Restrictions on Employing or Contracting with OIG Excluded Persons: Are you screening your employees and contractors properly?
November 8, 2018
Reprinted with permission from the October 2018 issue of Pennsylvania Psychiatric Society © 2018. Further duplication without permission is prohibited. All rights reserved.
By Julia Coelho
PaPS General Counsel
The Office of Inspector General (OIG) of the U.S. Department of Health & Human Services is charged with identifying and eliminating fraud, waste and abuse in federal health care programs. In carrying out its mission, the OIG has authority to exclude individuals and entities (collectively, “excluded persons”) from participation in the Medicare, Medicaid and other Federal health care programs. The principal effect of an OIG exclusion is that Federal health care programs are prohibited from paying for items or services provided by an excluded person, or at the medical direction or prescription of an excluded person. An excluded person who, directly or indirectly, submits a claim for payment in violation of this prohibition may be subject to civil monetary penalties (CMP) of up to $10,000 for each claimed item or service, and an assessment of up to three times the amount claimed for each item or service. In addition, OIG may deny reinstatement of the excluded person’s participation in Federal health care programs.
The scope of this exclusion and corresponding prohibition on payment is deceptively broad. The prohibition on payment goes beyond patient care services and includes, for example, administrative and management services provided by excluded persons, even though these services are generally not separately billable to federal health care programs. The prohibition applies to all methods of Federal health care program payment such as payments derived from itemized claims, fee schedules, cost reports, capitated payments and bundled payments. Further, the prohibition affects excluded persons and health care providers that contract with or employ excluded persons. Health care providers may be subject to CMP liability if they submit claims to a federal health care program for items or services provided by persons whom the provider knows or should know are excluded.
Given the significant liability exposure from a potential violation, health care providers that furnish items or services, in whole or in part, to federal health care program beneficiaries are strongly encouraged to implement screening procedures to ensure they are not hiring or contracting with individuals or entities excluded by the OIG. While most providers perform some level of screening of employees and vendors, their screening procedures are often not rigorous enough and may fall short of providing adequate protection. Whether you are opening a new practice, or have an established practice with screening policies already in place, consider the following “best practice tips” to further compliance and minimize your risk of overpayment and CMP liabilities:
- Screen employees and contractors initially prior to hiring or contracting. Repeat screening process periodically to determine the exclusion status of current employees and contractors. Monthly screenings are recommended for the most accurate results as OIG updates its database monthly.
- Search the employee or contractor information against the OIG’s List of Excluded Individuals and Entities (LEIE) available on the OIG web site at https://exclusions.oig.hhs.gov/ The LEIE is accessible through a searchable online database and downloadable data files.
- Retain documentation of the initial name search performed and any additional searches conducted to verify results of potential name matches. All names used by the employee or contractor and known to the provider (e.g., if searching for a married individual, his or her maiden name) should be searched. Check your search results by verifying both the individual or entity name and matching the corresponding Social Security Number (SSN) or Employer Identification Number (EIN).
- If a provider has arrangements with contractors and subcontractors that provide items or services for which the provider receives federal health care program reimbursement, the provider is responsible for ensuring that the contractor/subcontractor’s employees are not excluded persons. The provider may choose to screen the employees directly or may rely on the contractor or subcontractor’s own screening procedures. As the provider is ultimately liable under the statute, the provider should validate that the contractor/subcontractor is conducting the screening on its behalf and include a screening requirement in the provider’s contract with its vendors.
 There are mandatory and permissive grounds for exclusion. For example, the OIG is required to exclude persons convicted of any of the following criminal offenses: Medicare or Medicaid Fraud; patient abuse or neglect; and felony convictions for other health care-related fraud, theft, or other financial misconduct. The OIG may, but is not required to, exclude persons based on any of the following permissive grounds: fraud in a program (other than a health care program) funded by any Federal, State or local government agency; suspension, revocation, or surrender of a license to provide health care for reasons related to professional competence, professional performance, or financial integrity; or defaulting on health education loan or scholarship obligations. These are not complete lists; additional grounds for exclusion are set forth at 42 U.S.C. 1320a–7 and 42 U.S.C. 1320c–5.
 See Act 112 of 2016, available at: http://www.legis.state.pa.us/cfdocs/legis/li/uconsCheck.cfm?yr=2016&sessInd=0&act=112
 While the LEIE is the primary database for exclusion screenings, Providers may choose to conduct additional screenings beyond the LEIE (e.g., National Practitioner Data Bank) to uncover the existence of other sanctions or violations.