Home Health and Nursing Home Facilities a Major Target for OIG Enforcement

civil monetary penalties

I.  Civil Monetary Penalties

Twenty-five out of the fifty-five exclusion enforcement actions reported in 2014 have occurred in home health, hospice, or nursing and rehabilitation facilities. The Civil Monetary Penalties (CMPs) imposed in these cases range from $10,000 to $428,935 for employing just one individual that the employer knew or should have known was excluded from participating in the Federal health care programs. Providers are reminded that the Office of the Inspector General (OIG) recommends screening employees and vendors before hiring or contracting with them, and to continue screening on a monthly basis.

One reason why some providers were liable for much higher CMPs is due to the amount of time the provider employed or contracted with the excluded individual before disclosing the violation to OIG. The government cannot pay for any services provided directly or indirectly by an excluded person. Therefore, the entire amount must be repaid back to the government.[1] This amount is typically subject to a minimum multiplier of 1.5 times the total amount paid by the Federal health care programs.[2] For that reason, the longer you employ a person without realizing they are excluded, the more you will be liable to pay back to the Federal health care programs.

Here is a list of enforcement actions against home health, hospice and nursing facilities in 2014:
2014 OIG Enforcement Action

You can view the entire list on the OIG’s Enforcement Action Page here.  

II.  Home Health Agencies Vulnerable to Fraud

OIG conducted a study in late 2012 that focused specifically on home health agencies.[3] The report found that Medicare paid home health agencies that had been suspended or had their billing privileges revoked. The report concluded that home health agencies are particularly vulnerable to fraud, waste, and abuse. It also recommended that CMS establish additional standards and systems to ensure that improper payments are not being made to suspended individuals.

Read the full report here.

Two-thirds of the CMPs imposed in 2014 were towards providers who self-disclosed that they had employed an excluded individual. Many of those CMPs could have been avoided easily by frequent screening. Providers should be aware and take care to screen all employees and vendors monthly for excluded individuals. Employing just one excluded person has serious repercussions.

If you have concerns about your organization’s screening, contact us at Exclusion Screening, LLCSM by calling 1-800-294-0952 or filling out the form below.  



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. 

 [1] Dep’t of Health and Human Servs. Office of the Inspector Gen., Updated OIG’s Provider Self-Disclosure Protocol, 10 (Apr. 17, 2013).

[2] Dep’t of Health and Human Servs. Office of the Inspector Gen. at 14.

[3] U.S. Dep’t of Health and Human Servs. Office of the Inspector Gen., CMS and Contractor Oversight of Home Health Agencies 17-19 (Dec. 2012).

CMP Liabilities: Why Are Some Much Higher Than Others?

A quick review of the Office of Inspector General’s (OIG) exclusion enforcement actions might make one wonder why the Civil Monetary Penalties (CMPs) for some entities are only $10,000 while others are closer to $2,000,000. We were curious as well, and took a look into the factors that might contribute to the vast differences in money owed.

 CMP Liabilities Higher

The easiest answer is that CMPs tend to be lower for entities that self-disclosed the exclusion violation as opposed to entities that were subject to an OIG investigation. “Tend” is the key word here. You’ll notice that the August 5, 2014 case (see “CMP Liabilities Higher” link above) was self-disclosed and has the highest CMP amount listed at $1,983,907.51.

I.  CMP Liability Depends on How Many Excluded Individuals Are Hired

Another contributing factor is the number of excluded individuals that the provider employed or contracted with. More individuals means that more claims were likely submitted for payment. Therefore, the government likely paid more money to these providers than providers who only employed or contracted with one excluded person. This is evident in the two exclusion actions which took place on August 5, 2014. The University Hospital employed one excluded individual and owed $10,000 in CMP liabilities, while the laboratory owed nearly $2,000,000 because it knew or should have known that four employees were excluded from participation in the federal health care programs. However, it’s important to note that the March 7, 2014 case which totaled $243,266.31 in CMPs only involved one excluded individual. So what is going on?

II.  CMP for Each Item or Service Provided

OIG has discretion to impose CMPs of up to $10,000 for each item or service that the excluded individual provided. Hence, the length of time and the number of items or services provided by the excluded individual directly contribute to the total CMP amount imposed on a provider. The March 7, 2014 case involved a nursing and rehabilitation center, so it is likely that a large majority of the entity’s claims were submitted to the Federal health care programs for payment. Additional information about the excluded individual is not available, but the rules governing CMPs lead us to believe that this individual was employed with the facility for a fairly substantial period of time and provided a large number of items and services that were directly or indirectly billed to the Federal health care programs.

The Federal health care program monies may not be used for activities that violate the law. Therefore, even a self-disclosing entity[1] will be subject to large CMPs if the excluded individual performed a lot of services that were billed (directly or indirectly) to the Federal health care programs.

III.  Our Take-Away

Our take-away from this closer look at CMPs confirms that it is best to identify an individual or entity that is excluded as soon as possible. This is where monthly screening comes in. You might screen your employee or contractor before hiring, but if you continue to let that employee or contractor conduct services that are billed directly or indirectly, you may be responsible for paying that money back. Finding out a person is excluded one month into a relationship with them is much better than learning about the exclusion six months or a year later because the person will not have had an opportunity to perform an extreme amount of services that will get you into hot water. 

CMP Liabilities

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] Providers are reminded that OIG may use a lower multiplier for damages in self-disclosure cases, but it is under no obligation to do so. Dep’t of Health and Human Servs. Office of the Inspector Gen., Updated OIG’s Provider Self-Disclosure Protocol, 14 (Apr. 17, 2013).

OIG Provides Guidance on Disclosures for Conduct Involving Excluded Persons in the Updated Self-Disclosure Protocol

Provider Self-Disclosure
I. Provider Self-Disclosure Protocol: New Guidance Sheds Light on Disclosure

On April 17, 2013, the Office of the Inspector General (OIG) issued an updated Provider Self-Disclosure Protocol that many viewed as an attempt to make the process somewhat more “user friendly.”[1] Regardless of whether that was the aim – or if it was achieved to some extent – the reason the update is of particular interest to us is that it has a section which contains specific guidance on the disclosure of conduct involving excluded employees or contractors. The original protocol, however, was silent on the topic.

By most measures, the OIG’s  protocol for self-disclosure is still an onerous one. Providers are required to conduct an internal investigation and present its findings in the form of a detailed provider self-disclosure narrative. The narrative must include, among other things, a complete accounting of the investigation itself, the conduct involved, the corrective efforts taken, the damages incurred, and how that amount was determined.[2]

II.  Additional Requirements

In addition to these general requirements, disclosures relating to excluded employees or contractors has to include the following additional information:

  • Who was excluded, their job duties and the dates of employment or contract
  • The screening that was done before and/or during the employment or contract
  • Why or how the screening process failed
  • The corrective actions that have taken
  • A calculation of the total amounts claimed and paid by Federal Program
  • The revised protocol also requires that all other employees be screened through the OIG list of excluded individual employees[3]
III.  Calculating the Cost

It is also significant that the revision contains guidance for calculating the damages. While the OIG holds fast to the notion that all services directly provided and individually billed by an excluded individual are overpayments, it recognizes that quantifying services that were not billed separately can be problematic. In such cases, the guidance suggests that the amount paid should be estimated by taking the total cost of employment or contracting and multiplying by the federal payor mix (by unit if possible, or by the entire entity if not). According to the OIG, that amount should then be used “as a proxy” for the amount paid “for purposes of compromising OIG’s [Civil Monetary Penalty] CMP authorities” in a settlement.

IV.  Final Thoughts

The revision of the Provider Self-Disclosure Protocol is important from the perspective of exclusion screening for three reasons. First, it strongly suggested that self-disclosures are the OIG’s preferred avenue for resolving issues arising out of exclusion violations. Second, it provided a methodology for approaching the difficult issue of computing the value of indirect and bundled services. Third, but perhaps most notably, it significantly raised the profile of issues related to conduct involving excluded persons and entities. This can sometimes have enforcement implications and serve as a sort of warning to the industry, and that appears to have been the case.

Read our in-depth article on your options after finding an excluded party by clicking here. 

If you need help conducting your exclusion screening or want more information call Exclusion Screening at 1-800-294-0952 or fill out the form below!



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@www.exclusionscreening.com or 1-800-294-0952.

[1] Originally issued in 1999 in an attempt to encourage self-disclosure, the process has been viewed with skepticism from the outset and has met great favor as a resolution option.

[2] In return, the OIG states it may reduce CMP’s to 1.5 times the loss. In addition, the OIG may still be required by a Memorandum of Understanding with DOJ to refer the matter for civil or criminal prosecution. Furthermore, entry into the program does not constitute a “public disclosure” under the False Claims Act. These considerations help explain the lack of popularity of the program.

[3] Dep’t of Health and Human Servs. Office of the Inspector Gen., at 9.