OIG Trumpets Exclusions, New Actions and Recoveries in its Semi-Annual Report to Congress

OIG report
I.  OIG Report

In the Office of the Inspector General’s (OIG) semiannual report to Congress, it claimed credit for excluding 2,297 individuals and entities from Medicare, Medicaid, and other Federal health care programs. The OIG also claimed credit for initiating 506 criminal and 267 civil actions. According to the OIG report, most of the exclusions resulted from convictions for crimes relating to Medicare or Medicaid, patient abuse or neglect, or license revocations. The civil and criminal actions were primarily initiated against “individuals or entities engaged in health-care related offenses.” In addition, the OIG told Congress that it was responsible for generating $1.26 billion in investigative receivables due to the Department of Health and Human Services.[1]

II.  Failure to Screen

The OIG also identified some of the cases that were felt to be important. Two of these cases involved exclusion related issues. In one case, the OIG imposed $15,000 in penalties against a company under a corporate integrity agreement for failing to timely screen employees and other “covered persons.” This is of particular interest to us because the penalty was not imposed for having an excluded employee. Instead, the penalty was imposed for failing to screen! This, again, demonstrates the interest and concerns of the OIG in exclusion issues.

III.  Mandatory Exclusion 

In the other case, a physician who had been excluded due to a conviction for a health care related offense, arranged an elaborate scheme to hide his involvement in a dermatology practice so that it could bill Medicare and Medicaid for services despite his excluded status. His scheme was eventually discovered, and he was tried by a jury. He was then convicted of health care fraud, bankruptcy fraud, identity theft, and the filing of false tax returns. Ultimately, he was sentenced to 8 years and 3 months of incarceration, ordered to pay $265,330 in restitution, and fined $2.6 million. 

IV.  Permissive Exclusion

Finally, the OIG report also states that the OIG continues to enforce the HEAL (Health Education Assistance Loan) Program. It further states that 20 individuals entered into settlement agreements, and $1.5 million was collected during the reporting period. We bring this up as a reminder that vigilance in this area is a necessity! There are any number of different ways for individuals and entities to be excluded from Medicare and Medicaid. Let the experts at Exclusion ScreeningSM help ensure your organization does not employ an excluded individual or entity. Contact us for a free consultation at 1-800-294-0952 or fill out our online service form.

OIG Exclusion

Paul Weidenfeld, Co-Founder and CEO of Exclusion Screening, LLC, is the author of this article.


[1] U.S. Dept. of Health & Human Services Office of Inspector General Semiannual Report to Congress, at 26.

Student Loan Default Becoming a Top Reason for Exclusion

student loan default

Providers are often surprised to learn that a person can be excluded from participation in federal health care programs because of student loan default. In fact, the failure to repay student loans is one of the most common reasons people find themselves on an exclusion list.1 

I.  Federal Regulations Surrounding Student Loan Default & Exclusions

The Office of the Inspector General (OIG) makes it clear that if a provider fails to repay a Health Education Assistance Loan (HEAL), he or she can be excluded. The federal government, however, has not issued any new HEALs since 1998.2 Coincidentally, most providers who received Health Education and Assistance Loans between 1978 and 1998 are still practicing today. As of April 20, 2014, 846 HEAL borrowers were in default. Therefore, they were all excluded from the Federal health care programs. Together, these 846 borrowers owed over $1.4 million to the federal government. Indeed, some HEAL borrowers had been in default since 1980.3

The OIG has permissive authority to exclude providers that have defaulted on student loans backed by the U.S. Department of Health and Human Services (HHS).4 The minimum exclusion period is until the default has been cured, or until the provider and the Public Health Service reach a satisfactory resolution.5 In addition, the OIG has proposed to amend their regulations to not only exclude people who default on Heath Education Assistance Loans, but also people who default on loan repayment program (LRP) obligations, such as those administered by the Indian Health Service Corps and the National Institute of Health.6 If the proposed rule passes, providers could be excluded for default on both HEALs and LRP obligations.7

II.  State Regulations Surrounding Student Loan Default & Exclusions

The topic of exclusion for failure to repay student loans at the state level is a much less talked about subject. A number of states have passed legislation that allows professional licensing institutions to revoke or suspend the licenses of individuals who have failed to repay their state-backed student loans.8 While these regulations vary from state to state, they generally give state licensing boards the power to revoke or deny renewal of professional or occupational licenses upon receipt of information from an education loan administrator that the individual has defaulted on the loan or has somehow failed to fulfill the loan obligations.

Once a state licensing authority revokes or suspends a provider’s license, the OIG has permissive authority to exclude him or her.9 The state itself also has the authority to list the suspended provider on its excluded providers list. The state exclusion information is then reported to the OIG, which lists the state exclusions on the LEIE

III. Play It Safe: Screen All Employees, Contractors, and Vendors for Exclusions Monthly!

The number of individuals excluded for student loan default has increased and is expected to continue to rise. In fact, 86 percent of medical school graduates are entering practice with education debt.10 The rising number of people who have defaulted on state and federal student loans demonstrates that providers face an increased risk of employing or contracting with an excluded person. Be sure to screen all employees, contractors, and vendors on a monthly basis to avoid potential overpayments and Civil Monetary Penalty (CMP) liability.

Considering the high risks associated with something as common as student loans, providers would be wise to check Federal and State Exclusion Lists monthly. Let the experts at Exclusion ScreeningSM help ensure your organization does not employ an excluded individual or entity. Feel free to call us for a free consultation at 1-800-294-0952 or fill out our online service form.

Ashley Hudson

Ashley Hudson, Associate Attorney at Liles Parker, LLP and former Chief Operating Officer for Exclusion Screening, LLC, is the author of this article.


1 Joe Carlson, Exclusion Efforts – OIG Pushes for monthly blacklist cross-check, Modern Healthcare (May 18, 2013, 12:01 AM), available at http://www.modernhealthcare.com/article/20130518/MAGAZINE/305189975/exclusion-efforts?AllowView=VW8xUmo5Q21TcWJOb1gzb0tNN3RLZ0h0MWg5SVgra3NZRzROR3l0WWRMWGJVZndKRWxYOU9qTENvK25lK0g4UktiMnBlMDVva2d3YytteWJHZUU0akNYWm85ZStYYzJoUkE9PQ==.

2 Dep’t of Health & Human Servs., Office of Inspector Gen., Health Education Assistance Loan Defaulters with Income in Fiscal Year 2008 (Feb. 2010), available at http://oig.hhs.gov/oei/reports/oei-03-09-00100.pdf

3 Dep’t of Health & Human Servs. Health Resources and Servs. Admin, HEAL Defaulted Borrowers, available at http://bhpr.hrsa.gov/scholarshipsloans/heal/defaulters/  (last accessed June 16, 2014).

4 See 42 U.S.C. § 1320a-7(b)(14) (2012); see also 42 C.F.R. § 1001.1501 (2002).

5 Dep’t of Health & Human Servs. Office of the Inspector Gen., Exclusion Authorities, https://oig.hhs.gov/exclusions/authorities.asp (last accessed June 16, 2014).

79 Fed. Reg. 26810, 26816, 26824 (May 9, 2014). 

To see a list of all federally-backed loans and scholarships that Health and Human Services’ Health Resources and Services Administration offers, visit: http://www.hrsa.gov/loanscholarships/index.html.

See, e.g., Tex. Oc. Code Ann. § 56.003 (stating that upon learning of a student loan default, a licensing authority may (1) deny the person’s application for a license or license renewal or (2) suspend the person’s license); see also Texas State Board of Podiatric Medical Examiners, Student Loan Default Notice, available at http://www.foot.state.tx.us/licensing.studentloan.htm (laying out the Texas authority to suspend the license) and Texas Medical Board Press Release, TMB disciplines 45 Physicians at June Meeting, Adopts Rule Change (July 11, 2014), available at https://www.tmb.state.tx.us/dl/A6347525-B509-954C-395B-3ADE4877C557 (disciplining a Texas physician for defaulting on a state guaranteed student loan).

9 42 U.S.C. § 1320a-7(b)(4) (2012). 

10 Sy Mukherjee, The Government Bans Doctors Who Can’t Repay their Student Loans from Treating Medicare Patients, ThinkProgress.Org (May 20, 2013 4:10 P.M.), available at http://thinkprogress.org/health/2013/05/20/2037561/government-doctors-default-student-loans/.

The Administrative Process of Imposing an OIG Exclusion

Imposing OIG Exclusions

I.  Mandatory OIG Exclusions

When the Office of Inspector General (OIG) considers imposing a mandatory exclusion, it sends the individual or entity a Notice of Intent to Exclude.[1] The Notice includes the reason for the proposed exclusion and the possible effect of an exclusion. It also gives the individual or entity 30 days to respond in writing with information and evidence that he or she wants the OIG to consider in making its final decision.

The OIG will almost always decide to impose a mandatory exclusion. The individual or entity is then sent a Notice of Exclusion that includes his or her appeal rights. The exclusion goes into effect 20 days after the Notice of Exclusion is mailed and notice to the public is provided on the OIG website.   

The OIG’s decision to exclude can be appealed to an U.S. Department of Health and Human Services (HHS) Administrative Law Judge (ALJ). Adverse decisions by an ALJ can then be appealed to the HHS Departmental Appeals Board (DAB). Individuals may also seek judicial review of any final decision by the DAB.

II.  Imposing an OIG Exclusion

There are actually four different administrative processes for permissive exclusions and all of them differ from the process detailed above. As described below, the process utilized for permissive exclusions is dependent on the reason for the exclusion.

OIG may consider imposing a permissive exclusion for submitting claims for excessive charges, unnecessary services, services which fail to meet professionally recognized standards of health care, or the failure of an HMO to furnish medically necessary services.[2] The person or entity to be excluded has a right to request an opportunity to present oral argument to an OIG official before a decision may be reached. The request must be made after the individual or entity receives the Notice of Intent to Exclude, and as an addition to the right to submit evidence in writing.

OIG is not required to send the individual or entity a Notice of Intent to Exclude if it considers imposing a permissive exclusion for the failure to grant immediate access,[3] or for the failure to take corrective action.[4] Instead, OIG will send a Notice of Exclusion that includes information about the right to appeal. The exclusion becomes effective 20 days after the Notice of Exclusion is mailed and notice is provided to the public on OIG’s website. Importantly, the same appeals process that applies to mandatory OIG exclusions also applies to permissive exclusions. 

III. Conclusion

Finally, if OIG is considering excluding a person or entity for fraud, kickbacks or other prohibited activity,[5] OIG will again initiate the process by sending a Notice of Proposal to Exclude. This notice will include information about the basis for the proposed exclusion, the length of the exclusion period, the factors OIG considered when setting the exclusion period, the effect of the exclusion, appeal rights, and reinstatement information. In this situation, the exclusion goes into effect 60 days after the individual or entity receives the Notice of Proposal to Exclude, unless the individual or entity enters a timely request for a hearing. If there is a request for a hearing, the exclusion will not be effective until an ALJ upholds OIG’s decision to exclude. Adverse decisions by an ALJ may be appealed to the DAB and judicial review is available after the DAB enters a final decision.

Click to read more on OIG Exclusion

Imposing OIG Exclusions 

Ashley Hudson, Associate Attorney at Liles Parker, LLP and former Chief Operating Officer for Exclusion Screening, LLC, is the author of this article. Feel free to contact us at 1-800-294-0952 or online for a free consultation.


[1] Dep’t of Health and Human Servs. Office of the Inspector Gen., Exclusions FAQ, https://oig.hhs.gov/faqs/exclusions-faq.asp (last accessed November 26, 2014).
[2] Section 1128(b)(6) of the Social Security Act.
[3] § 1128(b)(12).
[4] § 1128(b)(13).
[5] § 1128(b)(7).

What is an OIG Exclusion?

OIG Exclusion

By Paul Weidenfeld

I.  What is an OIG Exclusion?

An OIG Exclusion is a final administrative action by the Office of the Inspector General (OIG)  that  prohibits participation in any Federal Health Care Program.  Exclusions are imposed because the individual or entity is found to pose unacceptable risks to patient safety and/or program fraud.  As a result, Federal health care programs such as  MedicareMedicaid and TRICARE will not pay for any service provided — either directly or indirectly — by an excluded person or entity. 

II.  Who Has the Authority to Impose an OIG Exclusion?

The Department of Health and Human Services (HHS) has the overall responsibility of administering the Medicare and Medicaid Programs. HHS decides who may receive benefits under these programs and who will be allowed to provide them.  

The authority to exclude individuals and entities from federal health care programs is delegated to OIG.[1] OIG enforces the exclusion penalty through its authority to impose civil money penalties (CMPs) where claims are submitted for services performed or furnished by an excluded person or entity and the person making the claim “knew or should have known” of the exclusion. 

III. OIG Exclusion Types

There are two types of OIG exclusions, mandatory and permissive, and both have the effect of barring an individual or entity from participating in all Federal health care programs from the time they are excluded until such time, if ever, that their privilege is reinstated.[2]  Mandatory exclusions last a minimum of 5 years and must be imposed if a person or entity is convicted of certain criminal offenses.  These include:

  • Conviction for Medicare or Medicaid fraud, or any other offense related to the fraudulent delivery of items or services to Federal or State health care programs;
  • Patient abuse or neglect;
  • Felony convictions for other health care related fraud, theft, or other financial misconduct; and
  • Felony convictions relating to unlawful manufacture, distribution, prescription, or dispensing of controlled substances.

The discretionary authority to exclude individuals and entities implicates a much wider range of conduct. We discuss this topic in a later article, but examples for which permissive exclusions may be imposed include:

  • Misdemeanor convictions related to defrauding a heath care fraud program,
  • Misdemeanor convictions relating to the unlawful manufacture, distribution, prescription, or dispensing of controlled substances,
  • Suspension, revocation, or surrender of a license to provide health care for reasons bearing on professional competence, performance, or financial integrity,
  • Provision of unnecessary or substandard services;
  • Submission of false or fraudulent claims to a Federal health care program,
  • Engaging in unlawful kickback arrangements,
  • Defaulting on health education loan or scholarship obligation, and
  • Controlling a sanctioned entity as an owner, officer, or managing employee.

IV.  Consequences of OIG Exclusion

Federal health care programs, principally Medicare and Medicaid, will not pay for any item or service that is furnished or performed by, or on the prescription or direction of, an excluded individual.[3] Since federal health programs subsidize virtually all hospitals and account for 60-65% of all health care dollars spent, exclusion is a severe restriction and is often a death knell to providers.

Providers of the federal health care programs must ensure that their employees, contractors, and vendors are not excluded and the failure to do so can result in significant penalties.  The OIG has the authority to impose penalties of up to$21,562.80 for each item or service furnished by the excluded person or entity, as well as assessments of up to three times the amount claimed.[4]  In addition, providers may be liable for overpayments.  

Even when a provider is unaware that a person was excluded at the time the claim was made, OIG has issued guidance advising that such inadvertent violations must be reported and repaid.[5] In light of this guidance, any claim that might involve an excluded person or entity could potentially have False Claims Act implications under the Affordable Care Act if it is not dealt with in a timely and proper manner.

v. Conclusion

This article is just intended to be an introductory outline of the basics to the subject matter. Our other posts have additional information, but if you have any questions about exclusions and your screening obligations, feel free to contact any of us at Exclusion Screening, LLCSM

Read more on OIG Exclusion

OIG ExclusionPaul Weidenfeld, Co-Founder and CEO of Exclusion Screening, LLC, is the author of this article. He is a longtime health care lawyer whose practice has focused on False Claims Act cases and health care fraud matters generally. Contact Paul should you have any questions at: pweidenfeld@exclusionscreening.com or 1-800-294-0952.




[1]
Sections 1128 and 1156 of the Social Security Act.

[2] Mandatory exclusions are found at 42 USC § 1320a-7; permissive exclusions are principally found at 42 USC § 1320a-7(b).

[3] Section 1862(e)(1) of the Social Security Act and 42 CFR § 1001.1901(b)(1).

[4] 42 CFR §1003.102 (a)(2).

[5] It was issued April 17, 2013 and it is also the subject of an article posted on our site.