Kusserow’s Corner: OIG Sanctions Update

During my term as HHS 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 LEIE screening in its various compliance guidance documents; CMS makes it a condition of participation and enrollment.  What many do not fully understand is how sanctions come about and the types of OIG Administrative Sanction authorities and actions that are referred to in the LEIE.

There are quite a number of excluded parties that are added each year.  The OIG Work Plan for 2014 reported that 3,214 exclusion actions were taken in FY 2013, an increase over the prior year of 3,131 exclusions.  The exclusions included 960 individuals or entities that engaged in crimes against HHS programs and 472 individuals or entities that were excluded as a result of civil action.  Other sanctions were the result of actions taken at the state level by Medicaid Fraud Control Units.

The stated purpose of the LEIE is to protect Federal health care programs and beneficiaries from providers, suppliers, and others who engaged in specified misconduct.  The OIG has delegated authority to impose Civil Monetary Penalties (CMPs), assessments, and program exclusion 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.

The sanctions are either “mandatory” or “discretionary” exclusion from participation in federal health care programs.  They are required where an entity or individual is convicted of a criminal offense and are discretionary 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 the Affordable Care Act, also known as 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.  It is noteworthy that in almost all instances where the OIG’s imposition of program exclusion or CMPs is appealed, it is upheld by an HHS Administrative Law Judge (ALJ), the HHS Departmental Appeals Board (DAB), and Federal Courts.

Practical Tips

  1. Ensure periodic sanction screening of employees, medical staff, contractors, and vendors against the LEIE, with the best practice being monthly.
  2. Inasmuch as nearly half the states have developed their own exclusion database with many mandating monthly screenings, care should be taken to understand and meet state screening requirements in addition to checking the LEIE.
  3. Since most LEIE exclusions arise from another underlying court, state agency, or licensure board action, it is advisable to also conduct background checks and seek assurances that prospective employees, contractors, and vendors have not been subject to any prior court or licensure board actions.
  4. It is common for individuals to be the subject of an investigation, but not yet sanctioned, with final actions taking considerable time. Therefore 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.  It is also advisable to add a condition that they must promptly report any notice of investigation that involves them.
  5. Educate and inform management and employees on their obligation to promptly report any notification of an adverse action by any duly authorized regulatory or enforcement agency.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

Copyright © 2014 Strategic Management Services, LLC. Published with permission.