Corporate Compliance

Debarment lists, employees, and contractors

Compliance Monitor, January 13, 2005

Q: We are a continuing care-community. We check the Office of Inspector General (OIG) and General Services Administration (GSA) debarment lists for our contracted services. We have a number of vendors with whom we conduct sporadic business--from the local produce farmer to the local flooring company that installs carpeting in an independent living apartment to a paper supply company from which we purchase office supplies. Can you provide guidelines on identifying noncontracted vendors that should be checked with the debarment lists?

A: As compliance professionals are well aware, the OIG is authorized by the Department of Health and Human Services to exclude individuals or entities from participation in federal healthcare programs for conduct involving fraud, waste, or abuse. Excluded persons include any individual or entity that is currently excluded, debarred, suspended, or otherwise ineligible to participate in federal healthcare programs. The scope and effect of program exclusion includes the following principles:

  • No federal healthcare program payment can be made for any items or services furnished by the excluded individual or entity
  • The payment ban applies to all methods of federal program reimbursement, whether payment results from itemized claims, cost reports, fee schedules, or prospective payment system (PPS)
  • The payment prohibition extends to payment for administrative services not directly related to patient care, and even when federal payment is made to another provider or supplier (e.g., a hospital that employs an excluded individual)
  • No federal payment can be made to cover an excluded individual's salary, expenses, or fringe benefits, regardless of whether the individual provides direct patient care

Civil monetary penalties can be imposed against healthcare providers or entities that employ or enter into contracts with excluded individuals for the provision of items or services to federal program beneficiaries.

Although organizations typically screen potential employees upon hire, there is always a risk that a new employee--although satisfactorily screened before employment--can become subsequently excluded for conduct arising from their prior employment after you hire them.

To identify these individuals, organizations should conduct ongoing screening of current employees. This can be accomplished through your compliance office and human resources review of updated lists of excluded individuals, which is published regularly by the OIG on a regular basis. The list is published several times per year in the Federal Register and can be compared to the organization's existing employee database to identify any changes in the status of current employees.

This question was answered by Julie Chicoine, JD, RN, CPC, compliance director, The Ohio State University Medical Center, Columbus.

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