(January 14, 2013): In recent years, we have represented physicians and a range of other health care providers in administrative litigation over "exclusion" related enforcement actions. One of the most severe sanctions available under the Social Security Act stems from the authority to exclude individuals and entities from participation in federal health care programs. Medicare Exclusion is essentially the "nuclear bomb" of administrative sanctions. A provider who is excluded from participation in federal health benefits programs is not merely unable to bill Medicare himself—for all practical purposes he cannot even be employed by a participating provider, in nearly any capacity. The purpose of this article is to examine the government’s authority to exclude a provider from participation and to detail the various bases for taking such an action.
I. Medicare Exclusion Actions Can Arise in a Number of Ways:
Exclusions from participation in federal health benefits programs are mandatory under certain circumstances and permissive in others. The Department of Health and Human Services first began "excluding" certain individuals and entities from participation in the Medicare program in 1977. This responsibility was subsequently transferred to HHS’ Office of Inspector General (HHS-OIG) in 1981. As the below chart reflects, the failure to properly screen for "exclusion" can be quite costly for charitable and for-profit health care organization.
A retrospective review of the CMP actions taken by HHS-OIG against health care providers and organizations as a result of their employment of one or more excluded individuals or parties highlights the government’s continuing interest in these cases. As these case write-ups reflect, the "bar" to be met by providers is relatively high. HHS-OIG won’t hesitate to assess significant civil monetary penalties if a health care provider "knew or should have known" that one its hires had been "excluded" from participation in Medicare, Medicaid and / or other federal health care program.
II. List of 2012 CMP Sanctions for the Employment of Excluded Persons:
| Date | Provider | Self-Disclosure? | Amount of CMP Assessed | HHS-OIG Comments |
|---|---|---|---|---|
| 11/13/12 | Hospital | Yes | $248,362.78 | "The OIG alleged that [Hospital] employed an individual that it knew or should have known was excluded from participation in Federal health care programs." |
| 10/12/12 | Hospital & Cardiology Practice | Yes | $172,604.00 | "The OIG alleged that {Hospital] and [Cardiology Practice] employed an individual that they knew or should have known was excluded from participation in Federal health care programs." |
| 10/12/12 | Physician d/b/a Physician’s Medical Clinic | Yes | $43,014.80 | "The OIG alleged that Physician employed an individual that he knew or should have known was excluded from participation in Federal health care programs." |
| 10/07/12 | Home Health Agency | Yes | $81,102.06 | "The OIG alleged that [Home Health Agency] employed an individual that it knew or should have known was excluded from participation in Federal health care programs." |
| 10/07/12 | Hospital | Yes | $150,000.00 | "The OIG alleged that [Hospital] employed an individual that it knew or should have known was excluded from participation in Federal health care programs." |
| 09/26/12 | Hospital | Yes | $120,580.25 | "The OIG alleged that [Hospital] employed an individual that it knew or should have known was excluded from participation in Federal health care programs." |
| 09/25/12 | Treatment Center | Yes | $105,794.24 | "The OIG alleged that [Treatment Center] employed an individual that it knew or should have known was excluded from participation in Federal health care programs." |
| 09/19/12 | Neighborhood Health Clinic | Yes | $103,485.79 | "The OIG alleged that [Neighborhood Health Clinic] employed an individual that it knew or should have known was excluded from participation in Federal health care programs." |
| 09/19/12 | Hospital | Yes | $417,440.78 | "The OIG alleged that [Hospital] employed an individual that it knew or should have known was excluded from participation in Federal health care programs." |
| 08/22/12 | Hospital | Yes | $138,452.00 | "The OIG alleged that [Hospital] employed an individual that it knew or should have known was excluded from participation in Federal health care programs." |
| 08/15/12 | Surgical Services | Yes | $13,616.57 | "After it self-disclosed conduct to the OIG, [Surgical Services] agreed to pay for allegedly violating the Civil Monetary Penalties Law. The OIG alleged that CSS employed an individual that it knew or should have known was excluded from participation in Federal health care programs." |
| 08/02/12 | Hospital | Yes | $206,669.53 | "The OIG alleged that [Hospital] employed an individual that it knew or should have known was excluded from participation in Federal health care programs." |
| 07/13/12 | Community Clinic | Yes | $207,440.19 | "The OIG alleged that [Community Clinic] employed an individual that it knew or should have known was excluded from participation in Federal health care programs." |
| 07/11/12 | Physician | Does not State | $83,481,22 | "The OIG alleged that [Physician] employed an individual that he knew or should have known was excluded from participation in Federal health care programs." |
| 07/05/12 | Hospice | Yes | $73,428.48 | "The OIG alleged that [Hospice] employed an individual that it knew or should have known was excluded from participation in Federal health care programs." |
| 06/27/12 | Home Health Agency | Does Not State | $121,010.00 | The OIG alleged that Cooperative employed an individual that it knew or should have known was excluded from participation in Federal health care programs. |
| 06/19/12 | Retail Store with Pharmacy | Does not State | $831,871.61 | "The OIG alleged that [Retail Store with Pharmacy] employed an individual that it knew or should have known was excluded from participation in Federal health care programs." |
| 06/15/12 | Registered Pharmacist | Yes | $164,842.50 | "The OIG alleged that [Pharmacist] employed an individual that it knew or should have known was excluded from participation in Federal health care programs." |
| 06/07/12 | Community Hospital | Does not State | $81,704.88 | "The OIG alleged that [Community Hospital] employed an individual that it knew or should have known was excluded from participation in Federal health care programs." |
| 06/07/12 | Eye Surgery Practice | Yes | $19,429.00 | "The OIG alleged that [Eye Surgery Practice] employed an individual that it knew or should have known was excluded from participation in Federal health care programs." |
| 06/06/12 | Inpatient Treatment Clinic | Does not State | $77,586.00 | "The OIG alleged that [Inpatient Treatment Clinic] employed an individual that it knew or should have known was excluded from participation in Federal health care programs." |
| 05/31/12 | Nursing Home Management | Yes | $200,812.31 | "The OIG alleged that [Nursing Home Management] employed an individual that it knew or should have known was excluded from participation in Federal health care programs." |
| 04/27/12 | Podiatry Center | Does Not State | $10,000.00 | "The OIG alleged that [Podiatry Clinic] employed an individual that it knew or should have known was excluded from participation in Federal health care programs." |
| 04/16/12 | Nursing Home | Does Not State | $351,255.44 | "The OIG alleged that [Nursing Home] employed an individual that it knew or should have known was excluded from participation in Federal health care programs." |
| 03/26/12 | Medical Center | Yes | $76,529.81 | "The OIG alleged that [Medical Center] employed an individual that it knew or should have known was excluded from participation in Federal health care programs." |
| 01/19/12 | Rehabilitation Center | Does not State | $11,994.88 | "The OIG alleged that [Rehabilitation Center] employed an individual that it knew or should have known was excluded from participation in Federal health care programs." |
| 01/17/12 | County Health Center | Does Not State | $406,030.00 | "The OIG alleged that [County Health Center] employed an individual that it knew or should have known was excluded from participation in Federal health care programs." |
| 01/10/12 | DME | Yes | $20,639.81 | "The OIG alleged that [Durable Medical Equipment Supplier] employed an individual that it knew or should have known was excluded from participation in Federal health care programs." |
As the above chart reflects, most of the health care providers penalized in 2012 for employing excluded individuals self-disclosed their violation to HHS-OIG.
As review of prior years will confirm, HHS-OIG takes a dim view on health care providers who fail to voluntarily self-disclose such a violation. For example, in 2010, HHS-OIG investigated a nursing home for possibly employing an excluded party. The case was referred to HHS-OIG by the state Medicaid Fraud Control Unit (MFCU). Upon review, HHS-OIG found that the nursing home was impermissibly employing seven individuals who had been excluded from participation in federal health care programs. While at the nursing home, these individuals were alleged to have furnished items and services for which the provider was paid by federal health care programs. The provider was required to pay $376,432 to resolve these allegations. As Lewis Morris, Chief Counsel to the Office of Inspector General stated:
Providers self-disclosing such violations will ultimately pay lower settlement amounts. . . But in cases initiated by the government — such as this one — providers will, as a matter of course, be required to pay more to resolve the matter.
As Mr. Morris further noted:
This case illustrates yet again that HHS-OIG will pursue CMPs when providers have employed an excluded person for the furnishing of items or services paid for by federal health care programs.
This enforcement example illustrates a number of important lessons for all health care providers who participate in federal health benefits programs, regardless of size. Several of these lessons include discussed below.
No mention of actual fraud or overpayment was mentioned in this case. Nevertheless, the employment of excluded individuals was found to be quite serious by HHS-OIG: HHS-OIG won’t hesitate to pursue civil monetary penalties against a provider who employs excluded individuals, despite the fact that no mention is made of any wrongful billings. Regular screenings of your employees should be made to ensure that none of your employees have been excluded from participation.
The government is serious about self-disclosing problems: HHS-OIG’s Chief Counsel went out of his way to point out that provider’s who self-disclose will ultimately pay a lower amount of damages to the government. While we recognize the government’s preference in this regard, should you identify a problem, you should contact legal counsel before making a self-disclosure. HHS-OIG’s voluntary disclosure protocol has a number of requirements that should be fully assessed prior to deciding to make a disclosure under the program. To be clear, if you owe money to the government, you must pay it back. The issue to be resolved is how to go about returning any monies to which you are not entitled. Depending on the circumstances, a provider may be better off working with their Medicare Administrative Contractor (MAC) to resolve a problem. In other cases, HHS-OIG’s protocol may be the best option. Every situation is different and should be carefully assessed before action is taken.
Federal and state law enforcement teams are coordinating their findings -- Medicare exclusion cases WILL ultimately be disclosed: Notably, the violations in this nursing home case were first identified by a state MFCU who then contacted HHS-OIG. Similarly, we are seeing state Medical Boards advising the Zone Program Integrity Contractor (ZPIC) of actions they are taking against licensed health care providers. In several cases, the state Medical Board found that the provider was not providing adequate supervision over subordinate Nurse Practitioners and Physician Assistants. The ZPIC has then used this as a basis to argue that the claims did not qualify for Medicare coverage.
III. Medicare Exclusion Screening Can Take to Reduce Your Level of Risk:
"Medicare exclusion screening" is perhaps the single easiest compliance task which may be completed by a Compliance Officer. Nevertheless, many small-to-mid sized providers are not even aware of this requirement. Of those which are aware, only a fraction bother to check the HHS-OIG, state and GSA databases for exclusion and debarment. Exclusion monitoring must become (if it isn’t already) an integral part of your effective Compliance Program. Some final thoughts for your consideration include:
Medicare exclusion screening tasks are easy and inexpensive: It takes very little effort for a provider to screen current and prospective employees against HHS-OIG’s list of excluded parties and the General Services Administration’s list of parties who have been debarred from participation in federal contracts. While the state of New York started the trend, a number of other state Medicaid offices also now require that employees should be cleared through the state Medicaid exclusion databases every month. This approach is especially prudent in light of the fact that a provider’s failure to screen employees can be quite costly.
When you are conducting a search of federal and state exclusion databases, take care not to overly restrict your search terms. Once you have cleared an individual’s first name, don’t stop there. You should also conduct a search of possible nicknames (e.g. "Joe" for "Joseph"). Finally, try searching using the first initial only of the individual’s first name. When conducting a search, you should also ensure that you have included combinations of potential first names and any and all possible last names or aliases by which the individual has been known. Be sure and ask the individual to advise you of any and all former names or aliases. Are you also conducting criminal background checks? If so, be sure and review the background check for any other possible aliases or previous last names which may be listed.
When entering into new contracts require that all contractors affirm that they and their employees have not been excluded or debarred from any federal program. Rather than focusing solely on employees, look at your contractual business relationships as well.
Ensure that your policy and procedures manual has been updated to include this issue. All employees should be advised that they have an affirmative obligation to tell you if they have been excluded or debarred from a federal program.
Take care when employing an individual who was allegedly previously excluded from participation in the Medicare program. In some cases, an individual may have been excluded many years ago and the period of Medicare Exclusion would have theoretically been completed. Keep in mind -- exclusions are NOT automatically lifted. If they say that they are no longer excluded, require that they provide you written confirmation of that from HHS-OIG or from their state MFCU.
IV. Areas of Special Concern:
In summary, Compliance Officers must continually monitor the Medicare Exclusion status of not only applicants for employment, but also existing personnel. We strongly encourage you to be exception to the rule – screen your applicants, employees and contractors for Medicare Exclusion and debarment on a regular, consistent basis – and document your efforts.
Robert W. Liles, Esq., is Managing Partner at the health law firm, Liles Parker, PLLC. With offices in Washington, DC, Houston, TX, San Antonio, TX and Baton Rouge, LA, our attorneys represent home health agencies, physicians and other health care providers around the country in connection with Medicare / Medicaid prepayment reviews, post-payment audits, Compliance Plan reviews and state peer review actions. Should you have any questions, please call us for a free consultation. Robert can be reached at: 1 (800) 475-1906.