Auditing, Managing Denials Is Important to Good A/R Hygiene
Auditing

The Importance of Statistical Significance

Auditing for Compliance 

Written by Joanne Byron, LPN, BS, CCA, CIFHA, CHA, COCAS, CORCM, CHCO, HPOC, OHCC, CMDP, ICDCT-CM/PCS 

Information provided below is a basic overview of audit sampling used when Auditing for Compliance, specifically chart or billing audits. It is not intended as being comprehensive, legal, or consulting advice.

Introduction

A statistically significant chart audit in healthcare is a structured, randomized review of medical records designed to project findings onto an entire population of claims (the "universe") with measurable reliability.

The Office of Inspector General (OIG) states these audits be random, unbiased, and sufficiently large to be representative of the population. A common misconception is that a fixed percentage (e.g., 10%) of charts is always sufficient. The OIG does not set a fixed percentage. The sample size must be large enough to provide a reliable estimate of the universe's overpayment amount. A statistically significant chart audit, compliant with OIG guidelines, is a scientifically rigorous process.

In healthcare, audit sampling is crucial when auditing the entire population (100% of claims) is impractical due to high volume. A "statistically valid" sample differs from a simple "probe" or arbitrary sample (e.g., 10 charts) because it allows for the projection of error rates onto the larger population. A statistically valid sample is necessary for:

  • Provider Self-Disclosure Protocol: Submitting self-audits to the OIG.
  • Corporate Integrity Agreements (CIAs): Mandatory compliance for providers under investigation.
  • External Audits: Rebutting audits from Unified Program Integrity Contractors (UPICs) or Medicare Administrative Contractors (MACs).

Even your routine audits should be grounded as statistically significant, which is fundamental when auditing a healthcare organization for compliance. Taking this approach transforms subjective chart reviews into defensible, objective, and scalable evidence that can be used to prove compliance. government agencies.

Statistical significance provides the necessary confidence, typically 90% or higher, that findings from a small sample accurately represent the entire population, minimizing the risk of false positives. Experts often check if the auditor used an appropriate one-sided 90% confidence level, which is a common standard in these audits.

The confidence level defines how often the true population value (e.g., total overpayment) falls within the range calculated from the sample. The precision (Margin of Error) defines the range of accuracy around the point estimate (e.g., +/- $10,000). The trade-off is a higher confidence level (e.g., 99%) which usually requires a wider range of precision, or a significantly higher sample size to maintain precision.

Legal and Regulatory Defensibility

  • Mandatory for Extrapolation - Government contractors, such as Recovery Audit Contractors (RACs), Unified Program Integrity Contractors (UPICs) and Department of Health and Human Services (HHS) Office of Inspector General (OIG) Office of Audit Services, require statistical sampling for projecting overpayment amounts. If an audit lacks statistical significance, it cannot be legally extrapolated to the total claim population.
  • Rebuttal of Audit Findings - Organizations can use statistical expert testimony to challenge improper sampling methods used by auditors, as flawed sampling often leads to inflated repayment demands. Core areas challenged by experts are:
    • Improper Audit Universe/Frame: Auditors may fail to define the correct population of claims, including irrelevant claims or excluding relevant, paid-in-full claims that would balance the error rate.
    • Lack of Randomization/Bias: Experts look for patterns showing the sample was not truly random, such as a sample mean paid amount dramatically higher than the universe mean, indicating a biased selection.
    • Failure to Account for Underpayments: A common, frequently successfully challenged error is the failure of auditors to include underpayments, which skews the audit and "significantly" overstates the overpayment.
    • Imprecise Extrapolation: Even if a sample is random, it may be too small or produce a wide confidence interval (high imprecision), making the projection highly unreliable.
    • Failure to Replicate: Government auditors often fail to document their work sufficiently, making it impossible to reproduce the sample or calculations.
  • Lower Bound Calculation - Statistical methods (like Rat-Stats) calculate the lower limit of a 90% confidence interval, ensuring that recoupment amounts are statistically defensible and conservative.
    • OIG RAT-STATS is a free statistical software package created by the Office of Inspector General (OIG) that provides a "rock-solid," defensible foundation for auditing healthcare claims. It is used to generate random samples, determine sample sizes, and extrapolate error rates to entire populations. It is widely used by auditors, and often by providers in corporate integrity agreements.
    • While RAT-STATS is user-friendly, it requires a thorough understanding of statistics and the software itself to use it properly and to challenge, if necessary, the findings of an audit.

Ensuring Accuracy in Large Datasets

Statistical tools calculate the minimum required sample size (often at least 30 but higher depending on variance) to ensure that the audit has enough power to detect errors without wasting resources on excessive, manual review.

It is important to mitigate potential bias. Statistical sampling prevents "judgmental sampling," where auditors might only select high-dollar or potentially erroneous claims, which would falsely inflate the error rate. To achieve this, we need to address the confidence interval.

Key Components of an Audit Confidence Interval

We strive to reduce "false positives." A 95% confidence level indicates that there is only a 5% chance that observed deviations in documentation or billing were due to random chance, rather than a systematic compliance failure. Let’s dive a little deeper into the confidence level and margins of error.

  • A confidence level (e.g., 95%) is the reliability of the sampling method. A 95% confidence level means that if the audit were repeated 100 times, 95 of the resulting intervals would contain the true population value. Applying a 90% confidence level is a common requirement for CMS contractors to use as a basis for extrapolation.
  • Precision refers to the margin of error or the width of the interval. A tighter (narrower) interval means more precise results, often requiring a larger sample size. Larger samples shrink the confidence interval, providing higher precision. A higher confidence level (e.g., 99% instead of 95%) makes the interval wider (less precise) because you are trying to be more certain.
  • Upper/Lower Limits are the boundaries of the interval, providing the "best-case" and "worst-case" scenario for errors. In healthcare audits, particularly those involving billing compliance, overpayment extrapolation, and quality of care, upper and lower limits define the range of plausible values for a population parameter (such as total overpayment) with a set level of confidence (typically 90% or 95%).
    • Lower Limit (LL): The lowest expected value of the confidence interval. In many CMS audits, the lower limit of a one-sided 90% confidence interval is used to determine the minimum amount of overpayment to be recouped.
    • Upper Limit (UL): The highest expected value of the confidence interval. It represents the worst-case scenario for error rates.
    • Confidence Interval (CI): The full range between the Lower and Upper Limit. A narrower interval indicates higher precision.

Key Statistical Concepts for Auditors

Confidence Levels: The percentage of times (e.g., 90% or 95%) that the true value of an error is expected to fall within the calculated confidence interval.

Null Hypothesis (H0): The assumption that there is no meaningful difference between the audited sample and the expected (compliant) standard.

P-Value: The probability that results were produced by chance. A low p-value (typically $p<0.05$) allows the auditor to reject the null hypothesis and conclude a real, significant error pattern exists.

Randomized & Unbiased: Every claim in the universe must have an equal chance of selection.

Representative: The sample must reflect the characteristics of the entire population.

Standard Deviation: Measures the variation in the data; higher variance in claims requires a larger sample size to achieve statistical significance.

Statistically Valid & Replicable: Another auditor using the same methodology should arrive at similar results.

Universe Definition: The specific time period, the provider, and types of claims being audited (CPT code range 99212-99215 from Jan-Dec 2025).

Limitations to Consider

  • Not Always Meaningful: A statistically significant result (due to a large sample size) does not always mean the error is clinically or financially important.
  • Small Populations: When auditing small departments, high variation may lead to non-significant results, even if errors are present.
  • Requires Expertise: Misapplication of statistical formulas can create misleading conclusions; statistical literacy is crucial for compliance officers.

General Rules of Thumb - When full statistical calculation is not possible, industry guidelines offer the following benchmarks:

  • Small Populations (<100): Audit all records (100% sampling).
  • Large Populations: 10% of the total eligible charts, up to a maximum of 1000, is often sufficient.
  • Rapid Cycle Sampling: Small, consecutive samples (e.g., 5-10 charts) can be used to track changes over time in quality improvement projects and for monitoring purposes.

Conclusion

It’s all about measuring the effectiveness of your compliance program

The effectiveness of the compliance program must identify high-risk patterns. Organizations use statistical significance to track if voluntary changes to coding or billing procedures resulted in significant, measurable reductions in error rates. Taking this approach allows the organization to determine if corrective actions, such as training, efforts to correct Electronic Health Record systems, conducting pre-billing targeted audits, etc. are making the expected improvements required for compliance.

Statistical techniques allow internal auditors to identify trends in data, such as high-frequency billing of complex codes, which indicate potential risk for future external audits.

About the Author

Joanne Byron, BS, LPN, CCA, CHA, CHCO, CHBS, CHCM, CIFHA, CMDP, COCAS, CORCM, OHCC, ICDCT-CM/PCS is an educator with the American Institute of Healthcare Compliance, a Licensing/Certification non-profit partner with CMS. She shares her experience of over 40 years as a nurse, consultant, auditor, and investigator in the healthcare field.

References

AIHC

CDC

National Library of Medicine

Strategic Management Services

Copyright © 2026 American Institute of Healthcare Compliance All Rights Reserved

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Auditing, Managing Denials Is Important to Good A/R Hygiene
Auditing

You Play a Vital Role in Protecting the Integrity of the U.S. Healthcare System

Written by: Joanne Byron, BS, LPN, CCA, CHA, CHCO, CHBS, CHCM, CIFHA, CMDP, COCAS, CORCM, OHCC, ICDCT-CM/PCS




The U.S. health care system relies heavily on third-party payers to pay the majority of medical bills on behalf of patients. Health care insurance fraud is a pressing problem, causing substantial and increasing costs in medical insurance programs. To combat fraud and abuse, all levels within a medical practice, hospital or health care organization must know how to protect the organization from engaging in abusive practices and violations of civil or criminal laws.


If you are a health care provider, remember that payers trust you to provide medically necessary, cost-effective, quality care. You exert significant influence over what services your patients get. You control the documentation describing services they receive, and your documentation serves as the basis for claims you submit. Generally, the health care system pays claims based solely on your representations in the claims documents.


When the federal government covers items or services rendered to Medicare and Medicaid beneficiaries, the federal fraud and abuse laws apply. Many similar state fraud and abuse laws apply to your provision of care under state-financed programs and to private-pay patients. The most important federal fraud and abuse laws that apply to healthcare are the:

  1. False Claims Act (FCA);
  2. Anti-Kickback Statute (AKS);
  3. Physician Self-Referral Law (Stark Law);
  4. United States Criminal Code
  5. Exclusion Authorities; and
  6. Civil Monetary Penalties Law (CMPL).

Implementing a successful compliance program not only assists in protecting your organization but individuals within the organization. It is crucial for providers, coders and billers to understand these laws not only because following them is the right thing to do but also because violating them could result in criminal penalties, civil fines, exclusion from the federal health care programs or loss of your medical license from your state medical board.


Government programs, such as the Centers for Medicare & Medicaid Services (CMS), find the investment in their audit and monitoring programs are effective. CMS announced in the fall of 2021 that their aggressive corrective actions led to an estimated $20.72 billion reduction of Medicare Fee-for-Service (FFS) improper payments over seven years.


When you submit a claim for services provided to a Medicare beneficiary, you are filing a bill with the federal government and certifying you earned the payment requested and complied with the billing requirements. If you knew or should have known the submitted claim was false, then the attempt to collect payment is illegal.


When an organization fails to provide training and education to deter and detect fraud and/or abuse, it is likely to be detected by an outside investigative source via action such as:

  • Focused audit by the payer due to detection of suspect billing patterns when compared to your peers;
  • Routine audits conducted by the payer, such as Medicare’s Comprehensive Error Rate Testing (CERT); and
  • Internal whistleblower or qui tam action.

Internal auditing and monitoring programs are essential to keeping medical records and billing accurate. However, a routine internal billing and documentation review could turn into a more focused internal investigation. During that investigation, is it possible that an aberrant pattern of inappropriate billing is revealed? Do you know how to proceed if this happens?


First, remember that anyone can commit health care fraud. Fraud schemes range from solo ventures to widespread activities by an institution or group. Your organization should have a designated Compliance Officer. Audit professionals should have the authority to report potential fraud and abuse situations directly to the Compliance Officer for further investigation and resolution.


Problem areas brought to the attention of the Compliance Officer should also be included in corrective action training programs to avoid the continuation of the situation. One of the most important aspects of a compliance program is training and education at all levels of the organization.


Now, let’s talk more about qui tam action. There are five potential areas in which qui tam cases arise related to Medicare or Medicaid claims and the False Claims Act (“FCA”). Qui tam claims involving Medicaid/Medicare healthcare vary, depending on the level of care needed and provided. Categories often involve allegations of total neglect or no services, worthless services, inadequate and inferior services and products, and aggressive patient treatment. Other areas of fraud involve misrepresentation of credentials, upcoding of services, unbundling of services, and misrepresentation of patient data or populations.


Words of Advice


Maintain accurate and complete medical records and documentation of the services you provide.

  • Ensure your documentation supports the claims you submit for payment. Good documentation practices help to ensure your patients get appropriate care and allow other providers to rely on your records for patients’ medical histories.

Anytime a health care business offers you something for free or below fair market value, ask yourself, “Why?”

  • Remember, when a vendor or consultant provides coding and billing advice, the provider filing the claim is responsible for the accuracy of that claim. Be suspicious when you are told that a huge enhancement of revenue will be realized if you bill like this . . .

Get expert advice from a qualified source before investing or getting into a joint venture.

  • Some physicians who invest in health care business ventures with outside parties, such as imaging centers, laboratories, equipment vendors, or physical therapy clinics, may refer more patients for the services provided by those parties than physicians who do not invest. These business relationships may improperly influence or distort physician decision-making and result in the improper steering of patients to a therapy or service where a physician has a financial interest. Arrangements could be viewed as illegal.

Avoid illegal incentives to join a hospital’s community.

  • A hospital may pay you a fair market-value salary as an employee or pay you fair market value for specific services you render to the hospital as an independent contractor. However, the hospital may not offer you money, provide you free or below-market rent for your medical office, or engage in similar activities designed to influence your referral decisions.
  • Admit your patients to the hospital best suited to care for their medical conditions or to the hospital your patients select based on their preference or insurance coverage.

Don’t sell free product samples.

  • Many drug/biologic companies provide free product samples to physicians. It is legal to give these samples to your patients free of charge, but it is illegal to sell the samples.
  • The federal government has prosecuted physicians for billing Medicare for free samples.
  • If you choose to accept free samples, you need reliable systems in place to safely store the samples and ensure samples remain separate from your commercial stock.

Relationships with the pharmaceutical and medical device companies

  • As a practicing physician, you may have opportunities to work as a consultant or promotional speaker for the drug or device industry. For every financial relationship offered to you, evaluate the link between the services you can provide and the compensation you will get. Test the appropriateness of any proposed relationship by asking yourself the following questions and when in doubt, get legal advice: o Does the company really need your specific expertise or input? o Does the company’s monetary compensation to you represent a fair, appropriate, and commercially reasonable exchange for your services? o Is it possible the company is paying for your loyalty so you prescribe its drugs or use its devices?

o  Does the company really need your specific expertise or input?

o  Does the company’s monetary compensation to you represent a fair, appropriate, and commercially reasonable exchange for your services?

o  Is it possible the company is paying for your loyalty so you prescribe its drugs or use its devices?


Educate C-Suite and Compliance Officials in Your Company


An executive, top-down approach is required for a successful compliance program. The following seven components provide a solid basis for a compliance program:


1. Conduct internal monitoring and auditing

2. Implement compliance and practice standards

3. Designate a compliance officer or contact

4. Conduct appropriate training and education

5. Respond appropriately to detected offenses and develop corrective action

6. Develop open lines of communication with employees

7. Enforce disciplinary standards through well-publicized guidelines


Establishing and following a compliance program helps health care providers avoid fraudulent activities and submit accurate claims. However, implementing mechanisms to develop a culture of compliance requires educating high-level influencers within your organization. 


Suggest C-Suite executives take online training in healthcare Corporate Compliance.

Require your Compliance Officer, Chief Executive Officer and Chief Financial Officer to become certified not only in Compliance, but in Auditing for Compliance and Conducting Internal Investigations.


Joanne Byron is the Board Chair and Chief Executive Officer of the American Institute of Healthcare Compliance (AIHC) with more than 35 years of health care coding, documentation, billing and compliance experience as a consultant, health care executive and corporate trainer. Learn more about AIHC, a 501(c)(3) non-profit training organization, today.  

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Auditing, Managing Denials Is Important to Good A/R Hygiene
Auditing

Compliance & Internal Investigations

Written by: Joanne Byron, BS, LPN, CCA, CHA, CHCO, CHBS, CHCM, CIFHA, CMDP, COCAS, CORCM, OHCC, ICDCT-CM/PCS




Are you an internal auditor conducting “routine” reviews? Have you ever uncovered erroneous or potentially fraudulent evidence? Once your suspicions have been reported to the Compliance Officer, were you asked to partake in evidence gathering during the investigation? The content of this article is for educational purposes and not intended as consulting or legal advice.


For those of you more experienced auditors, additional training in how to handle evidence during an internal investigation not only advances your career but helps secure evidence that can be used if an actual crime has been committed. I also recommend reading When Healthcare White-Collar Crimes Turn Red, an AIHC blog article from 2021.


Do you need to convince executives that crime is a potential problem for your organization? The Department of Justice (DOJ) posts “News & Noteworthy” cases here. 


What Comes to Mind When You Hear the Word “Forensic”?

 

Most of us think about investigations as seen on television programs, such as “CSI” or “Bones.” Forensic science is a critical element of the criminal justice system – “Forensic scientists examine and analyze evidence from crime scenes and elsewhere to develop objective findings that can assist in the investigation and prosecution of perpetrators of crime or absolve an innocent person from suspicion.”


According to the Merriam-Webster dictionary, the word forensic is defined as the following:

  • Belonging to, used in, or suitable to courts of judicature or to public discussion and debate
  • Relating to or dealing with the application of scientific knowledge to legal problems

Your auditing and compliance skills become valuable to professional law enforcement, but you need to know what, when and how to handle a situation which could potentially turn into criminal charges against someone within your organization. First, let’s start with prevention.


Is It an Internal or External Investigation?


Internal Investigations are conducted by skilled employees (or a consultant under contract working for the organization) trained to perform specialized audits to gather evidence when there is suspected fraud, abuse or crime. These investigations are typically conducted to gather information sufficient for legal counsel to determine whether an external investigation is warranted by the appropriate authorities.  These employees are often referred to as Internal Forensic Auditors or Internal Investigators. For the purpose of this course, we will refer to this position as an Internal Forensic Auditor.


Internal Forensic Auditors report to a Board of Directors, Compliance Officer and/or Audit Committee of the health care organization and typically work under the direction of the organization’s legal counsel.


External Forensic Auditors are independent of the organization they are auditing. They are experts working as an investigator for an accounting or consulting firm, CMS, a police department, the FBI or another agency as described above.


The process of conducting a forensic investigation is, in many ways, similar to the process of conducting an audit, but with some additional considerations. The various stages are briefly described below. 


Step 1: Accepting the Investigation


Review information regarding the matter and consider whether you (and your team) have the necessary skills and experience to accept the work.

  • Forensic investigations are specialized in nature, and the work requires detailed knowledge of fraud investigation techniques and the legal framework.
  • Investigators must also have received training in interview and interrogation techniques and in how to maintain the safe custody of evidence gathered.
  • Investigators must be able to address potential conflicts of interest or bias and achieve objectivity.

Step 2: Planning the Investigation


The investigating team must carefully consider what they have been asked to achieve and plan their work accordingly. The objectives of the investigation will include:

  • Recognize if there is sufficient evidence to warrant a forensic investigation. If so, then anticipate planning required to achieve the following:

      o Identify the type of fraud that has been operating, how long it has been operating for,
    and how the fraud has been concealed;

           Determine deadlines and timeframes to complete the investigation which may
    be driven by regulatory factors;

      o Identify the fraudster(s) involved;

      o Quantify the financial loss suffered by the organization;

      o Gather evidence for potential use in court proceedings;

           Identify the type of report format required and record evidence appropriately; and

      o Provide advice to prevent the reoccurrence of the fraud. 

The investigators should also consider the best way to gather evidence. They may choose the use of computer assisted audit techniques or other various methods appropriate for the situation.


Step 3:  Gathering Evidence – Fact Finding


In order to gather detailed evidence, the investigator must understand the specific type of fraud that is suspected. The evidence should be sufficient to ultimately prove the identity of the fraudster(s), the mechanics of the fraud scheme, and the amount of damage or loss suffered by the organization.


It is important that the investigating team is skilled in collecting evidence that can be used in a court case and in keeping a clear and secure chain of custody until the evidence is presented in court. If any evidence is inconclusive, or there are gaps in the chain of custody, then the evidence may be challenged in court or even become inadmissible. Investigators must be alert to documents being falsified, damaged or destroyed by the suspect(s). 


“Chain of custody” is defined by Dictionary.com as “the order in which a piece of criminal evidence should be handled by persons investigating a case, specifically, the unbroken trail of accountability that ensures the physical security of samples, data and records in a criminal investigation.” To prove the chain of custody, and ultimately show that the evidence has remained intact, prosecutors generally need internal investigators who can testify:

  • That the evidence offered in court is the same evidence they collected or received.
  • To the time and date the evidence was received or transferred to another provider.
  • That there was no tampering with the item while it was in custody.

Evidence can be gathered using various techniques, including: 

  • Testing controls to gather evidence which identifies the weaknesses which allowed the fraud to be perpetrated;
  • Using analytical procedures to compare trends over time or to provide comparatives between different segments of the business;
  • Applying computer assisted audit techniques which may help to identify the timing and location of relevant details being altered in the computer system;
  • Discussions and interviews with employees;
  • Substantive techniques such as: reconciliations, cash counts and reviews of documentation.

Step 4: Analyzing Data


After evidence and facts have been gathered and recorded, it is time to analyze all the data. The goal of data analysis is to determine if there is a relationship between the independent and dependent variables and to look for patterns within the data. 


Recording and organizing data may take different forms depending on the kind of information being collected. The way you collect your data should relate to how you’re planning to analyze and use it. Regardless of what method you decide to use, recording should be done concurrently with data collection if possible, or soon afterwards, so that nothing gets lost and memory doesn’t fade. Some of the things to do with the information collected can include:

  • Gather together information from all sources and observations;
  • Make photocopies of all recording forms, records, audio or video recordings, and any other collected materials to guard against loss, accidental erasure, or other problems;
  • Enter narratives, numbers, and other information into a computer program where they can be arranged and/or worked on in various ways;
  • Perform any mathematical or similar operations needed to get quantitative information ready for analysis;
      o These could include entering numerical observations into a chart, table, or spreadsheet, or figuring the mean (average), median (midpoint), and/or mode (most frequently occurring) of a set of numbers.
  • Transcribe (making an exact, word-for-word text version of) the contents of audio or video
    recordings;
  • Code data (translating data), particularly qualitative data that isn’t expressed in numbers, into a form that allows it to be processed by a specific software program or subjected to statistical analysis; and
  • Organize data in ways that make it easier to work with. This will depend on your research design and your evaluation questions.
      o Consider grouping observations by the dependent variable (indicator of success) they
    relate to, by individuals or groups of participants, by time, by activity, etc.
      o You might also want to group observations in several different ways so that you can study interactions among different variables. 

There are two kinds of data you’re apt to be working with. However, not all evaluations will necessarily include both.

  • Quantitative data refers to the information that is collected as, or can be translated into, numbers which can then be displayed and analyzed mathematically.
  • Qualitative data can be collected as descriptions, anecdotes, opinions, quotes, interpretations, etc. They are generally not able to be reduced to numbers and/or are considered more valuable or informative if left as narratives.

As you might expect, quantitative and qualitative information need to be analyzed differently. The investigation is likely to lead to legal proceedings against one or several suspects. Therefore, members of the investigative team must be comfortable with appearing in court to explain how the investigation was conducted and how the evidence was gathered.


Step 5: Report Your Findings


Draft the report in an objective manner. Do not draw conclusions, just report the facts. The checklist below summarizes what a typical report should contain:

  • Provide a Summary of the Investigation or Case
  • Describe the Investigation Plan
  • Case Notes – Keep an Investigator Diary
  • Information Interview Summaries
  • Interview Reports
  • Analysis of Investigation
  • Conclusion
  • Recommendations and Additional Action(s) Required With This Case
  • Exhibit Listing - attachments and evidence related to the case

Conclusion


An Ounce of Prevention Is Worth a Pound of Cure – So Learn More About Health Care Crime


A little precaution before a crisis occurs is preferable to a lot of legal complications, “bad press” and huge potential losses afterward. Preventing fraud in your organization starts with not hiring criminals! That might sound ridiculous, but are we really doing everything we should during the hiring phase of employees and contractors?


Most organizations are using the LEIE on the OIG website to screen new hires and conduct monthly verifications. But is this enough?


Unverified employees can put your organization at risk with a dramatic impact on your company’s brand reputation, performance and finances. Screening employees at hire, and periodically during employment, is a must for creating a safe workplace.


Below is a “short list” of screening tactics to consider before extending an offer to a candidate for hire. Be sure to review your procedure with legal counsel or a human resources expert to avoid any potential legal consequences with the U.S. Equal Employment Opportunity Commission (EEOC) related to changing your current hiring practices.

  • Criminal background check
  • Office of Inspector General (OIG) Exclusions Database check
  • Education – verify graduation, degree
  • Professional Certifications (check all certifications with the certifying agency – do not accept certificates from the potential employee as proof)

The EEOC has a webpage dedicated to help employers that addresses “Background Checks – What Employers Need to Know.” The information on this page is a joint publication between the EEOC and the Federal Trade Commission or FTC.


When making personnel decisions, which include hiring, retention, promotion, and reassignment, the EEOC states that employers should consider the background of applicants and employees. For example, the EEOC states you may want to consider verifying:

Except for certain restrictions related to medical and genetic information (per HIPAA, addressed further on the EEOC website), it's not illegal for an employer to ask questions about an applicant's or employee's background or to require a background check.


AIHC offers training – a “how to” participate in or conduct an internal investigation. The course is offered online with the option to certify (with a professional proctor online). The program is entitled Internal Forensic Auditor. If this course seems too intense, you may want to begin with the Auditing for Compliance online program.

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