Semiannual Report to Congress, October 1, 2022, Through March 31, 2023 — HHS-OIG
Summary
Semiannual Report to Congress from the Department of Health and Human Services, Office of Inspector General, for October 1, 2022, through March 31, 2023, with a message from Inspector General Christi A. Grimm. For the period OIG issued 62 audit reports and 19 evaluation reports, identifying $200.1 million in expected recoveries and $277.2 million in questioned costs. Investigative work led to $892.3 million in expected investigative recoveries and 345 criminal actions, and OIG excluded 1,365 individuals and entities from Federal health care programs. The message describes a scheme to sell more than 7,600 false and fraudulent nursing degree diplomas and transcripts, and says OIG turns down 300 to 400 viable criminal and civil health care fraud cases each year due to lack of resources.
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“Semiannual Report to Congress, October 1, 2022, Through March 31, 2023 — HHS-OIG.”
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
A Message From Christi A. Grimm, 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, 2023.
HHS-OIG’s oversight portfolio is vital, vast, and varied. We are responsible for
oversight of more than $2.4 trillion in HHS expenditures and more than 100
health and human services programs. HHS is the Federal Government’s largest
grant-making agency and the fourth largest contracting agency, with obligations
in the hundreds of billions of dollars in grants and tens of billions of dollars in
total contracts each year. OIG provides independent, objective oversight of
these substantial taxpayer investments to ensure sound fiscal management; prevent fraud, waste, and
abuse; enhance transparency; and promote the delivery of high-quality health and human services.
During this reporting period, HHS-OIG's law enforcement arm continued as a formidable force in
combating fraud and abuse and protecting patients from harm. OIG and its partners pursued a multi-
State, coordinated law enforcement action to apprehend individuals engaged in a brazen scheme to sell
more than 7,600 false and fraudulent nursing degree diplomas and transcripts. Further, across the Nation,
our investigators worked with Federal and State law enforcement partners to bring to justice perpetrators
of detrimental kickback, false billing, and other schemes, including an alarming scheme involving
unnecessary prescriptions for opioids. Another disturbing case cataloged in this Semiannual Report
resulted in a 20-year prison sentence for the medical director of a drug and alcohol addiction treatment
facility involved in a $746 million, multiyear scheme to bill for fraudulent tests and treatments. HHS-OIG
remains resolute in our commitment to aggressively combat fraud and hold wrongdoers accountable.
This Semiannual Report reflects HHS-OIG’s critical oversight of the nearly $130 billion in HHS grants
awarded each year. In January 2023, HHS-OIG released a report that examined the monitoring of research
grants by the National Institutes of Health and EcoHealth Alliance. This work elucidated complex grants
oversight issues and underscored the importance of getting the fundamentals of grants management
right, especially for risky scientific research. Also during this reporting period, OIG continued critical
oversight to ensure that recipients of grant funding complied with Federal requirements. For example, OIG
issued a report finding concerning gaps in the reporting of missing foster children to the National Center
for Missing and Exploited Children.
As our work during this reporting period demonstrates, from protecting children to improving nursing
home care to bolstering the integrity of managed care and more, HHS-OIG delivers positive results for the
American people. Our capacity to shine a light on program vulnerabilities, uncover misspent funds, and
undertake enforcement actions is limited only by our available resources. Notwithstanding concerted
efforts by HHS-OIG and the Department—with strong support from Congress for HHS-OIG’s oversight and
enforcement—serious fraud, waste, and abuse continue to threaten HHS programs and the people they
serve. With current resources, HHS-OIG is unable to keep pace with these threats. For example, we are
i
turning down 300 to 400 viable criminal and civil health care fraud cases each year due to lack of
resources. Each case means unaddressed potential fraud and missed opportunities for deterrence.
Currently, HHS-OIG has about 2 cents to oversee every $100 of HHS spending. The FY 2024 President’s
Budget requests resources for OIG that, if enacted, would substantially help address this shortfall.
Since its 1976 establishment, OIG has worked collaboratively with its partners to protect and oversee HHS
programs that touch the lives of every American. The achievements of this office would not be possible
without the dedication, professionalism, and adroitness of OIG’s workforce. We greatly appreciate the
support of Congress and the Department for independent, vigorous oversight and HHS-OIG’s important
work.
Christi A. Grimm
Inspector General
.
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Table of Contents
Selected Acronyms and Abbreviations iv
OIG’s Approach to Driving Positive Change 1
Highlights of OIG Accomplishments 5
Medicare and Medicaid Reports and Reviews 12
Legal and Investigative Activities Related to Medicare and Medicaid 36
Public Health and Human Services Agency Reports and Reviews 51
Legal and Investigative Activities Related to Public Health and Human Services Agencies 62
Other HHS-Related Reviews and Investigative Activities 64
Appendix A: Questioned Costs and Funds To Be Put to Better Use 69
Appendix B: Peer Review Results 80
Appendix C: Summary of Sanction Authorities 83
Appendix D: Reporting Requirements in the Inspector General Act of 1978 86
Appendix E: Reporting Requirements in the Inspector General Empowerment Act of 2016 88
Appendix F: Anti-Kickback Statute—Safe Harbors 96
iii
Selected Acronyms and Abbreviations
ACF Administration for Children and Families
ASA Assistant Secretary for Administration
ASP average sales price
ASPR Administration for Strategic Preparedness and Response
CDC Centers for Disease Control and Prevention
CIA corporate integrity agreement
CIGIE Council of the Inspectors General on Integrity and Efficiency
CIN Client Index Number
CMP civil monetary penalty
CMPL Civil Monetary Penalties Law
CMS Centers for Medicare & Medicaid Services
DMEPOS durable medical equipment, prosthetics, orthotics, and supplies
DOD Department of Defense
DOJ Department of Justice
DOL Department of Labor
FBI Federal Bureau of Investigation
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
MAC Medicare Administrative Contractor
MCO managed care organization
MFCU Medicaid Fraud Control Unit
NCMEC National Center for Missing and Exploited Children
NIDA National Institute on Drug Abuse
NIH National Institutes of Health
NIST National Institute of Standards and Technology
OAS Office of Audit Services
OASH Office of Assistant Secretary for Health
OCIG Office of Counsel to the Inspector General
OEI Office of Evaluation and Inspections
OI Office of Investigations
iv
OIG Office of Inspector General
OS Office of the Secretary
PBM pharmacy benefit manager
PDE prescription drug event
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, 2022, Through March 31, 2023
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 Organization
OIG’s work is conducted by the Office of Audit Services (OAS), the Office of Evaluation and Inspections
(OEI), the Office of Investigations (OI), the Office of Counsel to the Inspector General (OCIG), and Mission
Support and Infrastructure (MSI).
Office of Audit Services
OAS provides auditing services for HHS, either by conducting audits with its own audit resources or
by overseeing audit work done by others. The audits examine the performance of HHS programs,
funding recipients, and contractors in carrying out their respective responsibilities and provide
independent assessments of HHS programs and operations to reduce waste, abuse, and
mismanagement.
Office of Evaluation and Inspections
OEI’s national evaluations provide HHS, Congress, and the public with timely, useful, and reliable
information on significant issues. To promote impact, OEI reports also provide practical
recommendations for improving program operations.
Office of Investigations
OI’s criminal, civil, and administrative investigations of fraud and misconduct related to HHS
programs and operations often lead to criminal convictions, administrative sanctions, and civil
monetary penalties (CMPs). OI’s nationwide network of investigators collaborates with DOJ and
other Federal, State, and local law enforcement authorities. OI works with public health entities to
minimize adverse patient impacts following enforcement operations. OI also provides security and
protection for the Secretary and other senior HHS officials.
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
Office of Counsel to the Inspector General
OCIG provides legal advice to OIG on HHS programs and OIG’s internal operations. The law office
also imposes exclusions and CMPs, monitors Corporate Integrity Agreements (CIAs), and
represents HHS’s interests in False Claims Act cases. In addition, OCIG publishes advisory opinions,
compliance program guidance documents, fraud alerts, and other resources regarding compliance
considerations, 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
management of budget, finance, human resource management, and other operations; and serving
as a liaison with HHS, Congress, and other stakeholders. MSI plans, conducts, and participates in a
variety of cooperative projects within HHS and with other Government agencies. MSI provides
critical data analytics, data management, and information technology infrastructure that enables
OIG components to conduct their work efficiently and effectively.
OIG Strategic Publications
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
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, including audits and evaluations, that are underway or are
planned during the fiscal year 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 Administration for Community Living. 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 Unimplemented 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 OIG's Top Unimplemented Recommendations: Solutions To Reduce Fraud,
Waste, and Abuse in HHS Programs (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.
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
OIG’s Semiannual Report to Congress
OIG’s Semiannual Report to Congress (Semiannual Report) describes 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 that follows, 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, 2022, through
March 31, 2023. We also provide data for accomplishments for fiscal year (FY) 2023 to date and
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, 2022, Through March 31, 2023
Highlights of OIG Accomplishments
In this section, we present data on OIG reports issued, expected recoveries, criminal and civil actions, and
other statistics resulting from our work during the semiannual reporting period. 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
(10/1/2022–3/31/2023)
Audit Reports Issued 62
Evaluations Issued 19
Expected Audit Recoveries $200.1 Million
Questioned Costs $277.2 Million
Potential Savings $0
New Audit and Evaluation 213
Recommendations
Recommendations Implemented by 253
HHS OpDivs
Expected Investigative Recoveries $892.3 Million
Criminal Actions 345
Civil Actions 324
Exclusions 1,365
Results for the Semiannual Reporting Period
During this semiannual reporting period (October 1, 2022, through March 31, 2023), we issued 62 audit
reports and 19 evaluation reports. Our audit work identified $200.1 million in expected recoveries, as well
as $277.2 million in questioned costs (costs questioned by OIG because of an alleged violation, costs not
supported by adequate documentation, or the expenditure of funds where the intended purpose is
unnecessary or unreasonable). During this reporting period, OIG made 213 new audit and evaluation
recommendations, which are crucial to encourage positive change in HHS programs. Meanwhile, HHS
OpDivs implemented 253 prior recommendations, leading to 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—including DOJ; Medicaid Fraud
Control Units (MFCUs); 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
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
work led to $892.3 million in expected investigative recoveries and 345 criminal actions during this
reporting period. OIG also took civil actions, such as assessing monetary penalties, against 324 individuals
and entities, and excluded 1,365 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,
2022, through March 31, 2023, organized by subject area. A comprehensive list of OIG work during the
reporting period follows, and Appendices A through F provide data to meet the reporting requirements in
the Inspector General Act of 1978.
Responding to the COVID-19 Pandemic and Other Emergencies
OIG has advanced four goals with respect to HHS’s COVID-19 response and recovery: (1) protect people;
(2) protect funds; (3) protect infrastructure; and (4) promote the effectiveness of HHS programs, now and
into the future. While HHS’s Public Health Emergency declaration is anticipated to end in May of 2023,
these four goals will continue to drive OIG’s strategic planning and mission execution in relation to COVID-
19. Additional information about the OIG COVID-19 strategic plan, emerging fraud schemes, and work
related to COVID-19 is available on our COVID-19 Portal.
Significant OIG oversight work completed during this reporting period related to the COVID-19 pandemic
includes the following reports:
• Home Health Agencies Used Multiple Strategies To Respond to the COVID-19 Pandemic, Although
Some Challenges Persist (OEI-01-21-00110), October 2022
• IHS Did Not Always Provide the Necessary Resources and Assistance To Help Ensure That Tribal
Programs Complied With All Requirements During Early COVID-19 Vaccination Program
Implementation (A-07-21-04125), October 2022
• During the Initial COVID-19 Response, HHS Personnel Who Interacted With Potentially Infected
Passengers Had Limited Protections (OEI-04-20-00360), October 2022
• Early Challenges Highlight Areas for Improvement in COVID-19 Vaccination Programs (OEI-04-21-
00190), January 2023
• Challenges With Vaccination Data Hinder State and Local Immunization Program Efforts To Combat
COVID-19 (OEI-05-22-00010), January 2023
OIG continues to work with Federal partners such as DOJ to identify and criminally prosecute bad actors
exploiting the COVID-19 response. For example, during this reporting period, an individual was sentenced
to 3 years of probation for creating false COVID-19 vaccine records. The individual, who worked as a data
entry specialist for a company providing vaccinations, created fraudulent vaccination cards and made false
vaccination entries to recordkeeping systems for 14 individuals.
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
Leveraging Oversight To Better Protect Nursing Home Residents
Improving nursing home care is a top priority for OIG. Decades of OIG oversight of nursing homes
revealed significant challenges and vulnerabilities, and the COVID-19 pandemic brought challenges at
nursing homes to the forefront. To better understand contributing factors; identify fraud, inefficiency, and
substandard care; and aid policymakers, our oversight work is guided by a three-part strategy:
• Performance: Understanding what drives nursing home performance, and in particular what
contributes to poorly performing nursing homes.
• Residents First: Ensuring that nursing homes prioritize quality of care and quality of life for
residents.
• Oversight: Ensuring that entities responsible for nursing home oversight—CMS and States—detect
problems quickly and insist on rapid remediation.
Currently, OIG has 26 ongoing audits and evaluations of nursing home issues. We are continuing to
monitor identified areas of concern, push for implementation of unimplemented recommendations, and
issue new recommendations as problems and solutions are identified. Information about ongoing nursing
home work can be found on OIG’s Nursing Homes website. Significant OIG work completed during this
reporting period related to protecting residents in nursing homes includes the following:
• Long-Term Trends of Psychotropic Drug Use in Nursing Homes (OEI-07-20-00500), November 2022
• More Than a Thousand Nursing Homes Reached Infection Rates of 75 Percent or More in the First
Year of the COVID-19 Pandemic; Better Protections Are Needed for Future Emergencies (OEI-02-20-
00491), January 2023
Promoting Program Integrity and Good Financial Stewardship in Traditional Medicare
The 2023 Medicare Trustees report projected that assets in the Part A trust fund will be depleted by 2033,
adding urgency to efforts to ensure good stewardship and appropriate use of scarce Medicare funds. OIG
recognizes the importance of identifying and mitigating fraud risks in the Medicare program and holding
accountable those who defraud Medicare, beneficiaries, and taxpayers.
Significant OIG work completed during this reporting period related to Medicare program integrity and
financial stewardship includes the following:
• Labs With Questionably High Billing for Additional Tests Alongside COVID-19 Tests Warrant Further
Scrutiny (OEI-09-20-00510), December 2022
• Medicare Part B Spending on Lab Tests Increased in 2021, Driven By Higher Volume of COVID-19
Tests, Genetic Tests, and Chemistry Tests (OEI-09-22-00400), December 2022
• Medicare Could Have Saved up to $216 Million Over 5 Years if Program Safeguards Had Prevented
At-Risk Payments for Definitive Drug Testing Services (A-09-21-03006), February 2023
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
OIG continues to coordinate with DOJ to identify and criminally prosecute bad actors in the Medicare
program. The following are two examples of successful criminal prosecutions related to traditional
Medicare during this reporting period:
• An owner and operator of five home health companies was sentenced to serve 30 months in
Federal prison followed by 3 years of supervised release for a home health fraud scheme and was
also ordered to pay $21,197,440 in restitution. From 2010 to 2015, these home health companies
submitted false claims to Medicare for home health services for patients who did not need or were
not provided services.
• A sales representative was sentenced to 25 months in prison and ordered to pay, along with yet-
to-be-sentenced defendants, a total of $2,954,585.90 for a kickback scheme. The representative
paid cash kickbacks to physicians in exchange for referrals and prescriptions directed to select
pharmacies and clinical laboratories.
OIG uses the Civil Monetary Penalties Law (CMPL) to settle liabilities with facilities who self-disclose
inappropriate billing practices. For example, during this reporting period, OIG entered into a
$14,351,283.06 settlement agreement with a facility that submitted incorrect claims to Medicare for
inpatient rehabilitation stays that did not meet coverage criteria.
Preventing Prescription Drug Misuse and Strengthening Substance Abuse Care
OIG continues to prioritize oversight and enforcement activities to protect enrollees from prescription drug
abuse and safeguard health care services for individuals suffering from substance abuse disorder.
OIG continues to coordinate with DOJ to identify and criminally prosecute bad actors in Federal health
care programs. The following are three examples of successful criminal prosecutions related to improper
prescriptions and distributions during this reporting period:
• A physician was sentenced to 16.5 years in prison for his role in a “shots-for-pills” scheme, whereby
patients were required to receive unnecessary back injections in exchange for prescriptions of
medically unnecessary opioids. These unnecessary injections and prescriptions resulted in more
than $250 million in false and fraudulent claims being submitted to Medicare, Medicaid, and other
health insurance programs.
• A physician was sentenced to 30 months in prison and was ordered to surrender his medical
license, pay $2,163,995 in restitution, and pay a $50,000 fine for conspiring with others to increase
the number of prescriptions for a specific central nervous system agent. Between October 2011
and April 2016, the physician received kickbacks for presentations, receiving $331,550 and writing
10,088 prescriptions for the drug—the highest in the country.
• A physician was sentenced to 20 years in prison for engaging in a massive multiyear scheme to bill
health care benefit programs for fraudulent tests and treatments for vulnerable patients seeking
treatment for drug and/or alcohol addiction. The physician, while serving as the Medical Director
for the treatment facility, signed standing orders for unnecessary urinalyses and blood tests, along
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
with other unnecessary addiction treatments.
OIG continues to exclude entities and individuals engaging in fraud and abuse from participation in health
care programs. For example, during this reporting period, OIG excluded an advanced practice nurse
practitioner for a period of 45 years based on a conviction related to the distribution of controlled
substances beyond the practice of medicine.
Ensuring Proper Departmental Management
OIG reviews programs across HHS to ensure that programs are being administered effectively, efficiently,
and without waste.
Significant OIG work completed during this reporting period related to proper departmental management
includes the following:
• FDA’s Approach to Overseeing Online Tobacco Retailers Needs Improvement (OEI-01-20-00241),
December 2022
• The National Institutes of Health and EcoHealth Alliance Did Not Effectively Monitor Awards and
Subawards, Resulting in Missed Opportunities to Oversee Research and Other Deficiencies (A-05-21-
00025), January 2023
• ASPR Could Improve Its Oversight of the Hospital Preparedness Program To Ensure That Crisis
Standards of Care Comply With Federal Nondiscrimination Laws (A-01-21-01502), January 2023
Promoting Integrity and Effectiveness in Medicare Advantage and Medicaid Managed
Care
Almost half of people with Medicare are currently enrolled in Medicare Advantage organizations.
Enrollment is expected to continue to grow to cover 53 percent—a majority of Medicare enrollees—by
2031.
Managed care is now the predominant payment model in Medicaid. State and Federal expenditures on
Medicaid managed care are growing. These expenditures totaled $421 billion and represented 59 percent
of all Medicaid expenditures in 2021.
Significant OIG work completed during this reporting period related to Medicare Advantage and Medicaid
managed care includes the following:
• CMS Generally Ensured That Medicare Part C and Part D Sponsors Did Not Pay Ineligible Providers
for Services to Medicare Beneficiaries (A-02-20-01027), October 2022
• Keystone First Should Improve Its Procedures for Reviewing Service Requests That Require Prior
Authorization (A-03-20-00201), December 2022
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
• The Inability To Identify Denied Claims in Medicare Advantage Hinders Fraud Oversight (OEI-03-21-
00380), February 2023
Safeguarding Medicaid Program Integrity
Medicaid is the largest Federal health care program, with nearly 93 million individuals enrolled as of
December 2022. Medicaid is administered by States per Federal requirements. The program is funded
jointly by the Federal Government and States. CMS estimated Federal and State Medicaid expenditures of
$734.0 billion in 2021.
Significant OIG work completed during this reporting period related to Medicaid program integrity
includes the following:
• Missouri Claimed Federal Medicaid Reimbursement for Tens of Millions in Consumer-Directed
Personal Care Assistance Services That Did Not Comply With Federal and State Requirements (A-07-
20-03243), February 2023
Reducing Prescription Drug Spending for HHS Programs and Enrollees
OIG performs work to assess areas in which HHS programs or people enrolled in them may be paying
more than necessary for vital drugs.
Significant OIG work completed during this reporting period related to prescription drug spending
includes the following:
• Comparison of Average Sales Prices and Average Manufacturer Prices: Results for the Second
Quarter of 2022 (OEI-03-23-00070), November 2022
• CMS Should Bolster Its Oversight of Manufacturer-Submitted Average Sales Price Data To Ensure
Accurate Part B Drug Payments (OEI-03-21-00390), December 2022
• Manufacturers May Need Additional Guidance To Ensure Consistent Calculations of Average Sales
Prices (OEI-BL-21-00330), December 2022
• Technical Assistance Brief: Implementation of Inflation-Indexed Rebates for Part B Drugs (OEI-BL-23-
00170), February 2023
• Comparison of Average Sales Prices and Average Manufacturer Prices: Results for the Third Quarter
of 2022 (OEI-03-23-00080), February 2023
• Some Skin Substitute Manufacturers Did Not Comply with New ASP Reporting Requirements (OEI-
BL-23-00010), March 2023
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
Ensuring Health and Safety of Vulnerable People Served by HHS
OIG has devoted substantial oversight efforts to protect vulnerable people—including the elderly, children,
and adults with developmental disabilities—who are served by HHS programs such as Medicare, Medicaid,
the Unaccompanied Children Program, and the Child Care and Development Fund.
Significant OIG work completed during this reporting period related to ensuring the health and safety of
vulnerable people served by HHS programs includes the following:
• For Medicaid-Enrolled Children Diagnosed With Lead Toxicity in Five States, Documentation
Reviewed for Diagnoses and Treatment Services Raises Concerns (OEI-07-18-00370), December 2022
• State Agencies Did Not Always Ensure That Children Missing From Foster Care Were Reported to the
National Center for Missing and Exploited Children in Accordance With Federal Requirements (A-07-
21-06102), March 2023
Cybersecurity Protection
OIG continues to recognize cybersecurity vulnerabilities as major risks to effectively managing and
safeguarding HHS’s programs. Oversight of HHS’s cybersecurity is being prioritized. Repeated
cyberattacks focused on accessing critical information in HHS systems added urgency to the task of
developing departmental cybersecurity safeguards—in addition to conducting normal operations—over
the course of the COVID-19 pandemic.
During this reporting period, OIG conducted work examining HHS’s cybersecurity controls to strengthen
HHS’s cybersecurity posture, including:
• FDA Should Improve Its Management of Contracts for the Acquisition of Information Technology (A-
18-21-11100), January 2023
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
Medicare and Medicaid Reports and Reviews
Medicare Program Reports and Reviews
Financial Management and Improper Payments
Payments Made to Providers Under the COVID-19 Accelerated and Advance Payments Program
Were Generally in Compliance With the CARES Act and Other Federal Requirements (A-05-20-
00053), October 2022
CMS generally made COVID-19 Accelerated and Advanced Payments (CAAP) Program payments to
providers in compliance with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
and other Federal requirements. Of the 109 providers in our sample, CMS appropriately made
CAAP Program payments to all 100 providers that we randomly selected. For the nine providers
under bankruptcy, CMS did not send a CAAP Program payment to six of the providers but did
make a CAAP Program payment to three of the providers.
The CAAP Program payments made to the three providers under bankruptcy occurred because
two Medicare Administrative Contractors (MACs) did not correctly match the provider’s request
against their bankruptcy databases, and one MAC did not update its bankruptcy database based
on bankruptcy information that was provided by CMS prior to approving the CAAP Program
payment request. For the three CAAP Program payments made to providers under bankruptcy,
the MACs immediately identified their errors after the payment and recovered the improper
payments.
Based on our sample, we found that CMS and its MACs generally made CAAP Program payments
to providers in compliance with the CARES Act and other Federal requirements. Although the
MACs erroneously approved CAAP Program payments to nine providers under bankruptcy, the
MACs immediately identified their errors, stopped payments to six providers, and recovered
improper payments made to the other three providers. Therefore, we do not have any
recommendations.
CMS Generally Ensured That Medicare Part C and Part D Sponsors Did Not Pay Ineligible Providers
for Services to Medicare Beneficiaries (A-02-20-01027), October 2022
CMS generally ensured that sponsors complied with Federal requirements for preventing payments
for Medicare services to ineligible providers. However, some sponsors submitted encounter and
prescription drug event (PDE) data to CMS indicating that ineligible providers rendered services
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and wrote prescriptions for Medicare beneficiaries. We identified 136 Part C sponsors and 62 Part
D sponsors that may have paid claims for health care services associated with ineligible providers.
The ineligible providers were able to submit these claims to plan sponsors because some sponsors
may not have had effective compliance programs in place to prevent, detect, and correct
noncompliance with CMS’s program requirements. Also, CMS may not have adequately monitored
the sponsors to ensure that their compliance programs were effective. Although Part D regulations
expressly require sponsors and their pharmacy benefit managers (PBMs) to reject pharmacy claims
unless they contain active and valid provider identification numbers, CMS does not have similar
requirements for claims submitted to Part C sponsors. Additionally, CMS system edits did not
properly work to identify all ineligible providers after sponsors submitted their encounter and PDE
data to CMS. As a result, CMS used data from services associated with ineligible providers in its
risk adjustment of capitation payments to the sponsors.
We make a series of recommendations for CMS to direct Part C and Part D sponsors to ensure that
only eligible providers receive payments for Medicare services. We also recommend that CMS
strengthen its oversight of sponsors and provider identifiers to prevent deactivated and deceased
providers from receiving payments for Medicare services. CMS concurred with one of our
recommendations and requested that we remove our remaining recommendations.
Medicare Improperly Paid Physicians for Co-Surgery and Assistant-at-Surgery Services That Were
Billed Without the Appropriate Payment Modifiers (A-01-20-00503), November 2022
From our 100 statistically sampled services, we found that 69 did not comply with Federal
requirements. These statistically sampled services included 49 that were incorrectly billed without
the co-surgery modifier, 14 that were incorrectly billed without an assistant-at-surgery modifier,
and 6 that were incorrectly billed as duplicate services. These statistically sampled service errors
resulted in overpayments of $31,545. Based on the results of our statistical sample, we estimated
that Medicare made $4.9 million in improper payments for physician surgical services during our
audit period. In addition, based on our review of the 127 corresponding services, we found that 62
of these corresponding services did not comply with Federal requirements. These corresponding
service errors resulted in overpayments of $24,471. Altogether, these errors occurred primarily
because CMS did not have adequate system controls to identify and prevent such payments.
We recommend that CMS: (1) recover the portion of the $56,016 in Medicare Part B overpayments
that are within the 4-year claim reopening period; (2) instruct the Medicare contractors to notify
appropriate providers so that they can exercise reasonable diligence to identify, report, and return
any overpayments in accordance with the 60-day rule; (3) strengthen its system controls to detect
and prevent improper payments to providers for incorrectly billed co-surgery services, assistant-at-
surgery services, and duplicate services—which could have saved approximately $4.9 million
during our audit period; and (4) update Medicare requirements and corresponding educational
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material. CMS concurred with our recommendations and described actions that it planned to take
to address them.
The Number of Beneficiaries Who Received Medicare Part B Clinical Laboratory Tests Decreased
During the First 10 Months of the COVID-19 Pandemic (A-09-21-03004), November 2022
During the first 10 months of the COVID-19 pandemic (March through December 2020), the
number of beneficiaries who received Medicare Part B clinical laboratory (lab) tests decreased for:
(1) all lab tests and (2) lab tests associated with certain chronic medical conditions (i.e., diabetes,
kidney disease, and heart disease) common among Medicare beneficiaries. From March through
December in 2016, 2017, and 2018, and for the immediate pre-pandemic period (March through
December 2019), the number of beneficiaries who received lab tests paid for by Medicare
decreased by 1 percent or less in each year. However, for the pandemic period, the number of
beneficiaries who received lab tests decreased by about 9 percent.
Our comparison of the numbers of beneficiaries who received lab tests during the pandemic and
pre-pandemic periods identified, among other trends, the following: (1) The number of
beneficiaries who received lab tests had the highest percentage decreases during the first 3
months of the pandemic period when compared with the same months during the pre-pandemic
period; and (2) the number of beneficiaries with diabetes, kidney disease, and heart disease who
received common lab tests for those conditions decreased during the pandemic period. The
results of our data analysis suggest that the COVID-19 pandemic contributed to these decreases.
Lab tests are important for beneficiaries with chronic medical conditions, which are associated with
hospitalizations, billions of dollars in Medicare costs, and deaths.
The information in this report is provided for informational purposes only and therefore the report
does not contain any recommendations.
Medicare Providers Did Not Always Comply With Federal Requirements When Billing for Advance
Care Planning (A-06-20-04008), November 2022
Medicare providers that billed for advanced care planning (ACP) services in an office setting did
not always comply with Federal requirements. On the basis of our sample results, we estimated
that Medicare providers in an office setting were paid approximately $42.3 million for ACP services
that did not comply with Federal requirements. These payments occurred because the providers
did not understand the Federal requirements for billing ACP services.
We recommend that CMS educate providers on documentation and time requirements for ACP
services to comply with Federal requirements. Had the requirements been followed, Medicare
could have saved an estimated $42.3 million during our audit period. In addition, CMS should
instruct the MACs to recoup $33,332 for ACP services paid in error for claims in our sample. Also,
CMS should instruct the MACs to notify appropriate providers so that they can exercise reasonable
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diligence in identifying, reporting, and returning any overpayments in accordance with the 60-day
rule. Finally, CMS should establish Medicare requirements that address when it is appropriate to
provide multiple ACP services for a single beneficiary and how these services should be
documented when required to support the need for multiple ACP services.
CMS concurred with our first three recommendations but not our fourth recommendation. After
reviewing CMS’s comments, we revised our fourth recommendation to address when multiple ACP
services are appropriate, and the documentation required to support the need for these services.
National Government Services, Inc., Accurately Calculated Hospice Cap Amounts but Did Not Collect
All Cap Overpayments (A-06-21-08004), November 2022
National Government Services, Inc. (NGS) accurately calculated all cap amounts and collected or
attempted to collect $211.3 million of the $213.4 million in total cap overpayments in accordance
with CMS requirements. However, NGS did not attempt to collect the remaining $2.1 million in net
lookback overpayments because of its internal policy of not pursuing lookback cap calculation
amounts that were less than a set threshold.
Additionally, against CMS requirements, NGS instructed hospices to wait to submit the
overpayments calculated on their cap determination notices until the hospice received a demand
letter from NGS, which took an average of more than 2 months after the due date for hospices to
file the cap determination notices. Of 30 judgmentally sampled hospices, 13 reported cap
overpayments, totaling $8.1 million, on their cap determination notices. Nine of those 13 hospices
did not remit their overpayments, totaling $6.1 million, when they filed their cap determination
notices as required.
We recommend that NGS: (1) collect $2.1 million in lookback overpayments and return $22,576 in
lookback refunds resulting from 2019 hospice cap calculations for lookback years, (2) discontinue
its internal policy of waiving certain overpayment collections related to lookback years and start
collecting all hospice cap overpayments and paying refunds in accordance with CMS requirements,
and (3) change its instructions on the cap determination notices to follow the CMS requirement
that hospices remit overpayments at the time they submit their cap determination notice. NGS
concurred with our third recommendation but not with our first and second recommendations.
Accuracy of Risk-Adjusted Payments to Medicare Advantage Organizations
CMS makes risk-adjusted payments to Medicare Advantage organizations for which the payment
level is higher based on the diagnoses that enrollees receive. CMS relies on Medicare Advantage
organizations to collect diagnosis codes from their providers and submit these codes to CMS.
Some diagnoses are at higher risk for being miscoded, which may result in overpayments from
CMS. During this reporting period, OIG conducted six audits that were designed to assess whether
selected diagnosis codes that Medicare Advantage organizations submitted to CMS for use in
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Department of Health and Human Services, Office of Inspector General
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CMS’s risk adjustment program complied with Federal requirements. For instances in which the
diagnoses were not supported in the medical records, we calculated the net overpayments that the
audited Medicare Advantage organizations received. Complete recommendations and providers’
responses can be found in the final reports summarized here.
Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Blue Cross &
Blue Shield of Rhode Island (H4152) Submitted to CMS (A-01-20-00500), November
2022
With respect to the nine high-risk groups covered by our audit, most of the
selected diagnosis codes that Blue Cross & Blue Shield of Rhode Island (BCBS RI)
submitted to CMS for use in CMS’s risk adjustment program did not comply with
Federal requirements. As demonstrated by the errors found in our sample, BCBS
RI’s policies and procedures to prevent, detect, and correct noncompliance with
CMS’s program requirements could be improved. As a result, the Hierarchical
Condition Categories for these high-risk diagnosis codes were not validated. Based
on our sample results, we estimated that BCBS RI received at least $4.8 million in
net overpayments for 2016 and 2017.
Medicare Advantage Compliance Audit of Specific Diagnosis Codes That California
Physicians’ Service, Inc. (Contract H0504) Submitted to CMS (A-09-19-03001),
November 2022
With respect to the seven high-risk groups covered by our audit, most of the
selected diagnosis codes that California Physicians’ Service, Inc. (CPS) submitted to
CMS for use in CMS’s risk adjustment program did not comply with Federal
requirements. As demonstrated by the errors in our sample, the policies and
procedures that CPS used to prevent, detect, and correct noncompliance with
CMS’s program requirements, as mandated by Federal regulations, could be
improved. On the basis of our sample results, we estimated that CPS received at
least $2 million of net overpayments for these high-risk diagnosis codes for 2015
and 2016.
Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Cigna-
HealthSpring of Tennessee, Inc. (Contract H4454) Submitted to CMS (A-07-19-01193),
December 2022
With respect to the 10 high-risk groups covered by our audit, most of the selected
diagnosis codes that Cigna-HealthSpring of Tennessee, Inc. submitted to CMS for
use in CMS’s risk adjustment program did not comply with Federal requirements.
As demonstrated by the errors found in our sample, Cigna’s policies and
procedures to prevent, detect, and correct noncompliance with CMS’s program
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requirements, as mandated by Federal regulations, could be improved. On the
basis of our sample results, we estimated that Cigna received at least $5.9 million in
net overpayments for 2016 and 2017.
Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Geisinger
Health Plan (Contract H3954) Submitted to CMS (A-09-21-03011), March 2023
With respect to the nine high-risk groups covered by our audit, most of the
selected diagnosis codes that Geisinger Health Plan submitted to CMS for use in
CMS’s risk adjustment program did not comply with Federal requirements. For 224
of the 270 sampled enrollee-years, either the medical records that Geisinger
provided did not support the diagnosis codes, or Geisinger could not locate the
medical records to support the diagnosis codes, resulting in $566,476 of net
overpayments. As demonstrated by the errors found in our sample, Geisinger’s
policies and procedures to prevent, detect, and correct noncompliance with CMS’s
program requirements could be improved. On the basis of our sample results, we
estimated that Geisinger received at least $6.5 million of net overpayments for 2016
and 2017. In accordance with recently updated Federal regulations, we recommend
that Geisinger refund the $566,476 of net overpayments.
Medicare Advantage Compliance Audit of Specific Diagnosis Codes That MCS
Advantage, Inc. (Contract H5577) Submitted to CMS (A-02-20-01008), March 2023
With respect to the nine high-risk groups covered by our audit, most of the
selected diagnosis codes for the sampled enrollee-years that MCS Advantage, Inc.,
submitted to CMS for use in CMS’s risk adjustment program did not comply with
Federal requirements. For 183 of the 280 sampled enrollee-years, the diagnosis
codes were not supported in the medical records, resulting in $220,577 of net
overpayments. These errors occurred because MCS’s policies and procedures to
prevent, detect, and correct noncompliance with CMS’s program requirements, as
mandated by Federal regulations, could be improved. On the basis of our sample
results, we estimated that MCS received at least $6.2 million of net overpayments
for 2016 and 2017. In accordance with recently updated Federal regulations, we
recommend that MCS refund the $220,577 of net overpayments.
Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Cigna-
HealthSpring Life & Health Insurance Company, Inc. (Contract H4513) Submitted to
CMS (A-07-19-01192), March 2023
With respect to the nine high-risk groups covered by our audit, most of the
selected diagnosis codes that Cigna-HealthSpring Life & Health Insurance
Company, Inc., submitted to CMS for use in CMS’s risk adjustment program did not
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comply with Federal requirements. Specifically, for 200 of the 300 sampled
enrollee-years, the medical records that Cigna provided did not support the
diagnosis codes, resulting in $468,372 in net overpayments. As demonstrated by
the errors found in our sample, Cigna’s policies and procedures to prevent, detect,
and correct noncompliance with CMS’s program requirements could be improved.
On the basis of our sample results, we estimated that Cigna received at least $6.24
million in net overpayments for 2016 and 2017. In accordance with recently
updated Federal regulations, we recommend that Cigna refund the $468,372 of net
overpayments.
Mandated Analysis of Home Health Service Utilization From January 2016 Through March 2022 (A-
05-20-00031), December 2022
We determined that, during the audit period, beneficiary utilization of home health services
decreased for urban counties and rural counties in the “high utilization” and “all other” categories,
while utilization in the “low population density” category remained steady. We further determined
that the number of home health episodes decreased for all urban and rural county categories.
Many variables during the audit period, including the COVID-19 pandemic, may have affected
utilization of services. Therefore, we could not determine the cause of any changes in utilization of
services during this period.
Lawmakers designed the new rural add-on methodology to provide higher add-on percentages to
rural counties in the “low population density” and “all other” categories. The methodology shifted
the distribution of add-on payments from the “high utilization” category to the “low population
density” and “all other” categories. We originally planned to use Federal Information Processing
Standards (FIPS) data to analyze utilization from January 2016 through March 2022, but we were
unable to do so because the FIPS data were incomplete.
We recommend that CMS take the following steps to improve FIPS code reporting: (1) update the
home health Pricer logic to check for missing and invalid FIPS codes on all home health claims and
work with MACs to ensure that these claims are returned to providers for correction and (2) re-
educate providers on the requirement for all home health claims to be submitted with the FIPS
code for the county where the service was provided. CMS concurred with our second
recommendation but not with our first recommendation.
Providers Did Not Always Comply With Federal Requirements When Claiming Medicare Bad Debts
(A-07-20-02825), December 2022
Providers did not always comply with Federal requirements when claiming Medicare
reimbursement for Medicare bad debts. Of the 148 Medicare bad debts in our nonstatistical
sample, 86 were associated with beneficiaries whom providers had deemed indigent and for
whom, therefore, no reasonable collection efforts were required. Providers did not comply with
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Federal requirements when claiming 18 of the remaining 62 Medicare bad debts. We identified
four additional bad debts for which the amounts that providers claimed did not reflect the
amounts owed by the beneficiaries. These 22 bad debts resulted in a total of $29,787 in
unallowable Medicare reimbursement. CMS inappropriately reimbursed these amounts because
the MACs did not concentrate on reviewing bad debts when performing audits of cost reports
during our audit period.
For our second objective, the 67 selected providers’ policies and procedures for collecting from
beneficiaries Medicare deductible and coinsurance amounts that providers claimed as Medicare
bad debts complied with Federal requirements. These policies and procedures were similar to the
providers’ policies and procedures for collecting non-Medicare bad debts.
We recommend that CMS consider issuing instructions to the MACs that require or encourage
more review of Medicare bad debts claimed on cost reports, such as defining thresholds beyond
which individual Medicare bad debts would trigger an audit, and that direct the MACs to revise
their cost report audit work plans accordingly. CMS concurred with our recommendation and
stated that it would consider our findings when issuing future guidance to the MACs.
Medicare Part B Spending on Lab Tests Increased in 2021, Driven By Higher Volume of COVID-19
Tests, Genetic Tests, and Chemistry Tests (OEI-09-22-00400), December 2022
Medicare Part B spent $9.3 billion on laboratory tests in 2021, a 17-percent increase from 2020.
The increase in spending was driven by increased volume in three test categories: COVID-19 tests,
genetic tests, and chemistry tests. Genetic tests exceeded pre-pandemic spending levels, while
chemistry tests increased from 2020 but did not fully return to pre-pandemic spending levels.
However, the decline between pre-pandemic levels for chemistry tests and the 2020 and 2021
levels could indicate that people are not seeking the routine or preventive care appointments
where these tests are ordered. The second year in a row of low volume for chemistry tests raises
questions about the pandemic’s long-term impact on Medicare enrollee health. The data brief
contained no recommendations.
Medicare Improperly Paid Physicians for Epidural Steroid Injection Sessions (A-07-21-00618), March
2023
Medicare did not always pay physicians for epidural steroid injection sessions in accordance with
Medicare requirements. For our audit period, Medicare improperly paid physicians $3.6 million on
behalf of beneficiaries who received more epidural steroid injection sessions than were permitted
by the coverage limitations in the applicable local coverage determinations. These improper
payments occurred because neither CMS’s oversight nor the MACs’ oversight was adequate to
prevent or detect improper payments for epidural steroid injection sessions.
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After our audit period, all 12 MAC jurisdictions updated their local coverage determinations with
revised coverage limitations that were specific to epidural steroid injections.
We recommend that CMS: (1) direct the MACs to recover the $3.6 million in improper payments;
(2) instruct the MACs, based on the results of this audit, to notify appropriate physicians so that
they can exercise reasonable diligence to identify, report, and return any overpayments in
accordance with the 60-day rule; (3) assess the effectiveness of oversight mechanisms put in place
after our audit period that are specific to preventing or detecting improper payments to physicians
for more than the allowed number of epidural steroid injection sessions, and modify the
mechanisms if necessary; and (4) direct the MACs (or other designated entities) to review a sample
of claims for injection sessions administered after our audit period but before the revised coverage
limitations became effective to identify and recover any improper payments. CMS concurred with
all of our recommendations and described actions that it had taken or planned to take to address
them.
Medicare Improperly Paid Physicians an Estimated $30 Million for Spinal Facet-Joint Interventions (A-
09-22-03006), March 2023
Medicare did not pay physicians for some spinal facet-joint interventions in accordance with
Medicare requirements and guidance. Of the 120 sampled sessions, 54 complied with Medicare
requirements; however, the remaining 66 sessions did not comply with 1 or more of the
requirements. As a result, Medicare made improper payments to physicians in the amount of
$18,084. On the basis of our sample results, we estimated that Medicare improperly paid
physicians $29.6 million for facet-joint interventions for our audit period.
In addition, of the 120 sampled sessions, 43 had claim lines that were billed for at least 1
therapeutic facet-joint injection. Of these 43 sessions, 33 sessions did not meet Medicare
guidance, i.e., had claim lines that should have been billed for diagnostic instead of therapeutic
facet-joint injections. This improper billing did not result in improper payments because Medicare
pays the same amount for diagnostic and therapeutic facet-joint injections.
We recommend that CMS direct the MACs to recover $18,084 in improper payments made to
physicians for the 66 sampled sessions. We also recommend that CMS encourage the MACs to: (1)
develop collaborative training programs for all of the MAC jurisdictions to use that are specific to
Medicare requirements for facet-joint interventions, which could have saved an estimated $29.6
million for our audit period; and (2) develop solutions to prevent the incorrect billing of diagnostic
facet-joint injections as therapeutic facet-joint injections, such as developing additional education
or updating guidance on how each type of injection should be billed. The report contains one
other recommendation. CMS concurred with our recommendations, noting that it will direct the
MACs to recover the identified overpayments. In addition, CMS will notify the MACs of this audit
so that they can determine whether additional education on proper billing is necessary.
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Quality of Care, Safety, and Access
Home Health Agencies Used Multiple Strategies To Respond to the COVID-19 Pandemic, Although
Some Challenges Persist (OEI-01-21-00110), October 2022
Home health agencies (HHAs) used their own strategies to help address challenges that the
COVID-19 pandemic presented related to staffing and infection control, and HHAs benefited from
CMS support such as regulatory flexibilities and expanded telehealth allowances, but challenges
with staffing and telehealth persist. Our findings can help CMS identify how to help HHAs prepare
for and respond to future emergencies, as well as to evaluate how changes to the home health
landscape can better serve patients.
CMS concurred with our recommendations that CMS: (1) evaluate how HHAs are using telehealth—
specifically, the types of services and the characteristics of patients who benefit from these services;
(2) inform decision making and evaluate how the regulatory flexibilities it has offered in response
to the COVID-19 Public Health Emergency affect the quality of home health care; and (3) in
collaboration with the Administration for Strategic Preparedness and Response’s (ASPR’s) Technical
Resources, Assistance Center, and Information Exchange, apply lessons learned from the COVID-19
pandemic to update and/or develop emergency preparedness trainings and materials for HHAs on
responding to infectious disease outbreaks.
Long-Term Trends of Psychotropic Drug Use in Nursing Homes (OEI-07-20-00500), November 2022
Overall, psychotropic drug use in nursing homes was relatively constant from 2011 through 2019;
about 80 percent of Medicare’s long-stay nursing home residents were prescribed a psychotropic
drug. While CMS focused its efforts on reducing the use of antipsychotics, the use of
anticonvulsants increased. Additionally, over time the number of unsupported schizophrenia
diagnoses increased and, in 2019, these diagnoses were concentrated in relatively few nursing
homes. Our findings identified ways that CMS can enhance its monitoring of the use of
psychotropic drugs in nursing homes.
CMS concurred with our recommendations that CMS: (1) evaluate the use of psychotropic drugs
among nursing home residents to determine whether additional action is needed to ensure that
use among residents is appropriate and (2) use data to identify nursing homes or nursing home
characteristics that are associated with a higher use of psychotropic drugs and focus oversight on
nursing homes in which trends may signal inappropriate use.
CMS did not concur with our recommendation for CMS to expand the required data elements on
Medicare Part D claims to include a diagnosis code.
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More Than a Thousand Nursing Homes Reached Infection Rates of 75 Percent or More in the First
Year of the COVID-19 Pandemic; Better Protections Are Needed for Future Emergencies (OEI-02-20-
00491), January 2023
Nursing homes had an initial surge of COVID-19 cases during the spring of 2020 and then a
greater surge during the fall of that year, well after they were known to be vulnerable. More than
1,300 nursing homes had extremely high infection rates during these surges. In each of these
nursing homes, 75 percent or more of the Medicare beneficiaries were diagnosed with COVID-19
or likely COVID-19 during the 2-month surge periods. These nursing homes were more common
and geographically widespread during the second surge than the first, even though they were
known to be vulnerable. Facilities with these extremely high infection rates experienced an average
overall mortality rate approaching 20 percent—roughly double that of other nursing homes. Our
findings indicate that significant changes are needed to protect residents and better prepare for
current and future health emergencies. Moreover, our findings lend urgency to the Biden
administration’s recent initiative to improve safety and quality care in nursing homes.
CMS concurred with our recommendations that CMS: (1) re-examine current nursing staff
requirements and revise them as necessary and (2) target nursing homes in most need of infection
control intervention and provide enhanced oversight and technical assistance to these facilities as
appropriate.
CMS neither concurred nor nonconcurred with our recommendation to improve how surveys
identify infection control risks to nursing home residents and strengthen guidance on assessing the
scope and severity of those risks.
Program Integrity
CMS Can Use OIG Audit Reports To Improve Its Oversight of Hospital Compliance (A-04-21-08084),
October 2022
Of the 387 improperly paid claims identified in our previous 12 hospital compliance audits, 333
were inpatient claims that resulted in $5,260,147 in net overpayments, and 54 were outpatient
claims that resulted in $53,729 in net overpayments. Of these 387 improperly paid claims, 229
were appealed at the first level; 22 were overturned. In addition, 126 claims were appealed at the
second level; 6 were overturned. As a result, 359 overpayment determinations totaling $5,041,721
remained. After considering the results of the first and second levels of appeal, we determined
that the total overpayments received by the 12 hospitals was $82 million. CMS has taken some
actions to ensure that the recommendations in our previous 12 audits were implemented.
However, CMS provided us with insufficient information regarding our recommendations to repay
funds, and we could not determine whether it had implemented our recommendations. In
addition, CMS provided us with insufficient information regarding our recommendations to follow
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the 60-day rule; therefore, we could not ensure that our recommendations were implemented.
With respect to our recommendations to strengthen internal controls, CMS acted on most but not
all of these recommendations.
We make several recommendations, including that CMS: (1) continue to follow up on the
overpayment recovery recommendations contained in the 12 audits and (2) improve tracking and
responding on the status of claims identified in our reports as they proceed through the appeals
process. CMS concurred with three of our recommendations but requested we remove two others.
Labs With Questionably High Billing for Additional Tests Alongside COVID-19 Tests Warrant Further
Scrutiny (OEI-09-20-00510), December 2022
In 2020, 378 labs billed Medicare Part B for questionably high levels of add-on tests alongside
COVID-19 tests. These outlier labs consisted of labs for which: (1) add-on tests constituted a high
proportion of each lab’s total number of tests and/or (2) add-on tests constituted a high
proportion of each lab’s total payments for tests. Some outlier labs often billed for add-on tests in
combinations that had little if any variation across patients. The add-on tests significantly
increased the per-claim amounts that Medicare Part B paid to these labs. Such high levels of
billing for add-on tests raise concern about potential waste or fraud, suggesting a need for further
scrutiny of billing by these labs. OIG has referred these labs to CMS for further review. This report
contained no recommendations.
The Inability To Identify Denied Claims in Medicare Advantage Hinders Fraud Oversight (OEI-03-21-
00380), February 2023
Detailed data about the services provided to enrollees are essential for combating fraud and abuse
in Medicare and Medicaid. We found that there is no definitive method to identify denied claims in
the Medicare Advantage encounter data, and the lack of a denied-claim indicator in these data
hinders program integrity oversight. Oversight entities—including CMS program integrity staff,
OIG investigators and analysts, and DOJ health care fraud staff—reported that a denied-claim
indicator in the Medicare Advantage encounter data would enhance the efficiency, scope, and
accuracy of their efforts to combat fraud, waste, and abuse. However, CMS does not require
Medicare Advantage organizations to submit a denied-claim indicator because CMS’s Medicare
Plan Payment Group does not need this indicator to determine payments to Medicare Advantage
organizations. To strengthen Medicare Advantage program oversight and combat fraud, we
recommend that CMS require Medicare Advantage organizations to definitively indicate on
Medicare Advantage encounter data records when they have denied payment for a service on a
claim. CMS did not concur or nonconcur with our recommendation.
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Department of Health and Human Services, Office of Inspector General
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Drug Pricing and Reimbursement
Comparison of Average Sales Prices and Average Manufacturer Prices: Results for the Second
Quarter of 2022 (OEI-03-23-00070), November 2022, and Comparison of Average Sales Prices and
Average Manufacturer Prices: Results for the Third Quarter of 2022 (OEI-03-23-00080), February
2023
OIG identified 7 drug codes in the second quarter of 2022 and 15 drug codes in the third quarter of
2022 that met CMS’s criteria for price substitution. OIG compares average sales prices (ASPs) to
average manufacturer prices every quarter and identifies Part B–covered drug codes eligible for
price substitutions. If OIG finds that the ASP for a drug exceeds the average manufacturer price 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.
CMS Should Bolster Its Oversight of Manufacturer-Submitted Average Sales Price Data To Ensure
Accurate Part B Drug Payments (OEI-03-21-00390), December 2022
While CMS has some oversight procedures in place to review data on ASPs for Medicare Part B
drugs, gaps exist in its oversight that allowed inaccurate data to impact Part B payment amounts.
Because of invalid or missing ASP data, CMS could not calculate an ASP-based payment amount
for 8 percent of drug codes at least once between 2016 and 2020. In total, we found that 24
percent of drug codes were missing ASP data for one or more specific drugs within that code in at
least one quarter between 2016 and 2020. In addition, CMS reported that late ASP data
submissions from manufacturers substantially hindered its ability to conduct effective oversight.
CMS concurred with our recommendation that CMS build a strategy to strengthen its internal
controls for ensuring the accuracy of Part B drug payments.
Manufacturers May Need Additional Guidance To Ensure Consistent Calculations of Average Sales
Prices (OEI-BL-21-00330), December 2022
We identified a small number of inconsistencies in how ASPs for Medicare Part B drugs are
calculated and nine specific areas for which manufacturers believe additional CMS guidance may
be needed to ensure more accurate ASP calculations. The manufacturers we surveyed also
expressed concerns that CMS has published comparatively fewer regulations and less overall
guidance regarding the calculation of the ASPs used in Medicare compared to the average
manufacturer prices and best prices used in Medicaid. As a result, manufacturers say they must
rely on reasonable assumptions to a much greater extent when calculating ASP than they do with
these other payment benchmarks.
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Department of Health and Human Services, Office of Inspector General
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CMS concurred with our recommendation that CMS actively review current guidance related to the
nine areas identified in our report and determine whether additional guidance would ensure more
accurate and consistent ASP calculations.
Technical Assistance Brief: Implementation of Inflation-Indexed Rebates for Part B Drugs (OEI-BL-23-
00170), February 2023
On the basis of our prior oversight work, we anticipate that unless CMS takes action to remedy
several administrative issues, it will face the following challenges in implementing inflation-indexed
rebates for Part B drugs:
• identifying products subject to Part B rebates and
• excluding claims from Part B rebate calculations that were already subject to:
o rebates under the Medicaid Drug Rebate Program and
o discounts under the 340B Drug Discount Program.
We propose potential solutions to mitigate each administrative issue. This technical assistance
brief contained no recommendations.
Medicare Could Have Saved up to $216 Million Over 5 Years if Program Safeguards Had Prevented
At-Risk Payments for Definitive Drug Testing Services (A-09-21-03006), February 2023
From January 2016 through December 2020 (audit period), Medicare paid $704.2 million for
definitive drug testing services that were at risk for noncompliance with Medicare requirements.
These payments were for the definitive drug testing service with the highest reimbursement
amount (procedure code G0483). These payments were made to 1,062 at-risk providers that
routinely billed this procedure code and may not have been reasonable and necessary.
Presumptive drug testing preceded most definitive drug testing services billed by both the at-risk
and other providers, but the at-risk providers may not have always used presumptive testing to
determine the number of drug classes that needed to be tested using definitive drug testing.
Although the at-risk providers billed a significantly higher percentage of definitive drug testing
services using procedure code G0483 than the other providers, the at-risk and other providers had
similar characteristics (such as frequency of testing). This suggests that the at-risk providers may
have been able to bill for definitive drug testing services using primarily procedure codes with
lower reimbursement amounts, as the other providers did.
We recommend that CMS: (1) expand program safeguards to prevent and detect at-risk payments
to at-risk providers for procedure code G0483; (2) review at-risk payments made to at-risk
providers during and after our audit period and recover any overpayments; (3) notify appropriate
providers to exercise reasonable diligence to identify, report, and return any overpayments; and (4)
educate providers that received payments that did not comply with Medicare requirements. CMS
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Department of Health and Human Services, Office of Inspector General
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concurred with our first recommendation, did not concur with our second and third
recommendations, and did not state whether it concurred with our fourth recommendation.
Medicare Part D Plan Sponsors and CMS Did Not Ensure That Transmucosal Immediate-Release
Fentanyl Drugs Were Dispensed Only to Beneficiaries Who Had a Cancer Diagnosis
(A‑09‑20‑03033), February 2023
Medicare Part D plan sponsors and CMS did not ensure that all transmucosal immediate-release
fentanyl (TIRF) drugs were dispensed in accordance with Medicare requirements. Medicare
requires that TIRF drugs be dispensed only for the medically accepted indication of breakthrough
cancer pain. For 7,552 PDEs, plan sponsors approved TIRF drugs dispensed to 810 beneficiaries
who did not have a cancer diagnosis in their Medicare claims history to support a medically
accepted indication for use of these drugs. As a result, plan sponsors paid $86.2 million in
unallowable Part D total costs. Plan sponsors also approved 2,023 PDEs totaling $19.7 million for
TIRF drugs for 176 beneficiaries whose most recent cancer diagnosis in their Medicare claims
history was more than 1 year before the drugs were dispensed. Although we did not determine
these PDEs to be unallowable, they were at high risk of being unallowable.
We recommend that CMS work with its plan sponsors to: (1) delete the PDEs related to the $86.2
million of unallowable Medicare Part D total costs and determine after reconciliation the impact to
the Federal Government and (2) identify and delete any unallowable PDEs related to the $19.7
million of Part D total costs for beneficiaries whose most recent Medicare claim with a cancer
diagnosis was for services provided more than 1 year before the TIRF drugs were dispensed, and
determine the impact to the Federal Government. The report contains three other
recommendations. CMS did not concur with four of our five recommendations and did not
explicitly state whether it concurred with our fifth recommendation.
Some Skin Substitute Manufacturers Did Not Comply with New ASP Reporting Requirements (OEI-
BL-23-00010), March 2023.
Despite new legislative requirements, CMS was unable to calculate ASP-based payment amounts in
the first quarter of 2023 for 30 of 68 skin substitute billing codes because their manufacturers did
not report the required ASP data. According to our analysis, Part B payment amounts would be
reduced substantially if ASPs were consistently reported and used, potentially leading to tens of
millions of dollars in savings each quarter. However, CMS faces several unique hurdles in
implementing ASP-based reimbursement for skin substitutes. For example, because skin
substitutes are not actually prescription drugs, CMS cannot employ its usual methods and data
sources to corroborate manufacturer-reported data on pricing and packaging. CMS is actively
considering changes to the payment methodology for skin substitutes and, in January 2023,
conducted a skin substitutes Town Hall to address stakeholder concerns and discuss potential
payment approaches.
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
Medicaid Program Reports and Reviews
Financial Management and Improper Payments
Colorado Did Not Report and Refund the Correct Federal Share of Medicaid-Related Overpayments
for 70 Percent of the State’s Medicaid Fraud Control Unit Cases (A-07-21-02834), October 2022
Colorado did not report and return the correct Federal share of MFCU-determined Medicaid
overpayments identified during the period of October 1, 2014, through December 31, 2020.
Colorado reported $5.8 million ($3.1 million Federal share) for this period but should have reported
MFCU-determined Medicaid overpayments totaling $13 million ($6.8 million Federal share) for the
179 MFCU cases that we reviewed. Colorado did not report some or all of the correct Federal share
for 126 cases (70 percent of the 179 MFCU cases we reviewed). Furthermore, Colorado did not
correctly report to CMS MFCU-determined Medicaid overpayments related to fraud, waste, and
abuse. Although Colorado had policies and procedures for the reporting of Medicaid
overpayments, these policies and procedures were not always adequate.
We recommend that Colorado refund $3.7 million (Federal share) in unreported MFCU-determined
Medicaid overpayments that related to paid claims and court-ordered awards that have been
recovered and collected. We also recommend that Colorado determine the value of overpayments
identified after our audit period that have been recovered and collected but not reported, report
them to CMS, and refund the Federal share. We make additional procedural recommendations.
Colorado agreed with the amount of unreported MFCU-determined Medicaid overpayments but
disagreed with refunding the overpayments. Colorado said that it would review the cases to
ensure that the amounts are not uncollectable and return the applicable Federal share by
September 30, 2023. Colorado agreed with our other recommendations and described corrective
actions.
California Made Almost $16 Million in Unallowable Capitation Payments for Beneficiaries With
Multiple Client Index Numbers (A-04-21-07097), October 2022
California made unallowable capitation payments on behalf of Medicaid beneficiaries with multiple
Client Index Numbers (CINs). Of the 100 beneficiary matches in our sample, California correctly
made capitation payments on behalf of individuals associated with 24 beneficiary matches.
However, it incorrectly made capitation payments that totaled $657,057 ($328,529 Federal share)
on behalf of individuals associated with the remaining 76 matches. The unallowable capitation
payments occurred because the associated beneficiaries had multiple Medicaid CINs. According to
California, human error caused it to assign multiple CINs to these beneficiaries. In addition,
California used an algorithm to create the Beneficiary Name and Date of Birth Match Report that
was too broad and did not require county staff to review training materials. We estimated that
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Department of Health and Human Services, Office of Inspector General
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California made unallowable capitation payments totaling approximately $31.4 million ($15.7 million
Federal share) on behalf of beneficiaries with multiple CINs.
We recommend that California: (1) refund to the Federal Government approximately $15.7 million
in unallowable payments, (2) review capitation payments that fell outside of our audit period and
refund any unallowable payments, (3) ensure that the algorithm used to create its revised
Beneficiary Name and Date of Birth Match Reports is effective at detecting individuals with multiple
records, (4) require county staff to review training materials on the prevention of issuing multiple
CINs, and (5) enhance its controls to ensure that no beneficiary is issued multiple CINs. California
concurred with our recommendations and described the corrective actions that it has taken or
plans to take.
Iowa Implemented Most of Our Prior Audit Recommendations and Generally Complied With Federal
and State Requirements for Reporting and Monitoring Major Incidents (A-07-21-06105), November
2022
Iowa implemented the nine recommendations from our prior audit and generally complied with
Federal and State requirements for reporting and monitoring critical incidents involving Medicaid
members with developmental disabilities residing in group homes. However, Iowa’s corrective
actions for one recommendation in our prior audit were not completely effective in addressing the
associated finding. Iowa did not ensure that community-based providers properly reported all
major incidents involving members in waiver programs to the State. Although Iowa achieved
significant progress since our prior audit, its internal controls did not ensure that providers properly
reported all major incidents because the State did not periodically update the diagnosis code list it
used to identify Medicaid claims involving major incidents.
We recommend that Iowa continue to strengthen internal controls to ensure full compliance with
Federal and State requirements, to include periodically updating the list of diagnosis codes used
when reviewing the Medicaid emergency room claims data to ensure that all Critical Incident
Reports for major incidents are submitted as required. Iowa concurred with our findings, agreed
with our recommendation, described corrective actions that it has taken or plans to take, and
projected the completion dates for the corrective actions.
Puerto Rico MMIS and E&E Systems Security Controls Were Generally Effective, but Some
Improvements Are Needed (A-18-20-08005), November 2022
The Puerto Rico Medicaid Management Information System (MMIS) and Eligibility and Enrollment
(E&E) system had reasonable security controls to prevent our simulated cyberattacks from resulting
in a successful compromise; however, some of those security controls could be further enhanced to
better prevent certain cyberattacks. Puerto Rico did not correctly implement five security controls
required by the National Institute of Standards and Technology (NIST) Special Publication (SP) 800-
53, Revision 4. We estimated that the level of sophistication required by an adversary to
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
compromise the Puerto Rico MMIS and E&E system was significant. Still, some improvements were
needed in Puerto Rico detection controls to better identify cyberattacks against its MMIS and E&E
system and respond appropriately. Potential reasons why Puerto Rico did not implement these
security controls correctly may be that software developers did not follow secure coding standards
to prevent security vulnerabilities or system administrators were not aware of Government
standards or industry best practices that require securely configuring systems before deployment
to production. Puerto Rico's procedures for periodically assessing the implementation of the NIST
security controls were not effective.
We recommend that Puerto Rico: (1) remediate the vulnerabilities related to the five security
control findings identified by properly implementing and regularly assessing the associated NIST
SP 800-53 controls and (2) assess the cryptographic configurations of public servers at least
annually and adjust if the requirements have changed. Puerto Rico concurred with our
recommendations and stated that it has addressed and remediated our findings.
The Centers for Medicare & Medicaid Services' Review Contractors Generally Conducted Medicaid
Fee-for-Service Claim Reviews for Selected States Under the Payment Error Rate Measurement
Program in Accordance with Federal and State Requirements (A-04-21-00132), November 2022
CMS’s contractors generally conducted Medicaid fee-for-service (FFS) reviews in accordance with
Federal and State requirements. Of the 100 sampled Medicaid Payment Error Rate Measurement
FFS claims we reviewed, 90 claims were correctly determined and adequately documented.
However, claim review determinations for the remaining 10 claims were not documented and
therefore may be incorrect. Based on our sample results, we estimated that 10 percent of the
sampled Medicaid FFS claims reviewed by CMS’s contractors were not documented, and claim
review determinations for these claims may not have been correct. We also estimated the total
amount paid related to these claims to be $6,411 (Federal share) during our audit period.
CMS’s contractors did not always maintain documentation of their claim review determinations
because CMS did not include specific contract language requiring its contractors to maintain all
documentation to support the contractors’ Medicaid FFS claim review determinations for non-error
claims.
We are not making recommendations because CMS took action to address the deficiencies we
identified.
Illinois Generally Complied With Requirements for Claiming Medicaid Reimbursement for Telehealth
Payments During COVID-19 (A-05-21-00035), December 2022
Illinois generally made telehealth payments that were in accordance with Federal and State
requirements. Of the 584,492 Medicaid FFS telehealth payments in our population, 583,960
payments were in compliance with the requirements, but the remaining 532 payments were not.
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Department of Health and Human Services, Office of Inspector General
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For 249 payments not in compliance, the same provider was paid both the originating site fee and
the distant site fee. Additionally, there were 146 payments made as duplicate payments for the
same services provided to the same recipient on the same day. Also, 22 of the payments were
inaccurately billed as both originating and distant site fees. Finally, providers incorrectly used the
telehealth modifier with 35 different procedure codes that are for in-person services. A total of 115
telehealth payments were identified with these codes that could not be performed via
telecommunication systems. This noncompliance occurred because the State agency did not
adequately monitor compliance. The State agency also did not establish a list of acceptable
telehealth procedure codes. Based on our testing, we calculated that the unallowable payments
totaled approximately $16,154 ($9,832 Federal share) during our audit period.
We recommend that Illinois: (1) refund up to $9,832 to the Federal Government and enhance the
monitoring of provider compliance by conducting periodic reviews of telehealth payments for
compliance with requirements and (2) establish a list of acceptable telehealth procedure codes.
Illinois agreed with our findings and provided information on actions that it plans to take to
address our recommendations.
The Centers for Medicare & Medicaid Services' Review Contractor Did Not Document Medicaid
Managed Care Payment Review Determinations Made Under the Payment Error Rate Measurement
Program (A-04-21-09003), December 2022
CMS’s review contractor conducted the majority of its Medicaid managed care payment reviews in
accordance with Federal requirements. Of the 100 sampled Medicaid managed care payments we
reviewed, 60 were correctly determined. However, we were not able to determine whether the
remaining 40 payment review determinations were correct because the payment reviews were not
documented and therefore may be incorrect. Based on the sample results, we estimated 40
percent of the sampled Medicaid managed care payment determinations made by CMS’s review
contractor may not have been correct. We also estimated the total amount related to these 40
claims to be $229,435 ($123,520 Federal share) during our audit period. CMS’s review contractor
did not maintain documentation of its payment review determinations because CMS did not
include specific contract and statement-of-work language requiring its review contractor to
maintain all documentation to support its Medicaid managed care payment review determinations
for non-errors.
We are not making recommendations because CMS took action to address the deficiencies we
identified. Specifically, after our audit period, for the reporting year 2020, 2021, and 2022 Payment
Error Rate Measurement cycles, CMS exercised an optional task for the contract with the review
contractor, which added language requiring that the review contractor maintain relevant
documentation for non-error (i.e., correct) payments. In its contract renewal occurring in March
2021, CMS replaced the optional task with a permanent requirement for the review contractor to
maintain relevant documentation for non-error payments.
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
Missouri Claimed Federal Medicaid Reimbursement for Tens of Millions in Consumer-Directed
Personal Care Assistance Services That Did Not Comply With Federal and State Requirements
(A-07-20-03243), February 2023
Missouri did not always ensure that the consumer-directed personal care assistance (PCA) services
for which it claimed Federal Medicaid reimbursement during FYs 2018 and 2019 complied with
Federal and State requirements. Specifically, 17 of the 150 sampled items were at least partially
unallowable. Based on our sample results, we estimated that Missouri claimed at least $52.5
million ($34.2 million Federal share) for unallowable consumer-directed PCA services during FYs
2018 and 2019. In addition, timesheets for 46 of the 150 sampled items did not identify the specific
services that were performed in accordance with the plans of care. We are setting aside an
estimated $133.8 million ($87 million Federal share) for CMS resolution associated with these 46
items.
Additionally, Missouri did not have established and implemented pandemic emergency
preparedness standards and protocols within the consumer-directed PCA program. Most
providers for the sampled items did not have any emergency preparedness documentation for a
pandemic response.
We recommend that Missouri: (1) refund the $34.2 million (Federal share) in overpayments to the
Federal Government and (2) work with CMS to determine the allowability of the $87 million
(Federal share) and refund any amount that is determined to be unallowable. We also make
procedural recommendations. Missouri disagreed with most of our findings and recommendations
and gave us additional documentation. We revised the number of sampled items in error, revised
our statistical estimate and the amount conveyed in our first recommendation, and removed one
procedural recommendation for this final report.
Florida Made Capitation Payments for Enrollees Who Were Concurrently Enrolled in a Medicaid
Managed Care Program in Another State (A-05-21-00028), February 2023
Florida made August 2020 Medicaid managed care capitation payments totaling $15.8 million on
behalf of 55,164 enrollees who were concurrently enrolled for Medicaid benefits in another State.
Of the 100 enrollees in our stratified random sample, we determined that 56 enrollees were
residing and enrolled for Medicaid benefits in Florida. However, Florida made August 2020
capitation payments totaling $22,624 ($15,336 Federal share) on behalf of 44 Florida Medicaid
managed care enrollees who were residing and concurrently enrolled for Medicaid in another
State. On the basis of our sample results, we estimated that Florida incurred costs of $6.9 million
($4.7 million Federal share) for August 2020 capitation payments made on behalf of enrollees who
were residing and concurrently enrolled in another State.
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Department of Health and Human Services, Office of Inspector General
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We recommend that Florida: (1) resume and enhance procedures that are in accordance with
Federal requirements and the State’s unwinding plan to identify and disenroll enrollees who are
residing and enrolled in Medicaid managed care in another State when the Public Health
Emergency ends and (2) work with CMS to consider the potential use of CMS's Transformed
Medicaid Statistical Information System data to identify potential cases of concurrent enrollment.
In written comments on our draft report, Florida concurred with our recommendations and
described the actions that it plans to take to address them.
Quality of Care, Safety, and Access
For Medicaid-Enrolled Children Diagnosed With Lead Toxicity in Five States, Documentation
Reviewed for Diagnoses and Treatment Services Raises Concerns (OEI-07-18-00370),December 2022
In five States, most of the medical records that our study reviewed for children with a lead toxicity
diagnosis in their Medicaid claims lacked adequate information to confirm a diagnosis of lead
toxicity, and among children for whom there was sufficient medical record documentation to
confirm their diagnosis, many did not receive comprehensive followup testing and treatment
services, as recommended, for their identified blood lead level. Our findings can help CMS address
concerns related to oversight of the Early and Periodic Screening, Diagnostic, and Treatment
(EPSDT) program and ensure that Medicaid-enrolled children with lead toxicity are given the best
possible health care. CMS concurred with our recommendations that CMS: (1) explore the
discrepancy between Medicaid claims data and medical documentation for lead toxicity and
implement solutions to ensure better oversight of the EPSDT program and (2) issue guidance to
reiterate State obligations under the EPSDT benefit to ensure access to services to correct or
ameliorate confirmed blood lead levels identified during screenings.
Keystone First Should Improve Its Procedures for Reviewing Service Requests That Require Prior
Authorization (A-03-20-00201), December 2022
Keystone First did not comply with Federal and State requirements when denying 76 of the denied
service requests in our sample. Specifically, Keystone First should not have denied the overnight
care portion of 10 denied pediatric skilled nursing service requests on the basis that it had not
received work or school verification documentation for the caregiver. For 72 denied service
requests, Keystone First’s denial letter, based on Pennsylvania’s required form, did not inform
beneficiaries of their right to request a State fair hearing after exhausting the managed care
organization’s (MCO’s) appeals process.
We recommend that Keystone First coordinate with Pennsylvania to: (1) update Keystone First’s
administrative process to require that medical directors assess whether overnight care requests
meet the medical necessity requirement, even if some documentation is missing; (2) review all
pediatric skilled nursing service requests for which overnight care was completely denied and
determine whether overnight care requests meet the medical necessity requirement; and (3)
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Department of Health and Human Services, Office of Inspector General
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implement a revised initial denial notice to explain that a beneficiary has the right to request a
State fair hearing after exhausting the MCO’s appeals process. We also recommend that
Pennsylvania revise its denial notice template. In written comments on our draft report, Keystone
First stated that it concurred with the intent of all three recommendations addressed to it.
Pennsylvania also concurred with the recommendation addressed to it and concurred with the first
and third recommendations addressed to Keystone First but did not concur with the second
recommendation due, in part, to a COVID-19 waiver.
Drug Spending and Reimbursement
During this reporting period, OIG conducted a number of audits that were designed to assess
whether States properly billed manufacturers for physician-administered drugs. Prior OIG reviews
and investigations have identified areas at risk for noncompliance with Medicaid billing
requirements. Complete recommendations and State responses can be found in the final reports
summarized here.
Mississippi Did Not Always Invoice Rebates to Manufacturers for Physician-
Administered Drugs (A-07-21-06101), October 2022
Mississippi did not always comply with Federal Medicaid requirements for invoicing
manufacturers for rebates for physician-administered drugs. Mississippi did not
invoice for or collect from manufacturers rebates associated with $2.2 million
(Federal share) in physician-administered drugs. Of this amount, $820,732 (Federal
share) was for single-source drugs and $395,621 (Federal share) was for top-20
multiple-source drugs.
Further, we were unable to determine whether Mississippi was required to invoice
for rebates associated with $1 million (Federal share) for other multiple-source
physician-administered drug claims. In addition, Mississippi did not invoice for or
collect from manufacturers $35.6 million (Federal share) in rebates for physician-
administered drugs invoiced on crossover claims, for which beneficiaries are eligible
for both Medicare and Medicaid. Mississippi’s internal controls did not always
ensure that the drug utilization data it collected were used to invoice manufacturers
and collect rebates.
North Carolina Did Not Always Invoice Rebates to Manufacturers for Physician-
Administered Drugs (A-07-21-07002), February 2023
North Carolina did not always comply with Federal Medicaid requirements for
invoicing manufacturers for rebates for physician-administered drugs. North
Carolina did not invoice for or collect from manufacturers rebates associated with
$3.1 million (Federal share) in physician-administered drugs. Of this amount, $2.3
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Department of Health and Human Services, Office of Inspector General
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million (Federal share) was for single-source drugs and $734,000 (Federal share)
was for top-20 multiple-source drugs.
Further, we were unable to determine whether, in some cases, North Carolina was
required to invoice for rebates for other multiple-source physician-administered
drug claims. North Carolina did not invoice the manufacturers for rebates
associated with claims totaling $685,000 (Federal share) for these multiple-source
drugs.
Florida Did Not Invoice Manufacturers for Some Rebates for Physician-Administered
Drugs Dispensed to Enrollees of Medicaid Managed-Care Organizations (A-04-21-
07098), March 2023
Florida generally complied with Federal Medicaid requirements for invoicing
manufacturers for rebates for physician-administered drugs dispensed to MCO
enrollees. However, Florida did not invoice for or collect from manufacturers an
estimated $57,700 ($35,126 Federal share) in rebates for single-source physician-
administered drugs. Furthermore, we were unable to determine whether, in some
cases, Florida was required to invoice for rebates for other multiple-source
physician-administered drug claims. Florida did not invoice manufacturers for
rebates totaling $40,635 ($24,772 Federal share) for these multiple-source drugs.
Georgia Did Not Always Invoice Rebates to Manufacturers for Pharmacy and
Physician-Administered Drugs (A-04-21-08089), March 2023
Georgia did not always comply with Federal Medicaid requirements for invoicing
manufacturers for rebates for pharmacy and physician-administered drugs.
Georgia did not invoice for or collect from manufacturers rebates associated with
$953,067 ($644,802 Federal share) in single-source physician-administered drug
claims and $13,785 ($9,325 Federal share) in top-20 multiple-source physician-
administered drug claims. Further, we were unable to determine whether, in some
cases, Georgia was required to invoice for rebates for other multiple-source
physician-administered drug claims. Georgia did not invoice the manufacturers for
rebates associated with the claims totaling $78,013 ($52,837 Federal share) for these
multiple-source drugs. Additionally, OIG identified $1.8 million ($1.2 million Federal
share) in single-source pharmacy drug claims and $526,240 ($360,454 Federal
share) in multiple-source pharmacy drug claims that were not rebated for prior to
our audit.
The District of Columbia Has Taken Significant Steps To Ensure Accountability Over Amounts
Managed Care Organizations Paid to Pharmacy Benefit Managers (A-03-20-00200), March 2023
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Department of Health and Human Services, Office of Inspector General
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The District of Columbia provided some oversight of its MCOs with the intent of ensuring adequate
accountability over amounts paid for prescription benefits to its PBMs. This oversight consisted of
guidance requiring MCOs to report spread pricing. However, the amounts reported were
aggregated with other amounts and as a result did not provide transparency over the amount of
the funds that was attributable to spread pricing. We found that PBMs kept $23.3 million in spread
pricing during our audit period. Spread pricing may increase the cost of Medicaid prescriptions for
both the MCO and the Medicaid program and, if not correctly accounted for, inflate the cost of the
drugs. Limiting spread pricing may decrease Federal and State spending through lower payments
to MCOs.
We recommend that the District develop policies and procedures for validating MCO, PBM, and
pharmacy transactions on a periodic basis to ensure transparency of costs associated with the
prescription drug program. The District concurred with our recommendation and asked for
clarification and guidance regarding the amounts or percentages that are deemed appropriate for
PBMs to retain under the practice of spread pricing.
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
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 at
a level higher than warranted); illegal billing, sale, and diversion of prescription drugs; marketing 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 Enforcement Actions website.
During this semiannual reporting period, we reported 318 criminal and 318 civil actions against individuals
or entities that engaged in offenses related to health care. We also reported more than $626.8 million in
investigative receivables due to HHS and more than $207 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 that follows.
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Department of Health and Human Services, Office of Inspector General
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COVID-19 Enforcement Activities
The following case example involves COVID-19 enforcement activities:
Connecticut – On November 4, 2022, Zaya Powell, of Waterbury, was sentenced to 3 years
of probation for creating false COVID-19 vaccine records for several individuals. Judge
Meyer also ordered Powell to pay a $5,000 fine and perform 200 hours of community
service. Between August and October 2021, Powell created fraudulent vaccination records
in the Vaccine Administration Management System for 14 different individuals. The
fraudulent cards included lot numbers of genuine vaccines that were administered to other
patients.
Home Health
The following case example involves home health fraud:
Texas – On October 31, 2022, Felix Amos, of Houston, was sentenced to serve 30 months in
Federal prison followed by 3 years of supervised release for conspiracy to commit health
care fraud. He was further ordered to pay $21,197,440 in restitution. Oluyemisi Amos (Felix
Amos’s wife), 41, of Houston, previously pled guilty and later received a sentence of 72
months in prison. In addition, on March 22, a jury returned guilty verdicts against Fausat
Adekunle, 39, of Richmond, on 10 counts following a 4-day jury trial. Adekunle was later
ordered to serve 144 months in Federal prison to be immediately followed by 3 years of
supervised release, and to pay restitution of $21,197,440.14. Evidence and testimony
revealed that the three conspired to submit claims to Medicare for home health services for
patients who did not need services or did not receive services and for whom physicians had
not ordered such services. Furthermore, billing emails showed that many of the claims
Adekunle submitted were for Medicare beneficiaries who were dead for more than 3 years
or incarcerated in prison and were thus not eligible for home health services.
Substance Use Disorder Treatment
The following case example involves a treatment facility:
Florida – On January 9, 2023, Michael Ligotti was sentenced to 20 years in prison for
engaging in a massive multiyear scheme to bill health care benefit programs for fraudulent
tests and treatments for vulnerable patients seeking treatment for drug and/or alcohol
addiction. This case was brought as part of DOJ’s Sober Homes Initiative. According to
court documents, Ligotti, D.O., of Delray Beach, served as Medical Director or Authorizing
Physician for more than 50 sober homes, substance use disorder treatment facilities, and
clinical testing laboratories in the Palm Beach County area, often signing standing orders
for expensive, medically unnecessary urine drug tests for patients at various addiction
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Department of Health and Human Services, Office of Inspector General
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treatment facilities. As a result of this conduct, which took place from 2011 to 2020, health
care benefit programs were billed more than $746 million and paid approximately $127
million for fraudulent urine drug tests and addiction treatments. Ligotti pled guilty to
conspiracy to commit health care and wire fraud in the Southern District of Florida in
October 2022 and was ordered at sentencing to surrender his medical license.
Prescription Drugs
The following case examples involve prescription drugs:
Michigan – On January 30, 2023, Francisco Patino, M.D., was sentenced to 16.5 years in
prison for his role in a health care fraud scheme that resulted in more than $250 million in
false and fraudulent claims being submitted to Medicare, Medicaid, and other health
insurance programs. Patino exploited patients suffering from addiction by administering
unnecessary injections, illegally distributed more than 6.6 million doses of medically
unnecessary opioids, and engaged in money laundering. Patino played a critical role in
developing and implementing a “shots-for-pills” protocol at several pain clinics, whereby
patients were required to receive unnecessary back injections in exchange for prescriptions
for high doses of medically unnecessary and addictive opioids. In September 2021, Patino
was convicted at trial in the Eastern District of Michigan of conspiracy to commit health
care fraud and wire fraud, health care fraud, conspiracy to defraud the United States and
pay and receive health care kickbacks, conspiracy to commit money laundering, and money
laundering.
Pennsylvania – On January 19, 2023, Larry J. Goisse, Jr., was sentenced to 24 months in
prison to be followed by 3 years of supervised release on charges of drug diversion and
health care fraud. On October 4, 2022, Goisse pled guilty to one count of an indictment
charging him with drug diversion and five counts of an information charging him with
health care fraud.
In connection with the guilty plea, the court was advised that in September 2018 through
January 2019, Goisse, a former certified nurse practitioner, illegally prescribed the scheduled
drug Adderall after his State medical license was revoked and he lost his Drug Enforcement
Administration registration. In order to continue to receive payments from Medicare,
Goisse submitted claims to Medicare for office visits under a coworker’s license after
suspension.
Kickbacks
The following case examples involve kickbacks:
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Florida – On November 1, 2022, Modernizing Medicine, Inc. (ModMed), an electronic health
record (EHR) technology vendor located in Boca Raton, Florida, agreed to pay $45 million
to resolve allegations that it violated the False Claims Act by accepting and providing
unlawful remuneration in exchange for referrals and by causing its users to report
inaccurate information in connection with claims for Federal incentive payments. In a
complaint filed in conjunction with the settlement, the United States alleged that ModMed
violated the False Claims Act and the anti-kickback statute through three marketing
programs. First, ModMed solicited and received kickbacks from Miraca Life Sciences, Inc.
(Miraca) in exchange for recommending and arranging for ModMed’s users to utilize
Miraca’s pathology lab services. Second, ModMed conspired with Miraca to improperly
donate ModMed’s EHR to health care providers in an effort to increase lab orders to Miraca
and simultaneously add customers to ModMed’s user base. Third, ModMed paid kickbacks
to its current health care provider customers and to other influential sources in the health
care industry to recommend ModMed’s EHR and refer potential customers to ModMed. As
a result of this conduct, the Government alleged that ModMed improperly generated sales
for itself and for Miraca, while causing health care providers to submit false claims for
reimbursement to the Federal Government for pathology services and for incentive
payments from HHS for the adoption and “meaningful use” of ModMed’s EHR technology.
In January 2019, Miraca (known as Inform Diagnostics as of 2018) agreed to pay $63.5
million to resolve allegations that it violated the anti-kickback statute and the physician
self-referral law (Stark Law) by providing referring physicians with subsidies for EHR systems
and free or discounted technology consulting services.
Massachusetts – On January 20, 2023, DePuy Synthes, Inc. (DePuy), a subsidiary of Johnson
& Johnson, agreed to pay $9.75 million to resolve allegations that it violated the False
Claims Act by paying kickbacks to an orthopedic surgeon based in Massachusetts to induce
the use of DePuy products. DePuy violated the anti-kickback statute and caused the
submission of false or fraudulent claims to Medicare by paying the orthopedic surgeon
kickbacks in the form of free spinal implants and tools for use in surgeries that the surgeon
performed overseas to induce that surgeon to use DePuy products in surgeries performed
in the United States. DePuy has admitted that from at least July 2013 through February
2018, DePuy, acting through certain former sales representatives, gave the Massachusetts
surgeon thousands of dollars’ worth of free DePuy implants and instruments, including
cages, rods, screws, plates, and surgical instrumentation, that the surgeon used to perform
surgeries overseas for patients who were not Federal health care beneficiaries. Of the $9.75
million to be paid by DePuy, approximately $7.23 million will be returned to the Federal
Government, and approximately $2.52 million will be returned to Massachusetts, which
jointly funded claims for surgeries involving DePuy devices that were submitted to the
Massachusetts Medicaid program.
New York – On December 1, 2022, two New York diagnostic testing facility owners were
sentenced to 3 years in prison for their roles in a more than $18 million health care fraud
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scheme. According to court documents, Tea Kaganovich, 50, and Ramazi Mitaishvili, 62,
both of Brooklyn, are a married couple that co-owned several diagnostic testing facilities in
Brooklyn. The couple paid more than $18 million in kickbacks for the referral of
beneficiaries who submitted themselves to diagnostic testing and other purported medical
services. Kaganovich and Mitaishvili also falsely reported to the Internal Revenue Service
that the illegal kickback payments were legitimate business expenses and therefore
submitted tax forms that underreported business income and claimed deductions to which
they were not entitled.
Ohio – On February 3, 2023, Deepak Raheja, of Hudson, was sentenced to 30 months in
prison and ordered to surrender his medical license, pay $2,163,995 in restitution, and pay a
$50,000 fine. Between February 2011 and July 2016, Raheja and co-defendants Frank
Mazzucco, Gregory Hayslette, and Bhupinder Sawhny conspired together to increase the
number of prescriptions that Raheja and Sawhny wrote for Nuedexta, a prescription drug
that treats pseudobulbar affect (PBA), in exchange for the payment of monetary kickbacks
and other items of value. Mazzucco and Hayslette were employed as pharmaceutical sales
representatives by Avanir Pharmaceuticals (Avanir) in the region where Raheja and Sawhny
practiced medicine. Avanir promoted Nuedexta through a speaker’s bureau, under which
Avanir representatives engaged doctors to speak about and promote Nuedexta to other
medical professionals. Raheja received approximately $1,500 for each of these purported
presentations. During this timeframe, Raheja received approximately $331,550 in payments
from Avanir and wrote approximately 10,088 Nuedexta prescriptions—the highest in the
country. Raheja and Sawhny took steps in return, including writing more Nuedexta
prescriptions, which caused the submission of bills to Medicare and Medicaid for Nuedexta
prescriptions for patients that did not have PBA, falsely diagnosing patients with PBA, and
recording fictitious symptoms in patient records to support a diagnosis of PBA.
Texas – On November 23, 2022, Lindell King and Ynedra Diggs were sentenced for a $1
million Medicare fraud scheme, including violations of the Federal anti-kickback statute.
King, of Missouri City, was sentenced to 60 months in prison. Diggs, also of Missouri City,
was sentenced to 70 months in prison. King and Diggs were also ordered to pay
$537,992.55 in restitution. According to court documents and evidence presented at trial,
both Diggs and King were patient recruiters who owned and operated group homes in
which Medicare beneficiaries lived. In exchange for sending their group home residents to
Behavioral Medicine of Houston (BMH), a community mental health center that purported
to provide partial hospitalization services, BMH paid Diggs, King, and other patient
recruiters illegal kickbacks in cash and by check, often concealed as payment for
“transportation” or other sham services. During the conspiracy, BMH fraudulently billed
approximately $1 million to Medicare in claims related to patients it received in exchange
for the kickbacks paid to Diggs and King.
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Nursing Homes
The following case example involves a nursing home:
California – On November 29, 2022, Tranquility Incorporated, a corporation doing business
as San Miguel Villa, a 190-bed nursing home located in Concord, agreed to pay $2.3 million
to settle allegations that it submitted false claims by billing the Medicare and Medi-Cal
programs for substandard nursing home services. The settlement resolves allegations that
from 2012 to 2017 San Miguel Villa submitted, or caused to be submitted, claims to the
Medicare and Medi-Cal programs for payment of its services that were grossly substandard
and failed to meet minimum required standards of skilled nursing care in multiple ways.
The United States alleges that nursing home residents at San Miguel Villa were
overmedicated with psychotropic drugs, suffered excessive falls, were exposed to resident-
on-resident altercations, and experienced other mental and physical harm.
Durable Medical Equipment
The following case example involves durable medical equipment:
Illinois – On January 4, 2023, Jet Medical, Inc. (Jet) agreed to pay $200,000 to resolve
criminal allegations relating to a migraine headache treatment device, and Jet and two
related companies agreed to pay another $545,000 in a civil settlement involving the same
device. Between April 2014 and April 2019, Jet introduced into interstate commerce devices
that were misbranded under the Federal Food, Drug, and Cosmetic Act because Jet did not
obtain approval or clearance from the Food and Drug Administration (FDA) prior to
distributing the devices. Jet’s device, the Allevio SPG Nerve Block Catheter (Allevio), was
intended to treat migraine headaches by administering nerve blocks to the sphenopalatine
ganglion (SPG), a collection of nerves located deep in the midface of the skull. The
information alleges that Jet never sought approval or clearance from FDA to distribute the
Allevio for this intended use, nor did Jet conduct an investigational study regarding the
Allevio’s safety and effectiveness when used as intended.
Medicare Fraud Strike Force Activities
In 2007, Medicare Fraud Strike Force teams began an effort to combine resources of Federal, State, and
local law enforcement entities to prevent and combat health care fraud, waste, and abuse. These
partnerships among OIG and HHS, DOJ, U.S. Attorneys’ Offices, the Federal Bureau of Investigation (FBI),
and State and local law enforcement agencies have a common goal: to analyze health care fraud data and
investigative intelligence to quickly identify fraud and bring prosecutions. Strike Force teams operate in 11
areas: Miami and Tampa/Orlando, Florida; Dallas and Houston, Texas; Los Angeles, California; Detroit,
Michigan; Brooklyn, New York; Baton Rouge and New Orleans, Louisiana; Chicago, Illinois; and Newark,
New Jersey/Philadelphia, Pennsylvania; along with a Corporate Strike Force located in Washington, DC.
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Department of Health and Human Services, Office of Inspector General
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During this semiannual reporting period, Strike Force efforts resulted in the filing of charges against 97
individuals or entities, 98 criminal actions, and more than $239 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 the Drug Enforcement Administration, FBI, and
the MFCUs to provide investigative support. Cases involve physicians and pharmacies that are
responsible for medically unnecessary opioid prescriptions and dangerous drug combinations that are
being paid for by Medicare and Medicaid. In many instances, there are other allegations of
wrongdoing relating to kickbacks, health care fraud, and quality of care, including patient overdoses
and deaths.
The following case examples involve Strike Force cases:
Maryland – On November 18, 2022, Edward T. Buford, III, was sentenced to 30 months in Federal
prison followed by 3 years of supervised release for conspiracy to commit mail fraud and health
care fraud. Buford was also ordered to pay $1,267,630 in restitution. Buford was a licensed dentist
in Washington, DC and the owner and Chief Executive Officer of International Dental Associates,
Inc. (IDA), a dental clinic located in Washington, DC. According to his guilty plea, from January
2013 to May 2018, Buford led a scheme to file fraudulent Medicaid claims for dental services to
Medicaid beneficiaries and recruited Medicaid beneficiaries to fuel the scheme through the
payment of kickbacks and bribes. Buford caused the submission of Medicaid claims for a variety of
dental services, including dentures. As part of the conspiracy, Buford paid kickbacks to patient
recruiters in exchange for referring Medicaid beneficiaries to IDA for dental services. Buford stored
hundreds of undelivered dentures on IDA’s premises, many of which had been billed to and paid
for by Medicaid. As part of the scheme, Buford maintained a post office box in Silver Spring,
Maryland as IDA’s billing address and received the fraudulently obtained payments at that location.
This was a joint investigation with the FBI, the Social Security Administration-OIG, and the MFCU.
Mississippi – On October 18, 2022, sales representative Logan Power was sentenced to 25 months
in prison and ordered to pay a total of $2,954,585.90 in restitution jointly with other yet-to-be-
sentenced defendants. Power worked as a sales representative for a pharmacy in Baton Rouge,
Louisiana that dispensed "foot bath" medications, as well as a laboratory in Glen Allen, Virginia that
performed expensive genetic testing on toenail samples. Power was paid kickbacks for steering
referrals and prescriptions from podiatrists with whom he had relationships to select pharmacies
and laboratories. Power then paid cash kickbacks to those podiatrists in exchange for their
referrals and prescriptions. In total, Power paid approximately $133,000 in cash kickbacks to three
Mississippi podiatrists: Dr. Carey Williams, Dr. Marion Lund, and Dr. Jared Spicer. In July 2020,
Power was captured on video paying a cash kickback to a cooperating doctor. On October 5, 2021,
Power pled guilty to one count of conspiracy to defraud the United States. In August 2022, Dr.
Spicer pled guilty to one count of conspiracy to commit health care fraud, and in February 2023 he
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Department of Health and Human Services, Office of Inspector General
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was sentenced to 3 years of probation. In September 2022, Dr. Williams pled guilty to one count
of conspiracy to commit health care fraud and is awaiting sentencing. In February 2023, Dr. Lund
pled guilty to one count of conspiracy to commit health care fraud and is awaiting sentencing.
This was a joint investigation with the Department of Defense OIG (DOD-OIG)/Defense Criminal
Investigative Service.
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 on OIG's Compliance Guidance website.
American Indian/Alaska Native Compliance Trainings
OIG provides a free online training series, Improving Health and Well-Being in American Indian and
Alaska Native Communities Through Compliance, for grantees and health care providers who serve
American Indian/Alaska Native (AI/AN) communities. The training series covers topics such as
compliance; fraud, waste, and abuse; and health care quality, including how OIG works with the
AI/AN community to combat the opioid epidemic and to protect patients from sexual abuse. The
training series includes web-based trainings, job aids, and videos, which can be accessed on OIG’s
IHS Training website.
Whistleblower Protection Training
In addition to training for health care providers, OIG provides training to HHS employees,
contractors, and award recipients on Federal whistleblower protections and prohibitions against
retaliation. This training is provided by the HHS Whistleblower Protection Coordinator within OIG’s
Office of Counsel to the Inspector General and is conducted in coordination with HHS OpDivs and
Staff Divisions (StaffDivs). OIG also provides training videos, materials, and FAQs about
whistleblower protections, which can be accessed on OIG’s Whistleblower Protection website.
Most Wanted Fugitives List
OIG’s Most Wanted Fugitives website continues to garner national and international attention and has
greatly assisted in helping to capture fugitives charged with defrauding Federal health care programs and
stealing millions of taxpayer dollars. The Most Wanted Fugitives website is continually updated and
features a profile for each fugitive as well as an online tip form and a hotline number for individuals to
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Department of Health and Human Services, Office of Inspector General
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report fugitive-related information to OIG, in English or Spanish, 24 hours a day, 365 days a year. The
Most Wanted Fugitives list is available on OIG’s Fugitives website. During this semiannual reporting
period, 2 fugitives were captured.
The following case examples involve a captured fugitive:
Florida – On November 16, 2022, Jeyker Herrera Felipe (Herrera), the owner of AD Pharmacy, was
sentenced to 24 months in prison and 3 years of supervised release for one count of health care
fraud. Herrera was also ordered to pay $615,725 in restitution plus $100 in court assessments.
Herrera was indicted on October 2, 2012, in the Southern District of Florida and was charged with
five counts of health care fraud. Herrera had already left the United States when HHS-OIG and FBI
agents executed Herrera’s arrest warrant and were unable to locate him. On March 2, 2022,
Herrera was arrested entering the United States in El Paso, Texas based on the outstanding arrest
and indictment from 2012. On September 13, 2022, Herrera pled guilty to one count of health care
fraud; all other counts were dismissed by the United States.
Florida – On February 22, 2023, Emilio Mendez, the owner of Complete Pharmacy, was sentenced
to 34 months in prison followed by 3 years of supervised release after pleading guilty to conspiracy
to commit health care fraud and wire fraud. Mendez was also ordered to pay $1,779,246 in
restitution and $100 in court assessments. On January 23, 2014, Mendez was indicted by a Federal
Grand Jury in the Southern District of Florida on 12 counts of health care fraud for his role in
submitting more than $1.7 million in false claims to Medicare. After the indictment, Mendez fled to
Cuba. On July 24, 2022, Mendes was arrested in the Western District of Texas as he tried to
reenter the United States.
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 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 Hotline reported expected recoveries of
$8,622,602 as a direct result of cases originating from hotline complaints.
OIG Hotline Activity (10/1/2022–3/31/2023)
Contacts to 1-800-HHS-TIPS phone line, including 61,804
callers seeking information
Total tips evaluated 20,347
Tips referred for action 12,576
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Closed; no basis provided for further action 533
Closed; no HHS violation 636
Closed; other administrative reason 6,602
Sources of Tips Referred for Action
Phone 4,120
OIG website 6,789
Letters or faxes 542
Other 1,125
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 abuse or neglect of residents in
health care facilities and board and care facilities and of Medicaid beneficiaries in noninstitutional
or other settings.
Medicaid Fraud Control Units Fiscal Year 2022 Annual Report (OEI-09-23-00190), March
2023
This annual report provides statistics that highlight the accomplishments of the 53 MFCUs
during FY 2022. In FY 2022, MFCUs reported 1,327 convictions (946 convictions for fraud;
381 convictions for patient abuse or neglect). Fraud convictions involved more personal
care attendants than any other provider type. Nurse’s aides and nurses/physician assistants
had the highest numbers of convictions for patient abuse or neglect. Criminal recoveries
from convictions totaled $416 million. MFCUs reported 553 civil settlements and
judgments. Pharmaceutical manufacturers accounted for more civil settlements and
judgments than any other provider type. MFCUs reported civil recoveries of $641 million.
Combined recoveries from criminal and civil cases totaled nearly $1.1 billion. MFCUs
achieved a return of $3.08 for each dollar spent. The report appendix summarizes
beneficial practices that may be useful to other MFCUs. This report contained no
recommendations.
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Department of Health and Human Services, Office of Inspector General
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OIG Onsite Reviews of MFCUs
In addition to an annual recertification review of each MFCU, OIG conducts reviews of a sample of
MFCUs. OIG evaluates MFCU operations based on 12 performance standards and assesses
compliance with laws, regulations, and OIG policy guidance. During the reporting period, OIG
issued reports of onsite reviews of the following MFCUs:
Rhode Island Medicaid Fraud Control Unit: 2022 Inspection (OEI-07-22-00370), March 2023
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 opinions on the application of the anti-kickback statute and safe harbor provisions, in
addition to other OIG health care fraud and abuse sanctions. During this semiannual reporting period,
OIG received 16 requests for advisory opinions and issued 16 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 (Stark Law), or the Emergency Medical
Treatment and Labor Act, 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 1,435 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 OIG’s Enforcement Actions website.
Program Exclusions
During this semiannual reporting period, OIG excluded 1,365 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
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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 OIG’s Exclusions
website.
The following are case examples of program exclusions:
California – On November 20, 2022, OIG excluded an owner of an ambulatory surgery
center that specialized in plastic and cosmetic surgery for 40 years based on her conviction
for conspiracy to commit health care fraud. From 2008 until 2013, this business owner
convinced patients that they could use Preferred Provider Organization health care benefits
to pay for cosmetic procedures (e.g., tummy tucks, liposuction, breast lifts, varicose vein
treatment) when in fact she submitted false claims for medically unnecessary procedures
using fictitious company names and addresses to defraud private insurance companies.
Some patients even suffered severe medical complications after being forced to undergo
multiple cosmetic procedures in a short timeframe. The court sentenced the owner to 97
months in prison and ordered her to pay approximately $14,025,900 in restitution.
Florida – On December 20, 2022, OIG excluded a registered nurse for 45 years based on his
conviction of sexual battery on a helpless victim. The nurse administered medication to the
hospitalized victim before raping her. As a result, the court sentenced the nurse to 30
years in prison, and the Florida Board of Nursing revoked his license to practice as a
registered nurse.
Illinois – On November 20, 2022, OIG excluded the owner of a licensed childcare business
for 20 years due to her conviction for wire fraud and money laundering. From 2009 until
2019, this individual participated in a scheme to defraud the State of Illinois of its general
revenue funds as well as block grant funding received from HHS intended to assist low-
income families with affordable childcare by submitting false records and eligibility
information. The court sentenced her to 22 months in prison and ordered her to pay
approximately $421,800 in restitution.
Pennsylvania – On December 20, 2022, OIG excluded a medical doctor for 23 years based
on his conviction for conspiracy to commit health care fraud. Between 2016 and 2018, the
doctor conspired with a telemedicine company to defraud Medicare by submitting false
and fraudulent claims for medically unnecessary services as well as claims for items or
services that were not eligible for Medicare reimbursement in order to divert the proceeds
for his own personal use. The court sentenced the provider to 6 months of home
detention with electronic monitoring and ordered him to pay approximately $3,354,000 in
restitution. Moreover, the North Carolina Board of Medicine suspended his license while
the West Virginia Board of Medicine, the Pennsylvania Board of Medicine, and the
Washington State Board of Medicine accepted the surrender of his licenses.
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Wisconsin – On October 20, 2022, OIG excluded an advanced practice nurse practitioner
for 45 years based on a conviction related to the distribution of controlled substances
beyond the practice of medicine. From 2015 through 2016, this individual owned and
operated a medical clinic that only accepted cash or credit card payments from patients in
order to prescribe excessive amounts of controlled substances (e.g., oxycodone, morphine)
without insurance oversight. These excessive prescriptions lacked legitimate medical
purposes and caused widespread distribution and addiction to controlled substances
throughout the State of Wisconsin, leading to the death of one patient. As a result of this
conviction, a court sentenced the practitioner to 240 months in prison. The excluded
provider also lost nursing licenses by revocation, suspension, and surrender in three
different states.
Suspensions and Debarments
Suspensions and debarments are administrative tools used by HHS and other Federal agencies to
protect the Government from individuals and entities that have engaged in contract fraud, have
misused grant funds, or are otherwise not presently responsible. Because these are
Governmentwide sanctions, an individual or entity that has been suspended or debarred by HHS or
any other agency is ineligible to participate in any future funding opportunities across the Federal
Government for a specified period of time.
OIG refers individuals and entities that have potentially engaged in grant or contract fraud or
misconduct to the HHS suspension and debarment official, who is responsible for determining
whether to impose a suspension or debarment. OIG continues to develop a robust suspension and
debarment program and uses this tool to protect Government programs against fraud, waste, poor
performance, and noncompliance with contract provisions or applicable law.
The following case example involves debarment:
Tennessee – Patrick Martin, the former executive director of the Community Prevention
Coalition of Jackson County, Tennessee (CPCJC), was debarred for 3 years. The debarment
was imposed based on a referral from OIG. CPCJC received a Federal grant from the
Substance Abuse and Mental Health Services Administration (SAMHSA) for the purpose of
preventing and reducing underage alcohol abuse and substance use among youth in
Jackson County. Martin was convicted of wire fraud, willful failure to collect or pay over tax,
and willful filing of false tax returns related to theft of grant monies, and he was sentenced
to 15 months in prison after an OIG investigation found that Martin embezzled CPCJC funds
by overpaying himself, duplicating payments, and paying for personal expenses including
travel and supplies. Martin also diverted CPCJC funds to a personal bank account. Martin
made materially false statements and misrepresentations to SAMHSA to obtain continued
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funding of the grant and caused SAMHSA to wire $375,000 to CPCJC in 30 separate
requests to draw down funds.
Civil Monetary Penalties Law
The 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 $39.4 million in CMPs and
assessments.
Affirmative Litigation
The CMPL authorizes OIG to use its administrative remedies to affirmatively pursue cases. OIG
may also exclude individuals under the exclusions statute for engaging in conduct that violates the
CMPL; this is known as an affirmative exclusion.
The following case examples involve affirmative litigation under the CMPL:
New Jersey – Gem Ambulance, LLC, entered into a $1,060,513.82 settlement agreement with
OIG. The agreement settled its liability under the CMPL arising from its submission of
claims to Medicare Part B with dates of service from January 2, 2014, through December 28,
2018, for ambulance transportation to and from skilled nursing facilities, where such
transportation was covered by the skilled nursing facility consolidated billing payment
under Medicare Part A.
Texas – Vi Dang, M.D., entered into a $132,078.00 settlement agreement with OIG. The
agreement resolved allegations that he solicited and received remuneration from various
telemedicine and staffing companies in the form of monetary payments related to
purported telemedicine consultations. Specifically, that he solicited and received the
remuneration in exchange for ordering medically unnecessary durable medical equipment
and prescription medications for Medicare beneficiaries with whom he had no physician–
patient relationship and never examined.
Self-Disclosure Programs
Health care providers, suppliers, or other individuals or entities subject to CMPs can apply for
acceptance into the Health Care Fraud Self-Disclosure Protocol, a program created in 1998 for
voluntary disclosure of self-discovered evidence of potential fraud. The Health Care Fraud Self-
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Disclosure Protocol may give individuals and entities 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 Regulation–based
contract with HHS. The OIG grant self-disclosure program is available by application to HHS
grantees or HHS grant subrecipients and provides the opportunity for voluntary disclosure to OIG
of potential fraud. OIG evaluates the reported results of each internal investigation under the
provider self-disclosure protocol to determine the appropriate course of action. Self-disclosure
guidelines are available on the OIG Self-Disclosure website. During this semiannual reporting
period, provider self-disclosure cases resulted in more than $38.6 million in HHS receivables.
The following case examples pertain to provider self-disclosure settlements:
Connecticut – Andrew J. Parker, M.D., LLC, entered into an agreement with OIG in the
amount of $985,385.10 to resolve allegations that, between January 1, 2012, and April 1,
2018, the medical practice submitted claims for outpatient services as if those services were
rendered by Dr. Parker when in fact those services were provided by employee
practitioners that were not enrolled in the applicable Federal health care program at the
time the claims were submitted.
Washington State – Kadlec Regional Medical Center (Kadlec) entered into a $14,351,283.06
settlement agreement with OIG. The agreement settled its liability under the CMPL arising
from its submission of claims to Medicare Part A, during the period of October 24, 2015,
through October 26, 2021, for inpatient rehabilitation stays that did not meet Medicare
coverage criteria. This self-disclosure was based on conduct Kadlec identified after a
related audit by OAS.
Corporate Integrity Agreements
Many health care providers elect to settle their cases before litigation. As part of the settlements,
providers often agree to enter into CIAs with OIG to avoid exclusions from Medicare, Medicaid,
and other Federal health care programs. Under a CIA, a provider commits to establishing a
compliance program and taking other specified steps to ensure future compliance with Medicare
and Medicaid rules. The compliance programs are designed, in part, to prevent future fraud. OIG
monitors providers’ compliance with these agreements and may impose penalties on parties that
fail to comply with the requirements of their CIAs.
There were no cases involving CIA enforcement during this semiannual reporting period.
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Public Health and Human Services Agency
Reports and Reviews
Public Health Agency Reports and Reviews
Centers for Disease Control and Prevention
During the Initial COVID-19 Response, HHS Personnel Who Interacted With Potentially Infected
Passengers Had Limited Protections (OEI-04-20-00360), October 2022
As a result of CDC’s initially limited protections, HHS personnel may have been at increased risk of
COVID-19 exposure and may have inadvertently spread COVID-19. Though CDC’s understanding
of COVID-19 was evolving and the protections improved during our review period, they still
contained some vulnerabilities. Our findings can help CDC strengthen its protections for personnel
interacting with potentially infected passengers during future infectious disease outbreaks.
CDC concurred with our recommendations that CDC: (1) update its guidance recommending
protections for personnel who interact with potentially infected passengers, (2) ensure that its
personal protective equipment trainings meet standards set by the Occupational Safety and Health
Administration, and (3) develop a comprehensive plan for recommending travel-related
containment measures that weighs the risks relative to the public health benefits.
Early Challenges Highlight Areas for Improvement in COVID-19 Vaccination Programs (OEI-04-21-
00190), January 2023
State and local immunization programs that are funded by CDC to distribute COVID-19 vaccines
faced numerous challenges, including achieving logistical efficiency, obtaining complete vaccine
data, combating vaccine hesitancy with public health messaging, and overseeing vaccine providers.
(We refer to these CDC-funded programs as “awardees.”) While CDC addressed some of these
challenges during the early stages of the COVID-19 vaccination program, there are still areas for
improvement. Our findings can help CDC strengthen the COVID-19 vaccination program and
improve future pandemic vaccination programs.
CDC concurred with our recommendations that CDC: (1) update its plans for mass vaccination
programs with strategies that address awardee-reported logistical challenges, (2) strengthen
reporting of vaccine allocation data and administration data, (3) clarify roles and responsibilities
within HHS for vaccine public health messaging during a pandemic, and (4) work with awardees to
enhance current and future capabilities for provider training and oversight.
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Challenges With Vaccination Data Hinder State and Local Immunization Program Efforts To Combat
COVID-19 (OEI-05-22-00010), January 2023
Many State and local immunization programs reported having incomplete individual-level data for
the more than 250 million COVID-19 vaccine doses administered by Federal agencies and retail
pharmacy partners (retail pharmacies that receive vaccines directly from CDC). Without complete
individual-level vaccination data, immunization programs reported that they struggled to
accurately measure vaccination coverage and target outreach to unvaccinated and vulnerable
populations. Because State and local immunization databases contain data on all types of
vaccinations, if left unresolved, these challenges will likely hinder the ongoing COVID-19
vaccination campaign, responses to future public health emergencies, and routine vaccination
campaigns (e.g., flu shots).
CDC concurred with our recommendation for it to provide educational outreach to ensure that
State and local immunization programs are aware of existing tools to address vaccination
campaign needs. CDC did not concur with our recommendation for it to work with State and local
immunization programs and retail pharmacy partners to mitigate reported data gaps and
timeliness challenges.
Administration for Strategic Preparedness and Response
ASPR Could Improve Its Oversight of the Hospital Preparedness Program To Ensure That Crisis
Standards of Care Comply With Federal Nondiscrimination Laws (A-01-21-01502), January 2023
Although ASPR has taken steps to improve its oversight of the Hospital Preparedness Program
(HPP) by promoting the adoption of nondiscriminatory Crisis Standards of Care (CSCs) that comply
with Federal nondiscrimination laws, it can take additional steps. The HPP cooperative agreement
did not previously specify that States should consider Federal nondiscrimination laws when
developing CSCs because prior to the COVID-19 pandemic, ASPR did not identify CSC compliance
with Federal nondiscrimination laws as a high-risk area. Additionally, ASPR stated that it is not
required to review CSCs for legal and regulatory compliance. CSCs that do not comply with
Federal nondiscrimination laws increase the risk that individuals could be denied access to
lifesaving care during a public health emergency.
We recommend that ASPR consider additional updates to the current HPP cooperative agreement
to promote that HPP recipients adopt CSCs that comply with Federal nondiscrimination laws. We
acknowledge that ASPR has taken steps in previous HPP updates to promote compliance with
Federal nondiscrimination laws; however, we believe that additional steps can be taken. Such steps
could include an additional update to the HPP cooperative agreement to encourage recipients to
engage with advocacy groups in decision making related to crisis care planning. ASPR said that it
accepts our recommendation to include additional updates in the HPP cooperative agreement to
promote the adoption of CSCs that comply with Federal nondiscrimination laws.
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Food and Drug Administration
FDA’s Approach to Overseeing Online Tobacco Retailers Needs Improvement (OEI-01-20-00241),
December 2022
For the 16,000 online tobacco websites that FDA’s contractor flagged for review from 2010 through
2020, FDA issued warning letters to 899 websites but took no enforcement actions. FDA faces
challenges, many unique to the online retailer environment, but also has not taken certain steps
that could help it address gaps in its oversight. This review raises questions about the effectiveness
of FDA’s efforts to prevent youth access to tobacco products online.
FDA concurred with our recommendations that FDA: (1) collaborate with the Bureau of Alcohol,
Tobacco, Firearms and Explosives on oversight of online tobacco retailers; and (2) publish
information and performance data on its oversight of online tobacco retailers.
FDA neither concurred nor nonconcurred with our recommendations that FDA: (1) complete its
rulemaking on non–face-to-face sales of tobacco products, as required by the Family Smoking
Prevention and Tobacco Control Act; and (2) collect data to support process and outcome
measures for its oversight of online tobacco retailers.
FDA Should Improve Its Management of Contracts for the Acquisition of Information Technology (A-
18-21-11100), January 2023
FDA contracting officers generally administered the delivery and call orders we reviewed for the
acquisition of information technology in accordance with Federal regulations and policies.
However, we identified areas within FDA’s management of these orders that were not conducted
consistent with applicable Federal and HHS acquisition regulations and policies. Specifically, the
contracting officers did not: (1) properly designate a contracting officer’s representative or
complete all required duties for contracts for which there was no designated contracting officer’s
representative, (2) complete required contractor performance evaluations, (3) properly document
all key contracting decisions or activities and obtain all required signatures on key documents, and
(4) include the required acquisition strategy statement in the orders’ acquisition plans.
Additionally, FDA did not fully comply with the HHS Competition Advocacy Directive for FYs 2018
and 2019.
These conditions occurred because FDA did not always: (1) follow existing FDA acquisition and
procurement policies and procedures, including ensuring the completeness of contract documents;
or (2) work with HHS to meet its obligation to comply with an HHS directive.
We make procedural and administrative recommendations to improve compliance with Federal
acquisition requirements related to contracting officer’s representative duties, contractor
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performance assessments, documentation of contracting decisions and activities, and acquisition
strategies. The full recommendations are in the report. In written comments on our draft report,
FDA concurred with all of our recommendations and described actions it has taken or plans to take
to address the findings.
Indian Health Service
IHS Did Not Always Provide the Necessary Resources and Assistance To Help Ensure That Tribal
Programs Complied With All Requirements During Early COVID-19 Vaccination Program
Implementation (A-07-21-04125), October 2022
Indian Health Service (IHS) did not fulfill all of the provisions outlined in a Memorandum of
Agreement that specified the conditions for receiving COVID-19 vaccines from CDC and in its
Vaccine Plan for operationalizing delivery of the vaccines to help ensure that the vaccination
program was implemented appropriately at Tribal programs. Consequently, Tribal programs did
not always comply with all program requirements during early program implementation.
Specifically, IHS did not always provide the necessary resources and assistance to help ensure that
Tribal programs: (1) met reporting requirements for vaccine administration data, (2) used billing
practices that conformed to CMS and CDC requirements and American Medical Association
guidance regarding reimbursement for vaccine administration fees, and (3) did not enter into
unallowable dual-program agreements with both a State jurisdiction and IHS.
We recommend that IHS: (1) ensure that Tribal programs comply with vaccine program
requirements by establishing formal reconciliation processes to ensure that the data that the Tribal
programs submit on doses administered are correct and by addressing data management system
incompatibilities, (2) work with CMS to disseminate guidance to Tribal programs on vaccine coding
and billing, (3) work with CDC and one Tribal program to ensure that it returns funds to individuals
who were billed inappropriately, and (4) work with CDC to develop and disseminate additional
guidance related to dual enrollment and together implement a formal monitoring process to help
ensure that Tribal programs do not enter into unallowable dual-program agreements for Federal
programs. IHS concurred with all of our recommendations and described corrective actions that it
has taken and plans to take.
Three Tribes in New England and Their Health Programs Did Not Conduct Required Background
Investigations on All Individuals in Contact With Indian Children (A-01-20-01504), November 2022
The 3 New England Tribes and their health programs did not comply with Federal and Tribal
requirements for performing background investigations on 65 employees, 12 contractors, and 1
volunteer in contact with Indian children. IHS officials stated that they recalled providing
background investigation training prior to 2015 but could not produce documentation to support
their recollections. Current Tribal officials said they were not aware of, or misinterpreted, their
obligations under the Indian Child Protection and Family Violence Prevention Act (the Act).
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Because the three Tribes and their health programs did not always collect the necessary
employment information and did not conduct the required criminal history investigations, they
could not compare complete criminal history results to the minimum standards of character for
individuals in contact with Indian children. As a result, Indian children faced an increased risk of
harm.
We recommend that the three Tribes: (1) perform background investigations on individuals who
currently have contact with Indian children and (2) develop and implement policies and procedures
to ensure that each Tribe conducts required background investigations and assesses results to
verify that applicants meet the required minimum character standards. We also recommend that
IHS provide additional training and technical assistance to help Tribes comply with the background
investigation and character assessment requirements of the Act. Two Tribes concurred with our
findings and the third generally concurred with our findings. IHS concurred with our
recommendations.
National Institutes of Health
The National Institutes of Health and EcoHealth Alliance Did Not Effectively Monitor Awards and
Subawards, Resulting in Missed Opportunities to Oversee Research and Other Deficiencies (A-05-21-
00025), January 2023
Despite identifying potential risks associated with research being performed under the EcoHealth
Alliance awards, we found that NIH did not effectively monitor or take timely action to address
EcoHealth’s compliance with some requirements. Using its discretion, NIH did not refer the
research to HHS for an outside review for enhanced potential pandemic pathogens because it
determined the research did not involve and was not reasonably anticipated to create, use, or
transfer an enhanced potential pandemic pathogen. However, NIH added a special term and
condition in EcoHealth’s awards and provided limited guidance on how EcoHealth should comply
with that requirement. We found that NIH was only able to conclude that research resulted in virus
growth that met specified benchmarks based on a late progress report from EcoHealth that NIH
failed to follow up on until nearly 2 years after its due date. We conclude that NIH missed
opportunities to monitor research more effectively.
We identified several other deficiencies in the oversight of the awards, including NIH’s improper
termination of a grant; EcoHealth’s inability to obtain scientific documentation from Wuhan
Institute of Virology (WIV); and EcoHealth’s improper use of grant funds, resulting in $89,171 in
unallowable costs. Although WIV cooperated with EcoHealth’s monitoring for several years, WIV’s
lack of cooperation following the COVID-19 outbreak limited EcoHealth’s ability to monitor its
subrecipient.
We make several recommendations, including that NIH: (1) ensure that EcoHealth accurately and in
a timely manner report award and subaward information; (2) implement enhanced monitoring,
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documentation, and reporting requirements for recipients with foreign subrecipients; (3) consider
whether it is appropriate to refer WIV to HHS for debarment; and (4) ensure any future NIH grant
awards to EcoHealth address the deficiencies noted in the report. NIH stated that it concurred or
generally concurred with our recommendations and provided actions it has taken or plans to take
to address them.
We also recommend EcoHealth submit progress reports by the required due dates, comply with
immediate notification requirements, ensure access to all subrecipient records, properly account
for subawards, and refund to the Federal Government $89,171 in unallowable costs. EcoHealth
concurred with our recommendation to prepare accurate subaward and consultant agreements
but did not directly state whether it concurred with the other recommendations.
Drug Control Attestation Reports
Federal law and the Office of National Drug Control Policy (ONDCP) Circular National Drug Control
Program Agency Compliance Reviews, dated September 9, 2021 (ONDCP Compliance Reviews
Circular), require OIG to conduct reviews of OpDivs’ drug control activities. During this reporting
period, OIG conducted three such attestations, which are summarized here.
Independent Attestation Review: National Institutes of Health Fiscal Year 2022
Detailed Accounting Submission and Budget Formulation Compliance Report for
National Drug Control Activities, and Accompanying Required Assertions (A-03-23-
00351), January 2023
This report provides the results of our review of NIH’s National Institute on Drug
Abuse (NIDA) and National Institute on Alcohol Abuse and Alcoholism (NIAAA)
ONDCP Detailed Accounting Reports, which include the table of Drug Control
Obligations, related disclosures, and management's assertions for the fiscal year
ended September 30, 2022. We also reviewed the Budget Formulation Compliance
Reports, which include budget formulation information for the fiscal year ending
September 30, 2024, and the Chief Financial Officer's or accountable senior
executive's assertions relating to the budget formulation information.
Based on our review, we are not aware of any material modifications that should be
made to NIDA and NIAAA's Detailed Accounting Reports for FY 2022 and NIDA and
NIAAA's Budget Formulation Compliance Reports for FY 2024 and management's
assertions for them to be in accordance with the ONDCP Compliance Reviews
Circular.
Independent Attestation Review: Centers for Disease Control and Prevention Fiscal
Year 2022 Detailed Accounting Submission and Budget Formulation Compliance
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Report for National Drug Control Activities and Accompanying Required Assertions
(A-03-23-00352), January 2023
This report provides the results of our review of CDC’s ONDCP Detailed Accounting
Report, which includes the table of Drug Control Obligations, related disclosures,
and management's assertions for the fiscal year ended September 30, 2022. We
also reviewed the Budget Formulation Compliance Report, which includes budget
formulation information for the fiscal year ending September 30, 2024, and the
Chief Financial Officer's or accountable senior executive's assertions relating to the
budget formulation information.
Based on our review, we are not aware of any material modifications that should be
made to CDC's Detailed Accounting Report for FY 2022 and CDC's Budget
Formulation Compliance Report for FY 2024 and management's assertions for them
to be in accordance with the ONDCP Compliance Reviews Circular.
Independent Attestation Review: Food and Drug Administration Fiscal Year 2022
Detailed Accounting Submission and Budget Formulation Compliance Report for
National Drug Control Activities and Accompanying Required Assertions (A-03-23-
00353), January 2023
This report provides the results of our review of FDA’s ONDCP Detailed Accounting
Report, which includes the table of Drug Control Obligations, related disclosures,
and management's assertions for the fiscal year ended September 30, 2022. We
also reviewed the Budget Formulation Compliance Report, which includes budget
formulation information for the fiscal year ending September 30, 2024, and the
Chief Financial Officer's or accountable senior executive's assertions relating to the
budget formulation information.
Based on our review, we are not aware of any material modifications that should be
made to FDA's Detailed Accounting Report for FY 2022 and FDA's Budget
Formulation Compliance Report for FY 2024 and management's assertions for them
to be in accordance with the ONDCP Compliance Reviews Circular.
Human Services Agency Reports and Reviews
Administration for Children and Families
The Municipality of Manati Did Not Always Manage Its Head Start Disaster Assistance Awards in
Accordance With Federal and Commonwealth Requirements (A-04-20-02032), December 2022
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The Municipality of Manati did not always manage its Head Start disaster assistance awards in
accordance with Federal and Commonwealth requirements. Specifically, the Municipality claimed
unallowable costs totaling $153,052 related to the purchase of four vehicles and did not comply
with all requirements related to criminal background checks for 25 employees hired with award
funds. These deficiencies occurred because the Municipality did not have written procurement
policies and procedures for determining the most reasonable approach for making vehicle
purchases or for ensuring that criminal background checks were conducted within required
timeframes. As a result, the Municipality did not show that the purchase of the four vehicles was
necessary or reasonable and it potentially jeopardized the safety of children by not complying with
background check requirements.
We recommend that the Municipality: (1) work with ACF to develop a viable plan for refunding
$153,052 in unallowable costs to the Federal Government; (2) develop and implement procurement
policies and procedures, including a requirement to perform analyses to determine the most
reasonable approach for vehicle acquisitions; and (3) develop and implement written policies and
procedures to ensure that criminal background checks are completed within required timeframes.
In written comments on our draft, the Municipality did not indicate concurrence or nonconcurrence
with our recommendations. However, the Municipality stated it did not concur with our findings.
We maintain that our findings and recommendations are valid.
Greater Bergen Community Action, Inc., Did Not Manage Its Head Start Awards in Accordance With
Federal and State Requirements (A-02-19-02008), January 2023
Greater Bergen Community Action, Inc. (GBCA) drew down Head Start funds in excess of
immediate cash needs and used the funds to temporarily cover non-Head Start expenditures. In
addition, GBCA claimed unallowable costs totaling $394,733 for: (1) rental income that was not
properly credited as program income, (2) unallowable rent costs, (3) unallowable salary and fringe
benefit costs, and (4) non-Head Start program costs. GBCA also claimed $92,678 in potentially
unallowable vehicle costs. Further, GBCA overstated its non-Federal share contributions (e.g.,
volunteer services) and did not perform required background checks and health screenings on
some of its volunteers. These deficiencies occurred because GBCA had inadequate policies in
place to ensure that: (1) its Head Start grant funds were used to reimburse current, allowable Head
Start expenses; (2) its financial reports to ACF accurately accounted for non-Federal contributions
to its Head Start program; and (3) background checks and health screenings were performed.
We recommend that GBCA: (1) refund $394,733 to the Federal Government for unallowable costs
charged to the Head Start awards, (2) work with ACF to determine the amount of allowable vehicle
costs or refund $92,678 to the Federal Government for potentially unallowable vehicle costs, and
(3) strengthen its policies and procedures to address the issues identified in the report. GBCA
concurred with some of our findings, did not concur with others, and disagreed with our
recommendation that it refund $394,733.
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Maryland’s Child Support Administration Generally Claimed Administrative Costs That Were
Allowable and Allocable (A-01-22-02500), March 2023
Maryland generally claimed Maryland Administrative Office of the Courts (AOC) administrative
costs for the Child Support Enforcement Program (CSE Program) that were allowable and allocable,
and the overall effect of the errors we identified during our audit period were immaterial.
However, we determined that Maryland did not have an adequate invoice review process to ensure
that AOC salary and fringe benefits allocated to the CSE Program were accurate and supported
and that the AOC properly calculated indirect costs charged to the CSE Program.
We recommend that Maryland: (1) periodically review the allocation and support of payroll costs
invoiced by the AOC and (2) verify that the AOC calculates indirect costs charged to the CSE
Program by applying the de minimis rate of 10 percent to the correct allocation base.
In written comments on our draft report, Maryland concurred with our recommendations.
Maryland also described the actions it will take to address the recommendations. For example,
Maryland said it would periodically conduct site reviews, beginning April 1, 2023, and evaluate the
AOC billing process, internal controls, and supporting documentation to verify the allocation and
support of payroll costs that AOC invoiced.
Safety of Children in Foster Care
Michigan Did Not Comply With Requirements for Documenting Psychotropic and Opioid Medications
Prescribed for Children in Foster Care (A-05-21-00030), February 2023
Michigan did not always comply with State requirements related to the psychotropic and opioid
medications prescribed for children in foster care who were eligible for assistance under the Social
Security Act. Specifically, we found that: (1) the electronic case records for 18 of the 115 children in
the sample who were prescribed psychotropic or opioid medications did not contain the required
medical information, (2) the electronic case records for 14 of the 85 children in the sample who
were prescribed psychotropic medications did not include consent forms for psychotropic
medications, and (3) opioid medications prescribed for 60 children in the sample were not
recorded in the Michigan Statewide Automated Child Welfare Information System (MiSACWIS).
We make multiple recommendations, including that Michigan ensure that electronic case records
for children in foster care are maintained in accordance with requirements by: (1) modifying
procedures for the monitoring of caseworkers to ensure that the required medical information is
maintained in MiSACWIS; (2) implementing policies to document when consent forms are not
required in non-emergency situations, monitoring Medicaid claim data to ensure consent forms
are obtained and documented, and implementing procedures to monitor other medications
prescribed for children, including opioids, for potential medication interaction and adverse side
effects for children who are prescribed psychotropic medications; and (3) implementing
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procedures to monitor Medicaid claim data for opioid medications prescribed for children and
providing training for documenting the opioid medications prescribed for children due to medical
procedures or emergency treatment. Michigan generally agreed with our recommendations and
described actions it has taken or plans to take to address our recommendations.
State Agencies Did Not Always Ensure That Children Missing From Foster Care Were Reported to the
National Center for Missing and Exploited Children in Accordance With Federal Requirements (A-07-
21-06102), March 2023
During our audit period, State agencies did not always ensure that children missing from foster
care were reported to the National Center for Missing and Exploited Children (NCMEC) as required
by Federal statute. Of the 100 missing children episodes in our sample, the State agencies
reported 33 episodes to NCMEC in a timely manner (i.e., within 24 hours after the State agency
received information that the child was missing) in accordance with Federal requirements.
However, 45 missing children episodes were never reported to NCMEC, and 22 missing children
episodes were not reported in a timely manner. On the basis of our sample results, we estimated
that the State agencies did not report 51,115 of the 74,353 missing children episodes in accordance
with Federal requirements. Specifically, an estimated 34,869 missing children episodes during our
audit period were never reported to NCMEC, and an additional estimated 16,246 missing children
episodes during our audit period were not reported within 24 hours after the State agencies were
notified that the child was missing.
State agencies generally lacked adequate systems to readily identify whether or not they had
correctly reported missing children episodes to NCMEC. The opportunity exists for ACF to improve
outcomes for missing children by working with State agencies to ensure compliance with Federal
reporting requirements and guidance.
We recommend that ACF work with State agencies to ensure compliance with Federal
requirements to report missing children episodes to NCMEC in a timely manner. ACF concurred
with our recommendation and described corrective actions.
Health Resources and Services Administration
The Health Resources and Services Administration Should Improve Preventive and Detective Controls
To More Effectively Mitigate the Risk of Compromise (A-18-20-08200), February 2023
Although the Health Resources and Services Administration (HRSA) implemented some security
controls for detecting and preventing threats on its network, HRSA’s cybersecurity controls needed
improvements to better detect and prevent cyber threats on its network. We found multiple
security controls at HRSA that were not operating effectively. Although we did not identify
evidence of a past breach, we found three active threats on the HRSA network. We promptly
shared these significant findings with HRSA during our audit period. We concluded that HRSA was
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able to detect certain breaches and respond appropriately. We based this conclusion on the fact
that HRSA was already in the process of investigating two of the three active threats that we had
identified before we notified it of our findings.
The security control failures that we identified occurred because HRSA had not updated security
configurations to align with the most recent National Institute of Standards and Technology (NIST)
Special Publication (SP) 800-53 security controls and had not implemented procedures to assess
and monitor the NIST controls on its endpoints. As a result of HRSA not correctly implementing
these controls, these threats could increase the endpoint or network attack surfaces, or they could
bypass current organizational security policies and controls.
We recommend that HRSA: (1) remediate the security control findings we identified, (2) update
security configurations to align with the most current NIST SP 800-53 security controls, and (3)
implement policies and procedures to periodically identify and assess whether security controls are
in place and operating effectively in accordance with the most current NIST SP 800-53 and
remediate weak controls timely.
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
Legal and Investigative Activities Related to
Public Health and Human Services Agencies
Health Education Assistance Loan Program Exclusions
OIG excludes from Federal health care programs individuals who have defaulted on Health Education
Assistance Loan (HEAL) Program loans. Under the HEAL Program, which stopped granting loans in 1998,
HRSA guaranteed commercial loans to students seeking education in health-related fields. The students
could then defer repayment of the loans until after they graduated and began to earn income. Although
HHS’s Program Support Center takes steps to ensure repayment, some loan recipients do not resolve their
debt. After the Program Support Center has exhausted efforts to secure repayment of a debt, it declares
an individual in default. The Social Security Act permits that thereafter, such individuals may not receive
reimbursement under Medicare, Medicaid, and all other Federal health care programs for nonpayment of
the loans.
Currently, there is a moratorium on collection activities. Accordingly, the Program Support Center is not
referring any individuals in default at this time. Therefore, OIG has no figures to report for this semiannual
reporting period.
Child Support Enforcement Activities
OIG Investigations
OIG investigates noncustodial parents who violate 18 U.S.C. § 228 by failing to pay court-ordered
child support. OIG works with ACF’s Office of Child Support Enforcement; DOJ; U.S. Attorneys’
Offices; the U.S. Marshals Service; and Federal, State, and local partners to address egregious child
support enforcement cases with appropriate law enforcement and prosecutorial action. During this
semiannual reporting period, OIG investigations of child support enforcement cases nationwide
resulted in one criminal action and court-ordered restitution and settlements of $5,600.
The following case example involves child support enforcement:
Puerto Rico – On or about 2019 through May 2022, Yamil Fonseca Salgado willfully failed to
pay his child support obligation to his child who resides on the State of Florida. Such
obligation remained unpaid for a period longer than 2 years and amounted to more than
$107,000.00. With the purpose of executing a scheme to defraud his minor child and the
Court who imposed the child support obligation, Salgado concealed assets, resources, and
income. In order to execute said scheme, Salgado made false and fraudulent
representations concerning and in relation to a proceeding under Title 11 in the United
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
States Bankruptcy Court in multiple occasions. Salgado was arrested on August 2, 2022,
after a grand jury indicted him on July 28, 2022, in the United States Court, District of
Puerto Rico, for charges related to failure to pay child support and bankruptcy fraud. On
November 3, 2022, Salgado pled guilty to one count of willful failure to pay child support
and five counts of bankruptcy fraud. This case was worked jointly with the United States
Trustee's Office.
Engaging the Public in Capturing Deadbeat Parents
Because of the success of OIG’s Most Wanted Fugitives website, OIG launched its Child Support
Enforcement 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.
63
Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
Other HHS-Related Reviews and Investigative
Activities
General Departmental
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‑17‑22‑54000), October
2022
Ernst & Young, under its contract with HHS-OIG, determined that HHS generally complied with the
requirements for completeness, timeliness, quality, and accuracy of the data, as well as the
requirements for implementation and use of the Governmentwide financial data standards
established by the Office of Management and Budget and Treasury. Overall, HHS is in compliance
with the Digital Accountability and Transparency Act requirements.
Ernst & Young recommended that HHS focus on refreshing the OpDivs’ understanding of
Departmental guidance and identifying those areas for which OpDiv training would be developed
to prevent and detect future accuracy issues related to the performance dates, award types, and
award descriptions. Ernst & Young identified the following: (1) 33 accuracy exceptions for data
element 26, the period of performance start date; (2) 25 accuracy exceptions for data element 22,
Award Description; (3) 18 accuracy exceptions for data element 16, Award Type; and (4) 12 accuracy
exceptions for data element 37, Business Types. In these exceptions, the information in Files D1/D2
did not agree with the supporting documentation provided.
Report on the Financial Statement Audit of the Centers for Medicare & Medicaid Services for Fiscal
Year 2022 (A-17-22-53000), November 2022
Based on its audit, Ernst & Young, under its contract with HHS-OIG, found that the FY 2022 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, 2022, 2021, 2020, 2019, and 2018, and the related statements of changes
in social insurance amounts for the periods ended January 1, 2022, and 2021. 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.
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
Ernst & Young also noted two matters involving internal controls with respect to the financial
reporting. Under the standards established by the American Institute of Certified Public
Accountants and GAO’s Government Auditing Standards, Ernst & Young identified significant
deficiencies in CMS’s financial reporting processes and information systems controls. Ernst &
Young also identified several instances of noncompliance with laws and other matters.
Financial Statement Audit of the Department of Health and Human Services for Fiscal Year 2022
(A‑17‑22‑00001), November 2022
Based on its audit, Ernst & Young, under its contract with HHS-OIG, found that the FY 2022 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, 2022, 2021, 2020, 2019, and 2018, and the related statements of changes
in social insurance amounts for the periods ended January 1, 2022, and 2021. As a result, Ernst &
Young was not able to, and did not, express an opinion on the sustainability statements 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 GAO’s Government Auditing Standards, 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 Reporting Systems, Analyses, and Oversight, and HHS’s Financial Information
Systems.
Grants and Contracts
HHS is the largest grantmaking organization and one of the largest contracting agencies in the Federal
Government. In FY 2022, HHS awarded more than $792 billion in grants and more than $33 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 80,000 employees worldwide. The size and scope of
departmental awards make their operating effectiveness crucial to the success of programs designed to
improve the health and well-being of the public.
Grant Fraud Investigations
The following case example relates to misuse of grant funds:
65
Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
California – On December 18, 2022, the United States entered into a False Claims Act
settlement agreement with iSense, LLC (iSense), Specific Diagnostics, Inc. (Specific), and Dr.
Paul Andrew Rhodes. The settlement agreement resolves allegations that between July 1,
2014, and June 30, 2019, iSense submitted costs for employee hours that the United States
contends were at a salary rate in excess of the applicable salary cap. The total amount of
the settlement to be paid is $10,068,875. Of that amount, iSense will pay $4,000,000,
Specific will pay $4,000,000, and Dr. Rhodes will pay $2,068,875. The United States also
contends that iSense knowingly overcharged costs for employee hours at a salary rate not
reduced for uncompensated overtime. These allegations pertain to claims submitted for
payment under multiple grants awarded by NIH. All of the grants at issue were Small
Business Innovation Research (SBIR) grants. This settlement agreement also resolves
allegations that between February 1, 2017, and December 31, 2018, Specific submitted costs
for employee hours that the United States contends were a salary rate in excess of the
applicable salary cap. Additionally, the United States contends that Specific knowingly
overcharged costs for employee hours at a salary rate not reduced for uncompensated
overtime. The allegations pertain to claims submitted for payment under two grants
awarded by NIH. These two grants were SBIR grants. The settlement agreement further
resolves allegations that between February 1, 2018, and July 28, 2020, Specific and Dr.
Rhodes knowingly submitted a services agreement between Specific and iSense as properly
dated, which were knowingly backdated. These allegations pertain to claims for payment
that were caused to be submitted under an award from ASPR. Specific was a subrecipient
of this award, which is known as Combating Antibiotic-Resistant Bacteria (CARB-X). Lastly,
the settlement agreement resolves allegations that between January 1, 2015, and December
31, 2019, Dr. Rhodes and iSense submitted as accurately dated to the United States cost-
sharing agreements between Specific and iSense that were knowingly backdated.
Small Business Innovative Research Program
The National Defense Authorization Act for Fiscal Year 2012, § 5143, requires OIG to report annually
on the number of cases referred to OIG for fraud, waste, or abuse in the Small Business Innovation
Research/Small Business Technology Transfer (SBIR/STTR) program. OIG must also report on: (1)
the actions taken in each case; (2) justification for not taking action on a case; and (3) an
accounting of funds used to address waste, fraud, and abuse in this program. From October 1,
2021, through September 30, 2022, OIG received one referral related to potential fraud, waste, or
abuse with respect to SBIR/STTR programs, and no cases were opened. For FY 2022, there was
one SBIR civil settlement for $541,531. In FY 2022, OIG spent approximately $316,800 in salaries on
auditing, investigating, and training activities related to fraud, waste, and abuse in the SBIR/STTR
programs. At the end of FY 2022, OIG was working on two SBIR/STTR investigations.
66
Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
Recovery Act Retaliation Complaint Investigations
The American Recovery and Reinvestment Act, § 1553 (Recovery Act) prohibits non-Federal
employers that have received Recovery Act funding from retaliating against employees who
disclose evidence of mismanagement of Recovery Act funds or any violation of law related to
Recovery Act funds. OIGs are required to include in their Semiannual Report the retaliation
complaint investigations that they decided not to conduct or continue during the reporting period.
During this semiannual reporting period, OIG did not close, decline, or give extensions on Recovery
Act Retaliation Complaint investigations of whistleblower retaliation.
Contract Audits
Pursuant to the National Defense Authorization Act for FY 2008, § 845, OIGs appointed under the
Inspector General Act of 1978 are required to submit information on final completed contract audit
reports issued during the period to the contracting activity as part of their semiannual report,
pursuant to section 5 of the Inspector General Act. This information must contain significant audit
findings. OIG issued no final reports meeting § 845 criteria during this semiannual reporting
period.
OIG Reviews of Non-Federal Audits
OIG reviews audits conducted by non-Federal auditors of entities receiving Federal awards. During
this semiannual reporting period, OIG’s Single Audit Division reviewed 265 reports covering $2.1
trillion in audited costs. Federal dollars covered by these audits totaled $678.3 billion, of which
about $298.3 billion were HHS funds.
Uniform guidance at 2 CFR 200 Subpart F establishes audit requirements for State and local
governments, colleges and universities, and nonprofit organizations receiving Federal awards.
Under the uniform guidance, covered entities must conduct annual organizationwide “single
audits” of all Federal money they receive. These audits are conducted by non-Federal auditors,
such as public accounting firms and State auditors. OIG reviews the quality of these audits and
assesses the adequacy of the entities’ management of Federal funds.
OIG’s oversight of non-Federal audit activity informs Federal managers about the soundness of
management of Federal programs and identifies any significant areas of internal control weakness,
noncompliance, and questioned costs for resolution or followup. We identify entities for high-risk
monitoring, alert program officials to any trends that could indicate problems in HHS programs,
and profile non-Federal audit findings of a particular program or activity over time to identify
systemic problems. We also provide training and technical assistance to grantees and members of
the auditing profession. OIG maintains a process to assess the quality of the non-Federal reports
received and the audit work that supports the selected reports.
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
OIG’s reports on non-Federal audits reviewed during this reporting period are categorized in the
following table.
Non-Federal Audits, October 1, 2022, Through March 31, 2023
Not requiring changes or having minor changes 254
Requiring major changes 10
Having significant technical inadequacies 1
Total Number of Non-Federal Audits 265
Other Reporting Requirements and Reviews
Legislative and Regulatory Reviews
Pursuant to the Inspector General Act, § 4(a)(2), OIG is required to review existing and proposed
legislation and regulations relating to HHS’s programs and operations and make recommendations
concerning their impact on economy and efficiency or the prevention and detection of fraud and
abuse. Most audits and other reviews that we conduct are designed to test compliance with
and/or assess the administration and oversight of existing laws and regulations. Our reports of
such reviews describe findings, which include questioned costs, inefficiencies, vulnerabilities to
fraud, inconsistencies, errors in application, or weaknesses in oversight or supporting systems. Our
corresponding recommendations tell HHS and its OpDivs or StaffDivs what administrative,
regulatory, or legislative actions we believe are needed to effectively respond to the findings. Our
regularly published core publications reflect the relationship between our work and laws and
regulations.
• This report, like our previous Semiannual Reports to Congress, describes findings and
recommendations from recently completed reviews, many of which focus on existing laws and
regulations.
• OIG’s Top Unimplemented Recommendations: Solutions To Reduce Fraud, Waste, and Abuse
in HHS Programs describes priority findings and recommendations from past periods that
remain to be implemented.
• Our Work Plan provides citations to laws and regulations that are the subject of ongoing or
future reviews.
We also review proposed legislation and regulations related to HHS programs and operations. In
addition, we provide independent, objective technical assistance on a bipartisan, bicameral basis to
congressional committees and members who request it.
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
Appendix A: Questioned Costs and Funds To
Be Put to Better Use
The following tables summarize OIG’s monetary recommendations and HHS’s 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.
The lists of issued reports includes all reports and is provided in accordance with the Inspector General Act,
§§ 5(a)(6).
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 50 $1,600,255,000 $558,210,000
Issued during the reporting period2 28 $277,236,000 $89,769,000
Total Section 1 78 $1,877,491,000 $647,979,000
Section 2
Reports for which management decisions were made
during the reporting period3
Disallowed costs 9 *$200,828,000 $0
Costs not disallowed 14 $757,365,000 $559,212,000
Total Section 2 23 $958,193,000 $559,212,000
* Audit receivables (expected recoveries).
Section 3
Reports for which no management decisions had been
made by the end of the reporting period
(Section 1 - Section 2) 55 $919,298,000 $88,767,000
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Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
Section 4
Reports for which no management decisions were made
within 6 months of issuance4 31 $650,607,000 $0
Table 1 End Notes
1
The opening balance was adjusted upward by $4,000 because of a reevaluation of previously issued
recommendations.
2
Four issued reports containing recommendations for both questioned costs and funds put to better use are
counted in Table 1 and Table 2.
3
Revisions to previously reported management decisions:
A-05-18-00040, Medicare Hospital Provider Compliance Audit: St. Vincent Hospital. CMS’s subsequent review
determined that disallowed costs should be reduced by $802,000.
A-06-20-04003, Vanderbilt University Medical Center: Audit of Outpatient Outlier Payments. CMS’s subsequent review
determined that disallowed costs should be increased by $124,865.
4
Because of administrative delays, some of which were beyond management control, resolution of the following 31
audits were not completed within 6 months of issuance of the reports; however, agency management has informed
us that the agency is working to resolve the outstanding recommendations before the end of the next semiannual
reporting period.
Audits For Which No Management Decision Was Received Within 6 Months of Issuance
Audit CIN Audit Title
A-07-16-01165 Medicare Advantage Compliance Audit of Diagnosis Codes That Humana, Inc.
(Contract H1036), Submitted to CMS, APR 2021, $197,720,651
A-02-14-02017 New York Misallocated Costs to Establishment Grants for a Health Insurance
Marketplace, NOV 2016, $149,654,512
A-07-17-01169 Medicare Advantage Compliance Audit of Diagnosis Codes That SCAN Health Plan
(Contract H5425) Submitted to CMS, FEB 2022, $54,318,154
A-05-19-00039 Medicare Advantage Compliance Audit of Specific Diagnosis Codes That
HumanaChoice (Contract R5826) Submitted to CMS, SEPT 2022, $34,414,828
A-01-14-02503 Maryland Misallocated Millions to Establishment Grants for a Health Insurance
Marketplace, MAR 2015, $28,400,000
A-04-14-07050 Kentucky Misallocated Millions to Establishment Grants for a Health Insurance
Marketplace, FEB 2017, $25,530,429
A-07-18-04111 Mississippi Needs To Improve Oversight of Its Child Care Payment Program, APR
2020, $22,284,900
A-02-15-02008 New York Did Not Comply With Federal Grant Requirements for Allocating and
Claiming Marketplace Contract Costs, DEC 2017, $20,415,344
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A-07-15-04226 Not All of Missouri's Child Care Subsidy Program Payments Complied With Federal
and State Requirements, NOV 2017, $19,076,167
A-02-18-01028 Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Blue Cross
Blue Shield of Michigan (Contract H9572) Submitted to CMS, FEB 2021, $14,534,375
A-01-15-02500 Vermont Did Not Properly Allocate Millions to Establishment Grants for a Health
Insurance Marketplace, SEPT 2016, $11,243,006
A-02-20-01009 Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Cariten
Health Plan, Inc., (Contract H4461) Submitted to CMS, JULY 2022, $9,212,531
A-01-20-00006 More Than 90 Percent of the New Hampshire Managed Care Organization and Fee-
for-Service Claims for Opioid Treatment Program Services Did Not Comply With
Medicaid Requirements, JUNE 2022, $7,943,271
A-07-19-01195 Medicare Advantage Compliance Audit of Specific Diagnosis Codes That BlueCross
BlueShield of Tennessee, Inc. (Contract H7917) Submitted to CMS, SEPT 2022,
$7,784,540
A-07-19-01188 Medicare Advantage Compliance Audit of Specific Diagnosis Codes That UPMC
Health Plan, Inc. (Contract H3907) Submitted to CMS, NOV 2021, $6,401,297
A-03-19-00001 Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Highmark
Senior Health Company (H3916) Submitted to CMS, SEPT 2022, $6,227,005
A-05-18-00020 Medicare Advantage Compliance Audit of Diagnosis Codes That Inter Valley Health
Plan, Inc. (Contract H0545), Submitted to CMS, SEPT 2022, $5,372,998
A-02-18-01029 Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Healthfirst
Health Plan, Inc., (Contract H3359) Submitted to CMS, JAN 2022, $5,221,901
A-01-19-00500 Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Tufts Health
Plan (Contract H2256) Submitted to CMS, FEB 2022, $3,758,335
A-04-19-07084 Medicare Advantage Compliance Audit of Specific Diagnosis Codes That WellCare of
Florida, Inc., (Contract H1032) Submitted to CMS, AUG 2022, $3,518,465
A-07-19-01187 Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Anthem
Community Insurance Company, Inc. (Contract H3655) Submitted to CMS, MAY 2021,
$3,468,954
A-06-18-05002 Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Peoples
Health Network (Contract H1961) Submitted to CMS, MAY 2022, $3,312,219
A-02-16-02013 The Children's Village, Inc., an Administration for Children and Families Grantee, Did
Not Always Comply With Applicable Federal and State Policies and Requirements,
APR 2019, $2,623,785
A-07-17-02808 The Colorado Health Insurance Marketplace’s Financial Management System Did Not
Always Comply With Federal Requirements, JULY 2018, $2,567,604
A-09-20-03009 Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Regence
BlueCross BlueShield of Oregon (Contract H3817) Submitted to CMS, SEPT 2022,
$1,890,855
A-05-14-00045 The Minnesota Marketplace Misallocated Federal Funds and Claimed Unallowable
Costs, NOV 2016, $1,279,677
A-02-18-02011 Gateway Community Action Partnership Claimed Unallowable Costs, Did Not
Comply With Federal Regulations on Construction and Major Renovations, and Did
Not Accurately Account for Grant Funds, MAY 2021, $932,907
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A-09-14-01007 Nevada Misallocated Costs for Establishing a Health Insurance Marketplace to Its
Establishment Grants, FEB 2016, $893,464
A-07-17-01173 Medicare Advantage Compliance Audit of Specific Diagnosis Codes That Coventry
Health Care of Missouri, Inc. (Contract H2663) Submitted to CMS, OCT 2021,
$548,852
A-03-18-00002 Medicare Advantage Compliance Audit of Diagnosis Codes That Cigna HealthSpring
of Florida, Inc. (Contract H5410) Submitted to CMS, AUG 2022, $39,612
A-03-16-00250 Youth for Tomorrow – New Life Center, Inc., an Administration for Children and
Families Grantee, Did Not Comply With All Applicable Federal Policies and
Requirements, SEPT 2020, $16,851
TOTAL CINS: 31
TOTAL AMOUNT: $650,607,489
Audit Reports With Funds Recommended To Be Put to Better Use
The phrase “recommendations that funds be put to better use” means that funds could be used more
efficiently if management took action to implement an OIG recommendation through reductions in
outlays, de-obligation of funds, and/or avoidance of unnecessary expenditures. Table 2 reports HHS
program officials’ decisions to take action on these audit recommendations.
Table 2: Audit Reports With Funds Put to Better Use
Number of
Description Reports Dollar Value
Section 1
Reports for which no management decisions had been made by the
beginning of the reporting period 8 $17,121,659,000
Reports issued during the reporting period 1
5 $328,116,000
Total Section 1 13 $17,449,775,000
Section 2
Reports for which management decisions were made during the
reporting period
Value of recommendations agreed to by management
Based on proposed management action 0 $0
Based on proposed legislative action 0 $0
Value of recommendations not agreed to by management 5 $2,089,668,000
Total Section 2 5 $2,089,668,000
Section 3
Reports for which no management decisions had been made by the
end of the reporting period1 (Section 1 - Section 2)2,3 8 $15,360,107,000
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Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
Table 2 End Notes
1
Four issued reports containing recommendations for both questioned costs and funds put to better use are counted
in Table 1 and Table 2.
2
Included is a management decision submitted during the period on $15 billion that is under management review.
3
Because of administrative delays, some of which were beyond management control, three of the eight audits open
at end of the period were not resolved within 6 months of report issuance. OIG is working with management to
reach resolution on these recommendations before the end of the next semiannual reporting period.
Audits For Which No Management Decision Was Received Within 6 Months of Issuance
Audit CIN Audit Title
A-03-13-03002 HHS Did Not Identify and Report Antideficiency Act Violations, MAY 2017, $49,445,025
A-07-17-01176 Incorrect Acute Stroke Diagnosis Codes Submitted by Traditional Medicare Providers Resulted in
Millions of Dollars in Increased Payments to Medicare Advantage Organizations, SEPT 2020,
$14,417,533
A-09-20-03016 Medicare Improperly Paid Durable Medical Equipment Suppliers an Estimated $8 Million of the $40
Million Paid for Power Mobility Device Repairs, MAY 2022, $3,739,346
TOTAL CINS: 3
TOTAL AMOUNT: $67,601,904
Audit Reports by Issue Date
Report Number Title Issued Questioned Funds Put to
Costs Better Use
A-17-22-54000 U.S. Department of Health and Human Services Met 10/12/2022 - -
the Requirements of the Digital Accountability and
Transparency Act of 2014, With Areas That Require
Improvement
A-07-21-04125 IHS Did Not Always Provide the Necessary Resources 10/17/2022 - -
and Assistance To Help Ensure That Tribal Programs
Complied With All Requirements During Early COVID-
19 Vaccination Program Implementation
A-05-20-00053 Payments Made to Providers Under the COVID-19 10/24/2022 - -
Accelerated and Advance Payments Program Were
Generally in Compliance With the CARES Act and
Other Federal Requirements
A-02-20-01027 CMS Generally Ensured That Medicare Part C and Part 10/25/2022 - -
D Sponsors Did Not Pay Ineligible Providers for
Services to Medicare Beneficiaries
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A-04-21-07097 California Made Almost $16 Million in Unallowable 10/25/2022 $15,722,587 -
Capitation Payments for Beneficiaries With Multiple
Client Index Numbers
A-07-21-02834 Colorado Did Not Report and Refund the Correct 10/25/2022 $3,669,738 -
Federal Share of Medicaid-Related Overpayments for
70 Percent of the State's Medicaid Fraud Control Unit
Cases
A-04-21-08084 CMS Can Use OIG Audit Reports To Improve Its 10/26/2022 - -
Oversight of Hospital Compliance
A-07-21-06101 Mississippi Did Not Always Invoice Rebates to 10/27/2022 $2,218,202 $35,611,451
Manufacturers for Physician-Administered Drugs
A-01-20-01504 Three Tribes in New England and Their Health 11/4/2022 - -
Programs Did Not Conduct Required Background
Investigations on All Individuals in Contact With Indian
Children
A-17-22-53000 Report on the Financial Statement Audit of the Centers 11/7/2022 - -
for Medicare & Medicaid Services for Fiscal Year 2022
A-07-21-06105 Iowa Implemented Most of Our Prior Audit 11/9/2022 - -
Recommendations and Generally Complied With
Federal and State Requirements for Reporting and
Monitoring Major Incidents
A-09-21-03004 The Number of Beneficiaries Who Received Medicare 11/9/2022 - -
Part B Clinical Laboratory Tests Decreased During the
First 10 Months of the COVID-19 Pandemic
A-09-19-03001 Medicare Advantage Compliance Audit of Specific 11/10/2022 $2,033,039 -
Diagnosis Codes That California Physicians' Service,
Inc. (Contract H0504) Submitted to CMS
A-17-22-00001 Financial Statement Audit of the Department of Health 11/14/2022 - -
and Human Services for Fiscal Year 2022
A-01-20-00500 Medicare Advantage Compliance Audit of Specific 11/16/2022 $4,894,595 -
Diagnosis Codes That Blue Cross & Blue Shield of
Rhode Island (H4152) Submitted to CMS
A-04-21-00132 The Centers for Medicare & Medicaid Services' Review 11/17/2022 - -
Contractors Generally Conducted Medicaid Fee-for-
Service Claim Reviews for Selected States Under the
Payment Error Rate Measurement Program in
Accordance with Federal and State Requirements
A-06-21-08004 National Government Services, Inc., Accurately 11/17/2022 $2,138,011 -
Calculated Hospice Cap Amounts but Did Not Collect
All Cap Overpayments
A-18-20-08005 Puerto Rico MMIS and E&E Systems Security Controls 11/18/2022 - -
Were Generally Effective, but Some Improvements Are
Needed
74
Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
A-01-20-00503 Medicare Improperly Paid Physicians for Co-Surgery 11/22/2022 $56,016 $4,883,570
and Assistant-at-Surgery Services That Were Billed
Without the Appropriate Payment Modifiers
A-06-20-04008 Medicare Providers Did Not Always Comply With 11/22/2022 $33,332 $42,233,599
Federal Requirements When Billing for Advance Care
Planning
A-04-21-09003 The Centers for Medicare & Medicaid Services' Review 12/8/2022 - -
Contractor Did Not Document Medicaid Managed
Care Payment Review Determinations Made Under the
Payment Error Rate Measurement Program
A-07-20-02825 Providers Did Not Always Comply With Federal 12/15/2022 - -
Requirements When Claiming Medicare Bad Debts
A-03-20-00201 Keystone First Should Improve Its Procedures for 12/20/2022 - -
Reviewing Service Requests That Require Prior
Authorization
A-05-20-00031 Mandated Analysis of Home Health Service Utilization 12/20/2022 - -
From January 2016 Through March 2022
A-04-20-02032 The Municipality of Manati Did Not Always Manage Its 12/21/2022 $153,052 -
Head Start Disaster Assistance Awards in Accordance
With Federal and Commonwealth Requirements
A-05-21-00035 Illinois Generally Complied With Requirements for 12/21/2022 $9,832 -
Claiming Medicaid Reimbursement for Telehealth
Payments During COVID-19
A-07-22-00624 National Government Services, Inc., Claimed Some 12/21/2022 $636,197 -
Unallowable Medicare Postretirement Benefit Plan
Costs Through Its Incurred Cost Proposals
A-07-22-00625 National Government Services, Inc., Claimed Some 12/21/2022 $209,543 -
Unallowable Medicare Supplemental Executive
Retirement Plan Costs Through Its Incurred Cost
Proposals
A-07-22-00628 National Government Services, Inc., Claimed Some 12/21/2022 $657,765 -
Unallowable Medicare Nonqualified Plan Costs
Through Its Incurred Cost Proposals
A-07-19-01193 Medicare Advantage Compliance Audit of Specific 12/22/2022 $5,987,509 -
Diagnosis Codes That Cigna-HealthSpring of
Tennessee, Inc. (Contract H4454) Submitted to CMS
A-07-22-00620 National Government Services, Inc., Understated Its 1/5/2023 $54,544 -
Plan A Medicare Segment Pension Assets and
Overstated Medicare's Share of the Medicare Segment
Excess Pension Liabilities as of December 31, 2018
A-07-22-00621 National Government Services, Inc., Overstated Its Plan 1/5/2023 - -
B Medicare Segment Pension Assets and Overstated
Medicare's Share of the Medicare Segment Excess
Pension Assets as of December 31, 2018
75
Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
A-07-22-00622 National Government Services, Inc., Overstated Its 1/6/2023 - -
United Government Services, LLC, Medicare Segment
Pension Assets and Understated Medicare's Share of
the Medicare Segment Excess Pension Liabilities as of
December 31, 2018
A-07-22-00623 National Government Services, Inc., Claimed Some 1/7/2023 $73,307 -
Unallowable Medicare Pension Costs Through Its
Incurred Cost Proposals
A-01-21-01502 ASPR Could Improve Its Oversight of the Hospital 1/13/2023 - -
Preparedness Program To Ensure That Crisis Standards
of Care Comply With Federal Nondiscrimination Laws
A-18-21-11100 FDA Should Improve Its Management of Contracts for 1/13/2023 - -
the Acquisition of Information Technology
A-03-23-00351 Independent Attestation Review: National Institutes of 1/18/2023 - -
Health Fiscal Year 2022 Detailed Accounting
Submission and Budget Formulation Compliance
Report for National Drug Control Activities, and
Accompanying Required Assertions
A-03-23-00352 Independent Attestation Review: Centers for Disease 1/18/2023 - -
Control and Prevention Fiscal Year 2022 Detailed
Accounting Submission and Budget Formulation
Compliance Report for National Drug Control
Activities, and Accompanying Required Assertions
A-03-23-00353 Independent Attestation Review: Food and Drug 1/18/2023 - -
Administration Fiscal Year 2022 Detailed Accounting
Submission and Budget Formulation Compliance
Report for National Drug Control Activities, and
Accompanying Required Assertions
A-05-21-00025 The National Institutes of Health and EcoHealth 1/25/2023 $89,171 -
Alliance Did Not Effectively Monitor Awards and
Subawards, Resulting in Missed Opportunities to
Oversee Research and Other Deficiencies
A-02-19-02008 Greater Bergen Community Action, Inc., Did Not 1/26/2023 $487,411 -
Manage Its Head Start Awards in Accordance With
Federal and State Requirements
A-07-21-07002 North Carolina Did Not Always Invoice Rebates to 2/7/2023 $3,742,833 -
Manufacturers for Physician-Administered Drugs
A-05-21-00030 Michigan Did Not Comply With Requirements for 2/8/2023 - -
Documenting Psychotropic and Opioid Medications
Prescribed for Children in Foster Care
A-05-21-00028 Florida Made Capitation Payments for Enrollees Who 2/16/2023 - -
Were Concurrently Enrolled in a Medicaid Managed
Care Program in Another State
A-18-20-08200 The Health Resources and Services Administration 2/22/2023 - -
Should Improve Preventive and Detective Controls To
More Effectively Mitigate the Risk of Compromise
76
Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
A-07-20-03243 Missouri Claimed Federal Medicaid Reimbursement for 2/23/2023 $121,189,991 -
Tens of Millions in Consumer-Directed Personal Care
Assistance Services That Did Not Comply With Federal
and State Requirements
A-09-21-03006 Medicare Could Have Saved up to $216 Million Over 5 2/27/2023 - $215,839,412
Years if Program Safeguards Had Prevented At-Risk
Payments for Definitive Drug Testing Services
A-09-20-03033 Medicare Part D Plan Sponsors and CMS Did Not 2/28/2023 $105,951,927 -
Ensure That Transmucosal Immediate-Release
Fentanyl Drugs Were Dispensed Only to Beneficiaries
Who Had a Cancer Diagnosis
A-07-21-06102 State Agencies Did Not Always Ensure That Children 3/2/2023 - -
Missing From Foster Care Were Reported to the
National Center for Missing and Exploited Children in
Accordance With Federal Requirements
A-04-21-07098 Florida Did Not Invoice Manufacturers for Some 3/3/2023 $59,898 -
Rebates for Physician-Administered Drugs Dispensed
to Enrollees of Medicaid Managed-Care Organizations
A-06-17-09004 Texas Could Not Support the Permissibility of the 3/8/2023 - -
Funds Used as the State Share of the Medicaid Delivery
System Reform Incentive Payment Program
A-18-20-08004 Michigan MMIS and E&E Systems Security Controls 3/9/2023 - -
Were Generally Effective, but Some Improvements Are
Needed
A-07-21-00618 Medicare Improperly Paid Physicians for Epidural 3/10/2023 $3,585,422 -
Steroid Injection Sessions
A-04-21-08089 Georgia Did Not Always Invoice Rebates to 3/13/2023 $2,308,312 -
Manufacturers for Pharmacy and Physician-
Administered Drugs
A-04-22-00134 Georgia Did Not Comply With Federal Waiver and 3/14/2023 - -
State Requirements at All 20 Adult Day Health Care
Facilities Reviewed
A-03-20-00200 The District of Columbia Has Taken Significant Steps 3/16/2023 - -
To Ensure Accountability Over Amounts Managed Care
Organizations Paid to Pharmacy Benefit Managers
A-09-21-03011 Medicare Advantage Compliance Audit of Specific 3/16/2023 $566,476 -
Diagnosis Codes That Geisinger Health Plan (Contract
H3954) Submitted to CMS
A-07-21-03247 Missouri's Oversight of Certified Individualized 3/21/2023 - -
Supported Living Provider Health and Safety Could Be
Improved in Some Areas
A-09-22-03006 Medicare Improperly Paid Physicians an Estimated $30 3/22/2023 $18,084 $29,548,088
Million for Spinal Facet-Joint Interventions
A-01-22-02500 Maryland's Child Support Administration Generally 3/23/2023 - -
Claimed Administrative Costs That Were Allowable
and Allocable
77
Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
A-02-20-01008 Medicare Advantage Compliance Audit of Specific 3/24/2023 $220,577 -
Diagnosis Codes That MCS Advantage, Inc. (Contract
H5577) Submitted to CMS
A-07-19-01192 Medicare Advantage Compliance Audit of Specific 3/28/2023 $468,372 -
Diagnosis Codes That Cigna-HealthSpring Life &
Health Insurance Company, Inc. (Contract H4513)
Submitted to CMS
Total Reports: 62 $277,235,743 $328,116,120
Evaluation Reports by Operating Division
Report Number Title Operating Issue Date
Division
OEI-04-20-00360 During the Initial COVID-19 Response, HHS Personnel Who Interacted CDC Oct-22
With Potentially Infected Passengers Had Limited Protections
OEI-05-22-00010 Challenges With Vaccination Data Hinder State and Local CDC Jan-23
Immunization Program Efforts To Combat COVID-19
OEI-04-21-00190 Early Challenges Highlight Areas for Improvement in COVID-19 CDC Jan-23
Vaccination Programs
OEI-01-21-00110 Home Health Agencies Used Multiple Strategies To Respond to the CMS Oct-22
COVID-19 Pandemic, Although Some Challenges Persist
OEI-07-20-00500 Long-Term Trends of Psychotropic Drug Use in Nursing Homes CMS Nov-22
OEI-03-23-00070 Comparison of Average Sales Prices and Average Manufacturer Prices: CMS Nov-22
Results for the Second Quarter of 2022
OEI-07-18-00370 For Medicaid-Enrolled Children Diagnosed With Lead Toxicity in Five CMS Dec-22
States, Documentation Reviewed for Diagnoses and Treatment
Services Raises Concerns
OEI-09-20-00510 Labs With Questionably High Billing for Additional Tests Alongside CMS Dec-22
COVID-19 Tests Warrant Further Scrutiny
OEI-03-21-00390 CMS Should Bolster Its Oversight of Manufacturer-Submitted Average CMS Dec-22
Sales Price Data To Ensure Accurate Part B Drug Payments
OEI-BL-21-00330 Manufacturers May Need Additional Guidance To Ensure Consistent CMS Dec-22
Calculations of Average Sales Prices
OEI-09-22-00400 Medicare Part B Spending on Lab Tests Increased in 2021, Driven By CMS Dec-22
Higher Volume of COVID-19 Tests, Genetic Tests, and Chemistry Tests
OEI-02-20-00491 More Than a Thousand Nursing Homes Reached Infection Rates of 75 CMS Jan-23
Percent or More in the First Year of the COVID-19 Pandemic; Better
Protections Are Needed for Future Emergencies
OEI-03-21-00380 The Inability To Identify Denied Claims in Medicare Advantage CMS Feb-23
Hinders Fraud Oversight
OEI-03-23-00080 Comparison of Average Sales Prices and Average Manufacturer Prices: CMS Feb-23
Results for the Third Quarter of 2022
OEI-BL-23-00170 Technical Assistance Brief: Implementation of Inflation-Indexed CMS Feb-23
Rebates for Part B Drugs
78
Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
OEI-BL-23-00010 Some Skin Substitute Manufacturers Did Not Comply with New ASP CMS Mar-23
Reporting Requirements
OEI-01-20-00241 FDA's Approach to Overseeing Online Tobacco Retailers Needs FDA Dec-22
Improvement
OEI-09-23-00190 Medicaid Fraud Control Units Fiscal Year 2022 Annual Report MFCU Mar-23
OEI-07-22-00370 Rhode Island Medicaid Fraud Control Unit: 2022 Inspection MFCU Mar-23
Total Reports: 19
79
Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
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 reporting period.
Peer reviews are conducted by member organizations of the Council of the Inspectors General on Integrity
and Efficiency (CIGIE).
Office of Audit Services
During this semiannual reporting period, no peer reviews involving OAS were completed. As such,
information concerning OAS’s peer review activity during prior reporting periods is listed here.
OAS Date Reviewing Office Office Reviewed
September 2022 HHS-OIG, OAS Department of Labor (DOL) OIG
The system of quality control for the audit organization of DOL-OIG in effect for the fiscal year
ending September 30, 2021, has been suitably designed and complied with to provide DOL-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. DOL-OIG received a peer review rating of pass.
OAS Date Reviewing Office Office Reviewed
March 2021 General Services HHS-OIG, OAS
Administration OIG
The system of quality control for the audit organization of HHS-OIG in effect for the fiscal year
ending September 30, 2020, has been suitably designed and complied with to provide HHS-OIG
with reasonable assurance of performing and reporting in conformity with applicable professional
standards in all material respects. Federal audit organizations can receive a rating of pass, pass
with deficiencies, or fail. HHS-OIG received a peer review rating of pass.
Office of Investigations
During this semiannual reporting period, no peer reviews involving OI were completed. As such,
information concerning OI’s peer review activities during prior reporting periods is listed here.
OI Date Reviewing Office Office Reviewed
February 2023 HHS-OIG, OI DOD-OIG
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
The system of internal safeguards and management procedures for the investigative function of
DOD-OIG in effect for the year ending December 31, 2022, was in full compliance with the quality
standards established by CIGIE and the Attorney General’s guidelines.
OI Date Reviewing Office Office Reviewed
October 2018 Social Security HHS-OIG, OI
Administration OIG
The system of internal safeguards and management procedures for the investigative function of
HHS-OIG in effect for the year ending September 30, 2018, was in full compliance with the quality
standards established by CIGIE and the Attorney General’s guidelines.
OI Date Reviewing Office Office Reviewed
August 2017 HHS-OIG, OI U.S. Postal Service OIG
The system of internal safeguards and management procedures for the investigative function of
the U.S. Postal Service OIG in effect for the year ending September 30, 2015, was in full compliance
with the quality standards established by CIGIE and the Attorney General’s guidelines.
Office of Evaluation and Inspections
During this semiannual reporting period, one peer review involving OEI was completed. Information
concerning OEI’s peer review activity during a prior reporting period is also listed here.
OEI Date Reviewing Office Office Reviewed
March 2023 HHS-OIG, OEI Special Inspector General for
Afghanistan Reconstruction
(SIGAR) OIG
The SIGAR Audits and Inspections Directorate and the Lessons Learned Program (collectively,
SIGAR-OIG) policies and procedures complied with CIGIE’s Quality Standards for Inspection and
Evaluation (known as the Blue Book), December 2020. In addition, each of the three reviewed
SIGAR-OIG reports complied with those standards and the SIGAR-OIG’s internal policies and
procedures. SIGAR concurred with the three recommendations issued in the Letter of Comment
regarding the Blue Book standards for independence, competence, and planning.
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 CIGIE’s seven
Blue Book standards: Quality Control, Planning, Data Collections and Analysis, Evidence, Records
Maintenance, Reporting, and Follow-up. The assessment included a review of OEI’s internal
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Department of Health and Human Services, Office of Inspector General
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policies and procedures documented in the OEI procedures manual. It also included a review of
four reports issued between June 1, 2019, and June 1, 2020, to determine whether the reports
compiled with the seven standards and internal policies and procedures. The review team
determined that OEI’s policies and procedures generally met the seven standards. The four reports
reviewed generally met the standards and complied with OEI’s internal policies and procedures.
OEI Date Reviewing Office Office Reviewed
June 2020 HHS-OIG, OEI Department of Veterans Affairs
(VA) OIG
The VA Office of Inspector General, Office of Audits and Evaluations, and Office of Healthcare
Inspections (collectively, VA-OIG) policies and procedures addressed CIGIE’s seven Blue Book
standards: Quality Control, Planning, Data Collections and Analysis, Evidence, Records
Maintenance, Reporting, and Follow-up. 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 DoD-OIG
The DOD-OIG Inspection and Evaluation component’s policies and procedures generally met
CIGIE’s Blue Book standards. 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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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
Appendix C: Summary of Sanction Authorities
The Inspector General Act of 1978, as amended, specifies requirements for semiannual reports to be made
to the Secretary of Health and Human Services for transmittal to Congress. A selection of other authorities
appears below.
Program Exclusions
Section 1128 of the Social Security Act (42 U.S.C. § 1320a-7), provides numerous 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 17 other grounds, including
misdemeanors for health care fraud other than Medicare or Medicaid fraud; 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.
Providers subject to exclusion are granted due process rights. These include a hearing before an
administrative law judge and appeals to the HHS Departmental Appeals Board and Federal district and
appellate courts regarding the basis for and the length of the exclusion.
Civil Monetary Penalties Law
The CMPL, found at section 1128A of the Social Security Act (42 U.S.C. § 1320a-7a), authorizes penalties,
assessments, and exclusion from participation in Federal health care programs for engaging in certain
activities. For example, a person who submits, or causes to be submitted, to a Federal health care program
a claim for items and services that the person knows, or should know, is false or fraudulent is subject to a
penalty of up to $20,000 for each item or service falsely or fraudulently claimed, an assessment of up to
three times the amount falsely or fraudulently claimed, and exclusion.
For the purposes of the CMPL, “should know” is defined to mean that the person acted in reckless
disregard or deliberate ignorance of the truth or falsity of the claim. The law and its implementing
regulations also authorize actions for a variety of other violations, including submission of claims for items
or services furnished by an excluded person, requests for payment in violation of an assignment
agreement, and payment or receipt of remuneration in violation of the Federal anti-kickback statute (42
U.S.C. § 1320a-7b(b)).
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Department of Health and Human Services, Office of Inspector General
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The 21st Century Cures Act (enacted on December 13, 2016) added more grounds for imposing CMPs,
assessments, and exclusions from Federal health care programs for fraudulent and other improper conduct
related to HHS grants, contracts, and other agreements. OIG may impose a CMP of up to $10,000 per
specified claim, an assessment of up to three times the amount claimed, and an exclusion upon any person
who knowingly presents a specified claim under an HHS grant, contract, or other agreement that they
know or should know is false or fraudulent. In addition, OIG may impose a CMP of up to $50,000, an
assessment of up to three times the amount of funds at issue, and an exclusion upon any person who: (1)
knowingly makes a false statement in a document required to be submitted to receive funds under an HHS
contract, grant, or other agreement; (2) knowingly makes or uses a false record or statement that is
material to a false or fraudulent claim; or (3) knowingly makes or uses a false record or statement material
to an obligation to pay or transmit funds or property owed to HHS. OIG may also impose a CMP of up to
$10,000 per day, an assessment of up to three times the amount at issue, and an exclusion upon any
person who knowingly conceals, or knowingly and improperly avoids or decreases, an obligation owed to
HHS with respect to an HHS grant, contract, or other agreement. Finally, OIG may impose a penalty of up
to $15,000 per day and an exclusion upon any person who fails to grant timely access to OIG upon
reasonable request for the purpose of audits, investigations, evaluations, or other statutory functions of the
OIG in matters involving HHS grants, contracts, or other agreements.
Patient Dumping
Section 1867 of the Social Security Act (42 U.S.C. § 1395dd) provides that when an individual goes to the
Emergency Department 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 when the hospital does not have the capabilities to
stabilize the condition.
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.
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.
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Department of Health and Human Services, Office of Inspector General
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Anti-Kickback Statute and Civil False Claims Act Enforcement Authorities
The Anti-Kickback Statute
The Federal anti-kickback statute makes it a criminal offense to knowingly and willfully offer, pay,
solicit, or receive any remuneration to induce, or in return for, the referral of an individual to a
person for the furnishing of, or arranging for the furnishing of, any item or service reimbursable
under a Federal health care program. The statute’s prohibition also extends to remuneration to
induce, or in return for, the purchasing, leasing, or ordering of, or arranging for or recommending
the purchasing, leasing, or ordering of, any good, facility, service, or item reimbursable by a Federal
health care program (Social Security Act, § 1128B(b) (42 U.S.C. § 1320a-7b(b))).
Individuals and entities who engage in conduct prohibited by the anti-kickback statute may be
subject to criminal penalties and fines under the anti-kickback statute; CMPs under OIG’s authority
pursuant to the Social Security Act, section 1128A(a)(7) (42 U.S.C. § 1320a-7a(a)(7)); and/or program
exclusion under OIG’s permissive exclusion authority under the Social Security Act, section
1128(b)(7) (42 U.S.C. § 1320a-7(b)(7)). In addition, a conviction under the anti-kickback statute leads
to mandatory exclusion under the Social Security Act, section 1128(a)(1) (42 U.S.C. § 1320a-7a(a)(1)).
Finally, a claim that includes items or services resulting from a violation of the Federal anti-kickback
statute constitutes a false or fraudulent claim for purposes of the False Claims Act (Social Security
Act, § 1128B(b)(g) (42 U.S.C. § 1320a-7b(b)(g))).
The False Claims Act
OIG investigates alleged violations of the False Claims Act (31 U.S.C. §§ 3729–3733). Under the
False Claims Act, 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 they
knowingly make or use, or cause to be made or used, a false record or statement to have a false
claim paid. Similar to the CMPL, the False Claims Act defines “knowing” to include instances in
which the person acted in deliberate ignorance or reckless disregard of the truth or falsity of the
information. 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 in 2009.
Among other things, the amendments clarified the reach of the False Claims Act to false claims
submitted to contractors or grantees of the Federal Government.
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Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
Appendix D: Reporting Requirements in the
Inspector General Act of 1978
The reporting requirements of the Inspector General Act of 1978, as amended, along with the location of
the required information, are listed in the following table.
Section Requirement Location
Section 4
(a)(2) Review of legislation and regulations “Other HHS-Related
Reviews and Investigative
Activities” 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 OIG's Top Unimplemented
action has not been completed Recommendations:
Solutions To Reduce Fraud,
Waste, and Abuse in HHS
Programs
(a)(4) Matters referred to prosecutive authorities “Legal and Investigative
Activities Related to the
Medicare and Medicaid”
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
and Appendix A
(a)(7) Summary of significant reports Throughout this report
(a)(8) Statistical Table 1―Audit Reports With Questioned Costs Appendix A
(a)(9) Statistical Table 2―Audit Reports with Funds Put to Better Appendix A
Use
(a)(10) Summary of previous audit reports without management Appendix A
decisions, in which no establishment comment was returned
within 60 days, and in which there are any outstanding
unimplemented recommendations
(a)(11) Description and explanation of revised management Appendix A
decisions
86
Department of Health and Human Services, Office of Inspector General
Semiannual Report to Congress—October 1, 2022, Through March 31, 2023
Section Requirement Location
(a)(12) Management decisions with which the Inspector General None for this reporting
disagrees period
(a)(13) Information required by the Federal Financial Management Nothing to report
Improvement Act of 1996
(a)(14)-(16) Results of peer reviews of HHS-OIG conducted by other Appendix C
OIGs or the date of the last peer review, outstanding
recommendations from peer reviews, and peer reviews
conducted by HHS-OIG of other OIGs
(a)(17) Investigative statistical tables Appendix F
(a)(18) Metrics description for statistical tables Appendix F
(a)(19) Investigations on senior Government employees Appendix F
(a)(20) Description of whistleblower retaliation instances Appendix F
(a)(21) Description of attempts to interfere with OIG independence Appendix F
(a)(22) Description of closed and nondisclosed reports and Appendix F
investigations regarding senior Government employees
Other Reporting Requirements
Section Requirement Location
845 Significant contract audits required to be reported pursuant “Other HHS-Related
to the National Defense Authorization Act for FY 2008 (P.L. Reviews and Investigative
No. 110–181), section 845. Activities” section
205 Pursuant to HIPAA (P.L. No. 104–191), section 205, the Appendix G
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 of the
Social Security Act, section 1128(b) and for developing
special fraud alerts. The Inspector General is also required
to report annually to Congress on the status of the
proposals received related to new or modified safe harbors.
1553 Pursuant to the American Recovery and Reinvestment Act of “Other HHS-Related
2009, P.L. No. 111–5, section 1553, OIG reports to Congress Reviews and Investigative
the retaliation complaint investigations it decided not to Activities” 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 2022, OIG had a total of 86
reports with overdue final management decisions (FMDs) as of the end of this reporting period.
The breakdown of those 86 reports by HHS OpDiv is as follows:
OpDiv Overdue FMDs
ACF 13
ASA 1
ASPR 1
CMS 52
IHS 14
NIH 2
OASH 1
OS 5
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 . . .
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For draft reports that include recommendations, OIG typically requests establishment comments
within 30 days. In some instances, OIG grants extensions when requested and appropriate. When
OIG does not receive establishment comments or a request for extension within the 30-day
timeframe, OIG typically issues the report and notes the lack of establishment comments.
For this semiannual reporting period, OIG had no reports for which no establishment comment
was returned within 60 days of providing the report to the establishment.
(C) for which there are any outstanding unimplemented recommendations, including the aggregate
potential cost savings of those recommendations . . .
OIG is actively tracking 1,379 unimplemented recommendations made in reports issued since FY
2011. Given the volume of recommendations OIG makes each year, the table below reflects
summary data by fiscal year:
Number of Reports
Number of
FY (2011– With Dollar Value of Aggregate
Unimplemented
2023) Unimplemented Potential Cost Savings
Recommendations
Recommendations
2011 12 17 $408,135,515
2012 18 21 $369,932,148
2013 24 36 $232,841,797
2014 22 38 $15,072,080,989
2015 20 32 $296,314,747
2016 16 30 $181,809,287
2017 25 65 $1,100,592,712
2018 32 94 $1,675,138,695
2019 53 151 $718,126,811
2020 66 204 $1,394,187,117
2021 73 171 $834,922,145
2022 94 328 $2,475,128,152
2023 60 192 $505, 914,370
Totals 515 1,379 $25,265,124,485
OIG annually produces OIG's Top Unimplemented Recommendations: Solutions To Reduce Fraud,
Waste, and Abuse in HHS Programs which constitutes OIG’s response to a specific requirement of
the Inspector General Act, as amended (§ 5(a)(3)). The report identifies significant
recommendations with respect to problems, abuses, or deficiencies for which corrective actions
have not been completed. It also includes an appendix that lists OIG’s significant unimplemented
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recommendations, which represent opportunities to achieve expected impact through cost savings,
improvements in program effectiveness and efficiency, or increasing quality of care and safety for
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 Department of Justice for criminal prosecution during
the reporting period;
(C) the total number of persons referred to State and local prosecuting authorities for criminal
prosecution during the reporting period; and
(D) the total number of indictments and criminal information during the reporting period that
resulted from any prior referral to prosecuting authorities . . .
Total number of investigative reports issued during the reporting period, None
including Management Implication Reports and Investigative Advisories
Total number of persons referred3 to Federal prosecuting authorities for 1,192
criminal prosecution during the reporting period4
Total number of persons referred to State and local prosecuting authorities 130
for criminal prosecutions during the reporting period
Total number of Federal indictments and criminal informations during the 276
reporting period that resulted from any prior referral to prosecuting
authorities
Total number of State and local indictments and criminal informations during 74
the reporting period that resulted from any prior referral to prosecuting
authorities
(18) A description of the metrics used for developing the data for the statistical tables under
paragraph (17) . . .
Regarding (17)(A), OIG considers Investigative Reports as Management Implication Reports and
Investigative Advisories. A Management Implication Report identifies systemic weaknesses or
vulnerabilities within HHS programs, which are generally identified during the course of an OIG
investigation and could lead to fraud, waste, or abuse. It provides recommendations to correct or
minimize the problem. Corrective actions may require administrative, procedural, policy,
regulatory, or legislative change. When a Management Implication Report is issued to an HHS
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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 in the previous section provides the number of indictments and
criminal informations during the semiannual reporting period, including sealed indictments and
criminal informations. However, the informations 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 . . .
For this section, OIG describes investigations, both criminal and administrative, involving senior
Government employees for whom allegations of misconduct were investigated and substantiated.
For the reporting period, the OIG investigated two senior Government employees for misconduct
that was substantiated. Descriptions of the investigations are below:
The OIG investigated a senior official (GS-15) for allegedly receiving improper prescription drug
medications, which were prescribed by other employees. It was alleged that the senior official
directed subordinate employees to provide the senior official with prescriptions for controlled
substances without medical examinations. The investigation was presented for Federal prosecution
on July 18, 2022, and was initially accepted. After further investigation, criminal prosecution of the
senior official was declined on February 8, 2023.
The OIG investigated a senior official (GS-15) for alleged financial conflict of interest. It was alleged
that ethics officials directed the senior official to recuse themself from any matters involving a
private company in which their spouse was employed; however, the senior official did not. In
addition, the senior official did not disclose their spouse’s financial interest with the company. This
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investigation was referred to the appropriate HHS operational division for evaluation and
administrative action. The investigation was not presented for prosecution.
OIG provides investigative facts for the purpose of referring a matter or allegation to the
appropriate deciding authority (Department, OpDiv, DOJ, etc.). OIG does not make findings
regarding its investigations of departmental employees. Our reports relay the facts obtained
during the investigations (e.g., parties involved, dates of events). At the conclusion of an OIG
investigation related to 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. Although, we request from the agency a copy of an SF-50 documenting
a personnel action, if one is taken, there are sometimes settlement agreements that may impact
the final action. Therefore, OIG may not have a complete record of the disposition of the
investigation.
(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 . . .
OIG conducts investigations into whistleblower retaliation against current and former HHS
employees; applicants for HHS employment; and HHS contractors, subcontractors, personal
services contractors, grantees, and subgrantees who disclose information to OIG, and other
protected sources, under the authority of the Whistleblower Protection Act of 1989 (41 U.S.C. §
4712), the Military Whistleblower Protection Act (10 U.S.C. § 1034), and Presidential Policy Directive
19. OIG determines whether retaliatory action has been taken and includes these findings in
reports, along with recommendations for corrective action. OIG provides a summary of any
substantiated retaliation report on the OIG website to enhance transparency and employer
accountability. In the reporting period, OIG submitted two report(s) to the Office of the Secretary
of Health and Human Services 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.
OIG conducted an investigation in response to allegations brought forth by a complainant at the
Orangeburg-Calhoun-Allendale-Bamberg (OCAB) Community Action Agency - Bamberg Head
Start Center, an ACF grantee. The complainant alleged that while working in the Bamberg Center,
the complainant’s supervisors and responsible management officials (RMOs) terminated the
complainant for reporting that Federal grant laws were being repeatedly violated by OCAB staff
and management. Specifically, investigators found that the complainant made protected
disclosures to the RMOs at OCAB and in a written complaint submitted to ACF’s Office of Head
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Start alleging what the complainant believed to be grant mismanagement and threats to public
health and safety. OIG investigators found that the RMOs terminated the complainant in
retaliation for making protected disclosures. The OIG investigative report that was issued to the
Secretary of Health and Human Services included recommendations to make the complainant
whole and to provide whistleblower training for OCAB employees, ACF employees who work in the
Head Start program, and Head Start grantee agencies.
OIG conducted an investigation in response to allegations brought forth by a complainant at
Jacobs Technologies, a contractor for DOD. DOD entered into an agreement with HHS to provide
acquisition assistance under an HHS contract with Jacobs Technologies. The complainant alleged
that while working at DOD as a contract employee, the complainant’s supervisors and RMOs
terminated the complainant for notifying Army personnel of possible security breaches. OIG
investigators found that the RMOs terminated the complainant in retaliation for making protected
disclosures. The OIG investigative report that was issued to the Secretary of Health and Human
Services included recommendations to make the complainant whole and to provide whistleblower
training to employees of HHS contractors. A copy of the report was also provided to DOD. The
OIG investigative report also included recommendations to DOD to provide whistleblower
protection training to management officials and to consider whether DOD employees should be
disciplined for committing prohibited personnel actions under applicable laws and/or regulations.
(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 . . .
Although there have been instances in which HHS agencies have questioned OIG oversight
activities or have not provided all information in the precise content, format, and timeline as
requested, OIG has not identified any instances in which HHS interfered with the independence of
OIG during this reporting period. OIG would immediately take appropriate action in accordance
with the Inspector General Act if it were unable to resolve these issues within HHS.
(22) Detailed descriptions of the particular circumstances of each:
(A) inspection, evaluation, and audit conducted by the Office that is closed and was not
disclosed to the public . . .
The table that follows lists inspection, evaluation, and audit reports for this semiannual reporting
period that did not result in public reports.
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Nonpublic Reports by Category, October 1, 2022, Through March 31, 2023
Number of
Category/Description
Reports
IT security reviews (involve IT systems, e.g., penetration test audits) 0
Other 0
HHS technical assistance reports 0
Finance-related attestation reviews 0
Total 0
(B) Investigation conducted by the Office involving a senior Government employee that is closed and
was not 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 five
investigations closed during this reporting period involving senior Government employees for
whom allegations of misconduct were investigated and not substantiated.
When determining the level of detail to provide for the investigations defined 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 seven senior Government
employee(s) for misconduct, but OIG determined the allegations to be unsubstantiated.
Descriptions of the investigations follow.
OIG investigated two senior officials (SES) for alleged financial conflict of interest. It was alleged
that the senior officials pressured subordinate employees to sign contracts with a company for
which one of the senior official’s family members had a financial interest. OIG did not find any
evidence to support the allegations.
OIG investigated a senior official (GS-15) for alleged fraud and prohibited personnel actions. It was
alleged that the senior official retaliated against an employee for reporting fraud and
discrimination. The senior official allegedly harassed and terminated the employee after the
employee reported administrative fraud, abuse, and sabotage. OIG did not identify any evidence
to support the allegation.
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OIG investigated a complaint alleging that a senior official (SES) provided false educational
credentials for employment. OIG did not identify any evidence to support the allegation. The
senior official did in fact have the appropriate and required educational credentials.
OIG investigated a complaint alleging that a senior official (SES) violated Federal law and agency
policies. It was alleged that the senior official authorized subordinate employees to commit time
and attendance fraud. OIG did not identify any evidence to support the allegation.
OIG investigated two senior officials (GS-15 and SES) for allegedly steering patients to a specific
medical air transport company when patients could have been transported at a lesser cost via
ground ambulance. OIG did not find any evidence to support these allegations.
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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 Federal 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 industry stakeholders.
Having done so, OIG must then determine, in consultation with DOJ, whether it can develop effective
regulatory limitations and controls, not only to foster beneficial or innocuous arrangements, but also to
protect Federal health care programs and their beneficiaries from abusive practices.
Public Proposals for New and Modified Safe Harbors
Annual Solicitation
In December 2021, OIG published its annual solicitation in the Federal Register (Annual Solicitation). 1 In
response to the Annual Solicitation, OIG received the following proposals related to safe harbors:
Proposal OIG Response
Repeal or modify existing safe harbors (e.g., the OIG is not adopting commenters’ suggestions to
group purchasing organization [GPO] safe repeal or modify the GPO safe harbor, among
harbor, 42 CFR § 1001.952(f)) to address others, to address their comments and concerns
comments and concerns regarding the manner about the financial arrangements for which GPOs
in which GPOs and PBMs may be using such safe and PBMs may be using these safe harbors. We
harbors to protect purportedly abusive may consider this topic in future rulemaking or in
arrangements. future guidance. OIG highlights that there is a
statutory exception addressing GPOs at section
1128B(b)(3)(C) of the Social Security Act.
1 OIG, Solicitation of New Safe Harbors and Special Fraud Alerts, 86 FR 71611 (Dec. 17, 2021).
Accessed at
https://www.govinfo.gov/content/pkg/FR-2021-12-17/pdf/2021-27314.pdf on April 24, 2023.
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Modification of the Cooperative Hospital OIG is not adopting this suggestion. We may
Services Organization (CHSO) safe harbor, 42 consider this topic in future rulemaking.
CFR § 1001.952(q), to: (i) protect only CHSO
arrangements that involve the provision of items
or services that are components of the direct or
indirect overhead costs associated with the
inpatient or outpatient hospital services of the
nonprofit patron-hospitals; and (ii) exclude
protection for the creation of revenue-producing
joint venture arrangements for nonhospital,
postdischarge home care services and the
distribution of CHSO revenues to patrons based
on referrals.
A new safe harbor to protect: (i) value-based OIG is not adopting this suggestion. We
price-adjustment arrangements that are appreciate learning about ways in which
dependent on the achievement of a measurable pharmaceutical manufacturers, medical device
clinical or cost outcome associated with the manufacturers, and durable medical equipment,
value of a seller’s reimbursable items or services; prosthetics, orthotics, and supplies (DMEPOS)
and (ii) the provision of value-based services, entities believe that they could contribute to the
such as services that enable parties to measure coordination of care and the overall delivery of
outcome measures associated with value-based high-value care through, for example, value-
price-adjustment arrangements. based price-adjustment arrangements or value-
based services arrangements. However, we
continue to have concerns about the offer of
remuneration by these entities, which raises
many of the traditional fraud and abuse risks
under the Federal anti-kickback statute. We may
consider this topic in future rulemaking.
A new safe harbor to protect drug copayment OIG is not adopting this suggestion. The offer of
assistance in situations in which a less expensive cost-sharing assistance for a drug, particularly by
and equally effective alternative drug does not the manufacturer of such drug (either directly or
exist. indirectly), presents many of the traditional risks
of fraud and abuse that the Federal anti-kickback
statute is designed to prevent.
New safe harbors to protect: (i) value-based OIG is not adopting these suggestions. We
purchasing arrangements between continue to evaluate the ways in which
pharmaceutical manufacturers and payors or pharmaceutical manufacturers may be able to
PBMs; and (ii) the provision of data analytics by a contribute to the coordination of care and the
drug, biologic, or device manufacturer. overall delivery of high-value care through, for
example, value-based purchasing arrangements
or data-sharing arrangements. However, we
continue to have concerns about the offer of
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remuneration through these programs, which
raises many of the traditional fraud and abuse
risks under the Federal anti-kickback statute. We
may consider this topic in future rulemaking.
Modifications to the safe harbors for value-based As explained in the preamble to the final rule at
arrangements, including the safe harbors for 85 Fed. Reg. 77684 (Dec. 2, 2020) (referred to in
arrangements for patient engagement and this appendix as the “2020 final rule”),
support to improve quality, health outcomes, remuneration exchanged by pharmaceutical
and efficiency, 42 CFR § 1001.952(hh), to protect manufacturers and, in certain circumstances,
the exchange of remuneration by certain entities medical device manufacturers and DMEPOS
that currently cannot use the safe harbors (e.g., entities, are not eligible for protection under the
pharmaceutical manufacturers, medical device value-based safe harbors due to (among other
manufacturers, laboratory companies, and reasons) concerns that such entities could use
DMEPOS suppliers). the safe harbor to protect arrangements that are
intended to market their products or
inappropriately tether clinicians to the use of a
particular product. 2 Consequently, OIG declines
to adopt this suggestion.
New safe harbors to implement the Final Rule for OIG is not adopting this suggestion. Section
the Removal of Safe Harbor Protection for 11301 of the Inflation Reduction Act of 2022
Rebates Involving Prescription Pharmaceuticals extended the moratorium on the implementation
and Creation of New Safe Harbor Protection for of the Final Rule for the Removal of Safe Harbor
Certain Point-of-Sale Reductions in Price on Protection for Rebates Involving Prescription
Prescription Pharmaceuticals and Certain Pharmaceuticals and Creation of New Safe
Pharmacy Benefit Manager Service Fees. Harbor Protection for Certain Point-of-Sale
Reductions in Price on Prescription
Pharmaceuticals and Certain Pharmacy Benefit
Manager Service Fees until January 1, 2032.
New safe harbor for charitable assistance OIG is not adopting this suggestion. We may
programs to protect the provision of medical consider this topic in future rulemaking.
products and pharmaceutical products at no
charge to patients in financial need.
Modification to existing safe harbor at 42 CFR § OIG is not adopting this suggestion. A rebate is
1001.952(h) to define “rebate” to include any a type of discount, and a discount is a reduction
service fee paid as a percentage of sales. in price charged for an item or service. A
discount, including a rebate, does not include
2 OIG, Medicare and State Health Care Programs: Fraud and Abuse; Revisions to Safe Harbors Under the Anti-Kickback Statute, and
Civil Monetary Penalty Rules Regarding Beneficiary Inducements, 85 FR 77684, 77709 (Dec. 2, 2020). Accessed at
https://www.govinfo.gov/content/pkg/FR-2020-12-02/pdf/2020-26072.pdf on April 24, 2023.
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payment for a service. In a final rule issued in
1991, OIG stated that contracts for personal or
management services do not fit within the
statutory discount exception or the definition of
“discount” in the regulatory safe harbor. 3 We
decline to revise the definition of “rebate” to
include service fees paid as a percentage of
sales.
New safe harbor for manufacturer-sponsored OIG is not adopting this suggestion. We
patient engagement and product support continue to evaluate the ways in which
programs, including therapy management and pharmaceutical manufacturers may be able to
medication adherence support to encourage contribute to the delivery of quality care for
patients to manage and follow their treatment patients through programs such as medication
plans. adherence support, but we continue to have
concerns about the offer of remuneration to
patients through these programs, which raises
many of the traditional fraud and abuse risks
(e.g., patient steering). We may consider this
topic in future rulemaking.
New safe harbor to protect internal cost sharing OIG is not adopting the suggestion to create a
(or gainsharing) payments or modification to the new safe harbor or modify the personal services
personal services and management contracts and management contracts and outcomes-
and outcomes-based payment arrangements based payment arrangements safe harbor. We
safe harbor, 42 CFR § 1001.952(d), to expand the continue to believe, as stated in the preamble to
definition of "outcomes-based payment" to the 2020 final rule, that payments for
include internal cost sharing (or gainsharing) arrangements that reduce internal costs may
payments. pose risks to patient care, among other
concerns. 4 At this time, we continue to believe
that the risks outweigh any potential benefits of
these arrangements such that safe harbor
protection is not warranted.
New safe harbor for payments from hospitals to OIG is not adopting this suggestion. We believe
post-acute care providers to transition patients that existing regulations, including new and
to clinically appropriate, lower cost care settings. modified safe harbors that were finalized in the
2020 final rule, provide sufficient regulatory
flexibility for financial arrangements between
referral sources that balance the goals of care
3 42 CFR § 1001.952(h)(5)(vi); OIG, Medicare and State Health Care Programs: Fraud and Abuse; OIG Anti-Kickback Provisions, 56 FR
35952 (July 29, 1991). Accessed at https://oig.hhs.gov/documents/compliance/857/072991.htm on April 24, 2023.
4 85 FR 77845.
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coordination and delivery of value-based care
with the need to protect both patients and
Federal health care programs. We may consider
this topic in future rulemaking.
A new safe harbor for the waiver or offset of OIG has repeatedly expressed concerns
cost-sharing obligations for items and services regarding routine waivers of Medicare cost-
provided in connection with: (i) value-based sharing amounts that do not meet an exception
arrangements for care management or remote to the CMP provision prohibiting inducements to
patient monitoring, and (ii) the Acute Care beneficiaries at section 1128A(i)(6)(A) of the
Hospital at Home program and any follow-on Social Security Act. Accordingly, we decline to
model that may be established by CMS following adopt these suggestions.
the expiration of the Section 1135 Public Health
Emergency waiver.
A new safe harbor that would protect OIG is not adopting this suggestion. We may
remuneration between wholly owned consider this topic in future rulemaking.
subsidiaries and between a parent company and
a subsidiary.
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