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What Are the Types of OIG Exclusions?

April 10, 2020

One of the most effective tools the federal government has to prevent money from being paid on claims from fraud and kickback schemes is to withhold payments from providers and entities that have committed health care fraud or other serious crimes. Public money should be safeguarded and go toward providing essential, legitimate services and procedures for patients and health care organizations. One targeted way of doing this is screening for OIG exclusions.

Understanding the OIG Exclusion Process

The Department of Health and Human Services (HHS) Office of the Inspector General (OIG) can exclude individuals and entities from receiving federal funds through the authority of the Social Security Act as well as through Medicare and state Medicaid programs.

The OIG maintains a list of all currently excluded individuals and entities called the List of Excluded Individuals/Entities (LEIE). Anyone who hires an individual or entity on the LEIE may be subject to civil monetary penalties.

When the OIG identifies an individual or entity who may be eligible for exclusions, they provide a written notice. This allows the individual 30 days to submit evidence and a written appeal concerning the exclusion before it goes into effect.

For individuals who believe they’ve been wrongfully identified, this is the opportunity to plead their case, gather the evidence, and be heard by the OIG. According to the OIG’s website: “All exclusions implemented by OIG may be appealed to an HHS Administrative Law Judge (ALJ), and any adverse decision may be appealed to the HHS Departmental Appeals Board (DAB). Judicial review in Federal court is also available after a final decision by the DAB.”

The LEIE contains two different types of exclusions: 1) mandatory exclusions and 2) permissive exclusions. These categories distinguish the acts that determine the exclusion action.

Mandatory Exclusions

Mandatory exclusions are imposed for the following reasons:

  • Medicare or Medicaid fraud, as well as any other offenses related to the delivery of items or services under Medicare, Medicaid, CHIP, or other State health care programs
  • Patient abuse or neglect
  • Felony convictions for other health care related fraud, theft, or other financial misconduct
  • Felony convictions relating to unlawful manufacture, distribution, prescription, or dispensing of controlled substances

Permissive Exclusions

Here are a few of the reasons permissive exclusions are imposed, though this is not an exhaustive list:

  • Misdemeanor convictions related to health care fraud other than Medicare or a State health program
  • Fraud in a program (other than a health care program) funded by any Federal, State, or local government agency
  • Misdemeanor convictions relating to the unlawful manufacture, distribution, prescription, or dispensing of controlled substances
  • Suspension, revocation, or surrender of a license for failure to provide health care for reasons bearing on professional competence, professional 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 obligations
  • Entities controlled by a sanctioned individual such as an owner

Implications of OIG Exclusions for Health Care Organizations

First and foremost, exclusions stop payments from federal health care programs to ineligible providers. This can be a substantial amount of money since the federal government accounts for over 28% of all health care spending in the United States. For health care organizations, OIG exclusions are a critical part of screening new providers, contractors and vendors, as well as continued compliance with receiving payments from the federal government.

According to the OIG, the effects of a program exclusion include:

  • No payment may be made by any federal health care program for any items or services furnished, ordered, or prescribed by an excluded individual or entity
  • The prohibition applies to the excluded person, anyone who employs or contracts with the excluded person, and any hospital or other provider or supplier where the excluded person provides services
  • The exclusion applies regardless of who submits the claims and also applies to all administrative and management services furnished by the excluded person

The effects of exclusion are far reaching and strictly prohibit many types of payments to providers. And the penalties for receiving payments are stiff: “An excluded individual or entity that submits a claim for reimbursement to a federal health care program, or causes such a claim to be submitted, may be subject to a CMP (civil monetary penalty) of $10,000 for each item or service furnished during the period that the person or entity was excluded.” Health care organizations that employ or contract with excluded individuals or entities may be subject to these penalties as well.

It is incumbent upon health care organizations to know who they employ and contract with and ensure that these individuals do not appear on any exclusion lists. Verisys works with our clients to not only conduct the minimum exclusion screening requirements for federal compliance but to exceed them.

Verisys products screen, verify, and monitor individuals and entities using primary-source data and a platform that can verify individuals matched to records with 99.9% accuracy so your organization can protect patients and your institutional integrity.

Juliette WillardWritten by Juliette Willard
Healthcare Communications Specialist
Being creative is my passion! Writer. Painter. Problem Solver. Optimist.
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