Department of Health and Human Services 
OFFICE OF 
 
INSPECTOR GENERAL 
 
 
 
 
 
 
 
 
T S M
EXAS  TATE  EDICAID 
 
 
F C U :   
RAUD  ONTROL  NIT   
 
2  013 O R  
  NSITE  EVIEW 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
  Brian P. Ritchie  
 
Acting Deputy Inspector General 
 
for Evaluation and Inspections  
 
April 2014 
OEI-06-13-00300   
   
EXECUTIVE SUMMARY  TEXAS STATE MEDICAID FRAUD CONTROL UNIT:                                
2013 ONSITE REVIEW 
OEI-06-13-00300  
 
WHY WE DID THIS STUDY  
The Office of Inspector General (OIG) oversees the activities of all Medicaid Fraud Control 
Units (MFCUs or Units).  As part of this oversight, OIG conducts periodic reviews of all Units 
and prepares public reports based on these reviews.  The reviews assess Unit performance in 
accordance with the 12 MFCU performance standards and monitor Unit compliance with Federal 
grant requirements. 
 
HOW WE DID THIS STUDY  
We based our review on an analysis of data from seven sources:  (1) a review of policies, 
procedures, and documentation of the Units operations, staffing, and caseload; (2) a review of 
financial documentation; (3) structured interviews with key stakeholders; (4) a survey of Unit 
staff; (5) structured interviews with the Unit Director and supervisors; (6) an onsite review of 
case files; and (7) an onsite review of Unit operations, conducted in August 2013.  
 
WHAT WE FOUND  
For fiscal years (FYs) 2010 through 2012, the Texas Unit reported recoveries of over 
$844 million, 339 criminal convictions, and 48 civil judgments and settlements.  Our review 
found no evidence of significant noncompliance with applicable laws, regulations, or policy 
transmittals.  However, we found that the Unit did not transmit all conviction information to OIG 
in a timely manner. 
 
WHAT WE RECOMMEND 
We recommend that the Texas Unit ensure that it transmits information about all convictions to 
OIG for exclusion within 30 days of sentencing.  The Unit concurred with our recommendation. 
 
 
 
 
 
 
 
 
 
 
 
   
     
   
TABLE OF CONTENTS 
Objective..................................................................................................................1 

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

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

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

For FYs 2010 through 2012, the Unit reported recoveries of over  

$844 million, 339 criminal convictions, and 48 civil judgments                           

and settlements .............................................................................................5 

The Unit did not transmit all conviction information to OIG in a                            

timely manner ..............................................................................................6 

Case files contained documentation indicating supervisory approval  

for opening and closing and supervisory reviews........................................6 

The Unit maintained proper fiscal control of its resources ..........................6 

Other observation: The Unit does not require supervisory reviews 

for preliminary open cases, which are often open longer than 90 days ...7 

Other observation:   The Unit implemented an outreach program                              

to increase the visibility of the Unit and to generate referrals .....................7 

Conclusion and Recommendations ..........................................................................8 

Unit Comments and Office of Inspector General Response  .......................9 

Appendixes ............................................................................................................10 

A: 	2012 Performance Standards ...............................................................10 

B: 	1994 Performance Standards................................................................17 

C: 	Expanded Methodology .......................................................................21 

D: 	Referrals of Provider Fraud and Patient Abuse and Neglect to the 
                                       
Texas MFCU by Source, FYs 2010 Through 2012 .............................23 

E: 	Investigations Opened and Closed by Provider Category and  

      Case Type, FYs 2010 Through 2012 ...................................................24 

F: 	Point Estimates and Confidence Intervals Based on Review of Case 

Files......................................................................................................26 

G: Unit Comments ....................................................................................27 

Acknowledgments..................................................................................................28 

     
   
OBJECTIVE 
To conduct an onsite review of the Texas 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 Social Security 
Act (SSA), each State must maintain a certified Unit unless the Secretary  
of Health and Human Services determines that operation of a Unit would 
not be cost-effective because (1) minimal Medicaid fraud exists in that 
State; and (2) the State has other, adequate safeguards to protect Medicaid 
beneficiaries from abuse and neglect.2 Currently, 49 States and the 
District of Columbia (States) have created such Units.3 In Federal fiscal 
year (FY) 2012, combined Federal and State grant expenditures for the 
Units totaled $217.4 million. 4     
To carry out its duties in an effective and efficient manner, each Unit must 
employ an interdisciplinary staff that consists of at least an investigator, an 
auditor, and an attorney.5  Unit staff review complaints provided by the 
State Medicaid agency and other sources and determine their potential for 
criminal prosecution and/or civil action.  In FY 2012, the 50 Units 
collectively reported 1,337 convictions, 823 civil settlements or 
judgments, and recoveries of approximately $2.9 billion.6    
 
1 Social Security Act (SSA)  1903(q)(3). 
 
2 Ibid.,  1902(a)(61) and  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. 

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

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

Inspector General (OIG),  Medicaid Fraud Control Units.  Accessed at 

http://oig.hhs.gov/fraud/medicaid-fraud-control-units-mfcu/index.asp on May 22, 2013. 

4 OIG,  State Medicaid Fraud Control Units  Fiscal Year 2012 Grant Expenditures and 

Statistics. Accessed at https://oig.hhs.gov/fraud/medicaid-fraud-control-units-
mfcu/expenditures_statistics/fy2012-statistical-chart.htm  on November 12, 2013. 

5 SSA  1903(q)(6) and  42 CFR   1007.13.  

6 OIG,  State Medicaid Fraud Control Units  Fiscal Year 2012 Grant Expenditures and 

Statistics. Accessed at http://oig.hhs.gov/fraud/medicaid-fraud-control-units-mfcu/ on 
 
November 20, 2012.  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.  Recoveries may involve cases that  

include participation by other Federal and State agencies. 

Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   1   
   
Units are required to have either Statewide authority to prosecute cases or 
formal procedures to refer suspected criminal violations to an office with 
such authority.7  Currently, MFCUs operate in 49 States and in the District 
of Columbia.  Forty-four of the MFCUs (including the Texas MFCU) are 
located within offices of State Attorneys General; the remaining 6 MFCUs 
operate within other State agencies.8 Each Unit must be a single, 
identifiable entity of State government, distinct from the single State 
Medicaid agency, and must develop a formal agreement (i.e.,  
Memorandum of Understanding) that describes its relationship with that  
agency.9   
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.10   
All Units are currently funded by the Federal Government on a 75-percent 
matching basis, with the States contributing the remaining 25 percent.11  To  
receive Federal reimbursement, each Unit must submit an application to 
OIG.12  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.13    
Pursuant to Title XIX of the SSA, States must operate Units that effectively 
carry out their statutory functions and meet program requirements.14 OIG 
developed and issued 12 performance standards to define the criteria it 
applies in assessing whether a Unit is effectively carrying out statutory 
functions and meeting program requirements.15  Examples of standards 
include maintaining an adequate caseload through referrals from several 
sources, maintaining an annual training plan for all professional disciplines, 
 
7  SSA  1903(q)(1).  
8 OIG,  Medicaid Fraud Control Units.  Accessed at http://oig.hhs.gov/fraud/medicaid-
fraud-control-units-mfcu/index.asp on  May 21, 2013. 

9 SSA  1903(q)(2);  42 CFR   1007.5 and 1007.9(d). 
  
10 The portion of funds reimbursed to States by the Federal  government for  its share of 
 
expenditures for the Federal  Medicaid program, including  the MFCUs, is  called Federal 
 
Financial Participation (FFP) . 

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

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

15 77 Fed. Reg. 32645 (June 1, 2012).  Accessed at http://oig.hhs.gov/authorities/docs/ 

2012/PerformanceStandardsFinal060112.pdf  on November 6, 2013.   Previous 
 
performance standards, established in  1994, are found at 59 Fed. Reg.  49080 (Sept. 26, 

1994). Accessed at http://oig.hhs.gov/fraud/medicaid-fraud-control-units-
mfcu/files/Performance%20Standards.pdf  on November  15, 2013.   

Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   2   
   
and establishing policy and procedure manuals to reflect the Units 
operations. See Appendix A for a complete list of the 2012 performance 
standards and Appendix B for a complete list of the 1994 performance 
standards.   
Texas Medicaid Program 
The Texas Medicaid program is housed within the Texas Health and 
Human Services Commission.  The Texas Medicaid program provides 
services to over 4.4 million beneficiaries, 75 percent of whom are enrolled  
in managed care.16   Total Texas Medicaid expenditures for FY 2012 were 
over $28 billion.17  
Texas Unit   
The Texas Unit is housed within the Texas Office of the Attorney General 
(OAG). For FY 2012, the State and Federal Governments awarded the 
Unit a combined total of approximately $15.9 million.18  At the time of our 
August 2013 review, the Unit employed 187 staff members1 director, 
1 deputy director, 12 regional investigative managers, 14 attorneys, 
82 investigators, and 36 auditors. The Unit headquarters is located in 
Austin, Texass capital. The Unit has 12 regional investigative teams:  
1 located with headquarters staff in Austin, 2 in Dallas, 3 in Houston, and 
1 in each of 6 other cities (Corpus Christi, Dallas, El Paso, Houston, 
Lubbock, McAllen, San Antonio, and Tyler). 
OAG has the authority to investigate criminal cases of Medicaid fraud and 
cases of patient abuse and neglect, and the agency presents these cases to 
local district attorneys and the United States Attorneys Offices for 
prosecution. For civil cases of Medicaid fraud, including globali.e., 
multi-Statecases, OAG delegates litigation authority to its Civil 
Medicaid Fraud Division (CMFD), which operates separately from the 
Unit. 19 The Unit provides investigative support to the CMFD through data 
analysis, record reviews, and interviews. 
 
16 Center for Medicaid and CHIP Services, Medicaid.gov Texas Medicaid Statistics.   
Accessed at http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-
State/texas.html on September 16, 2013.   
17 OIG,  MFCU  Statistical Data  for FY 2012. Accessed at http://oig.hhs.gov/fraud/  
medicaid-fraud-control-units-mfcu/maps/interactive-map2012.asp on  November 11, 
2013.  
18 OIG,  State Medicaid Fraud Control Units  Fiscal Year 2012 Grant Expenditures and 
Statistics. Accessed at https://oig.hhs.gov/fraud/medicaid-fraud-control-units-
mfcu/expenditures_statistics/fy2012-statistical-chart.htm on September 16, 2013.   
19  Texas Human Resources Code, ch. 36, Medicaid Fraud Prevention.  Accessed at 
http://www.statutes.legis.state.tx.us/Docs/HR/htm/HR.36.htm on November 12, 2013.  
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   3   
   
METHODOLOGY 
We based our review on an analysis of data from seven sources:  (1) a 
review of policies, procedures, and documentation of the Units 
operations, staffing, and caseload; (2) a review of financial 
documentation; (3) structured interviews with key stakeholders; (4) a 
survey of Unit staff; (5) structured interviews with the Unit Director and 
supervisors; (6) an onsite review of case files; and (7) an onsite review of 
Unit operations, conducted in August 2013. See Appendix C for a 
complete description of the 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.   
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   4   
   
FINDINGS 
For FYs 2010 through 2012, the Unit reported 
recoveries of over $844 million, 339 criminal 
convictions, and 48 civil judgments and settlements 
For FYs 2010 through 2012, the Unit reported combined criminal and civil 
recoveries of over $844 million.  See Table 1. During the review period, 
criminal recoveries ranged from  $67 million in FY 2010 to $199 million in  
2012. Civil recoveries, including global and nonglobal civil recoveries, 
accounted for over $451 million during FYs 2010 through 2012.20, 21   
During the review period, total recoveries ranged from nearly 
$180 million in FY 2010 to over $473 million in FY 2012.   
Table 1: Texas MFCU Recoveries, FYs 2010 Through 2012  
Total  
Recovery  Type   FY 2010   FY 2011   FY 2012  
Recoveries 
Criminal  $67,089,463  $125,986,255  $199,406,572   $392,482,290  
Global Civil  $28,528,838  $26,200,896  $45,541,149   $100,270,883  
Non-Global Civil  $84,235,510   $38,681,619   $228,738,021   $351,655,150  
Total  Recoveries   $179,853,811  $190,868,770  $473,685,742   $844,408,323  
Source: OIG analysis of Unit self-reported data, FYs 2010 through  2012.  
The Unit reported 339 criminal convictions and 48 civil judgments and 
settlements during FYs 2010 through 2012.  See Table 2. 
Table 2: Texas MFCU Convictions and Civil Judgments and Settlements, 
FYs 2010 Through 2012  
Outcomes   FY 2010   FY 2011   FY 2012   Total  
Criminal Convictions  92  118  129  339 
Civil Judgments and  Settlements   16  15  17  48 
Source: OIG analysis of Unit Quarterly Statistical Reports, FYs 2010 through 2012.  
 
20 Global civil recoveries include only the State share of funds recovered from  
multi-State, or global, civil false claims cases, including cases on  which Unit staff 
assisted the CMFD, cases worked  directly by the Unit, and cases worked by staff from  
other Units.   
21 In 2012, the CMFD finalized a $158 million settlement from Johnson & Johnson and 
its subsidiaries for defrauding the Texas Medicaid program.  
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   5   
   
The Unit did not transmit all conviction information to 
OIG in a timely manner  
According to Performance Standard 8, the Unit should transmit to OIG 
reports of all convictions for the purpose of exclusion from Federal health 
care programs.  The 1994 Performance Standards indicate that convictions 
should be reported within 30 days of sentencing or other reasonable time 
period; the 2012 Performance Standards stipulate that convictions should 
be reported within 30 days of sentencing.  
The Unit transmitted information on nearly all (321 of 324) of the 
convictions that should have been sent to OIG for exclusion.22 However, 
for many of the cases, the Unit did not transmit this information in a 
timely manner.  Specifically, the Unit transmitted conviction information 
to OIG more than 90 days after sentencing for 22 percent of convictions  
(70 of 324). 
Case files contained documentation indicating 
supervisory approval for opening and closing 
and supervisory reviews  
According to Performance Standard 5(b), Unit supervisors should approve 
the opening and closing of cases to ensure a continuous case flow and the 
timely completion of cases.  We found that 96 percent of case openings 
and 100 percent of case closings contained documentation of supervisory 
approval. Additionally, according to Performance Standard 6(c), 
supervisory review should be conducted periodically and noted in the case 
file to ensure timely completion of cases.  The Unit director reported that 
the Units standard is for supervisory reviews to be conducted on cases 
every 90 days. In on our review of 77 case files that were open 90 days or 
longer, 99 percent of cases received supervisory reviews and included 
documentation of reviews in the case file.  
The Unit maintained proper fiscal control of its 
resources 
According to Performance Standard 11, the Unit should exercise proper 
fiscal control over the Units resources, such as maintaining an equipment 
inventory and applying accepted accounting principles in its control of 
Unit funding.  We did not identify any deficiencies with internal controls 
related to accounting, budgeting, personnel, procurement, and property.   
 
22 At the time of  our review, the Unit was either waiting  on additional documentation  or 
did not  have documentation on  the remaining  three convictions.   
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   6   
   
Other observation:  The Unit does not require 
supervisory reviews for preliminary open cases, 
which are often open longer than 90 days  
Twenty of the Units open cases were designated preliminary open 
cases. Preliminary open cases are cases in which investigative activity 
occurs, but supervisors have not yet decided whether to open a full 
investigation. Although Unit procedures require supervisory reviews 
every 90 days for cases open under full investigation, the Unit did not 
have a procedure for supervisory review of preliminary open cases.  We  
found that almost all of the Units preliminary open cases (18 of 20 cases) 
were open longer than 90 days. Further, 16 of the 20 preliminary open 
cases did not receive supervisory reviews. 
Other observation:  The Unit implemented an 
outreach program to increase the visibility of the Unit 
and to generate referrals 
The Unit recently instituted an outreach program to ensure that the public 
is aware of the Units presence and mission for the purpose of increasing 
the number of referrals to the Unit.  The Unit requires all investigators and 
investigative auditors to make one outreach contact per month, or 
12 contacts per year. Unit employees make these contacts in a variety of 
ways, including meeting with staff from various law enforcement agencies 
or other public agencies; presenting information about the Unit to 
associations or at conferences; or hosting a MFCU information booth at a 
conference. The Unit reported that the outreach programs purpose is to 
increase its presence and that it has received referrals as a result of these 
outreach contacts, although we did not verify the number of these 
referrals.   
 
 
 
 
 
 
 
 
 
 
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   7   
   
CONCLUSION AND RECOMMENDATIONS 
For FYs 2010 through 2012, the Texas Unit reported recoveries of over 
$844 million, 339 criminal convictions, and 48 civil judgments and 
settlements.  Additionally, the Unit reported implementing an outreach 
program to increase MFCU visibility and referrals.  
Our review of compliance issues found no evidence of significant 
noncompliance with applicable laws or regulations.  However, we found 
one opportunity for improvement in the Units operations.  As a result, we 
recommend that the Texas Unit: 
Ensure that it transmits information about all convictions to 
OIG for exclusion within 30 days of sentencing  
The Unit should ensure that it transmits information about individuals 
convicted of fraud, abuse, or neglect within 30 days of sentencing, 
consistent with MFCU performance standard 8(f).  
   
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   8   
   
UNIT COMMENTS AND OFFICE OF INSPECTOR GENERAL  
RESPONSE 
    The Unit concurred with the report recommendation. 
The Unit identified changes that it is implementing to ensure timely 
submission of conviction information to OIG, including placing a priority 
on conviction notifications and establishing a new tracking process.   
The full text of the Units comments is provided in Appendix G.  We did 
not make any changes to the report as a result of the Units comments.  
 
 
 
   
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   9   
   
APPENDIX A 
2012 Performance Standards  
[77 Fed. Reg. 32645, June 1, 2012] 
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. 
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   10   
   
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. 
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, 
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   11   
   
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 practicabl e, 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. 
c. 	  The Unit seeks to allocate resources among provider types based 
on levels of Medicaid expenditures or other risk factors.  Special 
Unit initiatives may focus on specific provider types. 
d. 	  As part of its case mix, the Unit maintains a balance of fraud and 
patient abuse and neglect cases for those States in which the Unit 
has original jurisdiction to investigate or prosecute patient abuse 
and neglect cases.  
e. 	  As part of its case mix, the Unit seeks to maintain, consistent with 
its legal authorities, a balance of criminal and civil fraud cases. 
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   12   
   
7. 	A Unit maintains case files in an effective manner and develops a 
case management system that allows efficient access to case 
information and other performance data. 
a. 	  Reviews by supervisors are conducted periodically, consistent with 
MFCU policies and procedures, and are noted in the case file.  
b. 	  Case files include all relevant facts and information and justify the 
opening and closing of the cases. 
c. 	  Significant documents, such as charging documents and settlement 
agreements, are included in the file.  
d. 	  Interview summaries are written promptly, as defined by the Units 
policies and procedures. 
e. 	  The Unit has an information management system that manages and 
tracks case information from initiation to resolution. 
f. 	  The Unit has an information management system that allows for 
the monitoring and reporting of case information, including the 
following: 
1. 	  The number of cases opened and closed and the reason that  
cases are closed. 
2. 	  The length of time taken to determine whether to open a 
case referred by the State Medicaid agency or other 
referring source. 
3. 	  The number, age, and types of cases in the Units 
inventory/docket. 
4. 	  The number of referrals received by the Unit and the 
number of referrals by the Unit to other agencies. 
5. 	  The dollar amount of overpayments identified. 
6. 	  The number of cases criminally prosecuted by the Unit or 
referred to others for prosecution, the number of 
individuals or entities charged, and the number of pending 
prosecutions. 
7. 	  The number of criminal convictions and the number of civil 
judgments. 
8. 	  The dollar amount of fines, penalties, and restitution 
ordered in a criminal case and the dollar amount of 
recoveries and the types of relief obtained through civil 
judgments or prefiling settlements. 
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   13   
   
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 
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   14   
   
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 Centers for Medicare 
& Medicaid Services (CMS). 
d.	   Consistent with Performance Standard 4, the MOU establishes a 
process to ensure the receipt of an adequate volume and quality of  
referrals to the Unit from the State Medicaid agency. 
e. 	  The MOU incorporates by reference the CMS Performance 
Standard for Referrals of Suspected Fraud from a State Agency to 
a Medicaid Fraud Control Unit. 
11. 	A Unit exercises proper fiscal  control over Unit resources.  
a. 	  The Unit promptly submits to OIG its preliminary budget 
estimates, proposed budget, and Federal financial expenditure 
reports. 
b.	   The Unit maintains an equipment inventory that is updated 

regularly to reflect all property under the Units control. 

c. 	  The Unit maintains an effective time and attendance system and 
personnel activity records. 
d.	   The Unit applies generally accepted accounting principles in its 
control of Unit funding. 
e. 	  The Unit employs a financial system in compliance with the 
standards for financial management systems contained in  
45 CFR 92.20. 
 
 
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   15   
   
12. 	A Unit conducts training that  aids in the mission of the Unit. 
a. 	  The Unit maintains a training plan for each professional discipline 
that includes an annual minimum number of training hours and that 
is at least as stringent as required for professional certification. 
b. 	  The Unit ensures that professional staff comply with their training 
plans and maintain records of their staffs compliance.  
c. 	  Professional certifications are maintained for all staff, including  
those that fulfill continuing education requirements.  
d. 	  The Unit participates in MFCU related training, including training 
offered by OIG and other MFCUs, as such training is available and 
as funding permits. 
e. 	  The Unit participates in cross training with the fraud detection staff  
of the State Medicaid agency. As part of such training, Unit staff 
provide training on the elements of successful fraud referrals and 
receive training on the role and responsibilities of the State 
Medicaid agency. 
   
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   16   
   
APPENDIX B 
Performance Standards for Medicaid Fraud Control Units 
[59 Fed. Reg. 49080, Sept. 26, 1994] 
1. 	A Unit will be in conformance with all applicable statutes, 
regulations and policy transmittals.  In meeting this standard, the 
Unit must meet, but is not limited to, the following requirements:  
a. 	  The Unit professional staff must consist of permanent employees 
working full-time on Medicaid fraud and patient abuse matters. 
b. 	  The Unit must be separate and distinct from the single State 
Medicaid agency. 
c. 	  The Unit must have prosecutorial authority or an approved formal 
procedure for referring cases to a prosecutor. 
d. 	  The Unit must submit annual reports, with appropriate 

certifications, on a timely basis. 
 
e. 	  The Unit must submit quarterly reports on a timely basis. 
f. 	  The Unit must comply with the Americans with Disabilities Act, 
the Equal Employment opportunity requirements, the Drug Free 
workplace requirements, Federal lobbying restrictions, and other 
such rules that are made conditions of the grant. 
2. 	A Unit should maintain staff levels in accordance with staffing 
allocations approved in its budget. In meeting this standard, the 
following performance indicators will be considered: 
a. 	  Does the Unit employ the number of staff that was included in the 
Units budget as approved by the OIG? 
b. 	  Does the Unit employ the number of attorneys, auditors, and 
investigators that were approved in the Units budget? 
c. 	  Does the Unit employ a reasonable size of professional staff in 
relation to the States total Medicaid program expenditures?   
d. 	  Are the Unit office locations established on a rational basis and are 
such locations appropriately staffed? 
3. 	A Unit should establish policies and procedures for its operations, 
and maintain appropriate systems for case management and case 
tracking.  In meeting this standard, the following performance 
indicators will be considered: 
a. 	  Does the Unit have policy and procedure manuals? 
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   17   
   
b. 	  Is an adequate, computerized case management and tracking 
system in place? 
4. 	A Unit should take steps to ensure that it maintains an adequate 
workload through referrals from the single State agency and other 
sources.  In meeting this standard, the following performance 
indicators will be considered:  
a. 	  Does the Unit work with the single State Medicaid agency to 
ensure adequate fraud referrals? 
b. 	  Does the Unit work with other agencies to encourage fraud 

referrals? 

c. 	  Does the Unit generate any of its own fraud cases? 
d. 	  Does the Unit ensure that adequate referrals of patient abuse 
complaints are received from all sources? 
5. 	A Units case mix, when possibl e, should cover all significant 
provider types. In meeting this standard, the following performance 
indicators will be considered:  
a. 	  Does the Unit seek to have a mix of cases among all types of 
providers in the State? 
b. 	  Does the Unit seek to have a mix of Medicaid fraud and Medicaid 
patient abuse cases? 
c. 	  Does the Unit seek to have a mix of cases that reflect the 

proportion of Medicaid expenditures for particular provider 

groups? 

d. 	  Are there any special Unit initiatives targeting specific provider 
types that affect case mix? 
e. 	  Does the Unit consider civil and administrative remedies when  
appropriate? 
6. 	A Unit should have a continuous case flow, and cases should be 
completed in a reasonable time. In meeting this standard, the 
following performance indicators will be considered:  
a. 	  Is each stage of an investigation and prosecution completed in an 
appropriate time frame?  
b. 	  Are supervisors approving the opening and closing of 

investigations?
   
c. 	  Are supervisory reviews conducted periodically and noted in the 
case file? 
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   18   
   
7. A Unit should have a process for monitoring the outcome of cases.  
In meeting this standard, the following performance indicators will be 
considered:  
a. 	  The number, age, and type of cases in inventory. 
b. 	  The number of referrals to other agencies for prosecution. 
c. 	  The number of arrests and indictments. 
d. 	  The number of convictions. 
e. 	  The amount of overpayments identified. 
f. 	  The amount of fines and restitution ordered. 
g. 	  The amount of civil recoveries. 
h. 	  The numbers of administrative sanctions imposed. 
8. 	A Unit will cooperate with the OIG and other Federal agencies, 
whenever appropriate and consistent with its mission, in the 
investigation and prosecution of health care fraud.  In meeting this 
standard, the following performance indicators will be considered: 
a. 	  Does the Unit communicate effectively with the OIG and other 
Federal agencies in investigating or prosecuting health care fraud 
in their State? 
b. 	  Does the Unit provide OIG regional management, and other 
Federal agencies, where appropriate, with timely information 
concerning significant actions in all cases being pursued by the 
Unit? 
c. 	  Does the Unit have an effective procedure for referring cases,  
when appropriate, to Federal agencies for investigation and other 
action?  
d. 	  Does the Unit transmit to the OIG, for purposes of program  
exclusions under section 1128 of the Social Security Act, reports 
of convictions, and copies of Judgment and Sentence or other 
acceptable documentation within 30 days or other reasonable time 
period? 
9. 	A Unit should make statutor y or programmatic recommendations, 
when necessary, to the State government. In meeting this standard, 
the following performance indicators will be considered:  
a. 	  Does the Unit recommend amendments to the enforcement 
provisions of the States statutes when necessary and appropriate 
to do so? 
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   19   
   
b. 	  Does the Unit provide program recommendations to single State 
agency when appropriate? 
c. 	  Does the Unit monitor actions taken by State legislature or State 
Medicaid agency in response to recommendations? 
10. 	A Unit should periodica lly review its memorandum of 
understanding (MOU) with the single State Medicaid agency and 
seek amendments, as necessary, to ensure it reflects current law  
and practice.  In meeting this standard, the following performance 
indicators will be considered:  
a. 	  Is the MOU more than 5 years old? 
b.	   Does the MOU meet Federal legal requirements? 
c. 	  Does the MOU address cross-training with the fraud detection staff  
of the State Medicaid agency? 
d.	   Does the MOU address the Units responsibility to make program  
recommendations to the Medicaid agency and monitor actions  
taken by the Medicaid agency concerning those recommendations? 
11. 	The Unit director should exercise proper fiscal control over the 
Unit resources.  In meeting this standard, the following performance 
indicators will be considered:  
a. 	  Does the Unit director receive on a timely basis copies of all fiscal 
and administrative reports concerning Unit expenditures from the 
State parent agency? 
b.	   Does the Unit maintain an equipment inventory?  
c. 	  Does the Unit apply generally accepted accounting principles in its 
control of Unit funding? 
12. 	A Unit should maintain an annual training plan for all 
professional disciplines.  In meeting this standard, the following 
performance indicators will be considered:  
a. 	  Does the Unit have a training plan in place and funds available to 
fully implement the plan? 
b. 	  Does the Unit have a minimum number of hours training 
requirement for each professional discipline, and does the staff 
comply with the requirement? 
c. 	  Are continuing education standards met for professional staff? 
d. 	  Does the training undertaken by staff aid to the mission of the 
Unit?   
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   20   
   
APPENDIX C 
Expanded Methodology  
We based our review on an analysis of data from seven sources:  (1) a 
review of policies, procedures, and documentation of the Units 
operations, staffing, and caseload; (2) a review of financial 
documentation; (3) structured interviews with key stakeholders; (4) a 
survey of Unit staff; (5) structured interviews with the Unit director and 
supervisors; (6) an onsite review of case files; and (7) an onsite review of 
Unit operations conducted in August 2013. 
We analyzed data from all seven sources to describe the caseload and 
assess the performance of the Unit.  We also analyzed data to identify any 
opportunities for improvement and identify any instances in which the 
Unit did not meet the performance standards or was not operating in 
accordance with laws, regulations, and policy transmittals.23  
In addition, we noted any practices that appeared to benefit the Unit.  We  
based these observations on statements from Unit staff, data analysis, and 
our own judgment.  We did not independently verify the effectiveness of  
these practices, but included the information because it may be useful to 
other Units in their operations. 
Data Collection and Analysis 
Review of Unit Documentation.  We reviewed policies, procedures, and 
documentation of the Units operations, staffing, and cases, including its 
annual reports, quarterly statistical reports, and responses to recertification 
questionnaires.   
Review of Financial Documentation.  We reviewed Unit policies and 
procedures related to budgeting, accounting systems, cash management, 
procurement, property, and personnel.  We obtained from the Unit its 
claimed grant expenditures for FYs 2010 through 2012 so that we could  
(1) reconcile final Financial Status Reports and the supporting 
documentation; (2) purposively select and review transactions within 
direct-cost categories to determine whether costs were allowable; and  
(3) verify that indirect costs were accurately computed using the approved 
indirect cost rate. Finally, we verified that the Unit properly reported its 
program income received directly from cases.  
Interviews with Key Stakeholders. We conducted structured interviews 
with key stakeholders who were familiar with the operations of the Unit.  
 
23 All relevant  regulations, statutes, and  policy transmittals are available online at 
http://oig.hhs.gov. 
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   21   
   
Specifically, we interviewed staff from the Office of Inspector General 
within the Texas Health and Human Services Commission, Department of 
Human Services; the Department of Aging and Disability Services; an 
Assistant District Attorney; two Assistant U.S. Attorneys; two HHS OIG 
investigators who worked closely with the Unit during the review period; 
one managed care organization (AmeriGroup) that operates in Texas; and 
a Federal Bureau of Investigation agent who worked closely 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 and received 
responses from 170 of 183 nonmanagerial staff members, a 93-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 Unit Deputy Director, the Chief 
Investigator, the Chief Auditor, the Director of Law Enforcement for the 
OAG, a Regional Investigative Manager, and an Assistant Attorney 
General. We asked respondents to provide information to better illustrate 
the Units operations, identify opportunities for improvement and effective 
practices, and clarify information we obtained from other data sources. 
Onsite Review of Case Files.  We selected a statistically valid, simple 
random sample of 100 case files from the 3,332 cases that were open at 
any point during FYs 2010 through 2012.  From these 100 case files, we 
selected another simple random sample of 50 files for a more in-depth 
review. After initial examination of all 3,332 case files, we found that  
57 case files were CMFD cases and were outside the scope of our review.  
We excluded one CMFD case that appeared in our sample of 100.  There 
were no CMFD cases in the sample of 50 case files that received an  
in-depth review. Our results project to the population of 3,275 cases. 
We reviewed 99 sampled case files for documentation of supervisory 
approval for the opening and closing of cases, periodic supervisory 
reviews, timeliness of case development, and the Units processes for 
monitoring the status and outcomes of cases.  We reviewed the 
50 sampled case files for selected issues, such as the appropriateness and 
timeliness of investigations.  See Appendix E for point estimates and  
95-percent confidence intervals.  
Onsite Review of Unit Operations. We reviewed the Units operations 
during our onsite visit. Specifically, we reviewed the process for 
receiving referrals, electronic case management, security of case files, and 
general functioning of the Unit. 
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   22   
   
APPENDIX D 
Referrals of Provider Fraud and Patient Abuse and Neglect to the 
Texas MFCU by Source, FY 2010 Through 2012 
Table D-1: Total MFCU Referrals of Fraud and Abuse  
Case Type   FY 2010   FY 2011   FY 2012  
Provider Fraud   589  438  344 
Patient Abuse and Neglect  197  117  82 
Total   786  555  426 
 
Source: Texas MFCU response to OIG data request. 
Table D-2: MFCU Referrals, by Referral Source  
FY 2010   FY 2011   FY 2012  
Patient  Patient  Patient 
Referral Source  
Provider  Provider  Provider 
Abuse and   Abuse and   Abuse and  
Fraud   Fraud   Fraud  
Neglect   Neglect   Neglect  
Medicaid Agency  170  0  85  0  54  0 
State Survey/Certification   63  173  71  94  43  62 
State Agencies  Other   7  1  1  0  5  0 
Licensing Boards  5  0  7  0  1  0 
Law  Enforcement  60  4  25  7  39  6 
HHS OIG  36  0  57  0  23  0 
Prosecutors  0  2  0  1  0  2 
Providers  17  0  15  1  17  3 
Private Health Insurers  1  0  1  0  2  0 
Ombudsman   5  0  2  0  0  0 
Adult Protective Services  0  8  0  4  1  3 
Private Citizens  36  4  50  7  29  5 
MFCU Hotline  2  0  2  0  1  0 
Other   187  5  122  3  129  1 
Total  Referrals Received   589  197  438  117  344  82 
 
Source: Texas MFCU response to OIG data request. 
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   23   
   
APPENDIX E 
Investigations Opened and Closed by Provider Category and Case 
Type, FY 2010 Through 2012 
Table E-1:  Total Annual Opened and Closed Investigations  
FY 2010   FY 2011   FY 2012  
Case Type  
Opened  Closed  Opened  Closed  Opened   Closed 
Provider Fraud   588  551  434  500  343  421 
Patient Abuse and Neglect  197  315  117  144  82  121 
Total    785  866  551  644  425  542 
 
Source: Texas MFCU response to OIG data request. 
Table E-2:  Investigations of Patient Abuse and Neglect  
FY 2010   FY 2011   FY 2012  
Provider Category  
Opened   Closed  Opened  Closed  Opened  Closed 
Nursing Facilities   52  58  31  38  29  35 
Other Long-Term-Care Facilities   2  3  5  4  6  4 
Nurses/Physicians Assistants/Nurse 
86  147  49  55  30  50 
Practitioners/Certified Nurse Aides 
Home Health Aides  2  3  0  0  0  2 
Other   55  104  32  47  17  30 
Total   197  315  117  144  82  121 
 
Source: Texas MFCU response to OIG data request. 
 
 
 
 
 
 
 
 
 
   
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   24   
   
Table E-3:  Investigations of Provider Fraud  
Provider Category   FY 2010   FY 2011   FY 2012  
Facilities   Opened  Closed  Opened  Closed  Opened  Closed  
Hospitals  10  7  8  8  13  8 
Nursing Facilities   11  17  17  9  1  6 
Other Long-Term-Care Facilities   6  2  0  1  0  0 
Substance Abuse Treatment Centers  4  4  0  5  2  6 
Other  Facilities   19  24  11  16  17  16 
Practitioners   Opened  Closed  Opened  Closed  Opened  Closed 
Doctors of Medicine or Osteopathy   86  87  57  71  62  60 
Dentists  50  33  49  44  59  20 
Podiatrists  0  2  2  2  8  2 
Optometrist/Opticians  4  2  0  3  0  3 
Counselors/Psychologists  12  15  9  5  7  8 
Chiropractors  0  2  0  1  1  0 
Other Practitioners  9  4  6  3  5  8 
Medical Support  Opened  Closed  Opened  Closed  Opened  Closed  
Pharmacies  28  10  9  8  9  13 
Pharmaceutical Manufacturers  16  15  9  12  4  19 
Suppliers of Durable Medical  113  93  77  92  30  105 
Equipment 
Laboratories  6  13  1  9  1  0 
Transportation Services  8  21  15  35  24  25 
Home Health Care Agencies  111  56  52  82  44  52 
Nurses/Physicians Assistants/Nurse 
49  75  73  72  40  38 
Practitioners/Certified Nurse Aides 
Radiologists  0  2  0  1  1  2 
Other Medical Support   38  57  22  19  12  18 
Program  Related   Opened  Closed  Opened  Closed  Opened  Closed 
Managed Care   0  1  1  0  0  1 
Medicaid Program Administration  5  1  15  0  2  11 
Billing Company  3  8  1  2  1  0 
All Fraud Investigations   Opened  Closed  Opened  Closed  Opened  Closed  
Total   588  551  434  500  343  421 
 
Source: Texas Unit response to OIG data request. 
 
 
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   25   
   
 
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  
CMFD case files outside the scope of 
100  1.00%   0.03%   5.45%  
our  review  
Open case files containing 
documentation of supervisory   79  96.20%   89.30%   99.21%  
approval for opening  
Closed case files containing 
documentation of supervisory   52  100.00%   93.25%   100%  
approval for closing  
Open cases files that were open 
longer than 90 days containing  77  98.70%   92.98%   99.97%  
documentation of supervisory review  
Source: OIG analysis of Unit case files, 2013. 

 We excluded the 20 preliminary open cases from this analysis. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   26  APPENDIX G 
Unit Comments 
ATTORNEY GENERAL OF TEXAS 
GREG  AllllOTT 
March 18,2014 
Stuart Wright 
Deputy lns:pectot Oeneml for Evaluations and Inspections 
U.S. L>cpartmcnt of Health and Human Services 
Office of the Inspector General 
Room 5660. Cohen Building 
330 lmlcpcndence Avenue, SW 
Washington, DC 20201 
RE: Texas MfCU 2()13 Onsitc Review 
Dear Mr. Wright: 
We appreciate the opportunity to review and commcmt on the 2013 Onsite Review and the exceptional 
professionalism cxbihitcd by your review stan. Put'<uant to your request. we offor the following 
comments on the single recommendation presented in the "'!'<lrt: 
Rl>commendation 
Ensure that the Texas MFCU mmsmits information about flll convictions to 010 for exclusion within 30 
o:Utys ofsentencing. 
Comments 
\Vc concur with this recommendation. Immediately following the identification of Ihi;; issue, we revised 
the closing J)l'ocess to place a priority on conviction notifications. We. also eS-tablished a tracking pi'Occss 
ensure compliance. While 11 majorit)' ofthe ca,;c, that did not meet the 30-day reporting rule were without 
mitigation, a signitlcant number would haw been in compliance under the Jl!'e\ious standard of "30 days 
or other reasonable time period." The prc,ious standard t-eeognlzed tltat in some cases it is impo:<sihlc for 
MFClJs to report a canviction within 30 dnys. ln TcxHs, this is due to si?.e ofour state and me fact we do 
not have original prosecution jurisdiction. We <iepend on !50 district attomcy's offices in 254 cmmties and 
27U.S. Attorney's Offices for the prosecution ofour cases. In remo-te locations it is often difficuh to 
obtain judgment documcniJILion in a timely manner. We would recommend th:tt the 30-dny rule be 
amc:ru:led tc1 ali<)W for situations in which the timely suomi.siun is out of the c.ontrol of a unit. 
The Texas Medicaid Fraud Control Unit appreciates the ciT"rts of JIHS-010 I<) provide guidance and 
positie input to assist us in achieving the highest standards possil:>lc. 
Sincerely yot>rs, 
W. Rick Copeland 
Director, Medicaid Fraud Control Unit 
1'~:<5'1' 0Ft'lt:l! lh>:X I.:!H~. AL!lts, Ttl\,\5 7b711 ZH!:f  ! bL (511H63 2 [1)0  ..,. II.' I\' {1<\C. H'l'Jt. l \. ,,~ 
,l.o h.jv.u' J:f''~)f#UI l)f'}:'r;'~.ll!l) i:.:oiJ?Jn  l'nJt.Ui ~-ltur,;(d J'i<J-'U 
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)  27   
   
ACKNOWLEDGMENTS 
This report was prepared under the direction of Kevin Golladay, Regional 
Inspector General for Evaluation and Inspections in the Dallas regional office; 
Blaine Collins, Deputy Regional Inspector General; and Ruth Ann Dorrill, Deputy 
Regional Inspector General. 
Lyndsay Patty served as the Team Leader for this study and Ben Gaddis served as 
the Lead Analyst.  Other Office of Evaluation and Inspections staff who provided 
support include Maria Balderas. Office of Investigations staff who provided 
support includes Lynn Melear and Jason Weinstock.  Office of Audit Services 
staff who provide support include Nancy Bibb, Francine Olguin, Jenny Potter,  
John Retzloff, and Sylvie Witten.  Central office staff who provided support 
include Thomas Brannon, Kevin Farber, Christine Moritz, Richard Stern, and 
Sherri Weinstein.   
 
Texas State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-06-13-00300)   28   
Office of Inspector General
http://oig.hhs.gov  
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as  
amended, is  to protect the integrity of the Department of  Health and Human Services  
(HHS)  programs, as well as the health and welfare of beneficiaries  served by those 
programs.  This statutory mission  is  carried  out through  a nationwide network  of  audits, 
investigations, and inspections conducted by the  following operating components: 
Office of Audit Services 
The Office  of  Audit Services  (OAS) provides auditing services  for HHS, either by  conducting  
audits  with its own audit resources or by  overseeing  audit work done by others.  Audits  
examine the performance of HHS programs and/or its grantees and contractors in carrying  
out their respective responsibilities and are intended  to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, abuse, and  
mismanagement and promote economy and efficiency  throughout  HHS. 
Office  of Evaluation and Inspections 
The Office  of  Evaluation and Inspections (OEI)  conducts national evaluations to  provide 
HHS, Congress, and the public with timely, useful, and reliable information on significant 
issues.  These evaluations focus on preventing fraud,  waste, or abuse  and promoting  
economy, efficiency, and effectiveness of departmental programs.  To promote impact, OEI 
reports also present practical recommendations for improving program operations.  
Office of Investigations  
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations  
of  fraud and misconduct  related to HHS programs, operations, and beneficiaries.  With 
investigators working in all 50 States and the District of Columbia, OI  utilizes its resources 
by actively  coordinating with the Department  of Justice  and other Federal, State, and local 
law enforcement authorities.  The investigative efforts of OI often lead to  criminal 
convictions, administrative sanctions,  and/or  civil monetary  penalties.  
Office  of Counsel to  the Inspector  General  
The Office of Counsel to the  Inspector  General (OCIG) provides general legal services to 
OIG, rendering  advice and opinions on HHS programs  and operations and providing all 
legal support for OIGs  internal operations.  OCIG represents  OIG in all civil and 
administrative fraud and abuse cases involving HHS programs,  including False Claims Act, 
program exclusion, and civil monetary penalty cases.  In  connection with these cases, OCIG 
also negotiates and monitors corporate integrity agreements.  OCIG renders advisory 
opinions, issues compliance program  guidance, publishes fraud alerts, and provides other  
guidance  to  the health care industry concerning the anti-kickback statute and other  OIG  
enforcement authorities.