U.S. Department of Health and Human Services 
Office of Inspector General 
 
 
 
Montana  
Medicaid Fraud 
Control Unit:  
2019 Onsite 
Inspection
 
 
OEI-12-19-00170  Suzanne Murrin 
March 2020  Deputy Inspector General  
  for Evaluation and Inspections 
oig.hhs.gov  Report in Brief  U.S. Department of Health and Human Services 
March 2020 
Office  of Inspector General 
OEI-12-19-00170 
 
 
Montana Medicaid Fraud Control Unit: 2019 Onsite Inspection 
What OIG Found 
The Montana Medicaid Fraud Control Unit (MFCU or Unit) reported 
13 indictments; 19 convictions; 33 civil settlements and judgments; and  Unit Case Outcomes 
$3.4 million in recoveries for fiscal years (FYs) 201618.  Based on the  FYs 201618 
information we reviewed, we found that the Unit operated in 
  13 indictments 
accordance with applicable laws, regulations, and policy transmittals.  
  19 convictions  
However, we made two findings involving the Units adherence to 
  33 civil settlements and 
Performance Standard 7.    
judgments 
1.  The Unit lacked a central repository for case information,    $3.4 million in recoveries 
making access to case data and pertinent case documents 
inefficient.    Unit Snapshot 
2.  The Units practices for conducting periodic supervisory review  The Unit is part of the Montana 
were not fully reflected in its policies and procedures manual.  Department of Justice, Division of 
Criminal Investigation (DCI)  
In addition to the findings, we made observations regarding Unit 
operations and practices, the most significant of which was as follows:  9 MFCU staff 4 investigators, 1 
attorney, 2 auditors, and 2 support 
  While the Unit received an adequate number of fraud referrals, 
stafflocated in Helena   
few fraud referrals came from the Medicaid agencys program 
integrity unit, Surveillance and Utilization Review (SURS).   Unit was established in 1995 
 
We also identified the following beneficial practice that may be useful 
as a model to other Units: 
  To encourage referrals, the Unit regularly trained cadets at the Montana Law Enforcement Academy and trained 
other law enforcement personnel through its participation in the Montana Elder Abuse Task Force.   
What OIG Recommends and How the Unit Responded 
We recommend that, to address the two findings, the Montana Unit: (1) implement a comprehensive case management 
system that allows for efficient access to case documents and information; and (2) revise its policies and procedures manual 
to address the frequency of its periodic supervisory reviews.  The Unit concurred with both recommendations. 
 
Full report can be found at oig.hhs.gov/oei/reports/oei-12-19-00170.asp   
TABLE OF CONTENTS 
BACKGROUND  1 
PERFORMANCE ASSESSMENT  5 
Case Outcomes  5 
The Unit reported 13 indictments; 19 convictions; and 33 civil settlements and judgments 
for FYs 2016 through 2018 
The Unit reported total recoveries of $3.4 million for FYs 2016 through 2018 
Performance Standard 1: Compliance with requirements  6 
Based on the information we reviewed, the Montana Unit complied with applicable laws, 
regulations, and policy transmittals 
Performance Standard 2: Staffing   6 
The Unit was fully staffed at the time of our review, but had vacancies during the review 
period 
Performance Standard 3: Policies and procedures  6 
The Unit maintained policies and procedures   
Performance Standard 4: Maintaining adequate referrals  6 
The Unit took steps to maintain an adequate volume and quality of referrals involving 
fraud and patient abuse and neglect 
To encourage referrals, the Unit regularly trained cadets at the Montana Law Enforcement 
Academy and trained other law enforcement personnel through its participation in the 
Montana Elder Abuse Task Force  
Although the Unit received an adequate number of fraud referrals, few fraud referrals 
came from Surveillance and Utilization Review (SURS) 
Performance Standard 5: Maintaining a continuous case flow  9 
Nearly all case files contained documentation of supervisory approval to open, and, as 
appropriate, all contained supervisory approval to close 
Performance Standard 6: Case mix  9 
The Units case mix included both cases of fraud and cases of patient abuse or neglect, 
covering a number of provider types; the Unit focused its resources on criminal rather than 
civil cases 
Performance Standard 7: Maintaining case information  10 
The Unit lacked a central repository for case information, making access to case data and 
pertinent case documents inefficient 
 
   
The Units practices for conducting periodic supervisory review were not fully reflected in  
its policies and procedures manual   
Performance Standard 8: Cooperation with Federal authorities on fraud cases  12 
The Unit investigated cases jointly with OIG  
The Unit reported all convictions and adverse actions during the review period to Federal 
partners within appropriate timeframes  
Performance Standard 9: Program recommendations   13 
The Unit made recommendations to the Medicaid agency 
Performance Standard 10: Agreement with Medicaid agency    13 
The Units memorandum of understanding (MOU) with the Medicaid agency reflected 
current practice, policy, and legal requirements 
Performance Standard 11: Fiscal control  14 
Based on our limited review, we identified no deficiencies in the Units fiscal control of its 
resources 
Performance Standard 12: Training  14 
The Unit maintained a training plan and offered staff in-service briefings on the Unit 
mission and function  
CONCLUSION AND RECOMMENDATIONS  15 
Implement a comprehensive case management system that allows for efficient access to case   
documents and information 
Revise its policies and procedures manual to address the frequency of its periodic supervisory   
reviews  
UNIT COMMENTS AND OIG RESPONSE  16 
APPENDICES   
A.  Medicaid Fraud Control Unit Performance Standards  17 
B.  Detailed Methodology  22 
C.  Unit Referrals by Source for Fiscal Years 2016 Through 2018  24 
D.  Point Estimates and 95-Percent Confidence Intervals of Case File Reviews  25 
E.  Unit Comments  26 
ACKNOWLEDGMENTS  26 
 
   
   
BACKGROUND 
Objective 
To examine the performance and operations of the Montana 
Medicaid Fraud Control Unit  
Medicaid Fraud Control Units (MFCUs or Units) investigate (1) Medicaid 
Medicaid Fraud 
provider fraud and (2) patient abuse or neglect in facility settings and 
Control Units 
prosecute those cases under State law or refer them to other prosecuting 
offices.1, 2  Under the Social Security Act (SSA), a MFCU must be a single, 
identifiable entity of State government, separate and distinct from the 
State Medicaid agency, and employ one or more investigators, attorneys, 
and auditors.3  Each State must operate a MFCU or receive a waiver.4   
Currently, 50 States, the District of Columbia, Puerto Rico, and the 
U.S. Virgin Islands operate MFCUs.5  Each Unit receives a Federal grant 
award equivalent to 90 percent of total expenditures for new Units and 
75 percent for all other Units.6  In Federal fiscal year (FY) 2018, combined 
Federal and State expenditures for the Units totaled approximately 
$294 million.7   
 
 
 
 
1 SSA  1903(q)(3).  Regulations at 42 CFR  1007.11(b)(1) clarify that a Units responsibilities 
include the review of complaints of misappropriation of patients private funds in health care 
facilities. 
2 References to State in this report refer to the States, the District of Columbia, and the 
U.S. territories. 
3 SSA  1903(q). 
4 SSA  1902(a)(61). 
5 The territories of American Samoa, Guam, and the Northern Mariana Islands have not 
established Units. 
6 SSA  1903(a)(6).  For a Units first 3 years of operation, the Federal Government contributes 
90 percent of funding, and the State contributes 10 percent.  Thereafter, the Federal 
Government contributes 75 percent, and the State contributes 25 percent. 
7 OIG analysis of MFCU annual statistical reporting data for FY 2018.  The Federal FY 2018 was 
from October 1, 2017, through September 30, 2018. 
 
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The Office of Inspector General (OIG) administers the grant award to each 
OIG Grant 
Unit and provides oversight of Units.8, 9  As part of its oversight, OIG reviews 
Administration 
and recertifies each Unit annually and conducts periodic onsite reviews.  
and Oversight 
In its annual recertification review, OIG examines the Units reapplication, 
of Medicaid  case statistics, and questionnaire responses from Unit stakeholders.  
Fraud Control  Through the recertification review, OIG assesses a Units performance, as 
measured by the Units adherence to published performance standards;10 
Units 
the Units compliance with applicable laws, regulations, and OIG policy 
transmittals;11 and the Units case outcomes.  (See Appendix A for MFCU 
performance standards, including performance indicators for each 
standard.)   
OIG further assesses Unit performance by conducting onsite Unit reviews 
that may identify findings and make recommendations for improvement.  
During an onsite review, OIG also makes observations regarding Unit 
operations and practices, and may identify beneficial practices that may be 
useful to share with other Units.  Finally, OIG provides training and technical 
assistance to Units while onsite, as appropriate, and on an ongoing basis.  
The Montana MFCU is in Helena and is part of the Montana Department of 
Montana 
Justices Division of Criminal Investigation (DCI).  At the time of our April 
Medicaid Fraud 
2019 inspection, the Unit employed four investigators (one of whom is the 
Control Unit  director and supervising agent), two auditors, an attorney, and two support 
staff.12  The director supervises all staff.  During our review period of FYs 
201618, the Unit spent $2,328,676, with a State share of $582,169. 
Referrals.  The Unit receives referrals from several sources, including private 
citizens, law enforcement, health care providers, and the State Medicaid 
agencys program integrity unit.  When the Unit receives a referral, a Unit 
staff person completes a referral form and forwards it to the director.  The 
director determines whether the referral is within the MFCUs jurisdiction.  If 
the referral does not fall within the Units purview, the director refers it to 
 
8 As part of grant administration, OIG receives and examines financial information from Units, 
such as budgets and quarterly and final Federal Financial Reports that detail MFCU income 
and expenditures. 
9 The SSA authorizes the Secretary of Health and Human Services to award grants (SSA 
 1903(a)(6)) and to certify and annually recertify the Units (SSA  1903(q)).  The Secretary 
delegated these authorities to OIG in 1979. 
10 MFCU performance standards are published at 77 Fed. Reg. 32645 (June 1, 2012).  The 
performance standards were developed by OIG in conjunction with the MFCUs and were 
originally published at 59 Fed. Reg. 49080 (Sept. 26, 1994). 
11 OIG occasionally issues policy transmittals to provide guidance and instruction to MFCUs.  
Policy transmittals are located at https://oig.hhs.gov/fraud/medicaid-fraud-control-units-
mfcu/index.asp.  
12  The Unit director mentioned throughout the report refers to the director at the time of the 
onsite inspection.   
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the appropriate agency or organization.  If the referral is within the Units 
purview, the director assigns an auditor to gather relevant preliminary 
information, such as Medicaid eligibility and Medicaid billing exposure.  The 
director reviews the preliminary data and determines whether to open a 
case.  If the director decides to open a case, the director forwards the 
referral form to the DCIs Bureau Chief for a case number. 
Investigations and Prosecutions.  When the Unit opens a case, the director 
assigns an agent to work with the previously assigned auditor.  The Unit 
attorney informally monitors the investigative progress of cases and meets 
frequently with the investigative team.  Following the investigative phase of 
the case, the agent and/or auditor prepare the case file for presentation to 
the Unit prosecutor.  The attorney prosecutes the cases. 
Montana Department of Public Health and Human Services.  The Montana 
Montana 
Department of Public Health and Human Services (DPHHS) administers 
Medicaid 
Montanas Medicaid program and reimburses private and public providers 
Program  for a range of preventative, primary, and acute care services.  Services must 
be medically necessary, provided by a provider enrolled in Montana 
Medicaid, and covered by Medicaid.  In June 2019, 242,044 beneficiaries 
were enrolled in Medicaid.13  In FY 2018, total Medicaid expenditures were 
$1.9 billion.14  
DPHHS is also responsible for Medicaid program integrity efforts, including 
identifying aberrant billing practices, sanctioning those who have abused 
the Medicaid program, recovering overpayments, and making provider 
fraud referrals to the MFCU for investigation.  The program integrity unit in 
DPHHS is known as Surveillance and Utilization Review (SURS).  SURS 
employed eight staff during State FY 201819.15 
OIG conducted a previous onsite review of the Montana Unit in 2012.16  In 
Prior OIG 
that review, OIG found 95 percent of Unit case files contained 
Report 
documentation of supervisory approval to open cases; however, 40 percent 
of closed case files lacked documentation of supervisory approval to close 
cases.  In addition, OIG found that 65 percent of Unit case files lacked 
documentation of periodic supervisory reviews.  OIG found that the Unit 
 
13  Medicaid.gov, June Medicaid and CHIP Enrollment Data Highlights, Montana, 
https://www.medicaid.gov/medicaid/program-information/medicaid-and-chip-enrollment-
data/report-highlights/index.html.  Accessed on September 12, 2019.   
14 OIG, MFCU Statistical Data for FY 2018, https://oig.hhs.gov/fraud/medicaid-fraud-control-
units-mfcu/expenditures_statistics/fy2018-statistical-chart.pdf.  Accessed on September 30, 
2019.   
15 The State FY is July 1 to June 30.    
16 OIG, Montana State Medicaid Fraud Control Unit: 2012 Onsite Review, 
https://oig.hhs.gov/oei/reports/oei-09-12-00700.asp.  Accessed on September 30, 2019. 
 
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also did not refer sentenced providers to OIG for program exclusion within 
the appropriate timeframe.  The Units memorandum of understanding 
(MOU) with DPHHS did not reflect current law and practice as required, and 
the Unit did not always adhere to the MOU stipulations.  OIG also observed 
that the Unit received a limited number of fraud referrals from DPHHS.  OIG 
recommended that the Montana Unit: (1) ensure that supervisory approval 
to close cases and periodic supervisory reviews are documented in Unit case 
files; (2) ensure that it refers providers for exclusion to OIG within the 
appropriate timeframe; (3) revise its MOU with DPHHS; and (4) adhere to 
the MOU provisions.  In response, the Unit developed a case review form 
and amended its policies and procedures for case review and for the 
opening and closing of cases.  In addition, the Unit amended its policies and 
procedures for the reporting of convictions to OIG for program exclusion.  
Furthermore, the Unit revised its MOU with DPHHS and established a 
quarterly cross-training program, as stipulated in the MOU.  Based on 
information received from the Unit, OIG considered the recommendations 
implemented.   
Methodology  OIG conducted the onsite inspection of the Montana MFCU in April 2019.  
Our review covered the 3-year period of FYs 2016 through 2018.  We based 
our inspection on an analysis of data and information from 7 sources: (1) 
Unit documentation; (2) financial documentation; (3) structured interviews 
with key stakeholders; (4) structured interviews with the Units managers 
and selected staff; (5) a review of a random sample of 56 case files from the 
96 nonglobal case files that were open at some point during the review 
period; (6) a review of all convictions submitted to OIG for program 
exclusion and all adverse actions submitted to the National Practitioner Data 
Bank (NPDB) during the review period; and (7) observation of Unit 
operations.  (See Appendix B for a detailed methodology.)  In examining the 
Units operations and performance, we applied the published performance 
standards in Appendix A, but we did not assess adherence to every 
performance indicator for every standard. 
Standards  We conducted this inspection in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors General on 
Integrity and Efficiency.  These inspections differ from other OIG evaluations 
in that they support OIGs direct administration of the MFCU grant program, 
but they are subject to the same internal quality controls as other OIG 
evaluations, including internal and external peer review.   
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PERFORMANCE ASSESSMENT 
Below are the results of OIGs assessment of the performance and 
operations of the Montana Unit.  OIG identified the Units case outcomes; 
found that the Unit complied with legal and policy requirements; and, for 
each of the performance standards, made a finding or observation(s), 
including highlighting a beneficial practice.   
CASE OUTCOMES   
 
Observations  The Unit reported 13 indictments; 19 convictions; and 33 civil 
settlements and judgments for FYs 2016 through 2018.  From the 
19 convictions, 14 convictions involved provider fraud and 5 involved 
 
patient abuse or neglect. 
 
The Unit reported total recoveries of $3.4 million for FYs 2016 through 
2018.  (See Exhibit 1 for the sources of those recoveries.)  
  Exhibit 1: The Unit reported combined civil and criminal recoveries 
of $3.4 million (FYs 201618). 
 
Source: OIG analysis of Unit statistical data, FYs 201618. 
Note: Global civil recoveries derive from civil settlements or judgments in global cases, which are cases 
that involve the U.S. Department of Justice and a group of State MFCUs and are facilitated by the 
National Association of Medicaid Fraud Control Units. 
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STANDARD 1  A Unit conforms with all applicable statutes, regulations, and policy 
  directives. 
 
Observation  Based on the information we reviewed, the Montana Unit complied 
with applicable laws, regulations, and policy transmittals.  We did not 
identify any legal or compliance concerns related to Unit operations. 
 
STANDARD 2  A Unit maintains reasonable staff levels and office locations in relation 
  to the States Medicaid program expenditures and in accordance with 
staffing allocations approved in its budget. 
 
Observation  The Unit was fully staffed at the time of our review, but had vacancies 
during the review period.  During the review period, the Unit was 
approved by OIG for eight staff in FY 2016 and nine staff in FYs 201718.  At 
the time of our review, the Unit was staffed in accordance with the staffing 
allocations approved by OIG.  However, the Unit experienced vacant 
positions during FY 2016 (two investigators), FY 2017 (one investigator), and 
FY 2018 (one support staff).   
 
STANDARD 3  A Unit establishes written policies and procedures for its operations 
  and ensures that staff are familiar with, and adhere to, policies and 
procedures. 
 
Observation 
The Unit maintained policies and procedures.  The Unit maintained a 
policies and procedures manual specific to the MFCUs functions and 
jurisdiction.  The Unit updated the manual as needed and maintained a 
record of these updates.  This Unit manual was separate from the DCI 
manual that details protocols related to the division as a whole.   
STANDARD 4  A Unit takes steps to maintain an adequate volume and quality of 
  referrals from the State Medicaid agency and other sources. 
 
Observation  The Unit took steps to maintain an adequate volume and quality of 
referrals involving fraud and patient abuse and neglect.  The Unit 
director met with key stakeholders regularly.  The Unit director met monthly 
with the SURS supervisor to discuss fraud referrals and case updates, as well 
as to coordinate work.  The Unit director also met monthly with 
stakeholders who were sources of patient abuse and neglect referrals
supervisors from Adult Protective Services, Licensure (surveyors of assisted 
living facilities), Certification (surveyors of skilled nursing facilities), and the 
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State Ombudsman.  The Unit director also reported the encouragement of 
referrals by making personal contacts with home care agencies and other 
care providers.  Finally, the Unit reported that investigators conducted 
outreach to local law enforcement by making personal contact with local 
police departments when working cases in a local area.  
 
To encourage referrals, the Unit regularly trained cadets at the Montana 
Observation 
Law Enforcement Academy and trained other law enforcement 
Beneficial Practice  personnel through its participation in the Montana Elder Abuse Task 
Force.  The Unit attorney and an investigator provided training to cadets at 
the Montana Law Enforcement Academy twice per year, one purpose of 
which was to encourage referrals to the Unit.  Specifically, the training 
focused on the MFCUs mission; elder abuse, including financial abuse; and 
drug diversion, with an emphasis on how the MFCU can assist with crimes 
that the cadets might encounter against vulnerable and elderly persons.  
 
As an additional method of encouraging referrals from local law 
enforcement, the Unit participated as a member of the Montana Elder 
Abuse Task Force,17 which provided training as part of a 3-year grant from 
the National Clearinghouse on Abuse in Later Life.18  The purpose of the 
training was to provide first responders, county attorneys, court officials, 
and law enforcement officers with information about elder abuse, including 
investigative strategies; possible criminal charges; and local resources or 
services available to assist officers and victims of abuse.  Since 2017, the 
Montana Elder Abuse Task Force has provided training to over 60 law 
enforcement personnel through 3 8-hour training sessions provided in 
locations across the State.   
 
Observation  Although the Unit received an adequate number of fraud referrals, few 
fraud referrals came from SURS.  The Unit received 232 fraud referrals 
during the review period, most commonly from private citizens, providers, 
and law enforcement.  Only eight of these fraud referrals were received 
from SURS, the Medicaid agencys program integrity unit.  OIGs 2012 onsite 
review of the Unit also observed that the Unit received a limited number of 
 
17 The MFCU, the Attorney Generals Office, Adult Protective Services, Big Sky Senior Services, 
and The Friendship Center comprised the Elder Abuse Task Force. 
18 Administered by a grant from the U.S. Department of Justices Office on Violence Against 
Women, the National Clearinghouse on Abuse in Later Life provides grants to enhance 
training and services to address elder abuse, neglect, and exploitation.  Grant funds may be 
used to develop services for older victims; create or enhance coordinated community 
response; organize training and cross-training for professionals; and conduct outreach 
activities and public awareness. 
 
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fraud referrals from SURS.19  Given that the SURS program has responsibility 
for identifying aberrant billing practices of Medicaid providers in Montana, 
SURS should be a significant source of quality referrals for the Unit.  See 
Appendix C for all sources of referrals involving fraud and patient abuse or 
neglect during FYs 201618. 
 
Two factors may have limited the number of referrals SURS sent to the 
MFCU.  First, SURS did not refer all potential fraud to the Unit.  A 2017 
Montana State legislative audit found that SURS, contrary to Federal 
regulation and its agreement with the MFCU, was not referring to the MFCU 
all cases of suspected fraud it identified.20  Instead, the audit report found 
that SURS referred to the MFCU only credible allegations of fraud that 
were identified based on further investigation by the department and that 
would require SURS to consider imposition of a payment suspension.21, 22  
Specifically, the legislative auditor found that seven cases of suspected 
fraud were not referred to the MFCU.  As result of the legislative auditors 
recommendation to refer all suspected fraud to the MFCU, SURS began to 
refer cases of suspected provider fraud.  This led to the increase in referrals 
to the MFCU in FY 2018 (from two in FY 2017 to five in FY 2018). 
As a second reason for the low number of referrals from SURS, both Unit 
and SURS management reported that a 2017 Montana law limited fraud 
referrals by restricting SURS to a 6-month look back period when 
conducting an initial Medicaid overpayment audit.  Specifically, they stated 
that SURS can only request up to 6 months of records from a provider for 
 
19 From FYs 2010 through 2012, the Unit received only seven fraud referrals from SURS, 
including only one referral in FY 2012. 
20 Under the terms of the MOU between the Montana Department of Justice and DPHHS, 
DPHHS will, at the earliest practical opportunity in its preliminary investigation, advise the 
MFCU of any suspected fraud, as provided in 42 CFR 455.21(a)(1).   
21 Montana Legislative Audit Division, Report 17-14: Montana Financial-Compliance Audit:  
Department of Public Health and Human Services for the Two Fiscal Years Ended June 30, 2017, 
https://leg.mt.gov/content/Publications/Audit/Report/17-14.pdf.  Accessed on September 20, 
2019.  
22 Regulations enforced by Centers for Medicare & Medicaid Services require State Medicaid 
agencies to refer both suspected provider fraud and credible allegations of fraud to 
MFCUs.  42 CFR 455.21(a)(1) and 455.23(d).  The regulations do not define suspected 
provider fraud.  The regulations define credible allegation of fraud at 42 CFR 455.2 as an 
allegation that has been verified by the State from any source, including fraud hotline 
complaints; claims data mining; and patterns identified through provider audits, civil false 
claims cases, and law enforcement investigations.  Allegations are considered credible when 
they have indicia of reliability and the Medicaid agency has reviewed all allegations, facts, 
and evidence carefully and acts judiciously on a case-by-case basis. 
 
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claims paid by Medicaid up to 3 years before the request was made. 23, 24  
SURS management reported that being able to review just 6 months of 
records made it challenging to identify trends in the data and possible 
fraudulent activity, thus limiting the number of referrals made to the Unit.  
 
STANDARD 5  A Unit takes steps to maintain a continuous case flow and to complete 
cases in an appropriate timeframe based on the complexity of the 
cases. 
 
 
Observation  Nearly all case files contained documentation of supervisory approval 
to open, and, as appropriate, all contained supervisory approval to 
close.  Ninety-eight percent of case files contained documentation of 
supervisory approval to open them.  All cases that were closed at the time 
of our review (66 percent) contained documentation of supervisory 
approval to close them.  This observation reflects significant improvement 
from the 2012 onsite review, which found that 40 percent of closed case 
files lacked documentation of approval to close them.  
 
STANDARD 6  A Units case mix, as practicable, covers all significant provider types 
  and includes a balance of fraud and, where appropriate, patient 
abuse and neglect cases. 
 
Observation  The Units case mix included both cases of fraud and cases of patient 
abuse or neglect, covering a number of provider types; the Unit 
focused its resources on criminal rather than civil cases.  Of the 143 
cases that were open from FY 2016 to FY 2018, 81 percent (116 cases) 
involved provider fraud and 19 percent (27 cases) involved patient abuse or 
neglect.  At the end of FY 2018, the Units open cases covered 20 different 
provider types.  The most common provider types were pharmaceutical 
manufacturers, personal care services attendants, and psychologists, 
representing 48 of the Units 81 open cases.   
The Unit focused its resources on criminal cases rather than civil cases.  
From FY 2016 to FY 2018, the Unit opened just two civil cases that were not 
 
23 Montana Code Annotated 53-6-1402(3)(a).  
24 Montana Code Annotated 53-6-1402(3)(b).  If the audit demonstrates a significant error 
rate from the initial overpayment audit, the department (DPHHS SURS) or the auditor with 
the departments approval may request additional records related to the issue under review 
for purposes of a followup audit. 
 
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global cases.25  Performance Standard 6(e) states that as part of its case mix, 
a Unit seek to maintain, consistent with legal authorities, a balance of 
criminal and civil fraud cases.  Unit management and staff reported that the 
Unit did not have the resources or expertise to litigate provider fraud civilly 
within the Unit.  However, the director stated that the Unit would refer a civil 
case to the U.S. Attorneys Office (USAO) if the restitution amount met the 
USAOs threshold for prosecution.  The Unit worked the two nonglobal civil 
cases opened during the review period jointly with OIG and USAO. 
 
STANDARD 7  A Unit maintains case files in an effective manner and develops a case 
  management system that allows efficient access to case information 
and other performance data. 
 
FOinbdsienrgv ation  The Unit lacked a central repository for case information, making access 
to case data and pertinent case documents inefficient.  Performance 
Standard 7 states that a Unit should maintain case files in an effective 
manner; develop a case management system that allows efficient access to 
case information and other performance data; and maintain case files in an 
effective manner.  The Units approaches to maintaining basic case 
information and to maintaining electronic case files differed from each 
other; we discuss each of them below. 
The Unit used several repositories for tracking case information and other 
performance data, rather than a consolidated information management 
system.  Performance Standards 7(e) and 7(f) state that a Unit have an 
information management system that manages and tracks case information 
from initiation to resolution, and that this system allow for the monitoring 
and reporting of case information.  The Unit director maintained a Microsoft 
Access database to track basic information about casesthe case number; 
the referral source and date; the case status (open/closed); the case type 
and provider type; and the date that the case opened and closed.  The 
outcomes of cases were not included in this database.  Rather, the Unit 
director reported using multiple spreadsheets designed to track the 
outcomes of cases, such as convictions, indictments, and monetary 
recoveries.26  For example, one such spreadsheet, which tracked court-
ordered restitution requirements and defendant payments, was maintained 
by the Units auditor. 
 
25 Global cases are civil false claims actions that involve the U.S. Department of Justice and a 
group of State MFCUs.  The Montana MFCU participated in 47 global cases during the review 
period. 
26 The Unit used the Microsoft Access database and the spreadsheets to report summary 
case information to OIG, pursuant to 42 CFR 1007.17(a)(2) and Performance Standard 7(f). 
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The Units electronic case files, maintained in a folder system on a shared 
drive, did not permit efficient access to important case documents.  
According to the Units policies and procedures manual, the Units 
electronic case files consisted of groups of folders on the shared drive filed 
under Unit employees names.  When OIG conducted its review of the Units 
case files, reviewers located some case documents in folders under 
investigators names, per the policies and procedures manual.  However, 
OIG reviewers also found that, depending on the age of the investigation 
and case type, some portions of case files were stored in other folders (of 
which there were several different types).  OIG reviewers had trouble 
locating case documents, such as subpoenas, court documents, and 
investigative reports, because no single folder existed for each case.  
Because of the lack of a single folder for each case as well as the lack of a 
case index or log, reviewers had difficulty determining the status of the case 
and understanding the case in its entirety.  OIG reviewers also observed that 
this folder system would make it difficult to determine whether the Unit had 
received a prior complaint about a new suspect. 
At the time of our inspection, the Units parent division, DCI, was planning 
to implement a centralized case management system across the division at 
some point in 2019.  After our inspection, the director reported the Unit was 
evaluating what case information could be entered into the new system and 
what information would need to be tracked separately for reporting 
requirements.  The director also reported that the Unit would enter all 
investigative and audit work for open cases into the new system. 
The Units practices for conducting periodic supervisory review were 
Finding 
not fully reflected in its policies and procedures manual.  Performance 
Standard 7(a) states that supervisory reviews should be conducted 
periodically, consistent with MFCU policies and procedures, and noted in 
the case file.  The Units policies and procedures manual, in describing the 
process for reviewing case files, stated that the Unit director electronically 
maintained a case progress review form that included the date of the case 
progress review meetings and tracked investigative and audit activity for 
each open case.  The manual further stated that when the director closed a 
case, she signed the form and placed it in the original paper case file.  
The policies and procedures manual did not describe the frequency of the 
meetings or identify the meeting participants.  The Unit director reported 
that the case review occurred as part of staff meetings held on a monthly to 
bimonthly basis.  Because the Units policy and procedures manual did not 
include a specific frequency for periodic supervisory case reviews, in our 
review of case files, we considered whether the Unit conducted and 
documented case reviews on a bimonthly basis, consistent with the Units 
usual practices in reviewing case files.  We found that 98 percent of case 
files contained documentation of at least one supervisory review.  However, 
52 percent of these lacked regular, bimonthly documentation of reviews.  Of 
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the case files in our sample that lacked documentation of regular, bimonthly 
review, most gaps between reviews ranged from 3 to 5 months.  OIGs 2012 
onsite review of the Unit also found that case files lacked documentation of 
supervisory reviews and recommended that the Unit ensure that periodic 
supervisory reviews be documented.27  In response, the Unit adopted the 
case review progress form and clarified in its policies and procedures that 
the director was responsible for documenting the reviews.  
Periodic supervisory review of cases can help ensure the timely completion 
of cases, and documenting those reviews in the case files can help ensure 
that cases are properly managed.  However, in OIGs experience, conducting 
and documenting official case file reviews as frequently as monthly or 
bimonthly may present an unwarranted burden on the investigators, as well 
as the director, who has the responsibility of documenting the reviews.  A 
schedule with less frequent case file reviews would not preclude the Unit 
from continuing to meet monthly or bimonthly to discuss cases. 
 
STANDARD 8  A Unit cooperates with OIG and other Federal agencies in the 
  investigation and prosecution of Medicaid and other health care fraud. 
 
The Unit investigated cases jointly with OIG.  During the review period, 
Observations 
the Unit reported working six joint cases with OIG.  Although OIG did not 
  have a special agent based in Montana during the review period, the Unit 
worked joint cases with a special agent from another State.  In late 
September 2018, an OIG agent was stationed in Helena.  At the time of our 
inspection in April 2019, Unit management and staff reported that having a 
local OIG agent was a positive development which had led to increased 
communication and interaction. 
 
The Unit reported all convictions and adverse actions during the review 
period to Federal partners within appropriate timeframes.  Performance 
Standard 8(f) states that the Unit should transmit information on convictions 
to OIG within 30 days of sentencing so that convicted individuals can be 
excluded from Federal health care programs.28  The Unit reported all 17 
convictions during the review period within 30 days.  This observation 
reflects significant improvement from the 2012 onsite review, which found 
that the Unit did not report any of its six sentenced providers to OIG within 
 
27 The 2012 onsite review found that 65 percent of case files lacked documentation of 
periodic supervisory reviews. 
28 Effective May 21, 2019, 42 CFR 1007.11(g) requires the Unit to transmit information on 
convictions within 30 days of sentencing, or as soon as practicable if the Unit encounters 
delays in receiving the necessary information from the court. 
 
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the appropriate timeframe.  Additionally, Federal regulations require that 
Units report any adverse actions resulting from investigations or prosecution 
of healthcare providers to the NPDB within 30 calendar days of the date of 
the final adverse action.29  Performance Standard 8(g) states that the Unit 
should report qualifying cases to the NPDB.30  During the review period, the 
Unit reported 17 adverse actions; all were reported within 30 days of the 
qualifying action.  
 
STANDARD 9  A Unit makes statutory or programmatic recommendations, when 
  warranted, to the State government. 
 
Observation  The Unit made recommendations to the Medicaid agency.  Performance 
Standard 9(b) states that the Unit, when warranted and appropriate, make 
recommendations regarding program integrity issues to the Medicaid 
agency.  During the review period, the Unit recommended to DPHHS that 
fraud prevention be included as part of training being developed for home 
care agencies to provide to caregivers and home care consumers.  DPHHS 
adopted the MFCUs recommendation, and now includes fraud prevention 
as part of home health training.  The Unit also recommended, as a result of 
a Unit case, that DPHHS require home care agencies to more frequently 
observe the care provided by home care workers than the current 
requirement of every 180 days.  The Unit reported that it had not received a 
response from DPHHS to that recommendation. 
 
STANDARD 10  A Unit periodically reviews its Memorandum of Understanding (MOU) 
with the State Medicaid agency to ensure that it reflects current 
practice, policy, and legal requirements. 
 
Observation  The Units MOU with the Medicaid agency reflected current practice, 
policy, and legal requirements.  The Montana Department of Justice and 
DPHHS had a current MOU, amended on May 1, 2018.  The MOU reflected 
 
all policy and legal requirements as well as the current practices between 
the parties, including addressing referrals of both suspected fraud and 
credible allegations of fraud to the MFCU.  
 
 
29 45 CFR 60.5.  Examples of adverse actions include but are not limited to convictions, civil 
judgments (but not civil settlements), and program exclusions.  See SSA  1128E(a) and (g)(1). 
30 The NPDB is intended 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 and adverse actions. 
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STANDARD 11  A Unit exercises proper fiscal control over its resources. 
 
 
Based on our limited review, we identified no deficiencies in the Units 
Observation 
fiscal control of its resources.  From the responses to a detailed 
questionnaire about fiscal controls and interviews with fiscal staff, we 
identified no issues related to the Units budget process, accounting system, 
cash management, procurement, electronic data security, property, or 
personnel.  In our inventory review, we located 30 of the 30 sampled 
inventory items.  
 
STANDARD 12  A Unit conducts training that aids in the mission of the Unit. 
 
 
Observation  The Unit maintained a training plan and offered staff in-service 
 
briefings on the Unit mission and function.  The Unit had a training 
plan for its investigators, attorney, and auditors pursuant to Performance 
Standard 12(a), which states that the Unit maintain a training plan that 
includes an annual minimum number of training hours and is at least as 
stringent as required for professional certification.  During State FYs 2016 
to 2018, Unit staff in the professional disciplines generally met or 
exceeded the minimum number of training hours required by the Unit 
training plan.  (The Units annual training plan requires 20 hours every 2 
years for investigators and 15 hours every year for attorneys and 
auditors.)   
The Unit offered staff in-service briefings on topics related to the mission 
and function of the Unit, including evidence handling; Miranda warnings; 
search and seizure (including investigative subpoenas); relevant legal 
authority, as contained in the Montana Code Annotated and the 
Administrative Rules of Montana; and investigations of cases of home 
health care fraud, elder abuse, and financial exploitation.     
 
 
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CONCLUSION AND RECOMMENDATIONS 
Based on the information we reviewed, we found that the Montana Unit 
complied with applicable legal requirements and generally adhered to 
performance standards, but we identified two areas in which the Unit should 
improve its adherence to Performance Standard 7, related to case 
information.  We found that the Unit lacked a central repository for case 
information, making access to case data and pertinent case documents 
inefficient.  We also found that the Units practices for conducting periodic 
supervisory review were not fully reflected in its policies and procedures 
manual.     
We also observed that the Unit received few fraud referrals from SURS.  We 
encourage the Unit to continue to take steps to encourage an adequate 
volume and quality of referrals from SURS.    
To address the two findings, we recommend that the Montana Unit: 
Implement a comprehensive case management system that 
allows for efficient access to case documents and information.  
The Unit reported that it will be adopting a new division-wide case 
management system in 2019.  We recommend that the Unit, in adopting the 
system or another alternative, ensure that the system store both case 
documents and case information.  The Unit should also develop procedures 
regarding roles and responsibilities for maintaining case information and 
case documents in the new system.  We believe that such a system would 
improve the Units ability to consistently maintain and retrieve case 
documents; more efficiently report on the status and outcomes of cases; 
and search for prior complaints on new suspects.   
 
Revise its policies and procedures manual to address the 
frequency of its periodic supervisory reviews.  
The Unit should revise its written policies and procedures for conducting 
and documenting periodic supervisory reviews of case files.  The revisions 
should include a specific frequency for conducting such reviews.  As part of 
such revisions, the Unit may wish to consider whether to modify its schedule 
for reviewing case files to make the reviews less frequent, such as quarterly.  
Additionally, the revisions should include any changes to the process of 
documenting supervisory reviews that resulted from implementation of the 
comprehensive case management system.  Finally, the Unit should 
implement processes to ensure that periodic supervisory reviews are 
consistently documented.     
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UNIT COMMENTS AND OIG RESPONSE 
The Montana Unit concurred with both of our recommendations.  
The Unit concurred with our first recommendation to implement a 
comprehensive case management system that allows for efficient access to 
case documents and information.  The Unit stated that the division-wide 
case management system is now online and being integrated into the Units 
practices.  Specifically, the Unit stated that the new system will allow case 
information and documents to be accessible from one access point and will 
allow the Unit to monitor the status of cases from the receipt of the 
complaint to the final disposition.  The Unit also stated that it planned to 
customize the system to generate reports tailored to the reporting 
requirements of OIG, with efforts being made to reduce the need for 
separate spreadsheets to track data.  Finally, the Unit stated that it is 
creating policy and procedures for the roles and responsibilities for 
maintaining case information and case documents within the new system. 
The Unit also concurred with our second recommendation to revise its 
policies and procedures manual to address the frequency of its periodic 
supervisory reviews.  The Unit stated that it is in the process of revising its 
policy regarding supervisory case file reviews, including altering the 
frequency of the reviews to quarterly. 
For the full text of the Units comments, see Appendix E. 
 
 
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APPENDIX A: Medicaid Fraud Control Unit 
Performance Standards31 
1)  A Unit conforms with all applicable statutes, regulations, and policy 
directives, including: 
A)  Section 1903(q) of the Social Security Act, containing the basic 
requirements for operation of a MFCU; 
B)  Regulations for operation of a MFCU contained in 42 CFR part 1007; 
C)  Grant administration requirements at 45 CFR part 92 and Federal cost 
principles at 2 CFR part 225;32 
D)  OIG policy transmittals as maintained on the OIG website; and 
E)  Terms and conditions of the notice of the grant award. 
2)  A Unit maintains reasonable staff levels and office locations in relation 
to the States Medicaid program expenditures and in accordance with 
staffing allocations approved in its budget. 
A)  The Unit employs the number of staff that is included in the Units budget 
estimate as approved by OIG. 
B)  The Unit employs a total number of professional staff that is commensurate 
with the States total Medicaid program expenditures and that enables the 
Unit to effectively investigate and prosecute (or refer for prosecution) an 
appropriate volume of case referrals and workload for both Medicaid fraud 
and patient abuse and neglect. 
C)  The Unite employs an appropriate mix and number of attorneys, auditors, 
investigators, and other professional staff that is both commensurate with 
the States total Medicaid program expenditures and that allows the Unit to 
effectively investigate and prosecute (or refer for prosecution) an 
appropriate volume of case referrals and workload for both Medicaid fraud 
and patient abuse and neglect. 
D)  The Unit employs a number of support staff in relation to its overall size 
that allows the Unit to operate effectively. 
E)  To the extent that a Unit maintains multiple office locations, such locations 
are distributed throughout the State, and are adequately staffed, 
commensurate with the volume of case referrals and workload for each 
location. 
3)  A Unit establishes written policies and procedures for its operations and 
ensures that staff are familiar with, and adhere to, policies and 
procedures. 
A)  The Unit has written guidelines or manuals that contain current policies and 
procedures, consistent with these performance standards, for the 
investigation and (for those Units with prosecutorial authority) prosecution 
of Medicaid fraud and patient abuse and neglect. 
 
31 77 Fed. Reg. 32645 (June 1, 2012). 
32 For FYs 2016 and later, grant administration requirements are found at 45 CFR part 75. 
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B)  The Unit adheres to current policies and procedures in its operations. 
C)  Procedures include a process for referring cases, when appropriate, to 
Federal and State agencies.  Referrals to State agencies, including the State 
Medicaid agency, should identify whether further investigation or other 
administrative action is warranted, such as the collection of overpayments 
or suspension of payments. 
D)  Written guidelines and manuals are readily available to all Unit staff, either 
online or in hard copy. 
E)  Policies and procedures address training standards for Unit employees. 
4)  A Unit takes steps to maintain an adequate volume and quality of 
referrals from the State Medicaid agency and other sources. 
A)  The Unit takes steps, such as the development of operational protocols, to 
ensure that the State Medicaid agency, managed care organizations, and 
other agencies refer to the Unit all suspected provider fraud cases.  
Consistent with 42 CFR 1007.9(g), the Unit provides timely written notice to 
the State Medicaid agency when referred cases are accepted or declined 
for investigation. 
B)  The Unit provides periodic feedback to the State Medicaid agency and 
other referral sources on the adequacy of both the volume and quality of 
its referrals. 
C)  The Unit provides timely information to the State Medicaid or other agency 
when the Medicaid or other agency requests information on the status of 
MFCU investigations, including when the Medicaid agency requests 
quarterly certification pursuant to 42 CFR 455.23(d)(3)(ii). 
D)  For those States in which the Unit has original jurisdiction to investigate or 
prosecute patient abuse and neglect cases, the Unit takes steps, such as the 
development of operational protocols, to ensure that pertinent agencies 
refer such cases to the Unit, consistent with patient confidentiality and 
consent.  Pertinent agencies vary by State but may include licensing and 
certification agencies, the State Long Term Care Ombudsman, and adult 
protective services offices. 
E)  The Unit provides timely information, when requested, to those agencies 
identified in (D) above regarding the status of referrals. 
F)  The Unit takes steps, through public outreach or other means, to 
encourage the public to refer cases to the Unit. 
5)  A Unit takes steps to maintain a continuous case flow and to complete 
cases in an appropriate timeframe based on the complexity of the cases. 
A)  Each stage of an investigation and prosecution is completed in an 
appropriate timeframe. 
B)  Supervisors approve the opening and closing of all investigations and 
review the progress of cases and take action as necessary to ensure that 
each stage of an investigation and prosecution is completed in an 
appropriate timeframe. 
C)  Delays to investigations and prosecutions are limited to situations imposed 
by resource constraints or other exigencies. 
6)  A Units case mix, as practicable, covers all significant providers types 
and includes a balance of fraud and, where appropriate, patient abuse 
and neglect cases. 
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A)  The Unit seeks to have a mix of cases from all significant provider types in 
the State. 
B)  For those States that rely substantially on managed care entities for the 
provision of Medicaid services, the Unit includes a commensurate number 
of managed care cases in its mix of cases. 
C)  The Unit seeks to allocate resources among provider types based on levels 
of Medicaid expenditures or other risk factors.  Special Unit initiatives may 
focus on specific provider types. 
D)  As part of its case mix, the Unit maintains a balance of fraud and patient 
abuse and neglect cases for those States in which the Unit has original 
jurisdiction to investigate or prosecute patient abuse and neglect cases. 
E)  As part of its case mix, the Unit seeks to maintain, consistent with its legal 
authorities, a balance of criminal and civil fraud cases. 
7)  A Unit maintains case files in an effective manner and develops a case 
management system that allows efficient access to case information and 
other performance data. 
A)  Reviews by supervisors are conducted periodically, consistent with MFCU 
policies and procedures, and are noted in the case file. 
B)  Case files include all relevant facts and information and justify the opening 
and closing of the cases. 
C)  Significant documents, such as charging documents and settlement 
agreements, are included in the file. 
D)  Interview summaries are written promptly, as defined by the Units policies 
and procedures. 
E)  The Unit has an information management system that manages and tracks 
case information from initiation to resolution. 
F)  The Unit has an information management system that allows for the 
monitoring and reporting of case information, including the following: 
1)  The number of cases opened and closed and the reason that 
cases are closed. 
2)  The length of time taken to determine whether to open a case 
referred by the State Medicaid agency or other referring 
source. 
3)  The number, age, and types of cases in the Units 
inventory/docket. 
4)  The number of referrals received by the Unit and the number 
of referrals by the Unit to other agencies. 
5)  The dollar amount of overpayments identified. 
6)  The number of cases criminally prosecuted by the Unit or 
referred to others for prosecution, the number of individuals 
or entities charged, and the number of pending prosecutions. 
7)  The number of criminal convictions and the number of civil 
judgments. 
8)  The dollar amount of fines, penalties, and restitution ordered 
in a criminal case and the dollar amount of recoveries and the 
types of relief obtained through civil judgments or prefiling 
settlements. 
 
 
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8)  A Unit cooperates with OIG and other Federal agencies in the 
investigation and prosecution of Medicaid and other health care fraud. 
A)  The Unit communicates on a regular basis with OIG and other Federal 
agencies investigating or prosecuting health care fraud in the State. 
B)  The Unit cooperates and, as appropriate, coordinates with OIGs Office of 
Investigations and other Federal agencies on cases being pursued jointly, 
case involving the same suspects or allegations, and cases that have been 
referred to the Unit by OIG or another Federal agency. 
C)  The Unit makes available, to the extent authorized by law and upon request 
by Federal investigators and prosecutors, all information in its possession 
concerning provider fraud or fraud in the administration of the Medicaid 
program. 
D)  For cases that require the granting of extended jurisdiction to investigate 
Medicare or other Federal health care fraud, the Unit seeks permission 
from OIG or other relevant agencies under procedures as set by those 
agencies. 
E)  For cases that have civil fraud potential, the Unit investigates and 
prosecutes such cases under State authority or refers such cases to OIG or 
the U.S. Department of Justice. 
F)  The Unit transmits to OIG, for purposes of program exclusions under 
section 1128 of the Social Security Act, all pertinent information on MFCU 
convictions within 30 days of sentencing, including charging documents, 
plea agreements, and sentencing orders. 
G)  The Unit reports qualifying cases to the Healthcare Integrity & Protection 
Databank, the National Practitioner Data Bank, or successor data bases. 
9)  A Unit makes statutory or programmatic recommendations, when 
warranted, to the State government. 
A)  The Unit, when warranted and appropriate, makes statutory 
recommendations to the State legislature to improve the operation of the 
Unit, including amendments to the enforcement provisions of the State 
code. 
B)  The Unit, when warranted and appropriate, makes other regulatory or 
administrative recommendations regarding program integrity issues to the 
State Medicaid agency and to other agencies responsible for Medicaid 
operations or funding.  The Unit monitors actions taken by the State 
legislature and the State Medicaid or other agencies in response to 
recommendations. 
10)  A Unit periodically reviews its Memorandum of Understanding (MOU) 
with the State Medicaid agency to ensure that it reflects current 
practice, policy, and legal requirements. 
A)  The MFCU documents that it has reviewed the MOU at least every 5 years, 
and has renegotiated the MOU as necessary, to ensure that it reflects 
current practice, policy, and legal requirements. 
B)  The MOU meets current Federal legal requirements as contained in law or 
regulation, including 42 CFR 455.21, Cooperation with State Medicaid 
fraud control units, and 42 CFR 455.23, Suspension of payments in cases 
of fraud. 
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C)  The MOU is consistent with current Federal and State policy, including any 
policies issued by OIG or the Centers for Medicare & Medicaid Services 
(CMS). 
D)  Consistent with Performance Standard 4, the MOU establishes a process to 
ensure the receipt of an adequate volume and quality of referrals to the 
Unit from the State Medicaid agency. 
E)  The MOU incorporates by reference the CMS Performance Standard for 
Referrals of Suspected Fraud From a State Agency to a Medicaid Fraud 
Control Unit. 
11)  A Unit exercises proper fiscal control over Unit resources. 
A)  The Unit promptly submits to OIG its preliminary budget estimates, 
proposed budget, and Federal financial expenditure reports. 
B)  The Unit maintains an equipment inventory that is updated regularly to 
reflect all property under the Units control. 
C)  The Unit maintains an effective time and attendance system and personnel 
activity records. 
D)  The Unit applies generally accepted accounting principles in its control of 
Unit funding. 
E)  The Unit employs a financial system in compliance with the standards for 
financial management systems contained in 45 CFR 92.20. 
12)  A Unit conducts training that aids in the mission of the Unit. 
A)  The Unit maintains a training plan for each professional discipline that 
includes an annual minimum number of training hours and that is at least 
as stringent as required for professional certification. 
B)  The Unit ensures that professional staff comply with their training plans and 
maintain records of their staffs compliance. 
C)  Professional certifications are maintained for all staff, including those that 
fulfill continuing education requirements. 
D)  The Unit participates in MFCU-related training, including training offered by 
OIG and other MFCUs, as such training is available and as funding permits. 
E)  The Unit participates in cross-training with the fraud detection staff of the 
State Medicaid agency.  As part of such training, Unit staff provide training 
on the elements of successful fraud referrals and receive training on the 
role and responsibilities of the State Medicaid agency. 
 
   
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APPENDIX B: Detailed Methodology 
Data Collection and Analysis 
We collected and analyzed data from the seven sources below to identify 
any opportunities for improvement and instances in which the Unit did not 
adhere to the performance standards or was not operating in accordance 
with laws, regulations, or policy transmittals.33  We also used the data 
sources to make observations about the Units case outcomes as well as the 
Units operations and practices concerning the performance standards.    
Review of Unit Documentation.  Prior to the onsite inspection, we reviewed 
the recertification analysis for FYs 201618, which involved examining the 
Units recertification materials, including (1) the annual reports, (2) the Unit 
directors recertification questionnaires, (3) the Units MOU with the State 
Medicaid agency (DPHHS), (4) the DPHHS program integrity directors 
questionnaires, and (5) the OIG Special Agent in Charge questionnaires.  We 
also reviewed the Units policies and procedures manual and the Units self-
reported case outcomes and referrals included in its annual statistical 
reports for FYs 201618.  We examined the recommendations from the 2012 
OIG onsite review report and the Units implementation of those 
recommendations.   
Review of Unit Financial Documentation.  We conducted a limited review 
of the Units control over its fiscal resources.  Prior to the onsite review, we 
analyzed the Units response to a questionnaire about internal controls and 
conducted a desk review of the Units financial status reports.  While onsite, 
we followed up with Montana Department of Justice and Unit officials to 
clarify issues identified in the questionnaire about internal controls.  We also 
selected a purposive sample of 30 items from the current inventory list of 
275 items maintained in the Units office and verified those items onsite. 
Interviews With Key Stakeholders.  In February and March 2019, we 
interviewed key stakeholders, including officials in DPHHS, Adult Protective 
Services, and USAO.  We also interviewed the managers and special agents 
from OIGs Office of Investigations who work regularly with the Unit.  We 
focused these interviews on the Units relationship and interaction with the 
stakeholders, as well as opportunities for improvement.  We used the 
information collected from these interviews to develop subsequent 
interview questions for Unit management and staff. 
Onsite Interviews With Unit Management and Selected Staff.  We 
conducted structured onsite interviews with the Units management and 
select staff in April 2019.  We interviewed the Unit director, the attorney, two 
 
33 All relevant regulations, statutes, and policy transmittals are available online at 
https://oig.hhs.gov/fraud/medicaid-fraud-control-units-mfcu/index.asp.  
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auditors, and three investigators.  In addition, we interviewed the supervisor 
of the Unitthe bureau chief of DCI.  We asked these individuals questions 
related to: (1) Unit operations; (2) Unit practices that contributed to the 
effectiveness and efficiency of Unit operations and/or performance; (3) 
opportunities for the Unit to improve its operations and/or performance; (4) 
clarification regarding information obtained from other data sources; and 
(5) the Units training and technical assistance needs.   
Onsite Review of Case Files.  To craft a sampling frame, we requested that 
the Unit provide us with a list of cases that were open at any time during 
FYs 2016 through 2018 and include the status of the case; whether the case 
was criminal, civil, or global; and the dates on which the case was opened 
and closed, if applicable.  The total number of cases was 143.   
We excluded all global cases from our review of the Units case files because 
global cases are civil false claims actions that typically involve multiple 
agencies, such as the U.S. Department of Justice and a group of State 
MFCUs.  We excluded 47 global cases, leaving 96 case files.   
We then selected a simple random sample of 56 cases from the population 
of 96 cases.  This sample allowed us to make estimates of the overall 
percentage of case files with various characteristics with an absolute 
precision of +/- 10 percent at the 95-percent confidence level.  We reviewed 
the 56 case files for adherence to the relevant performance standards and 
compliance with statute, regulation, and policy transmittals.  During the 
onsite review of the sampled cases, we consulted MFCU staff to address any 
apparent issues with individual case files, such as missing documentation.  
Review of Unit Submissions to the Office of Inspector General and the 
National Practitioner Data Bank.  We also reviewed all convictions 
submitted to OIG during the review period so that convicted individuals 
could be excluded from programs (17) and all adverse actions submitted to 
the NPDB during the review period (17).  We reviewed whether the Unit 
submitted information on all sentenced individuals and entities to OIG for 
program exclusion and all adverse actions to the NPDB for FYs 201618.  We 
also assessed the timeliness of the submissions to OIG and the NPDB.   
Onsite Review of Unit Operations.  During the onsite inspection, we 
observed the workspace and operations of the Units office in Helena.  We 
observed the Units offices and meeting spaces; security of data and case 
files; location of select equipment; and general functioning. 
   
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APPENDIX C: Unit Referrals by Source for Fiscal 
Years 2016 Through 2018 
  FY 2016  FY 2017  FY 2018  Grand Totals  
Fraud  Abuse or  Fraud  Abuse or  Fraud  Abuse or  Fraud  Abuse or 
Referral Source 
Neglect  Neglect  Neglect  Neglect 
Adult Protective 
2  1  1  1  1  3  4  5 
Services 
HHS OIG  2  0  5  0  4  1  11  1 
Law enforcement
5  2  4  2  1  2  10  6 
other  
Local prosecutor  1  0  5  1  0  1  6  2 
Medicaid agency
1  0  2  0  5  0  8  0 
PI/SURS1 
Medicaid agency
4  0  0  1  0  0  4  1 
other 
Private citizen  36  5  20  4  25  1  81  10 
Private health 
1  0  2  0  1  0  4  0 
insurer 
Provider  21  4  9  2  12  2  42  8 
State agency
1  0  0  1  1  1  2  2 
other 
State survey and 
0  0  0  1  0  0  0  1 
certification agency  
Other2  14  0  29  0  17  0  60  0 
     Total  88  12  77  13  67  11  232  36 
     Annual Total  100  90  78  268 
Source: OIG analysis of Unit Annual Statistical Reports, FYs 201618. 
1 The abbreviation PI stands for program integrity; the abbreviation SURS in Montana stands for Surveillance and Utilization Review. 
2 All 60 Other referrals are global cases from the National Association of Medicaid Fraud Control Units. 
   
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APPENDIX D: Point Estimates and 95-Percent 
Confidence Intervals of Case File Reviews 
 
95-Percent Confidence 
Point 
 Estimate Description  Sample Size   Interval 
Estimate 
Lower  Upper 
Percentage of All Cases Closed at the Time 
56  66.1%  56.3%  75.0% 
of Our Review 
Percentage of All Cases That Had 
56  98.2%  92.7%  99.0% 
Supervisory Approval To Open 
Percentage of All Closed Cases That Had 
37  100%  92.1%  100% 
Supervisory Approval To Close  
Percentage of All Cases Open Longer Than 
56  98.2%  92.7%  99.0% 
60 Days 
Percentage of All Case Files Open Longer 
Than 60 Days and That Contained at Least  55  98.2%  92.6%  98.9% 
One Periodic Supervisory Review 
Percentage of All Case Files Open Longer 
Than 60 Days and That Contained Some 
54  51.9%  41.9%  61.3% 
Periodic Supervisory Review, But Not 
Bimonthly Supervisory Review 
Source: OIG analysis of Montana MFCU case files, 2019. 
   
Montana Medicaid Fraud Control Unit: 2019 Onsite Inspection  25 
OEI-12-19-00170 
   
APPENDIX E: Unit Comments 
DIVISION OF CRIMINAL INVESTIGATION 
DEPARTMENT OF JUSTICE 
STATE OF MONTANA 
TIM FOX                  Medicaid Fraud Control Unit 
Attorney General                 PO Box 201417 
                    2225 Eleventh Avenue 
                    Helena, MT 59620-1417 
                     
 
 
March 10, 2020 
 
Suzanne Murrin 
Deputy Inspector General 
for Evaluation and Inspections 
Office of Inspector General 
Department of Health and Human Services 
 
RE: OEI-12-19-00170 
 
Dear Ms. Murrin, 
 
Thank you for you and your teams efforts in assisting the Montana Medicaid Fraud Control Unit 
(MFCU) in its pursuit to protect Montanas most vulnerable citizens and ensure the viability of and 
access to our states Medicaid program. As a result of the HHS OIG 2019 on site audit, two 
recommendations were brought to our attention. 
 
The first recommendation was for the MFCU to implement a comprehensive case management system 
that allows for efficient access to case documents and information. The MFCU concurs with the 
recommendation and as noted in the Montana Medicaid Fraud Control Unit: 2019 Onsite Inspection 
report, the Division of Criminal Investigation was in the process of adopting a division-wide case 
management system. At the time of the composition of this letter, the system has gone online and is 
being integrated into the MFCUs practices. The process of transitioning from the electronic file and 
hardcopy folder system to the new records management system is going to take time, but we are 
confident that HHS OIGs recommendation will be met. 
 
The records management system will allow case information and documents to be accessible from one 
access point. We will have the ability to monitor the status of case reports from receipt of the complaint 
to the final disposition. The system also allows for the generation of reports based upon a wide variety 
of search criteria including but not limited to the case number, case status, case type, date, individual, 
location, etc. The system allows for a degree of customization. With that in mind, we plan on altering 
some of the reporting options within the system to allow the unit supervisor to generate reports tailored  
 
Montana Medicaid Fraud Control Unit: 2019 Onsite Inspection  26 
OEI-12-19-00170 
   
to the reporting requirements of HHS OIG. These changes are currently in progress and will hopefully 
be completed within the coming months. 
 
Creation of policy and procedures concerning the roles and responsibilities for maintaining case 
information and case documents within the records management system are also in progress. It is too 
early to determine with certainty if the system will eliminate the need for all spreadsheets used to track 
various performance standards and parameters within the MFCU, but efforts to reduce them are being 
made. 
 
The second recommendation was for the MFCU to revise its policies and procedures manual to address 
the frequency of its periodic supervisory review of case files. The MFCU concurs with the 
recommendation and is in the process of not only revising our policy regarding supervisory case file 
reviews, but multiple additional policies that have been affected by procedural and personnel changes 
within the unit. As you may have observed during the review of our policies and case files during the 
onsite audit, a case review document was used when the supervisory reviews took place. We plan to 
continue with the use of this tool as our means of documentation. Due to the nature and length of time 
that medical fraud investigations encompass, we feel that monthly supervisory case reviews are 
cumbersome and unnecessary. Therefore, we plan on altering the frequency of supervisory case reviews 
to quarterly. We anticipate this process to be completed within the coming months. 
 
I hope that this letter serves as an acceptable response to the recommendations of HHS OIG. If you have 
any questions or concerns, please do not hesitate to contact me. 
 
 
                Sincerely, 
                 
                Loren Mardis, Director 
                Montana MFCU 
 
   
Montana Medicaid Fraud Control Unit: 2019 Onsite Inspection  27 
OEI-12-19-00170 
   
ACKNOWLEDGMENTS 
Susan Burbach of the Medicaid Fraud Policy and Oversight Division served 
as the team leader for this inspection.  Keith Peters of the Medicaid Fraud 
Policy and Oversight Division also participated in the inspection.  Two 
agents from the Office of Investigations also participated in the inspection.  
Office of Evaluation and Inspections staff who provided support include 
Kevin Farber and Frank Rogers.   
This report was prepared under the direction of Richard Stern, Director of 
the Medicaid Fraud Policy and Oversight Division.   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
To obtain additional information concerning this report or to obtain copies, 
contact the Office of Public Affairs at Public.Affairs@oig.hhs.gov
Montana Medicaid Fraud Control Unit: 2019 Onsite Inspection  28 
OEI-12-19-00170 
   
ABOUT THE OFFICE OF INSPECTOR GENERAL 
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  The Office of Audit Services (OAS) provides auditing services for HHS, either 
by conducting audits with its own audit resources or by overseeing audit 
Services 
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  The Office of Evaluation and Inspections (OEI) conducts national evaluations 
to provide HHS, Congress, and the public with timely, useful, and reliable 
and Inspections 
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  The Office of Investigations (OI) conducts criminal, civil, and administrative 
investigations of fraud and misconduct related to HHS programs, 
Investigations 
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 Office of Counsel to the Inspector General (OCIG) provides general 
legal services to OIG, rendering advice and opinions on HHS programs and 
the Inspector 
operations and providing all legal support for OIGs internal operations.  
General 
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.