To avoid Civil Monetary Penalties, healthcare organizations must screen new hires and regularly monitor current employees and vendors against OIG Exclusions, SAM.gov, and all State Medicaid Provider Termination Lists. But who needs to be screened sometimes is not so clear.
Healthcare Providers are responsible for ensuring compliance with the exclusion statutes for anyone who provides items or services, directly or indirectly, in whole or in part, that are payable by federal healthcare programs, including Medicare, Medicaid, TRICARE, and the Children’s Health Insurance Program (CHIP).
This is not limited to direct billers. Services identified by the OIG include transportation service providers, administrative services, medical equipment suppliers, billers and coders, and pharmacists.
Providers are liable for overpayments made for any items or services provided by any excluded person for which the provider received reimbursement from federal healthcare programs. Additionally, the provider may face Civil Monetary Penalties (CMP) if they fail to ensure that proper exclusion screening has been conducted.
Key Individuals and Entities to Screen
- Employees: All staff, including administrators, directors, managers, billing, and support staff, not just those with direct patient care.
- Contractors and Vendors: Third-party providers, Medical Equipment Managers, IT solutions, Food Service Workers, Security, Staffing agencies, Ambulance and Other Transportation Service Providers.
- Medical Professionals: Physicians, nurses, pharmacists, and lab technicians.
- Leadership: Board members, officers, and owners.
- Others: Volunteers, interns, and students in training.
When in doubt as to who should be screened, providers may want to consider that the OIG has stated that civil penalty liability is “greatest for those persons that provide items or services integral to the provision of patient care.“
Even if someone isn’t directly providing care, they might still be involved in billing, patient records, or managing payments for federal programs. These roles are critical, and OIG exclusion checks should apply here.
Think of anyone supplying medical equipment, pharmaceuticals, or services to a healthcare organization. Just because someone isn’t a full-time employee doesn’t mean they shouldn’t be checked. They must pass an OIG background check if they provide goods or services involving federal funds.
Volunteers can be involved in patient care or sensitive healthcare operations in specific settings. While not always required, screening volunteers can help ensure the organization maintains compliance with federal regulations.
Screening Contractors and Vendors
In the HHS-OIG 2013 Special Advisory, the OIG suggests two options when it comes to screening contractors and vendors:
- (1) providers themselves may screen their contractors’ or vendors’ employees, or
- (2) A provider may rely on a contractor’s or vendor’s certification that the contractor or vendor is conducting screening of its own employees and contractors.
OIG recommends that providers verify that their contractors are conducting screening on their behalf. One way providers can validate this information is by requesting and maintaining screening documentation from the contractor.
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Frequently Asked Questions
Requirement
Federal database checks—42 CFR Part § 455.436 requires all Medicare Advantage Plans, all State Medicaid Programs, and all Medicaid Managed Care Organizations to confirm through routine Federal database checks the exclusion status of providers.
Compliance
The Office of Inspector General (OIG) mandates screening to prevent fraud, abuse, and patient neglect.
Financial Risk
Hiring an excluded individual can result in substantial Civil Monetary Penalties (CMPs) and repayment obligations.
Section 6501 of the Affordable Care Act (ACA), Termination of Provider Participation Under Medicaid if Terminated Under Medicare or Other State Plan, requires State Medicaid programs and the Children’s Health Insurance Program (CHIP) to terminate the participation of any individual or entity that has been terminated from Medicare or any other State’s Medicaid program for cause.
This provision is intended to enhance program integrity by ensuring that federal funds do not reach providers excluded for serious offenses, such as fraud or abuse, regardless of the originating State’s termination.
However, a terminated provider could still work at healthcare organizations if they don’t provide services that are billable to Medicare. If they don’t bill Medicare directly for their services, they can still work in administrative roles at healthcare organizations.
For instance, a nurse practitioner who has been terminated (but not excluded) from Medicare could take on a different position at a hospital, as long as the services provided are not directly billable to Medicare.
Federal database checks—42 CFR Part §455.436 regulations require State Medicaid agencies to do all the following:
(a) Confirm the identity and determine the exclusion status of providers and any person with an ownership or control interest or who is an agent or managing employee of the provider through routine checks of Federal databases.
(b) Check the Social Security Administration’s Death Master File, the National Plan and Provider Enumeration System (NPPES), the List of Excluded Individuals/Entities (LEIE), the System for Award Management (SAM), and any such other databases as the Secretary may prescribe.
(c)(1) Consult appropriate databases to confirm identity upon enrollment and re-enrollment; and
(c)(2) Check the LEIE and SAM no less frequently than monthly.
Both OIG Exclusions and SAM Exclusions are required because they serve distinct, though overlapping, purposes in protecting federal funds and programs.
OIG (Office of Inspector General) exclusions target individuals/entities prohibited from participating in Medicare and Medicaid. Whereas, SAM (System for Award Management) debarments cover broader exclusions from all federal contracts, grants, and loans.
Different Scope & Authority
OIG focuses on healthcare fraud/patient harm. SAM covers a wider range of actions, including non-healthcare fraud, tax delinquency, and national security violations.
No One-to-One Overlap
An individual might be excluded from Medicare by the OIG but not yet listed in SAM, or vice versa (e.g., a contractor debarred from federal construction projects for fraud who then applies to a clinic).
Legal Compliance and Penalties
Federal law prohibits the use of federal funds (Medicare/Medicaid) to pay any excluded provider. Hiring or contracting with an entity listed on either database can result in severe civil monetary penalties (CMPs) and loss of funding.
Completeness
While the OIG’s List of Excluded Individuals and Entities (LEIE) is specific, SAM often includes actions from multiple federal agencies, making it a more comprehensive federal screening tool overall.
In short, auditing both databases is necessary to ensure complete compliance and avoid liability, as they are not always synchronized, and a “clean” record on one does not guarantee exclusion from the other.
According to the OIG’s Special Advisory Bulletin issued in May 2013, the OIG recommends that healthcare organizations check their employees and contractors against the LEIE monthly.
42 CFR Part § 455.436(c)(2) Federal database checks states, “check the LEIE and SAM no less frequently than monthly.”
Monthly screening is mandatory in at least 14 States, while many others strongly recommend that providers screen employees and vendors against their State lists and the LEIE monthly.