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The use of criminal background checks is becoming more prevalent as a form of credentialing for both individual and institutional health care providers seeking licensure, certification or the benefits of other government licensing and payment agencies. Specifically, criminal background checks are now routinely used by professional licensing board and payment entities to determine which providers have the privilege of practicing their craft and being paid for their services. One area where we are seeing criminal background checks have a significant impact is Medicaid provider enrollment, and the process impacts every type of provider seeking certification by the state’s Medicaid program.

In North Carolina, Medicaid providers must complete a lengthy list of disclosure and sanction questions during the application process dealing with convictions, disciplinary actions, and civil monetary penalties, for example. Applicants often do not pay careful attention to these questions, including the scope and time parameters, contained in them. Similarly, applicants tend to move quickly through the questions and assume that nothing in their past would require disclosure. This conduct can lead to inadvertent errors which can have significant ramifications for the processing time and ultimate eligibility as a Medicaid provider. It is essential that applicants take their time and closely examine the questions and the above metrics.

For instance, while the North Carolina Medicaid enrollment application asks about health care-specific fraud and abuse convictions, findings and sanctions, it also asks about any convictions other than minor traffic violations. This question is very broad in both scope and time. First, the scope involves any conviction, including a felony or a misdemeanor, for any reason, other than a minor traffic violation. Second, it is important to note that there is no time period in the question. The time parameter is nonexistent so even a thirty, forty, fifty year old conviction would be subject to the disclosure requirements.

Why is it important to carefully and properly answer the sanction questions – because of the subsequent criminal background check. Typically, a provider enrollment application is prepared and submitted by the applicant or the applicant’s attorney. After submission of the application and as part of the review process, a criminal background check is performed on the owners, managing employees and agents. If there is a “hit” on the criminal background check, the agency gets the report and the applicant does not know what it shows. If the conviction that caused the “hit” was not disclosed on the application and supporting documentation provided, the application is subject to a denial based on the failure to disclose. Then, the applicant either needs to engage in a time consuming process to either attempt to have the application withdrawn to avoid a denial, or in the worst case, receive a denial, which then triggers additional disclosure requirements on a subsequent application. If the provider applicant is successful in withdrawing the application, or the application is denied, the applicant will have to start the enrollment process from the beginning and re-apply, with the appropriate disclosure, and supporting documentation. If the application was denied, the applicant will also need to provide an explanation of why the conviction was not originally disclosed on the prior application. Either of these scenarios causes delays in the processing time of the application and subsequent approval. Any delay in approval could have serious repercussions for the provider because of the length of time necessary for the application to be processed. Remember, a provider cannot submit claims for reimbursement or be paid by Medicaid for claims until the provider has successfully enrolled.

The fact that a provider enrollment application contains an affirmative response to a disclosure or sanction question does not necessarily mean that the application will be denied. For purposes of Medicaid provider enrollment in North Carolina, the Division of Medical Assistance has discretion to approve an application if it is in the best interest of the integrity of the Medicaid program based upon consideration of the seriousness, age, and other circumstances involving the conviction.

When a provider applicant answers “yes” to one of the disclosure or sanction questions, it is essential to attach documentation explaining the reason for the response. North Carolina Medicaid requires that an applicant submit copies of the documents reflecting the disclosable activity which also shows the final disposition or resolution. In addition, this is the applicant’s opportunity to not only identify what the conviction or licensing issue was, but also to explain it, provide the circumstances, and provide any facts to mitigate the issue and support enrollment as a provider. A provider applicant will want to demonstrate that its enrollment is in the best interest of the Medicaid program and address the seriousness, age, and circumstances surrounding the event.

Generally, an enrollment problem with the criminal background check is caused by the failure to disclose a conviction, rather than the conviction itself. The failure to disclose often ends up being a more significant issue than the underlying offense. When answering disclosure and background check questions, it is critically important to be careful, thoughtful and comprehensive. If you are unsure how to answer a criminal background check question, seek competent advice from counsel before proceeding. Forewarned is forearmed.

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