Case Study: Automated OIG Exclusion Screening for Healthcare HR Compliance (Gusto, ADP, Paylocity & More)

Meet the Client

A large orthopedic and spine healthcare provider (name withheld for confidentiality) with dozens of employees and contractors across multiple locations. As a participant in federal healthcare programs, this organization must ensure none of its staff or vendors appear on the OIG’s List of Excluded Individuals/Entities (LEIE) – a federal database of individuals and entities barred from participating in Medicare, Medicaid, and other programs. Hiring or retaining an excluded individual can lead to severe penalties and loss of reimbursements, so compliance is critical. The client needed a reliable, automated exclusion verification process to replace tedious manual checks.

The Need

Regulatory Compliance: Healthcare organizations are expected to screen all employees, contractors, and vendors against the OIG exclusion list every single month. Failing to do so not only risks heavy fines (often tens of thousands of dollars per violation) but also loss of Medicare/Medicaid reimbursements for any services provided by an excluded person. Our client’s HR and compliance teams were manually checking the OIG online database periodically – a time-consuming, error-prone task. With over 50 employees (and growing), the manual process left too much room for human error and potential oversight. The organization needed an automated solution to:

• Streamline monthly exclusion checks: Eliminate the need for manual name-by-name searches.
• Ensure no one is missed: Check every employee and contractor on schedule, including new hires during onboarding.
• Provide documented proof of compliance: Generate reports each month to demonstrate due diligence in case of an audit.
• Integrate with existing HR systems: Use their current payroll/HR data (hosted in Paylocity) without requiring duplicate data entry.
• Maintain security and privacy: Handle sensitive personal data (names, DOBs, etc.) in a secure fashion, and avoid storing data like SSN unnecessarily.

The Solution

Pulse Solutions developed a secure, cloud-ready software solution that automates the entire LEIE exclusion verification process for the client. The system is built on a robust tech stack (ASP.Net Core web services with a SQL Server database) and can be deployed on the client’s cloud environment or on-premises servers, according to their preference. We designed it with flexibility so that the same framework can work with any popular HR or payroll platform via APIs.

Integration with HR/Payroll Systems: The solution connects to the client’s HR software (in this case, Paylocity) through its API to pull the latest employee roster each month. (No manual spreadsheets needed!) Our framework is adaptable to other major HR and payroll systems as well – including Gusto, ADP, BambooHR, QuickBooks Payroll, Paychex, Square Payroll, Rippling, OnPay, and more – by leveraging their published APIs. This means no matter which HR platform a company uses, our exclusion-check system can plug in securely and retrieve the necessary employee and vendor data automatically.

Automated Monthly Process

We scheduled the system to run on the 15th of every month (the schedule can be adjusted as needed). Here’s how it works step by step:

1. Employee Data Extraction: The system automatically calls the Paylocity API (using stored secure credentials) to fetch an updated list of all active employees (and any relevant contractors or vendors stored in the HR system). Key identifying fields like first name, middle name, last name, date of birth, and address are gathered. This data is stored in a secure staging database table for processing. (The design ensures no sensitive data, like Social Security Numbers, is stored in our database, preserving privacy.)
2. Latest LEIE Download: Next, the system downloads the latest OIG LEIE exclusion list from the official HHS OIG source. The LEIE is updated regularly (typically monthly), and we use a fixed URL for the current exclusion list CSV file to ensure we always get the most recent data. This step is fully automated – no human intervention needed. If the download fails for any reason (e.g., network issue), our system sends an alert notification to the support team so it can be corrected quickly.
3. Data Parsing and Storage: The downloaded exclusion list (a CSV containing fields like excluded individual’s name, DOB, address, etc.) is parsed and loaded into the database. We archive previous months’ lists so we have a history, but each monthly run uses the newly downloaded file for the most up-to-date check.
4. Matching Engine (Exact & Fuzzy Matches): Here’s where the magic happens. Our solution compares the HR list against the LEIE list using multiple matching algorithms.
5. Exact matches: We look for precise matches on full name (with minor normalization like ignoring punctuation) or a combination of last name + first name + middle initial. We also cross-check if date of birth matches when available, to confirm it’s the same person and not just a name coincidence. An exact match means a very high likelihood that an employee is listed on the exclusion registry.
6. Close (fuzzy) matches: Because names can have variations or typos, we also employ phonetic matching (e.g., Soundex or similar algorithms) to catch similar-sounding names (e.g., “John Smith” vs “Jon Smyth”). Additionally, we flag partial matches like the same first few letters of the first and last name combined with a matching DOB or a matching ZIP code region. These near matches might indicate a potential exclusion that isn’t an exact text match – for example, if someone used a nickname or there’s a maiden name involved. Close matches are essentially possible hits that require human review to confirm if it’s the same individual or just a coincidence.
7. Compliance Reporting & Notifications: Once the comparison is done, the system generates a clear report of the results. We designed an email notification that goes out automatically to designated recipients (e.g., the HR director, compliance officer, etc.). The email includes a summary of the total records checked and any matches found. It then details any Exact Matches and Close Matches with relevant information: the name of the employee, which data field matched (name, DOB, etc.), and the corresponding details from the LEIE record (e.g., the excluded individual’s name, exclusion type, date, etc.). Even if no matches are found, the system will still send a “all clear” report email stating that zero matches were detected – providing peace of mind and documented proof that the check was performed for that month. Importantly, we configured the mailer to also send instant alerts if any part of the process fails (for example, if the API or download step encountered an error), so the IT team can address it and rerun the check if necessary. We typically use SendGrid or a similar trusted email service to reliably deliver these notifications (or the client’s preferred email API/SMTP server, as needed).

Key Features and Security

• Fully Automated & Scheduled: The entire process runs on a schedule without manual effort. This eliminates human error and ensures consistency – nothing gets overlooked or forgotten.
• Seamless API Integration: By integrating with payroll/HR systems via API, the solution ensures it’s always using current data. It’s compatible with many systems (Gusto, ADP, Paylocity, BambooHR, etc.), making it easy to deploy in any environment.
• Secure Data Handling: We built the solution with security best practices. Data transfer between the HR system and our tool is done over encrypted channels. Sensitive personal data is handled carefully – for instance, we do not store Social Security Numbers or any unnecessary PII in our database. We use unique employee IDs and names/DOB for matching, and all data is stored in a secure SQL database that can reside on the client’s controlled servers or HIPAA-compliant cloud storage. Access to this system can be restricted to authorized personnel only.
• Cloud or On-Premise Deployment: Flexibility in hosting was a design requirement. The solution can run in the cloud (e.g., on an Azure VM with an Azure SQL Database) or on a client’s on-premise Windows server. In this case study, the client opted to host on their own infrastructure, so we provided a lightweight Windows service and scheduler (using tools like WinAutomation/SQL Jobs) to execute the monthly tasks. For other clients, we can just as easily deploy it on cloud infrastructure, with minimal setup.
• Fail-safes & Support: The system includes logging and error-catching at each step. If something goes wrong (e.g., the HR system’s API is down or the OIG website is unreachable), it notifies the designated tech contacts immediately. Our solution also comes with a support plan – in this project, we offered a 90-day warranty and continue to provide on-demand support and enhancements as needed.

Results & Benefits

This automated exclusion screening solution quickly brought the organization into full compliance with OIG guidelines. The first monthly report checked 58 employees and flagged a handful of potential issues for review. The compliance team was immediately alerted to two exact matches (which, upon investigation, turned out to be false positives due to common names) and two close matches that were later cleared. Thanks to the detailed report, the HR department was able to swiftly verify those individuals, document the due diligence, and confirm no actual excluded person was on staff. Key benefits realized include:

• 100% Monthly Compliance, Effortlessly: The organization now conducts the required exclusion check every month without fail. What used to be a tedious manual chore is now done automatically in the background. The team can demonstrate to auditors that they have a reliable process in place, with timestamped reports as evidence.
• Time and Labor Savings: HR staff no longer spend hours combing through names on the OIG website or juggling spreadsheets. The automated system freed them to focus on more important tasks (like addressing any flagged cases proactively, or other HR duties) instead of repetitive data entry.
• Reduced Risk of Fines and Penalties: By catching potential matches early and regularly, the organization greatly reduces the risk of inadvertently employing an excluded individual and facing those steep penalties (which can reach up to $10,000 per incident or more). In the healthcare industry, this kind of proactive compliance is invaluable for avoiding financial and legal trouble.
• Fast Response to Issues: In the event an employee or contractor is ever identified on the exclusion list, the system ensures the right people know immediately. In this case, if an actual excluded person had been found, the alert would enable management to swiftly remove them from federal program duties and take proper action. Early detection protects the organization’s billing and reputation.
• Audit-Ready Documentation: Each monthly email report serves as a documented record that the exclusion screening was performed and what the outcome was. This means if regulators or internal auditors ask for proof of compliance, the company can readily provide these reports. It’s a peace of mind factor – knowing that there is a consistent paper trail of compliance.
• Adaptable for Vendors and New Hires: Although this project focused on employees, the same process can screen vendors, contractors, or medical staff lists as well. It can also be run on demand for new hires during onboarding (so that no one slips through between the monthly cycles). The client plans to integrate the on-demand check for any new physician or staff joiners, leveraging the same system.

Conclusion

With Pulse Software Solutions’ exclusion verification software in place, our client achieved a secure, automated compliance process that runs like clockwork. What was once a significant administrative burden is now handled by a reliable system that scales easily as the organization grows. We delivered a solution that keeps their workforce in check against the OIG exclusion list, reduces regulatory risk, and saves valuable time – all without sacrificing security or flexibility.

This case study is just one example of how Pulse Software Solutions can bring any organization up to speed with OIG LEIE exclusion screening. Want a similar outcome for your healthcare practice, HR department, or business? We can rapidly implement a tailored exclusion monitoring system integrated with your payroll or HR platform of choice (whether it’s ADP, Gusto, Paylocity, BambooHR, QuickBooks, Paychex, Rippling, OnPay, or others). Our team handles the heavy lifting – from API integration to deployment – to get you compliant quickly and painlessly. Let’s talk about how we can help safeguard your organization with automated exclusion screening and keep you audit-ready every month.