How Doctors Are Hurt by the Federal Exclusion Statute (42 U.S.C. § 1320a-7)

The Exclusion Statute empowers the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) to bar individuals and entities from participating in Medicare, Medicaid, and all other federal healthcare programs.

Exclusion is one of the government’s strongest enforcement tools against fraud, abuse, and patient harm. Once excluded, no federal program will pay for any items or services you furnish, order, or prescribe — even if provided by someone else under your direction.

The statute will destroy your career.  You need immediate expert legal assistance if exclusion is even a remote possibility.

Here is how the OIG describes the statute:

"HHS-OIG can exclude individuals and entities from Federally funded health care programs for a variety of reasons, including a conviction for Medicare or Medicaid fraud. Those that are excluded can receive no payment from Federal health care programs for any items or services they furnish, order, or prescribe. This includes those that provide health benefits funded directly or indirectly by the United States (other than the Federal Employees Health Benefits Plan)."  (OIG Website)

The Horowitz Law Firm is a physician focused law firm that provides aggressive and effective defense of healthcare fraud charges.

See our Webpage on Healthcare Fraud

Mandatory vs. Permissive Exclusions: Grounds That Put Physicians at Risk

Mandatory Exclusions (Minimum 5 years, often permanent for repeat offenses):

• Conviction of a criminal offense related to the delivery of a healthcare item or service under Medicare or a state healthcare program.
• Conviction relating to patient abuse or neglect.
• Felony conviction related to healthcare fraud, theft, embezzlement, or financial misconduct in any federal, state, or local healthcare program (post-1996).
• Felony conviction related to the unlawful manufacture, distribution, prescription, or dispensing of controlled substances.

Permissive Exclusions (OIG has discretion):

• Misdemeanor convictions involving fraud, abuse, or financial misconduct.
• License revocation, suspension, or surrender by a state medical board.
• Claims for unnecessary or substandard services.
• Failure to repay overpayments or defaults on Health Education Assistance Loans.
• Engaging in prohibited kickback arrangements or Stark Law violations.
• Obstruction of audits or investigations.

For physicians, common triggers include billing irregularities, improper prescribing of controlled substances, relationships with excluded entities, or failing to properly supervise staff.

Federal Exclusion Statute for Physicians: 42 U.S.C. § 1320a-7 – What California Doctors Must Know to Protect Their License, Practice, and Medicare Participation

As a physician practicing in California, especially in the Bay Area (Lafayette, Walnut Creek, Pleasant Hill, or Contra Costa County), one of the most severe threats to your career is exclusion from federal healthcare programs under the Federal Exclusion Statute (42 U.S.C. § 1320a-7).

Being placed on the Office of Inspector General’s (OIG) List of Excluded Individuals and Entities (LEIE) can effectively end your ability to treat Medicare or Medicaid patients, destroy your revenue stream, and lead to cascading consequences like loss of hospital privileges, state license actions, and malpractice insurance issues.

At the Horowitz Law Group in Lafayette, California, we specialize in defending physicians against exclusion actions, False Claims Act investigations, and related healthcare fraud matters. Early intervention by an experienced healthcare defense attorney can often prevent or minimize exclusion.

Devastating Consequences of OIG Exclusion for Doctors

Exclusion is often career-ending for physicians:

• Immediate loss of Medicare/Medicaid reimbursement — The vast majority of a typical medical practice’s revenue.
• No payment for services you order — Including lab tests, imaging, prescriptions, or referrals.
• Risk to your entire practice — Employing or contracting with an excluded individual can trigger civil monetary penalties (CMPs) of up to $10,000–$20,000 per claim, plus repayment of amounts paid and potential exclusion of the practice itself.
• State-level ripple effects — Automatic or parallel actions by the Medical Board of California, loss of Medi-Cal participation, and hospital privilege revocation.
• Professional reputation damage — Public listing on the LEIE database, which patients, hospitals, and insurers can easily search.
• Difficulty obtaining malpractice insurance or joining provider networks.

Even temporary exclusion can lead to financial ruin and long-term barriers to reinstatement.

How Practices Can Avoid Exclusion Liability

Physicians and medical groups must proactively screen all employees, contractors, vendors, and referring physicians against the LEIE and state exclusion lists (including California’s Medi-Cal Suspended and Ineligible Provider List).

Routine screening, robust compliance programs, and immediate action upon discovering potential issues are essential. Failure to screen can itself result in significant penalties.

If You Receive an OIG Exclusion Notice or Are Under Investigation

Do not ignore a letter from the OIG. You have the right to appeal and present evidence. Timely, strategic legal representation significantly improves outcomes — whether negotiating a shorter exclusion period, seeking reinstatement, or defending against underlying allegations.

The Horowitz Law Group has deep experience representing physicians in exclusion proceedings, Medical Board matters, healthcare fraud defense, and related federal investigations throughout California.

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Why Bay Area Physicians Choose Horowitz Law Group

• Physician-focused defense — Led by Daniel Horowitz, an attorney with decades of experience protecting doctors in complex healthcare fraud, licensing, and exclusion cases.
• Local Bay Area presence — Conveniently located in Lafayette, California, serving Contra Costa County and the entire state.
• Proven track record — Aggressive advocacy in federal investigations, OIG matters, and parallel state proceedings.
• Comprehensive support — Handling interconnected issues involving the False Claims Act, Anti-Kickback Statute, Stark Law, and Medical Board accusations.

Protect Your Medical Career – Contact a Trusted Exclusion Defense Attorney Today

If you or your practice is facing potential exclusion, a federal investigation, or concerns about compliance with 42 U.S.C. § 1320a-7, do not wait. Early intervention is critical.

Call the Horowitz Law Group at 925-291-5388 for a confidential consultation. We serve physicians across Lafayette, Walnut Creek, the East Bay, and all of California.

Don’t let an exclusion notice derail your life’s work. Let our experienced team fight to protect your license, your practice, and your reputation.