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Academic Medical Center Settles Case Over Excluded Person Who Was Both Employee, Vendor

Thomas Jefferson University Hospitals Inc., an academic medical center in Philadelphia, Pennsylvania, has entered into a settlement with the HHS Office of Inspector General (OIG) in a case that underscores the risks of contracting with or employing someone who is excluded from federal health care programs—in this instance, the same person. Although the settlement amount is small—$19,958—the case is a reminder of the risks that hospitals and other health care organizations face if their exclusion screening doesn’t encompass vendors and their employees, experts say. Sometimes people fall through the cracks anyway, which is why vendors are often asked to accept responsibility in their contracts for penalties stemming from excluded employees.

“With vendors, you need to arm yourself in two ways: check them for exclusions every month and include in your contracts a clause that requires them to check their employees for exclusions and notify you as soon as they know if they have an excluded person employed,” said Kim Danehower, corporate compliance officer at Baptist Memorial Health Care Corp. in Nashville, Tennessee. She added that contracts with vendors should include indemnification clauses, which shift liability to the vendor for penalties the government imposes on providers in connection with the services provided by the vendor’s excluded employee. Not all vendors are champing at the bit to agree to indemnification, however, so sometimes there are hard choices to make.

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