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Exclusion Screening Enforcement Actions by OIG are Increasing.

Exclusion screening enforcement by OIG and state officials is increasing.

(December 8, 2015): Since the passage of the Patient Protection and Affordable Care Act of March 2010[1] (ACA) and progeny such as the HITECH Act [2], enforcement efforts have been better funded and consequently, better staffed. The enactment of HIPAA in 1996 [3] and the Balanced Budget Act (BBA) of 1997 [4], further expanded the OIG’s sanction authorities and scope of current CMP and exclusion authorities beyond programs funded by the Department to all “Federal health care programs.” Further, on May 31, 2011, CMS published guidance to providers regarding the enforcement of ACA Section 6501.

 

As the ACA requires:

Termination of Provider Participation Under Medicaid and CHIP

Section 6501 of the Affordable Care Act, Termination of Provider Participation Under Medicaid if Terminated Under Medicare or Other State Plan amends section 1902(a)(39) of the Social Security Act and requires States to terminate the participation of any individual or entity if such individual or entity is terminated under Medicare or any other Medicaid State plan. (emphasis added) [5] On February 2, 2011, the Centers for Medicare & Medicaid Services (CMS) published the final rule implementing this provision, applicable to terminations occurring on or after the statutory effective date of January 1, 2011 [6]

Subsequently, the U.S. Department of Health and Human Services (HHS) Office of the Inspector General (OIG) is now engaging a specialized task force to check for excluded individuals. 2015 Enforcement Actions demonstrate a much higher focus on, among other areas, reviewing providers against employing excluded individuals than in previous years. While this was a relatively easy compliance area to meet, since the OIG issued its Special Advisory Bulletin and amended its Self-Disclosure Protocol in May and June of 2013, it has since become a hotbed of government reviews, tighter restrictions, shorter compliance deadlines and higher civil monetary penalties. As a result, checking exclusion lists has moved from being one of the easiest compliance steps for a provider to undertake, to being an essential compliance step for every provider.

I. So many exclusion screening databases to check, so little time…

A health care provider, biller, or supplier must check both federal exclusion screening databases including, the List of Excluded Individuals/Entities (LEIE), and the System for Award Management (SAM), formerly maintained by the General Services Administration (GSA), and the currently 38 existing State OIG Medicaid exclusion databases on a regular basis. In New York and Texas, this means monthly (every 30 days), and the list of states adding the monthly requirement continues to grow. Some providers find it difficult to devote the staff and man-hours required to perform this task. Exclusion database review services, such as Exclusion Screening, LLC, allow these providers to perform the voluminous task of searching and documenting the employee searches on multiple state databases.

II.  Formerly excluded employees or applicants must take affirmative steps to be taken off of the list of excluded individuals.

Employers should also be wary of employees who state they were previously excluded, but the exclusion period has run and they are no longer on the list. Simply stated, exclusions do not expire because there is no automatic reinstatement provision. A health care provider must apply to HHS OIG to be reinstated and to any State where they were previously excluded to be allowed to again participate. The individual must be approved and a written letter received before they can again work for a participating provider without breaking the law and risking penalty. As OIG’s website states:

Reinstatement of excluded entities and individuals is not automatic once the specified period of exclusion ends. Those wishing to again participate in the Medicare, Medicaid and all Federal health care programs must apply for reinstatement and receive authorized notice from OIG that reinstatement has been granted [7].

OIG has the authority to exclude individuals and entities from Federally funded health care programs pursuant to sections     1128 External link and 1156 External link of the Social Security Act External link and maintains a list of all currently excluded individuals and entities called the List of Excluded Individuals and Entities (LEIE). Anyone who hires an individual or entity on the LEIE may be subject to civil monetary penalties (CMP).[8] If an individual is excluded, and the employer participates in federal programs, the employee must be terminated. If an employee was excluded and states the period has run and they are no longer excluded, they must apply for reinstatement to OIG. Reinstatement is not automatic. OIG will send written notice if the application is accepted. The employee must wait until their name is removed from the exclusions list. Then the employee may again work for a provider who participates in a federally funded healthcare program. Finally, employers should remember that where an excluded individual provided services or items, directly or indirectly (as in administrative support) to Medicare, Medicaid or another federally funded health care program, such claims are tainted under the False Claims Act and may be subject to fines and penalties as previously stated.

An excluded party is in violation of its exclusion if it furnishes to Federal program beneficiaries items or services for which Federal health care program payment is sought. An excluded individual or entity that submits a claim for reimbursement to a Federal health care program, or causes such a claim to be submitted, may be subject to a CMP of $10,000 for each item or service furnished during the period that the person or entity was excluded (section 1128A(a)(1)(D) of the Act). The individual or entity may also be subject to treble damages for the amount claimed for each item or service. In addition, since reinstatement into the programs is not automatic, the excluded individual may jeopardize future reinstatement into Federal health care programs (42 CFR 1001.3002).

III. A partial list of OIG’s 2015 exclusion screening enforcement actions.  Are you ready if audited in 2016?

In August 2015, HHS published a study which exposed a loophole in exclusion enforcement in Medicaid managed care programs. [9] It found that 25 States did not require providers who participated via managed care to be directly enrolled with the State. Texas requires every provider who treats Medicaid patients to enroll in the program.

Federal enforcement actions in 2015 increasingly assessed Civil Monetary Penalties against health care providers who employ excluded individuals. The number of enforcement actions and the amounts of penalties continue to trend upward. Note that enforcement is ongoing all over the country and for all types of provider entities.

This is particularly noteworthy for Texas providers, because in the HHSC Inspector General’s Quarterly Report to the Governor, September 21, 2015, new Texas Inspector General Stuart W. Bowen emphasized to Governor Greg W. Abbott that HHSC OIG is “clearing the decks” of old business and settling outstanding cases in anticipation of a concentrated effort beginning January, 2016 in increased effort in all areas, with a particular emphasis on the area of managed care fraud enforcement. This does not mean other providers will be neglected. Indeed, Mr. Bowen’s reputation as an overachiever at the national level means that exclusion screening will receive additional attention at the state level, whether in the managed care setting, or in the provider setting.

Providers should remember that claims tainted by utilization of services by an excluded individual date back to the date of hire and continue through the date of termination. The False Claims Act imposes a potential liability of $5,500-$11,000 and treble damages along with CMPs of up to $10,000 per violation. In § 3729(b)(1) of the False Claims Act, knowledge of false information is defined as being (1) actual knowledge, (2) deliberate ignorance of the truth or falsity of the information, or (3) reckless disregard of the truth or falsity of the information. That means a negligent failure to check the databases for excluded individuals will be regarded by the government as “knowledge” in the filing of false claims. The more immediate threat to providers comes in the form of Civil Monetary Penalties and return of overpayments, which must be made within 60 days from the time they are discovered and verified.

The following examples of enforcement actions taken by the federal government in 2015 illustrates that all providers and all areas of health care are subject to these increasing Civil Monetary Penalties. Avoiding this potential liability is relatively simply, though labor intensive. However, the cost of failing to do so has risen to the point where the survival of your practice or business may be jeopardized by your failure to do so.

02/04/15 – A California hospital agreed to pay $121,316.55 in CMPs to settle OIG allegations it employed someone it knew or should have known was excluded from California Medicaid.

02/25/15 – A Denver, CO skilled nursing facility agreed to pay $242,434.92 in CMPs because it had employed an excluded nurse. No payment may be made by any Federal health care program for any items or services furnished by an excluded individual.

03/17/15 – A Wilkes-Barre, PA healthcare staffing agency agreed to pay $24,775.56 to settle allegations it employed an LPN who was excluded from any Federal health care program.

03/19/15 – A Skokie, IL home health agency employed an excluded nurse. As a result the HHA was excluded for three (3) years from participation in all Federal health care programs.

03/13/15 – A northeast IN / northwest OH community-based health system entered into a $129,216.80 settlement agreement with OIG for employing an excluded lab tech.

03/31/15 – A Farmville VA mission and rehabilitation facility paid $399,573.85 in CMPs for employing an individual it knew or should have known was excluded from Federal programs.

04/16/15 – A Drexel, PA personal in-home care provider paid $69,130 in CMPs for employing an excluded individual for 18 months between July 2010 and December, 2011.

04/10/15 – a Winter Park, FL mental health counselor agreed to pay $120,000 in CMPs and was excluded for twelve (12) years from participation all federal health care programs for allegedly using an Orlando physician to submit claims for services not rendered or not supervised by a licensed physician.

04/27/15 – An Arlington, TX skilled nursing facility agreed to pay $70,000 in CMPs to OIG for allegedly employing an excluded licensed vocational nurse.

04/27/15 – An Beaumont, TX skilled nursing facility agreed to pay $163,740.54 in CMPs to OIG for allegedly employing an excluded individual.

05/13/15 – A Maryland cardiology practice paid $134,506.47 in CMPs for allegedly employing an individual it knew or should have known was excluded from participation in Federal programs.

05/14/15 – A Houston, TX respiratory and sleep disorder specialist agreed to pay $152,821.07 in CMPs to OIG for fraudulent claims provided at a non-participating facility using its NPI number.

06/01/15 – A Waco, TX managed care provider agreed to pay $100,000 in CMPs to OIG to settle allegations they employed 3 excluded individuals who provided items and services to Federal health care programs beneficiaries.

06/08/15 – A Dallas, TX area skilled nursing facility agreed to pay $77,772.08 to settle allegations it employed a certified nurse’s aide who was excluded from Federal programs.

IV.  Final Remarks:

As a final item, one should remember that both the ACA and Texas Medicaid require that all providers have a compliance plan in place. Exclusion screening, while very important, is just one part of a comprehensive, effective compliance program that every provider is required to have. Staying in compliance is the single best and necessary means to minimize your risk of liability.

For additional reading and guidance regarding exclusions, reinstatement, and the potential penalties for employing an excluded individual, please reference HHS OIG’s Special Advisory Bulletins from September 1999 and May 8, 2013 [10].   For questions regarding creating a compliance for your health care practice or business, please contact Richard B. Pecore at Liles Parker, PLLC at (202) 298-8750 or rpecore@lilesparker.com .

Pecore, RichardRichard Pecore, Esq. is a health law attorney with the firm, Liles Parker, Attorneys & Counselors at Law.  Liles Parker has offices in Washington DC, Houston TX, McAllen TX and Baton Rouge LA.  Our attorneys represent dentists, orthodontists and other health care professionals around the country in connection with government audits of Medicaid and Medicare claims, licensure matters and transactional projects.  Need assistance?  For a free consultation, please call: 1 (800) 475-1906.

Join me on Thursday, December 10th for our free monthly webinar presentation where we will discuss what areas of government enforcement providers can expect HHS-OIG and Texas HHSC-OIG to focus on in 2016.

[1] The Patient Protection and Affordable Care Act, Pub. L. 111-148, as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. 111-152, together called the “Affordable Care Act.” 42 U.S.C. § 18001 (2010).

[2] The American Recovery and Reinvestment Act of 2009 (ARRA) Public Law No. 111-5, 123 Stat. 115, included the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH), 42 U.S.C. §17935.

[3] Health Insurance Portability and Accountability Act of 1996 (HIPAA), Public Law 104–191.

[4] Public Law 105-33.

[5] Although Section 6501 of the Affordable Care Act does not specifically include terminations from CHIP, CMS has required CHIP, through Federal regulations, to take similar action regarding termination of a provider that is also terminated or had its billing privileges terminated under Medicare or any Medicaid State plan.

[6] CMS Bulletin dated 05/31/11, CPI-B 11-05, 6501-Term.pdf https://downloads.cms.gov/cmsgov/archived-downloads/CMCSBulletins/downloads/6501-Term.pdf , last accessed 12/03/15.

[7] http://oig.hhs.gov/exclusions/reinstatement.asp

[8] See HHS-OIG website, Exclusions http://oig.hhs.gov/exclusions/background.asp, last accessed 12/08/15.

[9] Supra at Footnote 7.

[10] http://oig.hhs.gov/exclusions/effects_of_exclusion.asp (1999) and http://oig.hhs.gov/exclusions/files/sab-05092013.pdf (2013), last accessed 12/03/15.

Employing Excluded Individuals Can Cost You!

Employing Excluded Individuals(August 27, 2012):  As you may know, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) has the statutory authority to exclude providers from participation in federal health care programs. An exclusion is arguably the most serious penalty OIG can levy (we’ve previously called it the “nuclear bomb” of health care enforcement) and in essence prohibits an individual from working in the health care industry at all.  There are two types of exclusions: mandatory and permissive. Under its mandatory exclusion authority, OIG must exclude an individual, and they have no discretion to reduce or withhold the punishment. Mandatory exclusions generally last for 5 years. Permissive exclusions, on the other hand, are at the discretion of OIG, taking into account the egregiousness of the conduct, the danger to the Medicare Trust Fund or patients, and the provider’s prior history. Many permissive exclusions are for 3 years, but OIG can shorten or lengthen this time period based on mitigating or aggravating factors.

II.  Employing Excluded Individuals:

But what if it’s not you that is excluded, but instead an employee you hire? Are you on the hook for employing this excluded person? The short answer is yes. Under the civil monetary penalties (CMP) laws, OIG has the authority to assess substantial fines and penalties for several violations, including employing excluded individuals when the employer “knows or should know” that the person was excluded. In most instances, the government takes the position that the employer should have known about an employee’s exclusion based on the provider’s affirmative obligation to check the OIG and GSA databases, and the relative ease with which these databases may be accessed and searched. The knowledge requirement for employing excluded individuals essentially aligns with those of the False Claims Act (FCA): actual knowledge, reckless disregard, or deliberate ignorance.

II. Penalties for Employing Excluded Individuals:

The range of penalties OIG might assess for employing excluded individuals range far and wide. In the end, it really depends on whether the excluded individual is providing reimbursable health services that can be tied to a specific claim. If a doctor who is excluded, for instance, submits claims, the CMP laws call for a $10,000 penalty plus three times the amount claimed (not the amount the government actual pays). If, instead, a biller is excluded and works for a company, OIG usually assesses the company the value of the employee’s salary, sometimes multiplied. So if an excluded biller was paid $40,000 over the course of his or her exclusion, the company could be subject to penalties of $40,000 – $80,000, depending on the culpability of the company.

III.  Important Compliance Steps:

To prevent your company from employing excluded individuals, you should take two steps. First, you need to ensure that your Compliance Plan is effective, up-to-date, and followed by your employees. Establishing and enforcing an effective Compliance Plan is currently the most important step a health care provide can take to reduce the penalties incurred from the government, and reduce the risk of penalties altogether. We’ve discussed Compliance Plan implementation at length, but it bears repeating: get your Compliance Plan today, before you get a knock on the door from government investigators or contractors.

The other important step relates specifically to screening excluded individuals. You should check your current employees on a regular basis. We recommend every six months for smaller providers and once a month for larger providers (usually those with their own dedicated Compliance Officer). A new employee should be screened before they are officially hired, and you should ask on your employment applications if an applicant has ever been excluded from Medicare/Medicaid. In addition, and we can’t stress this enough, get an applicant’s social security number. Names change; numbers don’t. In our experience, the most common reason an employer hires an excluded individual is because they didn’t check all the possible names the individual might have. Many folks use their maiden name or some other alias, or the person checking simply hasn’t spelled the name correctly! As a result, it is best practice to also take down the applicant’s social security number and ask about other names used, so that all of these possibilities can be searched in the databases. At the end of the day, the most concrete way to establish if someone is or is not excluded is through their social security number.

Healthcare LawyerRobert Liles, in our Washington, D.C. office, advises clients on healthcare fraud and abuse matters, including exclusions and CMPs. In addition, he assists providers in implementing effective Compliance Plans and represents clients in Medicare overpayment appeals. For more information or a free 30 minute consultation, call Robert today at: 1 (800) 475-1906.

Provider Exclusion Screening / OIG Screening Practices are a Significant Risk

Provider Exclusion Screening(December 11, 2010):  Has your practice conducted exclusion screening / OIG screening on all of you employees?Earlier this week, HHS-OIG announced that it had assessed significant civil monetary penalties against a health care provider that employed seven individuals who the provider “knew or should have known” had been excluded from participation in Federal health care programs. These individuals were alleged to have furnished items and services for which the provider was paid by Federal health care programs.  The provider paid $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 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,”

Notably, this matter was referred to HHS-OIG for investigation by the State Medicaid Fraud Control Unit (MFCU).

I.  Lessons to be Learned When Performing Exclusion Screening / OIG Screening:

This case illustrates a number of important lessons for all health care providers who participate in Federal Health Benefits Program, regardless of size. These lessons include:

OIG Screening employees is easy and quick: It takes very little effort for a provider to screen current and prospective employees against HHS-OIG list of excluded parties and GSA’ s list of parties who have been debarred from participation in Federal contracts. Notably, the failure to screen employees can be quite costly.

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 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 actions and findings: Notably, these violations were first identified by a State MFCU who then contacted HHS-OIG. Similarly, we are seeing State Medical Boards advising ZPICs of actions they are taking against licensed health care providers. In several cases, the State Medical Board found that the provider was either 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.

In summary, health care providers should continually be reviewing their compliance efforts to ensure that basic mistakes such as the ones in this case (failure to properly screen employees) do not occur.

Our attorneys represent health care providers around the country in connection with compliance issues.   Please feel free to contact us for a complimentary consultation.  We can be reached at: 1 (800) 475-1906.