Screen Early, Screen Often: OIG Updates its Advice on How to Avoid Liability for Employing or Contracting with Individuals Excluded from Participation in Federal Health Care Programs

Posted by Health Law Informer Author on June 03, 2013
Fraud and Abuse, Medicaid, Medicare

On May 8, 2013, the Office of Inspector General (“OIG”) of the Department of Health & Human Services issued an updated Special Advisory Bulletin (the “Updated Bulletin”)[1]  on the effect of exclusion from participation in Medicare, Medicaid and other Federal health care programs (collectively “FHPs).  The Updated Bulletin, which replaces and supersedes guidance originally provided by OIG in a 1999 Special Advisory Bulletin (the “1999 Bulletin”), details OIG’s broad interpretation of the scope and effect of its exclusion authority under the Civil Monetary Penalties Law (“CMPL”).[2]  The Updated Bulletin addresses many of the questions OIG has received about exclusions and purports to convey insight gained from resolving self-disclosure cases since publishing the 1999 Bulletin.  Although much of the Updated Bulletin simply reiterates guidance provided in the 1999 Bulletin, it also provides useful insight into OIG’s position on screening methods, frequency and documentation.

1.                  The Updated Bulletin reiterates OIG’s broad interpretation of the prohibition on payment for items and services furnished by, or at the medical direction of, excluded individuals.

The prohibition on FHP payment for items or services provided to an FHP beneficiary applies when the items or services are furnished (1) by an excluded individual or (2) at the medical direction or on the prescription of an excluded individual.  OIG clarifies that its board interpretation of the prohibition essentially prevents FHP payment, even if made to a State agency or a provider that is not excluded, where an excluded individual is even remotely involved in providing the item or service to a FHP beneficiary.  To illustrate this point, the Updated Bulletin notes that payment is prohibited for services provided by an excluded nurse, even if the nurse’s services are not billed separately and are paid as part of a Medicare diagnosis related group payment received by the hospital.  The prohibition also applies to items or services provided beyond direct patient care, such as the preparation of surgical trays, review of treatment plans, or the provision of ambulance transportation services, if furnished by an excluded individual and payable by a FHP.

2.                  The Updated Bulletin clarifies that OIG can penalize both excluded individuals and the providers that employ or contract with them.

An excluded individual violates the terms of his or her exclusion by furnishing items or services for which FHP payment is sought, or by submitting or causing to be submitted, a claim for such items or services.  Violations expose the excluded individual to CMPs of $10,000 per item or service furnished and an OIG “assessment” of up to three-times the amount claimed for each item or service.  The excluded individual may also be civilly liable under the False Claims Act and criminally liable under various criminal statutes for knowingly presenting, or causing to be presented, a false or fraudulent claim.  The OIG clarifies that these penalties may also extend to providers not only if “the [excluded individual] is an employee, contractor, or volunteer,” but also where the excluded individual has “any other relationship with the provider.”

3.                  The Updated Bulletin suggests how providers should screen employees and contractors to avoid liability.

The 1999 Bulletin ambiguously recommended that providers screen employees and contractors against the list of excluded individuals and entities (“LEIE”) prior to employing or otherwise contracting with them, and “periodically” thereafter.  This scant guidance, which has served as the primary source of OIG guidance for nearly 14 years, prompted questions from providers regarding, among other things, who and how often they should screen, and how, if at all, screening efforts should be documented.  In response to these questions, and in an effort to help providers avoid liability for employing or contracting with an excluded individual, the Updated Bulletin adds the following guidance.

  • Screen often.  Although the Updated Bulletin acknowledges that there is no statutory or regulatory requirement for providers to check the LEIE, it clearly emphasizes “periodic” screening is the best method to avoid CMP liability.  The Updated Bulletin does not elaborate on OIG’s definition of “periodic,” but it does note that “screening employees and contractors each month best minimizes potential overpayment and CMP liability.”[3]
  • Create a record.  Providers should document and record all screening efforts.  This can be accomplished by capturing screen shots of the LEIE website.
  • Don’t rely on third-party screenings.  OIG cautions that relying on a third-party to validate that a provider is not excluded may not be sufficient to protect providers from liability.  Rather, to “best minimize” liability, the Updated Bulletin recommends that providers screen the LEIE themselves.
  • Use the LEIE as the primary database to screen current and potential employees and contractors.  The Updated Bulletin encourages reliance on the LEIE “because [it] is maintained by OIG, is updated monthly, and provides more detail about persons excluded by OIG [than other government exclusion and debarment lists].”
  • Determine if “point of service” screening is necessary.  The Updated Bulletin suggests that pharmacies, laboratories, imaging centers, and other providers dependent on physician orders and prescriptions, should confirm that the ordering physician is not excluded at the “point of service.”


Although no mandate emerges from the Updated Bulletin, it is clear that screening the LEIE early and often is the best way to avoid liability for dealing with an excluded individual.  This doesn’t necessarily mean that providers should screen the LEIE monthly (although some state Medicaid agencies – like Pennsylvania, for example – encourage monthly screenings) but, for many providers, it likely means that they should screen more often.

[1] The complete Updated Bulletin can be accessed here.

[2] 42 U.S.C. § 1320a-7a.

[3] The Updated Bulletin also reiterates a previous OIG recommendation to States that they require Medicaid providers to screen employees and contractors on a monthly basis.  See 76 Fed. Reg. 5862, 5897 (Feb. 2, 2011).

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