The checks are not currently required by law, but Department of Community Health Director James Haveman said the agency erred in not doing them. A new policy will be enacted within a month, he said after speaking at an obesity-awareness event in the Capitol.
He said he feels "very strongly" that people convicted of murder, sex offenses and Medicaid fraud should not be home-help workers — even if they're hired by family members, a common practice among the 67,000 disabled Medicaid recipients each year who need assistance to eat, bathe and do other things.
Yet to be determined is whether felons with lesser offenses will be automatically disqualified from the $8- to $11-an-hour jobs.
"It's easy to say, 'Don't let felons do this,'" Haveman said. "But we also talk about rehabilitation ... we talk about people serving their time."
Michigan has about 70,000 home-help aides. The audit identified 3,786, or 5 percent, with felony convictions: 572 convictions for violent crimes ranging from homicide to assault, 285 sex-related convictions, 1,148 convictions for financial crimes and 2,020 for drug-related offenses.
The state told auditors it has been considering background checks for years, but it poses a "unique circumstance" because clients can hire family members and may be fully aware of their criminal history.
The audit released Tuesday put a renewed spotlight on a 2012 decision by Gov. Rick Snyder and Republican lawmakers to ensure union dues were no longer collected from certain home-help workers, which also led to the end of a voluntary registry of aides who had already undergone background checks. The law was a response to what conservative critics considered a stealth collection of union dues from Medicaid providers under former Gov. Jennifer Granholm; a ballot measure to reinstate the unionization through the Michigan Quality Community Care Council was rejected by voters two years ago.
Dohn Hoyle, executive director of disability rights organization The Arc Michigan, was the first chairman of the council. Before the registry was disbanded, it had 933 approved workers, he said.
"Anybody who came to the registry looking for someone could count on them having a criminal background check," said Hoyle, who estimated about half of the participants in the Medicaid Home Help Program hire relatives and half look elsewhere. The cost is covered by Medicaid.
Hoyle said he was equally if not more concerned that the audit dinged the state for improperly spending $160 million over three years because it failed to obtain invoices and other required documentation from service providers. State caseworkers also did not meet with clients to review care or talk with home health aides to verify the care had been provided.
The state had 541 adult services caseworkers in 2000 with 46,309 home help cases, an average caseload of about 85, Hoyle said. There were 404 caseworkers for 67,421 recipients in 2013 for an average caseload of 167.
"I don't know how they thought all of this was going to happen with so few people," Hoyle said.
Haveman said the state hasn't "kept up" with changes that must be made to the program in the wake of the federal health care overhaul.
"We learn from these things. ... I'm confident that we've tightened this program up and it will be tighter going ahead," he said.