Medicaid Providers That Are Excluded or Terminated for Cause Often Continue to Participate in Other States According to a New OIG Audit

OIG Audit Findings

In a recently released audit, the OIG found that despite the ACA requirement that states terminate Medicaid providers already terminated in another state, 12% of providers already terminated for cause in 2011 in one state (295 out of a sample of 2,539) were still participating in other state Medicaid programs as of January of 2014! There is a lack of state to state coordination identified in both this audit and one issued last March, and a lack of state to Federal coordination identified in separate OIG audit reports. This strongly reinforces our suggestion that providers screen their employees, vendors and contractors on all available State Exclusion Registries in addition to the LEIE and the SAM!

Exclusion, Termination and the ACA

In practical terms, to implement section 6501 of the ACA, states must first find the providers who are terminated from federal healthcare programs. Then, states must identify whether any terminated providers are participating in their Medicaid program. Finally, they must take action to terminate the provider from its own Medicaid program.

According to the report, this is defeated by a general lack of coordination caused in large part by a lack of uniformity of terminology among not only the states, but in existing Federal and state databases. For instance, exclusion and termination are synonymous in many states, but they have distinctly different meanings for CMS. This is also true with such terms as suspension, disbarment, revocation and sanction. Furthermore, what constitutes “cause” in one state may not in another state. The audit also notes that some states have a basic misunderstanding about the relationship between licensure and exclusion or termination. Those states often conclude that if Medicaid providers have an active license from the relevant state board, the state Medicaid agency should defer to the judgment of that board and not terminate the providers for cause.

Principle OIG Recommendations

The OIG reiterated its recommendation from March 2014 that CMS require state Medicaid agencies to report all terminations for cause. The OIG found that a lack of a comprehensive data source of providers terminated for cause creates a challenge for state Medicaid agencies. It also recommended that CMS work with states to develop a uniform terminology, that CMS furnish guidance to state agencies that termination is not contingent on the provider’s active licensure status, and that it require states to enroll providers who participate in their managed care programs.

The Message to Medicaid Providers

This audit report stresses, once again, the importance of screening all state Exclusion databases as well as the LEIE and the SAM. This message reinforces two important ideas: 1) States do not reliably share their information either with other states or with the Feds; and 2) a significant percentage of excluded or terminated physicians, nurses and other employees will take advantage of this lack of coordination to their advantage and your disadvantage!

Are you taking the necessary precautions to ensure you are not working with an excluded entity? We know it can be difficult to screen every Federal and State exclusion list. Call Exclusion Screening at 1-800-294-0952 or fill out the form below to hear about our cost-effective solution and for a free quote and assessment of your needs.