Good Background Screening Crucial to Avoiding Liability
Healthcare employers must screen potential employees and physicians carefully to avoid liability, but it is common to encounter roadblocks. Understand the pertinent laws and limitations.
• Sometimes, employers must read between the lines for an accurate idea of an applicant’s past.
• Take care to comply with laws regarding the use of credit checks and other investigations.
• Always verify licenses and other credentials.
Proper background screening is critical for protecting patients and staff, as well as avoiding liability exposure that can come from allowing someone with a questionable history to work in your organization. Healthcare organizations can face special challenges with background screening, but there are ways to overcome them.
The issue of background screening always has been a difficulty for employers, says William Hopkins, JD, partner in the Shackelford law firm in Austin, TX. All employers know that they must perform the checks, but as most former employers are advised only to provide dates of employment and eligible-for-rehire status, there is a constant question of whether there is any value to the process.
There are ways to get to the answers, Hopkins says.
“Unfortunately, there is no perfect answer and the previous employer is always probably going to have more information than they will be willing to provide you, but by asking follow-up questions about the employee, you can sometimes get some cues that can help you make your decision,” Hopkins says. “Given the potential stakes involved in hiring a healthcare employee, I think that healthcare providers need to go beyond just the surface in their questions.”
The key to mitigating litigation risk is to ask questions that are factual and verifiable, Hopkins says. Usually, it is the prior employer’s opinion comments that get them in trouble, but by asking questions that are factual, they are given more leeway to answer questions and perhaps provide some great information, he says.
“Also, by asking factual questions, you can sometimes gain insight by the subtle cues provided by the person that you are speaking to. Sometimes, it is what they do not say out loud that tells you what you need to know,” he says. “Once someone is offered a job and is hired, it is incumbent on healthcare employers to ensure that all new employees are properly trained and oriented to their new job. That often may require some form of competency checklists, so that the employee’s skills are verified and not just assumed. Also, going through this competency process will often expose other weaknesses in a new employee if there are any.”
One of the biggest challenges to effective background screening is knowing what information can be relied on, says Angela R. Matney, JD, an attorney with Hirschler Fleischer in Fredericksburg, VA. Information from social media, for example, can be misleading and fail to present an accurate picture of the candidate. Criminal background checks also can yield results for people with the same or similar names.
Employers also must comply with screening laws. The federal Fair Credit Reporting Act (FCRA) sets out the minimum standards applicable to background checks conducted by third parties for employers. The FCRA applies to “consumer reports,” which are generated by a third-party screening agency (a consumer reporting agency, or CRA). Credit bureaus are considered CRAs under the FCRA, Matney explains. (See the story in this issue for more on the FCRA requirements.)
Peer Review May Hide Info
Some the challenges involve physician employees, says Karen Owens, JD, an attorney with the law firm of Coppersmith Brockelman in Phoenix. As hospitals employ physicians in ever-increasing numbers, some special issues arise in screening physicians for employment, she says. Physician quality and behavior issues typically are identified in the medical staff peer review process, which often is confidential under state law.
“Under some state provisions, human resource offices don’t even learn of specific quality issues in their own employed physicians because these matters are sequestered in medical staff committees. And even a healthcare administrator aware of specific quality issues may remove an employed physician using a no-cause termination agreement that may include negotiated reference language,” Owens says. “Although some courts have made clear that healthcare employers who provide misleading references can be liable for fraudulent misrepresentation, employers of physicians generally can avoid that kind of liability by simply providing no substantive reference at all.”
Because of these issues, hospitals seeking to employ physicians must get creative, she says. First, a hospital employer should work as closely as the laws allow with medical staffs in determining whether a physician should be appointed to the medical staff — and hired. Often, the medical staff will have access to information that is unavailable to human resources or the physician employment office, she says.
“For example, the medical staff obtains a report from the National Practitioner Data Bank, which contains mandatory submissions from prior hospitals and state medical boards about matters such as the surrender of clinical privileges under investigation; limitations on state licenses or medical staff privileges; and similar serious problems,” Owens says. “Hospital employers also need to read between the lines with respect to physician quality.”
She lists the following red flags:
• short stays at prior employers or as medical staff members at prior hospitals;
• frequent moves from state to state or community to community, especially when a move is close in time to a malpractice claim;
• difficulties obtaining references, especially when physician medical directors refuse to have conversations about the physician or seem uncomfortable or secretive during reference calls;
• numerous and/or high-dollar malpractice claims;
• lapses in employment or medical staff membership;
• any reports of problem clinical care or conduct that appear on professional board websites.
Verify Licenses, Other Credentials
Many of these red flags also apply with respect to hiring patient care professionals other than physicians, such as nurses and physician assistants, says Jill Chasson, JD, also an attorney with Coppersmith Brockelman. Short stints of employment, gaps in employment, frequent moves, or difficulty in obtaining references can raise questions about whether there were issues with the quality of a candidate’s work performance. Vague or less-than-credible explanations from the candidate about the circumstances of departure from prior jobs also can signal potential problems.
Chasson recommends that hospitals check the status of all professionals’ licenses with the appropriate state licensing board and conduct a criminal background check on anyone who would be interacting with patients. In addition, she notes that the candidate should be asked in a written application and in an interview about the reasons for leaving previous employment, with appropriate follow-up questions as necessary to secure clarifications or additional information, such as whether the candidate has ever been terminated for performance reasons.
An application form also should include language stating that the candidate certifies the accuracy of the information he or she is providing, and that falsification or material omission of information is grounds for immediate termination of employment, Chasson says.
If a hospital employer finds clues about a candidate’s possible problems at a prior hospital or other employer, the hiring hospital should insist on receiving more information from the prior hospital or employer and the candidate. In the absence of vindicating information, the hospital can decline to hire the candidate or, for a physician, consider placing the physician on probation or include significant protections for the hospital in the employment contract, she says.
Owens notes that probation or other protections can be difficult when the hospital badly needs a physician to serve the community, or is understaffed in other ways. But removing an employed physician who is on the medical staff, or terminating other kinds of professionals, can be even more difficult than refusing to hire candidates with red flags at the outset, she says.
Risk of Violence Ups the Ante
The threat of workplace violence is an added complication to the challenge of background screening, says Molly R. Batsch, JD, an officer with the law firm of Greensfelder, Hemker & Gale in St. Louis. The Bureau of Labor Statistics suggests that incidents of serious workplace violence are at least four times more common in the healthcare industry than in other industries, she notes.
At the same time, financial liability for the violent acts and other misconduct of employees is one of the most significant areas of exposure for healthcare providers. This exposure stems from the fact that hospitals and clinics may be held liable for injuries resulting from their failure to properly screen the employees they hire, she says.
While a comprehensive workplace violence prevention plan should be considered to fully address the risk of workplace violence, careful background screening should be conducted regardless of whether such a plan is implemented, Batsch says. In fact, most states require background checks to be conducted on certain healthcare workers, particularly those who have patient or child care responsibilities. She notes that Section 6201 of the Affordable Care Act likewise imposes background screening obligations on certain healthcare providers.
“Even if not required, conducting background checks on all employees working at a hospital, clinic, or other healthcare provider can be a very effective tool to reduce both workplace violence and potential liability stemming from workplace violence or other employee misconduct,” she says. “However, when conducting non-mandatory screening, employers should be especially careful to review applicable background review restrictions and guidelines.”
The Equal Employment Opportunity Commission issued guidance in 2012 that requires employers to conduct an individualized assessment of any criminal convictions discovered during a background check, Batsch notes. This assessment must consider the nature and gravity of the offense or conduct, the time that has passed since the offense, conduct and/or completion of the sentence, and the nature of the job held or sought.
Further complicating the background review process is the fact that most former employers now provide only very limited information about former employees to prevent potential litigation, she says. Many states regulate what information a former employer can and cannot disclose about a former employee.
“This new environment often leaves employers wondering why an employee left his or her last job and if they can rely upon the employee’s self-serving explanation. However, there are a few limited options that may provide employers with additional information about an applicant’s employment history,” Batsch says. “For example, several states, including Missouri, require former employers to provide their employees with a service letter upon request, providing the true reason why their employment ended. While these letters must be requested by the employee rather than a prospective employer, and often must be requested within a limited time frame, a prospective employer may ask an employee to obtain a service letter in such states.”
In addition, advising applicants that failing to be completely truthful during the hiring process will result in termination regardless of when the dishonesty is discovered may act to deter employees from misrepresenting information about prior discipline or terminations, Batsch says. This language should be included in the employer’s background review policy, a copy of which all prospective employees should acknowledge during the application process.
Verify Background Check Providers
In addition to federal restrictions, many states and municipalities have screening laws regarding credit, criminal history, arrests, and other legal issues, notes Charles A. Krugel, JD, a human resources attorney and counselor on labor and employment law on behalf of business in Chicago.
Many of these laws prohibit the use of past arrests, certain criminal or civil convictions, and credit issues, he says.
“I always advise healthcare businesses to scrutinize their background-checking providers as carefully as they scrutinize their employees. Healthcare businesses should make sure that their screening providers are either licensed, bonded, or fully insured for errors or omissions in screening, and that those screeners will indemnify their customers for any errors or omissions,” he says. “Alternatively, the healthcare company may want to consider insurance for these types of employment practices.”
• Molly R. Batsch, JD, Greensfelder, Hemker & Gale, St. Louis. Phone: (314) 335-6828. Email: [email protected].
• Jill Chasson, JD, Coppersmith Brockelman, Phoenix. Phone: (602) 381-5481. Email: [email protected].
• William Hopkins, JD, Partner, Shackelford, Austin, TX. Phone: (512) 469-0900. Email: [email protected].
• Charles A. Krugel, JD, Chicago. Phone: (312) 804-3851. Email: [email protected].
• Angela R. Matney, JD, Hirschler Fleischer, Fredericksburg, VA. Phone: (540) 604-2117. Email: [email protected].
• Karen Owens, JD, Coppersmith Brockelman, Phoenix. Phone: (602) 381-5463.
• Angela R. Matney, JD, Hirschler Fleischer, Fredericksburg, VA. Phone: (540) 604-2117. Email: [email protected].
Proper background screening is critical for protecting patients and staff, as well as avoiding liability exposure that can come from allowing someone with a questionable history to work in your organization.
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