The Office of Inspector General (OIG) has the authority to exclude individuals and entities from participation in federally funded healthcare programs for many reasons, including a conviction for Medicare or Medicaid fraud. The OIG maintains a list of excluded individuals and entities, the List of Excluded Individuals/Entities, against which a plan sponsor must check its workforce, board of directors and contractors. In addition, through the System for Award Management (, the General Services Administration (GSA) compiles a database of debarment actions taken by other federal agencies, such as the Central Contractor Registry, the Online Representations and Certifications Application, the Federal Agency Registration, and the Excluded Parties List System. There are also state Medicaid exclusion databases that should be monitored as part of your screening process.

More than 40 states have Medicaid exclusion lists that contain a significant number of individuals/entities NOT found on GSA/SAM Lists. OIG/GSA Reinstatement does not always impact State Exclusions.

Disqualifying Offenses. When we think of exclusions, we tend to think of providers engaging in kickbacks and self-referrals, improper billing, conflicts of interest and pharmacy fraud, but there are other offenses that may impact anyone with whom you conduct business. Rewarding someone for a business referral for example, is an acceptable practice in many industries, but can be considered a crime in the context of federal healthcare programs. Consider the following potential exclusionary offenses:

  • Defaulting on a health education loan or scholarship obligation
  • License revocation due to professional incompetence or poor performance
  • Sexual assault
  • Patient abuse or neglect
  • Drug manufacture
  • Financial misconduct
  • Falsifying procurement applications
  • Misdemeanor conviction for drug/alcohol abuse

Scrutiny of Sponsor Fraud Programs is Increasing: While CMS eliminated direct scrutiny of exclusion monitoring from the Medicare Parts C & D Compliance Program Effectiveness Program Audit Protocols, it should not invite complacency. The requirements are still in force and questions may be raised through tracers and other oversight mechanisms. The OIG has put increasing pressure on CMS to further scrutinize sponsor Fraud, Waste and Abuse programs, collect more comprehensive fraud-related data and improve its ability to safeguard federal healthcare program funds and Medicare/Medicaid beneficiaries. Exclusion monitoring is one of the basics of a fraud program. However, despite clear guidance and messaging about the serious implications of noncompliance, (e.g., audit conditions, civil monetary penalties, and criminal fines/sentences) sponsors still struggle to reach 100 percent compliance.

Where Sponsors are Failing

ATTAC Consulting Group has identified the following common exclusion related audit deficiencies:

  • Sponsor’s compliance department did not have a process to ensure its governing body members were screened against the OIG/GSA exclusion lists prior to appointment.
  • Sponsor’s exclusion lists screening process did not include screening temporary contract employees prior to contracting.
  • Sponsor employed a consulting firm that only required checks of its employees against the GSA exclusion lists, omitting checks against the OIG exclusion list (or vice versa).
  • Sponsor did not maintain documentation demonstrating that all board members were screened prior to appointment, as well as monthly.
  • Sponsor relied on attestations from first-tier and related parties to confirm exclusion monitoring, but did not have adequate oversight to ensure the screenings were actually conducted.
  • Sponsor’s contracted temporary staffing agencies did not consistently retain records of the screening performed.
  • Sponsor’s compliance oversight activities were decentralized, and documentation was lost.
  • Sponsor allowed department heads to hire their own interns/volunteers and did not inform them they must be screened.

Ten Steps for Exclusion Monitoring Compliance

  1. Written standards: Documented policies should address accountabilities for sponsor-level and vendor federal and state exclusion monitoring activities, including reporting protocols and retention of records.
  2. Scope: Screen all employees, board members, contractors, consultants, temps, interns, volunteers and affiliates.
  3. Communication: Ensure all applicable individuals and entities understand responsibilities and the risks/penalties for hiring or contracting with excluded individuals.
  4. Accountability: Sponsors are accountable for first-tier and related parties’ compliance and should communicate expectations for disclosure of noncompliance.
  5. Centralize records: If departmental directors engage their own temps or interns, ensure every individual/entity is screened and supporting documentation kept in a centralized location (e.g., HR or compliance).
  6. Identify risk and assess effectiveness of current processes. If resources are not sufficient to ensure 100 percent compliance, consider outsourcing this function to a third-party vendor.
  7. Monitor and audit: Monitor internal processes consistently, and if you delegate the exclusion monitoring function, review monthly reports and audit periodically.
  8. Validate first-tier and related-party compliance: Compliance should not rely solely on annual compliance attestations. Sponsors must conduct periodic auditing to sample actual screening results.
  9. Discipline and corrective action: Noncompliance should be met with swift disciplinary or corrective action and reported to the applicable compliance committee and governing body. A gap in compliance can expose your organization to significant reputational and financial risk.
  10. Stay current on all regulatory requirements: Sponsors should follow existing processes for meeting CMS Preclusion List requirements and any credentialing, procurement and/or background check processes.

ATTAC Consulting Group is a nationally recognized leader in the design and implementation of effective compliance and anti-fraud programs for Medicare Advantage and Medicaid managed care organizations. Exclusion monitoring is only one of many critical steps to implementing an effective fraud, waste and abuse program. Contact ATTAC now for a wide range of compliance solutions.