What happens if you are in default of your federal, or state, student loan (HEAL)? How prevelant is this issue? Defaulting on student loans is something you shouldn’t overlook, especially if you are active in the healthcare industry. Let’s look at who is excluded and placed on the exclusion list by the OIG for the exact reason mentioned above.

As we have blogged about in the past, the OIG has the statutory authority to exclude an individual if they default on a federal student loan. Purusant to section 1128(b)(14) Default on health education loan or scholarship obligations. Minimum Period: Until default has been cured or obligations have been resolved to Public Health Service’s (PHS) satisfaction.

As of December 1, 2015 the OIG has excluded:

  • 2263 individuals listed because of “Default on Health Education Loan.”

State exclusion activity has increased – Michigan has:

  • 15 exclusions listed because of “Default on Health Education Loan”
  • Note: there are 51 OIG exclusions with a Michigan address for the individual

Why is this important?

First, the government is excluding people if they are in default of a student loan. Second, the term of exclusion for this category depends on the amount of time the individual is in default. The person can get back into good standing by entering into a payment plan and honoring it, thus ending the term of the exclusion. Unlike most other exclusion terms which are at minimum 5 years, the exclusion term for being in default could by much shorter. All of that to say, it is imperative to implement a monthly OIG exclusion monitoring program in your compliance plan in order to find and stifle the problem before it arises. 

You might also enjoy:
5 Steps to Ensure your Vendors are in Compliance 
Vendor Risk Management – Examining Vendor Financial Health
A Sanction-Screening Deep Dive: what is it and why it matters
Healthcare Compliance – applying lessons from kindergarten

Michael Rosen, ESQ

Written by Michael Rosen, ESQ
ProviderTrust Co-Founder, mrosen@providertrust.com

Michael brings over 20 years of experience founding and leading risk mitigation businesses, receiving numerous accolades such as: Inc Magazine’s Inc 500 Award and Nashville Chamber of Commerce Small Business of the Year
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