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Don’t get excluded from Medicare payments—make sure your billing is up to code!.

The Office of Inspector General (OIG) is tasked with monitoring the federal agencies that are governed by the Department of Health and Human Services (HHS). It is responsible for audits, evaluations, investigations, and compliance in an effort to fight fraud and abuse of all government programs.

The OIG has the authority through Sections 1128 and 1156 of the Social Security Act to penalize and exclude individual healthcare providers and healthcare entities from participating in any federal funded programs—this is referred to as the “Exclusion Program.”

Exclusion: What Does That Mean to a Provider?

“Exclusion” means that a provider will not be able to render services to any patients who have Medicare, Medicaid, or any other federally funded healthcare program, and also excludes the provider from referring any of their patients to other providers who participate in these healthcare programs. Providers who have engaged in any form of fraud or abuse will be placed on what is called the List of Excluded Individuals and Entities (LEIE).

Being placed on the LEIE can be devastating to a practice. It is the practice’s responsibility not to engage in business with (or hire) any individuals or entities that are on the LEIE because this can lead to civil monetary penalties or placement on this list. The LEIE includes all types of healthcare providers and entities, from physicians and coders to laboratories and billing companies. The LEIE is maintained by the OIG and can be located at www.oig.hhs.gov.

Types of Exclusions

There two types of exclusions—mandatory and permissive.

Mandatory Exclusions

OIG is required by law to exclude from participation in all federal healthcare programs individuals and entities convicted of certain types of criminal offenses. Examples include:

• Medicare, Medicaid, or other state healthcare programs fraud;
• Abuse or neglect of patients;
• Felony convictions of any other healthcare related fraud or theft; and
• Illegal manufacture, distribution, prescription, or dispensing of controlled substances that leads to a felony conviction.

Permissive Exclusions

At its discretion, OIG can exclude individuals and entities on a number of groups. Examples include:

• Misdemeanor convictions related to healthcare fraud that do not include Medicare, Medicaid, or other state healthcare programs;
• Illegal manufacture, distribution, prescription, or dispensing of controlled substances that leads to a misdemeanor conviction;
• Criminal kickback arrangements involvement; and
• Failure to repay health education loans or neglecting scholarship obligations.

Being placed on the LEIE not only excludes providers from federal healthcare programs but also can lead to civil monetary penalties being levied on a practice. The HHS Secretary has been authorized by the Social Security Act to assign civil monetary penalties (CMPs). The HHS Secretary will often hand these cases over to the OIG, which can also add exclusion for the provider.

The amount of the CMPs and assessments vary depending on the nature of the violation.

• The OIG may allocate penalties up to $10,000 for each item or service determined to be billed fraudulently. There could also be an assessment of up to three times the amount incorrectly billed.
  • Example: A practice bills an ultrasound guidance incorrectly (which is defined as fraud by Medicare) 200 times and reimbursed $150 for each; the penalty has the potential to be $2,090,000.

• When there is a kickback violation, the OIG may allocate a penalty of $50,000 for each inappropriate act, which can levy up to three times the amount of the compensation paid.
  • Example: A provider refers a patient to Lab ABC, in return the lab pays the physician $10 per person. The physician has referred a total of 100 patients; the penalty has the potential to be $5,003,000.

The OIG will determine how long a provider is on the LEIE; reinstatement is not automatic. Once the exclusion period is finished, the provider must complete and have a Statement and Authorization form notarized before the application will be reviewed.

To acquire the Statement and Authorization form, a provider has to make a request in writing to the OIG. After reviewing the form, the OIG will send the provider a written statement of its decision. Keep in mind, a provider can request to be reinstated within 90 days of the expiration of the exclusion. If the provider is denied, he or she can reapply for reinstatement in one year.

Ultimately, it is the physician’s responsibility to protect his or her practice. This can be done by verifying that staff and business associates are following the coding, billing, and compliance guidelines as outlined by the HHS. Information on practice management and coding can be located on the ACR website at www.rheumatology.org/practice, or contact the health policy department at (404) 633-3777.