For employers hiring healthcare workers or retaining relevant vendors, two words: caveat emptor.

The Health and Human Services Department’s Office of Inspector General (OIG) maintains a directory that is of vital importance to healthcare employers seeking to reduce legal exposure related to employees and vendors. The List of Excluded Individuals and Entities (LEIE) is a database that is updated monthly. Healthcare providers have a duty to screen prospective and current employees against the names appearing on the LEIE.

The database includes workers and organizations whose conduct has resulted in their being prohibited from receiving federal funds. Obviously, this is of huge importance to healthcare employers administering programs such as Medicare and Medicaid. Violation of these sanctions—even if unwitting—can subject employers to fines, suspension from federal programs, reputational damage, and even jail time.

How the Law Works

Individuals and entities can be excluded under two categories: mandatory and permissive.

As for mandatory exclusions, the OIG is required to put individuals and entities on the exclusion list if they have been convicted of specific crimes:

  • Medicare or Medicaid fraud as well as other offenses related to provision of goods and services under those programs, SCHIP, or other state healthcare programs;
  • Patient abuse or neglect; or
  • Other related felony fraud, theft, or financial misconduct.

As for permissive exclusions, OIG has the discretion to exclude individuals and entities on a number of grounds, including the following:

  • Misdemeanor convictions related to healthcare fraud that doesn’t involve Medicare or a state health program;
  • Fraud in a program (not necessarily a healthcare program) funded by any federal, state, or local government agency;
  • Misdemeanor convictions relating 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 or submission of false or fraudulent claims to a federal healthcare program;
  • Engaging in unlawful kickback arrangements;
  • Defaulting on health education loan or scholarship obligations; and
  • Controlling a sanctioned entity as an owner, officer, or managing employee.

The Patient Protection and Affordable Care Act of 2010 and amendments thereto have expanded the OIG’s authority to exclude certain actors. At present, the OIG list excludes more than 60,000 entities and vendors. According to the OIG, the list “provides information to the health care industry, patients and the public regarding individuals and entities currently excluded from participation in Medicare, Medicaid, and all other Federal health care programs.”

Individuals and entities can be removed from the list if the OIG reinstates them to good standing.

The OIG’s website also includes a bulletin that gives guidance on the ambit and impact of an exclusion, best practices for searching the LEIE, and how to self-disclose employing or contracting with an excluded person or entity (see below).

The Screening Process

Providers should check the LEIE monthly to ensure that candidates, new hires, and current employees are not listed. The process is not difficult. It simply involves entering an individual’s name and executing a search on the OIG’s website. Providers should also monitor, which now includes the GSA Excluded Parties List System (EPLS).

The search can both prevent and remediate risk. In addition to avoiding the hiring of prohibited individuals and entities, the process can provide protection in the event of post-hiring discovery. If a provider learns it has employed someone on the list, it must reveal that determination to the government. The OIG maintains a Self-Disclosure Protocol to guide providers in disclosure and resolution of any potential liability.

Under Medicare and Medicaid (and Medicare and Medicaid HMOs), self-disclosure requirements extend to paramedics and EMTs whose certification has expired. If the certification of a worker in either of these classes expired while they were treating covered patients, the provider must divulge their name and whether they have received any payments.

Legal Exposure

The goal for providers is to minimize potential overpayment and liability for civil monetary penalties. Sanctions can be as high as $10,000 for each item claimed as part of service under a federal healthcare program. Additionally, the OIG can add providers themselves to the exclusion list.

This is no idle threat. Since 2012, the OIG has issued civil fines and monetary penalties in excess of $27 million to more than 250 healthcare organizations for hiring individuals or entities on the exclusion list or claiming federal healthcare dollar reimbursements for care by them.

Given the complexity of this employment terrain, providers are advised to seek legal counsel and to work closely with their screening service.

Exceptions and Waivers

The OIG does grant some exceptions, and the previously referenced bulletin includes guidance on pursuing such waivers. The exceptions include programs that do not pay, directly or indirectly, for the goods or services that the excluded vendor furnishes. Additionally, the OIG can waive an individual’s or entity’s exclusion entirely. This can occur when exclusion would impose a hardship on beneficiaries because the excluded provider is either the only physician serving a particular community or the lone source of an essential specialized service.

Providers are advised to embrace these protocols for at least three reasons. First, they help protect their access to federal healthcare programs. Second, they help verify claims of program eligibility. Last, they help guard against financial and reputational damage. In sum, weeding out excluded vendors reduces both risk to patients and providers’ liability.

GHRR’s Solution

GHRR/ESS offers products that deliver a comprehensive dataset for screening and monitoring healthcare providers and providing continuous updates. Our teams pull data from more than 5,000 data sources, adding roughly 75,000 records to the database monthly. With one log-on, an organization can automate continuous monitoring and set alerts to receive notice of adverse action affecting one of your providers.

A final note: while the OIG exclusion list is important, it is not a comprehensive solution to searching for fraudulent, abusive, and risky providers. GHRR/ESS checks thousands of additional data sources to protect your organization from financial and reputational risk and increase patient safety.


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