Are You in Compliance? Effect of Exclusion from Participation in Medicare and Medicaid

The Office of Inspector General’s (“OIG”) recent release of OIG Advisory Opinion No. 15-02 is an important reminder that providers must be vigilant in complying with prohibitions against receiving payment for items or services provided by excluded individuals or entities.

The Law
Section 1128 of the Social Security Act excludes physicians and other providers who are convicted of engaging in health care fraud and abuse from participating in Medicare, Medicaid, or any other federal health care programs.  The effect of an OIG exclusion is that no payment may be made by Medicare, Medicaid, or any other federal health care program for any items or services furnished (1) by an excluded person or entity or (2) at the medical direction of or prescription of an excluded person or entity on or after the effective date of the exclusion.  Such items and services include both direct patient care and indirect patient care like preparing surgical trays, reviewing treatment plans, filling prescriptions, and providing transportation services.  Violating the payment prohibition either as an excluded person or entity or by contracting with an excluding person or entity can expose  a provider to civil monetary penalties, assessments, and exclusions.

Advisory Opinion No. 15-02
In the OIG’s most recent advisory opinion, an excluded medical practice (the “Practice”) asked whether the Practice could receive payment after its exclusion date for items or services provided by the Practice before the date of exclusion.  While the Practice divested all of its ownership interest in accordance with the terms of its settlement agreement, the Asset Purchase Agreement entered into by the Practice allowed the buyer of the assets to remit payments to the Practice for certain items or services not found to be in violation of health care laws.  The OIG found that receipt of such payments by the Practice would not be in violation of the Practice’s exclusion, because the payment prohibition only applied to items or services that an excluded individual provided on or after the effective date of exclusion.  The advisory opinion is limited to the specific arrangement of the Practice, but gives providers insight into the OIG’s interpretation of when the payment prohibition begins for an excluded individual.

Best Practices
Because the payment prohibition extends beyond excluded individuals or entities to providers contracting with excluded individuals or entities, providers can make sure they comply with the payment prohibition by utilizing the following best practices:

  1. Screen against the List of Excluded Individuals and Entities (“LEIE”) all individuals and entities that will provide an item or service payable by a Federal health care program directly or indirectly, in whole or in part, by accessing or downloading the list at
  2. Check the LEIE before employing or contracting with individuals or entities.
  3. Check the LEIE periodically to determine the exclusion status of current employees and contractors.
  4. Maintain documentation of all LEIE searches performed by taking a screenshot or printing the initial search and any additional searches run to verify the results of potential name matches.
  5. Request and maintain documentation from contractors if relying on the contractor to screen its own employees and subcontractors.
  6. Contact legal counsel if you have any doubts about which individuals or entities to screen or to self-disclose contracting with an excluded individual or entity.

Additional Resources
The following resources serve as a good starting place for providers wanting more information on the scope and effect of the payment prohibition:

Wendy Wright

Wendy Wright

Wendy Wright focuses her practice on resolving legal, regulatory and business issues affecting professionals and organizations in the health care industry. Her clients include hospitals, physician groups and other health care providers.

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