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What Is an OIG Background Check?

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Posted by: David Garcia October 17, 2024

If you’re in healthcare or hiring for healthcare roles, you’ve probably heard of an OIG background check, but it’s essential to differentiate it from other checks. It’s a specific type of screening required to ensure compliance with federal regulations. 

Employers must ensure their employees, contractors, or vendors aren’t excluded from participating in federally funded healthcare programs like Medicare or Medicaid. 

So, What Is an OIG Background Check?

An OIG background check is a specific type of screening that focuses on determining whether someone is on the OIG Exclusion List. OIG stands for the Office of Inspector General, a U.S. Department of Health and Human Services (HHS) branch. 

The OIG is tasked with enforcing healthcare fraud and abuse laws. One of its main jobs is tracking individuals and entities barred from participating in federally funded healthcare programs like Medicare and Medicaid.

In short, if someone is on this list, they can’t work with federally funded healthcare programs—no arguments, no appeal – just a blanket ban. Employers in the healthcare industry, from hospitals and nursing homes to healthcare suppliers, need to know if their employees or potential hires are on this list. If they don’t, they could face serious fines or even lose their ability to receive federal funding.

When conducting an OIG background check, you’re not just looking for criminal records or verifying employment history. You’re checking if the person or organization in question has been excluded from participating in federal healthcare programs. If they’re on the list, it’s a major red flag.

How Does Someone Get on the OIG Exclusion List?

So, the big question is, how does someone end up on this exclusion list? The OIG Exclusion List isn’t something you just land on by accident. It’s not like being late on a credit card payment or forgetting to return a library book. Getting excluded is serious business, and it can happen in one of two ways: either through a mandatory or a permissive exclusion.

Mandatory OIG Exclusions

Mandatory exclusions happen when someone is found guilty of certain serious offenses. These include:

  • Medicare or Medicaid fraud: If you’ve defrauded a federal healthcare program, that’s a fast track to exclusion. Fraud within the healthcare system is itself a massive industry. In July 2024, the FBI uncovered a $3 billion fraud scheme involving Medicaid, and that’s probably just the tip of the iceberg.
  • Patient abuse or neglect: This covers not only physical abuse but also financial exploitation or other forms of mistreatment.
  • Felony convictions related to healthcare fraud or controlled substances: If you’ve been convicted of a felony involving fraud or the illegal handling of controlled substances, you’ll be barred.

Mandatory exclusions are just what they sound like—they’re non-negotiable. If you’re convicted of one of these offenses, the OIG must exclude you. This typically lasts for a minimum of five years but can extend much longer depending on the case.

Permissive OIG Exclusions

Permissive exclusions are more subjective. These don’t necessarily involve a felony conviction, but they still raise serious concerns about someone’s ability to participate in federal healthcare programs. Permissive exclusions can include:

  • Misdemeanor convictions related to fraud or controlled substances: As mentioned above, fraud is taken extremely seriously, but more minor incidents might be conceded permissive.
  • License revocations or suspensions: If you lose your professional license, you might also find yourself excluded. Here, it depends on the reasoning behind a suspension. Seriously harm somebody because you performed surgery while under the influence, and you won’t be going anywhere near an operating theater anytime soon – if ever. If it’s a case of forgetfulness or sloppy paperwork, you might still have to pay with a suspension, but it may only be a time-limited revocation
  • Defaulting on health education loan payments: Believe it or not, you can end up on this list if you default on your federally-backed student loans. While less serious a crime than anything mentioned above – and considering the vast amount that medical students find themselves in debt, it is certainly more understandable – it’s still something to bear in mind. 

In these cases, the OIG has some discretion. They’ll consider the circumstances and decide whether exclusion is necessary to protect federal programs and patients.

Types of Candidates Who Should Undergo OIG Exclusion Screening

In the healthcare industry, everyone is screened for OIG exclusion—there’s simply no way to work without it. But let’s break it down a little more clearly.

Healthcare Providers: This includes doctors, nurses, pharmacists, and other professionals who interact with patients and federal healthcare programs like Medicare or Medicaid.

Administrative Staff: Even if someone isn’t directly providing care, they might still be involved in billing, patient records, or managing payments from federal programs. These roles are critical, and OIG exclusion checks should apply here.

Contractors and Vendors: Think of anyone supplying medical equipment, pharmaceuticals, or services to a healthcare organization. Just because someone isn’t a full-time employee doesn’t mean they shouldn’t be checked. If they provide goods or services involving federal funds, they must pass an OIG background check.

Volunteers: In specific settings, even volunteers can be involved with patients or sensitive healthcare operations. While not always required, screening volunteers can help ensure the organization maintains compliance with federal regulations.

Why It’s Important for Employers To Conduct OIG Screenings

Conducting an OIG screening might seem like an annoying extra step in what is an already lengthy process, but it’s a critical part of the hiring process for a number of reasons:

Fines and Penalties: If you hire someone on the exclusion list and they’re involved in federal healthcare programs, your organization can face massive fines. We’re not talking pocket change—penalties can run into tens of thousands of dollars for each item or service the excluded individual was involved in. There’s a maximum fine of $500,000 for organizations and $250,000 for individuals. 

Loss of Federal Funding: The federal government takes this seriously. If your organization is caught employing excluded individuals, you could lose access to Medicare, Medicaid, or other federally funded programs altogether. For most healthcare organizations, that’s a death sentence.

Reputation: Healthcare is about trust. Patients, clients, and even investors expect your organization to be above board. If it comes out that your staff includes excluded individuals, that trust evaporates quickly.

So, skipping an OIG background check is not worth the risk. It’s about compliance, yes, but it’s also about protecting your organization’s future.

How To Run an OIG Background Check

Running an OIG background check is simpler than you might think but requires attention to detail. The OIG maintains an easily accessible List of Excluded Individuals/Entities (LEIE), which you can check online.

Search the LEIE: Head to the official LEIE database, enter the individual or entity’s name, and hit search. The database will let you know if they’ve been excluded, and if so, for what reason and for how long.

Document the Results: Keeping detailed records of every OIG background check you conduct is crucial. This will serve as proof that your organization is following proper screening procedures.

Ongoing Monitoring: It’s not enough to just run the check once and forget about it. The exclusion list is updated regularly, so periodic screenings are important. Remember, fines can still be administered to organizations even after an employee has been hired and passed the initial OIG screening. 

If you can provide clear evidence that you conduct screenings every six months, you can successfully argue it was impossible to catch, but if you have no documentation, you could be in trouble. 

Considerations, Laws, and Requirements

Before you dive in, there are a few things to keep in mind:

  • Frequency: Depending on the nature of your organization, you should run OIG checks more frequently. While there’s no hard and fast rule, monthly or quarterly checks can help ensure ongoing compliance.
  • State Exclusion Lists: Many states maintain their own exclusion lists in addition to the federal OIG list. If your organization operates across state lines or accepts state Medicaid funding, you’ll need to check those lists as well.
  • FCRA Compliance: The Fair Credit Reporting Act (FCRA) governs background checks in the U.S. While OIG checks are focused on exclusion status, they still need to be compliant with the FCRA’s requirements regarding disclosure, consent, and adverse action.

Frequently Asked Questions

What Is an OIG Sanction Check?

An OIG sanction check is another term for an OIG background check. They’re the same thing, but the word ‘sanction’ is used to refer to a punishment or restriction that comes with being listed—specifically, the sanction of being barred from participating in federal healthcare programs.

How Often Should Employers Check the OIG Exclusion List?

The best practice is to screen every new hire before they start working. After that, you should conduct periodic checks. A monthly or quarterly check should suffice for most organizations, but if you want to err on the side of caution, more frequent checks are recommended. 

Final Thoughts

While state and federal background checks ensure that an organization has chosen the best possible candidate and that everything they’ve said matches up, an OIG background check has much wider ramifications. It’s about ensuring that individuals who may be a danger to others or have been convicted of fraud cannot get anywhere near the healthcare industry. 

Ensuring your employees, vendors, and contractors aren’t on the OIG exclusion list protects your organization from massive fines, legal action, and even the potential loss of federal funding. 

The OIG background check is an essential part of the hiring process within the healthcare industry, and ScoutLogic has got you covered. We provide comprehensive healthcare background checks so you can be 100% confident that you’ve got the right candidate for the job.

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