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Exclusion Screening of Contractors and Vendors

screen with hole - exclusion screening of contractors and vendors
Exclusion Screening of Contractors and Vendors

By now, providers should be aware that the Office of Inspector General (OIG) requires exclusion screening of contractors and vendors, in addition to employees, if they provide items or services that are payable by Federal health care programs. This article identifies the OIG’s guidance on the issue, explains the difficulties it poses, and concludes by suggesting a framework for applying the guidance to screening vendors and contractors.

OIG Guidance: An Emphasis on Patient Care – A Focus on Payment

The OIG states that its emphasis on screening vendors and contractors for exclusions regards “items or services integral to the provision of patient care.”2 This is sensible as many exclusions are the result of licensing issues and drug offenses which could result in a risk of harm to patients.

With that said, the OIG’s guidance focuses heavily on considering the nexus between vendor/contractor activities and any resulting claims. Providers are advised to review the “job category or contractual relationship” of each and every contractor and vendor. Then, if the provider determines that the vendor or contractor provide items or services payable “directly or indirectly, in whole or in part … by a Federal health care program,”3 the vendor or contractor should be screened for exclusions monthly.

The Breadth of the Guidance

The OIG guidance is so broad that it is difficult to apply in a meaningful way. For instance, Exclusion Screening, LLC is sometimes asked by providers who make claims that include facility fees or some other overhead component whether they are obligated to screen contractors or vendors of such basic services as garbage collection and utilities out of a concern that they could be considered to be payable “indirectly” and at least “in part” by Medicare. While it is hard to believe that the OIG expects providers to screen the city sanitation service, the question raises a valid point.

While the guidance contains a number of examples that describe potentially problematic conduct when furnished by an excluded individual, the OIG seems to emphasize the broad scope of the screening obligation instead of providing a better understanding of it. For instance, the preparation of a surgical tray by an excluded person (who may not be in the operating theatre) and the inputting of information into a computer by an excluded person (who probably would not have written the prescription or participated in making the claim) are both identified as potentially problematic conduct. The guidance further states that virtually any service (administrative, management, IT support, etc.), even volunteer services, can trigger Civil Monetary Penalties (CMPs) if an excluded person provides the service unless the service is “wholly unrelated to Federal Health Care Programs.”

A Possible Framework for Applying the OIG Guidance4

Screening decisions based solely on whether the item or service provided was “wholly unrelated” to claims (or, stated another way, could possibly have contributed in some way to a claim) fail to recognize the OIG’s stated emphasis on services integral to patient care. In addition, it may also take a provider down a path that leads toward screening every conceivable vendor or contractor, including the city sanitation service as discussed above. As an alternative to this rigid (and unrealistic) approach, Exclusion Screening, LLC suggests using a framework that considers both the potential impact to patient safety of the activity in question, as well as the relationship between the vendor or contractor and any claims made to, or paid by, Federal Health Care programs. This is a sensible and workable approach that is consistent with the OIG’s dual priorities of patient safety and fiscal responsibility.

The framework would create a continuum of sorts, with contractors or vendors most closely associated with both patient care and claims on one end (such as an agency nurse or a physical therapist), and the vendors and contractors who have nothing to do with care and are only incidentally connected to reimbursement on the other (like the city garbage collection service). The closer a vendor or contractor is to the end that encompasses both patient care and claims (i.e., the nurse provided by a staffing company), the more likely it will be that the person or entity should be screened. Conversely, as one moves along the continuum to the other end, the necessity of screening decreases.

Though this may be an imperfect system that does not create bright lines, it specifically identifies and considers the factors important to the OIG. The continuum also gives context and focus to a provider’s screening decisions. By way of example, if one substitutes a hazardous waste collector for the city sanitation service and uses the continuum analysis, one can immediately see that the important considerations are (1) the risk a hazardous waste removal company and its employees pose to patient safety, and (2) the nexus between the hazardous waste removal service and reimbursement for the claim. Finally, and perhaps most importantly, since the framework is premised on the OIG’s principle concerns, using a framework helps make provider screening decisions defensible and supportable in the event of an audit.


The OIG’s guidance on exclusion screening of vendors and contractors is so broad that providers are left to draw their own lines and make their own decisions regarding whether or not to screen a specific individual or entity. In drawing these lines and making these decisions, Exclusion Screening, LLC believes providers are best served if they use a framework that incorporates both patient safety and financial considerations. Such a framework helps providers by giving analytic context to their decisions, demonstrating their commitment to compliance, and, ultimately, making their actions all the more defensible if subjected to scrutiny.

For an in-depth discussion of which vendors and contractors need to be screened, listen to our on-demand webinar


Paul Weidenfeld, Co-Founder and CEO of Exclusion Screening, LLC, is the author of this article. Contact Paul should you have any  questions at: or 1-800-294-0952.

1   Paul Weidenfeld is a co-founder of Exclusion Screening, LLC. A noted health care lawyer now in private practice, Paul frequently writes and speaks on issues relating to exclusions, fraud and abuse and the false claims act. Before entering private practice, he was a federal health care fraud prosecutor for a number of years, and the Department of Justice Health Care Fraud Coordinator from 2005 – 2007.

2   May, 2013, Updated Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs, Health and Human Services, Office of Inspector General, p. 16

3   Id. at p. 15

4 Exclusion Screening, LLC is not a law firm and does not provide legal advice. As such, this is not intended, and should not be taken, as legal advice. We strongly recommend that you seek the advice of counsel whenever decisions that may have legal consequences are made.

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