Scan OIG’s published settlements involving excluded individuals and a pattern emerges quickly. The excluded person is rarely a physician running a fraud scheme. More often it is a receptionist, a medical assistant, a billing clerk, a nurse. The employer usually did not know. And the settlement is usually in the tens or hundreds of thousands of dollars.

That gap — between what the organization did wrong and what it ended up paying — is what makes exclusion liability worth understanding in detail before you are on the wrong side of it.

The legal standard: “knew or should have known”

OIG may impose civil monetary penalties on any person or entity that arranges or contracts with an individual it knows, or should know, is excluded, where the resulting items or services are billed to a federal health care program.

That second clause does the work. Actual knowledge is not required. Because the LEIE is free, public, and searchable by anyone in under a minute, OIG’s consistent position is that an employer who did not check should have known. “We had no idea” is not a defense; it is a description of the violation.

What this means practically: the absence of a screening program is not a mitigating circumstance. It is the thing that establishes liability.

How the exposure is calculated

Three separate forms of liability stack on top of one another.

1. Civil monetary penalties

Penalties are assessed per item or service furnished by the excluded person for which federal payment was sought. The statutory baseline is $10,000 per item or service, subject to annual inflation adjustment, which puts the current effective figure meaningfully higher.

The per-item structure is what drives the numbers. A part-time medical assistant supporting fifteen patient encounters a day generates roughly 3,900 countable items over a year. The penalty exposure is not “one violation.” It is thousands.

2. Assessments

OIG may also impose an assessment of up to three times the amount claimed for each item or service. This is separate from the penalty, not an alternative to it.

3. Overpayment liability

Independent of penalties and assessments, the organization owes back the federal program payments attributable to the excluded person’s services. This obligation exists regardless of intent and regardless of whether OIG pursues penalties.

In serious cases, False Claims Act exposure sits above all three, with its own penalty schedule and treble damages.

Separately billable versus non-separately billable

A technical distinction that determines the size of the number, and one that catches organizations off guard.

Where the excluded person’s work is separately billable — a physician billing office visits, a pharmacist filling prescriptions — penalties and assessments are calculated on the number and value of those specific billable items.

Where the work is non-separately billable — nursing or clerical support folded into a physician office visit, services covered by a skilled nursing facility per-diem, care under a hospital prospective payment — the assessment methodology looks instead to the total cost of the excluded person to the employer, including salary and benefits.

This is why administrative staff generate real exposure. A receptionist never submits a claim. But her salary is embedded in payments the organization received from federal programs, and that is the basis on which the assessment gets calculated. Organizations that scope screening to “people who bill” are working from a theory of liability that OIG does not share.

What actual settlements look like

OIG publishes its civil monetary penalty settlements, and the record is instructive. Recent matters resolving allegations of employing excluded individuals have ranged from roughly $20,000 to over $175,000 — and notably, many of these were self-disclosed by the provider.

Several patterns recur across these cases:

• The excluded individuals are frequently in support roles — receptionists, assistants, clerical staff
• The employers span every size, from solo practices to regional medical centers
• The conduct is almost always a screening failure rather than deliberate concealment
• Discovery often comes late, after months or years of employment

The uncomfortable implication is that these settlements represent the good outcome. They are the organizations that found the problem and disclosed it. The ones OIG finds first do worse.

The Self-Disclosure Protocol

When an organization discovers it has employed an excluded person, it faces a genuine decision: disclose, or handle it internally and hope.

OIG’s Self-Disclosure Protocol exists to make the first option meaningfully better than the second. Its practical benefits:

• A lower damages multiplier. OIG has stated it will generally apply a 1.5 multiplier to single damages on SDP submissions — well below what it would seek in an affirmative enforcement action, and OIG has indicated it applies this even where aggravating factors are present.
• Presumption against integrity obligations. Self-disclosing parties typically avoid a Corporate Integrity Agreement, which is often the more burdensome outcome — years of independent review organizations, reporting obligations, and stipulated penalties.
• Control of the narrative and the timeline. A disclosed matter is a negotiation. A discovered one is an investigation.

OIG has been explicit that this is a carrot-and-stick arrangement: the favorable treatment for disclosure is paired with a more aggressive posture toward matters it has to find on its own.

One caveat worth naming. If the conduct involves only overpayments and no civil monetary penalty liability, OIG has noted there is no penalty to mitigate — the SDP does not reduce a pure repayment obligation. Whether disclosure is the right call in a given case is a legal judgment that depends on the specific facts, and it is worth taking to counsel rather than deciding from a blog post.

What to do on discovery

If you find an excluded person on your roster, the first hours matter:

1. Confirm the match. Verify against date of birth, Social Security number, or NPI before acting. LEIE results are potential matches, and false positives are common on ordinary names.
2. Stop the exposure immediately. Remove the individual from any role touching items or services reimbursed by federal programs. Liability accrues for every day of continued employment in such a role.
3. Establish the timeline. Determine the exclusion effective date and the period of employment that overlaps it. This defines the scope of the exposure.
4. Quantify. Calculate the items and services involved, or the total cost of employment for non-separately billable roles.
5. Bring in counsel before making disclosure decisions.
6. Fix the underlying gap. Whatever allowed the exclusion to go undetected will allow the next one to go undetected too.

The economics

Set the numbers side by side. Screening costs, at most, a modest recurring line item — often a few dollars per employee per year for automated monitoring, or staff time for a smaller organization. Published settlements for a single excluded employee run into six figures, before counting legal fees, remediation, disruption, and the reputational effect of appearing in OIG’s enforcement announcements.

There is no version of this calculation where skipping the screening comes out ahead. Exclusion liability is one of the few compliance risks that is both severe and almost entirely preventable by a routine, inexpensive, automatable process.

The organizations paying these settlements were not, as a rule, cutting corners deliberately. They screened at hire, filed the result, and never looked again — and the cost of that gap showed up years later, calculated per item, per service, for every day nobody checked.