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How to safeguard your facility: Use OIG's excluded-provider list

Rehab Regs, March 11, 2004

If you've heard of the Office of Inspector General's (OIG) excluded provider list, you know it's a list you don't want to be on. But you can use the list to your advantage when hiring new staff to avoid potential mishaps.

The OIG maintains a database of individuals and entities that have been excluded from participating in federally funded healthcare programs, including Medicare and Medicaid. According to the OIG, bases for exclusion include convictions for program-related fraud and patient abuse, licensing board actions, and default on Health Education Assistance Loans.

Anyone on the OIG's exclusion list is penalized in the following ways:

No payment will be made by any federal healthcare program for any items or services furnished, ordered, or prescribed by an excluded individual or entity.

No program payment will be made for anything that an excluded person furnishes, orders, or prescribes. This payment prohibition applies to the excluded person, anyone who employs or contracts with the excluded person, and any hospital or other organization where the excluded person provides services.

You may be thinking, "If I follow the rules, why should I care about this?" The answer is simple: You want to remain off the list, and you want to receive reimbursement for all the services you provide. An easy way to ensure both is to incorporate the list into your hiring process.

"Use [the list] if you're hiring someone who is going to be billing Medicare," says Nancy J. Beckley, MS, MBA, president of Bloomingdale Consulting Group in Brandon, FL. "If you have a corporate-compliance plan, you have a duty when hiring someone to check the list in order to mitigate any potential harm that could occur."

There could also be liability issues if you hire an individual who has participated in known fraudulent activity. Consulting the list can easily help you avoid a potential lawsuit.

"You could be opening yourself up to a lot of liability," Beckley says. "It's analogous to hiring a felon. These databases are out there and you have to use them."

The list is easy to search in either the online or downloadable database. If you choose to search online, enter the name of the individual you are considering hiring or contracting with, or enter his or her business' name.

You can also search by state, general classification (e.g., therapist or consulting firm), or by exclusion type (i.e., misdemeanor healthcare fraud).

If you enter an individual's name in the database and find a match, cross-reference the listed date of birth and address with those listed on his or her job application. You can also cross-reference by Social Security number. Print out the results of your search and include them in the individual's personnel file.

Therapy Services Associates, PC, in Lovington, NM, has run list checks for new hires for a year and a half. When CMS directed facilities to consult the exclusion list, staff at Therapy Services checked all current employees and have checked another 20 new hires to date. So far, no one who has applied for a job at the facility has been on the list, says Melanie Smith, chief financial officer.

"We print out the sheet and put it in the personnel file so if an auditor comes in, we're in compliance," she says.

Similarly, before signing any contracts with providers or vendors, Banner Health in Colorado requires that a staff member search the list and note the findings in the contract. "We attach the results prior to signing it or else the contract won't go through," says Carol Ramsey, MS PT, CCM, Banner Health's regional director of rehabilitation.

Ramsey suggests searching both by the company name and the name of the principal owner because an unscrupulous individual could change the name of a listed company and continue to operate under an alias.

"I pretty much do a search on everyone," Ramsey says. "It doesn't take any time, and it can't hurt."

When discussing fraud, even the OIG's excluded-provider list won't cover all of your bases. There may be unethical individuals who haven't been caught, or other entities that have reinvented themselves. "A lot of these folks got themselves into trouble and have returned under another name," says Judy Thomas, director of reimbursement and regulatory policy at the American Occupational Therapy Association in Bethesda, MD.

Thomas suggests always checking referrals, whether you're looking to hire a staff member or an outside consultant.

"When you hire someone to fix your roof, you want to get a reference from someone who has used him or her before," she says.

"Why be any less careful with your reputation?"

Editor's note: Visit www.oig.hhs.gov and click on "Exclusions Database" to view the OIG's excluded-provider list.

Many facilities would rather be safe than sorry

When Barker F. Keith II started Lakeway Aquatic Therapy and Wellness Center in Austin, TX, he had a lot to think about. In order to meet all of the obligations of a new business owner, Keith decided to outsource his billing to an out-of-state agency.

The agency had good references, and its staff coached Keith and his employees through the clinic's opening from a billing perspective. But soon, things began to go sour. Claims were lost or never filed. When all was said and done, Keith had lost more than $200,000-and he almost lost his business.

If there is a bright side to this story, it's that Keith learned to check and double check whenever he works with an outside vendor or plans to hire a new staff member. "Customer testimonials play a certain role, but you also have to have checks and balances in place to constantly monitor vendors," says Keith.

One way to do so is to have regularly scheduled contact with a manager at the facility. This is easier if the vendor is within driving distance of your clinic in case anything goes awry and a meeting is needed. Managers from Keith's new local billing vendor visit his center once a month to ensure smooth transactions. "It's different if you're buying Band-Aids®-then you can purchase from the vendor with the best price," says Keith. "But when a vendor is providing a service, there's more you need to look at."

Additionally, Keith suggests that someone keep an eye on all business activity that is being outsourced.

"Have someone check that the billing is being done correctly," Keith says. "Don't just assume it's being done."

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