Frequently Asked Questions​

Exclusions are final administrative sanctions imposed by the Office of Inspector General for the Department of Health and Human Services (HHS/OIG, or simply OIG) that bar individuals and entities from participating in Federal and State health care programs such as Medicare, Medicaid, CHIPs, and any other program that receives federal funding.  Federal programs are prohibited from paying for items or services provided by excluded parties, and providers that employ or contract with them risk the imposition of civil money penalties and significant overpayments liability. In addition to the authority to impose exclusions, OIG is authorized to enforce compliance with exclusion regulations through civil money penalties and overpayments.

Federal healthcare programs (Medicare, Medicaid, CHIPs, TRICARE, etc.) are prohibited from paying for any item or service furnished directly or indirectly by excluded parties. It is a complete ban on payment that extends to all services, not just those billed directly, and to all methods of payment. In addition, providers of services to these programs may not hire or contract with excluded parties. The consequences of the payment prohibition can be severe. All reimbursements made in violation of it are overpayments which must be repaid, and civil money penalties can be imposed for employing or contracting with excluded parties. It is also noted that under the ACA, unpaid overpayments can result in false claims act liability. 

Exclusions can be imposed for a variety of reasons but the vast majority (about 90%) are imposed for convictions related to health care fraud, patient abuse, and offenses related to controlled substances, or for the suspension, revocation, or surrender of a license to provide health care based on professional competence, performance, or financial integrity. That said, the two largest categories outside those identified above are defaulting on federal education loans and for the transfer of an excluded entity to a family member or member of the household to avoid the consequences of an exclusion (which together amount to about 5%).

The Office of Inspector General (OIG) has the authority to impose a mandatory exclusion if one of the following conditions are met: 1) A conviction of any type related to a Federal or State Health Care Program; 2) A conviction of any type relating to the neglect or abuse of patients; 3) A felony conviction relating to a health care fraud program other than Medicare or Medicaid, and 4) A felony convictions relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. Mandatory exclusions must be imposed for at least five years but are often imposed for a much longer period of time. 

Permissive exclusions are generally imposed for at least three years (there are some exceptions) and there is a much wider range of conduct for which they may be implemented. By way of example, they can be imposed for any of the following reasons:

• Misdemeanor convictions related to fraud or to certain drug offenses
• Providing unnecessary or substandard services;
• Submission of false or fraudulent claims to a Federal health care program,
• Defaulting on health education loan or scholarship obligation, and
• Controlling a sanctioned entity as an owner, officer, or managing employee

Although there are over 20 different bases for the imposition of permissive exclusions, almost 90% are based on a licensing disciplinary action, such as a suspension, revocation, or surrender. Beyond licensing, the other main categories for permissive exclusions are defaulting on federal education loans and the transfer of an excluded entity to avoid the consequences of an exclusion.

By way of example, they can be imposed for any of the following reasons:

• Misdemeanor convictions related to fraud or to certain drug offenses
• Providing unnecessary or substandard services;
• Submission of false or fraudulent claims to a Federal health care program,
• Defaulting on health education loan or scholarship obligation, and
• Controlling a sanctioned entity as an owner, officer, or managing employee

Although there are over 20 different bases for the imposition of permissive exclusions, almost 90% are based on a licensing disciplinary action, such as a suspension, revocation, or surrender. Beyond licensing, the other main categories for permissive exclusions are defaulting on federal education loans and the transfer of an excluded entity to avoid the consequences of an exclusion.

For mandatory exclusions, the OIG sends a “Notice of Exclusion” that includes the basis and length of the exclusion, the earliest reinstatement date, the requirements for reinstatement, and the party’s appeal rights.  The OIG process for permissive exclusions begins with a “Notice of Intent to Exclude” that gives the individual or entity 30 days to respond in writing with relevant information or evidence in addition to information regarding basis, length and appeal rights.  Permissive exclusions are not final until the conclusion of the appeal process.

Mandatory exclusions are final twenty days after the “Notice of Exclusion and are not stayed during appeal. Although parties have appeal rights, they do not have the right to contest or re-litigate “final determinations.”  And since all mandatory exclusions and most permissive exclusions are based on final determinations (convictions or final disciplinary actions), the right to contest and appeal exclusions is almost always limited to their length.  Once an exclusion is final, the OIG posts it on the LEIE, and sends notices to various State and Federal interests including, but not limited to, State licensing boards, State health programs, medical societies, Medicaid fraud control units, and the National Practitioner Data Bank.  

The process of imposing and appealing is governed by 42 C.F.R. §§ 1001.2001- 1001.2007.  . 42 C.F.R. 402.214.  For more info, A providers guide

Mandatory exclusions must be imposed for a minimum of 5 years and most permissive exclusions are imposed for a minimum of 3 years (there are a few that can be imposed for slightly shorter periods).  However, these are minimum periods of time and, depending on the facts and circumstances, they can be imposed for significantly longer periods of time. 

Providers should screen prior to employment or to the initiation of a business relationship and monthly thereafter. Monthly screening makes sense because a person’s exclusion status is always subject to change. It is required by all Medicare Advantage Plans, all State Medicaid Programs, and all Medicaid Managed Care Organizations. In addition, CMS and the OIG have equivocally expressed its support, and the OIG has linked a failure to screen with overpayment and CMP liability. 

Providers are responsible for ensuring the exclusion statutes of all employees, vendors and contractors that provide items or services, directly or indirectly, in whole or in part, that are payable by federal health care programs. This is not limited to direct billers, and examples of services identified by the OIG include the following: transportation service providers, administrative services, medical equipment suppliers, billers and coders pharmacists, etc. When in doubt as to who should be screened, providers may want to consider that the OIG has stated that civil penalty liability is “greatest for those persons that provide items or services integral to the provision of patient care.”

The GSA/SAM list is centralized registry that identifies individuals and contractors that have been debarred or suspended from contracting with federal agencies.  The name is derived from the fact that the General Services Administration (GSA), the agency that oversees federal government contracting and procurement activities, is responsible for administering and updating the list; and the list is hosted on the agency’s System of Award Management (SAM).  In 2012, the GSA’s Excluded Provider List System (EPLS) and several other active and legacy debarment and suspension systems were migrated to GSA/SAM to consolidate and centralize the process.

The LEIE, or List of Excluded Individuals/Entities, is the database that identifies all of the individuals and entities that are currently under an exclusion sanction imposed by the Office of Inspector General (OIG).  The LEIE is hosted and maintained by the OIG,  which has the authority to impose exclusions and enforce violations of exclusion regulations. The LEIE website and it currently has almost 80,000 entries and increases each year. 

The requirement to screen the GSA/SAM is most often added by payers and programs to the requirement to screen the LEIE. State Medicaid programs are required to include it in screening obligations; all Medicare Advantage and Medicaid Managed Care Programs require that it be screened; CMS requires it as part of its oversight responsibilities of the Medicaid program; and the OIG now adds GSA/SAM screening in their Corporate Compliance Plans connected to false claims act settlements.

Every provider that provides items or services that are reimbursed, in whole or in part, by a federal healthcare program is required to ensure the exclusion status of their employees, vendors and contractors – and the only way to fulfill that obligation is to affirmatively check, or “screen,” the Office of Inspector General’s List of Excluded Individuals/Entities (the LEIE).  Federal health care programs are defined broadly so that they include Medicare, Medicaid, CHIPs, TRICARE, and any other programs that receives any federal funding. 

Participating providers with private payers are also likely to be required to screen the LEIE regardless of whether or not they accept federal funds!   Most participation agreements with private payers include contractual clauses that specifically exclude reimbursement for items or services provided by excluded parties.

If an individual is excluded, then he or she may not directly or indirectly participate in the Federal health care programs. No federal payment will be made for any items or services that are furnished or provided by excluded persons. Read more about exclusions here and here.