What Providers Need to Know About Checking OIG Checks of the Exclusion List

Posted by Joe Stefansky on February 15, 2021 in Exclusion Screening, OIG Penalties,
OIG Background Checks

U.S. healthcare providers who participate in federal or state healthcare programs such as Medicare or Medicaid must be vigilant in their hiring practices. Those individuals or entities with whom providers contract can subject them to significant penalties if an employee, contractor or vendor is excluded from
in a federally-funded healthcare program.  A provider who employs an excluded individual to provide items or services paid from federal healthcare program funds will be required to pay back 100 percent of the funds improperly received and may be subject to civil monetary penalties.

The  Department of Health and Human Services’ Office of the Inspector General (OIG) places individuals or entities convicted of committing fraud,  abuse or other offenses against patients and programs on a federal Exclusion List known as the “List of Excluded Individuals & Entities” (LEIE). Those individuals or entities appearing on this OIG Exclusion List may not render or be reimbursed for any service or supply materials connected to federal healthcare programs.   A provider may be found liable by the OIG if such services were performed while under employment or contract with his or her business. To avoid the potential Civil Monetary Penalties (CMP) that can be applied for hiring or retaining an excluded individual or entity, conducting a monthly review of current employees, contractors and third-party vendors against the LEIE (as well as at the time of hire) will protect providers and organizations from potential liability. In addition to serving business interests, it will also assure compliance with federal healthcare related contracts which mandate such reviews.

Purpose & SCOPE OF screening the Exclusion List for OIG Background checks

The OIG Exclusion List (or the LEIE) was created to assure the integrity of federal healthcare programs such as Medicare and Medicaid. The purpose of the LEIE is two-fold: (a) to entrust the care of Medicare and Medicaid patients to high quality providers and suppliers and (b) to prevent any federal funds from flowing to individuals or entities that had breached that trust. To meet this goal, federal and state healthcare contractors are required to regularly review this list to avoid hiring or retaining individuals who had committed serious crimes against federal programs or against individuals who were enrolled in federal health care programs.

UNDERSTANDING EXCLUSIONS

Under Section 1128 of the Social Security Act (SSA), the OIG can impose two types of exclusions –   mandatory and permissive.   The effect of both mandatory and permissive exclusions is the same. These exclusions share many commonalities:

> Either can place a provider or business on the OIG Exclusion List;

> Both prevent reimbursement, directly or indirectly, from federal and state healthcare programs;

> Both prevent a provider or entity from contracting to provide services or participating in federal and state healthcare programs; and There are no differentiating factors: list. Only the duration will vary based on the severity of the violation but not the exclusion.

Mandatory exclusions OIG is required by law to exclude from participation in all Federal health care programs individuals and entities convicted of the following types of criminal offenses:

  • Medicare or Medicaid fraud, as well as any other offenses related to the delivery of items or services under Medicare, Medicaid, SCHIP, or other State health care programs;
  • patient abuse or neglect;
  • felony convictions for other health care-related fraud, theft, or other financial misconduct; and
  • felony convictions relating to unlawful manufacture, distribution, prescription, or dispensing of controlled substances.

If an individual or entity is convicted of any of these crimes, the OIG is required by law to place violators on the OIG Exclusion List. The OIG has limited discretion in determining the length of exclusion for a mandatory offense. Minimum exclusion periods are set by federal law. An initial conviction requires exclusion for 5 years.  Being convicted of a second mandatory offense can result in exclusion for 10 years. A third conviction will result in permanent exclusion from Medicare, Medicaid and federal healthcare programs.

Permissive exclusions OIG has discretion to exclude individuals and entities on a number of grounds, including (but not limited to):

  • misdemeanor convictions related to health care fraud other than Medicare or a State health program, fraud in a program (other than a health care program) funded by any Federal, State or local government agency;
  • misdemeanor convictions relating to the unlawful manufacture, distribution, prescription, or dispensing of controlled substances;
  • suspension, revocation, or surrender of a license to provide health care for reasons bearing on professional competence, professional performance, or financial integrity;
  • provision of unnecessary or substandard services;
  • submission of false or fraudulent claims to a Federal health care program;
  • engaging in unlawful kickback arrangements;
  • defaulting on health education loan or scholarship obligations; and
  • controlling a sanctioned entity as an owner, officer, or managing employee.

In addressing permissive exclusions, the OIG has significant discretion on grounds for exclusion and the duration of exclusion. A permissive exclusion can generally result in between 1 to 3 years on the OIG Exclusion List. However, for a case that falls under a permissive exclusion, the OIG may impose a different period depending on the severity of the matter.  

THE FINER POINTS

> Exclusion does not prevent participation outside of federal and state funded healthcare programs.  Note that those individuals or entities on the OIG Exclusion List are only limited from participating  in federal or state health care programs such as Medicare and Medicaid programs. They are free to provide services privately as long as there is no involvement with government funded healthcare programs. Patients however are at potentially at risk of receiving services from ethically questionable healthcare practitioners or providers.

> Exclusion applies to more than direct care providers. Therefore, the monthly check of employees, contractors and vendors against the current LEIE must not be limited to healthcare professionals primarily concerned with patient care. This review process should also include employees providing support services as well as administrative staff and managers. It does not matter if they do not have any interaction with the patients. If such excluded individuals are connected to your business which is participating in federal or state healthcare programs, you will be in violation of the law every time they carry out their functions in relation to your business.

> Fines for hiring or retaining excluded individuals and entities can be significant.  Failing to perform routine OIG checks on pre-hires, as well as current  employees, contractors and vendors can easily result in fines within the $10,000 to $250,000 range. That is a conservative estimate. There have been multiple cases where it has gone well beyond the $250,000 mark. Violations have resulted in fines of millions of dollars on many occasions.  The OIG makes no distinction – healthcare providers “who know or should have known” of excluded individuals or entities with whom they transact are equally liable.

> Reinstatement after an Exclusion Period Ends.  Reinstatement is not automatic. Per the OIG, in order to participate in Medicare, Medicaid and all other Federal health care programs once the term of exclusion ends, the individual or entity must apply for reinstatement and receive written notice from OIG that reinstatement has been granted.

OIG exclusion List is but one of many

The OIG LEIE is the definitive source of exclusions by the OIG. Checking the LEIE can be done either by searching through the OIG portal or by simply downloading the LEIE database. However, to be aware of all federal exclusions, providers should also check the  of System for Awards Management (SAM) database.

The SAM provides a broader search because it compiles exclusion information from multiple federal agencies into a central repository. This includes what used to be known as the Excluded Parties List System (EPLS).  It is a bit more cumbersome to search than the LEIE. Providers must not seek reimbursement for employees or vendors found on such lists. Note that while the LEIE, SAM and EPLS all involve exclusions, these databases are not the same. You may find more information about them here Differences Between the OIG’s LEIE and GSA’s SAM Exclusion Lists .

RESOURCES AND SOLUTIONS

Providers can rely on the Compliance Resources provided by the OIG to help navigate the process for checking your employees, contractors and vendors against the OIG Background Exclusion List. It includes useful training programs to improve your capabilities in performing LEIE checks. Note however that this may hardly be enough to completely perform what is necessary.

Being able to query against the LEIE on a monthly basis for all of your employees, contractors and vendors, as well as the other required lists, can be a daunting exercise. Since the OIG updates the Exclusion List on a monthly basis, the OIG expects a monthly review against the updated Exclusion List by entities who receive reimbursement, directly or indirectly, from federally funded healthcare programs.  The OIG can hold providers  accountable  and impose fines, if an excluded individual or entity is allowed to provide services or supplies after they appear on the LEIE.

Why leave it to chance when you can automate your processes with Streamline Verify’s proprietary exclusion software? Streamline Verify offers its clients access to and review against the most recently updated federal databases such as the LEIE and the SAM as well as state exclusion lists. Clients are also be able to screen state level databases for individuals and entities specifically excluded in such jurisdictions. In addition, Streamline Verify also offers screening capabilities against various sanction lists and licensing lists.

From a business perspective, contracting with Streamline Verify for these services supports both contract compliance and avoidance of potentially significant fines. In addition, having this monthly process performed by an organization that specializes in the review process can save the time of your staff resources and eliminate the worry over potential fines lurking in updated LEIE each month. Benjamin Franklin’s “an ounce of prevention is worth a pound of cure” oft-cited phrase once again finds application here.

 

About Joe Stefansky

About Joe Stefansky

Joe Stefansky has a keen sense of business opportunities in complex problems, using technology to transform difficulty into efficiency. The CEO and founder of Streamline Verify specializes in solving compliance, legal and administrative issues through intuitively designed software that reduces costs and saves time.

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