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Employers’ Guide To The Medicaid Exclusion List & OIG Penalties

Illustration shows a healthcare worker on the Medicaid Exclusion List.

Healthcare industry employers must go through in-depth hiring and screening processes and follow many rules, regulations, and laws to find the most qualified candidates. This guide for employers will help you avoid missteps that can lead to steep penalties.

Learn how to navigate the Medicaid Exclusion List, avoid OIG penalties, and use Healthcare Sanction Checks to protect your organization.

In the healthcare industry, employers must go through in-depth hiring and screening processes that go beyond criminal background checks and drug tests. Whether you’re seeking to hire physicians, nurses, or other healthcare positions, there are many rules, regulations, laws, and exclusion lists employers must navigate to find the most qualified candidates.

Simply put: It can be confusing, costly, and time-consuming to navigate it all on your own. What’s more, if employers have a misstep along the way, it can lead to steep penalties and consequences for your business and its employees and patients.

That’s why GoodHire is sharing an employers’ guide to navigating the Medicaid Exclusion List, avoiding OIG penalties, and taking the proper steps to hire qualified candidates while protecting your organization.

What Is The Medicaid Exclusion List?

The formal term for the Medicaid Exclusion list is called the List of Excluded Individuals/Entities (LEIE), which is managed by the Office of the Inspector General (OIG). It is also sometimes referred to as the OIG Exclusion List. Its purpose is to provide information to the healthcare industry, patients, and the public about people and entities currently excluded from participating in federally funded healthcare programs like Medicare and Medicaid.

The OIG has been implementing exclusions since about 1981, but the Department of Health & Human Services (HHS) first began imposing them in 1977. Contractors and providers may become excluded for a number of reasons, including:

  • A conviction of Medicare or Medicaid fraud
  • Patient abuse or neglect
  • Felony convictions for healthcare-related fraud, theft, or other financial misconduct
  • Felony convictions relating to the unlawful manufacture, distribution, prescription, or dispensing of controlled substances

As a result, employers and healthcare organizations that participate in federally funded healthcare programs are barred from hiring or contracting with excluded individuals or entities, which may pose several risks to their business, employees, and patients.

Using the Medicaid Exclusion List

Anyone can use the LEIE database to find excluded individuals or entities. 

For limited or individual searches, users can search for up to five names at once using Social Security Numbers (SSNs) or Employer Identification Numbers (EINs). 

For more extensive searches, the OIG recommends downloading the entire list into a spreadsheet or data program to find information. However, it’s important to note that the downloadable database doesn’t have SSNs or EINs, so employers (and any other searchers) can only verify those people through the online database.

The OIG also provides a helpful list of search tips, like checking former names, hyphenated names, verifying results, and more.

Understanding Search Results

The LEIE places excluded individuals and entities into two categories: mandatory and permissive. The most straightforward way to understand the difference is that mandatory exclusions include felony convictions, and permissive exclusions include misdemeanor convictions. The full breakdown of each includes:

Mandatory exclusions: 

  • Conviction of Medicare or Medicaid fraud
  • Patient abuse or neglect
  • Felony convictions for other healthcare-related fraud, theft, or other financial misconduct
  • Felony convictions relating to unlawful manufacture, distribution, prescription, or dispensing of controlled substances, and more

Permissive Exclusions

  • Misdemeanor convictions related to healthcare fraud
  • Misdemeanor convictions relating to the unlawful manufacture, distribution, prescription, or dispensing of controlled substances
  • Submission of false or fraudulent claims to a federal health care program, and more

It’s also important to note that the LEIE does not include actions taken by other agencies—only those taken by the OIG.

The SAM Exclusion List

Employers should also be cognizant of another exclusion list managed by the US government, The System for Award Management (SAM). Its primary purpose is for businesses, organizations, and federal agencies to win US government contracts.

SAM was developed in 2012 when the General Services Administration (GSA) consolidated several federal award and procurement systems into one streamlined system. This was done to eliminate duplicate data entry, improve data quality, and save taxpayer money. Just as the OIG maintains an exclusion list, SAM does as well—except this list includes contractors and entities who are excluded from working with the federal government.

While there’s a lot of overlap between the two exclusion lists, there are some differences employers need to be aware of:

  1. Those marked as excluded within SAM may be so temporarily—and for several reasons—anything from violating antitrust statutes to delinquent federal taxes of more than $3,000.
  2. The SAM exclusion list doesn’t include license information or National Provider Identifier (NPI) records of those excluded—which are needed to verify that your search results match the candidates you screen. As a result, if an employer finds a candidate or contractor marked as excluded, they have to contact the federal agency that created the record to verify the information provided.

Healthcare OIG Penalties

Employers that violate exclusion rules (in other words: hire an excluded individual, contractor, or entity) face serious consequences in the form of civil monetary penalties (CMPs). Just how much? Up to $10,000 per claim. 

Here’s a more detailed breakdown of OIG penalties:

  • $10,000 for each day that an excluded individual retains a prohibited ownership or control interest in an entity participating in Medicare or any State health care program
  • $10,000 for each claimed item or service furnished during the period that the person was excluded
  • Subject to an assessment of up to three times the amount claimed for each item or service
  • Denial of reinstatement by OIG to federal health care programs because of an exclusion violation

Consequences Beyond Penalties & Fines

The consequences of hiring excluded candidates can go well beyond fines. Some of those may include:

  • Losing eligibility for federal funding through Medicare and Medicaid
  • Risking the health and safety of patients
  • Increasing the risk of financial fraud
  • Increasing the risk of non-compliance

To learn more about the severity of fines and consequences, explore the OIG’s updated list of exclusion cases.

Although the government provides free tools and databases to help companies navigate exclusion lists and comply with its requirements, they can be incredibly challenging and time-consuming to navigate. That’s why employers should take an additional step when screening candidates by conducting healthcare sanctions checks through a reputable professional background screener like GoodHire.

Avoid OIG Penalties & Risks To Your Company With Healthcare Sanction Checks

For employers in the healthcare field and other regulated industries, a healthcare sanctions check is an important part of a comprehensive background check. Depending on the level you search you need, it helps you mitigate risks by searching more than 1,000 government sources (including OIG and SAM) to find any penalties, suspensions, or punitive or disciplinary actions taken against a healthcare professional. 

Through this screening, employers can also verify information that typically isn’t available through the OIG and SAM exclusion lists, including:

  • The violation or reason for the exclusion (if available)
  • Whether the exclusion is currently active (or the end date if the sanction is no longer active)
  • The name of the source or board that took the disciplinary action
  • The ability to add Ongoing Alerts to notify employers if an employee is added to an exclusion list

Ensuring that job candidates and employees aren’t listed on government exclusion lists is more than just doing a thorough screening—it helps avoid steep penalties and consequences that can be detrimental to your business and reputation.

Find out if your healthcare candidates are in good standing. GoodHire offers sanction checks and hundreds of employment screening services.

Get Started With Healthcare Sanctions Checks

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Illustration showing GoodHire's sanction check for healthcare professionals.

The resources provided here are for educational purposes only and do not constitute legal advice. We advise you to consult your own counsel if you have legal questions related to your specific practices and compliance with applicable laws.

About the Author

Ashley Blonquist is a former news journalist. She writes about GoodHire’s employment screening services and how employers use them to make informed hiring decisions.