Exclusion Screening

Managing Exclusions from Federal Healthcare Programs


Emptech's founder, Jeff Aleixo


Jeffrey Aleixo

Federal Healthcare Programs Exclusions Healthcare Compliance

Building an exclusion screening process may seem like a straightforward process based on monthly monitoring of the Office of Inspector General’s (OIG) List of Excluded Individuals and Entities (LEIE) and the System for Award Management (SAM). However, there are other factors to take into account, such as 42 state exclusion lists, license sanctions, and more.

After finding exclusions from federal healthcare programs among employees, vendors, contractors, or volunteers, there are several options healthcare providers can take. However, there is no uniform approach to this problem, making it necessary for healthcare entities to explore different steps that can be taken in order to prevent severe sanctions

Understanding Exclusions from the Federal Healthcare Programs

Since 1977, the federal government has maintained a list of individuals and entities that are excluded from participation in any federal health care program. The LEIE is managed by the HHS Office of the Inspector General (OIG) and is updated monthly. It was created to assure the integrity of federal healthcare programs by entrusting the care of Medicare and Medicaid patients to high-quality providers and suppliers and preventing any federal funds from going to individuals or entities that have committed an offense.

Exclusions from federal healthcare programs occur when individuals or entities pose an unacceptable risk to the integrity of the program and to the beneficiaries the program serves. They may happen after patient abuse, fraud, drug convictions, or licensure issues, among other reasons. Confirmed exclusions may damage healthcare organizations in a variety of ways. Working with an excluded party, directly or indirectly, may result in overpayments, civil monetary penalties, and False Claim Act violations. Consequently, federal and state healthcare providers are required to regularly review the LEIE to avoid hiring or retaining individuals who had committed serious crimes against federal programs or against individuals who were enrolled in federal health care programs.

Use this thorough guide to successfully manage different rules, regulations, and standards that apply to healthcare organizations and stay compliant.

Handling Exclusions from Federal Healthcare Programs

Exclusions from federal healthcare programs can cause different consequences as those who are excluded can receive no payment from federal healthcare programs for any items or services they furnish, order, or prescribe. Furthermore, hiring or continuing to employ an excluded individual exposes healthcare organizations to fines and lawsuits. On average, OIG civil monetary penalties can be as high as $130,000. 

Therefore, healthcare professionals need to make sure they are not working with an excluded individual or entity, to begin with. In order to create an effective healthcare compliance approach, it is necessary to:

  • Screen employees, vendors, and contractors upon hire,
  • Conduct monthly exclusion screening,
  • Screen direct and indirect owners, directors, agents, and managers,
  • Screen the LEIE, SAM.gov, state lists as well as other lists relevant to the specific practice.

When deciding which course of action to take after a confirmed exclusion, it is important to do a detailed investigation. Exclusions from federal healthcare programs can occur for serious crimes such as patient abuse, but also less serious offenses such as failure to pay back a loan. 

If Federal healthcare programs do not pay for any of the items or services being provided by the confirmed exclusion, then a participating provider may employ or contract with an excluded person to provide those items or services. Also, if a healthcare provider employs or contracts with an excluded individual to provide services solely to non-federal healthcare beneficiaries, a participating provider would not be subject to Civil Monetary Penalty (CMP) liability. Furthermore, if an exclusion action has been based on one of the OIG’s permissive authorities, the OIG may grant a waiver of the exclusion action if the agency determines that imposition of the exclusion would not be in the public interest.

The OIG’s Provider Self-Disclosure Protocol outlines a procedure for resolving exclusion violations based on the employment of excluded individuals and entities. Thus, healthcare providers can get information about background, eligibility criteria, submission content, resolution, as well as benefits of disclosure.

Lastly, exclusions from federal healthcare programs are not permanent. Upon expiration of the exclusion period, LEIE will no longer list the excluded individual or entity. However, reinstatement is not automatic and the individual or entity has to apply for reinstatement and receive written notice from OIG that reinstatement has been granted.

Find out how to build an effective healthcare compliance program with the help of the OIG Resource Guide and other compliance guidance documents.

Preventing Consequences of Exclusions from Federal Healthcare Programs

As the OIG continuously expands its exclusion authority, healthcare organizations are obliged to closely follow updates to regulatory requirements and exclusion lists in order to maintain compliance. In addition to lawsuits and OIG penalties, exclusions from federal healthcare programs can also cause reputational damage for organizations, making it necessary for them to take appropriate measures on time.

To identify any new risks and incorporate best practices into a healthcare compliance program, it is important to check all individuals and entities against available exclusion lists on a monthly basis and self-disclose any exclusions to the OIG to reduce penalties. Also, in the process of creating a culture of healthcare compliance, healthcare providers should consult the OIG Work Plan as it includes resources, guidelines, and suggested audits to help organizations prevent fraud and abuse in the healthcare work environment.

Finally, full automation of the exclusion monitoring process can help healthcare organizations uncover disciplinary and administrative actions in real-time and stay in compliance with OIG rules for excluded individuals. Immediate access to employee exclusion data and license updates from OIG, SAM, and state-specific databases saves both time and resources for healthcare providers as it allows them to focus on follow-up and corrective action rather than manual monitoring activities.

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