Medicare Compliance & Reimbursement

Take a look at the different types of exclusions and what they entail.

Consider this scenario: You see a patient for the first time and realize that he needs physical therapy for his hip. So, you refer him to the adjacent physical therapy group that just happens to be attached to your orthopaedic practice. After six weeks of therapy, he’s recovered. He still feels stiff, but you know that he really doesn’t need any more medical assistance. However, Medicare doesn’t know that, so—just this once—you decide to fudge your documentation and send him back to physical therapy for another eight weeks, gaining a hefty profit. That is considered Medicare fraud, and when “just this one time” becomes a habit, the Office of Inspector General (OIG) takes notice, leading tocivil and/or criminal charges and oftentimes exclusion from federal and stateprograms.

What Is An Exclusion?

The OIG has two categories of exclusions under its mandates, and though they are readily defined, much grey area exists. How the OIG discerns the severity, the circumstances, and the content of an exclusion depends on the level of fraud, parties involved, location, and more. In a nutshell, a provider or supplier who commits fraud, while providing services or supplies under one of the federal or state health programs, and is proven guilty, can be banned from future participation in the programs.

“The bases for exclusion are listed in the statute (42 USC 1320a-7), and can be either mandatory or permissive, meaning that the OIG is either required or may exclude the provider/supplier depending on the conduct,” explains Michael D. Bossenbroek, Esq., of Wachler & Associates, P.C. in Royal Oak, Michigan.

Mandatory exclusions. For the more serious offender, the OIG delivers a comprehensive and grave sentence. This type of exclusion is automatic because the level of fraud is at its zenith. Here are some examples that Bossenbroek gives that might lead to a mandatory exclusion:

• Patient abuse or neglect
• Conviction of crimes related to the Medicare/Medicaid programs
• Felony conviction related to healthcare fraud
• Felony conviction related to controlled substance
• Conviction of two mandatory exclusion offenses
• Conviction of three or more occasions of mandatory exclusion offenses

For example, a November OIG news release outlined the exclusion details of a New Jersey OB/GYN who’d agreed to a 20-year exclusion from all federal healthcare programs after the OIG found him guilty of submitting thousands of false claims for services that were unnecessary, unsupervised or provided by unqualified staff, or not provided at all. He was also forced to pay back $5.25 million under the False Claims Act (FCA) by the OIG.

Permissive exclusions. For those rule breakers who require just a slap-on-the-hand, the OIG reasons that they deserve a permissive exclusion. When providers receive minor or misdemeanor convictions under healthcare laws, their punishments are not as severe. Take a look at this quick list of permissive exclusion examples from Bossenbroek:

• Misdemeanor conviction relating to healthcare fraud
• Convictions relating to fraud in non-healthcare programs
• Convictions relating to obstruction of an investigation
• Misdemeanor conviction relating to controlled substance
• License revocation or suspension

There Are Exceptions to the Rule

Due to the circumstances of location, exceptions are sometimes made. “Waivers are only available for those excluded providers who are the sole community physician or the sole source of essential specialized services in a community,” Bossenbroek says. “They cannot be granted to anyone excluded based on a conviction related to patient neglect or abuse.”

Read the fine print. Though the OIG has the authority to change an individual or entity’s exclusion status, the excluded party cannot gain the waiver directly from OIG upon request. (See Section 1128(c)(3)(B) of the Social Security Act (SSA) here to identify the exclusions and who has the authority to waive https://oig.hhs.gov/exclusions/authorities.asp.)

“A waiver may only be requested by the administrator of a federal or state health program,” the OIG exclusions’ FAQ section says. Bossenbroek adds, “When a waiver is granted, payment is permitted only for items and services that are outlined under the scope of the waiver, but very few waivers have been granted.”

Of note. The federal and/or state healthcare agency that provides the waiver sets the parameters for the excluded individual, outlining the specifics of the waiver. Factors such as practice location boundaries, definitions of particular services allowed, hospital and office limitations, and prescription restrictions could be part of the paperwork under the waiver.

Time Limits. If you have time to peruse the OIG’s List of Excluded Individuals/Entities (LEIE), you’ll find that the time restrictions for exclusions vary according to the type—mandatory or permissive—and are often determined by the fraudulent activity itself.

“The statute, in laying out categories of actions that warrant exclusion, also imposes for many of these exclusions minimum or baseline periods of exclusion,” Bossenbroek says. “42 CFR 1001.102 addresses by regulation the length of exclusion for mandatory exclusions, which is a minimum of five years, unless there is a conviction for three or more occasions of mandatory exclusion offenses, in which case it will be permanent exclusion.”

He adds, “For permissive exclusions, Subpart C of Part 1001 of the regulations establish a period of exclusion for each category, but then set forth aggravating or mitigating circumstances that can be considered to lengthen or shorten that period.”

Tip: On rare occasions, providers and suppliers are unaware that they’ve been excluded for one reason or another. It is always a good idea to periodically check the various federal healthcare agencies and your MAC’s list of excluded individuals to ensure that your name isn’t on one.

To take a look at the OIG’s FAQ on exclusions, visit https://oig.hhs.gov/faqs/exclusions-faq.asp.