Department of Health and Human Services 
OFFICE OF 
 
INSPECTOR GENERAL 
 
 
 
 
 
 
C L
  OMMUNITY  IVING 
 
A S
SSISTANCE  ERVICES AND 
 
 
S P : 2011
UPPORTS  ROGRAM     
 
 
R C  
EPORT TO  ONGRESS
 
 
 
 
 
 
 
 
 
 
Daniel R. Levinson  
Inspector General 
 
December 2011 
OEI-04-11-00450   
   
THE CLASS PROGRAM:  2011 REPORT TO CONGRESS 
 
OEI-04-11-00450 
 
CLASS PROGRAM STATUS  
 
On October 14, 2011, the Secretary of Health and Human Services (HHS) informed 
Congress that HHS had not identified a Community Living Assistance Services and 
Supports (CLASS) program benefit plan that is both actuarially sound for the next         
75 years and consistent with the requirements of Title VIII of the Patient Protection and 
Affordable Care Act of 2010 (the CLASS Act).  Following this announcement, HHS 
suspended program implementation activities.  
 
WHY WE DID THIS STUDY 
 
Effective January 1, 2011, the CLASS Act established the CLASS program as a federally 
administered, voluntary insurance program to help working adults cover some costs of 
long-term-care services and supports.  The CLASS Act requires the HHS Office of 
Inspector General (OIG) to submit an annual report to the Secretary and Congress on the 
overall progress of the CLASS program and the existence of waste, fraud, and abuse in 
the program.  Each report must include findings in four areas:  providing cash benefits; 
determining eligibility; providing quality assurance and protecting against waste, fraud, 
and abuse; and recouping unpaid and accrued benefits.   
 
HOW WE DID THIS STUDY 
 
We reviewed progress in the development of the CLASS program from March 23, 2010, 
when the CLASS Act was enacted, through October 14, 2011, when program activities 
were suspended.  This review focuses primarily on the Administration on Agings (AoA) 
activities in the four areas specified in the CLASS Acts OIG annual reporting 
requirement after January 2011, when AoA became responsible for developing the 
program.  We obtained data about AoAs progress from interviews with AoA senior 
management, a questionnaire completed by AoA staff, and documents provided by AoA 
to support interview and questionnaire responses.  
 
WHAT WE FOUND 
 
AoA focused most of its efforts on developing at least three actuarially sound benefit plan 
alternatives, as required by the CLASS Act.  The CLASS Act requires the Secretary to 
designate one of these benefit plan alternatives as the CLASS Independence Benefit Plan 
by October 1, 2012.  As stated above, the Secretary informed Congress of the status of 
the benefit plan on October 14, 2011.   
 
WHAT WE RECOMMEND 
 
The Secretary has not designated a viable benefit plan.  Therefore, we have no 
recommendations regarding program progress or the existence of waste, fraud, and abuse.  
OIG will determine the most appropriate way to meet OIGs CLASS Act reporting 
requirements in future years based on the programs status.  AoA had no comments on 
the report.
   
   
 
TABLE OF CONTENTS 
 
Objective ......................................................................................................1 
Status of the CLASS Program .....................................................................1 
Background ..................................................................................................1 
Methodology ..............................................................................................12 
Findings......................................................................................................14 
I.  Providing cash benefits ..............................................................14 
II.  Determining eligibility .............................................................17 
III.  Providing quality assurance and protecting against waste,      
fraud, and abuse .............................................................................18 
IV.  Recouping unpaid and accrued benefits ..................................19 
Conclusion .................................................................................................19 
Agency Comments and Office of Inspector General Response .................19 
Appendixes ................................................................................................20 
A:  OIG Reporting Requirement in the CLASS Act ......................20 
B:  Agency Comments ...................................................................21 
Acknowledgments......................................................................................22 
 
   
   
OBJECTIVE 
To report progress in the development of the Community Living 
Assistance Services and Supports (CLASS) program. 
STATUS OF THE CLASS PROGRAM 
On October 14, 2011, the Secretary of Health and Human Services (HHS) 
informed Congress that she does not see a viable path for implementing 
the CLASS program.1  This decision was based on results presented in the 
HHS report on the actuarial, marketing, and legal analyses of the CLASS 
program.2  Following this announcement, HHS suspended program 
implementation activities.3  
Title VIII of the Patient Protection and Affordable Care Act of 2010 (the 
CLASS Act) requires the HHS Office of Inspector General (OIG) to 
submit an annual report to the Secretary and Congress on the overall 
progress of the CLASS program and the existence of waste, fraud, and 
abuse in the program.  Each report must include findings in four areas:  
providing cash benefits; determining eligibility; providing quality 
assurance and protecting against waste, fraud, and abuse; and recouping 
unpaid and accrued benefits.4   
This report describes the Administration on Agings (AoA) activities prior 
to program suspension.  OIG will determine the most appropriate way to 
meet OIGs CLASS Act reporting requirements in future years based on 
the programs status. 
BACKGROUND 
Effective January 1, 2011, the CLASS Act established the CLASS 
program as a federally administered, voluntary insurance program to help 
working adults cover some costs of their long-term-care (LTC) services 
and supports.  LTC services assist primarily individuals with chronic 
illness or disabilities in their daily activities.5   Nearly 70 percent of 
 
1 Kathleen Sebelius, Letter to Congress, October 14, 2011.  Accessed at 
http://www.hhs.gov/secretary/letter10142011.html on October 15, 2011. 
2 HHS, A Report on the Actuarial, Marketing, and Legal Analyses of the CLASS Program.  Accessed at 
http://aspe.hhs.gov/daltcp/reports/2011/class/index.pdf on October 15, 2011. 
3 Kathleen Sebelius, HealthCare Blog:  The CLASS Program, October 14, 2011.  Accessed at 
http://www.healthcare.gov/blog/2011/10/class10142011.html on October 18, 2011. 
4 Public Health Service Act (PHSA)  3209. 
5 Centers for Medicare & Medicaid Services (CMS), What is Long-Term Care?  Accessed at 
http://www.medicare.gov/LongTermCare/Static/Home.asp on October 4, 2011.   
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Americans over age 65 will require LTC services at some point in their 
life.6   
The CLASS program is intended to allow working individuals age 18 and 
older to purchase insurance that can help pay for future LTC services if 
they meet all eligibility requirements, including having qualifying 
functional limitations.7  Individuals with qualifying functional limitations: 
  are unable to perform at least two or three activities of daily living 
(ADLs) without substantial assistance,8, 9 
  require substantial supervision to protect against threats to their health 
and safety because of substantial cognitive impairment, or 
  have a level of functional limitation that is determined under 
regulations prescribed by the Secretary to be similar to the levels 
described above.10  
The purpose of the CLASS program is to:   
  provide tools to allow individuals to maintain their personal and 
financial independence while living in the community,  
  establish infrastructure to help address the Nations community living 
assistance needs,  
  alleviate burdens on family caregivers, and  
  address the tendency to place individuals with functional limitations in 
institutional settings by providing a financial mechanism to support 
community living.11   
The CLASS program should increase access to in-home and community 
LTC services through a cash benefit that may enable eligible beneficiaries 
to avoid nursing homes and other more expensive care options for as long 
as possible.  This may reduce reliance on Medicaid, which is jointly 
 
6 Prudential Research Report, Long-Term Care Cost Study, 2010.  Accessed at 
http://www.hcbs.org/files/198/9879/LTCCostStudy.pdf on September 6, 2011.   
7 PHSA  3201 and 3204(c) (describing individuals eligible to enroll); 3205(b) and 3202(6) (defining eligible 
beneficiary). 
8 The CLASS Act states that the minimum number of ADLs may be two or three.  The Secretary will determine 
the minimum number and define the term substantial assistance.  PHSA  3203(a)(1)(C)(i).   
9 ADLs include bathing, dressing, using the toilet, transferring (e.g., to or from a bed or chair), caring for 
incontinence, and eating.  PHSA  3202(3). 
10 PHSA  3203(a)(1)(C). 
11 PHSA  3201. 
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financed by the Federal and State governments, to pay for LTC services.12  
The Congressional Budget Office (CBO) estimated that the CLASS 
program would result in $2 billion in savings to the Medicaid program by 
2019.  This estimate was based on the assumption that the program would 
collect premiums in 2011 and pay benefits in 2016.13 
Overview of LTC Services 
LTC Services.  LTC services include a variety of health and social services 
(e.g., assistive technology, meal delivery), but do not include medical 
treatments for acute and chronic conditions.14, 15  LTC services often 
involve nonskilled assistance with ADLs but can also involve skilled 
assistance (e.g., providing physical therapy or monitoring a serious 
illness).  LTC services can be offered in institutional settings (e.g., nursing 
homes) or in the home by hired attendants (e.g., home health aides) or 
family members.16  LTC services are also provided in community settings 
(e.g., community centers offering adult day services).17 
The annual costs of LTC services vary depending on the type and amount 
of care, the service provider, and the location.  For example, care at home 
provided by a home health aide can cost $21 an hour.18  The national 
median yearly rate for a room at an assisted living facility is 
 
12 The Federal Government paid 66 percent and State governments paid 34 percent of total Medicaid 
expenditures in 2009.  National Health Policy Forum, The Basics:  Medicaid Financing, February 4, 2011.  
Accessed at http://www.nhpf.org/library/the-basics/Basics_MedicaidFinancing_02-04-11.pdf on                          
August 29, 2011. 
13 This estimate was based on the assumption that 3.5 percent of the adult population would participate in the 
program.  CBO, Letter to the Honorable George Miller, Chairman of the Committee on Education and Labor, 
November 25, 2009.  Accessed at 
http://www.cbo.gov/ftpdocs/107xx/doc10769/CLASS_Additional_Information_Miller_letter.pdf on          
August 29, 2011. 
14 National Clearinghouse for Long-Term Care Information, Definitions & Need for LTC.  Accessed at 
http://www.longtermcare.gov/LTC/Main_Site/Understanding/Definition/Index.aspx on October 4, 2011. 
15 Assistive technology is any product or equipment used to increase, maintain, or improve the functional 
capabilities of individuals with disabilities.  National Institutes of Standards and Technology, What is Assistive 
Technology?  Accessed at http://standards.gov/standards_gov/assistiveTechnology.cfm on August 5, 2011. 
16 Home health aides provide nonmedical care in the home for individuals who need assistance with ADLs and 
supervision for individuals with cognitive impairments.  They may be licensed but do not provide medical care.  
Bureau of Labor Statistics, Home Health Aides and Personal and Home Care Aides.  Accessed at 
http://www.bls.gov/oco/ocos326.htm on October 3, 2011. 
17 Adult day services are structured, comprehensive programs provided for less than 24 hours at a community-
based center to care for functionally impaired adults.  National Clearinghouse for Long-Term Care Information, 
Glossary. Accessed at http://www.longtermcare.gov/ltc/Main_Site/Site_Utilities/Glossary.aspx#l on         
October 4, 2011. 
18 National Clearinghouse for Long-Term Care Information, Costs of Care.  Accessed at 
http://www.longtermcare.gov/LTC/Main_Site/Paying/Costs/Index.aspx on September 30, 2011.   
OEI-04-11-00450  The CLASS Program:  2011 Report to Congress  3 
   
   
approximately $39,000.19  The national median rate for a semiprivate 
room in a nursing home or skilled nursing facility is approximately 
$70,000 a year.20 
Medicare Pays for Limited LTC Services.  Four out of five Americans 
incorrectly believe that Medicare provides extensive coverage for LTC 
services.21  However, Medicare accounts for only 23 percent of total LTC 
spending.22  Medicare coverage of LTC services includes only select home 
health care services and limited time in a skilled nursing facility.23, 24  
Medicare coverage of home health services is limited to individuals who 
require part-time skilled nursing care or certain skilled therapy services.25  
The home health benefit also includes services such as home health aide 
services and medical social services.26   
Medicare Part A pays in full for up to 20 days in a skilled nursing facility 
directly following a 3-day hospital stay.27  Beneficiaries must pay 
coinsurance for days 21100.28  Medicare does not cover care in skilled 
nursing facilities after 100 days.29 
 
19 Assisted living facilities provide personal and medical care for those who are not able to live by themselves 
but do not require the constant care provided by nursing homes.  This figure is based on a one-bedroom, single- 
occupancy rate.  Genworth Financial, Executive Summary:  Genworth 2011 Cost of Care Survey.  Accessed at 
http://www.genworth.com/content/etc/medialib/genworth_v2/pdf/ltc_cost_of_care.Par.85518.File.dat/Executive
%20Summary_gnw.pdf on August 4, 2011.   
20 Nursing homes and skilled nursing facilities provide skilled nursing care 24 hours a day.  Ibid.  
21 Kathy Greenlee, Statement before the House Committee on Energy and Commerce Subcommittee on Health, 
March 17, 2011.  Accessed at 
http://republicans.energycommerce.house.gov/Media/file/Hearings/Health/031711/Greenlee.pdf on                     
August 5, 2011. 
22 For this calculation, total LTC spending includes spending on nursing home and home health services.  It 
does not include community-based services, which are financed primarily through Medicaid home- and 
community-based waivers.  Kaiser Commission on Medicaid Facts, Medicaid and Long-Term Care Services 
and Supports, February 2009.  Accessed at http://www.kff.org/medicaid/upload/2186_06.pdf on                       
August 5, 2011. 
23 Home health care is a range of skilled and unskilled health care services provided in the home.  CMS, What 
is Home Health Care?  Accessed at 
http://www.medicare.gov/homehealthcompare/About/GettingCare/WhatisHomeHealthCare.aspx on                     
September 6, 2011. 
24 CMS, Medicare Benefit Policy Manual.  Pub. No. 100-02, ch. 7, 10.1.  Accessed at 
https://www.cms.gov/manuals/downloads/bp102c07.pdf on September 30, 2011.  Social Security Act  
 1812(a)(2)(A). 
25 42 CFR  409.42(c). 
26 42 CFR  409.45.   
27 42 CFR  409.61(b).  CMS, Medicare Benefit Policy Manual, Pub. No. 100-02, ch. 8,  20.1. 
28 42 CFR  409.61(b).  The Medicare Part A beneficiary copayment is $141.50 per day for days 21100 in a 
skilled nursing facility.  HHS, Medicare Premiums and Coinsurance Rates for 2011.  Accessed at 
https://questions.medicare.gov/app/answers/detail/a_id/2305/~/medicare-premiums-and-coinsurance-rates-for-
2011 on August 29, 2011.   
29 Social Security Act  1812(a)(2)(A). 
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Medicare also does not pay for assisted living facilities, retirement 
communities, or adult day services.  Additionally, the Medicare home 
health benefit does not cover transportation services or services with the 
sole purpose of enabling an individual to continue living at home.30      
Medicaid Pays for 40 Percent of All LTC Services.  In 2009, Medicaid 
spent $111.2 billion on LTC services, and this spending is expected to 
increase as the U.S. population ages.31  Medicaid accounts for 40 percent 
of total LTC spending.32  
Medicaid coverage of LTC services varies by State.  Medicaid pays for 
care in nursing facilities if recipients meet financial and functional 
eligibility requirements.33  However, many Americans must first exhaust 
their resources to qualify financially for Medicaid LTC coverage.34  
Medicaid covers adult day services in some States.  Generally, Medicaid 
coverage of home health services includes nursing; home health aides; and 
medical equipment, supplies, and appliances used in the home.35  
Medicaid may also pay for some home modifications.36   
Medicaid waiver programs cover some care-related costs in assisted living 
facilities in some States but do not cover room and board.       
Few People Have Private LTC Insurance.  Only 8 to 10 percent of 
Americans have private LTC insurance coverage.37  Private insurance 
accounts for 9 percent of total LTC spending.38  Age or health status can 
affect the cost of private LTC insurance policies, which often require 
medical underwriting or a review of an applicants health status to 
 
30 CMS, Medicare Benefit Policy Manual.  Pub. No. 100-02, ch. 7  80.2 and 80.4.  Accessed at 
https://www.cms.gov/manuals/downloads/bp102c07.pdf on September 30, 2011. 
31 Greenlee, op. cit.  
32 For this calculation, total LTC spending includes only spending on nursing home and home health services.  
It does not include spending on community-based services, which are financed primarily through Medicaid 
home- and community-based waivers.  Kaiser Commission on Medicaid Facts, op. cit. 
33 Financial and functional eligibility requirements vary by State.  For individuals enrolled in Medicaid and 
Medicare, Medicaid pays for nursing facilities after Medicare coverage is exhausted.  HHS, Understanding 
Medicaid Home and Community Services:  A Primer.  Accessed at http://aspe.hhs.gov/daltcp/reports/primer.pdf 
on August 25, 2011.       
34 National Clearinghouse for Long-Term Care Information, Who Pays for LTC Services?  Accessed at 
http://www.longtermcare.gov/LTC/Main_Site/Paying/Costs/Who_Pays.aspx on August 5, 2011. 
35 42 CFR  440.70(b) and 440.180(b). 
36 Social Security Act  915(c) and CMS, HCBS Waivers Section 915(c).  Accessed at 
https://www.cms.gov/MedicaidStWaivProgDemoPGI/05_HCBSWaivers-Section1915(c).asp on             
October 5, 2011.    
37 Greenlee, op. cit.  
38 For this calculation, total LTC spending only includes spending on nursing home and home health services.  
It does not include spending on community-based services, which are financed primarily through Medicaid 
home- and community-based waivers.  Kaiser Commission on Medicaid Facts, op. cit.    
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determine whether he or she is eligible for coverage.39  Private insurance 
companies use this process to exclude or set higher premiums for 
individuals at the highest risk of needing future LTC services, making it 
difficult for individuals with certain preexisting medical conditions to 
purchase such policies.   
CLASS Program Structure 
The CLASS Act tasks the Secretary with developing, overseeing, and 
administering the CLASS program.  On January 28, 2011, the Assistant 
Secretary for Aging established a CLASS Office responsible for 
developing, overseeing, and administering the CLASS program.40   
The CLASS Office is to coordinate with other Federal departments and 
agencies (e.g., the Department of the Treasury, the Social Security 
Administration, ASPE) to develop and implement the CLASS program.41  
To implement the program, AoA must determine details about enrollment; 
the benefit plan; premiums; cash and service benefits; funding; and 
protections from waste, fraud, and abuse.  
Enrollment.  Actively employed individuals age 18 and older who earn 
wages or income taxable under the Old-Age, Survivors, and Disability 
Insurance Program or the Railroad Retirement Tax Act are eligible to 
enroll in the CLASS program.42  The CLASS Act describes two processes 
for enrollment:  (1) a process for participating employers to automatically 
enroll eligible employees and withhold CLASS premiums through payroll 
deductions; and (2) an alternative process for individuals who are self-
employed, have more than one employer, or have an employer that does 
not participate in automatic enrollment. 43, 44  Individuals must have the 
option to waive enrollment at any time.45   
The CLASS Act prohibits medical underwriting of enrollees, allowing 
individuals with preexisting medical conditions to participate.46   
   
 
39 HHS, Glossary.  Accessed at http://www.healthcare.gov/glossary/M/medicalunderwriting.html on  
October 5, 2011.   
40 76 Fed. Reg. 5178 (Jan. 28, 2011). 
41 Between the enactment of the CLASS Act in March 2010 and January 2011, HHSs Office of the Assistant 
Secretary for Planning and Evaluation (ASPE) led the work on CLASS. 
42 PHSA  3204(c)(1)(3).  Actively employed is defined at PHSA Sec. 3202(2).  Certain individuals (e.g., 
prison inmates and Medicaid recipients who are patients in a hospital or nursing facility) are prohibited from 
enrolling in the CLASS program.  PHSA Sec. 3204(c)(4).      
43 PHSA  3204(a)(1) and (e)(1).   
44 PHSA  3204(a)(2). 
45 PHSA  3204(b). 
46 PHSA  3203(b)(3). 
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The Benefit Plan.  AoA must develop at least three actuarially sound 
benefit plan alternatives.47  Each alternative must include details about 
premiums, benefit amounts, benefit eligibility, and access to advocacy 
services and advice and counseling.48        
The CLASS Act established the CLASS Independence Advisory 
Council.49  The council must evaluate the benefit plan alternatives and 
recommend to the Secretary the plan that best balances price and benefits 
to meet enrollees needs in an actuarially sound manner, while optimizing 
the probability of the long-term sustainability of the program.50  The 
President appoints members of the council.  Upon receiving the councils 
recommendation, the Secretary must designate one actuarially sound 
benefit plan to serve as the CLASS Independence Benefit Plan by   
October 1, 2012.51   
Premiums.  Premiums must be based on an actuarial analysis of the       
75-year costs of the program and must ensure program solvency in this 
period.52  The CLASS Act requires that the monthly premium at 
enrollment generally not change as long as the individual is an active 
enrollee (i.e., is enrolled in the CLASS program and has paid premiums to 
maintain enrollment).53, 54   
The CLASS Act establishes a monthly premium of $5 for actively 
employed full-time students under the age of 22 and individuals with 
incomes that do not exceed the Federal poverty line.55  The CLASS Act 
allows the Secretary to increase premiums if required to maintain program 
solvency.56  However, those premium increases do not apply to active 
enrollees who are 65 and older, have paid premiums for at least 20 years, 
and are not actively employed.57 
Benefit Eligibility.  The CLASS Act requires the Secretary to establish an 
Eligibility Assessment System by January 1, 2012, to provide eligibility 
 
47 PHSA  3203(a)(1). 
48 Ibid. 
49 PHSA  3207(a). 
50 PHSA  3203(a)(2). 
51 PHSA  3203(a)(3). 
52 PHSA  3203(a)(1)(A)(i). 
53 PHSA  3203(b)(1)(A). 
54 PHSA  3202(1). 
55 PHSA  3203(a)(1)(A)(ii)(I).  The $5 premium will be increased by the percentage increase in the Consumer 
Price Index for all urban consumers (U.S. city average) each year after 2009.  PHSA  3203(a)(1)(A)(ii)(II).   
56 PHSA  3203((b)(1)(B)(i).  However, the Secretary must maintain a nominal premium.     
57 PHSA  3203(b)(1)(B)(ii). 
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assessments of active enrollees applying for benefits.58  AoA is responsible 
for assisting the Secretary in meeting this requirement.   
AoA must develop processes to determine benefit eligibility, to appeal 
benefit eligibility denials, and to redetermine benefit eligibility.  Benefit 
eligibility determination and redetermination processes must include 
certification by a licensed health care practitioner.59   
AoA must determine the intervals at which eligible beneficiaries are 
required to submit medical evidence to recertify their eligibility and to 
submit records of benefit expenditures.60 
To become an eligible beneficiary, an active enrollee must have: 
  paid CLASS premiums for at least 60 months;61 
  paid CLASS premiums for at least 24 consecutive months, if a lapse in 
premium payments of more than 3 months has occurred;62  
  met certain minimum earning requirements for a specified time during 
the period he/she is enrolled in the CLASS program;63 and 
  been determined to have a qualifying functional limitation, as certified 
by a licensed health care practitioner, that is expected to last more than 
90 consecutive days.64 
Cash Benefits.  The CLASS Act requires a cash benefit averaging at least 
$50 per day.  That amount varies by benefit levels, which are based on a 
scale of functional ability.65  Eligible beneficiaries may use the cash 
benefit to pay for various nonmedical services and supports needed to 
maintain independence, including: 
  home modifications, 
  assistive technology, 
  accessible transportation, 
  home care aides, and 
 
58 PHSA  3205(a)(2)(A)(i). 
59 PHSA  3205(a)(2)(B). 
60 PHSA  3205(c)(6). 
61 PHSA  3202(6)(A)(i). 
62 PHSA  3202(6)(A)(iii).   
63 PHSA  3202(6)(A)(ii).  An eligible beneficiary must have earned at least enough money to earn a credit 
toward eligibility for future Social Security benefits (under section 213(d) of the Social Security Act) for at least 
3 calendar years of the first 60 months for which the individual has paid premiums.  The Commissioner of 
Social Security sets this amount each year.  The law does not establish maximum earnings requirements. 
64 PHSA  3202(6)(B) and 3203(a)(1)(C). 
65 PHSA  3203(a)(1)(D).  There must be at least two, and no more than six, benefit levels.  PHSA                    
 3203(a)(1)(D)(ii).  
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    personal assistance services.66 
The CLASS Act also allows eligible beneficiaries to use the cash benefit 
to obtain decisionmaking assistance concerning medical care (e.g., 
forming advance directives and accepting or receiving medical 
treatment).67, 68  
Cash benefits must be paid into each eligible beneficiarys account, 
referred to as the Life Independence Account, on a daily or weekly 
basis.69, 70  AoA must establish procedures to credit beneficiaries Life 
Independence Accounts and to allow them to access their accounts using 
debit cards.71  AoA must also develop procedures to allow an eligible 
beneficiarys authorized representatives to access his or her Life 
Independence Account.72   
Beneficiaries can defer daily or weekly benefits and receive a lump-sum 
payment.  Deferred benefits may roll over from month to month but not 
from year to year.73  AoA, in conjunction with the Secretary of the 
Treasury, must recoup any accrued benefits if a beneficiary dies or fails to 
collect deferred payments after 12 months.74  All recouped benefits must 
be returned to the CLASS Independence Fund.75 
The CLASS Act includes special provisions for providing cash benefits to 
eligible beneficiaries enrolled in Medicaid (Medicaid beneficiaries).  
Medicaid beneficiaries in an institutional setting (i.e., a hospital, nursing 
facility, intermediate care facility for the mentally retarded, or institution 
for mental diseases) retain 5 percent of their cash benefit while 95 percent 
must be applied to the facilitys cost of providing the beneficiarys care.76  
In some States, Medicaid beneficiaries receiving home- and community-
based services or Program of All-Inclusive Care for the Elderly services 
 
66 PHSA  3205(c)(1)(B).   
67 PHSA  3205(c)(1)(B). 
68 Advance directives are written instructions regarding health care decisions to be used if an individual is no 
longer able to make these decisions.  HHS, Literature Review on Advance Directives, June 2007.  Accessed at 
http://aspe.hhs.gov/daltcp/reports/2007/advdirlr.htm#term on August 31, 2011.   
69 PHSA  3205(c)(1)(A).  
70 PHSA  3203(a)(1)(D)(iii). 
71 PHSA  3205(c)(1)(C)(i) and (ii). 
72 PHSA  3205(c)(2)(A). 
73 PHSA  3205(c)(4)(A) and (B). 
74 PHSA  3205(c)(5)(C)(i). 
75 PHSA  3205(c)(5)(C)(ii). 
76 PHSA  3205(c)(1)(D)(i). 
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  retain 50 percent of their cash benefit.77  The remaining 50 percent must 
be applied to the States cost of providing assistance.78 
Advocacy Services and Advice and Counseling Services.  Advocacy 
services and advice and counseling services are included in the programs 
administrative costs.79   
Eligible beneficiaries must be assigned, as needed, an advocacy counselor 
under an agreement with their State Protection and Advocacy System to 
provide: 
  information regarding how to access the appeals process established 
for the program, 
  assistance with the benefit eligibility recertification process, and 
  other assistance with obtaining services the Secretary will require by 
regulation.80, 81 
Upon their request, eligible beneficiaries must be assigned an advice and 
assistance counselor to provide information about: 
  accessing and coordinating LTC services and supports in the most 
integrated setting, 
  possible eligibility for other benefits and services, 
  developing a service and support plan, 
  available assistance with decisionmaking concerning medical care, 
including the right to accept or refuse medical or surgical treatment 
and to formulate advance directives or other written instructions 
recognized by State law (e.g., a living will or a durable power of 
attorney for health care), 
 
 
 
77 PHSA  3205(c)(1)(D)(ii)(I) and (iii)(I). 
78 PHSA  3205(c)(1)(D)(ii)(I) and (iii)(I).  A State will be paid the remaining cash benefit for eligible 
beneficiaries receiving home- and community-based services only if:  (1) the State does not waive the  
requirements of section 1902(a)(1) of the Social Security Act (relating to statewideness) or of section 
1902(a)(10)(B) of the Social Security Act (relating to comparability); and (2) the State offers, at a minimum, 
case management services, personal care services, habilitation services, and respite care.  PHSA                         
 3205(c)(1)(D)(ii)(II).   
79 PHSA  3205(b)(4). 
80  State Protection and Advocacy Systems empower, protect, and advocate on behalf of individuals with 
developmental disabilities.  HHS, State Protection and Advocacy Services.  Accessed at 
http://www.acf.hhs.gov/programs/add/states/pnafactsheet.html on September 7, 2011.   
81 PHSA  3205(d)(1). 
OEI-04-11-00450  The CLASS Program:  2011 Report to Congress  10 
   
   
 
  programs established and services offered under the Assistive 
Technology Act of 1998,82 and 
  other services the Secretary may require by regulation.83 
Not later than January 1, 2012, the Secretary must enter into an agreement 
with each States Protection and Advocacy System to provide advocacy 
services and with public and private entities to provide advice and 
assistance counseling.84 
Funding.  All CLASS premiums must be transferred to a trust fund called 
the CLASS Independence Fund.85  The Secretary of the Treasury is 
responsible for managing this fund, which must be invested and used to 
pay CLASS administrative expenses and cash benefits.86  The CLASS Act 
prohibits the use of taxpayer funds to pay for cash benefits.87  
Providing Quality Assurance and Protecting Against Waste, Fraud, and 
Abuse.  AoA must include provisions in the CLASS program to prevent 
fraud and abuse.88  To protect against conflicts of interest, AoA must 
establish procedures to ensure that all entities that provide services (e.g., 
the Eligibility Assessment System, State Protection and Advocacy 
Systems, and advocacy counselors) to active enrollees and eligible 
beneficiaries:  
  have operating procedures to minimize conflicts of interest between 
the entity and active enrollees or beneficiaries; 
  provide information about all services and options available to active 
enrollees or beneficiaries, including services available through other 
entities;  
  assist active enrollees or beneficiaries in accessing desired services, 
regardless of the provider; 
  report the number of active enrollees and beneficiaries assisted by age, 
disability, and whether the active enrollees and beneficiaries received 
services from the entity or another entity;89 
 
82 The Assistive Technology Act of 1998 provides grants to States to address the assistive technology needs of 
individuals with disabilities.  States have used grants to provide screen readers, computer programs, mechanical 
lifts, and other devices and services to individuals with disabilities.  Association of Assistive Technology Act 
Programs, State AT Programs.  Accessed at http://www.ataporg.org/atap/projects.php on August 5, 2011. 
83 PHSA  3205(e). 
84 PHSA  3205(a)(2)(A)(ii) and (iii). 
85 PHSA  3204(f)(1). 
86 PHSA  3206(a). 
87 PHSA  3208(b). 
88 PHSA  3208(c). 
89 PHSA does not indicate to whom, or how frequently, entities will report this information. 
OEI-04-11-00450  The CLASS Program:  2011 Report to Congress  11 
   
   
  provide active enrollees and beneficiaries with a list of available 
service providers that can meet their needs;90  
  provide services in the best interests of active enrollees or 
beneficiaries, if the entity provides counseling or planning services; 
and 
  ensure that active enrollees or beneficiaries are informed of any 
financial interest the entity has in another service provider, if the entity 
provides counseling or planning services.91 
AoA must also establish standards of conduct for authorized 
representatives of eligible beneficiaries.  These standards must require that 
authorized representatives provide quality services, do not have conflicts 
of interest, and do not misuse benefit payments or otherwise engage in 
fraud or abuse.92   
METHODOLOGY 
Scope 
We reviewed progress in the development of the CLASS program from 
March 23, 2010, when the CLASS Act was enacted, through October 14, 
2011, when program implementation was suspended.93  This review 
focuses primarily on AoAs activities in the four areas specified in the 
CLASS Acts OIG annual reporting requirement after January 2011, when 
AoA became responsible for developing the program.   
Data Sources  
We obtained data about AoAs progress in developing the CLASS program 
from interviews with AoA senior management responsible for 
implementation.  We interviewed the Chief Operating Officer of the 
CLASS Office, the special advisor to the Chief Operating Officer, and two 
other members of the CLASS Office.  AoA also responded to a 
questionnaire and submitted documents to support its interview and 
questionnaire responses.  The questionnaire asked AoA to describe its 
progress and challenges in developing the CLASS program.  AoA staff 
collaborated to provide one response.  It also provided internal documents 
(e.g., meeting agendas, a logistics contract) and public documents (e.g., 
 
90 Entities that provide services to CLASS beneficiaries may include the Eligibility Assessment System, State 
Protection and Advocacy Systems, and advocacy counselors.  PHSA  3205(h).   
91 PHSA  3205(h). 
92 PHSA  3205(c)(2)(B). 
93 Prior to the establishment of the CLASS Office within AoA in January 2011, ASPE led the work on the 
CLASS program. 
OEI-04-11-00450  The CLASS Program:  2011 Report to Congress  12 
   
   
Federal Register notice soliciting nominations for the CLASS 
Independence Advisory Council) to demonstrate its progress. 
Data Analysis 
We analyzed information from interviews and AoAs responses to the 
questionnaire.  We also analyzed the supporting documentation submitted 
by AoA.  We used this information to describe the progress AoA reported 
in developing the CLASS program. 
Standards 
This study was conducted in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors General 
on Integrity and Efficiency. 
OEI-04-11-00450  The CLASS Program:  2011 Report to Congress  13 
   
   
FINDINGS 
On October 14, 2011, the Secretary informed Congress that, based on the 
results of the Departments analysis, she does not see a viable path for 
implementing the CLASS program.94  Following this announcement, HHS 
suspended program implementation activities.95  
This report describes AoAs activities prior to suspension of program 
activities.  OIG will determine the most appropriate way to meet OIGs 
CLASS Act reporting requirements in future years based on the programs 
status. 
During our review period, AoA was in the early stages of planning and 
developing the CLASS program.  Its priority was to develop benefit plan 
alternatives that would enable the program to be solvent for the required  
75 years.  AoA cannot implement the program if the Secretary does not 
designate a benefit plan.  The Secretary is not required to designate a 
benefit plan until October 1, 2012.  Before program activities were 
suspended, AoA did not expect to collect premiums until 2013 or pay 
benefits until 2018. 
Consistent with the CLASS Acts OIG reporting requirements, our report 
describes AoAs activities in developing the program with respect to: 
I.  providing cash benefits; 
II.  determining eligibility; 
III.  providing quality assurance and protecting against waste, 
fraud, and abuse; and 
IV.  recouping unpaid and accrued benefits. 
 
I.  Providing cash benefits 
To provide cash benefits, AoA must first develop at least three actuarially 
sound benefit plan alternatives to present to the CLASS Independence 
Advisory Council.  The Secretary must designate one of the alternatives as 
the CLASS Independence Benefit Plan, which must include details about 
premiums, cash benefit amounts, benefit eligibility, and access to 
advocacy services and advice and counseling services.  AoA must 
 
94 Kathleen Sebelius, Letter to Congress, October 14, 2011.  Accessed at 
http://www.hhs.gov/secretary/letter10142011.html on October 15, 2011. 
95 Kathleen Sebelius, HealthCare Blog:  The CLASS Program, October 14, 2011.  Accessed at 
http://www.healthcare.gov/blog/2011/10/class10142011.html on October 18, 2011. 
OEI-04-11-00450  The CLASS Program:  2011 Report to Congress  14 
   
   
establish procedures for active enrollees to apply for benefits and 
procedures to pay benefits.  
AoA focused on developing actuarially sound benefit plans 
AoA made progress in attempting to develop at least three actuarially 
sound benefit plan alternatives.96  Because program implementation 
depends on completing this requirement, AoA focused its efforts on 
developing alternatives for the CLASS Independence Benefit Plan.  To 
develop benefit plans, AoA assessed program models, collaborated with 
other agencies and experts, and prepared for the appointment of the 
CLASS Independence Advisory Council. 
AoA expected to provide cash benefits in 2018 at the earliest, pending the 
designation of a benefit plan by October 1, 2012.97  However, HHS 
reported in October 2011 that it was unable to identify an actuarially 
sound benefit plan within the legal requirements of the CLASS Act.98 
AoA must complete the following requirements pertaining to providing 
cash benefits if the Secretary designates a benefit plan at a later time: 
  establish procedures for active enrollees to apply for benefits, 
  establish procedures for crediting beneficiaries Life Independence 
Accounts and allowing beneficiaries to access accounts using a debit 
card, 
  establish procedures for crediting institutions caring for Medicaid 
beneficiaries and States providing Medicaid coverage, and 
  establish procedures for authorized representatives to access eligible 
beneficiaries Life Independence Accounts. 
AoA Developed and Assessed Program Models.  AoA hired a Director of 
Actuarial Integrity and Benefit Design (i.e., Chief Actuary) in January 
2011 to lead AoA in the actuarial modeling and market research activities 
necessary to develop actuarially sound benefit plan alternatives.  In June 
2011, the Chief Actuary developed a CLASS Enhancement Plan outlining 
the features that the program should include to be actuarially sound. 
To develop actuarially sound benefit plan alternatives, AoA worked with 
ASPE to assess different program models based on a wide range of 
 
96 For a detailed analysis of the benefit plan alternatives, see HHS, A Report on the Actuarial, Marketing, and 
Legal Analyses of the CLASS Program.  Accessed at http://aspe.hhs.gov/daltcp/reports/2011/class/index.pdf on 
October 15, 2011. 
97 AoA expected enrollment to begin in 2013 at the earliest.  Enrollees must pay premiums for 60 months 
before they are eligible to receive benefits, making 2018 the earliest date for benefit payments. 
98 Kathleen Sebelius, Letter to Congress, October 14, 2011.  Accessed at 
http://www.hhs.gov/secretary/letter10142011.html on October 15, 2011. 
OEI-04-11-00450  The CLASS Program:  2011 Report to Congress  15 
   
   
scenarios (e.g., various participation rates and rates of benefit claims) and 
alternative program features (e.g., various eligibility requirements, 
enrollment procedures, and premium levels).  AoA worked with the HHS 
Office of the General Counsel to ensure that the program features under 
consideration met the requirements of the CLASS Act.   
AoA worked to determine potential premiums by estimating enrollment 
rates, enrollment demographics, and the number of active enrollees who 
would collect benefits immediately following the required 5-year vesting 
period.  AoA estimated the proportion of direct enrollees likely to become 
eligible for benefits.99   
Because the expected number of enrollees would affect the benefit plan, 
AoA considered potential marketing strategies for the program to 
maximize enrollment.  A larger enrollment would reduce the risk of having 
a disproportionate number of unhealthy enrollees, which could result in 
higher benefit costs or cause the program to be actuarially unsound.   
AoA Collaborated With Other Agencies and Experts.  AoA worked with 
Federal actuaries and experts in the LTC insurance field to develop the 
CLASS program.  AoA incorporated the information it gathered from 
meetings with experts and actuaries into ongoing benefit plan modeling 
efforts.   
In June 2011, AoA hosted a technical expert meeting on the actuarial 
modeling of the benefit plan alternatives.  This meeting included actuaries, 
economists, demographers, sociologists, ASPE staff, and AoA staff.  The 
meeting addressed six major issues: 
  characteristics of likely program enrollees, 
  future LTC utilization by enrollees, 
  reasonableness of key assumptions used in potential benefit plans (e.g., 
assumptions regarding interest rates, progression of disabilities, and 
morbidity), 
  expected participation levels, 
  alternative benefit plan designs to increase financial stability, and 
  strategies to improve the program beyond changes to the benefit plan. 
In June 2011, AoA held a meeting with actuaries from CMS, the Social 
Security Administration, and the Office of Personnel Management.  
 
99 Direct enrollees are individuals who enroll through the method designed for those who are self-employed, 
have more than one employer, or have an employer that does not participate in automatic enrollment.  Because 
these individuals are not automatically enrolled and must opt into the program, AoA expects them to generally 
be less healthy than those who are automatically enrolled.   
OEI-04-11-00450  The CLASS Program:  2011 Report to Congress  16 
   
   
Participants discussed various benefit plan alternatives, actuarial models 
for the program, and the actuarial certification of the program. 
AoA Prepared for the Appointment of the CLASS Independence Advisory 
Council.  AoA is not directly responsible for establishing the CLASS 
Independence Advisory Council but worked with the Secretary to prepare 
for the councils appointment.  The President is responsible for appointing 
members of the council.  The Secretary signed a charter for the council on 
November 9, 2010.  On November 16, 2010, AoA issued a Federal 
Register Notice soliciting nominees for the council by December 1, 2010, 
and sent the names to the White House.100  AoA hired a logistics 
contractor in June 2011 to organize 2- to 3-day public meetings for council 
members to attend after their appointment. 
 
II.  Determining eligibility 
The CLASS Act requires the Secretary to establish an Eligibility 
Assessment System by January 1, 2012, to provide eligibility assessments 
of active enrollees applying for benefits.  AoA must establish procedures 
for determining benefit eligibility, appealing benefit eligibility denials, and 
redetermining benefit eligibility.  AoA must also determine intervals at 
which beneficiaries must recertify their eligbility. 
AoA examined legal issues related to establishing an Eligibility 
Assessment System 
The CLASS Act requires the Secretary to establish an Eligibility 
Assessment System by January 1, 2012.  However, the Secretary may wait 
until October 1, 2012, to designate a benefit plan.  Because the benefit 
plan must contain details about benefit eligibility, AoA reported that 
establishing an Eligibility Assessment System should be contingent upon 
designating a benefit plan.  Therefore, AoA worked with the HHS Office 
of the General Counsel on the legal issues surrounding this requirement.  
Because of the 5-year vesting period, AoA reported that 2018 is the 
earliest year active enrollees will be able to submit a claim for benefits and 
have their eligibility assessed.   
AoA must complete the following requirements pertaining to determining 
eligibility if the Secretary designates a benefit plan at a later time: 
 
100 75 Fed. Reg. 70005 (Nov. 16, 2010). 
OEI-04-11-00450  The CLASS Program:  2011 Report to Congress  17 
   
   
  to establish procedures for benefit eligibility determination, appeals to 
benefit eligibility denials, and benefit eligibility redeterminations;101 
and 
  to determine intervals at which beneficiaries must recertify their 
eligibility. 
 
III.  Providing quality assurance and protecting against 
waste, fraud, and abuse 
The CLASS Act requires AoA to include provisions in the CLASS 
program to protect against fraud and abuse.  Specifically, AoA must 
establish procedures to ensure that entities providing services to active 
enrollees and eligible beneficiaries comply with conflict-of-interest 
requirements in the law, as well as standards of conduct for authorized 
representatives of beneficiaries.   
AoA developed provisions to protect against waste, fraud, and 
abuse 
AoA developed provisions in benefit plan alternatives intended to protect 
against waste, fraud, and abuse after program implementation.  The 
CLASS Enhancement Plan, developed by the Chief Actuary, describes a 
potential list of excluded services and supports that beneficiaries cannot 
purchase with the cash benefit (e.g., food, liquor, housing, luxury items).  
The Enhancement Plan also describes potential reenrollment rules not 
included in the CLASS Act to prevent enrollees from repeatedly lapsing in 
premium payments and then reenrolling permanently when their health 
deteriorates.102  AoA also established and selected a head of the Office of 
Program Integrity and Compliance within the CLASS Office.   
AoA must complete the following requirements pertaining to providing 
quality assurance and protecting against waste, fraud, and abuse if the 
Secretary designates a benefit plan at a later time:  
  to establish procedures to ensure that entities providing services (e.g., 
advocacy, counseling, and planning services) to active enrollees and 
beneficiaries comply with the requirements of the law; and 
  to establish standards of conduct for authorized representatives of 
eligible beneficiaries. 
 
101 Benefit eligibility determination and redetermination processes must require certification by a licensed 
health care practitioner.  PHSA  3205(a)(2)(B). 
102 If reenrollment occurs after a lapse in premium payments of between 90 days and 5 years (beginning with 
the first month of the lapse), enrollees will receive credit for paid premiums prior to the lapse.  PHSA                      
 3203(b)(1)(C).  According to AoA, enrollees could continuously allow premium payments to lapse throughout 
the 5-year vesting period and begin steadily paying premiums only when they need to receive benefits.   
OEI-04-11-00450  The CLASS Program:  2011 Report to Congress  18 
   
   
 
 
IV.  Recouping unpaid and accrued benefits 
In conjunction with the Secretary of the Treasury, AoA must establish a 
mechanism to recoup benefits if a beneficiary dies or fails to collect 
deferred benefits after 12 months.  Recouped benefits must be returned to 
the CLASS Independence Fund. 
AoA will establish a mechanism to recoup unpaid and accrued 
benefits if the Secretary designates a benefit plan at a later 
time 
AoA reported that it planned to establish a mechanism to recoup unpaid 
and accrued benefits later in the program development process.  If the 
Secretary designated a benefit plan by October 1, 2012, AoA did not 
expect to recoup benefits in the event of a beneficiary death until 2018, the 
earliest year for benefit payments.  Because deferred benefits can roll over 
from month to month, but not from year to year, AoA expected to recoup 
deferred benefits in 2019 at the earliest. 
CONCLUSION 
At the time of our review, AoA was in the early stage of CLASS program 
planning and development and focused most of its efforts on developing at 
least three actuarially sound benefit plan alternatives.  However, on 
October 14, 2011, the Secretary informed Congress that HHS cannot 
identify a benefit plan that is both actuarially sound for the next 75 years 
and consistent with the requirements of the CLASS Act.  Following this 
announcement, HHS suspended program implementation.  OIG will 
determine the most appropriate way to meet OIGs CLASS Act reporting 
requirements in future years based on the programs status. 
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 
RESPONSE 
AoA reviewed a draft of this report and had no comments.  They noted 
that the report did not contain any recommendations and that HHS has 
suspended work on the program.  For the full text of AoAs comments, see 
Appendix B.  AoA provided clarifying and technical comments, which 
were incorporated into the final report.  
 
 
 
OEI-04-11-00450  The CLASS Program:  2011 Report to Congress  19 
   
   
APPENDIX A 
OIG Reporting Requirement in the CLASS Act 
PHSA Sec. 3209, 42 USC  300ll-8 
SEC. 3209. INSPECTOR GENERALS REPORT. 
The Inspector General of the Department of Health and Human Services 
shall submit an annual report to the Secretary and Congress relating to the 
overall progress of the CLASS program and of the existence of waste, 
fraud, and abuse in the CLASS program.  Each such report shall include 
findings in the following areas: 
(1) The eligibility determination process. 
(2) The provision of cash benefits. 
(3) Quality assurance and protection against waste, fraud, and abuse. 
(4) Recouping of unpaid and accrued benefits. 
OEI-04-11-00450  The CLASS Program:  2011 Report to Congress  20 
  APPENDIX B 
Agency Comments 
,,,.-'U....f4QJ   
/+ ~ 
DEPARTMENT OF HEALTH &. HUMAN SERVICES 	 Office of the Assistant Secretary 
Administration on Aging 
Washington D.C. 20201 
NOV  2~Oll 
TO:  Daniel R. Levinson 
Inspector General 
FROM:  Kathy Greenlee 
Assistant Secretaryfor Aging 
SUBJECT:  OIG Draft Report: Community Living Assistance Services and Supports Program: 
2011 Report to Congress, OEI-04-11-00450 
Thank you for the opportunity to comment on the subject OIG draft report.  We appreciate your 
staff's professionalism and collegiality in conducting this review and preparing this report. As 
stated in the report, on October 14,2011, the Secretary informed Congress that she does not see a 
viable path for implementing the CLASS program, and we have suspended work on the program. 
The draft 010 report does not contain any recommendation, and we do not have any comments on 
the report. 
The Administration on Aging would again like to thank the OIO for their work in conducting this 
review. Ifwe can be offurther assistance, please let me know. 
OEI-04-11-00450  The CLASS Program:  2011 Report to Congress  21   
   
ACKNOWLEDGMENTS 
This report was prepared under the direction of Dwayne Grant, Regional 
Inspector General for Evaluation and Inspections in the Atlanta regional 
office, and Jaime R. Durley, Deputy Regional Inspector General.   
Sarah Langford served as the lead analyst for this study.  Other principal 
Office of Evaluation and Inspections staff from the Atlanta regional office 
who contributed to the report include Starr Kidda and Janna Sayer; central 
office staff who contributed include Heather Barton. 
 
 
OEI-04-11-00450  The CLASS Program:  2011 Report to Congress  22 
   
 
Office of Inspector General 
http://oig.hhs.gov 
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as amended, is 
to protect the integrity of the Department of Health and Human Services (HHS) programs, as well as the 
health and welfare of beneficiaries served by those programs.  This statutory mission is carried out through 
a nationwide network of audits, investigations, and inspections conducted by the following operating 
components: 
Office of Audit Services 
The Office of Audit Services (OAS) provides auditing services for HHS, either by conducting audits with 
its own audit resources or by overseeing audit work done by others.  Audits examine the performance of 
HHS programs and/or its grantees and contractors in carrying out their respective responsibilities and are 
intended to provide independent assessments of HHS programs and operations.  These assessments help 
reduce waste, abuse, and mismanagement and promote economy and efficiency throughout HHS. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide HHS, Congress, 
and the public with timely, useful, and reliable information on significant issues.  These evaluations focus 
on preventing fraud, waste, or abuse and promoting economy, efficiency, and effectiveness of 
departmental programs.  To promote impact, OEI reports also present practical recommendations for 
improving program operations.  
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations of fraud and 
misconduct related to HHS programs, operations, and beneficiaries.  With investigators working in all 
50 States and the District of Columbia, OI utilizes its resources by actively coordinating with the 
Department of Justice and other Federal, State, and local law enforcement authorities.  The investigative 
efforts of OI often lead to criminal convictions, administrative sanctions, and/or civil monetary penalties. 
Office of Counsel to the Inspector General 
The Office of Counsel to the Inspector General (OCIG) provides general legal services to OIG, rendering 
advice and opinions on HHS programs and operations and providing all legal support for OIGs internal 
operations.  OCIG represents OIG in all civil and administrative fraud and abuse cases involving HHS 
programs, including False Claims Act, program exclusion, and civil monetary penalty cases.  In 
connection with these cases, OCIG also negotiates and monitors corporate integrity agreements.  OCIG 
renders advisory opinions, issues compliance program guidance, publishes fraud alerts, and provides other 
guidance to the health care industry concerning the anti-kickback statute and other OIG enforcement 
authorities.