Navigating the complex web of state Medicaid compliance can be a difficult but necessary endeavor. The government keeps a close eye on where federal healthcare money can be spent, and medical businesses and institutions must consider the exclusion lists for each state.

There are 45 separate states with Medicaid exclusion lists. And ever since the passing of the Affordable Care Act, all of them effectively work together in that an entity barred from one state is already barred from all state Medicaid programs.

Given that most medical professionals aren’t skilled in the law (and they shouldn’t be in order to keep focused on what matters, patient wellbeing), having a dedicated denied party screening initiative in place is a necessity. The cost of non-compliance in the medical field is immensely high, ranging from government sanctions to financial penalties to losses in corporate reputation in the market.

What Exclusions Mean in the Context of State Medicaid

Exclusions are lists of individuals and entities that the government bans domestic organizations from working with, such as those included in the State Medicaid Exclusion Lists. These entities typically pose a risk, as they have been caught undergoing fraudulent or abusive activities in the past and are deemed a threat to national security and patient health.

You might have heard of exclusions in the context of international trade regulations. Agencies like the Office of Foreign Assets Control and the Office of the Inspector General (responsible for the List of Excluded Individuals and Entities) issue exclusion lists to prevent domestic companies from interacting with excluded foreign entities.

However, the impact of exclusions in the context of Medicaid is that Federal and State payment programs will not pay for products and services furnished by excluded parties, including:

  • Billing and accounting services
  • Administrative services and management
  • Human resources
  • Information technology services
  • Transportation
  • Volunteer work that contributes to an overall service

To comply with these regulations, businesses need to check for all their connections, from employees to vendors, suppliers, and contractors. Otherwise, they run the risk of various penalties, ranging from fines under the False Claims Act to exclusion from the Medicaid program to criminal charges and even jail time.

How To Approach Exclusion Screening with Regards To a Medicaid Compliance Plan

Signed into law by the Social Security Act, Medicaid and Medicare started off as a way to provide health coverage to low-earning households. Each state conducts its own Medicaid program.

In order to interact with this government initiative, medical businesses are expected to stay compliant with the national exclusion list, the most well-known of which is the OIG’s LEIE mentioned previously.

This regulation is designed to prevent fraudulent entities from receiving payments. Given that improper Medicaid payments totaled $57.36 billion in 2019, it’s no wonder why Medicaid compliance is taken seriously.

So now let’s answer the question: how do you approach the practice of denied party screening with regards to the State Medicaid Exclusion Lists?

Individual State Requirements Play a Role

Individual states keep their own lists of excluded parties, and there’s no consistency regarding how each one is organized and presented. Records could have different formats and include different types of data, making manual screening a challenge.

And while the states are obligated to inform the Office of the Inspector General about new changes to these lists, it’s never guaranteed that the aggregate list is exhaustive. In fact, the current LEIE is likely missing over half of the exclusions implemented at the state level.

Because you are still responsible for all excluded parties, do not rely exclusively on the LEIE. Check with individual states, which themselves might have different types of unique screening requirements to follow. Generally, the Centers for Medicare & Medicaid Services (CMS) writes to each state’s Medicaid director about monthly exclusion screening, which can involve both the LEIE and the state-specific lists.

And finally, it’s also worth noting that some states have other types of lists that must be abided by. New Jersey, for instance, requires companies to check with both the Division of Consumer Affairs and the Department of Health and Senior Services.

The Specific Case of Medicare Advantage

Medicare Advantage, a specific case to consider for some pharmaceutical organizations, is a Medicare insurance plan where health benefits are delivered through a private insurer.

The result is that there are unique screening requirements to take into account. Not only do you need to cover the OIG’s LEIE, but there’s also a CMS Preclusion List that’s only available to Medicare Part C and Part D Plan Sponsors.

Consult with legal professionals about how to handle Medicare Advantage cases. Many businesses delegate screening responsibilities to third-party service providers to ensure complete coverage.

The Popularity of Software Compliance Monitoring

Software is a popular tool in the exclusion screening space given the high complexity of legal compliance today. You have the GSA, the SAM, and the individual state Medicare denied party lists to think about. And all of them change regularly, necessitating the need for more efficient software-based compliance.

For instance, tools like these can perform automated, ongoing monitoring so that you’re always working with the most up-to-date data. Federal exclusion datasets like the OIG LEIE typically update monthly around the middle of the month, while state Medicaid lists change at different times. Either way, continuous monitoring is the best solution to staying on top.

Maintain Medicaid Compliance with Descartes

Businesses must be serious about preventing improper Medicaid payments and implementing state Medicaid exclusion list screening. You cannot rely exclusively on federal lists like the LEIE and must consider each individual state.

If you’re concerned about the cost and risk of analyzing all these exclusion lists (which can change without notice), then you need an automated software platform to ensure customs and regulatory compliance. The healthcare industry especially benefits from software-based screening tools.

Speak with an expert at Descartes today. With over 700 million restricted party screenings and 100 million compliance filings a year, our teams know best when it comes to export compliance and related government programs like Medicaid.

For more comprehensive information about effective compliance in the healthcare industry, download our white paper or visit our Resource Center.

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Written by Jackson Wood

Director, Industry Strategy, Global Trade Intelligence, Descartes