What is OIG exclusion and how does it affect Medicare billing?
OIG exclusion bars participation in federal health care programs, restricts Medicare and Medicaid payment, and requires OIG approval for reinstatement.
What is OIG exclusion?
An OIG exclusion bars an individual or entity from participation in federal health care programs. Medicare, Medicaid and other covered federal health care programs generally cannot pay for items or services that party furnishes, orders or prescribes, as HHS OIG explains. 42 CFR 1001.1901 includes Medicare Advantage and prescription drug plans in that bar. The restriction can also affect payment to a nonexcluded employer, as OIG's 2013 updated advisory bulletin explains.
What is the OIG exclusion list?
The List of Excluded Individuals and Entities, or LEIE, is the OIG exclusion list. It identifies parties excluded by HHS OIG. An entry reflects a participation and payment sanction, not just a background-check finding, and the sanction lasts unless and until reinstatement. See OIG's exclusions page and the payment rule.
OIG recommends checking the LEIE before hiring or contracting, then monthly. The same bulletin distinguishes that recommendation from a universal federal requirement for providers to check the list. State, program-specific or contractual duties need separate consideration.
Mandatory and permissive exclusions
Section 1128 of the Social Security Act separates mandatory exclusions from permissive exclusions. The statute says the Secretary shall exclude on mandatory grounds and may exclude on permissive grounds. That describes the exclusion authority, not a right to ignore the payment restriction.
Mandatory grounds include convictions related to Medicare or state health care program items or services, and patient neglect or abuse connected with health care delivery. They also include specified felony health care fraud or financial misconduct, and felony unlawful controlled-substance manufacture, distribution, prescription or dispensing. The ordinary minimum period is five years, and reinstatement may take longer. Section 1128(a)(1) covers a conviction related to delivery of an item or service under Medicare or a state health care program. That ground is not limited to felonies.
Permissive grounds include specified misdemeanor convictions, license revocation or suspension, unnecessary or substandard services, and fraud or kickback-related conduct. Periods vary by ground, and for Sections 1128(b)(1) through (b)(3), three years is a baseline that mitigating or aggravating circumstances can shorten or lengthen. For license-related exclusions under Section 1128(b)(4), the period generally tracks the licensing action, though early-reinstatement exceptions exist. OIG's exclusion authorities summary explains these differences.
How exclusion affects Medicare and Medicaid billing
Changing who submits the claim doesn't avoid the restriction. OIG's example is an excluded nurse whose services are included in a hospital's Medicare diagnosis-related group payment. Payment to the hospital is still inside the restriction. The same bulletin covers administrative and management work, including billing, accounting, IT, human resources and management, unless that work is wholly unrelated to federal health care programs.
Whether a job is affected depends on that payment restriction, not on the job title alone. For ordered or prescribed services, the regulation applies when the furnishing provider knew or had reason to know of the exclusion. Limited payment exceptions also exist.
An employer can face sanctions for arranging federally payable items or services through someone it knows, or should know, is excluded. Hiring alone does not automatically establish liability. The relevant provision is 42 CFR 1003.200(b)(4).
Reinstatement is not automatic
An exclusion does not end automatically when its stated period expires. The excluded party must apply for reinstatement and receive written notice that OIG has granted it. A new provider number doesn't restore eligibility. See OIG's reinstatement guidance and 42 CFR 1001.3001.
For a defined exclusion period, OIG's reinstatement guidance allows the process to begin 90 days before the period ends. Earlier requests will not be considered. 42 CFR 1001.3001 says a written request may be submitted only after the date specified in the exclusion notice. Starting the process does not permit early federally payable work.
RegAffairs AI explains the definition and billing consequences in this answer on OIG exclusion.