Federal regulations prohibit Medicare and Federal and state regulations prohibit Medicaid reimbursement for any items and services furnished by an excluded individual or entity. See, e.g., 42 C.F.S. § 1001.1901, Regs. Of Conn. State Agencies, 17b-262-526. When the OIG excludes a provider, federal programs are prohibited from paying for items or services furnished, ordered or prescribed by those excluded individuals or entities. 42 C.F.R. § 1001.1901. In a 2010 Provider Bulletin, providers were reminded that it is their responsibility to determine if their employees and contractors have been excluded from participation in federal health programs. (CDSS Provider Bulletin 2010-23, May 2010). Providers who fail to regularly confirm that all employees and contractors are not excluded can be subject to harsh penalties, including exclusion from the programs.
According to the 2010 Provider Bulletin, the prohibition applies to:
Direct payment to excluded individuals and entities
Payment to individuals or entities that employ or contract with excluded individuals or entities
Payment for administrative and management services furnished by excluded individuals or entities, if such services are reimbursed directly or indirectly by the program, even if the individuals do not furnish direct care to recipients
Items or services directed or prescribed by an excluded physician or other provider when the individual or entity furnishing the services either knew or should have known of the exclusion and
Payment to cover an excluded individual’s salary, expenses or fringe benefits, regardless of whether they provide direct patient care when payments are reported on a cost report or otherwise payable by the program
The prohibition applies to all methods of reimbursement, whether payment results from itemized claims, cost reports, fee schedules or a prospective payment system.
Penalties for obtaining reimbursement for an excluded provider’s services can range from reimbursement of any government funds received by a practice while employing (and paying) an excluded provider, significant civil money penalties, False Claims Act liability, exclusion from the Programs, and potentially even criminal liability. The exclusion law applies if the provider “knew or had reason to know” of the exclusion, and providers may be deemed to have knowledge of information contained on the List of Excluded Individuals and Entities (“LEIE”), the OIG’s database of excluded providers, which is available at: https://oig.hhs.gov/exclusions/exclusions_list.asp. Providers must also regularly check the state’s administrative action list, available at: www.ct.gov/dss/cwp/view.asp?a=23498q=310706.
To avoid potential liability, providers must document that they checked the LEIE and state administrative action list prior to employing or contracting with individuals and entities. Providers must document that they have checked the LEIE on a monthly basis to make sure their current employees have not had a change of status since their hire. Medicaid providers must report any violations to the Department of Social Services’ Office of Quality Assurance. In addition, any payments made to an excluded provider must be self-disallowed in any Medicare or Medicaid cost report filed by the provider.
If you have any questions or need assistance, please contact Arnold Menchel at (860) 297-4656 or menchel@halloransage.com, or Jennifer Mullen at (860) 437-0370 or mullen@halloransage.com.