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Updated Guidance Regarding Providers' Obligations to Screen for Persons Excluded from Participation in Federal Health Care Programs

November 2013

The Office of Inspector General (“OIG”) has the authority to exclude individuals and entities from participation in federally funded health care programs (“Excluded Persons”), and health care providers are prohibited from employing or contracting with Excluded Persons. OIG maintains a List of Excluded Individuals and Entities (“LEIE”) and has recently updated its guidance regarding providers’ obligations to screen for Excluded Persons and the manner in which providers utilize the LEIE to screen employees and contractors to ensure they are not Excluded Persons.


Generally, Excluded Persons are prohibited from providing or ordering services directly or indirectly (such as in the role of an officer or managing employee) payable under federal health care programs, and providers are prohibited from contracting with or employing them for such purposes. Providers who violate these prohibitions may be subject to penalties up to $10,000 per item or service, assessments up to three times the amount claimed, and federal health care program exclusion.

Screening for Excluded Persons

To avoid liability for impermissibly employing or contracting with Excluded Persons, OIG recommends that providers receiving payments from federal health care programs primarily monitor the LEIE, available here. Providers should check the LEIE before engaging new employees and contractors providing items or services payable by a federal health care program. This may also require screening employees of contractors furnishing such items or services to the provider. While OIG stated that providers may choose to rely on screening conducted by the contractor of its employees that the provider then validates – for example, by obtaining appropriate documentation of screening from the contractor – such reliance would not necessarily preclude the provider’s liability for any items or services furnished by any Excluded Person. OIG recommends utilizing the LEIE to screen existing employees and contractors on a monthly basis. Documentation should be maintained by the provider, or a third-party retained by the provider to perform its screening, each time the LEIE is checked and should include a record of all names and other information searched.

Exceptions to Excluded Provider Prohibition

OIG clarified the following circumstances under which a provider receiving payments from a federal health care program may employ or contract with an Excluded Person:

• The Excluded Person provides items or services not paid for, directly or indirectly, by federal health care programs.
• The Excluded Person provides items or services only to non-federal health care program beneficiaries.

OIG further explained that a provider employing or contracting with an Excluded Person in these ways does not need to maintain a separate account to pay that person.

Wolff & Samson is prepared to assist clients in refining or establishing proper screening procedures for Excluded Persons. Should you have any questions regarding what the updated OIG guidance means for you and your business, please do not hesitate to contact an attorney in our Health Care and Hospital Group.