Mastering the OIG Exclusion List

Group of pawns excluding another pawn to symbolize the OIG Exclusion List

In this Article …


One of the most important lists for Compliance Officers to be aware of is the OIG Exclusion List, a list of individuals or entities who are excluded from providing services to persons covered by Federal healthcare programs. The Office of Inspector General (OIG) of the U.S. Health and Human Services Office compiles this list continuously.

The term person here refers to any person or entity that is employed, contracted with, or otherwise retained by a healthcare provider submitting claims to Federal healthcare programs. This includes volunteers and governing body members. The term employed also includes persons who are contracted directly or indirectly with the provider, or is an entity contracted with the provider.

The OIG has published guidance on several occasions on this topic.


What is the OIG Exclusion list?

Congress first mandated the exclusion of physicians and other practitioners convicted of Federal healthcare program-related crimes in 1977. In 1981, Congress enacted the Civil Monetary Penalties (CMP) Law. Under this law, the OIG can impose CMPs and other assessments. It can also exclude persons or entities from participating in Federal healthcare programs. Federal healthcare programs include Medicare, Medicaid, Tricare/Champus, and Federal Employee Benefit Programs. The definition also covers specialty programs like the Black Lung program and Railroad Retirement Program.


Who is on the OIG Exclusion list?

Exclusion is mandatory for individuals or entities who have been convicted of certain serious crimes. These include felonies like felony fraud or patient abuse.  Mandatory exclusion is for a minimum of 5 years. The OIG can also institute permissive exclusions. There are 16 categories of permissive exclusions. They range from losing a state license to practice, to certain misdemeanors to failing to provide quality care. The period of exclusion can also vary, up to and including indefinitely.

Excluded persons can petition to get off the list at the end of their exclusion period.


What does it mean if an employee is on the OIG Exclusion List?

The OIG says that “No payment may be made for any item or service furnished, ordered or prescribed by an excluded individual or entity”.  Beyond that, the regulations specify that any person or entity is prohibited from receiving payment for the services of an excluded individual or entity. This applies regardless of who submits the claim for services. Excluded persons are also not permitted to furnish certain administrative or management services, especially those related to coding, billing, or patient care.

This leaves only a few occupational categories where an excluded person can provide services in most healthcare organizations. Call your attorney whenever you find that an excluded person (or entity) has been hired or retained. You may need advice on determining the nexus of duties to the types of services that cannot be provided by an excluded person. You may also need advice on computing the civil monetary penalty you may have to pay!

The form of payment by the Federal healthcare program does not matter. Payments for individual claims, bundled payments, prospective payments like DRGs, and capitated payments. And it does not matter if a claim is based upon the services of nurses or other staff members whose services are not billed individually. An excluded RN or respiratory care practitioner cannot provide services to patients even if the hospital receives a bundled payment for the services.


Are excluded persons prohibited from providing Administrative and Management services?

The answer is most definitely yes! Senior executives and persons providing services such as health information technology support, strategic planning, and billing and accounting are all examples of administrative and management services. Excluded persons may not provide such services for an entity submitting claims to Federal healthcare programs unless the services do not contribute to the services that are billable to Federal healthcare programs.


Penalties for employing an Excluded Person

The penalties for employing excluded persons are steep! The OIG may impose civil monetary penalties (CMP) of $10,000 per claim. And it can impose an assessment of 3 times the amount on each claim. The OIG may bring civil or criminal prosecutions for violations. It may also move to exclude the entity employing the excluded person.

Beyond the CMP per claim, healthcare entities employing an excluded person also face penalties related to the services paid for by the Federal healthcare program. For instance, the claims for procedures or prescriptions ordered by an excluded physician are not payable claims. Paying back the payments for these claims is relatively straightforward – although it can be massively expensive.

And providers must watch out for orders from excluded physicians or practitioners who are not on their staff, but who write orders for patients at their facility. These services too are not payable by Federal healthcare programs.

When the excluded person participates in direct and indirect patient care, or administrative/management services, but provides services that are not individually billable, the penalty calculation is different. The provider does not pay back the compensation for services in which the excluded person participated. Instead, the penalty is payment based on the salary of the excluded person during the time the person was excluded.


When and how often should you screen your employees/volunteers/contractors for inclusion on the list?

Providers should definitely screen any person they are planning to employ prior to the start of employment. There are tens of thousands of individuals on the List of Excluded Individuals/Entities (LEIE), so duplicate personal and business names are not uncommon. New individuals and entities are being added all the time. There is no regulation specifying how frequently providers should screen their staff. In fact, there is no regulation requiring screening at all.

But with the potential penalties, the OIG recommends monthly screening. Moreover, state Medicaid authorities require monthly screening of providers caring for Medicaid beneficiaries.


What should you do if you find an excluded person on your payroll or under contract?

Well, if the person has not started, verify the person is really on the OIG Exclusion List. There is no barrier to employment for persons not employed in a direct or indirect role in patient care, or in an administrative or managerial capacity. If the person is a current employee, remove the person from any role in direct or indirect patient care, or administrative/management services that support services to Federal healthcare program patients. Verify the person is really on the OIG Exclusion List. If they are, contact your attorney!

The penalties for employing excluded persons vary widely. In 2022, there were 17 settlements with providers who employed or contracted with excluded persons. The penalties range from $38,000 to $765,000. Providers can minimize their exposure by utilizing the OIG’s Self-Disclosure Protocol.


How can you ever keep up with all the screenings?

In addition to the List of Excluded Individuals/Entities (LEIE), there are also State lists of excluded individuals, often representing exclusion from State Medicaid programs. Many states publish lists, but they are generally not searchable so you have to keep downloading copies each month.

To cope with the decentralized approach to exclusions, there are many companies offering screening services. These companies continuously update their databases with published/downloadable lists of excluded individuals. They are easy to find online.

Finally, like all activities intended to ensure compliance, you need a policy and procedure for your organization on screening for and handling excluded individuals. If your Compliance Officer does not have such a policy, ask why not!

When you need proven expertise and performance

Jim Hook, MPH

Mr. James D. Hook has over 30 years of healthcare executive management and consulting experience in medical groups, hospitals, IPA’s, MSO’s, and other healthcare organizations.