Healthcare Sanction Checks: A Complete Guide

Healthcare workers and providers help people through some of the most difficult moments in their lives. They have access to vulnerable patients, valuable information, and potentially dangerous drugs and controlled substances. 

These are inescapable realities of working in the healthcare field, so individuals and entities in these positions should undergo a thorough vetting process. It makes sense that these processes would be in place to keep patients safe from harm.

Background checks are standard practice in many industries. They screen for people who may pose a threat or risk of harm in a given position and help maintain compliance with industry standards. 

Screenings in healthcare are even more thorough due to the sensitive nature of the job. Here, we’ll cover what a sanction check is in healthcare, the importance of healthcare sanctions, and more.

What Is a Sanction Check in Healthcare?

Sanction checks are a type of background check specific to the healthcare field. These checks search several state and federal databases to see if the individual (i.e., an employee) or organization (like a doctor’s practice) has been sanctioned.

A sanction in this context is a disciplinary action handed down by a regulatory board that prevents an individual or entity from working in the healthcare field due to past unethical or even criminal conduct. It’s important to note that the person need not have been convicted of a crime for them to receive a sanction. 

Sanctioned individuals and entities pose a risk to patient’s safety, privacy, and standard of care. They also pose risks to any organization that retains them. For this reason, healthcare organizations should conduct sanction checks of employees at regular intervals to protect their patients and themselves.

What’s Included in a Healthcare Sanction Screening?

 Most healthcare sanction screenings include searches of the following databases:

• Fraud Abuse Control Information System (FACIS) check
• Office of Foreign Asset Control (OFAC) check
• State-specific debarment or exclusion lists
• General Services Administration System for Award Management (SAM)
• Department of Health and Human Services (DHHS) Office of Inspector General (OIG) List of Excluded Individuals/Entities (LEIE)

What Is an OIG Sanction Check?

An Office of Inspector (OIG) sanctions check searches the List of Excluded Individuals/Entities, a federal database and one of the major components of any sanctions screening. 

Individuals and entities on the LEIE are excluded from participating in federal programs like Medicare or Medicaid. OIG search results also show when and why the sanctions were issued and if they’re still active. 

The LEIE is reserved for serious transgressions, such as:

• Patient abuse or neglect
• Felony convictions for illegally prescribing, dispensing, manufacturing, or disturbing controlled substances
• Felony convictions for financial misconduct, such as fraud or theft
• Criminal convictions relating to Medicare or Medicaid fraud.

What Is the Importance of Healthcare Sanctions?

Healthcare sanctions serve several important purposes. Violating them can lead to severe consequences for both patients and organizations. 

Protect Patient Safety

The primary purpose of sanctions and sanction checks is to protect patients. Assuming the role of a patient creates inherent vulnerability for that individual,; they trust that healthcare organization with their health and most sensitive information. Healthcare organizations must safeguard patient health and well-being, including their privacy and medical information. 

Individuals or entities that carry sanctions often do so for violating or failing these obligations and pose a real threat to patient safety. For example, common reasons for sanctions include abusing or neglecting patients, stealing medications, drugs, or equipment, selling or seriously mishandling patient information, and certain criminal convictions. 

Conducting regular sanction screenings helps ensure potentially dangerous people don’t have access to patients or their records. 

Protect Your Organization’s Reputation

Sanctions screenings don’t just protect patients; they also protect organizations. An organization that employs an individual in violation of their sanctions can face hefty fines and significant liability.

Organizations can also be subject to legal and civil suits for damages resulting from retaining a sanctioned individual or organization. Conducting periodic sanction checks can protect your organization from these situations and prevent harm to your patients, reputation, and bottom line. 

Maintain Federal Funding Eligibility

The Department of Health and Human Services creates guidelines and regulations for organizations that receive funding from certain federal programs like Medicaid and Medicare. In most circumstances, these regulations prohibit participating organizations from employing sanctioned individuals. 

Organizations that violate DHHS regulations aren’t just faced with disciplinary fines – they can also lose their eligibility to receive federal funding. Loss of Medicare and Medicaid eligibility is a devastating financial blow, as these two programs are some of the largest health insurance providers in the country. This loss of eligibility can also decimate an organization’s reputation – very few people would feel comfortable seeing a provider who’s been barred from Medicare or Medicaid. 

What Does It Mean When a Provider Is Sanctioned?

Sanctions are serious disciplinary actions administered by administrative or governing bodies, such as the OIG. They’re given when a provider has violated policies or laws enforced by those agencies. Serious violations that result in sanctions include offenses like patient abuse, fraud, theft, and stealing or selling controlled substances. 

Providers who carry a sanction pose a threat to patient safety and wellness. They may temporarily or permanently lose their rights to practice and their licenses or may be barred from working in the healthcare field altogether. 

What Can You Learn From a Healthcare Sanctions Check?

There are several methods for conducting a sanctions check. There are many databases that may record sanctions or other disciplinary actions, and they aren’t necessarily connected. This fact is especially true with state-run databases; out-of-state agencies may not have regular access to another state’s databases, which can result in incomplete checks. 

The information yielded by the search depends on how it was done and what level of search was conducted. 

Some of the most common databases used in these checks include:

• The OIG LEIE, which shows sanctioned individuals or organizations who’ve been barred from participating in federally funded programs
• The SAM database shows organizations or contractors who are banned from working for the government
• A FACIS check shows any disciplinary actions, penalties, or suspensions levied on a healthcare worker

Reports also usually include details about the nature of the violation or sanction, the agency that imposed it, when it was imposed, and if the sanction or exclusion is still active. 

When Should You Conduct a Healthcare Sanctions Check?

Organizations have a responsibility to ensure the safety and privacy of their patients. One of the most effective ways to do this is to conduct regular sanction checks, at set intervals and on a rolling, periodic basis. 

Before Hiring a Candidate

Many industries require background checks before hiring a candidate; healthcare is no exception. A thorough sanctions check should be part of every healthcare hiring process. 

These checks help identify dangerous individuals or contractors before they have access to patients and opportunities to cause more harm. It can also protect that organization from being subject to fines and liabilities for hiring someone in violation of a sanction. 

Before a New Hire’s Starting Date 

It is also a good practice for companies to conduct a secondary sanction check before the new hire’s start date, as a person’s name can take a while to appear on a sanctions list. These lists are updated periodically, but the time elapsing between the first check and their state date makes it wise to run a second check before they begin working.

On a Periodic Basis 

OIG recommends organizations conduct monthly checks in addition to the standard checks performed before a new employee or contractor is hired. While states are mandated to report healthcare exclusions and sanctions to the OIG, there can be a lag between the report being filed and when it populates on the OIG LEIE list. 

Conducting regular checks helps ensure nothing falls between the gaps. Doing so is especially important for large organizations and those that retain temporary or traveling employees or contractors. 

There’s been a massive increase in traveling healthcare workers since the COVID-19 pandemic. These workers often work for a central contracting agency and work in many different states on temporary contracts. Sanctions or violations for employees of this nature may take a while to populate a federal database since they tend to work in several states over a short period of time, making regular checks essential. 

Final Thoughts

Sanction checks are an essential part of screening in the healthcare field. These checks often search several state, federal, and even international databases for information on an individual or entity. 

The importance of these checks cannot be overstated. These checks can show if someone has been sanctioned for dangerous behavior and help keep patients safe. Not only that, but they can save a healthcare organization from hefty fines and penalties. 

It’s recommended to conduct these checks before hiring a candidate, before a new hire’s start date, and periodically to make sure nothing falls through the cracks. 

Fortunately, with ScoutLogic, it’s easy. At ScoutLogic, we can help organizations conduct healthcare background checks during the hiring process and regularly, ensuring compliance and safety. 

David Garcia

David Garcia, co-founder and CEO of Scout Logic, is an industry leader in the bulk background check world. With his strategic acumen and expertise in the HR sphere, specifically in hiring, recruiting, legal compliance, background checks, and resume screening, he’s an invaluable asset and consultant.

David's counsel extends across the boards of ScoutLogic, YipitData, and Supplier.io, drawing from his impactful stints on the boards of Infutor and Avetta. With an extensive 25-year journey, he champions unparalleled B2B commercial leadership within data & analytics, significantly shaping the HR landscape.