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Medicaid Dental Audits: Exclusion Screening Issues

January 22, 2015 by  
Filed under Dental Audits & Compliance

Audit(January 22, 2015): Medicaid dental audits have greatly expanded over the past few years. As many (if not all) dentists and orthodontists are painfully aware, the both federal and state law enforcement agencies have doggedly pursued Medicaid dental providers in their efforts to recoup funds paid to dentists and orthodontists for the provision of medically unnecessary services and other allegedly improper services. One of the least understood mandatory obligations applicable to ALL dentists and orthodontists who accept Medicaid is the requirement that all participating providers MUST screen their employees, contractors, vendors and agents through literally dozens of federal and state exclusion databases. While there a number of important exclusion screening concerns to consider, today we will be focusing on two risk areas:

I.     Medicaid Dental Audits.  Have You Complied with Your Exclusion Screening Obligations?

Prior to the significant changes enacted under the Affordable Care Act (ACA), there were are already both mandatory and permissive bases for exclusion from participation in the Medicare and Medicaid programs. Importantly, there are bases for mandatory or permission exclusion from federal health care programs that may be pursued by the government. Moreover, each state has established its own list of infractions and/or other instances of improper conduct that can result in exclusion from Medicaid.

What is the scope of an exclusion action? Importantly, HHS-OIG has taken the position that if a dentist, orthodontist or other party is excluded from participating in the Medicare or Medicaid programs, they are effectively barred from working with most health care provider and supplier entities. As HHS-OIG writes:

“Excluded persons are prohibited from furnishing administrative and management services that are payable by the Federal health care programs. This prohibition applies even if the administrative and management services are not separately billable. For example, an excluded individual may not serve in an executive or leadership role (e.g., chief executive officer, chief financial officer, general counsel, director of health information management, director of human resources, physician practice office manager, etc.) at a provider that furnishes items or services payable by Federal health care programs. Also, an excluded individual may not provide other types of administrative and management services, such as health information technology services and support, strategic planning, billing and accounting, staff training, and human resources, unless wholly unrelated to Federal health care programs.”

Importantly, a dental practice cannot limit its screening activities to only “new employees.” The Compliance Officer in a dental or orthodontist office should be routinely (at least every 30 days) checking both federal exclusion databases to ensure “that the HHS–OIG’s List of Excluded Individuals and Entities, and the General Services Administration’s (GSA’s) List of Parties Debarred from Federal Programs have been checked with respect to all employees, medical staff and independent contractors.” Dental and orthodontist practices are also responses for checking all state exclusion databases (at the time of this article, 36 states maintained their own databases. However, this number is constantly growing. You should therefore keep up with the status of all 50 states.

Using Texas as an example, HHSC-OIG is very aggressive in its approach towards compliance. It expects “[a]ll [Medicaid] service providers [to] check OIG’s exclusion list monthly.” First pioneered by New York State, this trend (of requiring monthly screening checks) is steadily being adopted by states around the country.  As Medicaid dental audits expand, it is essential that all dental providers take steps to comply with their mandatory obligation to perform comprehensive exclusion screening of procedures of their staff, contractors, vendors and agents.

What the penalty for improperly hiring an excluded party or for contracting with a vendor, contractor or other third party? Essentially, any Medicaid dental claims submitted for coverage and payment after an excluded party enters on board your practice would be tainted, thereby exposing the practice to potential Civil Monetary Penalties (CMPs), along with other administrative, civil and / or potentially criminal sanctions.

II.     Don’t Play Games! Sham Ownership Schemes:

As an example, in a federal criminal case out of Massachusetts, a registered dentist was convicted of fraud for submitting false claims to the government for payment. As a result, the Department of Health and Human Services, Office of Inspector General (HHS-OIG) notified the dentist that he was being excluded from participation in federal and state health care programs, including Medicare and Medicaid. As part of that notice, the convicted dentist was notified that he may not “submit claims or cause claims to be submitted” for payment from the federal and state health care programs (in this case, specifically Medicaid). Additionally, the convicted dentist was advised that Medicaid reimbursement payments could not be made to any organization in which the convicted dentist served as an “employee, administrator, operator, or in any other capacity…” After his conviction, the dentist surrendered his right to practice dentistry in states where he was licensed.

Despite the fact that this individual was no longer licensed as a dentist and was expressly excluded from participating federal and state health benefit programs, he went out and established several dental practices, which were operated by both other dentists and the excluded individual. These dental practices treated Medicaid patients and received millions of dollars in Medicaid payments from the state Medicaid program, despite the fact that the practices were effectively run by an excluded individual. The excluded dentist was found to have been involved in “reviewing patient charts, suggesting dental procedures to be performed, reviewing billing records, reviewing income reports, interviewing and hiring dentists, and providing overall management direction to the offices.”

At one point, the excluded dentist hired another licensed dentist to run one of the dental practices he had opened. The newly hired dentist later learned of the legal and regulatory sanctions (included exclusion) that had been taken against the convicted dentist. The hired dentist subsequently submitted an application with the state Medicaid agency to become a Medicaid program provider. During the Medicaid application process, the hired dentist failed to disclose that a convicted, excluded, unlicensed dentist had an ownership or control interest in the dental practice. Notably, the convicted dentist repeatedly engaged in this sham ownership / control interest scheme.

Ultimately, the government learned of the sham ownership / control interest schemes perpetrated by the convicted dentist. Both the convicted dentist and at least one of the licensed dentist he had roped into the scheme were subsequently arrested and charged with conspiring to commit health care fraud, committing health care fraud, and making false statements involving federal health care programs health care fraud.

III.     Final Conclusion.

Dentists and orthodontists around the country are under the regulatory microscope.  While most of the audits and investigations currently underway involve Medicaid claims, we have worked on several cases involving Medicare claims as well.  Most recently, we have seen a number of dental audits being undertaken by private payors.  In years past, regulatory and enforcement actions have focused almost exclusively on non-dental related health care providers and suppliers.  Those days are over.  It is imperative that you review your current medical necessity, coding, billing and documentation practices to help ensure that your practice will be prepared for an audit.  Effective exclusion screening  practices are merely a step in the right direction.  Dentists and orthodontists should develop, implement and follow an effective Compliance Program — one that has been tailored to address the specific risks they face.   Have questions?  Give us a call if we can be of assistance.  We can be reached at: 1 (800) 475-1906.

Liles Parker attorneys represent health care suppliers and providers around the country in connection with regulatory compliance reviews, Medicare prepayment reviews and postpayment audits, HIPAA Omnibus Rule risk assessments, privacy breach matters, and State Medical Board inquiries. Robert W. Liles, Esq., is a Managing Partner at Liles Parker, Attorneys & Counselors at Law.  Call Robert for a free consultation at: 1 (800) 475-1906.

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