Provider exclusion is a disaster that may result in the permanent destruction of your professional career. Be vigilant of any possible reasons that may cause it.

Successful payment collections from insurers and patients both are the ultimate manifestation of the success of a medical practice. However, a provider must be credentialed in order to be able to receive payments from an insurer. Insurers routinely de-credential providers who are excluded from the Medicare/Medicaid Program. Let us explore the reasons that lead to exclusion from Medicare and Medicaid Programs and the best techniques to avoid this exclusion.

Sanctions Under Federal Health Programs

The Department of Health and Human Services (DHHS) is primarily responsible for the administration of the federal Medicare Program. The Centers for Medicaid and Medicare (CMS) provides guidelines for the Medicare intermediaries such as Blue Shield and Blue Cross entities, with the objective of monitoring the claims submitted and paid through the program.

CMS has been working in close collaboration with the Office of the Inspector General (OIG) to reduced excessive payments made to the providers. This is essential because of the large number of people enrolling for Medicare. In 2000 alone, OIG reported saving $15 billion for the Medicare Program, primarily through audit disallowances and civil recoveries from providers. The OIG also claims that in 2000, 414 criminal convictions for healthcare fraud were reported, 357 civil actions for healthcare fraud were reported and 3350 exclusions of providers from the Medicare Program[1].

Exclusions from Medicare

Generally speaking, the OIG will resort to excluding a provider who has demonstrated a lack of trustworthiness in terms of being a part of a government program. That is, he has been involved in certain offenses that are contrary to the law; hence, it results in the mandatory exclusion of the provider. However, even less serious offenses may also result in exclusion, completely at the OIG’s discretion.

Similarly, those providers who are already caught up in federal healthcare investigations must be vigilant of the immediate problem at hand while having a keen outlook for possible exclusion. For instance, a state insurance provider and Medicaid may collectively launch an investigation against a given provider’s coding and payment history, simply as a part of a routine scan. And if the claims submitted include any code that is outside of the law, the provider may be concluded to have over-billed. This will result in an extensive audit of the provider, concluding that the medical records fail to support certain claims, and culminating in the provider’s exclusion.

In case the provider agrees to repay the alleged “overpayments” to the carrier, the case might be brought to a close with the provider agreeing to a settlement that includes restitution to the carrier as well as an administrative fine to the state. However, the provider is faced with the risk that if he signs this consent decree with the state and agrees to pay this small fine, the OIG may use this to begin a permissive exclusion proceeding. Hence, agreeing to make restitution to a carrier following an audit may or may not result in exclusion.

It is quite possible that many providers recognize that conviction for healthcare fraud or for any unlawful activity will eventually result in mandatory exclusion from the Medicare Program for a minimum of five years. However, it is less likely understood that a plea of nolo contendere to a sexual battery by a licensed physician would require that the provider be excluded from the Medicare program. Many criminal defenses as well as healthcare lawyers are unaware of these appalling circumstances. For instance, one physician who was not advised and agreed to such a favorable plea was able to petition for a writ of habeas corpus, for relief from the plea. The court granted the writ and vacated the plea stating that healthcare counsel should have explained the collateral consequences of such a plea to the physician and the failure to provide this advice deprived the defendant of the effective assistance of counsel.

There are many similar acts and omissions that can result in provider exclusion from the Medicare Program. For instance, the conviction of a misdemeanor relating to fraud, theft, embezzlement or other financial misconduct can lead to exclusion. Similar results can be expected when the provider’s license is suspended. Even the failure to pay a medical education loan can result in exclusion.

The government has significant power over providers from the Medicare and Medicaid Programs. Convictions, license suspensions, up-coding-related fines, and any other billing problems can sometimes only be the beginning of the many problems for the provider. Exclusion from the Medicare system with the possible de-credentialing from all of the major payors that reimburse the provider for the care it provides can actually be the end of a career in medicine.

Deferred Prosecution Agreement and Deferred Adjudication Agreement

Deferred adjudication programs might be offered to the accused provider by the prosecutors, especially to first-time offenders. If the defender enters the program and is successful in complying with the customized conditions relevant to rehabilitation or restitution, the charges against the provider might be dismissed. However, although the deferred adjudication program sounds interesting for healthcare providers facing charges, participation in the program itself can sometimes lead to Medicare exclusion, depending upon the type and severity of the underlying offenses.

What remains imperative to note is that the law is so restrictive that almost any serious charge against the provider will result in exclusion. This would inevitably adversely impact not only the provider but also all other stakeholders including patients, employees, and suppliers. Hence, DHHS and the Department of Justice have devised a mechanism to counter this concern – The deferred Prosecution Agreement. This is essentially a written, legally-binding contract that imposes certain probationary terms on the provider without imposing any criminal conviction or adjudication. Hence, by deferring the prosecution, the agreement is an exception to the mandatory exclusion process, which allows the provider to continue operating as a Medicare provider.

However, the decision to use a Deferred Prosecution Agreement is purely based on prosecutorial discretion. Under such an agreement the government agrees in writing to defer prosecution for a given period of time. During this period, the provider will be asked to agree to a statement of facts which can then be used as an admission in case the provider fails to comply with the terms of the agreement. Moreover, the provider also agrees to a set of corrective actions. The charges are dismissed if the provider complies with the terms of the agreement. However, in case of a breach, he will be subject to criminal prosecution.

This Deferred Prosecution Agreement is an adaptable mechanism that is intended to facilitate small-scale healthcare systems and independent providers. While the investigators may fail to understand the severity of consequences for the excluded provider, early intervention during healthcare investigations can always prove useful, limiting the collateral consequences of the convictions that the provider is accused of.

[1] https://physiciansnews.com/2008/03/13/how-to-avoid-medicare-provider-exclusion/