Path To Medicare and Medicaid Exclusion May Start With Student Loan Default

These days it seems like all aspects of a healthcare provider’s practice are under close scrutiny — including one’s repayment of student loans.  Defaulting on a student loan may result in exclusion from the Medicare and Medicaid programs.  The Office of Inspector General (OIG), a department within the U.S. Department of Health and Human Services (HHS), has the authority to exclude individuals and entities from Federally-funded health care programs pursuant to sections 1128 and 1156 of the Social Security Act and maintains a list of all currently excluded individuals and entities. While exclusion based on failure to repay student loans is permissive and not mandatory, given the current strict enforcement environment, this distinction should give the provider no sense of comfort.

The primary effect of exclusion is that no payment will be provided for any items or services furnished, ordered or prescribed by an excluded individual or entity.  This includes Medicare, Medicaid and all other federal plans and programs that provide health benefits funded directly or indirectly by the United States (other than the Federal Employees Health Benefits Plan). Furthermore, anyone who hires an individual or entity on the excluded list may be subject to civil monetary penalties.

The OIG was established in the U.S. Department of Health and Human Services to identify and eliminate fraud, waste, and abuse in the Department’s programs and to promote efficiency and economy in Departmental operations. Recent statutory enactments have strengthened and expanded the OIG’s authority to exclude individuals and entities from the Federal health care programs, which includes going after healthcare providers who have defaulted on their student loan obligations.