Medicare: Contractors Screen Employees but Extent of Screening Varies
(Correspondence, 06/30/2000, GAO/HEHS-00-135R).

Pursuant to a congressional request, GAO provided information on the use
of employee screening measures by Medicare claims administration and
program safeguard contractors, focusing on the: (1) requirements the
Health Care Financing Administration (HCFA) has placed on Medicare
contractors to conduct employee background checks; (2) steps Medicare
contractors are taking to ensure that employees are trustworthy in
handling Medicare funds and sensitive information; and (3) costs to
Medicare contractors of conducting background checks or using other
employee screening measures.

GAO noted that: (1) HCFA expects its contractors to exercise sound
business judgment when they make hiring decisions; (2) as a result, HCFA
does not specifically require its Medicare claims administration and
program safeguard contractors to conduct background checks or undertake
other employee screening measures; (3) however, HCFA does advise its
claims administration contractors to adopt personnel selection
safeguards, specifically employment verification and applicant
certifications; (4) HCFA also requires its claims administration
contractors to obtain fidelity bonds for certain employees; (5) in
addition, both Medicare claims administration and program safeguard
contractors are required to collect and submit to HCFA conflict of
interest information; (6) the Medicare claims administration and program
safeguard contractors GAO surveyed screen their employees as common
business practice without specific requirements from HCFA to do so; (7)
nearly all the contractors in GAO's sample said that they perform
typical screening measures, such as employment and education
verification, reference checking, and credential validation; (8) most of
the claims administration contractors GAO spoke to also reported that
they perform more extensive screening measures, such as criminal
background checks and drug tests; (9) in contrast, the two program
safeguard contractors GAO surveyed indicated that they do not conduct
criminal background checks or require drug testing unless such
requirements are included in their contracts; (10) both claims
administration and program safeguard contractors reported that they
rarely use less traditional screening measures, such as credit checks
and government debarment and exclusion database reviews; (11) the costs
associated with employee screening vary by the complexity and urgency
associated with each screening measure; (12) however, the Medicare
contractors GAO surveyed could not calculate the total cost of their
employee screening measures; and (13) the fact that employee screening
efforts are conducted and continue to be recognized as a common business
practice within the Medicare contractor community suggests that such
measures are considered worthwhile.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HEHS-00-135R
     TITLE:  Medicare: Contractors Screen Employees but Extent of
	     Screening Varies
      DATE:  06/30/2000
   SUBJECT:  Claims processing
	     Program abuses
	     Fraud
	     Health insurance
	     Internal controls
	     Reporting requirements
	     Contractor personnel
	     Cost analysis
IDENTIFIER:  Medicare Program
	     Medicare Integrity Program

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GAO/HEHS-00-135R

B-285112

June 30, 2000

The Honorable John L. Mica

Chairman, Subcommittee on Criminal Justice,

Drug Policy, and Human Resources

Committee on Government Reform

House of Representatives

Subject: Medicare: Contractors Screen Employees but Extent of Screening
Varies

Dear Mr. Chairman:

In fiscal year 1999, the Health Care Financing Administration's (HCFA)
claims administration contractors managed and processed more than $170
billion in fee-for-service Medicare claims. Several of these contractors
have recently settled cases involving allegations of improper screening,
processing, and payment of Medicare claims as well as falsification of
reports and documentation. Because of your continued concern about the
potential vulnerability of federal funds to fraud, waste, and abuse by
federal contractors, you asked us to examine the use of employee screening
measures by Medicare claims administration and program safeguard
contractors. Specifically, you asked us to identify (1) the requirements
HCFA has placed on Medicare contractors to conduct employee background
checks, (2) the steps Medicare contractors are taking to ensure that
employees are trustworthy in handling Medicare funds and sensitive
information, and (3) the costs to Medicare contractors of conducting
background checks or using other employee screening measures.

To address these questions, we examined the statutes, regulations, guidance,
and contractual language governing the relationship between HCFA and its
Medicare claims administration and program safeguard contractors. We also
spoke to officials from HCFA who are responsible for managing the agency's
Medicare contractors. To obtain information regarding the steps Medicare
contractors are taking to screen their employees, we surveyed staff from a
random sample of ten of the Medicare claims administration contractors. We
also interviewed staff from two of the twelve program safeguard contractors,
choosing two contractors that do not also serve as claims administration
contractors. We performed this work between December 1999 and June 2000 in
accordance with generally accepted government auditing standards.

In brief, HCFA expects its contractors to exercise sound business judgment
when they make hiring decisions. As a result, the agency does not
specifically require its Medicare claims administration and program
safeguard contractors to conduct background checks or undertake other
employee screening measures. However, HCFA does advise its claims
administration contractors to adopt personnel selection safeguards,
specifically employment verification and applicant certifications. The
agency also requires its claims administration contractors to obtain
fidelity bonds for certain employees. In addition, both Medicare claims
administration and program safeguard contractors are required to collect and
submit to HCFA conflict of interest information.

The Medicare claims administration and program safeguard contractors we
surveyed screen their employees as a common business practice without
specific requirements from HCFA to do so. Nearly all the contractors in our
sample said that they perform typical screening measures, such as employment
and education verification, reference checking, and credential validation.
Most of the claims administration contractors we spoke to also reported that
they perform more extensive screening measures, such as criminal background
checks and drug tests. In contrast, the two program safeguard contractors we
surveyed indicated that they do not conduct criminal background checks or
require drug testing unless such requirements are included in their
contracts. Both claims administration and program safeguard contractors
reported that they rarely use less traditional screening measures, such as
credit checks and government debarment and exclusion database reviews.

The costs associated with employee screening vary by the complexity and
urgency associated with each screening measure. However, the Medicare
contractors we surveyed could not calculate the total cost of their employee
screening measures. The fact that employee screening efforts are conducted
and continue to be recognized as a common business practice within the
Medicare contractor community suggests that such measures are considered
worthwhile.

BACKGROUND

The Medicare program is the nation's largest insurer, covering nearly 40
million beneficiaries at a total cost of more than $200 billion. More than
82 percent of the beneficiaries elect to enroll in traditional Medicare,
which pays claims on a fee-for-service basis. In fiscal year 1999,
traditional, fee-for-service Medicare accounted for more than $170 billion
of the program's total expenditures.

HCFA administers its Medicare fee-for-service program with the help of
contractors. Medicare claims administration contractors, called
intermediaries or carriers, depending on the type of claims they process,
pay an average of more than $700 million for about 3.5 million
fee-for-service claims each business day. Intermediaries, selected from
among organizations nominated by provider associations, process and review
claims for institutions such as hospitals and skilled nursing facilities.
Carriers, selected by the Secretary of the Department of Health and Human
Services (HHS), process and review claims submitted by other health care
providers, such as physicians, laboratories, and suppliers of durable
medical equipment.

Medicare claims administration contracts have features that distinguish them
from typical federal contracts. Medicare's authorizing statute, the Social
Security Act, gives the Secretary of HHS contracting authority for Medicare
claims administration contracts outside the Competition in Contracting Act
of 1984 (CICA) and its implementing regulations, known as the Federal
Acquisition Regulation (FAR). For example, CICA permits federal agencies to
enter into cost reimbursement or fixed price contracts. In addition, there
is a presumption of full and open competition under CICA. In contrast, the
Social Security Act sets qualification requirements for Medicare part B
carriers and establishes a process by which organizations are nominated to
be part A intermediaries by associations representing health care providers.
In effect, these exceptions limit the pool of contractor candidates to
insurance companies. The Social Security Act also provides for cost
reimbursement under which contractors are reimbursed for the necessary and
proper costs of carrying out Medicare activities. Finally, the act does not
require that Medicare claims administration contractors be selected
competitively. As a result, HCFA has continued to contract with the same
entities. In fact, many of the claims administration contractors have served
the Medicare program since the program's inception in 1966.

Program safeguard contracts are more in line with the general principles of
CICA and FAR. Under the contracting provisions of the Medicare Integrity
Program, HCFA has greater flexibility in selecting from among competing
eligible entities for the performance of Medicare program safeguard
activities. Program safeguard contractors protect the integrity of the
Medicare program by carrying out activities that include reviewing
providers' claims, auditing providers' cost reports, and performing Medicare
secondary payer reviews to recover erroneous program payments. These
contractors can be paid under a variety of pricing arrangements, including
cost reimbursement, firm fixed price, and time and materials. In addition,
program safeguard contracts are awarded competitively; however, HCFA can
renew these contracts indefinitely without competition.

HCFA REQUIRES CONTRACTORS

TO IMPLEMENT SAFEGUARDS

OTHER THAN BACKGROUND CHECKS

According to HCFA officials responsible for managing the agency's
contractors, HCFA expects its Medicare claims administration and program
safeguard contractors to be responsible in their hiring practices and does
not specifically require them to conduct background checks or use other
employee screening measures. However, in the manuals HCFA provides to its
claims administration contractors, HCFA advises them to implement personnel
selection safeguards, such as employment verification and applicant
certifications. These manuals also provide guidance to claims administration
contractors regarding the requirements HCFA includes in their contracts
concerning (1) the retention of a fidelity bond indemnifying Medicare funds
from loss and (2) the collection and submission of conflict of interest
information. Further, in the contracts HCFA negotiates with its program
safeguard contractors, the agency includes a requirement for the disclosure
and mitigation of conflicts of interest.

The manuals HCFA publishes to provide guidance to its claims administration
contractors suggest that they implement minimum safeguards regarding
personnel selection. These safeguards include obtaining authorization to
verify the past employment record of prospective employees. By obtaining
such authorization and verifying an applicant's employment history, claims
administration contractors will be able to confirm employment dates and job
descriptions and may be better able to identify discrepancies on an
application before extending an offer of employment. The HCFA manuals also
refer to applicant certifications, recommending that "the employment
application . . . provide for the applicant's signed acknowledgement that
falsification of his application could be cause for dismissal at any time
after employment."

Contractors With Access to Medicare

Funds Must Indemnify Losses

Because of claims administration contractors' direct access to Medicare
funds as claims processors and payers, HCFA requires them to obtain fidelity
bonds. Fidelity bonds guarantee the return of Medicare funds taken by
employee embezzlement, theft, and other misdeeds. HCFA requires its claims
administration contractors to have bonds covering, at a minimum, employees
who certify claims for payment as well as employees who disburse funds in
payment of claims. When underwriting fidelity bond coverage, issuing
institutions often require information from applicants, including
information concerning employee screening measures and internal controls. As
a result, HCFA's fidelity bond requirement for its claims administration
contractors may indirectly impose a requirement on these contractors to
engage in some degree of employee screening.

HCFA Requires Contractors to

Identify Conflicts of Interest

In its contracts, HCFA requires both its Medicare claims administration and
program safeguard contractors to submit data detailing any organizational
and employee conflicts of interest. This requirement ensures that HCFA and
its Medicare contractors are aware of any conflicts that may compromise a
contractor's integrity. HCFA's conflict of interest requirement works to
prevent Medicare contractors and their employees from using their positions
to further their private business interests and from accepting gifts or
gratuities that may bias the award of Medicare subcontracts.

Using a questionnaire, claims administration contractors are required by
contract to collect conflict of interest information from their employees.
The information collected must include (1) the names of officers and certain
employees who have received gifts, payment, or entertainment (other than
what may be considered a reasonable common business courtesy) from people or
companies doing business with the contractor involving Medicare funds and
(2) the names of officers and certain employees who have outside employment
in organizations receiving Medicare funds. This information must be compiled
into a report, which the claims administration contractors submit annually
to their HCFA Regional Office.

HCFA also includes a detailed conflict of interest requirement in the
contracts that it negotiates with its program safeguard contractors. This
requirement calls for the disclosure and mitigation of actual, apparent, and
potential conflicts of interest that may negatively affect the perception of
the integrity of the work the contractor performs. HCFA requires its program
safeguard contractors to complete an Organizational Conflict of Interest
Certificate when a proposal is first submitted. This document is later
incorporated into the program safeguard contract as an attachment. The
certificate must include a description of all the program safeguard
contractor's business and contractual relationships or activities that could
be considered conflicts as well as a plan to mitigate such conflicts. The
contractor must also have a plan in place to monitor its compliance and the
compliance of its subcontractors. Additionally, HCFA requires its program
safeguard contractors to certify that all work performed under their
contracts is free of unresolved conflicts of interest.

MEDICARE CONTRACTORS SCREEN

THEIR EMPLOYEES, WITH SOME

CONDUCTING EXTENSIVE SCREENING

Our survey of ten Medicare claims administration contractors and two program
safeguard contractors suggests that Medicare contractors perform some form
of employee screening as a common business practice, although HCFA does not
specifically require this. Nearly all our survey respondents said that they
use screening measures typical of the hiring process, such as employment and
education verification, reference checking, and credential validation. Most
of the claims administration contractors we surveyed reported that they
routinely perform additional screening measures, such as criminal background
checks and drug tests. The two program safeguard contractors we surveyed
were less vigorous when it came to employee screening, often indicating that
criminal background checks or drug tests would be conducted only if required
by contract. Both claims administration and program safeguard contractors
reported that they rarely use less traditional screening measures such as
credit checks and government debarment database reviews.

Traditional Employee Screening

Measures Are Widely Used

Generally, employers carry out a variety of screening measures to ensure
that applicants meet the necessary qualifications for a given job.
Confirming an applicant's past employment history and verifying an
applicant's academic record are common checks used to assist an employer in
making an informed hiring decision. Reference checking is another screening
measure employers often use to obtain information about prospective
employees. It is also common for employers to validate a job applicant's
credentials or licenses to ensure that the applicant satisfies the required
job qualifications.

All our survey respondents, including both claims administration and program
safeguard contractors, told us that they verify an applicant's past
employment, while eight of the eleven contractors that responded indicated
that they check an applicant's education. All eleven of the claims
administration and program safeguard contractors that responded said they
check an applicant's references, although one contractor indicated that it
limits such checks to leadership positions. In addition, nearly all our
survey respondents, including both claims administration and program
safeguard contractors, reported that they validate the credentials of job
applicants.

Claims Administration Contractors

Conduct Additional Screening

Criminal background checks and drug testing are additional tools employers
use to investigate the background of prospective employees. Because they are
more intrusive, these tools are often limited to particular types of
positions to protect job applicants and current employees from
discrimination and abuse. A little more than half of the claims
administration contractors we surveyed said that they require criminal
background checks and drug testing for all employees. The program safeguard
contractors we surveyed did not routinely conduct either screening measure.

Private employers are generally not given access to law enforcement criminal
databases, although these employers can access criminal conviction records.
Such records must often be obtained county by county, requiring a trip to
each county courthouse and a search of the records each court maintains.
Although some states have statewide databases for public use, they are
commonly recognized to be inaccurate and incomplete, serving merely as
depositories for the counties that choose to participate.

Despite these limitations, most of the claims administration contractors we
surveyed reported that they conduct some kind of criminal background check
as a regular part of their hiring process. Some of these claims
administration contractors indicated that they limit the use of criminal
background checks, checking only certain positions or conducting checks only
if applicants respond on an application or an affidavit that they have been
convicted of a crime. As insurance companies, Medicare claims administration
contractors may be inquiring about past criminal convictions and conducting
criminal background checks to comply with the insurance fraud provisions of
the Violent Crime Control and Law Enforcement Act of 1994 (VCCLEA). Under
this law, insurance companies can be fined or their officers can be
imprisoned if they employ someone who has been convicted of a felony that
involves dishonesty or a breach of trust. Although HCFA does not require
criminal background checks, Medicare can indirectly benefit from the VCCLEA
provisions and its claims administration contractors' compliance with them.
This occurs when contractors conduct criminal background checks as a
standard practice across the company, checking employees who work on the
private side of their business as well as those working on Medicare claims
processing.

Preemployment drug testing is yet another screening measure employers use to
help inform their hiring decisions and avoid potential problems, such as
workplace violence, accidents, absenteeism, poor productivity, and high
health insurance claims. Many states have enacted laws permitting particular
kinds of drug testing, job applicant testing being the most common. Other
drug testing may include testing based on reasonable suspicion, fitness for
duty, completion of a drug rehabilitation program, and on-the-job injuries
or accidents. Some state laws also permit testing employees randomly.
Although some states actually require employers to conduct drug tests for
specific purposes, most states that have enacted drug testing laws give
employers the option of implementing testing programs that meet certain
conditions. Some of these conditions include the collection and testing of
samples by approved laboratories, the requirement that test results be kept
confidential, and the confirmation or verification of positive test results.
Many states also require employers to notify employees and applicants of
their drug testing policy by giving them a written statement that describes
the policy in detail. (See enclosures I and II for additional information
concerning state laws related to drug testing.)

Six of the ten claims administration contractors surveyed reported that they
require all applicants and employees to be tested for illegal drugs, while
an additional three are considering implementing a drug testing program.
Both program safeguard contractors indicated that they do not require
preemployment drug testing. One of these contractors added that it notifies
its employees that random drug testing can be implemented at any time.
According to our survey respondents, very few applicants or employees have
tested positive for drugs. However, most of the contractors we surveyed do
not track the actual number of individuals tested or the results of those
tests and, therefore, could not provide us with data. One claims
administration contractor did have such data, reporting three cases of
positive test results of the 157 tests conducted in 1999.

The Use of Other Employee Screening

Measures Is Less Prevalent

Credit reports and government debarment and exclusion databases are also
sources of information regarding prospective employees. Credit reports, like
criminal conviction records, are sensitive and can be a discriminatory basis
for hiring decisions if the inquiry is not related to the required job
qualifications. Government debarment and exclusion databases assist federal
agencies and their contractors in identifying individuals or entities that
have been debarred from contracting with the federal government. In
addition, claims administration contractors should ensure that job
applicants have not been excluded from the Medicare or Medicaid programs
because, if they fail to do so, they risk exposing themselves to liability
for civil monetary penalties.

Only four of the ten claims administration contractors we surveyed review an
applicant's credit report when making hiring decisions. According to our
survey respondents, this review is often limited to upper level management
positions or positions in which an employee may have access to funds. Only
two of the four claims administration contractors that conduct credit checks
indicated that such checks are run on all job applicants. Neither program
safeguard contractor reported that it checks an applicant's credit report.
Only five of the eleven claims administration and program safeguard
contractors that responded reported that they check government debarment and
exclusion databases.

THE COSTS OF SCREENING

MEASURES VARY BY COMPLEXITY

AND RESPONSE TIME

According to many of the contractors we surveyed, the complexity and urgency
associated with a particular screening measure dictate its cost.
Consequently, expedited results and comprehensive examinations increase the
price of criminal background checks and drug tests. Because the Medicare
contractors we surveyed did not collect data concerning their use of
employee screening measures, we could not estimate the overall cost to the
Medicare program if these or other screening measures were required.

Our survey respondents indicated that the cost of a criminal background
check could range between $10 and $125, with the checks that involve
multicounty reviews or prompt responses being the most expensive. The price
range for drug tests was identified as being between $30 and $90, with the
price of retests falling on the high end of this range. Just as with
criminal background checks, more comprehensive drug screens as well as
expedited test results would increase the price of the drug test.

The Medicare claims administration and program safeguard contractors we
surveyed were not able to calculate the total cost of their employee
screening measures. This was partly because of the contractors' lack of data
tracking the number and use of criminal background checks and drug tests as
well as the contractors' inability to isolate the costs of such screening
measures from their overall human resources budgets. The fact that employee
screening efforts are conducted and continue to be recognized as a common
business practice suggests that Medicare contractors consider such measures
to be worthwhile.

AGENCY COMMENTS

In commenting on this correspondence, HCFA stressed its continuing
commitment to protect the Medicare trust fund from fraudulent and abusive
practices and activities. The agency expressed an intention to continue to
evaluate the effectiveness of its mechanisms to ensure that only competent
and trustworthy persons are selected to work for its Medicare contractors.
HCFA agreed that it does not require specific criminal background checks and
drug tests in its program safeguard contracts. However, HCFA said it used
various tools, such as the debarred, suspended, and sanctions lists and the
Fraud Investigation Database, to screen key contractor personnel. HCFA also
said it will review its program safeguard contract provisions to ensure that
employees' backgrounds are adequately investigated. HCFA provided technical
comments as well that we incorporated where appropriate.

In its comments, HCFA expressed a desire to obtain access to the Federal
Bureau of Investigation's National Crime Information Center, a nationwide
criminal justice information system that the agency could use to run
criminal background checks, not only on its contractor personnel but also
possibly on providers and their employees. According to HCFA, obtaining this
access would require legislative change, but it would provide the agency
with another tool to ensure that the agency is doing business with qualified
and credible entities. Because a review of this proposal was not within the
scope of our work, it was not addressed in this correspondence.

- - - - -

We are sending copies of this report to the Honorable Nancy-Ann Min DeParle,
Administrator of HCFA, and other interested congressional committees. We
will also make copies available to others on request.

Please contact me at (312) 220-7600 if you or your staff have any questions
about this letter. Major contributors to this correspondence were Sheila
Avruch and Erin Kuhls.

Sincerely yours,

Leslie G. Aronovitz

Associate Director, Health Financing and

Public Health Issues

Enc. - 2

DRUG TESTS THE 50 STATES PERMIT OR REQUIRE

                                     Fitness Completion of  On-the-job
 State         Job        Reasonable for     rehabilitation injury or     Random
               applicant  suspicion
                                     duty    program
                                                            post-accident
 Alabama       Ra         R          R       R              R             X
 Alaska        X          X          X                      X             X
 Arizonab      X          X          X                      X             X
 Arkansas      Ra         R          R       R              R             X
 Californiac,
 d, e          Xa         X          X
 Coloradoc     Xa
 Connecticut   X          X                  X                            Xf
 Delawarec
 District of
 Columbiac
 Floridab, e   R          R          R       R                            X
 Georgiae      R          R          R       R              R             X
 Hawaiig       X
 Idahog        X          X          X       X              X             X
 Illinoisc, e  X                             X
 Indianac      X          X          X       X              X             X
 Iowae         Xa         X                  X              X             X
 Kansasc, e    X          X          X       X              X             X
 Kentuckyc
 Louisianae    X          X                  X              X
 Maineg        Xa         X                  X                            Xf
 Marylande     X
 MassachusettscXh                                                         Xh
 Michiganc
 Minnesotag    Xa, b      X          X       X              X             Xf
 Mississippig  Xa         X          X       X                            X
 Missouric
 Montanai      X          X                  X              X             Xb
 Nebraska                 X
 Nevadac, e
 New Hampshirec
 New Jerseyc   X
 New Mexicoc, e
 New Yorkc     X          X          X       X              X             X
 North
 Carolinag     X
 North Dakotac
 Ohiob, e      R          R                  R              R             Rj
 Oklahomag     Xa         X          X       X              X             X
 Oregonc, e    X
 Pennsylvaniac
 Rhode Islandg Xa         X
 South
 Carolinac, e                                                             R
 South Dakotac,
 e
 Tennesseeg, e Ra         R          R       R              R             X
 Texasc
 Utahb, e      Xa         X          R                      X
 Vermont       Xk         X                  X
 Virginiac
 Washingtone   Ra         X                  R              R             X
 West Virginiac           X          X
 Wisconsinc, e
 Wyomingc

Note: X = permitted.

R = required in order to qualify for a workers' compensation insurance

premium discount.

aAn employer must extend an offer of employment before requiring an
applicant to submit to drug testing.

bA drug testing policy must be applied equally to all employee
classifications.

cNo law addresses applicant or employee drug testing by private employers
specifically. This information was derived from related state statutes and
case law.

dCalifornia case law indicates that there are no California statutes that
prohibit, or place general limitations on, employer-mandated drug testing.
Loder v. City of Glendale, 927 P.2d 1200, 1211 (1997).

eState law refers to a drug testing policy or program for state and public
employees, applicants for state and public positions, and state contractors.

fState law limits the use of random or arbitrary testing.

gOnly drug test policies that meet all the requirements of state law are
permissible (unless the testing is conducted pursuant to federal drug
testing regulation).

hMassachusetts case law suggests that preemployment, "for cause," and random
testing are permissible. In addition, Massachusetts case law balances the
general interest of businesses to protect the safety of their employees with
the privacy interests of employees subject to random drug testing.

iState law regarding drug testing refers only to employees engaged in the
performance, supervision, or management of work in a hazardous work
environment, security position, position affecting public safety, or
fiduciary position for an employer.

jThis kind of testing is required only for Level 2 and Level 3 testing
programs.

kApplicant drug testing is permissible only if all the following conditions
are met: (1) the applicant is extended a conditional offer of employment,
(2) the applicant receives notice of the drug test, (3) the drug test is
part of a physical exam, and (4) the test is administered consistent with
state law requirements.

Source: The information in this table was compiled by searching a commercial
electronic legal database and is limited by the search terms. In a few
cases, we contacted the state agencies responsible for labor and employment
issues to confirm the information, or lack of information, we discovered
through the electronic search.

FEATURES OF DRUG TESTING PROGRAMS

STATES FIND ACCEPTABLE

                                                                       Results
                                                                       and
                       Collection                             Explain  refusal            Workers'
                       and testing   Confirm                  or       as basis  Employer compensation
 State         Written procedures by positive  Confidentialityrefute   for       pays for insurance
               policy                                                  decision
                       approved      results                  test               testing  premium
                       laboratories                           results  to                 discounts
                                                                       dismiss
                                                                       or not to
                                                                       hire
 Alabamaa, b, cX       X             X         X              X                  X        X
 Alaskac       X       X             X         X              X        X         X
 Arizonad      X       X             X         X              X        X         X
 Arkansas      X       X             X         X              X        X         X        X
 Californiae                                   X              X        X
 Coloradoe
 Connecticut           X             X         X                       X
 Delawaree
 District of
 Columbiae
 Florida       X       X             X         X              X        X         X        X
 Georgiaa, b, cX       X             X         X              X                  X        X
 Hawaii        X       X             Xf        X                                 X
 Idaho         X       X             X         X              X        X         X        X
 Illinoise     X
 Indianae      X
 Iowaa, b, c   X       X             X         X              X        g         X
 Kansase               X                       X
 Kentuckye
 Louisiana             X             Xh        X              X        X         Xh
 Mainea, i     X       X             X         X              X        g         X
 Maryland      X       X             X         X              X
 Massachusettse        Xj
 Michigane
 Minnesota     X       X             X         X              X        g         X
 Mississippia,
 b, c          X       X             X         X              X        X         X        X
 Missourie
 Montana       X       X             X         X              X        k         X
 Nebraska              X             X         X                       X
 Nevadae
 New Hampshiree
 New Jerseye   X                                                       X         X
 New Mexicoe
 New Yorke                                     X                       l
 North Carolina        X             X                        X
 North Dakotae                                                                   X
 Ohioa, b, c, mX       X             X         X                                          Xn
 Oklahomaa     X       X             X         X              X        X         X
 Oregone               X             X
 Pennsylvaniae
 Rhode Island  X       X             X         X              X        g         X
 South CarolinaX       X                       X                                          X
 South Dakotae
 Tennessee     X       X             X         X              X        X         X        X
 Texase        X
 Utah          X       X             X         X                       X         X
 Vermonta      X       X             X         X              X        g
 Virginiae             X             X                                                    Xo
 Washingtona,
 b, c          X       X             X         X              X        g         X        X
 West Virginiae
 Wisconsine
 Wyominge

Note: X = provision in state law.

aAn employee assistance program or information detailing employee assistance
providers or resources must be maintained.

bEmployee substance abuse education is required.

cSupervisor training on detecting employee substance abuse, documenting and
collaborating signs of employee substance abuse, and referring abusing
employees to proper treatment providers is required.

dCompliance with state law regarding drug testing is voluntary.

eNo law addresses employee or applicant drug testing by private employers
specifically. This information was derived from related statutes and case
law.

fFailure to adopt or adhere to the procedures identified invalidates the
test result.

gThe law says that an employer shall not take adverse employment action so
long as the employee complies with the requirements of rehabilitation and
successfully completes such rehabilitation.

hAn employer may choose not to confirm a positive test result of a
preemployment drug screen test and offer the job applicant the opportunity
to pay for confirmation of that initial test.

iThe Department of Labor must approve the employer's substance abuse policy.

jMassachusetts case law favors drug testing procedures that ensure accuracy
and do not unreasonably interfere with an employee's privacy.

kNo adverse action, including follow-up testing, may be taken by the
employer if the employee presents a reasonable explanation or medical
opinion indicating that the original test results were not caused by the
illegal use of controlled substances.

lBefore taking adverse personnel actions, employers are encouraged to use
employee leave of absence and required attendance at a rehabilitation
program along with a last chance agreement requiring acceptable performance
and attendance upon the employee's return.

mIn addition to the employee assistance program, Level 2 drug-free workplace
program employers are required to have established a referral relationship
with an employee assistance services provider, and Level 3 drug-free
workplace program employers are required to offer health care coverage to
employees, which includes chemical dependency counseling and treatment
services.

nEligibility for the discount is limited to state fund employers.

oTo be eligible for workers' compensation insurance premium discounts, an
employer must institute a drug-free workplace program that satisfies the
criteria established by the insurer.

Source: The information in this table was compiled by searching a commercial
electronic legal database and is limited by the search terms. In a few
cases, we contacted the state agencies responsible for labor and employment
issues to confirm the information, or lack of information, we discovered
through the electronic search.

(201020)
  
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