When it comes to compliance checks in the healthcare sector, 90% of the focus is on doctors and nurses. However, exclusion screening of non-medical vendors, such as IT contractors, janitorial services, and staffing agencies, is also crucial. The OIG check does not distinguish between a surgeon, a nurse practitioner, and an IT vendor when all are paid with federal funds. Therefore, if an excluded entity, even if it’s not a direct entity included in medical practice, is found and paid with federal funds, the organizations are required to pay penalties, and legal action may also be taken against them.
Screening must be conducted properly for every individual or entity associated with the healthcare organization. If it’s overlooked for administrative and support vendors, then it creates a significant compliance gap. Therefore, it is mandatory to conduct an exclusion screening, even for third-party entities, direct medical personnel, or support staff. In this comprehensive blog, we will learn about the hidden risks when an organization skips the IT contractor, janitorial services, or support staff.
Administrative Services Clause: How Liability Exists Beyond Patient Care
The OIG’s special advisory bulletin specifically states that the liability extends to any entity, medical or non-medical, paid by federal healthcare funds. It doesn’t matter whether the entity is engaged in administrative work or management services. It is equal for everyone under the “payment follows the patient” rule. For example, even if a vendor (such as an IT consultant, coder, or billing clerk) never touches the patient. However, it is highly possible they have access to patient data or affect the care environment as well. On top of everything there salaries are likely to be derived from Medicare or Medicaid reimbursements.
If that individual or entity is excluded, using federal money to pay them is considered to be a fraudulent claim. Therefore, you need to conduct exclusions screening not only for patient safety but also to maintain a financial firewall. Civil Monetary Penalties (CMPs) are penalties imposed on an organization that employs or hires a contractor on th excluded list. Therefore, it is vital to check against these entities:
1. W-2 Employees
W-2 employees are the traditional staff employed by healthcare facilities, such as doctors, nurses, surgeons, physiatrists, physiotherapists, and many more. They are paid by the federal healthcare program, making them liable if they are an excluded entity.
2. 1099 Contractors
1099 contractors are individuals who work independently or are hired as independent professionals, such as consultants, coders, or temporary clinic staff. The same applies to them, as all are paid with federal funds, exposing organizations to penalty risk if they are not screened.
3. Third-Party Entities
The third-party entities include vendors, subcontractors, and outsourced billing firms. They all need to be checked against the OIG LEIE list and SAM.gov to ensure they are trusted and supplied with high-quality products used in patient care within healthcare organizations.
Use Advanced Algorithms: For Accurate Identity Check
The screening is often used to determine whether an individual is excluded, but what if the individual is clean, while the organization you are partnering with is excluded? How do we determine vendor identity? With individuals, it’s easy to verify, as checks are done on the SSN and birth dates that you possess. However, with a vendor, it becomes more complex because the exclusion database often lists entities slightly differently from how they appear on invoices.
Relying on Exat software match exposes you to missing hits; for exclusions screening, you only have the vendor’s business name and Tax ID (EIN). Here’s a brief overview of how individual screening varies from entity screening.
| Aspect | Individual Screening | Entity Screening |
|---|---|---|
| Definition | Checking names of people (employees, contractors, clinicians, consultants) against exclusion lists. | Checking organizations (vendors, subcontractors, billing firms, staffing agencies) against exclusion lists. |
| Data Source | Personal identifiers: name, SSN, license number, NPI. | Corporate identifiers: legal name, DBA (doing business as), tax ID, corporate registration. |
| Common Challenges | Name variations (e.g., “Robert” vs. “Bob”). Duplicate names across states. |
Entity name variations (LLC, Inc., Corp.). Multiple subsidiaries or DBAs. Complex ownership structures. |
| Risk Exposure | Hiring or contracting an excluded individual directly. | Paying or partnering with an excluded company, even if its staff aren’t individually listed. |
| Compliance Requirement | Must screen all W‑2 employees and 1099 contractors. | Must screen all vendors, subcontractors, and outsourced service providers. |
| False Positives/Negatives | More straightforward to resolve with personal identifiers. | Higher risk of mismatches due to name normalization and corporate structures. |
| Operational Impact | Direct workforce compliance. | Supply chain and vendor compliance. |
Venops: An Automation Solution for Complicated Checks
To achieve effective screening, relying on exact matches is risky. You need to use a system that can verify entities using only limited data points, such as NPIs or business addresses. Rather than relying on SSN, which you don’t have. To fulfil such a checklist, one needs an high tech partner like Venops. A vendor might be listed on the OIG LELE as “Smith Medicak Supply, Inc.” but appears in your accounts payable systems as “Smith Med Supply.” Thus, this can create confusion, and standard Excel lookups will fail to catch it.
However, with Venops, you don’t need to worry about such mistakes, as our advanced algorithm is specifically designed to identify phonetic similarities and common abbreviations. With Venops, your organization is in safe hands. We will ensure security through a two-layered check from the individual to the vendor.
Summing It Up!
A compliance check is a chain that protects the healthcare facilities. However, it is only as strong as its weakest link (often the non-medical vendor). Which are ignored during exclusion screening, and it’s the same issue that often penalizes institutions. Any claim submitted through the excluded entity software could be tainted, potentially resulting in massive overpayment demands and fines. When it comes to a non-medical persona, whether they serve as administrative and management services or are hired as 1099 contractors. They are all liable to expose the organization for heavy penalty.
However, this can all be avoided through a thorough screening process, which can only be achieved with an advanced software platform. If you are also looking for a reliable exclusion screening partner for your organization, Venops is the one.
FAQs
Can Venops do the entire accounts payable vendor list screening at once?
Yes. Venops specializes in high-volume data screening. With us, you can run a screening of your master field against federal and state databases to identify excluded entities instantly. Without any errors or misses, our advanced algorithm detects any matches instantly and raises an alert, so you can be at ease.
If a vendor provides janitor or IT services, do they also need screening?
Generally, Yes. If their services are paid for by federal healthcare program funds ( directly or indirectly). Additionally, if they have access to patient records, it is mandatory to screen them as well, as the OIG recommends screening to avoid liability.
How does venops matches “fuzzy matches”?
Our Proprietary algorithms do the work here, as it goes beyond exact text matching. We identify phonetically similar names and variations to ensure your screening catches risks that standard software misses.
Can we automate vendor monitoring? Or do we have to upload it every month?
Venops is an advanced platform that provides continuous monitoring capabilities. Once your vendor list is in our systems, we can automatically check for new exclusions every month and alert you only when a potential match is found.
What action is recommended when a vendor appears on the exclusion screening list?
You should immediately stop payments to that vendor and consult your legal counsel. Venops provides the detailed primary source data you need to verify the match before taking administrative action.
