Kusserow on Compliance: HHS OIG reports on identified improper payments

In its Semi-Annual Report for 2017, the OIG announced that improper payments reported in the HHS financial statements have demonstrated a steady increase over the last several years. In FY 2016, HHS reported estimated improper payments of more than $96 billion. During the first half of 2017, the OIG issued a number audits that identified improper payments for a variety of reasons.

Eligibility Determinations

  1. Express Lane Eligibility. Under the express lane eligibility option, which allows States to expedite and simplify enrollment in Medicaid and the Children’s Health Insurance Program (CHIP) by relying on findings from other agencies’ eligibility determinations, the OIG estimated that improper Medicaid payments on behalf of potentially ineligible beneficiaries totaled $284.1 million. CHIP payments for potentially ineligible beneficiaries totaled $10.6
  2. Payments after death. Medicare and Medicaid continued to make improper payments on behalf of beneficiaries who are deceased. During this reporting period, the OIG found that Florida did not always stop making capitation payments to Medicaid managed care organizations (MCOs) after a beneficiary’s death, resulting in more than $26 million in
  3. Incarcerated beneficiaries. The OIG continued its work reviewing inappropriate payments for incarcerated beneficiaries, recently reporting that CMS has not taken steps to recoup $34 million in potentially improper payments made on behalf of incarcerated

Improper Payments for Medical Devices and Services

  1. Chiropractic Services. Based on the OIG’s sample results, the agency estimated that $358.8 million (82 percent) of $438.1 million paid by Medicare for chiropractic services was
  2. Room and Board Costs Associated with HCBS Waiver Program Payments. State Agencies claimed at least $176 million in unallowable Medicaid reimbursements for services under the HCBS waiver
  3. Cochlear Devices. Medicare spent $2.7 million inappropriately for cochlear devices (hearing aid devices) that were replaced without cost to the hospital or

The OIG also reported that it has a body of work looking at situations where providers billed for goods and services at higher rates than allowed by program regulations. In this reporting period, the OIG looked at how a hospital’s reporting of inaccurate wage data affected Medicare payments for hospital services.


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 © 2017 Strategic Management Services, LLC. Published with permission.