California Exclusion List Screening Requirements

California Exclusion Screening Requirements

What are the California Exclusion List Screening requirements?  The Medi-Cal Program will not pay for any item or service furnished directly or indirectly by individuals or entities that have been excluded or suspended from the Medi-Cal Program or that have been placed on the Office of Inspector General’s Exclusion List.  This results in a broad “suspension” for any providers that have found themselves on this list which is enforced by the California Department of Health Care Services (DHCS). This article will discuss what an exclusion is, how providers wind up on this list, how they are impacted by these regulations and the exclusion screening obligations they impose; the risks of compliance failures; and it will suggest best practices to help providers comply with their obligations and avoid those risks and understand how to screen for exclusions in California.

I. What is a Medicaid Exclusion?

“Exclusions” are final administrative action by a State or Federal agency that bars an individual or entity from participating in one of its benefit programs. When a State forecloses participation in its Medicaid programs, that action is often referred to as a “Medicaid Exclusion.” Similarly, when the Department of Health and Human Services (HHS), Office of Inspector General (OIG) bars participation in Medicare program, that is commonly referred to as a “Medicare Exclusion.”  Medi-Cal Exclusions are posted on database maintained on the website, and Medicare Exclusions are posted on the OIG’s “List of Excluded Individuals and Entities” (LEIE) which is maintained on its website.

II. Who Gets Excluded? Why are Exclusions Imposed?

Medicaid Exclusions in California are imposed by DHCS pursuant to Medi-Cal law, Welfare and Institutions Code (W&I Code), sections 14043.6 and 14123.

 

The primary reasons for the agency to take this action are:

  • Been convicted of a felony;
  • Been convicted of a misdemeanor involving fraud, abuse of the Medi-Cal program or any patient, or otherwise substantially related to the qualifications, functions, or duties of a provider of service;
  • Been suspended from the federal Medicare or Medicaid programs for any reason;
  • Lost or surrendered a license, certificate, or approval to provide health care; or 
  • Breached a contractual agreement with the Department that explicitly specifies inclusion on this list as a consequence of the breach. [i]

Since suspensions/exclusions are designed to protect patients and the programs that serve them, it is not surprising to see that most are based on fraud, adverse license board actions, or exclusions imposed by the OIG. The chart showing the breakdown of current exclusions in California by occupation. As you can see, it is consistent with this focus as Nurses account for almost half of all current exclusions. However, when added to others who receive licenses (physicians, pharmacists, etc.) those with a license account for almost three-fourths of all exclusions in California.California Exclusion List

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.

III.  What is the Effect of a Medicaid Exclusion?

“Exclusions [are] one of the most important tools we have to protect beneficiaries and stem fraud and abuse [and]…ensure that Medicare, Medicaid and other federal health care programs are protected. [W]e need…to help make sure excluded individuals are not involved in any way in the care of… beneficiaries.” Inspector General June Gibbs Brown. [ii]

Medicaid Exclusions imposed by DHCS states that  “Services rendered, prescribed or ordered by a suspended Medi-Cal provider shall not be covered by the Medi-Cal program while the suspension is in effect”. This sanction is commonly referred to as a “Payment Prohibition,” and California Code, Welfare and Institutions Code – WIC § 14123 (d) (1) describes the effect of sanction as follows:

  • The suspension by the director of any provider of service shall preclude the provider from submitting claims for payment, either personally
  • or through claims submitted by any clinic, group, corporation, or other association to the Medi-Cal program for any services or supplies the provider has provided under the program, except for services or supplies provided prior to the suspension.  
  • No clinic, group, corporation, or other association which is a provider of service shall submit claims for payment to the Medi-Cal program for any services
  • or supplies provided by a person within the organization who has been suspended or revoked by the director, except for services or supplies provided prior to the suspension.

 
States also must terminate the participation of any provider that has been listed as an “excluded individual” by the OIG LEIE Database.  The requirement, contained in Section 6501 of the Affordable Care Act, is intended to strengthen Medicaid program integrity by stopping providers excluded in one State from moving to another and providing services there. Thus, stated simply, a Medicaid Exclusion in any state makes an individual radioactive when it comes to providing services in California or in any other State benefit program. 

Are you unsure your screening requirements depending on your business and location? Not 100% confident on how often you need to screen? 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 no charge no obligation consultation for your benefit only!


IV. Provider Exclusion Screening Requirements:

Medicaid Exclusions are only effective if the payment prohibition is enforced and California seeks to achieve this goal largely by imposing extensive “exclusion screening” obligations on its Medicaid providers.  These exclusion screening requirements were outlined in a state wide letter sent by CMS to all State Medicaid Directors (SMDL #09-001) (Exhibit 1) asking States to advise providers of their obligation to:

A. Screen all Employees and Contractors

Within the letter sent by CMS, Medicaid providers were informed that they are obligated to screen all employees and contractors against the Office of the Inspector General’s Federal List of Excluded Individuals/Entities (LEIE) upon enrollment and reenrollment.

While the primary part of the Medicaid Manual does not refer to screening upon hire, there are a large number of programs that operate under the umbrella of the Medicaid Program with manuals of their own that supplement the main Provider Enrollment Manual. The manuals of at least 20 of these “programs within the program” have an appendix that states that require providers screen upon hiring and contracting, and least monthly thereafter, to ensure compliance with Federal regulations at 42 CFR 1001.1901(b) and State Medicaid Director Letter #09-001 from the Centers for Medicare & Medicaid Services (CMS).

B. Continuously Conduct Screens

Additionally, the 2009 CMS Letter asked states to require providers to:

  1. Require providers to comply with exclusion screening obligations as a condition of enrollment;
  2. Screen all employees and contractors against the Office of the Inspector General’s Federal List of Excluded Individuals/Entities (LEIE) monthly to capture any exclusions and reinstatements that have occurred since the last search;
  3. Screen the State list routinely when the provider searches the LEIE. California maintains its own State Excluded Provider List; and
  4. Immediately report to the State any exclusion information discovered.
V.Enforcement:

Excluded individuals and entities may not  “[submit] claims for payment, either personally or through claims submitted by any clinic, group, corporation, or other association to the Medi-Cal program for any services or supplies the provider has provided under the program, except for services or supplies provided prior to the suspension.  No clinic, group, corporation, or other association which is a provider of service shall submit claims for payment to the Medi-Cal program for any services or supplies provided by a person within the organization who has been suspended or revoked by the director, except for services or supplies provided prior to the suspension.”

This limitation includes assessing care, ordering or prescribing services, having a separate entity indirectly submitting claims, and being employed by a third party who then includes those costs in cost reports or some other form of payment. Violations can result in federal civil money penalty or criminal liability under § 1128A and § 1128B of the Social Security Act.

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VI. Best Practices for Complying with the California 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 which providers should consider including in their compliance plans. 

A. Screen all Employees, Contractors, and Vendors.

Medicaid does not pay for services furnished directly or indirectly by an excluded entity. The same rule applies to Medicare, and the payment prohibition is broadly interpreted by federal authorities to include administrators, IT support personnel – even unpaid volunteers – if any of the services they provide contribute to any reimbursements that are received. A basic rule to follow is if the individual has any access to your patients, patient facilities, patient records, or financials, then they NEED to be screened.

 

B. Owner, Officer, Manager and Director Screening.

Owners, Officers, Managers, Directors, and even shareholders MUST be screened. According to California Code WIC § 14123 (a)(2):

“If the provider of service is a clinic, group, corporation, or other association, conviction of any officer, director, or shareholder with a 10 percent or greater interest in that organization, of a crime described in paragraph (1) shall result in the suspension of that organization and the individual convicted if the director believes that suspension would be in the best interest of the Medi-Cal program.”


C. Special Rules for Billers and Coders.

Billers and third-party billing companies receive “special attention” when it comes to exclusion screening. It recognizes that providers may have to delegate their screening obligation to the billing contractor (particularly if it is a large one) and provides guidelines to be followed, however, it makes clear that the provide remains legally responsible for any overpayment liability. The OIG guidelines are found below, and providers should consider adopting some or all of them:

  • Require the biller to have (and produce) a policy of not employing excluded persons
  • Require the biller to screen its employees upon hire and monthly thereafter and maintain documentation of its screening
  • Require the biller to provide training to its employees in connection with the applicable requirements and preparation of the claims they are submitting. (Adopted from Paul Weidenfeld) 

 

D. Screening Should be Done on Hire or Contract Initiation, and Monthly Thereafter.

As previously discussed on pages 2 and 3, providers must screen upon hire and monthly thereafter. This is supported by 42 CFR 1001.1901(b) and State Medicaid Director Letter #09-001 from the Centers for Medicare & Medicaid Services (CMS).


E. Providers Should Hire a Vendor to Fulfill their Exclusion Screening Requirements.

Some providers are able to perform the “basic” screening obligation of checking the Medi-Cal California Exclusion List and the LEIE upon hire and monthly thereafter; but providers that attempt to screen all 40+ State 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); California’s list is currently provided in PDF format and is extremely difficult to search. Each list also 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 need specialized assistance to meet a regulatory obligation. 

There are a number of reputable exclusion screening vendors, but providers should be aware that vendors, and the services they provide, can vary significantly.  Some vendors, for example, assist in investigating whether potential matches are actual matches whereas others may not; there can be differences in the sophistication of their software and the ability to identify “potential matches” when names are similar but not a “perfect match;” and the ease of access can differ.

VIII.  Closing Comments:

The goal of this article was to help providers gain a better understanding of Medicaid Exclusions in California.  Exclusions are imposed on people and entities that pose risks to the Program and its beneficiaries, and that is why California Medicaid will not pay for any item or service furnished by them, whether directly or indirectly.  The article is also intended to help providers gain an understanding of their exclusion screening obligations and how they can fulfill them. 

Need help screening the California exclusion list? Call us at 1-800-294-0952 or fill out the form below to find out how Exclusion Screening can help!.




Article written by Cason Liles.

[i]https://files.medi-cal.ca.gov/pubsdoco/sandilanding.asp

[ii]Press Release announcing the issuance of the OIG’s “Special Advisory Bulletin on the Effects of Exclusion from Federal Health Care Programs, issued September 29, 1999.

 

Exclusion Screening Basics for Providers

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Doctor in Medical Records room. Exclusion Screening Basics

Exclusion Screening Is Mandatory

Providers of medical services that participate in Federal or State Health Care Programs are required to screen all of their employees, vendors, and contractors monthly to ensure that none have been excluded from either the Medicare or Medicaid programs. Practices that fail to meet this requirement risk Civil Monetary Penalties (CMPs) and overpayments because Federal and State regulations prohibit payment for any item or service that was provided, directly or indirectly, by an excluded person.

Enforcement cases involving the employment of excluded persons are increasing dramatically. The imposition of CMPs more than doubled from 2013 to 2014, and recent case investigations have been supported by data analysis projects by the Office of Audit Services and the Office of Evaluation and Inspections. In light of the increasing enforcement efforts and the potential consequences, it is critical that providers gain a basic understanding of the issues relating to Exclusion Screening and how they can be addressed.

What is an Exclusion?

HHS/OIG has the authority (by delegation from the Secretary) to deny persons and entities the ability to participate in federal healthcare programs. When such an action is taken by the OIG, that person or entity is said to be “excluded” and placed on the List of Excluded Individuals and Entities (commonly abbreviated “LEIE”).

Federal exclusions can be either mandatory or permissive, but both have the effect of barring participation in all federal healthcare programs until such time, if ever, that the government agrees to reinstatement. Mandatory exclusions last a minimum of 5 years and generally involve felony convictions for defrauding health care programs, felony drug offenses, and convictions for patient abuse or neglect. Permissive exclusions implicate a wider range of conduct and most often involve misdemeanor health care fraud, misdemeanor drug offenses, and licensing issues.

States also have the authority to exclude individuals and entities from participating in their own programs, such as Medicaid. Currently, 40 states maintain their own exclusion lists that are separate from the OIG’s LEIE. States will generally add OIG Exclusions to their own list, but they are also free to adopt their own exclusion criteria. It is important to note that states also often fail to report their own exclusions to CMS or the OIG such that it is not uncommon for an individual to end up on a state exclusion list and not the LEIE.

Federal and State Regulations Prohibit Payment for any Item or Service Performed by an Excluded Person

Neither Medicare nor Medicaid will pay for any item or service that results in a claim for reimbursement if an excluded individual contributed to it either directly or indirectly.  The so-called “payment prohibition” is broadly interpreted by the OIG. For instance, in it’s May, 2013 “Special Advisory on the Effect of Exclusions,” they expressed the view that the preparation of a surgical tray or the inputting of information by an excluded person or vendor could taint a claim. Even volunteer work by an excluded person could trigger the prohibition unless the volunteer activities were “wholly unrelated to federal health care programs.”

Thus, a practice that hires an excluded person or does business with an excluded vendor or contractor could find that every billable service he or it contributes to is tainted. They would then be liable for a potential overpayment. Most states have also adopted this rationale and apply it to their Medicaid claims.

Don’t Risk Civil Money Penalties, Overpayments and Potential Actions under the False Claims Act

CMPs are often employed by the OIG as an enforcement tool when it discovers that claims have been made for an item or service that was provided, or contributed to, by an excluded employee. CMPs are very difficult to defend since the OIG has interpreted the relevant federal regulations to mean that the entity either “knew” of the exclusion and still submitted the claim, or that the entity “should have known,” but failed to properly screen the employee. Either way, penalties are appropriate, according to the OIG.

It should also be noted that Section 6501 of the Affordable Care Act (ACA) requires “State Medicaid Agencies to terminate the participation of any individual or entity if such individual or entity is terminated under Medicare or any other State Medicaid plan.” As such, any person terminated under any federal or state authority is subject to exclusion by all federal or state authorities. Therefore, claims by them are potentially problematic.

The failure to screen also creates a risk for providers of being sued under the False Claims Act (FCA).  The theory behind FCA claims, which is employed with increasing frequency, asserts simply that since providers know that Medicare will not pay for a claim by an excluded person, a provider that fails to screen has constructive knowledge of the person’s status or is acting in deliberate ignorance.

Federal and State Screening Requirements

Federal screening requirements, as contained in the May, 2013 Special Advisory Bulletin, requires providers to check the LEIE for employees and contractors. According to the Bulletin’s guidance, providers should “review each job category or contractual relationship to determine whether the item or service being provided is directly or indirectly, in whole or in part, payable by a Federal health care program.” Then, providers should “screen everyone that perform[s] under that contract or in that job category” on a regular (read monthly) basis. If only it was that simple.

It is important to remember that the OIG’s guidance addresses only federal concerns. State Medicaid programs also have screening requirements that generally require, at a minimum, that providers screen their own State Exclusion List (37 States have them plus Washington, D.C.) in addition to the LEIE. Many also require screening of the System for Award Management list (SAM), and/or other State specific exclusions lists (such as sex offender lists, elder abuse lists, etc.). Furthermore, it is not uncommon for States to add onerous screening requirements in enrollment or re-enrollment applications and provider agreements. For example, a number of states require a certification that it has no employees that are suspended or excluded from any Federal or State Health Care Program. Some even require certification that their employees have never been excluded or suspended from any Federal or State exclusion list.

The Difficulty in Meeting Federal and State Exclusion Screening Requirements

Despite the OIG suggestions, the ability of individual practices to meet their federal screening requirements is difficult for a provider of any size. The current web-based LEIE interface allows only five employees to be screened at a time, each of which must be entered manually. Subsequently, potential matches must be verified individually by entering their Social Security Number. This might work for a provider who only has to screen a handful of employees or contractors. For a provider with a large number of employees, however, this would be a long and difficult undertaking.

The alternative OIG suggestion is to download the entire LEIE database and compare it to an employee list, but this is equally problematic – if not more so. The LEIE currently contains almost 60,000 names and few providers have the ability to compare that to their own employee database in any reliable or economically viable way.

Even if a provider has the ability to meet the OIG’s screening obligation, State exclusion lists must also be checked and they present additional problems. To start, State lists come in a variety of formats (Word, Excel, or PDF) with different data fields. Indeed, some State lists have little more than a name and an address. Furthermore, many states have additional state-specific screening requirements for lists. Finally, as previously indicated, practices need to be aware that a number of States have enrollment applications and provider agreements that require providers to certify that they have screened all employees and contractors with all federal and state exclusion lists.

Outsourcing is the Solution that makes Sense

In addition to the logistical problems associated with screening federal and state exclusion lists, there are the practical concerns associated with ensuring compliance with a repetitive and difficult task that may be viewed as “unnecessary” by the person tasked with the job. The best solution all around is to find a vendor who will perform the task for you for a reasonable fee. This fee will probably be considerably less than the cost of doing the screening yourself.

A provider’s choice of a company price is an obvious concern, but there are other important factors to consider. For instance, a provider should ask: What is the company’s background in healthcare? Does it have an understanding of exclusion related issues? Does it have a willingness and ability to assist the provider in determining vendor related issues (such as who to screen and vendor certifications)? Will it provide support as needed? Does it have complimentary products such as hotline services that it can provide at little or no cost? 

Conclusion

Exclusion Screening, LLC is one such vendor that is worthy of consideration. It’s co-founders, Robert Liles and Paul Weidenfeld, have both served as National Health Care Fraud Coordinators for the Department of Justice, and for the last several years they have both represented healthcare providers nationwide. They are healthcare lawyers who saw a problem that healthcare providers were having, and through Exclusion Screening, LLC they have created a simple and cost effective solution. A provider need only put together a list of employees and vendors (with our assistance), and it does the rest for prices that are hard to believe. 

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



OIG Exclusion

Paul Weidenfeld is the author of this article. Contact Paul should you have any  questions at: pweidenfeld@exclusionscreening.com or 1-800-294-0952.