Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs

On May 18, 2013, the Office of the Inspector General (OIG) of the Department of Health & Human Services issued a Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs. This Bulletin replaces the previous version issued in 1999.

The Bulletin performs several functions:

• Lists prohibited payments.
• Details the scope of the potential civil monetary penalties (CMPs)
• Clarifies CMP liability for employing or contracting with an excluded person • Provides best practices for screening employees and contractors
Prohibited Payments
Since the publication of the 1999 Bulletin, various statutory amendments, including the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 and the Patient Protection and Affordable Care Act of 2010, have expanded the OIG’s authority to exclude individuals and health care entities from Federal health care programs. The effect of an OIG exclusion is that no Federal health care program payment may be made for any items or services furnished (1) by an excluded person or (2) at the medical direction or on the prescription of an excluded person. The exclusion and its prohibitions follow the individual, even if he changes to another health care profession while excluded.

Prohibited payments include:
• All methods of Federal health care program payment, including itemized claims, cost reports, fee schedules, capitated payments, a prospective payment system, or other payment system and applies if the payment is made to a State agency or a person that is not excluded.
• Payment for items or services furnished by an excluded individual including items and services beyond direct patient care. For example, the prohibition includes payment for the preparation of surgical trays, the review of treatment plans, and transportation services such as ambulance drivers, regardless of whether such services are separately billable or are included in a bundle payment.
• Administrative and management services that are payable by the Federal health care programs, even if the services are not separately billable. This includes health information technology services and support, strategic planning, billing and accounting, staff training, and human resources, unless wholly unrelated to Federal health care programs.
• Any items and services furnished at the medical direction or on the prescription of an excluded person when the person furnishing the items or services either knows or should know of the exclusion. Providers that furnish items and services on the basis of orders or prescriptions, such as imaging centers and laboratories, are subject to liability if they furnish items to a Federal program beneficiary on the basis of an order written by an excluded physician. To avoid liability, providers should ensure that the ordering physician is not excluded.

Potential CMPs
An excluded person that submits a claim for payment to a Federal health care program or causes such a claim to be submitted may be subject to a CMP of $10,000 for each claimed item or service furnished during the period that the person was excluded as well as treble damages and program exclusion. The excluded person may also be subject to criminal and civil liability.

CMP Liability for Employing or Contracting with an Excluded Person

The updated bulletin clarifies that a provider may employ or contract with an excluded individual without CMP liability as long as no Federal health care program pays, directly or indirectly, for items or services being provided by the excluded individual, or if the excluded individual furnishes items or services solely to non-Federal health care program beneficiaries. The provider must also ensure that no claims are submitted to, and no payment is received from, Federal health care programs for items or services that the excluded individual provides. Such items or services must relate solely to non-Federal health care program beneficiaries.

Best Practices
Considering the range of relationships that the revised Bulletin includes, the OIG recommends searching the OIG-administered List of Excluded Individuals and Entities (LEIE) prior to hiring or contracting with an individual or company. The OIG recommends that employers screen individuals and contractors who provide any item or service which is either directly or indirectly, in whole or in party, payable by a Federal health care program. To avoid potential CMP liability, the OIG further recommends that providers perform monthly screenings using the LEIE to determine the exclusion status of current employees and contractors. Providers should determine whether or not to screen contractors, subcontractors, and the employees of contractors using the same analysis that they would for their own employees.

The OIG suggests that when checking the LEIE, providers should maintain documentation of the initial name search performed and any additional searches conducted. All names, including maiden names, should be searched.

The OIG recommends that providers use the LEIE as the primary database for purposes of exclusion screening as it is updated monthly and provides more details about persons excluded by OIG than other lists. However, additional exclusion lists can be found at:
• https://www.sam.gov • http://www/npdb-hipdb.hrsa.gov
The full text of the Bulletin can be found here.

For more information about the Special Advisory Bulletin on the Effect of Exclusion, contact Adrienne Dresevic, Esq. or Carey Kalmowitz, Esq., at (248) 996-8510.

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