Semiannual Report to Congress, April 1, 2021, Through September 30, 2021 — HHS-OIG
Summary
The Department of Health and Human Services, Office of Inspector General Semiannual Report to Congress covering April 1, 2021, Through September 30, 2021, opening with a message from the Principal Deputy Inspector General (Christi A. Grimm). The message states that an OIG report found almost 1,000 more beneficiaries died per day in nursing homes in April 2020 than in April 2019, and that the overall mortality rate increased from 17 percent in 2019 to 22 percent in 2020. It states that efforts in May against COVID-19 genetic testing scams resulted in $143 million in false billings. The report's contents cover Medicare and Medicaid reviews, legal and investigative activities, public health agency reviews and appendices on questioned costs and sanction authorities.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
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“Semiannual Report to Congress, April 1, 2021, Through September 30, 2021 — HHS-OIG.”
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2021, Through September 30, 2021
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 or Department), Office of Inspector General (OIG), for
the 6-month period ending on September 30, 2021.
This year marks the 45th anniversary since Congress passed the
Inspector General (IG) Act, giving IGs the authority and responsibility
for promoting integrity, accountability, and transparency in their
respective agencies. Since 1978, IGs have led the fight against fraud,
waste, and abuse in Federal programs. Across the Federal
Government, IGs perform an essential public service and propel
significant change and improvements to help the Government better
serve the American people. A strong IG makes a stronger Department
and a stronger, more trusted Federal Government.
Through our oversight work, HHS-OIG strives to identify the most critical issues that HHS faces as it
pursues its mission of enhancing the health and well-being of all Americans. We protect the Nation’s
$2.8 trillion investment in HHS resources and programs, buttressing the Department’s ability to operate
efficiently and effectively, and to deliver beneficial outcomes for the American public. During this
reporting period, OIG focused on protecting the health, safety, and welfare of beneficiaries receiving care
in nursing homes, hospitals, and other facilities, which have been particularly affected by the COVID-19
pandemic. For example, we issued a report that illuminated the devastating impact of the pandemic on
nursing homes, where almost 1,000 more beneficiaries died per day in April 2020 than in April 2019, and
the overall mortality rate increased from 17 percent in 2019 to 22 percent in 2020. This report highlighted
the finding that approximately half of all Black, Hispanic, and Asian residents of nursing homes either had
or likely had COVID-19 in 2020, compared with 41 percent of White residents.
We aggressively pursue criminals whose schemes jeopardize public health efforts and endanger the public.
In May, along with our law enforcement partners, we targeted efforts against schemes designed to exploit
the COVID-19 pandemic through genetic testing scams, which resulted in $143 million in false billings. In
September, we pursued charges associated with $1.4 billion in losses to the Government in health care
fraud cases that involved telefraud, COVID-19-related relief, substance abuse treatment facilities, illegal
prescription and distribution of opioids, and other schemes.
Our oversight work also focuses on ensuring that HHS programs run effectively and that its beneficiaries
see the value of the substantial Federal investment in health and human services programs. As the Nation
responds to and recovers from the evolving COVID-19 pandemic, we are committed to providing HHS with
insights on gaps in emergency preparedness programs and identifying opportunities for HHS to improve
its emergency response capabilities. We remain steadfast in conducting thorough oversight aimed at
protecting the financial integrity of HHS programs and ensuring that taxpayer funds are spent for intended
purposes. Our oversight work will sharply emphasize reducing improper payments in Medicaid and
Medicare. We will also continue to engage in essential work on promoting beneficiary access to opioid
treatment programs; ensuring that beneficiaries and taxpayers do not overpay for prescription drugs;
Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2021, Through September 30, 2021
strengthening Medicare and Medicaid managed care programs; and safeguarding children, including
those in foster care and the Unaccompanied Children Program. In addition, we remain committed to
protecting whistleblowers and investigating whistleblower reprisal allegations.
As health care delivery evolves, and as telehealth and other technologies become increasingly prevalent,
HHS must guard against ever-present cybersecurity risks and continue to deliver on its mission in today’s
changing landscape. As a resourceful and resilient organization, OIG continues to adapt our oversight
methods and undertake new work to address novel challenges. We currently seek public input as part of a
new initiative focused on modernizing our program integrity data and resources. Through this initiative,
OIG aims to increase the transparency and usability of our data and information to spur improved
compliance and innovative approaches that adapt to changes in the health care system.
OIG uses multidisciplinary methods, sophisticated data analysis techniques and technology, and strong
partnerships with other law enforcement and oversight entities to maximize the impact of our work. With
a team of over 1,600 highly skilled and dedicated analysts, attorneys, auditors, evaluators, investigators,
and other professionals, OIG continues to forge a path rooted in independence, objectivity, and
transparency to advance our important mission and make a positive difference for the American public.
OIG remains committed to sustaining these efforts and innovating toward the future. I would like to
express my appreciation to Congress and to the Department for their sustained commitment and support
of our important work.
Christi A. Grimm
Principal Deputy Performing Duties of the Inspector General
Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2021, Through September 30, 2021
Table of Contents
OIG’s Approach to Driving Positive Change 4
Highlights of OIG Accomplishments 5
OIG Participation in Congressional Hearings 15
Selected Acronyms and Abbreviations 16
Medicare and Medicaid Reports and Reviews 17
Legal and Investigative Activities Related to Medicare and Medicaid 48
Public Health and Human Service Agency Reports and Reviews 64
Legal and Investigative Activities Related to Public Health and Human Service Agencies 71
Other HHS-Related Reviews and Investigative Activities 72
Appendix A: Questioned Costs and Funds To Be Put to Better Use 78
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 94
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 the Office of Audit Services (OAS), Office of Evaluation and Inspections (OEI),
Office of Investigations (OI), 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, 2021, Through September 30, 2021
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, 2021, Through September 30, 2021
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 (IT) infrastructure that
enables 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, 2021, Through September 30, 2021
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 of April 1, 2021, through
September 30, 2021. We also provide data for accomplishments for FY 2021. 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, 2021, Through September 30, 2021
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 of April 1, 2021, through September 30, 2021. 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 2021. We then highlight significant results
from selected audits, evaluations, and enforcement activities completed during the reporting period.
At-a-Glance FY 2021 Highlights
Statistic FY 2021
(10/1/2020––9/30/2021)
Audit Reports Issued 162
Evaluations Issued 46
Expected Audit Recoveries $787.29 million
Questioned Costs $1.17 billion
Potential Savings $1.24 billion
New Audit and Evaluation 506
Recommendations
Recommendations Implemented by 432
HHS OpDivs
Expected Investigative Recoveries $3.00 billion
Criminal Actions 532
Civil Actions 689
Exclusions 1,689
Results for the Semiannual Reporting Period
During this semiannual reporting period (April 1, 2021, through September 30, 2021), we issued 87 audit
reports and 26 evaluation reports. Our audit work identified $220.82 million in expected recoveries, as well
as $934.21 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 $318.91 million 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 276 new audit and evaluation recommendations, which are crucial to
encourage positive change in HHS programs. Meanwhile, HHS OpDivs implemented 238 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, 2021, Through September 30, 2021
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 $1.61
billion in expected investigative recoveries and 311 criminal actions during this reporting period. OIG also
took civil actions, such as assessing monetary penalties, against 417 individuals and entities, and excluded
654 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 of April 1, 2021,
through September 30, 2021, organized by subject area. A comprehensive list of OIG work during the
reporting period follows, and Appendices A through G provide data to meet the reporting requirements in
the Inspector General Act of 1978.
Responding to the COVID-19 Pandemic and Other Emergencies
OIG continues to advance 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: (1) to protect people, (2) to protect
funds, (3) to protect infrastructure, and (4) to promote effectiveness of HHS programs. To this end, our
work encompasses more than 50 audits and evaluations underway, assessing a wide range of urgent
issues—from health disparities to vaccine administration to nursing home oversight and preparedness,
among others—along with law enforcement efforts, data analytics, and issuance of fraud alerts and other
guidance.
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. Additional information about
the OIG COVID-19 strategic plan, emerging fraud schemes, and work related to COVID-19 is available on
our website, COVID-19 Portal.
Significant OIG work completed during this semiannual reporting period related to COVID-19 includes the
following:
OIG found that COVID-19 had a devastating impact on Medicare beneficiaries in nursing homes in 2020.
Two in five Medicare beneficiaries in nursing homes either had or likely had COVID-19 in 2020. Overall
mortality in nursing homes increased to 22 percent in 2020 from 17 percent in 2019, with almost 1,000
more beneficiaries dying per day in April 2020 than in April 2019. About half of Black, Hispanic, and Asian
beneficiaries in nursing homes either had or likely had COVID-19, compared with 41 percent of White
beneficiaries. (See report OEI-02-20-00490.)
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2021, Through September 30, 2021
OIG found that although CMS’s COVID-19 data included required information from nursing homes, CMS
could take additional actions to improve the completeness and accuracy of the data. CMS's COVID-19
data for nursing homes included the required data from the vast majority of nursing homes. However, the
data were not complete or accurate for some nursing homes. Specifically, for 775 of the 15,388 nursing
homes (about 5 percent), CMS's data did not include all of the COVID-19 data that nursing homes were
required to report and were not complete or accurate after CMS had performed its quality assurance
checks (e.g., the number of confirmed COVID-19 cases among residents may have been under or
overreported). (See report A-09-20-02005.)
OIG found that Medicare beneficiaries hospitalized with COVID-19 experienced a wide range of serious,
complex conditions. Although almost all of these beneficiaries were treated for acute respiratory issues—
such as viral pneumonia—many were treated for other types of serious conditions, including acute kidney
failure, heart attacks, and sepsis. More than half of the beneficiaries hospitalized with COVID-19 received
intensive care or mechanical ventilation. We also found that beneficiaries who were dually eligible, Black,
Hispanic, or older were hospitalized at disproportionately high rates. (See report OEI-02-20-00410.)
OIG found the Indian Health Service (IHS) Critical Care Response Teams (CCRTs) program to be a positive
step in IHS’s efforts to address the immediate needs of facilities during COVID-19. IHS deployed CCRTs to
support facilities in caring for critically ill COVID-19 patients. While onsite, the CCRTs assessed facility
needs and provided hands-on training to strengthen staff skills and capacity to handle patient surges. This
model also holds promise for addressing some of the longstanding challenges that facilities face related to
quality of care and staffing. We made recommendations to IHS to further leverage the successes of the
CCRT model in support of IHS’s broader care improvement efforts. (See report OEI-06-20-00700.)
OIG investigated pandemic-related schemes to fraudulently bill Medicare for medically unnecessary testing
and medical equipment. OIG, along with our law enforcement partners, participated in a strategically
coordinated, 6-week nationwide Federal law enforcement action to combat health care fraud nationwide.
The efforts resulted in criminal charges against 138 defendants, including more than 42 doctors, nurses,
and other licensed medical professionals, for over $1.4 billion in alleged losses.
OIG found that the Puerto Rico Department of Health (PRDOH) did not effectively implement its
emergency preparedness and response activities before and after Hurricane Maria. PRDOH’s planning
efforts prior to Hurricane Maria did not prepare PRDOH to meet actual needs and PRDOH did not have
procedures in place to ensure that activities were in accordance with its Hospital Preparedness Program-
Public Health Emergency Preparedness Cooperative Agreement. As a result, PRDOH placed the
health and safety of its residents at risk. (See report A-02-18-02002.)
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 Children (UC) Program, the Child Care and Development Fund (CCDF), and foster care.
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2021, Through September 30, 2021
Significant OIG work completed during this semiannual reporting period related to ensuring health and
safety of children includes the following:
OIG found that Colorado’s monitoring process did not ensure provider compliance with State
requirements related to criminal background checks for 18 of the 30 child care providers reviewed. OIG
found that Colorado did not retain criminal background check records for child care center individuals and
also did not require child care providers and associated individuals to receive training on background
check requirements. Although Colorado reviewed required background checks during its annual
inspections of child care providers, the providers did not always inform the State and properly obtain
background checks when hiring individuals or when new individuals began to reside in family homes. (See
report A-07-19-06084.)
OIG published a toolkit compiling insights from its oversight of the UC Program. These insights are drawn
from audits and evaluations conducted since 2008, including reports issued following site visits at 45
facilities during the 2018 surge of children entering the UC Program. This toolkit outlines immediate
actions that HHS program officials and facility administrators can take to ensure the health and safety of
children in care, especially children at influx care facilities and emergency intake sites. (See report OEI-09-
21-00220.)
OIG conducted a case study of Missouri’s efforts to protect children missing from foster care. In the cases
that OIG reviewed in detail, we found that the Missouri foster care agency rarely attempted to reduce
children’s risk of going missing. Additionally, the Missouri foster care agency failed to protect all children
missing from its care and did not effectively use resources to assist in locating them. As a result, these
children were exposed to additional risks associated with being missing from care, such as a heightened
risk for sex trafficking, and poorer outcomes related to health, safety, education, and criminal justice
system involvement. (See report OEI-07-19-00372.)
Preventing and Treating Opioid Misuse
OIG continued to prioritize oversight and enforcement activities to protect beneficiaries from prescription
drug abuse and improve access to medication-assisted treatment (MAT).
Significant OIG work completed during this semiannual reporting period related to preventing and treating
opioid misuse includes the following:
OIG found that the Substance Abuse and Mental Health Services Administration (SAMHSA) is missing
opportunities to better monitor access to MAT through the Buprenorphine Waiver Program. Less than a
quarter of providers in the program required to submit data do so, but SAMHSA has not taken
enforcement actions to improve reporting. Data collected from these providers has benefits beyond
compliance and enforcement. (See report OEI-BL-20-00260.)
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2021, Through September 30, 2021
A prescriber was sentenced to 121 months in prison for participating in a scheme to receive bribes and
kickbacks from a pharmaceutical company in exchange for prescribing millions of dollars’ worth of a
potent fentanyl-based spray. Gordon Freedman received the bribes and kickbacks from Insys Therapeutics
in the form of fees for sham educational programs. In exchange, Freedman prescribed enormous
quantities of Subsys, a fentanyl-based spray manufactured by Insys. Freedman was also sentenced to 210
months in prison, to run concurrently with the other sentence, for distributing oxycodone and fentanyl to a
patient for no legitimate medical purpose. (In 2019, Insys entered into a $225 million global resolution,
including a corporate integrity agreement with OIG, related to its promotion of Subsys.)
Protecting Beneficiaries From Abuse, Neglect, and Unsafe Conditions
A top priority for OIG is protecting the health and well-being of HHS beneficiaries, including residents in
nursing homes and group homes.
Significant OIG work completed during this semiannual reporting period related to protecting beneficiaries
from abuse, neglect, and unsafe conditions includes the following:
OIG found that the data that CMS uses to monitor nursing homes’ use of antipsychotic drugs may not
always provide complete information. Some residents’ use of antipsychotics may not have been detected
by CMS’s quality measure intended to monitor the use of these drugs, which relies solely on self-reported
information from the Minimum Data Set (MDS). CMS could enhance the information it uses to monitor
antipsychotics in nursing homes by using additional data sources in its measurement of this complex issue
that is critical for resident health and safety. (See report OEI-07-19-00490.)
OIG found that Louisiana and California did not fully comply with Federal Medicaid waiver and State
requirements for reporting and monitoring critical incidents involving Medicaid beneficiaries with
developmental disabilities residing in community-based settings. OIG found that Louisiana did not ensure
that all hospital emergency room visits were reported as critical incidents, and all critical incidents were
reported or followed up on, or both, within required timeframes. (See report A-06-17-02005.) OIG found
that California did not ensure that all critical incidents were reported or that all reported critical incidents
were reported in a timely manner and followed up on completely to ensure beneficiaries' health and
safety. (See report A-09-19-02004.)
Protecting HHS Data, Systems, and Beneficiaries From Cybersecurity Threats
OIG’s cybersecurity investigations and audits verify the operating status of HHS systems, programs, and
data; identify gaps in security; and provide recommendations to address vulnerabilities. Moreover, the
security of the personal information and data collected and maintained by HHS programs is critically
important to the health and well-being of the American people.
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2021, Through September 30, 2021
Significant OIG work completed during this semiannual reporting period related to protecting data,
systems, and beneficiaries from cybersecurity threats includes the following:
OIG found that the Medicare program lacks consistent oversight of cybersecurity for networked medical
devices in hospitals. CMS’s survey protocols for overseeing hospitals do not include requirements for
networked device cybersecurity capabilities. Additionally, accrediting organizations to not use their
discretion when performing surveys to require cybersecurity plans for these devices, although they do
sometimes review limited aspects of device cybersecurity. (See report OEI-01-20-00220.)
Protecting Medicare From Fraud, Waste, and Abuse
OIG continues to devote substantial resources to promote strong financial stewardship of Medicare,
reduce improper payments, and protect against fraud in the Medicare program. In the 2020 Medicare
Trustees report, actuaries projected that assets in the Part A trust fund will be depleted by 2026, adding
urgency to ensuring that funds are conserved and used appropriately.
Significant OIG work completed during this semiannual reporting period related to Medicare oversight and
enforcement includes the following:
In September 2021, a Nationwide Law Enforcement Action resulted in 138 charged defendants across 51
Federal districts, including more than 42 doctors, nurses, and other licensed medical professionals. These
defendants were collectively charged with submitting more than $1.4 billion in allegedly false and
fraudulent claims to Federal health care programs and private insurers, including more than $1.1 billion
connected to telemedicine, $29 million in COVID-19 health care fraud, $133 million connected to substance
abuse treatment facilities, or “sober homes,” and $160 million connected to other health care fraud and
illegal opioid distribution schemes across the country.
OIG found that Medicare paid new hospitals three times more for their capital costs than what they would
have been paid under the Inpatient Prospective Payment System (IPPS). OIG identified significant potential
cost savings to Medicare if the IPPS exemption for new hospitals were removed and capital payments were
made through the IPPS. For the 112 new hospitals reviewed, Medicare paid $283 million more for capital
costs than would have been paid through the IPPS. On average, the IPPS exemption resulted in new
hospitals being paid three times more—on average $1.3 million per cost report. (See report A-07-19-
02818.)
OIG found multiple opportunities for CMS to strengthen prevention and detection of improper payments
in the Medicare program. In one report, OIG determined that over 5 years, Medicare could have saved up
to $20 million had CMS oversight been adequate to prevent payments for medically unnecessary
cholesterol blood tests. In another report, OIG identified opportunities for CMS and its Medicare
contractors to strengthen program safeguards to prevent and detect improper payments for drug testing
services. OIG found that contractors did not have necessary tools to prevent and detect these improper
payments. (See reports A-09-19-03027 and A-09-20-03017.)
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2021, Through September 30, 2021
The owner and operator of a purported medical clinic, QC Medical Clinic, was sentenced to 25 years in
prison and ordered to pay $250,000 in restitution for participating in an $11 million Medicare fraud
scheme. QC Medical Clinic sold fraudulent medical documents to home health agencies in and around
Houston. From October 2012 through August 2015, QC Medical Clinic conspired to defraud Medicare by
selling Plans of Care, and other medical documents signed by a doctor to various home health services,
resulting in approximately $11 million in false and fraudulent claims for home health services billed to
Medicare.
Promoting Integrity and Effectiveness in Managed Care
Managed care is the primary delivery system for Medicaid, covering at least some services for more than
80 percent of all enrollees. In Medicare, one-third of beneficiaries are currently enrolled in Medicare
Advantage organizations (MAOs).
Significant OIG work completed during this semiannual reporting period related to managed care includes
the following:
OIG found that States reported multiple challenges with using telehealth to provide behavioral health
services to Medicaid enrollees in managed care organizations. The challenges included a lack of training
for providers and enrollees, limited internet connectivity for providers and enrollees, difficulties with
providers’ protecting the privacy and security of enrollees’ personal information, and the cost of telehealth
infrastructure and interoperability issues for providers. Some States also reported other challenges,
including a lack of licensing reciprocity and difficulties with providers obtaining informed consent from
enrollees. (See report OEI-02-19-00400.)
OIG found that opportunities exist to strengthen oversight and evaluation of telehealth for behavioral
health in Medicaid in States that provide services through managed care organizations (MCOs). A few
States reported being unable to identify which services are provided via telehealth, limiting their ability to
evaluate and oversee telehealth. We also found that only a few States have evaluated the effects of
telehealth on behavioral health services, and that despite concerns about fraud, waste, and abuse, many
States do not conduct monitoring and oversight specific to telehealth. (See report OEI-02-19-00401.)
OIG found that nationwide almost all Medicaid managed care plans achieved medical loss ratios (MLRs)
that met or exceeded the Federal 85‑percent standard for MLRs. Although Federal MLR regulations do
not require States to set minimum MLRs, 34 States had established minimum MLRs for 434 Medicaid
managed care plans. Ninety-one percent of plans met these State-set minimum MLRs. MLR requirements
help ensure that Medicaid managed care plans spend most of their revenue on health care services and
quality improvements. (See report OEI-03-20-00230.)
OIG found that some MAOs drove disproportionate payments by leveraging chart reviews and health risk
assessments. Our analysis found that 20 of 162 MAOs drove a disproportionate share of $9.2 billion in
risk-adjustment payments from diagnoses that were reported only on chart reviews and health risk
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Department of Health and Human Services, Office of Inspector General
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assessments (HRAs), more than 25-percent higher than its share of enrolled beneficiaries. These findings
raise quality of care and payment integrity concerns and highlight the need for targeted oversight. (See
report OEI-03-17-00474.)
OIG found that MAOs are missing opportunities to use ordering provider identifiers to protect program
integrity. We identified that almost half of MAOs lack ordering National Provider Identifiers (NPIs) on at
least some MA encounter records. Incomplete NPI information hinders program integrity analyses.
Among the MAOs that collect ordering NPIs, most use collected NPIs for program integrity, however one
in five do not perform program integrity oversight using ordering NPIs. (See report OEI-03-19-00432.)
OIG found that Humana did not submit some diagnosis codes to CMS for use in the risk adjustment
program in accordance with Federal requirements. Although most of the diagnosis codes that Humana
submitted were supported in the medical records and therefore validated 1,322 of the 1,525 sampled
enrollees’ Hierarchical Condition Categories (HCCs), the remaining 203 HCCs were not validated and
resulted in overpayments. We estimated that Humana received at least $198 million in net overpayments
for 2015. (See report A-07-16-01165.)
Ensuring Medicaid Program Integrity
Medicaid is the largest Federal health care program, with over 75 million individuals enrolled, and
represents over one-sixth of the national health economy. Medicaid is administered by States in
accordance with Federal requirements. The program is funded jointly by the Federal Government and
States. In 2019, Medicaid spending grew 2.9 percent to $613.5 billion.
Significant OIG work completed during this semiannual reporting period related to Medicaid program
integrity includes the following:
OIG found that New York claimed estimated unallowable Federal funds totaling $98 million for Medicaid-
eligible health services. New York did not follow Federal random moment time study (RMTS) requirements
and used an unsupported method to claim Medicaid costs. New York and its contractor developed
complex methods that were difficult or impossible to correctly implement and support with
documentation. As a result, New York claimed estimated unallowable Federal funds totaling $98 million. In
addition, New York claimed $32 million in Federal funds because it did not follow Federal RMTS
requirements or document that CMS approved its allocation methodology, and $309 million in Federal
funds using ratios that were not supported. (See report A-02-18-01019.)
Four executives of Continuum Healthcare and its various health centers were sentenced to Federal prison
for a massive scam perpetrated in the Houston area. Bobby Rouse, Steven Houseworth, Jeffery Parsons,
and David Edson, all pleaded guilty to their respective roles in implementation of the various kickback
schemes. Numerous people were referred for treatment in exchange for payment. However, the vast
majority did not qualify for partial hospitalization program (PHP) services, because they were not
experiencing an acute psychotic episode or were actually suffering from mental retardation, dementia or
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Alzheimer’s. In total, Continuum billed Medicare approximately $189 million in total for fraudulent PHP
services and Medicaid paid approximately $66 million on those claims.
Oversight of NIH Grant Programs and Operations
NIH’s 27 institutes and centers accomplish their mission, in large part, by annually funding over $30 billion
in extramural research through a grantmaking process. OIG oversight and enforcement activities help to
ensure the proper stewardship of funds and the integrity of U.S. medical research.
Significant OIG work during this semiannual reporting period related to NIH grant programs includes the
following:
OIG found that selected NIH institutes met requirements for documenting peer review but could do more
to track and explain funding decisions. NIH has limited insight into the extent and nature of its institutes
and centers’ decisions to fund less favorably ranked grant applications. This can raise questions about the
transparency, impartiality, and fairness of NIH’s grantmaking process. OIG made recommendations for
NIH to provide better insights into whether and why funding out of rank order is happening. (See OEI-01-
19-00140.)
OIG found that the National Heart, Lung, and Blood Institute (NHLBI) did not fully comply with Federal
requirements for “other transactions” (OTs). OTs are special award instruments that are generally not
subject to Federal laws and regulations that apply to traditional award instruments. They are generally
used for high-risk, high-reward research and development projects. NHLBI did not adequately document
its compliance with applicable Federal requirements because its internal controls for awarding and
administering OTs were ineffective. As a result, NHLBI could not ensure the proper stewardship of Federal
funds to award OTs. (See A-04-20-04078.)
The Van Andel Research Institute (VARI) paid $1.1 million to resolve allegations that it violated the False
Claims Act. Van Andel Research Institute failed to disclose foreign research support for two VARI
researchers who served as principal investigators on NIH awards. By failing to disclose a foreign
component of an NIH award, Van Andel Research institute violated the requirement for NIH grant
recipients to disclose and obtain prior agency approval if a significant scientific element or segment of an
NIH-funded project will be performed outside of the United States.
Promoting Payment Integrity in Departmental Programs
The Payment Integrity Information Act of 2019 (PIIA) requires OIG to review and report on agencies’ annual
improper payment information included in their Agency Financial Reports (AFRs) to determine compliance
with PIIA.
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Department of Health and Human Services, Office of Inspector General
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Significant OIG work during this semiannual reporting period related to payment integrity include the
following:
OIG found that HHS met many requirements but did not fully comply with PIIA. OIG found that HHS did
not report an improper payment estimate for the Temporary Assistance for Needy Families (TANF)
program and reported improper payment rates in excess of 10 percent for Medicaid and Children’s Health
Insurance Program (CHIP). OIG also found that HHS did not conduct recovery audits for the Medicare
Advantage program. Finally, OIG found that HHS did not report an improper payment estimate for the
Advanced Premium Tax Credit and CDC and Office of Head Start disaster relief programs. (See report A-
17-21-52000.)
Insights in the Orphan Drug Designation Program
The Orphan Drug Act (ODA) provides financial incentives to encourage the development of drugs for rare
diseases or conditions for which treatments might not be developed otherwise.
Significant OIG work during this semiannual reporting period related to ODA include the following:
OIG found that the majority of high-expenditure Medicare drugs often received ODA financial incentives.
Moreover, we found with some drugs generating significant Medicare expenditures and billions of dollars
in annual revenue while treating only rare diseases or conditions and others being primarily used to treat
relatively common conditions. Orphan drug exclusion from the 340B Drug Pricing Program may provide
significant financial incentives for manufacturers to seek orphan designation for drugs approved to treat
common diseases or conditions. The findings may illustrate the ODA functioning as intended by
encouraging manufacturers to study whether existing drugs could also be used to treat rare diseases or
conditions. From another perspective, however, our findings raise questions for further consideration.
(See report OEI-BL-20-00080.)
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Department of Health and Human Services, Office of Inspector General
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OIG Participation in Congressional Hearings
9/22/2021 Christi A. Grimm, Principal Deputy “Hearing to Consider the Nomination of Christi A.
Performing Duties of the Inspector Grimm, of Colorado, To Be Inspector General,
General Department of Health and Human Services,” U.S.
Senate Committee on Finance
4/22/2021 Gary Cantrell, Deputy Inspector “Protecting U.S. Biomedical Research: Efforts To
General for Investigations, Office of Prevent Undue Foreign Influence,” U.S. Senate
Inspector General Committee on Health, Education, Labor, and
Pensions
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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
DOJ Department of Justice
DME durable medical equipment
EMTALA Emergency Medical Treatment and Labor Act
FDA Food and Drug Administration
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
MCO managed care organization
MFCU Medicaid Fraud Control Unit
NIH National Institutes of Health
OAS Office of Audit Services
OASH Office of Safety and Health
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
OS Office of the Secretary
SAMHSA Substance Abuse and Mental Health Services Administration
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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
Hospital Compliance
During this reporting period, OIG conducted a number of audits that were designed to assess
compliance with selected inpatient and outpatient billing requirements at acute care hospitals with
claims that may be at risk for overpayments. Prior OIG reviews and investigations have identified
areas at risk for noncompliance with Medicare billing requirements. Complete recommendations
and hospital responses can be found in the final reports.
Medicare Hospital Provider Compliance Audit: Virtua Our Lady of Lourdes Hospital (A-02-18-01018),
May 2021
Virtua Our Lady of Lourdes Hospital complied with Medicare billing requirements for 60 of the 100
inpatient and outpatient claims we audited. However, the hospital did not fully comply with
Medicare billing requirements for the remaining 40 claims, resulting in overpayments of $666,021
for the audit period. Specifically, 37 inpatient claims and 3 outpatient claims had billing errors. On
the basis of our sample results, we estimated that the hospital received overpayments of
approximately $4.8 million for the audit period. As of the publication of this report, this amount
included claims outside of the Medicare 4--year claim-reopening period.
Medicare Hospital Provider Compliance Audit: Staten Island University Hospital (A-02-18-01025),
June 2021
Staten Island University Hospital complied with Medicare billing requirements for 63 of the 100
inpatient and outpatient claims we audited. However, the hospital did not fully comply with
Medicare billing requirements for the remaining 37 claims, resulting in overpayments of $830,291
for the audit period. Specifically, 34 inpatient claims and 3 outpatient claims had billing errors. On
the basis of our sample results, we estimated that the hospital received overpayments of nearly
$11.8 million for the audit period. As of the publication of this report, this amount included claims
outside of the Medicare 4-year claim-reopening period.
Medicare Hospital Provider Compliance Audit: Lake Hospital System (A-05-19-00024), June 2021
Lake Hospital System complied with Medicare billing requirements for 49 of the 100 inpatient and
outpatient claims we reviewed. However, the Hospital did not fully comply with Medicare billing
requirements for the remaining 51 claims, resulting in overpayments of $862,429 for the audit
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period. On the basis of our sample results, we estimated that the Hospital received overpayments
of approximately $4.4 million for the audit period. As of the publication of this report, this amount
included claims outside of the Medicare 4-year claim-reopening period.
Medicare Hospital Provider Compliance Audit: Jewish Hospital (A-04-19-08077), August 2021
Jewish Hospital complied with Medicare billing requirements for 62 of the 100 inpatient and
outpatient claims we reviewed. However, the hospital did not fully comply with Medicare billing
requirements for the remaining 38 claims, resulting in overpayments of $705,976 for the audit
period. Specifically, 34 inpatient claims and 4 outpatient claims had billing errors. On the basis of
our sample results, we estimated that the hospital received overpayments of at least $13.5 million
for the audit period.
Home Health Compliance
During this reporting period, OIG conducted a number of audits that were designed to assess
compliance with selected billing requirements at home health agencies with claims that may be at
risk for overpayments. Prior OIG reviews and investigations have identified areas at risk for
noncompliance with Medicare billing requirements. Complete recommendations and provider
responses can be found in the final reports.
Medicare Home Health Agency Provider Compliance Audit: Visiting Nurse Association of Maryland
(A-03-17-00009), April 2021
Visiting Nurse Association of Maryland (VNA) did not comply with Medicare billing requirements
for 19 of the 100 home health claims that we audited. For these claims, VNA received
overpayments of $25,295 for services provided in calendar years 2015 and 2016. Specifically, VNA
incorrectly billed Medicare for: (1) services provided to beneficiaries who were not homebound, (2)
services provided to beneficiaries who did not require skilled services, (3) services that were not
delivered in accordance with the beneficiary’s plan of care, and (4) claims that were assigned with
incorrect Health Insurance Prospective Payment System payment codes. On the basis of our
sample results, we estimated that VNA received overpayments of at least $2.1 million for the audit
period. All 100 claims in our sample were outside of the Medicare 4-year claim-reopening period.
Medicare Home Health Agency Provider Compliance Audit: Caretenders of Jacksonville, LLC (A-04-
16-06195), May 2021
Caretenders of Jacksonville did not comply with Medicare billing requirements for 39 of the 100
home health claims that we reviewed. For these claims, Caretenders received overpayments of
$92,345 for services provided during our audit period. Specifically, Caretenders incorrectly billed
Medicare for services provided to beneficiaries who were not homebound, services provided to
beneficiaries who did not require skilled services, and claims that were assigned with incorrect
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Health Insurance Prospective Payment System (HIPPS) payment codes. These errors occurred
primarily because Caretenders did not have adequate controls to prevent the incorrect billing of
Medicare claims within the selected risk areas. On the basis of our sample results, we estimated
that Caretenders received overpayments of approximately $4.4 million for the audit period. All 100
claims in our sample are outside of the Medicare 4-year claim-reopening period.
Medicare Home Health Agency Provider Compliance Audit: Catholic Home Care (A-02-19-01013),
August 2021
Catholic Home Care did not comply with Medicare billing requirements for 17 of the 100 home
health claims that we reviewed. For these claims, Catholic Home Care received overpayments of
$25,742 for services provided during our audit period. Specifically, Catholic Home Care incorrectly
billed Medicare for services provided to beneficiaries who did not require skilled services and for
some dependent services that did not meet coverage requirements. On the basis of our sample
results, we estimated that Catholic Home Care received overpayments of at least $4.2 million for
the audit period.
Hospice Compliance
During this reporting period, OIG conducted a number of audits that were designed to assess
compliance with selected billing requirements at hospice providers with claims that may be at risk
for overpayments. Prior OIG reviews and investigations have identified areas at risk for
noncompliance with Medicare billing requirements. Complete recommendations and providers
responses can be found in the final reports.
Medicare Hospice Provider Compliance Audit: Suncoast Hospice (A-02-18-01001), May 2021
Suncoast Hospice did not comply with Medicare requirements for 49 of the 100 claims in our
sample. For these claims, Suncoast claimed Medicare reimbursement for hospice services for
which the clinical record did not support the beneficiary’s terminal prognosis or the level of care
claimed and for services that were not provided. These improper payments occurred because
Suncoast’s policies and procedures for ensuring that claims for hospice services met Medicare
requirements were not always effective. On the basis of our sample results, we estimated that
Suncoast received at least $47.4 million in Medicare reimbursement for hospice services that did
not comply with Medicare requirements.
Medicare Hospice Provider Compliance Audit: Ambercare Hospice, Inc. (A-09-18-03017), May 2021
Ambercare Hospice received Medicare reimbursement for hospice services that did not comply
with Medicare requirements. Of the 100 hospice claims in our sample, 48 claims complied with
Medicare requirements. However, for the remaining 52 claims, the clinical record did not support
the beneficiary’s terminal prognosis. Improper payment of these claims occurred because
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Ambercare’s policies and procedures were not effective in ensuring that the clinical documentation
it maintained supported the terminal illness prognosis. On the basis of our sample results, we
estimated that Ambercare received at least $24.6 million in unallowable Medicare reimbursement
for hospice services.
Medicare Hospice Provider Compliance Audit: Alive Hospice, Inc. (A-09-18-03016), May 2021
Alive Hospice received Medicare reimbursement for hospice services that did not comply with
Medicare requirements. Of the 100 hospice claims in our sample, 76 claims complied with
Medicare requirements. However, the remaining 24 claims did not comply with the requirements.
Specifically, for 16 claims, the clinical record did not support the beneficiary’s terminal prognosis,
and for the remaining 8 claims, the clinical record did not support the level of care claimed for
Medicare reimbursement. Improper payment of these claims occurred because Alive’s policies and
procedures were not effective in ensuring that the clinical documentation it maintained supported
the terminal illness prognosis and that the appropriate level of care was provided. On the basis of
our sample results, we estimated that Alive received at least $7.3 million in unallowable Medicare
reimbursement for hospice services.
Medicare Hospice Provider Compliance Audit: Franciscan Hospice (A-09-20-03034), May 2021
Franciscan received Medicare reimbursement for hospice services that did not comply with
Medicare requirements. Of the 100 hospice claims in our sample, 79 claims complied with
Medicare requirements. However, the remaining 21 claims did not comply with the requirements.
Specifically, for 19 claims, the clinical record did not support the beneficiary’s terminal prognosis,
and for the remaining 2 claims, there was no documentation to support the hospice services that
Franciscan billed to Medicare. Improper payment of these claims occurred because Franciscan’s
policies and procedures were not effective in ensuring that the clinical documentation it
maintained supported the terminal illness prognosis and the hospice services billed to Medicare.
On the basis of our sample results, we estimated that Franciscan received at least $13 million in
unallowable Medicare reimbursement for hospice services.
Medicare Hospice Provider Compliance Audit: Professional Healthcare at Home, LLC (A-09-18-
03028), June 2021
Professional Healthcare received Medicare reimbursement for hospice services that did not comply
with Medicare requirements. Of the 100 hospice claims in our sample, 79 claims complied with
Medicare requirements. However, for the remaining 21 claims, the clinical record did not support
the beneficiary’s terminal prognosis. In addition, for 1 of these 21 claims, there was no
documentation that a hospice physician or hospice nurse practitioner had a required face-to-face
encounter with the beneficiary. Improper payment of these claims occurred because Professional
Healthcare’s policies and procedures were not effective in ensuring that the clinical documentation
it maintained supported the terminal illness prognosis. On the basis of our sample results, we
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estimated that Professional Healthcare received at least $3.3 million in unallowable Medicare
reimbursement for hospice services.
Medicare Hospice Provider Compliance Audit: Northwest Hospice, LLC (A-09-20-03035), June 2021
Northwest Hospice (NW Hospice) received Medicare reimbursement for hospice services that did
not comply with Medicare requirements. Of the 100 hospice claims in our sample, 81 claims
complied with Medicare requirements. However, for the remaining 19 claims, the clinical record
did not support the beneficiary’s terminal prognosis. Improper payment of these claims occurred
because NW Hospice’s policies and procedures were not effective in ensuring that the clinical
documentation it maintained supported the terminal illness prognosis. On the basis of our sample
results, we estimated that NW Hospice received at least $3.9 million in unallowable Medicare
reimbursement for hospice services.
Medicare Hospice Provider Compliance Audit: Mission Hospice & Home Care, Inc. (A-09-18-03009),
July 2021
Mission Hospice received Medicare reimbursement for hospice services that did not comply with
Medicare requirements. Of the 100 hospice claims in our sample, 66 claims complied with
Medicare requirements. However, the remaining 34 claims did not comply with the requirements.
Specifically, for 33 claims, the clinical record did not support the beneficiary’s terminal prognosis,
and for 1 claim, the clinical record did not support the level of care billed to Medicare. In addition,
for a few claims, there was no evidence that beneficiaries elected hospice care before the periods
covered by the sampled claims, or there was no support for physician services billed to Medicare.
Improper payment of these claims occurred because Mission’s policies and procedures were not
effective in ensuring that the clinical documentation it maintained supported the terminal illness
prognosis, election statements were signed before the periods covered by the sampled claims, the
appropriate level of care was billed, and physician services were supported. On the basis of our
sample results, we estimated that Mission received at least $10.5 million in unallowable Medicare
reimbursement for hospice services.
Medicare Hospice Provider Compliance Audit: Partners In Care, Inc. (A-09-18-03024), July 2021
Partners Hospice received Medicare reimbursement for hospice services that did not comply with
Medicare requirements. Of the 100 hospice claims in our sample, 53 claims complied with
Medicare requirements. However, the remaining 47 claims did not comply with the requirements.
Specifically, for 43 claims the clinical record did not support the beneficiary’s terminal prognosis,
and for the remaining 4 claims, the clinical record did not support the level of care claimed for
Medicare reimbursement. Improper payment of these claims occurred because Partners’ policies
and procedures were not effective in ensuring that the clinical documentation it maintained
supported the terminal illness prognosis and that the appropriate level of care was provided. On
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the basis of our sample results, we estimated that Partners received at least $11.2 million in
unallowable Medicare reimbursement for hospice services.
Other Compliance
Medicare Could Have Saved up to $20 Million Over 5 Years if CMS Oversight Had Been Adequate To
Prevent Payments for Medically Unnecessary Cholesterol Blood Tests (A-09-19-03027), May 2021
Payments made to providers for direct low-density lipoprotein (LDL) cholesterol tests that were
billed in addition to lipid panels did not comply with Medicare requirements. Under certain
circumstances, it may be medically necessary for a provider to perform both tests for the same
beneficiary on the same date of service. However, CMS and Medicare contractors explained that
these circumstances should happen with only limited frequency. We determined that some
providers billed LDL tests in addition to lipid panels for the same beneficiary on the same date of
service more than 75 percent of the time. (We refer to such providers as "at-risk providers.") In
total, we identified $20.4 million of Medicare payments made to at-risk providers for direct LDL
tests.
Because the claim lines for the $20.4 million in payments to at-risk providers for direct LDL tests
had characteristics similar to the claim lines in the judgmental sample, we determined that up to
$20.4 million in payments were improper. If CMS had had oversight mechanisms to prevent such
payments, Medicare could have saved up to $20.4 million for our audit period.
CMS did not concur with our recommendation that it direct the Medicare contractors to develop
oversight mechanisms to identify at-risk providers and prevent improper payments to these
providers, which could have saved up to $20.4 million for our audit period. CMS said that it had
complied with our recommendation to educate providers on the billing of direct LDL tests in
addition to lipid panels.
Sleep Management, LLC: Audit of Claims for Monthly Rental of Noninvasive Home Ventilators (A-04-
18-04066), May 2021
Most Medicare claims submitted by Sleep Management for the monthly rental of noninvasive
home ventilators (NHVs) did not comply with Medicare requirements. Of the 100 sampled claim
lines with payments totaling $75,694, 2 complied with Medicare requirements; however, 98 claim
lines with payments totaling $74,288 did not. Based on our sample results, we estimated that
Medicare made overpayments to Sleep Management of at least $29.1 million for the monthly rental
of NHVs that did not comply with Medicare requirements.
These overpayments occurred because Sleep Management did not follow its policies and
procedures to ensure that it obtained sufficient documentation to support the medical necessity of
the NHV or discontinued service for lack of beneficiary usage.
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Sleep Management generally did not concur with our recommendations that it: (1) refund the
portion of the estimated $29.1 million in Medicare overpayments for claim lines incorrectly billed
that are within the 4-year reopening period, (2) exercise reasonable diligence to identify, report,
and return any similar overpayments in accordance with the 60-day rule, and (3) follow existing
policies and procedures to help ensure that it complies with Medicare requirements.
Medicare Made Millions of Dollars in Overpayments for End-Stage Renal Disease Monthly
Capitation Payments (A-07-19-05117), May 2021
CMS did not always make Medicare monthly capitation payments (MCPs) to physicians for monthly
end-stage renal disease (ESRD)-related services provided in CYs 2016 through 2018 in accordance
with Federal requirements. Specifically, 23,695 claims were for services for which physicians
reported monthly ESRD-related billing codes more than once for the same beneficiary for the same
month, including $4 million in overpayments for instances in which different physicians reported
codes for services and $291,813 in overpayments for instances in which the same physician
reported codes for services. Beneficiaries were responsible for up to $1.1 million in cost sharing
related to these 23,695 claims. We are setting aside potential overpayments related to an
additional 1,598 claims totaling $289,169 and $74,563 in beneficiary cost sharing for CMS’s review
and determination. CMS did not have adequate claims processing controls in place, including
system edits, to identify and prevent these overpayments.
CMS did not concur with our recommendation that it recover the $4 million for claims that are
within the reopening period. CMS concurred with our recommendations that it: (1) recover the
$291,813 for claims that are within the reopening period; (2) instruct the physicians to refund the
$1.1 million in beneficiary cost-sharing amounts; (3) review the 1,598 claims for potentially duplicate
claims, determine which should have been denied, and take followup actions; (4) based on the
results of this audit, notify physicians so that they can exercise reasonable diligence to identify,
report, and return overpayments in accordance with the 60-day rule and identify any returned
overpayments as according with this recommendation; and (5) implement improved claims
processing controls, including improved system edits, to prevent and detect overpayments.
University of Michigan Health System: Audit of Medicare Payments for Polysomnography
Services (A-04-20-07088), June 2021
The University of Michigan submitted Medicare claims for some polysomnography services that did
not comply with Medicare billing requirements. Of the 100 randomly selected beneficiaries in our
sample, the University of Michigan submitted Medicare claims for polysomnography services that
complied with Medicare billing requirements for 96 beneficiaries associated with 161 lines of
service. However, the University of Michigan submitted Medicare claims for the remaining four
beneficiaries associated with five lines of service that did not comply with Medicare requirements,
resulting in overpayments of $3,127.
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On the basis of our sample results, we estimated that the University of Michigan received
overpayments of at least $12,520 for polysomnography services during our audit period.
The errors occurred because the University of Michigan’s policies and procedures did not address
the processing of Medicare claims for polysomnography services to ensure that services billed to
Medicare were adequately documented and coded correctly.
The University of Michigan generally disagreed with our findings and did not comment on our
recommendations that it: (1) refund to the Medicare program the estimated $12,520 overpayment
for claims that it incorrectly billed that are within the 4-year reopening period; (2) based on the
results of this audit, exercise reasonable diligence to identify, report, and return any overpayments
in accordance with the 60-day rule; and (3) implement policies and procedures to ensure that
Medicare claims for polysomnography services comply with Medicare requirements.
Medicare Payments for Transitional Care Management Services Generally Complied With Federal
Requirements, but Some Overpayments Were Made (A-07-17-05100), July 2021
Payments made to physicians for transitional care management (TCM) services provided during
CYs 2015 and 2016 generally complied with Federal requirements, but we identified almost
$1.7 million in overpayments associated with 13,577 claims (that were outside the reopening and
recovery period) for instances in which multiple physicians billed for TCM services for a
beneficiary’s same 30-day TCM service period and for instances in which a physician billed on
different dates for TCM and overlapping care management services provided during the same 30-
day TCM service period for the same beneficiary. We also identified at least $74,275 in
unallowable services for instances in which a physician submitted claims on the same date for TCM
and overlapping care management services that were rendered for the same beneficiary during a
single 30-day TCM service period. CMS did not have controls in place, including claim system
edits, to prevent and detect multiple TCM services provided to beneficiaries and to identify
instances of overlapping care management.
CMS concurred with our recommendations that it: (1) 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 and identify any of those returned overpayments as having been
made in accordance with this recommendation; and (2) implement claims processing controls,
including system edits, to prevent and detect overpayments for TCM services.
Palmetto GBA, LLC, Accurately Calculated Hospice Cap Amounts but Did Not Collect All Cap
Overpayments (A-06-19-08003), July 2021
Palmetto GBA, LLC (Palmetto), accurately calculated cap amounts but did not collect all cap
overpayments or pay refunds associated with lookback years due to two internal policies. As a
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Department of Health and Human Services, Office of Inspector General
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result, Palmetto did not collect lookback overpayments totaling $545,639 or send refunds to
hospices totaling $17,513.
Additionally, Palmetto departments did not effectively communicate about issues that affect
hospice cap oversight because it did not require such communication. Although Palmetto
followed CMS debt collection timing requirements for processing Extended Repayment Schedule
requests and referring balances to the Department of the Treasury, $9.8 million of the $49.1 million
(20 percent) in total overpayments for cap year 2017 was uncollected as of August 2020. Better
communication might have resulted in less uncollected debt.
Palmetto concurred with our recommendations that it: (1) collect $545,639 in lookback
overpayments and return $17,513 in lookback refunds resulting from 2017 hospice cap calculations
for lookback years, (2) discontinue using its internal policies of waiving certain overpayment
collections related to lookback years and start collecting all hospice cap overpayments and paying
refunds in accordance with CMS requirements, and (3) develop processes for communication
between the departments directly and indirectly involved in hospice cap oversight.
Medicare Paid New Hospitals Three Times More for Their Capital Costs Than They Would Have Been
Paid Under the Inpatient Prospective Payment System (A-07-19-02818), August 2021
We identified significant potential cost savings to Medicare if the IPPS exemption were removed
and capital payments to new hospitals were made through the IPPS. For the 112 new hospitals that
we reviewed, Medicare paid $283 million more for capital costs than it would have paid if these
hospitals had been paid through the IPPS. The IPPS exemption resulted in new hospitals being
paid three times more—or an average of almost $1.3 million more per cost report—under the
reasonable cost methodology than if they had been paid for their capital costs under the IPPS.
With respect to the reasons for the IPPS exemption, we compared the first 2 years of operation
with the subsequent 2 years of operation of the 35 new hospitals for which such data were
available and determined that in the first 2 years of operation, average Medicare-related capital
costs were only 3 percent higher, and average Medicare utilization was 15 percent lower.
Most of these new hospitals (approximately 59 percent) were also part of chain organizations that
might have been able to provide reserve capital to their new hospitals if needed.
CMS concurred with our recommendation that it review our findings and, if it determines that a
separate payment methodology for capital costs at new hospitals is no longer warranted, change
its regulations to require new hospitals to have their Medicare capital costs paid through the IPPS
with an option for payment adjustments or supplemental payments if necessary.
An Ophthalmology Clinic in Florida: Audit of Medicare Payments for Eye Injections of Avastin, Eylea,
and Lucentis (A-09-19-03025), September 2021
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Department of Health and Human Services, Office of Inspector General
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An ophthalmology clinic in Florida (the Clinic) complied with Medicare requirements when billing
for intravitreal injections of Avastin, Eylea, and Lucentis. (Injections of Lucentis were not included in
our sample.) However, the Clinic did not always comply with Medicare requirements when billing
for other services provided on the same day as the intravitreal injections (e.g., injections of an
anesthesia drug).
The Clinic did not have policies and procedures to ensure that it: (1) did not bill for services that
were not separately payable from intravitreal injections of Avastin, Eylea, and Lucentis; and (2)
billed only for services that were reasonable and necessary. On the basis of our sample results, we
estimated that at least $215,606 of the $2.1 million paid to the Clinic for intravitreal injections of
Avastin, Eylea, and Lucentis, and for other services provided on the same day as the injections was
unallowable for Medicare reimbursement.
The Clinic concurred in part with our recommendation that it refund to the Medicare contractor
$215,606 in estimated overpayments for other services provided on the same day as intravitreal
injections of Avastin, Eylea, and Lucentis. The Clinic concurred with our remaining
recommendations, including that it implement policies and procedures to ensure that it: (1) does
not bill for services that are not separately payable from intravitreal injections of Avastin, Eylea, and
Lucentis; and (2) bills only for services that are reasonable and necessary.
Quality of Care, Safety, and Access
CMS Could Improve the Data It Uses To Monitor Antipsychotic Drugs in Nursing Homes (OEI-07-19-
00490), May 2021
CMS has taken important steps to reduce the use of antipsychotic drugs in nursing homes and
could further that progress by collecting more complete data on residents’ use of these drugs. We
found that CMS’s use of the MDS as the sole data source to count the number of nursing home
residents receiving antipsychotic drugs may not always provide complete information. This means
that some residents’ use of antipsychotics may not have been detected by CMS’s quality measure
intended to monitor the use of these drugs. Our findings suggest that CMS could enhance the
information it uses to monitor antipsychotics in nursing homes by using additional data sources in
its measurement of this complex issue that is critical for resident health and safety. CMS concurred
with both of our recommendations, which were for it to take additional steps to validate the
information reported in MDS assessments; and supplement the data it uses to monitor the use of
antipsychotic drugs in nursing homes.
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles: 2021 (OEI‑05‑21-00170),
June 2021
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Department of Health and Human Services, Office of Inspector General
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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 453 unique formularies used by the 5,128 Part D plans include 97 percent of
the 195 drugs most commonly used by dual eligibles and covered by Part D. In addition, 74
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
2021.
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.
Medicare Lacks Consistent Oversight of Cybersecurity for Networked Medical Devices in Hospitals
(OEI-01-20-00220), June 2021
Medicare accreditation organizations (AOs), which derive their requirements from the Conditions
of Participation, rarely use their discretion to examine the cybersecurity of networked devices
during their hospital surveys. Our findings can help CMS identify ways to add consistent oversight
of networked medical device cybersecurity in hospitals. CMS stated that it concurred with
considering additional ways to appropriately highlight the importance of cybersecurity of
networked medical devices for providers in consultation with its HHS partners that have specific
oversight authority regarding cybersecurity. We ask that, in its Final Management Decision, CMS
share its plan for responding to our specific recommendation, which is for it to identify and
implement an appropriate way to address cybersecurity of networked medical devices in its quality
oversight of hospitals, in consultation with HHS partners and others.
COVID-19 Had a Devastating Impact on Medicare Beneficiaries in Nursing Homes During 2020 (OEI-
02-20-00490), June 2021
Two in five Medicare beneficiaries in nursing homes either had or likely had COVID-19 in 2020.
Overall mortality in nursing homes increased to 22 percent in 2020 from 17 percent in 2019, with
almost 1,000 more beneficiaries dying per day in April 2020 than in April 2019. About half of Black,
Hispanic, and Asian beneficiaries in nursing homes had or likely had COVID-19, compared with 41
percent of White beneficiaries. Understanding the pandemic’s effects on nursing home residents is
necessary if tragedies like this are to be averted. Analyzing Medicare claims data may help CMS in
its efforts. These data are important to understanding the effects of the pandemic and, moving
forward, could play an integral part in understanding health disparities within the nursing home
population and preparing for and dealing with future public health crises.
States’ Backlogs of Standard Surveys of Nursing Homes Grew Substantially During the COVID-19
Pandemic (OEI-01-20-00431), July 2021
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Department of Health and Human Services, Office of Inspector General
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States’ backlogs of standard nursing home surveys grew substantially during the COVID-19
pandemic, even after August 2020 when CMS lifted its suspension of those surveys (which it had
suspended due to the pandemic). Nationally, 71 percent of nursing homes had gone at least 16
months without a standard survey as of May 31, 2021, an increase from June 2020, when 8 percent
of nursing homes had gone at least 16 months without a standard survey. The rising backlogs of
standard surveys add urgency to our recommendation from our previous report, Onsite Surveys of
Nursing Homes During the COVID-19 Pandemic: March 23–May 30, 2020, that CMS clarify
expectations and provide guidance to States on completing these important surveys.
Medicare Beneficiaries Hospitalized With COVID-19 Experienced a Wide Range of Serious, Complex
Conditions (OEI-02-20-00410), September 2021
The wide-ranging and complex conditions of Medicare beneficiaries hospitalized with COVID-19
can create substantial challenges in meeting the needs of these patients, particularly during surges
in hospitalizations. Although almost all of these beneficiaries were treated for acute respiratory
issues—such as viral pneumonia—many were treated for other types of serious conditions,
including acute kidney failure, heart attacks, and sepsis. More than half of the beneficiaries
hospitalized with COVID-19 received intensive care or mechanical ventilation. We also found that
beneficiaries who were dually eligible, Black, Hispanic, or older were hospitalized at
disproportionately high rates. Gaining a better understanding of Medicare beneficiaries
hospitalized with COVID-19—including the conditions for which they were being treated and
demographic makeup—can assist Federal, State, and local efforts in the COVID-19 pandemic.
CMS's COVID-19 Data Included Required Information From the Vast Majority of Nursing Homes, but
CMS Could Take Actions To Improve Completeness and Accuracy of the Data (A-09-20-02005),
September 2021
CMS's COVID-19 data for nursing homes included the required data from the vast majority of
nursing homes (e.g., the number of confirmed COVID-19 cases among residents); however, the
data were not complete or accurate for some nursing homes. These conditions occurred because,
in part, CMS's quality assurance checks were not always effective in ensuring the accuracy and
completeness of the COVID-19 data for nursing homes.
In addition, we identified two areas in which CMS could take additional actions to help ensure that
its COVID-19 data are complete and accurate. First, CMS could provide technical assistance to all
nursing homes that fail its quality assurance checks. Second, CMS could make additional efforts to
ensure that: (1) CMS's and States' COVID-19 data elements (e.g., confirmed COVID-19 cases among
residents) are comparable (i.e., CMS and States could use the same data elements) and (2) the
reported data are not substantially different.
When CMS's COVID-19 data are complete and accurate, Federal and State officials and other
stakeholders may be able to more effectively monitor trends in infection rates and develop public
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Department of Health and Human Services, Office of Inspector General
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health policies when making decisions about how to ensure the health and safety of nursing home
residents and staff.
CMS partly agreed and partly disagreed with our recommendations that it assess the costs and
benefits of implementing the six recommendations listed in our report (e.g., our recommendations
that it revise its quality assurance checks and contact nursing homes that fail quality assurance
checks to verify the accuracy of reported data or to correct inaccurate data), and if CMS
determines that the benefits outweigh the costs, take action to implement the recommendations.
Program Integrity
Medicare Advantage Organizations Are Missing Opportunities To Use Ordering Provider Identifiers
To Protect Program Integrity (OEI-03-19-00432), April 2021
In Medicare Advantage, encounter data 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. (Encounter data are the detailed information that
MAOs submit to CMS regarding each service provided to MA beneficiaries.) Almost half of the
MAOs that lack ordering NPIs on at least some MA encounter records raised concerns that this
hinders their data analysis for program integrity. Among MAOs that collect any ordering NPIs,
most use them to conduct oversight activities, but one in five does not—despite having the data to
do so. Furthermore, when MAOs collect these ordering NPIs, most do not validate them against
CMS’s NPI registry. CMS neither concurred nor nonconcurred with our recommendation and
stated that it would consider whether additional education is needed for MAOs regarding the role
that ordering NPIs can play in program integrity oversight. Our recommendation is for CMS to
encourage MAOs to perform program integrity oversight using ordering NPIs.
Some Medicare Advantage Companies Leveraged Chart Reviews and Health Risk Assessments To
Disproportionately Drive Payments (OEI-03-17-00474), September 2021
Twenty companies with contracts under MA companies drove a disproportionate share of the $9.2
billion in payments from diagnoses that were reported only on chart reviews and HRAs, and on no
other encounter records in 2016. Each company generated a share of payments from these chart
reviews and HRAs that was more than 25 percent higher than its share of enrolled MA
beneficiaries. Among these 20 MA companies, 1 company further stood out in its use of chart
reviews and HRAs to drive risk‑adjusted payments without encounter records of any other services
provided to the beneficiaries for those diagnoses. This company accounted for about one-third of
all payments from diagnoses reported solely on chart reviews and more than half of all payments
from diagnoses reported solely on HRAs. CMS neither concurred nor nonconcurred with our three
recommendations, which were for it to provide oversight of the 20 MA companies that had a
disproportionate share of the risk‑adjusted payments from chart reviews and HRAs; take additional
actions to determine the appropriateness of payments and care for the one MA company that
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Department of Health and Human Services, Office of Inspector General
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substantially drove risk-adjusted payments from chart reviews and HRAs; and perform periodic
monitoring to identify MA companies that had a disproportionate share of risk-adjusted payments
from chart reviews and HRAs.
Medicare Advantage Compliance Audit of Diagnosis Codes That Humana, Inc., (Contract H1036)
Submitted to CMS (A-07-16-01165), April 2021
Humana, Inc., did not submit some diagnosis codes to CMS for use in the risk-adjustment program
in accordance with Federal requirements. We reviewed, for 200 sampled enrollees, the diagnosis
codes that Humana submitted, and although most were supported in the medical records and
therefore validated 1,322 of the 1,525 sampled enrollees’ HCCs, the remaining 203 HCCs were not
validated and resulted in overpayments. These 203 unvalidated HCCs included 20 HCCs for which
we identified 22 other, replacement HCCs for more and less severe manifestations of the diseases.
Second, there were an additional 15 HCCs for which the medical records supported diagnosis
codes that Humana should have submitted to CMS but did not.
Thus, the risk scores for the 200 sampled enrollees should not have been based on the 1,525 HCCs.
Rather, the risk scores should have been based on 1,359 HCCs (1,322 validated HCCs + 22 other
HCCs + 15 additional HCCs). As a result, we estimated that Humana received at least $197.7 million
in net overpayments for 2015. These errors occurred because Humana’s policies and procedures
to prevent, detect, and correct noncompliance with CMS’s program requirements, as mandated by
Federal regulations, were not always effective.
Humana disagreed with our recommendations that it refund to the Federal Government the
$197.7 million of net overpayments and enhance its policies and procedures to prevent, detect, and
correct noncompliance with Federal requirements for diagnosis codes that are used to calculate
risk-adjusted payments.
Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Anthem Community
Insurance Company, Inc. (Contract H3655) Submitted to CMS (A-07-19-01187), May 2021
With respect to the seven high-risk groups covered by our audit, most of the selected diagnosis
codes that Anthem Community Insurance Company, Inc. (Anthem), submitted to CMS for use in
CMS’s risk adjustment program did not comply with Federal requirements. For 123 of the 203
enrollee-years, the diagnosis codes that Anthem submitted to CMS were not supported in the
medical records and resulted in $354,016 of net overpayments for the 203 enrollee-years.
These errors occurred because the policies and procedures that Anthem had to detect and correct
noncompliance with CMS’s program requirements, as mandated by Federal regulations, were not
always effective. On the basis of our sample results, we estimated that Anthem received at least
$3.47 million of net overpayments for these high-risk diagnosis codes in 2015 and 2016.
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Department of Health and Human Services, Office of Inspector General
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Anthem disagreed with our recommendations that it refund to the Federal Government the
$3.47 million of net overpayments; identify, for the high-risk diagnoses included in this report,
similar instances of noncompliance that occurred before or after our audit period and refund any
resulting overpayments to the Federal Government; and enhance its compliance procedures to
focus on diagnosis codes that are at high risk for being miscoded by: (1) determining whether
these diagnosis codes (when submitted to CMS for use in CMS's risk adjustment program) comply
with Federal requirements and (2) educating its providers about the proper use of these diagnosis
codes.
CMS Needs To Strengthen Regulatory Requirements for Medicare Part B Outpatient Cardiac and
Pulmonary Rehabilitation Services To Ensure Providers Fully Meet Coverage Requirements (A-02-18-
01026), May 2021
CMS regulatory requirements related to Medicare outpatient cardiac and pulmonary rehabilitation
services did not contain sufficient information to ensure that claims for these services met Medicare
coverage requirements. Specifically, the requirements lacked details related to what patient-
specific information should be contained in a beneficiary’s medical record and how this information
should relate to their individualized treatment. As a result, for all 100 sampled beneficiary-days, we
determined that medical record documentation obtained from the selected provider did not
contain sufficient evidence to support whether Medicare coverage requirements for
reimbursement of cardiac and pulmonary rehabilitation services were met. On the basis of our
sample results, we estimated that $2.7 million in Medicare payments made by CMS to the selected
provider for outpatient cardiac and pulmonary rehabilitation services may not have met Medicare
coverage requirements, as intended. Further, based on our review, we believe that Medicare
payments totaling approximately $626 million made by CMS to all providers for outpatient cardiac
and pulmonary rehabilitation services during our audit period may not have met the requirements.
We recommended that CMS revise its regulations to provide sufficient guidance to ensure that
providers meet coverage requirements for outpatient cardiac and pulmonary rehabilitation
services. CMS stated that it had updated its manuals to more closely reflect regulatory text and
that it will consider our recommendation when determining appropriate next steps regarding the
regulations on outpatient cardiac and pulmonary rehabilitation services.
Opportunities Exist for CMS and Its Medicare Contractors To Strengthen Program Safeguards To
Prevent and Detect Improper Payments for Drug Testing Services (A-09-20-03017), June 2021
We identified several weaknesses in the Medicare contractors’ established program safeguards for
preventing and detecting improper payments for drug testing services and promoting provider
compliance with Medicare requirements. If CMS and its contractors cannot ensure that
laboratories’ claims for drug testing services comply with Medicare requirements, laboratories may
receive improper payments, and beneficiaries with substance use disorders may receive medically
unnecessary drug testing services.
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Department of Health and Human Services, Office of Inspector General
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CMS did not concur with our recommendations that it work with its Medicare contractors to: (1)
take the necessary steps to determine whether clinical evidence exists to support a single, specific
reasonable and necessary standard for drug testing services, and if such evidence exists, establish a
National Coverage Determination or develop local coverage determinations (LCDs) with more
consistent requirements for drug testing services; (2) clearly indicate in LCDs, Local Coverage
Articles, or other instructions how laboratories should determine the number of drug classes for
billing definitive drug testing services; and (3) implement a system edit or procedure to identify and
limit the frequency of drug testing services per beneficiary across all Medicare jurisdictions.
CMS concurred with our recommendations that it: (1) determine whether a postpayment medical
review is necessary for laboratories that have been paid for excessive definitive drug tests (e.g.,
more than one test) in a 1-week period for the same beneficiary, and (2) consider adding a
modifier to claims for definitive drug tests indicating whether a test was based on results obtained
from a presumptive drug test.
CMS’s Controls Related to Hospital Preparedness for an Emerging Infectious Disease Were Well-
Designed and Implemented but Its Authority Is Not Sufficient for It To Ensure Preparedness at
Accredited Hospitals (A-02-21-01003), June 2021
CMS’s controls were well designed and implemented, but CMS’s authority is not sufficient for it to
fulfill its responsibility to ensure that accredited hospitals would maintain quality and safety during
an emerging infectious disease emergency. Specifically, although CMS announced in February
2019 that it was critical for all hospitals to plan for emerging infectious diseases, CMS could not
determine that all accredited hospitals updated their emergency preparedness plans to include this
planning until 2022 due to accreditation organizations’ quality and safety inspection cycles.
Further, when COVID-19 emerged in the United States, CMS requested (but could not require)
accreditation organizations to perform special targeted infection control surveys to help accredited
hospitals prepare for COVID-19 patients. Accreditation organizations performed no such special
surveys and, as of August 17, 2020, State survey agencies only performed these surveys at about 13
percent of accredited hospitals and had not performed any in 13 States because of CMS’s limited
authority over accredited hospitals. As a result of these limitations, CMS could not ensure that
accredited hospitals would continue to provide quality care and operate safely during the COVID-
19 emergency and cannot ensure quality and safety at accredited hospitals when a future emerging
infectious disease threatens the United States.
CMS concurred with our recommendation that it make regulatory changes to allow it to require
accreditation organizations to perform special surveys after it issues new participation
requirements or guidance and during a public health emergency to address the risks presented by
the emergency.
2020 Performance Data for the Senior Medicare Patrol Projects (OEI-02-21-00180), June 2021
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Department of Health and Human Services, Office of Inspector General
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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 2020, the 54 SMP projects
had a total of 5,720 total active team members who conducted a total of 9,870 group outreach and
education events, reaching an estimated 425,103 people. In addition, the projects had 249,134
individual interactions with, or on behalf of, a Medicare beneficiary. The projects reported
$16.8 million in expected Medicare recoveries. Cost avoidance totaled $53,768, while savings to
beneficiaries and others totaled $33,554.
Review of Medicare Administrative Contractor Information Security Program Evaluations for Fiscal
Year 2020 (A-18-21-11300), July 2021
CMS contracted with Guidehouse, LLP (Guidehouse), to evaluate information security programs at
the MACs, using a set of agreed-upon procedures (AUPs). HHS OIG must submit to Congress
annual reports on the results of these evaluations, to include assessments of their scope and
sufficiency. This report fulfills that responsibility for fiscal year 2020. Guidehouse’s evaluations of
the contractor information security programs were adequate in scope and sufficiency. Guidehouse
reported a total of 99 gaps at the 7 MACs for FY 2020, which was 21 percent less than the number
of gaps for the same 7 MACs in FY 2019. Deficiencies remained in eight of the nine Federal
Information Security Modernization Act of 2014 (FISMA) control areas that were tested. CMS
should continue its oversight visits and ensure that the MACs remediate all gaps to improve the
MACs’ IT security. Similar gaps from prior years should be considered repeat findings to highlight
systemic problems and the existence of continued exposure to known weaknesses. This report
contains no recommendations.
Medicare Continues To Make Overpayments for Chronic Care Management Services, Costing the
Program and Its Beneficiaries Millions of Dollars (A-07-19-05122), August 2021
Not all payments made by CMS to providers for noncomplex and complex chronic care
management (CCM) services rendered during CYs 2017 and 2018 complied with Federal
requirements, resulting in $1.9 million in overpayments associated with 50,192 claims. These errors
occurred because CMS did not have claim system edits to prevent and detect overpayments.
CMS concurred with our recommendations that it direct the Medicare contractors to: (1) recover
the $1.9 million for claims that are within the reopening period, and instruct providers to refund up
to $540,680, which beneficiaries were required to pay; (2) based on the results of this audit, notify
appropriate 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 in accordance with this recommendation; and (3) implement
claim system edits to prevent and detect overpayments for noncomplex and complex CCM
services. We also recommended that CMS implement claim system edits at its level.
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Department of Health and Human Services, Office of Inspector General
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Six of Eight Home Health Agency Providers Had Infection Control Policies and Procedures That
Complied With CMS Requirements and Followed CMS COVID-19 Guidance To Safeguard Medicare
Beneficiaries, Caregivers, and Staff During the COVID-19 Pandemic (A-01-20-00508),
September 2021
Six of the eight selected home health agency (HHA) providers (three of the larges HHA providers in
the country and five HHA providers that were recently cited for infection prevention and control
deficiencies) had infection control policies and procedures that complied with CMS requirements
and followed CMS guidance to safeguard HHA staff, Medicare beneficiaries, and caregivers during
the COVID‐19 pandemic. However, one HHA provider did not comply with CMS requirements or
follow CMS COVID-19 guidance. In addition, this provider and another HHA provider’s COVID-19
screening protocols for patients were not consistent with CMS guidance. As a result, the patients
and staff at these two HHA providers were at an increased risk of infection. We did not determine
whether these HHA providers had infection prevention and control issues related to the
implementation of the policies and procedures. However, State survey agencies identified issues
with implementation at several of these HHA providers, as indicated by infection prevention and
control deficiencies found during surveys conducted in 2019 and 2020.
CMS concurred with our recommendation that it develop and share with the HHA industry
information on COVID-19 infection prevention and control best practices that HHA providers can
use to comply with CMS requirements and follow CMS guidance.
The Centers for Medicare & Medicaid Services Did Not Account for National Security Risks in Its
Enterprise Risk Management Processes (A-18-20-06200), July 2021
CMS’s ERM process did not consider national security risks for any of CMS’s programs in
accordance with Federal requirements. CMS lacked policies and procedures that required its
programs to consider national security threats because it relied on HHS’s ERM process. As a result,
CMS was unable to ensure that it had implemented effective controls to protect against threats
from foreign and domestic adversaries.
CMS concurred with our recommendation that it, as part of its ERM program, implement a process
to assess all of its programs for national security risks in accordance with Office of Management
and Budget (OMB) Circular No. A-123’s requirement to include new or emerging risks in the risk
profile.
CMS Needs To Issue Regulations Related to Phlebotomy Travel Allowances (A-06-20-04000), August
2021
In our two previous audits of MAC payments for phlebotomy travel allowances, we determined
that the two MACs paid providers for phlebotomy travel allowances that did not comply with
Medicare guidance. Specifically, in our 2 MAC audits, 93 of the 202 sampled paid claim lines we
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Department of Health and Human Services, Office of Inspector General
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reviewed complied with Medicare guidance, but 109 paid claim lines did not. (Some lines did not
comply for more than one reason.) Errors identified in those audits were related to incorrect
prorated mileage, incorrect payment rates, and inadequate documentation. On the basis of the
sample results, we estimated that the two MACs paid providers a combined $2.7 million in
phlebotomy travel allowance payments that were not in accordance with Medicare guidance. In
addition, we spoke with CMS in June 2020 and, at that time, it had not begun the notice and
comment rulemaking process necessary to clarify provider guidance related to prorating mileage
on claims for phlebotomy travel allowances or issue further guidance.
CMS concurred with our recommendations that it: (1) work with the MACs to educate providers
about the documentation requirements for phlebotomy travel allowances and (2) instruct the
MACs to identify and adjust any paid claims that incorrectly used the previous year’s rate.
Regarding our recommendation that CMS issue regulations related to phlebotomy travel
allowances, CMS stated that such changes will need to go through notice and comment
rulemaking.
Drug Spending and Reimbursement
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles: 2021 (OEI-05-21-00170),
June 2021
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 453 unique formularies used by the 5,128 Part D plans include 97 percent of
the 195 drugs most commonly used by dual eligibles and covered by Part D. In addition, 74
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
2021.
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.
Medicare Part B Drug Payments: Impact of Price Substitutions Based on 2019 Average Sales Prices
(OEI-03-21-00130), June 2021
Based on OIG’s analysis of ASP and AMP data for 2019, CMS lowered Medicare Part B
reimbursement for 18 drugs, saving Medicare and its beneficiaries $6.2 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
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Department of Health and Human Services, Office of Inspector General
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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.) This data snapshot does not contain any recommendations.
However, OIG continues to support a previous recommendation that CMS expand the price-
substitution criteria.
Comparison of Average Sales Prices and Average Manufacturer Prices: Results for the Fourth Quarter
of 2020 (OEI-03-21-00070), May 2021, and Comparison of Average Sales Prices and Average
Manufacturer Prices: Results for the First Quarter of 2021 (OEI-03-21-00080), August 2021
OIG identified five drug codes in the fourth quarter of 2020 and six drug codes in the first quarter
of 2021 that met CMS’s criteria for price substitution. OIG compares ASPs to AMPs every quarter
and identifies Part B-covered drug codes eligible for price substitutions. 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 provides these
drug codes to CMS for its review. CMS reviews this information and determines whether to
implement price substitutions that would limit excessive payments for Part B drugs.
Concerns Persist About Opioid Overdoses and Medicare Beneficiaries’ Access to Treatment and
Overdose-Reversal Drugs (OEI-02-20-00401), August 2021
More than 43,000 Medicare Part D beneficiaries suffered an opioid overdose in 2020. Overall,
nearly one in four Part D beneficiaries received opioids during the year. The number of
beneficiaries who received drugs for MAT through Part D increased but at a slower rate in 2020
than in prior years. And, unlike in other recent years, there was no growth in the number of
beneficiaries receiving prescriptions through Part D for the opioid overdose-reversal drug
naloxone. These slower growth rates add to ongoing concerns about access to MAT drugs and
naloxone. Ensuring this access in 2021 and beyond is particularly important as we do not yet know
the full extent to which the stressors of the COVID-19 pandemic may have increased the need for
these drugs. It is also critical for CMS to closely monitor the number of beneficiaries receiving MAT
drugs and naloxone and take action, if needed.
Audit of Medicare Part D Pharmacy Fees: Group Health Cooperative, Inc. (A-03-19-00002),
July 2021
For CYs 2014 and 2015, Group Health Cooperative, Inc. (GHC), did not have adequate support for
the point-of-sale fees that its pharmacy benefit manager (PBM) charged to pharmacies. For CYs
2014 and 2015, its PBM reported it received at least $52,076 and $36,346 respectively in point-of-
sale fees. GHC refiled its direct and indirect remuneration (DIR) reports twice, and the refiled
amounts were not supported by other documentation that its PBM provided. As a result, we could
not validate whether the amounts GHC reported to CMS were accurate.
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For CY 2016, GHC’s PBM did not charge pharmacy fees, and, for CY 2017, we determined that GHC
correctly reported the pharmacy fees collected by its PBM.
Kaiser Permanente, which acquired GHC in 2017, concurred with our recommendations that it: (1)
validate the point-of-sale fee amounts for CYs 2014 and 2015 and refile the CY 2014 and 2015 DIR
reports if appropriate, and (2) develop written policies and procedures to validate the amounts its
PBM discloses before submitting the DIR reports to CMS.
Medicaid Program Reports and Reviews
Financial Management and Improper Payments
Minnesota Made Capitation Payments to Managed Care Organizations for Medicaid Beneficiaries
With Concurrent Eligibility in Another State (A-05-19-00032), May 2021
Minnesota made an estimated $1.1 million in August 2018 capitation payments on behalf of
beneficiaries who were concurrently eligible and residing in another State. Of the 106 capitation
payments in our stratified random sample, 71 were associated with beneficiaries who were residing
and eligible for Medicaid benefits in Minnesota. However, for the remaining 35 capitation
payments, totaling $15,084 ($9,167 Federal share), Minnesota made capitation payments on behalf
of beneficiaries who should not have been eligible for Medicaid benefits in Minnesota because
they were concurrently eligible and residing in another State. On the basis of our sample results,
we estimated that Minnesota could have saved $1.1 million ($665,000 Federal share) for August
2018 capitation payments made to managed care organizations on behalf of beneficiaries with
concurrent eligibility.
Minnesota accepted our recommendations that it: (1) develop new procedures or enhance current
ones to identify beneficiaries with concurrent eligibility in another State, which could have saved
Minnesota an estimated $1.1 million ($665,000 Federal share) in capitation payments for the month
of August 2018; and (2) ensure that county caseworkers follow procedures to timely review and
terminate eligibility for beneficiaries who were identified as concurrently eligible in another State.
New York Made Unallowable Payments Totaling More Than $9 Million to the Same Managed Care
Organization for Beneficiaries Assigned More Than One Medicaid Identification Number
(A-02-20-01007), May 2021
New York improperly claimed Federal Medicaid reimbursement for Medicaid beneficiaries who
were assigned more than one Medicaid identification (ID) number. The assignment of more than
one Medicaid ID number and resulting improper payments occurred because: (1) New York’s
procedures for identifying whether an individual applying for Medicaid had already been assigned
a Medicaid ID number were not always followed, (2) system queries were not adequate to ensure
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that all individuals with existing Medicaid ID numbers were identified, and (3) local district and
Marketplace staff did not use all available resources to ensure that qualified applicants were not
issued more than one Medicaid ID number. We note that, in 2019 and 2020, New York took steps
to improve its processes for identifying beneficiaries assigned more than one Medicaid ID number.
On the basis of our sample results, we estimated that New York claimed at least $10.6 million in
Federal Medicaid reimbursement for managed care payments made to the same MCO on behalf of
beneficiaries assigned more than one Medicaid ID number. We reduced our recommended
financial disallowance to reflect payments New York refunded after our fieldwork.
New York did not indicate concurrence or nonconcurrence with our recommendations, including
that it refund $9,325,338 to the Federal Government and identify and recover improper managed
care payments made to the same MCO on behalf of beneficiaries with more than one Medicaid ID
number prior to and after our audit period.
Nebraska Did Not Report and Refund the Correct Federal Share of Medicaid-Related Overpayments
for 76 Percent of the State’s Medicaid Fraud Control Unit Cases (A-07-18-02814), June 2021
Nebraska did not report and return the correct Federal share of MFCU-determined Medicaid
overpayments identified during the period October 1, 2011, through September 30, 2018. Nebraska
did not report $4.6 million ($2.6 million Federal share) of MFCU-determined Medicaid
overpayments for this period. In addition, Nebraska did not report $595,723 ($311,352 Federal
share) in a timely manner. Nebraska did not have adequate policies and procedures to ensure that
it always reported MFCU-determined Medicaid overpayments in accordance with Federal
requirements.
We recommended that Nebraska refund $1.8 million (Federal share) of the unreported MFCU-
determined Medicaid overpayments that related to paid claims and that it report and refund up to
$781,732 (Federal share) of the unreported MFCU-determined Medicaid overpayments that related
to court-ordered awards if and when collected. We also recommend that Nebraska determine the
value of overpayments identified after our audit period that have been collected but not reported,
report them to CMS, and refund the Federal share of the collected overpayments. We made other
recommendations for the improvement of relevant policies and procedures. Nebraska disagreed
with the amount ($2.6 million) in our draft report’s first recommendation and added that it would
work with CMS to determine and report the amount owed. We revised our recommendations for
this final report by narrowing the focus and revising the amount of questioned costs in our first
recommendation, by adding a new second recommendation, and by clarifying our first
recommendation.
Kentucky Claimed Millions in Unallowable School-Based Medicaid Administrative Costs
(A-04-17-00113), June 2021
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Kentucky did not claim school-based Medicaid administrative costs in accordance with Federal
requirements. It used an invalid random moment sampling (RMS) to allocate costs to Medicaid,
and it included unallowable costs in its cost pools. In addition, Kentucky claimed these costs
without promptly submitting cost allocation plan (CAP) amendments to Department of Health and
Human Services, Division of Cost Allocation (DCA), for review and without obtaining DCA approval.
As a result, the $58.9 million ($29.4 million FFP) that it claimed in school-based Medicaid
administrative costs for FFYs 2009 through 2014 was unallowable.
Kentucky generally disagreed with our findings, and it did not specifically address our
recommendations that it: (1) refund $29.4 million to the Federal Government; (2) amend its CAP to
address the statistical validity issues we identified; (3) enhance RMS procedures to ensure that its
RMTS methodology complies with Federal requirements for statistical validity; (4) enhance RMS
procedures to ensure that its Medicaid administrative cost claim complies with Federal
requirements for allocable costs; (5) enhance policies and procedures to ensure that changes to its
RMTS methodology are incorporated into a CAP amendment and promptly submitted to DCA for
review; and (6) review school-based Medicaid administrative costs claimed after our audit period
and refund any unallowable amounts.
Indiana Received Over $22 Million in Excess Federal Funds Related to Unsupported Community
Integration and Habilitation Waiver Services at 12 Selected Service Providers (A-05-19-00022), June
2021
Indiana did not ensure that all Community Integration and Habilitation Waiver (CIH Waiver)
services were provided in accordance with Federal, State, and waiver requirements. We
determined that services associated with 236 claims were provided in accordance with the
requirements; however, services associated with 64 claims were not. Documentation provided by
CIH Waiver service providers did not support that services associated with 39 claims were provided
in accordance with the requirements. Overpayments associated with these 39 claims totaled
$10,675 ($7,108 Federal share). In addition, some CIH Waiver service providers were unable to
provide any documentation to support 25 claims totaling $90,802 ($60,448 Federal share).
Therefore, overpayments associated with the 64 claims totaled $101,477 ($67,556 Federal share).
On the basis of our sample results, we estimated that these providers were unable to support that
they provided services totaling at least $33.5 million ($22.3 million Federal share) in accordance
with the CIH Waiver requirements.
These issues occurred because Indiana’s monitoring of CIH Waiver services was not adequate to
ensure that services complied with Federal, State, and CIH Waiver requirements.
Indiana generally did not concur with our recommendations that it: (1) refund $22.3 million to the
Federal Government and (2) improve its monitoring of the CIH Waiver program to ensure that
service providers comply with Federal, State, and CIH Waiver requirements.
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Department of Health and Human Services, Office of Inspector General
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New York’s Claims for Federal Reimbursement for Payments to Health Home Providers on Behalf of
Beneficiaries Diagnosed With Serious Mental Illness or Substance Use Disorder Generally Met
Medicaid Requirements, but It Still Made $6 Million in Improper Payments to Some Providers
(A-02-19-01007), July 2021
Of the 150 payments in our random sample, New York properly claimed reimbursement for 141
payments but improperly claimed reimbursement for the remaining 9 payments. Specifically, New
York’s health home providers did not provide a comprehensive patient-centered care plan
covering the sampled date of service for enrolled beneficiaries (five payments) and did not
document health home services (four payments). The improper payments occurred because New
York did not adequately monitor health home providers for compliance with certain Federal and
State requirements for providing, documenting, and billing services.
Health home providers’ failure to develop comprehensive patient-centered care plans and provide
health home services could have resulted in beneficiaries not getting the services that they needed
and may have put their health and safety at risk. On the basis of our sample results, we estimated
that New York improperly claimed at least $6 million in Federal Medicaid reimbursement for
payments made to health home providers for services provided to beneficiaries diagnosed with
serious mental illness or substance use disorder.
New York did not indicate concurrence or nonconcurrence with our recommendations that it
refund $6 million to the Federal Government and that it should strengthen its monitoring of the
health home program to ensure that health home providers comply with Federal and State
requirements for: (1) providing services according to a comprehensive patient-centered care plan
and (2) maintaining documentation to support services billed.
New York Improperly Claimed $439 Million in Medicaid Funds for Its School-Based Health Services
Based on Certified Public Expenditures (A-02-18-01019), July 2021
New York claimed unallowable Federal funds because it did not support that all random moments
coded as health care were for Medicaid-eligible health services. New York also did not provide
support that it did not double-claim for services when a student in one school district received
services from another school district. In addition, New York improperly claimed excess costs for 1
year. Finally, New York did not follow Federal RMTS requirements and used an unsupported
method to claim Medicaid costs.
New York and its contractor developed complex methods that were difficult or impossible to
correctly implement and support with documentation. As a result, New York claimed estimated
unallowable Federal funds totaling $98 million. In addition, New York claimed $32 million in
Federal funds because it did not follow Federal RMTS requirements or document that CMS
approved its allocation methodology, and $309 million in Federal funds using ratios that were not
supported.
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Department of Health and Human Services, Office of Inspector General
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New York generally disagreed with our findings and recommendations that it refund $98 million in
unallowable funds and support or refund the $32 million and the $309 million. We also made
procedural recommendations to assist New York in preparing accurate, supportable claims.
Texas Made Unallowable Children’s Health Insurance Program Payments for Beneficiaries Assigned
More Than One Identification Number (A-06-20-10003), July 2021
Texas claimed Federal reimbursement for unallowable CHIP payments made to MCOs on behalf of
beneficiaries who were assigned more than one identification number. For the 599 beneficiary
matches, Texas improperly paid MCOs $922,557 ($856,456 Federal share) on behalf of 572
beneficiaries. Texas made the unallowable payments to MCOs under the different identification
numbers for the same month. The remaining 27 beneficiary matches were different individuals.
Texas attributed the unallowable payments to eligibility worker and system errors. Specifically,
eligibility workers did not ensure that beneficiaries were assigned only one identification number
during the application process. Additionally, the State agency stated that it had already identified
more than half of the beneficiaries included in our audit as having more than one identification
number but that it encountered system compatibility issues that would not allow the data integrity
workers to properly merge beneficiary records with both a CHIP and Medicaid history.
Texas generally concurred with our recommendations that it: (1) refund $856,456 to the Federal
Government, (2) identify and recover additional unallowable CHIP payments made before and after
our audit period for the 572 beneficiary matches and repay the Federal share, (3) identify any other
beneficiaries who are assigned more than one identification number and refund any unallowable
CHIP payments associated with those beneficiaries, and (4) strengthen its procedures for
determining whether applicants are enrolled in any medical or public assistance benefit programs
throughout the State and ensure that no beneficiary is assigned more than one identification
number.
Almost 15 Percent of Arkansas’ Private Contractor Costs Were Either Unallowable or Claimed at
Higher Federal Matching Rates Than Eligible, Resulting in Arkansas Inappropriately Claiming
$4.4 Million in Federal Medicaid Funds (A-06-18-09002), July 2021
Arkansas followed applicable Federal and State requirements related to procuring private Medicaid
Management Information Systems (MMIS) contractor services and correctly claimed $72.1 million
($69.6 million Federal share) in private MMIS contractor costs. However, Arkansas incorrectly
claimed the remaining $12.4 million, or almost 15 percent of its costs. For those costs, Arkansas
inappropriately received $4.4 million in Federal funds.
Arkansas did not have policies and procedures in place to ensure that MMIS private contractor
costs were tracked to the correct advanced planning documents (APDs). Due to the lack of policies
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and procedures, Arkansas was not able to prevent or detect when it claimed costs that exceeded
funding or time-period limits, contractor costs that were not approved, costs that were for
programs other than Medicaid, and costs at incorrect matching rates.
Arkansas agreed with our recommendations that it: (1) refund the $4.4 million Federal share to the
Federal Government and (2) establish policies and procedures to track its private MMIS contractor
costs to APDs and to ensure that it adheres to the funding and time-period limits established in
those APDs.
Missouri Claimed Federal Reimbursement for $3.4 Million in Payments to Health Home Providers
That Did Not Meet Medicaid Requirements (A-07-20-04117), August 2021
Missouri claimed Federal Medicaid reimbursement for some payments made to health home
providers that did not comply with Federal and State requirements. Missouri improperly claimed
Federal Medicaid reimbursement for 14 of 150 payments. These 14 improper payments primarily
involved deficiencies in documentation. Specifically, Missouri’s health home providers did not
always document core services, but all other requirements were met.
The improper payments occurred because Missouri did not adequately monitor providers for
compliance with Federal and State requirements regarding the maintenance of medical records
that documented the health home services that the providers furnished to beneficiaries.
On the basis of our sample results, we estimated that Missouri improperly claimed at least
$3.4 million in Federal Medicaid reimbursement for payments made to health home providers.
Missouri disagreed with our recommendation that it refund $3.4 million to the Federal
Government. Missouri concurred with our recommendation that it improve its monitoring of the
health home program to ensure that health home providers comply with Federal and State
requirements for maintaining documentation to support the services for which the providers billed
and received payments.
Minnesota Medicaid Managed Care Entities Used a Majority of Medicaid Funds Received for Medical
Expenses and Quality Improvement Activities (A-05-18-00018), September 2021
During CY 2017, Minnesota managed care entities used the majority of funds received for medical
expenses and quality improvement activities. Specifically, of the eight Medicaid managed care
entities that we reviewed, we calculated MLRs for their contracted Medicaid programs and found
one entity that had an MLR less than 85 percent during CY 2017 for one of its contracts. We
determined that the Minnesota Medicaid program could have saved $82,427 (approximately
$41,213 Federal share) in CY 2017 if Minnesota: (1) required its Medicaid managed care entities to
meet the minimum 85-percent MLR standard for each Medicaid managed care contract and (2)
required remittances when Medicaid managed care entities did not meet the MLR standard.
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Department of Health and Human Services, Office of Inspector General
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Minnesota incorporated a remittance requirement for contracts beginning CY 2018 if managed
care entities do not meet an MLR of at least 85 percent. This report contains no recommendations.
Kansas Made Capitation Payments to Managed Care Organizations After Beneficiaries’ Deaths (A-
07-20-05125), September 2021
During our audit period, Kansas made unallowable capitation payments to MCOs on behalf of
deceased beneficiaries. Kansas made at least $17.3 million in unallowable capitation payments to
MCOs on behalf of beneficiaries whose dates of death preceded the service period covered by the
monthly capitation payment, for which it claimed at least $9.7 million in unallowable Federal
reimbursement. On the basis of our sample results, we estimated that Kansas made unallowable
capitation payments totaling at least $14.6 million (at least $8.2 million Federal share). In addition,
Kansas had previously overreported capitation payments totaling over $2 million ($1.2 million
Federal share) that were related to prior-period adjustments.
Kansas did not directly address our recommendations that it: (1) refund at least $10.9 million to the
Federal Government; (2) recover unallowable capitation payments totaling almost $2.7 million that
were made to MCOs on behalf of deceased beneficiaries; (3) identify and recover unallowable
capitation payments made to MCOs on behalf of deceased beneficiaries who did not have a date
of death recorded in Kansas's system, which we estimate to be at least $14.6 million; and (4)
identify and recover unallowable capitation payments made on behalf of deceased beneficiaries
before and after our audit period and repay the Federal share of any amounts recovered. We
made additional procedural recommendations for the strengthening of internal controls and
policies and procedures regarding accurate and timely updates to Kansas's eligibility system and
the accurate reporting of all Medicaid expenditures, to include prior-period adjustments.
Quality of Care, Safety, and Access
Potential Abuse or Neglect of Medicaid Beneficiaries
During this reporting period, OIG conducted a number of audits that were designed to assess
potential abuse or neglect of Medicaid beneficiaries. Prior OIG reviews and investigations have
identified Medicaid beneficiaries as being at risk for abuse or neglect. Complete recommendations
and State responses can be found in the final reports.
Georgia Generally Ensured That Nursing Facilities Reported Allegations of Potential Abuse or Neglect
of Medicaid Beneficiaries and Prioritized Allegations Timely (A-04-17-03084); April 2021
Georgia generally ensured that nursing facilities reported potential abuse or neglect of Medicaid
beneficiaries transferred from nursing facilities to hospital emergency departments. Of 117
sampled claims with emergency department visits, 101 associated incidents were not reportable. Of
the remaining 16 incidents, the nursing facilities reported 9 timely, reported 3 late, reported 2 that
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we could not determine had been reported timely, and did not report 2 that they should have
reported. In addition, Georgia generally complied with Federal and State requirements for
assigning a priority level, investigating, and recording allegations of potential abuse or neglect.
Finally, Georgia generally operated its complaint and incident report program effectively.
California Did Not Ensure That Nursing Facilities Always Reported Incidents of Potential Abuse or
Neglect of Medicaid Beneficiaries and Did Not Always Prioritize Allegations Properly (A-09-19-
02005), June 2021
California did not ensure that nursing facilities always reported incidents of potential abuse or
neglect of Medicaid beneficiaries transferred from nursing facilities to hospital emergency
departments. Of the 118 sampled incidents reviewed, 81 were not the result of potential abuse or
neglect; therefore, nursing facilities were not required to report the incidents to the State.
However, of the remaining 37 incidents, 8 incidents were the result of potential abuse or neglect
and should have been reported to the State: 2 were reported in a timely manner, 4 were not
reported in a timely manner, and 2 were not reported to the State by the nursing facilities.
Although the State issued guidance to nursing facilities on the proper reporting of potential abuse
or neglect, facilities did not always report incidents or report them in a timely manner. For the
other 29 incidents, nursing facilities provided documentation that did not contain sufficient
information to determine whether the incidents were the result of potential abuse or neglect;
therefore, the State was unable to determine whether the requirements for reporting potential
abuse or neglect were met.
Critical Incidents Involving Medicaid Beneficiaries With Developmental Disabilities
During this reporting period, OIG conducted a number of audits that were designed to assess
critical incidents involving Medicaid beneficiaries with developmental disabilities. Prior OIG reviews
and investigations have identified inadequate reporting of such incidents. Complete
recommendations and State responses can be found in the final reports.
Louisiana Did Not Fully Comply With Federal and State Requirements for Reporting and Monitoring
Critical Incidents Involving Medicaid Beneficiaries With Developmental Disabilities (A-06-17-02005),
May 2021
Louisiana did not fully comply with Federal Medicaid waiver and State requirements for reporting
and monitoring critical incidents involving Medicaid beneficiaries with developmental disabilities
residing in community-based settings. Specifically, Louisiana did not ensure that: (1) all hospital
emergency room visits were reported as critical incidents and (2) all critical incidents were reported
or followed up on, or both, within required timeframes. These issues occurred because Louisiana:
(1) did not have a process, such as performing analytical procedures on Medicaid claims data, to
determine whether there were unreported critical incidents; and (2) was unaware of the extent to
which community-based providers were late in reporting and following up on critical incidents.
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Department of Health and Human Services, Office of Inspector General
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California Did Not Fully Comply With Federal and State Requirements for Reporting and Monitoring
Critical Incidents Involving Medicaid Beneficiaries With Developmental Disabilities (A-09-19-02004),
September 2021
California did not fully comply with Federal Medicaid waiver and State requirements for reporting
and monitoring critical incidents involving Medicaid beneficiaries with developmental disabilities
who resided in Community Care Facilities. Specifically, California did not ensure that: (1) all critical
incidents were reported and (2) all reported critical incidents were reported in a timely manner and
followed up on completely to ensure beneficiaries' health and safety. In addition, California did not
ensure that reported critical incidents involving the death of a beneficiary were properly reviewed.
California provided various reasons that providers and regional centers (contracted by the State to
provide a wide range of services for individuals with developmental disabilities) did not properly
report some critical incidents, as well as reasons that reported critical incidents were not always
reported in a timely manner and followed up on completely. Because California did not fully
comply with Federal and State requirements for reporting and monitoring critical incidents, it did
not ensure compliance with safeguard assurances it provided to CMS in the Federal Medicaid
waiver, which could impact the health and safety of Medicaid beneficiaries.
Program Integrity
Oklahoma’s Oversight of Medicaid Outpatient Services for Opioid Use Disorder Was Generally
Effective (A-06-20-08000), August 2021
Oklahoma’s oversight of Medicaid opioid use disorder (OUD) drugs and outpatient services was
generally effective. Specifically, Oklahoma ensured that facilities and staff met the requirements to
provide services, that recipients were approved to receive services, and that payments were
accurate. However, we identified a couple of areas that could be improved. Specifically, most of
the people who received OUD drugs did not also receive outpatient counseling services because
Oklahoma does not emphasize counseling in conjunction with OUD drugs. In addition, Medicaid
beneficiaries are not included in behavioral health contract reviews conducted by the Oklahoma
Department of Mental Health and Substance Abuse Services because it focuses on services that are
paid with non-Medicaid funds.
Oklahoma concurred with our recommendations that it consider whether more of an emphasis on
counseling could improve OUD outcomes and, if so, take steps to increase the appropriate use of
counseling with OUD drugs in outpatient OUD treatment, and develop policies and procedures to
ensure that Medicaid behavioral health services are reviewed on an ongoing basis.
Nationwide, Almost All Medicaid Managed Care Plans Achieved Their Medical Loss Ratio Targets
(OEI-03-20-00230), August 2021
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2021, Through September 30, 2021
Federal requirements for MLRs were established to ensure that Medicaid managed care plans
spend most of their revenue on health care services and quality improvement, thereby limiting the
amount that plans can spend on administration and keep as profit. An MLR is the percentage of
revenue that a managed care plan spends on services related to the health of its enrollees. We
found that 92 percent of Medicaid managed care plans (471 of 513) achieved MLRs that met or
exceeded the Federal 85‑percent standard for MLRs. Although Federal MLR regulations do not
require States to set minimum MLRs, 34 States had established minimum MLRs for 434 Medicaid
managed care plans. Ninety-one percent of plans met these State-set minimum MLRs. However,
39 plans failed to meet their State-set minimum MLRs for the period reviewed. Nineteen of these
plans reported owing a total of $198 million to States that had opted to require their plans to
return money to the State when the plans did not meet minimum MLRs. This data brief
demonstrates that States that choose to establish minimum MLRs with requirements to return
monies may recoup millions of Medicaid dollars from plans that fail to meet the State-set minimum
MLRs. The data brief does not contain any recommendations.
States Reported Multiple Challenges With Using Telehealth To Provide Behavioral Health Services to
Medicaid Enrollees (OEI-02-19-00400), September 2021
We found that States reported multiple challenges with using telehealth to provide behavioral
health services to Medicaid enrollees, including a lack of training for providers and enrollees,
limited internet connectivity for providers and enrollees, difficulties with providers’ protecting the
privacy and security of enrollees’ personal information, and the cost of telehealth infrastructure and
interoperability issues for providers. Some States also reported other challenges, including a lack
of licensing reciprocity and difficulties with providers obtaining informed consent from enrollees.
This data brief provides a useful foundation for CMS and States by highlighting longstanding
challenges with the use of telehealth that existed prior to the additional challenges caused by the
pandemic. CMS concurred with our recommendation that it share information to help States
address the challenges they face with using telehealth.
Opportunities Exist To Strengthen Evaluation and Oversight of Telehealth for Behavioral Health in
Medicaid (OEI-02-19-00401), September 2021
We found that a few States reported being unable to identify which services are provided via
telehealth, limiting their ability to evaluate and oversee telehealth. We also found that only a few
States have evaluated the effects of telehealth on behavioral health services, and that despite
concerns about fraud, waste, and abuse, many States do not conduct monitoring and oversight
specific to telehealth. This data brief provides a useful foundation to inform CMS and State
decisions about how to evaluate the impacts of telehealth on access, cost, and quality of behavioral
health services and to strengthen oversight of program integrity. Our recommendations were for
CMS to: (1) ensure that the three States that are unable to distinguish telehealth from in-person
services implement indicators to identify which services are provided via telehealth; (2) conduct
evaluations, and support State efforts to evaluate the effects of telehealth on access, cost, and
quality of behavioral health services; and (3) conduct monitoring for fraud, waste, and abuse, and
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support State efforts to oversee telehealth for behavioral health services. CMS concurred with our
first recommendation but did not explicitly indicate whether it concurred with the other two
recommendations.
About Seventy-Nine Percent of Opioid Treatment Program Services Provided to Medicaid
Beneficiaries in Colorado Did Not Meet Federal and State Requirements (A-07-20-04118), September
2021
Colorado’s oversight during the audit period did not ensure that opioid treatment program (OTP)
services provided to Medicaid beneficiaries met Federal and State requirements. Colorado’s
oversight of the OTPs consisted primarily of biennial audits conducted by the State Opioid
Treatment Authority, which were not sufficient in scope and depth of coverage to ensure that OTPs
maintained a recordkeeping system that was adequate to document and monitor patient care, or
to ensure that OTP services met Federal and State requirements. On the basis of our sample
results, we estimated that over 1.1 million OTP services, or about 79 percent, did not meet Federal
and State requirements during the audit period.
We recommended that Colorado strengthen its biennial audits of OTPs to ensure that services
provided are in accordance with Federal and State requirements, provide technical assistance to
OTPs to ensure that the providers maintain adequate recordkeeping systems, and educate OTPs
on the deficiencies we identified to increase their awareness of compliance issues regarding
Federal and State requirements. Colorado described corrective actions it had taken or planned to
take to address our recommendations.
Drug Spending and Reimbursement
Medicaid Physician-Administered Drugs
During this reporting period, OIG conducted a number of audits that were designed to assess
whether States properly billed manufacturers for physician-administered drugs. Prior OIG reviews
and investigations have identified areas at risk for noncompliance with Medicaid billing
requirements. Complete recommendations and State responses can be found in the final reports.
New Mexico Did Not Bill Manufacturers for Some Rebates for Physician-Administered Drugs
Dispensed to Enrollees of Medicaid Managed-Care Organizations (A-06-16-00001), June 2021
New Mexico properly billed manufacturers for all pharmacy rebates and some rebates for
physician-administered drugs. However, New Mexico did not bill for and collect from
manufacturers rebates for 70,131 claim lines totaling at least $1.5 million ($1.1 million Federal share)
for physician-administered drugs. In addition, New Mexico did not bill for rebates for 183,859
claim lines for other physician-administered drugs that may have been eligible for rebates. These
errors occurred because New Mexico’s internal controls did not always ensure that it billed
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Department of Health and Human Services, Office of Inspector General
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manufacturers to secure rebates and because New Mexico did not always collect the utilization
data necessary to bill the manufacturers.
Colorado Did Not Invoice Rebates to Manufacturers for Physician-Administered Drugs Dispensed to
Enrollees of Medicaid Managed-Care Organizations (A-07-17-06075), September 2021
Colorado did not comply with Federal Medicaid requirements because it did not collect National
Drug Codes (NDCs) and invoice manufacturers for rebates for physician-administered drugs
dispensed to MCO enrollees. Because the information we received from Colorado lacked NDC-
level detail, we identified the physician-administered drugs that would have been eligible for a
drug rebate and calculated that Colorado did not invoice for, and collect from manufacturers, an
estimated $2 million ($1 million Federal share) in rebates that were associated with these physician-
administered drugs.
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; the 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.
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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 291 criminal and 408 civil actions against individuals
or entities that engaged in offenses related to health care. We also reported over $1.20 billion in
investigative receivables due to HHS and more than $406.0 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.
Ambulance Transportation Company
The following case example involves an ambulance transportation company:
Puerto Rico—On April 15, 2021, Ocean Medical Services, Inc. (“Ocean”) entered into a False
Claims Act settlement agreement with the United States, acting through the U.S.
Department of Justice and on behalf of the Office of Inspector General of the Department
of Health and Human Services. Ocean, an ambulance service provider located in Coamo,
Puerto Rico, will pay $30,000 to resolve allegations that from March 12, 2020, through April
14, 2020, it billed Medicare for services that were actually provided by another ambulance
service provider.
Nursing Home
The following case example involves a nursing home:
New York—On July 2, 2021, Select Medical Corporation and Encore GC Acquisition LLC
agreed to pay $8.4 million to resolve allegations that Select Medical Rehabilitation Services
Inc. (SMRS) violated the False Claims Act by knowingly causing 12 skilled nursing facilities
(SNFs) in New York and New Jersey to submit false claims to Medicare for rehabilitation
therapy services that were not reasonable, necessary or skilled. Select Medical Corporation
was the prior parent company of SMRS, while Encore GC Acquisition LLC is the successor-
in-interest to SMRS. The alleged conduct occurred prior to Encore’s acquisition of SMRS.
From 1997 through March 31, 2016, SMRS offered contract rehabilitation therapy services to
SNFs across the country. The United States alleged that, at various times between January
1, 2010, and March 31, 2016, SMRS contracted with 12 SNFs in New York and New Jersey to
provide rehabilitation therapy services. The United States alleged that SMRS’s corporate
policies and practices encouraged and resulted in the provision of medically unnecessary,
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Department of Health and Human Services, Office of Inspector General
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unreasonable and unskilled therapy services being provided to patients at the 12 SNFs. The
civil settlement includes the resolution of claims brought under the qui tam or
whistleblower provisions of the False Claims Act by a former SMRS employee. Under those
provisions, a private party can file an action on behalf of the United States and receive a
portion of any recovery.
DME Companies
The following case examples involve durable medical equipment companies:
Missouri—On June 23, 2021, Nurse Practitioner Donna Gill, a resident of Palm Coast,
Florida, was sentenced to 12 months and 1 day in prison, 2 years supervised release, and
ordered to pay $23,880,678 in restitution. Gill pleaded guilty on October 13, 2020, to: (a)
defrauding a health care benefit program, (b) creating and using false and fraudulent
documents, and (c) soliciting and receiving illegal kickbacks. Gill also pleaded guilty to one
count of executing a health care fraud scheme. Between 2017 and 2019, Donna Gill
received illegal kickbacks from telemedicine and other companies to sign orders and
prescriptions for medically unnecessary durable medical equipment (DME), genetic testing
and prescription medications for patients identified through mass marketing.
Telemarketers in the United States and elsewhere solicited patients through media ads and
cold calls and then contacted the patients to obtain their insurance information. Although
the telemarketers were not health care professionals, they completed order forms and
sometimes encouraged patients to exaggerate the extent of their pain or need for braces
and pain creams. The orders were then sent to telemedicine doctors or nurse practitioners,
who were typically paid $30 to $50 for each patient for whom they signed orders and
prescriptions. Gill did not have a prior doctor-patient relationship with the patients for
which she signed orders and prescriptions, did not evaluate or assess the patients’ needs
for the items, and in most cases had no contact with the patients, who lived in States
distant from her. Gill received numerous complaints from patients, indicating that they had
not requested and did not want or need the DME. Between 2017 and 2019, Gill was paid
$681,114 for signing orders and prescriptions for patients for whom she never determined a
medical need for the ordered items and services. Federal health care benefit programs
paid $23,880,678 for the false and fraudulent orders and prescriptions signed by Gill,
including false claims that were paid to DME companies in Missouri.
Florida—On July 26, 2021, Dr. Richard Davidson was sentenced to 74 months of
incarceration, followed by 3 years of supervised release. Dr. Davidson had previously
pleaded guilty to one count of conspiracy to commit health care fraud. Dr. Davidson was
involved in the "Operation Brace Yourself" takedown that occurred in April 2019. Dr.
Davidson owned and operated several DME companies, many of which were operating in
nominee owner names, that submitted high volumes of claims to Medicare for DME
orthotics. Dr. Davidson purchased pre-signed doctors' orders from purported "marketing"
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companies who paid bribes and kickbacks to telemedicine companies/physicians in
exchange for authorizing medically unnecessary equipment. The doctors' orders were
purchased at a "price per brace" in violation of the Anti-Kickback Statue. In total, Dr.
Davidson caused over $20 million dollars in false claims to be submitted, of which
approximately $10,711,490 was paid.
Pharmacies
The following case example involves pharmacies:
Georgia—On May 11, 2021, AlixaRx, LLC, a national provider of pharmacy services to long-
term care facilities, agreed to pay the United States $2.75 million to resolve allegations that
it violated Federal law by allowing opioids and other controlled substances to be dispensed
without valid prescriptions between January 1, 2014, and December 13, 2021. The
Government alleged that AlixaRx violated the Federal Controlled Substances Act (“CSA”) in
its dispensing pursuant to purported “emergency prescriptions.” In nearly all
circumstances, Schedule II controlled substances require a written prescription by a
physician, and refills are not permitted by law. The CSA allows pharmacists to dispense
Schedule II controlled substances, such as opioid pain medications, without a written
prescription only in true emergency situations and, even then, only for the quantity of
drugs necessary to treat the patient during the emergency period. Emergency
prescriptions must promptly be reduced to writing and signed by an authorizing physician
within 7 days of issuance. Failure to meet these requirements results in an illegal
dispensing of controlled substances without a valid prescription. The Government’s
investigation revealed that AlixaRx routinely abused the emergency prescription provisions
of the CSA by requesting and obtaining verbal “emergency” refills from prescribers, in the
absence of any true emergency. Instead, the company used these purported emergency
prescriptions to effectuate simple refills of the patients’ medications. Moreover, AlixaRx
routinely failed to obtain written prescriptions within 7 days after the verbal authorization.
Rather than disclose these violations to the Drug Enforcement Administration (DEA) as
required by law, AlixaRx engaged in a nationwide scheme to cover up its violations by
obtaining backdated prescriptions from the prescribing physicians, in many cases over a
year after the controlled substances had been dispensed. The Government also resolved
claims that AlixaRx billed Medicare Part D for claims that had already been reimbursed
through claims paid to long-term care facilities under Medicare Part A. Finally, the
Government resolved allegations that AlixaRx submitted false claims to Medicare for invalid
emergency prescriptions, as discussed above.
Prescription Drugs
The following case examples involve prescription drugs:
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Washington, DC—On June 4, 2021, Ivan Lamont Robinson, a licensed nurse practitioner,
was sentenced to 135 months in Federal prison and ordered to forfeit $108,000. Robinson
was previously found guilty by a Federal jury of 42 Federal charges that he distributed
oxycodone outside the legitimate scope of professional practice and without a legitimate
medical purpose, and two counts of money laundering. According to the testimony and
evidence at trial, Robinson ran a pain management clinic and his practice received
numerous complaints from pharmacists who suspected that he was operating a “pill mill”
rather than a legitimate medical pain management practice. “Pill mill” is a shorthand
terminology for a medical practice that sells prescriptions to customers, usually for cash.
Through his position as a nurse practitioner, under District of Columbia law, Robinson had
authority to prescribe oxycodone to patients. Robinson sold prescriptions to customers in
exchange for $370 in blank money orders. Customers came from outside the District of
Columbia to purchase identical prescriptions for 60 tablets of 30 milligrams of oxycodone.
During the trial, the Government presented testimony from a medical expert who stated
that Robinson provided no real medical treatment, and there was no medical basis to
prescribe oxycodone.
New York—On July 8, 2021, following a jury trial, Gordon Freedman was sentenced in
Federal court to 121 months in prison for participating in a scheme to receive bribes and
kickbacks in the form of fees for sham educational programs (“Speaker Programs”) from
pharmaceutical company Insys Therapeutics in exchange for prescribing millions of dollars’
worth of Subsys, a potent fentanyl-based spray manufactured by Insys, among other
offenses. In March 2013, a Regional Sales Manager for Insys sent an email to Freedman
informing him that he would receive more Speaker Programs in the coming months
because Insys wanted prescriptions of Subsys to increase and urging Freedman to put
more patients on Subsys. Freedman responded, in part, “Got it,” and significantly increased
his Subsys prescriptions in the following months, during which he received approximately
$33,600 in Speaker Program fees. Freedman was also sentenced to 210 months in prison,
to run concurrently with the other sentence, for distributing oxycodone and fentanyl to a
patient for no legitimate medical purpose. During the period in which Freedman was
receiving kickbacks from Insys, he was also distributing powerfully addictive prescription
drugs to a particular patient (“Patient-1”) with no legitimate medical purpose. From 2013
through 2017, Freedman prescribed enormous quantities of oxycodone and fentanyl to
Patient-1. For example, in 2013 alone, Freedman prescribed for Patient-1 approximately
85,427 oxycodone pills—an average of approximately 234 oxycodone pills per day—
containing a total of approximately 2,422,435 mg of oxycodone. In April 2017, Freedman
gave Patient-1 prescriptions for approximately 150 doses of a drug containing fentanyl, and
for approximately 950 oxycodone pills containing approximately 30 mg of oxycodone per
pill. On or about May 4, 2017, Patient-1 died of a fentanyl overdose after ingesting a
quantity of the drug prescribed by Freedman on or about April 13, 2017. In addition to the
prison sentence, Freedman was sentenced to 3 years of supervised release, ordered to
forfeit $308,600, and ordered to pay a total fine of $75,000 across the two cases.
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Kickbacks
The following case example involves kickbacks:
Tennessee—On July 30, 2021, Alere, Inc. (Alere) and its wholly owned subsidiary Arriva
Medical, LLC (Arriva) agreed to pay $160 million to resolve allegations that they violated the
False Claims Act. Arriva was a Florida-based mail-order supplier of diabetic testing
supplies, including blood glucose testing meters (glucometers), testing strips, and lancets.
In November 2011, Arriva was purchased by Alere, a medical device company, and Arriva
continued to operate as a wholly owned subsidiary of Alere. In September 2017, Abbott
Laboratories acquired Alere and Arriva, and in December 2017 announced that it was
shutting down Arriva’s business. The settlement resolves allegations that: (1) from April 1,
2010, through December 31, 2016, Arriva and Alere violated the Anti-Kickback Statute by
paying kickbacks to Medicare beneficiaries in the form of free glucometers and the routine
waiver of beneficiary copayments, and then submitted or caused the submission of false
claims for diabetic testing supplies on behalf of those beneficiaries; (2) from March 1, 2009,
until December 31, 2016, Arriva and Alere submitted or caused to be submitted false Arriva
claims to Medicare for new glucometers for beneficiaries who the Arriva Defendants knew
had received a glucometer paid for by Medicare within the past 5 years, even though the
new glucometers were, for that reason, not covered by Medicare; and (3) from April 15,
2011, to April 25, 2016, Arriva submitted or caused to be submitted 227 false claims to
Medicare for 211 beneficiaries who had been deceased for more than 14 days as of Arriva’s
reported dates of service for the claims.
Electronic Health Records
The following case example involves electronic health records:
Florida—On April 30, 2021, CareCloud Health, Inc. (CareCloud), a Miami-based developer
of electronic health record (EHR) software products and related services, agreed to pay
$3,806,966.70 to resolve allegations that it paid unlawful kickbacks to generate sales of its
EHR products. The United States alleged that CareCloud violated the False Claims Act and
the Anti-Kickback Statute through its marketing referral program called the “Champions
Program.” In particular, it is alleged that between January 1, 2012, and March 31, 2017,
CareCloud provided its existing clients with cash-equivalent credits, cash bonuses, and
percentage-success payments to recommend CareCloud’s EHR products to prospective
clients. Existing clients who participated in the Champions Program (“participants”) signed
written agreements that prohibited them from providing negative information about
CareCloud’s EHR products to prospective CareCloud clients. Prospective CareCloud clients
were not told about this referral-kickback arrangement or about the contract that
prohibited participants from sharing negative company information with them.
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Home Health
The following case example involves hospitals:
Texas—On May 26, 2021, in the Southern District of Texas, Taiwo Dipeolu signed a
settlement agreement with CMS and the United States Attorney’s Office for the Southern
District of Texas under which Taiwo Dipeolu relinquished all rights to $3,974,873.63 that
was being held in escrow by CMS after Uphill Home Health was sold to Santa Margarita
Healthcare Services in October 2018. During the ownership transition from November 2018
to December 2018, Uphill Home Health submitted approximately $3,857,023.67 in Request
for Anticipated Payment (RAP) claims for home health services that were not provided to
Medicare beneficiaries.
Laboratories
The following case example involves laboratories:
Florida—On May 7, 2021, the University of Miami (UM) agreed to pay $22 million to resolve
allegations that it violated the False Claims Act, and to enter into a 5-year Corporate
Integrity Agreement with OIG. The settlement resolves allegations that UM: (1) ordered
medically unnecessary laboratory tests and submitted false claims to Federal health care
programs through its transplant laboratory; (2) caused Jackson Memorial Hospital (JMH) an
affiliate, to submit inflated claims for pre-transplant testing in violation of the Related Party
Rule, 42 C.F.R. 413.17; and (3) failed to satisfy the notification requirements of 42 C.F.R.
413.65 and thus billed for hospital outpatient department rates rather than physician clinic
rates. The United States reached a separate $1.1 million settlement agreement with JMH
relating to its role in this conduct.
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 127
individuals or entities, 55 criminal actions, and more than $173.1 million in investigative receivables.
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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 DEA, FBI, and the 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:
Texas—On May 4, 2021, Brenda Rodriguez, The owner and operator of a purported medical clinic,
QC Medical Clinic, was sentenced to 25 years in prison and ordered to pay $250,000 in restitution
for participating in an $11 million Medicare fraud scheme in which fraudulent medical documents
were sold to home health agencies in and around Houston. According to the evidence presented
at trial, from October 2012 through August 2015, Rodriguez and others conspired to defraud
Medicare by selling Plans of Care, and other medical documents signed by a doctor, through QC
Medical Clinic (“QC Medical”) to various home health services, resulting in approximately
$11 million in false and fraudulent claims for home health services billed to Medicare. The evidence
at trial showed that home health agencies billed Medicare for home health services that were not
medically necessary and, in many instances, not provided.
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.
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
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/. During this semiannual
reporting period, no fugitives were captured.
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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 $43,941,367 as a direct result of cases originating from hotline complaints.
OIG Hotline Activity (4/1/2021–9/30/2021)
Contacts to 1-800-HHS-TIPS phone line, including 54,995
callers seeking information
Total tips evaluated 18,674
Tips referred for action 10,624
Closed; no basis provided for further action 1,887
Closed; no HHS violation1 995
Sources of tips referred for action
Phone 3,555
OIG website 5,414
Letters or faxes 567
Other 1,088
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
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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:
Mississippi Medicaid Fraud Control Unit: 2020 Inspection (OEI-12-20-00200), August 2021;
Louisiana Medicaid Fraud Control Unit: 2020 Inspection (OEI-12-20-00650), August 2021;
South Carolina Medicaid Fraud Control Unit: 2020 Inspection (OEI-02-20-00610), September
2021; and New Mexico Medicaid Fraud Control Unit: 2020 Review (OEI-06-20-00550),
September 2021.
OIG Joint Casework With MFCUs
The following case example involves OIG’s joint efforts with MFCUs:
Texas—On April 23, 2021, four executives of Continuum Healthcare and its various health
centers were ordered to Federal prison for a massive scam perpetrated in the Houston
area. Bobby Rouse, 81, and Steven Houseworth, 47, both of Houston; Jeffery Parsons, 62,
of Crockett, Texas; and David Edson, 72, of Palm Harbor, Florida; all pleaded guilty to their
respective roles in the scam. Rouse, Houseworth, Edson, and Parsons were part of the
executive team for Continuum Healthcare LLC, which owned Westbury Community Hospital
in Houston as well as community mental health centers in the Houston area known by their
locations as Hornwood, Baytown, and Missouri City. Each location operated a PHP. The
PHP was supposed to be a treatment program for individuals with mental illness, intended
to closely resemble a highly structured, short-term hospital inpatient program. However,
although it was a distinct and organized intensive treatment program, it offered less than
24-hour daily care.
The four men were responsible for the day-to-day operation of Continuum/Westbury and
were involved in the implementation of the various kickback programs. Numerous people
were referred for treatment in exchange for payment. However, the vast majority did not
qualify for PHP services, because they were not experiencing an acute psychotic episode or
were actually suffering from mental retardation, dementia, or Alzheimer’s. In total,
Continuum billed Medicare approximately $189 million in total for fraudulent PHP services
and Medicaid paid approximately $66 million on those claims.
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Department of Health and Human Services, Office of Inspector General
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As a result, Rouse was sentenced to 120 months in prison and ordered to pay $21,359,798
in restitution. Edson was sentenced to 48 months in prison and ordered to pay $21,359,798
in restitution. Parsons was sentenced to 30 months in prison and ordered to pay
$19,533,806 in restitution, and Houseworth was sentenced to 30 months in prison and
ordered to pay $1,500,000 in restitution.
HHS-OIG, FBI, Texas Attorney General's Medicaid Fraud Control Unit, and Internal Revenue
Service (IRS)-Criminal Investigation participated in the joint investigation.
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
over 20 requests for advisory opinions and issued 13 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 737 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 654 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
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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:
Pennsylvania—On May 20, 2021, a private business owner in Pennsylvania was excluded
for the minimum period of 95 years based on his conviction of Wire Fraud, Mail Fraud and
Theft of Government Property: Aiding and Abetting. From about 1999 to about October
2014, this individual participated in a scheme that promised to return expired drugs from
his business’s health care client facilities (hospitals, pharmacies, long-term care facilities) in
exchange for a fee for service. The business owner would then launder the proceeds of the
fraud by keeping the profits that his entity received for the return of the expired drugs.
Over 13,000 clients were impacted by this fraudulent activity. The court ordered the
business owner to forfeit approximately $114,832,400 and also sentenced him to serve 5
years of incarceration.
Wyoming—On July 20, 2021, a medical doctor in Wyoming was excluded for a minimum
period of 45 years based on his convictions for conspiracy to dispense and distribute
oxycodone, alprazolam, hydromorphone and carisoprodol resulting in death, dispensing of
oxycodone, possession with intent to distribute oxycodone and aid and abet, unlawful use
of a communications facility and engaging in monetary transactions derived from specified
unlawful activity. From about January 2011 to about November 2016, the medical doctor
prescribed addictive opioids for payment in small rural communities located in and around
Arizona, Wyoming, and Wind River Indian Reservation, specifically targeting vulnerable
addicts for addictive opioids prescriptions. The medical doctor’s conduct resulted in the
death of an individual, and the court sentenced him to 300 months of incarceration. In
addition, the Arizona Board of Medicine suspended his license to practice as a medical
doctor.
Virginia—On August 19, 2021, Indivior Solutions, Inc., a Virginia pharmaceutical
manufacturer, was excluded for a minimum period of 80 years based on its conviction of
knowingly and willfully making materially false statements relating to health care matters.
From about December 2012 to December 2015, this entity marketed Suboxone film to
physicians and health care programs using false and misleading claims that Suboxone film
was less subject to diversion and abuse than other buprenorphine products and that
Suboxone film was less susceptible to accidental pediatric exposure than Suboxone tablets.
In addition, to increase sales, employees and agents of the entity persuaded MassHealth
that Suboxone film had a safety benefit compared to other drugs. This entity also failed to
correct inaccurate and misleading statements that it made to MassHealth about
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unintended pediatric exposure. The entity caused an estimated loss of approximately
$244,165,000 based on its conduct.
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.
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
$44.2 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:
Minnesota—Ritesh Patel (Patel) entered into a settlement agreement with OIG in which he
agreed to be excluded under 42 U.S.C. 1320a-7a and 42 U.S.C. 1320a-7(b)(7) for 10 years.
OIG alleged that Patel knowingly presented or caused to be presented specified claims
under an HHS grant that he knew or should have known were false or fraudulent and made
or caused to be made false statements of material fact in documents that are required to
be submitted to directly or indirectly receive funding provided by HHS. Specifically, OIG
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alleged that: (1) Patel misrepresented to a federally qualified health center (FQHC) that he
had a Doctor of Medicine (M.D.) degree from the Saint James School of Medicine and a
Doctor of Philosophy (Ph.D.) degree in Economics and a Master of Business Administration
(M.B.A.) degree from the University of Florida, causing the FQHC to submit a prior approval
request that contained these same misrepresentations to the Health Resources and
Services Administration (HRSA) to obtain Patel’s approval as the FQHC’s Chief Executive
Officer; and (2) Patel mispresented to HRSA in funding applications that he had an M.D.,
Ph.D., and M.B.A.
Florida—Bay Pharmacokinetic Associates LLC, Daniel Deana, M.D., Cynthia Greathouse,
M.D., and David Weinrach, M.D. (collectively, “Bay Pharmacokinetic”), entered into a
$1,082,182.50 settlement agreement with OIG. The settlement agreement resolves
allegations that Bay Pharmacokinetic submitted claims for comprehensive clinical pathology
consultations under CPT code 80502 that were for services provided: (1) by Bay
Pharmacokinetic Associates pharmacists in a hospital setting that did not meet the
requirements to be billed incident to a physician’s professional services; and (2) to hospital
inpatients on consecutive days of the patient’s stay where no consultation request had
been made, no written narrative report by a consultant pathologist was produced, and no
exercise of medical judgment by a consultant pathologist was required.
Massachusetts—Cataldo Ambulance Service, Inc. (Cataldo) entered into a $704,706.62
settlement agreement with OIG to resolve allegations that Cataldo 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:
South Carolina—Three Rivers Behavioral Health (Three Rivers) entered into a $25,000
(maximum penalty) settlement agreement with OIG to resolve allegations that Three Rivers
violated EMTALA when it failed to accept the appropriate transfer of a patient with an
unstable emergency medical condition. Specifically, the patient presented to the
Emergency Department of a small community hospital complaining of headaches, hearing
voices, and thoughts of suicide by shooting herself or jumping off a bridge. Because it did
not have the capabilities to stabilize the patient’s emergency medical condition, the
hospital faxed the patient’s medical record to Three Rivers with a request for a “bed for this
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[patient].” Soon thereafter, Three Rivers called the transferring hospital and claimed that
Three Rivers “had no appropriate beds available for this patient at this time.” In fact, Three
Rivers had 26 available beds in its adult and crisis stabilization units. OIG determined that
the fax and telephone conversation clearly constituted a request for transfer and that Three
Rivers refused to accept the appropriate transfer of the patient when it had both the
capabilities and the capacity to stabilize the patient’s emergency medical condition.
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 Protocol may give
providers the opportunity to avoid costs or disruptions associated with Government-directed
investigations and civil or administrative litigation.
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 $41.2 million in HHS receivables.
The following case examples pertain to provider self-disclosure settlements:
Colorado—After it self-disclosed conduct to OIG, HealthONE Radiation Therapy at Red
Rocks, LLC (HealthONE) (Colorado), paid $3,569,645.76 for allegedly violating the Civil
Monetary Penalties Law. OIG alleged that HealthONE submitted claims for certain radiation
and oncology services that used incorrect CPT codes, used incorrect dates of service, had
incomplete documentation, were not rendered, were unbundled, lacked documentation to
support necessity of the services, and had no order supporting the service. The improper
claims involved 25 different CPT codes, and encompassed radiation therapy planning and
simulation services, also known as “physics and dosimetry,” as well as evaluation and
management services provided to patients undergoing radiation therapy.
Texas—After they self-disclosed conduct to OIG, Ascension Texas and Ascension Seton
d/b/a Dell Seton Medical Center at The University of Texas (DSMC), Ascension Seton
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Medical Center Austin (ASMCA), and Ascension Seton Williamson (ASW), paid
$20,983,887.75 for allegedly violating the Civil Monetary Penalties Law, including provisions
applicable to physician self-referrals and kickbacks. OIG alleged that: (1) DSMC and ASW
paid remuneration to an orthopedic surgery group in the form of above fair market value
(FMV) payments for on-call coverage; (2) DSMC paid remuneration to an Austin physician
practice in the form of above FMV payments for on-call coverage; (3) ASMCA paid
remuneration to the Austin physician practice in the form of above FMV payments for
transplant on-call coverage and administrative services; (4) ASW paid remuneration to the
Austin physician practice in the form of above FMV payments to lease the practice’s
employed registered nurses and surgical technologists that participates in surgeries
performed by the Austin physician practice’s physicians at ASW; (5) ASMCA paid
remuneration to the Austin physician practice in the form of above FMV payments for
administrative services relating to its thoracic surgery program; (6) ASMC paid
remuneration to the Austin physician practice in the form of free physician assistants
employed by ASMCA for which the Austin physician practice should have compensated
ASMCA; and (7) ASMCA paid remuneration to the Austin physician practice in the form of
free office space in a medical office building and related staff, service, and supply support
for one half day per week to perform clinical services.
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
compliance 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 parties that
fail to comply with the requirements of their CIAs.
The following case examples involve CIA enforcement:
Virginia—After it disclosed conduct to OIG pursuant to its CIA, Medical Transport, LLC
(MTL) entered into a $86,856.35 settlement agreement with OIG. OIG alleged that MTL
submitted claims for non-emergency ambulance services that did not meet the Medicare
requirements relating to physician certification statements.
California—After it disclosed conduct to OIG pursuant to its CIA, Longwood Management
Corp., and a facility it manages, Intercommunity Healthcare and Rehabilitation Center
(Intercommunity), entered into a $121,783.31 settlement agreement with OIG. OIG alleged
that Intercommunity employed an individual that it knew or should have known was
excluded from participation in the California Medicaid program (Medi-Cal) and that no
Medi-Cal payments could be made for items or services the individual furnished.
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Public Health and Human Service Agency
Reports and Reviews
Centers for Disease Control and Prevention
Although CDC Implemented Our Prior Audit Recommendations, Its Corrective Actions Did Not
Effectively Address Findings Related to 3 of Our 13 Recommendations (A-04-19-01014), August 2021
CDC implemented the 13 recommendations from our prior audit of FY 2013 expenditures; however,
CDC’s corrective actions for the following recommendations were not effective in addressing our
previous findings. Those recommendations were: (1) conduct quality assurance reviews of Notices
of Funding Opportunity and funded grant applicant information to monitor compliance with HHS
and CDC policies when awarding U.S. President’s Emergency Plan for AIDS Relief (PEPFAR) funds,
(2) perform adequate cost analyses and business management evaluations of funded applicants,
and (3) include necessary and accurate requirements in the Notices of Award (NOAs).
For our current audit, CDC: (1) did not comply with one or more HHS or CDC policies when
awarding PEPFAR funds, (2) did not perform cost analyses before issuing some of the grant awards,
and (3) issued several NOAs with missing or incorrect reporting requirements.
CDC officials concurred with our recommendations that CDC: (1) develop and implement a written
policy requiring periodic internal review of PEPFAR award files for compliance with HHS and CDC
policies; (2) fully implement its Cost Analysis Standard Operating Procedure (SOP) by establishing a
formal date of effectiveness, updating the SOP periodically, and enforcing its use through regular
compliance testing as part of the internal reviews of PEPFAR award files; (3) and establish a policy
requiring periodic reviews of, and updates to, the NOA link to ensure functionality, accuracy, and
relevance of the content.
Food and Drug Administration
Risk Assessment of the Food and Drug Administration’s Travel Card Program (A-04-19-06235), May
2021
FDA generally designed and implemented controls and strategies to mitigate the potential risks of
illegal, improper, or erroneous purchases in its travel card program. Within the 6 risk areas related
to the FDA travel card program, we identified 46 sub-risk areas and assessed 38 as low risk and 8
as moderate risk. Overall, we assessed the FDA travel card program as low risk. This report
contains no recommendations.
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High-expenditure Medicare drugs often qualified for Orphan Drug Act incentives designed to
encourage the development of treatments for rare diseases (OEI-BL-20-00080), September 2021
The majority of high-expenditure Medicare drugs often received Orphan Drug Act (ODA) financial
incentives, with some generating significant Medicare expenditures and billions of dollars in annual
revenue while treating only rare diseases or conditions and others being primarily used to treat
relatively common conditions. This report provides several insights that raise important questions
for further consideration: How do the trends and patterns observed in our findings align with the
overall goals of the ODA? Are current eligibility requirements and incentives the most effective
way to ensure the continued development of affordable drugs to treat patients suffering from rare
diseases and conditions? How has the increasing number of orphan drugs in recent years affected
other Federal programs outside of FDA (e.g., Medicare or the 340B Drug Discount Program)?
OIG encourages the policymaking, oversight, and research communities to seek answers to these
compelling questions, while ensuring that the program continues to encourage the development
of orphan drugs.
Indian Health Service
Indian Health Service Use of Critical Care Response Teams Has Helped To Meet Facility Needs During
the COVID-19 Pandemic (OEI-06-20-00700), September 2021
The COVID-19 pandemic has disproportionately affected racial and ethnic minority groups in the
United States, including American Indians and Alaska Natives. To strengthen the Indian Health
Service (IHS) and Tribal health care facilities’ response to the pandemic, IHS developed and
deployed Critical Care Response Teams (CCRTs) to support facilities in caring for critically ill
COVID-19 patients. While onsite, the CCRTs assessed facility needs and provided hands-on
training to strengthen staff skills and capacity to handle patient surges. We found the CCRT
program to be a positive step in IHS’s efforts to address the immediate needs of facilities. This
model also holds promise for addressing some of the longstanding challenges that facilities face
related to quality of care and staffing. We made three recommendations to IHS to further leverage
the successes of the CCRT model in support of IHS’s broader care improvement efforts to solicit
feedback from CCRTs regarding their observations of potential need for broader IHS-wide
improvements; compile the CCRTs’ recommendations to individual facilities and share them across
all IHS and Tribal facilities; and assess whether IHS could use the CCRT model to provide support
and training to facilities needing assistance with non-COVID-19-related care.
National Institutes of Health
Selected NIH Institutes Met Requirements for Documenting Peer Review but Could Do More To Track
and Explain Funding Decisions (OEI-01-19-00140), June 2021
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Although NIH met basic requirements for documenting first-level peer review, it has limited insight
into the extent and nature of its institutes and centers’ (ICs’) decisions to fund less favorably ranked
grant applications. This can raise questions about the transparency, impartiality, and fairness of
NIH’s grantmaking process. NIH concurred with both of our recommendations, which were for it
to centrally track and monitor data on ICs’ funding grant applications out of rank order, and
update its policy and guidance to reflect the latest HHS grants policy on justifying funding out of
rank order.
The National Heart, Lung, and Blood Institute Did Not Fully Comply With Federal Requirements for
Other Transactions (A-04-20-04078), April 2021
During our audit period, the NIH National Heart, Lung, and Blood Institute (NHLBI) did not fully
comply with Federal requirements for awarding and administering "other transactions" (OTs), which
are special award instruments that are generally not subject to Federal laws and regulations that
apply to traditional award instruments. For the 12 OTs in our sample, NHLBI did not adequately
document: (1) its justifications for using OTs rather than traditional award instruments, (2) that
awarded amounts were fair and reasonable and incurred costs were allowable, or (3) that it
complied with Federal requirements for obligating annual appropriations.
NHLBI did not adequately document its compliance with applicable Federal requirements because
its internal controls for awarding and administering OTs were ineffective. As a result, NHLBI could
not ensure the proper stewardship of Federal funds used to award OTs, including the $71.9 million
we reviewed.
NIH concurred with our recommendations that NHLBI strengthen its internal controls for OTs by
updating its policies and procedures to properly document its justifications for using OTs instead of
traditional award instruments and to determine fairness and reasonableness of award amounts,
allowability of costs, and compliance with Federal funding requirements.
The National Human Genome Research Institute Should Strengthen Procedures in Its Pre-Award
Process To Assess Risk for Certain Foreign and Higher Risk Applicants (A-05-20-00026),
August 2021
The National Human Genome Research Institute (NHGRI) generally had adequate policies and
procedures in place for assessing risk in its grant pre-award process when awarding grant funds.
However, we determined that NHGRI had inadequate policies and procedures as they relate to
assessing the risk to NHGRI grant programs presented by foreign applicants and mitigating
potential risk associated with applicants demonstrating higher risk factors. As a result, some risks
associated with foreign applicants and applicants demonstrating higher risk factors may not have
been identified and mitigated before grant funds were awarded.
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NIH generally agreed with our recommendations that it direct NHGRI to: (1) improve its policies
and procedures to ensure that Grants Specialists monitor whether required audit reports are
submitted for foreign applicants; (2) clarify existing procedures to specify when Grants Specialists
should take additional steps, including the imposition of specific award conditions, to mitigate risk
for new grantees; and (3) update policies and procedures for Grants Specialists to require that they
review available IRS Form 990s regarding grant applicants' risk factors before awarding grant
funds.
Human Services Agency Reports and Reviews
New York Did Not Have Adequate Oversight of Its Reported Temporary Assistance for Needy Families
Program Expenditures (A-02-17-02005), May 2021
New York’s oversight did not ensure that its reported TANF and maintenance-of-effort (MOE)
expenditures met Federal requirements. Specifically, although New York timely submitted required
expenditure reports to ACF, except for certain State tax credits, it did not ensure the accuracy of
the other expenditures reported to ACF. Rather, New York relied on its local districts and TANF-
funded State programs to compile and maintain supporting documentation for its reported
expenditures and did not review the documentation.
As a result, New York could not ensure that its reported TANF program expenditures for FY 2016,
totaling $4.8 billion in TANF and MOE expenditures, met Federal requirements and were used in
accordance with the intended purposes of its TANF grant. Inaccurate reporting of TANF program
expenditures could negatively impact ACF’s program decision making related to how States use
their TANF and MOE funds.
New York agreed with our recommendations that it: (1) work with its local districts and TANF-
funded State programs to develop financial management procedures that would enable it to
determine if TANF and MOE expenditures are accurately reported to ACF, including the $4.8 billion
in TANF and MOE expenditures reported for FY 2016; and (2) improve its oversight of the TANF
program by providing additional guidance and training to ensure that its local districts accurately
report expenditures and maintain adequate documentation to support TANF and MOE
expenditures reported.
Gateway Community Action Partnership Claimed Unallowable Costs, Did Not Comply With Federal
Regulations on Construction and Major Renovations, and Did Not Accurately Account for Grant
Funds (A-02-18-02011), May 2021
Gateway did not account for HHS grant funds in accordance with Federal requirements.
Specifically, Gateway claimed $932,607 of unallowable costs and did not comply with Federal
regulations on construction and renovations. These deficiencies occurred because Gateway did
not have all necessary procedures in place and did not adhere to Federal procurement
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requirements, and ACF’s monitoring did not ensure that Gateway complied with Federal
requirements related to construction and renovations. Further, some expenditures were not
properly allocated. Finally, ACF relied on Gateway’s documentation and did not thoroughly review
it for consistency and accuracy. Gateway partially concurred with our recommendation that it
refund $932,607 and ensure compliance with Federal requirements and the accuracy of
information submitted to ACF. Gateway did not indicate concurrence or nonconcurrence with our
recommendations that ACF ensure that Gateway complies with Federal requirements and verifies
submitted information to support Gateway’s grant award applications, including requesting
independent analyses of cost comparisons for Head Start facility construction and major
renovations.
Colorado’s Monitoring Did Not Ensure Child Care Provider Compliance With State Criminal
Background Check Requirements at 18 of 30 Providers Reviewed (A-07-19-06084), April 2021
Colorado’s monitoring process did not ensure provider compliance with State requirements related
to criminal background checks for 18 of the 30 child care providers we reviewed. We found that
107 of 679 individuals requiring a background check did not obtain 1 or more of the required
criminal background checks. Although Colorado reviewed required background checks during its
annual inspections of child care providers, the providers did not always inform the State and
properly obtain background checks when hiring individuals or when new individuals began to
reside in family homes. Furthermore, Colorado did not retain criminal background check records
for child care center individuals who required background checks and instead relied on the child
care centers to retain these documents. Moreover, Colorado did not require child care providers
and associated individuals to receive training on background check requirements. By not ensuring
that all individuals who supervised or had routine unsupervised contact with children had passed
all criminal background checks, Colorado potentially jeopardized the safety of children at these
child care providers. Colorado concurred with our recommendations that it: (1) conduct all
required criminal background checks for the 107 individuals in our sample who did not have the
required checks at the time of our audit (if still employed), (2) ensure that child care providers and
associated individuals requiring a background check receive training on background check
requirements, and (3) ensure that all required background checks are completed and retain these
records until the background check expires.
Toolkit: Insights From OIG's Work on the Office of Refugee Resettlement’s Efforts To Care for
Unaccompanied Children (OEI-09-21-00220), May 2021
This toolkit compiles insights from OIG’s oversight of the Unaccompanied Children Program. The
insights provided are largely drawn from the findings, recommendations, and conclusions in OIG’s
body of work conducted since 2008, including reports that were issued following site visits at 45
facilities during the 2018 surge of children entering the Unaccompanied Children Program.
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Safety of Children in Foster Care
Missouri’s Efforts To Protect Children Missing From Foster Care (OEI-07-19-00372), September 2021
The Missouri foster care agency (Missouri) missed opportunities to identify and mitigate children’s
risk for going missing from foster care. Additionally, there is no evidence that once children
became missing, it complied with State and Federal requirements and effectively used all resources
available to assist in locating the children. Further, Missouri appeared to do little, once the children
were located, to ensure that the children would not go missing again and that they received
supportive services to address trauma they experienced while missing from care.
These findings raise concerns about Missouri’s ability to protect vulnerable children from the risks
associated with being missing from foster care. Additionally, these findings suggest that other
States may benefit from engaging with the ACF about potential deficiencies in their States. Such
deficiencies may include problems with fulfilling requirements when children go missing from and
return to foster care, as well as challenges in identifying and attempting to reduce risk factors for
children’s going missing. We made recommendations to Missouri and to ACF. Missouri did not
explicitly concur or nonconcur with our three recommendations to its agency, but it did note
actions it has taken in response to our recommendations and agreed to take additional responsive
actions. ACF concurred with our two recommendations to its agency.
We recommended that Missouri develop policies to help identify: (a) children who have a
heightened risk of going missing from care and (b) interventions that could reduce their risk;
implement a monitoring mechanism to ensure that case managers comply with requirements and
document their compliance when children are identified as missing and when they are located or
return to care; and implement improvements to the case management system to enable accurate
identification of children who are missing from foster care.
We recommended that ACF develop a forum for States to share experiences and best practices
related to the following: reducing children’s risk for going missing from foster care, locating
missing children, and addressing their needs after they return to care; and supporting Missouri as it
works to reduce children’s risk for going missing from foster care and to improve compliance with
Federal and State requirements related to children who go missing.
Substance Abuse and Mental Health Services Administration
SAMHSA Lacks Adequate Data To Monitor Access to Medication-Assisted Treatment Through the
Buprenorphine Waiver Program (OEI-BL-20-00260), June 2021
The data reported to SAMHSA indicated that providers waivered at the highest level treated an
average of 116 MAT patients each—far below the limit of 275 patients. Also, less than a quarter of
the providers required to submit data actually did so. Although SAMHSA collects these data to
monitor provider compliance, the agency has exercised its discretion and not taken enforcement
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actions to improve reporting. OIG believes that the data collected from these providers has
benefits beyond compliance and enforcement. SAMHSA concurred with our recommendation to
develop comprehensive methods and measures to assess access to MAT via office-based
providers.
The Substance Abuse and Mental Health Services Administration Generally Had Controls and
Strategies for Mitigating Disaster Preparedness and Response Risks (A-04-20-02026), May 2021
Within the four risk areas related to SAMHSA’s disaster preparedness and response activities, we
identified eight sub-risk areas and rated four as low risk and four as moderate risk.
Overall, we assessed SAMHSA’s disaster preparedness and response activities as moderate risk.
Generally, SAMHSA designed and implemented various controls and strategies to mitigate the
potential moderate risks we identified. However, we did not perform procedures to determine the
effectiveness of these mitigating controls and strategies.
Furthermore, we were unable to determine whether SAMHSA had any plans to mitigate the
moderate risks associated with the sub-risk area of "Operating Structure and Reporting Lines."
SAMHSA concurred with our recommendation that it mitigate its Governance risk by formally
documenting its full organizational structure.
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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.
Currently, there is a moratorium on collection activities. Accordingly, PSC is not referring any individuals in
default at this time. Therefore, OIG has no figures to report for this semiannual reporting period.
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 one criminal action and court-ordered restitution and settlements of $107,833.
The following case example involves child support enforcement:
New Hampshire—On April 1, 2021, Richard E. Goulet, Jr., was sentenced to 5 years of
probation for failing to pay child support. According to court documents and statements
made in court, in December 2007, a decree of divorce was issued in the Portsmouth Family
Division Court ordering Goulet to pay support in a specified amount for his three children,
all of whom are residents of New Hampshire. Since the date of the decree in 2007, the
defendant failed to pay child support as ordered by the court. He owed over $100,000 in
unpaid support at the time of his arrest. Prior to sentencing, he paid over $107,000 of past-
owed child support to bring his obligations current. His sentence also includes a
mandatory condition requiring him to keep his monthly support obligations current.
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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.
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 2020 (A-18-20-11200), April 2021
Overall, through the evaluation of FISMA metrics, it was determined that the HHS information
security program was “Not Effective.” This determination was made based on: (1) the evaluation of
HHS not meeting a “Managed and Measurable” maturity level for Identify, Protect, Detect,
Respond, and Recover function areas; (2) the deficiencies within the Identify, Protect, and Respond
function areas; and (3) the evaluation of a maturity level below “Consistently Implemented” for
some FISMA metric questions both at HHS overall and at selected OpDivs. However, HHS
continues to implement changes to strengthen the maturity of its enterprisewide cybersecurity
program. Progress continues to be made to sustain cybersecurity maturity across all FISMA
domains. Also notable were increased maturation of data protection and privacy and information
systems continuous monitoring. Weaknesses continue to persist in Contingency Planning, which
was the only domain assessed with a maturity level of "Defined" in FY 2019 and again in FY 2020.
We identified opportunities where HHS can strengthen its overall information security program.
We recommend that HHS further strengthen its cybersecurity program and enhance information
security controls at HHS. Recommendations specific to HHS OpDivs were provided to them
separately. HHS generally concurred with our recommendations.
U.S. Department of Health and Human Services Met Many Requirements, but It Did Not Fully
Comply With the Payment Integrity Information Act of 2019 and Applicable Improper Payment
Guidance for Fiscal Year 2020 (A-17-21-52000), May 2021
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Ernst & Young (EY), LLP, determined that HHS met many requirements but did not fully comply
with the PIIA. Among the items required for compliance with PIIA that HHS complied with, EY
determined that HHS: (1) published the AFR for FY 2020, (2) conducted risk assessments for 23
programs not susceptible to improper payments and determined the programs were not at risk for
improper payments, and (3) published corrective action plans for 9 of the 13 programs identified as
susceptible to significant improper payments or deemed by OMB to be susceptible to significant
improper payments. EY also determined that HHS published and met annual reduction targets for
the 2 programs for which it reported reduction targets in the FY 2019 AFR and reported an
improper payment rate of less than 10 percent for 7 of the 13 programs identified as or deemed to
be susceptible to significant improper payments.
EY concluded that HHS did not comply with several other PIIA requirements. EY found that HHS:
(1) did not report an improper payment estimate for the TANF program, (2) reported improper
payment rates in excess of 10 percent for Medicaid and CHIP, and (3) did not conduct recovery
audits for the Medicare Advantage program. In addition, EY found that HHS did not record an
improper payment estimate for the Advanced Premium Tax Credit and CDC and Office of Head
Start disaster relief programs.
The Puerto Rico Department of Health’s Implementation of Its Emergency Preparedness and
Response Activities Before and After Hurricane Maria Was Not Effective (A-02-18-02002), July 2021
PRDOH did not effectively implement its emergency preparedness and response activities before
and after Hurricane Maria. In addition, PRDOH did not have an effective process for contacting
volunteer health professionals, did not describe in the Emergency Operation Plan (EOP) how it
would utilize the emergency management assistance compact or other mutual aid agreements
when responding to an emergency, and did not have procedures for health care coalitions to share
information with each other.
These deficiencies occurred because PRDOH’s planning efforts prior to Hurricane Maria did not
prepare PRDOH to meet actual needs and PRDOH did not have procedures in place to ensure that
activities were in accordance with its Hospital Preparedness Program-Public Health Emergency
Preparedness Cooperative Agreement. As a result, PRDOH placed the health and safety of its
residents at risk.
PRDOH did not indicate concurrence or nonconcurrence with our recommendations that it: (1)
revise its EOP, (2) consider working with the HHS Office of the Assistant Secretary for Preparedness
and Response to develop an effective method for contacting volunteers when there are
communication challenges, and (3) consider coordinating with appropriate organizations to
develop guidance on accurate cause-of-death certifications.
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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 $531 billion in grants and over $39 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 worldwide. 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.
Grant Fraud Investigations
The following case example relates to misuse of grant funds:
Ohio–On May 14, 2021, Song Guo Zheng, a rheumatology professor and researcher with
strong ties to China, was sentenced to 37 months in prison for making false statements to
Federal authorities as part of an immunology research fraud scheme. As part of his
sentence, Zheng was also ordered to pay more than $3.4 million in restitution to NIH and
approximately $413,000 to Ohio State University. Song Guo Zheng was arrested Friday,
May 22, 2020, after he arrived in Anchorage, Alaska, aboard a charter flight and as he
prepared to board another charter flight to flee to China. He was carrying three large bags,
one small suitcase and a briefcase containing two laptops, three cell phones, several USB
drives, several silver bars, expired Chinese passports for his family, deeds for property in
China and other items. He was transported to the Southern District of Ohio and made his
first Federal court appearance in Columbus last July. Zheng pleaded guilty last November
and admitted he lied on applications in order to use approximately $3.4 million in grants
from NIH to develop China’s expertise in the areas of rheumatology and immunology.
According to court documents Zheng had been participating in a Chinese Talent Plan, a
program established by the Chinese government to recruit individuals with knowledge or
access to foreign technology intellectual property, since 2013. Since that time, Zheng used
research conducted in the United States to benefit the People’s Republic of China. Zheng
failed to disclose conflicts of interest or his foreign commitments to his American
employers or to NIH. According to court documents, Zheng was a professor of internal
medicine who led a team conducting autoimmune research at Ohio State University and
Pennsylvania State University. According to his plea, Zheng caused materially false and
misleading statements to be made on NIH grant applications, seeking to hide his
participation in Chinese Talent Plans and his affiliation and collaboration with a Chinese
university controlled by the Chinese government.
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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
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. From October 1, 2020, to September 30,
2021, OIG received one referral related to potential fraud, waste, or abuse with respect to HHS
SBIR/STTR programs, and one case was opened. For FY 2021, there were approximately two civil
actions with total money associated at $1,307,353. The total case hours worked was 65.25 for a
total cost of case time of $11,992.30. At the end of FY 2021, OIG was working on two SBIR/STTR
investigations.
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 342
reports covering $2.1 trillion in audited costs. Federal dollars covered by these audits totaled
$816.2 billion, of which about $436 billion were HHS funds.
Uniform guidance at 2 CFR 200 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 organization wide
“single audits” of all Federal money they receive. These audits are conducted by non-Federal
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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,
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, 2021, Through September 30, 2021
Not requiring changes or having minor changes 314
Requiring major changes 25
Having significant technical inadequacies 3
Total Number of Non-Federal Audits 342
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.
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• 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.
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 59 $1,546,493,000 $508,377,000
Issued during the reporting period 46 $934,215,000 $341,274,000
Total Section 1 105 $2,480,708,000 $849,651,000
Section 2
Reports for which management decisions were made
during the reporting period2, 3
Disallowed costs 34 *$220,824,000 $156,000
Costs not disallowed 14 $174,781,000 $751,000
Total Section 2 48 $395,605,000 $907,000
* 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) 57 $2,085,103,000 $848,744,000
Section 4
Reports for which no management decisions were made
within 6 months of issuance4 22 $1,290,832,000 $507,471,000
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Table 1 End Notes
1
The opening balance was adjusted upward by $39.8 million because of a reevaluation of previously
issued recommendations.
2
Revisions to previously reported management decisions:
• A-09-11-02020, Review of Medicaid School-Based Administrative Costs Claimed by Arizona using
RMTS Methodology. In a settlement with the State, CMS agreed to accept the sum of $7,266,850,
reducing unallowable school-based administrative cost by $4,450,000.
• A-05-14-00046, National Government Services, Inc., Did Not Always Refer Medicare Cost Reports
and Reconcile Outlier Payments in Jurisdiction 8. CMS subsequent review of supporting
documentation determined that overpayments totaled $12,432,865, increasing disallowed cost by
$1,577,792.
• A-02-10-01009, New Jersey Generally Reported Medicaid Overpayments in Accordance With Federal
Regulations. CMS reached a settlement agreement with the State and agreed not to contest the
allowability of $1,401,296.
• A-05-11-00019, Cahaba Government Benefit Administrators, LLC, Did Not Always Refer Medicare
Cost Reports and Reconcile Outlier Payments. CMS’s subsequent review of provider’s
documentation determined that disallowed cost should be reduced by $1,098,376
• Not detailed are reductions to previously disallowed management decisions totaling $1.97 million.
3
Included are management decisions to disallow $48 thousand 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 22 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.
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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, AUG 2018, $939,287,686
A-02-14-02017 New York Misallocated Costs to Establishment Grants for A Health Insurance
Marketplace, NOV 2016, $149,654,512
A-07-19-00560 CMS Did Not Ensure That Medicare Hospital Payments for Claims That Included
Medical Device Credits Were Reduced in Accordance With
Federal Regulations, Resulting in as Much as $35 Million in Overpayments, NOV
2020, $35,398,147
A-01-14-02503 Maryland Misallocated Millions to Establishment Grants for a Health Insurance
Marketplace, MAR 2015, $28,400,000
A-04-14-07050 Kentucky Misallocated Millions to Establishment Grants for a Health Insurance
Marketplace, FEB 2017, $25,530,429
A-07-18-04111 Mississippi Needs To Improve Oversight of Its Child Care Payment Program, APR
2020, $22,284,900
A-02-15-02008 New York Did Not Comply With Federal Grant Requirements for Allocating and
Claiming Marketplace Contract Costs, DEC 2017, $20,415,344
A-07-15-04226 Not All of Missouri's Child Care Subsidy Program Payments Complied With Federal
and State Requirements, NOV 2017, $19,076,167
A-02-18-01028 Medicare Advantage Compliance Audit Of Specific Diagnosis Codes That Blue Cross
Blue Shield of Michigan (Contract H9572) Submitted to CMS, FEB 2021, $14,534,375
A-06-17-07004 Southwest Key Programs Failed To Protect Federal Funds Intended for the Care and
Placement of Unaccompanied Alien Children, SEP 2020, $13,130,848
A-01-15-02500 Vermont Did Not Properly Allocate Millions To Establishment Grants for A Health
Insurance Marketplace, SEP 2016, $11,243,006
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, APR 2019, $2,623,785
A-12-20-20001 The Office of Refugee Resettlement Did Not Award and Manage the Homestead
Influx Care Facility Contracts in Accordance with Federal Requirements, DEC 2020,
$2,581,157
A-07-17-02808 The Colorado Health Insurance Marketplace’s Financial Management System Did
Not Always Comply With Federal Requirements, JUL 2018, $2,567,604
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, JUN 2013, $1,419,524
A-05-14-00045 The Minnesota Marketplace Misallocated Federal Funds and Claimed Unallowable
Costs, NOV 2016, $1,279,677
A-09-14-01007 Nevada Misallocated Costs for Establishing a Health Insurance Marketplace to Its
Establishment Grants, FEB 2016, $893,464
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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, JUL 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, SEP 2019, $142,104
A-03-16-00250 Youth for Tomorrow–New Life Center, Inc., an Administration for Children and
Families Grantee, Did Not Comply With All Applicable Federal Policies and
Requirements, SEP 2020, $16,851
A-04-18-02010 Florida's Refugee Medical Assistance Payments Were Generally Allowable, JAN
2020, $8,772
A-05-18-00015 The University of Minnesota Complied With Federal Requirements To Perform Risk
Assessments and Monitor Subrecipients, NOV 2019, $1,924
TOTAL CINS: 22
TOTAL AMOUNT: $1,290,832,000
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, de-obligation 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 12 $16,609,621,000
Reports issued during the reporting period 3 $21,799,000
Total Section 1 15 $16,631,420,000
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 5 $318,909,000
Based on proposed legislative action 0 $0
Value of recommendations not agreed to by management 1 $40,610,000
Total Section 2 6 $359,519,000
Section 3
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Reports for which no management decisions had been made by the
end of the reporting period1 (Sec. 1 minus Sec. 2) 9 $16,271,901,000
Table 2 End Notes
1
Because of administrative delays, some of which were beyond management control, 7 of the 9 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, APR 2014, $15,000,000,000
A-03-17-00010 Hospitals Overbilled Medicare $1 Billion by Incorrectly Assigning Severe Malnutrition
Diagnosis Codes to Inpatient Hospital Claims, JUL 2020, $1,024,623,449
A-06-17-08004 Medicare Part D Is Still Paying Millions for Drugs Already Paid for Under the Part A
Hospice Benefit, AUG 2019, $160,800,000
A-03-13-03002 HHS Did Not Identify and Report Antideficiency Act Violations, MAY 2017,
$49,445,025
A-07-17-01176 Incorrect Acute Stroke Diagnosis Codes Submitted by Traditional Medicare Providers
Resulted in Millions of Dollars in Increased Payments to Medicare Advantage
Organizations, SEP 2020, $14,417,533
A-09-18-03030 Medicare Incorrectly Paid Providers for Emergency Ambulance Transports From
Hospitals to Skilled Nursing Facilities, SEP 2019, $968,718
A-09-20-03003 Medicare Improperly Paid Physicians for More Than Five Spinal Facet-Joint Injection
Sessions During a Rolling 12-Month Period, OCT 2020, $513,328
TOTAL CINS: 7
TOTAL AMOUNT: $16,250,768,000
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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, $2.7 billion was attributed to FY 2021. 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 Average Section 1603 of the Continuing $270,000,000
Manufacturer Price (AMP) under Appropriations Act, 2020, and Health
the Medicaid Drug Rebate Extenders Act of 2019 amended section
Program 1927(k)(1)(C) of the Social Security Act (the
Seek legislative change to exclude Act) to exclude generic drug transactions to
authorized generic drug secondary manufacturers in the brand name
transactions to secondary drug's AMP calculations. CBO estimated
manufacturers from the AMP savings of $3.15 billion over 10 years.
calculation of the brand name
drug. The recommendation
reflected findings in OIG report
A-06-18-04002.
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Medicaid Rebate for Generic Section 602 of the Bipartisan Budget Act of $127,000,000
Drugs 2015 (P.L. No. 114-74) (see Tab 2) was
Generic drug price increases enacted and included provisions extending
exceeded the specified statutory the additional rebate to generic drugs. The
inflation factor applicable to additional rebate for generic drugs will
brand-name drugs for 22 percent apply to rebate periods beginning with the
of the quarterly AMPs that OIG first quarter of 2017. CBO estimated savings
reviewed. If the provision for of $1.008 billion over 10 years.
brand-name 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 $515,000,000
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 $1,490,000,000
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 $1.49 billion
and coinsurance. The attributed to FY 2021. (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 $191,000,000
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
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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
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 $191 million attributed to FY
2021. (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 2021.
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, one peer review involving OAS was completed. Information
concerning OAS’s peer review activity during a prior reporting period is also listed below.
OAS Date Reviewing Office Office Reviewed
September 2021 HHS-OIG, OAS U.S. Department of the
Treasury (Treasury) OIG
The system of quality control for the audit organization of Treasury OIG in effect for the year
ending March 31, 2021, has been suitably designed and complied with to provide Treasury 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. Treasury OIG received a peer review rating of pass.
OAS Date Reviewing Office Office Reviewed
March 2021 General Services HHS-OIG, OAS
Administration OIG
The system of quality control for the audit organization of HHS-OIG in effect for the year ending
September 30, 2020, 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.
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OI Date Reviewing Office Office Reviewed
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, no peer reviews involving OEI were completed. Information
concerning OEI’s peer review activity during a prior reporting period is also listed below.
OEI Date Reviewing Office Office Reviewed
November 2020 Department of State, HHS-OIG, OEI
OIG
A CIGIE external peer Review Team assessed the extent to which HHS-OIG, OEI met seven Quality
Standards for Inspection and Evaluation (Blue Book) standards. The seven covered standards are:
Quality Control, Planning, Data Collections and Analysis, Evidence, Records Maintenance,
Reporting, and Followup. The assessment included a review of OEI’s internal policies and
procedures documented in the OEI procedures manual. It also included a review of four reports
issued between June 1, 2019, and June 1, 2020, to determine whether the reports compiled with the
seven standards and internal policies and procedures. The Review Team determined that OEI’s
policies and procedures generally met the seven standards. The four reports reviewed generally
met the standards and complied with OEI’s internal policies and procedures.
OEI Date Reviewing Office Office Reviewed
June 2020 HHS-OIG, OEI Department of Veterans Affairs
(VA) OIG
The 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 are: Quality Control, Planning, Data Collections and
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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
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, found at Section 1128A of the Social Security Act (42 U.S.C. § 1320a-7a), authorizes 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 $20,000 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; 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 $100,000 for each
false statement (42 U.S.C. 1320a-7a(9)).
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 who 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
action has not been completed Fraud, Waste, and Abuse
in HHS Programs: Top
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 Throughout this report
(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
within 60 days, and in which there are any outstanding
unimplemented recommendations
(a)(11) Description and explanation of revised management Appendix A
decisions
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Section Requirement Location
(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.
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 2021, OIG had a total of 84 reports
with overdue final management decisions (FMDs) as of the end of this reporting period. The
breakdown of those 84 reports by HHS OpDiv is as follows:
OpDiv Overdue FMDs
ACF 22
ASPR 1
CMS 35
IHS 13
NIH 6
OASH 1
OS 6
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
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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 1,369 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:
Number of Reports
Number of
FY (2011– with Dollar Value of Aggregate
Unimplemented
2021) Unimplemented Potential Cost Savings
Recommendations
Recommendations
2011 12 18 $408,135,515
2012 20 23 $369,932,148
2013 27 40 $234,261,321
2014 25 43 $15,120,235,800
2015 24 39 $313,122,644
2016 21 44 $184,356,090
2017 30 80 $1,090,560,442
2018 44 139 $1,527,030,423
2019 69 220 $734,747,701
2020 98 360 $2,469,732,285
2021 126 363 $1,012,913,539
Totals 496 1,369 $23,465,027,908
OIG annually produces a Solutions To Reduce Fraud, Waste, and Abuse in HHS Programs: OIG’s Top
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 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,
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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 referred3 to Federal prosecuting authorities for 1,393
criminal prosecution during the reporting period4
Total number of persons referred to State and local prosecuting authorities 144
for criminal prosecutions during the reporting period
Total number of Federal indictments and criminal information during the 406
reporting period that resulted from any prior referral to prosecuting
authorities
Total number of State and local indictments and criminal information during 82
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 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.
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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.
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 5 senior Government employees for misconduct.
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(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 related to whistleblower complaints.
Before 2015, OIG made no determinations as to whether retaliatory action had been taken. OIG
changed its process in 2015 to include findings in its reports as to whether, based on the facts and
evidence presented, whistleblower retaliation had occurred. Where appropriate, OIG also issues
recommendations as to whether corrective action(s) should be taken. Between April 1, 2021, and
September 30, 2021, OIG issued one whistleblower retaliation report that contained a
recommendation. However, OIG did not issue any reports during this reporting period that
included findings of whistleblower retaliation.
(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 take appropriate action in accordance
with the Inspector General Act if it were unable to resolve these issues within HHS.
(22) Detailed descriptions of the particular circumstances of each-
(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.
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Nonpublic Reports by Category, April 1, 2021, Through September 30, 2021
Number of
Category/Description
Reports
IT security reviews (involve IT systems, e.g., penetration test audits) 2
Homeland security issues (involve particularly sensitive topics, e.g.,
bioterrorism, emergency preparedness, and classified or potentially 0
classified information)
Recipient Capability Audits (primarily in Head Start/Early Head Start
0
programs)
Confidential or proprietary information (e.g., Medicare Part B drug
0
claims/imaging services, Medicare investment income)
Medicare Adverse Event Reviews (required by law not to disclose) 0
Medicare Prescription Drug Event Reviews 0
Other 0
HHS technical assistance reports5 0
Finance-related attestation reviews 2
Total 4
(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
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 five senior Government
employees for misconduct. Descriptions of the investigations are below.
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Description of Status Disposition DOJ DOJ DOJ DOJ
Investigation Referral Referral Declination Declination
Date Date
A senior Closed Insufficient Yes 6/16/2021 Yes 6/16/2021
Government evidence
employee allegedly
made
inappropriate
gesturing
comments to a
female minor. The
employee also
allegedly made
inappropriate
requests and
contact with two
pharmacy students.
Information Closed Insufficient No N/A N/A N/A
regarding an evidence
insider threat was
received regarding
a senior
Government
employee. The
information
disclosed that the
employee was
showing a pattern
of sponsoring and
collaborating with
individuals that
have connections
to institutes and
organizations of
concern. Possible
criminal
implications were
noted.
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An operational Closed Unsubstantiated No N/A N/A N/A
division provided
information that a
senior Government
employee may be
using HHS
information
systems to support
personal, foreign
work.
An operational Closed Letter of No N/A N/A N/A
division provided reprimand by
information that a complainant
senior Government agency
employee may be
transferring agency
data to personal
cloud or storage
devices without
written official
authorization.
An operational Closed Unsubstantiated No N/A N/A N/A
division provided
information that a
senior Government
employee may be
using government
technology and
information
systems to search
for and view child-
abuse material.
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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 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 and other
industry stakeholders. 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
Annual Solicitation
In December 2020, OIG published its annual solicitation in the Federal Register (Annual Solicitation). 1 In
response to the Annual Solicitation, OIG received the following proposals related to safe harbors:
Proposal OIG Response
A new safe harbor to protect the use In December 2020, as part of HHS’s broader Regulatory Sprint
of cash and cash-equivalent to Coordinated Care initiative, OIG issued a final rule (the
payments offered as part of “Regulatory Sprint Final Rule”), 2 creating a new safe harbor for
contingency management in the patient engagement tools and supports, which could protect
treatment of substance use disorders. certain in-kind incentives in connection with contingency
management, if all safe harbor conditions were met. 3 Due to
heightened fraud and abuse concerns with respect to
incentives in the form of cash or cash equivalents, we elected
1 OIG, Solicitation of New Safe Harbors and Special Fraud Alerts, 85 Fed. Reg. 81,439 (Dec. 16, 2020), available at
https://www.govinfo.gov/content/pkg/FR-2020-12-16/pdf/2020-26043.pdf.
2 Medicare and State Health Care Programs: Fraud and Abuse; Revisions to Safe Harbors Under the Anti-Kickback Statute, and Civil
Monetary Penalty Rules Regarding Beneficiary Inducements, 85 Fed. Reg. 77,684 (Dec. 2, 2020), available at
https://www.govinfo.gov/content/pkg/FR-2020-12-02/pdf/2020-26072.pdf.
3 42 CFR 1001.952(hh).
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2021, Through September 30, 2021
Proposal OIG Response
not to expand the safe harbor to include cash and cash-
equivalent payments offered as part of contingency
management interventions or other programs to motivate
beneficial behavioral changes. However, and as we explained
in the Regulatory Sprint Final Rule, this does not mean that all
such cash or cash-equivalent payments offered as part of a
contingency management intervention are unlawful, but they
would be subject to case-by-case analysis under the Federal
anti-kickback statute and the civil monetary penalty provision
prohibiting inducements to beneficiaries.
For the same reason as set forth in the Regulatory Sprint Final
Rule, we decline to adopt this suggestion. We may consider this
topic in future rulemaking.
A new safe harbor for Indian Health Although not specific to IHCPs, OIG believes existing
Care Providers (IHCPs) similar to the regulations, including new and modified safe harbors that were
safe harbor for federally qualified finalized in the Regulatory Sprint Final Rule, may offer sufficient
health centers at 42 CFR regulatory flexibility and can facilitate innovative value-based
§ 1001.952(w). and care coordination arrangements for American Indians and
Alaska Natives. Accordingly, OIG is not adopting this
suggestion. We may consider this topic in future rulemaking.
A new safe harbor or modifications As explained in the Regulatory Sprint Final Rule, remuneration
to existing value-based safe harbors exchanged by pharmaceutical manufacturers and, in certain
at 42 CFR § 1001.952(ee), (ff), (gg), circumstances, medical device manufacturers and DMEPOS
and (hh) that would protect entities, are not eligible for protection under the new value-
remuneration exchanged in value- based safe harbors due to (among other reasons) concerns that
based arrangements involving such entities could use the safe harbor to protect arrangements
pharmaceutical manufacturers and, in that are intended to market their products or inappropriately
circumstances not limited to digital tether clinicians to the use of a particular product. 4
health technology, device
manufacturers and durable medical
equipment, prosthetics, orthotics, or
supplies (“DMEPOS”) companies.
New or modified safe harbors to OIG is not adopting this suggestion. We believe that existing
protect remuneration furnished or regulations, including new and modified safe harbors that were
4 See, e.g., 85 Fed. Reg. at 77,709, 77,782 .
103
Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2021, Through September 30, 2021
Proposal OIG Response
exchanged by health care suppliers, finalized in the Regulatory Sprint Final Rule, offer sufficient
providers, or manufacturers in regulatory flexibility and protection for beneficiary incentives
support of medically underserved and financial arrangements that may support the care needs of
communities. medically underserved communities. We may consider this
topic in future rulemaking.
One or more new safe harbors that OIG has repeatedly expressed concerns regarding routine
would protect patient cost-sharing waivers of Medicare cost-sharing amounts that do not meet an
waivers in the following exception to the civil monetary penalty provision prohibiting
circumstances: (i) clinical trials; (ii) inducements to beneficiaries at section 1128A(i)(6)(A) of the
care management; (iii) remote Social Security Act. Accordingly, we decline to adopt these
physiological monitoring; and (iv) for suggestions.
the duration of the COVID-19 public
health emergency. With respect to the COVID-19 public health emergency, we
highlight OIG’s March 2020, Policy Statement, 5 in which we
notified providers that, subject to specified conditions, they will
not be subject to administrative sanctions for reducing or
waiving cost-sharing obligations that Federal health care
program beneficiaries may owe for telehealth services furnished
during the COVID-19 public health emergency.
In addition, on May 5, 2021, OIG published an FAQ addressing
ambulance providers or suppliers waiving or discounting
beneficiary cost-sharing obligations resulting from ground
ambulance services paid for by the Medicare program under a
waiver established pursuant to section 1135(b)(9) of the Social
Security Act. There, we concluded that such cost-sharing
waivers represent a sufficiently low risk of fraud and abuse if
certain conditions are met.
A new safe harbor that would protect OIG is not adopting this suggestion. We may consider this topic
value-based contracting and in future rulemaking.
outcomes-based contracting for the
purchase of pharmaceutical or
medical device items and related
services.
5 HHS OIG, OIG Policy Statement Regarding Physicians and Other Practitioners That Reduce or Waive Amounts Owed by Federal
Health Care Program Beneficiaries for Telehealth Services During the 2019 Novel Coronavirus (COVID-19) Outbreak (Mar. 17, 2020)
available at https://oig.hhs.gov/fraud/docs/alertsandbulletins/2020/policy-telehealth-2020.pdf.
104
Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—April 1, 2021, Through September 30, 2021
Proposal OIG Response
Modication of the space rental safe OIG is not adopting this suggestion. With respect to payments
harbor to remove the fair market made by a lessee to a lessor for the use of premises, we believe
value requirement. that the fair market value requirement helps to ensure that such
lease payments are for legitimate purposes and are not a
payment to induce referrals or otherwise reward Federal health
care program business generated between the parties.
Repeal or modification of the group OIG is not adopting commenters’ suggestion to repeal or
purchasing organization (“GPO”) safe modify the GPO safe harbor, but we may consider this topic in
harbor to facilitate greater public future rulemaking. OIG also highlights that there is a statutory
transparency and address potential exception addressing GPOs at section 1128B(b)(3)(C) of the
conflict of interests between GPOs, its Social Security Act.
members, and contracting vendors.
Repeal or modification of the As required by an order issued by the U.S. District Court for the
pharmacy benefit manager service District of Columbia, the effective date of the 2020 final rule
fees safe harbor and the point-of- referenced by commenters has since been delayed until January
sale reductions in price for 1, 2023. This rule is the subject of ongoing litigation and OIG
prescription pharmaceutical products cannot comment on it further.
safe harbor, as finalized in a 2020
rulemaking. 6
6 OIG, Fraud and Abuse; Removal of Safe Harbor Protection for Rebates Involving Prescription Pharmaceuticals and Creation of
New Safe Harbor Protection for Certain Point-of-Sale Reductions in Price on Prescription Pharmaceuticals and Certain Pharmacy
Benefit Manager Service Fees, 85 Fed. Reg. 76,666 (Nov. 30, 2020), available at https://www.govinfo.gov/content/pkg/FR-2020-11-
30/pdf/2020-25841.pdf.
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