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Excluded Providers – Screening the LEIE to Protect Your Organization

Posted By: Bret S. Bissey, MBA, FACHE, CHC, CMPE / April 28, 2015

Massachusetts-Rhode Island chapter of Healthcare Financial Management AssociationIn a recent issue of Mass Media, the newsletter of the Massachusetts-Rhode Island chapter of Healthcare Financial Management Association (HFMA), Bret Bissey discussed how to protect your healthcare organization by screening the List of Excluded Individuals and Entities (LEIE) database before contracting with excluded health care providers.

One of the areas of compliance risk for healthcare providers continues to be relationships or potential relationships with individuals or entities that are determined by the Health and Human Services Office of Inspector General (OIG) to be excluded from participation in federal health care programs. In an effort to combat healthcare fraud and abuse in our healthcare system the OIG has the ability to exclude individuals and entities. As of May, 2013, the exclusion list contained approximately 51,000 individuals and as of April, 2013 approximately 2,800 pharmacies, laboratories, durable-medical equipment suppliers, medical clinics and other healthcare companies. In addition, in the Massachusetts Executive Office of Health and Human Services (EOHHS) implemented an excluded provider listing in April 2013.

The authority of the OIG to exclude individuals and entities from Federally funded health care programs emanates pursuant to sections 1128 and 1156 of the Social Security Act . The OIG maintains a list of all currently excluded individuals and entities called the List of Excluded Individuals and Entities (LEIE). Anyone who hires or contracts with an individual or entity on the LEIE may be subject to civil monetary penalties (CMP). Inclusion on the exclusion list results from either criminal offenses or misdemeanor convictions. Criminal offences such as Medicare or Medicaid fraud, patient abuse or neglect, financial misconduct, controlled substance felonies, etc, are termed mandatory exclusions. Misdemeanor convictions are termed permissive exclusions and can result from health care fraud other than Medicare or a State health program or fraud in a program (other than a health care program) funded by any Federal, State or local government agency and other activities (such as engaging in unlawful kickback arrangements; and defaulting on health education loan or scholarship obligations, etc.

The primary effect of exclusion is that no payment should be provided for any items or services furnished, ordered, or prescribed by an excluded individual or entity. This includes Medicare, Medicaid, and all other Federal plans and programs that provide health benefits funded directly or indirectly by the United States (other than the Federal Employees Health Benefits Plan). It
is important to note that the obligation is upon the health care provider to assure that all their employees, vendors, contractors, subcontractors, ordering/prescribing providers, etc… are not listed on the LEIE or state excluded provider listing (note: many states like Massachusetts, have published an excluded provider listing). The argument of providers to state “I did not know” or “no one told me” would not be wise to adopt, as the OIG (via numerous publications) has communicated their expectations that health care providers should be routinely screening for excluded provider exclusion.

If a health care provider arranges or contracts (by employment or otherwise) with a person on the LEIE, the provider may be subject to Civil Monetary Penalty (CMP) liability if the excluded person provides services payable, directly or indirectly, by a federal health care program. The CMP could reach $10,000 for every item or service provided for which federal payment is pursued. In addition, an assessment could be applied by the OIG of up to three times the amount claimed, and program exclusion. The provider could be subject to these penalties if an excluded person participates in any way in the furnishing of items or services that are payable, directly or indirectly, by federal health programs. Potential examples of categories of violations include; direct patient care, indirect patient care, administrative and management services, and items or services furnished at the medical direction or on the prescription of an excluded person when the person furnishing the services either knows or should have known about the exclusion. This means that a hospital medical staff member from the community that is not employed, if they are an excluded physician on the LEIE and they are ordering services or an excluded health care professional who works at a hospital or nursing home as a volunteer could present significant liability to your organization. It is important to realize that if a health care provider contracts with a staffing agency for temporary or per diem nurses, that liability would arise for the provider if any of those nurses are excluded.

How to Protect Your Organization

An organization’s compliance program should be dynamic. When you are reviewing the elements of your compliance program one of the issues that has become more objective is screening for excluded providers both and a federal and state level. On May 8, 2013, the Department of Health and Human Services Office of Inspector General’s office issued a Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs. This should be mandatory reading for all Compliance Officers, members of Board of Trustees, CEOs, and Compliance Committee members. Providers should consider focusing appropriate attention, including budgetary resources, on making sure that excluded provider reviews are being performed and that this risk of not fully executing the activity is well understood.

So what are the appropriate steps to make sure your organization is managing this risk? Following your initial screening upon hire, which all entities should be doing, the first question that needs to be answered is, how often to review your active employees and partners against the LEIE? The latest OIG guidance speaks to accomplishing the review monthly. You might want to consider stratifying the review of your applicable individuals and entities for this task; one suggestion might be that caregivers, providers and those involved with any items or services that are furnished, ordered, or prescribed (including vendors, contractors, subcontractors, etc..) are reviewed monthly and everyone else quarterly. Whatever your decision, you will want to memorialize this in an approved policy and then measure your performance to assure the reviews are being conducted, appropriate documentation is created/filed and that corrective actions are being taken.

Insource vs. Outsource

Once you determine the frequency of review, the next question is can you perform the review internally or should the task be contracted to a third-party vendor? Do you have the appropriate staff to be performing this activity? If you decide to perform internally you will need to randomly audit the activity to assure it is being performed properly. One issue to keep in mind is that if you decide to perform the review internally is to make sure you have a mechanism to save the documentation or “proof” that the reviews were performed. One risk of deciding to perform the task internally is when you have staff turnover or competing priorities arise that could restrict your ability to perform the activity.

The risk of not performing this review activity not only presents financial risk to your organization but also potential reputational harm. And, of course, of utmost importance is the possibility of the risk to your patients. There are many reputable vendors in the marketplace who specialize in performing this activity; you might consider speaking with them to better understand all of the services and safeguards they could offer to your institution if you were to contract with them.


All healthcare providers should be very aware that there are individuals and entities that have acted or behaved in a manner that has resulted in them being deemed to be on the LEIE by the OIG or the state of Massachusetts excluded provider listing. Therefore, all efforts should be coordinated by healthcare providers to make sure that those individuals and entities are not anywhere
near our patients or within our healthcare community. We should not underestimate the potential that there may be “bad” people trying to gain employment or become associated with your institution. Some of these people may be intent on committing fraud, others may have a history of victimizing our patients… please take all appropriate measures to review the LEIE and other
excluded party lists frequently to protect all patients and your institution.

Bret S. Bissey, MBA, FACHE, CHC, CMPE

Prior to joining MediTract, Mr. Bissey was the SVP, chief ethics and compliance officer at UMDNJ, where he successfully led the compliance program to adherence with a rigorous five-year Corporate Integrity Agreement with the DHHS/OIG that occurred following a Deferred Prosecution Agreement. Prior to UMDNJ, Bissey served as the director of the Regulatory Compliance Practice at IMA Consulting, the chief compliance and privacy officer at Deborah Heart and Lung Center (operating under a CIA) and the VP of compliance at Cabot Marsh/QuadraMed. Mr. Bissey earned a Bachelor of Science in business administration and marketing from Shippensburg University of Pennsylvania and an MBA in marketing and healthcare administration from Wilkes University. Mr. Bissey is a frequent national speaker on healthcare compliance and is the author of The Compliance Officer’s Handbook. He is a Fellow of the American College of Healthcare Executives and a member of the Health Care Compliance Association (CHC), American College of Medical Practice Executives and the Healthcare Financial Management Association.