employee. Either way, penalties are appropriate, according to the OIG.

It should also be noted that Section 6501 of the Affordable Care Act (ACA) requires “State Medicaid Agencies to terminate the participation of any individual or entity if such individual or entity is terminated under Medicare or any other State Medicaid plan.” As such, any person terminated under any federal or state authority is subject to exclusion by all federal or state authorities. Therefore, claims by them are potentially problematic.

The failure to screen also creates a risk for providers of being sued under the False Claims Act (FCA).  The theory behind FCA claims, which is employed with increasing frequency, asserts simply that since providers know that Medicare will not pay for a claim by an excluded person, a provider that fails to screen has constructive knowledge of the person’s status or is acting in deliberate ignorance.

Federal and State Screening Requirements

Federal screening requirements, as contained in the May, 2013 Special Advisory Bulletin, requires providers to check the LEIE for employees and contractors. According to the Bulletin’s guidance, providers should “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 health care program.” Then, providers should “screen everyone that perform[s] under that contract or in that job category” on a regular (read monthly) basis. If only it was that simple.

It is important to remember that the OIG’s guidance addresses only federal concerns. State Medicaid programs also have screening requirements that generally require, at a minimum, that providers screen their own State Exclusion List (37 States have them plus Washington, D.C.) in addition to the LEIE. Many also require screening of the System for Award Management list (SAM), and/or other State specific exclusions lists (such as sex offender lists, elder abuse lists, etc.). Furthermore, it is not uncommon for States to add onerous screening requirements in enrollment or re-enrollment applications and provider agreements. For example, a number of states require a certification that it has no employees that are suspended or excluded from any Federal or State Health Care Program. Some even require certification that their employees have never been excluded or suspended from any Federal or State exclusion list.

The Difficulty in Meeting Federal and State Exclusion Screening Requirements

Despite the OIG suggestions, the ability of individual practices to meet their federal screening requirements is difficult for a provider of any size. The current web-based LEIE interface allows only five employees to be screened at a time, each of which must be entered manually. Subsequently, potential matches must be verified individually by entering their Social Security Number. This might work for a provider who only has to screen a handful of employees or contractors. For a provider with a large number of employees, however, this would be a long and difficult undertaking.

The alternative OIG suggestion is to download the entire LEIE database and compare it to an employee list, but this is equally problematic – if not more so. The LEIE currently contains almost 60,000 names and few providers have the ability to compare that to their own employee database in any reliable or economically viable way.

Even if a provider has the ability to meet the OIG’s screening obligation, State exclusion lists must also be checked and they present additional problems. To start, State lists come in a variety of formats (Word, Excel, or PDF) with different data fields. Indeed, some State lists have little more than a name and an address. Furthermore, many states have additional state-specific screening requirements for lists. Finally, as previously indicated, practices need to be aware that a number of States have enrollment applications and provider agreements that require providers to certify that they have screened all employees and contractors with all federal and state exclusion lists.

Outsourcing is the Solution that makes Sense

In addition to the logistical problems associated with screening federal and state exclusion lists, there are the practical concerns associated with ensuring compliance with a repetitive and difficult task that may be viewed as “unnecessary” by the person tasked with the job. The best solution all around is to find a vendor who will perform the task for you for a reasonable fee. This fee will probably be considerably less than the cost of doing the screening yourself.

A provider’s choice of a company price is an obvious concern, but there are other important factors to consider. For instance, a provider should ask: What is the company’s background in healthcare? Does it have an understanding of exclusion related issues? Does it have a willingness and ability to assist the provider in determining vendor related issues (such as who to screen and vendor certifications)? Will it provide support as needed? Does it have complimentary products such as hotline services that it can provide at little or no cost? 

Conclusion

Exclusion Screening, LLC is one such vendor that is worthy of consideration. It’s co-founders, Robert Liles and Paul Weidenfeld, have both served as National Health Care Fraud Coordinators for the Department of Justice, and for the last several years they have both represented healthcare providers nationwide. They are healthcare lawyers who saw a problem that healthcare providers were having, and through Exclusion Screening, LLC they have created a simple and cost effective solution. A provider need only put together a list of employees and vendors (with our assistance), and it does the rest for prices that are hard to believe. Please contact us to discuss your particular needs and get a free cost estimate today.

OIG Exclusion

Paul Weidenfeld is the author of this article. Contact Paul should you have any  questions at: pweidenfeld@exclusionscreening.com or 1-800-294-0952.

HHS/OIG Excludes Illinois Home Health Agency for Exclusion Violation!

hhs/oig
Home Health Agency Excluded for Employing Excluded Nurse

HHS/OIG recently issued a press release announcing that it had excluded an Illinois home health agency participation in all Federal health programs as a result of its employment of an excluded nurse. OIG’s investigation revealed that the home care service had billed the Federal health care programs for services provided by the excluded nurse to both Medicare and Medicaid beneficiaries.

An Unprecedented Move by HHS/OIG

As far as we can tell, this is the first time that this has been the basis of an exclusion, and it further evidences the ongoing enforcement interest that the OIG has in exclusion violations. The exclusion became effective March 19, 2015, and participation in Federal health care programs for a period of three years. It is also worthy of note that the OIG staffed the case with two Senior Counsels and a Paralegal Specialist, Eula Taylor.

If your practice doesn’t screen for exclusions, give the experts at Exclusion Screening, LLCSM a call at 1-800-294-0952 or fill out our assessment of needs and costs.

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: pweidenfeld@exclusionscreening.com or 1-800-294-0952.

OIG Releases Medicaid Fraud Control Unit (MFCU) Annual Report for FY2014

mfcu
I.   Gains in State Exclusion Enforcement Efforts Highlighted

The Office of the Inspector General’s (OIG) annual Report for the State Medicaid Fraud Control Units (MCFUs),1 released earlier this week, announced that one third of all OIG Exclusions (1,337 of 4,017) were the result of MFCU investigations, prosecutions, and convictions. We also note that licensure revocations and patient abuse (both primarily State related issues) accounted for an additional 1,933 exclusions at 1,744 and 189 respectively according to the HCFAC report issued in March. State issues and State efforts were a large percentage of last year’s exclusions. 

II. State Initiated Exclusion by MFCU

The Annual Report also highlighted a State initiated exclusion in which the West Virginia MFCU entered into a civil agreement with the owner of a durable medical equipment (DME) company. The DME company allegedly collaborated with an excluded provider to bill both Medicare and Medicaid for back braces that were provided by the excluded company. After submitting the charges to Medicare and Medicaid, the DME company allegedly kept ½ of the reimbursement and passed the remaining monies on to the excluded company using false invoices to support the billing.

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: pweidenfeld@exclusionscreening.com or 1-800-294-0952.


[1]  State Medicaid Fraud Control Units (MFCUs) investigate and prosecute Medicaid provider fraud and patient abuse and neglect in health care facilities or board and care facilities in their respective states. They are governmental entities but they must be separate and independent from the State Medicaid Program. The annual reports are prepared in conjunction with the OIG’s oversight responsibility for the Units, and are used in part to determine whether or not to re-certify the various units.

Medicare and Medicaid Exclusion Screening Compliance: A Challenging Problem with a Surprisingly Simple Solution©

exclusion

Since August 2014, the Office of Inspector General (OIG) has collected roughly $3.75 Million in Civil Money Penalties (CMPs) in cases involving the employment of persons that have been “excluded” from Medicare. This amount exceeds the total CMPs assessed by OIG on this issue in all of 2013. This continues an established trend. The number of exclusion cases has more than doubled over the last three years. The OIG specifically added exclusion violations to its Self Disclosure Protocol and followed that with new guidance on the issue within a matter of weeks last spring. Furthermore, even the Office of Audit Services has become involved with a data analysis project that supports enforcement efforts.[1] Considering this increasing interest, the failure to properly screen for excluded employees or contractors has become a real and tangible risk for providers that should not be ignored.

I.  What is An 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 to the OIG.[2] There are two types of 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. Samples of the types of conduct for which permissive exclusions may be imposed include misdemeanor conviction related to defrauding heath 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.  If I’m Not Excluded, How, or Why, Does it Affect Me?

Providers are affected because the impact of an exclusion extends to anyone who employs or contracts with the excluded person or entity. 42 CFR § 1001.1901(b) 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.” 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] 

By way of example, in the OIG’s view the preparation of a surgical tray by an excluded person or the inputting of information into a computer by an excluded person could run afoul 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]

In addition to overpayments that could result from the payment prohibition, providers can also be liable for CMPs pursuant to 42 CFR §1003.102(a)(2). Though this regulation, like § 1001.1901(b), seems intended to be restrictive in nature,[6] the OIG conflates it with the payment prohibition and broadly interprets it to authorize CMPs for any violation of the payment prohibition under circumstances where an “excluded person participates in any way in the furnishing of items or services that are payable by a Federal health care program”[7] and the provider “knew or should have known” of the exclusion.[8]

III.  What Are the Federal Exclusion Screening Requirements? Are they Difficult To Meet? Are There Separate State Requirements?

Federal screening requirements are contained in the May, 2013 Special Advisory Bulletin.[9] The Advisory Bulletin states that providers can “avoid potential CMP liability” simply by checking the OIG exclusion list, the List of Excluded Individuals and Entities (LEIE), to “determine the exclusion status of current employees and contractors”.[10] According to the Bulletin’s guidance, all providers have to do to meet this obligation is “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 health care program.”[11] Then providers must “screen everyone that perform[s] under that contract or in that job category”[12] on a “regular”[13] basis.[14] If only it was that simple.

To start, notwithstanding the fact that the LEIE is a “searchable and downloadable database that can assist in identifying excluded employees,”[15] the logistics of the screening process are extremely challenging. For instance, if a provider elects to use the “search function” of the LEIE, he 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 might work well enough 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 of downloading the LEIE database 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 not likely to want to share their employee lists. Neither would a provider want to screen the employee list of a large contractor. Thus, while the OIG does seem to recognize the issue by suggesting that providers can “choose to rely 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” had been done.[16]

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 SAM[17] and/or other State specific exclusions lists (such as sex offender lists, elder abuse lists, etc.). 

Still, it is not uncommon for States to add onerous screening requirements through their provider agreements. For example, applicants have been required to certify that no employees or contractors are currently (or have ever been) “suspended, or excluded from Medicare, Medicaid or other Health Care Program in any state” (the emphasis is ours).[18] A final thought on the various State exclusions lists is that the lists have a wide range of formats that vary from excel spreadsheets to unsearchable PDF documents further adding to the problems with screening.

IV.  A Simple, Affordable Solution

Exclusion Screening, LLCSM was created because we saw a way to create a simple and cost effective solution to the challenges and risks that exclusion screening and verification requirements were causing our clients and many other practices and organizations. It is simple because once a provider puts together its list of employees and contractors (with our assistance) we do the rest. It is cost effective because Exclusion Screening, LLCSM charges are very small in comparison to the risk. Here’s how it works:

After the employee/contractor list is finalized, we screen it through SAFER™ (State And Federal Exclusion Registry), our proprietary exclusion registry comprised of the LEIE, SAM and all 37 State Exclusion Lists. SAFER™ also has a comprehensive search protocol that is far more inclusive than either the LEIE or SAM, so the screen will generate “potential matches” which are subjected to additional analytics to determine if there are any verified exclusions. Screens are conducted on a monthly basis and a report is sent to the provider that identifies each database that has been searched, the results of each search, all verified matches, and whether there are any outstanding potential matches (some State confirmation processes are more difficult and take longer than others). Interim reports are provided immediately after upon the verification of any match, and supplemental reports track all open potential matches until they are resolved.

V. Conclusion

Our process is simple, but we feel strongly that the monthly screening of all Federal and State Exclusion Lists will stand up to any level of scrutiny. In our experience, providers want to be in compliance and are willing to pay to ensure it, but they often experience frustration because the “compliance tools” they purchase are costly, time consuming, and difficult to implement. This will never be the case with Exclusion Screening, LLCSM. We not only do all the work once we have the list to be screened, but we also guarantee the provider’s satisfaction.

This article was written by Exclusion ScreeningSM co-founder, Paul Weidenfeld, and originally published within the National Alliance of Medical Auditing Specialists (NAMAS) “Medical Auditing Tip of the Week 12-12-2014″.

Paul Weidenfeld, Co-Founder and CEO of Exclusion Screening, LLC, 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: pweidenfeld@exclusionscreening.com or 1-800-294-0952.


[1] The project was identified last month in a press release announcing a CMP settlement for $357,341.96 with a chain of 74 long term care facilities. Seven excluded employees were found within the chain (less than 1 per 10 facilities), and the Office of Audit’s project was specifically credited for identifying 5 of the 7.

[2] See 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. It is noted, however, that this is a bulletin and not a formal regulation.

[10] Id., at 15.

[11] Id., at 15-16. The “same analysis” is used for contractors, subcontractors and employees.

[12] Id., at 16.

[13] Id., at 15 n.27.

[14] Id., at 16.

[15] Id., at 14.

[16] Id., at 16.

[17] 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.

[18] See, e.g., Rule § 352.5 of the Texas Administrative Code which states:

Prior to submitting an enrollment application, the applicant or re-enrolling provider must conduct an internal  review to confirm that  neither the applicant or the re-enrolling provider, nor any of its employees, owners, managing partners, or contractors (as applicable), have been excluded from participation in a program under Title XVIII, XIX, or XXI of the Social Security Act.

See also the Louisiana Medicaid Provider Agreement which requires applicants to certify that no employee is:

not now or … ever been: suspended or excluded from Medicare, Medicaid or other Health Care Program in any state” or “employed by a corporation, business, or professional association that is now or has ever been suspended or excluded from Medicare, Medicaid or other Health Care Programs in any state” (emphasis added).

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