At a recent conference, Greg Demske, the new Chief Counsel to the OIG, said that his office will be issuing new guidance explaining how OIG will resolve cases where an entity hires or contracts with an excluded individual.  Given that the last guidance on this topic was issued in 1999, this should be a welcome update from the government.  The OIG has long had the authority under its Civil Monetary Penalties law to assess penalties and damages against an entity that employs or contracts with an individual that has been excluded from participating in federal health care programs, including Medicare and Medicaid.  This authority, found at 42 U.S.C. § 1320a‐7a(6), allows the government to assess damages of up to 3 times the amount paid for claims submitted by the entity, or penalties up to $10,000 for each items or service provided.  A quick look at OIG’s website and you can see that it has pursued several cases against entities that employ or contract with an excluded individual, and the damages for non-compliance can be quite high.  For example, just in the last six months, OIG has settled some of these cases for the following amounts:  $73,428, $83,481, $121,010, $200,812, $207,440, and $831,871.  OIG has even settled cases based on this authority for amounts over $1 million.

Our Insight. Your Advantage.  As a former Senior Counsel in the OIG and Special Assistant U.S. Attorney who knows Mr. Demske, and personally handled some of these cases for the OIG, I can attest to the fact that the government will continue to ramp up its enforcement efforts on this front.  To diminish potential liability, every entity that receives Medicare or Medicaid reimbursements should review its policies and procedures for screening individuals it employs or contracts with to determine if they are excluded from participating in federal health care programs.  If your policies and procedures are not up to date, they may expose your organization to liability and you should consider revising these policies.  Keep in mind, adequate policies and procedures should include screening at initial hire or contracting, and then on periodic or annual intervals.  Also, this authority does not enable the OIG to assess penalties in every situation where you employ or contract with an excluded individual.  Exclusion from Medicare or Medicaid does not necessarily mean that the individual can’t work for a health care entity, it just means that they cannot do certain things.  If you do find that an individual you have employed or contracted with is excluded, you should consider what steps you need to take, including whether the situation warrants a voluntary disclosure to the government.  As mentioned in a previous posting, voluntary disclosure can be appropriate in some cases to lessen the financial impact on your organization for a momentary period of non-compliance.