OIG’s Third Quarter 2014 Enforcement Actions Against Organizations That Hire Excluded Individuals

While many take off and enjoy the beautiful weather of the summer, the Department of Health and Human Services Office of Inspector General (OIG) was hard at work cracking down on organizations engaging with excluded individuals. The OIG posted on their website nineteen settlement cases involving organizations that knew or should have known they hired an excluded individual that occurred between July and September.  Enforcement activities have certainly pick compared to last quarter (i.e., April-June 2014) wherein the OIG posted only two such cases.

The increased number of settlement cases with the OIG highlights an escalation of effort by the OIG to penalize organizations that engage with and hire excluded individuals.  This also highlights their position of protecting federal healthcare programs’ beneficiaries and ensuring that excluded individuals do not fraudulently participate during their period of exclusion.

Below is synopsis of the recent cases settled July and September, 2014.

• On July 8, DJK Home Healthcare, LLC d/b/a Children’s Home Healthcare in Texas agreed to pay $318,598.43 for allegedly violating the Civil Monetary Penalties Law for employing an individual that they knew or should have known was excluded from participation in Federal healthcare programs.
• Also, on July 8, Central Maine Health Care Corporation and Central Maine Medical Center in Maine agreed to pay $164,841.90 for allegedly violating the Civil Monetary Penalties Law for employing an individual that they knew or should have known was excluded from participation in Federal healthcare programs.
• On July 11, Bradford Heights Health & Rehab Center in Kentucky agreed to pay $30,121.82 for allegedly violating the Civil Monetary Penalties Law for employing a nurse that they knew or should have known was excluded from participation in Federal healthcare programs.
• Also on July 11, University of Utah (UOU) in Utah agreed to pay $197,839.94. The OIG’s investigation revealed that UOU had hired an excluded nurse. Furthermore, during the investigation, UOU disclosed it employed two additional excluded individuals.
• On July 14, Omnicare, Inc. in Ohio disclosed, pursuant to its Corporate Integrity Agreed with the OIG that is employed an excluded individual. Omincare, Inc. agreed to pay $138,513.00 for allegedly violating the Civil Monetary Penalties Law.
• On July 17, Willow Springs, LLC in Nevada self-disclosed to the OIG that is violated the Civil Monetary Penalties Law. They agreed to pay $475,423.86 for employing an individual that they knew or should have known was excluded from participation in Federal healthcare programs.
• On July 24, Brookdale Senior Living, Inc. and three subsidiaries (Brookdale) agreed to pay $353,248.82 to settle allegations that it employed two excluded individuals. One of the excluded individuals self-disclosed to the OIG that she was employed during her exclusion period. As a result of her disclosure, the OIG investigated Brookdale. During the investigation, Brookdale disclosed it had employed a second excluded individual.
• On July 28, Park West Surgical Center, LLC in Ohio agreed to pay $10,000.00 for allegedly violating the Civil Monetary Penalties Law for employing an individual that they knew or should have known was excluded from participation in Federal healthcare programs.
• On July 31, Integrated First Response – Great Lakes, LLC in Michigan agreed to pay $96,476.63 for allegedly violating the Civil Monetary Penalties Law for employing an individual that they knew or should have known was excluded from participation in Federal healthcare programs.
• On August 5, Oregon Health & Science University in Oregon self-disclosed it employed an individual that they knew or should have known was excluded from participation in Federal healthcare programs. As a result, the organization agreed to pay $10,000.00.
• Also on August 5, Diagnostic Laboratories and Radiology in California self-disclosed it employed four individuals that they knew or should have known was excluded from participation in Federal healthcare programs. As a result, the organization agreed to pay $1,983,907.51.
• On August 12, Deerfield Valley Rescue, Inc. in Vermont self-disclosed it employed an individual that they knew or should have known was excluded from participation in Federal healthcare programs. As a result, the organization agreed to pay $71,503.06.
• On August 22, Rolling Hills H.C., Inc. and Fountain Lake Health and Rehab, Inc. in Arkansas agreed to pay $117,748.32 for allegedly violating the Civil Monetary Penalties Law for employing two individual that they knew or should have known was excluded from participation in Federal healthcare programs.
• On August 24, City of Baytown, Texas self-disclosed it employed an individual that they knew or should have known was excluded from participation in Federal healthcare programs. As a result, the organization agreed to pay $29,431.43.
• Also on August 24, Rock Rapids Health Centre in Iowa entered into a settlement agreement for allegedly violating the Civil Monetary Penalties Law for employing an individual that they knew or should have known was excluded from participation in Federal healthcare programs.
• On September 2, Norwalk Hospital Association in Connecticut self-disclosed it employed an individual that they knew or should have known was excluded from participation in Federal healthcare programs. As a result, the organization agreed to pay $330,967.29.
• On September 9, Rescue, Inc. in Vermont self-disclosed it employed an individual that they knew or should have known was excluded from participation in Federal healthcare programs. As a result, the organization agreed to pay $152,593.00.
• Also on September 10, Wesley Glen Retirement Community in Ohio agreed to pay $19,890.00 for allegedly violating the Civil Monetary Penalties Law for employing two individual that they knew or should have known was excluded from participation in Federal healthcare programs.
• On September 19, University of California, Los Angeles in California self-disclosed it employed an individual that they knew or should have known was excluded from participation in Federal healthcare programs. As a result, the organization agreed to pay $470,422.85.

The settlements listed above generated approximately five million dollars under the Civil Monetary Penalties Law. The majority of those cases, the organization improperly hired a single individual, which on average cost the organization $164,206.00. Moreover, the settlement between the OIG and Diagnostic Laboratories and Radiology, operating in California, resulted in a monetary penalty of close to two million dollars, one of the largest settlements related to hiring of excluded individuals.

Screening for program exclusions should be viewed by your organization, and especially by executive management, the compliance officer and the Board of Directors, as a necessary part of doing business in the healthcare industry. Individuals and businesses can be excluded for a number of reasons, i.e., offenses related to the delivery of care; patient abuse or neglect; fraud, theft and other financial misconduct; and felony convictions related to controlled substances. Therefore, to protect your business, and especially the welfare of your patients and employees, sanction screening is a necessary part of the business.