On September 27, 2012, the OIG issued its second evaluation (OEI-07-09-00632) on excluded individuals who were employed by service providers participating in Medicaid managed care provider networks in 2011 (the Report).  According to the Report, approximately 70 percent of Medicaid beneficiaries receive all or part of their Medicaid services through managed care.  The OIG’s review included twelve Medicaid managed care entities (MCEs) and sampled approximately 500 providers (the provider population of the twelve MCEs was limited to hospitals, nursing facilities, home health agencies, and pharmacies).  The OIG identified sixteen excluded individuals out of approximately 249,000 individuals employed by the 500 sampled providers.

In addition to evaluating the number of excluded individuals participating in Medicaid managed care networks, the OIG also requested that each sampled provider complete a survey regarding the safeguards it employs to confirm that it does not employ excluded individuals.  Seven percent of providers enrolled in the twelve MCE provider networks included in this evaluation reported that they do not check the exclusion status of their employees. The OIG did not review state exclusion lists during its evaluation.

Of the sixteen excluded providers identified during the OIG’s study, nine excluded individuals were directly involved in patient care.  Additionally, fourteen of the excluded individuals were directly employed by the sampled providers.  The OIG provided the following exclusion authorities for the sixteen excluded individuals identified during its evaluation:

  • Seven individuals were excluded because their licenses had been revoked (Section 1128(b)(4) of the Act);
  • Five individuals were excluded because of program-related convictions (Section 1128(a)(1) of the Act);
  • Three individuals were excluded because of convictions for patient abuse and/or neglect (Section 1128(a)(2) of the Act); and
  • One individual was excluded because of a felony conviction of health care fraud (Section 1128(a)(3) of the Act).

According to the Report, the sampled providers who employed these sixteen excluded individuals provided the following explanations, among others, for why these individuals were employed.

  • Incorrect names were given to the sampled provider or the name was misspelled;
  • Contracted staffing agencies did not identify employees’ exclusion status correctly; and
  • Contracted background check vendors did not identify employees’ exclusion status correctly.

The OIG concluded the report by stating that “[g]iven the number of excluded providers identified in the small number of MCEs examined, CMS may want to reinforce its guidance to MCEs on their obligation to check – and to require their network providers to check – OIG’s [List of Excluded Individuals/Entities] on a monthly basis to identify exclusions and reinstatements.”

To view the Report, click here.