Kusserow on Compliance: OIG November 2017 Work Plan update

This year, the OIG is updating its annual Work Plan during the year, rather than annually. The OIG’s Work Plan sets forth various audits and evaluations that are underway or planned during the fiscal year and beyond. The updates will include the addition of newly initiated Work Plan items; removal of completed items. In conducting its work, the OIG assesses relative risks in HHS programs and operations to identify those areas most in need of attention. In evaluating potential projects to undertake, the OIG considers a number of factors, including mandates set forth in laws, regulations, or other directives; requests by Congress, HHS management, or the Office of Management and Budget; top management and performance challenges facing HHS; work performed by other oversight organizations (e.g., GAO); management’s actions to implement OIG recommendations from previous reviews; and potential for positive impact. In addition to working on projects that often result in audits, reviews, and reports, the OIG also engages in a number of legal and investigative activities that are separately reported.

New projects

  1. Use of Funds by Medicaid Managed Care Organizations (MCOs). In 2015, Federal Medicaid managed care payments were approximately $161.8 billion, which was more than 40 percent of the $349.8 billion in total Federal expenditures for Medicaid. States continue to expand their use of managed care. To deliver services to Medicaid managed care enrollees, states contract with MCOs and make monthly capitation payments to those plans to provide enrollees with Medicaid-covered services. Appropriately set capitation rates help to ensure that adequate payments are made to provide services to beneficiaries. OIG auditors plan to examine how Medicaid funds received by MCOs are used to provide services to enrollees with results reported in 2019.


  1. Opioids in Medicaid: Concerns about Extreme Use and Questionable Prescribing in Selected States. The OIG Office of Evaluation and Inspection will focus on the problem of opioid abuse and overdose deaths that have reached crisis levels in the United States, with more than 33,000 Americans dying from it annually. These issues are of particular concern for Medicaid beneficiaries because they are more likely to have chronic conditions and comorbidities that require pain relief. Especially affected are beneficiaries who qualify through a disability. The OIG plans to identify beneficiaries who received extreme amounts of opioids through Medicaid and those cases that appear to involve doctor shopping or pharmacy shopping, as well as prescribers associated with these beneficiaries. This review will provide baseline data about beneficiaries receiving extreme amounts of opioids and prescribers with questionable patterns for opioids in Medicaid.


  1. Medicaid Services Delivered Using Telecommunication Systems. Medicaid pays for telemedicine, telehealth, and telemonitoring services delivered through a range of interactive video, audio or data transmission (telecommunications). Medicaid programs are seeing a significant increase in claims for these services and expect this trend to continue. OIG auditors will over the next year or two determine whether selected states’ Medicaid payments for services delivered using telecommunication systems were allowable in accord with Medicaid requirements.

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.

Connect with Richard Kusserow on Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

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

Highlight on Florida: State agency paid managed care $26M—for deceased beneficiaries

The Florida state Medicaid agency made an estimated $26 million in overpayments to managed care organizations (MCOs) for deceased Medicaid beneficiaries, according to the HHS Office of Inspector General (OIG). The Florida Agency for Health Care Administration made the payments during the July 1, 2009, through November 5, 2014, audit period due to a failure to timely update dates of death (DODs) in its information management system and a failure to collaborate with other agencies or use additional sources to identify inconsistencies in DODs. The state agency claims to have already recovered $24 million in overpayments and is making efforts to improve collaboration. The OIG emphasized the need for the state agency to remove all beneficiaries with DODs listed in its information management system from managed care plans and improve its system to remove variances from data sources  (OIG Report, A-04-15-06182, November 30, 2016).

Since 2011, the state agency has managed the Florida Statewide Medicaid Managed Care Program (SMMC), which is an expansion of a pilot created through a section 1115 waiver in 2006.  As of 2014, nearly all Medicaid beneficiaries in the state were enrolled in the SMMC. In return for the provision of specified services, the state pays MCOs monthly capitation payments for each enrolled beneficiary, regardless of whether the beneficiary receives services during the covered time period. The state agency maintains the capitation payment database through the Florida Medicaid Management Information System (FMMIS). It uses the FMMIS to ensure that payments are properly adjusted. DODs obtained through three different databases–the State Data Exchange (SDX), the state Department of Health, Bureau of Vital Statistics (BVS), and the Florida Online Recipient Integrated Data Access System (FLORIDA)–are updated in the FMMIS.


The OIG reviewed 124 capitation payments made during a more than five-year time period that were preceded by DODs and focused on 113 overpayments that were recoverable but had not yet been recovered. In 62 of these instances, the state agency did not timely update DODs in the FMMIS and beneficiaries’ enrollments were not updated. In 42 instances, DOD information derived from the three sources was incorrect or inconsistent.  Where data were inconsistent, the state agency removed the DODs from the FMMIS to ensure that beneficiaries would continue to receive services until the DODs were determined.  However, the state agency failed to collaborate with the DOD sources or the Department of Children and Families (DCF) to identify the source of the inconsistencies, and failed to use alternative sources, such as Accurint, the Massachusetts Registry of Vital Records and Statistics, or the Indiana State Department of Health, Vital Records.  In nine instances, DOD information was missing and the FMMIS did not identify the beneficiaries as deceased.


The OIG recommended that the state agency identify and recover more than $26 million in overpayments to MCOs and return the roughly $15 million federal share; perform monthly FMMIS reviews to ensure that deceased individuals are removed from the SMMC; implement policies and procedures for quickly identifying and correcting inaccurate death information; and improve collaboration with the Social Security Administration (SSA), DCF, and BVS to identify and resolve inconsistencies. The state agency indicated that it had recovered roughly $24 million in overpayments and identified slightly more than $200,000 in payments as correct. It also outlined steps it is taking to improve collaboration among agencies. However, it claimed that it could not identify instances in which individuals with DODs were not removed from plans, an argument the OIG combatted with the 62 instances described in its report.  The state agency also indicated that its Medicaid Fiscal Agent Operations (MFAO) bureau already implements an automated system hierarchy to resolve variances, but the OIG determined, based on its findings, that the system is inadequate.