Medicaid Exclusion Checks Best Practices for 2015 and Beyond

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Although there are currently no bylaws instating the requirement of exclusion checks, the Office of Inspector General (OIG) List of Excluded Individuals and Entities (LEIE) mandates employers to know the exclusion status of their employees and contractors during their entire lifecycle with the company. According to the OIG, there are over 66,000 healthcare providers that are currently excluded from all federal healthcare programs. Without a system in place for checking on the exclusionary status of employees and vendors, employers are vulnerable to costly Civil Monetary Penalties (CMPs), upwards in the millions, says Frank Pierce, PreCheck’s Principal Consultant for Sanction Screening.

There are 34 publically available State Medicaid Exclusions Lists that exist—many of which do not report to the OIG LEIE on a timely basis, or at all. The OIG updates their database on a monthly basis, so it’s recommended that healthcare organizations run exclusion checks in conjunction with the OIG’s monthly update, which occurs usually around the 10th of each month, Pierce says.

Why is it important to check the state Medicaid exclusion lists?

Employers must have the latest exclusionary status of their employees at all times and simply relying on the OIG or GSA SAM database alone is not enough to ensure compliance with Medicaid exclusion checks. As a best practice, employers must check all available state Medicaid exclusion lists on a monthly basis in addition to the OIG exclusion database. The state and federal level each have distinct standards. There are 27 criteria to get on the federal list—an individual may make it onto the state list but not make it on the federal list.

Both felonies and misdemeanors qualify for exclusion. You can be excluded for either committing fraud and/or misappropriating drugs, says Pierce. “The most common incident we see is a nurse diverting drugs for either personal use or for a friend. These drugs are typically stolen from elderly or vulnerable patients who are dependent on other health providers. When an individual like this gets caught, the hospital would voluntarily discloses self-discovered evidence, otherwise known as Self-Disclosure Protocol (SDP), by reporting their name to the medical or nursing board. If they decide to suspend their license, at the end of each month, the board reports their actions to the state Medicaid office for review. If it meets their criteria, their name is then added to the exclusion list.”

Not all actions, however, will get you excluded. A person may just have a warning or stipulation on their license; that doesn’t qualify them to land on the exclusion list. An exclusion typically only lasts as long as the board action against their license. Mandatory exclusions are a minimum of 5 years and permissive exclusions are for the length of the board action.

What should you do if you discover you have hired an excluded individual?

Anyone from physicians to pharmacists, billers to janitors can be excluded. In an event you come across an excluded employee, you should immediately suspend the individual and initiate an investigation to ensure the provided information is correct. Here at PreCheck, we make a primary verification by calling the sanction authority to confirm that the status is indeed current. You may see an inactive sanction online presented as active because the database hasn’t been updated.

“I highly urge healthcare employers to run exclusion checks on a monthly basis because you’re limiting your liability to 30 days,” says Pierce. “The fines can be up to $10,000 per day, per patient, per item. For example, if an excluded nurse gives a patient three pills, the fine is already at $30,000.”

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