Why Healthcare Sanction Screening Produces So Many False Positives — And How to Fix It
Every healthcare compliance team knows how dangerous working with an excluded entity can be for their patients, reputation, and bottom line. But what happens when a compliance team flags an individual as a potential risk—only to discover the match was completely legitimate?
This article explores how false positives occur in healthcare sanction screening and what organizations can do to minimize their frequency and impact.
What is a False Positive in Sanction Screening?
A false positive occurs when a legitimate individual or entity is mistakenly flagged during sanction screening. Exclusion lists such as the Office of Inspector General’s (OIG) List of Excluded Individuals and Entities (LEIE) may feature individuals or entities that are flagged simply because they share a name with an excluded party, leading to the appearance of a compliance risk.
In the best-case scenario, the compliance team quickly determines that the match is a false positive and clears it with no further action. Even then, false positives generally create extra work for compliance teams and lead to wasted resources.
Four Reasons Healthcare Sanction Screening Produces False Positives
False positives are common across many sectors, but healthcare faces a heightened risk of false positives due to several unique factors, including:
1. Entity Volume
The latest estimates suggest there are approximately 17 million people working in the U.S. healthcare industry. With a finite number of names and nearly 2,000 names added to the LEIE in 2025 alone, the statistical likelihood of a new hire or vendor sharing the name of an entity on an exclusion list is high.
2. Manual Screening
Many healthcare compliance teams still screen exclusion lists manually, which introduces two major challenges that make false positives harder to identify and resolve quickly:
- Lack of Controls: The sheer volume of screening is already a heavy burden on compliance teams. Adding secondary identifiers, such as date of birth or National Provider Identifiers (NPIs), increases the workload and is often skipped to save time.
- Human Error: The repetitive process of typing names into an exclusion database can lead to oversights and errors, such as misspelling an entity’s name, which increases the likelihood of a false positive.
3. Data Issues
The accuracy of sanction screening depends heavily on the quality of the underlying data. Two common data-related issues frequently contribute to false positives:
- Outdated Data: Many sanction screening tools do not update exclusion databases frequently enough. As a result, entities that have been removed from a list may continue to be falsely flagged.
- Limited List Data: Limited List Data: Some healthcare exclusion lists feature limited information about excluded individuals. For example, the System for Award Management (SAM) exclusion records often include limited identifiers, creating more room for error and making it difficult to distinguish legitimate entities from excluded ones.
4. Database Overlaps
Healthcare organizations must scan multiple exclusion lists, which creates more opportunities for false positives. While an individual might not share a name with anybody on the LEIE, there are several other exclusion lists healthcare companies must consider, increasing the statistical likelihood of a false positive.
Why False Positives Are Dangerous for Healthcare Organizations
While false positives are not inherently harmful, when handled poorly or slowly, they can become costly for healthcare organizations:
- Delay Onboarding: When an individual or vendor is flagged as excluded, onboarding is typically paused until the issue is verified. In some cases, this can lead to a significant delay in onboarding and strain relationships with new hires or vendors.
- Legal Repercussions: Individuals or entities that are falsely flagged and experience adverse consequences may have grounds to pursue legal action for unlawful discrimination or unfair dismissal. While this is relatively rare, particularly if the issue is identified quickly, it is a risk that compliance teams cannot ignore.
- Wasted Resources: The process of verifying false positives and investigating the issues can divert already-limited compliance resources away from high-risk compliance activities.
For these reasons, reducing false positives should be a priority for healthcare compliance teams. Fortunately, there are several proven tactics that can improve sanction screening accuracy.
Six Steps to Avoid False Positives in Sanction Screening
Healthcare organizations can significantly reduce false positives by implementing a systematic approach to sanction screening. The following six steps provide a framework for building a more accurate and efficient screening process:
1. Introduce Screening Software
Eliminate the tedious manual work of screening using automated software. Automation will immediately help to avoid human error associated with heavy workflows and enable more frequent screening across a wider range of exclusion lists, ensuring programs are fully compliant and secure.
2. Leverage Multiple Identifiers
Relying on name-only matching is one of the primary causes of false positives. Advanced screening solutions use multiple data points, including date of birth, Social Security numbers, NPIs, and addresses, to differentiate between individuals who share similar names. This multi-factor matching approach dramatically increases accuracy and helps quickly distinguish between legitimate entities and excluded individuals.
3. Automate Batch Screening and Re-screening
Batch screening allows you to process entire populations simultaneously, creating efficiency and ensuring comprehensive coverage. Automated re-screening continuously checks records against updated exclusion databases, identifying true matches quickly while maintaining ongoing compliance without manual intervention.
4. Apply Risk-Based Segmentation
Not all roles carry the same level of compliance risk. Screening programs should apply different levels of scrutiny based on factors such as job function, access to federal programs, and billing authority. High-risk positions warrant more frequent re-screening, while lower-risk roles require less intensive monitoring. This approach helps organizations allocate limited compliance resources where they matter most.
5. Maintain Clear Audit Trails and Reporting
An effective screening system should automatically generate detailed audit trails capturing who was screened, when, against which lists, and what actions were taken. This documentation helps quickly resolve false positives and demonstrates compliance during audits. Robust reporting capabilities also help identify patterns in false positives, enabling compliance teams to refine screening parameters over time.
6. Involve Human-in-the-Loop Validation
Every flagged case should be reviewed by a trained compliance professional who can evaluate match quality and make a final determination. Human validation ensures that true exclusions are not missed while preventing legitimate individuals or entities from being unnecessarily blocked. Combining automated efficiency with human expertise creates a screening process that rapidly clears false positives while reliably catching genuine exclusions.
Scale Sanction Screening While Managing False Positives with Compliance Resource Center
Building an automated sanction screening system often involves a trade-off: higher screening frequency can increase false positives. At Compliance Resource Center, we built our software to deliver both scale and accuracy.
Our sanction screening software allows compliance teams to instantly search all relevant exclusion lists and verify individual and vendor identities with ease. Using built-in verification checks, we minimize and quickly identify false positives to ensure your team can focus on real exclusions.
Learn how our software can help keep your organization compliant and efficient.
Subscribe to blog