Once the Department of Health and Human Services, Office of the Inspector General decides to exclude a physician or nurse from participation in the Medicare and Medicaid programs, that health care professional’s career and employment options grow considerably narrower. For a physician in an institutional setting that accepts patients from these programs, this will likely render them unemployable. Exclusion can easily cause a similar mortal blow to a laboriously-built private practice. Nurses will likewise find their options for employment in the health care field considerably shrink if not disappear.
Fortunately for physicians, and at least in theory nurses, they may be able to obtain an exclusion waiver as the “sole community physician” in their area. 42 C.F.R. § 402.308. The law defines sole community physician as “a physician who is the only physician who provides primary care services to Federal or State health care program beneficiaries within a defined service area.” Id. at § 1001.2(d). In broad outline, the law permits the OIG to waive a physician’s exclusion if they find that their exclusion would cause hardship to local Medicare/Medicaid beneficiaries. “Hardship” in turn can be found where that physician is the sole community physician or “the sole source of essential specialized services in the Medicare community.” Id. at § 402.308.
As an example, I am currently representing a physician from a rural area who would almost certainly be excluded if there was no waiver provision. But, this physician is the only source for at least one hundred miles in all directions for certain basic medical imaging and diagnostic studies as well as essential heart and vascular procedures. Our strategy has been to develop evidence and documentation establishing his status as a sole community physician which can then be used if and when OIG decides in favor of exclusion.
Procedurally, the way this process works is indirect. A physician cannot present their argument and evidence directly to the Office of Inspector General and ask for a waiver. The law is drawn such that only another state or federal agency can appeal for a waiver as to a particular physician. This means that the physician must make their case to the applicable agency who then, if they agree, applies for a waiver with the OIG. Typically, the OIG will accept the judgment of the waiver-seeking agency, but there is no law that says they must.
The waiver provision underlines the need for any physician facing a possible Medicare/Medicaid exclusion to speak with an experienced attorney so that they can properly weigh their options. This is an unforgiving area of the law and only the right attorney can steer a physician through the pitfalls to an outcome where they can still successfully practice medicine.
A recurring scenario in my office goes like this: A physician contacts me about a letter they have received from the Office of the Inspector General stating that they are investigating whether or not the doctor has been involved in conduct that warrants exclusion from the Medicare and Medicaid programs. Oftentimes this concerns the physician’s plea of guilty or nolo contendre to a crime involving these or other government programs or that has some other connection to health care. This is very frustrating to both me and the physician as under federal law even if they do not directly involve a federal program, if any of these crimes is a felony, the client has a serious chance of being summarily excluded.
Under the Social Security Act, the Office of the Inspector General must exclude a physician from Medicare and Medicaid participation for:
- Conviction for any criminal offense related to a federal or state health care program;
- Conviction for a crime relating to patient abuse;
- Conviction for a felony connected to health care and involving fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct; and
- Conviction for a felony involving a controlled substance.
42 U.S.C. § 1320(a)(7).
The last two exclusion rules are the result of Congressional lobbying efforts by the OIG aimed at cutting down federal payments to “bad” physicians thereby saving program costs. The end product has been a set of broadly drafted laws that permit the OIG to exclude a physician who has been convicted for any of a wide array of crimes that can somehow be related back to health care. It should also press properly informed physicians into more carefully weighing their options when considering a plea.
Keep in mind that under the applicable federal law even a plea of nolo contendre will amount to a felony conviction. The same applies to pleas involving probation, community supervision, or deferred adjudication. Perhaps most important to remember is that an exclusion under any of the four grounds outlined above is both mandatory and for a minimum of five years. The impact on a physician’s practice and employment prospects caused by a five year exclusion is generally devastating if not fatal. Also note that under federal law, if a physician is excluded from one federal program, they are automatically excluded from all federal programs.
Unfortunately, most criminal defense attorneys are not aware of these serious consequences while they hammer out a plea for their physician clients. The fact is a physician should try and plea to a misdemeanor whenever possible, as an exclusion for most misdemeanors is neither mandatory nor for five years. Once a physician has been convicted of a felony related to health care, their only avenue for avoiding the mandatory exclusion is through obtaining a sole community provider waiver. See Title 42 CFR § 402.38. This is done by filing an appeal with the appropriate state agency and arguing that the physician who is to be excluded is the role provider of certain medical services to Medicare/Medicaid patients within a defined geographic area. If they state agency agrees, they will then request a waiver of exclusion from the OIG. This is a narrow exception; if like most doctors, the physician practices in a urban area, he or she will likely be ineligible unless their practice is extremely specialized.
The bottom-line is that any physician facing criminal charges would be prudent with contacting an attorney knowledgeable in the applicable federal law and experienced before the Office of the Inspector General. In this way, the physician can be completely informed of the potential consequences of any particular plea. Failure to do so, can result in a plea that effectively foreclose their ability to avoid federal exclusion.
It is also worth keeping in mind that a criminal conviction will almost certainly cause an inquiry and possible sanction by state licensing boards, professional/credentialing societies, provider networks, and institutions where the physician holds credentials. Thus Medicare/Medicaid exclusion mirrors the general characterization of medical and professional licensing law as a veritable house of cards where the removal of one can cause the rest to quickly follow suit. This is an area where the retention of an experienced attorney can make all the difference.
Over the summer the Attorney General Office hired 40 new lawyers as part of its ongoing initiative to redouble its efforts against Medicaid fraud. Besides investigating and prosecuting Medicaid fraud, the AG’s Medicaid Fraud Control Unit (MFCU) also zealously roots out cases of patient neglect, drug diversion, and ordinary fraud and theft connected with the institutions and seniors who benefit from the program.
In regards to Medicaid fraud, the AG has recently indicted the office manager of a Waxahachie nursing home for theft. The MCFU claims that in addition to writing out checks to herself from a resident’s personal checkbook, the defendant also diverted more than $350,000 into a trust fund account which she then withdrew for her own purposes.
The primary hunting ground for the MFCU has always been nursing homes and the medical personnel who serve their elderly patients. For example, in a 2006 press release the Attorney General lauded the recent uncovering by the Unit and local law enforcement of drug diversion in a nursing home. In response to a nurse’s complaint that another LVN was arriving to work while apparently under the influence, the AG determined that the suspect nurse was fraudulently diverting Oxycodone for her own use. Another case from last year involved an LVN’s guilty plea to charges of injury to an elderly person by reckless omission. The Unit’s prosecutor claimed that the nurse disregarded multiple reports of an elderly patient’s failing condition while she engaged in personal conversations on her cell-phone.
The AG’s hiring binge represents the culmination of several years of increased appropriations by the State Legislature and mirrors the increased pressure placed on the Texas Nursing and Medical Boards to weed out offenders. The addition of 40 new attorneys can only augur additional prosecutions of medical personnel and an increase in the licensing actions that inevitably follow such criminal proceedings.