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Federal Exclusion Statute 42 U.S.C. § 1320a-7

WHAT IS THE FALSE CLAIMS Exclusion Statute - (42 U.S.C. § 1320a-7)

Failure to comply with the spider’s web of federal rules can result in the exclusion from participation in all Federal health care programs. This is controlled by 42 USC sections 1320a-7)


Some of the reasons for exclusion under 42 USC section 1320 are obvious. You will be excluded if you are convicted of:

1. Medicare or Medicaid fraud directly or indirectly for offenses that the government deems related to the delivery of products or services under Medicare or Medicaid.

2. Patient abuse or neglect which is a catch-all provision which requires careful analysis when either civil or criminal plea agreements are made.

3. Felony convictions for other health-care-related fraud, theft, or other financial misconduct.  This again is a catch-all and any medical billing professional or entity has to be very careful before entering into any criminal plea agreement.

4. Drug convictions (felonies) for the unlawful manufacture, distribution, prescription, or dispensing of controlled substances. 


However this is not the end of the government’s power. It has discretion to exclude individuals and entities on several other grounds, including misdemeanor convictions related to health care fraud other than Medicare or Medicaid fraud.

Drug convictions can reappear even if they are reduced to misdemeanors. Misdemeanor convictions in connection with the unlawful manufacture, distribution, prescription, or dispensing of controlled substances can be used against you. Worse, convictions that are sealed and vacated under state law may still be used against you.


Exclusion from Federal health care programs wipes out reimbursement from Medicare, Medicaid, TRICARE, the Veterans Health Administration and other federal health reimbursement systems.  But it gets worse. Not only is there a bar to direct billing directly for treating Medicare and Medicaid patients, there is a bar on indirect billing via an employer or a group practice. It doesn’t stop there. The patient can choose to pay out of pocket but no order or prescription for outside services or products can be reimbursed to the patient