What to Know About the New CMS Preclusion List

By: Cason Liles

New CMS Preclusion List(February 12, 2019) Beginning April 1, 2019, CMS’s new Preclusion List will go into effect subsequently barring many healthcare professionals from receiving payment for Medicare Advantage (MA) items and services or Part D drugs furnished or prescribed to Medicare beneficiaries. But what is the Preclusion List? Who is on it? Why was created? Don’t worry, we’re going to break down everything you need to know about this new CMS action and how it can affect your organization.

 I. What is the Preclusion List?  

The Preclusion List is a list generated by CMS that contains the names of prescribers, individuals, and or entities that are unable to receive payment for Medicare Advantage (MA) items and service and or Part D drugs prescribed or provided to Medicare beneficiaries.

 II. How Does Someone End up on The Preclusion List?  

CMS has given two ways for which someone can end up on the Preclusion List. The first one way is if you:

“Are currently revoked from Medicare, are under an active reenrollment bar, and CMS has determined that the underlying conduct that led to the revocation is detrimental to the best interests of the Medicare program”

 However, even if you are revoked from Medicare, you still may find yourself on the Preclusion List. CMS is also precluding anyone that has:

“… Engaged in behavior for which CMS could have revoked the prescriber, individual or entity to the extent applicable if they had been enrolled in Medicare, and CMS determines that the underlying conduct that would have led to the revocation is detrimental to the best interests of the Medicare program. Such conduct includes, but are not limited to, felony convictions AND Office of Inspector General (OIG) exclusions.”


 III. Why was the Preclusion List Created?  

In April of 2018, within the Federal Register Rules and Regulations update, the Department of Health and Human Services released information on policy changes to Medicare programs. In which, they discussed the Preclusion List and their reasoning for establishing the new rule. It seems that CMS has given a few reasons for putting this new rule into effect:
  • “To focus on preventing payment for Part D drugs prescribed by demonstrably problematic prescribers”
  • “Reduce the burden on Part D prescribers and Medicare Advantage providers without compromising our program integrity efforts.” And to
  • “To replace the Medicare Advantage (MA) and prescriber enrollment requirements.”
By doing this, CMS believes that it will save $34.4 million dollars in 2019. These savings would be derived from the removal of the requirements for Part D prescribers and Medicare Advantage providers and suppliers to enroll in Medicare prior to providing health care services and items.

 IV. How do I Know if I am Precluded?  

Unlike the Office of Inspector General’s (OIG) monthly exclusion list, the Preclusion list will not be shared publicly. Precluded providers however will receive notice in a variety of ways. First, CMS will issue an initial email notification to the precluded providers using their email addressed which they provided to either the Provider Enrollment, Chain and Ownership System (PECOS), the National Provider Plan and Enumeration System (NPPES), or from the Medicare enrollment system of record. The Medicare Administrative Contractor (MAC) will also follow up by sending a written notice through the mail to the precluded provider before they are added to the Preclusion List. Within this letter you will also be informed on why exactly you are precluded, the date that your preclusion will go into effect, and your applicable appeal rights.

 V. Are Dentists at Risk of Being Precluded?  

YES.
If a dentist has been revoked from Medicare, is under an active re-enrollment bar, and CMS has found that the actions that led to their original revocation is a risk to the integrity of the Medicare program or has engaged in behavior for which CMS could have excluded them from participating in Medicare if they had enrolled.
 
 VI. When will the Preclusion List go into Effect?  

The first list of providers that were to be precluded were published and were sent notice on January 1, 2019. However, beginning April 1, 2019 Part D sponsors will become required to reject any prescriptions for Medicare Part D drugs that are prescribed by an individual or entity that is on the Preclusion List. Medicare Advantage (MA) plans will also become required to deny payments for any healthcare service or item that was provided by and individual or entity that is on the Preclusion List.

 VII. Is This the Same as the OIG’s Exclusion List?  

The OIG Exclusion List is NOT the same as this new CMS List. That being said, there is some overlap. If you have been excluded, you can still find yourself on the Preclusion List if you fall into the either of the two criteria listed above under the “How Does Someone End up on The Preclusion List? ” section. As you can see in the diagram below, there is some overlap, but not much.

New CMS Preclusion List


 VIII. How can I Screen for Precluded Individuals or Entities?  
Unfortunately, access to the Preclusion List is Extremely Restricted. However, under certain circumstances, we here at Exclusion Screening, LLC can provide guidance and help. Contact us info@exclusionscreening.com or give us a call at (800)-294-0952 for a free consultation and quote.

A Review of OIG Enforcement Actions in Fiscal Year 2018

By Cason Liles

OIG in Fiscal Year 2018(February 6, 2019): The Department of Health and Human Services (HHS), Office of Inspector General (OIG) is an independent, objective law enforcement and investigative agency that is responsible for protecting the financial integrity of the more than 300 programs that are administered by HHS.  Collectively, these programs represent approximately 24% of the Federal budget.  Although OIG is responsible for investigating allegations of fraud, waste and abuse related to literally hundreds of HHS programs, most of OIG’s investigative and enforcement activities arise out the Medicare and Medicaid programs.  Simply put, OIG’s mission is fighting fraud, waste and abuse.  In the pursuit of this mission, OIG aggressively investigates allegations of wrongdoing to identify and recover improper payments made to health care providers, suppliers and other parties who have engaged in fraudulent, wasteful or abusive conduct.  One of the key tools used by OIG to protect patients and safeguard the financial integrity of the Medicare and Medicaid programs is its authority to exclude individuals and entities from participation in Medicare, Medicare and other Federal health care benefit programs.  This article examines a number of the exclusion-related enforcement actions taken by the OIG in Fiscal Year (FY) 2018.  

 I. An Overview of FY 2018 Exclusion Actions:  


At the outset, it is important to keep in mind that “exclusion” actions aren’t new.  They were first mandated in 1977 as part of the “Medicare-Medicaid Anti-Fraud and Abuse Amendments,” Public Law 95-142.  The responsibility for imposing mandatory and permissive exclusion actions rests with OIG.  As in prior years, OIG aggressively exercised its exclusion authorities in FY 2018 and excluded 2,712 individuals and entities from participating in Federal health care benefit programs.  A number of the more noteworthy exclusion actions taken in FY 2018 are outlined below:


 II. Noteworthy Civil Monetary Penalty and Affirmative Exclusion Actions Taken by OIG in FY 2018:  


Oklahoma.
 
(January 2018). Assisted Living Facility Settles Case Involving Excluded Individual.  In this case, an Oklahoma assisted living facility (ALF) improperly employed an excluded individual who was hired to work as an “Admissions Specialist.”  As a result of the organization’s wrongful employment of this excluded individual (likely caused by a failure to properly screen all of its staff), the ALF may have faced significant civil monetary penalties (CMPs).  Ultimately, the ALF entered into a settlement agreement with OIG and agreed to pay more than $96,000.  This case illustrates the importance of screening ALLemployees, not merely direct patient caregivers such as physicians, nurses, medical assistants and other licensed health care professionals. 


Oklahoma.
 
(February 2018). Management Company Settles Case Involving Excluded Individual.  An organization that owns and manages a skilled nursing facility in Oklahoma City, Oklahoma, was alleged to have hired a licensed practical nurse (LPN) who was excluded from participating in any Federal health care program. An OIG investigation found that this individual had provided items or services that were reimbursed by Federal health care programs. This resulted in the skilled nursing facility entering into a settlement agreement with OIG and agreed to pay more than $140,000 to the government.


New Jersey.
 
(March 2018). Pharmacy and Owner Settle Case Involving Excluded Individual.  In this New Jersey case, a pharmacy and its owner were alleged to have employed a pharmacist who was excluded from participating in Federal health care benefit programs. Upon investigation it was found that this excluded pharmacist had provided items or services to patients that were reimbursed by Federal health care programs. The pharmacy entered into a settlement agreement with OIG and agreed to pay more than $300,000 to the government.


Pennsylvania.
 
(March 2018). Physician Agrees to Voluntary Exclusion.  In this case, a Pennsylvania physician accepted an exclusion from participation in all Federal health care programs for 10 yearsunder 42 U.S.C. § 1320a-7(b)(6)(B).[1]OIG alleged that the physician had  issued opioid prescriptions to patients that were in excess of their needs and fell substantially short of the professionally recognized standards of care. This cause illustrates just how serious the OIG currently is when dealing with these opioid-related issues.


New Jersey.
(September 2018).  New Jersey Health Center Pays Penalties for Improperly Employing an Excluded Individual.  In this New Jersey case, a community health center was alleged to have improperly employed a physician who was excluded from participation in Federal health care benefit programs. Notably, the excluded physician was found to be working in quality assurance and risk management.  Additionally, the excluded physician had provided items and services that were ultimately billed to Federal health care programs. As a result of this wrongful hire, the community health center entered into a settlement agreement with OIG that required the organization to pay more than $98,000.

 
Illinois. (September 2018).  Psychologist Agrees to 20-Year Exclusion.  In this Illinois case, a licensed psychologist was alleged to have billed for psychological services that were either: (1) not provided as claimed; (2) false or fraudulent because the dates of service billed were times when either the patient was hospitalized, OR the psychologist was travelling out of the state. Based on the allegations, the psychologist agreed to be excluded from participation in all Federal health care programs for a period of 20 years under 42 U.S.C. § 1320a-7(b)(7).[2]


Tennessee.
 
(September 2018).  Advanced Practice Nurse (APRN) Agrees to 10-Year Exclusion.In this Tennessee case, an advanced practice nurse (APRN) agreed to be excluded from participation in Federal health care benefit programs for 10 yearsunder 42 U.S.C. § 1320a-7(b)(6)(B) and42 U.S.C. § 1320a-7(b)(6).[3]  Importantly, this particular exclusion action was imposed due the APRN’s inappropriate opioid prescribing practices.  It is also worth noting that the OIG further alleged that the APRN prescribed controlled substances without appropriately documenting: (1) A clear objective finding of a chronic pain source to justify the ongoing and increasing prescribing; (2) Attempts to identify the etiology of reported pain; (3) A thorough history or adequately inquiring into potential substance abuse history; or (4) A written treatment plan with regard to the use of the prescriptions.  If OIG audits your controlled substance prescribing practices, the agency will be looking for each of these items in the record.


 III.   Noteworthy Exclusion Self-Disclosures Reported to OIG in 2018:  


Hawaii.
 
(January 2018). General Hospital Self-Discloses Employment of Excluded Individual. After voluntarily self-disclosing the employment of an excluded individual, a Hawaii based hospital agreed to pay $100,000 for accusations of violating the Civil Monetary Penalties Law. OIG alleged that the hospital knew or should have known that the individual had been excluded from participation as a provider in Federal health care benefit programs.


Rhode Island.
 
(March 2018). Nursing Home Self-Discloses Employment of Excluded Individual.  A nursing home in Rhode Island learned that it had improperly employed an individual who was excluded from participation in Federal health care benefit programs. After subsequently choosing self-disclosing of this employment to OIG, the nursing and rehabilitation center agreed to pay more than $42,000 to resolve violations of the Civil Monetary Penalties Law.


Ohio.
(April 2018). Ohio County Health District Self-Discloses the Improper Employment of Excluded Individual.  In this Ohio case, a County Health District agreed to pay more than $55,000 for alleged violations of the Civil Monetary Penalties Law. The County Health District voluntarily disclosed that it had improperly employed an individual that it knew or should have known was excluded from participation in Federal health care benefit programs.


Texas.
(September 2018). Rehabilitation Center in Texas Self-Discloses Employment of Excluded Individual.  In this Texas case, arehabilitation and care center learned that their organization had unwittingly hired an individual that had been excluded from participation in Federal health benefits programs.  To their credit, the rehabilitation center self-disclosed the violation directly to OIG.  Ultimately, the rehabilitation center was required to pay more than $129,000 in civil monetary penalties to the government in connection with this wrongful employment.


 IV.
Points to Consider:  


 
As several of the cases above reflect, opioid related audits and investigations are increasingly resulting in OIG exercising its permissive exclusion authority under 42 U.S.C. § 1320a-7(b)(6).  It is important to keep in mind that this statutory provision can be applied to practically any situation where a health care provider’s services “fail to meet professionally recognized standards of health care.”  Now, more than ever before, it is imperative that health care providers remain up-to-date with respect to the standards of care applicable in their specific field of practice.  Additionally, their compliance with applicable standards of care must be fully and accurately documented their actions in the patient’s medical records.


Health care providers and suppliers MUST ensure that they are taking the appropriate steps to ensure that their employees, agents, contractors and vendors have not been excluded from participation in Federal health benefit programs. Based on the OIG’s actions in 2018, we should fully expect for the agency to continue to increasingly focus on exclusion-related administrative actions in 2019.


Is your practice or health care organization meeting its screening obligations?  Call the experienced staff at Exclusion Screening for help with your screening needs.

[1]42 U.S.C. § 1320a-7(b)(6)(B) permits the OIG to impose a permissive action if an individual or entity has furnished or caused to be furnished items or services to patients (whether or not eligible for benefits under subchapter XVIII of this chapter or under a State health care program) substantially in excess of the needs of such patients or of a quality which fails to meet professionally recognized standards of health care.”

[2]42 U.S.C. § 1320a-7(b)(7) is one of the permissive exclusion authorities that may be exercised (at the discretion of OIG). This permissive exclusion authority is used when excluding an individual or entity for Fraud, kickbacks, and other prohibited activities.”

[3]42 U.S.C. § 1320a-7(b)(6) is another one of the permissive exclusion authorities that may be imposed, at the sole discretion of OIG.  This permissive exclusion authority is used when excluding an individual for the wrongful submission of Claims for excessive charges, unnecessary services or services which fail to meet professionally recognized standards of health care, or failure of an HMO to furnish medically necessary services.”

Concealing Information Regarding an Excluded Party and Lying on a Medicare CMS-855a Enrollment Application Will Swiftly Make a Bad Situation Even Worse!

CMS-855a Enrollment Application(January 8, 2019): Since first being enacted in 1965, Congress has enacted a number of measures to safeguard the financial integrity of the Medicare and Medicaid programs. The Medicare-Medicaid Anti-violations Fraud and Abuse Amendments of 1977 (Public Law 95-142) are among the most significant. In addition to making of the Federal Anti-Kickback Statute a felony, the legislation also mandated that physicians and other practitioners convicted of program-related crimes be excluded from participating in Medicare and Medicaid.  Since 1977, the scope of mandatory and permissive bases that can result in program exclusion has expanded significantly. Exclusion actions are the proverbial “kryptonite” of administrative sanctions that may be imposed on health care providers and suppliers.  As the exclusion statute now stands, if a health care provider or supplier is excluded from participation in Medicare, Medicaid or other Federal health care benefit plans, no payment can be made for any of the services or items “furnished, ordered, or prescribed by an excluded individual or entity.”[1]

From a practical standpoint an excluded individual or entity cannot bill or work for any practice or entity that bills Federal health care benefit programs. The Department of Health and Human Services (HHS), Office of Inspector General (OIG), is the agency responsible for imposing Federal exclusion actions[2] that are mandated[3] under the law. At its discretion, the OIG may also choose to pursue an exclusion action against individuals and entities that have been subjected to a number of other adverse actions.[4] Although both mandatory and permissive exclusion actions are administrative in nature, the seriousness of an exclusion action cannot be understated. This article examines a recent case where the failure to disclose the ownership of a home health agency by excluded individuals resulted in the indictment and conviction of the agency’s owners and two members of the agency’s staff.

 I. The Medicare Enrollment Process is the First Line of Defense to Prevent Program Fraud:

Among its many responsibilities, the Centers for Medicare and Medicaid Services (CMS) is responsible for administering the Medicare, Medicaid and Children’s Health Insurance Program (CHIP) health care benefits programs. To serve as a participating provider or supplier in the Medicare program, an enrollment application must first be completed.[5]  The specific enrollment application form to be completed, varies depending on the type of provider or supplier entity. For example, home health agencies are required to complete enrollment application CMS-855A.[6] 

A number of items in the enrollment application are specifically intended to identify various adverse actions that may have been imposed against an entity, its owners or managers.  For example, applicants must disclose whether the provider or supplier has a history of any final adverse actions, such as convictions, exclusion actions, revocation actions, or suspensions. Administrative adverse legal actions that must be reported are listed on page 16 of the CMS-855a.  As the application states, the following administrative adverse actions must be disclosed:


If the applicant has a history of one or more final adverse legal actions (either a qualifying conviction or one of the administrative actions listed above), the actions must be detailed in SECTION 3 of the CMS-855a.



Finally, SECTION 15 of the CMS-855a requires that applicants attest to the following: 
SECTION 15, further requires that applicants certify that all of the information contained in CMS-855a is “true, correct and complete. . .”

 II. What’s the Best Way to Make an Administrative Exclusion Action Even Worse? Lie About it:

A recent criminal prosecution out of the Northern District of Texas provides a real-life example of how a health care provider can make things go from bad to worse.  In that case, the concealment of an administrative exclusion action, along with the falsification of Medicare and Medicaid enrollment and re-validation paperwork, resulted in the criminal prosecution and conviction of four individuals associated with this north Texas home health agency.  A chronology of the case is set out below:
  • April 2001. A north Texas-based home health agency (referred to as “NTHHA”) was incorporated as a Texas limited liability company with a business address in Garland, Texas. After being incorporated, NTHAA applied to become a participating home health provider in the Medicare program. The agency also applied to provide Personal Assistance Services (PAS) to Medicaid beneficiaries. The home health agency was owned by Defendant #1 (who also served as Administrator and Director of the agency), and his wife, Defendant #4. 
  • April 2010. The owner of NTHAA (Defendant #1) and one of the agency’s management officials who served as an Administrator / Director of the agency (Defendant #2) were facing state felony charges associated with the delivery of a health care item under the Medicaid program. More specifically, the Medicaid Fraud Control Unit (MFCU) of the Texas Attorney General’s Office conducted an investigation of the defendants in connection with defendants both played roles in the wrongful billing of
  • November 2011. Defendant #3 (an Administrator and Registered Nurse for NTHHA), signed and submitted a Medicare re-validation application for NTHHA. The government alleged that the application submitted by Defendant #3 concealed and failed to disclose that Defendant #1 was an owner of the home health agency and that Defendant #2 was a manager at the same agency. Moreover, Defendant #3 failed to disclose that both Defendant #1 and Defendant #2 had been indicted on felony charges associated with the delivery of a health care item.
  • March 2012. Defendant #1 filed a Texas Franchise Tax Public Information Report for NTHAA and failed to identify himself as an officer, director or member of the home health agency.
  • June 2012. Defendants #1 and #2 pled guilty Texas State District Court to a Class A Misdemeanor Offense of Attempted Theft, in violation of PENAL CODE ANN. § 31.03, related to their 2010 indictment. The defendants were placed on community supervision for one year and an Order of Deferred Adjudication was entered by the District Court. In approximately December 2012, the defendants were granted early discharge from their community service obligations the District Court dismissed all of the proceedings, including the indictments against the defendants.
  • January 2013. The OIG notified Defendants #1 and #2 that they were being excluded from participation from Medicare, Medicaid and all Federal health care benefit programs for a period of 5 years pursuant to Section 1128(a)(1) of the Social Security Act, 42 U.S.C. § 1320a-7(a)(1). Both defendants appealed the exclusion, but the 5-year period of administrative exclusion was upheld by the Administrative Law Judge assigned to hear their respective cases. 
  • April 2013. Defendant #1 signed and filed a Texas Franchise Tax Public Information Report for NTHAA which listed himself as an Administrator and Director of NTHHA.
  • May 2013. Defendant #3 signed and submitted a contract re enrollment application with the Texas Department of Aging and Disability Services (DADS). The re-enrollment application falsely certified that no persons with an ownership interest or managerial role at NTHHA had been convicted of a crime relating to a Federal health care program.  During this time period, Defendant #3 also falsely certified that none of the principals, including officers, directors, owners, partners, or person’s having a primarily management or supervisory responsibility in NTHHA were presently excluded from participation in the Medicare or Medicaid programs.
  • May 2014. Defendant #1 signed and filed a Texas Franchise Tax Public Information Report for NTHAA which listed himself as an Administrator and Director of NTHHA.
  • May 2015. Defendant #1 signed and filed a Texas Franchise Tax Public Information Report for NTHAA which listed himself as an Administrator and Director of NTHHA.
  • September 2015. Defendant #1 opened a bank account under the name of the home health agency, NTHHA. 
  • October 2015. Defendant #3 signed and submitted a Medicaid Advantage Plan provider application for NTHHA which falsely certified that no employees of the agency had been, or were currently excluded, from participation in a government program such as Medicare or Medicaid. The Medicaid Advantage Plan provider application submitted also falsely certified that no representatives of NTHAA had pled guilty to any legal action. Finally, Defendant #3 concealed and failed to disclose that Defendants #1 and #2 had no ownership interests and managerial roles in NTHAA.
  • October 2015. Defendant signed and submitted a provider application to a second Medicaid Advantage Plan, certifying that NTHHA had not been excluded under its current or former name or business identity from any Federal or State health care program.
  • January 2013 – May 2016. Despite their exclusion in January 2015, Defendant #1 and Defendant #2, continued to submit home health and PAS claims to Medicare and Medicaid for payment through May 2016. More than $4 million was billed to the Medicare and Medicaid during this period and Defendant #1 paid himself approximately $346,000 from NTHHA’s bank accounts.   Moreover, during this period, Defendant #1 paid Defendant #2 approximately $77,000 from NTHHA bank accounts.
  • June 2016. In June 2016, a Federal Grand Jury in the Northern District of Texas indicted Defendant #1, Defendant #2, and Defendant #3 (an Administrator and Registered Nurse for NTHHA) for “Conspiracy to Commit Health Care Fraud.”  (Violation of 18 U.S.C. 1349) and (18 U.S.C. 1347).  The government alleged that from approximately April 2010 through May 2016, the three defendants conspired to defraud the Medicare and Medicaid program by making materially false and fraudulent representation and promises in connection with the delivery of services billed to the Medicare and Medicaid programs.
  • December 2017. A Superseding Indictment by a Federal Grand Jury was issued in this case, charging Defendant #1 and Defendant #3 with additional counts of “False Statements in Health Care Matters.” (Violation of 18 U.S.C. 1035). Two unindicted physician co-conspirators were also named in the Superseding Indictment. Additionally, an additional defendant was added to the indictment. Defendant #4 (the wife of Defendant #1) was indicted for one count of “Conspiracy to Commit Health Care Fraud” for her role in the concealment of and falsification of ownership interests in NTHAA.

  • October 2018. After a six-day trial, a Federal jury found that: (A) Defendant #1 was guilty of Conspiracy to Commit Health Care Fraud and of making a False Statement for his role in concealing his ownership interest in NTHAA; (B) Defendant #2 was guilty of Conspiracy to Commit Health Care Fraud for his role in concealing his ownership interest in NTHAA; and (C) Defendant #3 was guilty of Conspiracy to Commit Health Care Fraud and of making a False Statement for her role in concealing the ownership interests of Defendant #1 and Defendant #2.  Defendant #3 was also found to have falsely certified that no one associated with home health agency was excluded.  Moreover, she supposedly indicated that another party owned NTHAA, when in fact, Defendant #1 and Defendant #2 were both excluded parties and had an ownership interest in the agency. 

 III.  How Did a State Class A Misdemeanor That Was Ultimately Dismissed Lead to an OIG Exclusion Action?

 In the case discussed above, the OIG excluded Defendants #1 and #2 from participation in the Medicare and Medicaid programs for 5 years, citing the mandatory exclusion requirements of Social Security Act, 1128(a)(1).
Let this sink in for a moment . . . the defendants pled guilty to a state Class A Misdemeanor in Texas District Court, and the charges, including the indictment, were later dismissed pursuant to an Order of Deferred Adjudication by the Texas State District Court.  Nevertheless, the OIG really had no choice but to exclude the defendants. 
The mandatory exclusions of Defendant 1# and Defendant #2 were brought under Section 1128(a)(1) of the Social Security Act, 42 U.S.C. § 1320a-7(a)(1). This provision of the Act requires the exclusion of any individual or entity convicted of a criminal offense related to the delivery of an item or service under the Medicare or Medicaid programs.[7] Importantly, this mandatory exclusion provision is not limited to only felony convictions.  It also covers misdemeanor convictions. Additionally, it is important to note that the Social Security Act defines “conviction” as including a number of situations.  A summary of actions that qualify as a conviction is set out below:

Social Security Act § 1128(i)(1): When a judgment of conviction has been entered against the individual by a Federal, State, or local court.

Social Security Act § 1128(i)(2): When there has been a finding of guilt against the individual by a Federal, State, or local court. 

Social Security Act § 1128(i)(3): When a plea of guilty or nolo contendere by the individual has been accepted by a Federal, State, or local court.

Social Security Act § 1128(i)(4): When the individual has entered into participation in a first offender, deferred adjudication, or other arrangement or program where judgment of conviction has been withheld

Simply put, the OIG was required by law to exclude Defendant #1 and Defendant #2 from the Medicare program for 5 years, despite the fact that the conviction was a state misdemeanor that was ultimately discussed pursuant to an Order of Deferred Adjudication.

 IV. Lessons Learned:

Lesson #1. Always consider the administrative ramifications of accepting a plea agreement. Even if the charges are later dismissed under a deferred adjudication agreement. pleading guilty to a Class A misdemeanor will lead to an individual’s mandatory exclusion from participating in the Medicare program if the underlying criminal offense was related to the delivery of an item or service under the Medicare or Medicaid programs.  In this case, the OIG had no choice but to exclude these individuals from the Medicare program for 5 years under Section 1128(a)(1) of the Social Security Act.  

Lesson #2.  Medicare and Medicaid providers need to exercise caution when completing Medicare and Medicaid program enrollment applications.  As this case reflects, Federal prosecutors won’t hesitate to pursue false or deceitful conduct that has been taken to hide an excluded party’s ownership interest or involvement with a health care entity. Although an exclusion action is only an administrative sanction, if you are excluded from participation in the Medicare program and attempt to set up a “straw owner” in an effort to hide your ownership interest in a health care entity, you risk turning an administrative sanction into a criminal case.

 V. Concluding Remarks:

In this case, the defendants’ worst enemies were, in fact, themselves.  After being excluded form participation in the Medicare program. The defendants failed to properly divest and dissociate themselves from the home health agency.  Instead, they essentially doubled-down and took steps to conceal their ownership and involvement with the home health agency. This false and deceitful conduct ultimately led to their indictment on federal criminal charges.  Additionally, their actions led to the criminal involvement of another home health agency management official (Defendant #3), and the agency owner’s wife (Defendant #4).  Ultimately, all four individuals were convicted of “Conspiracy to Commit Health Care Fraud,” making a“False Statement,” or both counts. All of the defendants are currently awaiting sentencing.

As a participating provider or supplier in the Medicare, Medicaid or other Federal health care program, you have an affirmative obligation to ensure that no owners, employees, agents or contractors have been excluded from participation in one or more of these programs.  The folks at Exclusion Screening can greatly assist you in meeting those obligations. They can be reached at:  1 (800) 294-0952.

[2]States also have the ability to exclude individual and entities from participating the state’s Medicaid program.
[3]Mandatory exclusion actions must be imposed by the OIG if an individual or entity is convicted of a number of felony criminal health care related statutes or convictions related to fraud, theft of other financial misconduct.  A list of mandatory exclusion bases can be found in the following article.
[4]Permissive exclusion actions are not required by law but may be pursued at the option of the OIG.  A list of permissive exclusion bases can be found in the following article.  
[5]After successfully enrolling in the Medicare program, 42 CFR §424.515 requires that in order to maintain Medicare billing privileges, a provider or supplier (other than a DMEPOS supplier) must resubmit and recertify the accuracy of its enrollment information generally every 5 years. DMEPOS Suppliers must revalidate at least every three years.
[6]A copy of CMS-855A can be found here.
[7]See, Tamara Brown, DAB No. 2195 (2008); Thelma Walley, DAB No. 1367; Boris Lipovsky, M.D., DAB No. 1363 (1992); Lyle Kai, R.Ph., DAB CR1262 (2004), rev’d on other grounds, DAB No. 1979 (2005); see also Russell Mark Posner, DAB No. 2033, at 5-6 (2006).