Commerce continues to become more and more globalized every day, and organizations are subsequently expanding their broad network of foreign suppliers, distributors, and other business partners.

This increased volume of international collaboration has caught the attention of national governments, which have instituted regulations into how goods, services, and payments pass through borders. And the best way for organizations to comply is to have an exclusion screening program.

That’s the impetus behind export and trade regulations. The U.S. government, for instance, bans doing any business with certain foreign individuals and organizations in order to protect national security and prevent fraudulent activities.

The healthcare industry especially must be wary of these laws. Exclusion screening lists apply whenever hospitals hire new physicians or partner with foreign distributors and vendors.

What Is Healthcare Compliance?

While healthcare organizations have patient well-being and medical research to think about, legal compliance must not be ignored. The penalty for non-compliance in the medical field is immense and can range from legal sanctions and destroyed reputations to criminal charges.

One of the keys to medical compliance is third-party due diligence and denied party screening, the practice of checking on the third-party business partners you work with and the employees you’ve hired and making sure that they aren’t part of any government exclusion screening list. Doing so not only keeps you in line with the law but also prevents potentially risky entities from interfering with your operations.

Compliance is a responsibility of any market, but compliance programs in healthcare are of a special case. Regulations in the medical field are well-known to be challenging, and there are actually many exclusion lists managed by multiple agencies and states to uphold.

Hospitals and medical institutions are also the ones most likely to expand into foreign regions, picking up third-party partnerships and new staff along the way. The need for export controls is especially high here.

What Agencies Dictate the Lists of Sanctioned Parties in Healthcare?

The first question to ask when approaching export compliance is what regulations and exclusion screening lists apply to you. There are several agencies and states with their own requirements as listed below. Consult with your legal teams for more details.

The List of Excluded Individuals and Entities

The primary federal sanction list that most medical personnel are familiar with is the List of Excluded Individuals and Entities (LEIE) managed by the Office of Inspector General (OIG). The LEIE comprises all entities deemed by the government to be risky for:

  • Past fraudulent activity regarding government funding programs
  • A history of distributing illegal controlled substances and drugs
  • Poor product or service output, including patient abuse and neglect

The entities here are not allowed to participate in federally funded healthcare programs, and it’s up to the medical business to search for debarred parties under its network.

The actual act of screening for LEIE exceptions takes a bit of work. You can search through the OIG’s database using unique identifiers like the Employer Identification Number, but the list itself actually updates regularly. Staying on top of these changes means making sure you have the most up-to-date copy at all times.

The Office of Foreign Assets Control

The Office of Foreign Assets Control (OFAC) works directly with the Department of the Treasury to protect American foreign policy and national security when it comes to financial transactions made internationally. It does so by managing multiple sanction lists:

  • Specially Designated Nationals and Blocked Persons List
  • The Consolidated Sanctions List
  • The Foreign Sanctions Evaders List

It applies to almost all types of businesses in the United States, including healthcare-related ones. As shown by the agency’s recent enforcement trends, OFAC no longer deals exclusively with the financial sector.

The System For Awards Management

Once known as the excluded parties list system (EPLS), the system for awards management (SAM) is an exclusion screening list created by the General Services Administration (GSA) under the Affordable Care Act. GSA in general is meant to help federal agencies function.

While parties on SAM are not necessarily barred from working with American companies, they cannot receive federal payments for any products or services they work on.

SAM is known for its many search functions that allow businesses to access and reference the list easily, such as automated suggestions and filters for types of exclusions.

The Foreign Corrupt Practices Act

Abbreviated as FCPA, this law was designed to prevent domestic businesses from paying bribes to foreign officials to advance their business agendas. Companies are required to implement internal controls and proper bookkeeping practices to prevent corruption. Much like OFAC, it’s a general law that happens to also apply to healthcare.

The Drug Enforcement Administration

The DEA is the primary management agency behind the Controlled Substances Act. Likewise, it keeps its own exclusion list to add to your compliance program.

State Medicaid Programs

Most states have their own specific Medicaid program with different sanctioned parties and requirements. While the LEIE is supposed to reflect all necessary exclusions, some state-specific ones don’t make it to the federal list. The result is that part of healthcare compliance is cross-checking with all individual state exclusion screening lists as well.

How Is Exclusion Screening in Healthcare Done Right?

The previous section highlights the complexity of medical regulations and denied party screening, so you might be wondering how you can prevent yourself from becoming non-compliant.

Get Everyone On Board

True corporate compliance requires everyone to be on the same page. The problem is that violations of denied party screening can happen at any point in the business. For instance,

  • Human resources hires new employees, physicians, and other staff members regularly. All of those new hires must be cross-checked with the relevant exclusion lists.
  • Likewise, it’s the job of procurement teams to pick up new vendors, suppliers, and partners to work with. Those entities too need to be screened.
  • Business strategists need to have a compliance-focused mindset when thinking of new business decisions.

Instead of keeping compliance an isolated process within a dedicated department, hold everyone accountable for part of the overall compliance program. It’s the best way to prevent banned parties from entering the business network.

Leave No Stone Unturned When it Comes to Exclusion Screening

Screen everyone and everything. Whenever new employees are added to the roster through an onboarding process, screen them. Whenever new vendors join the supplier network, screen them.

Perform a comprehensive check by comparing their names and identifiers (such as an SSN or Employer Identification Number) with the exclusion lists that apply to you.

Larger healthcare organizations and hospitals with larger networks of staff members and partnerships in particular need to prioritize which entities to screen first. Start with the most active suppliers, for instance.

Checkup Often

How often should screening take place? The Office of Inspector General, in an official bulletin, recommends at least once a month, as new additions and changes are made to various sanction lists regularly. This is especially the case for the Medicaid lists provided by individual states, which don’t always conform to the federal LEIE.

Automate Complex Exclusion Screening Procedures with Descartes Visual Compliance

There’s a reason why many industries, especially healthcare, have turned to automated solutions for exclusion screening. The sheer number of lists and entities to screen, as well as the need for up-to-date information on current regulations, has made manual compliance management insufficient.

Are you looking for a comprehensive third-party due diligence and denied party screening platform? Unlock a streamlined and automated screening process with Visual Compliance.

Talk with one of our experts if you want to get exclusion screening done in a cost-effective manner and with an industry-leading platform.