Skilled Nursing Provider Agrees to Pay $360,000 for Employing Excluded Workers

Daybreak Venture, a company providing skilled nurses, has settled charges brought by the Office of the Inspector General that they hired staff that had been excluded from employment with federal health programs, authorities announced.

The OIG’s Office of Audit Services did an investigation that turned up five excluded employees. During the federal investigation, Daybreak Venture revealed they had hired two additional unauthorized employees, according to the announcement.

In March 2014 the OIG initially contacted Daybreak regarding this matter and as a result the company performed it’s own audit covering about 5,000 staffers and entities that are presently or had been linked with Daybreak Venture.


The CEO of Daybreak, Michael A. Rich has assured the federal government that since the company discovered these transgressions, they have pledged additional resources and people to work in its Compliance Department to conduct ongoing re-verifications of staff members and entities to prevent those on OIG’s excluded list from employment. He went on to state that the company is fully committed to hiring only those people who are eligible.

Individuals can lose their eligibility to work with federal health programs like Medicaid and Medicare for a number of different reasons, but the most serious would be that they have a criminal record of being convicted of abuse or fraud. Providers are barred from hiring these individuals and then charging the government program for the services provided by them.


A Deputy Chief in one of the branches of the Office of the Inspector General says they’ve found that nursing homes tend to employ excluded individuals more than other health care providers. The updated guidelines provide a time period for employers to check the database online that lists all the excluded or unauthorized individuals, entities and organizations.


The settlement with Daybreak Venture took effect October 24, 2014.

Working Within The Parameters Of OIG Exclusions

The release of the 2015 work plan by the OIG gives employers a slightly clearer picture of what is to come. With last year showing over 4,000 exclusions and close to 1,000 penalties, many employers have become fearful of adhering to the parameters of restriction. However, the recovery action of this year’s plan is highly focused on rectifying best practices, and the federal fiscal gain could benefit employers who are up to code.

One of the greatest concerns appears to the increase in audits that are expected to be performed. It should be noted that while health and safety standards are high goals for this work plan, the stronger scrutiny of the auditing process is also focused on outright fraud and poor business practices.

This does not mean that solid employers should stop being vigilant regarding verification and new hire screenings. The fine print of over $4 billion in receivables can also be read as hefty fines and penalties for non-adherence to federal hiring regulations. While the OIG may be more concerned with fraud and misuse of SSA and Medicare funds, exclusion violations do contribute to this drain on the national budget.


Receiving a fine due to an oversight should not be a fear for HR managers and hiring entities, but the truth is that lack of knowledge is not passing as an acceptable fault in the eyes of the OIG. This further drives the need for time efficient and thorough screenings that can allow hiring personnel to stay focused on a best fit for qualified applicants.

HHS OIG Hiring Enforcement Gets A Boost From None Other Than The President

While the president of the United States certainly can’t be involved in all decisions related to federal law enforcement, it seems as if he is making his influence felt when it comes to HHS.

At the moment, it’s not known whether the president’s budget stands much of a chance with the Republican-controlled Congress. However, even in the most difficult of times, the ideas that a president puts forth tend to define the budget discussion going forward.

President Obama has sent a message here: Greater enforcement for HHS compliance efforts.

The president’s budget will allocate a very significant amount — $119 million — for anti-fraud measures. While these are focused on Medicaid and Medicare on paper, they could also have implications for other areas of compliance enforcement, including OIG-compliant hiring.

Why the sudden interest in healthcare fraud and compliance in particular?

— Healthcare policy is in a state of flux and politicians want to demonstrate return on investment.
— Democrats are especially keen to avoid high-profile blunders like the ACA website roll-out.
— Enforcement and fraud prevention both have a role to play in enhancing federal revenues.

If HHS funding climbs in the 2015 budget, it is very likely to continue its ascent in any other recent budgets. This is especially likely in the event the Democrats retain control of the White House.

The fact that enforcement in healthcare contexts is climbing while the IRS budget is being reduced also sends a strong signal about the increasing centrality of healthcare in federal policymaking.

A Sea Change In Healthcare Could Leave Some Chief Compliance Officers Washed Up

Another aspect of the issue is the fact that, one way or another, healthcare is simply more visible now than it was even as few as three years ago.

With more people paying closer attention to healthcare — including a broad spectrum of citizens from twenty-somethings to the retired — there is a sense that noncompliance represents someone not doing their fair share

This is true even when it’s a complex issue that the average person doesn’t understand, like HHS OIG hiring.

How do you think additional funding for the OIG will effect exclusion screening?

What Healthcare Providers Need to Know About OIG Compliance: 5 Top Questions Answered

Healthcare providers, no matter their size, must consider numerous legal and ethical factors when hiring employees and performing services. One of the most important of these is compliance with the Office of the Inspector General’s exclusion guidelines. Here are answers to five of the most common questions regarding exclusion and its effect on healthcare providers:

What Is the OIG Exclusion List?
The OIG exclusion list, called the List of Excluded Individuals/Entities, is a list of people who are prohibited from claiming payment from any federal health programs, including both Medicare and Medicaid. This list is available to healthcare providers, patients and the public. Individuals are typically placed on the list because they have been convicted of Medicare or Medicaid fraud, patient neglect or abuse, or felonies related to patient care and/or the distribution of prescription drugs.

Does Exclusion Prevent an Individual From Being Treated?
It is important to note that being placed on the LEIE precludes a person from being paid through federal health programs for providing services; it does not mean that they are not allowed to be treated through Medicare or Medicaid.

Why Does OIG Healthcare Compliance Matter?
OIG healthcare compliance affects not only individuals, but healthcare providers. This is because, should any provider hire or contract services out to a person on the exclusion list, the federal government can refuse payment and subject the organization in question to monetary penalties. OIG compliance is one of the many reasons over two-thirds (68%) of healthcare providers have internal committees that oversee compliance and ethics. Of these, 41% are led by a chief compliance offer who reports findings and makes recommendations to the committee.

How Can I Screen for Excluded Individuals?
OIG exclusion screening can be conducted using a database provided by the OIG, made easier by supplementary software. However, one of the challenges of screening is that potential matches need to be confirmed (since matches are made based on names, and not social security numbers); some organizations handle investigations internally, while others prefer to contract those services out. OIG exclusion checks should be performed on a regular basis, since new employees are constantly being hired and the list is also being updated.

Is It Possible to Be Removed From the Exclusion List?
After the period of exclusion specified by the OIG, an individual can apply for reinstatement by contacting the Office of the Inspector General and filling out special forms. It’s important to note that reinstatement is not automatic after the exclusion period ends. If reinstatement is approved, the individual is removed from the exclusion list and can be safely hired by healthcare providers.

Do you have any other questions about OIG healthcare compliance? Join the discussion in the comments.

What are the consequences for employment of an excluded individual?

A provider who employs an excluded individual to provide items or services that are reimbursed by Federal health care program funds will be required to pay back 100% of the funds improperly received and may be subject to liability under the Civil Monetary Penalties Law.
The Bulletins and relevant sections of the SSA should be reviewed by all health care providers who receive funds from Federal health care programs to ensure liability is avoided. Read More Here