Indiana State Medical Association
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Legal Update
from Krieg-Devault LLP
Do you do business with an excluded provider?

Many Indiana physician practices have received demand letters from the Medicaid Fraud Control Unit (MFCU). The letters assert the practice employs or does business with persons or entities excluded from a federal health care program for which the practice is subject to severe penalties under the Federal Civil Money Penalties Act.

To prevent an enforcement action, practices should carefully screen all prospective employees, contractors and other vendor applicants. Practices should require them to disclose in writing all past and current surnames and business names, as well as all current licenses and permits. The applicants should disclose if they have been excluded from participation in any federal health care program. Additionally, applicants should disclose in writing, any actual or pending claim or conviction against them that are known at the time of application.

Practices must also cross-check all prospective applicants’ surnames and business names, whether past or present, with each of the following government databases:

  • Health and Human Services, Office of Inspector General’s (OIG) list of Excluded Individuals and Entities available here; and
  • General Services Administration’s (GSA) list of parties excluded from federal programs available here.

Any applicant inquiry that prompts an exclusion notice from either of the above databases is evidence an applicant has been excluded from participation in a federal health care program and the applicant should be rejected, without exception, from doing any business with the physician practice.

Lastly, the practice should conduct an ongoing screening of all employees, contractors and vendors for at least six months, to verify they have not been added to either the OIG or the GSA databases since the last inquiry. As before, any inquiry that prompts an exclusion notice from either database should prompt an immediate termination of the business relationship without exception. To do otherwise, leaves the physician practice vulnerable to an enforcement action by the MFCU and/or the OIG that could result in severe penalties, including but not limited to civil money penalties, the potential for treble damages and exclusion from the Medicare and Medicaid programs.

If you have questions or require additional information regarding this issue, e-mail Leigh Ann Lauth O’Neill or call her at (317) 238-6346.

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