42 U.S.C. § 1320a-7 : US Code - 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 -
       
          (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 or
        audit
        Any individual or entity that has been convicted, under Federal
      or State law, in connection with the interference with or
      obstruction of any investigation or audit related to - 
          (i) any offense described in paragraph (1) or in subsection
        (a); or
          (ii) the use of funds received, directly or indirectly, from
        any Federal health care program (as defined in section 1320a-
        7b(f) of this title).
      (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 -
         

      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, ordering, referring for
      furnishing, or certifying the need for 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.
      (16) Making false statements or misrepresentation of material
        facts
        Any individual or entity that knowingly makes or causes to be
      made any false statement, omission, or misrepresentation of a
      material fact in any application, agreement, bid, or contract to
      participate or enroll as a provider of services or supplier under
      a Federal health care program (as defined in section 1320a-7b(f)
      of this title), including Medicare Advantage organizations under
      part C of subchapter XVIII, prescription drug plan sponsors under
      part D of subchapter XVIII, medicaid managed care organizations
      under subchapter XIX, and entities that apply to participate as
      providers of services or suppliers in such managed care
      organizations and such plans.
    (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 beneficiaries (as defined
    in section 1320a-7a(i)(5) of this title) of that program, 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.
      (4) The provisions of subsections (d) and (e) of section 405 of
    this title shall apply with respect to this section to the same
    extent as they are applicable with respect to subchapter II. The
    Secretary may delegate the authority granted by section 405(d) of
    this title (as made applicable to this section) to the Inspector
    General of the Department of Health and Human Services for purposes
    of any investigation under this section.
    (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 division A (!2) of
      subchapter XX of this chapter or from an allotment to a State
      under such division, 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.