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Medical Sanction Program

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If you employ medical professionals such as nurses and physicians, it is important for you to understand medical sanctions. This is even more important if your organization administers federal healthcare programs such as Medicare and Medicaid.

For any healthcare service provider who participates in federal healthcare programs like Medicare and Medicaid, the concept of medical sanctions is critical. The reason for this is simple: violating medical sanctions can prove extremely costly. The penalties for violations can range from steep fines (e.g. $10,000 per day per violation) to discontinuation from Medicare/Medicaid or even jail time. Therefore, if you are a Medicare or Medicaid health service provider, you need to stay clear of medical sanctions. To do so, you need an effective strategy to avoid violating them.

What Are Medical Sanctions?

Also referred to as “healthcare sanctions,” medical sanctions are exclusions which are levied against certain individuals or entities from participating in federal healthcare programs. The individuals are usually healthcare professionals. The entities are usually organizations which provide healthcare-related services.

Any individual or organization that is excluded from federal healthcare programs is said to have been “sanctioned.” Sanctioned individuals and entities are barred from participating in federal healthcare programs such as Medicare and Medicaid.

As such, any organization that administers Medicare or Medicaid is barred from having business engagements which such individuals or entities. It is illegal to hire sanctioned individuals. An employer who hires sanctioned individuals can face fines, suspension from Medicare/Medicaid, and even jail time.

Why Medical Sanctions?

Medical Sanctions are aimed at excluding people with questionable backgrounds from participating in federal healthcare programs. The exclusions are mandated under sections 1128 and 1156 of the Social Security Act. Generally speaking, people tend to get sanctioned after having committed some form of violation.

The most common violations which can get someone sanctioned include Medicare/Medicaid fraud and patient abuse or neglect. Other violations include felony convictions arising from healthcare fraud or theft, financial fraud, or the illegal manufacture, distribution, and dispensing of controlled substances.

An individual can also get sanctioned if their license has been suspended or revoked for professional misconduct or if they have been convicted of a non-medical-related felony. An organization that hires a sanctioned individual or a person who manages a sanctioned entity can also get sanctioned.

Who Carries Out the Sanctions?

In most cases, medical sanctions are administered by the Office of the Inspector General (OIG) in the US Department of Health & Human Services. The OIG is tasked with excluding individuals from federal government programs. The OIG doesn’t carry out exclusions arbitrarily. It follows strict guidelines stipulated under sections of the Social Security Act. For starters, every exclusion begins with a thorough investigation of an individual or entity to ascertain that their conduct warrants exclusion.

Secondly, before excluding an individual or entity, the OIG sends them a Notice of Intent to Exclude. Upon receiving the notice, an individual or entity is presented with an opportunity to clear their name. They are only sanctioned when they fail to satisfactorily clear their name. Even then, OIG sanctions are not final. Any individual or entity who is dissatisfied with the OIG exclusion can appeal to an HHS Administrative Law Judge, an HHS Departmental Appeals Board, or a federal court.

There is one thing which is important to note: the OIG isn’t the only body which excludes healthcare practitioners from federal programs. Other government departments can also carry out exclusions. For instance, the General Services Administration (GSA) can suspend or revoke the licenses of healthcare practitioners. The Food and Drug Administration (FDA) can also suspend practitioners who commit certain professional violations. However, irrespective of the source, the OIG is the agency that ensures that the exclusions are implemented.

How To Avoid Hiring Sanctioned Individuals

The penalties for hiring sanctioned individuals are extremely steep. For instance, the OIG can fine an organization up to $10,000 per day worked by a sanctioned individual, suspend them from federal health programs, revoke their license, and even recommend jail time for their leaders. The way to avoid such penalties is to avoid hiring sanctioned individuals. The best strategy is through medical sanction checks. These checks are aimed at identifying whether or not an individual is on the sanction lists. To make sanction checks effective, it is advisable to conduct them at least three times.

Before Hire

Before hiring any healthcare professional, it is an absolute must to conduct a sanction check. This is the only way to prevent hiring sanctioned individuals.

Before Appointment

Sanction lists are updated periodically. There is also a time-lapse between the time an individual is sanctioned and the moment their name appears on the list. As such, between the time of hire and appointment, it is possible that an individual’s name could have appeared on the list. As such, before giving an employee a contract, it is necessary to carry out sanction checks on them again.

What Type of Screening is Recommended?

To adequately screen for physician job candidates, a medical organization should conduct multiple levels of due diligence. First, there is a need to confirm medical credentials. Second, there is a need for a general due diligence background check applicable to any professional being considered for a critical position. Third, an organization may wish to obtain an in-depth background, which may also include verified professional references, verification of clinical activity for the past 6-12 months, lifetime healthcare related employment, and malpractice insurance and ten-year history.