Payment Default Results in Exclusion from Federal Healthcare Programs
The Department of Health and Human Services’ Office of Inspector General has recently announced three new additions to the HHS-OIG exclusion list for defaulting on payment obligations.
The OIG exclusion list, otherwise known as the List of Excluded Individuals and Entities (LEIE), is a register of individuals and entities that have been prohibited from participating in federally funded healthcare programs. There are many reasons why HHS-OIG may choose to add an individual or entity to the exclusion list. Common reasons for mandatory exclusion are convictions for Medicare or Medicaid fraud, patient abuse or neglect, felony convictions related to controlled substances, and financial misconduct related to the provision of healthcare services.
In addition, HHS-OIG has the authority to exclude individuals and entities for other reasons. There are numerous reasons for these “permissive exclusions,” such as misdemeanor fraud convictions, participation in illegal kickback schemes, false healthcare claim submissions, and license revocation or suspension.
OIG compliance is vital for healthcare organizations, as exclusion can be costly. Excluded companies and individuals are prohibited from participation in Medicare and Medicaid programs, and HHS-OIG can also impose substantial financial penalties. Exclusion can also result in significant reputation damage. There are also significant financial penalties for healthcare organizations and individuals who employ an individual or engage the services of a company on the exclusion list, if that individual or company provides items or services that are billed to federally funded healthcare programs.
HHS OIG Exclusions List
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Employing an excluded individual could also result in the individual or entity employing an excluded individual or entity also being added to the exclusion list. Prior to onboarding any new employee or company, healthcare organizations and other individuals who participate in federal programs must check the HHS-OIG exclusion list. It is also strongly advisable to perform monthly checks of the list to ensure that any current employees or suppliers have not been added to the list since they were onboarded.
In March 2025, HHS-OIG announced that Assure Holdings and Assure Neuromonitoring had been added to the exclusion list. These entities had previously entered into a settlement agreement with the Department of Justice (DoJ) and HHS-OIG after being determined to have paid improper remuneration to surgeons through joint venture companies to induce them to order interoperative neuromonitoring services from Assure. The exclusion is for an indefinite period of time. HHS-OIG will remove the companies when it is satisfied that the default of their payment obligations under the settlement agreement has been adequately cured.
Alex De Jesus, MD, of San Antonio, TX, was also added to the exclusion list for defaulting on payment obligations under a settlement agreement with the DoJ and HHS-OIG. In his case, the settlement agreement resolved allegations of submitting false claims and receiving kickbacks. Claims were submitted for auricular electro-acupuncture devices such as the STIVAX device; however, the claims were submitted for Healthcare Common Procedure Coding System (HCPCS) codes such as L8679, which did not qualify for reimbursement as they were not neurostimulators. Dr. De Jesus was also determined to have received kickbacks for prescribing compounded medications. Dr. De Jesus has also been added to the exclusion list for an indefinite period and will be removed when HHS-OIG is satisfied that he has cured the default of his payment obligations under the settlement agreement.
