Social Security Fraud, Waste, and Abuse Requirements: What Covered Entities Must Do

Social Security Act rules set the foundation for fraud, waste, and abuse controls across Medicare and Medicaid. As a covered entity, you must prevent improper payments, protect patient data, and respond decisively to risks. This guide clarifies what you need to do—day to day—to meet program integrity expectations and to safeguard Protected Health Information (PHI).

Social Security Act Exclusions

What exclusions mean and why they matter

The Social Security Act authorizes the federal government to exclude certain individuals and entities from participating in federal healthcare programs. If you employ or contract with an excluded party, you risk payment denials, repayments, civil monetary penalties, and other administrative sanctions. Exclusion screening is therefore a cornerstone of Medicare Non-Compliance Prevention.

Mandatory Program Exclusions

• Convictions for program-related crimes (e.g., healthcare fraud) trigger mandatory exclusion, typically for a minimum of five years.
• Patient abuse or neglect in connection with the delivery of healthcare services.
• Felony convictions related to healthcare fraud or other financial misconduct involving federal programs.
• Felony convictions related to the unlawful manufacture, distribution, prescription, or dispensing of controlled substances.

These Mandatory Program Exclusions apply regardless of job title; even administrative staff or managers can cause nonpayment risk if they furnish, order, or direct billable items or services.

Permissive exclusions

• License revocations or suspensions.
• Engaging in unlawful kickbacks or other improper remuneration schemes.
• Claims or documentation misconduct that indicates a risk to program integrity.

Screening and documentation practices

• Screen your workforce, medical staff, vendors, and downstream contractors against federal exclusion lists at hire/contracting and at least monthly.
• Document matches, resolutions, and any carve‑out arrangements; maintain proofs of screening for auditors.
• Ensure excluded individuals do not provide, order, or supervise services billed to federal programs, and promptly refund any payments if exclusion is discovered after the fact.

Medicaid Integrity Program

Purpose and scope

The Medicaid Integrity Program strengthens the detection, prevention, and recovery of improper Medicaid payments. It complements state program integrity units and coordinates with investigators to advance fraudulent claim investigations and provider education.

How it works

• Data analytics identify outliers and aberrant billing patterns across provider types and services.
• Targeted reviews and audits assess documentation sufficiency, medical necessity, coding, and adherence to coverage rules.
• Provider education clarifies documentation standards and compliance expectations to reduce future errors.
• Findings may be referred for fraudulent claim investigations or for administrative recovery and corrective actions.

What you must do

• Respond promptly to records requests; ensure documentation is legible, complete, and supports medical necessity.
• Maintain strong retention practices to support retrospective reviews and validation.
• Address audit findings with corrective action plans, monitoring, and repayment of identified overpayments.
• Use lessons learned from audits to harden processes and prevent recurrence.

Office of Inspector General Role

Oversight and enforcement

The HHS Office of Inspector General (OIG) combats fraud, waste, and abuse across federal healthcare programs. OIG conducts audits, evaluations, and investigations, and can impose civil monetary penalties, exclusions, and other administrative sanctions when warranted.

Guidance, alerts, and self-disclosure

• OIG issues compliance guidance and special fraud alerts to signal high‑risk arrangements.
• Organizations that uncover potential violations may use the OIG Self‑Disclosure Protocol to report, cooperate, and resolve matters more efficiently.
• Monitoring the OIG Work Plan helps you anticipate areas under scrutiny and prioritize internal reviews.

Practical steps for Medicare Non-Compliance Prevention

• Map arrangements against OIG guidance; correct those that elevate enforcement risk.
• Escalate red flags early and document investigation steps and outcomes.
• Integrate OIG findings into training and auditing plans to stay ahead of emerging risks.

Covered Entity Responsibilities

Core duties

• Adopt written policies and procedures addressing FWA prevention, detection, reporting, and Protected Health Information Safeguards.
• Designate accountable leaders (e.g., compliance and privacy officers) and ensure reporting lines to governance.
• Provide role‑based training that meets compliance training mandates and refresh it at defined intervals.

Workforce and vendor management

• Perform background checks and exclusion screenings for employees, licensed practitioners, owners, and contractors.
• Execute and manage business associate agreements that bind vendors to PHI protection standards.
• Apply consistent administrative sanctions for policy violations, up to termination where warranted.

Claims integrity and overpayments

• Validate eligibility, coverage, coding, and medical necessity before submitting claims.
• Investigate potential overpayments and refund promptly once identified and quantified.
• Retain documentation supporting each claim and any subsequent corrections or refunds.

Monitoring and continuous improvement

• Conduct periodic risk assessments; align audits with high‑risk services and payers.
• Use data analytics to detect outliers and pre‑empt fraudulent claim investigations.
• Track remediation to closure and report progress to leadership and the board.

Compliance Program Requirements

The seven essential elements

• Written policies, standards, and a code of conduct tailored to your operations.
• Dedicated compliance leadership and a multidisciplinary compliance committee.
• Effective training and education that satisfy compliance training mandates.
• Accessible reporting channels and non‑retaliation protections.
• Enforcement and disciplinary standards, including fair administrative sanctions.
• Risk‑based auditing and monitoring with documented follow‑through.
• Prompt investigation of issues and corrective action, including overpayment refunds.

Scaling and tailoring

Right‑size your program to your size, complexity, and risk profile. High‑risk service lines, novel payment models, and rapid growth require deeper controls, more frequent audits, and specialized training.

Measuring effectiveness

• Track training completion, hotline activity, investigation cycle times, and recurrence of issues.
• Test controls end‑to‑end—from ordering and documentation through coding, submission, and remittance.
• Periodically benchmark against peer practices and OIG expectations.

Implementing Safeguards for PHI

Administrative safeguards

• Perform a documented risk analysis; implement risk management plans with owners and deadlines.
• Maintain policies for access, minimum necessary, incident response, and sanctions.
• Train workforce regularly; verify understanding for high‑risk roles.

Technical safeguards

• Use role‑based access controls, multifactor authentication, and least‑privilege permissions.
• Encrypt ePHI in transit and at rest; manage keys securely.
• Enable audit logs, real‑time alerts, and data loss prevention to detect anomalous activity.
• Harden endpoints and servers, patch promptly, and segment networks containing ePHI.

Physical safeguards

• Control facility and device access; secure workstations, media, and server rooms.
• Use clean‑desk practices and privacy screens; restrict printing and copying of PHI.
• Dispose of paper and media securely with documented chain of custody.

Business associates and data lifecycle

• Vet vendors before contracting; require breach and incident notification terms.
• Map PHI flows, retention periods, and disposal triggers to support Protected Health Information Safeguards.
• Test backups and disaster recovery to ensure availability and integrity.

Reporting and Managing Privacy Incidents

Incident versus breach

An incident is any suspected or actual compromise of confidentiality, integrity, or availability of PHI. A breach is an incident that poses a significant risk of harm to individuals or is otherwise not mitigated by an applicable exception. Treat every incident as real until risk is assessed and documented.

Response workflow

• Detect and triage: capture who, what, when, where, and systems involved.
• Contain: disable access, isolate affected systems, and preserve evidence.
• Investigate: analyze scope, data elements, and root cause; interview personnel.
• Assess risk: consider the nature of data, unauthorized person, whether data was acquired or viewed, and mitigation steps.
• Decide and document: determine if breach notification is required and record your rationale.

Notification and Privacy Breach Reporting

• Notify affected individuals without unreasonable delay and within required timeframes; include clear descriptions of what happened and steps they can take.
• Report to regulators and, when thresholds are met, to the media; log smaller breaches and submit periodic summaries as required.
• Notify applicable payers and business partners per contract terms; coordinate messaging to avoid confusion.

Post‑incident remediation

• Fix control gaps, retrain staff, and apply administrative sanctions when warranted.
• Monitor for recurrence and verify effectiveness of corrective actions.
• Use the event to improve Medicare Non-Compliance Prevention and overall resilience.

Conclusion

Meeting Social Security Act and HIPAA expectations requires vigilant exclusion screening, robust compliance programs, strong Protected Health Information Safeguards, and disciplined incident response. Embed these practices into daily operations to prevent improper payments, reduce enforcement risk, and sustain patient trust.

FAQs

What are the mandatory exclusions under the Social Security Act?

Mandatory exclusions include convictions for program‑related crimes, patient abuse or neglect, felony healthcare fraud, and felony controlled‑substance offenses. These generally carry a minimum exclusion period of five years and bar participation in federal healthcare programs.

How does the Medicaid Integrity Program function?

It uses data analytics, targeted audits, and provider education to detect and prevent improper Medicaid payments. Findings drive recoveries, corrective actions, and when appropriate, referrals for fraudulent claim investigations in coordination with state and federal partners.

What responsibilities do covered entities have regarding PHI?

You must implement administrative, technical, and physical safeguards; train your workforce; manage business associates; and promptly investigate, document, and report privacy incidents and breaches according to applicable rules and contract obligations.

What are the key components of an effective compliance program?

Seven elements define effectiveness: written standards; empowered compliance leadership; ongoing training; open reporting channels; consistent administrative sanctions; risk‑based auditing and monitoring; and prompt investigation with corrective action and overpayment resolution.