Department of Health and Human Services

Office of Inspector General -- AUDIT

"Medicare Payments to Excluded and Unlicensed Health Care Providers," (A-14-96-00202)

November 5, 1996

Complete Text of Report is available in PDF format (1M). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.

EXECUTIVE SUMMARY:

This report provides the results of our review of Medicare payments to excluded and unlicensed health care providers. The objective of our review was to determine if the Medicare program inappropriately reimbursed individuals or entities who were excluded from the program or whose license was suspended or revoked by a State licensing board. Our review was limited to individuals and entities with a Maryland address at the time of exclusion and individuals whose license was suspended or revoked by the Maryland Board of Physician Quality Assurance.

We found:

• the Medicare program has reimbursed 22 percent (6 out of 27) of the excluded individuals for whom we were able to locate a unique physician/practitioner identification number (UPIN) during their period of exclusion;
  
• the Medicare program has reimbursed 15 percent (6 out of 40) of the individuals who had known UPINs with practice locations in the State of Maryland for services provided while they were unlicensed in the State of Maryland;
  
• individuals who have had their Maryland license suspended or revoked have relocated to other States and can continue to treat Medicare beneficiaries in the States they relocated to;

• current data bases which contain exclusion and adverse licensure actions are incomplete and inaccessible; and

• a single consolidated source is needed which contains information on all adverse actions taken against health care providers.

Although nationally the percentage of aberrant health care providers (those excluded or with a suspended/revoked license) is small, they can endanger the lives of beneficiaries and should not be allowed to further abuse our health care system. We recommend that the Health Care Financing Administration (HCFA):

• Ensure that Medicare contractors have established adequate controls to preclude payments to excluded and unlicensed health care providers; expand our data match nationally to identify payments made to excluded providers; and recover the payments identified in our review and subsequent data matches from the excluded and unlicensed providers.
  
• Confirm that its contractors get licensing data from the appropriate State agencies and that Medicare payments are terminated to unlicensed individuals.
  
• Institute edits in its present and future payment systems to prevent payment to excluded and unlicensed providers.
  
• Take into consideration our findings as it continues development of the National Provider System (NPS) and continue to support legislative proposals to create a comprehensive data base that would capture negative actions on all health care providers and would be accessible by all interested parties.
  
• Work with the Public Health Service (PHS) to implement section 1921 of the Social Security Act which would require States to provide information to the Secretary regarding specified actions (such as revocation or suspension of a license) taken by the State entity responsible for the licensing of health care providers. The Secretary is authorized to provide this information to Federal agencies administering health care programs, State licensing authorities, State Medicaid agencies, State Medicaid Fraud Control Units, law enforcement agencies, and other specified entities. It will be necessary to coordinate this with the implementation of the new adverse action data base created by Public Law 104-191.

In response to our draft report, HCFA concurred with all of the recommendations.