OIG updates guidance for dealing with persons excluded from federal health care programs

On May 8, the U.S. Department of Health and Human Services' Office of Inspector General (OIG) updated and replaced its 1999 guidance for dealing with groups and individuals excluded from participating in federal health care programs (e.g., those convicted of a criminal offense related to patient abuse or fraud). If you employ or contract with anyone who provides goods or services paid for by federal health care programs (e.g., Medicare), the special advisory bulletin is probably a “must read.”

Federal regulations prohibit payment of federal dollars, either directly or indirectly, for any item or service that has been either a) furnished by an excluded entity or individual or b) directed or prescribed by an excluded physician. In its update, the OIG attempts to address a number of questions about this regulation that have arisen since publication in 1999.

For instance, the updated bulletin notes that the exclusion doesn't just affect those providing direct patient care paid for by federal health care programs but also affects those providing administrative and management services (e.g., information technology or accounting staff). In another instance, the OIG says that excluded individuals may provide services to entities that receive federal health care funds if the individuals are not providing any services for which federal health care programs pay directly or indirectly. Also, a contract with an excluded individual to provide services only to non-federal health care patients is not subject to civil monetary penalties.  

So, what happens if you fail to follow the OIG’s guidance? If you employ or contract with a person that you know or should know is excluded by the OIG, and they provide items or services for which federal program payment is sought, you may be subject to fines of up to $10,000 for each item or service. You may also be ordered to pay an assessment of up to three times the amount claimed, and the OIG may add you to the excluded list.

There are no federal requirements to screen current and potential employees and contractors for exclusion. However, the OIG recommends that you screen individuals for exclusion when they are hired and monthly thereafter. You can do this by checking the OIG's online exclusion database. If you learn that you have employed or contracted with an excluded individual, you should then use the OIG’s Self-Disclosure Protocol to report the situation.

In sum, the updated bulletin reinforces the importance of determining whether practices are employing or contracting with excluded individuals and entities and makes it clear that items and services provided by excluded individuals are a continuing concern for the OIG. Those who employ or contract with individuals who provide goods or services paid for by federal health care programs ignore the OIG’s bulletin at their own risk.

– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians