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Excluded Individuals and Entities

A refresher for Connecticut healthcare providersVincent Ruocco, Partner

During a recent routine meeting with a client we had an opportunity to discuss certain

compliance requirements associated with excluded individuals and entities. That

discussion led to questions on whether the clients administrative procedures were

adequate. Management had engaged a contractor to perform criminal background

checks but the client expressed uncertainty as to whether the contractor was checking

for excluded individuals and entities. In light of the uncertainty and knowing that a

compliance failure could lead to significant penalties we thought it would be prudent to

issue this memorandum.Background

As many know, the Office of Inspector General of the Department of Health and Human

Services has the authority to exclude individuals and entities from federal health care

programs such as Medicare, Medicaid and Veterans programs if they commit certain

offenses. The offenses include fraud, patient abuse, unnecessary or substandard patient

care, to name a few.

Penalties

The law authorizes the government to impose penalties against health care providers

such as hospitals and nursing facilities that employ or enter into contracts with excluded

individuals and entities. Moreover, penalties may be assessed if a provider submitsclaims to a federal health care program for items or services provided directly or

indirectly by excluded individuals or entities. The penalties may be up to $10,000 for

each item or service furnished by the excluded individual or entity as well as an

assessment of up to three times the amount claimed.

For a penalty to be imposed, the statute requires that the provider submitting the claims

"knows or should know" that the person was excluded from participation in the federal

health care programs. Thus, providers have an obligation to check the exclusion status of

individuals and entities before entering into employment or contractual relationships. As

a practical matter individuals and businesses excluded from participation should NOT be

engaged by providers.

Section 1862 of the Social Security Act addresses situations where reimbursement isprohibited. Among other things it states that No payment may be made with respect

to any item or service furnished by an individual or entity during the period when

such individual or entity is excluded from participation in the program In other

words, it is possible for a provider to lose ALL Medicare and Medicaid reimbursement

during the entire time an excluded individual or entity was employed or engaged by the

provider.

Vincent Ruocco

Partner

vruocco@odpkf.com

860.257.1870

mailto:vruocco@odpkf.commailto:vruocco@odpkf.commailto:vruocco@odpkf.com

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Compliance Failures

If, through an oversight, excluded individuals or entities have been engaged, the provider

should seriously consider discharging them and disallowing ALL the related direct and

indirect costs from claims and cost reports.The matter also raises questions concerning self-reporting. While that question is

beyond the scope of this paper, concerned providers may wish to read the OIGs Provider

Self-Disclosure Protocol which is availablehere.

Providers are also encouraged to consult their legal advisor whenever they become

aware of a compliance failure.

Compliance Procedures and Tips

It might be wise to check ALL employees and vendors routinely. We purposely use the

term routinely as that is the term the OIG has decided to use in lieu of something more

precise. While the OIGs guidance is obviously vague, we understand that Connecticut

recommends that providers check for excluded individuals and entities on a monthlybasis.

At any rate, all new hires should be checked BEFORE they are hired.

In Connecticut there are two lists providers should check. The lists are located as

follows:

1. CT Administrative Actions List Go toDSS websiteand do a search for administrative actions list.

2. OIG List of Excluded Individuals and Entities (LEIE) Go toOIG website

The OIGs list is significantly more extensive than the CT Administrative Actions List.

Accordingly, the OIG has found it necessary to publish guidance on the use of its list. The

following was extracted from the OIGs website as of the date of this publication. We

include it here for your convenience and have highlighted important sub-topics.

I. Because the databases include only the name known to the OIG at the time theindividual was excluded, any former names used by the individual (e.g., maiden

name, previous married name, etc) should be searched in addition to the

individual's current name.

II. An individual with a hyphenated name should be checked under each of the lastnames in the hyphenated name (e.g., Jane Smith-Jones should be checked under

Jane Smith and Jane Jones, in addition to Jane Smith-Jones).

III. When you check the LEIE, using the Online Searchable Database or theDownloadable Data file, you should maintain documentation of the initial name

search performed and any additional searches conducted in order to verify

results of potential name matches.

IV. If you are checking only a few names, choose the Online Searchable Database.You can search up to five names at once.

V. If you are checking many names, consider downloading the Downloadable DataFile into your computers spreadsheet or database program. This will enable you

Contact:

New York, NY(midtown)

212.286.2600

New York, NY

(downtown)

212.867.8000

Harrison, NY

914.381.8900

Stamford, CT

203.323.2400

Paramus, NJ

201.712.9800

New Windsor, NY

845.220.2400

Wethersfield, CT

860.257.1870

https://oig.hhs.gov/authorities/docs/selfdisclosure.pdfhttps://oig.hhs.gov/authorities/docs/selfdisclosure.pdfhttps://oig.hhs.gov/authorities/docs/selfdisclosure.pdfhttp://www.ct.gov/dsshttp://www.ct.gov/dsshttp://www.ct.gov/dsshttps://oig.hhs.gov/exclusions/https://oig.hhs.gov/exclusions/https://oig.hhs.gov/exclusions/https://oig.hhs.gov/exclusions/http://www.ct.gov/dsshttps://oig.hhs.gov/authorities/docs/selfdisclosure.pdf

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to use that programs search functions to crosscheck your names against the

thousands of names on the LEIE.

VI. Be sure to double-check that you have the correct spelling of any names beforestarting your search.

VII. In order to achieve the most accurate search results, enter only the first fewletters of the name.

VIII. Do not forget to take the final step of identity verification using the SocialSecurity Number (SSN) for an individual or Employer Identification Number

(EIN) for an entity. It is not sufficient to simply find a matching first and last

name on the LEIE.

IX. If you find a potential match using the Downloadable Data file, you must stillverify the results by entering the SSN for an individual or EIN for an entity on

the Online Searchable Database. (Note: The Privacy Act prohibits the distribution

of SSNs so they cannot be included in the Downloadable Data file).

X. If a search result does not contain a DOB, UPIN, NPI, EIN, or SSN, it is notavailable from the OIG. Contact the OIG Exclusion Staff to determine if there isany other information available. They can be reached as follows:

HHS, OIG, OI

Exclusion Staff

7175 Security Boulevard, Suite 210

Baltimore, MD 21244

Email:sanction@oig.hhs.gov

Telephone: 410.281.3060

Fax: 410. 265.6780

Providers may direct questions about this memorandum to Vincent Ruocco, CPA at

860.257.1870

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other individual member firm or firms.IRS CIRCULAR 230 DISCLOSURE: To comply with IRS regulations, we are required to inform you that

unless expressly stated otherwise, any discussion of U.S. federal tax issues in this correspondence

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another party any transaction or matter addressed herein.

mailto:sanction@oig.hhs.govmailto:sanction@oig.hhs.govmailto:sanction@oig.hhs.govmailto:sanction@oig.hhs.gov