Kusserow on Compliance: Outsourcing sanction-screening entirely

There has been an increasing trend for compliance programs to outsource part or all of its sanction screening. This trend is being driven by increasing burdens of searching more sanction databases, more often. Vendor search engine tools to assist in sanction-screening save on the costs incurred and time spent in developing and maintaining an in-house search engine, which is required to constantly upload data from various agencies. Using a vendor for this can result in considerable savings; however the bulk of the work, including screening and resolving potential “hits,” remains with the organization and can consume a lot of resources. Many are therefore choosing to outsource the entire function to a vendor who executes the screening and resolution of potential hits and provides certified reports of the results.

Sanction-screening obligations began with the HHS Office of the Inspector General (OIG) during my watch as the Inspector General (IG), when what is now referred to as the List of Excluded Individuals and Entities (LEIE) was developed. The OIG makes clear in its compliance guidance documents that there is an obligation to screen employees, physicians, vendors, contractors against the LEIE. Failing to screen out excluded or debarred individuals or entities could result in all claims and costs associated with that excluded party being viewed as false and fraudulent, resulting in significant financial penalties. The agency recently issued a Special Advisory Opinion that re-emphasized its position on this issue.

From the CMS perspective, sanction and exclusions do not only play a role in terms of payment but also are related to enrollment. Federal regulations state, “To obtain/maintain active enrollment status, providers may not employ or contract with individuals/entities excluded from participation in any federal health care program or debarred by the [General Services Administration (GSA)] from any other executive branch program or activity” (42 C.F.R. sec. 424.516). Unlike the OIG, CMS also calls for screening against the GSA debarment data base, the Excluded Parties List System (EPLS), now a part of the System for Awards Management (SAM). There are also other federal sanction databases maintained by Drug Enforcement Administration (DEA) and the FDA.

In recent years, CMS called on state Medicaid Directors to develop their own sanction databases and mandate enrolled providers to screen against them on a monthly basis. Most states have already moved to establish their own Medicaid sanction list, with more on the way. Many states now mandate monthly screening against those lists, as well as the LEIE. These actions have increased the burden for compliance officers, human resource management, and procurement exponentially.

Four tips for selecting a sanction-screening vendor

  • Use only a vendor service offering a fixed rate, as fees based upon a per-click or volume of screening can run up the costs to a prohibitive level.
  • Ensure the contract permits cancelling without cause at any time. A client should be held to a company by good service and not by contract.
  • Determine if the vendor provides any other services or support in addition to using their tool—for example, providing policy templates, regulatory updates, advisory notifications, a help desk, etc.
  • Consider outsourcing the entire process, including the screenings, resolving potential “hits,” and providing a certified report of the results that can be made part of the compliance office records. The cost of full outsourcing may not be much more than simply paying for use of search engine tools.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2015 Strategic Management Services, LLC. Published with permission.