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U.S. Code as of:
01/19/04
Section 1320a-7. Exclusion of certain individuals and entities from participation in Medicare and State health care programs
(a) Mandatory exclusion
The Secretary shall exclude the following individuals and
entities from participation in any Federal health care program (as
defined in section 1320a-7b(f) of this title):
(1) Conviction of program-related crimes
Any individual or entity that has been convicted of a criminal
offense related to the delivery of an item or service under
subchapter XVIII of this chapter or under any State health care
program.
(2) Conviction relating to patient abuse
Any individual or entity that has been convicted, under Federal
or State law, of a criminal offense relating to neglect or abuse
of patients in connection with the delivery of a health care item
or service.
(3) Felony conviction relating to health care fraud
Any individual or entity that has been convicted for an offense
which occurred after August 21, 1996, under Federal or State law,
in connection with the delivery of a health care item or service
or with respect to any act or omission in a health care program
(other than those specifically described in paragraph (1))
operated by or financed in whole or in part by any Federal,
State, or local government agency, of a criminal offense
consisting of a felony relating to fraud, theft, embezzlement,
breach of fiduciary responsibility, or other financial
misconduct.
(4) Felony conviction relating to controlled substance
Any individual or entity that has been convicted for an offense
which occurred after August 21, 1996, under Federal or State law,
of a criminal offense consisting of a felony relating to the
unlawful manufacture, distribution, prescription, or dispensing
of a controlled substance.
(b) Permissive exclusion
The Secretary may exclude the following individuals and entities
from participation in any Federal health care program (as defined
in section 1320a-7b(f) of this title):
(1) Conviction relating to fraud
Any individual or entity that has been convicted for an offense
which occurred after August 21, 1996, under Federal or State law
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(A) of a criminal offense consisting of a misdemeanor
relating to fraud, theft, embezzlement, breach of fiduciary
responsibility, or other financial misconduct -
(i) in connection with the delivery of a health care item
or service, or
(ii) with respect to any act or omission in a health care
program (other than those specifically described in
subsection (a)(1) of this section) operated by or financed in
whole or in part by any Federal, State, or local government
agency; or
(B) of a criminal offense relating to fraud, theft,
embezzlement, breach of fiduciary responsibility, or other
financial misconduct with respect to any act or omission in a
program (other than a health care program) operated by or
financed in whole or in part by any Federal, State, or local
government agency.
(2) Conviction relating to obstruction of an investigation
Any individual or entity that has been convicted, under Federal
or State law, in connection with the interference with or
obstruction of any investigation into any criminal offense
described in paragraph (1) or in subsection (a) of this section.
(3) Misdemeanor conviction relating to controlled substance
Any individual or entity that has been convicted, under Federal
or State law, of a criminal offense consisting of a misdemeanor
relating to the unlawful manufacture, distribution, prescription,
or dispensing of a controlled substance.
(4) License revocation or suspension
Any individual or entity -
(A) whose license to provide health care has been revoked or
suspended by any State licensing authority, or who otherwise
lost such a license or the right to apply for or renew such a
license, for reasons bearing on the individual's or entity's
professional competence, professional performance, or financial
integrity, or
(B) who surrendered such a license while a formal
disciplinary proceeding was pending before such an authority
and the proceeding concerned the individual's or entity's
professional competence, professional performance, or financial
integrity.
(5) Exclusion or suspension under Federal or State health care
program
Any individual or entity which has been suspended or excluded
from participation, or otherwise sanctioned, under -
(A) any Federal program, including programs of the Department
of Defense or the Department of Veterans Affairs, involving the
provision of health care, or
(B) a State health care program,
for reasons bearing on the individual's or entity's professional
competence, professional performance, or financial integrity.
(6) Claims for excessive charges or unnecessary services and
failure of certain organizations to furnish medically necessary
services
Any individual or entity that the Secretary determines -
(A) has submitted or caused to be submitted bills or requests
for payment (where such bills or requests are based on charges
or cost) under subchapter XVIII of this chapter or a State
health care program containing charges (or, in applicable
cases, requests for payment of costs) for items or services
furnished substantially in excess of such individual's or
entity's usual charges (or, in applicable cases, substantially
in excess of such individual's or entity's costs) for such
items or services, unless the Secretary finds there is good
cause for such bills or requests containing such charges or
costs;
(B) has furnished or caused to be furnished items or services
to patients (whether or not eligible for benefits under
subchapter XVIII of this chapter or under a State health care
program) substantially in excess of the needs of such patients
or of a quality which fails to meet professionally recognized
standards of health care;
(C) is -
(i) a health maintenance organization (as defined in
section 1396b(m) of this title) providing items and services
under a State plan approved under subchapter XIX of this
chapter, or
(ii) an entity furnishing services under a waiver approved
under section 1396n(b)(1) of this title,
and has failed substantially to provide medically necessary
items and services that are required (under law or the contract
with the State under subchapter XIX of this chapter) to be
provided to individuals covered under that plan or waiver, if
the failure has adversely affected (or has a substantial
likelihood of adversely affecting) these individuals; or
(D) is an entity providing items and services as an eligible
organization under a risk-sharing contract under section 1395mm
of this title and has failed substantially to provide medically
necessary items and services that are required (under law or
such contract) to be provided to individuals covered under the
risk-sharing contract, if the failure has adversely affected
(or has a substantial likelihood of adversely affecting) these
individuals.
(7) Fraud, kickbacks, and other prohibited activities
Any individual or entity that the Secretary determines has
committed an act which is described in section 1320a-7a,
1320a-7b, or 1320a-8 of this title.
(8) Entities controlled by a sanctioned individual
Any entity with respect to which the Secretary determines that
a person -
(A)(i) who has a direct or indirect ownership or control
interest of 5 percent or more in the entity or with an
ownership or control interest (as defined in section
1320a-3(a)(3) of this title) in that entity,
(ii) who is an officer, director, agent, or managing employee
(as defined in section 1320a-5(b) of this title) of that
entity; or
(iii) who was described in clause (i) but is no longer so
described because of a transfer of ownership or control
interest, in anticipation of (or following) a conviction,
assessment, or exclusion described in subparagraph (B) against
the person, to an immediate family member (as defined in
subsection (j)(1) of this section) or a member of the household
of the person (as defined in subsection (j)(2) of this section)
who continues to maintain an interest described in such clause
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is a person -
(B)(i) who has been convicted of any offense described in
subsection (a) of this section or in paragraph (1), (2), or (3)
of this subsection;
(ii) against whom a civil monetary penalty has been assessed
under section 1320a-7a or 1320a-8 of this title; or
(iii) who has been excluded from participation under a
program under subchapter XVIII of this chapter or under a State
health care program.
(9) Failure to disclose required information
Any entity that did not fully and accurately make any
disclosure required by section 1320a-3 of this title, section
1320a-3a of this title, or section 1320a-5 of this title.
(10) Failure to supply requested information on subcontractors
and suppliers
Any disclosing entity (as defined in section 1320a-3(a)(2) of
this title) that fails to supply (within such period as may be
specified by the Secretary in regulations) upon request
specifically addressed to the entity by the Secretary or by the
State agency administering or supervising the administration of a
State health care program -
(A) full and complete information as to the ownership of a
subcontractor (as defined by the Secretary in regulations) with
whom the entity has had, during the previous 12 months,
business transactions in an aggregate amount in excess of
$25,000, or
(B) full and complete information as to any significant
business transactions (as defined by the Secretary in
regulations), occurring during the five-year period ending on
the date of such request, between the entity and any wholly
owned supplier or between the entity and any subcontractor.
(11) Failure to supply payment information
Any individual or entity furnishing items or services for which
payment may be made under subchapter XVIII of this chapter or a
State health care program that fails to provide such information
as the Secretary or the appropriate State agency finds necessary
to determine whether such payments are or were due and the
amounts thereof, or has refused to permit such examination of its
records by or on behalf of the Secretary or that agency as may be
necessary to verify such information.
(12) Failure to grant immediate access
Any individual or entity that fails to grant immediate access,
upon reasonable request (as defined by the Secretary in
regulations) to any of the following:
(A) To the Secretary, or to the agency used by the Secretary,
for the purpose specified in the first sentence of section
1395aa(a) of this title (relating to compliance with conditions
of participation or payment).
(B) To the Secretary or the State agency, to perform the
reviews and surveys required under State plans under paragraphs
(26), (31), and (33) of section 1396a(a) of this title and
under section 1396b(g) of this title.
(C) To the Inspector General of the Department of Health and
Human Services, for the purpose of reviewing records,
documents, and other data necessary to the performance of the
statutory functions of the Inspector General.
(D) To a State medicaid fraud control unit (as defined in
section 1396b(q) of this title), for the purpose of conducting
activities described in that section.
(13) Failure to take corrective action
Any hospital that fails to comply substantially with a
corrective action required under section 1395ww(f)(2)(B) of this
title.
(14) Default on health education loan or scholarship obligations
Any individual who the Secretary determines is in default on
repayments of scholarship obligations or loans in connection with
health professions education made or secured, in whole or in
part, by the Secretary and with respect to whom the Secretary has
taken all reasonable steps available to the Secretary to secure
repayment of such obligations or loans, except that (A) the
Secretary shall not exclude pursuant to this paragraph a
physician who is the sole community physician or sole source of
essential specialized services in a community if a State requests
that the physician not be excluded, and (B) the Secretary shall
take into account, in determining whether to exclude any other
physician pursuant to this paragraph, access of beneficiaries to
physician services for which payment may be made under subchapter
XVIII or XIX of this chapter.
(15) Individuals controlling a sanctioned entity
(A) Any individual -
(i) who has a direct or indirect ownership or control
interest in a sanctioned entity and who knows or should know
(as defined in section 1320a-7a(i)(6) (!1) of this title) of
the action constituting the basis for the conviction or
exclusion described in subparagraph (B); or
(ii) who is an officer or managing employee (as defined in
section 1320a-5(b) of this title) of such an entity.
(B) For purposes of subparagraph (A), the term "sanctioned
entity" means an entity -
(i) that has been convicted of any offense described in
subsection (a) of this section or in paragraph (1), (2), or (3)
of this subsection; or
(ii) that has been excluded from participation under a
program under subchapter XVIII of this chapter or under a State
health care program.
(c) Notice, effective date, and period of exclusion
(1) An exclusion under this section or under section 1320a-7a of
this title shall be effective at such time and upon such reasonable
notice to the public and to the individual or entity excluded as
may be specified in regulations consistent with paragraph (2).
(2)(A) Except as provided in subparagraph (B), such an exclusion
shall be effective with respect to services furnished to an
individual on or after the effective date of the exclusion.
(B) Unless the Secretary determines that the health and safety of
individuals receiving services warrants the exclusion taking effect
earlier, an exclusion shall not apply to payments made under
subchapter XVIII of this chapter or under a State health care
program for -
(i) inpatient institutional services furnished to an individual
who was admitted to such institution before the date of the
exclusion, or
(ii) home health services and hospice care furnished to an
individual under a plan of care established before the date of
the exclusion,
until the passage of 30 days after the effective date of the
exclusion.
(3)(A) The Secretary shall specify, in the notice of exclusion
under paragraph (1) and the written notice under section 1320a-7a
of this title, the minimum period (or, in the case of an exclusion
of an individual under subsection (b)(12) of this section or in the
case described in subparagraph (G), the period) of the exclusion.
(B) Subject to subparagraph (G), in the case of an exclusion
under subsection (a) of this section, the minimum period of
exclusion shall be not less than five years, except that, upon the
request of the administrator of a Federal health care program (as
defined in section 1320a-7b(f) of this title) who determines that
the exclusion would impose a hardship on individuals entitled to
benefits under part A of subchapter XVIII of this chapter or
enrolled under part B of such subchapter, or both, the Secretary
may, after consulting with the Inspector General of the Department
of Health and Human Services, waive the exclusion under subsection
(a)(1), (a)(3), or (a)(4) of this section with respect to that
program in the case of an individual or entity that is the sole
community physician or sole source of essential specialized
services in a community. The Secretary's decision whether to waive
the exclusion shall not be reviewable.
(C) In the case of an exclusion of an individual under subsection
(b)(12) of this section, the period of the exclusion shall be equal
to the sum of -
(i) the length of the period in which the individual failed to
grant the immediate access described in that subsection, and
(ii) an additional period, not to exceed 90 days, set by the
Secretary.
(D) Subject to subparagraph (G), in the case of an exclusion of
an individual or entity under paragraph (1), (2), or (3) of
subsection (b) of this section, the period of the exclusion shall
be 3 years, unless the Secretary determines in accordance with
published regulations that a shorter period is appropriate because
of mitigating circumstances or that a longer period is appropriate
because of aggravating circumstances.
(E) In the case of an exclusion of an individual or entity under
subsection (b)(4) or (b)(5) of this section, the period of the
exclusion shall not be less than the period during which the
individual's or entity's license to provide health care is revoked,
suspended, or surrendered, or the individual or the entity is
excluded or suspended from a Federal or State health care program.
(F) In the case of an exclusion of an individual or entity under
subsection (b)(6)(B) of this section, the period of the exclusion
shall be not less than 1 year.
(G) In the case of an exclusion of an individual under subsection
(a) of this section based on a conviction occurring on or after
August 5, 1997, if the individual has (before, on, or after August
5, 1997) been convicted -
(i) on one previous occasion of one or more offenses for which
an exclusion may be effected under such subsection, the period of
the exclusion shall be not less than 10 years, or
(ii) on 2 or more previous occasions of one or more offenses
for which an exclusion may be effected under such subsection, the
period of the exclusion shall be permanent.
(d) Notice to State agencies and exclusion under State health care
programs
(1) Subject to paragraph (3), the Secretary shall exercise the
authority under this section and section 1320a-7a of this title in
a manner that results in an individual's or entity's exclusion from
all the programs under subchapter XVIII of this chapter and all the
State health care programs in which the individual or entity may
otherwise participate.
(2) The Secretary shall promptly notify each appropriate State
agency administering or supervising the administration of each
State health care program (and, in the case of an exclusion
effected pursuant to subsection (a) of this section and to which
section 824(a)(5) of title 21 may apply, the Attorney General) -
(A) of the fact and circumstances of each exclusion effected
against an individual or entity under this section or section
1320a-7a of this title, and
(B) of the period (described in paragraph (3)) for which the
State agency is directed to exclude the individual or entity from
participation in the State health care program.
(3)(A) Except as provided in subparagraph (B), the period of the
exclusion under a State health care program under paragraph (2)
shall be the same as any period of exclusion under subchapter XVIII
of this chapter.
(B)(i) The Secretary may waive an individual's or entity's
exclusion under a State health care program under paragraph (2) if
the Secretary receives and approves a request for the waiver with
respect to the individual or entity from the State agency
administering or supervising the administration of the program.
(ii) A State health care program may provide for a period of
exclusion which is longer than the period of exclusion under
subchapter XVIII of this chapter.
(e) Notice to State licensing agencies
The Secretary shall -
(1) promptly notify the appropriate State or local agency or
authority having responsibility for the licensing or
certification of an individual or entity excluded (or directed to
be excluded) from participation under this section or section
1320a-7a of this title, of the fact and circumstances of the
exclusion,
(2) request that appropriate investigations be made and
sanctions invoked in accordance with applicable State law and
policy, and
(3) request that the State or local agency or authority keep
the Secretary and the Inspector General of the Department of
Health and Human Services fully and currently informed with
respect to any actions taken in response to the request.
(f) Notice, hearing, and judicial review
(1) Subject to paragraph (2), any individual or entity that is
excluded (or directed to be excluded) from participation under this
section is entitled to reasonable notice and opportunity for a
hearing thereon by the Secretary to the same extent as is provided
in section 405(b) of this title, and to judicial review of the
Secretary's final decision after such hearing as is provided in
section 405(g) of this title, except that, in so applying such
sections and section 405(l) of this title, any reference therein to
the Commissioner of Social Security or the Social Security
Administration shall be considered a reference to the Secretary or
the Department of Health and Human Services, respectively.
(2) Unless the Secretary determines that the health or safety of
individuals receiving services warrants the exclusion taking effect
earlier, any individual or entity that is the subject of an adverse
determination under subsection (b)(7) of this section shall be
entitled to a hearing by an administrative law judge (as provided
under section 405(b) of this title) on the determination under
subsection (b)(7) of this section before any exclusion based upon
the determination takes effect.
(3) The provisions of section 405(h) of this title shall apply
with respect to this section and sections 1320a-7a, 1320a-8, and
1320c-5 of this title to the same extent as it is applicable with
respect to subchapter II of this chapter, except that, in so
applying such section and section 405(l) of this title, any
reference therein to the Commissioner of Social Security shall be
considered a reference to the Secretary.
(g) Application for termination of exclusion
(1) An individual or entity excluded (or directed to be excluded)
from participation under this section or section 1320a-7a of this
title may apply to the Secretary, in the manner specified by the
Secretary in regulations and at the end of the minimum period of
exclusion provided under subsection (c)(3) of this section and at
such other times as the Secretary may provide, for termination of
the exclusion effected under this section or section 1320a-7a of
this title.
(2) The Secretary may terminate the exclusion if the Secretary
determines, on the basis of the conduct of the applicant which
occurred after the date of the notice of exclusion or which was
unknown to the Secretary at the time of the exclusion, that -
(A) there is no basis under subsection (a) or (b) of this
section or section 1320a-7a(a) of this title for a continuation
of the exclusion, and
(B) there are reasonable assurances that the types of actions
which formed the basis for the original exclusion have not
recurred and will not recur.
(3) The Secretary shall promptly notify each appropriate State
agency administering or supervising the administration of each
State health care program (and, in the case of an exclusion
effected pursuant to subsection (a) of this section and to which
section 824(a)(5) of title 21 may apply, the Attorney General) of
the fact and circumstances of each termination of exclusion made
under this subsection.
(h) "State health care program" defined
For purposes of this section and sections 1320a-7a and 1320a-7b
of this title, the term "State health care program" means -
(1) a State plan approved under subchapter XIX of this chapter,
(2) any program receiving funds under subchapter V of this
chapter or from an allotment to a State under such subchapter,
(3) any program receiving funds under subchapter XX of this
chapter or from an allotment to a State under such subchapter, or
(4) a State child health plan approved under subchapter XXI of
this chapter.
(i) "Convicted" defined
For purposes of subsections (a) and (b) of this section, an
individual or entity is considered to have been "convicted" of a
criminal offense -
(1) when a judgment of conviction has been entered against the
individual or entity by a Federal, State, or local court,
regardless of whether there is an appeal pending or whether the
judgment of conviction or other record relating to criminal
conduct has been expunged;
(2) when there has been a finding of guilt against the
individual or entity by a Federal, State, or local court;
(3) when a plea of guilty or nolo contendere by the individual
or entity has been accepted by a Federal, State, or local court;
or
(4) when the individual or entity has entered into
participation in a first offender, deferred adjudication, or
other arrangement or program where judgment of conviction has
been withheld.
(j) Definition of immediate family member and member of household
For purposes of subsection (b)(8)(A)(iii) of this section:
(1) The term "immediate family member" means, with respect to a
person -
(A) the husband or wife of the person;
(B) the natural or adoptive parent, child, or sibling of the
person;
(C) the stepparent, stepchild, stepbrother, or stepsister of
the person;
(D) the father-, mother-, daughter-, son-, brother-, or
sister-in-law of the person;
(E) the grandparent or grandchild of the person; and
(F) the spouse of a grandparent or grandchild of the person.
(2) The term "member of the household" means, with respect to
any person, any individual sharing a common abode as part of a
single family unit with the person, including domestic employees
and others who live together as a family unit, but not including
a roomer or boarder.
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