Federal Health Care Program Exclusion is a critical aspect of healthcare compliance that every provider and entity involved in the industry must understand. The Office of Inspector General (OIG) for the Department of Health and Human Services (HHS) has the authority to exclude individuals and entities from participating in federally funded health care programs. This authority, granted under Section 1128 of the Social Security Act, aims to protect these programs and their beneficiaries from fraud and abuse. The OIG maintains a List of Excluded Individuals/Entities (LEIE), and employing or contracting with anyone on this list can lead to significant civil monetary penalties (CMPs).
Mandatory vs. Permissive Exclusions: Understanding the Difference
Exclusions fall into two main categories: mandatory and permissive. Mandatory exclusions are legally required by the OIG for individuals or entities convicted of specific criminal offenses. These offenses include:
- Medicare or Medicaid fraud, and fraud related to other state or federal health care programs like SCHIP.
- Patient abuse or neglect.
- Felony convictions for healthcare-related fraud, theft, or financial misconduct.
- Felony convictions related to the unlawful manufacture, distribution, prescription, or dispensing of controlled substances.
In these cases, the OIG has no discretion; exclusion is mandatory.
Permissive exclusions, on the other hand, are at the OIG’s discretion and can be imposed based on a broader range of infractions. These grounds include, but are not limited to:
- Misdemeanor convictions related to health care fraud (excluding Medicare or state programs).
- Fraud in non-healthcare federal, state, or local government programs.
- Misdemeanor convictions related to controlled substances unlawful activities.
- License suspension, revocation, or surrender due to concerns about professional competence, performance, or financial integrity.
- Providing unnecessary or substandard health care services.
- Submitting false or fraudulent claims to federal health care programs.
- Engaging in illegal kickback arrangements.
- Defaulting on health education loan or scholarship obligations.
- Controlling a sanctioned entity as an owner, officer, or managing employee.
The Importance of Checking the LEIE to Avoid Penalties
To mitigate the risk of CMPs, health care organizations must proactively check the LEIE. This should be a routine part of the hiring process for new employees and a regular check for current employees and contractors. Failing to screen against the LEIE can result in penalties if an excluded individual or entity is employed and bills federal health care programs.
Effects of Exclusion: What it Means for Excluded Parties
The primary consequence of federal health care program exclusion is that no federal health care program payments will be made for services, items, or prescriptions furnished, ordered, or prescribed by an excluded individual or entity. This prohibition extends across all federal plans and programs providing health benefits, including Medicare, Medicaid, and others, with the exception of the Federal Employees Health Benefits Plan. The Updated Special Advisory Bulletin on the Effect of Exclusion From Participation in Federal Health Programs provides further details on the effects of exclusion.
Appealing an Exclusion Decision
It’s important to note that receiving a Notice of Intent to Exclude (NOI) does not automatically mean exclusion will occur. The OIG carefully reviews all information provided by the individual or entity receiving the NOI before making a final decision. If an exclusion is implemented, there is an appeals process. Excluded parties can appeal to an HHS Administrative Law Judge (ALJ), and if unsatisfied with that decision, further appeal to the HHS Departmental Appeals Board (DAB) is possible. Finally, judicial review in federal court is available after a DAB final decision.
In conclusion, understanding federal health care program exclusion and diligently checking the LEIE are vital for compliance and avoiding significant penalties within the healthcare industry. Proactive measures are essential to ensure ethical and legal operations within federally funded health care programs.
