Physicians News Health news for doctors and patients.
By John W. Jones, Jr., Esq.
New federal legislation expanding the scope of the U. S. Department of Health and Human Services’ (HHS) exclusion authority and a renewed emphasis by the government on criminal enforcement have resulted in an increased number of exclusions of health care providers, particularly physicians, from participation in Medicare, Medicaid and other federal and state health care programs. Given that no payment may be made under the programs to excluded providers and the recent enactment of substantial civil money penalties against anyone who employs or otherwise contracts with an excluded provider, program exclusion can effectively put a physician out of work.
Medicare exclusions of physicians have, for the most part, been based on fraudulent billing or unprofessional conduct. Most recently, HHS announced that of the physicians excluded, most were being excluded for defaulting on federally guaranteed loans. The Office of Inspector General’s (OIG) exclusion authority is quite broad and extends far beyond fraudulent billing and unprofessional conduct. Whether OIG has discretion in excluding a physician from participation in the programs turns directly on the offense for which the physician has been convicted (which includes a plea of guilty and no contest). Surprisingly, however, the offense which may lead to exclusion need not always be related to the delivery of health care services.
Under its mandatory exclusion authority, OIG must exclude from participation in most federal and state programs physicians who have been convicted of a criminal offense (whether it is misdemeanor or felony) related to either the delivery of an item or service under the federal programs or the neglect or abuse of patients. Moreover, in 1996, Congress made significant additions to OIG’s mandatory exclusion authority to include criminal convictions which not only relate to Medicare, but other health care programs operated or financed by any federal, state or local government. Physicians will now also be excluded for a conviction of an offense relating to the unlawful manufacture, distribution, prescription or dispensing of a controlled substance.
The minimum period of mandatory exclusion is five years for the first conviction, ten years for the second and permanent exclusion for the third. Congress enacted the progressive sanctions for second and third offenses which apply to subsequent convictions occurring after August 21, 1997. OIG may also consider aggravating and mitigating factors as a basis for lengthening (but not shortening) the period of mandatory exclusion beyond five years.
Aggravating factors include:
• The amount of financial loss to the government programs.
• The duration of noncompliance by the physician.
• Any significant adverse physical, mental or financial impact on program beneficiaries.
• The sentence imposed by the court.
• The criminal history of the physician.
• Other offenses committed by the physician.
• Adverse action taken against the physician by other federal, state and local agencies as result of the conviction.
• Any previous overpayments to the physician as a result of improper billings.
Moreover, in convictions involving patient abuse or neglect, OIG will consider whether the action that resulted in conviction of the physician was premeditated, was part of a continuing pattern or behavior, or consisted of non-consensual sexual acts.
Mitigating factors are considered by OIG only if aggravating factors are present and justify an exclusion of longer than five years. Mitigating factors include whether:
• The physician was convicted of three or fewer misdemeanor offenses, and the entire amount of financial loss to health care programs due to acts that resulted in the conviction of the physician and similar acts is less than $1500.
• The record in the criminal proceedings, including sentencing documents, demonstrates that the court determined that the physician had a mental, emotional or physical condition before or during the commission of the events that reduced the physician’s culpability.
• The physician’s cooperation with federal or state officials resulted in others being convicted or excluded from health care programs; additional cases being investigated or reports being issued by the appropriate law enforcement agency identifying program vulnerabilities or weaknesses; or the imposition against anyone of a civil money penalty or assessment.
In addition to its mandatory exclusion authority, OIG has discretion to exclude physicians for many other prohibited acts including, but not limited to, certain misdemeanor criminal convictions, obstruction of justice, loss or suspension of license, submission of claims for excessive charges or the provision of unnecessary services, failure to disclose or supply certain information to HHS as required by law, defaulting on federally guaranteed loans and violation of the False Claims Act and Anti-Kickback Statute. The periods of exclusion vary depending upon the grounds for permissive exclusion, as well as certain aggravating and mitigating factors considered by OIG for each offense.
Generally, a mandatory or permissive exclusion will be effective 20 days from the date of the notice of exclusion. Excluded physicians are entitled to certain due process rights, including reasonable notice and an opportunity for an administrative hearing, as well as judicial review.
The impact of an exclusion on a physician can be financially devastating. Unfortunately, many physicians only realize the adverse financial impact when it occurs. If excluded, the physician is prohibited from receiving payment under Medicare, Medicaid and other federal and state health care programs during the period of exclusion.
Additionally, under the Balanced Budget Act of 1997, no one may submit claims on behalf of or contract with an excluded physician without risking substantial civil money penalties. Most legal counsel for institutional health care providers and group practices are aware of this prohibition and, therefore, typically require as a condition of employment that physicians represent eligibility to participate in these programs, making it very difficult, if not impossible, for an excluded physician to obtain staff privileges at any hospital or secure employment during the exclusionary period.
Further, there is no guarantee that an excluded physician will be reinstated at the end of the exclusion period. On the contrary, once excluded, the physician must apply for termination of exclusion and reinstatement at the end of the minimum period of exclusion. OIG will authorize the reinstatement if it determines that the period of exclusion has expired; there are reasonable assurances that the types of actions that form the basis for the original exclusion have not recurred and will not recur; and there is no additional basis for a continuation of exclusion.
As is evident from HCFA’s 1999 Work Plan, OIG has no intention of slowing its campaign of enforcement. In fact, excluding dishonest providers from the programs was one of the first issues raised by the newly formed National Health Care Fraud and Abuse Task Force, which has been established to explore ways to increase timely reporting of convictions by government agencies to OIG.
Given the severe financial impact that program exclusion can have on physicians (and health care providers in general), it is imperative that they are educated to the types of circumstances that lead to program exclusion and take all steps necessary to prevent such exclusion. It would also be prudent for institutional providers and group practices which employ physicians to exercise due care in the employment process, seek the advice of competent health care legal counsel before drafting employment agreements and medical staff bylaws, and view OIG’s website to ensure that the physician in question is not excluded from participation in the programs.
John W. Jones, Jr., Esq., is a member of the Health Law Department at Schnader Harrison Segal & Lewis LLP in Philadelphia, Pa.
