The 5-Minute OIG Screening Process for Small Healthcare Practices (42 CFR § 1001.1901)

For small healthcare practices, compliance with federal program integrity rules can feel overwhelming. One of the most important operational safeguards is screening staff, contractors, and vendors against the Office of Inspector General (OIG) exclusion list, also known as the List of Excluded Individuals and Entities (LEIE). Under 42 CFR § 1001.1901, no payment will be made by Medicare, Medicaid, or other Federal health care programs for any item or service furnished by an excluded individual or entity, or furnished at the medical direction or on the prescription of an excluded physician or other authorized individual when the furnishing party knew or had reason to know of the exclusion. (42 CFR § 1001.1901(b)(1)(i)–(ii))

This regulation does not prescribe a required screening frequency. However, consistent screening and documentation are widely recognized compliance controls because an excluded person’s involvement in items or services tied to Federal program claims can create significant payment and enforcement exposure. This article explains what § 1001.1901 covers, outlines a streamlined 5-minute screening process, provides a compliance checklist, highlights common pitfalls, and includes a real-world case study to help small practices stay audit-ready.

Independent physicians, small clinics, and specialty practices face ongoing scrutiny from payers and oversight authorities. Limited resources can make compliance harder, but payment rules related to excluded individuals and entities can still apply with full force.

Workforce members and vendors who support federally reimbursed items or services can include:

• Physicians, nurses, and medical assistants

• Billing specialists and coders

• Lab and imaging vendors

• Independent contractors such as IT support or consultants

42 CFR § 1001.1901 does not state that all such parties “must be screened” on a set schedule. What it does state is that payment is prohibited for items or services furnished by excluded individuals or entities, or in certain circumstances ordered, directed, or prescribed by excluded individuals. (42 CFR § 1001.1901(b)(1))

Because exclusions can arise at any time and because documentation is essential in audits, practices commonly adopt routine screening as a practical compliance control.

Regulatory Breakdown of § 1001.1901

What the rule covers

The effect of exclusion under 42 CFR § 1001.1901 is broad:

• Scope of exclusion: Exclusions are from Medicare, Medicaid, and other Federal health care programs. (42 CFR § 1001.1901(a))

• Payment prohibition: Unless and until reinstated, no payment will be made for any item or service furnished on or after the effective date specified in the notice:

  • By an excluded individual or entity; or

  • At the medical direction or on the prescription of an excluded physician or other authorized individual when the furnishing party knew or had reason to know of the exclusion. (42 CFR § 1001.1901(b)(1)(i)–(ii))

• No provider number workaround: Applies regardless of whether the excluded party obtained a provider number prior to reinstatement. (42 CFR § 1001.1901(b)(2))

• Assignment restriction: An excluded individual/entity may not take assignment of an enrollee’s claim on or after the effective date of exclusion. (42 CFR § 1001.1901(b)(3))

• Liability framework: An excluded individual/entity that submits or causes claims to be submitted for items or services furnished during the exclusion period is subject to civil money penalty liability and criminal liability under referenced statutory authorities; claims submission may also affect reinstatement. (42 CFR § 1001.1901(b)(4))

Exceptions (important for operational clarity)

The regulation also outlines limited exceptions and transition rules, including circumstances where an enrollee-submitted claim may be paid initially, and limits on payments after notice, as well as certain short transition periods for specific services. (42 CFR § 1001.1901(c)(1)–(5))

A small orthopedic clinic contracted with a nurse practitioner (NP) to help manage increasing patient volume during peak hours. Leadership ran a criminal background check and verified that the NP held a valid state license. Satisfied with those results, the clinic allowed the NP to begin seeing patients and documenting encounters.

What the clinic failed to do was check whether the NP was excluded from Federal health care program participation. For six months, the NP participated in services billed to Medicare and Medicaid.

Consequences

Once the NP’s exclusion status was discovered, the clinic faced payment and compliance exposure because the regulation prohibits payment for items or services furnished by an excluded individual or entity. (42 CFR § 1001.1901(b)(1)(i)) In addition, the regulation specifies that excluded individuals/entities that submit or cause claims to be submitted for items or services furnished during the exclusion period are subject to civil money penalty and criminal liability under referenced statutory authorities. (42 CFR § 1001.1901(b)(4))

Lesson Learned

Contractor status does not eliminate exclusion risk. Practices reduce exposure by using routine screening and maintaining documentation that demonstrates a consistent compliance control.

The 5-Minute OIG Screening Process

This process is designed to be fast, repeatable, and easy to document. The regulation does not mandate a monthly cadence, but many practices adopt recurring screening intervals as a defensible control.

Step 1: Gather Information (1 Minute)

Collect the individual’s:

• Full legal name

• Any known aliases

• Date of birth (useful for resolving name matches)

Step 2: Access the OIG LEIE Database (1 Minute)

Use the official OIG LEIE search tool:
https://exclusions.oig.hhs.gov

Step 3: Run the Search (1 Minute)

Search the individual’s name. For common names, use available details to confirm whether the result appears to match the correct person.

Step 4: Document the Results (1 Minute)

Save evidence of the search results (PDF or screenshot) with:

• Date

• Time

• Name searched

• Search outcome

Step 5: Review & Act (1 Minute)

• If no match: retain documentation.

• If a potential match appears: verify identity carefully and suspend involvement in federally reimbursable work while confirming details.

Common Pitfalls and How to Avoid Them

Relying Only on Background Checks

Background checks do not necessarily identify Federal program exclusions.
Fix: Run separate LEIE checks and document results.

One-Time Screening Only

Exclusions can occur after onboarding.
Fix: Adopt a recurring screening schedule as a compliance control and document each run.

Failing to Screen Vendors

Billing, lab, or IT vendors may use subcontractors.
Fix: Require contractual assurances and retain vendor documentation.

Lack of Documentation

Verbal confirmation is not defensible in audits.
Fix: Keep dated evidence of each search.

Delays in Acting on Matches

Waiting too long increases risk.
Fix: Suspend involvement while identity is confirmed and document actions taken.

Automate Where Possible

Use tools that help track screening activity, retention, and reporting.

Train Administrative Staff

Ensure staff know how to perform searches and store documentation properly.

Conduct Mock Audits

Practice producing logs quickly for payers and auditors.

Leadership Sign-Off

Have a compliance lead or practice owner periodically review screening logs.

Step-by-Step Corrective Action Protocol

1. Confirm identity details related to the match.

2. Remove the individual from federally reimbursed work pending verification.

3. Preserve screening evidence and internal communications.

4. Review potentially affected claims/work periods.

5. Document remediation steps and policy updates.

Effective screening is not just a box-checking exercise. For small practices, it supports accountability:

• Leaders stay proactive by addressing risks before they escalate.

• Staff understand that compliance is part of operations.

• The practice can demonstrate consistent internal controls and documentation.

By embedding a simple screening process into routine workflows, small practices can reduce payment risk and improve audit readiness without overburdening staff resources.

Under 42 CFR § 1001.1901, payment is prohibited for items or services furnished by excluded individuals or entities, and in specified circumstances for items or services furnished at the medical direction or on the prescription of excluded individuals when knowledge standards are met. (42 CFR § 1001.1901(b)(1)(i)–(ii)) The regulation also describes liability exposure for excluded individuals/entities that submit or cause claims to be submitted during an exclusion period. (42 CFR § 1001.1901(b)(4))

While § 1001.1901 does not mandate a screening frequency, practices commonly adopt consistent screening and documentation controls because exclusions can create significant reimbursement and compliance exposure. A simple, repeatable process supported by documentation helps practices demonstrate strong compliance posture.

For added assurance, invest in a compliance management tool. These solutions centralize regulatory tracking, provide continuous risk evaluation, and ensure your practice is prepared for audits by addressing weak points before they escalate, reflecting a proactive commitment to compliance.

1. 42 CFR § 1001.1901 – Scope and effect of exclusion (eCFR)

2. HHS OIG – List of Excluded Individuals/Entities (LEIE)

3. HHS OIG – Exclusions Program (overview)

4. 42 U.S.C. § 1320a-7a – Civil Monetary Penalties Law (Federal authority referenced in exclusion enforcement context)

5. 42 CFR Part 1003 – Civil Money Penalties, Assessments, and Exclusions (eCFR)