The healthcare industry, renowned for its stringent regulations and high standards, faces a myriad of challenges in its hiring practices. One critical aspect that demands attention is the legal implications of engaging with excluded individuals or entities. This blog delves into the risks, legal fines, and the necessary precautions healthcare providers must take to ensure compliance with federal laws.


Understanding the Exclusion Laws:

Federal regulations strictly prohibit healthcare providers from billing services ordered by, or contracting with, individuals or entities excluded from federal health care programs like Medicare and Medicaid. This exclusion typically results from previous misconduct, such as fraud or abuse. The laws are designed to protect the integrity of federal health care programs and to ensure that providers engaging with these programs maintain the highest ethical standards.


The Grave Consequences of Non-Compliance: The repercussions of hiring or contracting with an excluded entity are severe. Violations can lead to significant penalties, including the repayment of all amounts received through such improper associations. Additionally, providers may face civil monetary penalties of $10,000 for each item or service provided by the excluded entity. More daunting are the penalties under the False Claims Act [31 U.S.C. § § 3729-3733], which can include fines ranging from $5,500 to $11,000 per claim, treble damages, and potential exclusion from federal programs​.


Legal Fines and Penalties in Detail:

The fines and penalties under these laws are not just substantial; they are designed to serve as a strong deterrent. Providers found in violation of these laws are subject to denial of payment for items or services provided in violation, repayment of amounts improperly received, and additional civil monetary penalties. These penalties underscore the seriousness with which the federal government treats violations of healthcare regulations, emphasizing the need for healthcare providers to be vigilant in their hiring and contracting practices​.


The Role of Diligent Background Checks:

To avoid such punitive measures, healthcare providers must conduct rigorous background checks. This involves regularly checking the Office of Inspector General’s (OIG) List of Excluded Individuals and Entities (LEIE). This list is a critical resource for healthcare providers, offering up-to-date information on individuals and entities deemed ineligible to participate in federal health care programs. Regular checks against the LEIE help ensure that providers do not inadvertently engage with excluded entities, thereby maintaining compliance and protecting against the risks of non-compliance​


The Best Practices for Healthcare Providers:

Healthcare providers should integrate LEIE checks into their regular human resources and contracting processes. This includes checking the LEIE before hiring new employees, engaging contractors, and periodically thereafter. Providers may decide the frequency of these checks, with monthly screenings being ideal to minimize potential overpayment and civil monetary penalty liability. Ensuring that applications and contracts include declarations that the applicant or contractor is not excluded and indemnifies the provider against any misrepresentations is also a recommended practice​.


In Conclusion:

In the complex and highly regulated world of healthcare, the importance of thorough background checks and compliance with federal laws cannot be overstated. The legal and financial repercussions of hiring or contracting with excluded individuals or entities are substantial, underscoring the need for vigilance and strict adherence to regulatory requirements. By implementing regular and thorough screening processes, healthcare providers can navigate these legal requirements confidently and maintain their commitment to ethical practices and patient safety.


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