The differences between exclusion, sanction, and termination are crucial for healthcare employers to understand when seeking to find and retain skilled professionals.
Because the HHS-OIG and GSA-SAM federal databases refer to exclusions as “sanctions,” healthcare and compliance professionals often confuse the two terms because they are incorrectly used interchangeably.
A sanction results from an administrative hearing where an individual or entity violates an administrative rule, civil law, or criminal offense, leading to various penalties.
Sanctions are enforced by the Office of the Inspector General (OIG) in the U.S. Department of Health and Human Services or a state Medicaid program.
A sanction from a healthcare disciplinary or licensing board can lead to significant consequences, the most severe of which is an exclusion.
An exclusion results from an extreme sanction issued by the HHS-OIG. Exclusions are typically reserved for those who pose a high risk to patients or a program’s integrity. An OIG sanction is also called an exclusion.
Additional actions against the excluded party may include license restrictions, revocation, suspension, or voluntary surrender of the license. These are also called disciplinary actions against the license.
40% of excluded providers on the OIG’s List of Excluded Individuals and Entities (LEIE) have their licenses sanctioned or revoked.
The OIG enforces two types of exclusions: mandatory exclusions, such as convictions for patient abuse, neglect, or felony convictions related to healthcare fraud, and permissive exclusions, which include defaulting on student loans or misdemeanor convictions related to healthcare fraud.
The OIG penalizes providers by excluding them from participation in federal healthcare programs, including Medicare, Medicaid, CHIP, and TRICARE.
Once an individual or entity is added to the OIG-LEIE, they are prohibited from participating in federal or state healthcare programs. This means they cannot receive federal reimbursement from programs like the Centers for Medicare and Medicaid Services (CMS).
In addition, an OIG-LEIE exclusion can also result in debarment from the GSA-SAM and/or exclusion by one or more states.
There is a third category, distinct from healthcare exclusions, called termination. Termination does not mean the same thing as exclusion.
According to a Centers for Medicare and Medicaid Services (CMS) bulletin, “termination” occurs when the state terminates the participation of a Medicaid or Children’s Health Insurance Program (CHIP) provider from the program or when the Medicare program has revoked a Medicare provider or supplier’s billing privileges and the provider can no longer appeal.
This means the state could terminate a provider, but theoretically, they could still work at healthcare organizations if they don’t provide services billable by Medicare.
Additionally, an individual or entity excluded in one state is considered excluded in all states, as stated in Section 6501 of the Affordable Care Act.
Under the Affordable Care Act, an individual or entity/vendor excluded in one state cannot participate in federal healthcare funds in all other states, and the termination duration should follow the terminating state’s law.
For example, if one state terminates a provider for three years, a termination action is triggered in every other state due to the first state’s termination action.
Healthcare organizations are accountable to the state and the OIG for any sanctions, exclusions, or terminations on their employee roster.
If terminated providers do not bill Medicare directly for their services, they can still work in administrative roles at healthcare organizations. For instance, a nurse practitioner who has been terminated (but not excluded) from Medicare could take on a different position at a hospital, as long as the services provided are not directly billable to Medicare.
In addition, the CMS has the authority to “terminate” providers for various reasons, including failure to provide ownership information and noncompliance with civil rights requirements. Among the reasons for revocation:
- “Knowingly and willfully made, or caused to be made, any false statement or representation of a material fact for use in an application or request for payment under Medicare.”
- “Submitted, or caused to be submitted requests for Medicare payment of amounts that substantially exceed the costs it incurred in furnishing the services for which payment is requested.”
- “Furnished services that the OIG has determined to be substantially more than the needs of individuals or of a quality that fails to meet professionally recognized standards of health care.”
- The provider or supplier is out of compliance with enrollment requirements (e.g., lacks a physical business address to render services) and hasn’t submitted a corrective action plan.
- The provider or supplier lost its license.
- The provider or supplier no longer meets CMS regulatory requirements for its specialty.
- The provider or supplier lacks a valid Social Security number or employer identification number and an owner, partner, managing organization/employee, officer, director, medical director, and/or authorized official.
- The provider or supplier is excluded from Medicare and other federal health programs or debarred from government contracts, which means the provider is barred from doing business with Medicare directly or indirectly (e.g., as a hospital employee).
- Felonies will prompt the revocation of billing numbers and, thus, Medicare terminations. These include felonies against people (e.g., murder, rape, assault), financial crimes (e.g., insurance fraud, embezzlement, extortion, tax evasion), felonies that put Medicare money or beneficiaries “at immediate risk,” and felonies that trigger mandatory exclusion.
- The provider or supplier puts false or misleading information on Medicare enrollment forms but certifies it as accurate.
- The provider or supplier neglects to provide complete and accurate information and supporting documentation within 30 days of being ordered by CMS to submit an enrollment application and supporting documentation.
- The physician, non-physician practitioner, physician organization, or non-physician organization fails to report changes in adverse actions and practice locations to CMS within 30 days.