Department  of Health and Human  Services 
OFFICE OF 
  
INSPECTOR GENERAL 
 
 
 
 
 
 
 
 
O S M
KLAHOMA  TATE  EDICAID 
 
F C U :  
RAUD  ONTROL  NIT   
 
 
2014 O R  
  NSITE  EVIEW
 
   
 
 
 
 
 
 
   
   
     
   
   
 
 
 
 
Suzanne Murrin 
Deputy Inspector  General   
for Evaluation  and Inspections 
 
April 2016 
OEI-06-14-00630   
   
EXECUTIVE SUMMARY:  OKLAHOMA STATE MEDICAID FRAUD CONTROL UNIT:  
2014 ONSITE REVIEW  
OEI-06-14-00630 
 
WHY WE DID THIS STUDY  
 
The Office of Inspector General (OIG) oversees the activities  of all Medicaid Fraud Control Units 
(MFCUs or Units).   As part of this oversight,  OIG conducts periodic reviews of all Units and 
prepares public reports based on these reviews.  The reviews assess Unit performance  in accordance 
with the 12 MFCU performance  standards and monitor  compliance  with Federal grant requirements. 
 
HOW WE DID THIS STUDY 
 
We conducted an onsite review  of the Oklahoma Unit  in December 2014.  We based our review on 
an analysis  of data from seven sources:  (1) a review of policies,  procedures, and documentation 
related to the Units operations, staffing,  and caseload for fiscal  years (FYs) 2012 through  2014; 
(2) a review of financial  documentation  for FYs 2012 through  2014; (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 files  for cases that were open FYs 2012 
through  2014 ; and (7) an onsite observation  of Unit  operations.   
 
WHAT WE FOUND 
 
For FYs 2012 through  2014, the Oklahoma Unit reported 56 criminal  convictions,  51 civil 
judgments  and settlements,  and recoveries of nearly $66 million.   During  the same period, the State 
Medicaid agencys  Program Integrity  Unit (PIU) sent few fraud referrals  to the Unit in FYs 2013 
and 2014, despite Unit efforts to increase referrals.  We identified  opportunities  for improvement  in 
adhering  to the MFCU performance  standards.  Specifically,  we found that 42 percent of Unit case 
files  for cases that had been open longer than 90 days lacked documentation  of periodic supervisory 
review.  Additionally,  the Unit  did not report all convictions  and adverse actions  to Federal partners 
within  required timeframes.   The Unit  also claimed  unallowable  expenditures.   We further  identified 
two instances  in which the Unit did not adhere to Federal policy or requirements.   Specifically,  the 
Unit retained monies for investigative  costs associated with criminal  judgments  and sentencing  and 
claimed  Federal financial  participation  (FFP) for costs associated with  two non-MFCU activities.   
 
WHAT WE RECOMMEND 
 
We recommend  that the Oklahoma Unit (1) continue  its efforts  to  receive an adequate number of 
referrals from the PIU; (2) ensure that supervisors  conduct and document  periodic reviews of case 
files;  (3) implement  processes to ensure that the Unit reports all convictions  and adverse actions to 
Federal partners within  required timeframes;  (4) work with OIG to repay the Federal government 
for FFP claimed  for unallowable  expenditures;  (5) work with the State Medicaid Agency to ensure 
that the Federal share of identified  investigative  cost recoveries related to criminal  judgments  and 
sentencing  is  returned to the Federal government;  and (6) claim  FFP only for MFCU-related 
activities  and work with OIG to determine  the portion of employee  salaries corresponding  to 
non-MFCU activities  and to return the Federal share of that portion to the Federal government.   
The Unit concurred with all six recommendations.
     
   
TABLE OF CONTENTS 
 
Objective ..................................................................................................................1 
Background ..............................................................................................................1 
Methodology ............................................................................................................4 
Findings....................................................................................................................6 
For FYs 2012 through  2014, the Unit reported 56 criminal  convictions,   
51 civil judgments and settlements, and recoveries of nearly $66 million ..6 
The Program Integrity  Unit sent few fraud referrals  to the Unit  in 
FYs 2013 and 2014, despite Unit efforts to increase referrals .....................6 
Forty-two percent of Unit case files  for cases open longer than 90 days 
lacked documentation of periodic supervisory reviews ...............................7 
The Unit did not report all convictions  and adverse actions  to Federal 
partners within required timeframes ............................................................7 
The Unit claimed unallowable expenditures................................................9 
The Unit retained investigative  cost recoveries  related to criminal 
judgments and sentencing ............................................................................9 
The Unit claimed  Federal financial  participation  for costs associated with 
two non-MFCU activities ..........................................................................10 
Conclusion and Recommendations ........................................................................12 
Unit Comments and Office of Inspector General Response ......................14 
Appendixes.............................................................................................................15 
A:  2012 Performance Standards ...............................................................15 
B:  Referrals  of Provider Fraud and Patient Abuse and Neglect to the 
Oklahoma Unit by Source, FYs 2012 Through 2014 ................................19 
C:  Detailed Methodology..........................................................................20 
D:  Fiscal Control Review Findings, FYs 2012 Through 2014 .................23 
E:  Investigations  Opened and Closed by Provider Category and  
Case Type, FYs 2012 Through 2014..........................................................25 
F:  Point Estimates  and Confidence Intervals  Based on Review of Case 
Files ............................................................................................................27  
G:  Unit Comments ....................................................................................28 
Acknowledgments..................................................................................................31 
     
   
OBJECTIVE 
To conduct an onsite review of the Oklahoma  State Medicaid Fraud 
Control Unit (MFCU or Unit). 
BACKGROUND 
The mission  of State MFCUs, as established  by Federal statute, is to 
investigate  and prosecute fraud and patient abuse and neglect by Medicaid 
providers 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   In fiscal  year (FY) 2014, combined  Federal and State 
grant expenditures  for the Units totaled $235 million.3     
To carry out its duties in an effective  and efficient  manner, each Unit must 
employ an interdisciplinary  staff that consists  of at least an attorney, an 
auditor, and an investigator.4   Unit staff review  referrals provided by the 
State Medicaid agency  and other sources and determine  their potential  for 
criminal  prosecution  and/or civil  action.  In FY 2014, the 50 Units 
collectively  reported 1,318 convictions,  874 civil  settlements  or 
judgments,  and recoveries of approximately  $2 billion.5    
Units are required to have either  statewide authority  to prosecute cases or 
formal  procedures to refer suspected criminal  violations  to an agency with 
such authority.6   In Oklahoma and 43 other States, the Units are located 
                        ____________________________________________________________ 
1 Social Security Act (SSA)  1903(q)(3).   Regulations at 42 CFR  1007.11(b)(1)  add 
that the Units responsibilities may include reviewing complaints of misappropriation of 
patients private funds in residential health care facilities. 
2 SSA  1902(a)(61). 
3 Office of Inspector General (OIG),  State Medicaid Fraud Control Units Fiscal Year 
2014 Grant Expenditures and Statistics (January 28, 2015).  Accessed at 
http://oig.hhs.gov/fraud/medicaid-fraud-control-units-mfcu/expenditures_statistics/ 
fy2014-statistical-chart.pdf on March 27, 2015.  All FY references in this report are based 
on the Federal FY (October 1 through September 30). 
4 SSA  1903(q)(6)  and 42 CFR  1007.13. 
5 OIG, State Medicaid Fraud Control Units Fiscal Year 2014 Grant Expenditures and 
Statistics (January 28, 2015).  Accessed at http://oig.hhs.gov/fraud/medicaid-fraud-
control-units-mfcu/expenditures_statistics/fy2014-statistical-chart.pdf on March 27, 
2015.  Recoveries are defined as the amount of money that defendants are required to pay 
as a result of a settlement, judgment, or pre-filing settlement in criminal and civil cases 
and may not reflect actual collections. 
6 SSA  1903(q)(1). 
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  1   
   
within  offices of State Attorneys General  that have this authority.   In the 
remaining  six States, the Units are located in other State agencies; 
generally,  such Units must refer cases to other offices  with prosecutorial 
authority.7   Additionally,  each Unit must be a single,  identifiable  entity of 
State government,  distinct  from the single  State Medicaid agency, and 
each Unit  must develop a formal agreementi.e.,  memorandum  of 
understanding  (MOU)that describes the Units relationship  with that 
agency.8  
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  certified  Units.9  
All Units are currently  funded by the Federal government  on a 75-percent 
matching  basis, with the States contributing  the remaining  25 percent.10  To 
receive Federal reimbursement,  each Unit must submit  an initial  application 
to OIG.11  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.12    
Pursuant to Title  XIX of the SSA, States must operate Units that effectively 
carry out their statutory functions  and meet program requirements.13   OIG 
developed and issued 12 performance  standards to define the criteria  it 
applies in assessing whether a Unit is effectively  carrying  out statutory 
functions  and meeting  program requirements.14   Examples  of standards 
include  maintaining  an adequate caseload through referrals  from various 
sources, maintaining  an annual training  plan for all professional  disciplines, 
and establishing  policies and procedures manuals  to reflect the Units 
operations.  See Appendix A for the 12 performance  standards. 
                        ____________________________________________________________ 
7 OIG, Medicaid Fraud Control Units.  Accessed at http://oig.hhs.gov/fraud/medicaid-
fraud-control-units-mfcu/  on March 27, 2015. 
8 SSA  1903(q)(2)  and 42 CFR  1007.9(d).   
9 The portion of funds reimbursed to States by the Federal Government for its share of 
expenditures for the Medicaid program, including the MFCUs, is called Federal Financial 
Participation. 
10 SSA  1903(a)(6)(B). 
11 42 CFR  1007.15(a). 
12 42 CFR  1007.15(b)  and (c). 
13 SSA  1902(a)(61). 
14 77 Fed. Reg. 32645 (June 1, 2012).  Accessed at http://oig.hhs.gov/authorities/docs/ 
2012/PerformanceStandardsFinal060112.pdf  on March 27, 2015.  Previous performance 
standards, established in 1994, are found at 59 Fed. Reg. 49080 (Sept. 26, 1994).  When 
referring to the performance standards, we refer to the 2012 standards, unless otherwise 
noted.   
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  2   
   
OIG performs periodic onsite evaluations  of the Units.  These evaluations 
differ from other OIG evaluations  as they support OIGs direct 
administration  of the MFCU grant program.  These evaluations  are subject to 
the same internal  quality  controls as other OIG evaluations,  including 
internal  peer review. 
Oklahoma Medicaid Program 
The Oklahoma  Medicaid program, known as SoonerCare, is operated by 
the Oklahoma Healthcare Authority  (OHCA), a division  of the Oklahoma 
Department  of Human Services.  As part of OHCA, the Program Integrity 
Unit (PIU) shares responsibility  for protecting  the integrity  of the 
Medicaid program.   In FY 2014, the Oklahoma Medicaid program 
provided services to over 800,000 beneficiaries.15   Oklahoma Medicaid 
expenditures  for FY 2014 were over $4.9 billion.16    
Oklahoma Unit  
The Oklahoma  Unit is housed within  the Oklahoma Office of the Attorney 
General (OAG).17  For FY 2014, the Unit expended nearly  $2.4 million  in 
combined  State and Federal funds.18  At the time of our December 2014 
onsite review, the Unit employed  24 staff members1 director, 1 deputy 
director, 3 assistant attorneys general, 1 senior auditor, 13 agents 
(including  1 Agent-in-Charge  and 2 Special Agents-in-Charge),19 
1 victim/witness  coordinator, 1 docketing clerk, 1 legal assistant,  and 
2 administrative  assistants.  The Units headquarters is located in 
Oklahoma City, and the Unit maintains  a satellite  office in Tulsa.       
Referrals.  The Unit receives referrals  (by telephone, e-mail, fax, or 
written correspondence, or in person) from a variety of sources, including 
the PIU, local law enforcement,  and providers.  Unit referrals by referral 
source for FYs 2012 through  2014 can be found in Appendix B.  For each 
referral  received, Unit management  evaluates the referral and determines 
                        ____________________________________________________________ 
15 Oklahoma Healthcare Authority, Total Enrollment:  SoonerCare Fast Facts, p. 1.   
Accessed at http://www.okhca.org/research.aspx?id=2987 on March 27, 2015. 
16 OIG, State Medicaid Fraud Control Units Fiscal Year 2014 Grant Expenditures and 
Statistics (January 28, 2015).  Accessed at http://oig.hhs.gov/fraud/medicaid-fraud-
control-units-mfcu/expenditures_statistics/fy2014-statistical-chart.pdf on March 27, 
2015. 
17 OAG, About the Office.  Accessed at http://www.ok.gov/oag/About_the_Office/ 
index.html on April 10, 2015. 
18  OIG, State Medicaid Fraud Control Units Fiscal Year 2014 Grant Expenditures and 
Statistics (January 28, 2015).  Accessed at http://oig.hhs.gov/fraud/medicaid-fraud-
control-units-mfcu/expenditures_statistics/fy2014-statistical-chart.pdf on March 27, 
2015.  
19 The Agent-in-Charge serves as the Units chief of investigations, and the two Special 
Agents-in-Charge function as agent supervisors.   
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  3   
   
what action needs to be taken (e.g., whether to open a case for preliminary 
investigation.)20    
Investigation Process.  When a case is opened, the Agent-in-Charge 
assigns it to an agent who specializes  in investigating  either  Medicaid 
fraud or patient abuse and neglect.  To assist agents during  the 
investigative  process, the Unit holds meetings  on a weekly basis to review 
and discuss cases.21  Although  the Unit typically  investigates  and 
maintains  most of its cases at the State level, the Unit also collaborates 
with Federal entities  such as OIG, and the Federal Bureau of Investigation 
(FBI) to investigate  cases jointly. 
Prosecution Process.  The Unit has the authority  to prosecute both 
criminal  and civil  cases.22  Unit attorneys review all cases presented for 
prosecution  and determine  whether to take the case, refer the case to 
District  attorneys,  or close the case.  On occasion, some Unit  attorneys are 
appointed as Special Assistant U.S. Attorneys (SAUSAs) to prosecute 
fraud cases in the U.S. District  Courts for Oklahoma.  In addition,  the Unit 
sometimes  works with the three United States Attorneys  Offices 
(USAOs) in the State (i.e., for Oklahomas  Eastern, Western, and 
Northern Districts)  to prosecute joint cases.  
Previous Review 
In 2008, OIG conducted an onsite review of the Oklahoma  Unit.  OIG 
found that the Unit was in full  compliance  with all applicable  Federal rules 
and regulations  that govern the grant and the 12 MFCU performance 
standards.  
METHODOLOGY 
We conducted an onsite review in December 2014.  We based our review 
on an analysis  of data from seven sources:  (1) a review of policies, 
procedures, and documentation  related to the Units operations, staffing, 
and caseload for FYs 2012 through 2014; (2) a review of financial 
documentation  for FYs 2012 through 2014; (3) structured interviews  with 
key stakeholders;  (4) a survey of Unit staff; (5) interviews  with the Units 
                        ____________________________________________________________ 
20 The Special-Agent-in-Charge assesses referrals involving criminal matters, while the 
Deputy Director assesses referrals involving civil matters. 
21 Unit management includes the Unit Director, Deputy Director, Agent-in-Charge, senior 
auditor, and at least one Assistant Attorney General.  During panel meetings, the case is 
evaluated to (1) determine the investigative progress made by the agent, (2) assesss the 
likelihood that the case will warrant a criminal prosecution, (3) decide whether to consult 
experts, and (4) determine whether the civil division of the Unit should track the case for 
civil litigation. 
22 56 O.S.  1003.  Accessed at http://www.oklegislature.gov/osstatuestitle.html on 
October 20, 2015. 
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  4   
   
management  and selected staff; (6) an onsite review of a sample of case 
files  for cases that were open in FYs 2012 through  2014; and (7) onsite 
observation  of Unit operations.  Appendix  C contains  the details of our 
methodology.    
Standards 
This study was conducted in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors General 
on Integrity  and Efficiency.   
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  5   
   
FINDINGS 
For FYs 2012 through 2014, the Unit reported  
56 criminal convictions, 51 civil judgments and 
settlements, and recoveries of nearly $66 million  
The Unit reported 56 criminal  convictions  and 51 civil  judgments  and 
settlements  during  FYs 2012 through 2014.  See Table 1.   
Table 1:  Oklahoma MFCU Criminal Convictions and Civil Judgments and 
Settlements, FYs 2012 Through 2014 
Outcomes  FY 2012  FY 2013  FY 2014  Total 
Criminal Convictions  18  21  17  56 
Civil Judgments and Settlements  16  20  15  51 
Source:  OIG analysis of Unit Quarterly Statistical Reports, FYs 2012 through 2014. 
For FYs 2012 through  2014, the Unit  reported combined  criminal  and civil 
recoveries of nearly $66 million.   During  the review period, criminal 
recoveries  ranged from $379,000 to $1.36 million.23   Civil  recoveries 
included  over $61 million  in global  recoveries and over $2 million  in 
non-global  recoveries.24   See Table 2.   
Table 2:  Oklahoma MFCU Recoveries and Expenditures, FYs 2012 Through 
2014 
Total 
Recovery Type  FY 2012  FY 2013  FY 2014 
Recoveries 
Criminal  $379,233  $1,360,329  $447,890  $2,187,452 
Global Civil  $18,722,317  $26,470,647  $16,293,102  $61,486,066 
Non-Global Civil  $0  $568,588  $1,680,000  $2,248,588 
     Total Recoveries  $19,101,550  $28,399,564  $18,420,992  $65,922,106 
     Total Expenditures  $1,824,638  $5,296,311  $2,271,908  $9,392,857 
Source:  OIG analysis of Unit self-reported data, FYs 2012 through 2014. 
The Program Integrity Unit sent few fraud 
referrals to the Unit in FYs 2013 and 2014, despite 
Unit efforts to increase referrals 
We found  that the PIU sent few fraud referrals  in FYs 2013 and 
2014, sending  a total of 9 referrals for the 2-year perioda decline 
                        ____________________________________________________________ 
23 During FY 2013, the Unit had three cases that involved large criminal recoveries. 
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.  
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  6   
   
from FY 2012, when the PIU sent 19 referrals  to the Unit.  
According  to Performance  Standard 4, the Unit should take steps to 
maintain  an adequate volume  and quality  of fraud referrals from the 
State Medicaid agency  and other sources.  Typically,  referrals from 
the State Medicaid agency are an essential  component of a Units 
ability  to effectively  investigate  and prosecute Medicaid provider 
fraud.  Since 2013, the Unit has made efforts to ensure that the PIU 
sends referralsfor  example, the Unit has maintained  open 
communication  with the State Medicaid agency and discussed 
referrals informally  during  monthly  meetings  with PIU staff.  The 
State Medicaid agency changed the referral process following  the 
implementation  of the payment suspension  regulations  in 2011. 25  
The Unit Director believes that this change may have caused the low 
number of referrals  in FYs 2013 and 2014.  
Forty-two percent of Unit case files for cases 
open longer than 90 days lacked documentation 
of periodic supervisory reviews 
Nearly half of case files  for cases open longer than 90 days lacked 
documentation  of periodic supervisory  reviews.  Of the 42 percent that 
lacked documentation,  nearly all (39 percent) had documentation  of at 
least one supervisory  review.  According to Performance  Standard 7(a), a 
Unit should, consistent  with Unit policies  and procedures, conduct 
supervisory  reviews periodically  and note them in the case files.   In the 
year prior to the onsite, the Unit reported that they implemented  a new 
system of oversight  for case reviews.  However, the Units policies and 
procedures manual  did not establish  a specific  timeframe  in which  each 
agents case files should receive periodic supervisory  reviews.  As we did 
in previous  MFCU onsite reviews when a Unit had not established  a 
timeframe  for periodic supervisory  reviews, we used 90 days as the 
threshold  for such reviews to occur.       
The Unit did not report all convictions and adverse 
actions to Federal partners within required 
timeframes  
The Unit did not report all convictions  to OIG for the purpose of program 
exclusion,  nor did it report all adverse actions to the National Practitioner 
Data Bank (NPDB).  According  to Performance  Standard 8(f), the Unit 
                        ____________________________________________________________ 
25 The process was changed to have the PIU send all referrals to the State Medicaid 
agencys legal division, which reviews each referral and determines whether to forward it 
to the Unit. 
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  7   
   
should report to OIG all convictions  for the purpose of exclusion  from 
Federal health care programs within  30 days of sentencing.26   Additionally, 
Federal regulations  require that Units report any adverse actions generated 
as a result of investigations  or prosecutions  of healthcare  providers to the 
NPDB within  30 days following  final  action.27     
The Unit did not report 45 percent of convictions to OIG for 
program exclusion within the required timeframe 
The Unit did not report 25 of its 56 convictions  to OIG for program 
exclusion  within  30 days of sentencing.   Specifically,  the Unit reported 
15 convictions  between 31 and 60 days of sentencing,  6 convictions 
between 61 and 90 days of sentencing,  and 1 conviction  after 90 days of 
sentencing,  and it never reported 3 convictions. 
The Unit Director reported that court delays in providing  the Unit with 
documents regarding  judgment  and sentencing  led to Unit delays in 
reporting  exclusions  to OIG within  the required timeframe.   According to 
the Unit Director, the Units reporting  process requires staff to obtain 
court documents in order to verify  conviction  information  before 
submitting  it to OIG for program-exclusion  purposes.  As a result, the Unit 
stated that it is unable to report convictions  within  30 days of sentencing.   
In addition  to having  22 convictions  that it reported late because of court 
delays, the Unit  had 3 convictions  that it did not report at all.  The Unit 
Director explained  that two of the three unreported convictions  were for 
nonhealthcare  providers. The Unit  Director erroneously  believed  that 
convictions  of such providers did not need to be reported to OIG.  The 
remaining  conviction  was prosecuted by the USAO, not by Unit attorneys.  
The Unit Director was not aware that the Unit needed to report to OIG 
convictions  prosecuted by a Federal agency.  Following  our site visit,  the 
Unit reported all three convictions  to OIG for exclusion. 
The Unit did not report 38 percent of adverse actions to the 
NPDB within the required timeframe 
The Unit did not report 19 of its 50 adverse actions to the NPDB within 
30 days of the action.  Specifically,  the Unit reported 16 adverse actions 
                        ____________________________________________________________ 
26 If a Unit fails to ensure that convicted individuals are reported for exclusion, those 
individuals may be able to continue to submit claims to and receive payments from 
Medicaid and other Federal healthcare programs.  See 42 CFR  1001.1901. 
27 SSA  1128E(g)(1)  and 45 CFR  60.3.  The NPDB is intended to restrict the ability of 
physicians, dentists, and other healthcare practitioners to move from State to State 
without disclosure or discovery of previous medical malpractice and adverse actions.  
Examples of final adverse actions include, but are not limited to, convictions, civil 
judgments (but not civil settlements), and program exclusions.  Final adverse actions 
must be reported to the NPDB within 30 days following the action.  See 45 CFR  60.5. 
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  8   
   
between 31 and 60 days of the action, 2 between 61 and 90 days of the 
action, and 1 after 91 days of the action. 
The Unit director reported difficultiessimilar  to those in obtaining 
information  for reporting  convictions  to OIGin obtaining  the required 
information  to report adverse actions to the NPDB.   According  to the Unit 
Director, court delays result in delays in the Units receiving  the 
sentencing  documents  that it needs to submit reports of adverse actions to 
the NPDB.  Sentencing  documents  include  the final  charges at 
sentencingi.e.,  information  on restitution,  fines, and penalties.   The Unit 
stated that because of court delays, it is unable to report adverse actions 
within  30 days of the action as required.   
The Unit claimed unallowable expenditures 
The Unit claimed  $31,304the Federal share of which is $23,478in 
unallowable  expenditures  for FYs 2012 through  2014.  According  to 
Performance  Standard 11, the Unit should exercise proper fiscal control 
over its resources. 28  Proper and efficient  performance  and administration 
of Federal awards require costs to be necessary, reasonable, adequately 
documented, and allocable.   The Units claims  for unallowable 
expenditures  resulted from several factors, including  lack of adequate 
supporting  documentation  and improper allocation.   We found that all 
expenditures  claimed by the Unit other than this $31,304 unallowable 
amounti.e.,  a total of $6,009,212, the Federal share of which is 
$4,506,908 were allowable,  allocable,  reasonable, and in accordance 
with applicable  Federal requirements.   See Appendix  D, Table D-1 for 
more detail. 
The Unit retained investigative cost recoveries related 
to criminal judgments and sentencing 
Our review found that for FYs 2012 through  2014, the Unit deposited 
$167,944 (the Federal share of which is $107,492) received from  criminal 
judgments  and sentencing  directly  into the Units State account used for 
cost-matching  obligations.   These monies are associated with the recovery 
of investigative  costs.  The Unit should have worked with the State 
Medicaid agency to ensure the return of the Federal share to the Federal 
                        ____________________________________________________________ 
28 Additionally, OMB Circular A-87, Attachment A,  (c)(1)(a) and (c)(1)(j)  require 
that costs are necessary and reasonable for proper and efficient performance and 
administration of Federal awards and are adequately documented.  OMB Circular A-87, 
Attachment A,  (c)(3)(a) states that a cost is allocable to a particular cost objective if the 
goods or services involved are chargeable or assignable to such cost objective in 
accordance with relative benefits received. 
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  9   
   
government.   According  to State Fraud Policy Transmittal  Number 10-01, 
the Unit should not retain  monies obtained in a Medicaid fraud settlement 
or judgment  entered into by the State.29, 30  Instead, the Unit should work 
with the State Medicaid agency to ensure the return of the Federal 
Governments  share of recoveries.31  The State Medicaid agency is 
responsible  for returning  the Federal share of those recoveries to the 
Federal government  and for distributing  the remaining  State share in 
accordance with the States policy or practice.      
The Unit claimed Federal financial participation 
for costs associated with two non-MFCU 
activities  
The Unit claimed  Federal financial  participation  (FFP) for the time that 
agents worked on non-MFCU related activities.   Additionally,  the Unit did 
not maintain  its records to allow for proper time distribution  and lacked 
documentation  necessary to ensure that FFP was received only for 
employee work on MFCU-specific  activities.   Federal regulations  and 
policy transmittals  state that Units may claim  FFP only for costs 
associated with the investigation  and prosecution of Medicaid fraud and 
complaints  of patient abuse or neglect in healthcare or board and care 
facilities.32   Furthermore,  MFCU Performance Standard 11 requires the 
Unit to exercise proper fiscal  control over Unit resources, which  includes 
maintaining  an effective  time and attendance system and maintaining 
personnel activity  reports. 
                        ____________________________________________________________ 
29 OIG State Fraud Policy Transmittal Number 10-01, Program Income.  This OIG 
transmittal relied on and summarized the content of the Centers for Medicare & Medicaid 
Services (CMS) policy statement outlined in the State Health Official (SHO) Letter 
#08-004, which stated that the Federal share of the total amount of any legal judgements 
or settlement proceeds received by a State in a Medicaid false claims action should be 
returned to CMS.  Accessed at http://oig.hhs.gov/fraud/medicaid-fraud-control-units-
mfcu/policy_transmittals/2010-1%20State%20Fraud%20Policy%20Transmittal 
%20Number%2010-01%20Program%20Income%203-22-2010.pdf  on May 27, 2015. 
30 CMS SHO Letter #08-004.  Accessed at http://www.kslaw.com/Library/publication/ 
HH111008_CMSLetter.pdf  on July 27, 2015. 
31 Ibid.  The Federal share of investigative cost recoveries from criminal judgments and 
sentencing is based upon the total incurred amount. 
32 SSA  1903(q)(3)  and 42 CFR  1007.11(a),  (b), and 1007.19(d).   OIG State Fraud 
Policy Transmittals Numbers 2014-1 and 89-1.  Accessed at http://oig.hhs.gov/fraud/ 
medicaid-fraud-control-units-mfcu/policy_transmittals/State%20Fraud%20Policy%20 
Transmittal%20No%20%202014-1.pdf  and http://oig.hhs.gov/fraud/medicaid-fraud-
control-units-mfcu/policy_transmittals/89-1%20Full%20time%20and%20 
Part%20time%20Employees.pdf on May 28, 2015. 
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  10   
   
The Unit claimed  and received FFP for two non-MFCU related activities.   
First, four Unit agents served as executive  security33  for the Attorney 
General, typically  filling  in when the individual  normally  accompanying 
the Attorney General was not available.   The Unit  reported that this 
practice stopped prior to our onsite review.  Second, agents conducted 
background checks for summer interns  and newly hired non-MFCU OAG 
staff.  The Unit Director reported that agents continue  to conduct 
background checks for non-MFCU staff.  However, agents are now 
logging  their time spent on this activity  in the case management  system to 
ensure the Unit does not claim FFP for this activity. 
Federal cost principles  also require the Unit to periodically  certify  that 
employees worked solely  on MFCU-specific activities.   The Unit must 
track any time  employees  that spend on non-MFCU-related activities.34   
However, our review found that the Unit did not make these certifications.    
Subsequent to our onsite review, the Unit Director  reported instituting 
internal  controls for tracking  all off-grant activities  for Unit staff  within 
the case management  system.  Now that staff time is being tracked, the 
Unit Director  plans to deduct non-MFCU associated costs from the MFCU 
grant.    
                        ____________________________________________________________ 
33 Executive security refers to armed agents accompanying the Attorney General for the 
purpose of providing security and transportation services. 
34 OMB Circular A-87 Att. B,  (8)(h)(3) and (8)(h)(4),  codified at 2 CFR pt. 225.  After 
our review period, OMB and Federal agencies revised the cost principles, now found at 
45 CFR 2 CFR pt. 200. 
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  11   
   
CONCLUSION AND RECOMMENDATIONS 
For FYs 2012 through  2014, the Oklahoma Unit reported 56 criminal 
convictions,  51 civil  judgments  and settlements,  and recoveries of nearly 
$66 million.   During  the same period, the State Medicaid agencys  PIU 
sent few fraud referrals  to the Unit in FYs 2013 and 2014, despite Unit 
efforts to increase referrals. 
We identified  opportunities  for improvement  in adhering  to MFCU 
performance  standards.  Specifically,  we found  that 42 percent of Unit 
case files lacked documentation  of periodic supervisory  reviews.  
Additionally,  the Unit  did not report all convictions  and adverse actions to 
Federal partners within  required timeframes,  and the Unit claimed 
unallowable  expenditures. 
We further  identified  two instances  in which the Unit did not adhere to 
Federal policy or requirements.   Specifically,  the Unit retained 
investigative  cost recoveries related to criminal  judgments  and sentencing 
and claimed  FFP for costs associated with  two non-MFCU activities. 
Therefore, we recommend that the Oklahoma  Unit: 
Continue efforts to receive an adequate number of referrals 
from the PIU 
Referrals  from a States PIU remain  an important  component of a Units 
ability  to effectively  investigate  and prosecute Medicaid provider fraud.  
The Unit should continue  to work with the PIU to receive an adequate 
number of referrals. 
Ensure that supervisors conduct and document periodic 
reviews of case files 
The Unit should  continue  to ensure supervisors  review  and document  case 
files  periodically.   Additionally,  the Unit should revise its policies  and 
procedures manual  to include  the new procedures for periodic reviews of 
case files. 
Implement processes to ensure that the Unit reports all 
convictions and adverse actions to Federal partners within 
required timeframes  
The Unit should  implement  processes to ensure that convictions  are 
reported to OIG within  30 days of sentencing  and that adverse actions  are 
reported to the NPDB within  30 days of the action.  This could include 
working with the courts to ensure that the courts provide conviction 
information  to the Unit in a timely  manner.  The Unit could contact the 
various courts to explain  the necessity  of receiving  copies of sentencing 
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  12   
   
documents so that the Unit can submit the required reports to Federal 
partners within  the required timeframes.    
Work with OIG to repay the Federal government for FFP 
claimed for unallowable expenditures  
The Unit should repay $23,478 to the Federal government  for FFP claimed 
for unallowable  expenditures.    
Work with the State Medicaid Agency to ensure that the 
Federal share of identified investigative cost recoveries related 
to criminal judgments and sentencing is returned to the 
Federal government 
The Unit should  work with the State Medicaid agency to ensure that the 
Federal share of $167,944 in investigative  cost recoveries related to 
criminal  judgments  and sentencing  is appropriately  returned to the Federal 
government.   Also, the Unit should implement  procedures to ensure that 
the Unit works with the State Medicaid agency to return to the Federal 
Government  the Federal share of investigative  cost recoveries related to 
criminal  judgments  and sentencing. 
Claim FFP only for MFCU-related activities and work with OIG 
to determine the portion of employee salaries corresponding 
to non-MFCU activities and to return the Federal share of that 
portion to the Federal government  
The Unit should  only  claim FFP for appropriate MFCU-related activities.    
The Unit should continue  its system of internal  controls that track and 
support allowable  MFCU activities.    
The Unit should  also work with OIG to determine  the portion of employee 
salaries  associated with the time spent on non-MFCU activities 
(i.e., executive  security  for the Attorney General  and conducting 
background checks) and to return the Federal share of that portion to the 
Federal Government. 
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  13   
   
UNIT COMMENTS AND OFFICE OF INSPECTOR GENERAL 
RESPONSE 
The Oklahoma Unit concurred with all six of our recommendations.    
Regarding  the first recommendation,  the Unit stated that it will  continue  to 
encourage referrals from the PIU (e.g., making  suggestions  for referral 
sources and providing  criteria  for possible referrals at the Units monthly 
meeting  with the PIU).   
Regarding  the second recommendation,  the Unit stated that it took 
measures to ensure supervisory  oversight  at least every 90 days.     
Regarding  the third recommendation,  the Unit stated that its ability  to 
report convictions  within  30 days is often outside its control.  
Nevertheless,  the Unit stated that it will  make every effort to timely  and 
accurately  report all convictions. 
Regarding  the fourth recommendation,  the Unit stated that it would work 
with the OIG to repay all FFP for unallowable  expenditures  and ensure 
proper credits are applied.   
Regarding  the fifth  recommendation,  the Unit took measures to transfer 
the identified  cost recoveries to the Medicaid Agency with correspondence 
indicating  that these funds are to be repaid to CMS.  Additionally,  the Unit 
implemented  a policy to ensure appropriate identification  and transfer of 
the Federal share of investigative  cost recoveries in the future. 
Regarding  the sixth recommendation,  the Unit stated that it implemented 
policies  and procedures to record all non-MFCU related activities  in its 
case management  software.  Each quarter non-MFCU related activities  are 
deducted from FFP and reported properly on the Federal Financial  Report 
(FFR).  In addition,  the Unit identified  all prior non-grant  related activities 
and removed them from any FFP in the final  2014 FFR.   
 
   
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  14   
   
 
 
APPENDIX A 
2012 Performance Standards35 
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; 
D.  OIG policy transmittals as maintained on the OIG Web site; 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 Unit 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.  
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.   
                        ____________________________________________________________ 
35 77 Fed. Reg. 32645, June 1, 2012. 
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  15   
   
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 PROVIDER TYPES AND 
INCLUDES A BALANCE OF FRAUD AND, WHERE APPROPRIATE, PATIENT ABUSE AND NEGLECT 
CASES.   
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.  
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. 
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. 
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:  
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  16   
   
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 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. 
6.  The number of criminal convictions and the number of civil judgments. 
7.  The dollar amount of overpayments identified. 
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. 
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, cases 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. 
C.  The MOU is consistent with current Federal and State policy, including any policies issued by OIG or the 
CMS. 
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  17   
   
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. 
   
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  18   
   
APPENDIX B 
Referrals of Provider Fraud and Patient Abuse and Neglect to the 
Oklahoma Unit by Source, FYs 2012 Through 2014 
Table B-1:  Referrals of Fraud and Abuse to MFCU 
Case Type  FY 2012  FY 2013  FY 2014 
Provider Fraud  84  69  120 
Patient Abuse and Neglect  110  123  157 
Total  194  192  277 
  Source:  Oklahoma MFCU response to OIG data request. 
Table B-2:  Referrals to MFCU, by Referral Source 
FY 2012  FY 2013  FY 2014 
Patient  Patient 
Referral Source  Patient 
Provider  Abuse  Provider  Abuse  Provider 
Abuse and 
Fraud  and  Fraud  and  Fraud 
Neglect 
Neglect  Neglect 
Medicaid Agency  Program Integrity Unit  19  0  4  0  5  0 
Medicaid Agency - Other  10  25  1  4  4  14 
State Survey/Certification  0  0  0  0  0  0 
State Agencies  Other  2  31  1  83  0  62 
Licensing Boards  3  0  3  0  1  1 
Law Enforcement  22  15  32  5  60  46 
HHS OIG  3  1  0  0  0  1 
Prosecutors  4  2  0  3  3  0 
Providers  11  23  10  23  12  20 
Private Health Insurers  0  0  0  0  0  0 
Ombudsman  0  0  0  0  0  0 
Adult Protective Services  0  0  0  0  0  0 
Private Citizens  9  13  10  5  12  11 
MFCU Hotline  0  0  6  0  17  1 
Other  1  0  2  0  6  1 
Total Referrals Received  84  110  69  123  120  157 
Source:  Oklahoma MFCU response to OIG data request. 
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  19   
   
APPENDIX C 
Detailed Methodology 
We used data collected from the seven sources below to describe the 
caseload and assess the performance  of the Unit. 
Data Collection 
Review of Unit Documentation.  Prior to the onsite review, we analyzed 
information  regarding  how the Unit investigates  Medicaid  cases and refers 
them for prosecution.  We gathered this information  from several sources, 
including  the Units quarterly  statistical  reports, annual reports, 
recertification  questionnaires,  policies  and procedures manuals, 
Memorandum  of Understanding  with the State Medicaid agency, and 
the report (from 2008) on OIGs previous onsite review of the Unit.  
Additionally,  we confirmed  with the Unit director that the information  we 
had was current as of December 2014, and as necessary, we requested any 
additional  data or clarification. 
Review of Financial Documentation.  OIGs Office of Audit Services 
(OAS) reviewed the Units control over its fiscal  resources to identify  any 
internal  control issues or other issues involving  use of resources.  OAS 
reviewed the Units financial  policies  and procedures; its response to an 
internal  control questionnaire;  documents (such as timecard records) to 
support staff time and effort during selected pay periods; and documents 
(such as financial  status reports36) related to MFCU grants.  Further, OAS 
reviewed a judgmental  sampleconsisting  of 108 expenditure 
transactions  totaling  $2,171,737to assess (1)  expenditures  that 
represented allowable,  allocable,  and reasonable costs in accordance with 
applicable  Federal regulations;  and (2)  internal  controls related to 
accounting,  budgeting,  personnel, procurement,  property, and equipment.   
All selected transactions  were limited  to the review period of FYs 2012 
through  2014.  The sample included  the following: 
No.  Expenditure Type  Transactions  Expenditure Amount 
1  Salary and benefits  12  $1,798,956 
2  Rent  19  $91,795 
3  Equipment  8  $121,412 
4  Supplies and miscellaneous  8  $31,782 
5  Travel  34  $60,472 
6  Training and membership  27  $67,320 
  Total  108  $2,171,737 
                        ____________________________________________________________ 
36 The Unit transmits financial status reports to OIGs Office of Management and Policy 
on a quarterly and annual basis.  These reports detail Unit income and expenditures. 
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  20   
   
We also reviewed items in the Units inventory  of supplies.   Specifically, 
we selected a sample of 106 items from the current inventory  list of 
451 items (which includes  items in both the Units Oklahoma City office 
and its Tulsa office) and verified  the items.  To ensure a variety  in our 
inventory  sample, we included  expensive  items such as computers and 
vehicles  as well as less expensive  items such as radios and cameras. 
Interviews with Key Stakeholders.  We conducted structured interviews 
with key stakeholders who were familiar  with the operations of the Unit.  
Specifically,  we interviewed  staff from the Oklahoma Attorney Generals 
office;  the Oklahoma Health Care Authority;  the Oklahoma State 
Department  of Health;  the Oklahoma Department  of Human Services; 
the Assistant U.S. Attorneys offices  in the USAO Eastern and Western 
Districts  of Oklahoma; and the Federal Bureau of Investigation,  as well as 
OIG special agents and an OIG Assistant  Special Agent in Charge who 
worked with the Unit during  the review period.  These interviews  focused 
on the Units interaction  with external agencies. 
Survey of Unit Staff.  We administered  an electronic  survey to Unit staff in 
the weeks leading  up to the onsite review.  We requested responses from 
18 nonmanagerial  staff members and received responses from 16 of them, 
an 89-percent response rate.  Our questions  focused on operations, 
opportunities  for improvement,  and effective  practices.   
Interviews with Unit Management and Staff.  We conducted structured 
interviews  with the Unit director; the deputy director; the Agent in 
Charge; the Special Agents in Charge for the Oklahoma City and Tulsa 
offices;  the senior auditor; and staff from those two offices.   We asked 
interviewees  to provide information  to better illustrate  the Units 
operations, identify  opportunities  for improvement,  describe effective 
practices, and clarify  information  we obtained from other data sources. 
Onsite Review of Case Files.  We requested that the Unit provide us with a 
list of cases that were open at any point during  FYs 2012 through  2014.  
The Unit provided a list of 605 cases that were open during  this period.  
For each case, the Unit provided us with data including  the current status 
of the case; whether the case was criminal,  civil,  or global; and the date on 
which the case had been opened.  From this list of cases, we excluded 
95 cases that were categorized  as global.   The remaining  number of 
cases was 510. 
From these 510 cases, we selected a statistically  valid, simple random 
sample of 100 cases to review the case files to see whether they included 
documentation  of supervisory  approval for the opening  and closing  of 
cases and whether they included  documentation  of periodic supervisory 
review.  The sample of cases for which we reviewed the case files 
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  21   
   
included  65 cases that were closed sometime  in the period of FYs 2012 
through  2014 and 67 cases that had been open for more than 90 days, thus 
necessitating  periodic supervisory  review.  See Appendix F for point 
estimates  and 95-percent confidence  intervals.   
From the initial  sample of 100 cases, we selected another simple  random 
sample of 50 cases for a more indepth review of the case files.   We 
reviewed  these case files  for selected issues, such as the timeliness  of 
investigations  and case development.   
Onsite Review of Unit Operations.  During  our December 2014 onsite 
review, we observed the Units workspace and operations.  We visited  the 
Units Oklahoma City and Tulsa offices  and meeting  spaces, and we 
reviewed the following:   the process for receiving  referrals,  the electronic 
case management  system,  the security  of case files,  the location  of 
selected equipment,  and the general functioning  of the Unit.  We also 
verified  that the Unit referred convicted  individuals  to OIG for program 
exclusion  and that the Unit reported adverse actions to the NPDB. 
Data Analysis 
We analyzed  data from the sources described above to identify  any 
opportunities  for improvement  and any instances in which  the Unit did not 
meet the performance  standards or was not operating in accordance with 
laws, regulations,  and/or policy transmittals.37 
   
                        ____________________________________________________________ 
37 All relevant regulations, statutes, and policy transmittals are available online at 
http://oig.hhs.gov/fraud/medicaid-fraud-control-units-mfcu/. 
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  22   
   
APPENDIX D 
Fiscal Control Review Findings, FYs 2012 Through 2014 
Table D-1:  Unallowable Expenditures 
Findings  Total  Federal Share 
Claimed Expenditures   $6,040,516   $4,530,386  
Federal Requirements 
Accepted Expenditures  $6,009,212  $4,506,908 
Incorrectly Claimed Expenditures  $31,304  $23,478 
  Overreported expenditures:  Claimed 
expenditures on FFP reports were not  $20,770   $15,577   A-87 Att. A, (C)(1)(j) 
supported. 
  Methodology for Oklahoma City rent 
allocation:  Square footage and price per 
$1,280   $960   A-87 Att. A, (C)(3)(a) 
square foot were not supported by the 
Oklahoma City lease agreements.  
  Methodology for Tulsa rent allocation:  
Rent space allocation used 15 
employees instead of 11 employees,  $4,214   $3,161   A-87 Att. A, (C)(3)(a) 
causing the Unit to pay higher rent 
amounts. 
  Unsupported postage expense:  The Unit 
did not maintain postage usage reports 
$3,000   $2,250   A-87 Att. A, (C)(1)(j) 
for a postage machine in the Attorney 
Generals office.  
  Lack of supporting documentation:  
A gasoline fee and a training fee lacked 
$1,090   $818   A-87 Att. A, (C)(1)(j) 
proper supporting documentation 
verifying allowability. 
  Duplicated expenditure:  The Unit 
mistakenly twice claimed a training  $950   $712   A-87 Att. A, (C)(1)(a) 
registration payment for one employee. 
Source:  OIG analysis of Unit expenditures, FYs 2012 through 2014. 
Table D-2:  Identified Cost Recoveries Related to Criminal Judgements 
and Sentences 
Finding  Total  Federal Share  Federal Requirement 
Incorrectly retained investigative 
State Fraud Policy Transmittal 
cost recoveries related to criminal  $167,944  $107,492 
No. 10-01 
judgments and sentencing 
Source:  OIG analysis of Unit expenditures, FYs 2012 through 2014. 
Table D-3:  Employee Salaries  
Finding  Total  Federal Share  Federal Requirement 
Four employees who performed  Unable to  Unable to 
A-87 Att. B, (8)(h)(4) & (5) 
non-MFCU related activities   determine  determine 
Source:  OIG analysis of Unit expenditures, FYs 2012 through 2014. 
Table D-4:  Federal Requirements 
OMB Circular A-87 Requirements 
Attachment A 
(c)(1)(a)  To be allowable under Federal awards, costs must be necessary and reasonable for proper and 
and (j)  efficient performance and administration of the Federal award and must be adequately 
documented. 
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  23   
   
Table D-4:  Federal Requirements (Continued) 
Attachment B 
(c)(3)(a)  A cost is allocable to a particular cost objective if the goods or services involved are chargeable or 
assignable to such cost objective in accordance with relative benefits received. 
(8)(h)(3)  Where employees are expected to work solely on a single Federal award or cost objective, 
charges for their salaries and wages will be supported by periodic certifications that the employees 
worked solely on that program for the period covered by the certification. These certifications will 
be prepared at least semi-annually and will be signed by the employee or supervisory official 
having first-hand knowledge of the work performed by the employee. 
(8)(h)(4)  Where employees work on multiple activities or cost objectives, a distribution of their salaries or 
wages will be supported by personnel activity reports or equivalent documentation.  Such 
documentary support will be required where employees work on an unallowable activity and a 
direct or indirect cost activity. 
(8)(h)(5)  Personnel activity reports or equivalent documentation must (a) reflect an after the fact distribution 
of the actual activity of each employee, (b) account for the total activity for which each employee is 
compensated, (c) be prepared at least monthly and must coincide with one or more pay periods, 
and (d) be signed by the employee. 
State Fraud Policy Transmittal Number 10-01, Program Income 
CMS should be paid the Federal Medical Assistance Percentage (FMAP) proportionate share of a MFCU's 
total recovery, without deducting legal expenses and other administrative costs. 
   
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  24   
   
APPENDIX E 
Investigations Opened and Closed by Provider Category and Case 
Type, FYs 2012 Through 2014 
Table E-1:  Annual Opened and Closed Investigations 
FY 2012  FY 2013  FY 2014 
Case Type 
Opened  Closed  Opened  Closed  Opened  Closed 
Provider Fraud  76  45  54  31  83  32 
Patient Abuse and Neglect  80  56  85  73  55  68 
Total   156  101  139  104  138  100 
Source:  Oklahoma MFCU response to OIG data request. 
Table E-2:  Investigations of Patient Abuse and Neglect 
FY 2012  FY 2013  FY 2014 
Provider Category 
Opened  Closed  Opened  Closed  Opened  Closed 
Nursing Facilities  31  16  15  19  11  18 
Other Long-Term-Care Facilities  0  1  0  0  1  0 
Nurses/Physicians Assistants/Nurse 
49  37  69  53  42  50 
Practitioners/Certified Nurse Aides 
Home Health Aides  0  1  1  1  0  0 
Other  0  1  0  0  1  0 
Total  80  56  85  73  55  68 
Source:  Oklahoma MFCU response to OIG data request. 
 
 
 
 
 
 
 
 
 
   
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  25   
   
Table E-3:  Investigations of Provider Fraud 
Provider Category  FY 2012  FY 2013  FY 2014 
Facilities  Opened  Closed  Opened  Closed  Opened  Closed 
Hospitals  1  0  0  1  2  0 
Nursing Facilities  1  1  0  1  1  0 
Other Long-Term-Care Facilities  0  1  0  0  0  0 
Substance Abuse Treatment Centers  0  0  0  0  0  0 
Other Facilities  5  0  1  3  1  3 
Practitioners  Opened  Closed  Opened  Closed  Opened  Closed 
Doctors of Medicine or Osteopathy  7  4  1  3  3  1 
Dentists  1  5  3  0  1  1 
Podiatrists  0  0  0  0  0  0 
Optometrist/Opticians  3  0  0  2  0  0 
Counselors/Psychologists  24  9  21  12  49  20 
Chiropractors  0  0  0  0  0  0 
Other Practitioners  0  0  0  0  0  0 
Medical Support  Opened  Closed  Opened  Closed  Opened  Closed 
Pharmacies  4  2  2  0  4  2 
Pharmaceutical Manufacturers  12  11  20  1  13  0 
Suppliers of Durable Medical  3  2  1  1  2  1 
Equipment 
Laboratories  1  0  1  0  2  0 
Transportation Services  0  0  0  0  0  0 
Home Health Care Agencies  0  1  2  1  0  0 
Home Health Care Aides  4  3  0  0  0  1 
Nurses/Physicians Assistants/Nurse 
1  0  0  2  1  0 
Practitioners/Certified Nurse Aides 
Radiologists  0  1  0  0  1  0 
Other Medical Support  3  2  1  2  1  1 
Program Related  Opened  Closed  Opened  Closed  Opened  Closed 
Managed Care  1  1  0  0  0  0 
Medicaid Program Administration  5  2  1  2  2  2 
Billing Company  0  0  0  0  0  0 
Other Program Related  0  0  0  0  0  0 
All Fraud Investigations  Opened  Closed  Opened  Closed  Opened  Closed 
Total  76  45  54  31  83  32 
Source:  Oklahoma Unit response to OIG data request. 
 
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  26   
   
APPENDIX F 
Point Estimates and Confidence Intervals Based on Review of Case 
Files 
95-Percent 
Sample   Point  Confidence Interval 
Estimate Characteristic 
Size  Estimate 
Lower  Upper 
Case files containing 
documentation of supervisory  100  100.0%  96.7%  100.0% 
approval for opening 
Case files containing 
documentation of supervisory  65  100.0%  94.9%  100.0% 
approval for closing 
Case files with no documentation of 
67  41.8%  29.8%  54.5% 
periodic supervisory review* 
Source:  OIG analysis of Unit case files, 2014. 
*We excluded from this analysis 4 sampled cases that were closed within 90 days of opening, 8 sampled 
cases that did not receive periodic supervisory review because of extenuating circumstances outside of the 
Units control, and 21 sampled cases that were open less than 90 days. 
 
 
 
 
 
 
 
 
   
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  27   
   
APPENDIX G 
Unit Comments 
   
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  28   
   
   
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  29  Recommendation Number Six:  Claim FFP !Federal Financial Participation] only for 
MFCU-relntcd activities and work with OIG to determine tllC Federal share of employee 
salaries to return to the Federal government for non-MFCU activities. 
Response: The Unit concurs with this recommendation and implemented policies and procedures 
to record all non-MFCU related activities in 1hc cusc management software. Each quarter any off
grant related expenses arc deducted from FFP and repo1ied properly on the Federal Financial 
Repoti (FFR).  The Unit believes that it has already complied with this fo1ding.  All prior non
grant related activities were calculated and removed from any FFP in the final 2014 FFR. All non
grant related activities are currently recorded collaterally with the activities, calculated using the 
current rate of pay, deducted from the Unit's expenses and properly recorded on all quarterly and 
Jina! FFR. 
The staff of Oklahoma Medicaid Fraud Control Unil continue in their dedication of 
detection, investigation and prosecution ofproviders who commit Medicaid Fraud as well as those 
that abuse, neglect and exploit our most vulnerable adults.  Once again, we appreciate the OIG 
staff and their professionalism in conducting this onsite review. 
Mykel Fry 
Assistant At tomcy General 
Director, Medicaid Fraud Control Unit 
Page 3 of3 
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEl-06-14-00630)  30   
   
ACKNOWLEDGMENTS 
This report was prepared under the direction of Kevin Golladay,  Regional 
Inspector General for Evaluation  and Inspections  in the Dallas regional  office, and 
Ruth Ann Dorrill,  Deputy Regional  Inspector General; and in consultation  with 
Richard Stern, Director of the Medicaid Fraud Policy and Oversight  Division. 
Maria Balderas, of the Dallas regional  office,  served as the project leader for the 
study.  Other Office of Evaluation  and Inspections  staff who conducted the review 
include  Lyndsay Patty.  Other Medicaid Fraud Policy and Oversight  Division  staff 
who participated in the review include  Susan Burbach.  Office of Investigations 
staff also participated in the review.  Office of Audit Services staff who conducted 
a financial  review include  Miquel Darcey, Warren Lundy, and Keith Peters.  Other 
central office staff who contributed  to this review include  Lonie Kim, Kevin 
Farber, and Christine  Moritz. 
 
 
Oklahoma State Medicaid Fraud Control Unit:  2014 Onsite Review (OEI-06-14-00630)  31   
Office of Inspector General
http://oig.hhs.gov  
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95452, 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 individuals 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 individuals.  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.