The Office of Inspector General (“OIG”) has posted updated guidance regarding healthcare providers employing or contracting with individuals who have been excluded from participation in federal healthcare programs. The federal excluded individual rule prohibits a provider from submitting a claim to Medicare for any good or service furnished by or at the direction of such an individual.
A provider that violates the excluded individual rule must refund any payment received on such a claim. Also, the OIG may impose civil money penalties if the provider knew or should have known about the exclusion.
The excluded individual rule has been broadly interpreted to prohibit any direct or indirect involvement by an excluded individual in providing goods or services billed to Medicare. This includes physicians, administration, nursing staff, and support personnel. The rule extends to employees as well as suppliers and independent contractors.
OIG has long taken the position that Medicare providers should screen employees and contractors through federal exclusion databases. Although such screenings are not required by statute or regulation, OIG has made clear that failure to screen is a basis for imposition of civil money penalties.
Among other things, the OIG’s updated guidance addresses (1) how to screen; (2) who to screen; and (3) how often to screen.
(1) How to screen. The OIG directs providers to utilize the List of Excluded Individuals and Entities (“LEIE”). This on-line database, along with detailed instructions for its use, is available at http://exclusions.oig.hhs.gov/.
(2) Who to screen. TheOIG recommends a provider review each job category or contractual relationship to determine whether the item or service being provided is directly or indirectly, in whole or in part, payable by a federal healthcare program. If the answer is yes, the provider should screen all persons that perform under that contract or that are in that job category.
According to the OIG, a provider should determine whether or not to screen contractors, subcontractors, and the employees of contractors using the same analysis that it would for its own employees. For example, OIG recommends screening nurses provided by staffing agencies, physician groups that contract to provide emergency room coverage, and billing or coding contractors.
Alternatively, a provider could choose to rely on screening conducted by the contractor, but OIG recommends that the provider validate such screening. Regardless of whether and by whom screening is performed and the status of the person (e.g., employee, subcontractor, employee of contractor, or volunteer), the provider will be subject to overpayment liability and for any items or services furnished by any excluded person and may be subject to civil money penalties if the provider does not ensure that an appropriate exclusion screening was performed.
(3) When to screen. The OIG directs providers to check the LEIE prior to employing or contracting with persons and periodically check the LEIE to determine the exclusion status of current employees and contractors.
While noting it is up to a provider to decide how often screenings should be performed, the OIG notes that the LEIE is updated monthly, so screening employees and contractors each month best minimizes potential liability for overpayment and civil money penalties.
In support of its position, the OIG cites a January 2009 state Medicaid director letter issued by the Centers for Medicare & Medicaid Services (“CMS”) recommending that states require providers to screen all employees and contractors monthly. Also, in 2011, CMS issued final regulations mandating states to screen all enrolled providers monthly.
The OIG’s new guidance is an important reminder of the emphasis the agency places on providers maintaining effective compliance programs that prevent, detect, and correct compliance problems. PYA can assist you in evaluating and improving the effectiveness of your compliance program, (800) 270-9629.