Posted by Steve DeGenaro on Wed, Jan 19, 2022 @ 09:56 AM


Nothing strikes fear into the hearts of DME owners, managers, and staff more than the Office of the Inspector General (the “OIG”). The fear is perhaps deserved by an extremely small handful of industry people. The vast majority of our industry rank and file have nothing to fear from this sometimes maligned and misunderstood government agency.

The Office of the Inspector General was established and continues to “protect the integrity of the Department of Health & Human Services as well as the health and welfare of beneficiaries served by them.” The OIG does this by auditing and inspecting providers -- including DME’s. They also are tasked with issuing sanctions and fraud alerts. Finally, they provide feedback and advice to the Secretary of Health & Human Services and assist in formulating legislative solutions to problems related to fraud and abuse. By any measure, they have significant influence and power.

The OIG’s authority that can seem intimidating. However, the only DME businesses that have any reason to fear them are companies that take shortcuts and don’t follow the rules. Most of our industry tries very hard to do the right thing and pulls it off completely – and compliantly!

A good start to understanding the OIG and their role in our industry is to understand some very basic terminology relating to what the OIG polices. Fraud, waste, and abuse are words you’ll hear in any conversation about the OIG. The terms are often misunderstood and used interchangeably, but each has its own definition.

Fraud, Waste, & Abuse

Fraud is defined as wrongful deception intended to result in financial gain. The key word is INTENDED; for fraud to occur, there must be intent. Fraud is not a mistake or oversight, it is purposeful criminal behavior. In DME, it includes making false statements and omitting important/relevant information.

Waste is the careless monitoring of expenditures and other resources (money!) which results in financial loss because of inefficient or ineffective practices and controls. Unnecessary costs resulting from these practices and controls are waste.

Abuse is defined as excessive or improper use of something outside the natural or legal use for it. Thus, abuse can be over utilization of a product or service or treatment. Abuse is often financial in nature, but can be non-financial as well.

Fraud is generally the most serious of these issues and is the one that requires intent. You can inadvertently commit waste or abuse, but fraud only occurs if the party committing the fraud means to cheat the system.

Developing a Compliance Plan/Program

Compliance with law & regulation, as well as accreditation standards and industry best practices are the best way for an organization to avoid fraud, waste, and abuse. Think of these rules as a set of checks and balances to ensure that your company stays out of trouble.

One of the best ways to do this is to set up a Compliance Program, codify it into policy & procedure, and make sure all staff are aware of the program. It is important that your organization does this. In fact, it is so important that it is a separate and distinct accreditation standard. The simplest way to wrap your arms around what is often considered a complex set of rules is to refer to HQAA accreditation standard ORG 5. ORG 5 states that you develop a compliance program unique to your organization which covers seven required “elements”:

  • Implementation of policies & procedures
  • Designation of a Compliance Officer (person responsible for the program within the organization)
  • Training/education of all staff
  • A process for the investigation of complaints
  • Monitoring and auditing activities (indicators within a quality improvement program, for instance)
  • Disciplinary guidelines
  • A system for corrective actions when issues are identified.

Surveyors will expect to see written policies & procedures that describe the compliance program at an organization. But more importantly, they will expect staff to be conversant about the program, at least as far as their role in the program is concerned. For instance, staff should be able to articulate that they have been trained on compliance, they should be able to describe their role in maintaining compliance, and they should know who the compliance officer is at the company.

OIG Exclusion List

A frequently misunderstood OIG regulation that surveyors check for during accreditation visits is that an organization is checking the OIG Exclusion List. This ranks as one of the most frequently cited OIG issues. There aren’t many organizations that have real issues with staff showing up on the list. Rather, it is usually simply that organizations are not aware of the list and are not checking.

The OIG has the authority to exclude individuals and businesses from participating in federally funded health care programs for a variety of reasons, including Medicare and/or Medicaid fraud. Excluded individuals and businesses may not receive payment from these programs. This list is formally titled the “List of Excluded Individuals/Entities” or LEIE. Not only are these individuals (and companies) excluded from participation, but any company that hires someone on the list may face “civil monetary penalties” (put simply, a fine). To avoid liability and fines, a company must routinely check the list to ensure that both newly hired and current employees are not on it. The list should be used as a screening tool for hire, but also must be checked occasionally for already hired, on board employees.

Keep in mind that exclusion applies to all employees -- not just clinicians, employees working directly with patients, or billing staff. Support staff, administration, and managers all need to be checked as well.

The LEIE is updated monthly. To stay current and ensure they are compliant with this rule, providers should screen employees on a monthly basis.

So, what would cause a person to end up on the exclusion list? For starters, Medicare and Medicaid fraud. Also, any kind of patient abuse or neglect, felony convictions for various financial misconducts, and most felony drug charges are all deal breakers. Minimum exclusion time periods start at five years for a first offense. Subsequent offences can result in ten-year exclusions all the way up to “lifetime” exclusion.

The exclusion list can be checked at: https://oig.hhs.gov/exclusions/exclusions_list.asp. There are ways to check on line or even download a database for review off line.

Don’t skip this important and often overlooked step in compliance.


The OIG has extensive authority in the DME industry. We could write a book about various aspects of that authority. We’ve covered a few of the important and sometimes problematic standards within that authority. Next month, we’ll look at background checks, which deserve an entire article alone.


Topics: Billing, HQAA Accreditation, HME Accreditation Requirements, Compliance, Avoiding Deficiencies, CMS, Business Practices, OIG