Tips for Effective Sanction-Screening.

Date posted: April 6, 2017

Attorneys have frequently advised clients who want to appeal the Department of Health and Human Services (HHS) Office of Inspector General (OIG) decision to exclude them from participating in federal health programs.  As the exclusion may put the client out of business, the client is desperate to overturn the decision and be removed from the List of Excluded Individuals and Entities (LEIE).  Few health care service and product providers can function without access to federal health care programs.  If a health care provider tries to continue their services after exclusion, they will face increased legal penalties.

An appeals process for OIG exclusion decisions does exist.  The exclusion decision can be appealed to an HHS Administrative Law Judge (ALJ).  The ALJ decision can be further appealed to the HHS Departmental Appeals Board (DAB), and ultimately, to the federal courts.  However, attorneys do not generally advise appealing OIG exclusions as the decisions are rarely overturned.  Most mandatory and permissive exclusion actions derive from a prior official action such as a court conviction or licensure board revocation.  On appeal, the underlying predicate action for exclusion may not be challenged through the established administrative and judicial review process.  Further, the governing regulations under the Social Security Act (Act) state that an ALJ may not “review the exercise of discretion by the OIG to exclude an individual or entity under section 1128(b) of the Act, or determine the scope or effect of the exclusion.”  Moreover, the ALJ is prohibited from setting “a period of exclusion at zero”, or “reducing a period of exclusion to zero, in any case in which the ALJ finds that an individual or entity committed an act described in section 1128(b) of the Act.”

An excluded party can also affect affiliated entities.  If a provider permits an excluded party to be involved in its provision of services, it will create a liability for that organization.  As a condition of participation in Medicare and Medicaid, any provider of services and products that submits claims to these programs must be licensed, qualified, and cannot be excluded.  A provider’s status is therefore jeopardized if they engage with excluded parties.  Further, the OIG may consider all related claims, including anything from a sanctioned provider, as false and potentially fraudulent.  As such, providers should take steps to avoid harm from excluded parties.  Providers can conduct sanction-screening, as one option.  However, sanction screening can be a challenge because of the existence of multiple exclusion databases and variations of names and data.

Practical tips for sanction screening include the following:

  1. Conduct background investigations to ensure that employees, contractors, and vendors have not been subject to any court or licensing agency adverse action;
  2. Screen parties prior to engagement, and periodically thereafter (e.g. monthly), against the LEIE or relevant state sanction lists;
  3. Ensure that the screening data is accurate and up to date to catch participant name changes or variations;
  4. Include a certification statement on any medical privilege or employment application confirming that the individual is not under investigation or has not been the subject of an adverse action by any duly authorized enforcement agency;
  5. Check the enrollment and exclusion status of physicians and other non-physician practitioners that routinely order or prescribe items or services. Excluded individuals are prohibited from submitting claims to federal health care programs; and

If an individual or entity is found on an exclusion list, take immediate action to: terminate the party; determine the monetary exposure of the services or items that were billed to the federal health care program as a result of the party’s involvement; and, disclose the findings to the OIG.

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