From the Contributor’s Corner: Source of Sanctions Included in the List of Excluded Individuals and Entities

During my term as DHHS Inspector General (IG), I instituted what is now the List of Excluded Individuals and Entities (LEIE).  Health care organizations and their Compliance Officers know that they must screen employees against the LEIE.  The Office of Inspector General (OIG) calls for it in its various compliance guidance documents; and the Centers for Medicare & Medicaid Services (CMS) makes it a condition of participation and enrollment.  What many do not fully understand is how these sanctions come about and the types of OIG Administrative Sanction authorities and actions that are referred to the LEIE.  There are quite a number annually that are added.  For example, last year the OIG imposed exclusions against 3,131 individuals and entities, including 1,199 for criminal convictions related to health care programs; 212 for patient abuse or neglect; and 1,463 based on loss or revocation of a license.

This article speaks to the sanction authorities granted to the OIG.  The beginning was in 1977, when Congress first mandated the exclusion from program participation of a physician or other practitioner who had been convicted of a criminal offense related to participation in either Medicare or Medicaid.  The stated purpose was to protect federal health care programs and beneficiaries from providers, suppliers, and others who engaged in specified misconduct.   The enforcement authorities were delegated to the OIG to impose Civil Monetary Penalties (CMPs), assessments, and program exclusions on health care providers and others determined to have engaged in defined wrongdoing.  The effect of an OIG exclusion is that no payment may be made for any items or services furnished by an excluded individual or entity, or directed or prescribed by an excluded physician.

During my eleven year tenure as IG, the administrative sanction authorities rose to seventeen to address additional types of misconduct. Today, there are many types of improper activities that may serve as the basis for either a “mandatory” or “discretionary” exclusion from participation in federal health care programs.   Mandatory exclusion is required where an entity or individual is convicted of a criminal offense related to Medicare or a state health care program or related to neglect or abuse of patients.  Discretionary exclusion is for other types of misconduct, such as license revocation or suspension, exclusion or suspension from another Federal or State health care program, provision of unnecessary or substandard services, fraud or kickbacks, and default on a health education loan.

Passage of Health Care Reform included a number of new provisions addressing program integrity in the Medicare and Medicaid Programs.  It also amended and expanded the existing authority for the OIG to impose CMPs and exclusions.

In light of the fact that most OIG program exclusions, whether mandatory or discretionary, are derivative of a prior official action, whether it be a court conviction or a licensure board revocation, it is likely that exclusion will be upheld on review.  In almost all instances where the OIG’s imposition of program exclusion or CMPs is appealed, it is upheld by a DHHS Administrative Law Judge (“ALJ”), the DHHS Departmental Appeals Board (“DAB”), and Federal Courts.

Practical Tips for Compliance Officers

1. Ensure periodic sanction screening of employees, medical staff, contractors, and vendors against the LEIE.

2. Care should be taken to meet state screening requirements in addition to checking the LEIE; at CMS’ urging, nearly half the states have developed their own exclusion databases and many mandate monthly screenings.

3. It is advisable to conduct background checks and seek assurances that prospective employees, contractors, and vendors have not been subject to any prior court or licensure board actions, inasmuch as most exclusions in the LEIE arise from another underlying court, state agency, or licensure board action.

4.  It is a best practice to require as a condition of employment, gaining staff privileges, or engagement for the applicant to attest that they have not been, nor are they now, the subject of an investigation by any duly authorized regulatory or enforcement agency, since it is not uncommon for individuals to be the subject of an investigation, but not yet be sanctioned.  Additionally, final actions may take considerable time.  It is also advisable to add a condition that individuals must promptly report any notice of investigation that involves them.

5. Educate and inform management and employees of their obligation to promptly report any notification of an adverse action by any duly authorized regulatory or enforcement agency.

Richard P. Kusserow served 11 years as the DHHS Inspector General and is currently is CEO of the Compliance Resource Center (CRC).  CRC includes Sanction Screening Services (S³), which provides sanction screening tools and also provides full outsourcing of sanction screening. For more information, he can be contacted at rkusserow@strategicm.co.

Connect with Richard Kusserow on Google+ or LinkedIn.

Copyright © 2013 Strategic Management Services, LLC.  Published with permission.