When investigating whether an individual or entity is excluded from the federal healthcare programs, healthcare organizations must be on the alert for yet another method for defrauding the government: alias names. Alias names can present issues with the requirement that providers not hire excluded individuals. Still, organizations can implement procedures to determine whether individuals or entities are excluded from participating in Medicare and Medicaid to best protect the organization.

In October 2017, two behavioral health clinic operators, Shawn Thorpe and Ruben McLain, pled guilty to conspiracy to commit healthcare fraud for knowingly allowing an “excluded provider” to bill Medicaid for reimbursement. McClain and Thorpe created and managed Coastal Bay Behavioral Health Inc., a Florida organization with clinics providing behavioral health services to individuals, including Medicaid beneficiaries. In 2011, McClain was excluded from participating in the Medicaid program due to an earlier federal conviction of healthcare fraud. To be eligible to receive Medicaid reimbursement, providers cannot employ any individual who is “excluded” from participating in the Medicaid program (i.e., an “excluded provider”).

In an effort to conceal his excluded provider status, McClain used an alias name — “Julian Winchester.” Through this alias, McClain performed a variety of functions and managerial tasks for Coastal Bay’s operations. In 2016, one Coastal Bay employee discovered McClain’s use of an alias name and, concerned with “unethical and financial practices,” alerted Thorpe by email. Despite the worrisome information disclosed by the employee, Thorpe continued to practice with McClain.

This case presents an egregious example of an individual knowingly conspiring with another to circumvent the laws of the federal healthcare programs and evade detection through the use of an alias name. Thorpe had actual knowledge that McClain was an “excluded provider,” but healthcare entities do not need to have actual, concrete knowledge of fraud to be found liable. Courts and federal laws have broadly defined “knowingly” as acting in deliberate ignorance or reckless disregard of the truth or falsity of the information. Therefore, healthcare entities should actively ensure they are not employing excluded employees, including checking for potential use of alias names to reduce any potential liability.

Providers are encouraged to check for excluded individuals. If a person or entity is excluded, the federal government will not reimburse claims based on items or services furnished by, or at the medical direction of, an excluded provider. If claims for reimbursement are submitted pursuant to items or services furnished by an excluded provider, the federal government can impose civil monetary penalties. The government also may assess civil monetary penalties if a healthcare provider arranges, employs or contracts with an excluded entity whom the provider knows or should know is excluded from the federal healthcare programs.

To ensure an effective screening practice, organizations should conduct monthly searches and complete the following steps on an ongoing basis:

  1. Search for excluded providers on the Office of Inspector General’s (OIG) List of Excluded Individuals and Entities (LEIE). Organizations should check the LEIE prior to employing or contracting someone and then periodically and routinely search the LEIE for all employees at all levels, as well as independent contractors.
  2. Ensure the name syncs with employee information. Healthcare organizations and compliance officers should verify and confirm the provider’s name and search the name presented on other documentation, including employment forms. If a name is typed into the LEIE search tool, the responding alert will state that the name was in use at the time of the exclusion. Therefore, it is crucial to verify that the name searched in the LEIE database is in fact connected to the relevant Social Security number and other employment documents, to avoid individuals using aliases.
  3. Search maiden names and other previous names. The LEIE includes only the name known to the OIG at the time the individual was excluded. Therefore, it is imperative that organizations search any known former names of the individual (e.g., maiden name, previous married name), in addition to the individual's current name. Some organizations may want to request this information from their employees, as loan applications do (although, caution may be warranted at the hiring stage to avoid creating issues with respect to protected classes).
  4. Check the System for Award Management (SAM). Whereas the LEIE lists only exclusion actions taken by the OIG, the SAM registration website provides entity registration and other federal agencies’ debarment records for users not allowed to contract with or receive grants from the federal government. Organizations also should search the SAM registration to minimize the risk of employing and contracting with entities, employees and vendors that are excluded providers and suppliers.
  5. Inspect state Medicaid provider exclusion and suspension lists. Many states maintain separate excluded provider lists and required databases of similar contractual debarments. Under the Affordable Care Act, if a provider is excluded in one state, that provider is excluded in all 50 states. Therefore, providers must not only search the LEIE on a monthly basis, but they also should, at a minimum, search individuals and entities on their applicable state exclusion lists whenever they conduct a search on the LEIE.
  6. Examine other healthcare databases. The LEIE only states if someone is excluded; it will not indicate whether the individual is even enrolled as a provider (which also should be checked). Consider searching state licensure databases, the National Practitioner Data Bank (NPDB), and the Healthcare Integrity and Protection Data Bank (HIPDB) prior to employing or contracting someone, and then searching these databases on a routine basis. The NPDB alerts entities of healthcare practitioners’ professional credentials, and the HIPDB contains information regarding adverse actions taken against healthcare practitioners. Because the LEIE will not tell the searcher whether the person or entity searched is in fact a licensed provider, examining these databases may help ensure a comprehensive and accurate search.
  7. Consider hiring a vendor to conduct exclusion list checks. Though an additional cost, vendors are one way to ensure consistent and appropriate exclusion list and debarment record searches. In fact, some vendors not only search exclusion databases, but also run background checks and search all state exclusion lists. But it is ultimately the provider’s responsibility to determine whether employees are excluded. Therefore, even if a provider contracts with another entity to perform the screening against the LEIE, the provider will retain the potential liability if it employs or contracts with an excluded person or entity.

Organizations may not be able to discover every alias or name disguise. That said, through the steps above, an organization can protect itself from improperly hiring or contracting someone excluded from federal healthcare programs.