Healthcare Sanctions Screening: An Expert Guide to Running Effective Background Checks  

Every healthcare compliance leader understands the importance of background checks. However, many organizations overlook a key aspect of checks that can put their patients, reputation, and finances at risk: sanction screening. 

Recognizing that nearly a third of healthcare organizations identified “upgrade sanction screening” as a top priority in the Healthcare Compliance Benchmark Survey, our experts developed a guide to support your next steps.¹  The following guide provides a clear overview of healthcare sanction background checks and explains how you can scale and improve your processes to reduce risk and protect your patients. 

Healthcare Sanctions Background Checks: An Overview 

What are Healthcare Sanctions? 

Healthcare sanctions are official actions taken to discipline an individual or entity for violating legal, ethical, or regulatory requirements. This covers a wide range of behaviors, from abusing patients to insurance fraud. Individuals or entities featured on sanction lists are barred from participating in federal healthcare programs and may be unable to work in the industry for a period of time. 

What is Healthcare Sanction Screening? 

Healthcare sanction screening involves searching all relevant databases to verify that an employee or third-party contractor is not featured on any exclusion lists. It is a form of background check and is a mandatory requirement during the hiring or onboarding process, just like other criminal checks or employment history assessments.  

Why Sanction Screening is Essential for Healthcare 

Most industries must assess exclusion lists during the hiring or onboarding process, but healthcare organizations are encouraged to reference an unusually high number of lists. In fact, research suggests that two to five percent of medical professionals are featured on a sanction list.² As a result, regular and frequent sanction screening is vital to: 

• Protect Patients: Excluded individuals may be guilty of historical neglect or abuse. Employing such individuals puts patients ‘ safety at direct risk and could implicate your organization in potential patient harm. The subsequent reputational damage can be severe, with organizations struggling to hire and retain staff in the future. 
• Maintain Contracts: Identifying excluded individuals and entities is essential to ensure Medicaid, Medicare, TRICARE, and other key health plan contracts are not compromised. For example, regular sanction screening is contractually mandated for federal and state health care contractors and their subcontractors. Failure to run background checks or identify excluded individuals may lead to a contractual violation, which could lead to heavy financial penalties or loss of contract. 
• Avoid Fines: Working with excluded individuals and billing for their services can lead to severe financial penalties, with two recent cases being forced to settle with the U.S Department of Health and Human Services Office of Inspector General (OIG) for six figures.³ Not only is care rendered by excluded individuals unbillable, but under 42 CFR 1003.102(a)(2), you may be liable to pay fines of up to $10,000 for each service provided by a sanctioned individual.⁴ 
• Avoid Litigation: Allowing individuals who have previously harmed patients to remain in your organization is not only an ethical violation, but it can also lead to legal action from patients who are put at risk by these excluded individuals.  

For these reasons, comprehensive screening is a critical priority for healthcare compliance leaders.  

Which Lists are Relevant to Healthcare? 

There are two primary federal lists that affect U.S. healthcare organizations:  

• LEIE: The OIG’s List of Excluded Individuals/Entities (LEIE) contains a complete list of currently excluded individuals and entities by OIG, pursuant to sections 1128 and 1156 of the Social Security Act. 
• SAM: The General Services Administration’s System for Award Management (SAM) is a repository of contracting actions, including contract exclusions, suspensions, and debarments, taken by six federal agencies.  

These are the two lists most healthcare leaders focus on, along with state Medicaid Exclusion lists. Our research shows that upwards of 70 percent of healthcare compliance programs check these lists.⁵ However, this leaves healthcare organizations at risk if they do not also regularly screen individuals and entities against the following exclusion lists: 

• TRICARE: The healthcare program for armed services, veterans, and families features a list of suppliers and services it does not cover. 
• NPDB: The National Practitioner Data Bank (NPDB) is a federal database managed by the U.S. Department of Health and Human Services (HHS) that tracks malpractice claims, disciplinary actions, and medical license restrictions against healthcare providers. 
• OFAC SDN: The U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) maintains the Specially Designated Nationals and Blocked Persons (SDN) list, which identifies individuals and entities that are excluded from operating in the U.S. 
• FDA Debarment List: The Food and Drug Administration (FDA) maintains a debarment database listing individuals excluded from participating in the development, testing, marketing, or distribution of drugs or medical devices due to various violations. 
• DEA Excluded Parties List: The Drug Enforcement Agency’s (DEA) Excluded Parties List features individuals convicted of drug-related violations who are not eligible to work in healthcare. 
• World Bank Debarred List: The World Bank maintains a list of organizations implicated in corruption or fraudulent activities related to global healthcare projects. 
• Licensing and Medical Boards: Various professional licensing and medical boards maintain records of healthcare professionals who have had their licenses revoked, suspended, or restricted due to misconduct or violations of professional standards.  

This raises an important question: how can you ensure thorough screening across all these lists? 

How Exclusion Checks Work 

Most exclusion lists make it relatively simple to identify whether an individual or entity is featured on the list. For example, the OIG maintains a searchable online database for the LEIE. Most healthcare compliance teams use this screen for individuals and entities, allowing them to input a name and evaluate potential matches. However, there are a series of factors that complicate matters and lead many compliance programs to struggle with sanction screening. 

Three Challenges for Healthcare Sanction Background Checks 

1. Manual Processes 

The sheer scale of sanction screening required is immense when you consider: 

• List Volume: There are ten separate exclusion lists identified above with limited overlap, making it essential to screen each list individually. The HHS’s database of Excluded Individuals and Entities (LEIE) alone includes over 3,000 businesses and nearly 80,000 individuals that may be excluded.⁶ 
• Throughput: Every individual and vendor must be screened regularly, which means larger healthcare organizations may be required to run thousands of names through each of those lists. 

What makes this particularly challenging is that most organizations still perform the screenings manually. Staff are expected to manually enter each individual’s and entity’s name, check the results, and validate any matches. Not only does this create a heavy lift for already-overworked compliance teams, but it creates an opportunity for costly human error. 

2. Frequency of Screening 

Exclusion lists are not static, and it is perfectly possible that an individual could be added to the LEIE or SAM after joining your organization. Compliance teams are therefore required to run regular screening to avoid compliance gaps and identify newly excluded individuals. 

The problem is that different lists are updated at different cadences. While the OIG updates the LEIE monthly, other lists are updated at different times throughout the year. This makes it difficult to keep up with the frequency of screening required, causing many organizations to fall behind and risk non-compliance. 

3. Accuracy and Validity of Exclusion 

Three critical factors make identifying excluded individuals or entities significantly more challenging: 

• False Positives: Most sanction screenings focus on individual names, but because many people share the same name, this often results in false positives – where someone is mistakenly flagged as being on an exclusion list simply because another person with that name appears on it. 
• Waivers: The LEIE features certain exceptions where excluded individuals may still be included in federal healthcare programs. This only occurs when the OIG deems a waiver to serve the public interest, which is not a common occurrence.⁷ These waivers add an extra consideration for compliance teams when screening exclusion lists. 
• Exclusion Period: While the LEIE database shows the exclusion type imposed, it does not state the exclusion period, which can vary from one year to permanent exclusion. As a result, an individual might be flagged, but their exclusion status may be unclear –  something compliance teams must be prepared to address.  

These considerations are important, as improperly penalizing an employee or vendor may expose an organization to significant legal liability. The OIG recommends that organizations place individuals identified through sanction screening on leave; however, if the individual is later found to not be excluded, this action could be considered mistreatment.  

How to Upgrade Your Sanction Screening Processes 

There are multiple well-established ways to improve the sanction screening process. Every healthcare compliance leader should: 

• Expand Background Checks: Ensure you are screening for inclusion of all lists cited above. 
• Increase Screening Frequency: Aim for monthly screening to match the OIG’s update cadence for the LEIE. 
• Test for False-Positives: Introduce an official system for evaluating and validating possible excluded individuals or entities.  

The reality is, these solutions are short-term and time-consuming. Most organizations lack the time and resources to implement them at scale, which is why demand for automated screening tools has grown dramatically in recent years. 

Why You Need Automated Software 

Automated sanction screening software runs exhaustive background checks for you and allows your compliance team to focus on other priorities. From batch processing sanction screening to automating the verification process, these tools empower you to: 

• Eliminate manual work and reduce the burden of regular screening. 
• Improve the accuracy and reliability of screening by removing human error. 
• Enhance timeliness with up-to-date data and faster processing. 

For many healthcare organizations with limited compliance resources, these automated tools are the only feasible way to scale sanction background checks. However, organizations should exercise caution when selecting which tools to use. 

Compliance Resource Center has built a sanction screening software to fill a clear hole in the market. Our tool is built specifically for healthcare organizations, covering the full range of exclusion lists that affect them and offering a range of exclusive features, like: 

• Automated alerts to help your compliance team act faster when an individual is flagged. 
• Documentation support to make regulatory reporting easier. 
• Verification processes that reduce false positives and protect you from wrongful action. 

Want to see how our sanction screening software would fit within your workflows?  

Book a Consultation 

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Frequently Asked Questions (FAQs) 

How Accurate Are Sanction Background Checks?  

According to our research, 35 percent of healthcare compliance leaders say the accuracy of their sanction screening is the compliance area they are most confident about.8 However, the accuracy of sanction background checks depends on the processes in place, including the presence of safeguards against false positives and the ability to screen across all applicable exclusion lists. 

Who Requires Background Checks? 

Both individuals and vendors must undergo regular screening. Healthcare providers, staff, and vendors, like medical supply companies, need checks to verify eligibility and avoid sanctions. It is also important to run background checks on volunteers and part-time employees. 

When are Sanction Background Checks Run? 

Sanctions screening should be run when a new individual or entity works with your organization. Organizations must follow up with frequent screening of their entire workforce and vendor network, ideally once per month, to match the update frequency of the OIG’s LEIE.    

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References:  

1. SAI360 & Strategic Management Services, LLC. (2022, May). Healthcare benchmark report [PDF]. Compliance.com. https://www.compliance.com/wp-content/uploads/2022/05/SAI360_SMSLLC_Healthcare-Benchmark-Report_FINAL-1.pdf

2. Verisys. (n.d.). Provider sanctions and sanction monitoring: Best practices. Verisys Blog. Retrieved [insert retrieval date], from https://verisys.com/blog/provider-sanctions-and-sanction-monitoring-best-practices/

3. Alder, S. (2024, November 11). Healthcare providers fined for failing to check the HHS-OIG exclusions list. The HIPAA Journal. https://www.hipaajournal.com/healthcare-providers-fined-hhs-oig-exclusions-list/

4. Department of Health and Human Services. (2011). 42 CFR § 1003.102 [PDF]. In Code of Federal Regulations (Vol. 5). U.S. Government Publishing Office. https://www.govinfo.gov/content/pkg/CFR-2011-title42-vol5/pdf/CFR-2011-title42-vol5-sec1003-102.pdf

5. SAI360. (2022, June). 2021 SAI360 healthcare compliance benchmark report [PDF]. SAI360. https://www.sai360.com/wp-content/uploads/2022/06/2021-sai360-healthcare-compliance-benchmark-report-pdf.pdf

6. U.S. Department of Health and Human Services, Office of Inspector General. (n.d.). LEIE downloadable databases. Retrieved [insert retrieval date], from https://oig.hhs.gov/exclusions/exclusions_list.asp

7. U.S. Department of Health and Human Services, Office of Inspector General. (n.d.). Waivers. Retrieved [insert retrieval date], from https://oig.hhs.gov/exclusions/waivers.asp

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