Medicare Exclusions

Houston Medicare Exclusion Attorneys

Facing a Medicare OIG Exclusion in Texas?

Healthcare fraud and abuse allegations pose major consequences – from various expenses, lost productivity, and reputational harm associated with audits, investigations, and requests for document production to serious civil monetary penalties. Beyond that, providers who serve the Medicare and Medicaid population, or participate in any federally funded healthcare program, may face even greater repercussion – including Medicare exclusion.

Medicare exclusion is among the most devastating enforcement action taken by federal healthcare regulators. It can have an immediate impact on providers, and often precipitates additional termination from other federal and state health programs.

The Importance of Taking Immediate Action

If you have been notified of exclusion from Medicare, or of any healthcare regulatory enforcement action which creates exposure to exclusion, it is crucially important to get take a front-footed approach. That’s true of enforcement actions that long precede exclusion notices, or which seemingly don’t appear to threaten your practice and profession, including:

The importance of taking immediate action cannot be understated – there are strict deadlines for initiating a response and appeal, and high standards for prevailing and preserving your ability to participate in federal health programs. Your future may very well ride on your ability to get in form of these issues as immediately as possible.

Hendershot Cowart P.C. is a recognized Texas leader in healthcare law and fraud defense, including Medicaid and Medicare fraud. Our team is available immediately to help. Call (713) 909-7323 to speak with a lawyer.

On This Page

What is Exclusion?

Under Sections 1128 and 1156 of the Social Security Act, the Department of Health and Human Services’ (HHS) Office of Inspector General (OIG) has the power to exclude individuals and entities from federally funded healthcare programs, including Medicare. An exclusion prevents providers and suppliers, and anyone affiliated with them, from receiving any payment from the federal government for services or items they furnish, prescribe, or order.

OIG Exclusion Authority Explained

The U.S. Department of Health and Human Services’ Office of Inspect General (OIG) is the largest Inspector General’s office in the Federal Government, and it has far-reaching powers when it comes to enforcing healthcare laws, and conducting investigations involving fraud in federal healthcare programs, including Medicare and Medicaid. It also has the authority to impose exclusions, which prohibit participation in all federal healthcare programs, and are different than billing privilege revocations issued by the Centers for Medicare and Medicaid Services (CMS).

Medicare exclusion may arise from a number of investigatory and enforcement actions, and even from issues which aren’t related to healthcare. OIG investigations that put exclusion on the table can be trigged in a few common ways, and most notably by:

  • Whistleblower claims – One of the most common reasons providers are targeted by the OIG is because individuals viewed credibly enough by the federal government step forward to report fraud or suspicious conduct.
  • Red flags / investigations – The government is likely to become interested in your operations as a result of various audits and investigations which track and identify unusual patterns and practices involving billing, coding, and people associated with your business / practice.

Types of Medicare Exclusion

In addition to seeking civil monetary penalties (CMP), the OIG can also seek one of two types of exclusion against an individual or an entity. Each differs in the scope of prohibited conduct.

Mandatory Exclusions

The OIG is obligated by federal law to impose mandatory exclusions in matters involving individuals and entities convicted of certain crimes. These include:

  • Medicare or Medicaid fraud (and related offenses)
  • Patient neglect or abuse
  • Felony convictions involving healthcare fraud, theft, or financial misconduct
  • Felony convictions related to controlled substances
  • 2nd conviction for a mandatory exclusion offense (10-year minimum exclusion)
  • 3rd or subsequent offense for a mandatory exclusion offense (permanent exclusion)

Permissive Exclusions

Apart from mandatory exclusions, OIG has the discretion to impose permissive exclusions on many other grounds, including various healthcare-related grounds and those unrelated to the practice of medicine or healthcare. Examples may include:

  • Misdemeanor convictions involving healthcare fraud (other than Medicare)
  • Misdemeanor convictions related to controlled substances
  • Fraud involving any local, state, or federal program (other than healthcare)
  • Medical license suspension or revocation
  • Submitting false or fraudulent claims (False Claims Act)
  • Unlawful kickbacks (Anti-Kickback Statute violations)
  • Student loan defaults or failures to meet scholarship obligations
  • Control of a sanctioned entity (as management, owner, or officer)
  • Billing for services not rendered
  • Failures to take corrective action
  • Failure to provide medically necessary services

The Impact of Federal Program Exclusion

Medicare exclusion can have a devastating impact on you and your practice and is likely to result in a number of far-reaching repercussions, including:

  • Exclusion from all federally funded healthcare programs (Medicare, Medicaid, VA, Tricare, etc.)
  • Termination from Texas and other state Medicaid programs
  • Medical license suspensions or revocations
  • Loss of hospital privileges
  • Exclusion from health insurance provider panels
  • General Services Administration (GSA) exclusion from federal contracts

According to the OIG, the payment prohibition of Medicare exclusion not only applies to all federally funded healthcare programs, but to all methods of payment, all items and services performed by excluded individuals who switch professions or are employed by various federally funded healthcare businesses, and any administration or management service payable by federal health programs. In effect, Medicare exclusion is often a career-ending enforcement action.

Are There Any Exceptions?

Though exclusion can prevent individuals from federal health program participation as a provider, it does not bar affected individuals from receiving benefits under Medicare, Medicaid, or other federal health programs, such as the VA. In some cases, the OIG may grant a waiver to excluded providers which permit federal health program payment for certain services or items specifically named in the waiver. This may happen in cases where a provider is the only available one of their kind in a geographic area, in addition to other circumstances.

First Things First: Prevention and Proactive Planning

While your circumstances ultimately dictate the most appropriate approach and course of action, we must reiterate the invaluable power of proactive planning and prevention. That’s true if you’re here just learning about the potential ramifications of healthcare fraud investigations and potential consequences for not ensuring regulatory compliance, or if you’re reading this after issues arise:


Prevention is the best medicine, which is why we counsel many providers on matters inherent to setting up a medical practice, drafting medical contracts and various agreements, and creating comprehensive compliance plans.

Proactive Planning

Regardless of the origin of the investigation, what stage it may be at, or the depth of the practice’s involvement, taking a proactive approach is absolutely vital. That begins with fact-finding, establishing a rapport, credibility, and lines of communication with investigators, complying with requests or seeking consolations should they be excessively broad or burdensome, preparing for interviews, self-auditing and corrective actions, and overall organization.

Our goals are driven by proven defense strategies and simple objectives:

  1. Keeping cases civil, rather than criminal.
  2. Maintaining confidentiality and protecting reputation.
  3. Reaching good faith resolutions and negotiating fair outcomes.

Medicare Exclusions: Appeals and Reinstatement

Hendershot Cowart P.C. Represents Individuals and Entities Who:

  • Face audits, investigations, enforcement actions, and other matters which may potentially result in Medicare exclusion;
  • Have been notified by the OIG, the Texas OIG, CMS, or Texas Medical Foundation (TMF) that they are being considered for Medicare exclusion;
  • Have already been excluded from Medicare and / or other federal or state healthcare programs.

The OIG Medicare exclusion process is governed by special rules and procedures and allows for providers to appeal such decisions. How that process works depends on the context and nature of the underlying reason for exclusion, as well as the type of exclusion (mandatory or permissive), and whether the provider is an individual or an entity. Generally, the process involves:

  • Notice of Intent to Exclude– If you have received a Notice of Intent to Exclude (NOI), it does not necessarily mean you will be excluded. NOIs are “pre-decisional,” and the OIG will carefully consider any material you provide when making their determinations.
  • Written Response – A written response and any relevant information and evidence must be submitted within 30 days, which is why immediate and well-prepared strategy following receipt of a NOI is crucial. Responses may focus on whether proposed exclusion is warranted, and can raise other relevant issues, including any mitigating factors.
  • Oral Argument – In cases involving potential permissive exclusions, individuals and entities have the additional right to request a chance to present oral arguments before an OIG official before any decision about exclusion is made. Those individuals and entities still have the right to submit a response and relevant supporting information.

Notice of Exclusion

If the OIG has decided to implement an exclusion, it will send a Notice of Exclusion to the provider or entity. This may happen after you receive and respond to the NOI, or it may be the correspondence from the OIG in cases involving mandatory exclusions involving the mandatory minimum five-year period, as NOIs may not be sent in these cases. It is important to note that Medicare exclusions take effect 20 days after the NOE is mailed. In cases involving fraud, kickbacks and other prohibited activities (1128(b)(7)), a Notice of Proposal to Exclude may be sent instead.

You have the right to appeal the exclusion decision before an Administrative Law Judge (ALJ) by filing a written request for a hearing within 60 days. These requests may consist of:

  • Statements regarding specific issues regarding the exclusion;
  • A cited basis for disputing the OIG exclusion decision;
  • Reasons why the length of exclusion should be changes;
  • Reasons why, when applicable, the safety or health of beneficiaries receiving Medicare services doesn’t warrant immediate exclusion.

If you do not agree with the decision made by the Administrative Law Judge, you may appeal to the Department Appeals Board (DAB). Following a final decision from the DAB, judicial review in Federal court is also available.

Medicare Reinstatement

If you are successful in appealing a Medicare exclusion, you must seek reinstatement. Medicare reinstatement is not immediate nor automatic, and you cannot work with federal healthcare programs until you receive a notice of reinstatement.

  • Excluded providers with defined periods of exclusion can begin the process of applying for reinstatement within 90 days from the date their Medicare exclusion will expire.
  • In some cases, including indefinite exclusions, excluded provides may seek reinstatement when they have reinstated the license implicated in their exclusion, or when they obtain a differed medical license in the same state, any medical license in a new state, or have
  • Reinstatement requires providers to submit a written request, a statement, and complete of relevant forms. The process may take up to 120 days or more.
  • If the OIG denies reinstatement, providers will not be able to apply until 1 year has passed.

Again, it is important to remember that in order to regain your ability to participate in Medicare and other federally funded health programs, you must apply for reinstatement and be granted reinstatement by the OIG.

Why Hendershot Cowart P.C.

Hendershot Cowart P.C. has over 100 years of combined experience representing healthcare providers, including both individuals and entities, in a range of health and medical law matters with Texas state regulators and the federal government. If you have questions about any possible enforcement action which may subject you to exclusion, have received a NOI or Notice of Exclusion, or wish to seek reinstatement, our legal team is available to discuss your case and options immediately.

Medicare exclusions are high stakes and time-sensitive matters. Our firm is immediately available to help. Call (713) 909-7323 or contact us online now to speak with a lawyer.

Medicare Exclusions: Common Questions and Answers

How can I be at risk of Medicare exclusion?

The OIG has the authority to issue exclusions for many different reasons. Sometimes, federal law requires that certain conduct result in a mandatory exclusion ((1128(a)(1-4)). In others, the OIG has some discretion in issuing permissive exclusions ((1128(b)). How providers or suppliers end up facing exclusion under these statutes can also vary.

Examples of issues or enforcement actions which may expose providers to potential risks of exclusion include:

How long is the exclusion period?

Though every case is different and exclusion periods may vary, mandatory exclusions typically call for a minimum exclusion period of 5 years (with the exception of a second or subsequent offense). Permissive exclusions may have no mandatory minimum period of exclusion for certain grounds, a 1-year minimum exclusion period (for claims of excessive charges / unnecessary services), or a 3-year baseline period (typically for criminal misdemeanor convictions).

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