U.S. Department of Health and Human Services 
Office of Inspector General 
 
 
Hawaii Medicaid 
Fraud Control 
Unit: 2019 Onsite 
Review 
 
OEI-06-19-00110 
Suzanne Murrin 
June 2020 
Deputy Inspector General  
  for Evaluation and Inspections 
oig.hhs.gov  Report in Brief  U.S. Department of Health and Human Services 
June 2020 
Office  of Inspector General 
OEI-06-19-00110 
 
 
Hawaii Medicaid Fraud Control Unit:   MFCU Case Outcomes 
FYs 201618 
2019 Onsite Review 
  19 indictments  
  12 convictions 
What OIG Found  
Key Takeaway    33 civil settlements and 
We identified several contributing factors in three 
The Hawaii MFCU made  judgments 
areas that affected the Hawaii Medicaid Fraud 
important strides to improve    $4.3 million in recoveries 
Control Units (MFCUs or Units) low case 
its operations since the  with $4.1 million from 
outcomes during Federal fiscal years    
Office of Inspector Generals  global* civil cases, 
(FYs) 201618.  We found that the MFCU received 
(OIGs) previous onsite review  $66,000 from nonglobal 
few fraud referrals from the Medicaid Program 
in 2014.  Despite these  civil recoveries, and 
Integrity Unit and other stakeholders, which 
improvements, the MFCU  $147,000 from 
limited the number of cases available for the Unit 
had low case outcomes  criminal cases 
to investigate and prosecute.  The Unit also 
during FYs 201618.  During 
experienced significant turnover of investigators 
our onsite review in March  Why OIG Did This Review 
and lacked sufficient Medicaid fraud cases 
2019, we identified issues  The purpose of this review was 
to adequately train new and inexperienced 
related to referrals and  to identify and address factors 
investigators.  Additionally, we found that the 
staffing that contributed to  that contributed to the Hawaii 
MFCUs agreement with Adult Protective and 
low case outcomes.  OIG has  MFCUs low case outcomes 
Community Services Branch (referred to as Adult 
provided the MFCU with  during FYs 201618 and to 
Protective Services or APS) for processing patient 
recommendations to address  assess Unit operations.  In 2015, 
abuse and neglect complaints was structured in 
these issues that, if  OIG issued a report from its 2014 
such a way that it led to the Unit screening 
implemented, should  onsite review of the MFCU that 
thousands of complaints unsuitable for 
improve its case outcomes.    raised concerns about the Units 
investigation, which diverted the Units time and 
ability to carry out its statutory 
resources from working viable cases with 
functions and meet program 
substantial potential for criminal prosecution. 
requirements.  To address the 
What OIG Recommends and How the Unit Responded  deficiencies identified during 
To address these issues and improve case outcomes, we recommend that the Unit:  OIGs previous onsite review, the 
MFCU developed and 
  develop and implement a plan to increase Medicaid fraud referrals 
implemented a corrective action 
from the Medicaid agency and other stakeholders;  
plan.  Despite this effort, we 
  develop and expedite an in-house Medicaid fraud training program 
found that the Hawaii MFCUs 
for Unit investigators; and 
case outcomes were low during 
  revise the Units agreement with APS to establish minimum criteria 
FYs 201618, compared to other 
for a complaint to be sent to the MFCU.  
similarly sized MFCUs. 
The Unit concurred with all three recommendations. 
   
   
 
*Global recoveries derive from civil 
 
settlements or judgments involving the 
  U.S. Department of Justice and a group 
  of State MFCUs and are coordinated by 
  the National Association of Medicaid 
Fraud Control Units. 
Full report can be found at oig.hhs.gov/oei/reports/oei-06-19-00110.asp TABLE OF CONTENTS 
BACKGROUND  1 
FINDINGS   
The MFCU received few fraud referrals from the Medicaid Program Integrity Unit and other  7 
stakeholders, which contributed to low case outcomes; the Unit initiated outreach efforts 
in FY 2017 to increase referrals 
The Unit experienced significant turnover of investigators and lacked sufficient fraud cases  9 
to adequately train new, inexperienced investigators on Medicaid fraud 
The MFCUs agreement with Adult Protective Services for processing patient abuse and  9 
neglect complaints led to the Unit screening thousands of complaints unsuitable for 
investigation, which diverted time and resources from viable cases 
CONCLUSION AND RECOMMENDATIONS   
Develop and implement a plan to increase Medicaid fraud referrals from the Medicaid  11 
agency and other stakeholders 
Develop and expedite an in-house Medicaid fraud training program for Unit investigators    12 
Revise the Units agreement with Adult Protective Services to establish minimum criteria for  12 
a complaint to be sent to the MFCU  
UNIT COMMENTS AND OIG RESPONSE  13 
APPENDICES   
A: Performance Assessment  13 
B: Detailed Methodology  22 
C: Hawaii MFCU Referrals Received, by Source, FYs 201618  26 
D: Point Estimates and 95-Percent Confidence Intervals of Case-File Reviews  27 
E: Unit Comments  28 
ACKNOWLEDGMENTS  30 
 
   
BACKGROUND 
Objective 
To identify factors contributing to the Hawaii Medicaid Fraud Control 
Units (MFCUs or Units) low case outcomes and examine its 
operations. 
Medicaid Fraud  The function of MFCUs is to investigate Medicaid provider fraud and 
patient abuse or neglect in facility settings and to prosecute those cases 
Control Units 
under State law or refer them to other prosecuting offices.1  Under the 
Social Security Act (SSA), a MFCU is a single, identifiable entity of State 
government, and must be separate and distinct from the State 
Medicaid agency and employ one or more investigators, attorneys, and 
auditors.2  Each State must operate a MFCU or receive a waiver.3  
MFCUs operate in 50 States, the District of Columbia, Puerto Rico, and 
the U.S. Virgin Islands.4   
Each Unit receives a Federal grant award equivalent to 90 percent of total 
expenditures for new Units and 75 percent for all other Units.5  In Federal 
fiscal year (FY) 2019, combined Federal and State expenditures for the 
Units totaled approximately $302 million, with a Federal share of 
$227 million.6  
OIG Grant  The Office of Inspector General (OIG) administers the grant award to each 
Unit and provides oversight of Units.7, 8  As part of its oversight, OIG 
Administration and 
reviews and recertifies each Unit annually and conducts periodic onsite 
Oversight of MFCUs 
reviews or inspections.   
 
1 SSA  1903(q)(3).  Regulations at 42 CFR 1007.11(b)(1) add that the Units responsibilities 
may include reviewing complaints of misappropriation of patients private funds in 
residential healthcare facilities. 
2 SSA  1903(q). 
3 SSA  1902(a)(61). 
4 The territories of American Samoa, Guam, and the Northern Mariana Islands have not 
established Units. 
5 SSA  1903(a)(6).  For a Units first 3 years of operation, the Federal government 
contributes 90 percent of funding and the State contributes 10 percent of Unit funding. 
6 OIG analysis of MFCUs FY 2019 reporting of expenditures.  
7 As part of grant administration, OIG receives and examines financial information from 
Units, such as budgets and quarterly and final Federal Financial Reports, that detail MFCU 
income and expenditures. 
8 The SSA authorizes the Secretary of Health and Human Services to award grants 
(SSA  1903(a)(6)) and to certify and annually recertify the Units (SSA  1903(q)).  
The Secretary delegated these authorities to OIG in 1979. 
 
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In its recertification review, OIG examines the Units reapplication, case 
statistics, and questionnaire responses from Unit stakeholders.  Through 
the recertification review, OIG assesses a Units performance, as measured 
by the following: its adherence to published performance standards;9 
its compliance with applicable laws, regulations, and OIG policy 
transmittals;10 and its case outcomes.  See Appendix A for the  
12 performance standards and our assessment of the Hawaii MFCUs 
adherence to those standards.  
OIG further assesses Units performance by periodically conducting onsite 
reviews of selected Units.  OIG selects Units for onsite reviews based on 
an annual risk assessment of all Units.  Each of the onsite reviews 
conducted by OIG may identify findings and result in recommendations 
for improvement.  OIG may also make observations on Unit operations 
and practices, including identifying beneficial practices that may be useful 
to share with other Units.  In addition, OIG provides training and technical 
assistance to Units, as appropriate, both during the onsite review and on 
an ongoing basis. 
Hawaii MFCU  The Hawaii MFCU is part of the Criminal Justice Division within the Hawaii 
Department of the Attorney General.  The MFCUs office is located in 
Honolulu, the State capital.  The Unit has the authority to prosecute 
Medicaid fraud and patient abuse and neglect cases.  In March 2019, the 
Unit had 16 employees: 7 investigators, including a supervising special 
agent; 3 attorneys, referred to as Deputy Attorneys General, including 
the MFCU director; 2 auditors; 1 accountant; and 3 support staff, including 
legal and office assistants.11  During our review period of FYs 201618, the 
Unit spent approximately $5.5 million (with a State share of approximately 
$1.4 million).   
Referrals.  During FYs 201618, the Unit reported receiving fraud referrals 
from several sources, including the State Medicaid agency and private 
citizens.  The Unit reported receiving nearly all of its patient abuse and 
neglect referrals from Adult Protective and Community Services Branch 
(referred to as Adult Protective Services or APS), the State agency 
responsible for providing crisis intervention, including investigation and 
emergency services for vulnerable adults who are reported to be abused, 
 
9 MFCU performance standards are published at 77 Fed. Reg. 32645 (June 1, 2012).  
OIG developed the performance standards in conjunction with the MFCUs, and the 
standards were originally published at 59 Fed. Reg. 49080 (Sept. 26, 1994). 
10 OIG occasionally issues policy transmittals to provide guidance and instruction to 
MFCUs.  Policy transmittals may be found at https://oig.hhs.gov/fraud/medicaid-fraud-
control-units-mfcu/index.asp. 
11 In December 2019, subsequent to our onsite review, one of the MFCU attorneys retired.  
One of the support staff left the Unit in February 2020.  According to the MFCU, both of 
these positions remained vacant as of March 2020. 
 
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neglected, or financially exploited by others, or seriously endangered due 
to self-neglect.12  According to the Units agreement with APS, the agency 
forwards all incidents of patient abuse or neglect to the Hawaii MFCU.13  
After APS sends an unscreened complaint to the MFCU, APS evaluates the 
complaint to decide whether to open its own investigation.  If APS opens 
an investigation, APS shares any relevant information and results from the 
investigation with the Hawaii MFCU.   
When the Unit receives a fraud referral or a patient abuse or neglect 
complaint, Unit staff enter the information as a matter into an electronic 
case tracking system.  Staff then route the matter to one of the Unit 
attorneys, who screens all incoming referrals on a rotating weekly basis 
with the other two Unit attorneys.  The screening attorney reviews the 
referral to ensure that it is within the Units grant authority and 
determines whether the referral warrants an investigation.  If the attorney 
determines that the referral is outside of the Units jurisdiction or 
otherwise decides not to proceed with the referral, the Unit closes the 
matter and possibly refers it to another agency.  If the referral requires a 
jurisdictional check or additional information before the attorney can 
determine whether to open or close an investigation, the attorney 
instructs the supervising special agent to conduct a preliminary 
investigation of the referral.  
Investigations and Prosecutions.  Once the Unit attorney accepts a 
referral, the supervising special agent opens a case and assigns an 
investigator.  The attorney meets with the investigator and other team 
members (e.g., an auditor) to outline and assign key investigative tasks.  
The Unit stores all case records, including opening documentation, 
interviews, summaries, case-file reviews, and closing requests, in its 
electronic case tracking system.  If, after the investigation concludes, 
the attorney determines that the case warrants prosecution, the MFCU 
director must obtain approval from the supervising Deputy Attorney 
General within the Criminal Justice Division in the Department of the 
Attorney General. 
 
 
 
12 Hawaii Department of Human Services, Adult Protective and Community Services Branch.  
Accessed at http://humanservices.hawaii.gov/ssd/home/adult-services/ on August 
26, 2019. 
13 Hawaii Administrative Rules  17-1421-8, February 11, 2010.  From this regulation, the 
MFCU and APS developed an agreement stating that APS shall report all incidents of 
vulnerable adult abuse or neglect that may involve a crime to the MFCU, regardless of 
whether the incident is accepted for investigation by APS.     
 
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Hawaii Medicaid  The Hawaii Medicaid program is administered by the Department of 
Human Services Med-QUEST Division (MQD).  In FY 2018, Hawaiis 
Program 
Medicaid expenditures were approximately $2.3 billion.14  MQD 
administers the States Medicaid fee-for-service and managed care 
programs.15  There are five managed care organizations (MCOs) in the 
State of Hawaii.16  In FY 2018, 98 percent of Hawaiis approximately 
300,000 Medicaid beneficiaries received their services through 
these 5 MCOs.17, 18  
Medicaid Program Integrity.  MQD and the States five MCOs are 
responsible for Medicaid program integrity efforts in Hawaii.  Under 
managed care, MQD contracts with MCOs to process, pay, and monitor 
claims of providers in the MCOs networks.  Each MCO operates Special 
Investigative Units that identify and investigate potential fraud and abuse 
in their networks and refer suspected cases of provider fraud or abuse to 
MQD.19  MQDs Program Integrity Unit conducts preliminary 
investigations on all referrals received (mostly from MCOs, but also 
including complaints from the public), as well as referrals that are self-
generated from the analysis of Statewide Medicaid data.  If MQD 
determines, during its preliminary investigation, that there is a credible 
allegation of fraud, then MQD refers the allegation to the MFCU.  After 
receiving the referral from MQD, the MFCU has 45 days to decide and 
inform the program integrity unit whether the MFCU will open a full 
investigation or decline the referral. 
Previous OIG  In 2015, OIG issued a report from its 2014 onsite review of the MFCU that 
raised concerns about the Units ability to carry out its statutory functions 
Oversight 
and meet program requirements.20  OIG recommended that the Unit 
develop and implement a corrective action plan to address the 
deficiencies found during the onsite review and to improve the Units 
 
14 OIG, MFCU Statistical Data for FY 2018.  Accessed at https://oig.hhs.gov/fraud/medicaid-
fraud-control-units-mfcu/expenditures_statistics/fy2018-statistical-chart.pdf on August 
22, 2019. 
15 CMS, Managed Care in Hawaii.  Accessed at https://www.medicaid.gov/medicaid-chip-
program-information/by-topics/delivery-systems/managed-care/downloads/hawaii-
mcp.pdf on August 7, 2019.  
16 The five MCOs in Hawaii include Aloha Care, HMSA, Kaiser Permanente, Ohana Health 
Plan, and UnitedHealthcare Community Plan.  Accessed at 
https://medquest.hawaii.gov/en/members-applicants/already-covered/health-plans.html 
on April 23, 2019. 
17 CMS, 2018 09 Preliminary Applications, Eligibility Determinations, and Enrollment Data.  
Accessed at https://data.medicaid.gov/Enrollment/2018-09-Preliminary-applications-
eligibility-deter/r2w5-6hdx/data on January 28, 2019. 
18 In March 2018, the Hawaii MFCU self-reported, in its annual recertification data submitted 
to OIG, that approximately 294,000 Medicaid beneficiaries received Medicaid services 
through MCOs.   
19 42 CFR  438.608.    
20 OIG, Hawaii State Medicaid Fraud Control Unit: 2014 Onsite Review, OEI-09-14-00540, 
September 2015. 
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effectiveness.  OIG recommended that the corrective action plan address, 
at a minimum, how the Unit would accomplish the following: (1) develop 
and implement effective hiring and training practices that conform to 
current laws, regulations, and performance standards; (2) revise its 
memorandum of understanding (MOU) with the Medicaid agency to 
reflect current law and practice; (3) develop and implement policies and 
procedures that conform to current laws, regulations, and performance 
standards; (4) establish regular communication with Federal agencies; 
(5) develop and implement procedures to ensure Unit staff investigate 
cases within the grant authority; and (6) establish fiscal controls.  OIG 
assisted the Unit with developing the corrective action plan, which was 
finalized in November 2015.  By January 2017, OIG considered all of the 
recommendations to have been implemented by the Units 
corrective actions.   
In addition to implementing the recommendations from OIGs previous 
onsite review, the Unit made other changes to its operations.  These 
changes included hiring and integrating new auditors into the 
investigative teams and further building the Units relationships with key 
stakeholders.  In January 2017, a new MFCU director was put in place, 
and, in March 2018, the Unit relocated its office to a larger and improved 
space, a process which took 14 months.  The new office contains 
additional storage, which alleviated the Units previous need for 
offsite storage. 
Methodology  We conducted our onsite review in March 2019.  The review team 
consisted of OIG evaluators, OIG agents, a grant oversight analyst, and a 
director from another State MFCU.  Our review covered the 3-year period 
of FYs 201618.  The primary purpose of the review was to follow up on 
issues that OIG identified through its ongoing administration and 
oversight activities.  Our pre-onsite analysis identified low case outcomes 
as an area of concern.  We determined that the Hawaii MFCU had low 
case outcomes by comparing its criminal convictions, civil settlements and 
judgments, and total recoveries to those of other similarly sized MFCUs 
during our review period.21  Our analysis showed that the Hawaii MFCUs 
case outcomes were among the lowest compared to other similarly sized 
MFCUs during FYs 201618, and its criminal convictions declined from the 
previous 3-year period.  See Appendix B for a detailed methodology.  We 
focused our data collection and analysis on identifying factors 
contributing to low case outcomes and ways to help the Unit improve its 
case outcomes.  We also analyzed the Units operations and adherence to 
 
21 We identified 13 similarly sized MFCUs based on their staff size, which ranged from 
11 to 17 employees (the Hawaii MFCU had between 14 and 16 employees during 
FYs 201618).  Although comparing a MFCUs case outcomes with those of similarly sized 
MFCUs provides some context, we recognize that other factors besides a MFCUs staff size 
can affect case outcomes. 
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the 12 performance standards and applicable Federal laws, regulations, 
and policy transmittals. 
We based our review on an analysis of data from seven sources: (1) Unit 
documentation, such as policies and procedures; (2) structured interviews 
with key stakeholders; (3) structured interviews with Unit managers and 
selected staff; (4) a review of a random sample of case files open at some 
point during the review period; (5) referrals received by the Unit; 
(6) observation of Unit operations; and (7) documentation associated with 
the Units fiscal controls.  We also compared the Units results to those of 
other similarly sized MFCUs.  In examining the Units operations and 
performance, we applied the published performance standards listed in 
Appendix A, but we did not assess every performance indicator for each 
of the 12 standards.   
Standards  We conducted this study in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors General 
on Integrity and Efficiency.  These inspections differ from other OIG 
evaluations in that they support OIGs direct administration of the MFCU 
grant program, but are subject to the same internal quality controls as 
other OIG evaluations, including internal and external peer review.   
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FINDINGS   
 
We found that, despite the Hawaii MFCU having implemented a corrective 
action plan to improve its operations following OIGs previous onsite 
review, the MFCUs case outcomes were low during FYs 201618.22, 23  
This review focused on identifying factors that contributed to the Units 
low case outcomes.  We identified three areas in which the Unit should 
improve and for which we are issuing recommendations.  We also 
assessed the Units adherence to the 12 MFCU performance standards.  
See Appendix A for our full assessment of the Units adherence to the 
performance standards, including observations of Unit operations 
and practices. 
The MFCU received  During FYs 201618, the Hawaii MFCU received 22 fraud referrals.  
Of these, 17 referrals came initially from the States MCOs and were 
few fraud referrals 
forwarded to the MFCU by MQD, and the remaining 5 referrals came from 
from the Medicaid 
other sources, such as private citizens.  The number of referrals that the 
Program Integrity  Unit received from MQD was low compared to the number of referrals 
Unit and other   that similarly sized MFCUs received from their State Medicaid program 
integrity units, which ranged from 1 to 157 referrals during FYs 201618.  
stakeholders, which 
During the previous 3-year period (FYs 201315), the Hawaii MFCU 
contributed to low 
received nine fraud referrals from MQD.  Appendix C identifies the Hawaii 
case outcomes; the  MFCUs referrals, by source, during FYs 201618.  
Unit initiated 
The low number of fraud referrals during our review period limited the 
outreach efforts in  number of cases that the Unit could investigate and prosecute, which 
ultimately affected the Units case outcomes.  Similar to other States, 
FY 2017 to increase 
MQD, as the agency housing the Medicaid program integrity function, 
referrals 
should be the predominant source of fraud referrals to the MFCU.  These 
referrals may be generated directly by MQD or originate with the MCOs.   
In a 2014 report on program integrity oversight of the Hawaii Medicaid 
program, the Centers for Medicare & Medicaid Services (CMS) found that 
MQD had limited staff dedicated to essential program integrity functions.  
CMS found that MQD was not routinely conducting preliminary 
investigations or referring suspected cases of fraud to the MFCU and 
 
22 OIG provides information on MFCU operations and outcomes, but does not direct or 
encourage MFCUs to investigate or prosecute a specific volume or number of cases.  
All cases investigated by the MFCU should be based upon credible allegations, and MFCU 
prosecutors should apply professional judgment and discretion in determining what 
criminal and civil cases to pursue. 
23 In FY 2019 (after our period of review), the Hawaii MFCU reported four fraud 
convictions, one of which resulted in a $3.8 million recovery, which represented a 
substantial increase in the amount of monetary recoveries from previous years.  
 
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faced challenges performing other program integrity functions, such as 
data mining. 24  At the time of the CMS review, the program integrity unit 
within MQD had only three full-time staff (one investigator and two nurse 
reviewers).  We found that MQD had the same number of staff for this 
unit in FY 2018, which may have contributed to the low number of 
referrals that the MFCU received during our review period.    
Another factor that we identified as affecting fraud referrals during 
FYs 201618 was a resistance in the community to reporting suspected 
fraud.  In interviews, MFCU staff reported that there is a cultural 
resistance to reporting providers in Hawaii.  Staff explained that many 
communities on the Hawaiian Islands are small and isolated, with limited 
access to providers, which sometimes makes people less willing to report 
provider fraud.  Staff reported that issues are often addressed within the 
community, and that there is a tendency 
Performance Standard 4:  
to protect community members, 
A MFCU should take steps 
including providers, from outsiders 
to ensure that it receives 
(e.g., law enforcement).    
an adequate volume and 
From interviews, we also found that the  quality of referrals. 
MFCU conducted insufficient outreach 
during the review period to generate and encourage referrals of 
suspected fraud from the public and other stakeholders (e.g., State 
licensing boards, local law enforcement agencies) and did not, until 
recently, meet regularly with MCOs and MQD.  We found that the lack of 
regular meetings constituted a missed opportunity for the MFCU to 
educate MQD about its role and provide guidance on the information 
needed in fraud referrals.  The MFCU director reported that shortly after 
assuming her new position in FY 2017, she initiated outreach efforts with 
the purpose of improving the Units relationships with MCOs and MQD
efforts that the previous MFCU director did not undertake.  The MFCU 
director explained that these efforts initially focused on building trust and 
learning about each others roles, responsibilities, and internal processes.  
In interviews, the MFCU and MQD reported that they had recently begun 
discussing how to improve the process and timeliness of referrals to 
the MFCU.  
 
 
   
 
24 CMS, Medicaid Integrity Program Hawaii Comprehensive Program Integrity Review Final 
Report, June 2014.  Accessed at https://www.cms.gov/Medicare-Medicaid-
Coordination/Fraud-Prevention/FraudAbuseforProfs/Downloads/HIfy13.pdf on March 
28, 2019.  
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The Unit  During FYs 201718, the Unit experienced significant turnover of staff 
when more than half (four of six) of its investigators retired or resigned 
experienced 
from the MFCU.  Among those who left were two experienced 
significant turnover 
investigators who played key roles in the MFCUs fraud investigations.  
of investigators and  We found that the departure of the former staff created a knowledge gap 
lacked sufficient  within the MFCU, particularly related to Medicaid fraud investigations, 
which contributed to the Units low case outcomes.  The staff turnover, 
fraud cases to 
coupled with the small number of fraud referrals received during our 
adequately train 
review period, limited the Units ability to provide new investigators with 
new, inexperienced  adequate on-the-job fraud training and opportunities to work alongside 
experienced Medicaid fraud investigators. 
investigators on 
Medicaid fraud  At the time of our onsite review, the Unit had filled all of its vacant 
investigator positions, but none of the new investigators had prior 
experience investigating Medicaid fraud, and they had limited knowledge 
about Medicaid policy and regulation.  All of the new investigators were 
former police officers in the Honolulu Police Department and had 
extensive investigative experience in other areas of law enforcement, such 
as homicide and narcotics.  During interviews, some of the new 
investigators reported that although they had received some guidance 
from the MFCU attorneys and other investigators regarding fraud 
investigations, they would benefit from fraud-specific training.  At the 
time of our review, three of the five new investigators were each working 
one fraud case, one investigator was working two fraud cases, and the 
remaining investigator had no active fraud cases.   
Unlike in most other States where APS screens potential cases of patient 
The MFCUs 
abuse or neglect before referring them to the MFCU, the Hawaii MFCUs 
agreement with 
agreement with APS requires APS to forward all complaints to the MFCU 
Adult Protective  without screening them for credibility or need for investigation.  During 
Services for  FYs 201618, the MFCU reported receiving a total of 5,948 unscreened 
patient abuse or neglect complaints from APS, averaging nearly 
processing patient 
2,000 complaints each year.   
abuse and neglect 
5,948  
Given that APS did not screen the complaints 
complaints led to 
before sending them to the MFCU, many of 
the Unit screening  unscreened patient 
the complaints had inaccurate or incomplete 
abuse and neglect 
thousands of  information (e.g., names, birth dates) or were 
complaints sent to the 
complaints  not within the MFCUs jurisdiction.   MFCU during               
Consequently, Unit investigators reported  FYs 201618; less than 
unsuitable for 
that, as part of screening the complaints, they  5 percent resulted in 
investigation, which 
often had to collect additional information,  investigations  
diverted time and  which could include interviewing witnesses or 
consulting with other State and law 
resources from 
enforcement agencies, such as the State Department of Health and the 
viable cases  
Honolulu Police Department.  From interviews with APS, we found that 
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the same information was sometimes collected both by APS, for its own 
investigation after referring the complaint to the MFCU, and by the MFCU. 
MFCU staff explained that once the Unit investigators had concluded the 
initial collection of information, the MFCU attorneys would determine 
whether to open an investigationa role that other MFCUs typically 
assign to the supervising special agentproviding a significant distraction 
from the prosecutorial work of the attorneys.  Given the large number of 
complaints received from APS, the Unit spent a considerable amount of 
time screening complaints that were ultimately determined unsuitable for 
formal investigation, which diverted both time and resources from the 
Unit working viable cases with substantial potential for criminal 
prosecution.  We determined that less than 5 percent (297 of 5,948) of the 
complaints that the Unit received from APS during FYs 201618 resulted 
in the Unit opening an investigation.  After our onsite review, the Unit 
reported improvements with the many unscreened complaints that they 
received from APS.  According to Unit investigators, APS improved the 
accuracy and completeness of the information that APS included in 
the complaints. 
 
 
 
   
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CONCLUSION AND RECOMMENDATIONS 
OIG identified contributing factors in three areas that affected the Hawaii 
MFCUs low case outcomes during FYs 201618.  The Unit received few 
fraud referrals from the Medicaid Program Integrity Unit and other 
stakeholders, which limited the number of cases available for the Unit to 
investigate and prosecute.  The Unit also experienced significant turnover 
of investigators, which created a knowledge gap, particularly for Medicaid 
fraud investigations.  The lack of experienced fraud investigators coupled 
with the small number of fraud referrals that the MFCU received made it 
difficult for the Unit to adequately train new investigators who had no 
previous experience investigating Medicaid fraud.  In contrast to the low 
number of fraud referrals that the Unit received, the Unit was inundated 
with unscreened and incomplete patient abuse or neglect complaints 
from APS, most of which did not lead to the Unit opening a case.  
To assess the many complaints, the Unit had to divert time and resources 
from viable cases and other efforts, which may have adversely affected 
the case outcomes of the Unit.  
To address the issues identified in this report and further improve Unit 
operations, we recommend that the Hawaii MFCU:  
Develop and implement a plan to increase Medicaid fraud 
referrals from the Medicaid agency and other stakeholders  
Given that the Unit received few fraud referrals from its stakeholders 
during our 3-year review period, the MFCU should take additional steps 
to ensure that it receives an adequate number of fraud referrals from its 
stakeholders.  The Unit should continue to build upon its outreach efforts 
to MQD and MCOs and provide periodic feedback to them on the 
adequacy of both the volume and quality of referrals.  To further increase 
referrals, the Unit could conduct outreach with other groups, such as 
professional associations and provider and beneficiary organizations, 
about the MFCUs role in investigating provider fraud and when and how 
to report potential fraud.  The Unit may also want to review and consider 
adopting relevant beneficial practices of other MFCUs described in 
Appendix B of the OIG FY 2019 MFCU Annual Report.25   
 
   
 
25 OIG, At a Glance: Medicaid Fraud Control Units Fiscal Year 2019 Annual Report.  Accessed 
at https://oig.hhs.gov/oei/reports/oei-09-20-00110.asp on April 7, 2020.  
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Develop and expedite an in-house Medicaid fraud training 
program for Unit investigators 
Given that the Unit has relatively new investigators with limited fraud 
experience, the Unit should develop and expedite Medicaid fraud training 
for its investigators.  The Units training program could include relevant 
education and training through webinar programs offered by other 
organizations, such as the National Health Care Anti-Fraud Association 
and the Association of Certified Fraud Examiners.  The Unit could also 
coordinate with the National Association of Medicaid Fraud Control Units 
(NAMFCU) and/or OIG to identify training in Medicaid fraud.  Additionally, 
the Unit should continue to work joint fraud cases with Federal partners; 
this would provide Unit investigators with relevant training and 
experience in Medicaid fraud.  For additional ways to develop a training 
program, the MFCU could review and adopt relevant beneficial practices 
of other MFCUs described in Appendix B of the OIG FY 2019 MFCU 
Annual Report.26   
Revise the Units agreement with Adult Protective Services to 
establish minimum criteria for a complaint to be sent to 
the MFCU 
The MFCU should work with APS to establish and apply a standard for 
deciding when to refer patient abuse and neglect complaints to the 
MFCU.  In applying such a standard, APS would have the tools to screen 
the complaints (which is common practice for APS and other 
administrative agencies in other States) to determine whether the 
complaints meet certain minimum criteria for a referral to be sent to the 
MFCU.  The revised policy should reduce the number of inaccurate and 
incomplete complaints and reduce duplication between the two agencies, 
thereby promoting Unit efficiency and case flow.  The MFCU should also 
monitor the flow and quality of the complaints and, as necessary, provide 
training to APS regarding the complaints.  
   
 
26 Ibid.   
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UNIT COMMENTS AND OIG RESPONSE  
The Hawaii MFCU concurred with all three of our recommendations. 
First, the MFCU concurred with our recommendation to develop and 
implement a plan to increase Medicaid fraud referrals from the Medicaid 
agency and other stakeholders.  The MFCU stated that it is meeting with the 
Medicaid agency and managed care organizations on a monthly basis to 
share information on cases and for relationship building.  The Unit also 
reported that it has implemented a simultaneous case reporting system with 
the managed care organizations.  Fraud referrals are now being sent to 
both the Medicaid agency and the Hawaii MFCU, which has resulted in a 
significant increase in the number of fraud referrals that the Unit receives. 
Second, the MFCU concurred with our recommendation to develop and 
expedite an in-house Medicaid fraud training program for Unit 
investigators.  The MFCU reported that it has provided several webinar 
trainings for its investigators through the National Health Care Anti-Fraud 
Association.  The MFCU noted that it will continue to seek out training 
opportunities for their investigators and will partner with OIG and other 
Federal agencies to work joint fraud cases. 
Third, the MFCU concurred with our recommendation to revise the Units 
agreement with APS to establish minimum criteria for a complaint to be 
sent to the MFCU.  The Unit reported that it has met with APS to establish 
such criteria, which has significantly reduced the number of complaints that 
the MFCU receives from APS.  This has allowed the Unit to spend more time 
on viable cases, rather than allocating time and resources to screening cases 
deemed unsuitable for investigation.  
For the full text of the Units comments, see Appendix E. 
   
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APPENDIX A: Performance Assessment 
We identified the Hawaii MFCUs case outcomes and assessed its 
adherence to the 12 MFCU performance standards, including its 
compliance with applicable laws, regulations, and policy transmittals.  
From this review, we identified three areas in which the Unit should 
improve its adherence to program requirements (presented here and as 
findings in the report) and made other observations about Unit 
operations and practices.  A complete publication of the performance 
standards, including performance indicators, may be found at 77 Fed. Reg. 
32645 (June 1, 2012), and on OIGs website at 
https://oig.hhs.gov/fraud/medicaid-fraud-control-units-mfcu/.  
CASE OUTCOMES   
The Hawaii MFCU reported 19 indictments; 12 convictions; and 33 civil 
Observation 
settlements and judgments for FYs 201618. 
Of the 12 convictions, 8 involved provider fraud and 4 involved patient 
abuse or neglect. 
 
The Unit reported $4.3 million in combined civil and criminal recoveries.  
The Unit reported total recoveries of approximately $4.3 million during 
FYs 201618, with global civil recoveries representing $4.1 million, 
nonglobal civil recoveries $66,000, and criminal recoveries $147,000.  
Global civil cases are False Claims Act cases that involve the U.S. 
Department of Justice and a group of MFCUs.  NAMFCU facilitates the 
settlement of global cases on behalf of the States.  Nonglobal civil cases 
are conducted by individual MFCUs or with other law enforcement 
partners, and are not coordinated by the NAMFCU. 
 
 
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STANDARD 1  A Unit conforms with all applicable statutes, regulations, and policy 
  directives. 
Observation  From the information we reviewed, the Hawaii MFCU complied with 
applicable laws, regulations, and policy transmittals.  We did not identify 
any legal or compliance concerns related to Unit operations, which was an 
improvement from OIGs previous onsite review in 2014.  During the prior 
review, we found that the Unit did not comply with all Federal regulations 
or adhere to all MFCU performance standards.  For example, the Unit 
investigated cases that were outside of its grant authority.  We did not 
identify any such issues during our 2019 onsite review. 
STANDARD 2  A Unit maintains reasonable staff levels and office locations in relation 
  to the States Medicaid program expenditures and in accordance with 
staffing allocations approved in its budget. 
Observation  The Unit maintained staff levels and office locations in accordance with 
its approved budget.  According to Performance Standard 2(b), the Unit 
should employ a total number of professional staff that is commensurate 
with the States total Medicaid program expenditures and that enables 
the Unit to effectively investigate and prosecute (or refer for prosecution) 
an appropriate volume of case referrals and workload for both Medicaid 
fraud and patient abuse and neglect.  
Following OIGs last onsite review, the Unit took steps to hire an 
experienced auditor to comply with Federal regulations.  After filling the 
auditor position, the Unit met the requirement of having an appropriate 
mix of attorneys, investigators, and auditors.  Despite significant turnover 
of investigators, the Unit employed an adequate number of staff to fulfill 
its mission and objectives during FYs 201618.  The Unit also improved its 
office space when it moved to a new office location in FY 2018 that 
provided a larger space that was not shared with another State agency.   
Finding  The Unit experienced significant turnover of investigators and lacked 
sufficient fraud cases to adequately train new, inexperienced 
investigators on Medicaid fraud.  See page 9.  
 
 
 
 
 
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STANDARD 3  A Unit establishes written policies and procedures for its operations 
  and ensures that staff are familiar with, and adhere to, policies and 
procedures. 
Observation  The Unit maintained written policies and procedures.  The Unit 
maintained a Policy and Procedures Manual that was available to Unit 
staff electronically on the shared network drive.  Hard copies of the 
manual were also available on the Units reference bookshelf.  The Unit 
created this manual in response to OIGs recommendations following the 
2014 onsite review, during which we found that the Unit did not maintain 
policies or procedures specific to its operations.  Each employee 
acknowledged that they had read and understood the manual by signing 
off on a manual log.  The manual included general guidelines on the roles 
and responsibilities of Unit staff as well as specific procedures related to 
investigative processes.   
STANDARD 4  A Unit takes steps to maintain an adequate volume and quality of 
  referrals from the State Medicaid agency and other sources. 
Finding  The MFCU received few fraud referrals from the Medicaid Program 
Integrity Unit and other stakeholders, which contributed to low 
case outcomes; the Unit initiated outreach efforts in FY 2017 to increase 
referrals.  See page 7. 
Finding  The MFCUs agreement with Adult Protective Services for processing 
patient abuse and neglect complaints led to the Unit screening 
thousands of complaints unsuitable for investigation, which diverted 
time and resources from viable cases.  See page 9. 
STANDARD 5  A Unit takes steps to maintain a continuous case flow and to complete 
cases in an appropriate timeframe based on the complexity of the 
cases. 
 
Observation  Nearly all Unit case files contained documentation of supervisory 
approval of the opening and closing of investigations and periodic 
supervisory reviews.  According to Performance Standard 5(b), 
supervisors should approve the opening and closing of all investigations; 
review the progress of cases; and take action as necessary to ensure that 
each stage of an investigation and prosecution is completed within an 
appropriate timeframe.  Our review found that nearly all of the sampled 
case files contained documentation of supervisory approval of case 
openings and closings.  An estimated 99 percent of case files had 
supervisory approval to open the cases for investigation.  At the time of 
our review, an estimated 91 percent of cases were closed, and we 
Hawaii Medicaid Fraud Control Unit: 2019 Onsite Review  16 
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estimated that all of the closed cases had supervisory approval to close.  
An estimated 58 percent of cases were open longer than 90 days and 
thus subject to periodic supervisory reviews.  Of these cases, an 
estimated 96 percent of case files had periodic supervisory reviews 
consistent with MFCU policies.  The Unit had significantly improved its 
supervision of cases since OIGs 2014 onsite review, when we found that 
an estimated 71 percent of case files lacked documentation of periodic 
supervisory reviews. 
STANDARD 6  A Units case mix, as practicable, covers all significant provider types 
  and includes a balance of fraud and, where appropriate, patient 
abuse and neglect cases. 
Observation  The Units caseload included a broad mix of provider types.  At the end 
of FY 2018, the Units cases included 36 provider types, including 
physicians, licensed practitioners, healthcare facilities, and medical 
service providers. 
Observation  The Unit pursued few nonglobal civil fraud cases.  Performance Standard 
6(e) states that Units should seek to maintain, consistent with their legal 
authority, a balance of criminal and civil fraud cases.  Hawaii enacted a 
False Claims Act in 2000, which provides the Unit with a basis to pursue its 
own nonglobal cases.27  However, only 3 percent of the Units cases 
(10 of 331) during FYs 201618 were nonglobal civil fraud cases.  
Nonglobal cases involve primarily State rather than Federal litigation; 
are pursued separately by Units or with other law enforcement partners; 
and are not coordinated by NAMFCU.  At the time of our onsite review, 
5 of the 10 nonglobal civil cases were still in the investigative stage.    
Several factors contributed to the Units few nonglobal civil fraud cases 
during our review period.  In addition to the Unit receiving few fraud 
referrals, the MFCU director reported that the Unit was focusing primarily 
on criminal prosecutions, consistent with its law enforcement mission, 
rather than nonglobal civil judgments and settlements.  The MFCU 
director also reported, similar to other States, receiving few whistleblower 
complaints under the qui tam provisions of the Hawaii Civil False Claims 
Act.  Further, the Unit reported resource constraints and other practical 
and legal barriers to pursuing nonglobal civil fraud cases.  After our onsite 
review, the Unit reported that it was exploring avenues for producing 
more nonglobal civil cases, including screening referrals for potential civil 
action and opening a civil case when the facts do not support a criminal 
fraud case.  
 
 
27 Hawaii State Statutes  661-21661-31.  
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STANDARD 7  A Unit maintains case files in an effective manner and develops a case 
  management system that allows efficient access to case information 
and other performance data. 
Observation  The Unit generally maintained case files in an effective manner, but 
some practices did not allow for efficient access to case information.  
According to Performance Standard 7(e), the Unit should have an 
information management system that manages and tracks case 
information from initiation to resolution.  The Unit used an electronic 
case-file system that records and tracks all case information.  Overall, we 
determined that the case files were adequately maintained, but observed 
some practices that did not allow for efficient access to case information.  
For example, we found that Unit staff sometimes entered multiple 
documents into the electronic case management system containing 
separate yet repetitive pieces of information.  Some documents were not 
named or lacked a descriptive title.  We also found that once some cases 
were closed, the Unit would scan any remaining paper case files as a 
single attachment rather than attaching and labeling each document 
separately.  This made it difficult to locate particular documents and other 
information quickly and to understand investigations in their entirety.  
Based on our observations, we provided the Unit with technical assistance 
to further enhance its use of the electronic case management system. 
STANDARD 8  A Unit cooperates with OIG and other Federal agencies in the 
  investigation and prosecution of Medicaid and other healthcare fraud. 
Observation  The Unit established communication with Federal law enforcement 
partners and investigated cases jointly with OIG, but did not investigate 
cases with the U.S. Attorneys Office.  The Units collaboration with OIG 
had improved since the 2014 onsite review.  The MFCU established 
regular communication, held regularly scheduled meetings (at least once 
a quarter), and maintained a positive working relationship with OIG.  
During the quarterly meetings, the MFCU and OIG discussed new and 
potential cases, the sharing of resources, and training opportunities.  
The Unit investigated five joint cases with OIG during FYs 201618. 
The U.S. Attorneys Office also reported that its relationship and 
communication with the MFCU had improved in recent years.  Both the 
Unit and the U.S. Attorneys Office reported an interest in working cases 
together in the future, but, at the time of our review, the Unit had not 
presented any cases to the U.S. Attorneys Office for prosecution. 
 
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Observation  The Unit reported nearly all convictions and adverse actions to Federal 
partners within appropriate timeframes.  Standard 8(f) states that the 
Unit should transmit to OIG all pertinent information on convictions 
within 30 days of sentencing, including charging documents, plea 
agreements, and sentencing orders, so that convicted individuals could be 
excluded from Federal healthcare programs.  The Unit transmitted all but 
one conviction to OIG within 30 days of sentencing, with the remaining 
conviction transmitted 49 days after sentencing.  Similarly, the Unit 
reported all but one of the adverse actions to the National Practitioner 
Data Bank within 30 days of the final action occurring, which is a Federal 
requirement.28  This was an improvement from OIGs 2014 onsite review, 
when we found that 68 percent of adverse actions were reported to the 
National Practitioner Data Bank more than 91 days after the final adverse 
action.  The Unit explained that it had improved submission rates to OIG 
and the National Practitioner Data Bank by delegating all submitting and 
monitoring duties to its legal assistant.  
STANDARD 9  A Unit makes statutory or programmatic recommendations, when 
  warranted, to the State government. 
Observation  The Unit did not make recommendations to the State Medicaid agency 
during our review period.  Performance Standard 9 states, in part: 
[T]he Unit, when warranted and appropriate, makes statutory 
recommendations to the State legislature [. . . or] makes other regulatory 
or administrative recommendations regarding program integrity issues to 
the State Medicaid agency.  The MFCU did not identify any items that 
warranted a program recommendation during our review period. 
STANDARD 10  A Unit periodically reviews its Memorandum of Understanding (MOU) 
with the State Medicaid agency to ensure that it reflects current 
practice, policy, and legal requirements. 
 
OObbsseerrvvaattiioonn   The Units MOU with the State Medicaid agency reflected current 
practice, policy, and legal requirements.  The 2014 OIG onsite review 
found that the Units MOU with MQD did not reflect current law or 
practice.  During FYs 201618, the Unit had a current MOU with MQD 
that had been amended on July 7, 2015.  The MOU reflected current 
practice, policy, and legal requirements.  The MOU was renewed in 
June 2019.  
 
 
28 45 CFR 60.5.  See also SSA  1128E(g)(1) and 45 CFR 60.3. 
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STANDARD 11  A Unit exercises proper fiscal control over its resources. 
 
Observation  From our limited review, we did not identify deficiencies in the Units 
fiscal control of its resources.  From the responses to a detailed fiscal-
controls questionnaire and interviews with fiscal staff, we identified no 
issues related to the Units budget process, accounting system, property, 
or personnel.  In our inventory review, we located 30 of the 30 sampled 
inventory items. 
STANDARD 12  A Unit conducts training that aids in the mission of the Unit. 
 
Finding  The Unit experienced significant turnover of investigators and lacked 
sufficient fraud cases to adequately train new, inexperienced 
investigators on Medicaid fraud.  See page 9.  
Observations 
MFCU professional staff generally met the requirements outlined in 
their annual training plans; however, the MFCU did not always track 
and verify that requirements had been met.  We found that the Unit 
maintained a training plan for all professional disciplines (i.e., attorneys, 
investigators, and auditors) during FYs 201618.  The training plans 
required professional staff to complete a minimum number of training 
hours annually.  This was an improvement from OIGs 2014 onsite 
review, which found that the Unit lacked training plans for its 
professional staff.  In reviewing the Units training records for    
FYs 201618, we found that the MFCU professional staff generally 
met their training requirements.  However, we identified several 
instances where Unit investigators and auditors were noncompliant 
with parts of their training plans.     
According to Performance Standard 12(b), the Unit should ensure 
professional staffs compliance with their training plans and maintain 
records of the staffs compliance.  In reviewing the Units training 
records, we found that the Unit did not have a system for tracking and 
verifying whether staff met their training requirements.  For example, the 
training documentation that OIG received from the Unit included names 
of professional staff who attended trainings and the dates and locations 
of those trainings, but lacked information necessary for assessing 
compliance (e.g., corresponding hours for each completed training).  The 
lack of a tracking system for completed training hours can limit the 
Units ability to ensure that staff receive all necessary trainings and affect 
the Units overall effectiveness, especially during times of significant 
staff turnover.  
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MFCU staff reported challenges with attending some valuable 
trainings.  MFCU staff reported that it was sometimes difficult for staff to 
attend professional trainings, particularly those provided on the U.S. 
mainland, because it was cost prohibitive due to the remoteness of 
Hawaii.  For example, roughly two thirds of the MFCU investigators hired 
during our review period were unable to attend trainings provided by 
NAMFCU within their first year on the job.  Unit management explained 
that the ability to attend a NAMFCU training is subject to available funding 
and supervisory approval.  NAMFCU trainings, while highly valuable, are 
often booked well in advance due to their popularity, and some of the 
Units new investigators were placed on a wait-list as a result.29 
 
 
 
   
 
29 NAMFCU offers MFCU employees several 3-day training courses, including 
Medicaid 101, an introduction to Medicaid fraud; Medicaid 102A, which focuses on four 
areas of fraud and is designed for experienced MFCU employees; Medicaid 102B, which 
focuses on three additional areas of fraud; and Medicaid 103, which focuses on complex 
fraud schemes within different topic areas and is designed for the most experienced 
MFCU employees. 
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APPENDIX B: Detailed Methodology 
The onsite review team consisted of OIG evaluators and agents, as well as 
a director from another State MFCU.  Our pre-onsite analysis identified 
low case outcomes as an area of concern.  To assist the Unit in identifying 
ways to improve its case outcomes, we focused our data collection and 
analysis primarily on the factors that contributed to low case outcomes 
during FYs 201618. 
We analyzed qualitative and quantitative data from a variety of 
sources, including:  
  case outcome data;  
  referral data associated with the MFCU;  
  other documentation that the MFCU submitted to OIG; 
  structured interviews with MFCU staff and key stakeholders; 
  onsite review of case files; 
  onsite observations; and 
  documentation related to the MFCUs fiscal controls.  
Data Collection     Case outcomes.  Prior to the onsite visit, we examined statistical reports 
and other documentation that the MFCU submitted to OIG.  This included 
and Analysis 
MFCU case outcome data pertaining to FYs 201618 and the previous    
3-year period (FYs 201315).  We examined five case outcome measures: 
(1) the number of fraud convictions; (2) the number of convictions of 
patient abuse or neglect; (3) the amount of monetary recoveries 
associated with criminal convictions; (4) the number of civil settlements 
and judgments; and (5) the amount of monetary recoveries associated 
with civil cases.   
For each measure, we performed two types of comparative analysis.  
We compared outcomes for the Hawaii MFCU during each period of 
3 fiscal years to determine whether outcomes changed during               
FYs 201618.  We also compared Hawaiis case outcomes for FYs 201618 
to those of other similarly sized MFCUs.30  In FY 2018, 13 similarly sized 
MFCUs had staffs ranging in size from 11 to 17 employees; the Hawaii 
MFCU had a staff size of 16 employees.  Our analysis showed that the 
Hawaii MFCUs case outcomes were among the lowest compared to other 
similarly sized MFCUs during FYs 201618 and its criminal convictions had 
declined from the previous 3-year period.  The low case outcomes were 
true for both criminal and nonglobal civil cases.  Exhibit B-1 displays the 
 
30 Although comparison across similarly sized MFCUs provides context for the case 
outcomes of a particular MFCU, many factors other than a MFCUs staff size can affect 
case outcomes. 
 
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Hawaii MFCUs case outcomes during FYs 201618 and FYs 201315, and 
the median for case outcomes among other similarly sized Units during 
FYs 201618.31 
Exhibit B-1: Hawaii MFCU case outcomes during FYs 201618 compared to those from the previous 
3-year period and those of other similarly sized MFCUs 
Hawaii MFCU  Similarly Sized MFCUs 
 
Type of Case  Outcome  FYs 201315  FYs 201618  FYs 201618 Median 
Indictments  19  19  37 
Fraud convictions  12  8  20 
Criminal 
Patient abuse or neglect 
12  4  4.5 
convictions 
Criminal recoveries  $147,401  $147,021  $1,214,379 
Settlements and judgments   3  5  7.5 
Nonglobal Civil 
Recoveries  $261,000  $65,678  $3,431,948 
Settlements and judgments   26  28  31 
Global Civil 
Recoveries  $5,072,487  $4,063,624  $8,565,833 
Source: OIG, Medicaid Fraud Control Units, Expenditures and Statistics.  Accessed at https://oig.hhs.gov/fraud/medicaid-fraud-control-units-
mfcu/index.asp on April 23, 2019. 
Referrals of fraud and patient abuse or neglect.  We examined data 
associated with referrals that the MFCU received from a variety of sources.  
This included the number of referrals that the MFCU reported receiving 
during FYs 201618; the number of referrals from the previous 3-year 
period; and the number of referrals received by other similarly sized 
MFCUs during FYs 201618.  These referral-related data included referrals 
relating to both general types of cases that the MFCU handles: those 
regarding fraud and those regarding patient abuse or neglect.  We also 
examined the processes that the MFCU used for monitoring the opening 
of cases, and we examined the outcomes of cases.  We also reviewed the 
MFCUs MOU with the Hawaii Medicaid program, which is administered 
by MQD. 
Other documentation.  We examined the MFCUs policies and procedures 
and held discussions with MFCU management to gain an understanding 
of those policies and procedures.  We confirmed with the MFCU director 
that the information we had was current, and we requested any additional 
data and clarification that we needed to perform this review.  We also 
examined data associated with the MFCUs staff, both to identify the 
number of MFCU staff and to determine how long each staff member had 
 
31 In FY 2019 (after our review period), the MFCU reported four fraud convictions, one of 
which resulted in a $3.8 million recovery, which represented a substantial increase in the 
amount of monetary recoveries from previous years.    
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been at the MFCU during the period of FYs 201618.  Finally, we analyzed 
data on annual training to evaluate the MFCU staffs adherence to its 
training plans. 
Interviews with the MFCU staff and director.  We conducted interviews 
with 11 MFCU staff, including the MFCU director.32  These interviews 
focused on case outcomesspecifically, why they were low during 
FYs 201618 and how to improve them.  The interviews were informed by 
our analysis of the MFCUs case-outcomes data, other documentation, 
and stakeholder interviews.  We asked MFCU staff to provide us with any 
additional context that could help us understand the MFCUs operations.  
Subsequent to the onsite review, we followed up with the MFCU director 
to clarify certain data we collected onsite and to gather further 
information.  
Key stakeholder interviews.  In February and March 2019, we interviewed 
individual stakeholders from nine entities who were familiar with the 
MFCUs operations.  Staff conducting the structured interviews included 
OIG evaluators and agents and a MFCU director from another State.  
Stakeholders whom we interviewed included: a supervisor and manager 
from MQD; a special agent with the States Department of Public Safety 
Narcotics Enforcement Division; a manager from APS; the supervising 
Deputy Attorney General in the Criminal Justice Division of the 
Department of the Attorney General;33 representatives from the States 
largest MCOs; managers, attorneys, and an investigator with the U.S. 
Attorneys Office; two agents from the Defense Criminal Investigative 
Service within the Department of Defense Office of Inspector General; two 
agents from the Federal Bureau of Investigation; and another OIG agent 
who worked closely with the MFCU.  
We focused these interviews on: (1) the MFCUs relationship and 
interactions with these entities; (2) any areas in which stakeholders 
believed the MFCU had opportunities for improvement; and (3) practices 
that may be beneficial to the MFCUs operations or to other MFCUs.  
As needed, we followed up with some of the interviewees after the 
onsite review. 
Case-file reviews.  We asked the MFCU to provide us with a list of cases 
that were open at any point during FYs 201618, and we asked the Unit to 
include the current status of the case; whether the case was criminal, civil, 
or global; and the date on which the case was opened and closed, if 
applicable.  The total number of cases that met these parameters was 464.  
We then excluded a total of 138 cases from our review.  We excluded 
133 global cases because they are civil false claims actions that typically 
involve multiple agencies, such as the U.S. Department of Justice and a 
 
32 We did not interview all support staff. 
33 The supervising Deputy Attorney General supervises the MFCU director. 
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group of State MFCUs.  We also excluded five agency assist cases because 
the Unit does not lead these investigations; instead, the Unit provides 
assistance to another law enforcement agency in charge of the case. 
From the 326 remaining case files, we selected a simple random sample of 
84 cases.  With the assistance of OIG agents and the MFCU director from 
another State, we reviewed the MFCUs processes for monitoring the 
opening, status, and outcomes of these cases.34  We also reviewed the 
MFCUs approach to investigating and prosecuting cases that were open 
at some point during FYs 201618. 
Onsite observations.  While onsite, we examined the MFCUs workspace 
and operations to identify any instances of nonadherence to performance 
standards and/or instances of noncompliance with applicable Federal 
laws, regulations, and OIG policy transmittals.  We also evaluated the 
security of the MFCUs case files and the functionality of the MFCUs 
electronic system for tracking case files.  Our examination of the MFCUs 
workspace and operations while onsite did not result in any findings.  
Review of MFCU financial documentation.  We conducted a limited review 
of the MFCUs control over its fiscal resources.  Prior to the onsite review, 
we analyzed the MFCUs response to an internal-controls questionnaire 
and conducted a desk review of the MFCUs financial status reports.  We 
followed up with MFCU officials to clarify issues identified in the internal-
controls questionnaire.  We also selected a purposive sample of 30 items 
from the current inventory list of 158 items required to be maintained in 
the MFCUs office and verified those items resided onsite. 
   
 
34 To verifyin the absence of documentationwhether the periodic reviews for these 
files had been conducted, we followed up with the MFCU staff.   
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APPENDIX C: Hawaii MFCU Referrals Received, by 
Source, FYs 201618 
Exhibit C-1: Hawaii MFCU referrals received during FYs 201618, separated by source and type of 
criminal case 
  FY 2016  FY 2017  FY 2018  3-Year Total 
Abuse  Abuse  Abuse  Abuse 
Referral 
Fraud  &  Fraud  &  Fraud  &  Fraud  &  Total 
Source 
Neglect1  Neglect  Neglect  Neglect 
Adult 
Protective  0  1,737  0  1,909  0  2,302  0  5,948  5,948 
Services 
Anonymous  0  0  0  0  1  1  1  1  2 
HHSOffice 
of Inspector  0  0  0  0  0  0  0  0  0 
General (OIG) 
Long-Term 
Care  0  0  0  0  0  0  0  0  0 
Ombudsman 
Managed Care 
0  0  0  0  0  0  0  0  0 
Organizations 
Medicaid 
Agency 8  0  7  0  2  0  17  0  17 
MQD 
Other Law 
0  0  0  0  0  0  0  0  0 
Enforcement 
Private 
0  0  0  0  3  3  3  3  6 
Citizens 
Private Health 
0  0  0  0  0  0  0  0  0 
Insurer 
Provider  0  0  0  0  0  0  0  0  0 
State 
Agency 0  0  0  0  1  0  1  0  1 
Other 
Other  0  0  0  0  0  1  0  1  1 
Total  8  1,737  7  1,909  7  2,307  22  5,953  5,975 
Source: OIG analysis of Unit Annual Statistical Reports FYs 201618. 
1 The category Abuse & Neglect includes patient fund referrals. 
 
 
Hawaii Medicaid Fraud Control Unit: 2019 Onsite Review  26 
OEI-06-19-00110   
APPENDIX D: Point Estimates and 95-Percent 
Confidence Intervals of Case-File Reviews 
Exhibit D-1: Point estimates and 95-percent confidence intervals of case-file reviews 
95-Percent Confidence 
 Estimate Description  Sample Size   Point  Interval 
Estimate 
Lower  Upper 
Percentage of All Cases That Had Supervisory 
84  98.8%  94.0%  99.7% 
Approval To Open 
Percentage of All Cases Closed at the Time of 
84  90.5%  83.1%  95.5% 
Our Review 
Percentage of All Closed Cases That Had 
76  100.0%  95.7%  100.0% 
Supervisory Approval To Close 
Percentage of All Case Files Open Longer Than 
84  58.3%  48.3%  67.7% 
90 Days 
Percentage of All Cases Open Longer Than     
90 Days and That Had Periodic Supervisory 
49  95.9%  87.0%  99.0% 
Reviews At Least Every 90 Days  
Source: OIG analysis of Hawaii MFCU case files, 2019. 
 
 
      
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OEI-06-19-00110   
APPENDIX E: UNIT COMMENTS 
 
   
Hawaii Medicaid Fraud Control Unit: 2019 Onsite Review  28 
OEI-06-19-00110   
 
Hawaii Medicaid Fraud Control Unit: 2019 Onsite Review  29 
OEI-06-19-00110   
ACKNOWLEDGMENTS 
Anthony Soto McGrath served as the team leader for this study.  Others in 
the Office of Evaluation and Inspections (OEI) who conducted the study 
include Anna Brown, Kristen Calille, and Petra Nealy.  Medicaid Fraud 
Policy and Oversight Division staff who participated in the review include 
Susan Burbach.  OEI staff who provided support include Kevin Farber and 
Frank Rogers.   
Office of Investigations staff and a peer reviewer from another State 
MFCU also participated in this review.  
This report was prepared under the direction of Ruth Ann Dorrill, Regional 
Inspector General for Evaluation and Inspections in the Dallas regional 
office, and Petra Nealy, Deputy Regional Inspector General, as well as in 
consultation with Richard Stern, Director of the Medicaid Fraud Control 
Policy and Oversight Division. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
To obtain additional information concerning this report or to obtain 
copies, contact the Office of Public Affairs at Public.Affairs@oig.hhs.gov. 
Hawaii Medicaid Fraud Control Unit: 2019 Onsite Review  30 
OEI-06-19-00110   
ABOUT THE OFFICE OF INSPECTOR GENERAL 
The mission of the Office of Inspector General (OIG), as mandated by 
Public Law 95452, 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  The Office of Audit Services (OAS) provides auditing services for HHS, 
either by conducting audits with its own audit resources or by overseeing 
Services 
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  The Office of Evaluation and Inspections (OEI) conducts national 
evaluations to provide HHS, Congress, and the public with timely, useful, 
and Inspections 
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  The Office of Investigations (OI) conducts criminal, civil, and 
administrative investigations of fraud and misconduct related to HHS 
Investigations 
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 Office of Counsel to the Inspector General (OCIG) provides general 
legal services to OIG, rendering advice and opinions on HHS programs 
the Inspector General 
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 healthcare 
industry concerning the anti-kickback statute and other OIG 
enforcement authorities.