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What Is a Medical Sanction?

June 11, 2020

A medical sanction, also known as a healthcare sanction, is a disciplinary action levied against an individual or entity by a state licensing board. A sanction can severely damage an organization’s finances, operations, and reputation, and inhibit providers or entities from participating in federal healthcare programs.

The U.S. Department of Health & Human Services (HHS) Office of Inspector General (OIG) requires a healthcare sanction screening that is checked against the List of Excluded Individuals/Entities (LEIE). Individuals or entities may receive a sanction for the following common reasons. These activities include, but are not limited to:

  • Medicare AND Medicaid fraud
  • Patient abuse or neglect
  • Felony convictions
  • Financial fraud
  • Illegal manufacture, distribution, or dispensing of controlled substances

Any organization that hires or employs an excluded individual or entity on the LEIE may be subject to civil monetary penalties (CMP) as well as other penalties.

How Are Sanctions Implemented? 

In most cases, medical sanctions are administered by the Office of the Inspector General (OIG). The OIG follows strict guidelines stipulated under Sections 1128 and 1156 of the Social Security Act and is tasked with excluding individuals from federal government programs who violate regulations.

The OIG administers sanctions with significant consideration as a sanction can have severe consequences for an excluded individual or entity. There are multiple steps to investigating and administering a sanction. Steps to a healthcare sanction are:

  1. The OIG first conducts a thorough investigation of an individual or entity to ascertain that their conduct warrants exclusion.
  2. The OIG will send the individual or entity a Notice of Intent to Exclude. This notice allows for an individual or entity to rebut claims.
  3. Any excluded individual or entity dissatisfied with the OIG exclusion can appeal to an HHS Administrative Law Judge, an HHS Departmental Appeals Board, or federal court.

What Are Sanctions Lists? 

A sanctions list is a database of excluded individuals or entities barred from federal healthcare programs. The purpose of sanctions lists is so employers can screen potential hires prior to employment then check the lists regularly to monitor their entire provider population.

To identify whether or not an individual is excluded, an employer must check all medical sanctions lists, including the List of Excluded Individuals and Entities (LEIE) and the Fraud and Abuse Control Information Systems (FACIS®).

The LEIE and FACIS® databases are separate lists that should be monitored as the OIG is not the only reporting entity. The differences in the lists are:

  • The LEIE is published by the OIG and contains names of individuals and entities which have been sanctioned by the OIG. It is updated monthly and is the primary resource used for identifying excluded individuals.
  • FACIS® is a database that compiles information from different healthcare sanctions lists. It compiles sanctions lists published by the OIG, GAS, FDA, and many more. It also tracks exclusions, debarments, disciplinary actions, reprimands, and suspensions.

How to Avoid Hiring Sanctioned Individuals

The consequences of hiring an employee who has been sanctioned or excluded can be severe. The US Department of the Treasury reports that Civil Monetary Penalties (CMPs) can run upwards of $10,000 for every item or service provided or ordered by a sanctioned individual, and sometimes as much as triple that amount per item.

Even more damaging is that organizations run the risk of being denied reinstatement into federal healthcare programs in the future. If the OIG discovers a sanctioned employee within an organization, the organization will be barred from participating in federal programs such as Medicare, Medicaid, and all other Federal plans and programs that provide health benefits funded directly or indirectly by the federal government. The full list of ramifications for an organization can be found in the Updated Special Advisory Bulletin on the Effect of Exclusion From Participation in Federal Health Programs.

In order to protect your organization from hiring sanctioned or excluded individuals, companies should conduct thorough and ongoing medical sanction screening. A thorough sanctions screening from Verisys reviews thousands of federal and state government lists and cross-references policies and requirements from the OIG to provide insight into a health care provider’s medical background.

Since licenses are subject to review and change regularly, health care entities must regularly monitor the LEIE for any penalties, suspensions, or punitive or disciplinary actions taken against a healthcare provider. For further guidelines on sanctions and screenings read more on Verisys’s blog.

Juliette Willard Written by Juliette Willard
Healthcare Communications Specialist
Being creative is my passion! Writer. Painter. Problem Solver. Optimist.
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