QUESTION:
We just discovered that we hired a nurse who was listed on the OIG’s List of Excluded Individuals and Entities while she worked for us.  What do we need to do and how does the OIG determine damages for a provider such as a nurse who does not make referrals of federal health care program beneficiaries to the Hospital?

ANSWER FROM HORTYSPRINGER ATTORNEY HENRY CASALE:
Unfortunately, if a hospital or other provider who received federal health care program reimbursement such as Medicare, Medicare and/or Tri-Care employs or contracts with  an individual or entity that is listed on the OIG’s List of Excluded Individuals and Entities (the “LEIE”), once discovered, the health care entity must make a self-disclosure to the Office of Inspector General (“OIG”) using the OIG’s self-disclosure protocol.

There is a section of the OIG’s protocol that specifically addresses self-disclosures involving excluded individuals. That Section of the Protocol states that the self-disclosure must include: the identity of the excluded person and any provider identification number; the job duties performed by that person; the dates of the person’s employment or contractual relationship; a description of any background checks that the disclosing party completed before and/or during the person’s employment or contract; a description of the disclosing party’s screening process (including any policy or procedure that was in place) and any flaw or breakdown in that process that led to the hiring or contracting with the excluded person; a description of how the conduct was discovered; and a description of any corrective action (including a copy of any revised policy or procedure) implemented to prevent future hiring of excluded persons.

One additional requirement that you might not expect is that the OIG also requires that before a self-disclosure involving an excluded individual or entity can be submitted to the OIG, the disclosing party must screen all current employees and contractors against the LEIE.

OK so once you have this information, you need to provide damage information.  Typically, damages for a self-disclosure are based on the items or services furnished, ordered, or prescribed by the excluded person.  However, the OIG understands that when the excluded person provided items or services that are not billed separately to Federal health care programs, such as your self-disclosure that is due to your hiring an excluded nurse, the damages amounts can be difficult to quantify.

In this instance, the OIG requires you to first determine your total costs of employment or contracting during the period of exclusion which includes all salary and benefits and other money or items of value, health insurance, life insurance, disability insurance, and employer taxes paid related to employment of the person such as the employer’s share of FICA and Medicare taxes.

This total amount is then multiplied by the disclosing party’s revenue-based Federal health care program payor mix for the period of time that the excluded individual was employed by the hospital.

If the disclosing party can measure the Federal payor mix for the department or unit in which the excluded person worked, it is appropriate to apply that payor mix. If the departmental payor mix cannot reasonably be measured, the disclosing party must apply the payor mix for the whole hospital. When the disclosing party is using a Federal health care program payor mix, the disclosure must include a separate calculation for each Federal health care program. For example, if the disclosing party’s Federal payor mix is 60 percent, the disclosure should break down how the Federal health care programs make up that 60 percent, such as 40 percent Medicare, 10 percent Medicaid State A, 5 percent Medicaid State B, and 5 percent TRICARE.

The resulting amount will be used as a proxy for the amount paid and the single damages to the Federal health care programs resulting from the employment of the excluded person.   The OIG Self-Disclosure Protocol states “The specific multiplier that we accept may vary depending on the facts of each case. OIG’s general practice in CMP settlements of SDP matters is to require a minimum multiplier of 1.5 times the single damages, although we determine in each individual case whether a higher multiplier may be warranted.”

So prepare yourself − this self-disclosure will not be inexpensive to resolve.  But take solace in knowing that by submitting the self-disclosure, you will put this unfortunate issue behind you, and the corrective actions that must be implemented as a result of the OIG’s Self-Disclosure Protocol should prevent you from ever having to submit another self-disclosure due to your hiring or contracting with an excluded individual or entity.

If you have a quick question about this, e-mail Henry Casale at HCasale@hortyspringer.com.