Department of Health and Human Services 
OFFICE OF 
 
INSPECTOR GENERAL 
 
 
 
 
 
 
 
 
R I S
HODE  SLAND  TATE 
 
 
M F C
EDICAID  RAUD  ONTROL 
 
 
U :  2014 O R
NIT    NSITE  EVIEW 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
Suzanne Murrin  
Deputy Inspector General for 
Evaluation and Inspections 
 
September 2015 
OEI-02-14-00580   
   
EXECUTIVE SUMMARY:  RHODE ISLAND STATE MEDICAID FRAUD 
CONTROL UNIT:  2014 ONSITE REVIEW 
OEI-02-14-00580 
 
WHY WE DID THIS STUDY 
The Office of Inspector General (OIG) oversees the activities of all Medicaid Fraud 
Control Units (MFCUs or Units). As part of this oversight, OIG conducts periodic 
reviews of all Units and prepares public reports based on these reviews.  The reviews  
assess Unit performance in accordance with the 12 MFCU performance standards and 
monitor Unit compliance with Federal grant requirements. 
 
HOW WE DID THIS STUDY  
We conducted an onsite review in December 2014.  We based our review on an analysis 
from seven sources:  (1) a review of policies, procedures, and documentation related to 
the Units operations, staffing, and caseload for fiscal years (FYs) 2012 through 2014; 
(2) a review of financial documentation; (3) structured interviews with key stakeholders; 
(4) a survey of Unit staff; (5) structured interviews with the Units management; (6) an  
onsite review of a sample of case files; and (7) onsite observation of Unit operations.  
 
WHAT WE FOUND 
From FYs 2012 through 2014, the Rhode Island Unit reported 28 criminal convictions, 
14 civil judgments and settlements, and combined civil and criminal recoveries 
of $8 million.  During the same period, however, the overall number of referrals to the 
Unit decreased significantly. Additionally, our review of the Units performance 
according to OIG standards found that the Unit did not refer convictions to OIG for 
program exclusion in a timely manner and that it did not report adverse actions to the 
National Practitioner Data Bank (NPDB).  Also, the Units internal controls over grant 
expenditures did not include segregation of duties involving its purchase card.  However, 
we also found that almost all case files contained documentation of supervisory approval 
to open and close cases as well as of periodic supervisory review.  Finally, we noted that 
the Unit benefits from its relationship with the New England State Police Information 
Network, which provides support such as surveillance technology to the Unit. 
 
WHAT WE RECOMMEND   
We recommend that the Rhode Island Unit (1) work with the State Medicaid agency to 
increase referrals, (2) refer providers for exclusion to OIG within an appropriate 
timeframe, (3) report adverse actions to the NPDB, and (4) improve controls over 
purchase card duties and document purchase requests from Unit staff.  The Unit 
concurred with three of our recommendations and concurred in part with the fourth.   
 
 
 
   
   
TABLE OF CONTENTS 
Objective......................................................................................................1 

Background..................................................................................................1 

Methodology................................................................................................4 

Findings........................................................................................................5 

From FYs 2012 through 2014, the Unit reported 28 criminal 

convictions, 14 civil judgments and settlements, and combined 
 
civil and criminal recoveries of $8 million ......................................5 

The Unit did not refer convictions to OIG for program        
exclusion in a timely manner ...........................................................7 

The Unit did not report adverse actions to the National 

Practitioner Data Bank .....................................................................8 

The Units internal controls did not include segregation of 
purchase card duties.........................................................................9 

Almost all case files contained documentation of            

supervisory approval to open and close cases as well as of       

periodic supervisory review.............................................................9 

Other observation...........................................................................10
  
Conclusion and Recommendations ............................................................11
  
Unit Comments and Office of Inspector General Response ..........12 

Appendixes ................................................................................................13 

A: Detailed Methodology .............................................................13 

B: Investigations Opened and Closed by Provider Category        

From FY 2012 Through FY 2014 ..................................................16 

C: Medicaid Fraud Control Unit Referrals by Source               

From FY 2012 Through FY 2014 ..................................................18 

D: Point Estimates and 95-Percent Confidence Intervals .............19 

E: Unit Comments.........................................................................20 

Acknowledgments......................................................................................23 

 
   
OBJECTIVE 
To conduct an onsite review of the Rhode Island State Medicaid Fraud 
Control Unit (MFCU or Unit). 
BACKGROUND 
The mission of State MFCUs, as established by Federal statute, is to 
investigate and prosecute Medicaid provider fraud and patient abuse and 
neglect under State law.1  Pursuant to Title XIX of the SSA, each State 
must maintain a certified Unit unless the Secretary of Health and Human 
Services determines that operation of a Unit would not be cost effective 
because (1) minimal Medicaid fraud exists in that State, and (2) the State 
has other adequate safeguards to protect Medicaid beneficiaries from  
abuse and neglect.2  Currently, 49 States and the District of Columbia 
(States) have created such Units.3  In Federal fiscal year (FY) 2014, 
combined Federal and State grant expenditures for the Units totaled 
$235 million, and the Units employed 1,957 individuals.   
To carry out its duties and responsibilities in an effective and efficient 
manner, each Unit must employ an interdisciplinary staff that consists of 
at least an investigator, an auditor, and an attorney.4  Unit staff review 
complaints provided by the State Medicaid agency and other sources and 
determine the potential for criminal prosecution and/or civil action.  In 
FY 2014, the 50 Units obtained 1,318 convictions and 874 civil 
settlements or judgments.5  That year, the Units reported recoveries of 
more than $2 billion. 
The Unit must be in an office of the State Attorney Generals office, be in 
another State government office with statewide prosecutorial authority, or 
operate under a formal arrangement with the State Attorney Generals 
office.6  Units are required to have either statewide authority to prosecute 
cases or formal procedures to refer suspected criminal violations to an 
____________________________________________________________ 
   
1 Social Security Act (SSA)  1903(q)(3).  

2 SSA   1902(a)(61).  Regulations at 42 CFR   1007.11(b)(1) add that the Units 

responsibilities may include reviewing complaints of misappropriation of patients 

private funds in  residential health care facilities. 

3 North Dakota  and the territories of American Samoa, Guam, the Northern Mariana 

Islands, Puerto Rico, and the U.S. Virgin  Islands have not established Units. 

4 SSA  1903(q)(6) and 42 CFR  1007.13. 
 
5 Office of Inspector General (OIG), State Medicaid Fraud Control Units  Fiscal Year 

2014 Statistical  Chart, February 2015. 

6  SSA  1903(q)(1).  

Rhode Island State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-02-14-00580)                                    1 
 
     
   
office with such authority.7  In 44 States, including Rhode Island, the Units 
are located within offices of State Attorneys General; in the remaining 
6 States, the Units are located in other State agencies.8    
Each Unit must be a single identifiable entity of State government, distinct 
from the State Medicaid agency, and each Unit must develop a formal 
agreementi.e., a Memorandum of Understanding (MOU)that 
describes the Units relationship with that agency.9  
Oversight of the MFCU Program  
The Secretary of Health and Human Services delegated to the Office of 
Inspector General (OIG) the authority to both annually certify the Units 
and to administer grant awards to reimburse States for a percentage of 
their costs of operating certified Units.10  All Units are currently funded by 
the Federal Government on a 75-percent matching basis, with the States 
contributing the remaining 25 percent.11   To receive Federal 
reimbursement, each Unit must submit an initial application to OIG.12   
OIG reviews the application and notifies the Unit if the application is 
approved and the Unit is certified. Approval and certification are for a 
1-year period; the Unit must be recertified each year thereafter.13  
Pursuant to Title XIX of the SSA, States must operate Units that 
effectively carry out their statutory functions and meet program 
requirements.14  OIG developed and issued 12 performance standards to 
further define the criteria that it applies in assessing whether a Unit is 
effectively carrying out statutory functions and meeting program  
requirements.  Examples of standards include maintaining an adequate 
caseload through referrals from various sources, maintaining an annual 
____________________________________________________________ 
7 SSA  1903(q)(1). 

8 The Units share responsibility for protecting  the integrity of the Medicaid  program with  

the division of the State Medicaid agency that functions as the program integrity unit.  

Some States also employ a Medicaid Inspector General  who conducts and coordinates the 

State Medicaid agencys activities to combat fraud, waste, and abuse in this area. 

9 SSA  1903(q)(2) and  42 CFR   1007.9(d).  
 
10 The portion of funds reimbursed to States by the Federal  Government for its share of 
 
expenditures for the Federal  Medicaid program, including  the MFCUs, is  called Federal 
 
Financial Participation  (FFP). 

11 SSA   1903(a)(6)(B). 

12 42  CFR  1007.15(a). 
 
13 42  CFR  1007.15(b) and (c). 
 
14 SSA  1902(a)(61). 

Rhode Island State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-02-14-00580)                                    2  
   
   
training plan for all professional disciplines, and establishing policy and 
procedure manuals to reflect the Units operations. 15    
Rhode Island Unit  
The Rhode Island Unit is an autonomous entity within the Rhode Island 
Office of the Attorney General and has the authority to prosecute cases of 
Medicaid fraud and cases of patient abuse and neglect.  At the time of our 
review, the Units 11 employees were located in the State capital of 
Providence. In FY 2014, the Rhode Island Unit expended a total of 
$1,192,428 in combined Federal and State Funds.16  
The Unit receives referrals of provider fraud and patient abuse and neglect 
from a variety of sources, including State licensing boards, law 
enforcement, hotline calls, and the State Long Term Care Ombudsman. 17   
The majority of referralsboth for provider fraud and for patient abuse 
and neglectcome from departments and units located in the Rhode 
Island Office of Health and Human Services, which is the State Medicaid 
agency. These are: 
 	  the Program Integrity Unit (PIU);  
 	  the Surveillance and Utilization Review Unit; 
 	  the Department of Health; 
 	  the Department of Behavioral Healthcare, Developmental 

Disabilities, and Hospitals; 

 	  the Department of Children, Youth, and Families, and; 
 	  the Department of Human Services. 
When the Unit receives a referral from any source, the Director of 
Investigations decides whether to open it in consultation with an 
investigator and with the Unit Director.  In some cases, the Unit conducts 
a preliminary investigation and decides whether to open the case.  If the 
Unit decides to open a case, it gives the case a unique number and enters it 
into an electronic case management system.  The Unit Director then 
____________________________________________________________ 
15 77 Fed. Reg. 32645 (June 1, 2012).  Accessed at 
http://oig.hhs.gov/authorities/docs/2012/PerformanceStandardsFinal060112.pdf on  
January  30, 2015.  Previous performance standards, established in 1994, are found at  
59 Fed. Reg. 49080  (Sept.  26, 1994).  The performance standards referred to in this  report  
were published on June 1,  2012, and  were in  effect for the majority of  our review  period.   
16 Total Medicaid expenditures in Rhode Island  were $2.6  billion in FY 2014. OIG, State 
Medicaid Fraud Control Units Fiscal  Year 2014  Grant Expenditures and Statistics, 
February 2015.  Accessed at http://oig.hhs.gov/fraud/medicaid-fraud-control-units-mfcu/  
on February  26, 2015. 
17 In this  report, misappropriation of  patient  funds is included in the category of patient  
abuse and neglect. 
Rhode Island State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-02-14-00580)                                    3  
   
   
assigns open cases to a lead investigator and assigns supporting staff as 
needed. 
The Unit may approach a case in several ways.  The Unit may pursue a 
case through criminal prosecution or through civil action.  The Unit may 
close a case through a criminal or civil resolution, through a referral to 
another agency, or for other reasons.  The Unit may also participate in 
globali.e., multi-Statecivil cases, coordinated by the National 
Association of Medicaid Fraud Control Units (NAMFCU). 
Previous Review  
A 2007 OIG onsite review of the Rhode Island Unit found that Unit 
investigators did not regularly prepare interim investigative memoranda 
for inclusion in the official case file.  Additionally, OIG found that the 
Unit case files did not contain an index identifying the information 
contained within the file.  We address the Units current practices for 
managing case files in this report.   
METHODOLOGY 
We conducted an onsite review in December 2014.  We based our review 
on an analysis of data from seven sources:  (1) a review of policies, 
procedures, and documentation related to the Units operations, staffing, 
and caseload; (2) a review of financial documentation; (3) structured 
interviews with key stakeholders; (4) a survey of Unit staff; (5) structured 
interviews with the Unit Director and management; (6) an onsite review of 
case files; and (7) an onsite observation of Unit operations.  Appendix A 
provides a detailed methodology.   
Standards 
This study was conducted in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors General 
on Integrity and Efficiency. 
 
 
Rhode Island State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-02-14-00580)                                    4  
   
   
FINDINGS 
From FYs 2012 through 2014, the Unit reported 
28 criminal convictions, 14 civil judgments and 
settlements, and combined recoveries of $8 million 
The Rhode Island Unit reported 28 criminal convictions, 14 civil 
judgments and settlements, and combined civil and criminal recoveries of 
more than $8 million from FYs 2012 through 2014.  Recoveries from  
global civil casesi.e., multi-State cases coordinated by the NAMFCU 
accounted for 96 percent of total recoveries over this 3-year period.  
(See Table 1.)  
 
Table 1: Rhode Island MFCU Criminal and Civil Recoveries, FYs 2012 
Through 2014   
   
Type of 
FY 2012   FY 2013   FY 2014   Total  
Recovery  
Recoveries  
Criminal 
$0  $0  $7,162   $7,162  
Recoveries 
Non-Global 
Civil  $0  $122,457 $210,025   $332,482  
Recoveries 
Global Civil 
$3,261,105   $1,882,719  $2,756,944  $7,900,768  
Recoveries  
Total  
$3,261,105  $2,005,176  $2,974,130   $8,240,411  
Recoveries  
Source: OIG analysis of Unit data, 2015.  
 
Referrals to the Unit decreased  significantly during the review 
period 
During this same period, however, the overall number of referrals to the 
Unit decreased by 93 percent. Departments in the State Medicaid agency 
were responsible for the large decrease in referrals of patient abuse and 
neglect as well as in referrals of fraud.  Specifically, from FY 2012 
through 2014, patient abuse and neglect referrals from departments in the 
State Medicaid agency decreased from 1,072 to 60.  Similarly, fraud 
referrals from departments in the State Medicaid agency decreased from 
37 to 4 in the same period.  See Table 2 for total referrals to the Unit by 
type and source. See Appendix B for additional information on the Units 
cases and Appendix C for information on referrals to the Unit by source. 
Rhode Island State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-02-14-00580)                                    5  
   
   
Table 2: Total Referrals to the Rhode Island Unit, FYs 2012 Through 2014, 
by Type and Source  
Referral Type   Referral Source  
FY2012  FY2013   FY2014  
Referrals of Patient 
Departments in the State 
Abuse and Neglect  1,072  85  60 
Medicaid Agency 
All Other Sources  2  3  2 
Total Patient Abuse and 
1,074  88  62 
Neglect Referrals 
Referrals of Fraud 
Departments in the State 
37  21  4 
Medicaid Agency 
All Other Sources  8  3  16 
Total Fraud Referrals  45  24  20 
Total All Referrals  1,119   112  82 
 
Note that in FY 2011, the year before the period of our review, the Unit reported slightly higher 
numbers of referrals than it reported in FY 2012.  Specifically, the Unit reported 75 referrals of fraud 
and 1,385 referrals of patient abuse and neglect in FY  2011.  
 
Source: OIG analysis of Unit data, 2015.  
 
Several factors contributed to the decline in referrals of patient abuse and 
neglect from the State Medicaid agency.  Nationwide policy changes 
introduced by CMS in 2011 required the departments in the State 
Medicaid agency, including the Department of Health, to discontinue 
providing certain personally identifiable information to the Unit.18 The 
State Medicaid agency confirmed that it could no longer send as many 
referrals to the Unit for this reason. The Unit director further noted that 
the prior referrals allowed the Unit to look for patterns to better determine 
which ones could be developed into cases and that limiting the 
information hindered the Units efforts.    
Other factors affected the decline in fraud referrals.  Since the expansion 
of the PIU in 2013when it grew from 1 to 5 investigative staffthe 
Unit reported receiving fewer fraud referrals.  The Director of the PIU 
explained that it now investigates referrals first, and then sends what it 
____________________________________________________________ 
18 CMS, Policy Memorandum S&C-11-39, released September 16, 2011.  Accessed at 
http://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/  
SurveyCertificationGenInfo/Downloads/SCLetter11_39.pdf on  July 2, 2015.  The 
personally identifiable information  referred to in the policy memorandum is associated  
with  nursing  home complaints that are maintained in a CMS database.  Other MFCUs 
have expressed similar issues about receiving this information. 
Rhode Island State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-02-14-00580)                                    6  
   
   
considers to be viable cases to the Unit. 19  However, Unit management 
stated that it would be better if the PIU sent more referrals to the Unit, as it 
did in the past, so that the Unit could be more involved in deciding which 
ones to pursue. 
The Unit did not refer all convictions to OIG for 
program exclusion in a timely manner 
According to Performance Standard 8(f), when a convicted individual is  
sentenced, the Unit should send a referral letter to OIG within 30 days of  
sentencing for the purpose of program exclusion.20  OIG excludes from  
participation in Federal health care programs any person or entity 
convicted of a criminal offense related to the delivery of an item or service 
under the Medicaid program or to the neglect or abuse of patients in 
residential health care facilities.21   If a Unit fails to ensure that convicted 
providers are referred for exclusion, those providers may be able to continue 
to submit claims and receive payments from the Medicaid program.  
From FYs 2012 through 2014, the Unit reported the sentencing of 
33 individuals for health care fraud or for abuse, neglect, or financial 
exploitation of patients.  Of these individuals, only two were referred to 
OIG for exclusion within 30 days of sentencing.  Another 10 were referred 
within 31 to 50 days, and 6 were referred within 51 and 100 days.  Fifteen 
were referred more than 100 days after sentencing.  (See Figure 1.)  
In these cases, the Unit delayed sending referral letters to OIG until it 
received the judgment of conviction which, according to the Unit Director, 
could take several months.  Since the time of the review, however, the Unit  
changed this practice and now sends the conviction information to OIG 
within 30 days of sentencing; the Unit then provides the official judgments  
to OIG when they are issued.  
 
____________________________________________________________ 
19 Federal regulations at 45 CFR   455.23  require that the PIU conduct a preliminary 
investigation and refer all credible allegations  of fraud to the Unit. 

20 Until June  2012, performance standards allowed the Unit to submit convictions to  OIG 

within  30  days  or other reasonable time period.  Revised standards implemented in
  
June 2012  require the Unit to submit convictions  within 30 days of  sentencing. 

21  42  CFR  1001.1901.   
Rhode Island State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-02-14-00580)                                    7  
   
   
Figure 1: Number of Days the Unit Took to Refer Convictions to  
OIG for Exclusion 
 
G  16  15 
OI
 O  14 
T
D  12 
E
R 10 
R
E 10 
F
E
R
S  8 
E 6 
S
A 6 
C
 O 
R  4 
E 2 
B
M 2 
U
N
0 
Within 30 days  3150 days  51100 days  More than 100 days 
NUMBER OF  DAYS SINCE CONVICTION 
 
Source: OIG analysis of Unit data, 2015.  
The Unit did not report adverse actions to the National 
Practitioner Data Bank 
The National Practitioner Data Bank (NPDB) is used to restrict the ability 
of physicians, dentists, and other health care practitioners to move from  
State to State without disclosure or discovery of previous medical 
malpractice payment and history of adverse actions.22   
Pursuant to Federal regulations, Units must report to the NPDB any 
adverse actions generated as a result of investigations or prosecutions of 
healthcare providers.23  Examples of adverse actions include criminal 
convictions; civil judgments (but not civil settlements); exclusions; and 
other negative actions or findings, including any action or finding that 
under the States law is publicly available information, and rendered by a 
licensing or certification authority.24   
However, the Units registration was not current with the NPDB during 
the review period, and the Unit had not reported adverse actions to the 
NPDB since FY 2008.  Unit management acknowledged that the Unit was 
____________________________________________________________ 
22 National Practitioner Data Bank.  Accessed at  
http://www.npdb.hrsa.gov/topNavigation/aboutUs.jsp on 1/14/2015.  
23 Under requirements established in 2012, Units must report adverse actions to the 
NPDB within  30 calendar days from the date the final adverse action was 
taken.   45 CFR   61.5(a).  In addition, according to  2012 Performance Standard  8(g), the 
Unit should report qualifying cases to the NPDB.  
24  SSA  1128E(g)(1)  and 45  CFR  61.3 (2012).   
Rhode Island State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-02-14-00580)                                    8  
   
   
not reporting this correctly and stated that they believed that only licensing 
issues had to be referred to the NPDB.  The Unit subsequently referred the 
required convictions, which we confirmed with the NPDB.  
The Units internal controls did not include 
segregation of purchase card duties 
Performance Standard 11 (d) requires each Unit to apply generally 
accepted accounting principles in its control of Unit funding.25   
Segregation of duties reduces the risk of erroneous and inappropriate 
actions or recording of expenditures.  However, from FYs 2012 through 
2014, the Unit did not achieve segregation of duties related to its purchase 
card partly because there were only two fiscal staff and a fiscal director  
carrying out the accounting function.  Consequently, accounting staff were 
assigned to carry out incompatible duties such as ordering, receiving, and 
paying for purchases, as well as recording and reviewing the related 
accounting transactions. Additionally, the Unit Directors authorization 
for purchases was sometimes made verbally and not documented.   
Almost all case files contained documentation of 
supervisory approval to open and close cases as well 
as of periodic supervisory review 
According to Performance Standard 5(b), Unit supervisors should approve 
the opening and closing of cases to ensure a continuous case flow and the 
timely completion of cases.  Supervisory approval to open and close cases 
demonstrates that Unit supervisors are monitoring the intake of cases and  
the timeliness of case resolutions.26  According to our review, the Unit 
documented supervisory approval to open 95 percent of cases and 
documented supervisory approval to close 100 percent of cases.  
According to Performance Standard 6(c), supervisory reviews should be 
conducted periodically and noted in the case file to ensure timely case 
completion.  According to on our review, 94 percent of cases contained 
documentation indicating periodic supervisory review.  Appendix D 
____________________________________________________________ 
25 According to  generally accepted accounting principles, [K]ey duties and 
responsibilities need to be divided or segregated among different people to reduce the 
risk of error or fraud.  This should  include separating the responsibilities for authorizing  
transactions, processing and recording them, reviewing the transactions, and handling any 
related assets.   No one individual should control all  key aspects of a transaction or event. 
United States General Accounting Office, Standards for Internal Control in the Federal  
Government, November 1999.  Accessed at 
http://www.gao.gov/special.pubs/ai00021p.pdf on March 9, 2015. 
26 For the purposes of this report, supervisory approval to  open and close a case does not  
constitute a supervisory review.  Periodic supervisory review indicates that a supervisor  
reviewed a case at least once between the cases opening and closing. 
Rhode Island State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-02-14-00580)                                    9  
   
   
contains the point estimates and 95-percent confidence intervals for these 
statistics.  
Other Observation: 
During  our  onsite  review,  the Unit identified the New England State Police 
Information Network (NESPIN) as a useful investigative resource.  This 
network is one of six regional centers comprising the Regional 
Information Sharing Systems Program, which operates nationwide.  The 
U.S. Department of Justice provides funding, oversight, and program  
management, but each center is managed locally.  The program supports 
the investigation and prosecution efforts of its member agencies by 
offering information-sharing and communications capabilities, as well as 
analytical and investigative support services that are available to all 
MFCUs as well as other law enforcement agencies.  Unit management 
cited examples of NESPIN loaning the Unit pole cameras and other 
surveillance technology, as well as creating graphics that the Unit used as 
exhibits in court. 
 
   
Rhode Island State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-02-14-00580)                                    10  
   
   
CONCLUSION AND RECOMMENDATIONS 
From FYs 2012 through 2014, the Rhode Island Unit reported 28 criminal 
convictions, 14 civil judgments and settlements, and combined civil and 
criminal recoveries of $8 million.  During the same period, however, the 
overall number of referrals to the Unit decreased by 93 percent.  Such a 
decline in referrals may have a substantial impact on the Units ability to 
investigate and prosecute Medicaid fraud and patient abuse or neglect in 
the State.  Additionally, our review of the Units performance according to 
OIG standards found that the Unit did not refer convictions to OIG for 
program exclusion in a timely manner and did not report adverse actions 
to the NPDB. Also, the Units internal controls over grant expenditures 
did not include segregation of duties related to its  purchase card.  
However, we also found that almost all case files contained documentation 
of supervisory approval to open and close cases as well as of periodic 
supervisory review. Finally, we noted that the Unit benefits from its 
relationship with the New England State Police Information Network, 
which provides support such as surveillance technology to the Unit. 
We recommend that the Rhode Island Unit: 
Work with the State Medicaid agency to increase referrals  
The Unit should make increasing the number of referrals it receives a 
priority, and work with the State Medicaid agency to resolve 
information-sharing issues and to increase referrals.  
Refer providers for exclusion to OIG within an appropriate 
timeframe  
The Unit should ensure that letters referring individuals and entities for 
exclusion are sent within 30 days of sentencing.  The Unit should also 
work with the courts to ensure that the courts provide conviction 
information to the Unit in a timely manner. 
Report adverse actions to the NPDB 
The Unit should ensure that it reports to the NPDB all adverse actions 
generated as a result of investigations or prosecutions of healthcare 
providers, as specified in Federal regulations.  
Improve controls over purchase card duties and document 
purchase requests from Unit staff 
The Unit should work with Attorney Generals fiscal office to segregate 
the responsibilities for ordering, receiving, and paying for purchases as 
well as for recording and reviewing purchase card transactions, as staffing 
allows. Additionally the Unit should develop policies to ensure that all 
purchase requests are documented. 
Rhode Island State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-02-14-00580)                                    11  
   
   
UNIT COMMENTS AND OFFICE OF INSPECTOR GENERAL  
RESPONSE 
The Rhode Island Unit concurred with three of our recommendations and 
concurred in part with the fourth.  
The Unit concurred with our recommendation to work with the State 
Medicaid agency to increase referrals.  The Unit noted that it is considering  
undertaking data mining through the appropriate waiver and noted that it will 
try to obtain more referrals from meetings with the State PIU as well as 
managed care organizations in the State.   
The Unit concurred with our recommendation to refer providers for 
exclusion to OIG within an appropriate timeframe, adding that it now 
complies with the 30-day requirement. The Unit also concurred with our 
recommendation to report adverse actions to the NPDB.  It added that its 
registration has been updated, that all cases that should have been reported 
are now in the system, and that it will report all future cases immediately,  
as required.  
Finally, the Unit concurred in part with our recommendation to improve 
controls over purchase card duties and to document purchase requests from  
Unit staff.  The Unit reported implementing a policy  where all purchase 
requests made by the Director will be in writing.  However, the Unit 
indicated that because of the small size of the Unit, it will not be 
implementing controls to segregate responsibilities related to the purchase 
card. The Unit further noted that credit cards issued to the Attorney  
Generals Office are independently audited by the State Controllers Office, 
which ensures proper use of the card.  We encourage the Unit to 
in keeping with generally  accepting accounting principlessegregate the 
duties related to the purchase card, as staffing allows. 
The full text of the Units  comments is provided in Appendix E.  
 
   
Rhode Island State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-02-14-00580)                                    12  
   
   
APPENDIX A 
Detailed Methodology 
Data collected from the seven sources below was used to describe the 
caseload and assess the performance of the Unit.   
Data Collection 
Review of Unit Documentation. Prior to the onsite visit, we analyzed 
information from several sources regarding how the Unit investigated 
Medicaid cases and referred them  for prosecution.  Specifically, we 
collected and analyzed information about the number of referrals the Unit 
received, the number of investigations the Unit opened and closed, and the 
outcomes of those investigations.  We also collected and analyzed 
information about the number of cases that the Unit referred for 
prosecution and the outcomes of those prosecutions.  We gathered this 
information from several sources, including the Units Quarterly Statistical 
Reports, annual reports, recertification questionnaire, policy and 
procedures manuals, and the Memorandum of Understanding with the 
State Medicaid agency.  Additionally, we confirmed with the Unit Director  
that the information we had was current as of December 2014, and as 
necessary, we requested any additional data or clarification.   
Review of Financial Documentation. To evaluate internal control of fiscal 
resources, OIG auditors reviewed policies and procedures related to the 
Units budgeting, accounting systems, cash management, procurement, 
property, and staffing. We obtained the Units claimed grant expenditures 
for FYs 2012 through 2014 to (1) review final Federal Status Reports27  and 
supporting documentation, and (2) select and review transactions within 
direct cost categories to determine if costs were allowable.  Finally, we 
reviewed records in the HHS Payment Management System (PMS)28  and 
revenue accounts to identify any unreported program income.29 
 Interviews With Key Stakeholders. In October 2014, we conducted 
structured interviews with seven individual stakeholders who were 
familiar with Unit operations.  We interviewed key stakeholders in the 
State Medicaid agency, i.e., the the Rhode Island Office of Health and 
____________________________________________________________ 
27 The Unit transmits Federal Status Reports to OIGs Office of Management and Policy 
on a quarterly and annual basis.  These financial reports detail Unit income and  
expenditures.  
28 The PMS is a grant payment system operated and maintained  by the HHS Program  
Support Center, Division  of Payment Management.  The PMS provides  disbursement, 
grant monitoring, reporting, and case management services to awarding agencies and 
grant recipients, such as MFCUs. 
29 Program income is defined as gross income received by the grantee or subgrantee 
directly generated by a grant supported activity, or earned only as a result of the grant 
agreement during the grant period.  45 CFR   92.25(b). 
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Human Services.  Specifically, we interviewed officials in the Office of 
Health and Human Services; the PIU; the Fiscal Intermediary responsible 
for the Surveillance and Utilization Review Unit; the Department of  
Health; and the Department of Behavioral Healthcare, Developmental 
Disabilities and Hospitals. We also conducted structured interviews with 
the Rhode Island Long Term Care Ombudsman, the U.S. Attorneys 
Office, and other officials of the Office of the Rhode Island Attorney 
General. We focused these interviews on the Units relationship with OIG 
and other Federal and State authorities.  We used the information that we 
collected from these interviews to develop subsequent interview questions 
for Unit management.  Finally, we conducted a structured interview with 
the Director of the New England State Police Information Network.  We  
focused this interview on the Units relationship with the network. 
Survey of Unit Staff.  In November 2014, we conducted an online survey 
of all nonmanagerial Unit staff within each professional discipline 
(i.e.,  investigators, auditors, and attorneys) as well as support staff.  The 
response rate was 100 percent. Our questions focused on operations of the 
Unit, opportunities for improvement, and practices that contributed to the 
effectiveness and efficiency of Unit operations and/or performance.  The  
survey also sought information about the Units compliance with 
applicable laws and regulations. 
Onsite Interviews With Unit Management.   We conducted structured 
interviews with the Units management in December 2014.  We  
interviewed the Unit Director (who also served as the Units lead 
attorney), the Deputy Director, and the Director of Investigations.  We  
asked these individuals to provide additional information for us to better 
understand the Units operations and clarify information obtained from  
other data sources. Finally, we asked the Unit management to identify 
activities that are beneficial to the Units overall management, operations, 
and performance. 
Onsite Review of Case Files and Other Documentation. The Unit 
provided a list of 179 cases that were open at any point during 
FYs 2012 through 2014. We excluded from our analysis 40 of these cases 
that the Unit had categorized as global.  We then selected a simple 
random sample of 100 cases from the remaining 139 cases.  We reviewed 
all sampled case files for documentation of supervisory reviews for the 
opening and closing of cases (if applicable), as well as to see whether 
supervisors conducted periodic case file reviews. From these 100 case 
files, OIG Office of Investigations reviewed a simple random sample of 
50 files in more depth, looking at issues such as the timeliness of 
investigations and case development.  The review found no noteworthy 
concerns.  
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Onsite Review of Unit Operations.  During our December 2014 onsite 
visit, we reviewed the Units workspace and operations.  Specifically, we 
visited the Unit headquarters in the State capital.  While onsite, we 
observed the Units offices and meeting spaces, security of data and case 
files, location of select equipment, and the general functioning of the Unit. 
 
 
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APPENDIX B 
Investigations Opened and Closed by Provider Category from FYs 2012 
Through 2014 
Table B-1: Fraud Investigations  
Provider Category   FY 2012   FY 2013   FY 2014  
Facilities   Opened  Closed   Opened  Closed   Opened  Closed  
Hospitals  0  0  0  0  0  0 
Nursing Facilities   7  5  1  1  0  2 
Other Long-Term-Care Facilities   0  0  1  0  0  0 
Substance Abuse Treatment Centers  0  0  0  0  0  0 
Other  Facilities   3  3  1  1  0  1 
Subtotal   10  8  3  2  0  3 
Practitioners   Opened  Closed  Opened  Closed  Opened  Closed 
Doctors of Medicine or Osteopathy   12  10  2  1  4  5 
Dentists  3  3  0  2  2  2 
Podiatrists  0  0  0  0  0  0 
Optometrist/Opticians  1  0  0  0  0  0 
Counselors/Psychologists  0  0  0  0  0  0 
Chiropractors  0  0  0  0  0  0 
Other Practitioners  3  0  0  1  0  0 
Subtotal   19  13  2  4  6  7 
Medical Support  Opened  Closed   Opened  Closed   Opened  Closed  
Pharmacies  1  2  1  0  0  1 
Pharmaceutical Manufacturers  1  1  1  0  0  3 
Suppliers of Durable Medical  3  0  0  2  0  0 
Equipment 
Laboratories  0  0  0  0  0  0 
Transportation Services  1  1  0  0  1  0 
Home Health Care Agencies  0  0  0  1  0  2 
Home Health Care Aides  7  6  8  9  6  6 
Nurses/Physicians Assistants/Nurse 
4  1  2  3  2  6 
Practitioners/Certified Nurse Aides 
Radiologists  0  0  0  0  0  0 
Other Medical Support   0  0  2  3  0  0 
Subtotal   17  11  14  18  9  18 
continued on next page  
 
   
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Table B-1 (Continued):  Fraud Investigations  
Provider Category   FY 2012   FY 2013   FY 2014  
Program  Related   Opened  Closed  Opened  Closed  Opened  Closed 
Managed Care   0   0   0   0   0   0  
Facilities   Opened   Closed   Opened   Closed   Opened   Closed  
Medicaid Program Administration  0  0  0  0  0  0 
Billing Company  0  0  0  0  0  0 
Other Program Related  0  0  0  0  0  0 
Subtotal   0  0  0  0  0  0 
Total   46  32  19  24  15  28 
Source: OIG analysis of Unit data, 2015.  
Table B-2: Investigations of Patient Abuse and Neglect  
Provider Category   FY 2012   FY 2013   FY 2014  
  Opened   Closed  Opened   Closed  Opened   Closed 
Nursing Facilities   8  4  3  3  1  3 
Other Long-Term-Care Facilities   0  0  0  0  0  0 
Nurses/Physicians Assistants/Nurse  9  8  6  9  9  14 
Practitioners/Certified Nurse Aides 
Home Health Aides  2  0  3  4  6  3 
Other   0  1  2  2  5  4 
Total   19  13  14  18  21  24 
Source: OIG analysis of Unit data, 2015.  
Table B-3: Investigations of Misappropriation of Patient Funds  
Provider Category   FY 2012   FY 2013   FY 2014  
Non-direct Care   0  0  0  0  0  0 
Nurses/Physicians Assistants/Nurse  0  0  1  0  0  1 
Practitioners/Certified Nurse Aides 
Home Health Aides  0  0  0  0  0  0 
Other   0  0  5  3  0  0 
Total   0  0  6  3  0  1 
Source: OIG analysis of Unit data, 2015.  
 
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APPENDIX C 
Medicaid Fraud Control Unit Referrals by Referral Source from FYs 2012 
Through 2014 
 
  FY 2012   FY 2013   FY 2014  
Abuse &   Patient  Abuse &   Patient  Abuse &   Patient 
Referral Source   Fraud   Fraud   Fraud  
Neglect   Funds   Neglect   Fund  Neglect   Funds  
State Medicaid Agency  Program  
Integrity  Unit and Surveillance and  17  0  0  17  0  0  3  0  0 
Utilization Review  Unit 
State Medicaid Agency  
20  895  0  4  4  1  1  16  0 
Department of Health 
State Medicaid Agency - 
Department of Behavioral 
0  177  0  0  72  7  0  38  6 
Healthcare, Developmental 
Disabilities and Hospitals  
State Medicaid Agency  Other   0  0  0  0  0  1  0  0  0 
Managed Care Organizations   0  0  0  0  0  0  0  0  0 
Licensing Board  0  0  0  0  0  1  0  0  0 
Law Enforcement  0  0  0  2  1  0  1  0  0 
HHS OIG  0  0  0  0  0  0  11  1  0 
Prosecutor 0  0  0  0  0  0  0  0  0 
Provider  0  1  0  0  0  0  2  0  0 
Provider Association  0  0  0  0  0  0  1  1  0 
Private Health Insurer   0  1  0  0  0  0  0  0  0 
Ombudsman 0  0  0  0  0  0  1  0  0 
Adult Protective Services  0  0  0  0  0  0  0  0  0 
Private Citizen  0  0  0  0  0  0  0  0  0 
MFCU Hotline  8  0  0  0  0  0  0  0  0 
Self-Generated Referrals  0  0  0  1  1  0  0  0  0 
Other   0  0  0  0  0  0  0  0  0 
Total  45  1074   0  24  78  10  20  56  6 
Source: OIG analysis of Unit data, 2015.  
 
 
 
 
 
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APPENDIX D 
Point Estimates and 95-Percent Confidence Intervals  
We calculated confidence intervals for key data points for our reviews of case files.  The 
sample sizes, point estimates, and 95-percent confidence intervals are as follows:  
Table D-1: Confidence Intervals for Case File Review  Data  
95-Percent 
Data Element Description   Sample Size  Point Estimate 
Confidence Interval  
Case files with documented 
supervisory approval to open   100  95.0%   91.4% to 96.4%  
a case 
Case files with documented 
supervisory approval to close  89*  100.0%   97.6% to 100%  
a case 
Case files with documented 
70**  94.3%  88.7% to 95.9%  
periodic supervisory  reviews  
Source: OIG analysis of Unit data, 2015.  
 
* We excluded 11 cases that were open at the time of our review.
  
** We excluded 22 cases that were not open at least 90 days and 4 cases for which the closing date could not be 

precisely determined.  We also excluded an additional 4 cases that were opened and then referred to another agency  for 

investigation or prosecution. 

   
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APPENDIX E 
Unit Comments 
 
   
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  This error ofnot reporting all adverse actions to the NPDBwas the result ofa misunderstanding 
ofwhich types of cases needed to be repmied. This error was, in tact, detected prior to the Onsite 
Team's arrival. The error was also conected immediately before the Team's an:ival and has been 
resolved. The Unit's registration with the NPDB has now been updated and all cases that should 
have been reported are now in the system and all future case will be reported immediately, as 
required. 
Finding and Recommendation 
The Unit's internal controls did not include segregation of purchase card duties 
We do not concur in part and we concur in part. 
Due to the small size of this office, the Business Office Director is the only person in control of 
the purchase card and is solely responsible for its use. An independent audit is done BY THE 
State Controller's Office mi all credit cards issued to every state agency, including the Attorney 
General's Office. This insures proper usage ofthe card and its purchases and payments as well as 
items received. Given that fact, while segregation ofduties is not implemented, the independent 
state audit insures the proper usage of the card. This goes for all office purchases; not just MFCU 
expenditures. 
While the MFCU Director had, on occasion, verbally authorized purchases, we have now 

implemented a policy where all purchase requests made to the Business Office Director by the 

MFCU Director are in writing. 

Finding and Recommendation 
Almost all case files contained documentation indicating supervisory approval to opeu and 

close cases as well as periodic supervisoty review 

We concur. 

While the OnsiteTeam found that 94 percent of the cases included the proper documentation, we 

strive to have a rate of one hundred percent. 

The Rhode Island Medicaid Fraud Control Unit extends its gratitude for the continued guidance 

ofthe OIG-OEI and in particular the Onsite Review Team for its professionalism. It is our desire 

to achieve the highest standards possible in the execution of our duties. 

Very truly yours, 

James F. Dube 

Assistant Attorney General 

Director, Rhode Island Medicaid Fraud Control Unit 

Rhode Island State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-02-14-00580)  22   
   
ACKNOWLEDGMENTS 
This report was prepared under the direction of Jodi Nudelman, Regional 
Inspector General for Evaluation and Inspections in the New  York regional 
office, and Nancy Harrison and Meridith Seife, Deputy Regional 
Inspectors General.  
Vincent Greiber served as the team leaders for this study.  Other Office of 
Evaluation and Inspections staff who conducted the study include 
Jennifer Karr in the New York regional office and Jordan Clementi in the 
Kansas City regional office.  Central office staff who provided support 
include Kevin Farber, and Christine Moritz.  Office of Audit Services staff 
who provided support include Beverly Farley.  Office of Investigations 
staff also participated in the review.   
 
 
Rhode Island State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-02-14-00580)                                    23  
   
Office of Inspector General
http://oig.hhs.gov  
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as  
amended, is  to protect the integrity of the Department of  Health and Human Services  
(HHS)  programs, as well as the health and welfare of beneficiaries  served by those 
programs.  This statutory mission  is  carried  out through  a nationwide network  of  audits, 
investigations, and inspections conducted by the  following operating components: 
Office of Audit Services 
The 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.  Audits  
examine the performance of HHS programs and/or its grantees and contractors in carrying  
out their respective responsibilities and are intended  to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, abuse, and  
mismanagement and promote economy and efficiency  throughout  HHS. 
Office of Evaluation and Inspections 
The Office  of  Evaluation and Inspections (OEI)  conducts national evaluations to  provide 
HHS, Congress, and the public with timely, useful, and reliable information on significant 
issues.  These evaluations focus on preventing fraud,  waste, or abuse  and promoting  
economy, efficiency, and effectiveness of departmental programs.  To promote impact, OEI 
reports also present practical recommendations for improving program operations.  
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations  
of  fraud and misconduct  related to HHS programs, operations, and beneficiaries.  With 
investigators working in all 50 States and the District of Columbia, OI  utilizes its resources 
by actively  coordinating with the Department  of Justice  and other Federal, State, and local 
law enforcement authorities.  The investigative efforts of OI often lead to  criminal 
convictions, administrative sanctions,  and/or  civil monetary  penalties.  
Office of Counsel to the Inspector General 
The Office of Counsel to the  Inspector  General (OCIG) provides general legal services to 
OIG, rendering  advice and opinions on HHS programs  and operations and providing all 
legal support for OIGs  internal operations.  OCIG represents  OIG in all civil and 
administrative fraud and abuse cases involving HHS programs,  including False Claims Act, 
program exclusion, and civil monetary penalty cases.  In  connection with these cases, OCIG 
also negotiates and monitors corporate integrity agreements.  OCIG renders advisory 
opinions, issues compliance program  guidance, publishes fraud alerts, and provides other  
guidance  to  the health care industry concerning the anti-kickback statute and other  OIG  
enforcement authorities.