Since June 1st, two different skilled nursing facilities in Texas have settled cases with the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS) involving the employment of individuals excluded from participation in Federal health care programs. Both settlements serve to remind all health care providers of the inherent dangers in employing or contracting with individuals who are excluded from Federal health care programs.

The OIG has the authority to exclude individuals and providers from participating in federally funded health care programs, such as Medicare or Medicaid, pursuant to Sections 1128 and 1156 of the Social Security Act. Exclusions often occur as a result of convictions for fraud, patient abuse, false billing, or various licensing board actions, including suspension or revocation of a medical license due to competency concerns. As a result, civil monetary penalties (CMPs) may be imposed on health care providers that employ or contract with excluded individuals or entities to provide items or services funded by Federal health care programs. If a provider knows or should know that such individual or entity is excluded by the OIG, the OIG may enforce CMPs of up to $10,000 for each item or service that the excluded individual provided and was submitted for Federal health care program payment.

On June 1, 2015, P&S Healthcare Management, LLC and P&S Healthcare, LP (P&S) agreed with the OIG to collectively pay $100,000 for allegedly violating the Civil Monetary Penalties Law (CMPL) by employing three individuals all of whom were excluded from participating in Federal health care programs. The investigation by the OIG established that all three excluded individuals were providing items and services to patients who were receiving Federal health care benefits.

A week later, Williamsburg Village Healthcare Campus (Williamsburg) also entered into a settlement agreement with the OIG. Williamsburg agreed to pay $77,772.08 in order to settle allegations that it employed a certified nurse aid who was excluded from participating in Federal health care programs. The nurse aid provided items and services to the facility’s patients, and the items and services were then billed to Federal health care programs, which violated the CMPL.

The recent Texas settlements are the 16th and 17th such OIG settlements in 2015, under which OIG has recouped over $2.3 million. In one additional case, an Illinois home health agency was excluded from all federal health care programs for three (3) years as a result of employing an excluded nurse. These cases serve as vivid reminders of the ever-present risk posed by employing or contracting with an individual who is excluded from participating in Federal health care programs. As discussed above, individuals and entities can be excluded from participation in such programs for a variety of reasons, but it is the employer’s responsibility to determine if the individual or entity has been excluded. Such individuals need not be in clinical positions either: excluded management and administrative personnel can trigger CMPs.

The OIG maintains an actively updated list of all currently excluded parties, referred to as the List of Excluded Individuals/Entities (LEIE), which can be accessed for free. Employers always should search prospective employees against the LEIE to determine whether or not an individual is excluded from participating in Federal health care programs. The Exclusions Database can be accessed here. Employers should save a screen image or printout and retain the relevant alphabetical section of the LEIE to show that the individual name searched is not on the list on that date.

Prior to contracting with parties to provide services and items to patients receiving Federal health care benefits, it is essential that you thoroughly research the parties and ensure that neither the individuals nor the contracting entity are excluded from participation in Federal health care programs. Additionally, employers should routinely query the LEIE to ensure that current employees have not been excluded from Federal health care program participation.