CMP Liabilities: Why Are Some Much Higher Than Others?

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A quick review of the Office of Inspector General’s (OIG) exclusion enforcement actions might make one wonder why the Civil Monetary Penalties (CMPs) for some entities are only $10,000 while others are closer to $2,000,000. We were curious as well, and took a look into the factors that might contribute to the vast differences in money owed.

 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. 

CMP Liabilities

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).

CMS Finds Fault with Exclusion Information Sharing Between States

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CMS
I.  Take It from CMS: If You’re Excluded in One State, You’re Excluded in All States

Section 6401(b)(2) of the Affordable Care Act (ACA) required the Centers for Medicare and Medicaid Services (CMS) to create a national database where State agencies could share and access information about individuals and entities that were terminated from the Medicare, Medicaid, or CHIP programs.[1] This platform would help states comply with ACA section 6501,[2] which mandates that a provider must be terminated in all state Medicaid programs if he or she were terminated “for cause”[3] in one state. CMS created the Medicaid and Children’s Health Insurance Program State Information Sharing System (MCSIS) to make this exclusion information available to all State Medicaid agencies.[4]

  Under section 6401(b)(2), states were asked to submit the terminated provider’s name, National Provider Identifier (NPI), and other identifying information to MCSIS. This information was incorporated into MCSIS so that other states could identify providers that needed to be terminated. Even though CMS has the authority[5] to require states to submit this information, it has only asked states to comply. CMS’ failure to make reporting mandatory resulted in a very deficient database.

II.  CMS’ Comprehensive List…Not So Comprehensive

  Only thirty-three states[6] submitted information to CMS and many of the records were incomplete. For example, CMS asked states to only submit providers that were terminated “for cause,” but over 2,000 records lacked a “for cause” termination.[7] In addition, 59 percent of the records also did not include provider NPIs,[8] which the ACA specified as a mandatory database component.[9] Many other data fields, like provider type[10] and address, were blank.

  Seventeen states[11] and the District of Columbia failed to submit any data in the two years between MCSIS’s creation and the Office of the Inspector General’s (OIG) review.[12] Four states[13] submitted 72 percent, or 3,413 of 4,713 total Medicaid records.[14] The other states that reported information reported very small numbers. For example, Massachusetts only submitted two excluded providers between 2011 and 2013.[15] Even though, it excluded fifteen providers in 2012.[16]

 OIG concluded that CMS needed to improve its exclusion information-sharing process.[17] Specifically, CMS should mandate that state agencies report all “for cause” terminations.[18] OIG also stated that CMS should also remove all providers that were not terminated “for cause,” or if it would like to expand its database, then it must issue new guidance instructing the states as to which providers must be terminated under section 6501.[19]

III.  CMS Creates New List: OnePI Portal

  CMS agreed with OIG, and disclosed that it is in the process of creating a private database, the OnePI portal.[20] OnePI is accessible to only CMS, State Medicaid agencies, and CHIP. It provides a private platform for states to share information about terminated providers.

 Under this new system, CMS will require states to submit a copy of the termination letter sent to the provider. Then, CMS will review these letters to ensure that the provider should be included in the OnePI database.[21]

 CMS has not provided a proposed completion date for OnePI.[22] Furthermore, there is no information available in regard to whether this data will be incorporated into the LEIE, if it will be available to providers, or if states will be required to integrate excluded providers from other states into their Medicaid termination lists.

IV. Conclusion

This inaccurate reporting of data illustrates why it is critical to check all state Medicaid lists in addition to OIG-LEIE and GSA-SAM. You will be held responsible if you employ or contract with an excluded individual. A provider that is excluded in one state is excluded in all states. 

CMS

Ashley Hudson, Associate Attorney at Liles Parker, LLP and former Chief Operating Officer for Exclusion Screening, LLC, is the author of this article. Contact the exclusion experts at Exclusion Screening, LLCSM today for a free consultation by calling 1-800-294-0952 or online.

[1] Dep’t of Health and Human Servs. Office of the Inspector Gen., CMS’s Process for Sharing Information about Terminated Providers Needs Improvement, 1–2 (Mar. 2014).

[2] 42 C.F.R. § 455.416(c).

[3] States are only required to terminate providers from their Medicaid programs if they were terminated “for cause” under another state program. “For cause” means a provider was terminated due to fraud, integrity or quality.  Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 2.

[4] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 1.

[5] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 13.

[6] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 7.

[7] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 7.

[8] Not all providers are assigned NPIs. Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 4, 9.

[9] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 2.

[10] Thirty-three percent of MCSIS records did not contain information about the provider type. Furthermore, some states identified 95 percent of providers as “other” when 25 different specific provider types were provided in a drop-down menu. See Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 11.

[11] The seventeen states were: Colorado, Hawaii, Kentucky, Minnesota, Montana, New Hampshire, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, South Carolina, South Dakota, Texas, Utah, West Virginia, and Wyoming. See Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 16.

[12] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 7.

[13] California, New York, Pennsylvania, and Illinois. See Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 7.

[14] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 7.

[15] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 16.

[16] Massachusetts Health and Human Services, Suspended/Excluded MassHealth Providers as of 5/31/2014, 2, http://www.mass.gov/eohhs/docs/masshealth/provlibrary/suspended-excluded-masshealth-providers.pdf (last accessed June 6, 2014).

[17] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 13.

[18] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 13.

[19] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 14.

[20] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 22.

[21] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 22.

[22] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 22–23.