What Does It Mean To Be On An Exclusion List?

Being on an exclusion list means that an individual or entity has been barred from participating in a sponsored benefit program, often as a result of a final administrative action taken by Federal or State agencies. This is one of the most severe administrative remedies that can be imposed on an individual or entity.

The primary consequence of being on an exclusion list is a payment prohibition. Federal healthcare programs, including Medicare, Medicaid, and TRICARE, are prohibited from paying for any item or service furnished directly or indirectly by an excluded individual or entity. This prohibition is an absolute ban on all federal program compensation.

In the context of healthcare, exclusions serve to protect beneficiaries and safeguard the financial integrity of Federal healthcare benefit programs. An excluded party is deemed, as a matter of law, to pose an unacceptable risk to the integrity of the program and to the beneficiaries it serves.

Types and Reasons for Exclusion

Exclusions generally come in two types, mandatory and permissive, and are typically triggered by specific conduct or adverse actions.

1. Mandatory Exclusions: The Office of Inspector General (OIG) is required by law to exclude individuals and entities if they fall into one of four categories, typically related to criminal convictions:

• A conviction related to the delivery of an item or service under a Federal or State healthcare benefit program. This includes any type of conviction, whether misdemeanor or felony.
• A conviction related to the abuse or neglect of a patient in connection with the delivery of a health care item or service. Even a State misdemeanor conviction related to patient neglect or abuse can trigger a mandatory exclusion.
• A felony conviction related to healthcare fraud (other than Medicare/Medicaid).
• A felony conviction related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.

Mandatory exclusions must be imposed for a minimum of five years.

2. Permissive Exclusions: These are imposed at the discretion of the OIG based on other offenses or improper conduct. The most common basis for a permissive exclusion is a licensing disciplinary matter, such as a license revocation or suspension. Other reasons include:

• Obstruction of a healthcare investigation.
• Certain billing practices.
• Failure to repay a federal grant or a federal student loan.

Permissive exclusions typically have a minimum exclusion period of three years.

Impact and Consequences of Exclusion

The impact of an exclusion action is broad and severe:

• Payment Prohibition Scope: The payment prohibition applies to virtually all services connected to the practice, including administrative, management, support, nursing, claims processing, and IT services. Even the work of an unpaid volunteer who is an excluded party can trigger Civil Monetary Penalty (CMP) liability if their services are not “wholly unrelated to Federal Health Care Programs”.
• Financial Liabilities: Any reimbursements received for items or services furnished directly or indirectly by an excluded party are considered overpayments that must be repaid. Furthermore, a provider risks Civil Monetary Penalties (CMPs), which can be up to $24,164 per violation (as of 2023) for employing or contracting with an excluded individual or entity, or for presenting a claim for a service provided by an excluded party. The OIG may also impose assessments of up to three times the amount claimed.
• False Claims Act (FCA) Liability: Failure to return overpayments can lead to FCA liability. The government views claims as legally false if an excluded person provided any part of that claim.
• Revocation and Sanctions: Employing an excluded individual can be the basis for a provider’s revocation of enrollment from the Medicare program, which could bar participation for as long as ten years. Exclusion from one State Medicaid program generally means an individual is terminated from all State Medicaid programs under ACA Section 6501.
• Criminal Liability: In cases where a provider knowingly employed an excluded party and actively took steps to hide it (e.g., billing services under someone else’s name), the government may pursue criminal actions.

Exclusion Lists and Databases

Several lists are relevant to exclusion screening obligations, particularly for healthcare providers who accept Medicare and Medicaid:

1. OIG List of Excluded Individuals and Entities (LEIE): This is the primary source of federal exclusion information maintained by the Department of Health and Human Services (HHS), Office of Inspector General (OIG). Providers are generally required to screen against this list monthly.
2. State Exclusion Lists: Most states (37 out of 50 states at one time, 42 states at another count) maintain their own exclusion lists for their State Medicaid programs. Screening these lists is an independent obligation. State lists are important because individuals may appear on a State list long before the information filters up to the OIG LEIE (which can take six to twelve months or longer).
3. General Services Administration’s System for Award Management (GSA SAM): This is essentially a central registry of individuals and entities that have been excluded, suspended, or debarred from doing business with various federal agencies. Many federal and state programs now require providers to screen against the GSA SAM in addition to the LEIE. The GSA SAM typically lists more people (around 148,000 parties as of late 2023) than the LEIE (around 75,000-80,000 names).

To minimize risk and ensure compliance, healthcare providers are advised to screen their employees, vendors, and contractors against the OIG LEIE, GSA SAM, and all available state exclusion lists upon hire and monthly thereafter.