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The OIG Exclusion List and What YOU Need to Know

Tuesday, June 20, 2017   (0 Comments)
Posted by: Sheri Ryan
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This is a short history about the OIG Exclusion List and what you need to know. 

by:  David Mulholland, DC, CCSP, DABCI, MCS-P

  • January 7, 2016, an Illinois cardiology practice settled a case for $274,721 involving an excluded individual that it knew or should have known was excluded from participation in Federal health care programs.
  • November 12, 2015, a Nevada mobile imaging provider settled a case for $34,187 involving an excluded individual that it knew or should have known was excluded from participation in Federal health care programs.
  • October 23, 2015, and Illinois Hospital Corporation settled a case for $317,661 involving excluded individuals that it knew or should have known were excluded from participation in Federal health care programs.
  • Even here, in our own home town, one of our brethren was let go from his very lucrative job at the Native Hospital because the OIG alleged (incorrectly) that he was in default on his student loans and put him on the LEIE. He lost his job and the hospital was handed a recoupment bill for $600,000 because it knew or should have known he was excluded from participation in Federal health care programs. It took over a year and a half to straighten out their mistake and clear his good name, but he never got his job back and was essentially barred from working at another clinic until it was straightened out.

The OIG, or Office of Inspector General, is the police arm of the Department of Health and Human Services. The stated mission of the OIG is "to protect the integrity of Department of Health & Human Services (HHS) programs as well as the health and welfare of program beneficiaries." So the OIG is acting in the people's/taxpayers best interest to regulate and enforce violations of health care fraud, waste and abuse. In general they oversee about $.26 of every $1 of federal money, and get back about $8 for every $1 invested in auditing. So you can see business is good, and the Exclusion Lists violations are low hanging fruit.

The OIG was created in 1976 and oversees more than 300 other HHS programs. The most common and well known are Medicare, Medicaid, TriCare, CHIPs, and now I suspect VA. If you look closely at your authorizations, you are to treat VA patients the same as Medicare patients. This is a big organization, and they have the resources to play rough. The fines and penalties for continuing to bill for services of an excluded individual or entity can be staggering. Even a quick internet search will turn up some breathtaking examples like the ones above. We all know that it is good policy to vet our employees prior to hiring them, but after hire, there is a legal doctrine called “negligent retention” which is applied if an employer fails to conduct regular updates to certain public records that might change.

How do they get on the Exclusion List? By being convicted of an offense such that the government is prohibited from doing business with them. These are things like healthcare fraud, patient abuse or neglect, and even some other things that my surprise you, such as defaulting on health education loans or scholarship obligations. The OIG created the List of Excluded Individuals and Entities (LEIE) as a sort of “one-stop shop” to make updating those records easier. The problem is that they are not necessarily up to date as to Medicaid exclusions, so you should check our state exclusion list as well. One of the many things that the Affordable Care Act did is that under Section 6501 an employer is now held liable for knowing if an individual or entity is excluded in any one state. If that person or entity is excluded in one state, they are considered excluded in all states. It is also vitally important that you include in your Employee Policy Manual and Business Associate Agreement a provision that an employee or 3rd party vendor will notify you immediately if there is any investigative or legal actions being considered or taken against them for any reason.

One of the most common things I see in talking with people about effective compliance programs is the absence of any screening of new hires or staff through the Exclusion Lists. Most providers have never even heard of it. Inspector General Daniel Levinson of HHS has stated many times that it is his recommendation (and is best practice) to search the OIG exclusion list monthly since they update their records monthly. A proper employee and vendor OIG background check includes a pre-employment (or prior to contracting) OIG exclusion background check and state Medicaid Exclusion check AND a monthly update against those lists. Remember that the legal standard for a negligent hiring or negligent retention claim is what the employer "knew or should have known" about the exclusion status of an individual or entity. Since OIG exclusions at the federal and state level are public record, the employer does not have a defense that it did not or could not have known that they hired or kept an excluded individual or entity. It’s easy to do and it’s free, so check monthly, make a form or print out your results, and put it in your compliance manual. The links are below.

For out of state entities, select the state you are interested in, such as for a new-hire or an out of state contractor (like a billing service).

Don’t have a Compliance Manual? We need to talk. The whole issue of compliance can be rather daunting, that’s for sure. There is so much more to an effective compliance program, and this short article only skims the surface. If you have questions or concerns, please contact me as this is a service I provide. You don’t have to go it alone. 

David Mulholland, DC, CCSP, DABCI, MCS-P
2020 Abbott Rd, Suite 2
Anchorage, Alaska 99507
Phone: 907-770-5700
Fax: 907-770-5701

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