Department of Health and Human Services 
OFFICE OF 
 
INSPECTOR GENERAL 
 
 
 
 
 
 
V CMS
UL  NERABILITIES IN  S 
 
C 
  AND  ONTRACTORS  
 
A T D
CT  IVITIES  O  ETECT AND 
 
D F
ETER  RAUD IN 
C M
OMMUNITY  ENTAL 
H C  
EALTH  ENTERS
 
Daniel R. Levinson  
Inspector General 
 
January 2013 
OEI-04-11-00101   
   
EXECUTIVE SUMMARY:  VULNERABILITIES IN CMSS AND 
CONTRACTORS ACTIVITIES TO DETECT AND DETER FRAUD IN 
COMMUNITY MENTAL HEALTH CENTERS 
OEI-04-11-00101 
 
WHY WE DID THIS STUDY  
 
During 2010, 206 community mental health centers (CMHC) received an estimated 
$218.6 million for providing partial hospitalization program services to approximately 
25,000 Medicare beneficiaries.  Arrests by Medicare Fraud Strike Forces indicate that 
some parts of the country have a higher prevalence of CMHC fraud, including areas in 
Florida, Louisiana, and Texas.  A recent Office of Inspector General (OIG) study found 
that approximately half of CMHCs exhibited questionable billing in 2010, most of which 
were in Florida, Louisiana, and Texas.  Other OIG studies have found problems with the 
Centers for Medicare & Medicaid Services (CMS) oversight of contractors.   
 
HOW WE DID THIS STUDY 
 
We collected information and documentation from CMS, Medicare Administrative 
Contractors (MAC), and Zone Program Integrity Contractors (ZPIC) regarding activities 
to detect and deter fraudulent CMHC billing in 2010.  We also analyzed Medicare claims 
data from the National Claims History Outpatient File to determine the extent to which 
Medicare paid CMHCs subject to payment suspensions, revocations, or selected autodeny 
edits in 2010.  
     
WHAT WE FOUND 
 
One of nine MACs we reviewed performed activities to detect and deter CMHC fraud in 
2010, and most of these were part of a CMS-led special project.  Activities to detect and 
deter CMHC fraud varied substantially among ZPICs in 2010, with one ZPIC performing 
almost all such activities.  Most of these activities were part of the same CMS-led special 
project.  Other MACs and ZPICs performed minimal activities to detect and deter 
fraudulent CMHC billing, despite having jurisdiction over fraud-prone areas.  
Additionally, Medicare paid CMHCs that did not comply with its requirements after their 
revocations were effective and while their revocations were being approved.  Medicare 
also could have prevented payments to potentially fraudulent CMHCs by consistently 
applying an autodeny edit across Florida CMHCs.   
 
WHAT WE RECOMMEND 
 
We recommend that CMS (1) implement additional CMHC fraud mitigation activities in 
all fraud-prone areas, (2) develop a system to track revocation recommendations and 
improve revocation communication with contractors, (3) coordinate activities to deter 
CMHC fraud in Florida, and (4) follow up on payments made to CMHCs after the 
effective dates of their billing privilege revocations.  CMS concurred with all four 
recommendations.
   
TABLE OF CONTENTS 
 
Objectives ....................................................................................................1 
Background ..................................................................................................1 
Methodology ..............................................................................................10 
Findings......................................................................................................13 
One of nine MACs we reviewed performed activities to detect    
and deter CMHC fraud in 2010, and most were part of a         
CMS-led special project .................................................................13 
Activities to detect and deter CMHC fraud varied substantially 
among ZPICs in 2010 ....................................................................14 
Medicare paid CMHCs that did not comply with its requirements 
in 2010 and could have prevented payments to potentially 
fraudulent CMHCs .........................................................................18 
Conclusion and Recommendations ............................................................21 
Agency Comments and Office of Inspector General Response .....23 
Appendixes ................................................................................................24 
A:  Number of Community Mental Health Centers and Medicare 
Payments by State, 2010 ................................................................24 
B:  Medicare Administrative Contractor Jurisdictions...................25 
C:  Zone Program Integrity Contractor Zones ...............................26 
D:  Medicare Administrative Contractor Activities To Detect and 
Deter Fraud, 2010 ..........................................................................27 
E:  Zone Program Integrity Contractor Activities To Detect and 
Deter Fraud, 2010 ..........................................................................28 
F:  Agency Comments ....................................................................29 
Acknowledgments......................................................................................32 
 
   
   
OBJECTIVES 
To determine the extent to which: 
1.  the Centers for Medicare & Medicaid Services (CMS) and selected 
contractors performed activities to detect and deter fraudulent billing 
by community mental health centers (CMHC) in 2010 and 
2.  Medicare paid CMHCs that were subject to payment suspensions, 
revocations, or selected electronic edits because of suspected fraud.  
BACKGROUND 
Medicare Part B covers partial hospitalization programs (PHP) that 
CMHCs provide to Medicare beneficiaries.1  During 2010, 206 CMHCs in 
25 States received approximately $218.6 million for providing PHP 
services to approximately 25,000 beneficiaries.2  See Appendix A for the 
number of CMHCs and total Medicare payments to CMHCs by State in 
2010.   
PHP Services and Requirements 
PHPs are intense, structured outpatient mental health treatment programs.3  
They are designed for patients moving from an inpatient level of 
psychiatric care to outpatient care or for patients at risk of relapse or 
hospitalization.4 
To qualify for PHPs, Medicare beneficiaries must: 
  have a mental disorder that severely interferes with multiple areas of 
their daily lives, including social, vocational, and/or educational 
functioning;5 
  be cognitively and emotionally capable of participating in treatment;6 
and 
  be under an individualized treatment plan established and periodically 
reviewed by a physician.7 
 
1 Social Security Act,  1832(a)(2)(J), 42 U.S.C.  1395k(a)(2)(J). 
2 In 2010, 24 States and 1 territory had CMHCs that received Medicare reimbursement.  
Hereinafter, we refer to the States and territories as States. 
3 Social Security Act,  1861(ff)(3)(A), 42 U.S.C.  1395x(ff)(3)(A). 
4 CMS, Medicare Benefit Policy Manual, Pub. No. 100-02, ch. 6,  70.3.B.1. 
5 Ibid., ch. 6,  70.3. 
6 Ibid. 
7 42 CFR  424.24(e)(2); CMS, Medicare Benefit Policy Manual, Pub. No. 100-02, ch. 6, 
 70.3.B.5.c. 
Vulnerabilities in CMSs and Contractors Activities To Detect and Deter Fraud in Community Mental Health Centers  1 
(OEI-04-11-00101) 
   
   
Additionally, PHPs must offer individual, group, family, occupational, and 
activity therapies.8  Beneficiaries must receive a minimum of 20 hours of 
covered services per week.9   
To be eligible for Medicare reimbursement for PHPs, CMHCs must offer 
the following: 
  outpatient services, 
  24-hour emergency services, 
  screening services, and  
  PHPs.10   
Medicare reimburses CMHCs only for PHPs; other payers, including 
Medicaid, may cover the other three types of services.11   
CMHC Medicare Fraud 
Findings from an Office of Inspector General (OIG) report and results of 
Federal investigations indicate that CMHCs may be particularly 
vulnerable to fraud, waste, and abuse involving PHP services.  They also 
indicate that certain areas are more prone to CMHC fraud than others.  For 
example, an OIG report on questionable billing patterns in CMHCs found 
that approximately 82 percent (84 of 102) of CMHCs exhibiting 
questionable billing were located in Florida, Louisiana, and Texas.12  Eight 
cities within those States contained high percentages of CMHCs with 
questionable billing.  
The Medicare Fraud Strike Force (Strike Force) is an essential component 
of the Health Care Fraud Prevention and Enforcement Action Team 
(HEAT), a joint effort between the Department of Health and Human 
Services (HHS) and the Department of Justice (DOJ) to combat health 
care fraud.13  Strike Force teams are designed to identify and investigate 
fraud and prosecute perpetrators quickly.  They are composed of Federal 
prosecutors, agents from OIG and the Federal Bureau of Investigation, and 
 
8 Social Security Act,  1861(ff)(2), 42 U.S.C.  1395x(ff)(2); 42 CFR  410.43(a)(4); 
CMS, Medicare Benefit Policy Manual, Pub. No. 100-02, ch. 6,  70.3.B.2. 
9 CMS, Medicare Benefit Policy Manual, Pub. No. 100-02, ch. 6,  70.3.B.1. 
10 Social Security Act,  1861(ff)(3)(B)(i)(I), 42 U.S.C.  1395x(ff)(3)(B)(i)(I); Public 
Health Service Act,  1913(c)(1), 42 U.S.C.  300x-2(c)(1); 42 CFR  410.2 and 
410.110. 
11 Social Security Act,  1866(e)(2), 42 U.S.C.  1395cc(e)(2). 
12 OIG, Questionable Billing by Community Mental Health Centers, OEI-04-11-00100, 
August 2012. 
13 Medicare Strike Force teams are located in Miami, Tampa, Baton Rouge, Houston, 
Dallas, Los Angeles, Detroit, Brooklyn, and Chicago. 
Vulnerabilities in CMSs and Contractors Activities To Detect and Deter Fraud in Community Mental Health Centers  2 
(OEI-04-11-00101) 
   
   
in some cases State and local law enforcement agencies.  Strike Force 
teams are supported by data analysts and CMS program experts.14   
Strike Force investigations have led to charges against several CMHC 
operators in a few key cities from 2009 to 2012.  For example, four 
CMHC owners and managers in Miami pleaded guilty to or were 
convicted of Medicare fraud in 2011.  These individuals manipulated 
patients charts, diagnoses, and lengths of stay to fraudulently bill 
Medicare approximately $205 million for medically unnecessary PHP 
services from 2003 to 2010.15  In another case, a Strike Force team 
charged seven individuals in Baton Rouge in April 2012 for allegedly 
fraudulently billing Medicare approximately $225 million from 2005 to 
2011.16  In December 2011, Strike Forces arrested three individuals in 
Houston for allegedly participating in a scheme that resulted in more than 
$90 million in fraudulent billing from 2006 to 2011.17  These schemes 
involved fraudulent billing for mental health services, including PHP 
services.  
The previously mentioned OIG report identified eight cities that had high 
percentages of questionable billing CMHCs.  Independent of the report, 
Strike Force activities led to CMHC operator arrests in three of these same 
cities (Baton Rouge, Houston, and Miami).  We identified these cities as 
prone to CMHC fraud (see Figure 1). 
 
 
 
 
 
 
 
 
14 HHS, Strike Force Formed to Target Fraudulent Billing of Medicare Program by 
Health Care Companies.  Accessed at 
http://www.hhs.gov/news/press/2007pres/05/20070509c.html on February 24, 2012. 
15 DOJ, Owner of Miami-area mental health care corporation convicted on all counts for 
orchestrating $205 million Medicare fraud scheme.  Accessed at 
http://www.justice.gov/opa/pr/2011/August/11-crm-1074.html on August 23, 2011. 
16 DOJ, Medicare Fraud Strike Force Charges 107 Individuals for Approximately      
$453 Million in False Billing.  Accessed at http://www.justice.gov/opa/pr/2012/May/12-
ag-568.html on June 20, 2012.  
17 DOJ, Owners of Houston Mental Health Company and Assisted Living Facility 
Indicted for Alleged Roles in $90 Million Medicare Fraud Scheme.  Accessed at 
http://www.justice.gov/opa/pr/2011/December/11-crm-1639.html on February 24, 2012. 
Vulnerabilities in CMSs and Contractors Activities To Detect and Deter Fraud in Community Mental Health Centers  3 
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Figure 1: Fraud-Prone Areas  
 
 
 
 
 
 
 
 
 
 
 
  Strike Force City  
Strike Force City  With Fraud Cases Against CMHC Operators  
 
City Having High Percentage of CMHCs With Questionable Billing 
Source:  OIG analysis of HEAT Strike Force Cities, DOJ press releases, and CMHCs with questionable billing.  
 
CMS and Medicare Contractor Coordination 
CMS contractors assist in the oversight and administration of Medicare.  
Oversight tasks include detecting and deterring fraud; administrative tasks 
include processing Medicare claims.  CMS directs contractor activities by 
issuing statements of work, publishing program manuals, and offering 
technical guidance.  CMS also may inform contractors of oversight or 
administrative activities that have been successful in other jurisdictions.  
Contractors may consider implementing, but are not required to 
implement, these activities in their own jurisdictions.   
CMS approval is required before certain contractor-initiated sanctions may 
be implemented.18  For example, CMS responds to Zone Program Integrity 
Contractors (ZPIC) recommendations to suspend Medicare payments to 
providers.19  Once a suspension has been imposed, Medicare 
Administrative Contractors (MAC) review either 100 percent of claims or 
 
18 CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 3,  3.9.2.1          
(Rev. 282, January 1,  2009).  This provision was moved  to CMS, Medicare Program 
Integrity Manual, Pub. No. 100-08,  ch. 8,  8.3.2.1.    
19 The initial approval is for a payment suspension period  of  up to  180 days, with the 
option to extend  for an additional 180  days.  Providers may not appeal suspensions.  
CMS determines which action, if any, ZPICs should take.  CMS, Medicare Program 
Integrity Manual, Pub. No. 100-08, ch.  3,  3.9.2.4 (Rev. 282, January 1,  2009).  This  
provision has been moved to  CMS, Medicare Program Integrity Manual, Pub. No.     
100-08,  ch. 8,  8.3.2.4.  
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providers.19  Once a suspension has been imposed, Medicare 
Administrative Contractors (MAC) review either 100 percent of claims or 
a statistical sample to determine the percentage of suspended claims that 
are payable.20   
In some instances, CMS approval is required to implement revocations of 
providers and suppliers Medicare billing privileges.21  There is no 
timeframe or requirement for CMS to approve or deny ZPIC 
recommendations for revocation, and providers and suppliers may 
continue to bill Medicare in the intervening time.  Provider and supplier 
billing privileges may be revoked for 1 to 3 years, and providers may not 
reenroll in Medicare or receive payment during that time.  Once provider 
billing revocations are finalized, MACs are instructed to document these 
providers and suppliers in the Provider Enrollment, Chain and Ownership 
System.22  
MACs  
The Medicare Prescription Drug, Improvement, and Modernization Act of 
2003 mandated that the Secretary of HHS replace current claims payment 
contractors, such as fiscal intermediaries (FI), with MACs.23, 24  CMS 
 
19 The initial approval is for a payment suspension period of up to 180 days, with the 
option to extend for an additional 180 days.  Providers may not appeal suspensions.  
CMS determines which action, if any, ZPICs should take.  CMS, Medicare Program 
Integrity Manual, Pub. No. 100-08, ch. 3,  3.9.2.4 (Rev. 282, January 1, 2009).  This 
provision has been moved to CMS, Medicare Program Integrity Manual, Pub. No.     
100-08, ch. 8,  8.3.2.4. 
20 Ibid., ch. 3,  3.9.2.3.1 (Rev. 282, January 1, 2009).  This provision has been moved to 
CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 8,  8.3.2.3.1. 
21 CMS and/or MACs may revoke a providers or suppliers Medicare billing privileges 
for several reasons.  MACs must obtain CMS approval to revoke a providers or a 
suppliers billing privileges resulting from instances in which the provider or supplier 
submits a claim for services or supplies that could not have been furnished on the date of 
service.  MACs may revoke a providers or a suppliers billing privileges for any of the 
other listed reasons without CMS approval.  The length of the revocation depends on the 
type of infraction.  Providers and suppliers may appeal revocations.  CMS, Medicare 
Program Integrity Manual, Pub. No. 100-08, ch. 15,  15.27.2.   
22 CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 15,  15.27.2.D. 
23 Medicare Prescription Drug, Improvement, and Modernization Act of 2003,                
P.L. 108-173,  911; Social Security Act,  1874A; HHS, Report to Congress, Medicare 
Contracting Reform:  A Blueprint for a Better Medicare, February 7, 2005. 
24 CMS has contracts with three different types of MACs to process three different types 
of Medicare claims, including (1) durable medical equipment (DME), (2) home health 
and hospice (HH&H), and (3) other Part A and Part B claims (A/B).  Four DME MAC 
jurisdictions (which cover the entire country) are responsible for processing all durable 
medical equipment claims.  Four HH&H MAC jurisdictions (which also cover the entire 
country) are responsible for processing all home health and hospice claims.  Lastly, 15 
A/B MAC jurisdictions (which also cover the entire country) are responsible for 
processing all other Part A and Part B claims.  This report covers only A/B MACs, and 
we will refer to these contractors simply as MACs. 
Vulnerabilities in CMSs and Contractors Activities To Detect and Deter Fraud in Community Mental Health Centers  5 
(OEI-04-11-00101) 
   
   
established 15 jurisdictions in which MACs operate.25  Each jurisdiction 
covers multiple States.26  CMS typically contracts with a different private 
company to serve as a MAC in each jurisdiction.   
As of November 2012, MACs were operational in 12 jurisdictions.27  
Appendix B provides a map of MACs and the States in each jurisdiction.  
However, not all providers in the States listed in Appendix B are under the 
jurisdiction of the MAC for their States.  Some CMHCs in a State with an 
active MAC are still under the jurisdiction of an FI.28 
MACs are responsible primarily for processing and paying Medicare 
claims correctly, reliably, and in as timely a fashion as possible.29  To 
accomplish this, MACs process claims and collaborate with CMS and 
other contractors to ensure that claims are paid correctly.30   
MACs also are responsible for preventing Medicare from paying for 
inappropriate services by educating providers on appropriate billing 
methods.31  They also review claims for errors using computer processing 
tools; update coverage determinations; and recoup any overpayments that 
they, or any other contractor, identify.32  MACs are also responsible for 
promoting the fiscal integrity of Medicare by detecting and deterring 
fraud.33   
MACs are expected to perform a number of activities to detect fraud.  For 
example, MACs screen beneficiary complaints, perform medical record 
 
25 Over the next several years, CMS plans to further consolidate the MACs for Parts A 
and B from 15 to 10 jurisdictions.  CMS, A/B MAC Jurisdictions.  Accessed at 
https://www.cms.gov/MedicareContractingReform/ on November 30, 2011.  
26 Jurisdictions also may cover territories. 
27 The 12 MACs operational by November 2012 were for jurisdictions 1, 3, 4, 5, 8, 9, 10, 
11, 12, 13, 14, and 15.  A contract for jurisdiction 6 was awarded in January 2009 but 
was subject to a bid corrective action and protest; the MAC is expected to be operational 
in January 2013.  Also, a contract for jurisdiction 7 was not awarded as of November 
2012.  Jurisdiction F, which consolidated jurisdictions 2 and 3, became operational in 
February 2012.  Jurisdiction H, which consolidated jurisdictions 4 and 7, became 
operational in November 2012.  Until consolidation is complete, some FIs and carriers 
continue to process Medicare claims in jurisdiction 6. 
28 Until March 2006, CMHCs were allowed to select their own claims payment 
contractors.  Some CMHCs continue to use these contractors.  CMS, Medicare Claims 
Processing Manual, Pub. No. 100-04, ch. 1  20.  
29 CMS, Part A and Part B Medicare Administrative Contractor Statement of Work, 
Attachment J-1, Master,  C.4.4.a, September 2011. 
30 This includes preventing improper payments by reviewing claims.  CMS, Medicare 
Program Integrity Manual, Pub. No 100-08, ch. 3,  3.3.1 
31 Ibid., ch. 1,  1.3, and ch. 3,  3.1. 
32 Ibid., ch. 1,  1.3.1.B; and ch. 3,  3.8. 
33 CMS, Part A and Part B Medicare Administrative Contractor Statement of Work, 
Attachment J-1, Master,  C.4.4.a and C.5.13, September 2011. 
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reviews, conduct site visits to problematic providers when instructed by 
CMS, and refer providers suspected of fraud to ZPICs for investigation.34   
MACs collaborate with CMS and ZPICs to deter fraud.35  In some 
instances, CMS or MAC approval is required to implement ZPIC 
recommendations to revoke the billing privileges of providers and 
suppliers.36  MACs may also independently revoke the billing privileges of 
providers and suppliers.37  MAC approval is also required to implement 
ZPIC recommendations to deactivate providers that have not billed 
Medicare in a calendar year.38 Once deactivated, providers must reenroll 
before they may bill Medicare.39     
MACs and ZPICs also work together to create autodeny edits, which are 
electronic payment system controls intended to prevent payment for 
potentially fraudulent claims.40, 41  These edits analyze claims attributes 
and automatically prevent Medicare from paying claims based on 
suspicious attributes.  For example, some edits prevent payment for all 
services submitted by suspicious providers.  Other edits prevent payment 
for certain types of services for beneficiaries identified as part of a fraud 
scheme for specific services.     
Lastly, MACs must ensure that Medicare does not pay sanctioned 
providers (i.e., those with payment suspensions, revoked billing privileges, 
deactivations, or Federal health care program exclusions).42   
ZPICs  
The Medicare Prescription Drug, Improvement, and Modernization Act of 
2003 made a number of changes related to Medicare contractors, including 
authorizing CMS to replace the current Program Safeguard Contractors 
 
34 CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 4,  4.3 and 4.6.2; 
ch. 3,  3.1; ch. 10,  22.  Accessed at 
http://www.cms.gov/manuals/downloads/pim83c03.pdf on March 23, 2011; CMS, Part A 
and Part B Medicare Administrative Contractor Statement of Work, Attachment J-1, 
Master,  C.5.12.1.5, September 2011. 
35 Ibid.,  C.1.4.1.1, September 2011. 
36 CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 15,  15.27.2. 
37 Ibid., ch. 15,  15.27. 
38 Ibid., ch. 15,  15.27.1.   
39 There is no set amount of time before which these providers may not reenroll.  Ibid.,    
ch. 15,  15.27.1.   
40 CMS, ZPIC IDIQ Umbrella Statement of Work,  2.2, May 2009. 
41 ZPICs may also recommend overpayment recoupment and civil monetary penalties to 
deter potential fraud. 
42 CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 4,  4.19.1; ch. 15,    
 15.27.1; ch. 3,  3.9 (Rev. 282, January 1, 2009).  This provision has been moved to 
CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 8,  8.3. 
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(PSC) with ZPICs.43  CMS established seven zones in which ZPICs 
operate.  Each zone covers multiple States.44  A private company serves as 
a ZPIC in each zone.  
As of November 2012, ZPICs were operational in six of the seven zones.45  
Appendix C provides a map of ZPICs and the States in each zone.  
However, not all providers in the States listed in Appendix C are under the 
jurisdiction of the ZPIC for their States.  Some CMHCs in a State with an 
active ZPIC are still under the jurisdiction of a PSC.46 
ZPICs are responsible primarily for detecting and deterring Medicare 
fraud.47   
Detecting Fraud.  ZPICs perform a number of activities to detect fraud.  
For example, ZPICs identify potential fraud through internal sources, such 
as data analysis, and external sources, such as referrals from MACs.48   
ZPICs investigate providers they have identified as potentially 
fraudulent.49  ZPICs may conduct a range of activities when investigating 
providers, but their Statement of Work and CMS manuals do not specify 
any required activities.  For example, ZPICs may opt to perform 
prepayment and postpayment reviews of claims submitted by providers 
under investigation to determine medical necessity.  They also may 
conduct onsite audits to examine records and interview providers under 
investigation.   
Deterring Fraud.  ZPICs collaborate with law enforcement, CMS, and 
MACs to deter fraudulent provider billing.50  For example, ZPICs refer 
cases of suspected fraud to OIG, DOJ, or other law enforcement agencies 
for criminal investigation.51  ZPICs also may recommend that CMS 
suspend payments to providers because of potential fraud and 
overpayments.  They may recommend that CMS or MACs revoke the 
billing privileges of providers and suppliers for noncompliance with 
 
43 Medicare Prescription Drug, Improvement, and Modernization Act of 2003,             
P.L. 108-173,  911.  
44 Zones also may cover territories. 
45 The six ZPICs operational by November 2012 were in zones 1, 2, 3, 4, 5, and 7.  The 
contract for zone 6 was awarded in September 2011 and had not become operational as of 
November 2012. 
46 This is a holdover from when CMHCs were allowed to select their own contractors.   
47 CMS, ZPIC IDIQ Umbrella Statement of Work,  1.1.4, May 2009; CMS, Medicare 
Program Integrity Manual, Pub. No. 100-08, ch. 4,  4.2.2. 
48 Ibid., ch. 4,  4.2.2; ch. 2,  2.2. 
49 Ibid., ch. 4,  4.7.1. 
50 Ibid., ch. 4,  4.2.2. 
51 Ibid., ch. 4,  4.18.1.  
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Medicare requirements.52  ZPICs also may recommend that MACs 
deactivate providers that have not billed Medicare in over 1 year.  Further, 
ZPICs design autodeny edits that MACs implement to prevent Medicare 
from paying potentially fraudulent claims.53  
South Florida High-Risk Provider Enrollment Project 
CMS periodically undertakes temporary special projects to address 
Medicare fraud, waste, and abuse.  For these projects, CMS negotiates 
separate contracts containing requirements and performance metrics that 
differ from the requirements and metrics in the original contracts.  In 2009 
and 2010, CMS conducted a special project, the South Florida High-Risk 
Provider Enrollment Project, which targeted fraud among especially 
susceptible provider types, including CMHCs, in South Florida.54   
As part of the above project, CMS contracted with the jurisdiction 9 MAC 
and zone 7 ZPIC to conduct specific actions designed to detect and deter 
CMHC fraud in Palm Beach, Broward, and Miami-Dade Counties, Florida 
(i.e., South Florida).55  For example, the MAC conducted site visits to all 
South Florida CMHCs in its jurisdiction to verify their existence and 
operations.  CMS used the results of these site visits, along with other 
information, to create a fraud-risk score for each of these CMHCs.  
CMHCs with high fraud-risk scores were subject to ZPIC investigation, 
which could result in referrals to law enforcement, payment suspensions, 
or revocations of billing privileges. 
As of May 2011, the South Florida High-Risk Provider Enrollment Project 
had resulted in revocations for 239 providers and suspensions for 8.56  It 
also resulted in a cost avoidance of approximately $156 million by using 
edits.   
Related OIG Work 
Previous OIG reports have found vulnerabilities in Medicare payments to 
CMHCs.  A 2012 report found that about half of CMHCs had questionable 
billing in 2010.  Approximately two-thirds of the questionable billing 
 
52 Ibid., ch. 15,  15.27.2, and ch. 3,  3.9 (Rev. 282, January 1, 2009).  This provision 
has been moved to CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 8,    
 8.3.  
53 CMS, ZPIC IDIQ Umbrella Statement of Work,  2.2, May 2009. 
54 The project also targeted fraud among other providers, including Comprehensive 
Outpatient Rehabilitation Facilities and Independent Diagnostic Testing Facilities. 
55 First Coast Service Options, Inc., is the MAC for most providers in Florida.  SafeGuard 
Services, LLC, is the ZPIC for most providers in Florida.   
56 These figures represent all provider types, not just actions performed for CMHCs. 
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CMHCs were located in eight metropolitan areas, all of which were in 
Florida, Louisiana, and Texas.57   
Further, two 1998 reports found that Medicare paid $229 million for 
unallowable and questionable PHP services provided by CMHCs in five 
States over a 12-month period.58  Through medical record review, OIG 
found that 91 percent (4,959 of 5,431) of the PHP services reviewed did 
not meet Medicare requirements for reimbursement.  Additionally, OIG 
found that 60 percent of States did not require CMHCs to be licensed or 
certified.59  This creates a vulnerability whereby dishonest individuals 
have an opportunity to establish CMHCs and improperly bill Medicare for 
PHP services.   
Previous OIG reports have also found problems with CMS oversight of 
contractor operations.  A 2010 report found that Recovery Audit 
Contractors performed minimal activities to deter fraud, and CMS did not 
provide any formal training to the contractors regarding the identification 
and referral of potential fraud.60  Additionally, a 2007 report found that 
PSCs performed substantially different levels of activities to detect fraud 
across jurisdictions.  For example, PSCs investigated between 99 and 
1,266 providers and referred between 4 and 44 cases to OIG for criminal 
or civil investigation in 2005.  The variation in activities was not related to 
oversight responsibility or budget.61   
METHODOLOGY 
Scope 
We limited our review to the activities that CMS and selected MACs and 
ZPICs performed to detect and deter fraud among CMHCs under their 
jurisdictions in 2010.  We also reviewed Medicare payments to CMHCs 
that were subject to payment suspensions, revocations, or selected 
autodeny edits by the MACs and ZPICs in our review.   
 
57 OIG, Questionable Billing by Community Mental Health Centers, OEI-04-11-00100, 
August 2012. 
58 These five States are Alabama, Colorado, Florida, Pennsylvania, and Texas.  OIG, 
Five-State Review of Partial Hospitalization Programs at Community Mental Health 
Centers, OAS-04-98-02145, October 1998; Review of Partial Hospitalization Services 
Provided Through Community Mental Health Centers, OAS-04-98-02146, October 1998. 
59 Ibid. 
60 CMS contracts with Recovery Audit Contractors to identify improper payments of 
Medicare Part A and Part B claims.  OIG, Recovery Audit Contractors Fraud Referrals, 
OEI-03-09-00130, February 2010. 
61 OIG, Medicares Program Safeguard Contractors:  Activities To Detect and Deter 
Fraud and Abuse, OEI-03-06-00010, July 2007. 
Vulnerabilities in CMSs and Contractors Activities To Detect and Deter Fraud in Community Mental Health Centers  10 
(OEI-04-11-00101) 
   
   
We selected 2010 because it was the first year that ZPICs were operational 
in three areas prone to CMHC fraud.  We defined locations as fraud-prone 
areas if they (1) were Strike Force cities, (2) had cases against CMHC 
operators from 2009 to 2012, and (3) were identified in an OIG report as 
having high percentages of CMHCs with questionable billing.62  Using 
these criteria, we found that the cities prone to CMHC fraud were Miami, 
Baton Rouge, and Houston.   
We limited our review to those MACs and ZPICs operational for more 
than 2 months in 2010 to allow contractors sufficient time to perform 
CMHC oversight activities.63  In 2010, Medicare reimbursed $117 million 
to the 123 CMHCs under the jurisdiction of the 9 MACs in our review, 
and $185 million to the 164 CMHCs under the jurisdiction of the 3 ZPICs 
in our review.64 
We did not review other activities that CMS and its contractors performed 
to oversee CMHCs. 
Data Collection     
In September 2011, we sent information requests to CMS and the              
9 MACs and 3 ZPICs in our review to identify activities they performed to 
detect and deter CMHC fraud in 2010.  These requests included multiple-
choice options based on expected responses, as well as open-ended 
questions to allow for elaboration.  We requested that respondents submit 
documentation to support their responses.  
We also collected Medicare PHP claims submitted by CMHCs using    
100-percent paid claims data from CMSs National Claims History (NCH) 
Outpatient File from January 1 to December 31, 2010.  This included all 
2010 claims data for CMHCs under the jurisdictions of the MACs and 
ZPICs in our review, including those in the fraud-prone areas of Miami, 
Baton Rouge, and Houston.   
Data Analysis 
We reviewed information and documentation submitted by CMS, MACs, 
and ZPICs to determine the number and identify the type of activities to 
detect and deter CMHC fraud each entity performed in 2010.  We also 
 
62 We reviewed DOJ press releases to identify cities where CMHC operators were 
arrested for Medicare fraud from 2009 to 2012.   
63 We reviewed MAC jurisdictions 1, 3, 4, 5, 9, 10, 12, 13, and 14.  We reviewed ZPIC 
zones 4, 5, and 7.     
64 Ninety-six of these CMHCs were in both MAC jurisdictions and ZPIC zones.  The 
totals under the jurisdictions of the two types of contractors were not the same because 
the MAC jurisdictions and ZPIC zones overlapped only in certain areas of the country.  
The 9 MACs and 3 ZPICs in our review had oversight for a total of 191 unique CMHCs 
to which Medicare reimbursed a total of $191 million in 2010. 
Vulnerabilities in CMSs and Contractors Activities To Detect and Deter Fraud in Community Mental Health Centers  11 
(OEI-04-11-00101) 
   
   
reviewed PHP claims data to determine the dollar amount that Medicare 
paid CMHCs that were subject to payment suspensions, revocations, or 
selected autodeny edits. 
MAC Activities.  To determine the extent to which MACs performed 
activities to detect and deter fraud in the 123 CMHCs under their 
jurisdiction, we determined the number and identified the type of such 
activities MACs performed in 2010.  We defined MAC activities to detect 
fraud as:  (1) conducting site visits, (2) screening beneficiary complaints,               
(3) referring providers to ZPICs for investigation, and (4) performing 
medical record reviews.  We defined MAC activities to deter fraud as:     
(1) approving revocations, (2) approving deactivations, (3) implementing 
revocations, (4) implementing suspensions, and (5) implementing 
autodeny edits.   
ZPIC Activities.  To determine the extent to which ZPICs performed 
activities to detect and deter fraud in the 164 CMHCs under their 
jurisdiction, we determined the number and identified the type of such 
activities ZPICs performed in 2010.  We defined ZPIC activities to detect 
fraud as:  (1) investigating providers for potential fraud, (2) conducting 
prepayment and postpayment review of claims, and (3) performing onsite 
audits.  We defined ZPIC activities to deter fraud as:  (1) referring 
providers to OIG for criminal investigation, (2) recommending 
suspensions, (3) recommending revocations, (4) recommending 
deactivations, and (5) creating autodeny edits.    
Additionally, we asked ZPICs to estimate the level of potential fraud 
among the CMHCs in their respective jurisdictions. 
CMS Activities.  We also determined the number of CMHC suspension and 
revocation recommendations that CMS received, approved, and denied.  
Additionally, we determined the extent to which CMS paid CMHCs that 
were subject to payment suspensions, revocations, or selected autodeny 
edits.  We identified the dates that ZPICs recommended these activities 
and the dates that CMS and/or MACs performed them.  Then we used the 
NCH Outpatient File to determine the dollar amount Medicare paid these 
CMHCs after ZPICs recommended the activities and after they were 
performed.   
Limitations 
CMS, MACs, and ZPICs submitted documentation to substantiate their 
responses to our information request; however, these data were             
self-reported.  Our findings also cannot be projected to all MACs and 
ZPICs because not all were operational at the time of our review.  
Additionally, the fraud-prone areas identified in this report are not 
Vulnerabilities in CMSs and Contractors Activities To Detect and Deter Fraud in Community Mental Health Centers  12 
(OEI-04-11-00101) 
   
   
intended to be a comprehensive list of areas in which CMHC fraud, waste, 
and abuse may occur. 
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. 
Vulnerabilities in CMSs and Contractors Activities To Detect and Deter Fraud in Community Mental Health Centers  13 
(OEI-04-11-00101) 
   
   
FINDINGS 
One of nine MACs we reviewed performed activities 
to detect and deter CMHC fraud in 2010, and most of 
these were part of a CMS-led special project  
MACs primary responsibility is to process and pay Medicare claims 
submitted by a variety of providers, including CMHCs.  MACs are also 
responsible for detecting and deterring Medicare fraud.  However, only the 
jurisdiction 9 MAC, which includes the fraud-prone area of Miami, 
performed activities to detect and deter CMHC fraud in 2010.  Most of 
these activities were part of the South Florida High-Risk Provider 
Enrollment Project.  
For example, as part of the above project, CMS directed the MAC to 
conduct site visits at 57 of the 63 CMHCs under its jurisdiction and assign 
each a fraud-risk score.  Because all CMHCs visited had high fraud-risk 
scores, the MAC referred all 57 to ZPICs for investigation.  Additionally, 
the jurisdiction 9 MAC screened and followed up on five beneficiary 
complaints against CMHCs in Florida.  Table 1 describes the numbers of 
CMHCs that MACs referred to ZPICs for investigation in 2010, and Table 
D-1 in Appendix D describes the other activities that MACs performed to 
detect CMHC fraud in 2010.65   
 
Table 1:  Numbers of CMHCs That MACs Referred to ZPICs for Investigation, 2010  
Percentage of 
Percentage of  Number of  Total CMHCs 
Number  Medicare  Medicare  CMHCs Referred  Referred to 
of  Payments  Payments to  to ZPICs for  ZPICs for  Fraud-Prone 
Jurisdiction  CMHCs  to CMHCs*  CMHCs*  Investigation  Investigation  Areas** 
9   63  $55 million  47%  57  100%  Miami 
4   22  $49 million  42%    0       0%  Houston 
Seven 
Others***  38  $12 million  11%    0       0%   
Total  123  $117 million  100%  57  100%   
*Figures in column have been rounded.  
**Not all fraud-prone areas were included in our review because the jurisdiction 7 MAC, which includes Baton Rouge, was not operational in 2010. 
***This includes MACs for jurisdictions 1, 3, 5, 10, 12, 13, and 14.  No other jurisdictions had operational MACs in 2010.   
Source:  OIG analysis of MAC activity data and documentation. 
 
 
65 The jurisdiction 9 MAC performed medical record review on a number of CMHCs in 
2010, but it stopped once it referred the CMHCs to ZPICs for investigation.  The MAC 
stated that it did so because medical record review educated the CMHCs on how to hide 
fraudulent billing patterns.  
Vulnerabilities in CMSs and Contractors Activities To Detect and Deter Fraud in Community Mental Health Centers  14 
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Additionally, the jurisdiction 9 MAC approved revocations for four 
CMHCs and a deactivation for one.  The jurisdiction 9 MAC also 
implemented these revocations and the deactivation, as well as payment 
suspensions of five CMHCs, preventing Medicare from paying these 
providers.  The MAC also implemented an autodeny edit against 965 
beneficiaries that a ZPIC identified as part of a fraud scheme.  Table D-2 
in Appendix D describes the activities that the MACs performed to deter 
CMHC fraud in 2010. 
In contrast, the other eight MACs in our review, which include the    
fraud-prone area of Houston, performed no activities to detect or deter 
CMHC fraud in 2010.  Combined, the CMHCs under these eight MACs 
received more than half of all Medicare payments to CMHCs in 2010  
($62 million of $117 million).  However, these eight MACs referred none 
of the 60 CMHCs in their jurisdictions to ZPICs for investigation in 2010.  
They also did not conduct site visits or screen complaints regarding 
CMHCs in 2010.  Additionally, the other eight MACs in our review did 
not prevent Medicare payments to CMHCs that were subject to sanctions.  
These eight MACs did not independently revoke the billing privileges of 
any CMHCs, nor did they approve or implement any revocations, 
deactivations, payment suspensions, or autodeny edits concerning 
CMHCs.     
Activities to detect and deter CMHC fraud varied 
substantially among ZPICs in 2010  
ZPICs are responsible for preventing fraud by (1) detecting and 
investigating potential fraud and (2) deterring fraudulent billing by 
referring cases to law enforcement and recommending that CMS or MACs 
sanction providers.66  All three ZPICs we reviewed performed activities to 
detect and deter CMHC fraud in 2010.  However, the zone 7 ZPIC was 
responsible for almost all such activities, mostly as part of the South 
Florida High-Risk Provider Enrollment Project.  The other two ZPICs we 
reviewed performed far fewer activities to detect and deter fraud among 
the 100 CMHCs under their jurisdiction.  The number of these activities 
was not consistent with the estimated level of CMHC fraud in their zones, 
which include the fraud-prone areas of Baton Rouge and Houston.   
 
 
 
66 Sanctioned providers are those with payment suspensions, revoked billing privileges, or 
deactivations.  
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(OEI-04-11-00101) 
   
   
One ZPIC was responsible for most CMHC investigations and 
almost all other ZPIC activities to detect fraud  
The three ZPICs in our review investigated 55 of the 164 CMHCs under 
their jurisdiction in 2010.  The zone 7 ZPIC, which includes the         
fraud-prone area of Miami, investigated 78 percent (50 of 64) of its 
CMHCs in 2010.  This corresponds to the ZPICs estimation that at least 
50 percent of CMHC claims in its zone were potentially fraudulent.  Table 
2 describes the number of CMHCs under ZPIC investigation in 2010.   
 
Table 2:  Numbers of CMHCs Under ZPIC Investigation, 2010  
Number  Medicare  Percentage of  Number of  Percentage of Total 
of  Payments  Medicare Payments  CMHCs Under  CMHCs Under  Fraud-Prone 
Zone  CMHCs   to CMHCs*   to CMHCs*   Investigation  Investigation  Areas  
7  64  $56 million  30%  50   91%  Miami 
5   77  $78 million  42%    4     7%  Baton Rouge  
4   23  $50 million  27%    1     2%  Houston 
Total  164  $185 million  100%  55  100%   
*Figures in column have been rounded. 
Source:  OIG analysis of ZPIC activity data and documentation. 
 
Additionally, the zone 7 ZPIC performed almost all other activities to 
detect fraudulent CMHC billing in 2010, largely as part of the South 
Florida High-Risk Provider Enrollment Project.67  For example, CMS 
directed the ZPIC to perform prepayment reviews and conduct onsite 
audits when investigating CMHCs in South Florida.  As a result, the ZPIC 
performed prepayment reviews for 44 CMHCs and conducted onsite 
audits for 39 CMHCs in 2010.68  Medicare payments to these CMHCs 
decreased substantially after the ZPIC performed such actions.  For 
example, average Medicare payments per day to CMHCs subject to 
prepayment review decreased approximately 80 percent after the ZPIC 
began reviewing their claims.  Figure 2 describes the average Medicare 
payment per day for CMHCs with prepayment reviews and onsite audits 
in 2010.  
 
 
 
 
 
67 The zone 7 ZPIC performed postpayment review of claims for one CMHC in 2010.   
68 Thirty-four of these CMHCs experienced both a prepayment review and an onsite 
audit. 
Vulnerabilities in CMSs and Contractors Activities To Detect and Deter Fraud in Community Mental Health Centers  16 
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Figure 2:  Average Medicare Payment per Day for CMHCs With 
Prepayment Reviews and Onsite Audits, 2010 
 
  $7,000 $6,093 
$5,772 
$6,000
 
$5,000
  $4,000
$3,000 $2,415 
 
$2,000
$1,065 
 
$1,000
$0
 
Prepayment Review Onsite Audit
 
       BefCoroel uamctinv i1ty    C   o  l u Amftner 2 activity 
   
 
Source:  OIG analysis of MAC and ZPIC documentation and 2010 PHP claims. 
 
In contrast, the other two ZPICs in our review, which include the       
fraud-prone areas of Baton Rouge and Houston, investigated 5 percent of 
CMHCs in their zones in 2010.  This does not correspond to the ZPICs 
estimates that at least 50 percent of the CMHC claims in their zones were 
potentially fraudulent in 2010.  For example, the zone 5 ZPIC investigated 
5 percent (4 of 77) of the CMHCs in its zone.  The zone 5 ZPIC initiated 
investigations into two CMHCs by conducting claims analysis, and it 
initiated investigations into two others by following up on complaints.  
While investigating these four CMHCs, the zone 5 ZPIC performed a 
prepayment review for one CMHC and performed four postpayment 
reviews on two CMHCs to determine whether any overpayments had been 
made.  The ZPIC also conducted an onsite audit for one CMHC. 
Additionally, the zone 4 ZPIC investigated 4 percent (1 of 23) of CMHCs 
in its zone, initiating the investigation by conducting claims analysis.  
During this investigation, the zone 4 ZPIC performed one onsite audit for 
the CMHC and no prepayment or postpayment reviews.  Table E-1 in 
Appendix E describes the activities ZPICs performed to detect fraud 
among CMHCs in 2010.   
One ZPIC was responsible for most CMHC referrals to law 
enforcement and almost all other ZPIC activities to deter fraud 
The three ZPICs in our review referred nine CMHCs to law enforcement 
in 2010 for criminal or civil investigation.  The zone 7 ZPIC, which 
includes the fraud-prone area of Miami, referred eight of the nine CMHCs 
Vulnerabilities in CMSs and Contractors Activities To Detect and Deter Fraud in Community Mental Health Centers  17 
(OEI-04-11-00101) 
   
   
to law enforcement.69  These CMHCs allegedly altered patient files, 
altered patient diagnoses, and paid kickbacks to patient recruiters.  In 
2010, these eight CMHCs received approximately $5.6 million from 
Medicare (see Table 3).   
 
Table 3:  CMHCs That ZPICs Referred to Law Enforcement for Investigation, 2010 
Percentage of  Number of  Medicare 
Number  Medicare  Medicare  CMHCs Referred  Payments to 
of  Payments to  Payments to  to Law  CMHCs Referred to  Fraud-Prone 
Zone  CMHCs  CMHCs*   CMHCs*  Enforcement   Law Enforcement  Areas  
7   64  $56 million  30%  8  $6 million  Miami 
5   77  $78 million  42%  0  $0  Baton Rouge 
4   23  $50 million  27%  1  $1 million  Houston 
Total  164  $185 million  100%  9  $7 million   
*Figures in column have been rounded.  
Source:  OIG analysis of ZPIC activity data and documentation. 
 
Additionally, the zone 7 ZPIC recommended sanctions (payment 
suspensions, billing privilege revocations, or deactivations) for 41 unique 
CMHCs in 2010.  CMS and MACs approved sanctions for 32 of the 64 
(50 percent) CMHCs in the ZPICs zone.70  In 2010, these CMHCs 
received approximately $28 million from Medicare.  Sixteen of these 
CMHCs submitted false information or did not operate at the addresses 
listed on their enrollment applications.  Five others were suspected of 
billing Medicare fraudulently.  The ZPIC also created an autodeny edit 
against 965 beneficiaries identified as part of a fraud scheme.  
In contrast, the other two ZPICs in our review, which include the       
fraud-prone areas of Baton Rouge and Houston, performed far fewer 
activities to deter fraudulent CMHC billing in 2010.  For example, the 
zone 5 ZPIC referred none of its 77 CMHCs to law enforcement and 
recommended that CMS suspend payments to 1 CMHC in 2010.  The 
suspended CMHC was in Baton Rouge, and it inappropriately copied 
patient records.  In 2010, this CMHC received approximately $56,000 
from Medicare.   
The zone 4 ZPIC referred only one CMHC to law enforcement in 2010, 
representing 4 percent (1 of 23) of CMHCs in its zone.  This CMHC was 
in Houston, and it was suspected of submitting false claims for patients.  
In 2010, this CMHC received approximately $1.3 million from Medicare.  
 
69 All of the CMHCs that the zone 7 ZPIC referred to law enforcement were in Florida. 
70 Three of the five CMHCs for which CMS suspended payments in 2010 also had their 
billing privileges revoked in 2010.  The single deactivated CMHC did not bill in 2010, 
and therefore it was not included in the total of 64 CMHCs under the ZPIC. 
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As of November 2012, this CMHC had not been indicted for fraud.  The 
zone 4 ZPIC did not recommend that CMS or MACs sanction any 
CMHCs in its zone.  Table E-2 in Appendix E describes the activities 
ZPICs performed to deter CMHC fraud in 2010. 
Medicare paid CMHCs that did not comply with its 
requirements in 2010 and could have prevented 
payments to potentially fraudulent CMHCs 
CMS and its contractors did not coordinate activities to deter fraud across 
all Florida CMHCs in 2010.  For example, Medicare paid five CMHCs 
after the effective dates that their billing privileges were revoked for 
noncompliance with Medicare requirements.  Medicare also paid nine 
CMHCs between the time their revocations were recommended and the 
time they were finalized.  Additionally, Medicare contractors could have 
prevented payments to seven potentially fraudulent CMHCs if they had 
consistently applied an auto deny edit for all CMHCs in Florida. 
MACs paid approximately $640,000 to five noncompliant 
CMHCs in Florida after their revocations were effective  
CMS and the jurisdiction 9 MAC, which includes the fraud-prone area of 
Miami, approved the zone 7 ZPICs recommendations that 31 CMHCs 
have their billing privileges revoked in 2010 for noncompliance with 
Medicare requirements.  However, Medicare paid a total of approximately 
$640,000 to five of these CMHCs during an average of 18 weeks after the 
effective dates of their billing privilege revocations.  Four of these 
CMHCs were not providing core services required for Medicare 
participation, such as screening patients or offering outpatient services.   
The jurisdiction 9 MAC did not implement or finalize the revocations for 
these five CMHCs, allowing them to receive Medicare payments.  Either 
CMS or MAC approval is required to revoke providers or suppliers 
billing privileges.  MACs should be able to identify all providers with 
revoked billing privileges because only MACs ensure that Medicare does 
not pay providers with revocations.  However, CMS and the MAC 
identified different providers with revoked billing privileges in 2010.71   
For example, eight of the ten CMHCs for which CMS revoked billing 
privileges in 2010 were not documented by the MAC.  This includes all 
five CMHCs that were paid after the effective dates that their billing 
privileges were revoked.  Table 4 describes CMHC revocations identified 
by CMS and its contractors in 2010. 
 
71 There was an overlap of two CMHCs for which both CMS and the MAC reported 
revocations.  CMS and the MAC reported 12 unique CMHCs with revocations in 2010. 
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Table 4:  CMHC Revocations Identified by CMS and Contractors in 2010 
Source of Revocation Data  Number With Revoked Billing Privileges 
Zone 7 ZPIC  22 
CMS  10 
Jurisdiction 9 MAC  4 
Total*  1 
Unique CMHCs  31 
*Total reflects the CMHCs that the zone 7 ZPIC, CMS, and the jurisdiction 9 MAC agree had revoked billing 
privileges.   
Source:  OIG analysis of CMS, MAC, and ZPIC revocation documentation. 
 
MACs paid approximately $2.5 million to nine CMHCs in 
Florida after they were recommended for revocation 
Medicare paid approximately $2.5 million to nine CMHCs between the 
time the ZPIC recommended their billing privileges be revoked and the 
time their revocations were finalized.72  CMS took an average of 42 weeks 
to finalize these revocations, with a range of 5 to 57 weeks.  Medicare paid 
approximately $2.4 million to four of these CMHCs, whose revocations 
were finalized between 39 and 46 weeks after ZPICs recommended their 
revocations.   
Medicare did not pay 18 CMHCs after their revocations were 
recommended or finalized.  These 18 CMHCs had their revocations 
reviewed and finalized within an average of 16 weeks.  Additionally, 13 of 
these CMHCs had their revocations reviewed and finalized within an 
average of 17 days.   
Medicare contractors did not consistently apply an autodeny 
edit across all Florida CMHCs   
In 2010, Medicare contractors allowed seven CMHCs in Florida to bill for 
beneficiaries identified as part of a fraud scheme.  This was, in part, 
because not all CMHCs in Florida were under the oversight of the same 
contractor.  Applying an effective autodeny edit across all Florida CMHCs 
could have prevented approximately $520,000 in potentially fraudulent 
billing by CMHCs in 2010.   
Of the 72 CMHCs in Florida that received Medicare payments in 2010, 64 
operated under the oversight of the jurisdiction 9 MAC and/or zone 7 
ZPIC and 8 were under the jurisdiction of a PSC and/or an FI.   
 
72 Medicare paid one CMHC after the ZPIC recommended its billing privileges be 
revoked and after its revocation was finalized.  There is no required timeframe for CMS 
or MACs to approve or deny ZPIC recommendations for revocations, and providers may 
continue to bill Medicare in the intervening time. 
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The jurisdiction 9 MAC implemented a local autodeny edit in 2010 to 
deter a fraud scheme in which South Florida CMHCs billed for prolonged 
PHP services for beneficiaries.  According to the jurisdiction 9 MAC and 
zone 7 ZPIC, CMHCs were billing Medicare for unusually long durations 
of PHP services for beneficiaries, some for almost an entire year          
(362 days).73  The MAC and ZPIC identified 965 beneficiaries who were 
part of this fraud scheme.  The MAC implemented an autodeny edit that 
prevented the CMHCs under its oversight from providing more than       
60 days of services in a calendar year to those beneficiaries.  The zone 7 
ZPIC reported that the autodeny edit saved Medicare approximately 
$370,000 in denied claims from these CMHCs in 2010. 
However, the FI did not implement the same autodeny edit for the CMHCs 
under its oversight.  CMHCs under each set of contractors served the same 
population, submitting claims for the same 602 beneficiaries and often 
operating within 5 miles of one another.  Seven CMHCs under the 
oversight of the FI billed for 115 of the 965 beneficiaries identified in the 
fraud scheme.  Medicare reimbursed these CMHCs approximately 
$520,000 after the MAC implemented the edit to prevent payment for 
additional PHP services provided to the same 115 beneficiaries.  These 
seven CMHCs billed Medicare for an average of 149 days of PHP services 
for these beneficiaries.   
 
73 OIG, Questionable Billing by Community Mental Health Centers, OEI-04-11-00100, 
August 2012.  PHPs should closely resemble short-term inpatient programs.  They are not 
intended to provide prolonged services.  CMS, Medicare Benefit Policy Manual, Pub. 
No. 100-02, ch. 6,  70.3. 
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CONCLUSION AND RECOMMENDATIONS 
CMS and some of its contractors are responsible for ensuring the integrity 
of the Medicare program, including the prevention of fraudulent billing.  
Strike Force investigations indicate that some parts of the country have a 
higher prevalence of CMHC fraud, including portions of Florida, 
Louisiana, and Texas.  Additionally, OIG found that approximately half of 
CMHCs exhibited questionable billing in 2010, most of which were in 
these three States.74   
In 2010, the 9 MACs and 3 ZPICs in our review oversaw CMHCs in much 
of the country, including fraud-prone areas of Florida, Louisiana, and 
Texas.  Almost all MAC and ZPIC activities to detect and deter CMHC 
fraud were performed by the jurisdiction 9 MAC and zone 7 ZPIC, both of 
which include Florida.  Most activities performed by these contractors 
were part of the South Florida High-Risk Provider Enrollment Project.   
However, CMS, the jurisdiction 9 MAC, and the zone 7 ZPIC 
demonstrated vulnerabilities while detecting and deterring CMHC fraud.  
Better communication and coordination between CMS and these 
contractors could have prevented approximately $3.6 million in Medicare 
payments for potentially fraudulent CMHC services.  Prior OIG reports 
have found similar vulnerabilities for other providers, such as home health 
agencies and independent diagnostic testing facilities.75  Therefore, the 
vulnerabilities identified in this report may extend to other types of 
providers.   
We recommend that CMS: 
Implement Additional CMHC Fraud Mitigation Activities in All 
Fraud-Prone Areas  
These activities may include aspects of CMSs South Florida High-Risk 
Provider Enrollment Project, such as coordinating with MACs and ZPICs 
to conduct unannounced postenrollment site visits, subject CMHCs 
suspected of fraud to prepayment review, refer highly suspicious CMHCs 
to law enforcement, sanction noncompliant or potentially fraudulent 
CMHCs, and/or implement edits to mitigate fraud schemes.  Specifically, 
CMS should work with MACs and ZPICs covering fraud-prone areas, 
such as parts of Louisiana and Texas, to implement these activities. 
 
74 OIG, Questionable Billing by Community Mental Health Centers, OEI-04-11-00100, 
August 2012. 
75 OIG, Miami Independent Diagnostic Testing Facilities Compliance With Medicare 
Standards, OEI-05-09-00560, August 2011; and CMS and Contractor Oversight of Home 
Health Agencies, OEI-04-11-00220, December 2012. 
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Develop a System To Track Revocation Recommendations and 
Improve Revocation Communication With Contractors 
This system should flag recommendations to which CMS or its contractors 
have not responded within a specified timeframe (e.g., within 30 days of 
receipt) and require documentation to justify why any cases exceed this 
timeframe.  For cases that exceed this timeframe, CMS should consider 
implementing safeguards (e.g., prepayment reviews and payment 
suspensions) to prevent payments to providers recommended for 
revocation while it determines appropriate action.  Doing so could have 
prevented approximately $2.5 million in Medicare payments to nine 
noncompliant CMHCs during the average of 42 weeks between the time 
their revocations were recommended and the time they were finalized. 
Additionally, CMS should coordinate with MACs and ZPICs to improve 
its communication concerning revocations.  While CMS or MAC approval 
is required to revoke providers billing privileges, only MACs document 
revocations in the Provider Enrollment, Chain and Ownership System.  
MACs then use edits to ensure that providers with revocations do not 
receive Medicare payments.  CMS should also document providers with 
revocations in the system to ensure that these providers do not 
inappropriately receive Medicare payments.   
Coordinate Activities To Deter CMHC Fraud in Florida 
Florida is the only State in our review with CMHCs under both FIs and 
MACs.  CMS should coordinate FI and MAC activities to deter fraud in 
Florida so that all CMHCs operating there are subject to the same 
activities.  This can prevent the shift of a fraud scheme from a CMHC 
under the oversight of one contractor to another.  It will also ensure the 
consistency of activities to deter fraud, including edits.  Lastly, it would 
help contractors track fraud schemes across all CMHCs in Florida, which 
would allow contractors to more accurately inform CMS of billing 
vulnerabilities.  Further, CMS should consider consolidating all CMHCs 
in Florida under the oversight of the same contractors.  
Follow Up on Payments Made to CMHCs After the Effective 
Dates of Their Billing Privilege Revocations  
In a separate memorandum, we referred to CMS the CMHCs that 
Medicare paid after having their billing privileges revoked.  CMS should 
follow up on payments made to these CMHCs.  Such payments should not 
have been made.  Additionally, CMS should ensure that edits are in place 
and are functioning properly to prevent payments to CMHCs with revoked 
billing privileges. 
 
 
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AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 
RESPONSE 
CMS concurred with all four of our recommendations and acknowledged 
that CMHCs partial hospitalization program services have historically 
been vulnerable to fraud, waste, and abuse.  Therefore, CMS is taking 
additional steps to address potential vulnerabilities in the enrollment and 
claims payment process for CMHCs.  These include screening measures, 
such as licensure checks for new enrolling providers and unannounced site 
visits for revalidating providers. 
With regard to the first recommendation, CMS stated that it will review 
the work performed by ZPICs and MACs to ensure that they are pursuing 
appropriate additional CMHC fraud mitigation activities using lessons 
learned from the South Florida High-Risk Provider Enrollment Project. 
With regard to our second recommendation, CMS stated that it has 
developed and implemented a tracking system used by the revocation team 
that delineates revocation-specific tasks, status, request dates, contact 
dates, and other applicable information.  CMS also stated that it 
established a set of guidelines to ensure that revocation recommendations 
are addressed in a timely manner.   
With regard to our third recommendation, CMS stated that it will draft a 
Technical Direction letter to the affected MACs about coordinating 
CMHC edits. 
With regard to our final recommendation, CMS will attempt to recover the 
overpayments made to CMHCs with revoked billing privileges consistent 
with the agencys policies and procedures.  CMS also stated that it has 
ensured that properly functioning edits are in place to prevent 
inappropriate Medicare payments to CMHCs with revoked billing 
privileges. 
We support CMSs efforts to address these issues and encourage it to 
continue making progress.  For the full text of CMSs comments, see 
Appendix F.   
 
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(OEI-04-11-00101) 
   
   
APPENDIX A 
Number of Community Mental Health Centers (CMHC) and 
Medicare Payments by State, 2010 
Total Number 
State  of CMHCs*  Total Medicare Payment 
Florida  72        $82,389,314  
Louisiana  57        $60,725,138  
Texas  23        $50,403,363  
Mississippi  4          $6,728,693  
Tennessee  4          $4,007,575  
Massachusetts  10          $3,192,482  
Georgia  3          $2,153,531  
North Carolina  1          $2,135,432  
South Carolina  1          $1,630,377  
California  4          $1,614,811  
Alabama  6             $841,167  
Michigan  1             $748,687 
Arizona  1             $541,137  
West Virginia  1             $270,169  
Connecticut  2             $259,370  
Maryland  1             $250,238  
New York  1            $177,722  
Minnesota  3            $121,685  
Illinois  2            $113,998  
Nebraska  1            $102,492  
Pennsylvania  4              $67,346  
Utah  1              $55,915  
Iowa  1              $49,584  
Missouri  1              $16, 815  
Puerto Rico  1                 $1,078  
Total  206  $218.6 million 
        *Not all CMHCs included in this table were included in this study. 
Source:  Office of Inspector General analysis of 2010 Medicare Partial Hospitalization Program claims data. 
 
 
 
Vulnerabilities in CMSs and Contractors Activities To Detect and Deter Fraud in Community Mental Health Centers  25 
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APPENDIX B 
Medicare Administrative Contractor Jurisdictions 
    14  
2* 
 3  6*  8* 13 
12 
5  15* 
 1 
  11*  
    10 
4     7* 
9 
 
Medicare Administrative  Contractors and Operational Dates: 
 
Jurisdiction 1, Palmetto GBA, LLC, September 2008:  American Samoa, California, 

Guam, Hawaii, Nevada, and Northern Mariana Islands. 
Jurisdiction 2,* not operational:  Alaska, Idaho, Oregon, and Washington.  
Jurisdiction 3, Noridian Administrative Services, LLC, March 2007:  Arizona, 
Montana, North Dakota, South Dakota, Utah, and Wyoming.  
Jurisdiction 4, Trailblazer Health Enterprises, LLC, June 2008:  Colorado, New  
Mexico, Oklahoma, and Texas.  
Jurisdiction 5, Wisconsin Physicians Service, June 2008:  Iowa, Kansas, Missouri, 
and Nebraska.  
Jurisdiction 6,* not operational:  Illinois, Minnesota, and Wisconsin.  
Jurisdiction 7,* not operational:  Arkansas, Louisiana, and Mississippi.  
Jurisdiction 8,*  Wisconsin Physicians Service, August 2012:  Indiana and Michigan. 
Jurisdiction 9, First Coast Service Options, Inc., March 2009:  Florida, Puerto Rico, 
and Virgin Islands.  
Jurisdiction 10, Cahaba Government Benefit Administrators, September 2009:   
Alabama, Georgia, and Tennessee  
Jurisdiction 11,* Palmetto Government Benefit Administrators, June 2011: North 
Carolina, South Carolina, Virginia, and West Virginia. 
Jurisdiction 12, Highmark Medicare Services, Inc., December 2008:  Delaware, 
Maryland, New Jersey, Pennsylvania, and Washington, D.C. 
Jurisdiction 13, National Government Services, Inc., November 2008:   Connecticut 
and New York.  
Jurisdiction 14, National Heritage Insurance Company, June 2009: Maine, 
Massachusetts, New Hampshire, Rhode Island, and Vermont. 
Jurisdiction 15,* Cigna Government Services, June 2011:  Kentucky  and Ohio.  
 
*Jurisdiction was not included in our review because it was not operational for more than 2 months in 2010.  
Jurisdictions were consolidated into  Jurisdiction F under  Noridian Administrative Services in February 2012. 
Jurisdictions were consolidated into  Jurisdiction H under  Novitas in November 2012. 
 
Vulnerabilities in CMSs and Contractors Activities To Detect and Deter Fraud in Community Mental Health Centers  25 
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APPENDIX C 
Zone Program Integrity Contractor Zones  
2* 
6* 
  3* 
 1* 
4  5 
  7 
 
Zone Program Integrity Contractor Zones and Operational Dates: 
Zone 1,* SafeGuard Services, LLC, December 2010:  American Samoa, California, 
Guam, Hawaii, Nevada, and Northern Mariana Islands. 
Zone 2,*AdvanceMed Corporation, February 2011:  Alaska, Arizona, Idaho, Iowa, 
Kansas, Missouri, Montana, Nebraska, North Dakota, Oregon, South Dakota, Utah, 
Washington, and Wyoming. 
Zone 3,* Cahaba Safeguard Administrators, LLC, April 2012:  Illinois, Indiana, 
Kentucky, Michigan, Minnesota, Ohio, and Wisconsin. 
Zone 4, Health Integrity, LLC, February 2009:  Colorado, New Mexico, Oklahoma, and 
Texas. 
Zone 5, AdvanceMed Corporation, December 2009:  Alabama, Arkansas, Georgia, 
Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, and 
West Virginia. 
Zone 6,* Cahaba Safeguard Administrators, LLC, not yet operational:  Connecticut, 
Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New 
York, Pennsylvania, Rhode Island, Vermont, and Washington, D.C. 
Zone 7, SafeGuard Services, LLC, February 2009:  Florida, Puerto Rico, and Virgin 
Islands. 
 
*
Zone was not included in our review because it was not operational for more than 2 months in 2010.  
 
 
Vulnerabilities in CMSs and Contractors Activities To Detect and Deter Fraud in Community Mental Health Centers  27 
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APPENDIX D 
Medicare Administrative Contractor Activities To Detect and 
Deter Fraud, 2010 
Table D-1:  Activities To Detect Community Mental Health Center (CMHC) Fraud 
Screened/ 
Number of  Medicare Payments  Followed Up on   Total  Fraud-Prone 
Jurisdiction  CMHCs   to CMHCs*   Site Visits  Complaints  Activities   Areas** 
9   63  $55 million  57  5  62  Miami 
4   22  $49 million    0  0  0  Houston 
Seven   
Others***   38  $12 million    0  0  0 
   Totals  123  $117 million  57  5  62   
*Figures in column have been rounded. 
**Not all fraud-prone areas were included in our review because the jurisdiction 7 Medicare Administrative Contractor (MAC), which includes 
Baton Rouge, was not operational in 2010. 
***This includes MACs for jurisdictions 1, 3, 5, 10, 12, 13, and 14.  No other jurisdictions had operational MACs in 2010.   
Source:  Office of Inspector General (OIG) analysis of MAC activity data and documentation. 
 
Table D-2:  Activities To Deter CMHC Fraud 
Number  Medicare  Implement 
of  Payments to  Approve  Approve  Autodeny  Implement  Implement  Total  Fraud-Prone 
Jurisdiction  CMHCs   CMHCs*   Revocations  Deactivations  Edits  Suspensions  Revocations  Activities   Areas** 
9   63  $55 million  4  1  1***  5  4  15  Miami 
4   22  $49 million  0  0  0  0  0  0  Houston 
Seven   
Others  38  $12 million  0  0  0  0  0  0 
   Totals  123  $117 million  4  1  1  5  4  15   
*Figures in column have been rounded. 
**Not all fraud-prone areas were included in our review because the jurisdiction 7 MAC, which includes Baton Rouge, was not operational in 2010. 
***This autodeny edit included 965 beneficiaries who were part of the same fraud scheme. 
This includes MACs for jurisdictions 1, 3, 5, 10, 12, 13, and 14.  No other jurisdictions had operational MACs in 2010.   
Source:  OIG analysis of MAC activity data and documentation. 
 
 
 
 
Vulnerabilities in CMSs and Contractors Activities To Detect and Deter Fraud in Community Mental Health Centers  28 
(OEI-04-11-00101) 
   
   
APPENDIX E 
Zone Program Integrity Contractor Activities To Detect and 
Deter Fraud, 2010 
Table E-1:  Activities To Detect Community Mental Health Center (CMHC) Fraud 
Medicare 
Number of  Payments to  Prepayment  Onsite  Postpayment  Total  Fraud-Prone 
Zone  CMHCs   CMHCs*  Review  Audits  Review  Activities   Areas 
7   64  $56 million  44  39  1  84  Miami 
5   77  $78 million    1    1  4  6  Baton Rouge 
4   23  $50 million    0    1  0  1  Houston 
  Total  164  $185 million  45  41  5  91   
* Figures in column have been rounded. 
Source:  Office of Inspector General (OIG) analysis of Zone Program Integrity Contractor (ZPIC) data and documentation. 
 
Table E-2:  Activities To Deter CMHC Fraud 
Number  Medicare 
of  Payments to  Suspensions  Revocations  Deactivations  Autodeny Edits  Total   Fraud-Prone 
Zone  CMHCs   CMHCs*  Recommended  Recommended  Recommended  Recommended  Activities  Areas 
7   64  $56 million  5  40  1  1**  47  Miami 
5   77  $78 million  1***    0  0  0  1  Baton Rouge 
4   23  $50 million  0    0  0  0  0  Houston 
Total  164  $185 million  6  40  1  1  48   
* Figures in column have been rounded. 
**This autodeny edit included 965 beneficiaries who were part of the same fraud scheme. 
***This suspension was recommended in Louisiana.  Because the Medicare Administrative Contractor for the jurisdiction that included Louisiana was not 
operational during 2010, a fiscal intermediary implemented this suspension. 
Source:  OIG analysis of ZPIC data and documentation. 
 
 
 
Vulnerabilities in CMSs and Contractors Activities To Detect and Deter Fraud in Community Mental Health Centers  29 
(OEI-04-11-00101) 
  APPENDIX F 
Agency Comments 
,~1&,~ , 
~
(  DEPARTMENT OF HEALTH & HUMAN SERVICES  Centers for Medocare & Medicaid Services 
<~~ 
Administrator 
Washington, DC 20201 
DATE:  NOV  2 0 2012 
TO: 	 Daniel R. Levinson 
Inspector General 
FROM: 	 IMilyiTl~elrne!' 
Actlltg Al!mm istrator 
SUBJECT: 	 Office of Inspector General (OIG) Draft Report: "Vulnerabilities in CMS and 
Contractors' Activities to Detect and Deter Fraud in Community Mental Health 
Centers" (OEI-04-11-00101) 
The Centers for Medicare & Medicaid Services (CMS) appreciates the opportunity to review and 
comment on the HHS OIG's report entitled, ''Vulnerabilities in CMS and Contractors' Activities 
to Detect and Deter Fraud in Community Mental Health Centers." OIG's objectives for this draft 
report were to determine the extent to which: (1) CMS and its selected contractors performed 
activities to detect and deter fraudulent billing by community mental health centers (CMHC) in 
2010; and (2) Medicare paid CMHCs that were subject to payment suspensions, revocations, or 
selected electronic edits because of suspected fraud. 
As stated in OIG's report, CMHCs' partial hospitalization program (PHP) services have 
historically been vulnerable to fraud, waste, and abuse. As such, CMS is taking additional steps 
to address potential vulnerabilities in the enrollment and claims payment process for this supplier 
group using the authorities granted under Section 6401 of the Affordable Care Act. Under the 
new screening regulations (CMS 6028-FC\ newly enrolling CMHCs fit within the moderate 
risk category and are subject to unannounced physical site visits in addition to other screening 
measures such as licensure checks. Those CMHCs already enrolled in Medicare will have to 
revalidate their Medicare enrollment beginning this year and will be subject to an unannounced 
physical site visit as part of the revalidation process. 
In addition, CMS implemented the Fraud Prevention System (FPS) in June of2011, which 
applies predictive analytic technology to claims prior to payment to identify aberrant and 
suspicious billing patterns. CMS uses the FPS to target investigative resources to suspect claims 
and providers, and swiftly imposes administrative action when warranted. The FPS has been 
running predictive algorithms and other sophisticated analytics nationwide against all Medicare 
fcc-for-service claims, including those submitted by CMHCs, home health age.ncics and 
suppliers of durable medical equipment, prosthetics, orthotics, and supplies claims. CMS is 
1 CMS 6028-FC entitled, "Medicare, Medicaid and Children's Health Insurance Programs; Additional Screening 
Requirements, Application Fees, Temporary Enrollment Moratoria, Payment Suspensions and Compliance Plans for 
Providers and Suppliers" was published in the Federal Register on February 2, 2011. 
Vulnerabilities in CMS's and Contractors' Activities To Detect and Deter Fraud in Community Mental Health Centers  29 
(OEI-04-11-00101)   
   
 
 
 
 
 
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Vulnerabilities in CMSs and Contractors Activities To Detect and Deter Fraud in Community Mental Health Centers  32 
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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 Durley, Deputy Regional Inspector General.   
Evan Godfrey 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 Latrice Rollins; central office staff 
who contributed include Sandy Khoury, Scott Horning, and Debra Roush.  
 
 
 
 
 
 
Vulnerabilities in CMSs and Contractors Activities To Detect and Deter Fraud in Community Mental Health Centers  33 
(OEI-04-11-00101) 
   
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.