Semiannual Report to Congress, October 1, 2020, through March 31, 2021 — HHS-OIG
Summary
Semiannual Report to Congress from the Department of Health and Human Services, Office of Inspector General, for October 1, 2020, through March 31, 2021, introduced by Principal Deputy Inspector General Christi A. Grimm. The message says OIG has 67 ongoing or completed reviews of COVID-19 related programs and is overseeing the $463 billion in COVID relief and recovery funding provided to or flowing through HHS. It reports that an OIG investigation led to the first criminal charge in the Nation related to misappropriating money received through the Provider Relief Fund. For the period OIG issued 75 audit reports and 20 evaluation reports, and investigative work led to $1.37 billion in expected investigative recoveries and 221 criminal actions; OIG excluded 1,036 individuals and entities from Federal health care programs.
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“Semiannual Report to Congress, October 1, 2020, through March 31, 2021 — HHS-OIG.”
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2020, through March 31, 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),
Office of Inspector General (OIG), for the 6-month period ending on
March 31, 2021.
As COVID-19 relief and recovery efforts continue, oversight is imperative
so that Americans can know whether these programs are working as
intended and where improvements should be made. OIG has 67 ongoing
or completed reviews of COVID-19 related programs. Completed work
during this period detailed how the pandemic challenged the country’s
health system. This work included a review of infection control and
complaint surveys at nursing homes during the early months of the
pandemic, a second “pulse survey” of hospitals’ challenges in responding
to COVID-19, and a survey of opioid treatment programs’ challenges and
actions taken to provide services during the pandemic. OIG partnered with the Pandemic Response
Accountability Committee and other Offices of Inspector General on a report examining COVID-19 testing
efforts across six Federal health care programs. The report offers insights that policymakers should
consider regarding availability, accessibility, and cost-effectiveness of COVID-19 testing.
OIG is aggressively investigating pandemic-related fraud that harms individuals and jeopardizes public
health efforts. We are using every tool in our arsenal to bring criminals to justice, recover ill-gotten gains,
and alert the public to emerging fraud schemes. OIG is partnering on this effort with law enforcement and
oversight agencies across Government, including through the recently announced COVID-19 Fraud
Enforcement Task Force. In addition, OIG is engaged in extensive oversight of the $463 billion in COVID
relief and recovery funding provided to or flowing through HHS. During this reporting period, OIG
initiated additional audits of billions of dollars of funding from the Provider Relief Fund, and an OIG
investigation led to the first criminal charge in the Nation related to misappropriating money received
through the Provider Relief Fund.
As the COVID-19 pandemic response and recovery evolves in the United States, OIG’s oversight will evolve
as well. Although there has been progress on many fronts, much remains to be done, studied, and
remedied going forward. It will be critical to understand the efficacy of pandemic response efforts over
time and the lessons learned for future pandemics and broader emergency preparedness. For example,
patient health and safety in nursing facilities will be an area of particular importance. Moreover, the
pandemic has more sharply focused health care providers and policymakers on broader changes to
delivery of health care, such as expanding use of telehealth and shifting to value-based care. Transparency
and program integrity will be core to ensuring that these changes produce the intended benefits for
patients, providers, and programs.
Beyond COVID-19, OIG conducted substantial oversight of HHS’s $2.2 trillion in spending in fiscal year
2020. During this reporting period, for example, investigative work led to 221 criminal actions and $1.37
billion in expected investigative recoveries. OIG audits identified $566 million in expected recoveries and
$920 million in potential savings for HHS programs. OIG reports addressed Medicare and Medicaid
Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2020, through March 31, 2021
program integrity and improper payments, grant funding, the Indian Health Service, cybersecurity, and
more. Our mission is both broad and deep, touching at the heart of some of the most pressing challenges
facing the Nation. One such challenge is the care of unaccompanied children crossing the U.S. southern
border. OIG has continued its work overseeing HHS’s Unaccompanied Children Program, including
reviews of the contracting for, and safety and security of, HHS facilities for unaccompanied children.
Another pressing challenge is health disparities. OIG oversees many HHS programs that are intended to
reach underserved populations and reduce health disparities. OIG will continue to apply an equity lens to
our work to identify opportunities for HHS programs to advance equity in areas such as access to care,
quality of care, and health outcomes.
Through the talents of 1,600 dedicated, mission-driven professionals, OIG provides objective, independent
oversight to protect HHS programs and the health and well-being of the people they serve. OIG pursues
excellence and innovation in oversight and enforcement, supporting our reviews and investigations with
modern data analytics techniques and cutting-edge technologies. We marshal our resources to foster
transparency, hold wrongdoers accountable, and deliver actionable recommendations and insights to
policymakers in HHS, Congress, and the public. To enhance our impact, OIG is assessing how to
modernize the transparency and usability of our data, including information provided to the public and
other stakeholders, to promote compliance with program requirements and reduce fraud, waste, and
abuse. Across our work, we strive to ensure that HHS programs operate as intended to deliver positive
outcomes for beneficiaries and taxpayers alike.
OIG appreciates the ongoing support of Congress and HHS for our important work.
Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2020, through March 31, 2021
Table of Contents
OIG’s Approach to Driving Positive Change 4
Highlights of OIG Accomplishments 5
OIG Participation in Congressional Hearings 13
Selected Acronyms and Abbreviations 14
Medicare and Medicaid Reports and Reviews 15
Legal and Investigative Activities Related to Medicare and Medicaid 41
Public Health and Human Service Agency Reports and Reviews 58
Legal and Investigative Activities Related to Public Health and Human Service Agencies 68
Other HHS-Related Reviews and Investigative Activities 69
Appendix A: Questioned Costs and Funds To Be Put to Better Use 74
Appendix B: Peer-Review Results 79
Appendix C: Summary of Sanction Authorities 82
Appendix D: Reporting Requirements in the Inspector General Act of 1978 85
Appendix E: Reporting Requirements in the Inspector General Empowerment Act of 2016 88
Appendix F: Anti-Kickback Statute—Safe Harbors 98
OIG’s Approach to Driving Positive Change
THE DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS), Office of Inspector General (OIG), provides
independent and objective oversight that promotes economy, efficiency, and effectiveness in HHS
programs and operations. OIG’s program integrity and oversight activities are shaped by legislative and
budgetary requirements and adhere to professional standards established by the
Government Accountability Office (GAO), Department of Justice (DOJ), and Inspector General community.
Through a nationwide network of audits, investigations, and evaluations, OIG carries out its mission to
protect the integrity of HHS programs and the health and welfare of the people served by those programs.
OIG’s work is conducted by three operating components—the Office of Audit Services (OAS), Office of
Evaluation and Inspections (OEI), and Office of Investigations (OI)—with assistance from the Office of
Counsel to the Inspector General (OCIG) and Mission Support and Infrastructure (MSI).
Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2020, through March 31, 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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Semiannual Report to Congress—October 1, 2020, through March 31, 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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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 October 1, 2020, through
March 31, 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—October 1, 2020, through March 31, 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 October 1, 2020, through March 31, 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 Highlights
Statistic Semiannual Reporting Period
(10/1/2020–3/31/2021)
Audit Reports Issued 75
Evaluations Issued 20
Expected Audit Recoveries $566.46 million
Potential Savings $919.97 million
New Audit and Evaluation 228
Recommendations
Recommendations Implemented by 181
HHS OpDivs
Expected Investigative Recoveries $1.37 billion
Criminal Actions 221
Civil Actions 272
Exclusions 1,036
Results for the Semiannual Reporting Period
During this semiannual reporting period (October 1, 2020, through March 31, 2021), we issued 75 audit
reports and 20 evaluation reports. Our audit work identified $566.46 million in expected recoveries (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 $919.97 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 228 new audit and evaluation
recommendations to encourage positive change in HHS programs. Meanwhile, HHS OpDivs implemented
181 prior recommendations to drive positive impact for HHS programs and beneficiaries.
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
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2020, through March 31, 2021
(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
$1.37 billion in expected investigative recoveries and 221 criminal actions during this reporting period. OIG
also took civil actions, such as assessing monetary penalties, against 272 individuals and entities, and
excluded 1,036 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 October 1,
2020, through March 31, 2021, organized by subject area. A comprehensive list of OIG work during the
reporting period follows, and Appendices A–F provide data to meet the reporting requirements in the
Inspector General Act of 1978.
Responding to the COVID-19 Pandemic
OIG is conducting and continues to plan innovative work 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 to: (1) protect people, (2) protect funds, (3) protect infrastructure, and (4) promote effectiveness
of HHS programs.
OIG is using risk assessment and data analytics to identify, monitor, and target potential fraud, waste, and
abuse affecting HHS programs and beneficiaries and to promote the effectiveness of HHS’s COVID-19
response and recovery programs. OIG is coordinating our COVID-19 work with key oversight and law
enforcement partners, including the Pandemic Response Accountability Committee; Federal, State, local,
and Tribal entities; and GAO, among others, to ensure adequate oversight, avoid duplication, and share
insights. OIG created a COVID-19 web page that alerts the public about emerging fraud schemes related
to COVID-19. Additional information about the OIG COVID-19 strategic plan and work related to COVID-
19 is available on our website, COVID-19 Portal.
Significant OIG work during this semiannual reporting period related to COVID-19 includes the following:
OIG analyzed onsite surveys of nursing homes during the COVID-19 pandemic and identified opportunities
for improvement. Nursing home residents are particularly vulnerable to infectious diseases such as
COVID-19, and infection control has been a persistent problem for most nursing homes. In a review of
infection control and complaint surveys conducted during March 23–May 30, 2020, OIG found that some
efforts instituted by CMS have resulted in less comprehensive oversight of nursing homes and residents.
OIG recommended that CMS assess the results of the infection control survey and revise the survey as
appropriate. (See report OEI-01-20-00430.)
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2020, through March 31, 2021
OIG conducted a nationwide “pulse survey” of hospitals responding to the COVID-19 pandemic. Hospitals
reported that COVID-19 has significantly strained health care delivery. In February 2021, hospitals reported
that operating in “survival mode” for an extended period of time has created new and different problems
than experienced earlier in the pandemic and exacerbated longstanding challenges in health care delivery,
access, and health outcomes. (See report OEI-09-21-00140.)
OIG engaged with nursing homes and emergency medical services (EMS) providers throughout the
country to help providers report allegations of unsafe practices. OIG identified nursing homes as having a
significant number of COVID-19-related deaths and provided these nursing homes and EMS providers in
close proximity to these facilities with information on how to report allegations of unsafe practices
resulting in COVID-19 exposure, overall quality of care concerns, patient abuse and neglect, and fraud and
misconduct. OIG also maintains a web page to provide additional elder care and safety awareness
resources and support information for seniors, their families, and caregivers. (See Operation Care Web
Page.)
OIG co-led the first report by the Pandemic Response Accountability Committee (PRAC) Health
Subcommittee focused on COVID-19 testing data across six Federal programs. We partnered with six
Federal OIGs to analyze COVID testing in selected programs in each of our Departments. In HHS, OIG
found that Medicare Part B paid for nearly 8 million COVID-19 tests from February through August 2020,
with 13 percent of beneficiaries receiving at least one test. The proportion of Part B beneficiaries tested
largely matched the distributions across overall Medicare Part B enrollment when compared by age,
gender, and race/ethnicity. Medicare Part B paid more than $551 million for COVID-19 tests during that
time, with an average of $69 per test. (See report Federal COVID-19 Testing Report: Data Insights from Six
Federal Health Care Programs.)
OIG alerted the public about fraud schemes related to COVID-19. Scammers are using telemarketing calls,
text messages, social media platforms, and door-to-door visits to perpetrate COVID-19-related scams.
Fraudsters are offering COVID-19 tests, COVID-19 vaccine appointments, HHS grants, and Medicare
prescription cards in exchange for personal details, including Medicare information. However, these
services are unapproved and illegitimate. The personal information collected can be used to fraudulently
bill Federal health care programs and commit medical identity theft. (See Fraud Alert.)
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 and the Child Abuse Prevention and Treatment Act (CAPTA).
The Office of Refugee Resettlement (ORR) did not award and manage the Homestead influx care facility
contracts in accordance with Federal statutes, regulations, and HHS policies and procedures. ORR did not
award a $341 million sole source contract to Comprehensive Health Service, LLC, in accordance with
Federal regulations and did not effectively manage its HHS contracts for services provided at Homestead
in accordance with Federal statutes, regulations, and HHS policies and procedures. (See report A-12-20-
20001.)
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2020, through March 31, 2021
OIG found that ACF does little to oversee States’ compliance with CAPTA’s requirement for court
representation, relying instead on States’ self-certification. OIG has found that ACF is neither supporting
States in implementing the CAPTA’s requirement for court representatives for child victims of abuse and
neglect, nor is ACF monitoring States’ compliance with the requirement. As a result, ACF cannot ensure
that all such victims have court representation to protect their best interests. (See report OEI-09-18-
00430.)
Preventing and Treating Opioid Misuse
OIG continues to prioritize oversight activities to protect beneficiaries from prescription drug abuse and to
provide insight into the challenges the COVID-19 pandemic is having on opioid users.
OIG found that the COVID-19 pandemic may be putting Medicaid beneficiaries at greater risk of opioid
misuse or overdose in 2020 and beyond. OIG found that across 6 Appalachian States in 2018, nearly 6,000
Medicaid beneficiaries received potentially harmful amounts of opioids; more than 450 of these
beneficiaries were at serious risk of opioid misuse or overdose; and 19 prescribers stood out in their
prescribing of opioids to beneficiaries at serious risk. (See report OEI-05-19-00410.)
OIG found that during the first 8 months of 2020—and the onset of the COVID-19 pandemic—at least
5,000 Medicare Part D beneficiaries per month suffered opioid overdoses and almost a quarter of a million
received high amounts of opioids. At the same time, the number of beneficiaries receiving drugs for
medication-assisted treatment (MAT) increased slightly and the number receiving naloxone declined
through April 2020 but increased in the following months. (See report OEI-02-20-00400.)
OIG found that few patients received high amounts of opioids from Indian Health Service (IHS)-run
pharmacies, and IHS reported positive outcomes from opioid-related initiatives. However, IHS has
opportunities to improve the efficiency of its opioid monitoring systems and IHS staff reported challenges
in using State-run prescription drug monitoring programs (PDMPs) and in tracking care outside of IHS.
(See report OEI-05-18-00470.)
OIG surveyed opioid treatment programs (OTPs) to quantify the impact that the COVID-19 pandemic has
had on OTPs. OIG found that OTPs reported a variety of challenges they have encountered during the
COVID-19 pandemic and actions they have taken to address those challenges while ensuring the continuity
of needed services and protecting the health and safety of their patients and staff. The information
provides Substance Abuse and Mental Health Services Administration and other decisionmakers with a
national snapshot of OTPs’ challenges and the actions they have taken to continue providing services
during the pandemic. (See report A-09-20-01001.)
Ensuring Medicare Program Integrity
A key component of OIG’s mission is to promote integrity and efficiency in Medicare through a nationwide
program of audits, evaluations, inspections, investigations, and enforcement actions.
OIG found that hospitals did not comply with Medicare requirements for reporting cardiac device credits,
resulting in potential Medicare overpayments. OIG found that hospitals likely did not comply with
Medicare requirements associated with reporting manufacturer credits for recalled or prematurely failed
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cardiac medical devices. As a result, 911 hospitals received payments of $76 million rather than the $43
million they should have received, resulting in $33 million in potential overpayments. It was determined
that Medicare contractors made these overpayments because they do not have a post payment review
process to ensure that hospitals reported manufacturer credits for cardiac medical devices. (See report A-
01-18-00502.)
OIG found that CMS and its contractors did not use Comprehensive Error Rate Testing (CERT) data to
identify and focus on error-prone providers for review and corrective action. Using CERT data, OIG
identified 100 error-prone providers from 2014 through 2017. Of the $5.8 million reviewed by CERT for
these providers, $3.5 million was incorrect, which is an improper payment rate of 60.7 percent. We
determined that during the same period, Medicare made $19.1 billion in fee-for-service (FFS) payments to
these 100 error-prone providers. (See report A-05-17-00023.)
OIG found that inpatient hospital billing in the years leading up to the COVID-19 pandemic indicates that
some stays billed at the highest severity level in the diagnosis-related group (DRG) could be susceptible to
inappropriate billing. OIG found that the number of inpatient stays billed at the highest severity level in
the DRG increased by almost 20 percent from FY 2014 through FY 2019, ultimately accounting for nearly
half of all Medicare spending on inpatient hospital stays. (See report OEI-02-18-00380.)
OIG found that Medicare made payments that were not in accordance with Federal requirements to
physicians for selected facet-joint injection sessions, and Noridian Healthcare Solutions made improper
Medicare payments of $4 million to physicians in Jurisdiction E for spinal facet-joint injections. The
Medicare administrative contractors (MACs) in 11 jurisdictions with a coverage limitation made improper
payments of $748,555 for selected facet-joint injection sessions. OIG also estimated that Noridian
improperly paid physicians $4.2 million for spinal facet-joint injections in Jurisdiction E, which covers
California, Hawaii, Nevada, and the U.S. territories of American Samoa, Guam, and Northern Mariana
Islands. (See reports A-09-20-03003 and A-09-20-03010.)
OIG found that most of the selected diagnosis codes that Blue Cross Blue Shield of Michigan (BCBSM)
submitted to CMS for use in its risk adjustment program did not comply with Federal requirements. OIG
found that the diagnosis codes that BCBSM submitted to CMS were not supported in the medical records
and resulted in net overpayments of $668,264. On the basis of our sample results, we estimated that
BCBSM received at least $14.5 million of net overpayments for these high-risk diagnosis codes in 2015 and
2016. (See report A-02-18-01028.)
Protecting Beneficiaries
A top priority for OIG is protecting the health and well-being of HHS beneficiaries, including residents in
nursing homes and beneficiaries receiving hospice care.
OIG found that CMS can better leverage staffing data to provide consumers with required information and
to help State survey agencies protect nursing home residents. CMS has taken important steps to build a
new source for data on nursing home staffing on the Care Compare website and to use these data to
better inform consumers and improve nursing home oversight. However, OIG found that the staffing
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information that CMS provides on Care Compare could be more useful to consumers if it included data on
nurse staff turnover and tenure, as required by Federal law. (See report OEI-04-18-00451.)
The chief executive officer (CEO) of a Texas-based group of hospice and home health entities was
sentenced to 15 years in prison for falsely enrolling patients in hospice programs. On February 3, 2021,
Henry McInnis was sentenced to 15 years in prison for falsely telling thousands of patients with long-term
incurable diseases they had less than 6 months to live, to enroll the patients in hospice programs for which
they were otherwise unqualified, thereby increasing revenue to the company. OIG partnered with
investigators from the Texas Medicaid Fraud Control Unit and the Federal Bureau of Investigation (FBI) to
investigate the case. Between 2009 and 2018, over $150 million in false and fraudulent claims for hospice
and other health care services were submitted by McInnis and his co-conspirators.
Fighting Fraud To Protect the Medicare and Medicaid Programs
OIG remains at the forefront of the Nation’s efforts to fight fraud in HHS programs and hold wrongdoers
accountable for their actions.
An individual was sentenced to 70 months in prison and ordered to pay restitution for health care fraud
and conspiring to unlawfully distribute controlled substances. Dr. Eugene Gosy was sentenced to 70
months in prison plus 3 years of supervised release and ordered to pay $344,562 in restitution to his
victims, including Medicare. OIG partnered on this investigation with investigators from the FBI and the
Drug Enforcement Administration (DEA). Dr. Gosy and his employees issued more prescriptions for
controlled substances annually than any other prescriber or prescribing entity in New York State, including
hospitals.
Ensuring Medicaid Program Integrity
Medicaid is the largest Federal health care program, with over 70 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. For FY 2019, CMS estimated Federal and State Medicaid expenditures of $614 billion.
OIG found that most States did not provide complete or accurate payment data in the Transformed
Medicaid Statistical Information System (T-MSIS) on managed care payments to providers. In addition,
two States failed to provide any data for January 2020. Effective oversight of Medicaid requires a national
system with complete and accurate data. CMS established the T-MSIS for this purpose. Payment data are
a critical component of T-MSIS. These data include the amounts paid, billed, and allowed for every service
provided to Medicaid enrollees, including those services provided through managed care. (See report
OEI-02-19-00180.)
OIG conducted high-level risk assessment of Puerto Rico’s Medicaid program and identified key programs
areas at high risk for improper Medicaid program payments. Specifically, we identified program integrity,
beneficiary eligibility, provider enrollment, overpayment reporting, and contracting as key areas at high
risk for improper Medicaid program payments. We used the results of this assessment to set priorities for
future audits in Puerto Rico’s program. (See report A-02-20-01011.)
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OIG found that New York claimed Federal reimbursement for personal care services that did not comply
with certain Federal and State requirements. Specifically, New York received reimbursement for personal
care services for which there was no valid nursing or social assessment, no independent medical review, no
valid physician’s order or the order was not timely, no documentation of services provided, and no plan of
care. Moreover, the health and safety of some Medicaid beneficiaries may have been put at risk because
their personal care aides had not undergone a criminal history check or did not meet training
requirements. (See report A-02-19-01016.)
Ensuring the Financial Integrity of HHS Programs
To protect financial integrity, OIG continues to examine how HHS may improve controls to prevent and
detect improper and unauthorized payments, strengthen oversight of external funding recipients’ use of
Federal funds, and implement a robust program integrity strategy to protect current and future HHS
programs.
OIG found that CMS authorized hundreds of millions of dollars in advanced premium tax credits (APTCs)
on behalf of enrollees who did not make their required premium payments. We estimated that
$950 million of $42.5 billion in authorized APTCs during 2018 were unallowable because they were made
on behalf of enrollees who did not make their required premium payments. (See report A-02-19-02005.)
OIG found that although CDC implemented corrective actions to improve oversight of the President’s
Emergency Plan for AIDS Relief (PEPFAR) recipients, some internal control weaknesses remained. OIG
identified six trends in which recipients: (1) had either inadequate or no policies and procedures related to
management of PEPFAR funds, (2) did not comply or may not have complied with HHS regulations
regarding value added tax, (3) had transactions that were either not supported or unallowable, (4) did not
accurately report PEPFAR expenditures on the financial reports or did not file reports on time, (5) did not
have annual audits performed or submitted on time, and (6) could not reconcile PEPFAR expenditures to
amounts reported on their financial reports. (See report A-04-18-01010.)
OIG found that in selected states, 67 of 100 health centers did not use their Health Resources and Services
Administration (HRSA) Access Increases in Mental Health and Substance Abuse Services (AIMS) grant
funding in accordance with Federal requirements. OIG found that HRSA did not effectively monitor health
centers’ progress toward meeting service expansion requirements and did not ensure that health centers
spent their AIMS grant funds in accordance with grant requirements. (See report A-02-19-02001.)
Promoting High Quality and Safe Care in IHS
IHS is the principal Federal health care provider for American Indians and Alaska Natives. HHS must
ensure adequate access to quality care and safety for IHS beneficiaries.
OIG found that an estimated 13 percent of patients in IHS hospitals experienced patient harm events, with
higher rates of harm in smaller hospitals. Harm events were more prevalent among older adults and labor
and delivery patients, and about half of events were preventable (i.e., they could have been avoided if
patients had been given better care). (See report OEI-06-17-00530.)
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Department of Health and Human Services, Office of Inspector General
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OIG found instances of IHS labor and delivery care not following national clinical guidelines or best
practices. Through medical review of 48 IHS labor and delivery patients, OIG found that 27 of the patients
in our sample received care at IHS hospitals that did not follow national clinical guidelines or best
practices. Of these 27 patients, 6 patients received care that did not follow one or more national clinical
guidelines and did not use the best practice of quantitative estimation of blood loss associated with a
postpartum hemorrhage. Of the remaining 21 patients, 13 received care that did not meet one or more
national clinical guidelines and 8 received care that did not use the best practice of quantitative estimation
of blood loss. (See report OEI-06-19-00190.)
OIG found that IHS facilities made progress incorporating patient protection policies, but challenges
remain. In recent years, IHS had cases of health care providers abusing patients under facility care,
including a pediatrician who was convicted of multiple counts of child sexual abuse. Although OIG found
that IHS facilities made strides to incorporate the agency’s updated policies to prevent and address child
sexual abuse by health care providers, OIG recommended that IHS should work to resolve the challenges
that its facilities report in carrying out the policies and their concerns that staff and patients may not feel
safe reporting abuse. (See report OEI-06-19-00331.)
Ensure Implementation of Geospatial-Related Requirements Across HHS
The Geospatial Data Act of 2018 (GDA) mandates that OIG conduct an audit of HHS’s collection,
production, acquisition, maintenance, distribution, use, and preservation of geospatial data.
OIG found that HHS made some progress to comply with GDA, but we identified certain covered agency
responsibilities that HHS had yet to meet. OIG also found that HHS had not maintained a departmentwide
inventory of all geospatial data assets, as required by GDA and had not designated a senior agency official
in accordance with OMB guidance to Federal agencies. (See report A-18-20-11500.)
Combating Cybersecurity Threats Within HHS
OIG continues to make strides at protecting the cybersecurity of HHS agencies and programs.
OIG identified cybersecurity vulnerabilities and possible compromise of HHS’s systems and networks.
Because of the current public health emergency and increased cyberactivity, we only posted the title of our
cybersecurity audits. (See reports A-18-19-06002, A-18-20-06001, and A-18-20-08012.)
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Department of Health and Human Services, Office of Inspector General
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OIG Participation in Congressional Hearings
OIG did not participate in any congerssional hearings during the semiannnual reporting period.
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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
Semiannual Report to Congress—October 1, 2020, through March 31, 2021
Medicare and Medicaid Reports and Reviews
Medicare Program Reports and Reviews
Financial Management and Improper Payments
Cedars-Sinai Medical Center: Audit of Medicare Payments for Bariatric Surgeries
(A-09-18-03010), October 2020
Cedars-Sinai Medical Center (Cedars-Sinai) did not fully comply with Medicare requirements and
the Medicare contractor’s local coverage determinations (LCDs) and local coverage article (LCA)
when billing for bariatric surgeries. For 37 of the 62 claims we reviewed, Cedars-Sinai complied
with Medicare requirements and the specifications in Noridian’s LCDs and LCA for documenting
previously unsuccessful medical treatment for obesity. However, Cedars-Sinai did not comply with
the specifications in the LCDs for 12 claims, with payments totaling $154,074, and did not comply
with the specifications in the LCA for 13 claims, with payments totaling $175,199.
Cedars-Sinai partially agreed with our recommendations that it: (1) refund to Medicare the portion
of the $154,074 in overpayments for bariatric surgery claims that did not comply with the
specifications in the LCDs and that are within the 4-year reopening period; (2) exercise reasonable
diligence to identify, report, and return any overpayments in accordance with the 60-day rule; (3)
work with Noridian to take action deemed necessary regarding $175,199 in payments for bariatric
surgery claims with dates of service on or after the effective date of the LCA; (4) update its patient
checklist to include all of Noridian’s specifications for billing bariatric surgeries; and (5) obtain
supporting medical record documentation from other providers before performing any future
bariatric surgeries.
Medicare Improperly Paid Physicians for More Than Five Spinal Facet-Joint Injection Sessions During
a Rolling 12-Month Period (A-09-20-03003), October 2020, and
Noridian Healthcare Solutions, LLC, Made Improper Medicare Payments of $4 Million to Physicians in
Jurisdiction E for Spinal Facet-Joint Injections (A-09-20-03010), February 2021
Medicare did not pay physicians for selected facet-joint injection sessions in accordance with
Federal requirements, and Noridian Healthcare Solutions, LLC (Noridian), did not pay physicians in
Jurisdiction E for spinal facet-joint injections in accordance with Medicare requirements.
Specifically, the MACs in the 11 jurisdictions with a coverage limitation made improper payments of
$748,555. If the remaining MAC jurisdiction had kept the coverage limitation in place during our
audit period, Medicare could have saved $513,328.
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Department of Health and Human Services, Office of Inspector General
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CMS concurred with our recommendations that, for the 11 MAC jurisdictions with a coverage
limitation for the number of facet-joint injection sessions during a rolling 12-month period, it: (1)
direct the MACs that oversee the 11 jurisdictions to recover $748,555 in improper payments made
to physicians; (2) instruct the MACs to notify physicians so that they can exercise reasonable
diligence to identify, report, and return any overpayments in accordance with the 60-day rule and
identify any returned overpayments as having been made; (3) develop oversight mechanisms for
the MACs to implement to prevent or detect payments to physicians for more than 5 facet-joint
injection sessions received by beneficiaries during a rolling 12-month period; and (4) direct the
MACs that oversee the 11 jurisdictions to review claims for facet-joint injections after our audit
period to identify instances in which Medicare inappropriately paid physicians and recover any
improper payments identified. CMS concurred with our recommendation that, for the remaining
MAC jurisdiction, which did not have a coverage limitation, it consider working with the MAC to
determine whether it should re-implement this coverage limitation, which could have saved
$513,328 during our audit period.
Of Noridian’s sampled 100 beneficiary days, 49 complied with the requirements; however, the
remaining 51 beneficiary days did not comply with 1 or more of the requirements. As a result,
Noridian improperly paid physicians $12,546. On the basis of our sample results, we estimated that
Noridian improperly paid physicians $4.2 million for facet-joint injections for our audit period.
Noridian concurred with our recommendations that it: (1) recover $12,546 in improper payments
made to physicians; (2) based on the results of this audit, notify appropriate physicians (i.e., those
for whom Noridian determines this audit constitutes credible information of potential
overpayments) so that the physicians 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) provide
annual training to physicians and their billing staff in Jurisdiction E specific to Medicare
requirements for billing of facet-joint injections, which could have saved an estimated $4.2 million
for our audit period.
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 (A-07-19-00560), November 2020
CMS did not ensure that Outpatient Prospective Payment System (OPPS) payments for claims that
included medical device credits were reduced in accordance with Federal regulations. These
regulations require the use of the device offset amount—100 percent of the device offset amount
for each without cost or full credit replacement device and 50 percent of the device offset amount
for each partial credit replacement device—when calculating the reduced OPPS payment amount.
By following the Medicare Claims Processing Manual (the Manual) instructions, MACs did not
comply with these regulations when calculating the claims that we reviewed. As a result, Medicare
made estimated overpayments of as much as $35.4 million to hospitals for our audit period. This
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Department of Health and Human Services, Office of Inspector General
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error occurred because as part of Federal rulemaking in calendar year (CY) 2014, CMS announced
its intention to update Federal regulations to reduce OPPS payments for replaced medical devices.
This intended update was not finalized in the text of the Federal regulations. However, CMS
revised the relevant language in its guidance—the Manual.
CMS did not concur with our recommendations that it: (1) work with the MACs to recover from
hospitals Medicare OPPS overpayments, which total as much as an estimated $35.4 million; (2)
work with the MACs to recover Medicare OPPS overpayments from hospitals for any additional
claims that included medical device credits and that were outside of our audit period; and (3) revise
the OPPS regulations or the Manual instructions to resolve the conflict between these
requirements for OPPS claims with medical device credits.
Despite Savings on Many Lab Tests in 2019, Total Medicare Spending Increased Slightly Because of
Increased Utilization in Certain High-Priced Tests (OEI-09-20-00450), December 2020
In the second year of the new Medicare Part B clinical laboratory payment system that is required
by the Protecting Access to Medicare Act of 2014, reduced payment rates on many lab tests
resulted in savings for Medicare. However, total Medicare Part B spending on lab tests increased
slightly because of increased utilization and spending on certain high-priced tests, such as genetic
tests. Our data brief contains no recommendations.
The Centers for Medicare & Medicaid Services Could Improve Its Wage Index Adjustment for
Hospitals in Areas With the Lowest Wages (A-01-20-00502), December 2020
When postpandemic conditions allow for new initiatives, CMS could consider focusing the bottom
quartile wage index adjustment more precisely toward the hospitals that are the least able to raise
wages without that adjustment. Those hospitals are the ones with low or negative profit margins
rather than higher, positive profit margins. CMS could also consider studying the question of why
some hospitals in a particular area were able to pay higher wages than other hospitals in the same
area prior to the implementation of the bottom quartile wage index adjustment. More information
might enable CMS to focus the adjustment even more precisely.
Trend Toward More Expensive Inpatient Hospital Stays in Medicare Emerged Before COVID-19 and
Warrants Further Scrutiny (OEI-02-18-00380), January 2021
Hospitals play an essential role in our health care system; nearly one-fifth of all Medicare payments
are for inpatient hospitalizations. Inpatient hospital billing in the years leading up to the pandemic
indicates that some stays at the highest severity level could be susceptible to inappropriate billing.
Our findings can help CMS gain a better understanding of how hospitals bill Medicare and improve
its oversight of hospital billing. Our recommendation was for it to conduct targeted reviews of
Medicare Severity Diagnosis Related Groups (MS-DRGs) and stays that are vulnerable to upcoding,
as well as the hospitals that frequently bill them. CMS did not concur.
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Department of Health and Human Services, Office of Inspector General
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Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Blue Cross Blue Shield of
Michigan (Contract H9572) Submitted to CMS (A-02-18-01028), February 2021
Most of the selected diagnosis codes that BCBSM submitted to CMS for use in CMS’s risk
adjustment program did not comply with Federal requirements.
For 188 of the 248 enrollee-years, the diagnosis codes that BCBSM submitted to CMS were not
supported in the medical records and resulted in net overpayments of $668,264.
These errors occurred because the policies and procedures that BCBSM 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 BCBSM received at least
$14.5 million of net overpayments for these high-risk diagnosis codes in 2015 and 2016.
BCBSM concurred with our recommendations that it: (1) refund to the Federal Government the
$14.5 million of net overpayments; (2) 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 (3) examine its existing compliance
procedures to identify areas where improvements can be made to ensure that diagnosis codes at
high risk for being miscoded comply with Federal requirements, and take the necessary steps to
enhance those procedures.
CMS Authorized Hundreds of Millions of Dollars in Advanced Premium Tax Credits on Behalf of
Enrollees Who Did Not Make Their Required Premium Payments (A-02-19-02005), March 2021
For 13 of the 155 sampled policies, APTCs totaling $43,455 authorized by CMS were unallowable
because they were made on behalf of enrollees who did not make their required premium
payments. Specifically, for seven sampled policies enrollees were improperly confirmed (i.e.,
treated as if they had made their first premium payments) or provided coverage by their qualified
health plan (QHP) issuers when their policies should have been terminated for nonpayment of
premiums. In addition, for nine sampled policies, CMS reported inaccurate enrollment data to the
Internal Revenue Service (IRS), thereby preventing the IRS from recouping APTCs paid on behalf of
enrollees who did not make their required premium payments. Three sampled policies contained
both deficiencies.
On the basis of our sample results, we estimated that $950 million of $42.5 billion in authorized
APTCs during 2018 for 659,143 of 5.3 million policies were unallowable because they were made on
behalf of enrollees who did not make their required premium payments.
CMS did not concur with our recommendation that it work with the Department of the Treasury
and QHP issuers to recover or take other remedial action for: (1) the $43,455 in improper APTCs
identified in our sample; and (2) the remaining improper APTCs, which we estimate to be
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2020, through March 31, 2021
$950 million, for policies for which the payments were not allowable. CMS concurred with our
recommendation that it develop a process to collect additional information from QHP issuers.
Peninsula Regional Medical Center: Audit of Medicare Payments for Polysomnography Services
(A-04-19-07087), March 2021, and
North Mississippi Medical Center: Audit of Medicare Payments for Polysomnography Services
(A-04-19-07086), March 2021
Peninsula Regional Medical Center (Peninsula) submitted Medicare claims for some
polysomnography services that did not comply with Medicare billing requirements. On the basis of
our sample results, we estimated that Peninsula received overpayments of at least $66,647 for
polysomnography services provided during the audit period. The errors occurred because
Peninsula'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.
North Mississippi Medical Center (North Mississippi) submitted Medicare claims for some
polysomnography services that did not comply with Medicare billing requirements. On the basis of
our sample results, we estimated that North Mississippi received overpayments of at least $67,038
for polysomnography services provided during the audit period. North Mississippi stated that the
errors occurred because of a misunderstanding of the Medicare policy. Although North Mississippi
had some policies and procedures in place, they did not adequately explain how to process
Medicare claims for polysomnography services and ensure that services billed to Medicare were
coded correctly or that technicians attending a polysomnography service had the required
credentials.
Peninsula concurred with our findings and recommendations that it: (1) refund to the Medicare
program the estimated $66,647 overpayment for claims that it incorrectly billed; (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.
North Mississippi concurred with our recommendations that it: (1) refund to the Medicare program
the estimated $67,038 overpayment for claims that it incorrectly billed; (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; (3) educate its staff on properly billing for polysomnography
services; and (4) revise policies and procedures to ensure that claims are coded correctly and that
sleep technicians have the required credentials before billing claims for polysomnography services
to ensure full compliance with Medicare requirements.
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2020, through March 31, 2021
An Ophthalmology Clinic in California: Audit of Medicare Payments for Eye Injections of Eylea and
Lucentis (A-09-19-03022), March 2021
An ophthalmology clinic in California (the Clinic) generally complied with Medicare requirements
when billing for intravitreal injections of Eylea and Lucentis, which accounted for 88 percent of the
total payments 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). For 301 services and drugs, the Clinic did not comply with
the requirements: 195 services were not separately payable, and 106 services and drugs were not
reasonable and necessary.
Because the Clinic's medical director was unfamiliar with Medicare's billing requirements, the Clinic
did not have policies and procedures to ensure that services and drugs billed to Medicare were
correctly billed or reasonable and necessary. On the basis of our sample results, we estimated that
at least $398,625 of the $4.3 million paid to the Clinic was unallowable for Medicare
reimbursement.
The Clinic concurred in part with our recommendation that it refund to the Medicare contractor
$398,625 in estimated overpayments for intravitreal injections of Eylea and for other services
provided on the same day as intravitreal injections of Eylea and Lucentis. The Clinic concurred with
our recommendation that, based on the results of this audit, it exercise reasonable diligence to
identify, report, and return any overpayments in accordance with the 60-day rule. We also made
two procedural recommendations to ensure that the Clinic complies with Medicare requirements.
Quality of Care, Safety, and Access
Update on Oversight of Opioid Prescribing and Monitoring of Opioid Use: States Have Taken Action
To Address the Opioid Epidemic (A-09-20-01000), October 2020
We identified actions that selected States took related to their oversight of opioid prescribing and
their monitoring of opioid use. In July 2019, we issued a report summarizing and comparing
information provided by eight selected States: Nebraska, Nevada, New Hampshire, Tennessee,
Texas, Utah, Washington, and West Virginia. For this update to our original audit, we selected an
additional three States in the Appalachian region, an area with high rates of opioid overdose
deaths: Alabama, Kentucky, and Ohio. This report summarizes and compares information provided
by all 11 States as of various dates between October 2018 and May 2020.
The selected States have created policies and procedures and passed laws and regulations related
to opioids. The States are using opioid-related data to perform both data analytics and outreach
to providers and patients. The States have implemented a number of opioid-related prevention,
detection, and treatment programs. Finally, the States have taken many other actions to address
the opioid epidemic. This report contains no recommendations.
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2020, through March 31, 2021
Onsite Surveys of Nursing Homes During the COVID-19 National Emergency: March 23–May 30,
2020, (OEI-01-20-00430), December 2020
In response to the COVID-19 pandemic, CMS adjusted its oversight approach to suspend standard
surveys, prioritize the most serious complaints, elevate attention on infection control, and develop
a new survey tool to ensure that nursing homes implement actions to prevent the spread of
COVID-19. However, these changes have resulted in less comprehensive oversight of nursing
homes and residents. Our findings can help CMS enhance its approach to nursing home oversight.
CMS did not explicitly concur with our first and third recommendations but stated that it has
already taken steps to implement those recommendations. CMS did not concur with our second
recommendation. We recommended that CMS:
• assess the results of infection control surveys and revise the survey as appropriate,
• work with States to help overcome challenges with PPE and staffing, and
• clarify expectations for States to complete backlogs of standard surveys and high-priority
complaint surveys.
Federal COVID-19 Testing Report: Data Insights From Six Federal Health Care Programs (Federal
COVID-19 Testing Report: Data Insights From Six Federal Health Care Programs ), January 2021
COVID-19 testing trends in six Federal health care programs largely followed the same pattern as
national testing from February 2020 through August 2020, the first 7 months of the pandemic.
This report, conducted in partnership with the Council of the Inspectors General on Integrity and
Efficiency’s (CIGIE’s) Pandemic Response Accountability Committee, provides policymakers with key
insights on COVID-19 testing as the Federal Government continues to respond to the pandemic.
These insights—presented at an aggregated level and individual program level—inform
policymakers on the following: number of COVID-19 tests administered; populations that received
COVID-19 tests, types of COVID-19 tests administered; costs of testing, places where COVID-19
tests were administered, and amount of time it took to return test results.
Program Integrity
Medicare Critical Care Services Provider Compliance Audit: Clinical Practices of the University of
Pennsylvania (A-03-18-00003), October 2020
Clinical Practices of the University of Pennsylvania (Clinical Practices) complied with Medicare billing
requirements for 136 of the 150 critical care services that we reviewed. However, Clinical Practices
did not comply with Medicare billing requirements for the remaining 14 critical care services, and
these errors resulted in Clinical Practices receiving $1,399 in unallowable Medicare payments.
These errors occurred because Clinical Practices incorrectly identified and billed critical care
services for physician services that did not meet Medicare requirements.
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2020, through March 31, 2021
On the basis of our sample results, we estimated that Clinical Practices received overpayments of at
least $151,588 for the audit period.
Clinical Practices did not indicate concurrence or nonconcurrence with our recommendations that
it: (1) refund to the MAC a total of $151,588 in estimated overpayments for critical care services; (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 identify any of those returned overpayments
as having been made in accordance with this recommendation; and (3) strengthen policies and
procedures to ensure that critical care services billed to Medicare are adequately documented and
correctly billed.
Medicare Home Health Agency Provider Compliance Audit: Gem City Home Care, LLC
(A-05-18-00011), October 2020;
Medicare Home Health Agency Provider Compliance Audit: Visiting Nurse Association of Central
Jersey Home Care and Hospice, Inc. (A-02-17-01025), October 2020;
Medicare Home Health Agency Provider Compliance Audit: The Palace at Home
(A-04-17-07067), November 2020;
Medicare Home Health Agency Provider Compliance Audit: Total Patient Care Home Health, LLC
(A-06-16-05005), December 2020;
Medicare Home Health Agency Provider Compliance Audit: Tender Touch Health Care Services
(A-04-18-07077), December 2020;
Medicare Home Health Agency Provider Compliance Audit: Southeastern Home Health
Services (A-03-17-00004), January 2021; and
Medicare Home Health Agency Provider Compliance Audit: Brookdale Home Health, LLC
(A-04-18-06221), February 2021
Gem City Home Care, LLC (Gem City), did not comply with Medicare billing requirements for 25 of
the 100 home health claims that we reviewed. On the basis of our sample results, we estimated
that Gem City received overpayments of at least $2.67 million during this period.
Visiting Nurse Association of Central Jersey Home Care and Hospice, Inc. (VNA of Central Jersey),
did not comply with Medicare billing requirements for 14 of the 100 home health claims that we
reviewed. On the basis of our sample results, we estimated that VNA of Central Jersey received
overpayments of at least $2 million for the audit period.
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2020, through March 31, 2021
The Palace at Home (The Palace) did not comply with Medicare billing requirements for 20 of the
100 home health claims that we audited. On the basis of our sample results, we estimated that The
Palace received overpayments of at least $731,304 for our audit period. All of the incorrectly billed
claims are outside of the 4-year reopening period.
Total Patient Care Home Health, LLC (TPC), did not comply with Medicare billing requirements for
32 of the 100 home health claims that we reviewed. On the basis of our sample results, we
estimated that TPC received overpayments of at least $1.7 million for our audit period. As of the
publication of this report, all 100 claims within our sample are outside of the Medicare 4-year
claim-reopening period.
Tender Touch Health Care Services (Tender Touch) did not comply with Medicare billing
requirements for 21 of the 100 home health claims that we reviewed. On the basis of our sample
results, we estimated that Tender Touch received overpayments of at least $478,780 for the audit
period.
Southeastern Home Health Services (Southeastern) did not comply with Medicare billing
requirements for 18 of the 100 home health claims that we reviewed. On the basis of our sample
results, we estimated that Southeastern received overpayments of at least $1.8 million for our audit
period. All 100 claims within our sample are outside of the Medicare 4-year claim-reopening
period.
Brookdale Home Health, LLC (Brookdale), did not comply with Medicare billing requirements for 46
of the 100 home health claims that we reviewed. On the basis of our sample results, we estimated
that Brookdale received overpayments of approximately $3.3 million for the audit period.
Gem City did not concur with our recommendations that it: (1) refund to the Medicare program the
portion of the estimated $2.67 million in overpayments for incorrectly billed claims that are within
the 4-year reopening period; (2) for the remaining portion of the estimated $2.67 million
overpayment for claims that are outside of the reopening period, exercise reasonable diligence to
identify and return overpayments in accordance with the 60-day rule, and identify any returned
overpayments as having been made in accordance with this recommendation; (3) exercise
reasonable diligence to identify and return any additional similar overpayments outside of our
audit period; and (4) strengthen its procedures to ensure that the homebound statuses of
Medicare beneficiaries are verified and continually monitored, that the specific factors qualifying
beneficiaries as homebound are documented, and that beneficiaries receive only reasonable and
necessary skilled services.
VNA of Central Jersey disagreed with our recommendations that it: (1) refund to the Medicare
program the portion of the estimated $2 million overpayment for claims incorrectly billed that are
within the reopening period; (2) exercise reasonable diligence to identify and return overpayments,
in accordance with the 60-day rule, for claims that are outside the reopening period; (3) exercise
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Department of Health and Human Services, Office of Inspector General
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reasonable diligence to identify and return any additional similar overpayments outside of our
audit period; and (4) strengthen its procedures for billing home health services.
We recommend that The Palace, 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 identify any
of those returned overpayments as having been made in accordance with this recommendation.
We also recommend that The Palace strengthen its procedures to ensure full compliance with
requirements for billing home health services. The Palace stated that it plans to appeal our
findings.
TPC disagreed with our recommendations that it: (1) exercise reasonable diligence to identify,
report, and return any overpayments in accordance with the 60-day rule; (2) identify any of those
returned overpayments as having been made in accordance with this recommendation; and (3)
strengthen its procedures to ensure that the homebound statuses of Medicare beneficiaries are
verified and continually monitored, that the specific factors qualifying beneficiaries as homebound
are documented, and that beneficiaries receive only reasonable and necessary skilled services.
Tender Touch did not address our recommendations that it: (1) refund to the Medicare program
the portion of the estimated $478,780 overpayment for claims 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 identify any
of those returned overpayments as having been made in accordance with this recommendation;
and (3) strengthen its procedures.
Southeastern did not agree with our recommendations that it: (1) 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) strengthen its procedures to ensure that the homebound statuses of Medicare beneficiaries
are verified and continually monitored, that the specific factors qualifying beneficiaries as
homebound are documented, that beneficiaries receive only reasonable and necessary skilled
services, and that the correct Health Insurance Prospective Payment System payment codes are
billed.
Brookdale generally agreed with our recommendations that it: (1) refund to the Medicare program
the portion of the estimated $3.3 million overpayment for claims incorrectly billed that are within
the reopening period; (2) 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) strengthen some of its
procedures.
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Department of Health and Human Services, Office of Inspector General
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Medicare Hospital Provider Compliance Audit: St. Francis Hospital (A-05-18-00048),
October 2020;
Medicare Hospital Provider Compliance Audit: Edward W. Sparrow Hospital (A-05-18-00045),
November 2020;
Medicare Hospital Provider Compliance Audit: Providence Medical Center (A-07-18-05113),
December 2020; and
Medicare Hospital Provider Compliance Audit: Sunrise Hospital & Medical Center (A-04-19-08075),
March 2021
St. Francis Hospital complied with Medicare billing requirements for 86 of the 100 inpatient and
outpatient claims we reviewed. On the basis of our sample results, we estimated that St. Francis
Hospital received overpayments of at least $1.6 million for the audit period.
Edward W. Sparrow Hospital complied with Medicare billing requirements for 91 of the 100
inpatient and outpatient claims we reviewed. However, Edward W. Sparrow Hospital did not fully
comply with Medicare billing requirements for the remaining nine claims, resulting in
overpayments of $47,317 for the audit period. On the basis of our sample results, we estimated
that Edward W. Sparrow Hospital received overpayments of at least $550,917 for the audit period.
Providence Medical Center complied with Medicare billing requirements for 87 of the 100 inpatient
and outpatient claims we reviewed. However, Providence Medical Center did not fully comply with
Medicare billing requirements for the remaining 13 claims, resulting in overpayments of $57,800 for
calendar years 2016 and 2017. On the basis of our sample results, we estimated that Providence
Medical Center received overpayments of at least $325,241 for the audit period.
Sunrise Hospital & Medical Center complied with Medicare billing requirements for 46 of the 100
inpatient and outpatient claims we reviewed. However, Sunrise Hospital & Medical Center did not
fully comply with Medicare billing requirements for the remaining 54 claims, resulting in net
overpayments of $999,950 for the audit period. On the basis of our sample results, we estimated
that Sunrise Hospital & Medical Center received overpayments of at least $23.6 million for the
audit period. During the course of our audit, Sunrise Hospital & Medical Center submitted five of
these claims for reprocessing, and we verified those claims as correctly reprocessed. Accordingly,
we have reduced the recommended refund by $8,914.
St. Francis Hospital generally disagreed with our recommendations that it: (1) refund to the
Medicare contractor $1.6 million in estimated overpayments for the audit period for incorrectly
billed claims that are within the 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 identify any returned overpayments as having been made in accordance with this
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Department of Health and Human Services, Office of Inspector General
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recommendation; and (3) strengthen its controls to ensure full compliance with Medicare
requirements; specifically ensure that all inpatient rehabilitation facility beneficiaries meet Medicare
criteria for acute inpatient rehabilitation, that all inpatient beneficiaries meet Medicare
requirements for inpatient hospital services, that procedure and diagnosis codes are supported in
the medical records and staff are properly trained, and that medical records accurately document
distinct procedural services and staff are properly trained.
Edward W. Sparrow Hospital partly concurred with our recommendations that it 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 strengthen its controls to ensure full compliance with Medicare
requirements.
Providence Medical Center disagreed with our recommendations that it: (1) refund to the Medicare
contractor the portion of the $325,241 in estimated overpayments for the audit period for claims
that it incorrectly billed that are within the reopening period and (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 identify any of those returned overpayments as having been made in
accordance with this recommendation. Regarding our recommendation to strengthen controls to
ensure full compliance with Medicare requirements, Providence Medical Center described
corrective actions that it had taken or planned to take.
Sunrise Hospital & Medical Center generally disagreed with our recommendations that it: (1) refund
to the Medicare contractor $23.6 million in net estimated overpayments for the audit period for
claims that it incorrectly billed that are within the 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 identify any of those returned overpayments as having been made in
accordance with this recommendation; and (3) strengthen controls to ensure full compliance with
Medicare requirements.
Medicare Hospice Provider Compliance Audit: Hospice Compassus, Inc., of Payson, Arizona
(A-02-16-01023), November 2020;
Medicare Hospice Provider Compliance Audit: Hospice Compassus, Inc., of Tullahoma,
Tennessee (A-02-16-01024), December 2020; and
Medicare Hospice Provider Compliance Audit: Tidewell Hospice, Inc. (A-02-18-01024),
February 2021
Hospice Compassus, Inc., of Payson, Arizona (Payson), did not comply with Medicare requirements
for 39 of the 100 claims in our sample. For these claims, Payson claimed Medicare reimbursement
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Department of Health and Human Services, Office of Inspector General
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for hospice services: (1) for which the associated beneficiary did not meet eligibility requirements,
(2) that were not documented, and (3) at a reimbursement rate associated with a level of care
higher than what the associated beneficiary required.
Hospice Compassus, Inc., of Tullahoma, Tennessee (Tullahoma), did not comply with Medicare
requirements for 35 of the 100 claims in our sample. For these claims, Tullahoma claimed Medicare
reimbursement for hospice services (1) for which the clinical record did not support the
beneficiary’s terminal prognosis, (2) that were not documented, and (3) for which the notice of
election was not filed timely with the MAC.
Tidewell Hospice, Inc. (Tidewell), did not comply with Medicare requirements for 18 of the 100
claims in our sample. For these claims, Tidewell claimed Medicare reimbursement for hospice
services for which the clinical record did not support the beneficiary’s terminal illness prognosis or
the level of care claimed and for services that were not eligible for Medicare reimbursement.
Payson generally disagreed with our recommendations that it: (1) exercise reasonable diligence to
identify, report, and return overpayments in accordance with the 60-day rule; (2) based on the
results of our audit, identify, report, and return any additional overpayments as having been made
in accordance with our recommendations; and (3) strengthen its procedures to ensure that hospice
services comply with Medicare requirements.
Tullahoma generally disagreed with our recommendations that it: (1) exercise reasonable diligence
to identify, report, and return overpayments in accordance with the 60-day rule; (2) based on the
results of our audit, identify, report, and return any additional overpayments as having been made
in accordance with our recommendations; and (3) strengthen its procedures to ensure that hospice
services comply with Medicare requirements.
Tidewell partly agreed and partly disagreed with our recommendations that it: (1) refund to the
Federal Government the portion of the estimated $8.3 million in Medicare overpayments that are
within the 4-year claims reopening period; (2) exercise reasonable diligence to identify, report, and
return overpayments, in accordance with the 60-day rule; and (3) strengthen its policies and
procedures to ensure that hospice services comply with Medicare requirements.
CMS and Its Contractors Did Not Use Comprehensive Error Rate Testing Program Data To Identify
and Focus on Error-Prone Providers (A-05-17-00023), January 2021
CMS and its contractors did not use CERT data to identify and focus on error-prone providers for
review and corrective action. Using CERT data, we identified 100 error-prone providers from 2014
through 2017. Of the $5.8 million reviewed by CERT, $3.5 million was incorrect, which is an
improper payment rate of 60.7 percent. We determined that during the same period, Medicare
made $19.1 billion in FFS payments to these 100 error-prone providers.
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The term "error-prone provider" is an OIG-created term to refer to a list of providers identified as
having higher rate of errors in the CERT sample data. When used to describe OIG analysis of CERT
data from 2014 through 2017, the term refers to providers that had at least one error in each of the
4 CERT years analyzed, an error rate of higher than 25 percent in each of the 4 CERT years
analyzed, and a total error amount of at least $2,500. An error-prone provider is statistically more
likely to submit an improper claim than the average provider.
CMS did not concur with our recommendations that it: (1) review the list of 100 error-prone
providers identified in this audit and take specific action as appropriate, such as prior authorization,
prepayment reviews, and postpayment reviews, and (2) use annual CERT data to identify individual
providers that have an increased risk of receiving improper payments and apply additional
program integrity tools to these providers.
Drug Pricing and Reimbursement
Comparison of Average Sales Prices and Average Manufacturer Prices: Results for the Second
Quarter of 2020 (OEI-03-21-00050), November 2020, and
Comparison of Average Sales Prices and Average Manufacturer Prices: Results for the Third Quarter
of 2020 (OEI-03-21-00060), February 2021
OIG identified seven drug codes in the second quarter of 2020 and seven drug codes in the third
quarter of 2020 that met CMS’s criteria for price substitution. OIG compares average sales prices
(ASPs) to average manufacturer prices (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.
Opioid Use in Medicare Part D During the Onset of the COVID-19 Pandemic (OEI-02-20-00400),
February 2021
During the first 8 months of 2020—and the onset of the COVID-19 pandemic—at least 5,000 Part
D beneficiaries per month suffered opioid overdoses and almost a quarter of a million received
high amounts of opioids. At the same time, the number of beneficiaries receiving drugs for MAT
increased slightly and the number receiving naloxone declined through April but increased in the
following months. As the COVID-19 pandemic continues to affect millions of Americans, vigilance
remains important. It is essential that CMS—and HHS—monitor trends in prescriptions for drugs
for MAT and naloxone and take appropriate action if the number of prescriptions begins to fall off.
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Medicaid Program Reports and Reviews
Financial Management and Improper Payments
Colorado Improperly Claimed Millions in Enhanced Federal Medicaid Reimbursement for New
Adult Group Beneficiaries Because of a Data Processing Error (A-07-17-02807), October 2020
Colorado claimed reimbursement for Medicaid services provided from January 1, 2014, through
September 30, 2015, to some beneficiaries who were enrolled in the new adult group but who later
became ineligible for Medicaid coverage. As a result, Colorado improperly claimed and received
over $1.9 million in Federal reimbursement for these beneficiaries past the termination dates of
their Medicaid eligibility.
Colorado properly terminated 1,543 beneficiaries’ eligibility in the Colorado Benefits Management
System (CBMS), which determines Medicaid eligibility and interfaces with other automated systems,
but erroneously kept them as eligible in the Medicaid Management Information System (MMIS).
The beneficiaries’ eligibility was not terminated in the MMIS because of a data processing error.
Although the CBMS interfaced with the MMIS, for some beneficiaries a change in eligibility
determination from eligible to ineligible that occurred in the CBMS did not transfer correctly to the
MMIS.
Colorado disagreed with our recommendations that it: (1) refund to the Federal Government the
over $1.9 million in improperly claimed Medicaid reimbursement and (2) identify and refund to the
Federal Government any payments made on behalf of ineligible beneficiaries for whom services
after our audit period were claimed and reimbursed past the termination dates of their eligibility.
Colorado did not comment on our recommendation that it establish adequate system controls that
ensure that eligibility determinations transfer correctly from the CBMS to the MMIS to prevent
payments from being made on behalf of ineligible beneficiaries.
Hospitals Did Not Comply With Medicare Requirements for Reporting Cardiac Device Credits (A-01-
18-00502), November 2020
For 3,233 of the 6,558 Medicare claims that we reviewed, hospitals likely did not comply with
Medicare requirements associated with reporting manufacturer credits for recalled or prematurely
failed cardiac medical devices. As a result, 911 hospitals received payments of $76 million rather
than the $43 million they should have received, resulting in $33 million in potential overpayments.
MACs made these overpayments because they do not have a postpayment review process that
would ensure that hospitals reported manufacturer credits for cardiac medical devices.
CMS partly concurred with our recommendations that it: (1) instruct MACs to recover the portion of
the $33 million in identified Medicare overpayments that are within the reopening period; (2) notify
hospitals associated with potential overpayments outside the reopening period so that they can
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Department of Health and Human Services, Office of Inspector General
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return any overpayments in accordance with the 60-day rule; (3) require hospitals to use condition
codes 49 and 50 on claims; (4) instruct MACs to implement a postpayment review process; (5)
obtain device credit listings from manufacturers and determine whether providers reported credits
as required; (6) direct MACs to determine whether hospitals have engaged in a pattern of incorrect
billing after our audit period and, if so, take appropriate action in accordance with CMS policies
and procedures; and (7) consider eliminating the current Medicare requirements for reporting
device credits by reducing the payments for cardiac device replacement procedures.
Ohio Did Not Correctly Determine Medicaid Eligibility for Some Newly Enrolled Beneficiaries
(A-05-18-00027), November 2020, and
Louisiana Did Not Correctly Determine Medicaid Eligibility for Some Newly Enrolled Beneficiaries
(A-06-18-02000), January 2021
For our sample of 150 beneficiaries, Ohio did not determine eligibility for 18 beneficiaries in
accordance with Federal and State requirements and did not provide supporting documentation to
verify that the remaining 66 potentially ineligible beneficiaries were newly eligible. (The total
exceeds 150 because 3 beneficiaries were found to be ineligible for 1 determination period and
found to be potentially ineligible for another period.)
For our sample of 120 Medicaid beneficiaries, Louisiana made Medicaid payments on behalf of 4
beneficiaries who did not meet requirements and 1 beneficiary who may not have met
requirements. Based on our sample results, we estimated that Louisiana made Medicaid payments
of $20.1 million (100-percent Federal share) on behalf of 16,358 beneficiaries who did not meet
requirements.
On the basis of our sample results, we estimated that Ohio made Medicaid payments of
$77.5 million (Federal share) on behalf of 51,219 ineligible beneficiaries and $746.4 million (Federal
share) on behalf of 241,998 potentially ineligible beneficiaries. Based on our sample results, we
estimated that Louisiana made Medicaid payments of $20.1 million (100-percent Federal share) on
behalf of 16,358 beneficiaries who did not meet requirements.
Ohio did not indicate concurrence or nonconcurrence with our recommendations that it: (1)
redetermine, if necessary, the current Medicaid eligibility of the sampled beneficiaries; (2) ensure
that its eligibility determination system has the functionality to verify eligibility requirements and
perform eligibility determinations in accordance with Federal and State requirements; (3) educate
eligibility caseworkers about relevant Federal and State eligibility requirements; and (4) ensure that
documentation supporting eligibility determinations is maintained in beneficiaries’ records.
Louisiana agreed with our recommendations that it: (1) promptly provide notice and cancel the
eligibility of beneficiaries identified with income over the allowable limit; (2) educate State analysts
on established policies and procedures regarding requirements to promptly provide notice and
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cancel eligibility, verify income, and provide retroactive eligibility; and (3) redetermine, if necessary,
the current Medicaid eligibility status of the sampled beneficiaries for whom income or dependent
verifications did not meet Federal and State requirements.
Ohio Made Capitation Payments to Managed Care Organizations for Medicaid Beneficiaries With
Concurrent Eligibility in Another State (A-05-19-00023), November 2020, and
Illinois Made Capitation Payments to Managed Care Organizations for Medicaid Beneficiaries
With Concurrent Eligibility in Another State (A-05-19-00031), February 2021
Ohio made an estimated $5.9 million in August 2018 capitation payments on behalf of beneficiaries
who were concurrently eligible and residing in another State. On the basis of our sample results,
we estimated that Ohio could have saved $5.9 million ($4.2 million Federal share) for August 2018
capitation payments made to managed care organizations on behalf of beneficiaries with
concurrent eligibility.
Illinois made an estimated $3.8 million in August 2018 capitation payments on behalf of
beneficiaries who were concurrently eligible and residing in another State. On the basis of our
sample results, we estimated that Illinois could have saved $3.8 million ($2.1 million Federal share)
for August 2018 capitation payments made to managed care organizations on behalf of
beneficiaries with concurrent eligibility.
Ohio did not indicate concurrence or nonconcurrence with our recommendations that it: (1)
develop or enhance current procedures to identify beneficiaries with concurrent eligibility in
another State, which could have saved Ohio an estimated $5.9 million ($4.2 million Federal share)
in capitation payments for August 2018, and (2) ensure that procedures are in place for county
caseworkers to timely review and terminate eligibility for beneficiaries who were identified as
concurrently eligible in another State.
Illinois concurred with our recommendations that it: (1) develop or enhance current procedures to
identify beneficiaries with concurrent eligibility in another State, which could have saved Illinois an
estimated $3.8 million ($2.1 million Federal share) in capitation payments for the month of August
2018, and (2) ensure that procedures are in place for caseworkers to timely review and terminate
eligibility for beneficiaries who were identified as concurrently eligible in another State.
Florida Received Unallowable Medicaid Reimbursement for School-Based Services (A-04-18-07075),
November 2020
Florida did not always claim Federal Medicaid reimbursement for school-based services in
accordance with Federal and State requirements. Of the 200 school-based services in our sample,
168 met Federal and State requirements. However, Florida incorrectly claimed reimbursement for
the remaining 32 sampled services totaling $644 because they did not meet 1 or more Federal
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requirements as follows: individual education plans or plans of care without the required signature,
not enough supporting documentation to substantiate services, and provider qualification
requirements such as licenses and training courses missing.
These deficiencies occurred because Florida did not have formal policies and procedures to ensure
that the claims school districts submitted were adequately documented. In addition, Florida did
not adequately monitor for compliance with Federal and State requirements school-based services
claims that the school districts submitted.
On the basis of our sample results, we estimated that Florida claimed at least $1.4 million in
unallowable costs during our audit period.
Florida did not concur with our recommendations that it: (1) refund $1.4 million to the Federal
Government, (2) work with CMS to review Medicaid claims for school-based services after our audit
period and refund any overpayments, and (3) improve its policies and procedures to ensure that it
is adequately monitoring school-based service claims to ensure compliance with Federal and State
requirements.
Nebraska Claimed Almost All Medicaid Payments for Targeted Case Management Services in
Accordance With Federal Requirements but Claimed Some Unallowable Duplicate Payments
(A-07-19-03239), December 2020
Nebraska claimed almost all Federal Medicaid reimbursement for targeted case management
services during FY 2016 through FY 2018 in accordance with Federal and State requirements. The
150 claims we sampled had no errors with respect to services provided, recipient eligibility, or
provider qualifications.
However, 6 of the 150 sampled claims were not allowable because the claims had duplicate
monthly payments. In these instances, a provider received two or more monthly payments on
behalf of a single recipient in a single month, which resulted in a total payment amount that
exceeded the approved monthly rate. Nebraska made 164 duplicate monthly payments during our
audit period, which resulted in overpayments of $22,484 (Federal share). Nebraska made these
duplicate payments because its system edits did not always prevent it from paying total monthly
amounts that exceeded the approved monthly rates to providers on behalf of these recipients.
Nebraska agreed with our recommendations that it refund $22,484 (Federal share) in
overpayments to the Federal Government and implement the necessary MMIS edits to prevent and
detect duplicate payments.
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New York Improved Its Monitoring of Its Personal Care Services Program But Still Made
Improper Medicaid Payments of More Than $54 Million (A-02-19-01016), December 2020
New York claimed Federal reimbursement for personal care services that did not comply with
certain Federal and State requirements for 28 of the 100 sampled claims. Specifically, New York
received reimbursement for personal care services for which there was: (1) no valid nursing or social
assessment, (2) no independent medical review, (3) no valid physician’s order or the order was not
timely, (4) no documentation of services provided, and (5) no plan of care. Additionally, for some
claims, the personal care aide who provided the associated services had not undergone a timely
criminal history check or did not meet training requirements.
The unallowable claims occurred because New York’s monitoring of the personal care services
program was not adequate to ensure that services complied with Federal and State requirements.
However, we noted that in 2017, New York made some improvements to its monitoring of the
program.
On the basis of our sample results, we estimated that New York improperly claimed at least
$54.5 million in Federal Medicaid reimbursement for personal care services during our audit
period. In addition, the health and safety of some Medicaid beneficiaries may have been put at
risk because their personal care aides had not undergone a criminal history check or did not meet
training requirements.
New York did not specifically indicate concurrence or nonconcurrence with our recommendations
that it refund $54.5 million to the Federal Government, continue to improve its monitoring of local
districts, and reinforce Medicaid requirements related to personal care services.
California Claimed at Least $2 Million in Unallowable Medicaid Reimbursement for a Selected
Provider’s Opioid Treatment Program Services (A-09-20-02001), January 2021
California did not claim Medicaid reimbursement for the selected provider’s OTP services in
accordance with Federal and State requirements. Of the 100 sample items, 1 sample item was
allowable, but 99 sample items had services that were unallowable. On the basis of our sample
results, we estimated that California claimed at least $2.4 million in unallowable Federal Medicaid
reimbursement for OTP services during our audit period.
These deficiencies occurred because California’s oversight activities did not ensure that OTP
services met Federal and State requirements. We also identified deficiencies in two areas in which
California could improve the quality of care provided to beneficiaries receiving OTP services.
California agreed with our recommendations that it: (1) refund $2.4 million to the Federal
Government for unallowable OTP services furnished by the selected provider, (2) ensure that the
selected provider complies with Federal and State requirements for providing and claiming
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Department of Health and Human Services, Office of Inspector General
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reimbursement for OTP services, (3) verify that the selected provider implements corrective action
plans that were approved by California, (4) perform postpayment reviews to identify disallowances
for OTP services that did not comply with State requirements, and (5) work with the selected
provider to improve the quality of care provided to beneficiaries by correcting deficiencies.
Massachusetts Made at Least $14 Million in Improper Medicaid Payments for the Nonemergency
Medical Transportation Program (A-01-19-00004), January 2021
Massachusetts claimed Federal Medicaid reimbursement for 86 of 100 sampled lines of service
submitted by transportation providers that did not comply with certain Federal and State
requirements. The improper claims for unallowable services were made because the State’s
monitoring and oversight of the nonemergency medical transportation (NEMT) program did not
ensure that NEMT services were for qualifying medical services and were adequately documented.
In addition, for all 100 sample items, driver qualifications and vehicle inspection, registration, and
maintenance policies or schedules were not adequately documented. On the basis of our sample
results, we estimated that at least 758,847 Medicaid claims totaling $14,142,730 ($7,071,365 Federal
share) did not comply with certain Federal and State regulations.
Massachusetts generally concurred with our recommendations, including that it: (1) refund
$7,071,365 to the Federal Government, (2) perform data matches to all claims billed on the day of
an NEMT service to ensure that only NEMT claims are paid when there is a corresponding
qualifying medical service, (3) work with its brokers to ensure that documentation contains all
necessary elements to support the NEMT service, (4) evaluate opportunities to better monitor
transportation services, and (5) work with its brokers to implement controls that ensure drivers and
vehicles used to provide NEMT services can be directly and clearly traced to the correct driver
qualifications and vehicle records.
Quality of Care, Safety, and Access
Aspects of Texas’ Quality Incentive Payment Program Raise Questions About Its Ability To
Promote Economy and Efficiency in the Medicaid Program (A-06-18-07001), December 2020
Certain aspects of Texas’ Quality Incentive Payment Program (QIPP) raise questions about its ability
to promote economy and efficiency in Medicaid. Specifically: (1) nursing facilities received less than
half of the earned incentive payments, (2) nursing facilities participating in QIPP generally rated
below average in overall quality, (3) nursing facilities that declined in performance continued to
receive quality improvement incentive payments, and (4) two local government entities
participating in QIPP funded $1.3 million ($737,944 Federal share) of the non-Federal share of QIPP
payments through intergovernmental transfers (IGTs) financed by means of debt instruments.
QIPP provides some incentives for nursing facilities to improve the quality of resident care.
However, the results of our audit suggest that further analysis of the program is warranted.
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We recommended that CMS: (1) work with Texas to determine whether the source of IGTs and the
practice of using debt instruments to fund the non-Federal share of QIPP payments meets
program objectives and promotes economy and efficiency in Medicaid and (2) reevaluate Texas’
QIPP to ensure that it operates in a manner that meets program objectives while promoting
economy and efficiency in Medicaid. Texas did not concur with our first recommendation but did
concur with our second recommendation.
Risk Assessment Puerto Rico Medicaid Program (A-02-20-01011), December 2020
To fulfill OIG's responsibilities under P.L. No. 116-94, we conducted a high-level risk assessment of
Puerto Rico Medicaid program controls and processes. Our approach included interviewing
program officials from the various units that administer the Puerto Rico Medicaid program and
reviewing documents that they provided.
We identified program integrity, beneficiary eligibility, provider enrollment, overpayment reporting,
and contracting as key areas at high risk for improper Medicaid program payments. In addition,
we determined that the risk of improper Medicaid program payments in Puerto Rico could be
increased because there have been no recent reviews of Puerto Rico Medicaid program payments
performed by CMS, and because Puerto Rico's MMIS has not been fully implemented. Finally, we
identified one area (program management) at moderate risk for improper Medicaid program
payments due to limitations in staff hiring and training.
Based on the results of our high-level risk assessment, we determined that to protect Federal funds
by identifying inaccurate program payments, audits of Puerto Rico's Medicaid program are
warranted. We have used the results of this assessment to set priorities for performing these
audits. We plan to initiate two audits in FY 2021 related to potentially improper payments.
Specifically, we will determine whether Puerto Rico improperly claimed Medicaid reimbursement
for payments on behalf of deceased beneficiaries and beneficiaries assigned multiple Medicaid
identification numbers.
Iowa Should Improve Its Oversight of Selected Nursing Homes’ Compliance With Federal
Requirements for Life Safety and Emergency Preparedness (A-07-19-03238), February 2021
Iowa did not ensure that selected nursing homes in the State that participated in the Medicare or
Medicaid programs complied with CMS requirements for life safety and emergency preparedness.
During our onsite inspections, we identified deficiencies in areas related to life safety and
emergency preparedness at all 20 nursing homes we reviewed. We found 122 instances of
noncompliance with life safety requirements and 133 instances of noncompliance with emergency
preparedness requirements. As a result, residents at the 20 nursing homes were at increased risk
of injury or death during a fire or other emergency.
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The identified areas of noncompliance occurred because Iowa did not have a standardized life
safety training program for all staff (not currently required by CMS). In addition, Iowa did not
adequately follow up on deficiencies previously cited or require nursing homes or inspection
contractors to: (1) tag systems that are critical to the health and safety of nursing home residents
when these systems may not work as required and (2) notify the State.
Iowa agreed with our recommendations that it: (1) follow up with the 20 nursing homes to ensure
that corrective actions have been taken regarding the deficiencies identified in this report, (2) work
with CMS to develop standardized life safety training for nursing home staff, and (3) conduct more
frequent surveys and followup at nursing homes with a history of multiple high-risk deficiencies.
Iowa disagreed with our recommendation that it require nursing homes to tag deficient critical
systems.
New York Did Not Fully Comply With Federal and State Requirements for Reporting and Monitoring
Critical Incidents Involving Medicaid Beneficiaries With Developmental Disabilities (A-02-17-01026),
February 2021
New York did not ensure that providers fully complied with Federal waiver and State requirements
for reporting and monitoring critical incidents involving Medicaid beneficiaries with developmental
disabilities residing in community-based settings. Of the 30 incidents of potential abuse and
neglect in our sample, 23 incidents were properly reported and investigated; however, 7 incidents
were not. Because incidents of potential abuse and neglect were not properly reported or
investigated, beneficiaries were put at an increased risk of harm.
Of the 48 reported and substantiated incidents of abuse and neglect in our judgmental sample, we
found that the associated providers complied with the critical incident reporting and monitoring
requirements.
New York agreed with our recommendations that it: (1) reinforce guidance to the provider
community on various specific requirements related to the reporting and investigating of critical
incidents; (2) issue guidance and/or provide training to the provider community on the importance
of identifying the root cause of an incident, and identifying trends in incidents; and (3) review the
three internal occurrence investigations identified in our report for compliance with investigative
requirements, and make any necessary changes to the incident classifications in accordance with
Part 624.
CMS Use of Data on Nursing Home Staffing: Progress and Opportunities To Do More
(OEI-04-18-00451), March 2021
CMS has taken important steps to build and use a new data source for information on nursing
home staffing, but CMS has opportunities to better leverage this information. Our findings can
help CMS identify ways to better inform consumers and improve oversight of staffing in nursing
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homes. CMS concurred with all four of our recommendations. Our recommendations were for
CMS to:
• provide data to consumers on nurse staff turnover and tenure, as required by Federal law;
• ensure the accuracy of non-nurse staffing data used on Care Compare;
• consider residents’ level of need when identifying nursing homes for weekend inspections;
and
• take additional steps to strengthen oversight of nursing home staffing.
Data on Medicaid Managed Care Payments to Providers Are Incomplete and Inaccurate,
(OEI-02-19-00180), March 2021
Effective oversight of Medicaid requires a national system with complete and accurate data. CMS
established the T-MSIS for this purpose. Payment data are a critical component of T-MSIS. These
data include the amounts paid, billed, and allowed for every service provided to Medicaid
enrollees, including those services provided through managed care. CMS did not concur with any
of our recommendations, which were to:
• review States’ managed care payment data in T-MSIS and ensure that States have
corrective action plans to improve data completeness and quality, as appropriate;
• make public its reviews of States’ managed care data; and
• clarify and expand its initiative on payment data.
Florida Did Not Ensure That Nursing Facilities Always Reported Allegations of Potential Abuse
or Neglect of Medicaid Beneficiaries and Did Not Always Assess, Prioritize, or Investigate
Reported Incidents (A-04-17-08058), March 2021
Florida did not ensure that nursing facilities always reported potential abuse or neglect of Medicaid
beneficiaries transferred from nursing facilities to hospital emergency departments. Additionally,
we could not determine whether Florida complied with Federal requirements for assigning a
priority level, initiating onsite surveys, and recording allegations of potential abuse or neglect.
Lastly, Florida's incident report program may not have been effective in accomplishing the
program's goal and objectives. Certain internal control deficiencies and practices could limit the
effectiveness of Florida's complaint and incident program. Specifically, Florida: lacked written
policies and procedures for processing incident reports, had inadequate intake staffing, had
inadequate incident report processing, lacked written policies and procedures for managing late
incident report filings, and lacked written policies and procedures for managing APS abuse and
neglect investigation notifications.
Florida generally concurred with our recommendations that it: (1) work with CMS to provide clear
guidance to nursing facilities regarding what constitutes a reportable incident, (2) establish
procedures to require assessment start and end dates and priority level assignments, and (3)
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establish and implement written policies and procedures for incident report processing. We made
further recommendations to improve the effectiveness of the complaint and incident report
process.
Drug Pricing and Reimbursement
Massachusetts Claimed Unallowable Federal Reimbursement for Some Medicaid
Physician-Administered Drugs (A-06-18-04001), October 2020
Massachusetts did not always comply with Federal Medicaid requirements for invoicing
manufacturers for rebates for physician-administered drugs. Massachusetts did not invoice
manufacturers for rebates associated with $11.4 million (Federal share) in physician-administered
drugs. Of this amount, $10.5 million was for single-source drugs, and $883,000 was for top-20
multiple-source drugs. Of the $11.4 million, $9.7 million was related to claims identified as hospital
outpatient. Massachusetts did not invoice for rebates for any physician-administered drug claims
identified as hospital outpatient claims. In addition, some claims identified as physician claims
were not invoiced for rebates. Because Massachusetts’ internal controls did not always ensure that
it invoiced manufacturers to secure rebates, Massachusetts improperly claimed Federal
reimbursement for these single-source drugs and top-20 multiple-source drugs.
Further, Massachusetts did not submit the utilization data necessary to secure rebates for all other
physician-administered drugs. Providers submitted claims totaling $4.2 million (Federal share) that
did not have National Drug Codes (NDCs) or had invalid NDCs. Furthermore, under the Medicaid
drug rebate program, claims totaling $782,917 (Federal share), which contained NDCs, could have
been eligible for rebates.
Massachusetts partly agreed with our recommendations that it: (1) refund to the Federal
Government $10.5 million (Federal share) for claims for single-source physician-administered drugs
that were ineligible for Federal reimbursement; (2) refund to the Federal Government $882,892
(Federal share) for claims for top-20 multiple-source physician-administered drugs that were
ineligible for Federal reimbursement; and (3) work with CMS to determine the proper resolution of
the other claims in question, $4.9 million Federal share. We also made procedural
recommendations.
Minnesota Did Not Bill Manufacturers for Some Rebates for Drugs Dispensed to Enrollees of
Medicaid Managed-Care Organizations (A-05-17-00018), October 2020
Minnesota did not fully comply with Federal Medicaid requirements for billing manufacturers for
rebates for drugs dispensed to managed care organization (MCO) enrollees. Minnesota did not
bill for and collect manufacturers’ rebates that we calculated to be $6.1 million (Federal share).
Specifically, it did not bill for and collect manufacturers’ rebates that we calculated to be (1)
$5.9 million (Federal share) for pharmacy drugs and for single-source and top-20 multiple-source
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Department of Health and Human Services, Office of Inspector General
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physician-administered drugs that were eligible for rebates and (2) $173,780 (Federal share) for
physician-administered drugs that may have been eligible for rebates. Minnesota did not always
bill for and collect manufacturers’ rebates because Minnesota and its contractor did not identify all
of the rebate-eligible drugs in the utilization data submitted by the MCOs.
Minnesota agreed with our recommendations that it: (1) bill for and collect manufacturers’ rebates
for pharmacy drugs and for single-source and top-20 multiple-source physician-administered
drugs that we calculated to be $5.9 million (Federal share) and refund the Federal Government and
(2) work with CMS to determine whether the non-top-20 multiple-source physician-administered
drugs were eligible for rebates that we calculated to be $173,780 (Federal share) and, if so, upon
receipt of the rebates, refund the Federal share. We also made a recommendation related to
pharmacy and physician-administered drugs that were not billed for rebates after our audit period
and a procedural recommendation to ensure that all rebate-eligible drugs are properly identified
and billed for rebate.
Opioids in Medicaid: Concerns About Opioid Use Among Beneficiaries in Six Appalachian States in
2018 (OEI-05-19-00410), December 2020
We found that across 6 Appalachian States in 2018, nearly 6,000 Medicaid beneficiaries received
potentially harmful amounts of opioids; more than 450 of these beneficiaries were at serious risk of
opioid misuse or overdose; and 19 prescribers stood out in their prescribing of opioids to
beneficiaries at serious risk. The COVID-19 pandemic may be putting beneficiaries at greater risk of
opioid misuse or overdose in 2020 and beyond. OIG is committed to fighting the opioid crisis and
protecting beneficiaries from prescription drug abuse and misuse. As part of this commitment,
OIG is working with our law enforcement partners to bring resources and expertise to these six
States through the Appalachian Regional Prescription Opioid Strike Force.
States Could Do More To Oversee Spending and Contain Medicaid Costs for Specialty Drugs,
(OEI-03-17-00430), December 2020
Overall, State Medicaid programs—FFS programs and Medicaid MCOs—used over 100 distinct
criteria to categorize thousands of drugs as specialty drugs. Further, States reported limited
oversight of their Medicaid MCOs’ management of specialty drug categorization and spending.
These findings indicate that as more expensive specialty drugs enter the market, CMS and States
may not be using all available tools to contain rising expenditures for specialty drugs in their
Medicaid programs. CMS concurred with our first and third recommendations and did not concur
with our second recommendation. Our recommendations were for it to:
• work with States to expand alternative reimbursement models to address the rising costs
for drugs often categorized as specialty drugs;
• provide States with acquisition cost data for a wider range of specialty drugs; and
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Department of Health and Human Services, Office of Inspector General
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• collaborate with States to conduct greater oversight of Medicaid MCOs’ management of
specialty drugs; this oversight could include a review of contract language that allows
States to obtain requested information on specialty drug categorizations, specialty drug
reimbursement methodologies, and cost management strategies from the MCOs.
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Department of Health and Human Services, Office of Inspector General
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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.
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 213 criminal and 261 civil actions against individuals
or entities who engaged in offenses related to health care. We also reported over $799.4 million in
investigative receivables due to HHS and more than $568.2 million in non-HHS investigative receivables,
including civil and administrative settlements or civil judgments related to Medicare, Medicaid, and other
Federal, State, and private health care programs.
Criminal and Civil Enforcement Activities Related to Medicare and Medicaid
The following recently completed actions and settlements are organized by the type of provider or entity
involved. Additional cases appear in the Medicare Fraud Strike Force Activities section below.
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Department of Health and Human Services, Office of Inspector General
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Ambulance Transportation Company
The following case example involves an ambulance transportation company:
New York—On December 16, 2020, Aleksandr Radinovskiy was sentenced to 24 months in
prison, followed by 24 months of probation, and ordered to pay $10,650,670 in restitution.
Radinovskiy pleaded guilty to one count of conspiracy to offer and pay health care
kickbacks, and one count of conspiracy to defraud the lawful functions of the IRS.
Radinovskiy and his father, Igor Radinovskiy, participated in a conspiracy in which they paid
more than $8.6 million in kickbacks to co-conspirator companies not enrolled in the
Medicaid program for the referral of beneficiaries recruited by those co-conspirators, so
that Sabe Ambulette Services (Sabe) could falsely bill Medicaid as if Sabe had transported
those beneficiaries to various clinics in Brooklyn and Queens. The defendants then falsely
reported to the IRS that the illegal kickback payments were legitimate business expenses,
which caused relevant tax forms to falsely under-report business income and claim
deductions.
Physical Therapy
The following case example involves physical therapy:
Georgia—On December 15, 2020, physical therapy provider McLeod-Hughes and
Associates, LLC, and its owner Barry McLeod-Hughes, agreed to pay $506,811 to resolve
allegations that it violated the False Claims Act by submitting bills to the Medicare and
TRICARE programs for physical therapy services provided by unlicensed, uncredentialed or
otherwise unapproved individuals. Additionally, McLeod-Hughes has voluntarily agreed to
be excluded as a provider from Medicare and other Federal health care programs. Federal
health care programs, such as Medicare and TRICARE, allow services to be provided and
billed only by certain licensed and approved providers and only under certain
circumstances.
The alleged scheme resolved by the settlement concerned McLeod-Hughes’s submission of
claims to Medicare and TRICARE for physical therapy services purportedly provided by
approved providers when, in fact, athletic trainers and other unlicensed, uncredentialed, or
otherwise unapproved individuals furnished the physical therapy services.
Pharmaceutical Companies
The following case example involves pharmaceutical companies:
Massachusetts—On December 17, 2020, Cambridge-based pharmaceutical company,
Biogen Inc. agreed to pay $22 million to resolve allegations that it violated the False Claims
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Act by illegally using two foundations, the Chronic Disease Fund (CDF) and the Assistance
Fund (TAF), as conduits to pay the Medicare copayments for patients taking Biogen’s
multiple sclerosis drugs, Avonex and Tysabri. Advanced Care Scripts (ACS), a specialty
pharmacy that performed services for Biogen, has also agreed to pay $1.4 million to resolve
allegations that it conspired with Biogen to enable Biogen to use CDF and TAF as conduits
for Biogen to pay Medicare copayments for Avonex and Tysabri patients. In separate
settlements in late 2019, CDF paid $2 million and TAF paid $4 million to resolve allegations
concerning their respective roles in enabling certain pharmaceutical companies to pay
kickbacks to Medicare patients.
As part of the settlements, the Government alleged that Biogen, acting with ACS’s help,
used CDF and TAF, each of which claimed status as nonprofit organizations for tax
purposes, as conduits to pay the copayment obligations of thousands of Medicare patients
taking Avonex and Tysabri. The Government specifically alleged that in 2011, Biogen
identified Medicare-eligible Avonex patients in Biogen’s free drug program, and arranged
for ACS to transfer those patients from the Biogen free drug program to CDF, so that CDF
could cover those patients’ Medicare copayments and the patients’ purchase of Avonex
would generate Medicare revenue for Biogen. Biogen then paid CDF, and ACS promptly
sent CDF batch files of copayment assistance applications for Medicare-eligible Avonex
patients who had been receiving the free drug from Biogen. CDF subsequently approved
most of those applications and covered the costs of those patients’ Medicare copayments
for Avonex.
Durable Medical Equipment Companies
The following case examples involve durable medical equipment (DME) companies:
New York—On December 21, 2020, Apria Healthcare Group, Inc., and its affiliate, Apria
Healthcare LLC (Apria), entered into a settlement agreement under which it agreed to pay
$40.5 million to resolve allegations that Apria submitted false claims to Federal health
programs, including Medicare and Medicaid, seeking reimbursement for the rental of costly
non-invasive ventilators (“NIVs”) to program beneficiaries who were not using the NIVs,
making them not medically necessary, in addition to the improper waiver of patient co-
insurance payments.
According to court documents, Apria decided in 2014 to prioritize the expansion of its NIV
rental business because health care programs like Medicare paid as much as $1,400 per
month to cover NIVs, a type of complex respiratory equipment that can dynamically adjust
the pressure level of air delivery. That expansion, however, came at the cost of Apria’s
compliance with the basic medical necessity requirement of Federal health programs.
Specifically, while Apria knew that it was responsible for monitoring patients’ utilization of
their NIVs and to stop billing when NIVs were no longer being used, it did not have enough
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Department of Health and Human Services, Office of Inspector General
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respiratory therapy staff to conduct such monitoring. As a result, Apria routinely billed
Medicare and other programs when it did not know whether NIVs were still being used by
patients, which would have made their use medically necessary. Further, even when Apria
had information indicating that patients were no longer using their NIVs, it often continued
to bill the Federal health programs.
In connection with this settlement, Apria also entered into a CIA with HHS-OIG, which
requires Apria to implement board oversight, a claims review process by an Independent
Review Organization, and other compliance steps designed to foster adherence to Federal
health care program requirements and thereby protect the programs.
New York—On November 23, 2020, Etienne Allonce, the former co-owner of Medical
Solutions Management, Inc. (MSM), a DME supplier in Hicksville, New York, was sentenced
to 36 months in prison for health care fraud and ordered to pay $4,444,468 in restitution.
Between April 2003 and March 2007, Allonce, along with his wife and MSM co-owner
Michel Allonce, submitted approximately $10 million in false claims to Medicare and
Medicaid, seeking payment for medical supplies never ordered by MSM and never
delivered to patients at nursing homes. Etienne Allonce fled the United States just hours
before Federal agents arrested his wife in 2007. In September 2018, Allonce was expelled
from Haiti where he had fled shortly before his indictment in the Eastern District of New
York 11 years earlier. Prior to his return to the United States, Allonce was placed on HHS-
OIG’s Most Wanted List.
Pharmacies
The following case examples involve pharmacies:
New York—On October 23, 2020, Sajid Javed, an owner and operator of a number of
pharmacies in the New York City area, was sentenced to 30 months in prison for using his
pharmacies to submit more than $7.1 million in fraudulent claims to Medicare and
Medicaid. Javed was ordered to pay restitution in the amounts of $6,040,451.32 to
Medicare and $1,150,562.16 to Medicaid. While owning and operating pharmacies located
in Brooklyn and Queens, Javid conducted a multimillion-dollar scheme to defraud Medicare
and Medicaid programs by seeking reimbursement for prescription drugs that were not
distributed to customers. Specifically, from January 2013 through December 2014, Javed
obtained more than $7.1 million in reimbursements from Medicare and Medicaid for
prescription drugs that his pharmacies never actually dispensed to customers. Javed
defrauded Medicare and Medicaid into providing him with these reimbursements by
obtaining prescriptions from other individuals who were willing to forego delivery of the
medications in exchange for a share of the reimbursed proceeds, in the form of kickbacks.
Javed offered to pay, and did actually pay, kickbacks in furtherance of this scheme.
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Department of Health and Human Services, Office of Inspector General
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Prescription Drugs
The following case example involves prescription drugs:
New York—On October 15, 2020, Dr. Eugene Gosy was sentenced to 70 months in prison
and 3 years of supervised release, and ordered to pay $344,562.65 in restitution to his
victims, including Medicare. The sentence was the result of Dr. Gosy's guilty plea, entered
on January 7, 2020, in which he pleaded guilty to one count of conspiracy to unlawfully
distribute controlled substances and one count of health care fraud.
In carrying out the conspiracy, Dr. Gosy and his employees issued more prescriptions for
controlled substances annually than any other prescriber or prescribing entity in New York
State, including hospitals. Specifically, Dr. Gosy and his employees carried out their
conspiracy by: (1) prescribing controlled substances without conducting a physical
examination and/or after conducting only a limited and inadequate physical examination;
(2) prescribing controlled substances in ways that were likely to cause, and did cause,
dependence and addiction, and that contributed to existing addictions; (3) issuing
prescriptions for controlled substances in dosages and/or in combinations dangerous to
the health and safety of the patient; (4) issuing prescriptions for controlled substances
despite indications that patients were abusing and misusing the prescribed controlled
substances; (5) issuing prescriptions for controlled substances to patients despite knowing
that such patients had overdosed or had otherwise been hospitalized for conditions
relating to misuse of controlled substances; (6) continuing to prescribe controlled
substances in the same manner, and failing to adapt practices to prevent additional deaths
and overdoses, despite having notice that the treatment they were following had resulted
in obvious drug-seeking behavior and addiction, numerous patient overdoses, and patient
deaths; (7) signing death certificates in the absence of an autopsy or medical examination
for deceased patients to whom Gosy and/or his employees had prescribed controlled
substances despite aberrant behaviors; and (8) recommending a course of treatment,
including the prescribing of controlled substances, which caused the death of at least six
individuals, and contributed to the deaths of others.
Kickbacks
The following case example involves kickbacks:
Wisconsin—On January 11, 2021, AutoGenomics, Inc., entered into a settlement agreement
under which it agreed to pay $2,538,000 to resolve allegations that it violated the False
Claims Act and anti-kickback statute by engaging in a scheme to bill Medicare for
molecular genetic testing performed for nursing home patients that were induced by the
payment of remuneration, or “kickbacks,” for the referral of those genetic tests.
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Department of Health and Human Services, Office of Inspector General
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AutoGenomics, located in Carlsbad, California, formerly owned and operated a laboratory
doing business as PersonalizeDx Labs (collectively “AutoGenomics”). In April 2013 and
March 2015, AutoGenomics entered into agreements with a California-based health care
marketing company to utilize AutoGenomic’s laboratory services for tests ordered by the
health care marketing company’s clients. Pursuant to these agreements, AutoGenomics
paid the health care marketing company a specified monetary kickback for each test that
was reimbursed by Medicare, but only if Medicare paid the claim. Under these agreements,
the amount of the kickback was based on either a percentage or fixed amount of
Medicare’s reimbursement for each test.
Electronic Health Records
The following case example involves electronic health records (EHRs):
Massachusetts—On January 28, 2021, athenahealth, Inc. (Athena), a developer of EHR
services, agreed to pay $18.25 million to resolve allegations that it violated the False Claims
Act (by paying illegal kickbacks to generate sales of its EHR product, athenaClinicals. The
United States alleged that Athena violated the False Claims Act and the anti-kickback
statute through three marketing programs. First, Athena allegedly invited prospects and
customers to all-expenses-paid sporting, entertainment, and recreational events. The most
lavish of these events, such as “bucket list” trips to the Masters Tournament and the
Kentucky Derby, included complimentary travel along with luxury accommodations, meals,
and alcohol. Second, Athena allegedly paid illegal fees to its customers through its “Lead
Generation” program designed to identify new prospective customers. Under this
program, Athena paid up to $3,000 per physician who signed up for Athena services,
regardless of how much time (if any) the client spent speaking or meeting with the lead.
Finally, it is alleged that Athena entered into deals with competing companies that had
decided to discontinue their health IT products. Pursuant to those agreements, known as
“Conversion Deals,” the other companies agreed to refer their clients to Athena, and
Athena paid competitors based on the value and volume of practices that were successfully
converted into Athena customers. As a result of these kickbacks, it is alleged that Athena
improperly generated sales for itself while causing health care providers to submit false
claims to the Federal Government related to incentive payments for adoption and
“meaningful use” of Athena’s EHR technology.
Hospice
The following case example involves a hospice:
Texas—On February 3, 2021, Henry McInnis, the CEO of a Texas-based group of hospice
and home health entities, was sentenced to 15 years in prison for falsely telling thousands
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Department of Health and Human Services, Office of Inspector General
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of patients with long-term incurable diseases that they had less than 6 months to live, in
order to enroll the patients in hospice programs for which they were otherwise unqualified,
thereby increasing revenue to the company. In November 2019, McInnis was convicted by
a Federal jury in Brownsville, Texas, of one count each of conspiracy to commit health care
fraud, conspiracy to commit money laundering, and obstruction of justice; as well as six
counts of health care fraud. McInnis’s co-conspirator, Rodney Mesquias, 50, the owner of
the hospice and home health entities, was also convicted following the November 2019
trial. Mesquias was sentenced to 20 years in prison in December 2020. Two other co-
conspirators have pleaded guilty and are awaiting sentencing.
From 2009 to 2018, McInnis, Mesquias and others orchestrated a scheme that involved the
submission of over $150 million in false and fraudulent claims for hospice and other health
care services. McInnis served as the top corporate officer and administrator and oversaw
the day-to-day operations of the Merida Group, a large health care company that operated
dozens of locations throughout Texas. McInnis also oversaw and enforced a companywide
practice of falsifying medical records to conceal the scheme. Multiple witnesses testified
that McInnis ordered employees to alter medical records to make it appear that patients
were terminally ill, while in reality some patients were employed or even participating in
sporting events. As CEO, McInnis also adopted a policy that paid illegal kickbacks. They
directed bribes to physicians under the guise of medical director fees to certify unqualified
patients for hospice and home health. In some cases, they improperly offered payoffs to
marketers in exchange for recruitment of patients who could be placed on extremely
expensive hospice services.
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, 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 the following areas: Miami and
Tampa/Orlando, Florida; Dallas and Houston, Texas; McAllen/Rio Grande, Texas; Los Angeles, California;
Detroit, Michigan; Brooklyn, New York; The Gulf Coast (Baton Rouge and New Orleans, Louisiana; Southern
Mississippi); Chicago, Illinois; and Newark, New Jersey/Philadelphia, Pennsylvania; along with National
Rapid Response Strike Force located in Washington, DC. During this semiannual reporting period, Strike
Force efforts resulted in the filing of charges against 72 individuals or entities, 54 criminal actions, and
more than $207.0 million in investigative receivables.
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
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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 examples involve Strike Force cases:
Florida—On November 13, 2020, Tania Rodriguez was sentenced to 30 months in prison and 24
months of supervised release and Rafael Vidal was sentenced to 18 months in prison and 24
months of supervised release for their roles in submitting false and fraudulent claims to Medicare.
Rodriguez, the owner and operator of American United Pharmacy, and co-defendant Vidal were
ordered to pay $1,450,000 in restitution.
Rodriguez and Vidal participated in a conspiracy to use their company, American United Pharmacy
Corp. of Miami, to offer and pay kickbacks for the referral of Medicare beneficiaries to their
pharmacy, and to submit false and fraudulent claims to Medicare for prescription drugs that were
not provided to Medicare beneficiaries. As a result, Medicare paid American United Pharmacy
approximately $1,450,000 that it was not entitled to receive.
Florida—On October 30, 2020, Sebastian Ahmed was sentenced to 210 months in prison and
ordered to pay $4,231,288 in restitution following his conviction, after a 6-week jury trial, of
conspiracy to commit health care fraud and wire fraud, 5 counts of health care fraud, conspiracy to
commit money laundering, and 11 counts of money laundering. As part of the scheme, the
conspirators exploited vulnerable drug addicts; falsified paperwork; and entered into various
kickback arrangements, all to receive millions of dollars of falsely and fraudulently obtained funds
for their own personal use and benefit.
Ahmed was the CEO, president and CFO of the two substance abuse treatment centers: Jacob’s
Well and Medí MD; as well as a medical health clinic, Arnica Health, all of which he operated under
the umbrella of Serenity Treatment Center, Serenity Living, and “Serenity Ranch Recovery” in Davie,
Florida. Ahmed operated the three clinics from in or around June 2016 through May 2019. The
Government emphasized at trial that defendant (1) engaged in illegal billing to private insurance
plans through Jacob’s Well prior to the clinic being certified by the Department of Children and
Families (DCF) in February 9, 2017; (2) provided unlawful inducements to the approximately 500
patients consisting of free airline travel, housing, vapes, manicures, cash, and failure to collect
patient responsibilities for copayments and deductibles; and (3) billed for medically unnecessary
therapeutic services consisting of therapy and urine analyses, the former having not been provided
but billed by defendant’s substance abuse clinics. The patients were also permitted to reside in co-
ed housing in which destructive sexual relationships, not conducive to real addiction treatment,
formed—sometimes between the staff and patients, according to the testimony and evidence.
From June 2016 through May 2019, the Government attributed approximately $38 million in
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fraudulent billing submitted by Ahmed’s clinics, which resulted in the reimbursement of over
$6 million in payments.
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.
Fugitives List
The OIG Fugitives website has greatly assisted in helping to capture fugitives charged with defrauding
Federal health care programs and stealing millions of taxpayer dollars. The Fugitives website is continually
updated and features a profile for each fugitive, a Most Wanted List, 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 Fugitives list is available at https://oig.hhs.gov/fraud/fugitives/. During this
semiannual reporting period, no fugitives were captured.
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 $19,292,750 as a direct result of cases originating from hotline complaints.
OIG Hotline Activity (10/1/20–3/31/21)
Contacts to 1-800-HHS-TIPS phone line, including 55,541
callers seeking information
Total tips evaluated 18,262
Tips referred for action 9,732
Closed; no basis provided for further action 3,699
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Closed; no HHS violation 1 790
Sources of tips referred for action
Phone 3,553
OIG website 4,676
Letters or faxes 556
Other 947
Medicaid Fraud Control Units
OIG Oversight of Medicaid Fraud Control Units
MFCUs are key partners with OIG in the fight against fraud, waste, and abuse in State Medicaid
programs. OIG has oversight responsibility for MFCUs and administers grants that provide Federal
funding for their operations. Currently, all 50 States, the District of Columbia, Puerto Rico, and the
U.S. Virgin Islands operate MFCUs. The Federal Government reimburses 90 percent of a MFCU’s
total expenditures during the first 3 years of operation and 75 percent thereafter. MFCUs
investigate and prosecute Medicaid provider fraud as well as patient abuse and neglect in health
care facilities and board and care facilities.
1 Some of the closed complaints in this reporting period may have been evaluated or referred for action in a previous reporting
period.
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Medicaid Fraud Control Units Fiscal Year 2020 Annual Report (OEI-09-21-00120), March 2021
This annual report provides statistics that highlight the accomplishments of the 53 MFCUs during
FY 2020. MFCUs reported that the COVID-19 pandemic created significant challenges for MFCU
staff, operations, and court proceedings. However, MFCUs reported taking steps to mitigate the
effects of the pandemic and, despite challenges, continued to carry out their Medicaid program
integrity functions in FY 2020. MFCUs reported 1,017 convictions in FY 2020. Fraud cases
accounted for 76 percent of the MFCU convictions, while 24 percent involved patient abuse or
neglect. Approximately 47 percent of the 774 MFCU fraud convictions involved personal care
services attendants and agencies. MFCUs were responsible for 786 civil settlements and
judgments, 33 percent of which involved pharmaceutical manufacturers. MFCUs reported $1 billion
in criminal and civil recoveries. In an appendix to the report, OIG summarizes beneficial practices
identified by OIG in its reviews or inspections that may be useful to other MFCUs.
OIG Reviews and Inspections of MFCUs
In addition to an annual recertification review of each MFCU, OIG conducts reviews and inspections
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:
Illinois Medicaid Fraud Control Unit: 2019 Onsite Inspection (OEI-06-19-00510), March 2021
OIG Joint Casework With MFCUs
The following case example involves OIG’s joint efforts with MFCUs:
Missouri—On February 5, 2021, Denis Mikhlin was sentenced in Federal court to 108 months in
prison and was ordered to pay $181,665 in restitution. In August 2020, the 41-year-old resident of
St. Louis County, Missouri, pleaded guilty to four felony counts of conspiracy, obtaining oxycodone
and other opioid drugs by fraud and deceit, receiving illegal kickbacks in return for sending urine
specimens to Central Diagnostic Laboratory for medically unnecessary testing, and causing the
Medicare and Medicaid programs to pay $4,704,568 for medically unnecessary services. Mikhlin
conspired with Dr. Jerry Leech and others to issue and distribute illegal prescriptions for opioids
and other controlled substances to patients. Mikhlin and his co-conspirators knew the patients did
not have a legitimate medical need for drugs and instead were abusing the drugs or selling them.
Additionally, Mikhlin recruited individuals and paid them for the use of their names on the
fraudulent prescriptions. Once the prescriptions were filled, some of the drugs were returned to
Mikhlin and the rest were kept by the individuals or sold to others. To conceal this illegal activity,
Mikhlin and others created patient files, falsely indicating the patients had been examined by the
prescribing doctors and were regularly monitored and tested. OIG investigated this case with the
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FBI, Missouri Medicaid Fraud Control Unit, Missouri Attorney’s General Office, and the Department
of Defense.
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
19 requests for advisory opinions and issued 5 advisory opinions.
Sanction Authorities and Other Administrative Actions
Various Federal laws provide authorities the ability to impose administrative sanctions for fraud and abuse
as well as other activities that pose a risk to Federal health care programs and their beneficiaries.
Sanctions include the exclusion of individuals and entities from Federal health care programs and the
imposition of CMPs for submitting false and fraudulent claims to a Federal health care program or for
violating the anti-kickback statute, the physician self-referral law (commonly referred to as the “Stark Law”),
or the Emergency Medical Treatment and Labor Act (EMTALA), also known as the “patient dumping
statute.” Sanctions also include referrals for suspension and debarment in cases of grant and contract
fraud.
During this semiannual reporting period, OIG imposed 1,086 administrative sanctions in the form of
program exclusions or administrative actions for alleged fraud or abuse or other activities that posed a risk
to Federal health care programs and their beneficiaries.
Exclusion and penalty authorities are described in Appendix C and on our website at
http://oig.hhs.gov/fraud/enforcement/cmp/index.asp.
Program Exclusions
During this semiannual reporting period, OIG excluded 1,036 individuals and entities from
Medicare, Medicaid, and other Federal health care programs. Most of the exclusions resulted from
convictions for crimes relating to Medicare or Medicaid, patient abuse or neglect, financial
misconduct, controlled substances, or as a result of license revocation. OIG completed the
deployment of a new service for MFCUs to report convictions through a central web-based portal
for exclusions. OIG is also responsible for reinstating providers who apply and have met the
requirements of their exclusions. For a list of excluded individuals and entities, see
https://exclusions.oig.hhs.gov/.
The following are case examples of program exclusions:
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Texas—Anthony Mamboleo Nyakeo (Nyakeo), a certified nurse aide (CNA), was excluded
under Section 1128(a)(4) for a minimum period of 75 years based on his conviction of two
counts of aggravated sexual assault of an elderly or disabled person. While employed as a
CNA of a licensed nursing home facility, Nyakeo sexually assaulted one of his patients. The
victim suffered from dementia, was disabled, nonverbal, incontinent, and unable to feed
herself, move on her own, or vocalize. The victim suffered significant injuries from the
assault that required medical intervention and surgical repair. The Court sentenced Nyakeo
to life imprisonment and ordered him to register as a sex offender.
Massachusetts—Insys Pharma, Inc. (Insys Pharma) is a pharmaceutical company that
developed and owns a liquid formulation of fentanyl called Subsys. HHS-OIG excluded
Insys Pharma for a minimum period of 5 years due to its conviction of five counts of Mail
Fraud in the United States District Court for the District of Massachusetts. Beginning in
August 2012 and continuing until June 2015, Insys paid bribes and kickbacks to certain
practitioners as part of a scheme to defraud patients and insurers, including Medicare.
Insys disguised the bribes and kickbacks as honoraria purportedly given for the
practitioners’ participation in the Insys Speaker Program (ISP). Participants in the ISP were
rewarded with lucrative speaking opportunities based on the volume of Subsys
prescriptions that they wrote and were removed from the program if they failed to
prescribe a sufficient volume of Subsys. ISP events were often social gatherings at high-
priced restaurants that involved no education or presentation about the drug. Often the
events had no attendees at all, and Insys sales representatives were instructed by
management to falsify the names of ISP attendees on sign-in sheets. The Court sentenced
Insys to pay a criminal monetary penalty of $2 million and to surrender $28 million in
forfeiture.
The following subjects were also excluded for convictions related to the Insys Pharma
scheme:
Massachusetts—John N. Kapoor (Kapoor) was excluded for a minimum period of 58 years
based on his conviction of Racketeering Conspiracy by the United States District Court for
the District of Massachusetts. Kapoor was the founder, owner, and sole investor of the
parent company of Insys Pharma, Insys Therapeutics, Inc. (Insys). Kapoor also held
executive management positions at Insys, including executive chairman of the board of
directors and chief executive officer. From approximately May 2012 to December 2015,
Kapoor directed, approved, and participated in the scheme to bribe and pay kickbacks to
targeted medical practitioners and increase Subsys sales through fraud. Kapoor directed
his co-conspirators to closely monitor ISP participating practitioners for “return on
investment” by comparing the amount of speaker honoraria paid to each individual
speaker versus the net revenue generated by the speaker. Kapoor also pressured Insys
employees to mislead insurers to obtain payment authorization for illegal Subsys
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prescriptions. The Court sentenced Kapoor to 66 months of incarceration and ordered him
to pay $59,755,362.45 in restitution.
Massachusetts—Michael L. Babich (Babich), who held executive management positions
including vice president and CEO of Insys, was excluded for a minimum period of 50 years
due to his conviction for conspiracy and wire fraud. From approximately May 2012 to
December 2015, Babich conspired with other high-level officials at Insys to increase profits
in connection with the sale of Subsys by providing kickbacks and bribes to medical
practitioners. By paying and concealing the kickbacks and bribes, Babich fraudulently
caused insurers, including Medicare and Medicaid, to pay for prescriptions and dosage
increases that the insurers otherwise would not have agreed to pay. The Court sentenced
Babich to 30 months of incarceration and ordered him to pay $59,755,362.45 in restitution.
Massachusetts—Alec Burlakoff (Burlakoff) held executive management positions including
regional sales manager for the Southeast Region and Vice President of Sales for Insys
Therapeutics, Inc. (Insys). OIG excluded Burlakoff for a minimum period of 50 years due to
his conviction of racketeering conspiracy. From approximately May 2012 to December
2015, Burlakoff played a key role in implementing the scheme whereby Insys would pay
bribes and kickbacks to increase sales of Subsys. Burlakoff closely monitored the amount
of Subsys being prescribed by each practitioner, and intentionally chose to bribe
practitioners known to abusively prescribe opioid medication. Burlakoff also pressured his
sales staff to advocate for higher doses of Subsys. The Court sentenced Burlakoff to 26
months of imprisonment and ordered him to pay $59,755,362.45 in restitution.
Suspensions and Debarments
Suspensions and debarments are administrative tools used by HHS and other Federal agencies to
protect the Government from individuals and entities who 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 who have potentially engaged in grant or contract fraud or
misconduct to the HHS Suspension and Debarment Official, who is responsible for determining
whether to impose a suspension or debarment. OIG continues to develop a robust Suspension
and Debarment program and uses this tool to protect Government programs against fraud, waste,
poor performance, and noncompliance with contract provisions or applicable law.
The following case example involves debarment:
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Nebraska—Tillie Aldrich, a general member of the Tribal Council of the Omaha Tribe of
Nebraska, directly and indirectly misrepresented the level of her involvement in the
preparation of the claims submitted to IHS for unpaid contract support. Aldrich made a
proposal to the Tribal Council for authorization of unreasonable bonus or incentive
payments in which the proposal also include unreasonable bonus or incentive payment
amounts to be paid to members of the Tribal Council and others to induce the Tribal
Council to approve the proposal. Aldrich also caused checks to be prepared and issued in-
house from the Carl T. Curtis Health Education Center account without going through the
normal review and issuance procedure the Omaha Tribe had established with Bland and
Associates. As a result, Aldrich pleaded guilty and received 5 years of probation and was
ordered to pay $13,404.44 in restitution.
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
$32 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:
Texas—William Rosellini, Nexeon Medsystems, Inc., Pulsus Medical, LLC, and Nexeon
Medsystems Puerto Rico Operating Company, Inc. (collectively, “Nexeon”), entered into a
settlement agreement with OIG in which they agreed to pay $50,000 and be excluded from
participation in all Federal health care programs for 5 years under 42 U.S.C. 1320a-7a and
42 U.S.C. 1320a-7(b)(7). The settlement agreement resolves allegations that Nexeon drew
down funds from the HHS Payment Management System from NIH Small Business
Innovation Research (SBIR) awards that were: (1) sent to an overseas affiliate without NIH
approval, in violation of NIH SBIR requirements; (2) based on quotes and other potential
costs that were never incurred; (3) commingled among various affiliates and used for
unallowable costs unrelated to the NIH SBIR awards; and (4) not supported by adequate
documentation to ensure that the funds were used for allowable costs in accordance with
the terms and conditions of the awards. Simultaneous to the execution of the settlement
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agreement, Nexeon entered into a Voluntary Debarment Agreement with the HHS
Suspension and Debarment Official in which they agreed to accept 5-year debarments
from participation in covered transactions.
Texas—Miguel Angel Molinas, M.D., and Miguel Angel Molinas, M.D., P.A (collectively,
“Molinas”), entered into a settlement agreement with OIG in which they paid $185,410.68 to
resolve allegations that Molinas billed Medicare for specified Current Procedural
Terminology (CPT) codes while Dr. Molinas neither performed nor supervised the services
himself.
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:
North Carolina—Frye Regional Medical Center (FRMC) entered into a $100,000 settlement
agreement with OIG. The settlement resolved allegations based on the following facts: on
January 10, 2016, B.R. came to FRMC’s emergency department complaining of chest pain,
nausea, vomiting, and diarrhea. FRMC failed to perform an adequate screening exam, and
B.R. waited 3 hours and 44 minutes in the waiting room while his symptoms worsened, with
no treatment. B.R. left FRMC and went to another hospital. The second hospital diagnosed
him with triple vessel disease, performed an emergency heart catheterization, and sent him
back to FRMC for an urgent triple coronary bypass surgery. FRMC paid $100,000, the
maximum penalty, to resolve these allegations.
Self-Disclosure Programs
Health care providers, suppliers, or other individuals or entities subject to CMPs can apply for
acceptance into the Provider Self-Disclosure Protocol, a program created in 1998 for voluntary
disclosure of self-discovered evidence of potential fraud. The self-disclosure program may give
providers the opportunity to avoid costs or disruptions associated with Government-directed
investigations and civil or administrative litigation.
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
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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 $59.3 million in HHS receivables.
The following case examples pertain to provider self-disclosure settlements:
Massachusetts—After it self-disclosed conduct to OIG, Steward Holy Family Hospital, Inc.
(Steward) paid $6,952,847 for allegedly violating the CMPL. OIG alleged that Steward failed
to maintain physician certifications, recertifications, and treatment plans for inpatient
psychiatry services in violation of Medicare billing requirements. Steward retained a third-
party contractor who was responsible for managing Steward’s inpatient psychiatric unit
including maintaining proper medical records for the patients in the unit.
Virginia—After it self-disclosed conduct to OIG, Virginia Hospital Center Arlington Health
System d/b/a Virginia Hospital Center (VHC), Virginia, paid $6,050,628 for allegedly
violating the CMPL, specifically, provisions of the CMPL applicable to physician self-referrals
and kickbacks. OIG alleged that VHC paid remuneration to two medical groups in the form
of office space, office staff, and services rendered under call coverage arrangements.
Corporate Integrity Agreements
Many health care providers elect to settle their cases before litigation. As part of the settlements,
providers often agree to enter into CIAs with OIG to avoid exclusions from Medicare, Medicaid,
and other Federal health care programs. Under a CIA, a provider commits to establishing a
program and taking other specified steps to ensure future compliance with Medicare and Medicaid
rules. The compliance programs are designed, in part, to prevent future fraud. OIG monitors
providers’ compliance with these agreements and may impose penalties on entities that fail to
comply with the requirements of their CIAs.
The following case example involves CIA enforcement:
Tennessee—Effective January 20, 2021, OIG excluded Grace and Theophilus Egbujor
(collectively, “the Egbujors”), for a period of 5 years based on a material breach of their CIA.
On August 4, 2020, OIG issued a Notice of Material Breach and Intent to Exclude letter to
the Egbujors after their failure to abide by a Departmental Appeals Board decision
affirming the Administrative Law Judge’s order that they pay $1,322,500 in stipulated
penalties assessed under their CIA. The stipulated penalties were assessed as a result of
their failure to repay overpayments identified by the independent review organization in
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the second and third CIA annual reports. The Egbujors failed to respond to OIG’s Notice of
Material Breach and Intent to Exclude and did not appeal the subsequent OIG Notice of
Exclusion. The exclusions went into effect on January 20, 2021.
Public Health and Human Service Agency
Reports and Reviews
Public Health Agency Reports and Reviews
Hospitals Reported That the COVID-19 Pandemic Has Significantly Strained Health Care Delivery:
Results of a National Pulse Survey February 22–26, 2021 (OEI-09-21-00410), March 2021
In February 2021, hospitals reported that operating in “survival mode” for an extended period of
time has created new and different problems than experienced earlier in the pandemic and
exacerbated longstanding challenges in health care delivery, access, and health outcomes.
Hospital administrators described difficulty balancing the complex and resource-intensive care
needed for COVID-19 patients with efforts to resume routine hospital care. They reported that
staffing shortages have affected patient care, and that exhaustion and trauma have taken a toll on
staff’s mental health. Administrators detailed challenges associated with vaccine distribution efforts
and concerns about vaccine hesitancy among staff and members of their communities.
Additionally, many hospitals reported experiencing financial instability because of increased
expenses associated with responding to a pandemic and lower revenues from decreased use of
other hospital services. Hospitals indicated that many of the challenges were more severe for rural
hospitals. Hospitals reported a range of strategies to address their challenges, and identified areas
in which further government support could help as they continue responding to the pandemic.
Beyond the immediate needs in responding to COVID-19, the pulse survey reveals longer-term
opportunities for improvement to address challenges that existed before, and were exacerbated
by, the pandemic.
Centers for Disease Control and Prevention
Although CDC Implemented Corrective Actions To Improve Oversight of the President’s Emergency
Plan for AIDS Relief Recipients, Some Internal Control Weaknesses Remained (A-04-18-01010),
December 2020
Our analysis of 21 prior audit reports on PEPFAR recipients identified the following trends in which
recipients: (1) had either inadequate or no policies and procedures related to management of
PEPFAR funds (19 of 21 reports), (2) did not comply or may not have complied with HHS
regulations regarding value-added tax (18 of 21 reports), (3) had transactions that were either not
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supported (16 of 21 reports) or unallowable (15 of 21 reports), (4) did not accurately report PEPFAR
expenditures on the financial reports or did not file reports on time (11 of 21 reports), (5) did not
have annual audits performed or submitted on time (9 of 21 reports), and (6) could not reconcile
PEPFAR expenditures to amounts reported on their financial reports (7 of 21 reports).
In response to the six trends identified in our prior audits, CDC took action to improve its oversight
of PEPFAR recipients. Finally, CDC had two internal control weaknesses in its post-award oversight
that it did not adequately address in its in-country office Standard Operating Procedures (SOPs).
CDC officials concurred with our recommendations that CDC implement requirements for CDC in-
country offices to have SOPs for Cooperative Agreement (CoAg) management and periodically
review and update CDC in-country office SOPs for CoAg management.
Independent Attestation Review: Centers for Disease Control and Prevention Fiscal Year 2020
Detailed Accounting Report, Performance Summary Report for National Drug Control Activities,
Budget Formulation Compliance Report, and Accompanying Required Assertions (A-03-21-00355),
January 2021
Based on our review, we are not aware of any material modifications that should be made to CDC’s
Detailed Accounting Report and Performance Summary Report for FY 2020 and CDC’s Budget
Formulation Compliance Report for FY 2022 for them to be in accordance with the Office of
National Drug Control Policy (ONDCP) Compliance Reviews Circular.
Indian Health Service
Few Patients Received High Amounts of Opioids from IHS-Run Pharmacies (OEI-05-18-00470),
December 2020
Data show that few patients received high amounts of opioids from IHS-run pharmacies, and that
IHS reported positive outcomes from opioid-related initiatives. However, IHS has opportunities to
improve the efficiency of its opioid monitoring systems and IHS staff reported challenges in using
State-run PDMPs and in tracking care outside of IHS. Our findings recognize IHS’s efforts to
address the opioid crisis. Our recommendations aim to enhance the efficiency of IHS’s monitoring
and reducing the challenges that staff reported in using State-run PDMPs effectively. IHS
concurred with our recommendations, which included:
• Assess the costs and benefits of updating its EHR system with tools to support more
automated monitoring.
• Request support from States and Federal partners to address challenges with State-run
PDMPs.
Incidence of Adverse Events in Indian Health Service Hospitals (OEI-06-17-00530), December 2020
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An estimated 13 percent of patients in IHS hospitals experienced adverse events and temporary
harm events during stays in FY 2017, with higher rates of harm in smaller hospitals. Adverse events
and temporary harm events indicate that a patient’s care resulted in an undesirable clinical
outcome not caused by underlying disease. Within our sample, harm events were more prevalent
among older adults and labor and delivery patients, and about half of events were preventable.
IHS concurred with all three of our recommendations, which are:
• Establish patient harm monitoring and reduction as a key priority of the Office of Quality.
• Effectively track and monitor patient harm events using an improved incident reporting
system.
• Implement quality improvement plans to improve patient safety across IHS, including plans
that focus specifically on smaller hospitals and patient groups at higher risk of harm.
Indian Health Service Facilities Made Progress Incorporating Patient Protection Policies, but
Challenges Remain (OEI-06-19-00331), December 2020
In recent years, IHS had cases of health care providers abusing patients under facility care,
including a pediatrician who was convicted of multiple counts of child sexual abuse. In early 2019,
IHS updated its policies to prevent and address child sexual abuse by providers. In December
2019, OIG issued its first report in a two-part series examining IHS patient protection policies. The
first report found that IHS had strengthened its patient protection policies, but there were gaps in
coverage and IHS facilities were still early in implementation. This is the second report in that
series, which found that most facilities had fully incorporated the agencywide requirements into
their local policies but faced challenges in carrying out the policies and reported remaining barriers
that may deter staff and patients from reporting patient abuse. IHS concurred with our
recommendations, which are:
• Provide additional guidance and training to facilities on patient protection policies,
including the role of law enforcement and the reporting process related to patient abuse.
• Improve the process and timeliness for conducting staff background investigations and
notifying facilities when staff are approved.
• Examine and revise, as needed, the reporting structure in the policies and the incident
reporting system to ensure that staff and patients can report abuse anonymously.
• Establish and enforce a deadline by which all facilities must fully incorporate the new
requirements into their policies and procedures, and actively monitor facility adherence.
Instances of IHS Labor and Delivery Care Not Following National Clinical Guidelines or Best Practices
(OEI-06-19-00190), December 2020
About half of the labor and delivery patients (27 of 48) included in our review of maternal care
provided in IHS hospitals received care that did not follow national clinical guidelines (13 patients),
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did not use best practices for blood loss estimation (8 patients), or included both concerns
(6 patients) during their stays at IHS hospitals. IHS is taking steps to further improve the care
provided to labor and delivery patients, and we believe this report provides the agency with
information that will assist in this effort. IHS concurred with all three of our recommendations,
which are:
• Assess IHS’s labor and delivery practices and consider practice improvements based on the
findings of this assessment.
• Take steps to ensure that IHS providers employ best practices in diagnosing and treating
postpartum hemorrhage.
• Encourage and support greater adoption of the Alliance for Innovation on Maternal
Health’s “bundles” of maternal-safety best practices.
Independent Attestation Review: Indian Health Service Fiscal Year 2020 Detailed Accounting Report,
Performance Summary Report for National Drug Control Activities, Budget Formulation
Compliance Report, and Accompanying Required Assertions (A-03-21-00351), January 2021
Based on our review, we are not aware of any material modifications that should be made to IHS’s
Detailed Accounting Report and Performance Summary Report for FY 2020 and IHS’s Budget
Formulation Compliance Report for FY 2022 for them to be in accordance with the ONDCP
Compliance Reviews Circular.
Although the Bemidji Area Office Had Adequate Procedures To Disburse Indian Health Service
Funds, It Needs To Strengthen Its Procedures for Monitoring the Use of the Funds
(A-05-18-00019), February 2021
IHS’s Bemidji Area Office (BAO) generally had adequate procedures to disburse IHS funds to
programs. However, BAO’s procedures for monitoring the use of funds did not include: (1) routine
reconciliations of amounts reported in the Uniform Financial Management System (UFMS) with
amounts recorded in supporting documents, (2) monitoring and evaluating IHS Direct programs’
use of no-year Health Service funds carried forward by appropriation year and budget activity
programs, and (3) evaluating IHS Direct programs’ use of current no-year Health Service funds.
IHS concurred with our recommendations that BAO establish procedures to: (1) reconcile IHS funds
recorded in the UFMS on a regular schedule with amounts reported in supporting documents, such
as worksheets and funding agreements; (2) monitor and evaluate IHS Direct programs’ use of no-
year Health Services funds carried forward by appropriation year and budget activity program; and
(3) evaluate IHS Direct programs’ use of current no-year Health Services funds.
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National Institutes of Health
The National Institutes of Health Administered Superfund Appropriations During Fiscal Year 2019 in
Accordance With Federal Requirements (A-04-20-04077), December 2020
During FY 2019, NIH administered Superfund appropriations in accordance with applicable Federal
requirements. Specifically, NIH obligated and disbursed Superfund appropriations in accordance
with Federal requirements and in similar proportions to prior years. In addition, the Institute’s
monitoring of Superfund grants generally ensured that grantees met requirements for financial,
performance, and audit reporting. This report contains no recommendations.
Independent Attestation Review: National Institutes of Health Fiscal Year 2020 Detailed Accounting
Report, Performance Summary Report for National Drug Control Activities, Budget Formulation
Compliance Report, and Accompanying Required Assertions (A-03-21-00352), January 2021
Based on our review, we are not aware of any material modifications that should be made to NIH’s
Detailed Accounting Reports and Performance Summary Report for FY 2020 and NIH’s Budget
Formulation Compliance Reports for FY 2022 for them to be in accordance with the ONDCP
Circular.
Human Services Agency Reports and Reviews
Administration for Children and Families
Office of Refugee Resettlement Ensured That Selected Care Providers Were Prepared To
Respond to the COVID-19 Pandemic (A-04-20-02031), November 2020
The Office of Refugee Resettlement (ORR) ensured that the 11 facilities we selected for review
followed ORR requirements in preparing for and responding to communicable diseases and were
prepared to respond to the COVID-19 pandemic. Specifically, ORR provided detailed COVID-19-
response guidance, encouraged telehealth visits, and updated the Unaccompanied Alien Children
(UAC) Portal.
The 11 selected facilities that we reviewed were generally prepared to respond to an emergency
event, such as the COVID-19 pandemic, in accordance with Federal guidance. Specifically, they had
policies and procedures, the capability to quarantine COVID-19 cases in their facilities, and
adequate personal protective equipment.
ORR officials stated that, since 2006, ORR has had a policy in place that required its facilities to
prepare for and respond to a communicable disease outbreak; therefore, the facilities were
generally able to quickly pivot to respond to the COVID-19 pandemic. This report contains no
recommendations.
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Department of Health and Human Services, Office of Inspector General
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The Office of Refugee Resettlement Did Not Award and Manage the Homestead Influx Care Facility
Contracts in Accordance With Federal Requirements (A-12-20-20001), December 2020
ORR did not award a $341 million sole source contract to Comprehensive Health Service, LLC
(CHS), in accordance with Federal regulations and did not effectively manage its HHS contracts for
services provided at Homestead in accordance with Federal statutes, regulations, and HHS policies
and procedures. Because ORR did not follow Federal regulations or effectively manage its
contracts for services provided at Homestead, it: (1) did not receive the benefit of a full and open
competition, such as potentially receiving higher quality services or services at a lower cost when it
awarded a sole-source letter contract to CHS; (2) paid approximately $67 million to operate
Homestead fully staffed and equipped for nearly 3 months after the last child left Homestead; (3)
increased the risk of approving invoices that were incorrect or for services not performed; and (4)
made approximately $2.6 million in overpayments to CHS.
ACF, commenting on behalf of ORR, generally agreed with our recommendations that it: (1)
develop plans for upcoming service needs by using all available data and indicators to ensure that
it adheres to Federal requirements and (2) recoup the $2,581,157 overpayment of fixed fees from
CHS. We also made several other recommendations related to establishing policies and
procedures to better protect Federal funds and manage its contracts in accordance with Federal
statutes, regulations, and HHS policies and procedures.
Virginia’s Monitoring Did Not Ensure Child Care Provider Compliance With State Criminal
Background Check Requirements at 8 of 30 Providers Reviewed (A-03-19-00253), February 2021
Virginia’s monitoring process ensured provider compliance with State requirements related to
criminal background checks at 22 of the 30 child care provider locations we reviewed but did not
ensure provider compliance at the remaining 8 locations. In total, we found that 15 of the 377
household members and employees reviewed did not have a current and completed background
check. By not ensuring that all child care staff members who supervised or had routine
unsupervised contact with children had complete criminal background checks, Virginia potentially
jeopardized the safety of children in its care.
Virginia concurred with our recommendations that it: (1) conduct all required criminal background
checks for the 15 individuals in our sample who did not have the required checks at the time of our
review; (2) revise State guidelines to specify that inspectors should use verified information, such as
payroll data, from each child day center to determine which employees’ criminal background
checks must be reviewed; (3) revise State guidelines to increase the number of current employees
that inspectors review at all child day centers to ensure provider compliance with criminal
background check requirements; and (4) provide periodic training to providers to ensure they
request required background checks.
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Department of Health and Human Services, Office of Inspector General
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ACF Cannot Ensure That All Child Victims of Abuse and Neglect Have Court Representation
(OEI-12-16-00120), March 2021
Our findings demonstrate that ACF is neither supporting States in implementing CAPTA’s
requirement for court representatives for child victims of abuse and neglect, nor is ACF monitoring
States’ compliance with the requirement. As a result, ACF cannot ensure that all such victims have
court representation to protect their best interests.
We recommend that ACF conduct oversight activities—seeking statutory authority as necessary—
to identify, and proactively provide technical assistance to, States that may not appoint a court
representative to every child victim. We also recommend that ACF proactively identify and address
obstacles that States face in reporting complete and accurate data on court representatives. ACF
did not explicitly concur or nonconcur with our recommendations. However, ACF asserted a lack
of statutory authority to implement our recommendations and stated that our recommended
approach is inconsistent with the structure of the CAPTA State grant program.
Health Resources and Services Administration
In Selected States, 67 of 100 Health Centers Did Not Use Their HRSA Access Increases in Mental
Health and Substance Abuse Services Grant Funding in Accordance With Federal Requirements
(A-02-19-02001), November 2020
Most health centers in the 30 States did not use their AIMS grant funding in accordance with
Federal requirements and grant terms. In addition, HRSA did not effectively monitor health
centers’ progress toward meeting service expansion requirements and did not ensure that health
centers spent their AIMS grant funds in accordance with grant requirements.
On the basis of our sample results, we estimated that 454 of 665 health centers did not use their
AIMS grant funding in accordance with Federal requirements and grant terms. We also estimated
that 125 health centers did not increase the total number of mental health and substance use
disorder services patients, and that 99 health centers did not hire new staff or increase hours of
existing staff within 120 days of their AIMS grant award. As a result, patients may not have received
the services. In addition, we estimated that the health centers charged unallowable costs totaling
nearly $6 million and improperly allocated costs totaling $10.9 million to their AIMS grants that
could have been spent on AIMS-related purposes.
We made a series of recommendations to HRSA, including that it improve its monitoring of how
health centers meet targets for future grant funding opportunities and charge expenditures to their
HRSA grants. We also recommended that HRSA require the health centers to refund unallowable
and improperly allocated costs to the Federal Government. HRSA generally concurred with our
recommendations.
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Drug Control Activities, Budget Formulation Compliance Report, and Accompanying Required
Assertions (A-03-21-00354), January 2021
Our review identified that HRSA incorrectly asserted that its reported drug obligations were only
actual obligations. This resulted in a deviation from the ONDCP Compliance Reviews Circular.
Based on our review, except for this matter, we are not aware of any other material modifications
that should be made to HRSA’s Detailed Accounting Report and Performance Summary Report for
FY 2020 and HRSA’s Budget Formulation Compliance Report for FY 2022 for them to be in
accordance with the ONDCP Compliance Reviews Circular.
Substance Abuse and Mental Health Services Administration
Opioid Treatment Programs Reported Challenges Encountered During the COVID-19 Pandemic and
Actions Taken To Address Them (A-09-20-01001), November 2020
OTPs reported a variety of: (1) challenges they have encountered during the COVID-19 pandemic
and (2) actions they have taken to address those challenges while ensuring the continuity of
needed services and protecting the health and safety of their patients and staff.
The information in this report was gathered to support HHS’s goal of reducing opioid morbidity
and mortality and to help the Substance Abuse and Mental Health Services Administration
(SAMHSA) by providing information on the impact that the COVID-19 pandemic has had on OTPs.
This information was current when we conducted our interviews but may not represent all the
challenges that OTPs have faced or the actions they have taken to address those challenges. We
recognize that SAMHSA has taken actions to support OTPs as they work on the front lines to treat
people diagnosed with opioid use disorders and to ensure the safety of the health care workforce.
The information in this report provides SAMHSA and other decisionmakers (e.g., State and Tribal
officials and other Federal agencies) with a national snapshot of OTPs’ challenges and the actions
they have taken to continue providing services during the pandemic.
SAMHSA described actions that it had taken after becoming aware of COVID-19’s impact on
operations for its behavioral health stakeholders, such as providing technical assistance and
training during the pandemic.
New York Provided Projects for Assistance in Transition From Homelessness Grant Services to
Ineligible Individuals and Did Not Contribute Any Required Non-Federal Funds (A-02-19-02006),
December 2020
New York did not always comply with Projects for Assistance in Transition From Homelessness
(PATH) program requirements. Specifically, 7 of the 50 consumers we sampled lived in permanent
housing settings, and documentation in their case files did not indicate that they continued to need
PATH services to prevent a recurrence of homelessness. In addition, New York did not meet its
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funding obligation for non-Federal contributions to its PATH program and did not have written
agreements with PATH providers, as required. Also, New York inaccurately reported the number of
consumers enrolled in its PATH program and did not timely file its financial report to SAMHSA.
Finally, New York had not performed the financial closeout of its PATH program and did not verify
that funds were appropriately used by providers or that unused funds were returned to the Federal
Government.
On the basis of our sample results, we estimated that 578 consumers (14 percent) were ineligible to
receive PATH program services. Also, New York did not meet its funding obligation for non-
Federal contributions, which resulted in the entire grant amount of $4.2 million being unallowable.
New York disagreed with our recommendation that it refund the entire grant amount, totaling $4.2
million, to the Federal Government. New York agreed with our procedural recommendations,
including that New York ensure that PATH program services are only provided to eligible
consumers.
Ohio Made Progress Toward Achieving Program Goals for Enhancing Its Prescription Drug
Monitoring Program (A-05-18-00004), December 2020
We identified actions that Ohio has taken, using Federal funds for improving PDMPs, to achieve
program goals of improving safe prescribing practices and preventing prescription drug abuse and
misuse as of August 2019. Ohio also complied with Federal requirements for submitting its Federal
Financial Report and Annual Performance Report and publicly reported the five CDC-directed
indicators.
The Ohio Department of Health made improvements in its PDMP related to two required strategies
of CDC’s "Prescription Drug Overdose: Prevention for States" (PfS) program: (1) enhance and
maximize a State PDMP and (2) implement community or insurer health system interventions
aimed at preventing prescription drug overdose and abuse. It also made improvements in its
PDMP related to the two optional PfS program strategies: (1) conduct policy evaluations to reduce
prescription drug overdose morbidity and mortality and (2) develop and implement Rapid
Response Projects.
Further, Ohio improved access and strengthened the State’s PDMP using Substance Abuse and
Mental Health Services Administration grant funding. Ohio’s Board of Pharmacy (BoP) improved
real-time access to PDMP data by integrating Ohio’s PDMP with existing technologies such as
EHRs to improve the ability of Ohio’s PDMP to reduce the nature, scope, and extent of prescription
drug abuse. BoP also strengthened Ohio’s PDMP by providing resources to make the changes
necessary to increase interoperability with other States’ PDMPs.
Additionally, Ohio used the grant funds that we reviewed in accordance with Federal regulations.
Therefore, we are making no recommendations.
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Choctaw Nation of Oklahoma Made Progress Toward Meeting Program Goals During the First
Year of Its Tribal Opioid Response Grant (A-07-20-04121), January 2021
The Choctaw Nation met some program goals for its Tribal Opioid Response (TOR) grant during
the first grant year. Specifically, the Choctaw Nation met program goals in the areas of prevention
and recovery. The Choctaw Nation also made progress toward meeting treatment program goals
but encountered some challenges that prevented it from increasing the availability of MAT services
for Tribal members within its health care system. The Choctaw Nation was unable to achieve one
of its goals during the first grant year: to send a provider to a 12-month addiction and pain
management fellowship to obtain credentialing as an Addiction Medicine Specialist. Although the
Choctaw Nation was unable to establish MAT services by enrolling a provider in this addiction and
pain management fellowship, the Tribe instead sent some of its current providers to become MAT
waiver trained.
The Choctaw Nation generally complied with Federal cost principles when administering its TOR
grant. However, during the first grant year the Choctaw Nation claimed a cost of $2,405 to the
TOR grant that was unallowable.
The Choctaw Nation did not directly agree or disagree with our recommendations, including that it
refund unallowable costs of $2,405 to the TOR grant. We also made procedural recommendations
to the Choctaw Nation to train staff to identify contract costs that are allowable under Federal
regulations and strengthen or establish policies and procedures regarding Tribal departmental
responsibilities and staff access to contractual agreements.
Independent Attestation Review: Substance Abuse and Mental Health Services Administration
Fiscal Year 2020 Detailed Accounting Report, Performance Summary Report for National Drug
Control Activities, Budget Formulation Compliance Report, and Accompanying Required
Assertions (A-03-21-00353), January 2021
Based on our review, we are not aware of any material modifications that should be made to
SAMHSA’s Detailed Accounting Report and Performance Summary Report for FY 2020 and
SAMHSA’s Budget Formulation Compliance Report for FY 2022 for them to be in accordance with
the ONDCP Compliance Review Circular.
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Department of Health and Human Services, Office of Inspector General
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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, the 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 and PSC is not pursuing any settlement
agreements 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 no criminal actions and court-ordered restitution and settlements.
Engaging the Public in Capturing Deadbeat Parents
Because of the success of OIG’s Most Wanted Fugitives List, OIG launched its Most Wanted
Deadbeat Parents website. The site identifies parents who fail to pay court-ordered child support
for their children and thereby put an unnecessary strain on the custodial parents and the children
as well as on agencies that enforce these matters. The site, which is updated frequently, includes
information on OIG’s role in pursuing parents who fail to pay court-ordered child support. OIG’s
Most Wanted Deadbeat Parents website can be found at https://oig.hhs.gov/fraud/child-support-
enforcement/index.asp.
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Department of Health and Human Services, Office of Inspector General
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Other HHS-Related Reviews and Investigative
Activities
General Departmental
HHS Made Some Progress Toward Compliance With the Geospatial Data Act (A-18-20-11500),
October 2020
HHS made some progress to comply with the GDA, but we identified certain covered agency
responsibilities that HHS had yet to meet. Additionally, HHS had not maintained a
departmentwide inventory of all geospatial data assets, as required by GDA section 759(b), and
had not designated a senior agency official for geospatial information (SAOGI) in accordance with
OMB guidance to Federal agencies.
These conditions occurred because of the lack of departmentwide oversight and coordination in
HHS’s implementation of geospatial-related responsibilities, requirements, policies, and activities.
Additionally, the Department’s senior agency officials were not aware of the GDA and HHS’s
responsibilities mandated by the GDA. These conditions contributed to HHS’s noncompliance with
the covered agency responsibilities established in the GDA.
As a result, HHS is susceptible to inefficient and ineffective management of geospatial assets, which
increases the risk of inconsistent efforts or inability to minimize the costs to acquire, manage,
share, and use geospatial data, expertise, technology, and services.
We recommended that HHS ensure that HHS and its components fully implement the covered
agency’s responsibilities found in GDA section 759(a), maintain an inventory of all geospatial data
assets, and appoint an SAOGI. HHS did not concur or nonconcur with our recommendations.
However, HHS indicated that it will take action to ensure compliance with the covered agency
responsibilities established by the GDA.
Financial Statement Audit of the Department of Health and Human Services for Fiscal Year 2020
(A-17-20-00001), November 2020
Based on its audit, Ernst & Young found that the FY 2020 HHS consolidated balance sheets and the
related consolidated statements of net cost and changes in net position and combined statements
of budgetary resources were presented fairly, in all material respects, in conformity with U.S.
generally accepted accounting principles. Ernst & Young was unable to obtain sufficient audit
evidence for the amounts presented in the statements of social insurance as of January 1, 2020,
2019, 2018, 2017, and 2016, and the related statements of changes in social insurance amounts for
the periods ended January 1, 2020, and 2019. As a result, Ernst & Young was not able to, and did
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not, express an opinion on the financial condition of the HHS social insurance program and related
changes in the social insurance program for the specified periods.
Ernst & Young also noted two matters involving internal controls with respect to financial
reporting. Under the standards established by the American Institute of Certified Public
Accountants and Government Auditing Standards, issued by the Comptroller General of the United
States, Ernst & Young did not identify any deficiencies in internal control that it considered a
material weakness. Ernst & Young noted improvements over internal controls but continued to
identify two significant deficiencies related to HHS’s Financial Information Systems and HHS’s
Financial Reporting Systems, Analyses, and Oversight.
Report on the Financial Statement Audit of the Centers for Medicare & Medicaid Services for Fiscal
Year 2020 (A-17-20-53000), November 2020
Based on its audit, Ernst & Young found that the FY 2020 CMS consolidated balance sheets and the
related consolidated statements of net cost and changes in net position and combined statement
of budgetary resources were presented fairly, in all material respects, in conformity with U.S.
generally accepted accounting principles. Ernst & Young was unable to obtain sufficient audit
evidence for the amounts presented in the statements of social insurance as of January 1, 2020,
2019, 2018, 2017, and 2016, and the related statements of changes in social insurance amounts for
the periods ended January 1, 2020, and 2019. As a result, Ernst & Young was not able to, and did
not, express an opinion on the financial condition of the CMS social insurance program and related
changes in the social insurance program for the specified periods.
Ernst & Young also noted two matters involving internal controls with respect to the financial
reporting: financial reporting processes and information systems controls. Also, during FY 2020,
CMS was not in full compliance with the requirements of the Payment Integrity Information Act of
2019 or section 6411 of the Affordable Care Act.
U.S. Department of Health and Human Services Met the Requirements of the Digital Accountability
and Transparency Act of 2014, With Areas That Require Improvement (A-17-20-54000), November
2020
Our performance audit determined that HHS complied with the reporting requirements of the
Digital Accountability and Transparency Act of 2014 (DATA Act) as stipulated by OMB, the Council
of the Inspectors General on Integrity and Efficiency, and Treasury. Although HHS met the
reporting requirements, our performance audit determined that:
Although improvements with respect to the controls within HHS’s IT infrastructure and financial
systems have been made, we observed deficiencies related to access controls, configuration
management, segregation of duties, and interface controls.
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For the period of performance dates, we found discrepancies between File D2 and the supporting
documents. HHS management indicated that a gap existed between the operating divisions’
understanding of the standard interface file (SIF) creation process for these fields. Multiple date
fields are collected through the SIF file process, and operating divisions misinterpreted the different
definitions for these date fields including, specifically, the period of performance data element.
We recommend that HHS continue to focus its efforts on resolving issues related to its IT system
controls, fully implementing interface controls by updating the governance for different
environments to be compliant. We also recommend that HHS continue to progress toward
producing high-quality data; remediating deficiencies in financial, procurement and grant-related
systems; and better automating DATA Act data collection and submission processes. Finally, we
recommend that HHS focus on refreshing operating divisions’ understanding of Departmental
guidance and identifying any potential need for operating division training to prevent and detect
future accuracy issues.
Grants and Contracts
HHS is the largest grant-making organization and one of the largest contracting agencies in the Federal
Government. In FY 2019, HHS awarded more than $559 billion in grants and over $26 billion in contracts
across all program areas. OIG’s direct annual discretionary appropriation funding is used to conduct
program integrity and enforcement activities with regard to the more than 100 public health and human
services programs carried out by more than 80,00 employees around the world. The size and scope of
departmental awards make their operating effectiveness crucial to the success of programs designed to
improve the health and well-being of the public.
Grant Fraud Investigations
The following case examples relate to misuse of grant funds:
Kansas—On November 23, 2021, KalScott Engineering, Inc. (KalScott) and its president, Thomas
Sherwood, and Vice President Suman Saripalli, entered into a settlement agreement under which
they agreed to pay $672,352 to resolve allegations that the company submitted false claims to
obtain grant funds from the SBIR and Small Business Technology Transfer (STTR) programs, which
are competitive programs that encourage American small businesses to engage in research, on
behalf of the Federal Government, that has the potential for commercialization. Grant recipients
must designate a principal investigator and key personnel who will work on the grant-funded
project. Small businesses may subcontract a portion of the work to other entities, but the small
business itself must perform a majority of the grant-funded work. Between April 2012 and July
2015, KalScott received SBIR grants from NIH, the National Aeronautics and Space Administration
(NASA), and the Air Force; as well as an STTR grant from the Navy. The United States contends
that the company wrongfully obtained grant funds from NASA and the Navy because KalScott
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designated Mr. Saripalli as a principal investigator when he was not eligible to serve in that role. In
addition, it is alleged that KalScott did not perform a majority of work under the Air Force grant,
and that KalScott used different key personnel than it listed in its proposal to obtain the NIH grant.
New York—On October 6, 2020, Geoffrey Girnun, a former associate professor and cancer
researcher at Stony Brook University’s Department of Pathology of Medicine, was sentenced to 1
year and 1 day in prison for theft of Government funds related to a grant he received to research
the effect of certain molecules on cancer. Girnun pleaded guilty in January 2020 and pursuant to
his plea agreement, he agreed to forfeit $225,000 and resign from his position at Stony Brook
University. The court also ordered Girnun to pay $225,000 in restitution to NIH and Stony Brook
University.
In approximately 2013 and 2017, Girnun formed two sham companies, Atlas Metabolomics, LLC
(Atlas) and Empyrean Biosciences, LLC (Empyrean) that purportedly provided research items and
equipment for the defendant’s cancer-related research projects. From approximately December
2013 through September 2019, Girnun submitted fraudulent electronic invoices to Stony Brook
University for payment to the sham companies for equipment, goods and services that were never
received or provided. Stony Brook University then used NIH and the university’s grant and
foundation funds to pay the sham companies over $200,000. Girnun withdrew the fraudulently
obtained grant funds from Atlas and Empyrean’s bank accounts and used the money for personal
expenses, including payments toward the mortgage on his residence and tuition for his children.
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 388
reports covering $930.2 billion in audited costs. Federal dollars covered by these audits totaled
$204.9 billion, of which about $115.6 billion were HHS funds.
Uniform guidance at 2CFR200 Subpart F establishes audit requirements for State and local
governments, colleges and universities, and nonprofit organizations receiving Federal
awards. Under the uniform guidance, covered entities must conduct annual organization-wide
“single audits” of all Federal money they receive. These audits are conducted by non-Federal
auditors, such as public accounting firms and State auditors. OIG reviews the quality of these
audits and assesses the adequacy of the entities’ management of Federal funds.
OIG’s oversight of non-Federal audit activity informs Federal managers about the soundness of
management of Federal programs and identifies any significant areas of internal control weakness,
noncompliance, and questioned costs for resolution or followup. We identify entities for high-risk
monitoring, alert program officials to any trends that could indicate problems in HHS programs,
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
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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, October 1, 2020, Through March 31, 2021
Not requiring changes or having minor changes 365
Requiring major changes 22
Having significant technical inadequacies 1
Total Number of Non-Federal Audits 388
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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 76 $1,850,465,000 $505,797,000
Issued during the reporting period 34 $241,954,000 $2,581,000
Total Section 1 110 $2,092,419,000 $508,378,000
Section 2
Reports for which management decisions were made
during the reporting period2, 3
Disallowed costs 54 *$566,464,000 $0
Costs not disallowed 7 $19,241,000 $0
Total Section 2 61 $585,705,000 $0
* 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) 49 $1,506,714,000 $508,378,000
Section 4
Reports for which no management decisions were made
within 6 months of issuance4 28 $1,302,503,000 $505,797,000
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Table 1 End Notes
1
The opening balance was adjusted upward by $18.9 million because of a reevaluation of previously issued
recommendations.
2
Revisions to previously reported management decisions:
• A-07-13-02795, Palmetto Government Benefits Administrator Did Not Always Refer Medicare Cost
Reports and Reconcile Outlier Payments in Jurisdiction 1. CMS reduced disallowed costs by
$12,821,146 as a result of a MAC settlement due to bankruptcy provisions.
• A-06-16-00018, Arkansas Claimed Unallowable Federal Reimbursement for Some Medicaid
Physician-Administered Drugs. CMS’s subsequent review of support documentation provided by
the State of Arkansas, determined that disallowed cost should be reduced by $8,747,496.
• A-04-13-07043, Medicare Compliance Review of Florida Hospital Orlando for the Period January 1,
2011, Through June 30, 2012. Based on redetermination appeals for extrapolated overpayments
totaling $11,512,530, recoveries were reduced by $7,403,950.
• Not detailed are reductions to previously disallowed management decisions totaling
$8.9 million.
3
Included are management decisions to disallow $10.8 million in questioned costs that were identified by
non-Federal auditors in audits of State and local governments, colleges and universities, and nonprofit
organizations receiving Federal awards conducted in accordance with Office of Management and Budget
Circular A-133. OIG is currently ensuring that work performed by these non-Federal auditors complies with
Federal audit standards; accordingly, OIG tracks, resolves, and reports on recommendations in these audits.
4
Because of administrative delays, some of which were beyond management control, resolution of the
following 28 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.
Audit CIN Audit Title
A-02-15-02013 CMS Did Not Always Accurately Authorize Financial Assistance Payments to Qualified Health
Plan Issuers in Accordance With Federal Requirements During the 2014 Benefit Year,
August 2018, $939,287,686
A-02-14-02017 New York Misallocated Costs to Establishment Grants for a Health Insurance Marketplace,
November 2016, $149,654,512
A-02-16-02007 Lincoln Hall Boys’ Haven, an Administration for Children and Families Grantee, Did Not Always
Comply With Applicable Federal and State Policies and Requirements, February 2019,
$29,807,160
A-01-14-02503 Maryland Misallocated Millions to Establishment Grants for a Health Insurance Marketplace,
March 2015, $28,400,000
A-04-14-07050 Kentucky Misallocated Millions to Establishment Grants for a Health Insurance Marketplace,
February 2017, $25,530,429
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A-07-18-04111 Mississippi Needs To Improve Oversight of Its Child Care Payment Program, April 2020,
$22,284,900
A-02-15-02008 New York Did Not Comply With Federal Grant Requirements for Allocating and Claiming
Marketplace Contract Costs, December 2017, $20,415,344
A-01-17-00506 Medicare Paid Twice for Ambulance Services Subject to Skilled Nursing Facility Consolidated
Billing Requirements, February 2019, $19,938,117
A-07-15-04226 Not All of Missouri's Child Care Subsidy Program Payments Complied With Federal and State
Requirements, November 2017, $19,076,167
A-06-17-07004 Southwest Key Programs Failed To Protect Federal Funds Intended for the Care and Placement of
Unaccompanied Alien Children, September 2020, $13,130,848
A-01-15-02500 Vermont Did Not Properly Allocate Millions to Establishment Grants for a Health Insurance
Marketplace, September 2016, $11,243,006
A-02-14-02024 Newark Preschool Council, Inc., Did Not Always Comply With Head Start Requirements, February
2017, $9,950,556
A-02-16-02013 The Children's Village Inc., an Administration for Children and Families Grantee, Did Not Always
Comply With Applicable Federal and State Policies and Requirements, April 2019, $2,623,785
A-07-17-02808 The Colorado Health Insurance Marketplace’s Financial Management System Did Not Always
Comply With Federal Requirements, July 2018, $2,567,604
A-04-16-00112 North Carolina Made Capitation Payments to Managed Care Entities After Beneficiaries' Deaths,
September 2020, $1,948,657
A-07-11-06013 The University Of Colorado Denver Did Not Always Claim Selected Costs Charged Directly to
Department of Health And Human Services Awards in Accordance With Federal Regulations,
June 2013, $1,419,524
A-05-14-00045 The Minnesota Marketplace Misallocated Federal Funds and Claimed Unallowable Costs,
November 2016, $1,279,677
A-01-19-02500 Cape Cod Child Development Program Did Not Meet Its Head Start Non-Federal Share
Obligations, April 2020, $1,196,293
A-01-18-02501 Vermont’s Office of Child Support Needs Better Oversight Over Its Administrative Costs Claimed,
September 2019, $1,058,309
A-09-14-01007 Nevada Misallocated Costs for Establishing a Health Insurance Marketplace to Its Establishment
Grants, February 2016, $893,464
A-12-17-00002 The Office of the Secretary of Health and Human Services Did Not Comply With Federal
Regulations for Chartered Aircraft and Other Government Travel Related to Former Secretary
Price, July 2018, $341,616
A-02-17-02003 Sharon Baptist Head Start Claimed Unallowable Rent and Failed To Return Embezzled Funds,
July 2020, $207,264
A-05-18-00008 The Next Door Foundation Claimed Unallowable Indirect Costs and Did Not Document the
Funding Source of Program Expenditures in Accordance With Federal Requirements,
September 2019, $142,104
A-09-18-03031 CMS Could Have Saved $192 Million by Targeting Home Health Claims for Review With Visits
Slightly Above the Threshold That Triggers a Higher Medicare Payment, July 2020, $41,613
A-09-18-03018 Medicare Improperly Paid Suppliers an Estimated $92.5 Million for Inhalation Drugs,
October 2019, $36,825
A-03-16-00250 Youth For Tomorrow–New Life Center, Inc., an Administration for Children and Families Grantee,
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Did Not Comply With All Applicable Federal Policies and Requirements, September 2020,
$16,851
A-04-18-02010 Florida's Refugee Medical Assistance Payments Were Generally Allowable, January 2020, $8,772
A-05-18-00015 The University of Minnesota Complied With Federal Requirements To Perform Risk Assessments
and Monitor Subrecipients, November 2019, $1,924
TOTAL CINS: 28
TOTAL AMOUNT: $1,302,503,000
Audit Reports With Funds Recommended To Be Put to Better Use
The phrase “recommendations that funds be put to better use” means that funds could be used more
efficiently if management took action to implement an OIG recommendation through reductions in
outlays, deobligation of funds, and/or avoidance of unnecessary expenditures. Table 2 reports HHS
program officials’ decisions to take action on these audit recommendations.
Number of
Description Reports Dollar Value
Section 1
Reports for which no management decisions had been made by the
beginning of the reporting period 17 $17,622,190,000
Reports issued during the reporting period 4 $10,917,000
Total Section 1 21 $17,633,107,000
Section 2
Reports for which management decisions were made during the
reporting period1
Value of recommendations agreed to by management
Based on proposed management action 8 $919,971,000
Based on proposed legislative action 0 $0
Value of recommendations not agreed to by management 1 $103,514,000
Total Section 2 9 $1,023,485,000
Section 3
Reports for which no management decisions had been made by the
end of the reporting period2 (Sec. 1 minus Sec. 2) 12 $16,609,622,000
Table 2 End Notes
1
Revisions to previously reported management decisions:
• A-01-15-00515, Wisconsin Physicians Service Paid Providers for Hyperbaric Oxygen Therapy Services That Did
Not Comply With Medicare Requirements. CMS’s subsequent review of additional documentation realized
savings totaling $7,069,366, thus reducing the value agreed upon by $35,259,970.
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2
Because of administrative delays, some of which were beyond management control, 9 of the 12 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.
Audit CIN Audit Title
A-05-12-00020 Medicare And Beneficiaries Could Save Billions If CMS Reduces Hospital Outpatient Department
Payment Rates for Ambulatory Surgical Center-Approved Procedures to Ambulatory Surgical
Center Payment Rates, April 2014, $15,000,000,000
A-03-17-00010 Hospitals Overbilled Medicare $1 Billion by Incorrectly Assigning Severe Malnutrition Diagnosis
Codes to Inpatient Hospital Claims, July 2020: $1,024,623,449
A-03-16-03001 The Centers for Medicare & Medicaid Services Did Not Identify and Report Potential
Antideficiency Act Violations for 12 Contracts Used To Establish the Federal Marketplace Under
the Affordable Care Act, February 2020, $186,993,209
A-06-17-08004 Medicare Part D Is Still Paying Millions for Drugs Already Paid for Under the Part A Hospice
Benefit, August 2019, $160,800,000
A-05-16-00060 Hospitals Received Millions in Excessive Outlier Payments Because CMS Limits the Reconciliation
Process, November 2019, $125,000,000
A-03-13-03002 HHS Did Not Identify and Report Antideficiency Act Violations, May 2017, $49,445,025
A-04-18-04067 Inadequate Edits and Oversight Caused Medicare To Overpay More Than $267 Million for
Hospital Inpatient Claims With Post-Acute-Care Transfers to Home Health Services,
August 2020, $40,610,333
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,
September 2020, $14,417,533
A-09-18-03030 Medicare Incorrectly Paid Providers for Emergency Ambulance Transports From Hospitals to
Skilled Nursing Facilities, September 2019, $968,718
TOTAL CINS: 9
TOTAL AMOUNT: $16,602,858,000
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Appendix B: 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 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
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.
OAS Date Reviewing Office Office Reviewed
April 2019 HHS-OIG, OAS Department of Transportation
(DOT) OIG
The system of quality control for the audit organization of DOT-OIG in effect for the year ending
September 30, 2018, has been suitably designed and complied with to provide DOT-OIG with
reasonable assurance of performing and reporting in conformity with applicable professional
standards in all material respects. Federal audit organizations can receive a rating of pass, pass
with deficiencies, or fail. DOT-OIG received a peer-review rating of pass.
Office of Investigations
During this semiannual reporting period, no peer reviews involving OI were completed. Listed below is
information about 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 (USPS) OIG
The system of internal safeguards and management procedures for the investigative function of
the USPS-OIG in effect for the year ending September 30, 2015, was in full compliance with the
quality standards established by CIGIE and the Attorney General’s guidelines.
Office of Evaluation and Inspections
During this semiannual reporting period, one peer review involving OEI was completed. Information
concerning OEI’s peer-review activity during a prior reporting period is also listed below.
OEI Date Reviewing Office Office Reviewed
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
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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 (Blue Book) standards. The seven covered standards are:
Quality Control, Planning, Data Collections and Analysis, Evidence, Records Maintenance,
Reporting, and Followup. In addition, each of the four reviewed VA-OIG reports complied with
those standards and the VA-OIG’s internal policies and procedures. As a result of our findings,
there are no recommendations associated with this external peer review. The report also noted a
VA-OIG beneficial practice of using specialized staff to conduct independent referencing reviews of
its reports to achieve greater consistency in its quality assurance processes.
OEI Date Reviewing Office Office Reviewed
September 2019 HHS-OIG, OEI Department of Interior (DOI)
OIG
The DOI-OIG Inspection and Evaluation component’s policies and procedures mostly met CIGIE’s
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 Department of Defense (DoD)
OIG
The DoD OIG Inspection and Evaluation components’ policies and procedures generally met
CIGIE’s 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 C: Summary of Sanction Authorities
The Inspector General Act of 1978, as amended, specifies requirements for semiannual reports to be made
to the HHS Secretary for transmittal to Congress. A selection of other authorities appears below.
Program Exclusions
The Social Security Act, § 1128 (42 U.S.C. § 1320a-7), provides several grounds for excluding individuals and
entities from participation in Medicare, Medicaid, and other Federal health care programs. Exclusions are
required (mandatory exclusion) for individuals and entities convicted of the following types of criminal
offenses: (1) Medicare or Medicaid fraud; (2) patient abuse or neglect; (3) felonies for other health care
fraud; and (4) felonies for illegal manufacture, distribution, prescription, or dispensing of controlled
substances.
OIG is authorized (permissive exclusion) to exclude individuals and entities on several other grounds,
including misdemeanors for other health care fraud (other than Medicare or Medicaid); suspension or
revocation of a license to provide health care for reasons bearing on professional competence,
professional performance or financial integrity; provision of unnecessary or substandard services;
submission of false or fraudulent claims to a Federal health care program; or engaging in unlawful kickback
arrangements.
The ACA added another basis for imposing a permissive exclusion, that is, knowingly making, or causing to
be made, any false statements or omissions in any application, bid, or contract to participate as a provider
in a Federal health care program, including managed care programs under Medicare and Medicaid, as well
as Medicare’s prescription drug program.
Providers subject to exclusion are granted due process rights. These include a hearing before an
administrative law judge and appeals to the HHS Departmental Appeals Board and Federal district and
appellate courts regarding the basis for and the length of the exclusion.
Civil Monetary Penalties Law
The CMPL of the Social Security Act, 1128A (42 U.S.C. § 1320a 7a), imposes penalties, assessments, and
exclusion from participation in Federal health care programs for engaging in certain activities. For
example, a person who submits, or causes to be submitted, to a Federal health care program a claim for
items and services that the person knows, or should know, is false or fraudulent is subject to a penalty of
up to $15,270 for each item or service falsely or fraudulently claimed, an assessment of up to three times
the amount falsely or fraudulently claimed, and exclusion.
For the purposes of the CMPL, “should know” is defined to mean that the person acted in reckless
disregard or deliberate ignorance of the truth or falsity of the claim. The law and its implementing
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regulations also authorize actions for a variety of other violations, including submission of claims for items
or services furnished by an excluded person; requests for payment in violation of an assignment
agreement; violations of rules regarding the possession, use, and transfer of biological agents and toxins;
and payment or receipt of remuneration in violation of the anti-kickback statute (42 U.S.C. § 1320a 7b (b)).
The ACA added more grounds for imposing CMPs. These include, among other types of conduct,
knowingly making, or causing to be made, any false statements or omissions in any application, bid, or
contract to participate as a provider in a Federal health care program (including Medicare and Medicaid
managed care programs and Medicare Part D); the ACA authorizes a penalty of up to $55,262 for each
false statement, as well as activities relating to fraudulent marketing by MCOs, their employees, or their
agents.
The 21st Century Cures Act (enacted on December 13, 2016) added more grounds for imposing CMPs,
assessments, and exclusion from Federal health care programs for fraudulent conduct in an HHS grant,
contract, or other agreement. OIG may assess CMPs of up to $10,000 per claim and assessments of up
to three times the amount claimed for knowingly presenting a false or fraudulent claim. In addition, OIG
may impose a penalty of up to $50,000 and assessments of up to three times the amount of funds at issue:
(1) for each instance of knowingly making a false statement in a document required to be submitted to
receive funds under an HHS contract, grant, or other agreement; (2) for knowingly making or using a false
record or statement that is material to a false or fraudulent claim; and (3) for knowingly making or using a
false record or statement material to an obligation to pay or transmit funds or property owed to HHS. OIG
may impose a penalty of up to $10,000 per day and assessments of up to three times the amount at issue
for knowingly concealing, or knowingly and improperly avoiding or decreasing, an obligation owed to HHS
with respect to an HHS grant, contract, or other agreement. Finally, HHS-OIG may impose a penalty of up
to $15,000 per day for failing to grant timely access to OIG upon reasonable request for audits or to carry
out other statutory functions in matters involving an HHS grant, contract, or other agreement.
Patient Dumping
The Social Security Act, §1867 (42 U.S.C. § 1395dd), provides that when an individual goes to the ER of a
Medicare-participating hospital, the hospital must provide an appropriate medical screening examination
to determine whether that individual has an emergency medical condition. If an individual has such a
condition, the hospital must provide either treatment to stabilize the condition or an appropriate transfer
to another medical facility.
If a transfer is ordered, the transferring hospital must provide stabilizing treatment to minimize the risks of
transfer and must ensure that the receiving hospital agrees to the transfer and has available space and
qualified personnel to treat the individual. In addition, the transferring hospital must effect the transfer
through qualified personnel and transportation equipment. Further, a participating hospital with
specialized capabilities or facilities may not refuse to accept an appropriate transfer of an individual who
needs services if the hospital has the capacity to treat the individual.
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OIG is authorized to collect CMPs of up to $53,484 against small hospitals (fewer than 100 beds) and up
to $106,965 against larger hospitals (100 beds or more) for each instance in which the hospital negligently
violated any of the section 1867 requirements. In addition, OIG may collect a penalty of up to
$106,965 from a responsible physician for each negligent violation of any of the section 1867 requirements
and, in some circumstances, may exclude a responsible physician.
Anti-Kickback Statute and Civil False Claims Act Enforcement Authorities
The Anti-Kickback Statute
The anti-kickback statute authorizes penalties against anyone who knowingly and willfully solicits,
receives, offers, or pays remuneration, in cash or in kind, to induce or in return for: (1) referring an
individual to a person or an entity for the furnishing, or arranging for the furnishing, of any item or
service payable under the Federal health care programs; or (2) purchasing, leasing, or ordering, or
arranging for or recommending the purchasing, leasing, or ordering, of any good, facility, service,
or item payable under the Federal health care programs (Social Security Act, § 1128B(b) (42 U.S.C. §
1320a-7b(b)).
Individuals and entities 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 D: 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
(previously known as the
Compendium of
Unimplemented
Recommendations)
(a)(4) Matters referred to prosecutive authorities “Legal and Investigative
Activities Related to the
Medicare and Medicaid
Programs” section
(a)(5) Summary of instances in which information requested by None for this reporting
OIG was refused period
(a)(6) List of audit reports 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
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Section Requirement Location
within 60 days, and in which there are any outstanding
unimplemented recommendations
(a)(11) Description and explanation of revised management Appendix A
decisions
(a)(12) Management decisions with which the Inspector General None for this reporting
disagrees period
(a)(13) Information required by the Federal Information Security “Other HHS-Related
Management Act. Reviews and Investigative
Activities” section
(a)(14)-(16) Results of peer reviews of HHS-OIG conducted by other Appendix B
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 E
(a)(18) Metrics description for statistical tables Appendix E
(a)(19) Investigations on senior Government employees Appendix E
(a)(20) Description of whistleblower retaliation instances Appendix E
(a)(21) Description of attempts to interfere with OIG independence Appendix E
(a)(22) Description of closed and nondisclosed reports and Appendix E
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 F
General is required to solicit proposals annually via a Federal
Register notice for developing new and modifying existing
safe harbors to the anti-kickback statute of the Social
Security Act, § 1128(b) and for developing special fraud
alerts. The Inspector General is also required to report
annually to Congress on the status of the proposals received
related to new or modified safe harbors.
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Section Requirement Location
1553 Pursuant to the American Recovery and Reinvestment Act of “Other HHS-Related
2009, P.L. No. 111-5, § 1553, OIG reports to Congress the Reviews and
retaliation complaint investigations it decided not to Investigations” section
conduct or continue during the period.
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Appendix E: 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 section 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 115
reports with overdue final management decisions (FMDs) as of the end of this reporting period. 2
The breakdown of those 115 reports by HHS OpDiv is as follows:
OpDiv Overdue FMDs
ACF 24
ASPR 1
CMS 50
FDA 1
IHS 13
NIH 6
OASH 1
OS 19
2 OIG can track the status of management decisions for all reports back to FY 2011. OIG can track the status of management
decisions for audit reports back to FY 1990. We have identified three additional audit reports (one CMS, one FDA, and one OS)
with overdue management decisions from FYs 1990 through 2010.
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OIG is unable to provide reasons and timetables for each of these overdue management decisions
because of the volume and the fact that OIG did not historically track this information.
(B) for which no establishment comment was returned within 60 days of providing the report to the
establishment; and
For draft reports that include recommendations, OIG typically requests establishment comments
within 30 days. In some instances, OIG grants extensions when requested and appropriate. When
OIG does not receive establishment comments or a request for extension within the 30-day
timeframe, OIG typically issues the report and notes the lack of establishment comments.
For this semiannual reporting period, OIG had none 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 1,424 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 Dollar Value of
FY
With Unimplemented Unimplemented Aggregate Potential
(2011–2021)
Recommendations Recommendations Cost Savings
2011 12 18 $408,135,515
2012 22 25 $397,437,195
2013 27 40 $234,261,321
2014 28 51 $15,122,628,339
2015 27 44 $332,579,636
2016 25 58 $187,140,410
2017 39 101 $1,116,136,306
2018 54 155 $1,900,522,940
2019 80 264 $789,241,080
2020 123 477 $3,008,481,919
2021 58 191 $240,344,137
Totals 495 1,424 $23,736,908,798
OIG annually produces Solutions To Reduce Fraud, Waste, and Abuse in HHS Programs: OIG’s Top
Recommendations (previously known as the Compendium of Unimplemented Recommendations),
which constitutes OIG’s response to a specific requirement of the Inspector General Act, as
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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, these
recommendations would most positively impact HHS programs in terms of cost savings and/or
quality improvements and should therefore be prioritized for implementation.
(17) Statistical tables showing-
(A) the total number of investigative reports issued during the reporting period;
(B) the total number of persons referred to the DOJ for criminal prosecution during the reporting
period;
(C) the total number of persons referred to State and local prosecuting authorities for criminal
prosecution during the reporting period; and
(D) the total number of indictments and criminal information during the reporting period that
resulted from any prior referral to prosecuting authorities;
Total number of investigative reports issued during the reporting period, None
including Management Implication Reports and Investigative Advisories
Total number of persons referred 3 to Federal prosecuting authorities for 1,253
criminal prosecution during the reporting period 4
Total number of persons referred to State and local prosecuting 125
authorities for criminal prosecutions during the reporting period
Total number of Federal indictments and criminal information during the 346
reporting period that resulted from any prior referral to prosecuting
authorities
Total number of State and local indictments and criminal information 47
during the reporting period that resulted from any prior referral to
prosecuting authorities
(18) A description of the metrics used for developing the data for the statistical tables under
paragraph (17);
Regarding (17)(A), OIG considers Investigative Reports as Management Implication Reports
and Investigative Advisories. A Management Implication Report identifies systemic
3 A referral includes OIG presentations to DOJ and/or State/local prosecutorial authorities.
4 OIG counts “persons” as both individuals and entities.
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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.
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
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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 five senior Government employees for misconduct.
(20) A detailed description of any instance of whistleblower retaliation, including information about
the official found to have engaged in retaliation and what, if any, consequences the establishment
imposed to hold that official accountable;
For departmental agencies, OIG conducts investigations and gathers facts related to whistleblower
complaints. Before 2015, OIG made no determinations as to whether retaliatory action had been
taken. However, to better facilitate the report review process, OIG changed its process in 2015 to
include findings in its reports as to whether it was more likely than not that whistleblower
retaliation had occurred. Although OIG now includes these findings in its reports, it does not make
recommendations as to what, if any, corrective action(s) should be taken.
During the time period from October 1, 2020, through March 31, 2021, OIG did not issue any
reports that included findings of retaliation.
When determining the level of detail to provide for a description of any instance of whistleblower
retaliation, OIG is always mindful of the risk that a detailed description of the allegation could
inadvertently reveal the whistleblower’s identity, thus having a chilling effect on future
whistleblowers.
(21) A detailed description of any attempt by the establishment to interfere with the independence of
the Office, including-
(A) with budget constraints designed to limit the capabilities of the Office; and
(B) incidents where the establishment has resisted or objected to oversight activities of the Office
or restricted or significantly delayed access to information, including the justification of the
establishment for such action; and
Although there have been instances in which HHS agencies have questioned OIG oversight
activities or have not provided all information in the precise content, format, and timeline as
requested, OIG has not identified any instances in which HHS interfered with the independence of
OIG during this reporting period. OIG would immediately notify Congress if it were unable to
resolve these issues within HHS.
(22) Detailed descriptions of the particular circumstances of each-
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(A) inspection, evaluation, and audit conducted by the Office that is closed and was not
disclosed to the public; and
The table below lists evaluation and audit reports for this semiannual reporting period that did not
result in public reports. However, in some circumstances, a public summary of these nonpublic
reports was published.
Nonpublic Reports by Category, October 1, 2020, Through March 31, 2021
Number of
Category/Description
Reports
IT security reviews (involve IT systems, e.g., penetration test audits) 4
Homeland security issues (involve particularly sensitive topics, e.g., bioterrorism,
None
emergency preparedness, and classified or potentially classified information)
Recipient Capability Audits (primarily in Head Start/Early Head Start programs) None
Reimbursable audits performed for other Federal agencies (primarily contract
None
audits)
Confidential or proprietary information (e.g., Medicare Part B drug
None
claims/imaging services, Medicare investment income)
Medicare Adverse Event Reviews (required by law not to disclose) None
Medicare Prescription Drug Event Reviews None
Other None
HHS technical assistance reports 5 None
Finance-related attestation reviews 1
Total 5
(B) Investigation conducted by the Office involving a senior Government employee that is closed and
was not disclosed to the public.
In section 5(a)(19), we detail investigations of senior Government employees in which allegations
were substantiated. Those investigations are all closed and none have been disclosed to the
public. OIG interprets section 5(a)(22)(B) as requiring reporting on investigations with either
substantiated or unsubstantiated allegations. As such, we refer to our section 5(a)(19) response to
address investigations of senior Government employees in which allegations were substantiated
that were closed and not disclosed to the public. Our section 5(a)(22)(B) response describes
5 OIG routinely provides technical assistance to HHS. Generally, that technical assistance is not part of a formal report and is not
formally tracked. However, in some limited circumstances, OIG does provide technical assistance in a formal report, and only that
category of technical assistance is reflected in this table.
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investigations during this reporting period, both criminal and administrative, involving a senior
Government employee in which OIG did not substantiate allegations of misconduct.
When determining the level of detail to provide for the investigations described above, OIG is
mindful of the risk that a detailed description of the investigation could inadvertently reveal the
subject’s identity. During this reporting period, OIG investigated five senior Government
employee(s) for misconduct, but OIG determined the allegations to be unsubstantiated.
Descriptions of the investigations are below.
Description of Status Disposition DOJ DOJ DOJ DOJ
Investigation Referral Referral Declinati Declination
Date on Date
A complaint was Closed Unsubstantiated No N/A N/A N/A
received that
alleged a senior
Government
employee made an
unauthorized
disclosure of
confidential
information related
to the clinical trials
of a COVID-19
treatment to a
politico reporter.
A complaint was Closed Unsubstantiated No N/A N/A N/A
received that a
senior Government
employee allegedly
received financial
benefits from a
contractor in
exchange for
securing a 4-year,
sole source
contract with that
same contractor.
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A senior Closed Insufficient Yes 8/20/2020 Yes 12/7/2020
Government evidence
employee made
both verbal and
written false
statements to an
investigator. The
senior Government
employee’s
statements
obstructed a critical
investigation under
the President's
Emergency Plan for
Aids Relief in five
Central American
countries. The
senior Government
employee also
failed to report a
grantee employee's
allegations of grant
fraud and other
violations to the
OIG or other
qualified
(investigative)
agency.
A complaint was Closed Insufficient No N/A N/A N/A
received that a evidence.
senior Government
employee provided
a subcontractor
strategic advantage
with information
that was
proprietary to itself
and other
information that
was proprietary to
another contractor.
There was also an
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allegation that the
senior Government
employee provided
the subcontractor
with access to
agency systems,
even though this
subcontractor did
not have access.
Additionally, it was
alleged that there
was a personal
relationship
between the senior
Government
employee and one
of the
subcontractor’s
employees.
A complaint was Closed Insufficient No N/A N/A N/A
received that evidence
alleged a senior
Government
employee owned
several businesses
and ran them
during work
hours. The senior
Government
employee was
using government
computers, phones,
copy machines,
and fax machines
for their personal
businesses. It was
also alleged that
the senior
Government
employee is
collecting kickbacks
from the Puerto
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Rican government
for work in Puerto
Rico.
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Appendix F: 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. Having done
so, OIG must then determine, in consultation with DOJ, whether it can develop effective regulatory
limitations and controls—to not only foster beneficial or innocuous arrangements but also protect the
Federal health care programs and their beneficiaries from abusive practices.
Public proposals for new and modified safe harbors
Annual Solicitation
In December 2019, OIG published its annual solicitation in the Federal Register (Annual Solicitation). 6 In
response to the Annual Solicitation, OIG received the following proposals related to safe harbors:
Proposal OIG Response
Modification of the transportation OIG recently issued a final rule that, among other things, revised
safe harbor to: (i) permit marketing in the local transportation safe harbor and finalized a new patient
defined circumstances; (ii) protect engagement tools and supports safe harbor. This new safe
free or discounted local harbor may also protect certain arrangements involving the
transportation services for health- provision of free or discounted local transportation services,
related, nonmedical purposes; (iii) provided all safe harbor conditions are met. See 81 Fed. Reg.
allow patients to schedule free or 77684 (Dec. 2, 2020) (the “Regulatory Sprint Final Rule”). We
discounted transportation services believe these regulations and accompanying preamble in the
and medical appointments online; Regulatory Sprint Final Rule are sufficiently responsive to these
and (iv) protect the provision of free proposals.
or discounted local transportation
services between or among
6 OIG, Solicitation of New Safe Harbors and Special Fraud Alerts, 84 Fed. Reg. 72,289 (Dec. 31, 2019), available at
https://www.govinfo.gov/content/pkg/FR-2019-12-31/pdf/2019-27202.pdf.
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Proposal OIG Response
providers, where all such providers For example, in the Regulatory Sprint Final Rule, we expressly
are furnishing home care to the same declined to extend the local transportation safe harbor to
patient. protect transportation services for health-related, nonmedical
purposes. Id. at 77863. Similarly, we reiterated our
longstanding concerns related to the marketing of
transportation services. Id. at 77864; see also 81 Fed. Reg.
88368, 88386 (Dec. 7, 2016).
For questions about the application of certain fraud and abuse
authorities to particular factual arrangements, the advisory
opinion process remains available.
A new safe harbor that would protect OIG is not adopting this suggestion. As we noted in the
value-based contracting and Regulatory Sprint Final Rule, we may consider this topic for
outcomes-based contracting for the future rulemaking.
purchase of pharmaceutical products.
A new safe harbor that would protect In the Regulatory Sprint Final Rule, OIG finalized a new patient
patient engagement and product engagement and support safe harbor. 42 CFR § 1001.952(hh).
support activities furnished by This safe harbor does not protect the provision of patient
pharmaceutical manufacturers to engagement tools or supports furnished or funded by a
patients. pharmaceutical manufacturer, distributor, or wholesaler due to,
among other reasons, concerns that such entities would use the
safe harbor to protect arrangements that are “intended to
market their products or inappropriately tether clinicians to the
use of a particular product.” 81 Fed. Reg. 77709, 77782. For the
same reasons, we decline to adopt this suggestion.
A new safe harbor to protect data In the Regulatory Sprint Final Rule, OIG finalized a new care
analytics arrangements between or coordination arrangements safe harbor, 42 CFR § 1001.952(ee),
among pharmaceutical that may protect the exchange of data analytic tools between or
manufacturers, pharmacy benefit among eligible entities that are party to a value-based
managers, payors, and providers. arrangement, provided all safe harbor conditions are met. 81
Fed. Reg. 77823. However, in the Regulatory Sprint Final Rule,
we stated that, among other entities, pharmaceutical
manufacturers and pharmacy benefit managers are ineligible to
use this safe harbor. For the same reasons included in the
Regulatory Sprint Final Rule, we decline to adopt a new safe
harbor to protect arrangements involving these entities.
A new patient medication adherence As part of the Regulatory Sprint Final Rule, OIG finalized a new
safe harbor that would protect patient engagement tools and supports safe harbor that
remuneration furnished to patients protects certain eligible entities’ provision of patient
intended to support patient engagement tools or supports, of which, depending on the facts
adherence to a medication treatment and circumstances, may include remuneration designed to
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Proposal OIG Response
regimen prescribed by the patient’s advance patients’ medication adherence. We believe that
health care provider. regulation and our discussion related to that safe harbor in the
Regulatory Sprint Final Rule is sufficiently responsive to this
request.
A new safe harbor or modification to OIG is not adopting these suggestions. As we recently
one or more existing safe harbors articulated in the Regulatory Sprint Final Rule, beneficiary cost-
that would protect patient cost- sharing obligations are a programmatic requirement, and we do
sharing waivers in the following not believe it would be appropriate to broadly protect cost-
circumstances: (i) upon a good faith sharing waivers that could obviate a programmatic requirement
determination of financial need; (ii) created by statute. 85 Fed. Reg. 77793.
by all providers and suppliers, so
long as certain criteria are met (e.g.,
providers do not claim the cost-
sharing waiver as bad debt); or (iii)
applied to those amounts greater
than a provider’s good-faith estimate
of a patient’s cost-sharing liability.
With certain modifications, finalize Both safe harbors were finalized in a recent rulemaking entitled
the pharmacy benefit manager “Fraud and Abuse; Removal of Safe Harbor Protection for
service fees safe harbor and the Rebates Involving Prescription Pharmaceuticals and Creation of
point-of-sale reductions in price for New Safe Harbor Protection for Certain Point-of-Sale
prescription pharmaceutical products Reductions in Price on Prescription Pharmaceuticals and Certain
safe harbor, as proposed by OIG in a Pharmacy Benefit Manager Service Fees.” 85 Fed. Reg. 76666
February 2019 rulemaking. (Nov. 30, 2020).
Regulatory Sprint to Coordinated Care
In addition to the Annual Solicitation, in the October 17, 2019, Federal Register, OIG issued a proposed rule
in connection with HHS’s Regulatory Sprint to Coordinated Care, which aimed to reduce regulatory
barriers and accelerate the transformation of the health care system into one that better pays for value
and promotes care coordination (OIG NPRM). 7 The proposals set forth in the OIG NPRM were, in large
part, finalized in the Regulatory Sprint Final Rule and, in certain instances, incorporates some of the ideas
we received in responses to our Annual Solicitation. The Regulatory Sprint Final Rule adds new safe
harbors to protect certain arrangements for value-based care, patient engagement tools and support, and
7 OIG, Medicare and State Healthcare Programs: Fraud and Abuse; Revisions to Safe Harbors Under the Anti-Kickback Statute, and
Civil Monetary Penalty Rules Regarding Beneficiary Inducements, 84 Fed. Reg. 55,694 (Oct. 17, 2019), available at
https://www.govinfo.gov/content/pkg/FR-2019-10-17/pdf/2019-22027.pdf.
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cybersecurity technology and services; modifies several existing safe harbors; and implements a new
exception under the CMPL provision prohibiting beneficiary inducements. The Regulatory Sprint Final Rule
provides greater certainty for health care providers and others participating in value-based arrangements
and providing coordinated care for patients. It is intended to ease compliance with OIG’s authorities for
health care providers and others across the industry, while including strong safeguards to help protect
patients and Federal health care programs from fraud and abuse.
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