A Provider Guide to New York Medicaid Exclusion Screening

A Provider Guide to New York Medicaid Exclusion Screening

The New York Medicaid Program is prohibited by State law from paying for items or services furnished excluded parties. The State ban, which is separate and independent of federal law, is enforced primarily through mandated provider exclusion screening requirements and the threat of imposing overpayment liability, penalties, and exclusion or termination for providers that fail to screen and violate the payment ban. This article focuses on helping providers understand New York Medicaid exclusion screening law, and its exclusion screening requirements so that they can avoid the risks associated with employing or doing business with excluded parties.

New York Determines Who Can Provide Services to its Medicaid Program

New York is responsible for the administration of its Medicaid program.  It sets the standards and qualifications for its participating providers and is authorized to exclude providers from participation if the action is supported by either State or Federal law.  The State ensures that its participating providers have not been excluded from participation in State or Federal health care programs through the enactment and enforcement of exclusion screening rules and obligations.  

Basis for Exclusion in New York

Exclusions are imposed in New York for engaging in “unacceptable practices under the medical assistance program.”  This includes employing excluded parties, submitting claims on behalf of excluded parties, and accepting payment services provided by an excluded party as the basis for an exclusion.  Other conduct that is considered an unacceptable practice includes, but is not limited to, submitting false claims, making false statements in support of a claim, soliciting bribes or kickbacks, and providing unnecessary medical care.  Federal Exclusions imposed by the Office of Inspector General are a separate basis for exclusion under State law. 

Conduct that constitutes an unacceptable practice under the medical assistance program violates the conditions of participation in the Medicaid program, however sanctions are based on the underlying conduct and exclusions are not automatically imposed. The Department of Health can choose to impose lesser penalties, such as limitations on a provider’s participation or censure, if the conduct does not, it its view, warrant exclusion. 

The New York Medicaid Exclusion List 

The New. York Medicaid Exclusion List is a registry of the individuals and entities that the State Department of Health has excluded from participating in the State Medicaid.  The list is maintained by New York’s Office of the Medicaid Inspector General and hosted on its website, 

and it is important for providers to keep in mind that New York’s exclusion list is separate from, and independent of, the OIG’s List of Excluded Individuals and Entities (LEIE).  

The difference in exclusion lists is highlighted by the fact that there are many people on New York’s Exclusion list who are not on the LEIE; the reverse is also true. For example, when a random (though not statistically valid) sample of LPNs, RNs and CNAs on the New York were compared to the LEIE, it was found that only 58% were also on the LEIE.  And when a a random (though again not statically valid) sample of physicians on the New York list were compared with the LEIE, just 40% of the doctors on New York’s List were also on the LEIE.  The most likely explanation for this discrepancy is that New York excluded these individuals for reasons that would not support a federal exclusion, but regardless of the reason, it is important that providers be aware of these large differences. Particularly when doing exclusion screening!

The Impact of the State’s “Payment Prohibition”

The New York Medical Assistance Program will not reimburse any items of medical care, services or supplies furnished, ordered or prescribed an excluded provider. The ban extends to any activity, whether direct or indirect, relating to medical care or services being provided and to all forms of payment. As previously stated, submitting claims for services provided by an excluded party is, in of itself, a basis for exclusion. In addition, any reimbursements made in violation of the payment prohibition are overpayments which must be repaid, and liability for overpayments attaches to the provider that submits the claim, to the party that caused the claim to be submitted, and to anyone that received payment. In addition, all of those mentioned above are jointly and severely liable for repayments of the overpayments.

Excluded parties that order, provide or prescribe care services or supplies are also subject to civil money penalties up to $10,000 for each item that is paid if there have been no violations within the last five years.   If there has been a prior violation within the previous five years, the department may impose a penalty of up to $30,000. The department considers the damage to the program, the facts and circumstances and any mitigating factors in setting the penalties.

New York Provider Exclusion Screening Obligations

Providers need to be aware that their exclusion screening obligations arise from different sources and for different reasons. For example, the State requires screening as a condition of payment and as part of the enrollment process – but the requirements for each as different. Screening obligations are also imposed contractually by Medicaid Managed Care Organizations (MMCO) and by Private Payers, and these can also vary. After a review of the requirements New York providers face, we will suggest some provider “best practices.” 

Exclusion Screening Requirements a Condition of Payment 

Enrolled providers are required to implement and maintain effective compliance programs with policies and procedures that confirm the identity and exclusion status of their employees. In determining the exclusion status of a person, providers “shall review” the New York State Office of the Medicaid Inspector General Exclusion List and the Human Services Office of Inspector General’s List of Excluded Individuals and Entities “at least every thirty (30) days.” Providers must also be prepared to document their screening with detailed exclusion check reports.

Exclusion Screening Obligations as Part of Enrollment 

Providers must enroll in New York’s medical assistance program in order to be eligible to receive payments for items or services they provide. To enroll, providers must disclose its owners, agents and managing employees, and certify under penalty of perjury whether any have been excluded, revoked, or terminated, from any health care programs under title XVIII (Medicare), title XIX (Medicaid) or title XX (Social Services) of the Social Security Act. 

The enrollment screening requirement poses two issues. First, the disclosure categories are defined broadly to include laboratory directors and supervising pharmacists and “anyone who exercises operational or managerial control over or who directly or indirectly conducts the day to-day operation” in addition to the owners, agents and managers. Second, the requirement, as written, extends beyond the State List and the LEIE to other State and federal exclusion lists!

Exclusion Screening for Participating Providers in Medicaid Managed Care

Medicaid Managed Care Organizations are required to determine the exclusion status of their participating providers and its subcontractors and to require them to comply with the exclusion status requirement.  They meet this by contractually imposing screening obligations on their participating providers. Although each MMCO has its own contract, the following excerpt is typical of the obligations that are imposed: 

[Payer] also requires you not employ or contract with any employee, subcontractor or agency who has been debarred or suspended by the federal or state government, or otherwise excluded from participation in the Medicare or Medicaid programs…

First-tier, downstream and related entities (FDRs), must review federal (HHS-OIG and GSA) and state exclusion lists before hiring/contracting employees (including temporary workers and volunteers), the CEO, senior administrators or managers, and sub-delegates. Employees and/or contractors may not be excluded from participating in federal health care programs. FDRs must review the federal and state exclusion lists every month…

As can be seen, this MMCO contract broadly defines who must be screened (it includes temporary workers, volunteers and subcontractors). It adds the federal General Services Administration/System for Awards Management List (GSA/SAM) in addition to the LEIE, and, as written it requires that the screening of all state lists in addition to the New York list. 

Exclusion Screening Required by Private Payers

Most private payers also will not pay for services furnished by excluded parties. The following language, taken from one of the private payers, is commonly found in provider manuals: 

We require that providers not employ or contract with any employee, subcontractor or agent who has been debarred or suspended by the federal or state government, or otherwise excluded from participation in the Medicare or Medicaid program…Initial applicants …must not be currently federally sanctioned, debarred, or excluded from participation in any of the following programs: Medicare, Medicaid or FEHBP…

These requirements by this private payer are similar to the MMCO contractual requirements in that it also seems to extend the obligation beyond those of the State by clearly including the GSA/SAM and seemingly including all State lists.

Suggested Provider Best Practices

• Providers are required to screen all employees, vendors and contractors with the New York State Exclusion List and the Office of the Medicaid Inspector General Exclusion List of Excluded Individuals and Entities prior to hire and monthly as a condition of participation,” so this is clearly should be the starting point for all screening programs.
• Providers should also document their screening with detailed exclusion check reports.
• Since providers are required to screen the parties identified in their disclosure obligation and certify their exclusion status, it is a best practice to add the disclosed entities to the routine monthly exclusion list.
• In light of the MMCO and enrollment requirements, Providers are best served if they also screen the GSA/SAM and the other State Lists in addition to the NY List and the LEIE,, 

Some Frequently Asked Questions

If a Person is in the LEIE, Will he always be in the New York Medicaid Exclusion List?

Not necessarily. Even though an OIG Exclusion is a “mandatory exclusion” under State law18 NYCRR § 515.8(1), a large number of New Yorkers are on the NY Exclusion List but not on the LEIE.  As mentioned earlier, samples of nurses showed that only 58% of nurses on the NY List were also on the LEIE, and only 40% of the doctors on New York’s List were on the LEIE!  Regardless of the cause of these differences, they provide strong support for screening both exclusion lists.

If I’m on the New York Exclusion List, will I also be added the OIG Exclusion List?

It depends. When a State excludes or sanctions a provider, it is required to notify the OIG so that it can evaluate the facts and circumstances and decide whether a federal exclusion is also warranted.  For example, an exclusion for failing to pay State taxes might be appropriate under state law, but the OIG could not impose a federal exclusion on that basis.  On the other hand, a State exclusion based on a healthcare fraud conviction in State Court would clearly support a federal exclusion, and the OIG would seek a federal exclusion upon notification of the action.

If I’m on the New York Exclusion List, will I be on Added to Other State Lists?

Again, the answer is Maybe. States are also required to notify their sister States whenever they exclude a provider “for cause” so that they, like the OIG, can evaluate whether or not to impose an exclusion pursuant to their rules. An exclusion “for cause” is one that is based on actions that the State believes would also be the basis of a federal exclusion. The diagram below shows how the process is supposed to work.

As described by CMS in guidance to the States, the implementation of section 6501 of the ACA involves three steps: First, a State agency must communicate to its sister states about providers who have been excluded, or terminated, for cause; second, the agency must identify whether any of those providers are participating in the State’s Medicaid program; and, third, the agency must exclude or terminate the provider’s participation in its own State Medicaid program if appropriate under its rules of participation. Compliance with this regulation and guidance is sporadic among the states, but it continues to improve and get better over time. 

Final Thoughts

Providers in New York have exclusion screening obligations from multiple sources, and the only way to meet them is by having a robust exclusion screening program. The best program for each provider regarding “who to screen” and “what databases to screen” will depend on a number of factors, such as the payer requirements and their relationship to claims, but providers are urged to carefully consider these questions in terms of risks and benefits.