Massachusetts Medicaid Exclusion Screening Requirements

Massachusetts Medicaid Exclusion Screening:
Requirements and Best Practices for Compliance

The Massachusetts Medicaid Exclusion requirements, under MassHealth, will not reimburse any item or service furnished directly or indirectly by individuals or entities that have been excluded from any State or Federal health care programs. This broad “Payment Prohibition” is enforced by the Massachusetts Executive Office of Health and Human Services, Office of Investigation General (MA-IOG) through rigorous exclusion screening requirements and the threat of civil money penalties and overpayment liability. This article discusses the exclusion screening obligations that providers of Medicaid services in Massachusetts must comply with, and it suggests best practices to promote compliance.

What is a Medicaid Exclusion?

“Exclusions” are final administrative actions by State or Federal agencies that bars all participation in a sponsored benefit program. When a State bars and individual or entity from participating in its Medicaid program, that is typically referred to as a “Medicaid Exclusion;” similarly, when someone is barred from the Medicare program, that is commonly referred to as a “Medicare Exclusion.” Massachusetts is one of the 41 States that maintains its own exclusion list (DC also has one), and it can be found on the MassHealth website at https://www.mass.gov/service-details/learn-about-suspended-or-excluded-masshealth-providers. The OIG’s “List of Excluded Individuals and Entities” (LEIE) contains the federal Medicare Exclusions, and it is maintained on the OIG website at https://exclusions.oig.hhs.gov/. States without their own exclusion lists rely on the LEIE.

Who Gets Excluded? Why are Exclusions Imposed?

The primary reasons for MassHealth to exclude a party, as found on its website, are as follows:

Not complying with participatory requirements of the MassHealth program.
Being excluded under Medicare.
Suspension of exclusion by any other state Medicaid agency.
Having an inactive, terminated, suspended, or revoked license or authorization to provide services.
Conviction of health care fraud.
Pleading guilty to or being convicted of criminal activity materially related to Medicare or Medicaid.
The U.S. Department of Health and Human Services initiated an action that is binding on the provider’s participation in the Medicaid program. See, https://www.mass.gov/service-details/learn-about-suspended-or-excluded-masshealth-providers .

What is the Effect of a Medicaid Exclusion?

Stated simply, exclusions are intended to virtually eliminate the ability of an individual or entity to continue to receive funds from State or Federal healthcare benefit programs.

A provider suspended from MassHealth due to an exclusion is, “not eligible to participate… [and] cannot receive payments for any services” until they are reinstated in the program, 130 CMR 450.217. This sanction is commonly referred to as a “Payment Prohibition,” and it mirrors the ban imposed by the Health and Human Services.

Further, as noted in MassHealth’s All Provider Bulletin 196.

“federal regulation prohibit MassHealth from paying for any items or services furnished, ordered, or prescribed by the excluded individual or entity. The payment prohibition bars:

Direct payment to excluded individuals and entities;
Payment to individuals or entities that employ or contract with excluded individuals or entities; and
Payment for administrative and management services furnished by excluded individuals or entities that are not directly related to patient care, but are a necessary component of providing items and services to MassHealth members.”

The limitation on reimbursements extends to all services whether they are reimbursed directly or indirectly and regardless to whether they are a pay per service or part of a bundled payment. For example, they include services performed by excluded pharmacists, excluded individuals who input prescription information for pharmacy billing, or persons involved in any way in filling prescriptions for drugs reimbursed by a Medicaid program. It also includes services performed by excluded administrators, billing agents, accountants, or utilization reviewers if their services are reimbursed, directly or indirectly, by a Medicaid program; and items or equipment sold by an excluded manufacturer or supplier (See, the All Provider Bulletin 196 and the OIG’s 2013 Special Bulletin on the Effects of Employing Excluded Parties.),

Additionally, pursuant to Section 6501 of the Affordable Care Act, States are required to terminate the participation of any provider that has been terminated “for cause” by any other State Medicaid program. This is intended to strengthen Medicaid programs by stopping providers that are excluded in one State from moving to another and providing services there, and even though some states have been slow to enforce this provision, an exclusion for cause imposed by MassHealth is a basis for exclusion by every other state, and the exclusion for cause by any other State Medicaid Program is grounds for exclusion in Massachusetts. Thus, an excluded individual is truly radioactive when it comes to providing services in Massachusetts or in any other State or Federal Health Benefit Program.

Provider Exclusion Screening Requirements:

MassHealth imposes rigorous “exclusion screening” requirements which, as will be seen arise from more than one source. Providers that fail to meet their screening obligations risk overpayment liability, penalties, and suspension or termination from the program. Larger providers should also be aware that each State has its own separate set of screening obligations.

Basic MassHealth Exclusion Screening Obligations

MassHealth’s baseline exclusion screening obligations are set forth in the All Providers Manual, Provider Bulletin #196. These requirements are consistent with those outlined by CMS and HHS/OIG, and to comply with them providers of Medicaid services must:

Screen all employees and contractors with the OIG’s List of Excluded Individuals/Entities (LEIE), to determine if the OIG has excluded any of them from participation in federal health care programs,
Screen employees and contractors with the MassHealth Exclusion List,
Screen each individual or entity upon hire and monthly thereafter to ensure there hasn’t been a change in status, and,
Immediately report any discovered exclusion of an employee or contractor to the EOHHS Compliance Office. (See, MassHealth All Providers Bulletin #196, 2009, See also, State Medicaid Director Letter #09-001 issued by the Centers for Medicare & Medicaid Services (CMS).

***Additional* *Exclusion Screening Obligations Imposed by MassHealth***

In addition to the basic requirements outlined above, the MassHealth enrollment and re-enrollment process, and the disclosure requirements that accompany them, created additional exclusion screening obligations that providers need to be aware of. Specifically, providers seeking to enroll in MassHealth must identify all direct and indirect owners, agents, managers, and any other “Medicaid disclosing entity” and disclose if they have ever been excluded from participation in Medicare or any of the state health care programs. Similarly, providers must notify “MassHealth agency whenever it has notice of a termination or suspension from participation in Medicare or another state’s Medicaid program;” (See, 130 CMR 450.212(A)(6), 130 CMR 450.215 and the MassHealth Disclosure Form which is found on the MassHealth website).

Finally, MassHealth requires applicants to “certify sign under the pains and penalties of perjury,” that the information contained in the application and the disclosure forms is true, accurate, and complete. If it’s not accurate the applicant, “may be subject to civil penalties or criminal prosecution for any falsification, omission, or concealment of any material fact contained herein.” It goes without saying that the only way for a provider to meet these requirements is by screening at the initiation of the relationship and monthly thereafter. This, again, can only be met by having a vigorous and effective exclusion screening program

Enforcement

The Chief Counsel division of the Massachusetts Office of Inspector General is primarily involved in exclusion enforcement. The General Law section within the OIG is responsible for taking initial actions that relate to excluding providers when required by federal law, and the Litigation Section actually processes provider enrollment terminations and exclusions. The Medicaid Program Integrity division (MPI) may also be involved in investigating potential exclusions and referring them to the Litigation Section. In addition to potential overpayment liability, violations can result in federal civil money penalty or criminal liability under § 1128A and § 1128B of the Social Security Act. Massachusetts may also include the imposition of triple damages and/or penalties up to $11,000 per false claim. See All Provider Manual Subchapter 2: Administrative Regulations; 130 CMR 450.217 ; See also, the Massachusetts AG site on False Claims

Best Practices for Compliance with Massachusetts Medicaid Exclusion Screening Requirements

Compliance with exclusion screening requirements is critical. Providers that fail to ensure the exclusion status of their owners, managers, employees and contractors risk overpayment liability, the imposition of civil money penalties, and even possible criminal consequences. Only proper exclusion screening can help providers mitigate or avoid these risks, and this section will suggest some practices that providers should consider including in their compliance plans.

A. Interpret the Requirement to Screen Employees, Vendors, and Contractors Broadly

The OIG widely interprets employees, contractors and vendors to include those that provide direct and indirect services — and so should you. It is recommended that you include, for example, individuals and entities in the following roles or who perform the following functions:

Owners, directors, managers, administrators — anyone in a leadership role,
Anyone providing support or care either directly or indirectly,
Those involved in claims processing,
Transportation service providers,
IT and Security providers and their technicians,
Medical equipment suppliers, Pharmacies and their Pharmacists,
Agencies providing temporary direct services providers.

See, All Providers Bulletin #196, 42 CFR 1001.1901(b), State Medicaid Director Letter #09-001 from the Centers for Medicare & Medicaid Services (CMS) and the OIG’s 2013 Special Bulletin.

B. Screen Upon Hire or Contract Initiation, and Monthly Thereafter

As previously discussed, providers must screen upon hire and monthly thereafter. This is is the only way to ensure compliance with the obligation to ensure an exclusion-free workforce and, again, it is supported by All Providers Bulletin #196 and the State Medicaid Director Letter #09-001 from the Centers for Medicare & Medicaid Services (CMS).

C. Screen the MassHealth Exclusion List, the LEIE, and all State Medicaid Exclusion Lists

The only way to maintain compliance with both the obligations contained in the MassHealth regulations, the enrollment process and their disclosure obligations, and the provider’s ongoing obligation to notify MassHealth of exclusions, providers should screen all 41 State
Exclusion Lists and the LEIE in addition to the MassHealth Exclusion List. It is also noted that this is an important practice in light of Section 6501 of the ACA.

D. Don’t Forget to Include Owners, Officers, and Managers

These folks must be identified and disclosed; their exclusion status must be “certified”; and providers must “update” any changes in that status. This can only be accomplished by including them on the monthly list.

E. There are Special Rules for Billers and Coders

Because they submit the claims, Billers and third-party billing companies receive “special attention” when it comes to exclusion screening. The OIG guidelines in the Advisory Bulletin states that providers should consider adopting some or all of them:

Requiring third-party billers to have a policy of not employing excluded persons and provide proof that it is, in fact, screening, and,
Requiring all billers to be trained in connection with the applicable requirements and preparation of the claims they are submitting

F. Hire a Vendor to Fulfill Your Exclusion Screening Requirements

Some providers are able to perform the “basic” screening obligation of checking the Massachusetts Medicaid Exclusion List and the LEIE, but providers that attempt to screen all State and Federal Exclusion Lists are almost certainly going to find the task to be insurmountable. The difficulty stems from several factors: there is no uniformity in the list formats (they could be in WORD, Excel or PDF); each list contains different fields on information; States have different reasons and standards for including people on their list; and some States may have little to identify the person or entity beyond a name and city. In short, as with many other necessary services, providers will benefit from specialized assistance in meeting this regulatory obligation.

For this reason, it is recommended that providers consider hiring a 3 rd party vendor to assist in screening. BUT, providers should be aware that vendor services, and the costs they charge, often vary widely. Thus, providers are urged to consider more than one vendor and to compare the specific services they will receive and the costs of each service. As part of this process, we hope that you will give Exclusion Screening the opportunity to demonstrate what it can do and how it can help.

Closing Comments

The goal of this article is to help providers gain a better understanding of the Massachusetts Medicaid Exclusion requirements and to provide suggestions on compliance best practices. As we have said, we believe that providers will benefit from specialized assistance in meeting this regulatory obligation, and we invite you to call or visit with us at Exclusion Screening to see if our state-of-the-art technology, ease of use can help you meet your exclusion screening compliance needs.

For a look at other State Exclusion Databases click here!

If you are a provider in Massachusetts call us at 800-294-0952 or fill out the form below and see how we may be able to assist you and make this process a breeze.

The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. This website contains links to other third-party websites. Such links are only for the convenience of the reader, user or browser; Exclusion Screening does not recommend or endorse the contents of the third-party sites.

Pennsylvania Doctor Excluded in Connection with Quality of Care

(September 26, 2019): Over the past year, both State and Federal law enforcement investigators and prosecutors have gone to considerable lengths to publicize the government’s fight against opioid abuse. While much of this fight has focused on the manufacturers of prescription opioid products, the improper prescribing practices of physicians and other medical professionals found to be prescribing these drugs “without any legitimate purpose and outside the usual course of professional practice” have been repeatedly highlighted in criminal prosecutions by U.S. Attorney’s Offices around the country. A recent case against a Philadelphia-area cardiologist provides a classic example of how improper opioid prescribing practices can lead to criminal prosecution, civil penalties AND severe administrative sanctions (in this case, exclusion from participation in Federal health care programs). The article examines how the cardiologists was identified and steps you should take to reduce your level of risk in this regard.

I. Background of the Case:

Like many big cities, Philadelphia has a problem with illegal drugs. Despite the city’s efforts to curb illicit drug use, unintentional drug overdoses have steadily grown since 2010 and have only slightly tapered-off from their all-time high since 2017.[1]

^{Are you unsure your screening requirements depending on your business and location?}^{Our FREE Consultation has you covered. It includes: An overview of exclusions in addition to an}^{overview of your specific requirements and obligations. Furthermore a demonstration of our product and service (SAFER) will be performed prior to a presentation of your personalized solutions. This consultation is a free of charge consultation for your benefit only!}

While the percentage of opioid-related deaths changes from quarter to quarter, it is estimated that approximately 80% of all unintentional drug deaths in Philadelphia are due to opioid misuse and overdose. In response to the opioid abuse crisis in Philadelphia and other areas of the country, a multi-agency team of Federal and State investigators and prosecutors, known as the Medicare Fraud Strike Force[2] (Philadelphia Strike Force) has been targeting physicians, nurse practitioners and other medical professionals who have been improperly prescribing and / or distributing opioids. In this particular case, the prescribing practices of this Philadelphia cardiologist (defendant) were identified by the Philadelphia Strike Force as warranting further review. Upon investigation, the government alleged that from 2016 to 2018, the defendant wrote a number of prescriptions for oxycodone and / or benzodiazepine to patients without a legitimate medical purpose.

In light of the allegations presented, the U.S. Attorney’s Office pursued both civil and criminal claims against the cardiologist. It is important to keep in mind that the Department of Justice has long instructed its prosecutors to pursue parallel criminal and civil actions against a defendant, when appropriate. As Title 9, Section 27 of the Justice Manual[3] provides:

“Department policy is that criminal prosecutors and civil trial counsel should timely communicate, coordinate, and cooperate with one another and agency attorneys to the fullest extent appropriate to the case and permissible by law, whenever an alleged offense or violation of federal law gives rise to the potential for criminal, civil, regulatory, and/or agency administrative parallel (simultaneous or successive) proceedings. By working together in this way, the Department can better protect the government’s interests (including deterrence of future misconduct and restoration of program integrity) and secure the full range of the government’s remedies (including incarceration, fines, penalties, damages, restitution to victims, asset seizure, civil and criminal forfeiture, and exclusion and debarment).” (emphasis added).

The Justice Manual guidance further notes that:

“Courts have recognized that “[t]here is nothing improper about the government undertaking simultaneous criminal and civil investigations“ provided that we use those proceedings and associated investigative tools for their proper purposes and in appropriate ways.” (emphasis added).

II. Criminal Prosecution for Violations of 21 USC §841(a)(1) and (b)(1)(C):

In March 2019, the defendant pleaded guilty to eight felony counts of the unlawful distribution and dispensing of a controlled substance, in violation of 21 USC §841(a)(1) and (b)(1)(C). The defendant’s sentencing is scheduled to take place later this year. As a result of the criminal conviction, the defendant may be sentenced to prison for a significant period of time AND assessed criminal fines for his unlawful conduct.

III. Civil Liability under the False Claims Act, 31 USC §3729:

Notably, it does not appear that the defendant entered into a “global” settlement at the time he decided to plead guilty to the criminal charges discussed above. As a result, any civil and / or administrative actions that the government might choose to pursue remained active. On July 1, 2019, the defendant agreed to enter into a False Claims Act settlement with the government and pay $107,584 in penalties and damages to the government.

IV. Administrative Actions Taken Against the Defendant:

As part of his civil settlement reached with the government, the defendant cardiologist agreed to:

Surrender his medical license and Drug Enforcement Administration Certificate of Registration and further agreed not to seek to renew or reinstate either one in the future.
Be excluded from participation in Federal Health programs.

As HHS-OIG’s records reflects, the defendant was excluded from participation in Federal health care programs on July 18, 2019. The basis for exclusion cited by the government is Section 1128(b)(6) of the Social Security Act – Quality of Care.

As you will recall, under Section 1128 of the Social Security Act, if an individual or entity is convicted of certain crimes, the Department of Health and Human Services (HHS), Office of Inspector General (OIG) is required by law to exclude the individual or entity from participation in Federal health care programs. These types of actions are referred to as “Mandatory Exclusions.” The bases for imposing a mandatory exclusion are set out in Section 1128(a)(1) through Section 1128(c)(3)(G)(ii). In contrast to mandatory exclusion actions, there are also a number of “Permissive Exclusion” authorities that may be used (at the agency’s discretion) by HHS-OIG to bar an individual or entity from participating in Federal health benefit programs. The permissive exclusion authorities that may be exercised by HHS-OIG are covered in the Social Security Act from Section 1128(b)(1)(A) through 1128(b)(16). HSS-OIG may also exercise its permissive exclusion authority under Social Security Section 1156, if a provider fails to meet its obligations to provide medically necessary services that meet the professional recognized standards of care.

In this particular case, HHS-OIG chose to exercise its permissive exclusion authority under Section 1128(b)(6) of the Social Security Act – Quality of Care. This particular basis for excluding an individual or entity can be assessed if a defendant or target is alleged to have submitted:

“Claims for excessive charges, unnecessary services or services which fail to meet professionally recognized standards of health care, or failure of an HMO to furnish medically necessary services.”

Under this statutory provision, an individual or entity can be excluded for a minimum period of one year. In light of the allegations presented, the defendant cardiologist was excluded from participation by HHS-OIG for a total of seven years.[4]

V. Impact of Medicare Exclusion on the Defendant’s Career:

As the case synopsis above reflects, Federal law enforcement prosecuted the defendant in this case to the full extent of their abilities. In addition to facing incarceration, the defendant was also assessed penalties and damages of more than $107,000 under the False Claims Act. While the criminal and civil actions taken against the defendant are quite serious, the cardiologist’s problems are further magnified by the fact that he has also been excluded from participation in Federal health care programs. At the end of the day, it is quite conceivable that the U.S. Sentencing Guidelines, the defendant’s criminal sentence will be relatively brief. Depending upon the terms of his civil / administrative settlement, he may be free to seek licensure in another state upon his release from jail.

VI. Final Thoughts:

Even assuming that the defendant regains licensure in another state, the administrative exclusion action taken against him will effectively bar him from enrolling in Federal health care benefit programs for the entire period that he remains excluded. While excluded, he will not be eligible to work for any provider or supplier who participates in one or more Federal health care plans. Should a health care provider or supplier choose to employ the defendant (an excluded party), each of the claims submitted to Medicare, Medicaid and other government plans may be subject to significant civil monetary penalties.

How can you protect your practice? Consistent with your obligations under the law, it is imperative that you screen your employees, agents, contractors and vendors against all of the 43 exclusion databases currently in operation. Unfortunately, it is practically impossible for a medical practice or other entity to screen one or more of its employees against all 43 databases. Luckily, the folks at Exclusion Screening can take this time-consuming (and often frustrating) task off of your shoulders.

Give us a call at 1 (800) 294-0952 for a complimentary discussion of your screening needs and a quote or fill out the form below!

[1] City of Philadelphia, “Opioid Misuse and Overdose Data.” https://www.phila.gov/programs/combating-the-opioid-epidemic/reports-and-data/opioid-misuse-and-overdose-data/

[2] The government’s Medicare Fraud Strike Force is primarily composed of Federal agents and investigators of the Department of Health and Human Services, Office of Inspector General (HHS-OIG) and the Federal Bureau of Investigation (FBI), along with Federal prosecutors working for U.S. Attorneys Offices around the country. First established in March 2007, the Strike Force has been instrumental in investigating and prosecuting cases of health care fraud, waste and abuse.

[3] https://www.justice.gov/jm/organization-and-functions-manual-27-parallel-proceedings

[4] “Pennsylvania physician Agrees to Voluntary Exclusion” https://oig.hhs.gov/fraud/enforcement/cmp/cmp-ae.asp

Exclusion News

Current States With Separate Exclusion Databases

I. Medicaid Exclusion

Exclusion Screening, LLC conducts monthly checks of our clients’ employees, contractors, and vendors against the OIG-LEIE, GSA-SAM, and all available State Exclusion Lists. Most providers understand that they have an obligation to check their employees, contractors, and vendors against the OIG-LEIE prior to hiring and monthly thereafter. Fewer providers are aware of their obligation to screen their individual state exclusion list, if their state maintains such a list.

CMS directed state Medicaid Directors to remind all providers that they have an obligation to search their state list whenever they search the LEIE.^[1] In addition, many states require providers when they enroll or re-enroll in the Medicaid program to certify that no employee or contractor is excluded from participation in any state. This requirement echoes the Affordable Care Act (ACA) Section 6501, which states that if a provider is excluded in one state, he or she is excluded in all fifty states.^[2]

II. SAFER^TM

Exclusion Screening, LLC’s proprietary database, SAFER (State and Federal Exclusion Registry), imports the most recent exclusion data from each state list constantly. We are also in regular contact with state Medicaid and Program Integrity Offices about their lists.

^{Are you unsure your screening requirements depending on your business and location?}^{Our FREE Consultation has you covered. It includes: An overview of exclusions in addition to an}^{overview of your specific requirements and obligations. Furthermore a demonstration of our product and service (SAFER) will be performed prior to a presentation of your personalized solutions. This consultation is a free of charge consultation for your benefit only!}

^{III. State Exclusion Lists}

The states that currently maintain a separate excluded provider list are the following ones below, click on a state to learn more about its screening requirements:

Alabama	Idaho	Michigan	North Carolina
Alaska	Illinois	Minnesota	North Dakota
Arizona	Indiana	Mississippi	Ohio
Arkansas	Iowa	Missouri	Pennsylvania
California	Kansas	Montana	South Carolina
Colorado	Kentucky	Nebraska	Tennessee
Connecticut	Louisiana	Nevada	Texas
Florida	Maine	New Hampshire	Vermont
Georgia	Maryland	New Jersey	Washington	West Virginia
Hawaii	Massachusetts	New York	Washington DC	Wyoming

Exclusion Screening, LLC is proud to offer those interested in trying our product and service a no cost, no obligation TRIAL Period. Our trial is multi-faceted and is aimed to expose the client to as much of our service and product as possible in a short time. The trial starts with a FREE consultation/training that will present an overview of exclusions, a demonstration of our product and service, and a presentation of a personalized solution. The client will also receive access to our SAFER Exclusion Screening system for 14 days in addition to a sample report of up to 20 names.

IV. Some States Require Screening Extraneous Lists

In addition to these states’ excluded provider lists, many states also require providers to check other various Medicaid Exclusion databases. In Ohio, for example, providers must search the Ohio Department of Developmental Disabilities Abuser Registry, the Ohio Auditor of State – Finding for Recovery Database, Ohio Department of Developmental Disabilities Abuser Registry, Social Security Administration’s Death Master File, The National Plan and Provider Enumeration System, in addition to the LEIE, SAM, and Ohio Exclusion List.^[3] New Jersey providers must check the LEIE, New Jersey Division of Consumer Affairs licensure databases, New Jersey Department of Health and Senior Services licensure database, and the certified nurse aide and personal care assistant registry on a monthly basis.^[4]For additional information visit “OIG Exclusion and State Exclusion Lists: Which Exclusion Lists Need to Be Screened? What Is the Difference Between Them?”

V. A Simple and Affordable Solution

Without a doubt, state and federal exclusion screening requirements are incredibly burdensome for most providers. If screening your employees against each federal and state list that your state requires is not cost effective for your office to do in-house, contact Exclusion Screening, LLC today at 1-800-294-0952 or fill out our online service form found below. We would be happy to discuss your specific state obligations, provide a cost assessment, and help you create your employee and vendor list.

Did you find this article interesting and/or helpful? Are you interested in hearing more insights, exclusion news, and updates about upcoming webinars and promotions? If so, please take the time to Subscribe to Our Newsletter. We will not share, sell, or distribute your information in anyway under any circumstances. The information provided will be used to send you Newsletter’s as you have requested.

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

[1] See Letter from Centers for Medicare and Medicaid Services (CMS) to State Medicaid Directors 5 (Jan. 16, 2009).

[2] See 42 U.S.C. § 1396a(a)(39) (2012), available at http://www.gpo.gov/fdsys/pkg/PLAW-111publ148/pdf/PLAW-111publ148.pdf (codifying the termination requirements of ACA § 6501); see also Letter from Centers for Medicare and Medicaid Services (CMS), CPI-CMS Informational Bulletin, Affordable Care Act Program Integrity Provisions – Guidance to States — Section 6501 – Termination of Provider Participation under Medicaid if Terminated under Medicare or other State Plan (Jan. 20, 2012), available at http://downloads.cms.gov/cmsgov/archived-downloads/CMCSBulletins/downloads/6501-Term.pdf.

[3] See Ohio Admin. Code § 5160-1-17.8(c)(ii); Ohio Medicaid Provider Exclusion and Suspension List, Ohio Dep’t of Medicaid, http://medicaid.ohio.gov/PROVIDERS/EnrollmentandSupport/ProviderExclusionandSuspensionList.aspx (last accessed Jan. 22, 2015).

[4] Newsletter to All Providers, from the New Jersey Dep’t of Human Servs., et al., Excluded, Unlicensed or Uncertified Individuals or Entities (Oct. 2010).

In-Depth Articles

What to Know About the New CMS Preclusion List

By: Cason Liles

(February 12, 2019) Beginning April 1, 2019, CMS’s new Preclusion List will go into effect subsequently barring many healthcare professionals from receiving payment for Medicare Advantage (MA) items and services or Part D drugs furnished or prescribed to Medicare beneficiaries. But what is the Preclusion List? Who is on it? Why was created? Don’t worry, we’re going to break down everything you need to know about this new CMS action and how it can affect your organization.

I. What is the Preclusion List?

The Preclusion List is a list generated by CMS that contains the names of prescribers, individuals, and or entities that are unable to receive payment for Medicare Advantage (MA) items and service and or Part D drugs prescribed or provided to Medicare beneficiaries.

II. How Does Someone End up on The Preclusion List?

CMS has given two ways for which someone can end up on the Preclusion List. The first one way is if you:

“Are currently revoked from Medicare, are under an active reenrollment bar, and CMS has determined that the underlying conduct that led to the revocation is detrimental to the best interests of the Medicare program”

However, even if you are not revoked from Medicare, you still may find yourself on the Preclusion List. CMS is also precluding anyone that has:

“… Engaged in behavior for which CMS could have revoked the prescriber, individual or entity to the extent applicable if they had been enrolled in Medicare, and CMS determines that the underlying conduct that would have led to the revocation is detrimental to the best interests of the Medicare program. Such conduct includes, but are not limited to, felony convictions AND Office of Inspector General (OIG) exclusions.”

III. Why was the Preclusion List Created?

In April of 2018, within the Federal Register Rules and Regulations update, the Department of Health and Human Services released information on policy changes to Medicare programs. In which, they discussed the Preclusion List and their reasoning for establishing the new rule. It seems that CMS has given a few reasons for putting this new rule into effect:

“To focus on preventing payment for Part D drugs prescribed by demonstrably problematic prescribers”
“Reduce the burden on Part D prescribers and Medicare Advantage providers without compromising our program integrity efforts.” And to
“To replace the Medicare Advantage (MA) and prescriber enrollment requirements.”

By doing this, CMS believes that it will save $34.4 million dollars in 2019. These savings would be derived from the removal of the requirements for Part D prescribers and Medicare Advantage providers and suppliers to enroll in Medicare prior to providing health care services and items.

IV. How do I Know if I am Precluded?

Unlike the Office of Inspector General’s (OIG) monthly exclusion list, the Preclusion list will not be shared publicly. Precluded providers however will receive notice in a variety of ways. First, CMS will issue an initial email notification to the precluded providers using their email addressed which they provided to either the Provider Enrollment, Chain and Ownership System (PECOS), the National Provider Plan and Enumeration System (NPPES), or from the Medicare enrollment system of record. The Medicare Administrative Contractor (MAC) will also follow up by sending a written notice through the mail to the precluded provider before they are added to the Preclusion List. Within this letter you will also be informed on why exactly you are precluded, the date that your preclusion will go into effect, and your applicable appeal rights.

V. Are Dentists at Risk of Being Precluded?

YES. If a dentist has been revoked from Medicare, is under an active re-enrollment bar, and CMS has found that the actions that led to their original revocation is a risk to the integrity of the Medicare program or has engaged in behavior for which CMS could have excluded them from participating in Medicare if they had enrolled.

VI. When will the Preclusion List go into Effect?

The first list of providers that were to be precluded were published and were sent notice on January 1, 2019. However, beginning April 1, 2019 Part D sponsors will become required to reject any prescriptions for Medicare Part D drugs that are prescribed by an individual or entity that is on the Preclusion List. Medicare Advantage (MA) plans will also become required to deny payments for any healthcare service or item that was provided by and individual or entity that is on the Preclusion List.

VII. Is This the Same as the OIG’s Exclusion List?

The OIG Exclusion List is NOT the same as this new CMS List. That being said, there is some overlap. If you have been excluded, you can still find yourself on the Preclusion List if you fall into the either of the two criteria listed above under the “How Does Someone End up on The Preclusion List? ” section. As you can see in the diagram below, there is some overlap, but not much.

VIII. How can I Screen for Precluded Individuals or Entities?

Unfortunately, access to the Preclusion List is Extremely Restricted. However, under certain circumstances, we here at Exclusion Screening, LLC can provide guidance and help. Contact us info@exclusionscreening.com, give us a call at (800)-294-0952, or fill out the form below for a free consultation and quote.

In-Depth Articles

A Review of OIG Enforcement Actions in Fiscal Year 2018

By Cason Liles

(February 6, 2019): The Department of Health and Human Services (HHS), Office of Inspector General (OIG) is an independent, objective law enforcement and investigative agency that is responsible for protecting the financial integrity of the more than 300 programs that are administered by HHS. Collectively, these programs represent approximately 24% of the Federal budget. Although OIG is responsible for investigating allegations of fraud, waste and abuse related to literally hundreds of HHS programs, most of OIG’s investigative and enforcement activities arise out the Medicare and Medicaid programs. Simply put, OIG’s mission is fighting fraud, waste and abuse. In the pursuit of this mission, OIG aggressively investigates allegations of wrongdoing to identify and recover improper payments made to health care providers, suppliers and other parties who have engaged in fraudulent, wasteful or abusive conduct. One of the key tools used by OIG to protect patients and safeguard the financial integrity of the Medicare and Medicaid programs is its authority to exclude individuals and entities from participation in Medicare, Medicare and other Federal health care benefit programs. This article examines a number of the exclusion-related enforcement actions taken by the OIG in Fiscal Year (FY) 2018.

I. An Overview of FY 2018 Exclusion Actions:

At the outset, it is important to keep in mind that “exclusion” actions aren’t new. They were first mandated in 1977 as part of the “Medicare-Medicaid Anti-Fraud and Abuse Amendments,” Public Law 95-142. The responsibility for imposing mandatory and permissive exclusion actions rests with OIG. As in prior years, OIG aggressively exercised its exclusion authorities in FY 2018 and excluded 2,712 individuals and entities from participating in Federal health care benefit programs. A number of the more noteworthy exclusion actions taken in FY 2018 are outlined below:

II. Noteworthy Civil Monetary Penalty and Affirmative Exclusion Actions Taken by OIG in FY 2018:

Oklahoma. (January 2018). Assisted Living Facility Settles Case Involving Excluded Individual. In this case, an Oklahoma assisted living facility (ALF) improperly employed an excluded individual who was hired to work as an “Admissions Specialist.” As a result of the organization’s wrongful employment of this excluded individual (likely caused by a failure to properly screen all of its staff), the ALF may have faced significant civil monetary penalties (CMPs). Ultimately, the ALF entered into a settlement agreement with OIG and agreed to pay more than $96,000. This case illustrates the importance of screening ALLemployees, not merely direct patient caregivers such as physicians, nurses, medical assistants and other licensed health care professionals.

Oklahoma. (February 2018). Management Company Settles Case Involving Excluded Individual. An organization that owns and manages a skilled nursing facility in Oklahoma City, Oklahoma, was alleged to have hired a licensed practical nurse (LPN) who was excluded from participating in any Federal health care program. An OIG investigation found that this individual had provided items or services that were reimbursed by Federal health care programs. This resulted in the skilled nursing facility entering into a settlement agreement with OIG and agreed to pay more than $140,000 to the government.

New Jersey. (March 2018). Pharmacy and Owner Settle Case Involving Excluded Individual. In this New Jersey case, a pharmacy and its owner were alleged to have employed a pharmacist who was excluded from participating in Federal health care benefit programs. Upon investigation it was found that this excluded pharmacist had provided items or services to patients that were reimbursed by Federal health care programs. The pharmacy entered into a settlement agreement with OIG and agreed to pay more than $300,000 to the government.

Pennsylvania. (March 2018). Physician Agrees to Voluntary Exclusion. In this case, a Pennsylvania physician accepted an exclusion from participation in all Federal health care programs for 10 yearsunder 42 U.S.C. § 1320a-7(b)(6)(B).[1]OIG alleged that the physician had issued opioid prescriptions to patients that were in excess of their needs and fell substantially short of the professionally recognized standards of care. This cause illustrates just how serious the OIG currently is when dealing with these opioid-related issues.

New Jersey. (September 2018). New Jersey Health Center Pays Penalties for Improperly Employing an Excluded Individual. In this New Jersey case, a community health center was alleged to have improperly employed a physician who was excluded from participation in Federal health care benefit programs. Notably, the excluded physician was found to be working in quality assurance and risk management. Additionally, the excluded physician had provided items and services that were ultimately billed to Federal health care programs. As a result of this wrongful hire, the community health center entered into a settlement agreement with OIG that required the organization to pay more than $98,000.

Illinois. (September 2018). Psychologist Agrees to 20-Year Exclusion. In this Illinois case, a licensed psychologist was alleged to have billed for psychological services that were either: (1) not provided as claimed; (2) false or fraudulent because the dates of service billed were times when either the patient was hospitalized, OR the psychologist was travelling out of the state. Based on the allegations, the psychologist agreed to be excluded from participation in all Federal health care programs for a period of 20 years under 42 U.S.C. § 1320a-7(b)(7).[2]

Tennessee. (September 2018). Advanced Practice Nurse (APRN) Agrees to 10-Year Exclusion.In this Tennessee case, an advanced practice nurse (APRN) agreed to be excluded from participation in Federal health care benefit programs for 10 yearsunder 42 U.S.C. § 1320a-7(b)(6)(B) and42 U.S.C. § 1320a-7(b)(6).[3] Importantly, this particular exclusion action was imposed due the APRN’s inappropriate opioid prescribing practices. It is also worth noting that the OIG further alleged that the APRN prescribed controlled substances without appropriately documenting: (1) A clear objective finding of a chronic pain source to justify the ongoing and increasing prescribing; (2) Attempts to identify the etiology of reported pain; (3) A thorough history or adequately inquiring into potential substance abuse history; or (4) A written treatment plan with regard to the use of the prescriptions. If OIG audits your controlled substance prescribing practices, the agency will be looking for each of these items in the record.

III. Noteworthy Exclusion Self-Disclosures Reported to OIG in 2018:

Hawaii. (January 2018). General Hospital Self-Discloses Employment of Excluded Individual. After voluntarily self-disclosing the employment of an excluded individual, a Hawaii based hospital agreed to pay $100,000 for accusations of violating the Civil Monetary Penalties Law. OIG alleged that the hospital knew or should have known that the individual had been excluded from participation as a provider in Federal health care benefit programs.

Rhode Island. (March 2018). Nursing Home Self-Discloses Employment of Excluded Individual. A nursing home in Rhode Island learned that it had improperly employed an individual who was excluded from participation in Federal health care benefit programs. After subsequently choosing self-disclosing of this employment to OIG, the nursing and rehabilitation center agreed to pay more than $42,000 to resolve violations of the Civil Monetary Penalties Law.

Ohio. (April 2018). Ohio County Health District Self-Discloses the Improper Employment of Excluded Individual. In this Ohio case, a County Health District agreed to pay more than $55,000 for alleged violations of the Civil Monetary Penalties Law. The County Health District voluntarily disclosed that it had improperly employed an individual that it knew or should have known was excluded from participation in Federal health care benefit programs.

Texas. (September 2018). Rehabilitation Center in Texas Self-Discloses Employment of Excluded Individual. In this Texas case, arehabilitation and care center learned that their organization had unwittingly hired an individual that had been excluded from participation in Federal health benefits programs. To their credit, the rehabilitation center self-disclosed the violation directly to OIG. Ultimately, the rehabilitation center was required to pay more than $129,000 in civil monetary penalties to the government in connection with this wrongful employment.

IV. Points to Consider:

As several of the cases above reflect, opioid related audits and investigations are increasingly resulting in OIG exercising its permissive exclusion authority under 42 U.S.C. § 1320a-7(b)(6). It is important to keep in mind that this statutory provision can be applied to practically any situation where a health care provider’s services “fail to meet professionally recognized standards of health care.” Now, more than ever before, it is imperative that health care providers remain up-to-date with respect to the standards of care applicable in their specific field of practice. Additionally, their compliance with applicable standards of care must be fully and accurately documented their actions in the patient’s medical records.

Health care providers and suppliers MUST ensure that they are taking the appropriate steps to ensure that their employees, agents, contractors and vendors have not been excluded from participation in Federal health benefit programs. Based on the OIG’s actions in 2018, we should fully expect for the agency to continue to increasingly focus on exclusion-related administrative actions in 2019.

Is your practice or health care organization meeting its screening obligations? Call the experienced staff at Exclusion Screening for help with your screening needs or fill out the form bolow.

[1]42 U.S.C. § 1320a-7(b)(6)(B) permits the OIG to impose a permissive action if an individual or entity “has furnished or caused to be furnished items or services to patients (whether or not eligible for benefits under subchapter XVIII of this chapter or under a State health care program) substantially in excess of the needs of such patients or of a quality which fails to meet professionally recognized standards of health care.”

[2]42 U.S.C. § 1320a-7(b)(7) is one of the permissive exclusion authorities that may be exercised (at the discretion of OIG). This permissive exclusion authority is used when excluding an individual or entity for “Fraud, kickbacks, and other prohibited activities.”

[3]42 U.S.C. § 1320a-7(b)(6) is another one of the permissive exclusion authorities that may be imposed, at the sole discretion of OIG. This permissive exclusion authority is used when excluding an individual for the wrongful submission of “Claims for excessive charges, unnecessary services or services which fail to meet professionally recognized standards of health care, or failure of an HMO to furnish medically necessary services.”

In-Depth Articles

OIG Exclusion Case Study: The Impact of a False Claims Act Judgment.

(August 23, 2018): In 2008, after learning that a Texas-based laboratory services company was submitting false claims to the Medicare program, a private citizen filed suit, on behalf of the United States, against the laboratory services company under the qui tam provisions of the civil False Claims Act. The qui tam provisions of the False Claims Act (31 U.S.C. §§ 3729 – 3733) allow private parties, commonly referred to as “whistleblowers” or “relators” to sue individuals and entities on behalf of the government if the defendants have “knowingly” submitted false claims to the government for payment.[1] In this case, the United States intervened in the case against the laboratory services company in 2011. In April 2018, the U.S. District Judge hearing the case ruled against the laboratory and its physician owner and awarded the United States $30.5 million for violations of the False Claims Act. Although there are a number of lessons (especially with respect to individual liability) to be learned from the underlying case, the purpose of this article to examine the collateral administrative actions that were taken against the physician owner and the laboratory services company.

I. Parallel Administrative Action — OIG Exclusion Action Overview:

In a letter dated August 21, 2015, the Department of Health and Human Services, Office of Inspector General (OIG) proposed to exclude the laboratory services company, and its owner, from participation in Medicare, Medicaid, and other Federal health programs under 1128(b)(7)[2] of the Social Security Act, for a period of 15 years. The OIG based its proposed exclusion action on the submission of claims from August 2009 to January 2010, that the laboratory and its owner (referred to as Petitioners in the administrative case), “ knew or should have known were not provided as claims and were false or fraudulent.”

[3]

II. Why Did the OIG Exercise its Exclusion Authority Under 1128(b)(7)?

More often than not, when dealing with allegations of the civil False Claims Act, the OIG will choose to exercise its permissive discretion to exclude an individual or entity under Section 1128(b)(7) of the Social Security Act.[4] In this particular case, the OIG did, in fact, exercise its authority to exclude the Petitioners for 15 years.

III. Petitioners’ Appeal of the OIG’s Exclusion Decision:

In response to the proposed OIG exclusion action, in October 2015, the Petitioners filed a timely request for a hearing before an Administrative Law Judge (ALJ). Additionally, due to the unavailability of the ALJ first assigned to hear the case, a different ALJ was appointed to handle the hearing on June 2017. Throughout this period (from late 2015 to early March 2018), both sides actively engaged in discovery and a lively exchange of motions ensued. Finally, in late March 2018, the substitute ALJ assigned to take over the case conducted an in-person hearing on the exclusion action.

IV. Issues Considered by the Administrative Law Judge:

Simply stated, the ALJ hearing the case was required to consider two issues:

ISSUE #1: Did the OIG have a basis to exclude the Petitioners from participating in Medicare, Medicaid and all other federal care programs for 15 years under 42 U.S.C. §1320a-7(b)(7)? As set out under 42 U.S.C. §1320a-7(b)(7), the Secretary may exclude individuals and entities from participation in any federal health care program (as defined in section 1320a-7(b)(f)[5]) if the Secretary determines that individual or entity has committed fraud, kickbacks and / or other prohibited activities.[6]

As the ALJ’s opinion notes, after conducting the administrative hearing in this case, a U.S. District Court with jurisdiction over the parallel civil qui tam case issued a summary judgment decision against the Petitioners, finding the liable for violations of the False Claims Act. Despite the fact that the elements considered by the U.S. District Court were essentially the same as those to be considered by the ALJ when addressing the exclusion action, the ALJ chose not to broadly apply judicial estoppel in this case. This decision appears to have been primarily based on the fact that the time frames considered by the two forums were different. The ALJ also noted that he was charged to conduct a de novo review of the evidence when assessing the exclusion decision by the OIG. The ALJ therefore ruled that it was more appropriate for him to issue a decision based on the merits. Upon consideration of the evidence in this case, the ALJ found that:

(1) Petitioners presented or caused to be presented to an agency of the United States the claims at issue in this case.
(2) The claims Petitioners presented or caused to be presented to Medicare were false.
(3) Petitioners should have known that the claims for services they presented or caused to be presented to Medicare were false.
(4) Petitioners’ equitable defenses do not serve to undermine the OIG’s basis for excluding them.
(5) The statute of limitations is not implicated by discussion of Petitioners’ conduct preceding the six-year timeframe that forms the basis of the proposed exclusion.[7]

In light of these findings, after conducting a de novo review of the evidence, the ALJ found that the OIG did, in fact, have a basis for excluding the Petitioners based solely on the claims they submitted within the six-year statute of limitations.

ISSUE #2: Was the 15-year exclusion period reasonable? Therefore, when deciding whether the period of exclusion imposed by the OIG was “reasonable,” the ALJ assessed the following five criteria outlined under 42 C.F.R. §1001.901(b)(1)-(5): [8]

(1) The nature and circumstances surrounding the actions that are the basis for liability, including the period of time over which the acts occurred, the number of acts, whether there is evidence of a pattern and the amount claimed; As the ALJ noted when reviewing the conduct at issue, during the period of time examined by the U.S. District Court, the Petitioners submitted more than 26,000 claims that resulted in more than $10 million in losses to the government. Even if the ALJ limited his review to the relevant conduct during the six-year period covered during this administrative hearing, the Petitioners still submitted 571 improper claims to Medicare. Additionally, despite the Petitioners’ assertions to the contrary, the ALJ found that the Petitioners’ conduct did, in fact, represent a pattern of improper behavior.

(2) The degree of culpability; When considering the Petitioners’ degree of culpability, the ALJ found that the physician owner and the lab were “highly culpable.” The ALJ further found that the Petitioners were not victims of careless billing by others. Rather, he ruled that the physician owner was closely involved in the lab’s operations and exercised significant control over the organization’s billing staff. As the ALJ wrote: “There is nothing in the record to suggest Petitioners were simply absentee landlords who had no agency concerning their billing scheme. . . “

(3) Whether the individual or entity has a documented history of criminal, civil or administrative wrongdoing (The lack of any prior record is to be considered neutral); Although the recent U.S. District Court ruling against the Petitioners for more than $30 million squarely fits within this regulatory factor, the judgment could not have been considered at the time of the exclusion action by the OIG because it had not been rendered at that time. As a result, there was no prior history of wrongdoing that the OIG could have considered. Having said that, there is nothing in the regulation that limits the OIG’s consideration of improper wrongdoing to only actions that have resulted in a judgment. Therefore, the ALJ held that it was proper for the OIG to consider the Petitioners documented conduct when it assessed the 15-year period of exclusion.

(4) The individual or entity has been the subject of any other adverse action by any Federal, State or local government agency or board, if the adverse action is based on the same set of circumstances that serves as the basis for the imposition of the exclusion; Although the ALJ in this case declined to consider the U.S. District Court ruling as res judicata, the OIG still argued that the ALJ consider the ruling on the False Claims Act constituted an “adverse action.” After considering the positions advanced by the parties, the ALJ held that the requirements set out under 42 C.F.R. §1001.901(b)(4)[9] had not been met, primarily because the ALJ was not persuaded that a ruling by a Federal U.S. District Court could be considered an adverse action by a “agency or board.” Based on this assessment, the ALJ chose not to consider this factor in his analysis of the reasonableness of a “15-year” exclusion.

(5) Other Matters as Justice May Require. Several points were advanced by the Petitioners when addressing this factor. First, Petitioners argued that the Medicare program need no protection from them. Noting that they had improperly billed the Medicare program for millions of dollars, the ALJ concluded that should not be trusted to access program funds. The Petitioners also argued that if they excluded from participation, it would negatively impact patient access to lab care. The ALJ noted that the Petitioners failed to show that there was lack of laboratory facilities in the Houston area. Therefore, Petitioners absence would not negatively impact patients. In fact, the ALJ concluded that the Medicare “will undoubtedly be better off without them.” After considering the evidence, the ALJ found that an exclusion period of 15 years was reasonable in this case. Notably, the ALJ stated that the “circumstances surrounding Petitioners’ billing scheme indicate Petitioners are highly untrustworthy.” The ALJ further found that the mitigating evidence presented by the Petitioners kept the period of exclusion from be much lengthier than the 15-year period of excluded assessed by the OIG.

V. Points Learned from this Exclusion Case:

Point #1. Impact of a False Claims Act Judgment. The administrative collateral risks associated with violations of the False Claims Act cannot be underestimated. In this case, where the False Claims Act violations went to trial and resulted in a judgment, the OIG had no reason to waive its permissive exclusion authority. How could this have been avoided? It is important to keep in mind that the vast majority of cases brought by whistleblowers / relators under the civil False Claims Act are not intervened by the government and result in the dismissal of the case. Of the False Claims Act cases that are intervened, most result in a settlement with the government. When settling a False Claims Act case, defense counsel will often seek to wrap-up any outstanding administrative risks (such as exclusion) as well. In order to waive its permissive exclusion authority, the OIG typically requires that health care providers and entities enter into a Corporate Integrity Agreement (CIA) as part of the settlement. In this case, for whatever reason, the False Claims Act case was not settled and went to trial, resulting in a significant judgment and the imposition of a 15-year exclusion.

Point #2: Issue Preclusion is a Real Possibility. As you will recall, the U.S. District Court in the associated False Claims Act case granted the OIG’s Motion for Summary Judgment. In asserting its arguments in the administrative hearing, the OIG urged the ALJ to narrowly apply estoppel and rely on the District Court’s finding that the claims submitted by the Petitioners were false. The ALJ cited several reasons for not adopting the District Court’s holding in this regard. Nevertheless, it isn’t much of a stretch to imagine a slightly different set of facts, where issue preclusion may have been granted. For instance, if the judgment was final and the time period of the claims at issue were the same, the ALJ may have been persuaded to apply estoppel in this case.

Point #3: ALJs will Give Broad Deference to the OIG When Assessing the Reasonableness of an Exclusion Action. It is important to remember that when making this type of determination, an ALJ is limited to a significant extent and cannot substitute his judgment for that of the OIG. Instead, the ALJ can only consider whether the period of exclusion was within a “reasonable range.”[10] As discussed in the Federal Register more than 25 years ago:

The OIG’s broad discretion is also reflected in the language of § 1001.2007(a)(2), restricting the ALI’s authority to review the length of an exclusion imposed by the OIG. Under that section, the ALI’s authority is limited to reviewing whether the length is unreasonable. So long as the amount of time chosen by the OIG is within a reasonable range, based on demonstrated criteria, the ALI has no authority to change it under this rule. We believe that the deference § 1001.2007(a)(2) grants to the OIG is appropriate, given the OIG’s vast experience in implementing exclusions under these authorities.[11]

VI. Conclusion:

This case illustrates the collateral impact of a False Claims Act judgment on the participation status of a health care provider. While the judgment itself is serious, being excluded from participation in federal health care programs is as serious, if not more serious, than the judgment. As excluded parties, the physician owner and the lab are effectively out of business. Moreover, the physician owner may find it difficult to obtain employment from another provider due to his exclusion status. Unfortunately, there is a very real chance that these actions are merely the proverbial “tip of the iceberg” in terms of what lies ahead for the physician owner and the lab. The exclusion action qualifies as an adverse action and will be reported to the National Practitioner Databank (if it has not already been reported). Additionally, to the extent that the physician owner and the lab are participating providers in any private payor insurance programs, it is very likely that they have an affirmative obligation to notify the plans of both the False Claims Act judgment and the exclusion action (depending on how their participation agreement is worded). This can result in both private payor audits of similar claims and in termination of a provider’s participation in the payor’s plan.

How should you react if faced with a similar situation? Contact your health lawyer and make sure that you are prepared to address the various collateral administrative adverse actions that may flow from a False Claims Act judgment and / or an being excluded from participation in federal health care programs. Considering your options at the initiation of a False Claims Act investigation may help you avoid some of the consequences discussed above.

Need help conducting your monthly required Exclusion Screening? Call us at 1-800-294-0952 or fill out the form below for a free quote and assessment fo your needs.

Robert W. Liles serves as Managing Partner at the health law firm, Liles Parker, Attorneys and Counselors at Law. Liles Parker attorneys represent health care providers and suppliers around the country in connection with UPIC audits, ZPIC audits, OIG investigations and Medicare exclusion actions. Is your practice facing alleged violations of the False Claims Act? We can help. For a free initial consultation regarding your situation, call Robert at: 1 (800) 475-1906.

[1] Under the qui tam provisions of the False Claims Act, whistleblowers can are entitled to receive 15% to 25% of any recovery if the United States intervenes in the case, or 25% to 30% if the government declines to intervene in the case that the whistleblower has brought. Defendants who violate the civil False Claims Act are liable for three times the government’s damages plus significant civil penalties for each false claim that was improperly submitted for payment.

[2] Section 1128(b)(7) of the Social Security Act

[3] ALJ decision, citing Petitioner’s Request for Hearing, Ex. A at 2.

[4] In those cases where the OIG concludes that exclusion is not necessary in order to protect the integrity of the Medicare program, it will typically require that the individual and / or entity enter into a Corporate Integrity Agreement (CIA). The purpose of the CIA is to strengthen the provider’s compliance program and reduce the level of risk to the Medicare program.

[5] Under 42 U.S.C. §1320a-7(b)(f), “Federal health care program” is defined as:

(1) any plan or program that provides health benefits, whether directly, through insurance, or otherwise, which is funded directly, in whole or in part, by the United States Government (other than the health insurance program under Chapter 89 of Title 5); or

(2) any State health care program, as defined in section 1320a-7(h).

[6] The Secretary has delegated the authority to impose an exclusion to the OIG, pursuant to: 42 C.F.R. §1001.901(a).

[7] 42 C.F.R. §1001.901(b)(1)-(5).

[8] An abbreviated set of these five criteria were set out in the OIG’s Final Rule, ”Medicare and State Health Care Programs: Fraud and Abuse; Revisions to the Office of Inspector General’s Civil Monetary Penalty Rule.” See 81 Fed. Reg. 88,334 (Dec. 7, 2016). The full regulatory language of 42 C.F.R. §1001.901(b)(1)-(5) reads as follows:

“(b) Length of exclusion. In determining the length of an exclusion imposed in accordance with this section, the OIG will consider the following factors—

(2) The degree of culpability;

(3) Whether the individual or entity has a documented history of criminal, civil or administrative wrongdoing (The lack of any prior record is to be considered neutral);

(4) The individual or entity has been the subject of any other adverse action by any Federal, State or local government agency or board, if the adverse action is based on the same set of circumstances that serves as the basis for the imposition of the exclusion; or

(5) Other matters as justice may require.”

[9] Under 42 C.F.R. §1001.901(b)(4), an “individual or entity has been the subject of any other adverse action by any Federal, State or local government agency or board, if the adverse action is based on the same set of circumstances that serves as the basis for the imposition of the exclusion.”

[10] Craig Richard Wilder, DAB No. 2416 at 8.

[11] Federal Register Final Rule, “Health Care Programs; Fraud and Abuse; Amendments to OIG Exclusion and CMP Authorities Resulting from Public Law 100-93. 57 Fed. Reg. 3298, 3321 (January 29, 1992).

In-Depth Articles

Health Care Providers Should Consider the Ramifications of “Taking a Plea” in a Criminal Case or Agreeing to a Licensure Action. It May Trigger a Mandatory or Permissive OIG Exclusion Action.

(July 16, 2018): Perhaps the most severe administrative sanction available under the Social Security Act stems from the authority of the Secretary for the Department of Health and Human Services (HHS) to exclude individuals and entities from participating in Federal and State health benefits programs.[1] The Secretary has delegated[2] this authority to the HHS, Office of Inspector General (OIG)[3]. As a recent comprehensive, first-of-its-kind study by ExclusionScreening.com found that during the period 2013 to 2017, approximately 90% of the permissive OIG exclusion actions taken were based on an adverse administrative action taken against a healthcare provider’s license. This article examines a decision issued earlier this year by the HHS Departmental Appeals Board (DAB or Board) where the Board examined a licensure-related exclusion action in considerable detail.

I. Brief Overview of OIG Licensure-Related Exclusion Action:

With the passage of the Medicare-Medicaid Anti-Fraud and Abuse Amendments[4] in 1977, mandatory OIG exclusion became mandated in cases where a physician and other practitioner has been convicted of program-related crimes. (now codified at section 1128 of the Social Security Act). Since that time, various additional bases for both mandatory[5] and permissive[6] exclusion have been enacted. Collectively assessed, the most frequent statutory basis relied on by the OIG when seeking to exclude an individual from participation in Federal and State health care programs is “42 USC §1320a-7(b)(4) License Revocation or Suspension.[7]” As this provision set out:

“Any individual or entity—

(A) whose license to provide health care has been revoked or suspended by any State licensing authority, or who otherwise lost such a license or the right to apply for or renew such a license, for reasons bearing on the individual’s or entity’s professional competence, professional performance, or financial integrity, or

(B) who surrendered such a license while a formal disciplinary proceeding was pending before such an authority and the proceeding concerned the individual’s or entity’s professional competence, professional performance, or financial integrity.”

II. Case Study: DAB ALJ Decision No. CR4985[8]; DAB Appellate Div. Decision #2848.[9]

In this case, a Virginia-licensed Chiropractor pled guilty in 2016 to one count of manufacturing marijuana, a felony. He was sentenced by the Court to 5 years of incarceration (4 years and 11 months suspended) and ordered him to pay a $2,500. Based on this felony conviction, the Virginia Board of Medicine suspended the individual’s license to practice chiropractic indefinitely.[10]

The OIG excluded the individual under 42 USC §1320a-7(b)(4).

The OIG based its exclusion on the indefinite suspension, which links reinstatement to the term of the licensure suspension. The OIG cited 42 USC §1320a-7(b)(4) as its basis for exclusion.

ALJ review of the OIG’s exclusion action.

The Chiropractor (Petitioner) subsequently filed a timely request for review by an Administrative Law Judge (ALJ). Both the OIG and the Petitioner subsequently filed arguments and related documentation in support of their position. Notably, the Petitioner’s submissions included (but were not limited to) a copy of his North Carolina chiropractic license and certificates showing his successful completion of chiropractic training courses. As the ALJ’s decision reflects, after the record had closed, the Petitioner submitted additional documentation, including a letter attesting to his competence and a copy of his active North Carolina chiropractic license. The ALJ refused to admit the additional materials into record based on the fact that were not submitted in a timely fashion and were irrelevant.

Further complicating the case was the fact while the matter was pending before the ALJ, the OIG issued a second exclusion notice, advising the Petitioner that pursuant to section 1128(a)(4) of the Social Security Act (as codified at 42 USC §1320a-7(a)(4)), he was being mandatorily excluded from program participation for five years. As set out under 42 USC §1320a-7(a) Mandatory exclusion

“The Secretary shall exclude the following individuals and entities from participation in any Federal health care program (as defined in section 1320a-7b(f) of this title). . . ”

Since this mandatory exclusion action was based on the Petitioner’s felony conviction of a criminal offense related to the manufacture, distribution, prescription, or dispensing of a controlled substance, it fell under the following exclusion provision:

“(4) Felony conviction relating to controlled substances:

Any individual or entity that has been convicted for an offense which occurred after August 21, 1996, under Federal or State law, of a criminal offense consisting of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.”

Notably the Petitioner does not appear to have appealed the five-year exclusion action.

Upon consideration of the facts and the evidence, the ALJ sustained the OIG’s decision to exclude the Petitioner from participating in Medicare, Medicaid, and other federal health care programs.

Appellate review of the ALJ’s decision.

The Petitioner appealed the ALJ’s decision sustaining the OIG’s decision to exclude him from participation in Medicare, Medicaid and all Federal health care programs. As the ALJ’s ruling reflects, the Petitioner was to be excluded as least until he regained his Virginia chiropractic license. On appeal, the Petitioner raised several issues that were addressed by the Appellate Board:

Petitioner Issue #1: First, the Petitioner argued that the time frame for exclusion was not adequately addressed by the judge. The Petitioner further stated that he “did not agree with the length of exclusion because it was excessive and unjust.”

Board Response to #1: As the Board noted in its appellate ruling, in situations where the OIG has excluded an individual’s health care license is revoked or suspended for reasons bearing on the individual’s professional competence, professional performance or financial integrity, the Social Security Act does not delegate an ALJ the discretion to set the length of the exclusion for less than the period during which the individual’s license is suspended. (See, Social Security Act Act § 1128(c)(3)(E); 42 C.F.R. § 1001.501(b)).

Petitioner Issue #2: Petitioner argued that the ALJ failed to consider letters from patients and colleagues attesting to the Petitioner’s professional competence and good character in support of a reduction in the length of Petitioner’s exclusion.

Board Response to #2: As the Board noted in its decision, neither it nor the ALJ has the authority to consider the letters from the Petitioner’s patients and colleagues attesting to his professional competence and good character for the purpose of reducing the length of Petitioner’s exclusion. Simply put, equitable arguments and evidence submitted in an effort to obtain a reduction in the length of exclusion cannot be considered.

Petitioner Issue #3: The Petitioner’s appeal also raised the imposition of a second and separate OIG five-year exclusion action (based on 1128(a)(4) of the Social Security Act; 42 USC §1320a-7(a)) that was imposed while the Petitioner’s appeal was pending before the ALJ. In the Board proceeding, the Petitioner argued that he was “appealing the five-year exclusion because it is excessive and unreasonable in [his] case.” He further stated that he was “requesting that [his] exclusion remain as originally reported: three years or until I regain my Virginia license because that would support my position for Inclusion.”

Board Response to #3: As the Board noted in its decision, the Petitioner only appealed the initial permissive exclusion action under 1128(b)(4), 42 USC §1320a-7(b)(4). There was no evidence that the Petitioner had requested an ALJ hearing to contest the OIG’s second exclusion action brought under 1128(a)(4) of the Social Security Act; 42 USC §1320a-7(a). As a result, the Board could not consider the second exclusion action.

Lessons to be learned from this case.

Both the ALJ and Board decisions in this case really highlight the lack of discretion that these adjudicators have when it comes to “adjusting” or “reducing” a health care provider’s length of exclusion for less than the period during which the individual’s license is suspended. As the case noted, the Petitioner was also licensed in North Carolina, and presumably there were no restrictions on his North Carolina.[11] Unfortunately, the fact that the Petitioner was fully licensed in North Carolina was irrelevant to the decisions of both the ALJ and the Board. As 42 C.F.R. § 1001.501(b) expressly provides:

“(b)Length of exclusion.

(1) Except as provided in paragraph (b)(2) of this section, an exclusion imposed in accordance with this section will not be for a period of time less than the period during which an individual’s or entity’s license is revoked, suspended, or otherwise not in effect as a result of, or in connection with, a State licensing agency action.” (Emphasis Added).

So, what should a health care provider do if he or she receives notice that the OIG is seeking to exclude him or her based on a licensure suspension action? It is important to keep in mind that a licensure-based exclusion action is a permissive action that may or may not be pursued by the OIG. To the extent that there is any chance to convince the OIG that the agency should decline to exercise it permissive exclusion authority, now is the time for your legal counsel to make its pitch.

Once the OIG has formally exercised its permissive exclusion authority, the restrictions set forth under 42 C.F.R. § 1001.501(b) must be applied. Neither an ALJ nor the Board has the discretion to deviate from the time period requirements imposed by statute. Although the OIG rarely waives its discretion to pursue a permissive licensure-based exclusion action, providers should.

This case also serves as a stark reminder that neither an ALJ nor the Board is in a position to “weigh” the equities in a licensure-based exclusion case when assessing the length of time imposed for the exclusion. Adjudicators are required by statute to determine whether an exclusion determination made by the OIG was consistent with the law. Equitable arguments and evidence such as those submitted by the Petitioner in this case cannot be considered in a licensure-based exclusion case. An individual cannot have an exclusion lifted until his or her license is reinstated. Period.

In recent years, the number of exclusion actions imposed by the OIG has continued to grow. While there is little or no flexibility with respect to some of the bases for exclusion, every case is based on a unique set of facts, some of which may present opportunities to negotiate a more favorable period of exclusion with OIG, or even avoid exclusion all together.

We strongly recommend that you contact experienced health law counsel at the first sign that you may be excluded from participation in Federal and State health care programs. In terms of strategy, a health care provider’s best course of action is to engage experienced health law counsel at the earliest opportunity, preferably before an adverse action has been taken against your professional license. A comprehensive response strategy is essential so that you minimize the adverse collateral effects of an adverse licensure action. The attorneys at Liles Parker have extensive experience representing health care providers in exclusion-related proceedings.

Need help with your required monthly Exclusion Screening verification? Call us at 1-800-294-0952 or fill out the form below for more information and a free consultation and assessment of your needs!

Robert W. Liles serves as Managing Partner at the health law firm, Liles Parker, Attorneys and Counselors at Law. Liles Parker attorneys represent health care providers and suppliers around the country in connection with UPIC audits, OIG exclusion actions and state licensure board disciplinary proceedings. Has an exclusion action been proposed against your license? We can help. For a free initial consultation regarding your situation, call Robert at: 1 (800) 475-1906.

[1] The term “Federal health care programs” is defined under Section 1128B(f) of the Social Security Act as:

(2) any State health care program, as defined in section 1128(h).

42 U.S.C. § 1320a-7b(f) (2012).

[2]See Updated: Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs, U.S. Dep’t of Health & Human Servs.: Office of Inspector Gen., at 2-3 (May 8, 2013) (stating that ““. . . the Secretary has delegated authority to OIG to exclude from participation in Medicare, Medicaid, and other Federal health care programs persons that have engaged in fraud or abuse and to impose civil money penalties (CMPs) for certain misconduct related to Federal health care programs”).

[3] The OIG maintains a website containing up-to-date information on federal health care program exclusion rules, which can be found at http://oig.hhs.gov/fraud/exclusions.asp.

[4] While Public Law 95-142’s “exclusion” provisions are important, the legislation is best known for its impact on the Federal Anti-Kickback Statute. More specifically, the legislation made violations of the Federal Anti-Kickback Statute a felony. It also made those who offered remuneration for referrals and those who received them, subject to various penalties.

[5] Under the government’s mandatory exclusion authority (as set out under Section 1128(a) of the Social Security Act), any individual or entity convicted of certain offenses must be excluded from participation in federal health care programs. The length of a mandatory exclusion action taken can last a minimum of five years.

[6] Depending on the circumstances, OIG may also exercise “permissive” or discretionary authority to exclude an entity or an individual from participation in federal health care programs.

[7] Under 42 USC §1320a-7(b)(4), any individual or entity whose professional license to provide health care has been revoked or suspended, or has lost the right to apply for a license, CAN be excluded from participation, at OIG’s options.

[8] DAB ALJ Decision No. CR4985, dated December 13, 2017.

[9] DAB Appellate Div. Decision No. 2848, dated February 6, 2018.

[10] Under the Virginia Code, the Board of Medicine may suspend a license indefinitely for “acts of unprofessional conduct,” which include “knowingly and willfully” committing a felony; violating any statute or regulation relating to the manufacture, distribution, dispensing, or administration of drugs; and conviction of a felony. See Virginia Code §§ 54.1-2915(A)(10), (17), and (20).

[11] This is an interesting point raised by the Petitioner. In some states, the revocation of a professional license is permanent and can only be reinstated upon the submission of a new application. Even then the state board has the discretion of whether or not to consider the new application. Theoretically, a health care provider could be licensed in 49 states and still be excluded due to a suspension action in the 50^th state.

As an aside, the public record does not address whether North Carolina, like many states, normally imposes reciprocal disciplinary actions based on those taken in other jurisdictions.

Why Should I Screen Against Every State Exclusion List?

CMP Liabilities: Why Are Some Much Higher Than Others?

CMP Liabilities Higher

The easiest answer is that CMPs tend to be lower for entities that self-disclosed the exclusion violation as opposed to entities that were subject to an OIG investigation. “Tend” is the key word here. You’ll notice that the August 5, 2014 case (see “CMP Liabilities Higher” link above) was self-disclosed and has the highest CMP amount listed at $1,983,907.51.

I. CMP Liability Depends on How Many Excluded Individuals Are Hired

Another contributing factor is the number of excluded individuals that the provider employed or contracted with. More individuals means that more claims were likely submitted for payment. Therefore, the government likely paid more money to these providers than providers who only employed or contracted with one excluded person. This is evident in the two exclusion actions which took place on August 5, 2014. The University Hospital employed one excluded individual and owed $10,000 in CMP liabilities, while the laboratory owed nearly $2,000,000 because it knew or should have known that four employees were excluded from participation in the federal health care programs. However, it’s important to note that the March 7, 2014 case which totaled $243,266.31 in CMPs only involved one excluded individual. So what is going on?

II. CMP for Each Item or Service Provided

OIG has discretion to impose CMPs of up to $10,000 for each item or service that the excluded individual provided. Hence, the length of time and the number of items or services provided by the excluded individual directly contribute to the total CMP amount imposed on a provider. The March 7, 2014 case involved a nursing and rehabilitation center, so it is likely that a large majority of the entity’s claims were submitted to the Federal health care programs for payment. Additional information about the excluded individual is not available, but the rules governing CMPs lead us to believe that this individual was employed with the facility for a fairly substantial period of time and provided a large number of items and services that were directly or indirectly billed to the Federal health care programs.

The Federal health care program monies may not be used for activities that violate the law. Therefore, even a self-disclosing entity^[1] will be subject to large CMPs if the excluded individual performed a lot of services that were billed (directly or indirectly) to the Federal health care programs.

III. Our Take-Away

Our take-away from this closer look at CMPs confirms that it is best to identify an individual or entity that is excluded as soon as possible. This is where monthly screening comes in. You might screen your employee or contractor before hiring, but if you continue to let that employee or contractor conduct services that are billed directly or indirectly, you may be responsible for paying that money back. Finding out a person is excluded one month into a relationship with them is much better than learning about the exclusion six months or a year later because the person will not have had an opportunity to perform an extreme amount of services that will get you into hot water.

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] Providers are reminded that OIG may use a lower multiplier for damages in self-disclosure cases, but it is under no obligation to do so. Dep’t of Health and Human Servs. Office of the Inspector Gen., Updated OIG’s Provider Self-Disclosure Protocol, 14 (Apr. 17, 2013).

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