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DEPARTMENT OF HEALTH & HUMAN SERVICES Office of Inspector General
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AUG - 5 2008
TO: David Frank
Director, Medicaid Integrity Program
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Centers for Medicare & Medicaid Services
FROM: sf~art Wright
Deputy Inspector General for Evaluation and Inspections
SUBJECT: Memorandum Report: State Medicaid Agency Referrals to the Offce of
Inspector General Exclusions Program, OEI-OI-06-00301
This memorandum report presents the findings of our recent work to determine the extent
to which final actions taken by State Medicaid Agencies in 2004 and 2005 were received
by the Offce ofInspector General (OIG). OIG's exclusions program relies in part on
referrals of individuals and entities (hereafter referred to as providers) sanctioned by State
Medicaid agencies. We hope that you find this information usefuL.
BACKGROUND
the Social Security Act (the Act) specifies that providers who are
Section 1 128(b)(5) of 
suspended or excluded from paricipation or otherwise sanctioned for reasons bearing on
professional competence, professional performance, or financial integrity (hereafter
referred to as final actions) by State Medicaid agencies are subject to a permissive
exclusion by OIG. When State Medicaid agencies take final actions against providers,
are required to promptly report the providers to OIG. i Furthermore, State Medicaid
they 
agencies must notify OIG whenever State or local cours convict providers of offenses
related to participation in the Medicaid program, unless the Medicaid Fraud Control Unit
(MFCU) has already done SO.2
State Medicaid agencies and other entities, such as MFCUs and State licensure boards,
refer providers with final actions to OIG. Upon receiving a referral, OIG staff enter
biographical information on the provider into a database (hereafter referred to as the
exclusions database), which may include the provider's name, address, tax identification
num ber, date of birth (for individuals), type of provider/business, and the source of the
then review the referral to determine whether to pursue an exclusion
referraL. OIG staff 
case based on the Federal criteria for exclusion. When OIG excludes a provider, it sends
i Social Security Act  1902(a)(41) and 42 CFR  l002.3(b)(3).
242 CFR  1002.230.
OEI-01-06-00301 State Medicaid Agency Referrals to the OIG Exclusions Program Page 2  David Frank 
 
 
a notification letter to the Medicaid agency in the State in which the excluded provider 
resides. In some instances, OIG notifies additional States if the provider is believed to be 
licensed or doing business outside of the State in which he or she resides.  OIG also 
maintains the List of Excluded Individuals/Entities (LEIE), a publicly accessible database 
available on the OIG Web site, which contains information on all providers currently 
excluded. OIG updates the LEIE on a monthly basis. 
 
In addition, staff from OIG conduct outreach to the agencies that refer providers with 
final actions. This outreach typically fosters relationships with the referring agencies and 
informs them about OIGs exclusion authorities. 
  
METHODOLOGY 
 
Our review matched data from the exclusions database with information on providers 
with final actions taken by State Medicaid agencies in 2004 and 2005.  In addition, we 
surveyed State Medicaid agency officials. From November 2006 to April 2007, we sent 
our request for data (outlined further in the next section) and our survey to the directors 
of the Medicaid agencies in the 50 States and the District of Columbia (hereafter referred 
to as States).  We requested that both the data request and the survey be completed by the 
director or a designee knowledgeable about provider enrollment/disenrollment who can 
provide the States perspective.  We received 44 responses to the data request, for a 
response rate of 86 percent. We received 47 responses to the survey, for a response rate 
of 92 percent. 
 
Match of Providers With Final Actions to the Exclusions Database  
We requested that State Medicaid agencies submit information on all providers with final 
actions taken between January 1, 2004, and December 31, 2005, that should be referred 
to OIG under section 1128(b)(5) of the Act and 42 CFR  1001.601.3  Requested 
information included the providers name, address, tax identification number, type of 
profession/business, date of birth (for individuals), type of action taken against the 
provider, and date of the action. Where appropriate, we contacted State Medicaid 
agencies and OIGs exclusions staff to clarify the types of final actions we received. 
 
We matched the State data with data from the exclusions database entered on or after  
January 1, 2002.  Our date range for the data from the exclusions database preceded the 
date range of the State data because other agencies may have referred a provider to OIG 
before a State Medicaid agency took a final action against the provider.  We counted a 
provider sent by State Medicaid agencies as a match when the providers name and 
                                                 
3  We  further defined these final actions in the data request as program suspensions, program exclusions,  
other actions that limit the ability of an individual or entity/business to  participate in a State Medicaid  
program regardless of what such an action is called and situations in which an individual or entity/business 
voluntarily withdraws from a States Medicaid program to avoid a formal sanction.  
OEI-01-06-00301  State Medicaid Agency Referrals to the OIG Exclusions Program   Page 3  David Frank 
 
 
designated OIG region matched the exclusions database.4  Where appropriate, we also 
used one or more of the following variables:  tax identification number, date of birth, and 
city and State.  Finally, we also visually reviewed certain provider records to verify close 
matches (such as transposed digits).  Attachment A provides a breakdown of respondents 
by State with their match rates. 
 
Survey of State Medicaid Agencies 
Our survey collected data on agency staff who make referrals, OIG communication with 
State Medicaid agencies about referring providers with final actions, and barriers to 
referrals. It included open-ended questions on factors that impede referrals and 
additional outreach desired by the States. Before sending the survey, we solicited 
comments about the surveys content from  OIG staff who work with the exclusions 
program.  We incorporated their input in the final survey. 
 
Limitations  
The findings presented are based on self-reported data that we received from State 
Medicaid agencies. We did not independently verify the accuracy of the information we 
received on providers with final actions, nor did we verify whether we received a 
complete list of providers with final actions taken during our timeframe.   
 
Standards 
We conducted this study in accordance with the Quality Standards for Inspections 
issued by the Presidents Council on Integrity and Efficiency and the Executive Council 
on Integrity and Efficiency. 
 
 
RESULTS 
 
About Two-Thirds of Providers With Final Actions Imposed by State Medicaid 
Agencies in 2004 and 2005 Were Not Found in the Exclusions Database 
State Medicaid agencies reported taking 4,319 final actions against providers in 2004 and 
2005. Of these, 61 percent were not found in the exclusions database.  See Figure 1 on 
page 4 for a breakdown of the results of the match. 
                                                 
4 States are assigned to  regional offices operated by  OIG.  
OEI-01-06-00301  State Medicaid Agency Referrals to the OIG Exclusions Program   Page 4  David Frank 
 
 
 
  Figure 1:  Results of match of  providers with final actions from
  
State Medicaid agencies in 20042005 to the exclusions database*
 
 
 
Providers for 
 
whom a match 
  cannot be  
  determined 
  0.8%  Providers who  
  matched with  
Providers who 
  are  not in the   the exclusions  
database 
  exclusions  
38.6% 
  database.   No  
  match exists  
using the name  
 
and the region 
 
60.6% 
 
 
N=4,319 providers with final actions 
 
  * See Methodology section  for the definition of the types of  matches. 
  Source:  OIG analysis of data from State Medicaid agencies and the exclusions database, 20072008. 
 
Match Rates Varied Widely Across States 
 
Eleven States had a match rate of less than 25 percent, while 9 States had a match rate 
greater than 75 percent. The match rates of the States ranged from 0 to 100 percent, with 
a median rate of 43 percent.5  About half of the States with a low match rate took few 
final actions against providers. Of the 11 States with match rates of 25 percent or less,  
6 States took final actions against fewer than 10 providers, with 4 of these States taking 
action against 2 or fewer providers (see Attachment A for match rates by State).   
 
The eight States that took final actions against more than 100 providers had a slightly 
higher median match rate of 48 percent, yet these States still had a large variation in their 
match rates.  Alabama, Louisiana, and Texas had the highest match rates of these eight 
States, with rates of 94 percent, 85 percent, and 81 percent, respectively.  However, the 
two States that took final actions against the largest number of providers, New York and 
Florida, had two of the lowest match rates:  21 percent and 9 percent, respectively. 
 
We found no general patterns either from the data match or from the match results and 
responses to our survey. For instance, although 34 out of the 47 Medicaid agency 
officials reported that they have an identified point of contact within OIG for questions 
concerning referrals, we found no consistency between States having both a high match 
                                                 
5  Although we received responses to our data request from 44 States, our match rate includes only the  
38 States that reported taking  one or more  final actions against providers in  2004 and 2005.   
OEI-01-06-00301  State Medicaid Agency Referrals to the OIG Exclusions Program   Page 5  David Frank 
 
 
rate and an OIG point of contact.  Furthermore, we found no association between those 
States that cited barriers to reporting final actions and low match rates.  Finally, we also 
found no consistency between the number of providers with final actions sent by States 
and their match rates.   
 
Officials from State Medicaid agencies conveyed uncertainty about the types of 
information to send with referrals, the types of final actions to refer to OIG, and the 
outcome of the referrals that they make. We asked State Medicaid agency officials about 
factors that may present barriers to referring providers with final actions to OIG.  
Officials from 22 out of 47 State Medicaid agencies cited unclear guidance and 
instructions from OIG regarding the documentation to send with referrals as a barrier.  As 
stated by one State Medicaid official, If a referral is made, we dont know the 
documentation requirements.  Additionally, about half of State Medicaid officials 
indicated that they would like to have additional guidance about the referral process.  As 
one State Medicaid official responded, It would be handy to have a little cheat sheet 
that clearly stated refer these cases with this info. 
 
Moreover, officials from 19 out of 47 State Medicaid agencies cited uncertainty about the 
final actions that need to be referred to OIG as a barrier.  Some of these officials were 
unsure which actions taken by the State Medicaid agency are required to be referred to 
OIG. Six State Medicaid officials commented that they were unaware that they were 
supposed to report final actions to OIG.  According to one State Medicaid agency 
official, The agency has not referred actions to OIG as we did not believe our process 
met OIGs definition of a termination.   
 
Furthermore, State officials reported that they receive little feedback on the providers 
with final actions that they refer to OIG.  Of the 47 State Medicaid agencies, 12 officials 
reported that OIG informs the agency of the outcome of the provider referral a little of 
the time or never, and 19 reported dont know.  Just five States reported receiving 
this information all of the time.  As previously mentioned, information on providers 
excluded by OIG is available to States.  When OIG excludes a provider, it sends a 
notification letter to the Medicaid agency in the State in which the excluded provider 
resides. In some instances, OIG notifies additional States if the provider is believed to be 
licensed or doing business outside of the State in which he or she resides.  It also adds the 
provider to the LEIE. OIG does not provide written notice on referrals on which it takes 
no action. 
 
Despite the barriers, State Medicaid agencies rate recent outreach from OIG as helpful 
and would welcome more information about exclusions processes. On our survey, 16 out 
of 47 State Medicaid officials reported that OIG provided them with information 
concerning the Federal exclusions program in the past 2 years.  In most cases, this 
information covered Federal exclusion authorities, the effect of Federal exclusions, and 
when to refer a provider to OIG. Furthermore, about half of the State Medicaid officials 
OEI-01-06-00301  State Medicaid Agency Referrals to the OIG Exclusions Program   Page 6  David Frank 
 
 
reported that the agency had discussions in the past 2 years with OIG concerning referrals 
of providers with final actions. All of the States that had these discussions reported that 
the information they received was helpful.  
 
In addition, several officials whose agencies received outreach commented positively on 
their working relationships with OIG.  One official commented that The current  
relationship between the State Medicaid agency and the OIG is very positive.  
Communication between the OIG and the State Medicaid agency is frequent and useful 
regarding the exclusion of providers. 
  
State Medicaid officials who neither received information nor had discussions with OIG 
concerning exclusions provided several suggestions for the kind of outreach that they 
would like to receive. These ideas include providing a detailed explanation of State 
agency obligations, written instructions on documentation to send, and contact 
information for OIG exclusions staff.  Other suggestions included formalized training for 
State Medicaid agency staff, as well as information on how to discuss the exclusions 
program with providers.  Additionally, two officials reported that the information about 
exclusions should be provided to the States Offices of Inspector General and not to the 
Medicaid agency. 
 
Officials from most State Medicaid agencies that had either low match rates or that were 
unable to supply data for this study expressed interest in working more closely with OIG 
regarding referrals.  One official noted that the Medicaid agency will better 
communicate with our investigative partners to collect the necessary documents in 
support of the convictions to substantiate our claim for both provider termination from 
the Medicaid program and notification to your office.  Another official commented that 
The agency is committed to assisting in the identification and reporting of providers 
who are excluded from participation in State and Federal Health Care programs.  We  
look forward to receiving additional information on the mechanisms we should employ to 
assist the OIG. Finally, one State official reported that by responding to our study, it 
became apparent to the agency that no coordinated effort existed . . . to make referrals.  
In response, the agency recently established an interdepartmental memorandum of 
understanding to outline all of the functions touching fraud and abuse including the 
process to make referrals up to the Federal OIG. 
 
CONCLUSION 
 
Our results show that opportunities exist for both OIG and State Medicaid agencies to 
increase the number of referrals of providers with final actions.  Just one-third of the 
providers with final actions taken by State Medicaid agencies in 2004 and 2005 were 
found in the exclusions database.  Additionally, officials from State Medicaid agencies  
reported uncertainty about referral procedures.  It is likely that increased outreach by OIG 
to State Medicaid agencies to provide information about these procedures would be 
OEI-01-06-00301  State Medicaid Agency Referrals to the OIG Exclusions Program   Page 7  David Frank 
 
 
beneficial. Moreover, increasing outreach could foster improved working relationships 
between OIG and State Medicaid agencies, increase the number of referrals from State 
Medicaid agencies, and strengthen OIGs ability to identify potential fraud through State 
Medicaid agencies. 
 
This report is being issued directly in final form because it contains no recommendations.  
If you have comments or questions about this report, please provide them within 60 days.  
Please refer to report number OEI-01-06-00301 in all correspondence. 
 
 
ATTACHMENT  
Match Rates of Final Action Data and the Exclusions Database Data by State  
 
 
cc:  State Medicaid Directors 
 
OEI-01-06-00301  State Medicaid Agency Referrals to the OIG Exclusions Program   Page 8  David Frank 
 
Attachment:  Match Rates of Final Action Data and the Exclusions Database by  State 
  Number of   Percentage of  Number of   Percentage of  Number of   Percentage of  Total number of  
  providers that   providers that   providers that   providers  providers for  providers for  providers with  
  matched the   matched the   did not match  that did not   which we   which we   final actions  
State  exclusions   exclusions   the exclusions   match the  could not   could not   collected for 
database   database  database  exclusions   determine a  determine a  this evaluation 
database  match  match 
Alabama  161  93.6%  11  6.4%  0   0.0%  172 
Alaska1                
Arizona2                
Arkansas  0  0.0%  2  100.0%  0   0.0%  2 
California3                
Colorado  10  33.3%  20  66.7%  0  0.0%  30 
Connecticut  4  30.8%  8  61.5%  1  7.7%  13 
Delaware  1  50.0%  1  50.0%  0  0.0%  2 
District of Columbia   2  10.5%  16  84.2%  1  5.3%  19 
Florida  75  8.7%  786  91.0%  3  0.4%  864 
Georgia  14  51.9%  13  48.1%  0  0.0%  27 
Hawaii4                
Idaho  16  84.2%  3  15.8%  0  0.0%  19 
Illinois  24  47.1%  26  51.0%  1  2.0%  51 
Indiana  10  40.0%  15  60.0%  0  0.0%  25 
Iowa  11  26.2%  29  69.1%  2  4.8%  42 
Kansas  4  33.3%  8  66.7%  0  0.0%  12 
Kentucky  45  56.3%  35  43.8%  0  0.0%  80 
Louisiana  138  85.2%  23  14.2%  1  0.6%  162 
Maine  59  79.7%  14  18.9%  1  1.4%  74 
Maryland  74  54.8%  61  45.2%  0  0.0%  135 
Massachusetts  0  0.0%  2  100.0%  0   0.0%  2 
Michigan3                
Minnesota  9  25.7%  26  74.3%  0  0.0%  35 
Mississippi  4  100.0%  0  0.0%  0   0.0%  4 
Missouri  54  62.8%  31  36.1%  1  1.2%  86 
Montana  5  62.5%  3  37.5%  0  0.0%  8 
Nebraska  1  12.5%  7  87.5%  0  0.0%  8 
Nevada  1  16.7%  5  83.3%  0  0.0%  6 
New Hampshire1                
New Jersey   32  68.1%  14  29.8%  1  2.1%  47 
New Mexico1  --- --- --- --- --- --- ---
New York  280  20.8%  1,061  78.7%  7  0.5%  1,348 
North Carolina  20  12.1%  146  88.0%  0  0.0%  166 
North Dakota1                
Ohio  73  41.0%  103  57.9%  2  1.1%  178 
Oklahoma  0  0.0%  16  100.0%  0   0.0%  16 
Oregon1                
Pennsylvania  29  90.6%  3  9.4%  0  0.0%  32 
Rhode Island  0  0.0%  1  100.0%  0   0.0%  1 
South Carolina  36  94.7%  2  5.3%  0  0.0%  38 
South Dakota2                
Tennessee3                
Texas  438  81.0%  94  17.4%  9  1.7%  541 
Utah  5  83.3%  1  16.7%  0  0.0%  6 
Vermont1                
Virginia  9  39.1%  12  52.2%  2  8.7%  23 
Washington  12  66.7%  6  33.3%  0  0.0%  18 
West Virginia4                
Wisconsin  11  44.0%  13  52.0%  1  4.0%  25 
Wyoming  0  0.0%  2  100.0%  0   0.0%  2 
Total  1,667  38.6%  2,619  60.6%  33  0.8%  4,319 
                                                 
1 The State Medicaid agency reported taking no final actions against  providers in 2004 and  2005.  However, the agency completed  the survey. 
2 The State Medicaid  agency reported that it does not  take final actions against providers and  thus did  not complete  the survey  or data request.  
3 The State Medicaid agency submitted incomplete data that we were unable to use for our analysis.  However, the agency completed the survey. 
4 The State Medicaid agency did not respond to either the survey or the data request.  
OEI-01-06-00301  State Medicaid Agency Referrals to the OIG Exclusions Program