SNF and Employee Checks—Mandatory and Permissive Exclusions
The Office of the Inspector General for the Department of Health and Human Services (OIG) is empowered to impose employee exclusions under sections 1128 and 1156 of the Social Security Act—which contain six “mandatory” exclusions and seventeen “permissive” exclusions.
Mandatory exclusions require the OIG, by law, to exclude a violator from participation in all federal healthcare programs, while “permissive” exclusions are discretionary, and can be imposed or otherwise handled according to individual circumstances.
A knowledge of which exclusions are mandatory and which are permissive is the basis to understanding OIG policy—as that office has the power to impose significant penalties on institutions which fail to adhere to these rules.
There are four mandatory exclusion offenses, all which have a minimum exclusion period of five years:
- Conviction of program-related crimes. This means any crime related to the delivery of items or services under Medicare, Medicaid, SCHIP, or other state healthcare programs.
- Conviction relating to patient abuse or neglect.
- Felony conviction relating to healthcare fraud.
- Felony conviction relating to a controlled substance. This includes the unlawful manufacture, distribution, prescription, or dispensing of controlled substances.
A second conviction under any of these mandatory categories will result in a ten-year minimum exclusion period, while a third offense must lead to a permanent exclusion.
Offenses which fall under the permissive exclusions category include any misdemeanor conviction relating to healthcare fraud; any convictions relating to fraud in non-healthcare programs; obstruction of an investigation or audit, and any misdemeanor conviction relating to a controlled substance. In this case, if an exclusion is imposed, the baseline period is set at three years.
If an individual has his or her license revoked, suspended, or otherwise surrenders it, the exclusion period, if imposed, will be set by the state licensing authority.
Any other exclusion or suspension under a federal or state healthcare program will lead to a minimum exclusion period, if imposed, being no less than the period imposed by that federal or state healthcare program.
A conviction for any offense relating to claims for excessive charges, unnecessary services or services which fail to meet professionally recognized standards of healthcare, or any failure to furnish medically necessary services, can lead to a minimum exclusion period of one year.
In addition, a one year minimum exclusion period is set for any offense which fails to meet the “statutory obligations of practitioners and providers to provide medically necessary services meeting professionally recognized standards of healthcare (Quality Improvement Organization (QIO) findings).”
Unsurprisingly, there is no minimum exclusion period set for convictions related to fraud and kickbacks, and if any individual is sanctioned, it follows logically that the exclusion also applied to entities controlled by that sanctioned individual—or their direct family or even a household member.
Another offense for which there is no minimum exclusion period set by law is that of making false statements or misrepresentations of material fact to any investigation query from the OIG.
There are three offenses for which there is no minimum period of exclusion set by law:
- Failure to disclose required information, supply requested information on subcontractors and suppliers; or supply payment information.
- Failure to grant immediate access. This is in reference to any inspection or investigation carried out or authorized by the OIG.
- Failure to take corrective action. This is after such corrective action has been ordered by the OIG resulting from an inspection or survey.
Finally, any default by an individual on their health education loan or scholarship obligations will lead to an exclusion period set for the time it takes to resolve the obligation.
To avoid liability, healthcare entities need to routinely check that new hires and current employees are not on the excluded list as maintained by the OIG.
Next: SNF and Employee Checks—Employer Obligations
