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Problems Remain for Ensuring That All High Risk Medicaid Providers Undergo Criminal Background Checks


An effective provider enrollment screening process is an important tool for preventing Medicaid fraud. It plays a vital role in identifying unscrupulous providers and preventing them from enrolling in Medicaid. The Federal Government requires States to conduct risk based screening activities as part of their processes for enrolling providers in Medicaid. OIG's evaluation of the Medicaid provider enrollment screening process in 2016 found that States were struggling to implement the required screening activities. Many States had yet to implement fingerprint based criminal background checks-a screening activity required for providers that the Federal Government deems to be at high risk for fraud, waste, and abuse. If not all high-risk providers undergo criminal background checks, the Federal and State Governments are vulnerable to unscrupulous providers intent on defrauding the Medicaid program.


We based this study on data from three sources: (1) a survey of 50 States and the District of Columbia (States) requesting information on their implementation of criminal background checks and the challenges they faced; (2) interviews with officials from 14 of the 18 States that had not implemented criminal background checks by CMS's July 2018 deadline for implementing this requirement; and (3) an interview with officials from CMS.


We found flaws with States' implementation of fingerprint based criminal background checks for high risk Medicaid providers. Eighteen States missed the deadline for implementation that CMS had set, and 13 of those 18 States had still not implemented these checks as of January 1, 2019. Unscrupulous providers could exploit two loopholes in the provider enrollment process to enroll in Medicaid without undergoing these checks. The first loophole involves CMS allowing States to-in certain circumstances-forgo conducting criminal background checks for high risk providers that Medicare has already enrolled, even though Medicare has not conducted checks on some providers. The second loophole involves States' reliance on high risk providers to accurately report their ownership information.


We recommend that CMS (1) ensure that all States fully implement fingerprint based criminal background checks for high risk Medicaid providers, (2) amend its guidance so that States cannot forgo conducting criminal background checks on high risk providers applying for Medicaid that have already enrolled in Medicare unless Medicare has conducted the checks, and (3) compare high risk Medicaid providers' self reported ownership information to Medicare's provider ownership information to help States identify discrepancies. CMS concurred with the first recommendation. CMS did not concur with the second and third recommendations.