U.S. Department of Health and Human Services 
 
Office of Inspector General 
 
 
 
 
South Carolina Medicaid Fraud 
Control Unit: 2020 Inspection  
 
 
 
 
 
Suzanne Murrin 
Deputy Inspector General for Evaluation and Inspections 
September 2021, OEI-12-20-00610  U.S. Department of Health and Human Services 
O  ffice of Inspector General 
 
Report in Brief 
 
Se ptember 2021, OEI-12-20-00610 
South Carolina Medicaid Fraud Control Unit: 
Unit Case Outcomes 
Federal fiscal years (FYs) 
2020 Inspection 
2018-2020 
 83 indictments What OIG Found 
 47 convictions We found that the South Carolina MFCU successfully investigated and 
 40 civil settlements and prosecuted cases of Medicaid fraud and patient abuse or neglect when compared 
judgments to MFCUs with similar staff sizes.  We also observed that the Units State and 
 $27,950,829 in total Federal partners reported positive, cooperative relationships and held the South 
recoveries Carolina MFCU in high respect.  For FYs 20182020, we identified six areas in 
which the Unit should improve its adherence to program standards and/or 
requirements.   
Unit Snapshot 
The South Carolina Medicaid 
We found that low staff levels and significant turnover contributed to large 
Fraud Control Unit (MFCU or 
caseloads for Unit staff.  We also found that in 16 percent of the Units case files, 
Unit) is part of the South 
the Unit did not document the reason for significant investigative delays.  Further, 
Carolina Office of the Attorney 
the Units case management system posed challenges for retrieving case 
General. 
information, and the Unit did not consistently document periodic supervisory 
reviews in its case files.   
At the time of our inspection in 
January 2021, the Unit was 
Additionally, we found that the Unit did not consistently report convictions or 
approved for 17 staff, 
adverse actions to Federal partners within the appropriate timeframes consistent 
employed 13, and had 4 
with regulatory requirements.  We also found that the Units memorandum of 
vacancies.  The MFCU staff6 
understanding (MOU) with the State Medicaid agency generally reflected current 
investigators (including the 
practice, policy, and legal requirements with the exception of a regulatory 
chief investigator and the nurse 
requirement regarding procedures for the receipt of managed care referrals.   
investigator), 4 attorneys 
(including the director and  We also made observations regarding Unit operations and practices, including a 
deputy director), 1 auditor, and  beneficial practice employed by the Unit that may serve as a model for other 
2 support staffare located in  Units: Unit management notified referral sources of the Units decision to open 
Columbia, South Carolina.   formal investigations of incoming referrals.   
What OIG Recommends 
To address these six findings, we recommend that the Unit (1) assess the 
adequacy of existing staffing levels, and if appropriate, consider a plan to expand 
the size of the Unit; (2) take steps to reduce investigation delays and ensure that 
the reasons for delays are documented in the case files; (3) seek approval from 
the South Carolina Office of the Attorney General to implement a new case 
management system; (4) take steps to ensure that supervisory reviews of Unit 
case files are conducted periodically and documented in accordance with Unit 
policy; (5) take steps to ensure that all convictions and adverse actions are 
reported to Federal partners within the appropriate timeframes; and (6) revise the 
Units MOU with the State Medicaid agency to establish procedures by which the 
Unit will receive referrals of potential fraud from managed care organizations.  
The Unit concurred with all six recommendations.  TABLE OF CONTENTS 
 
BACKGROUND  2 
Methodology   5 
PERFORMANCE ASSESSMENT  6 
Case Outcomes  6 
The Unit reported 83 indictments, 47 convictions, and 40 civil settlements and judgments 
for FYs 20182020 
The Unit reported total recoveries of $28 million for FYs 20182020 
Performance Standard 1: Compliance with requirements  7 
From the information we reviewed, the South Carolina Unit did not comply with two 
applicable legal requirements 
Performance Standard 2: Staffing   7 
Low staff levels and significant turnover contributed to large caseloads for Unit staff 
     The Units staff levels were low in relation to the States Medicaid program expenditures 
     Unit investigators and other staff carried large caseloads 
    Unit staff reported that low MFCU staff salaries led to significant turnover among Unit 
staff 
Performance Standard 3: Policies and procedures  10 
The Unit maintained written policies and procedures 
Performance Standard 4: Maintaining adequate referrals  10 
The Unit took steps to encourage referrals from the State Medicaid agency and additional 
referral sources 
Unit management notified referral sources of the Units decision to open formal 
investigations of incoming referrals 
Performance Standard 5: Maintaining a continuous case flow  12 
All case files contained documentation of supervisory approval to open and, as 
appropriate, supervisory approval to close 
In 16 percent of the Units case files, the Unit did not document the reason for significant 
investigative delays 
Performance Standard 6: Case mix  12 
The Units caseload included both fraud cases and patient abuse or neglect cases, covering 
a broad mix of provider types 
  Performance Standard 7: Maintaining case information  13 
The Units case management system posed challenges for retrieving case information and 
performance data  
The Unit did not consistently document periodic supervisory reviews in its case files  
Performance Standard 8: Cooperation with Federal authorities on fraud cases  15 
The Unit cooperated with OIG and the U.S. Attorneys Office in the investigation and 
prosecution of fraud cases 
The Unit did not consistently report convictions or adverse actions to Federal partners 
within the appropriate timeframes consistent with regulatory requirements  
Performance Standard 9: Program recommendations  16 
The Unit made program recommendations to the State Medicaid agency 
Performance Standard 10: Agreement with the Medicaid agency  16 
The Units MOU with the State Medicaid agency generally reflected current practice, policy, 
and legal requirements with the exception of a regulatory requirement regarding 
procedures for the receipt of managed care referrals 
Performance Standard 11: Fiscal control  17 
From OIGs limited review, we identified no deficiencies in the Units fiscal control of its 
resources 
Performance Standard 12: Training  17 
The Unit maintained a training plan for each professional discipline 
CONCLUSION and RECOMMENDATIONS  19 
Assess the adequacy of existing staffing levels, and if appropriate, consider a plan to expand  19 
the size of the Unit  
Take steps to reduce investigation delays and ensure that the reasons for delays are  20 
documented in the case files 
Seek approval from the South Carolina Office of the Attorney General to implement a new  20 
case management system 
Take steps to ensure that supervisory reviews of Unit case files are conducted periodically and  20 
documented in accordance with Unit policy 
Take steps to ensure that all convictions and adverse actions are reported to Federal partners  21 
within the appropriate timeframes 
Revise the Units MOU with the State Medicaid agency to establish procedures by which the  21 
Unit will receive referrals of potential fraud from managed care organizations 
UNIT COMMENTS and OIG RESPONSE  22 
DETAILED METHODOLOGY  24  APPENDICES  26 
A.  Unit Referrals by Source for Fiscal Years 2018 Through 2020  26 
B.  Point Estimates and 95-Percent Confidence Intervals of Case File Reviews  27 
C.  Unit Comments  28 
ACKNOWLEDGMENTS AND CONTACT  31 
ABOUT THE OFFICE OF INSPECTOR GENERAL  32 
   
BACKGROUND 
 
 
Objectives 
To examine the performance and operations of the South Carolina Medicaid Fraud 
Control Unit (MFCU or Unit). 
Medicaid Fraud Control Units 
MFCUs investigate (1) Medicaid provider fraud and (2) patient abuse or neglect in 
facility settings and prosecute those cases under State law or refer them to other 
prosecuting offices.1, 2, 3  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.4  
Each State must operate a MFCU or receive a waiver.5   
Currently, 50 States, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands 
operate MFCUs.6  Each Unit receives a Federal grant award equivalent to 90 percent of 
total expenditures for new Units and 75 percent for all other Units.7  In Federal fiscal 
year (FY) 2020, combined Federal and State expenditures for the Units totaled 
approximately $306 million, with a Federal share of $229 million.8   
 
   
_____________________________________________________________________________________________________________________________ 
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 As of December 27, 2020, MFCUs may also receive Federal financial participation to investigate and 
prosecute abuse or neglect of Medicaid beneficiaries in a noninstitutional or other setting.  Consolidated 
Appropriations Act, 2021, Public Law 116-260, Division CC, Section 207. 
3 References to State in this report refer to the States, the District of Columbia, and the U.S. territories. 
4 SSA  1903(q). 
5 SSA  1902(a)(61). 
6 The territories of American Samoa, Guam, and the Northern Mariana Islands have not established Units. 
7 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.  
8 OIG analysis of MFCUs FY 2020 reporting of expenditures.  The Federal FY 2020 was from October 1, 
2019, through September 30, 2020. 
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Background | 1  OIG Grant Administration and Oversight of MFCUs 
The Office of Inspector General (OIG) administers the grant award and provides 
oversight for each of the Units.9, 10  OIG conducts a desk review of each Unit as part of 
an annual recertification process.  OIG also conducts periodic inspections or reviews 
of selected Units.  Finally, OIG provides ongoing training and technical support to the 
Units. 
In its annual recertification review, OIG examines the Units reapplication materials, 
case statistics, and questionnaire responses from Unit stakeholders.  Through the 
recertification review, OIG assesses the Units performance, as measured by the Units 
adherence to published performance standards;11 the Units compliance with 
applicable laws, regulations, and OIG policy transmittals;12 and the Units case 
outcomes. 
OIG further assesses Unit performance by conducting inspections or reviews of 
selected Units.  These inspections and reviews result in public reports of findings and 
recommendations for improvement.  In the reports, OIG may also include 
observations regarding Unit operations and practices, including beneficial practices 
that may be useful to share with other Units.   
In addition, OIG provides training and technical assistance to Units, as appropriate, 
both during inspections and reviews and on an ongoing basis.  For example, during 
inspections and reviews, OIG assesses Units case management systems, investigative 
procedures, and training needs and offers practical suggestions to address the Units 
needs. 
South Carolina MFCU 
The South Carolina Unit is located in Columbia and is part of the South Carolina Office 
of the Attorney General.  At the time of our inspection in January 2021, the Unit 
employed 13 staff6 investigators (including 1 chief investigator and 1 nurse 
investigator), 4 attorneys (including the Unit director and deputy director), 1 auditor, 
and 2 support staff.  Three investigator positions and one attorney position were 
vacant at the time of our inspection.  
_____________________________________________________________________________________________________________________________ 
9 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. 
10 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. 
11 MFCU performance standards are published at 77 Fed. Reg. 32645 (June 1, 2012) and appear online at 
https://oig.hhs.gov/authorities/docs/2012/PerformanceStandardsFinal060112.pdf.  The performance 
standards were developed by OIG in conjunction with the MFCUs and were originally published at 59 
Fed. Reg. 49080 (Sept. 26, 1994). 
12 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. 
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Background | 2  Referrals   
The Unit receives referrals in various forms, including by email, telephone, and mail.  
During the inspection period, the Unit had different approaches for the review and 
assignment of those allegations involving fraud and those involving patient abuse or 
neglect.13 
All incoming fraud referrals were subject to review by the Units Provider Fraud Intake 
Committee which consisted of the director, deputy director, chief investigator, 
auditor, and investigative analyst.14  The committee held weekly meetings to review 
each fraud referral and determine whether to (1) assign the referral to a team, 
(2) defer it until the Unit could obtain additional information to properly evaluate the 
referral, or (3) decline it for investigation and notify the referring party of the Units 
decision, as appropriate. 
In contrast, when the Unit received referrals of patient abuse or neglect, it directed 
the referrals to the Units auditor, who conducted an initial review of each referral to 
determine whether additional information was needed.  After gathering any 
additional information, the auditor either (1) notified the referring party, in 
consultation with the Unit deputy director, that the Unit would not take action; or 
(2) forwarded the referral to the Unit director and deputy director, with a 
recommendation to open an investigation.  The director or deputy director would 
then review the auditors recommendation and determine whether to open an 
investigation, and if so, assign a team to the case. 
   
Investigations and Prosecutions   
During our review period, the Units assigned investigative teams consisted of one or 
more investigators; one or more attorneys; an auditor; an administrative assistant; 
and, if beneficial to the case, a nurse investigator.  After the Unit opened a case and 
assigned it to a team, the investigator, in consultation with the team, devised an 
investigative plan to guide the investigation.  At the request of the team, additional 
investigators and/or support staff could be assigned to the case.   
Once the team determined that a case had been thoroughly investigated, the team 
met with the director or deputy director to recommend proceeding with a criminal, 
civil, or administrative resolution or, as appropriate, closing the investigation.  The 
director would then approve a course of action such as additional investigation, 
criminal prosecution, or civil recovery.  Alternatively, the director could decline 
_____________________________________________________________________________________________________________________________ 
13 At the time of our inspection, the Unit was in the process of revising its referral intake procedures to 
establish a uniform process for reviewing and assigning allegations involving fraud and those involving 
patient abuse or neglect. 
 
14 At the Directors discretion, a referral may be immediately opened as a case without intake committee 
review.   
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Background | 3  prosecution and instead refer the case to the State Medicaid agency or to another 
appropriate agency.   
South Carolina Medicaid Program 
The South Carolina Department of Health and Human Services (SCDHHS) administers 
the State Medicaid program.  In FY 2019, approximately 77 percent of South 
Carolinas 1,058,406 Medicaid beneficiaries were enrolled in a Medicaid managed care 
plan.15, 16  In FY 2020, South Carolinas Medicaid expenditures were $7.03 billion.17  
The SCDHHS Bureau of Compliance and Performance Review includes the Medicaid 
programs Program Integrity Division, whose mission is to safeguard the Medicaid 
program against fraud, waste, and abuse.   
Prior OIG Report 
OIG conducted a previous onsite review of the South Carolina Unit in 2011.18  In that 
review, which covered FYs 20082010, OIG found that (1) the Units caseload 
increased by 65 percent, and the amount of funds the Unit recovered nearly doubled; 
(2) although almost all case files contained documentation of supervisory approval to 
open and close cases, 61 percent contained no documentation of periodic supervisory 
reviews; (3) the Unit had not updated its policies and procedures manual or its 
memorandum of understanding (MOU) with SCDHHS; and (4) the Unit maintained 
proper fiscal control of its resources, but it did not report program income properly in 
FY 2010.   
OIG recommended that the Unit (1) ensure that periodic supervisory reviews are 
documented in Unit case files; (2) complete revisions to its policies and procedures 
manual to reflect current Unit operations, and revise its MOU with SCDHHS to reflect 
current law and practice; and (3) ensure that program income is reported properly.  
On the basis of information received from the Unit in 2013, OIG considered the 
recommendations implemented. 
_____________________________________________________________________________________________________________________________ 
15 Kaiser Family Foundation, Total Monthly Medicaid/CHIP Enrollment and Pre-ACA Enrollment, September 
2019, https://www.kff.org/health-reform/state-indicator/total-monthly-medicaid-and-chip-
enrollment/?currentTimeframe=14&selectedRows=%7B%22states%22:%7B%22south-
carolina%22:%7B%7D%7D%7D&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7
D.  Accessed on February 18, 2021. 
16  Kaiser Family Foundation, A View from the States: Key Medicaid Policy Changes, October 2019, 
http://files.kff.org/attachment/Report-A-View-from-the-States-Key-Medicaid-Policy-Changes.  Accessed on 
February 18, 2021.   
17 OIG, MFCU Statistical Data for FY 2020, https://oig.hhs.gov/fraud/medicaid-fraud-control-units-
mfcu/expenditures_statistics/fy2020-statistical-chart.pdf.  Accessed on March 19, 2021. 
18 OIG, South Carolina State Medicaid Fraud Control Unit: 2011 Onsite Review, 
https://oig.hhs.gov/oei/reports/oei-09-11-00610.pdf.  Accessed on December 9, 2020. 
 
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Background | 4  Methodology 
We conducted an inspection of the South Carolina MFCU in January 2021.   Because 
of the COVID-19 pandemic, the OIG team conducted the inspection remotely using a 
virtual format.  Our inspection covered the 3-year period of FYs 20182020.  We 
based the inspection on an analysis of data and information from 6 sources: (1) Unit 
documentation, such as policies and procedures; (2) financial documentation; 
(3) structured interviews with key stakeholders; (4) structured interviews with Unit 
managers and selected staff; (5) a review of a random sample of 88 case files from the 
464 nonglobal case files that were open at some point during the review period; and 
(6) 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.  See the Detailed Methodology beginning on page 22 of this report.     
In examining the Units operations and performance, we applied the published MFCU 
performance standards, but did not assess adherence to every performance indicator 
for each of the 12 performance standards. 
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 are other OIG evaluations, including internal and 
external peer review. 
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Background | 5  PERFORMANCE ASSESSMENT 
 
Below are the results of OIGs assessment of the performance and 
operations of the South Carolina MFCU.  We identified the Units case 
outcomes; evaluated whether the Unit complied with legal requirements; 
and, for each of the performance standards, made finding(s) and/or 
observation(s), including highlighting a beneficial practice.  We found that 
the South Carolina MFCU successfully investigated and prosecuted cases 
of Medicaid fraud and patient abuse or neglect when compared to 
MFCUs with similar staff sizes.  We also observed that the Units State and 
Federal partners reported positive, cooperative relationships and held the 
South Carolina MFCU in high respect.  We found six areas in which the 
Unit should improve its adherence to program standards and/or 
requirements.     
CASE OUTCOMES19 
The Unit reported 83 indictments, 47 convictions, and 40 civil 
settlements and judgments for FYs 20182020.  Of the 47 convictions, 
29 convictions involved patient abuse or neglect and 18 convictions 
involved Medicaid provider fraud.   
The Unit reported total recoveries of $28 million for FYs 20182020.
(See Exhibit 1 for the sources of those recoveries.)   
_____________________________________________________________________________________________________________________________
19 OIG provides information on MFCU operations and outcomes, but it does not direct or encourage 
MFCUs to investigate or prosecute a specific number of cases.  MFCU investigators and prosecutors 
should apply professional judgment and discretion in determining what criminal and civil cases to 
pursue. 
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Performance Assessment | 6  Exhibit 1: The Unit reported combined civil and criminal 
recoveries of $28 million (FYs 20182020). 
Source: OIG analysis of Unit statistical data, FYs 20182020. 
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. 
STANDARD 1  A Unit conforms with all applicable statutes, regulations, and policy 
directives. 
Observation From the information we reviewed, the South Carolina Unit did not 
comply with two applicable legal requirements.  We identified one 
compliance concern related to the Units reporting of convictions and 
adverse actions to Federal partners, as explained in the finding under 
Performance Standard 8 below, and one compliance concern related to a 
Federal regulation regarding its MOU with the State Medicaid agency, as 
explained in the finding under Performance Standard 10 below.    
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. 
Finding 
Low staff levels and significant turnover contributed to large caseloads 
for Unit staff.  According to Performance Standard 2(b), the Unit should 
employ a total number of professional staff that enables the Unit to 
effectively investigate and prosecute (or refer for prosecution) an 
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Performance Assessment | 7  appropriate volume of case referrals and workload for both Medicaid 
fraud and patient abuse and neglect.  We found that (1) the Units staff 
levels were low in relation to the States Medicaid program expenditures; 
(2) low staff size and high turnover contributed to large caseloads for Unit
staff; and (3) low MFCU staff salaries led to significant turnover among
management and staff.
The Units staff levels were low in relation to the States Medicaid 
program expenditures.  At the end of FY 2020, the Unit was approved for 
17 staff and employed 14 staff; by the time of our inspection in January 
2021, the Unit employed 13 staff.20  In FY 2020, South Carolinas Medicaid 
expenditures were $7.03 billion.  We found that the Units staff size was 
low compared to that of all other MFCUs relative to the respective States 
Medicaid program expenditures.  While we did not find specific evidence 
that the limited staff size negatively affected the Units case outcomes, 
Unit managers expressed concerns that the Unit did not have enough 
staff to effectively investigate and prosecute the volume of case referrals 
received by the Unit. 
Unit investigators and other staff carried large caseloads.  Unit managers 
and staff reported, and we concluded, that the caseloads for Unit 
investigators and other staff were too large.  One manager described the 
caseloads as discouraging to Unit staff and negatively affecting morale 
and the timeliness of casework.  See Exhibit 2 for the caseloads for Unit 
investigators, attorneys, and the auditor at the time of our inspection.   
Exhibit 2: Staff Caseloads for Unit Investigators, Attorneys, and 
Auditor  
*Note: At the time of our inspection, the Units newest investigator, hired in November 2020, was
assigned to 7 cases.  All other investigators carried between 18-52 cases.  The median caseload for all
Unit investigators was 35.
Source: South Carolina MFCU, January 2021. 
_____________________________________________________________________________________________________________________________
20 At the time of our inspection, the Unit was taking steps to fill the three vacancies.  
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Performance Assessment | 8  We also found that the Units chief investigator and director, in addition 
to having supervisory responsibilities, carried large caseloads.  At the time 
of our inspection, the chief investigator had 42 cases, and the director had 
74 cases.  In OIGs experience, it is unusual for investigative and attorney 
supervisors to carry large caseloads while also having managerial duties.  
In OIGs judgment, depending on the complexity of the particular cases, 
carrying caseloads of this magnitude can lead to investigative delays, and 
staff with such caseloads may not adequately document their cases.     
Unit staff reported that low MFCU staff salaries led to significant 
turnover among Unit staff.  Although the Units staff levels remained 
relatively consistent during the review period (16 staff at the ends of  
FYs 2018 and 2019; 14 staff at the end of FY 2020; and 13 staff at the time 
of our inspection in January 2021), the Unit experienced significant staff 
turnover.  During the 3-year review period, 5 employees left the Unit, 
including 2 attorneys, 1 of whom was the Unit director; 2 investigators; 
and 1 auditor.  In the 3 months following the end of the review period 
(September 30, 2020) and our inspection in January 2021, 4 more 
investigators, including the chief investigator, left the Unit.21  Additionally, 
the Units auditor resigned in February 2021, subsequent to our 
inspection.    
Unit managers and staff attributed the high turnover to the low salaries 
available to South Carolina State employees, explaining that many 
experienced staff left the Unit for more competitive salaries in the private 
sector.  For example, in FY 2020, the base salaries for Unit investigators 
ranged between $48,867 and $61,200.22  One Unit manager reported that 
State managed care organizations (MCOs) had offered some MFCU 
investigators positions with the MCO with salaries that were 
$25,000-$30,000 greater than the Units salaries for those investigators.  
Managers and staff described the salaries of Unit employees as an 
obstacle to hiring and retaining qualified staff.  Unit managers expressed 
concern that given the current salaries, the Unit will likely continue to lose 
talented staff to the private sector and to higher-paying government jobs. 
_____________________________________________________________________________________________________________________________ 
21 The Unit hired two staff membersone attorney and one investigatorbetween October 1, 2020, and 
our inspection in January 2021. 
 
22 OIG compared the FY 2020 salaries of South Carolina Unit professional staff to those of professional 
Unit staff in the neighboring States of Georgia and North Carolina.  OIG found that attorneys in the 
South Carolina Unit earned base salaries between $53,550 and $68,454 (except for one senior attorney 
who earned $100,440), while attorneys in the North Carolina and Georgia Units earned between $78,849 
and $143,211.  Investigators at the South Carolina MFCU had a higher starting salary than in the two 
neighboring States, but earned base salaries between $48,867 and $61,200, compared to investigators in 
the North Carolina and Georgia Units who earned base salaries between $41,291 and $113,334.  The 
auditor in the South Carolina Unit earned a base salary of $63,240, while auditors in the North Carolina 
and Georgia Units earned base salaries between $42,840 and $84,389.  In our analysis, we did not 
examine the wider labor market for attorneys, investigators, and auditors in the three States.   
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Performance Assessment | 9  In January 2016, a contractor hired by the South Carolina Department of 
Administration, Human Resources Division, issued a report detailing a 
review of the States employee classification and compensation plan.  The 
review found that South Carolina State employee salaries were 
uncompetitive, lagging behind those of other States by an average of 
15 percent and behind those in South Carolinas private sector by 
18 percent.  The report acknowledged that the uncompetitive salaries 
created challenges in both recruitment and retention of qualified State 
employees.  The report recommended that the South Carolina Human 
Resources Division adjust pay ranges to be consistent with the labor 
market and create a more consistent approach to performance-based 
pay.  As a result, in December 2020, State Representative Gilda Cobb-
Hunter sponsored a bill proposing to direct the Human Resources 
Division to implement the studys recommendations and to increase State 
employee salaries to account for inflation.23  The bill was referred to the 
South Carolina House Committee on Ways and Means in January 2021. 
In interviews, Unit managers explained that the departures of Unit 
investigators and attorneys negatively affected the efficiency and 
timeliness of Unit casework because cases needed to be reassigned, and 
newly assigned staff needed time to become familiar with the cases.  Unit 
managers also stated that managers and staff carried large caseloads that 
were unsustainable because, with each turnover in staff, cases were 
reassigned to individuals who were already carrying full caseloads.  
Further, one manager explained that the increased caseloads caused by 
the turnover left some Unit staff overworked, which made them more 
likely to seek or accept higher-paying jobs elsewhere. 
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 written policies and procedures.  The Unit 
maintained a Medicaid Fraud Control Unit Policies and Procedures 
Manual.  The policies and procedures were electronically available to 
MFCU employees.   
STANDARD 4  A Unit takes steps to maintain an adequate volume and quality of 
referrals from the State Medicaid agency and other sources. 
Observations  The Unit took steps to encourage referrals from the State Medicaid 
agency and additional referral sources.  To encourage referrals, the Unit 
_____________________________________________________________________________________________________________________________
23 A.B. 3342, House, 124 Reg. Sess. (SC 2021). 
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Performance Assessment | 10  attended monthly meetings with the State Medicaid agency and 
bimonthly meetings with staff from the State Medicaid agency and MCOs 
to discuss topics such as referrals and the status of investigations.  During 
the meetings, the Unit also provided training on what constitutes a quality 
referral.  Additionally, the Unit maintained a toll-free hotline and an email 
address that the public could use to report potential provider fraud 
and/or patient abuse or neglect.  Further, to increase awareness of the 
Unit, the Director provided presentations to the State Department of 
Aging regarding the mission of the MFCU and also presented at the 
Medicaid Program Integrity Institute on the topic of Working with Your 
MFCU.    
During the review period, the Unit received a total of 478 case referrals, of 
which 404 resulted in formal investigations.  Appendix A includes Unit 
referrals by source for FYs 20182020.   
Beneficial Practice  Unit management notified referral sources of the Units decision to 
open formal investigations of incoming referrals.  We identified as a 
beneficial practice the Units high level of communication with the State 
Medicaid agency and other referral sources regarding the Units decision 
to accept or decline referrals.  Through secure electronic communications, 
and as appropriate and permissible given the circumstances of each 
referral, the Unit routinely notified the Medicaid agency and other 
referring agencies of the Units decision to formally investigate fraud 
referrals submitted to the Unit. 
Unit management also notified the referring agency and the State 
Medicaid agencys Program Integrity Division when the Unit decided not 
to formally investigate fraud referrals made to the Unit.  For referrals 
received from private citizens, including referrals received through the 
Units hotline, the Unit, on a case-by-case basis, also notified the 
individual who made the referral of the Units decision not to formally 
investigate the matter.  When the Unit decided not to open a formal 
investigation for referrals of patient abuse or neglect, the Unit established 
a general practice of notifying the referring family member, facility, or 
regional ombudsmans office as appropriate.  Further, the Unit also made 
efforts to notify referral sources when the Unit lacked jurisdiction over the 
matters alleged in a referral and referred matters to other law 
enforcement agencies or regulatory entities. 
State Medicaid agency management lauded the Units communication 
regarding referrals and resulting investigations as a good practice, 
stating that Unit staff were very responsive and open to back and forth 
communication.  Additionally, officials from the State Long-Term Care 
Ombudsmans office stated that the Units response to referrals was 
encouraging and that frequent communication and feedback from the 
Unit regarding referrals was wonderful.     
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Performance Assessment | 11  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 All case files contained documentation of supervisory approval to open 
and, as appropriate, supervisory approval to close.  According to 
Performance Standard 5(b), supervisors should approve the opening and 
closing of all investigations, review the progress of cases, and take action 
as necessary to ensure that each stage of the investigation and 
prosecution is completed within an appropriate timeframe.  We found 
that all of the sampled case files contained documentation of supervisory 
approval to open, and as appropriate, supervisory approval to close.  See 
Appendix B for the point estimates and the confidence intervals for the 
case file reviews. 
Finding  In 16 percent of the Units case files, the Unit did not document the 
reason for significant investigative delays.  Performance Standard 5(c) 
states that delays in investigation and prosecution should be limited to 
situations imposed by resource constraints or other exigencies.  We 
found that 16 percent of the Units investigations had significant delays 
that were not explained in the case file.  The unexplained delays ranged 
from approximately 6 to 18 months.  The Unit attributed the unexplained 
delays to resource constraints related to staff turnover and large 
caseloads.  The Unit also noted that some delays that occurred in the 
spring and summer of 2020 resulted from COVID-19-related restrictions 
in the State.  Unit management explained that for some cases, the causes 
of delays may have been documented in separate but related case files 
that were not selected for our review during this inspection.24 
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 caseload included both fraud cases and patient abuse or 
neglect cases, covering a broad mix of provider types.  Of the 
464 nonglobal cases that were open during the review period, 60 percent 
(280 cases) involved provider fraud and 40 percent (184 cases) involved 
patient abuse or neglect.  During the review period, the Units cases 
_____________________________________________________________________________________________________________________________
24 We confirmed that in at least one instance, documentation explaining the cause of an investigative 
delay was noted in another separate but related case file.  However, we did not formally review all related 
case files that were not selected as part of our case file review sample.   
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Performance Assessment | 12  covered 50 provider types, including medical doctors, home health care 
providers, and pharmaceutical manufacturers. 
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. 
Findings  The Units case management system posed challenges for retrieving 
case information and performance data.  Performance Standard 7(f) 
states that a Unit should have a system that allows for the monitoring and 
reporting of case information.  At the time of our inspection, the Unit 
used the South Carolina Office of the Attorney Generals (OAGs) case 
management system and document repository to track key case 
information electronically.  One supervising official stated that all divisions 
within the OAG were required to use the same case management system.  
Although OAG officials began a project in 2018 to adopt a new case 
management system, a new system had not been adopted at the time of 
our inspection.   
Unit management and staff stated, and we found, that the Units current 
case management system does not allow the Unit to monitor case 
progression.  To mitigate the shortcomings of the case management 
system, the Unit used standard forms and spreadsheets to document case 
information and progression.  During the course of our inspection, we 
provided the Unit with technical assistance regarding additional methods 
by which the Unit may attempt to mitigate case management system 
inefficiencies, including possible ways to document and track related 
cases and cases worked jointly with other agencies. 
Additionally, we found that the Unit did not store and maintain its case 
information in a manner that allowed the Unit to efficiently generate 
performance data reports.  Rather than using the case management 
system to generate and report case information, the Unit maintained a 
separate Master Case List spreadsheet to track performance data 
required for State and Federal reporting purposes. 
The Unit did not consistently document periodic supervisory reviews in 
its case files.  According to Performance Standard 7(a), reviews by 
supervisors should be conducted periodically, consistent with the Units 
policies and procedures, and should be noted in the case file.  During 
OIGs 2011 onsite review of the Unit, we found inconsistencies in the 
Units periodic supervisory reviews.  Specifically, we found in that review 
that 61 percent of the Units case files were missing documentation of 
periodic supervisory reviews.  We recommended that the Unit ensure that 
periodic supervisory reviews are documented in the Units case files.  In 
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Performance Assessment | 13  response to the recommendation, in 2013 the Unit developed a case 
status form to document periodic supervisory reviews.  During our recent 
inspection, OIG observed that while the Unit relied on the case status 
form to document periodic supervisory reviews, the documentation of 
those reviews remained inconsistent. 
The Units policy manual stated that quarterly file reviews would be held 
in January, April, July, and October.  However, Unit management 
explained that due to regular engagement and interaction within the Unit, 
cases were generally discussed in team meetings or other informal 
conversations on a regular basis, but that these informal discussions were 
not consistently documented in the Units case files.  The Unit director 
stated that during the review period, Unit management had intermittently 
attempted to hold at least quarterly supervisory case file review meetings 
and that the Unit intended to institute formal quarterly case reviews in the 
future.   
We reviewed sampled case files to determine whether they contained 
documentation of supervisory reviews in January, April, July, and October, 
consistent with the Units written policy.  We found that 83 percent of 
case files lacked documentation of one or more periodic supervisory 
reviews consistent with this policy.   
Because the Unit director informed us that the Unit had attempted to 
hold quarterly reviews at various times within the review period, we also 
reviewed sampled case files open longer than 90 days to determine 
whether they contained consistent documentation of quarterly 
supervisory reviews.  We found that 82 percent of case files open longer 
than 90 days lacked documentation of one or more periodic supervisory 
reviews.  Some case files contained no documentation of supervisory 
reviews or contained gaps of more than 3 months to over 2 years with no 
supervisory reviews documented in the file. 
Periodic supervisory reviews provide supervisors and investigators the 
opportunity to discuss the status of and next steps for Unit investigations. 
The reviews also serve as tools for supervisors to hold investigators 
accountable for their case file documentation as investigations progress. 
The lack of consistent documentation of these reviews may make it 
difficult for managers to ensure that these discussions are occurring 
regularly and that cases are completed timely.  Additionally, ensuring that 
case files are reviewed at regular intervals can help Unit managers and 
staff ensure that cases progress timely even if there is turnover in the staff 
assigned to investigations. 
 
 
 
 
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Performance Assessment | 14  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 cooperated with OIG and the U.S. Attorneys Office in the 
Observation 
investigation and prosecution of fraud cases.  During the review period, 
  the Unit maintained an excellent working relationship with OIG and jointly 
investigated a total of 21 cases.  One OIG investigative manager described 
the Unit as a great law enforcement partner with a cadre of smart, 
knowledgeable, and dependable staff. 
We identified a strong relationship and high level of collaboration 
between the MFCU and the U.S. Attorneys Office in South Carolina.  We 
observed that the Unit maintained a strong relationship with both the 
criminal and civil divisions of the U.S. Attorneys Office.  One Assistant U.S. 
Attorney attributed the successful relationship to the established work 
history between the U.S. Attorneys Office and the MFCU and stated that 
the MFCU did an excellent job investigating and prosecuting cases and 
was a well-respected group in the South Carolina criminal law 
community.  The Units strong relationship with the U.S. Attorneys Office 
may have also been partially attributable to the fact that the former MFCU 
Director now serves as an Assistant U.S. Attorney in the offices Civil 
Division.25     
 
Finding  The Unit did not consistently report convictions or adverse actions to 
Federal partners within the appropriate timeframes consistent with 
  regulatory requirements.  According to Federal requirements and 
Performance Standard 8(f), Units should transmit to OIGwithin 30 days 
of sentencingreports of all convictions so that convicted individuals can 
be excluded from Federal health care programs.26  The Unit did not report 
10 (24 percent) of its 41 convictions to OIG within the appropriate 
timeframe.  Specifically, the Unit reported 8 convictions within 31 to 
60 days after sentencing and 2 convictions more than 90 days after 
sentencing.  The Unit attributed three of the late submissions to delays in 
receiving the necessary information from the court.  
Federal regulations also require that Units report any adverse actions 
resulting from investigations or prosecution of health care providers to 
_____________________________________________________________________________________________________________________________ 
25 At the time of our inspection, the previous MFCU Director, who had served as Director from 2016 to 
2019, served as an Assistant U.S. Attorney in the Offices Civil Division.  During her tenure as MFCU 
Director, she was cross-designated as a Special Assistant U.S. Attorney and jointly prosecuted cases with 
the U.S. Attorneys Office.   
26 Effective May 21, 2019, 42 CFR 1007.11(g) required 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. 
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Performance Assessment | 15  the NPDB within 30 calendar days of the date of the final adverse action.27  
Performance Standard 8(g) also states that the Unit should report 
qualifying cases to the NPDB.28  The Unit did not report 15 (37 percent) of 
its 41 adverse actions to the NPDB within the appropriate timeframe.  Of 
the 15 adverse actions submitted late, 12 were submitted within 31 to 
60 days after the action, 1 was submitted within 61 to 90 days after the 
action, and 2 were submitted more than 90 days after the action.   
Unit management attributed the delayed submissions to internal 
processing delays such as State holidays and employee leave, delays in 
obtaining necessary court documents timely, and delays resulting from 
the COVID-19 pandemic.   
STANDARD 9  A Unit makes statutory or programmatic recommendations, when 
  warranted, to the State government. 
Observation 
The Unit made program recommendations to the State Medicaid 
agency.  The Unit identified potential program deficiencies and made 
program recommendations to the State Medicaid agency.  For example, 
during the review period, the Unit recommended that the State Medicaid 
agency (1) coordinate with the South Carolina Labor Licensing and 
Regulations investigators to address cases of potential Medicaid fraud; 
and (2) revoke the enrollment of providers who submit false information 
on their provider enrollment applications.  We confirmed that the State 
Medicaid agency had implemented these recommendations.    
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. 
 
Finding  The Units MOU with the State Medicaid agency generally reflected 
current practice, policy, and legal requirements with the exception of a 
regulatory requirement regarding procedures for the receipt of 
 
managed care referrals.  The MFCU and the SCDHHS had an MOU 
executed in August 2020.29  The MOU generally reflected current 
practice, policy, and legal requirements, with the exception of the 
_____________________________________________________________________________________________________________________________ 
27 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). 
28 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.  If a Unit fails to report adverse actions to the NPDB, individuals may be able to find new health 
care employment with an organization that is not aware of the adverse action made against them. 
29 During most of our review period, the MFCU and SCDHHS operated under an MOU executed in April 
2013.   
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Performance Assessment | 16  regulatory requirement that the Unit and the State Medicaid agency 
establish procedures by which the Unit will receive referrals of potential 
fraud from MCOs, if applicable.  The Unit provided OIG with a document 
that included procedures for receiving MCO referrals; however, the 
process was not incorporated by reference or otherwise included in the 
MOU.     
During our 2011 inspection of the Unit, we found that the Unit had not 
updated its MOU with the State Medicaid agency to reflect current law 
and practices in place at the time of our inspection.  We recommended 
that the Unit revise the MOU to reflect the current practices and legal 
requirements.  The Unit and the State Medicaid agency amended the 
MOU in 2013 to adhere to requirements in place at that time.  The Unit 
and the State Medicaid agency again amended the MOU in 2020.   
 
MFCU regulations effective on May 21, 2019, require the Unit and the 
Medicaid agency to agree to establish procedures by which the Unit will 
receive referrals of potential fraud from MCOs either directly or through 
the Medicaid agency.30  We found that the MOUs in place during our 
inspection period did not include such procedures, either expressly or by 
reference.  Further, despite the existence of written procedures 
regarding the receipt of MCO referrals, there did not appear to be a 
consistent understanding as to whether referrals to the Unit were to be 
sent directly from the MCOs or indirectly through the State Medicaid 
agency. 
 
STANDARD 11  A Unit exercises proper fiscal control over its resources. 
 
 
From OIGs limited review, we identified no deficiencies in the Units 
Observation 
fiscal control of its resources.  From the Units responses to a detailed 
fiscal controls questionnaire and follow-up with fiscal staff, we identified 
no internal control issues related to the Units budget process, accounting 
system, cash management, procurement, electronic data security, 
property, or personnel.   
 
STANDARD 12  A Unit conducts training that aids in the mission of the Unit. 
 
 
Observation  The Unit maintained a training plan for each professional discipline.  
The Unit had an annual training plan that required Unit attorneys, 
investigators, and auditors to complete an annual minimum number of 
_____________________________________________________________________________________________________________________________ 
30 42 CFR  1007.9(d)(3)(iv). 
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Performance Assessment | 17  training hours.  The plan required Unit employees to complete in-house 
basic training, as well as Medicaid fraud and discipline-specific training. 
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Performance Assessment | 18   
CONCLUSION AND RECOMMENDATIONS 
 
From the information reviewed, we found that the South Carolina MFCU successfully 
investigated and prosecuted cases of Medicaid fraud and patient abuse or neglect 
when compared to MFCUs with similar staff sizes.  We also observed that the Units 
State and Federal partners reported positive, cooperative relationships and held the 
South Carolina MFCU in high respect.  For FYs 20182020, we identified six areas in 
which the Unit should improve its adherence to program standards and/or 
requirements.  We found that low staff levels and significant turnover contributed to 
large caseloads for Unit staff.  We also found that in 16 percent of the Units case 
files, the Unit did not document the reason for significant investigative delays.  
Further, the Units case management system posed challenges for retrieving case 
information, and the Unit did not consistently document periodic supervisory reviews 
in its case files.  Additionally, we found that the Unit did not consistently report 
convictions or adverse actions to Federal partners within the appropriate timeframes 
consistent with regulatory requirements.  We also found that the Units MOU with the 
State Medicaid agency generally reflected current practice, policy, and legal 
requirements with the exception of a regulatory requirement regarding procedures 
for the receipt of managed care referrals.   
We also made observations regarding Unit operations and practices, including a 
beneficial practice employed by the Unit that may serve as a model for other Units: 
Unit management notified referral sources of the Units decision to open formal 
investigations of incoming referrals.   
To address the six findings identified in this report, we 
recommend that the South Carolina Unit: 
Assess the adequacy of existing staffing levels, and if 
appropriate, consider a plan to expand the size of the Unit 
The Unit should assess whether staffing levels are sufficient for investigating cases of 
criminal and civil fraud and patient abuse and neglect in a timely manner and 
commensurate with the States total Medicaid program expenditures.  The Unit 
should share its findings with OIG, and on the basis of its assessment, the Unit should, 
if appropriate, consider an expansion plan to increase the number of staff to meet the 
needs of the Medicaid program.  The Unit could also share the plan with the State 
legislature as the legislature considers proposed legislation to reform the States 
current compensation system.  The Units expansion plan could include plans for 
(1) seeking approval for additional staff to enable the Unit to effectively investigate
and prosecute an appropriate volume of case referrals and workload; (2) improving
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Conclusion and Recommendations | 19  employee retention and reducing turnover (e.g., a review of current salaries and 
determination of what adjustments will need to be made to compete in the current 
market); and (3) revising the Units caseload management practices to lower staff 
caseloads, either by using different case management or prioritization techniques or 
through hiring additional staff.  
Take steps to reduce investigation delays and ensure that the 
reasons for delays are documented in the case files  
Except for unavoidable delays imposed by resource constraints or other exigencies, 
the Unit should avoid extended delays to investigations.  To reduce investigation 
delays, the Unit should review its caseload management practices, and if necessary, 
develop a plan to lower staff caseloads by using different case management or 
prioritization techniques and/or hiring additional staff.  Further, as recommended 
below, the Unit should conduct periodic supervisory case file reviews, which will help 
ensure that cases do not have unnecessary investigative delays.  Additionally, to 
demonstrate that extended delays were imposed by resource constraints or other 
exigencies, the Unit should document such occurrences in the case files. 
Seek approval from the South Carolina Office of the Attorney 
General to implement a new case management system  
The Unit should seek approval from OAG officials to implement a new system that 
allows for efficient access to case information and performance data.  While awaiting 
approval for a new case management system, the Unit should continue to take steps 
to mitigate the shortcomings of the current case management system and to improve 
access to case information and performance data.    
Take steps to ensure that supervisory reviews of Unit case files 
are conducted periodically and documented in accordance with 
Unit policy 
The Unit should take steps to ensure that supervisory reviews of Unit case files are 
conducted periodically, consistent with Unit policy, and documented in the Units case 
files.  The Unit should include in its policies and procedures manual a specific 
frequency for conducting periodic supervisory reviews of Unit case files and take steps 
to ensure that supervisors and staff adhere to the policy.  For example, the Unit could 
consider implementing automatic reminders to ensure that reviews are conducted 
according to Unit policy.  The Unit should also include in its policies and procedures 
manual processes for ensuring that periodic supervisory case file reviews are 
documented in the Units case files and take steps to ensure that supervisors and staff 
adhere to the Unit policy.  
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Conclusion and Recommendations | 20  Take steps to ensure that all convictions and adverse actions are 
reported to Federal partners within the appropriate timeframes  
The Unit should take steps to ensure that it consistently reports all convictions 
obtained in any case investigated by the Unit to OIG within 30 days of sentencing, or 
as soon as practicable if the Unit encounters delays in receiving the necessary 
information from the court, and adverse actions to the NPDB within 30 days of the 
action.  The Unit should inform staff that all convictions must be reported to Federal 
partners timely.  Additionally, the Unit could implement automated reminders that 
alert Unit staff about when to report convictions and adverse actions to Federal 
partners. 
Revise the Units MOU with the State Medicaid agency to 
establish procedures by which the Unit will receive referrals of 
potential fraud from managed care organizations 
To ensure compliance with Federal regulations found at 42 CFR  1007.9(d)(3)(iv), the 
Unit should revise its MOU with SCDHHS to include procedures, either as part of the 
MOU or by reference to another document, by which the Unit will receive referrals of 
potential fraud originating from MCOs.    
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Conclusion and Recommendations | 21   
 UNIT COMMENTS AND OIG RESPONSE 
 
 
The Unit concurred with all six recommendations.   
The Unit concurred with our first recommendation to assess the adequacy of existing 
staffing levels, and if appropriate, consider a plan to expand the size of the Unit.  The 
Unit stated that it assessed its current staffing level and caseloads and determined 
that it would be appropriate to expand the size of the Unit.  The Unit stated that it will 
seek to add two investigators and one auditor in FY 2022.  The Unit also stated that it 
will assess the Units performance during FY 2022 to determine if more staff should be 
added in FY 2023.  
The Unit also concurred with our second recommendation to take steps to reduce 
investigation delays and ensure that the reasons for delays are documented in the 
case files.  The Unit stated that it is implementing measures to reduce investigative 
delays.  For example, the Unit stated that it is taking steps to increase investigative 
staff, thereby reducing investigators caseloads, and that the Units newly appointed 
Assistant Chief Investigator is assisting with the vetting of referrals to reduce the 
overall number of cases opened.  The Unit also stated that it is taking steps to 
improve documentation of delays by improving the ease of access to its electronic 
case status forms used to record all case activity. 
The Unit concurred with our third recommendation to seek approval from the OAG to 
implement a new case management system.  The Unit stated that it notified the 
OAGs management of its case tracking and reporting needs and that the OAG is 
evaluating new case management options.   
The Unit concurred with our fourth recommendation to take steps to ensure that 
supervisory reviews of Unit case files are conducted periodically and documented in 
accordance with Unit policy.  The Unit stated that it revised its policy to require 
quarterly supervisory reviews of Unit case files and trained staff regarding the 
requirements of those reviews and how they should be recorded.  Additionally, the 
Unit stated that it created Deputy Director and Assistant Chief Investigator positions 
to assist with this responsibility.  Finally, the Unit stated that it revised its case status 
form to include a field for recording dates of supervisory reviews. 
The Unit also concurred with our fifth recommendation to take steps to ensure that all 
convictions and adverse actions are reported to Federal partners within the 
appropriate timeframes.  The Unit stated that the Units attorneys will be primarily 
responsible for ensuring that convictions and adverse actions are reported within 
appropriate timeframes.   
Finally, the Unit concurred with our sixth recommendation, that the Unit revise its 
MOU with the State Medicaid agency to establish procedures by which the Unit will 
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Unit Comments and OIG Response | 22  receive referrals of potential fraud from MCOs.  The Unit stated that it intends to 
revise its MOU accordingly.     
For the full text of the Units comments, see Appendix C.
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Unit Comments and OIG Response | 23  DETAILED METHODOLOGY 
 
 
 
Data Collection and Analysis 
We collected and analyzed data from the six sources below to identify any 
opportunities for improvement and instances in which the Unit did not adhere to the 
MFCU performance standards or was not operating in accordance with laws, 
regulations, or policy transmittals.  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.  Because we conducted the 
inspection remotely due to the COVID-19 pandemic, we were unable to observe the 
Units physical workspace in person.   
Review of Unit Documentation   
Prior to the inspection, we reviewed the recertification analysis for FYs 20182020, 
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, SCDHHS; (4) the SCDHHS 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 20182020.  
Additionally, we examined the recommendations from the 2011 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 inspection, we analyzed the Units response to a questionnaire about internal 
controls and conducted a review of the Units financial status reports.  We followed up 
with officials in the South Carolina Office of the Attorney General and the Unit to 
clarify any issues identified in the questionnaire about internal controls.   
Interviews with Key Stakeholders   
In October 2020, we interviewed key stakeholders, including officials in SCDHHS, the 
U.S. Attorneys Office, the State Long-Term Care Ombudsmans Office, and the South 
Carolina Department of Health and Environmental Control.  We also interviewed two 
special agents from OIGs Office of Investigations who work 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. 
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Detailed Methodology | 24  Interviews with Unit Management and Selected Staff   
We conducted structured interviews with the Units management and selected staff in 
January 2021.  We also conducted a structured interview with the Units chief 
investigator in October 2020 before she departed the Unit.  Additional Unit 
management that we interviewed included the director, the deputy director, and the 
new chief investigator.  Of the selected staff, we interviewed one attorney, two 
investigators, one auditor, and one nurse investigator.  In addition, we interviewed the 
supervisor of the Unitthe Senior Assistant Deputy Attorney General.  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.   
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 20182020 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 556.   
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 92 global 
cases, leaving 464 case files.   
We then selected a simple random sample of 88 cases from the population of 
464 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 88 case files for adherence to the 
relevant performance standards and compliance with statute, regulation, and policy 
transmittals.  During the review of the sampled case files, 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 41 convictions submitted to OIG for program exclusion during 
our review period, and all 41 adverse actions submitted to the NPDB during our 
review period.  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 20182020.  We also assessed the timeliness of the submissions to OIG 
and the NPDB.
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Detailed Methodology | 25   
APPENDIX A 
 
Unit Referrals by Source for Fiscal Years 2018 Through 2020 
 
 
FY 2018  FY 2019  FY 2020  Grand Totals  
Fraud  Abuse or  Fraud  Abuse or  Fraud  Abuse or  Fraud  Abuse or 
Referral Source 
Neglect  Neglect  Neglect  Neglect 
Adult Protective 
0  2  0  0  0  1  0  3 
Services 
Anonymous  0  0  4  2  2  0  6  2 
HHSOffice of 
Inspector General  3  0  6  1  3  0  12  1 
(OIG) 
Law Enforcement 
10  7  4  14  1  14  15  35 
Other  
Local Prosecutor  0  5  0  0  0  0  0  5 
Long-Term Care 
1  4  0  8  0  8  1  20 
Ombudsman 
Managed Care 
7  0  22  0  15  0  44  0 
Organizations 
Medicaid Agency 
0  0  0  0  1  0  1  0 
Other 
Medicaid Agency 
6  0  4  0  10  1  20  1 
PI/SURS1 
Private Citizen  22  14  9  2  14  8  45  24 
Private Health 
0  0  1  0  0  0  1  0 
Insurer 
Provider  5  15  4  11  18  24  27  50 
State Agency Other  5  3  8  6  10  6  23  15 
Other  17  0  31  6  63  10  111  16 
     Total  76  50  93  50  137  72  306  172 
     Annual Total  126  143  209  478 
Source: OIG analysis of Unit Annual Statistical Reports, FYs 201820. 
1 The abbreviation PI stands for program integrity; the abbreviation SURS stands for Surveillance and Utilization Reviews.
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Appendix A | 26   
APPENDIX B 
 
Point Estimates and 95-Percent Confidence Intervals of Case File 
Reviews 
95-Percent Confidence
Point 
Interval 
Estimate Description  Sample Size 
Estimate 
Lower  Upper 
Percentage of All Cases with 
88  37.5%  28.2%  47.6% 
Significant Investigative Delays 
Percentage of All Cases with 
Significant Investigative Delays That  88  15.9%  9.5%  24.4% 
Were Unexplained 
Percentage of All Cases Closed at 
88  51.1%  41.2%  61.0% 
the Time of OIGs Review 
Percentage of All Cases That Had 
88  100.0%  96.1%  100.0% 
Supervisory Approval To Open 
Percentage of All Closed Cases That 
45  100.0%  92.8%  100.0% 
Had Supervisory Approval To Close  
Percentage of All Cases That Did 
Not Contain Documentation of 
Supervisory Review in January, April,  88  83.0%  74.4%  89.7% 
July, and October According to Unit 
Policy 
Percentage of All Cases Open 
88  96.6%  90.9%  99.1% 
Longer Than 90 Days 
Percentage of All Case Files Open 
Longer Than 90 Days and That 
85  15.3%  8.9%  23.9% 
Contained No Documentation of 
Periodic Supervisory Review 
Percentage of All Case Files Open 
Longer Than 90 Days and That 
Contained Some Periodic  85  82.4%  73.4%  89.3% 
Supervisory Review, but Not 
Quarterly Supervisory Review 
Source: OIG analysis of South Carolina MFCU case files, 2021.
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Appendix B | 27  APPENDIX C: Unit Comments
August 31, 2021 
VIA ELECTRONIC MAIL 
Ms. Suzanne Murrin 
Deputy Inspector General 
Office of Inspector General 
Department of Health and Human Services 
Room 5660 Cohen Building 
330 Independence Ave, SW 
Washington, DC 20201 
RE: South Carolina MFCU 2020 Onsite Review 
Dear Ms. Murrin: 
The State of South Carolina is in receipt of HHS-OIGs draft report entitled South Carolina Medicaid Fraud 
Control Unit: 2020 Inspection, OEI-12-20-00610. The Unit would like to express its appreciation to OIG for its 
feedback contained in this draft report, as well as its cooperation and assistance as we navigated an 
unprecedented remote audit due to the COVID-19 pandemic.  
As requested, this letter contains the Units response to the recommendations contained in the report. 
RECOMMENDATION ONE: Assess the adequacy of existing staffing levels and, if appropriate, consider a 
plan to expand the size of the Unit. 
 
RESPONSE: The Unit concurs with this recommendation. 
The SCMFCU has assessed its current staffing level and case loads and determined that it is 
appropriate to expand the Unit. In FFY2022 the Unit seeks to add 2 additional special investigators 
and 1 additional auditor. The Unit will reassess performance during FFY2022 to determine if 
additional increases are appropriate for FFY2023.  
RECOMMENDATION TWO:Take steps to reduce investigation delays and ensure that the reasons for delays 
are documented in the case files. 
 
RESPONSE: The Unit concurs with this recommendation. 
The  Unit  is  implementing  measures  both  to  (i)  reduce  investigative  delays  and  (ii)  improve 
documentation of delays.  
South Carolina Attorney Generals Office 
Rembert C. Dennis Building   Post Office Box 11549   Columbia, SC 29211-1549 
803-734-3970     803-253-6283 fax     www.scag.gov 
South Carolina Medicaid Fraud Control Unit: 2020 Inspection  
OEI-12-20-00610                      Appendix C | 28 First, as noted above, the Unit is taking steps to increase its investigative staff, thereby, reducing case 
assignments per investigator. Additionally, the Units newly appointed Assistant Chief Investigator is 
assisting with vetting referrals prior to the Units opening a case, thus reducing the overall number of 
open cases. 
Second, the Unit has obtained assistance from SCAGs IT Department to improve ease of access to its 
electronic case status forms, used to record all case activity. This should promote more routine and 
timely updates.  
RECOMMENDATION THREE: Seek approval from the South Carolina Office of the Attorney General to 
implement a new case management system. 
RESPONSE: The Unit concurs with this recommendation. 
The Unit has notified SCAG management of its case tracking needs, specifically as related to HHS-
OIG reporting requirements. SCAG is currently evaluating new case management options.  
RECOMMENDATION FOUR: Take steps to ensure that supervisory reviews of Unit case files are conducted 
periodically and documented in accordance with Unit policy. 
RESPONSE: The Unit concurs with this recommendation. 
The Unit has already resolved this matter. As detailed below, in early 2021, the Unit implemented 
measures to: (i) update its policy regarding supervisory reviews, (ii) restructure so that supervisors 
have  adequate  time  to  conduct  case  reviews,  and  (iii)  revised  its  operations  to  highlight  this 
responsibility.  
First, the Units revised policy requires supervisory reviews be conducted at least once quarterly. Staff 
have been trained on what constitutes a supervisory review and how such reviews are to be recorded. 
Second, the Unit has created Deputy Director and Assistant Chief Investigator positions to distribute 
this responsibility.  
Third, the Unit has revised its case status form to include a field for recording dates of supervisory 
reviews.  This  will  provide  a  reminder  that  employees  are  obligated  to  participate  in  regular 
supervisory review meetings, as well as provide a method for verifying such reviews are occurring 
timely.  
RECOMMENDATION FIVE: Take steps to ensure that all convictions and adverse actions are reported to 
Federal partners within the appropriate timeframes.  
 
RESPONSE: The Unit concurs with this recommendation. 
Rather than the Director and an Administrative Assistant being responsible for ensuring this task is 
completed timely, the Units attorney staff will now be primarily responsible for ensuring such reports 
are drafted and submitted. Attorney staff are most familiar with case facts and the scheduling of 
sentencing hearings. This metric has also been added to the Units Master Case List.  
Office of the Attorney General 
Rembert C. Dennis Building   Post Office Box 11549   Columbia, SC 29211-1549 
803-734-3970     803-253-6283 fax     scag.gov 
 
South Carolina Medicaid Fraud Control Unit: 2020 Inspection
OEI-12-20-00610                      Appendix C | 29 RECOMMENDATION SIX: Revise the Units MOU with the State Medicaid agency to establish procedures 
by which the Unit will receive referrals of potential fraud from managed care organizations.  
RESPONSE: The Unit concurs with this recommendation. 
The Unit concurs with OIGs recommendation that its MOU with the State Medicaid agency be 
updated to reflect that the parties established procedures for receiving referrals from managed care 
organizations. 
Thank you for allowing the Unit an opportunity to respond to the 2020 audit review findings. We look forward 
to  working  with  you  to  continue  improving  the  Units  performance  by  implementing  the  above 
recommendations. If I may be of any additional assistance, please do not hesitate to contact me.  
With kind regards, I am, 
Very truly yours, 
Stephanie Goddard 
Assistant Deputy Attorney General 
Director, Medicaid Fraud Control Unit 
Office of the Attorney General 
Rembert C. Dennis Building   Post Office Box 11549   Columbia, SC 29211-1549 
803-734-3970     803-253-6283 fax     scag.gov 
 
South Carolina Medicaid Fraud Control Unit: 2020 Inspection
OEI-12-20-00610                      Appendix C | 30  
ACKNOWLEDGMENTS AND CONTACT 
 
 
Acknowledgments 
Jordan Clementi 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.  Office of Evaluation and 
Inspections staff who provided support include Kevin Farber, Christine Moritz, and 
Sarah Swisher.  
Two agents from the Office of Investigations also participated in the inspection and 
provided technical assistance to the Unit.  
This report was prepared under the direction of Richard Stern, Director of the 
Medicaid Fraud Policy and Oversight Division. 
Contact 
To obtain additional information concerning this report, contact the Office of Public 
Affairs at Public.Affairs@oig.hhs.gov.  OIG reports and other information can be found 
on the OIG website at oig.hhs.gov. 
Office of Inspector General 
U.S. Department of Health and Human Services 
330 Independence Avenue, SW 
Washington, DC 20201 
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  Acknowledgments and Contact | 31   
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: 
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 audits help reduce waste, abuse, and mismanagement and promote economy 
and efficiency throughout HHS. 
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. 
The Office of Investigations (OI) conducts criminal, civil, and administrative 
investigations of fraud and misconduct related to HHS programs, operations, and 
beneficiaries.  With investigators working in all 50 States and the District of Columbia, 
OI utilizes its resources by actively coordinating with the Department of Justice and 
other Federal, State, and local law enforcement authorities.  The investigative efforts 
of OI often lead to criminal convictions, administrative sanctions, and/or civil 
monetary penalties. 
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. 
South Carolina Medicaid Fraud Control Unit: 2020 Inspection 
OEI-12-20-00610  About the Office of Inspector General | 32