OIG-Sanctioned Checks: All Labs Do Them, But Questions Remain

Clinical laboratories and pathology practices should pay close attention to new guidance issued by the Health and Human Services Office of Inspector General (HHS OIG) on how to handle individuals who have been excluded from federal health care programs. On May 8, 2013, the OIG issued an updated version of a special advisory bulletin (SAB) titled “The Effect of Exclusion from Participation in Federal Health Care Programs.” This updated bulletin provides new guidance on the scope and frequency of screening employees and contractors to determine whether they are “excluded individuals and entities” and answers certain other questions related to exclusions. The original bulletin, published Sept. 30, 1999 (64 Fed. Reg. 52791), was issued coincidental with the OIG’s initiative to ensure compliance with and enforcement of exclusions. The OIG and the health care industry has now had over a decade of experience with the exclusion laws and regulations, and this updated SAB, which will supersede the September 1999 version, addresses the questions and issues that have arisen since it was published. The SAB discusses both the effects of exclusion on the excluded person or entity as well as the penalties that may be imposed on a provider that employs, arranges with, or contracts with an excluded individual or entity. It doesn’t matter whether the payments are based on a cost report, fee schedule, prospective payment system, capitated rate, or any other payment methodology. All compliance officers in any health care setting, including clinical laboratories and pathology practices, should review this updated SAB against their existing policies concerning this subject and update as needed. All training and education materials should also be updated and the auditing and monitoring programs should be updated as well. Legal Authority and Background The SAB includes a statutory background and a listing of the various updates that have occurred since the 1977 Medicare-Medicaid Anti-Fraud and Abuse Amendments first mandated the exclusion of physicians and other practitioners convicted of federal program-related crimes from participation in Medicare and Medicaid. It highlights some of the changes that have occurred to these regulations over time, including the 1981 enactment of the Civil Monetary Penalties Law, which authorizes HHS and the OIG to impose civil monetary penalties, assessments, and program exclusion. The OIG’s sanction authority was expanded once again by the Balanced Budget Act of 1997 to include all federal health care programs. There have been other statutory amendments since the publication of the 1999 SAB that have strengthened and expanded the OIG’s authority under these laws and regulations, including the Affordable Care Act (ACA) of 2010. Determining a Person’s Exclusion Status The OIG expects all providers to, at a minimum, screen their employees and contractors against the List of Excluded Individuals and Entities (LEIE), which is maintained on the OIG Web site at http://oig.hhs.gov. The OIG believes that the LEIE is as accurate and provider-friendly as it possibly can be, and the Web site where the list is housed and maintained contains a variety of other information such as “Quick Tips” and a frequently asked questions section along with contact information if you have questions about the list or how to use it. Users have access to an online searchable database and a downloadable data file that is updated monthly. The SAB discusses other databases that include individuals who have been excluded or debarred from participating in federal programs. The original OIG Compliance Guidance for Clinical Laboratories (63 Fed. Reg., Aug. 24, 1998) recommended screening against the Government Services Administration’s (GSA’s) Excluded Parties List System, which has been merged into the System for Award Management (SAM). SAM includes the OIG’s exclusions as well as other debarment actions. Two other databases providers may use include the National Practitioner Data Bank and the Healthcare Integrity and Protection Databank. The SAB recommends that providers may use these additional resources for sanction checks but should use the LEIE as the primary database for the purpose of exclusion screening for current and potential employees and contractors. As a best practice, providers should screen against the LEIE and the GSA’s SAM database because that is what is recommended in the OIG compliance guidance. The SAB recommends that providers who identify potential CMP liability because they employed or contracted with an excluded individual or entity may use the OIG’s Provider Self-Disclosure Protocol to resolve the potential liability (information can be found at http://oig.hhs.gov/compliance/self-disclosure-nto/index.asp). Who to Screen and How Often? Laboratories should screen employees and contractors based on whether the item or service being provided, or the job description of the employee, includes anything that is directly or indirectly, in whole or in part, payable by a federal health care program. Current best practice is to screen all employees. If the laboratory uses temporary staff provided by an agency, either the agency or the provider may do the task, but if there is an issue, the provider is going to be held liable. Current best practice also is to screen any individual or entity who refers any tests or other items or services paid for by a federal health care program. This screening should be performed before any claims are submitted based on an order from a physician who has not already been screened. When it comes to contractors or vendors who provide supplies and other kinds of items and services, the laboratory may exercise some discretion. For laboratories this would include vendors who supply the instrumentation and reagents where testing is performed as well as entities involved in providing consulting services or services like billing and coding. According to the SAB, the laboratory may have some liability if they are doing business with a vendor who employs an excluded individual. Any contract with a vendor should include an obligation on the vendor’s part to carry out the screening and to promptly inform the laboratory of any discrepancies it may find. Providers should screen employees and contractors prior to hiring or signing a contract. The SAB recommends monthly screening because that is how frequently the LEIE is updated, and a 2011 final regulation mandate states to screen all Medicaid-enrolled providers monthly (76 Fed. Reg. 5862, 5897, Feb. 2, 2011). Consequences There is both civil and criminal liability for an excluded individual or for an entity that employs or contracts with such an individual. Criminal liability becomes an issue when the excluded person or the employing entity knows or should have known that the exclusion existed. To avoid liability, the laboratory should ensure that a sanction check is performed on any referral source before a claim is submitted for any tests or services ordered by them. A violation of this prohibition against submitting claims for services provided by individuals who are excluded from participation in federal programs may subject the provider to civil monetary penalties of up to $10,000 for each item or service furnished by the excluded person for which a claim is filed. The entity could also be subject to an assessment of up to three times the amount claimed and could end up being excluded itself. Further, if the provider is not taking steps to ensure these claims are not submitted, or knowingly submits claims, or deliberately ignores the requirement, it could be held criminally liable as well. Similar penalties and liabilities exist for an excluded individual.