Playing with Fire

Employing individuals excluded from participation in Federal health care programs can result in devastating repercussions for employers. Numerous organizations have found themselves in an enforcement action opposite the Office of Inspector General (OIG) or a State Agency because of an exclusion monitoring oversight, and it’s certainly not a game you want to play.

Federal and State Agencies Can Exclude Individuals and Entities

The OIG yields the authority to exclude both individuals and entities from participating in federal healthcare programs such as Medicare and Medicaid (in accordance with Sections 1128 and 1156 of the Social Security Act). Associated exclusions typically stem from convictions for fraud, patient abuse, false billing or clinical care issues.

Most states also have statutes authorizing them to exclude parties from participating in state healthcare programs. Many of those states also have their own lists of excluded individuals and entities.

Heavy Fines

The results of overlooking an exclusion aren’t pretty. Fines handed down to organizations that employ or even contract with excluded parties to provide items or services funded by Federal health care programs can quickly add up. This can result in both steep financial repercussions and damage to organizational reputation and credibility. In cases where an employer knew or simply should have known that an individual or entity was on the exclusions list, the OIG can enforce Civil Monetary Penalties (CMPs) of up to $10,000 for EACH individual item or service rendered by an excluded party that was submitted for Federal health care program payment. Additionally, a penalty of up to 3 times the amount improperly claimed can be imposed.

A Hit to Organizational Reputation, Integrity and Bottom Line

Just earlier last month, Independence Home Healthcare , was forced to pay $377,000 and agreed to be itself excluded for 20 years for employing an individual listed on the OIG exclusion list and paying improper remuneration.

It’s important to know this is not an isolated incident, and the spectrum of financial penalties truly runs the gamut, depending on the specific excluded party employed, capacity of employment, time of employment, and surrounding circumstances. For example, Valley of the Sun Home Healthcare, LLC in Arizona only paid a $21,000 penalty for employing an excluded home health aid, while the Chinese-American Planning Council Home Attendant Program in New York had to pony up nearly one million dollars ($866,000) for employing an excluded personal assistant who provided items or services improperly billed to New York Medicaid.

Prior to hiring or contracting for services and/or items for patients receiving Federal healthcare benefits, it’s essential to thoroughly research all involved parties. This will help reduce the risk of employing someone who is prohibited from participating in Federal healthcare programs. However, it’s just as important to continue periodic exclusion monitoring of those same individuals even after they are employed or engaged, as the exclusion databases can update at irregular intervals. For example, a provider can be excluded for defaulting on a student loan—which can happen at any time.

Verify Comply knows firsthand how exhausting cyclically checking, double-checking and triple-checking against the various Federal and State exclusions lists can be for employers. That’s why we have created a one-stop-shop, where you can search everything you need at in one place and efficiently keep track of your efforts over time. Don’t hesitate to contact one of our knowledgeable and experienced staff members to inquire into how we can help your business, organization or facility protect itself from steep penalties and focus on what really matters – continuing to cultivate a successful avenue to quality health care.