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When you go to a doctor’s office or hospital, you expect that the medical professional who provides care and services is licensed,trained, and in possession of the proper credentials, right? You also expect that they are not on a federal or state list of providers who have been convicted of felony substance abuse, patient abuse, or fraud, correct?  

That is not unreasonable, but unfortunately, it’s not always the case. 

Let’s say that a nurse has been diverting controlled substances from her patients and is either claiming them for his or her own use or even selling them for profit. Once the nurse is caught, disciplined, and probably prosecuted, these actions will be reported to the state nurse licensure board (NLB) where he or she is licensed. They will likely suspend or revoke the nurse’s license. If the action is a felony, then that record is required to be sent to the Office of Inspector General (OIG) for the U.S. Department of Health and Human Services (HHS), by statute, and he or she will be added to a federal list of “excluded” individuals.  

This exclusion should prevent the nurse from being eligible for reimbursement for providing services from the federal healthcare programs such as Medicare, Medicaid, CHIP, or TriCare. It will also prevent the nurse from practicing nursing while the license is revoked.  

However, states that do not report such matters to the OIG in a timely fashion (within the 30-day time frame) allow for such individuals to move and start to apply for positions in another state. Organizations only searching the OIG list will miss the state Medicaid-issued exclusion for these individuals, because it was never sent to the OIG for inclusion in its federal data set.

For example, there are 5,324 excluded individuals on the New York state list. When we compare those names to the OIG list, there are only 2,956 of those exclusions listed for New York. There are 2,368 exclusions that did not make it on the OIG list, so it appears that they are missing 44 percent of those exclusions – assuming that all of the state exclusions are for a felony. (It is possible a small portion of those exclusions were misdemeanor and not felony cases.) This does not even include the companies!

How often does this occur? Well, the OIG list contains 65,000 such individuals or entities. The state Medicaid exclusion lists contain another 57,000. And there are other federal data sets that may also contain such a record. In fact, the total number of state and/or federally excluded individuals and entities is approaching 200,000.

Let’s look closer! 

What is an Exclusion? 

An exclusion is an administrative action that is mandatory against an individual or entity who has either: a) been convicted of, b) pleaded guilty to, or c) had their license revoked for: 

  • Felony Fraud as it relates to federal healthcare programs
  • Felony Substance Abuse
  • Felony Patient Abuse or Neglect

All felony fraud cases result in an automatic exclusion by the OIG. If an individual or entity has been convicted or pleaded guilty to a misdemeanor for any of the fraud exclusions lists above and/or is in default of their student loan, they could be excluded by the OIG or have their license revoked as a result as well. 

Who Enforces Exclusions?

The OIG for HHS has the authority to impose and enforce exclusion and civil monetary fines for those organizations that hire or contract with an excluded person or entity. The fines can be up to $10,000 per each item claimed for reimbursement, plus treble damages. The OIG can also calculate a fine based on the salary and benefits of the individual being paid during the time of his/her exclusion, plus treble damages. Treble damages are a form of punitive penalty, and they add up quickly.

Where to Search?

OIG – LEIE is the federal data set maintained by the HHS OIG. It contains federal exclusions issued by the OIG and/or from state Medicaid fraud control units that report their records and convictions to the OIG.  

SAM.gov: the system for award management of a federal contract with the government. This database is supposed to include those persons or entities that are debarred, excluded, or sanctioned by the U.S. government. It is a best practice to search this as well. 

State Medicaid exclusion lists. All 50 states should have an exclusion list managed either through their Medicaid fraud control unit (MCFU) or Attorney General’s office. Today there are 38 publicly available Medicaid exclusion lists.

How Often to Search? 

Such searches should be performed on a monthly basis, according to the OIG guidance and Centers for Medicare & Medicaid Services (CMS) regulations. Both federal agencies were tasked with providing guidance and recommendations following the passage of the Patient Protection and Affordable Care Act. See the attached links for OIG guidance and CMS regulations.  


The total number of federal and state excluded individuals and entities will eclipse 200,000 by the end of the summer. This represents a milestone, and a testament to the tireless efforts and success of the OIG and U.S. Department of Justice (DOJ) in pursuing fraud in healthcare. Exclusions represent the heavy hand of the sword that the OIG and state Medicaid FCUs can exert against an individual or entity. 

Fines and penalties by the OIG for billing for services provided, ordered, or prescribed by an excluded individual or entity are being enforced and imposed each month. The good news is that simply conducting monthly exclusion monitoring can mitigate this risk. 

About the Author

Michael Rosen brings more than 25 years of experience in leading risk mitigation-oriented businesses. Rosen co-founded Background America, Inc., and he is currently the co-founder of ProviderTrust, Inc., an exclusion monitoring SAAS company. 

He grew up in Nashville, Tenn. and graduated from the University of Texas and the University of Memphis Law School.

Contact the Author


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