Exclusion Screening Basics for Providers

Doctor in Medical Records room. Exclusion Screening Basics

Exclusion Screening Is Mandatory

Providers of medical services that participate in Federal or State Health Care Programs are required to screen all of their employees, vendors, and contractors monthly to ensure that none have been excluded from either the Medicare or Medicaid programs. Practices that fail to meet this requirement risk Civil Monetary Penalties (CMPs) and overpayments because Federal and State regulations prohibit payment for any item or service that was provided, directly or indirectly, by an excluded person.

Enforcement cases involving the employment of excluded persons are increasing dramatically. The imposition of CMPs more than doubled from 2013 to 2014, and recent case investigations have been supported by data analysis projects by the Office of Audit Services and the Office of Evaluation and Inspections. In light of the increasing enforcement efforts and the potential consequences, it is critical that providers gain a basic understanding of the issues relating to Exclusion Screening and how they can be addressed.

What is an Exclusion?

HHS/OIG has the authority (by delegation from the Secretary) to deny persons and entities the ability to participate in federal healthcare programs. When such an action is taken by the OIG, that person or entity is said to be “excluded” and placed on the List of Excluded Individuals and Entities (commonly abbreviated “LEIE”).

Federal exclusions can be either mandatory or permissive, but both have the effect of barring participation in all federal healthcare programs until such time, if ever, that the government agrees to reinstatement. Mandatory exclusions last a minimum of 5 years and generally involve felony convictions for defrauding health care programs, felony drug offenses, and convictions for patient abuse or neglect. Permissive exclusions implicate a wider range of conduct and most often involve misdemeanor health care fraud, misdemeanor drug offenses, and licensing issues.

States also have the authority to exclude individuals and entities from participating in their own programs, such as Medicaid. Currently, 40 states maintain their own exclusion lists that are separate from the OIG’s LEIE. States will generally add OIG Exclusions to their own list, but they are also free to adopt their own exclusion criteria. It is important to note that states also often fail to report their own exclusions to CMS or the OIG such that it is not uncommon for an individual to end up on a state exclusion list and not the LEIE.

Federal and State Regulations Prohibit Payment for any Item or Service Performed by an Excluded Person

Neither Medicare nor Medicaid will pay for any item or service that results in a claim for reimbursement if an excluded individual contributed to it either directly or indirectly.  The so-called “payment prohibition” is broadly interpreted by the OIG. For instance, in it’s May, 2013 “Special Advisory on the Effect of Exclusions,” they expressed the view that the preparation of a surgical tray or the inputting of information by an excluded person or vendor could taint a claim. Even volunteer work by an excluded person could trigger the prohibition unless the volunteer activities were “wholly unrelated to federal health care programs.”

Thus, a practice that hires an excluded person or does business with an excluded vendor or contractor could find that every billable service he or it contributes to is tainted. They would then be liable for a potential overpayment. Most states have also adopted this rationale and apply it to their Medicaid claims.

Don’t Risk Civil Money Penalties, Overpayments and Potential Actions under the False Claims Act

CMPs are often employed by the OIG as an enforcement tool when it discovers that claims have been made for an item or service that was provided, or contributed to, by an excluded employee. CMPs are very difficult to defend since the OIG has interpreted the relevant federal regulations to mean that the entity either “knew” of the exclusion and still submitted the claim, or that the entity “should have known,” but failed to properly screen the employee. Either way, penalties are appropriate, according to the OIG.

It should also be noted that Section 6501 of the Affordable Care Act (ACA) requires “State Medicaid Agencies to terminate the participation of any individual or entity if such individual or entity is terminated under Medicare or any other State Medicaid plan.” As such, any person terminated under any federal or state authority is subject to exclusion by all federal or state authorities. Therefore, claims by them are potentially problematic.

The failure to screen also creates a risk for providers of being sued under the False Claims Act (FCA).  The theory behind FCA claims, which is employed with increasing frequency, asserts simply that since providers know that Medicare will not pay for a claim by an excluded person, a provider that fails to screen has constructive knowledge of the person’s status or is acting in deliberate ignorance.

Federal and State Screening Requirements

Federal screening requirements, as contained in the May, 2013 Special Advisory Bulletin, requires providers to check the LEIE for employees and contractors. According to the Bulletin’s guidance, providers should “review each job category or contractual relationship to determine whether the item or service being provided is directly or indirectly, in whole or in part, payable by a Federal health care program.” Then, providers should “screen everyone that perform[s] under that contract or in that job category” on a regular (read monthly) basis. If only it was that simple.

It is important to remember that the OIG’s guidance addresses only federal concerns. State Medicaid programs also have screening requirements that generally require, at a minimum, that providers screen their own State Exclusion List (37 States have them plus Washington, D.C.) in addition to the LEIE. Many also require screening of the System for Award Management list (SAM), and/or other State specific exclusions lists (such as sex offender lists, elder abuse lists, etc.). Furthermore, it is not uncommon for States to add onerous screening requirements in enrollment or re-enrollment applications and provider agreements. For example, a number of states require a certification that it has no employees that are suspended or excluded from any Federal or State Health Care Program. Some even require certification that their employees have never been excluded or suspended from any Federal or State exclusion list.

The Difficulty in Meeting Federal and State Exclusion Screening Requirements

Despite the OIG suggestions, the ability of individual practices to meet their federal screening requirements is difficult for a provider of any size. The current web-based LEIE interface allows only five employees to be screened at a time, each of which must be entered manually. Subsequently, potential matches must be verified individually by entering their Social Security Number. This might work for a provider who only has to screen a handful of employees or contractors. For a provider with a large number of employees, however, this would be a long and difficult undertaking.

The alternative OIG suggestion is to download the entire LEIE database and compare it to an employee list, but this is equally problematic – if not more so. The LEIE currently contains almost 60,000 names and few providers have the ability to compare that to their own employee database in any reliable or economically viable way.

Even if a provider has the ability to meet the OIG’s screening obligation, State exclusion lists must also be checked and they present additional problems. To start, State lists come in a variety of formats (Word, Excel, or PDF) with different data fields. Indeed, some State lists have little more than a name and an address. Furthermore, many states have additional state-specific screening requirements for lists. Finally, as previously indicated, practices need to be aware that a number of States have enrollment applications and provider agreements that require providers to certify that they have screened all employees and contractors with all federal and state exclusion lists.

Outsourcing is the Solution that makes Sense

In addition to the logistical problems associated with screening federal and state exclusion lists, there are the practical concerns associated with ensuring compliance with a repetitive and difficult task that may be viewed as “unnecessary” by the person tasked with the job. The best solution all around is to find a vendor who will perform the task for you for a reasonable fee. This fee will probably be considerably less than the cost of doing the screening yourself.

A provider’s choice of a company price is an obvious concern, but there are other important factors to consider. For instance, a provider should ask: What is the company’s background in healthcare? Does it have an understanding of exclusion related issues? Does it have a willingness and ability to assist the provider in determining vendor related issues (such as who to screen and vendor certifications)? Will it provide support as needed? Does it have complimentary products such as hotline services that it can provide at little or no cost? 


Exclusion Screening, LLC is one such vendor that is worthy of consideration. It’s co-founders, Robert Liles and Paul Weidenfeld, have both served as National Health Care Fraud Coordinators for the Department of Justice, and for the last several years they have both represented healthcare providers nationwide. They are healthcare lawyers who saw a problem that healthcare providers were having, and through Exclusion Screening, LLC they have created a simple and cost effective solution. A provider need only put together a list of employees and vendors (with our assistance), and it does the rest for prices that are hard to believe. Please contact us to discuss your particular needs and get a free cost estimate today.

OIG Exclusion

Paul Weidenfeld is the author of this article. Contact Paul should you have any  questions at: pweidenfeld@exclusionscreening.com or 1-800-294-0952.

CMS Finds Fault with Exclusion Information Sharing Between States

I.  Take It from CMS: If You’re Excluded in One State, You’re Excluded in All States

Section 6401(b)(2) of the Affordable Care Act (ACA) required the Centers for Medicare and Medicaid Services (CMS) to create a national database where State agencies could share and access information about individuals and entities that were terminated from the Medicare, Medicaid, or CHIP programs.[1] This platform would help states comply with ACA section 6501,[2] which mandates that a provider must be terminated in all state Medicaid programs if he or she were terminated “for cause”[3] in one state. CMS created the Medicaid and Children’s Health Insurance Program State Information Sharing System (MCSIS) to make this exclusion information available to all State Medicaid agencies.[4]

  Under section 6401(b)(2), states were asked to submit the terminated provider’s name, National Provider Identifier (NPI), and other identifying information to MCSIS. This information was incorporated into MCSIS so that other states could identify providers that needed to be terminated. Even though CMS has the authority[5] to require states to submit this information, it has only asked states to comply. CMS’ failure to make reporting mandatory resulted in a very deficient database.

II.  CMS’ Comprehensive List…Not So Comprehensive

  Only thirty-three states[6] submitted information to CMS and many of the records were incomplete. For example, CMS asked states to only submit providers that were terminated “for cause,” but over 2,000 records lacked a “for cause” termination.[7] In addition, 59 percent of the records also did not include provider NPIs,[8] which the ACA specified as a mandatory database component.[9] Many other data fields, like provider type[10] and address, were blank.

  Seventeen states[11] and the District of Columbia failed to submit any data in the two years between MCSIS’s creation and the Office of the Inspector General’s (OIG) review.[12] Four states[13] submitted 72 percent, or 3,413 of 4,713 total Medicaid records.[14] The other states that reported information reported very small numbers. For example, Massachusetts only submitted two excluded providers between 2011 and 2013.[15] Even though, it excluded fifteen providers in 2012.[16]

 OIG concluded that CMS needed to improve its exclusion information-sharing process.[17] Specifically, CMS should mandate that state agencies report all “for cause” terminations.[18] OIG also stated that CMS should also remove all providers that were not terminated “for cause,” or if it would like to expand its database, then it must issue new guidance instructing the states as to which providers must be terminated under section 6501.[19]

III.  CMS Creates New List: OnePI Portal

  CMS agreed with OIG, and disclosed that it is in the process of creating a private database, the OnePI portal.[20] OnePI is accessible to only CMS, State Medicaid agencies, and CHIP. It provides a private platform for states to share information about terminated providers.

 Under this new system, CMS will require states to submit a copy of the termination letter sent to the provider. Then, CMS will review these letters to ensure that the provider should be included in the OnePI database.[21]

 CMS has not provided a proposed completion date for OnePI.[22] Furthermore, there is no information available in regard to whether this data will be incorporated into the LEIE, if it will be available to providers, or if states will be required to integrate excluded providers from other states into their Medicaid termination lists.

IV. Conclusion

This inaccurate reporting of data illustrates why it is critical to check all state Medicaid lists in addition to OIG-LEIE and GSA-SAM. You will be held responsible if you employ or contract with an excluded individual. A provider that is excluded in one state is excluded in all states. 


Ashley Hudson, Associate Attorney at Liles Parker, LLP and former Chief Operating Officer for Exclusion Screening, LLC, is the author of this article. Contact the exclusion experts at Exclusion Screening, LLCSM today for a free consultation by calling 1-800-294-0952 or online.

[1] Dep’t of Health and Human Servs. Office of the Inspector Gen., CMS’s Process for Sharing Information about Terminated Providers Needs Improvement, 1–2 (Mar. 2014).

[2] 42 C.F.R. § 455.416(c).

[3] States are only required to terminate providers from their Medicaid programs if they were terminated “for cause” under another state program. “For cause” means a provider was terminated due to fraud, integrity or quality.  Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 2.

[4] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 1.

[5] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 13.

[6] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 7.

[7] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 7.

[8] Not all providers are assigned NPIs. Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 4, 9.

[9] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 2.

[10] Thirty-three percent of MCSIS records did not contain information about the provider type. Furthermore, some states identified 95 percent of providers as “other” when 25 different specific provider types were provided in a drop-down menu. See Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 11.

[11] The seventeen states were: Colorado, Hawaii, Kentucky, Minnesota, Montana, New Hampshire, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, South Carolina, South Dakota, Texas, Utah, West Virginia, and Wyoming. See Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 16.

[12] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 7.

[13] California, New York, Pennsylvania, and Illinois. See Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 7.

[14] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 7.

[15] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 16.

[16] Massachusetts Health and Human Services, Suspended/Excluded MassHealth Providers as of 5/31/2014, 2, http://www.mass.gov/eohhs/docs/masshealth/provlibrary/suspended-excluded-masshealth-providers.pdf (last accessed June 6, 2014).

[17] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 13.

[18] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 13.

[19] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 14.

[20] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 22.

[21] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 22.

[22] Dep’t of Health and Human Servs. Office of the Inspector Gen., supra note 1, at 22–23.