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Delaware Health Law Blog

With CMPs for Employing Excluded Individuals on the Rise, Providers Should Review Their Exclusion Check Policies

Over the past three months the Office of Inspector General of the U.S. Department of Health and Human Services (“OIG”) has imposed civil monetary penalties (“CMP”) on 13 health care providers who employed individuals excluded from participating in Medicare and Medicaid. Most of these CMPs (10) were imposed on health care providers who self-reported the issue to the OIG, which likely explains the rise in these types of matters. The CMPs ranged from $10,000 imposed against a surgery center to $1.9 million levied against a diagnostic laboratory and imaging company. With the average amount of settlements with the OIG for employing excluded individuals in the range of $275,000, providers who bill Medicare and Medicaid should review their policies and processes for screening their employees and contractors against the OIG’s List of Excluded Individuals and Entities (“LEIE”) at

Two fundamental considerations in formulating an exclusion check policy are (1) who should be screened, and (2) how frequently should screening occur?

With respect to the first issue, providers may wonder whether they only need to screen individuals who will be rendering patient care services that will be billed to federal health care programs. Federal exclusion laws and regulations prohibit payment by a federal health care program for items or services furnished by, at the medical direction of, or upon prescription by an excluded individual. Moreover, excluded individuals may not serve in a management role or provide administrative services to an entity that bills federal health care programs unless such services are wholly unrelated to federal health care programs. An excluded individual may, however, have an ownership interest in a health care provider that bills federal health care programs but the individual and provider may be subject to CMPs if the individual provides management or administrative services to the provider. As a practical matter, therefore, an exclusion check policy should provide for screening of owners, management, administrative and clinical employees, as well as independent contractors.

As to the frequency of screening, no federal statute or regulation expressly requires screening, let alone that it be conducted at particular intervals. Screening, however, is obviously a provider’s first line of defense in avoiding a CMP for employing an excluded individual. The OIG recommends screening upon hire and “periodically” thereafter. In its Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs, the OIG does note that the LEIE is updated monthly, so monthly screening “minimizes potential overpayment and CMP liability.” In 2011, the Centers for Medicare and Medicaid Services (“CMS”) issued regulations requiring states to screen Medicaid providers on a monthly basis. Some states have, in turn, imposed a monthly screening obligation on their Medicaid providers. Although Delaware’s Division of Medicaid and Medical Assistance does not currently require Medicaid providers to conduct monthly exclusion checks of their employees and contractors, frequent checks are obviously preferable. Whatever a provider decides with respect to how often to conduct exclusion checks, the important thing is to establish a regular exclusion check process and follow it.

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