PURPOSE:
The purpose of this policy is to prevent the employment and/or retention of, or contracting with, an individual or entity that is excluded or suspended from participation in federally-funded or State health care programs, including persons who 'opt out' from participating in the Medicare program.
The purpose is also to ensure compliance with federal and State regulations regarding the employment of excluded/suspended or "opt out" individuals and entities and to avoid possible Civil Monetary Penalties for employing or contracting with such individuals and entities.
DEFINITION(S): Excluded/Suspended means the federal government or the State Medi-Cal agency has determined that because of a particular reason (criminal activity, fraud, etc.) , an individual or entity cannot provide or order services for patients under a federal or State health care program or submit claims for reimbursement for services provided to those patients. Exclusion/suspension can apply to a workforce member or entity engaged in clinical or non-clinical work . In some cases, an excluded or suspended individual may be reinstated by the sanctioning agency, but the individual or entity must formally apply for reinstatement with that agency. There are no automatic reinstatements.
Payments received for direct or indirect services ordered or provided by an excluded or suspended individual or entity must be identified and repaid to the government program
Direct Services, for the purpose of this policy, are those services directly provided to the patient or in support of patient care (e.g., medical exams, laboratory tests, and equipment orders).
Indirect Services, for the purpose of this policy, are functions necessary for the overall performance of the Department (e.g., administrative, finance, human resources, facilities management, and environmental services).
Opt Out is a process whereby physicians and practitioners can choose not to have Medicare pay for their services. In such cases, generally, neither the physician, nor the patient, can submit a bill to Medicare for reimbursement of services by a physician who has opted
out. When opted out, physicians and practitioners can only be reimbursed from Medicare for certain urgent or emergent care services they provide. Opting out from Medicare is considered a voluntary exclusion; therefore, workforce members are prohibited from opting out of Medicare.
Exclusion/Suspension Lists - The federal and State agencies (Office of the Inspector General (OIG), General Services Administration (GSA), and California Department of Health Care Services) maintain publicly accessible lists online that contain the names of individuals and entities that have been excluded or suspended. OHS screens all workforce members against these lists (List of Excluded Individuals and Entities (LEIE), System for Award Management (SAM), and the Medi-Cal Suspended and Ineligible Provider List (S&I), respectively. DHS also screens workforce members against the Medicare Opt-Out Lists.
Workforce or Workforce Member includes employees, contract staff, affiliates, volunteers, trainees, students, and other persons whose conduct, in the performance of work for OHS, is under its direct control, whether or not they receive compensation from the County.
POLICY: The Department of Health Services (DHS) will not knowingly employ, retain, contract with, or purchase products or services from or accept volunteer services from individuals or entities that are excluded or suspended from participation in federally-funded or State health care programs.
As a condition of employment or contract engagement, all workforce members must maintain eligibility to participate in federally-funded and State health care programs. This applies equally to direct and indirect patient care service providers, administrative staff, and other staff not directly involved with patient care (e.g., environmental services, security, and dietary).
![]()  Prior to entering into employment or contractual relationships with DHS, and monthly thereafter, the DHS will check the exclusion and suspension status of individuals and contract entities by reviewing the following exclusions/suspension lists to determine whether the individual or entity is excluded from participating in federally-funded and State health care programs: -
![]() U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) List of Excluded Individuals and entities (LEIE) -
U.S. General Services Administration (GSA) System for Award Management (SAM), and the -
State of California Department of Health Care Services (DHCS) Medi-Cal Suspended and Ineligible (S&I) Provider List. DHS will also screen workforce members against each state Medicare Opt Out list on a monthly basis.
The suspension/exclusion and Opt-Out screenings are also conducted for all workforce members during the onboarding and credentialing process along with Live Scan background checks. Verification of licensure/certification/permit/registration status of applicable workforce members is also conducted during onboarding and monthly prior to professional credentials expirations.
Potential workforce members are required to attest during the electronic onboarding process that they are not, to the best of their knowledge, excluded or suspended from participating in a federal or State health care program or ineligible to bill Medicare.
Current workforce members and contract agencies are required to immediately report to their supervisor /sponsor or Facility Liaison, respectively, if they become subject to an exclusion, or suspension, or they opt out of Medicare. Workforce members and contract agencies must also report to their supervisor /sponsor or Facility Liaison if they become aware that another workforce member or a contract agency has become subject to an exclusion, suspension or has registered for the opt out program. The Department will terminate any employment or contract agreement with any individuals or entities that are found to be excluded or suspended by the OIG, GSA, or Medi-Cal. Claims that the action that led to the individual's exclusion/sanction was committed prior to employment/assignment with DHS will not prevent the termination. Further, DHS will stop accepting volunteer services which could be compensated by a federal or State health care program from volunteers who are excluded or suspended. DHS will notify a health plan sponsor of any individuals excluded from federal or state programs, as well as individuals with confirmed compliance or fraud, waste, and abuse violations that may have provided services on behalf of the sponsor
The Department will review the circumstances regarding the 'opt out' status of a physician or other practitioner and, at its sole discretion, determine the most appropriate corrective actions to mitigate the situation, as necessary, such as allowing the physician or practitioner an opportunity to attempt to obtain retroactive reinstatement of Medicare eligibility. DHS will be required to repay Medicare for services it billed for physicians/practitioners who have opted out and will expect the physician/practitioner to repay DHS for the lost revenue, fines/penalties, and other related costs.
The contracting agency will bear full financial responsibility for all directly related costs (repaid claims) and indirectly related costs (legal fees, Civil Monetary Penalties, etc.) imposed on DHS as a result of their use of excluded, suspended, or opted out person(s), or the agency's own exclusion or suspension.
The Director of Health Services or his/her designee's written approval is required to waive the requirements of this policy in appropriate circumstances.
REFERENCE(S)/AUTHORITY: Social Security Act, Sections 1128 and 1156 (42 USC Sections 1320a-7 and 1320c-5) 42 United States Code (USC) Sections 1395y(e); 1396a(a)(39)
42 Code of Federal Regulations (CFR) Section 1001.1901 42 Code of Federal Regulations (CFR) Part 1003, Subpart B
United States DHHS, OIG, Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs - May 8, 2013 (Updated May 9, 2013) California Welfare & Institutions Sections 14043.6, 14043.61 and 14123
Los Angeles County Code, Title 5, Civil Service Rule 18, Suspension, Discharge, Reduction and Resignation
DHS Code of Conduct
DHS Discipline Manual and Guidelines
The Centers for Medicare and Medicaid Services (CMS) issued Medicare Learning Network (MLN) Matters ® Number: SE1311, Revised on January 14, 2015, to clarify the opt out process and requirements
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