DAB Decisions Highlight Importance of Regular Background Screenings and Exclusion Checks for All Employees and Managing Individuals

Two recent Department of Health and Human Services, Departmental Appeals Board decisions highlight the importance of regular federal and state background screenings and Medicare exclusion checks.  The Ambulife Ambulance, Inc. decision emphasizes that reliance on past owners’ disclosures does not negate a provider/supplier’s duty to accurately report any past offenses and managing employees status.  The Esohe Agbonkpolor decision reiterates that entering into a plea deal may be considered a conviction and, thus, appropriate grounds for exclusion from the Medicare, Medicaid, and all federal health care programs.

In Ambulife Ambulance, Inc., the Board upheld the decision to revoke an ambulance services supplier’s Medicare enrollment and billing privileges for providing false or misleading information in its Medicare enrollment applications.¹   The supplier identified an individual as a managing employee in the role of chief operating officer on its Medicare enrollment application, but failed to disclose any adverse legal actions, including exclusions from a federal health care program.  Two years later, the supplier submitted another Medicare enrollment application, following the acquisition by a new owner, which again affirmed that no owners or managers had been the subject of a final adverse legal action.  In 2016, the supplier terminated the chief operating officer’s employment.  In 2018, the Medicare Administrative Contractor informed the supplier that the Inspector General of the United States Department of Health and Human Services (“IG”) had revoked the supplier’s Medicare enrollment and it would be barred from re-enrollment for three years for providing false or misleading information on its enrollment applications because the individual identified as the chief operating officer had been included on the IG’s exclusions list, effective August 20, 2000.

The supplier alleged typographical errors and that the prior owners failed to disclose the individual’s background.   Specifically, they argued the individual was not actually a managing employee, but rather a clerical employee holding the position of office manager.  In response to the supplier’s contentions that its office manager was not actually a managing employee, the Board held that the supplier still reported false or misleading information on its enrollment applications when it reported that individual was a managing employee, manager, and chief operating officer.  Therefore, the Board affirmed that CMS was authorized to revoke Petitioner’s Medicare enrollment and billing privileges for providing filing false or misleading information on its enrollment application.

In Esohe Agbonkpolor, the Board affirmed the IG’s decision to exclude a Licensed Practical Nurse (“LPN”) from participating in Medicare, Medicaid, and all federal health care programs for five years, following conviction of neglect or abuse of patients.²    The Board analyzed whether the exclusion rules applied to an individual who, following allegations of neglect and elder abuse, entered into a plea deal related to two misdemeanors and disorderly conduct under New York law.  Under the arrangement, once the LPN met certain conditions, her misdemeanor plea was vacated and the LPN was sentenced to a $250.00 fine for disorderly conduct.

The LPN alleged that upon meeting the plea deal’s conditions, her misdemeanors were vacated and therefor this merely amounted to a violation, not a crime for exclusion purposes.  However, the Board disagreed.  Under federal law, an individual is “convicted” of a criminal offense “when a plea of guilty . . . by the individual . . . has been accepted by a Federal, State, or local court.”³   In its decision, the Board affirmed the IG’s determination that a “violation” of a law is sufficient to conclude that an individual has been convicted and, therefore, may be excluded from the Medicare, Medicaid and all federal health care programs.

These recent decisions emphasize the importance of not only regular federal and state background screenings and Medicare exclusion checks, but also upon the acquisition of a provider or supplier.  Generally, we recommend that providers and suppliers require all employees, owners, and managing individuals to undergo state background checks and screen all individual against the IG List of Excluded Individuals & Entities and other applicable exclusion lists and databases prior to hiring or upon changes of ownership.  Any job offer made prior to the completion of the background checks and screenings should be contingent upon the individual not being an ineligible person.  After the initial pre-employment screening, we recommend conducting monthly screenings against the List of Excluded Individuals & Entities and other applicable exclusion lists and databases.

For more information, please contact  Charmaine A. Mech.

[1] Ambulife Ambulance, Inc., DAB CR5519 (2020).

[2] Esohe Agbonkpolor, DAB CR5527 (2020).

[3] 42 U.S.C. § 1320a-7(i)(3).