U.S. Department of Health & Human Services  
Office of Inspector General 
S
EMIANNUAL
R
EPORT to
C
ONGRESS
October 1, 2015
  to  
March 31, 2016   
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ii THE DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS), Office of Inspector General (OIG) 
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aa provides independent and objective oversight that promotes economy, efficiency, and effectiveness in the programs 
zz and operations of HHS.  OIGs program integrity and oversight activities are shaped by legislative and budgetary 
ii requirements and adhere to professional standards established by the Government Accountability Office, the 
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Department of Justice (DOJ), and the Inspector General community.  OIG carries out our mission to protect the 
aa integrity of HHS programs and the health and welfare of the people served by those programs through a nationwide 
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network of audits, investigations, and evaluations conducted by the following operating components with assistance 
rr from OIG counsel and management.  
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OAS The Office of Audit Services (OAS).  OAS conducts audits of HHS programs and operations through its own resources 
  
or by overseeing audit work done by others.  Audits examine the performance of HHS programs and/or its grantees and 
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contractors in carrying out their respective responsibilities and are intended to provide independent assessments of 
II HHS programs and operations.  These assessments help reduce waste, abuse, and mismanagement and promote the 
OO economy, efficiency, and effectiveness of programs and operations throughout HHS.
OEI
The Office of Evaluation and Inspections (OEI).  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, and abuse and promoting economy, efficiency, and effectiveness in HHS programs.  OEI reports also 
present practical recommendations for improving program operations.
OI The Office of Investigations (OI).  OI conducts criminal, civil, and administrative investigations of fraud and 
misconduct related to HHS programs, operations, and beneficiaries.  With investigators working in almost every State, 
the District of Columbia, and Puerto Rico, OI coordinates with DOJ and other Federal, State, and local law enforcement 
authorities.  OI also coordinates with OAS and OEI when audits and evaluations uncover potential fraud.  OIs 
investigative efforts often lead to criminal convictions, administrative sanctions, or civil monetary penalties (CMP).
OCIG The Office of Counsel to the Inspector General (OCIG). 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, self-disclosure, and CMP 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 about the anti-kickback statute and 
other OIG enforcement authorities.
EM Executive Management (EM).  EM is composed of the Immediate Office of the Inspector General and the Office  
of Management and Policy.  EM is responsible for overseeing the activities of OIGs components; setting vision  
and direction, in collaboration with the components, for OIGs priorities and strategic planning; ensuring effective 
management of budget, finance, information technology (IT), human resources, and other operations; and serving  
as a liaison with HHS, Congress, and other stakeholders.  EM plans, conducts, and participates in a variety of 
cooperative projects within HHS and with other Government agencies.
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INSPECTOR  
GENERAL
A MESSAGE FROM THE INSPECTOR GENERAL 
Daniel R. Levinson 
Inspector General
I am pleased to submit this Semiannual Report to Congress that summarizes the activities of 
the Office of Inspector General (OIG), Department of Health and Human Services (HHS or the 
Department), for the 6-month period that ended March 31, 2016.  OIG advances its core mission of protecting the 
integrity of HHS programs and the people they serve by working to prevent  
and detect fraud, waste, and abuse.  When misconduct is identified, OIG takes appropriate enforcement  
action or makes recommendations to improve Department programs and operations.
One of the ways in which OIG helps to prevent fraud, waste, and abuse is by providing guidance that supports the 
health care industrys compliance efforts.  For example, we issue special fraud alerts and bulletins to notify providers 
of risk areas and problematic conduct.  For this reporting period, OIG issued a policy reminder about information 
blocking and the anti-kickback statute and a policy statement regarding self-administered Medicare drugs dispensed  
in outpatient settings.  Another way that we strive to prevent problems is by making recommendations, that, if 
implemented, would address vulnerabilities and prevent recurrence of the identified problem.  For example, OIG 
recently recommended that certain States ensure compliance with Federal health and safety requirements for child 
care providers to help reduce the risk of harm to children.
Through our work, OIG detects and identifies services that are questionable, undocumented, medically unnecessary, 
or incorrectly coded.  We also identify duplicate payments and payments for services that were not provided.   
In doing so, OIG uncovers potentially systemic payment vulnerabilities.  For example, OIG identified that hospices 
inappropriately billed Medicare over $250 million for general inpatient care and recommended that the Centers for 
Medicare and Medicaid Services (CMS) increase its oversight of hospice claims and review Part D payments for drugs 
for hospice beneficiaries. 
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efforts to deter misconduct through administrative actions.  OIG investigations, including work on Strike Force cases, 
OFFICE OF  
target emerging patterns of fraud and help to hold wrongdoers accountable.  For example, a home health agency 
INSPECTOR  
owner was sentenced to more than 6 years and ordered to pay $4.5 million in restitution for billing Medicare for 
GENERAL
unnecessary home health care and therapy services.  OIG uses its administrative tools to complement Department of 
Justice criminal and civil enforcement efforts and has deployed a team dedicated to pursing administrative 
enforcement actions.  We pursue enforcement where appropriate, which helps honest providers flourish by  
weeding out wrongdoers.   
During this reporting period, we promoted economy, efficiency, and effectiveness of program management  
through a comprehensive case study of HealthCare.gov that identified important lessons learned from the CMSs 
implementation of the website and offered insights that may be used by other programs charged with implementing 
large, complex, and high-profile initiatives.  We expect to apply these lessons in management reviews in the future.
Since its 1976 establishment, OIG has worked diligently with its partners to protect HHSs vital health and human 
services programs.  The achievements of this office would not be possible without the dedication and professionalism 
of all OIG employees.  Once again, I would like to express my appreciation to Congress and to the Department for their 
sustained commitment to the important work of our office.
Daniel R. Levinson 
Inspector General 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   iii  
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i HHS OIGS SEMIANNUAL REPORT TO CONGRESS (Semiannual Report) describes significant problems, 
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a abuses, deficiencies, and investigative outcomes relating to the administration of HHS programs and operations that 
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z were disclosed during the reporting period.  This edition addresses work completed during the first half of fiscal year 
ih (FY) 2016 (October-March) and summarizes key accomplishments during the period.     
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a During the first half of FY 2016, OIG reported expected recoveries of more than $2.77 billion consisting of nearly $554.7 
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gl million in audit receivables and about $2.22 billion in investigative receivables, which include about $336.6 million in 
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r non HHS investigative receivables resulting from our work in areas such as the States shares of Medicaid restitution.  
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OIG reported 428 criminal actions against individuals or entities that 
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engaged in crimes against HHS programs and 383 civil actions, which 
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include false claims and unjust-enrichment lawsuits filed in Federal 
Ic Expected  district court, civil monetary penalties (CMP) settlements, and 
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A Recoveries  CMP recoveries have  
administrative recoveries related to provider self-disclosure matters.   
$2.77 billion
increased almost five  
  Our CMP recoveries have increased almost five fold over the past  
r fold over the past 3 years.
428 3 years, and OIG is on track to exceed prior recoveries in FY 2016.   
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criminal actions We also reported exclusions of 1,662 individuals and entities from 
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383 participation in Federal health care programs.
civil actions
 
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s Health Care Fraud Strike Force Teams and Other Enforcement Actions 
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The Health Care Fraud Prevention and Enforcement Action Team (HEAT) was started in 2009 by HHS and the U.S. 
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Department of Justice to strengthen programs and invest in new resources and technologies aimed at preventing and 
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l combating health care fraud, waste, and abuse.  HEAT has continued to identify and hold accountable those who seek 
h to defraud Medicare and Medicaid.  Health Care Fraud Strike Force teams, a key component of HEAT, coordinate law 
g enforcement operations conducted jointly by Federal, State, and local law enforcement entities.  The teams have a 
i record of successfully analyzing data to quickly identify, investigate, and prosecute fraud.  
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The Strike Force model operates in Miami, Florida; Los Angeles, California; Detroit, Michigan; southern Texas; 
Brooklyn, New York; southern Louisiana; Tampa, Florida; Chicago, Illinois; and Dallas, Texas.  During the first half of  
FY 2016, Strike Force efforts resulted in the filing of charges against 87 individuals or entities, 100 criminal actions,  
and $116.8 million in investigative receivables.
HHHHSS  OOIIGG  SSHeeHmmSii aaOnnInnGuu Saaell  mRReeiappnoonrrttu  ttaool   RCCeoopnnoggrrrtee tssoss   C      o    ||n    g      r  eOOsccstt  oo  bb  |ee  rr     11 O,,  22c00to11b55e  r   MM1,aa 2rr0cc1hh5  33 11 ,,M  2200ar11c66h     31, 2016   iivviv The following is a Strike Force case example:
HIGHLIGHTS  
Home Health Agency Owner Sentenced to More Than 6 Years in Prison for Falsely Billing Medicare
OF OUR  
Amer Ehsan, the owner of Advance Home Health Care Services, Inc. (Advance), was sentenced to 6 years and 8 
ACCOMPLISHMENTS
months in prison and ordered to pay $4.5 million in restitution for his guilty plea to health care fraud conspiracy.  
Ehsan admitted that he billed Medicare for unnecessary home health care and therapy services, paid physicians 
to refer Medicare beneficiaries to Advance and sign medical documents falsely certifying that they required 
home health care, and paid Medicare beneficiaries cash kickbacks in exchange for signing multiple blank physical 
therapy records.  Additionally, Ehsan admitted that he owned Michigan Rehab and Management Services LLC, 
which he used to sell information about Medicare beneficiaries and corresponding fictitious patient files to 
other home health care agencies.  Ehsan was part of a wide-ranging scheme that involved 12 defendants, all of 
whom have pleaded guilty.
The following are other investigations case examples:
Medical Equipment Company Enters into $646 Million Settlement Agreement
Olympus Corporation of the Americas (Olympus) agreed to enter into a $310 million civil False Claims Act 
settlement with the United States and a comprehensive 5-year Corporate Integrity Agreement (CIA).  The 
settlement was part of a global criminal and civil resolution under which Olympus agreed to pay a total of $646 
million to resolve kickback allegations.  Olympus is the countrys largest distributor of endoscopes and related 
medical equipment.  Through the civil settlement agreement, Olympus resolved allegations that, between 
January 2006 and December 2011, it paid illegal kickbacks to doctors and hospitals to induce them to purchase 
endoscopes and other medical and surgical equipment.  These kickbacks came in the form of consulting 
agreements, foreign travel, lavish meals, grants, and free endoscopes.  As a result, Olympus allegedly caused the 
submission of false claims to the Medicare, Medicaid, and Tricare programs.  The CIA contains several provisions 
for accountability by Olympus Board of Directors, extensive audit requirements, and requires Olympus to 
implement an internal risk assessment and mitigation program.     
Pharmacy CEO Sentenced to 10 Years in Prison for Health Care Fraud
Kim Duron Mulder, CEO of Kentwood Pharmacy, was sentenced to 10 years in prison, ordered to pay $8.8 million 
in restitution, joint and several, and banned from participation in Federal health care programs for 50 years for 
his guilty plea to conspiracy to commit health care fraud.  According to the investigation, Kentwood Pharmacy 
billed Medicare and private health insurers for prescription drugs that had been dispensed to patients and 
subsequently inappropriately returned to pharmacy stock.  These fraudulent actions resulted in the cross-
contamination of drugs, improper labeling of drugs, the placement of different drug dosages into stock bottles, 
HHS OIG SemiaHnHnSu aOlI RGe Speomrti aton nCuoanl gRreepsso r  t    t|o     C  oOncgtorebsesr   1   ,  |2  0   1 O5 ct oMbaerrc h1,  3210,1 250 1 6M  arch 31, 2016   v v and the placement of the wrong drugs into stock bottles.  Public and private insurers paid more than  
$79 million for adulterated and misbranded drugs that were sent to patients at more than 800 nursing  
HIGHLIGHTS  
and adult foster care homes.  
OF OUR  
ACCOMPLISHMENTS
Inefficient Payments, Policies, and Practices
Medicare and Medicaid policies or practices sometimes result in inefficiencies when, for example, unintended 
loopholes or other inherent problems invite exploitation or hinder consistent payment determinations.  Improper 
payments occur when the programs do not effectively prevent, deter, identify, or address inappropriate and abusive 
billing by providers and suppliers.  Some, but not all, abusive billing is fraudulent.    
The following are examples of our work:
Average Manufacturer Prices Increased Faster Than Inflation for Many Generic Drugs
Our review found that generic drug price increases exceeded the specified statutory inflation factor applicable 
to brand-name drugs for 22 percent of the quarterly average manufacturer prices we reviewed.  If the provision 
for brand-name drugs were extended to generic drugs, Medicaid would receive additional rebates.  Medicaid 
would have received $1.4 billion in additional rebates for the top 200 generic drugs, ranked by Medicaid 
reimbursement, from 2005 through 2014.  
Our findings are consistent with our previous work and support our prior recommendation that CMS consider 
seeking legislative authority to extend the additional rebate provisions to generic drugs.  On November 2, 2015, 
the Bipartisan Budget Act of 2015 (P.L. No. 114-74) was enacted and included provisions extending the 
additional rebate to generic drugs.  The additional rebate for generic drugs will apply to rebate periods 
beginning with the first quarter of 2017. 
A-06-15-00030    December 2015 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   vi CMS Has Not Performed Required Closeouts of Contracts Worth Billions 
HIGHLIGHTS   CMS relies extensively on contractors to carry out its basic mission and spends billions each year in contracts for a 
variety of goods and services.  Our review focused on CMSs Federal Acquisition Regulation (FAR) contracts that 
OF OUR  
were active as of February 2014, and its FAR contracts pending closeout as of February 2014.  We found that CMS 
ACCOMPLISHMENTS
had over 6,000 contracts with a combined value of $25 billion that were not closed out as required under the FAR.  
CMS continues to have thousands of contracts overdue for closeout, with 15 percent of contracts that were completed 
before FY 2011 at least 10 years overdue.  Because the closeout process is generally the last chance for improper 
contract payments to be detected and recovered, delays in the closeout process pose a risk to Government funds.  
Additionally, key pieces of information that CMS could use to manage and oversee contracts, such as project 
description and contract payments, are not easily accessible through its contract management system.  
CMS concurred with all of our recommendations to implement additional strategies to meet required FAR timeframes 
for closeout, determine the status of contracts for which closeout status could not be determined, improve reports 
from CMSs contract management system to allow for easier access to contract data that would assist in closeout 
and funds management, and improve coordination and collaboration across departmental staff with contract 
closeout responsibilities.
OEI-03-12-00680    December 2015
Implementation of Health Insurance Marketplaces
The Patient Protection and Affordable Care Act (ACA) required establishment of health insurance marketplaces  
(also known as health insurance exchanges).  ACA also included requirements for insurance affordability and other 
programs related to the marketplaces.  OIGs oversight of the marketplaces focuses on payment, eligibility, 
management, and IT security issues. 
The following are examples of our work: 
HealthCare.gov:  Case Study of CMS Management of the Federal Marketplace 
The objective of this case study was to gain insight into CMSs implementation and management of the Federal 
Marketplace, focusing primarily on HealthCare.gov.  We found that HHS and CMS made many missteps 
throughout development and implementation that led to the poor launch of HealthCare.gov on October 1, 2013.  
Most critical was the absence of clear leadership, which caused delays in decision-making and a lack of clarity in 
HHS OIG SemiaHnHnSu aOlI RGe Speomrti aton nCuoanl gRreepsso r  t    t|o     C  oOncgtorebsesr   1   ,  |2  0   1 O5 ct oMbaerrc h1,  3210,1 250 1 6M  arch 31, 2016   viivii project tasks.  Additional missteps included devoting too much time to developing policy, which left too little 
time for developing the website, and failing to properly manage its key website development contract.  CMSs 
HIGHLIGHTS  
organizational structure and culture also hampered progress, including poor coordination between policy and 
OF OUR  
technical work.  CMS continued on a failing path despite signs of trouble, making rushed corrections that  
ACCOMPLISHMENTS
proved insufficient.  
Following the launch, CMS and contractors pivoted quickly to corrective action, reorganizing the work to improve 
execution and facilitating health plan enrollment for millions of consumers.  Key factors that contributed to recovery 
of the website included adopting a badgeless culture for the project, wherein all CMS staff and contractors 
worked together as a team, and a practice of ruthless prioritization that aligned work efforts with the most 
important and achievable goals.  CMS recovered the website for high consumer use within 2 months and 
adopted more effective organizational practices.  CMS concurred with our recommendation to continue to apply 
lessons from the HealthCare.gov recovery in its management of the Federal Marketplace and broader organization.
OEI-06-14-00350    February 2016
Not All of the State Marketplaces Internal Controls Were Effective in Ensuring That Individuals Were Enrolled in Qualified 
Health Plans According to Federal Requirements
Not all of the internal controls for the marketplaces in Colorado, District of Columbia, Minnesota, Vermont, or 
Washington were effective in ensuring that individuals were enrolled in qualified health plans (QHPs) according 
to Federal requirements.  Kentuckys internal controls were generally effective.  Internal controls were generally 
not effective in determining or verifying eligibility of applicants, resolving inconsistencies in eligibility data, or 
maintaining and updating eligibility and enrollment data.  In addition, internal controls in Colorado, District of 
Columbia, and Vermont related to verifying information were not effective, and Colorados internal controls 
related to obtaining certain data were ineffective.  
As applicable, the marketplaces generally agreed with either our findings or our recommendations that they 
take action to improve their internal controls related to resolving inconsistencies in eligibility data, to 
maintaining and updating eligibility and enrollment data, and to verifying applicants eligibility.  Minnesota did 
not agree with our recommendation that it redetermine, if necessary, the eligibility of the sample applicants for 
whom we determined that verifications were not performed according to Federal requirements.
From October 2015 to March 2016, reports were issued for the following States:  Vermont (A-01-14-02507), 
District of Columbia (A-03-14-03301), Minnesota (A-05-14-00043), Washington (A-09-14-01006), Colorado 
(A-07-14-03199), and Kentucky (A-04-14-08036).
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   viii CMS Could Not Effectively Ensure That Advance Premium Tax Credit Payments Made Under the Affordable Care Act Were Only 
for Enrollees Who Paid Their Premiums 
HIGHLIGHTS  
OF OUR   CMS could not ensure that advance premium tax credit (APTC) payments made to QHP issuers were only for 
ACCOMPLISHMENTS enrollees who had paid their premiums.  CMS:  (1) relied on each QHP issuer to verify that enrollees paid their 
monthly premiums and to attest that APTC payment information was accurate; and (2) had sole responsibility 
for ensuring that APTC payments were made only for enrollees who had paid their premiums and did not share 
these data for enrollees with the Internal Revenue Service (IRS).
CMS concurred with our recommendation to establish policies and procedures to calculate APTC payments 
without relying solely on QHP issuers attestations that enrollees have paid their premiums.  CMS did not 
indicate concurrence or nonconcurrence with our recommendation that once it implements an automated 
process to maintain individual enrollee data, it consult with the IRS to explore sharing APTC payment data.  
A-02-14-02025    December 2015
Child Care and Development Fund
In 2015 alone, the U.S. Government spent approximately $5.4 billion to help States, territories, and tribes subsidize 
childcare for low-income working families.  Every month, the Governments Child Care and Development Fund 
underwrites the care of nearly 1.5 million children from low-income families so their parents can work or attend 
school.  Childcare providers receiving Federal subsidies must offer a safe environment for children.  Gaps in oversight 
and monitoring can place the health and safety of children at risk, as our work has demonstrated.
The following is an example of our work:
Some South Carolina, Puerto Rico, and Florida Childcare Providers Did Not Always Comply With Health and Safety Requirements
We found that childcare providers did not comply with health and safety requirements, including physical 
conditions requirements and record requirements for staff and children.  In addition, some of the childcare 
providers were not available during operating hours to complete our unannounced inspections.  South Carolina, 
Puerto Rico, and Florida generally concurred with our findings and recommendations to ensure compliance with 
health and safety requirements and documentation requirements.  
From October 2015 to March 2016, reports were issued for the following States:  South Carolina (A-04-14-08031; 
A-04-14-08032); Puerto Rico (A-02-14-02001; A-02-14-02016); and Florida (A-04-14-08033; A-04-14-08034).
HHS OIG SemiaHnHnSu aOlI RGe Speomrti aton nCuoanl gRreepsso r  t    t|o     C  oOncgtorebsesr   1   ,  |2  0   1 O5 ct oMbaerrc h1,  3210,1 250 1 6M  arch 31, 2016   ixix Health Information Technology
HIGHLIGHTS  
OF OUR   Health IT, including electronic health records (EHRs), offers opportunities for improved patient care, more efficient 
practice management, and improved overall public health.  The American health care system is increasingly relying on 
ACCOMPLISHMENTS
health IT and the electronic exchange and use of health information, but threats to privacy and security are ever-
evolving and the Department must remain vigilant.  OIG has identified the meaningful and secure exchange and use of 
electronic information and health IT as a top management challenge facing the Department.
OIG Policy Reminder:  Information Blocking and the Federal Anti-Kickback Statute
As HHS focuses on the flow of information across the care continuum, OIG reminded the public about how 
information blocking may affect safe harbor protection under the Federal anti-kickback statute (42 U.S.C.  
1320a-7b(b)).  OIG stated that donations of items or services that have limited or restricted interoperability due 
to action taken by an applicable individual or entity would fail to meet one of the conditions of the safe harbor 
and would be inconsistent with the intent of the safe harbor to promote the use of technology that is able to 
communicate with products from other vendors.  Failure to meet this condition would mean that the safe 
harbor would not apply and the arrangement would be subject to case-by-case review under the Federal 
anti-kickback statute.  As OIG stated, such donations would be suspect under the statute.
The following is an example of our work:
High-Risk Security Vulnerabilities Identified During Reviews of Information System General Controls at Three California  
Managed-Care Organizations Raise Concerns About the Integrity of Systems Used To Process Medicaid Claims 
We summarized the high-risk security vulnerabilities that we identified in our previous reviews of information 
system general controls at three California Medi-Cal managed care organizations (MCOs).  We identified 74 
high-risk security vulnerabilities, most of which were significant and pervasive, in the information system general 
controls at the three Medi-Cal MCOs.  
Our consolidated findings from the individual reports raise concerns about the integrity of the systems used to 
process Medicaid managed-care claims.  California informed us, in comments on the individual reports, that it 
was addressing these vulnerabilities.  The fact that some of the same vulnerabilities were identified at all three 
MCOs suggests that other California Medi-Cal managed-care information systems may be similarly vulnerable.  
This report is intended to provide information to assist California and CMS in strengthening MCOs system security.
A-09-15-03004    December 2015
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   x Quality of Care and Beneficiary Access
HIGHLIGHTS  
OF OUR   Quality of care and beneficiaries access to health care are two areas of accountability that are essential to providing a 
well-managed health care system.  As Americans continue to live longer and with more chronic medical conditions, we 
ACCOMPLISHMENTS
must ensure that our Medicare and Medicaid beneficiaries, some of whom are our most vulnerable citizens, receive 
high-quality health care. We must also ensure that they receive timely access to the health care they need.
The following is an example of our work:
Most Children with Medicaid in Four States Are Not Receiving Required Dental Services
We found that three out of four Medicaid children in California, Indiana, Louisiana, and Maryland did not receive 
all required dental services, with one in four children failing to see a dentist at all.  While these States reported 
that they employ a variety of strategies to address this problem and CMS has taken some positive steps in this 
area, we continue to have concerns that children are not receiving required dental services.  
CMS fully or partially concurred with the majority of OIGs recommendations including CMS working with States 
to identify area with limited providers, to analyze the effects of Medicaid payments on access to dental 
providers, and to educate families about the importance of dental care.  CMS did not concur with our 
recommendation to work with States to track childrens use of required dental services.
A-09-15-03004    December 2015
HHS OIG SemiaHnHnSu aOlI RGe Speomrti aton nCuoanl gRreepsso r  t    t|o     C  oOncgtorebsesr   1   ,  |2  0   1 O5 ct oMbaerrc h1,  3210,1 250 1 6M  arch 31, 2016   xixi     
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C HealthCare.gov:    on Aging:  Opioid  Commerce,  Commerce,  Protecting Seniors 
A Review of  Use Among   Subcommittee on  Subcommittee on  from Identity Theft:  
Operations and  Seniors  Issues and  Health:  Examining  Oversight and  Is the Federal 
Enrollment Emerging Trends Medicaid and CHIPs  Investigations:   Government Doing 
Federal Medical  Examining the  Enough?
Assistance  Costly Failures on 
Percentage ObamaCares CO-OP 
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Administration for Children and Families    .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  29
Child Support Enforcement Activities.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  31
Other HHS-Related Reviews and Investigations .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .33
Other Reporting Requirements and Reviews.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  36
Implementation of Health Insurance Marketplaces .  .  .  .  .  .  .  .  .  .  .  .  .  37
Appendixes .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .41
Appendix A:  Questioned Costs and Funds To Be Put to Better Use  .  .  .  .  41
Appendix B:  Peer Review Results.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  49
Appendix C:  Summary of Sanction Authorities   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  51
Appendix D:   Reporting Requirements in the  
Inspector General Act of 1978 .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  54
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ri contract payments, are not easily accessible through 
oOa program and is responsible for overseeing the  its contract management system.  
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sGi responsible for administering more than one-half   CMS concurred with all of our recommendations to 
d
r of a trillion dollars in benefits each year.  Medicare  implement additional strategies to meet required  
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eO Administrative Contractors (MACs) process Parts A   FAR timeframes for closeout, determine the status  
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n
managed care services under Part C; Part D plans  determined, improve reports from CMSs contract 
 
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& provide prescription drug coverage under Part D; and  management system to allow for easier access to 
C
various benefit integrity contractors serve to protect  contract data that would assist in closeout and funds 
Medicare from fraud, waste, and abuse. management, and improve coordination and 
collaboration across departmental staff with contract 
closeout responsibilities.  
Medicare Payments, Policies, and Practices
OEI-03-12-00680    December 2015
CMS Has Not Performed Required Closeouts of Contracts 
Worth Billions 
Hoveround Corporation Claimed Millions in Federal 
CMS relies extensively on contractors to carry out  
its basic mission and spends billions each year in  Reimbursement for Power Mobility Devices That Did Not 
contracts for a variety of goods and services.    Meet Medicare Requirements 
Our review focused on CMSs Federal Acquisition 
Our objective was to determine whether Hoveround 
Regulation (FAR) contracts that were active as of 
Corporation, which received the second largest 
February 2014, and its FAR contracts pending closeout 
Medicare reimbursement for power mobility devices 
as of February 2014.  We found that CMS had over 
(PMDs) in 2010, claimed Federal reimbursement for 
6,000 contracts with a combined value of $25 billion 
PMDs in accordance with Medicare requirements.  
that were not closed out as required under the FAR.  
Prior OIG reviews found that Medicare reimbursement 
CMS continues to have thousands of contracts overdue 
for PMDs can have high incidences of fraud and 
for closeout, with 15 percent of contracts that were 
improper payments.  For this review, we found that  
HHHHSS  OOIIGG  SSHeeHmmSii aaOnnInnGuu Saaell  mRReeiappnoonrrttu  ttaool   RCCeoopnnoggrrrtee tssoss   C      o    ||n    g      r  eOOsccstt  oo  bb  |ee  rr     11 O,,  22c00to11b55e  r   MM1,aa 2rr0cc1hh5  33 11 ,,M  2200ar11c66h     31, 2016   111 for 154 of the 200 sampled beneficiaries we reviewed,  requirements.  As a result, Medicare overpaid the 
CENTERS FOR  
Hoveround received payments for claims that did   hospitals by $6.3 million.  
MEDICARE &  
not comply with Medicare requirements.  For 144 
MEDICAID   CMS concurred or partially concurred with our 
sampled beneficiaries, Hoveround did not support  
SERVICES recommendations to:  (1) direct Medicare contractors 
the medical necessity of PMDs, and for 10 sampled 
to recover $4.6 million in overpayments for incorrectly 
beneficiaries, Hoveround provided incomplete 
billed claims that are within the 3-year recovery 
documentation to support the PMD claims.  We 
period; (2) work with the Medicare contractors to 
estimated that Medicare paid Hoveround at least  
notify providers of potential overpayments outside of 
$27 million for PMDs that did not meet Medicare 
the 3-year recovery period, which we estimate to be as 
requirements during 2010.
much as $1.7 million; (3) review the 58 inpatient 
Hoveround disagreed with our recommendations that  claims from October 2013 through April 2015 for stem 
it refund $27,027,579 to the Federal Government and  cell transplants with lengths of stays of 1 to 2 days, 
implement internal controls to ensure that Medicare  which could save as much as $2 million; and (4) 
requirements are followed to support beneficiaries  strengthen hospital controls and educate them on the 
medical needs for PMDs and ensure that supporting  appropriate billing of stem cell transplants.
documentation for PMDs meets Medicare requirements 
before providing PMDs to beneficiaries. A-09-14-02037    February 2016
A-05-12-00057    December 2015
Hospices Inappropriately Billed Medicare Over $250 Million 
for General Inpatient Care
Medicare Did Not Pay Selected Inpatient Claims for Bone 
Our review found that hospices billed one-third of 
Marrow and Stem Cell Transplant Procedures in Accordance 
general inpatient care (GIP) stays inappropriately, 
With Medicare Requirements costing Medicare $268 million in 2012.  We also found 
Our objective was to determine whether Medicare  that hospices often did not meet all care planning 
paid selected inpatient claims for stem cell transplants  requirements and sometimes provided poor-quality 
in accordance with Medicare requirements.  Recent  care.  GIP is the second most expensive level of 
OIG reviews identified Medicare overpayments to   hospice care and is intended to be short-term inpatient 
two hospitals that did not always comply with  care for symptom management and pain control that 
Medicare billing requirements for inpatient claims for  cannot be handled in other settings.  Recent OIG 
stem cell transplants, resulting in overpayments of  investigations have shown instances in which hospices 
approximately $4 million.  For this review, we found  inappropriately billed Medicare for GIP, including care 
that 133 of the 143 selected Medicare inpatient claims  being billed but not provided and beneficiaries 
we reviewed for bone marrow and stem cell transplant  receiving care they did not need. 
procedures did not comply with Medicare 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   2 Our findings make clear the need to address the  As stakeholders debate the nature of 340B discounts 
CENTERS FOR  
misuse of GIP and hold hospices accountable when  and whether statutory changes should be made to 
MEDICARE &  
they bill inappropriately or provide poor quality care.   enable Medicare and/or Medicaid to share in these 
MEDICAID  
CMS concurred with all of our recommendations,  savings, this report presents an independent analysis 
SERVICES
which were to increase its oversight of hospice GIP  to inform the ongoing discussion and to support 
claims and review Part D payments for drugs for  congressional and Administration decisionmakers 
hospice beneficiaries; ensure that a physician is  efforts in striking a balance among the needs of these 
involved in the decision to use GIP; conduct  vital programs.  This report contained no 
prepayment reviews for lengthy GIP stays; increase  recommendations.
surveyor efforts to ensure that hospices meet care 
planning requirements; establish additional  OEI-12-14-00030    November 2015
enforcement remedies for poor hospice performance; 
and follow up on inappropriate GIP stays, inappropriate 
Part D payments, and hospices that provided poor- Quality of Care and Beneficiary Access
quality care.
National Background Check Program for Long-Term-Care 
OEI-07-10-00420    January 2016
Employees:  Interim Report
This interim report describes the overall implementation 
Part B Payments for 340B Purchased Drugs  status and States results from the first 4 years of the 
National Background Check Program, and provides 
For this review, we determined how much Medicare 
CMS with information that may assist its ongoing 
Part B spent on 340B-purchased drugs in 2013 by 
administration of this program.  The ACA provides 
identifying paid Medicare claims from covered entities.  
grants to States to implement background check 
Under Medicare Part B, certain eligible health care 
programs for prospective long-term-care employees 
providersgenerally those that serve a 
and also requires OIG to conduct an evaluation of this 
disproportionate share of needy patientsare allowed 
grant program.  We found that, 4 years into the 
to purchase drugs using the 340B Drug Discount 
National Background Check Program, the 25 States 
Program, thereby receiving sizable statutory discounts.  
that are receiving program grants reported having 
Past OIG work has found that Medicare payments to 
achieved varying levels of program implementation.  
providers for 340B-purchased drugs substantially 
For example, only 6 of the 25 States submitted to CMS 
exceeded the providers costs.  In the aggregate, Part B 
data sufficient to calculate the percentage of 
payment amounts for drugs purchased in 2013 using 
prospective employees who were disqualified.  This 
the 340B Drug Discount Program were 58 percent 
raises concerns about whether CMS can determine 
more than the statutorily based 340B ceiling prices, 
program outcomes and conduct effective oversight of 
which allowed 340B covered entities to retain 
the National Background Check Program.  
approximately $1.3 billion.  
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   3 CMS concurred with both of our recommendations to  million to pay for aggregate annual projected costs.  
CENTERS FOR  
continue working with participating States to fully  According to the approved State waivers, these costs 
MEDICARE &  
implement their background check programs and  should have been paid solely with State funds for the 
MEDICAID  
continue working with participating States to improve  first 3 months of each calendar year during FYs 2010 
SERVICES
required reporting to ensure that CMS can conduct  through 2012.  Additionally, Wisconsin lacked formal 
effective oversight of the program. policies and procedures for withdrawing Federal 
Medicaid funds from the Payment Management 
OEI-07-10-00420    January 2016 System (PMS) account.  
Wisconsin disagreed with our recommendations that it 
refund $89.6 million to the Federal Government, establish 
The Medicaid Program 
formal policies and procedures for withdrawing Federal 
funds from PMS for Medicaid, and ensure that all 
Payments, Policies, and Practices Federal withdrawals from PMS that occurred after our 
audit period comply with Federal and State requirements.
To fund their Medicaid programs, States receive Federal 
grant awards that pay for the Federal share of their  A-05-13-00045    October 2015
Medicaid medical and administrative expenditures.   
OIG conducts audits on States withdrawals of  
Federal Medicaid funds to determine whether a   New Mexico Received Millions in Unallowable Bonus Payments 
State submitted an improper claim for Federal 
Congress appropriated $3.225 billion for qualifying 
reimbursement and, therefore, may owe money back  
States to receive performance bonus payments for 
to the Federal Government.  If a State disagrees with 
Federal FYs 2009 through 2013 to offset the costs of 
our recommendation to refund questioned costs 
increased enrollment of children in Medicaid.  We 
identified in an audit, CMS still has the authority to 
reviewed the bonus payments that New Mexico 
recoup those costs.  
received for FYs 2009 through 2013 because 
preliminary analysis indicated inconsistencies between 
Wisconsin Inappropriately Withdrew Federal Medicaid Funds  the enrollment of children in Medicaid that New 
for FYs 2010 Through 2012 Mexico reported when requesting bonus payments 
and the enrollment reflected in the Medicaid Statistical 
Our review of the Wisconsin Department of Health 
Information System, maintained by CMS.  New Mexico 
Services Federal Medicaid withdrawals during FYs 
received more than $23.8 million in bonus payments 
2010 through 2012 determined that these withdrawals 
for the FYs we reviewed.  
did not fully comply with Federal and State regulations.  
Wisconsin properly withdrew $13.6 billion of the $13.7  We found that most of the data used in New Mexicos 
billion obtained in Federal Medicaid funds, but  bonus payment calculations were in accordance with 
inappropriately withdrew the difference of $89.6 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   4 Federal requirements, but New Mexico overstated its  We Could Not Determine Whether West Virginias Severance 
CENTERS FOR  
FYs 2009 through 2013 current enrollment in its bonus  and Business Privilege Tax on Behavioral Health Services Is a 
MEDICARE &  
requests to CMS because it included individuals who 
Permissible Health-Care-Related Tax
MEDICAID  
did not qualify.  As a result, CMS overpaid New Mexico 
SERVICES Our objective was to determine whether West 
$15.9 million in bonus payments.  New Mexico 
Virginias Severance and Business Privilege Tax is a 
disagreed with our recommendation that it refund 
permissible health-care-related tax under Federal 
$15.9 million to the Federal Government.  
requirements.  Revenues from an impermissible 
A-04-15-08040    December 2015 health-care-related tax may not be used to finance a 
States share of Medicaid expenditures.  For this 
review, we could not determine whether West 
New York State Improperly Claimed Medicaid  Virginias Severance and Business Privilege Tax is a 
permissible health-care-related tax.  CMS agreed with 
Reimbursement for Some Adult Day Health Care Services 
our recommendation that it work with West Virginia to 
We reviewed New York State Department of Healths 
determine whether the Severance Tax is a permissible 
claims for Medicaid reimbursement for adult day 
health-care-related tax.  CMS did not concur or 
health care (ADHC) services provided by New York 
nonconcur with our recommendation that it deduct 
providers and found that these providers claimed 
the $65.7 million used to pay State Medicaid 
reimbursement for some Medicaid ADHC services that 
expenditures and recalculate the Federal share, which 
did not comply with certain Federal and State 
we estimate was overpaid by $50.6 million, if the 
requirements.  Of the 100 claims in our random 
severance tax is impermissible.
sample, New York claimed reimbursement for services 
that were unallowable for 40.  New York improperly  CMS made no official decision whether the tax is an 
claimed at least $70 million in Federal Medicaid  impermissible health-care-related tax.  CMS stated 
reimbursement for ADHC services that did not comply  that, should West Virginia enact a tax structure 
with certain Federal and State requirements. consistent with CMSs guidance by June 30, 2016, it 
will not devote further resources to investigate this 
New York disagreed with our recommendation that it 
issue and will not pursue any financial recoveries for 
refund $70 million to the Federal Government.  New 
periods before June 30, 2016.
York did not agree or disagree with our recommendation 
that it improve its monitoring of the ADHC program to  A-03-14-00200    February 2016
ensure that providers comply with Federal and State 
requirements.
A-02-13-01016    December 2015
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   5 Some of New Jerseys Claims for Medicaid Global Options for  Maryland Claimed Unallowable Costs for Medicaid 
CENTERS FOR  
Long-Term Care Waiver Services Were Unallowable  Communicable Disease Care Services 
MEDICARE &  
MEDICAID   Our review of New Jerseys Medicaid reimbursement  Our review of Marylands Department of Health and 
claims for Global Options for Long-Term Care (GO-LTC)  Mental Hygiene found that it did not always comply 
SERVICES
waiver services determined that claims for some of  with Federal and State requirements when it claimed 
these services did not comply with certain Federal and  costs for communicable disease care services.  Of the 
State requirements.  GO-LTC enables Medicaid  124 claim lines that we sampled, 49 complied with 
beneficiaries who are assessed as needing nursing  Federal and State requirements; however, 75 did not.  
facility level of care and who met financial requirements  We estimate that the State claimed at least $16 million 
to remain in the community or return from  (Federal share) in unallowable costs.  The State 
institutional care to the community.  Of the 131  claimed these unallowable costs because it did not 
beneficiary months in our sample, New Jersey  have sufficient internal controls to ensure that nursing 
improperly claimed Medicaid reimbursement for  facilities were correctly claiming communicable 
unallowable GO-LTC waiver services during 62  disease care services.
beneficiary months.  New Jersey made claims for 
The State partially concurred with our findings, which 
unallowable services because it lacked clear guidance 
resulted in our recommendation to refund $16 million 
on claiming and documenting Medicaid services for 
to the Federal Government.
beneficiaries enrolled in the GO-LTC waiver program.  
On the basis of our sample results, we estimated that  A-03-14-00150    March 2016
the State agency improperly claimed at least $47 
million in Federal Medicaid reimbursement for 
unallowable GO-LTC waiver services. State Medicaid Agencies Can Significantly Reduce Medicaid 
Costs for Durable Medical Equipment and Supplies 
New Jersey generally concurred with our 
recommendation that it reinforce guidance to   During recent Medicaid audits, we determined that 
the provider community on Federal and State  selected durable medical equipment and supplies 
requirements for claiming and documenting Medicaid  (DME) are available to CMS at a cost well below what is 
services for beneficiaries.  New Jersey did not concur  available to State Medicaid agencies.  In our audits of 
with our recommendation that it refund $47.3 million  four State Medicaid agencies, we found that the States 
to the Federal Government.  could have saved $18.1 million on the purchase of 
selected DME items if they obtained pricing 
A-02-14-01008    February 2016 comparable to pricing under Round 1 of Medicares 
Competitive Bidding Program.  Since issuing those 
audit reports, we identified $12 million in additional 
savings for the selected DME items if the four States 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   6 had used pricing comparable to Medicares Round 2  with $31.7 million.  Montana, North Dakota, and South 
CENTERS FOR  
Competitive Bidding and National Mail-Order  Dakota did not invoice manufacturers for rebates 
MEDICARE &  
Programs.  Medicaid provider reimbursement rates for  associated with $16,000 in physician-administered 
MEDICAID  
selected DME items varied significantly among those  drugs in Montana, $79,000 in North Dakota, and  
SERVICES
States.  Opportunities exist for these States to lower  $1.2 million in South Dakota.
provider reimbursement rates, resulting in $30.1 
Montana and North Dakota agreed with our 
million in potential savings for the States and the 
recommendations, and California and South Dakota 
Federal Government.  
partially agreed with our recommendations to refund 
CMS concurred with our recommendations that it   the Federal Government the amounts claimed for 
seek legislative authority to limit State Medicaid   physician-administered drugs that were ineligible for 
DME reimbursement rates to Medicare program   Federal reimbursement.  California and North Dakota 
rates and encourage further reduction of Medicaid  agreed and Montana partially agreed, but South 
reimbursement rates through competitive bidding   Dakota did not agree with our recommendations to 
or manufacturer rebates.  work with CMS to determine the unallowable portion 
of other claims for physician-administered drugs that 
A-05-15-00025    October 2015 were ineligible for Federal reimbursement.
California agreed with our recommendation that it 
States Rebates for Some Physician-Administered Drugs improve oversight of the processes for rebate billing 
and collection to ensure submission to manufacturers 
We conducted several reviews to determine whether 
of the drug utilization data for claims for physician-
States are complying with Federal Medicaid requirements 
administered drugs.  Montana and North Dakota 
for billing manufacturers for rebates for physician-
concurred with our recommendations that they strengthen 
administered drugs.  For a covered outpatient drug to 
their internal controls to ensure that all physician-
be eligible for Federal reimbursement under 
administered drugs eligible for rebates are invoiced.
Medicaids drug rebate requirements, manufacturers 
must pay rebates to the States for the drugs.  States  California Claimed Unallowable Federal Medicaid 
generally offset the Federal share of these rebates  Reimbursement by Not Billing Manufacturers for  
against their expenditures and bill the manufacturers 
Rebates for Some Physician-Administered Drugs 
for rebates to reduce the cost of drugs to the program.  
However, previous OIG reviews found that States did  A-09-14-02038    January 2016
not always bill and collect all rebates due for drugs  Also the following:
administered by physicians.
Montana Correctly Claimed Federal Reimbursement  
We found that California did not bill for rebates for  for Most Medicaid Physician-Administered Drugs
claims for physician-administered drugs associated  A-07-15-06062    January 2016
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   7 South Dakota Claimed Unallowable Federal Reimbursement  or nonconcur with our recommendation that it 
CENTERS FOR  
for Some Medicaid Physician-Administered Drugs  incorporate MLR standards into its contracts with 
MEDICARE &  
Medicaid managed care organizations. 
MEDICAID   A-07-15-06059    February 2016
SERVICES North Dakota Correctly Claimed Federal Reimbursement   A-02-13-01036    October 2015
for Most Medicaid Physician-Administered Drugs 
A-07-15-06058    January 2016
Average Manufacturer Prices Increased Faster  
Than Inflation for Many Generic Drugs 
The Medicaid Program Could Have Achieved Savings If   OIG was requested by Congress to examine recent 
increases in the prices charged for generic drugs and 
New York Applied Medical Loss Ratio Standards Similar  
the effect these prices have had on generic drug 
to Those Established by the Affordable Care Act 
spending in the Medicare and Medicaid programs.  For 
The objective of this review was to determine potential  this review, we updated a previous review of generic 
Medicaid program savings if the New York State  drug price increases under the Medicaid drug rebate 
Department of Health required its Medicaid-managed  program and found that generic drug price increases 
care plans to meet medical loss ratio (MLR) standards  exceeded the specified statutory inflation factor 
similar to those established by the ACA.  The ACA set   applicable to brand-name drugs for 22 percent of the 
a standard for the amount of premium revenue that  quarterly average manufacturer prices we reviewed.   
certain commercial health insurers and Medicare  If the provision for brand-name drugs were extended 
Advantage plans can spend on costs other than   to generic drugs, Medicaid would receive additional 
health care-related expenses, which is known as the  rebates.  Medicaid would have received $1.4 billion  
MLR.  Insurers that do not meet these standards must  in additional rebates for the top 200 generic drugs, 
pay rebates.  Some States have applied similar standards  ranked by Medicaid reimbursement, from 2005 
to their contracts with Medicaid managed care  through 2014.  
organizations.  
Our findings are consistent with our previous work and 
While New York had policies limiting the amount plans  support our prior recommendation that CMS consider 
could charge for administrative costs as a component  seeking legislative authority to extend the additional 
of their capitated rate, we determined that Medicaid  rebate provisions to generic drugs.  On November 2, 
could have saved $76.9 million ($38.5 million Federal  2015, the Bipartisan Budget Act of 2015 (P.L. No. 
share) in CY 2012 if New York had required its Medicaid  114-74) was enacted and included provisions extending 
managed care plans to meet MLR standards similar to  the additional rebate to generic drugs.  The additional 
those established by the ACA.  New York did not concur  rebate for generic drugs will apply to rebate periods 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   8 beginning with the first quarter of 2017.  Therefore, we  Quality of Care and Beneficiary Access
CENTERS FOR  
are not making any additional recommendations.
MEDICARE &  
Review of Intermediate Care Facilities in New York With High 
MEDICAID   A-06-15-00030    December 2015
Rates of Emergency Room Visits by Intellectually Disabled 
SERVICES
Medicaid Beneficiaries 
Opportunities for Program Improvements Related to   In response to a congressional request, our objective 
was to determine whether Intermediate Care Facilities 
States Withdrawals of Federal Medicaid Funds 
(ICFs) in New York with high rates of emergency room 
CMS has not issued guidance instructing States on the 
visits by intellectually disabled Medicaid beneficiaries 
appropriate handling of Medicaid withdrawals.  All 
under their care reported on these visits, as required, 
three States that we audited withdrew more funds 
and whether potential neglect or abuse was reported 
than necessary to meet immediate cash needs:  Alabama 
and investigated by the appropriate State agencies.  
and Maryland had overdrawn more than $130 million 
We found that ICFs in New York with high rates of 
in Medicaid funds that they had not refunded to the 
emergency room visits by intellectually disabled 
Federal Government.  Although Illinois refunded 
Medicaid beneficiaries under their care did report on 
overdrawn Medicaid funds, its withdrawals exceeded 
these visits, as required, and potential neglect or abuse 
its expenditures by an average of $60 million a quarter.
was reported and investigated.  We also found that the 
vast majority of emergency room visits we reviewed 
CMS concurred with our recommendations that it 
resulted from circumstances associated with the 
issue guidance that clarifies and further interprets 
Medicaid beneficiaries underlying medical 
existing requirements concerning the withdrawal of 
conditionsnot from neglect or abuse.  Accordingly, 
Medicaid funds and publish and enforce formal 
this report contained no recommendations.
guidance so that States are aware of the appropriate 
account from which to withdraw or return funds.
A-02-14-01011    October 2015
CMS did not indicate concurrence or nonconcurrence 
with our recommendations that it publish regulations 
that are consistent with the Treasury provisions and 
educate States and require States to reconcile total 
Federal Medicaid funds withdrawn with the Federal 
share of net expenditures and issue appropriate 
reconciliation guidelines. 
A-06-14-00068    March 2016
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   9 Most Children with Medicaid in Four States Are Not Receiving    Ensure that States pay for services in accordance 
CENTERS FOR  
Required Dental Services with their periodicity schedules.
MEDICARE &  
MEDICAID   Our objective was to determine whether Medicaid  CMS did not concur with the remaining recommendation 
children in California, Indiana, Louisiana, and Maryland  to work with States to track childrens use of required 
SERVICES
were receiving required dental services.  We found  dental services.
that three out of four Medicaid children in these States 
OEI-02-14-00490    January 2016
did not receive all required dental services, with one in 
four children failing to see a dentist at all.  While the 
States reported that they employ a variety of strategies 
to address this problem and CMS has taken some  Health Information Technology
positive steps in this area, we continue to have 
concerns that children are not receiving required  Inadequate Security Management Practices Left Utah 
dental services.   Department of Health Sensitive Medicaid Data at Risk of 
Unauthorized Disclosure 
CMS fully or partially concurred with the following 
recommendations:  Our reviews of the Utah Department of Healths 
information system general controls found that Utah 
  Develop a comprehensive plan to increase the 
had not established an effective enterprise security 
number of children who receive required services.
control structure to ensure that adequate information 
  Develop benchmarks for dental services and  system general controls were implemented in 
require States to create mandatory action plans  conformance with Federal requirements over the 
to meet them. systems used to support Utah Medicaid eligibility 
determination and claims processing.  These inadequate 
  Work with States to identify areas with limited 
security management practices put Medicaid systems 
providers and the barriers preventing providers 
and data at risk.  State agencies must establish 
from participating in Medicaid.
appropriate computer system security requirements 
  Work with States to analyze the effects of 
and conduct biennial reviews of computer system 
Medicaid payments on access to dental providers.
security used in the administration of State plans for 
  Work with States to educate families about the  Medicaid and other Federal entitlement benefits.  
importance of dental care and to encourage  Utah previously experienced two serious security 
ongoing relationships between children and   breaches in its State Medicaid program.
their dentists.
We identified 39 high-impact, reportable weaknesses 
  Identify and share effective strategies with States. 
during our earlier comprehensive information system 
general controls audit of the systems used to support 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   10 Utah Medicaid eligibility determination and claims  be similarly vulnerable.  This report is intended to 
CENTERS FOR  
processing.  Utah concurred with our recommendations  provide information to assist California and CMS in 
MEDICARE &  
that it implement effective security management  strengthening MCOs system security.
MEDICAID  
practices and establish oversight procedures to ensure 
SERVICES that adequate information system general controls are  A-09-15-03004    December 2015
implemented that correct the security weaknesses 
identified and comply with Federal information system 
security requirements.
A-07-15-00455    January 2016
High-Risk Security Vulnerabilities Identified During Reviews 
of Information System General Controls at Three California 
Managed-Care Organizations Raise Concerns About the 
Integrity of Systems Used To Process Medicaid Claims 
We summarized the high-risk security vulnerabilities 
that we identified in our previous reviews of 
information system general controls at three California 
Medi-Cal managed care organizations (MCOs).   
We identified 74 high-risk security vulnerabilities,  
most of which were significant and pervasive, in the 
information system general controls at the three 
Medi-Cal MCOs we reviewed.  
Our consolidated findings from the individual reports 
raise concerns about the integrity of the systems used 
to process Medicaid managed-care claims.  California 
informed us, in comments on the individual reports, 
that it was addressing these vulnerabilities.  The fact 
that some of the same vulnerabilities were identified 
at all three MCOs suggests that other California 
Medi-Cal managed-care information systems may  
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   11   
sd
ei
a
i OIG Investigations  (IHS), Administration for Children and Families (ACF), 
tc
i Health Resources and Services Administration (HRSA), 
vi
d and Administration for Community Living (ACL).  OIG 
OIG investigates allegations of fraud, waste, and abuse 
i
also investigates potential misuse of grants and 
te in all of the Departments programs.  Our largest body 
c contracts funds awarded by National Institutes of 
M of work involves investigating matters related to the 
A Health (NIH), Centers for Disease Control and 
Medicare and Medicaid programs, such as patient 
  Prevention (CDC), Substance Abuse and Mental Health 
 d harm; billing for services not rendered, medically 
e Services Administration (SAMHSA), and other HHS 
n unnecessary services, or upcoded services; illegal 
v agencies.  Under certain circumstances, OIG 
billing, sale, diversion, and off-label marketing of 
ia investigates noncustodial parents who fail to pay 
t prescription drugs; and solicitation and receipt of 
 
ae kickbacks, including illegal payments to patients for  court-ordered child support.  Additionally, OIG 
gr involvement in fraud schemes and illegal referral  investigates allegations of employee misconduct, 
ia whistleblower reprisals, and wrongdoing by HHS 
arrangements between physicians and medical 
t
c agency officials.
s companies.
ei
d One of the most common types of fraud perpetrated 
v Specific case types include fraud schemes related to:
e against Medicare, Medicaid, and other Federal health 
n   controlled and noncontrolled prescription drugs,
M care programs involves filing false claims for 
I
  home health agencies and personal care services, reimbursement.  False claims may be pursued under 
 
d  Federal and State criminal statutes and, when 
o   ambulance transportation, 
n appropriate, under the False Claims Act (FCA).  
t
  DME, and
a  Depending on the types of fraud or other violations 
d
    diagnostic radiology and laboratory testing.   involved, OIG investigations may culminate in criminal 
le or civil court judgments and decisions, administrative 
a
t OIG also conducts investigations involving organized  sanctions and decisions, and/or negotiated settlement 
ga
criminal activity, including medical identity theft and 
agreements.  Investigative outcomes take many forms, 
el
fraudulent medical schemes established for the sole 
e including incarceration, restitution, fines, penalties, 
L
purpose of stealing Medicare dollars.  Investigators are 
R forfeitures, assessments, and exclusion of individuals 
seeing an increase in individuals, including both health 
or entities from participation in all Federal health care 
care providers and patients, engaging in these health 
programs.  Frequently used exclusion and penalty 
care fraud schemes.  Those who participate in these 
authorities are described in Appendix C of this 
schemes may face heavy fines, jail time, and exclusion 
Semiannual Report to Congress and on our website  
from participating in Federal health care programs. 
at:  http://oig.hhs.gov/fraud/enforcement/cmp/.
In addition to investigating Medicare and Medicaid 
For October 1, 2015, to March 31, 2016, we reported 
fraud, OIG investigates fraud, waste, and abuse in 
384 criminal and 379 civil actions against individuals or 
other HHS programs, including Indian Health Service 
entities that engaged in health-care-related offenses.  
HHHHSS  OOIIGG  SSeemmiiaannnnuuaall  RReeppoorrtt  ttoo  CCoonnggrreessss            ||            OOccttoobbeerr  11,,  22001155    MMaarrcchh  3311,,  22001166     1122 LEGAL AND  
INVESTIGATIVE  
We also reported over $1.86 billion in investigative  of Kentwood Pharmacys vice president of sales, Richard 
ACTIVITIES  
receivables due to HHS and over $332.6 million in  Clarke.  Clarke was convicted of child pornography as 
RELATED TO  
non-HHS investigative receivables, including civil and  well as health care fraud and sentenced to 14 years in 
MEDICARE AND  
administrative settlements or civil judgments related to  prison and ordered to pay $8.8 million in restitution, 
MEDICAID
Medicare, Medicaid, and other Federal, State, and  joint and several.  Sixteen defendants involved in the 
private health care programs.  scheme were previously sentenced to a combined 22 
years in prison and were excluded from participation in 
For all OIG investigations, the charges contained in an 
Federal health care programs for a combined 145 
indictment or other charging document are merely 
years.  This case was initiated based upon fraud tips 
accusations and a defendant is presumed innocent 
provided to the HHS OIG Hotline.  
unless and until proven guilty.
Prescription Drug Fraud
The following are recently completed actions 
California  Dr. Kenneth Johnson was sentenced to 9 
and settlements organized by allegation or 
years in prison and ordered to pay $9.1 million in 
subject type:
restitution, joint and several, for his guilty plea to 
Patient Harm conspiracy to commit health care fraud, conspiracy to 
Michigan  Kim Duron Mulder, CEO of Kentwood  possess at least five identification documents and 
Pharmacy, was sentenced to 10 years in prison,  authentication features with intent to use unlawfully, 
ordered to pay $8.8 million in restitution, joint and  aggravated identity theft, and conspiracy to engage in 
several, and banned from participation in Federal  the misbranding of pharmaceutical drugs.  According 
health care programs for 50 years for his guilty plea to  to the investigation, Johnson was involved in a scheme 
conspiracy to commit health care fraud.  According to  in which fraudulently prescribed expensive anti-
the investigation, Kentwood Pharmacy billed Medicare  psychotic medications were repeatedly rebilled to the 
and private health insurers for prescription drugs that  Government.  Using prescriptions that were presigned 
had been dispensed to patients and subsequently  by Johnson, co-defendants generated thousands of 
inappropriately returned to pharmacy stock.  These  prescriptions for identify theft victims, such as elderly 
fraudulent actions resulted in the cross-contamination  beneficiaries of Medicare and Medi-Cal and military 
of drugs, improper labeling of drugs, the placement of  veterans, and doctored patient files to make it falsely 
different drug dosages into stock bottles, and the  appear that the drugs were necessary and the patients 
placement of the wrong drugs into stock bottles.  Public  were legitimately treated.  The scheme generated 
and private insurers paid more than $79 million for  fraudulent billings of more than $20 million, of which 
adulterated and misbranded drugs that were sent to  Medi-Cal and Medicare actually paid more than $9 
patients at more than 800 nursing and adult foster  million.  Fifteen defendants involved in the scheme 
care homes.  During the course of the investigation,  were previously sentenced to a combined 46 years and 
pornographic images were discovered on the computer  3 months in prison.
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   13 LEGAL AND  
INVESTIGATIVE  
Kickbacks the items and/or services were ordered, and mailed 
ACTIVITIES  
pharmaceuticals to beneficiaries in States in which 
RELATED TO   New Jersey  Olympus Corporation of the Americas 
Med Match failed to have a license to dispense.   
MEDICARE AND   (Olympus) agreed to enter into a $310 million civil 
MEDICAID False Claims Act settlement with the United States and 
a comprehensive 5-year Corporate Integrity  Identity Theft
Agreement (CIA).  The settlement was part of a global 
Ohio  Sharon Ward was sentenced to more than  
criminal and civil resolution under which Olympus 
5 years in prison and ordered to pay $18.1 million in 
agreed to pay a total of $646 million to resolve 
restitution for her guilty plea to health care fraud and 
kickback allegations.  Olympus is the countrys largest 
aggravated identity theft.  Ward was a registered nurse 
distributor of endoscopes and related medical 
who was excluded in April 2005 after being convicted 
equipment.  Through the civil settlement agreement, 
of Medicaid fraud.  She also let her nursing license 
Olympus resolved allegations that, between January 
lapse in 2005.  During the entire time she was excluded 
2006 and December 2011, it paid illegal kickbacks to 
and unlicensed, Ward owned Heritage Home Health 
doctors and hospitals to induce them to purchase 
Agency, where she provided nursing services to 
endoscopes and other medical and surgical 
home-bound clients.  Ward used the identity of 
equipment.  These kickbacks came in the form of 
another nurse with the same name to hide the fact 
consulting agreements, foreign travel, lavish meals, 
that she was unlicensed.  Heritage billed Medicaid 
grants, and free endoscopes.  As a result, Olympus 
exclusively and received more than $20 million in 
allegedly caused the submission of false claims to the 
reimbursement.  Sharons mother, Queen Ward, was 
Medicare, Medicaid, and Tricare programs.  The CIA 
part owner and office manager of Heritage.  Queen 
contains several provisions for accountability by 
Ward was ordered to pay $434,747 in restitution for 
Olympus Board of Directors, extensive audit 
her guilty plea to health care fraud.  Queen Ward 
requirements, and requires Olympus to implement an 
created false background check reports for Heritage 
internal risk assessment and mitigation program.    
employees who were disqualified from working as home 
health aides due to their felony criminal convictions.    
Florida  Med Match Pharmacy, LLC agreed to pay 
more than $4.7 million to resolve its liability under the 
False Claims Act.  The settlement agreement resolves  Home Health Services
allegations that, from September 2013 through 
Wisconsin  Deaconess Home Health, Inc., and its 
February 2015, Med Match knowingly submitted 
owner Lazarus Bonilla agreed to pay $3.7 million to 
claims to Federal health care programs for 
resolve their liability for submitting claims to Medicaid 
compounded pharmaceuticals that violated the 
for personal care services that were not provided, 
anti-kickback statute, had items and/or services 
were not provided pursuant to appropriate 
ordered by physicians who failed to have bona fide 
supervision, or were not medically necessary.  The 
medical relationships with the beneficiaries for whom 
agreement also resolves allegations that personal care 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   14 LEGAL AND  
INVESTIGATIVE  
services were referred or ordered in violation of the  and money laundering and is awaiting sentencing.  
ACTIVITIES  
Federal anti-kickback statute.  The investigation found  Eighteen additional defendants have pleaded guilty 
RELATED TO  
that Deaconess paid patient recruiters for referrals of  and are awaiting sentencing in connection with the 
MEDICARE AND  
patients for personal care services.  OIG negotiated a  bribery scheme, which investigators believe involved 
MEDICAID
15-year voluntary exclusion of both Deaconess and  millions of dollars in bribes and resulted in more than 
Lazarus Bonilla. $100 million in payments to BLS from Medicare and 
private insurance companies.  Twenty defendants were 
Michigan  Jaweed Mohammed, manager at Advance 
previously sentenced to a combined 41 years in prison 
Home Health Care (Advance), was sentenced to 2 
and ordered to pay $487,250 in fines and $510,695 in 
years in prison and ordered to pay $1.4 million in 
forfeiture.  To date, OIG has excluded 15 subjects 
restitution, joint and several, for his guilty plea to 
associated with this investigation for a combined total 
health care fraud conspiracy.  Advance, which 
of 111 years.
purported to provide home health care services, paid 
marketers to recruit Medicare beneficiaries, who were 
Personal Care Services 
then paid if they agreed to sign up for home health 
services.  Mohammed and his co-conspirators at  Iowa  Teri Lynn Markle was ordered to pay restitution 
Advance submitted fraudulent claims to Medicare and  of $8,327 for her guilty plea to tampering with records.  
concealed the submission of the claims by creating  Markle was also excluded from participation in Federal 
fake patient files.  Mohammed also helped sell  health care programs.  According to the investigation, 
Advance patient information to other home health  Markle billed Medicaid for personal care services that 
care companies once Advance was finished billing the  she did not actually perform.  In most instances, it was 
patient to Medicare.  Seven defendants involved in the  determined that Markle was working for her outside, 
scheme were previously sentenced to a combined 25  full-time employer while also billing for personal care 
years and 4 months in prison and ordered to pay a  services that she did not provide.  
total of $13.6 million in restitution.
Pharmacies
Physicians
New Jersey  Vladimir Kleyman, the owner and 
New Jersey  Brett Halper was sentenced to 3 years  pharmacist-in-charge of Prescriptions R Us, was 
and 10 months in prison, fined $100,000, and ordered  sentenced to 1 year and 8 months in prison and 
to forfeit $325,000 for his guilty plea to accepting  ordered to pay $476,713 in restitution for his guilty 
bribes.  Halper accepted approximately $6,000 in  plea to conspiracy to pay kickbacks and to commit 
bribes per month from Biodiagnostic Laboratory  health care fraud.  Kleyman was also excluded from 
Services (BLS) in return for referring patient blood  participation in Federal health care programs for 13 
specimens to BLS.  David Nicoll, an owner of BLS,  years.  According to court documents, Kleyman 
pleaded guilty in 2013 to conspiracy to commit bribery  admitted that he paid kickbacks to a physician in return 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   15 LEGAL AND  
INVESTIGATIVE  
ACTIVITIES   for that physicians referral of Medicare and Medicaid  Psychiatric and Psychological Services
patients to Prescriptions R Us for a medically 
RELATED TO   Florida  Dean Augustine Butler, owner, director, and 
unnecessary compounded pain cream.  The physician, 
MEDICARE AND   administrator of Greater Miami Behavioral Healthcare 
James Morales, was paid a kickback for each referral.  
MEDICAID Center (GMBC), was sentenced to 16 years in prison 
Kleyman also admitted that he falsely represented the 
and ordered to pay more than $15.2 million in restitution 
pain cream in order to obtain payment from the 
after pleading guilty to conspiracy to commit health 
insurance carriers as well as making false and 
care and wire fraud.  Butler and another defendant 
misleading representations about the quantity of the 
devised a scheme to pay kickbacks and bribes to 
pain cream that he dispensed and the frequency with 
patient brokers in return for referring Medicare 
which he dispensed it.  Morales pleaded guilty to 
beneficiaries and falsifying medical records to support 
conspiracy to accept kickbacks and commit health care 
claims for services that were never provided.  Irina 
fraud and is awaiting sentencing.
Mora, director of finance for GMBC, was sentenced to 
8 years and 1 month in prison after pleading guilty to 
Hospitals conspiracy to commit money laundering.  Mora and 
other defendants devised a scheme to conduct 
South Carolina  Tuomey d/b/a Tuomey Regional 
financial transactions in order to conceal the payment 
Medical Center and Tuomey Healthcare System 
of kickbacks to patient brokers.  Two other defendants 
(Tuomey) agreed to pay more than $72 million and 
involved in the scheme were previously sentenced to a 
enter into a 5-year CIA with OIG to resolve its liability 
combined 6 years and 4 months in prison and ordered 
under the False Claims Act.  Tuomey is a 301-bed, 
to pay $848,106 in restitution.
nonprofit hospital located in Sumter, South Carolina.  
The Government alleged that Tuomey, fearing that it 
could lose lucrative outpatient procedure referrals to a  Laboratories
new, freestanding surgery center, entered into 
Massachusetts  Millennium Health, LLC (Millennium), 
contracts with 19 specialist physicians that ran afoul of 
agreed to pay $256 million and enter into a CIA with 
the physician self-referral law, or Stark law.  Specifically, 
OIG to resolve its liability under the False Claims Act.  
the Government contended that Tuomey required the 
The Government alleged that Millennium billed 
physicians to refer their outpatient procedures to 
Medicare, Medicaid, and other Federal health care 
Tuomey and, in exchange, paid them compensation 
programs for medically unnecessary drug testing and 
that far exceeded fair market value and took into 
genetic testing, and provided kickbacks to physicians to 
account the volume or value of their referrals to the 
induce business.  Specifically, Millennium allegedly 
hospital.  The CIA includes, among other things, 
caused physicians to order excessive numbers of urine 
provisions requiring Tuomey to retain a Legal 
drug tests, in part through the promotion of custom 
Independent Review Organization to review the 
profiles.  These custom profiles were not customized 
hospitals arrangements with physicians and other 
for individual patients, however.  Instead, they were 
referral sources.  
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   16 LEGAL AND  
INVESTIGATIVE  
practice-wide standing orders that caused physicians  kickbacks to the hospice medical director for him to 
ACTIVITIES  
to order a large number of tests without an  sign hospice orders for patients that he knew were not 
RELATED TO  
individualized assessment of each patients needs.  The  hospice appropriate.  Lara Thompson, a billing clerk at 
MEDICARE AND  
CIA made significant changes to its board of directors,  Sandanna and Milestone, was recently sentenced to 1 
MEDICAID
including choosing new, independent members.   year and 1 month of incarceration and ordered to pay 
Under the 5-year CIA, OIG will monitor the companys  more than $1 million in restitution, joint and several, 
compliance efforts under this new leadership. after pleading guilty to conspiracy to commit health 
care fraud.  This case was initiated based on fraud tips 
provided to the HHS OIG Hotline.
Durable Medical Equipment
North Carolina  Ramon Fuerlos was sentenced to  
Refugee Resettlement Program
3 years and 6 months in prison and ordered to pay 
$2.6 million in restitution for his guilty plea to health  Florida  Leslie Rubero Padilla was sentenced to 1 year 
care fraud.  According to court documents, Fuerlos  and 6 months in prison and ordered to pay $11,100 in 
submitted false claims to Medicare for reimbursement  restitution for her guilty plea to wire fraud.  Padilla 
of DME items that were allegedly provided to  worked as a case manager at a nonprofit social 
beneficiaries.  As part of the scheme, Fuerlos set up  services agency that provides temporary shelter to 
sham DME companies and purchased lists of  Unaccompanied Children (UAC).  The defendant 
individually identifiable health information.  He used  defrauded more than 10 family members and/or 
this information to submit false claims without the  potential sponsors of UAC who were within the 
beneficiarys knowledge.  Through this scheme, Fuerlos  custody of the Office of Refugee Resettlement.  Padilla 
submitted more than $7 million in false claims for  was assigned to take care of UAC and attempt to locate 
reimbursement from Medicare. their parents or other legal guardians.  As part of her 
duties, once a parent or guardian was located, Padilla 
made contact with them.  She falsely represented to 
Hospice Care
parents and legal guardians of the UAC that if they did 
Mississippi  Sandra Livingston, owner of Sandanna 
not send her the requested amount of money it might 
Hospice, Inc., Milestone Hospice, Inc., and Carols 
take longer to be reunited with their children or their 
Hospice & Palliative Services of Shelby, Mississippi, 
children might be deported to their native countries. 
Inc., was sentenced to 3 years in prison and ordered to 
pay $1,098,639 in restitution for her guilty plea to 
Transportation Services Fraud
conspiracy to commit health care fraud.  Livingston 
admitted to her involvement in a conspiracy to bill  Pennsylvania  Serge Sivchuk, owner of Advantage 
Medicare and Medicaid for hospice services for  Medical Transport Inc. (Advantage), was sentenced to 
patients who were not terminally ill.  Livingston paid  2 years in prison and ordered to pay a $300,000 fine 
recruiters upwards of $800 per patient and paid cash  and $194,378 in restitution, joint and several with 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   17 LEGAL AND  
INVESTIGATIVE  
ACTIVITIES   Advantage, for his guilty plea to false statements in  Health Care Fraud Prevention  
health care matters.  Advantage was also ordered to 
RELATED TO  
and Enforcement
pay a $250,000 fine.  According to court documents, 
MEDICARE AND  
employees at Advantage submitted fraudulent claims 
MEDICAID
to Medicare for the transport of beneficiaries to and  On May 20, 2009, former HHS Secretary Kathleen 
from dialysis treatment centers.  Sivchuk directed  Sebelius and former Attorney General Eric Holder 
Advantages EMTs to complete their trip sheets in a  announced the creation of the Health Care Fraud 
manner that concealed the fact that the patients were  Prevention and Enforcement Action Team (HEAT), an 
ambulatory and not eligible for Medicare paid  interagency effort focused specifically on combating 
ambulance transport.   health care fraud.  HEAT includes senior officials from 
DOJ and HHS who are strengthening programs and 
California  Three executives at ProMed Medical 
investing in new resources and technologies to prevent 
Transportation (ProMed) each pleaded guilty to 
and combat fraud, waste, and abuse.
conspiracy to commit health care fraud and health 
care fraud.  They were sentenced to a combined 14 
years of prison and ordered to pay restitution of  HEAT Provider Compliance Training 
$804,755, joint and several.  ProMed provided non-
emergency services to Medicare beneficiaries, many of  OIG provides free training on our website for health 
whom were dialysis patients.  The defendants  Steven  care providers, compliance professionals, and 
Proshak, the owner, operator, and manager of ProMed;  attorneys.  OIGs Provider Compliance Training was an 
Emilia Zverev, the billing manager for ProMed; and  initiative developed as part of HEAT in 2011 that 
Michelle Wallace, the EMT supervisor for ProMed   continues to reach the health care community with 
conspired to bill Medicare for ambulance transportation  OIGs message of compliance and prevention via free, 
services for individuals who did not need such services.   downloadable, comprehensive training materials and 
The defendants also instructed ProMed EMTs to  podcasts.  OIGs provider compliance training 
conceal the patients true medical conditions by  resources can be accessed at:  http://oig.hhs.gov/
altering paperwork and creating fraudulent documents  compliance/provider-compliance-training/index.asp.  
to justify the services.  During the course of the 
conspiracy, ProMed submitted at least $1.5 million in 
false claims to Medicare for medically unnecessary  Health Care Fraud Strike Force Activities 
transportation services.  This case was initiated based 
Health Care Fraud Strike Force teams began in 2007 in 
on fraud tips provided to the HHS OIG Hotline.
an effort to combine the resources of Federal, State, 
and local law enforcement entities to prevent and 
combat health care fraud, waste, and abuse.  These 
partnerships between OIG and HHS, DOJ, U.S. 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   18 LEGAL AND  
INVESTIGATIVE  
ACTIVITIES   Attorneys Offices, FBI, and State and local law  Florida  Nine defendants were sentenced to more 
enforcement have a common goal:  to successfully  than 29 years in prison and ordered to pay a combined 
RELATED TO  
analyze health care fraud data and investigative  $22.1 million in restitution for their roles in a scheme 
MEDICARE AND  
intelligence to quickly identify fraud and bring  to defraud Medicare.  According to court records, five 
MEDICAID
prosecutions.  Strike Force teams currently operate in  of the defendants were the owners of eight 
nine areas:  Miami, Florida; Los Angeles, California;  pharmacies that submitted more than $20 million in 
Detroit, Michigan; Houston, Texas; Brooklyn, New York;  fraudulent claims to Medicare.  The false claims 
southern Louisiana; Tampa, Florida; Chicago, Illinois;  included prescriptions for drugs that were not properly 
and Dallas, Texas.   prescribed or provided to the beneficiaries.  The other 
defendants were involved in schemes in which millions 
From October 1, 2015, to March 31, 2016, Strike Force 
of dollars in fraudulent claims were submitted to 
efforts resulted in the filing of charges against 87 
Medicare.  These conspiracies were accomplished in 
individuals or entities, 100 criminal actions, and over 
part by the use of patient recruiters who received 
$116.8 million in investigative receivables.
kickbacks in return for referring Medicare Part D 
beneficiaries to the pharmacies.
Below are examples of Strike Force cases:
New York  Office managers Michelle Lee, Gilbert Kim, 
Michigan  Amer Ehsan, the owner of Advance Home  and Elaine Kim each pleaded guilty to health care fraud 
Health Care Services, Inc. (Advance), was sentenced to 
conspiracy and were ordered to pay restitution of $5.9 
6 years and 8 months in prison and ordered to pay 
million, joint and several.  Michelle Lee was also 
$4.5 million in restitution for his guilty plea to health 
excluded from participation in Federal health care 
care fraud conspiracy.  Ehsan admitted that he billed 
programs for 15 years, and Elaine Kim was sentenced 
Medicare for unnecessary home health care and 
to 1 year and 1 day in prison.  The defendants 
therapy services, paid physicians to refer Medicare 
artificially increased demand for medical services by 
beneficiaries to Advance and sign medical documents 
providing beneficiaries with free goods and services 
falsely certifying that they required home health care, 
and submitting false claims to Medicare for medically 
and paid Medicare beneficiaries cash kickbacks in 
unnecessary services.  Investigators believe the 
exchange for signing multiple blank physical therapy 
defendants agreed to pay kickbacks for referring 
records.  Additionally, Ehsan admitted that he owned 
beneficiaries for the purpose of billing Medicare.  
Michigan Rehab and Management Services LLC, which 
Upon receipt of payment for the false and fraudulent 
he used to sell information about Medicare 
claims, the defendants paid a predetermined 
beneficiaries and corresponding fictitious patient files 
percentage of the money from Medicare to Elaine and 
to other home health care agencies.  Ehsan was part of 
Gilbert Kim, among others.  The defendants created 
a wide-ranging scheme that involved 12 defendants, all 
fake medical documents to conceal fraudulent claims 
of whom have pleaded guilty.
submitted to Medicare that were induced by kickback, 
not medically necessary, and not provided.  
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   19 LEGAL AND  
INVESTIGATIVE  
ACTIVITIES   Other Criminal and Civil   pharmacies across the country, causing approximately 
1,830 in claims to be submitted to Medicare for 
RELATED TO  
Enforcement Activities 
unnecessary medical care.      
MEDICARE AND  
MEDICAID
Special Assistant U.S. Attorney Program 
Most Wanted Fugitives Listed on OIGs Website 
During this reporting period, DOJ and OIG continued 
The OIG Most Wanted Fugitives website continues to 
their participation in a program in which OIG attorneys, 
garner national and international attention and has 
some of whom are Special Agents, serve as Special 
greatly assisted in helping to capture fugitives charged 
Assistant U.S. Attorneys.  These OIG attorneys are 
with defrauding Federal health care programs and 
detailed full time to DOJs Criminal Division, Fraud 
stealing millions of taxpayer dollars.  The Most Wanted 
Section, for temporary assignments, including 
Fugitives website is continually updated and features a 
assignments to the Health Care Fraud Strike Force.  
profile for each fugitive as well as an online tip form 
Other attorneys prosecute matters on a case-by-case 
and a hotline number for individuals to report fugitive-
basis.  Both arrangements offer excellent litigation 
related information to OIG, in English or Spanish, 24 
training for OIG attorneys and enhance collaboration 
hours a day, 365 days a year.  The Most Wanted 
between the Departments in their efforts to fight 
Fugitives list can be accessed at https://oig.hhs.gov/
fraud.  Under this program, OIG attorneys have 
fraud/fugitives.  During this reporting period, four 
successfully litigated important criminal cases relating 
fugitives were captured.  
to the fraudulent billing of medical equipment and 
supplies, infusion therapy, and physical therapy, as well 
One of OIGs Most Wanted Fugitives is Sandy De La Fe, 
as other types of Medicare and Medicaid fraud.  
who was captured during this reporting period.  De La 
Fe was indicted in July 2013 on charges of health care 
Below is a related case example: fraud.  Investigators believe that De La Fe participated 
in a prescription drug fraud scheme that bilked 
North Dakota  Lowie Christie, a Medicare beneficiary, 
Medicare out of millions of dollars.  De La Fe was the 
was ordered to pay $107,497 in restitution for her 
owner of record for Goldenway Pharmacy Discount, 
guilty plea to health care fraud.  Christie admitted that, 
Inc., located in Miami, Florida.  According to the 
from January 2007 through July 2013, she traveled 
indictment, De La Fes co-conspirators paid Medicare 
around the United States to emergency rooms and 
beneficiaries to obtain prescriptions for pharmaceutical 
other medical providers in order to obtain prescriptions 
drugs.  These false prescriptions, some of which were 
for narcotics that she did not have a medical necessity 
worth more than $1,000 per prescription, were then 
for, and she used her Medicare benefits to pay for 
billed by Goldenway to Medicare Part D, falsely 
them.  Christie, or other individuals, would then fill the 
claiming that these drugs were medically necessary, 
prescriptions.  In order to avoid detection, Christie 
had been prescribed by a doctor, and had been 
travelled to hundreds of different providers and 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   20 LEGAL AND  
INVESTIGATIVE  
provided by Goldenway to Medicare beneficiaries.  As  vulnerable citizens, such as the elderly and others who 
ACTIVITIES  
a result of these false claims, Medicare paid Goldenway  are often unable to help themselves.  
RELATED TO  
approximately $2.8 million in reimbursement.  De La Fe 
MEDICARE AND  
and his co-conspirators diverted the proceeds from 
MEDICAID OIG Hotline Activity (10/01/15-03/31/16):
this scheme for their own use and to further the fraud.  
De La Fe fled to Cuba and remained a fugitive at large    Total HHS TIPS Received via Phone- 
until his arrest.  He is currently in custody and will face  Evaluated for Action: 59,191
charges stemming from his indictment. 
  Total HHS TIPS Received via Phone-Referred: 11,456
Because of the success of OIGs Most Wanted Fugitives    Total HHS TIPS Received via Internet: 4,905
website, OIG launched its Most Wanted Deadbeat 
  Total HHS TIPS Received via Letters/Faxes: 2,021
Parents website at https://oig.hhs.gov/fraud/child-
support-enforcement/index.asp.  The site identifies    Total Viable HHS TIPS Evaluated: 15,859
parents who fail to pay court-ordered child support for 
  Total Contacts to the HHS OIG Hotline Calls: 75,050
their children; as a result, an unnecessary strain is 
placed on the custodial parents and the children as 
State Medicaid Fraud Control Units 
well as on agencies that enforce these matters.  
Examples are provided in the Human Services Agencies 
OIG Oversight of State Medicaid Fraud Control Units
Reviews section of this Semiannual Report.  
Medicaid Fraud Control Units (MFCUs or Units) are key 
partners with OIG in the fight against fraud,  
HHS OIG Hotline waste, and abuse in State Medicaid programs.   
OIG has oversight responsibility for MFCUs and 
The mission of the HHS OIG Hotline is to support OIG 
administers grants that provide Federal funding for 
in oversight responsibilities to safeguard the integrity 
Unit operations.  The Federal Government reimburses  
of all programs and personnel under purview of HHS 
75 percent of the costs of operating a Unit; the  
and protect them from fraud, waste and abuse.  We 
States contribute the remaining 25 percent.  MFCUs 
achieve this through our dedication to timely intake 
investigate and prosecute Medicaid provider fraud and 
and evaluation of information received from various 
patient abuse and neglect in health care facilities or 
sources, such as the Report Fraud website portal on 
board and care facilities.  
the HHS OIG Internet page and telephone calls to 
1-800-HHS-TIPS.  Strategically located within the Office 
MFCU Funding and Accomplishments in FY 2015 
of Investigations, the OIG Hotline is the public facing 
division for the intake of fraud tips.  The OIG Hotline is  In FY 2015, combined Federal and State expenditures 
motivated by the constant awareness that our work  for the operation of the 50 MFCUs (in 49 States and 
impacts all Americans, including some of our most  the District of Columbia) totaled $251 million.  The 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   21 LEGAL AND  
INVESTIGATIVE  
MFCUs employed 1,944 individuals.  Collectively, in FY  Arizona State Medicaid Fraud Control Unit:  
ACTIVITIES  
RELATED TO   2015, MFCUs reported 17,665 investigations, of which  2015 Onsite Review. 
14,441 were related to Medicaid fraud and 3,224 were 
MEDICARE AND  
related to patient abuse and neglect, including  OEI-07-15-00280    2015 December.     
MEDICAID
misappropriation of patients private funds.  The cases 
resulted in criminal charges or indictments involving  The following are case examples of joint 
1,892 individuals, including 1,387 for fraud and 505 for  efforts with MFCUs:
patient abuse and neglect, including patient funds 
Texas  Huey P. Williams, Jr., was sentenced to 5 years 
cases.  In total, 1,553 criminal actions were reported in 
and 3 months in prison and ordered to pay $1.96 
FY 2015, of which 1,097 were related to Medicaid 
million in restitution after a jury found him guilty of 
fraud and 456 were related to patient abuse and 
healthcare fraud.  Williams owned and operated the 
neglect, including patient funds cases.  Civil judgments 
DME companies Hermann Medical Supplies Inc. and 
and settlements for FY 2015 totaled 795, and 
Hermann Medical Supplies II (collectively Hermann 
monetary recoveries in civil cases totaled over  
Medical).  Through these companies, Williams 
$397 million.  (See Medicaid Fraud Control Units 2015 
submitted approximately $3.4 million in fraudulent 
Expenditures and Statistics contained in a MapChart.)
DME claims to Medicare.  Specifically, Williams caused 
Hermann Medical to bill Medicare for components of 
an arthritis kit, which included expensive, rigid braces 
OIG Onsite Reviews of MFCUs  
and orthotics with adjustable joints that required 
In addition to an annual recertification review of each  fitting and adjustment.  However, in actuality, Williams 
MFCU, OIG conducts periodic in-depth reviews of a  never purchased any of the expensive braces and 
sample of Units.  OIG evaluates MFCU operations in  instead purchased and provided to beneficiaries 
accordance with 12 performance standards and  inexpensive, flimsy neoprene braces and equipment, 
assesses compliance with laws, regulations, and OIG  to the extent that he provided any equipment at all.  
policy guidance.  OIG issued reports of onsite reviews  Medicare paid Hermann Medical $1.96 million on 
of the following MFCUs during the reporting period:  these claims.  This was a joint investigation with the FBI 
and the Texas MFCU.
California State Medicaid Fraud Control Unit:  
Florida  Edys Illanes was sentenced to 1 year and 6 
2015 Onsite Review.  
months in prison and ordered to pay $2.4 million in 
OEI-09-15-00070    2016 February.  restitution, joint and several, for her role in a Medicare 
Part C and Medicaid fraud scheme.  Evidence showed 
Delaware State Medicaid Fraud Control Unit:  
that, from June 2013 to April 2014, Illanes was a licensed 
2015 Onsite Review.   insurance agent employed by a Medicare Advantage 
Organization (an HMO) to market and sell their plans.  
OEI-07-15-00240    2016 February.
Under the scheme, Illanes recruited Medicare 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   22 LEGAL AND  
INVESTIGATIVE  
beneficiaries living in Nicaragua to enroll in a Medicare  under the Federal anti-kickback statute (42 U.S.C.  
ACTIVITIES  
Advantage plan.  She submitted fraudulent enrollment  1320a-7b(b)).  OIG stated that donations of items or 
RELATED TO  
requests to Medicare, falsely representing that the  services that have limited or restricted interoperability 
MEDICARE AND  
beneficiaries actually resided in Florida.  This was a  due to action taken by an applicable individual or 
MEDICAID
joint investigation with the FBI and the Florida MFCU. entity would fail to meet one of the conditions of the 
safe harbor and would be inconsistent with the intent 
of the safe harbor to promote the use of technology 
Advisory Opinions and Other Industry Guidance  that is able to communicate with products from  
other vendors.  Failure to meet this condition would 
As part of OIGs continuing efforts to promote the 
mean that the safe harbor would not apply and the 
highest level of ethical and lawful conduct by the 
arrangement would be subject to case-by-case review 
health care industry, we issue advisory opinions and 
under the Federal anti-kickback statute.  As OIG stated, 
other guidance to educate industry and other 
such donations would be suspect under the statute.
stakeholders on how to avoid fraud, waste, and abuse.  
Advisory opinions, which are developed in consultation 
with DOJ, are issued to requesting parties regarding  Sanction Authorities and Other  
the interpretation and applicability of certain statutes 
Administrative Actions 
relating to Federal health care programs.  The Health 
Insurance Portability and Accountability Act of 1996 
Various Federal laws provide authorities the ability to 
(HIPPA),  205, allows OIG to provide case-specific 
impose administrative sanctions for fraud and abuse, 
formal guidance on the application of the anti-kickback 
as well as other activities that pose a risk to Federal 
statute and safe harbor provisions and other OIG 
health care programs and their beneficiaries.  
health care fraud and abuse sanctions.  From October 
Sanctions include the exclusion of individuals and 
1, 2015, to March 31, 2016, OIG received 23 requests 
entities from Federal health care programs and the 
for advisory opinions, issued 8 new opinions, modified 
imposition of civil monetary penalties (CMPs) for 
9 opinions, and terminated 3 opinions. 
submitting false and fraudulent claims to a Federal 
health care program or for violating the anti-kickback 
statute; the Stark law; or the Emergency Medical 
Health Information Technology
Treatment and Labor Act (EMTALA), also known as  
the patient dumping statute. 
OIG Policy Reminder: Information Blocking and  
the Federal Anti-Kickback Statute During this semiannual reporting period, OIG imposed 
1,774 administrative sanctions in the form of program 
As HHS focuses on the flow of information across the 
exclusions or administrative actions for alleged fraud 
care continuum, OIG reminded the public about how 
or abuse or other activities that posed a risk to Federal 
information blocking may affect safe harbor protection 
health care programs and their beneficiaries.  Exclusion 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   23 LEGAL AND  
INVESTIGATIVE  
ACTIVITIES   and penalty authorities are described in Appendix C  Colorado  Paul Bugaric, a certified nurse assistant, 
and on our website at http://oig.hhs.gov/fraud/ was excluded for a minimum period of 25 years based 
RELATED TO  
enforcement/cmp/index.asp.  on his convictions for sexual assault.  Bugaric 
MEDICARE AND  
performed sexual acts on a person who had a 
MEDICAID
traumatic brain injury that rendered her unable to give 
Program Exclusions  consent to the acts.  Bugaric was sentenced to 15 years 
of incarceration.  In addition, his license to practice as 
During this semiannual reporting period, OIG excluded 
a certified nurse assistant was revoked by the Colorado 
1,662 individuals and entities from Medicare, 
State Board of Nursing.
Medicaid, and other Federal health care programs.  
Most of the exclusions resulted from convictions for 
crimes relating to Medicare or Medicaid, for patient  Suspensions and Debarments 
abuse or neglect, or as a result of license revocation.  
OIG is also responsible for reinstating providers who  Suspensions and debarments are administrative tools 
apply and have met the requirements of their  used by HHS and other Federal agencies to protect the 
exclusions.  For a list of excluded individuals and  Government from individuals and entities that have 
entities, see https://exclusions.oig.hhs.gov/.   engaged in contract fraud, misused grant funds, or are 
otherwise not presently responsible.  Because these 
are Governmentwide sanctions, an individual or entity 
The following are examples of  
that has been suspended or debarred by HHS or any 
program exclusions:
other agency is ineligible from participating in any 
Texas  Dennis Barson, Jr., a doctor of osteopathy, was  future funding opportunities across the Federal 
excluded for a minimum period of 25 years based on  Government for a specified period of time. 
his conviction of conspiracy to commit health care 
fraud and health care fraud, aiding and abetting.   OIG refers individuals and entities that have potentially 
Beginning around April 2009 and continuing to about  engaged in grant or contract fraud or misconduct to 
February 2010, Barson conspired with others to  the HHS Suspension and Debarment Official, who is 
defraud the Medicare program.  As part of the  responsible for determining whether to impose a 
conspiracy, Barson billed Medicare for procedures   suspension or debarment.  OIG continues to develop a 
and services that were never performed.  As a result   robust Suspension and Debarment program and uses 
of this activity, the court sentenced Barton to pay  this tool to protect Government programs against 
$1,188,993 in restitution and serve 10 years in prison.   fraud, waste, poor performance, and noncompliance 
The Texas State Board of Medicine revoked his license  with contract provisions or applicable law.  
to practice and the Virginia State Board of Medicine 
suspended his license. 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   24 LEGAL AND  
INVESTIGATIVE  
ACTIVITIES   The following are debarment examples:  before litigation.  As part of the settlements, providers 
often agree to enter into CIAs with OIG to avoid 
RELATED TO   California  Vivian Benn, chief executive officer of 
exclusions from Medicare, Medicaid, and other Federal 
MEDICARE AND   Family Hope Foster Family Agency, was debarred for a 
health care programs.  Under a CIA, a provider 
MEDICAID 3-year period based on her criminal embezzlement 
commits to establishing a program and taking other 
convictions.  Family Hope Foster Family Agency was an 
specified steps to ensure future compliance with 
indirect recipient of Federal grant funds from ACF.  
Medicare and Medicaid rules.  The compliance programs 
According to the investigation, Benn used her position 
are designed, in part, to prevent future fraud.  OIG 
of trust to embezzle $450,000 for her personal use.  
monitors providers compliance with these agreements 
Benn was sentenced to 3 years and 4 months of 
and may impose penalties on entities that fail to 
incarceration and ordered to pay $450,000 in restitution.
comply with the requirements of their CIAs.  Many civil 
Montana  Wilford Harlan Huck Sunchild, acting  settlements include CIAs with OIG.  Examples of these 
director of the Wellness Center, a department under  CIAs are included in the case narrative section. 
the Rocky Boy Health Board Clinic for the Chippewa 
Cree Tribe of the Rocky Boys Reservation, was 
Civil Monetary Penalties Law 
debarred for a 3-year period based on his criminal 
theft convictions.  The Wellness Center is an indirect 
The Civil Monetary Penalties Law (CMPL) authorizes 
recipient of Federal self-governance compact funds, 
OIG to impose administrative penalties on and 
which are provided by IHS.  While acting as director, 
assessments against a person who, among other 
Sunchild secured an agreement with a program of 
things, submits, or causes to be submitted, claims to  
Nike, Inc., Nike Native Air N7, which was to provide 
a Federal health care program that the person knows, 
Nike N7 shoes and apparel to members of the 
or should know, are false or fraudulent.  During this 
Chippewa Cree Tribe at a reduced rate to promote 
semiannual reporting period, OIG concluded cases 
wellness within the tribe.  Sunchild used his position  
involving more than $43.8 million in CMPs and 
to set up a bank account for the Nike Native Air N7 
assessments.  
program, but in reality Sunchild diverted Wellness 
Center contributions into this account for his own 
personal use.  Sunchild was sentenced to 1 year and   The following are CMP examples:
1 day of incarceration and ordered to pay $19,735 in 
New Jersey  Ascend Laboratories, LLC (Ascend) 
restitution.  In addition, Sunchild was excluded from 
agreed to pay $1,287,000 to settle allegations that it 
Federal health care programs for 5 years.
failed to submit drug pricing data to CMS.  The 
Medicaid Drug Rebate Program requires pharmaceutical 
companies to enter into and have in effect a national 
Corporate Integrity Agreements 
rebate agreement with the Secretary of HHS in  
order for Medicaid payments to be available for the 
Many health care providers elect to settle their cases 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   25 LEGAL AND  
INVESTIGATIVE  
ACTIVITIES   pharmaceutical companys covered drugs.  Companies  The following are EMTALA case examples:
with such rebate agreements are required to submit 
RELATED TO   South Carolina  St. Francis Hospital agreed to pay two 
certain drug pricing information to CMS, including 
MEDICARE AND   maximum penalties of $50,000 each to resolve its 
quarterly and monthly average manufacturers  
MEDICAID potential liability under EMTALA.  OIG alleged that St. 
price (AMP) data.  OIG can seek penalties against 
Francis failed to treat two gunshot victims who arrived 
manufacturers that misrepresent, or fail to timely 
at its emergency department.  OIG contended that a 
report, drug pricing information.  OIG alleged that 
32-year-old male arrived at St. Franciss emergency 
Ascend failed to submit timely monthly and quarterly 
department with a gunshot wound to his leg.  The 
AMP data for several months in 2013 and 2014 and for 
patient required a CT angiogram of his leg to assess 
three quarters in 2013. 
possible vascular injuries and treatment by a surgeon.  
While these services were available at St. Francis, they 
Texas  Gustavo Grieco, M.D.; Sohail Siddiqui, M.D.; 
were not provided.  Instead, the patient was 
and Marco Vargas, D.P.M.; agreed to pay $208,000, 
transferred to another hospital.  OIG also contended 
$75,000, and $65,000, respectively, to settle allegations 
that a 29-year-old male arrived at St. Franciss 
that they received improper remuneration in exchange 
emergency department with a gunshot wound to the 
for the referral of patients to an independent diagnostic 
abdomen.  Although St. Francis had both the capacity 
testing center, OneStep Diagnostic, Inc. (OneStep), in 
and capability to further treat the patient, St. Francis 
the Houston area.  Specifically, OIG alleged that from 
instead transferred the patient to another hospital 
January 1, 2008, through June 30, 2012, Grieco, Siddiqui, 
without providing stabilizing care.  In addition to the 
and Vargas each received improper remuneration from 
above two instances, CMS found that St. Francis failed 
OneStep in the form of compensation from a Medical 
to ensure that their emergency department EMTALA 
Directorship agreement and that took into account the 
policies and procedures, Medical Staff By-Laws, or 
value and volume of referrals made to OneStep.  In 
Medical Staff Rules and Regulations defined the 
October 2014, OneStep agreed to pay $1.2 million and 
responsibilities of on-call physicians under EMTALA.
adhere to a 5-year CIA to resolve their related liability.
Mississippi  University of Mississippi Medical Center 
(UMMC) agreed to pay a maximum penalty of $50,000 
Patient Dumping 
to resolve its potential liability under EMTALA.  OIG 
alleged that a 64-year-old woman arrived at a hospital 
Some of the CMPL cases that OIG resolved between 
in Mississippi with abnormal vital signs and lab results.  
October 1, 2015, and March 31, 2016, were pursued 
A chest x-ray revealed a large right pleural effusion, 
under the EMTALA, a statute designed to prevent 
and the patient was diagnosed with atrial fibrillation, 
hospitals from denying emergency care to patients and 
pleural effusion, urinary tract infection, and congestive 
to ensure patient access to appropriate emergency 
heart failure.  She was given numerous medicines, but 
medical services.  
was determined to need a higher level of care than 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   26 LEGAL AND  
INVESTIGATIVE  
ACTIVITIES   was available at that hospital.  An emergency  the OIG website at https://oig.hhs.gov/compliance/
department physician called UMMC and requested a  self-disclosure-info/index.asp. 
RELATED TO  
transfer of the patient to UMMC.  OIG contended that 
MEDICARE AND  
During this reporting period, self-disclosure cases 
when UMMC discovered the patient was from 
MEDICAID resulted in more than $48.1 million in HHS receivables.  
Louisiana, it refused to accept the transfer of the 
patient due to UMMCs new policy of not accepting 
patients from Louisiana.   The following are examples of provider  
self-disclosure settlements:
Ohio  The Kroger Company agreed to pay 
Provider Self-Disclosure Protocol 
$21,523,047 to resolve its liability under the CMPL for 
OIG is committed to assisting health care providers and  conduct disclosed to OIG.  Kroger is an Ohio for-profit 
suppliers in detecting and preventing fraud and abuse.   corporation that operates more than 2,109 pharmacies 
Since 1998, we have made available comprehensive  and 2,640 supermarkets and multi-department stores 
guidelines describing the protocol for providers to  in 34 states.  OIG alleged that Kroger employed 14 
voluntarily submit to OIG self-disclosures of fraud,  individuals who were excluded from participation in 
waste, or abuse.  The provider self-disclosure protocol  Federal health care programs.  Kroger also filled 
gives providers an opportunity to minimize the  prescriptions, for which payment was made under  
potential costs and disruption that a full-scale OIG  a Federal health care program, that were written  
audit or investigation might entail if fraud were  by 84 excluded prescribers.  
uncovered.  The self-disclosure also allows the provider 
Alabama  Community Health United Home Care, LLC 
to negotiate a fair monetary settlement and potentially 
(CHUHC) agreed to pay $9,800,707 to resolve its 
avoid being excluded from participation in Federal 
liability under the CMPL for conduct it disclosed to 
health care programs. 
OIG.  Specifically, OIG alleged that, from January 1, 
The protocol guides providers and suppliers through  2008, through February 29, 2012, CHUHC submitted 
the process of structuring a disclosure to OIG about  claims for hospice services at Center Home Care 
matters that constitute potential violations of Federal  Corporation and Fallbrook Home Care Services  
laws.  After making an initial disclosure, the provider or  without certifications of terminal illness, face-to-face 
supplier is expected to thoroughly investigate the  encounters, and/or physician narratives, as required  
nature and cause of the matters uncovered and make a  by hospice regulations. 
reliable assessment of their economic impact.   
OIG evaluates the reported results of each internal 
investigation to determine the appropriate course of 
action.  The self-disclosure guidelines are available on 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   27     
ss
we
eti Public Health-Related Legal   HEAL Exclusions  
ii
vv Actions and Investigations During this semiannual reporting period, 6 individuals 
ei and related entities were excluded as a result of PSC 
t
Rc Health Education Assistance Loan Program referral of their cases to OIG.  Individuals who have 
A been excluded as a result of default may enter into 
 
s OIG excludes individuals who have defaulted on   settlement agreements, whereby the exclusions are 
 
et Health Education Assistance Loan (HEAL) loans from  stayed while they pay specified amounts each month 
in participation in Federal health care programs.  Under  to satisfy their debts.  If they default on these 
c
e the HEAL program, which stopped making loans in  settlement agreements, they may be excluded until 
n
m 1998, HRSA guaranteed commercial loans to students  the entire debt is repaid, and they may not appeal the 
e
seeking education in health-related fields.1  The  exclusions. 
ge
students are allowed to defer repayment of the loans 
Ac After being excluded for nonpayment of their HEAL 
until after they graduate and begin to earn income.  
r
  debts, 2,617 individuals chose to enter into settlement 
o Although HHSs Program Support Center (PSC) takes 
h agreements or completely repay their debts.  That 
f steps to ensure repayment, some loan recipients do 
t figure includes 21 individuals who entered into such 
ln not resolve their indebtedness.  After PSC has 
aE exhausted efforts to secure repayment of a debt, it  settlement agreements or completely repaid their 
e debts during this semiannual reporting period.  More 
  declares an individual in default.  The Social Security 
Hd than $207 million is being repaid through settlement 
Act permits exclusion thereafter of such individuals 
agreements or through complete repayment.  Of that 
 n from Medicare, Medicaid, and all other Federal health 
ca care programs for nonpayment of the loans.  amount, $1.9 million is attributable to this semiannual 
i reporting period.
l
b Exclusion means that the individual may not receive 
Practitioners in three States entered into settlement 
reimbursement under these programs for professional 
u
agreements to repay the amounts indicated:
services rendered, nor may any other provider receive 
P
reimbursement for services ordered or prescribed by    Massachusetts  Dentist  $206,570
the excluded individual.  OIG is responsible for 
  California  Medical Doctor  $126,133 
excluding individuals who have defaulted on HEAL 
loans from participation in Federal health care programs.   California  Chiropractor  $51,277
  Michigan  Osteopath  $14,957
1   The HEAL Program, noted in previous Semiannual Reports , was permanently transferred from HHS to the U.S. Department of Education  
as required by the Consolidated Appropriations Act, 2014 (Pub.  L. 113-76).  The transfer was completed on July 1, 2014. 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   28     
sns
woe
eiti Administration for Children and Families 
t
iai
vv
ezi Hurricane Sandy  Response Preparedness Childcare Health and Safety Requirements
it
Rnc
The Response to Superstorm Sandy Highlights the  ACF provides Federal grants through several programs, 
 aA including Head Start and the Child Care and 
sg Importance of Recovery Planning for Childcare Nationwide 
  Development Fund (CCDF).  CCDF (authorized by the 
ert We reviewed New Jersey and New Yorks emergency 
iOn preparedness for, response to, and recovery from  Child Care and Development Block Grant Act and the 
c Social Security Act  418) assists low-income families, 
e
Superstorm Sandy as related to childcare.  We found 
n  families receiving temporary public assistance, and 
Gm that, before Superstorm Sandy, New Jersey and New 
e families transitioning from public assistance to obtain 
Yorks emergency planning did not include the 
gIe childcare so that they may work or obtain training or 
O development of strategies for restoring or rebuilding 
Ac education.  The objective of the reviews below were to 
childcare facilities and infrastructure after a disaster, as 
r determine whether States were ensuring that providers 
 o recommended by ACF.  However, these States 
s receiving CCDF funds complied with State requirements 
established post-disaster task forces that assisted 
ef related to the health and safety of children. 
n childcare providers with the recovery and rebuilding 
c
E process.  Since Superstorm Sandy, ACF has taken steps 
i
v  to improve nationwide emergency preparedness,  Some South Carolina Childcare Centers Did Not Always 
rd response, and recovery for childcare.  However, fewer  Comply With State Health and Safety Licensing Requirements
en than half of all States reported including or planning to 
A-04-14-08032    November 2015
Sa include the restoration or rebuilding of childcare 
  facilities and infrastructure after a disaster in their  Also, Some South Carolina Family Childcare Homes Did Not 
n
emergency preparedness and response plans.  Because  Always Comply With State Health and Safety Requirements
a
of legislation enacted in November 2014, States are 
We found that four childcare providers that we 
m
required to have statewide childcare disaster plans; 
reviewed did not comply with the childcare center 
however, the requirements do not explicitly specify 
u physical condition requirements, which had previously 
that these plans must include planning for the 
H been cited by South Carolina, or with caregiver 
restoration or rebuilding of childcare facilities and 
documentation requirements; one provider did not 
infrastructure after a disaster.  
comply with childrens immunization record 
requirements.  Of the 20 childcare homes we 
ACF concurred with our recommendation to require 
reviewed, 16 did not comply with 1 or more of the 
States to include planning for the restoration or 
guidelines for physical conditions, 9 did not comply 
rebuilding of childcare facilities and infrastructure after 
with guidelines for child records, 4 did not comply with 
a disaster in their statewide childcare disaster plans.
training requirements, and 4 were not available during 
OEI-04-14-00410    December 2015 operating hours to complete our unannounced inspection.
HHHHSS  OOIIGG  SSHeeHmmSii aaOnnInnGuu Saaell  mRReeiappnoonrrttu  ttaool   RCCeoopnnoggrrrtee tssoss   C      o    ||n    g      r  eOOsccstt  oo  bb  |ee  rr     11 O,,  22c00to11b55e  r   MM1,aa 2rr0cc1hh5  33 11 ,,M  2200ar11c66h     31, 2016   292299 HUMAN  
SERVICES  
South Carolina generally concurred with our  single comprehensive and specific checklist to aid in  
AGENCIES  
recommendations in both reports that it ensure  its monitoring of providers for compliance with health 
REVIEWS AND  
compliance with Federal health and safety requirements  and safety requirements; correct the specific health 
ENFORCEMENT 
for CCDF providers; ensure that CCDF homes complete  and safety issues noted in the reports; and ensure that 
ACTIVITIES
and submit training documentation and impose penalties  providers employ only individuals with proper 
for failures to comply; and ensure that required  background certification. 
documentation is included in the childrens records.  
Puerto Rico also concurred with our findings in the 
South Carolina also generally concurred with our 
childcare home provider report that resulted in our 
recommendations in the family childcare homes report 
recommendations to update its CCDF State Plan to 
that it inspect registered family childcare homes annually. 
more accurately describe childcare home types and 
A-04-14-08031    November 2015 requirements; establish policies and procedures to 
ensure that onsite inspections are performed at all 
providers at least annually; and establish requirements 
Puerto Rico Child Daycare Centers Did Not Always Comply  for all household members to obtain a certification 
that they are not in Puerto Ricos registry of persons 
With Commonwealth Health and Safety Requirements 
convicted of sex crimes and child abuse.
A-02-14-02001    October 2015
Also, Puerto Rico Childcare Home Providers Did   A-02-14-02016    October 2015
Not Always Comply With Commonwealth Health  
and Safety Requirements 
Puerto Rico Improperly Claimed Some Childcare  
We found that Puerto Rico did not ensure that 
and Development Targeted Funds 
providers receiving funding from CCDF complied with 
We reviewed $18.9 million in CCDF targeted fund 
requirements related to the health and safety of 
expenditures and found that Puerto Rico did not 
children.  Potentially hazardous conditions existed  
comply with Federal requirements for the use of $12.5 
at the three daycare center providers we reviewed.  
million.  Puerto Rico used $10.9 million for nontargeted 
Potentially hazardous conditions also existed at 19  
fund activities and $1.6 million in targeted funds for 
of the 20 childcare home providers we reviewed.
contractor activities not specified as targeted.  Puerto 
Puerto Rico concurred with our findings in both  Rico did not indicate concurrence or nonconcurrence 
reports that resulted in our recommendations to  with our recommendations to refund to the Federal 
establish binding health and safety requirements for   Government $12.5 million for expenditures that were 
all CCDF providers in Puerto Rico; have procedures   not used for targeted fund activities, ensure that 
in place to ensure that providers receive adequate  targeted funds are expended in accordance with 
training on health and safety requirements; develop a  funding allocations established by ACF, and develop 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   30 HUMAN  
SERVICES  
procedures for reconciling accounting records to  safety issues noted in the report are corrected, the 
AGENCIES  
reports submitted by contractors and monitor these  program complies with Federal health and safety 
REVIEWS AND  
reports to ensure that contractors are using targeted  requirements for CCDF providers, the timing of 
ENFORCEMENT 
funds for targeted activities. provider inspections is less predictable and conducted 
ACTIVITIES
in accordance with the new CCDF Block Grant Act 
A-02-14-02016    February 2016 requirements, and licensed providers comply with 
background screening or rescreening requirements 
and staffing requirements. 
Some Florida Childcare Centers Did Not Always Comply  
With State Health and Safety Licensing Requirements  A-04-14-08034    March 2016
A-04-14-08033    March 2016
Also, Some Florida Family Childcare Homes Did Not Always 
Child Support Enforcement  
Comply With State Health and Safety Requirements 
Activities
We reviewed four childcare providers and found that 
all four providers did not comply with the physical 
conditions requirements, two providers did not comply  OIG Investigations  
with staff record requirements, and two providers did 
not comply with child record requirements.  Of the 20  OIG investigates noncustodial parents who fail to pay 
childcare home providers we reviewed, 15 did not  court-ordered child support.  OIG works with ACFs 
comply with 1 or more of the physical conditions  Office of Child Support Enforcement; DOJ; U.S. 
requirements; 11 did not comply with child record  Attorneys Offices; the U.S. Marshals Service; and 
requirements; 4 did not comply with staff  Federal, State, and local partners to address egregious 
documentation requirements; and 4 were not available  child support enforcement cases with appropriate law 
during operating hours to complete our unannounced  enforcement and prosecutorial action.  During this 
inspection, which prevented us from assessing the  reporting period, OIG investigations of child support 
physical conditions and childrens records. enforcement cases nationwide resulted in 22 criminal 
actions and court-ordered restitution and settlements 
Florida concurred with our recommendations in both  of $924,128.  
reports to ensure that required documentation is 
complete, current, and included in the childrens files.  
Florida also concurred with our recommendation in 
the family childcare centers report that providers meet 
training requirements.  Florida did not concur or 
nonconcur with our recommendations in the family 
childcare homes report that the specific health and 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   31 HUMAN  
SERVICES  
The following are examples of child support  pursuing parents who fail to pay court-ordered child 
AGENCIES  
enforcement cases: support.  OIGs Most Wanted Deadbeat Parents 
REVIEWS AND  
website is at https://oig.hhs.gov/fraud/child-support-
ENFORCEMENT  Maine  Glen Caristinos was sentenced to 5 years of 
enforcement/index.asp. 
ACTIVITIES probation and ordered to pay $117,601 in restitution 
after pleading guilty to failure to pay child support.  In 
October 2001, Caristinos was ordered to pay $248.16 
per week for the support of his son.  However, from 
2001 to 2005, Caristinos made inconsistent payments 
to the custodial parent of his child before moving to 
Florida and virtually ceasing to make further payments.  
South Dakota  Michael Paul Marsh was sentenced to 
3 years of probation and ordered to pay $103,190 in 
restitution after pleading guilty to failure to pay child 
support.  In 2005, Marsh was ordered to pay child 
support for his three children, and since is more than 
$100,000 in arrears.  Marsh admitted that he was 
aware that a support order was issued, and that he 
was physically capable of working and could have paid 
more than he did.
Engaging the Public in Capturing  
Deadbeat Parents
Because of the success of OIGs Most Wanted Fugitives 
website, OIG launched its Most Wanted Deadbeat 
Parents website.  The site identifies parents who fail to 
pay court-ordered child support for their children and 
thereby put an unnecessary strain on the custodial 
parents and the children as well as on agencies that 
enforce these matters.  The site, which is updated 
frequently, includes information on OIGs role in 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   32    
dns
eon
tio Grants and Contracts construction projects, such as a change of scope, 
at
i scheduling delays, and cost overruns.  Our review of 
a
lt
eza New York University School of Medicine Budgeted Costs That  Hidalgo Medical Services (HMS), in Lordsburg, New 
Rig Were Appropriate and Claimed Allowable Hurricane Sandy  Mexico, determined that HMS did not comply with 
n applicable Federal requirements and grant terms 
i Disaster Relief Act Funds 
-
at related to its ACA-funded capital development grant.  
Ss Our objectives were to determine whether New York 
g HMS also did not provide the community health 
He University (NYU) School of Medicines Disaster Relief 
r services described in the application because of 
v Act budgeted costs were appropriate and its claimed 
HO changes in management after submission of the grant 
n costs were allowable in accordance with Federal 
   application and a lack of awareness of Federal grant 
rG I requirements.  On July 1, 2013, nearly 9 months   policies and procedures.  HMS, a not-for-profit health 
eId after Hurricane Sandy, NIH began awarding Disaster  center in New Mexico, received $8,715,094 in HRSA 
h Relief Act funds to NYU School of Medicine for the 
On funds to construct a new community health center in 
t restoration of its medical scientific research activities, 
a Silver City, New Mexico, and to construct a senior 
O which were damaged by Hurricane Sandy.  From July 1, 
  wellness center in Lordsburg, New Mexico.  
s 2013, through September 30, 2015, NIH awarded 
w $127.8 million for Grantee Research Programs to   HMS did not concur with our recommendations, but 
NYU School of Medicine.  NYU School of Medicine  HRSA did concur with our recommendations that it 
e
planned to use the funds to restore experiments and  either require HMS to refund $898,000 to the Federal 
i
v reestablish research programs affected by the loss of  Government for the unallowable grant expenses or 
e biospecimens, animals, data, and time.  We found that  provide HMS with disposition instructions for the 
R NYU School of Medicine appropriately budgeted and  wellness center at issue and, upon disposition, require 
claimed allowable Hurricane Sandy Disaster Relief Act  HMS to refund to the Federal Government either  
funding.  Accordingly, this report contained no  the wellness centers fair market value or $898,000  
recommendation.  of the wellness centers cost, whichever is lower, and 
work with HMS to strengthen its financial, property 
A-02-14-02011    December 2015
management, and procurement controls over  
grant funds. 
Hidalgo Medical Services Did Not Comply With All Federal  A-06-14-00056    January 2016
Requirements Related to Its Capital Development Grant 
As part of our ACA oversight activities, OIG is 
conducting a series of reviews of certain ACA-funded 
capital development grants, funded by HRSA, because 
of the potential risks associated with expansion and 
HHHHSS  OOIIGG  SSHeeHmmSii aaOnnInnGuu Saaell  mRReeiappnoonrrttu  ttaool   RCCeoopnnoggrrrtee tssoss   C      o    ||n    g      r  eOOsccstt  oo  bb  |ee  rr     11 O,,  22c00to11b55e  r   MM1,aa 2rr0cc1hh5  33 11 ,,M  2200ar11c66h     31, 2016   333333 Grant Fraud performed by an affiliated entity, Jacksonville 
OTHER  
Healthcare, Inc.
HHS-RELATED 
HHS is the largest grant-making organization and one 
REVIEWS AND   of the largest contracting agencies in the Federal  Montana  Timothy Rosette, the acting chief executive 
INVESTIGATIONS  Government.  In FY 2015, HHS awarded more than  officer of the Rocky Boy Health Board (RBHB) clinic for 
$412 billion in grants and over $20 billion in contracts  the Chippewa Cree Tribe of the Rocky Boys Indian 
across all program areas.  OIGs direct annual  Reservation, was sentenced to more than 3 years in 
discretionary appropriation funding is used to conduct  prison and ordered to pay $600,000 in restitution for 
program integrity and enforcement activities with  his guilty plea to bribery and theft from an Indian tribal 
regard to the more than 100 public health and human  organization.  Investigators believe that Rosette 
services programs carried out by over 70,000  accepted bribes from multiple businesses, including 
employees around the world.  The size and scope of  TMP Services (a contractor used after the clinic 
departmental awards make their operating  incurred damage from a flood), in exchange for the 
effectiveness crucial to the success of programs  award of tribal contracts.  After the clinic experienced 
designed to improve the health and well-being of the  damage from a flood, all the property salvaged from 
public.  Recent appropriations increased OIGs  the clinic building was stored using FEMA funds with 
discretionary funding for public health and human  the idea that the property would be used in the new 
services oversight.   clinic building, but it was never used.  Investigators 
believe that Rosette was a secret partner in TMP 
Services and that bogus claims were generated to 
The following are case examples related  
reimburse Rosette for the bribes.  Eight defendants 
to misuse of grant funds: 
involved in the scheme were previously sentenced to a 
Florida  The University of Florida entered into a  combined 15 years and 2 months in prison and 
$19.875 million settlement agreement with OIG and  ordered to pay more than $1.2 million in restitution.  
seven HHS operating divisions that awarded grants to 
New York  Dorothy Ogundu was sentenced to 
the University.  The University of Florida receives 
between 1 and 3 years of incarceration after a jury 
millions of dollars in grant funding from HHS on 
found her guilty on 29 counts, including grand larceny.  
hundreds of grants each year.  The settlement resolves 
According to court documents, Ogundu owned 
allegations that the University overcharged hundreds 
Angeldocs, a not-for-profit medical clinic.  From 
of grants for the salary costs of its employees, charged 
approximately April 2006 through September 2013, 
some of these grants for administrative costs for 
Ogundu stole a portion of each of the 12 Government 
equipment and supplies when those items should not 
grants that she received, totaling approximately 
have been directly charged to the grants under Federal 
$300,000.  Two of the 12 grants in question were 
regulations, and inflated costs charged to HHS grants 
congressional earmarks sponsored by a U.S. Congressman 
awarded at its Jacksonville campus for services 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   34 and administered by the U.S. Department of Housing  OIGs are required to include in their Semiannual 
OTHER  
and Urban Development and the CDC.  Ogundu used  Reports to Congress the retaliation complaint 
HHS-RELATED 
the money that she stole to pay the mortgage and  investigations that they decided not to conduct or 
REVIEWS AND  
utilities on a commercial property she owned, make  continue during the reporting period.  During this 
INVESTIGATIONS 
improvements to the property to increase its value,  reporting period, OIG closed two investigations.
purchase and ship vehicles to Nigeria, and make other 
purchases for her personal benefit and for the benefit 
Contract Audits
of her not-for-profit business.  
Pursuant to the National Defense Authorization  
Act for FY 2008,  845, OIGs appointed under the 
Small Business Innovative Research Program  Inspector General Act of 1978 are required to submit, 
as part of their Semiannual Reports to Congress 
The National Defense Authorization Act for Fiscal Year  pursuant to section 5 of such Act, information on final 
2012,  5143, requires OIG to annually report on the  completed contract audit reports issued during the 
number of cases that were referred with relation to  period to the contracting activity containing significant 
fraud, waste, or abuse in the Small Business Innovative  audit findings.  OIG did not issue final reports meeting 
Research/Small Business Technology Transfer (SBIR/  845 criteria during this semiannual period.  
STTR) program.  OIG must also report on the actions 
taken in each case; justification for not taking action on 
OIG Reviews of Non-Federal Audits 
a case; and an accounting of funds used to address 
OIG reviews audits conducted by non-Federal auditors 
waste, fraud, and abuse in this program.  In our 
of entities receiving Federal awards.  In this semiannual 
December 2015 report delivered to the three 
period, OIGs National External Audit Review Center 
Congressional oversight committees, we reported  
reviewed 681 reports covering $110.5 billion in 
that OIG spent approximately $236,239 in salaries  
audited costs.  Federal dollars covered by these audits 
on oversight related to the SBIR/STTR program.  HHS 
totaled $62.4 billion, of which about $523.5 million 
referred two new SBIR/STTR cases to OIG in FY 2015.
were HHS funds.
Office of Management and Budget (OMB) Circular 
Recovery Act Retaliation Complaint Investigations
A-133 establishes audit requirements for State and 
local governments, colleges and universities, and 
The American Recovery and Reinvestment Act 
nonprofit organizations receiving Federal awards.  
(Recovery Act),  1553, prohibits non-Federal 
Under this circular, covered entities must conduct 
employers that have received Recovery Act funding 
annual organizationwide single audits of all Federal 
from retaliating against employees who disclose 
money they receive.  These audits are conducted by 
evidence of mismanagement of Recovery Act funds  
non-Federal auditors, such as public accounting firms 
or any violation of law related to Recovery Act funds.  
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   35 and State auditors.  OIG reviews the quality of these  The 681 reports included 1,524 recommendations for 
OTHER  
audits and assesses the adequacy of the entities  improving management operations.  In addition, these 
HHS-RELATED 
management of Federal funds.   audit reports provided information for 21 OIG special 
REVIEWS AND  
memorandums that identified concerns for increased 
INVESTIGATIONS  OIGs oversight of non-Federal audit activity informs 
monitoring by management.
Federal managers about the soundness of 
management of Federal programs and identifies any 
significant areas of internal control weakness,  Other Reporting  
noncompliance, and questioned costs for resolution or 
Requirements and Reviews
follow-up.  We identify entities for high-risk 
monitoring, alert program officials to any trends that 
could indicate problems in HHS programs, and profile  Legislative and Regulatory Reviews 
non-Federal audit findings of a particular program or 
activity over time to identify systemic problems.  We  Pursuant to the Inspector General Act,  4(a)(2), OIG is 
also provide training and technical assistance to  required to review existing and proposed legislation 
grantees and members of the auditing profession.    and regulations relating to HHSs programs and 
OIG maintains a process to assess the quality of the  operations and make recommendations concerning 
non Federal reports received and the audit work that  their impact on economy and efficiency or the 
supports the selected reports.  OIGs reports on  prevention and detection of fraud and abuse.  Most 
non-Federal audits reviewed during this reporting  audits and other reviews that we conduct are designed 
period are categorized in the following table. to test compliance with and/or assess the administration 
and oversight of existing laws and regulations.  Our 
reports of such reviews describe findings, which include 
Number of Non-Federal Audits:  
questioned costs, inefficiencies, vulnerabilities to fraud, 
October 1, 2015 through March 31, 2016
inconsistencies, errors in application, or weaknesses in 
oversight or supporting systems.  Our corresponding 
recommendations tell HHS and its operating or staff 
divisions what administrative, regulatory, or legislative 
647 33 1
actions we believe are needed to effectively respond to 
the findings.  Our regularly published core publications 
reflect the relationship between our work and laws 
and regulations.   
Not requiring changes   Requiring   Having significant 
or having minor changes major changes technical inadequacies
  Our Semiannual Report to Congress describes 
Total  681
findings and recommendations from recently 
completed reviews, many of which focus on 
existing laws and regulations.  
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   36   Our Compendium of Priority Recommendations  Federal Marketplace
OTHER  
describes priority findings and recommendations 
HHS-RELATED 
from past periods that remain to be implemented.   HealthCare.gov:  Case Study of CMS Management  
REVIEWS AND  
of the Federal Marketplace 
  Our annual Work Plan and Mid-Year Update 
INVESTIGATIONS 
provides citations to laws and regulations that are  The objective of this case study was to gain insight into 
the subject of ongoing or future reviews. CMSs implementation and management of  
the Federal Marketplace, focusing primarily on 
We also review proposed legislation and regulations 
HealthCare.gov.  We found that HHS and CMS  
related to HHS programs and operations.  HHS routinely 
made many missteps throughout development  
involves us and its operating and other staff divisions in 
and implementation that led to the poor launch of 
the review and development of HHS regulations 
HealthCare.gov on October 1, 2013.  Most critical was 
through a well-established HHS process.  Our audits, 
the absence of clear leadership, which caused delays in 
evaluations, and investigations are sometimes cited in 
decision-making and a lack of clarity in project tasks.  
regulatory preambles as influencing HHS regulations.  In 
Additional missteps included devoting too much time 
addition, we provide independent, objective technical 
to developing policy, which left too little time for 
assistance on a bipartisan, bicameral basis to 
developing the website, and failing to properly manage 
congressional committees and members who  
its key website development contract.  CMSs 
request it.
organizational structure and culture also hampered 
progress, including poor coordination between policy 
Implementation of Health   and technical work.  CMS continued on a failing path 
despite signs of trouble, making rushed corrections 
Insurance Marketplaces
that proved insufficient.  
Following the launch, CMS and contractors pivoted 
OIG continues to review programs implemented 
quickly to make corrective actions, reorganizing the 
pursuant to the ACA.  OIGs ACA oversight strategy 
work to improve execution and facilitating health  
focuses on the health insurance marketplaces, reforms 
plan enrollment for millions of consumers.  Key factors 
in the Medicare and Medicaid programs,  
that contributed to recovery of the website included 
and public health programs.  Key focus areas for our 
adopting a badgeless culture for the project, wherein 
marketplace oversight include payment accuracy, 
all CMS staff and contractors worked together as a 
eligibility, management and administration, and 
team, and a practice of ruthless prioritization that 
security.  In developing our work plan, we coordinate 
aligned work efforts with the most important and 
with the Government Accountability Office and other 
achievable goals.  CMS recovered the website for high 
Federal and State oversight agencies.   
consumer use within 2 months and adopted more 
effective organizational practices.  CMS concurred with 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   37 our recommendation to continue to apply lessons from  Not All of the Colorado Marketplaces Internal Controls  
OTHER  
the HealthCare.gov recovery in its management of the  Were Effective in Ensuring That Individuals Were Enrolled in 
HHS-RELATED 
Federal Marketplace and broader organization.
Qualified Health Plans According to Federal Requirements 
REVIEWS AND  
INVESTIGATIONS  OEI-06-14-00350    February 2016 A-07-14-03199    December 2015
Also the following:
Not All of the District of Columbia Marketplaces Internal 
State-Based Marketplaces
Controls Were Effective in Ensuring That Individuals  
The ACA requires the establishment of a health  Were Enrolled in Qualified Health Plans According to  
insurance exchange (marketplace) in each State and  Federal Requirements 
District of Columbia.  A marketplace is designed to 
A-03-14-03301    February 2016
serve as a one-stop shop at which individuals get 
information about their health insurance options;   The Kentucky Marketplaces Internal Controls Were Generally 
are evaluated for eligibility for a QHP and, when  Effective in Ensuring That Individuals Were Enrolled in 
applicable, eligibility for insurance affordability 
Qualified Health Plans According to Federal Requirements 
programs; and enroll in the QHP of their choice.   
A previous OIG review found that not all internal  A-04-14-08036    October 2015
controls implemented by the Federally facilitated  Not All of the Minnesota Marketplaces Internal Controls  
marketplace and the State marketplaces in California 
Were Effective in Ensuring That Individuals Were Enrolled in 
and Connecticut were effective in ensuring that 
Qualified Health Plans According to Federal Requirements 
individuals were enrolled in QHPs according to Federal 
requirements.  The reviews below are part of an  A-05-14-00043    February 2016
ongoing series that looks at seven State marketplaces  The Vermont Marketplaces Internal Controls Were Not  
across the Nation and determines whether their 
Always Effective in Ensuring That Individuals Were Enrolled in 
marketplaces internal controls were effective in 
Qualified Health Plans According to Federal Requirements 
ensuring that individuals were enrolled in QHPs 
according to Federal requirements. A-01-14-02507    March 2016
Not All of the Washington Marketplaces Internal Controls 
Were Effective in Ensuring That Individuals Were Enrolled in 
Qualified Health Plans According to Federal Requirements 
A-09-14-01006    January 2016
We found that not all of the internal controls for  
the marketplaces in Colorado, District of Columbia, 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   38 Minnesota, Vermont, or Washington were effective   enrollees with the IRS when making these payments.  
OTHER  
in ensuring that individuals were enrolled in QHPs  We found that CMS could not ensure that APTC 
HHS-RELATED 
according to Federal requirements.  Kentuckys internal  payments made to QHP issuers were only for enrollees 
REVIEWS AND  
controls were generally effective.  Internal controls  who had paid their premiums.  CMS:  (1) relied on each 
INVESTIGATIONS 
were not effective in determining or verifying eligibility  QHP issuer to verify that enrollees paid their monthly 
of applicants, resolving inconsistencies in eligibility  premiums and to attest that APTC payment information 
data, or maintaining and updating eligibility and  was accurate, and (2) had sole responsibility for ensuring 
enrollment data.  In addition, internal controls in  that APTC payments were made only for enrollees who 
Colorado, District of Columbia, and Vermont related   had paid their premiums and did not share these data 
to verifying information were not effective, and  for enrollees with the IRS.
Colorados internal controls related to obtaining 
CMS concurred with our recommendation to establish 
certain data were ineffective.  
policies and procedures to calculate APTC payments 
As applicable, the marketplaces generally agreed with  without relying solely on QHP issuers attestations that 
either our findings or our recommendations that they  enrollees have paid their premiums.  CMS did not 
take action to improve their internal controls related   indicate concurrence or nonconcurrence with our 
to resolving inconsistencies in eligibility data, to  recommendation that once it implements an automated 
maintaining and updating eligibility and enrollment  process to maintain individual enrollee data it consult 
data, and to verifying applicants eligibility.  Minnesota  with the IRS to explore sharing APTC payment data.  
did not agree with our recommendation that it 
redetermine, if necessary, the eligibility of the sample  A-02-14-02025    January 2016
applicants for whom we determined that verifications 
were not performed according to Federal requirements.
Information Security
Payments and Policies
Public Summary Report:  Connect for Health Colorado 
Generally Protected Personally Identifiable Information on  
CMS Could Not Effectively Ensure That Advance Premium  
Its Health Insurance Exchange Websites and Databases but 
Tax Credit Payments Made Under the Affordable Care Act 
Could Continue To Improve Information Security Controls 
Were Only for Enrollees Who Paid Their Premiums 
This public summary report provides an overview of 
The objectives of our review were to determine 
the results of our audit of the information security 
whether:  (1) CMS had a process in place to ensure 
controls at Colorados health insurance exchange, 
that advance premium tax credit (APTC) payments 
Connect for Health Colorado (C4HCO).  We found that 
were made only for enrollees who paid their monthly 
C4HCO implemented security controls over its websites 
premiums, and (2) CMS shared APTC payment data for 
and databases, but improvements are still needed to 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   39 fully comply with Federal requirements and to increase  expansion and services, Medicare payment and 
OTHER  
protection of personally identifiable information.  As of  delivery reform, and Medicare and Medicaid program 
HHS-RELATED 
November 2014, C4HCO had not updated the system  integrity.
REVIEWS AND  
security plans supporting policies or ensured that 
INVESTIGATIONS  vulnerabilities identified during prior scans were  Health Reform Oversight Plan Fiscal Year 2015     
2015 February
mitigated in a timely manner.  We also identified 
numerous weaknesses regarding user access 
administration and inadequate security settings during 
our database security scans.  Moreover, C4HCO had 
not performed incident response testing.  
C4HCO concurred with our detailed recommendations 
and described corrective actions that it had taken or 
planned to take.  Based on the evidence C4HCO 
provided, we determined that it has successfully 
remediated the issues related to the system security 
plan and incident response testing and has partially 
remediated the issues related to the application 
production databases and vulnerability mitigation.
A-07-15-00454    February 2016
Health Reform Oversight Plan
This FY 2015 Health Reform Oversight Plan (the Plan) 
describes OIGs current and planned efforts to oversee 
the implementation and management of HHSs 
programs under the ACA.  The Plan outlines OIGs key 
tactical considerations, key focus areas, and target 
timeframes for issuing reports on reviews related to 
the Marketplaces.  Key focus areas for ongoing and 
potential work include the Marketplaces, Medicaid 
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   40   
sn
eo
x
i Appendix A:  Questioned Costs and Funds To Be Put to Better Use 
it
da
nz The following tables summarize OIGs monetary recommendations and HHS responses to them.  This information is 
ei provided in accordance with the Inspector General Act,  5(a)(8) and (a)(9) (5 U.S.C. App.  5(a)(8) and (a)(9)), and 
n
p the Supplemental Appropriations and Rescissions Act of 1980.  
a
p
g
Ar
Audit Reports With Questioned Costs
O
  Questioned costs are those questioned by OIG audits because of an alleged violation of a provision of a law, regulation, 
G contract, grant, or other agreement governing the expenditure of funds.  Costs are questioned because the expenditure 
I was not supported by adequate documentation or because the expenditure was unnecessary or unreasonable.  OIG 
O includes those questioned costs that HHS program officials, in management decisions, have agreed should not be 
charged to the Federal Government, commonly referred to as disallowed costs, as part of the expected recoveries  
in the Accomplishments section at the beginning of the Semiannual Report.  Superscripts indicate end notes.
Table 1  Audit Reports with Questioned Costs
Reports Dollar Value Questioned Dollar Value Unsupported
Section 1
Reports for which no management decisions had been  171 $732,926,000 $46,825,000
made by the beginning of the reporting period1
Reports issued during the reporting period 58 $353,261,000 $1,155,000
Total Section 1 229 $1,086,187,000 $47,980,000
Section 2
Reports for which management decisions  
were made during the reporting period2, 3
Disallowed costs 136 *$598,018,000    $27,226,000
Costs not disallowed 3 $54,590,000  $1,454,000
Total Section 2 139 $652,608,000 $28,680,000
*Audit receivables (expected recoveries).
HHHHSS  OOIIGG  SSHeeHmmSii aaOnnInnGuu Saaell  mRReeiappnoonrrttu  ttaool   RCCeoopnnoggrrrtee tssoss   C      o    ||n    g      r  eOOsccstt  oo  bb  |ee  rr     11 O,,  22c00to11b55e  r   MM1,aa 2rr0cc1hh5  33 11 ,,M  2200ar11c66h     31, 2016   414411 Reports Dollar Value Questioned Dollar Value Unsupported
Section 3
Reports for which no management decisions had   90 $433,579,000 $19,300,000
APPENDIXES been made by the end of the reporting period  
(Sec. 1 minus Sec. 2)
Section 4
Reports for which no management decisions were   46 $165,962,000 $18,145,000
made within 6 months of issuance4
Audit Reports With Funds Recommended To Be Put to Better Use 
The phrase recommendations that funds be put to better use means that funds could be used more efficiently if 
management took action to implement an OIG recommendation through reductions in outlays, deobligation of funds, 
and/or avoidance of unnecessary expenditures.  Table 2 reports HHS program officials decisions to take action on 
these audit recommendations. 
Table 2  Audit Reports with Funds to Be Put to Better Use
Reports Dollar Value
Section 1
Reports for which no management decisions had been made by the beginning of the  9 $15,094,517,000
reporting period1
Reports issued during the reporting period 4 $46,000,000
Total Section 1 13 $15,140,517,000
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   42 Reports Dollar Value
Section 2
Reports for which management decisions were made during the reporting period2, 3
APPENDIXES
Value of recommendations agreed to by management
Based on proposed management action 7 $114,849,000
Based on proposed legislative action $0 
Value of recommendations agreed to by management 1 $5,533,000
Total Section 2 8 $120,382,000
Section 3
Reports for which no management decisions had   5 $15,020,135,000
been made by the end of the reporting period2  
(Sec. 1 minus Sec. 2)
End Notes
Table 1 End Notes
1  The opening balance was adjusted upward by $213.5 million because of a reevaluation of previously issued 
recommendations. 
2 Revisions to previously reported management decisions:
  A-02-09-01023 Review of Medicaid Claims Submitted by Continuing Day Treatment Providers in New York State.  
The Department of Appeals Board (DAB) ruling further reduced the disallowed cost to $53,446,805.  CMS 
adjusted grant awards accordingly by $30,920,124.
  A-07-10-02775 Palmetto Government Benefits Administrator Did Not Always Refer Medicare Cost Reports  
and Reconcile Outlier Payments in Jurisdictions 11.  Subsequent review by CMS determined that the 3-year 
deadline for reopening the cost report had passed and there were no indications of fraud.  Costs totaling  
$1,641,927 were allowable.  
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   43   A-04-13-00093 Medicare Compliance Review of Methodist Healthcare for the Period January 1, 2011, Through 
June 30, 2012.  Subsequent review by CMS and OIG determined that the overpayment amount of $5,893,302 
should have been $4,948,753.  As a result, $944,549 was determined to be allowable cost.    
  A-04-07-00033 Review of CIGNA Government Services Durable Medical Equipment Regional Carrier Medicare 
APPENDIXES
Termination Cost Vouchers for the Period October 1, 2006, Through October 31, 2007.  CMS subsequent review  
of supporting document provided by CIGNA reduced disallowed cost by $922,108.  
  Not detailed are net reductions to previously disallowed management decisions totaling $3.1 million.
3  Included are management decisions to disallow $69.6 million in questioned costs that were identified by non-Federal 
auditors in audits of State and local governments, colleges and universities, and nonprofit organizations receiving 
Federal awards conducted in accordance with OMB Circular A-133.  OIG is currently responsible for ensuring that 
work performed by these non-Federal auditors complies with Federal audit standards; accordingly, OIG tracks, 
resolves, and reports on recommendations in these audits.
4  Because of administrative delays, some of which were beyond management control, resolution of the following  
46 audits was not completed within 6 months of issuance of the reports; however, management has informed us 
that the agency is working to resolve the outstanding recommendations before the end of the next semiannual 
reporting period: 
CIN: A-01-02-00006  R  EVIEW OF RATE SETTING METHODOLOGY FOR MEDICAID SCHOOL BASED HEALTH  
SERVICESCT, MAY 2003, $32,780,146
CIN: A-01-14-02503  R  EVIEW OF MD STATE AGENCY PROCESSES FOR DESIGN & IMPLEMENTATION OF THE  
STATES HEALTH INSURANCE EXCHANGE, MAR 2015, $28,400,000
CIN: A-07-13-01125  MEDICARE PART C UNLAWFULLY PRESENT ENROLLEES, APR 2014, $26,150,043
CIN: A-01-12-02507  R  EVIEW OF CONNECTICUTS TITLE IV-E ADOPTION ASSISTANCE MAINTENANCE PAYMENTS, 
NOV 2013, $17,499,083
CIN: A-06-13-00038  C  HILDCARE DEVELOPMENT FUND: TARGETED FUNDS REVIEW IN TEXAS, AUG 2014, 
$14,967,129
CIN: A-03-12-00004  REVIEW OF HORIZONS 2009 AND 2010 BONA FIDE SERVICE FEES, MAR 2013, $4,344,417
CIN: A-02-12-02012  N  EW YORK IMPROPERLY CLAIMED SOME CHILDCARE AND DEVELOPMENT TARGETED FUNDS, 
JUL 2015, $3,827,836
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   44 CIN: A-05-13-00014  O  HIO EXCEEDED THE 5-PERCENT LIMIT FOR CLAIMING CHILDCARE DEVELOPMENT FUND 
ADMINISTRATIVE EXPENDITURES, NOV 2013, $3,164,630
CIN: A-03-13-00024  R  EVIEW OF NEW ORLEANS REGIONAL PHYSICIAN HOSPITAL ORGANIZATION, INC.S 2009, 
APPENDIXES 2010, AND 2011 BONA FIDE SERVICE FEES, APR 2014, $2,880,698
CIN: A-03-13-00025  R  EVIEW OF UAB HEALTH SYSTEMS 2009, 2010, AND 2011 BONA FIDE SERVICE FEES, JAN 
2014, $2,812,109
CIN: A-03-13-00026  R  EVIEW OF USABLE MUTUALS (ARKANSAS BLUE CROSS BLUE SHIELD) 2009, 2010, AND 2011 
BONA FIDA SERVICE FEES, JAN 2014, $2,763,821
CIN: A-03-11-00002  REVIEW OF NEW ENGLAND JOINT ENTERPRISE 2009 DIR REPORTS, APR 2012, $2,710,732
CIN: A-03-12-00006  REVIEW OF TAHMOS 2009 AND 2010 BONA FIDE SERVICE FEES, MAR 2013, $2,355,532
CIN: A-03-13-00020  R  EVIEW OF CAPITAL DISTRICT PHYSICIANS HEALTH PLAN, INC.S 2009, 2010, AND 2011 BONA 
FIDE SERVICE FEES, JAN 2014, $2,070,605
CIN: A-03-12-00007  REVIEW OF ARCADIANS 2009 AND 2010 BONA FIDE SERVICE FEES, FEB 2013, $2,048,967
CIN: A-03-12-00005  REVIEW OF WINDSORS 2009 AND 2010 BONA FIDE SERVICE FEES, JAN 2013, $1,948,737
CIN: A-03-13-00018  R  EVIEW OF AMERIGROUP CORPORATIONS 2009, 2010, AND 2011 BONA FIDE SERVICE FEES, 
JAN 2014, $1,943,251
CIN: A-03-13-00019  R  EVIEW OF BLUECROSS BLUESHIELD OF SOUTH CAROLINAS 2009, 2010, AND 2011 BONA 
FIDE SERVICE FEES, DEC 2013, $1,799,096
CIN: A-07-11-06013  I NDIRECT COSTS CLAIMED AS DIRECT COSTSUNIVERSITY OF COLORADO DENVER, JUN 2013, 
$1,419,524
CIN: A-03-12-00008  REVIEW OF XL HEALTH DIR, JAN 2013, $1,410,342
CIN: A-03-13-00021  R  EVIEW OF FALLON COMMUNITY HEALTH PLANS 2009, 2010, AND 2011 BONA FIDE SERVICE 
FEES, JAN 2014, $1,079,578
CIN: A-05-12-00089   T HE COUNCIL ON RURAL SERVICE PROGRAMS, INC., CLAIMED UNALLOWABLE HEAD START 
COSTS, NOV 2013, $1,074,352
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   45 CIN: A-03-13-00022  R  EVIEW OF MD CARE, INC.S 2009, 2010, AND 2011 BONA FIDE SERVICE FEES, JAN 2014, 
$1,040,501
CIN: A-03-13-00023  R  EVIEW OF NATIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATIONS 2009, 2010, AND 2011 
APPENDIXES BONA FIDE SERVICE FEES, JAN 2014, $957,921
CIN: A-02-11-02020  R  EVIEW OF ACTION FOR A BETTER COMMUNITY, INC. CSBG ARRA COSTS CLAIMED BY NEW 
YORK STATE, SEP 2013, $795,608
CIN: A-09-11-01007  REVIEW OF CSBG RECOVERY ACT COSTS CLAIMED BY HI FOR HCAP, FEB 2013, $513,649
CIN: A-04-13-01024  A  LLOWABILITY OF SELECTED COSTS CHARGED TO FEDERAL GRANTS AND CONTRACTS UNC, 
JUN 2014, $352,843
CIN: A-01-11-02510  REVIEW OF CT CSBG RECOVERY ACT COSTS CLAIMED, APR 2013, $314,605
CIN: A-01-10-02505  RESULTS OF LIMITED SCOPE REVIEW OF CTE, INC., MAY 2011, $293,870
CIN: A-02-11-02015  R  EVIEW OF INSEC, INC. CSBG ARRA COSTS CLAIMED BY THE COMMONWEALTH OF PUERTO 
RICO, APR 2013, $285,412
CIN: A-02-11-02017  N  EW JERSEY CLAIMED UNALLOWABLE COMMUNITY SERVICES BLOCK GRANT COSTS 
INCURRED BY CHECK-MATE INC., UNDER THE RECOVERY ACT, AUG 2014, $246,359
CIN: A-09-09-00045  R  ISK ADJUSTMENT DATA VALIDATION OF PAYMENTS MADE TO PACIFICARE OF CALIFORNIA 
FOR CALENDAR YEAR 2007 (CONTRACT H0543), NOV 2012, $224,388
CIN: A-06-12-00057  C  HILDCARE DEVELOPMENT FUND: TARGETED FUNDS REVIEW IN LOUISIANA, SEP 2013, 
$221,578
CIN: A-05-12-00012  REVIEW OF IL CSBG RECOVERY ACT COSTS CLAIMEDROCKFORD, JUL 2013, $205,296
CIN: A-06-09-00012  RISK ADJUSTMENT DATA VALIDATIONPACIFICARE H4590, MAY 2012, $183,247
CIN: A-04-11-01004  N  ORTHEAST FLORIDA COMMUNITY ACTION AGENCY, INC.S CSBG FUNDS AWARDED UNDER 
THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009, SEP 2012, $165,795
CIN: A-04-11-01008  F LORIDAS ADMINISTRATION OF CSBG RECOVERY ACT PROGRAM AND COSTS CLAIMED BY 
CENTRAL FLORIDA COMMUNITY ACTION AGENCY, INC., APR 2013, $160,404
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   46 CIN: A-07-11-02766  R  EVIEW OF WY CSBG RECOVERY ACT COSTS CLAIMEDCARBON COUNTY, AUG 2013, 
$143,588
CIN: A-09-11-01013  R  EVIEW OF OREGONS HOUSING AND COMMUNITY SERVICES DEPARTMENT, APR 2013, 
APPENDIXES $115,911
CIN: A-06-11-00058  R  EVIEW OF CSBG ARRA COSTS CLAIMED BY CROWLEYS RIDGE DEVELOPMENT COUNCIL, AUG 
2012, $115,420
CIN: A-07-12-02779  REVIEW OF NATRONA COUNTY CSBG RECOVERY ACT COSTS CLAIMED, JUN 2013, $104,971
CIN: A-02-11-02000  DIRECT COST REVIEWSUNY ALBANY, OCT 2011, $27,384
CIN: A-09-11-01014  R  EVIEW OF CSBG RECOVERY ACT COSTS CLAIMED BY HI FOR THE HAWAII COUNTY ECONOMIC 
OPPORTUNITY COUNCIL, JUL 2012, $22,602
CIN: A-05-11-00053  T HE COLUMBUS URBAN LEAGUE CLAIMED SOME UNALLOWABLE COSTS TO HEAD START, SEP 
2012, $13,102
CIN: A-07-13-03194  REVIEW OF CCDF TARGETED FUND IN COLORADO, DEC 2014, $4,543
CIN: A-03-12-00250  AUDIT OF LANCASTER COUNTY COMMUNITY ACTION PROGRAM, NOV 2013, $2,813
  TOTAL CINS:   46
       TOTAL AMOUNT:   $165,962,000
Table 2 End Notes
1 T  he opening balance was adjusted upward by $49.2 million because of reevaluation of previously issued 
recommendations. 
2  Because of administrative delays, some of which were beyond management control, 3 of the 5 audits open at the 
end of the period were not resolved within 6 months of issuance of the reports.  OIG is working with management to 
reach resolution on these recommendations before the end of the next semiannual reporting period:
CIN: A-05-12-00020  C  OMPARISON OF SURGICAL SERVICES PROVIDED IN THE ASC SETTING TO OTHER OUTPATIENT 
SETTINGS, APRIL 2014, $15,000,000,000
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   47 CIN: A-07-13-02795  R  EVIEW OF PALMETTO MEDICARE OUTLIER PROCESSING TIMELINESS FOR J1, JULY 2015, 
$15,792,301
CIN: A-05-06-00023  UNDISTRIBUTABLE CHILD SUPPORT COLLECTIONSMN, SEP 2006, $28,240
APPENDIXES
  TOTAL CINS:   3
       TOTAL AMOUNT:  $15,015,821,000
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   48 Appendix B:  Peer Review Results
The Inspector General Act of 1978, as amended, requires OIGs to report the results of peer reviews of their operations 
conducted by other OIGs, the date of the last peer review, outstanding recommendations from peer reviews, and  
APPENDIXES
peer reviews conducted by the OIG of other OIGs in the semiannual period.  Peer reviews are conducted by  
member organizations of the Council of the Inspectors General on Integrity and Efficiency (CIGIE).  The required  
information follows.
Office of Audit Services 
During this semiannual reporting period, no peer reviews involving the Office of Audit Services (OAS) were completed.  
Listed below is information concerning OASs peer review activities during prior reporting periods.
OAS Date Reviewing Office Office Reviewed
May 2015 Department of Transportation HHS OIG, OAS
The system of quality control for the audit organization of HHS OIG in effect for the year ending September 30, 2014, 
has been suitably designed and complied with to provide HHS OIG with reasonable assurance of performing and 
reporting in conformity with applicable professional standards in all material respects.  Federal audit organizations  
can receive a rating of pass, pass with deficiencies, or fail.  HHS OIG received a peer review rating of pass.
OAS Date Reviewing Office Office Reviewed
December 2015 HHS OIG, OAS U.S. Department of Agriculture (USDA)
The system of quality control for the audit organization of USDA OIG in effect for the year ending March 31, 2015,  
has been suitably designed and complied with to provide USDA OIG with reasonable assurance of performing and 
reporting in conformity with applicable professional standards in all material respects.  Federal audit organizations  
can receive a rating of pass, pass with deficiencies, or fail.  USDA OIG received a peer review rating of pass.
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   49 Office of Investigations
During this semiannual reporting period, no peer reviews involving Office of Investigations (OI) were completed.  
Listed below is information concerning OIs peer review activities during prior reporting periods.
APPENDIXES
OI Date Reviewing Office Office Reviewed
August 2015 DOL-OIG HHS-OIG, OI
The system of internal safeguards and management procedures for the investigative function of HHS-OIG in effect for 
the year ending September 30, 2015, were in full compliance with the quality standards established by CIGIE and the 
Attorney Generals guidelines
OI Date Reviewing Office Office Reviewed
June 2014 HHS-OIG, OI TIGTA
The system of internal safeguards and management procedures for the investigative function of TIGTA, in effect 
through June 2014, were in full compliance with the quality standards established by CIGIE and the Attorney  
Generals guidelines.
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   50 Appendix C:  Summary of Sanction Authorities
The Inspector General Act of 1978, as amended, specifies requirements for semiannual reports to be made to the 
Secretary for transmittal to Congress.  A selection of other authorities appears below.
APPENDIXES
Program Exclusions
The Social Security Act,  1128 (42 U.S.C.  1320a-7), provides several grounds for excluding individuals and entities 
from participation in Medicare, Medicaid, and other Federal health care programs.  Exclusions are required for 
individuals and entities convicted of the following types of criminal offenses:  (1) Medicare or Medicaid fraud; (2) 
patient abuse or neglect; (3) felonies for other health care fraud; and (4) felonies for illegal manufacture, distribution, 
prescription, or dispensing of controlled substances.  
OIG is authorized to exclude individuals and entities on several other grounds, including misdemeanors for other 
health care fraud (other than Medicare or Medicaid) or for illegal manufacture, distribution, prescription, or 
dispensing of controlled substances; suspension or revocation of a license to provide health care for reasons  
bearing on professional competence, professional performance, or financial integrity; provision of unnecessary or 
substandard services; submission of false or fraudulent claims to a Federal health care program; or engaging in 
unlawful kickback arrangements.
The ACA added another basis for imposing a permissive exclusion, that is, knowingly making, or causing to be made, 
any false statements or omissions in any application, bid, or contract to participate as a provider in a Federal health 
care program, including managed care programs under Medicare and Medicaid, as well as Medicares prescription 
drug program.
Providers subject to exclusion are granted due process rights.  These include a hearing before an administrative law 
judge and appeals to the HHS Departmental Appeals Board and Federal district and appellate courts regarding the 
basis for and the length of the exclusion.
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   51 Civil Monetary Penalties Law
The CMPL of the Social Security Act, 1128A (42 U.S.C.  1320a 7a), imposes penalties, assessments, and exclusion 
from participation in Federal health care programs for engaging in certain activities.  For example, a person who 
APPENDIXES submits, or causes to be submitted, to a Federal health care program a claim for items and services that the person 
knows, or should know, is false or fraudulent is subject to a penalty of up to $10,000 for each item or service falsely or 
fraudulently claimed, an assessment of up to three times the amount falsely or fraudulently claimed, and exclusion.
For the purposes of the CMPL, should know is defined to mean that the person acted in reckless disregard or 
deliberate ignorance of the truth or falsity of the claim.  The law and its implementing regulations also authorize 
actions for a variety of other violations, including submission of claims for items or services furnished by an excluded 
person; requests for payment in violation of an assignment agreement; violations of rules regarding the possession, 
use, and transfer of biological agents and toxins; and payment or receipt of remuneration in violation of the  
anti-kickback statute (42 U.S.C.  1320a 7b(b)).
The ACA added more grounds for imposing CMPs.  These include, among other types of conduct, knowingly making, 
or causing to be made, any false statements or omissions in any application, bid, or contract to participate as a 
provider in a Federal health care program (including Medicare and Medicaid managed care programs and Medicare 
Part D); the ACA authorizes a penalty of up to $50,000 for each false statement, as well as activities relating to 
fraudulent marketing by managed care organizations, their employees, or their agents. 
Patient Dumping
The Social Security Act,  1867 (42 U.S.C.  1395dd), provides that when an individual goes to the emergency room  
of a Medicare-participating hospital, the hospital must provide an appropriate medical screening examination to 
determine whether that individual has an emergency medical condition.  If an individual has such a condition, the 
hospital must provide either treatment to stabilize the condition or an appropriate transfer to another medical facility.
If a transfer is ordered, the transferring hospital must provide stabilizing treatment to minimize the risks of transfer 
and must ensure that the receiving hospital agrees to the transfer and has available space and qualified personnel  
to treat the individual.  In addition, the transferring hospital must effect the transfer through qualified personnel  
and transportation equipment.  Further, a participating hospital with specialized capabilities or facilities may not  
refuse to accept an appropriate transfer of an individual who needs services if the hospital has the capacity to treat 
the individual.
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   52 OIG is authorized to collect CMPs of up to $25,000 against small hospitals (fewer than 100 beds) and up to $50,000 
against larger hospitals (100 beds or more) for each instance in which the hospital negligently violated any of the 
section 1867 requirements.  In addition, OIG may collect a penalty of up to $50,000 from a responsible physician  
for each negligent violation of any of the section 1867 requirements and, in some circumstances, may exclude a 
APPENDIXES
responsible physician.
Anti-Kickback Statute and Civil False Claims Act Enforcement Authorities
The Anti-Kickback Statute  The anti-kickback statute authorizes penalties against anyone who knowingly and willfully 
solicits, receives, offers, or pays remuneration, in cash or in kind, to induce or in return for (1) referring an individual  
to a person or an entity for the furnishing, or arranging for the furnishing, of any item or service payable under  
the Federal health care programs or (2) purchasing, leasing, or ordering, or arranging for or recommending the 
purchasing, leasing, or ordering, of any good, facility, service, or item payable under the Federal health care programs.  
Social Security Act,  1128B(b) (42 U.S.C.  1320a-7b(b)).
Individuals and entities that engage in unlawful referral or kickback schemes may be subject to criminal penalties 
under the general criminal anti-kickback statute; a CMP under OIGs authority pursuant to the Social Security Act,  
 1127(a)(7) (42 U.S.C.  1320a-7a); and/or program exclusion under OIGs permissive exclusion authority under  
the Social Security Act,  1128(b)(7) (42 U.S.C.  1320a-7(b)(7)).
The False Claims Act  Under the False Claims Act, as amended by the False Claims Amendments Act of 1986 (FCA)  
(31 U.S.C.  37293733), a person or an entity is liable for up to treble damages and a penalty between $5,500 and 
$11,000 for each false claim it knowingly submits, or causes to be submitted, to a Federal program.  Similarly, a person 
or an entity is liable under the FCA if it knowingly makes or uses, or causes to be made or used, a false record or 
statement to have a false claim paid.
The FCA defines knowing to include not only the traditional definition but also instances in which the person acted 
in deliberate ignorance or reckless disregard of the truth or falsity of the information.  Under the FCA, no specific 
intent to defraud is required.  Further, the FCA contains a qui tam, or whistleblower, provision that allows a private 
individual to file a lawsuit on behalf of the United States and entitles that whistleblower to a percentage of any fraud 
recoveries.  The FCA was again amended in 2009 in response to recent Federal court decisions that narrowed the laws 
applicability.  Among other things, these amendments clarify the reach of the FCA to false claims submitted to 
contractors or grantees of the Federal Government.
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   53 Appendix D:   Reporting Requirements in the  
Inspector General Act of 1978 
APPENDIXES
The reporting requirements of the Inspector General Act of 1978, as amended, are listed in the following table along 
with the location of the required information.
Section Requirement Location
Section 4
(a)(2) Review of legislation and regulations "Other HHS-Related Issues"  section  
Section 5
(a)(1) Significant problems, abuses, and deficiencies Throughout this report
(a)(2) Recommendations with respect to significant problems, abuses, and  Throughout this report
deficiencies
(a)(3) Prior significant recommendations on which corrective action has  OIG Compendium of Unimplemented 
not been completed Recommendations
(a)(4) Matters referred to prosecutive authorities "Legal and Investigative Activities" section
(a)(5) Summary of instances in which information requested   None
by OIG was refused
(a)(6) List of audit reports Submitted to the Secretary under separate cover
(a)(7) Summary of significant reports Throughout this report
(a)(8) Statistical Table 1  Reports With Questioned Costs Appendix A
(a)(9) Statistical Table 2  Funds Recommended To Be Put to Better Use Appendix A
(a)(10) Summary of previous audit reports without management decisions Appendix A
(a)(11) Description and explanation of revised management decisions Appendix A
(a)(12) Management decisions with which the Inspector General disagrees None
(a)(13) Information required by the FISMA Reported annually in the spring Semiannual Report 
to Congress, "Other HHS-Related Issues" section
(a) Results of peer reviews of HHS-OIG conducted by other OIGs or the  Appendix B
(14)-(16) date of the last peer review, outstanding recommendations from 
peer reviews, and peer reviews conducted by HHS-OIG of other OIGs
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   54 Section Requirement Location
Other reporting requirements
845 Significant contract audits required to be reported pursuant to the  "Other HHS-Related Issues" section
APPENDIXES National Defense Authorization Act for FY 2008 (P.L. No. 110-181),  
 845.
205 Pursuant to HIPAA (P.L. No. 104-191),  205, the Inspector General is  Reported annually in the fall Semiannual Report.  
required to solicit proposals annually via a Federal Register notice  Appendix F 
for developing new and modifying existing safe harbors to the 
anti-kickback statute of the Social Security Act,  1128(b) and for 
developing special fraud alerts.  The Inspector General is also 
required to report annually to Congress on the status of the 
proposals received related to new or modified safe harbors.
1553 Pursuant to the American Recovery and Reinvestment Act of 2009,   "Other HHS-Related Issues" section
1553, OIG reports to Congress the retaliation complaint 
investigations it decided not to conduct or continue during the 
period.
HHS OIG Semiannual Report to Congress      |      October 1, 2015  March 31, 2016   55 U.S. Department of Health & Human Services 
Office of Inspector General 
http://oig.hhs.gov
.