Which Federal & State Exclusion Lists Should Be Screened?

The complex web of regulation encompassing government health care dollars is a lot to take on. With 41 state exclusion lists and several federal lists, it can be difficult to know which exclusion lists to screen, let alone actually screening them all. Each government payor of healthcare dollars has a different set of rules on who is allowed and who isn’t allowed to bill their services. Healthcare providers are not legal experts, nor should they have to be. Rather than taking the risk of non-compliance, we break down exclusion regulations for you and explain which exclusion, sanction, debarment, or termination list you must check as a healthcare provider.

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What is an Exclusion?

Exclusions are a final administrative action that is intended to protect the financial integrity of health benefit programs and beneficiaries by removing individuals and entities that pose a risk to them. While a party does have right when noticed that they are about to be excluded, as a final administrative action, once excluded there is no further appeals process.

Impact of Exclusions

An exclusion is the nuclear bomb of administrative actions. As a result of an exclusion, a payment prohibition is enforced. Federal and State programs will not pay or items or services furnished, directly or indirectly, by excluded entities. In essence, the government has decided that they do not want programs to pay for the overhead or salaries of excluded parties. Therefore, to comply with exclusion regulations it is best to screen all employees, contractors, vendors and even volunteers.

Scope of the Payment Prohibition

The payment prohibition extends to anyone who has an effect on patient care. This extends to all services connected to a practice, including but not limited to:

Billing, Claim Processing, and Accounting Services
Leadership, Management, Administrative, and Strategic Services
Human Resource and Information Technology Services
Transportation Services – including drivers and dispatchers
Even volunteers if their activities contribute to a bundle of services

Where are exclusions listed? How many exclusion lists are there?

Exclusion Screening recommends for best practice to screen against two Federal Exclusion lists, and 41 state lists. The primary healthcare exclusion list is the OIG/LEIE. Together with the GSA SAM, previously known as the EPLS, the LEIE and the SAM make up the two Federal Exclusion Lists. While the GSA/SAM is not a healthcare-specific list, it is a federal debarment list and any party on it cannot enter into any federal contract.

While screening these lists are best practice, there are many more exclusion lists such as the CMS Preclusion list, OFAC, SDN, among others. Depending on your organization’s payors, contracts, or state requirements you may have to screen more than our recommendation.

Screening Obligations for Fee for Service Medicare

The Department of Health and Human Services, Office of Inspector General (OIG) maintains the List of Excluded Individuals and Entities (LEIE). This is considered the most comprehensive of all exclusion lists, with over 70,000 names on it. At a minimum, the OIG-LEIE must be checked to participate in Fee for Service Medicare.

However, checking only this list opens an entity up to risk. This is because although every state is required to send their exclusions-for-cause to the OIG, some states are slow to do so and often miss sending some parties. As a result, the OIG-LEIE is missing several excluded parties. Despite the OIG missing these parties on their list, an entity is still liable if they screen the LEIE and hire the party. For this reason, it is also important to check state-level exclusion lists.

Screening for Medicare Advantage Providers

Medicare Advantage providers have unique screening requirements. They must screen both the OIG/LEIE and the CMS Preclusion list. Medicare Part C and Part D Plan Sponsors are unique because they are the only group of providers that must screen the Preclusion list and are the only ones to have access to the list (the Preclusion is not public).

The list differs from the OIG/LEIE because, unlike the OIG/LEIE, the Preclusion List does not require a final action for a party to be added to it. If there is a basis for revocation, such as participating in conduct that COULD result in revocation, whether or not the revocation happens, a party may be put on the preclusion list. While Medicaid Advantage Providers are the only ones to have access to the CMS Preclusion list, they may delegate screening of the list to a third-party such as Exclusion Screening. (Read more about the preclusion list here)

Screening Requirements Imposed by State Medicaid Programs

Most states have two different sets of screening requirements. The “Basic” screening requirements flows from letters issued by CMS to each state Medicaid director mandating monthly exclusion screening by Medicaid providers. This requires screening of the OIG/LEIE, the state exclusion list (if there is one), and some state have state-specific lists that must be searched (i.e. sex-offender list, elder abuse list).

Additional requirements are associated with Provider Agreement and Reenrollment forms. These contain significant disclosure and verification requirements. However, there is no consistent standard between the states. For example, as part of the Texas Medicaid participation agreement, a provider must check ALL states and federal databases and certify, under penalty of perjury, that none of their employees, contractors, and vendors are on them. While in Louisiana a provider must certify that no employee, vendor or contractor has EVER been excluded from ANY program. Although many state requirements do not explicitly say what must be screened, how could a provider give an honest answer and protect themselves from perjury without screening all exclusion lists.

A map of states with their own exclusion list (in red) can be found below.

Medicaid Advantage Care Screening Requirements

Medicaid Managed Care Plans may not work with any of the following to provide, directly or indirectly, “the administration, management, or medical services or establishment of policies or provision of operational support for such services.”

Any individual or entity that is (or affiliated with a person or entity that is) debarred, suspended, or excluded from participating in procurement activities under the Federal Acquisition Requirement (FAR) or,
Any individual or entity that is excluded from participation in any Federal healthcare program…

To ensure that your organization is complying with the FAR regulation, it is important to screen against the GSA/SAM, as well as the OIG/LEIE and the 41 state exclusion lists.

Enforcement Mechanisms

OIG’s Civil Money Penalties Authority for Exclusion Related Violations:

It is important to remember that each of these Civil Money Penalties is for each offense. A provider who has worked with an excluded party can quickly rack up several offenses with each claim submitted to a health benefits program.

Failure to screen can also result in False Claims Act liability. While a provider must “knowingly” hire an excluded party to be open to False Claims Act liability, “knowingly” by statute includes reckless disregard or deliberate ignorance, such as not doing exclusion screening.

Additional Consideration #1: Almost Every Risk Area is Directly Related to Employees or Contractors

Human capital is the heart of your practice, but also is the biggest risk in your organization. Any plan to lessen risk needs to start with ensuring that all employees and contractors are screened.

Additional Consideration #2: Screening is part of an effective compliance plan

As of 2017, the OIG has included “screening and evaluation of employees, physicians, vendors, etc.” as part of the seven elements of an effective compliance plan. The OIG views screening as an important step to mitigate risk.

Additional Consideration #3: Exclusions show up on different lists at different times. And sometimes not on lists you expect.

When states take an exclusion action they are supposed to report it to other states and the OIG so they can be added to other lists. However, it doesn’t always happen. Even the OIG/LEIE, the biggest list of them all, doesn’t have all exclusion records. It is important to remember that as public knowledge, a provider is presumed to know if any employees or contractors are on ANY of the exclusion lists. Screening only the OIG/LEIE is not enough and will not shield a practice from liability.

Additional Consideration #4: Can Failure to Screen be Excused?

Imagine this, an accident or incident resulting in patient harm or financial loss to the practice occurs and the harm was caused by or related to an employee on one of the exclusion list. A judge or jury would have no sympathy for the practice that failed to screen. There is no excuse not to screen all State and Federal exclusion lists.

Final Thoughts

Screening the OIG-LEIE, GSA-SAM, and the 41 State exclusion lists is not only good business practice, it is essential to protecting your organization from legal implications. At Exclusion Screening, LLC. we provide a simple, automated, and cost-effective solution to the complexity of monthly screening of over 40 exclusion lists. We use the sophisticated algorithms in our SAFER system to screen all lists, including variations of individual names, to ensure your organization complies with exclusion screening obligations.

Call 1-800-294-0952 or fill out the form below to discuss your exclusion screening needs and a free assessment.

In-Depth Articles

Exclusion Loophole: Medicaid Managed Care

Identifying and Terminating

This loophole creates two unique problems for state Medicaid programs. First, it is much harder for a state to keep track of the providers participating in its Medicaid Managed Care program if the state does not require providers to actually enroll. In addition, if a state does not know exactly who is participating in its Medicaid Managed Care Program, then it is also difficult to search for providers to ensure that they were not terminated from participation in another state as required by ACA 6501. Second, it is very difficult for a state to terminate a provider from participating in its Medicaid program if it has no contractual relationship with that provider. In other words, it is very hard to end a relationship with someone if there was never a mutual agreement to actually begin the relationship.

Solution in Sight?

OIG recommended that CMS require state Medicaid programs to enroll Medicaid managed care providers. This would ensure that state Medicaid programs are actually able to identify and terminate providers who are terminated from participating in the federal health care programs by another state. CMS, not only heard this recommendation, but issued a Notice of Proposed Rulemaking in June 2015 which will close the loophole if finalized. Even if this loophole is officially closed, Exclusion Screening, LLC will continue to recommend that providers screen all available federal and state lists to protect their practices. This is just one of the many ways terminated providers have gamed the system.

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.

Ashley Hudson, Associate Attorney at Liles Parker, LLP and former Chief Operating Officer for Exclusion Screening, LLC, is the author of this article.

Who Is to Blame for Gaps in OIG and State Exclusion Lists? What Is the Impact on Providers?

The failure to report excludable offenses by state Medicaid offices and licensing boards is a longstanding issue for the OIG. Recent OIG audits and reports have confirmed these state failures to report. For example, an OIG study released in August found that over 12% of terminated providers were able to continue participating in other state Medicaid programs because states were not sharing terminated provider information. In addition, two recent Medicaid Fraud Control Unit (MFCU) audits discovered that they routinely failed to timely report conviction information to the OIG and sometimes did not report them at all.[1] Reporting failures lead to gaps in the OIG Exclusion List (LEIE) because the OIG cannot exclude an individual if the OIG is never informed of the state’s conviction, termination, or suspension of providers. Such failures to report are important because the information that would have been reported can lead to exclusion violations, which are listed on the LEIE. But, state compliance failures are not the only cause of gaps in OIG and State exclusion lists – as we discuss, no matter who is at fault, the provider may pay for anyone’s mistake.

The OIG Exclusion List Has Limited Search Capabilities

One important reason providers should not rely on screening only the LEIE is that its search function is extremely narrow. If an excluded individual uses a different name, such as a middle or maiden name, an LEIE search using the person’s first and last names my not produce any results.[2] For example, J. A.[3] was excluded from participation on Georgia’s state exclusion list in August 2015. However, a search for “J.A.” on the LEIE currently produces zero results.

Conversely, when we searched J.A. on SAFER^TM, our proprietary exclusion database, we not only found a match on the Georgia list (“J.A.”), but we also found a match on the LEIE and SAM databases for “R.J.A.”. Interestingly, “J.A.” has the same middle and last name as “R.J.A.,” they are both Georgia residents, and they were both excluded from participation in April 2015. Like many states, the identifying information on Georgia’s list is sparse. Nevertheless, it is extremely likely that R.J.A. and J.A. are the same person, which a provider would have missed if he only searched the LEIE for J.A.

Reported Cases May Not Be Picked Up by OIG

Florida’s Agency for Health Care Administration publishes monthly press releases which identify persons terminated from participation in Florida Medicaid. It expressly states that the exclusion information was “reported to the federal government for placement on the federal exclusion list,” and named providers appear on Florida’s Excluded Provider List. When we conducted a SAFER^TM search for G.B., who was listed on the April 2015 memo as “terminated from participation,” the only two “hits” were from Florida’s state exclusion list.

However, an LEIE search for G.B. produced zero results.

One possible explanation for why G.B. fails to show up on the LEIE could be the administrative process of OIG actually reviewing the reason for the termination and then formally excluding G.B. Nevertheless, a provider who only screens the LEIE and employs or is considering employing G.B. would miss this exclusion.

OIG Just Misses Some Cases

K.B., a Registered Nurse (RN) with multistate licensure privileges, was placed on probation for substance abuse in February 2005. After testing positive for morphine, Iowa revoked her license and several other states revoked her multistate privileges. While the revocations were reported, the licensure revocation only resulted in K.B.’s exclusion from participation by California and the GSA-SAM in 2010. K.B. is not listed on the LEIE. This means that K.B. is unable to participate in any other state Medicaid program because under the ACA 6501, if you are terminated for cause from participation in one state, then you are terminated in all states, and K.B. is barred from contracting with the federal government. However, if a provider only screened the LEIE he would be completely unaware and could potentially face very hefty fines.

What This Means

Clearly some information is getting lost or mixed up in the reporting pipeline between state Medicaid offices, MFCUs, and the OIG, and the lesson for providers is that merely screening the LEIE is not enough. The examples above demonstrate that human error, narrow search functions, and simply missed information all play a role in the gaps that exist between publication on state exclusion lists and the LEIE.

State Medicaid offices are responsible for compiling and reporting information about excluded providers. However, as demonstrated by the “J.A.” case, the probable human error of transposing names combined with the LEIE’s limited search capabilities could result in a provider employing an excluded person, even though he was properly screened against the LEIE. To avoid this, providers should screen against the LEIE, the GSA-SAM, and all available state lists monthly. Practices should also ensure they use wide search parameters (alternate spellings, full names, maiden names, etc.) when conducting searches or they should select a vendor, like Exclusion Screening, LLC, with a system designed to anticipate these issues.

Notwithstanding name discrepancies, some information just does not make it to the LEIE. As the “G.B.” example reveals, a practice may face considerable monetary fines because it failed to screen the Florida exclusion list and relied solely on the LEIE for exclusion information, and the OIG failed to add G.B.’s name to the LEIE. Similarly, a provider who considered employing “K.B.” would be totally unaware that she was excluded from participation unless the provider screened the GSA-SAM and/or the California exclusion list. Remember that ACA section 6501 states that when an individual or contractor is excluded in one state, he or she is excluded in all states. When a provider misses such state exclusion information, he or she could be liable for CMPs of $10,000 for each claim provided directly or indirectly by the excluded individual, an assessment of up to three times the total amount paid by the government, and potential false claims liability. Relying on the LEIE’s exclusion information without checking all other available state exclusion lists is a substantial monetary risk for a practice to take.

[1] MFCUs are supposed to send a referral letter to the OIG within 30 days of sentencing for the purpose of alerting the OIG about providers excluded from state programs, but the OIG found that in some cases this exclusion information was not referred to the OIG for over 100 days.

[2] We have even found that hyphenated names frustrate LEIE searches even where the actual names are used!

[3] Full names have been redacted for privacy.

Health Care Fraud: Second Conviction Secured in Michigan Excluded Provider Scheme

In February, we reported that the Michigan Attorney General secured a racketeering and health care fraud conviction against an excluded Michigan podiatrist. The podiatrist participated in an elaborate health care fraud scheme with another Michigan provider. In early July, the Michigan Attorney General successfully convicted the doctor who knew or should have known that the podiatrist was excluded.

Health Care Fraud Conviction Details

The Attorney General’s investigators determined that the provider hired a former podiatrist who was convicted of health care fraud in 2003. The podiatrist was subsequently excluded from participation in the federal health care programs for a period of 25 years. The provider billed private insurance and the government for the excluded podiatrist’s medical services as if he performed them. Trial testimony indicated that the provider made payments to the excluded podiatrist from the same account where health care program payments were deposited.

For entering into this scheme, the provider was convicted of racketeering (20-year felony), thirteen counts of health care fraud (4-year felony), and five counts of Medicaid fraud (4-year felony). Up to $200,000 in fines accompanied the convictions.

Takeaway

The Michigan provider was held liable because he “knew or should have known” that the podiatrist he contracted with was excluded from participation in the federal health care programs. The OIG and state Attorney Generals are working to end health care fraud by seeking out providers who employ or contract with excluded persons or entities. The best way to protect yourself from liability is to screen all employees and contractors against all federal and state exclusion lists monthly.

Ashley Hudson, Associate Attorney at Liles Parker, LLP and former Chief Operating Officer for Exclusion Screening, LLC, is the author of this article.

Excluded Individual Conducts Elaborate Health Care Fraud Scheme

Background

New Jersey prosecutors allege that the provider has been the owner and operator of a New Jersey ambulance company to which Medicare and Medicaid have paid out a combined $7.5 million since 2010. The provider allegedly hid his involvement in the company by paying employees in cash. The defendant has owned and operated the ambulance company since 2005, which is only two years after he was excluded from participation in the federal health care programs for a period of 11 years. The provider now faces a 17-count federal indictment with a possible sentence of 30 years in prison for conducting the health care fraud scheme.

Takeaways

It may be difficult to protect yourself from individuals like this New Jersey provider who explicitly sought to defraud the federal health care programs. Providers should, however, try to protect themselves by conducting monthly exclusion screening searches of their employees and contractors. Providers should also maintain proper records of these searches. States, like the federal government, are actively pursuing those who are in violation of federal health care regulations. Remember, compliance is always the best policy!

Ashley Hudson, Associate Attorney at Liles Parker, LLP and former Chief Operating Officer for Exclusion Screening, LLC, is the author of this article. Feel free to contact us at 1-800-294-0952 or online for a free consultation.

How to Apply for Reinstatement

I. The OIG Exclusion Reinstatement Process

Most exclusions are imposed for a definite time period. The question for an excluded individual or entity is: What happens at the end of the exclusion period?

The answer is that the excluded individual or entity must apply for reinstatement. The U.S. Department of Health and Human Services (HHS) will NOT automatically reinstate the person or entity at the end of the exclusion period.

An excluded provider may apply for reinstatement 90 days before the date specified on his, her, or its exclusion notice letter. To apply for reinstatement the excluded individual or entity must send a written request to:

HHS, OIG, OI
Attn: Exclusions
P.O. Box 23871
Washington, DC 20026
(202) 691-2298 (Fax)

The Office of the Inspector General (OIG) will send the provider Statement and Authorization forms to complete, notarize, and return. OIG will review these forms and will send the provider a written notification of its final decision. This process may take 120 days or longer to complete.

II. Denial of OIG Exclusion Reinstatement

If the application for reinstatement is denied, the excluded individual or entity may submit evidence and a written argument against the continued exclusion; a written request to present written evidence and oral argument to an OIG official; or documentary evidence and a written request to present oral argument.^[1] The evidence, written argument, or written request for a hearing must be submitted 30 days after the provider receives the written notice of OIG’s final decision.^[2]

After reviewing the materials (or after the 30-day period, if no materials are submitted), OIG will send the provider written notice either confirming the denial or approving the request for reinstatement.^[3] If OIG confirms its decision to deny reinstatement, the decision will not be subject to administrative or judicial review and the provider must wait at least one year to submit another request for reinstatement.^[4]

What is an OIG Exclusion?

By Paul Weidenfeld

I. What is an OIG Exclusion?

An OIG Exclusion is a final administrative action by the Office of the Inspector General (OIG) that prohibits participation in any Federal Health Care Program. Exclusions are imposed because the individual or entity is found to pose unacceptable risks to patient safety and/or program fraud. As a result, Federal health care programs such as Medicare, Medicaid and TRICARE will not pay for any service provided — either directly or indirectly — by an excluded person or entity.

II. Who Has the Authority to Impose an OIG Exclusion?

The Department of Health and Human Services (HHS) has the overall responsibility of administering the Medicare and Medicaid Programs. HHS decides who may receive benefits under these programs and who will be allowed to provide them.

The authority to exclude individuals and entities from federal health care programs is delegated to OIG.^[1] OIG enforces the exclusion penalty through its authority to impose civil money penalties (CMPs) where claims are submitted for services performed or furnished by an excluded person or entity and the person making the claim “knew or should have known” of the exclusion.

III. OIG Exclusion Types

There are two types of OIG exclusions, mandatory and permissive, and both have the effect of barring an individual or entity from participating in all Federal health care programs from the time they are excluded until such time, if ever, that their privilege is reinstated.^[2] Mandatory exclusions last a minimum of 5 years and must be imposed if a person or entity is convicted of certain criminal offenses. These include:

Conviction for Medicare or Medicaid fraud, or any other offense related to the fraudulent delivery of items or services to Federal or State health care programs;
Patient abuse or neglect;
Felony convictions for other health care related fraud, theft, or other financial misconduct; and
Felony convictions relating to unlawful manufacture, distribution, prescription, or dispensing of controlled substances.

The discretionary authority to exclude individuals and entities implicates a much wider range of conduct. We discuss this topic in a later article, but examples for which permissive exclusions may be imposed include:

Misdemeanor convictions related to defrauding a heath care fraud program,
Misdemeanor convictions relating to the unlawful manufacture, distribution, prescription, or dispensing of controlled substances,
Suspension, revocation, or surrender of a license to provide health care for reasons bearing on professional competence, performance, or financial integrity,
Provision of unnecessary or substandard services;
Submission of false or fraudulent claims to a Federal health care program,
Engaging in unlawful kickback arrangements,
Defaulting on health education loan or scholarship obligation, and
Controlling a sanctioned entity as an owner, officer, or managing employee.

IV. Consequences of OIG Exclusion

Federal health care programs, principally Medicare and Medicaid, will not pay for any item or service that is furnished or performed by, or on the prescription or direction of, an excluded individual.^[3] Since federal health programs subsidize virtually all hospitals and account for 60-65% of all health care dollars spent, exclusion is a severe restriction and is often a death knell to providers.

Providers of the federal health care programs must ensure that their employees, contractors, and vendors are not excluded and the failure to do so can result in significant penalties. The OIG has the authority to impose penalties of up to$21,562.80 for each item or service furnished by the excluded person or entity, as well as assessments of up to three times the amount claimed.^[4]In addition, providers may be liable for overpayments.

Even when a provider is unaware that a person was excluded at the time the claim was made, OIG has issued guidance advising that such inadvertent violations must be reported and repaid.^[5] In light of this guidance, any claim that might involve an excluded person or entity could potentially have False Claims Act implications under the Affordable Care Act if it is not dealt with in a timely and proper manner.

v. Conclusion

This article is just intended to be an introductory outline of the basics to answer the question, What is an OIG Exclusion? Our other posts have additional information, but if you have any questions about exclusions and your screening obligations, feel free to contact any of us at Exclusion Screening, LLC^SM, at 1-800-294-0952 or fill out the form below.

Click here to read more on OIG Exclusions

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] Sections 1128 and 1156 of the Social Security Act.

[2] Mandatory exclusions are found at 42 USC § 1320a-7; permissive exclusions are principally found at 42 USC § 1320a-7(b).

[3] Section 1862(e)(1) of the Social Security Act and 42 CFR § 1001.1901(b)(1).

[4] 42 CFR §1003.102 (a)(2).

[5] It was issued April 17, 2013 and it is also the subject of an article posted on our site.

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