The Office of Inspector General (OIG) for Health and Human Services has the authority to exclude individuals and entities from Federally funded health care programs. This authority, granted under section 1128 of the Social Security Act, aims to protect programs like Medicare and Medicaid from fraud and abuse. The OIG maintains the List of Excluded Individuals/Entities (LEIE), a publicly available database that health care entities must consult to avoid penalties. Hiring or contracting with anyone on the LEIE can result in significant civil monetary penalties (CMPs).
Exclusions from federal health care programs fall into two main categories: mandatory and permissive. Understanding these categories is crucial for health care providers and entities to ensure compliance and avoid sanctions.
Mandatory Exclusions: Crimes That Automatically Disqualify
Certain criminal convictions mandate exclusion from all Federal health care programs. The OIG is legally obligated to exclude individuals and entities convicted of the following offenses:
- Medicare or Medicaid Fraud: Convictions related to defrauding these essential government health programs automatically trigger exclusion. This includes any actions intended to illegally obtain funds or benefits from Medicare or Medicaid.
- Offenses Related to Program Services: Any criminal offense connected to the delivery of items or services under Medicare, Medicaid, SCHIP (State Children’s Health Insurance Program), or other State health care programs will result in mandatory exclusion.
- Patient Abuse or Neglect: Conviction of patient abuse or neglect is a serious offense that mandates exclusion. This ensures patient safety and maintains the integrity of health care services.
- Felony Healthcare-Related Fraud: Felony convictions for fraud, theft, or other financial misconduct related to health care, even beyond Medicare and Medicaid, lead to mandatory exclusion. This broad category covers a range of financial crimes within the health sector.
- Felony Controlled Substance Offenses: Felony convictions related to the unlawful manufacture, distribution, prescription, or dispensing of controlled substances are grounds for mandatory exclusion. This addresses the opioid crisis and illegal drug activities within health care.
Permissive Exclusions: Discretionary Grounds for Exclusion
In addition to mandatory exclusions, the OIG has the discretion to exclude individuals and entities for a broader range of reasons. These permissive exclusions allow the OIG to address a wider spectrum of misconduct and protect federal health care programs from potential risks. Permissive exclusion grounds include, but are not limited to:
- Misdemeanor Healthcare Fraud: Misdemeanor convictions related to health care fraud (excluding Medicare or State health programs) can lead to permissive exclusion. This expands the scope beyond major felonies to include less severe fraudulent activities.
- Fraud in Other Government Programs: Fraud in any program funded by Federal, State, or local government agencies (not just health care programs) can result in exclusion. This demonstrates a broader commitment to preventing fraud across government sectors.
- Misdemeanor Controlled Substance Offenses: Misdemeanor convictions related to the unlawful manufacture, distribution, prescription, or dispensing of controlled substances are also grounds for permissive exclusion, addressing a wider range of drug-related offenses.
- License Revocation or Suspension: Suspension, revocation, or surrender of a health care license for reasons related to professional competence, performance, or financial integrity can lead to exclusion. This ensures that individuals with compromised professional standing are excluded from federal programs.
- Substandard Services: Providing unnecessary or substandard health care services is a basis for permissive exclusion, safeguarding the quality of care provided under federal programs.
- False Claims: Submitting false or fraudulent claims to a Federal health care program is a direct violation that can result in exclusion, protecting program funds from improper payments.
- Kickback Arrangements: Engaging in unlawful kickback arrangements, which can corrupt medical decision-making, is also grounds for exclusion.
- Default on Health Education Loans: Defaulting on health education loan or scholarship obligations to the government can lead to exclusion, ensuring accountability for educational investments.
- Controlling a Sanctioned Entity: Controlling an entity that has been sanctioned (as an owner, officer, or managing employee) can result in individual exclusion, preventing individuals from circumventing sanctions through different entities.
Consequences of Exclusion: No Federal Payment
The primary consequence of exclusion is straightforward: no federal health care program payment will be made for any items or services furnished, ordered, or prescribed by an excluded individual or entity. This prohibition extends across Medicare, Medicaid, and all other federal plans and programs that provide health benefits funded directly or indirectly by the U.S. government (with a limited exception for the Federal Employees Health Benefits Plan).
Health care entities must proactively verify that individuals and entities they employ or contract with are not on the LEIE to avoid CMP liability. Regular checks of the LEIE are a necessary component of compliance.
The Exclusion Process and Appeals
It is important to note that receiving a Notice of Intent to Exclude (NOI) does not automatically mean exclusion. The OIG carefully reviews all evidence and information provided by the individual or entity receiving the NOI before making a final decision.
Individuals and entities facing exclusion have the right to appeal. All OIG exclusions can be appealed to an HHS Administrative Law Judge (ALJ). If dissatisfied with the ALJ’s decision, further appeal can be made to the HHS Departmental Appeals Board (DAB). Ultimately, judicial review in Federal court is available after a final decision by the DAB, providing multiple layers of appeal and due process.
By understanding what actions can lead to exclusion and diligently checking the LEIE, health care providers and entities can maintain compliance and ensure continued participation in federal health care programs.
