Exclusion Statute and Civil Monetary Penalties

The Exclusion Statute outlines when certain individuals and entities are excluded from participation in Medicare and State health care programs. This includes individuals and entities convicted of specific crimes such as patient abuse, health care fraud, license suspension or revocation, and several other criminal convictions. Civil Monetary Penalties law provides details on the cost for improper claim submission related to violations of the False Claims Act, Anti-Kickback Statute, Emergency Medical Treatment and Active Labor Act, and other anti-fraud legislation.

On this page

• Exclusion Statute Overview
• Civil Monetary Penalties Overview
• Resources

Exclusion Statute Overview

The Exclusion Statute [42 U.S.C. § 1320a-7] outlines when individuals are excluded from participation in Federal health care programs such as Medicare, Medicaid, Tricare, and the Veterans Health Administration. Individuals excluded under this statute are prohibited from being involved in any aspect of care delivery that results in payment from one of these programs. This means they cannot bill these programs directly, nor can they bill for services provided to beneficiaries of these programs through their employers, facilities, or incident to another enrolled health care provider. If excluded providers accept private pay for any services these cannot be billed to a government program for out-of-network reimbursement.

There are several reasons someone may be excluded from participation in government health care programs, including:

• Medicare or Medicaid fraud, as well as any other offenses related to the delivery of items or services under Medicare or Medicaid.
• History of patient abuse or neglect.
• Felony convictions for other health-care-related fraud, theft, or other financial misconduct. This includes violating state or federal False Claims Acts or convictions for violating private insurance contracts.
• Felony convictions for unlawful manufacture, distribution, prescription, or dispensing of controlled substances.
• Other reasons as determined by the Office of Inspector General (OIG) including misdemeanor convictions related to other healthcare fraud, or misdemeanor convictions related to controlled substances (manufacturing, distribution, dispensing, etc.)

Employers of health care providers who bill federal health care programs are responsible for ensuring that they do not employ or contract with any providers excluded from federal programs. This will require screening of candidates and current employees against the OIG's online List of Excluded Individuals and Entities. Employers could also be subject to penalties for billing services provided by excluded individuals. Penalties can include required repayment to the programs for any billed services provided by excluded individuals and additional monetary penalties. For more information, see OIG's Exclusion website. 

Civil Monetary Penalties Overview

The Civil Monetary Penalties Law [42 U.S.C. § 1320a-7a] outlines financial penalty amounts and some exclusions for various legal violations. This law authorizes OIG to assess and seek these monetary penalties based on the type of violation. These penalties range between $10,000 and $50,000 per violation; an individual or entity can be found guilty of multiple violations in a single case so the penalties can add up quickly. There are dozens of violations under CMPL, some examples include:  

• Violating the False Claims Act such as presenting a claim that the person knows or should know was false or fraudulent.  
• Violating the Anti-Kickback Statute by accepting or providing inappropriate remuneration.   
• Violating the Self-Referral (STARK) Law by referring or accepting referrals to or from a practice where the provider has direct or indirect financial interest.  
• Providing false or misleading information expected to influence a decision to discharge a patient.  
• Violating the Emergency Medical Treatment and Active Labor Act (EMTALA); failing to provide an adequate medical screening examination for patients who present to a hospital emergency department with an emergency medical condition or in labor  
• Violating the exclusion statute by making false statements or misrepresentations on applications or contracts to participate in the Federal health care programs.

Civil monetary penalties are adjusted regularly to account for inflation. The most recent update was effective January 30, 2023, and the update before that was in 2015. For information on the 2023 update to the act see the Civil Monetary Penalties Inflation Adjustments for 2023.  

Resources

U.S. Code: Exclusion Statute and Civil Monetary Penalties

OIG: Types of Civil Monetary Penalties and Affirmative Exclusions

OIG: Fraud and Abuse Laws Overview