New Guidance and Penalties for Healthcare Transactions with ‘Excludeds’

In May, 2013 the Office of Inspector General (OIG) of Health and Human Services (HHS) issued new guidance on the penalties associated with the payment of claims made to ‘Excluded individuals or entities’ for any Federal Health program (primarily Medicare and Medicaid). The authority to impose civil fines and deny payment for claims resides in various Federal statutes including most recently the Affordable Care Act of 2010. An Excluded person or entity is defined as one who has engaged in fraud or abuse related to Federal Health programs and the penalties may include a $10,000 fine for each claimed item or service and may also be subject to an assessment of up to 3X the amount claimed.

Guidance on what constitutes liability, falls not only on the Excluded person or entity BUT ALSO TO A NON-EXCLUDED PERSON, PROVIDED the NON-EXCLUDED PERSON KNEW or ‘SHOULD HAVE KNOWN’ they were dealing with an ‘Excluded’ person.

As examples:

  • Providers providing services at the direction of an Excluded person are not payable by Federal Health Programs if the Provider ‘SHOULD HAVE KNOWN’ that direction or instructions were from an Excluded person
  • Providers arranging or contracting for services with a person the Provider KNOWS or ‘SHOULD HAVE KNOWN’ was Excluded are subject to the $10,000 penalty for each service furnished by the Excluded Persons

In order to avoid possible liability and penalties the OIG recommends:

  • In the case of providing services at the direction of another entity, Providers should ensure, AT THE POINT OF SERVICE, that an ordering or prescribing physician is not Excluded
  • Providers arranging or contracting services should SCREEN ALL INDIVIDUALS delivering such services for Federal Health programs.

To be able to ‘SHOULD HAVE KNOWN’ OR ‘TO SCREEN’ the OIG primarily recommends monthly screening of all employees, vendors and medical directions made by others against the monthly updated file maintained by the OIG, the ‘List of Excluded Individuals and Entities’(LEIE).

FolioMed monitors the monthly ‘change’ LEIE as well as the complete historic LEIE each month and has developed codes to designate whether a healthcare professional has been Excluded in the current month, has been Excluded historically, or has been Reinstated. The LEIE list contains a number of identifiers which will be expanded to include the NPI for all current monthly updates and will extend the NPI identifier back to all LEIE records from 2009.

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September 2020
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