What happens when a provider employs an excluded individual

Published 2026-09-15. Sources are linked where each rule is quoted.

Exclusion screening exists because of one rule and its enforcement. This article describes both as HHS-OIG states them, links the documents, and stays out of the question of what your organization should do in a given case, which is yours and your counsel's.

The payment prohibition

HHS-OIG's 2013 Special Advisory Bulletin states the core rule: no federal health care program payment may be made for any item or service furnished, ordered or prescribed by an excluded individual or entity. The bulletin is explicit that this reaches beyond direct patient care to administrative and management services, and to items or services furnished at the medical direction or on the prescription of an excluded person, when the provider knew or should have known of the exclusion.

The practical consequence the bulletin draws is that a provider employing an excluded person may be submitting claims that are not payable, and that amounts paid on such claims are overpayments.

Civil monetary penalties and assessments

The same bulletin describes OIG's civil monetary penalty authority under section 1128A(a)(6) of the Social Security Act for providers that employ or contract with an excluded person: a penalty for each item or service furnished by the excluded person, an assessment of up to three times the amount claimed for those items or services, and possible exclusion of the provider itself. The per-item penalty amount in the statute is adjusted for inflation and published in the Code of Federal Regulations; the bulletin quotes the pre-adjustment figure.

OIG publishes its enforcement actions, including civil monetary penalty settlements with providers that employed excluded individuals, and describes its self-disclosure protocol for providers that discover they have done so.

Knew or should have known

The bulletin frames liability around whether the provider knew or should have known of the exclusion, and it points to LEIE screening as the way a provider learns. That is why documented screening matters twice over: it is how you find an excluded person, and it is the record of the diligence you exercised. The bulletin also discusses the case where an excluded person is found on staff, including the self-disclosure route; what a specific organization should do in that situation is a decision for it and its counsel, not something a screening tool can answer.

What screening records need to show

Read against the bulletin, a useful screening record shows which lists were checked, when, against which published version, every potential match the check produced, and how each was resolved and by whom. A count of zero without the rest proves little, because it cannot be distinguished from a search that was never run or ran against a stale copy of the list.