Tips for auditing physician employee personnel folders

Editor’s Note: Welcome to Medical Economics' blog section which features contributions from members of the medical community. These blogs are an opportunity for bloggers to engage with readers about a topic that is top of mind, whether it is practice management, experiences with patients, the industry, medicine in general, or healthcare reform. The series continues with this blog by Carol Gibbons, RN, BSN, NHA, who is CEO of CJ Consulting, which specializes in healthcare revenue cycle management. The views expressed in these blogs are those of their respective contributors and do not represent the views of Medical Economics or UBM Medica.

Have you ever done an audit of your employee personnel folders to review the actual information that has made its way into these folders? There have been many Department of Labor changes in the past couple of years, so now would be a good time to pull several folders and analyze the contents.

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While performing an audit of clients’ personnel folders, it became very clear that the staff did not understand what should be in them. Many things in that folder ( whether on paper, or electronically stored, are subject to being copied and given to the employee if there is a discrepancy, so clear rules needed to be established regarding not only what was in the folder, but also how they are stored and who has access.

The first step is to know what should be in the folders. The employee application is the most important item. It  gives you a history of the employee’s past experience and permission to verify work information. Next would be any  job offer that was extended to the employee prior to hiring.  Verification of previous employment and references contacted regarding the employee are very important and should be documented in the folder. It may be difficult at times to get previous employers to reveal more than dates of employment and if the employee is eligible for rehire. Some will even ask for a signature from employee to give permission to disclose information.

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You should at least make an attempt and document the information. Understand that previous employers may refuse to do more than verify dates of hire, because of legal challenges and you may need to ask for personal references. A red flag on the references given might be that the reference noted on the application is a co-worker rather than a supervisor or owner of the business.  Always try to verify employment with an owner, manager or supervisor if possible.

New employee information

Once you have offered the future employee a position, a demographic form should be filled out and placed in the folder listing emergency contact numbers, information about dependents (if the company provides insurance), and other physical data about the future employee, such as height and weight. This information cannot be legally requested prior to the offer of employment.

Next: Understanding company policy info

After the job offer is also the time when you can require pre-employment drug testing and criminal background information. These activities require a separate consent form signed by the employee. If a criminal background check results in information that impacts the job offer, this information must be shared with the employee. The employee has the right to dispute the information with the agency who prepared the background check prior to the withdrawal of the job offer.

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Once the employee starts working, there should be several items that need to be completed, first being an I-9 form which verifies the employee can legally work in the US. If you need help filling out that form, here is a link to the U.S. Customs and Immigration website (https://www.uscis.gov/i-9) where you can download the handbook for employers. The I-9 form does not belong in the employee folder, so keep it in a separate binder.  

You are required to keep I-9 forms for three years or one year past termination. Putting these in a binder by year helps you keep up with the process. You do not have to get new I-9 forms signed by current employees. Also, if you have not signed up for the free service eVerify, you should do that to confirm all employees are legal to work in the United States (https://www.uscis.gov/e-verify).

Additional forms you should place in the folder are a W-4 form to identify tax deductions, a voided check or deposit slip for direct deposit along with consent to allow direct deposit, a contract for uniforms if you pay for them and a contract for tuition reimbursement if you pay for that. If you offer insurance coverage for your employees, there should also be a declination form in the employee’s folder for those who are declining coverage, as well as insurance enrollment forms.

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Medical reports should NOT be in the Employee folder. If an employee is injured on duty and requires medical care, those reports should be in a separate folder including the incident report.  Medical folders should not be stored in the same drawer as the employee folders. All folders should be secure, but medical information gets a higher security process being in a different location from regular employee folders and fewer supervisory employees having access because it contains personal health information.

If you receive medical information related to a medical leave of absence, it should also be stored in the medical folder. Any incidental release of medical information or genetic testing will fall under the HIPAA guidelines, as well as specific Department of Labor rulings, so limit the access to this information.

Company policy information

If you have a handbook, it should be reviewed with your team annually. The goal is to make sure the handbook policies and guidelines match your current behavior with employees. Remember that your handbook is designed to protect your business, but if you regularly do not follow the policies as written, then employees can use that against you in the future.

Next: Limiting access

It is useful to periodically have your handbook reviewed by an attorney as new laws and Department of Labor guidelines go into effect every year. Once an employee has reviewed the handbook, they need to sign a form that says they reviewed, understand and had an opportunity to ask questions about the information in the handbook.  This consent form belongs in the employee folder, not a copy of the handbook. 

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Evaluations and disciplinary forms and documentation belong in the folder, along with personal time off requests if required by the business. If you have a written process that says you do evaluations on a yearly basis, make sure they are in the folder. You are not required to do evaluations on a yearly basis, but you are required to follow your policy. This might be a good time to pull out the policy and meet with all supervisory staff to make sure the policy is being followed. 

You should have a master binder (paper or electronic) for your handbook with a copy of each dated version. If you change a particular item in the handbook, all employees must sign a memo or confirm email receipt of the new information. That copy of the signed email goes in the employee folder, and a copy of the memo goes in your handbook binder.

Limit access

Employee folders should be in a locked drawer and a limited number of employees should have access to the information. Again, review your policy to update the employees that should have access to folders. The medical folders should be in a separate area with even fewer employees having access like an owner, practice manager, or HR director.

Some practices have moved to maintaining their employee folders electronically either on their equipment or cloud-based through the payroll company. Either is acceptable, as long as they are password protected and that password is changed regularly. Again, the fewer people who have access, the less likely information could be disclosed accidently.

If a disgruntled employee leaves your practice and then requests a copy of their employee folder, consult your attorney immediately. Each state has guidelines regarding what documents in the folder an employee is entitled to have copied. Never give the employee a copy of the entire folder-it belongs to you unless you get a legal request like a subpoena for the information.  Even then, make sure you release only the listed information.

Hopefully, this information can guide you in assessing the current state of your employee folders and can help you identify corrective steps that might need to be taken to protect your business.