Hhs OIG OIG Sar Fall 2020 Complete Report
Summary
The Department of Health and Human Services Office of Inspector General's Semiannual Report to Congress for April 1, 2020, through September 30, 2020, introduced by a message from Christi A. Grimm, Principal Deputy Inspector General. The report summarizes OIG activities over the 6-month period, during which the COVID-19 public health emergency posed significant challenges for HHS programs. It cites a national health care fraud takedown involving telefraud and opioid schemes with more than $6 billion in alleged fraud losses.
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2020, through September 30, 2020
A Message From Christi A. Grimm, Principal Deputy Inspector General
I am pleased to submit this Semiannual Report to Congress
summarizing the activities of the Department of Health and Human
Services (HHS), Office of Inspector General (OIG), for the 6-month
period ending on September 30, 2020.
During this reporting period, the COVID-19 public health
emergency posed significant challenges for HHS programs and
their capacity to ensure public health and safety. These challenges
are many, thorny, and unprecedented. Government and the
private sector are marshalling resources to respond to the
pandemic and deliver needed health care services. Effective
oversight is critical when public health, safety, and massive
taxpayer investments are at stake.
Consequently, during this reporting period, COVID-19-related issues commanded much of OIG’s
attention. OIG’s COVID-19 oversight strategic plan sets forth four goals: protecting people, protecting
funds, protecting infrastructure, and promoting program effectiveness now and into the future. OIG
accelerated efforts to initiate data-driven reviews examining the effectiveness of the public health response
through an independent and objective lens. To date, we have announced 45 reviews, 35 of which we
started during the reporting period. During the reporting period, OIG published work addressing hospital
preparedness, state agency approaches to child care, and health care facility and community-level
emergency response. OIG is also a leader in the fight against COVID-19-related fraud. We are
aggressively pursuing those who seek to exploit the public health emergency, endanger people, and steal
public funds. OIG mitigates the harm from these schemes by proactively alerting the public about
potential scams and instructing people how to protect themselves. Consistent with Congress’ call for
transparency and robust oversight of the Federal COVID-19 response and funding, we are coordinating
closely with the Pandemic Response Accountability Committee and other OIGs from multiple Departments
responsible for the COVID-19 response.
Amid the COVID-19 pandemic, OIG continues its enterprisewide oversight of HHS’s now $2.4 trillion
portfolio. OIG oversees approximately 22 percent of Federal spending in fiscal year 2020 and to achieve
significant results we need to be both effective and efficient. To this end, we focus on key priority areas,
harness data and technology, and cultivate public and private partnerships to conduct high-impact,
evidence-based work. OIG’s teams tackle problems by connecting the perspectives of multiple experts,
including law enforcement agents, attorneys, auditors, analysts, data scientists, clinicians, and other
specialists.
Using this approach, OIG produces outsized impact. During this reporting period, an OIG study identified
$2.6 billion per year of estimated Medicare Advantage risk-adjusted payments supported solely through
health risk assessments. This means that Medicare paid plans extra money for claimed conditions, but
beneficiaries may not have received services related to those conditions. This study raises concerns about
the accuracy and completeness of payment data and the potential that some Medicare beneficiaries might
not be receiving care they need. And in September, we targeted our enforcement efforts against illicit
Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2020, through September 30, 2020
“telefraud” and opioid schemes that lured unsuspecting beneficiaries through aggressive marketing tactics,
resulting in the largest national health care fraud takedown in history, with more than $6 billion in alleged
fraud losses. The Semiannual Report more fully describes our portfolio of completed work during this time
period.
Through the dedication and talent of OIG’s 1,600 dedicated public servants, we remain committed to
executing our mission by conducting independent, relevant, and high-impact work. By focusing on
consequential issues such as the pandemic response, cybersecurity, and the integrity of the Medicare and
Medicaid programs, OIG will continue to maximize its resources to protect taxpayer dollars and promote
the economy, efficiency, effectiveness, and integrity of HHS programs, as well as the health and welfare of
the people they serve.
OIG appreciates the continued support of Congress and HHS for this important work.
Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2020, through September 30, 2020
Table of Contents
OIG’s Approach to Driving Positive Change 4
Highlights of OIG Accomplishments 5
OIG Participation in Congressional Hearings 16
Selected Acronyms and Abbreviations 17
Medicare and Medicaid Reports and Reviews 18
Legal and Investigative Activities Related to Medicare and Medicaid 40
Public Health and Human Service Agency Reports and Reviews 56
Legal and Investigative Activities Related to Public Health and Human Service Agencies 70
Other HHS-Related Reviews and Investigative Activities 72
Appendix A: Questioned Costs and Funds To Be Put to Better Use 77
Appendix B: Savings Decisions Supported by OIG Recommendations 83
Appendix C: Peer-Review Results 86
Appendix D: Summary of Sanction Authorities 89
Appendix E: Reporting Requirements in the Inspector General Act of 1978 92
Appendix F: Reporting Requirements in the Inspector General Empowerment Act of 2016 95
Appendix G: Anti-Kickback Statute—Safe Harbors 102
OIG’s Approach to Driving Positive Change
THE DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS), Office of Inspector General (OIG), provides
independent and objective oversight that promotes economy, efficiency, and effectiveness in HHS
programs and operations. OIG’s program integrity and oversight activities are shaped by legislative and
budgetary requirements and adhere to professional standards established by the
Government Accountability Office (GAO), Department of Justice (DOJ), and Inspector General community.
Through a nationwide network of audits, investigations, and evaluations OIG carries out its mission to
protect the integrity of HHS programs and the health and welfare of the people served by those programs.
OIG’s work is conducted by three operating components—the Office of Audit Services (OAS), the Office of
Evaluation and Inspections (OEI), and the Office of Investigations (OI)—with assistance from the Office of
Counsel to the Inspector General (OCIG) and Mission Support and Infrastructure (MSI).
Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2020, through September 30, 2020
OIG Organization
Office of Audit Services
OAS conducts audits of HHS programs and operations either through its own resources or by
overseeing audit work done by others. Audits examine the performance of HHS programs and/or
of HHS’s grantees and contractors in carrying out their respective responsibilities and provide
independent assessments of HHS programs and operations. These audits help reduce waste,
abuse, and mismanagement and promote the economy, efficiency, and effectiveness of programs
and operations throughout HHS.
Office of Evaluation and Inspections
OEI conducts national evaluations to provide HHS, Congress, and the public with timely, useful,
and reliable information on significant issues. These evaluations focus on preventing fraud, waste,
and abuse and promoting economy, efficiency, and effectiveness in HHS programs. OEI reports
also present practical recommendations for improving program operations.
Office of Investigations
OI conducts criminal, civil, and administrative investigations of fraud and misconduct related to
HHS programs, operations, and beneficiaries. With investigators working in almost every State, the
District of Columbia, and Puerto Rico, OI coordinates with DOJ and other Federal, State, and local
law enforcement authorities. OI also coordinates with OAS and OEI when audits and evaluations
uncover potential fraud. OI’s investigative efforts often lead to criminal convictions, administrative
sanctions, or civil monetary penalties (CMPs).
Office of Counsel to the Inspector General
OCIG provides legal services to OIG, rendering advice and opinions on HHS programs and
operations and providing all legal support for OIG’s internal operations. OCIG represents OIG in all
civil and administrative fraud and abuse cases involving HHS programs, including the False Claims
Act, program exclusion, self-disclosure, and CMP cases. In connection with these cases, OCIG also
negotiates and monitors corporate integrity agreements (CIAs). OCIG renders advisory opinions,
issues compliance program guidance, publishes fraud alerts, and provides other guidance to the
health care industry about the anti-kickback statute and other OIG enforcement authorities.
Mission Support and Infrastructure
MSI is composed of the Immediate Office of the Inspector General and the Office of Management
and Policy. MSI is responsible for coordinating OIG activities and providing mission support,
including setting vision and direction for OIG’s priorities and strategic planning; ensuring effective
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2020, through September 30, 2020
management of budget, finance, human resource management, and other operations; and serving
as a liaison with HHS, Congress, and other stakeholders. MSI plans, conducts, and participates in a
variety of cooperative projects within HHS and with other Government agencies. MSI provides
critical data analytics, data management, and information technology infrastructure that enable
OIG components to conduct their work efficiently and effectively.
OIG Strategic Publications
HHS-OIG Strategic Plan
OIG’s Strategic Plan outlines the approach to protecting the integrity of HHS programs. The plan
has three key goals: (1) to fight fraud, waste, and abuse; (2) to promote quality, safety, and value in
HHS programs and for HHS beneficiaries; and (3) to advance excellence and innovation. These
goals drive OIG’s work planning for audits and evaluations as well as OIG’s approach to
enforcement. These goals also serve as a starting point for OIG’s assessment of its own
effectiveness.
OIG Work Plan
OIG’s Work Plan sets forth projects that OIG plans to undertake during the fiscal year (FY) and
beyond. Projects listed in the Work Plan span HHS’s operating divisions (OpDivs), which include
the Centers for Medicare & Medicaid Services (CMS); public health agencies such as the Centers for
Disease Control and Prevention (CDC) and the National Institutes of Health (NIH); and human
services agencies such as the Administration for Children and Families (ACF) and the
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2020, through September 30, 2020
Administration for Community Living (ACL). The Work Plan also includes oversight of State and
local governments’ use of Federal funds as well as the administration of HHS. Some of the projects
described in the Work Plan are statutorily required.
OIG’s Top Recommendations
OIG drives positive change by not only identifying risks, problems, abuses, and deficiencies, but
also recommending solutions to address them. OIG maintains a list of recommendations it has
made to address vulnerabilities detected in its reviews, and it keeps track of whether these
recommendations have been implemented. OIG systematically follows up on its recommendations
with the relevant HHS programs. From among the recommendations that have not been
implemented, OIG identifies the top recommendations that, if implemented, are likely to garner
significant savings and improvements in quality, efficiency, and effectiveness. OIG compiles these
recommendations in the Solutions To Reduce Fraud, Waste, and Abuse in HHS Programs: OIG’s Top
Recommendations (previously known as the Compendium of Unimplemented Recommendations).
Top Management and Performance Challenges Facing HHS
To focus HHS’s attention on the most pressing issues, each year OIG identifies the Top
Management and Performance Challenges facing HHS. These top challenges arise across HHS
programs and cover critical HHS responsibilities, including delivering quality services and benefits,
exercising sound fiscal management, safeguarding public health and safety, and enhancing
cybersecurity.
OIG’s Semiannual Report to Congress
OIG’s Semiannual Report(s) to Congress (Semiannual Reports) describe OIG’s work on identifying
significant problems, abuses, deficiencies, remedies, and investigative outcomes relating to the
administration of HHS programs and operations that were disclosed during the reporting period.
In the report below, we present OIG expected recoveries, criminal and civil actions, and other
statistics as a result of our work for the semiannual reporting period April 1, 2020, through
September 30, 2020. We also highlight some of our work completed during this semiannual
reporting period.
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2020, through September 30, 2020
Highlights of OIG Accomplishments
HHS-OIG’S SEMIANNUAL REPORT TO CONGRESS (Semiannual Report) describes OIG’s work identifying
significant risks, problems, abuses, deficiencies, remedies, and investigative outcomes relating to the
administration of HHS programs and operations that were disclosed during the semiannual reporting
period April 1, 2020, through September 30, 2020. In this highlights section, we present data on OIG
reports issued, expected recoveries, criminal and civil actions, and other statistics resulting from our work
for both the semiannual reporting period and the entirety of FY 2020. We then highlight significant results
from selected audits, evaluations, and enforcement activities completed during the reporting period.
At-a-Glance FY 2020 Highlights
Statistic FY 2020
(10/1/2019–9/30/2020)
Audit Reports Issued 178
Evaluations Issued 44
Expected Audit Recoveries $942.06 million
Questioned Costs $733.93 million
Potential Savings $2.89 billion
New Audit and Evaluation 689
Recommendations
Recommendations Implemented by 286
HHS OpDivs
Expected Investigative Recoveries $3.14 billion
Criminal Actions 624
Civil Actions 791
Exclusions 2,148
Results for the Semiannual Reporting Period
During this semiannual reporting period (April 1, 2020, through September 30, 2020), we issued 97 audit
reports and 27 evaluation reports. Our audit work identified $337 million in expected recoveries, as well as
$446 million in questioned costs (costs questioned by OIG because of an alleged violation, costs not
supported by adequate documentation, or the expenditure of funds where the intended purpose is
unnecessary or unreasonable). Our audit work also identified $2 billion in potential savings for HHS—
funds that could be saved if HHS implemented all of OIG’s audit recommendations. During this reporting
period, OIG made 416 new audit and evaluation recommendations, which are crucial to encourage positive
change in HHS programs. Meanwhile, HHS OpDivs implemented 156 prior recommendations, leading to
positive impact for HHS programs and beneficiaries.
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2020, through September 30, 2020
OIG also remains at the forefront of the Nation’s efforts to fight fraud in HHS programs and hold
wrongdoers accountable for their actions. Along with our partners DOJ, Medicaid Fraud Control Units
(MFCUs or Units), and other Federal, State, and local law enforcement agencies, we detect, investigate, and
prosecute fraud through a coordinated and data-driven approach. OIG’s investigative work led to
$1.62 billion in expected investigative recoveries and 181 criminal actions during this reporting period. OIG
also took civil actions, such as assessing monetary penalties, against 421 individuals and entities, and
excluded 1,245 individuals and entities from Federal health care programs.
OIG continues to focus on the most significant and high-risk issues in health care and human services. Our
mission is to provide objective oversight to promote the economy, efficiency, effectiveness, and integrity of
HHS programs, as well as the health and welfare of the people they serve. Below we highlight results from
selected OIG oversight and enforcement activities from the semiannual reporting period April 1, 2020,
through September 30, 2020, organized by subject area. A comprehensive list of OIG work during the
reporting period follows, and Appendices A–G provide data to meet the reporting requirements in the
Inspector General Act of 1978.
Responding to the COVID-19 Pandemic
HHS continued to respond to the unprecedented challenged posed COVID-19. HHS leads the Federal
public health and medical response during public health emergencies. In May 2020, OIG published a
strategic plan on the oversight of COVID-19 response and recovery. The plan sets forth the four goals that
drive OIG’s strategic planning and mission execution with respect to HHS’s COVID-19 response and
recovery. These goals are to: (1) protect people, (2) protect funds, (3) protect infrastructure, and (4)
promote effectiveness of HHS programs.
OIG is using risk assessment and data analytics to identify, monitor, and target potential fraud, waste, and
abuse affecting HHS programs and beneficiaries and to promote the effectiveness of HHS’s COVID-19
response and recovery programs. OIG is coordinating our COVID-19 work with key oversight and law
enforcement partners, including the Pandemic Response Accountability Committee; Federal, State, local,
and Tribal entities; and GAO, among others, to ensure adequate oversight, avoid duplication, and share
insights. OIG created a COVID-19 web page that alerts the public about emerging fraud schemes related
to COVID-19. Additional information about OIG work related to COVID-19 is available on our website,
COVID-19 Portal. Significant OIG work during this semiannual reporting period related to COVID-19
includes the following:
OIG rapidly provided information about hospitals’ experiences and perspectives in responding to
COVID-19. In a pulse survey conducted in late March 2020 and described in an OIG report issued on April
3, 2020, hospitals nationwide described challenges, mitigation strategies, and the need for assistance in
responding to COVID-19. Hospitals reported that their most significant challenges centered on testing and
caring for patients with known or suspected COVID-19 and keeping staff safe. Hospitals also reported
substantial challenges to maintaining or expanding their facilities’ capacity to treat patients with COVID-19.
(See report OEI-06-20-00300.)
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2020, through September 30, 2020
OIG issued guidance regarding the application of OIG’s administrative fraud enforcement authorities to
support providers in delivering needed patient care during the public health emergency. In April 2020,
OIG issued a Policy Statement in response to the Secretary’s January 31, 2020, declaration of a public
health emergency. Under this Policy Statement, OIG will exercise its enforcement discretion to not impose
administrative sanctions under the Federal anti-kickback statute for certain remuneration related to
COVID-19 covered by the Blanket Waivers of Section 1877(g) of the Social Security Act (the Act) issue by
the Secretary on March 30, 2020 (the Blanket Waivers), subject to certain conditions. Through this Policy
Statement, OIG seeks to avoid the need for parties to undertake a separate legal review under the Federal
anti-kickback statute for certain arrangements protected by the Blanket Waivers.
OIG issued guidance regarding physicians and other practitioners that reduce or waive amounts owed by
Federal health care program beneficiaries for telehealth services during COVID-19. Ordinarily, routine
reductions or waivers of costs owed by Federal health care program beneficiaries, including cost-sharing
amounts such as coinsurance and deductibles, implicate the Federal anti-kickback statute, the civil
monetary penalty and exclusion laws related to kickbacks, and the civil monetary penalty law prohibition
on inducements to beneficiaries. However, in March 2020, in response to the public health emergency,
OIG issued a Policy Statement notifying physicians and other practitioners that they will not be subject to
administrative sanctions for reducing or waiving any cost-sharing obligations that a beneficiary may owe
for telehealth services furnished consistent with the then-applicable coverage and payment rules during
the public health emergency.
OIG briefed a congressional committee about OIG’s oversight related to COVID-19 response efforts. In
May, Christi A. Grimm, Principal Deputy Inspector General, briefed members before the U.S. House
Committee on Oversight and Reform. The briefing outlined OIG’s oversight of HHS’s COVID-19 programs
and funding. (See OIG congressional testimony.)
OIG issued two toolkits to aid current COVID-19 response efforts by leveraging past OIG work and offering
action-oriented lessons learned for health care facilities and community leaders. The toolkits contain key
insights and lessons learned from OIG reports published from 2002 to 2020 about health care facility
emergency preparedness and response and community response and recovery. These resources leverage
experiences during outbreaks of emerging infectious diseases (such as Ebola and H1N1 pandemic
influenza) and natural disasters (such as Hurricane Katrina and Superstorm Sandy), as well as bioterrorism
preparedness and response. (See toolkits OEI-06-20-00470, OEI-09-20-00440.)
Ensuring Health and Safety of Children Served by HHS
OIG has devoted substantial oversight efforts to protect children served by HHS programs such as the
Unaccompanied Alien Children (UAC) Program and foster care.
OIG found that improvements are needed in the UAC Program to better protect children and ensure that
relevant Federal funds are being used appropriately. The incident reporting system of ACF’s Office of
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2020, through September 30, 2020
Refugee and Resettlement (ORR) is not effective at capturing information about significant incidents
including, but not limited to, medical emergencies, self-harm, and incidents of a sexual nature to assist
ORR’s efforts to ensure the safety of minors in ORR’s care. ACF concurred with OIG’s recommendations to
improve ORR’s incident reporting system. (See report OEI-09-18-00430.) In reviewing facility physical
security inspection checklists from 40 UAC provider facilities, OIG also found that 39 facilities did not
include all required physical security measures in their checklists. OIG provided recommendations to help
ACF ensure that facilities are safe. (See report OEI-05-19-00210.) Finally, OIG found that Southwest Key, a
UAC Program grantee, claimed unallowable costs related to the UAC Program. In addition to
recommending Southwest Key refund the unallowable costs to the Federal Government, OIG
recommended that ORR provide guidance on allowable costs. (See report A-06-17-07004.)
OIG determined that Medicaid claim data can be used to identify incidents of potential child abuse or
neglect. Based on claim data and medical record review, OIG estimated that 29,260 of the 29,534 children
enrolled in Medicaid in our sampling frame were involved with incidents of potential child abuse or
neglect. CMS concurred with our recommendation that it issue guidance to inform States that performing
data analysis to identify Medicaid claims containing diagnosis codes indicating potential child abuse or
neglect could help identify incidents of potential child abuse or neglect and help ensure compliance with
their mandatory reporting laws. (See report A-01-19-00001.)
OIG found that New Hampshire's criminal background check monitoring did not ensure provider
compliance with State requirements. By not ensuring that all current employees or household members
who supervised or had routine unsupervised contact with children passed all criminal background checks,
New Hampshire potentially jeopardized the safety of the children in the care of 21 or 30 selected child care
providers. New Hampshire concurred with our recommendations to ensure all child care providers comply
with criminal background check requirements. (See report A-01-18-02504.)
OIG found that Kansas and Ohio did not comply with State foster care requirements. Kansas did not
ensure that group homes for children in foster care complied with all State health and safety requirements
in accordance with Federal laws and regulations. Kansas concurred with our recommendations. (See
report A-07-19-06087.) Ohio did not always comply with State requirements related to psychotropic and
opioid medications prescribed for children in foster care. OIG found that, the medications listed in for 61
case records were not accurately documented in the Ohio Statewide Automated Child Welfare Information
System. Ohio concurred with our recommendations. (See report A-05-18-00007.)
Protecting Beneficiaries Receiving Long-Term Care Services
OIG conducts oversight to support a high-performing health care system to foster better health outcomes
and identifying and combating potential abuse and neglect of beneficiaries.
OIG found that individual nursing homes’ daily staffing levels did not match their Staffing Star Ratings. In
2018, nursing homes’ reported staffing levels that often vary on a day-to-day basis, and staffing levels for 7
percent of nursing homes fell below required Federal standards for at least 30 total days. CMS’s Star
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2020, through September 30, 2020
Rating System ranks nursing homes on their average staffing levels each quarter; as a result, daily staffing
variations are not transparent to consumers. CMS did not agree or disagree with our recommendations to
enhance efforts to ensure that nursing homes meet daily staffing requirements. (See report OEI-04-18-
00450.)
OIG found that New Jersey did not ensure that its Managed Care Organizations complied with certain
Federal and State requirements for beneficiaries enrolled in its Medicaid managed long-term services and
supports program. Managed Care Organizations (MCOs) did not comply with the requirements to
adequately assess and cover the associated beneficiaries’ needs for long-term services and supports.
Specifically, MCOs did not comply with requirements for providing adequate service planning and care
management to the beneficiaries; conducting and documenting assessments; and developing, reviewing,
and updating beneficiaries’ care plans. New Jersey partially concurred with our recommendations to
improve its monitoring and followup activities to ensure that its MCOs comply with Federal and State
requirements detailed in its contracts with the MCOs. (See report A-02-17-01018.)
Three former caregivers sentenced on civil rights and obstruction charges related to the death of a
disabled resident. Three former caregivers in Missouri were sentenced for their roles in the death of a
disabled resident at Second Chance Homes, an organization that provided housing and care for
developmentally disabled persons through a Missouri Department of Mental Health initiative. The
caregivers pleaded guilty to willfully failing to provide necessary medical care to the victim, resulting in
injury to and the death of the victim.
Preventing and Treating Opioid Misuse
OIG continues to prioritize enforcement and oversight activities to protect beneficiaries from prescription
drug abuse.
OIG found that most Part D beneficiaries at serious risk of opioid misuse or overdose in 2017 received high
amounts of opioids the following year. Raising even more concern, 11 percent of beneficiaries at serious
risk in 2017 had an overdose or an adverse effect from an opioid. About one-quarter of beneficiaries at
serious risk in 2017 received a prescription for naloxone—an opioid-overdose reversal drug—through Part
D. CMS concurred with our recommendation that it educate Part D beneficiaries and providers about
access to medication-assisted treatment (MAT) drugs and naloxone. (See report OEI-02-19-00130.)
OIG found, over the past several years, that opioid use has steadily declined in Medicare Part D and the
use of drugs for MAT has increased. The changes in recent years in opioid use and MAT show progress
from the efforts of HHS and others to address the opioid crisis. Nonetheless, it is critical to remain vigilant
as the COVID-19 pandemic poses additional danger for at risk populations. Although the number of Part
D beneficiaries who received opioids decreased in 2019, OIG determined that almost 34,000 beneficiaries
remain at serious risk of opioid misuse or overdose. (See report OEI-02-20-00320.) To help others identify
certain patients who are at risk of opioid misuse or overdose, OIG published a toolkit during this reporting
period that features detailed steps for using prescription drug claims data to analyze patients’ opioid
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Department of Health and Human Services, Office of Inspector General
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levels. (See report OEI-02-17-00561.) OIG encourages CMS to also closely monitor opioid use and access
to treatment in 2020 and beyond.
OIG found that despite a significant increase in naloxone utilization under Medicaid, the program
accounted for only a small proportion of all naloxone distributed in the United States in 2018. CMS and
State Medicaid agencies can be encouraged by their progress to date in increasing access to naloxone
while also continuing to look for ways to further expand naloxone availability under Medicaid. CMS did
not explicitly concur with our recommendation to pursue strategies to increase the number of at-risk
beneficiaries acquiring community-use versions of naloxone through Medicaid. (See report OEI-BL-18-
00360.)
An individual was sentenced to 108 months in Federal prison for leading a conspiracy to distribute
powerful prescription opioids via sham medical clinics. Minas Matosyan and his co-conspirators controlled
the sham clinics and hired corrupt doctors who allowed their names to be used on fraudulent prescriptions
in exchange for kickbacks. Matosyan and his co-conspirators also stole the identities of other doctors and
issued prescriptions in those doctors’ names.
A pharmaceutical company entered into a $300 million civil False Claims Act settlement in connection with
the marketing and promotion of the opioid addiction treatment drug Suboxone. The total resolution
relating to the company, Indivior, marketing of Suboxone is more than $2 billion—the largest-ever
resolution in a case brought by DOJ involving an opioid drug.
Ensuring Medicare Program Integrity
In 2019, Medicare spent $796 billion, and provided health coverage to nearly 61.2 million beneficiaries. The
Medicare program faces significant challenges with respect to solvency and spending.
In September 2020, the largest National takedown in DOJ history was carried out across 51 judicial districts.
This national takedown resulted in charges against 345 individuals for submitting more than $6 billion in
false and fraudulent claims to Federal health care programs and private insurers, including more than
$4.5 billion connected to prescribing or ordering unnecessary medical items or services by leveraging
aggressive marketing tactics and so-called telehealth services, more than $845 million connected to
substance abuse treatment facilities, or “sober homes,” and more than $806 million connected to other
health care fraud and illegal opioid distribution schemes across the country.
OIG found that Medicare Advantage Organizations’ encounter data continues to miss provider identifiers.
Encounter data from Medicare Advantage Organizations (MAOs) continue to lack National Provider
Identifiers (NPIs) for providers who order and/or refer durable medical equipment, prosthetics, orthotics,
and supplies; clinical laboratory services; imaging services; and home health services. Yet, OIG found that
almost all MAOs have data systems that are able to receive and store these NPIs when providers submit
them. CMS concurred with our first recommendation and did not concur with our second
recommendation. (See report OEI-03-19-00430.)
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2020, through September 30, 2020
A skilled nursing facilities provider entered in to a $10 million settlement to resolve allegations that it
violated the False Claims Act by knowingly causing certain facilities to submit false claims to Medicare for
rehabilitation therapy. The settlement resolved allegations that the provider Saber Healthcare, Saber
Healthcare Group LLC, and other Saber related entities submitted false claims for rehabilitation therapy by
engaging in a systematic effort to increase Medicare billings for services that were not reasonable,
necessary, or skilled. Saber entered into a 5-year CIA with OIG in connection with the settlement.
A pain clinic and two of their former executives agreed to pay a total of $41 million to resolve alleged
violations of the False Claims Act for billing Medicare, Medicaid, TRICARE, and other Federal health care
programs for medically unnecessary urine drug tests (UDTs). The Government alleged that Logan
Laboratories Inc., Tampa Pain Relief Centers Inc., and two of their former executives knowingly submitted
or caused the submission of false claims to Federal health care programs for presumptive and definitive
UDTs, in circumstances where such testing was not medically reasonable or necessary. The Government
alleged that the defendants developed and implemented a policy and practice of automatically ordering
both presumptive and definitive UDTs for all patients at every visit, without any physician making an
individualized determination that either test was medically necessary for the patients for whom the tests
were ordered.
A provider agreed to pay $117 million to resolve alleged violations of the False Claims Act for billing
medically unnecessary inpatient behavioral health services; failing to provide adequate and appropriate
services; and paying illegal inducements to Federal health care beneficiaries. Specifically, the Government
alleged that Universal Health Services (UHS) admitted Federal health care beneficiaries who were not
eligible for inpatient or residential treatment because their conditions did not require that level of care,
while also failing to properly discharge appropriately admitted beneficiaries when they no longer required
inpatient care. The Government further alleged that UHS billed for services not rendered, billed for
improper and excessive lengths of stay, failed to provide adequate staffing, training, and/or supervision of
staff, and improperly used physical and chemical restraints and seclusion. In addition, UHS allegedly failed
to develop and/or update individual assessments and treatment plans for patients, failed to provide
adequate discharge planning, and failed to provide required individual and group therapy services in
accordance with federal and state regulations. As a condition of the settlement, Universal Health Services
entered into a CIA with OIG.
Maximizing Value by Ensuring Efficient Use of HHS Funds
OIG reviews of the HHS programs are critical to ensuring that taxpayer funds are used to deliver high-
value services.
OIG found that billions of estimated Medicare Advantage (MA) risk-adjusted payments supported solely
through health risk assessments (HRAs) raise concerns about the completeness of payment data.
Diagnoses that MA organizations only reported on HRAs—and on no other encounter records in 2016—
resulted in an estimated $2.6 billion in risk-adjusted payments for 2017. In addition, in-home HRAs
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Department of Health and Human Services, Office of Inspector General
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generated 80 percent of these estimated payments. Most in home HRAs were conducted by companies
that partner with or are hired by MA organizations to conduct these assessments—and therefore are not
likely conducted by the beneficiary’s own primary care provider. Twenty MA organizations generated
millions in payments from in-home HRAs for beneficiaries for whom there was not a single record of any
other service being provided in 2016. CMS concurred with two of our five recommendations. (See report
OEI-03-17-00471.)
OIG found that total Medicare Part B spending for laboratory tests increased to $7.6 billion in 2018, despite
lower payment rates for most laboratory tests. Congress mandated that OIG monitor Medicare payments
for laboratory tests and the implementation and effect of the new payment system for those tests. CMS
neither concurred nor nonconcurred with our recommendation to seek legislative authority to establish a
mechanism to control costs for automated chemistry tests. (See report OEI-09-19-00100.)
OIG found that Medicare contractors were not consistent in how they reviewed extrapolated
overpayments in the provider appeals process. OIG found that although Medicare administrative
contractors (MACs) and qualified independent contractors (QICs) generally reviewed appealed
extrapolated overpayments in a manner that conforms with existing CMS requirements, CMS did not
always provide sufficient guidance and oversight to ensure that these reviews were performed in a
consistent manner. In addition, CMS’s ability to provide oversight over the extrapolation review process
was limited because of data reliability issues in the Medicare Appeals System (MAS). Improving the
accuracy of the information in the MAS would potentially assist CMS with ensuring that extrapolated
overpayments are reviewed by the MACs and QICs in a consistent manner. CMS concurred with our
recommendations. (See report A-05-18-00024.)
A provider entered into a 5-year Recipient Compliance Agreement (RCA) with OIG. The RCA is OIG’s first
compliance agreement with an HHS grantee and contains a number of unique provisions, including
requirements for the provider, Brooklyn Plaza Medical Center (BPMC) to hire an Independent Review
Organization to conduct a random review of BPMC’s drawdowns from the HHS Payment Management
System. This review is to ensure that the drawdowns complied with HHS grant regulations and were based
on allowable costs; that the provider hired a Compliance Expert to advise BPMC about its compliance
program, financial management system, and internal controls; and that BPMC management make a
number of annual certifications about BPMC’s financial management system and internal controls.
Reducing Improper Payments for Health Care
OIG’s oversight is paramount to ensuring that HHS beneficiaries and the American public get the true
benefit of the substantial financial investment in HHS programs.
OIG found hospitals overbilled Medicare $1 billion by incorrectly assigning severe malnutrition diagnosis
codes to inpatient hospital claims. Hospitals correctly billed Medicare for severe malnutrition diagnosis
codes for 27 of the 200 claims that we reviewed. However, hospitals did not correctly bill Medicare for the
remaining 173 claims. CMS concurred with our recommendations. (See report A-03-17-00010.)
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Department of Health and Human Services, Office of Inspector General
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OIG found that CMS could have saved $192 million by targeting home health claims for review.
Specifically, we found that not all payments to home health agencies (HHAs) for home health services with
five to seven visits in a payment episode complied with Medicare requirements. Based on our sample
results, we estimated that Medicare overpaid HHAs nationwide $192 million for our audit period. These
improper payments occurred because the MACs did not analyze claim data or perform risk assessments to
target claims with visits slightly above the Low Utilization Payment Adjustment threshold of four visits for
additional review. CMS concurred with our recommendations. (See report A-09-18-03031.)
OIG found that North Carolina and Iowa improperly claimed Medicaid health home expenditures and
inadequately monitored its providers. North Carolina did not claim Federal Medicaid reimbursement for
health home expenditures in accordance with Federal and State requirements. Instead, it improperly
claimed $124.6 million in Primary Care Case Management (PCCM) expenditures, which should have been
reimbursed at the regular Federal medical assistance percentage. Iowa improperly claimed Federal
Medicaid reimbursement for payments made to health home providers that did not comply with Federal
and State requirements. These improper payments primarily involved deficiencies in documentation.
Based on our sample results, we estimated that Iowa improperly claimed at least $37.1 million in Federal
Medicaid reimbursement for payments made to health home providers. North Carolina and concurred
with our recommendations; Iowa concurred with the majority of our recommendations, with the exception
of our recommendation that it refund $37.1 million to the Federal Government. (See reports A-04-18-
00120, A-07-18-04109.)
OIG found that inadequate edits and oversight caused Medicare to overpay more than $267 million for
hospital inpatient claims with post-acute-care transfers to home health services. Medicare improperly paid
most inpatient claims subject to its transfer policy when beneficiaries resumed home health services within
3 days of discharge but hospitals failed to code the inpatient claim as a discharge to home with home
health services or when the hospitals applied condition codes. Based on our sample results, we estimated
that Medicare improperly paid $267 million during a 2-year period for hospital services that should have
been paid a graduated per diem payment. CMS concurred with our recommendations. (See report A-04-
18-04067.)
OIG found that Texas relied on impermissible provider-related donations to fund the State share of the
Medicaid Delivery System Reform Incentive Payment Program (DSRIP). Of the $189.3 million in funds that
Texas used as the State share of DSRIP payments, $146.6 million was funded through impermissible
provider-related donations that did not meet Federal requirements. Those funds were derived from
impermissible provider-related donations because the providers made donations that benefited the
intergovernmental transfer (IGT) entity, the funds the IGT entity transferred resulted from those donations,
and the providers’ donations were part of a hold-harmless practice. Texas did not decrease its Medicaid
expenditures by the $146.6 million as required under Federal requirements. As a result, Texas
inappropriately received $83.8 million in Federal funds. Texas did not concur with two recommendations
but concurred with our remaining recommendation. (See report A-06-17-09002.)
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Department of Health and Human Services, Office of Inspector General
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OIG found that most Indian Health Service (IHS) Purchased/Referred Care (PRC) program claims were not
reviewed, approved, and paid in accordance with Federal requirements. Through the PRC program, IHS
pays for private providers to deliver health care services unavailable through the IHS network. Based on
our sample results, we estimated that 658,025 of the 802,470 total claims were not paid in accordance with
Federal requirements. IHS concurred with our recommendations. (See report A-03-16-03002.)
Ensuring That HHS Programs and Patients Do Not Overpay for Prescription Drugs
OIG continues to prioritize efforts to lower drug spending for HHS programs and its beneficiaries.
OIG found that a loophole in a Part B drug payment rule continues to cost Medicare and beneficiaries
hundreds of millions of dollars. As of December 2019, CMS continued to include noncovered, self-
administered versions when calculating Part B payment amounts for Orencia and Cimzia, the same two
drugs identified in an earlier OIG report from 2017. OIG determined that Part B spending for Orencia and
Cimzia would have been reduced by $497 million (22 percent of expenditures for the two drugs) in 2017
and 2018 if their payment amounts had been set using only the physician-administered versions.
Consistent with its response to the earlier recommendation, CMS did not concur with our recommendation
to seek a legislative change requiring that noncovered, self-administered versions be excluded in the
calculation of Part B payment amounts. (See report OEI-BL-20-00100.)
OIG found that Michigan did not fully comply with Federal Medicaid requirements for billing
manufacturers for rebates for drugs dispensed to enrollees of Medicaid managed-care organizations.
Michigan concurred with our recommendation that it bill for and collect manufacturers’ rebates for
pharmacy drugs and for single-source and top-20 multiple-source physician-administered drugs that we
calculated to be at least $30 million (Federal share) and to refund the Federal Government. (See report
A-05-17-00017.)
A pharmaceutical company entered into two settlements totaling $642 million to resolve allegations that it
violated the False Claims Act. The first settlement pertains to the company, Novartis Pharmaceuticals,
alleged illegal use of three foundations as conduits to pay the copayments of Medicare patients taking two
of Novartis’s drugs. The second settlement resolves claims arising from the company’s alleged payments
of kickbacks to doctors.
Combating Cybersecurity Threats Within HHS and Health Care
OIG’s oversight of HHS agencies’ and programs’ cybersecurity is vital in ensuring that HHS has necessary
capabilities to protect and ensure the integrity of its systems and data assets.
OIG identified opportunities where HHS can strengthen its overall IT security program. OIG found that
HHS made progress in improving its overall cybersecurity posture, but certain weaknesses persist and pose
challenges. OIG found weaknesses in each of the following IG Federal Information Security Modernization
Act of 2014 (FISMA) domains: risk management, configuration management, identity and access
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Department of Health and Human Services, Office of Inspector General
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management, data protection and privacy, security training, information security continuous monitoring,
incident response, and contingency planning. HHS agreed with our recommendations to strengthen its
cybersecurity program and enhance security controls at HHS. (See report A-18-19-11200.)
OIG identified cybersecurity vulnerabilities and possible compromise of HHS’s systems and networks.
Because of the current public health emergency and increased cyberactivity, we are only providing the title
of our cybersecurity audits. (See reports A-18-17-04002, A-18-18-04005, A-18-18-08400.)
Proposed Rule on Information Blocking and Grant Fraud
OIG issued a notice of proposed rulemaking (NPRM) regarding its new authorities under the 21st Century
Cures Act. The NPRM discusses OIG’s new authorities permitting the imposition of sanctions for
fraudulent conduct related to HHS grants, contracts, or other agreements, and the investigation of
information blocking. The NPRM also sets forth OIG’s expected information blocking enforcement
approach and priorities. The NPRM proposes modifying OIG’s CMP regulations in accordance with the
Bipartisan Budget Act of 2018. OIG will provide an update in a future SAR when OIG issues the Final Rule.
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Department of Health and Human Services, Office of Inspector General
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OIG Participation in Congressional Hearings
Date Witness Testimony/Committee
5/26/2020 Christi Grimm, Principal Deputy “Oversight Related to Coronavirus Response
Inspector General, Office of Efforts,” U.S. House Committee on Oversight and
Inspector General Reform
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Department of Health and Human Services, Office of Inspector General
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Selected Acronyms and Abbreviations
ACA Patient Protection and Affordable Care Act
ACF Administration for Children and Families
ACL Administration for Community Living
CDC Centers for Disease Control and Prevention
CIA corporate integrity agreement
CMP civil monetary penalty
CMS Centers for Medicare & Medicaid Services
CCDF Child Care and Development Fund
DHS Department of Homeland Security
DOJ Department of Justice
DME durable medical equipment
EMTALA Emergency Medical Treatment and Labor Act
FDA Food and Drug Administration
FY fiscal year
GAO Government Accountability Office
HHS Department of Health and Human Services
HIPAA Health Insurance Portability and Accountability Act of 1996
HRSA Health Resources and Services Administration
IHS Indian Health Service
LIHEAP Low-Income Home Energy Assistance Program
MCO managed care organization
MFCU Medicaid Fraud Control Unit
NIH National Institutes of Health
OAS Office of Audit Services
OCIG Office of Counsel to the Inspector General
OEI Office of Evaluation and Inspections
OI Office of Investigations
OIG Office of Inspector General
OMB Office of Management and Budget
SAMHSA Substance Abuse and Mental Health Services Administration
SNF skilled nursing facility
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Department of Health and Human Services, Office of Inspector General
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Medicare and Medicaid Reports and Reviews
Medicare Program Reports and Reviews
Financial Management and Improper Payments
An Estimated 87 Percent of Inpatient Psychiatric Facility Claims With Outlier Payments Did Not Meet
Medicare’s Medical Necessity or Documentation Requirements (A-01-16-00508), April 2020
For our 160 sampled claims, we found that CMS paid 25 claims that did not meet Medicare medical
necessity requirements for some or all days of the stay. Based on our sample results, we estimated
that Medicare overpaid inpatient psychiatric facilities (IPFs) $93 million for FYs 2014 and 2015 for
stays that were noncovered or partially noncovered and resulted in outlier payments. In addition,
142 claims had missing or inadequate medical record elements, including physician certifications.
We estimated that 87 percent of IPF claims for FYs 2014 and 2015 with outlier payments did not
meet Medicare medical necessity or medical record requirements.
We identified three additional areas of concern: (1) outlier payments may have been made for stays
that were not unusually costly, (2) beneficiaries used lifetime reserve days to help pay for days they
no longer required inpatient hospitalization but for the unavailability of appropriate
posthospitalization placements, and (3) CMS did not track patient falls or fall rates at IPFs.
CMS concurred with our recommendations to: (1) increase postpayment reviews to provide more
feedback to IPFs, (2) promulgate regulations on the patient’s right to make informed decisions
regarding care, (3) study the accuracy of the outlier payment methodology, and (4) consider
tracking patient falls or fall rates. CMS did not concur with our recommendations to: (1) research
whether physician certification requirements are useful in preventing inappropriate payments, (2)
require certifications to be in a specific format, and (3) study the lifetime reserve day issue.
Medicare Made $11.7 Million in Overpayments for Nonphysician Outpatient Services Provided Shortly
Before or During Inpatient Stays (A-01-17-00508), May 2020
Medicare made incorrect payments to outpatient providers for 40,984 nonphysician outpatient
services provided nationwide within 3 days before the date of admission, on the date of admission,
or during Inpatient Prospective Payment System stays (excluding date of discharge) that we
reviewed. These incorrect payments occurred because the Common Working File (CWF) edits were
not designed to identify all potentially incorrect claims.
As a result, Medicare made $11.7 million in incorrect payments to hospital outpatient providers
during 2016 and 2017. This includes claims beyond the 4-year reopening period. In addition,
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Department of Health and Human Services, Office of Inspector General
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beneficiaries incurred $2.7 million in coinsurance and deductible liabilities related to these incorrect
payments.
CMS concurred with our recommendation that it ensure that all necessary information is included
in the CWF edits to accurately identify and prevent incorrect payments for nonphysician outpatient
services. CMS also concurred with our recommendations that it direct the Medicare contractors to:
(1) recover the portion of $11.7 million in identified overpayments resulting from the incorrectly
billed services; (2) instruct outpatient providers to refund the portion of the $2.8 million in
deductible and coinsurance amounts that may have been incorrectly collected; (3) notify providers
so that they can exercise reasonable diligence to identify, report, and return any overpayments in
accordance with the 60-day rule and identify any of those returned overpayments as having been
made; and (4) educate outpatient providers on how to correctly bill nonphysician outpatient
services.
Hospitals Overbilled Medicare $1 Billion by Incorrectly Assigning Severe Malnutrition Diagnosis Codes
to Inpatient Hospital Claims (A-03-17-00010), July 2020
Hospitals correctly billed Medicare for severe malnutrition diagnosis codes for 27 of the 200 claims
that we reviewed. However, hospitals did not correctly bill Medicare for the remaining 173 claims.
For nine of these claims, the medical record documentation supported a secondary diagnosis code
other than a severe malnutrition diagnosis code, but the error did not change the DRG or payment.
For the remaining 164 claims, hospitals used severe malnutrition diagnosis codes when they should
have used codes for other forms of malnutrition or no malnutrition diagnosis code at all, resulting
in net overpayments of $914,128. On the basis of our sample results, we estimated that hospitals
received overpayments of $1 billion for FYs 2016 and 2017.
CMS concurred with our recommendations, including that it collect the portion of the $914,128 for
the incorrectly billed hospital claims that are within the reopening period and, based on the results
of this audit, notify appropriate providers so that the providers can exercise reasonable diligence to
identify, report, and return any overpayments in accordance with the 60-day rule. To attempt
recovery of the overpayment, which we estimate to be valued at $1 billion, resulting from
incorrectly billed hospital claims paid during our audit period and to ensure that claims made after
our audit period are correct, we made additional recommendations. One of the additional
recommendations includes reviewing all claims that were not part of our sample but were within
the reopening period.
CMS Could Have Saved $192 Million by Targeting Home Health Claims for Review With Visits Slightly
Above the Threshold That Triggers a Higher Medicare Payment (A-09-18-03031), July 2020
Not all payments to home health agencies (HHAs) for home health services with five to seven visits
in a payment episode complied with Medicare requirements. Of the 120 sampled claims we
reviewed, 91 complied with requirements, and for 4 claims there was no documentation available
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Department of Health and Human Services, Office of Inspector General
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to make a compliance determination. However, the remaining 25 claims did not comply with
requirements. As a result, Medicare improperly paid HHAs for a portion of the payment episode
(14 claims) and for the full payment episode (11 claims), totaling $41,613. These improper payments
occurred because the Medicare administrative contractors (MACs) did not analyze claim data or
perform risk assessments to target claims with visits slightly above the Low Utilization Payment
Adjustment (LUPA) threshold of four visits for additional review. On the basis of our sample
results, we estimated that Medicare overpaid HHAs nationwide $191.8 million for our audit period.
CMS concurred with our recommendations that it: (1) direct the MACs to recover the $41,613 in
identified overpayments made to HHAs for the sampled claims, (2) require the MACs to perform
data analysis and risk assessments of claims with visits slightly above the applicable LUPA threshold
and target these claims for additional review, and (3) instruct the MACs to educate HHA providers
on properly billing for home health services with visits slightly above the applicable LUPA
threshold, which could have saved Medicare as much as $191.8 million during our audit period.
Inadequate Edits and Oversight Caused Medicare To Overpay More Than $267 Million for Hospital
Inpatient Claims With Post-Acute-Care Transfers to Home Health Services (A-04-18-04067), August
2020
Medicare improperly paid most inpatient claims subject to its transfer policy when beneficiaries
resumed home health services within 3 days of discharge, but hospitals failed to code the inpatient
claim as a discharge to home with home health services or when the hospitals applied condition
codes 42 (home health not related to inpatient stay) or 43 (home health not within 3 days of
discharge). Based on our sample results, we estimated that Medicare improperly paid $267 million
during a 2-year period for hospital services that should have been paid a graduated per diem
payment.
CMS concurred with our recommendations that it direct its Medicare contractors to: (1) recover a
portion of the $722,288 in overpayments identified in our sample, (2) reprocess the remaining
inpatient claims in our sample with an incorrect patient discharge status code or condition code 43
to recover a portion of the estimated $225.7 million in overpayments, and (3) analyze the
remaining inpatient claims in our sample with condition code 42 and recover a portion of the
estimated $40.6 million in potential overpayments. Also, CMS agreed to correct its related system
edits, improve its provider education regarding the Medicare transfer policy, and use data analytics
to identify hospitals disproportionally using condition code 42. CMS did not concur with our
recommendation that it consider taking the necessary actions to deem any home health service
within 3 days of discharge to be “related.”
Medicare Laboratory Test Expenditures Increased in 2018, Despite New Rate Reductions (OEI-09-19-
00100), August 2020
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2020, through September 30, 2020
Total Medicare Part B spending for laboratory tests increased to $7.6 billion in 2018, despite lower
payment rates for most laboratory tests. The $459 million spending increase was driven by: (1)
increased spending on genetic tests, (2) the end of the discount for certain chemistry tests, and (3)
the move to a single national fee schedule.
Congress mandated that the Office of Inspector General monitor Medicare payments for
laboratory tests and the implementation and effect of the new payment system for those tests.
This report also provides the fifth annual analysis of the top 25 laboratory tests by Medicare
spending.
Our recommendation was for CMS to seek legislative authority to establish a mechanism to control
costs for automated chemistry tests. CMS neither concurred nor nonconcurred with our
recommendation.
Billions in Estimated Medicare Advantage Payments From Diagnoses Reported Only on Health Risk
Assessments Raise Concerns (OEI-03-17-00471), September 2020
Billions of estimated Medicare Advantage (MA) risk-adjusted payments supported solely through
health risk assessments (HRAs) raise concerns about the completeness of payment data submitted
to CMS, the validity of diagnoses on HRAs, and the quality of care coordination for beneficiaries.
Diagnoses that MA organizations reported only on HRAs—and on no other encounter records in
2016—resulted in an estimated $2.6 billion in risk-adjusted payments for 2017. In addition,
in-home HRAs generated 80 percent of these estimated payments. Most in home HRAs were
conducted by companies that partner with or are hired by MA organizations to conduct these
assessments—and therefore are not likely conducted by the beneficiary’s own primary care
provider. Twenty MA organizations generated millions in payments from in-home HRAs for
beneficiaries for whom there was not a single record of any other service being provided in 2016.
CMS concurred with the second and third of our five recommendations, which were to:
• require MA organizations to implement best practices to ensure care coordination for
HRAs,
• provide targeted oversight of the 10 parent organizations that drove most of the
risk-adjusted payments resulting from in-home HRAs,
• provide targeted oversight of the 20 MA organizations that drove risk-adjusted payments
resulting from in-home HRAs for beneficiaries who had no other service records in the 2016
encounter data,
• reassess the risks and benefits of allowing in-home HRAs to be used as sources of
diagnoses for risk adjustment and reconsider excluding such diagnoses from risk
adjustment, and
• require MA organizations to flag any MA organization-initiated HRAs in their MA encounter
data.
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Department of Health and Human Services, Office of Inspector General
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Medicare-Allowed Charges for Noninvasive Ventilators Are Substantially Higher Than Payment Rates
of Select Non-Medicare Payers (A-05-20-00008), September 2020
For calendar years (CYs) 2016 through 2018, we estimated that Medicare and beneficiaries could
have saved $86.6 million if Medicare-allowed charges were comparable with payment rates of
select non-Medicare payers on Healthcare Common Procedure Coding System (HCPCS) code
E0466. Of this payment difference, we estimated that Medicare paid $69.3 million and that
Medicare beneficiaries paid $17.3 million. Generally, Medicare-allowed charges are higher than
select non-Medicare payer payment rates because CMS does not routinely evaluate pricing trends
for noninvasive ventilators or payment rates of select non-Medicare payers. In 2016, CMS was
required to adjust certain fee schedule amounts for durable medical equipment, prosthetics,
orthotics, and supplies using information from the competitive bidding program. But this change
did not affect the noninvasive ventilator HCPCS code reviewed for this report.
We recommended that CMS review Medicare-allowed charges for noninvasive ventilators HCPCS
code E0466, for which Medicare and beneficiaries could have potentially saved an estimated $86.6
million in CYs 2016 through 2018, and add noninvasive ventilators HCPCS code E0466 to the
competitive bidding program as soon as practicable. CMS confirmed that it had been evaluating
noninvasive ventilators for potential inclusion in the competitive bidding program. CMS also
confirmed that noninvasive ventilators had initially been included in Round 2021 of the program.
However, the product category was removed because of the COVID-19 pandemic.
Incorrect Acute Stroke Diagnosis Codes Submitted by Traditional Medicare Providers Resulted in
Millions of Dollars in Increased Payments to Medicare Advantage Organizations (A-07-17-01176),
September 2020
Almost all of the selected acute stroke diagnosis codes that physicians submitted to CMS under
traditional Medicare and that CMS later used to make payments to MA organizations for 2015 or
2016 on behalf of the 582 transferred enrollees did not comply with Federal requirements. For 580
of the transferred enrollees, the medical records did not support the acute stroke diagnosis codes.
Thus, the Ischemic or Unspecified Stroke Hierarchical Condition Categories were not validated.
These errors originated from physicians submitting incorrect acute stroke diagnosis codes on
claims billed under traditional Medicare. However, these errors were unnoticed and caused
inaccurate payments in MA because CMS did not have policies and procedures to: (1) identify
beneficiaries who transferred from traditional Medicare to MA and (2) evaluate whether the acute
stroke diagnosis codes submitted under traditional Medicare on their behalf complied with Federal
requirements. As a result, we estimated that CMS made inaccurate payments of just over $14.4
million to MA organizations.
CMS concurred with our recommendations that it: (1) educate physicians on how to correctly
submit acute stroke diagnosis codes and how these diagnosis codes may impact the MA program,
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and (2) develop and implement policies and procedures to identify beneficiaries transferring from
traditional Medicare to MA and evaluate whether the acute stroke diagnosis codes submitted
under traditional Medicare comply with Federal requirements.
Quality of Care, Safety, and Access
States Continued To Fall Short in Meeting Required Timeframes for Investigating Nursing Home
Complaints: 2016–2018 (OEI-01-19-00421), September 2020
Many States consistently fail to meet required timeframes for investigating the most serious
nursing home complaints. Furthermore, nearly all States that fell short in a timely investigation of
the most serious nursing home complaints from 2011 through 2015 continued to fall short from
2016 through 2018. Generally, we found that the States that we communicated with face
challenges with receiving a high volume of complaints, triaging complaints, and having adequate
human resources to investigate complaints. Our findings raise questions about some States’ ability
to address serious nursing home complaints and about the effectiveness of CMS’s oversight of
States. CMS concurred with both of our recommendations, which were to:
• ensure that all States receive training on CMS’s updated triage guidance and
• identify new approaches to address those States that are consistently failing to meet
required timeframes for investigating the most serious nursing home complaints.
Medicare Part D Beneficiaries at Serious Risk of Opioid Misuse or Overdose: A Closer Look (OEI-02-
19-00130), May 2020
Most Part D beneficiaries at serious risk of opioid misuse or overdose in 2017 received high
amounts of opioids the following year, while 11 percent had an overdose or adverse effect from an
opioid in 2017 or 2018, and about half have been diagnosed with opioid use disorder or other
conditions related to the misuse of opioids. Only 7 percent of those who were diagnosed with
opioid use disorder received drugs for medication-assisted treatment (MAT drugs) through Part D,
possibly because of challenges that beneficiaries have in accessing prescribers. Although opioids
can be appropriate under certain circumstances, steps should be taken to mitigate the risk of
misuse and overdose, especially when beneficiaries receive high amounts of opioids for long
periods of time.
CMS concurred with our recommendation to educate Part D beneficiaries and providers about
access to MAT drugs and naloxone.
Toolkit for Calculating Opioid Levels and Identifying Patients at Risk of Misuse or Overdose: R and
SQL Programming Code (OEI-02-17-00561), May 2020
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2020, through September 30, 2020
This toolkit provides detailed steps for using prescription drug claims data to analyze patients’
opioid levels and identify certain patients who are at risk of opioid misuse or overdose. The toolkit
includes R and Structured Query Language (SQL) programming code. It is a companion to the
previously released Office of Inspector General (OIG) Toolkit: Using Data Analysis To Calculate
Opioid Levels and Identify Patients at Risk of Misuse or Overdose, which includes SAS
programming code. This toolkit is based on the methodology that OIG developed for its extensive
work on opioid use in Medicare Part D. It is intended to assist our partners, such as Medicare
Part D plan sponsors, private health plans, and State Medicaid Fraud Control Units, with analyzing
their own prescription drug claims data to help combat the opioid crisis.
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles: 2020 (OEI-05-20-00190),
June 2020
We found that overall, the rate at which Part D plan formularies include the drugs commonly used
by dual eligibles (i.e., individuals who are eligible for both Medicare and Medicaid) is high, with
some variation. The 448 unique formularies used by the 4,610 Part D plans include 97 percent of
the 195 drugs most commonly used by dual eligibles and covered by Part D. In addition,
75 percent of the commonly used drugs are included by all Part D plan formularies. On average,
formularies applied utilization management tools to 29 percent of the unique drugs we reviewed
in 2020.
Because some variation exists in formularies’ inclusion of these drugs and in their application of
utilization management tools to the drugs, some dual eligibles may need to use alternative
methods to access the drugs they take. This report did not make recommendations.
Some Nursing Homes’ Reported Staffing Levels in 2018 Raise Concerns; Consumer Transparency
Could Be Increased (OEI-04-18-00450), August 2020
Nursing homes’ reported staffing levels often vary on a day-to-day basis, and 7 percent fell below
required Federal staffing levels on at least 30 total days in 2018. CMS’s Star Rating System ranks
nursing homes on their average staffing levels each quarter; as a result, daily staffing variations are
not transparent to consumers. This review, initiated before the COVID-19 pandemic emerged,
focuses on staffing data from 2018. However, the 2020 pandemic reinforces the importance of
adequate staffing for nursing homes, as inadequate staffing can make it more difficult for nursing
homes to respond to infectious disease outbreaks like COVID-19.
Our recommendations were that CMS should:
• enhance efforts to ensure that nursing homes meet daily staffing requirements and
• explore ways to provide consumers with additional information on nursing homes’ daily
staffing levels and variability.
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2020, through September 30, 2020
CMS did not agree or disagree with either of our recommendations.
Opioid Use in Medicare Part D Continued To Decline in 2019, but Vigilance Is Needed as COVID-19
Raises New Concerns (OEI-02-20-00320), August 2020
Medicare Part D has seen a steady decline in opioid use over the past several years and an
increased use of MAT drugs. About one in four Part D beneficiaries received opioids in 2019, a
decrease from the prior 3 years. At the same time, the number of beneficiaries receiving
MAT drugs for opioid use disorder increased to 209,000 in 2019. Also, the number of beneficiaries
receiving through Part D prescriptions for naloxone has continued to grow. Nearly 267,000
beneficiaries received high amounts of opioids in 2019, with almost 34,000 beneficiaries at serious
risk of opioid misuse or overdose. About 140 prescribers ordered opioids for large numbers
beneficiaries at serious risk.
The changes in recent years in opioid use and MAT show progress from the efforts of HHS and
others to address the opioid crisis. Nonetheless, it is critical to remain vigilant. The COVID-19
pandemic poses additional danger for this population.
OIG is committed to continuing our work on opioid use and access to treatment. Likewise, we
encourage CMS to also closely monitor opioid use and access to treatment.
CMS’s Monitoring Activities for Ensuring That Medicare Accountable Care Organizations Report
Complete and Accurate Data on Quality Measures Were Generally Effective, but There Were
Weaknesses That Could Be Improved (A-09-18-03033), September 2020
CMS’s monitoring activities were generally effective for ensuring that Medicare Accountable Care
Organizations (ACOs) report complete and accurate data on quality measures through claim and
administrative data and the CMS web portal. However, we identified weaknesses in CMS’s
monitoring activities that could lead to ACOs reporting incomplete or inaccurate data through the
patient survey. Specifically, CMS did not ensure that its contractor: (1) verified survey vendors'
correction of identified issues even though the issues were directly related to the collection or
reporting of data and (2) provided feedback reports in time for survey vendors to include in their
Quality Assurance Plans all of the changes implemented to address identified issues. In addition,
CMS did not ensure that its contractor reviewed survey instruments (e.g., mail survey packages)
translated into other languages. As a result of these weaknesses, ACOs may not report complete
and accurate data on quality measures, which could affect the ACOs’ overall quality performance
scores and ultimately the shared savings payments.
To improve its monitoring activities for ensuring that ACOs report complete and accurate data on
quality measures, we recommend that CMS update the Statement of Work to require its contractor
to: (1) verify that survey vendors have corrected identified issues that directly relate to the collection
or reporting of data; (2) confirm that all implemented changes to address the identified issues are
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included in Quality Assurance Plans before they are approved; and (3) review the translated survey
templates, mail survey packages, and telephone survey scripts to ensure that they are consistent
with the English versions. CMS concurred with our recommendations.
Program Integrity
2019 Performance Data for the Senior Medicare Patrol Projects (OEI-02-20-00150), June 2020
The Senior Medicare Patrol (SMP) projects receive grants from the Administration for Community
Living to recruit and train retired professionals and other older adults and community members to
prevent, recognize, and report health care fraud, errors, and abuse. In 2019, the 54 SMP projects
had a total of 6,875 total active team members who conducted a total of 28,146 group outreach
and education events, reaching an estimated 1.6 million people. In addition, the projects had
320,590 individual interactions with, or on the behalf of, a Medicare beneficiary. The projects
reported $2.4 million in expected Medicare recoveries. Cost avoidance totaled $60,971, while
savings to beneficiaries and others totaled $20,150.
CMS's Encounter Data Lacks Essential Information That Medicare Advantage Organizations Have the
Ability to Collect (OEI-03-19-00430), August 2020
Encounter data from Medicare Advantage Organizations (MAOs) continue to lack NPIs for
providers who order and/or refer durable medical equipment, prosthetics, orthotics, and supplies
(DMEPOS); clinical laboratory services; imaging services; and home health services. However,
almost all MAOs have data systems that are able to receive and store these NPIs when providers
submit them. Additionally, a substantial portion of MAOs reported that providers are already
submitting the ordering provider NPIs on claims or encounter records for DMEPOS, laboratory
services, and imaging services. Further, a majority of MAOs require NPIs to be submitted for their
other lines of business. Finally, almost half of MAOs believe that NPIs for ordering providers are
critical for combating fraud.
CMS concurred with our first recommendation but did not concur with our second
recommendation. Our recommendations were to:
• require MAOs to submit the ordering provider NPI on encounter records for DMEPOS and
for laboratory, imaging, and home health services; and
• establish and implement “reject edits” that: (1) reject encounter records in which the
ordering provider NPI is not present when required and (2) reject encounter records that
contain an ordering provider NPI that is not a valid and active NPI in the National Plan and
Provider Enumeration System registry.
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CMS Generally Met Requirements for the DMEPOS Competitive Bidding Program Round 1 Recompete
(A-05-16-00051), August 2020
We reviewed the process used by CMS to conduct the competitive bidding and subsequent pricing
determinations that are the basis for bid amounts and single-payment amounts (SPAs) of the
Round 1 Recompete phase of the DMEPOS Competitive Bidding Program (the Program).
CMS consistently followed its established Program procedures and applicable Federal requirements
for 219 of the 225 winning suppliers associated with the sampled SPAs reviewed. Although the
overall effect on Medicare payments to suppliers was relatively small, CMS did not consistently
follow its established procedures and applicable Federal requirements for selecting suppliers
during the bid process for 6 of the 225 winning suppliers. Additionally, CMS did not monitor
suppliers in accordance with established procedures and Federal requirements for another seven
suppliers that did not maintain the applicable license, as required by their contracts, for the first
6 months of 2014.
On the basis of our sample, we estimated that CMS paid suppliers $24,054 more than they would
have received without any errors, or less than 0.03 percent of the $73 million paid under the
Round 1 Recompete during the first 6 months of 2014.
CMS concurred with our recommendations that it: (1) follow its established Program procedures
and applicable Federal requirements consistently in evaluating the financial documents of all
suppliers; (2) ensure that suppliers have the applicable licenses for the specific competitions in
which they are submitting a bid by continuing to work with State licensing boards, as
recommended in our previous report; and (3) ensure that it has a system to monitor supplier
licensure requirements and identify potentially unlicensed suppliers.
Medicare Contractors Were Not Consistent in How They Reviewed Extrapolated Overpayments in the
Provider Appeals Process (A-05-18-00024), August 2020
Although MACs and qualified independent contractors (QICs) generally reviewed appealed
extrapolated overpayments in a manner that conforms with existing CMS requirements, CMS did
not always provide sufficient guidance and oversight to ensure that these reviews were performed
in a consistent manner. In addition, CMS’s ability to provide oversight over the extrapolation
review process was limited because of data reliability issues in the Medicare Appeals System (MAS).
Improving the accuracy of the information in the MAS would potentially assist CMS with ensuring
that extrapolated overpayments are reviewed by the MACs and QICs in a consistent manner.
CMS concurred with our recommendations that it: (1) provide additional guidance to contractors to
ensure reasonable consistency in procedures used to review extrapolated overpayments during the
first two levels of the Medicare Parts A and B appeals process; (2) take steps to identify and resolve
discrepancies in the procedures contractors use to review extrapolations during the appeals
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process; (3) provide guidance regarding the organization of extrapolation-related files that must be
submitted in response to a provider appeal; (4) improve system controls to reduce the risk of
contractors incorrectly marking the extrapolation flag field in the MAS; and (5) update the
information in the MAS to accurately reflect extrapolation amounts challenged as part of an
appeal, whether the extrapolation was reviewed by a contractor, and the outcome of any
extrapolation review.
Drug Pricing and Reimbursement
Loophole in Drug Payment Rule Continues To Cost Medicare and Beneficiaries Hundreds of Millions
of Dollars (OEI-BL-20-00100), July 2020
As of December 2019, CMS continued to include noncovered, self-administered versions when
calculating Part B payment amounts for Orencia and Cimzia, the same two drugs identified in an
earlier OIG report from 2017. Part B spending for Orencia and Cimzia would have been reduced by
$497 million (22 percent of expenditures for the two drugs) in 2017 and 2018 if their payment
amounts had been set using only the physician-administered versions (i.e., if the self-administered
versions had not been used in determining payment). Twenty percent ($99.5 million) of the total
savings would have come directly through reduced coinsurance owed by Medicare beneficiaries.
Further, OIG found that physicians almost never administered the self-injected versions of Orencia
to patients in their offices, and that the payment loophole may give physicians substantial
incentives to administer Orencia and Cimzia instead of other drugs for the same conditions. As
recommended in our previous study, OIG continues to believe that CMS should seek a legislative
change requiring that noncovered, self-administered versions be excluded in the calculation of Part
B payment amounts. Consistent with its response to the earlier recommendation, CMS did not
concur.
Medicare Part B Drug Payments: Impact of Price Substitutions Based on 2018 Average Sales Prices
(OEI-03-20-00130), August 2020
On the basis of 2018 data, CMS lowered Medicare Part B reimbursement for 16 drugs, saving
Medicare and its beneficiaries $4.4 million over 1 year. This finding highlights the success of OIG’s
mandated quarterly comparisons of average sales prices (ASPs) with average manufacturer prices
(AMPs) and implementation of CMS’s current price-substitution policy. If OIG finds that the ASP
for a drug exceeds the AMP by a certain percentage—currently 5 percent—the ASP-based
payment amount is substituted with a lower calculated rate. This serves as a mechanism for
monitoring market prices and limiting potentially excessive payment amounts. OIG continues to
recommend that CMS expand the price-substitution criteria. CMS did not concur with this
recommendation and stated that more experience with the price substitution policy is needed
before it can be expanded.
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Some Drug Manufacturers Reported Inaccurate Product Data to CMS (OEI-03-19-00200), September
2020
Manufacturers reported inaccurate drug product data for 14 percent of the national drug codes we
reviewed that were associated with Medicare Part B-covered drugs. (Such drugs are generally
those that are injected or infused in physicians’ offices or hospital outpatient settings.) If
manufacturer-reported product data are incorrect, Medicare may make inaccurate payments for
drugs and Medicaid may collect inaccurate rebates from manufacturers. CMS did not explicitly
state whether it concurred or nonconcurred with our recommendation that it should work with
manufacturers associated with errors to correct and resubmit accurate product data.
Medicaid Program Reports and Reviews
Financial Management and Improper Payments
North Carolina Received $30 Million in Excess Federal Funds Related to Improperly Claimed Health
Home Expenditures (A-04-18-00120), April 2020
North Carolina did not claim Federal Medicaid reimbursement for health home expenditures in
accordance with Federal and State requirements. Instead, it improperly claimed $124.6 million in
Primary Care Case Management (PCCM) expenditures, which should have been reimbursed at the
regular Federal medical assistance percentage (FMAP) ($81.5 million Federal share), as health home
expenditures, which were reimbursed at the enhanced FMAP ($112.2 million Federal share).
North Carolina did not claim any health home expenditures before or after the enhanced FMAP
period for Federal FYs 2012 and 2013. Of the 2,999 payments associated with 100 beneficiaries in
our stratified random sample, none met all of the requirements for payment identified in
North Carolina’s approved State plan amendment for health home services. North Carolina
claimed PCCM expenditures as health home expenditures because it did not take certain steps to
ensure implementation of the health home option and did not implement internal controls needed
to ensure compliance. As a result, North Carolina received $30.7 million in excess Federal funds.
North Carolina concurred with our recommendations that it reclassify $124.6 million ($112.2 million
Federal share) from health home expenditures to PCCM expenditures and refund $30.7 million in
excess Federal funds to the Federal Government.
Iowa Inadequately Monitored Its Medicaid Health Home Providers, Resulting in Tens of Millions in
Improperly Claimed Reimbursement (A-07-18-04109), April 2020
Iowa improperly claimed Federal Medicaid reimbursement for 62 of the 130 payments made to
health home providers that did not comply with Federal and State requirements. These improper
payments primarily involved deficiencies in documentation. Specifically, Iowa’s health home
providers did not document core services, integrated health home outreach services, diagnoses,
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and enrollment with providers. In addition, Iowa’s providers did not maintain documentation to
support higher payments for intense integrated health home services and did not ensure that
beneficiaries had full Medicaid benefits.
The improper payments occurred because Iowa did not adequately monitor providers for
compliance with certain Federal and State requirements. Based on our sample results, we
estimated that Iowa improperly claimed at least $37.1 million in Federal Medicaid reimbursement
for payments made to health home providers.
Iowa did not concur with our recommendation that it refund $37.1 million to the Federal
Government. Iowa concurred with our recommendations that it improve its monitoring of the
health home program to ensure that health home providers comply with Federal and State
requirements for documenting services, revise its State Medicaid plan to define documentation
requirements, and educate providers on these requirements.
New Jersey Did Not Ensure That Its Managed Care Organizations Adequately Assessed and Covered
Medicaid Beneficiaries’ Needs for Long-Term Services and Supports (A-02-17-01018), May 2020
New Jersey did not ensure that its MCOs complied with certain Federal and State requirements for
beneficiaries enrolled in its Medicaid managed long-term services and supports (MLTSS) program.
For 68 of the 100 monthly capitation payments in our random sample, MCOs did not comply with
the requirements to adequately assess and cover the associated beneficiaries’ needs for long-term
services and supports. Specifically, MCOs did not comply with requirements for: (1) providing
adequate service planning and care management to the beneficiaries; (2) conducting and
documenting assessments; and (3) developing, reviewing, and updating beneficiaries’ care plans.
These deficiencies occurred because New Jersey did not adequately monitor MCOs for compliance
with certain Federal and State requirements. On the basis of our sample results, we estimated that
New Jersey made monthly payments totaling approximately $386 million (Federal share) to MCOs
that did not comply with certain Federal and State requirements.
New Jersey partially concurred with our recommendations that it improve its monitoring and
followup activities to ensure that its MCOs comply with Federal and State requirements detailed in
its contracts with the MCOs; and take actions, including imposing corrective action plans, fines, or
other financial disincentives on MCOs, to address the MCOs’ noncompliance affecting $721 million
($386 million Federal share) in capitation payments in CY 2016 and ensure future compliance with
contract requirements.
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The New York State Medicaid Agency Made Capitation Payments to Managed Care Organizations
After Beneficiaries’ Deaths (A-04-19-06223), July 2020
New York made capitation payments after beneficiaries’ deaths. Based on New York and Social
Security Administration data available to us, we could not fully confirm that 2 beneficiaries
associated with 4 of the 100 capitation payments were deceased. In addition, New York adjusted
12 capitation payments before our audit. For the remaining 84 payments, New York made
unallowable payments totaling $269,473 ($143,643 Federal share).
The unallowable payments occurred because New York did not: (1) have system edits to identify
errors in the automated process that terminates beneficiaries’ eligibility after dates of death; (2)
update the eligibility and payment systems with correct dates of death; (3) identify as deceased
and disenroll beneficiaries that had a date of death in one of its data sources; or (4) use additional
sources of death information and alternative procedures similar to those that we used in our audit
to identify, verify, or determine dates of death.
On the basis of our sample results, we estimated that New York made payments to MCOs on
behalf of deceased beneficiaries totaling at least $23.3 million ($13.7 million Federal share) during
our audit period.
New York did not specifically indicate that it concurred with our recommendations that it: (1) refund
the $13.7 million to the Federal Government and (2) identify and recover unallowable payments
made to MCOs during our audit period on behalf of deceased beneficiaries. We also made other
procedural and administrative recommendations.
Nebraska Claimed Unallowable School-Based Administrative Costs Because of Improper Coding of
Random Moment Timestudy Responses (A-07-19-03234), August 2020
Not all of the school-based administrative (SBA) costs that Nebraska claimed for Medicaid
reimbursement for September 1, 2014, through August 31, 2017, were reasonable, allowable, and
adequately supported in accordance with the terms of the State Medicaid plan and applicable
Federal and State requirements. Specifically, Nebraska did not correctly calculate and claim
SBA costs for Medicaid reimbursement because the contractors incorrectly coded some random
moment timestudy (RMTS) responses. Additionally, one contractor incorrectly assigned some
participants to the RMTSs. Nebraska claimed and received Federal reimbursement totaling
$25.3 million; however, we determined that the allowable SBA costs were $12.1 million. Therefore,
Nebraska claimed and received $13.2 million in unallowable SBA costs.
Nebraska claimed these unallowable costs because it did not exercise proper oversight to ensure
that contractors followed State requirements when coding RMTS responses and when assigning
participants to the RMTSs.
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Nebraska did not concur with our recommendations that it refund the $13.2 million to the Federal
Government, review SBA costs claimed after our audit period and refund unallowable amounts,
and strengthen oversight of its contractors to ensure that they follow State requirements when
coding RMTS responses and assigning participants to the RMTSs.
Texas Relied on Impermissible Provider-Related Donations To Fund the State Share of the Medicaid
Delivery System Reform Incentive Payment Program (A-06-17-09002), August 2020
Of the $189.3 million in funds that Texas used as the State share of Delivery System Reform
Incentive Payment (DSRIP) Program payments, $146.6 million was funded through impermissible
provider-related donations that did not meet Federal requirements. Those funds were derived
from impermissible provider-related donations because the providers made donations that
benefited the intergovernmental transfer (IGT) entity, the funds the IGT entity transferred resulted
from those donations, and the providers’ donations were part of a hold-harmless practice.
Texas did not decrease its Medicaid expenditures by the $146.6 million as required under Federal
requirements. As a result, Texas inappropriately received $83.8 million in Federal funds.
Texas did not concur with our recommendations to: (1) refund the $83.8 million it inappropriately
received because it used IGTs derived from impermissible provider-related donations as the State
share of DSRIP Program payments and (2) provide its IGT entities with guidance about
arrangements that may result in impermissible provider-related donations. Texas concurred with
our recommendation to request that its IGT entities disclose whether similar arrangements exist
and provide Texas with action plans on ending the arrangements.
Connecticut Did Not Meet Federal and State Requirements for Claiming Medicaid School-Based Child
Health Services for Hartford Public Schools (A-01-19-00003), September 2020
Connecticut did not claim Federal Medicaid reimbursement for school-based health services
submitted by Hartford Public Schools (HPS) in accordance with Federal and State requirements. Of
the 100 student-months selected in our sample, 32 student-months were allowable. However, 68
student-months had 1 or more school-based health services, totaling $11,928 ($5,964 Federal
share), that were not allowable. These errors occurred because Connecticut did not adequately
monitor School Based Child Health (SBCH) claims for school-based health services submitted by
HPS. On the basis of our sample results, we estimated that Connecticut improperly claimed at least
$1,522,359 ($761,179 Federal share) for Medicaid payments made to HPS.
Connecticut agreed with our recommendations that it: (1) refund $761,179 to the Federal
Government, (2) work with CMS to review Medicaid payments made to HPS after our audit period
and refund any overpayments, and (3) strengthen its oversight of the SBCH program by working
with the Connecticut Department of Administrative Services to develop a detailed review process
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for claims submitted by the Local Education Agencies to ensure that all claims meet Federal and
State requirements.
Colorado Claimed Unsupported and Incorrect Federal Medicaid Reimbursement for Beneficiaries
Enrolled in the New Adult Group (A-07-19-02822), September 2020
Colorado did not always comply with Federal and State requirements when claiming Federal
Medicaid reimbursement for Medicaid services provided to beneficiaries enrolled in the new adult
group (nondisabled, low-income adults without dependent children). Specifically, Colorado
claimed Medicaid payments at the newly eligible FMAP on behalf of 33,036 beneficiaries, but it did
not have adequate supporting documentation to substantiate that these beneficiaries were eligible
for the new adult group. Therefore, Colorado may have incorrectly claimed $4.1 million on behalf
of these beneficiaries. In addition, Colorado claimed the incorrect FMAP for beneficiaries whom it
enrolled in the new adult group but who were eligible for the Transitional Medicaid eligibility
group. As a result, Colorado incorrectly received an additional $1.8 million for services that it
claimed on behalf of these beneficiaries.
Colorado did not have adequate system controls to ensure that its claims for Federal Medicaid
reimbursement were adequately supported and were claimed at the correct FMAP.
Colorado agreed with our recommendations that it: (1) update its eligibility determination system
by implementing an automatically accessible eligibility history to eliminate the need for manual
interventions to identify eligibility changes in eligibility status, (2) ensure that the Medicaid
Management Information System (MMIS) retains all beneficiary eligibility changes and reconcile the
data in the MMIS to the data in its eligibility determination system to determine whether
discrepancies in eligibility groups are occurring, and (3) ensure that its systems have automated
edits to enroll Transitional Medicaid beneficiaries in the correct eligibility group.
North Carolina Made Capitation Payments to Managed Care Entities After Beneficiaries’ Deaths
(A-04-16-00112), September 2020
North Carolina made unallowable capitation payments to certain managed care entities on behalf
of deceased beneficiaries. Of the 37,434 capitation payments reviewed, North Carolina paid 3,912
before the beneficiaries’ deaths or recovered the payments. However, the remaining 33,522
payments were for monthly coverage after the beneficiaries’ deaths, were unrecovered, and were
therefore unallowable. Although North Carolina identified and recovered some unallowable
payments, it did not always identify and process death information in its eligibility system and
MMIS. As a result, North Carolina made $2.9 million ($1.9 million Federal share) in unallowable
payments to certain managed care entities for the audit period.
North Carolina agreed with our recommendations that it refund $1.9 million to the Federal
Government, identify capitation payments made to managed care entities on behalf of deceased
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beneficiaries before and after our audit period and refund the Federal share of amounts recovered,
and improve the accuracy of eligibility system date of death information and apply MMIS edits as
necessary to identify all deceased beneficiaries, prevent all capitation payments for monthly
coverage after death, and recover such unallowable payments.
96 Percent of South Carolina’s Medicaid Fee-for-Service Telemedicine Payments Were Insufficiently
Documented or Otherwise Unallowable (A-04-18-00122), April 2020,
Texas Telemedicine Services Were Provided in Accordance With State Requirements (A-06-18-05001),
June 2020, and
Illinois Claimed Unallowable Telemedicine Payments (A-05-18-00028), August 2020
South Carolina made telemedicine payments that were not in accordance with Federal and State
requirements and were therefore unallowable. On the basis of our sample results, we estimated
that 96 percent of South Carolina’s Medicaid fee-for service telemedicine payments were
unallowable. We also estimated that unallowable payments totaled at least $2.1 million ($1.5
million Federal share) during our audit period.
South Carolina concurred with our recommendations that it refund $1.5 million to the Federal
Government, give providers formal training on telemedicine documentation requirements, and
enhance the monitoring of provider compliance by conducting periodic reviews of telemedicine
payments for compliance with documentation requirements.
We determined that 39 of the 40 client dates of service we reviewed were allowable in accordance
with the Texas Medicaid requirements. The remaining incorrect billing did not affect the Medicaid
payment amount that the provider received. This report contains no recommendations.
Illinois made telemedicine payments that were not in accordance with Federal and State
requirements and were therefore unallowable. Based on our testing, we determined that Illinois
made unallowable payments of $198,124 ($124,812 Federal share) during our audit period.
Illinois concurred with our recommendations that it refund $124,812 to the Federal Government,
give providers formal training on telemedicine billing requirements, and enhance the monitoring of
provider compliance by conducting periodic reviews of telemedicine payments for compliance with
billing requirements.
Quality of Care, Safety, and Access
CMS Should Pursue Strategies To Increase the Number of At-Risk Beneficiaries Acquiring Naloxone
Through Medicaid (OEI-BL-18-00360), September 2020
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CMS and State Medicaid agencies can be encouraged by their progress to date in increasing
access to naloxone—a drug that reverses opioid overdoses—while also continuing to look for ways
to further expand naloxone availability under Medicaid. We recommend that CMS pursue
strategies to increase the number of at-risk beneficiaries acquiring community-use versions of
naloxone (i.e., that versions that can be appropriately administered in emergency situations by
those with minimal to no training) through Medicaid. CMS did not explicitly concur with our
recommendation but stated that it is already pursuing multiple strategies to increase the number
of at-risk beneficiaries acquiring community-use versions of naloxone through Medicaid and will
continue to do so.
National Background Check Program for Long-Term-Care Providers: Assessment of State Programs
Concluded in 2019 (OEI-07-20-00180), September 2019
States participating in the National Background Check Program (Program) for long-term-care
providers had varying degrees of State-level legal requirements and practical infrastructure for
conducting background checks. This affected their ability to implement select Program
requirements and to consistently report quality data. Our findings can help CMS identify ways to
strengthen its support of the Program.
CMS concurred with both of our recommendations to assist participating States to address the
challenge of coordinating between State-level departments and require participating States to
consistently submit data that allow for CMS and each State to calculate determinations of
ineligibility.
Texas Did Not Fully Comply With Federal and State Requirements for Reporting and Monitoring
Critical Incidents Involving Medicaid Beneficiaries With Developmental Disabilities (A-06-17-04003),
July 2020
Texas did not ensure that all beneficiary deaths were reported and reviewed; that all complaints
not closed within 10 days were tracked; and that all allegations of abuse, neglect, and exploitation
were entered into the Human Services Enterprise Administration Reporting and Tracking (HEART)
system. Although Texas had a procedure in place to detect unreported deaths, it did not follow it,
did not have a system in place to track complaints not closed within 10 days, and did not have
procedures to ensure that allegations were entered into the HEART system.
Texas concurred with our recommendations that it: (1) ensure that procedures are followed to
detect unreported deaths; (2) implement a system to ensure that it can track complaints not closed
within 10 days; and (3) implement procedures to ensure that investigations of abuse, neglect, and
exploitation are entered in the HEART system. Texas also described actions that it has taken or
plans to take to address our recommendations. These actions include increasing the frequency of
comparing deaths reported by the provider to death reports from the Client Assignment and
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Registration system, implementing a new system to monitor unreported deaths, and issuing
violations and administrative penalties for failure to report deaths.
North Carolina Did Not Ensure That Nursing Facilities Always Reported Allegations of Potential
Abuse and Neglect of Medicaid Beneficiaries and Did Not Always Prioritize Allegations Timely
(A-04-17-04063), July 2020
North Carolina did not ensure that nursing facilities always reported potential abuse or neglect of
Medicaid beneficiaries transferred from nursing facilities to hospital emergency departments. In
addition, it did not always fully comply with Federal requirements for assigning a priority level to
reported allegations of potential abuse and neglect or for correctly recording the associated dates.
Finally, North Carolina’s complaint and incident report program may not have been effective in
promoting and protecting the health, safety, and welfare of residents, patients, and other clients
receiving health care services.
North Carolina generally concurred with our recommendations that it continue working with CMS
to provide clear guidance to nursing facilities regarding what constitutes a reportable incident and
when to report and revise its policies and procedures to require that it: (1) assign a priority level to
incident reports even if the nursing facilities’ investigations are not complete, (2) enter into CMS’s
automated tracking system the date that North Carolina first receives incident reports, and (3)
manage employee absences to better prevent them from interfering with assigning priority levels
to allegations within appropriate timeframes. We also made procedural recommendations,
including recommendations to address our concerns with the effectiveness of North Carolina’s
complaint and incident report program.
Medicaid Data Can Be Used To Identify Instances of Potential Child Abuse or Neglect
(A-01-19-00001), July 2020
We determined that Medicaid claim data can be used to identify incidents of potential child abuse
or neglect and, using that data, estimated that 29,260 of the 29,534 Medicaid beneficiaries in our
sampling frame were involved with incidents of potential child abuse or neglect that were
supported by Medicaid claim data and evidence contained in medical records. We further
estimated that of the beneficiaries in our population associated with incidents of potential child
abuse or neglect, 3,928 were involved with incidents that were not reported to child protective
services. We also determined that most incidents of potential child abuse or neglect identified in
our sample occurred in familiar settings by perpetrators known to the victims. CMS did not identify
similar incidents of potential child abuse or neglect during our audit period or encourage the
States to identify the incidents.
CMS concurred with our recommendation that it issue guidance to inform States that performing a
data analysis to identify Medicaid claims containing diagnosis codes indicating potential child
abuse or neglect could help identify incidents of potential child abuse or neglect and help ensure
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compliance with their mandatory reporting laws. CMS did not concur with our recommendation
that it assess the sufficiency of existing Federal requirements to report suspected child abuse and
neglect of Medicaid beneficiaries to determine whether CMS should strengthen those
requirements or seek additional authorities to provide oversight over the reporting of suspected
child abuse and neglect of Medicaid beneficiaries.
New Jersey Did Not Ensure That Incidents of Potential Abuse or Neglect of Medicaid Beneficiaries
Residing in Nursing Facilities Were Always Properly Investigated and Reported (A-02-18-01006),
August 2020
New Jersey did not ensure that nursing facilities always investigated and reported incidents of
potential abuse or neglect to the State in accordance with Federal and State requirements. Of the
103 claims in our sample, 79 claims were not the result of potential abuse or neglect; therefore,
nursing facilities were not required to report the incident to the State. Of the remaining 24 claims,
10 claims were the result of potential abuse or neglect that should have been reported to the State.
However, 5 of the 10 claims were not properly investigated and reported to the State. For the
other 14 claims, nursing facilities did not provide documentation, or their records did not contain
sufficient documentation for State officials to determine whether the incident should have been
investigated and reported. These deficiencies occurred because nursing facility staff did not follow
requirements for investigating and reporting potential incidents of abuse or neglect. In addition,
New Jersey did not have adequate survey procedures for ensuring that nursing facilities
documented all such incidents.
New Jersey did not indicate concurrence or nonconcurrence with our recommendations that it: (1)
reinforce guidance to nursing facilities for ensuring potential incidents of abuse or neglect are
reported in accordance with Federal and State requirements and (2) develop additional procedures
for its survey site visits, including reviewing nursing facilities’ records related to hospital transfers
for certain beneficiary injuries or conditions that could be the result of potential abuse or neglect.
Oregon’s Oversight Did Not Ensure That Four Coordinated-Care Organizations Complied With
Selected Medicaid Requirements Related to Access to Care and Quality of Care (A-09-18-03035),
September 2020
Oregon’s coordinated-care organizations (CCOs) generally complied with Federal and State
requirements related to time and distance standards and timely access standards, as well as
requirements related to assignment of primary care providers. However, the CCOs did not comply
with requirements related to provider credentialing and beneficiary grievances and appeals. In
addition, CCOs did not resolve or review beneficiary grievances appropriately and did not
adjudicate appeals in compliance with their contracts with Oregon. Also, CCOs submitted
inaccurate or incomplete data on grievances and appeals, which Oregon used for oversight.
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Department of Health and Human Services, Office of Inspector General
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These issues occurred because: (1) Oregon provided insufficient oversight of, and guidance to, the
CCOs and (2) the CCOs provided insufficient oversight of, and guidance to, their subcontractors.
Because not all providers were appropriately credentialed, there was an increased risk of poor
quality of care. In addition, the mishandling of grievances and appeals may have reduced
beneficiaries’ access to care and the quality of care.
Oregon concurred with our recommendations that it provide additional guidance to CCOs on: (1)
the processes for provider credentialing and for beneficiary grievances and appeals and (2)
monitoring subcontractors, that Oregon take actions to ensure that CCOs do not subcontract the
adjudication of final appeals, and that the data that CCOs submit on grievances and appeals are
accurate and complete.
Illinois Should Improve Its Oversight of Selected Nursing Homes’ Compliance With Federal
Requirements for Life Safety and Emergency Preparedness (A-05-18-00037), September 2020
Illinois did not ensure that selected nursing homes in the State that participated in the Medicare or
Medicaid programs complied with CMS requirements for life safety and emergency preparedness.
During our site visits, we identified deficiencies in areas related to life safety and emergency
preparedness at all 15 nursing homes that we reviewed. Specifically, we found 53 instances of
noncompliance with life safety requirements and 184 instances of noncompliance with emergency
preparedness requirements. As a result, residents at the 15 nursing homes were at increased risk of
injury or death during a fire or other emergency.
The identified deficiencies occurred because the existing life safety training program for nursing
home management could not educate all Illinois nursing home management in a timely manner,
and the State did not offer an emergency preparedness training program for nursing home
management.
Illinois generally agreed with our recommendations that it: (1) follow up with the 15 nursing homes
to verify that corrective actions have been taken regarding the deficiencies that we identified, (2)
conduct more thorough emergency preparedness reviews for the safety and protection of nursing
home residents and staff, (3) work with CMS to develop emergency preparedness training and
expand life safety training sessions to accommodate all nursing home management, (4) consider
increasing staffing levels to address caseload thresholds for State surveyors, and (5) consider
modifying its survey procedures to check for carbon monoxide alarms required by Illinois law.
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2020, through September 30, 2020
Drug Pricing and Reimbursement
New York Did Not Bill Manufacturers for Some Rebates for Drugs Dispensed to Enrollees of Medicaid
Managed-Care Organizations (A-02-18-01016), April 2020, and
Michigan Did Not Bill Manufacturers for Some Rebates for Drugs Dispensed to Enrollees of Medicaid
Managed-Care Organizations (A-05-17-00017), August 2020
New York and Michigan did not fully comply with Federal Medicaid requirements for billing
manufacturers for rebates for drugs dispensed to managed care organization enrollees.
Specifically, New York did not bill for and collect from manufacturers estimated rebates of more
than $10.8 million (Federal share) for pharmacy and physician-administered drugs that were eligible
or may have been eligible for rebates for our audit period. Although its policies and procedures
require the collection of drug utilization data necessary to invoice for rebates on all claims,
New York’s internal controls did not always ensure that the data were used to invoice
manufacturers to secure rebates.
Michigan did not bill for and collect manufacturers’ rebates that we calculated to be at least
$31.5 million (Federal share). Michigan did not always bill for and collect manufacturers’ rebates
because Michigan and its contractor did not identify all of the rebate-eligible drugs in the
utilization data submitted by the MCOs.
New York partially agreed with our recommendation that it bill for and collect from manufacturers
rebates for single-source and top-20 multiple-source pharmacy and physician-administered drugs
and refund the estimated $7.8 million (Federal share), and it agreed with our recommendations
that it work with CMS to determine whether the other pharmacy and physician-administered drugs
were eligible for rebates and, if so, upon receipt of the rebates, refund up to an estimated
$3 million (Federal share) of rebates collected; and strengthen its internal controls to ensure that all
pharmacy and physician-administered drugs eligible for rebates are invoiced.
Michigan concurred with our recommendation that it bill for and collect manufacturers’ rebates for
pharmacy drugs and for single-source and top-20 multiple-source physician-administered drugs
that we calculated to be at least $30 million (Federal share) and refund the Federal Government.
Michigan described actions that it has taken or plans to take to address our remaining
recommendations. We recognize the corrective actions Michigan has implemented or plans to
implement to address our recommendations.
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2020, through September 30, 2020
Legal and Investigative Activities Related to
Medicare and Medicaid
OIG investigates allegations of fraud, waste, and abuse in all HHS programs. Our largest body of work
involves investigating matters related to the Medicare and Medicaid programs, such as patient harm;
billing for services not rendered, medically unnecessary services, or upcoded services (i.e., services billed
for at a level higher than warranted); illegal billing, sale, and diversion of prescription drugs; marketing of
off-label uses for prescription drugs; and solicitation and receipt of kickbacks, including illegal payments to
patients for involvement in fraud schemes and illegal referral arrangements between physicians and
medical companies.
OIG also conducts investigations regarding organized criminal activity, including medical identity theft and
fraudulent medical schemes established for the sole purpose of stealing Medicare dollars. Investigators
are opening an increasing number of cases against health care providers who engage in these health care
fraud schemes. Those who participate in the schemes may face heavy fines, jail time, and exclusion from
participation in Federal health care programs.
One of the most common types of fraud perpetrated against Medicare, Medicaid, and other Federal health
care programs involves filing false claims for reimbursement. False claims may be pursued under Federal
and State criminal statutes and, when appropriate, under the False Claims Act. Depending on the types of
fraud or other violations involved, OIG investigations may culminate in criminal or civil court judgments
and decisions, administrative sanctions and decisions, and/or negotiated settlement agreements.
Investigative outcomes take many forms, including incarceration, restitution, fines, penalties, forfeitures,
assessments, and exclusion of individuals or entities from participation in all Federal health care programs.
Frequently used exclusion and penalty authorities are described on our website at
http://oig.hhs.gov/fraud/enforcement/cmp/.
During this semiannual reporting period, we reported 166 criminal and 414 civil actions against individuals
or entities that engaged in offenses related to health care. We also reported over $1.24 billion in
investigative receivables due to HHS and more than $363.2 million in non-HHS investigative receivables,
including civil and administrative settlements or civil judgments related to Medicare, Medicaid, and other
Federal, State, and private health care programs.
Criminal and Civil Enforcement Activities Related to Medicare and Medicaid
The following recently completed actions and settlements are organized by the type of provider or entity
involved. Additional cases appear in the Medicare Fraud Strike Force Activities section below.
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Department of Health and Human Services, Office of Inspector General
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Ambulance Transportation Company
The following case example involves an ambulance company:
Guam—On June 30, 2020, the two owners of Guam Medical Transport (GMT), Clifford P.
Shoemake and Kimberly Clyde Conner, were sentenced to serve 71 and 63 months,
respectively, in Federal prison in connection with their October 29, 2019, guilty pleas to one
count of conspiracy to commit health care fraud and one count of conspiracy to engage in
monetary transactions with the proceeds of specified unlawful activity. Shoemake and
Conner were also ordered to pay $10,884,964 in restitution. According to their admissions
at the plea hearing, the defendants engaged in a conspiracy to defraud Medicare and
TRICARE by submitting claims for reimbursement for medically unnecessary ambulance
services that GMT provided to patients with end-stage renal disease from approximately
March 11, 2010, to approximately March 21, 2014. The defendants admitted they were
aware that GMT was transporting patients who did not qualify for ambulance
transportation under applicable Medicare and TRICARE regulations and guidelines, with
which they had failed to familiarize themselves. Specifically, the defendants admitted they
were aware that many of GMT’s patients were not bed-confined and did not have acute
medical conditions that would otherwise qualify them for ambulance transportation. As
part of the scheme, the defendants directed GMT employees to remove from internal
documents references to GMT patients’ ability to walk because they knew that Medicare
and TRICARE would not provide reimbursement for the patients. The defendants further
admitted they were aware of, but failed to address, concerns about GMT’s Medicare and
TRICARE billing practices raised by other GMT employees. According to court documents,
GMT submitted claims to Medicare totaling approximately $32 million during the scheme.
The conspiracy resulted in improper payments to GMT of approximately $10.8 million.
Patient Harm
The following example involves patient harm:
Missouri—On September 1, 2020, Sherry Paulo and Anthony Flores were sentenced to
serve 210 months and 188 months, respectively, in Federal prison for their roles in the death
of a disabled resident at Second Chance Homes (SCH), an organization that provided
housing and care for developmentally disabled persons through a Missouri Department of
Mental Health initiative. In addition, the couple’s son, Anthony (R.K.) Flores, was sentenced
to 3 years of probation for falsifying a document. Paulo and Flores pleaded guilty in
Federal court to one count of willfully failing to provide necessary medical care to the
victim, resulting in injury to and the death of the victim. Paulo also pleaded guilty to one
count of health care fraud arising from her efforts to hide the victim’s death. On February
12, 2020, R.K. Flores pleaded guilty to one count of knowingly falsifying a document with
the intent to impede, obstruct, and influence a Federal investigation related to the death of
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Department of Health and Human Services, Office of Inspector General
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the victim. According to court documents, Flores, Paulo, and R.K. Flores all worked at SCH.
Flores and Paulo admitted that, beginning in 2014, they observed victim’s weight decline
and his health deteriorate. However, Paulo stopped following victims’ prescribed health
regimen and stopped taking him to his doctors’ appointments. As the victim’s health
deteriorated, Paulo occasionally took him out of his designated SCH residence and put him
in the basement of the home she shared with Flores. The basement was small and dark
without access to sunlight or running water. In approximately September 2016, the victim
suffered an acute medical emergency while in the basement room of Paulo and Flores’s
home. Paulo and Flores chose not to seek medical care for victim, and he died in their
home while they watched. Paulo and Flores admitted that, after victim’s death, Paulo
placed his body in a trashcan and put the trashcan in a wooden crate that they filled with
cement. Paulo, Flores, and R.K. Flores then placed the crate in Paulo’s storage unit. Paulo
also admitted that after the victim died, she submitted, or caused to be submitted, false
Medicaid claims for services purportedly rendered to the victim when, as Paulo knew, he
was deceased. The amount wrongfully paid by Medicaid between approximately
September 2016 and April 2017 was $106,795.
Pharmaceutical Companies
The following case example involves a pharmaceutical company:
New York—On July 1, 2020, Novartis Pharmaceuticals Corporation (Novartis) entered into
two settlements totaling $642 million to resolve allegations that it had violated the False
Claims Act. The first settlement pertains to the company’s alleged illegal use of three
foundations as conduits to pay the copayments of Medicare patients taking two of
Novartis’s drugs. The second settlement resolves claims arising from the company’s
alleged payments of kickbacks to doctors. In the first settlement, Novartis agreed to pay
$51.3 million to resolve allegations that it illegally paid the copay obligations for patients
taking its drugs. From January 1, 2010, through December 31, 2014, Novartis used The
Assistance Fund as a conduit to pay kickbacks to Medicare patients taking a Novartis drug
for multiple sclerosis; and used the National Organization for Rare Disorders and Chronic
Disease Fund (CDF) as conduits to pay kickbacks to Medicare patients taking Afinitor, a
Novartis drug for renal cell carcinoma and progressive neuroendocrine tumors of
pancreatic origin. In the second matter, Novartis agreed to pay $591,442,008 to resolve
claims that it had paid kickbacks to doctors to induce them to prescribe the Novartis drugs
Lotrel, Valturna, Starlix, Tekturna, Tekturna HCT, Tekamlo, Diovan, Diovan HCT, Exforge, and
Exforge HCT. In addition, Novartis agreed to forfeit $38.4 million under the Civil Asset
Forfeiture Statute. Novartis also made extensive factual admissions in the settlement and
agreed to strict limitations on any future speaker programs, including reductions to the
amount it may spend on such programs. Novartis entered into a 5-year CIA with OIG as
part of this settlement.
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Department of Health and Human Services, Office of Inspector General
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Nursing Home
The following case example involves a nursing home:
Virginia—On April 14, 2020, Saber Healthcare, Saber Healthcare Group LLC, and related
entities, (Saber) entered in to a $10 million settlement to resolve allegations that Saber
violated the False Claims Act by knowingly causing certain of its skilled nursing facilities
(SNFs) to submit false claims to Medicare for rehabilitation therapy services that were not
reasonable, necessary, or skilled. This settlement resolved allegations that Saber submitted
false claims for rehabilitation therapy by engaging in a systematic effort to increase
Medicare billings. Medicare reimburses SNFs at a daily rate that reflects the skilled therapy
and nursing needs of qualifying patients. The greater the patient’s needs, the higher the
level of Medicare reimbursement. The highest level of Medicare reimbursement for SNFs is
for “Ultra High” patients, who require a minimum of 720 minutes of skilled therapy from
two therapy disciplines (e.g., physical, occupational, speech), one of which has to be
provided 5 days a week. The United States alleged that Saber improperly established
general goals that all patients should be provided with the Ultra High level of therapy,
regardless of the patients’ individual therapeutic needs, and enforced that expectation by
pressuring therapists to provide Ultra High therapy to each patient at nine facilities. The
United States further contended that Saber established uniform expectations for Ultra High
therapy in facility budgets; pressured facility directors in weekly or daily calls to ensure that
therapists provided the Ultra High therapy to each patient; prevented therapists from
providing lower levels of therapy minutes if, in the therapists’ clinical judgment, a lower
amount was warranted; caused therapists to report time spent on initial evaluations as
therapy time in violation of Medicare policy; and caused therapists to report time spent
providing unskilled services as time spent on skilled therapy. Saber entered into a 5-year
CIA with OIG in connection with the settlement.
DME Companies
The following case examples involve durable medical equipment companies:
Nebraska—On June 23, 2020, Nereus Sutko was sentenced to 46 months imprisonment
and ordered to pay $809,561 in restitution. The investigation showed that between 2010
and 2019, Sutko operated Better Lives, LLC, an Omaha-based business purporting to sell
durable medical equipment to Medicare and Medicaid beneficiaries. Sutko hosted pizza
parties and other gatherings at senior living residences and low-income housing facilities
and obtained health care program beneficiaries’ personal and insurance information under
the guise of providing free items such as heating pads or shoe inserts. Sutko offered gift
cards and other rewards to people who referred health care beneficiaries to him or
provided him with the names and insurance information of beneficiaries. Sutko then billed
health care programs, including Medicare, Nebraska Medicaid, and Iowa Medicaid for fitted
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Department of Health and Human Services, Office of Inspector General
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braces and other durable medical equipment that was never prescribed for, or provided to,
the beneficiaries. Sutko primarily targeted beneficiaries in the Lincoln and Omaha,
Nebraska, and Des Moines, Iowa areas. Between 2010 and 2019, Sutko was paid more than
$1.8 million by Medicare, Nebraska Medicaid, and Iowa Medicaid.
Tennessee—On July 9, 2020, John Davis the former CEO of Comprehensive Pain Specialists
(CPS) was sentenced to 42 months in prison and ordered to forfeit $770,036 after being
convicted of one count of conspiracy to defraud the United States and violate the anti-
kickback statute as well as seven counts of violating the anti-kickback statute. According to
evidence presented at trial, Davis abused his position as CEO of CPS to arrange for referrals
of Medicare durable medical equipment (DME) orders to his co-conspirator, Brenda
Montgomery, and her company, CCC Medical. Evidence showed that Davis operated a
shell company called ProMed Solutions (ProMed), which he had registered in the name of
his wife. Davis received over $770,000 in illegal kickbacks disguised as payments to his wife
and ProMed. Together, Davis and Montgomery collected over $2.9 million dollars in
improper reimbursements from Medicare. Davis used company funds from CPS to pay
bonuses to providers who ordered DME for Medicare beneficiaries and referred those
orders to CCC Medical. Davis received 60 percent of the Medicare profit from these
referrals, while the company he ran lost the opportunity to bill for these services.
Pharmacies
The following case example involves a pharmacy:
Georgia—On June 26, 2020, Ray Ashley Dixon, a pharmacist who owned and operated
Fulghum Pharmacy, was sentenced to 48 months in Federal prison after pleading guilty to a
conspiracy that involved health care fraud and illegal distribution of opioids. According to
court documents and information presented during the sentencing hearing, Dixon
distributed opioids, including oxycodone and hydrocodone, to several individuals without a
legitimate prescription issued by a physician in the usual course of professional practice.
Dixon, through his pharmacy, was also a major source of opioids for patients of notorious
convicted pill-mill operator Dr. Frank Bynes, Jr., distributing in excess of 110,000 units of
opioids and other controlled substances during a 15-month period. In addition to his drug
distribution, Dixon created fake prescriptions for expensive medication and then billed
insurance programs, including Medicare Part D plans and Medicaid, even though the
medication was neither prescribed nor dispensed. According to information presented
during the sentencing hearing, Ray Dixon’s fraud amounted to more than $1.8 million over
4 years.
Prescription Drugs
The following case example involves prescription drugs:
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Department of Health and Human Services, Office of Inspector General
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California—On May 21, 2020, Minas Matosyan (a.k.a. “Maserati Mike”) was sentenced to
108 months in Federal prison for leading a conspiracy to distribute powerful prescription
opioids via sham medical clinics that hired corrupt doctors who wrote fraudulent
prescriptions to black market customers. Matosyan was arrested in August 2017 after a
Federal grand jury indicted him, charging him and 12 other defendants with scheming to
divert at least 2 million controlled prescription pills for sale on the black market. According
to his plea agreement, Matosyan and his co-conspirators controlled the sham clinics and
hired corrupt doctors who allowed their names to be used on fraudulent prescriptions in
exchange for kickbacks. Matosyan also admitted that he and his co-conspirators either
personally acquired prescription pads in the doctors’ names or arranged for other
co-conspirators to do so. As part of the scheme, Matosyan staffed receptionists at the
clinics who would falsely verify the false prescriptions to pharmacists who called to check
on their veracity. Matosyan sold narcotic prescriptions to black market customers—either
directly or through couriers—and also sold bulk quantities of hydrocodone and oxycodone
that he had acquired from false prescriptions filled at pharmacies by other customers. In
May 2016, Matosyan offered a doctor a “very lucrative position” where the doctor would “sit
home making $20,000 a month doing nothing,” according to Matosyan’s plea agreement.
After the doctor declined the offer, Matosyan stole the doctor’s identity, sending a co-
conspirator a text message containing the doctor’s full name, medical license number, and
national provider identifier number that the co-conspirator used to order prescription pads
in the doctor’s name. Over the next 2 months, Matosyan and his co-conspirators sold
fraudulent prescriptions, purportedly issued by the victim doctor, for at least 9,450 pills of
oxycodone and 990 pills of hydrocodone.
Kickbacks
The following case example involves kickbacks:
Pennsylvania—On May 22, 2020, Branden Coluccio was sentenced to 37 months in prison
for conspiracy to commit health care fraud. As part of his sentence, he was also ordered to
pay restitution in the amount of $3,070,157, and to forfeit $110,000, with an additional
$15,000 fine. This scheme involved Liberation Way, a drug and alcohol rehabilitation
organization that had treatment centers in Yardley, Bala Cynwyd, and Fort Washington,
Pennsylvania. The investigation exposed an array of health care fraud schemes committed
by individuals associated with Liberation Way, including an overbilling scheme connected
to the facility’s medical director, as well as an elaborate kickback scheme involving
thousands of medically unnecessary urine tests which were sent to Florida-based
laboratories for analysis. Coluccio, a co-founder of Liberation Way, participated in yet
another scheme by fraudulently purchasing premium insurance policies for prospective
patients on their behalf, which then allowed Liberation Way to bill insurance companies for
expensive “treatment” purportedly provided to these patients. Liberation Way represented
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Department of Health and Human Services, Office of Inspector General
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that the patients were buying and paying for these policies, when in reality Liberation Way
was paying the premiums, which is illegal.
Electronic Health Records
The following case example involves electronic health records:
Ohio—On April 21, 2020, KPMD, Inc., a California based technology company, was ordered
by the U.S. District Court to pay nearly $1.7 million in restitution to the Medicare and
Medicaid programs. According to court documents, KPMD, Inc. defrauded a Medicaid
program that was established as part of the 2009 American Recovery and Reinvestment Act
through its contract with the Southwest Regional Medical Center in Georgetown, Ohio. In
September 2011, KPMD entered into a contract with Southwest Regional Medical Center
and agreed to implement the KPMD software program for electronic health records. In
exchange, the hospital assigned its Government incentive payments to KPMD. KPMD’s
CEO later purchased the hospital. Thereafter, KPMD falsely attested to the Federal and
State medical incentive programs that Southwest Regional Medical Center emergency
room had met the criteria for incentive payments, even as the hospital was in the process
of closing down. As a result, payments totaling nearly $1.7 million were wired to KPMD.
Hospital
The following case example involves a hospital:
Georgia—On June 25, 2020, Piedmont Healthcare, Inc., an Atlanta-based hospital system,
agreed to pay $16 million to settle allegations that it violated the False Claims Act by billing
Medicare and Medicaid for procedures at the more expensive inpatient level of care
instead of the less costly outpatient or observation level of care. The settlement also
resolved allegations that Piedmont paid a commercially unreasonable and above fair
market value to acquire Atlanta Cardiology Group in 2007 in violation of the Federal
anti-kickback statute. The settlement resolves two separate False Claims Act allegations.
First, between 2009 and 2013, Piedmont’s case managers allegedly overturned the
judgment of its treating physicians on numerous occasions and billed Medicare and
Medicaid at the more expensive inpatient level of care, even though the treating physicians
recommended performing the procedures at the less expensive outpatient or observation
level of care. Second, in 2007 Piedmont allegedly acquired the Atlanta Cardiology Group, a
physician practice group, in violation of the Federal anti-kickback statute by paying a
commercially unreasonable and above fair market value for a catheterization laboratory
partly owned by the practice group. This case was initiated based on a qui tam complaint
filed in the U.S. Attorney’s Office for the Northern District of Georgia.
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Department of Health and Human Services, Office of Inspector General
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Laboratories
The following case example involves laboratory:
Florida—On April 15, 2020, Logan Laboratories Inc. (Logan Labs), a reference laboratory in
Tampa, Florida; Tampa Pain Relief Centers Inc. (Tampa Pain), a pain clinic also based in
Tampa Florida; and two of their former executives, Michael T. Doyle and Christopher Utz
Toepke (collectively, Defendants), agreed to pay a total of $41 million to resolve alleged
violations of the False Claims Act for billing Medicare, Medicaid, TRICARE, and other
Federal health care programs for medically unnecessary UDTs. Both Logan Labs and
Tampa Pain are subsidiaries of Surgery Partners Inc. Doyle is the former CEO of Surgery
Partners and Logan Labs. Toepke is the former Group President for Ancillary Services at
Surgery Partners, with oversight of Logan Labs, and a former Vice President at Tampa Pain.
The Government alleged that the Defendants knowingly submitted or caused the
submission of false claims to Federal health care programs for presumptive and definitive
UDTs, in circumstances where such testing was not medically reasonable or necessary.
Presumptive UDTs are tests that screen for the presence of drugs, and definitive UDTs are
tests that identify the amounts of those drugs in a patient’s system. The Government
alleged that the Defendants developed and implemented a policy and practice of
automatically ordering both presumptive and definitive UDTs for all patients at every visit,
without any physician making an individualized determination that either test was medically
necessary for the patients for whom the tests were ordered. According to the
Government’s allegations, the medically unreasonable and unnecessary definitive UDTs
were performed at Logan Labs, the medically unreasonable and unnecessary presumptive
UDTs were performed at Tampa Pain, and the resulting false claims were submitted by
both Tampa Pain and Logan Labs to Federal health care programs, from January 1, 2010,
through December 31, 2017.
Medicare Fraud Strike Force Activities
In 2007, Medicare Fraud Strike Force teams began an effort to combine resources of Federal, State, and
local law enforcement entities to prevent and combat health care fraud, waste, and abuse. These
partnerships among OIG and HHS, DOJ, U.S. Attorneys’ Offices, the Federal Bureau of Investigation (FBI),
and State and local law enforcement have a common goal: to analyze health care fraud data and
investigative intelligence to quickly identify fraud and bring prosecutions. Strike Force teams operate in
11 areas: Miami and Tampa/Orlando, Florida; Dallas and Houston, Texas; Los Angeles, California; Detroit,
Michigan; Brooklyn, New York; Baton Rouge and New Orleans, Louisiana; Chicago, Illinois; and Newark,
New Jersey/Philadelphia, Pennsylvania; along with a Corporate Strike Force located in Washington, DC.
During this semiannual reporting period, Strike Force efforts resulted in the filing of charges against 56
individuals or entities, 21 criminal actions, and more than $32.2 million in investigative receivables.
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Department of Health and Human Services, Office of Inspector General
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In October 2018, DOJ announced the creation of a new initiative to combat the nation’s opioid
epidemic. The Appalachian Regional Prescription Opioid Strike Force covers 10 Federal judicial districts
in Alabama, Kentucky, Ohio, Tennessee, Virginia, and West Virginia. OIG’s Office of Investigations is
working closely with its law enforcement partners at the Drug Enforcement Administration (DEA), FBI,
and the Medicaid Fraud Control Units (MFCUs) to provide investigative support. Cases involve
physicians and pharmacies that are responsible for medically unnecessary opioid prescriptions and
dangerous drug combinations that are being paid for by Medicare and Medicaid. In many instances,
there are other allegations of wrongdoing relating to kickbacks, health care fraud, and quality of care,
including patient overdoses and deaths.
The following case example involves Strike Force case:
Alabama—On June 11, 2020, Celia Lloyd-Turney was sentenced to 60 months of probation,
with the special condition of 24 months of home confinement, for the unlawful distribution
of controlled substances. At trial, evidence showed that from 2015 to 2017, Lloyd-Turney
wrote multiple prescriptions for controlled substances to purported patients who were
actively abusing other drugs, suffering from addiction, and selling the pills. This case was
investigated by HHS-OIG and DEA as part of the Appalachian Regional Prescription Opioid
(ARPO) Strike Force.
Compliance Trainings
Health Care Provider Compliance Training
OIG provides free training on our website for health care providers, compliance professionals, and
attorneys. OIG’s Provider Compliance Training was an initiative developed in 2011 that continues to
reach the health care community with OIG’s message of compliance and prevention via free
downloadable comprehensive training materials and podcasts. OIG’s provider compliance training
resources are available at https://oig.hhs.gov/compliance/compliance-guidance/index.asp.
Indian Health and Human Services Compliance Training
In addition to the May 2018 compliance and quality training held in Oklahoma for more than 200
individuals representing IHS, Tribes, and Tribal health care and human services organizations, OIG
participated throughout this semiannual reporting period in various HHS-sponsored conferences,
providing training on fraud prevention, internal controls, and compliance. OIG Indian health and
human services compliance training resources are available at https://oig.hhs.gov/AIAN.
Most Wanted Fugitives List
The OIG Most Wanted Fugitives website continues to garner national and international attention and has
greatly assisted in helping to capture fugitives charged with defrauding Federal health care programs and
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Department of Health and Human Services, Office of Inspector General
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stealing millions of taxpayer dollars. The Most Wanted Fugitives website is continually updated and
features a profile for each fugitive as well as an online tip form and a hotline number for individuals to
report fugitive-related information to OIG, in English or Spanish, 24 hours a day, 365 days a year. The
Most Wanted Fugitives list is available at https://oig.hhs.gov/fraud/fugitives/.
HHS-OIG Hotline
As part of OIG’s Office of Investigations, the hotline is the public-facing division for OIG’s intake and
evaluation of fraud tips. The mission of the HHS-OIG Hotline is to support OIG’s oversight responsibilities
in safeguarding the integrity of all programs and personnel under HHS’s purview and protecting them
from fraud, waste, and abuse. The hotline achieves its mission through its staff’s dedication to timely
intake and analysis of information received from various sources, such as the “Submit a Complaint” link on
the HHS-OIG website. During this semiannual reporting period, the OIG Hotline reported expected
recoveries of $14.9 million as a direct result of cases originating from hotline complaints.
OIG Hotline Activity (4/1/20–9/30/20)
Contacts to 1-800-HHS-TIPS phone line, including 53,048
callers seeking information
Total tips evaluated 16,707
Tips referred for action 5,995
Closed; no basis provided for further action 6,103
Closed; no HHS violation 1
222
Sources of tips referred for action
Phone 2,309
OIG website 3.242
Letters or faxes 437
Other 115
1 Some of the closed complaints in this reporting period may have been evaluated or referred for action in a previous reporting
period.
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Medicaid Fraud Control Units
OIG Oversight of Medicaid Fraud Control Units
MFCUs are key partners with OIG in the fight against fraud, waste, and abuse in State Medicaid
programs. OIG has oversight responsibility for MFCUs and administers grants that provide Federal
funding for their operations. Currently, all 50 States, the District of Columbia, Puerto Rico, and the
U.S. Virgin Islands operate MFCUs. The Federal Government reimburses 90 percent of a MFCU’s
total expenditures during the first 3 years of operation and 75 percent thereafter. MFCUs
investigate and prosecute Medicaid provider fraud as well as patient abuse and neglect in health
care facilities and board and care facilities.
OIG Onsite Reviews of MFCUs
In addition to an annual recertification review of each MFCU, OIG conducts reviews of a sample of
MFCUs. OIG evaluates MFCU operations based on 12 performance standards and assesses
compliance with laws, regulations, and OIG policy guidance. During the reporting period, OIG
issued reports of onsite reviews of the following MFCUs:
Hawaii Medicaid Fraud Control Unit: 2019 Onsite Review (OEI-06-19-00110), June 2020, and
Arkansas Medicaid Fraud Control Unit: 2019 Onsite Inspection (OEI-12-19-00450), September
2020.
OIG Joint Casework With MFCUs
The following case example(s) involve(s) OIG’s joint efforts with MFCUs:
Oklahoma—On May 21, 2020, Jeffrey Scott Terry was sentenced to 37 months in Federal prison
and ordered to pay over $1 million to Medicare and Medicaid for his role in a health care fraud
scheme. According to an indictment filed in March 2019, Terry was a licensed pharmacist who
began operating Bratton Drug in August 2015. Both the Oklahoma Health Care Authority—which
administers Medicaid under the name SoonerCare—and Medicare reimbursed Bratton Drug for
prescription drugs that it dispensed. The indictment alleged that from August 2015 through
September 2018, Terry submitted false claims to SoonerCare and Medicare Part D for drugs that
had not actually been prescribed or dispensed to patients. Separately, the United States filed a civil
action pursuant to the Anti-Fraud Injunction Statute and obtained an injunction to prohibit Terry
from dissipating or disposing assets he accumulated as a result of the false claims. On August 12,
2019, Terry entered a guilty plea before Judge Palk to one count relating to Medicaid and one
count relating to Medicare. OIG investigated this case with the Oklahoma MFCU.
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Advisory Opinions and Other Industry Guidance
Advisory opinions, which are developed in consultation with DOJ, are issued to requesting parties
regarding the interpretation and applicability of certain statutes relating to Federal health care programs.
The Health Insurance Portability and Accountability Act of 1996 (HIPAA), § 205, allows OIG to provide case-
specific formal guidance on the application of the anti-kickback statute and safe harbor provisions and
other OIG health care fraud and abuse sanctions. During this semiannual reporting period, OIG received
seven requests for advisory opinions and issued three advisory opinions.
Sanction Authorities and Other Administrative Actions
Various Federal laws provide authorities the ability to impose administrative sanctions for fraud and abuse
as well as other activities that pose a risk to Federal health care programs and their beneficiaries.
Sanctions include the exclusion of individuals and entities from Federal health care programs and the
imposition of CMPs for submitting false and fraudulent claims to a Federal health care program or for
violating the anti-kickback statute, the physician self-referral law (commonly referred to as the “Stark Law”),
or the Emergency Medical Treatment and Labor Act (EMTALA), also known as the “patient dumping
statute.” Sanctions also include referrals for suspension and debarment in cases of grant and contract
fraud.
During this semiannual reporting period, OIG imposed 1,323 administrative sanctions in the form of
program exclusions or administrative actions for alleged fraud or abuse or other activities that posed a risk
to Federal health care programs and their beneficiaries.
Exclusion and penalty authorities are described in Appendix C and on our website at
http://oig.hhs.gov/fraud/enforcement/cmp/index.asp.
Program Exclusions
During this semiannual reporting period, OIG excluded 1,245 individuals and entities from
Medicare, Medicaid, and other Federal health care programs. Most of the exclusions resulted from
convictions for crimes relating to Medicare or Medicaid, patient abuse or neglect, financial
misconduct, controlled substances, or as a result of license revocation. OIG completed the
deployment of a new service for MFCUs to report convictions through a central web-based portal
for exclusions. OIG is also responsible for reinstating providers who apply and have met the
requirements of their exclusions. For a list of excluded individuals and entities, see
https://exclusions.oig.hhs.gov/.
The following are case examples of program exclusions:
Mississippi—Thomas Spell, a pharmacy owner, was excluded for a minimum period of
75 years based on his conviction for conspiracy to commit health care fraud. From about
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December 2014 to about January 2016, Mr. Spell participated in a scheme to defraud
Tricare by formulating compounded medications that did not fit the individualized needs of
patients but instead were formulated to obtain maximum reimbursement from Tricare. In
addition, Spell and his co-conspirators arranged for their employees to purchase prepaid
debit cards to make copayments for beneficiaries. The court ordered this individual to pay
approximately $243.5 million in restitution and serve 120 months of incarceration. The
Mississippi Board of Pharmacy also revoked his license to practice as a pharmacist.
Michigan—Salman Ali, the owner of a home health agency was excluded for a minimum
period of 20 years based on his conviction of health care fraud conspiracy. From about
October 2005 to about March 2013, Ali and his wife controlled and operated home health
agencies that billed Medicare for services that were not medically necessary or were not
provided. In addition, the individual created false physical therapy files and claimed that
physical therapy services had been provided, when in fact, no such services had been
provided. The court sentenced him to serve 32 months of incarceration and repay
approximately $12.1 million in restitution.
Suspensions and Debarments
Suspensions and debarments are administrative tools used by HHS and other Federal agencies to
protect the Government from individuals and entities that have engaged in contract fraud, have
misused grant funds, or are otherwise not presently responsible. Because these are
Governmentwide sanctions, an individual or entity that has been suspended or debarred by HHS or
any other agency is ineligible to participate in any future funding opportunities across the Federal
Government for a specified period of time.
OIG refers individuals and entities that have potentially engaged in grant or contract fraud or
misconduct to the HHS Suspension and Debarment Official, who is responsible for determining
whether to impose a suspension or debarment. OIG continues to develop a robust Suspension
and Debarment program and uses this tool to protect Government programs against fraud, waste,
poor performance, and noncompliance with contract provisions or applicable law.
The following case examples involve debarment:
Alaska—Paige Bohall was convicted for embezzling $14,622.65 in Health Resources and
Services Administration (HRSA) HIV Care Formula Grants funds and embezzling a total of
$105,794.95. Bohall, the Financial Manager of the Alaskan AIDS Assistance Agency (4A), a
nonprofit organization that is the subrecipient of HRSA and CDC funds through the State of
Alaska Department of Health and Social Services, was ordered to serve 90 days in prison
and 36 months probation and pay restitution in the total of $120,000.
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New York—Alexander Neumeister, a member of the New York University School of
Medicine of Psychiatry, used HHS-National Institutes of Health grant funds for personal
use, including for meals, personal travel, and personal expenses for his family and friends.
He was convicted for one count of theft of Government funds and sentenced to 3 years’
probation and ordered to pay restitution of $87,763.96. He also entered into a civil False
Claims Act settlement agreement to resolve his False Claims Act liability in connection with
this conduct and agreed to pay $33,215.43.
Civil Monetary Penalties Law
The Civil Monetary Penalties Law (CMPL) authorizes OIG to impose administrative penalties,
assessments, and exclusions against a person who, among other things, submits, or causes to
be submitted, claims to a Federal health care program that the person knows, or should know,
are false or fraudulent. The exclusions statute also authorizes OIG to exclude a person who
violates the CMPL. During this semiannual reporting period, OIG concluded cases involving
more than $12.5 million in CMPs and assessments.
Affirmative Litigation
The CMPL authorizes OIG to use its administrative remedies to affirmatively pursue cases. OIG
may also exclude under the exclusions statute for engaging in conduct that violates the CMPL.
When OIG excludes under the exclusions statute for engaging in conduct that violates the
CMPL, it is known as an affirmative exclusion.
The following case examples involve affirmative litigation under the CMPL:
New York—Brooklyn Plaza Medical Center (BPMC) entered into a $100,000 settlement
agreement and a 5-year Recipient Compliance Agreement with OIG to resolve BPMC's
liability under the Civil Monetary Penalties Law for knowingly submitting or causing to be
submitted specified claims to HHS that BPMC knew or should have known were false or
fraudulent and knowingly making representation to HHS that were false, in violation of 42
U.S.C. §§ 1320a-7a(o)(1) and (2). Specifically, OIG alleged that BPMC made false specified
claims in the form of drawdowns from the HHS Payment Management System for Health
Resources and Services Administration grant funds that were not supported by adequate
documentation, timesheets, and a financial management and control system that ensured
that HHS grant funds were used solely for authorized purposes in accordance with Federal
statutes, regulations, and the terms and conditions of BPMC’s Federal awards. The OIG
further alleged that on various occasions during the same timeframe, BPMC falsely
represented to HHS in funding applications that it had in place: (1) safeguards to prohibit
employees from using their positions for personal gain; and (2) a financial management
and control system that ensured that HHS grant funds were used solely for authorized
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purposes in accordance with Federal statutes, regulations, and the terms and conditions of
BPMC's Federal awards.
South Carolina—Vital Care EMS, Inc. (VC) entered into a $2,213,516.71 settlement
agreement with OIG to resolve allegations that VC knowingly presented claims to Medicare
Part B for ambulance transportation to and from SNFs where such transportation was
already covered by the SNF consolidated billing payment under Medicare Part A.
Patient Dumping
Some of the CMPL cases that OIG resolved during this semiannual reporting period were pursued
under EMTALA, a statute designed to prevent hospitals from denying emergency care to patients
and to ensure patient access to appropriate emergency medical services.
The following case example involves EMTALA:
Georgia—DeKalb Medical Center, Inc. (DeKalb) entered into a $260,000 settlement
agreement with OIG. The settlement agreement resolves allegations that, based on OIG's
investigation, DeKalb violated EMTALA when it failed to provide an adequate screening
examination and stabilizing treatment for 21 individuals. The following is an example of
such incidents: Patient N.R.A., a 25-year-old female, presented to DeKalb's Emergency
Department (ED) with complaints of acute gastric pain, nausea, and vomiting. The medical
records also listed possible pregnancy as her chief complaint. N.R.A. had a prior history of
peptic ulcer disease and gastric ulcers. The medical records indicated that N.R.A. was seen
by a registered nurse and was triaged using an emergency severity level index at level 4
(indicating a non-urgent patient). The triage nurse recorded N.R.A.'s vital signs and marked
"no" next to nine questions on a non-patient-specific checklist. Within 6 minutes of the
nurse starting the triage process, N.R.A. was discharged from DeKalb's ED. OIG determined
that DeKalb's ED was capable of providing an appropriate medical screening examination
to determine whether the patients at issue had an emergency medical condition and
providing stabilizing treatments in the event patients had such conditions, but OIG
contends that DeKalb failed to do so.
Self-Disclosure Programs
Health care providers, suppliers, or other individuals or entities subject to CMPs can apply for
acceptance into the Provider Self-Disclosure Protocol, a program created in 1998 for voluntary
disclosure of self-discovered evidence of potential fraud. The self-disclosure program may give
providers the opportunity to avoid costs or disruptions associated with Government-directed
investigations and civil or administrative litigation.
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Application processes for two additional self-disclosure programs were recently added to the OIG
website for HHS contractors and grantees. The OIG contractor self-disclosure program provides
contractors the opportunity to self-disclose when they have potentially violated the False Claims
Act or other Federal criminal laws prohibiting fraud, conflict of interest, bribery, or gratuity. This
self-disclosure process is only available to those with a Federal Acquisition Regulations (FAR)-based
contract with HHS. The OIG Grant Self-Disclosure Program is available for application by HHS
grantees or HHS grant subrecipients and provides the opportunity for voluntary disclosure to OIG
of potential fraud. OIG evaluates the reported results of each internal investigation under the
provider self-disclosure protocol to determine the appropriate course of action. The self-disclosure
guidelines are available on the OIG website at https://oig.hhs.gov/compliance/self-disclosure-
info/index.asp. During this semiannual reporting period, provider self-disclosure cases resulted in
more than $11.8 million in HHS receivables.
The following case examples pertain to provider self-disclosure settlements:
Alaska—After it self-disclosed conduct to OIG, the City and Borough of Sitka, formerly
doing business as Sitka Community Hospital, a Department of the City and Borough of
Sitka (Sitka) agreed to pay $4,125,552 for allegedly violating the Civil Monetary Penalties
Law provisions applicable to kickbacks. OIG alleged that Sitka paid remuneration to
providers in the form of: (1) excessive compensation under Emergency Department call
coverage arrangements and (2) excessive compensation under advance practice providers
arrangements.
Florida—After it self-disclosed conduct to OIG, St. Vincent's Medical Center (St. Vincent's)
agreed to pay $747,973.50 for allegedly violating the Civil Monetary Penalties Law
provisions applicable to kickbacks. OIG alleged that St. Vincent's paid remuneration to
certain physicians under advance practice provider staffing arrangements in the form of
providing clinical staff without cost, or at reduced cost, to the physicians to assist them in
treating inpatients at the hospital St. Vincent's formerly owned and operated until
October 1, 2019.
Corporate Integrity Agreements
Many health care providers elect to settle their cases before litigation. As part of the settlements,
providers often agree to enter into CIAs with OIG to avoid exclusions from Medicare, Medicaid,
and other Federal health care programs. Under a CIA, a provider commits to establishing a
program and taking other specified steps to ensure future compliance with Medicare and Medicaid
rules. The compliance programs are designed, in part, to prevent future fraud. OIG monitors
providers’ compliance with these agreements and may impose penalties on entities that fail to
comply with the requirements of their CIAs.
The following case examples involve CIA enforcement:
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Tennessee—On June 1, 2020, the Departmental Appeals Board (DAB) upheld OIG's
demand that Friendship Home Health, Inc., et al. (Friendship Entities) pay $1,322,500 in
stipulated penalties for breaches of their CIA. On November 19, 2018, OIG sent the
Friendship Entities a demand for $1,322,500 in stipulated penalties for their failure to repay
overpayments identified in their second and third annual reports. The Friendship Entities
appealed this demand and requested a hearing with a DAB Administrative Law Judge (ALJ).
On October 31, 2019, the ALJ upheld OIG's demand. The Friendship Entities then appealed
to the DAB. In its decision, the DAB agreed with the ALJ's conclusions that the CIA's
auditing and repayment provisions created independent obligations to repay
overpayments to Medicare and Medicaid, and that each time the Friendship Entities
violated those obligations to repay overpayments, it created a separate basis for OIG to
demand stipulated penalties. The DAB also agreed that the Friendship Entities were
properly subject to stipulated penalties arising from those failures and further held that the
CIA authorizes per-day stipulated penalties to run concurrently for each failure to make
timely repayment.
Tennessee—After it disclosed conduct to OIG pursuant to its CIA, Envision Healthcare
Corporation and its subsidiaries and affiliates (Envision), entered into a $50,250 settlement
agreement with OIG. OIG alleged that Envision paid remuneration to approximately 500
hospital senior executives nationwide in the form of Google Home Mini devices with
Envision's name printed on the devices.
Public Health and Human Service Agency
Reports and Reviews
Public Health Agency Reports and Reviews
Hospital Experiences Responding to the COVID-19 Pandemic: Results of a National Pulse Survey
March 23–27, 2020 (OEI-06-20-00300), April 2020
In a pulse survey conducted on March 23–27, 2020, hospitals from across the country described
challenges, mitigation strategies, and the need for assistance in responding to COVID-19. Hospitals
reported that their most significant challenges centered on testing and caring for patients with
known or suspected COVID-19 and keeping staff safe. Hospitals also reported substantial
challenges to maintaining or expanding their facilities’ capacity to treat patients with COVID-19.
Specific challenges related to their capacity to treat patients include: personal protective
equipment (PPE), testing, staffing, supplies and durable equipment, maintaining or expanding
facility capacity, and financial concerns. We collected this information to aid HHS and other
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decisionmakers as they continue to respond to the COVID-19 pandemic. In addition, hospitals may
find the information about each other’s strategies useful in their efforts to respond to COVID-19.
Office of the Assistant Secretary for Preparedness and Response
Selected Health Care Coalitions Increased Involvement in Whole Community Preparedness but Face
Developmental Challenges Following New Requirements in 2017 (OEI-04-18-00080), April 2020
More diverse health care entities are participating in beneficial HCC preparedness activities, but
new member entities did not always fill gaps in preparedness and response and they pulled
resources from other HCC priorities. Our findings can help the Office of the Assistant Secretary for
Preparedness and Response (ASPR) identify ways to further improve HCCs’ preparedness for whole
community emergency response to a range of public health emergencies, including emerging
infectious diseases. ASPR concurred with all of our recommendations, which were for it to:
• clarify guidance that HCCs’ membership should ensure strategic, comprehensive coverage
of their communities’ gaps in preparedness and response;
• continue to work with CMS to help health care entities comply with the CMS emergency
preparedness Conditions of Participation;
• identify ways to incentivize core members’ participation; and
• clarify to HPP awardees the flexibility available in meeting requirements.
Toolkit: Insights for Communities From OIG’s Historical Work on Emergency Response (OEI-09-20-
00440), August 2020 and Toolkit: Insights for Healthcare Facilities from OIG’s Historical Work on
Emergency Response (OEI-06-20-00470), August 2020
These toolkits contain key insights and lessons learned from Office of Inspector General (OIG)
reports published from 2002 to 2020 about communities’ and health care facilities’ emergency
preparedness and response. These reports address actions by health care facilities and State and
local governments during outbreaks of emerging infectious diseases (such as Ebola and H1N1
pandemic influenza) and natural disasters (such as Hurricane Katrina and Superstorm Sandy), as
well as bioterrorism preparedness and response. OIG conducted the referenced audits and
evaluations prior to the COVID-19 pandemic. We provide this information to assist communities
and health care facilities in responding to the current pandemic and to other emergencies as they
arise. The toolkits contain no recommendations.
Food and Drug Administration
FDA’s Risk Evaluation and Mitigation Strategies: Uncertain Effectiveness To Address the Opioid Crisis
(OEI-01-17-00510), September 2020
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Although opioid prescribing has decreased, data quality issues have made it challenging for the
Food and Drug Administration (FDA) to determine whether the Risk Evaluation and Mitigation
Strategies (REMS) for opioids have been effective. (A REMS is a drug safety program that is
intended to mitigate a specific serious risk associated with the use of a drug.) Furthermore, REMS
may not be well suited to quickly address the opioid crisis. While the opioid crisis continued with
nearly 47,000 deaths in 2018, FDA used REMS as tools to mitigate misuse and abuse of opioids.
Transmucosal immediate-release fentanyl (TIRF) drugs and extended-release/long-acting (ER/LA)
opioids are two major classes of opioids that pose serious risk of addiction, abuse, and overdose.
In 2011 and 2012, FDA approved the REMS for TIRF drugs and the REMS for ER/LA opioids,
respectively, just as opioid prescribing reached its peak. While FDA and other agencies in HHS
continue to address the opioid crisis using a variety of efforts, OIG has four recommendations for
FDA to improve these two opioid REMS. FDA concurred with our first and third recommendations.
It did not concur with our second, and it is considering our fourth recommendation. Our
recommendations were for it to:
• use the new TIRF REMS patient registry to monitor for known areas of risk, such as
inappropriate conversions (i.e., switching a patient between different TIRF drugs
inappropriately) and off-label prescribing;
• enhance its REMS assessment review process by completing its reviews in a timely fashion
and seeking information on inappropriate prescribing trends from FDA’s Office of
Prescription Drug Promotion;
• strengthen the REMS for opioid analgesics (the successor to the REMS for ER/LA opioids)
by requiring training for prescribers; and
• seek additional authority to ensure that manufacturers are held accountable when
appropriate.
Risk Assessment of Food and Drug Administration’s Purchase Card Program (A-04-19-06234),
September 2020
FDA generally designed and implemented controls and strategies to mitigate the potential risks of
illegal, improper, or erroneous purchases in its purchase card program. Within the 6 risk areas
related to FDA’s purchase card program, we identified 56 sub-risk areas and assessed 50 as low
risk and 6 as moderate risk. Overall, we assessed the FDA purchase card program as low risk. This
report contains no recommendations.
Indian Health Service
Most Indian Health Service Purchased/Referred Care Program Claims Were Not Reviewed, Approved,
and Paid in Accordance With Federal Requirements (A-03-16-03002), April 2020
Through the Purchased/Referred Care (PRC) Program, IHS pays for private providers to deliver
health care services unavailable through the IHS network. Of the 100 PRC claims in our sample,
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18 were paid in accordance with Federal requirements; however, the other 82 were not. These
82 claims did not meet 1 or more of the 9 requirements that we evaluated. These errors occurred
because IHS did not have controls in place to prevent its Referred Care Information System (RCIS)
from accepting claims missing information. In addition, IHS and providers did not conduct timely
tracking of certain processes, and providers did not always submit completed claims.
Based on our sample results, we estimated that 658,025 of the 802,470 total claims were not paid
in accordance with Federal requirements.
IHS generally concurred with our recommendation that it establish an edit in the RCIS to enforce
the requirement that each beneficiary submits documentation showing that he or she meets the
geographic component of IHS’s eligibility requirements. IHS concurred with our recommendations
that it: (1) educate PRC Program staff about the importance of documenting their review of medical
necessity and priority-level requirements, (2) conduct outreach to beneficiaries and providers to
ensure that they submit notifications of health care services within 72 hours (or 30 days for elderly
and disabled beneficiaries), and (3) only pay for health care services after receiving all required
alternate resource documentation and resolving all information gaps. We also made additional
procedural recommendations.
Tribal Health Programs: Concerns About Background Verifications for Staff Working With Indian
Children (A-01-20-01500), August 2020
Past and ongoing audits found that Tribal health programs that received Indian Self-Determination
and Education Assistance Act funds from IHS were not conducting required FBI fingerprint
background checks for all employees, contractors, and volunteers who have regular contact with
Indian children. This creates an increased risk that an individual with a disqualifying criminal history
in a different State could be hired into a position with regular contact with Indian children.
This vulnerability warrants IHS’s immediate attention because it may compromise the safety and
well-being of Indian children who receive treatment at Tribal health programs funded by IHS.
National Institutes of Health
The National Institutes of Health Administered Superfund Appropriations During Fiscal Year 2018 in
Accordance With Federal Requirements (A-04-19-04072), April 2020
During FY 2018, NIH administered Superfund appropriations in accordance with applicable Federal
requirements. Specifically, NIH obligated and disbursed Superfund appropriations in accordance
with Federal requirements and in similar proportions to prior years. In addition, the Institute’s
monitoring of Superfund grants generally ensured that grantees met requirements for financial,
performance, and audit reporting. We made no recommendations.
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The National Eye Institute Generally Had Adequate Procedures To Assess an Applicant’s Risk During
the Pre-Award Process (A-05-19-00017), May 2020
The National Eye Institute (NEI) generally had adequate policies and procedures in place for its
grant pre-award process. However, NEI did not perform or adequately document a required
financial capability review for two of the six grant awards in our sample. The HHS Grants Policy
and Administration Manual (GPAM) requires that, before making a grant award, the awarding
agency conduct a financial capability review of a grant applicant that has not received an award
from a Federal agency within the preceding 3 years. As a result, not all risks for applicants may
have been identified and mitigated before grant funds were awarded.
NIH concurred with our recommendations that it direct NEI to develop written procedures for
conducting and documenting the financial capability review required by the HHS GPAM and
provide training to NEI Grants Management Specialists about how to adequately document their
review of a grant applicant’s financial statements and the organization’s financial status.
The National Cancer Institute Needs To Strengthen Procedures in Its Pre-Award Process To Assess
Risk for Higher Risk Applicants (A-03-19-03004), June 2020
The National Cancer Institute (NCI) generally had adequate policies and procedures in its
pre-award process for identifying an applicant’s risk before awarding grant funds. However, NCI
did not adequately document its review process to assess financial capability for applicants that did
not receive a grant from NCI in the 3 years before the current application. In addition, NCI did not
have written policies and procedures for conducting and documenting financial capability reviews
required by the HHS GPAM for applicants that have received funding from NCI within the past 3
years and are experiencing financial difficulty.
Documentation of applicants’ financial capability was lacking because NCI did not have adequate
written procedures for conducting and documenting financial capability reviews and for
determining how to manage identified risks. In addition, NCI did not provide adequate training to
guide NCI Specialists in their evaluation of applicants’ financial capability. As a result, NCI may not
be identifying and mitigating all risks for applicants before grant funds are awarded.
NIH partially concurred with our recommendation that it direct NCI to update and strengthen
written procedures for conducting and documenting applicant financial capability reviews as
required by the GPAM and for determining how to manage the risks identified by NCI Specialists.
NIH concurred with our recommendation that it provide training to NCI Specialists about how to
adequately document their evaluation of the financial capability of applicants.
The National Institutes of Health Should Improve Its Stewardship and Accountability Over Hardware
and Software Assets (A-18-19-06004), September 2020
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NIH had controls in place to effectively and efficiently track and monitor IT resources. However,
NIH did not perform internal control activities in accordance with Federal directives and maintain a
continual agencywide software license inventory. Specifically, Institutes and Centers (ICs) did not
complete reports and perform investigations and reviews for lost, damaged, or destroyed property;
identify accountable property and sensitive items as Government property; complete corrective
action for property accountability and management control deficiencies; and meet minimum
Department standards for NIH’s accountable personal property management program.
Additionally, NIH did not maintain a continual agencywide inventory of all software licenses.
There was inadequate oversight to hold the ICs’ management accountable for the performance of
internal control activities. Additionally, there was no software asset management tool employed
across all the ICs’ operating environments to centralize and automate the capture of software
inventory and entitlement data. As a result, NIH was more susceptible to ineffective accountable
property and control operations, which increased the risk that NIH would be unable to report
reliable asset balances, to discover cost-saving opportunities, and to effectively safeguard assets
from theft and other losses.
NIH concurred with our recommendations that it establish an oversight body that ensures that
property accountability management responsibilities and control activities for Government
property are performed and that it employ a primary software asset management tool that
centralizes and automates the capture of software inventory and entitlement data into each of the
ICs’ operating environments. We also made procedural and operational recommendations.
Human Services Agency Reports and Reviews
Administration for Children and Families
The Office of Refugee Resettlement's Incident Reporting System Is Not Effectively Capturing Data To
Assist Its Efforts To Ensure the Safety of Minors in HHS Custody (OEI-09-18-00430), June 2020
Facilities providing care to children in the Unaccompanied Alien Children Program are required to
report a wide range of incidents to the Office of Refugee Resettlement (ORR) through ORR’s
incident reporting system. However, ORR’s incident reporting system is not effective at capturing
information about incidents to assist ORR’s efforts to ensure the safety of minors. We reviewed
incident reports that 45 care provider facilities submitted to ORR between January 1, 2018, and
July 31, 2018, including 761 incidents of a sexual nature. We found that ORR’s reporting system
lacks designated fields that ORR can use to oversee facilities and to protect the minors in ORR care.
Important information about facilities’ actions are not systematically collected to help ORR
determine whether facilities responded appropriately to incidents. In addition, the system does not
effectively capture information in a way that allows for efficient identification of issues that require
immediate attention and analysis to detect concerning trends. Further, facilities described
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challenges with staffing youth care workers—who are essential to preventing, detecting, and
reporting incidents—and difficulties determining which incidents should be reported to ORR.
ACF concurred with all of our recommendations that are aimed to improve the incident reporting
system and reduce the challenges that facilities face. ACF should work with ORR to: (1)
systematically collect key information about incidents that allows for efficient and effective
oversight, (2) track and trend incident report information to identify opportunities to better
safeguard minors, (3) work with facilities to address staffing shortages of youth care workers, and
(4) improve its guidance to help facilities consistently identify and report significant incidents.
Unaccompanied Alien Children Program Care Provider Facilities Do Not Include All Required Security
Measures in Their Checklists (OEI-05-19-00210), June 2020
ORR requires care provider facilities that house and care for unaccompanied children to employ
three physical security measures to ensure that the children in their care are safe from harm: (1)
controlled entry and exit, (2) alarm systems, and (3) video monitoring. ORR also requires these
facilities to use facility inspection checklists to ensure that these required physical security measures
are present and working.
However, we found that 39 of the 40 facilities that provided us with their inspection checklists did
not include prompts in their inspection checklists to check for one or more of the physical security
measures required by ORR. Additionally, facilities that included these measures in their inspection
checklists did not always describe in detail what elements of the measures to check.
ORR does not provide guidance or routine oversight on whether facilities regularly use inspection
checklists to ensure that the required physical security measures are present and working. If
facilities do not regularly check that their security measures are functioning, children potentially
could be exposed to safety risks.
ORR needs to ensure that facilities routinely check all required security measures to ensure children
in their care are safe from harm. The Administration for Children and Families concurred with our
recommendations, which were to:
• develop and implement methods to ensure that facilities’ inspection checklists include all
required physical security measures,
• develop and implement methods to ensure that facilities regularly report inspection
checklist results, and
• conduct a review to determine whether to enhance required physical security measures.
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New Hampshire’s Monitoring Did Not Ensure Child Care Provider Compliance With State Criminal
Background Check Requirements at 21 of 30 Providers Reviewed (A-01-18-02504), April 2020,
Illinois’ Monitoring Did Not Ensure Child Care Provider Compliance With State Criminal Background
Check Requirements at 12 of 30 Providers Reviewed (A-05-19-00016), April 2020,
Utah’s Monitoring Process Generally Ensured Child Care Provider Compliance With State Criminal
Background Check Requirements (A-07-19-06085), July 2020,
New Jersey’s Monitoring Did Not Ensure Child Care Provider Compliance With State Criminal
Background Check Requirements at 9 of 30 Providers Reviewed (A-02-19-02004), July 2020,
Indiana’s Monitoring Did Not Ensure Child Care Provider Compliance With State Criminal
Background Check Requirements at 17 of 30 Providers Reviewed (A-05-19-00012), August 2020,
Rhode Island’s Monitoring Did Not Ensure Child Care Provider Compliance With State Criminal
Background Check Requirements at 18 of 30 Providers Reviewed (A-01-18-02505), August 2020, and
Hawaii’s Monitoring Generally Ensured Child Care Provider Compliance With State Criminal
Background Check Requirements (A-09-19-01000), September 2020.
New Hampshire’s monitoring did not ensure provider compliance with State requirements related
to criminal background checks at 21 of 30 child care provider locations we reviewed.
New Hampshire concurred with our recommendations that it: (1) conduct or renew all required
criminal background checks for the 98 individuals who did not have all required checks or who had
expired background checks at the time of our data requests and site visits; (2) develop a system
that provides notifications to providers, employees, and department staff when criminal
background checks need to be renewed or information to complete the required checks has not
been submitted; (3) determine whether it is feasible to increase the ratio of State licensing
inspectors to child care providers to meet industry standards so that it can review all employee
criminal background checks at all child care centers; and (4) require the State’s Child Care Licensing
Unit to increase the number of current employees it reviews at all child care centers to ensure child
care provider compliance with criminal background check requirements.
Illinois’ monitoring of child care providers did not ensure provider compliance with State
requirements related to criminal background checks at 12 of 30 child care provider locations we
reviewed.
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Illinois did not directly concur or nonconcur with our recommendations that it: (1) conduct all
required criminal background checks for the 2 individuals we reviewed who did not have all
required checks at the time of our data requests and site visits, (2) conduct all required criminal
background checks for the 47 individuals we reviewed who did not have all recurring checks
conducted within the past 5 years, (3) ensure that child care providers notify the State when a new
employee is hired or a new household member is added so that the State may conduct the
required criminal background checks, and (4) work with the State licensing agency to address staff
and funding challenges to ensure that background checks are conducted on all licensed providers’
employees or household members at least once every 5 years.
Utah’s monitoring process generally ensured provider compliance with State requirements related
to criminal background checks at the 30 child care provider locations we reviewed. Although 12 of
the 30 child care providers had employees who did not have the required criminal background
checks, the errors related to only 20 of 1,338 (1.5 percent) unique child care employees whom we
reviewed.
Utah agreed with our recommendation that it consider improving its policies and procedures for
the monitoring of criminal background checks so that it routinely obtains wage information from
the Utah Department of Workforce Services prior to the inspections of child care providers, so as to
reduce the State’s dependence on provider disclosure of prospective covered individuals.
New Jersey’s monitoring did not ensure provider compliance with State requirements related to
criminal background checks at 9 of 30 child care provider locations we reviewed.
New Jersey did not indicate concurrence or nonconcurrence with our recommendations that it
conduct all required criminal background checks for the 26 individuals we reviewed who did not
have the required checks, develop a system that alerts it when criminal background checks need to
be completed for prospective and current employees and household members, and continue to
work with ACF to reach substantial compliance with criminal background check requirements.
Indiana’s monitoring of child care providers did not ensure provider compliance with State
requirements related to criminal background checks at 17 of 30 child care provider locations we
reviewed.
Indiana generally concurred with our recommendations that it: (1) conduct all required criminal
background checks for the 56 individuals we reviewed who did not have all required background
checks, (2) verify that a disqualified employee was terminated and not allowed onsite, (3) conduct
the required criminal background checks on all new employees and new household members, and
(4) develop a system that regularly notifies providers to initiate required background check
procedures for all new employees and notifies providers when background check applications have
not been received or fully processed.
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Rhode Island’s monitoring did not ensure provider compliance with State requirements related to
criminal background checks at 18 of 30 child care provider locations we reviewed.
Rhode Island did not directly concur or nonconcur with our recommendations that it: (1) conduct
or renew all required criminal background checks for the 108 individuals we reviewed who did not
have all required checks or who had expired background checks at the time of our data request
and site visits, (2) determine whether it is feasible to develop a centralized process to monitor both
family homes and child care centers, (3) determine whether it is feasible to increase the ratio of
State licensing inspectors to child care providers to meet industry standards so that it can review all
employee criminal background checks at all child care providers, and (4) require the State licensing
agency to increase the number of current employees it reviews at all child care centers to ensure
child care provider compliance with criminal background check requirements.
Hawaii’s monitoring did not ensure provider compliance with State requirements related to
criminal background checks at 27 of 30 child care provider locations we reviewed.
Hawaii generally concurred with our recommendation that it confirm that the licensing unit
responsible for one child care center provider that did not complete a required criminal
background check has implemented a corrective action plan to ensure that background checks are
completed for all staff who have been fingerprinted.
Cape Cod Child Development Program Did Not Meet Its Head Start Non-Federal Share Obligations
(A-01-19-02500), April 2020
Cape Cod Child Development Program, Inc. (CCCDP), did not meet its Head Start non-Federal
share obligations. CCCDP received almost $9.7 million in Federal Head Start funds from
July 1, 2016, through June 30, 2019, and was obligated to contribute $2.4 million. However, CCCDP
only provided documentation for $1.53 million in non-Federal share contributions. Of that amount,
we determined that almost $1.47 million was unallowable.
In addition, we identified $859,527 in State Head Start funding that CCCDP could have included as
non-Federal share contributions and which we considered allowable contributions. Thus, CCCDP’s
non-Federal share contribution shortfall was almost $1.5 million. CCCDP received and spent
almost $1.2 million in Federal Head Start funding related to that shortfall to which it was not
entitled.
CCCDP did not meet its Head Start non-Federal share because CCCDP: (1) did not understand the
Head Start non-Federal share requirements for determining allowable non-Federal share and
valuing donated program space; and (2) did not have written policies and procedures for ensuring
that it met its Head Start non-Federal share requirements and maintained complete and accurate
documentation for non-Federal share contributions, including how non-Federal share contributions
were valued and the source of non-Federal funds.
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ACF concurred with our recommendation that it take steps through the bankruptcy process to
recover almost $1.2 million in Federal Head Start funds based on CCCDP’s approximately $1.5
million non-Federal share shortfall. Because CCCDP filed for bankruptcy, we are addressing the
recommendations of this audit to ACF.
Sharon Baptist Head Start Claimed Unallowable Rent and Failed To Return Embezzled Funds
(A-02-17-02003), July 2020
Sharon Baptist Head Start (Sharon Baptist) did not comply with Federal requirements applicable to
related-party rent and related-party receivable transactions. Specifically, Sharon Baptist claimed
rent expense to which it was not entitled under Federal regulations on one of its properties,
totaling $36,264 during our audit period, as well as an additional $489,564 during the period
February 1, 2003, through January 31, 2012. Additionally, Sharon Baptist has not returned to the
Federal Government $171,000 in embezzled funds.
Sharon Baptist did not indicate concurrence or nonconcurrence with our recommendations that it:
(1) refund to the Federal Government the $36,264 in unallowable rent expense charged to its direct
Head Start grant during our audit period, (2) work with ACF to determine the portion of the
$489,564 in rent expense from prior periods that should be refunded and refund the appropriate
amount, and (3) refund to the Federal Government the $171,000 in embezzled funds.
Southwest Key Programs Failed To Protect Federal Funds Intended for the Care and Placement of
Unaccompanied Alien Children (A-06-17-07004), August 2020
Southwest Key Programs (Southwest Key) claimed unallowable costs related to the Unaccompanied
Alien Children Program. Based on our financial review results, we determined that Southwest Key
claimed unallowable costs for capital leases, a related-party lease, and other ancillary costs related
to leases. Southwest Key also claimed unallowable compensation related to influx bonuses and
executive compensation. Additionally, Southwest Key claimed other unallowable expenses. We
also determined that Southwest Key’s financial management system lacked effective controls for
ensuring accountability of Federal funds.
Southwest Key disagreed or partially disagreed with all but one of our findings but did not address
our recommendations that it: (1) refund to the Federal Government $10,529,446 in unallowable
direct costs and $1,246,973 in associated indirect costs; (2) refund to the Federal Government
$1,354,429 in unallowable executive compensation; (3) implement procedures to review leases and
ensure that all rental and ancillary costs claimed comply with Federal regulations; (4) ensure that no
Federal funding, direct or indirect, is used for future compensation that exceeds the statutorily
allowed rate for executive compensation; and (5) maintain documentation supporting Federal
financial reports. We also made policy and procedural recommendations.
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Additionally, we recommend that the Office of Refugee Resettlement: (1) review remaining
Southwest Key leases to ensure that the leases are in compliance with Federal regulations and
recover any unallowable costs, (2) provide guidance on allowable costs, and (3) review Southwest
Key’s bonus policy to ensure compliance with Federal regulations. We also made a procedural
recommendation.
National Snapshot of State Agency Approaches to Child Care During the COVID-19 Pandemic (A-07-
20-06092), September 2020
Nationally, State agencies reported that about 63 percent of child care centers and 27 percent of
family child care providers (collectively, child care facilities) had closed during the COVID-19
pandemic. Eight States reported that more than 75 percent of their child care facilities had closed.
Twenty other States reported that between 50 and 75 percent of these facilities had closed.
All of the State agencies reported that they issued guidance to child care providers on protective
measures recommended by CDC. Many State agencies used the flexibilities afforded to them by
ACF to lessen the impact of COVID-19 on child care providers and to ensure continued access to
child care. To implement changes to their CCDF programs, many State agencies sought changes
in their State requirements, requested waivers from ACF, and submitted plan amendments.
The most frequently identified challenges, according to State agencies, were communication with
stakeholders, difficulties with fingerprinting for prospective child care employees’ background
checks, insufficient funding for providers, health and safety considerations on the part of child care
staff members, and the lack of and inability to secure PPE and cleaning supplies. The State
agencies’ most frequently identified concerns once the pandemic has abated were the need to
ensure that there would be enough providers to meet child care needs, the need for funding to
stabilize the industry, and the need to hire and retain staff. This report made no recommendations.
Youth For Tomorrow - New Life Center, Inc., an Administration for Children and Families Grantee,
Did Not Comply With All Applicable Federal Policies and Requirements (A-03-16-00250), September
2020
Youth For Tomorrow–New Life Center, Inc. (YFT), a UAC Program grantee responsible for caring for
children in ORR custody, did not meet some requirements for the care and release of children in its
custody. Specifically: (1) UAC assessments may not have been conducted within the required
timeframe, (2) case files either did not have all evidence of the proper release of children or did not
meet requirements for the release of children, and (3) employee files did not meet pre-
employment requirements. In addition, the data in YFT’s annual performance report were
incorrect. YFT also claimed unallowable and potentially unallowable expenditures.
We recommend that YFT strengthen existing procedures to ensure that it meets all requirements
for the care and release of children and refund to the Federal Government $10,336 in unallowable
employee appreciation expenditures and $6,515 in unallowable expenditures not related to the
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UAC program. We also made recommendations regarding the unallowable and potentially
unallowable allocated expenditures and made other procedural recommendations. The detailed
recommendations are listed in the body of the report. YFT concurred with one recommendation,
partially concurred with three recommendations, and did not concur with the rest but described
actions it took or plans to take to address them.
Safety of Children in Foster Care
Kansas Did Not Ensure That Group Homes for Children in Foster Care Complied With All State
Health and Safety Requirements (A-07-19-06087), July 2020
Kansas did not ensure that all foster care group homes complied with State licensing requirements
related to the health and safety of children in those group homes in accordance with Federal laws
and regulations. Specifically, at the times of our site visits we found that 24 of the 31 group homes
did not comply with State environmental requirements; this is because Kansas did not address all
instances of noncompliance with environmental standards during annual inspections. In addition,
29 of the 31 group homes did not comply or could not document compliance with the required
background record check or fingerprint submission requirements for employees. These instances
occurred because Kansas did not ensure that the required background checks for all employees
were requested in a timely manner. Furthermore, 1 of the 31 group homes did not comply with the
terms of its State licensing requirements because it housed both male and female children but was
licensed to house only female children.
Kansas concurred with our recommendations that it: (1) follow up with all foster care group homes
to verify that all of the maintenance deficiencies that we identified are corrected, (2) improve
controls to ensure that group homes are in compliance with State licensing requirements related to
the health and safety of the residents, and (3) ensure that corrective action is taken when issues of
noncompliance are found. We also made procedural recommendations to Kansas regarding
background record checks and monitoring of the group homes.
Ohio Did Not Ensure the Accuracy and Completeness of Psychotropic and Opioid Medication
Information Recorded in Its Child Welfare Information System for Children in Foster Care (A-05-18-
00007), July 2020
Ohio did not always comply with State requirements related to the psychotropic and opioid
medications prescribed for children in foster care who were eligible for assistance under Title IV-E
of the Social Security Act. We found that the medications listed in 61 case records were not
accurately documented in the Ohio Statewide Automated Child Welfare Information System (Ohio
SACWIS). Additionally, we found that psychotropic medications prescribed for children in foster
care were not always correctly identified as psychotropic in the Ohio SACWIS because the
medication list in the Ohio SACWIS had not been updated, and the county agency workers were
authorized to manually enter medication in the Ohio SACWIS.
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Ohio concurred with our recommendations that it: (1) improve monitoring to ensure that county
agencies maintain the required documentation in the Ohio SACWIS for the medications prescribed
for children in its custody; (2) continue its efforts to obtain access to Medicaid claim data for
children in its custody to assist with the monitoring of medications prescribed for the children; (3)
implement procedures for the monitoring of opioid medications prescribed for children in its
custody; (4) review and update the medication list in the Ohio SACWIS on a regular schedule, at
least once a year and as medications are approved or discontinued, to improve the reliability and
relevancy of the list; and (5) provide training and technical assistance to county agency workers
who input medical and medication information into the Ohio SACWIS.
Health Resources and Services Administration
HRSA’s Monitoring Did Not Always Ensure Health Centers’ Compliance With Federal Requirements
for HRSA’s Access Increases In Mental Health and Substance Abuse Services Supplemental Grant
Funding (A-02-18-02010), July 2020
HRSA followed its policies and procedures for awarding Access Increases in Mental Health (AIMS)
grants but did not always follow its policies and procedures when monitoring health centers’
compliance with supplemental funding requirements. Specifically, HRSA did not follow its policies
and procedures when monitoring health centers’ progress toward meeting AIMS grant award
conditions related to ongoing and one-time funding and did not always respond timely to health
centers’ requests to carry over grant funds. HRSA officials stated that monitoring of health centers’
progress toward meeting AIMS supplemental funding requirements is done in conjunction with its
general monitoring of health centers through annual reviews. According to HRSA officials, HRSA
did not always respond timely to health centers’ requests to carry over grant funds because of
other priorities, such as awarding other grants to health centers.
HRSA partially concurred with our recommendations that it: (1) assess health centers’ progress
toward meeting AIMS grant award conditions to increase personnel and patients’ access to care
and follow up with appropriate corrective action, such as providing technical assistance or
discontinuing or reducing future AIMS grant funds; (2) review Budget Period Progress Reports to
identify health centers that did not report progress toward meeting their health IT or training goals;
and (3) ensure that it follows its policy for timely response to health centers’ requests to carry over
grant funds.
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Legal and Investigative Activities Related to
Public Health and Human Service Agencies
Health Education Assistance Loan Program Exclusions
OIG excludes from Federal health care programs individuals who have defaulted on Health Education
Assistance Loan (HEAL) loans. Under the HEAL program, which stopped making loans in 1998, HRSA
guaranteed commercial loans to students seeking education in health-related fields. The students can
defer repayment of the loans until after they graduate and begin to earn income. Although HHS’s
Program Support Center (PSC) takes steps to ensure repayment, some loan recipients do not resolve their
debt. After PSC has exhausted efforts to secure repayment of a debt, it declares an individual in default.
The Social Security Act permits that thereafter, such individuals may not receive reimbursement under
Medicare, Medicaid, and all other Federal health care programs for nonpayment of the loans.
After being excluded for nonpayment of their HEAL debts, 2,812 individuals chose to enter into settlement
agreements or completely repay their debts during this semiannual reporting period. That figure includes
10 individuals who entered into such settlement agreements or completely repaid their debts. More than
$226,168,948 is being repaid through settlement agreements or through complete repayment. Of that
amount, more than $1,377,015 is attributable to this semiannual reporting period.
The following examples are settlement agreements.
California—Elaine Burke, Medical Doctor: $41,400
California—Amir Abbas Nasseri, Medical Doctor: $24,200
Child Support Enforcement Activities
OIG Investigations
OIG investigates noncustodial parents who violate 18 U.S.C. § 228 by failing to pay court-ordered
child support. OIG works with ACF’s Office of Child Support Enforcement; DOJ; U.S. Attorneys’
Offices; the U.S. Marshals Service; and Federal, State, and local partners to address egregious child
support enforcement cases with appropriate law enforcement and prosecutorial action. During this
semiannual reporting period, OIG investigations of child support enforcement cases nationwide
resulted in two criminal actions and court-ordered restitution and settlements of $260,849.
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The following case example involves child support enforcement:
Georgia—On April 29, 2020, Charles Hefner was sentenced to 5 years of probation in the
Southern District of Georgia. Hefner was also ordered to pay $249,949 in restitution to the
Child Support Enforcement Family Support Registry, to be paid to his ex-spouse. Hefner
was originally indicted in 2000, but fled to Brazil, where he spent 19 years as a fugitive. In
2019, the U.S. Marshals Service notified OIG that it had apprehended Hefner based on the
previously issued warrant.
Engaging the Public in Capturing Deadbeat Parents
Because of the success of OIG’s Most Wanted Fugitives website, OIG launched its Most Wanted
Deadbeat Parents website. The site identifies parents who fail to pay court-ordered child support
for their children and thereby put an unnecessary strain on the custodial parents and the children
as well as on agencies that enforce these matters. The site, which is updated frequently, includes
information on OIG’s role in pursuing parents who fail to pay court-ordered child support. OIG’s
Most Wanted Deadbeat Parents website can be found at https://oig.hhs.gov/fraud/child-support-
enforcement/index.asp.
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Other HHS-Related Reviews and Investigative
Activities
General Departmental
Review of the Department of Health and Human Services’ Compliance With the Federal Information
Security Modernization Act of 2014 for Fiscal Year 2019 (A-18-19-11200), April 2020
HHS continues to implement changes to strengthen the maturity of its enterprisewide
cybersecurity program. Ernst & Young LLP (EY) conducted the audit and identified opportunities
where HHS can strengthen its overall information security program. Additionally, EY identified
weaknesses in each of the IG FISMA domains: risk management, configuration management,
identity and access management, data protection and privacy, security training, information
security continuous monitoring, incident response, and contingency planning.
HHS concurred with all of EY’s recommendations, including that HHS further strengthen its
cybersecurity program and enhance information security controls at HHS. Specific
recommendations were also provided to the HHS OpDivs for review.
HHS should commit to creating and implementing a Cybersecurity Maturity Migration Strategy to
advance the cybersecurity program from its current maturity state to Managed and Measurable
across HHS. A progression roadmap and plan should be developed that includes specific,
measurable, attainable, relevant and time-bound milestones.
HHS’s program should address current gaps between the current maturity levels to the level of
Managed and Measurable. Roles and shared responsibilities should be articulated and
implemented to meet the requirements for effective maturity, including whether requirements are
to be implemented using centralized, federated, or hybrid controls.
Grants and Contracts
HHS is the largest grant-making organization and one of the largest contracting agencies in the Federal
Government. In FY 2019, HHS awarded more than $559 billion in grants and over $26 billion in contracts
across all program areas. OIG’s direct annual discretionary appropriation funding is used to conduct
program integrity and enforcement activities with regard to the more than 100 public health and human
services programs carried out by more than 80,00 employees around the world. The size and scope of
departmental awards make their operating effectiveness crucial to the success of programs designed to
improve the health and well-being of the public.
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CMS Did Not Administer and Manage Strategic Communications Services Contracts in Accordance
With Federal Requirements (A-12-19-20003), July 2020
CMS prepared the required documentation for awarding contracts for strategic communications
services in accordance with the FAR. However, CMS (including the CMS Administrator and other
senior leaders) did not administer and manage the contracts in accordance with Federal
requirements. CMS also administered its strategic communications services contracts as personal
services contracts. Lastly, CMS did not comply with FAR requirements in managing contract
deliverables and approving the use of a subcontractor, did not maintain complete working files for
all three contracts, and paid some questionable costs.
We made recommendations to both HHS and CMS to address the significant deficiencies we
identified. Specifically, we recommend that HHS determine whether any HHS contractors or
subcontractors are performing inherently governmental functions and whether any active CMS
service contracts or task orders are being administered as personal services contracts, and take
action to correct their administration. We also made recommendations to both HHS and CMS to
improve contract management and provide training related to contract administration. Our
specific recommendations to HHS and CMS are listed in the report. HHS concurred with our
recommendations. CMS neither concurred nor nonconcurred with three of our recommendations,
concurred with one of our recommendations, and nonconcurred with two of our
recommendations.
Grant Fraud Investigations
The following case example relates to misuse of grant funds:
Massachusetts—Harvard University has agreed to pay $1,359,791 to resolve allegations
that Harvard’s T.H. Chan School of Public Health (HSPH) overcharged certain grants funded
by NIH and HRSA. This settlement resulted from Harvard’s self-disclosure of issues that it
identified on NIH and HRSA grants by a particular professor and her team between at least
2009 and 2014. The Government contends that the HSPH professor, Donna Spiegelman,
and her team overstated the time and effort spent working on certain NIH grants for which
they provided support (and where they were not principal investigators or key personnel).
The overcharges were associated with statistical analysis support that the professor and her
team provided to other HSPH professors on grant-related research.
Small Business Innovative Research Program
The National Defense Authorization Act for Fiscal Year 2012, § 5143, requires OIG to report annually
on the number of cases referred to OIG to fraud, waste, or abuse in the Small Business Innovation
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Research/Small Business Technology Transfer (SBIR/STTR) program. OIG must also report on the
actions taken in each case; justification for not taking action on a case; and an accounting of funds
used to address waste, fraud, and abuse in this program. In our January 2020 report, we reported
that OIG spent approximately $278,733 in salaries on investigative and training activities related to
fraud, waste, or abuse in the SBIR/STTR program.
Recovery Act Retaliation Complaint Investigations
The Recovery Act, § 1553, prohibits non-Federal employers that have received Recovery Act
funding from retaliating against employees who disclose evidence of mismanagement of Recovery
Act funds or any violation of law related to Recovery Act funds. OIGs are required to include in
their Semiannual Report the retaliation complaint investigations that they decided not to conduct
or continue during the reporting period. During this semiannual reporting period, OIG did not
close, decline, or give extensions on Recovery Act Retaliation Complaint investigations of
whistleblower retaliation.
Contract Audits
Pursuant to the National Defense Authorization Act for FY 2008, § 845, OIGs appointed under the
Inspector General Act of 1978 are required to submit information on final completed contract audit
reports issued during the period to the contracting activity as part of their semiannual report,
pursuant to section 5 of the Inspector General Act. This information must contain significant audit
findings. OIG issued no final reports meeting § 845 criteria during this semiannual period.
OIG Reviews of Non-Federal Audits
OIG reviews audits conducted by non-Federal auditors of entities receiving Federal awards. During
this semiannual reporting period, OIG’s National External Audit Review Center reviewed 407
reports covering $1.9 trillion in audited costs. Federal dollars covered by these audits totaled
$634.4 billion, of which about $384.1 billion were HHS funds.
Uniform guidance at 2CFR200 Subpart F establishes audit requirements for State and local
governments, colleges and universities, and nonprofit organizations receiving Federal
awards. Under the uniform guidance, covered entities must conduct annual organizationwide
“single audits” of all Federal money they receive. These audits are conducted by non-Federal
auditors, such as public accounting firms and State auditors. OIG reviews the quality of these
audits and assesses the adequacy of the entities’ management of Federal funds.
OIG’s oversight of non-Federal audit activity informs Federal managers about the soundness of
management of Federal programs and identifies any significant areas of internal control weakness,
noncompliance, and questioned costs for resolution or followup. We identify entities for high-risk
monitoring, alert program officials to any trends that could indicate problems in HHS programs,
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and profile non-Federal audit findings of a particular program or activity over time to identify
systemic problems. We also provide training and technical assistance to grantees and members of
the auditing profession. OIG maintains a process to assess the quality of the non-Federal reports
received and the audit work that supports the selected reports.
OIG’s reports on non-Federal audits reviewed during this reporting period are categorized in the
following table.
Non-Federal Audits, April 1, 2020, Through September 30, 2020
Not requiring changes or having minor changes 394
Requiring major changes 5
Having significant technical inadequacies 8
Total Number of Non-Federal Audits 407
Other Reporting Requirements and Reviews
Legislative and Regulatory Reviews
Pursuant to the Inspector General Act, § 4(a)(2), OIG is required to review existing and proposed
legislation and regulations relating to HHS’s programs and operations and make recommendations
concerning their impact on economy and efficiency or the prevention and detection of fraud and
abuse. Most audits and other reviews that we conduct are designed to test compliance with
and/or assess the administration and oversight of existing laws and regulations. Our reports of
such reviews describe findings, which include questioned costs, inefficiencies, vulnerabilities to
fraud, inconsistencies, errors in application, or weaknesses in oversight or supporting systems. Our
corresponding recommendations tell HHS and its OpDivs or staff divisions (StaffDivs) what
administrative, regulatory, or legislative actions we believe are needed to effectively respond to the
findings. Our regularly published core publications reflect the relationship between our work and
laws and regulations.
• This report, like our previous Semiannual Reports to Congress, describes findings and
recommendations from recently completed reviews, many of which focus on existing laws and
regulations.
• Our Solutions To Reduce Fraud, Waste, and Abuse in HHS Programs: OIG’s Top
Recommendations describes priority findings and recommendations from past periods that
remain to be implemented.
• Our Work Plan provides citations to laws and regulations that are the subject of ongoing or
future reviews.
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We also review proposed legislation and regulations related to HHS programs and operations. In
addition, we provide independent, objective technical assistance on a bipartisan, bicameral basis to
congressional committees and members who request it.
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Appendix A: Questioned Costs and Funds To
Be Put to Better Use
The following tables summarize OIG’s monetary recommendations and HHS responses to them. This
information is provided in accordance with the Inspector General Act, §§ 5(a)(8) and (a)(9) (5 U.S.C. App. §§
5(a)(8) and (a)(9)), and the Supplemental Appropriations and Rescissions Act of 1980.
Audit Reports With Questioned Costs
As defined by the Inspector General Act, the term “questioned cost” means a cost that is questioned by
OIG because of: (1) an alleged violation of a provision of law, regulation, contract, grant, cooperative
agreement, or other agreement or document governing the expenditure of funds; (2) a cost that is not
supported by adequate documentation at the time of the audit; or (3) the expenditure of funds for the
intended purpose is unnecessary or unreasonable. Questioned costs that HHS program officials have, in a
management decision, sustained or agreed, should not be charged to the Government are disallowed
costs. Superscripts indicate end notes that follow the tables below.
Table 1: Audit Reports With Questioned Costs
Number of Dollar Value Dollar Value
Description Reports Questioned Unsupported
Section 1
Reports for which no management decisions had been
made by the beginning of the reporting period1 91 $1,999,346,000 $556,839,000
Issued during the reporting period 45 $336,855,000 $0
Total Section 1 136 $2,336,201,000 $556,839,000
Section 2
Reports for which management decisions were made
during the reporting period2, 3
Disallowed costs 64 *$445,527,000 $717,000
Costs not disallowed 5 $59,198,000 $50,325,000
Total Section 2 69 $504,725,000 $51,042,000
* Audit receivables (expected recoveries)
Section 3
Reports for which no management decisions had been
made by the end of the reporting period
(Section 1 minus Section 2) 67 $1,831,476,000 $505,797,000
Section 4
Reports for which no management decisions were made
within 6 months of issuance4 30 $1,569,403,000 $505,797,000
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Table 1 End Notes
1
The opening balance was adjusted upward by $64.2 million because of a reevaluation of previously
issued recommendations.
2
Revisions to previously reported management decisions:
• A-06-15-00045, ACA Increased Primary Care Service Payments in Texas. CMS’s subsequent review
of additional documentation related to the 2009 Medicaid managed care rate, determined that
$10,514,389 of the questioned costs totaling $20,714,957, were allowable cost.
• A-02-16-01006, Payments Made by Novitas Solutions, Inc., to Hospitals for Certain Advanced
Radiation Therapy Services Did Not Fully Comply With Medicare Requirements. CMS determined
that the providers were not at fault for overpayments due to unclear CMS guidance/policy. As a
result, disallowed costs were reduced by $2,269,775.
• A-02-16-01007, Payments Made by National Government Services, Inc., to Hospitals for Certain
Advanced Radiation Therapy Services Did Not Comply With Medicare Requirements. CMS
determined that the providers were not at fault for overpayments due to unclear CMS
guidance/policy. As a result, disallowed cost was reduced by $1,535,144.
• A-07-16-05092, Mederi Caretenders Home Health Billed for Home Health Services That Did Not
Comply with Medicare Billing Requirements. Based on subsequent clinical review of records, an
appeals decision was partially favorable. Overpayment recoveries were reduced by $1,255,015.
• Not detailed are reductions to previously disallowed management decisions totaling $1.92 million.
3
Included are management decisions to disallow $62.14 million in questioned costs that were identified by
non-Federal auditors in audits of State and local governments, colleges and universities, and nonprofit
organizations receiving Federal awards conducted in accordance with Office of Management and Budget
Circular A-133. OIG is currently ensuring that work performed by these non-Federal auditors complies with
Federal audit standards; accordingly, OIG tracks, resolves, and reports on recommendations in these audits.
4
Because of administrative delays, some of which were beyond management control, resolution of the
following 30 audits were not completed within 6 months of issuance of the reports; however, agency
management has informed us that the agency is working to resolve the outstanding recommendations
before the end of the next semiannual reporting period.
Audits Not Completed Within 6 Months of Issuance
Audit CIN Audit Title
A-02-15-02013 CMS Did Not Always Accurately Authorize Financial Assistance Payments to
Qualified Health Plan Issuers in Accordance With Federal Requirements
During the 2014 Benefit Year, August 2018, $939,287,686
A-02-15-01010 New Jersey Claimed Hundreds of Millions in Unallowable or Unsupported
Medicaid School-Based Reimbursement, November 2017, $300,452,930
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A-02-14-02017 New York Misallocated Costs to Establishment Grants for a Health Insurance
Marketplace, November 2016, $149,654,512
A-02-16-02007 Lincoln Hall Boys’ Haven, an Administration for Children and Families
Grantee, Did Not Always Comply With Applicable Federal and State Policies
and Requirements, February 2019, $29,807,160
A-01-14-02503 Maryland Misallocated Millions To Establishment Grants For A Health
Insurance Marketplace, March 2015, $28,400,000
A-04-14-07050 Kentucky Misallocated Millions to Establishment Grants for a Health Insurance
Marketplace, February 2017, $25,530,429
A-02-15-02008 New York Did Not Comply with Federal Grant Requirements for Allocating
and Claiming Marketplace Contract Costs, December 2017, $20,415,344
A-01-17-00506 Medicare Paid Twice for Ambulance Services Subject to Skilled Nursing Facility
Consolidated Billing Requirements, February 2019, $19,938,117
A-07-15-04226 Not All of Missouri's Child Care Subsidy Program Payments Complied With
Federal and State Requirements, November 2017, $19,076,167
A-01-15-02500 Vermont Did Not Properly Allocate Millions to Establishment Grants for a
Health Insurance Marketplace, September 2016, $11,243,006
A-02-14-02024 Newark Preschool Council, Inc., Did Not Always Comply With Head Start
Requirements, February 2017, $9,950,556
A-02-16-02013 The Children's Village Inc., an Administration for Children and Families
Grantee, Did Not Always Comply With Applicable Federal and State Policies
and Requirements, April 2019, $2,623,785
A-07-17-02808 The Colorado Health Insurance Marketplace’s Financial Management System
Did Not Always Comply With Federal Requirements, July 2018, $2,567,604
A-09-19-03003 CMS’s Controls Over Assigning Medicare Beneficiary Identifiers and Mailing
New Medicare Cards Were Generally Effective but Could Be Improved in Some
Areas, January 2020, $2,263,465
A-07-11-06013 The University Of Colorado Denver Did Not Always Claim Selected Costs
Charged Directly to Department of Health And Human Services Awards in
Accordance With Federal Regulations, June 2013, $1,419,524
A-05-14-00045 The Minnesota Marketplace Misallocated Federal Funds and Claimed
Unallowable Costs, November 2016, $1,279,677
A-09-18-03020 CMS Made an Estimated $93.6 Million in Incorrect Medicare Electronic Health
Record Incentive Payments to Acute-Care Hospitals, or Less Than 1 Percent of
$10.8 Billion in Total Incentive Payments, December 2019, $1,266,111
A-01-18-02501 Vermont’s Office of Child Support Needs Better Oversight Over Its
Administrative Costs Claimed, September 2019, $1,058,309
A-09-14-01007 Nevada Misallocated Costs for Establishing a Health Insurance Marketplace to
Its Establishment Grants, February 2016, $893,464
A-02-18-01003 New York Improperly Claimed Medicaid Reimbursement for Some Bridges to
Health Waiver Program Services That Were Not in Accordance With an
Approved Plan of Care and Did Not Meet Documentation Requirements,
January 2020, $614,530
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A-07-18-04106 The Fort Peck Assiniboine and Sioux Tribes Improperly Administered Some
Low-Income Home Energy Assistance Program Funds for Fiscal Years 2011
Through 2015, August 2018, $436,765
A-09-17-01002 Florence Crittenton Services of Orange County, Inc., Did Not Always Claim
Expenditures in Accordance With Federal Requirements, October 2018,
$342,263
A-01-18-02503 Pathways for Children Needs To Strengthen Documentation Requirements,
November 2019; $341,637
A-12-17-00002 The Office of the Secretary of Health and Human Services Did Not Comply
With Federal Regulations for Chartered Aircraft and Other Government Travel
Related to Former Secretary Price, July 2018, $341,616
A-05-18-00008 The Next Door Foundation Claimed Unallowable Indirect Costs and Did Not
Document the Funding Source of Program Expenditures in Accordance With
Federal Requirements, September 2019, $142,104
A-09-18-03018 Medicare Improperly Paid Suppliers an Estimated $92.5 Million for Inhalation
Drugs, October 2019, $36,825
A-04-18-02010 Florida's Refugee Medical Assistance Payments Were Generally Allowable,
January 2020, $8,772
A-06-18-07002 Seminole Nation of Oklahoma Did Not Adequately Operate and Manage Its
Head Start Program, December 2019, $5,095
A-06-18-02002 Opportunities for Williamson and Burnet Counties Had Ineffective Accounting
Controls and Used Unapproved or Questionable Cost Allocation Methods,
February 2020, $3,207
A-05-18-00015 The University of Minnesota Complied With Federal Requirements To Perform
Risk Assessments and Monitor Subrecipients, November 2019, $1,924
TOTAL CINS: 30
TOTAL AMOUNT: $1,569,403,000
Audit Reports With Funds Recommended To Be Put to Better Use
The phrase “recommendations that funds be put to better use” means that funds could be used more
efficiently if management took action to implement an OIG recommendation through reductions in
outlays, deobligation of funds, and/or avoidance of unnecessary expenditures. Table 2 reports HHS
program officials’ decisions to take action on these audit recommendations.
Table 2: Audit Reports With Funds Put to Better Use
Number of
Description Reports Dollar Value
Section 1
Reports for which no management decisions had been made by the
beginning of the reporting period 13 $16,392,253,000
Reports issued during the reporting period 7 $1,980,419,000
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Total Section 1 20 $18,372,672,000
Section 2
Reports for which management decisions were made during the
reporting period
Value of recommendations agreed to by management
Based on proposed management action 4 $750,481,000
Based on proposed legislative action 0 $0
Value of recommendations not agreed to by management 0 $0
Total Section 2 4 $750,481,000
Section 3
Reports for which no management decisions had been made by the
end of the reporting period1 (Sec. 1 minus Sec. 2). 16 $17,622,191,000
Table 2 End Notes
1
Because of administrative delays, some of which were beyond management control, 10 of the 16 audits open at end
of the period were not resolved within 6 months of issuance of reports. OIG is working with management to reach
resolution on these recommendations before the end of the next semiannual reporting period.
Audits Open at End of the Period
Audit CIN Audit Title
A-05-12-00020 Medicare and Beneficiaries Could Save Billions if CMS Reduces Hospital
Outpatient Department Payment Rates for Ambulatory Surgical Center-
Approved Procedures To Ambulatory Surgical Center Payment Rates, April
2014, $15,000,000,000
A-05-17-00033 Medicare Allowable Amounts for Certain Orthotic Devices Are Not
Comparable With Payments Made by Select Non-Medicare Payers, October
2019, $337,547,542
A-03-16-03001 The Centers For Medicare & Medicaid Services Did Not Identify and Report
Potential Antideficiency Act Violations for 12 Contracts Used To Establish the
Federal Marketplace Under the Affordable Care Act, February 2020,
$186,993,209
A-06-17-08004 Medicare Part D Is Still Paying Millions for Drugs Already Paid for Under the
Part A Hospice Benefit, August 2019, $160,800,000
A-05-16-00060 Hospitals Received Millions in Excessive Outlier Payments Because CMS Limits
the Reconciliation Process, November 2019, $125,000,000
A-09-18-03020 CMS Made An Estimated $93.6 Million in Incorrect Medicare Electronic Health
Record Incentive Payments to Acute-Care Hospitals, or Less Than 1 Percent of
$10.8 Billion in Total Incentive Payments, December 2019, $93,591,531
A-09-19-03007 Medicare Improperly Paid Acute-Care Hospitals $54.4 Million for Inpatient
Claims Subject to the Post-Acute-Care Transfer Policy, November 2019,
$70,011,503
A-03-13-03002 HHS Did Not Identify and Report Antideficiency Act Violations, May 2017:
$49,445,025
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A-02-18-01003 New York Improperly Claimed Medicaid Reimbursement for Some Bridges to
Health Waiver Program Services That Were Not in Accordance With an
Approved Plan of Care and Did Not Meet Documentation Requirements,
January 2020, $3,281,635
A-09-18-03030 Medicare Incorrectly Paid Providers for Emergency Ambulance Transports
From Hospitals to Skilled Nursing Facilities, September 2019, $968,718
TOTAL CINS: 10
TOTAL AMOUNT: $16,027,639,000
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Appendix B: Savings Decisions Supported by
OIG Recommendations
The table below lists policy decisions reflected in legislation, regulations, or other directives from prior
years that are supported by OIG recommendations and for which cost savings were estimated, usually by
third parties, such as the Congressional Budget Office (CBO) or HHS actuaries. Of the $23.9 billion in
savings estimated for the decisions below, $2.4 billion was attributed to FY 2020. This figure reflects the
most recent available savings estimates issued by the third-party appraiser; actual savings may be higher
or lower.
After laws involving HHS programs are enacted, OIG analyzes the laws to identify the provisions that
comport with our prior recommendations, that is, whether our recommendations support the decisions
that were made. A similar process occurs with respect to administrative decisions in regulations or other
directives or agreements (e.g., modifications to Medicaid State Plans). Most of the decisions reported in
this appendix reflect ways in which funds could be put to better use, such as reductions in Federal
spending or the avoidance of unnecessary or inappropriate expenditures, or both.
To quantify the value of administrative decisions, we use estimates developed by, or in consultation with,
HHS OpDivs or StaffDivs. To quantify the value of legislative decisions, we generally use estimates
developed by CBO. CBO projects the annual increases or reductions in Federal spending that it expects
would result from enacting the legislation. The policy decisions shown on the table beginning on the next
page mirror both OIG’s recommendations and the contributions of others, such as HHS staff and OpDivs,
congressional committees, and the GAO.
Centers for Medicare & Medicaid Services Programs
OIG Recommendations Policy Decisions Estimated Savings
Calculation of AMP under the Section 1603 of the Continuing Appropriations $70,000,000
Medicaid Drug Rebate Program Act, 2020, and Health Extenders Act of 2019
Seek legislative change to exclude amended section 1927(k)(1)(C) of the Social
authorized generic drug Security Act (the Act) to exclude generic drug
transactions to secondary transactions to secondary manufacturers in
manufacturers from the AMP the brand name drug's AMP calculations. CBO
calculation of the brand name estimated savings of $3.15 billion over 10
drug. The recommendation years.
reflected findings in OIG report
A-06-18-04002.
Medicaid Rebate for Generic Drugs Section 602 of the Bipartisan Budget Act of $120,000,000
2015 (P.L. No. 114-74) (See Tab 2) was enacted
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Generic drug price increases and included provisions extending the
exceeded the specified statutory additional rebate to generic drugs. The
inflation factor applicable to brand- additional rebate for generic drugs will apply
name drugs for 22 percent of the to rebate periods beginning with the first
quarterly AMPs that OIG reviewed. quarter of 2017. CBO estimated savings of
If the provision for brand-name $1.008 billion over 10 years.
drugs were extended to generic
drugs, the Medicaid program
would receive additional rebates.
This finding was noted in OIG
reports A-06-07-00042 and
A-06-15-00030.
Hospital Transfer Policy for Early Section 53109 of the Bipartisan Budget Act $500,000,000
Discharges to Hospice Care of 2018 modified existing law to require
Change regulations or pursue a that, beginning in FY 2019, discharges to
legislative change, if necessary, to hospice care would also qualify as a post-
establish a hospital transfer acute-care transfer and be subject to
payment policy for early payment adjustments.
discharges to hospice care. The
recommendation reflected
findings in OIG report A-01-12-
00507.
Reductions in Medicare Bad Debt Section 3201 of the Middle Class Tax $1,390,000,000
Reimbursement Extension and Job Creation Act of 2012
Seek legislative authority to applied percentage reductions in bad debt
eliminate (or reduce) Medicare reimbursement to all providers eligible to
payments to hospitals for bad receive bad debt reimbursement. CMS
debt associated with beneficiaries’ estimated savings to Medicare of $10.92
failure to pay their deductibles billion over 10 years with $1.39 billion
and coinsurance. The attributed to FY 2020. (77 Fed. Reg. 67450,
recommendations reflected 67523 (Nov. 9, 2012))
findings in OIG report A-14-90-
00339 and subsequent reviews.
Payments for Prescription Drugs CMS issued a final rule about the Contract $172,000,000
Provided to Incarcerated Year 2015 Policy and Technical Changes to
Beneficiaries the Medicare Advantage and the Medicare
Work with prescription drug plan Prescription Drug programs. The eligibility
sponsors to identify and resolve requirements to enroll in Medicare
improper Medicare Part D Advantage and Part D are outlined in
payments made for prescription Sections 1851(a)(3)(B) and 1860D-1(a)(3)(A)
drugs provided to incarcerated of the Act. To enroll in Medicare
beneficiaries. The Advantage, a beneficiary must be entitled to
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recommendation reflected Part A and enrolled in Part B. To enroll in
findings in OIG report A-07-12- Part D, a beneficiary must be entitled to Part
06035. A and/or enrolled in Part B. An incarcerated
beneficiary is not precluded from meeting
the eligibility requirements for Part A and
Part B, but in general, no Medicare Payment
is made for these individuals. CMS
promulgated regulations to require Part D
plans to disenroll incarcerated beneficiaries.
CMS estimated savings of $1.6 billion over
10 years with $172 million attributed to FY
2020. (79 Fed. Reg. 29844, 29953 (May 23,
2014))
Medicare Payments for Vacuum Section 203 of the Achieving A Better Life $44,400,000
Erection Systems Experience Act of 2014 implements changes
Seek legislative authority to to treat VES prosthetic devices and related
include vacuum erection systems accessories as statutorily noncovered in the
(VES) in the Competitive Bidding same manner that erectile dysfunction
program and then implement a drugs are treated in Medicare Part D. CBO
National Mail-Order Competitive estimated savings of $444 million over 10
Bidding Program for VES. The years.
recommendation reflected
findings in OIG report A-07-12-
05024.
Excessive Medicaid Payments to Agreement between CMS and the State of $100,000,000
New York State New York, dated March 20, 2015, to repay
Ensure that expenditures related $1.95 billion over 12 years with $100 million
to developmental centers and attributed to FY 2020.
other intermediate care facilities
and any revised payment
methodology be consistent with
efficiency and economy. The
recommendation reflected
findings in OIG reports A-02-11-
01029, A-02-13-01008, and other
reviews.
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Appendix C: Peer-Review Results
The Inspector General Act of 1978, as amended, requires OIGs to report the results of peer reviews of their
operations conducted by other OIGs, the date of the last peer review, outstanding recommendations from
peer reviews, and peer reviews conducted by an OIG of other OIGs in the semiannual period. Peer reviews
are conducted by member organizations of the Council of the Inspectors General on Integrity and
Efficiency (CIGIE).
Office of Audit Services
During this semiannual reporting period, no peer reviews involving OAS were completed. Information
concerning OAS’s peer-review activity during a prior reporting period is also listed below.
OAS Date Reviewing Office Office Reviewed
April 2019 HHS-OIG, OAS U.S. Department of
Transportation (DOT) OIG
The system of quality control for the audit organization of DOT OIG in effect for the year ending
September 30, 2018, has been suitably designed and complied with to provide DOT OIG with
reasonable assurance of performing and reporting in conformity with applicable professional
standards in all material respects. Federal audit organizations can receive a rating of pass, pass
with deficiencies, or fail. DOT OIG received a peer-review rating of pass.
OAS Date Reviewing Office Office Reviewed
March 2018 U.S. Postal Service OIG HHS-OIG, OAS
The system of quality control for the audit organization of HHS-OIG in effect for the year ending
September 30, 2017, has been suitably designed and complied with to provide HHS-OIG with
reasonable assurance of performing and reporting in conformity with applicable professional
standards in all material respects. Federal audit organizations can receive a rating of pass, pass
with deficiencies, or fail. HHS-OIG received a peer-review rating of pass.
Office of Investigations
During this semiannual reporting period, no peer reviews involving OI were completed. Listed below is
information concerning OI’s peer-review activities during prior reporting periods.
OI Date Reviewing Office Office Reviewed
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October 2018 SSA OIG HHS-OIG, OI
The system of internal safeguards and management procedures for the investigative function of
HHS-OIG in effect for the year ending September 30, 2018, was in full compliance with the quality
standards established by CIGIE and the Attorney General’s guidelines.
OI Date Reviewing Office Office Reviewed
August 2017 HHS-OIG, OI U.S. Postal Service OIG
The system of internal safeguards and management procedures for the investigative function of
the U.S. Postal Service OIG in effect for the year ending September 30, 2015, was in full compliance
with the quality standards established by CIGIE and the Attorney General’s guidelines.
Office of Evaluation and Inspections
During this semiannual reporting period, one peer review involving OEI was completed. Information
concerning OEI’s peer-review activity during a prior reporting period is also listed below.
OEI Date Reviewing Office Office Reviewed
June 2020 HHS-OIG, OEI Department of Veterans Affairs
(VA) OIG
The Department of Veterans Affairs, Office of Inspector General, Office of Audits and Evaluations
and Office of Healthcare Inspections (collectively VA-OIG) policies and procedures addressed the
Quality Standards for Inspection and Evaluation of the Council of the Inspectors General on
Integrity and Efficiency. The seven covered standards consist of: Quality Control; Planning; Data
Collections and Analysis; Evidence; Records Maintenance; Reporting; and Followup. In addition,
each of the four reviewed VA-OIG reports complied with those standards and the VA-OIG’s
internal policies and procedures. As a result of our findings, there are no recommendations
associated with this external peer review. The report also noted a VA-OIG beneficial practice of
using specialized staff to conduct independent referencing reviews of its reports to achieve greater
consistency in its quality assurance processes.
OEI Date Reviewing Office Office Reviewed
September 2019 HHS-OIG, OEI U.S. Department of Interior
(DOI) OIG
The DOI OIG Inspection and Evaluation component’s policies and procedures mostly met CIGIE’s
Quality Standards for Inspection and Evaluation (Blue Book) standards. We reviewed four reports:
two fully met the applicable Blue Book standards and two did not. DOI OIG concurred with
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recommendations related to Evidence, Planning, and Data Collection and Analysis but did not
concur with recommendations related to Reporting.
OEI Date Reviewing Office Office Reviewed
September 2018 HHS-OIG, OEI U.S. Department of Defense
(DoD) OIG
The DoD OIG Inspection and Evaluation components’ policies and procedures generally met
CIGIE’s Quality Standards for Inspection and Evaluation (Blue Book) standards. In addition, the
10 reports reviewed generally met the applicable Blue Book standards. Onsite visits for these
reviews were conducted from October 2, 2017, through November 17, 2017.
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Appendix D: Summary of Sanction Authorities
The Inspector General Act of 1978, as amended, specifies requirements for semiannual reports to be made
to the HHS Secretary for transmittal to Congress. A selection of other authorities appears below.
Program Exclusions
The Social Security Act, § 1128 (42 U.S.C. § 1320a-7), provides several grounds for excluding individuals and
entities from participation in Medicare, Medicaid, and other Federal health care programs. Exclusions are
required (mandatory exclusion) for individuals and entities convicted of the following types of criminal
offenses: (1) Medicare or Medicaid fraud; (2) patient abuse or neglect; (3) felonies for other health care
fraud; and (4) felonies for illegal manufacture, distribution, prescription, or dispensing of controlled
substances.
OIG is authorized (permissive exclusion) to exclude individuals and entities on several other grounds,
including misdemeanors for other health care fraud (other than Medicare or Medicaid); suspension or
revocation of a license to provide health care for reasons bearing on professional competence,
professional performance or financial integrity; provision of unnecessary or substandard services;
submission of false or fraudulent claims to a Federal health care program; or engaging in unlawful kickback
arrangements.
The ACA added another basis for imposing a permissive exclusion, that is, knowingly making, or causing to
be made, any false statements or omissions in any application, bid, or contract to participate as a provider
in a Federal health care program, including managed care programs under Medicare and Medicaid, as well
as Medicare’s prescription drug program.
Providers subject to exclusion are granted due process rights. These include a hearing before an
administrative law judge and appeals to the HHS Departmental Appeals Board and Federal district and
appellate courts regarding the basis for and the length of the exclusion.
Civil Monetary Penalties Law
The CMPL of the Social Security Act, 1128A (42 U.S.C. § 1320a 7a), imposes penalties, assessments, and
exclusion from participation in Federal health care programs for engaging in certain activities. For
example, a person who submits, or causes to be submitted, to a Federal health care program a claim for
items and services that the person knows, or should know, is false or fraudulent is subject to a penalty of
up to $15,270 for each item or service falsely or fraudulently claimed, an assessment of up to three times
the amount falsely or fraudulently claimed, and exclusion.
For the purposes of the CMPL, “should know” is defined to mean that the person acted in reckless
disregard or deliberate ignorance of the truth or falsity of the claim. The law and its implementing
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regulations also authorize actions for a variety of other violations, including submission of claims for items
or services furnished by an excluded person; requests for payment in violation of an assignment
agreement; violations of rules regarding the possession, use, and transfer of biological agents and toxins;
and payment or receipt of remuneration in violation of the anti-kickback statute (42 U.S.C. § 1320a 7b (b)).
The ACA added more grounds for imposing CMPs. These include, among other types of conduct,
knowingly making, or causing to be made, any false statements or omissions in any application, bid, or
contract to participate as a provider in a Federal health care program (including Medicare and Medicaid
managed care programs and Medicare Part D); the ACA authorizes a penalty of up to $55,262 for each
false statement, as well as activities relating to fraudulent marketing by MCOs, their employees, or their
agents.
The 21st Century Cures Act (enacted on December 13, 2016) added more grounds for imposing CMPs,
assessments, and exclusion from Federal health care programs for fraudulent conduct in an HHS grant,
contract, or other agreement. OIG may assess CMPs of up to $10,000 per claim and assessments of up
to three times the amount claimed for knowingly presenting a false or fraudulent claim. In addition, OIG
may impose a penalty of up to $50,000 and assessments of up to three times the amount of funds at issue:
(1) for each instance of knowingly making a false statement in a document required to be submitted to
receive funds under an HHS contract, grant, or other agreement; (2) for knowingly making or using a false
record or statement that is material to a false or fraudulent claim; and (3) for knowingly making or using a
false record or statement material to an obligation to pay or transmit funds or property owed to HHS. OIG
may impose a penalty of up to $10,000 per day and assessments of up to three times the amount at issue
for knowingly concealing, or knowingly and improperly avoiding or decreasing, an obligation owed to HHS
with respect to an HHS grant, contract, or other agreement. Finally, HHS-OIG may impose a penalty of up
to $15,000 per day for failing to grant timely access to OIG upon reasonable request for audits or to carry
out other statutory functions in matters involving an HHS grant, contract, or other agreement.
Patient Dumping
The Social Security Act, §1867 (42 U.S.C. § 1395dd), provides that when an individual goes to the ER of a
Medicare-participating hospital, the hospital must provide an appropriate medical screening examination
to determine whether that individual has an emergency medical condition. If an individual has such a
condition, the hospital must provide either treatment to stabilize the condition or an appropriate transfer
to another medical facility.
If a transfer is ordered, the transferring hospital must provide stabilizing treatment to minimize the risks of
transfer and must ensure that the receiving hospital agrees to the transfer and has available space and
qualified personnel to treat the individual. In addition, the transferring hospital must effect the transfer
through qualified personnel and transportation equipment. Further, a participating hospital with
specialized capabilities or facilities may not refuse to accept an appropriate transfer of an individual who
needs services if the hospital has the capacity to treat the individual.
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OIG is authorized to collect CMPs of up to $53,484 against small hospitals (fewer than 100 beds) and up
to $106,965 against larger hospitals (100 beds or more) for each instance in which the hospital negligently
violated any of the section 1867 requirements. In addition, OIG may collect a penalty of up to
$106,965 from a responsible physician for each negligent violation of any of the section 1867 requirements
and, in some circumstances, may exclude a responsible physician.
Anti-Kickback Statute and Civil False Claims Act Enforcement Authorities
The Anti-Kickback Statute
The anti-kickback statute authorizes penalties against anyone who knowingly and willfully solicits,
receives, offers, or pays remuneration, in cash or in kind, to induce or in return for: (1) referring an
individual to a person or an entity for the furnishing, or arranging for the furnishing, of any item or
service payable under the Federal health care programs; or (2) purchasing, leasing, or ordering, or
arranging for or recommending the purchasing, leasing, or ordering, of any good, facility, service,
or item payable under the Federal health care programs (Social Security Act, § 1128B(b) (42 U.S.C. §
1320a-7b(b)).
Individuals and entities that engage in unlawful referral or kickback schemes may be subject to
criminal penalties under the general criminal anti-kickback statute; a CMP under OIG’s authority
pursuant to the Social Security Act, § 1127(a)(7) (42 U.S.C. § 1320a-7a); and/or program exclusion
under OIG’s permissive exclusion authority under the Social Security Act, § 1128(b)(7) (42 U.S.C. §
1320a-7(b)(7)).
The False Claims Act
Under the False Claims Act, as amended by the False Claims Amendments Act of 1986 (31 U.S.C. §§
3729–3733), a person or an entity is liable for up to treble damages and a penalty between
$11,181 and $22,363 for each false claim it knowingly submits, or causes to be submitted, to a
Federal program. Similarly, a person or an entity is liable under the False Claims Act if it knowingly
makes or uses, or causes to be made or used, a false record or statement to have a false claim
paid. The False Claims Act defines “knowing” to include the traditional definition and also
instances in which the person acted in deliberate ignorance or reckless disregard of the truth or
falsity of the information. Under the False Claims Act, no specific intent to defraud is required.
Further, the False Claims Act contains a qui tam, or whistleblower, provision that allows a private
individual to file a lawsuit on behalf of the United States and entitles that whistleblower to a
percentage of any fraud recoveries. The False Claims Act was amended again in 2009 in response
to recent Federal court decisions that narrowed the law’s applicability. Among other things, these
amendments clarify the reach of the False Claims Act to false claims submitted to contractors or
grantees of the Federal Government.
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Appendix E: Reporting Requirements in the
Inspector General Act of 1978
The reporting requirements of the Inspector General Act of 1978, as amended, are listed in the following
table along with the location of the required information.
Section Requirement Location
Section 4
(a)(2) Review of legislation and regulations “Other HHS-Related
Reviews and
Investigations” section
Section 5
(a)(1) Significant problems, abuses, and deficiencies Throughout this report
(a)(2) Recommendations with respect to significant problems, Throughout this report
abuses, and deficiencies
(a)(3) Prior significant recommendations on which corrective Solutions To Reduce Fraud,
action has not been completed Waste, and Abuse in HHS
Programs: Top
Unimplemented
Recommendations
(previously known as the
Compendium of
Unimplemented
Recommendations)
(a)(4) Matters referred to prosecutive authorities “Legal and Investigative
Activities Related to the
Medicare and Medicaid
Programs” section
(a)(5) Summary of instances in which information requested by None for this reporting
OIG was refused period
(a)(6) List of audit reports Submitted to the Secretary
under separate cover
(a)(7) Summary of significant reports Throughout this report
(a)(8) Statistical Table 1―Reports With Questioned Costs Appendix A
(a)(9) Statistical Table 2―Funds Recommended To Be Put to Appendix A
Better Use
(a)(10) Summary of previous audit reports without management Appendix A
decisions, in which no establishment comment was returned
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Section Requirement Location
within 60 days, and in which there are any outstanding
unimplemented recommendations
(a)(11) Description and explanation of revised management Appendix A
decisions
(a)(12) Management decisions with which the Inspector General None for this reporting
disagrees period
(a)(13) Information required by the Federal Information Security “Other HHS-Related
Management Act. Reviews and Investigative
Activities” section
(a)(14)-(16) Results of peer reviews of HHS-OIG conducted by other Appendix C
OIGs or the date of the last peer review, outstanding
recommendations from peer reviews, and peer reviews
conducted by HHS-OIG of other OIGs
(a)(17) Investigative statistical tables Appendix F
(a)(18) Metrics description for statistical tables Appendix F
(a)(19) Investigations on senior Government employees Appendix F
(a)(20) Description of whistleblower retaliation instances Appendix F
(a)(21) Description of attempts to interfere with OIG independence Appendix F
(a)(22) Description of closed and nondisclosed reports and Appendix F
investigations regarding senior Government employees
Other Reporting Requirements
Section Requirement Location
845 Significant contract audits required to be reported pursuant “Other HHS-Related
to the National Defense Authorization Act for FY 2008 Reviews and
(P.L. No. 110-181), § 845. Investigations” section
205 Pursuant to HIPAA (P.L. No. 104-191), § 205, the Inspector Appendix G
General is required to solicit proposals annually via a Federal
Register notice for developing new and modifying existing
safe harbors to the anti-kickback statute of the Social
Security Act, § 1128(b) and for developing special fraud
alerts. The Inspector General is also required to report
annually to Congress on the status of the proposals received
related to new or modified safe harbors.
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Section Requirement Location
1553 Pursuant to the American Recovery and Reinvestment Act of “Other HHS-Related
2009, P.L. No. 111-5, § 1553, OIG reports to Congress the Reviews and
retaliation complaint investigations it decided not to Investigations” section
conduct or continue during the period.
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Appendix F: Reporting Requirements in the
Inspector General Empowerment Act of 2016
The Inspector General Empowerment Act of 2016 establishes new reporting requirements for the
Semiannual Reports. These requirements amend portions of § 5 of the Inspector General Act. The
requirements are below in italics, followed by OIG’s responses.
Each Inspector General shall, not later than April 30 and October 31 of each year, prepare
semiannual reports summarizing the activities of the Office during the immediately preceding
6-month periods ending March 31 and September 30. Such reports shall include, but need not be
limited to-
(10) A summary of audit, inspection, and evaluation reports issued before the commencement of the
reporting period-
(A) for which no management decision has been made by the end of the reporting period (including
the date and title of each such report), an explanation of the reasons such management decision has
not been made, and a statement concerning the desired timetable for achieving a management
decision on each such report;
For audit and evaluation reports issued from FY 2011 through FY 2020, OIG had a total of 101
reports with overdue final management decisions (FMD) as of the end of this reporting period. 2
The breakdown of those 101 reports by HHS OpDiv is as follows:
OpDiv Overdue FMDs
ACF 17
CDC 1
CMS 44
FDA 1
IHS 13
NIH 6
OASH 1
OS 17
SAMHSA 1
2 OIG can track the status of management decisions for all reports back to FY 2011. OIG can track the status of management
decisions for audit reports back to FY 1990. We have identified three additional audit reports (one CMS, one FDA, and one OS)
with overdue management decisions from FYs 1990 through 2010.
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OIG is unable to provide reasons and timetables for each of these overdue management decisions,
because of the volume and that OIG did not historically track this information.
(B) for which no establishment comment was returned within 60 days of providing the report to the
establishment; and
For draft reports that include recommendations, OIG typically requests establishment comments
within 30 days. In some instances, OIG grants extensions when requested and appropriate. When
OIG does not receive establishment comments or a request for extension within the 30-day
timeframe, OIG typically issues the report and notes the lack of establishment comments.
For this semiannual reporting period, OIG had no reports for which no establishment comment
was returned within 60 days of providing the report to the establishment.
(C) for which there are any outstanding unimplemented recommendations, including the aggregate
potential cost savings of those recommendations.
OIG is actively tracking 1,441 unimplemented open recommendations made in reports issued since
FY 2011. Given the volume of recommendations OIG makes each year, the table below reflects
summary data by FY:
FY (2011– No. of Reports With No. of Dollar Value of
2020) Unimplemented Unimplemented Aggregate Potential
Recommendations Recommendations Cost Savings
2011 13 20 $446,994,129
2012 23 28 $397,437,195
2013 30 45 $235,963,777
2014 33 56 $15,142,396,350
2015 28 46 $333,957,018
2016 28 70 $191,570,237
2017 39 106 $1,116,136,306
2018 54 175 $2,213,559,395
2019 88 327 $878,622,570
2020 146 568 $3,189,892,988
Totals 482 1441 $24,146,529,965
OIG annually produces a Solutions To Reduce Fraud, Waste, and Abuse in HHS Programs: OIG’s Top
Recommendations (previously known as the Compendium of Unimplemented Recommendations),
which constitutes OIG’s response to a specific requirement of the Inspector General Act, as
amended (§ 5(a)(3)). It identifies significant recommendations with respect to problems, abuses, or
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deficiencies for which corrective actions have not been completed. It also includes an appendix
listing OIG’s significant unimplemented recommendations, which represent opportunities to
achieve expected impact through cost savings, improvements in program effectiveness and
efficiency, or increasing quality of care and safety of beneficiaries. In OIG’s view, these
recommendations would most positively impact HHS programs in terms of cost savings and/or
quality improvements and should therefore be prioritized for implementation.
(17) Statistical tables showing-
(A) the total number of investigative reports issued during the reporting period;
(B) the total number of persons referred to the DOJ for criminal prosecution during the reporting
period;
(C) the total number of persons referred to State and local prosecuting authorities for criminal
prosecution during the reporting period; and
(D) the total number of indictments and criminal information during the reporting period that
resulted from any prior referral to prosecuting authorities;
Total number of investigative reports issued during the reporting period, None
including Management Implication Reports and Investigative Advisories
Total number of persons referred 3 to Federal prosecuting authorities for 1,635
criminal prosecution during the reporting period 4
Total number of persons referred to State and local prosecuting 112
authorities for criminal prosecutions during the reporting period
Total number of Federal indictments and criminal information during the 277
reporting period that resulted from any prior referral to prosecuting
authorities
Total number of State and local indictments and criminal information 27
during the reporting period that resulted from any prior referral to
prosecuting authorities
(18) A description of the metrics used for developing the data for the statistical tables under
paragraph (17);
Regarding (17)(A), OIG considers Investigative Reports as Management Implication Reports
and Investigative Advisories. A Management Implication Report identifies systemic
weaknesses or vulnerabilities within HHS programs, which are generally identified during the
3 A referral includes OIG presentations to DOJ and/or State/local prosecutorial authorities.
4 OIG counts “persons” as both individuals and entities.
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course of an OIG investigation and could lead to fraud, waste, or abuse. It provides
recommendations to correct or minimize the problem. Corrective actions may require
administrative, procedural, policy, regulatory, or legislative change. When a Management
Implication Report is issued to an HHS OpDiv or StaffDiv, it is generally signed by the Inspector
General. Investigative Advisories are similar documents that bring renewed attention to an
identified HHS issue and are generally signed by the Deputy Inspector General for
Investigations.
Regarding (17)(B) and (C), OIG defines this measure as the term “presentations” to both
Federal and State/local prosecuting jurisdictions as the representation of the work we do. For
example, when OIG opens an investigation, it evaluates the complaint and decides whether to
“present” the matter for prosecution. Generally, if the case has prosecutorial merit, and is
accepted for Federal prosecution, OIG works with DOJ as the primary investigative agency, as
opposed to referring the matter to DOJ without further involvement on OIG's part. OIG works
with State and local prosecutorial authorities in addition to working with DOJ.
Regarding (17)(D), the table above provides the number of indictments/criminal information
during the semiannual reporting period, including sealed indictments/criminal information.
However, the information cannot be limited to only those that occurred as a result of a
presentation in a previous period. In certain situations, the presentation and charging dates
are in the same reporting period.
(19) A report on each investigation conducted by the Office involving a senior Government employee
where allegations of misconduct were substantiated, including a detailed description of-
(A) the facts and circumstances of the investigation; and
(B) the status and disposition of the matter, including-
(i) if the matter was referred to the Department of Justice, the date of the referral; and
(ii) if the Department of Justice declined the referral, the date of the declination;
To respond fully to this subparagraph, OIG would need to make a finding of misconduct. However,
OIG does not make findings regarding its investigations relating to substantiated allegations of
departmental employee misconduct. Our reports relay the facts obtained during the investigations
(e.g., parties involved, dates of events) related to any substantiated allegations. At the conclusion
of an OIG investigation related to substantiated allegations concerning possible employee
misconduct, OIG provides a report to management in the employing agency. The agency
management makes determinations of employee misconduct. The disposition of the matter and
any resulting administrative actions are taken by the agency.
However, we request from the agency a copy of an SF-50 documenting a personnel action, if one is
taken. To the extent that we have information regarding subsequent administrative action, OIG can
provide that information. However, because there are sometimes settlement agreements that may
impact the final action, OIG may not have a complete record of the disposition of the investigation.
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Accordingly, such information might be more efficiently and effectively provided directly by the
employing agency.
For this section, OIG describes investigations during this reporting period, both criminal and
administrative, involving senior Government employees for whom allegations of misconduct were
substantiated. The descriptions below include a level of detail appropriate for each investigation,
depending on whether the case details were available in public documents. During this reporting
period, OIG investigated no senior Government employee for misconduct.
(20) A detailed description of any instance of whistleblower retaliation, including information about
the official found to have engaged in retaliation and what, if any, consequences the establishment
imposed to hold that official accountable;
For departmental agencies, OIG conducts investigations and gathers facts related to whistleblower
complaints. Before 2015, OIG made no determinations as to whether retaliatory action had been
taken. However, to better facilitate the report review process, OIG changed its process in 2015 to
include findings in its reports as to whether it was more likely than not that whistleblower
retaliation had occurred. Although OIG now includes these findings in its reports, it does not make
recommendations as to what, if any, corrective action(s) should be taken.
During the time period from April 1, 2020, through September 30, 2020, OIG did not issue any
reports that included findings of retaliation.
When determining the level of detail to provide for a description of any instance of whistleblower
retaliation, OIG is always mindful of the risk that a detailed description of the allegation could
inadvertently reveal the whistleblower’s identity, thus having a chilling effect on future
whistleblowers.
(21) A detailed description of any attempt by the establishment to interfere with the independence of
the Office, including-
(A) with budget constraints designed to limit the capabilities of the Office; and
(B) incidents where the establishment has resisted or objected to oversight activities of the Office
or restricted or significantly delayed access to information, including the justification of the
establishment for such action; and
Although there have been instances in which HHS agencies have questioned OIG oversight
activities or have not provided all information in the precise content, format, and timeline as
requested, OIG has not identified any instances in which HHS interfered with the independence of
OIG during this reporting period. OIG would immediately notify Congress if it were unable to
resolve these issues within HHS.
(22) Detailed descriptions of the particular circumstances of each-
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(A) inspection, evaluation, and audit conducted by the Office that is closed and was not
disclosed to the public; and
The table below lists evaluation and audit reports for this semiannual reporting period that did not
result in public reports. However, in some circumstances, a public summary of these nonpublic
reports was published.
Nonpublic Reports by Category, April 1, 2020, Through September 30, 2020
No. of
Category/Description
Reports
IT security reviews (involve IT systems, e.g., penetration test audits) 6
Homeland security issues (involve particularly sensitive topics, e.g., bioterrorism,
None
emergency preparedness, and classified or potentially classified information)
Recipient Capability Audits (primarily in Head Start/Early Head Start programs) None
Reimbursable audits performed for other Federal agencies (primarily contract
None
audits)
Confidential or proprietary information (e.g., Medicare Part B drug
None
claims/imaging services, Medicare investment income)
Medicare Adverse Event Reviews (required by law not to disclose) None
Medicare Prescription Drug Event Reviews None
Other None
HHS technical assistance reports 5 None
Finance-related attestation reviews 3
Total 9
(B) Investigation conducted by the Office involving a senior Government employee that is closed and
was not disclosed to the public.
In section 5(a)(19), we detail investigations of senior Government employees in which allegations
were substantiated. Those investigations are all closed and none have been disclosed to the
public. OIG interprets section 5(a)(22)(B) as requiring reporting on investigations with either
substantiated or unsubstantiated allegations. As such, we refer to our section 5(a)(19) response to
address investigations of senior Government employees in which allegations were substantiated
that were closed and not disclosed to the public. Our section 5(a)(22)(B) response describes
5 OIG routinely provides technical assistance to HHS. Generally, that technical assistance is not part of a formal report and is not
formally tracked. However, in some limited circumstances, OIG does provide technical assistance in a formal report, and only that
category of technical assistance is reflected in this table.
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investigations during this reporting period, both criminal and administrative, involving a senior
Government employee in which OIG did not substantiate allegations of misconduct.
When determining the level of detail to provide for the investigations described above, OIG is
mindful of the risk that a detailed description of the investigation could inadvertently reveal the
subject’s identity. During this reporting period, OIG investigated two senior Government
employees for misconduct, but OIG determined the allegations to be unsubstantiated.
Descriptions of the investigations are below.
Description of Status Disposition DOJ DOJ DOJ DOJ
Investigation Referral Referral Declination Declination
Date Date
A complainant Closed Unsubstantiated No N/A N/A N/A
stated that a senior
Government
employee violated
their civil rights by
not providing
requested record.
A complaint stated Closed Unsubstantiated No N/A N/A N/A
that a senior .
Government
employee was
forcing contracts
with a business in
which she has an
interest.
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Appendix G: Anti-Kickback Statute—Safe
Harbors
Pursuant to HIPAA, § 205, the Inspector General is required to solicit proposals annually via a Federal
Register notice for developing new and modifying existing safe harbors to the anti-kickback statute,
section 1128B(b) of the Social Security Act and for developing special fraud alerts. The Inspector General is
also required to report annually to Congress on the status of the proposals received related to new or
modified safe harbors.
In 2018, OIG did not publish its typical December annual solicitation in the Federal Register. 6 For 2018, OIG
issued a request for information (OIG RFI) regarding the Federal anti-kickback statute and beneficiary
inducements CMP, which published in the Federal Register on August 27, 2018. 7 In the OIG RFI, we sought
feedback on ways in which OIG might modify or add new safe harbors to the Federal anti-kickback statute
and exceptions to the beneficiary inducements CMP definition of “remuneration” to foster arrangements
that would promote care coordination and advance the delivery of value-based care while also protecting
patients and taxpayer dollars against harms caused by fraud and abuse. Consequently, below OIG reports
on the proposals repeatedly set forth in numerous comments responding to the OIG RFI.
In crafting safe harbors for a criminal statute, it is incumbent upon OIG to engage in a complete and
careful review of the range of factual circumstances that may fall within the proposed safe harbor subject
area to uncover all potential opportunities for fraud and abuse by unscrupulous providers. Having done
so, OIG must then determine, in consultation with DOJ, whether it can develop effective regulatory
limitations and controls—not only to foster beneficial or innocuous arrangements but also to protect the
Federal health care programs and their beneficiaries from abusive practices.
Public proposals for new and modified safe harbors
In response to the OIG RFI, OIG received 359 comments from a variety of individuals and organizations.
Due to the number and variety of proposals for new and modified safe harbors set forth in the comments
received in response to the OIG RFI, we highlight some of the most common proposals below.
Although most commenters to the OIG RFI strongly asserted the need for regulatory reform to the anti-
kickback statute safe harbors, a number of commenters acknowledged that increased regulatory flexibility
6 See, e.g., OIG, Notification of intent to develop regulations, 81 Fed. Reg. 95,551 (Dec. 28, 2016), available at
https://www.govinfo.gov/content/pkg/FR-2016-12-28/pdf/2016-31170.pdf; OIG, Notification of intent to develop regulations, 82
Fed. Reg. 61,229 (Dec. 27, 2017), available at https://www.govinfo.gov/content/pkg/FR-2017-12-27/pdf/2017-27117.pdf.
7 OIG, Medicare and State Health Care Programs: Fraud and Abuse; Request for Information Regarding the Anti-Kickback Statute
and Beneficiary Inducements CMP, 83 Fed. Reg. 43,607 (Aug. 27, 2018), available at
https://oig.hhs.gov/authorities/docs/2018/RFI_Regarding_AKS_Beneficiary_Inducements_CMP.pdf.
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could create program integrity vulnerabilities or increase the risk of harms associated with fraud and abuse
and urged OIG to exercise caution and include adequate safeguards in any regulatory proposals.
Comments supporting regulatory reform encompassed a number of themes, including requests for:
• new safe harbors protecting financial arrangements among parties participating in alternative
payment models (APMs), value-based arrangements, and care coordination activities;
• safe harbor protection for financial arrangements with entities not participating in Innovation
Center models, including commercial and self-pay APM arrangements;
• additional protection for patient tools and supports, such as in-kind items and services to support
patient compliance with discharge and care plans, services and supports to address unmet social
needs affecting health, and expanded protections under the local transportation safe harbor;
• enhanced safe harbor protection for transfers of IT, data, and cybersecurity tools;
• modifications to the current “patchwork” fraud and abuse waiver framework for Innovation Center
models and the Medicare Shared Savings Program; and
• a variety of protections for pharmaceutical and medical device manufacturer arrangements,
including broad protections for drug and medical device manufacturer participation in value-based
contracts, pricing arrangements, warranty arrangements, and APMs, as well as protection for
coupons and other means of direct copayment assistance to Medicare Part D beneficiaries in
certain situations.
In the October 17, 2019, Federal Register, OIG issued a Notice of Proposed Rulemaking, “Revisions to the
Safe Harbors Under the Anti-Kickback Statute and Civil Monetary Penalty Rules Regarding Beneficiary
Inducements” (OIG NPRM). 8 The OIG NPRM includes proposals that may be responsive to certain of the
abovementioned requests for additional protections included in comments responding to the OIG RFI.
In particular, among other proposals, and subject to definitions and conditions set forth in the OIG NPRM,
the OIG NPRM includes the following proposals:
• three proposed new safe harbors for certain remuneration exchanged between or among
participants in a value-based arrangement (as further defined) that fosters better coordinated and
managed patient care: (i) care coordination arrangements to improve quality, health outcomes,
and efficiency (1001.952(ee)); (ii) value-based arrangements with substantial downside financial risk
(1001.952(ff)); and (iii) value-based arrangements with full financial risk (1001.952(gg)). These
proposed safe harbors vary by the types of remuneration protected (in-kind or in-kind and
monetary), the level of financial risk assumed by the parties, and the types of safeguards included
as safe harbor conditions, among other ways, by the types of remuneration protected (in-kind or
8 OIG, Medicare and State Healthcare Programs: Fraud and Abuse; Revisions to Safe Harbors Under the Anti-Kickback Statute, and
Civil Monetary Penalty Rules Regarding Beneficiary Inducements, 84 Fed. Reg. 55,694 (Oct. 17, 2019), available at
https://www.govinfo.gov/content/pkg/FR-2019-10-17/pdf/2019-22027.pdf.
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in-kind and monetary), the level of financial risk assumed by the parties, and the types of
safeguards included as safe harbor conditions;
• a proposed new safe harbor (1001.952(hh)) for certain tools and supports furnished under patient
engagement and support arrangements to improve quality, health outcomes, and efficiency;
• a proposed new safe harbor (1001.952(ii)) for certain remuneration provided in connection with a
CMS-sponsored model, which should reduce the need for OIG to issue separate and distinct fraud
and abuse waivers for new CMS-sponsored models;
• a proposed new safe harbor (1001.952(jj)) for donations of cybersecurity technology and services;
• proposed modifications to the existing safe harbor for electronic health record (EHR) items and
services (1001.952(y)) to add protections for certain cybersecurity technology included as part of an
EHR arrangement, to update provisions regarding interoperability, and to remove the sunset date;
• proposed modifications to the existing safe harbor for personal services and management
contracts (1001.952(d)) to add flexibility with respect to outcomes-based payments and part-time
arrangements;
• proposed modifications to the existing safe harbor for warranties (1001.952(g)) to revise the
definition of “warranty” and provide protection for warranties for one or more items and related
services; and
• proposed modifications to the existing safe harbor for local transportation (1001.952(bb)) to expand
and modify mileage limits for rural areas and for transportation for discharged patients.
Comments to the OIG NPRM were due December 31, 2019, and are currently under consideration. No final
determination has been made that the arrangements described in the OIG NPRM’s proposals are, or
should be, exempt from liability under the anti-kickback statute. In addition, any final safe harbors would
only provide prospective protection. In the meantime, questions about the application of the anti-kickback
statute to specific arrangements should be addressed on a case-by-case basis, such as under the advisory
opinion process.
104
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