Checking State Medicaid Exclusion Lists is Critical in Healthcare Exclusion Screening

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The Department of Health and Human Services (DHHS) Office of Inspector General (OIG) recently released a report determining whether Medicaid providers that States reported as having been terminated for cause continued to participate in Medicaid in other States. The study follows last year’s report recommending improvements to CMS’s process for sharing termination information among the States.

According to OIG analysis of Medicaid termination data, 12 percent of providers (295 of 2,539) terminated for cause in 2011 were still participating in other States’ Medicaid programs in January 2014. The Medicaid programs paid over $7.4 million to 94 providers for services performed after each provider’s termination for cause by the initial State.

In addition to the termination data, the findings in the OIG report discovered that State Medicaid agencies faced challenges with receiving information about providers terminated for cause by other State agencies due to two reasons: (1) not having a comprehensive data source for identifying all terminations for cause and (2) differentiating terminations for cause from other administrative terminations in the data sources that are available.

Insufficient Data Source

Although there are several potential data sources, there is still no solitary source comprehensive enough to properly allow states to identify all the fee-for-service and Medicaid managed care providers enrolled in the State Medicaid programs and those terminated for cause.

Inconsistent Terminology

Adding to the frustration, the lack of uniform terminology makes it increasingly challenging for State agencies to differentiate provider termination status and identify terminations for cause by other states. For example, state agencies often submit termination reasons that reference to the action taken by the State Agency (i.e., banned, indictment, suspension), rather than the reason for the termination (i.e., credentialing violation, policy violation, criminal conviction).

Unrestricted Enrollment

Moreover, State agencies often do not enroll all providers, which create challenges in identifying their managed care providers and terminating their Medicaid participation. When States do not require providers who participate in Medicaid managed care to enroll directly in their Medicaid programs, two problems occur:

  1. Without a comprehensive roster of all providers who participate in their Medicaid managed care plans, a State Medicaid Agency would have trouble determining whether a provider who was terminated for cause by another State was participating in its own State Medicaid program via one or more managed care plans.
  2. Even if a State Medicaid agency determined that such a provider was participating in one or more of its Medicaid managed care plans, it may have limited authority to terminate that provider’s participation in Medicaid.

Prior to the Patient Protection and Affordable Care Act’s (ACA) mandate prohibiting terminated providers from participating in their Medicaid program, the terminated provider could potentially participate in another State’s Medicaid program, leaving the second State’s program vulnerable to fraud, waste and and/or abuse committed by the provider. To prevent this from happening, the ACA requires States to terminate a provider’s participation in their respective State Medicaid programs if that provider is terminated for cause—for reasons that may include fraud, integrity or quality. Although the CMS Termination Notification data is designed to identify terminated providers, it’s insufficient because States’ participation is encouraged by not required.

Given the OIG’s latest findings, it’s critical for healthcare organizations to screen their staff against all available State Medicaid exclusion lists in conjunction with the OIG List of Excluded Individuals and Entities (LEIE). 1 in 10 providers terminated in one state continue to treat Medicare patients in another state, according to the latest data. If your organization’s exclusion screening program does not incorporate State Medicaid exclusion lists, your organization could be at risk of having an excluded provider on your staff. Although state exclusions may eventually make it to the OIG LEIE database, it can take years in some cases. With monetary penalties assessed per treatment per patient, the penalties and fees can quickly add up. Therefore, it’s highly recommended that healthcare employers screen their staff against the publicly available State Medicaid exclusion lists in order to remain compliant and avoid costly penalties.

When was the last time you reviewed your organization’s exclusion screening program? Contact us to learn how PreCheck can help you streamline your exclusion screening process.