Texas Policy on Exclusion

The Texas Health and Human Services Commission Office of Inspector General (HHSC-OIG) works to protect the health and welfare of people receiving Medicaid and other state benefits. The mission of the Texas OIG is the prevention, detection, audit, inspection, review, and investigation of fraud, waste, and abuse in the provision and delivery of all health and human services in the state, including services through any state-administered health or human services program that is wholly or partly federally funded, and the enforcement of state law relating to the provision of these services. (Texas Gov. Code 531.102(3)).

The people or businesses who are excluded from participating as providers are added to the:

A Texas OIG exclusion search can be conducted using either on Texas HHSC OIG Exclusion  portal which allows up to 5 names to be searched at a time or by downloading the Texas OIG Exclusions file. A Texas OIG search of the Texas Health and Human Services Commission Medicaid Exclusion List results can provide the following information when there is a match:

In the event of an inconclusive search result, including the SSN in a name search using the Texas online portal can often resolve an ambiguity. However, as frequent users of the Texas lists have learned, the Texas OIG does not include reinstatement records in the online portal version of the Texas exclusion list so using the SSN will not identify individuals or entities previously excluded by Texas. However, these reinstatement records are maintained on the full downloadable list which is also publicly available for when you conduct your Texas OIG search.

Impact of Exclusion:

Exclusion by the HHSC-OIG bars certain people or organizations from participating as service providers in state or federal health care programs and thereby prevents reimbursement for items or services provided, ordered or prescribed by an excluded individual or entity. Under this payment prohibition sanction, as stated in TAC §371.1705(e)(4):  

An excluded person is prohibited from:

• personally or through a clinic, group, corporation, or other association or entity, billing or otherwise requesting or receiving payment for any Title V, XVIII, XIX, XX, or CHIP program for items or services provided on or after the effective date of the exclusion;
• providing any service under the Medicaid program, whether or not the excluded person directly requests Medicaid program payment for such services;
• assessing care or ordering or prescribing services, directly or indirectly, to Title V, XIX, XX, or CHIP recipients after the effective date of the person’s exclusion; and
• accepting employment by any person whose revenue stream includes funds from a Title V, XVIII, XIX, XX, or CHIP program.

Management and Enforcement of Exclusion and Screening Requirements

HHSC-OIG: The HHSC-OIG is responsible for state exclusion activities through its various divisions:

• Chief Counsel Division. The Texas Chief’s Counsel’s office is primarily responsible for enforcement of the Texas state exclusion requirements.  Within the Chief Counsel Division:
  • the General Law Section provides legal support to OIG operations, including legal support for researching termination/exclusion issues.
  • the Litigation Section manages appeals of investigations and audits that determined providers received Medicaid funds to which they were not entitled and also processes provider terminations and exclusions.
• Investigation and Review Division.  Two units within this division actively investigate and manage exclusion screening for state programs:
  •  The Medicaid Program Integrity (MPI) unit investigates and reviews allegations of fraud, waste and abuse involving Medicaid providers who may be subject to administrative enforcement actions including of Medicaid overpayments and/or exclusion from the Medicaid program. When criminal Medicaid fraud is suspected, PI refers the matter to the Attorney General’s Medicaid Fraud Control Unit (MFCU).
  • The Provider Enrollment Integrity Screenings (PEIS) unit is responsible for conducting certain federal and state required screening activities for providers seeking to enroll in Medicaid, CHIP and other state health care programs.

Bases for Exclusion

A person, or entity, may be excluded for many reasons. These include, but are not limited to:

• A conviction for health care program-related fraud or patient abuse as defined by the Texas statutes set forth in the following section;  
• An adverse action by a licensing board, such as the Texas Board of Nursing, Texas Medical Board or Texas State Board of Pharmacy; or
• Being excluded from the Medicare program.

Texas Statutory and Contractual Authorities for Exclusion and Screening

Similar to the federal HHS-OIG exclusions, there are two types of exclusions under Texas law which can place an individual or entity on the Texas Medicaid Exclusion List:

Mandatory Exclusion

Texas Administrative Code (TAC) §371.1705(a)

The OIG must exclude from participation in Titles V, XIX, XX, and CHIP programs, as applicable, any person if it determines that the person:

1. has been excluded from participation in Medicare or any other federal health care programs;
2. is a provider whose health care license, certification, or other qualifying requirement to perform certain types of service is revoked, suspended, voluntarily surrendered, or otherwise terminated such that the provider is unable to legally perform their profession due to loss of their license, certification, or other qualifying requirement;
3. has been convicted of a criminal offense related to the delivery of an item or service under Medicare or a state health care program, including the performance of management or administrative services relating to the delivery of items or services under any such program;
4. has been convicted, under federal or state law, of a felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct:
   1. in connection with the delivery of a health care item or service, including the performance of management or administrative services relating to the delivery of such items or services; or
      with respect to any act or omission in a health care program (other than Medicare and a State health care program) operated by, or financed in whole or in part, by any federal, state or local government agency;
5. has been convicted, under federal or state law, of a felony relating to the unlawful manufacture, distribution, prescription or dispensing of a controlled substance, as defined under federal or state law. This applies to a person that:
   1. is, or has ever been, a health care practitioner, person, or supplier;
   2. holds, or has held, a direct or indirect ownership or control interest (as defined in §1124(a)(3) of the Social Security Act) in an entity that is a health care person or supplier, or is, or has ever been, an officer, director, agent or managing employee (as defined in §1126(b) of the Social Security Act) of such an entity; or
   3. is or has ever been, employed in any capacity in the health care industry;
      
6. is an MCO or other entity furnishing services under a waiver approved under §1915(b)(1) of the Social Security Act that has an affiliate relationship with a person, and that person:
   1. has been convicted:
      1. of an offense that is a ground for mandatory exclusion under this section;
      2. (of an offense under federal or state law consisting of a misdemeanor relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct:
      3. in connection with the delivery of a health care item or service;
      4. with respect to any act or omission in a health care program operated by or financed in whole or in part by any federal, state, or local government agency; or
      5. relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct with respect to any act or omission in a program (other than a health care program) operated by or financed in whole or in part by any federal, state, or local government agency;
      6. of an offense under federal or state law in connection with the interference   with or obstruction of any investigation related to:
      7. an offense that is a ground for mandatory exclusion under this section; or
      8. (the use of funds received, directly or indirectly, from any federal health care program;
      9. of an offense under federal or state law for acts that took place after January 1, 2010, in connection with the interference with or obstruction of any audit related to:
         1. an offense that is a ground for mandatory exclusion under this section; or
         2. the use of funds received, directly or indirectly, from any federal health care program;
         3. has had civil money penalties or assessments imposed under §1128A of the Social   Security Act (federal false claims); or
         4. has been excluded from participation in Medicare or any of the state health care programs or CHIP; and
            
   2. that person:
      1. has an ownership interest in the entity;
      2. is the owner of a whole or part interest in any mortgage, deed of trust, note or other obligation secured (in whole or in part) by the entity or any of the property assets thereof, in which whole or part interest is equal to or exceeds five percent of the total property and assets of the entity;
      3. is an officer or director of the entity, if the entity is organized as a corporation
      4. is a partner in the entity, if the entity is organized as a partnership;
      5. is an agent of the entity;
      6. is a managing employee, that is, a an person (including a general manager, business manager, administrator, or director) who exercises operational or managerial control over the entity or part thereof, or directly or indirectly conducts the day-to-day operations of the entity or part thereof; or
      7. was formerly described in clauses 6.2.1 – 6.2.6 of this subparagraph, but is no longer so described because of a transfer of ownership or control interest to an immediate family member or a member of the person’s household in anticipation of or following a conviction, assessment of a civil monetary penalty, or imposition of an exclusion;
7. is an individual and has an ownership or control interest or a substantial contractual relationship in or is an officer or managing employee of a sanctioned entity, and who knew or should have known of an action that constituted the basis for a conviction or mandatory exclusion of the sanctioned entity; or
8. is convicted, pleads guilty or pleads nolo contendere to an offense arising from a fraudulent act under the Medicaid program, which results in injury to a person age 65 or older, a person with a disability, or a person younger than 18 years of age.

Permissive Exclusion

TAC §371.1707(a)

 The OIG may exclude from participation in Titles V, XVIII, XIX, XX, or CHIP programs any person if it determines that the person:

1. commits a program violation;
2. is affiliated with a person who commits a program violation;
3. commits an act for which damages, penalties, or liability could be or are assessed by the OIG;
4. is a person not enrolled as a provider whose health care license, certification, or other qualifying requirement to perform certain types of service is revoked, suspended, voluntarily surrendered, or otherwise terminated such that the provider is unable to legally perform their profession due to loss of their license, certification, or other qualifying requirement;
5. could be excluded for any reason for which the Secretary of the United States Department of Health and Human Services, its Office of Inspector General, or its agents could exclude such person under 42 U.S.C. §1320a-7(b) or 42 C.F.R. Part 1001 or 1003;
6. is found liable for any violation under subsection (c) of Texas Human Resources Code §32.039 that resulted in injury to a person who is 65 years of age or older, a person with a disability, or a person younger than 18 years of age;
7. is found liable for any violation under subsection (c) of Texas Human Resources Code §32.039 that did not result in injury to a person 65 years of age or older, a person with a disability, or a person younger than 18 years of age; or
8. has been excluded from participation in Medicare or any other federal health care programs.

It should also be noted that under Section 6501 of the federal Affordable Care Act, all states must also terminate the participation of any provider from their state Medicaid program who has been terminated for cause from any other state Medicaid program.

Texas Medicaid Contract Provisions Related to Exclusion and Screening

The template Texas Medicaid contract with managed care organization includes the following provisions related to exclusions and screening:

Employment Verification

Section 4.12

• MCOs must confirm the eligibility of all persons employed by the MCO to perform duties within Texas and all persons, including subcontractors, assigned by the MCO to perform work pursuant to the Contract.
• The MCO may not knowingly have a relationship with the following:
  • An individual or entity that is debarred, suspended, or otherwise excluded from participating in procurement activities under the Federal Acquisition Regulation or from participating in non-procurement activities under regulations issued under Executive Order No. 12549 or under guidelines implementing Executive Order No. 12549.
  • An individual or entity who is an affiliate, as defined in the Federal Acquisition Regulation at 48 CFR § 2.101, of a person described in (b)(1) of this section.

• A relationship as described in this section is as follows:
• A director, officer, or partner of the MCO.
• A subcontractor of the MCO as governed by 42 CFR §438.230.
• A person with ownership of five percent or more of the MCO.
• A person with an employment, consulting or other arrangement with the MCO for the provision of items and services that relate to the MCO’s obligations under its contract with the State.

The MCO must confirm the identity and determine the exclusion status, any subcontractor of the MCO, (as governed by 42 CFR §438.230), as well as any person with an ownership or control interest, or who is an agent or managing employee of the MCO as defined in (b) of this section upon contract execution and through checks of federal databases that include the:

1. U.S. Department of Health and Human Services, Office of Inspector General’s List of Excluded Individuals and Entities (LEIE);
2. System for Awards Management (SAM) [the successor to the Excluded Parties List System (EPLS)];
3. Social Security Administration’s Death Master File (SSA-DMF); and the
4. National Plan & Provider Enumeration System.

The MCO must consult the databases upon contracting and no less frequently than monthly thereafter. If the MCO finds a party that is excluded, it must promptly notify the entity and take action consistent with 42 CFR §438.610(c).

Texas Medicaid Provider Enrollment exlusion Requirements

Under the current Medicaid Provider Enrollment Manual, a provider who wishes to participate either in a managed care or fee-for-service arrangement to provide services to Texas health care program must meet certain screening requirements:

Section 1.3.1 Excluded Entities and Providers.

The United States Health and Human Services (HHS)-OIG and the HHSC-OIG exclude certain individuals and entities from participation in all federal or state health-care programs. The exclusions restrict individuals from receiving any reimbursement for items or services furnished, ordered, or prescribed.

All current providers and providers who are applying to participate in state health-care programs must screen their employees and contractors every month to determine whether they are excluded individuals or entities. These screenings are a condition of the provider’s enrollment, revalidation, or re-enrollment into state health-care programs.

Providers can determine whether an individual or entity is excluded by searching the List of Excluded Individuals/Entities (LEIE) website at www.oig.hhs.gov/fraud/exclusions.asp. A downloadable version of the database is available but it does not include Social Security Numbers (SSNs) or Employer Identification numbers (EINs). The Texas HHSC-OIG website is found at https://oig.hhsc.texas.gov/ exclusions. If a name matches a name on the exclusion list, it can be verified online with an SSN or EIN.

Providers must search the LEIE website monthly to capture any exclusions or reinstatements that have occurred since the last search. Providers must immediately report to HHS-OIG any exclusion information they discover when searching the LEIE database.

CFR section 1003.102(a)(2), states that civil monetary penalties may be imposed against Medicaid providers and managed care entities (MCEs) that employ or enter into contracts with excluded individuals or entities to provide items or services to Medicaid clients. In addition, no Medicaid payments can be made for any items or services directed or prescribed by an excluded provider or other authorized person when the individual or entity furnishing the services either knew or should have known of the exclusion. This prohibition applies even when the Medicaid payment itself is made to another provider, practitioner, or supplier that is not excluded.

Texas Medicaid Provider Agreement

Under the Section 9.1 of the Texas Medicaid Provider Agreement, a provider must confirm that  in accordance with TAC 352.5 (b)(1), the provider has conducted an internal review to confirm that neither the applicant or the re-enrolling provider, nor any of its employees, owners, managing partners, or contractors (as applicable), have been excluded from participation in a program under Title XVIII, XIX, or XXI of the Social Security Act. Further, the provider must attest that an internal review was conducted to confirm that neither the applicant or the re-enrolling provider nor any of its employees, owners, managing partners, or contractors have been excluded from participation in a program under the Title XVIII, XIX, or XXI of the Social Security Act. Section 12.1(g) of the Agreement states that falsifying entries, concealment of a material fact, or pertinent omissions may constitute fraud and may be prosecuted under applicable federal and state law. Fraud is a felony, which can result in fines or imprisonment.

Potential Penalties

As noted above, if a provider or managed care organization submits a claim for services or items provided by an excluded provider, they can be in breach of contract and face potential false claims allegations. They can be subject to civil monetary penalties imposed by the OIG or by the state. In Texas, if a bill or claim is submitted by or on behalf of an excluded provider the HHSC-OIG can assess penalties for exclusion violations under the Texas Human Resources Code §32.039 (c):

A person who commits a violation under Subsection (b) is liable for:

1. the amount paid, if any, as a result of the violation and interest on that amount determined at the rate provided by law for legal judgments and accruing from the date on which the payment was made; and
2. payment of an administrative penalty of an amount not to exceed twice the amount paid, if any, as a result of the violation, plus an amount:
   1. not less than $5,000 or more than $15,000 for each violation that results in injury to an elderly person, a person with a disability, or a person younger than 18 years of age; or
   2. not more than $10,000 for each violation that does not result in injury to a person described by Paragraph (A).

In the event of an inconclusive search result, including the SSN in a name search using the Texas online portal can often resolve an ambiguity. However, as frequent users of the Texas lists have learned, the Texas OIG does not include reinstatement records in the online portal version of the Texas exclusion list so using the SSN will not identify individuals or entities previously excluded by Texas. However, these reinstatement records are maintained on the full downloadable list which is also publicly available.