VendorProof and Healthcare Exclusions

Healthcare exclusions represent a significant area of compliance risk for health systems. Health systems must ensure that no person and business they employ or contract with is excluded, or face severe fines and penalties. VendorProof makes this process smoother by monitoring health systems’ vendors for exclusions.

What is a healthcare exclusion?

An exclusion is an administrative action taken against a person or business by the Dept. of Health and Human Services (HHS), Office of Inspector General (OIG) or a State Medicaid Agency. An exclusion means that person or business is excluded from receiving any money from federal or state healthcare programs. Since healthcare organizations receive federal reimbursement, not working with excluded people or businesses is a way to reduce risk and protect the integrity of taxpayer-funded healthcare.

How does a vendor become excluded?

An exclusion can be issued for a variety of reasons, but the biggest cause of exclusions among vendors is fraud. Other crimes resulting in exclusions are theft, patient abuse and neglect, and kickback schemes.

Compliance Requirements for Healthcare Exclusions

In accordance with Sections 1128 and 1156 of the Social Security Act, HHS OIG mandates that healthcare organizations do not hire or do business with “excluded or sanctioned individuals or entities.” This means any business or individual providing goods or services to a healthcare organization must not have a federal or state exclusion against them. 

Monitoring to Avoid Fines and Penalties

Healthcare organizations must monitor federal and state exclusion lists to determine that no such exclusion exists and to avoid fines and penalties, which start at $20,000 per item claimed or service provided by the excluded party. VendorProof watches these lists and alerts a healthcare organization if one of its vendors is listed.

How VendorProof Catches Exclusions

VendorProof conducts automated exclusion monitoring, which is the process of comparing the information of a person or a business (e.g., name, address, birthdate, tax ID, telephone number, etc.) to the information of people or businesses that appear on federal and state exclusion lists.

State and Federal Exclusion Lists

There are currently two federal exclusion lists (OIG LEIE and and more than 40 state lists, all changing at different intervals. Checking every list for information that could point to every vendor a health system works with would be an impossible task for a person. That’s where VendorProof comes in.  The software watches the lists and notifies the health system if a vendor becomes excluded. 

Questions? Reach out to our Vendor Care team. We’re here to help!