Basis for Medicare Exclusion

The Office of the Inspector General (OIG) within the Department of Health and Human Services (HHS) has broad authority to take measures such as excluding providers and suppliers from participating in the Medicare Program in order to protect the program and beneficiaries. There are a number of reasons why exclusions may be imposed and we summarize them below.

Mandatory Exclusion

key word: felony conviction

Under Social Security Law 1128(a)(1)-(4), the OIG must exclude providers and suppliers from participating in all federal healthcare programs who have been convicted of the following:

  • 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 health care programs;
  • patient abuse or neglect;
  • felony convictions for other health care-related fraud, theft, or other financial misconduct;
  • and felony convictions relating to unlawful manufacture, distribution, prescription, or dispensing of controlled substances.

Permissive Exclusion

key words: fraud related to healthcare program (State or Federal), misdemeanor conviction relating to controlled substances, suspension/revocation of professional license

Under Social Security 1128(b)(1)-(15), the OIG may, but is not required, to exclude providers and suppliers from participating in all federal healthcare programs on the following basis:

  • misdemeanor convictions related to health care fraud other than Medicare or a State health program, fraud in a non-healthcare 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 health care for reasons bearing on professional competence, professional performance, or financial integrity;
  • provision of unnecessary or substandard services;
  • submission of false or fraudulent claims to a Federal health care program;
  • engaging in unlawful kickback arrangements;
  • defaulting on health education loan or scholarship obligations;
  • controlling a sanctioned entity as an owner, officer, or managing employee.

The far reaching impact on providers will be discussed in a subsequent article.  If you are facing exclusion, seek immediate legal advice from an attorney knowledgeable in healthcare law because prompt action is often paramount.

It is important to highlight here, however, that the predominant effect is that no payment will be provided for any items or services furnished, ordered, or prescribed by an excluded individual or entity that are paid by Medicare, Medicaid, and all other Federal plans and programs that provide health benefits funded directly or indirectly by the United States (except Federal Employees Health Benefits Plan).

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