What You Need to Know About DEA Excluded Parties List Screening

As organizations continue to grow and expand their operations overseas, it’s becoming increasingly common to run into international trade and compliance regulations. Many countries like the United States block domestic companies from doing business with certain restricted third-party entities in the name of national security, economic protections, or preventing fraudulent transactions. And they enforce these measures by requiring companies to include exclusion screening processes in their compliance arsenal.

Legal compliance is, therefore, becoming a bigger challenge for growing organizations, especially as the requirements for third-party due diligence and restricted party screening grow more and more stringent. Among the many denied party lists that a business must follow, the Drug Enforcement Administration (DEA) enforces its own regulations in this respect which require organizations to screen against DEA Excluded Parties Lists.

If your organization operates in the healthcare industry and you’re aware of the notoriously heavy regulations in this market, then you need to study exclusion compliance and what the DEA expects in that regard.

Government agencies provide public lists of individuals and entities that domestic organizations must avoid working with. Failure to comply often results in costly monetary fines and damage to the reputation of your organization. In addition, excluded parties are often risky to work with anyway and can harm your operations.

The issue at this point is checking whether a new partnership puts you in contact with an excluded party. As organizations become more globalized, it is easy to get in touch with one accidentally. Healthcare corporations must have a solid exclusions screening program in place to prevent non-compliance.

There are many separate exclusion lists that hospitals and other healthcare institutions have to pay attention to, and they’re all often created and maintained by different government organizations across the U.S. The most well-known ones are:

• The Office of the Inspector General’s List of Excluded Individuals and Entities covers fraudulent and potentially abusive healthcare activities.
• The Government Services Administration’s System For Awards Management dictates which entities are allowed to receive federal contracts.
• The Foreign Corrupt Practices Act for preventing foreign bribery from occurring with domestic American companies.

Some industries, the pharmaceutical one especially, have their own set of tailored regulations and exclusion screening lists. The Drug Enforcement Administration, as we’ll discuss, is of particular interest to businesses operating in drugs, pharmaceuticals, and other potentially controlled substances.

The DEA is a federal law enforcement agency in the United States with the responsibility of controlling drug distribution within the country and enforcing the Controlled Substances Act.

Having been established back in 1973, the agency handles various roles in law enforcement, including:

• Investigating violations of controlled substance laws
• Seizure of assets related to illicit drug trafficking
• Researching patterns of drug-related crimes with federal, state, and local officials
• Coordinating drug law enforcement with foreign countries and entities

The Controlled Substances Act is one of the Drug Enforcement Administration’s most high-profile responsibilities. Managed by both the DEA and the Food and Drug Administration, this list of controlled substances is classified into a few main categories based on the potential for abuse of the drug as well as any accepted medical uses.

While the DEA’s activities today largely center around international narcotics smuggling, it often looks into domestic operations as well as related to drugs and pharmaceuticals. For this reason, medical companies need to pay attention to its requirements, including the DEA Excluded Parties Lists, when conducting business both within the country and with international parties.

Compliance can be a complicated topic, especially for medical institutions operating across borders and with foreign entities regularly.

Making sure that you aren’t working with a restricted party involves a formal exclusions screening program that covers all the relevant exclusion lists that apply to your business, whether they’re from the Drug Enforcement Administration or otherwise. The companies with well-developed screening solutions follow a few basic principles.

The purpose of denied party screening is to minimize legal risk, so it makes sense to screen as many candidates as possible. Compare any applicable exclusion lists with the people and groups you work with, including:

• Onboarded employees
• Medical staff
• Third-party suppliers

Larger healthcare organizations need to focus on screening the parties they work with. And comparing the actual entities may also involve looking for variations of names or using other identifiers like the EIN (employee identification number).

Either way, exclusion screening must be done regularly to avoid potential non-compliance, with many organizations choosing to do so every month at the least. As new employees are added regularly and new partnerships are announced, screening will prevent you from contracting a banned party.

Don’t make the common mistake of leaving the entire task of compliance to a single department or team. The healthcare industry is particularly stringent about compliance, so allow multiple people around the organization to work together to achieve it.

For instance, it’s not uncommon for compliance to be a responsibility of multiple departments. Procurement needs to scan new vendors for sanctioned parties, and human resources needs to scan for new employees during the onboarding process.

There are two primary benefits to doing so: you enable company-wide visibility into your compliance efforts, and you facilitate collaboration amongst your separate teams.

Compliance with denied party lists is complicated for many reasons. You have multiple exclusion lists from multiple government agencies to follow, including the DEA Excluded Parties Lists, and you need to scan almost every employee and business relationship you come into contact with. At the same time, compliance laws are subject to change regularly.

The aforementioned List of Excluded Individuals and Entities by the Office of the Inspector General, for instance, makes several things clear to the business world:

• Companies are fully responsible for their own compliance.
• The list of excluded parties can change at any time.
• There is no obligation from any government entity to notify businesses of new additions to the exclusion list.

The result is that taking a proactive approach to compliance is now necessary, and the best way to do so efficiently is through software-based compliance technology. A centralized platform not only helps you handle the vast healthcare exclusion lists out there but also ensures that you have a comprehensive program of checks so that no exclusion slips through the cracks.

Not to mention, software management is ultimately more cost-effective thanks to the minimization of manual tasks in the procedure.

The Drug Enforcement Administration—alongside other government agencies like the GSA, OFAC, and OIG—enforces various regulations on the pharmaceutical and medical industries. Keeping up with all these exclusion lists will be cripplingly expensive without the proper denied party screening tools.

Are you worried about compliance sanctions and penalties impacting your healthcare organization? Improve your compliance with Descartes' best-in-class screening tools.

Our industry-leading tools combine screening functions with your other business processes and software, including customer relationship management platforms and enterprise resource planning tools.

Don’t let another potentially barred party from sneaking into your organization’s workflow and causing problems during the next security audit. From configurable search options to multiple screening methods to easy trade compliance features, check out how our capabilities can serve you.

For more comprehensive information about effective compliance in the healthcare industry, download our white paper or visit our Resource Center.

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