The Office of Inspector General (OIG) plays a critical role in safeguarding federal healthcare programs. A key part of this responsibility is the authority to exclude individuals and entities from participation in these programs. This exclusion means that Medicare, Medicaid, and other federal healthcare programs will not pay for services or items provided, ordered, or prescribed by excluded parties. The OIG maintains a List of Excluded Individuals/Entities (LEIE), and employing someone on this list can lead to significant civil monetary penalties (CMPs). But what makes you ineligible for federal health care programs in the first place?
Exclusions are implemented for various reasons, broadly categorized into mandatory and permissive exclusions.
Mandatory Exclusions: Crimes That Automatically Disqualify
The OIG is legally obligated to impose mandatory exclusions for certain criminal convictions. These offenses are considered so severe that they automatically trigger exclusion from all federal health care programs. These mandatory exclusion offenses include:
- Medicare or Medicaid Fraud: Convictions related to defrauding these vital government healthcare programs will result in mandatory exclusion. This covers a range of fraudulent activities aimed at improperly obtaining funds from Medicare or Medicaid.
- Healthcare-Related Offenses: This extends to any offenses connected to the delivery of healthcare items or services under Medicare, Medicaid, SCHIP (State Children’s Health Insurance Program), or other state healthcare programs. Essentially, any criminal activity tied to the provision of care within these programs can lead to exclusion.
- Patient Abuse or Neglect: The safety and well-being of patients are paramount. Convictions for patient abuse or neglect are grounds for mandatory exclusion, reflecting the government’s commitment to protecting vulnerable individuals receiving care through federal programs.
- Felony Convictions for Healthcare Fraud, Theft, or Financial Misconduct: Felony convictions related to fraud, theft, or other financial misconduct within the healthcare sector, even beyond Medicare and Medicaid, can lead to mandatory exclusion. This demonstrates a broad effort to prevent financial malfeasance in healthcare.
- Felony Convictions for Controlled Substances Offenses: Felony convictions relating to the unlawful manufacture, distribution, prescription, or dispensing of controlled substances are also mandatory exclusion triggers. This addresses the serious issue of drug diversion and misuse within healthcare.
Permissive Exclusions: Discretionary Grounds for Ineligibility
In addition to mandatory exclusions, the OIG has the discretion to impose permissive exclusions based on a wider range of factors. These are situations where, while not automatically mandated by law, the OIG can choose to exclude individuals or entities based on their conduct. Permissive exclusion reasons include, but are not limited to:
- Misdemeanor Healthcare Fraud: While felony healthcare fraud leads to mandatory exclusion, misdemeanor convictions related to healthcare fraud (excluding Medicare or state programs specifically) can result in permissive exclusion.
- Fraud in Other Government Programs: Fraudulent activities in any program funded by federal, state, or local government agencies (not just healthcare programs) can be grounds for permissive exclusion, highlighting a broader concern for integrity in government-funded programs.
- Misdemeanor Controlled Substances Offenses: Similar to felony offenses, misdemeanor convictions related to unlawful activities involving controlled substances can also lead to permissive exclusion.
- License Suspension or Revocation: If a healthcare provider’s license to practice is suspended, revoked, or surrendered due to concerns about professional competence, performance, or financial integrity, this can be a basis for permissive exclusion.
- Substandard Care: Providing unnecessary or substandard healthcare services can lead to permissive exclusion, ensuring that federal programs are associated with quality care.
- False Claims: Submitting false or fraudulent claims to a federal healthcare program is a serious offense and can result in permissive exclusion.
- Kickback Arrangements: Engaging in unlawful kickback arrangements, which can corrupt healthcare decision-making, is another reason for permissive exclusion.
- Defaulting on Health Education Loans: Defaulting on health education loan or scholarship obligations to the government can also lead to exclusion.
- Controlling a Sanctioned Entity: If an individual is an owner, officer, or managing employee of an entity that has been sanctioned or excluded, they themselves may be subject to permissive exclusion.
Consequences of Being Excluded
The impact of exclusion is significant. As detailed in the OIG’s Updated Special Advisory Bulletin, the primary consequence is that federal healthcare programs, including Medicare and Medicaid, will not provide payment for any items or services furnished, ordered, or prescribed by an excluded individual or entity. This prohibition extends across all federal plans and programs providing health benefits funded by the U.S. government, with a limited exception for the Federal Employees Health Benefits Plan.
The Exclusion Process and Your Rights
It’s important to understand that receiving a Notice of Intent to Exclude (NOI) from the OIG is not a final exclusion. It is a notification that the OIG is considering exclusion. Individuals or entities receiving an NOI have the opportunity to present information and evidence for the OIG to consider in their decision-making process. If an exclusion is ultimately implemented, there are avenues for appeal. Exclusions can be appealed to an HHS Administrative Law Judge (ALJ), and unfavorable ALJ decisions can be further appealed to the HHS Departmental Appeals Board (DAB). Ultimately, judicial review in federal court is available after a final decision by the DAB.
To ensure compliance and avoid potential CMP liability, healthcare entities should routinely check the OIG’s LEIE when hiring new employees and for current staff. Understanding what makes you ineligible for federal health care programs and proactively verifying the exclusion status of individuals is crucial for maintaining integrity and compliance within the healthcare system.
