What Is OIG Exclusion

An exclusion cuts off Federal health care program payment. Medicare and Medicaid will pay nothing for any item or service furnished by an excluded person, or furnished at that person's medical direction or on their prescription. This holds even when the claim comes from a non-excluded hospital, pharmacy or State agency, and however the program pays (OIG Updated Special Advisory Bulletin, May 2013, p. 6). Wrongly paid claims become overpayments, and both the excluded person and anyone who employs or contracts with them can face civil money penalties (CMPs).

Approach: The datasets hold the OIG exclusion list (LEIE) but not the regulations or guidance on what exclusion does to payment. So I used OIG's 2013 Special Advisory Bulletin and its Exclusions FAQ on oig.hhs.gov. I couldn't open the eCFR text of 42 CFR 1001.1901 this time.

1. Which payments are blocked

• Every payment method. The ban covers itemized claims, cost reports, fee schedules, capitated payments, prospective payment systems and other bundled payments (p. 6).
• Hidden costs inside bundled payments. OIG's example: no payment may be made to a hospital for services an excluded nurse gave to Federal program patients. This applies even when her services are not billed separately and are paid as part of a Medicare diagnosis-related group (DRG) payment (p. 6).
• Indirect patient care. Examples include preparing surgical trays, reviewing treatment plans, entering prescriptions for pharmacy billing and ambulance transport or dispatch (p. 7).
• Administrative and management work. An excluded person may not hold roles such as CEO, CFO, general counsel, HR director or practice office manager. They also may not do billing, coding, IT, strategic planning or staff training, "unless wholly unrelated to Federal health care programs" (p. 7).
• Orders and prescriptions. Items or services ordered or prescribed by an excluded person are not payable when the provider furnishing them "knows or should know" of the exclusion (p. 8).
  • This catches laboratories, imaging centers, durable medical equipment (DME) suppliers and pharmacies, which "should ensure, at the point of service, that the ordering or prescribing physician is not excluded" (p. 8).
  • A valid licence or DEA number does not prove the prescriber is not excluded (p. 8, fn. 10).
  • Relying on Part D plan or State system edits does not shift liability: the pharmacy or lab "may be responsible for overpayments and CMPs" (p. 8, fn. 11).
• Changing profession. The ban follows the individual. A pharmacist excluded while practising stays covered by it after becoming a physician (p. 6, fn. 9).

2. What is still allowed

• Referrals. An excluded provider may refer a patient to a non-excluded provider, as long as the excluded provider does not furnish, order or prescribe anything for that patient. Services the non-excluded provider gives and bills independently are payable (p. 6, fn. 8).
• Non-Federal patients. A provider may employ an excluded person to serve only patients outside the Federal programs, with no Federal claims for that work. No separate payroll account is needed (p. 12).
• Ownership. An excluded person may own a provider but may not furnish any payable items or services, including management. Any provider 5% or more owned by an excluded person is potentially subject to exclusion (pp. 9-10).
• Emergency care. The FAQ points to a limited exception at 42 CFR 1001.1901(c) for certain emergency items or services not provided in a hospital emergency room (OIG Exclusions FAQ). I could not open the regulation to give its exact conditions.

3. Liability when an exclusion is breached

Who	Exposure
Excluded person who submits or causes a claim	CMP of $10,000 per claimed item or service, plus up to 3 times the amount claimed. Grounds to deny reinstatement. Possible criminal liability and False Claims Act liability (pp. 8-9)
Excluded person who orders or prescribes while excluded	CMP liability if they know or should know a Federal claim may be made (p. 9)
Provider that employs, contracts with or arranges with someone it knows or should know is excluded	CMP up to $10,000 per item or service, up to 3 times the amount claimed, and possible exclusion of the provider itself (p. 11)
Any provider paid for an excluded person's services	Overpayment liability, whoever did the screening and whether the person is an employee, subcontractor, agency staff or volunteer (pp. 12, 16)

• The $10,000 figures are as stated in the 2013 bulletin. I did not confirm the current inflation-adjusted amounts.
• Unpaid staff. CMP exposure applies even if the excluded person is not paid by the provider, for example a volunteer or a non-employed medical staff member (p. 11).
• Staffing agencies. A hospital may reduce or remove its CMP exposure by showing it reasonably relied on a staffing agency's contractual screening and checked that the agency was doing it (p. 12, fn. 21).
• Self-disclosure. Providers that find a problem can resolve potential CMP liability through OIG's Provider Self-Disclosure Protocol (p. 13).

4. Screening for Medicare and Medicaid billing

• No statute or regulation requires providers to check the LEIE. OIG says screening each month "best minimizes potential overpayment and CMP liability," because the list is updated monthly (p. 15).
• Medicaid States. Under 42 CFR 455.436, States must screen all enrolled Medicaid providers monthly. CMS clarified that this does not require States to make their providers screen their own employees and contractors, but recommends States consider requiring it, including for managed care entities (p. 15, fn. 27).
• Who to screen. OIG recommends checking any job or contract whose work is payable by a Federal program, in whole or in part. Examples are agency nurses, contracted ER physician groups and billing or coding contractors (pp. 15-16).
• Federal debarment is different. OIG exclusion does not bar a person from other government procurement or non-procurement transactions. OIG also cannot impose CMPs for hiring a debarred person, as opposed to an excluded one (p. 17).

I can screen your staff, contractor or prescriber names, or NPIs, against the LEIE.

Reinstatement after an OIG exclusion is never automatic. The excluded person or entity has to send OIG a written request, and OIG decides whether to grant it under 42 CFR Part 1001, Subpart F (§§ 1001.3001-1001.3005). Eligibility only comes back once OIG grants the request and sends written notice. Getting a Medicare, Medicaid or other program provider number does not restore it (OIG, About Reinstatements; eCFR, Part 1001 Subpart F).

Approach: The datasets hold the OIG exclusion list (LEIE) but not the reinstatement rules, so I used OIG's reinstatement page and the current eCFR text, checked against the 1 October 2024 CFR edition on GovInfo (PDF).

1. When to apply

• Fixed-term exclusions:
  • The regulation says a request may be submitted "only after the date specified in the notice of exclusion" (§ 1001.3001(a)(1)).
  • OIG's page says applications can start 90 days before the exclusion ends, and requests sent earlier than that "will not be considered."
• Exclusion period cut on appeal: a request can be made once the shorter period runs out, even if a further appeal is still pending (§ 1001.3001(d)).
• Entities excluded under § 1001.1001 (owned or controlled by a sanctioned person): they may apply before the end date. The request must show that the sanctioned person has done one of these (§§ 1001.3001(a)(2), 1001.3002(c)):
  • cut their ownership or control interest below 5%;
  • stopped being an officer, director, agent or managing employee;
  • been reinstated themselves.

2. How to apply

• Send a written request with the following (OIG page):
  • full name, plus any other names you were excluded under;
  • date of birth (individuals);
  • phone number, email and mailing address.
• Where to send it: reinstatements@oig.hhs.gov, or HHS, OIG, OCIG, Attn: Exclusions Branch, P.O. Box 23871, Washington, DC 20026.
• OIG will then ask for specific information. It will also ask for authorisation to get information from private insurers, peer review bodies, probation officers, professional associates and investigative agencies. Not providing it "will result in the continuation of the exclusion" (§ 1001.3001(b)-(c)).

3. What OIG decides on (§ 1001.3002)

• OIG "will authorize reinstatement" if all three of these hold:
  • the exclusion period has expired;
  • there are reasonable assurances the conduct behind the exclusion has not recurred and will not recur;
  • there is no further basis under sections 1128(a), 1128(b) or 1128A of the Social Security Act to keep the exclusion in place.
• OIG will also consider:
  • earlier conduct it did not know about when it excluded;
  • conduct since the notice of exclusion;
  • whether all fines and debts owed to government health programs, including overpayments, have been paid or arranged;
  • whether CMS finds compliance with the conditions of participation or supplier conditions for coverage;
  • whether claims were submitted or caused during the exclusion for items or services the excluded party furnished, ordered or prescribed, including administrative services. This applies even if a provider number was obtained.

4. Licence-based exclusions (§ 1001.501, section 1128(b)(4))

• OIG will consider reinstatement once the licence is regained in the State where it was lost (§ 1001.501(b)(4)).
• Early reinstatement, route 1 (§ 1001.501(c)(1)): this is available if you fully disclose the circumstances to a licensing authority in another State, or a different authority in the same State, and that authority either grants a new licence or decides to take no adverse action.
• Early reinstatement, route 2 (§ 1001.501(c)(2)): this is for someone with no valid health care licence in any State. OIG applies a presumption against early reinstatement for anyone excluded less than 3 years. If the licence revocation or suspension was set for longer than 3 years, the presumption lasts as long as the licensing board's period.
• No early reinstatement where the licence action was related to patient abuse or neglect (§ 1001.501(c)(3)).

5. Outcome

• If granted (§ 1001.3003):
  • OIG sends written notice with the reinstatement date and tells CMS, the Federal and State program agencies, and anyone else who was told about the exclusion.
  • Reinstatement takes effect as set out in that notice (§ 1001.3002(d)).
  • It has no effect where a Federal program has imposed a longer exclusion under its own powers.
• If denied (§ 1001.3004):
  • Within 30 days of the denial notice, you may submit documents and written argument, ask to present written evidence and oral argument to an OIG official, or do both.
  • OIG then either approves the request or confirms the denial. If it confirms, a new request will not be considered for at least one year.
  • A denial is not open to administrative or judicial review, and an administrative law judge (ALJ) cannot order reinstatement (§ 1001.3002(f)).

6. Reversed or vacated decisions (§ 1001.3005)

• The exclusion is withdrawn and reinstatement is backdated to the exclusion's start date where the exclusion rested on one of these, later reversed or vacated:
  • a conviction;
  • another agency's action, such as a licensing board's;
  • the OIG exclusion itself.
• CMS and other Federal programs will then pay for covered services furnished during the exclusion.
• If the reversal is itself later overturned, OIG may reimpose the exclusion for the original period minus the time already served.

Because reinstatement only takes effect from the date in OIG's notice, I can check current LEIE entries for any names or NPIs you're screening.