OIG Background Check Explained

HHS-OIG recommends screening monthly. No federal statute or regulation requires a private provider to check the LEIE, but OIG updates it every month, so in its words "screening employees and contractors each month best minimizes potential overpayment and CMP liability." You should screen before you hire or contract with anyone, then rescreen current staff and contractors on a regular cycle; monthly is the cycle OIG recommends. (OIG Updated Special Advisory Bulletin on the Effect of Exclusion, May 8, 2013, p. 15)

Approach: Our datasets hold the LEIE exclusion file but not OIG or CMS guidance on how often to screen, so I read OIG's 2013 bulletin and the current text of 42 CFR 455.436 on eCFR. I did not check individual state Medicaid rules.

What OIG says (2013 bulletin, "Frequency of Screening")

• Providers "should check the LEIE prior to employing or contracting with persons and periodically check the LEIE to determine the exclusion status of current employees and contractors."
• "Providers are not required by statute or regulation to check the LEIE … providers may decide how frequently to check the LEIE."
• CMS issued State Medicaid Director Letter #09-001 in January 2009. It recommended that states require providers to screen all employees and contractors monthly.

The one federal monthly mandate applies to states, not providers

• Under 42 CFR 455.436, the state Medicaid agency "must" check the LEIE and EPLS "no less frequently than monthly." Those checks cover enrolled providers and anyone with an ownership or control interest who is an agent or managing employee of the provider. Identity must also be confirmed at enrollment and reenrollment. (eCFR, 42 CFR 455.436)
• According to the bulletin (footnote 27), CMS said this rule does not require states to make their Medicaid providers screen their own employees and contractors each month. CMS does recommend that states consider making it a requirement, including for managed care entities. Some states may impose it on their providers through their own rules.

Who to screen (vendors included)

• Look at each job category and each contract. If what the person or vendor provides is paid for by a federal health care program, directly or indirectly, in whole or in part, screen everyone who works in that role or under that contract. Treat contractors, subcontractors and contractors' employees the same way as your own staff. OIG specifically names staffing-agency nurses, contracted ER physician groups, and billing or coding contractors. (pp. 15-16)
• You can rely on a contractor to do the screening, but you should check that it actually happens, for example by requesting and keeping the screening records. Whether or not screening was done, you remain liable for overpayments, and you may face CMP liability if you did not make sure appropriate screening took place. (p. 16)
• Prescribers and ordering physicians: pharmacies, labs, imaging centres and DME suppliers should confirm "at the point of service" that the ordering or prescribing physician is not excluded. (p. 8)

How to document each check

• Keep a record of the first name search (for example a screenshot) and of any follow-up searches you ran to verify a possible match. (p. 14)
• Search every name the person has used, such as a maiden name. The LEIE lists only the name OIG knew at the time of exclusion. (p. 14)
• OIG recommends the LEIE as the main source for exclusion screening rather than SAM or the NPDB. (pp. 17-18)

What's at stake OIG can impose CMPs of up to $10,000 for each item or service an excluded person furnished, plus up to three times the amount claimed, and can exclude the provider. (p. 11) That $10,000 figure is the one in the 2013 bulletin; I did not check whether it has since been adjusted.

If you send me a list of names, NPIs or business names, I can screen them against the LEIE now.

If you employ or contract with someone you know, or should know, is excluded by OIG, and that person provides items or services payable by a federal health care program, you face two separate exposures. First, every federal payment tied to their work is an overpayment you have to return. Second, OIG may impose civil monetary penalties, an assessment of up to three times the amount involved, and exclusion of your own organisation. For conduct after February 9, 2018, the penalty is up to $20,000 per item or service the excluded person furnished. This replaces the $10,000 figure I gave last time, which was the 2013 amount. (eCFR, 42 CFR 1003.200(b)(4) and 1003.210(a)(4))

Approach: Our datasets hold the LEIE exclusion list but not the penalty rules, so I read 42 CFR Part 1003 on eCFR, OIG's 2013 Special Advisory Bulletin on the Effect of Exclusion, and OIG's Health Care Fraud Self-Disclosure Protocol (amended November 8, 2021). I did not check whether the penalty caps have been adjusted for inflation since 2018.

1. Payment is barred, including bundled payments

• No federal health care program payment may be made for items or services furnished by an excluded person, or furnished at their medical direction or on their prescription. This applies however the payment is made, including DRG, capitated and other bundled payments. OIG's example is a hospital that cannot be paid for an excluded nurse's services even though they are not billed separately. (2013 Bulletin, p. 6)
• The bar reaches beyond patient care. It covers surgical tray preparation, entering pharmacy billing data, ambulance driving and dispatch, and administrative or leadership roles such as CEO, CFO, HR director, IT, billing and staff training, "unless wholly unrelated to Federal health care programs." (pp. 7-8)
• It does not matter whether the person is an employee, a contractor or a volunteer, or whether you pay them at all. (pp. 11-12)

2. Civil monetary penalties under the current regulation

Item	Current rule (42 CFR 1003.210)
Penalty	Up to $10,000 for conduct on or before Feb 9, 2018; up to $20,000 for conduct after that date, for each item or service the excluded person provided, furnished, ordered or prescribed, whether billed separately or not
Assessment	Up to 3 times the amount claimed for separately billed items, or up to 3 times your total costs for the excluded person (salary, benefits, taxes, other value) for items not billed separately
Exclusion	OIG "may impose" exclusion of the employer as well (1003.200(b))
Aggravating factors (1003.220)	Violations over a long period, a pattern of violations, $50,000 or more involved, or actual or potential patient harm

The penalty applies when the employer "knows, or should know" the person is excluded (eCFR). Because the LEIE has been publicly available since at least 1999, OIG expects employers to have checked it. (2013 Bulletin, p. 11)

3. Overpayments that you keep become a separate violation

• A Medicare or Medicaid overpayment must be reported and returned by the later of 60 days after it is identified or the date the related cost report is due. Keeping it past that deadline can create liability under the Civil Monetary Penalties Law and the False Claims Act. (Self-Disclosure Protocol, p. 2) Not reporting and returning a known overpayment carries its own penalty of up to $20,000 per item or service (1003.200(b)(8), 1003.210(a)(8)).

4. Using a contractor to screen reduces risk but does not remove it If a staffing agency sends you an excluded nurse, you are liable for the overpayment and may be liable for CMPs. You can reduce or eliminate the CMP exposure if you can show you reasonably relied on the agency's contractual duty to screen and checked that it was doing so. (2013 Bulletin, p. 12, fn. 21)

5. Limited situations where it is allowed You may employ an excluded person only if federal programs pay nothing, directly or indirectly, for their work, or if they serve only patients outside federal health care programs. You do not need a separate payroll account for them. (pp. 12-13)

6. Self-disclosure, OIG's route to resolve it OIG directs providers that find this problem to its Self-Disclosure Protocol. (2013 Bulletin, p. 13) Under the 2021 Protocol:

• Before disclosing, you "must screen all current employees and contractors against the LEIE" and then disclose every excluded person in one submission. The submission must include:
  • the person's identity and duties, and the dates they worked for you;
  • your background checks and screening process;
  • the flaw in that process that let them through;
  • how you discovered the problem;
  • your corrective action, with a copy of any revised policy. (pp. 8-9)
• Damages: for services billed separately, the total amounts claimed and paid. For services not billed separately (nurses, therapists, billing and administrative staff), your total employment cost during the exclusion multiplied by your federal payor mix, broken down by program. (p. 9)
• Settlement: OIG's general practice is a minimum multiplier of 1.5 times single damages, applied to amounts paid rather than amounts claimed. Excluded-person matters fall under the $20,000 minimum settlement (kickback matters have a $100,000 minimum). (pp. 12-13)
• Benefits: a timely SDP submission suspends the CMS 60-day overpayment reporting obligation. OIG presumes it will not require a corporate integrity agreement; it reports that in 330 settlements from 2016 to 2020 it released all disclosing parties from permissive exclusion without integrity measures. As a condition of entry, you must waive statute-of-limitations defenses within the CMPL's 6-year period. (pp. 2, 4)
• Other agencies: OIG coordinates with DOJ, and any disclosure that involves criminal conduct is referred to DOJ. (p. 12)

7. Consequences for the excluded person The excluded person can also face their own CMPs, an assessment of up to three times the amount claimed, False Claims Act liability, and possible criminal prosecution. Violating an exclusion is also grounds for OIG to deny reinstatement. (2013 Bulletin, p. 9)

If you think you have a match, send me the name, NPI or business name and I can check it against the LEIE now.