Likewise, long delays in processing exclusion referrals allow unacceptable providers to continue to provide services in federal health care programs. While these referrals remained unresolved, some providers received thousands of dollars from Medicare. These providers had withdrawn from Medicaid for serious quality-of-care problems. Thus, a provider could enroll in a state’s Medicaid program, after being excluded nationwide by the OIG, and not be detected. State Medicaid agencies, for instance, sometimes have difficulty determining whether OIG-excluded providers are enrolled or have attempted to enroll in their programs because identifying information about the providers on the exclusion list may be incomplete or different from the identifiers used in state data systems. The OIG believes that this action will substantially reduce the number of excluded licensed providers that continue to indirectly participate in federal health care programs in hospitals. One of these tools is a system of unique health identifiers for all health care providers, which the act requires HHS to establish. Moreover, certain factors could limit the data bank’s effectiveness. The OIG Is Taking Actions to Strengthen the Excluded Provider Process

OIG officials attributed many of the problems we found to resource cuts over the last several years. Headquarters officials plan to use some of this money to hire additional field office staff to process exclusion cases, they said. The process for excluding providers can and has operated successfully, with thousands of unacceptable providers excluded from Medicare, Medicaid, and other federal health care programs over the years. Interim actions are needed. Training that has been provided to current staff should help reduce inconsistencies among field offices and improve the quality of processing, and plans to hire additional staff should improve the timeliness of exclusion processing. Recommendations to the HHS Inspector General

We recommend that the HHS Inspector General improve oversight of key state agencies that refer cases to the OIG, such as the state Medicaid agency and MFCU, to ensure that states understand and comply with the statutory reporting requirements for state-removed providers; clarify to states that settlements and provider withdrawals to avoid formal sanctions should be reported to the OIG, in accordance with its regulations (42 C.F.R. We also interviewed officials at OIG headquarters and HCFA to determine their plans to establish an Adverse Action Data Bank and develop a unique health care identifier, as required by the Health Insurance Portability and Accountability Act of 1996. Legal Basis for Excluding Providers Under the Social Security Act

1128(a)(1)1128(a)(2)
Conviction for patient abuse or neglect 1128(a)(3)
Felony conviction related to health care fraud 1128(a)(4)
Felony conviction related to controlled substances 1128(b)(1)
Misdemeanor conviction related to health care fraud 1128(b)(2)
Conviction for obstructing an investigation 1128(b)(3)
Misdemeanor conviction related to controlled substances 1128(b)(4) 1128(b)(5)
Suspension or exclusion under a federal or state health care program 1128(b)(6)
Excessive claims or furnishing of unnecessary or substandard items and services 1128(b)(7)
Fraud, kickbacks, and related activities 1128(b)(8)
Entities owned or controlled by a sanctioned individual 1128(b)(9)
Failure to disclose required information 1128(b)(10)
Failure to supply requested information on subcontractors and suppliers 1128(b)(11)
Failure to provide payment information 1128(b)(12)
Failure to grant immediate access 1128(b)(13)
Failure to take corrective action 1128(b)(14)
Default on health education loan or scholarship obligations 1128(b)(15)
Individuals controlling an excluded entity 1128A(a)
Imposition of a civil money penalty or assessment 1156(b)
Mandatory exclusion provisions. OIG Process: Problems With State Exclusion Referrals

Several examples of (1) cases for which the OIG had no record of state exclusion referrals when we initially inquired and (2) delays in OIG processing of state exclusion referrals (discussed on pp.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the Department of Health and Human Services (HHS) Inspector General's (OIG) process for excluding providers from federal health care programs.

What GAO Found

GAO noted that: (1) over the years, the OIG, working with state agencies, has excluded thousands of providers from participating in federal health care programs because of health care fraud, abuse, or quality-of-care problems, thus helping to protect the financial integrity of those programs and decreasing the likelihood that program beneficiaries receive substandard care; (2) several weaknesses in this exclusion process allow many unacceptable providers to remain on the rolls of federal health programs; (3) the weaknesses GAO identified include: (a) lack of controls at OIG field offices to ensure that all state referrals received are reviewed and acted on promptly; (b) inconsistencies among OIG field offices as to the criteria for excluding providers; (c) lack of oversight to ensure that states make appropriate exclusion referrals to the OIG; and (d) problems states experience in attempting to identify and remove from their programs providers that appear on the OIG's exclusion list; (4) these weaknesses place the health and safety of beneficiaries at risk and compromise the financial integrity of Medicaid; (5) moreover, difficulties states experienced in using OIG exclusion data allowed some providers to continue to be enrolled in a state Medicaid program after they had been excluded nationwide by the OIG; (6) OIG officials attributed many of these problems to repeated cutbacks in resources occurring in the past several years; (7) the Health Insurance Portability and Accountability Act of 1996, however, addresses this concern by providing the OIG with extra funding, specifically for dealing with health care fraud; (8) some of this funding, officials said, will be used to hire additional staff to process exclusion referrals; (9) the act also includes tools and resources to facilitate identifying unacceptable providers; (10) these tools include a system of unique billing numbers for health care providers, to be developed to reduce the potential for inappropriate payments, and an adverse action data bank, to be established to record information on any adverse action taken against a health care provider; (11) when implemented, these tools should help to limit the number of providers excluded from one program that continue to participate in others; (12) in the interim, the HHS Inspector General has initiated actions to improve the effectiveness of the exclusion process; and (13) while these efforts are significant, GAO believes further refinements are necessary to improve the exclusion process.