OIG Issues Updated Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs

On May 8, 2013, the Office of Inspector General (OIG) issued an updated Special Advisory Bulletin (Updated Bulletin) on the effects of exclusion from participation in Federal health care programs. The Updated Bulletin replaces the original bulletin on the topic issued in September 1999. The Updated Bulletin describes the scope and effect of the legal prohibition on submitting a claim or receiving a payment from a Federal health care program for items or services furnished: a) by an excluded person; or b) at the medical direction or prescription of an excluded person. An excluded person is a person whom the OIG has excluded from participation in Medicare, Medicaid, and other Federal health care programs after finding that the person has engaged in fraud, abuse, or other misconduct relating to Federal health care programs.
Legal Prohibition:

If a health care provider arranges or contracts (by employment or otherwise) with a person that the provider knows or should know is excluded by the OIG, the provider may be subject to Civil Monetary Penalty (CMP) liability if the excluded person provides services payable, whether directly or indirectly, by a Federal health care program.


The OIG may impose CMPs of up to $10,000 for each item or service furnished by the excluded person for which Federal payment is sought, as well as an assessment of up to three times the amount claimed. The OIG may also exclude the provider from participation in Federal health care programs.

Scope of Prohibition:

The prohibition is broad. A provider can be subject to CMP liability if an excluded person participates in any way in the furnishing of items and services that are payable by a Federal health care program. This includes the provision of direct patient care, indirect patient care, and administrative and management services. It also includes items or services furnished at the medical direction or on the prescription of an excluded person. For example, nursing homes, ICFs/IID, pharmacies, laboratories, imaging centers, and durable medical equipment suppliers who furnish items or services to a Federal program beneficiary on the basis of an order or prescription written by a physician can face CMP liability if the ordering or prescribing physician is excluded.
The most effective way to avoid CMP liability is to avoid employing or contracting with any excluded person or entity.

Affirmative Duty to Check if Person is Excluded:

The OIG asserts an affirmative duty on the provider to check the program exclusion status of individuals and entities prior to submitting claims for payment for items or services the provider has furnished. The OIG has created a database called the List of Excluded Individuals and Entities (LEIE) for providers to screen for excluded persons. Providers can search the database online or download the list in its entirety.

Frequency of Screenings:

The LEIE should be checked before a provider hires or contracts with an individual or entity and screened periodically thereafter. The OIG updates the LEIE monthly. To minimize the risk of CMP liability, the OIG recommends that providers perform monthly screenings on all current employees and contractors.

Which Individuals and Entities to Screen:

To determine who should be screened, the provider should review each job category and contractual relationship to determine whether the item or service being provided is directly or indirectly, in whole or in part, payable by a Federal health care program. If the answer is yes, all persons that perform under that contract or are in that job category should be screened, including subcontractors and employees of contractors.
The provider who submits the claim is liable for the CMPs regardless of who performs the search. Therefore, it is best for the provider to assure the screening is done by performing it themselves.

Records of Screenings:

Providers should maintain documentation of the searches they perform on employees and contractors. Providers may print or take screen shots of searches performed.
If a provider finds that they have submitted claims or collected payment from a Federal health program for items or services furnished by an excluded person the OIG directs providers to use the OIG’s Self-Disclosure Protocol to disclose the violation.


If you have any questions about the effects of exclusion from participation in the Federal health care programs, the screening process, or disclosure of a violation, please do not hesitate to contact a member of Benesch’s health care department.

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