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Editor’s note: This is one of those articles you NEED TO READ and share with your management staff and remind them of periodically.

Over the years, we have written in Shorts about the importance of checking the Office of Inspector General’s “List of Excluded Individuals and Entities” before hiring an employee (or rehiring a former employee) or contracting with any sort of vendor or supplier (services or goods) before you hire or contract with them. When the OIG excludes an individual or entity from federal health care programs, that individual is essentially banned from working for any health care provider who receives federal health care program funds (Medicaid, Medicare, TriStar or any other type of federal health care program) in any role related to program beneficiaries or program goods or services.

The OIG’s ban is broad. No payment may be made for any item or service provided by, ordered by, subscribed by, or arranged by an individual excluded from federal health care programs, either directly or indirectly. A provider that employs or contracts with an excluded individual or entity may itself face civil money penalties of up to $10,000 for each item or service claimed (for reimbursement) and three times the amount claimed as reimbursement plus, in some cases, exclusion from federal health care programs. These sanctions can be imposed against any provider that hires or contracts with an excluded individual or entity and the standard that applies is the provider “knew or should have known” of the exclusion. With the OIG’s easily accessible Exclusion Database, which lists all excluded individuals and entities and costs nothing to check, the “knew or should have known” standard will catch all providers except in very rare instances.

An excluded individual does not have to be performing direct patient care or services. For example, a health care provider can incur CMPs and/or program exclusion for hiring an excluded nurse or other individual to work in a hospital, SNF or other health care facility to perform exclusively nonclinical, administrative duties, such as review of treatment plans, if such services are reimbursed directly or indirectly (such as through a prospective payment system or a bundled rate) to the employing or contracting provider. As a practical matter, the only time you can hire or contract with an excluded individual or entity is when you can totally segregate that person’s payment from federal health care reimbursement, paying the person solely from private funds, AND their role involves any service or item provided directly or indirectly to federal program beneficiaries. That is a very tough standard.

The OIG’s website contains tons of information about these rules and prohibitions, how to check the Exclusion List, a set of frequently asked questions, and an easy link to the Exclusion Database itself. You can also just Google “OIG Exclusion” and get there easily.

In our practice, we still encounter SNFs that do not routinely check the OIG Exclusion List. This is a very reckless practice. Excluded individuals are not always folks you have heard about in some high-profile fraud case. They may simply be professionals who have lost their licenses temporarily, thus automatically referred by the licensing board (Board of Nursing, Board of Nursing Home Examiners, etc.) to the OIG and excluded. Also, reinstatement is not automatic and an excluded individual or entity must reapply to be reinstated for federal health care program participation. Until they have reapplied, and are formally readmitted, all these prohibitions remain in place and you may not hire or contract with them until they are formally readmitted. This is true even if the underlying offense, such as loss of professional license, has been corrected.

In other cases, well-meaning and diligent SNFs check the OIG Exclusion List but make mistakes, such as entering the wrong name, an incomplete name, or a nickname and missing a positive “hit” on the Exclusion List. While a provider’s efforts to check the list that is marred by such a mistake will often be considered by the OIG in considering sanctions against that provider, you can’t count on that, and the OIG retains almost total discretion in determining whether to impose sanctions on the employer in such cases.

Here are a couple of tips to easily avoid these huge risks.

This is one of those situations where you would rather be safe than sorry. Checking the OIG’s Exclusion List should be a routine and constant part of any pre-employment screening process, just like conducting criminal background checks or checking an applicant’s prior employment history. The same goes before entering into any contracts with suppliers or vendors. The OIG site contains other tips on checking names on the Exclusion List. It’s a good idea to have one person in your organization responsible for reviewing and keeping up to date with the OIG’s website on program exclusions.

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