Over the course of the year, I attended a number of conferences. This year has been no exception. One event, in particular, had a number of senior executives in finance and healthcare in attendance. I was fascinated by the conversations, candid discussions, and learning that happened among peers. One of the most interesting (and frequent) topics of conversation was on background checks for workers. While most employers check references as part of the hiring process, including contacting a candidate’s previous employers, schools, colleges, and other sources to learn more about their employment history, educational background, and qualifications for a job, the healthcare industry has more stringent requirements for background checks due to the sensitive nature of most of these jobs and company liability for employee actions. Because many of these requirements relate to patient (customer) data and the risk of financial fraud can be high, the finance industry faces some of the same challenges.
The standard education background check is used to verify the training or education for someone applying for a job. Typically, the check will verify the dates of attendance and whether or not a degree was obtained. Most degrees are verified by the admissions and records office of the school or institution. When conducting background checks on higher-level applicants where a certain certification or degree is considered a qualification, like a registered nurse or licensed accountant, many companies choose to verify with the registrar if the applicant possesses that certification or degree they are attesting to. In both healthcare and finance, these initial background checks are sufficient for establishing credentials, but not for identifying potential liability or fraud that can open your company up to very expensive lawsuits.
For healthcare companies that are federally funded, education and credential verification is a requirement, but that doesn’t mean that private healthcare companies can skip these verifications. The healthcare industry as a whole cares for the health, safety, and privacy of its patients, clients and customers. This means that healthcare companies are not just ethically responsible to protect patients; they can also be held legally accountable when an employee’s actions violate company policy, even if that policy follows federal law to the letter.
The case examples for violations of health information privacy encompass healthcare employers from pharmacies to private institutions to home health aid to hospitals and outpatient facilities. That’s just the tip of the iceberg for legal risk, as there are even more lawsuits for malpractice and patient negligence that hold healthcare companies liable for employee actions. Considering that past behavior is often indicative of future performance, background checks in healthcare must also be able to access any disciplinary action against an individual in the healthcare field requires access to FACIS (Fraud and Abuse Control Information Systems). FACIS is a vast database containing adverse actions of individuals and entities sanctioned in the healthcare field and includes information on disciplinary actions like exclusions, debarments and letters of reprimand and probation.
Positions in the financial services industry often involve access to money, customer data, social security numbers, credit card numbers, tax information, and more. Because of these factors, the risk for abuse in this industry—including fraud, identity theft, and embezzlement—is unusually high. There are federal regulations in the Fair Credit Reporting Act (FCRA) that require background checks for most personnel in the financial services industry. For example, Section 19 of the Federal Deposit Insurance Act (FDIA) and Section 205(d) of the Federal Credit Union Act (FCUA) govern whether an individual may be employed by a federally insured depository institution or an insured credit union, respectively. These institutions are prohibited from employing any person who has been convicted of any criminal offense involving dishonesty or breach of trust. The risk to financial companies is typically in the form of lawsuits for negligence, meaning an employer either knowingly hired or neglected to run a background check on an employee that, for example, commits identity theft or fraud using customer data.
How can healthcare and finance employers find dependable, low-risk employees and avoid lawsuits? Background checks and education verification don’t just ensure that the candidate you hire has a clean history and all the right qualifications for the job. Using the proper background checks can help you protect your business, ensure compliance with federal and state laws, and greatly reduce the risk of legal action. Your background check vendor partner can help you understand the risks, how to reduce or eliminate them, as well as develop a long-term and big picture verification and screening strategy.
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