"I will let you know after I complete the background check." If as a pharmacy owner you are not routinely saying this after an interview with a pharmacist job applicant, start today.

And, credentialing should be performed periodically even after a person is hired. In a 1996 Pennsylvania case, a pharmacy was charged by Medicaid with recoupment for overpayment because the pharmacist was technically not licensed during a five month period while he was obtaining 30 continuing education credits he had failed to obtain during the prior year required to validly renew his pharmacist license.

Even as a pharmacist employee, it is important that your employer screen job applicants. Since it is deemed Medicare/Medicaid fraud to bill for items or services provided by a person who is excluded from Medicare/Medicaid participation, which in turn is cause for the employer to himself be excluded, then an employed pharmacist's job might be lost because there is no work for him if his employer cannot do business with Medicare or Medicaid.

Because they view it as a critical fraud and abuse detection and prevention tool, employee screening, called employee credentialing by some, is a crucial Policy and Procedure for the effectiveness of any Compliance Program in the eyes of the federal and state health care investigation and enforcement authorities.

Those several Compliance Program Guidances published by the federal government thus far (e.g., hospitals, DME providers, physicians, etc.) provide little of the specifics regarding the type of background checks or screening which may be necessary in the government's view. Settlement agreements in several fraud cases are instructive, however. For example, one settlement agreement requires an entity to:

"make reasonable inquiry into the prior conduct of and sanctions imposed on any potential (1) employee, (2) agent, or (3) contractor, including review of the GSA's list of parties excluded from federal programs and DHHS/OIG cumulative sanction report. [XYZ, Inc.] shall not employ, contract with, or otherwise use the services of any entity or individual whom [XYZ] knows or should have known, after reasonable inquiry, has been (a) convicted of a criminal offense related to health care, or (b) listed by a federal agency as debarred, excluded or otherwise ineligible for federal program participation."

That same settlement agreement also provides that if the party employs or contracts with excluded/ineligible persons or entities, then it will owe a fine of $2,000 per day!

Even in the realm of private pay, screening is critical. Several third party contracts a client recently signed contained express clauses prohibiting the pharmacy, its owners or its pharmacists from being excluded from federal or state health programs and prohibiting license/permit suspension, probation or other disciplinary or criminal restrictions against the pharmacy or its owners or pharmacists during the term of the contract. The PBM's reserved the right in any of such events to immediately terminate the contract for that particular program and any other plan of those companies.

The above quoted settlement agreement language alone, makes clear the need for and the importance of a current background check with local or state law enforcement agencies and a review of federal records to determine whether a person has been sanctioned or excluded by federal authorities, in addition to a license check, at the least. Also, a provider should keep a record of having checked and the date on which each check/background search was made.

And it has become even more important that pharmacies have Compliance Programs in light of the OIG's June 11th announcement in the Federal Register of its intention to now develop a special Compliance Guidance for the pharmaceutical industry.