A physician who was excluded from the Medicare program is not precluded from receiving payment for services rendered prior to the exclusion according to Advisory Opinion 15-02 published by the HHS Office of Inspector General (OIG) earlier this month.  The Advisory Opinion was requested by a physician who was excluded for 20 years from Medicare participation as part of a a criminal plea and settlement of a civil False Claims Act settlement.  The excluded physician was required as part of the settlement to sell his medical practice and as part of the proposed sale, the buyer would collect the pre-exclusion receivables and pay them to the excluded physician.

Under the federal Social Security Act, no payment may be made by Medicare, Medicaid, or any other Federal health care program for any item or service furnished by an excluded individual on or after the effective date of the exclusion.  Because the receivables in questions related only to services performed prior to the exclusion, the OIG concluded that the proposed arrangement would not be prohibited.

While this Advisory Opinion required only a straightforward reading of the statutory language, physicians and other providers should nevertheless be exceedingly careful when dealing with individuals and entities who are or have in the past been excluded from Medicare or other payor programs as even straightforward financial arrangements with such parties can result in severe sanctions under the federal civil money penalties law of the Social Security Act.  Practices and providers should, as part of their compliance activities, regularly check the Exclusions Database for existing employees and contractors as well as part of a pre-hire screening process.