9 Reasons Why Pre-transactional OIG Exclusion Checking is Essential

Todd Rudsenske, Cain Brothers managing director once said, “Compliance is actually the reason most deals don’t get done”.

As we already know, List of Excluded Individuals and Entities (LEIE) contain almost 70,000 excluded individuals and entities and are updated monthly by OIG. Without proper OIG Exclusion Check, the company can face civil monetary fines and penalties in the hundreds of thousands of dollars if an organization hires or contracts with an excluded individual or entity.

But you know what the best part people admire the most? These fines are 100% avoidable. Before a company look for another or we can say acquires another, a prudent pre-transactional due diligence item should include a search list of each and every existing employee, third party contractors and supplier/entities for OIG exclusions.

Below are the OIG Exclusion audit demonstrated key points:

     • A purchaser can save its liability, fines, and bad publicity if there is regular provision to conduct OIG exclusion and license verifications

     • To ensure that all employees and vendors have current licenses and are not excluded or debarred, the seller should hold Representation and Warranty

Below are the top 9 reasons why Pre-transactional OIG Exclusion Checking is Essential:

      • The employer is listed for any actions or bills submitted by an excluded individual or entity.

      • A stock purchase includes assuming pre-existing liabilities.

     • Standard of liability lies in “Knew or should have known”. The OIG database is available for searching purposes.

      • You will have to go after the reserve for any undisclosed fines related to the exclusion in case any reps and warranties are made.

      • No matter if you are purchasing assets only; the OIG will still hold the employer liable for the fines.

      • up to six years from the event, fines can be made

   • To conduct appropriate background checks and one that especially includes OIG exclusion searches, it is one of the best practices known.

      • OIG Background Check is one of the effective pre-transaction due diligence just like other lists that have to be checked in order to assure that your client is         buying a lawfully run and compliant company.

   • It is one of the best measures to OIG Exclusion Check and thus results into appropriate background checks

‘Exclusion Screening’ understands your businesses, overall requirements and knows the law! If you want to get the screening done without any hassle, contact us now!