Chapter 5: Key Laws in Healthcare Compliance

Exclusion from Federal Healthcare Programs

Fast Facts

Title of law: Exclusion of certain individuals and entities from participation in Medicare and State healthcare programs


  • Bills and statutes

U.S. Code: 42 U.S.C. § 1320a-7

Year enacted: 1981

Major amendments: 1981, 1984, 1986, 1987, 1988, 1989, 1990, 1991, 1994, 1997, 2003, 2010, 2019

Enforcement agencies: U.S. Department of Health & Human Services (HHS) Office of Inspector General (OIG)

Links to full text of law:

Applies to: Any individual or entity who is convicted of a program-related crime, a conviction relating to patient abuse, a felony conviction relating to health care fraud, and a felony conviction relating to controlled substance.

The US Department of Health and Human Services (HHS) Office of Inspector General (HHS-OIG, hereafter OIG) has the authority to exclude individuals and entities from federally funded healthcare programs for an array of reasons, including criminal and civil liability for Medicare or Medicaid fraud. The Secretary of HHS has designated the OIG as the excluding authority under regulations contained in Chapter V of Title 42 of the Code of Federal Regulations. An excluded individual or entity shall receive no payment from federal healthcare programs for individual salary and benefits or for any items or services they furnish, order, or prescribe. This includes those entities that provide health benefits funded directly or indirectly by the United States (other than the Federal Employees Health Benefits Plan).[2][3]

OIG maintains a list of all currently excluded individuals and entities called the List of Excluded Individuals/Entities (LEIE) (i.e. sanctions list). Information about the LEIE may be found on the OIG’s exclusions page[4] . Anyone who hires or contracts with an individual or entity on the LEIE may be subject to civil monetary penalties (CMP). Federal laws generally prohibit providers from billing for services ordered or performed by persons or entities that have been excluded from participating in Medicare, Medicaid, or other federal healthcare programs. Violations may result in repayment of amounts improperly received and significant penalties. To avoid overpayments and penalties, providers should check the OIG’s sanctions list before hiring, contracting with, or granting privileges to employees, contractors, or practitioners, and should periodically recheck the sanctions list.

Federal statutes such as the CMP Law authorizes OIG to exclude individuals and entities from participating in federal healthcare programs if they have been convicted of healthcare fraud or engaged in certain other criminal or civil misconduct (See, e.g., 42 USC §§ 1320a-7 and 1320c-5). Federal healthcare programs include state healthcare programs, such as state Medicaid programs, the Maternal and Child Health Services Block Grant, block grants to states for social services and the children’s health insurance program.[5]

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