When and Why to Use Sanctions Checks

Jim Akin

For employers and job applicants in the healthcare field and in other regulated industries, a sanctions check is a critical step in the hiring process. Ensuring that job candidates and employees are not listed in any of several government employment-ban lists is more than a good ideadepending on your business, it may be the law.

Violating these exclusion rules can bring hefty fines and even lengthy jail sentences. And while the feds provide free tools to help companies comply with its requirements, using them can be tricky, and even risky for all non-expert users.

Here’s an overview of what these sanctions are, and tips on how to navigate them.

Healthcare Sanctions Check: Medical Exclusions

The US Department of Health and Human Service Office of the Inspector General (OIG) maintains a list of individuals who are excluded from participation in federal and state healthcare programs—it’s called the OIG Exclusions list. Healthcare organizations that provide care to patients who receive benefits under these programs, such as Medicare and Medicaid, are prohibited from employing sanctioned or excluded individuals or vendors who are included on the OIG Exclusions list (also known as the healthcare sanctions list).

Between June 2017 and July 2018, in a crackdown focused on unlawful distribution of opioids, the OIG issued exclusion notices to 587 healthcare providers, including doctors, nurses, and pharmacists—an increase of nearly 99% over the preceding year.

The healthcare sanctions list includes persons convicted of:

  • Making fraudulent Medicare or Medicaid claims
  • Committing other forms of healthcare fraud
  • Neglecting or abusing patients, or other patient-related medical misconduct
  • Theft, financial fraud, or illegal distribution of controlled substances

The amount of time an individual's name stays on the healthcare sanctions list varies according to the nature of the sanctions against them. Some criminal convictions require staying on the list for specific durations (for example, five or 10 years). In cases of suspended or revoked licenses, individuals can request to be removed from the list once their licenses have been restored. Removal from the list is never automatic; in all instances, listed persons must formally ask to have their names taken off the list—a process the OIG calls reinstatement.

A Word of Caution About Using the OIG Sanctions Database

The OIG’s sanctions database is open to the public and searchable from any web browser. Entering the name of a company or individual into the database allows searching for listed exclusions. Matching results can be verified by entering a Social Security number (or employer ID number in the case of companies and contractors).

While the free OIG sanctions search tool is useful for job candidates who may be concerned they’re on the exclusions list, it’s less reliable for employers looking to hiring workers for healthcare-related positions. Social Security numbers are not available for every entry in the exclusions list, so verification is not always possible—and a candidate intent on skirting the system could always supply a bogus Social Security number.

Healthcare Sanctions Screenings in the Hiring Process

Aside from avoiding hiring persons with criminal histories or questionable credentials, there are strong financial reasons to avoid overlooking required healthcare exclusions.

The OIG can impose fines (known as civil monetary penalties, or CMPs) of $10,000 per violation on companies that hire or do business with persons on the sanctions list.

And there are risks to being overly cautious about exclusions, as well: Common names may yield multiple matches in the system, and refusing to hire a candidate based on a misidentification could be grounds for an anti-discrimination lawsuit.

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Sanctions Searches as Part of a Background Check

Healthcare sanctions searches are an important part of a comprehensive pre-employment screening. Combining a sanctions search with Social Security number verification and other crosschecks can prevent the kinds of misidentification that may occur when an OIG sanctions search is the only screen used.

Many healthcare employers opt to extend their sanctions checks beyond the minimum required by federal law, looking beyond the OIG Exclusion list for professional sanctions and convictions at the state level. GoodHire takes the following three-tiered approachwhich is similar to the Fraud and Abuse Control Information System (FACIS) searches used by many professional background check companies.

  • In addition to an OIG database search, a Level 1 search uncovers infractions, including license suspensions, recorded in dozens of other federal databases, such as those maintained by the Veteran’s Administration, Food and Drug Administration, and Department of Homeland Security.
  • A Level 2 search expands on a Level 1 check by searching databases maintained by 38 states, listing individuals that have been excluded from Medicaid coverage and their grounds for doing so. A Level 2 search also includes states’ lists of individuals who are ineligible for Medicare coverage because they voluntarily opted out of the program.
  • A Level 3 search encompasses everything included in a Level 2 search, but also searches the medical-board records in states that permit it, uncovering any disciplinary actions against a candidate, and also searches additional state-level abuse databases.

Financial Services and Global Sanctions Checks

The Patriot Act legislation, passed in the aftermath of the 9/11 attacks, includes provisions to take steps for preventing suspected terrorists and enemy states from abusing US funds. To that end, the Office of Foreign Asset Control (OFAC), a branch of the US Treasury Department, maintains a database of individuals and organizations barred from conducting business with US companies. The rules also forbid US companies from hiring individuals on the OFAC sanctions list.

Like the OIG sanctions list, OFAC’s database is available for public use on the web, but it’s more complicated than the OIG tool—and penalties for misusing it are more severe as well.

OFAC violations, which encompass crimes such as arms smuggling and money laundering along with hiring unauthorized individuals, can command penalties as high as $1 million and jail sentences of up to 20 years.

Some background check providers, including GoodHire, include OFAC sanctions searches in its Standard criminal background check package. If a candidate turns up on an OFAC screen, the screening report will provide that information, and provide the candidate with an opportunity to explain the conviction.

Sourcing Sanctions Searches

The logic behind healthcare and financial sanctions searches is easy for hiring managers to understand, but the details of conducting them are tricky, despite the availability of public databases. For many hiring managers, it makes sense to trust the process to experts in employment screening and compliance with fair-hiring regulations.

For peace of mind, start your sanctions checks with GoodHire today.

 

Jim Akin

Jim Akin

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Jim Akin is a Connecticut-based freelance writer and editor with experience in employee relations, media relations, and social-media outreach. He has produced content and managed internal communications, business-to-business outreach, and consumer-focused campaigns for clients including Experian, VantageScore Solutions, Pitney Bowes, Medtronic, Microsoft, and Coca-Cola.

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