A Simple Check that Can Save Thousands (and Prevent Sanctions)

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Whenever we survey and have discussions with doctors around the state about their practices, hiring and maintaining staff almost always enter the conversation. The last thing that a doctor needs is to hire a seemingly very qualified candidate and find out too late that the candidate has previously been excluded by Medicare or another federal program.

Federal law gives authority to the Office of Inspector General (OIG) to impose Civil Monetary Penalties to practices that hire an employee/contractor who has been excluded from Medicare (or other federal programs). If the employee/contractor is involved in any part of service to the Medicare (or other federal program) patient, it can create a penalty liability as much as $10,000 PER service rendered.

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Surprisingly, an analysis of the over 74,000 sanctioned persons on the Medicare Exclusion List revealed that there were over 1,800 individuals on the List that were from chiropractic offices. Note that the government can and does exclude both chiropractic physicians and other licensed and unlicensed staff members. Additionally, there were over 3,500 unaffiliated individuals on the list from a variety of administrative positions. A review of the Office of Inspector General enforcement action list shows that there were several excluded individuals who were employed in 2020, amounting to over $250,000 in fines, penalties, and recoupments to the hiring entity. Do not assume that exclusion is so rare that you need not be diligent, as there are several chiropractic practices on that same OIG list.[1]

Which Employee/Contractors Does this Cover?

This restriction applies to nearly every employee/contractor in a private chiropractic practice whether licensed or unlicensed. It includes anyone who provides a direct service, even if the service was delegated. Additionally, the rule specifically includes the employee/contractor who handles administrative services (billing, collection, payment from patients, etc.) for any Medicare (or other federal program) service and accounting for those services.

Although it may be technically possible to employ an excluded individual as a receptionist who only checks in patients for their appointments, this may be a dangerous gamble, because many practices use staff members for multiple duties. In fact, the Office of Inspector General indicates, “In many instances, the practical effect of an OIG exclusion is to preclude employment of an excluded individual in any capacity by a health care provider that receives reimbursement, indirectly or directly, from any Federal health care program [emphasis added].”1

The Illinois Chiropractic Society strongly recommends against employing an excluded individual in any capacity.  It is simply too easy to forget or be tempted to delegate prohibited tasks to that person and thereby put your practice in jeopardy of sanctions.

What Happens if You Do Hire an Excluded Employee/Contractor?

As mentioned above, the Office of Inspector General can impose penalties of up to $10,000 per service rendered AND a recoupment of three times the cost of the service. As an example, if you saw a mere three Medicare patients in a week and used chiropractic manipulative treatment and interferential stimulation on each visit, the penalties would be 3 x 2 x $10,000 + (approximately) $540 more in recoupment = $60,540 – in only a week.  However, this calculation is only for one week.  The government will be able to recoup for the entire tenure of the sanctioned employee/contractor, and the resulting financial impact may be crippling.

I Don’t See Medicare Patients, So No Worries?

No.

Many private insurance companies require an exclusion check for all employee/contractors in the provider manuals. Please review ALL of your provider contracts to determine if this is a requirement. However, the ICS still strongly recommends against employing an excluded individual due to the risks enumerated above.

Also, do not forget that chiropractic physicians cannot opt out of Medicare. See this article for more information.

What is the Best Practice to Prevent from Employing an Excluded Individual?

All employee/contractors should be checked BEFORE they begin working in your practice. This will prevent any potential issues surrounding an excluded individual.

However, you most likely have not verified your current employee/contractors recently. OIG updates the database monthly and, as a result, recommends employers should check employees/contractors every month.[2]

If you find it impractical to verify every month, the ICS recommends checking each quarter for existing employees and monthly for employees in their first year of hire. This practice would provide a reasonable approach while protecting your practice.

How Do I Check My Employee/Contractors?

There are three places where employees should be checked:

  1. OIG Exclusion Database (Medicare specific)
    • Simply key in the first and last name of your employee(s) and click search. If more than one name is returned, you can click the “Verify” link on the right to verify the person excluded is your employee.
  2. System for Award Management (SAM) (Other Federal Programs)
    • This ensures that the employee does not have exclusions from other programs that would impact his/her status. These results are more detailed than the Office of Inspector General list, which would help ensure you are identifying the appropriate individual.
  3. Illinois HFS Provider Sanction Search (Illinois Medicaid)
    • Start by entering the last name in the search field. If too many names appear, you can either review the multiple entries (see pages also) or include the first name following the last name in the search field.

Conclusion

Careful checking each of the databases prior to bringing on a new employee or contractor would contribute greatly to protecting your practice from exclusion violations.  The importance of verifying this information is confirmed by the inclusion of chiropractic offices on the list of practices that have been sanctioned with fines and penalties for these violations.,


[1] https://oig.hhs.gov/fraud/enforcement/cmp/cmp-ae.asp

[2] https://oig.hhs.gov/exclusions/files/sab-05092013.pdf

About Author

Marc Abla, CAE

Marc Abla began working at the Illinois Chiropractic Society in 2002 and became the Executive Director in 2008. He brings his extensive financial, administrative and association experience to the ICS. He is a Certified Association Executive and a graduate of the Certified Leadership Series through the Illinois Society of Association Executives. Additionally, he is a member of the Illinois Society of Association Executives, the American Society of Association Executives, Association Forum, Congress of Chiropractic State Associations, and the American Chiropractic Association.


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