If you are a healthcare provider who accepts any form of governmental reimbursement (e.g., Medicare, Medicaid, or Tricare, including the managed care plans of the same), you are subject to certain rules. One of which is that you will not employ, hire, or engage an individual who is on the federal exclusions list or the state Medicaid exclusions list. While this is not news to most providers, I have seen an uptick in hits on the exclusions lists by my clients and attempts by these excluded individuals of gaining employment despite their status.
The Office of Inspector General of the Department of Health and Human Services (OIG) has authority under the Social Security Act to sanction an individual or an entity from participating in Federal health care programs as punishment for violations of law which it is regularly using to exclude a number of individuals, even just as part of a settlement agreement for alleged (unproven) wrongdoing. (1) Similarly state Medicaid agencies have comparable authority in sanctioning an individual or an entity from participating in that state’s Medicaid programs.
Providers that employ or contract with excluded individuals risk being fined civil monetary penalties (CMP) and substantial overpayment liability. Any payment from a federal health care program to a provider for any item or service furnished by an excluded party is a potential overpayment. Overpayments must be returned to a federal healthcare program generally within sixty (60) days of discovery of the overpayment. However, the most substantial risk in this are the CMPs which the employing entity can be charged for employing or contracting with an excluded individual. For each item or service furnished by the excluded party, the OIG may charge more than $22,000 in addition to charging punitive damages in an amount three times the value of the items or services.
Plus, beyond the recovery on the actual claims billed by the excluded party, a provider can also violate the False Claims Act and even face criminal prosecution by the DOJ for knowingly employing or contracting with excluded parties—even if that party is not a billing provider. The OIG is actively doling out penalties to those providers who employ or contract with an excluded individual. (2)
These risks are not worth taking. Providers should be checking the List of Excluded Individuals and Entities (LEIE)(3) AND their state Medicaid (4) exclusion lists for all new hires (including independent contractors), vendors, administrative staff, and volunteers at least monthly. There are third-party service providers that will run these checks on behalf of a healthcare employer to save you time and resources. Because these exclusion checks generally return no matches, it can sometimes seem useless to run them, but all it takes is one match which a provider cannot afford to miss.
Unfortunately, there are bad actors who despite knowing their exclusion status apply for healthcare positions without disclosing their status and unless this is caught by the prospective employer early, the provider may be putting a lot at stake.
If you identify that your healthcare entity has hired an excluded party and you need legal and compliance assistance to handle that situation, please contact me.
