Publication

Should Healthcare Sanctions Screening and Background Checks Include the Specially Designated Nationals and Blocked Persons List?

Richard P. Kusserow | June 2018

Overview

The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) List of Excluded Individuals and Entities (LEIE), the General Services Administration System for Award Management (SAM) debarment list, and state Medicaid sanction and exclusion lists make up the basic data sets against which the majority of healthcare organizations screen their employees, physicians, contractors, and vendors. But Compliance Officers often question whether or not they should also be screening these individuals and entities against other lists as well, such as the U.S. Department of Treasury Office of Foreign Assets Control (OFAC) Specially Designated Nationals and Blocked Persons (SDN) list.

OFAC represents a sector of the U.S. Department of Treasury that is responsible for determining if an entity or individual is permitted to conduct business with the United States. This Agency maintains the data in the SDN, which is a list of companies and individuals who are owned or controlled by or acting on behalf of targeted countries. The SDN list also includes groups, such as terrorists and narcotics traffickers, who are designated under programs that are not specific to any country.

Since Compliance Officers across the industry are facing the dilemma of whether to screen employees and vendors against the OFAC SDN list when conducting a healthcare sanctions background check, it may be beneficial to review the advice of compliance professionals from an organization that has experience providing consultation on how to set-up an effective sanctions and exclusions screening process. Several experts weighed in on this dilemma based on their experiences in the healthcare field.

Advice from Compliance Professionals on Conducting Healthcare Sanctions Screening and Background Checks

One way organizations can decide whether to include the SDN list in their designated screening databases is to view the SDN through the human resources lens. Since human resources managers are the first to interact with potential new hires, they have a unique take on which databases are most helpful in obtaining useful information on a candidate’s background. Ms. Ashley Felder, SHRM-CP, Human Resources Consultant, stated that the SDN list poses many problems including a large amount of common international and foreign names that are on the list. These names can be translated into several English versions, which can create false positive matches in the screening results. Additionally, the OFAC SDN does not include specifically identifiable data that can help verify and confirm a match. Therefore, matches to SDN records can only be fully resolved by conducting a detailed background check on the individual. This is time-consuming, costly, and may lead to charges of discrimination, profiling, and defamation of character. With these implications in mind, screening potential new hires against the SDN list often creates unnecessary human resources issues and may not even end up clearing the new hire or vendor. Screening the OFAC SDN list is uncertain and unpredictable, and may not be the most useful supplement to a standard healthcare sanctions background check against other, more credible, exclusion screening databases such as the LEIE and SAM lists.

From a compliance program perspective, screening with the OFAC SDN list presents a plethora of other problems separate from those in the HR realm. One of these problems stems from the fact that the SDN list was originally designed for financial institutions to keep track of the individuals and entities they could not deal with. According to Mr. Tom Herrmann, JD, Managing Senior Consultant at Strategic Management Services, most of the businesses that regularly utilize OFAC SDN screening include international businesses, specifically companies involved in banking, finance, and insurance. This indicates that the SDN was not necessarily built with healthcare industry operations in mind. Healthcare providers and managed care organizations are not currently required by HHS to screen against the OFAC SDN list, and doing so may actually create more problems than benefits.

Additional issues with the OFAC SDN list come from the utility side of sanctions screening. Bringing the perspective of working with various healthcare providers to design and establish sanction screening policies and processes, Ms. Jillian Concepcion MPA, CHC, CHPC, Senior Consultant at Strategic Management Services noted that most healthcare organizations do not screen against the OFAC SDN list because of the potential complications associated with the lack of identifiable data on this list. In many cases, the list only provides names, possibly with multiple aliases per individual. Additionally, dates of birth are usually missing or have multiple possibilities listed, and address history, if it is even included, only lists the city and country. This lack of complete data makes a positive identification of excluded individuals and entities difficult, if not impossible.

Given these inconsistencies, it is not usually recommended to clients to screen new hires or existing employee or vendor names against the OFAC SDN list, unless there are special concerns or reasons for doing so such as operating outside of the U.S. in areas designated by the Department of Treasury. Just because this list is available does not mean that it will lead to accurate, usable sanction screening results for any organization.

In Review

The OFAC SDN list is not usually worth including in healthcare screening databases and should only be used for specific situations. Although the OFAC SDN list is available for healthcare organizations to screen employees and vendors, it may not offer the same beneficial, reliable results as some of the other standard screening databases. The SDN list may also include useful data on individuals and entities in the financial, banking, and insurance industries, but it lacks complete information overall and was not designed for the healthcare industry. This creates uncertainties in verification, especially for healthcare organizations, and potential liability issues, neither of which is helpful to organizations that need to know whether their employees or contracted vendors are excluded from participating in federal healthcare programs.

About the Author: Richard P. Kusserow is currently the President and CEO of Compliance Resource Center, Strategic Management Services’ sister company. He served as the Inspector General of HHS for 11 years and brings decades of valuable experience from the government sector to Compliance Resource Center. His experience with implementation and enforcement of HHS exclusions enables Compliance Resource Center to provide a sanctions screening software tool and full-service verification service that meets the OIG’s requirements and expectations.

About Compliance Resource Center: Compliance Resource Center has been leading the compliance industry since 2010 with our complete suite of solutions that are geared towards improving Compliance Program operations. Our suite of solutions ensures that organizations regularly meet federal and state laws and supplies the necessary resources to sustain long-term compliance.

About the Author

Richard P. Kusserow established Strategic Management Services, LLC, after retiring from being the DHHS Inspector General, and has assisted over 2,000 health care organizations and entities in developing, implementing and assessing compliance programs.