DEPARTMENT OF HEALTH & HUMAN SERVICES 	 Office of Inspector General 

Washington, D.C. 20201 

flAY IS 20tO 

TO: Marilyn TavelUler 

Acting Administrator and ChiefOperating Officer 

Centers for Medicare & Medicaid Services 

FROM: Stuart Wright 

Deputy Inspector General 

for Evaluation and Inspections 

SUBJECT: 	 Memorandum Report: Excluded Medicaid Providers: Analysis of 

Enroliment,OEI-09-08-00330 ­

This memorandum report provides information on the enrollment of selected Medicaid 

providers that the Office oflnspector General (OIG) later excluded from participation in 

Federal health care programs. Our review included 188 Medicaid providers from 

26 States that OIG excluded between January 1, 2007, and June 30, 2008. Specifically, 

we examined the providers' backgrounds before and after they enrolled to gather 

information related to potential weaknesses in States' provider enrollment procedures. 

For example, we reviewed the providers' backgrounds to determine whether providers 

with questionable financial and criminal histories gained entry into Medicaid. 

Twenty-four out 0 f 188 excluded providers had a history oftax debt, criminal 

convictions, or false disclosures before they enrolled. 

States must comply with Federal regulations at 42 CFR § 455.104 and 42 CFR § 455.106, 

which require States to collect specific information from providers. States require 

providers to disclose information on ownership and control of an entity and criminal 

convictions related to Federal health care programs. The regulations do not require States 

to verify this information, although States may impose additional enrollment 

requirements. According to the Centers for Medicare & Medicaid Services' (CMS) 

Medicaid Integrity Group (MIG), 18 out ofthe 19 States it reviewed in fiscal years 

2007 and 2008 did not collect the required information related to ownership, and 17 out 

of 19 States did not comply with the Federal disclosure requirement for criminal 

convictions. 

OEI-09-0B-00330 Excluded Medicaid Providers: Analysis ofEnrollment 
Page 2 – Marilyn Tavenner 

 

Based on our review of 188 excluded providers and the policies and procedures of the 

26 States that enrolled them, we found: 

 Eight providers disclosed false information about ownership at the time of 

enrollment, 

 States impose few enrollment requirements beyond those mandated by Federal 

regulations, and 

 Current regulations do not require disclosure of nonprogram-related convictions 

or tax liens. 

 

BACKGROUND 

Medicaid is an entitlement program for eligible low-income and medically needy people. 

In fiscal year 2009, Medicaid covered 59 million people nationally at a cost of 

$372 billion (Federal and State expenditures).1

 States spent $20 billion,2 or 5 percent of 

this amount, on program administration, which includes provider enrollment. The 

Federal Government paid for 50 percent of States’ administrative costs.3 

Medicaid Provider Enrollment 

The Federal Government prescribes requirements for provider enrollment. Providers 

must disclose (1) all persons with an ownership interest of 5 percent or more in a 

disclosing entity and (2) criminal convictions related to Federal health care programs.4 

(Appendix A contains additional information on these Federal disclosure requirements.) 

States must collect specific information from providers, but are not required to verify the 

accuracy of providers’ disclosures when entering into or renewing a provider agreement. 

However, States may impose additional requirements to improve the screening of 

potential providers. 

Although States must collect information about ownership and program-related 

convictions, they vary in the other information that they collect from providers and the 

procedures that providers must follow to enroll in the Medicaid program. These 

procedures may include criminal background checks, site visits, probationary enrollment, 

and reenrollment.5

 Criminal background checks range from checks of State databases to 

a national check by the Federal Bureau of Investigation (FBI). Site visits are inspections, 

typically for certain high-risk provider types, such as durable medical equipment (DME) 

and transportation providers. Probationary enrollment is time-limited enrollment for 

1

 CMS, CMS Financial Report, Fiscal Year 2009. Accessed at 

http://www.cms.hhs.gov/CFOReport/Downloads/2009_CMS_Financial_Report.pdf on February 3, 2010. 2

 Ibid. 

3

 42 CFR § 433.15(b)(7). 

4

 42 CFR §§ 455.104 and 455.106. 

5

 U.S. Government Accountability Office (GAO), Medicaid Program Integrity: State and Federal Efforts 

to Prevent and Detect Improper Payments (GAO-04-707), July 2004, pp. 8–11. 

OEI-09-08-00330 Excluded Medicaid Providers: Analysis of Enrollment 

 
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nd 

 

certain providers, such as nonemergency transportation providers. Reenrollment is a 

process in which providers reapply to Medicaid at specific intervals. 

Medicaid Integrity Group 

Since 2006, MIG has assessed States’ compliance with Federal requirements for provider 

enrollment. MIG performs this function by conducting onsite reviews of States’ program 

integrity operations once every 3 years. In addition to assessing compliance with Federal 

laws and regulations, the reviews (1) identify vulnerabilities and effective practices, (2) 

help States improve program integrity, and (3) identify opportunities for CMS to provide 

technical assistance to States.6

 After each review, MIG issues a report to the State. 

According to MIG, 18 out of the 19 States it reviewed in fiscal years 2007 and 2008 did 

not comply with the Federal disclosure requirement for ownership (42 CFR § 455.104), 

and 17 out of 19 did not comply with the Federal disclosure requirement for criminal 

convictions (42 CFR § 455.106).7

MIG’s comprehensive plan for fiscal years 2009 to 2013 proposes to strengthen provider 

enrollment by developing a joint enrollment system with Medicare, known as the 

Uniform Provider Enrollment Project (UPEP).8 The objective of the UPEP is to develop 

and implement a secure, centralized provider enrollment system that would meet both 

Medicare and Medicaid requirements. This system would include a Web-based 

application for providers and a national provider file that would include information 

about ownership, disciplinary actions by licensing boards, and terminations. 

Exclusion From Federal Health Care Programs 

Since 1977, the Secretary of Health & Human Services has had the authority to exclude 

certain individuals and entities from Medicare and Medicaid.9 Pursuant to this authority, 

between January 1, 2007, and June 30, 2008, OIG excluded a total of 4,991 individuals 

and entities. Exclusions can be mandatory or permissive. Mandatory exclusions are 

required by law, and permissive exclusions are imposed at the discretion of OIG. For 

example, a provider convicted of a program-related crime must be excluded; a provider 

whose license was revoked or suspended may be excluded. 

An excluded provider cannot bill or cause bills to be submitted to any Federal health care 

program for direct or indirect services or for any administrative or management 

services.10 In addition, an excluded provider may be debarred from all Federal grants 

a

6

 CMS, Medicaid Integrity Program, Program Integrity Review Annual Summary, May 2009. Accessed at 

http://www.cms.hhs.gov/FraudAbuseforProfs/Downloads/2009pireviewannualsummaryreport.pdf on 

July 15, 2009. 

7

 Ibid. 

8

 CMS, Center for Medicaid and State Operations, MIG, Comprehensive Medicaid Integrity Plan of the 

Medicaid Integrity Program, FYs 2009–2013, July 2009, p. 10. 9

 Social Security Act, § 1128, 42 U.S.C. § 1320a-7. 

10 OIG Special Advisory Bulletin: The Effect of Exclusion from Participation in Federal Health Care 

Programs. September 1999. 

OEI-09-08-00330 Excluded Medicaid Providers: Analysis of Enrollment 

 
Page 4 – Marilyn Tavenner 

blic 

l 

roviders also is included in the Healthcare Integrity and Protection Data Bank (HIPDB). 

viders 

n-depth investigation and found abusive and criminal activity, including 

aud.13 

s.

14 The program has resulted in 

onvictions and prison sentences for the defendants. 

nd found 

mong States and identified systemic weaknesses, including the lack of verification of 

 

contracts.11 However, an excluded provider may bill and receive payment for certain

emergency services. The current bases for mandatory exclusion include convictions 

related to program-related fraud, patient abuse and neglect, nonprogram-related health 

care fraud, and controlled substances. Bases for permissive exclusions include licensing 

board actions and defaults on Health Education Assistance Loans (HEAL).12 Exclusion

has national effect and applies even if the provider obtains another license or moves to 

another State. OIG maintains a List of Excluded Individuals/Entities (LEIE) on its pu

Web site. OIG’s exclusions also are listed on the General Services Administration’s

publicly searchable Web site of all individuals and entities debarred by any Federa

agency, known as the Excluded Parties List System. Information about excluded 

p

Federal Tax Debt and the Link to Fraud 

Research suggests a correlation between tax debt and fraud. For example, in 2007, GAO 

reported that over 30,000 Medicaid providers, about 5 percent of those paid in fiscal year 

2006, owed a total of over $1 billion in unpaid Federal taxes. GAO selected 25 pro

for more i

fr

In 2003, the Los Angeles County Office of the District Attorney established the Fraud 

Interdiction Program. When the District Attorney’s Office identifies a health care fraud 

suspect, it collects reimbursement data from a variety of public and private payers, such

as insurance companies, and sends the information to the State of California Franchise 

Tax Board. If the suspect failed to file or pay State income taxes, the Tax Board reports

the information to the District Attorney’s Office, which files felony tax charges. Since

the program began, it has identified more than 200 suspects who were responsible for 

more than $300 million in fraudulent health care claim

c

Related Work 

Both OIG and GAO have identified vulnerabilities in Medicaid provider enrollment. In a 

2006 report, OIG reviewed Medicaid enrollment standards for DME providers a

that most of the 15 States it reviewed did not verify whether providers met the 

standards.15 In a 2001 report, OIG examined credentialing and enrollment policies 

a

11 Federal Acquisition Streamlining Act of 1994, P.L. 103-355, § 2455; 31 U.S.C. § 6101; 45 CFR 76.115. 

12 From fiscal year 1978 through 1998 the Federal HEAL Program insured loans made by participating 

lenders to eligible graduate students in schools of medicine, osteopathy, dentistry, veterinary medicine, 

optometry, podiatry, public health, pharmacy, chiropractic, and clinical psychology; or in programs in 

health administration. 

13 GAO, Thousands of Medicaid Providers Abuse the Federal Tax System, November 2007, cover page. 14 The Bureau of National Affairs, Health Care Fraud Report, Vol. 12, No. 17, August 13, 2008. 15 OIG, Medicaid Provider Enrollment Standards: Medical Equipment Providers, October 2006 

(OEI-04-05-00180). 

OEI-09-08-00330 Excluded Medicaid Providers: Analysis of Enrollment 

 
Page 5 – Marilyn Tavenner 

y into 

 GAO, both programs rely heavily on 

roviders’ honesty rather than verification.19

ETHODOLOGY 

y 

ers’ 

pplications, and 

ssessed States’ procedures to enroll providers as of September 2008. 

mber 

 we could not determine the exact number of 

edicaid providers that had been excluded. 

E 

 

providers’ disclosures.16 In 2004, GAO issued a report that identified successes and

limitations of State and Federal efforts to control Medicaid fraud and abuse. GAO 

described States’ measures to tighten enrollment.17 In 2000 testimony, GAO detailed 

how weak provider enrollment procedures allowed questionable providers easy entr

both Medicaid and Medicare.18 According to

p

M

Scope 

We reviewed individuals and entities that had enrolled in Medicaid and that OIG 

subsequently excluded from Federal health care programs, including Medicare, Medicaid, 

and all other plans and programs that provide health benefits funded directly or indirectl

by the United States (other than the Federal Employees Health Benefits Plan), between 

January 1, 2007, and June 30, 2008. We used national databases to review the provid

criminal and financial histories before and after Medicaid enrollment. Based on the 

potential correlation between tax debt and health care fraud, we analyzed the providers’ 

tax debt. We reviewed the providers’ enrollment files, including their a

a

Data Sources 

We used OIG’s LEIE database to identify the number of Medicaid providers out of the 

4,991 individuals and entities excluded between January 1, 2007, and June 30, 2008.20 

From these, we identified 232 individuals and entities with a Medicaid billing nu

and contacted States based on the address in the LEIE. Because the remaining 

4,759 cases had no Medicaid billing number,

M

We dropped a total of 38 providers from our group of 232. We dropped 34 providers 

because States had no record of the provider or the provider had no billing number and

worked for a facility such as a home health agency that billed the program (the LEI

showed the billing number for the facility and not the individual). We dropped an 

additional four providers because the State disclosed that they were still active. Finally,

we consolidated 12 related individuals and entities into six unique providers. We used 

16 OIG, Credentialing of Medicaid Providers: Fee for Service, February 2001 (OEI-07-99-00680). 17 GAO, Medicaid Program Integrity: State and Federal Efforts to Prevent and Detect Improper Payments

(GAO-04-707), July 2004, p. 21. 

18 GAO, Medicaid: HCFA and States Could Work Together to Better Ensure the Integrity of Providers, 

testimony before the Subcommittee on Oversight and Investigations, Committee on Commerce, House of 

Representatives, July 18, 2000, pp. 3–4. HCFA was the predecessor to CMS. 

19 Ibid., p. 1. 

20 We used the LEIE because it is the only national database that identifies excluded Medicaid providers. 

OEI-09-08-00330 Excluded Medicaid Providers: Analysis of Enrollment 

 
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e resulting group of 188 providers as the basis for our analysis (Appendix B lists the 

 to 

d 

 1998. We 

ere unable to obtain complete enrollment files containing the original enrollment 

is 

ll States. In addition, we 

ueried the HIPDB for each provider to identify any licensing actions against them and 

obationary enrollment, reenrollment, and site 

isits. In addition, we asked the States to complete a survey about the process they used 

excluded providers under review from the other 

3 States. We reviewed MSIS data for these States, but the Medicaid provider numbers 

not match any claims.23

 

th

exclusion authorities that OIG used for the providers we reviewed). 

We contacted each of the 26 States in which our group of 188 providers were located

request the enrollment files for the providers. (Appendix C lists the number of exclude

providers by State and provider type.) The dates of enrollment for the providers we

reviewed ranged from 1976 to 2007, and half the providers enrolled before

w

applications for 30 providers because the States had purged the records. 

We conducted background checks of the 188 excluded providers with LexisNex

(SmartLinx) to identify their criminal and financial histories as well as the accuracy of 

the information that they reported on their applications.21 SmartLinx scans all 

LexisNexis databases of public records. Public records include, but are not limited to, 

current mailing addresses, real property deeds and mortgages, records of civil and 

criminal actions, professional licenses, and liens for nearly a

22

q

obtained additional information from State medical boards. 

We surveyed the 26 States that enrolled the 188 providers to determine whether they had 

used the following procedures at the time the providers in our review enrolled in 

Medicaid: criminal background checks, pr

v

to enroll providers as of September 2008. 

We obtained Medicaid claims data from the Medicaid Statistical Information System 

(MSIS) maintained by CMS to assess the providers’ billing patterns. We identified 

claims for New York, California, and Ohio providers. The claims data covered 2001 to 

2006. Sixty-five percent of the excluded providers under review came from these three 

States. We found no claims data for the 

2

in the LEIE did 

Data Analysis 

We used SAS statistical software to record and quantify the information that we gathered 

about the providers’ backgrounds as well as States’ enrollment policies. 

21 We did not obtain or review court dockets to verify the criminal and civil histories in LexisNexis. The 

information in LexisNexis may not reflect the complete criminal and civil history of a provider. 22 The HIPDB is a national database that the Health Resources and Services Administration manages. It 

contains information on actions against providers, including licensing and certification actions, civil 

judgments, and criminal convictions. 

23 A 2009 OIG report highlighted the limits of MSIS and noted that it does not capture many of the data 

elements that can assist in fraud, waste, and abuse detection. See MSIS Data Usefulness for Detecting 

Fraud, Waste, and Abuse (OEI-04-07-00240). 

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Limitations

We based our analysis on a selected group of 188 providers that OIG excluded between 

January 2007 and June 2008. We were unable to obtain complete enrollment files for 

30 of these providers and could not analyze their disclosures about ownership. We 

cannot project our results to excluded Medicaid providers as a whole, because the LEIE 

contained Medicaid numbers for only 232 out of 4,991 excluded individuals and entities, 

and we were unable to identify the universe of excluded Medicaid providers. We 

collected information about current enrollment policy from the 26 States that enrolled the 

excluded providers we reviewed, not from all States. 

Standards 

We conducted this review in accordance with the Quality Standards for Inspections

approved by the Council of the Inspectors General on Integrity and Efficiency. 

RESULTS 

Eight out of the 188 excluded providers disclosed false ownership information at the 

time of enrollment 

Providers must disclose information about ownership. Federal regulations require States 

to collect information from providers about ownership and control.24 The States that 

enrolled these eight providers complied with Federal regulations, which require States to 

collect information about ownership from providers when they apply to Medicaid, but the 

States did not verify the accuracy of ownership information. For example, a Texas 

provider failed to disclose the identity of the coowner when the provider applied to 

Medicaid. Because the State collected the ownership information but did not verify it, it 

did not detect that the information was false. 

States impose few enrollment requirements beyond those mandated by Federal 

regulations 

Over half of the excluded providers (132 out of 188) were subject to no State enrollment 

requirements beyond the Federal regulations when they enrolled in Medicaid. The other 

56 providers were subject to enrollment requirements in addition to the Federal 

regulations. Specifically, States conducted limited background checks, involving checks 

of State databases only, for 51 providers; conducted site visits for two providers; and 

required reenrollment for six providers (we counted one provider twice that was subject 

to two enrollment requirements and one provider three times that was subject to three 

enrollment requirements). 

Criminal background checks are the most common additional enrollment requirement 

among the States we reviewed, but their use varies widely. Although 15 out of the 

24 42 CFR § 455.104. 

OEI-09-08-00330 Excluded Medicaid Providers: Analysis of Enrollment 

 
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26 States we surveyed reported that they conduct background checks, the checks are 

typically limited to State databases rather than national sources, such as FBI, and to 

certain types of providers, such as transportation and personal care assistants. 

Several States reported that they conduct site visits (11 out of 26), reenroll providers 

(9 out of 26), or subject new providers to probationary enrollment (4 out of 26). Among 

States that reenroll providers, the intervals between reenrollment may be several years, 

and States vary as to whether they verify providers’ information or conduct a new 

background check with each reenrollment. Florida, which ranks fourth in terms of 

Medicaid spending, reenrolls providers every 5 years and conducts new FBI background 

checks at that time. Iowa reenrolls all providers every 6 years. Oklahoma conducts State 

criminal background checks for personal care and community service workers when they 

enroll but not when they reenroll at 3-year intervals. 

Three States restrict the enrollment of certain provider types. One alternative to 

heightened review of applicants is to limit their entry into Medicaid. New York, 

California, and New Jersey use this approach. 

New York uses density criteria to limit the entry of certain provider types. For example, 

New York imposes density criteria on nonemergency transportation services in New 

York City. The State compares the ratio of the number of claims to the number of 

recipients in New York City to the ratio in the rest of the State. If the ratio is greater than 

5 percent, the State deems the area “dense” and does not enroll new providers. The State 

also applies density criteria to pharmacies, suppliers of orthopedic shoes, and 

laboratories. 

California has moratoria in place for the following four provider types: adult day health 

care centers (since 2004); Los Angeles County nonchain, nonpharmacist-owned 

pharmacies (since 2002); clinical laboratories (since 2001); and DME providers located 

outside of California and operating in Los Angeles, Orange, Riverside, and San 

Bernardino Counties (since 1999). According to the Department of Health Care Services, 

the moratoria are “necessary to safeguard public funds and to maintain the fiscal integrity 

of the Medi-Cal program.”25

In July 2006, New Jersey imposed moratoria on the enrollment of new partial care 

services providers (outpatient mental health services), chiropractors, DME providers, and 

podiatrists unless the State granted an exception. As of April 2009, the State has not 

approved any new applications from chiropractors (26 applications received) or 

podiatrists (35 applications received). New partial care providers did not apply to 

Medicaid during this period. The State reviewed 93 applications from DME providers, 

denied 84, and approved 9 because the providers met a special need. 

 

25 California Department of Health Care Services, Orders for Moratoria, August 2008, November 2008, and 

February 2009. 

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Current rules do not require disclosure of nonprogram-related convictions or tax 

liens 

Federal regulations at 42 CFR § 455.104 and 42 CFR § 455.106 require States to collect 

information from providers about ownership and program-related convictions. States are 

not obligated to collect information about criminal convictions unrelated to Federal 

health care programs or tax liens. 

Eight of the 188 excluded providers had criminal convictions before they enrolled in 

Medicaid and committed health care-related crimes after they enrolled. Upon enrollment 

in Medicaid, providers are required to disclose only program-related convictions.26 Eight 

providers in our review had convictions unrelated to Federal health care programs, which 

they did not have to disclose. Examples include the following: 

 An Iowa aide had a felony conviction for forgery before she enrolled in 2004. 

She was convicted of theft, a program-related crime, after she enrolled. 

 The owner of an Ohio DME company was convicted of receiving stolen property 

6 months before enrollment. After he enrolled, he was convicted of Medicaid 

fraud. 

 A New York dentist was convicted of insurance fraud in 2003 for filing a claim 

for a dental machine that he had removed from his office. The State did not know 

about the conviction and enrolled him in 2004. He was subsequently convicted of 

Medicaid fraud. 

 In 1989, an Indiana physician was convicted of illegal dispensing of narcotics, a 

nonprogram-related felony. The State did not know about the conviction, and he 

enrolled in Medicaid in 1996. He operated a drug and alcohol rehabilitation clinic 

and was later convicted of health care fraud and insurance fraud. 

Forty-eight of the 188 excluded providers had Federal or State tax liens before or after 

they enrolled in Medicaid. Nine of the 188 excluded providers collectively had 

15 Federal and State tax liens totaling $443,100 before they enrolled in Medicaid. 

Additionally, 43 of the 188 excluded providers had a total of 147 Federal and State tax 

liens for a total of $4.2 million while they were active providers (four providers had tax 

liens both before and after they enrolled). 

Ten of the 34 excluded providers in California, New York, and Ohio that had liens 

received reimbursement from their State Medicaid programs after imposition of the liens. 

Medicaid reimbursed these providers a total of $3.8 million between the date of the first 

tax lien and the date of termination. These providers include the following: 

 A New York dentist had Federal tax liens of $9,495 and State tax liens of 

$10,280 during the period when he was an active provider. Medicaid paid him 

$709,549. OIG excluded this provider for insurance fraud. 

 

26 42 CFR § 455.106. 

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 An Ohio pediatrician had $114,591 in Federal tax liens before enrollment and 

received $582,421 from the Medicaid program. OIG excluded this provider for a 

program-related conviction. 

CONCLUSION 

We recognize that CMS is taking steps to address provider enrollment. In addition, 

Congress passed legislation in 2010 to strengthen provider enrollment and program 

integrity. The Patient Protection and Affordable Care Act imposed new provider 

screening requirements on providers in Medicare, Medicaid, and the Children’s Health 

Insurance Program. This memorandum provides information that CMS may find useful 

regarding Medicaid provider enrollment. We cannot project our results to excluded 

Medicaid providers as a whole. Twenty-four out of 188 excluded providers had a history 

of tax debt, criminal convictions, or false disclosures before they enrolled (one provider 

had both a tax lien and a conviction). Federal regulations only require providers to 

disclose program-related convictions, and States are not required to verify the 

information that providers submit on their enrollment applications. We believe that 

additional reviews and oversight in this area are warranted to ensure that Medicaid 

enrollment standards are sufficient to protect the program from fraud and abuse. 

This review is being issued directly in final form because it contains no 

recommendations. If you have comments or questions about this report, please provide 

them within 60 days. Please refer to report number OEI-09-08-00330 in all 

correspondence. 

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APPENDIX A 

Federal Provider Disclosure Requirements 

42 CFR § 455.104 Disclosure by providers and fiscal agents: 

Information on ownership and control. 

 (a) Information that must be disclosed. The Medicaid agency must 

require each disclosing entity to disclose the following information 

in accordance with paragraph (b) of this section: 

 (1) The name and address of each person with an ownership or 

control interest in the disclosing entity or in any subcontractor in 

which the disclosing entity has direct or indirect ownership of 

5 percent or more; 

 (2) Whether any of the persons named, in compliance with 

paragraph (a)(1) of this section, is related to another as spouse, 

parent, child, or sibling. 

 (3) The name of any other disclosing entity in which a person 

with an ownership or control interest in the disclosing entity also 

has an ownership or control interest. This requirement applies to 

the extent that the disclosing entity can obtain this information by 

requesting it in writing from the person. The disclosing entity 

must-- 

 (i) Keep copies of all these requests and the responses to them; 

 (ii) Make them available to the Secretary or the Medicaid agency 

upon request; and 

 (iii) Advise the Medicaid agency when there is no response to a 

request. 

 (b) Time and manner of disclosure. (1) Any disclosing entity that 

is subject to periodic survey and certification of its compliance 

with Medicaid standards must supply the information specified in 

paragraph (a) of this section to the State survey agency at the time 

it is surveyed. The survey agency must promptly furnish the 

information to the Secretary and the Medicaid agency (2) Any 

disclosing entity that is not subject to periodic survey and 

certification and has not supplied the information specified in 

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paragraph (a) of this section to the Secretary within the prior 

12-month period, must submit the information to the Medicaid 

agency before entering into a contract or agreement to participate 

in the program. The Medicaid agency must promptly furnish the 

information to the Secretary. 

 (3) Updated information must be furnished to the Secretary or the 

State survey or Medicaid agency at intervals between 

recertification or contract renewals, within 35 days of a written 

request. 

 (c) Provider agreements and fiscal agent contracts. A Medicaid 

agency shall not approve a provider agreement or a contract with a 

fiscal agent, and must terminate an existing agreement or contract, 

if the provider or fiscal agent fails to disclose ownership or control 

information as required by this section. 

 (d) Denial of Federal financial participation (FFP). FFP is not 

available in payments made to a provider or fiscal agent that fails 

to disclose ownership or control information as required by this 

section. 

42 CFR § 455.106 Disclosure by providers: Information on 

persons convicted of crimes. 

 (a) Information that must be disclosed. Before the Medicaid 

agency enters into or renews a provider agreement, or at any time 

upon written request by the Medicaid agency, the provider must 

disclose to the Medicaid agency the identity of any person who: 

 (1) Has ownership or control interest in the provider, or is an 

agent or managing employee of the provider; and 

 (2) Has been convicted of a criminal offense related to that 

person's involvement in any program under Medicare, Medicaid, or 

the title XX Services Program since the inception of those 

programs. 

 (b) Notification to Inspector General. (1) The Medicaid agency 

must notify the Inspector General of the Department of any 

OEI-09-08-00330 Excluded Medicaid Providers: Analysis of Enrollment 

 
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disclosures made under paragraph (a) of this section within 

20 working days from the date it receives the information. 

 (2) The agency must also promptly notify the Inspector General of 

the Department of any action it takes on the provider's application 

for participation in the program. 

 (c) Denial or termination of provider participation. (1) The 

Medicaid agency may refuse to enter into or renew an agreement 

with a provider if any person who has an ownership or control 

interest in the provider, or who is an agent or managing employee 

of the provider, has been convicted of a criminal offense related to 

that person's involvement in any program established under 

Medicare, Medicaid or the title XX Services Program. 

 (2) The Medicaid agency may refuse to enter into or may 

terminate a provider agreement if it determines that the provider 

did not fully and accurately make any disclosure required under 

paragraph (a) of this section. 

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APPENDIX B Office of Inspector General Exclusion Authorities for Providers 

We Reviewed, January 2007 to June 200827

Exclusion Authorities 

Mandatory Exclusions 

Authority Description 

Number of 

Providers Percentage 

1128(A)(1) Program-related conviction 121 64.0 

1128(A)(2) Conviction for patient abuse/neglect 6 3.2 

1128(A)(3) Felony conviction for health care fraud 10 5.3 

1128(A)(4) Felony conviction for controlled 

substances 6 3.2 

Subtotal 143 75.7 

Permissive Exclusions 

Authority Description 

Number of 

Providers Percentage 

1128(B)(2) Conviction for obstruction of an 

investigation 1 0.5 

1128(B)(4) License revocation or suspension 30 15.9 

1128(B)(5) Suspension from government health care 

program

1 0.5 

1128(B)(7) Fraud, kickbacks, and other prohibited 

activities 3 1.6 

1128(B)(8) Entity owned/controlled by excluded 

individual 10 5.3 

1128(B)(15) Individual owning/controlling excluded 

entity 1 0.5 

Subtotal 46 24.3 

 Total 189* 100 

Source: Office of Inspector General analysis, 2009.

 *We counted one provider twice because she owned two entities excluded under different authorities. 

 

27 We listed only the authorities that applied to the group of excluded providers. The authorities cited refer 

to sections of the Social Security Act. 

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APPENDIX C Excluded Providers We Reviewed by State and Provider Type, 

January 2007 to June 2008 

 

Number of Excluded Providers by State 

State Number of Providers Percentage 

Ohio 54 28.7 

California 37 19.7 

New York 32 17.0 

Texas 13 6.9 

Oregon 6 3.2 

Wisconsin 6 3.2 

Arkansas 3 1.6 

Illinois 3 1.6 

Indiana 3 1.6 

Louisiana 3 1.6 

Minnesota 3 1.6 

New Jersey 3 1.6 

Arizona 2 1.1 

Connecticut 2 1.1 

Iowa 2 1.1 

Michigan 2 1.1 

Nevada 2 1.1 

Oklahoma 2 1.1 

Wyoming 2 1.1 

Kansas 2 1.1 

Colorado 1 0.5 

Florida 1 0.5 

Kentucky 1 0.5 

Missouri 1 0.5 

Washington 1 0.5 

West Virginia 1 0.5 

 Total 188 100* 

Source: Office of Inspector General analysis, 2009.

 *Total may not add to 100 because of rounding. 

OEI-09-08-00330 Excluded Medicaid Providers: Analysis of Enrollment 

 
Page 16 – Marilyn Tavenner 

OEI-09-08-00330 Excluded Medicaid Providers: Analysis of Enrollment 

 

Number of Excluded Providers by Type 

Provider Type Number of Providers Percentage 

Physician 51 27.1 

Aide 43 22.9 

Dentist 19 10.1 

Nurse 14 7.5 

Durable medical equipment company 12 6.4 

Nonemergency transportation company 10 5.3 

Pharmacist 7 3.7 

Home health agency 6 3.2 

Psychologist 4 2.1 

Clinic 3 1.6 

Counselor 3 1.6 

Licensed clinical social worker 2 1.1 

Chiropractor 2 1.1 

Pharmacy 2 1.1 

Physician assistant 2 1.1 

Social worker 2 1.1 

Therapist 1 0.5 

Acupuncturist 1 0.5 

Ambulance company 1 0.5 

Counseling center 1 0.5 

Mental health facility 1 0.5 

Optometrist 1 0.5 

 Total 188 100 

Source: Office of Inspector General analysis, 2009.