In a special advisory bulletin issued last week, HHS' inspector general's office warned healthcare organizations against employing or contracting with providers that have been excluded from federal health insurance programs.
Thanks to expanded authority from the Balanced Budget Act of 1997 and the Health Insurance Portability and Accountability Act of 1996, that warning has new regulatory teeth. Infractions can cost excluded providers and their employers up to $10,000 per item or service provided. In addition, employers are subject to paying triple the amount claimed, and they could also be excluded from the federal programs.
The laws prohibit the payment of any federal money to excluded providers.
"Exclusion is one of the most important tools we have to protect beneficiaries and stem fraud and abuse in federal health programs," said HHS Inspector General June Gibbs Brown.
The bulletin urges healthcare organizations to perform background checks and search the inspector general's World Wide Web site, which lists 17,000 individuals and provider organizations excluded from federal health insurance programs, such as Medicare, Medicaid and Tricare. The Web site is www.hhs.gov/oig.
The inspector general's office expects to exclude about 3,000 providers in 1999, almost as many as the 3,021 excluded in fiscal 1998. Last year 2,569 people were excluded because of healthcare crimes, convictions and license revocations, while 452 were banned for failing to repay federal health education assistance loans. That total is eight times as many as the 371 excluded in 1988.
The advisory bulletin listed five situations that could expose excluded parties and their employers to civil monetary penalties. They include pharmacy, billing and administrative work performed in connection with services billed by an excluded provider, even when those services weren't for direct patient care.
"We don't think (employing excluded providers) is a very widespread practice," said Alwyn Cassil, a spokeswoman for the inspector general. "But we don't have a good sense of the incidence either."
Cassil said the agency has not yet applied the civil monetary penalties against any organizations, because the final regulations implementing the balanced-budget law weren't published in the Federal Register until July.
"The purpose of this is to put the industry on notice. We've had a number of questions about what exactly does this mean for providers employing people," Cassil said.
"They should know that they have this potential liability and should be checking to see if their prospective employees and current employees and contractors are excluded," she said.