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$5.6M for Not Checking OIG Exclusion List

33 healthcare organizations have paid 5.6 million dollars in penalties for not checking the OIG exclusion list. These are only the organizations who have self-disclosed to date in 2016; it does not include other OIG investigations.

Specifically, these entities self-disclosed to the OIG that they allegedly violated the Civil Monetary Penalties Law (CMPL) by “employing an individual that they knew or should have known was excluded from participation in Federal health care programs.”  By self-disclosing to the OIG they also agree to pay any penalties assessed.

Under the CMPL, Civil Monetary Penalties (CMPs) apply for violations that can include:

  • Presenting a claim that you know or should know is for an item or service not provided as claimed or that is false and fraudulent;
  • Presenting a claim that you know or should know is for an item or service for which Medicare will not pay; and
  • Violating the Anti-Kickback Statute

The CMPL authorizes penalties of up to $50,000 per violation, and assessments of up to three times the amount claimed for each item or service, or up to three times the amount of remuneration offered, paid, solicited, or received.

Liability under CMP often depends upon actions taken “knowingly” but can also be based upon a “should know” standard. “Should know,” generally speaking, refers to deliberate ignorance. So, specific intent to commit fraud is not required to trigger CMP liability. The importance of the intent element is largely tied to the reality physician’s and other providers face in the current healthcare world: pressure to produce can inspire cutting corners and up-coding or weak medical necessity standards. What seems “innocent” or unknown can, where CMP is concerned, have major financial consequences.

The OIG Background Check Requires OIG Exclusion Monthly Monitoring

For new employees, it is industry standard and best practice to conduct a pre-employment background check of the OIG exclusion list. This also meets certain state statutory requirements regulating healthcare.  When an employer combines a background check of the exclusion list with state Medicaid exclusion lists as well as license verification, education verification, employment verification, a Social Security number validation, and appropriate criminal records history it can safely rely upon certain protections against negligent hire.

But after hire, there is a legal doctrine called negligent retention, which is applied if an employer fails to conduct regular checks of certain public records that may change (such as license verification, criminal record verifications and exclusion background checks). This doctrine also applies to third party contractors and even referring physicians.

The OIG maintains the List of Excluded Individuals and Entities (LEIE) and updates this list at least monthly as found on the OIG website

Under the Exclusion Statute[i]; the OIG must exclude from all Federal health care programs, providers and suppliers convicted of:

  • Medicare or Medicaid fraud, as well as any other offenses related to the delivery of items or services under Medicare or Medicaid;
  • Patient abuse or neglect;
  • Felony convictions related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service; or
  • Felony convictions for unlawful manufacture, distribution, prescription, or dispensing of controlled substances.

The OIG also has the discretion to impose exclusions on a number of other grounds. Excluded providers cannot participate in Federal health care programs for a designated period. An excluded provider may not bill  Medicare, Medicaid, and other Federal healthcare programs, such as TriCare and the Veterans Health Administration as well as State Children’s Health Insurance Program (SCHIP) for services he or she orders or performs.    In addition, if services are furnished to a patient on a private-pay basis, no order or prescription given to that patient will be reimbursable by any Federal health care program.  At the end of an exclusion period, an excluded provider must affirmatively seek reinstatement; reinstatement is not automatic.


In order to avoid what can be large penalties for unknowingly employing or being associated with an excluded provider, Physician groups, hospitals, ASCs, agencies and other providers must have a proactive program to check all exclusion lists (state as well as OIG) on a monthly basis.

If you are interested in outsourcing this important function for your organization, AdvantEdge has a practical solution to fit your needs.  Please contact your Client Manager or AdvantEdge sales for more information.

[i] 42 U.S.C. § 1320a-7