Source: https://www.exclusionscreening.com/tag/oig/
Timestamp: 2019-07-22 11:37:42
Document Index: 415218242

Matched Legal Cases: ['§ 1128', '§ 1320', '§ 1320', '§ 1320', '§ 1320', '§1003', '§1003', '§1003', '§ 84', '§ 1347', '§ 1028', '§ 1516', '§ 1518', '§ 1320', '§ 3729', '§ 3729', '§ 3729', '§ 1320']

OIG Archives - Exclusion Screening
Personal Care Service Aides and Attendants Excluded in 2017
(January 22, 2018): With 2017 behind us, it can be quite helpful to review the Medicare “exclusion” actions taken by the Department of Health and Human Services, Office of Inspector General (HHS-OIG) to gauge the level of regulatory exclusion risk presented by aides and attendants working for personal care agencies around the country. As a review of these actions will show, personal care services aides and attendants were among the most frequent type of health care provider excluded from participating in Federal health care benefits program by HHS-OIG during calendar year 2017.
It is therefore essential that owners of personal care agencies take affirmative steps to ensure that they have robust, effective systems in prevent excluded individuals from being hired or otherwise engaged to care for Medicaid beneficiaries. To accomplish this, agencies must screen their employees, vendors or contractors against all Federal and State exclusion lists every 30 days. An overview of the 2017 exclusion actions taken against personal care aides and attendants is set out below.
The “exclusion” of individuals or entities from participation in Federally-funded programs is covered under § 1128 of the Social Security Act. When an individual or entity is excluded from participation, the excluded party is essentially barred from Federal health benefits programs. This makes them untouchable by almost any healthcare related entity. With the exception of losing one’s professional license (for instance, if you are a licensed physician, nurse or pharmacist), being excluded is the most severe administrative sanction that can be taken against an individual or entity. Not only is an excluded party barred from participating in government health benefits programs, he / she cannot even work for a party that participates in one or more government health benefits programs.
II. Overview of Personal Care Service Aides and Attendants “Excluded” During 2017”
There are a number of mandatory and permissive authorities upon which HHS-OIG can base an exclusion action. Depending on the reason for exclusion, an individual or entity can be excluded for an undetermined minimum period up to a permanent exclusion from participating in Federal health benefits programs. During 2017, a number of personal care aides and attendants were placed on HHS-OIG’s exclusion list. The reasons for exclusion were primarily grouped into the categories for exclusion described below:
42 U.S.C. § 1320a-7(a)(1): Conviction of program-related crimes 71.73% of all exclusions against personal care providers. Personal care providers were excluded under this mandatory exclusion statute more than any other type of exclusion. For reference only 40.13% of persons excluded across all areas of medical practice areas were excluded under this variety of exclusion. Of the cases reviewed, the personal care aides excluded under this statutory basis were most often charged with theft or billing for services not rendered. For example, in one of the cases reviewed, a Virginia personal care attendant plead guilty to defrauding Medicaid. Over a four year span the attendant was alleged to have been billing Medicaid while out working at a part time job. The attendant in this case supposedly defrauded Medicaid thousands of dollars. Since the individual was excluded under one of the “mandatory” statutory bases, the personal care attendant was excluded for a minimum of 5 years. This type of case comprised 71.73% of all personal care exclusions in 2017.
42 U.S.C. § 1320a-7(b)(5): Exclusion or suspension under federal or state health care program 18.06% of all exclusions against personal care providers. Last year, HHS-OIG cited this statutory basis when excluding 18.06% of the personal care aides and attendants from participating in Federal health benefit programs. In comparison, this statutory basis was only cited in 3.17% of the universe of 2017 exclusions.
42 U.S.C. § 1320a-7(a)(3): Felony conviction relating to health care fraud 1.83% of all exclusions against personal care providers. In 2017 1.83% of excluded personal care providers were excluded under this statute which is much smaller than the 7.59% rate of total.
42 U.S.C. § 1320a-7(a)(4): Felony conviction relating to controlled substance 26% of all exclusions against personal care providers. This category of exclusion is the rarest for personal care at .26% while it represents 5.97% of total healthcare exclusions. It generally describes highly overt incidents in which a provider was directly involved with the illegal acquisition or sale of controlled substances. Persons excluded under this statute are excluded for drug related crimes and generally including conspiracy, direct sale of controlled substances, or other means of improperly handling controlled substances.
III. Are Your Agency’s Screening Practices Exposing You to Civil Monetary Penalties?
When considering your affirmative obligation to “screen” employees, contractors, vendors and other eligible parties against Federal and State exclusion lists, it is important to keep in mind that the government has been “excluding” physicians and other individuals and entities convicted from program related crimes from participating in the Medicare and Medicaid programs for more than 30 years.[1] With the subsequent passage of the Civil Monetary Penalties Law in 1981, HHS-OIG received statutory authorization to impose civil monetary penalties, issue assessments and pursue program exclusions actions against individuals and entities that submit false, fraudulent and / or improper claims for Medicare or Medicaid payment.[2]
Simply speaking, an excluded person (or an organization employing an excluded person) is in violation of the exclusion rules if the excluded person furnishes to Federally-funded health care program beneficiaries items or services for which Federal health care program payment is then sought. In the case of Medicaid-eligible personal care services, since the Medicaid is funded, in part, by the Federal government, the program qualifies as a Federal health care program.
You may face severe penalties if your organization employs or contracts with an excluded individual or entity and subsequently bills for tainted services provided to Medicaid beneficiaries. For example, in 2017,[3] under 42 C.F.R. §1003.210(a)(1), the civil monetary penalty that may be imposed against a health care provider or supplier for ordering or prescribing medical or other item or service during a period in which the person was excluded was $11,052 per violation.
Notably, the penalties that can be assessed by HHS-OIG if an organization is found to have improperly employed or contracted with an excluded individual party or individual are substantially more severe if the organization is a Medicare Advantage Organization or an HMO. Under 42 C.F.R. §1003.410, the penalty faced by a Medicare Advantage organization in 2017 was $37,396 per violation. Similarly, under 42 C.F.R. §1003.410, the penalty faced by an HMO was $48,114 per violation.
IV. What Steps Should Your Personal Care Services Agency Take to Limit its Level of Risk?
From a risk standpoint, it isn’t sufficient to merely include a question in your employment application asking applicants if they are currently (or have ever been) excluded from participation in a Federal or State health benefits program OR been debarred from a Federal program. Even the most detailed applications for employment can prove useless if your personal care services agency’s due diligence efforts are ineffective. People lie. Sorry, that’s just how it is. A 2017 survey by conducted by HireRight found that 85% of job applicants lied or misrepresented one of more facts on their resumes or job application forms during screening. As HireRight wrote:
“Eighty five percent of survey respondents uncovered a lie or misrepresentation on a candidate’s resume or job application during the screening process – up from 66% five years ago.”
So what is the answer? The ONLY way to reduce your level of regulatory risk with respect to the accidental or unknowing employment or engagement of an individual or contracting entity is to make sure that all Federal and State exclusion databases are screened every 30 days.
Government oversight of your agency’s operations will only increase in the future. As we have seen in the case of exclusions enforcement, over the last three decades, the government’s efforts focused on the improper provision of care and / or submission of claims by excluded parties has risen each year. Today, thirty-eight states currently maintain a state exclusion database of individuals and entities that have been excluded from participating in Medicaid and other Federally-funded health benefits programs. The number of states maintaining Medicaid exclusion databases varies from year to year, but is steadily increasing. We anticipate that within the next five years, almost all states will have implemented a Medicaid exclusion database. Unfortunately, there isn’t a government-sponsored site that consolidates the 40+ databases you need to be checking on a monthly basis. Therefore, we strongly recommend that you utilize the services of an organization such as www.exclusionscreening.com. Their services are inexpensive yet comprehensive.
The monthly exclusion screening of your employees, contractors and vendors is an important component of your Compliance Program. In fact, it is likely one of the least expensive steps you can take TODAY to significantly reduce your level of regulatory risk. We recommend you contact the folks at Exclusion Screening to obtain a complimentary assessment of your organization’s needs.
Robert W. Liles, J.D., M.B.A., M.S., serves as Managing Partner at Liles Parker, PLLC. Liles Parker is a health law firm representing personal care agencies and other health care providers around the country in connection with Medicare, Medicaid and private payor audits. For a complimentary consultation, give Robert a call at: (202) 298-8750.
[1] The Medicare-Medicaid Anti-Fraud and Abuse Amendments, Public Law 95-142 (now codified at section 1128 of the Social Security Act) was enacted into law in 1977.
[2] This legislation was followed four years later with the passage of the Civil Monetary Penalties Law (CMPL), Public Law 97-35 (codified at section 1128A of the Act). This legislation provided HHS-OIG with the authority to pursue a range of administrative sanctions, up to and including exclusion, against individuals and entities found to have submitted false, fraudulent or improper claims to the government for payment.
[3] Under the Federal Civil Penalties Inflation Adjustment Act Improvement Act of 2015, HHS is required to make annual inflation related increases to its CMP regulations. We do not anticipate these updated regulations to be issued for 2018 until February or later of this year.
Pain Management Prescribing Practices and Audits
(August 16, 2017): Earlier this summer, the U.S. Department of Justice (DOJ) executed its most extensive “health care fraud takedown” to date, initially arresting 412 licensed healthcare providers, doctors, and nurses alleged to have engaged in fraudulent conduct. As Attorney General Jeff Sessions stated at that time, “We are sending a clear message to criminals across this country: We will find you. We will bring you to justice. And you will pay a very high price for what you have done.” Of the 412 individuals arrested, approximately 120 of the defendants, including doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics. The charges aggressively targeted pain management providers billing Medicare, Medicaid, and TRICARE for medically unnecessary prescription drugs and compounded medications that often were never even purchased and / or distributed to beneficiaries. Many of the charges brought against pain management professionals have alleged that these individuals have contributed to the nation’s current opioid epidemic through the unlawful distribution of opioids and other prescription narcotics.
I. Pain Management Providers Around the Country are Being Targeted by DOJ:
To be clear, there is, in fact, a significant problem with prescription opioid abuse and diversion. In the first six months of 2017, there have been a number of federal enforcement cases brought against pain management physicians, practices and clinics for a wide variety of opioid-related violations. Several of these include:
February 2017: In this Pennsylvania case, a pain management physician pleaded guilty to selling prescriptions for controlled substances in exchange for cash payments. The government further alleged that many of the customers who went to the clinic were drug dealers or addicts who sold the medications they were prescribed. It was further alleged that neither the defendant nor the other pain management professionals charged in the case conducted medical or mental health examinations as required by law. The government alleged that during the period that this conspiracy took place, the defendant physician illegally sold over $5 million worth of controlled substances.
March 2017: Two Michigan physicians providing care to pain management patients were found guilty by a jury for allegedly running a “pill mill” supplying narcotics to drug-seeking individuals. More specifically, the government argued that the evidence showed that the physicians wrote prescriptions for Schedule II narcotics to individuals outside of the course of professional medical practice and for no legitimate purpose. The government further claimed that the clinic’s physicians prescribed over 1.5 million oxycodone pills and charged customers $250 cash for a 30-day supply of narcotics.
April 2017: In this Louisiana case, a physician and former co-owner of a pain management practice pleaded guilty to several criminal counts. The physician was alleged to have run a “pill mill” where he prescribed controlled substances to drug abusers and seekers for a flat fee, even though there no legitimate medical purpose for the prescriptions.
May 2017: In this Missouri case, a medical resident pleaded guilty to writing over 70 false prescriptions. The government reported that the defendant wrote opioid prescriptions using the names of six separate persons, despite the fact that he did not have a physician-patient relationship with any of them.
June 2017: In this New York case, a criminal complaint was unsealed against a family practice physician with no specialized training in pain management, who is alleged to have written more than 14,000 prescriptions, totaling more than 2.2 million oxycodone pills, between approximately 2012 and 2017. The government has alleged that thousands of illegal prescriptions were written that did not have a legitimate medical purpose.
July 2017: This Tennessee-based pain management practice settled False Claims Act violations for $312,000. The pain practice was alleged to have caused the submission of false claims to Medicare and TennCare for medically unnecessary urine drug tests. The settlement also resolves allegations that the [pain practice] caused the submission of false claims to Medicare and TennCare for non-Food & Drug Administration. . . approved pharmaceuticals. . . “The United States’ investigation was initiated after extensive data analysis identified [the practice] as a potential outlier in the provision of urine drug testing to Medicare patients.”
As you will notice, the standard that DOJ repeatedly cites is that a prescription is illegal if it has no “legitimate medical purpose” and / or is outside the “usual course of his professional practice.” From a practical standpoint, if your prescribing practices fall into one of these categories, DOJ is likely to argue that your practices are below the applicable standard of care and are indicative of a crime. Typical statutory offenses charged in criminal pain management diversion and / or trafficking cases include:
Drug Trafficking (21 U.S.C. §§ 84l). Typically charged when alleging that a party knowingly and intentionally, prescribed controlled substances, not for a legitimate medical purpose and not in the usual course of professional practice.
Health Care Fraud (18 U.S.C. § 1347). It is unlawful for any person to knowingly: (1) defraud any health care benefit program; or (2) obtain by false pretenses any money or property owned or under the control of a health care benefit program. Any person convicted under this statute could be fined and/or imprisoned for a maximum of 10 years. If the offense resulted in serious bodily injury, then the eligible term of imprisonment is increased to 20 years. If the offense resulted in death, then the maximum term of imprisonment is increased to life.
Aggravated Identity Theft (18 U.S.C. § 1028A). Under this statute, whoever during and in relation to any felony enumerated in subsection (c) [predicate offense], . . . knowingly transfers, possesses, or uses without lawful authority a means of identification of another person, shall, in addition to the punishment provided for such [predicate offense], be sentenced to a term of imprisonment of 2 years. . .
Examples of the 60 predicate offenses include: 18 U.S.C. 1001 (relating to false statements or entries generally), 18 U.S.C. 1035 (relating to false statements relating to health care matters), 18 U.S.C. 1347 (relating to health care fraud) 18 U.S.C. 1343 (relating to wire fraud) 18 U.S.C. 1341 (relating to mail fraud)
Obstruction of a Federal Audit (18 U.S.C. § 1516). It is illegal to intentionally influence, or obstruct a federal auditor in the course of performing his or her official duties relating to any person or organization receiving more than of $100,000 from the federal government in any one-year period. The penalty for violating this section is the imposition of a fine and/or a maximum of five years imprisonment. A federal auditor is any person employed for the purpose of conducting an audit or quality assurance inspection on behalf of the federal government.
Obstruction of a Criminal Investigation into Health Care Offenses (18 U.S.C. § 1518). It is unlawful to prevent, obstruct, or delay the communication of information relating to a federal health care offense to a criminal investigator. Any person convicted for violating this statute could face a fine and / or up to five years imprisonment.
Prohibition Against Kickbacks (Anti-Kickback Statute) (42 U.S.C. § 1320a–7b(b)). The federal Anti-Kickback Statute makes it a crime to knowingly and willfully offer, pay, solicit, or receive remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to purposefully induce or reward referrals of items or services payable by a federal health care program. Simply put, it is against the law to pay or provide anything of value in an effort to induce referrals or business related to a federal health care program.
II. What is Behind the Current Crackdown on Improper Opioid Prescribing Practices?
The DOJ currently believes that these pain management medications are a large contributing factor to the ongoing opioid epidemic. The DOJ believes that opioid medications are being over prescribed and are not being used for the intended purposes, but are ending up on the streets for illegal sale and use. From 1999 to 2015, more than 183,000 patients died from overdoses related to prescription opioids with over 30,000 of those deaths occurring in 2015. Almost half of those deaths from 2015 being from prescription opioid overdose. With nearly 2 million Americans either abusing or dependent on opioids, the Center for Disease Control and Prevention (CDC) took significant steps last year to address the growing problem of opioid abuse in this country. In March 2016, the agency published its CDC Guideline for Prescribing Opioids for Chronic Pain (CDC Guideline). Since the issuance of the CDC Guideline, a growing number of states have either adopted this voluntary guidance or implemented similar restrictions on the prescribing practices of physicians, nurse practitioners and physician assistants in their respective states.
III. The Role of Medicare Part D:
Medicare Part D is an optional prescription drug program for Medicare beneficiaries. As of 2016 it covered more than 40 million individuals. While Medicare Part D can be very beneficial when it comes to helping its beneficiaries handle their pain management it can also easily be taken advantage of. While Medicare part D was aimed at providing medication for beneficiaries, it has substantially contributed to the opioid crisis through over prescription as well as the redirection of prescriptions for unlawful and abusive purposes, such as recreational use and the sale of opioids.
The CDC recently posted guidelines for medical prescription providers on how to prescribe opioids to patients with chronic pain. The CDC cautions providers on prescribing patients more than 90mg or more of morphine per day, any higher dosage and the patient becomes at risk for overdose or fatality. A result of over prescription of opioids was one third of all beneficiaries receiving at least one prescription opioid through Medicare Part D in 2016. In total, approximately 14 and a half million people received opioid prescriptions, out of a total of 43.6 million Part D beneficiaries. These 14.4 million prescriptions totaled $4.1 billion for nearly 80 million prescriptions.
Several states such as Alabama and Mississippi have significantly higher proportions of opioid prescriptions for Medicare Part B beneficiaries, 46% and 45% respectively. Approximately 10% of Medicare Part B recipients received one or more opioids on a regular basis, with 5 million beneficiaries receiving opioids for three months or more in 2016. More than half a million beneficiaries received high amounts of opioids through Part D in 2016. All of these beneficiaries received a morphine equivalent dose (MED) of greater than 120mg per day for at least 3 months[1].
To be clear, the government’s interest in opioid and controlled substance prescribing practices isn’t new. A cursory look at the list of administrative sanctions taken by almost any state’s Medical Board and / or Dental Board will confirm that pain medications have been, and will likely continue to be, a significant problem. Unfortunately, the number of opioid-related complaint referrals has risen over the practices. Nevertheless, prescribing practices of Federal and state regulators are carefully monitoring the opioid prescribing practices of qualified physicians, nurse practitioners, physician assistants, podiatrists and dentists in their respective jurisdiction. Despite the fact that the CDC March 2016 guidance is “voluntary,” we recommend that pain management professionals review their prescribing practices and verify whether their particular practices are consistent with the recommendations set out in the CDC’s March 2016 guidance. Additionally, you should ensure that your opioid prescribing practices also comply with any requirements established by your state legislature and any state licensing authorities.
[1] United States of America. U.S. Department of Health & Human Services. Office of Inspector General. HHS OIG Data Brief OEI-02-17-00250.
The New “Seventh Element” of Compliance: Screening and Evaluating Employee Suitability!
The recently issued Resource Guide for Measuring Compliance Program Effectiveness, reconfigures the traditional formulation of the “Seven Elements of an Effective Compliance Program by making the “Screening and Evaluation of Employees, Physicians, Vendors and other Agents” an element unto itself – or the new “Seventh Element of Compliance!” The Resource Guide, a product of roundtable discussions by staff members of the Office of Inspector General and compliance professionals and prepared under the auspices of the Health Care Compliance Association (HCCA), serves to once again underscore the critical role of exclusion screening and background checks in compliance
The Importance of the Hiring Process in Health Care
Employee suitability is critically important in healthcare because most of a provider’s operational costs, and almost all of his risks, are directly related to his employees. Whereas most industries are trying to respond to a wide range of risks over which they have little or no forewarning or control (for example, the impact of weather, the availability of supplies or critical equipment, or the failure of equipment they neither own or operate), the majority of risks to health care providers are mostly known and directly related to employee conduct or misconduct (medical malpractice, patient safety, financial fraud, drug diversion, regulatory violations, data and record security, etc.)
The hiring process in healthcare also important because of the value that employees can provide for an organization. “Good” employees enhance the value of organizations; they perceive potential risk and report or fix it, they provide important modeling for new employees, they care for patients in a way that engenders loyalty, they pitch-in, they are honest and show up for work! And so on. Thus, while employees are often the source of loss and cost – they can also represent a sustainable resource that gives an organization a competitive advantage. Viewed in this context, the importance of the hiring process and determining the suitability of employees to a provider’s compliance program becomes clearer still.
Exclusion Screening and Background Checks
An important aspect of determining an applicants overall suitability is “screening” them with Federal and State Exclusion and Sanction Lists. The Resource Guide holds forth that screening should be accomplished upon hire and monthly thereafter, and the importance of thorough screening cannot be overstated as most exclusions are imposed as a result of conduct connected to fraud, patient abuse or neglect, or the sale or abuse of drugs or fraud. Further, regardless of “why” an OIG Exclusion is imposed, persons or entities excluded from Federal Health Care Programs are deemed as a matter of administrative law to “pose unacceptable risks to patient safety and/or to the financial integrity of government programs.”
Exclusion Violation Enforcement
Federal Health Care Programs will not pay for any items or services furnished or provided, directly or indirectly, by an excluded individual or entity. This broad “payment prohibition,” which can extend even to volunteers, renders anyone who is excluded “radioactive“ when it comes to health care. Any claim connected to an excluded person is a potential overpayments, employing or contracting with an excluded person can result in the imposition of civil money penalties, and there have even been False Claims Act cases brought against providers that have used excluded persons.
The OIG signaled that enforcement of exclusion violation was going to be an agency priority in 2013 when it issued its “Updated Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs” and revised the “Self-Disclosure Protocol.” Since that time, it has created a special unit tasked with exclusion enforcement as a priority and sought to expand its exclusion authority on several occasions.
The risks and benefits associated with the hiring process are significant; a fact emphasized all the more by the addition of “Screening and Evaluation of Employees, Physicians, Vendors and other Agents” as the new 7th Element for Evaluating the Effectiveness of Compliance Plans. Providers are urged to do thorough screening as part of their hiring process and to take all possible actions toward ensuring a positive work force, and to avail themselves of the assistance of reputable vendors to assist them in this process.
Paul Weidenfeld is a long time health care lawyer who has specialized in litigation arising out or, or relating to healthcare fraud and the False Claims Act. A former federal prosecutor and National Health Care Fraud Coordinator for the Department of Justice, Paul is a frequent speaker who has earned recognition both as a Federal Prosecutor and as a member of the private bar. Paul is also a co-founder of Exclusion Screening, LLC, a company that offers providers a simple, cost effective way to meet their exclusion screening obligations.
What Medical Practices Need to Know About an OIG Exclusion
Who Is to Blame for Gaps in OIG and State Exclusion Lists? What Is the Impact on Providers?
The failure to report excludable offenses by state Medicaid offices and licensing boards is a longstanding issue for the OIG. Recent OIG audits and reports have confirmed these state failures to report. For example, an OIG study released in August found that over 12% of terminated providers were able to continue participating in other state Medicaid programs because states were not sharing terminated provider information. In addition, two recent Medicaid Fraud Control Unit (MFCU) audits discovered that they routinely failed to timely report conviction information to the OIG and sometimes did not report them at all.[1] Reporting failures lead to gaps in the OIG Exclusion List (LEIE) because the OIG cannot exclude an individual if the OIG is never informed of the state’s conviction, termination, or suspension of providers. Such failures to report are important because the information that would have been reported can lead to exclusion violations, which are listed on the LEIE. But, state compliance failures are not the only cause of gaps in OIG and State exclusion lists – as we discuss, no matter who is at fault, the provider may pay for anyone’s mistake.
The OIG Exclusion List Has Limited Search Capabilities
One important reason providers should not rely on screening only the LEIE is that its search function is extremely narrow. If an excluded individual uses a different name, such as a middle or maiden name, an LEIE search using the person’s first and last names my not produce any results.[2] For example, J. A.[3] was excluded from participation on Georgia’s state exclusion list in August 2015. However, a search for “J.A.” on the LEIE currently produces zero results.
Conversely, when we searched J.A. on SAFERTM, our proprietary exclusion database, we not only found a match on the Georgia list (“J.A.”), but we also found a match on the LEIE and SAM databases for “R.J.A.”. Interestingly, “J.A.” has the same middle and last name as “R.J.A.,” they are both Georgia residents, and they were both excluded from participation in April 2015. Like many states, the identifying information on Georgia’s list is sparse. Nevertheless, it is extremely likely that R.J.A. and J.A. are the same person, which a provider would have missed if he only searched the LEIE for J.A.
Reported Cases May Not Be Picked Up by OIG
Florida’s Agency for Health Care Administration publishes monthly press releases which identify persons terminated from participation in Florida Medicaid. It expressly states that the exclusion information was “reported to the federal government for placement on the federal exclusion list,” and named providers appear on Florida’s Excluded Provider List. When we conducted a SAFERTM search for G.B., who was listed on the April 2015 memo as “terminated from participation,” the only two “hits” were from Florida’s state exclusion list.
However, an LEIE search for G.B. produced zero results.
One possible explanation for why G.B. fails to show up on the LEIE could be the administrative process of OIG actually reviewing the reason for the termination and then formally excluding G.B. Nevertheless, a provider who only screens the LEIE and employs or is considering employing G.B. would miss this exclusion.
OIG Just Misses Some Cases
K.B., a Registered Nurse (RN) with multistate licensure privileges, was placed on probation for substance abuse in February 2005. After testing positive for morphine, Iowa revoked her license and several other states revoked her multistate privileges. While the revocations were reported, the licensure revocation only resulted in K.B.’s exclusion from participation by California and the GSA-SAM in 2010. K.B. is not listed on the LEIE. This means that K.B. is unable to participate in any other state Medicaid program because under the ACA 6501, if you are terminated for cause from participation in one state, then you are terminated in all states, and K.B. is barred from contracting with the federal government. However, if a provider only screened the LEIE he would be completely unaware and could potentially face very hefty fines.
Clearly some information is getting lost or mixed up in the reporting pipeline between state Medicaid offices, MFCUs, and the OIG, and the lesson for providers is that merely screening the LEIE is not enough. The examples above demonstrate that human error, narrow search functions, and simply missed information all play a role in the gaps that exist between publication on state exclusion lists and the LEIE.
State Medicaid offices are responsible for compiling and reporting information about excluded providers. However, as demonstrated by the “J.A.” case, the probable human error of transposing names combined with the LEIE’s limited search capabilities could result in a provider employing an excluded person, even though he was properly screened against the LEIE. To avoid this, providers should screen against the LEIE, the GSA-SAM, and all available state lists monthly. Practices should also ensure they use wide search parameters (alternate spellings, full names, maiden names, etc.) when conducting searches or they should select a vendor, like Exclusion Screening, LLC, with a system designed to anticipate these issues.
Notwithstanding name discrepancies, some information just does not make it to the LEIE. As the “G.B.” example reveals, a practice may face considerable monetary fines because it failed to screen the Florida exclusion list and relied solely on the LEIE for exclusion information, and the OIG failed to add G.B.’s name to the LEIE. Similarly, a provider who considered employing “K.B.” would be totally unaware that she was excluded from participation unless the provider screened the GSA-SAM and/or the California exclusion list. Remember that ACA section 6501 states that when an individual or contractor is excluded in one state, he or she is excluded in all states. When a provider misses such state exclusion information, he or she could be liable for CMPs of $10,000 for each claim provided directly or indirectly by the excluded individual, an assessment of up to three times the total amount paid by the government, and potential false claims liability. Relying on the LEIE’s exclusion information without checking all other available state exclusion lists is a substantial monetary risk for a practice to take. If screening and verifying 40 state and federal exclusion lists each month is overly burdensome for your practice, contact Exclusion Screening, LLC today for a free assessment: 1 (800) 294-0952.
[1] MFCUs are supposed to send a referral letter to the OIG within 30 days of sentencing for the purpose of alerting the OIG about providers excluded from state programs, but the OIG found that in some cases this exclusion information was not referred to the OIG for over 100 days.
[2] We have even found that hyphenated names frustrate LEIE searches even where the actual names are used!
[3] Full names have been redacted for privacy.
Pennsylvania Judge Holds that CIA violations May Result in FCA Liability
In late July, a federal district court in Pennsylvania joined in the flurry of False Claims Act (FCA) decisions. These decisions further interpreted the ACA’s amendments to the law. The court in United States ex rel. Boise v. Cephalon, Inc. considered two important issues. The issues regarded when a party has an obligation to pay the government, and when a failure to do so could result in reverse false claims liability. Providers should be on high alert and ensure that they are in compliance with all requirements. This includes the requirement to screen employees monthly in order to avoid being OIG’s next false claims target.
The defendant in Cephalon failed to comply with its Corporate Integrity Agreement (CIA) and OIG sought repayment. OIG alleged that they failed to comply with the CIA, which caused reverse false claims and produced FCA liability.
Cephalon, a drug manufacturer, argued that it could have only had an obligation to pay penalties under the CIA if HHS-OIG actually demanded payment. The relator argued that Cephalon’s obligation to pay actually arose when it breached the CIA’s reporting requirements. The court disagreed with Cephalon and instead held for the relator. The court found that a CIA imposes contractual obligations through reporting requirements. Furthermore, a breach of these contractual obligations could cause a company to be liable for reverse false claims even if OIG had not yet demanded payment. Finally, the court elaborated that “specific contract remedies” like specific penalties create a “less contingent obligation to pay.”
The federal government is taking advantage of the new false claims recoupment tools made available to it through the ACA. If you are not screening your employees and contractors against state and federal exclusion lists, then now is the time to ensure your practice is complying with the law. Call Exclusion Screening, LLC for a free assessment of your needs and costs at 1-800- 294-0952.
Southern District of New York Provides Clarity on “Identifying” Overpayments
In early August of 2015, the Southern District of New York (SDNY) provided insight as to when the 60-day clock for returning an overpayment begins to run under the Patient Protection and Affordable Care Act of 2010 (ACA). This decision is particularly relevant to screening for exclusions because the government has started to penalize providers who submit claims for services provided directly or indirectly by an excluded individual or entity for the greater penalty of submitting a false claim. Simply stated, the government now views claims as legally false if an excluded person provided any part of that claim. This makes providers possibly liable pursuant to the false claims act.
The court’s additional clarity on when the 60-day clock begins to run for false claims act liability may be the OIG’s next tool in retrieving Federal dollars from those providers who fail to screen their employees or contractors monthly. Therefore, those providers could be in receipt of overpayments for monies received from services provided by excluded persons or entities.
I. Background – False Claims Act
The Fraud Enforcement and Recovery Act (FERA), enacted in 2009, amended the False Claims Act and added a “reverse false claims” provision. This reverse false claims provision imposes liability of $5,500 to $11,000 per false claim[1] on persons who “knowingly and improperly avoid[] or decrease[] an obligation to pay or transmit money or property to the Government.”[2] The term “knowingly” includes persons who have “actual knowledge of the information,” as well as those who “act in deliberate ignorance” or in “reckless disregard of the truth or falsity of the information.” The term “require[s] no proof of specific intent to defraud.”[3] In addition, FERA further clarified that an “obligation means an established duty, whether or not fixed, arising from an express or implied contractual, grantor-grantee, or licensor-licensee relationship, from a fee-based or similar relationship, from statute or regulation, or from the retention of any overpayment.”[4]
The ACA added additional clarification to the overpayment retention provision. Specifically, it required that a person who has received an overpayment must “report[] and return[]” the overpayment “by the later of (A) the date which is 60 days after the date on which the overpayment was identified; or (B) the date any corresponding cost report is due, if applicable.” An overpayment is defined as any monies “received or retained” under Medicare or Medicaid to which a person is not entitled.[5] Failure to repay an overpayment by the 60-day deadline constitutes a reverse false claim under the False Claims Act. However, Congress failed to define “identified” in the statute, which caused ambiguity about when the 60-day clock begins to run.
II. United States ex rel. Kane v. Healthfirst, Inc., et al.
The United States ex rel. Kane v. Healthfirst, Inc., et al., case arose after relator Robert Kane, a former Continuum employee, conducted an internal investigation of the company. The investigation revealed that 900 specific claims amounting to over $1 million may have been wrongly submitted and paid by Medicaid as a secondary payor.[6]
According to the Complaint, Continuum was questioned about a “small number of claims” that the Comptroller’s office concluded were improperly submitted for Medicaid reimbursement.[7] After several conversations, the parties discovered that the problem was related to a software glitch that caused certain claims to contain a code which automatically referred the claim for additional payment for covered services. Continuum was sent a corrective software patch by the software vendor that would ensure that Continuum would not improperly bill any other secondary payors.[8]
Once the software problem was identified in December 2010, Continuum asked Kane to determine which claims were improperly submitted due to the software malfunction.[9] After reviewing the claims, Kane sent an email containing a spreadsheet identifying over 900 claims dating back to May 2009 and totaling more than $1 million. All of these claims contained the problematic code that caused the billing error to Continuum’s Vice President for Patient Financial Services, Continuum’s Assistant Vice President for Revenue Cycle Operations- Systems, and other Continuum management. Kane’s email stated that further scrutiny was necessary to confirm his findings, but the Defendants alleged that he had identified a large portion of the claims that were incorrectly billed. Kane was fired four days after sending this email. According to the Complaint, Continuum did nothing with the alleged overpayments Kane identified except for reimbursing five of the 900 erroneously submitted claims.[10]
The Comptroller, however, continued to review Continuum’s billing and found more claims which it promptly brought to Continuum’s attention from March 2011 through February 2012.[11] Continuum reimbursed the claims identified by the Comptroller beginning in April 2013 until March 2013. Continuum never brought Kane’s research to the Comptroller’s attention and only repaid around 300 claims after the Government issued a Civil Investigative Demand in June 2012. Due to its “intentional and reckless”[12] delay in repaying the alleged overpayment more than 60 days after they were identified, the Government, through Relator Kane, alleged that Continuum is liable for reverse false claims. Therefore, Continuum was allegedly liable for treble damages plus an $11,000 penalty for each overpayment illegally retained more than 60 days after identification.[13]
III. SDNY Court Defines “Identifying” Overpayments
Continuum responded to these allegations by filing a Motion to Dismiss arguing that Kane’s email merely “provided notice of potential overpayments and did not identify actual overpayments so as to trigger the ACA’s sixty-day report and return clock.”[14] The term “identified” was left undefined by Congress in the text of the ACA, which gave rise to Continuum’s motion.
In its motion, Continuum contended that the court should adopt a definition of “identified” as “classified with certainty.” The Government responded that instead “an entity ‘has identified an overpayment’ when it ‘has determined, or should have determined through the exercise of reasonable diligence, that [it] has received an overpayment.’” The Government’s definition would essentially define “identified” as when “a person is put on notice that a certain claim may have been overpaid.”[15]
In an effort to ascertain the plain meaning of “identify,” the court consulted dictionary definitions, but it found that the wide range of definitions alone were not particularly helpful. Next, the court utilized canons of construction, reviewed the ACA’s legislative history, and considered the legislative purpose behind including a mandate to return overpayments within the ACA. The court found the legislative history particularly revealing and noted that Congress chose to adopt the Senate’s version of the bill which contained “identified” instead of the House Bill which employed the term “known.” After a thorough evaluation, the court concluded that “identified” should be defined as the moment “when a provider is put on notice of a potential overpayment, rather than when an overpayment is conclusively ascertained, [which] is compatible with the legislative history of the False Claims Act and FERA.”[16]
The court tempered its decision in stating that “the mere existence of an ‘obligation’ does not establish a violation of the False Claims Act.” Instead, the court held that a reverse false claim is only triggered when “an obligation is knowingly concealed or knowingly and improperly avoided or decreased.” Therefore, the court advised that prosecutorial discretion be employed to avoid filing enforcement actions against “well-intentioned providers working with reasonable haste to address overpayments” because this would be “inconsistent with the spirit of the law.”
This decision is significant because it is the first opinion interpreting the term “identify” as it is used in relation to the ACA’s 60-day overpayment reporting requirement. While it is only binding in the Southern District of New York, it will likely guide other court opinions as they arise.
Providers should be aware that they could be liable for overpayments 60 days after they are “put on notice of a potential overpayment.” Therefore, providers should act with “reasonable haste” in reviewing potential overpayments to demonstrate good faith compliance.
Finally, providers must continue to screen their employees and contractors against the Federal and state exclusion lists monthly. The Government has only recently begun to pursue excluded individuals for False Claims Act violations. The new interpretation of “identify” as being “on notice” could provide the Government with a brand new tactic to retrieve federal monies. One of the reasons we strongly advocate that providers check all federal and state exclusion lists monthly is to find potential exclusions and demonstrate maximum compliance before an exclusion problem arises.
Failing to screen thoroughly and verify potential matches each month is not a way to avoid liability. It is unlikely that OIG would excuse overpayment liability if a provider claimed he was not “on notice” about an employee’s excluded status if that provider failed to properly screen and verify employees. Further, if a provider has identified a potential match, then he must work diligently to verify this match and return any monies received for services provided by this employee if he is excluded because the initial identification date could potentially start the 60-day clock for false claims act liability. [17]
[1] Opinion and Order at 9 n.12, United States ex rel. Kane v. Healthfirst, Inc., et al., No. 11-2325 (S.D.N.Y Aug. 3, 2015).
[2] 31 U.S.C. § 3729(a)(1)(G) (2011).
[3] Id. § 3729(b)(1).
[4] Id. § 3729(b)(3) (emphasis added).
[5] 42 U.S.C. § 1320a-7k(d)(4)(B) (2010).
[6] Complaint-in-Intervention of the United States of America at 11, United States ex rel. Kane v. Healthfirst, Inc., et al., No. 11-2325 (S.D.N.Y. June 27, 2014).
[9] Id.at 11.
[12] Opinion and Order at 11, United States ex rel. Kane v. Healthfirst, Inc., et al., No. 11-2325 (S.D.N.Y Aug. 3, 2015).
[15] Id. (emphasis added).
[17] Exclusion Screening, LLC is not a law firm and does not provide legal advice. As such, this is not intended, and should not be taken, as legal advice. We strongly recommend that you seek the advice of counsel whenever decisions that may have legal consequences are made.
Medicaid Providers That Are Excluded or Terminated for Cause Often Continue to Participate in Other States According to a New OIG Audit
OIG Audit Findings
In a recently released audit, the OIG found that despite the ACA requirement that states terminate Medicaid providers already terminated in another state, 12% of providers already terminated for cause in 2011 in one state (295 out of a sample of 2,539) were still participating in other state Medicaid programs as of January of 2014! There is a lack of state to state coordination identified in both this audit and one issued last March, and a lack of state to Federal coordination identified in separate OIG audit reports. This strongly reinforces our suggestion that providers screen their employees, vendors and contractors on all available State Exclusion Registries in addition to the LEIE and the SAM!
Exclusion, Termination and the ACA
In practical terms, to implement section 6501 of the ACA, states must first find the providers who are terminated from federal healthcare programs. Then, states must identify whether any terminated providers are participating in their Medicaid program. Finally, they must take action to terminate the provider from its own Medicaid program.
According to the report, this is defeated by a general lack of coordination caused in large part by a lack of uniformity of terminology among not only the states, but in existing Federal and state databases. For instance, exclusion and termination are synonymous in many states, but they have distinctly different meanings for CMS. This is also true with such terms as suspension, disbarment, revocation and sanction. Furthermore, what constitutes “cause” in one state may not in another state. The audit also notes that some states have a basic misunderstanding about the relationship between licensure and exclusion or termination. Those states often conclude that if Medicaid providers have an active license from the relevant state board, the state Medicaid agency should defer to the judgment of that board and not terminate the providers for cause.
Principle OIG Recommendations
The OIG reiterated its recommendation from March 2014 that CMS require state Medicaid agencies to report all terminations for cause. The OIG found that a lack of a comprehensive data source of providers terminated for cause creates a challenge for state Medicaid agencies. It also recommended that CMS work with states to develop a uniform terminology, that CMS furnish guidance to state agencies that termination is not contingent on the provider’s active licensure status, and that it require states to enroll providers who participate in their managed care programs.
The Message to Medicaid Providers
This audit report stresses, once again, the importance of screening all state Exclusion databases as well as the LEIE and the SAM. This message reinforces two important ideas: 1) States do not reliably share their information either with other states or with the Feds; and 2) a significant percentage of excluded or terminated physicians, nurses and other employees will take advantage of this lack of coordination to their advantage and your disadvantage!
Exclusion Alert: Assistant Inspector General Tells Congress That Exclusion Violations Plague Part D
Assistant Inspector General Testifies before Congress
Ann Maxwell, the Assistant Inspector General for Evaluation and Inspections, recently testified before Congress. She argued that the Centers for Medicare and Medicaid Services (CMS) had not exercised “sufficient oversight of plan sponsors,” and “needed to strengthen its controls” in order to prevent payments for drugs “to providers excluded from Federal health care programs.” She further explained that “it is important that claims for drugs prescribed by excluded providers be denied to protect beneficiaries from inappropriate or even harmful services.” Maxwell appeared to lay much of the responsibility on CMS noting that the “OIG found that controls failed to prevent Part D payments for drugs prescribed by excluded providers,” resulting in exclusion violations. Also, she noted CMS lacked a “claims processing edit” that would reject prescriptions written by excluded providers.
Impact of Exclusion Violations on Medicare Part D
Maxwell’s testimony coincided with the release of an OIG Portfolio “Ensuring the Integrity of Medicare Part D,” OEI-03-15-0018. Though the portfolio also focused on other Part D program integrity and exclusion issues, OIG Exclusion Violations played a major role in both the testimony and the portfolio. Ms. Maxwell, echoing a finding in the portfolio, referenced two previous OIG studies dealing with this issue. In one study, the OIG found that plan sponsors paid “gross drug costs totaling $15 million over a 3-year period for prescriptions written by excluded providers.” (“Review of Excluded Providers in the Medicare Part D Program A-07-10-06004,” click here to read).
The OIG concluded that CMS failed to have adequate controls over either the payment process or its plan sponsors. Also, they concluded that the plan sponsors lacked proper controls over their payments. In order to reduce this fraud and abuse, the OIG recommended that CMS strengthen its controls in all areas in order to prevent payments to excluded providers to gain better accountability from program sponsors and to reduce risk to beneficiaries.
This appears to be another step forward since we have been chronicling the increasing interest and involvement of the OIG in the enforcement of exclusion regulations and exclusion violations. We have previously noted, for instance, the relatively new interest of the Office of Evaluations and Inspections in exclusion enforcement. So, it is not surprising that Maxwell testified on the issue or that her section is credited with having prepared the portfolio.
As always, readers must maintain caution and compliance. Also, be sure to screen your employees, vendors and contractors!
Click to know more about OIG Exclusion
Exclusion Screening of Contractors and Vendors
By now, providers should be aware that the Office of Inspector General (OIG) requires exclusion screening of contractors and vendors, in addition to employees, if they provide items or services that are payable by Federal health care programs. This article identifies the OIG’s guidance on the issue, explains the difficulties it poses, and concludes by suggesting a framework for applying the guidance to screening vendors and contractors.
OIG Guidance: An Emphasis on Patient Care – A Focus on Payment
The OIG states that its emphasis on screening vendors and contractors for exclusions regards “items or services integral to the provision of patient care.”2 This is sensible as many exclusions are the result of licensing issues and drug offenses which could result in a risk of harm to patients.
With that said, the OIG’s guidance focuses heavily on considering the nexus between vendor/contractor activities and any resulting claims. Providers are advised to review the “job category or contractual relationship” of each and every contractor and vendor. Then, if the provider determines that the vendor or contractor provide items or services payable “directly or indirectly, in whole or in part … by a Federal health care program,”3 the vendor or contractor should be screened for exclusions monthly.
The Breadth of the Guidance
The OIG guidance is so broad that it is difficult to apply in a meaningful way. For instance, Exclusion Screening, LLC is sometimes asked by providers who make claims that include facility fees or some other overhead component whether they are obligated to screen contractors or vendors of such basic services as garbage collection and utilities out of a concern that they could be considered to be payable “indirectly” and at least “in part” by Medicare. While it is hard to believe that the OIG expects providers to screen the city sanitation service, the question raises a valid point.
While the guidance contains a number of examples that describe potentially problematic conduct when furnished by an excluded individual, the OIG seems to emphasize the broad scope of the screening obligation instead of providing a better understanding of it. For instance, the preparation of a surgical tray by an excluded person (who may not be in the operating theatre) and the inputting of information into a computer by an excluded person (who probably would not have written the prescription or participated in making the claim) are both identified as potentially problematic conduct. The guidance further states that virtually any service (administrative, management, IT support, etc.), even volunteer services, can trigger Civil Monetary Penalties (CMPs) if an excluded person provides the service unless the service is “wholly unrelated to Federal Health Care Programs.”
A Possible Framework for Applying the OIG Guidance4
Screening decisions based solely on whether the item or service provided was “wholly unrelated” to claims (or, stated another way, could possibly have contributed in some way to a claim) fail to recognize the OIG’s stated emphasis on services integral to patient care. In addition, it may also take a provider down a path that leads toward screening every conceivable vendor or contractor, including the city sanitation service as discussed above. As an alternative to this rigid (and unrealistic) approach, Exclusion Screening, LLC suggests using a framework that considers both the potential impact to patient safety of the activity in question, as well as the relationship between the vendor or contractor and any claims made to, or paid by, Federal Health Care programs. This is a sensible and workable approach that is consistent with the OIG’s dual priorities of patient safety and fiscal responsibility.
The framework would create a continuum of sorts, with contractors or vendors most closely associated with both patient care and claims on one end (such as an agency nurse or a physical therapist), and the vendors and contractors who have nothing to do with care and are only incidentally connected to reimbursement on the other (like the city garbage collection service). The closer a vendor or contractor is to the end that encompasses both patient care and claims (i.e., the nurse provided by a staffing company), the more likely it will be that the person or entity should be screened. Conversely, as one moves along the continuum to the other end, the necessity of screening decreases.
Though this may be an imperfect system that does not create bright lines, it specifically identifies and considers the factors important to the OIG. The continuum also gives context and focus to a provider’s screening decisions. By way of example, if one substitutes a hazardous waste collector for the city sanitation service and uses the continuum analysis, one can immediately see that the important considerations are (1) the risk a hazardous waste removal company and its employees pose to patient safety, and (2) the nexus between the hazardous waste removal service and reimbursement for the claim. Finally, and perhaps most importantly, since the framework is premised on the OIG’s principle concerns, using a framework helps make provider screening decisions defensible and supportable in the event of an audit.
The OIG’s guidance on exclusion screening of vendors and contractors is so broad that providers are left to draw their own lines and make their own decisions regarding whether or not to screen a specific individual or entity. In drawing these lines and making these decisions, Exclusion Screening, LLC believes providers are best served if they use a framework that incorporates both patient safety and financial considerations. Such a framework helps providers by giving analytic context to their decisions, demonstrating their commitment to compliance, and, ultimately, making their actions all the more defensible if subjected to scrutiny.
For an in-depth discussion of which vendors and contractors need to be screened, listen to our on-demand webinar.
Paul Weidenfeld, Co-Founder and CEO of Exclusion Screening, LLC, is the author of this article. Contact Paul should you have any questions at: pweidenfeld@www.exclusionscreening.com or 1-800-294-0952.
1 Paul Weidenfeld is a co-founder of Exclusion Screening, LLC. A noted health care lawyer now in private practice, Paul frequently writes and speaks on issues relating to exclusions, fraud and abuse and the false claims act. Before entering private practice, he was a federal health care fraud prosecutor for a number of years, and the Department of Justice Health Care Fraud Coordinator from 2005 – 2007.
2 May, 2013, Updated Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs, Health and Human Services, Office of Inspector General, p. 16
3 Id. at p. 15
4 Exclusion Screening, LLC is not a law firm and does not provide legal advice. As such, this is not intended, and should not be taken, as legal advice. We strongly recommend that you seek the advice of counsel whenever decisions that may have legal consequences are made.