A FACIS Level 3 background check is the most comprehensive tier of healthcare exclusion screening, searching federal sanction databases alongside state Medicaid exclusion lists, licensing board actions, and contractor debarment records across all 50 states, the District of Columbia, and U.S. territories. Healthcare employers use it to confirm that a job candidate, current employee, contractor, or vendor is not barred from participating in Medicare, Medicaid, TRICARE, or any other federally funded health program before that person touches a claim.
What a Level 3 Search Actually Covers
On the federal side, a Level 3 search checks the OIG List of Excluded Individuals and Entities, the GSA System for Award Management exclusions, the Drug Enforcement Administration, FDA debarment lists, TRICARE sanctions, and records held by the FBI, the Department of Justice, the Treasury Department, and the State Department.
On the state side, it searches Medicaid exclusion lists, contractor debarment records, and professional licensing board disciplinary actions from every state and territory. It also pulls from enforcement-related news sources such as HEAT Task Force announcements and state attorney general press releases, which can surface actions that have not yet made it into a formal database. Altogether the search draws from thousands of primary sources.
The adverse actions that appear in a Level 3 report go well beyond outright program exclusions. Results can include license suspensions and revocations, letters of reprimand, probationary actions, sanctions, and debarment from state contracts. A clean OIG check does not mean a clean Level 3 report, and that gap is the reason the broader search exists.
How Level 3 Differs From Lower Tiers
FACIS searches come in tiers, and the differences carry real consequences.
- Level 1 searches core federal databases only, including the OIG exclusion list, GSA’s System for Award Management, the Office of Foreign Assets Control, and the Office of Research Integrity. State actions are not covered.
- Level 1M adds state-level Medicaid and Medicare exclusion records to Level 1, but still skips licensing board actions and other state disciplinary data.
- Level 2 combines Level 1 federal sources with disciplinary and licensing board records from one state you specify. It leaves gaps for anyone who ever held a license or worked elsewhere.
- Level 3 combines all federal sources with state-level exclusion lists, licensing board actions, contractor debarment records, and related enforcement data from every state and territory.
Consider a nurse who was disciplined by a licensing board in one state, then moves and applies for a job in another. A Level 2 search scoped to the new state would miss the prior action. A Level 3 search would catch it. That is why most compliance professionals treat Level 3 as the working standard.
Who Needs to Run This Screening
Any organization paid by Medicare, Medicaid, TRICARE, or another federal health program has an obligation to screen the people involved in delivering or billing for those services. Hospitals, nursing homes, pharmacies, home health agencies, rehabilitation centers, and medical device companies all fall inside the scope.
The screening obligation is not limited to clinicians. Physicians, nurses, pharmacists, physician assistants, and certified nursing assistants are the roles most commonly screened, but the requirement reaches billing specialists, administrative managers, and anyone whose work touches federal healthcare dollars. If a contractor, subcontractor, or vendor in your supply chain is excluded and you are paying them with federal funds, the financial exposure lands on you. Level 3 screening increasingly covers all of those relationships, not just employees.
Why the Screening Matters: Exclusion Law and Penalties
The legal backbone is 42 U.S.C. § 1320a-7, which authorizes the Secretary of Health and Human Services to exclude individuals and entities from all federal healthcare programs. The statute creates two categories. Mandatory exclusions carry a minimum five-year ban and apply to convictions for Medicare or Medicaid fraud, patient abuse or neglect, felony healthcare fraud, or felony controlled substance offenses.1HHS Office of Inspector General. Exclusions Authorities Permissive exclusions give the OIG discretion over a longer list of grounds, including misdemeanor healthcare fraud, license revocations tied to professional conduct, false claims, kickbacks, and defaults on health education loans.3HHS Office of Inspector General. Background Information
The practical effect is simple: no federal health program will pay for any item or service that an excluded person furnishes, orders, or prescribes.2HHS Office of Inspector General. Background Information
The penalty for employing an excluded person is built to sting. Under 42 U.S.C. § 1320a-7a, an organization that submits claims for services provided by an excluded individual faces a civil monetary penalty per item or service billed, plus an assessment of up to three times the amount claimed.4Office of the Law Revision Counsel. 42 USC 1320a-7a – Civil Monetary Penalties The per-item penalty stands at $25,595 after the most recent inflation adjustment.5Federal Register. Annual Civil Monetary Penalties Inflation Adjustment For a single billing employee handling dozens of claims a day, exposure builds quickly.
Beyond per-claim penalties, the OIG can pursue exclusion of the employing organization itself. In many cases, the OIG offers a Corporate Integrity Agreement instead, typically a five-year supervised compliance plan requiring a compliance officer, independent audits, and controls on employing ineligible persons; in exchange, the OIG agrees not to exclude the organization from federal programs during the agreement.6HHS Office of Inspector General. Corporate Integrity Agreements
How Often You Have to Screen
Screening at hire and then walking away is one of the most common compliance failures in healthcare. Employees who are clean on their hire date can be excluded at any point afterward. The OIG recommends screening at hire and at least monthly thereafter.
For state Medicaid agencies, monthly checks are not optional. Federal regulations require state Medicaid programs to check the OIG exclusion list and the System for Award Management no less than monthly for all providers, owners, managing employees, and agents.7eCFR. 42 CFR Part 455 Subpart E – Provider Screening and Enrollment Private organizations contracting with Medicaid programs are generally expected to meet the same standard. For large workforces, continuous monitoring services flag new exclusions as they publish rather than waiting on a monthly batch.
Confirming a Name Match Before You Act
A name hit on a screening report is not a confirmed exclusion. The OIG is explicit that finding a matching name on the LEIE is not enough on its own. Verification requires the individual’s Social Security Number, or an entity’s Employer Identification Number. Date of birth or National Provider Identifier can further confirm or rule out a match.8HHS Office of Inspector General. LEIE Quick Tips
Skipping this step creates two failure modes. You might wrongly disqualify a candidate who shares a name with an excluded person. Or you might dismiss an apparent partial match and hire someone who is genuinely barred. Neither is defensible if program eligibility depends on the answer.
What to Do If a Current Worker Turns Up Excluded
If someone already on your payroll or roster shows up on an exclusion list, act immediately. The person cannot furnish, order, prescribe, or bill for any item or service payable by a federal health program. Removal from covered work is the first step, and it is not optional.
The second step is damage assessment. Figure out how long the excluded individual has been in a covered role, estimate the federal claims involved, and get legal counsel. The OIG’s Provider Self-Disclosure Protocol exists for exactly this situation, and organizations that come forward voluntarily generally fare better than those found through an audit or investigation. The OIG has stated that it will not reduce disclosed damages by the organization’s federal payor mix in these cases.9HHS Office of Inspector General. Health Care Fraud Self-Disclosure
Quietly removing the person and moving on is the worst option. The claims were already submitted, the overpayments already exist, and the liability does not clear itself because the staffing problem has been fixed.