19
June
0
Comments
Sticky
A Look at CMS Preclusion vs OIG Exclusion
in Blog
CMS Preclusion
The Centers for Medicare & Medicaid Services (CMS) established the Preclusion List under its authority to administer Medicare Advantage (MA) and Part D programs. The list features healthcare providers and prescribers who are precluded from receiving payment for items or services furnished to Medicare beneficiaries enrolled in MA plans or for prescriptions covered under Part D.
CMS derives its preclusion authority from regulations at 42 C.F.R. §§ 422.222 and 423.120(c)(6).
Below are some common reasons for landing on the CMS Preclusion List:
- The provider’s Medicare enrollment was revoked
- The provider is under an active re-enrollment bar
- The provider engaged in conduct CMS deems detrimental to the best interests of the Medicare program
Consequences
Being on the Preclusion List means:
- The provider cannot be reimbursed for services under MA or prescriptions under Part D.
- MA plans and Part D sponsors must deny claims involving precluded providers.
OIG Exclusion
The U.S. Department of Health and Human Services, Office of Inspector General (OIG) maintains the List of Excluded Individuals and Entities (LEIE) under the authority of the Social Security Act §§ 1128 and 1156. Exclusions are imposed on individuals or entities found to have engaged in certain misconduct, such as fraud or patient abuse.
Types of Exclusions
- Mandatory Exclusion (such as felony healthcare fraud or patient abuse): Must last at least five years.
- Permissive Exclusion (such as license revocation, misdemeanor fraud): Discretionary term and variable in duration.
Consequences
- Excluded individuals/entities are barred from participation in all federal healthcare programs (Medicare, Medicaid, TRICARE, etc.).
- Payment prohibition is absolute, including indirect payments through employers or contractors.
- Claims submitted in violation can trigger Civil Monetary Penalties (CMPs) and potential False Claims Act (FCA) exposure.
The LEIE is publicly searchable, and providers are expected to routinely screen employees, contractors, and vendors.
Why the Distinction Matters for Legal and Compliance Strategy
For healthcare providers and other individuals and entitles conducting business in the healthcare industry, it is important to understand key differences between both mechanisms and how they limit participation in federal healthcare programs.
For CMS Preclusion:
- Preclusion is not the same as exclusion; a provider can be precluded but not excluded.
- Providers may not be aware of their status unless informed by a Medicare Advantage or Part D plan.
- Counsel should advise clients involved in revocation appeals or under investigation to consider the downstream implications for preclusion, even absent formal exclusion.
For OIG Exclusion:
- Exclusion carries broader legal implications due to its statutory mandate and potential linkage to FCA liability.
- Consider implementing robust exclusion screening protocols, such as monthly LEIE checks and documentation of compliance efforts.
- Employment of excluded individuals, knowingly or unknowingly, can result in significant penalties, even if the excluded person is not directly involved in patient care.
Practical Compliance Considerations
- Perform regular screening of employees, contractors, and vendors against the LEIE to remain aware of any changes or status updates
- Conduct due diligence to avoid employing or contracting with those who are on either list
- Ensure your operational staff understands how to handle denial notices and what to do if a provider appears on either list.
- Maintain thorough documentation
****************************************************
It should be noted that I am not your lawyer (unless you have presently retained my services through a retainer agreement). This post is not intended as legal advice, it is purely educational and informational, and no attorney-client relationship shall result after reading it. Please consult your own attorney for legal advice. If you do not have one and would like to retain my legal services, please contact me using the contact information listed above.
All information and references made to laws, rules, regulations, and advisory opinions were accurate based on the law as it existed at this time, but laws are constantly evolving. Please contact me to be sure that the law which will govern your business is current. Thank you.
Sticky
Reinstatement After A Healthcare Entity or Individual is Placed on the OIG and Florida’s Exclusion List
in Blog
What is the Exclusion List?
The Office of Inspector General’s (“OIG”) list of Excluded Individuals and Entities (“LEIE”) provides information to the healthcare industry, patients and the public regarding individuals and entities currently excluded from participation on in Medicare, Medicaid and all other Federal healthcare programs.
OIG imposes exclusions under the authority of sections 1128 and 1156 of the Social Security Act. On May 8, 2013, the OIG released a Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs, which states that no federal healthcare program payment may be made for items or services furnished by (1) an excluded person or (2) at the medical direction or on the prescription of an excluded person.
What is the Administrative Process for LEIE?
When an individual or entity gets a “Notice of Intent to Exclude” (“NOI”), it does not necessarily mean that they will be excluded. OIG will carefully consider all material provided by the person who received the NOI before making a decision. 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 Department Appeals Board (“DAB”). Judicial review in Federal court is only available after a final decision by the DAB.
If the OIG decided to proceed with exclusion, they will send the individual or entity a Notice of Exclusion along with information about the effect of the exclusion and appeal rights. Exclusions are effective 20 days are the Notice of Exclusion is mailed, and notice to the public is provided on OIG’s website.
When a permissive exclusion (discussed below) is being considered, the NOI allows the individual or entity to request an opportunity to present oral argument to an OIG official before a decision about whether to exclude is reached. This is in addition to the right to submit documentary evidence and written argument. The process and requirements vary depending on which section of the Social Security Act is violated.
How do I determine if I’ve been placed on the list?
The following are two options available to determine whether you are on the LEIE:
- The Online Searchable Database enables users to enter the name of an individual or entity and determine whether they are currently excluded. If a match is made on an individual, the database can verify with an individual’s Social Security Number that the match is unique. Employer Identification Numbers are available for verification of excluded entities.
- The Downloadable Database enables users to download the entire LEIE to a personal computer. Supplemental exclusion and reinstatement files are posted monthly to the OIG’s website, and these files can be merged with the previously downloaded data file to update the list.
The OIG recommends that you check the exclusion list on a monthly basis. Monthly checks should be documented so that an organization can demonstrate that they have acted in good faith to screen against excluded individuals or entities. Both databases are updated by the middle of each month. You can search here: https://exclusions.oig.hhs.gov/
Providers must also review Florida’s exclusion database while it is performing background searches.
Are there different types of exclusion?
There are two types of exclusions under the Social Security Act:
- Mandatory Exclusion – The OIG is required by law to exclude from participation in all federal healthcare programs individuals and entities convicted of the following criminal offenses: Medicare or Medicaid fraud, as well as any other offenses related to the delivery of items or services under Medicare, Medicaid, SCHIP, or other state healthcare programs; patient abuse or neglect; felony convictions for other healthcare related fraud, theft, or other financial misconduct; and felony convictions relating to the unlawful manufacture, distribution, prescription, or dispensing of controlled substances.
- Permissive Exclusion – The OIG has discretion to exclude individuals and entities on a number of grounds including, but not limited to, misdemeanor convictions related to healthcare fraud other than Medicare or a state health program; fraud in a program (other than a healthcare 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 to provide healthcare for reasons bearing on professional competence, professional performance, or other financial integrity; provision of unnecessary or substandard services; submission of false or fraudulent claims to a federal healthcare program; engaging in unlawful kickback arrangements; defaulting on a health education loan or scholarship obligation; and controlling a sanctioned entity as an owner, officer, or managing employee.
For all proposed mandatory exclusions lasting longer than the mandatory minimum five-year period, and most proposed permissive exclusions the administrative process is the same. OIG will send out a written NOI to any individual that they are considering excluding. The NOI included the basis for the proposed exclusion and a statement about the potential effect of an exclusion.
If you’ve already hired someone or contracted with a vendor prior to discovering that they are on the LEIE you may be required to Self-Disclose the hiring.
Reinstatement from the LEIE
Reinstatement of an excluded individual or entity is not automatic once the specified period of exclusion ends. In order to participate in Medicare, Medicaid, and all Federal healthcare programs once the term of exclusion ends, the individual or entity must apply for reinstatement and receive written notice from OIG that reinstatement has been granted.
An individual or entity with a defined period of exclusion (e.g., 5 years) may begin the process of reinstatement 90 days before the end of the period specified in the exclusion notice letter.
An individual or entity excluded under section 1128(b)(4) of the Social Security Act, whose period of exclusion is indefinite, may apply for reinstatement when they have regained the license referenced in the exclusion notice. In addition, under some conditions an individual or entity excluded under section 1128(b)(4) or the Act may apply for reinstatement if they have (1) obtained a different healthcare license in the same state; (2) any healthcare license in a different state; or (3) have been excluded for a minimum period of 3 years.
To apply for reinstatement, an excluded individual or entity must send a written request to the OIG. If the individual is eligible to apply for reinstatement, the OIG will then mail Statement and Authorization forms that must be completed. Once the information have been evaluated, a written notification of OIG’s final decision on reinstatement will be provided via mail. If reinstatement is denied, the excluded individual or entity is eligible to reapply after one year.
Individuals and entities who have been reinstated are removed from the LEIE.
Penalties for Excluded Individuals or Entities
OIG may impose civil monetary penalties of up to $10,000 for each item or service furnished by the excluded person for which federal program payment is sought. They may also be forced to pay treble damages and program exclusion.
An excluded person may be civilly liable under the False Claims Act for knowingly presenting or causing to be presented a false or fraudulent claim for payment. Violations could also lead to criminal prosecutions if an excluded person knowingly conceals or fails to disclose any action affecting the ability to receive any benefit or payment with the intent to fraudulently receive such benefit or payment. Additional criminal statutes may also apply to such violations.
The information above only scratches the surface of dealing with LEIE issues. Depending on the facts of your case the circumstances, procedures, and potential outcome can vary greatly. If you have received an NOI, discovered that one of your contractors or employees is on the LEIE, or you have been excluded from receiving Federal program dollars and desire to be reinstated you should contact us immediately. We have experienced Health Law attorneys on staff who can help you navigate the entire process.
****
It should be noted that I am not your lawyer (unless you have presently retained my services through a retainer agreement). This post is not intended as legal advice, it is purely educational and informational, and no attorney-client relationship shall result after reading it. Please consult your own attorney for legal advice. If you do not have one and would like to retain my legal services please contact me using the information listed above.
All of the information and references made to laws, regulations, and advisory opinions were accurate based on the law as it existed at this time, but laws are constantly evolving. Please contact me to be sure that the law which will govern your business is current. Thank you.