Healthcare Matters

   A Complimentary Newsletter From:

Barmak and Associates, LLC  

Managing Liability for Long Term Care and Health Care Providers

Volume 17, Issue 4                 ADVERTISEMENT                              April 2016

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In This Issue
Do You Employ Persons Excluded From Medicare & Medicaid Reimbursement?
What To Do If Federal Agents Threaten To Knock Down Your Door
David Barmak, Esq.
Gerald V. Burke, M.D., Esq. 
Jo Ann Halberstadter, Esq.
Jo Ann Halberstadter, Esq.

Click on Attorney's Picture for more Information 




Do You Employ Persons Excluded From Medicare & Medicaid Reimbursement?      

The Centers for Medicare and Medicaid Services ("CMS") will not accept healthcare claims based on work done by "excluded persons". In addition, no state Medicaid claims are allowed to be presented to CMS for payment based on work done by exclude persons.
Excluded persons are persons having committed a crime related to the provision of health care, (e.g.; criminal convictions related to healthcare programs as well as to controlled substances) or having engaged in conduct characterized as unacceptable in the provision of health care   (e.g.; sexual assault or patient abuse).

Federal law prohibits any payment made by Medicare, Medicaid or any of the other federal health care programs for any item or service furnished by an excluded individual or entity, or at the medical direction or on the prescription of a physician or other authorized individual who is excluded when the person furnishing such item or service knew or had reason to know of the exclusion.
The focus is not on the relationship but on the payment. If the Office of the Inspector General excludes a person from Medicare, the state must exclude that person from that state's Medicaid program.
Once exclusion of a health care employee occurs, health care providers may employ or contract with excluded persons, but may not allow excluded persons to provide or to direct the ordering or delivery of services or supplies, or to undertake certain administrative duties.  This applies whether or not direct care activities are involved as long as any part of the task is reimbursed by federal program dollars. Providers that utilize staffing agencies must be sure that the agencies are screening potential candidates to ensure that they have not been excluded prior to being sent to providers for work.  Providers must develop and enforce contractual agreements to ensure prescreening occurs by the staffing agencies.
Potential liability for employing or contracting with excluded individuals and/or entities includes for the excluded individual/entity submitting claims: up to $11,000 fine for each item/service claimed or "caused to be" claimed; plus treble damages of the amount claimed for each item/service; plus extension of any existing exclusion period.  Reinstatement is not automatic after exclusion and providers must apply for reinstatement.  A violation also potentially amounts to a false claim under Federal False Claims Act. This provides a separate basis for administrative sanctions or exclusion.

For any inquires  regarding this article, please contact David S. Barmak, Esq. at or by telephone at (609) 454-5351.

What To Do If Federal Agents Threaten To Knock Down Your Door  

It is 7:30 AM on Wednesday. Ten federal agents with guns and search warrants appear at your door. They threaten to break the door down unless granted admission.  Your employees open the door. The federal agents enter and then lock your doors, telling your employees that they may not leave. The federal agents confine your employees to one office while the agents literally begin to cart off records of all types, including but not limited to, active and inactive medical records, contracts, employment records and billing documentation. The federal agents even appear ready to cart off your computers because of the information that might be on the computer hard drives.
Or how about this more likely scenario:  During routine business hours, an investigator from the state Medicaid Fraud Control Unit appears with the intention of reviewing documents and interviewing employees.
In either situation, would your employees know how to respond? Have your employees been properly trained to know how to respond?  The procedures discussed below apply to both scenarios.
Compliance Program
An effective compliance program must establish a policy to deal with an orderly response to government investigations to enable the company to protect its interests as well as appropriately cooperate with the government investigation.  A well rehearsed policy and procedure is required to address either of the above scenarios. 
Request for Interview
When government agents or investigators appear on-site and request an interview with an employee, the Administrator, Compliance Officer and Compliance Attorney must be notified immediately.  An employee is under no obligation to consent to an interview although anyone may volunteer to do so. If an interview is agreed to, the staff member should always be polite and ask for the name, agency affiliation, business telephone number and address of all investigators as well as the reason for the visit. The investigator must be asked if there is a subpoena or warrant to be served and for a copy of same.  The interview may be stopped at any time with a request that the investigator return when the Compliance Attorney can be present. It is strongly urged that the company not consent to any interviews without the Compliance Attorney being present. While employees have a right to their own individual legal counsel, it is recommended that the company's Compliance Attorney be present during any interviews and that staff be advised that the company's Compliance Attorney will at least initially be available to advise the employees as to how to proceed; however, it must be made clear to the employees that the Compliance Attorney represents the company and not them. If an employee chooses to not respond to the investigator's questions, the investigator has the authority to subpoena the employee to appear before a grand jury. Any staff member contacted by an investigator outside of work should also immediately notify his or her supervisor and provide as much information and documentation about the investigation as is possible. This notification must find its way to the Administrator, Compliance Officer and Compliance Attorney.
The Search
The company should request that the investigator wait until either the Compliance Officer, Compliance Attorney or Administrator arrive. Whoever arrives first is referred to going forward as "the employee in charge". While the investigator waits for the employee in charge, the company's employees must not alter, remove or destroy permanent documents or records of the company. Once an investigation begins, the destruction portion of any policy on record retention is suspended.  If the investigator presents a search warrant or warrant, the investigator has the authority to enter the premises, search for evidence of criminal activity and seize only those documents listed in the warrant. No staff member has to speak to the investigator but must provide the documents requested in the warrant. A copy of the warrant with the affidavit providing reasons for the issuance of the warrant must be obtained.
All staff members should notify the investigator that they request an opportunity to consult with the Compliance Attorney before the search begins and certainly before consenting to any interviews with the investigator. If the Compliance Attorney can only be reached by telephone, put the Compliance Attorney directly in touch with the investigator.   The Compliance Attorney will advise the investigator that the search is objected to, unjustified because the provider / supplier is willing to voluntarily cooperate with the government and that the search will violate the rights of the provider / supplier and its employees. Under no circumstances should staff obstruct or interfere with the search. If cooperation is required, then staff members should indicate that their cooperation does not constitute consent to the search. A log of all documents, with copies if possible, and the information contained in the documents given to the investigator, should be tracked. This is especially true if medical records are given to the investigator.  A parallel inventory of the documents seized is the ideal way to keep track of what documents are provided to the investigator.  If the investigator makes it difficult to copy and itemize documents seized during the search, the employee in charge must request an inventory of the seized documents before the investigator leaves the premises. A copy of the warrant should be annotated with the date and time that the search was completed as well as signed by the investigator with his / her full title, address and telephone number.
The employee in charge should remain with the investigator at all times. Investigators should never be left alone on the premises and no employee, other than the employee in charge, should be left alone with the investigator. 
It is essential, as part of an effective compliance program, that the employees of a provider / supplier be fully familiar with the appropriate procedure to follow should a government agent or investigator unexpectedly appear at your door. Your Compliance Attorney should be immediately notified, along with the Administrator and Compliance Officer, any or all of whom will then take charge of the situation, direct employees and cooperate while minimizing both disruption and potential liability. 

For any inquires  regarding this article, please contact David S. Barmak, Esq. at or by telephone at (609) 454-5351.

Barmak and Associates, LLC      


Our law firm provides integrated regulatory, transactional, employment and litigation/advocacy services to skilled nursing facilities and other healthcare providers.


Representative Clients: 

Entities:  Skilled nursing facilities; Home health agencies; Hospice agencies; Hospitals.


Providers: Physicians; Therapists; Orthotists and Prosthetists


Suppliers:  Durable medical equipment; Long-term care pharmacies; Retail pharmacies.


Businesses: Billing; Management service organizations; Independent provider associations


Regulatory Issues: Corporate Compliance Programs (Fraud, waste & abuse; Privacy & Data Security; Employment); Healthcare facility; Licensed Professionals; Medicare & Medicaid (certification, survey and reimbursement); Auditing (legal; clinical; administrative; and reimbursement).


Transaction Issues: General Counsel Services; Contracts.
Employment Issues: Wage and hour; Equal employment opportunity; Discrimination; Whistle-blowing; Employment agreements; Severance packages; Employee release agreements, Non-compete agreements; Non-solicitation agreements; Confidentiality agreements, Employee leave issues, Electronic monitoring and employee privacy, Employee separation (suspensions, terminations and reductions in force); Documentation.


Litigation/Advocacy: Contracts; Employment; Fiduciary issues; Commercial leases; Payment (Managed Care Organizations; Medicare; Medicaid); Guardianship; Professional and facility licensing; Healthcare regulatory; Fraud and privacy issues.
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This newsletter has been prepared by Barmak and Associates, LLC for informational purposes only and is not intended to provide legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.


For more information, please contact:

David S. Barmak, Esq.

Telephone (609) 454-5351
Fax (609) 454-5361 

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