Sanctions, Exclusions and the Medicare Preclusion List

Some network denials have nothing to do with how many providers a plan needs. If the letter mentions exclusion, the preclusion list, debarment or Medicare opt-out, the plan is following a federal bar it is not allowed to waive. Arguing access needs or asking for a panel exception will not help. What helps is either proving the match is wrong or fixing the status at its source.

We separate these cases on intake for exactly that reason: they are not disputes with the plan, and in most of them the right professional is a healthcare attorney.

Which federal bars stop a plan from contracting with you?

• OIG exclusion. Exclusions apply across "Medicare, Medicaid and any of the other Federal health care programs" (42 CFR 1001.1901(a)). No federal program payment, including Medicare Advantage and Part D, is made for items or services an excluded person furnishes during the exclusion (1001.1901(b)(1)). Medicare Advantage plans must document compliance with the bar on contracting with excluded individuals (42 CFR 422.204(b)(4)), and Medicaid managed care plans "may not employ or contract with providers excluded from participation" (42 CFR 438.214(d)(1)).
• Medicare opt-out. Section 422.204(b)(4) also requires Medicare Advantage plans to comply with the rules on physicians and practitioners who opt out of Medicare.
• The CMS preclusion list. A Medicare Advantage plan "must not make payment for a health care item, service, or drug that is furnished, ordered, or prescribed by an individual or entity that is included on the preclusion list" (42 CFR 422.222(a)(1)(i)), and must follow a documented process to comply (422.204(c)).

Plan credentialing policies reflect this. One Louisiana Medicaid plan's credentialing policy states that a current Medicare or Medicaid exclusion means the file "will be administratively declined for participation." There is no committee review for that outcome.

Who ends up on the preclusion list?

The definition in 42 CFR 422.2 covers three groups:

1. Providers currently revoked from Medicare (for a reason other than a felony under 424.535(a)(3)), currently under a reenrollment bar, whose underlying conduct CMS finds "detrimental to the best interests of the Medicare program."
2. People never enrolled in Medicare who engaged in conduct for which CMS could have revoked them, again with a detriment finding.
3. Anyone convicted of a felony within the previous 10 years that CMS deems detrimental, whether or not they were ever enrolled.

Under 422.222(a)(5), a revoked provider stays on the list for the same length of time as the reenrollment bar, a felony listing generally lasts 10 years from the conviction, and an OIG-excluded person stays on until the later of the preclusion period or OIG reinstatement.

Can you challenge a preclusion listing?

Yes, and the timing works in your favor if you act fast. CMS must send written notice with the reason and your appeal rights (422.222(a)(2)(i)). Under 422.222(a)(3), you are added to the list only after either the 60-day period to request reconsideration expires with no request, or CMS denies your reconsideration. An OIG-excluded person is added on the exclusion date.

The appeal follows 42 CFR Part 498. Section 498.5(n) gives a right to reconsideration, then a hearing before an administrative law judge, then Departmental Appeals Board review. If the preclusion is based on a Medicare revocation and you received notice of both at once, you must request a joint reconsideration of both; separate requests are not allowed (498.5(n)(1)(ii)). The deadlines and evidence limits are in Medicare enrollment appeals beyond reconsideration.

CMS also has discretion not to list someone, or to remove them, if "exceptional circumstances exist regarding beneficiary access" (422.222(a)(6)). A documented access need, such as being the only provider of a specialty in a county, is relevant there.

How is an OIG exclusion appealed?

An excluded individual may request a hearing before an administrative law judge "only on the issues of whether" the basis for the exclusion exists and whether the length is unreasonable (42 CFR 1001.2007(a)(1)). The request is due within 60 days of receiving the notice of exclusion (1001.2007(b)). Under 42 CFR 1005.2(c), it must be in writing to the Departmental Appeals Board, signed by the petitioner or the petitioner's attorney, and sent by certified mail, with receipt presumed 5 days after the notice date. When the exclusion rests on a criminal conviction or another final adjudication, "the basis for the underlying conviction ... is not reviewable" in the exclusion appeal (1001.2007(d)).

This is a legal proceeding against the government. It belongs with a healthcare attorney.

Does an exclusion end automatically?

No. The OIG says, "Reinstatement of an excluded individual or entity is not automatic once the specified period of exclusion ends." You must apply and receive written notice that reinstatement was granted. Under 42 CFR 1001.3001(a)(1), most excluded parties may submit a written reinstatement request "only after the date specified in the notice of exclusion," and "obtaining a program provider number or equivalent does not reinstate eligibility." The OIG's reinstatement page says you may begin the process 90 days before the end of a defined exclusion period, and that earlier requests will not be considered.

Billing during an exclusion carries its own risk: 1001.1901(b)(4) states that submitting claims for services furnished during the exclusion can lead to civil money penalties and criminal liability, and may be a basis for denying reinstatement.

How does a new preclusion listing reach your patients?

For providers newly added to the list who are not OIG-excluded, Medicare Advantage plans must send advance written notice to affected members "no later than 30 days after the posting" of the updated list, make reasonable efforts to notify the provider when they receive a claim, and must not deny payment solely because of the listing during the 60 days after the member notice is sent (42 CFR 422.222(a)(1)(ii)). Payment denials based on the preclusion list "are not appealable by beneficiaries" (422.222(a)(4)). If you are listed, expect patient calls; if you are contesting the listing, the reconsideration should already be on file.

Does Medicaid follow the same lists?

Largely, and it adds its own. A state must deny or terminate Medicaid enrollment of a provider terminated by Medicare or another state's Medicaid or CHIP program who appears in the federal termination database (42 CFR 455.416(c)), and states must require their managed care plans to terminate any provider terminated from Medicare, Medicaid or CHIP (438.214(d)(2)). Some states keep their own exclusion lists as well, and plans check them. One Louisiana plan's credentialing policy lists "State Specific Exclusion Lists, as applicable" among its checks. A termination in one state can therefore close Medicaid doors elsewhere; see Medicaid enrollment denials and provider appeals.

What if the plan matched the wrong person?

This is the case where we are most useful. Exclusion and preclusion screening is name-based in many systems, and common names produce false matches. If a plan denied you for a listing that belongs to someone else, the remedy is a correction request to the plan with proof of identity: your NPI, license numbers, date of birth where appropriate, and the distinguishing data from the listed record. Ask the plan to rerun the check and confirm the result in writing.

The same goes for owners and staff. If the bar comes from someone in your practice, Medicare's rules allow reversal of a denial when you end the relationship within 30 days of the denial (42 CFR 424.530(c)) and of a revocation within 15 days (424.535(e)). A plan will typically want proof that the person is gone.

How do you keep this from happening again?

State Medicaid agencies must check the OIG exclusion list and the Excluded Parties List System at least monthly (42 CFR 455.436(c)(2)), and many plans monitor continuously. Run your own checks on everyone in the practice before they start and on a schedule after. Our sister service covers that routine in NPDB, OIG and SAM monitoring.

What do we do in these cases?

We do not dispute exclusions or preclusion listings, and we cannot lift them. In a Network Rejection Review ($249), we confirm whether the plan's denial rests on a real federal bar or a mismatch. If it is a mismatch, a Payer Network Dispute ($799) covers preparing the correction request and identity package, which you sign and send to the plan. If the bar is real, we tell you so in writing, list the deadlines that apply, and recommend a healthcare attorney for the exclusion hearing, preclusion appeal or reinstatement. Details are on our pricing page.