Medicare's exclusion authorities - kicking you out of the program for 10 or 20 years - was previously handle by the legal eagles in the OIG.
With a quick announcement in the Federal Register, that exclusion can now also be handled by CMS staff, in the name of the Administrator (RFK/HHS).
Find more news here:
CMS gains exclusion authority—but exclusion does not automatically mean a lifetime ban
By Chat GPT 6
An October 14, 2026 Federal Register notice delegates to the CMS administrator the Secretary’s permissive exclusion authority under Social Security Act §1128(b), effective immediately. CMS can now exercise this authority alongside HHS’s Office of Inspector General, whose existing powers remain intact. The notice does not delegate mandatory exclusion authority under §1128(a). CMS must follow existing departmental rules and procedures; authority to conduct hearings or issue regulations is expressly excluded. fed reg eclusion 2026-21001
This is Powerful
The change brings a powerful enforcement tool directly into the agency administering Medicare and Medicaid. Permissive exclusion grounds include certain misdemeanor convictions, professional-license sanctions, unnecessary or substandard services, kickbacks, and material falsehoods in enrollment applications. Some grounds require no criminal conviction. Exclusion generally prevents federal healthcare programs from paying for services an excluded person or entity furnishes, orders, or prescribes—even when someone else submits the bill. oig.hhs.gov
How Long? "Sentencing Guidelines"
How long does exclusion last? The attached coverage’s references to permanent bans need qualification: there is no universal lifetime or ten-year term. Pasted text(20261015-182940)
| Basis | Duration framework |
|---|---|
| Certain permissive conviction grounds | Three-year baseline, adjustable for aggravating or mitigating circumstances |
| License revocation or suspension | Generally tied to the underlying licensing sanction; potentially indefinite |
| Unnecessary or substandard services | Minimum one year |
| Fraud/kickbacks under §1128(b)(7) | No prescribed minimum; duration depends on the case |
| Mandatory exclusion for qualifying convictions | Generally at least five years; qualifying repeat convictions can trigger ten years or permanent exclusion |
The ten-year and permanent repeat-conviction provisions belong to the mandatory exclusion framework, which this delegation does not transfer to CMS. These are statutory benchmarks, not evidence of the average exclusion actually imposed. oig.hhs.gov
What Happens When It's Over?
Moreover, reinstatement is not automatic when a stated term expires. Under OIG’s established process, the excluded party must apply and receive written approval. Consequently, a nominal five-year exclusion can remain operative longer. oig.hhs.gov
Take Home Lesson?
For laboratories and other providers, my assessment is that the principal change is institutional: CMS gains direct exclusion leverage alongside its payment oversight responsibilities. That could accelerate enforcement and increase settlement pressure. However, the brief notice does not explain how CMS and OIG will coordinate cases. It establishes parallel authority, leaving the practical division of enforcement work unresolved.
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Yes—there is an explicit appeal process. But your concern is justified: for many exclusions, the sanction can take effect before the appeal is decided.
Section 1128(f) expressly provides notice, an opportunity for a hearing, and judicial review. The new CMS delegation does not eliminate those rights. Its statement that CMS cannot “conduct hearings” reserves that adjudicative function; it does not mean providers lose their hearing rights. ssa.gov fed reg eclusion 2026-21001
The established OIG procedures provide the relevant framework, although the brief delegation notice does not explain all the mechanics of CMS’s implementation.
For most permissive exclusions, the sequence is:
- Notice of intent. The provider generally gets a written explanation and 30 days to submit evidence and arguments against exclusion. For excessive charges or unnecessary/substandard services under §1128(b)(6), the provider can also request oral argument before an OIG official. ecfr.gov
- Exclusion decision. If the agency proceeds, its letter must identify the basis, duration, applicable factors supporting that duration, and appeal rights. Under the ordinary rule, exclusion becomes effective 20 days after the notice’s date. ecfr.gov
- ALJ appeal. The provider generally has 60 days after receiving the notice to request a hearing. Review addresses whether a legal basis for exclusion exists and whether its length is unreasonable. The evidentiary standard is preponderance of the evidence, not proof beyond a reasonable doubt. Further review runs through the HHS Departmental Appeals Board and then federal court. ecfr.gov
The crucial distinction is whether appealing postpones exclusion:
| Ground | Does a timely hearing request ordinarily prevent exclusion from taking effect before the ALJ decision? |
|---|---|
| §1128(b)(6): excessive charges, unnecessary or substandard services | No. The ordinary 20-day effective-date process applies. |
| §1128(b)(7): fraud, kickbacks, other prohibited acts | Yes, unless an earlier exclusion is warranted to protect patient health or safety. |
That second category has an express pre-exclusion hearing safeguard. Thus, different items within subsection “b” carry materially different procedural protection. oig.hhs.gov
There is another limitation: the ALJ does not have unrestricted authority to reconsider whether exclusion was a wise exercise of discretion. The regulations distinguish reviewing the legal basis and duration from reviewing OIG’s discretionary choice to exclude once the grounds exist. An exclusion appeal also generally cannot reopen an underlying conviction or other already-adjudicated determination. ecfr.gov
So, a letter imposing ten years is contestable, and the duration needs support under the applicable rules. But appeal rights do not necessarily preserve the business while that contest proceeds. For the more judgment-dependent grounds you flagged, that timing issue deserves substantial attention in discussing CMS’s new authority.
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