AHCA Compliance Webinar: Session 3Dealing With Excluded Individuals/Entities

Designing and Implementing A Corporate Compliance Program:

Hiring or Contracting With Excluded Individuals and Entities

These materials have been prepared by Poyner Spruill LLP for informational purposes only and are not legal advice. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship.

AHCA Webinar Series: Where We’ve Been

• In October 2008, Session 1, we began with:

– What is a compliance program

– Elements of an effective program

– Corporate philosophy statements

– Role of Board of Directors/Owners

• Examining “mechanics” or “structure” of compliance programs first, then moving into “substance” or laws making up the program

• We’ll be doing this monthly through November 2009• Prior webinars, materials and updates to the 2000 AHCA compliance

manual are posted on AHCA website (www.ahca.org)

Session Two, November 2008

• We covered:

– Compliance officers and compliance committees– How they work, what are their responsibilities– Who should be on them– Their role in “structure” of compliance program operation– Discussion with actual providers (large/small) were shared

• What works and maybe what doesn’t

• Challenges they’ve faced with officers & committees

• Successes they recommend to other providers

Today: Excluded Individuals/Entities

• I’ll explain impact of not understanding the OIG’s exclusion authority and what happens if you employ, contract with or “do business with” excluded individuals/entities

• OIG will explain more about the exclusion program, what it addresses and the process by which providers can determine if individual/entity is excluded

• Cheri Battee, provider, will walk us through an actual “sample” check using a tool her company developed

• You – questions and answers

The Rules on Exclusion

• OIG can or must exclude individuals/entities:– Convicted of a program-related crime (patient abuse included)– Who submit false or fraudulent, or otherwise improper, claims– Or submit claims during period of exclusion

• To any “Federal Health Care program”– Medicaid, Medicare, Tricare and VA are main LTC ones– But, also, Maternal/Child Health Grant, Social Services block

grants to states, & State Children’s Health Insurance

• OIG excludes individuals, entities (corporation, partnership, LLC, etc.) and in any profession related to health care, not just the nurses/doctors

The Basic Rule on Exclusion

• No payment will be made by any Federal health care program for any items or services furnished, ordered or prescribed by excluded individual or entity– Includes services/items “directed by” (M.D. directs an order)– Whether billed separately, bundled, per cost reports, fee

schedules or a PPS system– And even where the Federal payment is made to another provider

or supplier who is not excluded, if provided/directed/ordered by the excluded individual or entity

– Includes administrative/management services not directly related to patient care, but that are necessary component of providing items or services to program beneficiaries

Once Exclusion Occurs, You May Not:

• Employ, contract with, allow them to direct the ordering or delivery of services or supplies, undertake certain administrative duties, utilization reviews, MDS reviews

• Whether or not direct care activities• If any part of that task is reimbursed by Federal program• Even if you don’t submit the claim yourself• Example: your contractor has excluded employee who

performs some task that is reimbursable• Some LIMITED exceptions• Rule is very broad & can be complex

The Exclusion Status of Others

• You are charged by law with knowing the exclusion status of employees and contractors

• Not required by law with checking the OIG database• But, there are sanctions (later) if you “knew or should have

known” of exclusion & submit the claim anyway• OIG materials—”affirmative duty” to check status• With online, available OIG database, no reason to argue

the “know or should have known” standard• So – CHECK THE DATABASE !• New hires/contracts and periodically for existing ones

So, What Are The Consequences of “Doing Business With” Excluded Individuals/Entities?

• For the excluded individual/entity submitting claims:– $10,000 fine for each item/service claimed or “caused to be”

claimed (i.e, by another entity)– Plus treble damages = amount claimed for each item/service– Extension of existing exclusion period

• Reinstatement is not automatic after exclusion

• Also potentially amounts to a false claim under Federal False Claims Act– Separate basis for administrative sanctions or exclusion

So, What Are The Consequences of “Doing Business With” Excluded Individuals/Entities?

• For the provider who employs/contracts with excluded individual or entity:– Civil money penalties of up to $10,000 for each item or service

furnished by the excluded individual/entity– Plus CMP of three times the amount claimed for each item or

service– In extreme cases, exclusion from Federal health care programs

• Note—some states have parallel state laws

So, Ken’s Easy Rule

• Remember real goal: no role in Federal health care at all• The “10-foot pole” Rule• Just don’t go there and when in doubt, don’t• My clients: “But she’s so important to our bottom line”• Response: Maybe she’s “too creative”• And, “are you prepared for the consequences?”• “But, the exceptions” – very, very narrow• You’ll need to seek advisory opinion in most cases to

assess whether you can proceed• What message does that send public & government?

OFFICE OF INSPECTOR GENERAL

EXCLUSIONS

Exclusions

• Implementing exclusions for over 30 years

• Over 3,100 individuals and entities excluded in FY 2008

• Over 44,000 individuals and entities currently excluded

• Referrals received from various sources, including licensing boards, United States Attorney’s offices, Medicaid Fraud Control Units and Medicaid State Agencies

• Referrals reviewed to determine if there is a basis for exclusion

http://oig.hhs.gov/fraud/exclusions.asp

Exclusionscontinued

Mandatory – must be processed

Permissive – option to process or close

http://oig.hhs.gov/fraud/exclusions/authorities.asp

Effect of Exclusion

• Remedial in purpose

– Protection of Federal health care programs and beneficiaries• Improper payment• Improper/abusive practices• No further program remuneration

• Government-wide debarment

• OPM debarment

• Does NOT effect ability to receive benefits as a beneficiary

Reinstatement

• Excluded until reinstated by OIG, regardless of the length of exclusion imposed

EXAMPLES: A doctor who is excluded under section 1128(a)(1) for the minimum

period of 5 years is eligible to apply for reinstatement 120 days before the 5-year period expires

A nurse who is excluded under section 1128(b)(4) is eligible to apply

reinstatement once the license has been returned to active status by the licensing board

Reinstatementcontinued

Excluded individuals and entities must submit a written request for reinstatement

The excluded individual or entity must complete areinstatement application and sign an authorization which allows the OIG to request information from employers

An investigation is conducted based on the information provided in the completed application

Average processing time is 90-120 days

Reinstatement continued

• OIG notifies the individual or entity of the decision on reinstatement by letter

• Reinstated individuals and entities are removed from the LEIE

• If reinstatement is denied, the individual or entity may request a review

• If reinstatement is denied, the individual or entity is eligible to apply again in 1 year

Withdrawal

• Basis for exclusion is reversed or vacated

• Reinstated back to date of exclusion

EXAMPLE:

A pharmacist excluded under section 1128(a)(4) has his conviction overturned on appeal

Waiver

• Waiver may be granted for mandatory exclusions (except 1128(a)(2) patient abuse/neglect) if the subject is the

– Sole community physician

– Sole source of essential specialized services in a community

• Waiver may be granted for permissive exclusions if

– OIG determines that imposition of exclusion is not in the public’s interest

Waivercontinued

• Requires a written request from the individual administering the Federal or State health care program

• Applies to a limited geographical area

• Exclusion remains in effect elsewhere

List of Excluded Individuals/EntitiesLEIE

Individuals and entities currently excluded

Downloadable site available since September 1995

Online searchable site available since March 1999

Both updated monthly

http://exclusions.oig.hhs.gov/

Information Contained in the LEIE

• The LEIE contains only exclusion actions currently in effect

• The LEIE contains only exclusion actions taken by the OIG

• The LEIE does NOT contain actions taken by any other agencies

Contact

Joann M. Francis, Investigations AnalystExclusions StaffOffice of InvestigationsOffice of Inspector GeneralSuite 2107175 Security BoulevardBaltimore, MD 21244

(410) 281-3069

joann.francis@oig.hhs.gov