On May 8, 2013, the Office of Inspector General (OIG) issued an updated Special Advisory Bulletin on the effect of exclusion from federal health care programs. A federal health care program (e.g., Medicare and Medicaid) is any program that provides health benefits (whether directly, through insurance, or otherwise) and that is funded in whole or in part by the federal government. OIG published a prior bulletin on the topic in September 1999, but recurring questions and expanded liability for violations necessitated a superseding bulletin.

In short, no federal health care program payment may be made for items or services (1) furnished by an excluded person or (2) on the order or prescription of an excluded person. A “person” may be an individual or an entity. First, an excluded person may not participate in any way in the furnishing of the items or services. Nor must the items or services constitute direct patient care to be nonpayable; indirect patient care (e.g., preparing surgical trays, filling prescriptions, providing transportation) and administrative and management services also are prohibited. Second, items or services furnished on the order of an excluded person are not payable when the person furnishing the items or services knew or should have known of the exclusion.

An excluded person may be held civilly or criminally liable for violating the exclusion. If an excluded person submits or causes to be submitted a claim for payment for items or services furnished, the excluded person is subject to a $10,000 civil money penalty for each claimed item or service; the person also may be assessed up to three times the claimed amount. An excluded person also may incur a civil money penalty if he or she ordered or prescribed items or services and knew or should have known that a claim would be submitted. If the excluded person knowingly concealed or failed to disclose information with the intent to receive payment fraudulently, he or she may be held criminally liable. And of course, violating an exclusion is grounds for denial of reinstatement to federal health care programs.

Similarly, a health care provider that arranges or contracts (employment included) with a person the provider knows or should know is excluded is subject to civil money penalties and exclusion if the excluded person provides services payable by a federal health care program. To avoid liability, a provider should check the List of Excluded Individuals and Entities (LEIE) on OIG’s website before entering into a contract. A provider also should check the exclusion status of current employees and contractors periodically. As OIG updates the LEIE monthly, screening employees and contractors each month minimizes potential liability. To determine which persons to screen, the provider should review each job category or contractual arrangement to assess whether the items or services being provided are payable by a federal health care program; if so, all persons in that job category or performing under that contract should be screened. A provider may choose to rely on screening conducted by the contractor itself but should verify that the contractor is in fact conducting that screening. Again, the provider may incur civil money penalties if it fails to ensure appropriate screening is performed.

Finally, a provider that identifies an excluded employee or contractor may use the Provider Self-Disclosure Protocol to disclose the violation and resolve potential liability.