Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

JUNE GIBBS BROWN 

Inspector General 

AUGUST 2000 

OEI-07-98-00380 

MEDICARE PAYMENTS TO 

OIG EXCLUDED PHYSICIANS 
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 

Michael Presley Barrett, Project Leader

Tricia Fields, Program Analyst

Perry Seaton, Team Leader

HEADQUARTERS 

Jennifer Antico, Program Specialist

Barbara Tedesco, Mathematical Statistician

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/ 
EXECUTIVE SUMMARY 

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-forservice 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. 

OIG Excluded Physicians 1 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. 

OIG Excluded Physicians 2 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 HCFA’s comments are included 

in Appendix B. 

OIG Excluded Physicians 3 OEI-07-98-00380 
TABLE OF CONTENTS 

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

OIG Excluded Physicians 4 OEI-07-98-00380 
INTRODUCTION 

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 sanction’s 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. 

OIG Excluded Physicians 5 OEI-07-98-00380 
According to HCFA’s 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 HCFA’s 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 provider’s good standing in that State. 

When a monthly exclusion update is received, a search for the provider is made on the 

carrier’s 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 provider’s 

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 

OIG Excluded Physicians 6 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 carrier’s awareness of the physician’s 

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 President’s Council on Integrity and Efficiency. 

OIG Excluded Physicians 7 OEI-07-98-00380 
FINDINGS 

Few payments were made to excluded physicians in fee-forservice 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 physician’s 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 carrier’s claim payment system thereby allowing the physician’s office or estate to be 

paid. 

OIG Excluded Physicians 8 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 carrier’s 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 HCFA’s 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 

OIG Excluded Physicians 9 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 HCFA’s Publication 

69 monthly update listing. They obtain exclusion information from other sources as well: 

the OIG’s web site of excluded providers; General Services Administration’s 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. 

OIG Excluded Physicians 10 OEI-07-98-00380 
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 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 HCFA’s comments are included 

in Appendix B. 

OIG Excluded Physicians 11 OEI-07-98-00380 
APPENDIX A 

Reasons For Payments

TYPE OF PAYMENT PHYSICIANS 

NUMBER OF 

PAYMENT 

AMOUNT OF 

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 NonExcluded Physician’s 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. 

OIG Excluded Physicians 12 OEI-07-98-00380 
APPENDIX B 

Agency Comments

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