Receiving A Referral From An Excluded Provider: Beware

We all know that a doctor plays a vital role in today’s healthcare ecosystem (not to mention the rise of the importance of the Nurse Practitioner and Physicians Assistant). After all, the doctor is where you are likely to be seen and/or who will refer you to a hospital, specialist or outpatient surgery center for further healthcare services.

So does it matter if the referring doctor is excluded from participating or receiving federal healthcare dollars by and through a federally funded healthcare program?

According to the OIG Special Advisory Bulletin on the Effect of Exclusions, an excluded provider may refer a patient to a non-excluded provider if the excluded individual does not furnish, order, or prescribe any services for the referred patient, and the non-excluded provider treats the patient and independently bills Federal healthcare programs for the items or services that he or she provides.

Covered items or services furnished by a non-excluded individual to a Federal healthcare program beneficiary are payable, even when an excluded provider referred the patient.

However, any items and services furnished at the medical direction or on the prescription of an excluded person are not payable when the person furnishing the items or services either knows or should know of the exclusion.

Prohibited Payments for Items or Services Furnished by Excluded Individuals or Entities

The OIG Advisory specifically advises that the prohibition on federal healthcare program payment for items or services furnished by an excluded individual includes items and services beyond direct patient care.

For instance, the prohibition applies to services performed by excluded individuals who work for or under an arrangement with a hospital, nursing home, home health agency, or managed care entity when such services are related to, for example, preparation of surgical trays or review of treatment plans, regardless of whether such services are separately billable or are included in a bundled payment.

Another example is any service performed by excluded pharmacists or other excluded individuals who input prescription information for pharmacy billing, or who are involved in filling prescriptions for drugs that are billed to a federal healthcare program.

Prohibited Payments for Transportation Services for Excluded Individuals or Entities

Also, excluded individuals are prohibited from providing transportation services that are paid for by a federal healthcare program, such as those provided by ambulance drivers or ambulance company dispatchers.

Prohibited Payment for Administrative and Management Services Not Directly Related to Patient Care

According to HHS OIG, payment is prohibited for “administrative and management services not directly related to patient care, but that are a necessary component of providing items and services to federal program beneficiaries.”

Positions that are affected include excluded persons and applies even if the administrative and management services are not separately billable.

For example, an excluded individual may not serve in an executive or leadership role (e.g., Chief Executive Officer, Chief Financial Officer, General Counsel, Director of Health Information Management, Director of Human Resources, Physician Practice Office Manager, etc.) for a provider that furnishes items or services payable by federal healthcare programs. In addition, HHS OIG explains that “no federal program payment may be made to cover an excluded individual’s salary, expenses or fringe benefits, regardless of whether they provide direct patient care.”

Also, an excluded individual may not provide other types of administrative and management services, such as health information technology services and support, strategic planning, billing and accounting, claims processing, staff training, and human resources, unless wholly unrelated to federal healthcare programs.

Monitoring Healthcare Populations for Excluded Providers

It is imperative to ensure that your OIG exclusion monitoring program is effective and compliant with the above guidelines to mitigate your risk for potential fines and/or penalties. Providers must understand the importance of embracing a holistic approach to monitoring for excluded individuals and entities, including referring, ordering, prescribing physicians in addition to those who are not providing direct care but administrative or management services.

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Written by Michael Rosen, Esq.