By Beth Kutscher | January 28, 2015
An increasing number of healthcare companies are being fined for hiring people on U.S. government exclusion lists as HHS' Office of Inspector General steps up its monitoring of hiring.
Fines totaling $9 million were levied in 2014 against 75 healthcare companies, according to ProviderTrust, a company that offers exclusion list monitoring software and services. That's up from 2013's $3.5 million in fines that hit 45 companies.
Excluded individuals include those who have felony convictions for patient abuse, Medicare or Medicaid fraud, or producing or distributing controlled substances. Individuals also could face exclusion for misdemeanor convictions or having their license revoked.
“The problem for providers with the exclusion lists is that it's really low-hanging fruit for the government,” said Lisa Rivera, a former assistant U.S. attorney in Nashville who now practices at law firm Bass, Berry & Sims.
Unlike some other types of healthcare fraud, this type of violation is easy to find and to prove, which also has led to more whistle-blowers.
As a result, more providers have been self-disclosing to prevent paying treble damages, Rivera said.
Among the largest penalties last year was a fine of nearly $2 million against Diagnostic Laboratories and Radiology for employing four excluded individuals; a fine topping $497,000 against Kmart Corp. for employing one excluded individual; and a fine of more than $470,000 against UCLA for employing an excluded individual.
The Patient Protection and Affordable Care Act raised the stakes for providers by recommending that healthcare employers perform compliance checks as frequently as monthly. In addition, providers also are required to follow state Medicaid exclusion lists, with the ACA language suggesting that an individual excluded in one state is now excluded in all states.
The problem for providers is that states vary in how much data they report from their own exclusion lists to the OIG, said Michael Rosen, who co-founded ProviderTrust. The OIG exclusion list contains only data on 52% of the individuals who appear on state exclusion lists, a ProviderTrust analysis found.
In Alabama, for example, 87.3% of excluded individuals are reported to the OIG, but in Florida, none are, the analysis found. “You have a false sense of comfort if people just go by the OIG,” Rosen said.
The OIG sets a work plan each year, in which it outlines areas of focus. Although it doesn't mention exclusion list enforcement specifically, the agency does give some clue to which companies might be scrutinized.
In recent years, that has meant post-acute-care providers have needed to be on alert. “The long-term-care sector has just been hammered recently with fines,” Rosen said.
And the OIG's focus on the sector is likely to continue. “They are beefing up their efforts for this year in the area of home health,” Rivera said.
The additional level of scrutiny also has led to greater competition among vendors that offer monitoring services.
“There are definitely a lot of new players in this industry,” said Steven Grossman, director of marketing at Streamline Verify, which also offers software and services to help with exclusion list monitoring. Even companies that offer criminal background checks are starting to offer specialized services specifically for healthcare providers, he added.
The OIG is finding new ways to catch violations, Grossman said, pointing to one example where exclusion list violations were found during a random audit.
“Just look at the trends,” he said. “It's a no-brainer to protect yourself.”