More Trouble for Medicaid Providers
Medicaid providers who learn their employees, agents or owners are under investigation for health care fraud can't afford to wait for the criminal process to take its course before mounting a defense. The indictment alone of an employee, agent, or owner could be a financial death sentence for the provider.
The Ohio Department of Job and Family Services ("ODJFS") has always been required to terminate a Medicaid provider agreement if the provider is convicted of certain criminal offenses. As of September 27, 2007, ODJFS is now required to suspend a provider agreement based only on an indictment for certain offenses. The statute applies to "noninstitutional providers," which means any person or entity with a Medicaid provider agreement other than a hospital, nursing facility, or intermediate care facility for the mentally retarded. The indictment can be against the provider, as well as an owner, officer, authorized agent, associate, manager, or even employee of the provider. The suspension continues until the proceedings in the criminal case are completed through conviction, dismissal of the indictment, plea, or finding of not guilty. In addition to suspending the provider agreement, ODJFS must terminate Medicaid reimbursement to the provider for services rendered.
The statute permits the provider to request a reconsideration of the suspension. The grounds for requesting reconsideration are limited. The important ground is whether the provider, owner, or owners can demonstrate that they did not directly or indirectly sanction the action of the authorized agent, associate, manager, or employee that resulted in the indictment.
The statute is particularly troublesome for providers because the indictment of an employee or agent triggers the suspension. The provider is then forced to demonstrate to ODJFS that it did not directly or indirectly sanction the illegal conduct. All the while, Medicaid reimbursement has stopped. In addition, the Medicaid suspension may result in the suspension or termination of other third-party payer agreements. Unless the suspension is lifted, the provider may be out of business by the time the criminal case concludes.
The statute is Ohio Revised Code Section 5111.031 and the corresponding regulation is Ohio Administrative Code Section 5101:3-1-17.5.
