Contractors Screen Employees but Extent of Screening Varies

HEHS-00-135R: Published: Jun 30, 2000. Publicly Released: Jun 30, 2000.

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William J. Scanlon
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Pursuant to a congressional request, GAO provided information on the use of employee screening measures by Medicare claims administration and program safeguard contractors, focusing on the: (1) requirements the Health Care Financing Administration (HCFA) has placed on Medicare contractors to conduct employee background checks; (2) steps Medicare contractors are taking to ensure that employees are trustworthy in handling Medicare funds and sensitive information; and (3) costs to Medicare contractors of conducting background checks or using other employee screening measures.

GAO noted that: (1) HCFA expects its contractors to exercise sound business judgment when they make hiring decisions; (2) as a result, HCFA does not specifically require its Medicare claims administration and program safeguard contractors to conduct background checks or undertake other employee screening measures; (3) however, HCFA does advise its claims administration contractors to adopt personnel selection safeguards, specifically employment verification and applicant certifications; (4) HCFA also requires its claims administration contractors to obtain fidelity bonds for certain employees; (5) in addition, both Medicare claims administration and program safeguard contractors are required to collect and submit to HCFA conflict of interest information; (6) the Medicare claims administration and program safeguard contractors GAO surveyed screen their employees as common business practice without specific requirements from HCFA to do so; (7) nearly all the contractors in GAO's sample said that they perform typical screening measures, such as employment and education verification, reference checking, and credential validation; (8) most of the claims administration contractors GAO spoke to also reported that they perform more extensive screening measures, such as criminal background checks and drug tests; (9) in contrast, the two program safeguard contractors GAO surveyed indicated that they do not conduct criminal background checks or require drug testing unless such requirements are included in their contracts; (10) both claims administration and program safeguard contractors reported that they rarely use less traditional screening measures, such as credit checks and government debarment and exclusion database reviews; (11) the costs associated with employee screening vary by the complexity and urgency associated with each screening measure; (12) however, the Medicare contractors GAO surveyed could not calculate the total cost of their employee screening measures; and (13) the fact that employee screening efforts are conducted and continue to be recognized as a common business practice within the Medicare contractor community suggests that such measures are considered worthwhile.

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