[Federal Register Volume 64, Number 189 (Thursday, September 30, 1999)]
[Notices]
[Pages 52791-52794]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-25427]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of Inspector General
Publication of the OIG Special Advisory Bulletin on the Effect of
Exclusion From Participation in Federal Health Care Programs
AGENCY: Office of Inspector General (OIG), HHS.
ACTION: Notice.
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SUMMARY: In its role of identifying and eliminating fraud, waste and
abuse in the Department's health care programs, the OIG periodically
develops and
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issues guidance, including Special Fraud Alerts and Advisory Bulletins,
to alert and inform health care providers and program beneficiaries
about potential problems or areas of special interest. This Federal
Register notice sets forth the recently-issued OIG Special Advisory
Bulletin addressing the effect of an OIG exclusion on an individual's
or entity's participation in the Federal health care programs.
FOR FURTHER INFORMATION CONTACT: Robin Schneider, Office of Counsel to
the Inspector General, (202) 619-1306.
SUPPLEMENTARY INFORMATION:
I. Background
This Special Advisory Bulletin is designed to help all affected
parties better understand the scope of payment prohibitions that apply
to items and services provided to Federal program beneficiaries, and to
provide guidance to individuals and entities that have been excluded
from the Federal health care programs and to those who employ or
contract with an excluded individual or entity to provide such items or
services.
II. Special Advisory Bulletin: Gainsharing Arrangements and CMPs
for Hospital Payments to Physicians To Reduce or Limit Services to
Beneficiaries
A. Introduction
The Office of Inspector General (OIG) was established in the U.S.
Department of Health and Human Services to identify and eliminate
fraud, waste, and abuse in the Department's programs and to promote
efficiency and economy in Departmental operations. The OIG carries out
this mission through a nationwide program of audits, inspections, and
investigations. In addition, the OIG has been given the authority to
exclude from participation in Medicare, Medicaid and other Federal
health care programs \1\ individuals and entities who have engaged in
fraud or abuse, and to impose civil money penalties (CMPs) for certain
misconduct related to Federal health care programs (sections 1128 and
1128A of the Social Security Act (the Act)).
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\1\ A Federal health care program is defined as any plan or
program that provides health benefits, whether directly, through
insurance, or otherwise, which is funded directly, in whole or in
part, by the United States Government or a State health care program
(with the exception of the Federal Employees Health Benefits
Program) (section 1128B(f) of the Act). The most significant Federal
health care programs are Medicare, Medicaid, Tricare and the
Veterans programs.
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Recent statutory enactments have strengthened and expanded the
OIG's authority to exclude individuals and entities from the Federal
health care programs. These laws also expanded the OIG's authority to
assess CMPs against individuals and entities that violate the law. With
this expanded authority, the OIG believes that it is important to
explain the effect of program exclusions under the current statutory
and regulatory provisions.
The Health Insurance Portability and Accountability Act (HIPAA) of
1996, Public Law 104-191, authorized the OIG to provide guidance to the
health care industry to prevent fraud and abuse, and to promote high
levels of ethical and lawful conduct. To further these goals, the OIG
issues Special Advisory Bulletins about industry practices or
arrangements that potentially implicate the fraud and abuse authorities
subject to enforcement by the OIG.
In order to assist all affected parties in understanding the
breadth of the payment prohibitions that apply to items and services
provided to Federal program beneficiaries,\2\ this Special Advisory
Bulletin provides guidance to individuals and entities that have been
excluded from Federal health care programs, as well as to those who
might employ or contract with an excluded individual or entity to
provide items or services reimbursed by a Federal health care program.
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\2\ A Federal program beneficiary is an individual that receives
health care benefits that are funded, in whole or in part, by a
Federal health care program.
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B. Statutory Background
In 1977, in the Medicare-Medicaid Anti-Fraud and Abuse Amendments,
Public Law 95-142, Congress first mandated the exclusion of physicians
and other practitioners convicted of program-related crimes from
participation in Medicare and Medicaid (now codified at section 1128 of
the Act). This was followed in 1981 with Congressional enactment of the
Civil Monetary Penalties Law (CMPL), Public Law 97-35, to further
address health care fraud and abuse (section 1128A of the Act). The
CMPL authorizes the Department and the OIG to impose CMPs, assessments
and program exclusions against individuals and entities who submit
false or fraudulent, or otherwise improper claims for Medicare or
Medicaid payment. ``Improper claims'' include claims submitted by an
excluded individual or entity for items or services furnished during a
period of program exclusion.
To enhance the OIG's ability to protect the Medicare and Medicaid
programs and beneficiaries, the Medicare and Medicaid Patient and
Program Protection Act of 1987, Public Law 100-93, expanded and revised
the OIG's administrative sanction authorities by, among other things,
establishing certain mandatory and discretionary exclusions for various
types of misconduct.
The enactment of HIPAA in 1996 and the Balanced Budget Act (BBA) of
1997, Public Law 105-33, further expanded the OIG's sanction
authorities. These statutes extended the application and scope of the
current CMP and exclusion authorities beyond programs funded by the
Department to all ``Federal health care programs.'' BBA also authorized
a new CMP authority to be imposed against health care providers or
entities that employ or enter into contracts with excluded individuals
for the provision of services or items to Federal program
beneficiaries.
In the discussion that follows, it should be understood that the
prohibitions being described apply to items and services provided,
directly or indirectly, to Federal program beneficiaries. The ability
of an excluded individual or entity to render items and services to
others is not affected by an OIG exclusion.
C. Exclusion From Federal Health Care Programs
The effect of an OIG exclusion from Federal health care programs is
that no Federal health care program payment may be made for any items
or services (1) furnished by an excluded individual or entity, or (2)
directed or prescribed by an excluded physician (42 CFR 1001.1901).
This payment ban applies to all methods of Federal program
reimbursement, whether payment results from itemized claims, cost
reports, fee schedules or a prospective payment system (PPS). Any items
and services furnished by an excluded individual or entity are not
reimbursable under Federal health care programs. In addition, any items
and services furnished at the medical direction or prescription of an
excluded physician are not reimbursable when the individual or entity
furnishing the services either knows or should know of the exclusion.
This prohibition applies even when the Federal payment itself is made
to another provider, practitioner or supplier that is not excluded.
The prohibition against Federal program payment for items or
services furnished by excluded individuals or entities also extends to
payment for administrative and management services not directly related
to patient care, but that are a necessary component of providing items
and services to
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Federal program beneficiaries. This prohibition continues to apply to
an individual even if he or she changes from one health care profession
to another while excluded.\3\ In addition, no Federal program payment
may be made to cover an excluded individual's salary, expenses or
fringe benefits, regardless of whether they provide direct patient
care.
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\3\ For example, the prohibition against Federal program payment
for items and services would continue to apply in the situation
where an excluded pharmacist completes his or her medical degree and
becomes a licensed physician.
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Set forth below is a listing of some of the types of items or
services that are reimbursed by Federal health care programs which,
when provided by excluded parties, violate an OIG exclusion. These
examples also demonstrate the kinds of items and services that excluded
parties may be furnishing which will subject their employer or
contractor to possible CMP liability.
Services performed by excluded nurses, technicians or
other excluded individuals who work for a hospital, nursing home, home
health agency or physician practice, where such services are related to
administrative duties, preparation of surgical trays or review of
treatment plans if such services are reimbursed directly or indirectly
(such as through a PPS or a bundled payment) by a Federal health care
program, even if the individuals do not furnish direct care to Federal
program beneficiaries;
Services performed by excluded pharmacists or other
excluded individuals who input prescription information for pharmacy
billing or who are involved in any way in filling prescriptions for
drugs reimbursed, directly or indirectly, by any Federal health care
program;
Services performed by excluded ambulance drivers,
dispatchers and other employees involved in providing transportation
reimbursed by a Federal health care program, to hospital patients or
nursing home residents;
Services performed for program beneficiaries by excluded
individuals who sell, deliver or refill orders for medical devices or
equipment being reimbursed by a Federal health care program;
Services performed by excluded social workers who are
employed by health care entities to provide services to Federal program
beneficiaries, and whose services are reimbursed, directly or
indirectly, by a Federal health care program;
Administrative services, including the processing of
claims for payment, performed for a Medicare intermediary or carrier,
or a Medicaid fiscal agent, by an excluded individual;
Services performed by an excluded administrator, billing
agent, accountant, claims processor or utilization reviewer that are
related to and reimbursed, directly or indirectly, by a Federal health
care program;
Items or services provided to a program beneficiary by an
excluded individual who works for an entity that has a contractual
agreement with, and is paid by, a Federal health care program; and
Items or equipment sold by an excluded manufacturer or
supplier, used in the care or treatment of beneficiaries and
reimbursed, directly or indirectly, by a Federal health care program.
D. Violation of an OIG Exclusion by an Excluded Individual or Entity
An excluded party is in violation of its exclusion if it furnishes
to Federal program beneficiaries items or services for which Federal
health care program payment is sought. An excluded individual or entity
that submits a claim for reimbursement to a Federal health care
program, or causes such a claim to be submitted, may be subject to a
CMP of $10,000 for each item or service furnished during the period
that the person or entity was excluded (section 1128A(a)(1)(D) of the
Act). The individual or entity may also be subject to treble damages
for the amount claimed for each item or service. In addition, since
reinstatement into the programs is not automatic, the excluded
individual may jeopardize future reinstatement into Federal health care
programs (42 CFR 1001.3002).
E. Employing an Excluded Individual or Entity
As indicated above, BBA authorizes the imposition of CMPs against
health care providers and entities that employ or enter into contracts
with excluded individuals or entities to provide items or services to
Federal program beneficiaries (section 1128A(a)(6) of the Act; 42 CFR
1003.102(a)(2)). This authority parallels the CMP for health
maintenance organizations that employ or contract with excluded
individuals (section 1857(g)(1)(G) of the Act). Under the CMP
authority, providers such as hospitals, nursing homes, hospices and
group medical practices may face CMP exposure if they submit claims to
a Federal health care program for health care items or services
provided, directly or indirectly, by excluded individuals or entities.
Thus, a provider or entity that receives Federal health care
funding may only employ an excluded individual in limited situations.
Those situations would include instances where the provider is both
able to pay the individual exclusively with private funds or from other
non-federal funding sources, and where the services furnished by the
excluded individual relate solely to non-federal program patients.
In many instances, the practical effect of an OIG exclusion is to
preclude employment of an excluded individual in any capacity by a
health care provider that receives reimbursement, indirectly or
directly, from any Federal health care program.
F. CMP Liability for Employing or Contracting With an Excluded
Individual or Entity
If a health care provider arranges or contracts (by employment or
otherwise) with an individual or entity who is excluded by the OIG from
program participation for the provision of items or services
reimbursable under such a Federal program, the provider may be subject
to CMP liability if they render services reimbursed, directly or
indirectly, by such a program. CMPs of up to $10,000 for each item or
service furnished by the excluded individual or entity and listed on a
claim submitted for Federal program reimbursement, as well as an
assessment of up to three times the amount claimed and program
exclusion may be imposed. For liability to be imposed, the statute
requires that the provider submitting the claims for health care items
or services furnished by an excluded individual or entity ``knows or
should know'' that the person was excluded from participation in the
Federal health care programs (section 1128A(a)(6) of the Act; 42 CFR
1003.102(a)(2)). Providers and contracting entities have an affirmative
duty to check the program exclusion status of individuals and entities
prior to entering into employment or contractual relationships, or run
the risk of CMP liability if they fail to do so.
G. How to Determine If an Individual or Entity is Excluded
In order to avoid potential CMP liability, the OIG urges health
care providers and entities to check the OIG List of Excluded
Individuals/Entities on the OIG web site (www.hhs.gov/oig) prior to
hiring or contracting with individuals or entities. In addition, if
they have not already done so, health care providers should
periodically check the OIG web site for determining the participation/
exclusion status of current employees and contractors. The web site
contains OIG program
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exclusion information and is updated in both on-line searchable and
downloadable formats. This information is updated on a regular basis.
The OIG web site sorts the exclusion of individuals and entities by:
(1) The legal basis for the exclusion, (2) the types of individuals and
entities that have been excluded, and (3) the State where the excluded
individual resided at the time they were excluded or the State where
the entity was doing business. In addition, the entire exclusion file
may be downloaded for persons who wish to set up their own database.
Monthly updates are posted to the downloadable information on the web
site.
H. Conclusion
In accordance with the expanded sanction authority provided in
HIPAA and BBA, and with limited exceptions,\4\ an exclusion from
Federal health care programs effectively precludes an excluded
individual or entity from being employed by, or under contract with,
any practitioner, provider or supplier to provide any items and
services reimbursed by a Federal health care program. This broad
prohibition applies whether the Federal reimbursement is based on
itemized claims, cost reports, fee schedules or PPS. Furthermore, it
should be recognized that an exclusion remains in effect until the
individual or entity has been reinstated to participate in Federal
health care programs in accordance with the procedures set forth at 42
CFR 1001.3001 through 1001.3005. Reinstatement does not occur
automatically at the end of a term of exclusion, but rather, an
excluded party must apply for reinstatement.
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\4\ In certain instances, a State health care program may
request a waiver of an exclusion if an individual or entity is the
sole community physician or the sole source of essential specialized
services in a community (42 CFR 1001.1801(b)).
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If you are an excluded individual or entity, or are considering
hiring or contracting with an excluded individual or entity, and
question whether or not the employment arrangement may violate the law,
the OIG Advisory Opinion process is available to offer formal binding
guidance on whether an employment or contractual arrangement may be in
violation of the OIG's exclusion and CMP authorities. The process and
procedure for submitting an advisory opinion request can be found at 42
CFR 1008, or on the OIG web site at www.hhs.gov/oig.
Dated: September 21, 1999.
June Gibbs Brown,
Inspector General.
[FR Doc. 99-25427 Filed 9-29-99; 8:45 am]
BILLING CODE 4150-04-P
