Medicare Exclusion

One of the most powerful tools the Office of Inspector General (OIG) within the Department of Health and Human Services has in safeguarding the integrity of the Medicare Program is the ability to exclude providers and suppliers from participation. It is the proverbial hammer that, when brought down, could severely hamper a physician’s ability to practice medicine and a healthcare facility’s ability to stay operational.

While the exclusion authority has existed for more than three decades, it has recently been strengthened by the Affordable Care Act which enhanced the OIG’s power to exclude providers and suppliers for false statements, omissions, or misrepresentations in enrollment applications, agreements, bids or contracts. In the next series of articles we will explore the basis for Medicare exclusion and the wide ranging impact it has on healthcare providers and suppliers.

According to the OIG, in 2011 alone, 2,662 individuals and entities were excluded. Currently, there are approximately 48,000 individuals and entities that are excluded from participating in all federally funded healthcare programs.

Exclusion could be mandatory or permissive. In 2010, the OIG issued Guidelines for Implementing Permissive Exclusion Authority, in which the agency discusses what factors it will consider when imposing permissive exclusion under Social Security Act 1128(b)(15), which authorizes OIG to exclude an officer or managing employee of an entity that has been excluded or has been convicted of certain offenses. Similarly, in 1997, the OIG issued guidelines for implementing permissive exclusion authority under Social Security Act 1128(b)(7), which authorizes the OIG to exclude individuals and entities for fraud, kickbacks and other prohibited activities.  We will address these guidelines in separate articles.

The impact of exclusion is sweeping — no payment will be made by any Federal health care program for any items or services furnished, ordered or prescribed by an excluded individual or entity. Furthermore, States are also required to take action against a provider if it has been excluded from participating in the Medicare program.

If you have any questions about Medicare participation, exclusion, OIG or require other legal assistance, please contact us.