Today the HHS Office of Inspector General (OIG) issued an Updated Special Advisory Opinion addressing the
recommended scope and frequency of exclusion checks of employees
and contractors. The Advisory Opinion provides important and
practical guidance to assist healthcare providers seeking to
protect their businesses against the risk of employing or
contracting with excluded individuals and entities.
OIG has the authority to exclude individuals and entities from
participation in federal healthcare programs. As of April 10, 2013
more than 51,000 individuals and nearly 3,000 entities were
excluded from participation, and healthcare providers that employ
or contract with excluded individuals or entities are subject to
significant civil monetary penalties (CMPs). To manage this risk,
providers typically run checks on prospective employees or
contractors to determine whether they have been excluded by the OIG
before hiring or engaging those individuals or entities. However,
pre-employment or pre-contract exclusion checks are insufficient to
fully protect a healthcare provider from liability from employing
excluded individuals or entities. What remained unclear until the
issuance of today's Advisory Opinion was how often providers
should run exclusion checks and which prospective employees and/or
vendors should be included in the checks. For instance, can
providers employ or contract with an excluded person if that person
is not directly involved in patient care or billing? Do providers
need to periodically screen current employees and contractors who
passed previous exclusion checks at the time of hiring? And if so,
how frequently must they conduct those checks? And how far
"downstream" do they need to go when conducting such
checks? Do providers need to screen employees of contractors and
subcontractors, or just the contractors themselves? Today, the
OIG's Advisory Opinion resolved many of these issues. Below are
some of the key takeaways from the OIG opinion.
Who Should be Screened?
The prohibition against employing or contracting with an
excluded individual or entity is extremely broad, and covers anyone
who is involved in any way with the provision of healthcare items
or services, either directly or indirectly. For instance, the
prohibition covers nurses, pharmacists, pharmacy staff, ambulance
drivers, ambulance company dispatchers, as well as anyone who
provides "administrative and management services that are
payable by Federal health care programs." This latter category
includes anyone who serves in an "executive or leadership
role," as well as anyone involved in "health information
technology services and support, strategic planning, billing and
accounting, staff training, and human resources."
Furthermore, as the OIG makes clear, it is irrelevant whether the
provider who unwittingly employed or contracted with an excluded
person received payment for the item or service. Even volunteers
who donate their time at a hospital or nursing home, for example,
are covered by the prohibition. Similarly, it is irrelevant whether
the provider has a direct relationship with the excluded individual
or not. For instance, if a hospital contracts with a staffing
agency for temporary or per diem nurses, "the hospital will be
subject to overpayment liability and may be subject to CMP
liability if an excluded nurse from that staffing agency furnishes
items or services to Federal health care program
beneficiaries."
In light of the foregoing, the OIG recommends that providers
review every job category or contractual relationship in order to
determine whether the items or services being provided are directly
or indirectly, in whole or in part, payable by a Federal healthcare
program. Assuming the answer to that question is yes, the OIG
advises that "the best mechanism for limiting CMP liability is
to screen all persons that perform under that contract or that are
in that job category."
The OIG recognizes that the screening employees of contractors and
subcontractors is often delegated contractually to the vendor by
providers. Given the risk of CMP liability, however, the OIG
strongly encourages providers to "validate" that the
contractor is conducting such screening on its behalf by requesting
and maintaining documentary evidence of such screening in its own
files.
How Frequently Should Screenings be Conducted?
The OIG recommends that providers screen all covered employees
and contractors at least monthly. The OIG maintains a List of
Excluded Individuals and Entities (LEIE) on its website, and updates that database every month.
Accordingly, the OIG expects providers to screen monthly to ensure
that current employees and contractors have not been added to the
LEIE.
What Should Providers Do if They Determine that They Have
Employed or Contracted with an Excluded Individual or
Entity?
The OIG has established a voluntary Self-Disclosure Protocol (SDP)
which enables providers to voluntarily self-disclose the employment
of an excluded individual (or the existence of a contract with an
excluded individual or entity). By using the SDP, providers may be
able to obtain a more favorable resolution with the government than
they would if the exclusion were uncovered by government
investigators in the first instance. Accordingly, the OIG strongly
encourages providers to utilize the SDP if they discover that they
have inadvertently hired or contracted with an excluded person or
entity.
Providers who unwittingly employ or contract with excluded
individuals and entities face potentially significant monetary
penalties. Today's Advisory Opinion from the OIG provides
much-needed and long-awaited guidance to help providers mitigate
and avoid that liability.
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