Healthcare Exclusion Monitoring in 2025 & Beyond: Why It Matters More Than Ever for MSPs

Blog
June 27, 2025

A single oversight in screening for excluded healthcare providers can spiral into a financial nightmare. The OIG can levy penalties of up to $10,000 for each service rendered by an excluded individual, along with up to three times the amount that was billed for those services. Repeated violations or high-volume claims can rapidly escalate costs, compounded by overpayment liabilities, legal fees, and operational disruptions, making compliance critical for hospitals.

In 2025, managing healthcare compliance isn’t just about checking boxes – it’s about patient safety, community stewardship, and reputation.

Let’s explore the HHS-OIG’s exclusion monitoring requirements and how proactive and well-prepared MSPs can play a key role in protecting patient safety and strengthening the financial integrity of the healthcare organizations they serve.

While healthcare providers are responsible for exclusion monitoring, Managed Service Providers (MSPs) can play a vital role in supporting the healthcare industry with technology solutions that automate this mandated process. For MSPs supporting healthcare providers, a strong exclusion monitoring process is more than a compliance necessity – it’s a strategic advantage that differentiates them from competitors.

What Exactly Is Exclusion Monitoring?

At its core, exclusion monitoring is the routine process of checking names – employees, contractors, vendors – against government databases that list people or organizations banned from participating in programs like Medicare, Medicaid, or TRICARE. The OIG’s (Office of Inspector General) List of Excluded Individuals and Entities (LEIE) is the most well-known.

Individuals end up on these lists for serious reasons, such as:

1. Committing healthcare fraud
2. Patient abuse or neglect
3. Losing their professional license
4. Financial crimes tied to Medicare/Medicaid
5. Drug-related violations.

Monitoring exclusions is critical, as unknowingly contracting with anyone on this list can expose your clients to regulatory violations, hefty penalties, and reputational damage.

New MSPs: The Technology Enablers, Not the Enforcers

MSPs do not manage exclusions directly. Instead, they provide automated compliance solutions that help healthcare organizations:

1. Conduct real-time exclusion screenings
2. Integrate monitoring tools into HR and vendor management systems
3. Maintain audit trails for regulatory reporting
4. Reduce manual errors and compliance risks.

By offering cutting-edge exclusion monitoring technology, MSPs empower healthcare providers to meet their compliance obligations efficiently.

Why MSPs Should Prioritize Exclusion Monitoring Solutions

The healthcare industry and its reliance on managed services are growing fast. In 2024, the global managed services market surpassed $335 billion and continues on a strong growth trajectory. Meanwhile, the healthcare compliance software industry is forecasted to approach $12 billion by 2034, signaling rising demand for regulatory solutions.

Why does this matter? As MSPs take on more responsibility for healthcare systems—from infrastructure to data to vendor management – they’re also becoming more accountable for compliance. And government agencies are paying attention. For example, in its most recent report, the OIG forecasted over $7 billion in expected recoveries – proof that enforcement is ramping up.

Although MSPs are not legally responsible for exclusion monitoring, they can enhance their value by providing robust compliance tools. The demand for automated exclusion screening software is growing, with the healthcare compliance sector projected to reach $12 billion by 2034. MSPs that integrate exclusion monitoring into their service offerings can:

1. Strengthen client trust
2. Expand revenue streams through compliance-as-a-service
3. Reduce risk exposure for healthcare organizations.

A Real-World Warning

A regional hospital recently made headlines for missing an exclusion. They unknowingly employed a nurse who had lost their license and was later added to the OIG’s list. The result? A $450,000 penalty, mandatory repayments, damage to the hospital’s reputation, and months of external monitoring. All because no one caught the update.

Turning Compliance Into a Business Advantage

The good news? Forward-thinking MSPs are already turning exclusion monitoring into a value-added service. Here’s how:

1. Stronger client loyalty: Clients trust partners who protect their reputation and bottom line
2. New revenue opportunities: Compliance services can be bundled into long-term contracts
3. Less risk for you: Protect your own business by managing third-party exposure
4. Brand credibility: Become known as a go-to expert in healthcare compliance.

What’s on the Horizon

Looking ahead, a few trends are worth watching:

1. Enforcement is only going to get stricter
2. Regulators may soon require automation
3. Exclusion rules may expand to cover more roles and relationships
4. States are rolling out their programs, adding layers of complexity

For MSPs operating on a global scale, cross-border compliance is increasingly emerging as a critical consideration.

Now Is the Time to Act

Exclusion monitoring is no longer a service you should ignore. It’s fast becoming the secret weapon for MSPs to safeguard clients and grow. As the industry leans harder into digital transformation, MSPs who offer and support technology solutions that automate regulatory imperatives will be in the best position to succeed.