Medical equipment companies that provide and bill for durable medical equipment (DME) are under intense scrutiny from the government, particularly the Office of Inspector General (OIG). The OIG has a strong track record of pursuing fraudulent and non-compliant DME suppliers, often imposing severe penalties. For these companies, exclusion screening compliance isn’t just a best practice; it’s a critical shield against financial ruin and legal action.
Why Exclusion Screening is a Must for DME Companies
DME companies operate in an industry ripe for fraud, with common schemes including billing for medically unnecessary equipment, providing defective products, or billing for items that were never delivered. The OIG’s enforcement actions, often triggered by whistleblower reports, have revealed that a significant number of these fraudulent operations involve individuals or entities who have been previously excluded from federal healthcare programs.
By failing to conduct robust and continuous exclusion screening, a DME company can unwittingly:
- Employ an Excluded Individual: This is the most direct violation. If an employee, contractor, or vendor is on the OIG’s List of Excluded Individuals/Entities (LEIE), the company can be subject to Civil Monetary Penalties (CMPs) of up to $20,000 per item or service furnished, ordered, or prescribed by that person.
- Engage in Fraudulent Activities: Excluded individuals often have a history of fraud or abuse. Hiring them increases the risk of the company becoming involved in schemes like billing for non-delivered equipment, upcoding, or paying kickbacks for referrals.
High-Risk Areas for DME Companies
The OIG has specifically warned DME suppliers about certain high-risk areas of non-compliance. These are the areas where exclusion screening and a robust compliance program are most critical:
- Telemarketing and Patient Referrals: The OIG has brought numerous cases against DME companies that used illegal telemarketing to obtain referrals and patient information, often paying kickbacks. Excluded individuals are frequently involved in such schemes. A company must screen all third-party marketers and telemarketing companies they partner with.
- Sales and Marketing Staff: Sales and marketing staff are on the front lines, often interacting directly with beneficiaries and referral sources. A salesperson who has been excluded for a kickback scheme could easily replicate that behavior, putting the entire company at risk. Regular screening of all sales and marketing personnel is non-negotiable.
- Owner and Executive Screening: The OIG often holds company executives and owners directly responsible for compliance failures. The failure to screen leadership can lead to massive fines and personal liability if they are found to be on an exclusion list.
Continuous Screening is Key
For DME companies, a single screening at the time of hiring is insufficient. The OIG’s LEIE is updated monthly, and an individual’s exclusion status can change at any time due to new convictions or disciplinary actions. To remain compliant, companies must:
- Screen all employees and contractors before hiring.
- Re-screen all personnel on a monthly basis.
- Document all screening efforts to demonstrate due diligence to regulators.
By implementing a rigorous, ongoing exclusion screening program, DME companies can protect their business from significant financial and legal risk and contribute to a more trustworthy healthcare system.