“To obtain/maintain active enrollment status, providers may not employ or contract with individuals/entities excluded from participation in any federal health care program or debarred by the GSA from any other executive branch program or activity”.[1]

What all this means is that Medicare and Medicaid payments are prohibited for all items and services furnished by excluded persons and entities.  From CMS’ perspective, sanctions and exclusions do not only play a role in terms of payment, but also enrollment. In order for providers to enroll or maintain active enrollment status, they may not employ or contract with individuals/entities excluded from participation in any federal health care program or debarred by the Government Services Administration (GSA).  

When State Medicaid agencies take final actions against providers that affect their participation in the Medicaid program, they are supposed to promptly report those providers to Office of Inspector General (OIG).  The OIG then determines whether to exclude the provider based on federal criteria for exclusion and include the individual/entity on the OIG List of Excluded Individuals and Entities (LEIE).

It is a mistake to assume that all individuals excluded by States are also listed on the LEIE.  In fact, the LEIE cannot be relied upon to include Medicaid exclusions.  The OIG found in its own review of state reporting that many states were not sending their sanction information to the OIG.  It noted that two-thirds of providers with final actions imposed by state agencies were not included on the LEIE. The majority of states even had a match rate less than twenty-five percent.   Most states indicated that this is due to uncertainty among states about when they should notify the OIG of such final actions and what kind of information to provide. I believe this is just an excuse. 

Meanwhile, CMS has been taking action on ensuring providers and programs are screening for Medicaid exclusions.  Beginning in 2008, it has been sending letters to the State Medicaid Directors to give them guidance and inform them of CMS’ interpretation of the regulations as they relate to sanctioned and excluded individuals/entities.  First, CMS called for State Medicaid Directors to mandate checking their enrolled providers for exclusions on a monthly basis.  This was followed by another letter wherein CMS stated that states should remind providers of their obligation to screen all their employees and contractors against the OIG LEIE monthly.   It also stated that states should advise providers upon enrollment and re-enrollment of their obligation to screen all employees and contractors against the OIG LEIE monthly, and explicitly require providers to agree to comply with this obligation as a condition of enrollment.  While this letter is directed to State Medicaid Directors, it points to the direction CMS is taking: namely an obligation for providers to screen.  Furthermore, these letters formalize CMS’ position on the frequency (monthly) with which both the State Medicaid agency itself as well as providers should conduct screening.

At this urging by CMS, states are moving to develop and maintain their own Medicaid exclusion lists, followed by mandates for providers to screen against them on a monthly basis.  This movement has been slow and steady.  However, in response to this call, nearly half of the states have moved to develop their own statutes and regulations on sanctions for and exclusions of providers.  It is reasonable to assume that this trend will continue and that eventually all states will be doing this. A growing number of states have developed their own sanction and exclusion lists. In addition to the development of state Medicaid exclusion lists, more and more states are also following the CMS guidance that calls for monthly screening of the database. Most of those that have gone this route have published those lists on their websites, but not all.  As such, it may be necessary to contact the state Medicaid agency or health department directly in order to access the necessary information. The following are states have developed their own Medicaid sanction lists with many others having this under development:

Alabama, Arkansas, California, Connecticut, Florida, Hawaii, Idaho, Illinois, Kentucky, Maine, Maryland, Michigan, Mississippi, Nebraska, Nevada, New Jersey, New York, South Carolina, Texas, and West Virginia.

The following are suggestions and best practices for providers when it comes to meeting sanction screening obligations:

1. It is mandatory to screen against the LEIE; therefore screen in advance of hiring or engaging any individual or entity, as well as granting staff privilege to physicians.  Thereafter it is advisable to screen all affected parties at least annually, but if possible, monthly.
2. Check with the state jurisdictions where a provider does business for any Medicaid sanction screening mandates.  Note that states are moving to follow CMS guidance for monthly screening.
3. If the state requires monthly screening, then it is advisable to consider screening against the LEIE as often. 
4. The OIG notes the GSA debarment List, formerly called the Excluded Parties List System (EPLS), now System for Awards Management (SAM), is a resource that is available, but does not call for screening against it.  This was restated in its Special Advisory Opinion of May 8, 2013, wherein it also stated that it has no interest in and will take no action on any “hit” on the GSA debarment list.  However, CMS more directly says this should be done.  I strongly recommend screening against the GSA at the time of engagement of a vendor, contractor, physician, or employee and thereafter as infrequently as possible. In my opinion screening more often is unnecessary and a waste of time and resources.

[1] (42 CFR 424.516)

Richard P. Kusserow served 11 years as the DHHS Inspector General and currently is CEO of the Compliance Resource Center (CRC), including 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.