OIG Issues Special Advisory on Exclusion Issues

On May 8, 2013 the Office of Inspector General (“OIG”) for the Department of Health and Human Services issued an Updated Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs (“the Updated Bulletin”) to replace and supersede a bulletin issued in 1999.

The Updated Bulletin reiterates, clarifies and/or provides guidance on many points, including the following with regard to the effect of exclusion on participation in Federal health care programs:

• Payment cannot be made from a Federal health care program for items or services furnished by an excluded person or at the medical direction or on the prescription of an excluded person.
• Exclusions and payment prohibitions continue to apply to an excluded person even if he or she switches professions during the exclusion period (e.g., an individual excluded as a pharmacist cannot go on to obtain a medical degree and furnish services to patients covered by federal health care programs).
• An excluded provider may refer a patient to a non-excluded provider if the excluded provider does not furnish, order, or prescribe any services for the referred patient, and the non-excluded provider provides all treatment and submits all bills to the Federal health care programs.
• Exclusions and payment prohibitions extend beyond direct patient care. For example, an excluded person could not prepare surgical trays, review treatment plans, input prescription information for pharmacy billing or be involved in any way in filling prescriptions for drugs that are billed to a Federal health care program, or provide transportation services paid for by a Federal health care program, such as working as an ambulance driver or dispatcher.
• Excluded providers are prohibited from providing administrative or management services that are payable by a Federal health care program, even if the services are not separately billable. Some examples of management and administrative roles that an excluded provider could not perform include: chief executive officer, chief financial officer, general counsel, director of health information management, director of human resources, physician practice office manager, health information technology services and support, strategic planning, billing and accounting, staff training and human resources unless wholly unrelated to federal health care programs.
• The payment prohibition extends to volunteer positions. For example, an excluded health professional could not volunteer at a hospital or hospice where services are payable by a Federal health care program.
• A provider may employ or contract with excluded providers for items or services that are solely furnished to non-Federal healthcare program beneficiaries. In such a situation, the excluded providers do not have to be paid out of a separate account. However, there can be no claim submitted or payment received from a Federal health care program for services or items provided directly or indirectly by the excluded provider.
• Providers should confirm at the point of service that the ordering or prescribing physician is not excluded. The OIG further cautions that some excluded providers may still have a Drug Enforcement Agency (DEA) license. The OIG also cautions against relying on Medicare Part D plans and/or state agencies to have edits in place to identify excluded providers since reliance on a third party does not relieve the provider of responsibility with regard to any overpayments or civil monetary penalties related to services ordered or prescribed by an excluded provider.
• From a practical standpoint, an excluded provider cannot retain greater than 5% ownership interest in a provider entity, nor can an excluded provider hold an administrative or management position.
• OIG urges providers to screen potential employees or contractors by using the OIG List of Excluded Individuals/Entities (LEIE). Although there is no statutory or regulatory requirement to check the LEIE at any specific intervals, the OIG suggests monthly screening to best minimize potential overpayment and CMP liability. The OIG further suggests that providers maintain documentation of all name searches performed and additional searches conducted.
• In determining who to screen, a provider is expected to look at each job category and contractual relationship and determine whether the item or service is payable directly or indirectly, in whole or in part by a Federal health care program. If the answer to this question is yes, then all persons in that job category or with a similar contractual relationship should be screened to best minimize CMP liability.
• The OIG cautions providers who rely on third parties to conduct screening that the provider will retain liability for CMP. Where health care workers are contracted through another entity, such as a staffing agency, the OIG states that a provider may reduce or eliminate CMP liability if it can demonstrate that it reasonably relied upon the staffing agency’s agreement by contract to perform LEIE screening. The OIG further cautions that any such delegation should be documented in the agreement between the parties and the provider should exercise due diligence in ensuring that the agency is meeting the contractual obligation.
• The LEIE is the primary database that should be used for the purposes of exclusion screening (as opposed to the NPDB or SAM).
• Providers who identify potential CMP liability for contracting with or employing an excluded provider could use the OIG’s Provider Self-Disclosure Protocol (SDP) to disclose and resolve potential CMP liability.

For further information regarding the effect of exclusion on a provider’s ability to contract with or be employed with a health care entity that bills federal health care programs, please contact an experienced Wachler & Associates‘ health law attorney.