Background checks and exclusion screening vital to provider compliance

Background checks and exclusion screening are a vital part of hiring and compliance, but there are considerable weaknesses in both processes that providers must keep in mind. In a Health Care Compliance Association (HCCA) webinar, The Critical Role of Background Checks and Exclusion Screening in Compliance & Risk Management, Paul Weidenfeld of Exclusion Screening, LLC reminded attendees that employees are both the most important business resource and biggest opportunity for risk.

Human capital risk management

Continued training and employee development can be seen as an investment, resulting in a competitive advantage of a business. Although physicians are considered the backbone of a practice, other employees have a great deal of interaction with patients and define the patient experience. Weidenfeld likened close oversight to managing human capital, which can reduce the chances of losses attributed to fraud, internal theft, absenteeism, and accidents and injuries. Risk management is a vital aspect of ensuring the financial success of a provider’s business, because about half of overall expenses come from employee salaries and benefits. Additionally, providers continue to pay high premiums for malpractice insurance—as well as insurance for general liability, privacy violations, property, and workers compensation.

Background check

During the hiring process, employers should conduct a background check to confirm the applicant’s identity, experience, and qualifications. For basic confirmation, employers can do some of their own investigating, but more in-depth background criminal and exclusion list background checks can take more resources and require outside help. However, third party background checks are subject to several regulations.

Criminal background checks are difficult to conduct thoroughly due to the lack of a single source. A federal background check must be authorized by law, and does not necessarily find everything on state, county, and municipal levels due to reporting issues. Other sources include sex offender lists, bad employee lists, terrorist watch lists, and motor vehicle databases. Compounding the issue are the differing requirements on checks and use of the information obtained. For example, federal regulations do not require a background check for home health agency (HHA) workers, but compliance with state laws is required for federal program participation. Some states require completed checks prior to employment, while some allow the check to be ongoing during the initial employment. Some states do not specify disqualifying convictions, while others allow disqualified individuals to seek a waiver.


Outside investigators are not always reliable. The U.S. Office of Personnel Management (OPM) Office of Inspector General (OIG) had debarred or referred for debarment many investigators known to have falsified reports while clearing federal job applicants for suitability or security clearances. Third-party investigators can be a serious compliance risk, shown by the $30 million settlement OPM received to resolve false claims charges after a contractor allegedly released cases to the OPM without completing them. Even if a thorough background check shows no criminal record, other information provided may be inaccurate and difficult to corroborate. Paid services will fabricate resumes, references, and even degrees to help applicants land a job.


Exclusion screening is another step that can easily trip up a provider. Hiring an employee excluded by the HHS OIG for posing risks to patient safety or financial integrity not only extends those risks to the provider’s business, but exposes the provider to overpayments when receiving reimbursements from federal health care programs. Every service furnished by an excluded person is not considered reimbursable.

The HHS OIG requires providers to screen its List of Excluded Individuals and Entities (LEIE) upon hire and then on a monthly basis. CMS requires states to in turn require Medicaid providers to screen both the LEIE and a state exclusion list, if available. Some states require providers to certify that there are no employees, vendors, or contractors that have been excluded from any state program. However, state exclusion lists are notoriously difficult to find and navigate, so providers cannot easily verify that all of these parties are in good standing.