Nurses and other health care providers must meet certain ethical standards in order to maintain their licenses. For example, in California, Welfare and Institutions Code §14043.6 and 14123, mandate that the Department of Health Care Services (DHCS) suspend a Medi-Cal provider of health care services (provider) from participation in the Medi-Cal program when the individual or entity is:

• Convicted of a felony;
• Convicted of a misdemeanor involving fraud, abuse of the Medi-Cal program or any patient, or otherwise substantially related to the qualifications, functions, or duties of a provider of service;
• Suspended from the federal Medicare or Medicaid programs for any reason;
• The subject of a lost or surrendered a license, certificate, or approval to provide health care; or
• Has breached a contractual agreement with the Department that explicitly specifies inclusion on this list as a consequence of the breach.

If any of these events occur the State of California automatically adds the provider to the state’s Medicaid exclusion list.

Once this takes place, Medi-Cal will not pay for any item or service furnished directly or indirectly by individuals or entities excluded or suspended from the Medi-Cal Program, or that have been placed on the OIG’s exclusion list.

“In accordance with W&I Code, section 14043.61, subdivision (a), a provider of health care services shall be subject to suspension if claims for payment are submitted under any provider number used by the provider to obtain reimbursement from the Medi-Cal program for the services, goods, supplies or merchandise provided, directly or indirectly to a Medi-Cal beneficiary, by an individual or entity that is suspended, excluded or otherwise ineligible because of a sanction to receive, directly or indirectly, reimbursement from the Medi-Cal program and the individual or entity is listed on either the Medi-Cal Suspended and Ineligible Provider List (S&I List) published by DHCS to identify suspended and otherwise ineligible providers, or any list published by the federal Office of Inspector General regarding the suspension or exclusion of individuals or entities from the federal Medicare and Medicaid programs, to identify suspended, excluded or otherwise ineligible providers.” See California’s Suspended and Ineligible Provider List portal page.

We analyzed California’s Suspended and Ineligible Provider List which, as of November 2020, includes over 19,000 excluded providers. Approximately 40% of these California excluded providers are nurses. This category includes RNs, LVNs, CNAs, Nurse Practitioners, and persons with dual clinical licenses that include at least one in the nursing category.

Hypothetical: Hospital A employs a Registered Nurse (RN). The RN is caught diverting a substantial amount of a controlled medication called Fentanyl from IV drip bags hanging for hospital patients in the ICU. Hospital A investigates, confirms the diversion, terminates the RN, and sends mandatory regulatory reports to the DEA and the California Board of Pharmacy. Hospital also reports this Nurse to the Board of Registered Nursing (BRN) and to local law enforcement where criminal charges are filed. The nurse is then convicted of felony drug diversion and the nurse surrenders their RN license to the BRN during its investigation.

Six months later, the nurse, who had obtained an LVN license prior to becoming an RN, completes drug rehabilitation and returns to Hospital A hoping to work as an LVN. (The problem here is that if a nurse surrenders any provider license after an accusation, they, as a named individual, are to be placed on the HHS OIG List of Excluded Individuals/Entities and/or the Medi-Cal Suspended and Ineligible Provider List.) Hospital declines to hire this nurse as an LVN.

Shortly thereafter, this same nurse shows up on a panel of temporary vendor staffing options that are badly needed by Hospital A for COVID-19 coverage. Hospital A should decline to use this nurse even as a contractor. Hospital A should also engage with this staffing vendor to confirm that they are in compliance with Hospital A’s contractual exclusion screening requirements.

Since the government excludes individuals and entities and not just the provider license at issue, employing this nurse as an LVN, or in any position, places Hospital A’s Medi-Cal and Medicare billing at risk as noted above. Once an employee or former employee is an excluded provider it is imperative that health care employers carefully scrutinize all future arrangements with them.

Resources:

Welfare and Institutions Code §14043.6

W&I Code, section 14043.61, subdivision (a)

California’s Suspended and Ineligible Provider List portal page.

California’s Suspended and Ineligible Provider List

Please refer to this resource for more helpful information on OIG Exclusion Screening.