Kusserow’s Corner: HHS OIG’s Spring Semiannual Report to Congress

Under federal law, the HHS Office of Inspector General (OIG) must report semiannually to the HHS Secretary and Congress on the activities of the office during the 6-month periods ending March 31 and September 30. These reports are intended to keep the Secretary and the Congress fully and currently informed of significant findings and recommendations by the OIG. Somewhat belatedly, the OIG released its 80-page summary report on May 27, 2014. The OIG reported more than $3.1 billion in expected recoveries. That number consists of $295 million in audit receivables and $2.83 billion in investigative receivables, including $813.7 million in receivables for the share of Medicaid restitution to the federal government. The annualized numbers indicate an overall drop from $6 billion in 2012 to $5 billion in 2013.

The OIG also reported 465 criminal actions against individuals and entities for crimes involving HHS programs, along with another 266 civil actions filed in federal court, assessed civil monetary penalties, and administrative recoveries arising from self-disclosures. In addition, 1,720 individuals and entities were excluded from participation in Federal health care programs. All of these metrics continue to increase over the years. Major cases are highlighted in the report.

The OIG reported on the Health Care Prevention and Enforcement Action Team (HEAT) that was started by the HHS and Department of Justice (DOJ) in 2009 to prevent fraud, waste, and abuse in the health care programs. As part of this effort, Medicare Strike Force Teams coordinate operations among federal, state, and local law enforcement agencies. During the six month period, results from the Strike Force efforts included charges being filed against 94 individuals or entities, 107 criminal actions, and $294.1 million in investigative receivables.

Investigative highlights noted in the report include prescription drug issues such as allegations of promoting the sale of unapproved drugs, illegal prescription trafficking, “pill mill” operations, tainted injections, and improper use of Herceptin in treatment of breast cancer. Another area featured in the report was the oversight of CMS contractors that administer over a half-trillion dollars in benefits annually. There were 11 reports on this subject, including contractor performance and quality assurance, CMS use of data for Part C contractor oversight, Part D sponsor reporting of fraud, electronic health records vulnerabilities and safeguards, and state Medicaid information systems vulnerabilities.

Other Medicare and Medicaid reviews noted include payments on behalf of unlawfully present, incarcerated, and deceased beneficiaries; Medicare inpatient payment policies and the DRG window; reviews of nursing homes for harm to patients and questionable hospitalizations; Medicaid residential rehabilitation services; Medicaid pediatric dental services; and Medicaid state excessive withdrawal of funds. There were 11 reports relating to improper Medicare payments and claims. Of these, seven reports summarized Medicare wasteful payments and practices. Medicaid had three reports related to information systems security and functionality, 11 reports on improper state claims for federal reimbursement, and three reports on Medicaid wasteful practices and oversight of managed care credentialing. In addition, the OIG audits financial reporting in HHS, as well as grants and contracts.

Not known to many is the fact that the OIG has oversight of the state Medicaid Fraud Units (MFCUs). In 2013, MFCUs had expenditures of $231.5 million, with grants from the federal government accounting for 75 percent of that amount, with the balance coming from the states. They employed 1,912 individuals (much larger number than the OIG itself). Collectively, in fiscal year 2013, MFCUs reported 15,590 investigations resulting in criminal charges against 1,588 individuals. Civil judgments and settlements amounted to $1.5 billion. Many MFCU investigations are done jointly with the OIG.

It should be noted that HHS has many other programs besides those of CMS. As such, OIG audit and evaluation activities reported on many other agencies of the Department. The Public Health Service programs include the Center for Disease Control and Prevention, Health Resources and Services Administration, Health Education Assistance Loan Program, and Indian Health Service, among others. Social programs include the Administration for Children and Families with the Head Start Program, Adoption Assistance, and Child Support Enforcement.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2014 Strategic Management Services, LLC. Published with permission.