What is the Federal Exclusion Statute? (Also known as the Exclusion Law, or List of Excluded Individuals and Entities (LEIE))? Is it an Example of A Fraud, Waste, and Abuse (FWA) Law?

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The Exclusion Statute (also called the “List of Excluded Individuals and Entities” statute) is a federal law, located at 42 U.S.C. Section 1320a-7.  This law is not a HIPAA law, although this law (and other laws designed to curb fraud, waste, and abuse) might apply to HIPAA covered entities.

Under Exclusion law, the Department of Health and Human Services’ Office of Inspector General (OIG) is required to exclude individuals and entities convicted of any of the following offenses from participation in all federal healthcare programs:

● Medicare or Medicaid fraud, as well as any other offenses related to the delivery of items or services under Medicare or Medicaid 

● Patient abuse or neglect 

● Felony convictions for other health care-related fraud, theft, or other financial misconduct 

● Felony convictions for unlawful manufacture, distribution, prescription, or dispensing controlled substances 

The OIG also may impose permissive exclusions on other grounds, including: 

● Misdemeanor convictions related to health care fraud other than Medicare or Medicaid fraud, or misdemeanor convictions for unlawfully manufacturing, distributing, prescribing, or dispensing controlled substances 

● Suspension, revocation, or surrender of a license to provide health care for reasons bearing on professional competence, professional performance, or financial integrity 

● Providing unnecessary or substandard services 

● Submitting false or fraudulent claims to a Federal health care program 

● Engaging in unlawful kickback arrangements 

● Defaulting on health education loan or scholarship obligations 

Excluded providers may not participate in the Federal healthcare programs for a designated period. If a provider is excluded by OIG, then Federal healthcare programs, including Medicare and Medicaid, will not pay for items or services that the provider furnish, order, or prescribe. Excluded providers may not bill directly for treating Medicare and Medicaid patients, and an employer or a group practice may not bill for an excluded provider’s services. At the end of an exclusion period, an excluded provider must seek reinstatement; reinstatement is not automatic. 

The OIG maintains a list of excluded parties called the List of Excluded Individuals/Entities (LEIE).

Additional Medicare Fraud, Waste and Abuse laws (FWA laws) can be found here.