Medicare Exclusion and Billing Privileges: When a Practice Loses Payment

A physician fraud investigation can interrupt Medicare payment before a final judgment, while exclusion and loss of billing privileges follow their own rules. A practice can still have patients, staff and a licensed physician while a government action restricts payment. If you work in billing, credentialing or practice management, the important question is what happened after that restriction: whose work continued, whose identity appeared on the claims and who authorized the billing. The practice’s obligations continue in Physician Practice Corporate Integrity Agreements: What the Settlement Still Requires.

We examine those decisions as part of a physician billing fraud case. The agency notice, enrollment record and later claims can connect what the practice knew to the government money it sought. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

Who Can Stop a Practice’s Payment?

The Centers for Medicare & Medicaid Services controls Medicare payment and enrollment, and Medicare administrative contractors handle claims and local coverage. The Health and Human Services Office of Inspector General controls federal healthcare program exclusion. State medical boards control the physician’s license, while the Drug Enforcement Administration controls federal controlled-substance registration. Revocation removes Medicare billing privileges, while exclusion reaches payment across federal health care programs, including some management work.

Hospital privileges and payer credentialing add separate decisions. A hospital’s medical-staff approval concerns privileges there, while an insurer’s credentialing concerns participation with that payer. Medicare Advantage plans contract with practices, and Medicaid has its own enrollment requirements. Someone working with these records may see different answers for the same physician because each record answers a different question.

The Medicare enrollment forms make another distinction inside the practice. Separate enrollment forms cover the individual physician, the group and a professional who only orders or certifies. Reassignment connects a practitioner’s services to the entity billing for them. The individual, the group and the ordering professional therefore belong in the payment story, even when the business operates under one name.

When Can Medicare Suspend Payment?

Medicare can suspend payment based on reliable information about an overpayment or a credible allegation of fraud. CMS makes fraud-payment-suspension decisions under the Medicare payment rules.

Prepayment review works at the claim level: supporting documentation is required before payment is released. A contractor’s Targeted Probe and Educate review combines examination of claims with education, and continuing problems can lead to broader prepayment review or other action. Billing comparisons can start that examination. Unified Program Integrity Contractors also analyze Medicare and Medicaid patterns, investigate suspected fraud and coordinate referrals with the payment agency and the Inspector General. The medical record, service date and actual performer then give the reviewer something more specific than a pattern on a screen.

For an insider, the notice and the practice’s response belong together. A documentation request, a payment suspension and a change in enrollment status describe different actions. We connect the stated reason for the action to the records behind the claims and the decisions made afterward.

Stay, Deactivation and Revocation

A stay of enrollment preserves Medicare enrollment while payment is withheld pending correction. The agency’s February 2024 enrollment presentation explains this remedy, distinct from deactivation and revocation.

Deactivation is a separate enrollment action affecting billing eligibility. Revocation removes Medicare billing privileges and can carry a bar on reenrollment. The enrollment rules give revocation grounds that include false enrollment information, billing-number misuse, abusive billing, failed site or screening requirements, reporting failures and patient harm.

Those grounds reach facts staff may know directly: who worked at the reported location, who controlled the billing number, what the enrollment application said and which services the practice claimed to provide. Ownership and control records also matter, including management authority without an equity stake. A practice manager’s operational knowledge can connect an enrollment representation to what happened in the office.

What Does Medicare Exclusion Reach?

Exclusion reaches federally paid services furnished, ordered or prescribed by an excluded person. It can also reach administrative and management work that federal health programs reimburse indirectly. The Inspector General’s exclusion bulletin explains why putting the work on a group claim or paying the person a salary does not remove the payment prohibition.

That reach matters to employees who never submit a claim under their own names. An excluded person may be involved in management or administration while somebody else’s number appears on the bill. We follow the work and the payment together, including who furnished the service, ordered it or managed the operation that federal money supported.

The Office of Inspector General’s exclusion authorities include grounds involving licensing or program actions and unnecessary or substandard services. Some permit exclusion without a criminal conviction. The particular authority and action tell us what happened to the person’s eligibility, while the staffing, ordering and billing records show how that person remained involved.

The same question reaches owners and management companies controlling practice operations. Ownership disclosures can include managing control without equity, and exclusion can reach indirectly reimbursed management work. We look at the person’s actual role, the services affected and the federal payment supporting them.

Is Monthly Exclusion Screening Required?

Not for every practice. The Office of Inspector General recommends screening before hiring or contracting and then checking its List of Excluded Individuals and Entities monthly. Its 2013 bulletin distinguishes that recommendation from requirements that can depend on the state or a practice’s contracts.

For a credentialing employee, the useful facts include who was checked, what the result showed and what management did with it. We connect a screening result to the person’s work and the claims that followed, including work paid through the group.

Reenrollment and Reinstatement Have Separate Limits

Medicare expanded its reenrollment bars in 2019, and revocation can keep a practice from billing for years. Reinstatement after exclusion requires a separate Inspector General decision: the end of the minimum exclusion period or restoration of a state license does not automatically restore federal program eligibility.

For claims staff, the service date and the effective date on the actual action are the useful comparison. We work through those dates with the enrollment and billing records to understand whose services the practice continued to claim.

A Civil Settlement and a Separate Exclusion

A Florida physician and Grove Place Surgery Center agreed to pay $4 million to resolve allegations involving unnecessary or unperformed Mohs surgery stages and tissue transfers. The Justice Department’s June 17, 2015 announcement also reported that the physician accepted exclusion from Medicare, Medicaid and all federally funded health programs for at least five years.

The government alleged additional cancer lesions that were unconfirmed or nonexistent, and reconstruction procedures that were physically impossible at the billed volume. We see the absurdity: on those allegations, taxpayers were billed for more surgery than the physician could physically perform.

A referring physician and an internal histology technician brought the whistleblower case. They saw different parts of the same clinical premise behind the payment: the reason for the treatment and the work performed inside the practice. The physician and surgery center resolved the allegations together, but the announced exclusion applied to the physician.

What Are the Penalties for Physician Self-Referral Violations?

Physician self-referral violations can lead to payment denial, refunds, civil monetary penalties and exclusion. The Stark law payment prohibition concerns referrals for designated health services when a physician or immediate family member has a financial relationship with the entity and no exception applies. The financial relationship can involve ownership, investment or compensation.

A 2020 article in the Journal of Forensic and Investigative Accounting, A Forensic Accountant’s Guide to the Most Potent Federal Laws Used Against Healthcare Fraud, describes the progression from nonpayment to refund obligations and possible additional consequences. For a practice insider, the referral and financial arrangement belong beside the service and the claim. We examine those connections when the work was performed but the relationship behind the order affected whether the government could pay for it.

The Payer and Service Date Change the Billing Question

Dermatology Associates of Central New York admitted submitting claims on more than 200 days when its physicians were outside New York. The December 4, 2018 settlement announcement distinguished Medicare and TRICARE supervision requirements from New York Medicaid billing for services by practitioners who lacked the required credentials. The conduct covered March 2009 through February 2015.

The comparison is between the physician identity on the claim and the person who performed or supervised the work, under the applicable payer’s rules on the service date. Staff schedules, travel records, credentialing and claims can supply different pieces. That is why an old supervision case needs its dates, and why Medicare and Medicaid claims need their own examination.

In its guilty plea, Pain Specialists, P.A. admitted billing under its absent physician owner’s identifier for services requiring personal consultation or direct supervision. The Justice Department’s March 20, 2025 announcement also describes a separate civil settlement addressing Medicare incident-to billing and Medicaid’s own-provider-number requirement. The admission belonged to the practice. For someone inside the business, the useful connection is between the claimed physician involvement and what the scheduling and service records show.

How Billing Pressure Keeps Bad Claims Moving

An insider may know who received a warning and who could change the billing system. Implementing a Physician Practice Compliance Program, published in the 2011 edition of Health Care Administration: Managing Organized Delivery Systems, describes human resources duties scattered among staff or concentrated in a practice manager. It also identifies billing software, coding without documentation and altered records as operational risks.

In the government’s complaint against Vohra Wound Physicians, the alleged connection was concrete: software assumed tissue removal, generated procedure coding and supporting language, and management received an audit report without promptly correcting the system or returning overpayments. The Vohra allegations put the decision inside the operation, upstream from the final bill.

Medical Business Service supplies another example of what can happen after payment stops at the claim level. A whistleblower alleged that the billing company substituted unsupported diagnosis codes on denied claims and resubmitted them to government health programs. The complaint attributed this instruction to a manager:

We see the problem in that alleged instruction: getting paid had become the objective, while the medical basis for the claim fell away. The denied claim, changed diagnosis and instruction to staff connect the money to a decision inside the billing company. That is the kind of detail we develop with someone considering a physician-practice whistleblower case.

When You Know Who Kept the Claims Moving

If you saw claims continue after an exclusion, an enrollment action or an internal warning, speak to one of our Whistleblower Experts about who kept those claims moving. We work beside you to connect the payment restrictions, the work performed and the instructions inside the practice into your strongest case, and bring in physician billing fraud whistleblower lawyers who understand those connections. You bring the knowledge of what happened inside the business, and we stay with you through the case.