Department of Health and Human Services 
OFFICE OF 
INSPECTOR GENERAL 
MEDICARE PAYMENTS TO 
OIG EXCLUDED PHYSICIANS 
JUNE GIBBS BROWN 
Inspector General 
AUGUST 2000 
OEI-07-98-00380  OFFICE OF INSPECTOR GENERAL 
The mission of the Office of Inspector General (OIG), mandated by Public Law 95-452, as 
amended by Public Law 100-504, is to protect the integrity of the Department of Health and 
Human Services programs as well as the health and welfare of beneficiaries served by them.  This 
statutory mission is carried out through a nationwide program of audits, investigations, 
inspections, sanctions, and fraud alerts.  The Inspector General informs the Secretary of program 
and management problems and recommends legislative, regulatory, and operational approaches to 
correct them. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) is one of several components of the Office of 
Inspector General.  It conducts short-term management and program evaluations (called 
inspections) that focus on issues of concern to the Department, the Congress, and the public.  The 
inspection reports provide findings and recommendations on the efficiency, vulnerability, and 
effectiveness of departmental programs. 
OEI's Kansas City Regional Office prepared this report under the direction of James Wolf, 
Regional Inspector General, and Brian Pattison, Deputy Regional Inspector General.  Principal 
OEI staff included: 
REGION  HEADQUARTERS 
Michael Presley Barrett, Project Leader
 Jennifer Antico, Program Specialist

Tricia Fields, Program Analyst
 Barbara Tedesco, Mathematical Statistician

Perry Seaton, Team Leader
 Brian Ritchie, Program Analyst

Scott Horning, Program Analyst

To obtain copies of this report, please call the Kansas City Regional Office at 816-931-2544. 
Reports are also available on the World Wide Web at our home page address: 
http://www.hhs.gov/oig/oei/  E X E C U T I V E   S U M M A R Y  
PURPOSE 
To determine the extent to which OIG excluded physicians in a fee-for-service setting 
might be providing and billing for services rendered to Medicare beneficiaries. 
BACKGROUND 
Congress and the Secretary have entrusted the Office of Inspector General (OIG) with a 
variety of authorities under which practitioners who are unqualified, or abusive or who 
commit fraud may be excluded from Medicare and other Federal health care programs 
participation.  The intended effect of these exclusions is that no payment may be made for 
services that the excluded provider has rendered, ordered, or prescribed to a Medicare or 
Medicaid beneficiary or a receiver of services under any other Federal health care 
program.  Needless to say, it is unlawful for any provider to submit or cause to be 
submitted claims to the Medicare program once they have been notified of the exclusion 
action. 
We obtained cumulative exclusion data through 1997 from the OIG Office of 
Investigations (OI) of all physicians for which we could identify a Unique Physician 
Identification Number (UPIN).  This inspection focused on physicians in the fee-for-
service setting.  Our population did not include a number of excluded suppliers, nurses and 
other healthcare providers and therefore is limited in scope.  We matched this data against 
Health Care Financing Administration (HCFA) payment data for 1997.  Related to this 
match, we contacted each Medicare carrier for information on the reasons and the basis 
for any payments made to excluded physicians.  Based upon these contacts we calculated 
a Medicare overpayment amount. 
FINDINGS 
Few Payments Were Made To Excluded Physicians In Fee-For-Service Medicare 
Most payments made to excluded physicians were proper.  We found that most 
Medicare payments made to excluded physicians in the fee-for-service setting were 
proper.  These payments were due to unassigned first claim services or services rendered 
as a result of an OIG waiver for medically underserved areas. 
Some payments were questionable.  We found 12 physicians in which claims were 
processed where the Unique Physician Identification Number (UPIN) belonged to an 
excluded physician but the Provider Identification Number (PIN), upon which payment 
was made, belonged to a non-excluded physician.  Payments for these claims totaled 
$90,654. 
1 
OIG Excluded Physicians  OEI-07-98-00380  A small number of improper payments were made to excluded physicians.  Based 
upon our UPIN match we found that improper payments have been made to 
21 physicians, totaling $ 35,833. 
Improper Payments Were Made Mostly As The Result Of Human Error 
Of the 27 carriers in existence in 1997, 13 made improper payments to OIG excluded 
physicians.  Nine carriers made these payments due to employee processing errors of 
which two made improper payments, but later recovered them.  Other payments were 
made when excluded physicians submitted new applications for new provider numbers, 
and only one improper payment was due to a system error. 
Carrier Staff Raised Some Concerns Regarding The Timeliness, Completeness, 
And Reliability Of Exclusion Data 
The information provided to carrier personnel implementing the exclusion was not always 
complete and updates were not always received by them on a monthly basis.  Social 
Security numbers, birth dates, and UPINs were sometimes missing, making proper 
identification of the particular excluded physician difficult for the carrier.  In one instance, 
this resulted in an improper payment. 
CONCLUSION 
Our match of exclusion data to HCFA payments did not include all OIG excluded 
providers,  only physicians in the fee-for-service setting where all appropriate data is 
available.  For this particular group the exclusion system seems to work well.  Even there, 
however, it is not perfect.  The problems, while not serious, need to be solved.  HCFA is 
responsible for sending notice of exclusions to the carriers.  It states that as of January 
1999, it has implemented protocols for sending out exclusion data on a monthly basis in 
electronic format.  Medicare carriers now need to ensure that their staff who are 
responsible for processing the exclusions receive this information timely and take 
appropriate action on it.  Meanwhile, it is important that the OIG, HCFA, and Medicare 
contractors work in concert to make further improvements to the system to prevent 
payments to excluded physicians. 
It is also worth noting that the limitations and difficulties we found in our efforts to match 
exclusion data with health care providers working in the medical field who do not have 
UPINs, or who may provide services in a managed care setting, is a cause of concern. 
2 
OIG Excluded Physicians  OEI-07-98-00380  AGENCY COMMENTS 
We solicited and received comments on our draft report from HCFA, which agreed with our 
findings and recommendations.  HCFA also expressed a willingness to work with the OIG to 
further strengthen the processes of notifying Medicare contractors of excluded individuals and 
effecting their exclusion from Federal programs.  The full text of HCFAs comments are included 
in Appendix B. 
3 
OIG Excluded Physicians  OEI-07-98-00380  T A B L E   O F   C O N T E N T S  
PAGE

EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5

FINDINGS

Few Payments Were Made To Excluded Physicians In Fee-For-Service Medicare  . . . . .  8

Improper Payments Were Made By Carriers, Mostly As The Result Of Human Error . . .  9

Carriers Raise Some Concerns Regarding Exclusion Data  . . . . . . . . . . . . . . . . . . . . . . . 9

CONCLUSION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11

APPENDIX

A: Reasons for Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

B: Agency Comments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

4 
OIG Excluded Physicians  OEI-07-98-00380  I N T R O D U C T I O N  
PURPOSE 
To determine the extent to which OIG excluded physicians in a fee-for-service setting 
might be providing and billing for services rendered to Medicare beneficiaries. 
BACKGROUND 
Congress and the Secretary have entrusted the Office of Inspector General (OIG) with a 
variety of authorities under which practitioners who are unqualified, or abusive or who 
commit fraud may be excluded from Medicare and other Federal health care programs 
participation.  Examples of circumstances on which an exclusion would be predicated 
include conviction of a crime related to health care fraud, license revocation by a State 
licensure board, and finding of substandard care by a Medicare Peer Review Organization. 
In recent years, the OIG has implemented some 2,000 - 3,000 exclusions of varying 
durations.  The intended effect of these exclusions is that no payment may be made for 
services that the excluded provider has rendered, ordered, or prescribed to a Medicare or 
Medicaid beneficiary or a receiver of services under any other Federal health care 
program.  Needless to say, it is unlawful for any provider to submit or cause to be 
submitted claims to the Medicare program once they have been notified of the exclusion 
action. 
Direct notification of exclusions is made to the subject, Medicaid State agencies, and State 
licensing boards (where appropriate).  The Health Care Financing Administration (HCFA) 
is provided a listing of all exclusions and reinstatements.  Also, interested parties are able 
to identify excluded providers by virtue of their broad access to OIG exclusion data which 
includes Internet access, queries to the National Practitioner Data Bank, Federal Register 
publications, and the General Services Administration-sponsored Federal debarment 
listing.  If this information is not being used to timely identify providers that have been 
excluded, it can be potentially harmful to Federal programs and their beneficiaries, and 
could result in a diminishing of the program sanctions deterrent and remedial effects. 
The HCFA contracts with insurance companies, called carriers, to process and pay claims 
for covered Part B services.  They also perform other administrative tasks, such as 
reviewing claims and ensuring that any mistaken payments are identified and returned to 
the Medicare program.  It is also the responsibility of the carriers to identify and 
implement exclusions imposed by the OIG and transmitted to the carrier by HCFA. 
5 
OIG Excluded Physicians  OEI-07-98-00380  According to HCFAs instructions to Medicare carriers, a listing containing exclusion and 
reinstatement/withdrawal actions is distributed to the carriers on a monthly basis.  The 
carriers are instructed to use the information contained in this listing to determine whether 
a provider is eligible for payment and to ensure that sanctioned providers are not being 
inappropriately paid.  Carriers are responsible for ensuring that no payments are made for 
items or services furnished, ordered, or prescribed by excluded providers after the 
effective date of the sanction. 
As one aspect of detecting excluded physicians, Medicare issues a national Unique 
Physician Identification Number (UPIN) used for specific identification of each 
participating physician.  In addition, Medicare contractors make payments for services 
based upon Provider Identification Numbers (PINs) issued for each practice setting. 
HCFA guidelines require that carriers deny payment to excluded providers and that PINs 
for excluded providers be taken out of an active status.  Contractors edit for denial of 
payment through a process of flagging which then requires all claims for that PIN to be 
manually adjudicated. 
Proper recording of identifying information regarding excluded persons is necessary to 
ensure that claims are not improperly paid.  It also ensures that excluded providers do not 
become newly enrolled by other carriers or re-enrolled with the same carrier. 
The carriers exclusion processes have similar basic features.  When a provider enrolls s/he 
submits an application.  The carrier searches for the provider in HCFAs Publication 69, 
which includes excluded providers, and in other sources of exclusion information that it 
collects and stores.  If the provider is found to be excluded the application is denied. 
Carriers attempt to verify previous provider numbers with the UPIN registry to determine 
whether providers have practiced in another State.  When found, the carrier also verifies 
the providers good standing in that State. 
When a monthly exclusion update is received, a search for the provider is made on the 
carriers system of active providers.  The carrier then flags the system so that claims will 
not be automatically paid.  This forces claims submitted by that provider, or by 
beneficiaries submitting unassigned claims for that provider, to be manually adjudicated. 
If the claim is unassigned and it is a first time service for that beneficiary, the claim is paid 
and a letter is sent to both the beneficiary and the provider notifying them of the providers 
excluded status.  The same is true for some emergency services furnished by excluded 
providers.  Claims for such services or services provided in geographic areas for which the 
exclusion has been waived are paid with no notification. 
METHODOLOGY 
The original scope of this inspection included all OIG excluded persons but ultimately 
included only physicians who had an identifiable UPIN or Social Security number.  Our 
6 
OIG Excluded Physicians  OEI-07-98-00380  ability to determine whether each provider received payment was severely limited due to a 
number of factors.  Managed care organizations do not submit claims for services 
rendered to Medicare beneficiaries.  Instead they are paid an amount based on the number 
of beneficiaries in their program.  Therefore, we were unable to determine if any OIG 
excluded provider rendered services to a beneficiary in a managed care setting.  Also, 
nurses and nurses aides, which make up the majority of the excluded providers in 1997, 
cannot submit their own claims.  We were therefore unable to determine whether any of 
these types of providers may have received payment for services to Medicare beneficiaries. 
We did attempt to identify excluded providers who received payment from an organization 
with a Medicare contract by requesting income information from the Social Security 
Administration.  Our request was denied and we were therefore unable to make such a 
determination. 
We obtained cumulative exclusion data through 1997 from the OIG Office of 
Investigations (OI).  From this data we chose those providers excluded for all of 1997. 
That is, to be included in the study, a physician must have been excluded from Medicare 
prior to January 1, 1997 and had not applied for reinstatement through 
December 31, 1997.  This resulted in a data file of more than 5,000 providers, the 
majority being individuals not required to have UPINs (i.e., nurses, nurses aides).  In some 
instances we were unable to determine whether a provider was a physician and therefore 
required to have a UPIN.  Also, the data records for some providers in the file were 
missing UPINs and, as an alternative, we used their Social Security numbers, if available, 
to obtain that number.  The final list included 1,594 excluded physicians with UPINs or for 
which a Social Security number and UPIN could be identified. 
We matched this list against the 1997 Physician Summary File which shows total dollars 
paid by Medicare for each active or inactive UPIN during the year.  For each matched 
physician, we obtained information on each line item from the National Claims History 
File.  Based upon the match, we contacted each Medicare carrier that made any payment 
to an excluded physician.  Contacts included those departments whose responsibility it 
was to enroll physicians as well as those whose responsibility it was to deny payment.  We 
determined the basis for the payment and the carriers awareness of the physicians 
excluded status, and discussed the processes used by that carrier to prevent payment from 
being made.  Based upon these contacts we calculated an overpayment amount. 
We also conducted interviews with the appropriate staff at 27 carriers to determine the 
general usefulness and timeliness of exclusion data.  We questioned the carriers on their 
source of exclusion data, as well as the timeliness, completeness, and usefulness of the 
exclusion data. 
We conducted this inspection in accordance with the Quality Standards for Inspections 
issued by the Presidents Council on Integrity and Efficiency. 
7 
OIG Excluded Physicians  OEI-07-98-00380  F I N D I N G S  
Few payments were made to excluded physicians in fee-for-
service Medicare 
We identified a relatively small number of excluded physicians where payment had been 
made.  These fall into the three categories of proper payments, questionable payments, and 
payments which were improperly made to the excluded physician.  Overall we found that 
59 physicians received payments for providing services to Medicare beneficiaries. 
Most payments made to excluded physicians were proper 
While excluded, 28 physicians were correctly paid because services were rendered for 
emergency services (those services provided in a location other than a hospital setting), 
unassigned first claim services, or services rendered as a result of a waiver being granted 
for medically underserved areas.  Appendix A provides a detailed breakdown of these 
excluded physicians and the basis for payment. 
Some payments were questionable 
Payments for claims containing an excluded physicians UPIN were made to 3 group 
practices in the amount of $4,529.  These claims were paid based on the Provider 
Identification Number of a non-excluded physician; however, the claims also contained the 
UPIN of an excluded physician.  In 9 cases carriers paid claims amounting to $86,115 to 
non-excluded physicians who were not in group practices.  In our review of these cases, 
we identified 8 excluded physicians whose UPIN was included on the claim forms.  The 
ninth case involved one of these physicians who was paid by two different carriers.  These 
carriers systems edits were not designed to detect the UPIN, but only the Provider 
Identification Number.  The fact that these UPINs did not trigger a review by the carriers 
indicates a vulnerability in the review process.  We were unable to determine why the 
UPIN of these excluded physicians were on the claims. 
A small number of improper payments were made to excluded physicians 
Out of 1,594 OIG excluded physicians who have UPINs in a fee-for-service setting, we 
found improper payments to 21 physicians, totaling $35,833.  These payments were either 
paid in error or to a physician who submitted a new application and was improperly 
assigned a new Provider Identification Number.  Also, in one instance, the physician was 
excluded and then died.  When this occurred, the death date overrode the exclusion date in 
the carriers claim payment system thereby allowing the physicians office or estate to be 
paid. 
8 
OIG Excluded Physicians  OEI-07-98-00380  Improper payments were made mostly as the result of 
human error 
Of the 27 carriers in existence in 1997, 13 made improper payments to OIG excluded 
physicians.  Nine carriers made these payments due to employee processing errors.  Two 
of these carriers later recovered them.  Other payments were made when excluded 
physicians submitted new applications for new Provider Identification Numbers, and one 
improper payment was due to a system error.  The death date overrode the exclusion date 
in the carriers claim payment system thereby allowing the physician to be paid. 
Carrier staff raise some concerns regarding exclusion data 
Although relatively few payments were made to physicians who had been excluded, staff 
within the carrier who are responsible for the processing of these actions identified some 
problems associated with exclusion data that make it difficult to identify and deny payment 
to excluded providers. 
Timeliness 
According to HCFAs instructions to carriers, a formal listing (Publication 69) containing 
exclusion and reinstatement/withdrawal actions taken is distributed to the carrier on a 
monthly basis.  The carrier is instructed to use the information contained in this listing to 
determine whether a provider is eligible for payment and to ensure that sanctioned 
providers are not being inappropriately paid.  Carriers are responsible for ensuring that 
no payments are made to excluded physicians for services after the effective date of the 
sanction. 
Staff from eight other carriers indicated that although they received updates monthly, 
there was a lag time between the exclusion date and their notification of that exclusion. 
Also, staff from four of these carriers noted that timeliness of the monthly updates had 
improved in the months prior to our inquiry.  Staff implementing exclusions from one 
carrier stated that they did not receive information on a monthly basis. 
Completeness And Reliability 
It is important that carrier staff have full information to identify the excluded person. 

They report that the monthly information provided is not always useful to them.  Social

Security numbers, birth dates, and UPINs may be missing, making proper identification

difficult.  In one instance, a provider married, changed her name, and re-enrolled under her

new name.  Because her Social Security number was not included in the exclusion data

and her background was not checked, she was improperly paid for services provided 

9 
OIG Excluded Physicians  OEI-07-98-00380  to Medicare beneficiaries.  It is noted that carriers were not able to require Social Security 
numbers on enrollment forms prior to September 1999. 
We were told by such carrier staff that they do not rely exclusively on HCFAs Publication 
69 monthly update listing.  They obtain exclusion information from other sources as well: 
the OIGs web site of excluded providers; General Services Administrations web site 
covering all debarred individuals; letters from the OIG (discontinued after January 1, 
1998); and letters from State licensure boards.  Although these sources are useful, they are 
not necessarily identical. 
10 
OIG Excluded Physicians  OEI-07-98-00380  C O N C L U S I O N  
Our match of exclusion data to HCFA payments did not include all OIG excluded providers,  only 
physicians in the fee-for-service setting where all appropriate data is available.  For this particular 
group the exclusion system seems to work well.  Even there, however, it is not perfect.  The 
problems, while not serious, need to be solved.  HCFA is responsible for sending notice of 
exclusions to the carriers.  It states that as of January 1999, it has have implemented protocols for 
sending out exclusion data on a monthly basis in electronic format.  Medicare carriers now need 
to ensure that their staff who are responsible for processing the exclusions receive this information 
timely and take appropriate action on it.  Meanwhile, it is important that the OIG, HCFA, and 
Medicare contractors work in concert to make further improvements to the system to prevent 
payments to excluded physicians. 
It is also worth noting that the limitations and difficulties we found in our efforts to match 
exclusion data with health care providers working in the medical field who do not have UPINs, or 
who may provide services in a managed care setting, is a cause of concern. 
AGENCY COMMENTS 
We solicited and received comments on our draft report from HCFA, which agreed with our 
findings and recommendations.  HCFA also expressed a willingness to work with the OIG to 
further strengthen the processes of notifying Medicare contractors of excluded individuals and 
effecting their exclusion from Federal programs.  The full text of HCFAs comments are included 
in Appendix B. 
11 
OIG Excluded Physicians  OEI-07-98-00380  APPENDIX A 
Reasons For Payments

NUMBER OF  AMOUNT OF 
TYPE OF PAYMENT  PHYSICIANS  PAYMENT 
Improper Payments: 
Death Date Overrode Exclusion Date  1  $27.50 
Claims Paid In Error  14  $17,775.28 
Physician Submitted Application For And 
Was Assigned A New UPIN  4  $16,679.24 
Claims Paid And Later Recovered  2  $1,351.47 
Total Improper Payments  21  $ 35,833.49 
Questionable Payments: 
Excluded UPIN Included On Non-
Excluded Physicians Claim For Payment  9  $86,115.62 
Payments To A Group Practice  3  $4,529.37 
Carrier Claims No Payment Made  1  $9.05 
Total Questionable Payments  13  $90,654.04 
Proper Payments: 
Unassigned First Claim/Emergency  16  $12,418.58 
Recycled UPIN - Payments Not Received 
By An Excluded Physician  5  $3,751.01 
Sanction Waived For Underserved Area  5  $124,716.26 
The UPIN Does Not Belong To The 
Excluded Physician, Therefore No 
Improper Payments Were Made  6  $70,478.28 
Total Proper Payments  32  $ 211,364.13 
TOTAL PAYMENTS  59*  $337,851.66 
*Five physicians received payment from more than one carrier and payments made to two physicians fall 
into two separate categories. 
12 
OIG Excluded Physicians  OEI-07-98-00380  APPENDIX B 
Agency Comments

13 
OIG Excluded Physicians  OEI-07-98-00380  14 
OIG Excluded Physicians  OEI-07-98-00380