The Importance of the OIG’s Exclusions List
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Kevin Chmura
Hi, and welcome to 1st Talk Compliance. I’m your host, Kevin Chmura, CEO of Panacea Healthcare Solutions and 1st Healthcare Compliance. Today we’ll be covering an important topic and one that probably doesn’t get enough attention. We’ll be talking about the LEIE OIG’s exclusion list. With me today is Mike Herold. Mike is a Client Service Specialist here at 1st Healthcare Compliance. He’s worked with hundreds of hospitals and other providers over the last five years, particularly on issues surrounding the LEIE and their staff. So, Mike, welcome.
Mike Herold
Thank you, Kevin. Good to be here.
Kevin Chmura
It’s great to have you. So, look, you’re our foremost expert on this topic, but it’s one that admittedly in my now 30th year of health care has not gotten a lot of my attention, really not until I tripped over from revenue cycle into compliance. And so judging from my lack of experience, maybe it’s best to start, or we just say, you could just give us a rundown of what is the LEIE?
Mike Herold
Absolutely. So it’s the LEIE, officially the List of Excluded Individuals or Entities, and it compiles individuals and corporate entities ineligible to participate in federal healthcare programs due to criminal activity or serious professional misconduct. So the LAIE itself is maintained by the Office of the Inspector General, or OIG, which was established by the Department of Health and Human Services. In a quote that I actually pulled directly from the OIG’s website, OIG has been implementing exclusions since about 1981. And yes, the official government website says about 1981, so I found that interesting. But the Department of Health and Human Services first began imposing these exclusions in 1977. So, excluded persons are prohibited from furnishing administrative and management services that are payable by the federal health care programs, which include Medicare and Medicaid, which is obviously more relevant than most others. The exclusion and the payment prohibition actually continue to apply to an individual, even if he or she changes from one health care profession to another while they’re on the exclusions list, and the prohibition applies to all methods of federal health care program payment, whether that’s from itemized claims, cost reports, fee schedules, capitated payments, perspective payment system, or under other bundled payment, or any other payment system, and applies even if the payment is made to a state agency or a person that is not excluded. So it’s very wide ranging, and the exclusions prohibitions extend beyond even direct care and to any individual involved with an organization at large. So this can include leadership, anyone involved in the transport of patients or anyone in build services, any build services actually. And so if any person or any vendor, because it does include entities or pretty typically vendors, if anyone in the chain is in violation of the exclusions list, penalties may apply to the entire organization.
Kevin Chmura
Wow, that’s the definition of the weakest link, I guess, in any given chain. And just footnote, I doubt the website was operational in 1981 because that would predate the Internet. That’s a lot of people that could be on the list. It takes a lot of people to run any given health care organization, any vendor supporting health care providers, so everybody has to pay attention. How does somebody end up on the exclusion list?
Mike Herold
Good question. There are several ways, and many of them, most of them even, are the first things that spring to mind when you think about a list like this. But a few of them might be surprising, and the result is the same. It doesn’t matter how you end up on the list, it’s the same, you know, end. And so knowing about all of them is definitely the best idea for healthcare entities and honestly for the employees themselves. So there’s two types, two different levels, I should say, of exclusion types. There are mandatory exclusions for which the OIG is required by law to add the offenders to the list. And then there are permissive exclusions where the OIG has discretion to decide if the action is worth adding to the list. So I just want to, you know, knowledge is power. So we’re going to go over kind of the breakdown here. We’ll start with the mandatory list. The mandatory list is primarily dealing with those higher level, you know, immediate, well, this is a fraud or abuse or illegal action. So we’re talking about Medicare or Medicaid fraud, as well as any other offenses related to the delivery of items or services under Medicare, Medicaid, SCHIP, or other state health care programs. It also includes patient abuse or neglect, felony convictions for other health care related fraud, theft, or other financial misconduct, and then felony convictions relating to unlawful manufacture, distribution, prescription, or dispensing of controlled substances. So all of those make up the mandatory list. So do any of that and you’re on the list, no questions asked. The permissive list, though, has, you know, it’s where the OIG has some discretion. And so those offenses would include misdemeanor convictions related to healthcare fraud other than Medicare or a state health program, fraud in a program that is not a healthcare program, but is funded by any federal, state, or local government agency, misdemeanor convictions related to the unlawful manufacture, distribution, prescription, or dispensing of controlled substances, suspension, revocation, or surrender of a license to provide health care for reasons bearing on professional competence, professional performance, or financial integrity, provision of unnecessary or substandard services, submission of false or fraudulent claims to a federal health care program, engaging in unlawful kickback arrangements, and here’s my personal favorite, defaulting on health education loan or scholarship educations, which is the one trips most people up because that’s the unexpected one. And then also controlling a sanctioned entity as an owner, officer, or managing employee. So, like I said, the list is, it’s not as varied because a lot of it relates to fraud of some sort. But there are a couple things in there that, you know, might trip people up. You wouldn’t expect, I guess.
Kevin Chmura
No, totally. Make sure you’re paying your student loans for medical school, right? This is what I’m taking away from that end one. So look, Mike, lots of people in the delivery chain and all of the support areas and lots of ways to get on the list. I guess it’s probably safe to say that this is something that everyone in health care needs to know about, right?
Mike Herold
Absolutely. And for some reason, and I have not been able to figure out why, most people don’t. Even amongst the people I talk to frequently, which many of them are compliance experts, they’re specialists for their practices, they’ve been doing this for 20 years, somewhere between 99 for 95% of the people I have talked to have never even heard of it, despite its importance. So that’s kind of why we’re trying to shine a spotlight on it today, because people should know.
Kevin Chmura
Yeah, 100%. And there are myriad ways and people that can find themselves on the list. And you are right. I mean, again, going back into my own personal experience, having spent my entire career in revenue cycle management, this is something that my awareness of has probably only really tipped over the last three or four years, really, probably since got to know you, Mike. So, it’s interesting. So, given that, I think it’s maybe important to understand what specifically happens when an organization runs afoul of the exclusion list.
Mike Herold
Yeah, that is definitely good to know. So, specifically, employing or contracting with, either one counts the same, an individual or entity on the list can prevent your organization from participating in federal health care programs. This includes both Medicare and Medicaid, which generally is considered to be not good in the medical field. And in addition to that, potential civil monetary penalties may apply to those organizations who have been found in violation of the exclusions list.
Kevin Chmura
So I think what’s important there is employing or contracting with, and that second one really opens you up to a lot of exposure, right? Because you have to know that all of your vendors are monitoring all of their staff against the exclusion list. Well, we’ll talk about that in a sec, but what would an organization be looking at in terms of penalties?
Mike Herold
So they would be steep. So the OIG may impose those civil monetary penalties of up to $10 ,000 for each and every item or service furnished by the excluded person for which federal program payment was sought, as well as an assessment of up to three times the total amount claimed. And that’s in addition to the program exclusion that could be just as costly as all that.
Kevin Chmura
So let me double click on that one for just one second and make sure I understand. So, if I’m a physician office and I’ve outsourced my billing to another company and they have a Medicare biller who is on the excluded list and he or she submits a hundred claims in any given month, would each one of those bills be subject to the $10 ,000 because it’s an item?
Mike Herold
Yes, each and every one. It’s a May, so the OIG doesn’t have to do it for every single one, but they can. And like you said, $110 ,000 a pop, that’s a nice million dollars.
Kevin Chmura
Yeah, really. So not having awareness of the LEIE as probably one of the bigger financial risks that a provider could face, and they don’t probably really even have the awareness they deserve of it. So, okay, so that was penalties to an organization. Who’s liable for an organization?
Mike Herold
Pretty much everyone. It’s existing employees or vendors, prospective employees or vendors. And it is also worth noting that some of the excluded practitioners will still have valid licenses or drug enforcement agency DEA numbers. So it’s really important not to assume that just because a prescription contains a valid license number or DEA number that you can’t assume that the practitioner is not excluded. So basically, unless you’re specifically checking the OIGs list, you cannot be certain that a person or a business is not on it because it’s kind of its own entity.
Kevin Chmura
Okay, wow, so this keeps getting better and better, Mike. So let me ask a practical question. How does one check the list? Asking for a friend, but to be honest, I know that our organization monitors and so I’m okay, but how would one go about checking the list?
Mike Herold
So checking the list itself for an individual person or vendor is very simple. The OIG has a website which is free for hhs.gov or you can also just you know Google OIG exclusions list and it typically brings it to the page and then once you’re there checking the list is fairly simple you can search by an employee or a vendor’s name and if there’s a potential match found because you know if someone has a common name there’s going to be 10 different results but you can verify using the appropriate taxpayer identification number for either a person or a business. And it is important to note that the LEIE updates monthly and it is the responsibility of the organization to check on every single employee and every single vendor each and every month. Cause literally any contract you have could appear. And so that is worth checking and it could, you know, it changes every month. So someone could be added at any time.
Kevin Chmura
So, wow, that’s a daunting task, even at a small organization. But I can only imagine as it scales up to larger organizations. Is there a way to make it easier or maybe automatic?
Mike Herold
Yes, directly through the OIG, there’s sort of an alert system. You’re limited to an email list that you can sign up for and you receive an alert that the list itself is updated. but that’s kind of where 1st Healthcare Compliance comes in. We, as part of our compliance management program, we do offer automatic screening of the LEIE for both employees and vendors. So our system, you know, our IT department is amazing, and they provide a check both upon first entering an individual or an entity into your profile, which you can do even before you hire someone, which is always the recommendation just in general. Anytime you’re going to hire someone, check the list, make sure they’re not on it. But then again, our system also checks it during each month after we get that email from the OIG, so that we ensure that any organization that works with us is fully aware of any potential exclusions, really realistically, as soon as you could be. So yes, but not through the OIG, I guess is the answer.
Kevin Chmura
Okay, good. So is it possible, like how common would it be for a person to be on the exclusion list and not know it?
Mike Herold
It would be rare. So the OIG sends notices directly to the person. So typically if someone or a vendor is on the list, then they know about it. That doesn’t always stop them from working in a healthcare field. And that’s why it is so important to check the list before hiring someone or signing with a vendor. And in the odd case that a person does not know, because things can always fall through the cracks. It’s usually because of one of the less serious permissive infractions. Loan defaults certainly being the common reason for this. So it’s rare, but it does happen, I guess.
Kevin Chmura
Yeah, so if you’re doing background checks on new employees, you’ll want to add this. And if you’re not background checking individuals, you’ll at least want to check potential new hires against the LEIE, and it’s I guess not really that intrusive.You’re not running a background check on people. You’re just finding out whether or not they’re excluded, why they’re excluded is less relevant to you at that point. So, and then I guess make sure your vendors are doing the same, right?
Mike Herold
Yeah, oh yeah, absolutely.
Kevin Chmura
Totally, so, okay, so let’s run the doomsday scenario. What does a person or entity do if they find they’re on the list or they’re employing somebody that’s on the list.
Mike Herold
Right. So I’ll tackle the organization level first because that’s a little bit easier. So if you’re a healthcare entity and you find out that it’s an individual or vendor who’s already under contract and they’re on the list, you definitely cannot wait to do something about it. Depending on the reason for the individual or entity to have ended up on the list, which you can, you can see that when you do check the list. You have to like narrow it down and then you can see the why. Depending on the reason, the next step might be obvious. You know, you might make a quick judgment call. But in those cases where it seems less serious, there are experts all over the place. 1st Healthcare Compliance, we do have experts who can provide either guidance on the next steps to take or, you know, as I say all the time to our clients, we can at least point you in the right direction. If it, you know, if it’s a valuable employee and it seems like this is something that could be cleared up, you know, we can say, hey, here’s where you can find out. So, you know, each individual case can be different. So navigating the best path forward might not be simple, but, you know, it can be worth looking into depending again on why they’re on the list. For the actual like individuals or you know entities who are on the list themselves getting reinstated can actually be possible depending on the type of defense obviously and then if the exclusion was for a defined period. So this is again this information is pulled directly from the OIG. So if there is a defined period of exclusion of you know 5 years 10 years etc. You may begin the process of frame statement 90 days before the end of the period specified in exclusion notice letter. Requests received earlier than 90 days will just not be considered. And if the exclusion period is indefinite, you may apply for reinstatement when they have kind of regained the license referenced in the exclusion notice. So under some conditions, you may apply for early reinstatement without regaining the license referenced in the exclusion notice if you have obtained a different health care license in the same state or any health care license in a different state. So reinstatement may be available if you do not have a valid health care license of any kind in any state and have been excluded for a minimum period of three years following the OIG’s consideration of all the factors specified in the regulations. So early reinstatement is not available if your license was revoked, suspended, or otherwise lost or surrendered for reasons relating to patient abuse or neglect. Those are pretty much hard. You’re just out. So yeah, that’s I think so.
Kevin Chmura
So great, so so perhaps not an automatic career death sentence, but but unless you’ve done something very egregious. So Mike, look, this was super informative. I learned a few things and I’ve been paying attention to this, so this this is helpful. I guess let me open it up to you. Is there anything else people should know?
Mike Herold
I think we’ve covered it. As long as people know that the list exists and a jacket for any new employees or vendors, and then again every month, then they are meeting their compliance requirements, which is obviously our focus. And lucky for all our clients, they are already covered, so we’re good there.
Kevin Chmura
All right, great. Well, Mike, thank you so much.
Mike Herold
Thank you for having me. Great.
Kevin Chmura
For our listeners, this has been 1st Talk Compliance. As we like to say, there is no exclusion list for listening to our podcast, so please tune in to our future episodes. We’ll be releasing more content soon. Thank you.
