An Ounce of Prevention: Know Your Excluded Providers
By: LAURIE E. HARTMAN
Spring 2001
The Office of the Inspector General ("OIG"), part of the U.S. Department of Health and Human Services, has the authority-sometimes mandatory, sometimes permissive-to exclude pretty much any person or entity from participating in and being paid by federal health care programs ("FHCPs") based on various types of program abuses, fraud, criminal convictions, and other misconduct. With very few exceptions, all FHCPs are prohibited from making payment "with respect to" items or services that are furnished by, prescribed by, or furnished under the medical direction of an excluded individual or entity. This rule applies regardless of who submits the claim and regardless of the method of payment (i.e., cost, fee schedule, prospective payment). Although the OIG is required to notify any known employers of an individual's exclusion, lack of notice has no effect on HCFA's ability to deny payment for services or to recover paid amounts as overpayments.
During the period of exclusion, an excluded individual or entity, as well as anyone else that might have the ability to submit a claim for such services, is prohibited from being paid for services furnished directly or indirectly to FHCP beneficiaries. Period. This includes your business if you bill a federal program for services furnished by your employees or by other assignments, or services furnished under arrangements or consolidated billing requirements. In addition, services furnished by non-excluded providers cannot be paid for if they were prescribed by or furnished at the medical direction of an excluded physician and the individual or entity furnishing the service or item knew or had reason to know of the exclusion. Your association with an excluded person will also cause you to breach any managed care contract that requires you to refrain from contracting with or employing excluded individuals.
Penalties may apply if a provider knows or should know that it employs or contracts with an excluded individual or entity to provide services or items for which payment is sought under any FHCP, including civil monetary penalties of up to $10,000 per service, an assessment of up to three times the amounts paid for the services, and even exclusion from the FHCPs. Providers "should know" of the exclusion if they act in deliberate ignorance of or in reckless disregard of the truth or falsity of information. The government does not need to show an intent to defraud the federal program.
Although its bulletins do not have the force of law, the OIG enforces these provisions and has broadly interpreted this law. In its September 1999 Special Advisory Bulletin, the OIG stated that providers also may not be paid if the excluded person furnishes services indirectly related to patient care, such as administrative or management services, if those services are a necessary component of providing services to FHCP beneficiaries, and that no FHCP payment may be made to cover an excluded individual's salary or benefits. As examples, the OIG says FHCPs may not pay for services (1) of excluded nurses who work for a hospital, home health agency or physician practice, where the services are related to administrative duties, preparing surgical trays or reviewing plans of treatment, even if the excluded nurses do not furnish services directly to beneficiaries; (2) of excluded pharmacists who input prescription information or fill prescriptions; (3) of excluded ambulance drivers for transports of FHCP beneficiaries; and (4) of excluded accountants, administrators, billing agents or utilization reviewers. The OIG believes that in order to hire an excluded person, an employer would need to pay an excluded person exclusively with private funds and ensure that the person only furnished services related to non-FHCP patients.
To avoid possible overpayments or more serious penalties, every provider should routinely check whether a prospective employee, independent contractor or vendor is an excluded individual or entity. The provider should ask whether the person or entity is excluded from participating in FHCPs, should check the OIG's searchable list of excluded individuals and entities (http://exclusions.oig.hhs.gov), and should have a contract provision obligating the other party to notify the provider immediately if that party is ever excluded from such participation. In addition, a provider should regularly check the OIG database to see if any of its current employees or vendors are excluded. Add the site to your web Favorites today.