Exclusion Authority Requirements for Chiropractic Practices

The Office of the Inspector General (OIG), which is part of the Department of Health and Human Services (HHS), was created in 1976 to address ten years of backlogged cases of fraud, waste, and abuse (FWA) related to Medicaid programs.  But it didn’t really get moving until the False Claims Amendment Act lowered the bar for proof and increased fines in 1986, and the HIPAA Act of 1996 created a program called Health Care Fraud and Abuse Control (HCFAC).  This gave the OIG the resources necessary to enforce §1128 of the Social Security Act.

The OIG has the authority to exclude individuals and entities from participation in all Federal healthcare programs under section 1128 of the Act (42 U.S.C. § 1320a-7).  The OIG maintains a list of those who are currently excluded, called the List of Excluded Individuals/Entities (LEIE).  The list includes the individual’s name, address, National Provider Number, Unique Physician Identification Number, date of birth, job description, the date of exclusion, and the reason for exclusion.  In 2015 a chiropractor in Pennsylvania agreed to a 25-year exclusion for violating the False Claims Act.  OIG alleged that the chiropractor knowingly submitted or caused to be submitted false or fraudulent claims to Medicare for services rendered as a de facto executive and administrator of a chiropractic center, notwithstanding the fact that he was excluded from participating in Federal health care programs.

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Healthcare providers participating in Federal healthcare programs (such as Medicare, Medicaid, CHIP, TRICARE, and VA) are advised to check this list for employees who might appear on it.  If an entity provides care to patients who are part of a Federal plan, then it is prohibited to employ anyone on this list.  (See the Office of Inspector General’s (OIG) General Compliance Program Guidance (GCPG), published November 2023)

There are several reasons why someone might make it onto the exclusions list, and the length of the exclusion can vary from one year to up to ten years, or beyond.  Some exclusions are mandatory, and some are permissive .  Mandatory exclusions are required by law.  Examples include:

• Certain types of felony criminal convictions
• Medicare or Medicaid fraud
• Patient abuse or neglect
• Other healthcare related theft or fraud
• Unlawfully distributing a controlled substance

Permissive exclusions are discretionary, and the individuals have 30 days to appeal.  Examples include:

• A revoked license
• Defaulting on health education loans
• Fraud in non-healthcare programs
• Obstruction of an audit
• Participating in kickbacks
• Failing to meet professionally recognized standards

No federal healthcare program payment may be made for items or services furnished by an excluded person, or under the direction of an excluded person.  An excluded person may not bill indirectly, such as through an employer or group practice.  In addition, the OIG has the authority to impose Civil Monetary Penalties (CMP) on those that contract with an individual or entity that is excluded.  (see this Special Advisory Bulletin).  The CMP may be as much as $20,000 for each item or service claimed and treble damages of the amount of the claim, if an excluded individual participates in any way with federal health plans.  Payments received while in violation will be considered overpayments and will have to be returned.  (See the Office of Inspector General’s (OIG) General Compliance Program Guidance (GCPG), published November 2023)

To avoid overpayment and CMP liability, entities must check all new hires and existing employees on the LEIE to determine their exclusion status.  The OIG updates the list monthly, so the best way to reduce risk is to conduct a monthly screening.  Every state also has its own OIG and its own laws regarding exclusion.  These state lists must be checked as well.  The following is a list of other databases that providers should consider checking on a regular basis:

• Medicare Exclusion Database
• GSA’s System for Award Management database
• National Practitioner Data Base (NPPES NPI Registry)
• OFAC SDN and Non-SDN List
• Medicare Opt Out
• SSN Death Master File
• CMS Preclusion List

In many cases, a Federal exclusion automatically triggers a state-level exclusion, but this does not always work in reverse, since state law violation may not constitute a federal violation.  Many private health plans consider federal exclusion as criteria for participation in their networks as well.  As such, some refer to exclusion as a “financial death sentence” for any health care provider. 

Pleading ignorance is not an option, as the OIG has publicized the LEIE since 1999 and the Social Security Act states that this applies to persons “who knew or who should have known” they were engaging an excluded entity.  Fortunately, there are some inexpensive third-party services who can perform the check for you.  If an exclusion is found, it can be self-reported to the OIG, but it may be wise to seek legal advice. 

Note: This article is Part 4 of 5: Compliance Laws Every Chiropractic Physician Should Know

• Part 1: The False Claims Act for Chiropractic Physicians
• Part 2: Anti-Kickback Statute for Chiropractic Physicians
• Part 3: Self-Referral Law for Chiropractic Physicians
• Part 4: Exclusion Authority Requirements for Chiropractic Practices
• Part 5: Civil Monetary Penalties, OIG, and the Chiropractic Practice