Department of Health and Human Services 
OFFICE OF 
 
INSPECTOR GENERAL 
 
 
 
 
 
 
 
 
N   M S M
EW  EXICO  TATE  EDICAID 
 
F C U :  
  RAUD  ONTROL  NIT  
 
2014 O R  
  NSITE  EVIEW 
Suzanne Murrin  
Deputy Inspector General for 
Evaluation and Inspections 
 
February 2015 
OEI-09-14-00240 
 
   
   
NEW MEXICO STATE MEDICAID FRAUD CONTROL UNIT:  
2014 ONSITE REVIEW 
OEI-09-14-00240 
 
WHY WE DID THIS STUDY 
 
The Office of Inspector General (OIG) oversees all State 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 April 2014.  We analyzed data from seven sources:  
(1) a review of documentation, policies, and procedures 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 Units 
management and selected staff; (6) an onsite review of a sample of case files from  
FYs 2011 through 2013; and (7) an onsite observation of Unit operations. 
 
WHAT WE FOUND 
 
From fiscal years 2011 through 2013, the Unit reported recoveries of $9 million,  
25 convictions, and 71 civil judgments and settlements.  A Unit supervisor approved the 
opening and closing of almost all case files; however, 42 percent of case files lacked 
documentation of periodic supervisory reviews. In addition, 32 percent of case files had 
unexplained investigation delays of a year or more.  The Unit also did not refer 
28 percent of sentenced individuals to OIG for program exclusion within an appropriate 
timeframe, and it did not report 56 percent of adverse actions to the National Practitioner 
Data Bank (NPDB) within an appropriate timeframe.  The Units MOU with the 
New Mexico Human Services Department had not been updated, and the Units policies 
and procedures manual was incomplete.  Finally, the Unit incorrectly reported its 
program income and inappropriately claimed expenditures for indirect costs. 
  
WHAT WE RECOMMEND 
 
We recommend that the New Mexico Unit (1) ensure that periodic supervisory reviews 
are documented in Unit case files, (2) ensure that any investigation delays are limited to 
situations imposed by resource constraints or other exigencies, (3) ensure that it reports 
all relevant information to OIG and the NPDB within an appropriate timeframe, and 
(4) revise its policies and procedures manual to reflect current operations.  The Unit 
concurred with all four of our recommendations. 
 
 
 
 
   
   
TABLE OF CONTENTS 
Objective......................................................................................................1 

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

Methodology................................................................................................5 

Findings........................................................................................................6 

From FY 2011 through FY 2013, the Unit reported recoveries  

of $9 million, 25 convictions, and 71 civil judgments and 

settlements........................................................................................6 

A Unit supervisor approved the opening and closing of almost
   
all case files; however, 42 percent of case files lacked  

documentation of periodic supervisory reviews ..............................8 

Thirty-two percent of Unit case files had unexplained  
investigation delays of a year or more .............................................8 

The Unit did not always refer sentenced individuals to OIG or 

adverse actions to the National Practitioner Data Bank within 
       
an appropriate timeframe  .................................................................9 

The Units MOU with HSD did not reflect current law and 

practice, and the Units policies and procedures manual was 

incomplete ......................................................................................10 

The Unit incorrectly reported program income and   
inappropriately claimed expenditures for indirect costs ................11 
 
Other observation: managed care referrals and program 
     
integrity recommendations.............................................................12 

Conclusion and Recommendations ............................................................14 

Unit Comments and Office of Inspector General Response ..........15 

Appendixes ................................................................................................16 

A: Referrals of Provider Fraud and Patient Abuse and          

Neglect to the New Mexico MFCU by Source, FYs 2011    

Through 2013.................................................................................16 

B: Investigations Opened and Closed by the New Mexico 

MFCU, by Provider Category and Case Type,  

FYs 2011 Through 2013 ................................................................17 

C: Methodology ............................................................................19 

D: Case File Review Population, Sample Size Counts, and 

Confidence Interval Estimates .......................................................22 

E: Unit Comments.........................................................................24 

Acknowledgments......................................................................................26 

 
   
 
OBJECTIVE 
To conduct an onsite review of the New Mexico 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 fiscal year (FY) 2013, combined 
Federal and State grant expenditures for the Units totaled $230 million.4, 5   
That year, the 50 Units employed 1,912 individuals.6  
To carry out its duties in an effective and efficient manner, each MFCU 
must employ an interdisciplinary staff that consists of at least an 
investigator, an auditor, and an attorney.7  The staff reviews complaints 
referred by the State Medicaid agency and other sources and determines 
their potential for criminal prosecution and/or civil action.   
 
 
 
 
____________________________________________________________ 
1 Social Security Act (SSA)    1903(q).  Regulations at 42 CFR 1007.11(b)(1) add that the 
MFCUs responsibilities may include reviewing complaints of misappropriation of 
patients private funds in  residential health care facilities.   
2  SSA  1902(a)(61).    
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  MFCUs.  Medicaid 
Fraud Control Units, Office of Inspector General (OIG) Web site.  Accessed at 
http://oig.hhs.gov/fraud/medicaid-fraud-control-units-mfcu/index.asp  
on February  11, 2014. 
4 All FY references in this report are based on the Federal FY (October 1  through 
 
September 30). 
 
5 OIG,  MFCU  Statistical Data  for Fiscal Year 2013. Accessed at 

http://oig.hhs.gov/fraud/medicaid-fraud-control-units-mfcu/ on  March 10, 2014. 
 
6 Ibid. 

7 SSA  1903(q)(6) and 42 CFR  1007.13. 
 
 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-09-14-00240)   1  
   
   
In FY 2013, the 50 Units reported a collective 1,341 convictions and 
879 civil judgments and settlements. That year, the Units reported 
recoveries of approximately $2.5 billion.8  
MFCUs are required to have either Statewide authority to prosecute cases 
or formal procedures to refer suspected criminal violations to an office 
with such authority.9 In New Mexico and 43 other States, the Units are 
located within offices of State Attorneys General that have this authority.  
In the remaining six States, the Units are located within other State 
agencies; generally, such Units must refer cases to offices with 
prosecutorial authority.10, 11   Additionally, 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.12   
Oversight of the MFCU Program 
The Secretary of Health and Human Services delegated to OIG the authority 
both to annually certify the Units and to administer grant awards to 
reimburse States for a percentage of their costs of operating them.13 All 
Units are currently funded by the Federal Government on a 75-percent 
matching basis, with the States contributing the remaining 25 percent.14   To  
receive Federal reimbursement, each Unit must submit an initial application 
to OIG.15   
 ____________________________________________________________ 
8 OIG,  MFCU  Statistical Data  for Fiscal Year 2013. Accessed at 
http://oig.hhs.gov/fraud/medicaid-fraud-control-units-
mfcu/expenditures_statistics/fy2013-statistical-chart.htm on March 10, 2014.   Pursuant to  
42 CFR   1007.17, Units report the total amount  of recovered  funds in their annual 
reports to  OIG.  Recoveries  are defined as the amount  of  money that defendants are 
required to pay as a result of a judgment or settlement in criminal and  civil cases, and  
may not reflect actual collections.  Recoveries may involve cases that include  
participation by other Federal and State agencies. 
9  SSA  1903(q)(1).  
10  Medicaid Fraud Control Units, OIG  Web site.  Accessed at  http://oig.hhs.gov/fraud/  

medicaid-fraud-control-units-mfcu/index.asp on March  18, 2014. 

11 In States with  a Unit, the Unit shares responsibility for protecting the integrity of the 

Medicaid program with the section of the State Medicaid agency that functions as the 
 
Program Integrity Unit.  Some States also employ a Medicaid Inspector General who 

conducts and coordinates activities against fraud, waste, and abuse for the State agency. 

12 SSA    1903(q)(2) and  42 CFR   1007.5 and  1007.9(d). 

13 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  referred to as 

Federal Financial Participation  (FFP). 

14  SSA  1903(a)(6)(B). 
  
15 42 CFR   1007.15(a). 

 
 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-09-14-00240)   2 
   
   
OIG reviews the application and notifies the Unit whether it is approved and 
the Unit is certified.  Approval and certification are valid for a 1-year period; 
the Unit must be recertified each year thereafter.16    
Pursuant to Title XIX of the SSA, States must operate Units that effectively 
carry out their statutory functions and meet program requirements.17   OIG 
developed and issued 12 performance standards to define the criteria that 
OIG applies in assessing whether a Unit is effectively carrying out statutory 
functions and meeting program requirements.18  Examples of standards 
include maintaining an adequate caseload through referrals from several 
sources, maintaining an annual training plan for all three of the professional 
disciplines (i.e., for auditors, investigators, and attorneys), and establishing  
policy and procedures manuals to reflect the Units operations.19  
New Mexico MFCU  
Located in Albuquerque, the Unit20 is an autonomous entity within the 
New Mexico Office of the Attorney General and has the authority to 
prosecute cases of Medicaid fraud and cases of patient abuse and neglect.21   
The Unit director serves as the chief attorney and directly supervises all 
Unit attorneys, the chief investigator, and Unit support staff.  The chief 
investigator directly supervises all Unit investigative staff, including 
special agents, nurse investigators, information systems specialists, and 
auditors. 
The Unit receives provider fraud referrals primarily from the New Mexico 
State Medicaid agencythe New Mexico Human Services Department 
(HSD). The Unit also receives provider fraud referrals from private 
citizens, local law enforcement, and the New Mexico Department of 
Aging and Long-Term Services Adult Protective Services Division.  The 
Unit receives patient abuse and neglect referrals primarily from Adult 
____________________________________________________________ 
16 42 CFR   1007.15(b) and  (c). 

17  SSA  1902(a)(61). 
 
18 59 Fed. Reg. 49080 (Sept. 26, 1994).  Accessed at http://oig.hhs.gov/fraud/medicaid-
fraud-control-units-mfcu/files/Performance%20Standards.pdf on February 11, 2014.   

19 The performance standards referred to in this report were published in  1994 and were 
 
in  effect during  FYs 2011  and 2012, which constitute most  of our review period. In 

2012, OIG published a  revision of  the performance standards (77 Fed.  Reg. 32645, 

June 1, 2012). Our onsite data collection took place in  April 2014.  When  referring to the 

performance standards, we refer to  the 1994 standards, unless otherwise noted.   The full
  
text of the 1994 standards is available online at http://oig.hhs.gov/fraud/medicaid-fraud-
control-units-mfcu/files/Performance%20Standards.pdf. The full text  of the 

2012 standards is available online at http://oig.hhs.gov/authorities/docs/2012/  

PerformanceStandardsFinal060112.pdf. 

20 In New Mexico, the Unit is called the Medicaid Fraud and Elder Abuse Division. 
 
21 For the purposes of this report, misappropriation of patients  private funds in
  
residential health care facilities is included  in the category of patient abuse and neglect. 
 
 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-09-14-00240)   3 
   
   
Protective Services and private citizens.  For additional information on 
Unit referrals, see Appendix A. 
Upon receiving a complaint of fraud, abuse, or neglect, support staff enter 
the complaint into the Units electronic case tracking system as an 
intake.  The Unit director and chief investigator review the intakes and 
present them at biweekly intake meetings, where all Unit staff discuss 
whether to accept each intake for investigation.  After an intake is 
accepted for investigation, Unit support staff open it as a referral in the 
Units electronic case tracking system and a Unit investigator and attorney 
are assigned to the case.  After an initial investigation period of no more 
than 6 months, the Unit decides whether to open the referral as a case.  
The Unit may open a case and pursue it through criminal investigation and 
prosecution, civil action, or a combination of the two.  The Unit may close 
a case for various reasons, including resolving it through criminal and/or 
civil action or referring it to another agency.  For additional information 
on the Units opened and closed investigations, including a breakdown by 
case type and provider category, see Appendix B. 
Previous Review  
The previous onsite review by OIG of the New Mexico Unit was 
conducted in 2007. That review, conducted while the Unit was under the 
supervision of a previous director, identified serious financial deficiencies 
resulting from the Units failure to implement adequate financial 
management systems, reconcile financial status reports, and exercise 
proper fiscal control. As a result of that review, the Unit was given high 
risk  status by OIG and instructed to comply with seven special 
conditions.22 In 2008, OIG conducted a followup onsite review of the Unit 
and determined that the Unit complied fully with all seven special  
conditions. OIG removed the Units high-risk status in 2010. 
 
 
 
____________________________________________________________ 
22A MFCU  or other grantee may be considered  high risk for a variety of reasons.   
OIGs designation of the New Mexico Unit as high risk  was based on the  Units  
inadequate financial management system, failure to conform to  previous terms and/or 
conditions of  grant awards, and  general lack of management responsibility.  See 45 CFR 
 92.12(a)(3),(4), and  (5).  Regulations authorize the imposition  of  special conditions or  
restrictions on  high-risk grantees.  45 CFR  92.12(b). 
 
 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-09-14-00240)   4 
   
   
METHODOLOGY 
We conducted the onsite review in April 2014.  We based our review on 
an analysis of data from seven sources:  (1) a review of Unit 
documentation, policies, and procedures related to the Units operations, 
staffing, and caseload for FYs 2011 through 2013; (2) a review of 
financial documentation for FYs 2011 through 2013; (3) structured 
interviews with key stakeholders; (4) a survey of Unit staff; (5) structured 
interviews with the Units management and selected staff; (6) an onsite 
review of a sample of case files that were open at any point during 
FYs 2011 through 2013; and (7) an onsite observation of Unit operations.  
Appendix C contains a detailed methodology.  Appendix D contains the 
point estimates and 95-percent confidence intervals for the statistics in this 
report. 
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.23 
 ____________________________________________________________ 
23 The full text  of these standards is available online at http://www.ignet.gov/pande/  
standards/oeistds11.pdf. 
 
 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-09-14-00240)   5 
   
   
FINDINGS 
From FY 2011 through FY 2013, the Unit reported 
recoveries of $9 million, 25 convictions, and 71 civil 
judgments and settlements 
From FY 2011 through FY 2013, the Unit reported total criminal and civil 
recoveries of $9 millionan annual combined average of $3 million (see 
Table 1). Of the $9 million in total recoveries, the Unit attributed 
$417,227 to criminal recoveries.  The Units criminal recoveries were 
significantly higher in FYs 2011 and 2012 than in FY 2013.  The MFCU 
reported that this difference was because of cases resolved in FY 2011 and 
FY 2012 that had large recovery amounts.  Global  cases accounted for 
90 of the Units 287 cases over the 3-year period, and judgments and 
settlements from global cases accounted for $6.4 million of the total civil 
recoveries.24 The Units annual average expenditures (State and Federal 
share) for FYs 2011 through 2013 were $1.6 million.25      
Table 1: Funds Reported Recovered by the New  Mexico MFCU,  
FYs 2011 Through 2013*  
3-Year  Annual  
  FY 2011   FY 2012   FY 2013  
Total   Average 
Criminal 
$155,315   $230,488   $31,424   $417,227   $139,076  
Recoveries 
Global Civil 
$2,069,697  $3,124,658   $1,236,360   $6,430,715   $2,143,572  
Recoveries 
Nonglobal Civil 
$1,126,899   $226,512   $747,102   $2,100,513   $700,171  
Recoveries 
Total Civil 
$3,196,596  $3,351,170   $1,983,462   $8,531,228   $2,843,743  
Recoveries 
Total Civil and 
Criminal  $3,351,911   $3,581,658   $2,014,886  $8,948,455   $2,982,818  
Recoveries  
Total Expenditures  $1,238,255   $1,617,020   $1,827,905   $4,683,180   $1,561,060  
Source:  OIG review of MFCU self-reported quarterly statistical reports and other data, FYs 20112013. 
*Figures in  this table are rounded. 
 
 
   
____________________________________________________________ 
24 Global cases are civil false claims cases that are brought by the U.S. Department of  
Justice and involve a group of State MFCUs.  The  National Association of Medicaid 
Fraud Control Units facilitates the settlement of global cases on  behalf of the States.   
25 The figures presented in this  paragraph are rounded.  
 
 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-09-14-00240)   6 
   
   
From FY 2011 through FY 2013, the MFCU Reported 25 Convictions and 
71 Civil Judgments and Settlements. From FY 2011 through FY 2013, the 
Units number of reported convictions was consistent.  During this period, 
the Unit reported a total of 25 convictions and 71 civil judgments and 
settlementsan annual average of 8.3 convictions and 23.7 civil 
judgments and settlements (see Table 2).  Of the Units 25 convictions 
over the 3-year period, 23 involved provider fraud and 2 involved patient 
abuse and neglect.   
Table 2: MFCU Convictions and Civil Judgments and Settlements, 
FYs 2011 Through 201326  
3-Year  Annual  
  FY 2011   FY 2012   FY 2013  
Total   Average 
Convictions  8  9  8  25  8.3 
Civil Judgments and Settlements   26  15  30  71  23.7 
Source:  OIG review of MFCU self-reported quarterly statistical reports and other data, FYs 20112013. 
 
From FYs 2011 through 2013, the Unit opened an average of 54 cases 
annually, with an average of 53 cases of provider fraud and 1 case of 
patient abuse and neglect.27  During this time, the Unit closed an average 
of 58 cases annually, averaging 51 cases of provider fraud and 7 cases of 
patient abuse and neglect.28  From FYs 2011 through 2013, the Unit 
received an average of 356 referrals annually, with an average of 
226 referrals of provider fraud and 130 referrals of patient abuse and 
neglect.29   
   
 ____________________________________________________________ 
26 Civil judgments and settlements include those received from global cases.   

27 According to  Unit management, the Unit opens a relatively low number of cases of  

patient abuse and neglect because most of the abuse and neglect referrals that the Unit
  
receives do not involve criminal or other serious allegations of abuse or neglect.  Unit 

management reported that most serious allegations of patient abuse and neglect in
  
New Mexico are investigated  by local law enforcement. 

28 Closures include multiple cases opened before FY 2011.   

29 The averages in this paragraph are rounded. 
 
 
 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-09-14-00240)   7 
   
   
A Unit supervisor approved the opening and closing of 
almost all case files; however, 42 percent of case files 
lacked documentation of periodic supervisory reviews  
According to Performance Standard 6(b), Unit supervisors should approve 
the opening and closing of cases.30  Supervisory approval to open and 
close cases suggests that Unit supervisors are monitoring the intake and 
resolution of cases, thereby facilitating their progress.   
The Unit documented supervisory approval to open cases in 96 percent of 
the case files.  The Unit documented supervisory approval to close cases 
in 100 percent of the closed case files. 
According to Performance Standard 6(c), supervisory reviews should be 
conducted periodically and noted in the case file.31  According to the 
Units policies and procedures, Unit supervisors should have conducted 
supervisory reviews of case files quarterly prior to October 2011 and 
bimonthly during and after October 2011.  However, 42 percent of the 
Units case files lacked documentation of periodic supervisory reviews in 
a timeframe consistent with the then-applicable procedures.   Unit 
management reported that case file reviews are now conducted consistent 
with the procedures, and that the Unit director and chief investigator 
presently keep summary logs of all such reviews.32 Of the 42 case files 
that lacked documentation of periodic supervisory reviews, all but 
4 involved cases that were opened during the tenure of a previous MFCU 
director. 
Thirty-two percent of Unit case files had unexplained 
investigation delays of a year or more 
According to 2012 Performance Standard 5, the MFCU should take steps 
to maintain a continuous case flow and to complete cases in an appropriate 
timeframe based on the complexity of the cases.  In addition, 
2012 Performance Standard 5(c) states that delays in investigation and 
prosecution should be limited to situations imposed by resource 
constraints or other exigencies. However, 32 percent of Unit case files 
showed delays of a year or more.   
____________________________________________________________ 
30 2012  Performance Standard  5(b).  
31 For the purposes of this report, supervisory approval to  open and close a case does not  
constitute a periodic supervisory review.  Periodic supervisory reviews are demonstrated 
by a supervisors reviewing a case more than once between the cases opening and 
closing and documenting those reviews in the case file. 
32 For the purposes of our case  file review, we considered  documentation in the summary  
logs for the MFCU  directors and/or chief investigators case file reviews to be sufficient  
documentation of  periodic supervisory reviews.  
 
 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-09-14-00240)   8 
   
   
None of those files contained documentation to explain the delays.33 Of 
the 16 case files that did not contain documentation explaining 
investigation delays, 9 were civil case files and 7 were criminal files.34 Of 
these 16 case files, 12 had unexplained delays of at least a year, 2 had 
unexplained delays of at least 18 months, and 2 had unexplained delays of 
at least 2 years. All 16 case files with unexplained delays involved cases 
that had been opened during the tenure of a previous MFCU director.   
The Unit did not always refer sentenced individuals to 
OIG or adverse actions to the National Practitioner 
Data Bank within an appropriate timeframe 
According to Performance Standard 8(d), when an individual is sentenced, 
the MFCU should report the conviction to OIGwith copies of judgment 
and sentence or other acceptable documentationwithin 30 days or other 
reasonable time period for the purpose of program exclusion.35, 36   The Unit 
reported 25 total convictions within the review period, but did not refer 
7 (28 percent) of those sentenced individuals to OIG for program exclusion 
within an appropriate timeframe.  Unit management provided 
documentation that five of these seven individuals were referred to OIG for  
program exclusion immediately prior  to our onsite review and that the 
remaining two individuals were referred during our onsite review.  
However, all seven individuals were referred to OIG more than 18 months  
after their sentencing dates, including five individuals who were referred 
more than 2 years after their sentencing dates.  
Separate from the reporting of convictions to OIG for exclusion purposes, 
Federal regulations require that all State and Federal government agencies 
report any final adverse actions, including those resulting from 
investigations or prosecutions of healthcare providers and suppliers, to the 
National Practitioner Data Bank (NPDB).  The Department of Health and 
Human Services (HHS) established the NPDB as a national collection 
____________________________________________________________ 
33 According to  2012 Performance Standard  7(b), case files should include all relevant  
facts and information.  For the purposes  of this report, we defined a delay as a period 
of at least a year with  no documented activity in the case file.  During  our onsite review, 
Unit managers  reported that they had no  knowledge about the reasons for these delays 
because the delays had occurred under prior management. 
34  We examined  the 50 case files in  our subsample for timeliness. 
35 Pursuant to section 1128(a) of the SSA, 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 Medicaid or to the neglect or abuse of  patients in  
residential health care facilities.  No payment may be made by Medicaid, Medicare, or 
other Federal  health care programs for an item or service provided,  ordered, or  prescribed  
by an excluded individual or entity.  42 CFR   1001.1901. 
36 2012  Performance Standard  8(f) states simply that all referrals for exclusion  should  be  
made  to OIG within 30 days.   
 
 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-09-14-00240)   9 
   
   
program for data on health care fraud and abuse.37, 38  Examples of final 
adverse actions include, but are not limited to, convictions, 
civil judgments (but not civil settlements), and program exclusions.39   
Final adverse actions must be reported to the NPDB within 30 days 
following the action.40  Although the Unit reported 25 final adverse 
actions to the NPDB during the review period, 14 (56 percent) of these 
were reported more than 30 days after the final adverse action was taken.  
Specifically, three final adverse actions were reported within 3160 days 
after the final adverse action, two were reported within 6190 days after 
the final adverse action, and nine were reported more than 91 days after 
the final adverse action.41  
The Units MOU with HSD did not reflect current law 
and practice, and the Units policies and procedures 
manual was incomplete 
As of our review period, the Units May 2010 MOU with HSD had not 
been revised to address the payment-suspension referral process.  
According to Unit management, the Units policies and procedures manual 
was created in 2004 and updated twicein 2011 and 2012.  However, the 
2012 version of the manual did not include Unit policies or procedures on 
periodic supervisory case file reviews or training standards for 
professional staff.42    
The Units MOU with HSD did not reflect current law and 
practice 
According to Performance Standard 10, a Unit should periodically review 
its MOU with the State Medicaid agency to ensure that the MOU reflects 
____________________________________________________________ 
37 SSA  1128E(a) and 45 CFR   61.1 (2012).  During most of our review  period, the 

data bank to which Units were to  report conviction information and other final adverse 
 
actions was the Healthcare Integrity and Protection Databank  (HIPDB).  In May 2013, 
 
the HIPDB was merged into the NPDB, formerly a separate data  bank.  The merged 
 
product is known as the NPDB.  78  Fed.  Reg. 20473 (April  5, 2013).   

38 In addition to the Federal Regulations, 2012 Performance Standard  9(g) states that 

Units should report all qualifying cases  to the Healthcare Integrity & Protection 
 
Databank, the  National  Practitioner Data Bank, or successor data bases. 
 
39  SSA  1128E(g)(1)  and 45  CFR  61.3 (2012).  We reviewed  the reporting of  adverse 

actions under HIPDB  requirements because the HIPDB and the NPDB had not yet  been
  
merged during  most of our review period  (FYs 2011 through 2013).  Current MFCU 
 
requirements for reporting to the merged  NPDB are in  45 CFR pt. 60. 

40 45 CFR   60.5.  Under the HIPDB  reporting  requirements, final adverse actions must 
 
be reported within 30 calendar days from the date the final adverse action was taken, or
  
the date when the reporting entity became aware of the final adverse action; or by the 

close of the entitys next monthly reporting cycle, whichever is later.   45  CFR  61.5(a). 
 
41  HHS provided  this data  to OIG on  February 21, 2014. 
 
42 2012  Performance Standard  3(e) states that  training standards should be included in the 

Units written  policies and procedures manual. 

 
 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-09-14-00240)   10  
   
   
current law and practice. As required by Federal regulations, the Unit had 
an MOU with HSD.43  However, as of our review period, this MOU had 
not been updated to include a provision describing the referral process 
between the Unit and HSD for providers that are subject to a payment 
suspension on the basis of a credible allegation of fraud.44 During our 
onsite review, Unit management provided us with a revised MOU (dated 
April 2014) that incorporates the payment-suspension provision. 
The Units policies and procedures manual did not reflect 
current Unit operations 
According to 2012 Performance Standard 3(a), the Unit should have 
written guidelines or manuals that contain current policies and procedures 
for its operations that are consistent with the performance standards.  The 
Units policies and procedures manual was last updated in 2012.  
However, the 2012 revision did not address the Units procedures for 
periodic supervisory reviews or for documenting these reviews in the 
Units case files. In addition, although the Unit had a training plan for 
professional staffconsistent with 2012 Performance Standard 12(a) 
this training plan was not contained in the Units policies and procedures 
manual. 
Immediately prior to our onsite review, the Unit provided us with a 
version of the policies and procedures manual that had been updated in 
early 2014after our review period.  This version contains the Units 
professional training policies and procedures, but does not contain the 
Units procedures for periodic supervisory reviews or for documenting 
these reviews in the Units case files.  
The Unit incorrectly reported program income and 
inappropriately claimed expenditures for indirect 
costs 
According to 2012 Performance Standard 11, a Unit should exercise 
proper fiscal control of its resources.  Control includes properly 
reporting program income, maintaining an equipment inventory, 
maintaining personnel activity records, using generally accepted 
____________________________________________________________ 
43 42 CFR   1007.9(d). 
44 The Affordable Care Act,  6402(h)(2), requires thatas a condition of receiving  
FFPState Medicaid programs suspend payments to providers for whom there is a 
credible allegation  of fraud, unless good cause exists to  not suspend payments.  One way  
to establish good cause is for the MFCU to inform the Medicaid agency that the 
suspension would compromise or  jeopardize its investigation of the provider. The  
Centers for Medicare & Medicaid Services and OIG implemented this  provision in  
revisions  to 42 CFR   455.23  and 1007.9(e) effective  March 25, 2011 (76 Fed.  Reg.  
5862, Feb. 2, 2011).  
 
 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-09-14-00240)   11  
   
   
accounting principles, and employing a financial system that complies 
with Federal regulations.45  From FY 2011 through FY 2013, the Unit 
incorrectly reported its program income to OIG.  In addition, expenditures 
for indirect costs were inappropriately claimed by the Unit, although these 
expenditures were never reimbursed.46  
The Unit incorrectly reported program income  
According to instructions on the Federal SF-425 form, Units should report 
on the form 75 percent of their program income earned.47 However, 
during the review period, the Unit reported on these forms 100 percent of 
its program income earned.  The New Mexico Attorney Generals Office 
reported that the Unit was informed of this error and that all future 
SF-425 submissions will reflect the correct 75-percent rate.  Financial staff 
from the New Mexico Attorney Generals Office worked with OIG to 
satisfactorily correct this issue.  
The Unit inappropriately claimed expenditures for indirect costs 
According to Federal regulations, indirect cost rates for MFCUs are 
reviewed, negotiated, and approved by HHS.48  These indirect cost rates 
are then included in an agreement between HHS (or the U.S. Department 
of Justice) and the State Attorney Generals Office or other appropriate 
State agency. In FY 2011, the Unit reported indirect costs of $18,528.49   
However, the Unit did not have an agreement in place to claim these costs.  
We note that the Unit initially reported these indirect costs but later 
withdrew its claim, and therefore did not receive reimbursement for the 
indirect costs.   Financial staff from the New Mexico Attorney Generals 
office worked with OIG to satisfactorily correct this issue.  
Other observation:  managed care referrals and 
program integrity recommendations 
Managed care referrals. According to 2012 Performance Standard 4(a), 
a Unit should take steps, such as the development of operational 
protocols, to ensure that the State Medicaid agency, managed care 
____________________________________________________________ 
45 According to  2012 Performance Standard  11(e), Units must employ a financial system 
 
in compliance with the standards for financial  management systems contained in  45 CFR
  
 92.20. 
 
46 Unit expenditures, program income, and indirect costs are reported on SF-425 forms. 

47 This percentage  represents the FFP rate. 

48 2 CFR pt. 225, Appendix E (1). 

49 Financial officers from the New Mexico Attorney Generals Office reported that they 

could not explain why this claim was filed or  how the amount  was calculated because the 

person  who  had  filled out the claim was no longer employed  by the Attorney Generals 

Office. 

 
 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-09-14-00240)   12  
   
   
organizations (MCOs), and other agencies refer all suspected cases of 
provider fraud to the Unit. Unit management and HSD officials reported 
that the Unit worked closely with HSD to develop and implement an 
improved referral process that ensures that the Unit receives all 
appropriate fraud referrals generated by MCOs.  For example, the Unit 
and HSD meet with MCOs about specific referrals and cases, as well as 
about general program integrity issues, on a monthly basis.  According to 
Unit management and HSD officials, these monthly meetings help ensure 
that MCO fraud cases are consistently referred to the Unit and that Unit 
investigations of MCO cases proceed efficiently.  
Program integrity recommendations. According to 2012 Performance 
Standard 9(b), the Unit should make appropriate program integrity 
recommendations to the State Medicaid agency.  According to HSD 
officials, the Unit consistently provides program integrity 
recommendations to HSD during quarterly joint protocol meetings.  For 
example, the Unit provided recommendations regarding provisions in 
MCO contracts that were adopted by HSD.  One such recommendation 
(formalizing the managed care referral process described above) was that 
MCOs should refer all suspected fraud to HSD.  HSD would then be 
responsible for screening these referrals and forwarding appropriate cases 
to the Unit for investigation. This recommendation was incorporated into 
MCO contracts with HSD as follows:  All confirmed, credible or 
suspected provider Fraud, Waste and/or Abuse shall be immediately 
reported to HSD . . . It shall be HSDs responsibility to report verified 
cases to [the Unit].   
 
 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-09-14-00240)   13  
   
   
CONCLUSION AND RECOMMENDATIONS 
From FY 2011 through FY 2013, the Unit reported recoveries of  
$9 million, 25 convictions, and 71 civil judgments and settlements.  A Unit 
supervisor approved the opening and closing of most case files. 
Opportunities for Unit improvement exist.  Specifically, Unit case files 
lacked documentation of periodic supervisory reviews consistent with the 
Units policies for case file review.  In addition, Unit case files did not 
always contain explanations for investigation delays.  Also, the Unit did 
not always refer sentenced individuals to OIG or adverse actions to the 
NPDB within the appropriate timeframe.  The Units policies and 
procedures manual was not complete and the Units MOU with HSD did 
not reflect current law and practice.  Finally, the Unit incorrectly reported  
program income and inappropriately claimed expenditures for indirect 
costs. However, financial staff from the New Mexico Attorney Generals 
Office worked with OIG to satisfactorily correct these financial issues.  
We recommend that the New Mexico Unit: 
Ensure that periodic supervisory reviews are documented in 
Unit case files 
The Unit should ensure that periodic supervisory reviews of cases files are 
conducted consistent with the Units case file review policy and that these 
reviews are documented in the case files. 
Ensure that any investigation delays are limited to situations 
imposed by resource constraints or other exigencies 
Except for delays imposed by resource constraints or other exigencies, the 
Unit should avoid extended delays to investigations.  To demonstrate that 
extended delays were imposed by resource constraints or other exigencies,  
the Unit could document such occurrences in the case files.   
Ensure that all relevant information is reported to OIG and the 
NPDB within an appropriate timeframe 
The Unit should ensure that it sends documentation referring individuals 
and entities for exclusion within 30 days of sentencing, consistent with 
2012 Performance Standard 8(f).  Similarly, the Unit should report all 
adverse actions to the NPDB within 30 days of the action, as specified in 
Federal regulations and consistent with 2012 Performance Standard 8(g). 
Revise its policies and procedures manual to reflect current 
Unit operations 
The Unit should revise its policies and procedures manual to include 
current procedures for periodic supervisory reviews and for documenting 
these reviews in the Units case files.  
 
 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-09-14-00240)   14  
   
   
UNIT COMMENTS AND OFFICE OF INSPECTOR GENERAL  
RESPONSE 
The Unit concurred with the four report recommendations. 
Regarding the first recommendation, the Unit reported that it now includes 
a supervisory review form in each case file. This form is signed by the 
Unit director and/or the chief investigator each time they conduct a case 
file review. 
Regarding the second recommendation, the Unit reported that it now 
documents in the case files the reasons for all investigation and/or 
prosecution delays. 
Regarding the third recommendation, the Unit reported that it had drafted 
and implemented a process for referring sentenced individuals to OIG and 
reporting adverse actions to the NPDB within an appropriate timeframe, 
and that all reporting is now current.   
Regarding the fourth recommendation, the Unit reported that it has drafted 
and implemented policies and procedures for periodic supervisory 
reviews. 
The full text of the Units comments is provided in Appendix E. 
 
 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-09-14-00240)   15  
   
   
APPENDIX A 
Referrals of Provider Fraud and Patient Abuse and Neglect to  
the New Mexico MFCU by Source, FYs 2011 Through 2013 
Table A-1: Total MFCU Referrals of Fraud and Abuse and Annual Average 
 
Case Type  FY 2011  FY 2012  FY 2013  3-Year Total  Annual Average* 
  Patient Abuse 
94  100  196  390  130 
and Neglect  
 
  Provider Fraud   258  194  226  678  226 
  Total   352  294  422  1,068   356 
 
  Source:  MFCU response to OIG data request. 
*Averages in  this  table are rounded. 
 
 
Table A-2: MFCU Referrals, by Referral Source  
 
 
  FY 2011   FY 2012   FY 2013    
Abuse  Abuse  Abuse  Percentage 
Referral 
Fraud   and  Fraud   and  Fraud   and  Total   of All 
Source  
Neglect   Neglect   Neglect   Referrals*  
Private Citizens  50  50  78  65  67  68  378  35.4%  
Adult Protective 
20  31  13  27  21  117  229  21.4%  
Services  
Other   107  1  36  0  74  2  220  20.6%  
State Medicaid 
59  3  44  2  41  3  152  14.2%  
Agency 
Law  
9  4  16  5  11  2  47  4.4%  
Enforcement  
Providers  6  4  3  0  4  0  17  1.6%  
Other State 
4  1  2  1  4  4  16  1.5%  
Agencies 
HHS/OIG   2  0  0  0  2  0  4  0.4%  
Licensing Board  0  0  0  0  2  0  2  0.2%  
Prosecutors  1  0  1  0  0  0  2  0.2%  
State Survey  
0  0  1  0  0  0  1  0.1%  
and Certification 
Total   258  94  194  100  226  196  1,068   100%  
Annual Total  352  294  442     
Annual  
356     
Average*  
Source:  MFCU response to OIG data request. 
*These figures  are rounded. 
 
 
 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-09-14-00240)   16  
   
   
APPENDIX B 
Investigations Opened and Closed by the New Mexico MFCU, 
by Provider Category and Case Type, FYs 2011 Through 2013 
Table B-1: Total Annual Opened and Closed Investigations  
 
  Annual   
  Case Type   FY 2011   FY 2012   FY 2013   3-Year Total   Average*  
  Opened   34  44  86  164  54 
Patient Abuse and 
2  0  2  4  1 
Neglect 
Provider Fraud   32  44  84  160  53 
Closed  44  69  62  175  58 
Patient Abuse and 
4  12  5  21  7 
Neglect 
Provider Fraud   40  57  57  154  51 
Source:  MFCU response to OIG data request. 
*Averages in  this  column are rounded. 
 
 
 
Table B-2: Patient Abuse and Neglect Investigations  
 
FY 2011   FY 2012   FY 2013  
Provider Category        
Opened  Closed  Opened  Closed  Opened  Closed 
Home Health Aides  0  0  0  2  2  1 
Nursing Facilities   0  2  0  2  0  1 
Other Long-Term  Care 
1  0  0  2  0  1 
Facilities  
Other   1  2  0  6  0  2 
Total   2  4  0  12  2  5 
Source:  Unit response to OIG data request. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-09-14-00240)   17  
   
   
 
 
 
Table B-3: Provider Fraud Investigations  
 
Provider Category   FY 2011   FY 2012   FY 2013  
Facilities   Opened  Closed   Opened  Closed   Opened  Closed  
Hospitals  1  1  1  0  5  3 
Nursing Facilities   0  1  0  2  1  0 
Other Long-Term  Care 
1  1  0  2  1  2 
Facilities  
Substance Abuse 
0  0  0  1  1  0 
Treatment Centers 
Other Facilities   0  2  1  1  2  4 
  Subtotal   2  5  2  6  10  9 
Practitioners   Opened  Closed  Opened  Closed  Opened  Closed 
Counselors/Psychologists  1  0  6  1  1  3 
Dentists  0  1  1  2  1  0 
Doctors of Medicine or 
2  4  1  0  6  2 
Osteopathy  
Optometrists/Opticians  0  0  0  1  0  0 
Other Practitioners  0  0  3  5  1  0 
  Subtotal   3  5  11  9  9  5 
Medical Support  Opened  Closed   Opened  Closed   Opened  Closed  
Durable Medical 
1  0  0  0  5  1 
Equipment Suppliers 
Home Health Care 
9  7  2  11  6  6 
Agencies 
Home Health Care Aides  7  5  14  11  9  14 
Laboratories  0  0  0  1  1  0 
Pharmaceutical 
9  12  3  10  27  11 
Manufacturers 
Pharmacies  1  0  3  1  6  1 
Transportation Services  0  0  2  0  1  2 
Other Medical Support   0  1  2  4  3  2 
  Subtotal   27  25  26  38  58  37 
Program  Related   Opened  Closed  Opened  Closed  Opened  Closed 
Billing Company  0  0  1  0  0  0 
Managed Care   0  0  1  1  3  0 
Other Program Related  0  5  3  3  4  6 
  Subtotal   0  5  5  4  7  6 
  Total   32  40  44  57  84  57 
 
Source:  Unit response to OIG data request. 
 
 
 
 
 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-09-14-00240)   18  
   
   
APPENDIX C 
Methodology  
We analyzed data from seven sources to describe the caseload and assess 
the performance of the MFCU.  We also analyzed the data to identify any 
opportunities for improvement and any instances in which the MFCU did 
not meet the performance standards or was not operating in accordance 
with laws, regulations, and/or policy transmittals.50 In addition, we noted 
practices that appeared to benefit the MFCU.  We based these 
observations on statements from MFCU staff and an analysis of collected 
data. 
Data Collection and Analysis 
Review of MFCU Documentation.  We collected and reviewed (1) MFCU 
documentation, including policies and procedures related to the Units 
operations, staffing, and cases; (2) the MFCUs annual reports and 
quarterly statistical reports; and (3) the MFCUs responses to 
recertification questionnaires.  The documentation also included data such 
as the number of referrals received by the MFCU and the number of 
investigations opened and closed. We reviewed the documentation to 
determine how the MFCU investigates and prosecutes Medicaid cases.  
Additionally, we confirmed with the MFCU director that the 
documentation we had was current at the time of our review and requested 
any additional data or clarification, as needed.  The data we collected from 
the MFCU were current as of April 18, 2014.  Subsequent changes to the 
data would therefore not be included in our analyses.   
Review of Financial Documentation. To evaluate internal control of fiscal 
resources, OIG auditors reviewed policies and procedures related to the 
MFCUs budgeting, accounting systems, cash management, procurement, 
property, and personnel. We obtained the MFCUs claimed grant 
expenditures for FYs 2011 through 2013 to (1) review final Federal Status 
Reports51  and supporting documentation, (2) select and review transactions 
within direct cost categories to determine if costs were allowable, and 
(3) verify that indirect costs were accurately computed using the approved 
indirect cost rate. 
____________________________________________________________ 
50 All relevant  regulations, statutes, and  policy transmittals are available online at 
http://oig.hhs.gov/fraud/medicaid-fraud-control-units-mfcu/. 

51 The MFCU transmits financial status reports to  OIGs Office of Management and 
 
Policy on a quarterly and annual basis.  These reports detail MFCU income and 
 
expenditures.
  
 
 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-09-14-00240)   19  
   
   
Finally, we reviewed records in the HHS Payment Management System  
(PMS)52  and revenue accounts to identify any unreported program  
income.53  
Structured Interviews With Key Stakeholders. We conducted structured 
interviews with eight individual stakeholders among six agencies who 
were familiar with MFCU operations.  Specifically, we interviewed the 
HSDs Program Integrity Director; the HSDs General Counsel; an 
Assistant U.S. Attorney; a New Mexico Deputy Attorney General;54 the 
OIG Assistant Special Agent in Charge for the State of New Mexico; a 
New Mexico Adult Protective Services supervisor; and two FBI Special 
Agents. These interviews focused on the MFCUs interaction with 
external agencies, MFCU operations, opportunities for improvement, and 
any practices that appeared to benefit the MFCU and that may be useful to 
other MFCUs in their operations. 
Survey of MFCU Staff. We conducted an online survey of MFCU staff.55   
We requested and received responses from 16 staff members, for a            
100percent response rate. Our questions focused on MFCU operations, 
opportunities for improvement, and practices that appeared to benefit the 
MFCU and that may be useful to other MFCUs in their operations.  The 
survey also sought information about the MFCUs compliance with 
applicable laws, regulations, and policy transmittals.   
Structured Interviews With MFCU Management and Selected Staff.  We  
conducted structured interviews with the MFCUs director, the MFCUs 
chief investigator, and a MFCU information systems specialist.  We asked 
them to provide us with additional information to better understand the 
MFCUs operations, identify opportunities for improvement, identify 
practices that appeared to benefit the MFCU and that may be useful to 
other MFCUs in their operations, and to clarify information obtained from 
other data sources. 
____________________________________________________________ 
52 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. 
53 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). 
54 The Deputy Attorney General supervises the MFCU director. 
55  We  did not survey the MFCU  director  or chief investigator.  
 
 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-09-14-00240)   20  
   
   
Onsite Review of Case Files.  We selected a simple random sample of 
100 case files from the 197 cases56  that were open at any point from  
FY 2011 through FY 2013. The design of this sample allowed us to 
estimate the percentage of all 197 cases with various characteristics at the 
95-percent confidence level. We reviewed these 100 sampled case files 
and the MFCUs processes for monitoring the status and outcomes of 
cases. From the 100 case files in the initial sample, we selected another 
simple random sample of 50 files for a more comprehensive review to 
identify any potential issues from a qualitative perspective.  We consulted 
MFCU staff to address any apparent issues with individual case files, such 
as missing documentation.   
Onsite Observation of MFCU Operations.  While onsite, we observed the 
MFCUs operations. Specifically, we  observed the intake of referrals; 
security of data and case files; and the general functioning of the MFCU.  
We also checked to ensure that the MFCU referred sentenced individuals 
to OIG for program exclusion and that the MFCU reported adverse actions 
to the NPDB. 
 
 
____________________________________________________________ 
56 This  figure includes cases opened before FY  2011 that  remained open at some point  
during  FYs 20112013.  This figure does not include 90 multi-State (global) civil  
false-claims cases, which consist of both those worked  directly by the New Mexico  
MFCU and those worked  by staff from the Federal  government or other  MFCUs.  For the 
purposes of our case file review, the MFCUs global cases  were not included as part of 
the MFCUs case file population.   Including  global cases, the total number of MFCU 
cases open  during the review  period was 287. 
 
 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-09-14-00240)   21  
   
   
APPENDIX D 
Case File Review Population, Sample Size Counts, and 
Confidence Interval Estimates 
Table D-1 shows population and sample counts and percentages by case 
type. Note that both samples have percentages of case types similar to the 
general population, though sample counts for some case types are very 
small.  Because of these small sample sizes, we cannot reliably generalize 
what we found in our sample review to each case type in the population, 
and only our overall estimates project to the population of all case files.  
We estimated the 5 population values for all 197 nonglobal case files from 
the results of our review of the case files selected in our simple random  
samples.  Table D-2 includes the estimate descriptions, sample sizes, point 
estimates, and 95-percent confidence intervals for these five estimates.  
 
Table D-1: Population and Sample Size Counts for Case Types 
Population Count  Sample Count*    Sample Count* 
Case Type  
and (%)  n=197   and (%)  n=100   and (%)  n=50  
Closed  149 (76%)   78 (78%)   41 (82%)  
Open   48 (24%)   22 (22%)   9 (18%)  
       
Civil (Nonglobal)  99 (50%)   50 (50%)   28 (56%)  
Criminal  98 (50%)   50 (50%)   22 (44%)  
       
Patient Abuse/Neglect  26 (13%)   18 (18%)   7 (14%)  
Provider Fraud 
171 (87%)   82 (82%)   43 (86%)  
(Nonglobal)  
Source: The New Mexico MFCU provided a list of all  case files open during FYs 2011 through 2013. 
* OIG generated  this random sample. 
 
 
 
 
 
 
 
 
 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-09-14-00240)   22  
   
   
Table D-2: Confidence Intervals for Key Case File Review  Data  
Point  95-Percent Confidence 
Estimate Description  Sample Size 
Estimate  Interval  
Case Files With 
Documented Supervisory   100   96.0%   91.4-98.0%  
Approval for Opening  
Case Files With 
Documented Supervisory   74  100.0%   96.0-100.0%  
Approval for Closing  
Case Files With 
Documentation of  100   85.0%   78.7-89.9%  
Supervisory Review  
Cases Files With No 
Documentation of Periodic 
Supervisory Reviews 
100  42.0%   34.5-49.8%  
Consistent With the 
MFCUs Case File Review  
Policies  
Cases With No 
Documentation Explaining   50   32.0%   20.8-45.2%*  
Investigation Delays  
 
*Because our subsample consisted of only 50 case files, our 95-percent confidence interval is 
relatively  wide for this estimate. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-09-14-00240)   23  
   
   
APPENDIX E 
Unit Comments 
 
 
 
 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-09-14-00240)  24  
  Recommendation: Ensure that all relevant information is reported to the OIG and the NPDB within an 
appropriate timeframe. 
Comments: We concur with this recommendation. Based on this recommendation, we have drafted and 
implemented a policy and procedure outlining who will be responsible for reporting, and guidelines 
describing how to report both exclusions and adverse actions. This process has been in use since April 
2014 and seems to be effective. As of the writing of this letter, all reporting is current. 
Recommendation: Revise its policies and procedures manual to reflect current Unit operations. 
Comments: We concur with this recommendation. Based on this recommendation, we have drafted and 
implemented a policy and procedure outlining how supervisory reviews should be conducted and 
documented. As described above, this process Is presently being used and seems to be effective. 
The New Mexico MFCU appreciates the efforts of HHS/OIG to ensure the quality and standards of each 
MFCU, and welcomes the opportunity for Improvement. We have made efforts to address each 
recommendation, and will continue to strive to meet all performance standards. Thank you for your time 
and effort spent on this review. 
Sincerely, 
Patricia Padrino Tucker 
Acting Director 
New Mexico Medicaid Fraud Control Unit 
25 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-09-14-00240)   
   
ACKNOWLEDGMENTS 
This report was prepared under the direction of Timothy S. Brady, Regional 
Inspector General for Evaluation and Inspections in the San Francisco 
regional office, and Michael Henry,  Deputy Regional Inspector General.  
Matthew DeFraga served as the lead analyst for this study.  Other Office 
of Evaluation and Inspections staff who provided support from the 
San Francisco regional office include Rosemary Rawlins.  Central office 
staff who provided support include Thomas Brannon, Kevin Farber, 
Christine Moritz, Andrew VanLandingham, and Sherri Weinstein.  Office 
of Investigations staff who provided support include 
Timothy DeFrancesca.  Office of Audit Services staff who provided 
support include Matthew Clark and Lisa Lara.   
 
 
New Mexico State Medicaid Fraud Control Unit:  2014 Onsite Review  (OEI-09-14-00240)   26  
   
 
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.