Federal exclusion screening is one of the most consequential compliance obligations in healthcare staffing — and one of the most frequently misunderstood. For any entity that bills Medicare, Medicaid, or any federal healthcare program, employing or contracting with an excluded individual exposes the organization to Civil Monetary Penalties of up to $20,000 per item or service furnished by that individual, plus treble damages and potential program exclusion of the facility itself.
The Legal Framework: Why This Is Not Optional
The exclusion authority originates in Section 1128 of the Social Security Act, which authorizes the Office of Inspector General of the U.S. Department of Health and Human Services to exclude individuals and entities from participation in federal healthcare programs. The implementing regulations at 42 C.F.R. Part 1001 establish mandatory exclusion — for convictions involving healthcare fraud, patient abuse, or felony drug offenses — and permissive exclusion, which covers a broader range of conduct including license revocations, Medicare/Medicaid overpayments, and default on health education loans.
Critically, the exclusion sanction attaches to the individual — not just their license. A nurse whose license was revoked in one state and subsequently obtained in another may still appear on the exclusion list. A physician excluded for billing fraud is excluded from all federal healthcare programs regardless of which employer engages them, and that employer bears liability for any claims submitted during the period of excluded employment.
The Three Databases Every Staffing Agency and Facility Must Check
OIG LEIE — List of Excluded Individuals/Entities
The OIG maintains the List of Excluded Individuals/Entities (LEIE) at exclusions.oig.hhs.gov. The database is updated on the first business day of each month. Individuals on the LEIE include those excluded under both mandatory and permissive provisions. Search capability is provided by name and, importantly, by Social Security Number or Employer Identification Number — which eliminates ambiguity in common-name searches and reduces false-positive match rates.
The OIG's guidance document "Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs" (updated 2013, still operative) makes clear that any payment to an excluded party — wages, contract fees, or anything of value — from an entity that receives federal program funds constitutes a violation. This applies even if the excluded person performs services that are not directly billed to a federal program.
SAM.gov — System for Award Management
SAM.gov (sam.gov), maintained by the General Services Administration, is the federal debarment and suspension database. It covers exclusions applicable to federal procurement and non-procurement activities. Individuals and entities in SAM.gov's exclusion records may not participate in federally funded programs or receive federal awards. A clinician can be listed in SAM.gov without appearing in the OIG LEIE, and vice versa — both databases must be checked independently.
Texas HHS OIG Exclusion List
Texas maintains a state-specific exclusion database through the Texas Health and Human Services OIG, accessible at hhs.texas.gov. This list includes individuals excluded from Texas Medicaid and CHIP programs based on state-level investigations, license revocations, and administrative actions by HHSC. Facilities serving Texas Medicaid beneficiaries must screen against this list in addition to federal databases. Texas-specific exclusions can exist independently of federal exclusions.
The Monthly Re-Screening Requirement
Pre-hire screening alone is insufficient as a compliance measure. The OIG's guidance and most healthcare compliance program frameworks require monthly re-screening of all employees and contractors against the LEIE, SAM.gov, and applicable state lists. An individual may be added to the exclusion list at any point following hire — a conviction, license revocation, or OIG action occurring after employment begins generates immediate exclusion.
The Health Care Compliance Association (HCCA) and the OIG's 2023 General Compliance Program Guidance for the Healthcare Industry both identify monthly exclusion monitoring as a fundamental compliance program element. Staffing agencies should be able to document their monthly re-screening cadence with timestamped logs showing the date, individual screened, database queried, and result for every active clinician in their network.
NPDB — National Practitioner Data Bank
For Advanced Practice Providers (Nurse Practitioners, Physician Assistants, CRNAs, Clinical Nurse Specialists) and RNs working in hospital privileging contexts, a query to the National Practitioner Data Bank (npdb.hrsa.gov) is also required prior to privileging or credentialing. The NPDB contains reports of medical malpractice payments, adverse licensure actions, clinical privilege restrictions, professional society membership actions, and exclusions from Medicare and Medicaid. Access is limited to authorized entities — healthcare entities, licensing boards, and credentialing organizations — but staffing agencies placing APPs and hospital-based RNs qualify for query access under 45 C.F.R. § 60.10.
NPDB queries are particularly critical for APPs because the database captures malpractice payment history that does not appear in standard license verification. A nurse practitioner with a clear Texas BON license may nonetheless have a significant NPDB report reflecting a malpractice settlement or adverse hospital privilege action in another state.
What Facilities Should Verify in Staffing Agreements
Before executing a Master Service Agreement with any staffing agency, facilities should confirm in writing the following practices and have them incorporated into the agreement as contractual obligations:
- Pre-placement OIG LEIE, SAM.gov, and Texas HHS OIG screening for every clinician in every discipline
- Monthly re-screening of all active clinicians with documented logs available for audit
- NPDB query for all APPs and hospital-privileged RNs before first placement
- 24-hour notification to the facility if any active clinician is identified as excluded
- Immediate removal of any excluded clinician from all facility assignments upon discovery
- Documentation of each screening with date, result, and screener identity retained in the clinician's file
An agency that cannot immediately confirm these practices and provide documentation of their screening processes is an agency that creates regulatory exposure for every facility it serves. The obligation under 42 C.F.R. § 1001.1901 falls on the entity receiving federal program payments — which is the facility, not the agency — regardless of contractual allocations of responsibility.
Hearthstone & Co.'s Approach
At Hearthstone & Co., every clinician in every discipline — nursing, advanced practice, therapy, imaging, laboratory, pharmacy, behavioral health, dietary — is screened against OIG LEIE, SAM.gov, and Texas HHS OIG before their first shift. Monthly re-screening is scheduled on the first of each month and logged in our Notion credentialing tracker with date, result, and screener identification for every active clinician. NPDB queries are conducted for all APPs and hospital-placed RNs. Our Credentialing Coordinator signs the clearance section of Form CC-002 before any clinician is authorized to work a shift. We are happy to provide prospective clients with our credential checklist and screening documentation as part of the contracting process.