States must start screening Medicaid providers, CMS says

States have until the end of July to start screening high-risk Medicaid and Children's Health Insurance Program providers, according to new guidance by the Centers for Medicare & Medicaid Services. These screenings will be fingerprint-based criminal background checks, and they must be completed by June 1, 2016.

The implementation of the background checks would occur after a state Medicaid agency has been identified as “high” risk, or susceptible to improper payments. Likewise, if a provider is labeled as high risk by Medicare, the state Medicaid agency must also consider it high risk.

Once determined as high risk by the state agency, the provider is required to consent to a criminal background check, which includes fingerprinting. The requirement to submit fingerprints applies to the high risk provider, as well as anyone with a 5% or more direct or indirect ownership interest in the provider, according to the guidance, which was issued Monday.

In order to identify the different levels of risk, the Affordable Care Act published a final rule in 2011 stating that Medicaid agencies must establish risk levels for providers who had an increased risk of fraud. However, the rule did not specify the criteria of each risk, leaving the states responsible to determine how one is identified.

Medicaid agencies will determine the form and manner of submission for the fingerprints, and may require providers to cover the costs of both the application and fingerprinting fees. CMS released this rule as Congress has recently focused on preventing Medicaid fraud.