Panelists: During US latest fiscal year FY2011 (October 2010-September 2011)

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1 What s New With Exclusions? Medicare/Medicaid Program March 28-30, 2012 Baltimore, Maryland Panelists: Jaishiri Mehta Administrative and Civil Remedies Branch Office of Counsel to the HHS Inspector General Phone: (202) jaishiri.mehta@oig.hhs.gov Cindy Wisner Trinity Health Associate Counsel Phone (248) WisnerC@trinity-health.org 1 OIG FY2011 Stats During US latest fiscal year FY2011 (October 2010-September 2011) Exclusion of 2,662 individuals and entities from participating in Medicare, Medicaid and other federally sponsored health care programs 723 criminal and 382 civil actions $627.8 million in audit receivables, and Recovery of $ 5.2 billion in HHS investigative receivables (civil and administrative settlements and civil judgments) 2 1

2 OFFICE OF INSPECTOR GENERAL EXCLUSIONS 3 Exclusions Implementing exclusions for > 30 years Over 2,662 individuals and entities excluded in FY 2011 Over 48,000 individuals and entities currently excluded 4 2

3 Exclusions Exclusions Mandatory Permissive Remedial in purpose Protection of Federal health care programs and beneficiaries Improper payment Improper/abusive practices No further program remuneration 5 Effect of Exclusion Individuals and entities are excluded from Medicare (Title XVIII) Medicaid (Title XIX) Maternal & Child Health Services Block Grants (Title V) Block Grants to States for Social Services (Title XX) State Children s Health Insurance Program (Title XXI) All Federal Health Care Programs 6 3

4 Effect of Exclusion continued No program payment for ANY items or services In ANY capacity In ANY setting (except emergency items/services) For ANY administrative or management services For ANY salary or fringe benefits DIRECTLY to anyone INDIRECTLY on any cost reports or reimbursement mechanisms 7 Effect of Exclusion continued No program payment may be made for items or services furnished, ordered or prescribed by excluded individual or entity * Includes services/items directed by (M.D. directs an order) * Whether billed separately, bundled, per cost reports, fee schedules or a PPS system * And even where the Federal payment is made to another provider or supplier who is not excluded, if provided/directed/ordered by the excluded individual or entity * Includes administrative/management services not directly related to patient care, but that are a necessary component of providing items or services to program beneficiaries 8 4

5 Effect of Exclusion continued OIG Exclusion is from all Federal health care programs * OIG excludes individuals, entities (corporation, partnership, LLC, etc.) and not just health care professionals Does NOT affect ability to receive benefits as a beneficiary 9 Impact of Exclusion on Excluded Individual * Limitations on ability to be employee or contractor or a Medicare or Medicaid provider * Can t order services or write prescriptions which will be billed to a Federal health care program 10 5

6 Impact of Exclusion on Employers What should I do if I receive a positive match? Check the Special Advisory Bulletin on the Effect of an Exclusion for guidance. If you have already employed the individual, check the Self-Disclosure protocol. Training Video: 11 Impact of Exclusion on Employers Once Exclusion Occurs, Employers May Not: * Employ or contract with excluded person, allow excluded person to direct the ordering or delivery of services or supplies, or to undertake certain administrative duties * Whether or not direct care activities are involved * If any part of the task is reimbursed by Federal program dollars * Note: temporary staff sent by a staffing agency may not be excluded consider contract provision with staffing agency that they must screen or face potential liability * Some LIMITED exceptions 12 6

7 Screening Impact on Employers continued * You are charged by law with knowing the exclusion status of employees and contractors * Not required by law to check the OIG database * But, there may be sanctions (later) if you knew or should have known of exclusion & submit the claim anyway * Affirmative duty to check status online database makes it feasible * To minimize potential liability, screening all new hires and contractors, as well as regular, periodic screening of all existing employees is recommended * CMS has issued guidance to State Medicaid agencies that they must require Medicaid providers to screen monthly 13 Screening Impact on Providers continued * If physician s history raises concerns about possible past exclusion (e.g. past crime, lapse in licensed status) you need to confirm that individual is reinstated * Sanctions for the employer if you knew or should have known of exclusion & submit the claim anyway * Special problem if rely on physician orders e.g. labs, DME, imaging and home health * Affirmative duty to check status online database makes it feasible 14 7

8 Types of Exclusions Mandatory 1128(a)(1) - (a)(4) Permissive 1128(b)(1) - (b)(15) 15 Section 1128(b)(8) 1128(b)(8) Entities Owned or Controlled by Sanctioned Person Associated with an individual Convicted under 1128(a) or 1128(b) Had CMP or assessment imposed under 1128A Excluded Direct or indirect ownership or control interest of 5% or more in the entity, etc. 16 8

9 Section 1128(b)(15) 1128(b)(15) Individuals Owning or Controlling Excluded Entity Any individual who has a direct or indirect ownership/control interest in an excluded entity AND who knows or should know of action constituting the basis for exclusion or conviction 17 Reinstatement/Withdrawal Reinstatement Excluded until reinstated by OIG, regardless of assigned length of exclusion Withdrawal Basis for exclusion reversed or vacated reinstated back to date of exclusion 18 9

10 Reinstatement Excluded until reinstated by OIG, regardless of the length of exclusion imposed EXAMPLES: A doctor who is excluded under section 1128(a)(1) for the minimum period of 5 years is eligible to apply for reinstatement 120 days before the 5-year period expires A nurse who is excluded under section 1128(b)(4) is eligible to apply for reinstatement once the license has been returned to active status by the licensing board 19 Reinstatement continued Excluded individuals and entities must submit a written request for reinstatement The excluded individual or entity must complete a reinstatement application and sign an authorization which allows the OIG to request information from employers An investigation is conducted based on the information provided in the completed application Average processing time is days 20 10

11 Reinstatement continued OIG notifies the individual or entity of the decision on reinstatement by letter Reinstated individuals and entities are removed from the LEIE If reinstatement is denied, the individual or entity may request a review If reinstatement is denied, the individual or entity is eligible to apply again in 1 year 21 Withdrawal Basis for exclusion is reversed or vacated Reinstated back to date of exclusion EXAMPLE: A pharmacist excluded under section 1128(a)(4) has his conviction overturned on appeal 22 11

12 Waivers Waiver may be granted under sections 1128(a)(1), (a)(3) and (a)(4) if the subject is the Sole community physician Sole source of essential specialized services in a community No waiver under section 1128(a)(2) Waiver may be granted under section 1128(b) if the OIG determines that imposition of exclusion is not in the public s interest Can only be requested by federal health care program 23 Appeals Exclusion remains in effect during appeal process (limited exceptions) Written request for hearing within 60 days Hearing before an ALJ ALJ decisions can be appealed to DAB then Federal Court Standard of proof is preponderance of evidence 24 12

13 OIG Administrative Enforcement in Pharma and Device Cases Exclusion of Entities Synthes/Norian Exclusion of Executives Conviction-based Purdue Executives APPEAL PENDING DC CIRCUIT COURT Status-Based 1128(b)(15) Guidance issued Hermelin / KV Solomon / Forest Labs 25 Synthes/Norian Matter Criminal Pleas Synthes misdemeanor Norian felony misdemeanors Officers (now-former) Park misdemeanors (excluded for 12 years) Corporate Integrity Agreement with Synthes Synthes sold Norian assets to unrelated third party and dissolved Norian under State law - settlement agreement 9/

14 Exclusion of Individuals under Section 1128(b)(15) of SSA Individuals with ownership or control interest in sanctioned entity may be excluded if they knew or should have known of conduct that led to the sanction. Officers and managing employees may be excluded solely based on their position with the sanctioned entity. 27 Guidance about Exclusion of Individuals under 1128(b)(15) Presumption in favor of exclusion if owner knew or should have known of conduct. Presumption in favor of exclusion if officer or managing employee knew or should have known of conduct. Presumptions may be overcome

15 OIG GUIDANCE Guidance for Implementing Permissive Exclusion Authority Under Section 1128(b)(15) of the Social Security Act SUMMARY: This notice sets forth nonbinding factors the Office of Inspector General (OIG) will consider in deciding whether to impose permissive exclusion in accordance with section 1128(b)(15)(A)(ii) of the Social Security Act (the Act), which authorizes OIG to exclude an officer or managing employee of an entity that has been excluded or has been convicted of certain offenses. SUPPLEMENTARY INFORMATION I. Purpose and Rationale Section 1128(b)(15) of the Act authorizes the Secretary, and by delegation the Inspector General, to exclude an individual owner, officer, or managing employee of a sanctioned entity, as defined in section 1128(b)(15)(B) (i.e., an entity that has been convicted of certain offenses or excluded from participation in the Federal health care programs). Exclusions under section 1128(b)(15) of the Act are derivative in nature and are based upon the individual s role or interest in a company that is excluded or is convicted of certain offenses. Exclusions under section 1128(b)(15) are permissive, that is, the Secretary has the discretion whether to exclude or not to exclude. OIG s exercise of this discretion is not subject to administrative or judicial review. Section 1128(b)(15) of the Act provides two different bases for exclusion. Individuals who have an ownership or a control interest in a sanctioned entity may be excluded under section 1128(b)(15)(A)(i) if they knew or should have known of the conduct that led to the sanction. Officers and managing employees, as defined in section 1126(b) of the Act, may be excluded under section 1128(b)(15)(A)(ii) based solely on their position within the entity. Because the elements of these two provisions are so different, our exclusion analysis differs depending on whether the individual in question is: (1) an owner or (2) an officer or a managing employee. 29 Exclusion of Officers/Managers under 1128(b)(15)(A)(ii) Circumstances/Seriousness of the Offense Individual s Role in the Sanctioned Entity Individual s Actions in Response to Misconduct Information about the Entity 30 15

16 Loophole Still OPEN H.R.675 Strengthening Medicare Anti-Fraud Measures Act of 2011 Sponsor: Rep Herger, Wally [CA-2] (introduced last year on 2/11/2011) with 30 Cosponsors 2/18/2011 Referred to House Subcommittee on Health Amends title XI of the Social Security Act to authorize the Secretary of Health and Human Services (HHS) to exclude from participation in any federal health care program entities affiliated with a sanctioned entity, as well as any officer or managing employee of an affiliated entity (currently, only individuals with an ownership or control interest in a sanctioned entity), if the affiliated entity was so affiliated at the time of any of the conduct forming the basis for the 31 conviction or exclusion of the sanctioned entity. Purdue Executives Former CEO, Chief Scientific Officer, and Chief Legal Officer Park Doctrine Convictions (Responsible Corporate Officers) OIG exclusion under sections 1128(b)(1) and (b)(3) of SSA based on convictions (pleas) by the excecutives 32 16

17 Purdue Executives District Court Denies Injunction Administrative Proceeding and reduction December 13, 2010 District Court decision Upholds 12-year exclusions of executives Appealed to DC Circuit Court Oral argument held December Hermelin/KV Matter Exclusion of Individuals under Section 1128(b)(15) of SSA One of OIG s bases for permissive exclusion under exclusion statute Section 1128(b)(15) authorizes exclusion of certain individual owners and of officers and managing employees of a sanctioned entity 34 17

18 Hermelin/KV Matter KV Pharmaceuticals subsidiary Ethex convicted of mandatory exclusion offense OIG excludes Hermelin (individual) under section 1128(b)(15)(i) KV (parent) subject to potential exclusion under section 1128(b)(8) OIG, KV, and Hermelin reach settlement. Hermelin resigns from board and divests ownership 35 Forest Labs CEO Not Excluded On August 5, 2011, the Office of the Inspector General, HHS notified Howard Solomon, the CEO of Forest Laboratories, that the OIG would take no action against him under the permissive exclusion authority accorded the OIG by Section 1128(b)(15) of the Social Security Act Forest Labs pleaded guilty to one felony obstruction charge and two misdemeanors related to two drugs it illegally marketed. After the company s plea was accepted on March 2, 2011, the OIG sent written notice of its intent to exclude Mr. Solomon under 1128(b)(15) 36 18

19 Forest Labs CEO Not Excluded Mr. Solomon was never charged with any crimes. The OIG Notice of Intent to Exclude Mr. Solomon was the first time that the OIG initiated proceedings under Section 1128(b)(15) against an executive who had neither been convicted nor even alleged to have been directly involved in a criminal offense OIG s decision followed 6-month effort by Mr. Solomon, Forest and their counsel to persuade the OIG under the principles announced in the Guidance not to exclude Mr. Solomon 37 Future HHS-OIG Enforcement Individuals Criminal prosecutions Status-based exclusions Impact on Entities of Criminal Conduct Conviction and exclusion of operating entities Divestiture of business units Other remedies 38 19

20 Health Reform Added New Exclusion Authority Effective 1/1/2010 New authority to exclude provider, supplier for false statements, misrepresentation in application, enrollment (Sec (d)(1)) Broadens permissive exclusion for failure to supply information by not only those who furnish, but also those order, refer for services or certifying the need for items or services (Sec (c) Note that physicians & suppliers must permit examination of records (Sec (c)) 39 Health Reform Added New Exclusion Authority (16) Making false statements or misrepresentation of material facts. Any individual or entity that knowingly makes or causes to be made any false statement, omission, or misrepresentation of a material fact in any application, agreement, bid, or contract to participate or enroll as a provider of services or supplier under a Federal health care program (as defined in section 1128B(f)), including Medicare Advantage organizations under part C of title XVIII, prescription drug plan sponsors under part D of title XVIII, medicaid managed care organizations under title XIX, and entities that apply to participate as providers of services or suppliers in such managed care organizations and such plans. P.L , 6402(d)(1), added this new paragraph (16), effective March 23,

21 OIG is Revamping the LEIE Process To ensure the continued success of OIG s exclusion program in the 21st century, OIG is revamping our processes with a two-pronged approach: (1) improving coordination: we will improve the completeness of the LEIE by making it easier for external stakeholders to provide exclusion-related information to OIG, and (2) increasing communication: we will improve the accessibility of the database to health care providers and other users. 41 OIG is Revamping the LEIE Process A legislative requirement for State licensure boards to provide notice of adverse actions to OIG would increase our ability to identify individuals subject to exclusion. Further, regular and standardized reporting of adverse actions from State licensing boards would allow for more timely identification of individuals subject to exclusion and could help prevent providers with significant adverse actions against their licenses from moving from State to State to continue providing care. Testimony of Lewis Morris, Chief Counsel to the Inspector General before the United States Senate Committee 42 21

22 2011 & 2012 Employer Voluntary Disclosures & Penalties 19 reported self-disclosures on the OIG website involving civil money penalties paid by employers who employed an individual that they knew or should have known was excluded from participation in Federal health care programs. 3 reported civil money penalties (not self-disclosure) Common scenario: After it self-disclosed conduct to the OIG, New York City Health and Hospital Corporation (HHC), New York, agreed to pay $442, for allegedly violating the Civil Monetary Penalties Law. The OIG alleged that HHC employed eight individuals that it knew or should have known were excluded from participation in Federal health care programs OIG Workplan Topics Resolution of False Claims Act Cases and Negotiation of Corporate Integrity Agreements Payments for Services Ordered or Referred by Excluded Providers (Medicare) (Social Security Act, 1128 and 1156, and 42 CFR ) (OEI; ; expected issue date: FY 2013; new start) Medicare Outpatient Dental Claims (New) (OAS; W ; various reviews; expected issue date: FY 2012; new start) Federally Excluded Providers and Suppliers (Medicaid) (OAS; W ; W ; various reviews; expected issue date: FY 2012; work in progress) Excluded Individuals Employed by in Managed Care Networks (OEI; ; expected issue date: FY 2012; work in progress) 44 22

23 DOJ, OIG and CMS Only the OIG is responsible for determining whether the individual or company should be excluded from the federal programs In the past DOJ and OIG have agreed not to impose a permissive exclusion in exchange for the organization's commitment to institute a comprehensive corporate compliance program GOOD EXAMPLE- Christ Hospital case in Cincinnati, OHnotice of intent to excludes was sent May 2010 CIA signed in October Monitoring to Avoid Exclusion 46 23

24 Dissemination of Exclusion Information OIG website List of individuals and entities currently excluded Downloadable site available since September 1995 Online searchable site available since March 1999 Both updated monthly

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26 Who is EXCLUDED? By exclusion type 51 More Exclusion Databases to Check EPLS contains debarment actions taken by various federal agencies, including exclusion actions taken by the OIG. Access the EPLS at: The purpose of EPLS is to provide a single comprehensive list of individuals and firms excluded by Federal government agencies from receiving federal contracts or federally approved subcontracts and from certain types of federal financial and nonfinancial assistance and benefits

27 OFAC-Specially Designated Nationals List 53 OFCCP Debarred List

28 More Exclusion Databases to Check National Practitioner Data Bank/Healthcare Integrity and Protection Data Base- limited access Public Use Data File Reposted (11/09/2011) HRSA has now reposted the Public Use Data File (PUF) for the National Practitioner Data Bank. In order to access the PUF, users will be asked to review and agree to a Data Use Agreement (DUA) that spells out specifics of how the data provided in the PUF may be used in accordance with the law. 55 Be Sure to Check-OIG Most Wanted

29 Scenarios Patient Mary Smith walks in to the Community Hospital (CH) lab with an order for lab work signed by physician, Jill Bloom who is not on the CH medical staff. Before the lab performs the test should the lab do an exclusion check of Jill Bloom? Check of her license? Does it matter if Mary Smith is covered by Medicare? 57 Scenarios Patient Mary Smith walks in to the Community Hospital (CH) lab with an order for lab work signed by physician, Jill Bloom who is not on the CH medical staff. Before the lab performs the test should the lab do an exclusion check of Jill Bloom? YES, unless an emergency Check of her license? YES Does it matter if Mary Smith is covered by Medicare? NOT just Medicare - any federal health program 58 29

30 Scenarios Community Hospital (CH) is purchasing the practice of Cardiovascular Specialists, PC (CSPC). CH will buy the assets and employ the physicians and other employees of CSPC. Prior to completing the purchase CH conducts a background check of the CSPC and determines that one of the LPNs employed by the practice is an excluded individual. 59 Scenarios Community Hospital (CH) is purchasing the practice of Cardiovascular Specialists, PC (CSPC). CH will buy the assets and employ the physicians and other employees of CSPC. Prior to completing the purchase CH conducts a background check of the CSPC and determines that one of the LPNs employed by the practice is an excluded individual. Escrow for the voluntary disclosure protocol or require completion first 60 30

31 Scenarios Podiatrist Tom Jonas is in a partnership with another podiatrist, Ned Diamond and they have billed for their services under a group PIN. The two podiatrists split up nursing home visits and have a large number of Medicare patients. Unfortunately Ned Diamond has gotten caught diverting prescription drugs and is getting ready to plead guilty to a felony. What are the risks and issues for Tom Jonas? 61 Scenarios Podiatrist Tom Jonas is in a partnership with another podiatrist, Ned Diamond and they have billed for their services under a group PIN. The two podiatrists split up nursing home visits and have a large number of Medicare patients. Unfortunately Ned Diamond has gotten caught diverting prescription drugs and is getting ready to plead guilty to a felony. What are the risks and issues for Tom Jonas? Tom Jonas needs to leave partnership before it is excluded as an entity owned by Ned Diamond 62 31

32 Scenarios Becky Wilson has come to see you for assistance in applying to participate in Medicare. Prior to becoming a physician assistant she had gotten in trouble when she was the officer manager for her ex-spouse and they were not able to produce records to support billings to the Medicaid program for services he claimed he provided to Medicaid beneficiaries. Six years ago she was able to plead guilty to one count of obtaining money under false pretences and was on probation for three years. 63 Scenarios Becky Wilson has come to see you for assistance in applying to participate in Medicare. Prior to becoming a physician assistant she had gotten in trouble when she was the officer manager for her ex-spouse and they were not able to produce records to support billings to the Medicaid program for services he claimed he provided to Medicaid beneficiaries. Six years ago she was able to plead guilty to one count of obtaining money under false pretences and was on probation for three years. Check the LEIE and seek reinstatement for Becky if she was excluded If she was not, she could still be excluded 64 32

33 Scenarios The local Community Pharmacy is located in Florida and provides assistance to many visitors. Mary Smith has brought in a prescription from the local clinic. The clinic does not participate in Medicare/Medicaid, but Mary has a Part D benefit and would like her medication to be paid for by her Part D Plan. Her prescription is from Dr. Tim Tucker. Does the pharmacy have to check the exclusion list before filling the prescription and/or billing the Part D plan? 65 Scenarios The local Community Pharmacy is located in Florida and provides assistance to many visitors. Mary Smith has brought in a prescription from the local clinic. The clinic does not participate in Medicare/Medicaid, but Mary has a Part D benefit and would like her medication to be paid for by her Part D Plan. Her prescription is from Dr. Tim Tucker. Does the pharmacy have to check the exclusion list before filling the prescription and/or billing the Part D plan? YES 66 33