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Under section 1128 of the Social Security Act, the Office of Inspector General (OIG) has the authority to exclude certain individuals from federal healthcare programs like Medicare and Medicaid. In addition to not receiving reimbursement for services from Medicare and Medicaid, organizations that hire an individual from the List of Excluded Individuals/Entities (LEIE) – the list of excluded individuals maintained by OIG – may be subject to civil monetary penalties. Checking this list regularly is not only a federal requirement, it’s a best practice to protect patients from harm and protect your organization from lawsuits and fines.

Mandatory and Permissive Exclusions 

Two types of excluded individuals and entities may be found on the LEIE – mandatory and permissive exclusions. Mandatory exclusions are those that OIG is required by law to impose for specific reasons, as outlined in the social security act. Permissive exclusions give OIG more discretion and can include (but are not limited to) misdemeanors for violations of healthcare laws or regulations.

Mandatory Exclusions

OIG imposes mandatory exclusions for the following types of offenses:

  • Conviction of program-related crimes
  • Conviction relating to patient abuse or neglect
  • Felony conviction relating to healthcare fraud
  • Felony conviction relating to controlled substance
  • Additional exclusions for repeat offenses

Permissive Exclusions

OIG may impose permissive exclusions for misdemeanor convictions and other types of offenses that do not meet mandatory exclusion criteria, including:

  • Misdemeanor conviction for healthcare fraud
  • Conviction relating to fraud in non-healthcare programs
  • Conviction relating to obstruction of an investigation or audit
  • Misdemeanor conviction relating to controlled substance
  • License revocation, suspension, or surrender
  • Exclusion or suspension under federal or state healthcare program
  • Claims for excessive charges, unnecessary services, or failure of an HMO to furnish medically necessary services
  • Fraud, kickbacks, and other prohibited activities
  • Entities controlled by a sanctioned individual
  • Entities controlled by a family or household member of an excluded individual and where there has been a transfer of ownership/control
  • Failure to disclose required information, supply requested information on subcontractors and suppliers, or supply payment information
  • Failure to grant immediate access
  • Failure to take corrective action
  • Default on health education loan or scholarship obligations
  • Individuals controlling a sanctioned entity
  • Making false statement or misrepresentations of material fact
  • Failure to meet statutory obligations of practitioners and providers to provide medically necessary services meeting professionally recognized standards of health care

Exclusion Penalties

Programrelated convictions

Civil fines and monetary penalties can be assessed by the OIG. They include:

  • $10,000 for each item or service provided and listed as a claim from federal programs
  • Up to three times the amounts claimed for reimbursement
  • Possible exclusion of the company from federal programs
  • Possible loss of right to bill federal programs for services rendered
  • Possible additional fines for filing false claims under False Claims Act (Penalties up to $11,000 per claim, and possible placement in a Corporate Integrity Agreement with the OIG- audits compliance)
  • Possible criminal fines and/or jail time

Civil monetary penalties are imposed not only for entities that knowingly violate healthcare laws and regulations, but also include entities that “know or should have known” that a provider was on the exclusions list. If your organization unknowingly hires an excluded provider, it is just as liable as an organization that deliberately does so. OIG expects entities to check that their new and current employees are not on exclusion lists. According to OIG’s website, “To avoid CMP liability, health care entities need to routinely check the LEIE to ensure that new hires and current employees are not on the excluded list.”

The best way to avoid incurring civil monetary penalties is to check exclusion databases on a regular basis. This may not be easy if your organization’s staff and resources are limited. Verisys can help you check federal and state sources for exclusions, sanctions, debarments, and disciplinary actions against both healthcare professionals and entities so you can stay in compliance and minimize financial and reputational risks to your organization.

Verisys Written by Verisys
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