Excluded Individuals and Entities

Vincent Ruocco, Partner

A refresher for Connecticut healthcare providers

During a recent routine meeting with a client we had an opportunity to discuss certain compliance requirements associated with excluded individuals and entities. That discussion led to questions on whether the clients administrative procedures were adequate. Management had engaged a contractor to perform criminal background checks but the client expressed uncertainty as to whether the contractor was checking for excluded individuals and entities. In light of the uncertainty and knowing that a compliance failure could lead to significant penalties we thought it would be prudent to issue this memorandum. Background As many know, the Office of Inspector General of the Department of Health and Human Services has the authority to exclude individuals and entities from federal health care programs such as Medicare, Medicaid and Veterans programs if they commit certain offenses. The offenses include fraud, patient abuse, unnecessary or substandard patient care, to name a few. Penalties The law authorizes the government to impose penalties against health care providers such as hospitals and nursing facilities that employ or enter into contracts with excluded individuals and entities. Moreover, penalties may be assessed if a provider submits claims to a federal health care program for items or services provided directly or indirectly by excluded individuals or entities. The penalties may be up to $10,000 for each item or service furnished by the excluded individual or entity as well as an assessment of up to three times the amount claimed. For a penalty to be imposed, the statute requires that the provider submitting the claims "knows or should know" that the person was excluded from participation in the federal health care programs. Thus, providers have an obligation to check the exclusion status of individuals and entities before entering into employment or contractual relationships. As a practical matter individuals and businesses excluded from participation should NOT be engaged by providers. Section 1862 of the Social Security Act addresses situations where reimbursement is prohibited. Among other things it states that No payment may be made with respect to any item or service furnished by an individual or entity during the period when such individual or entity is excluded from participation in the program In other words, it is possible for a provider to lose ALL Medicare and Medicaid reimbursement during the entire time an excluded individual or entity was employed or engaged by the provider.

Vincent Ruocco Partner vruocco@odpkf.com 860.257.1870

Compliance Failures Contact: New York, NY (midtown) 212.286.2600 New York, NY (downtown) 212.867.8000 Harrison, NY 914.381.8900 Stamford, CT 203.323.2400 Paramus, NJ 201.712.9800 New Windsor, NY 845.220.2400 Wethersfield, CT 860.257.1870 If, through an oversight, excluded individuals or entities have been engaged, the provider should seriously consider discharging them and disallowing ALL the related direct and indirect costs from claims and cost reports. The matter also raises questions concerning self-reporting. While that question is beyond the scope of this paper, concerned providers may wish to read the OIGs Provider Self-Disclosure Protocol which is available here. Providers are also encouraged to consult their legal advisor whenever they become aware of a compliance failure. Compliance Procedures and Tips It might be wise to check ALL employees and vendors routinely. We purposely use the term routinely as that is the term the OIG has decided to use in lieu of something more precise. While the OIGs guidance is obviously vague, we understand that Connecticut recommends that providers check for excluded individuals and entities on a monthly basis. At any rate, all new hires should be checked BEFORE they are hired. In Connecticut there are two lists providers should check. The lists are located as follows: 1. CT Administrative Actions List Go to DSS website and do a search for administrative actions list. 2. OIG List of Excluded Individuals and Entities (LEIE) Go to OIG website The OIGs list is significantly more extensive than the CT Administrative Actions List. Accordingly, the OIG has found it necessary to publish guidance on the use of its list. The following was extracted from the OIGs website as of the date of this publication. We include it here for your convenience and have highlighted important sub-topics. I. Because the databases include only the name known to the OIG at the time the individual was excluded, any former names used by the individual (e.g., maiden name, previous married name, etc) should be searched in addition to the individual's current name. An individual with a hyphenated name should be checked under each of the last names in the hyphenated name (e.g., Jane Smith-Jones should be checked under Jane Smith and Jane Jones, in addition to Jane Smith-Jones). When you check the LEIE, using the Online Searchable Database or the Downloadable Data file, you should maintain documentation of the initial name search performed and any additional searches conducted in order to verify results of potential name matches. If you are checking only a few names, choose the Online Searchable Database. You can search up to five names at once. If you are checking many names, consider downloading the Downloadable Data File into your computers spreadsheet or database program. This will enable you

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to use that programs search functions to crosscheck your names against the thousands of names on the LEIE. Be sure to double-check that you have the correct spelling of any names before starting your search. In order to achieve the most accurate search results, enter only the first few letters of the name. Do not forget to take the final step of identity verification using the Social Security Number (SSN) for an individual or Employer Identification Number (EIN) for an entity. It is not sufficient to simply find a matching first and last name on the LEIE. If you find a potential match using the Downloadable Data file, you must still verify the results by entering the SSN for an individual or EIN for an entity on the Online Searchable Database. (Note: The Privacy Act prohibits the distribution of SSNs so they cannot be included in the Downloadable Data file). If a search result does not contain a DOB, UPIN, NPI, EIN, or SSN, it is not available from the OIG. Contact the OIG Exclusion Staff to determine if there is any other information available. They can be reached as follows: HHS, OIG, OI Exclusion Staff 7175 Security Boulevard, Suite 210 Baltimore, MD 21244 Email: sanction@oig.hhs.gov Telephone: 410.281.3060 Fax: 410. 265.6780

Providers may direct questions about this memorandum to Vincent Ruocco, CPA at 860.257.1870
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