What are HHS OIG Federal Exclusions?
HHS OIG federal exclusions are sanctions on individuals and organizations that have violated a clause in §1128 of the Social Security Act. Being excluded prohibits an individual or organization from participating in any federal health care program, or from providing goods or services for healthcare providers that participate in a federal health program. Reasons for being excluded include:
- Being convicted of a criminal offense related to Title XVIII of the Social Security Act or a state health care program.
- Being convicted of a criminal offense relating to patient abuse or neglect under any federal or state law.
- Being convicted of an offense relating to health care fraud, or other healthcare-related financial misconduct.
- Being convicted of an offense relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.
- Being convicted of obstructing an investigation or audit into any of the above or into the use of funds received from a federal health care program.
- The revocation, suspension, or surrender of a license to provide health care due to a lack of competence, performance, or integrity.
- Being excluded or suspended from a non-HHS federal health program (i.e., Veterans Affairs) or state health care program.
- The failure to provide or disclose healthcare-related information when requested by an HHS agency or state health care program.
- Making false statements or misrepresenting material facts to qualify for participation in a federal health care program.
- Knowingly misclassifying outpatient drugs in order to affect pricing, product information, or data related to pricing and product information.
The length of an exclusion depends on the nature and seriousness of the offense. For example, HHS OIG federal exclusions for controlled substance offences can be for a minimum of five years or three years depending on whether the conviction was for a felony or misdemeanor offence. Some offences have no minimum exclusion period stipulated (i.e., making false statements), while HHS OIG federal exclusions when licenses are revoked or suspended last as long as the revocation or suspension.
It is also the case that some HHS OIG federal exclusions are mandatory and some are permissive. Mandatory exclusions – the first two offenses on the above list, and #3 and #4 if they are felony convictions – always carry a minimum exclusion penalty of five years for a first offence, ten years for a second offence, and permanent exclusion for a third offence. Permissive exclusions are discretionary inasmuch as individuals and organizations have the right to appeal against exclusion.
What Healthcare Providers Need to Know about Excluded Entities
To ensure excluded entities do not provide goods or services for healthcare providers that participate in federal health care programs, HHS OIG has the authority to sanction healthcare providers that contract excluded individuals or organizations. Sanctions can be issued against any healthcare provider in a federal health care program that employs an individual or contracts a service from an excluded organization, even if the service provided is not related to health care (i.e., administration).
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The sanctions can be significant. HHS OIG can issue a civil monetary penalty of up to $20,000 for each service or item claimed from a federal health care program, plus recover damages of up to three times the amount claimed. Therefore, if a healthcare provider claimed $5,000 for a product acquired from an excluded provider, the financial penalty could be as much as $35,000. Additionally, in extreme cases, the healthcare provider could be added to the HHS OIG federal exclusions list.
Consequently, it is important healthcare providers screen all potential employees and business associates before contracting them. Furthermore, due to the length of it can take between an individual or organization being convicted of an excludable offense and being added to HHS OIG federal exclusions list (in some cases, up to two years), it is recommended that healthcare providers regularly screen existing employees, business associates, and members of their workforces.
How Healthcare Providers Can Screen for HHS OIG Federal Exclusions
Healthcare providers can screen for HHS OIG federal exclusions by checking the List of Excluded Individuals/Entities (LEIE) database on the HHS OIG website. The list is updated monthly with excluded individuals and organizations that HHS OIG has pursued a criminal conviction against, and also individuals and organizations reported by state Medicare Fraud Control Units, licensing authorities, law enforcement agencies, and healthcare providers.
If a match is found on the database when screening a potential employee or business associate, the excluded entity should not be engaged. If a match is found when screening an existing employee, business associate, or members of their workforces, healthcare providers can avoid or mitigate a penalty by reporting the match to HHS OIG via the Health Care Fraud Self-Disclosure Protocol. The healthcare provider should also terminate the contract with the employee or business associate.
In addition to screening for HHS OIG federal exclusions, it may also be necessary to check other federal or state exclusion databases. Some federal databases include excluded individuals or organizations that may not appear on the HHS OIG federal exclusions list because their offences are not covered by §1128 of the Social Security Act. Checking state exclusion databases can reveal individuals or organizations that have violated state laws, but not federal laws.
Conclusion: Understand Your Liability for Checking Exclusions
Section §1128 of the Social Security Act (“The Exclusion of Certain Individuals and Entities from Participation in Medicare and State Health Care Programs”) was introduced by the Medicare-Medicaid Anti-Fraud and Abuse Amendments of 1977; and although not effectively enforced until the Health Care Fraud and Abuse Control Program was introduced by HIPAA in 1996, has been well publicized since the LEIE database went online in 1999.
As well as being well-publicized, many of the clauses in §1128A of the Social Security Act (“Civil Monetary Penalties”) include the phrase “know or should know” – implying that ignorance of the HHS OIG federal exclusions list is not a justifiable defense if a healthcare provider is investigated by HHS OIG for contracting goods or services from an excluded individual or organization. Consequently, it is important healthcare providers understand their liability for checking exclusions.
If you require further information about HHS OIG federal exclusions, other federal exclusion lists, and how to mitigate the risk of a penalty, you are invited to review this article. Alternatively, if you have concerns that you have not been screening for HHS OIG federal exclusions and may have contracted goods or services from an excluded individual or organization, it is recommended you seek professional compliance advice.
